10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2023

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 001-40625

Clover Leaf Capital Corp.

(Exact name of registrant as specified in its charter)

Delaware	86-2303279
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

c/o Yntegra Capital Investments, LLC 1450 Brickell Avenue, Suite 2520 Miami, FL	33131
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (305) 577-0031

Securities registered pursuant to Section 12(b) of the Act:

Title of each class:	Trading Symbol(s)	Name of each exchange on which registered:
Units, each consisting of one share of Class A Common Stock and one right to receive one-eighth (1/8) of one share of Class A Common Stock upon the consummation of an initial Business Combination	CLOEU	The Nasdaq Stock Market LLC
Class A Common Stock, par value $0.0001 per share	CLOE	The Nasdaq Stock Market LLC
Rights, every eight (8) Rights entitling the holder to receive one share of Class A Common Stock upon the consummation of an initial Business Combination	CLOER	The Nasdaq Stock Market LLC

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer, “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.  ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b).  ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☒ No ☐

The aggregate market value of the outstanding shares of the registrant’s Class A Common Stock, other than shares held by persons who may be deemed affiliates of the registrant, computed by reference to the closing price for the Class A Common Stock on June 30, 2023, the last business day of the registrant’s most recently completed second fiscal quarter, as reported on the Nasdaq Stock Market LLC was $17,037,435.

As of March 21, 2024, there were 5,320,507 shares of Class A Common Stock, par value $0.0001 per share, and 1 share of Class B Common Stock, par value $0.0001 per share of the registrant issued and outstanding. 

TABLE OF CONTENTS

		PAGE
PART I		1
Item 1.	Business.	1
Item 1A.	Risk Factors.	24
Item 1B.	Unresolved Staff Comments.	29
Item 1C.	Cybersecurity.	29
Item 2.	Properties.	29
Item 3.	Legal Proceedings.	29
Item 4.	Mine Safety Disclosures.	29
PART II		30
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.	30
Item 6.	[Reserved]	31
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	31
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk.	36
Item 8.	Financial Statements and Supplementary Data.	36
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.	36
Item 9A.	Controls and Procedures.	36
Item 9B.	Other Information.	38
Item 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.	38
PART III		39
Item 10.	Directors, Executive Officers and Corporate Governance.	39
Item 11.	Executive Compensation.	44
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	44
Item 13.	Certain Relationships and Related Transactions, and Director Independence.	46
Item 14.	Principal Accountant Fees and Services.	48
PART IV		49
Item 15.	Exhibit and Financial Statement Schedules.	49
Item 16.	Form 10-K Summary.	49

i

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Report (as defined below), including, without limitation, statements under “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations,” includes forward-looking statements within the meaning of Section 27A of the Securities Act (as defined below) and Section 21E of the Exchange Act (as defined below). These forward-looking statements can be identified by the use of forward-looking terminology, including the words “believes,” “estimates,” “anticipates,” “expects,” “intends,” “plans,” “may,” “will,” “potential,” “projects,” “predicts,” “continue,” or “should,” or, in each case, their negative or other variations or comparable terminology. There can be no assurance that actual results will not materially differ from expectations. Such statements include, but are not limited to, any statements relating to our ability to consummate any acquisition or other Business Combination (as defined below) and any other statements that are not statements of current or historical facts. These statements are based on Management’s (as defined below) current expectations, but actual results may differ materially due to various factors, including, but not limited to: 

● our ability to complete our initial Business Combination, including the Kustom Entertainment Business Combination (as defined below);

● our expectations around the performance of the prospective target business or businesses, such as Kustom Entertainment (as defined below);

● 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, as a result of which they would then receive expense reimbursements;

● the potential incentive to consummate an initial Business Combination with an acquisition target that subsequently declines in value or is unprofitable for public investors due to the low initial price for the Founder Shares (as defined below) paid by our Sponsor (as defined below) and Initial Stockholders (as defined below);

● our potential ability to obtain additional financing to complete our initial Business Combination;

● the ability of our officers and directors to generate additional potential acquisition opportunities, if needed;

● our pool of prospective target businesses;

● our public securities’ potential liquidity and trading;

● the lack of a market for our securities;

● the use of proceeds not held in the Trust Account (as defined below) or available to us from interest income on the Trust Account balance;

● the Trust Account not being subject to claims of third parties;

● the impact on the amount held in the Trust Account, our capitalization, principal stockholders and other impacts on our Company (as defined below) or Management Team should we seek to further extend the Combination Period (as defined below) consistent with applicable laws, regulations and stock exchange rules;

● our financial performance; or

● the other risks and uncertainties discussed in “Item 1A. Risk Factors” below.

Additionally, on January 24, 2024, the SEC (as defined below) adopted the 2024 SPAC Rules (as defined below), which will become effective on July 1, 2024, that will affect SPAC (as defined below) Business Combination transactions. The 2024 SPAC Rules require, among other matters, (i) additional disclosures relating to SPAC Business Combination transactions; (ii) additional disclosures relating to dilution and to conflicts of interest involving sponsors and their affiliates in both SPAC initial public offerings and Business Combination transactions; (iii) additional disclosures regarding projections included in SEC filings in connection with proposed Business Combination transactions; and (iv) the requirement that both the SPAC and its target company be co-registrants for Business Combination registration statements. In addition, the SEC’s adopting release provided guidance describing circumstances in which a SPAC could become subject to regulation under the Investment Company Act (as defined below), including its duration, asset composition, business purpose, and the activities of the SPAC and its management team in furtherance of such goals. The 2024 SPAC Rules may materially affect our ability to negotiate and complete our initial Business Combination and may increase the costs and time related thereto.

The forward-looking statements contained in this Report are based on our current expectations and beliefs concerning future developments and their potential effects on us. Future developments affecting us may not be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

ii

Unless otherwise stated in this Report, or the context otherwise requires, references to:

● “2022 Annual Report” are to our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, as filed with the SEC on April 14, 2023;

● “2022 Special Meeting” are to the special meeting of our stockholders held on October 19, 2022;

● “2023 Extension” are to extension of the Combination Period from July 22, 2023 to January 22, 2024, as approved by our stockholders at the 2023 Special Meeting (as defined below);

● “2023 Extension Note” are to the promissory note in the principal amount of up to $360,000 issued to our Sponsor on July 21, 2023 in connection with the 2023 Extension;

● “2023 Redemptions” are to the Redemption (as defined below) of 376,002 Public Shares (as defined below) held by our Public Stockholders (as defined below) that took place in connection with the 2023 Special Meeting;

● “2023 Special Meeting” are to the special meeting of our stockholders held on July 19, 2023;

● “2023 Working Capital Note” are to the promissory note in the principal amount of up to $300,000 issued to our Sponsor on July 24, 2023 for working capital expenses;

● “2024 Extension” are to extension of the Combination Period from January 22, 2024 to July 22, 2024, as approved by our stockholders at the 2024 Special Meeting (as defined below);

● “2024 Extension Note” are to the promissory note in the principal amount of up to $360,000 issued to our Sponsor on January 22, 2024 in connection with the 2024 Extension;

● “2024 Redemptions” are to the Redemption of 202,360 Public Shares owned by our Public Stockholders that took place in connection with the 2024 Special Meeting;

● “2024 SPAC Rules” are to the new rules and regulations for SPACs adopted by the SEC on January 24, 2024, which will become effective on July 1, 2024;

● “2024 Special Meeting” are to the special meeting of our stockholders held on January 17, 2024;

● “2024 Working Capital Note” are to the promissory note in the principal amount of up to $1,000,000 issued to our Sponsor on January 22, 2024 for working capital expenses;

● “Administrative Support Agreement” are to the Administrative Support Agreement, dated July 19, 2021, which we entered into with an affiliate of our Sponsor;

● “Amended and Restated Charter” are to our Amended and Restated Certificate of Incorporation, as amended and currently in effect;

● “Annual Meeting Requirement” are to requirement pursuant to Nasdaq (as defined below) Listing Rule 5620(a) that companies listed on Nasdaq hold  an annual meeting of shareholders within twelve months of their fiscal year end;

● “ASC” are to the FASB (as defined below) Accounting Standards Codification;

● “ASU” are to the FASB Accounting Standards Update;

● “Audit Committee” are to the audit committee of our Board of Directors (as defined below);

● “Board of Directors” or “Board” are to our board of directors;

● “Business Combination” are to a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses;

● “Class A Common Stock” are to shares of our Class A common stock, par value $0.0001 per share;

● “Class B Common Stock” are to shares of our Class B common stock, par value $0.0001 per share;

● “Closing” are to the consummation of the transactions contemplated by the Kustom Entertainment Merger Agreement (as defined below);

iii

● “Combination Period” are to the 36-month period, from the closing of the Initial Public Offering (as defined below) to July 22, 2024 (or such earlier date as determined by the Board), as extended by the July 2022 Extension (as defined below), October 2022 Extension (as defined below), 2023 Extension, and 2024 Extension, that we have to consummate an initial Business Combination, provided that the Combination Period may be further extended pursuant to an amendment to the Amended and Restated Charter and consistent with applicable laws, regulations and stock exchange rules;

● “Common Stock” are to the Class A Common Stock and the Class B Common Stock, together;

● “Company,” “our,” “we,” or “us” are to Clover Leaf Capital Corp., a Delaware corporation;

● “Continental” are to Continental Stock Transfer & Trust Company, trustee of our Trust Account and right agent of our Public Rights (as defined below);

● “Conversion Amendment Proposal” are to the proposal to amend the Amended and Restated Charter to provide for the elective right of holders of shares of Class B Common Stock to convert such shares into shares of Class A Common Stock, on a one-for-one basis at any time prior to the closing of a Business Combination, which was approved by our stockholders at the 2023 Special Meeting;

● “Conversion Units” are to units of our Company issuable upon conversion of the unpaid principal amount of the October 2022 Extension Note (as defined below) at the election of our Sponsor;

● “Delisting Notice” are to the notice from the Staff (as defined below) of Nasdaq issued to us on March 1, 2024;

● “DGCL” are to the Delaware General Corporation Law;

● “DWAC System” are to the Depository Trust Company’s Deposit/Withdrawal At Custodian System;

● “Effective Time” are to the time of filing of the Articles of Merger (as defined in the Kustom Entertainment Merger Agreement) for the Merger (as defined below) in form and substance reasonably acceptable to Kustom Entertainment (as defined below) and our Company with the Secretary of State of the State of Nevada in accordance with the relevant portions of the Nevada Revised Statutes, or such later time as may be specified in the Articles of Merger;

● “Exchange Act” are to the Securities Exchange Act of 1934, as amended;

● “Excise Tax” are to the U.S. federal 1% excise tax on certain repurchases of stock by publicly traded U.S. domestic corporations and certain U.S. domestic subsidiaries of publicly traded foreign corporations occurring on or after January 1, 2023 as provided for by the Inflation Reduction Act of 2022;

● “FASB” are to the Financial Accounting Standards Board;

● “FINRA” are to the Financial Industry Regulatory Authority;

● “Founder Share Conversion” are to the 3,457,806 shares of Class A Common Stock issued on July 20, 2023, following the approval of the Conversion Amendment Proposal by our stockholders at the 2023 Special Meeting to the Sponsor upon the conversion of an equal number of shares of Class B Common Stock held by the Sponsor as Founder Shares;

iv

● “Founder Shares” are to the shares of Class B Common Stock initially purchased by our Sponsor in the Private Placement (as defined below) and the shares of Class A Common Stock that (i) will be issued upon the automatic conversion of the shares of Class B Common Stock at the time of our Business Combination as described herein (for the avoidance of doubt, such Class A Common Stock will not be “Public Shares” (as defined below)) and (ii) were issued in connection with the Founder Share Conversion upon the conversion of an equal number of shares of Class B Common Stock;

● “GAAP” are to the accounting principles generally accepted in the United States of America;

● “IFRS” are to the International Financial Reporting Standards, as issued by the International Accounting Standards Board;

● “Initial Public Offering” or “IPO” are to the initial public offering that we consummated on July 22, 2021;

● “Initial Stockholders” are to our Sponsor and any other holders of our Founder Shares (or their permitted transferees) prior to our Initial Public Offering;

● “Investment Company Act” are to the Investment Company Act of 1940, as amended;

● “IPO Registration Statement” are to the Registration Statement on Form S-1 initially filed with the SEC on April 7, 2021, as amended, and declared effective on July 19, 2021 (File No. 333-255111);

● “JOBS Act” are to the Jumpstart Our Business Startups Act of 2012;

● “July 2022 Extension” are to extension of the Combination Period from July 22, 2022 to October 22, 2022, as requested by our Sponsor pursuant to our Amended and Restated Charter;

● “July 2022 Extension Note” are to the promissory note in the principal amount of $1,383,123 issued to our Sponsor on July 19, 2022, in connection with the July 2022 Extension;

● “Kustom Entertainment” are to Kustom Entertainment, Inc., a Nevada corporation;

● “Kustom Entertainment Business Combination” are to the transactions and agreements contemplated by the Kustom Entertainment Merger Agreement;

● “Kustom Entertainment Merger Agreement” are to the Agreement and Plan of Merger, dated as of June 1, 2023, we entered into with Merger Sub (as defined below), our Sponsor, Kustom Entertainment, and Kustom Entertainment Stockholder (as defined below);

● “Kustom Entertainment Registration Statement” are to the Registration Statement on Form S-4 we initially filed with the SEC on October 4, 2023, as amended (File No. 333-274851);

● “Kustom Entertainment Stockholder” are to Digital Ally, Inc., a Nevada corporation and the sole stockholder of Kustom Entertainment;

● “Management” or our “Management Team” are to our executive officers and directors;

● “March 2021 Promissory Note” are to the promissory note in the principal amount of $300,000 issued to our Sponsor on March 4, 2021.

● “Marcum” are to Marcum LLP, our independent registered public accounting firm;

● “Merger” are to Merger Sub merging with and into Kustom Entertainment, with Kustom Entertainment continuing as the surviving corporation and our wholly-owned subsidiary;

v

● “Merger Consideration” are to the aggregate merger consideration to be paid pursuant to the Kustom Entertainment Merger Agreement to the Kustom Entertainment Stockholder at the Effective Time in an amount equal to (i) $125 million, minus (ii) estimated consolidated indebtedness of Kustom Entertainment as of the date and time at which the Closing is actually held.

● “Merger Sub” are to CL Merger Sub, Inc., a Nevada corporation and our wholly-owned subsidiary;

● “Minimum Public Holders Requirement” are to minimum 300 public holders requirement for Nasdaq pursuant to Nasdaq Listing Rule 5550(a)(3);

● “Nasdaq” are to the Nasdaq Stock Market LLC;

● “October 2022 Extension” are to extension of the Combination Period from October 22, 2022 to July 22, 2023, as approved by our stockholders at the 2022 Special Meeting;

● “October 2022 Extension Note” are to the promissory note in the principal amount of $1,383,123 issued to our Sponsor on October 19, 2022 in connection with the October 2022 Extension;

● “Panel” are to the Nasdaq Hearings Panel;

● “PCAOB” are to the Public Company Accounting Oversight Board (United States);

● “Private Placement” are to the private placement of the Private Placement Units (as defined below) that occurred simultaneously with the closing of our Initial Public Offering;

● “Private Placement Rights” are to the rights included within the Private Placement Units purchased by our Sponsor and the Representative in the Private Placement;

● “Private Placement Shares” are to the shares of our Class A Common Stock included within the Private Placement Units purchased by our Sponsor, Initial Stockholders and the underwriters of the Initial Public Offering in the Private Placement;

● “Private Placement Units” are to the units issued to our Sponsor, Initial Stockholders and the underwriters of the Initial Public Offering in the Private Placement;

● “Public Rights” are to our Rights (as defined below) sold as part of the Units (as defined below) in our Initial Public Offering (whether they are purchased in our Initial Public Offering or thereafter in the open market);

● “Public Shares” are to the shares of Class A Common Stock sold as part of the Units in our Initial Public Offering (whether they were purchased in our Initial Public Offering or thereafter in the open market);

● “Public Stockholders” are to the holders of our Public Shares, including our Initial Stockholders and Management Team to the extent our Initial Stockholders and/or the members of our Management Team purchase Public Shares, provided that each Initial Stockholder’s and member of our Management Team’s status as a “Public Stockholder” will only exist with respect to such Public Shares;

vi

● “Redemption” are to the opportunity for our Public Stockholders to, in accordance with our organizational documents and the IPO Registration Statement, have their Public Shares redeemed for a pro rata portion of the funds in our Trust Account;

● “Registration Rights Agreement” are to the Registration Rights Agreement, dated July 19, 2021, which we entered into with the Sponsor and Initial Stockholders and the holders party thereto;

● “Report” are to this Annual Report on Form 10-K for the fiscal year ended December 31, 2023;

● “Representative” are to Maxim Group LLC, the representative of the underwriters in our Initial Public Offering;

● “Representative Shares” are to the 138,312 shares of our Class A Common Stock issued to the Representative and/or its designees upon the consummation of our Initial Public Offering (for the avoidance of doubt, such shares of Class A Common Stock are not “Public Shares”);

● “Rights” are to our rights, which each entitle the holder to receive one-eighth (1/8) of one share of Class A Common Stock upon the consummation of an initial Business Combination, and which rights include the Public Rights as well as the Private Placement Rights;

● “Sarbanes-Oxley Act” are to the Sarbanes-Oxley Act of 2002;

● “SEC” are to the U.S. Securities and Exchange Commission;

● “Securities Act” are to the Securities Act of 1933, as amended;

● “SPACs” are to special purpose acquisition companies;

● “Sponsor” are to Yntegra Capital Investments, LLC, a Delaware limited liability company, an affiliate of Yntegra Capital Management LLC;

● “Staff” are to the Listing Qualifications Department of Nasdaq;

● “Trust Account” are to the U.S.-based trust account in which an amount of $140,386,985 ($10.15 per Unit) from the net proceeds of the sale of the Units in our Initial Public Offering and the Private Placement Units was placed following the closing of our Initial Public Offering;

● “Trust Agreement” are to the Investment Management Trust Agreement, dated July 19, 2021, which we entered into with Continental, as trustee of the Trust Account;

● “Units” are to the units sold in our Initial Public Offering, which consist of one Public Share and one Public Right; and

● “Working Capital Loans” are to funds that, in order to provide working capital or finance transaction costs in connection with an initial Business Combination, the Initial Stockholders or an affiliate of the Initial Stockholders or certain of our directors and officers may, but are not obligated to, loan us.

vii

PART I

Item 1. Business.

Overview

We are a blank check company incorporated as a Delaware corporation whose business purpose is to effect an initial Business Combination with one or more businesses.

The 2024 SPAC Rules may materially affect our ability to negotiate and complete our initial Business Combination and may increase the costs and time related thereto.

Initial Public Offering

On July 22, 2021, we consummated our Initial Public Offering of 13,831,230 Units. Each Unit consists of one Public Share and one Public Right to receive one-eighth (1/8) of a share of Class A Common Stock upon the consummation of an initial Business Combination, with every eight (8) Public Rights entitling the holder thereof to receive one share of Class A Common Stock at the closing of the Business Combination. The Units were sold at a price of $10.00 per Unit, generating gross proceeds to our Company of $138,312,300.

Simultaneously with the closing of the Initial Public Offering, we completed the private sale of an aggregate of 675,593 units to our Sponsor and the Representative in the Private Placement at a purchase price of $10.00 per Private Placement Unit, generating gross proceeds of $6,755,930.

Upon the consummation of our Initial Public Offering, we also issued an additional 138,312 shares of Class A Common Stock, valued at $10.00 per share, to the Representative and/or its designees as Representative Shares.

A total of $140,386,985, comprised of $138,312,300 of the proceeds from the Initial Public Offering and $2,074,685 of the proceeds of the sale of the Private Placement Units, was placed in the Trust Account maintained by Continental, acting as trustee.

It is the job of our Sponsor and Management Team to complete our initial Business Combination. Our Management Team is led by Felipe MacLean, our President and CEO. We must complete our initial Business Combination by July 22, 2024. If our initial Business Combination is not consummated by July 22, 2024, then, unless our Board of Directors shall otherwise determine, our existence will terminate, and we will distribute all amounts in the Trust Account.

Extensions of our Combination Period

We originally had up to 12 months from the closing of our Initial Public Offering, or until July 22, 2022, to consummate an initial Business Combination. However, as requested by our Sponsor and as permitted under our Amended and Restated Charter on July 19, 2022, we extended the Combination Period by an additional three months from July 22, 2022 to October 22, 2022. In connection with the July 2022 Extension, our Sponsor caused to be deposited into the Trust Account an aggregate of $1,383,123 (representing $0.10 per Public Share). The July 2022 Extension was the first of three three-month extensions permitted under our Amended and Restated Charter.

In addition, at the 2022 Special Meeting held on October 19, 2022, our stockholders approved an amendment to our Amended and Restated Charter to extend the Combination Period from October 22, 2022 to July 22, 2023, or such earlier date as determined by our Board of Directors. In connection with the October 2022 Extension, Public Stockholders redeemed an aggregate 12,204,072 Public Shares, and our Sponsor loaned to the Company $1,383,123 ($0.85 per Public Share), which was deposited into the Trust Account.

At the 2023 Special Meeting held on July 19, 2023, our stockholders approved an amendment to our Amended and Restated Charter to extend the Combination Period from July 22, 2023 to January 22, 2024, or such earlier date as determined by our Board of Directors. In connection with the 2023 Extension, our Sponsor caused to be deposited into the Trust Account up to $360,000 (representing $0.048 per Public Share), which was deposited into the Trust Account.

At the 2024 Special Meeting held on January 17, 2024, our stockholders approved an amendment to our Amended and Restated Charter to extend the Combination Period from January 22, 2024 to July 22, 2024, or such earlier date as determined by our Board of Directors. In connection with the 2024 Extension, we issued to our Sponsor the 2024 Extension Note, pursuant to which the Sponsor may cause to be deposited into the Trust Account up to $360,000. As of March 5, 2024, $120,000 of the principal on the 2024 Extension Note has been deposited into the Trust Account.

As a result of the July 2022 Extension, October 2022 Extension, 2023 Extension, and 2024 Extension, we must complete our initial Business Combination by July 22, 2024.

We may seek to further extend the Combination Period consistent with applicable laws, regulations and stock exchange rules. Such an extension would require the approval of our Public Stockholders, who will be provided the opportunity to redeem all or a portion of their Public Shares. Such redemptions will likely have a material adverse effect on the amount held in our Trust Account, our capitalization, principal stockholders and other impacts on our Company or Management Team, such as our ability to maintain our listing on Nasdaq.

1

Kustom Entertainment Business Combination

The below subsection describes the material provisions of the Kustom Entertainment Merger Agreement, but does not purport to describe all the terms thereof. This summary of the Kustom Entertainment Merger Agreement is qualified in its entirety by reference to the complete text of the Kustom Entertainment Merger Agreement, a copy of which is filed hereto as Exhibit 2.1 and incorporated by reference herein. Unless otherwise defined herein, the capitalized terms used below have the same meanings given to them in the Kustom Entertainment Merger Agreement. Unless otherwise indicated, this Report does not assume the closing of the Kustom Entertainment Business Combination.

General Terms and Effects

On June 1, 2023, we entered into the Kustom Entertainment Merger Agreement with Merger Sub, the Sponsor, Kustom Entertainment, and the Kustom Entertainment Stockholder.

Pursuant to the Kustom Entertainment Merger Agreement, subject to the terms and conditions set forth therein upon the Closing, Merger Sub will merge with and into Kustom Entertainment, with Kustom Entertainment continuing as the surviving corporation in the Merger and our wholly-owned subsidiary. In the Merger, all of the issued and outstanding capital stock of Kustom Entertainment immediately prior to the Effective Time shall no longer be outstanding and shall automatically be cancelled and shall cease to exist, in exchange for the right for the Kustom Entertainment Stockholder to receive the Merger Consideration. Upon consummation of the Kustom Entertainment Business Combination, we will change our name to “Kustom Entertainment, Inc.”

Merger Consideration

The Merger Consideration will be an amount equal to (i) $125 million, minus (ii) the estimated consolidated indebtedness of Kustom Entertainment as of the date and time at which the Closing is actually held (the “Closing Indebtedness”). The Merger Consideration to be paid to the Kustom Entertainment Stockholder will be paid solely by the delivery of new shares of our Class A Common Stock, each valued at $11.14 per share. The Closing Indebtedness (and the resulting Merger Consideration) is based solely on estimates determined shortly prior to the Closing and is not subject to any post-Closing true-up or adjustment.

Representations and Warranties

The Kustom Entertainment Merger Agreement contains a number of representations and warranties by each of our Company, Merger Sub, Kustom Entertainment and the Kustom Entertainment Stockholder as of the date of the Kustom Entertainment Merger Agreement and as of the date of the Closing. Many of the representations and warranties are qualified by materiality or Material Adverse Effect. “Material Adverse Effect” as used in the Kustom Entertainment Merger Agreement means with respect to any specified person or entity, any fact, event, occurrence, change or effect that has had or would reasonably be expected to have, individually or in the aggregate, a material adverse effect on the business, assets, liabilities, results of operations, prospects or condition (financial or otherwise) of such person or entity and its subsidiaries, taken as a whole, or the ability of such person or entity or any of its subsidiaries on a timely basis to consummate the transactions contemplated by the Kustom Entertainment Merger Agreement or the ancillary documents to which it is a party or bound or to perform its obligations thereunder, in each case subject to certain customary exceptions. Certain of the representations are subject to specified exceptions and qualifications contained in the Kustom Entertainment Merger Agreement or in information provided pursuant to certain disclosure schedules to the Kustom Entertainment Merger Agreement. The representations and warranties made by us, Merger Sub, Kustom Entertainment and the Kustom Entertainment Stockholder are customary for transactions similar to the Kustom Entertainment Business Combination.

Covenants of the Parties

Each party agreed in the Kustom Entertainment Merger Agreement to use its commercially reasonable efforts to effect the Closing. The Kustom Entertainment Merger Agreement also contains certain customary covenants by each of the parties during the period between the signing of the Kustom Entertainment Merger Agreement and the earlier of the Closing or the termination of the Kustom Entertainment Merger Agreement in accordance with its terms (the “Interim Period”), including (1) the provision of access to their properties, books and personnel; (2) the operation of their respective businesses in the ordinary course of business; (3) provision of audited financial statements by Kustom Entertainment; (4) our public filings; (5) no insider trading; (6) notifications of certain breaches, consent requirements or other matters; (7) efforts to consummate the Closing and obtain third-party and regulatory approvals; (8) tax matters and transfer taxes; (9) further assurances; (10) public announcements and (11) confidentiality. Each party also agreed during the Interim Period not to solicit or enter into any inquiry, proposal or offer, or any indication of interest in making an offer or proposal for an alternative competing transactions, to notify the others as promptly as practicable in writing of the receipt of any inquiries, proposals or offers, requests for information or requests relating to an alternative competing transaction or any requests for non-public information relating to such transaction, and to keep the others informed of the status of any such inquiries, proposals, offers or requests for information. If Kustom Entertainment’s board of directors determines, after consultation with its financial advisors and outside legal counsel, that an unsolicited Acquisition Proposal constitutes a Company Superior Proposal it may, subject to giving Kustom Entertainment an opportunity to propose revisions to the Kustom Entertainment Merger Agreement which would cause such Company Superior Proposal to no longer constitute a Company Superior Proposal, cause Kustom Entertainment to terminate the Kustom Entertainment Merger Agreement in order to enter into a definitive agreement relating to such Company Superior Proposal and to pay us the Termination Fee (as defined below). There are also certain customary post-Closing covenants regarding (1) maintenance of books and records; (2) indemnification of directors and officers; and (3) use of Trust Account proceeds. We also agreed to seek and use our reasonable best efforts to obtain an extension of our deadline to consummate our initial Business Combination for an additional six months.

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The Kustom Entertainment Merger Agreement and the Closing thereby require the approval of both our stockholders and the Kustom Entertainment Stockholder. The Kustom Entertainment Stockholder has approved the Kustom Entertainment Business Combination. We agreed, as promptly as practicable after the date of the Kustom Entertainment Merger Agreement, to prepare, with reasonable assistance from the Company, and file with the SEC the Kustom Entertainment Registration Statement in connection with the registration under the Securities Act of the Merger Consideration shares and containing a proxy statement for the purpose of soliciting proxies from our stockholders to approve the Kustom Entertainment Merger Agreement, the Kustom Entertainment Business Combination and related matters (the “Clover Leaf Stockholder Approval”) at a special meeting of our stockholders (the “Clover Leaf Stockholder Meeting”) and providing such stockholders an opportunity to, in accordance with the our organizational documents and the IPO Registration Statement, have their Public Shares redeemed (the “Kustom Entertainment Redemption”) and, if necessary, for the issuance of the Merger Consideration to be issued to the Kustom Entertainment Stockholder.

The parties also agreed to take all necessary action, so that effective at the Closing, the entire board of directors of our Company (the “Post-Closing Board”) will consist of five individuals, a majority of whom shall be independent directors in accordance with Nasdaq requirements. Four of the members of the Post-Closing Board (at least one of whom shall be independent directors) will be designated by Kustom Entertainment prior to the Closing and one will be mutually agreed upon by Kustom Entertainment and us and will be independent. At or prior to the Closing, we will provide each of the director designees to the Post-Closing Board with a customary director indemnification agreement, in form and substance reasonably acceptable to such director. The parties also agreed to take all action necessary, so that the individuals serving as chief executive officer and chief financial officer, respectively, of our Company immediately after Closing will be the same individuals as that of Kustom Entertainment immediately prior to the Closing.

During the Interim Period, we may elect to seek subscription agreements with investors relating to a private equity investment in connection with the Kustom Entertainment Business Combination (including backstop arrangements) (a “PIPE Investment”) on terms agreeable to us and Kustom Entertainment, acting reasonably. Kustom Entertainment agreed to cooperate in connection with such PIPE Investment and use its commercially reasonable efforts to cause such PIPE Investment to occur, including having Kustom Entertainment’s senior management participate in any investor meetings and roadshows as reasonably requested by us. We will use commercially reasonable efforts to seek equity financing, whether through a private placement, forward purchase agreement, backstop arrangement or otherwise, that will provide PIPE Investments for a total of at least $10,000,000.

Survival

The representations and warranties of the parties terminate as of and do not survive the Closing, and there are no indemnification rights for another party’s breach. The covenants and agreements of the parties shall not survive the Closing, except those covenants and agreements to be performed after the Closing which covenants and agreements shall survive until fully performed.

Closing Conditions

The obligations of the parties to complete the Closing are subject to various conditions, including the following mutual conditions of the parties unless waived:

● receipt of the Clover Leaf Stockholder Approval;

● receipt of the Kustom Entertainment Stockholder written consent approving the Kustom Entertainment Business Combination;

● expiration of any applicable waiting period under any antitrust laws;

● receipt of requisite consents from governmental authorities to consummate the Kustom Entertainment Business Combination, and receipt of specified requisite consents from other third parties to consummate the Kustom Entertainment Business Combination;

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● the absence of any law or order that would prohibit the consummation of the Merger or other transactions contemplated by the Kustom Entertainment Merger Agreement;

● immediately prior to or upon the Closing, after giving effect to the completion of the Kustom Entertainment Redemption, the Company having net tangible assets of at least $5,000,001 unless the Company otherwise is exempt from the provisions of Rule 419 promulgated under the Securities Act;

● the members of the Post-Closing Board shall have been elected or appointed as of the Closing; and

●  the Kustom Entertainment Registration Statement shall have been declared effective by the SEC.

Unless waived by us, the obligations of our Company and Merger Sub to consummate the Merger are subject to the satisfaction of the following additional conditions, in addition to customary certificates and other closing deliverables:

● the representations and warranties of Kustom Entertainment being true and correct as of the date of the Kustom Entertainment Merger Agreement and as of the Closing (subject to Material Adverse Effect);

● Kustom Entertainment having performed in all material respects its obligations and complied in all material respects with its covenants and agreements under the Kustom Entertainment Merger Agreement required to be performed or complied with on or prior to the date of the Closing;

● absence of any Material Adverse Effect with respect to Kustom Entertainment, taken as a whole, since the date of the Kustom Entertainment Merger Agreement which is continuing and uncured;

● the Lock-Up Agreement (as defined below) and a non-competition entered into by the Kustom Entertainment Stockholder in favor of the Company and Kustom Entertainment, as well as certain new employment agreements with Kustom Entertainment executives, shall be in full force and effect in accordance with their terms as of the Closing; and

● Kustom Entertainment shall own all of the issued and outstanding capital stock of TicketSmarter, Inc.

Unless waived by Kustom Entertainment, the obligations of Kustom Entertainment to consummate the Merger are subject to the satisfaction of the following additional conditions:

● the representations and warranties of our Company and Merger Sub being true and correct as of the date of the Kustom Entertainment Merger Agreement and as of the Closing (subject to Material Adverse Effect);

● our Company and Merger Sub each having performed in all material respects our obligations and complied in all material respects with our covenants and agreements under the Kustom Entertainment Merger Agreement required to be performed or complied with on or prior to the date of the Closing;

● absence of any Material Adverse Effect with respect to our Company or Merger Sub, taken as a whole, since the date of the Kustom Entertainment Merger Agreement which is continuing and uncured;

● we shall be in compliance in all material respects with the reporting requirements applicable to us under the Exchange Act immediately prior to the Closing; and

● the Common Stock shall not have been suspended from trading as a result of a delisting from Nasdaq and shall have been approved for listing on Nasdaq, subject only to official notice of issuance thereof.

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Termination

The Kustom Entertainment Merger Agreement may be terminated under certain customary and limited circumstances at any time prior to the Closing, including:

● by mutual written consent of our Company and Kustom Entertainment;

● by either our Company or Kustom Entertainment if any of the conditions to Closing have not been satisfied or waived by July 22, 2023 (the “Outside Date”), provided that the Outside Date will be automatically extended for an additional period equal to the shortest of (i) six (6) months and (ii) the period ending on the last day of the Combination Period;

● by either our Company or Kustom Entertainment if a governmental authority of competent jurisdiction shall have issued an order or taken any other action permanently restraining, enjoining or otherwise prohibiting the transactions contemplated by the Kustom Entertainment Merger Agreement, and such order or other action has become final and non-appealable;

● by either our Company or Kustom Entertainment of the other party’s uncured breach (subject to certain materiality qualifiers);

● by us if there has been an event after the signing of the Kustom Entertainment Merger Agreement that has had a Material Adverse Effect on Kustom Entertainment and its subsidiaries taken as a whole that is continuing and uncured;

● by Kustom Entertainment if there has been an event after the signing of the Kustom Entertainment Merger Agreement that has had a Material Adverse Effect on the us and our subsidiaries taken as a whole that is continuing and uncured;

● by the us if (i) Kustom Entertainment does not deliver audited financial statements to us by June 30, 2023 or (ii) Kustom Entertainment’s revenue in the fiscal year ending December 31, 2022 calculated in accordance with Kustom Entertainment’s audited financial statements is more than five percent (5%) lower than the revenue in such fiscal year calculated in accordance with Kustom Entertainment’s unaudited financial statements;

● by either our Company or Kustom Entertainment if the Clover Leaf Stockholder Meeting is held and the Clover Leaf Stockholder Approval is not received; and

● by Kustom Entertainment if the written consent of the Kustom Entertainment Stockholder is revoked in the event Kustom Entertainment accepts a Superior Company Proposal as described above.

If the Kustom Entertainment Merger Agreement is terminated, all further obligations of the parties under the Kustom Entertainment Merger Agreement will terminate and will be of no further force and effect (except that certain obligations related to public announcements, confidentiality, fees and expenses, termination, waiver of claims against the trust, and certain general provisions will continue in effect), and no party will have any further liability to any other party thereto except for (i) liability for any willful breach of the Kustom Entertainment Merger Agreement prior to such termination and (ii) in the event that Kustom Entertainment terminates the Kustom Entertainment Merger Agreement pursuant to the Kustom Entertainment Stockholder rescinding its written consent approving the Kustom Entertainment Business Combination, Kustom Entertainment shall pay to the Company an amount equal to $1,750,000 plus all expenses incurred by the Company in connection with the Kustom Entertainment Merger Agreement (the “Termination Fee”).

Trust Account Waiver

Kustom Entertainment and the Kustom Entertainment Stockholder agreed that they and their affiliates will not have any right, title, interest or claim of any kind in or to any monies in our Trust Account held for our Public Stockholders, and agreed not to, and waived any right to, make any claim against the Trust Account (including any distributions therefrom).

Purchaser Representative

The Sponsor is serving as the purchaser representative under the Kustom Entertainment Merger Agreement, and in such capacity will represent the interests of our stockholders after the Closing (other than the Kustom Entertainment Stockholder) with respect to certain post-Closing matters under the Kustom Entertainment Merger Agreement and ancillary documents.

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Related Agreements

Lock-Up Agreement

Simultaneously with the execution and delivery of the Kustom Entertainment Merger Agreement, we entered into the lock-up agreement, dated as of June 1, 2023, with the Kustom Entertainment Stockholder and our Sponsor (the “Lock-Up Agreement”). Pursuant to the Lock-Up Agreement, the Kustom Entertainment Stockholder agreed not to, during the period commencing from the Closing and ending on the six (6) month anniversary of the Closing (subject to early release if the closing price of the Common Stock equals or exceeds $12.00 per share for any 20 out of 30 trading days commencing after the Closing and also subject to early release if we consummate a liquidation, merger, share exchange or other similar transaction with an unaffiliated third party that results in all of our stockholders having the right to exchange their equity holdings in the Company for cash, securities or other property): (x) lend, offer, pledge, hypothecate, encumber, donate, assign, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, any restricted securities, (y) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the restricted securities, or (z) publicly disclose the intention to do any of the foregoing, whether any such transaction described in clauses (x), (y) or (z) above is to be settled by delivery of restricted securities or other securities, in cash or otherwise (in each case, subject to certain limited permitted transfers where the recipient takes the shares subject to the restrictions in the Lock-Up Agreement). Eighty-five percent (85%) of the shares of Class A Common Stock to be received by the Kustom Entertainment Stockholder as Merger Consideration will be subject to the terms of the Lock-Up Agreement.

Sponsor Forfeiture Letter

Simultaneously with the execution and delivery of the Kustom Entertainment Merger Agreement, we entered into a letter agreement, dated as of June 1, 2023, with the Sponsor and the Chief Executive Officer of Kustom Entertainment (the “Sponsor Forfeiture Letter”), pursuant to which the Sponsor agreed to forfeit up to 345,780 shares of Class A Common Stock and transfer to the Chief Executive Officer of Kustom Entertainment up to 518,672 shares of Class A Common Stock (the “Earnout Shares”) (such shares of Class A Common Stock having been converted from shares of Class B Common Stock) held by the Sponsor, subject to the earnout provisions contained therein pertaining to the revenue of Kustom Entertainment for the fiscal years of 2023 and 2024, contingent and effective upon the Closing. If the revenue of the business for either of the fiscal years 2023 and 2024 of Kustom Entertainment (the “Earn-Out Period”) achieves certain benchmarks in the applicable fiscal year, 172,890 of the Sponsor’s Earnout Shares shall no longer be subject to forfeiture and the Sponsor shall transfer to the Chief Executive Officer of Kustom Entertainment 259,336 Earnout Shares (the “Earn-Out Payment”); provided, however, that in the event the benchmark revenue is not achieved on or before the end of the applicable fiscal year, then the Earn-Out Payment for such fiscal year shall be zero, and the Sponsor shall, effective immediately, surrender for cancellation and retirement by the Company such amount of Earnout Shares. The Sponsor agreed to forfeit up to an additional 864,452 shares of Class B Common Stock (or shares of Class A Common Stock, if such shares of Class B Common Stock have been converted to shares of Class A Common Stock prior to the Closing) (the “Adjustment Shares”), with the percentage of Adjustment Shares to be forfeited to be equal to the percentage of the Common Stock redeemed by the Public in connection with the Kustom Entertainment Redemption.

The foregoing descriptions of the Lock-Up Agreement and the Sponsor Forfeiture Letter do not purport to be complete and are qualified in their entirety by reference to the complete text of the Lock-up Agreement and the Sponsor Forfeiture Letter, copies of which are filed hereto as Exhibits 10.12 and 10.13, respectively.

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Founder Share Conversion

On July 20, 2023, following the approval of the Conversion Amendment Proposal by our stockholders at the 2023 Special Meeting, we issued an aggregate of 3,457,806 shares of Class A Common Stock to the Sponsor upon the conversion of an equal number of shares of Class B Common Stock held by the Sponsor as Founder Shares. The 3,457,806 shares of Class A Common Stock issued in connection with the Founder Share Conversion are subject to the same restrictions as applied to the Class B Common Stock before the Founder Share Conversion, including the Sponsor’s agreement not to transfer, assign or sell any of its Founder Shares until the earlier to occur of: (i) one year after the completion of a Business Combination or (ii) the date on which we complete a liquidation, merger, capital stock exchange or similar transaction that results in our stockholders having the right to exchange their shares of Common Stock for cash, securities or other property. Notwithstanding the foregoing, if the last reported sale price of the Class A Common Stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the Business Combination, the Founder Shares will be released from the lock-up. As a result of the Founder Share Conversion, the 2023 Redemptions and the 2024 Redemptions, the Sponsor holds approximately 75.7% of the issued and outstanding shares of Common Stock.

Business Strategy

Our business strategy is to identify and complete one or more Business Combinations that is compliant with all applicable laws and regulations within the jurisdictions in which it is located or operates. We have been seeking companies that we believe can efficiently deploy new capital while benefiting from our industry know-how and management team. The goal of our Business Combination is to achieve revenue growth and to increase profitability. These objectives can be achieved both through acquisitions and/or through organic growth. We are looking for targets that can benefit from one or more of the following: investment in research and development, new technologies and/or additional infrastructure, in order to achieve a dominant position in their market and/or entry in new ones.

While we may pursue a Business Combination target in any business, industry or geographical location (such as the Kustom Entertainment Business Combination), we have finished our search for businesses in the cannabis industry that are compliant with all applicable laws and regulations within the jurisdictions in which they are located or operate, and, in particular, we will not invest in, or consummate a business combination with, a target business that we determine has been operating, or whose business plan is to operate, in violation of U.S. federal laws.

While evaluating any Business Combination, our team believes that the stage of the market should be considered, whether it’s a new, transitioning, or a mature market.

● Companies in new and transitioning markets will have a first mover advantage, with significant revenue potential and profit margins. As inexperienced competition enters these markets, supply increases with the resulting sales erosion. If the cyclical nature of the new market strategy is understood and proper practices are applied, our team believes that there is opportunity to capture significant revenues while building a sustainable and established business.

● Companies in mature markets experience less volatility and more market/price stability. This stability allows for a traditional approach in managing the business, market growth, operations & forecasting sales.

● Entering either a new market or a mature market both have a positive and negative effect, with mature markets typically offering better stability but less growth potential.

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Business Combination Criteria

Consistent with our business strategy, we have identified the following general criteria and guidelines that we believe are important in evaluating prospective target businesses, including Kustom Entertainment. While we have used and will continue to use these criteria and guidelines in evaluating initial Business Combination opportunities, including the Kustom Entertainment Business Combination, we may decide to enter into our initial Business Combination with a target business that meets some, but not all of these criteria and guidelines. While we utilize these criteria in evaluating business combination opportunities, no individual criterion will entirely determine a decision to pursue a particular opportunity.

● Company Size. We seek to acquire one or more businesses with an enterprise value of $200 million or more, determined in the sole discretion of our officers and directors according to reasonable accepted valuation standards and methodologies. We believe this segment provides the most synergistic opportunities for investment and where we believe we have the strongest network and data to identify opportunities.

● Emerging Growth Stories. We seek to acquire one or more businesses or assets that have (i) a history of, or potential for, outpacing their peers in terms of earnings and industry performance, (ii) a good growth market, (iii) a record of strong growth in sales and (iv) a large target addressable market.

● Growth Opportunities Through Capital Investment. We seek candidates who will benefit from additional capital investment through a Business Combination with a public vehicle.

● Clear Competitive Advantages. We seek candidates that will benefit not only from the strong fundamentals of the industry, but also that have differentiating elements from its competitors.

● Strong Revenue Growth and/or Proven Brands. We seek candidates who have strong revenue growth stories and or proven brands. We seek to partner with the potential target’s management team and expect that the operating and financial abilities of our Management and Board will help the potential target company unlock opportunities for future growth and enhanced profitability.

● Opportunities for Add-On Acquisitions. We seek to acquire one or more businesses that we can grow both organically and through acquisitions. In addition, we believe that our ability to source proprietary opportunities and execute such transactions will help the business we acquire grow through acquisition, and thus serve as a platform for further add-on acquisitions.

● Benefit from Being a Public Company. We are pursuing a Business Combination with a company that we believe will benefit from being publicly traded and can effectively utilize the broader access to capital and public profile that are associated with being a publicly traded company.

● Focus on Risk-Adjusted Return. We intend to acquire one or more companies that we believe can offer attractive risk-adjusted return on investments for our stockholders.

These criteria are not intended to be exhaustive. Any evaluation relating to the merits of a particular initial business combination may be based, to the extent relevant, on these general guidelines as well as other considerations, factors and criteria that our Management may deem relevant.

In the event that we decide to enter into our initial Business Combination with a target business that meets some, but not all of the above criteria and guidelines, we will disclose that the target business meets some but not all of the above criteria in our stockholder communications related to our initial Business Combination, which would be in the form of proxy solicitation materials or tender offer documents that we would file with the SEC, such as the Kustom Entertainment Registration Statement.

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Initial Business Combination

Nasdaq rules require that we complete one or more Business Combinations having an aggregate fair market value of at least 80% of the value of the assets held in the Trust Account (excluding the deferred underwriting commissions and taxes payable on the interest earned on the Trust Account) at the time of our signing a definitive agreement in connection with our initial Business Combination. Our Board of Directors will make the determination as to the fair market value of our initial Business Combination. If our Board of Directors is not able to independently determine the fair market value of our initial Business Combination, we will obtain an opinion from an independent investment banking firm that is a member of FINRA or an independent accounting firm with respect to the satisfaction of such criterion. While we consider it unlikely that our Board of Directors will not be able to make an independent determination of the fair market value of our initial Business Combination, it may be unable to do so if it is less familiar or experienced with the business of a particular target or if there is a significant amount of uncertainty as to the value of a target’s assets or prospects. Additionally, pursuant to Nasdaq rules, any initial Business Combination must be approved by a majority of our independent directors. Based on the valuation analysis of our Management and Board of Directors, we have determined that the fair market value of Kustom Entertainment was substantially in excess of 80% of the funds in the Trust Account and that the 80% test was therefore satisfied.

We will have until July 22, 2024 (36 months from the closing of our Initial Public Offering) to consummate an initial Business Combination. We anticipate structuring our initial Business Combination either (i) in such a way so that the post-transaction company in which our Public Stockholders own shares will own or acquire 100% of the equity interests or assets of the target business or businesses, or (ii) in such a way so that the post-transaction company owns or acquires less than 100% of such interests or assets of the target business in order to meet certain objectives of the target management team or stockholders, or for other reasons. However, we will only complete an initial Business Combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act. Even if the post-transaction company owns or acquires 50% or more of the voting securities of the target, our stockholders prior to the initial Business Combination may collectively own a minority interest in the post-transaction company, depending on valuations ascribed to the target and us in the initial Business Combination. For example, we could pursue a transaction in which we issue a substantial number of new shares in exchange for all of the outstanding capital stock of a target. In this case, we would acquire a 100% controlling interest in the target.

However, as a result of the issuance of a substantial number of new shares, our stockholders immediately prior to our initial Business Combination could own less than a majority of our outstanding shares subsequent to our initial Business Combination. If less than 100% of the equity interests or assets of a target business or businesses are owned or acquired by the post-transaction company, the portion of such business or businesses that is owned or acquired is what will be taken into account for purposes of Nasdaq’s 80% of net assets test. If the initial Business Combination involves more than one target business, the 80% of net assets test will be based on the aggregate value of all of the transactions and we will treat the target businesses together as the initial Business Combination for purposes of a tender offer or for seeking stockholder approval, as applicable.

Our Business Combination Process

In evaluating prospective Business Combinations, such as the Kustom Entertainment Business Combination, we conduct a thorough due diligence review process that encompasses, among other things, a review of historical and projected financial and operating data, meetings with management and their advisors (if applicable), on-site inspection of facilities and assets, discussion with customers and suppliers, legal reviews and other reviews as we deem appropriate.

We are not prohibited from pursuing an initial Business Combination with a company that is affiliated with our Sponsor or our officers or directors. While Kustom Entertainment is not affiliated with our Sponsor, executive officers or directors, in the event we do not consummate the Kustom Entertainment Business Combination and we seek to complete our initial Business Combination with a company that is affiliated with our Sponsor, officers or directors, we, or a committee of independent directors, will obtain an opinion from an independent investment banking firm that is a member of FINRA or an independent accounting firm that our initial Business Combination is fair to our Company from a financial point of view.

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Our officers and directors indirectly own Founder Shares and/or Private Placement Units. Because of this ownership, our Sponsor and our officers and directors may have a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate our initial Business Combination. Further, each of our officers and directors may have a conflict of interest with respect to evaluating a particular Business Combination if the retention or resignation of any such officers and directors were to be included by a target business as a condition to any agreement with respect to our initial Business Combination.

Each of our officers and directors presently has, and any of them in the future may have additional, fiduciary or contractual obligations to other entities pursuant to which such officer or director is or will be required to present a Business Combination opportunity. Accordingly, if any of our officers or directors becomes aware of a Business Combination opportunity that is suitable for an entity to which he or she has then-current fiduciary or contractual obligations, he or she has honored and will continue to honor his or her fiduciary or contractual obligations to present such opportunity to such entity. We believe, however, that the fiduciary duties or contractual obligations of our officers or directors will not materially affect our ability to complete our initial Business Combination. Our Amended and Restated Charter provides that we renounce our interest in any corporate opportunity offered to any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of our Company and such opportunity is one we are legally and contractually permitted to undertake and would otherwise be reasonable for us to pursue, and to the extent the director or officer is permitted to refer that opportunity to us without violating another legal obligation.

Our Sponsor, officers and directors may participate in the formation of, or become an officer or director of, any other blank check company prior to completion of our initial Business Combination. As a result, our Sponsor, officers or directors could have conflicts of interest in determining whether to present Business Combination opportunities to us or to any other blank check company with which they may become involved.

Our Management Team

Members of our Management Team are not obligated to devote any specific number of hours to our matters, but they devote as much of their time as they deem necessary to our affairs and intend to continue doing so until we have completed our initial Business Combination. The amount of time that any member of our Management Team devotes in any time period may vary based on whether a target business has been selected for our initial Business Combination and the current stage of the Business Combination process.

We believe our Management Team’s operating and transaction experience and relationships with companies provide us with a substantial number of potential Business Combination targets. Over the course of their careers, the members of our Management Team have developed a broad network of contacts and corporate relationships in various industries. This network has grown through the activities of our Management Team sourcing, acquiring and financing businesses, our Management Team’s relationships with sellers, financing sources and target management teams and the experience of our Management Team in executing transactions under varying economic and financial market conditions.

Status as a Public Company

We believe our structure makes us an attractive Business Combination partner to target businesses, such as Kustom Entertainment. As an existing public company, we offer a target business an alternative to the traditional initial public offering through a merger or other Business Combination with us. Following an initial Business Combination, we believe the target business would have greater access to capital and additional means of creating management incentives that are better aligned with stockholders’ interests than it would as a private company. A target business can further benefit by augmenting its profile among potential new customers and vendors and aid in attracting talented employees. In a Business Combination transaction with us, the owners of the target business may, for example, exchange their shares of stock in the target business for our shares of Class A Common Stock (or shares of a new holding company) or for a combination of our shares of Class A Common Stock and cash, allowing us to tailor the consideration to the specific needs of the sellers. See “Kustom Entertainment Business Combination” above for more information regarding such an exchange in the Kustom Entertainment Business Combination.

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Although there are various costs and obligations associated with being a public company, we believe target businesses will find this method a more expeditious and cost-effective method to becoming a public company than the typical Initial Public Offering. The typical Initial Public Offering process takes a significantly longer period of time than the typical Business Combination transaction process, and there are significant expenses in the Initial Public Offering process, including underwriting discounts and commissions, marketing and road show efforts that may not be present to the same extent in connection with an initial Business Combination with us.

Furthermore, once a proposed initial Business Combination such as the Kustom Entertainment Business Combination, is completed, the target business will have effectively become public, whereas an initial public offering is always subject to the underwriters’ ability to complete the offering, as well as general market conditions, which could delay or prevent the offering from occurring or could have negative valuation consequences. Following an initial Business Combination, we believe the target business would then have greater access to capital and an additional means of providing management incentives consistent with stockholders’ interests and the ability to use its shares as currency for acquisitions. Being a public company can offer further benefits by augmenting a company’s profile among potential new customers and vendors and aid in attracting talented employees.

While we believe that our structure and our Management Team’s backgrounds make us an attractive business partner, some potential target businesses may view our status as a blank check company, such as our lack of an operating history and our ability to seek stockholder approval of any proposed initial Business Combination, negatively.

Financial Position

With funds available in the Trust Account for an initial Business Combination in the amount of approximately $14,648,926 as of December 31, 2023, before (i) payment of $4,840,931 of deferred underwriting fees, fees and expenses associated with our initial Business Combination and (iii) taxes payable on the income earned on the Trust Account, we offer a target business, such as Kustom Entertainment, a variety of options such as creating a liquidity event for its owners, providing capital for the potential growth and expansion of its operations or strengthening its balance sheet by reducing its debt or leverage ratio. Because we are able to complete our initial Business Combination using our cash, debt or equity securities, or a combination of the foregoing, we have the flexibility to use the most efficient combination that will allow us to tailor the consideration to be paid to the target business to fit its needs and desires. However, we have not taken any steps to secure third-party financing and there can be no assurance it will be available to us.

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Effecting Our Initial Business Combination

We are not presently engaged in, and we will not engage in, any operations for an indefinite period of time. We intend to effectuate our initial Business Combination using cash from the proceeds of our Initial Public Offering and the Private Placement, the proceeds of the sale of our shares in connection with our Initial Business Combination (including pursuant to any forward purchase agreements or backstop agreements we may enter into or otherwise), shares issued to the owners of the target, debt issued to bank or other lenders or the owners of the target, or a combination of the foregoing. We may seek to complete our initial Business Combination with a company or business that may be financially unstable or in its early stages of development or growth, which would subject us to the numerous risks inherent in such companies and businesses.

If our Initial Business Combination is paid for using equity or debt securities, or not all of the funds released from the Trust Account are used for payment of the consideration in connection with our Initial Business Combination or used for redemptions of our Class A Common Stock, we may apply the balance of the cash released to us from the Trust Account for general corporate purposes, including for maintenance or expansion of operations of the post-transaction company, the payment of principal or interest due on indebtedness incurred in completing our Initial Business Combination, to fund the purchase of other companies or for working capital.

We may seek to raise additional funds through a private offering of debt or equity securities in connection with the completion of our initial Business Combination, and we may effectuate our initial Business Combination using the proceeds of such offering rather than using the amounts held in the Trust Account. In addition, we are targeting businesses larger than we could acquire with the net proceeds of our Initial Public Offering and the Private Placement and may as a result be required to seek additional financing to complete such proposed initial Business Combination. Subject to compliance with applicable securities laws, we would expect to complete such financing only simultaneously with the completion of our initial Business Combination. In the case of an initial Business Combination funded with assets other than the Trust Account assets, our proxy materials or tender offer documents disclosing the initial Business Combination would disclose the terms of the financing and, only if required by law, we would seek stockholder approval of such financing. There are no prohibitions on our ability to raise funds privately, or through loans in connection with our initial Business Combination. At this time, we are not a party to any arrangement or understanding with any third party with respect to raising any additional funds through the sale of securities or otherwise.

Sources of Target Businesses

We have received and may continue to receive a number of proprietary transaction opportunities to originate as a result of the business relationships, direct outreach, and deal sourcing activities of our Management Team. In addition to the proprietary deal flow, target business candidates have been and may continue to be brought to our attention from various unaffiliated sources, including investment bankers and investment professionals. Target businesses may be brought to our attention by such unaffiliated sources as a result of being solicited by us by calls or mailings. Our officers and directors, as well as our Sponsor and their affiliates, may also bring to our attention target business candidates that they become aware of through their business contacts as a result of formal or informal inquiries or discussions they may have, as well as attending trade shows or conventions. In addition, we may receive a number of proprietary deal flow opportunities that would not otherwise necessarily be available to us as a result of the business relationships of our officers and directors and our Sponsor and their affiliates. While we do not presently anticipate engaging the services of professional firms or other individuals that specialize in business acquisitions on any formal basis, we may engage these firms or other individuals in the future, in which event we may pay a finder’s fee, consulting fee, advisory fee or other compensation to be determined in an arm’s length negotiation based on the terms of the transaction. We expect to engage a finder only to the extent our Management determines that the use of a finder may bring opportunities to us that may not otherwise be available to us or if finders approach us on an unsolicited basis with a potential transaction that our Management determines is in our best interest to pursue. Payment of finder’s fees is customarily tied to completion of a transaction, in which case any such fee will be paid out of the funds held in the Trust Account. In no event, however, will our Sponsor or any of our existing officers or directors, or any entity with which our Sponsor or officers are affiliated, be paid any finder’s fee, reimbursement, consulting fee, monies in respect of any payment of a loan or other compensation by the company prior to, or in connection with any services rendered for any services it renders in order to effectuate, the completion of our initial Business Combination (regardless of the type of transaction that it is). None of our Sponsor, executive officers or directors, or any of their respective affiliates, will be allowed to receive any compensation, finder’s fees or consulting fees from a prospective Business Combination target in connection with a contemplated initial Business Combination. We have agreed to pay an affiliate of our Sponsor a total of $10,000 per month for office space, utilities and secretarial and administrative support pursuant to the Administrative Support Agreement and to reimburse our Sponsor for any out-of-pocket expenses related to identifying, investigating and completing an initial Business Combination. Some of our officers and directors may enter into employment or consulting agreements with the post-transaction company following our initial Business Combination. The presence or absence of any such fees or arrangements will not be used as a criterion in our selection process of an initial Business Combination candidate.

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We are not prohibited from pursuing an initial business combination with a business that is affiliated with our Sponsor, officers or directors or making the initial Business Combination through a joint venture or other form of shared ownership with our Sponsor, officers or directors. While Kustom Entertainment is not affiliated with our Sponsor, executive officers or directors, in the event we do not consummate the Kustom Entertainment Business Combination and we seek to complete our initial Business Combination with an initial Business Combination target that is affiliated with our Sponsor, officers or directors, we, or a committee of independent directors, would obtain an opinion from an independent investment banking firm which is a member of FINRA or an independent accounting firm that such an initial business combination is fair to our company from a financial point of view. We are not required to obtain such an opinion in any other context.

If any of our officers or directors becomes aware of an initial Business Combination opportunity that falls within the line of business of any entity to which he or she has pre-existing fiduciary or contractual obligations, he or she may be required to present such Business Combination opportunity to such entity prior to presenting such Business Combination opportunity to us. Our officers and directors currently have certain relevant fiduciary duties or contractual obligations that may take priority over their duties to us.

Selection of a Target Business and Structuring of our Initial Business Combination

Nasdaq rules require that we complete one or more Business Combinations having an aggregate fair market value of at least 80% of the value of the assets held in the Trust Account (excluding the deferred underwriting commissions and taxes payable on the interest earned on the Trust Account) at the time of our signing a definitive agreement in connection with our initial Business Combination. The fair market value of our initial Business Combination will be determined by our Board of Directors based upon one or more standards generally accepted by the financial community, such as discounted cash flow valuation, a valuation based on trading multiples of comparable public businesses or a valuation based on the financial metrics of mergers and acquisitions transactions of comparable businesses. If our Board of Directors is not able to independently determine the fair market value of our initial Business Combination, we will obtain an opinion from an independent investment banking firm that is a member of FINRA or an independent accounting firm with respect to the satisfaction of such criteria. While we consider it unlikely that our Board of Directors will not be able to make an independent determination of the fair market value of our initial Business Combination, it may be unable to do so if it is less familiar or experienced with the business of a particular target or if there is a significant amount of uncertainty as to the value of a target’s assets or prospects. We do not intend to purchase multiple businesses in unrelated industries in conjunction with our initial Business Combination. Subject to this requirement, our Management will have virtually unrestricted flexibility in identifying and selecting one or more prospective target businesses, although we will not be permitted to effectuate our initial Business Combination with another blank check company or a similar company with nominal operations.

In any case, we will only complete an initial Business Combination in which we own or acquire 50% or more of the outstanding voting securities of the target or otherwise acquire a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act. If we own or acquire less than 100% of the equity interests or assets of a target business or businesses, the portion of such business or businesses that are owned or acquired by the post-transaction company is what will be taken into account for purposes of Nasdaq’s 80% of net assets test.

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To the extent we effect our initial Business Combination with a company or business that may be financially unstable or in its early stages of development or growth, we may be affected by numerous risks inherent in such company or business. Although our Management will endeavor to evaluate the risks inherent in a particular target business, we cannot assure you that we will properly ascertain or assess all significant risk factors.

In evaluating a prospective business target, we conduct a thorough due diligence review, which encompasses, among other things, meetings with incumbent management and employees, document reviews, interviews of customers and suppliers, inspection of facilities, as well as a review of financial and other information that is made available to us.

The time required to structure and complete our initial Business Combination, and the costs associated with this process, is not currently ascertainable with any degree of certainty. Any costs incurred with respect to the identification and evaluation of a prospective target business with which our initial Business Combination is not ultimately completed will result in our incurring losses and will reduce the funds we can use to complete another Business Combination.

Lack of Business Diversification

For an indefinite period of time after the completion of our initial Business Combination, the prospects for our success may depend entirely on the future performance of a single business. Unlike other entities that have the resources to complete Business Combinations with multiple entities in one or several industries, it is probable that we will not have the resources to diversify our operations and mitigate the risks of being in a single line of business. In addition, we are focusing our search for an initial Business Combination in a single industry. By completing our initial Business Combination with only a single entity, our lack of diversification may:

● subject us to negative economic, competitive and regulatory developments, any or all of which may have a substantial adverse impact on the particular industry in which we operate after our initial Business Combination, and

● cause us to depend on the marketing and sale of a single product or limited number of products or services.

Limited Ability to Evaluate the Target’s Management Team

Although we closely scrutinize the management of a prospective target business, including the management team of Kustom Entertainment, when evaluating the desirability of effecting our initial Business Combination with that business, and plan to continue to do so if the Kustom Entertainment Business Combination is not consummated and we seek other Business Combination opportunities, our assessment of the target business’ management may not prove to be correct. In addition, the future management may not have the necessary skills, qualifications or abilities to manage a public company. Furthermore, the future role of members of our Management Team, if any, in the target business cannot presently be stated with any certainty. The determination as to whether any of the members of our Management Team will remain with the combined company will be made at the time of our initial Business Combination. While it is possible that one or more of our directors will remain associated in some capacity with us following our initial Business Combination, including the Kustom Entertainment Business Combination, it is unlikely that any of them will devote their full efforts to our affairs subsequent to our initial Business Combination.

We cannot assure you that any of our key personnel will remain in senior management or advisory positions with the combined company. The determination as to whether any of our key personnel will remain with the combined company will be made at the time of our initial Business Combination.

Following an initial Business Combination, we may seek to recruit additional managers to supplement the incumbent management of the target business. We cannot assure you that we will have the ability to recruit additional managers, or that additional managers will have the requisite skills, knowledge or experience necessary to enhance the incumbent management.

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Stockholders May Not Have the Ability to Approve Our Initial Business Combination

We may conduct redemptions without a stockholder vote pursuant to the tender offer rules of the SEC. However, we will seek stockholder approval if it is required by law or applicable stock exchange rule (as is the case for Kustom Entertainment as currently contemplated), or we may decide to seek stockholder approval for business or other legal reasons. Presented in the table below is a graphic explanation of the types of initial Business Combinations we may consider and whether stockholder approval is currently required under Delaware law for each such transaction.

Type of Transaction	Whether Stockholder Approval Is Required
Purchase of assets	No
Purchase of stock of target not involving a merger with the company	No
Merger of target into a subsidiary of the company	No
Merger of our Company with a target	Yes

Under Nasdaq’s listing rules, stockholder approval would be required for our initial Business Combination if, for example:

● we issue shares of Class A Common Stock that will be equal to or in excess of 20% of the number of shares of our Class A Common Stock then outstanding;

● any of our directors, officers or substantial stockholders (as defined by Nasdaq rules) has a 5% or greater interest (or such persons collectively have a 10% or greater interest), directly or indirectly, in the target business or assets to be acquired or otherwise and the present or potential issuance of Common Stock could result in an increase in outstanding common shares or voting power of 5% or more; or

● the issuance or potential issuance of Common Stock will result in our undergoing a change of control.

The decision as to whether we will seek stockholder approval of a proposed Business Combination in those instances in which stockholder approval is not required by applicable law or stock exchange rules will be made by us, solely in our discretion, and will be based on business and legal reasons, which include a variety of factors,

including, but not limited to:

● the timing of the transaction, including in the event we determine stockholder approval would require additional time and there is either not enough time to seek stockholder approval or doing so would place the company at a disadvantage in the transaction or result in other additional burdens on us;

● the expected cost of holding a stockholder vote;

● the risk that the stockholders would fail to approve the proposed Business Combination;

● other time and budget constraints of the Company; and

● additional legal complexities of a proposed Business Combination that would be time-consuming and burdensome to present to stockholders.

See “Kustom Entertainment Business Combination” above for more information regarding the requisite approvals needed in the Kustom Entertainment Business Combination.

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Permitted Purchases of our Securities

If we seek stockholder approval of our initial Business Combination and we do not conduct redemptions in connection with our initial Business Combination pursuant to the tender offer rules, our Sponsor, Initial Stockholders, directors, officers, advisors or their affiliates may purchase Public Shares or Public Rights in privately negotiated transactions or in the open market either prior to or following the completion of our initial Business Combination. There is no limit on the number of Public Shares our Initial Stockholders, directors, officers, advisors or their affiliates may purchase in such transactions, subject to compliance with applicable law and Nasdaq rules. However, they have no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions. If they engage in such transactions, they will not make any such purchases when they are in possession of any material nonpublic information not disclosed to the seller or if such purchases are prohibited by Regulation M under the Exchange Act. We do not currently anticipate that such purchases, if any, would constitute a tender offer subject to the tender offer rules under the Exchange Act or a going-private transaction subject to the going-private rules under the Exchange Act; however, if the purchasers determine at the time of any such purchases that the purchases are subject to such rules, the purchasers will comply with such rules. Any such purchases will be reported pursuant to Section 13 and Section 16 of the Exchange Act to the extent such purchasers are subject to such reporting requirements. None of the funds held in the Trust Account will be used to purchase shares or Public Rights in such transactions prior to completion of our initial Business Combination.

The purpose of any such purchases of Public Shares could be to vote such shares in favor of the initial Business Combination and thereby increase the likelihood of obtaining stockholder approval of the initial Business Combination or to satisfy a closing condition in an agreement with a target that requires us to have a minimum net worth or a certain amount of cash at the closing of our initial Business Combination, where it appears that such requirement would otherwise not be met. The purpose of any such purchases of Public Rights could be to reduce the number of rights, or underlying securities, outstanding. Any such purchases of our securities may result in the completion of our initial Business Combination that may not otherwise have been possible. In addition, if such purchases are made, the public “float” of our shares of Class A Common Stock or rights may be reduced and the number of beneficial holders of our securities may be reduced, which may make it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange.

Our Sponsor, officers, directors and/or their affiliates anticipate that they may identify the Public Stockholders with whom our Sponsor, officers, directors or their affiliates may pursue privately negotiated purchases by either the Public Stockholders contacting us directly or by our receipt of redemption requests submitted by Public Stockholders following our mailing of proxy materials in connection with our initial Business Combination. To the extent that our Sponsor, officers, directors, advisors or their affiliates enter into a private purchase, they would identify and contact only potential selling Public Stockholders who have expressed their election to redeem their Public Shares for a pro-rata share of the Trust Account or vote against our initial Business Combination, whether or not such Public Stockholder has already submitted a proxy with respect to our initial Business Combination. Our Sponsor, officers, directors, advisors or their affiliates will only purchase Public Shares if such purchases comply with Regulation M under the Exchange Act and the other federal securities laws.

Any purchases by our Sponsor, officers, directors and/or their affiliates who are affiliated purchasers under Rule 10b-18 under the Exchange Act will only be made to the extent such purchases are able to be made in compliance with Rule 10b-18, which is a safe harbor from liability for manipulation under Section 9(a)(2) and Rule 10b-5 of the Exchange Act. Rule 10b-18 has certain technical requirements that must be complied with in order for the safe harbor to be available to the purchaser. Our Sponsor, officers, directors and/or their affiliates will not make purchases of Common Stock if the purchases would violate Section 9(a)(2) or Rule 10b-5 of the Exchange Act. Any such purchases will be reported pursuant to Section 13 and Section 16 of the Exchange Act to the extent such purchases are subject to such reporting requirements.

See “Kustom Entertainment Business Combination” above for more information regarding such purchases in connection with the Kustom Entertainment Business Combination.

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Redemption Rights for Public Stockholders upon Completion of our Initial Business Combination

We will provide our Public Stockholders with Redemption opportunities upon the completion of our initial Business Combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account as of two business days prior to the consummation of the initial Business Combination, such as the Kustom Entertainment Business Combination, including interest earned on the funds held in the Trust Account and not previously released to us to pay our franchise and income taxes, divided by the number of then outstanding Public Shares, subject to the limitations described herein. The amount in the Trust Account as of December 31, 2023 was approximately $11.85 per Public Share. The per-share amount we will distribute to Public Stockholders who properly redeem their Public Shares will not be reduced by the deferred underwriting commissions we will pay to the underwriters of our Initial Public Offering. Our Sponsor, officers and directors have entered into the Letter Agreement with us, pursuant to which they have agreed to waive their redemption rights with respect to any Founder Shares, Private Placement Shares and Public Shares held by them in connection with the completion of our initial Business Combination.

Manner of Conducting Redemptions

We will provide our Public Stockholders with Redemption opportunities upon the completion of our initial Business Combination either (i) in connection with a stockholder meeting called to approve the initial Business Combination, such as the Kustom Entertainment Business Combination, or (ii) by means of a tender offer if the Kustom Entertainment Business Combination is not consummated. The decision as to whether we will seek stockholder approval of a proposed initial Business Combination or conduct 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 require us to seek stockholder approval under the law or stock exchange listing requirement. Under Nasdaq rules, asset acquisitions and stock purchases would not typically require stockholder approval while direct mergers with our Company where we do not survive and any transactions where we issue more than 20% of our outstanding Common Stock or seek to amend our Amended and Restated Charter would require stockholder approval. If we structure an initial Business Combination with a target company in a manner that requires stockholder approval, we will not have discretion as to whether to seek a stockholder vote to approve the proposed initial Business Combination. We may conduct redemptions without a stockholder vote pursuant to the tender offer rules of the SEC unless stockholder approval is required by law or stock exchange listing requirements or we choose to seek stockholder approval for business or other legal reasons. To maintain the listing for our securities on Nasdaq, we are required to comply with such rules.

If a stockholder vote is not required and we do not decide to hold a stockholder vote for business or other legal reasons, we will, pursuant to our Amended and Restated Charter:

● conduct the redemptions pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, which regulate issuer tender offers, and

● file tender offer documents with the SEC prior to completing our initial Business Combination which contain substantially the same financial and other information about the initial Business Combination and the redemption rights as is required under Regulation 14A of the Exchange Act, which regulates the solicitation of proxies.

Upon the public announcement of our initial Business Combination, we or our Sponsor will terminate any plan established in accordance with Rule 10b5-1 to purchase shares of our Class A Common Stock in the open market if we elect to redeem our Public Shares through a tender offer, to comply with Rule 14e-5 under the Exchange Act.

In the event we conduct Redemptions pursuant to the tender offer rules, our offer to redeem will remain open for at least 20 business days, in accordance with Rule 14e-1(a) under the Exchange Act, and we will not be permitted to complete our initial Business Combination until the expiration of the tender offer period. In addition, the tender offer will be conditioned on Public Stockholders not tendering more than a specified number of Public Shares which are not purchased by our Sponsor, which number will be based on the requirement that we will only redeem our Public Shares so long as (after such Redemption) our net tangible assets will be at least $5,000,001 either immediately prior to or upon consummation of our initial Business Combination and after payment of underwriters’ fees and commissions (so that we are not subject to the SEC’s “penny stock” rules) or any greater net tangible asset or cash requirement which may be contained in the agreement relating to our initial Business Combination. If Public Stockholders tender more shares than we have offered to purchase, we will withdraw the tender offer and not complete the initial Business Combination.

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If, however, stockholder approval of the transaction is required by law or stock exchange listing requirement, or we decide to obtain stockholder approval for business or other legal reasons, we will, pursuant to our Amended and Restated Charter:

● conduct the Redemptions in conjunction with a proxy solicitation pursuant to Regulation 14A of the Exchange Act, which regulates the solicitation of proxies, and not pursuant to the tender offer rules, and

● file proxy materials with the SEC.

In the event that we seek stockholder approval of our initial Business Combination, we will distribute proxy materials and, in connection therewith, provide our Public Stockholders with the Redemption rights described above upon completion of the initial Business Combination.

If we seek stockholder approval, we will complete our initial Business Combination only if a majority of the outstanding shares of Common Stock voted are voted in favor of the initial Business Combination. A quorum for such meeting will consist of the holders present in person or by proxy of shares of outstanding capital stock of the Company representing a majority of the voting power of all outstanding shares of capital stock of the Company entitled to vote at such meeting. Our Initial Stockholders will count toward this quorum and pursuant to the Letter Agreement, our Sponsor and Initial Stockholders have agreed to vote their Founder Shares, Private Placement Shares and Public Shares purchased during or after our Initial Public Offering (including in open market and privately negotiated transactions) in favor of our initial Business Combination. For purposes of seeking approval of the majority of our outstanding shares of Common Stock voted, non-votes will have no effect on the approval of our initial Business Combination once a quorum is obtained. As a result, in addition to our Initial Stockholders’ Founder Shares and the Private Placement Shares, unless otherwise required under applicable law we would not need any of the Public Shares sold in our Initial Public Offering to be voted in favor of an initial Business Combination in order to have our initial Business Combination approved. We intend to give approximately 30 days (but not less than 10 days nor more than 60 days) prior written notice of any such meeting, if required, at which a vote shall be taken to approve our initial Business Combination. These quorum and voting thresholds, and the voting agreements of our Initial Stockholders, may make it more likely that we will consummate our initial Business Combination. Each Public Stockholder may elect to redeem its Public Shares without voting, and if they do vote, irrespective of whether they vote for or against the proposed transaction.

Our Amended and Restated Charter provides that we will only redeem our Public Shares so long as (after such redemption) our net tangible assets will be at least $5,000,001 either immediately prior to or upon consummation of our initial Business Combination and after payment of underwriters’ fees and commissions (so that we are not subject to the SEC’s “penny stock” rules) or any greater net tangible asset or cash requirement which may be contained in the agreement relating to our initial Business Combination. For example, the proposed initial Business Combination may require: (i) cash consideration to be paid to the target or its owners, (ii) cash to be transferred to the target for working capital or other general corporate purposes or (iii) the retention of cash to satisfy other conditions in accordance with the terms of the proposed initial Business Combination. In the event the aggregate cash consideration we would be required to pay for all shares of Class A Common Stock that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed initial Business Combination exceed the aggregate amount of cash available to us, we will not complete the initial Business Combination or redeem any shares, and all shares of Class A Common Stock submitted for Redemption will be returned to the holders thereof.

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Redemption of Public Shares and Liquidation if no Initial Business Combination

Our Amended and Restated Charter provides that we will have until July 22, 2024 to complete our Initial business Combination. If we have not completed our initial Business Combination by the end of the Combination Period, we will: (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account including interest earned on the funds held in the Trust Account and not previously released to us to pay our franchise and income taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding Public Shares, which Redemption will completely extinguish Public Stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our Board of Directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to our Rights, which will expire worthless if we fail to complete our initial Business Combination by the end of the Combination Period.

Our Sponsor, officers and directors have entered into the Letter Agreement with us, pursuant to which they have waived their rights to liquidating distributions from the Trust Account with respect to any Founder Shares and Private Placement Shares held by them if we fail to complete our initial Business Combination by the end of the Combination Period. However, if our Sponsor, officers or directors acquire Public Shares, they will be entitled to liquidating distributions from the Trust Account with respect to such Public Shares if we fail to complete our initial Business Combination by the end of the Combination Period.

Our Sponsor, officers and directors have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our Amended and Restated Charter (i) to modify the substance or timing of our obligation to redeem 100% of our Public Shares if we do not complete our initial Business Combination prior to the end of the Combination Period or (ii) with respect to any other provision relating to stockholders’ rights or pre-initial Business Combination activity, unless we provide our Public Stockholders with the opportunity to redeem their shares of Class A Common Stock upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account including interest earned on the funds held in the Trust Account and not previously released to us to pay our franchise and income taxes divided by the number of then outstanding Public Shares. However, we will only redeem our Public Shares so long as (after such redemption) our net tangible assets will be at least $5,000,001 either immediately prior to or upon consummation of our initial Business Combination and after payment of underwriters’ fees and commissions (so that we are not subject to the SEC’s “penny stock” rules). If this optional Redemption right is exercised with respect to an excessive number of Public Shares such that we cannot satisfy the net tangible asset requirement (described above), we would not proceed with the amendment or the related Redemption of our Public Shares at such time.

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We expect that all costs and expenses associated with implementing our plan of dissolution, as well as payments to any creditors, would be funded from amounts remaining out of the $162,933 of proceeds held outside the Trust Account as of December 31, 2023, although we cannot assure you that there will be sufficient funds for such purpose. We will depend on sufficient interest being earned on the proceeds held in the Trust Account to pay any franchise and income tax obligations we may owe. However, if those funds are not sufficient to cover the costs and expenses associated with implementing our plan of dissolution, to the extent that there is any interest accrued in the Trust Account not required to pay franchise and income taxes on interest income earned on the Trust Account balance, we may request the trustee to release to us an additional amount of up to $100,000 of such accrued interest to pay those costs and expenses.

If we were to expend all of the net proceeds of our Initial Public Offering of Units and the Private Placement of the Private Placement Units, other than the proceeds deposited in the Trust Account, the per-share redemption amount received by Public Stockholders upon our dissolution would be approximately $11.85 as of December 31, 2023 (before taking into account the withdrawal of interest to pay taxes, if any, and up to $100,000 in dissolution expenses). The proceeds deposited in the Trust Account could, however, become subject to the claims of our creditors which would have higher priority than the claims of our Public Stockholders. We cannot assure you that the actual per-share Redemption amount received by stockholders will not be substantially less than $11.85. Under Section 281(b) of the DGCL, our plan of dissolution must provide for all claims against us to be paid in full or make provision for payments to be made in full, as applicable, if there are sufficient assets. These claims must be paid or provided for before we make any distribution of our remaining assets to our stockholders. While we intend to pay such amounts, if any, we cannot assure you that we will have funds sufficient to pay or provide for all creditors’ claims.

Although we have sought and will continue to seek to have all vendors, service providers (other than our independent auditor), prospective target businesses or other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the Trust Account for the benefit of our Public Stockholders, there is no guarantee that they will execute such agreements or even if they execute such agreements that they would be prevented from bringing claims against the Trust Account including but not limited to fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain an advantage with respect to a claim against our assets, including the funds held in the Trust Account. If any third party refuses to execute an agreement waiving such claims to the monies held in the Trust Account, our Management will perform an analysis of the alternatives available to it and will only enter into an agreement with a third party that has not executed a waiver if Management believes that such third party’s engagement would be significantly more beneficial to us than any alternative. Examples of possible instances where we may engage a third party that refuses to execute a waiver include the engagement of a third-party consultant whose particular expertise or skills are believed by Management to be significantly superior to those of other consultants that would agree to execute a waiver or in cases where Management is unable to find a service provider willing to execute a waiver. Marcum, our independent registered public accounting firm, and the underwriters of our Initial Public Offering will not execute agreements with us waiving such claims to the monies held in the Trust Account.

In addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements with us and will not seek recourse against the Trust Account for any reason. Our Sponsor has agreed that it will be liable to us if and to the extent any claims by a third party for services rendered or products sold to us, or a prospective target business with which we have entered into a written letter of intent, confidentiality or similar agreement or Business Combination agreement, reduce the amount of funds in the Trust Account to below the lesser of (i) $10.15 per Public Share and (ii) the actual amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account, if less than $10.15 per share due to reductions in the value of the trust assets, less taxes payable, provided that such liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights to the monies held in the Trust Account (whether or not such waiver is enforceable) nor will it apply to any claims under our indemnity of the underwriters of our Initial Public Offering against certain liabilities, including liabilities under the Securities Act. However, we have not asked our Sponsor to reserve for such indemnification obligations, nor have we independently verified whether our Sponsor has sufficient funds to satisfy its indemnity obligations and believe that our Sponsor’s only assets are securities of our company. Therefore, we cannot assure you that our Sponsor would be able to satisfy those obligations. None of our officers or directors will indemnify us for claims by third parties including, without limitation, claims by vendors and prospective target businesses.

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In the event that the proceeds in the Trust Account are reduced below (i) $10.15 per Public Share or (ii) such lesser amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account, due to reductions in value of the trust assets, in each case net of the amount of interest which may be withdrawn to pay taxes, and our Sponsor asserts that it is unable to satisfy its indemnification obligations or that it has no indemnification obligations related to a particular claim, our independent directors would determine whether to take legal action against our Sponsor to enforce its indemnification obligations. While we currently expect that our independent directors would take legal action on our behalf against our Sponsor to enforce its indemnification obligations to us, it is possible that our independent directors in exercising their business judgment may choose not to do so if, for example, the cost of such legal action is deemed by the independent directors to be too high relative to the amount recoverable or if the independent directors determine that a favorable outcome is not likely. We have not asked our Sponsor to reserve for such indemnification obligations and we cannot assure you that our Sponsor would be able to satisfy those obligations. Accordingly, we cannot assure you that due to claims of creditors the actual value of the per-share Redemption price will not be less than $10.15 per Public Share.

We seek to reduce the possibility that our Sponsor has to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers (other than our independent auditor), prospective target businesses or other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account. Our Sponsor will also not be liable as to any claims under our indemnity of the underwriters of our Initial Public Offering against certain liabilities, including liabilities under the Securities Act. As of December 31, 2023 have access to up to approximately $262,933 from the funds held outside of the Trust Account with which to pay any such potential claims (including costs and expenses incurred in connection with our liquidation, currently estimated to be no more than approximately $100,000). In the event that we liquidate and it is subsequently determined that the reserve for claims and liabilities is insufficient, stockholders who received funds from our Trust Account could be liable for claims made by creditors.

Under the DGCL, stockholders may be held liable for claims by third parties against a corporation to the extent of distributions received by them in a dissolution. The pro-rata portion of our Trust Account distributed to our Public Stockholders upon the redemption of our Public Shares in the event we do not complete our initial Business Combination by the end of the Combination Period may be considered a liquidating distribution under Delaware law. If the corporation complies with certain procedures set forth in Section 280 of the DGCL intended to ensure that it makes reasonable provision for all claims against it, including a 60-day notice period during which any third-party claims can be brought against the corporation, a 90-day period during which the corporation may reject any claims brought, and an additional 150-day waiting period before any liquidating distributions are made to stockholders, any liability of stockholders with respect to a liquidating distribution is limited to the lesser of such stockholder’s pro-rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder would be barred after the third anniversary of the dissolution.

Furthermore, if the pro-rata portion of our Trust Account distributed to our Public Stockholders upon the redemption of our Public Shares in the event we do not complete our initial Business Combination within the specified time is not considered a liquidating distribution under Delaware law and such redemption distribution is deemed to be unlawful (potentially due to the imposition of legal proceedings that a party may bring or due to other circumstances that are currently unknown), then pursuant to Section 174 of the DGCL, the statute of limitations for claims of creditors could then be six years after the unlawful redemption distribution, instead of three years, as in the case of a liquidating distribution. If we are unable to complete our initial Business Combination by July 22, 2024, we will: (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account including interest earned on the funds held in the Trust Account and not previously released to us to pay our franchise and income taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding Public Shares, which Redemption will completely extinguish Public Stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such Redemption, subject to the approval of our remaining stockholders and our Board of Directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. Accordingly, it is our intention to redeem our Public Shares as soon as reasonably possible following the end of the Combination Period and, therefore, we do not intend to comply with those procedures. As such, our stockholders could potentially be liable for any claims to the extent of distributions received by them (but no more) and any liability of our stockholders may extend well beyond the third anniversary of such date.

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Because we are not complying with Section 280, Section 281(b) of the DGCL requires us to adopt a plan, based on facts known to us at such time that will provide for our payment of all existing and pending claims or claims that may be potentially brought against us within the subsequent 10 years. However, because we are a blank check company, rather than an operating company, and our operations are limited to searching for prospective target businesses to acquire, the only likely claims to arise would be from our vendors (such as lawyers, investment bankers and auditors) or prospective target businesses. As described above, pursuant to the obligation contained in our underwriting agreement, we have sought and will continue to seek to have all vendors, service providers (other than our independent auditor), prospective target businesses or other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the Trust Account. As a result of this obligation, the claims that could be made against us are significantly limited and the likelihood that any claim that would result in any liability extending to the Trust Account is remote. Further, our Sponsor may be liable only to the extent necessary to ensure that the amounts in the Trust Account are not reduced below (i) $10.15 per Public Share or (ii) such lesser amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account, due to reductions in value of the trust assets, in each case net of the amount of interest withdrawn to pay taxes and will not be liable as to any claims under our indemnity of the underwriters of our Initial Public Offering against certain liabilities, including liabilities under the Securities Act. In the event that an executed waiver is deemed to be unenforceable against a third party, our Sponsor will not be responsible to the extent of any liability for such third-party claims.

If we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, the proceeds held in the Trust Account could be subject to applicable bankruptcy law, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our stockholders. To the extent any bankruptcy claims deplete the Trust Account, we cannot assure you we will be able to return $10.15 per share to our Public Stockholders. Additionally, if we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor and/or bankruptcy laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy court could seek to recover some or all amounts received by our stockholders. Furthermore, our Board of Directors may be viewed as having breached its fiduciary duty to our creditors and/or may have acted in bad faith, thereby exposing itself and our Company to claims of punitive damages, by paying Public Stockholders from the Trust Account prior to addressing the claims of creditors. We cannot assure you that claims will not be brought against us for these reasons.

Our Public Stockholders will be entitled to receive funds from the Trust Account only upon the earlier to occur of: (i) the completion of our initial Business Combination, (ii) the redemption of any Public Shares properly tendered in connection with a stockholder vote to amend any provisions of our Amended and Restated Charter (A) to modify the substance or timing of our obligation to redeem 100% of our Public Shares if we do not complete our initial Business Combination by the end of the Combination Period or (B) with respect to any other provision relating to stockholders’ rights or pre-initial Business Combination Activity, and (iii) the Redemption of all of our Public Shares if we are unable to complete our business combination by the end of the Combination Period, subject to applicable law. In no other circumstances will a stockholder have any right or interest of any kind to or in the Trust Account. In the event we seek stockholder approval in connection with our initial Business Combination, a stockholder’s voting in connection with the initial Business Combination alone will not result in a stockholder’s redeeming its shares to us for an applicable pro-rata share of the Trust Account. Such stockholder must have also exercised its Redemption rights as described above. These provisions of our Amended and Restated Charter, like all provisions of our Amended and Restated Charter, may be amended with a stockholder vote.

Competition

In identifying, evaluating and selecting a target business for our initial Business Combination, we have encountered and may continue to encounter intense competition from other entities having a business objective similar to ours, including other blank check companies, private equity groups and leveraged buyout funds, and operating businesses seeking strategic business combinations. Many of these entities are well established and have extensive experience identifying and effecting Business Combinations directly or through affiliates. Moreover, many of these competitors possess greater financial, technical, human and other resources than we do. Our ability to acquire larger target businesses is limited by our available financial resources. This inherent limitation gives others an advantage in pursuing the initial Business Combination of a target business. Furthermore, our obligation to pay cash in connection with our Public Stockholders who exercise their Redemption rights may reduce the resources available to us for our initial Business Combination and our outstanding Rights, and the future dilution they potentially represent, may not be viewed favorably by certain target businesses. Either of these factors may place us at a competitive disadvantage in successfully negotiating an initial Business Combination.

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Employees

We currently have three officers. These individuals are not obligated to devote any specific number of hours to our matters, but they devote as much of their time as they deem necessary and intend to continue doing so to our affairs until we have completed our initial Business Combination. The amount of time they devote in any time period varies based on the stage of the initial Business Combination process we are in. We do not intend to have any full-time employees prior to the completion of our initial Business Combination.

Periodic Reporting and Financial Information

Our Units, Class A Common Stock and Rights are registered under the Exchange Act and, accordingly, we have reporting obligations, including the requirement that we file Annual, Quarterly and Current Reports with the SEC. In accordance with the requirements of the Exchange Act, our Annual Reports, including this Report, have contained and will contain financial statements audited and reported on by our independent registered public accountants.

We will provide stockholders with audited financial statements of the prospective target business as part of the tender offer materials or proxy solicitation materials sent to stockholders to assist them in assessing the target business, such as the Kustom Entertainment Registration Statement. In all likelihood, these financial statements will need to be prepared in accordance with, or reconciled to, GAAP, or IFRS, depending on the circumstances, and the historical financial statements may be required to be audited in accordance with the standards of the PCAOB. These financial statement requirements may limit the pool of potential targets we may conduct an initial Business Combination with because some targets may be unable to provide such statements in time for us to disclose such statements in accordance with federal proxy rules and complete our initial Business Combination within the prescribed time frame. We cannot assure you that any particular target business identified by us as a potential Business Combination candidate will have financial statements prepared in accordance with GAAP or that the potential target business will be able to prepare its financial statements in accordance with the requirements outlined above. To the extent that these requirements cannot be met, we may not be able to acquire the proposed target business. While this may limit the pool of potential Business Combination candidates, we do not believe that this limitation will be material.

We are required to evaluate our internal control procedures for the fiscal year ending December 31, 2023 as required by the Sarbanes-Oxley Act. Only in the event we are deemed to be a large accelerated filer or an accelerated filer, and no longer qualify as an emerging growth company, will we be required to have our internal control procedures audited. A target company may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding adequacy of their internal controls. The development of the internal controls of any such entity to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete any such business combination.

We are an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act. As such, we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. If some investors find our securities less attractive as a result, there may be a less active trading market for our securities and the prices of our securities may be more volatile.

In addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We intend to take advantage of the benefits of this extended transition period.

We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following July 22, 2026, (b) in which we have total annual gross revenue of at least $1.235 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our Class A Common Stock that is held by non-affiliates exceeds $700 million as of the prior June 30^th, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period.

Additionally, we are a “smaller reporting company” as defined in Rule 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting company until the last day of the fiscal year in which (1) the market value of our common stock held by non-affiliates exceeds $250 million as of the end of the prior June 30^th, or (2) our annual revenues exceeded $100 million during such completed fiscal year and the market value of our common stock held by non-affiliates exceeds $700 million as of the prior June 30^th.

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Item 1A.  Risk Factors.

As a smaller reporting company under Rule 12b-2 of the Exchange Act, we are not required to include risk factors in this Report. However, the following is a partial list of material risks, uncertainties and other factors that could have a material effect on us and our operations:

● we are a blank check company and an early-stage company with no revenue or basis to evaluate our ability to select a suitable business target;

● we may not be able to select an appropriate target business or businesses and complete our initial Business Combination, including the Kustom Entertainment Business Combination, in the prescribed time frame;

● our expectations around the performance of a prospective target business or businesses, such as Kustom Entertainment, may not be realized;

● we may not be successful in retaining or recruiting required officers, key employees or directors following our initial Business Combination, including the Kustom Entertainment Business Combination;

● our officers and directors may have difficulties allocating their time between our Company and other businesses and may potentially have conflicts of interest with our business or in approving our initial Business Combination;

● we may not be able to obtain additional financing to complete our initial Business Combination or reduce the number of stockholders requesting redemption;

● we may issue our shares to investors in connection with our initial Business Combination at a price that is less than the prevailing market price of our shares at that time;

● our stockholders may not be given the opportunity to choose the initial business target or to vote on the initial Business Combination;

● Trust Account funds may not be protected against third party claims or bankruptcy;

● an active market for our public securities may not develop and our stockholders will have limited liquidity and trading;

● our financial performance following a Business Combination with an entity may be negatively affected by their lack of an established record of revenue, cash flows and experienced management;

● there may be more competition to find an attractive target for an initial Business Combination, which could increase the costs associated with completing our initial Business Combination and may result in our inability to find a suitable target;

● changes in the market for directors and officers liability insurance could make it more difficult and more expensive for us to negotiate and complete an initial Business Combination;

● if we do not consummate the Kustom Entertainment Business Combination, we may attempt to simultaneously complete Business Combinations with multiple prospective targets, which may hinder our ability to complete our initial Business Combination and give rise to increased costs and risks that could negatively impact our operations and profitability;

● we may engage one or more of our underwriters or one of their respective affiliates to provide additional services to us after the Initial Public Offering, which may include acting as a financial advisor in connection with an Initial Business Combination or as placement agent in connection with a related financing transaction. Our underwriters are entitled to receive deferred underwriting commissions that will be released from the Trust Account only upon completion of an initial Business Combination. These financial incentives may cause them to have potential conflicts of interest in rendering any such additional services to us after the Initial Public Offering, including, for example, in connection with the sourcing and consummation of an initial Business Combination;

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● we may attempt to complete our initial Business Combination with a private company about which little information is available, such as Kustom Entertainment, which may result in a Business Combination with a company that is not as profitable as we suspected, if at all;

● since our Initial Stockholders will lose their entire investment in us if our initial Business Combination is not completed (other than with respect to any Public Shares they may acquire during or after the Initial Public Offering), and because our Sponsor, officers and directors may profit substantially even under circumstances in which our Public Stockholders would experience losses in connection with their investment, a conflict of interest may arise in determining whether a particular Business Combination target is appropriate for our initial Business Combination;

● the value of the Founder Shares following completion of our initial Business Combination is likely to be substantially higher than the nominal price paid for them, even if the trading price of our Common Stock at such time is substantially less than $11.85 per share;

● resources could be wasted in researching acquisitions that are not completed, which could materially adversely affect subsequent attempts to locate and acquire or merge with another business. If we have not completed our initial Business Combination within the Combination Period, our Public Stockholders may receive only approximately $11.85 per share, or less than such amount in certain circumstances, on the liquidation of our Trust Account and our Rights will expire worthless;

● we may not be able to complete an initial Business Combination with certain potential target companies if a proposed transaction with the target company may be subject to review or approval by regulatory authorities pursuant to certain U.S. or foreign laws or regulations, including the Committee on Foreign Investment in the United States. To the best of our knowledge, approximately 47% of the total allocated membership interests in our Sponsor are owned by U.S. persons on a look-through basis and approximately 53% of interests in our Sponsor owned by non-U.S. persons on a look-through basis. Of the approximately 53% of interests in our Sponsor owned by non-U.S. persons, approximately 27% are owned by persons in Sweden, approximately 9% are owned by persons in Bolivia and 3% are owned by a person in Venezuela.;

● recent increases in inflation and interest rates in the United States and elsewhere could make it more difficult for us to consummate an initial Business Combination;

● market conditions, economic uncertainty or downturns could adversely affect our business, financial condition, operating results and our ability to consummate a Business Combination;

● adverse developments affecting the financial services industry, including events or concerns involving liquidity, defaults or non-performance by financial institutions, could adversely affect our business, financial condition or results of operations, or our prospects

● military or other conflicts in Ukraine, the Middle East or elsewhere may lead to increased volume and price volatility for publicly traded securities, or affect the operations or financial condition of potential target companies, which could make it more difficult for us to consummate an initial Business Combination; 

● inappropriate  use of the funds withdrawn from the Trust Account for income and other permitted taxes for payment of operating expenses not related to the permitted taxes might result in violation of provisions of the Trust Agreement;

● the Excise Tax may be imposed on us in connection with our redemptions of shares in connection with a Business Combination or other stockholder vote pursuant to which stockholders would have a right to submit their shares for redemption;

● there is substantial doubt about our ability to continue as a “going concern”; and

● we have identified a material weakness in our internal control over financial reporting as of December 31, 2023 regarding the classification of redeemable common stock and timeliness, completeness, accuracy of accruals, and accuracy of provision for franchise and income taxes. If we are unable to develop and maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results in a timely manner, which may adversely affect investor confidence in us and materially and adversely affect our business and operating results.

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We may seek to further extend the Combination Period, which could have a material adverse effect on the amount held in our Trust Account and other adverse effects on our Company.

We may seek to further extend the Combination Period. Such an extension would require the approval of our Public Stockholders, who will be provided the opportunity to redeem all or a portion their Public Shares. Such redemptions will likely have a material adverse effect on the amount held in our Trust Account, our capitalization, principal stockholders and other impacts on our Company or Management Team, such as our ability to maintain our listing on Nasdaq.

If we seek to further extend the Combination Period, such extension would not be in compliance with Nasdaq rules, and unless Nasdaq were to grant us an exemption, will likely lead Nasdaq to suspend trading in or delist our securities.

Our securities are listed on the Nasdaq Capital Market. Nasdaq IM-5101-2 requires that a SPAC complete one or more business combinations within 36 months of the effectiveness of its initial public offering registration statement, which, in our case, would be July 19, 2024 (the “Nasdaq Deadline”). If we were to seek to further extend the Combination Period beyond July 19, 2024, our Combination Period would extend beyond the Nasdaq Deadline. Consequently, further extension of our Combination Period does not comply with Nasdaq rules. There is a risk that, even if an extension were approved by our stockholders, trading in our securities may be suspended and we may be subject to delisting by Nasdaq. We cannot assure you that (i) Nasdaq will not delist our securities in the event such an extension were approved and we do not complete one or more Business Combinations by the Nasdaq Deadline, (ii) we will be able to obtain a hearing with the Panel to appeal the delisting determination, or (iii) our securities will not be suspended pending the Panel’s decision.

If Nasdaq delists any of our securities from trading and we are unable to list our securities on another national securities exchange, we expect our securities could potentially be quoted on an over-the-counter market. However, if this were to occur, we could face significant material adverse consequences. 

Cyber incidents or attacks directed at us or third parties could result in information theft, data corruption, operational disruption and/or financial loss.

We depend on digital technologies, including information systems, infrastructure and cloud applications and services, including those of third parties with whom we may deal. Sophisticated and deliberate attacks on, or security breaches in, our systems or infrastructure, or the systems or infrastructure of third parties or the cloud, could lead to corruption or misappropriation of our assets, proprietary information and sensitive or confidential data. As an early-stage company without significant investments in data security protection, we may not be sufficiently protected against such occurrences. We also lack sufficient resources to adequately protect against, or to investigate and remediate any vulnerability to, cyber incidents. Any of these occurrences, or a combination of them, could have material adverse consequences on our business and lead to financial loss.

Changes in laws or regulations, or a failure to comply with any laws and regulations, may adversely affect our business, including our ability to negotiate and complete our initial Business Combination, and results of operations.

We are subject to laws and regulations enacted by national, regional and local governments. In particular, we are required to comply with certain SEC and other legal requirements and numerous complex tax laws. Compliance with, and monitoring of, applicable laws and regulations may be difficult, time consuming and costly. Those laws and regulations and their interpretation and application may also change from time to time and those changes could have a material adverse effect on our business, investments and results of operations. In addition, a failure to comply with applicable laws or regulations, as interpreted and applied, could have a material adverse effect on our business, including our ability to negotiate and complete our initial Business Combination, and results of operations.

On January 24, 2024, the SEC adopted the 2024 SPAC Rules requiring, among other matters, (i) additional disclosures relating to SPAC Business Combination transactions; (ii) additional disclosures relating to dilution and to conflicts of interest involving sponsors and their affiliates in both SPAC initial public offerings and Business Combination transactions; (iii) additional disclosures regarding projections included in SEC filings in connection with proposed Business Combination transactions; and (iv) the requirement that both the SPAC and its target company be co-registrants for Business Combination registration statements

In addition, the SEC’s adopting release provided guidance describing circumstances in which a SPAC could become subject to regulation under the Investment Company Act, including its duration, asset composition, business purpose, and the activities of the SPAC and its management team in furtherance of such goals.

Compliance with the 2024 SPAC Rules and related guidance may (i) increase the costs of and the time needed to negotiate and complete an initial Business Combination and (ii) constrain the circumstances under which we could affect our ability to complete an initial Business Combination.

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If we are deemed to be an investment company under the Investment Company Act, we may be required to institute burdensome compliance requirements and our activities may be restricted, which may make it difficult for us to complete our initial Business Combination.

The SEC‘s adopting release with respect to the 2024 SPAC Rules provided guidance relating to the potential status of SPACs as investment companies subject to regulation under the Investment Company Act and the regulations thereunder. Whether a SPAC is an investment company is dependent on specific facts and circumstances and we can give no assurance that a claim will not be made that we have been operating as an unregistered investment company.

If we are deemed to be an investment company under the Investment Company Act, our activities may be restricted, including (i) restrictions on the nature of our investments; and (ii) restrictions on the issuance of securities, each of which may make it difficult for us to complete our initial Business Combination.

In addition, we may have imposed upon us burdensome requirements, including: (i) registration as an investment company; (ii) adoption of a specific form of corporate structure; and (iii) reporting, record keeping, voting, proxy and disclosure requirements and other rules and regulations.

In order not to be regulated as an investment company under the Investment Company Act, unless we can qualify for an exclusion, we must ensure that we are engaged primarily in a business other than investing, reinvesting or trading in securities and that our activities do not include investing, reinvesting, owning, holding or trading “investment securities” constituting more than 40% of our total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis. We are mindful of the SEC’s investment company definition and guidance and intend to complete an initial Business Combination with an operating business, and not with an investment company, or to acquire minority interests in other businesses exceeding the permitted threshold.

We do not believe that our business activities will subject us to the Investment Company Act. To this end, the proceeds held in the Trust Account were initially invested only in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act, which invest only in direct U.S. government treasury obligations; the holding of these assets in this form is intended to be temporary and for the sole purpose of facilitating the intended Business Combination. To mitigate the risk that we might be deemed to be an investment company for purposes of the Investment Company Act, which risk increases the longer that we hold investments in the Trust Account, on June 26, 2023, we instructed Continental, as trustee of the Trust Account, to liquidate the investments held in the Trust Account and instead to hold the funds in the Trust Account in cash or in an interest bearing demand deposit account at a bank.

Pursuant to the Trust Agreement, Continental is not permitted to invest in securities or assets other than as described above. By restricting the investment of the proceeds to these instruments, and by having a business plan targeted at acquiring and growing businesses for the long term (rather than on buying and selling businesses in the manner of a merchant bank or private equity fund), we intended to avoid being deemed an “investment company” within the meaning of the Investment Company Act. Our Initial Public Offering was not intended for persons who were seeking a return on investments in government securities or investment securities. The Trust Account is intended solely as a temporary depository for funds pending the earliest to occur of: (i) the completion of our initial Business Combination; (ii) the redemption of any Public Shares properly submitted in connection with a stockholder vote to amend our Amended and Restated Charter (x) in a manner that would affect the substance or timing of our obligation to provide for the redemption of the Public Shares in connection with an initial Business Combination or to redeem 100% of our Public Shares if we do not complete our initial Business Combination within the Combination Period; or (y) with respect to any other provision relating to the rights of holders of shares of our Class A Common Stock or pre-initial Business Combination activity; or (iii) absent an initial Business Combination within the Combination Period, our return of the funds held in the Trust Account to our Public Stockholders as part of our redemption of the Public Shares.

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We are aware of litigation claiming that certain SPACs should be considered investment companies. Although we believe that these claims are without merit, we cannot guarantee that we will not be deemed to be an investment company and thus subject to the Investment Company Act. If we were deemed to be subject to the Investment Company Act, compliance with these additional regulatory burdens would require additional expenses for which we have not allotted funds and may hinder our ability to complete an initial Business Combination or may result in our liquidation. If we are unable to complete our initial Business Combination, our Public Stockholders may receive only approximately $10.00 per Public Share upon the liquidation of our Trust Account and our Rights will expire worthless.

We have received the Delisting Notice indicating that we have failed to regain compliance with the Minimum Public Holders Requirement and the Annual Meeting Requirement and which informed us that our securities may be subject to suspension and delisting pending the outcome of a hearing before the Panel, which we requested on March 8, 2024. If we cannot regain compliance, our securities will be subject to delisting and the liquidity and the trading price of our securities could be adversely affected.

On August 31, 2023, we received a deficiency letter from the Staff of Nasdaq notifying us that we no longer meet the Minimum Public Holders Requirement. The notification received has no immediate effect on our Nasdaq listing. On October 16, 2023, we submitted to Nasdaq a plan to regain compliance with the Minimum Public Holders Requirement. On October 25, 2023, in response to such compliance plan, the Staff granted us an extension of time to regain compliance with the Minimum Public Holders Requirement. Pursuant to the extension, on or before February 27, 2024, we must have filed with Nasdaq documentation that demonstrated that our Common Stock has a minimum of 300 public holders.

On January 23, 2024, we received a deficiency notice from the Staff of Nasdaq notifying us that we are not in compliance with the Annual Meeting Requirement because we did not hold an annual meeting of stockholders within twelve months of our fiscal year ended December 31, 2022. The notification received had no immediate effect on our Nasdaq listing. In accordance with Nasdaq rules, we had 45 calendar days, or until March 8, 2024, to submit a plan to regain compliance with the Annual Meeting Requirement.

On February 27, 2024, we were not able to demonstrate compliance with the Minimum Public Holders Requirement, and as such, on March 1, 2024, we received the Delisting Notice from the Staff of Nasdaq informing us that our securities may be subject to suspension and delisting pending the outcome of a hearing before the Panel. Because the Staff of Nasdaq issued the Delisting Notice to us on March 1, 2024, we chose to forego submitting a plan of compliance to Nasdaq related to the Annual Meeting Requirement. Because we were unable to demonstrate compliance with the Minimum Public Holders Requirement and did not submit to Nasdaq a plan of compliance related to the Annual Meeting Requirement, our securities may be subject to suspension and delisting pending the outcome of a hearing before the Panel, which we requested on March 8, 2024.

If Nasdaq delists our securities from trading on its exchange and we are not able to list our securities on another national securities exchange, we expect our securities could be quoted on an over-the-counter market. If this were to occur, we could face significant material adverse consequences, including:

● a limited availability of market quotations for our securities;

● reduced liquidity for our securities;

● a determination that our Class A Common Stock are a “penny stock” which will require brokers trading in our Class A Class A Common Stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities;

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● a limited amount of news and analyst coverage;

● a decreased ability to issue additional securities or obtain additional financing in the future; and

● being subject to regulation in each state in which we offer our securities, including in connection with our initial Business Combination.

For additional risks relating to our operations, other than as set forth above, see the section titled “Risk Factors” contained in our (i) IPO Registration Statement, (ii) 2022 Annual Report, (iii) Quarterly Reports on Form 10-Q for the quarterly periods ended September 30, 2021, March 31, 2022, June 30, 2022, September 30, 2022, March 31, 2023, and September 30, 2023, as filed with the SEC on November 26, 2021, May 17, 2022, August 15, 2022, November 14, 2022, May 16, 2023, and November 14, 2023, respectively, and (iii) our Definitive Proxy Statements on Schedule 14A, as filed with the SEC on October 3, 2022, July 7, 2023, and January 3, 2024. Any of these factors could result in a significant or material adverse effect on our results of operations or financial condition. Additional risks could arise that may also affect our business or ability to consummate an initial Business Combination. We may disclose changes to such risk factors or disclose additional risk factors from time to time in our future filings with the SEC.

For risks related to Kustom Entertainment and the Kustom Entertainment Business Combination, please see the Kustom Entertainment Registration Statement at www.sec.gov.

Item 1B. Unresolved Staff Comments.

Not applicable.

Item 1C. Cybersecurity

As a blank check company, we do not have any operations and our sole business activity has been to search for and consummate a Business Combination. However, because we have investments in our Trust Account and bank deposits and we depend on the digital technologies of third parties, we and third parties may be subject to attacks on or security breaches in our or their systems. Because of our reliance on the technologies of third parties, we also depend upon the personnel and the processes of third parties to protect against cybersecurity threats, and we have no personnel or processes of our own for this purpose. In the event of a cybersecurity incident impacting us, the Management Team will report to the Board of Directors and provide updates on the Management Team’s incident response plan for addressing and mitigating any risks associated with such an incident. As an early-stage company without significant investments in data security protection, we may not be sufficiently protected against such occurrences. We also lack sufficient resources to adequately protect against, or to investigate and remediate any vulnerability to, cyber incidents. It is possible that any of these occurrences, or a combination of them, could have material adverse consequences on our business and lead to financial loss. We have not encountered any cybersecurity incidents since our Initial Public Offering.

Item 2. Properties.

Our executive offices are located at 1450 Brickell Avenue, Suite 2520, Miami, FL 33131, and our telephone number is (305) 577-0031. The cost for our use of this space is included in the $10,000  per month fee we pay to an affiliate of our Sponsor for office space, utilities and secretarial and administrative support, pursuant to the Administrative Support Agreement. We consider our current office space adequate for our current operations.

Item 3. Legal Proceedings.

To the knowledge of our Management Team, there is no material litigation currently pending or contemplated against us, any of our officers or directors in their capacity as such or against any of our property.

Item 4. Mine Safety Disclosures.

Not applicable.

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PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities.

(a) Market Information

Our Units, Public Shares and Public Rights are each traded on the Nasdaq Capital Market under the symbols CLOEU, CLOE and CLOER, respectively. Our Units commenced public trading on July 20, 2021, and our Public Shares and Public Rights commenced separate public trading on September 9, 2021.

On August 31, 2023, we received a deficiency letter from the Staff of Nasdaq notifying us that we no longer meet the Minimum Public Holders Requirement. The notification received has no immediate effect on our Nasdaq listing. On October 16, 2023, we submitted to Nasdaq a plan to regain compliance with the Minimum Public Holders Requirement. On October 25, 2023, in response to such compliance plan, the Staff granted us an extension of time to regain compliance with the Minimum Public Holders Requirement. Pursuant to the extension, on or before February 27, 2024, we must have filed with Nasdaq documentation that demonstrated that our Common Stock has a minimum of 300 public holders.

On January 23, 2024, we received a deficiency notice from the Staff of Nasdaq notifying us that we are not in compliance with the Annual Meeting Requirement because we did not hold an annual meeting of stockholders within twelve months of our fiscal year ended December 31, 2022. The notification received had no immediate effect on our Nasdaq listing. In accordance with Nasdaq rules, we had 45 calendar days, or until March 8, 2024, to submit a plan to regain compliance with the Annual Meeting Requirement.

On February 27, 2024, we were not able to demonstrate compliance with the Minimum Public Holders Requirement, and as such, on March 1, 2024, we received the Delisting Notice from the Staff of Nasdaq informing us that our securities may be subject to suspension and delisting pending the outcome of a hearing before the Panel. Because the Staff of Nasdaq issued the Delisting Notice to us on March 1, 2024, we chose to forego submitting a plan of compliance to Nasdaq related to the Annual Meeting Requirement. Because we were unable to demonstrate compliance with the Minimum Public Holders Requirement and did not submit to Nasdaq a plan of compliance related to the Annual Meeting Requirement, our securities may be subject to suspension and delisting pending the outcome of a hearing before the Panel, which we requested on March 8, 2024.

(b) Holders

On March 21, 2024, there were three holders of record of our Units, three holders of record of our shares of Class A Common Stock, and one holder of record of our Public Rights.

(c) Dividends

We have not paid any cash dividends on our Common Stock to date and do not intend to pay cash dividends prior to the completion of our initial Business Combination. The payment of cash dividends in the future will be dependent upon our revenues and earnings, if any, capital requirements and general financial condition subsequent to completion of our initial Business Combination. The payment of any cash dividends subsequent to our initial Business Combination will be within the discretion of our Board of Directors at such time. In addition, our Board of Directors is not currently contemplating and does not anticipate declaring any stock dividends in the foreseeable future. Further, if we incur any indebtedness in connection with our initial Business Combination, our ability to declare dividends may be limited by restrictive covenants we may agree to in connection therewith.

(d) Securities Authorized for Issuance Under Equity Compensation Plans.

None.

(e) Recent Sales of Unregistered Securities

On July 20, 2023, upon the approval of the Conversion Amendment Proposal by our stockholders at the 2023 Special Meeting, we issued an aggregate of 3,457,806 shares of Class A Common Stock to our Sponsor, upon the conversion of an equal number of Class B Common Stock held by the Sponsor in the Founder Share Conversion. The 3,457,806 shares of Class A Common Stock issued in connection with the Founder Share Conversion are subject to the same restrictions as applied to the Class B Common Stock before the Founder Share Conversion, including, among others, certain transfer restrictions, waiver of redemption rights and the obligation to vote in favor of an initial Business Combination as described in the IPO Registration Statement; consequently, the shares of Class A Common Stock issued in connection with the Founder Share Conversion are not registered under the Securities Act and will remain unregistered until registration is demanded by the Sponsor pursuant to the Letter Agreement we entered into with our Sponsor, officers and directors. Following the Founder Share Conversion, the 2023 Redemptions and the 2024 Redemptions, (i) there were (i) 5,320,507 shares of Class A Common Stock issued and outstanding and one share of Class B Common Stock issued and outstanding, and (ii) the Sponsor held 75.7% of the outstanding Class A Common Stock. For more information on the Founder Share Conversion and the Founder Shares’ transfer restrictions, see “Item 1. Business.”

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(f) Use of Proceeds from the Initial Public Offering

For a description of the use of proceeds generated in our Initial Public Offering and Private Placement, see Part II, Item 2 of our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2021, as filed with the SEC on September 2, 2021. There has been no material change in the planned use of proceeds from our Initial Public Offering and Private Placement as described in the IPO Registration Statement. Our specific investments in our Trust Account may change from time to time.

On June 26, 2023, we instructed Continental to liquidate the investments held in the Trust Account and instead to hold the funds in the Trust Account in an interest-bearing demand deposit account at Morgan Stanley,  with Continental continuing to act as trustee, until the earlier of the consummation of our initial Business Combination or our liquidation. As a result, following the liquidation of investments in the Trust Account, the remaining proceeds from the Initial Public Offering and Private Placement are no longer invested in U.S. government securities or money market funds invested in U.S. government securities.

(g) Purchases of Equity Securities by the Issuer and Affiliated Purchasers

On January 17, 2024, we held the 2024 Special Meeting at which our stockholders approved, the 2024 Extension, which extended the date by which we must consummate a Business Combination from January 22, 2024 to July 22, 2024 (or such earlier date as determined by the Board). In connection with the 2024 Extension, Public Stockholders holding 202,360 Public Shares properly exercised their right to redeem such shares for a pro rata portion of the Trust Account. We paid cash in the aggregate amount of $ 2,369,636, or approximately $11.71 per share to such redeeming Public Stockholders in the 2024 Redemptions.

There were no such repurchases of our equity securities by us or an affiliate during the further quarter of the fiscal year covered by the Report.

Item 6. [Reserved]

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Cautionary Note Regarding Forward-Looking Statements

All statements other than statements of historical fact included in this Report including, without limitation, statements under this Item regarding our financial position, business strategy and the plans and objectives of Management for future operations, are forward-looking statements. When used in this Report, words such as “anticipate,” “believe,” “estimate,” “expect,” “intend” and similar expressions, as they relate to us or our Management, identify forward-looking statements. Such forward-looking statements are based on the beliefs of our Management, as well as assumptions made by, and information currently available to, our Management. Actual results could differ materially from those contemplated by the forward-looking statements as a result of certain factors detailed in our filings with the SEC. All subsequent written or oral forward-looking statements attributable to us or persons acting on our behalf are qualified in their entirety by this paragraph.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the financial statements and the notes thereto contained elsewhere in this Report.

Overview

We are a blank check company incorporated in the State of Delaware for the purpose of effecting an initial Business Combination. We may pursue the initial Business Combination target in any industry or geographic location, and we were focusing our search for a target business engaged in the cannabis industry.

The IPO Registration Statement was declared effective on July 19, 2021. On July 22, 2021, we consummated our Initial Public Offering of 13,831,230 Units at $10.00 per Unit, and the sale of 675,593 Units, at a price of $10.00 per Unit, in the Private Placement to our Sponsor and the Representative that closed simultaneously with the Initial Public Offering. On July 22, 2021, the underwriters of the Initial Public Offering partially exercised their over-allotment option and purchased 1,331,230 of their full 1,875,000 Units available and subsequently forfeited the remainder of their option as of July 28, 2021. Our Management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering and sale of the Private Placement Units, although substantially all of the net proceeds are to be applied generally toward consummating an initial Business Combination.

Transaction costs amounted to $9,562,126, consisting of $2,766,246 of underwriting commissions, $4,840,931 of deferred underwriting commissions, $1,383,123 of fair value of the Representative Shares, and $571,826 of other cash offering costs.

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Recent Developments

2024 Special Meeting and 2024 Extension

On January 17, 2024, we held the 2024 Special Meeting. At the 2024 Special Meeting, our stockholders approved an amendment to our Amended and Restated Charter to extend the Combination Period from January 22, 2024 to July 22, 2024, or such earlier date as determined by the Board of Directors.

In connection with the 2024 Special Meeting, Public Stockholders holding 202,360 Public Share properly exercised their right to redeem such shares for a pro rata portion of the funds in our Trust Account. As a result, approximately $2,374,149 (approximately $11.73 per share) was removed from the Trust Account to pay such holders.

Following the approval and implementation of the 2024 Extension, on January 22, 2024, we issued the 2024 Extension Note in the aggregate principal amount of up to $360,000 to our Sponsor, pursuant to which the Sponsor agreed to loan to us up to $360,000 to deposit into the Trust Account for each Public Share held by our Public Stockholders that was not redeemed in the 2024 Redemption. The 2024 Extension Note bears no interest and is repayable in full upon the earlier of (a) the date of the consummation of our initial Business Combination, or (b) the date of our liquidation.

On January 22, 2024, we deposited $60,000 into the Trust Account, and will continue to deposit $60,000 into the Trust Account for each additional calendar month (promptly following the 2nd of each calendar month), or portion thereof, that is needed by us to complete an initial Business Combination until July 22, 2024, and such amount will be distributed either to: (i) all of the holders of Public Shares upon our liquidation or (ii) holders of Public Shares who elect to have their shares redeemed in connection with the consummation of the Initial Business Combination. As of March 21, 2024, $180,000 of the principal on the 2024 Extension Note has been deposited into the Trust Account.

On January 22, 2024, we issued the 2024 Working Capital Note in the principal amount of up to $1,000,000 to our Sponsor. The 2024 Working Capital Note was issued in connection with up to $1,000,000 of advances our Sponsor has made or may make in the future to us for working capital expenses. The loan is non-interest bearing and payable upon the earlier of (i) the date of the consummation of our initial Business Combination or (ii) the date of our liquidation. As of March 5, 2024, a total of $525,000 had been drawn down on the 2024 Working Capital Note.

Nasdaq Compliance—Minimum Public Holders Requirement and Annual Meeting Requirement

On August 31, 2023, we received a deficiency letter from the Staff of Nasdaq notifying us that we no longer meet the Minimum Public Holders Requirement. The notification received has no immediate effect on our Nasdaq listing. On October 16, 2023, we submitted to Nasdaq a plan to regain compliance with the Minimum Public Holders Requirement. On October 25, 2023, in response to such compliance plan, the Staff granted us an extension of time to regain compliance with the Minimum Public Holders Requirement. Pursuant to the extension, on or before February 27, 2024, we must have filed with Nasdaq documentation that demonstrated that our Common Stock has a minimum of 300 public holders.

On January 23, 2024, we received a deficiency notice from the Staff of Nasdaq notifying us that we are not in compliance with the Annual Meeting Requirement because we did not hold an annual meeting of stockholders within twelve months of our fiscal year ended December 31, 2022. The notification received had no immediate effect on our Nasdaq listing. In accordance with Nasdaq rules, we had 45 calendar days, or until March 8, 2024, to submit a plan to regain compliance with the Annual Meeting Requirement.

On February 27, 2024, we were not able to demonstrate compliance with the Minimum Public Holders Requirement, and as such, on March 1, 2024, we received the Delisting Notice from the Staff of Nasdaq informing us that our securities may be subject to suspension and delisting pending the outcome of a hearing before the Panel. Because the Staff of Nasdaq issued the Delisting Notice to us on March 1, 2024, we chose to forego submitting a plan of compliance to Nasdaq related to the Annual Meeting Requirement. Because we were unable to demonstrate compliance with the Minimum Public Holders Requirement and did not submit to Nasdaq a plan of compliance related to the Annual Meeting Requirement, our securities may be subject to suspension and delisting pending the outcome of a hearing before the Panel, which we requested on March 8, 2024.

Indemnification Agreement with Kustom Entertainment and Digital Ally

On February 1, 2024, we entered in an indemnification agreement with Kustom Entertainment and the Kustom Entertainment Stockholder, pursuant to which, Kustom Entertainment and Kustom Entertainment Stockholder agreed to indemnify us and our officers and directors for liabilities incurred in connection with Kustom Entertainment Stockholder disclosure incorporated by reference into the Kustom Entertainment Registration Statement.

Kustom Entertainment Business Combination

On June 1, 2023, we entered into a Kustom Entertainment Merger Agreement with Merger Sub, the Sponsor, Kustom Entertainment, and the Kustom Entertainment Stockholder.

Pursuant to the Kustom Entertainment Merger Agreement, subject to the terms and conditions set forth therein upon the Closing, Merger Sub will merge with and into Kustom Entertainment, with Kustom Entertainment continuing as the surviving corporation in the Merger and our wholly-owned subsidiary. In the Merger, all of the issued and outstanding capital stock of Kustom Entertainment immediately prior to the Effective Time shall no longer be outstanding and shall automatically be cancelled and shall cease to exist, in exchange for the right for the Kustom Entertainment Stockholder to receive the Merger Consideration. Upon consummation of the Kustom Entertainment Business Combination, we will change our name to “Kustom Entertainment, Inc.”

On October 4, 2023, we issued a press release announcing that we had submitted to EDGAR, the SEC’s online portal, the Kustom Entertainment Registration Statement, which includes a preliminary proxy statement/prospectus, with respect to the Kustom Entertainment Business Combination.

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For a full description of the Kustom Entertainment Merger Agreement and the proposed Kustom Entertainment Business Combination, please see “Item 1. Business.”

Extensions of Our Combination Period

We originally had up to 12 months from the closing of our Initial Public Offering, or until July 22, 2022, to consummate an initial Business Combination. However, as requested by our Sponsor and as permitted under our Amended and Restated Charter, on July 19, 2022, we extended the Combination Period by an additional three months from July 22, 2022 to October 22, 2022. In addition, at the 2022 Special Meeting held on October 19, 2022, our stockholders approved an amendment to our Amended and Restated Charter to extend the Combination Period from October 22, 2022 to July 22, 2023, or such earlier date as determined by our Board of Directors. Thereafter, at the 2023 Special Meeting held on July 19, 2023, our stockholders approved an amendment to our Amended and Restated Charter to extend the Combination Period from July 22, 2023 to January 22, 2024, or such earlier date as determined by our Board of Directors.

Founder Share Conversion

On July 20, 2023, upon the approval of the Conversion Amendment Proposal by our stockholders at the 2023 Special Meeting. we issued an aggregate of 3,457,806 shares of our Class A Common Stock to our Sponsor upon the Founder Share Conversion. The 3,457,806 shares of Class A Common Stock issued in connection with the Founder Share Conversion are subject to the same restrictions as applied to the Class B Common Stock before the Founder Share Conversion, including, among other things, certain transfer restrictions, waiver of redemption rights, and the obligation to vote in favor of an initial Business Combination as described in the IPO Registration Statement. Following the Founder Share Conversion, there were 5,522,867 shares of Class A Common Stock issued and outstanding and 1 share of Class B Common Stock issued and outstanding. As a result of the Founder Share Conversion, our Sponsor held approximately 73.0% of our issued and outstanding Class A Common Stock.

Results of Operations

Our entire activity since inception up to December 31, 2023 relates to our formation, the Initial Public Offering, and, since the closing of the Initial Public Offering, a search for an initial Business Combination candidate. We will not be generating any operating revenues until the Closing and completion of our initial Business Combination, at the earliest.

For the year ended December 31, 2023, we had a net loss of $849,368, which consisted of formation and operating costs of $1,586,541 and provision for income taxes of $196,591, offset by interest earned on investments held in Trust Account of $737,057 and interest earned on cash held in bank of $116.

For the year ended December 31, 2022, we had a net income of $60,237, which consisted of formation and operating costs of $ 1,291,228 and provision for income taxes of $185,423, offset by interest earned on investments held in Trust Account of $1,195,135, interest earned on cash held in bank of $69 and recovery of previously incurred costs of $341,684.

Factors That May Adversely Affect our Results of Operations

Our results of operations and our ability to complete an initial Business Combination may be adversely affected by various factors that could cause economic uncertainty and volatility in the financial markets, many of which are beyond our control. Our business could be impacted by, among other things, downturns in the financial markets or in economic conditions, increases in oil prices, inflation, increases in interest rates, supply chain disruptions, declines in consumer confidence and spending, public health considerations, and geopolitical instability, such as the military conflicts in Ukraine and the Middle East. We cannot at this time predict the likelihood of one or more of the above events, their duration or magnitude or the extent to which they may negatively impact our business and our ability to complete an initial Business Combination.

Liquidity, Capital Resources, and Going Concern

As of December 31, 2023 and 2022, we had cash of $162,933 and $303,449, respectively, and working capital deficit of $4,493,502 and working capital of $2,882,521, respectively. Prior to the completion of the Initial Public Offering, our liquidity needs had been satisfied through a payment from our Sponsor of $25,000 for the Founder Shares to cover certain offering costs and the loan under an unsecured promissory note from our Sponsor of $300,000.

In addition, on July 18, 2022, we issued the July 2022 Extension Note to our Sponsor in the principal amount of $1,383,123, pursuant to which our Sponsor loaned us $1,383,123 ($0.10 per Public Share after Redemptions) to deposit into the Trust Account for each Public Share that was not redeemed in connection with the July 2022 Extension. At the election of our Sponsor, up to $1,383,123 of the unpaid principal amount of the July 2022 Extension Note may be converted into Conversion Units, of which the total Conversion Units so issued shall be equal to: (i) the portion of the principal amount of the July 2022 Extension Note being converted divided by (ii) the conversion price of ten dollars ($10.00), rounded up to the nearest whole number of Units.

On October 19, 2022, we issued the October 2022 Extension Note to our Sponsor in the principal amount of $1,383,123, pursuant to which our Sponsor loaned us $1,383,123 to deposit into the Trust Account for each Public Share that was not redeemed in connection with the October 2022 Extension. The October 2022 Extension Note bears no interest and is repayable in full upon the earlier of (a) the date of the consummation of an initial Business Combination, or (b) the date of our liquidation.

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On July 21, 2023, the Company issued the 2023 Extension Note in the aggregate principal amount of up to $360,000 to the Sponsor, pursuant to which the Sponsor agreed to loan to the Company up to $360,000 to deposit into the Trust Account for the Public Stockholders that did not redeem Public Shares in the2023 Redemptions. The 2023 Extension Note bears no interest and is repayable in full upon the earlier of (a) the date of the consummation of our initial Business Combination, or (b) the date of our liquidation.

On July 21, 2023, we issued the 2023 Working Capital Note in the principal amount of up to $300,000 to our Sponsor. The 2023 Working Capital Note was issued in connection with advances our Sponsor may make in the future to us as Working Capital Loans. The 2023 Working Capital Note is non-interest bearing and payable upon the earlier of (i) completion of our initial Business Combination or (ii) the date that our winding up is effective. We drew $300,000 under the 2023 Working Capital Note, which was outstanding as of December 31, 2023.

On June 26, 2023, we instructed Continental to liquidate the investments held in the Trust Account and instead to hold the funds in the Trust Account in an interest-bearing demand deposit account at Morgan Stanley with Continental continuing to act as trustee, until the earlier of the consummation of our initial Business Combination or our liquidation. As a result, following the liquidation of investments in the Trust Account, the remaining proceeds from the Initial Public Offering and Private Placement are no longer invested in U.S. government securities or money market funds invested in U.S. government securities.

At various dates in the fourth quarter of 2023, the Sponsor advanced to us $415,000 for our working capital needs. On January 22, 2024, we issued the 2024 Working Capital Note in the principal amount of up to $1,000,000 to our Sponsor. The 2024 Working Capital Note was issued in connection with advances our Sponsor may make in the future to us as Working Capital Loans. The 2024 Working Capital Note is non-interest bearing and payable upon the earlier of (i) completion of the initial Business Combination or (ii) the date of our winding up is effective. The funds advanced in the fourth quarter of 2023 were considered advanced under terms of this note and were outstanding as of December 31, 2023.

In addition, in order to finance transaction costs in connection with an initial Business Combination, our Sponsor or an affiliate of our Sponsor or certain of our officers and directors may, but are not obligated to, provide us Working Capital Loans. $715,000 and $0 were outstanding under any Working Capital Loans as of December 31, 2023 and 2022, respectively.

Until the consummation of an initial Business Combination, we will continue to use the funds not held in the Trust Account for identifying and evaluating prospective acquisition candidates, performing due diligence on prospective target businesses, paying for travel expenditures, selecting the target business to acquire, and structuring, negotiating, and consummating the initial Business Combination. We will need to raise additional capital through loans or additional investments from our Sponsor, stockholders, officers, directors, or third parties. Our Sponsor, officers, and directors may, but are not obligated to, loan us funds from time to time or at any time, in whatever amount they deem reasonable in their sole discretion, to meet our working capital needs. Accordingly, we may not be able to obtain additional financing. If we are unable to raise additional capital, it may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing operations, suspending the pursuit of a potential transaction, and reducing overhead expenses.

Going Concern

We cannot provide any assurance that new financing will be available to us on commercially acceptable terms, if at all. In connection with our assessment of going concern considerations in accordance with FASB ASU Topic 2014-15, “Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern.” We have until July 22, 2024 to consummate an initial Business Combination. It is uncertain that we will be able to consummate an initial Business Combination by this time. If an initial Business Combination is not consummated by this date, there will be a mandatory liquidation and subsequent dissolution. These conditions raise substantial doubt about our ability to continue as a going concern. The financial statements and notes thereto contained elsewhere in this Report do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should we be unable to continue as a going concern and also do not include any adjustment that might result from the outcome of this uncertainty should an initial Business Combination not occur.

Off-Balance Sheet Financing Arrangements

We have no obligations, assets or liabilities, which would be considered off-balance sheet arrangements as of December 31, 2023 and 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.

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Contractual Obligations

Administrative Support Agreement

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 our Sponsor a monthly fee of $10,000 for office space, utilities and administrative support, pursuant to the Administrative Support Agreement. Upon completion of our initial Business Combination or our liquidation, we will cease paying these monthly fees.

Registration Rights

The holders of the Founder Shares, Private Placement Units, and securities that may be issued upon conversion of Working Capital Loans and extension loans will have registration rights to require us to register a sale of any of the securities held by them pursuant to the Registration Rights Agreement. These holders will be entitled to make up to three demands, excluding short-form registration demands, that we register such securities for sale under the Securities Act. In addition, these holders will have “piggyback” registration rights to include their securities in other registration statements filed by us. Notwithstanding the foregoing, the underwriters of the Initial Public Offering may not exercise their demand and “piggyback” registration rights after five and seven years, respectively, after the effective date of the IPO Registration Statement and may not exercise their demand rights on more than one occasion.

Underwriting Agreement

The underwriters had a 30-day option to purchase up to 1,875,000 additional Units to cover any over-allotments, if any, at the Initial Public Offering price less the underwriting discounts and commissions. On July 22, 2021, the underwriters partially exercised their over-allotment option and purchased an additional 1,331,230 Units and forfeited the remainder of their over-allotment option as of July 28, 2021.

The underwriters are entitled to a deferred underwriting discount of 3.5% of the gross proceeds of the Initial Public Offering held in the Trust Account upon the completion of the initial Business Combination, subject to the terms of the underwriting agreement.

Critical Accounting Estimates

The preparation of financial statements in conformity with GAAP requires Management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates. We have identified the following as our critical accounting policies:

Class A Common Stock Subject to Possible Redemption

All of the 13,831,230 Class A Common Stock sold as part of the Units in the Initial Public Offering contain a redemption feature which allows for the Redemption of such Public Shares in connection with our liquidation, if there is a stockholder vote or tender offer in connection with the initial Business Combination and in connection with certain amendments to our Amended and Restated Charter. In accordance with the SEC and its staff’s guidance on redeemable equity instruments, which has been codified in FASB ASC Topic 480-10-S99. Redemption provisions not solely within our control require Common Stock subject to redemption to be classified outside of permanent equity.

If it is probable that the equity instrument will become redeemable, we have the option to either accrete changes in the redemption value over the period from the date of issuance (or from the date that it becomes probable that the instrument will become redeemable, if later) to the earliest redemption date of the instrument or to recognize changes in the redemption value immediately as they occur and adjust the carrying amount of the instrument to equal the redemption value at the end of each reporting period. We have elected to recognize the changes immediately.

Net (Loss) Income Per Common Share

We comply with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share”. Net (loss) income per share is computed by dividing net (loss) income by the weighted average number of shares of Common Stock outstanding during the period. We have two classes of shares, redeemable Common Stock and non-redeemable Common Stock. Our redeemable Common Stock is comprised of shares of Class A Common Stock sold in the Initial Public Offering. Our non-redeemable shares are comprised of shares of Class B Common Stock purchased by our Sponsor as well as shares of Class A Common Stock sold as part of the Private Placement Units and the Representative Shares. Earnings and losses are shared pro rata between the two classes of shares. Our statements of operations ally the two-class method in calculating net (loss) income per share. Basic and diluted net (loss) income per common share for redeemable Common Stock and non-redeemable Common Stock is calculated by dividing net (loss) income, allocated proportionally to each class of Common Stock, attributable to us by the weighted average number of shares of redeemable and non-redeemable stock outstanding.

The calculation of diluted (loss) income per share of Common Stock does not consider the effect of the rights issued in connection with the Initial Public Offering since exercise of the rights is contingent upon the occurrence of future events and the inclusion of such rights would be anti-dilutive. Accretion of the carrying value of Class A Common Stock to redemption value is excluded from net (loss) income per redeemable share because the redemption value approximates fair value. As a result, diluted (loss) income per share is the same as basic (loss) income per share for the periods presented.

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Recent Accounting Pronouncements

In August 2020, the FASB issued ASU Topic 2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” (“ASU 2020-06”). which simplifies accounting for convertible instruments by removing major separation models required under current GAAP. ASU 2020-06 also removes certain settlement conditions that are required for equity-linked contracts to qualify for the derivative scope exception, and it simplifies the diluted earnings per share calculation in certain areas. ASU 2020-06 is effective January 1, 2024 and should be applied on a full or modified retrospective basis, with early adoption permitted beginning on January 1, 2021. We are reviewing what impact, if any, adoption will have on our financial position, results of operations, or cash flows.

In December 2023, the FASB issued ASU Topic 2023-09, “Income Taxes” (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”), which requires disclosure of incremental income tax information within the rate reconciliation and expanded disclosures of income taxes paid, among other disclosure requirements. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024. Early adoption is permitted. Our Management does not believe the adoption of ASU 2023-09 will have a material impact on its consolidated financial statements and disclosures.

Our Management does not believe that any other recently issued, but not effective, accounting standards, if currently adopted, would have a material effect on our financial statements.

JOBS Act

The JOBS Act contains provisions that, among other things, relax certain reporting requirements for qualifying public companies. We qualify as an “emerging growth company” and under the JOBS Act 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, the 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 auditor’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 auditor’s report providing additional information about the audit and the 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 Chief Executive Officer’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.

Item 7A. Quantitative and Qualitative Disclosures about Market Risk.

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise required under this Item.

Item 8. Financial Statements and Supplementary Data.

Reference is made to pages F-1 through F-22 comprising a portion of this Report, which are incorporated herein by reference.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

None.

Item 9A. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures are controls and other procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to Management, including our Chief Executive Officer and Chief Financial Officer (together, the “Certifying Officers”), or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.

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Under the supervision and with the participation of our Management, including our Certifying Officers, we carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as defined in Rules 13a-15I and 15d-15(e) under the Exchange Act. Based on the foregoing, our Certifying Officers concluded that our disclosure controls and procedures were not effective as of the end of the period covered by this Report, due to:

(i) the restatement of our July 22, 2021 balance sheet included in the Current Report on Form 8-K filed with the SEC on July 28, 2021 in connection with our Initial Public Offering, regarding the classification of redeemable Common Stock, as described below, which constitutes a material weakness in our internal control over financial reporting for complex financial instruments.

(ii) material weaknesses in internal controls related to timeliness, completeness and accuracy of accruals, identified as of September 30, 2022.

(iii) material weakness in internal controls related accuracy of the provision for franchise and income taxes, identified as of December 31, 2022.

(iv) a material weakness in internal controls over the financial reporting process which failed to identify a material out of period adjustment that resulted in the revision of previously issued financial statements, identified as of September 30, 2023.

(v) a material weakness in internal controls related to the compliance with the provisions of the Trust Agreement related to the use of funds withdrawn from the Trust Account for payment of our tax liabilities, identified as of December 31, 2023.

In light of this material weakness, we have enhanced our processes to identify and appropriately apply applicable accounting requirements to better evaluate and understand the nuances of the complex accounting standards that apply to our financial statements including making greater use of third-party professionals with whom we consult regarding complex accounting applications. The elements of our remediation plan can only be accomplished over time, and we can offer no assurance that these initiatives will ultimately have the intended effects. We believe our efforts will enhance our controls relating to accounting for complex financial transactions and instruments and internal controls related to timeliness, completeness and accuracy of accruals, but we can offer no assurance that our controls will not require additional review and modification in the future as industry accounting practice may evolve over time.

We do not expect that our disclosure controls and procedures will prevent all errors and all instances of fraud. Disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Further, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and the benefits must be considered relative to their costs. Because of the inherent limitations in all disclosure controls and procedures, no evaluation of disclosure controls and procedures can provide absolute assurance that we have detected all our control deficiencies and instances of fraud, if any. The design of disclosure controls and procedures also is based partly on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

Management’s Annual Report on Internal Control over Financial Reporting

As required by SEC rules and regulations implementing Section 404 of the Sarbanes-Oxley Act, our Management is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of our financial statements for external reporting purposes in accordance with GAAP. Our internal control over financial reporting includes those policies and procedures that:

(1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of our Company,

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of our Management and directors, and

(3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

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Because of its inherent limitations, internal control over financial reporting may not prevent or detect errors or misstatements in our financial statements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree or compliance with the policies or procedures may deteriorate. Management assessed the effectiveness of our internal control over financial reporting as of December 31, 2023. In making these assessments, Management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control — Integrated Framework (2013). Based on our assessments and those criteria, Management determined that we did not maintain effective internal control over financial reporting as of December 31, 2023 due to incorrect classification of classification of redeemable Common Stock and timeliness, completeness and accuracy of accruals and accuracy of provision for franchise and income taxes. 

Management has implemented remediation steps to improve our internal control over financial reporting. Specifically, we expanded and improved our review process for complex transaction instruments, internal controls related to timeliness, completeness and accuracy of accruals, and related accounting standards. We plan to further improve this process by enhancing access to accounting literature, identification of third-party professionals with whom to consult regarding complex accounting applications and consideration of additional staff with the requisite experience and training to supplement existing accounting professionals.

This Report does not include an attestation report of our internal controls from our independent registered public accounting firm due to our status as an emerging growth company under the JOBS Act.

Changes in Internal Control over Financial Reporting

Other than as discussed above, there have been no changes to our internal control over financial reporting during the fiscal year ended December 31, 2023 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item 9B. Other Information.

Trading Arrangements

During the quarterly period ended December 31, 2023, none of our directors or officers (as defined in Rule 16a-1(f) promulgated under the Exchange Act) adopted or terminated any “Rule 10b5-1 trading arrangement” or any “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408 of Regulation S-K.  

Additional Information

None.

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

Not applicable.

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PART III

Item 10. Directors, Executive Officers and Corporate Governance.

Directors and Executive Officers

As of the date of this Report, our directors and officers are as follows:

Name	Age		Position
Felipe MacLean		40	Chairman of the Board, President and Chief Executive Officer
Luis A. Guerra		50	Chief Financial Officer and Treasurer
Markus Puusepp		41	Chief Operating Officer and Secretary
Per Bjorkman		56	Director
Marcos Angelini		52	Director
Luis Derechin		55	Director

The experience of our directors and executive officers is as follows:

Felipe MacLean, our President and CEO since inception and our Chairman of the Board since April 2021, is a successful self-made entrepreneur with over 15 years of experience capitalizing on complex, high-yield transactions in various industries across the globe. Mr. MacLean applied his financial and operational expertise in building vertically integrated businesses in the agriculture, seafood, and edible oil sectors. He is the founder and CEO of Yntegra Group, a family office and multi-service provider that specializes in high yield transactions that has managed over $1 billion in commodities trading activity and placement of over $100 million in private equity investments. In 2017, Mr. MacLean started his venture in the cannabis industry founding Solace Holdings and leading an investment of over $50 million. Solace Holdings is today one of the most renowned cultivation, extraction and manufacturing facilities in the Nevada market, with leading product categories on its portfolio and doubling sales year over year. Mr. MacLean’s involvement was crucial to the success of Solace Holdings, supported by his clear understanding of the cannabis industry opportunities and challenges. We believe Mr. MacLean is well qualified to serve as our Chairman and CEO due to his extensive knowledge in the cannabis industry. As an early investor in the field, he has lived through the multiple regulatory cycles and growth facets of this developing industry. His experience has proven instrumental in creating a successful large-scale profitable cannabis operation.

Luis A. Guerra, our CFO and Treasurer since April 2021, was one of the founders of Bulltick Capital Markets, a regional investment bank in the US, Europe and Latin America that became one of the top 10 brokers and trading firms with the highest volume traded in Latin America ADRs (American Depositary Receipts) on the Nasdaq. He was a co-managing partner of the firm and member of its Management Committee, directly responsible for all securities brokerage, electronic trading, and capital markets operations, from March 2000 to February 2011. He grew the firm’s brokerage and trading operations from a start-up to one of the largest regional investment banks in Latin America. Since November 2018, Mr. Guerra has served as co-founder and Managing Director of VI tax Partners, a private investment vehicle with a focus on private equity and structured finance. Since December 2019, he has also served as part of the Advisory Board of Welz, a European based private equity real estate Investment Manager, where he advises on their investment portfolio. He is a seasoned capital markets professional who brings experienced and structured financial reporting. We believe Mr. Guerra is well qualified to serve as our CFO due to his capital markets and financial background, ample experience dealing with regulated entities both in the US and internationally, and knowledge as a former senior executive at an investment bank and asset management business.

Markus Puusepp, our COO and Secretary since July 2022, has been employed as Chief Strategy Officer of SHL Medical AG (“SHL”) since 2017. SHL is a global solution provider in the design, development and manufacturing of advanced drug delivery systems. Mr. Puusepp previously spent over seven years in Hong Kong and Beijing within the private equity and medtech industries. Prior to that, he worked in investment banking in Sweden, as well as management consulting. Additionally, Mr. Puusepp has held several directorships, including as a board member for Spowdi since October 2020, a non-executive board member of QulO since October 2018, a board member of Pharmaero ApS since February 2018 and as a Chairman of Innovation Zed since February 2018. He received his Master’s in Business Administration from Stockholm University in 2008. We believe Mr. Puusepp is well qualified to serve as our COO due to his experience, integrity, and track records across multiple industries.

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Per Bjorkman has served as one of our independent directors since July 2021. Since August 2020, he has served as Director of Business Development at SHL Healthcare, one of the world’s leading contract manufacturers and suppliers of MedTech solutions for home, hospital and long-term care use. As a customer-centric company, SHL offers a range of services, robust manufacturing capabilities and dedicated project management teams to best translate customer specifications into quality products. Prior to this role, he served as Managing Director of SHL Technologies & Group Ventures from January 2014 to December 2019. Mr. Bjorkman is a seasoned expert in the cannabis and healthcare industry. From October 2017 to July 2020, he served as Co-CEO of Solace Holdings in Nevada, a cGMP certified, vertically integrated tetrahydrocannabinol and cannabidiol cannabis company, focusing on the cultivation and manufacturing of leading cannabis consumer branded goods. Mr. Bjorkman holds a bachelor’s degree in Business Administration from the European University and was part of the Leadership and Strategic Execution Program at INSEAD in France. We believe Mr. Bjorkman is well qualified to serve as a director due to his extensive knowledge in the mainstream medical and pharmaceutical industry, and its potential application to the cannabis field, in addition to having managed a successful cannabis growing and production facility in the US.

Marcos Angelini has served as one of our independent directors since July 2021. He has served as the President of Red Bull Latin America since April 2017. Since August 2020, he has been an equity investor and a member of the advisory board to YVY Brazil. Prior to these roles, from May 2016 to February 2017, Mr. Angelini was the CEO of Facebook in Brazil, where he oversaw the media giant’s operations in the largest country in Latin America. Mr. Angelini has 24 years of international experience in marketing, innovation, media, advertising and general management. From January 1996 to March 2016, he worked at Unilever, initially in marketing, rising to Brand VP and later Vice President for Latin America. At Unilever, he had responsibility for numerous products for global client subsidiaries throughout the world. He was recognized by Meio & Mensagem as one of the top 10 Marketing Executives of 2015 and as one of the top 10 Media Executives of Brazil in 2016. Mr. Angelini received his MBA from the University of Durham and completed a Business Executive Program at Stanford University. We believe Mr. Angelini is well qualified to serve as a director due to his extensive experience working as a senior executive with internationally recognized brands such as Redbull and Facebook, and his ample consumer brands knowledge as a senior level global marketing manager at Unilever.

Luis Derechin has served as one of our independent directors since December 2023. He is one of Mexico’s most experienced technology entrepreneurs. In 2001, Mr. Derechin co-founded JackBe, which was one of the first companies in Mexico as well as Latin America to raise funding from U.S. venture capital. In 2014, JackBe was acquired by Software AG, and its technology became the cornerstone of the German multinational’s push into data management and visualizations. After JackBe, Luis has founded a number of additional companies, including PointWorthy, a venture that allows Citibank and Hilton loyalty point holders to use their points to execute cash donations to any of the more than one million philanthropic causes in the United States. Mr. Derechin studied engineering at UCSD and earned a degree in business at Instituto Tecnologico Autónomo de México (ITAM). Mr. Derechin is well qualified to serve as a director due to his extensive experience in venture capital and technology.

Family Relationships

No family relationships exist between any of our directors or executive officers.

Involvement in Certain Legal Proceedings

There are no material proceedings to which any director or executive officer, or any associate of any such director or officer is a party adverse to our Company, or has a material interest adverse to our Company.

Number and Terms of Office of Officers and Directors

We have four directors. Our Board of Directors is divided into two classes with only one class of directors being elected in each year and each class (except for those directors appointed prior to our first annual meeting of stockholders) serving a two-year term. In accordance with Nasdaq corporate governance requirements, we were not required to hold an annual meeting until one year after our first fiscal year end following our listing on Nasdaq. The term of office of the first class of directors, consisting of Luis Derechin and Marcos Angelini, will expire at our first annual meeting of stockholders. The term of office of the second class of directors, consisting of Felipe MacLean and Per Bjorkman, will expire at the second annual meeting of stockholders.

On January 23, 2024, we received a deficiency notice from the Staff of Nasdaq notifying us that we are not in compliance with the Annual Meeting Requirement because we did not hold an annual meeting of stockholders within twelve months of our fiscal year ended December 31, 2022. The notification received had no immediate effect on our Nasdaq listing. In accordance with Nasdaq rules, we had 45 calendar days, or until March 8, 2024, to submit a plan to regain compliance with the Annual Meeting Requirement. On March 1, 2024, we received the Delisting Notice from the Staff of Nasdaq informing us that our securities may be subject to suspension and delisting pending the outcome of a hearing before the Panel, which we requested on March 8, 2024.

Our officers are appointed by the Board of Directors and serve at the discretion of the Board of Directors, rather than for specific terms of office. Our Board of Directors is authorized to appoint persons to the offices set forth in our bylaws as it deems appropriate. Our bylaws provide that our officers may consist of a Chairman of the Board, Chief Executive Officer, Chief Financial Officer, President, Vice Presidents, Secretary, Treasurer, Assistant Secretaries and such other offices as may be determined by the Board of Directors.

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Committees of the Board of Directors

Our Board of Directors has two standing committees: the Audit Committee and a compensation committee (the “Compensation Committee”). Subject to phase-in rules and a limited exception, Nasdaq rules and Rule 10A-3 of the Exchange Act require that the audit committee of a listed company be comprised solely of independent directors, and Nasdaq rules require that the compensation committee of a listed company be comprised solely of independent directors.

Audit Committee

Marcos Angelini, Luis Derechin and Per Bjorkman serve as members of our Audit Committee, and Marcos Angelini chairs the Audit Committee. Under the Nasdaq listing standards and applicable SEC rules, we are required to have at least three members of the Audit Committee, all of whom must be independent. Each of Marcos Angelini, Luis Derechin, and Per Bjorkman meets the independent director standard under Nasdaq listing standards and under Rule 10-A-3(b)(1) of the Exchange Act.

Each member of the Audit Committee is financially literate, and our Board of Directors has determined that Marcos Angelini qualifies as an “audit committee financial expert” as defined in applicable SEC rules.

We have adopted an Audit Committee charter, as amended and restated. which details the principal functions of the Audit Committee, including:

● the appointment, compensation, retention, replacement, and oversight of the work of the independent registered public accounting firm engaged by us;

● pre-approving all audit and permitted non-audit services to be provided by the independent registered public accounting firm engaged by us, and establishing pre-approval policies and procedures;

● setting clear hiring policies for employees or former employees of the independent registered public accounting firm, including but not limited to, as required by applicable laws and regulations;

● setting clear policies for audit partner rotation in compliance with applicable laws and regulations;

● obtaining and reviewing a report, at least annually, from the independent registered public accounting firm describing (i) the independent registered public accounting firm’s internal quality-control procedures, (ii) any material issues raised by the most recent internal quality-control review, or peer review, of the audit firm, or by any inquiry or investigation by governmental or professional authorities within the preceding five years respecting one or more independent audits carried out by the firm and any steps taken to deal with such issues and (iii) all relationships between the independent registered public accounting firm and us to assess the independent registered public accounting firm’s independence;

● reviewing and approving any related party transaction required to be disclosed pursuant to Item 404 of Regulation S-K promulgated by the SEC prior to us entering into such transaction;

● reviewing with Management, the independent registered public accounting firm, and our legal advisors, as appropriate, any legal, regulatory or compliance matters, including any correspondence with regulators or government agencies and any employee complaints or published reports that raise material issues regarding our financial statements or accounting policies and any significant changes in accounting standards or rules promulgated by the FASB, the SEC or other regulatory authorities; and

● advising the Board and any other Board committees if the clawback provisions of Rule 10D-1 under the Exchange Act (the “Rule”) are triggered based upon a financial statement restatement or other financial statement change, with the assistance of Management and to the extent that our securities continue to be listed on an exchange and subject to the Rule.

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Compensation Committee

Per Bjorkman, Marcos Angelini and Luis Derechin serve as the members of our Compensation Committee. Under the Nasdaq listing standards and applicable SEC rules, we are required to have at least two members of the Compensation Committee, all of whom must be independent. Per Bjorkman, Marcos Angelini and Luis Derechin are independent, and Per Bjorkman chairs the Compensation Committee.

We have adopted a Compensation Committee charter, as amended and restated, which details the principal functions of the Compensation Committee, including:

● reviewing and approving on an annual basis the corporate goals and objectives relevant to our Chief Executive Officers’ compensation, if any is paid by us, evaluating our Chief Executive Officer’s performance in light of such goals and objectives and determining and approving the remuneration (if any) of our Chief Executive Officer based on such evaluation;

● reviewing and approving on an annual basis the compensation, if any is paid by us, of all of our other officers;

● reviewing on an annual basis our executive compensation policies and plans;

● implementing and administering our incentive compensation equity-based remuneration plans;

● assisting Management in complying with our proxy statement and annual report disclosure requirements;

● approving all special perquisites, special cash payments and other special compensation and benefit arrangements for our officers and employees;

● if required, producing a report on executive compensation to be included in our annual proxy statement;

● reviewing, evaluating and recommending changes, if appropriate, to the remuneration for directors;

● advising the Board and any other Board committees if the clawback provisions of the Rule are triggered based upon a financial statement restatement or other financial statement change, with the assistance of Management and to the extent that our securities continue to be listed on an exchange and subject to the Rule.

Notwithstanding the foregoing, as indicated above, other than the payment to an affiliate of our Sponsor of $10,000 per month for office space, utilities and secretarial and administrative support, pursuant to the Administrative Support Agreement, and reimbursement of expenses, no compensation of any kind, including finders, consulting or other similar fees, has been or will be paid to any of our existing stockholders, officers, directors or any of their respective affiliates, prior to, or for any services they render in order to effectuate the consummation of an initial Business Combination. Accordingly, it is likely that prior to the consummation of an initial Business Combination, the Compensation Committee will only be responsible for the review and recommendation of any compensation arrangements to be entered into in connection with such initial Business Combination.

The Compensation Committee charter also provides that the Compensation Committee may, in its sole discretion, retain or obtain the advice of a compensation consultant, legal counsel or other adviser and will be directly responsible for the appointment, compensation and oversight of the work of any such adviser. However, before engaging or receiving advice from a compensation consultant, external legal counsel or any other adviser, the Compensation Committee will consider the independence of each such adviser, including the factors required by Nasdaq and the SEC.

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Director Nominations

We do not have a standing nominating and corporate governance committee though we intend to form a nominating and corporate governance committee as and when required to do so by law or Nasdaq rules. In accordance with Rule 5605 of the Nasdaq rules, a majority of the independent directors may recommend a director nominee for selection by the Board of Directors.

The Board of Directors believes that the independent directors can satisfactorily carry out the responsibility of properly selecting or approving director nominees without the formation of a standing nominating committee. The directors who participate in the consideration and recommendation of director nominees are Per Bjorkman, Marcos Angelini, and Luis Derechin. In accordance with Rule 5605 of the Nasdaq rules, all such directors are independent. As there is no standing nominating and corporate governance committee, we do not have a nominating and corporate governance committee charter in place.

The Board of Directors will also consider director candidates recommended for nomination by our stockholders during such times as they are seeking proposed nominees to stand for election at the next annual meeting of stockholders (or, if applicable, a special meeting of stockholders). Our stockholders that wish to nominate a director for election to our Board of Directors should follow the procedures set forth in our bylaws.

We have not formally established any specific, minimum qualifications that must be met or skills that are necessary for directors to possess. In general, in identifying and evaluating nominees for director, the Board of Directors considers educational background, diversity of professional experience, knowledge of our business, integrity, professional reputation, independence, wisdom, and the ability to represent the best interests of our stockholders.

Code of Ethics

We have adopted a Code of Ethics applicable to our directors, officers and employees, which is filed, along with our amended and restated audit and compensation committee charters, as exhibits to the Report. You can review these documents by accessing our public filings at the SEC’s web site at www.sec.gov. In addition, a copy of the Code of Ethics will be provided without charge upon request from us. We intend to disclose any amendments to or waivers of certain provisions of our Code of Ethics in a Current Report on Form 8-K.

Insider Trading Policy

On July 19, 2021, we adopted insider trading policies and procedures governing the purchase, sale, and/or other dispositions of our securities by directors, officers, and employees, which are reasonably designed to promote compliance with insider trading laws, rules and regulations, and applicable Nasdaq listing standards (the “Insider Trading Policy”).

The foregoing description of the Insider Trading Policy does not purport to be complete and is qualified in its entirety by the terms and conditions of the Insider Trading Policy, a copy of which is attached hereto as Exhibit 19 and is incorporated herein by reference

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Compensation Recovery and Clawback Policies

Under the Sarbanes-Oxley Act, in the event of misconduct that results in a financial restatement that would have reduced a previously paid incentive amount, we can recoup those improper payments from our executive officers. The SEC also recently adopted rules which direct national stock exchanges to require listed companies to implement policies intended to recoup bonuses paid to executives if the company is found to have misstated its financial results.

On November 30, 2023, our Board of Directors approved the adoption of the Executive Compensation Clawback Policy (the “Clawback Policy”), with an effective date of October 2, 2023, in order to comply with the final clawback rules adopted by the SEC under the Rule, and the listing standards, as set forth in the Nasdaq Listing Rule 5608 (the “Final Clawback Rules”).

The Clawback Policy provides for the mandatory recovery of erroneously awarded incentive-based compensation from our current and former executive officers as defined in the Rule (“Covered Officers”) in the event that we are required to prepare an accounting restatement, in accordance with the Final Clawback Rules. The recovery of such compensation applies regardless of whether a Covered Officer engaged in misconduct or otherwise caused or contributed to the requirement of an accounting restatement. Under the Clawback Policy, our Board of Directors may recoup from the Covered Officers erroneously awarded incentive compensation received within a lookback period of the three completed fiscal years preceding the date on which we are required to prepare an accounting restatement.

Item 11. Executive Compensation.

Other than disclosed herein, none of our officers has received any cash compensation for services rendered to us. Commencing on July 19, 2021, we agreed to pay an affiliate of our Sponsor a total of $10,000 per month for office space, utilities and secretarial and administrative support, pursuant to the Administrative Support Agreement. Upon the earlier of the completion of our initial Business Combination or our liquidation, we will cease paying these monthly fees. No compensation of any kind, including any finder’s fee, reimbursement, consulting fee or monies in respect of any payment of a loan, has been or will be paid by us to our Sponsor, officers and directors, or any affiliate of our Sponsor or officers, prior to, or in connection with any services rendered in order to effectuate, the consummation of our initial Business Combination (regardless of the type of transaction that it is). However, these individuals are reimbursed for any out-of-pocket expenses incurred in connection with activities on our behalf, such as identifying potential target businesses and performing due diligence on suitable Business Combinations. Our Audit Committee reviews on a quarterly basis all payments that were made to our Sponsor, officers or directors, or our or their affiliates. Any such payments prior to an initial Business Combination are made using funds held outside the Trust Account. Other than quarterly Audit Committee review of such payments, we do not expect to have any additional controls in place governing our reimbursement payments to our directors and executive officers for their out-of-pocket expenses incurred in connection with identifying and consummating an initial Business Combination.

After the completion of our initial Business Combination, directors or members of our Management team who remain with us may be paid consulting or Management fees from the combined company. All of these fees will be fully disclosed to stockholders, to the extent then known, in the tender offer materials or proxy solicitation materials furnished to our stockholders in connection with a proposed initial Business Combination, such as the Kustom Entertainment Registration Statement. We have not established any limit on the amount of such fees that may be paid by the combined company to our directors or members of Management. It is unlikely the amount of such compensation will be known at the time of the proposed initial Business Combination, because the directors of the post-combination business will be responsible for determining officer and director compensation. Any compensation to be paid to our officers will be determined, or recommended to the Board of Directors for determination, either by a compensation committee constituted solely by independent directors or by a majority of the independent directors on our Board of Directors.

We do not intend to take any action to ensure that members of our Management team maintain their positions with us after the consummation of our initial Business Combination, although it is possible that some or all of our officers and directors may negotiate employment or consulting arrangements to remain with us after our initial Business Combination. The existence or terms of any such employment or consulting arrangements to retain their positions with us may influence our Management’s motivation in identifying or selecting a target business, but we do not believe that the ability of our Management to remain with us after the consummation of our initial Business Combination will be a determining factor in our decision to proceed with any potential Business Combination. We are not party to any agreements with our officers and directors that provide for benefits upon termination of employment.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The following table sets forth information regarding the beneficial ownership of our Common Stock as of March 21, 2024 based on information obtained from the persons named below, with respect to the beneficial ownership Common Stock, by:

● each person known by us to be the beneficial owner of more than 5% of our outstanding Common Stock;

● each of our executive officers and directors that beneficially owns our Common Stock; and

● all our executive officers and directors as a group.

In the table below, percentage ownership is based on 5,320,508 shares of our Common Stock, consisting of (i) 5,320,507 shares of our Class A Common Stock and (ii) one share of our Class B Common Stock, issued and outstanding as of March 21, 2024. On all matters to be voted upon, holders of the shares of Class A Common Stock and shares of Class B Common Stock vote together as a single class, unless otherwise required by applicable law. Currently, all of the shares of Class B Common Stock are convertible into Class A Common Stock on a one-for-one basis.

44

Unless otherwise indicated, we believe that all persons named in the table have sole voting and investment power with respect to all shares of Common Stock beneficially owned by them. The following table does not reflect record or beneficial ownership of the Private Placement Rights as these Rights are not exercisable within 60 days of the date of this Report.

	Class A Common Stock					Class B Common Stock
Name and Address of Beneficial Owner(1)	Number of Shares Beneficially Owned		Approximate Percentage of Class			Number of Shares Beneficially Owned		Approximate Percentage of Class		Approximate Percentage of Outstanding Common Stock
Yntegra Capital Investments, LLC(2)		4,029,665		76.0	%		1		100.0		76.0	%
Felipe MacLean(2)		4,029,665		76.0	%		1		100.0		76.0	%
Markus Puusepp(2)		—		—			—		—		—
Luis A. Guerra(3)		—		—			—		—		—
Per Bjorkman(3)		—		—			—		—		—
Marcos Angelini(3)		—		—			—		—		—
Luis Derechin(3)		—		—			—		—		—
All executive officers, directors and director nominees as a group		4,029,665		76.0	%		1		100.0		76.0	%
Mizuho Financial Group, Inc.(4)		816,476		14.78	%		—		—		14.78	%
RiverNorth Capital Management, LLC (5)		300,000		5.43	%						5.43	%

* less than 1%

(1) Unless otherwise noted, the principal business address of each of the following entities or individuals is Kustom Entertainment, Inc., 14001 Marshall Drive Lenexa, KS 66215.

(2) Represents shares held by Yntegra Capital Investments, LLC, the Company’s Sponsor. Yntegra Capital Management, LLC is the sole managing member of the Sponsor and a U.S. entity. Felipe MacLean, a U.S. citizen and the Company’s Chairman and Chief Executive Officer, is the sole manager of Yntegra Capital Management, LLC, and as such, may be deemed to share beneficial ownership of the Common Stock held directly by our Sponsor. Mr. McLean and Markus Puusepp, the Company’s Chief Operating Officer, each own 50% of Yntegra Capital Management, LLC. Each such person disclaims any beneficial ownership of the reported shares other than to the extent of any pecuniary interest they may have therein, directly or indirectly.

(3) Does not include any shares held by our Sponsor. This individual is a member of our Sponsor but does not have voting or dispositive control over the shares held by our Sponsor.

(4) According to a Schedule 13G filed with the SEC on February 14, 2022  by Mizuho Financial Group, Inc., a Japanese corporation (“Mizuho”). Mizuho, Mizuho Bank, Ltd. and Mizuho Americas LLC may be deemed to be indirect beneficial owners of the Public Shares reported therein, which are directly held by Mizuho Securities USA LLC, their wholly-owned subsidiary. The number of Public Shares held by Mizuho is reported as of December 31, 2021, which does not reflect any redemption of shares in the 2023 Redemptions, the 2024 Redemptions, or any other transactions after December 31, 2021. Accordingly, the number of Public Shares and the percentages set forth in the table may not reflect Mizuho’s current beneficial ownership. The principal business address of Mizuho is 1–5–5, Otemachi, Chiyoda–ku, Tokyo 100–8176, Japan.

(5) According to a Schedule 13G filed with the SEC on February 14, 2024 by RiverNorth Capital Management, LLC, a Delaware limited liability company (“RiverNorth”). The number of Public Shares held by the RiverNorth is reported as of December 31, 2023, which does not reflect any redemption of shares in the 2024 Redemptions or any other transactions after December 31, 2023. Accordingly, the number of Public Shares and the percentages set forth in the table may not reflect RiverNorth’s current beneficial ownership. The principal business address of RiverNorth is 360 S. Rosemary Avenue, Ste. 1420, West Palm Beach, Florida 33401.

Securities Authorized for Issuance under Equity Compensation Plans

None.

Changes in Control

None. For more information on the Kustom Entertainment Business Combination, please see “Item 1. Business.”

45

Item 13. Certain Relationships and Related Transactions, and Director Independence.

On March 4, 2021, we issued an aggregate of 3,593,750 Founder Shares to our Sponsor (135,942 of which were forfeited by our Sponsor because the underwriters’ over-allotment option was not exercised in full) for an aggregate purchase price of $25,000 in cash. The number of Founder Shares issued was determined based on the expectation that such Founder Shares would represent 20% of the outstanding shares upon completion of our Initial Public Offering (excluding shares included in the Private Placement Units or the shares of Class A Common Stock issuable to the Representative). The Founder Shares (including the Class A Common Stock issuable upon exercise thereof) may not, subject to certain limited exceptions, be transferred, assigned or sold by the holder.

On April 8, 2021, our Sponsor transferred a membership interest in our Sponsor to each of our three officers and our three independent directors, representing an aggregate 75,000 Founder Shares. The interest of each officer and director relates solely to the number of Founder Shares laid out in their respective agreements. The transferred shares will vest upon our consummation of an initial Business Combination (the “Vesting Date”). If prior to the Vesting Date, any of the grantees ceases to remain in their role, either voluntarily or for a cause, (a “Separation Event”), 100% of the shares granted will be automatically and immediately transferred back to our Sponsor upon such Separation Event.

On July 20, 2023, upon the approval of the Conversion Amendment Proposal by our stockholders at the 2023 Special Meeting, we issued an aggregate of 3,457,806 shares of Class A Common Stock to our Sponsor, upon the conversion of an equal number of Class B Common Stock held by the Sponsor in the Founder Share Conversion. The 3,457,806 shares of Class A Common Stock issued in connection with the Founder Share Conversion are subject to the same restrictions as applied to the Class B Common Stock before the Founder Share Conversion, including, among others, certain transfer restrictions, waiver of redemption rights and the obligation to vote in favor of an initial Business Combination as described in the IPO Registration Statement; consequently, the shares of Class A Common Stock issued in connection with the Founder Share Conversion are not registered under the Securities Act and will remain unregistered until registration is demanded by the Sponsor pursuant to the Letter Agreement we entered into with our Sponsor, officers and directors.

Our Sponsor purchased an aggregate of 571,859 Private Placement Units at a price of $10.00 per Unit, for an aggregate purchase price of $5,718,590 in the Private Placement. The Private Placement Units (including the underlying securities) may not, subject to certain limited exceptions, be transferred, assigned or sold by it until after the completion of our initial Business Combination.

If any of our officers or directors becomes aware of an initial Business Combination opportunity that falls within the line of business of any entity to which he or she has then-current fiduciary or contractual obligations, he or she will honor his or her fiduciary or contractual obligations to present such Business Combination opportunity to such other entity. Our officers and directors currently have certain relevant fiduciary duties or contractual obligations that may take priority over their duties to us.

Commencing July 19, 2021, we agreed to pay an affiliate of our Sponsor a total of $10,000 per month for office space, utilities and secretarial and administrative support, pursuant to the Administrative Support Agreement. Upon completion of our initial Business Combination or our liquidation, we will cease paying these monthly fees.

Prior to the closing of our Initial Public Offering, our Sponsor agreed to loan us up to $300,000 to be used for a portion of the expenses of the offering. These loans were non-interest bearing, unsecured and due at the earlier of September 30, 2021 or the closing of our Initial Public Offering. $173,500 had been advanced on June 30, 2021. The loan was to be repaid upon the closing of our Initial Public Offering out of the offering proceeds. As of December 31, 2021, $0 was outstanding under such loan. The value of our Sponsor’s interest in this transaction corresponds to the principal amount outstanding under any such loan.

In connection with the July 2022 Extension, on July 18, 2022, we issued the July 2022 Extension Note to our Sponsor in the principal amount of $1,383,123, pursuant to which our Sponsor loaned to us $1,383,123 to be deposited into the Trust Account. The July 2022 Extension Note bears no interest and is due and payable upon the earlier to occur of (i) the date on which our initial Business Combination is consummated and (ii) our liquidation. At the election of our Sponsor, up to $1,383,123 of the unpaid principal amount of the July 2022 Extension Note may be converted into Conversion Units. The total Conversion Units so issued shall be equal to: (x) the portion of the principal amount of the July 2022 Extension Note being converted divided by (y) the conversion price of ten dollars ($10.00), rounded up to the nearest whole number of Units.

In connection with the October 2022 Extension, on October 19, 2022, we issued the October 2022 Extension Note to our Sponsor in the principal amount of $1,383,123, pursuant to which our Sponsor loaned to us $1,383,123 to be deposited into the Trust Account. The October 2022 Extension Note bears no interest and is repayable in full upon the earlier of (a) the date of the consummation of our initial Business Combination, or (b) the date of our liquidation.

46

In connection with the 2023 Extension, on July 24, 2023, our Sponsor caused to be deposited into the Trust Account up to $360,000 (representing $0.048 per Public Share), which was deposited into the Trust Account. The 2023 Extension Note bears no interest and is repayable in full upon the earlier of (a) the date of the consummation of our initial Business Combination, or (b) the date of our liquidation.

In connection with the 2024 Extension, on January 22, 2024, our Sponsor caused to be deposited into the Trust Account up to $360,000. The 2024 Extension Note bears no interest and is repayable in full upon the earlier of (a) the date of the consummation of our initial Business Combination, or (b) the date of our liquidation. As of March 21, 2024, $180,000 of the principal on the 2024 Extension Note has been deposited into the Trust Account.

In addition, in order to finance transaction costs in connection with an intended initial Business Combination, our Sponsor or an affiliate of our Sponsor or certain of our officers and directors may, but are not obligated to, loan us Working Capital Loans as may be required. If we complete an initial Business Combination, we would repay such Working Capital Loans. In the event that the initial Business Combination does not close, we may use a portion of the working capital held outside the Trust Account to repay such Working Capital Loans but no proceeds from our Trust Account would be used for such repayment. Up to $1,500,000 of such Working Capital Loans may be convertible into Conversion Units at a price of $10.00 per Conversion Unit (which, for example, would result in the holders being issued Conversion Units to purchase 150,000 Units if $1,500,000 of notes were so converted), at the option of the lender. Such Conversion Units would be identical to the Private Placement Units. We do not expect to seek loans from parties other than our Sponsor or an affiliate of our Sponsor as we do not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our Trust Account. 

On July 21, 2023, we issued the 2023 Working Capital Note in the principal amount of up to $300,000 to our Sponsor. The 2023 Working Capital Note was issued in connection with advances our Sponsor may make in the future to us as Working Capital Loans. The 2023 Working Capital Note is non-interest bearing and payable upon the earlier of (i) completion of our initial Business Combination or (ii) the date that our winding up is effective. We drew $300,000 under the 2023 Working Capital Note, which was outstanding as of December 31, 2023.

In addition, in order to finance transaction costs in connection with an initial Business Combination, our Sponsor or an affiliate of our Sponsor or certain of our officers and directors may, but are not obligated to, provide us Working Capital Loans. $715,000 and $0 were outstanding under any Working Capital Loans as of December 31, 2023 and 2022, respectively.

Other than the foregoing, no compensation of any kind, including any finder’s fee, reimbursement, consulting fee or monies in respect of any payment of a loan, will be paid by us to our Sponsor, officers and directors, or any affiliate of our Sponsor or officers, prior to, or in connection with any services rendered in order to effectuate, the consummation of an initial Business Combination (regardless of the type of transaction that it is). However, these individuals are reimbursed for any out-of-pocket expenses incurred in connection with activities on our behalf, such as identifying potential target businesses and performing due diligence on suitable Business Combinations. Our Audit Committee reviews on a quarterly basis all payments that were made to our Sponsor, officers, directors or our or their affiliates and determines which expenses and the amount of expenses that are to be reimbursed. There is no cap or ceiling on the reimbursement of out-of-pocket expenses incurred by such persons in connection with activities on our behalf.

After our initial Business Combination, members of our Management Team who remain with us may be paid consulting, Management or other fees from the combined company with any and all amounts being fully disclosed to our stockholders, to the extent then known, in the tender offer or proxy solicitation materials, as applicable, furnished to our stockholders, such as the Kustom Entertainment Registration Statement. It is unlikely the amount of such compensation will be known at the time of distribution of such tender offer materials or at the time of a stockholder meeting held to consider our initial Business Combination, as applicable, as it will be up to the directors of the post-combination business to determine executive and director compensation.

We have entered into a Registration Rights Agreement with respect to the Private Placement Units, the securities issuable upon conversion of Working Capital Loans and extension loans (if any) and the shares of Class A Common Stock issuable upon exercise or conversion or exercise of the foregoing and upon conversion of the Founder Shares.

Director Independence

Nasdaq listing standards require that a majority of our Board of Directors be independent. An “independent director” is defined generally as a person other than an officer or employee of the company or its subsidiaries or any other individual having a relationship that, in the opinion of the company’s board of directors, would interfere with the director’s exercise of independent judgment in carrying out the responsibilities of a director. Our Board of Directors has determined that Marcos Angelini, Per Bjorkman and Luis Derechin are “independent directors” as defined in the Nasdaq listing standards and applicable SEC rules. Our independent directors have regularly scheduled meetings at which only independent directors are present.

47

Item 14. Principal Accountant Fees and Services.

The following is a summary of fees paid or to be paid to Marcum for services rendered.

Audit Fees

Audit fees consist of fees for professional services rendered for the audit of our year-end financial statements and services that are normally provided by Marcum in connection with regulatory filings. The aggregate fees of Marcum for professional services rendered for the audit of our annual financial statements, review of the financial information included in our Quarterly Reports on Form 10-Q for the respective periods and other required filings with the SEC for the years ended December 31, 2023 and 2022 totaled approximately $195,794 and $115,360, respectively. The aggregate fees of Marcum related to audit services in connection with our Initial Public Offering totaled approximately $49,955. The above amounts include interim procedures and audit fees, as well as attendance at Audit Committee meetings.

Audit-Related Fees

Audit-related fees consist of fees billed for assurance and related services that are reasonably related to performance of the audit or review of our financial statements and are not reported under “Audit Fees.” These services include attest services that are not required by statute or regulation and consultations concerning financial accounting and reporting standards. We did not pay Marcum for any audit-related fees for the years ended December 31, 2023 and 2022.

Tax Fees

Tax fees consist of fees billed for professional services relating to tax compliance, tax planning and tax advice. We paid Marcum $9,293 and $8,755, respectively, for tax services, planning or advice for the years ended December 31, 2023 and 2022.

All Other Fees

All other fees consist of fees billed for all other services. We did not pay Marcum for any other services for the years ended December 31, 2023 and 2022.

Pre-Approval Policy

Our Audit Committee was formed upon the consummation of our Initial Public Offering. As a result, the Audit Committee did not pre-approve all of the foregoing services, although any services rendered prior to the formation of our Audit Committee were approved by our Board of Directors. Since the formation of our Audit Committee, and on a going-forward basis, the Audit Committee has and will pre-approve all auditing services and permitted non-audit services to be performed for us by our auditors, including the fees and terms thereof (subject to the de minimis exceptions for non-audit services described in the Exchange Act which are approved by the Audit Committee prior to the completion of the audit).

48

PART IV

Item 15. Exhibit and Financial Statement Schedules.

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

(1) Financial Statements

	PAGE
Report of Independent Registered Public Accounting Firm (PCAOB ID Number 688)	F-2
Balance Sheets as of December 31, 2023 and 2022	F-3
Statements of Operations for the year ended December 31, 2023 and 2022	F-4
Statements of Changes in Stockholders’ Deficit for the year ended December 31, 2023 and 2022	F-5
Statements of Cash Flows for the year ended December 31, 2023 and 2022	F-6
Notes to Financial Statements	F-7 to F-22

(2) Financial Statement Schedule

All financial statement schedules are omitted because they are not applicable or the amounts are immaterial and not required, or the required information is presented in the financial statements and notes thereto beginning on page F-1 of this Report.

(3) Exhibits

We hereby file as part of this Report the exhibits listed in the attached Exhibit Index. Exhibits that are incorporated herein by reference can be inspected on the SEC website at www.sec.gov.

Item 16. Form 10-K Summary.

Omitted at our Company’s option.

49

CLOVER LEAF CAPITAL CORP.

INDEX TO FINANCIAL STATEMENTS

	PAGE
Report of Independent Registered Public Accounting Firm PCAOB ID Number 688	F-2
Balance Sheets as of December 31, 2023 and 2022	F-3
Statements of Operations for the year ended December 31, 2023 and 2022	F-4
Statements of Changes in Stockholders’ Deficit for the year ended December 31, 2023 and 2022	F-5
Statements of Cash Flows for the year ended December 31, 2023 and 2022	F-6
Notes to Financial Statements	F-7 to F-22

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and Board of Directors of

Clover Leaf Capital Corp.

Opinion on the Financial Statements

We have audited the accompanying balance sheets of Clover Leaf Capital Corp. (the “Company”) as of December 31, 2023 and 2022, the related statements of operations, changes in stockholders’ deficit and cash flows for each of the two years in the period ended December 31, 2023, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

Explanatory Paragraph – Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As more fully described in Note 1, to the financial statements, the Company’s ability to execute its business plan is dependent upon the consummation of a business combination and it lacks the financial resources it needs to sustain operations for a reasonable period of time, which is considered to be one year from the issuance date of the financial statements. Further, if the Company does not complete a business combination by July 22, 2024, or obtain approval for an extension of this deadline, it will be required to cease all operations except for the purpose of liquidating. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans with regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ Marcum llp

Marcum llp

We have served as the Company’s auditor since 2021.

New York, NY
March 21, 2024

F-2

PART I. FINANCIAL INFORMATION

CLOVER LEAF CAPITAL CORP.

BALANCE SHEETS

	December 31,
	2023			2022
Assets:
Current assets:
Cash	$	162,933		$	303,449
Prepaid expenses		122,364			104,876
Total current assets		285,297			408,325
Investments held in Trust Account		14,648,926			18,276,649
Total Assets	$	14,934,223		$	18,684,974
Liabilities, Redeemable Common Stock and Stockholders’ Deficit
Accrued costs and expenses	$	809,542		$	367,408
Income taxes payable		134,428			137,633
Excise Tax Payable		42,099			—
Deferred income tax		—			18,790
Promissory note to Related Party		3,842,015			2,767,015
Due to related party		10,000			—
Total current liabilities		4,838,084			3,290,846
Deferred underwriting commissions		4,840,931			4,840,931
Total Liabilities		9,679,015			8,131,777
Commitments and Contingencies (see Note 6)
Redeemable Common Stock:
Class A common stock subject to possible redemption, 1,251,156 and 1,627,158 Class A common stock shares at redemption value of $11.85 and $11.24 per share at December 31, 2023 and 2022, respectively		14,830,241			18,283,387
Stockholders’ Deficit:
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding		—			—
Class A common stock, $0.0001 par value; 100,000,000 shares authorized; 4,271,711 and 813,905 shares issued and outstanding (excluding 1,251,156 and 1,627,158 shares subject to possible redemption) at December 31, 2023 and 2022, respectively		427			81
Class B common stock, $0.0001 par value; 10,000,000 shares authorized; 1 and 3,457,807 shares issued and outstanding December 31, 2023 and 2022, respectively		—			346
Accumulated deficit		(9,575,460	)		(7,730,617	)
Total Stockholders’ Deficit		(9,575,033	)		(7,730,190	)
Total Liabilities, Redeemable Common Stock and Stockholders’ Deficit	$	14,934,223		$	18,684,974

The accompanying notes are an integral part of these financial statements.

F-3

CLOVER LEAF CAPITAL CORP.

STATEMENTS OF OPERATIONS

	For the Year Ended December 31,
	2023			2022
Formation and operating costs	$	1,586,541		$	1,291,228
Loss from operations		(1,586,541	)		(1,291,228	)
Other income:
Recovery of previously incurred costs		—			341,684
Interest earned on investments held in Trust Account		737,057			1,195,135
Interest earned on cash held in bank		116			69
Total other income		737,173			1,536,888
(Loss) Income before provision for income taxes		(849,368	)		245,660
Provision for income taxes		(196,591	)		(185,423	)
Net (loss) income	$	(1,045,959	)	$	60,237
Basic and diluted weighted average of redeemable Class A common stock outstanding		1,457,184			12,204,321
Basic and diluted net (loss) income per share, redeemable Class A common stock		(0.18	)		0.00
Basic and diluted weighted average non-redeemable Class A and Class B common stock outstanding		4,271,712			3,457,807
Basic and diluted net (loss) income per share, non-redeemable Class A and Class B common stock		(0.18	)		0.00

The accompanying notes are an integral part of these financial statements.

F-4

CLOVER LEAF CAPITAL CORP.

STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT

FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022

	Class A				Class B						Additional					Total
	Common Stock				Common Stock						Paid-in		Accumulated			Stockholders’
	Shares		Amount		Shares			Amount			Capital		Deficit			Deficit
Balance as of December 31, 2021		813,905		81		3,457,807			346			—		(4,307,272	)		(4,306,845	)
Accretion of Class A ordinary shares to redemption amount		—		—		—			—			—		(3,483,582	)		(3,483,582	)
Net income		—		—		—			—			—		60,237			60,237
Balance as of December 31, 2022		813,905		81		3,457,807			346			—		(7,730,617	)		(7,730,190	)
Conversion of Class B ordinary shares in Class A ordinary shares		3,457,806		346		(3,457,806	)		(346	)		—		—			—
Excise tax liability on share redemptions		—		—		—			—			—		(42,099	)		(42,099	)
Accretion of Class A ordinary shares to redemption amount		—		—		—			—			—		(756,785	)		(756,785	)
Net loss		—		—		—			—			—		(1,045,959	)		(1,045,959	)
Balance as of December 31, 2023		4,271,711	$	427		1		$	—		$	—	$	(9,575,460	)	$	(9,575,033	)

The accompanying notes are an integral part of these financial statements.

F-5

CLOVER LEAF CAPITAL CORP.

STATEMENTS OF CASH FLOWS

	For the Year Ended December 31,
	2023			2022
Cash flows from operating activities:
Net (loss) income	$	(1,045,959	)	$	60,237
Adjustments to reconcile net (loss) income to net cash used in operating activities:
Interest and dividends earned on investment in Trust		(737,173	)		(1,195,135	)
Amortization of prepaid expenses		—			46,557
Changes in operating assets and liabilities:
Accrued costs and expenses		442,135			(75,156	)
Prepaid expenses		(17,488	)		130,175
Due to related party		10,000			(2,903	)
Income taxes payable		(3,205	)		137,633
Deferred income tax		(18,790	)		18,790
Net cash used in operating activities		(1,370,480	)		(879,802	)
Cash Flows from Investing Activities:
Investment of cash in Trust Account		(360,000	)		(2,767,015	)
Disposal of trust assets for redemptions		4,209,931			125,587,180
Withdrawal of trust funds to pay taxes		514,964			502,949
Net cash provided by Investing Activities		4,364,895			123,323,114
Cash Flows from Financing Activities:
Proceeds from sale of common stocks to initial stockholders		(4,209,931	)		(125,587,180	)
Proceeds from issuance of promissory note to related party		1,075,000			2,767,015
Net cash used in financing activities		(3,134,931	)		(122,820,165	)
Net change in cash		(140,516	)		(376,853	)
Cash, beginning of the period		303,449			680,302
Cash, end of the period	$	162,933		$	303,449
Supplemental disclosure of cash flow information:
Recognition of liability for excise tax on redemptions	$	42,099		$	—
Class A share accretion to redemption value in excess of purchase price	$	756,785		$	3,483,582

The accompanying notes are an integral part of these financial statements.

F-6

CLOVER LEAF CAPITAL CORP.

NOTES TO FINANCIAL STATEMENTS

Note 1 — Organization, Business Operation and Going Concern

Clover Leaf Capital Corp. (the “Company”) a blank check company incorporated in the State of Delaware for the purpose of effecting a merger, stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses (“Business Combination”). The Company may pursue the initial Business Combination target in any industry or geographic location. The Company intended to focus its search for a target business engaged in the cannabis industry.

As of December 31, 2023, the Company had not commenced any operations. All activity for the period from February 25, 2021 (inception) through December 31, 2023 relates to the Company’s formation, the initial public offering (the “Initial Public Offering” or “IPO”) and the Company’s efforts to pursue an initial Business Combination described below. The Company will not generate any operating revenues until after the completion of its initial Business Combination at the earliest. The Company will generate non-operating income in the form of interest income on cash and cash equivalents from the proceeds derived from the IPO.

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

The Registration Statement for the Company’s IPO (the “IPO Registration Statement”) was declared effective on July 19, 2021. On July 22, 2021, the Company consummated its IPO of 13,831,230 units (the “Units” and, with respect to the Company’s Class A common stock, par value $0.0001 (“Class A Common Stock”) included in the Units being offered, the “Public Shares”) at $10.00 per Unit, which is discussed in Note 3 (“The Initial Public Offering”), and the sale of 675,593 Units which is discussed in Note 4 (“The Private Placement”), at a price of $10.00 per private placement unit (“Private Placement Units”), in a private placement (the “Private Placement”) to the Sponsor and Maxim Group LLC (the “Representative”), the representative of the underwriters, that closed simultaneously with the IPO. On July 22, 2021, the underwriters partially exercised their over-allotment option and purchased 1,331,230 of their full 1,875,000 Units available and subsequently forfeited the remainder of their option as of July 28, 2021. The Company’s executive officers and directors (“Management”) has broad discretion with respect to the specific application of the net proceeds of the IPO and sale of the Private Placement Units, although substantially all of the net proceeds are intended to be applied generally toward consummating an initial Business Combination.

Transaction costs amounted to $9,562,126 consisting of $2,766,246 of underwriting commissions, $4,840,931 of deferred underwriting commissions, $1,383,123 of the fair value of the 138,312 Class A Common Stock issued to the Representative and/or its designees upon the consummation of the IPO (“Representative Shares”), and $571,826 of other cash offering costs.

The Company’s initial Business Combination must be with one or more target businesses that together have a fair market value equal to at least 80% of the net balance in the Trust Account (as defined below) (excluding the amount of deferred underwriting discounts held and taxes payable on the income earned on the Trust Account) at the time of the signing an agreement to enter into an initial Business Combination. However, the Company will only complete an initial Business Combination if the post-initial Business Combination company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act of 1940, as amended (the “Investment Company Act”). There is no assurance that the Company will be able to successfully effect an initial Business Combination.

Following the closing of the IPO on July 22, 2021, $140,386,985 ($10.15 per Unit) from the net proceeds sold in the IPO, including the proceeds of the sale of the Private Placement Units, will be held in a trust account (“Trust Account”), with Continental Stock Transfer & Trust Company (“Continental”) acting as trustee, and until July 6, 2023 were invested only in U.S. government securities with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act which invest only in direct U.S. Department of the Treasury (“Treasury”) obligations. Except with respect to interest earned on the funds held in the Trust Account that may be released to pay the Company’s franchise and income taxes, if any, the funds held in the Trust Account will not be released from the Trust Account until the earliest to occur of: (1) the completion of an initial Business Combination; (2) the redemption of any Public Shares properly submitted in connection with a stockholder vote to amend the Company’s Amended and Restated Certificate of Incorporation, as amended and currently in effect (the “Amended and Restated Charter”) (A) to modify the substance or timing of the Company’s obligation to redeem 100% of the Public Shares if the Company does not complete an initial Business Combination within the applicable period or (B) with respect to any other provision relating to stockholders’ rights or pre-initial Business Combination activity; and (3) the redemption of the Public Shares if the Company has not completed an initial Business Combination within the applicable period, subject to applicable law.

The Company will provide its Public Stockholders with the opportunity to redeem all or a portion of their Public Shares upon the completion of the initial Business Combination either (1) in connection with a stockholder meeting called to approve the initial Business Combination or (2) by means of a tender offer. The decision as to whether the Company will seek stockholder approval of a proposed initial Business Combination or conduct a tender offer will be made by the Company, solely in its 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 require it to seek stockholder approval under applicable law or stock exchange listing requirement. The Company will provide its public stockholders with the opportunity to redeem all or a portion of their Public Shares upon the completion of the initial Business Combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account calculated as of two business days prior to the consummation of the initial Business Combination, including interest earned on the funds held in the Trust Account and not previously released to the Company to pay franchise and income taxes, divided by the number of then issued and outstanding Public Shares, subject to the limitations described herein.

F-7

The shares of Class A Common Stock and Class B common stock, par value $0.0001 per share (the “Class B Common Stock” and together with the Class A Common Stock, the “Common Stock”) subject to redemption will be recorded at a redemption value and classified as temporary equity upon the completion of the IPO, in accordance with the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” The Company will proceed with an initial Business Combination if the Company has net tangible assets of at least $5,000,001 upon such consummation of an initial Business Combination and, if the Company seeks stockholder approval, a majority of the issued and outstanding shares voted are voted in favor of the initial Business Combination. 

The Company will have only until July 22, 2024 to complete the initial Business Combination (the “Combination Period”). Pursuant to the terms of the Company’s Amended and Restated Charter and the Investment Management Trust Agreement, dated July 19, 2021 entered into between the Company and Continental, as trustee of the Trust Account, in order to extend the time available for the Company to consummate its initial Business Combination, the Sponsor or its affiliates or designees, upon five days’ advance notice prior to the applicable deadline, must deposit into the Trust Account for each additional three-month period, $1,383,123 ($0.10 per share on or prior to the date of the applicable deadline) for each additional three-month period. Any such payments would be made in the form of a loan. Any such loans will be non-interest bearing and payable upon the consummation of an initial Business Combination. If the Company completes an initial Business Combination, it will, at the option of the Sponsor, repay such loaned amounts out of the proceeds of the Trust Account released to the Company or convert a portion or all of the total loan amount into Units at a price of $10.00 per Unit.

On July 18, 2022, the Company issued a promissory note (the “July 2022 Extension Note”) in the principal amount of $1,383,123 to the Sponsor in connection with the extension of the Combination Period from July 22, 2022 to October 22, 2022 (the “July 2022 Extension”).

On October 19, 2022, the Company held a special meeting of stockholders (the “2022 Special Meeting”). At the 2022 Special Meeting, the Company’s stockholders approved an amendment to the Company’s Amended and Restated Charter to extend the date by which the Company must consummate its initial Business Combination from October 22, 2022 to July 22, 2023, or such earlier date as determined by the Company’s board of directors (the “Board”) (the “October 2022 Extension”). In connection with the 2022 Special Meeting, stockholders holding 12,204,072 shares of the Company’s Class A Common Stock issued in the Company’s IPO exercised their right to redeem such shares for a pro rata portion of the funds in the Company’s Trust Account. As a result, approximately $125,587,180.34 (approximately $10.29 per share) was removed from the Company’s Trust Account to pay such holders.

On July 19, 2023, the Company held a special meeting of stockholders in lieu of an annual meeting of stockholders (the “2023 Special Meeting”). At the 2023 Special Meeting, the Company’s stockholders approved an amendment (the “2023 Extension Amendment”) to the Company’s Amended and Restated Charter to extend the date by which the Company must consummate its initial Business Combination from July 22, 2023 to January 22, 2024, or such earlier date as determined by the Company’s Board (the “2023 Extension”). On July 20, 2023, the Company filed the 2023 Extension Amendment with the Secretary of State of the State of Delaware.

In connection with the 2023 Special Meeting, stockholders holding 376,002 shares of the Company’s Class A Common Stock issued in the Company’s IPO exercised their right to redeem such shares for a pro rata portion of the funds in the Company’s Trust Account. As a result, approximately $4,209,931.03 (approximately $11.20 per share after removal of interest to pay taxes) was removed from the Company’s Trust Account to pay such holders, resulting in approximately $14,008,650.13 remaining in the Trust Account.

In connection with the 2023 Extension, the Company will cause up to $360,000 to be deposited into the Trust Account in installments of $60,000 per month, which equates to approximately $0.048 per remaining Public Share, for each calendar month or portion thereof (commencing on July 22, 2023 and on the 22nd of each subsequent month until January 22, 2024), that the Company needs to complete an initial Business Combination, and such amount will be distributed either to: (i) all of the holders of Public Shares upon the Company’s liquidation or (ii) holders of Public Shares who elect to have their shares redeemed in connection with the consummation of the initial Business Combination. As of July 21, 2023, an aggregate of $60,000 had been deposited into the Trust Account to support the 2023 Extension. The Company deposited $360,000 in the Trust Account through December 31, 2023.

On August 31, 2023, the Company received a deficiency letter from the Listing Qualifications Department (the “Staff”) of The Nasdaq Stock Market (“Nasdaq”) notifying the Company that the Company no longer meets the minimum 300 public holders requirement for The Nasdaq Capital Market pursuant to Nasdaq Listing Rule 5550(a)(3) (the “Minimum Public Holders Requirement”). The notification received has no immediate effect on the Company’s Nasdaq listing. On October 16, 2023, the Company submitted to Nasdaq a plan to regain compliance with the Minimum Public Holders Requirement. On October 25, 2023, in response to such compliance plan, the Staff granted the Company an extension of time to regain compliance with the Minimum Public Holders Requirement. Pursuant to the extension, on or before February 27, 2024, the Company must have filed with Nasdaq documentation that demonstrated that the Company’s Common Stock has a minimum of 300 public holders. On February 27, 2024, the Company was not able to demonstrate compliance with the Minimum Public Holders Requirement, and as such, on March 1, 2024, the Company received a notice from the Staff of Nasdaq (the “Delisting Notice”) informing the Company that its securities may be subject to suspension and delisting pending the outcome of a hearing before the Nasdaq Hearings Panel (the “Panel”), which the Company requested on March 8, 2024.

On October 4, 2023, the Company issued a press release announcing that the Company had submitted to EDGAR, the SEC’s online portal, a Registration Statement on Form S-4, which includes a preliminary proxy statement/prospectus, with respect to the Company’s proposed initial Business Combination (the “Kustom Entertainment Business Combination”) with Kustom Entertainment, Inc., a Nevada corporation (“Kustom Entertainment”).

If the Company has not completed the initial Business Combination within the Combination Period, the Company will: (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to the Company to pay franchise and income taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then issued and outstanding Public Shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any); and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining stockholders and the Board, liquidate and dissolve, subject in each case to the Company’s obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law.

F-8

The Sponsor, officers and directors have entered into a letter agreement with the Company, pursuant to which they have agreed to waive: (i) their redemption rights with respect to any Founder Shares (as defined below) (see Note 5), Private Placement Shares and Public Shares held by them, as applicable, in connection with the completion of the initial Business Combination; (ii) their redemption rights with respect to any Founder Shares and Public Shares held by them in connection with a stockholder vote to amend the Company’s Amended and Restated Charter (a) to modify the substance or timing of the Company’s obligation to redeem 100% of the Public Shares if the Company does not complete the initial Business Combination within the Combination Period or (b) with respect to any other provision relating to stockholders’ rights or pre-initial Business Combination activity; and (iii) their rights to liquidating distributions from the Trust Account with respect to any Founder Shares they hold if the Company fails to complete the initial Business Combination within the Combination Period (although they will be entitled to liquidating distributions from the Trust Account with respect to any Public Shares they hold if the Company fails to complete the initial Business Combination within the prescribed time. 

The Sponsor has agreed that it will be liable to the Company if and to the extent any claims by a third party (other than the Company’s independent registered public accounting firm) for services rendered or products sold to the Company, or a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below (i) $10.15 per Public Share or (ii) the actual amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account, if less than $10.15 per share due to reductions in the value of the trust assets, less taxes payable, provided that such liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights to the monies held in the Trust Account (whether or not such waiver is enforceable), nor will it apply to any claims under the Company’s indemnity of the underwriters of the IPO against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). The Company has not independently verified whether the Sponsor has sufficient funds to satisfy its indemnity obligations and believes that the Sponsor’s only assets are securities of the Company and, therefore, the Sponsor may not be able to satisfy those obligations. The Company has not asked the Sponsor to reserve for such obligations.

Franchise and Income Tax Withdrawals from Trust Account

Since completion of its IPO on July 19, 2021, and through December 31, 2023, the Company withdrew $1,017,913 from the Trust Account to pay its liabilities related to the federal and Floria state and Delaware franchise taxes. Through December 31, 2023, the Company remitted $777,312 to the respective tax authorities. Additionally, as of December 31, 2023, the Company had accrued but unpaid income tax liability of $134,428 and was in a credit position of $75,143 for Delaware franchise tax, which resulted in remaining excess of funds withdrawn from the Trust Account, but not remitted to the government authorities of $181,316. As of December 31, 2023, the Company had $162,933 in its operating account and inadvertently used $77,668 of the funds withdrawn from the Trust Account for payment of taxes for payment of other operating expenses not related to taxes. The Company continues to incur further tax liabilities and intends to cover such liabilities from the funds in its operating account and, if necessary, from the proceeds from the promissory note to Sponsor, without recurring to additional withdrawals from the Trust Account, until the excess of the funds withdrawn from the Trust Account over the amounts remitted to the government authorities is cured.

Going Concern

As of December 31, 2023 and 2022, the Company had $162,933 and $303,449 in cash, respectively, and working capital deficit of $4,493,502 and $2,882,521 (net of Delaware franchise and income taxes), respectively.

Prior to the completion of the IPO, the Company’s liquidity needs had been satisfied through a payment from the Sponsor of $25,000 (see Note 5) for the Founder Shares to cover certain offering costs and the loan under an unsecured promissory note from the Sponsor of $300,000 (see Note 5).

On July 24, 2023, the Company issued a promissory note (the “2023 Working Capital Note”) in the principal amount of up to $300,000 to the Sponsor. The 2023 Working Capital Note was issued in connection with advances the Sponsor may make in the future to the Company for working capital expenses. The loan is non-interest bearing and payable upon the earlier of (i) completion of the initial Business Combination or (ii) the date the winding up of the Company is effective.

At various dates in the fourth quarter of 2023, the Sponsor advanced to the Company $415,000 for the Company’s working capital needs. On January 22, 2024, the Company issued the a promissory note (the “2024 Working Capital Note”) in the principal amount of up to $1,000,000 to the Sponsor. The 2024 Working Capital Note was issued in connection with advances the Sponsor may make in the future to the Company for working capital expenses. The loan is non-interest bearing and payable upon the earlier of (i) completion of the initial Business Combination or (ii) the date the winding up of the Company is effective. The funds advanced in the fourth quarter of 2023 were considered advanced under terms of this 2024 Working Capital Note and were outstanding as of December 31, 2023.

In addition, in order to finance transaction costs in connection with an Initial Business Combination, the Company’s Sponsor or an affiliate of the Sponsor or certain of the Company’s officers and directors may, but are not obligated to, provide the Company Working Capital Loans, as defined below (see Note 5). $715,000 and $0 were outstanding under Working Capital Loans as of December 31, 2023, and 2022, respectively.

Until the consummation of an initial Business Combination, the Company will be using the funds not held in the Trust Account for identifying and evaluating prospective acquisition candidates, performing due diligence on prospective target businesses, paying for travel expenditures, selecting the target business to acquire, and structuring, negotiating, and consummating the initial Business Combination. The Company will need to raise additional capital through loans or additional investments from its Sponsor, stockholders, officers, directors, or third parties. The Company’s Sponsor, officers and directors may, but are not obligated to, loan the Company funds from time to time or at any time, in whatever amount they deem reasonable in their sole discretion, to meet the Company’s working capital needs. Accordingly, the Company may not be able to obtain additional financing. If the Company is unable to raise additional capital, it may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing operations, suspending the pursuit of a potential transaction, and reducing overhead expenses.

F-9

The Company cannot provide any assurance that new financing will be available to it on commercially acceptable terms, if at all. In connection with the Company’s assessment of going concern considerations in accordance with FASB’s Accounting Standards Update (“ASU”) Topic 2014-15, “Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern.” The Company has until July 22, 2024 to consummate an initial Business Combination, unless otherwise extended. It is uncertain that the Company will be able to consummate an initial Business Combination by this time. If an initial Business Combination is not consummated by this date, there will be a mandatory liquidation and subsequent dissolution of the Company. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. 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, and also do not include any adjustments that might result should an initial Business Combination not occur.

Merger Agreement

On June 1, 2023, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with CL Merger Sub, Inc., a Nevada corporation and a wholly-owned subsidiary of the Company (“Merger Sub”), the Sponsor, in the capacity as the representative from and after the Effective Time (as defined in the Merger Agreement) for the stockholders of the Company (other than the Kustom Entertainment Stockholder (as defined below) as of immediately prior to the Effective Time and its successors and assignees) in accordance with the terms and conditions of the Merger Agreement, Kustom Entertainment, which has a focus and mission to own and produce events, festivals, and entertainment alongside its evolving primary and secondary ticketing technologies, and Digital Ally, Inc., a Nevada corporation and the sole stockholder of Kustom Entertainment (the “Kustom Entertainment Stockholder”).

Pursuant to the Merger Agreement, subject to the terms and conditions set forth therein upon the consummation of the transactions contemplated by the Merger Agreement (the “Closing”), Merger Sub will merge with and into Kustom Entertainment (the “Merger” and, together with the other transactions contemplated by the Merger Agreement, the “Merger Transactions”), with Kustom Entertainment continuing as the surviving corporation in the Merger and a wholly-owned subsidiary of the Company. In the Merger, all of the issued and outstanding capital stock of Kustom Entertainment immediately prior to the Effective Time shall no longer be outstanding and shall automatically be cancelled and shall cease to exist, in exchange for the right for the Kustom Entertainment Stockholder to receive the Merger Consideration (as defined herein). Upon consummation of the Transactions, the Company will change its name to “Kustom Entertainment, Inc.”

The aggregate merger consideration to be paid pursuant to the Merger Agreement to the Kustom Entertainment Stockholder as of immediately prior to the Effective Time will be an amount equal to (the “Merger Consideration”) (i) $125 million, minus (ii) the estimated consolidated indebtedness of Kustom Entertainment as of the Closing (“Closing Indebtedness”). The Merger Consideration to be paid to the Kustom Entertainment Stockholder will be paid solely by the delivery of new shares of the Company’s Class A Common Stock, each valued at $11.14 per share. The Closing Indebtedness (and the resulting Merger Consideration) is based solely on estimates determined shortly prior to the Closing and is not subject to any post-Closing true-up or adjustment.

Risks and Uncertainties

Management continues to evaluate the impact of the COVID-19 pandemic and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s financial position, results of its operations, and/or search for a target company, the specific impact is not readily determinable as of the date of these financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Inflation Reduction Act of 2022

On August 16, 2022, the Inflation Reduction Act of 2022 (the “IR Act”) was signed into federal law. The IR Act provides for, among other things, a new U.S. federal 1% excise tax on certain repurchases of stock by publicly traded U.S. domestic corporations and certain U.S. domestic subsidiaries of publicly traded foreign corporations occurring on or after January 1, 2023. The excise tax is imposed on the repurchasing corporation itself, not its shareholders from which shares are repurchased. The amount of the excise tax is generally 1% of the fair market value of the shares repurchased at the time of the repurchase. However, for purposes of calculating the excise tax, repurchasing corporations are permitted to net the fair market value of certain new stock issuances against the fair market value of stock repurchases during the same taxable year. In addition, certain exceptions apply to the excise tax. The Treasury has been given authority to provide regulations and other guidance to carry out and prevent the abuse or avoidance of the excise tax.

Any redemption or other repurchase that occurs after December 31, 2022, in connection with an initial Business Combination, a vote by the stockholders of the Company to extend the period of time to complete the initial Business Combination (“Extension Vote”) or otherwise, may be subject to the excise tax. Whether and to what extent the Company would be subject to the excise tax in connection with an initial Business Combination, Extension Vote or otherwise would depend on a number of factors, including (i) the fair market value of the redemptions and repurchases in connection with the initial Business Combination, extension or otherwise, (ii) the structure of an initial Business Combination, (iii) the nature and amount of any “PIPE” or other equity issuances in connection with an initial Business Combination (or otherwise issued not in connection with an initial Business Combination but issued within the same taxable year of an initial Business Combination), and (iv) the content of regulations and other guidance from the Treasury. In addition, because the excise tax would be payable by the Company and not by the redeeming holder, the mechanics of any required payment of the excise tax have not been determined. The foregoing could cause a reduction in the cash available on hand to complete an initial Business Combination and in the Company’s ability to complete an initial Business Combination.

F-10

Note 2 — Summary of Significant Accounting Policies

Basis of Presentation

The accompanying financial statements of the Company are presented in U.S. dollars in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”).

Emerging Growth Company Status

The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012, (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

Use of Estimates

The preparation of these financial statements in conformity with GAAP requires Management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. As of December 31, 2023 and 2022, the Company had $162,933 and $303,449 in cash, respectively, and no cash equivalents.

Investments Held in Trust Account

As of December 31, 2023 and 2022, the Company had $14,648,926 and $18,276,649 in investments held in the Trust Account, respectively.

As of December 31, 2023, the Company’s investments held in the Trust Account are held in an interest-bearing demand deposit account and are classified as trading securities. Trading securities are presented on the balance sheets at fair value at the end of each reporting period. Gains and losses resulting from the change in fair value of investments held in Trust Account are included in interest earned on marketable securities held in Trust Account in the accompanying statements of operations. The estimated fair values of investments held in Trust Account are determined using available market information.

F-11

Prior to the current reporting period, the Company classified its Treasury securities as held-to-maturity in accordance with FASB ASC Topic 320 “Investments - Debt and Equity Securities.” Held-to-maturity securities are those securities which the Company has the ability and intent to hold until maturity. Held-to-maturity Treasury securities were recorded at amortized cost and adjusted for the amortization or accretion of premiums or discounts.

A decline in the market value of held-to-maturity securities below cost that is deemed to be other than temporary, results in an impairment that reduces the carrying costs to such securities’ fair value. The impairment is charged to earnings and a new cost basis for the security is established. To determine whether an impairment is other than temporary, the Company considers whether it has the ability and intent to hold the investment until a market price recovery and considers whether evidence indicating the cost of the investment is recoverable outweighs evidence to the contrary. Evidence considered in this assessment includes the reasons for the impairment, the severity and the duration of the impairment, changes in value subsequent to year-end, forecasted performance of the investee, and the general market condition in the geographic area or industry in which the investee operates.

Premiums and discounts are amortized or accreted over the life of the related held-to-maturity security as an adjustment to yield using the effective-interest method. Such amortization and accretion are included in the “Interest and dividends earned on investment held in trust” line item in the statements of operations. Interest income is recognized when earned.

The carrying value, excluding gross unrealized holding loss and fair value of held-to-maturity securities on December 31, 2023 and 2022 are as follows: 

	Carrying Value as of December 31, 2023		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value as of December 31, 2023
Money Market Funds		14,648,926		—		—		14,648,926
	$	14,648,926	$	—	$	—	$	14,648,926

	Carrying Value as of December 31, 2022		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value as of December 31, 2022
U.S. Treasury Securities (matured May 25, 2023)		18,276,649		—		217		18,276,866
	$	18,276,649	$	—	$	217	$	18,276,866

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which, at times, may exceed the federal depository insurance coverage of $250,000. The Company has not experienced losses on these accounts, and Management believes the Company is not exposed to significant risks on such accounts.

Offering Costs Associated with Initial Public Offering

The Company complies with the requirements of the FASB ASC Topic 340-10-S99-1 and SEC Staff Accounting Bulletin Topic 5A—“Expenses of Offering”. Offering costs consist of legal, accounting, underwriting and other costs incurred through the consummation of the IPO. Offering costs amounted to $9,562,126 and were charged to permanent and temporary equity, ratably with the redeemable and non-redeemable shares they are allocated to, upon the completion of the IPO.

F-12

Fair Value of Financial Instruments

The fair value of the Company’s assets and liabilities, which qualify as financial instruments under FASB ASC Topic 820, “Fair Value Measurements and Disclosures” (“ASC 820”) approximates the carrying amounts represented in the balance sheet, primarily due to its short-term nature.

The Company follows the guidance in ASC 820 for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period and non-financial assets and liabilities that are re-measured and reported at fair value at least annually.

The fair value of the Company’s financial assets and liabilities reflects Management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:

● Level 1 – Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. Valuation adjustments and block discounts are not being applied. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these securities does not entail a significant degree of judgment.

● Level 2 – Valuations based on (i) quoted prices in active markets for similar assets and liabilities, (ii) quoted prices in markets that are not active for identical or similar assets, (iii) inputs other than quoted prices for the assets or liabilities, or (iv) inputs that are derived principally from or corroborated by market through correlation or other means.

● Level 3 – Valuations based on inputs that are unobservable and significant to the overall fair value measurement.

Derivative Financial Instruments

The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with FASB ASC Topic 815, “Derivatives and Hedging”. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value on the grant date and is then re-valued at each reporting date, with changes in the fair value reported in the statement of operations. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date.

F-13

Class A Common Stock Subject to Possible Redemption

All of the 13,831,230 Class A Common Stock sold as part of the Units in the IPO contain a redemption feature that allows for the redemption of such Public Shares in connection with the Company’s liquidation, if there is a stockholder vote or tender offer in connection with the initial Business Combination and in connection with certain amendments to the Company’s Amended and Restated Charter. In accordance with the SEC and its staff’s guidance on redeemable equity instruments, which has been codified in FASB ASC Topic 480-10-S99, redemption provisions not solely within the control of the Company require Common Stock subject to redemption to be classified outside of permanent equity. Given that the Class A Common Stock was issued with other freestanding instruments (i.e., equity rights), the initial carrying value of Class A Common Stock classified as temporary equity is the allocated proceeds based on the guidance in FASB ASC Topic 470-20, “Debt—Debt with Conversion and Other Options.”

If it is probable that the equity instrument will become redeemable, the Company has the option to either accrete changes in the redemption value over the period from the date of issuance (or from the date that it becomes probable that the instrument will become redeemable, if later) to the earliest redemption date of the instrument or to recognize changes in the redemption value immediately as they occur and adjust the carrying amount of the instrument to equal the redemption value at the end of each reporting period. The Company has elected to recognize the changes immediately.

Immediately upon the closing of the IPO, the Company recognized the accretion from initial book value to redemption amount, which approximates fair value. The change in the carrying value of Class A Common Stock subject to possible redemption resulted in charges against additional paid-in capital (to the extent available) and accumulated deficit and Class A Common Stock.

As of December 31, 2023 and 2022, the Class A Common Stock reflected on the balance sheet is reconciled in the following table:

Gross Proceeds	$	138,312,300
Proceeds allocated to equity rights		(760,718	)
Less:
Issuance costs related to Class A common stock subject to possible redemption		(9,509,534	)
Plus:
Remeasurement of carrying value to redemption value		12,344,937
Contingently redeemable Class A common stock subject to possible redemption (December 31, 2021)		140,386,985
Less:
Redemptions of Class A common stock		(125,587,180	)
Plus:
Remeasurement of carrying value to redemption value		3,483,582
Contingently redeemable Class A common stock subject to possible redemption (December 31, 2022)		18,283,387
Plus:
Remeasurement of carrying value to redemption value		756,785
Less:
Redemptions of Class A common stock		(4,209,931	)
Contingently redeemable Class A common stock subject to possible redemption (December 31, 2023)	$	14,830,241

Net (Loss) Income Per Common Stock

The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share.” Net (loss) income per share is computed by dividing net (loss) income by the weighted average number of shares of Common Stock outstanding during the period. The Company has two classes of shares, redeemable Common Stock and non-redeemable Common Stock. The Company’s redeemable Common Stock is comprised of Class A shares sold in the IPO. The Company’s non-redeemable shares are comprised of Class B shares purchased by the Sponsor as well as Class A shares sold in the Private Placement and Representative Shares. Earnings and losses are shared pro rata between the two classes of shares. The Company’s statement of operations applies the two-class method in calculating net (loss) income per share. Basic and diluted net (loss) income per common share for redeemable Common Stock and non-redeemable Common Stock is calculated by dividing net (loss) income, allocated proportionally to each class of Common Stock, attributable to the Company by the weighted average number of shares of redeemable and non-redeemable stock outstanding.

The calculation of diluted (loss) income per share of Common Stock does not consider the effect of the rights issued in connection with the IPO since exercise of the rights is contingent upon the occurrence of future events and the inclusion of such rights would be anti-dilutive. Accretion of the carrying value of Class A Common Stock to redemption value is excluded from net (loss) income per redeemable share because the redemption value approximates fair value. As a result, diluted net (loss) income per share is the same as basic net (loss) income per share for the periods presented.

F-14

The basic and diluted (loss) income per common stock is calculated as follows:

	For the Year Ended December 31,
	2023			2022
Common stock subject to possible redemption
Numerator:
Net (loss) income allocable to redeemable Class A common stock	$	(266,047	)	$	46,938
Denominator:
Weighted Average redeemable Class A common stock, basic and diluted		1,457,184			12,204,321
Basic and Diluted net (loss) income per share, redeemable Class A common stock	$	(0.18	)	$	0.00
Non-redeemable common stock
Numerator:
Net (loss) income allocable to non-redeemable Class A and Class B common stock	$	(779,912	)	$	13,299
Denominator:
Weighted Average non-redeemable Class A and Class B common stock, basic and diluted		4,271,712			3,457,807
Basic and diluted net (loss) income per share, non-redeemable Class A and Class B common stock	$	(0.18	)	$	0.00

Income Taxes

The Company accounts for income taxes under FASB ASC Topic 740, “Income Taxes” (“ASC 740”). ASC 740 requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statement and tax basis of assets and liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carry forwards. ASC 740 additionally requires a valuation allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not be realized.

ASC 740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim period, disclosure and transition.

The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of December 31, 2023 and 2022. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position.

The Company has identified the United States as its only “major” tax jurisdiction.

The Company is subject to income tax examinations by major taxing authorities since inception. These examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions and compliance with federal and state tax laws. The Company’s Management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months. 

F-15

Recent Accounting Pronouncements

In August 2020, the FASB issued ASU Topic 2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” (“ASU 2020-06”), which simplifies accounting for convertible instruments by removing major separation models required under current GAAP. ASU 2020-06 also removes certain settlement conditions that are required for equity-linked contracts to qualify for the derivative scope exception, and it simplifies the diluted earnings per share calculation in certain areas. ASU 2020-06 is effective January 1, 2024 and should be applied on a full or modified retrospective basis, with early adoption permitted beginning on January 1, 2021. The Company is reviewing what impact, if any, adoption will have on the Company’s financial position, results of operations or cash flows.

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” (“ASU 2023-09”), which requires disclosure of incremental income tax information within the rate reconciliation and expanded disclosures of income taxes paid, among other disclosure requirements. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company’s Management does not believe the adoption of ASU 2023-09 will have a material impact on its consolidated financial statements and disclosures.

Management does not believe that any other recently issued, but not effective, accounting standards, if currently adopted, would have a material effect on the Company’s financial statements.

Note 3 — Initial Public Offering

On July 22, 2021, the Company consummated its IPO of 13,831,230 Units at a purchase price of $10.00 per Unit, generating gross proceeds of $138,312,300. This included 1,331,230 Units due to a partial over-allotment exercised by the underwriters. The underwriters forfeited their remaining over-allotment option on July 28, 2021. Each Unit consists of (i) one share of Class A Common Stock and (ii) one right to receive one-eighth (1/8) of a share of Class A Common Stock upon the consummation of the initial Business Combination (the “Rights”).

The Company paid an underwriting fee at the closing of the IPO of $2,766,246. An additional fee of $4,840,931 was deferred and will become payable to the underwriters from the amounts held in the Trust Account solely in the event the Company completes its initial Business Combination.

 
Note 4 — Private Placement

Simultaneously with the closing of the IPO and the sale of the Units, the Sponsor purchased an aggregate of 571,859 Private Placement Units at a price of $10.00 per Private Placement Unit ($5,718,590 in the aggregate) and the Representative purchased an aggregate of 103,734 Private Placement Units at a price of $10.00 per Private Placement Unit ($1,037,340 in the aggregate) in a Private Placement. Each Private Placement Unit is identical to the Units offered in the IPO except as described below.

The Private Placement Units and their component securities will not be transferable, assignable or salable until after the completion of the initial Business Combination except to permitted transferees. There will be no redemption rights or liquidating distributions from the Trust Account with respect to the Founder Shares, Private Placement Shares or the Private Placement Rights, which will expire worthless if the Company does not consummate an initial Business Combination within the Combination Period.

Note 5 — Related Party Transactions

Founder Shares

In March 2021, the Sponsor paid $25,000 in consideration for 3,593,750 shares of Class B Common Stock (the “Founder Shares”). The number of Founder Shares issued was determined based on the expectation that the Founder Shares would represent 20% of the outstanding shares after the IPO (excluding shares included in the Private Placement Units or the shares of Class A Common Stock issuable to the Representative). Up to 468,750 of the Founder Shares were subject to forfeiture depending on the extent to which the underwriters’ over-allotment is exercised. On July 22, 2021, the underwriters partially exercised their over-allotment option and purchased an additional 1,331,230 of their full 1,875,000 option. The underwriters forfeited the remainder of their over-allotment option as of July 28, 2021, resulting in aggregate Founders Shares outstanding of 3,457,807.

F-16

On April 8, 2021, the Sponsor transferred a membership interest (the “Interest”) to three of the Company’s officers and the three independent directors of 75,000 Founder Shares. The Interest relates solely to the number of Founder Shares laid out in the Company’s officers’ and independent directors’ respective agreements. The transferred shares shall vest upon the Company consummating an initial Business Combination (the “Vesting Date”). If prior to the Vesting Date, any of the grantees ceases to remain in their role, either voluntarily or for a cause (a “Separation Event”), 100% of the shares granted will be automatically and immediately transferred back to the Sponsor upon such Separation Event. Since the stock grants to both directors and to the officers contain the performance condition of consummating an initial Business Combination, the Company has determined the appropriate accounting treatment is to defer recognition of the compensation costs until the consummation of an initial Business Combination in accordance with FASB ASC Topic 718, “Compensation—Stock Compensation.”

The Company’s Sponsor and any other holders of Founder Shares (or their permitted transferees) prior to our IPO (“Initial Stockholders”), including the Interests transferred to the Company’s officers and directors, have agreed not to transfer, assign or sell any of their Founder Shares until the earlier to occur of: (i) six months after the completion of the initial Business Combination; and (ii) subsequent to the initial Business Combination (a) if the closing price of the shares of the Class A Common Stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing after the initial Business Combination or (b) the date on which the Company completes a liquidation, merger, capital stock exchange, reorganization or other similar transaction that results in all of the public stockholders having the right to exchange their shares of Common Stock for cash, securities or other property (except with respect to permitted transferees). Any permitted transferees would be subject to the same restrictions and other agreements of the Company’s Initial Stockholders with respect to any Founder Shares (the “Lock-Up”).

On July 20, 2023, the Company issued an aggregate of 3,457,806 shares of its Class A Common Stock to the Sponsor upon the conversion (the “Founder Share Conversion”) of an equal number of shares of Class B Common Stock of the Company held by the Sponsor. The 3,457,806 shares of Class A Common Stock issued in connection with the Founder Share Conversion are subject to the same restrictions as applied to the Class B Common Stock before the Founder Share Conversion, including, among other things, certain transfer restrictions, waiver of redemption rights and the obligation to vote in favor of an Initial Business Combination as described in the prospectus for the Company’s IPO. Following the Founder Share Conversion, there were 5,522,867 shares of Class A Common Stock issued and outstanding and 1 share of Class B Common Stock issued and outstanding. As a result of the Founder Share Conversion, the Sponsor holds approximately 73.0% of the Company’s issued and outstanding Class A Common Stock.

Promissory Note — Related Party

On March 4, 2021, the Sponsor agreed to loan the Company up to $300,000 to be used for a portion of the expenses of the IPO, under a promissory note. These loans are non-interest bearing, unsecured and due at the earlier of September 30, 2021, or the closing of the IPO. These loans were repaid upon the closing of the IPO out of the offering proceeds that had been allocated to the payment of offering expenses. As of December 31, 2023 and 2022, there is no amount outstanding under the promissory note.

On July 18, 2022, the Company issued the July 2022 Extension Note in the principal amount of $1,383,123 to the Sponsor in connection with the July 2022 Extension. The July 2022 Extension Note bears no interest and is due and payable upon the earlier to occur of (i) the date on which the Company’s initial Business Combination is consummated and (ii) the liquidation of the Company on or before October 22, 2022 or such liquidation date as may be approved by the Company’s stockholders. At the election of the Sponsor, up to $1,383,123 of the unpaid principal amount of the July 2022 Extension Note may be converted into Units of the Company (the “Conversion Units”) with the total Conversion Units so issued shall be equal to: (i) the portion of the principal amount of the July 2022 Extension Note being converted divided by (ii) the conversion price of ten dollars ($10.00), rounded up to the nearest whole number of Conversion Units. The conversion feature included in the July 2022 Extension Note is closely related to the debt instrument itself and is not bifurcated from the host instrument. As a result, all debt proceeds received have been allocated to debt liability. As of December 31, 2023, and 2022, there was $1,383,892 outstanding under the July 2022 Extension Note.

On October 19, 2022, in connection with the October 2022 Extension, the Company issued a further promissory note (the “October 2022 Extension Note”) in the principal amount of $1,383,123 to the Sponsor pursuant to which the Sponsor loaned to the Company $1,383,123 to deposit into the Company’s Trust Account for each share of the Company’s Class A Common Stock that was not redeemed in connection with the October 2022 Extension. The October 2022 Extension Note bears no interest and is repayable in full upon the earlier of (i) the date of the consummation of the Company’s initial Business Combination, or (ii) the date of the liquidation of the Company. As of December 31, 2023, and 2022, there was $1,383,123 outstanding under the October 2022 Extension Note.

F-17

On July 21, 2023, the Company issued a promissory note (the “2023 Extension Note”) in the aggregate principal amount of up to $360,000 to the Sponsor, pursuant to which the Sponsor agreed to loan to the Company up to $360,000 to deposit into Trust Account for the Company’s Class A Common Stock, held by the Company’s public stockholders that were not redeemed in connection with the 2023 Extension Amendment. On July 21, 2023, the Company deposited $60,000 into the Trust Account, with such amount being treated as the first draw under the 2023 Extension Note, and the Company will continue to deposit $60,000 into the Trust Account for each additional calendar month (promptly following the 22^nd of each calendar month), or portion thereof, that is needed by the Company to complete an initial Business Combination until January 22, 2024, and such amount will be distributed either to: (i) all of the holders of Public Shares upon the Company’s liquidation or (ii) holders of Public Shares who elect to have their shares redeemed in connection with the consummation of the initial Business Combination. The 2023 Extension Note bears no interest and is repayable in full upon the earlier of (i) the date of the consummation of the Company’s initial Business Combination or (ii) the date of the liquidation of the Company. The Sponsor deposited $360,000 in the Trust Account under the 2023 Extension Note, which was outstanding as of December 31, 2023.

On July 21, 2023, the Company issued the 2023 Working Capital Note in the principal amount of up to $300,000 to the Sponsor. The 2023 Working Capital Note was issued in connection with advances the Sponsor may make in the future to the Company for working capital expenses. The loan is non-interest bearing and payable upon the earlier of (i) completion of the initial Business Combination or (ii) the date the winding up of the Company is effective. The Company drew $300,000 under the 2023 Working Capital Note which was outstanding as of December 31, 2023.

At various dates in the fourth quarter of 2023, the Sponsor advanced to the Company $415,000 for the working capital needs. On January 22, 2024, the Company issued the 2024 Working Capital Note in the principal amount of up to $1,000,000 to the Sponsor. The 2024 Working Capital Note was issued in connection with advances the Sponsor may make in the future to the Company for working capital expenses. The loan is non-interest bearing and payable upon the earlier of (i) completion of the initial Business Combination or (ii) the date the winding up of the Company is effective. The funds advanced in the fourth quarter of 2023 were considered advanced under terms of this note and were outstanding as of December 31, 2023.

Related Party Loans

In order to fund working capital deficiencies or finance transaction costs in connection with an intended initial Business Combination, the Sponsor, an affiliate of the Sponsor or certain of the Company’s officers and directors may, but is not obligated to, loan the Company funds as may be required (the “Working Capital Loans”). If the Company completes an initial Business Combination, the Company will repay such loaned amounts out of the proceeds of the Trust Account released to the Company. Otherwise, such Working Capital Loans would be repaid only out of funds held outside the Trust Account. In the event that the initial Business Combination does not close, the Company may use a portion of the working capital held outside the Trust Account to repay such loaned amounts, but no proceeds from the Trust Account would be used to repay such loaned amounts. Up to $1,500,000 of such Working Capital Loans may be convertible into Private Placement-equivalent Units at a price of $10.00 per Unit (which, for example, would result in the holders being issued 150,000 Units if $1,500,000 of notes were so converted), at the option of the lender. The Units would be identical to the Private Placement Units issued to the Sponsor. $715,000 and $0 were outstanding under such Working Capital Loans as of December 31, 2023 and 2022, respectively.

Administrative Support Agreement

Commencing on the date of the IPO, the Company has agreed to pay an affiliate of the Sponsor for office space, secretarial, and administrative services provided to members of the Management Team, in the amount of $10,000 per month. The administrative support agreement began on the day the Company first listed on The Nasdaq Capital Market and continue monthly until the completion of the Company’s initial Business Combination or liquidation of the Company. For the year ended December 31, 2023, the Company incurred $120,000, in administrative support fees, which is included in formation and operating costs in the accompanying statements of operations. For the year ended December 31, 2022, the Company incurred $120,000 in administrative support fees which is included in formation and operating costs in the accompanying statements of operations. As of December 31, 2023 and 2022, there was $10,000 and $0, respectively, outstanding, which is included on the accompanying balance sheets as “due to related party.”

F-18

Note 6 — Commitments and Contingencies

Registration Rights

The holders of the Founder Shares, Private Placement Units and securities that may be issued upon conversion of Working Capital Loans and extension loans will have registration rights to require the Company to register a sale of any of its securities held by them pursuant to a registration rights agreement. These holders will be entitled to make up to three demands, excluding short-form registration demands, that the Company registers such securities for sale under the Securities Act. In addition, these holders will have “piggyback” registration rights to include their securities in other registration statements filed by the Company. Notwithstanding the foregoing, the underwriters may not exercise their demand and “piggyback” registration rights after five and seven years, respectively, after the effective date of the IPO Registration Statement forms a part and may not exercise their demand rights on more than one occasion.

Underwriting Agreement

The Company granted the underwriters a 30-day option to purchase up to 1,875,000 additional Units to cover any over-allotments, if any, at the IPO price less the underwriting discounts and commissions. On July 22, 2021, the underwriters partially exercised their over-allotment option and purchased an additional 1,331,230 Units and forfeited the remainder of their over-allotment option as of July 28, 2021.

The Company agreed to pay or reimburse the underwriters for travel, lodging, and other “road show” expenses, expenses of the underwriters’ legal counsel, and certain diligence and other fees, including the preparation, binding and delivery of bound volumes in form and style reasonably satisfactory to the Representative, transaction Lucite cubes, or similar commemorative items in a style as reasonably requested by the Representative, and reimbursement for background checks on the Company’s directors and executive officers, which such fees and expenses are capped at an aggregate of $125,000 (less amounts previously paid).

The underwriters will be entitled to a deferred underwriting discount of 3.5% of the gross proceeds of the IPO held in the Trust Account upon the completion of the Company’s initial Business Combination, subject to the terms of the underwriting agreement.

The Representative’s Common Stock

The Company agreed to issue to the Representative and/or its designees, 125,000 shares of Common Stock (or 143,750 shares if the underwriter’s over-allotment option is exercised in full) upon the consummation of the IPO. On July 22, 2021, the underwriters partially exercised their over-allotment option, resulting in an aggregate issuance of 138,312 Representative Shares. These shares were valued at a price of $10.00 which was the sale price of the Units sold in the IPO. The Representative has agreed not to transfer, assign, or sell any such shares until the completion of the Company’s initial Business Combination. In addition, the Representative has agreed (i) to waive its redemption rights with respect to such shares in connection with the completion of the Company’s initial Business Combination and (ii) to waive its rights to liquidating distributions from the Trust Account with respect to such shares if the Company fails to complete an initial Business Combination within the applicable period.

The shares have been deemed compensation by the Financial Industry Regulatory Authority (“FINRA”) and are therefore subject to a Lock-Up for a period of 180 days immediately following the date of the effectiveness of the IPO Registration Statement pursuant to Rule 5110(g)(1) of FINRA’s NASD Conduct Rules. Pursuant to FINRA Rule 5110(g)(1), these securities will not be the subject of any hedging, short sale, derivative, put, or call transaction that would result in the economic disposition of the securities by any person for a period of 180 days immediately following the effective date of the IPO Registration Statement, nor may they be sold, transferred, assigned, pledged, or hypothecated for a period of 180 days immediately following the effective date of the IPO Registration Statement except to any underwriter and selected dealer participating in the IPO and their bona fide officers or partners.

Right of First Refusal

Subject to certain conditions, the Company will grant the Representative, for a period beginning on the closing of the IPO and ending 15 months after the date of the consummation of the initial Business Combination, a right of first refusal to act as lead left book-running managing underwriter with at least 75% of the economics; or, in the case of a three-handed deal, 50% of the economics, for any and all future public and private equity, convertible, and debt offerings for the Company or any of its successors or subsidiaries. In accordance with FINRA Rule 5110(f)(2)(E)(i), such right of first refusal shall not have a duration of more than three years from the effective date of the IPO Registration Statement.

F-19

Note 7 — Stockholders’ Deficit

Preferred Stock — The Company is authorized to issue 1,000,000 shares of preferred stock with a par value of $0.0001 per share. As of December 31, 2023 and 2022, there were no shares of preferred stock issued or outstanding.

Class A Common Stock — The Company is authorized to issue 100,000,000 shares of Class A Common Stock with a par value of $0.0001 per share. Holders of shares of Class A Common Stock are entitled to one vote for each share. As of December 31, 2023 and 2022 there were 4,271,711 and 813,905 shares of Class A Common Stock issued or outstanding, excluding 1,251,156 and 1,627,158 shares of Class A Common Stock subject to possible redemption, respectively.

Class B Common Stock — The Company is authorized to issue 10,000,000 shares of Class B Common Stock with a par value of $0.0001 per share. As of December 31, 2023 and, 2022 there were 1 and 3,457,807 shares of Class B Common Stock issued and outstanding, respectively, so that the Founder Shares represent, on an as-converted basis, 20% of the Company’s issued and outstanding shares after the IPO.

The Company’s Initial Stockholders have agreed not to transfer, assign, or sell any of their Founder Shares until the earlier to occur of: (i) six months after the date of the consummation of the initial Business Combination and (ii) subsequent to the initial Business Combination (a) if the closing price of the Company’s shares of Class A Common Stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations, and the like) for any 20 trading days within any 30-trading day period after the initial Business Combination or (b) the date on which the Company consummates a liquidation, merger, stock exchange, or other similar transaction that results in all of the public stockholders having the right to exchange their shares of Class A Common Stock for cash, securities, or other property (except as described herein). Any permitted transferees would be subject to the same restrictions and other agreements of the Company’s Initial Stockholders with respect to any Founder Shares.

Common stockholders of record are entitled to one vote for each share held on all matters to be voted on by stockholders. Holders of the Class A Common Stock and holders of the Class B Common Stock will vote together as a single class on all matters submitted to a vote of the Company’s stockholders, except as required by law. The shares of Class B Common Stock will automatically convert into shares of Class A Common Stock at the time of the initial Business Combination on a one-for-one basis (subject to adjustment for stock splits, stock dividends, reorganizations, recapitalizations, and the like), and subject to further adjustment as provided herein. In the case that additional shares of Class A Common Stock, or equity-linked securities, are issued or deemed issued in excess of the amounts offered in the IPO and related to the closing of the initial Business Combination, the ratio at which shares of Class B Common Stock shall convert into shares of Class A Common Stock will be adjusted (unless the holders of a majority of the outstanding shares of Class B Common Stock agree to waive such adjustment with respect to any such issuance or deemed issuance) so that the number of shares of Class A Common Stock issuable upon conversion of all shares of Class B Common Stock will equal, in the aggregate, on an as-converted basis, 20% of the sum of the total number of all shares of Common Stock outstanding upon completion of the IPO (excluding shares included in the Private Placement Units or the shares of Class A Common Stock issuable to the Representative) plus all shares of Class A Common Stock and equity-linked securities issued or deemed issued in connection with the initial Business Combination.

Rights

Each holder of a Right will receive one-eighth (1/8) of one Class A Common Stock upon consummation of the initial Business Combination. In the event the Company will not be the surviving entity upon completion of the initial Business Combination, each holder of a Right will be required to affirmatively convert its Rights in order to receive the 1/8 share of Class A Common Stock underlying each Right (without paying any additional consideration). If the Company is unable to complete an initial Business Combination within the required time period and the Company redeems the Public Shares of Class A Common Stock for the funds held in the Trust Account, holders of Rights will not receive any such funds in exchange for their Rights and the Rights will expire worthless. Every eight (8) Rights that a holder holds will entitle the holder to receive one share at the closing of the initial Business Combination. The Company will not issue fractional shares of Class A Common Stock upon exchange of the Rights. If, upon conversion of the Rights, a holder would be entitled to receive a fractional interest in a share, fractional shares will be rounded up to the nearest whole share.

If the Company is unable to complete an initial Business Combination within the required time period and it liquidates the funds held in the Trust Account, holders of Rights will not receive any such funds with respect to any of their Rights, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with respect to such Rights, and all Rights will expire worthless.

Note 8 – Income Tax

The Company’s net deferred tax assets are as follows:

	December 31, 2023			December 31, 2022
Deferred tax asset
Organizational costs/Start-up costs		748,482			334,531
Total deferred tax asset		748,482			334,531
Deferred tax liability
Unrealized gain/loss		—			(18,790	)
Valuation allowance		(748,482	)		(334,531	)
Deferred tax asset (liability), net of allowance	$	—		$	(18,790	)

F-20

The income tax provision consists of the following:

	December 31, 2023			December 31, 2022
Federal
Current	$	177,066		$	138,094
Deferred		(322,849	)		(86,506	)
State
Current		38,315			28,540
Deferred		(109,934	)		(30,765	)
Change in valuation allowance		413,993			136,060
Income tax provision	$	196,591		$	185,423

The Company’s federal and state net operating loss carryforwards as of December 31, 2023 and 2022 amounted to $0 and $0, respectively, and will be carried forward indefinitely and are available to offset future taxable income in the respective tax jurisdictions.

In assessing the realization of the deferred tax assets, Management considers whether it is more likely than not that some portion of all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences representing net future deductible amounts become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. After consideration of all of the information available, Management believes that significant uncertainty exists with respect to future realization of the deferred tax assets and has therefore established a full valuation allowance. For the year ended December 31, 2023, the change in the valuation allowance was $413,993. For the year ended December 31, 2022, the change in the valuation allowance was $136,060.

Reconciliation of the federal income tax rate to the Company’s effective tax rate at December 31, 2022 and 2021 is as follows:

	December 31, 2023			December 31, 2022
Statutory federal income tax rate		21.00	%		21.00	%
State taxes, net of federal tax benefit		4.34	%		4.30	%
Prior year true-up		0.25	%		(5.23	)%
Change in valuation allowance		(48.74	)%		55.41	%
Income tax provision		(23.15	)%		75.48	%

The Company’s effective tax rates for the periods presented differ from the expected (statutory) rates due to the recording of full valuation allowances on deferred tax assets.

The Company files income tax returns in the U.S. federal jurisdiction and Florida and is subject to examination by the various taxing authorities, since inception.

Note 9 — Subsequent Events

The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the financial statements were issued. Based upon this review, the Company did not identify any subsequent events, other than that identified below, that would have required adjustment or disclosure in the financial statements.

Extension of the Combination Period

On January 17, 2024, the Company held a special meeting of stockholders (the “2024 Special Meeting”). At the 2024 Special Meeting, the Company’s stockholders approved an amendment (the “2024 Extension Amendment”) to the Amended and Restated Charter to extend the date by which the Company must consummate its initial Business Combination from January 22, 2024 to July 22, 2024, or such earlier date as determined by the Company’s Board (the “2024 Extension”).

F-21

In connection with the 2024 Special Meeting, Public Stockholders holding 202,360 Public Shares exercised their right to redeem such shares for a pro rata portion of the funds in the Trust Account. As a result, $2,374,149 (approximately $11.73 per share) will be removed from the Trust Account to pay such holders.

Following the approval and implementation of the Extension Amendment, on January 22, 2024, the Company issued a promissory note (the “2024 Extension Note”) in the aggregate principal amount of up to $360,000 the Sponsor, pursuant to which the Sponsor agreed to loan to the Company up to $360,000 to deposit into the Company’s Trust Account for each Public Share that was not redeemed in connection with the 2024 Extension Amendment. The 2024 Extension Note bears no interest and is repayable in full upon the earlier of (a) the date of the consummation of the Company’s initial Business Combination, or (b) the date of the liquidation of the Company.

On January 22, 2024, the Company deposited $60,000 into the Trust Account, and the Company will continue to deposit $60,000 into the Trust Account for each additional calendar month (promptly following the 22nd of each calendar month), or portion thereof, that is needed by the Company to complete an initial Business Combination until July 22, 2024, and such amount will be distributed either to: (i) all of the holders of Public Shares upon the Company’s liquidation or (ii) holders of Public Shares who elect to have their shares redeemed in connection with the consummation of the initial Business Combination. As of March 21, 2024, $180,000 of the principal on the 2024 Extension Note has been deposited into the Trust Account.

On January 22, 2024, the Company issued the 2024 Working Capital Note in the principal amount of up to $1,000,000 to the Sponsor. The 2024 Working Capital Note was issued in connection with up to $1,000,000 of advances the Sponsor has made or may make in the future to the Company for working capital expenses. The loan is non-interest bearing and payable upon the earlier of (i) the date of the consummation of the Company’s initial Business Combination or (ii) the date of the liquidation of the Company. As of March 5, 2024, a total of $525,000 had been drawn down on the 2024 Working Capital Note.

Nasdaq Compliance—Minimum Public Holders Requirement and Annual Meeting Requirement

On August 31, 2023, the Company received a deficiency letter from the Staff of Nasdaq notifying us that the Company is no longer meet the Minimum Public Holders Requirement. The notification received has no immediate effect on our Nasdaq listing. On October 16, 2023, we submitted to Nasdaq a plan to regain compliance with the Minimum Public Holders Requirement. On October 25, 2023, in response to such compliance plan, the Staff granted us an extension of time to regain compliance with the Minimum Public Holders Requirement. Pursuant to the extension, on or before February 27, 2024, the Company must have filed with Nasdaq documentation that demonstrated that our Common Stock has a minimum of 300 public holders.

On January 23, 2024, the Company received a deficiency notice from the Staff of Nasdaq notifying the Company that it is not in compliance with the requirement pursuant to Nasdaq Listing Rule 5620(a) that companies listed on Nasdaq hold an annual meeting of shareholders within twelve months of their fiscal year end (the “Annual Meeting Requirement”) because it did not hold an annual meeting of stockholders within twelve months of our fiscal year ended December 31, 2022. The notification received had no immediate effect on our Nasdaq listing. In accordance with Nasdaq rules, the Company had 45 calendar days, or until March 8, 2024, to submit a plan to regain compliance with the Annual Meeting Requirement.

On February 27, 2024, the Company was not able to demonstrate compliance with the Minimum Public Holders Requirement, and as such, on March 1, 2024, we received a notice (the “Delisting Notice”) from the Staff of Nasdaq informing us that our securities may be subject to suspension and delisting pending the outcome of a hearing before the Panel. Because the Staff of Nasdaq issued the Delisting Notice to us on March 1, 2024, the Company chose to forego submitting a plan of compliance to Nasdaq related to the Annual Meeting Requirement. Because we were unable to demonstrate compliance with the Minimum Public Holders Requirement and did not submit to Nasdaq a plan of compliance related to the Annual Meeting Requirement, our securities may be subject to suspension and delisting pending the outcome of a hearing before the Panel, which we requested on March 8, 2024. 

Indemnification Agreement with Kustom Entertainment and Digital Ally

On February 1, 2024, we entered in an indemnification agreement with Kustom Entertainment and the Kustom Entertainment Stockholder, pursuant to which, Kustom Entertainment and Kustom Entertainment Stockholder agreed to indemnify us and our officers and directors for liabilities incurred in connection with Kustom Entertainment Stockholder disclosure incorporated by reference into the Kustom Entertainment Registration Statement.

F-22

EXHIBIT INDEX

Exhibit No.	Description
1.1	Underwriting Agreement, dated July 19, 2021, by and between the Company and the representative. (4)
2.1	Agreement and Plan of Merger, dated June 1, 2023, by and among the Company, Merger Sub, our Sponsor in the capacity as the Purchase Representative, Kustom Entertainment, and Digital Ally. (8)
3.1	Amended and Restated Certificate of Incorporation. (4)
3.2	Amendment to Amended and Restated Certificate of Incorporation. (7)
3.3	Second Amendment to Amended and Restated Certificate of Incorporation (9)
3.4	Third Amendment to Amended and Restated Certificate of Incorporation (12)
3.5	Bylaws. (1)
4.1	Rights Agreement, dated July 19, 2021, by and between the Company and Continental, as rights agent. (4)
4.2	Specimen Unit Certificate. (3)
4.3	Specimen Class A Common Stock Certificate. (2)
4.4	Specimen Rights Certificate. (3)
4.5	Description of Registered Securities. (5)
10.1	Promissory Note, dated March 4, 2021, issued to our Sponsor. (1)
10.2	Securities Subscription Agreement, dated March 4, 2021, between the Company and our Sponsor. (1)
10.3	Letter Agreement, dated July 19, 2021, by and among the Company, our officers and directors, and our Sponsor. (4)
10.4	Investment Management Trust Agreement, dated July 19, 2021, by and between the Company and Continental, as trustee. (4)
10.5	Form of Indemnity Agreement. (2)
10.6	Registration Rights Agreement, dated July 19, 2021, by and among the Company and certain security holders. (4)
10.7	Maxim Unit Purchase Agreement, dated July 19, 2021, by and between the Company and the Representative. (4)
10.8	Sponsor Unit Purchase Agreement, dated July 19, 2021, by and between the Company and our Sponsor. (4)
10.9	Administrative Support Agreement, dated July 19, 2021, by and between the Company and Yntegra Capital Management, LLC. (4)
10.10	Promissory Note, dated July 18, 2022, issued to our Sponsor. (6)
10.11	Promissory Note, dated October 19, 2022, issued to our Sponsor. (7)
10.12	Lock-up Agreement, by and among the Company, our Sponsor in the capacity as the Purchaser Representative and Digital Ally. (8)
10.13	Sponsor Forfeiture Letter, by and among the Company, our Sponsor in the capacity as the Purchaser Representative and Stanton E. Ross. (8)
10.14	Extension Promissory Note, dated July 24, 2023, issued to our Sponsor. (10)
10.15	Working Capital Promissory Note, dated July 24, 2023, issued to our Sponsor. (10)
10.16	Amendment No. 1 to Lock-Up Agreement, by and among the Company, our Sponsor in the capacity as the Purchaser Representative and Digital Ally. (11)
10.17	Extension Promissory Note, dated January 22, 2024, issued to our Sponsor. (12)
10.18	Working Capital Promissory Note, dated January 22, 2024, issued to our Sponsor. (12)
10.19	Indemnification Agreement, dated February 1, 2024, between the Company, Kustom Entertainment and Digital Ally (13)
14	Form of Code of Ethics. (2)
19*	Insider Trading Policy.
21*	List of Subsidiaries.
31.1	Certification of the Principal Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
31.2	Certification of the Principal Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
32.1	Certification of the Principal Executive Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**
32.2	Certification of the Principal Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**
97	Policy Related to Recovery of Erroneously Awarded Compensation, adopted November 30, 2023.*
99.1	Amended and Restated Audit Committee Charter.*
99.2	Amended and Restated Compensation Committee Charter.*
101.INS	Inline XBRL Instance Document.*
101.SCH	Inline XBRL Taxonomy Extension Schema Document.*
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document.*
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document.*
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document.*
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document.*
104	Cover Page Interactive Data File (Embedded as Inline XBRL document and contained in Exhibit 101).*

* Filed herewith.

** Furnished herewith.

(1) Incorporated by reference to the Company’s Registration Statement on Form S-1 (File No. 333-255111), filed with the SEC on April 7, 2021.

50

(2) Incorporated by reference to the Company’s Registration Statement on Form S-1/A (File No. 333-255111), filed with the SEC on June 7, 2021.

(3) Incorporated by reference to the Company’s Registration Statement on Form S-1/A (File No. 333-255111), filed with the SEC on July 12, 2021.

(4) Incorporated by reference to the Company’s Current Report on Form 8-K, filed with the SEC on July 23, 2021.

(5) Incorporated by reference to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021, filed with the SEC on April 15, 2022.

(6) Incorporated by reference to the Company’s Current Report on Form 8-K, filed with the SEC on July 19, 2022.

(7) Incorporated by reference to the Company’s Current Report on Form 8-K, filed with the SEC on October 24, 2022.

(8) Incorporated by reference to the Company’s Current Report on Form 8-K, filed with the SEC on June 6, 2023.

(9) Incorporated by reference to the Company’s Current Report on Form 8-K, filed with the SEC on July 21, 2023.

(10)   Incorporated by reference to the Company’s Current Report on Form 8-K, filed with the SEC on July 28, 2023.

(11) Incorporated by reference to the Company’s Current Report on Form 8-K, filed with the SEC on December 15, 2023.

(12) Incorporated by reference to the Company’s Current Report on Form 8-K, filed with the SEC on January 22, 2024.

(13) Incorporated by reference to the Company’s Current Report on Form 8-K, filed with the SEC on February 7, 2024.

51

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

March 21, 2024	Clover Leaf Capital Corp.
	By:	/s/ Felipe MacLean
	Name:	Felipe MacLean
	Title:	Chief Executive Officer (Principal Executive Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

Name	Position	Date
/s/ Felipe MacLean	Chief Executive Officer	March 21, 2024
Felipe MacLean	(Principal Executive Officer)
/s/ Luis A. Guerra	Chief Financial Officer	March 21, 2024
Luis A. Guerra	(Principal Financial and Accounting Officer)
/s/ Per Bjorkman	Director	March 21, 2024
Per Bjorkman
/s/ Marcos Angelini	Director	March 21, 2024
Marcos Angelini
/s/ Luis Derechin	Director	March 21, 2024
Luis Derechin

52

EX-19

Exhibit 19

Insider Trading Compliance Manual

Clover Leaf Capital Corp.

Adopted July 19, 2021

In order to take an active role in the prevention of insider trading violations by its officers, directors, employees, consultants, advisors and other related individuals, the Board of Directors (the “Board”) of Clover Leaf Capital Corp., a Delaware corporation (the “Company”) has adopted the policies and procedures described in this Insider Trading Compliance Manual.

I. Adoption of Insider Trading Policy.

Effective as of the date first written above, the Board has adopted the Insider Trading Policy attached hereto as Exhibit A (as the same may be amended from time to time by the Board, the “Policy”), which prohibits trading based on material, nonpublic information regarding the Company or any company whose securities are listed for trading or quotation in the United States (“Material Non-Public Information”). This Policy covers all officers and directors of the Company and its subsidiaries, all other employees of the Company and its subsidiaries, and consultants or contractors to the Company or its subsidiaries who have or may have access to Material Non-Public Information and members of the immediate family or household of any such person. This Policy (and/or a summary thereof) is to be delivered to all new employees, consultants and related individuals who are within the categories of covered persons upon the commencement of their relationships with the Company.

II. Designation of Certain Persons.

A. Section 16 Individuals. All directors and executive officers of the Company are subject to the reporting and liability provisions of Section 16 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and the rules and regulations promulgated thereunder (“Section 16 Individuals”). Attached hereto as Exhibit B is a separate memorandum which discusses the relevant terms of Section 16. Impacted individuals should read these provisions closely as Section 16 obligations are personal in nature (i.e., they are not Company obligations).

B. Other Persons Subject to Policy. In addition, certain employees, consultants and advisors of the Company as described in Section I above have, or are likely to have, from time to time access to Material Non-Public Information and together with the Section 16 Individuals, are subject to the Policy, including the pre-clearance requirement described in Section IV. A. below.

III. Appointment of Compliance Officer.

By the adoption of this Policy, the Board has appointed an Insider Trading Compliance Officer (the “Compliance Officer”). The identity of the current Compliance Officer is the Company’s Chief Financial Officer.

1

IV. Duties of the Compliance Officer.

The Compliance Officer has been designated by the Board to handle any and all matters relating to the Company’s Insider Trading Compliance Program. Certain of those duties may be delegated to outside counsel with special expertise in securities issues and relevant law. The duties of the Compliance Officer shall include the following:

A. Pre-clearing all transactions involving the Company’s securities by the Section 16 Individuals and those individuals having regular access to Material Non-Public Information (defined for these purposes to include employees of the Company and its subsidiaries, and consultants or contractors to the Company or its subsidiaries who have or may have access to Material Non-Public Information and members of the immediate family or household of any such person) in order to determine compliance with the Policy, insider trading laws, Section 16 of the Exchange Act and Rule 144 promulgated under the Securities Act of 1933, as amended (“Rule 144”). Attached hereto as Exhibit C is a Pre-Clearance Checklist to assist the Compliance Officer’s performance of this duty.

B. Assisting in the preparation and filing of Section 16 reports (Forms 3, 4 and 5) for all Section 16 Individuals, bearing in mind, however, that the preparation of such reports is undertaken by the Company as a courtesy only and that the Section 16 Individuals alone (and not the Company, its employees or advisors) shall be solely responsible for the content of such reports and for any violations of Section 16 under the Exchange Act and related rules and regulations.

C. Serving as the designated recipient at the Company of copies of reports filed with the Securities and Exchange Commission (“SEC”) by Section 16 Individuals under Section 16 of the Exchange Act.

D. Performing periodic reviews of available materials, which may include Forms 3, 4 and 5, Form 144, officer and director questionnaires, and reports received from the Company’s stock administrator and transfer agent, to determine trading activity by officers, directors and others who have, or may have, access to Material Non-Public Information.

E. Circulating the Policy (and/or a summary thereof) to all covered employees, including Section 16 Individuals, on an annual basis, and providing the Policy and other appropriate materials to new officers, directors and others who have, or may have, access to Material Non-Public Information.

F. Assisting the Board in the implementation of the Policy and all related Company policies.

G. Coordinating with the Company’s internal or external legal counsel regarding all securities compliance matters.

H. Retaining copies of all appropriate securities reports, and maintaining records of his or her activities as Compliance Officer.

[Acknowledgement Appears on the Next Page]

2

ACKNOWLEDGMENT

I hereby acknowledge that I have received a copy of Clover Leaf Capital Corp.’s Insider Trading Compliance Manual (the “Insider Trading Manual”). Further, I certify that I have reviewed the Insider Trading Manual, understand the policies and procedures contained therein and agree to be bound by and adhere to these policies and procedures.

Dated:
	Name:

3

Exhibit A

CLOVER LEAF CAPITAL CORP.

Insider Trading Policy

and Guidelines with Respect to Certain Transactions in Company Securities

APPLICABILITY OF POLICY

This Policy applies to all transactions in the Company’s securities, including shares of common stock, options and warrants to purchase common stock and any other securities the Company may issue from time to time, such as preferred stock and convertible notes, as well as to derivative securities relating to the Company’s stock, whether or not issued by the Company, such as exchange-traded options. It applies to all officers and directors of the Company, all other employees of the Company and its subsidiaries, and consultants or contractors to the Company or its subsidiaries who have or may have access to Material Nonpublic Information (as defined below) regarding the Company and members of the immediate family or household of any such person. This group of people is sometimes referred to in this Policy as “Insiders.” This Policy also applies to any person who receives Material Nonpublic Information from any Insider.

Any person who possesses Material Nonpublic Information regarding the Company is an Insider for so long as such information is not publicly known.

DEFINITION OF MATERIAL NONPUBLIC INFORMATION

It is not possible to define all categories of material information. However, information should be regarded as material if there is a reasonable likelihood that it would be considered important to an investor in making an investment decision regarding the purchase or sale of the Company’s securities. Material Nonpublic Information is information that has not been previously disclosed to the general public and is otherwise not available to the general public.

While it may be difficult to determine whether particular information is material, there are various categories of information that are particularly sensitive and, as a general rule, should always be considered material. In addition, material information may be positive or negative. Examples of such information may include:

· Financial results;

· Entry into a material agreement or discussions regarding entry into a material agreement;

· Projections of future earnings or losses;

· News of a pending or proposed merger or acquisition;

· Joint ventures/commercial partnerships with third parties;

· News of the disposition of material assets;

· New product or project announcements of a significant nature;

· Information regarding regulatory review of Company products;

· Intellectual property and other proprietary information;

· Major contract awards, cancellations or write-offs;

A-1

· Research milestones and related payments or royalties;

· Impending bankruptcy or financial liquidity problems;

· Gain or loss of a substantial customer or supplier or manufacturer;

· Significant pricing changes;

· Stock splits;

· New equity or debt offerings;

· Significant litigation exposure due to actual or threatened litigation;

· Changes in senior management or the Board of Directors of the Company;

· Capital investment plans; and

· Changes in dividend policy.

CERTAIN EXCEPTIONS

For purposes of this Policy, the Company considers that the exercise of stock options for cash under the Company’s equity incentive or similar plan (but not the sale of any such shares) to be exempt from this Policy, since the other party to the transaction is the Company itself and the price does not vary with the market but is fixed by the terms of the option agreement or the plan.

STATEMENT OF POLICY

General Policy

It is the policy of the Company to prohibit the unauthorized disclosure of any nonpublic information acquired in the workplace and the misuse of Material Nonpublic Information in securities trading related to the Company or any other company.

Specific Policies

1. Trading on Material Nonpublic Information. With certain exceptions, no Insider shall engage in any transaction involving a purchase or sale of the Company’s or any other company’s securities, including any offer to purchase or offer to sell, during any period commencing with the date that he or she possesses Material Nonpublic Information concerning the Company, and ending at the close of business on the second Trading Day following the date of public disclosure of that information, or at such time as such nonpublic information is no longer material. However, see Section 2 under “Permitted Trading Period” below for a full discussion of trading pursuant to a pre-established plan or by delegation.

As used herein, the term “Trading Day” shall mean a day on which national stock exchanges are open for trading.

2. Tipping. No Insider shall disclose (“tip”) Material Nonpublic Information to any other person (including family members) where such information may be used by such person to his or her profit by trading in the securities of companies to which such information relates, nor shall such Insider or related person make recommendations or express opinions on the basis of Material Nonpublic Information as to trading in the Company’s securities.

A-2

Regulation FD (Fair Disclosure) is an issuer disclosure rule implemented by the SEC that addresses selective disclosure of Material Nonpublic Information. The regulation provides that when the Company, or person acting on its behalf, discloses material nonpublic information to certain enumerated persons (in general, securities market professionals and holders of the Company’s securities who may well trade on the basis of the information), it must make public disclosure of that information. The timing of the required public disclosure depends on whether the selective disclosure was intentional or unintentional; for an intentional selective disclosure, the Company must make public disclosures simultaneously; for a non-intentional disclosure the Company must make public disclosure promptly. Under the regulation, the required public disclosure may be made by filing or furnishing a Form 8-K, or by another method or combination of methods that is reasonably designed to effect broad, non-exclusionary distribution of the information to the public.

It is the policy of the Company that all public communications of the Company (including, without limitation, communications with the press, other public statements, statements made via the Internet or social media outlets, or communications with any regulatory authority) be handled only through the Company’s Chief Executive Officer (the “CEO”), an authorized designee of the CEO or the Company’s public or investor relations firm. Please refer all press, analyst or similar requests for information to the CEO and do not respond to any inquiries without prior authorization from the CEO. If the CEO is unavailable, the Company’s Chief Financial Officer (or the authorized designee of such officer) will fill this role.

3. Confidentiality of Nonpublic Information. Nonpublic information relating to the Company is the property of the Company and the unauthorized disclosure of such information (including, without limitation, via email or by posting on Internet message boards, blogs, or social media) is strictly forbidden.

4. Duty to Report Inappropriate and Irregular Conduct. All employees, and particularly managers and/or supervisors, have a responsibility for maintaining financial integrity within the Company, consistent with generally accepted accounting principles and both federal and state securities laws. Any employee who becomes aware of any incidents involving financial or accounting manipulation or irregularities, whether by witnessing the incident or being told of it, must report it to their immediate supervisor and to any member of the Company’s Audit Committee. In certain instances, employees are allowed to participate in federal or state proceedings. For a more complete understanding of this issue, employees should consult their employee manual and or seek the advice of counsel. Our general corporate and securities counsel is Ellenoff Grossman & Schole LLP, attention: Barry Grossman, at (212) 370-1300, email: bigrossman@egsllp.com.

A-3

POTENTIAL CRIMINAL AND CIVIL LIABILITY

AND/OR DISCIPLINARY ACTION

1. Liability for Insider Trading. Insiders may be subject to penalties of up to $5,000,000 and up to ten (10) years in jail for engaging in transactions in the Company’s securities at a time when they possess Material Nonpublic Information regarding the Company. In addition, the SEC has the authority to seek a civil monetary penalty of up to three times the amount of profit gained or loss avoided by illegal insider trading. “Profit gained” or “loss avoided” generally means the difference between the purchase or sale price of the Company’s stock and its value as measured by the trading price of the stock a reasonable period after public dissemination of the nonpublic information.

2. Liability for Tipping. Insiders may also be liable for improper transactions by any person (commonly referred to as a “tippee”) to whom they have disclosed Material Nonpublic Information regarding the Company or to whom they have made recommendations or expressed opinions on the basis of such information as to trading in the Company’s securities. The SEC has imposed large penalties even when the disclosing person did not profit from the trading. The SEC, the stock exchanges and the Financial Industry Regulatory Authority, Inc. use sophisticated electronic surveillance techniques to monitor trading and uncover insider trading.

3. Possible Disciplinary Actions. Individuals subject to the Policy who violate this Policy shall also be subject to disciplinary action by the Company, which may include suspension, forfeiture of perquisites, ineligibility for future participation in the Company’s equity incentive plans and/or termination of employment.

PERMITTED TRADING PERIOD

1. Black-Out Period and Trading Window.

To ensure compliance with this Policy and applicable federal and state securities laws, the Company requires that all officers, directors, employees, members of the immediate family or household of any such person and others who are subject to this Policy refrain from conducting any transactions involving the purchase or sale of the Company’s securities, other than during the period in any fiscal quarter commencing at the close of business on the second Trading Day following the date of public disclosure of the financial results for the prior fiscal quarter or year and ending on the twenty-fifth day of the third month of the fiscal quarter (the “Trading Window”). If such public disclosure occurs on a Trading Day before the markets close, then such date of disclosure shall be considered the first Trading Day following such public disclosure.

Notwithstanding the foregoing, persons subject to this Policy may submit a request to the Company to purchase or sell the Company’s securities outside the Trading Window on the basis that they do not possess any Material Nonpublic Information. The Compliance Officer shall review all such requests and may grant such requests on a case-by-case basis if he or she determines that the person making such request does not possess any Material Nonpublic Information at that time.

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It is the Company’s policy that the period when the Trading Window is “closed” is a particularly sensitive period of time for transactions in the Company’s securities from the perspective of compliance with applicable securities laws. This is because Insiders, as any quarter progresses, are increasingly likely to possess Material Nonpublic Information about the expected financial results for the quarter. The purpose of the Trading Window is to avoid any unlawful or improper transactions or the appearance of any such transactions.

It should be noted that even during the Trading Window any person possessing Material Nonpublic Information concerning the Company shall not engage in any transactions in the Company’s (or any other company’s, as applicable) securities until such information has been known publicly for at least two Trading Days. The Company has adopted the policy of delaying trading for “at least two Trading Days” because the securities laws require that the public be informed effectively of previously undisclosed material information before Insiders trade in the Company’s stock. Public disclosure may occur through a widely disseminated press release or through filings, such as Forms 10-Q and/or 8-K, with the SEC. Furthermore, in order for the public to be effectively informed, the public must be given time to evaluate the information disclosed by the Company. Although the amount of time necessary for the public to evaluate the information may vary depending on the complexity of the information, generally two Trading Days is a sufficient period of time.

From time to time, the Company may also require that Insiders suspend trading because of developments known to the Company and not yet disclosed to the public. In such event, such persons may not engage in any transaction involving the purchase or sale of the Company’s securities during such period and may not disclose to others the fact of such suspension of trading.

Although the Company may from time to time require during a Trading Window that Insiders and others suspend trading because of developments known to the Company and not yet disclosed to the public, each person is individually responsible at all times for compliance with the prohibitions against insider trading. Trading in the Company’s securities during the Trading Window should not be considered a “safe harbor,” and all directors, officers and other persons should use good judgment at all times.

Notwithstanding these general rules, Insiders may trade outside of the Trading Window provided that such trades are made pursuant to a pre-established plan or by delegation; these alternatives are discussed in the next section.

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2. Trading According to a Pre-established Plan or by Delegation.

Trading which is not “on the basis of” material non-public information may not give rise to insider trading liability. The SEC has adopted Rule 10b5-1 under which insider trading liability can be avoided if Insiders follow very specific procedures. In general, such procedures involve trading according to pre-established instructions, plans or programs (a “10b5-1 Plan”).

10b5-1 Plans must:

(a) Be documented by a contract, written plan, or formal instruction which provides that the trade take place in the future. For example, an Insider can contract to sell his or her shares on a specific date, or simply delegate such decisions to an investment manager, 401(k) plan administrator or similar third party. This documentation must be provided to the Company’s Insider Trading Compliance Officer;

(b) Include in its documentation the specific amount, price and timing of the trade, or the formula for determining the amount, price and timing. For example, the Insider can buy or sell shares in a specific amount and on a specific date each month, or according to a pre-established percentage (of the Insider’s salary, for example) each time that the share price falls or rises to pre-established levels. In the case where trading decisions have been delegated, the specific amount, price and timing need not be provided;

(c) Be implemented at a time when the Insider does not possess material non-public information. As a practical matter, this means that the Insider may set up a 10b5-1 Plan, or delegate trading discretion, only during a “Trading Window” (discussed in Section 1, above); and,

(d) Remain beyond the scope of the Insider’s influence after implementation. In general, the Insider must allow the 10b5-1 Plan to be executed without changes to the accompanying instructions, and the Insider cannot later execute a hedge transaction that modifies the effect of the 10b5-1 Plan. An Insider wishing to change the amount, price or timing of a 10b5-1 Plan can do so only during a “Trading Window” (discussed in Section 1, above). Termination of a 10b5-1 Plan may be undertaken at any time, provided that the termination must be approved in advance by the Company’s Insider Trading Compliance Officer in order to ensure that the Insider is not in possession of Material Nonpublic Information.¹ If the Insider has delegated decision-making authority to a third party, the Insider cannot subsequently influence the third party in any way and such third party must not possess material non-public information at the time of any of the trades.

¹ Insiders should be aware that termination of a 10b5-1 Plan after trades have been undertaken under such plan could negate the 10b5-1 affirmative defense afforded by such program for all such prior trades. As such, termination of a 10b5-1 Plan should only be undertaken in consultation with the Insider Trading Compliance Officer and, if necessary, the Company’s legal counsel.

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Prior to implementing a pre-established plan for trading, all officers and directors must receive the approval for such plan from the Company’s Insider Trading Compliance Officer.

3. Pre-Clearance of Trades.

Even during a Trading Window, all Insiders must comply with the Company’s “pre-clearance” process prior to trading in the Company’s securities, implementing a pre-established plan for trading, or delegating decision-making authority over the Insider’s trades. To do so, each Insider must contact the Company’s Insider Trading Compliance Officer prior to initiating any of these actions. The Company may also find it necessary, from time to time, to require compliance with the pre-clearance process from others who may be in possession of Material Nonpublic Information.

4. Individual Responsibility.

Every person subject to this Policy has the individual responsibility to comply with this Policy against insider trading, regardless of whether the Company has established a Trading Window applicable to that Insider or any other Insiders of the Company. Each individual, and not necessarily the Company, is responsible for his or her own actions and will be individually responsible for the consequences of their actions. Therefore, appropriate judgment, diligence and caution should be exercised in connection with any trade in the Company’s securities. An Insider may, from time to time, have to forego a proposed transaction in the Company’s securities even if he or she planned to make the transaction before learning of the Material Nonpublic Information and even though the Insider believes he or she may suffer an economic loss or forego anticipated profit by waiting.

5. Exceptions to the Policy.

Any exceptions to this Policy may only be made by advance written approval of each of: (i) the Company’s Chief Executive Officer, (ii) the Insider Trading Compliance Officer and (iii) the Chairman of the Audit Committee of the Board. Any such exceptions shall be immediately reported to the remaining members of the Board.

APPLICABILITY OF POLICY TO MATERIAL NON-PUBLIC INFORMATION

REGARDING OTHER COMPANIES

This Policy and the guidelines described herein also apply to Material Nonpublic Information relating to other companies, including the Company’s customers, vendors or suppliers (“business partners”), when that information is obtained in the course of employment with, or other services performed on behalf of the Company. Civil and criminal penalties, as well as termination of employment, may result from trading on Material Nonpublic Information regarding the Company’s business partners. All Insiders should treat Material Nonpublic Information about the Company’s business partners with the same care as is required with respect to information relating directly to the Company.

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PROHIBITION AGAINST BUYING AND SELLING

COMPANY COMMON STOCK WITHIN A SIX-MONTH PERIOD

Directors, Officers and 10% Stockholders

Purchases and sales (or sales and purchases) of Company common stock occurring within any six-month period in which a mathematical profit is realized result in illegal “short-swing profits.” The prohibition against short-swing profits is found in Section 16 of the Exchange Act. Section 16 was drafted as a rather arbitrary prohibition against profitable “insider trading” in a company’s securities within any six-month period regardless of the presence or absence of material nonpublic information that may affect the market price of those securities. Each executive officer, director and 10% stockholder of the Company is subject to the prohibition against short-swing profits under Section 16. Such persons are required to file Forms 3, 4 and 5 reports reporting his or her initial ownership of the Company’s common stock and any subsequent changes in such ownership. The Sarbanes-Oxley Act of 2002 requires executive officers and directors who must report transactions on Form 4 to do so by the end of the second business day following the transaction date. Profit realized, for the purposes of Section 16, is calculated generally to provide maximum recovery by the Company. The measure of damages is the profit computed from any purchase and sale or any sale and purchase within the short-swing (i.e., six-month) period, without regard to any setoffs for losses, any first-in or first-out rules, or the identity of the shares of common stock. This approach sometimes has been called the “lowest price in, highest price out” rule.

In order to avoid trading activity that could inadvertently² trigger a short-swing profit, it is the Company’s policy that no executive officer, director and 10% shareholder of the Company who has a 10b5-1 Plan in place may engage in voluntary purchases or sales of Company securities outside of and while such 10b5-1 Plan remains in place.

INQUIRIES

Please direct your questions as to any of the matters discussed in this Policy to the Company’s Insider Trading Compliance Officer.

² Note that Section 16 violations do not require intent, so even an inadvertent violation of Section 16 is still a violation.

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Exhibit B

Section 16 Memorandum

To: All Officers, Directors and 10% Stockholders (“Section 16 Individuals”)

Re: Overview of Section 16 under the Securities Exchange Act of 1934, as Amended

A. Introduction.

This Memorandum provides an overview of Section 16 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the related rules promulgated by the SEC.

Each executive officer, director and 10% stockholder (commonly called an “Insider”) of Clover Leaf Capital Corp. (the “Company”) is personally responsible for complying with the provisions of Section 16, and failure by an Insider to comply strictly with his or her reporting requirements will result in obligations on the part of the Company to publicly disclose such failure. Moreover, Congress has granted to the SEC authority to seek monetary court-imposed fines on Insiders who fail to timely comply with their reporting obligations.

Section 16(a) of the Exchange Act provides that insiders of a corporation with a class of securities registered under Section 12 of the Exchange Act: (i) must file an initial report of their beneficial ownership of equity securities of the corporation (including derivative securities such as options, warrants and stock appreciation rights) as of the later of the date on which the corporation becomes subject to Section 12 of the Exchange Act or ten days after the date they attain insider status, and (ii) must report subsequent changes in their beneficial ownership of equity and derivative securities of the corporation. Section 16(b) provides that insiders are liable to the corporation for any profits made on six-month short-swing transactions in the corporation’s securities. Section 16(c) prohibits insiders from engaging in both traditional short sales of the corporation’s securities and certain other transactions that are economically or functionally equivalent to a short sale.

B. Reporting Requirements under Section 16(a).

1. General. An Insider must disclose his or her holdings at the time he or she attains insider status and must disclose all subsequent changes in such holdings during the time the individual is an Insider (and, in certain circumstances, for up to six months after the individual ceases to be an Insider). Disclosure is made on one of three forms: the Initial Statement of Beneficial Ownership of Securities on Form 3; the Statement of Changes in Beneficial Ownership of Securities on Form 4; and the Annual Statement of Changes in Beneficial Ownership of Securities on Form 5.

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2. Method of Filing.

(a) SEC. The Sarbanes-Oxley Act mandates that all Forms 3, 4 and 5 must be filed electronically.

(b) Company. The rules under Section 16 require that a copy of the applicable Form be sent to the person at the Company designated by the Company to receive such reports at the same time that copies are sent to the SEC. If no such person has been designated, reports are to be sent to the Corporate Secretary at the Company’s principal executive offices.

(C) Filing Date. In order to be able to demonstrate that an Insider’s filing has been timely made, it is essential that the Insider file the form with the SEC by 10:00 pm Eastern time on the applicable date of filing. In the event that a due date falls on a weekend or SEC holiday, the Form will be deemed timely filed if it is received (or receipt is guaranteed) by the next business day after such weekend or holiday.

(d) Securities to be Reported. A person who is subject to Section 16 must only report as beneficially owned those securities in which he or she has a pecuniary interest. See the discussion of “beneficial ownership” below at Section D.

3. Initial Report of Ownership - Form 3. Under Section 16(a), Insiders are required to make an initial report on Form 3 to the SEC of their holdings of all equity securities of the corporation (whether or not such equity securities are registered under the Exchange Act). This would include all traditional types of securities, such as common stock, preferred stock and junior stock, as well as all types of derivative securities, such as warrants to purchase stock, options to purchase stock, puts and calls. Even Insiders who do not beneficially own any equity securities of the Company must file a report on Form 3 to that effect.

(a) Initial Filing Deadline. The initial statement of ownership for persons who become officers, directors or 10% stockholders of the Company must be filed within ten days after the date on which they become an officer, director or 10% stockholder, and should reflect ownership as of the date they became such an Insider.

(b) One-Time Filing. An Insider is required to file an initial statement of beneficial ownership on Form 3 only once, unless such person ceases to be an Insider and later becomes an Insider again. Thus, an additional statement on such Form is not required when either (1) the Insider attains a second “Insider” position (such as the election of the President to the Board), or (2) an additional class of equity securities of the Company is registered under Section 12.

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4. Changes in Ownership - Form 4. An Insider should use Form 4 to report (i) all transactions that are not exempt from Section 16(b) and (ii) all exercises and conversions of derivative securities (e.g. stock options) regardless of whether they are exempt. Directors, officers and 10% stockholders of U.S. public companies are required to file their Form 4 reports under Section 16 of the Exchange Act by the second business day after execution of a transaction.

(a) Prior Transactions. Insiders of the Company need not report transactions that occurred prior to the date they first became an officer, director or 10% stockholder, and those transactions may not become a basis for short-swing profit liability under Section 16(b). However, a director or officer who becomes subject to Section 16 solely as a result of the issuer first registering a class of its equity securities pursuant to Section 12 of the Exchange Act is subject to the reporting and liability provisions of Section 16 with respect to any transactions conducted in the six months prior to the first transaction requiring a filing on Form 4 after such registration.

(b) Termination of Insider Status. If a person ceases to be an officer or director, he or she continues to be subject to the reporting and liability provision of Section 16 for up to six months following termination of such status. As a result, he or she must file a Form 4 with respect to any non-exempt change in beneficial ownership which occurs within six months after any change in ownership which occurred before he or she ceased to be an officer or director. Such an individual must also file a Form 5 after his or her termination to report exempt and previously unreported transactions for that portion of the issuer’s fiscal year during which he or she was an officer or director, as well as to report exempt and previously unreported transactions occurring within six months of the last transaction conducted while the person was an officer or director subject to Section 16.

A 10% stockholder whose beneficial ownership (under the Section 13(d) voting or investment control test) drops below 10% need not report any subsequent transactions on Form 4 after reporting less than 10% but must file a Form 5 with respect to any exempt or previously unreported transactions that occurred during the portion of the fiscal year that such person was a 10% stockholder.

Both Form 4 and Form 5 have an exit box that should be checked when the Insider reports a transaction that takes him or her under 10% ownership.

(c) What Constitutes a Change in Beneficial Ownership. Generally, an Insider is deemed to have acquired (or disposed of) beneficial ownership of a security at the time he or she makes a firm commitment to acquire (or dispose of) the security. (Please see Section D below for a complete definition of “Beneficial Ownership.”) If it is necessary that certain conditions outside the Insider’s control be satisfied prior to the consummation of the purchase or sale and if it is uncertain whether such conditions will be satisfied, the Insider will not be deemed to have acquired beneficial ownership or to have divested himself or herself until such time as the conditions prescribed are satisfied and the undertaking to purchase or sell becomes a firm commitment.

An Insider is deemed to have acquired ownership of a derivative security (whether issued by the Company or a third party) upon grant or acquisition, regardless of when it becomes exercisable. Similarly, an Insider is deemed to have disposed of ownership of a derivative security upon its sale, cancellation or expiration. See Sections B.6 and C below.

(d) Report Each Change of Ownership. Except for certain exempt transactions that may be reported on a Form 5, every change of ownership must be reported on Form 4.

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5. Special Transactional Reporting Requirements. Changes in beneficial ownership that constitute exempt transactions under Section 16(a) or Section 16(b), other than the exercise of an option, need not be reported currently on Form 4. Such transactions fall into two categories: (i) those which must be reported in the annual filing on Form 5, and (ii) those which need not be reported at all. The following are some examples of transactions in these categories.

(i) Annual Filing on Form 5

(a) Small Acquisitions. Reporting an acquisition of an equity security not exceeding $10,000 in market value, or of the right to acquire such securities, may be deferred until the annual filing on Form 5, so long as (A) total acquisitions of the same class of security (including securities underlying derivative securities) within the preceding six months do not exceed $10,000 in market value, and (B) the person making the acquisition does not within six months thereafter make any disposition that is not exempt from Section 16(b) of the Exchange Act. Once either of the conditions described in (A) and (B) is not met, the small acquisition must be reported on Form 4 before the end of the second business day following the day in in which the condition(s) fail.

(b) Gifts and Inheritance. Acquisitions and dispositions of the Company’s securities pursuant to bona fide gifts or by will or the laws of descent and distribution are exempt from the liability provisions of Section 16(b). Insiders need not report such acquisitions or dispositions until the Form 5 for the fiscal year in which such transaction occurs.

(c) Option Grants under Rule 16b-3. The grant of an option to an Insider pursuant to Rule 16b-3 is exempt from liability and is reportable on Form 4. See Section C below.

(ii) No Reporting Required.

(a) Stock Splits and Stock Dividends. Insiders need not report the acquisition or disposition of stock via stock splits or stock dividends that are provided pro rata to all security holders, and such acquisitions and dispositions are exempt from the liability provision of Section 16(b). It is advisable for Insiders to use the extra space provided on Form 4 or Form 5 to explain any change in their holdings resulting from such events.

(b) Pro Rata Rights. Acquisitions of stockholder rights granted pro rata to all holders of a class of registered equity securities (including so-called “poison pill” stockholder rights) are exempt from the reporting and liability provisions of Section 16.

6. Year-End Filing - Form 5. An Insider must file a Form 5 within 45 days after the end of the issuer’s fiscal year (February 14) unless all holdings and transactions that are required to be reported on Form 5 (including exempt transactions) have already been reported as of the date the Form 5 is due.

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If not previously reported, the following transactions must be reported on Form 5: (a) any transaction during the last fiscal year that was exempt from the operation of the short-swing profit recovery rules under Section 16(b) (such as grants of options under Rule 16b-3); and (b) any holdings or transactions that should have been reported during the Company’s last fiscal year (two fiscal years for the first Form 5 filed) on a Form 3 or Form 4, but were not reported. The Form 5 filing requirements apply to each person who was an Insider during any portion of the applicable fiscal year.

7. Reporting Obligations Regarding Certain Transactions in Derivative Securities. In general, the acquisition or disposition of any option, warrant, put or call, whether or not transferable or then exercisable, is a reportable purchase or sale of the underlying security to which such derivative security relates, and requires the filing of a Form 4.

(a) Grant of Option or Warrant. If a derivative security is granted pursuant to Rule 16b-3, the otherwise reportable purchase is exempt and need not be reported until the annual filing on Form 5. If an Insider receives a derivative security other than pursuant to Rule 16b-3, the acquisition is deemed to be a purchase for Section 16 purposes and must be currently reported on Form 4.

(b) Exercise or Conversion of Option, Warrant or Other Right. The exercise of any option, warrant or other right to purchase securities must be currently reported on Form 4.

(c) Pledges. The right of a pledgee or borrower of securities to sell the pledged or borrowed securities is not a derivative security or “option” for purposes of Section 16, and the acquisition or disposition of such a right does not require the filing of a Form 4. Moreover, the SEC Staff has taken the position that bona fide pledges or loans of securities do not represent changes in beneficial ownership and need not be reported by the pledgor or lender. However, the sale of the pledged or borrower securities by the pledgee or borrower must be reported by the pledgor or lender and may result in Section 16(b) liability for the pledgor or lender.

C. Securities Acquired Pursuant to Rule 16b-3.

1. General. Rule 16b-3 generally provides exemptions from Section 16(b) for non-discretionary transactions by Insiders (e.g., not at the volition of the Insider). Rule 16b-3 provides that a grant or award of equity securities is exempt from Section 16 if any of the following conditions are met:

(1) the transaction is approved in advance by the board of directors or a committee of the board composed solely of two or more non-employee directors;

(2) the transaction is approved in advance by the stockholders, or subsequently ratified by the stockholders by the date of the next annual meeting of stockholders; or

(3) the securities so acquired are held by the officer or director for six months following the date of such acquisition.

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2. Transactions Must Comply with Rule 16b-3. Individual transactions must meet certain general requirements in order to qualify for beneficial treatment under Rule 16b-3.

D. Determining Beneficial Ownership.

The issue of beneficial ownership arises in two contexts under Section 16:

1. Determining Who is a Ten Percent Holder. Beneficial ownership in the Section 16 context is determined by reference to Rule 13d-3, which provides that a person is the beneficial owner of securities if that person has or shares voting or dispositive power with respect to such securities, or can acquire such power within 60 days through the exercise or conversion of derivative securities.

2. Determining Beneficial Ownership for Reporting and Short-Swing Profit Liability. For all Section 16 purposes other than determining who is a ten percent holder, beneficial ownership means a direct or indirect pecuniary interest in the subject securities through any contract, arrangement, understanding, relationship or otherwise. “Pecuniary interest” means the opportunity, directly or indirectly, to profit or share in any profit derived from a transaction in the subject securities. Discussed below are several of the situations that may give rise to an indirect pecuniary interest.

(a) Family Holdings. An Insider is deemed to have an indirect pecuniary interest in securities held by members of the Insider’s immediate family sharing the same household. Immediate family includes grandparents, parents (and step-parents), spouses, siblings, children (and step-children) and grandchildren, as well as parents-in-law, siblings-in-law, children-in-law and all adoptive relationships. An Insider may disclaim beneficial ownership of shares held by members of his or her immediate family, but the burden of proof will be on the Insider to uphold the lack of a pecuniary interest.

(b) Partnership Holdings. Beneficial ownership of a partnership’s securities is attributed to the general partner of a limited partnership in proportion to such person’s partnership interest. Such interest is measured by the greater of the general partner’s share of partnership profits or of the general partner’s capital account (including any limited partnership interest held by the general partner).

(c) Corporate Holdings. Beneficial ownership of securities held by a corporation will not be attributed to its stockholders who are not controlling stockholders and who do not have or share investment control over the corporation’s portfolio securities.

(d) Derivative Securities. Ownership of derivative securities (warrants, stock appreciation rights, convertible securities, options and the like) is treated as indirect ownership of the underlying equity securities. Acquisition of derivative securities must be reported, although the timing of such reporting depends upon the Rule 16b-3 status of the employee plan under which the grant was made.

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E. Delinquent Filings.

1. Disclosure Requirements. Item 405 of Regulation S-K requires the Company to disclose in its proxy statements, information statements and Annual Reports on Form 10-K information regarding delinquent filings under Section 16(a) by Insiders. The Company must identify by name its Insiders who, during the fiscal year, reported transactions late or failed to file required reports, and must disclose the number of delinquent filings and transactions for each such Insider. The Company does not have an obligation to research and make inquiry regarding the delinquent Section 16(a) filings but may rely on the information disclosed on Forms 3, 4 and 5. The Company may also rely on a written representation from the Insider that no Form 5 filing is required but should retain the representation for two years.

2. Correcting Late Filings. If a particular transaction or holding has not been reported, the Insider must file a new form or the Insider must amend the original filing by filing a new form. The transaction reported in an untimely manner would be disclosed pursuant to Item 405 for the fiscal year in which the report was filed, even if the transaction related to and should have been reported in a prior fiscal year.

3. Potential Liability. The SEC has been empowered by Congress to seek civil penalties against those who fail to comply with the reporting requirements of Section 16. Penalties for failure to timely file may range from $5,000 to $100,000 per violation. Moreover, if the SEC obtains a cease-and-desist order prohibiting future violations of the reporting requirements under Section 16, each day that a filing is late may be treated as a separate offense, thereby multiplying the penalty amount by the number of days that the form is delinquent.

F. Other Prohibited Insider Transactions Under Section 16(c).

Section 16(c) of the Exchange Act provides that it is unlawful for an Insider to sell any equity security (including a derivative security) of a corporation if the person selling the security (1) does not own the security sold, or (2) owns the security but does not deliver it against such sale within 20 days thereafter, or does not, within five days after such sale, deposit it in the mails or other usual channels of transportation.

Clause (1) above is directed to the traditional “short sale” where the seller borrows stock to make delivery on sale and repays his or her loan with securities purchased thereafter.

Clause (2) above is directed to either long sales or “short sales against the box” where delivery is not made within the required time limits.

The interactions of Section 16(c) with the derivative securities concept is not entirely clear, but the establishment of or increase in a “put equivalent position” (a broadly defined term that includes any type of short position) is considered functionally and economically equivalent to a prohibited short sale if the Insider does not own underlying securities sufficient to cover the put equivalent position.

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Exhibit C

CLOVER LEAF CAPITAL CORP.

Insider Trading Compliance Program - Pre-Clearance Checklist

Individual Proposing to Trade:_________________________

Number of Shares covered by Proposed Trade:_________________________

Date:_________________________

☐ Trading Window. Confirm that the trade will be made during the Company’s “trading window.”

☐ Section 16 Compliance. Confirm, if the individual is subject to Section 16, that the proposed trade will not give rise to any potential liability under Section 16 as a result of matched past (or intended future) transactions. Also, ensure that a Form 4 has been or will be completed and will be timely filed.

☐ Prohibited Trades. Confirm, if the individual is subject to Section 16, that the proposed transaction is not a “short sale,” put, call or other prohibited or strongly discouraged transaction.

☐ Rule 144 Compliance (as applicable). Confirm that:

☐ Current public information requirement has been met;

☐ Shares are not restricted or, if restricted, the one year holding period from the closing of the Company’s initial business combination has been met;

☐ Volume limitations are not exceeded (confirm that the individual is not part of an aggregated group);

☐ The manner of sale requirements have been met; and

☐ The Notice of Form 144 Sale has been completed and filed.

☐ Rule 10b-5 Concerns. Confirm that (i) the individual has been reminded that trading is prohibited when in possession of any material information regarding the Company that has not been adequately disclosed to the public, and (ii) the Insider Trading Compliance Officer has discussed with the individual any information known to the individual or the Insider Trading Compliance Officer which might be considered material, so that the individual has made an informed judgment as to the presence of inside information.

Signature of Insider Trading Compliance Officer

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EX-21

Exhibit 21 

CLOVER LEAF CAPITAL CORP.

EXHIBIT 21 — SUBSIDIARY OF THE REGISTRANT

The following is the solely subsidiary of Clover Leaf Capital Corp. as of December 31, 2023.

		Percentage of
Name of Company	Incorporated	Ownership
CL Merger Sub, Inc.	Nevada	100

EX-31.1

Exhibit 31.1

CERTIFICATION OF THE

PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO

RULE 13a-14(a) AND RULE 15d-14(a)

UNDER THE

SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Felipe MacLean, certify that:

1. I have reviewed this Annual Report on Form 10-K of Clover Leaf Capital Corp.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 21, 2024	By:	/s/ Felipe MacLean
		Felipe MacLean
		Chief Executive Officer
		(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION OF THE

PRINCIPAL FINANCIAL OFFICER

PURSUANT TO

RULE 13a-14(a) AND RULE 15d-14(a)

UNDER THE

SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Luis A. Guerra, certify that:

1. I have reviewed this Annual Report on Form 10-K of Clover Leaf Capital Corp.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 21, 2024	By:	/s/ Luis A. Guerra
		Luis A. Guerra
		Chief Financial Officer
		(Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION OF THE

PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report on Form 10-K of Clover Leaf Capital Corp. (the “Company”) for the fiscal year ended December 31, 2023, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Felipe MacLean, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the period covered by the Report.

Date: March 21, 2024	By:	/s/ Felipe MacLean
		Felipe MacLean
		Chief Executive Officer
		(Principal Executive Officer)

EX-32.2

Exhibit 32.2

CERTIFICATION OF THE

PRINCIPAL FINANCIAL OFFICER

PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report on Form 10-K of Clover Leaf Capital Corp. (the “Company”) for the fiscal year ended December 31, 2023, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Luis A. Guerra, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the period covered by the Report.

Date: March 21, 2024	By:	/s/ Luis A. Guerra
		Luis A. Guerra
		Chief Financial Officer
		(Principal Financial Officer)

EX-97.

Exhibit 97

CLOVER LEAF CAPITAL CORP.

EXECUTIVE COMPENSATION CLAWBACK POLICY

Adopted as of November 30, 2023

The Board of Directors (the “Board”) of Clover Leaf Capital Corp. (the “Company”) has adopted the following executive compensation clawback policy (this “Policy”). This Policy shall supplement any other clawback or compensation recovery policy or policies adopted by the Company or included in any agreement between the Company, or any subsidiary of the Company, and a person covered by this Policy. If any such other policy or agreement provides that a greater amount of compensation shall be subject to clawback, such other policy or agreement shall apply to the amount in excess of the amount subject to clawback under this Policy.

This Policy shall be interpreted to comply with Securities and Exchange Commission (“SEC”) Rule 10D-1 and Listing Rule 5608 (the “Listing Rule”) of The Nasdaq Stock Market, LLC (“Nasdaq”), as may be amended or supplemented and interpreted from time to time by Nasdaq. To the extent this Policy is any manner deemed inconsistent with the Listing Rule, this Policy shall be treated as having been amended to be compliant with the Listing Rule.

1. Definitions. Unless the context otherwise the following definitions apply for purposes of this Policy:

(a) Executive Officer. An executive officer is the Company’s chief executive officer and/or president, principal financial officer, principal accounting officer (or if there is no such accounting officer, the controller), any other officer who performs a policy-making function, or any other person who performs similar policy-making functions for the Company. Executive officers of the Company’s parent(s) or subsidiaries are deemed executive officers of the Company if they perform such policy making functions for the Company. Policy-making function is not intended to include policy-making functions that are not significant. Identification of an executive officer for purposes of the Listing Rule would include at a minimum executive officers identified in the Listing Rule.

(b) Financial Reporting Measures. Financial reporting measures are measures that are determined and presented in accordance with the accounting principles used in preparing the Company’s financial statements, and any measures that are derived wholly or in part from such measures. Stock price and total shareholder return are also financial reporting measures. A financial reporting measure need not be presented within the financial statements or included in a filing with the SEC and may be such financial measures as may be determined by the Board or the Compensation Committee thereof (the “Compensation Committee”).

(c) Incentive-Based Compensation. Incentive-based compensation is any compensation that is granted, earned or vested based wholly or in part upon the attainment of a financial reporting measure.

(d) Received. Incentive-based compensation is deemed “received” in the Company’s fiscal period during which the financial reporting measure specified in the incentive-based compensation award is attained, even if the payment or grant of the incentive-based compensation occurs after the end of that period.

2. Application of this Policy. This recovery of Incentive-Based Compensation from an Executive Officer as provided for in this Policy shall apply only in the event that the Company is required to prepare an accounting restatement due to the material noncompliance of Company with any financial reporting requirement under the United States securities laws, including any required accounting restatement to correct an error in previously issued financial statements that is material to the previously issued financial statements, or that would result in a material misstatement if the error were corrected in the current period or left uncorrected in the current period.¹

3. Recovery Period.

(a) The Incentive-Based Compensation subject to recovery is the Incentive-Based Compensation Received during the three (3) completed fiscal years immediately preceding the date that the Company is required to prepare an accounting restatement as described in Section 2 above, provided that the person served as an Executive Officer at any time during the performance period applicable to the Incentive-Based Compensation in question. The date that the Company is required to prepare an accounting restatement shall be determined pursuant to the Listing Rule.

(b) Notwithstanding the foregoing, this Policy shall only apply if the Incentive-Based Compensation is Received (i) while the Company has a class of securities listed on Nasdaq and (ii) on or after October 2, 2023.

(c) The provisions of the Listing Rule shall apply with respect to Incentive-Based Compensation received during a transition period arising due to a change in the Company’s fiscal year.

4. Erroneously Awarded Compensation. The amount of Incentive-Based Compensation subject to recovery from the applicable Executive Officers under this Policy (“Erroneously Awarded Compensation”) shall be equal to the amount of Incentive-Based Compensation Received that exceeds the amount of Incentive Based-Compensation that otherwise would have been Received had it been determined based on the restated amounts and shall be computed without regard to any taxes paid. For Incentive-Based Compensation based on stock price or total shareholder return, where the amount of Erroneously Awarded Compensation is not subject to mathematical recalculation directly from the information in an accounting restatement: (a) the amount shall be based on a reasonable estimate by the Company’s Chief Financial Officer (or principal accounting officer, if the office of Chief Financial Officer is not then filled) of the effect of the accounting restatement on the stock price or total shareholder return upon which the Incentive-Based Compensation was received, which estimate shall be subject to the review and approval of the Compensation Committee; and (b) the Company must maintain reasonable documentation of the determination of that reasonable estimate and provide such documentation to Nasdaq if requested. Notwithstanding the foregoing, if the proposed Incentive-Based Compensation recovery would affect compensation paid to the Company’s Chief Financial Officer, the determination shall be made by the Compensation Committee.

5. Timing of Recovery. The Company shall recover any Erroneously Awarded Compensation reasonably promptly except to the extent that the conditions of paragraphs (a), (b), or (c) below apply. The Compensation Committee shall determine the repayment schedule for each amount of Erroneously Awarded Compensation in a manner that complies with this “reasonably promptly” requirement. Such determination shall be consistent with any applicable legal guidance by the SEC, Nasdaq, judicial opinion, or otherwise. The determination of “reasonably promptly” may vary from case to case and the Compensation Committee is authorized to adopt additional rules or policies to further describe what repayment schedules satisfy this requirement.

(a) Erroneously Awarded Compensation need not be recovered if the direct expense paid to a third party to assist in enforcing (or making determinations in connection with the enforcement of) this Policy would exceed the amount to be recovered and the Compensation Committee has made a determination that recovery would be impracticable. Before concluding that it would be impracticable to recover any amount of Erroneously Awarded Compensation based on expense of enforcement, the Company shall (i) make a reasonable attempt to recover such Erroneously Awarded Compensation, (ii) document such reasonable attempt or attempts to recover, and (iii) provide appropriate documentation to the Compensation Committee or Nasdaq, if requested.

¹ NOTE: questions as to “materiality” will be made by the Compensation Committee in coordination with the Audit Committee, and companies should review the charters for those committees and consider updates authorizing them to oversee and make determinations under the Company’s clawback policy.

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(b) Erroneously Awarded Compensation need not be recovered if recovery would violate home country law where that law was adopted prior to November 28, 2022. Before concluding that it would be impracticable to recover any amount of Erroneously Awarded Compensation based on a violation of home country law, the Company shall obtain an opinion of home country counsel, in form an substance that would be reasonably acceptable to Nasdaq, that recovery would result in such a violation and shall provide such opinion to Nasdaq, if requested.

(c) Erroneously Awarded Compensation need not be recovered if recovery would likely cause an otherwise tax-qualified retirement plan, under which benefits are broadly available to employees of the Company, to fail to meet the requirements of 26 U.S.C. 401(a)(13) or 26 U.S.C. 411(a) and the regulations thereunder (as such provision may be amended, modified or supplemented).

6. Compensation Committee Decisions. Decisions of the Compensation Committee with respect to this Policy shall be final, conclusive and binding on all Executive Officers subject to this Policy.

7. No Indemnification. Notwithstanding anything to the contrary in any other policy of the Company or any agreement between the Company and an Executive Officer, no Executive Officer shall be indemnified by the Company against the loss arising from the recovery of any Erroneously Awarded Compensation.

8. Agreement to Policy by Executive Officers². The Company shall take reasonable steps to inform Executive Officers of this Policy and obtain their express agreement to this Policy, which steps may constitute the inclusion of this Policy as an attachment to any award that is accepted by an Executive Officer. This Policy shall be deemed to apply to each employment or grant agreement between the Company or any of its subsidiaries and any Executive Officer subject to this Policy.

² Companies should be advised to have the executive officers acknowledge this in writing (similar to the Insider trading Policy acknowledgement). Also consider if amendments should be made to employment agreements, grant award forms, etc.

# # #

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EX-99.1

Exhibit 99.1

CLOVER LEAF CAPITAL CORP.

AUDIT COMMITTEE CHARTER

Adopted and effective on July 19, 2021

Amended and Restated on November 30, 2023

I. Purpose

The Audit Committee (the “Committee”) of the Board of Directors (the “Board”) of CLOVER LEAF CAPITAL CORP., a Delaware corporation (the “Company”), shall provide assistance to the Board in fulfilling its legal and fiduciary obligations to oversee:

(a) the integrity of the financial statements and other financial information provided by the Company to its stockholders, the public, any stock exchange and others;

(b) the Company’s compliance with legal and regulatory requirements;

(c) the qualifications and independence of the Company’s independent auditor;

(d) the performance of the Company’s internal audit function and its system of internal controls and independent auditor, and

(e) such other matters as are assigned to the Committee by the Board pursuant to this Charter or as mandated under applicable laws, rules and regulations (including the Securities Exchange Act of 1934 and the rules and regulations promulgated thereunder, as amended (the “Exchange Act”)) as well as listing standards of the Nasdaq Capital Market (together, the “Applicable Requirements”).

Although the Committee has the powers and responsibilities set forth in this Charter, the role of the Committee is oversight. The members of the Committee are not full-time employees of the Company and may or may not be accountants or auditors by profession or experts in the fields of accounting or auditing and, in any event, do not serve in such capacity. Consequently, it is not the duty of the Committee to conduct audits or to determine that the Company’s financial statements and disclosures are complete and accurate and are in accordance with Generally Accepted Accounting Principles (“GAAP”) and other Applicable Requirements. These are the responsibilities of management and the Company’s independent auditor.

II. Organization

The Committee shall consist of three or more directors, each of whom shall satisfy the independence, financial literacy, and other qualifications required by the Company’s corporate governance guidelines, Section 10A-3 of the Exchange Act and any other Applicable Requirements, subject to any phase-in periods or cure periods permitted by Rule 10A-3(b)(1)(iv)(A) under the Exchange Act and other Applicable Requirements. At least one member of the Committee shall be an “audit committee financial expert” (as defined by the Securities and Exchange Commission (the “SEC”). Determinations of independence, financial literacy, experience and expertise shall be made by the Board as the Board interprets such qualifications in its business judgment.

No Committee member shall simultaneously serve on the audit committees of more than two other public companies unless the Board determines that such simultaneous service does not impair the ability of such member to effectively serve on the Committee and such determination is disclosed in accordance with the Applicable Requirements.

Members of the Committee shall be appointed by the Board on the recommendation of the Nominating and Governance Committee, if any, or the independent directors of the Board. Members of the Committee may be removed at any time by action of the Board; provided, however, that if removing a member or members of the Committee would cause the Committee to have fewer than three members, then the Board must, based upon the recommendation of the Nominating and Corporate Governance Committee, if any, or the independent directors, at the same time appoint enough additional members to the Committee so that the Committee will have at least three qualified members. The Committee’s chairperson shall be designated by the Board on the recommendation of the Nominating and Governance Committee, if any, or the independent directors, or, if not so designated, the members of the Committee shall elect a chairperson by a vote of the majority of the full Committee.

The Committee may form and delegate authority to subcommittees from time to time as it sees fit, provided that the subcommittees are composed entirely of directors who satisfy the applicable independence requirements of the Company’s corporate governance guidelines and the Applicable Requirements.

III. Meetings

The Committee shall meet at least four times per year on a quarterly basis, or more frequently as required. Meetings shall be called by the chairperson of the Committee or, if there is no chairperson, by a majority of the members of the Committee. Meetings may be held telephonically or by other electronic means to the extent permitted by the Company’s organizational documents and applicable law. Committee actions may be taken by unanimous written consent.

The Committee shall also meet periodically with management, the chief internal auditor and the Company’s independent auditor in separate executive sessions to discuss any matters that the Committee or each of these groups believe should be discussed privately.

The Committee shall maintain minutes of its meetings and records relating to those meetings.

IV. Authority and Responsibilities

In fulfilling its duties and responsibilities hereunder, the Committee will be entitled to rely reasonably on (a) the integrity of those persons within the Company and the professionals and experts (such as the Company’s independent auditor) from whom it receives information, (b) the accuracy of the financial and other information provided to the Committee by such persons and (c) representations made by the Company’s independent auditor as to any services provided by such firm to the Company.

To fulfill its responsibilities, the Committee shall:

With respect to the engagement of the Company’s independent and other auditors:

1. Be directly responsible for (a) the appointment, compensation, retention, (including termination), scope and oversight of the work of any independent registered public accounting firm engaged by the Company (including for the purpose of preparing or issuing an audit report or performing other audit, review or attestation services or other work for the Company), and (b) the resolution of any disagreements between management and any such firm regarding financial reporting.

2. Have the sole authority to review in advance, and pre-approve (which may be pursuant to pre-approval policies and procedures) all audit or non-audit services to be provided by the Company’s independent or other auditors as permitted by Section 10A of the Exchange Act and to approve all related fees and other terms of engagement. The Committee shall also review and approve disclosures required to be included by the Company in periodic reports filed with the SEC under Section 13(a) of the Exchange Act with respect to audit and non-audit services.

3. At least annually, obtain and review a formal written report from the Company’s independent auditor (a) describing such firm’s internal quality control procedures, (b) describing any material issues raised by the most recent internal quality control review, peer review or Public Company Accounting Oversight Board (“PCAOB”) review or inspection of such firm, or by any inquiry or investigation by governmental or professional authorities, within the preceding five years, respecting one or more independent audits carried out by such firm, and any steps taken to deal with any such issues, and (c) assessing such firm’s independence, including delineating all relationships and engagements that may reasonably be thought to bear on the independence of the auditor, including those between the auditor and the Company. The Committee shall discuss this report with the Company’s independent auditor and shall take appropriate action to ensure the independence of the independent auditor and to address any other matters based on such report.

4. Confirm that the “lead partner,” the “concurring partner” and the other “audit partner” rotation requirements under the Applicable Requirements, including Regulation S-X have been complied with and set clear policies for audit partner rotation in compliance with applicable laws and regulations.

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5. Review all reports and communications required to be submitted by the Company’s independent registered public accounting firm to the Committee under Section 10A of the Securities Exchange Act and other Applicable Requirements. Such reports should describe (i) the independent registered public accounting firm’s internal quality-control procedures, (ii) any material issues raised by the most recent internal quality-control review, or peer review, of the audit firm, or by any inquiry or investigation by governmental or professional authorities within the preceding five years respecting one or more independent audits carried out by the firm and any steps taken to deal with such issues and (iii) all relationships between the independent registered public accounting firm and the Company to assess the independent registered public accounting firm’s independence.

6. At least annually, evaluate the performance of the Company’s independent auditor, including the lead audit partner. In making its evaluation, the Committee should take into account the opinions of management and the internal audit group.

7. Review and discuss with the Company’s independent auditor all relationships the auditor has with the Company and evaluate the auditor’s continued independence.

8. Determine the Company’s hiring policies regarding partners, employees and former partners and employees of the Company’s independent auditor.

With respect to the Company’s financial statements and other financial reporting:

9. Review and discuss the Company’s annual audited and quarterly unaudited financial statements with management (including the Company’s internal audit group) and the Company’s independent auditor, including disclosures made in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” to be included in the Company’s annual report on Form 10-K or quarterly reports on Form 10-Q.

10. Recommend to the Board whether the Company’s annual audited financial statements should be included in the Company’s annual report for filing with the SEC and timely prepare the report required by the SEC to be included in the Company’s annual proxy statement, if applicable, and any other reports of the Committee required by any Applicable Requirement.

11. Review and discuss with management and the Company’s independent auditor (a) major issues regarding, or significant changes in, the Company’s accounting principles and financial statement presentations, (b) analyses prepared by management or the Company’s independent auditor concerning significant financial reporting issues and judgments made in connection with the preparation of the financial statements, (c) the effect of regulatory and accounting initiatives, as well as off-balance sheet structures, on the financial statements of the Company, and (d) the type and presentation of information to be included in earnings press releases and any financial information and earnings guidance provided to analysts and rating agencies.

12. Prior to the filing of any audited financial statements with the SEC, review with management and the Company’s independent auditor (a) all critical accounting policies and practices used by the Company, (b) all alternative accounting treatments of financial information reported in GAAP related to material items that have been discussed with management, including the ramifications of the use of such alternative treatments and disclosures and the treatment preferred by the Company’s independent auditor, (c) any reports or communications (and management’s responses thereto) submitted to the Committee by the Company’s independent auditor in accordance with PCAOB Auditing Standard No. 16, Communications with Audit Committees, as amended or supplemented, and (d) any other material written communications between the Company’s independent auditor and management.

13. Periodically review separately with each of management, the Company’s independent auditor and the internal audit group (a) any significant disagreement between management and the Company’s independent auditor or the internal audit group in connection with the preparation of the financial statements, (b) any audit problems or difficulties encountered during the course of the audit, including any restrictions on the scope of work or access to required information, and (c) management’s response to each. The Committee shall discuss with the independent auditor material issues on which the national office of the independent auditor was consulted by the Company’s audit team.

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14. Periodically discuss with the Company’s independent auditor, without management being present, (a) their judgment about the quality, integrity and appropriateness of the Company’s accounting principles and financial disclosure practices as applied in its financial reporting and (b) the completeness and accuracy of the Company’s financial statements.

15. Review and discuss with management the Company’s earnings press releases, including the use of non-GAAP financial measures and other “pro forma” or “adjusted” presentations, as well as financial information and earnings guidance provided to analysts and rating agencies. Such discussions may be general (consisting of discussing the types of information to be disclosed and the types of presentations to be made), and each earnings release or each instance in which the Company provides earnings guidance need not be discussed in advance.

16. Review and discuss with management all material off-balance sheet transactions, arrangements, obligations (including contingent obligations) and other relationships of the Company with unconsolidated entities or other persons.

17. Review and approve the Company’s decision to enter into swaps and other derivatives transactions that are exempt from exchange-execution and clearing under “end-user exception” regulations established by the Commodity Futures Trading Commission; and review and approve the Company’s policies governing the Company’s use of swaps and other derivatives transactions subject to the end- user exception.

18. Review and discuss with management and the internal audit group the Company’s major financial risk exposures and management’s risk assessment and risk management policies.

With respect to the internal audit function and internal controls:

19. Review, based on the recommendation of the Company’s independent auditor and the person responsible for the Company’s internal audit group, the scope and plan of the work to be done by the internal audit group and the responsibilities, budget, audit plan, activities, organizational structure and staffing of the internal audit group as needed.

20. Receive reports from the internal audit group on the status of significant findings and recommendations, and management’s responses.

21. Review on an annual basis the performance of the internal audit group.

22. In consultation with the Company’s management, independent auditor and the internal audit group, review the adequacy of the Company’s internal controls, disclosure processes and its procedures designed to ensure compliance with laws and regulations, and any special audit steps adopted in light of material control deficiencies.

23. Review (a) the internal control report prepared by management, including management’s assessment of the effectiveness of the Company’s internal control over financial reporting and (b) the Company’s independent auditor’s attestation, and report, on the assessment made by management, in each case, as and when required by Section 404 of the Sarbanes-Oxley Act of 2002. Discuss with management, the internal audit group and the independent auditor any changes in internal control over financial reporting disclosed or considered for disclosure in the Company’s periodic filings with the SEC.

24. Review with management and the Company’s independent auditor any reports or disclosure submitted by management to the Committee as contemplated by the certifications required under Section 302 of the Sarbanes-Oxley Act of 2002.

25. Review with management any management letters and the steps management intends to take to address the issues raised by those letters.

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With respect to the Company’s compliance programs:

26. Monitor compliance with the Company’s Code of Conduct and Ethics, and oversee, review and discuss with management, at least annually, the implementation and effectiveness of the Company’s compliance and ethics programs. Review and take appropriate action with respect to any reports to the Committee from legal counsel for the Company concerning any material violation of securities law or breach of fiduciary duty or similar violation by the Company, its subsidiaries or any person acting on their behalf. As appropriate, the Committee shall report and make recommendations to the Board with respect to these matters.

27. Establish procedures for (a) the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters and (b) the confidential, anonymous submission by employees of the Company or any subsidiary or affiliate of the Company whose financial information is included in the Company’s financial statements of concerns regarding questionable accounting or auditing matters.

28. Review and approve (a) any amendment to or waiver from the Company’s code of ethics for the co-chief executive officers and senior financial officers and (b) any public disclosure made regarding such change or waiver and advise the Board with respect to the Company’s policies and procedures regarding compliance with the Company’s Code of Business Conduct and Ethics.

29. Develop and recommend to the Board for approval policies and procedures for the review, approval or ratification of related person transactions required to be disclosed pursuant to Item 404 of Regulation S-K, as may be amended from time to time, and any other applicable requirements (the “Related Person Transactions Policy”). Review the Related Person Transactions Policy at least annually and recommend to the Board for approval any changes to the Policy. Oversee the implementation of and compliance with the Related Person Transactions Policy, including reviewing, approving or ratifying related person transactions, as appropriate pursuant to the Related Person Transaction Policy.

30.	Review with management, the independent registered public accounting firm, and the Company’s legal advisors, as appropriate, any legal, regulatory or compliance matters, including any correspondence with regulators or government agencies and any employee complaints or published reports that raise material issues regarding the Company’s financial statements or accounting policies and any significant changes in accounting standards or rules promulgated by the Financial Accounting Standards Board, the SEC or other regulatory authorities.
31.	To the extent that the Company’s securities continue to be listed on an exchange and subject to Rule 10D-1 under the Exchange Act (the “Rule”), the Committee shall, with the assistance of management, advise the Board and any other Board committees if the clawback provisions of the Rule are triggered based upon a financial statement restatement or other financial statement change.
32.	Implement and oversee the Company’s cybersecurity and information security policies, periodically review the policies, and manage potential cybersecurity incidents.

With respect to the Committee’s other authorities and responsibilities:

33. Review and assess annually its own performance and the adequacy of this Charter and recommend to the Board any changes to this Charter deemed appropriate by the Committee.

34. Report regularly to the Board.

35. Perform any other activities consistent with this Charter, the Company’s organizational documents, as required under the Applicable Requirements or as the Committee or the Board otherwise deems necessary or appropriate.

V. Resources

The Committee shall have the authority to retain or terminate, at its sole discretion, independent legal, accounting and other advisors, consultants or professionals (collectively, “Advisors”) to assist the Committee in its responsibilities and shall be directly responsible for overseeing the work of such Advisors. The chairperson of the Committee, at the request of any member of the Committee, may request any officer, employee or advisor of the Company or the Company’s independent auditor to attend a meeting of the Committee or otherwise respond to Committee requests.

The Committee shall have the sole authority to determine the terms of engagement and the extent of funding necessary (and to be provided by the Company) for payment of (a) compensation to the Company’s independent auditor engaged for the purpose of preparing or issuing an audit report or performing other audit, review or attest services for the Company, (b) any compensation to any Advisors retained to advise the Committee and (c) ordinary administrative expenses of the Committee that are necessary or appropriate in carrying out its duties. 

5

EX-99.2

Exhibit 99.2

CLOVER LEAF CAPITAL CORP.

COMPENSATION COMMITTEE CHARTER

Adopted and effective on July 19, 2021

Amended and Restated on November 30, 2023

I. Purpose

The Compensation Committee (the “Committee”) of the Board of Directors of Clover Leaf Capital Corp., a Delaware corporation (the “Company”), shall have responsibility for the compensation of the Company’s executive officers, including the Company’s Chief Executive Officer (the “CEO”), and for incentive compensation, equity-based and pension plans as further provided in this Charter.

II. Organization

The Committee shall consist of two or more directors, each of whom shall satisfy the applicable independence and other compensation committee membership requirements of the Nasdaq Capital Market (“Nasdaq”) and any other applicable regulatory requirements subject to any exceptions or cure periods that are applicable pursuant to the foregoing requirements.

At least one member of the Committee shall have experience in matters relating to executive compensation either as a professional or as a business executive. At least two members shall qualify as (a) “outside directors” within the meaning of Section 162(m) of the U.S. Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder, including Treasury Regulations Section 1.162-27 (“Outside Directors”), and (b) “non-employee directors” within the meaning of Section 16 of the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules and regulations promulgated thereunder (“Non-Employee Directors”).

Members of the Committee shall be appointed by the Board on the recommendation of the Nominating and Corporate Governance Committee, if any, or the independent directors of the Company and may be removed by the Board at any time; provided, however, that if removing a member or members of the Committee would cause the Committee to have fewer than three members, then the Board must, based upon the recommendation of the Nominating and Corporate Governance Committee, if any, or the independent directors of the Company, at the same time appoint enough additional members to the Committee so that the Committee will have at least two members who qualify as (a) Outside Directors and (b) Non-Employee Directors. The Committee’s chairperson shall be designated by the Board on the recommendation of the Nominating and Corporate Governance Committee, if any, or the independent directors of the Company or, if not so designated, the members of the Committee shall elect a chairperson by a vote of the majority of the full Committee.

The Committee may form and delegate authority to subcommittees from time to time as it sees fit, provided that the subcommittees are composed entirely of directors who satisfy the applicable independence requirements of the Company’s corporate governance guidelines and the Nasdaq.

III. Meetings

The Committee shall meet as often as necessary to carry out its responsibilities. Meetings shall be called by the chairperson of the Committee or, if there is no chairperson, by a majority of the members of the Committee. Meetings may be held telephonically or by other electronic means to the extent permitted by the Company’s organizational documents and applicable law. Committee actions may be taken by unanimous written consent.

IV. Authority and Responsibilities

To fulfill its responsibilities, the Committee shall:

1. Review and make recommendations to the Board with respect to the Company’s compensation strategy to ensure it is appropriate to attract, retain and motivate senior management and other key employees.

2. Review and make recommendations to the Board with respect to the executive compensation philosophy, policies and programs that in the Committee’s judgment support the Company’s overall business strategy and review and discuss, at least annually, the material risks associated with executive compensation structure, policies and programs to determine whether such structure, policies and programs encourage excessive risk-taking and to evaluate compensation policies and practices that could mitigate any such risk.

3. On an annual basis, review and approve corporate goals and objectives relevant to the compensation of the Company’s CEO, evaluate the CEO’s performance in light of those goals and objectives and determine and approve CEO compensation based on this evaluation. In evaluating, determining and approving the long-term incentive component of CEO compensation, the Committee may consider, among such other factors as it may deem relevant, the Company’s performance, shareholder returns, the value of similar incentive awards to executive officers at comparable companies, the value of similar awards given to other executive officers of the Company, the results of the most recent shareholder advisory vote on executive compensation required by Section 14A of the Exchange Act (the “Say-on-Pay Vote”) and the awards given to the executive officer in past years. The CEO shall not be present during voting or deliberations relating to his or her compensation.

4. On an annual basis, review and approve the compensation of the Company’s other executive officers, evaluate the executive officers’ performance in light of those goals and objectives and determine and make recommendations to the Board with respect to executive officer compensation based on this evaluation. In evaluating and making recommendations with respect to the long-term incentive component of executive officer compensation, the Committee may consider, among such other factors as it may deem relevant, the Company’s performance, shareholder returns, the value of similar incentive awards to executive officers at comparable companies, the value of similar awards given to other executive officers of the Company, the results of the most recent shareholder advisory vote on executive compensation required by Section 14A of the Exchange Act (the “Say-on-Pay Vote”) and the awards given to the executive officer in past years. No executive officer may be present during voting or deliberations relating to his or her compensation.

5. Review and make recommendations to the Board with respect to the Company’s incentive compensation, equity-based and pension plans, if any. With respect to each such plan, the Committee shall have responsibility for:

(a) implementing and administering the plan;

(b) setting performance targets under all annual bonus and long-term incentive compensation plans as appropriate and committing to writing any and all performance targets for executive officers who may be “covered employees” under applicable laws and regulations;

(c) setting performance targets under all annual bonus and long-term incentive compensation plans as appropriate and committing to writing any and all performance targets for executive officers who may be “covered employees” under applicable laws and regulations;

(d) if called for by the plan, certifying that any and all performance targets used for any performance-based equity compensation plans have been met before payment of any executive bonus or compensation or exercise of any executive award granted under any such plans;

(e) approving all amendments to, and terminations of, all compensation plans and any awards under such plans;

(f) granting any awards under any performance-based annual bonus, long- term incentive compensation and equity compensation plans to executive officers or current employees with the potential to become a CEO or an executive officer, including stock options and other equity rights (e.g., restricted stock and stock purchase rights);

(g)	approving which executive officers are entitled to awards under the Company’s stock option plans; and
(h)	approving repurchases of securities from terminated employees.

2

In reviewing the Company’s incentive compensation, equity-based and pension plans, the Committee may consider the plan’s administrative costs, current plan features relative to any proposed new features, the results of the most recent Say- on-Pay Vote and the performance of the plan’s internal and external administrators if any duties have been delegated.

6.	Review and recommend to the Board for approval any employment agreement or compensatory transaction with an executive officer of the Company involving compensation in excess of $120,000 per year.
7.	Establish and periodically review policies concerning perquisite benefits and approve all special perquisites, special cash payments and other special compensation and benefits arrangements for officers and employees of the Company.

8. Determine and recommend to the Board for approval the Company’s policy with respect to change-of-control or “parachute” payments. In reviewing the Company’s policy with respect to change of control or “parachute” payments, the Committee may consider, among such other factors as it may deem relevant, the results of the most recent Say-on-Pay Vote on “parachute” payments, if any.

9. Review and make recommendations to the Board with respect to executive officer and director indemnification and insurance matters.

10. Review and recommend to the Board for approval the compensation of directors for their service to the Board. Review, evaluate and recommend changes, if appropriate, to the remuneration of directors.

11. Approve compensation awards, including individual awards, as may be required to comply with applicable tax and state corporate laws.

12. Review the Company’s compensation disclosures in its annual proxy statement and its Annual Report on Form 10-K filed with the SEC and assist management in complying with proxy statement and annual report requirements. Review and discuss the Company’s Compensation Discussion and Analysis (“CD&A”) with management and based on such review and discussion, determine whether to recommend to the Board that such compensation disclosures and CD&A be disclosed in the Company’s Annual Report on Form 10-K or annual proxy statement filed with the SEC, as applicable.

13. Review and recommend to the Board for approval the frequency with which the Company will conduct Say-on-Pay Votes, taking into account the results of the most recent shareholder advisory vote on frequency of Say-on-Pay Votes required by Section 14A of the Exchange Act, and review and recommend to the Board for approval the proposals regarding the Say-on-Pay Vote and the frequency of the Say-on-Pay Vote to be included in the Company’s proxy statement filed with the SEC.

14.	Prepare any report required by applicable rules and regulations or listing standards, including the report required by the SEC to be included in the Company’s annual proxy statement, or, if the Company does not file a proxy statement, in the Company’s Annual Report filed on Form 10-K with the SEC.
15.	To the extent that the Company’s securities continue to be listed on an exchange and subject to Rule 10D-1 under the Exchange Act (the “Rule”), the Committee shall, with the assistance of management, advise the Board and any other Board Committee if the clawback provisions of the Rule are triggered based upon a financial statement restatement or other financial statement change.

16. Review and assess the adequacy of this Charter annually and recommend to the Board any changes deemed appropriate by the Committee.

17. Review its own performance annually.

18. Report regularly to the Board.

19. Perform any other activities consistent with this Charter, the Company’s by-laws and governing law, as the Committee or the Board deems necessary or appropriate.

3

V. Resources

The Committee shall have the authority to retain or terminate, at its sole discretion, compensation consultants, independent legal counsel or other advisors (collectively, “Advisors”) to assist the Committee in its responsibilities and shall be directly responsible for the appointment, compensation and oversight of the work of such Advisors. Before retaining an Advisor (other than in-house legal counsel and any Advisor whose role is limited to consulting on broad-based, non-discriminatory plans or providing information that is not customized in particular for the Company (as described in Item 407(e)(3)(iii) of Regulation S-K)), the Committee shall consider the independence of such Advisor, including any independence factors that it is required to consider by law or Nasdaq rules.

The chairperson of the Committee, at the request of any member of the Committee, may request that any officer, employee or advisor of the Company attend a meeting of the Committee or otherwise respond to Committee requests.

The Committee shall have the sole authority to determine the terms of engagement and the extent of funding necessary (and to be provided by the Company) for payment of compensation to any Advisors or other professionals retained to advise the Committee and ordinary administrative expenses of the Committee that are necessary or appropriate in carrying out its duties. 

4

XML

Cover - USD ($)	12 Months Ended
	Dec. 31, 2023	Mar. 21, 2024	Jun. 30, 2023
Document Information [Line Items]
Document Type	10-K
Document Annual Report	true
Document Transition Report	false
Document Financial Statement Error Correction [Flag]	false
Entity Interactive Data Current	Yes
ICFR Auditor Attestation Flag	false
Amendment Flag	false
Document Period End Date	Dec. 31, 2023
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	FY
Entity Information [Line Items]
Entity Registrant Name	Clover Leaf Capital Corp.
Entity Central Index Key	0001849058
Entity File Number	001-40625
Entity Tax Identification Number	86-2303279
Entity Incorporation, State or Country Code	DE
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Shell Company	true
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Public Float			$ 17,037,435
Entity Contact Personnel [Line Items]
Entity Address, Address Line One	c/o Yntegra Capital Investments
Entity Address, Address Line Two	LLC 1450 Brickell Avenue
Entity Address, Address Line Three	Suite 2520
Entity Address, City or Town	Miami
Entity Address, State or Province	FL
Entity Address, Postal Zip Code	33131
Entity Phone Fax Numbers [Line Items]
City Area Code	(305)
Local Phone Number	577-0031
Units, each consisting of one share of Class A Common Stock and one right to receive one-eighth (1/8) of one share of Class A Common Stock upon the consummation of an initial Business Combination
Entity Listings [Line Items]
Title of 12(b) Security	Units, each consisting of one share of Class A Common Stock and one right to receive one-eighth (1/8) of one share of Class A Common Stock
Trading Symbol	CLOEU
Security Exchange Name	NASDAQ
Class A Common Stock, par value $0.0001 per share
Entity Listings [Line Items]
Title of 12(b) Security	Class A Common Stock, par value $0.0001 per share
Trading Symbol	CLOE
Security Exchange Name	NASDAQ
Rights, every eight (8) Rights entitling the holder to receive one share of Class A Common Stock upon the consummation of an initial Business Combination
Entity Listings [Line Items]
Title of 12(b) Security	Rights, every eight (8) Rights entitling the holder to receive one share of Class A Common Stock
Trading Symbol	CLOER
Security Exchange Name	NASDAQ
Class A Common Stock
Entity Listings [Line Items]
Entity Common Stock, Shares Outstanding		5,320,507
Class B Common Stock
Entity Listings [Line Items]
Entity Common Stock, Shares Outstanding		1

XML

Audit Information	12 Months Ended
	Dec. 31, 2023
Auditor [Table]
Auditor Name	Marcum llp
Auditor Firm ID	688
Auditor Location	New York, NY

XML

Balance Sheets - USD ($)	Dec. 31, 2023	Dec. 31, 2022
Current assets:
Cash	$ 162,933	$ 303,449
Prepaid expenses	122,364	104,876
Total current assets	285,297	408,325
Investments held in Trust Account	14,648,926	18,276,649
Total Assets	14,934,223	18,684,974
Liabilities, Redeemable Common Stock and Stockholders’ Deficit
Accrued costs and expenses	809,542	367,408
Income taxes payable	134,428	137,633
Excise Tax Payable	42,099
Deferred income tax		18,790
Promissory note to Related Party	3,842,015	2,767,015
Total current liabilities	4,838,084	3,290,846
Deferred underwriting commissions	4,840,931	4,840,931
Total Liabilities	9,679,015	8,131,777
Commitments and Contingencies (see Note 6)
Redeemable Common Stock:
Class A common stock subject to possible redemption, 1,251,156 and 1,627,158 Class A common stock shares at redemption value of $11.85 and $11.24 per share at December 31, 2023 and 2022, respectively	14,830,241	18,283,387
Stockholders’ Deficit:
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding
Accumulated deficit	(9,575,460)	(7,730,617)
Total Stockholders’ Deficit	(9,575,033)	(7,730,190)
Total Liabilities, Redeemable Common Stock and Stockholders’ Deficit	14,934,223	18,684,974
Class A Common Stock
Stockholders’ Deficit:
Common stock value	427	81
Class B Common Stock
Stockholders’ Deficit:
Common stock value		346
Related Party
Liabilities, Redeemable Common Stock and Stockholders’ Deficit
Due to related party	$ 10,000

XML

Balance Sheets (Parentheticals) - $ / shares	Dec. 31, 2023	Dec. 31, 2022
Preferred stock, par value (in Dollars per share)	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	1,000,000	1,000,000
Preferred stock, shares issued
Preferred stock, shares outstanding
Class A Common Stock
Common stock redemption shares	1,251,156	1,627,158
Common stock redemption per share (in Dollars per share)	$ 11.85	$ 11.24
Common stock, par value (in Dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	4,271,711	813,905
Common stock, shares outstanding	4,271,711	813,905
Class B Common Stock
Common stock, par value (in Dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized	10,000,000	10,000,000
Common stock, shares issued	1	3,457,807
Common stock, shares outstanding	1	3,457,807

XML

Statements of Operations - USD ($)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Formation and operating costs	$ 1,586,541	$ 1,291,228
Loss from operations	(1,586,541)	(1,291,228)
Other income:
Recovery of previously incurred costs		341,684
Interest earned on investments held in Trust Account	737,057	1,195,135
Interest earned on cash held in bank	116	69
Total other income	737,173	1,536,888
(Loss) Income before provision for income taxes	(849,368)	245,660
Provision for income taxes	(196,591)	(185,423)
Net (loss) income	$ (1,045,959)	$ 60,237
Redeemable Class A Common Stock
Other income:
Basic weighted average non-redeemable Class A and Class B common stock outstanding (in Shares)	1,457,184	12,204,321
Basic net (loss) income per share, non-redeemable Class A and Class B common stock (in Dollars per share)	$ (0.18)	$ 0
Non-redeemable Class A and Class B Common Stock
Other income:
Basic weighted average non-redeemable Class A and Class B common stock outstanding (in Shares)	4,271,712	3,457,807
Basic net (loss) income per share, non-redeemable Class A and Class B common stock (in Dollars per share)	$ (0.18)	$ 0

XML

Statements of Operations (Parentheticals) - $ / shares	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Redeemable Class A Common Stock
Diluted weighted average outstanding	1,457,184	12,204,321
Diluted net (loss) income per share	$ (0.18)	$ 0.00
Non-redeemable Class A and Class B Common Stock
Diluted weighted average outstanding	4,271,712	3,457,807
Diluted net (loss) income per share	$ (0.18)	$ 0.00

XML

Statements of Changes in Stockholders’ Deficit - USD ($)	Class A Common Stock	Class B Common Stock	Additional Paid-in Capital	Accumulated Deficit	Total
Balance at Dec. 31, 2021	$ 81	$ 346		$ (4,307,272)	$ (4,306,845)
Balance (in Shares) at Dec. 31, 2021	813,905	3,457,807
Accretion of Class A ordinary shares to redemption amount				(3,483,582)	(3,483,582)
Net (Income) loss				60,237	60,237
Balance at Dec. 31, 2022	$ 81	$ 346		(7,730,617)	(7,730,190)
Balance (in Shares) at Dec. 31, 2022	813,905	3,457,807
Conversion of Class B ordinary shares in Class A ordinary shares	$ 346	$ (346)
Conversion of Class B ordinary shares in Class A ordinary shares (in Shares)	3,457,806	(3,457,806)
Excise tax liability on share redemptions				(42,099)	(42,099)
Accretion of Class A ordinary shares to redemption amount				(756,785)	(756,785)
Net (Income) loss				(1,045,959)	(1,045,959)
Balance at Dec. 31, 2023	$ 427			$ (9,575,460)	$ (9,575,033)
Balance (in Shares) at Dec. 31, 2023	4,271,711	1

XML

Statements of Cash Flows - USD ($)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Cash flows from operating activities:
Net (loss) income	$ (1,045,959)	$ 60,237
Adjustments to reconcile net (loss) income to net cash used in operating activities:
Interest and dividends earned on investment in Trust	(737,173)	(1,195,135)
Amortization of prepaid expenses		46,557
Changes in operating assets and liabilities:
Accrued costs and expenses	442,135	(75,156)
Prepaid expenses	(17,488)	130,175
Due to related party	10,000	(2,903)
Income taxes payable	(3,205)	137,633
Deferred income tax	(18,790)	18,790
Net cash used in operating activities	(1,370,480)	(879,802)
Cash Flows from Investing Activities:
Investment of cash in Trust Account	(360,000)	(2,767,015)
Disposal of trust assets for redemptions	4,209,931	125,587,180
Withdrawal of trust funds to pay taxes	514,964	502,949
Net cash provided by Investing Activities	4,364,895	123,323,114
Cash Flows from Financing Activities:
Proceeds from sale of common stocks to initial stockholders	(4,209,931)	(125,587,180)
Proceeds from issuance of promissory note to related party	1,075,000	2,767,015
Net cash used in financing activities	(3,134,931)	(122,820,165)
Net change in cash	(140,516)	(376,853)
Cash, beginning of the period	303,449	680,302
Cash, end of the period	162,933	303,449
Supplemental disclosure of cash flow information:
Recognition of liability for excise tax on redemptions	42,099
Class A share accretion to redemption value in excess of purchase price	$ 756,785	$ 3,483,582

XML

Organization, Business Operation and Going Concern

12 Months Ended

Dec. 31, 2023

Organization, Business Operation and Going Concern [Abstract]

Organization, Business Operation and Going Concern

Note 1 — Organization, Business Operation and Going Concern

Clover Leaf Capital Corp. (the “Company”) a blank check company incorporated in the State of Delaware for the purpose of effecting a merger, stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses (“Business Combination”). The Company may pursue the initial Business Combination target in any industry or geographic location. The Company intended to focus its search for a target business engaged in the cannabis industry.

As of December 31, 2023, the Company had not commenced any operations. All activity for the period from February 25, 2021 (inception) through December 31, 2023 relates to the Company’s formation, the initial public offering (the “Initial Public Offering” or “IPO”) and the Company’s efforts to pursue an initial Business Combination described below. The Company will not generate any operating revenues until after the completion of its initial Business Combination at the earliest. The Company will generate non-operating income in the form of interest income on cash and cash equivalents from the proceeds derived from the IPO.

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

The Registration Statement for the Company’s IPO (the “IPO Registration Statement”) was declared effective on July 19, 2021. On July 22, 2021, the Company consummated its IPO of 13,831,230 units (the “Units” and, with respect to the Company’s Class A common stock, par value $0.0001 (“Class A Common Stock”) included in the Units being offered, the “Public Shares”) at $10.00 per Unit, which is discussed in Note 3 (“The Initial Public Offering”), and the sale of 675,593 Units which is discussed in Note 4 (“The Private Placement”), at a price of $10.00 per private placement unit (“Private Placement Units”), in a private placement (the “Private Placement”) to the Sponsor and Maxim Group LLC (the “Representative”), the representative of the underwriters, that closed simultaneously with the IPO. On July 22, 2021, the underwriters partially exercised their over-allotment option and purchased 1,331,230 of their full 1,875,000 Units available and subsequently forfeited the remainder of their option as of July 28, 2021. The Company’s executive officers and directors (“Management”) has broad discretion with respect to the specific application of the net proceeds of the IPO and sale of the Private Placement Units, although substantially all of the net proceeds are intended to be applied generally toward consummating an initial Business Combination.

Transaction costs amounted to $9,562,126 consisting of $2,766,246 of underwriting commissions, $4,840,931 of deferred underwriting commissions, $1,383,123 of the fair value of the 138,312 Class A Common Stock issued to the Representative and/or its designees upon the consummation of the IPO (“Representative Shares”), and $571,826 of other cash offering costs.

The Company’s initial Business Combination must be with one or more target businesses that together have a fair market value equal to at least 80% of the net balance in the Trust Account (as defined below) (excluding the amount of deferred underwriting discounts held and taxes payable on the income earned on the Trust Account) at the time of the signing an agreement to enter into an initial Business Combination. However, the Company will only complete an initial Business Combination if the post-initial Business Combination company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act of 1940, as amended (the “Investment Company Act”). There is no assurance that the Company will be able to successfully effect an initial Business Combination.

Following the closing of the IPO on July 22, 2021, $140,386,985 ($10.15 per Unit) from the net proceeds sold in the IPO, including the proceeds of the sale of the Private Placement Units, will be held in a trust account (“Trust Account”), with Continental Stock Transfer & Trust Company (“Continental”) acting as trustee, and until July 6, 2023 were invested only in U.S. government securities with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act which invest only in direct U.S. Department of the Treasury (“Treasury”) obligations. Except with respect to interest earned on the funds held in the Trust Account that may be released to pay the Company’s franchise and income taxes, if any, the funds held in the Trust Account will not be released from the Trust Account until the earliest to occur of: (1) the completion of an initial Business Combination; (2) the redemption of any Public Shares properly submitted in connection with a stockholder vote to amend the Company’s Amended and Restated Certificate of Incorporation, as amended and currently in effect (the “Amended and Restated Charter”) (A) to modify the substance or timing of the Company’s obligation to redeem 100% of the Public Shares if the Company does not complete an initial Business Combination within the applicable period or (B) with respect to any other provision relating to stockholders’ rights or pre-initial Business Combination activity; and (3) the redemption of the Public Shares if the Company has not completed an initial Business Combination within the applicable period, subject to applicable law.

The Company will provide its Public Stockholders with the opportunity to redeem all or a portion of their Public Shares upon the completion of the initial Business Combination either (1) in connection with a stockholder meeting called to approve the initial Business Combination or (2) by means of a tender offer. The decision as to whether the Company will seek stockholder approval of a proposed initial Business Combination or conduct a tender offer will be made by the Company, solely in its 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 require it to seek stockholder approval under applicable law or stock exchange listing requirement. The Company will provide its public stockholders with the opportunity to redeem all or a portion of their Public Shares upon the completion of the initial Business Combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account calculated as of two business days prior to the consummation of the initial Business Combination, including interest earned on the funds held in the Trust Account and not previously released to the Company to pay franchise and income taxes, divided by the number of then issued and outstanding Public Shares, subject to the limitations described herein.

The shares of Class A Common Stock and Class B common stock, par value $0.0001 per share (the “Class B Common Stock” and together with the Class A Common Stock, the “Common Stock”) subject to redemption will be recorded at a redemption value and classified as temporary equity upon the completion of the IPO, in accordance with the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” The Company will proceed with an initial Business Combination if the Company has net tangible assets of at least $5,000,001 upon such consummation of an initial Business Combination and, if the Company seeks stockholder approval, a majority of the issued and outstanding shares voted are voted in favor of the initial Business Combination. 

The Company will have only until July 22, 2024 to complete the initial Business Combination (the “Combination Period”). Pursuant to the terms of the Company’s Amended and Restated Charter and the Investment Management Trust Agreement, dated July 19, 2021 entered into between the Company and Continental, as trustee of the Trust Account, in order to extend the time available for the Company to consummate its initial Business Combination, the Sponsor or its affiliates or designees, upon five days’ advance notice prior to the applicable deadline, must deposit into the Trust Account for each additional three-month period, $1,383,123 ($0.10 per share on or prior to the date of the applicable deadline) for each additional three-month period. Any such payments would be made in the form of a loan. Any such loans will be non-interest bearing and payable upon the consummation of an initial Business Combination. If the Company completes an initial Business Combination, it will, at the option of the Sponsor, repay such loaned amounts out of the proceeds of the Trust Account released to the Company or convert a portion or all of the total loan amount into Units at a price of $10.00 per Unit.

On July 18, 2022, the Company issued a promissory note (the “July 2022 Extension Note”) in the principal amount of $1,383,123 to the Sponsor in connection with the extension of the Combination Period from July 22, 2022 to October 22, 2022 (the “July 2022 Extension”).

On October 19, 2022, the Company held a special meeting of stockholders (the “2022 Special Meeting”). At the 2022 Special Meeting, the Company’s stockholders approved an amendment to the Company’s Amended and Restated Charter to extend the date by which the Company must consummate its initial Business Combination from October 22, 2022 to July 22, 2023, or such earlier date as determined by the Company’s board of directors (the “Board”) (the “October 2022 Extension”). In connection with the 2022 Special Meeting, stockholders holding 12,204,072 shares of the Company’s Class A Common Stock issued in the Company’s IPO exercised their right to redeem such shares for a pro rata portion of the funds in the Company’s Trust Account. As a result, approximately $125,587,180.34 (approximately $10.29 per share) was removed from the Company’s Trust Account to pay such holders.

On July 19, 2023, the Company held a special meeting of stockholders in lieu of an annual meeting of stockholders (the “2023 Special Meeting”). At the 2023 Special Meeting, the Company’s stockholders approved an amendment (the “2023 Extension Amendment”) to the Company’s Amended and Restated Charter to extend the date by which the Company must consummate its initial Business Combination from July 22, 2023 to January 22, 2024, or such earlier date as determined by the Company’s Board (the “2023 Extension”). On July 20, 2023, the Company filed the 2023 Extension Amendment with the Secretary of State of the State of Delaware.

In connection with the 2023 Special Meeting, stockholders holding 376,002 shares of the Company’s Class A Common Stock issued in the Company’s IPO exercised their right to redeem such shares for a pro rata portion of the funds in the Company’s Trust Account. As a result, approximately $4,209,931.03 (approximately $11.20 per share after removal of interest to pay taxes) was removed from the Company’s Trust Account to pay such holders, resulting in approximately $14,008,650.13 remaining in the Trust Account.

In connection with the 2023 Extension, the Company will cause up to $360,000 to be deposited into the Trust Account in installments of $60,000 per month, which equates to approximately $0.048 per remaining Public Share, for each calendar month or portion thereof (commencing on July 22, 2023 and on the 22nd of each subsequent month until January 22, 2024), that the Company needs to complete an initial Business Combination, and such amount will be distributed either to: (i) all of the holders of Public Shares upon the Company’s liquidation or (ii) holders of Public Shares who elect to have their shares redeemed in connection with the consummation of the initial Business Combination. As of July 21, 2023, an aggregate of $60,000 had been deposited into the Trust Account to support the 2023 Extension. The Company deposited $360,000 in the Trust Account through December 31, 2023.

On August 31, 2023, the Company received a deficiency letter from the Listing Qualifications Department (the “Staff”) of The Nasdaq Stock Market (“Nasdaq”) notifying the Company that the Company no longer meets the minimum 300 public holders requirement for The Nasdaq Capital Market pursuant to Nasdaq Listing Rule 5550(a)(3) (the “Minimum Public Holders Requirement”). The notification received has no immediate effect on the Company’s Nasdaq listing. On October 16, 2023, the Company submitted to Nasdaq a plan to regain compliance with the Minimum Public Holders Requirement. On October 25, 2023, in response to such compliance plan, the Staff granted the Company an extension of time to regain compliance with the Minimum Public Holders Requirement. Pursuant to the extension, on or before February 27, 2024, the Company must have filed with Nasdaq documentation that demonstrated that the Company’s Common Stock has a minimum of 300 public holders. On February 27, 2024, the Company was not able to demonstrate compliance with the Minimum Public Holders Requirement, and as such, on March 1, 2024, the Company received a notice from the Staff of Nasdaq (the “Delisting Notice”) informing the Company that its securities may be subject to suspension and delisting pending the outcome of a hearing before the Nasdaq Hearings Panel (the “Panel”), which the Company requested on March 8, 2024.

On October 4, 2023, the Company issued a press release announcing that the Company had submitted to EDGAR, the SEC’s online portal, a Registration Statement on Form S-4, which includes a preliminary proxy statement/prospectus, with respect to the Company’s proposed initial Business Combination (the “Kustom Entertainment Business Combination”) with Kustom Entertainment, Inc., a Nevada corporation (“Kustom Entertainment”).

If the Company has not completed the initial Business Combination within the Combination Period, the Company will: (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to the Company to pay franchise and income taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then issued and outstanding Public Shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any); and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining stockholders and the Board, liquidate and dissolve, subject in each case to the Company’s obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law.

The Sponsor, officers and directors have entered into a letter agreement with the Company, pursuant to which they have agreed to waive: (i) their redemption rights with respect to any Founder Shares (as defined below) (see Note 5), Private Placement Shares and Public Shares held by them, as applicable, in connection with the completion of the initial Business Combination; (ii) their redemption rights with respect to any Founder Shares and Public Shares held by them in connection with a stockholder vote to amend the Company’s Amended and Restated Charter (a) to modify the substance or timing of the Company’s obligation to redeem 100% of the Public Shares if the Company does not complete the initial Business Combination within the Combination Period or (b) with respect to any other provision relating to stockholders’ rights or pre-initial Business Combination activity; and (iii) their rights to liquidating distributions from the Trust Account with respect to any Founder Shares they hold if the Company fails to complete the initial Business Combination within the Combination Period (although they will be entitled to liquidating distributions from the Trust Account with respect to any Public Shares they hold if the Company fails to complete the initial Business Combination within the prescribed time. 

The Sponsor has agreed that it will be liable to the Company if and to the extent any claims by a third party (other than the Company’s independent registered public accounting firm) for services rendered or products sold to the Company, or a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below (i) $10.15 per Public Share or (ii) the actual amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account, if less than $10.15 per share due to reductions in the value of the trust assets, less taxes payable, provided that such liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights to the monies held in the Trust Account (whether or not such waiver is enforceable), nor will it apply to any claims under the Company’s indemnity of the underwriters of the IPO against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). The Company has not independently verified whether the Sponsor has sufficient funds to satisfy its indemnity obligations and believes that the Sponsor’s only assets are securities of the Company and, therefore, the Sponsor may not be able to satisfy those obligations. The Company has not asked the Sponsor to reserve for such obligations.

Franchise and Income Tax Withdrawals from Trust Account

Since completion of its IPO on July 19, 2021, and through December 31, 2023, the Company withdrew $1,017,913 from the Trust Account to pay its liabilities related to the federal and Floria state and Delaware franchise taxes. Through December 31, 2023, the Company remitted $777,312 to the respective tax authorities. Additionally, as of December 31, 2023, the Company had accrued but unpaid income tax liability of $134,428 and was in a credit position of $75,143 for Delaware franchise tax, which resulted in remaining excess of funds withdrawn from the Trust Account, but not remitted to the government authorities of $181,316. As of December 31, 2023, the Company had $162,933 in its operating account and inadvertently used $77,668 of the funds withdrawn from the Trust Account for payment of taxes for payment of other operating expenses not related to taxes. The Company continues to incur further tax liabilities and intends to cover such liabilities from the funds in its operating account and, if necessary, from the proceeds from the promissory note to Sponsor, without recurring to additional withdrawals from the Trust Account, until the excess of the funds withdrawn from the Trust Account over the amounts remitted to the government authorities is cured.

Going Concern

As of December 31, 2023 and 2022, the Company had $162,933 and $303,449 in cash, respectively, and working capital deficit of $4,493,502 and $2,882,521 (net of Delaware franchise and income taxes), respectively.

Prior to the completion of the IPO, the Company’s liquidity needs had been satisfied through a payment from the Sponsor of $25,000 (see Note 5) for the Founder Shares to cover certain offering costs and the loan under an unsecured promissory note from the Sponsor of $300,000 (see Note 5).

On July 24, 2023, the Company issued a promissory note (the “2023 Working Capital Note”) in the principal amount of up to $300,000 to the Sponsor. The 2023 Working Capital Note was issued in connection with advances the Sponsor may make in the future to the Company for working capital expenses. The loan is non-interest bearing and payable upon the earlier of (i) completion of the initial Business Combination or (ii) the date the winding up of the Company is effective.

At various dates in the fourth quarter of 2023, the Sponsor advanced to the Company $415,000 for the Company’s working capital needs. On January 22, 2024, the Company issued the a promissory note (the “2024 Working Capital Note”) in the principal amount of up to $1,000,000 to the Sponsor. The 2024 Working Capital Note was issued in connection with advances the Sponsor may make in the future to the Company for working capital expenses. The loan is non-interest bearing and payable upon the earlier of (i) completion of the initial Business Combination or (ii) the date the winding up of the Company is effective. The funds advanced in the fourth quarter of 2023 were considered advanced under terms of this 2024 Working Capital Note and were outstanding as of December 31, 2023.

In addition, in order to finance transaction costs in connection with an Initial Business Combination, the Company’s Sponsor or an affiliate of the Sponsor or certain of the Company’s officers and directors may, but are not obligated to, provide the Company Working Capital Loans, as defined below (see Note 5). $715,000 and $0 were outstanding under Working Capital Loans as of December 31, 2023, and 2022, respectively.

Until the consummation of an initial Business Combination, the Company will be using the funds not held in the Trust Account for identifying and evaluating prospective acquisition candidates, performing due diligence on prospective target businesses, paying for travel expenditures, selecting the target business to acquire, and structuring, negotiating, and consummating the initial Business Combination. The Company will need to raise additional capital through loans or additional investments from its Sponsor, stockholders, officers, directors, or third parties. The Company’s Sponsor, officers and directors may, but are not obligated to, loan the Company funds from time to time or at any time, in whatever amount they deem reasonable in their sole discretion, to meet the Company’s working capital needs. Accordingly, the Company may not be able to obtain additional financing. If the Company is unable to raise additional capital, it may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing operations, suspending the pursuit of a potential transaction, and reducing overhead expenses.

The Company cannot provide any assurance that new financing will be available to it on commercially acceptable terms, if at all. In connection with the Company’s assessment of going concern considerations in accordance with FASB’s Accounting Standards Update (“ASU”) Topic 2014-15, “Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern.” The Company has until July 22, 2024 to consummate an initial Business Combination, unless otherwise extended. It is uncertain that the Company will be able to consummate an initial Business Combination by this time. If an initial Business Combination is not consummated by this date, there will be a mandatory liquidation and subsequent dissolution of the Company. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. 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, and also do not include any adjustments that might result should an initial Business Combination not occur.

Merger Agreement

On June 1, 2023, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with CL Merger Sub, Inc., a Nevada corporation and a wholly-owned subsidiary of the Company (“Merger Sub”), the Sponsor, in the capacity as the representative from and after the Effective Time (as defined in the Merger Agreement) for the stockholders of the Company (other than the Kustom Entertainment Stockholder (as defined below) as of immediately prior to the Effective Time and its successors and assignees) in accordance with the terms and conditions of the Merger Agreement, Kustom Entertainment, which has a focus and mission to own and produce events, festivals, and entertainment alongside its evolving primary and secondary ticketing technologies, and Digital Ally, Inc., a Nevada corporation and the sole stockholder of Kustom Entertainment (the “Kustom Entertainment Stockholder”).

Pursuant to the Merger Agreement, subject to the terms and conditions set forth therein upon the consummation of the transactions contemplated by the Merger Agreement (the “Closing”), Merger Sub will merge with and into Kustom Entertainment (the “Merger” and, together with the other transactions contemplated by the Merger Agreement, the “Merger Transactions”), with Kustom Entertainment continuing as the surviving corporation in the Merger and a wholly-owned subsidiary of the Company. In the Merger, all of the issued and outstanding capital stock of Kustom Entertainment immediately prior to the Effective Time shall no longer be outstanding and shall automatically be cancelled and shall cease to exist, in exchange for the right for the Kustom Entertainment Stockholder to receive the Merger Consideration (as defined herein). Upon consummation of the Transactions, the Company will change its name to “Kustom Entertainment, Inc.”

The aggregate merger consideration to be paid pursuant to the Merger Agreement to the Kustom Entertainment Stockholder as of immediately prior to the Effective Time will be an amount equal to (the “Merger Consideration”) (i) $125 million, minus (ii) the estimated consolidated indebtedness of Kustom Entertainment as of the Closing (“Closing Indebtedness”). The Merger Consideration to be paid to the Kustom Entertainment Stockholder will be paid solely by the delivery of new shares of the Company’s Class A Common Stock, each valued at $11.14 per share. The Closing Indebtedness (and the resulting Merger Consideration) is based solely on estimates determined shortly prior to the Closing and is not subject to any post-Closing true-up or adjustment.

Risks and Uncertainties

Management continues to evaluate the impact of the COVID-19 pandemic and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s financial position, results of its operations, and/or search for a target company, the specific impact is not readily determinable as of the date of these financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Inflation Reduction Act of 2022

On August 16, 2022, the Inflation Reduction Act of 2022 (the “IR Act”) was signed into federal law. The IR Act provides for, among other things, a new U.S. federal 1% excise tax on certain repurchases of stock by publicly traded U.S. domestic corporations and certain U.S. domestic subsidiaries of publicly traded foreign corporations occurring on or after January 1, 2023. The excise tax is imposed on the repurchasing corporation itself, not its shareholders from which shares are repurchased. The amount of the excise tax is generally 1% of the fair market value of the shares repurchased at the time of the repurchase. However, for purposes of calculating the excise tax, repurchasing corporations are permitted to net the fair market value of certain new stock issuances against the fair market value of stock repurchases during the same taxable year. In addition, certain exceptions apply to the excise tax. The Treasury has been given authority to provide regulations and other guidance to carry out and prevent the abuse or avoidance of the excise tax.

Any redemption or other repurchase that occurs after December 31, 2022, in connection with an initial Business Combination, a vote by the stockholders of the Company to extend the period of time to complete the initial Business Combination (“Extension Vote”) or otherwise, may be subject to the excise tax. Whether and to what extent the Company would be subject to the excise tax in connection with an initial Business Combination, Extension Vote or otherwise would depend on a number of factors, including (i) the fair market value of the redemptions and repurchases in connection with the initial Business Combination, extension or otherwise, (ii) the structure of an initial Business Combination, (iii) the nature and amount of any “PIPE” or other equity issuances in connection with an initial Business Combination (or otherwise issued not in connection with an initial Business Combination but issued within the same taxable year of an initial Business Combination), and (iv) the content of regulations and other guidance from the Treasury. In addition, because the excise tax would be payable by the Company and not by the redeeming holder, the mechanics of any required payment of the excise tax have not been determined. The foregoing could cause a reduction in the cash available on hand to complete an initial Business Combination and in the Company’s ability to complete an initial Business Combination.

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Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2023

Summary of Significant Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Note 2 — Summary of Significant Accounting Policies

Basis of Presentation

The accompanying financial statements of the Company are presented in U.S. dollars in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”).

Emerging Growth Company Status

The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012, (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

Use of Estimates

The preparation of these financial statements in conformity with GAAP requires Management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. As of December 31, 2023 and 2022, the Company had $162,933 and $303,449 in cash, respectively, and no cash equivalents.

Investments Held in Trust Account

As of December 31, 2023 and 2022, the Company had $14,648,926 and $18,276,649 in investments held in the Trust Account, respectively.

As of December 31, 2023, the Company’s investments held in the Trust Account are held in an interest-bearing demand deposit account and are classified as trading securities. Trading securities are presented on the balance sheets at fair value at the end of each reporting period. Gains and losses resulting from the change in fair value of investments held in Trust Account are included in interest earned on marketable securities held in Trust Account in the accompanying statements of operations. The estimated fair values of investments held in Trust Account are determined using available market information.

Prior to the current reporting period, the Company classified its Treasury securities as held-to-maturity in accordance with FASB ASC Topic 320 “Investments - Debt and Equity Securities.” Held-to-maturity securities are those securities which the Company has the ability and intent to hold until maturity. Held-to-maturity Treasury securities were recorded at amortized cost and adjusted for the amortization or accretion of premiums or discounts.

A decline in the market value of held-to-maturity securities below cost that is deemed to be other than temporary, results in an impairment that reduces the carrying costs to such securities’ fair value. The impairment is charged to earnings and a new cost basis for the security is established. To determine whether an impairment is other than temporary, the Company considers whether it has the ability and intent to hold the investment until a market price recovery and considers whether evidence indicating the cost of the investment is recoverable outweighs evidence to the contrary. Evidence considered in this assessment includes the reasons for the impairment, the severity and the duration of the impairment, changes in value subsequent to year-end, forecasted performance of the investee, and the general market condition in the geographic area or industry in which the investee operates.

Premiums and discounts are amortized or accreted over the life of the related held-to-maturity security as an adjustment to yield using the effective-interest method. Such amortization and accretion are included in the “Interest and dividends earned on investment held in trust” line item in the statements of operations. Interest income is recognized when earned.

The carrying value, excluding gross unrealized holding loss and fair value of held-to-maturity securities on December 31, 2023 and 2022 are as follows: 

	Carrying Value as of December 31, 2023		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value as of December 31, 2023
Money Market Funds		14,648,926		—		—		14,648,926
	$	14,648,926	$	—	$	—	$	14,648,926

	Carrying Value as of December 31, 2022		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value as of December 31, 2022
U.S. Treasury Securities (matured May 25, 2023)		18,276,649		—		217		18,276,866
	$	18,276,649	$	—	$	217	$	18,276,866

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which, at times, may exceed the federal depository insurance coverage of $250,000. The Company has not experienced losses on these accounts, and Management believes the Company is not exposed to significant risks on such accounts.

Offering Costs Associated with Initial Public Offering

The Company complies with the requirements of the FASB ASC Topic 340-10-S99-1 and SEC Staff Accounting Bulletin Topic 5A—“Expenses of Offering”. Offering costs consist of legal, accounting, underwriting and other costs incurred through the consummation of the IPO. Offering costs amounted to $9,562,126 and were charged to permanent and temporary equity, ratably with the redeemable and non-redeemable shares they are allocated to, upon the completion of the IPO.

Fair Value of Financial Instruments

The fair value of the Company’s assets and liabilities, which qualify as financial instruments under FASB ASC Topic 820, “Fair Value Measurements and Disclosures” (“ASC 820”) approximates the carrying amounts represented in the balance sheet, primarily due to its short-term nature.

The Company follows the guidance in ASC 820 for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period and non-financial assets and liabilities that are re-measured and reported at fair value at least annually.

The fair value of the Company’s financial assets and liabilities reflects Management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:

● Level 1 – Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. Valuation adjustments and block discounts are not being applied. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these securities does not entail a significant degree of judgment.

● Level 2 – Valuations based on (i) quoted prices in active markets for similar assets and liabilities, (ii) quoted prices in markets that are not active for identical or similar assets, (iii) inputs other than quoted prices for the assets or liabilities, or (iv) inputs that are derived principally from or corroborated by market through correlation or other means.

● Level 3 – Valuations based on inputs that are unobservable and significant to the overall fair value measurement.

Derivative Financial Instruments

The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with FASB ASC Topic 815, “Derivatives and Hedging”. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value on the grant date and is then re-valued at each reporting date, with changes in the fair value reported in the statement of operations. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date.

Class A Common Stock Subject to Possible Redemption

All of the 13,831,230 Class A Common Stock sold as part of the Units in the IPO contain a redemption feature that allows for the redemption of such Public Shares in connection with the Company’s liquidation, if there is a stockholder vote or tender offer in connection with the initial Business Combination and in connection with certain amendments to the Company’s Amended and Restated Charter. In accordance with the SEC and its staff’s guidance on redeemable equity instruments, which has been codified in FASB ASC Topic 480-10-S99, redemption provisions not solely within the control of the Company require Common Stock subject to redemption to be classified outside of permanent equity. Given that the Class A Common Stock was issued with other freestanding instruments (i.e., equity rights), the initial carrying value of Class A Common Stock classified as temporary equity is the allocated proceeds based on the guidance in FASB ASC Topic 470-20, “Debt—Debt with Conversion and Other Options.”

If it is probable that the equity instrument will become redeemable, the Company has the option to either accrete changes in the redemption value over the period from the date of issuance (or from the date that it becomes probable that the instrument will become redeemable, if later) to the earliest redemption date of the instrument or to recognize changes in the redemption value immediately as they occur and adjust the carrying amount of the instrument to equal the redemption value at the end of each reporting period. The Company has elected to recognize the changes immediately.

Immediately upon the closing of the IPO, the Company recognized the accretion from initial book value to redemption amount, which approximates fair value. The change in the carrying value of Class A Common Stock subject to possible redemption resulted in charges against additional paid-in capital (to the extent available) and accumulated deficit and Class A Common Stock.

As of December 31, 2023 and 2022, the Class A Common Stock reflected on the balance sheet is reconciled in the following table:

Gross Proceeds	$	138,312,300
Proceeds allocated to equity rights		(760,718	)
Less:
Issuance costs related to Class A common stock subject to possible redemption		(9,509,534	)
Plus:
Remeasurement of carrying value to redemption value		12,344,937
Contingently redeemable Class A common stock subject to possible redemption (December 31, 2021)		140,386,985
Less:
Redemptions of Class A common stock		(125,587,180	)
Plus:
Remeasurement of carrying value to redemption value		3,483,582
Contingently redeemable Class A common stock subject to possible redemption (December 31, 2022)		18,283,387
Plus:
Remeasurement of carrying value to redemption value		756,785
Less:
Redemptions of Class A common stock		(4,209,931	)
Contingently redeemable Class A common stock subject to possible redemption (December 31, 2023)	$	14,830,241

Net (Loss) Income Per Common Stock

The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share.” Net (loss) income per share is computed by dividing net (loss) income by the weighted average number of shares of Common Stock outstanding during the period. The Company has two classes of shares, redeemable Common Stock and non-redeemable Common Stock. The Company’s redeemable Common Stock is comprised of Class A shares sold in the IPO. The Company’s non-redeemable shares are comprised of Class B shares purchased by the Sponsor as well as Class A shares sold in the Private Placement and Representative Shares. Earnings and losses are shared pro rata between the two classes of shares. The Company’s statement of operations applies the two-class method in calculating net (loss) income per share. Basic and diluted net (loss) income per common share for redeemable Common Stock and non-redeemable Common Stock is calculated by dividing net (loss) income, allocated proportionally to each class of Common Stock, attributable to the Company by the weighted average number of shares of redeemable and non-redeemable stock outstanding.

The calculation of diluted (loss) income per share of Common Stock does not consider the effect of the rights issued in connection with the IPO since exercise of the rights is contingent upon the occurrence of future events and the inclusion of such rights would be anti-dilutive. Accretion of the carrying value of Class A Common Stock to redemption value is excluded from net (loss) income per redeemable share because the redemption value approximates fair value. As a result, diluted net (loss) income per share is the same as basic net (loss) income per share for the periods presented.

The basic and diluted (loss) income per common stock is calculated as follows:

	For the Year Ended December 31,
	2023			2022
Common stock subject to possible redemption
Numerator:
Net (loss) income allocable to redeemable Class A common stock	$	(266,047	)	$	46,938
Denominator:
Weighted Average redeemable Class A common stock, basic and diluted		1,457,184			12,204,321
Basic and Diluted net (loss) income per share, redeemable Class A common stock	$	(0.18	)	$	0.00
Non-redeemable common stock
Numerator:
Net (loss) income allocable to non-redeemable Class A and Class B common stock	$	(779,912	)	$	13,299
Denominator:
Weighted Average non-redeemable Class A and Class B common stock, basic and diluted		4,271,712			3,457,807
Basic and diluted net (loss) income per share, non-redeemable Class A and Class B common stock	$	(0.18	)	$	0.00

Income Taxes

The Company accounts for income taxes under FASB ASC Topic 740, “Income Taxes” (“ASC 740”). ASC 740 requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statement and tax basis of assets and liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carry forwards. ASC 740 additionally requires a valuation allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not be realized.

ASC 740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim period, disclosure and transition.

The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of December 31, 2023 and 2022. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position.

The Company has identified the United States as its only “major” tax jurisdiction.

The Company is subject to income tax examinations by major taxing authorities since inception. These examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions and compliance with federal and state tax laws. The Company’s Management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months. 

Recent Accounting Pronouncements

In August 2020, the FASB issued ASU Topic 2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” (“ASU 2020-06”), which simplifies accounting for convertible instruments by removing major separation models required under current GAAP. ASU 2020-06 also removes certain settlement conditions that are required for equity-linked contracts to qualify for the derivative scope exception, and it simplifies the diluted earnings per share calculation in certain areas. ASU 2020-06 is effective January 1, 2024 and should be applied on a full or modified retrospective basis, with early adoption permitted beginning on January 1, 2021. The Company is reviewing what impact, if any, adoption will have on the Company’s financial position, results of operations or cash flows.

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” (“ASU 2023-09”), which requires disclosure of incremental income tax information within the rate reconciliation and expanded disclosures of income taxes paid, among other disclosure requirements. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company’s Management does not believe the adoption of ASU 2023-09 will have a material impact on its consolidated financial statements and disclosures.

Management does not believe that any other recently issued, but not effective, accounting standards, if currently adopted, would have a material effect on the Company’s financial statements.

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Initial Public Offering

12 Months Ended

Dec. 31, 2023

Initial Public Offering [Abstract]

Initial Public Offering

Note 3 — Initial Public Offering

On July 22, 2021, the Company consummated its IPO of 13,831,230 Units at a purchase price of $10.00 per Unit, generating gross proceeds of $138,312,300. This included 1,331,230 Units due to a partial over-allotment exercised by the underwriters. The underwriters forfeited their remaining over-allotment option on July 28, 2021. Each Unit consists of (i) one share of Class A Common Stock and (ii) one right to receive one-eighth (1/8) of a share of Class A Common Stock upon the consummation of the initial Business Combination (the “Rights”).

The Company paid an underwriting fee at the closing of the IPO of $2,766,246. An additional fee of $4,840,931 was deferred and will become payable to the underwriters from the amounts held in the Trust Account solely in the event the Company completes its initial Business Combination.

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Private Placement

12 Months Ended

Dec. 31, 2023

Private Placement [Abstract]

Private Placement

 
Note 4 — Private Placement

Simultaneously with the closing of the IPO and the sale of the Units, the Sponsor purchased an aggregate of 571,859 Private Placement Units at a price of $10.00 per Private Placement Unit ($5,718,590 in the aggregate) and the Representative purchased an aggregate of 103,734 Private Placement Units at a price of $10.00 per Private Placement Unit ($1,037,340 in the aggregate) in a Private Placement. Each Private Placement Unit is identical to the Units offered in the IPO except as described below.

The Private Placement Units and their component securities will not be transferable, assignable or salable until after the completion of the initial Business Combination except to permitted transferees. There will be no redemption rights or liquidating distributions from the Trust Account with respect to the Founder Shares, Private Placement Shares or the Private Placement Rights, which will expire worthless if the Company does not consummate an initial Business Combination within the Combination Period.

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Related Party Transactions

12 Months Ended

Dec. 31, 2023

Related Party Transactions [Abstract]

Related Party Transactions

Note 5 — Related Party Transactions

Founder Shares

In March 2021, the Sponsor paid $25,000 in consideration for 3,593,750 shares of Class B Common Stock (the “Founder Shares”). The number of Founder Shares issued was determined based on the expectation that the Founder Shares would represent 20% of the outstanding shares after the IPO (excluding shares included in the Private Placement Units or the shares of Class A Common Stock issuable to the Representative). Up to 468,750 of the Founder Shares were subject to forfeiture depending on the extent to which the underwriters’ over-allotment is exercised. On July 22, 2021, the underwriters partially exercised their over-allotment option and purchased an additional 1,331,230 of their full 1,875,000 option. The underwriters forfeited the remainder of their over-allotment option as of July 28, 2021, resulting in aggregate Founders Shares outstanding of 3,457,807.

On April 8, 2021, the Sponsor transferred a membership interest (the “Interest”) to three of the Company’s officers and the three independent directors of 75,000 Founder Shares. The Interest relates solely to the number of Founder Shares laid out in the Company’s officers’ and independent directors’ respective agreements. The transferred shares shall vest upon the Company consummating an initial Business Combination (the “Vesting Date”). If prior to the Vesting Date, any of the grantees ceases to remain in their role, either voluntarily or for a cause (a “Separation Event”), 100% of the shares granted will be automatically and immediately transferred back to the Sponsor upon such Separation Event. Since the stock grants to both directors and to the officers contain the performance condition of consummating an initial Business Combination, the Company has determined the appropriate accounting treatment is to defer recognition of the compensation costs until the consummation of an initial Business Combination in accordance with FASB ASC Topic 718, “Compensation—Stock Compensation.”

The Company’s Sponsor and any other holders of Founder Shares (or their permitted transferees) prior to our IPO (“Initial Stockholders”), including the Interests transferred to the Company’s officers and directors, have agreed not to transfer, assign or sell any of their Founder Shares until the earlier to occur of: (i) six months after the completion of the initial Business Combination; and (ii) subsequent to the initial Business Combination (a) if the closing price of the shares of the Class A Common Stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing after the initial Business Combination or (b) the date on which the Company completes a liquidation, merger, capital stock exchange, reorganization or other similar transaction that results in all of the public stockholders having the right to exchange their shares of Common Stock for cash, securities or other property (except with respect to permitted transferees). Any permitted transferees would be subject to the same restrictions and other agreements of the Company’s Initial Stockholders with respect to any Founder Shares (the “Lock-Up”).

On July 20, 2023, the Company issued an aggregate of 3,457,806 shares of its Class A Common Stock to the Sponsor upon the conversion (the “Founder Share Conversion”) of an equal number of shares of Class B Common Stock of the Company held by the Sponsor. The 3,457,806 shares of Class A Common Stock issued in connection with the Founder Share Conversion are subject to the same restrictions as applied to the Class B Common Stock before the Founder Share Conversion, including, among other things, certain transfer restrictions, waiver of redemption rights and the obligation to vote in favor of an Initial Business Combination as described in the prospectus for the Company’s IPO. Following the Founder Share Conversion, there were 5,522,867 shares of Class A Common Stock issued and outstanding and 1 share of Class B Common Stock issued and outstanding. As a result of the Founder Share Conversion, the Sponsor holds approximately 73.0% of the Company’s issued and outstanding Class A Common Stock.

Promissory Note — Related Party

On March 4, 2021, the Sponsor agreed to loan the Company up to $300,000 to be used for a portion of the expenses of the IPO, under a promissory note. These loans are non-interest bearing, unsecured and due at the earlier of September 30, 2021, or the closing of the IPO. These loans were repaid upon the closing of the IPO out of the offering proceeds that had been allocated to the payment of offering expenses. As of December 31, 2023 and 2022, there is no amount outstanding under the promissory note.

On July 18, 2022, the Company issued the July 2022 Extension Note in the principal amount of $1,383,123 to the Sponsor in connection with the July 2022 Extension. The July 2022 Extension Note bears no interest and is due and payable upon the earlier to occur of (i) the date on which the Company’s initial Business Combination is consummated and (ii) the liquidation of the Company on or before October 22, 2022 or such liquidation date as may be approved by the Company’s stockholders. At the election of the Sponsor, up to $1,383,123 of the unpaid principal amount of the July 2022 Extension Note may be converted into Units of the Company (the “Conversion Units”) with the total Conversion Units so issued shall be equal to: (i) the portion of the principal amount of the July 2022 Extension Note being converted divided by (ii) the conversion price of ten dollars ($10.00), rounded up to the nearest whole number of Conversion Units. The conversion feature included in the July 2022 Extension Note is closely related to the debt instrument itself and is not bifurcated from the host instrument. As a result, all debt proceeds received have been allocated to debt liability. As of December 31, 2023, and 2022, there was $1,383,892 outstanding under the July 2022 Extension Note.

On October 19, 2022, in connection with the October 2022 Extension, the Company issued a further promissory note (the “October 2022 Extension Note”) in the principal amount of $1,383,123 to the Sponsor pursuant to which the Sponsor loaned to the Company $1,383,123 to deposit into the Company’s Trust Account for each share of the Company’s Class A Common Stock that was not redeemed in connection with the October 2022 Extension. The October 2022 Extension Note bears no interest and is repayable in full upon the earlier of (i) the date of the consummation of the Company’s initial Business Combination, or (ii) the date of the liquidation of the Company. As of December 31, 2023, and 2022, there was $1,383,123 outstanding under the October 2022 Extension Note.

On July 21, 2023, the Company issued a promissory note (the “2023 Extension Note”) in the aggregate principal amount of up to $360,000 to the Sponsor, pursuant to which the Sponsor agreed to loan to the Company up to $360,000 to deposit into Trust Account for the Company’s Class A Common Stock, held by the Company’s public stockholders that were not redeemed in connection with the 2023 Extension Amendment. On July 21, 2023, the Company deposited $60,000 into the Trust Account, with such amount being treated as the first draw under the 2023 Extension Note, and the Company will continue to deposit $60,000 into the Trust Account for each additional calendar month (promptly following the 22^nd of each calendar month), or portion thereof, that is needed by the Company to complete an initial Business Combination until January 22, 2024, and such amount will be distributed either to: (i) all of the holders of Public Shares upon the Company’s liquidation or (ii) holders of Public Shares who elect to have their shares redeemed in connection with the consummation of the initial Business Combination. The 2023 Extension Note bears no interest and is repayable in full upon the earlier of (i) the date of the consummation of the Company’s initial Business Combination or (ii) the date of the liquidation of the Company. The Sponsor deposited $360,000 in the Trust Account under the 2023 Extension Note, which was outstanding as of December 31, 2023.

On July 21, 2023, the Company issued the 2023 Working Capital Note in the principal amount of up to $300,000 to the Sponsor. The 2023 Working Capital Note was issued in connection with advances the Sponsor may make in the future to the Company for working capital expenses. The loan is non-interest bearing and payable upon the earlier of (i) completion of the initial Business Combination or (ii) the date the winding up of the Company is effective. The Company drew $300,000 under the 2023 Working Capital Note which was outstanding as of December 31, 2023.

At various dates in the fourth quarter of 2023, the Sponsor advanced to the Company $415,000 for the working capital needs. On January 22, 2024, the Company issued the 2024 Working Capital Note in the principal amount of up to $1,000,000 to the Sponsor. The 2024 Working Capital Note was issued in connection with advances the Sponsor may make in the future to the Company for working capital expenses. The loan is non-interest bearing and payable upon the earlier of (i) completion of the initial Business Combination or (ii) the date the winding up of the Company is effective. The funds advanced in the fourth quarter of 2023 were considered advanced under terms of this note and were outstanding as of December 31, 2023.

Related Party Loans

In order to fund working capital deficiencies or finance transaction costs in connection with an intended initial Business Combination, the Sponsor, an affiliate of the Sponsor or certain of the Company’s officers and directors may, but is not obligated to, loan the Company funds as may be required (the “Working Capital Loans”). If the Company completes an initial Business Combination, the Company will repay such loaned amounts out of the proceeds of the Trust Account released to the Company. Otherwise, such Working Capital Loans would be repaid only out of funds held outside the Trust Account. In the event that the initial Business Combination does not close, the Company may use a portion of the working capital held outside the Trust Account to repay such loaned amounts, but no proceeds from the Trust Account would be used to repay such loaned amounts. Up to $1,500,000 of such Working Capital Loans may be convertible into Private Placement-equivalent Units at a price of $10.00 per Unit (which, for example, would result in the holders being issued 150,000 Units if $1,500,000 of notes were so converted), at the option of the lender. The Units would be identical to the Private Placement Units issued to the Sponsor. $715,000 and $0 were outstanding under such Working Capital Loans as of December 31, 2023 and 2022, respectively.

Administrative Support Agreement

Commencing on the date of the IPO, the Company has agreed to pay an affiliate of the Sponsor for office space, secretarial, and administrative services provided to members of the Management Team, in the amount of $10,000 per month. The administrative support agreement began on the day the Company first listed on The Nasdaq Capital Market and continue monthly until the completion of the Company’s initial Business Combination or liquidation of the Company. For the year ended December 31, 2023, the Company incurred $120,000, in administrative support fees, which is included in formation and operating costs in the accompanying statements of operations. For the year ended December 31, 2022, the Company incurred $120,000 in administrative support fees which is included in formation and operating costs in the accompanying statements of operations. As of December 31, 2023 and 2022, there was $10,000 and $0, respectively, outstanding, which is included on the accompanying balance sheets as “due to related party.”

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Commitments and Contingencies

12 Months Ended

Dec. 31, 2023

Commitments and Contingencies [Abstract]

Commitments and Contingencies

Note 6 — Commitments and Contingencies

Registration Rights

The holders of the Founder Shares, Private Placement Units and securities that may be issued upon conversion of Working Capital Loans and extension loans will have registration rights to require the Company to register a sale of any of its securities held by them pursuant to a registration rights agreement. These holders will be entitled to make up to three demands, excluding short-form registration demands, that the Company registers such securities for sale under the Securities Act. In addition, these holders will have “piggyback” registration rights to include their securities in other registration statements filed by the Company. Notwithstanding the foregoing, the underwriters may not exercise their demand and “piggyback” registration rights after five and seven years, respectively, after the effective date of the IPO Registration Statement forms a part and may not exercise their demand rights on more than one occasion.

Underwriting Agreement

The Company granted the underwriters a 30-day option to purchase up to 1,875,000 additional Units to cover any over-allotments, if any, at the IPO price less the underwriting discounts and commissions. On July 22, 2021, the underwriters partially exercised their over-allotment option and purchased an additional 1,331,230 Units and forfeited the remainder of their over-allotment option as of July 28, 2021.

The Company agreed to pay or reimburse the underwriters for travel, lodging, and other “road show” expenses, expenses of the underwriters’ legal counsel, and certain diligence and other fees, including the preparation, binding and delivery of bound volumes in form and style reasonably satisfactory to the Representative, transaction Lucite cubes, or similar commemorative items in a style as reasonably requested by the Representative, and reimbursement for background checks on the Company’s directors and executive officers, which such fees and expenses are capped at an aggregate of $125,000 (less amounts previously paid).

The underwriters will be entitled to a deferred underwriting discount of 3.5% of the gross proceeds of the IPO held in the Trust Account upon the completion of the Company’s initial Business Combination, subject to the terms of the underwriting agreement.

The Representative’s Common Stock

The Company agreed to issue to the Representative and/or its designees, 125,000 shares of Common Stock (or 143,750 shares if the underwriter’s over-allotment option is exercised in full) upon the consummation of the IPO. On July 22, 2021, the underwriters partially exercised their over-allotment option, resulting in an aggregate issuance of 138,312 Representative Shares. These shares were valued at a price of $10.00 which was the sale price of the Units sold in the IPO. The Representative has agreed not to transfer, assign, or sell any such shares until the completion of the Company’s initial Business Combination. In addition, the Representative has agreed (i) to waive its redemption rights with respect to such shares in connection with the completion of the Company’s initial Business Combination and (ii) to waive its rights to liquidating distributions from the Trust Account with respect to such shares if the Company fails to complete an initial Business Combination within the applicable period.

The shares have been deemed compensation by the Financial Industry Regulatory Authority (“FINRA”) and are therefore subject to a Lock-Up for a period of 180 days immediately following the date of the effectiveness of the IPO Registration Statement pursuant to Rule 5110(g)(1) of FINRA’s NASD Conduct Rules. Pursuant to FINRA Rule 5110(g)(1), these securities will not be the subject of any hedging, short sale, derivative, put, or call transaction that would result in the economic disposition of the securities by any person for a period of 180 days immediately following the effective date of the IPO Registration Statement, nor may they be sold, transferred, assigned, pledged, or hypothecated for a period of 180 days immediately following the effective date of the IPO Registration Statement except to any underwriter and selected dealer participating in the IPO and their bona fide officers or partners.

Right of First Refusal

Subject to certain conditions, the Company will grant the Representative, for a period beginning on the closing of the IPO and ending 15 months after the date of the consummation of the initial Business Combination, a right of first refusal to act as lead left book-running managing underwriter with at least 75% of the economics; or, in the case of a three-handed deal, 50% of the economics, for any and all future public and private equity, convertible, and debt offerings for the Company or any of its successors or subsidiaries. In accordance with FINRA Rule 5110(f)(2)(E)(i), such right of first refusal shall not have a duration of more than three years from the effective date of the IPO Registration Statement.

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Stockholders’ Deficit

12 Months Ended

Dec. 31, 2023

Stockholders’ Deficit [Abstract]

Stockholders’ Deficit

Note 7 — Stockholders’ Deficit

Preferred Stock — The Company is authorized to issue 1,000,000 shares of preferred stock with a par value of $0.0001 per share. As of December 31, 2023 and 2022, there were no shares of preferred stock issued or outstanding.

Class A Common Stock — The Company is authorized to issue 100,000,000 shares of Class A Common Stock with a par value of $0.0001 per share. Holders of shares of Class A Common Stock are entitled to one vote for each share. As of December 31, 2023 and 2022 there were 4,271,711 and 813,905 shares of Class A Common Stock issued or outstanding, excluding 1,251,156 and 1,627,158 shares of Class A Common Stock subject to possible redemption, respectively.

Class B Common Stock — The Company is authorized to issue 10,000,000 shares of Class B Common Stock with a par value of $0.0001 per share. As of December 31, 2023 and, 2022 there were 1 and 3,457,807 shares of Class B Common Stock issued and outstanding, respectively, so that the Founder Shares represent, on an as-converted basis, 20% of the Company’s issued and outstanding shares after the IPO.

The Company’s Initial Stockholders have agreed not to transfer, assign, or sell any of their Founder Shares until the earlier to occur of: (i) six months after the date of the consummation of the initial Business Combination and (ii) subsequent to the initial Business Combination (a) if the closing price of the Company’s shares of Class A Common Stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations, and the like) for any 20 trading days within any 30-trading day period after the initial Business Combination or (b) the date on which the Company consummates a liquidation, merger, stock exchange, or other similar transaction that results in all of the public stockholders having the right to exchange their shares of Class A Common Stock for cash, securities, or other property (except as described herein). Any permitted transferees would be subject to the same restrictions and other agreements of the Company’s Initial Stockholders with respect to any Founder Shares.

Common stockholders of record are entitled to one vote for each share held on all matters to be voted on by stockholders. Holders of the Class A Common Stock and holders of the Class B Common Stock will vote together as a single class on all matters submitted to a vote of the Company’s stockholders, except as required by law. The shares of Class B Common Stock will automatically convert into shares of Class A Common Stock at the time of the initial Business Combination on a one-for-one basis (subject to adjustment for stock splits, stock dividends, reorganizations, recapitalizations, and the like), and subject to further adjustment as provided herein. In the case that additional shares of Class A Common Stock, or equity-linked securities, are issued or deemed issued in excess of the amounts offered in the IPO and related to the closing of the initial Business Combination, the ratio at which shares of Class B Common Stock shall convert into shares of Class A Common Stock will be adjusted (unless the holders of a majority of the outstanding shares of Class B Common Stock agree to waive such adjustment with respect to any such issuance or deemed issuance) so that the number of shares of Class A Common Stock issuable upon conversion of all shares of Class B Common Stock will equal, in the aggregate, on an as-converted basis, 20% of the sum of the total number of all shares of Common Stock outstanding upon completion of the IPO (excluding shares included in the Private Placement Units or the shares of Class A Common Stock issuable to the Representative) plus all shares of Class A Common Stock and equity-linked securities issued or deemed issued in connection with the initial Business Combination.

Rights

Each holder of a Right will receive one-eighth (1/8) of one Class A Common Stock upon consummation of the initial Business Combination. In the event the Company will not be the surviving entity upon completion of the initial Business Combination, each holder of a Right will be required to affirmatively convert its Rights in order to receive the 1/8 share of Class A Common Stock underlying each Right (without paying any additional consideration). If the Company is unable to complete an initial Business Combination within the required time period and the Company redeems the Public Shares of Class A Common Stock for the funds held in the Trust Account, holders of Rights will not receive any such funds in exchange for their Rights and the Rights will expire worthless. Every eight (8) Rights that a holder holds will entitle the holder to receive one share at the closing of the initial Business Combination. The Company will not issue fractional shares of Class A Common Stock upon exchange of the Rights. If, upon conversion of the Rights, a holder would be entitled to receive a fractional interest in a share, fractional shares will be rounded up to the nearest whole share.

If the Company is unable to complete an initial Business Combination within the required time period and it liquidates the funds held in the Trust Account, holders of Rights will not receive any such funds with respect to any of their Rights, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with respect to such Rights, and all Rights will expire worthless.

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Income Tax

12 Months Ended

Dec. 31, 2023

Income Tax [Abstract]

Income Tax

Note 8 – Income Tax

The Company’s net deferred tax assets are as follows:

	December 31, 2023			December 31, 2022
Deferred tax asset
Organizational costs/Start-up costs		748,482			334,531
Total deferred tax asset		748,482			334,531
Deferred tax liability
Unrealized gain/loss		—			(18,790	)
Valuation allowance		(748,482	)		(334,531	)
Deferred tax asset (liability), net of allowance	$	—		$	(18,790	)

The income tax provision consists of the following:

	December 31, 2023			December 31, 2022
Federal
Current	$	177,066		$	138,094
Deferred		(322,849	)		(86,506	)
State
Current		38,315			28,540
Deferred		(109,934	)		(30,765	)
Change in valuation allowance		413,993			136,060
Income tax provision	$	196,591		$	185,423

The Company’s federal and state net operating loss carryforwards as of December 31, 2023 and 2022 amounted to $0 and $0, respectively, and will be carried forward indefinitely and are available to offset future taxable income in the respective tax jurisdictions.

In assessing the realization of the deferred tax assets, Management considers whether it is more likely than not that some portion of all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences representing net future deductible amounts become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. After consideration of all of the information available, Management believes that significant uncertainty exists with respect to future realization of the deferred tax assets and has therefore established a full valuation allowance. For the year ended December 31, 2023, the change in the valuation allowance was $413,993. For the year ended December 31, 2022, the change in the valuation allowance was $136,060.

Reconciliation of the federal income tax rate to the Company’s effective tax rate at December 31, 2022 and 2021 is as follows:

	December 31, 2023			December 31, 2022
Statutory federal income tax rate		21.00	%		21.00	%
State taxes, net of federal tax benefit		4.34	%		4.30	%
Prior year true-up		0.25	%		(5.23	)%
Change in valuation allowance		(48.74	)%		55.41	%
Income tax provision		(23.15	)%		75.48	%

The Company’s effective tax rates for the periods presented differ from the expected (statutory) rates due to the recording of full valuation allowances on deferred tax assets.

The Company files income tax returns in the U.S. federal jurisdiction and Florida and is subject to examination by the various taxing authorities, since inception.

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Subsequent Events

12 Months Ended

Dec. 31, 2023

Subsequent Events [Abstract]

Subsequent Events

Note 9 — Subsequent Events

The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the financial statements were issued. Based upon this review, the Company did not identify any subsequent events, other than that identified below, that would have required adjustment or disclosure in the financial statements.

Extension of the Combination Period

On January 17, 2024, the Company held a special meeting of stockholders (the “2024 Special Meeting”). At the 2024 Special Meeting, the Company’s stockholders approved an amendment (the “2024 Extension Amendment”) to the Amended and Restated Charter to extend the date by which the Company must consummate its initial Business Combination from January 22, 2024 to July 22, 2024, or such earlier date as determined by the Company’s Board (the “2024 Extension”).

In connection with the 2024 Special Meeting, Public Stockholders holding 202,360 Public Shares exercised their right to redeem such shares for a pro rata portion of the funds in the Trust Account. As a result, $2,374,149 (approximately $11.73 per share) will be removed from the Trust Account to pay such holders.

Following the approval and implementation of the Extension Amendment, on January 22, 2024, the Company issued a promissory note (the “2024 Extension Note”) in the aggregate principal amount of up to $360,000 the Sponsor, pursuant to which the Sponsor agreed to loan to the Company up to $360,000 to deposit into the Company’s Trust Account for each Public Share that was not redeemed in connection with the 2024 Extension Amendment. The 2024 Extension Note bears no interest and is repayable in full upon the earlier of (a) the date of the consummation of the Company’s initial Business Combination, or (b) the date of the liquidation of the Company.

On January 22, 2024, the Company deposited $60,000 into the Trust Account, and the Company will continue to deposit $60,000 into the Trust Account for each additional calendar month (promptly following the 22nd of each calendar month), or portion thereof, that is needed by the Company to complete an initial Business Combination until July 22, 2024, and such amount will be distributed either to: (i) all of the holders of Public Shares upon the Company’s liquidation or (ii) holders of Public Shares who elect to have their shares redeemed in connection with the consummation of the initial Business Combination. As of March 21, 2024, $180,000 of the principal on the 2024 Extension Note has been deposited into the Trust Account.

On January 22, 2024, the Company issued the 2024 Working Capital Note in the principal amount of up to $1,000,000 to the Sponsor. The 2024 Working Capital Note was issued in connection with up to $1,000,000 of advances the Sponsor has made or may make in the future to the Company for working capital expenses. The loan is non-interest bearing and payable upon the earlier of (i) the date of the consummation of the Company’s initial Business Combination or (ii) the date of the liquidation of the Company. As of March 5, 2024, a total of $525,000 had been drawn down on the 2024 Working Capital Note.

Nasdaq Compliance—Minimum Public Holders Requirement and Annual Meeting Requirement

On August 31, 2023, the Company received a deficiency letter from the Staff of Nasdaq notifying us that the Company is no longer meet the Minimum Public Holders Requirement. The notification received has no immediate effect on our Nasdaq listing. On October 16, 2023, we submitted to Nasdaq a plan to regain compliance with the Minimum Public Holders Requirement. On October 25, 2023, in response to such compliance plan, the Staff granted us an extension of time to regain compliance with the Minimum Public Holders Requirement. Pursuant to the extension, on or before February 27, 2024, the Company must have filed with Nasdaq documentation that demonstrated that our Common Stock has a minimum of 300 public holders.

On January 23, 2024, the Company received a deficiency notice from the Staff of Nasdaq notifying the Company that it is not in compliance with the requirement pursuant to Nasdaq Listing Rule 5620(a) that companies listed on Nasdaq hold an annual meeting of shareholders within twelve months of their fiscal year end (the “Annual Meeting Requirement”) because it did not hold an annual meeting of stockholders within twelve months of our fiscal year ended December 31, 2022. The notification received had no immediate effect on our Nasdaq listing. In accordance with Nasdaq rules, the Company had 45 calendar days, or until March 8, 2024, to submit a plan to regain compliance with the Annual Meeting Requirement.

On February 27, 2024, the Company was not able to demonstrate compliance with the Minimum Public Holders Requirement, and as such, on March 1, 2024, we received a notice (the “Delisting Notice”) from the Staff of Nasdaq informing us that our securities may be subject to suspension and delisting pending the outcome of a hearing before the Panel. Because the Staff of Nasdaq issued the Delisting Notice to us on March 1, 2024, the Company chose to forego submitting a plan of compliance to Nasdaq related to the Annual Meeting Requirement. Because we were unable to demonstrate compliance with the Minimum Public Holders Requirement and did not submit to Nasdaq a plan of compliance related to the Annual Meeting Requirement, our securities may be subject to suspension and delisting pending the outcome of a hearing before the Panel, which we requested on March 8, 2024. 

Indemnification Agreement with Kustom Entertainment and Digital Ally

On February 1, 2024, we entered in an indemnification agreement with Kustom Entertainment and the Kustom Entertainment Stockholder, pursuant to which, Kustom Entertainment and Kustom Entertainment Stockholder agreed to indemnify us and our officers and directors for liabilities incurred in connection with Kustom Entertainment Stockholder disclosure incorporated by reference into the Kustom Entertainment Registration Statement.

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Pay vs Performance Disclosure - USD ($)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Pay vs Performance Disclosure
Net Income (Loss)	$ (1,045,959)	$ 60,237

XML

Insider Trading Arrangements	3 Months Ended
	Dec. 31, 2023
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

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Accounting Policies, by Policy (Policies)

12 Months Ended

Dec. 31, 2023

Summary of Significant Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying financial statements of the Company are presented in U.S. dollars in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”).

Emerging Growth Company Status

Emerging Growth Company Status

The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012, (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

Use of Estimates

Use of Estimates

The preparation of these financial statements in conformity with GAAP requires Management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

Cash and Cash Equivalents

The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. As of December 31, 2023 and 2022, the Company had $162,933 and $303,449 in cash, respectively, and no cash equivalents.

Investments Held in Trust Account

Investments Held in Trust Account

As of December 31, 2023 and 2022, the Company had $14,648,926 and $18,276,649 in investments held in the Trust Account, respectively.

As of December 31, 2023, the Company’s investments held in the Trust Account are held in an interest-bearing demand deposit account and are classified as trading securities. Trading securities are presented on the balance sheets at fair value at the end of each reporting period. Gains and losses resulting from the change in fair value of investments held in Trust Account are included in interest earned on marketable securities held in Trust Account in the accompanying statements of operations. The estimated fair values of investments held in Trust Account are determined using available market information.

Prior to the current reporting period, the Company classified its Treasury securities as held-to-maturity in accordance with FASB ASC Topic 320 “Investments - Debt and Equity Securities.” Held-to-maturity securities are those securities which the Company has the ability and intent to hold until maturity. Held-to-maturity Treasury securities were recorded at amortized cost and adjusted for the amortization or accretion of premiums or discounts.

A decline in the market value of held-to-maturity securities below cost that is deemed to be other than temporary, results in an impairment that reduces the carrying costs to such securities’ fair value. The impairment is charged to earnings and a new cost basis for the security is established. To determine whether an impairment is other than temporary, the Company considers whether it has the ability and intent to hold the investment until a market price recovery and considers whether evidence indicating the cost of the investment is recoverable outweighs evidence to the contrary. Evidence considered in this assessment includes the reasons for the impairment, the severity and the duration of the impairment, changes in value subsequent to year-end, forecasted performance of the investee, and the general market condition in the geographic area or industry in which the investee operates.

Premiums and discounts are amortized or accreted over the life of the related held-to-maturity security as an adjustment to yield using the effective-interest method. Such amortization and accretion are included in the “Interest and dividends earned on investment held in trust” line item in the statements of operations. Interest income is recognized when earned.

The carrying value, excluding gross unrealized holding loss and fair value of held-to-maturity securities on December 31, 2023 and 2022 are as follows: 

	Carrying Value as of December 31, 2023		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value as of December 31, 2023
Money Market Funds		14,648,926		—		—		14,648,926
	$	14,648,926	$	—	$	—	$	14,648,926

	Carrying Value as of December 31, 2022		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value as of December 31, 2022
U.S. Treasury Securities (matured May 25, 2023)		18,276,649		—		217		18,276,866
	$	18,276,649	$	—	$	217	$	18,276,866

Concentration of Credit Risk

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which, at times, may exceed the federal depository insurance coverage of $250,000. The Company has not experienced losses on these accounts, and Management believes the Company is not exposed to significant risks on such accounts.

Offering Costs Associated with Initial Public Offering

Offering Costs Associated with Initial Public Offering

The Company complies with the requirements of the FASB ASC Topic 340-10-S99-1 and SEC Staff Accounting Bulletin Topic 5A—“Expenses of Offering”. Offering costs consist of legal, accounting, underwriting and other costs incurred through the consummation of the IPO. Offering costs amounted to $9,562,126 and were charged to permanent and temporary equity, ratably with the redeemable and non-redeemable shares they are allocated to, upon the completion of the IPO.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

The fair value of the Company’s assets and liabilities, which qualify as financial instruments under FASB ASC Topic 820, “Fair Value Measurements and Disclosures” (“ASC 820”) approximates the carrying amounts represented in the balance sheet, primarily due to its short-term nature.

The Company follows the guidance in ASC 820 for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period and non-financial assets and liabilities that are re-measured and reported at fair value at least annually.

The fair value of the Company’s financial assets and liabilities reflects Management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:

● Level 1 – Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. Valuation adjustments and block discounts are not being applied. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these securities does not entail a significant degree of judgment.

● Level 2 – Valuations based on (i) quoted prices in active markets for similar assets and liabilities, (ii) quoted prices in markets that are not active for identical or similar assets, (iii) inputs other than quoted prices for the assets or liabilities, or (iv) inputs that are derived principally from or corroborated by market through correlation or other means.

● Level 3 – Valuations based on inputs that are unobservable and significant to the overall fair value measurement.

Derivative Financial Instruments

Derivative Financial Instruments

The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with FASB ASC Topic 815, “Derivatives and Hedging”. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value on the grant date and is then re-valued at each reporting date, with changes in the fair value reported in the statement of operations. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date.

Class A Common Stock Subject to Possible Redemption

Class A Common Stock Subject to Possible Redemption

All of the 13,831,230 Class A Common Stock sold as part of the Units in the IPO contain a redemption feature that allows for the redemption of such Public Shares in connection with the Company’s liquidation, if there is a stockholder vote or tender offer in connection with the initial Business Combination and in connection with certain amendments to the Company’s Amended and Restated Charter. In accordance with the SEC and its staff’s guidance on redeemable equity instruments, which has been codified in FASB ASC Topic 480-10-S99, redemption provisions not solely within the control of the Company require Common Stock subject to redemption to be classified outside of permanent equity. Given that the Class A Common Stock was issued with other freestanding instruments (i.e., equity rights), the initial carrying value of Class A Common Stock classified as temporary equity is the allocated proceeds based on the guidance in FASB ASC Topic 470-20, “Debt—Debt with Conversion and Other Options.”

If it is probable that the equity instrument will become redeemable, the Company has the option to either accrete changes in the redemption value over the period from the date of issuance (or from the date that it becomes probable that the instrument will become redeemable, if later) to the earliest redemption date of the instrument or to recognize changes in the redemption value immediately as they occur and adjust the carrying amount of the instrument to equal the redemption value at the end of each reporting period. The Company has elected to recognize the changes immediately.

Immediately upon the closing of the IPO, the Company recognized the accretion from initial book value to redemption amount, which approximates fair value. The change in the carrying value of Class A Common Stock subject to possible redemption resulted in charges against additional paid-in capital (to the extent available) and accumulated deficit and Class A Common Stock.

As of December 31, 2023 and 2022, the Class A Common Stock reflected on the balance sheet is reconciled in the following table:

Gross Proceeds	$	138,312,300
Proceeds allocated to equity rights		(760,718	)
Less:
Issuance costs related to Class A common stock subject to possible redemption		(9,509,534	)
Plus:
Remeasurement of carrying value to redemption value		12,344,937
Contingently redeemable Class A common stock subject to possible redemption (December 31, 2021)		140,386,985
Less:
Redemptions of Class A common stock		(125,587,180	)
Plus:
Remeasurement of carrying value to redemption value		3,483,582
Contingently redeemable Class A common stock subject to possible redemption (December 31, 2022)		18,283,387
Plus:
Remeasurement of carrying value to redemption value		756,785
Less:
Redemptions of Class A common stock		(4,209,931	)
Contingently redeemable Class A common stock subject to possible redemption (December 31, 2023)	$	14,830,241

Net (Loss) Income Per Common Stock

Net (Loss) Income Per Common Stock

The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share.” Net (loss) income per share is computed by dividing net (loss) income by the weighted average number of shares of Common Stock outstanding during the period. The Company has two classes of shares, redeemable Common Stock and non-redeemable Common Stock. The Company’s redeemable Common Stock is comprised of Class A shares sold in the IPO. The Company’s non-redeemable shares are comprised of Class B shares purchased by the Sponsor as well as Class A shares sold in the Private Placement and Representative Shares. Earnings and losses are shared pro rata between the two classes of shares. The Company’s statement of operations applies the two-class method in calculating net (loss) income per share. Basic and diluted net (loss) income per common share for redeemable Common Stock and non-redeemable Common Stock is calculated by dividing net (loss) income, allocated proportionally to each class of Common Stock, attributable to the Company by the weighted average number of shares of redeemable and non-redeemable stock outstanding.

The calculation of diluted (loss) income per share of Common Stock does not consider the effect of the rights issued in connection with the IPO since exercise of the rights is contingent upon the occurrence of future events and the inclusion of such rights would be anti-dilutive. Accretion of the carrying value of Class A Common Stock to redemption value is excluded from net (loss) income per redeemable share because the redemption value approximates fair value. As a result, diluted net (loss) income per share is the same as basic net (loss) income per share for the periods presented.

The basic and diluted (loss) income per common stock is calculated as follows:

	For the Year Ended December 31,
	2023			2022
Common stock subject to possible redemption
Numerator:
Net (loss) income allocable to redeemable Class A common stock	$	(266,047	)	$	46,938
Denominator:
Weighted Average redeemable Class A common stock, basic and diluted		1,457,184			12,204,321
Basic and Diluted net (loss) income per share, redeemable Class A common stock	$	(0.18	)	$	0.00
Non-redeemable common stock
Numerator:
Net (loss) income allocable to non-redeemable Class A and Class B common stock	$	(779,912	)	$	13,299
Denominator:
Weighted Average non-redeemable Class A and Class B common stock, basic and diluted		4,271,712			3,457,807
Basic and diluted net (loss) income per share, non-redeemable Class A and Class B common stock	$	(0.18	)	$	0.00

Income Taxes

Income Taxes

The Company accounts for income taxes under FASB ASC Topic 740, “Income Taxes” (“ASC 740”). ASC 740 requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statement and tax basis of assets and liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carry forwards. ASC 740 additionally requires a valuation allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not be realized.

ASC 740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim period, disclosure and transition.

The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of December 31, 2023 and 2022. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position.

The Company has identified the United States as its only “major” tax jurisdiction.

The Company is subject to income tax examinations by major taxing authorities since inception. These examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions and compliance with federal and state tax laws. The Company’s Management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months. 

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In August 2020, the FASB issued ASU Topic 2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” (“ASU 2020-06”), which simplifies accounting for convertible instruments by removing major separation models required under current GAAP. ASU 2020-06 also removes certain settlement conditions that are required for equity-linked contracts to qualify for the derivative scope exception, and it simplifies the diluted earnings per share calculation in certain areas. ASU 2020-06 is effective January 1, 2024 and should be applied on a full or modified retrospective basis, with early adoption permitted beginning on January 1, 2021. The Company is reviewing what impact, if any, adoption will have on the Company’s financial position, results of operations or cash flows.

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” (“ASU 2023-09”), which requires disclosure of incremental income tax information within the rate reconciliation and expanded disclosures of income taxes paid, among other disclosure requirements. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company’s Management does not believe the adoption of ASU 2023-09 will have a material impact on its consolidated financial statements and disclosures.

Management does not believe that any other recently issued, but not effective, accounting standards, if currently adopted, would have a material effect on the Company’s financial statements.

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Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2023

Summary of Significant Accounting Policies [Abstract]

Schedule of Fair Value of Held to Maturity Securities

The carrying value, excluding gross unrealized holding loss and fair value of held-to-maturity securities on December 31, 2023 and 2022 are as follows:

	Carrying Value as of December 31, 2023		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value as of December 31, 2023
Money Market Funds		14,648,926		—		—		14,648,926
	$	14,648,926	$	—	$	—	$	14,648,926

	Carrying Value as of December 31, 2022		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value as of December 31, 2022
U.S. Treasury Securities (matured May 25, 2023)		18,276,649		—		217		18,276,866
	$	18,276,649	$	—	$	217	$	18,276,866

Schedule of Class A Common Stock Reflected on the Balance Sheet are Reconciled

As of December 31, 2023 and 2022, the Class A Common Stock reflected on the balance sheet is reconciled in the following table:

Gross Proceeds	$	138,312,300
Proceeds allocated to equity rights		(760,718	)
Less:
Issuance costs related to Class A common stock subject to possible redemption		(9,509,534	)
Plus:
Remeasurement of carrying value to redemption value		12,344,937
Contingently redeemable Class A common stock subject to possible redemption (December 31, 2021)		140,386,985
Less:
Redemptions of Class A common stock		(125,587,180	)
Plus:
Remeasurement of carrying value to redemption value		3,483,582
Contingently redeemable Class A common stock subject to possible redemption (December 31, 2022)		18,283,387
Plus:
Remeasurement of carrying value to redemption value		756,785
Less:
Redemptions of Class A common stock		(4,209,931	)
Contingently redeemable Class A common stock subject to possible redemption (December 31, 2023)	$	14,830,241

Schedule of Basic and Diluted Loss Per Common Share

The basic and diluted (loss) income per common stock is calculated as follows:

	For the Year Ended December 31,
	2023			2022
Common stock subject to possible redemption
Numerator:
Net (loss) income allocable to redeemable Class A common stock	$	(266,047	)	$	46,938
Denominator:
Weighted Average redeemable Class A common stock, basic and diluted		1,457,184			12,204,321
Basic and Diluted net (loss) income per share, redeemable Class A common stock	$	(0.18	)	$	0.00
Non-redeemable common stock
Numerator:
Net (loss) income allocable to non-redeemable Class A and Class B common stock	$	(779,912	)	$	13,299
Denominator:
Weighted Average non-redeemable Class A and Class B common stock, basic and diluted		4,271,712			3,457,807
Basic and diluted net (loss) income per share, non-redeemable Class A and Class B common stock	$	(0.18	)	$	0.00

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Income Tax (Tables)

12 Months Ended

Dec. 31, 2023

Income Tax [Abstract]

Schedule of Deferred Tax Assets

The Company’s net deferred tax assets are as follows:

	December 31, 2023			December 31, 2022
Deferred tax asset
Organizational costs/Start-up costs		748,482			334,531
Total deferred tax asset		748,482			334,531
Deferred tax liability
Unrealized gain/loss		—			(18,790	)
Valuation allowance		(748,482	)		(334,531	)
Deferred tax asset (liability), net of allowance	$	—		$	(18,790	)

Schedule of Income Tax Provision

The income tax provision consists of the following:

	December 31, 2023			December 31, 2022
Federal
Current	$	177,066		$	138,094
Deferred		(322,849	)		(86,506	)
State
Current		38,315			28,540
Deferred		(109,934	)		(30,765	)
Change in valuation allowance		413,993			136,060
Income tax provision	$	196,591		$	185,423

Schedule of Effective Tax Rate

Reconciliation of the federal income tax rate to the Company’s effective tax rate at December 31, 2022 and 2021 is as follows:

	December 31, 2023			December 31, 2022
Statutory federal income tax rate		21.00	%		21.00	%
State taxes, net of federal tax benefit		4.34	%		4.30	%
Prior year true-up		0.25	%		(5.23	)%
Change in valuation allowance		(48.74	)%		55.41	%
Income tax provision		(23.15	)%		75.48	%

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Organization, Business Operation and Going Concern (Details) - USD ($)			1 Months Ended		12 Months Ended			29 Months Ended
	Oct. 19, 2022	Jul. 22, 2021	Jan. 22, 2024	Aug. 16, 2022	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2023	Mar. 21, 2024	Jul. 24, 2023	Jul. 21, 2023	Jul. 18, 2022
Organization, Business Operation and Going Concern [Line Items]
Price per unit (in Dollars per share)	$ 10.29				$ 11.73			$ 11.73
Transaction costs					$ 9,562,126
Underwriting commissions					2,766,246
Deferred underwriting commissions					4,840,931
Fair value of representative shares					1,383,123
Other cash offering costs					$ 571,826
Percentage of outstanding voting rights					50.00%
Proceeds from initial public offerings		$ 138,312,300					$ 138,312,300
Sale of price per unit (in Dollars per share)					$ 10			10
Percentage of obligation to redeem public share					100.00%
Condition for future business combination threshold net tangible assets					$ 5,000,001
Payments for investment of cash in trust account					$ 1,383,123
Per share (in Dollars per share)					$ 11.14			$ 11.14
Principal amount												$ 1,383,123
Proceeds from sale of trust assets	$ 125,587,180.34
Cash held in trust account					$ 4,209,931.03
Trust account					14,008,650.13
Deposited into the Trust Account					360,000			$ 360,000
Installment payments					60,000
Aggregate deposit held in trust account											$ 60,000
Deposited in trust account					360,000			360,000
Interest to pay dissolution expenses					$ 100,000
Trust account per share (in Dollars per share)					$ 10.15
Payment to trust account								1,017,913
Remitted tax authority					$ 777,312			777,312
Income tax liability								134,428
Franchise tax								75,143
Government authorities								181,316
Operating account					162,933
Withdraw fee from turst account					77,668
Cash amount					162,933	$ 303,449		162,933
Working capital deficit					4,493,502	2,882,521
Principal amount			$ 1,000,000							$ 300,000
Working capital loans outstanding					715,000	$ 0		$ 715,000
Consideration amount					$ 125,000,000
Tax percentage				1.00%
Inflation Reduction Act of 2022 [Member]
Organization, Business Operation and Going Concern [Line Items]
Tax percentage				1.00%
Minimum [Member]
Organization, Business Operation and Going Concern [Line Items]
Sale of price per unit (in Dollars per share)					$ 0.048			$ 0.048
IPO [Member]
Organization, Business Operation and Going Concern [Line Items]
Units issued during period shares new issues (in Shares)		13,831,230			1,875,000
Price per unit (in Dollars per share)		$ 10
Stock option exercised, shares (in Shares)	12,204,072
Proceeds from initial public offerings		$ 140,386,985
Sale of price per unit (in Dollars per share)		$ 10.15
Sponsor payment					$ 25,000			$ 25,000
Public Shares [Member]
Organization, Business Operation and Going Concern [Line Items]
Price per unit (in Dollars per share)		$ 10
Percentage of obligation to redeem public share		100.00%
Private Placement [Member]
Organization, Business Operation and Going Concern [Line Items]
Price per unit (in Dollars per share)		$ 10
Number of unit sold (in Shares)		675,593
Over-Allotment Option [Member]
Organization, Business Operation and Going Concern [Line Items]
Units issued during period shares new issues (in Shares)		1,875,000
Stock option exercised, shares (in Shares)		1,331,230
Stock issued during period shares (in Shares)					143,750
Class A Common Stock [Member]
Organization, Business Operation and Going Concern [Line Items]
Units issued during period shares new issues (in Shares)					13,831,230
Price per unit (in Dollars per share)					$ 11.2			$ 11.2
Representative shares (in Shares)					138,312
Common stock, par value (in Dollars per share)					$ 0.0001	$ 0.0001		0.0001
Stock issued during period shares (in Shares)					376,002
Class A Common Stock [Member] | IPO [Member]
Organization, Business Operation and Going Concern [Line Items]
Price per unit (in Dollars per share)		$ 0.0001
Class B Common Stock [Member]
Organization, Business Operation and Going Concern [Line Items]
Common stock, par value (in Dollars per share)					$ 0.0001	$ 0.0001		$ 0.0001
Subsequent Event [Member]
Organization, Business Operation and Going Concern [Line Items]
Aggregate deposit held in trust account			60,000						$ 180,000
Sponsor payment			1,000,000
Issuance of principal amount			$ 1,000,000
Subsequent Event [Member] | Class A Common Stock [Member]
Organization, Business Operation and Going Concern [Line Items]
Price per unit (in Dollars per share)			$ 2,024
Aggregate deposit held in trust account			$ 360,000
Founder Shares [Member]
Organization, Business Operation and Going Concern [Line Items]
Sponsor payment					$ 300,000			$ 300,000
Sponsor [Member]
Organization, Business Operation and Going Concern [Line Items]
Sale of price per unit (in Dollars per share)					$ 10.15			$ 10.15
Principal amount					$ 415,000			$ 415,000			$ 300,000
Advance from sponsor					$ 415,000			$ 415,000
Sponsor [Member] | Private Placement [Member]
Organization, Business Operation and Going Concern [Line Items]
Units issued during period shares new issues (in Shares)					571,859
Price per unit (in Dollars per share)					$ 10			$ 10
Business Combination [Member]
Organization, Business Operation and Going Concern [Line Items]
Minimum percentage of voting interests to be acquired in business combination.					80.00%
Per share (in Dollars per share)					$ 0.1			$ 0.1

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Summary of Significant Accounting Policies (Details) - USD ($)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Summary of Significant Accounting Policies [Line Items]
Cash and cash equivalents	$ 162,933	$ 303,449
Investments held in the trust account	14,648,926	$ 18,276,649
Federal depository insurance coverage	250,000
Offering costs	$ 9,562,126
Class A Common Stock [Member]
Summary of Significant Accounting Policies [Line Items]
Units issued during period shares (in Shares)	13,831,230

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Summary of Significant Accounting Policies (Details) - Schedule of Fair Value of Held to Maturity Securities - USD ($)	Dec. 31, 2023	Dec. 31, 2022
Marketable Securities [Line Items]
Carrying Value	$ 14,648,926	$ 18,276,649
Gross Unrealized Gains
Gross Unrealized Losses		217
Fair Value	14,648,926	18,276,866
Money Market Funds [Member]
Marketable Securities [Line Items]
Carrying Value	14,648,926
Gross Unrealized Gains
Gross Unrealized Losses
Fair Value	$ 14,648,926
U.S. Treasury Securities [Member]
Marketable Securities [Line Items]
Carrying Value		18,276,649
Gross Unrealized Gains
Gross Unrealized Losses		217
Fair Value		$ 18,276,866

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Summary of Significant Accounting Policies (Details) - Schedule of Class A Common Stock Reflected on the Balance Sheet are Reconciled - USD ($)		12 Months Ended
	Jul. 22, 2021	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Schedule of Class A Common Stock Reflected on the Balance Sheet are Reconciled [Abstract]
Gross Proceeds	$ 138,312,300			$ 138,312,300
Proceeds allocated to equity rights				(760,718)
Less:
Issuance costs related to Class A common stock subject to possible redemption				(9,509,534)
Plus:
Remeasurement of carrying value to redemption value		$ 756,785	$ 3,483,582	12,344,937
Contingently redeemable Class A common stock subject to possible redemption		14,830,241	$ 18,283,387	140,386,985
Less:
Redemptions of Class A common stock		$ (4,209,931)		$ (125,587,180)

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Summary of Significant Accounting Policies (Details) - Schedule of Basic and Diluted Loss Per Common Share - USD ($)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Class A Common Stock Subject to Possible Redemption [Member]
Numerator:
Net (loss) income	$ (266,047)	$ 46,938
Denominator:
Weighted Average non-redeemable Class A and Class B common stock, basic	1,457,184	12,204,321
Basic net (loss) income per share, non-redeemable Class A and Class B common stock	$ (0.18)	$ 0
Non-redeemable Common Stock [Member]
Numerator:
Net (loss) income	$ (779,912)	$ 13,299
Denominator:
Weighted Average non-redeemable Class A and Class B common stock, basic	4,271,712	3,457,807
Basic net (loss) income per share, non-redeemable Class A and Class B common stock	$ (0.18)	$ 0

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Summary of Significant Accounting Policies (Details) - Schedule of Basic and Diluted Loss Per Common Share (Parentheticals) - $ / shares	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Class A Common Stock Subject to Possible Redemption [Member]
Summary of Significant Accounting Policies (Details) - Schedule of Basic and Diluted Loss Per Common Share (Parentheticals) [Line Items]
Weighted Average common stock, diluted	1,457,184	12,204,321
Diluted net income (loss) per share, common stock	$ (0.18)	$ 0.00
Non-redeemable Common Stock [Member]
Summary of Significant Accounting Policies (Details) - Schedule of Basic and Diluted Loss Per Common Share (Parentheticals) [Line Items]
Weighted Average common stock, diluted	4,271,712	3,457,807
Diluted net income (loss) per share, common stock	$ (0.18)	$ 0.00

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Initial Public Offering (Details) - USD ($)			12 Months Ended
	Oct. 19, 2022	Jul. 22, 2021	Dec. 31, 2023	Dec. 31, 2021
Initial Public Offering [Line Items]
Purchase price share	$ 10.29		$ 11.73
Proceeds from initial public offering		$ 138,312,300		$ 138,312,300
Number of shares issued per unit		1
Additional fee			$ 4,840,931
IPO [Member]
Initial Public Offering [Line Items]
Units issued during period shares		13,831,230	1,875,000
Purchase price share		$ 10
Proceeds from initial public offering		$ 140,386,985
Over-allotment exercised	12,204,072
Underwriting fee			$ 2,766,246
Over-Allotment Option [Member]
Initial Public Offering [Line Items]
Units issued during period shares		1,875,000
Over-allotment exercised		1,331,230
Underwriting fee			$ 125,000

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Private Placement (Details) - Private Placement [Member]	12 Months Ended
	Dec. 31, 2023 USD ($) $ / shares shares
Sponsor [Member]
Private Placement [Line Items]
Units issued during period shares | shares	571,859
Sale of stock price per share | $ / shares	$ 10
Unit issued during period value new issues | $	$ 5,718,590
Maxim [Member]
Private Placement [Line Items]
Units issued during period shares | shares	103,734
Sale of stock price per share | $ / shares	$ 10
Unit issued during period value new issues | $	$ 1,037,340

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Related Party Transactions (Details) - USD ($)					1 Months Ended	12 Months Ended
	Jul. 20, 2023	Apr. 08, 2021	Mar. 31, 2021	Mar. 04, 2021	Oct. 19, 2022	Dec. 31, 2023	Dec. 31, 2022	Jan. 22, 2024	Jul. 24, 2023	Jul. 21, 2023	Jul. 18, 2022	Jul. 28, 2021	Jul. 22, 2021
Related Party Transactions [Line Items]
Aggregate purchase price						$ 4,209,931.03
Outstanding shares percentage			20.00%
Percentage of shares transferred or membership interest		100.00%
Stock price trigger per share (in Dollars per share)						$ 12
Loan amount				$ 300,000
Loan of principal amount											$ 1,383,123
Unpaid principal amount											1,383,123
Promissory note outstanding amount						$ 1,383,892	$ 1,383,892
Principal amount								$ 1,000,000	$ 300,000
Payments or cash deposited in trust account					$ 1,383,123
Deposit into trust account						360,000				$ 60,000
Maximum borrowing capacity of related party loans						$ 1,500,000
Maximum borrowing capacity of related party loans per share (in Dollars per share)						$ 10
Working capital loans share issued (in Shares)						150,000
Loan conversion agreement						$ 1,500,000
Working capital loans						$ 715,000	$ 0
First Extension Note [Member]
Related Party Transactions [Line Items]
Loan of principal amount											$ 1,383,123
Conversion price (in Dollars per share)											$ 10
Notes Payable, Other Payables [Member]
Related Party Transactions [Line Items]
Principal amount					$ 1,383,123
Third Extension Note [Member]
Related Party Transactions [Line Items]
Loan of principal amount										360,000
Over-Allotment Option [Member]
Related Party Transactions [Line Items]
Number of shares issued (in Shares)						143,750
Founder shares were subject to forfeiture (in Shares)			468,750									3,457,807
Purchased an additional shares (in Shares)													1,331,230
Purchased full option of additional shares (in Shares)													1,875,000
Deposit Account [Member]
Related Party Transactions [Line Items]
Deposit into trust account										60,000
Common Class B [Member]
Related Party Transactions [Line Items]
Common stock shares issued (in Shares)						1	3,457,807
Common stock shares outstanding (in Shares)						1	3,457,807
Common Class A [Member]
Related Party Transactions [Line Items]
Number of shares issued (in Shares)						376,002
Stock issued during period shares for conversion (in Shares)	3,457,806
Common stock shares issued (in Shares)						4,271,711	813,905
Common stock shares outstanding (in Shares)						4,271,711	813,905
Conversion percentage	73.00%
Initial Business Combination [Member]
Related Party Transactions [Line Items]
Working capital						$ 300,000
Sponsor [Member]
Related Party Transactions [Line Items]
Principal amount						415,000				300,000
Related Party [Member]
Related Party Transactions [Line Items]
Due to related party						$ 10,000	$ 0
Founder Shares [Member]
Related Party Transactions [Line Items]
Number of shares issued (in Shares)		75,000
Founder Shares [Member] | Common Class B [Member]
Related Party Transactions [Line Items]
Common stock shares issued (in Shares)	1
Common stock shares outstanding (in Shares)	1
Founder Shares [Member] | Common Class A [Member]
Related Party Transactions [Line Items]
Stock price trigger per share (in Dollars per share)						$ 12
Common stock shares issued (in Shares)	5,522,867
Common stock shares outstanding (in Shares)	5,522,867
Founder Shares [Member] | Sponsor [Member] | Common Class B [Member]
Related Party Transactions [Line Items]
Aggregate purchase price			$ 25,000
Number of shares issued (in Shares)			3,593,750
Sponsor [Member]
Related Party Transactions [Line Items]
Deposit into trust account										$ 360,000
Sponsor [Member] | Common Class A [Member]
Related Party Transactions [Line Items]
Stock issued during period shares for conversion (in Shares)	3,457,806
First Extension Note [Member]
Related Party Transactions [Line Items]
Promissory note outstanding amount						$ 1,383,123	1,383,123
Administrative Support Agreement [Member]
Related Party Transactions [Line Items]
Expenses per month						10,000
Expenses incurred and paid						$ 120,000	$ 120,000

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Commitments and Contingencies (Details) - USD ($)		12 Months Ended
	Jul. 22, 2021	Dec. 31, 2023
Commitments and Contingencies [Line Items]
Deferred underwriting discount percentage		3.50%
Sale stock price per share (in Dollars per share)		$ 10
Underwriter least percentage		75.00%
Public and private equity percentage		50.00%
IPO [Member]
Commitments and Contingencies [Line Items]
Additional Units issued	13,831,230	1,875,000
Underwriting expense (in Dollars)		$ 2,766,246
Sale stock price per share (in Dollars per share)	$ 10.15
Over-Allotment Option [Member]
Commitments and Contingencies [Line Items]
Additional Units issued	1,875,000
Additional Units issued	1,331,230
Underwriting expense (in Dollars)		$ 125,000
Common stock issued		143,750
Representative shares	138,312
Maxim [Member]
Commitments and Contingencies [Line Items]
Common stock issued		125,000
Maxim [Member] | IPO [Member]
Commitments and Contingencies [Line Items]
Sale stock price per share (in Dollars per share)	$ 10

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Stockholders’ Deficit (Details) - $ / shares	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Stockholders’ Deficit [Line Items]
Preferred stock, shares authorized	1,000,000	1,000,000
Preferred stock, par value (in Dollars per share)	$ 0.0001	$ 0.0001
Preferred stock, shares issued
Preferred stock, shares outstanding
Exceeds per share (in Dollars per share)	$ 12
Common stock, conversion basis	20%
Class A Common Stock [Member]
Stockholders’ Deficit [Line Items]
Common stock, shares authorized	100,000,000	100,000,000
Common stock, par value (in Dollars per share)	$ 0.0001	$ 0.0001
Common stock voting rights	one
Common stock, shares issued	4,271,711	813,905
Common stock, shares outstanding	4,271,711	813,905
Shares subject to redemptions	1,251,156	1,627,158
Class B Common Stock [Member]
Stockholders’ Deficit [Line Items]
Common stock, shares authorized	10,000,000	10,000,000
Common stock, par value (in Dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares issued	1	3,457,807
Common stock, shares outstanding	1	3,457,807
Issued and outstanding percentage		20.00%

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Income Tax (Details) - USD ($)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Income Tax [Abstract]
Net operating loss carryforwards	$ 0	$ 0
Valuation allowance	$ 413,993	$ 136,060

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Income Tax (Details) - Schedule of Deferred Tax Assets - USD ($)	Dec. 31, 2023	Dec. 31, 2022
Deferred tax asset
Organizational costs/Start-up costs	$ 748,482	$ 334,531
Total deferred tax asset	748,482	334,531
Deferred tax liability
Unrealized gain/loss		(18,790)
Valuation allowance	(748,482)	(334,531)
Deferred tax asset (liability), net of allowance		$ (18,790)

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Income Tax (Details) - Schedule of Income Tax Provision - USD ($)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Federal
Current	$ 177,066	$ 138,094
Deferred	(322,849)	(86,506)
State
Current	38,315	28,540
Deferred	(109,934)	(30,765)
Change in valuation allowance	413,993	136,060
Income tax provision	$ 196,591	$ 185,423

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Income Tax (Details) - Schedule of Effective Tax Rate	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Schedule of Effective Tax Rate [Abstract]
Statutory federal income tax rate	21.00%	21.00%
State taxes, net of federal tax benefit	4.34%	4.30%
Prior year true-up	0.25%	(5.23%)
Change in valuation allowance	(48.74%)	55.41%
Income tax provision	(23.15%)	75.48%

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Subsequent Events (Details) - USD ($)	1 Months Ended
	Jan. 22, 2024	Mar. 21, 2024	Dec. 31, 2023	Jul. 21, 2023	Oct. 19, 2022
Subsequent Events [Line Items]
Trust account amount			$ 2,374,149
Price per share (in Dollars per share)			$ 11.73		$ 10.29
Deposited into the trust account				$ 60,000
Common Class A [Member]
Subsequent Events [Line Items]
Shares issued (in Shares)			202,360
Price per share (in Dollars per share)			$ 11.2
Subsequent Event [Member]
Subsequent Events [Line Items]
Trust account amount	$ 60,000
Principal amount	1,000,000
Deposited into the trust account	60,000	$ 180,000
Sponsor payment	1,000,000
Working Capital	$ 525,000
Subsequent Event [Member] | Common Class A [Member]
Subsequent Events [Line Items]
Price per share (in Dollars per share)	$ 2,024
Deposited into the trust account	$ 360,000
Yntegra Capital Investments, LLC [Member] | Subsequent Event [Member]
Subsequent Events [Line Items]
Principal amount	$ 360,000