Gardiner Healthcare Acquisitions Corp. - Quarter Report: 2023 March (Form 10-Q)

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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FORM 10-Q

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(Mark One)

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

For the quarterly period ended March 31, 2023

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

For the transition period from _____________ to _____________

Commission File No. 001-41185

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GARDINER HEALTHCARE ACQUISITIONS CORP.

(Exact name of registrant as specified in its charter)

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(216) 633-6708

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

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

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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.

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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 is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes ☒ No ☐

As of August 8, 2023, there were 3,758,900 shares of common stock, par value $0.0001 per share issued and outstanding.

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GARDINER HEALTHCARE ACQUISITIONS CORP.

Quarterly Report on Form 10-Q

For the Quarter Ended March 31, 2023

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PART 1. FINANCIAL STATEMENTS

Item 1. Interim Financial Statements

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GARDINER HEALTHCARE ACQUISITIONS CORP.

CONDENSED BALANCE SHEETS

(UNAUDITED)

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

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GARDINER HEALTHCARE ACQUISITIONS CORP.

CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED)

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

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GARDINER HEALTHCARE ACQUISITIONS CORP.

CONDENSED STATEMENTS OF CHANGES IN COMMON STOCK SUBJECT TO POSSIBLE REDEMPTION AND STOCKHOLDERS’ DEFICIT

(UNAUDITED)

FOR THE THREE MONTHS ENDED MARCH 31, 2023

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FOR THE THREE MONTHS ENDED MARCH 31, 2022

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

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GARDINER HEALTHCARE ACQUISITIONS CORP.

CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)

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

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GARDINER HEALTHCARE ACQUISITIONS CORP.

NOTES TO CONDENSED FINANCIAL STATEMENTS

MARCH 31, 2023

(UNAUDITED)

Note 1 – Description of Organization and Business Operations and Liquidity

Gardiner Healthcare Acquisitions Corp. (the “Company”) was incorporated in Delaware on March 25, 2021. The Company is a blank check company formed for the purpose of entering into a merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization or other similar business combination with one or more businesses or entities (a “Business Combination”).

The Company is not limited to a particular industry or geographic region for purposes of consummating a Business Combination. The Company is an early stage and emerging growth company and, as such, the Company is subject to all of the risks associated with early stage and emerging growth companies.

As of March 31, 2023, the Company had not commenced any operations. All activity through March 31, 2023, related to the Company’s formation and initial public offering (“IPO” or “Initial Public Offering”), which is described below and, since the offering, the search for a prospective Business Combination. The Company will not generate any operating revenues until after the completion of an initial Business Combination, at the earliest. The Company generates non-operating income in the form of interest income earned on investments from the proceeds derived from the IPO. The registration statement for the Company’s IPO was declared effective on December 22, 2021. On December 27, 2021, the Company consummated the IPO of 7,500,000 units (“Units”) with respect to the common stock included in the Units being offered (the “Public Shares”) at $10.00 per Unit generating gross proceeds of $75,000,000.

Simultaneously with the closing of the IPO, the Company consummated the sale of 4,450,000 private placement warrants (“Private Placement Warrants”) at a price of $1.00 per Private Placement Warrant in a private placement to the Company’s sponsors, Gardiner Healthcare Holdings, LLC (the “Sponsor”), Chardan Gardiner LLC (“Chardan Gardiner”), and CCMAUS Pty Ltd. (“CCMAUS”) generating gross proceeds of $4,450,000.

Net proceeds from the IPO and the sale of the Units and the Private Placement Warrants was placed in a trust account (“Trust Account”). The amounts placed in the Trust Account were invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”), with a maturity of 180 days or less or in any open-ended investment company that holds itself out as a money market fund selected by the Company meeting the conditions of paragraphs (d)(2), (d)(3) and (d)(4) of Rule 2a-7 of the Investment Company Act, as determined by the Company, until the earlier of: (i) the completion of a Business Combination or (ii) the distribution of the Trust Account, as described below.

Simultaneously with the closing of the IPO, the Company consummated a private sale of an additional 393,750 Private Placement Warrants at a price of $1.00 per Private Placement Warrant, generating gross proceeds of $393,750. A total of $87,112,500 of the net proceeds from the IPO (including the Over-allotment Units (as defined below)) and the sale of Private Placement Warrants was placed in a U.S.-based trust account. The Over-allotment Units are additional Units sold at the time of the IPO that are identical to the Units sold at the IPO.

Each whole Private Placement Warrant will be exercisable to purchase one share of common stock at a price of $11.50 per share, if a Business Combination is completed by the Company. A portion of the proceeds from the Private Placement Warrants were added to the proceeds from the IPO to be held in the Trust Account. If the Company does not complete a Business Combination within the Combination Period, the proceeds from the sale of the Private Placement Warrants will be used to fund the redemption of the Public Shares (subject to the requirements of applicable law), and the Private Placement Warrants will be worthless.

The amounts placed in the Trust Account have been invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”), with a maturity of 180 days or less or in any open-ended investment company that holds itself out as a money market fund selected by the Company meeting the conditions of paragraphs (d)(2), (d)(3) and (d)(4) of Rule 2a-7 of the Investment Company Act, as determined by the Company. Such amounts will continue to be invested in such manner until the earlier of: (i) the completion of a Business Combination or (ii) the distribution of the Trust Account, as described below, unless the Company earlier instructs the trustee with respect to the Trust Account to liquidate the U.S. government treasury obligations and money market funds held in the Trust Account on or before the expiry of the 24-month anniversary of the effective date of the Company’s IPO prospectus.

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GARDINER HEALTHCARE ACQUISITIONS CORP.

NOTES TO CONDENSED FINANCIAL STATEMENTS

MARCH 31, 2023

(UNAUDITED)

It is possible that a claim could be made that the Company has been operating as an unregistered investment company. If the Company was deemed to be an investment company for purposes of the Investment Company Act, it might be forced to abandon its efforts to complete an initial business combination and instead be required to liquidate. If the Company is required to liquidate, its investors would not be able to realize the benefits of owning stock in a successor operating business, such as any appreciation in the value of the Company’s securities following such a transaction, the Company’s warrants would expire worthless and its shares of common stock would have no value apart from their pro rata entitlement to the funds then-remaining in the Trust Account.

The longer that the funds in the Trust Account are held in short-term U.S. government treasury obligations or in money market funds invested exclusively in such securities, there is a greater risk that the Company may be considered an unregistered investment company, in which case the Company may be required to liquidate. It is possible that to mitigate the risk of the Company being deemed to have been operating as an unregistered investment company (including under the subjective test of Section 3(a)(1)(A) of the Investment Company Act), the Company may instruct the trustee with respect to the Trust Account to liquidate the U.S. government treasury obligations and money market funds held in the Trust Account on or before the expiry of the 24-month anniversary of the effective date of the Company’s IPO prospectus, and to hold all funds in the Trust Account in cash until the earlier of consummation of the Company’s initial Business Combination or liquidation. If the Company decides to effect such liquidation, the Company will issue a press release announcing such liquidation. If the Company liquidates the trust assets and hold all funds in the Trust Account in cash only, following such liquidation, the Company will likely continue to receive minimal interest, if any, on the funds held in the Trust Account, which would reduce the dollar amount its public stockholders would receive upon any redemption or liquidation of the Company.

The Company’s management has broad discretion with respect to the specific application of the net proceeds of the IPO and the sale of the Private Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. There is no assurance that the Company will be able to complete a Business Combination successfully. The Company must complete one or more initial Business Combinations having an aggregate fair market value of at least 80% of the assets held in the Trust Account excluding the amounts due under the business combination marketing agreement and taxes payable on income earned on the Trust Account) at the time of the agreement to enter into the initial Business Combination. However, the Company will only complete a 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. There is no assurance the Company will be able to successfully effect a Business Combination.

The Company will provide the holders of the outstanding Public Shares (the “Public Stockholders”) with the opportunity to redeem all or a portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a stockholder meeting called to approve a Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek stockholder approval of a Business Combination or conduct a tender offer will be made by the Company. The Public Stockholders will be entitled to redeem their Public Shares for a pro rata portion of the amount then in the Trust Account (initially anticipated to be $10.10 per Public Share, plus any pro rata interest then in the Trust Account, net of taxes payable). There will be no redemption rights with respect to the Company’s Public Warrants. At March 31, 2023 the redemption value of the redeemable shares was approximately $10.32 per share.

All of the Public Shares contain a redemption feature which 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 Company’s Business Combination and in connection with certain amendments to the Company’s amended and restated certificate of incorporation. In accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity” (“ASC 480”) Subtopic 10-S99, redemption provisions not solely within the control of a company require common stock subject to redemption to be classified outside of permanent equity. Given that the Public Shares will be issued with other freestanding instruments (i.e., Public Warrants as described in Note 6), the initial carrying value of the Public Shares classified as temporary equity will be the allocated proceeds determined in accordance with ASC 470-20 “Debt with Conversion and other Options”. The Public Shares are subject to ASC 480-10-S99. If it is probable that the equity instrument will become redeemable, the Company has the option to either (i) 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 (ii) 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. While redemptions cannot cause the Company’s net tangible

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GARDINER HEALTHCARE ACQUISITIONS CORP.

NOTES TO CONDENSED FINANCIAL STATEMENTS

MARCH 31, 2023

(UNAUDITED)

assets to fall below $5,000,001, the Public Shares are redeemable and are classified as such on the balance sheet until such date that a redemption event takes place.

Redemptions of the Company’s Public Shares may be subject to the satisfaction of conditions, including minimum cash conditions, pursuant to an agreement relating to the Company’s Business Combination. If the Company seeks stockholder approval of a Business Combination, the Company will proceed with a Business Combination if a majority of the shares voted are voted in favor of a Business Combination, or such other vote as required by law or stock exchange rule. If a stockholder vote is not required by applicable law or stock exchange listing requirements and the Company does not decide to hold a stockholder vote for business or other reasons, the Company will, pursuant to its certificate of incorporation, conduct the redemptions pursuant to the tender offer rules of the U.S. Securities Exchange Commission (“SEC”) and file tender offer documents with the SEC prior to completing a Business Combination. If, however, stockholder approval of the transaction is required by applicable law or stock exchange listing requirements, or the Company decides to obtain stockholder approval for business or other reasons, the Company will offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. If the Company seeks stockholder approval in connection with a Business Combination, the Sponsor has agreed to vote its Founder Shares (as defined in Note 3) and any Public Shares purchased during or after the IPO in favor of approving a Business Combination. Additionally, each Public Stockholder may elect to redeem their Public Shares without voting, and if they do vote, irrespective of whether they vote for or against the proposed transaction.

Notwithstanding the foregoing, the Company’s amended and restated certificate of incorporation provides that a Public Stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from redeeming its shares with respect to more than an aggregate of 15% or more of the Public Shares sold in the IPO, without the prior consent of the Company.

On December 21, 2022, the Company’s stockholders amended the Company’s amended and restated certificate of incorporation to allow the Company to extend (the “Extension”) the date by which it has to consummate a Business Combination (the “Combination Period”) for an additional three (3) months, from December 27, 2022 to March 27, 2023, by depositing into the Trust Account $300,000 for the three-month extension, and thereafter to extend the Combination Period up to three (3) times by an additional month each time (or up to June 27, 2023) by depositing into the Trust Account $100,000 for each additional month extension. In connection with the votes to approve the Extensions, the holders of 6,689,428 shares of common stock of the Company properly exercised their right to redeem their shares for cash at a redemption price of approximately $10.19 per share, for an aggregate redemption amount of approximately $68,165,271.

On December 28, 2022 the Company deposited $300,000 into the Trust Account to extend the date by which it has to consummate a business combination to March 27, 2023. On March 23, 2023, Gardiner Healthcare exercised an Extension and deposited $100,000 into the trust account in order to extend the Combination Period to April 27, 2023. In April and May 2023, the Company further exercised an Extension and deposited a total of $200,000 of the funds borrowed under the Convertible Promissory Note into the Trust Account to extend the Combination Period to June 27, 2023.

On June 20, 2023, at a special meeting of stockholders, the Company’s stockholders amended the Company’s amended and restated certificate of incorporation to allow the Company to extend (the “Extension”) the date by which it has to consummate a Business Combination for an additional one (1) month, from June 27, 2023 to July 27, 2023, by depositing into the Trust Account $100,000 for the one-month extension, and thereafter to extend the Combination Period up to five (5) times by an additional month each time (or up to December 27, 2023) by depositing into the Trust Account $100,000 for each additional month extension. On June 27, 2023, the Company exercised an Extension and $100,000 was deposited into the Trust Account in order to extend the Combination Period to July 27, 2023. On July 21, 2023 the Company notified the Trust of its intention to extend the date by which it has to consummate a business combination to August 27, 2023 and on July 27, 2023 $100,000 was deposited into the Trust  Account.

In connection with the votes to approve the Extensions on June 20, 2023, the holders of 332,922 shares of common stock of the Company properly exercised their right to redeem their shares for cash at a redemption price of approximately $10.51 per share, for an aggregate redemption amount of $3,500,301, leaving $16,850,066 in the Trust Account.

If the Company is unable to complete a Business Combination by August 27, 2023 (or up to December 27, 2023, as extended), the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more

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GARDINER HEALTHCARE ACQUISITIONS CORP.

NOTES TO CONDENSED FINANCIAL STATEMENTS

MARCH 31, 2023

(UNAUDITED)

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 the Company’s 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 the Company’s remaining stockholders and the Company’s board of directors, dissolve and liquidate, 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.

On March 31, 2023, the Company received a letter (the “Letter”) from the staff at The Nasdaq Global Market (“Nasdaq”) notifying the Company that, for the 30 consecutive trading days prior to the date of the Letter, the common stock, had traded at a value below the minimum $50,000,000 “Market Value of Listed Securities” (“MVLS”) requirement set forth in Nasdaq Listing Rule 5450(b)(2)(A), which is required for continued listing of the Company’s common stock on Nasdaq. The Letter is only a notification of deficiency, not of imminent delisting, and has no current effect on the listing or trading of the Company’s securities on Nasdaq.

In accordance with Nasdaq listing rule 5810(c)(3)(C), the Company has 180 calendar days, or until September 27, 2023, to regain compliance. The Letter notes that to regain compliance, the Company’s common stock must trade at or above a level such that the Company’s MVLS closes at or above $50,000,000 for a minimum of ten consecutive business days during the compliance period, which ends September 27, 2023. The Letter further notes that if the Company is unable to satisfy the MVLS requirement prior to such date, the Company may be eligible to transfer the listing of its securities to The Nasdaq Capital Market (provided that it then satisfies the requirements for continued listing on that market).

If the Company does not regain compliance by September 27, 2023, Nasdaq staff will provide written notice to the Company that its securities are subject to delisting. At that time, the Company may appeal any such delisting determination to a hearings panel.

The Company intends to actively monitor the Company's MVLS between now and September 27, 2023, and may, if appropriate, evaluate available options to resolve the deficiency and regain compliance with the MVLS requirement. While the Company is exercising diligent efforts to maintain the listing of its securities on Nasdaq, there can be no assurance that the Company will be able to regain or maintain compliance with Nasdaq listing standards.

Risks and Uncertainties

The ongoing conflict in Ukraine—along with the responses of the governments of the United States, European Union (“EU”) member states, the United Kingdom, and other nations—have the potential to materially adversely affect a potential target business’s operations or assets in—or (direct or indirect) dealings with parties organized or located within—Ukraine, Russia, and Belarus. Due to recent geopolitical developments, the United States, European Union, United Kingdom, and other nations have announced or threatened new sanctions and export restrictions targeting Russian and Belarusian individuals and entities, as well as disputed territories within Ukraine. Russia and its allies may respond with countermeasures, which could further restrict the target business’s operations in or related to the foregoing countries. It is unclear how long existing restrictions (and countermeasures) will remain in place or whether new restrictions (or countermeasures) may be imposed. Existing restrictions have negatively impacted the Russian economy, and there can be no guarantee that existing (or new) restrictions or countermeasures will not materially adversely affect the Russian (or global) economy. Any of the foregoing could have a material adverse impact on a potential target business’s financial condition, results of operations, or prospects.

Liquidity and Going Concern

As of March 31, 2023, the Company had $173,195 in its operating bank accounts, and $20,277,303 in marketable securities held in the Trust Account to be used for a Business Combination or to repurchase or redeem its common stock in connection therewith and working deficit of $1,758,866.

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

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GARDINER HEALTHCARE ACQUISITIONS CORP.

NOTES TO CONDENSED FINANCIAL STATEMENTS

MARCH 31, 2023

(UNAUDITED)

through one year from the date that the financial statements were issued. 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. The Company has until August 27, 2023 to consummate a business combination with the option to extend up to four (4) additional times by an additional month each time (or up to December 27, 2023) by depositing into the trust account $100,000 for each additional month extension. It is uncertain that the Company will be able to consummate a business combination by the specified period. If a business combination is not consummated by August 27, 2023, and the monthly options to extend up to December 27, 2023 are not exercised (and the stockholders of the Company do not agree to further amend our amended and restated certificate of incorporation to allow for a further extension of the Combination Period or the Company does not implement any such further extension), there will be a mandatory liquidation and subsequent dissolution. 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.

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Note 2 — Summary of Significant Accounting Policies

Basis of Presentation

The accompanying financial statements of the Company are presented in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X of the SEC. Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the statement of financial position, operating results and cash flows for the periods presented. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, as filed with the SEC on April 17, 2023. The interim results for the period presented are not necessarily indicative of the results to be expected for the year ending December 31, 2023, or for any future interim results.

Emerging Growth Company

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, 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 condensed financial statements in conformity with GAAP requires the Company’s 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 condensed financial statements and the reported amounts of revenues and expenses during the reporting period.

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GARDINER HEALTHCARE ACQUISITIONS CORP.

NOTES TO CONDENSED FINANCIAL STATEMENTS

MARCH 31, 2023

(UNAUDITED)

Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the condensed financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates.

Cash

Cash and cash equivalents include cash on hand and on deposit at banking institutions as well as all highly liquid short-term investments with original maturities of 90 days or less. The Company did not have any cash equivalents as of March 31, 2023 and December 31, 2022.

Investments Held in Trust Account

At March 31, 2023 and December 31, 2022, substantially all of the assets held in the Trust Account were in an interest bearing demand deposit account. Demand deposit accounts are characterized as Level 1 investments within the fair value hierarchy under ASC 820 (as defined below). Gains and losses resulting from the change in fair value of assets held in Trust Account are included in interest income in the accompanying statements of operations. The estimated fair values of assets held in Trust Account are determined using available market information.

Stock Compensation Expense

Under ASC 718, stock-based compensation associated with equity-classified awards is measured at fair value upon the grant date and recognized over the requisite service period. To the extent a stock-based award is subject to a performance condition, the amount of expense recorded in a given period, if any, reflects an assessment of the probability of achieving such performance condition, with compensation recognized once the event is deemed probable to occur. The fair value of equity awards has been estimated using a market approach. Forfeitures are recognized as incurred.

The Company’s Founder Shares were granted to certain independent directors subject to a performance condition, namely the occurrence of a Business Combination. This performance condition is considered in determining the grant date fair value of these instruments using Monte Carlo simulation. Compensation expense related to the Founder Shares is recognized only when the performance condition is probable of occurrence, or more specifically when a Business Combination is consummated. Therefore, no stock-based compensation expense has been recognized during the period ended March 31, 2023 or March 31, 2022.

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 Deposit Insurance Corporation coverage limit of $250,000. At March 31, 2023 and December 31, 2022, the Company has not experienced losses on these accounts and management believes the Company is not exposed to significant risks on such account.

Fair Value of Financial Instruments

ASC 820, “Fair Value Measurement”, defines fair value as the amount that would be received to sell an asset or paid to transfer a liability, in an orderly transaction between market participants.

Fair value measurements are classified on a three-tier hierarchy as follows:

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GARDINER HEALTHCARE ACQUISITIONS CORP.

NOTES TO CONDENSED FINANCIAL STATEMENTS

MARCH 31, 2023

(UNAUDITED)

In many cases, a valuation technique used to measure fair value includes inputs from multiple levels of the fair value hierarchy described above. The lowest level of significant input determines the placement of the entire fair value measurement in the hierarchy.

The fair value of the Company’s assets and liabilities other than the derivative warrant liabilities, which qualify as financial instruments approximates the carrying amounts represented in the balance sheets, primarily due to its short-term nature.

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 ASC 815. Derivative instruments are initially recorded at fair value on the grant date and re-valued at each reporting date, with changes in the fair value reported in the statements of operations. Derivative assets and 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.

Income Taxes

The Company complies with the accounting and reporting requirements of ASC 740, “Income Taxes” (“ASC 740”), which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

As of March 31, 2023 and December 31, 2022, the Company’s deferred tax asset had a full valuation allowance recorded against it. The Company’s effective tax rate was 2.2% and 0.0% for the three months ended March 31, 2023 and 2022, respectively. The effective tax rate differs from the statutory tax rate of 21% for the three months ended March 31, 2023 and 2022 due to changes in fair value in warrant liability, the discount to fair value on the convertible promissory notes, the Sponsor Support Agreement Pledge (see Note 3) and the valuation allowance on the deferred tax assets.

While ASC 740 identifies usage of an effective annual tax rate for purposes of an interim provision, it does allow for estimating individual elements in the current period if they are significant, unusual or infrequent. Computing the effective tax rate for the Company is complicated due to the potential impact of the Company’s change in fair value of warrants (or any other change in fair value of a complex financial instrument), the timing of any potential business combination expenses and the actual interest income that will be recognized during the year. The Company has taken a position as to the calculation of income tax expense in a current period based on ASC 740-270-25-3 which states, “If an entity is unable to estimate a part of its ordinary income (or loss) or the related tax (benefit) but is otherwise able to make a reasonable estimate, the tax (or benefit) applicable to the item that cannot be estimated shall be reported in the interim period in which the item is reported.” The Company believes its calculation to be a reliable estimate and allows it to properly take into account the usual elements that can impact its annualized book income and its impact on the effective tax rate. As such, the Company is computing its taxable income (loss) and associated income tax provision based on actual results through March 31, 2023.

The Company is taking the position that the deferred tax asset related to the unutilized net operating loss (“NOL” should still be fully reserved. While interest rates have increased, the actual amount of interest income for tax purposes may differ significantly due to the timing of treasuries purchased, whether the Company invests in treasuries or potential unrealized interest income based on maturity. Additionally, the NOL utilization is limited to 80% so the approach and estimate used in the interim period is conservative in nature while reviewing the pertinent facts unique to the Company’s income tax situation.

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

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GARDINER HEALTHCARE ACQUISITIONS CORP.

NOTES TO CONDENSED FINANCIAL STATEMENTS

MARCH 31, 2023

(UNAUDITED)

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 March 31, 2023 and December 31, 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 taxation 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.

Common stock subject to Possible Redemption

The Company accounts for its common stock subject to possible redemption in accordance with the guidance in ASC 480. Shares of common stock subject to mandatory redemption (if any) is classified as a liability instrument and is measured at fair value. Conditionally redeemable common stock (including common stock that features redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) is classified as temporary equity. At all other times, common stock is classified as stockholders’ equity. The Company’s Public Shares sold in the IPO feature certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. On December 21, 2022, as a result of the Company’s special meeting, the holders of 6,689,428 shares of common stock of the Company properly exercised their right to redeem their shares for cash at a redemption price of approximately $10.19 per share, for an aggregate redemption amount of approximately $68,165,271. The amount was based on an estimate of the amount of funds available to the redeemable shareholders at the time of the redemption. As a correction of an immaterial error, in January 2023, a revision to the redemption price was paid to the redeeming stockholders for an aggregate of $187,074 or approximately $0.03 per share. On March 31, 2023 and December 31, 2022, 1,935,572 shares of common stock subject to possible redemption is presented as temporary equity, outside of the stockholders’ deficit section of the Company’s balance sheets.

Net Income (Loss) per Common Share

The Company complies with accounting and disclosure requirements of ASC 260, Earnings Per Share. The Company has redeemable and nonredeemable shares of common stock. Income and losses are shared pro rata between the redeemable and nonredeemable shares of common stock. Net income (loss) per share of common stock is calculated by dividing the net income (loss) by the weighted average shares of common stock outstanding for the respective period. Net loss for the period from inception to IPO was allocated fully to the nonredeemable shares of common stock. Diluted net loss per share attributable to stockholders adjusts the basic net loss per share attributable to stockholders and the weighted-average shares of common stock outstanding for the potentially dilutive impact of outstanding warrants. However, because the warrants are anti-dilutive, diluted loss per share of common stock is the same as basic loss per share of common stock for the period presented.

With respect to the accretion of redeemable shares of common stock subject to possible redemption and consistent with ASC Topic 480-10-S99-3A, the Company treated accretion in the same manner as a dividend, paid to the stockholder in the calculation of the net income (loss) per share of common stock.

The following table reflects the calculation of basic and diluted net loss per share of common stock (in dollars, except per share amounts):

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GARDINER HEALTHCARE ACQUISITIONS CORP.

NOTES TO CONDENSED FINANCIAL STATEMENTS

MARCH 31, 2023

(UNAUDITED)

For the three months ended March 31, 2023:

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​

Basic and diluted net (loss) income per share:

​

​

For the three months ended March 31, 2022:

​

​

Basic and diluted net (loss) income per share:

​

​

Accounting for Warrants

The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the instruments’ specific terms and applicable authoritative guidance in ASC 480 and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the instruments are free standing financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the instruments meet all of the requirements for equity classification under ASC 815, including whether the instruments are indexed to the Company’s own common stock and whether the instrument holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, was conducted at the time of warrant issuance and as of each subsequent period end date while the instruments are outstanding. Management has concluded that the Public Warrants qualify for equity accounting treatment and Private Placement Warrants qualify for liability accounting treatment.

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GARDINER HEALTHCARE ACQUISITIONS CORP.

NOTES TO CONDENSED FINANCIAL STATEMENTS

MARCH 31, 2023

(UNAUDITED)

Recent Accounting Pronouncements

The Company’s management does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company’s condensed financial statements.

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​

Note 3 — Related Party Transactions

Founder Shares

On March 25, 2021, the Initial Stockholders purchased 2,156,500 shares (the “Founder Shares”) of the Company’s common stock, par value $0.0001 per share for an aggregate price of $25,000.

The initial stockholders have agreed, subject to limited exceptions, not to transfer, assign or sell any of their Founder Shares until (A) with respect to 50% of the Founder Shares, the earlier of six months after the date of the consummation of the initial Business Combination and date on which the closing price of the common stock equals or exceeds $12.50 per share (as adjusted for share splits, share capitalizations, reorganization and recapitalizations) for any 20 trading days within any 30-trading day period commencing after the initial Business Combination, and (B) with respect to the remaining 50% of the Founder Shares, six month after the date of the consummation of the initial Business Combination, or earlier, in either case, if, subsequent to the initial Business Combination, the Company completes a liquidation, merger, share exchange or other similar transaction which results in all of the Company’s stockholders having the right to exchange their shares for cash, securities or other property.

The Initial Stockholders have agreed to waive their liquidation rights with respect to the Founder Shares if the Company fails to complete a Business Combination within the Combination Period. However, if the Initial Stockholders should acquire Public Shares in or after the Initial Public Offering, they will be entitled to liquidating distributions from the Trust Account with respect to such Public Shares if the Company fails to complete a Business Combination within the Combination Period. Chardan has agreed to waive their rights to its Business Combination marketing agreement fee (see Note 4) held in the Trust Account in the event the Company does not complete a Business Combination within the Combination Period, and, in such event, such amounts will be included with the other funds held in the Trust Account that will be available to fund the redemption of the Public Shares. In the event of such distribution, it is possible that the per share value of the residual assets remaining available for distribution (including Trust Account assets) will be only $10.10 per shares held in the Trust Account. In order to protect the amounts held in the Trust Account, the Sponsor has agreed to be liable to the Company if and to the extent any claims by a vendor 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. This liability will not apply with respect to any claims by a third party who executed a waiver of any right, title, interest or claim of any kind in or to any monies held in the Trust Account or to any claims under the Company’s indemnity of the underwriters of the Initial Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third-party claims. The Company will seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers (except the Company’s independent registered public accounting firm), prospective target businesses or other entities with which the Company does business, execute agreements waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.

Non-Convertible Promissory Notes – Related Parties

On March 25, 2021, the Sponsor agreed to loan the Company an aggregate of up to $300,000 to cover expenses related to the IPO pursuant to a sponsor note, which was amended and restated by that certain amended and restated promissory note dated July 30, 2021, and further amended and restated by that certain second amended and restated promissory note dated December 13, 2021 (the “Initial Note”). This loan was non-interest bearing and became payable on IPO.

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GARDINER HEALTHCARE ACQUISITIONS CORP.

NOTES TO CONDENSED FINANCIAL STATEMENTS

MARCH 31, 2023

(UNAUDITED)

On December 7, 2022, the Company issued a Third Amended and Restated Promissory Note (the “Amended Initial Note”) to Gardiner Healthcare Holdings, LLC, a Delaware limited liability company (the “Lender”), one of the Company’s sponsors. The Amended Initial Note amends, restates, replaces and supersedes the Initial Promissory Note dated December 13, 2021, as amended. Pursuant to the Amended Initial Note, the Lender agreed to loan the Company up to an aggregate principal amount of $1,500,000. The Amended Initial Note is non-interest bearing and all outstanding amounts under the Amended Initial Note is due on the earlier of: (i) June 27, 2023, or (ii) the date on which the Company consummates an initial business combination.

On March 24, 2023, the Company issued an unsecured promissory note to Gardiner Warrant Holdings LLC, an affiliate of the Company (the “Warrant Holdings Promissory Note”), pursuant to which the Company was entitled to borrow an aggregate of $14,190. The Warrant Holdings Promissory Note was non-interest bearing and all outstanding amounts under the Warrant Holdings Promissory Note would have been due on the earlier of: (i) June 27, 2023, or (ii) the date on which the Company consummates an initial business combination.

As of March 31, 2023 and December 31, 2022, $347,255 and $593,690 was outstanding under the Amended Initial Note and the Warrant Holdings Promissory Note and are reported on the condensed balance sheets as Notes payable - related party.

Non-Convertible Promissory Notes

In April 2023, the Company entered into an unsecured promissory note to an unrelated third party for an aggregate of $30,000 (“MR Promissory Note”). The MR Promissory Note was non-interest bearing, was not convertible into any securities of the Company, and all outstanding amounts under the MR Promissory Note would have been due on the earlier of: (i) June 27, 2023, or (ii) the date on which the Company consummates an initial Business Combination. There were no covenants associated with the MR Promissory Note.

Convertible Promissory Notes

In order to finance transaction costs in connection with a Business Combination, during the three months ended March 31, 2023, the Company entered into multiple convertible promissory notes (the “Working Capital Loans”). As of March 31, 2023 and December 31, 2022, $791,359 and $0, respectively, was drawn on the Working Capital Loans. The Working Capital Loans are reported as convertible promissory notes, at a fair value of $713,285 and $0 at March 31, 2023 and December 31, 2022, respectively, on the accompanying condensed balance sheets.

There were no covenants associated with the Working Capital Loans.

The Company accounts for the Working Capital Loans in accordance with the guidance contained in ASC 825 “Financial Instruments”. Such guidance allows for, and the Company  elected to report the value of the Working Capital Loans under the fair value option. Accordingly, the Company classified each of the Working Capital Loans as a liability at its fair value and recognizes each borrowing, when drawn, at fair value with a gain or loss recognized at issuance. This liability would have been subject to re-measurement at each balance sheet date. With each such re- measurement, the liability would have been adjusted to fair value, with the change in fair value recognized in the statements of operations.

From April 18, 2023 to May 1, 2023, the Company issued additional convertible promissory notes (“Supplemental Working Capital Loans”) and borrowed an aggregate of $350,000 of an aggregate of $425,000 available. The Supplemental Working Capital Loans contain the same terms as the Working Capital Loans, were non-interest bearing and were to be used for a portion of the expenses of the Company.

The Working Capital Loans and the Supplemental Working Capital Loans (in total, “Convertible Notes”) were non-interest bearing and were to be used for a portion of the expenses of the Company. The Convertible Notes were due the earlier of June 27, 2023, or the date of a Business Combination. If the Company completed a business combination, the Company would have repaid the Convertible Notes out of the proceeds of the Trust Account released to the Company. Otherwise, the Convertible Notes would have been repaid only out of funds held outside the Trust Account. Additionally, the issuers of the Convertible Notes could have converted the unpaid principal balance into whole warrants (“Conversion Warrants”) identical to the Private Placement Warrants at a conversion price equal to $1.00 per warrant. As described below, on June 29, 2023, the Convertible Notes were cancelled in full without any payment required by the Company.

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GARDINER HEALTHCARE ACQUISITIONS CORP.

NOTES TO CONDENSED FINANCIAL STATEMENTS

MARCH 31, 2023

(UNAUDITED)

Cancellation of Notes

On June 29, 2023, the Company, the Sponsor (together with Company the “Borrowers” and each a “Borrower”) and the issuers of the Non-convertible Notes and Convertible Notes (together “Lenders”), entered into a Cancellation and Release Agreement (the “Cancellation and Release Agreement”) pursuant to which each Borrower and Lenders agreed that in consideration for the Lenders receiving membership units in Gardiner Founder LLC, a Delaware limited liability company (“Gardiner Founder”), which is the parent of the Sponsor, the aggregate of $1,485,549 in outstanding principal under the Non-convertible Notes and the Convertible Notes, were cancelled without any payment required by the Borrower to the Lender.

Below is a summation of each note and amounts cancelled for each note as of June 29, 2023, the date of the Cancellation and Release Agreement.

​

Sponsor Support Agreement Pledge

​

In connection with entering into the Convertible Promissory Notes, the Company’s Sponsors entered into a Sponsor Support Agreement (the “Sponsor Support Agreement Pledge”), pursuant to which, among other things, the Sponsors agreed to assign and transfer to the issuers of the Convertible Promissory Notes a certain number of shares of Common Stock owned by the Sponsors upon completion of a Business Combination in accordance with the terms of such Sponsor Support Agreement Pledge, as an inducement for the issuers to make the loan. As of March 31, 2023, 79,009 shares had been pledged to be transferred to the issuers of the Convertible Promissory Notes. In accordance with the SEC’s Staff Accounting Bulletin (“SAB”) Topic 5T, “Accounting for Expenses or Liabilities Paid by Principal Stockholders”, at the date of the issuance, the Company recognized an expense of $78,646 related to the obligation to transfer the shares as reported on the condensed statement of operations.

The fair value of the Sponsor Support Agreement Pledge was determined as of the issuance date using a probability-weighted income approach as the Sponsor Support Agreement Pledge contained various settlement outcomes and used the closing price of the Class A common stock adjusted for a discount for lack of marketability. The significant assumptions used to estimate the fair value of the Sponsor Support Agreement Pledge involved inherent uncertainties and the application of significant judgment. The estimated fair value of the Sponsor Support Agreement Pledge was determined using Level 3 inputs.

In connection with the Cancellation and Release Agreement, the Lenders entered into a Termination of Sponsor Support Agreements Pledge (“Termination Agreement”), effective as of June 29, 2023, pursuant to which the Sponsors and the Lenders agreed to terminate the various Sponsor Support Agreement Pledges.

Support Services

The Company paid the Sponsor fees following the consummation of the IPO until the earlier of the consummation of a Business Combination or liquidation for administrative support services. This fee is capped at $300,000. For the three months ended March 31, 2023 and 2022, $0 and $30,000, respectively, has been expensed and paid for these services. At March 31, 2023 and December 31, 2022 no amounts were due for these services.

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GARDINER HEALTHCARE ACQUISITIONS CORP.

NOTES TO CONDENSED FINANCIAL STATEMENTS

MARCH 31, 2023

(UNAUDITED)

Consulting Fees

The Company pays certain officers and directors of the Company an aggregate of approximately $38,750 per month following the consummation of the IPO until the earlier of the consummation of a Business Combination for consulting services. For the three months ended March 31, 2023 and 2022, $106,465 and $107,890 has been expensed under this arrangement, respectively. At March 31, 2023 and December 31, 2022 no amounts were due for these services.

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NOTE 4 — COMMITMENTS AND CONTINGENCIES

Registration Rights

The holders of Founder Shares, Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans, if any, will be entitled to registration rights pursuant to a registration rights agreement to be signed in relation to the IPO. These holders will be entitled to certain demand and “piggyback” registration rights. However, the registration rights agreement provides that the Company will not permit any registration statement filed under the Securities Act to become effective until the termination of the applicable lock-up period for the securities to be registered. The Company will bear the expenses incurred in connection with the filing of any such registration statements.

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Business Combination Marketing Agreement

​

The Company has engaged Chardan as an advisor in connection with a Business Combination to introduce us to potential investors that are interested in purchasing the Company’s securities in connection with a potential Business Combination, assist the Company in obtaining stockholder approval for a Business Combination and assist the Company with its press releases and public filings in connection with a Business Combination. The Company will pay Chardan the Marketing Fee for such services upon the consummation of an initial Business Combination in an amount equal to 3.5% of the gross proceeds of the IPO, including any proceeds from the full or partial exercise of the over-allotment option (exclusive of any other fees which might become payable pursuant to any other agreement among Chardan and the Company or any target business). The Company has also agreed, pursuant to the business combination marketing agreement, to retain Chardan as lead financial advisor to the Company in connection with an initial Business Combination, and as a non-exclusive placement agent in connection with any private placement undertaken in connection with such business combination, in each case on mutually agreeable terms and conditions and pursuant to one or more separate engagement letters to be entered into between the parties. $3,018,750 would be payable from the proceeds held in the Trust Account under this arrangement upon the successful completion of a Business Combination.

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Note 5 — Warrant Liabilities

The Company accounts for the 4,843,750 Private Placement Warrants in accordance with the guidance contained in ASC 815. Such guidance provides that because the warrants do not meet the criteria for equity treatment thereunder, each warrant must be recorded as a liability. Accordingly, we have classified each Private Placement Warrant as a liability at its fair value. This liability is subject to re-measurement at each balance sheet date. With each such re- measurement, the warrant liability will be adjusted to fair value, with the change in fair value recognized in our statements of operations.

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Note 6 — 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 shares with such designations, voting and other rights and preferences as may be determined from time to time by the Company’s board of directors. For the periods presented, there were no shares of preferred stock issued or outstanding.

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GARDINER HEALTHCARE ACQUISITIONS CORP.

NOTES TO CONDENSED FINANCIAL STATEMENTS

MARCH 31, 2023

(UNAUDITED)

Common stock

The Company is authorized to issue 50,000,000 shares of common stock with a par value of $0.0001 per share. As of March 31, 2023 and December 31, 2022 there were 2,156,250 shares of common stock outstanding (excluding 1,935,572 shares of common stock subject to possible redemption).

On October 15, 2021, Gardiner Healthcare, Chardan Gardiner and CCMAUS collectively granted 100,000 founder shares to our independent directors, Dr. Linton, Dr. Sciavolino, Mr. Ryan, and Mr. Rossen, with each independent director receiving 25,000 founder shares. Independent directors acknowledge that if either (i) the Company is no longer in good faith pursuing the consummation of an initial public offering of the Company; or (ii) at any time prior to consummation of an initial Business Combination, (a) independent director resigns as a director of the Company (other than a resignation in connection with such business combination), for any reason or no reason, or (b) independent director is removed as a director of the Company for cause, then, upon written notice, the transferred shares shall automatically be forfeited and transferred back for no consideration (see Note 8).

Warrants

The Public Warrants are accounted for as an equity instrument in the Company’s financial statements. The Public Warrants will become exercisable on the later of (a) 30 days after the completion of a Business Combination or (b) 12 months from the closing of the IPO. No warrants will be exercisable for cash unless the Company has an effective and current registration statement covering the shares of common stock issuable upon exercise of the warrants and a current prospectus relating to such shares of common stock. Notwithstanding the foregoing, if a registration statement covering the shares of common stock issuable upon exercise of the Public Warrants is not effective within a specified period following the consummation of a Business Combination, warrant holders may, until such time as there is an effective registration statement and during any period when the Company shall have failed to maintain an effective registration statement, exercise warrants on a cashless basis pursuant to the exemption provided by Section 3(a)(9) of the Securities Act, provided that such exemption is available. If that exemption, or another exemption, is not available, holders will not be able to exercise their warrants on a cashless basis. The Public Warrants will expire five years after the completion of a Business Combination or earlier upon redemption or liquidation.

Once the warrants become exercisable, the Company may redeem the Public Warrants:

If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement. The Private Placement Warrants will be identical to the Public Warrants underlying the Units being sold in the IPO, except that the Private Placement Warrants and the shares of common stock issuable upon the exercise of the Private Placement Warrants will not be transferable, assignable or salable until after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants will be exercisable for cash or on a cashless basis, at the holder’s option, and be non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Private Placement Warrants are held by someone other than the initial purchasers or their permitted

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GARDINER HEALTHCARE ACQUISITIONS CORP.

NOTES TO CONDENSED FINANCIAL STATEMENTS

MARCH 31, 2023

(UNAUDITED)

transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants.

The exercise price and number of shares of common stock issuable on exercise of the Public Warrants and Private Placement Warrants may be adjusted in certain circumstances including in the event of a stock dividend, extraordinary dividend or our recapitalization, reorganization, merger or consolidation. However, the Public Warrants and Private Placement Warrants will not be adjusted for issuances of shares of common stock at a price below their respective exercise prices. Additionally, in no event will the Company be required to net cash settle the Public Warrants and Private Placement Warrants. If the Company is unable to complete a Business Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of warrants will not receive any of such funds with respect to their warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with the respect to such warrants. Accordingly, the warrants may expire worthless.

In addition, if the Company issues additional shares of common stock or equity-linked securities for capital raising purposes in connection with the closing of a Business Combination at an issue price or effective issue price of less than $9.20 per share of common stock (with such issue price or effective issue price to be determined in good faith by the Company’s Board of Directors, and in the case of any such issuance to the initial stockholders or their affiliates, without taking into account any Founder Shares held by them prior to such issuance), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of a Business Combination on the date of the consummation of a Business Combination (net of redemptions), and (z) the volume weighted average trading price of the Company’s common stock during the 20 trading day period starting on the trading day prior to the day on which the Company consummates Business Combination (such price, the “Market Value”) is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the greater of (i) the Market Value or (ii) the price at which the Company issues the additional shares of common stock or equity-linked securities.

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GARDINER HEALTHCARE ACQUISITIONS CORP.

NOTES TO CONDENSED FINANCIAL STATEMENTS

MARCH 31, 2023

(UNAUDITED)

​

Note 7 — Fair Value Measurements

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).

At March 31, 2023 and December 31, 2022, the assets held in the Trust Account were in an interest bearing demand deposit account. All of the Company’s investments held in the Trust Account are classified as trading securities.

The following table presents information about the Company’s liabilities that are measured at fair value on a recurring basis at March 31, 2023 and December 31, 2022 and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value.

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The Company utilizes a Monte Carlo simulation model to value the Private Placement Warrants at each reporting period, with changes in fair value recognized in the statement of operations. The estimated fair value of the Private Placement Warrant liability is determined using Level 3 inputs. Inherent in a Monte Carlo pricing model are assumptions related to expected share-price volatility, expected life, risk-free interest rate and dividend yield. The Company estimates the volatility of its common shares based on industry historical volatility that matches the expected remaining life of the Private Placement Warrants. The risk-free interest rate is based on the U.S. Treasury zero-coupon yield curve on the grant date for a maturity similar to the expected remaining life of the Private Placement Warrants. The expected life of the Private Placement Warrants is assumed to be equivalent to their remaining contractual term. The dividend rate is based on the historical rate, which the Company anticipates to remain at zero.

The following table provides quantitative information regarding Private Placement Warrants Level 3 fair value measurements at March 31, 2023 and at December 31, 2022:

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GARDINER HEALTHCARE ACQUISITIONS CORP.

NOTES TO CONDENSED FINANCIAL STATEMENTS

MARCH 31, 2023

(UNAUDITED)

The fair value of the convertible promissory notes was determined using a probability-weighted income approach as the convertible promissory notes contained various settlement outcomes. The significant assumptions used to estimate the fair value of the convertible promissory notes involved inherent uncertainties and the application of significant judgment and included the time to maturity and the probability of the various settlement outcomes. The sensitivity of these inputs to the fair value of the convertible notes is assessed on a periodic basis. The estimated fair value of the Convertible Promissory Notes is determined using Level 3 inputs.

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The following table provides quantitative information regarding Convertible Promissory Notes Level 3 fair value measurements at March 31, 2023:

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The following table provides a reconciliation of changes in fair value of the beginning and ending balances of the Company’s financial instruments classified as Level 3:

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GARDINER HEALTHCARE ACQUISITIONS CORP.

NOTES TO CONDENSED FINANCIAL STATEMENTS

MARCH 31, 2023

(UNAUDITED)

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Note 8 — Subsequent Events

Late Filing of Form 10-Q

On May 23, 2023, the Company received a late filer notification letter (the “Letter”) from the Listing Qualifications department of The Nasdaq Stock Market LLC (“Nasdaq”) notifying the Company that due to the delay in filing the Form 10-Q, the Company is not in compliance with Nasdaq Listing Rule 5250I(1), which requires listed companies to timely file all periodic financial reports with the SEC. The Letter had no immediate effect on the listing or trading of the Company’s common stock on the Nasdaq Global Market. As stated in the Letter, in accordance with Nasdaq rules, the Company had 60 calendar days (i.e., until July 24, 2023) to submit a plan to regain compliance and if Nasdaq accepts such plan, Nasdaq can grant an exception of up to 180 calendar days from the Form 10-Q’s due date, or until November 20, 2023, to file the Form 10-Q and regain compliance. On July 24, 2023, the Company submitted a plan in writing to Nasdaq to regain compliance. If Nasdaq does not accept the plan, the Company will have the opportunity to appeal that decision to a hearings panel.

Transfer Back of Interest and Forfeiture of Rights

On June 29, 2023, the Company, the Sponsor, Gardiner Founder, and Janelle Anderson and Dave Jenkins, among other parties (each individual a “Provider”, and collectively, the “Providers” and each a related party), entered into a letter agreement pursuant to which the Providers transferred their membership interests in the Sponsor, which corresponded to 80,000 shares of common stock, par value $0.0001 per share, of the Company back to the Sponsor in consideration for an interest in Gardiner Founder and in furtherance of the foregoing, agreed to forfeit any and all rights in the Sponsor, including without limitation any rights in the event the Company completes a Business Combination and any and all rights in any assets of the Sponsor.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

References in this report (this “Quarterly Report”) to “we,” “us” “our” or the “Company” refer to Gardiner Healthcare Acquisitions Corp. References to our “management” or our “management team” refer to our officers and directors, and references to the “Sponsor” refer to Gardiner Healthcare Holdings, LLC. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the financial statements and the notes thereto contained elsewhere in this Quarterly Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.

Special Note Regarding Forward-Looking Statements

This Quarterly Report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act that are not historical facts and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements, other than statements of historical fact included in this Form 10-Q including, without limitation, statements in this “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. Words such as “expect,” “believe,” “anticipate,” “intend,” “estimate,” “seek” and variations and similar words and expressions are intended to identify such forward-looking statements. Such forward-looking statements relate to future events or future performance, but reflect management’s current beliefs, based on information currently available. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the Risk Factors section of the Company’s final prospectus filed with the SEC. The Company’s securities filings can be accessed on the EDGAR section of the SEC’s website at www.sec.gov. Except as expressly required by applicable securities law, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.

Overview

We are a blank check company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more target businesses. We intend to effectuate our business combination using cash from the proceeds of IPO and the sale of the placement units that occurred simultaneously with the completion of our IPO, our capital stock, debt or a combination of cash, stock and debt.

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

Results of Operations

We have neither engaged in any operations nor generated any operating revenues to date. Our only activities from inception through March 31, 2023, were organizational activities and those necessary to prepare for and close the IPO, described below, and since the IPO, the search for a prospective initial business combination. We do not expect to generate any operating revenues until after the completion of an initial business combination, at the earliest. We have generated and expect to continue to generate non-operating income in the form of interest income from the proceeds of the IPO placed in the Trust Account. We have incurred and expect that we will 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 in connection with searching for, and completing, a business combination.

For the three months ended March 31, 2023, we had a net loss of $421,449, which consists of operating expenses of $571,762 (driven by general and administrative expenses of $439,397, administrative support costs of $106,465, and accrual of Delaware franchise taxes of $25,900), sponsor support agreements of $78,646 and income tax expense of $9,128, offset by the change in fair value of warrants $90,647, change in fair value on convertible promissory notes $78,074, and interest income of $69,366.

For the three months ended March 31, 2022, we had a net profit of $447,065 which consists of the change in fair value of warrants of $964,667 and an unrealized gain on investments held in Trust account of $8,363 partially offset by operating expenses of $525,965 (driven by general and administrative expenses of $368,075, administrative support costs of $107,890, and accrual of Delaware franchise taxes of $50,000).

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Liquidity and Going Concern

On December 27, 2021, the Company consummated its initial public offering (the “IPO”) of 8,625,000 units (the “Units”) generating gross proceeds of $86,250,000. Each Unit consists of one share of common stock, and one redeemable warrant (each, a “Public Warrant”). Each Public Warrant entitles the holder to purchase one share of common stock at a price of $11.50 per share, subject to adjustment at the closing of a business combination.

On December 27, 2021, simultaneously with the consummation of the IPO, the Company consummated the issuance and sale (“Private Placement”) of 4,450,000 Private Placement Warrants (the “Private Placement Warrants”) in a private placement transaction at a price of $1.00 per Private Placement Warrant, generating gross proceeds of $4,450,000. Each whole Private Placement Warrant will be exercisable to purchase one share of common stock at a price of $11.50 per share. A portion of the proceeds from the Private Placement Warrants were added to the proceeds from the IPO to be held in the Trust Account. If the Company does not complete a business combination within the Combination Period, the proceeds from the sale of the Private Placement Warrants will be used to fund the redemption of the Public Shares (subject to the requirements of applicable law), and the Private Placement Warrants and all underlying securities will be worthless.

On December 29, 2021, the underwriters exercised the over-allotment option in full pursuant to which an additional 1,125,000 Units at a price of $10.00 per Unit were sold. The Over-allotment Units are identical to the Units sold at IPO.

Upon the closing of the Over-allotment on December 29, 2021, the Company consummated a private sale of an additional 393,750 Private Placement Warrants at a price of $1.00 per Private Placement Warrant, generating gross proceeds of $393,750. As of December 29, 2021, a total of $87,112,500 of the net proceeds from the IPO (including the Over-allotment Units) and the sale of Private Placement Warrants was placed in a U.S.-based trust account.

For the three months ended March 31, 2023, cash used in operating activities was $218,143, cash provided by investing activities was $17,678 and cash provided by financing activities was $357,850.

For the three months ended March 31, 2022, cash used in operating activities was $906,452.

As of March 31, 2023, we had investments held in the trust account of $20,277,303. We intend to use substantially all of the funds held in the trust account, including any amounts representing interest earned on the trust account (less taxes payable), to complete our business combination. To the extent that our capital stock or debt is used, in whole or in part, as consideration to complete our business combination, the remaining proceeds held in the Trust Account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.

As of March 31, 2023, we had cash of $173,195 outside of the trust account. 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 office, similar locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses, and structure, negotiate and complete a business combination.

In connection with the Company’s assessment of going concern considerations in accordance with the authoritative guidance in Financial Accounting Standard Board (“FASB”) 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 mandatory liquidation and subsequent dissolution described in the financial statements, should the Company be unable to complete a business combination, raises substantial doubt about the Company’s ability to continue as a going concern. The Company has until July 27, 2023 (as extended) to consummate a business combination with the option to extend up to two (5) times by an additional month each time (or up to December 27, 2023) by depositing into the trust account $100,000 for each additional month extension. It is uncertain that the Company will be able to consummate a business combination by the specified period. If a business combination is not consummated by July 27, 2023, as extended and the monthly options to extend up to December 27, 2023 are not exercised (and the stockholders of the Company do not agree to further amend our amended and restated certificate of incorporation to allow for a further extension of the Combination Period beyond July 27, 2023), there will be a mandatory liquidation and subsequent dissolution. 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.

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.

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Promissory Notes

On March 24, 2023, we issued an unsecured promissory note to Gardiner Warrant Holdings LLC, an affiliate of the Company (the “Warrant Holdings Promissory Note”), pursuant to which the Company is entitled to borrow an aggregate of $14,190. The Warrant Holdings Promissory Note is non-interest bearing and all outstanding amounts under the Warrant Holdings Promissory Note will be due on the earlier of: (i) June 27, 2023, or (ii) the date on which the Company consummates an initial business combination.

In order to finance transaction costs in connection with a Business Combination, during the three months ended March 31, 2023, we entered into multiple convertible promissory notes (the “Working Capital Loans” or “Convertible Promissory Notes”). These Working Capital Loans are non-interest bearing and are to be used for a portion of the expenses of the Company. If we complete a business combination, we will repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. Otherwise, the Working Capital Loans would be repaid only out of funds held outside the Trust Account. Additionally, the issuer of the Working Capital Loans may convert the unpaid principal balance into whole warrants (“Conversion Warrants”) identical to the Private Placement Warrants at a conversion price equal to $1.00 per warrant (see Note 3).

We account for the Working Capital Loans in accordance with the guidance contained in ASC 825 “Financial Instruments”. Such guidance allows for, and the Company has elected to report the value of the Working Capital Loans under the fair value option. Accordingly, the Company has classified each the Working Capital Loans as a liability at its fair value and recognizes each borrowing, when drawn, at fair value with a gain or loss recognized at issuance. This liability is subject to re-measurement at each balance sheet date. With each such re- measurement, the liability will be adjusted to fair value, with the change in fair value recognized in the statements of operations.

Special Meeting

On June 20, 2023, the Company held a special meeting of stockholders (the “special meeting”). The stockholders approved the proposal to amend (the “Charter Amendment”) the Company’s Charter by allowing the Company to extend (the “Extension”) the date by which it has to consummate a business combination (the “Combination Period”) for an additional one (1) month, from June 27, 2023 to July 27, 2023, by depositing into the trust account (the “trust account”) $100,000 (the “Extension Payment”) for the one-month extension, and thereafter to extend the Combination Period up to five (5) times by an additional month each time (or up to December 27, 2023) by depositing into the trust account $100,000 for each additional month extension. The Company has used funds from the Convertible Promissory Note to fund the Extension Payment.

In connection with the votes to approve the Extensions in June 2023, the holders of 332,922 shares of common stock of the Company properly exercised their right to redeem their shares for cash at a redemption price of approximately $10.51 per share, for an aggregate redemption amount of approximately $3,500,301, leaving approximately $16,850,066 in the trust account, based on the approximately $20,350,367 held in the trust account as of June 15, 2023 (less funds that may be withdrawn to pay taxes).

Business Combination Marketing Agreement

We have engaged Chardan Capital Markets, LLC (“Chardan”) as an advisor in connection with a business combination to introduce us to potential investors that are interested in purchasing our securities in connection with the potential business combination, assist us in obtaining stockholder approval for the business combination and assist us with our press releases and public filings in connection with the business combination. We will pay Chardan the Marketing Fee for such services upon the consummation of an initial business combination in an amount equal to 3.5% of the gross proceeds of the IPO, including proceeds from the exercise of the over-allotment option (exclusive of any other fees which might become payable pursuant to any other agreement among Chardan and the us or any target business). We have also agreed, pursuant to the business combination marketing agreement, to retain Chardan as lead financial advisor to us in connection with our initial business combination, and as a non-exclusive placement agent in connection with any private placement undertaken in connection with such business combination, in each case on mutually agreeable terms and conditions and pursuant to one or more separate engagement letters to be entered into between the parties.

JOBS Act

On April 5, 2012, the JOBS Act was signed into law. 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

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or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. As such, our financial statements may not be comparable to companies that comply with 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 control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act, (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 executive compensation to median employee compensation. These exemptions will apply for a period of five years following the completion of our IPO or until we are no longer an “emerging growth company,” whichever is earlier.

Critical Accounting Estimates

The preparation of condensed 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 not identified any critical accounting estimates other than significant assumptions made by management in the valuation of our derivative warrant liabilities and our convertible promissory notes.

Significant judgements are required by management in the valuation of our liability classified Private Placement Warrants and convertible promissory notes.

Inherent in a Monte Carlo pricing model we use for the Private Placement Warrants are assumptions related to expected share-price volatility, expected life, risk-free interest rate and dividend yield. The Company estimates the volatility of its common shares based on industry historical volatility that matches the expected remaining life of the Private Placement Warrants. The risk-free interest rate is based on the U.S. Treasury zero-coupon yield curve on the grant date for a maturity similar to the expected remaining life of the Private Placement Warrants. The expected life of the Private Placement Warrants is assumed to be equivalent to their remaining contractual term. The dividend rate is based on the historical rate, which the Company anticipates to remain at zero.

We use a probability-weighted income model to determine the fair value of our convertible promissory notes using assumptions related to expected share-price volatility, expected life, risk-free interest rate, dividend yield and the probability of expected outcomes. We estimate the volatility of our common shares based on industry historical volatility that matches the expected remaining life of the Convertible Promissory Notes. The risk-free interest rate is based on the U.S. Treasury zero-coupon yield curve on the grant date for a maturity similar to the expected remaining life of the Convertible Promissory Notes. The expected life of the Convertible Promissory Notes is assumed to be the time remaining until consummation of a business combination. The dividend rate is based on the historical rate, which we anticipate to remain at zero. For the probability of expected outcomes, management makes assumptions about assumed future potential outcomes and assigns a probability of outcome percentage to each event. Actual deviations from our assumptions may have a material effect on our condensed financial statements.

Recent Accounting Standards

See Note 2 to the financial statements required of this Quarterly Report on Form 10-Q.

ITEM 3. 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 4. CONTROLS AND PROCEDURES

Disclosure controls and procedures are controls and other procedures that are 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

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designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

Evaluation of Disclosure Controls and Procedures

As required by Rules 13a-15 and 15d-15 under the Exchange Act, our management carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures under the supervision of our Chief Executive Officer and our Chief Financial Officer and concluded that our disclosure controls and procedures were not effective as of March 31, 2023.

At December 31, 2022, we identified a material weakness in our internal control over financial reporting due to the classification of reinvestment of interest earned on investments held in our Trust Account in the statement of cash flows and our incorrect calculation of our earnings per share for the year ended December 31, 2022. At March 31, 2023, we identified additional material weaknesses our financial reporting processes related to the design of controls over the :

1.accrual of redemption payments; and

2.the review of third-party valuations.

Specifically, we did not design and maintain an effective control environment to prevent or detect material misstatements to the financial statements due to a lack of sufficient personnel with an appropriate level of internal control and accounting knowledge, training and experience commensurate with our financial reporting requirements.

Remediation Plan

Management plans to remediate the material weakness by enhancing our processes to identify and appropriately apply applicable accounting requirements and increased communication among our personnel and third-party professionals with whom we consult regarding accounting applications. To remediate these material weaknesses, we are developing a remediation plan with assistance from our accounting advisors and will dedicate additional resources and efforts to the remediation and improvement of our internal control over financial reporting. Specifically, management will implement an enhanced review of the financial statements. 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 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.

Changes in Internal Control Over Financial Reporting

During the most recently completed fiscal quarter, there has been no changes in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

None.

ITEM 1A. RISK FACTORS

Factors that could cause our actual results to differ materially from those in this Quarterly Report are any of the risks described in our Annual Report on Form 10-K filed with the SEC on April 17, 2023. Any of these factors could result in a significant or material adverse effect on our results of operations or financial condition. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations. There have been no material changes to the risk factors disclosed in our Annual Report on Form 10-K for the year ended December 31, 2022 except as discussed below:

The risk factor disclosure in our Annual Report on Form 10-K for the year ended December 31, 2022 set forth under the heading “Changes in laws or regulations, or a failure to comply with any laws and regulations, may adversely affect our business, investments and results of operations” is replaced in its entirety with the following risk factor:

“Changes in laws or regulations, or a failure to comply with any laws and regulations, may adversely affect our investments, 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 will be required to comply with certain SEC and other legal requirements. 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 March 30, 2022, the SEC issued proposed rules relating to, among other items, enhancing disclosures in business combination transactions involving SPACs and private operating companies; amending the financial statement requirements applicable to transactions involving shell companies; effectively limiting the use of projections in SEC filings in connection with proposed business combination transactions; increasing the potential liability of certain participants in proposed business combination transactions; and the extent to which SPACs could become subject to regulation under the Investment Company Act of 1940. These rules, if adopted, whether in the form proposed or in revised form, may materially adversely affect our ability to negotiate and complete our initial business combination and may increase the costs and time related thereto.”

A new 1% U.S. federal excise tax could be imposed on us in connection with redemptions by us of our shares in connection with an Initial Business Combination or otherwise.

On August 16, 2022, the Inflation Reduction Act (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 (including redemptions) of stock by publicly traded domestic (i.e., U.S.) corporations and certain domestic subsidiaries of publicly traded foreign corporations. The excise tax is imposed on the repurchasing corporation itself, not its stockholders from whom 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 United States Treasury Department has been given authority to provide regulations and other guidance to carry out, and prevent the abuse or avoidance of the excise tax. The IR Act applies only to repurchases that occur after December 31, 2022.

Any redemption or other repurchase that occurs after December 31, 2022, in connection with an initial business combination or otherwise may be subject to the excise tax. The mechanics of any required payment of the excise tax have not been determined.

Our failure to meet the continuing listing requirements of Nasdaq could result in a de-listing of our securities.

If we fail to satisfy the continuing listing requirements of The Nasdaq Stock Market LLC (“Nasdaq”), such as the corporate governance, minimum closing bid price requirements, or stockholders’ equity or minimum closing bid price requirements, Nasdaq may

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take steps to delist our securities. Such a delisting would likely have a negative effect on the price of our securities and would impair our shareholders’ ability to sell or purchase our securities. In the event of a delisting, if possible,  we would likely take actions to restore our compliance with Nasdaq’s listing requirements, but we can provide no assurance that any such action taken by us would allow our securities to become listed again, stabilize the market price or improve the liquidity of our securities, prevent our securities from dropping below the Nasdaq minimum bid price requirement or prevent future non-compliance with Nasdaq’s listing requirements.

On March 31, 2023, the Company received a letter from Nasdaq notifying the Company that, for the 30 consecutive trading days prior to the date of such letter, the common stock had traded at a value below the minimum $50,000,000 “Market Value of Listed Securities” (“MVLS”) requirement set forth in Nasdaq Listing Rule 5450(b)(2)(A), which is required for continued listing of the Company’s common stock on Nasdaq. Such letter is only a notification of deficiency, not of imminent delisting, and has no current effect on the listing or trading of the Company’s securities on Nasdaq.

In accordance with Nasdaq listing rule 5810(c)(3)(C), the Company has 180 calendar days, or until September 27, 2023, to regain compliance. The letter from Nasdaq notes that to regain compliance, the Company’s common stock must trade at or above a level such that the Company’s MVLS closes at or above $50,000,000 for a minimum of ten consecutive business days during the compliance period, which ends September 27, 2023. The letter further notes that if the Company is unable to satisfy the MVLS requirement prior to such date, the Company may be eligible to transfer the listing of its securities to The Nasdaq Capital Market (provided that it then satisfies the requirements for continued listing on that market).

The filing of this Form 10-Q does not bring us into compliance with Nasdaq Listing Rule 5450(b)(2)(A). If the Company does not regain compliance by September 27, 2023, Nasdaq staff will provide written notice to the Company that its securities are subject to delisting. At that time, the Company may appeal any such delisting determination to a hearings panel.

On May 23, 2023, we received a written notification (the “Notice Letter”) from the Nasdaq Listing Qualifications department indicating that we were not in compliance with Nasdaq Listing Rule 5250(c)(1), as a result of our failure to file this Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2023 (this “Form 10-Q”) with the Securities and Exchange Commission (the “Commission”). The Notice Letter stated that, under Nasdaq Listing Rules, we have 60 calendar days from the date of the Notice Letter to submit a plan to regain compliance and if Nasdaq accepts our plan, Nasdaq can grant an exception of up to 180 calendar days from the due date of this Form 10-Q, or until November 20, 2023, to regain compliance. We have filed this Form 10-Q to cure our 10-Q filing deficiency and regain compliance with Nasdaq Listing Rule 5250(c)(1).

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q.

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*These certifications are furnished to the SEC pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall they be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.

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SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

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