The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our audited financial statements and the notes related thereto contained elsewhere in this Annual Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.

All statements other than statements of historical fact included in this Annual Report including, without limitation, statements under "Management's Discussion and Analysis of Financial Condition and Results of Operations" regarding the Company's financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. When used in this Annual Report, words such as "anticipate," "believe," "estimate," "expect," "intend" and similar expressions, as they relate to us or the Company's management, identify forward-looking statements. Such forward-looking statements are based on the beliefs of management, as well as assumptions made by, and information currently available to, the Company's management. Actual results could differ materially from those contemplated by the forward-looking statements as a result of many factors, including those set forth under "Cautionary Note Regarding Forward-Looking Statements," "Item 1A. Risk Factors" and elsewhere in this Annual Report.

Overview

We are a blank check company incorporated in Delaware on May 14, 2021 formed for the purpose of effecting a merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization or other similar business combination with one or more businesses or entities.

On October 12, 2022, we entered into a Business Combination Agreement with Alternus Energy Group Plc (the "Seller"). Pursuant to the Business Combination Agreement, we will acquire certain subsidiaries of the Seller, for up to 90 million shares. Initially, we will issue 55 million shares at closing (subject to a working capital adjustment capped at 1 million additional shares) plus up to 35 million shares subject to certain earn-out provisions, which will be deposited in escrow and will be released if certain conditions are met.

As indicated in the financial statements, as of December 31, 2022, we had cash of $630,460. Further, we expect to incur significant costs in the pursuit of our initial business combination. We cannot assure you that our plans to complete our initial business combination will be successful.

Results of Operations

As of December 31, 2022, the Company had not commenced any operations. All activity from May 14, 2021 (inception) through December 31, 2022, relates to the Company's formation and the initial public offering and, following the initial public offering, identifying a target company for a Business Combination. The Company will not generate any operating revenues until after the completion of a Business Combination, at the earliest. We generate non-operating income in the form of realized gains and dividend income from the proceeds derived from the initial public offering and placed in the trust account. We continue to incur increased expenses as a result of being a public company (for legal, financial reporting, accounting, and auditing compliance), as well as for due diligence expenses.



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For the year ended December 31, 2022, we had net income of $59,955. Net income is comprised of $2,228,053 of realized gains on marketable securities held in the trust account and, $1,057,975 of dividend income on marketable securities held in the trust account and $3 of interest income on the operating bank account, offset by $1,213,772 of legal and accounting expense, a $500,000 placement services fee expense, $360,142 of insurance amortization expense, $203,639 of dues and subscriptions expenses, a $200,000 Delaware franchise tax expense, $99,845 of marketing and advertising expenses, and $947 of bank fees.

For the period from May 14, 2021 (inception) through December 31, 2021, we had a net loss of $2,546 comprised of $1,600 franchise tax expense and $946 of formation costs.

Liquidity and Capital Resources

As of December 31, 2022, we had $630,460 of cash held outside of the trust account for working capital purposes and a working capital deficit of $2,496,267. Working capital deficit excludes amounts of marketable securities held in the trust account and the deferred underwriter fee payable.

On February 28, 2022, we consummated the initial public offering of 23,000,000 units, inclusive of the full exercise of the underwriters' over-allotment option of 3,000,000 units, at a price of $10.00 per unit, generating gross proceeds of $230,000,000. Simultaneously with the closing of the initial public offering, we consummated the sale of 890,000 private placement units to the sponsor at a price of $10.00 per unit, generating gross proceeds of $8,900,000.

We incurred $18,678,975 in transaction costs consisting of $4,600,000 of underwriting fee, $8,050,000 of deferred underwriting fee, $1,292,649 of other offering costs, and $4,736,326 excess fair value of founder shares as a result of the anchor investor transaction.

Following the initial public offering and the sale of the private placement units, a total of $232,300,000 ($10.10 per unit) was placed in the trust account. As of December 31, 2022, the trust account totaled $235,586,028 including $2,228,053 of realized gains on marketable securities held in the trust account and $1,057,975 of dividend income on marketable securities held in the trust account.

We intend to use substantially all of the funds held in the trust account, including any amounts representing interest earned on the trust account, excluding deferred underwriting commissions, to complete our initial business combination. We may withdraw interest from the trust account to pay taxes. To the extent that our share capital or debt is used, in whole or in part, as consideration to complete a business combination, the remaining proceeds held in the trust account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.

We intend to use the funds held outside the trust account primarily to identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from the offices, plants or similar locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses, structure, negotiate and complete a business combination.

On September 26, 2022, we issued an unsecured promissory note to the sponsor pursuant to which we may borrow up to an aggregate principal amount of $850,000. The promissory note is non-interest bearing and payable upon the consummation of the initial Business Combination. At the election of the sponsor and at any time prior to payment in full of the principal balance, the promissory note can be converted into conversion units comprised of one Class A common stock and one-half of one warrant that are identical to those issued in the private placement. As of December 31, 2022, we have drawn $806,170 on the promissory note.

We do not believe we will need to raise additional funds in order to meet the expenditures required for operating our business. However, if our estimate of the costs of identifying a target business, undertaking in-depth due diligence and negotiating a business combination are less than the actual amount necessary to do so, we may have insufficient funds available to operate our business prior to our initial business combination. Moreover, we may need to obtain additional financing either to complete our initial business combination or redeem a significant number of our public shares upon completion of our initial business combination, in which case we may issue additional securities or incur debt in connection with such business combination.

We do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities, other than the promissory note with our sponsor that is payable upon the consummation of the initial Business Combination and the placement services agreement cash success fee of $450,000 that is contingent upon the closing of the Business Combination


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The underwriters are also entitled to a deferred underwriting commission of 3.50% of the gross proceeds of the Initial Public Offering, or $8,050,000. The full amount was placed in the Trust Account and will be released to the underwriters only on, and concurrently with, completion of an initial business combination. In October 2022, one of the Company's underwriters waived their right to 50% of the deferred underwriting commissions, forfeiting $3,622,500 of their deferred underwriting commission. The deferred underwriter fee payable is $4,427,500 as of December 31, 2022.

Going Concern

In connection with the Company's assessment of going concern considerations in accordance with Accounting Standards Update ("ASU") 2014-15, "Disclosures of Uncertainties about an Entity's Ability to Continue as a Going Concern," management has determined that the current liquidity conditions raise substantial doubt about the Company's ability to continue as a going concern through one year from the date of filing this Annual Report. The financial statements accompanying this Annual 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 the Company be unable to continue as a going concern.

Critical Accounting Estimates

The preparation of financial statements and related disclosures in conformity with U.S. GAAP requires management to make critical accounting estimates that can involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on our financial condition or results of operations. We considered whether we made accounting estimates or assumptions where the nature of the estimates or assumptions is material due to the levels of subjectivity and judgement necessary to account for highly uncertain matters or the susceptibility of such matters to change, and the impact of the estimates and assumptions on financial condition or operating performance is material. We have not identified any critical accounting estimates.

Recent Accounting Pronouncements

Refer to Note 2 to the financial statements that discloses recent accounting pronouncements.

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 on the relevant dates on which adoption of such standards is required for non-emerging growth companies. As a result, our 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.

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