false FY 0001832950 P3D 1 1

 KRNL:UnitsEachConsistingOfOneClassOrdinaryShare0.0001ParValueAndOnehalfOfOneRedeemableWarrantMember

 KRNL:ClassOrdinarySharesIncludedAsPartOfUnitsMember

 KRNL:RedeemableWarrantsIncludedAsPartOfUnitsMember

 2024-03-11

 2024-03-11

 2023-10-01

 us-gaap: OverAllotmentOptionMember

 us-gaap: OverAllotmentOptionMember

 2023-02-03
 2023-02-03

 2023-02-03

 2023-08-03
 2023-08-03

 2023-08-03

 2023-02-09

 2023-03-07

 2023-04-04

 2023-05-09

 2023-06-06

 2023-07-05

 2023-09-05

 2023-10-05

 2023-11-06

 2023-12-05

 KRNL:OrdinaryClassBMember

 KRNL:OrdinaryClassAMember

 KRNL:AiroGroupHoldingsMember

 2023-03-02

 2023-03-02

 2023-08-29

 KRNL:PromissoryNoteMember

 KRNL:PromissoryNoteMember

 KRNL:ConvertiblePromissoryNoteMember

 KRNL:PromissoryNoteMember

 2021-02-01
 2021-02-28

 2023-03-23
 2023-03-23

 KRNL:AestherHealthCareConvertibleNoteMember

 2023-04-04
 2023-04-04

 KRNL:AestherHealthCareConvertibleNoteMember

 KRNL:AestherHealthCareConvertibleNoteMember

 2023-04-25
 2023-04-25

 2023-12-06
 2023-12-06

 2023-03-23

 KRNL:AestherHealthCareConvertibleNoteMember

 2023-04-04

 2023-04-25

 2023-12-06

 KRNL:OrdinaryClassAMember

 2020-11-19
 2020-11-19

 2021-01-10

 srt: DirectorMember

 KRNL:AdvisorMember

 2021-02-01

 KRNL:WorkingCapitalLoansMember
 KRNL:SponsorAffiliateOfSponsorOrCertainCompanyOfficersAndDirectorsMember

 KRNL:WorkingCapitalLoansMember
 KRNL:SponsorAffiliateOfSponsorOrCertainCompanyOfficersAndDirectorsMember

 KRNL:LoanAgreementsMember

 KRNL:LoanAgreementsMember

 us-gaap: RelatedPartyMember

 us-gaap: RelatedPartyMember

 us-gaap: RelatedPartyMember

 us-gaap: RelatedPartyMember

 KRNL:SellerMember

 2023-02-01
 2023-02-28

 KRNL:MutualTerminationAgreementMember

 KRNL:MutualTerminationAgreementMember

 KRNL:MutualTerminationAgreementMember

 KRNL:MutualTerminationAgreementMember
 us-gaap: OtherAffiliatesMember

 2023-03-23

 2023-04-25

 2023-12-06

 KRNL:FirstPolarFundConvertiblePromissoryNoteMember

 KRNL:SecondPolarFundConvertiblePromissoryNoteMember

 KRNL:ThirdPolarFundConvertiblePromissoryNoteMember

 KRNL:FirstPolarFundConvertiblePromissoryNoteMember

 KRNL:SecondPolarFundConvertiblePromissoryNoteMember

 KRNL:ThirdPolarFundConvertiblePromissoryNoteMember

 KRNL:FirstPolarFundConvertiblePromissoryNoteMember

 KRNL:SecondPolarFundConvertiblePromissoryNoteMember

 KRNL:ThirdPolarFundConvertiblePromissoryNoteMember

 KRNL:AestherHealthcareSponsorMember

 KRNL:ConvertiblePromissoryNoteMember
 KRNL:AestherHealthcareMember

 KRNL:ConvertiblePromissoryNoteMember
 KRNL:AestherHealthcareMember

 KRNL:ConvertiblePromissoryNoteMember
 KRNL:AestherHealthcareMember

 2023-05-24
 2023-05-24

 KRNL:FirstPremiumFinanceAgreementMember

 KRNL:FirstPremiumFinanceAgreementMember

 KRNL:FirstPremiumFinanceAgreementMember

 2023-02-27
 2023-02-28

 KRNL:FirstPremiumFinanceAgreementMember

 2023-03-27

 KRNL:SecondPremiumFinanceAgreementMember

 KRNL:SecondPremiumFinanceAgreementMember

 KRNL:SecondPremiumFinanceAgreementMember

 2023-02-27
 2023-02-28

 KRNL:SecondPremiumFinanceAgreementMember

 2023-03-27

 KRNL:FinanceAgreementMember

 KRNL:WarrantsAndRightsSubjectToMandatoryRedemptionOneMember

 KRNL:WarrantsAndRightsSubjectToMandatoryRedemptionOneMember

 KRNL:WarrantsAndRightsSubjectToMandatoryRedemptionOneMember

 us-gaap: MeasurementInputExercisePriceMember

 us-gaap: MeasurementInputSharePriceMember

 us-gaap: MeasurementInputRiskFreeInterestRateMember

 us-gaap: MeasurementInputPriceVolatilityMember

 KRNL:ProbabilityOfCompletingAnInitialBusinessCombinationMember

 us-gaap: MeasurementInputExercisePriceMember

 us-gaap: MeasurementInputSharePriceMember

 us-gaap: MeasurementInputRiskFreeInterestRateMember

 us-gaap: MeasurementInputPriceVolatilityMember

 KRNL:ProbabilityOfCompletingAnInitialBusinessCombinationMember

 2023-07-01
 2023-09-30

 2023-09-30

 2023-10-01

 2023-11-28

 2024-01-04

 2024-02-05

 KRNL:OneAccreditedInvestorsMember
 KRNL:FebruaryTwoThousandTwentyFourConvertiblePromissoryNotesMember

 KRNL:TwoAccreditedInvestorsMember
 KRNL:FebruaryTwoThousandTwentyFourConvertiblePromissoryNotesMember

 KRNL:ThreeAccreditedInvestorsMember
 KRNL:FebruaryTwoThousandTwentyFourConvertiblePromissoryNotesMember

 KRNL:OneAccreditedInvestorsMember

 KRNL:TwoAccreditedInvestorsMember

 KRNL:ThreeAccreditedInvestorsMember

 KRNL:Demand

 KRNL:Vote

 UNITED
STATES

 SECURITIES
AND EXCHANGE COMMISSION

 Washington,
D.C. 20549

 FORM

 (Mark
One)

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

 For
the fiscal year ended December 31, 2023

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

 For
the transition period from to

 (Exact
name of registrant as specified in its charter)

 Cayman
 Islands

 001-39983

 98-1567976

 (State
 or other jurisdiction of

 incorporation
 or organization)

 (Commission

 File
 Number)

 (I.R.S.
 Employer

 Identification
 Number)

 Madison Avenue, 8th Floor - Suite 8078

 New
 York, New York

 10022

 (Address
 of principal executive offices)

 (Zip
 Code)

 (646) 908-2659

 Registrant's
telephone number, including area code

 Not
Applicable

 (Former
name or former address, if changed since last report)

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

 Title
 of Each Class:

 Trading
 Symbol:

 Name
of Each Exchange on Which Registered:

 Units,
 each consisting of one Class A ordinary share, $0.0001 par value, and one-half of one redeemable warrant

 KRNLU

 Capital Market

 Class
 A ordinary shares included as part of the units

 KRNL

 Capital Market

 Redeemable
 warrants included as part of the units

 KRNLW

 Capital Market

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

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

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

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

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 and post such files). Yes No

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 definition of "large accelerated filer," "accelerated filer, "smaller
reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

 Large
 accelerated filer

 Accelerated
 filer

 Non-accelerated
 filer

 Smaller
 reporting company

 Emerging
 growth company

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

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

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

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

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

 As
of June 30, 2023 the last business day of the registrant's most recently completed second fiscal quarter, the aggregate market
value of the ordinary shares outstanding, other than shares held by persons who may be deemed affiliates of the registrant, computed
by reference to the closing sales price for the ordinary shares on June 30, 2023, as reported on Nasdaq, was approximately $ 80.0
million (based on the closing sales price of the Class A ordinary shares on June 30, 2023 of $10.49).

 As
of March 11, 2024, 509,341
 Class A ordinary shares, par value $0.0001 per
share, and 7,618,750
 Class B ordinary shares, par value $0.0001 per
share, were issued and outstanding.

 Documents
Incorporated by Reference: None.

 TABLE
OF CONTENTS

 Page

 CAUTIONARY
 NOTE REGARDING FORWARD-LOOKING STATEMENTS

 SUMMARY
 OF RISK FACTORS

 PART
 I

 Item
 1.

 Business

 Item
 1A.

 Risk
 Factors

 Item
 1B.

 Unresolved Staff Comments

 Item
 1C.

 Cybersecurity

 Item
 2.

 Properties

 Item
 3.

 Legal Proceedings

 Item
 4.

 Mine Safety Disclosures

 Item
 5.

 Market for Registrant's Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities

 Item
 6.

 Reserved.

 Item
 7.

 Management's Discussion and Analysis of Financial Condition and Results of Operations

 Item
 7A.

 Quantitative and Qualitative Disclosures about Market Risk

 Item
 8.

 Financial Statements and Supplementary Data

 Item
 9.

 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

 Item
 9A.

 Controls and Procedures

 Item
 9B.

 Other Information

 Item
 9C.

 Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

 Item
 10.

 Directors, Executive Officers and Corporate Governance Directors and Executive Officers

 Item
 11.

 Executive Compensation

 Item
 12.

 Security Ownership of Certain Beneficial Owners and management and Related Shareholder Matters

 Item
 13.

 Certain Relationships and Related Transactions, and Director Independence

 Item
 14.

 Principal Accountant Fees and Services

 Item
 15.

 Exhibits, Financial Statement Schedules

 Item
 16.

 Form 10-K Summary

 CAUTIONARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS

 This
Report, including, without limitation, statements under the heading "Management's Discussion and Analysis of Financial Condition
and Results of Operations," includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933,
as amended, (the "Securities Act") and Section 21E of the Securities Exchange Act of 1934, as amended, (the "Exchange
Act"). These forward-looking statements can be identified by the use of forward-looking terminology, including the words "believes,"
"estimates," "anticipates," "expects," "intends," "plans," "may,"
"will," "potential," "projects," "predicts," "continue," or "should,"
or, in each case, their negative or other variations or comparable terminology. There can be no assurance that actual results will not
materially differ from expectations. Such statements include, but are not limited to, any statements relating to our ability to consummate
any acquisition or other business combination and any other statements that are not statements of current or historical facts. These
statements are based on management's current expectations, but actual results may differ materially due to various factors, including,
but not limited to:

 our
 ability to select an appropriate target business or businesses;

 our
 ability to complete our initial business combination;

 our
 expectations around the performance of a prospective target business or businesses;

 our
 success in retaining or recruiting, or changes required in, our officers, key employees or directors following our initial business
 combination;

 our
 officers and directors allocating their time to other businesses and potentially having conflicts of interest with our business or
 in approving our initial business combination;

 our
 potential ability to obtain additional financing to complete our initial business combination;

 our
 pool of prospective target businesses;

 the
 ability of our officers and directors to generate a number of potential business combination opportunities;

 our
 public securities' potential liquidity and trading;

 the
 lack of a market for our securities;

 the
 use of proceeds not held in the Trust Account or available to us from interest income on the Trust Account balance;

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

 our
 financial performance following our initial public offering.

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

 SUMMARY
OF RISK FACTORS

 The
following is a summary of the principal risks described below in Part I, Item 1A "Risk Factors" in this Annual Report on
Form 10-K. We believe that the risks described in the "Risk Factors" section are material to investors, but other factors
not presently known to us or that we currently believe are immaterial may also adversely affect us. The following summary should not
be considered an exhaustive summary of the material risks facing us, and it should be read in conjunction with the "Risk Factors"
section and the other information contained in this Annual Report on Form 10-K.

 We
 are a company with no operating history and no revenues, and you have no basis on which to evaluate our ability
 to achieve our business objective.

 Past
 performance by our management team or their respective affiliates may not be indicative of future performance of an investment in
 us.

 Your
 only opportunity to affect the investment decision regarding a potential business combination may be limited to the exercise of your
 right to redeem your shares from us for cash.

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

 The
 ability of our public shareholders to exercise redemption rights with respect to a large number of our shares may not allow us to
 complete the most desirable business combination or optimize our capital structure.

 The
 requirement that we consummate an initial business combination within 36 (or 42, subject to six one-month extensions) months after
 the closing of our initial public offering may give potential target businesses leverage over us in negotiating a business combination
 and may limit the time we have in which to conduct due diligence on potential business combination targets, in particular as we approach
 our dissolution deadline, which could undermine our ability to complete our initial business combination on terms that would produce
 value for our shareholders.

 Our
 search for a business combination, and any target business with which we ultimately consummate a business combination, may be materially
 adversely affected by an outbreak of infectious diseases and the status of debt and equity markets.

 If
 we seek shareholder approval of our initial business combination, our Sponsor, executive officers, directors or their affiliates
 may elect to purchase public shares or warrants, which may influence a vote on a proposed business combination and reduce the public
 "float" of our Class A ordinary shares or public warrants.

 If
 a shareholder fails to receive notice of our offer to redeem our public shares in connection with our initial business combination,
 or fails to comply with the procedures for tendering its shares, such shares may not be redeemed.

 The SEC issued final rules
 to regulate special purpose acquisition companies that may increase our costs and the time needed to complete our initial business
 combination.

 Because of our limited
 resources and the significant competition for business combination opportunities, it may be more difficult for us to complete our
 initial business combination. If we have not consummated our initial business combination within the required time period, our public
 shareholders may receive only approximately $10.00 per public share, or less in certain circumstances, on the liquidation of our
 Trust Account and our warrants will expire worthless.

 If the net proceeds of
 the IPO and the sale of the private placement warrants not being held in the Trust Account are insufficient to allow us to operate
 for the 36 months (or 42 months, subject to six one-month extensions) following the closing of the IPO, it could limit the amount
 available to fund our search for a target business or businesses and our ability to complete our initial business combination, and
 we will depend on loans from our Sponsor, its affiliates or members of our management team to fund our search and to complete our
 initial business combination.

 You
 will not have any rights or interests in funds from the Trust Account, except under certain limited circumstances. Therefore, to
 liquidate your investment, you may be forced to sell your public shares or warrants, potentially at a loss.

 You
 will not be entitled to protections normally afforded to investors of many other blank check companies.

 The waiver of fees by Citigroup Global Markets Inc. may indicate that they
may be unwilling to be associated with our initial business combination.

 Nasdaq may delist our securities from its exchange which could limit investors'
ability to make transactions in our securities and subject us to additional trading restrictions

 If
 we seek shareholder approval of our initial business combination and we do not conduct redemptions pursuant to the tender offer rules,
 and if you or a "group" of shareholders are deemed to hold in excess of 15% of our Class A ordinary shares, you will
 lose the ability to redeem all such shares in excess of 15% of our Class A ordinary shares.

 Our independent registered public accounting firm's report contains
an explanatory paragraph that expresses substantial doubt about our ability to continue as a "going concern."

 we instructed Continental Stock Transfer & Trust Company to hold the funds in the Trust Account in an interest-bearing demand
 deposit account at a bank until the earlier of the consummation of our initial business combination or our liquidation, following
 such liquidation of investments in the Trust Account, we will receive less interest on the funds held in the Trust Account than we
 would have received had we not liquidated such investments in the Trust Account, which would reduce the dollar amount our Public
 Shareholders would receive upon any redemption or liquidation of the Company.

 Subsequent
 to our completion of our initial business combination, we may be required to take write-downs or write-offs, restructuring and impairment
 or other charges that could have a significant negative effect on our financial condition, results of operations and the price of
 our securities, which could cause you to lose some or all of your investment.

 If
 third parties bring claims against us, the proceeds held in the Trust Account could be reduced and the per-share redemption amount
 received by shareholders may be less than $10.00 per public share.

 Our
 directors may decide not to enforce the indemnification obligations of our Sponsor, resulting in a reduction in the amount of funds
 in the Trust Account available for distribution to our public shareholders.

 If, after we distribute
 the proceeds in the Trust Account to our public shareholders, we file a bankruptcy petition or an involuntary bankruptcy petition
 is filed against us that is not dismissed, a bankruptcy court may seek to recover such proceeds, and the members of our board of
 directors may be viewed as having breached their fiduciary duties to our creditors, thereby exposing the members of our board of
 directors and us to claims of punitive damages.

 Certain of our officers
 and directors have or will have direct and indirect economic interests in us and/or our Sponsor after the consummation of our initial
 public offering and such interests may potentially conflict with those of our public shareholders as we evaluate and decide whether
 to recommend a potential business combination to our public shareholders.

 We
 may not have sufficient funds to satisfy indemnification claims of our directors and executive officers.

 Our
 warrants are accounted for as liabilities and the changes in value of our warrants could have a material effect on our financial
 results and thus may have an adverse effect on the market price of our securities.

 PART
I

 Item
 1.

 Business

 General

 We
are a blank check company incorporated as a Cayman Islands exempted company on November 10, 2020. We were formed for the purpose of effecting
a merger, share exchange, asset acquisition, share purchase, recapitalization, reorganization or similar business combination with one
or more businesses or entities, which we refer to throughout this Annual Report on Form 10-K as our initial business combination.

 On
March 3, 2023, we entered into Business Combination Agreement with AIRO Group, Inc., a Delaware corporation and a wholly-owned subsidiary
of Kernel ("ParentCo"), Kernel Merger Sub, Inc., a Delaware corporation and a wholly-owned subsidiary of ParentCo ("Kernel
Merger Sub"), AIRO Merger Sub, Inc., a Delaware corporation and a wholly-owned subsidiary of ParentCo ("AIRO Merger Sub"),
VKSS Capital, LLC, a Delaware limited liability company (the "ParentCo Representative") and also in the capacity as Kernel's
sponsor ("Sponsor"), Dr. Chirinjeev Kathuria, in the capacity as the representative for the company stockholders (the "Seller
Representative"), and AIRO Group Holdings, Inc., a Delaware corporation ("AIRO Group Holdings") (as may be amended
from time to time, the "Business Combination Agreement").

 Initial
Public Offering

 On
February 5, 2021, we consummated an initial public offering (the "IPO" or the "Initial Public Offering") of 30,475,000
units (the "Units"), at an offering price of $10.00 per Unit, with each Unit consisting of one Class A ordinary share, par
value $0.0001 per share, and one-half of one redeemable warrant ("Public Warrant") and a private placement with Kernel Capital
Holdings, LLC, a Delaware limited liability company (the "Original Sponsor") of 8,750,000 private placement warrants at a
price of $1.00 per warrant (the "Private Placement"). The net proceeds from the IPO together with certain of the proceeds
from the Private Placement, $304,750,000 in the aggregate (the "Offering Proceeds"), were placed in a Trust Account established
for the benefit of the Company's public shareholders and the underwriters of the IPO with Continental Stock Transfer & Trust
Company acting as trustee (the "Trust Account"). Except with respect to interest earned on the Offering Proceeds held in
the Trust Account that may be released to the Company to pay its income taxes, if any, the Company's amended and restated memorandum
and articles of association (as amended from time to time, the "Charter") provide that the Offering Proceeds will not be
released from the Trust Account (1) to the Company, until the completion of its initial business combination, or (2) to its public shareholders,
until the earliest of (a) the completion of the its initial business combination, and then only in connection with those Class A ordinary
shares that such shareholders properly elected to redeem, (b) the redemption of any public shares properly tendered in connection with
a shareholder vote to amend the Company's Charter (A) to modify the substance or timing of the Company's obligation to provide
holders of its Class A ordinary shares the right to have their shares redeemed in connection with the Company's initial business
combination or to redeem 100% of its public shares if the Company does not complete its initial business combination within 36 months
(or 42months, subject to six one-month extensions) from the closing of the IPO or (B) with respect to any other provision relating to
the rights of holders of its Class A ordinary shares, and (c) the redemption of the public shares if the Company has not consummated
its business combination within 36 months (or 42 months, subject to six one-month extensions) from the closing of the IPO, subject to
applicable law.

 Simultaneous
with the consummation of the IPO and the issuance and sale of the Units, we consummated the Private Placement of 8,750,000 private placement
warrants at a price of $1.00 per warrant (the "Private Placement Warrants"), generating total proceeds of $8,750,000. The
Private Placement Warrants, which were purchased by the Original Sponsor, are substantially similar to the Public Warrants, except that
if held by the Original Sponsor or its permitted transferees, they (i) may be exercised for cash or on a cashless basis, (ii) subject
to certain exceptions, are not subject to being called for redemption and (iii) subject to certain limited exceptions, will be subject
to transfer restrictions until 30 days following the consummation of the Company's initial business combination. If the Private
Placement Warrants are held by holders other than the Original Sponsor or its permitted transferees, the Private Placement Warrants will
be redeemable by the Company and exercisable by holders on the same basis as the Public Warrants. The Private Placement Warrants have
been issued pursuant to, and are governed by the warrant agreement, dated February 5, 2021, by and between us and Continental Stock Transfer
& Trust Company ("Continental") (the "Warrant Agreement").

 Sponsor
Purchase Agreement

 On
December 28, 2022 (the "Effective Date"), we entered into a purchase agreement with the Original Sponsor, and VKSS Capital,
LLC, a Delaware corporation (the "New Sponsor" or "Sponsor"), pursuant to which the New Sponsor, or an entity
designated by the New Sponsor, will purchase from the Original Sponsor 7,618,750 Class B ordinary shares, par value $0.0001 per share
and 8,750,000 Private Placement Warrants, each of which is exercisable to purchase one Class A ordinary share, par value $0.0001 per
share, for an aggregate purchase price of $1.00 payable at the time we effect the initial business combination. Upon the closing of the
initial business combination, New Sponsor shall also convey 2,000,000 Class B ordinary shares to the equityholders of the Original Sponsor,
as of the Effective Date, pro rata based on the equityholders' underlying interest in our Class B ordinary shares as of the Effective
Date.

 Charter
Amendments and Amendments to Trust Agreement

 On
February 3, 2023, we held an extraordinary general meeting of shareholders, at which shareholders voted upon, among other items, a proposal
(the "Extension Amendment Proposal") to amend our Charter (the "Charter Amendment") to extend the date by which
we must consummate an initial business combination from February 5, 2023 by up to six (6) one-month Extensions (defined below) to August
5, 2023 (the "Extension Meeting"). At the Extension Meeting, our shareholders also approved a proposal to amend our trust
agreement with Continental (the "Trust Agreement") (the "Trust Amendment Proposal") to conform the procedures
in the Trust Agreement by which we may extend the date on which the Trust Account must be liquidated if we have not completed our initial
business combination to the procedures in the Charter Amendment.

 In
connection with the approval of the Extension Amendment Proposal and the Trust Amendment Proposal at the Extension Meeting, a total of
200 shareholders elected to redeem an aggregate of 22,848,122 Class A ordinary shares. Following the payment of redemptions, we had approximately
$77.6 million left in our Trust Account.

 On
August 3, 2023, we held an extraordinary general meeting of shareholders, at which shareholders voted upon, among other items, a proposal
(the "Second Extension Amendment Proposal") to amend our Charter (the "Second Charter Amendment") to extend the
date by which we must consummate an initial business combination from August 5, 2023 by up to six (6) one-month Extensions to February
5, 2024 (the "Extension Meeting - Second"). At the Extension Meeting - Second, our shareholders also approved a proposal
to amend the Trust Agreement (the "Second Trust Amendment Proposal") to conform the procedures in the Trust Agreement by
which we may extend the date on which the Trust Account must be liquidated if we have not completed our initial business combination
to the procedures in the Second Charter Amendment.

 In
connection with the approval of the Extension Amendment Proposal and the Trust Amendment Proposal at the Extension Meeting - Second,
holders of 1,310,929 Class A ordinary shares exercised their right to redeem those shares for cash at an approximate price of $10.44
per share, for an aggregate of approximately $13.7 million. Following the payment of the redemptions, the Trust Account had a balance
of approximately $65.9 million.

 On
February 1, 2024, we held an extraordinary general meeting of shareholders (the "Extension Meeting - Third"). At the Extension
Meeting - Third, the our shareholders entitled to vote at the meeting cast their votes and approved a proposal (the "Third Extension
Amendment Proposal") to amend the our Charter (the "Third Charter Amendment") to extend the date (the "Termination
Date") by which we must (i) consummate a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar
business combination involving us and one or more businesses (a "business combination"), (ii) cease our operations if we
fail to complete such business combination, and (iii) redeem or repurchase 100% of our Class A ordinary shares included as part of the
Units sold in our IPO. The Third Charter Amendment allows us to extend the Termination Date by up to six (6) one-month extensions to
August 5, 2024 (each of which we refer to as an "Extension", and such later date, the "Extended Deadline"), unless
the closing of our initial business combination shall have occurred. At the Extension Meeting - Third, our shareholders also approved
a proposal to amend the Trust Agreement (the "Third Trust Amendment Proposal") to conform the procedures in the Trust Agreement
by which we may extend the date on which the Trust Account must be liquidated if we have not completed our initial business combination
to the procedures in the Third Charter Amendment.

 In
connection with the approval of the Third Extension Amendment Proposal and the Third Trust Amendment Proposal at the Extension Meeting
- Third, holders of 5,806,608 Class A ordinary shares exercised their right to redeem those shares for cash at an approximate price of
$10.80 per share, for an aggregate of approximately $62.7 million. Following the payment of the redemptions, the Trust Account will had
balance of approximately $5.5 million.

 Business
Combination Agreement

 On
March 3, 2023, we entered into Business Combination Agreement with ParentCo, Kernel Merger Sub, AIRO Merger Sub, the Sponsor, the Seller
Representative, and AIRO Group Holdings, pursuant to which, among other things, we will change our jurisdiction of incorporation by deregistering
as a Cayman Islands exempted company and continuing and domesticating as a corporation incorporated under the laws of the State of Delaware
(the "Domestication").

 In
connection with the Domestication, each Class B ordinary share, par value $0.0001 per share (the "Class B Ordinary Shares")
shall convert into a share of Class B common stock, par value $0.0001 per share, and each Class A ordinary share, par value $0.0001 per
share (the "Class A Ordinary Shares") shall convert into a share of Class A common stock, par value $0.0001 per share. Further,
each share of Class B common stock and each share of Class A common stock that is then issued and outstanding shall convert automatically,
on a one-for-one basis, into one share of common stock (the "Kernel Common Stock").

 Following
the domestication, the parties will effect the merger of Kernel Merger Sub with and into us, with us continuing as the surviving entity
as a wholly owned subsidiary of ParentCo (the "First Merger"). Immediately following the First Merger, AIRO Merger Sub will
merge with and into the AIRO Group Holdings, with AIRO Group Holdings continuing as the surviving entity as a wholly owned subsidiary
of ParentCo (the "Second Merger" and the other transactions contemplated by the Business Combination Agreement, together,
the "Business Combination").

 Merger
Consideration

 As
consideration for the Second Merger, the holders of AIRO Group Holdings' securities collectively shall be entitled to receive from
ParentCo, in the aggregate, a number of shares of ParentCo common stock with an aggregate value equal to (the "AIRO Merger Consideration")
(a) $770,000,000 minus (b) the amount, if any, by which the net working capital is less than negative $500,000, plus (c) the amount,
if any, by which the net working capital exceeds $500,000 (but not less than zero), minus (d) the amount, if any, by which the closing
net debt exceeds the target net debt of $75,000,000, by more than $500,000 (but not less than zero), plus (e) the amount, if any, by
which the target net debt of $75,000,000 exceeds closing net debt, minus (f) the amount, if any, by which the company transaction expenses
exceed the target company transaction expenses of $14,000,000 (but not less than zero). In addition, holders of AIRO Group Holdings'
securities ("AIRO Holders") shall also be entitled to receive up to 33,000,000 shares of ParentCo common stock and the Sponsor
shall have the contingent right to receive up to 3,300,000 shares of ParentCo common stock (the "Earnout Shares"), based
on ParentCo's achievement of certain revenue thresholds. Subject to the terms and conditions of the Business Combination Agreement,
in the event (i) ParentCo's revenue for the fiscal year that includes the Closing Date (as defined in the Business Combination
Agreement) is greater than or equal to $50,000,000, then, subject to the terms and conditions of this Agreement, ParentCo shall issue
to each of the AIRO Holders such Stockholder's Pro Rata Share (as defined in the Business Combination Agreement) of 11,000,000
Earnout Shares and the Sponsor shall be issued 1,100,000 Earnout Shares; (ii) ParentCo's revenue for the first full fiscal year
following the Closing Date is greater than or equal to $62,500,000, then, ParentCo shall issue to each of the AIRO Holders such Stockholder's
Pro Rata Share of 11,000,000 Earnout Shares and the Sponsor shall be issued 1,100,000 Earnout Shares; (iii) ParentCo's revenue
for the second full fiscal year following the Closing Date is greater than or equal to $78,100,000, then, ParentCo shall issue to each
of the AIRO Holders such Stockholder's Pro Rata Share of 11,000,000 Earnout Shares and the Sponsor shall be issued 1,100,000 Earnout
Shares. In addition, in no event may more than one Earnout Share award for achieving a revenue target be earned in a single Earnout Period.

 Conditions
to the Consummation of the Merger

 The
Business Combination Agreement contains customary conditions to closing the Business Combination (the "Closing"), including
the following mutual conditions of the parties (unless waived): (i) approval of the shareholders of Kernel and AIRO Group Holdings of
the Business Combination and the other matters requiring shareholder approval; (ii) approvals of any required governmental authorities
and completion of any antitrust expiration periods; (iii) receipt of specified third party consents; (iv) no law or order preventing
the Business Combination; (v) the Registration Statement on Form S-4 having been declared effective by the SEC; (vi) no material uncured
breach by the other party; (vii) no occurrence of a Material Adverse Effect with respect to the other party (as defined in the Business
Combination Agreement); (viii) approval from Nasdaq for the listing of the shares of ParentCo's common to be issued in connection
with the Business Combination; and (ix) reconstitution of the post-Closing board of directors as contemplated under the Business Combination
Agreement.

 In
addition, unless waived by AIRO Group Holdings, the obligations of AIRO Group Holdings to consummate the Business Combination are subject
to the satisfaction of the following additional Closing conditions, in addition to the delivery by Kernel of the Related Agreements (as
defined and described in greater detail below), customary certificates and other Closing deliverables: (i) the representations and warranties
of Kernel being true and correct as of the date of the Business Combination Agreement and as of the Closing (subject to customary exceptions,
including materiality qualifiers); (ii) Kernel having performed in all material respects its obligations and complied in all material
respects with its covenants and agreements under the Business Combination Agreement required to be performed or complied with by it on
or prior to the date of the Closing; (iii) absence of any Material Adverse Effect with respect to Kernel since the date of the Business
Combination Agreement which is continuing and uncured; (iv) the replacement of the Replacement Warrants and Replacement Options; (v)
at the Closing, Kernel having $50,000,000 in Unencumbered Cash, including funds remaining in the Trust Account (after giving effect to
the completion and payment of any redemptions and any Transaction Expenses) and the proceeds of the PIPE/Convertible Note Investment,
fifty percent (50%) of any net cash proceeds of any capital investment raise and/or convertible debt raise conducted by the Company during
the period beginning on the effective date of the Business Combination and ending on the Closing Date, and any net cash proceeds of any
executed agreements regarding a capital investment raise and/or convertible debt raise conducted by Kernel or ParentCo in which such
cash proceeds are required to be paid to ParentCo during the thirty (30) day period beginning on the Closing Date.

 Finally,
unless waived by Kernel, the obligations of Kernel to consummate the Transaction are subject to the satisfaction of the following additional
Closing conditions, in addition to the delivery by Kernel of the Related Agreements (as defined and described in greater detail below),
customary certificates and other Closing deliverables: (i) the representations and warranties of AIRO Group Holdings being true and correct
as of the date of the Business Combination Agreement and as of the Closing (subject to customary exceptions, including materiality qualifiers);
(ii) AIRO Group Holdings having performed in all material respects their respective obligations and complied in all material respects
with their respective covenants and agreements under the Business Combination Agreement required to be performed or complied with by
them on or prior to the date of the Closing; (iii) absence of any Material Adverse Effect with respect to AIRO Group Holdings and its
subsidiaries on a consolidated basis since the date of the Business Combination Agreement which is continuing and uncured; (iv) delivery
of AIRO's 2022 Audited Financials within 60 days of the Business Combination Agreement's signing; (v) the completion of Kernel's
legal due diligence of AIRO Group Holdings and its subsidiaries to Kernel's reasonable satisfaction; (vi) the replacement of the
Replacement Warrants and Replacement Options; and (vii) the aggregate amount of all Indebtedness of the Target Companies due earlier
than 180 days after the Closing (less Company cash at Closing) is less than Fifty Million U.S. Dollars ($50,000,000).

 First
Amendment to the Business Combination Agreement

 On
August 29, 2023, the parties to the Business Combination Agreement entered into the First Amendment to the Business Combination Agreement
(the "First Amendment"). The First Amendment amends the Business Combination Agreement to make certain changes to the earnout provisions
to fix the number of Earnout Shares that can be granted in each Earnout Period based on a $10.00 Per Share Price.

 Second
Amendment to the Business Combination Agreement

 On
January 16, 2024, the parties to the Business Combination Agreement entered into the Second Amendment to the Business Combination Agreement
(the "Second Amendment"). The Second Amendment amends the Business Combination Agreement to change the terms under which
the AIRO Group Holdings Inc. shareholders and the Sponsor shall have a contingent right to receive the Earnout Shares as additional consideration
based on ParentCo's achievement of certain revenue thresholds. The Second Amendment also changes the "Outside Date"
from August 2, 2023, to August 5, 2024.

 Third
Amendment to the Business Combination Agreement

 On
February 5, 2024, the parties to the Business Combination Agreement entered into the Third Amendment to the Business Combination Agreement
(the "Third Amendment"). The Third Amendment amends the Business Combination Agreement to delete Section 7.1(g) of the Business Combination
Agreement, which requires Kernel to have at least $5,000,001 of net tangible assets at Closing.

 Loan
and Transfer Agreements

 On
July 31, 2023, we entered into Loan and Transfer Agreements between Kernel, the Sponsor, and other parties (the "Lenders"),
pursuant to which the Lenders loaned an aggregate of $900,000 (the "Funded Amount") to the Sponsor (the "Loan")
and the Sponsor loaned $900,000 to Kernel (the "SPAC Loan"). The Loan shall accrue interest at 8% per annum and the SPAC
Loan does not accrue interest. Kernel is not responsible for the payment of any interest on the Loan and is only required to repay the
principal amount of the SPAC Loan upon the completion of its initial business combination. The Funded Amount, together with all accrued
and unpaid interest thereon, shall be repaid by the Sponsor at the option of the Lender, in either (a) cash; or (b) Class A ordinary
shares of the Company held by the Sponsor, either upon automatic conversion of Class B ordinary shares held by the Sponsor upon the closing
of the initial business combination or other Class A ordinary shares acquired by the Sponsor, at the rate of one (1) Class A ordinary
share for each $10.00 of converted principal and interest. As additional consideration for the Lenders making the Loan available to the
Sponsor, the Sponsor agreed to transfer four (4) Class A ordinary shares of Kernel to Lender for each $10.00 multiple of the Funded Amount,
which included the registration rights previously provided by Kernel to the Sponsor. Pursuant to the Business Combination Agreement,
the SPAC Loan requires the issuance of an additional 900,000 shares of ParentCo Common Stock (as defined in the Business Combination
Agreement).

 On
November 1, 2023 and November 6, 2023, the Company entered into Loan and Transfer Agreements between the Kernel, the Sponsor, and other
parties (the "Lenders"), pursuant to which the Lenders loaned an aggregate of $250,000 (the "Second Funded Amount")
to the Sponsor (the "Second Loan") and the Sponsor loaned $250,000 to the Company (the "Second SPAC Loan"). The
Second Loan shall accrue interest at 8% per annum and the Second SPAC Loan does not accrue interest. Kernel is not responsible for the
payment of any interest on the Second Loan and is only required to repay the principal amount of the Second SPAC Loan upon the completion
of its initial business combination. The Second Funded Amount, together with all accrued and unpaid interest thereon, shall be repaid
by the Sponsor at the option of the Lenders, in either (a) cash; or (b) Class A ordinary shares of Kernel held by the Sponsor, either
upon automatic conversion of Class B ordinary shares held by the Sponsor upon the closing of the initial business combination or other
Class A ordinary shares acquired by the Sponsor, at the rate of one (1) Class A ordinary share for each $10.00 of converted principal
and interest. As additional consideration for the Lenders making the Second Loan available to the Sponsor, the Sponsor agreed to transfer
four (4) Class A ordinary shares Kernel to the Lenders for each $10.00 multiple of the Second Funded Amount, which included the registration
rights previously provided by Kernel to the Sponsor. Pursuant to the Business Combination Agreement, the Second SPAC Loan requires the
issuance of an additional 250,000 shares of ParentCo Common Stock (as defined in the Business Combination Agreement).

 Termination
of Forward Purchase Agreement

 In
connection with the Business Combination Agreement, Kernel, AIRO, and Meteora Special Opportunity Fund I, LP ("MSOF"), Meteora
Capital Partners, LP ("MCP") and Meteora Select Trading Opportunities Master, LP ("MSTO") (with MCP, MSOF, and
MSTO collectively as "Seller") entered into that certain Forward Purchase Agreement, dated as of February 28, 2023 (the "FPA"
or the "Confirmation").

to the FPA. Meteora agreed to purchase from Kernel up to a maximum of 7,700,000 Class A ordinary shares from holders (other than Kernel
or its affiliates) who elected to redeem such shares in connection with the Business Combination between Kernel and AIRO. Purchases by
Seller were to be made through brokers in the open market after the redemption deadline in connection with the Business Combination at
a price no higher than the redemption price to be paid by Kernel in connection with the Business Combination.

 On
November 27, 2023, Kernel, Seller, and AIRO entered into a mutual termination agreement (the "Mutual Termination Agreement")
to terminate the FPA. As a result of the termination of the FPA, the FPA is of no further force and effect. In consideration of the termination
of the FPA, ParentCo agreed to issue fifty-thousand (50,000) shares of common stock to an entity designated by Seller at the time of
closing of the Business Combination, which shares will have certain demand and piggyback registration rights.

Delisting Notice

 On
July 7, 2023, we received a notice (the "Nasdaq Notice") from the Listing Qualifications Department of Nasdaq stating that,
as of June 29, 2023, we had failed to hold an annual meeting of shareholders within 12 months after its fiscal year ended December 31,
2021, as required by Nasdaq Listing Rule 5620(a) (the "Rule") and therefore was not in compliance with the Rule. As a result,
Nasdaq has advised us that our securities would be subject to delisting unless we timely requested a hearing before an independent Hearings
Panel (the "Panel"). Accordingly, we timely requested a hearing. The hearing request stayed the suspension of the our securities
and the termination of registration of our securities with Nasdaq as required by the rules of the Securities and Exchange Commission
pending the Panel's decision. On September 1, 2023, we received a letter from the Listing Qualifications Department of Nasdaq stating
that we had regained compliance under the Rule upon holding our annual meeting of shareholders on August 31, 2023.

 On
February 5, 2024, we received a notice from the staff of the Listing Qualifications Department of The Nasdaq Stock Market LLC ("Nasdaq")
indicating that, unless we timely request a hearing before the Nasdaq Hearings Panel (the "Panel"), our securities would
be subject to suspension and delisting from The Nasdaq Capital Market at the opening of business on February 14, 2024, due to our non-compliance
with Nasdaq IM-5101-2, which requires that a special purpose acquisition company must complete one or more business combinations within
36 months of the effectiveness of its IPO registration statement. Since our registration statement for the IPO became effective on February
2, 2021, we were required by this rule to complete our initial business combination by no later than February 2, 2024. We have timely
requested a hearing before the Panel to request sufficient time to complete the Business Combination with AIRO Group Holdings. The hearing
request will result in a stay of any suspension or delisting action pending the hearing. There can be no assurance that we will be able
to satisfy Nasdaq's continued listing requirements, regain compliance with Nasdaq IM-5101-2, and maintain compliance with other
Nasdaq listing requirements.

 Our
Management Team

 Our
management team consists of experienced deal makers, entrepreneurs, executives and investors, with deep experience driving growth by
optimizing operations, building brand resonance and improving technology systems. Collectively the team possesses a wide-ranging set
of competencies, with exceptional financial acumen and an extensive track record of growth and value creation. The team is led by Suren
Ajjarapu, who serves as CEO of TRxADE HEALTH, INC., an online marketplace for health traded on Nasdaq under the symbol "MEDS" as well
as a director of Oceantech Acquisition I Corp., traded on Nasdaq under the symbol "OTECU". Mr. Ajjarapu has over 25 years of specific
experience in growing novel technology-based companies, raising capital, mergers and acquisitions and building superior management teams.

 Surendra
Ajjarapu, Chief Executive Officer and Chairman

 Suren Ajjarapu (age: 53) has served has served as Chief Executive Officer
and Chairman of Kernel since December 2023. In addition to his involvement with Kernel, Mr. Ajjarapu has served as Chief Executive Officer
and Chairman of Power Up Acquisitions Corp. (Nasdaq: PWUP), a special purpose acquisition company since August 2023. Mr. Ajjarapu served
as Chief Executive Officer and Chairman of Semper Paratus Acquisition Corporation (Nasdaq: LSGT), a special purpose acquisition company,
from June 2023 until the completion of its initial business combination in 2024. Mr. Ajjarapu now serves as a director of the post-combination
company Tevogen Bio Holdings Inc. (Nasdaq: TVGN). Mr. Ajjarapu also serves as Chief Executive Officer and Chairman of OceanTech Acquisitions
I Corp. (Nasdaq: OTEC), a special purpose acquisition company, since March 2023. Mr. Ajjarapu currently serves Trxade Health, Inc. (Nasdaq:
MEDS), a health services information technology company, as Chairman of the Board, Chief Executive Officer and Secretary and has served
in these roles since its acquisition of Trxade Group, Inc., a Nevada corporation ("Trxade Nevada") on January 8, 2014, and
as the Chairman of the Board, Chief Executive Officer and Secretary of Trxade Nevada since its inception in 2013. Mr. Ajjarapu is also
currently serving as a director of the merged company, Ocean Biomedical Inc. (Nasdaq: OCEA) (f.k.a Aesther Healthcare Acquisition Corp.),
a biopharmaceutical company. Since March 2018, Mr. Ajjarapu has served as Executive Chairman of the Board of Kano Energy Corp., a company
involved in the development of renewable natural gas sites in the United States. Mr. Ajjarapu was a Founder and served as Chief Executive
Officer and Chairman of the Board of Sansur Renewable Energy, Inc., a company involved in developing wind power sites in the Midwest of
the United States, from March 2009 to December 2012. Mr. Ajjarapu was also a Founder, President and Director of Aemetis, Inc., a biofuels
company (Nasdaq: AMTX), and a Founder, Chairman and Chief Executive Officer of International Biofuels, a subsidiary of Aemetis, Inc.,
from January 2006 to March 2009. Mr. Ajjarapu was Co-Founder, Chief Operations Officer, and Director of Global Information Technology,
Inc., an IT outsourcing and systems design company, headquartered in Tampa, Florida with major operations in India. Mr. Ajjarapu graduated
from South Dakota State University with a M.S. in Environmental Engineering, and from the University of South Florida with an M.B.A.,
specializing in International Finance and Management. Mr. Ajjarapu is also a graduate of the Venture Capital and Private Equity program
at Harvard University.

Doss, Chief Financial Officer and Director

Doss (age: 70) has served as Chief Financial Officer of Kernel since December 2022. Mr. Doss is a seasoned chief financial officer and
accountant. Mr. Doss has served as Chief Financial Officer of Power Up Acquisitions Corp. (Nasdaq: PWUP), a special purpose acquisition
company, since August 2023. Beginning in 2021, he served as Chief Financial Officer of Aesther Healthcare Acquisition Corp., a special
purpose acquisition company until it consummated its initial business combination in February 2023. He has also served as chief financial
officer of TRxADE HEALTH, INC., an online marketplace for health traded on Nasdaq under the symbol "MEDS." Mr. Doss has served
in a variety of capacities with accounting and investment firms. He joined the staff of Seidman & Seidman (BDO Seidman, Dallas) in
1977 and in 1980 he joined the investment firm Van Kampen Investments, opening the firm's southeast office in Tampa, Florida in
1982. He remained with the firm until 1996 when he joined Franklin Templeton. After working for the Principal Financial Group office
in Tampa, Florida, Mr. Doss was City Executive for U.S. Trust in Sarasota, Florida, responsible for high net worth individuals. He retired
from that position in 2009. He served as CFO and Director for Sansur Renewable Energy an alternative energy development company, from
2010 to 2012. Mr. Doss has also served as President of STARadio Corp. since 2005. Mr. Doss is a member of the America Institute of CPA's.
He is a graduate of Illinois Wesleyan University.

 Our
executive officers are supported by seasoned group of independent directors composed of executives and entrepreneurs with a unique combination
of experiences in wholesale and retail, logistics and distribution, brands and technology development, and business transformation, which
includes Michael Peterson, Donald Fell, Venkatesh Srinivasan and Siva Saravanan, with Mr. Ajjarapu and Mr. Doss also serving as members
of our board of directors.

L. Peterson, Director

Peterson (age: 61) has served as a director of Kernel since December 2022. Mr. Peterson has served as a director of Power Up Acquisitions
Corp. (Nasdaq: PWUP), a special purpose acquisition company, since August 2023 and as a director of OceanTech Acquisitions I Corp. (Nasdaq:
OTEC), a special purpose acquisition company since March 2023. Mr. Peterson served as a director of Semper Paratus Acquisition Corporation
(Nasdaq: LSGT), a special purpose acquisition company from June 2023 until the completion of its initial business combination in February
2024. Mr. Peterson has been serving as President, Chief Executive Officer and as a member of the Board of Directors of Lafayette Energy
Corp. in April 2022. Beginning in September 2021, Mr. Peterson served as a member of the Board of Directors, Audit Committee (Chair),
Compensation Committee and Nominating and Corporate Governance Committee of Aesther Healthcare Acquisition Corp. (Nasdaq: AEHA), a special
purpose acquisition company, that consummated its initial business combination in February 2023. Mr. Peterson is currently serving as
a director of the merged company, Ocean Biomedical, Inc. (Nasdaq: OCEA) (f.k.a Aesther Healthcare Acquisition Corp.). Mr. Peterson has
served as the president of Nevo Motors, Inc. since December 2020, which was established to commercialize a range extender generator technology
for the heavy-duty electric vehicle market but is currently non-operational. Since May 2022, Mr. Peterson has served as a member of the
Board of Directors and as the Chairperson of the Audit Committee of Trio Petroleum Corp., an oil and gas exploration and development
company which is in the process of going public. Since February 2021, Mr. Peterson has served on the board of directors and as the Chairman
of the Audit Committee of Indonesia Energy Corporation Limited (NYSE American: INDO). Mr. Peterson previously served as the president
of the Taipei Taiwan Mission of The Church of Jesus Christ of Latter-day Saints, in Taipei, Taiwan from June 2018 to June 2021. Mr. Peterson
served as an independent member of the Board of Directors of TRxADE HEALTH, INC (formerly Trxade Group, Inc.) from August 2016 to May
2021 (Nasdaq: MEDS). Mr. Peterson served as the Chief Executive Officer of PEDEVCO Corp. (NYSE American: PED), a public company engaged
primarily in the acquisition, exploration, development and production of oil and natural gas shale plays in the US from May 2016 to May
2018. Mr. Peterson served as Chief Financial Officer of PEDEVCO between July 2012 and May 2016, and as Executive Vice President of Pacific
Energy Development (PEDEVCO's predecessor) from July 2012 to October 2014, and as PEDEVCO's President from October 2014 to
May 2018. Mr. Peterson joined Pacific Energy Development as its Executive Vice President in September 2011, assumed the additional office
of Chief Financial Officer in June 2012, and served as a member of its board of directors from July 2012 to September 2013. Mr. Peterson
formerly served as Interim President and CEO (from June 2009 to December 2011) and as director (from May 2008 to December 2011) of Pacific
Energy Development, as a director (from May 2006 to July 2012) of Aemetis, Inc. (formerly AE Biofuels Inc.), a Cupertino, California-based
global advanced biofuels and renewable commodity chemicals company (NASDAQ:AMTX), and as Chairman and Chief Executive Officer of Nevo
Energy, Inc. (NEVE) (formerly Solargen Energy, Inc.), a Cupertino, California-based developer of utility-scale solar farms which he helped
form in December 2008 (from December 2008 to July 2012). From 2005 to 2006, Mr. Peterson served as a managing partner of American Institutional
Partners, a venture investment fund based in Salt Lake City. From 2000 to 2004, he served as a First Vice President at Merrill Lynch,
where he helped establish a new private client services division to work exclusively with high-net-worth investors. From September 1989
to January 2000, Mr. Peterson was employed by Goldman Sachs & Co. in a variety of positions and roles, including as a Vice President.
Mr. Peterson received his MBA at the Marriott School of Management and a BS in statistics/computer science from Brigham Young University.

G. Fell, Director

Fell (age: 78) has served as a director of Kernel since December 2022. Mr. Fell brings along a wealth of experience in the field of economics
and business to Kernel. Mr. Fell has served as a director of Power Up Acquisitions Corp. (Nasdaq: PWUP), a special purpose acquisition
company, since August 2023 and as a director of OceanTech Acquisitions I Corp. (Nasdaq: OTEC), a special purpose acquisition company
since March 2023. Mr. Fell served as a director of Semper Paratus Acquisition Corporation (Nasdaq: LSGT), a special purpose acquisition
company from June 2023 until the completion of its initial business combination in February 2024. Mr. Fell served as an independent director
of Aesther Healthcare Acquisition Corp., a special purpose acquisition company, from 2021 until it consummated its initial business combination
in February 2023. Mr. Fell has served as an independent director of TRxADE HEALTH, INC (Nasdaq: MEDS) since January 2014, as well as
a director of Trxade Nevada since December 2013. He is presently Professor and Institute Director for the Davis, California-based Foundation
for Teaching Economics and adjunct professor of economics for the University of Colorado, Colorado Springs. Mr. Fell held positions with
the University of South Florida as a member of the Executive MBA faculty, Director of Executive and Professional Education and Senior
Fellow of the Public Policy Institute from 1995 to 2012. Mr. Fell was also a visiting professor at the University of LaRochelle, France,
and an adjunct professor of economics at both Illinois State University and The Ohio State University. Mr. Fell holds undergraduate and
graduate degrees in economics from Indiana State University and his all but dissertation (ABD) in economics from Illinois State University.
Through his work with the Foundation for Teaching Economics and the University of Colorado, Colorado Springs he has overseen graduate
institutes on economic policy and environmental economics in 44 states, throughout Canada, the Islands and Eastern Europe.

Srinivasan, Director

Srinivasan (age: 56) has served as a director of Kernel since December 2022. Mr. Srinivasan has a tremendous amount of experience in
the pharmaceutical industry and currently serves as President of Micro Labs USA and previously served as President of Rising Pharma,
USA and as President and CEO of Ascend Laboratories, USA where he grew the business, building a new team and strengthening processes
and systems. Mr. Srinivasan is currently serving as a Director of OceanTech Acquisition I Corp (Nasdaq: OTEC). In addition, Mr. Srinivasan
served as a Director at Pfizer India. Mr. Srinivasan served as an independent director of Aesther Healthcare Acquisition Corp., a special
purpose acquisition company, from 2021 until it consummated its initial business combination in February 2023.

 Siva
Saravanan, Director

 Siva
Saravanan (age: 49) has served as a director of Kernel since December 2022. Mr. Saravanan has more than 20 years of experience steering
digital strategies and technology solutions for businesses. Mr. Saravanan is the Chief Digital Officer at Wavestone US, helping Fortune
1000 business and technology leaders accelerate digital transformation. Prior to joining Wavestone US, Siva was Chief Information Officer
and SVP of Business Operations at Reviver, an exciting IoT start-up that creates connected digital license plates to enable true autonomous
driving. He designed customer digital experiences, unified commerce, supply chain, field service operations and the digital agenda for
Reviver. Siva was also VP for IT Digital Transformation and Program Delivery at Aristocrat Technologies. While at Aristocrat Technologies,
he led the transformation of business systems for a leading high-tech gaming manufacturer. Siva spent many years at Verifone as a Senior
Director supporting technology operations in 40+ countries and also taking on delivery responsibilities. At VeriFone, he built a world-class
global integrated supply chain network for agility and efficiency. Mr. Saravanan holds a M.S. in Systems Engineering from Tennessee State
University and B.S in Mechanical Engineering from Annamalai University in Chidambaram, India. He is also on the Advisory Board of NishTech
Inc., a digital commerce company and the Advisory Council of George Washington University School of Business Digital Program. Siva is
a member of Forbes Technology Council contributing regularly. In addition, Mr. Saravan is currently serving as a Director of OceanTech
Acquisition I Corp (NASDAQ: OTEC). Mr. Saravanan served as an independent director of Aesther Healthcare Acquisition Corp., a special
purpose acquisition company. from 2021 until it consummated its initial business combination in February 2023.

 Our
Approach

 While
we are not limited to a particular industry or geographic region, our business strategy is to identify and complete our initial business
combination with a company that complements the experiences and skills of our management team members and can benefit from their operational
expertise. As such, we have a particular interest in profitable and growing businesses that can leverage technology to serve customers
in a novel and transformational manner.

 We
expect that relationships cultivated from our management team's years working in technology innovation, consumer, supply chain
and logistics entrepreneurship, business operation in relevant industries, and their significant transaction experience will facilitate
potential opportunities for us. Our management team and board of directors are leveraging extensive networks of key business contacts,
forged over decades of experience, to convey the parameters of our search for a target company and subsequent business combination and
are sourcing, reviewing and pursuing potential opportunities. We leverage relationships cultivated from years of transaction experience
with management teams of public and private companies, investment bankers, attorneys and accountants to provide potential opportunities
for us.

 Our
management team and board of directors have demonstrated success sourcing, identifying and executing key investments and acquisitions,
as well as operating industry-leading companies. Collectively, our management team along with our board of directors has extensive experience
in:

 operating
 companies in the public and private markets, defining corporate strategy, and hiring and retaining talent;

 executing
 on growth plans, both organically and through strategic acquisitions;

 sourcing,
 structuring and acquiring operating companies;

 founding
 technology and consumer product startups, ultimately negotiating exits at attractive valuations to produce favorable returns for
 investors and employees;

 accessing
 public and private capital markets to optimize capital structure, including financing businesses and helping companies transition
 ownership structures;

 fostering
 relationships with sellers, capital providers and experienced target management teams;

 investing
 in well-known growth and technology businesses; and

 overseeing
 governance of public companies, with our management team and board of directors having served in key roles on numerous public company
 boards.

 We
believe that our management team is well positioned to identify relevant business combination opportunities with a compelling industry
backdrop, and to facilitate transformational growth for the target. Our objective is to generate attractive returns for shareholders
and enhance value through improving operational performance of the acquired company.

 We
believe that our structure and our management team's deep experience as operators, investors and entrepreneurs position us as an
attractive partner in a potential business combination.

 Potential
Conflicts of Interest

 In
evaluating a prospective target business, we conducted a thorough due diligence review which encompassed, among other things, meetings
with incumbent management and key employees, and document reviews, as well as a review of financial, operational, legal and other information
which was made available to us. We also utilized our management team's operational and capital planning experience.

 Members
of our management team and board of directors directly or indirectly, own our Class B ordinary shares, Class A ordinary shares and/or
Private Placement Warrants, and, accordingly, may have a conflict of interest in determining whether a particular target business is
an appropriate business with which to effectuate our initial business combination. Further, each of our officers and directors may have
a conflict of interest with respect to evaluating a particular business combination if the retention or resignation of any such officers
and directors were to be included by a target business as a condition to any agreement with respect to our initial business combination.

 Each
of our officers and directors presently has, and any of them in the future may have additional, fiduciary or contractual obligations
to another entity pursuant to which such officer or director is or will be required to present a business combination opportunity to such
entity. Accordingly, if any of our officers or directors becomes aware of a business combination opportunity which is suitable for an
entity to which he or she has then-current fiduciary or contractual obligations, he or she will honor his or her fiduciary or contractual
obligations to present such business combination opportunity to such other entity, subject to their fiduciary duties under Cayman Islands
law.

 In
addition, our Sponsor and our officers and directors may sponsor or form other special purpose acquisition companies similar to ours
or may pursue other business or investment ventures during the period in which we are seeking an initial business combination. Any such
companies, businesses or investments may present additional conflicts of interest in pursuing an initial business combination. However,
we do not believe that any such potential conflicts would materially affect our ability to complete our initial business combination.

 Human
Capital Management

 We
currently have two officers. These individuals are not obligated to devote any specific number of hours to our matters but they devote
as much of their time as they deem necessary to our affairs and intend to continue doing so until we have completed our initial business
combination. The amount of time they devote in any time period will vary based on whether a target business has been selected for our
initial business combination and the stage of the initial business combination process we are in. We do not intend to have any full time
employees prior to the completion of our initial business combination.

 Corporate Information

 Our
executive offices are located at 515 Madison Avenue, 8th Floor - Suite 8078, New York, New York 10022, and our telephone number is (646)
908-2659. We maintain a corporate website at www.kernelcap.com.

 Status
as a Public Company

 We
are an "emerging growth company," as defined in Section 2(a) of the Securities Act of 1933, as amended, or the Securities
Act, as modified by the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. As such, we are eligible to take advantage of certain
exemptions from various reporting requirements that are applicable to other public companies that are not "emerging growth companies"
including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley
Act of 2002, or the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy
statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and shareholder approval
of any golden parachute payments not previously approved.

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

 We
will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of
the completion of our initial public offering, (b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which
we are deemed to be a large accelerated filer, which means the market value of our Class A ordinary shares that are held by non-affiliates
exceeds $700 million as of the prior June 30, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt
securities during the prior three-year period. References herein to "emerging growth company" have the meaning associated
with it in the JOBS Act.

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

 Lack
of Business Diversification

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

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

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

 Limited
Ability to Evaluate the Target's Management Team

 Although
we have closely scrutinized the management of AIRO Group Holdings, our assessment of the target business' management may not prove
to be correct. In addition, the future management may not have the necessary skills, qualifications or abilities to manage a public company.
At the consummation of the Business Combination, Surendra Ajjarapu and Michael Peterson, two of our current directors, will serve on
the board of directors of ParentCo.

 Periodic
Reporting and Financial Information

 Our
Units, Class A ordinary shares and Public Warrants are registered under the Exchange Act and we have reporting obligations, including
the requirement that we file annual, quarterly and current reports with the SEC. In accordance with the requirements of the Exchange
Act, this annual report contains financial statements audited and reported on by our independent registered public accountants.

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

 Item
 1A.

 Risk
 Factors

 An
investment in our securities involves a high degree of risk. You should carefully consider all of the risks described below, together
with the other information contained in this Report, before making a decision to invest in our securities. If any of the following events
occur, our business, financial condition and operating results may be materially adversely affected. In that event, the trading price
of our securities could decline, and you could lose all or part of your investment. The risk factors described below are not necessarily
exhaustive and you are encouraged to perform your own investigation with respect to us and our business.

 Risks
Relating to our Search for, and Consummation of or Inability to Consummate, a Business Combination

 We
are a company with no operating history and no revenues, and you have no basis on which to evaluate our ability
to achieve our business objective.

 We
are an exempted company, incorporated under the laws of the Cayman Islands with no operating results. Because we
lack an operating history, you have no basis upon which to evaluate our ability to achieve our business objective of completing our initial
business combination with one or more target businesses. We have no plans, arrangements or understandings with any prospective target
business concerning a business combination and may be unable to complete our initial business combination. If we fail to complete our
initial business combination, we will never generate any operating revenues.

 Past
performance by our management team or their respective affiliates may not be indicative of future performance of an investment in us.

 Information
regarding performance is presented for informational purposes only. Any past experience or performance of our management team and their
respective affiliates is not a guarantee of either (i) our ability to successfully identify and execute a transaction or (ii) success
with respect to any business combination that we may consummate. You should not rely on the historical record of our management team
or their respective affiliates as indicative of the future performance of an investment in us or the returns we will, or are likely to,
generate going forward. Our management has no experience in operating special purpose acquisition companies.

 Your
only opportunity to affect the investment decision regarding a potential business combination may be limited to the exercise of your
right to redeem your shares from us for cash.

 At
the time of your investment in us, you will not be provided with an opportunity to evaluate the specific merits or risks of any target
businesses. Since our board of directors may complete a business combination without seeking shareholder approval, public shareholders
may not have the right or opportunity to vote on the business combination, unless we seek such shareholder approval. Accordingly, your
only opportunity to affect the investment decision regarding a potential business combination may be limited to exercising your redemption
rights within the period of time (which will be at least 20 business days) set forth in our tender offer documents mailed to our public
shareholders in which we describe our initial business combination.

 If
we seek shareholder approval of our initial business combination, our sponsor and members of our management team have agreed to vote
in favor of such initial business combination, regardless of how our public shareholders vote.

 Our Sponsor owned, on an as-converted basis, 20% of our outstanding ordinary
shares immediately following the completion of our initial public offering. Our Sponsor and members of our management team also may from
time to time purchase Class A ordinary shares prior to our initial business combination. Our Charter provides that, if we seek shareholder
approval, we will complete our initial business combination only a majority of the ordinary shares, represented in person or by proxy
and entitled to vote thereon, voted at a shareholder meeting are voted in favor of the business combination. As a result, in addition
to our Sponsor's founder shares, we would need none of the public shares sold in our initial public offering to be voted in favor
of an initial business combination in order to have our initial business combination approved. Accordingly, if we seek shareholder
approval of our initial business combination, the agreement by our Sponsor and each member of our management team to vote in favor of
our initial business combination will increase the likelihood that we will receive the requisite shareholder approval for such initial
business combination.

 You
will not have any rights or interests in funds from the Trust Account, except under certain limited circumstances. Therefore,
to liquidate your investment, you may be forced to sell your public shares or warrants, potentially at a loss.

 Our
public shareholders will be entitled to receive funds from the Trust Account only upon the earliest to occur of: (i) our completion of
an initial business combination, and then only in connection with those Class A ordinary shares that such shareholder properly elected
to redeem, subject to the limitations described herein, (ii) the redemption of any public shares properly tendered in connection with
a shareholder vote to amend our Charter (A) to modify the substance or timing of our obligation to provide holders of our Class A ordinary
shares the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares
if we do not complete our initial business combination within 24 months (or 30 months, subject to six one-month extensions) from the
closing of our initial public offering or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary
shares, and (iii) the redemption of our public shares if we have not consummated an initial business within 36 months (or 42 months,
subject to six one-month extensions) from the closing of our initial public offering, subject to applicable law and as further described
herein. Public shareholders who redeem their Class A ordinary shares in connection with a shareholder vote described in clause (ii) in
the preceding sentence shall not be entitled to funds from the Trust Account upon the subsequent completion of an initial business combination
or liquidation if we have not consummated an initial business combination within 36 months (or 42 months, subject to six one-month extensions)
from the closing of our initial public offering, with respect to such Class A ordinary shares so redeemed. In no other circumstances
will a public shareholder have any right or interest of any kind in the Trust Account. Holders of warrants will not have any right to
the proceeds held in the Trust Account with respect to the warrants. Accordingly, to liquidate your investment, you may be forced to
sell your public shares or warrants, potentially at a loss.

 The
ability of our public shareholders to redeem their shares for cash may make our financial condition unattractive to potential business
combination targets, which may make it difficult for us to enter into a business combination with a target.

 We
may seek to enter into a business combination transaction agreement with a prospective target that requires as a closing condition that
we have a minimum net worth or a certain amount of cash. If too many public shareholders exercise their redemption rights, we would not
be able to meet such closing condition and, as a result, would not be able to proceed with the business combination. Furthermore, our
Charter currently provides that in no event will we redeem our public shares in an amount that would cause our net tangible assets to
be less than $5,000,001 (so that we do not then become subject to the SEC's "penny stock" rules). Consequently, unless
we amend our Charter, if accepting all properly submitted redemption requests would cause our net tangible assets to be less than $5,000,001
or such greater amount necessary to satisfy a closing condition as described above, we would not proceed with such redemption and the
related business combination and may instead search for an alternate business combination. Prospective targets will be aware of these
risks and, thus, may be reluctant to enter into a business combination transaction with us.

 The
ability of our public shareholders to exercise redemption rights with respect to a large number of our shares may not allow us to complete
the most desirable business combination or optimize our capital structure.

 At
the time we enter into an agreement for our initial business combination, we will not know how many shareholders may exercise their redemption
rights, and therefore will need to structure the transaction based on our expectations as to the number of shares that will be submitted
for redemption. If a large number of shares are submitted for redemption, we may need to restructure the transaction to reserve a greater
portion of the cash in the Trust Account or arrange for additional third-party financing. Raising additional third-party financing may
involve dilutive equity issuances or the incurrence of indebtedness at higher than desirable levels. The above considerations may limit
our ability to complete the most desirable business combination available to us or optimize our capital structure. The amount of the
deferred underwriting commissions payable to the underwriters will not be adjusted for any shares that are redeemed in connection with
an initial business combination.

 The
per-share amount we will distribute to shareholders who properly exercise their redemption rights will not be reduced by the deferred
underwriting commission and after such redemptions, the amount held in trust will continue to reflect our obligation to pay the entire
deferred underwriting commissions.

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

 If
our initial business combination agreement requires us to use a portion of the cash in the Trust Account to pay the purchase price, or
requires us to have a minimum amount of cash at closing, the probability that our initial business combination would be unsuccessful
is increased. If our initial business combination is unsuccessful, you would not receive your pro rata portion of the funds in the Trust
Account until we liquidate the Trust Account. If you are in need of immediate liquidity, you could attempt to sell your shares in the
open market; however, at such time our shares may trade at a discount to the pro rata amount per share in the Trust Account. In either
situation, you may suffer a material loss on your investment or lose the benefit of funds expected in connection with our redemption
until we liquidate or you are able to sell your shares in the open market.

 The
requirement that we consummate an initial business combination within 36 months (or 42 months, subject to six one-month extensions) after
the closing of our initial public offering may give potential target businesses leverage over us in negotiating a business combination
and may limit the time we have in which to conduct due diligence on potential business combination targets, in particular as we approach
our dissolution deadline, which could undermine our ability to complete our initial business combination on terms that would produce
value for our shareholders.

 Any
potential target business with which we enter into negotiations concerning a business combination will be aware that we must consummate
an initial business combination within 36 months (or 42 months, subject to six one-month extensions) from the closing of our initial
public offering. Consequently, such target business may obtain leverage over us in negotiating a business combination, knowing that if
we do not complete our initial business combination with that particular target business, we may be unable to complete our initial business
combination with any target business. This risk will increase as we get closer to the time frame described above. In addition, we may
have limited time to conduct due diligence and may enter into our initial business combination on terms that we would have rejected upon
a more comprehensive investigation.

 Our
search for a business combination, and any target business with which we ultimately consummate a business combination, may be materially
adversely affected by an outbreak of infectious diseases and the status of debt and equity markets.

 We
face risks related to pandemics, epidemics, outbreaks or other public health events that are outside of our control and could significantly
disrupt our operations and adversely affect our business and financial condition. For example, the global outbreak of COVID-19 during
2020 adversely affected the economies and financials markets worldwide. Furthermore, we may be unable to complete a business combination
if continued concerns relating to COVID-19 continues to restrict travel, limit the ability to have meetings with potential investors
or the target company's personnel, vendors and services providers are unavailable to negotiate and consummate a transaction in a
timely manner. The extent to which pandemics, epidemics, outbreaks or other public health events impact our ability to consummate our
initial business combination will depend on future developments, which are highly uncertain and cannot be predicted. In the event a future
disruption posed by pandemics, epidemics or other matters of global concern continue for an extensive period of time, our ability to
consummate a business combination, or the operations of a target business with which we ultimately consummate a business combination,
may be materially adversely affected.

 In
addition, our ability to consummate a transaction may be dependent on the ability to raise equity and debt financing which may be impacted
by a pandemic, epidemics, outbreak and other events, including as a result of increased market volatility, decreased market liquidity
in third-party financing being unavailable on terms acceptable to us or at all.

 We
may not be able to consummate an initial business combination within the required time period, in which case we would cease all operations
except for the purpose of winding up and we would redeem the outstanding Class A ordinary shares and liquidate.

 Our
Sponsor and our executive officers and directors have agreed that we must complete our initial business combination by August 5, 2024.
We may not be able to consummate an initial business combination within such time period. However, our ability to complete our initial
business combination may be negatively impacted by general market conditions, volatility in the capital and debt markets and the other
risks described herein.

 If
we are unable to consummate our initial business combination within the required time period, it will, as promptly as reasonably possible
but not more than ten business days thereafter, distribute the aggregate amount then on deposit in the Trust Account (net of taxes payable,
and less up to $100,000 of interest to pay dissolution expenses), pro rata to the public shareholders by way of redemption and cease
all operations except for the purposes of winding up of its affairs, as further described herein. This redemption of Public Shareholders
from the Trust Account will be effected as required by function of the Charter and prior to any voluntary winding up.

 If
we seek shareholder approval of our initial business combination, our Sponsor, executive officers, directors and their affiliates may
elect to purchase public shares or warrants, which may influence a vote on a proposed business combination and reduce the public "float"
of our Class A ordinary shares or public warrants.

 If
we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business
combination pursuant to the tender offer rules, our Sponsor, executive officers, directors or their affiliates may purchase public shares
or warrants in privately negotiated transactions or in the open market either prior to or following the completion of our initial business
combination, although they are under no obligation to do so. However, they have no current commitments, plans or intentions to engage
in such transactions and have not formulated any terms or conditions for any such transactions. None of the funds in the Trust Account
will be used to purchase public shares or warrants in such transactions.

 In
the event that our Sponsor, executive officers, directors or their affiliates purchase shares in privately negotiated transactions from
public shareholders who have already elected to exercise their redemption rights, such selling shareholders would be required to revoke
their prior elections to redeem their shares.

 The
purpose of any such transaction could be to (1) vote in favor of the business combination and thereby increase the likelihood of obtaining
shareholder approval of the business combination, (2) reduce the number of public warrants outstanding or vote such warrants on any matters
submitted to the warrant holders for approval in connection with our initial business combination or (3) satisfy a closing condition
in an agreement with a target that requires us to have a minimum net worth or a certain amount of cash at the closing of our initial
business combination, where it appears that such requirement would otherwise not be met. Any such purchases of our securities may result
in the completion of our initial business combination that may not otherwise have been possible. In addition, if such purchases are made,
the public "float" of our Class A ordinary shares or public warrants may be reduced and the number of beneficial holders of our securities
may be reduced, which may make it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities
exchange. Any such purchases will be reported pursuant to Section 13 and Section 16 of the Exchange Act to the extent such purchasers
are subject to such reporting requirements.

 The
SEC issued final rules to regulate special purpose acquisition companies that may increase our costs and the time needed to complete
our initial business combination.

 With
respect to the regulation of special purpose acquisition companies like Kernel ("SPACs"), on January 24, 2024, the SEC adopted
the previously proposed rules (the "SPAC Rules") relating to, among other items, disclosures in business combination transactions
involving SPACs and private operating companies; the condensed financial statement requirements applicable to transactions involving
shell companies; the use of projections by SPACs in SEC filings in connection with proposed business combination transactions; the potential
liability of certain participants in proposed business combination transactions. These SPAC Rules may increase the costs of and the time
needed to negotiate and complete an initial business combination, and may constrain the circumstances under which we could complete an
initial business combination.

 If
a shareholder fails to receive notice of our offer to redeem our public shares in connection with our initial business combination, or
fails to comply with the procedures for tendering its shares, such shares may not be redeemed.

 We
will comply with the proxy rules or tender offer rules, as applicable, when conducting redemptions in connection with our initial business
combination. Despite our compliance with these rules, if a shareholder fails to receive our proxy solicitation or tender offer materials,
as applicable, such shareholder may not become aware of the opportunity to redeem its shares. In addition, the proxy solicitation or
tender offer materials, as applicable, that we will furnish to holders of our public shares in connection with our initial business combination
will describe the various procedures that must be complied with in order to validly redeem or tender public shares. In the event that
a shareholder fails to comply with these procedures, its shares may not be redeemed.

of our limited resources and the significant competition for business combination opportunities, it may be more difficult for us to complete
our initial business combination. If we have not consummated our initial business combination within the required time period, our public
shareholders may receive only approximately $10.00 per public share, or less in certain circumstances, on the liquidation of our Trust
Account and our warrants will expire worthless.

 We
expect to encounter intense competition from other entities having a business objective similar to ours, including private investors
(which may be individuals or investment partnerships), other blank check companies and other entities, domestic and international, competing
for the types of businesses we intend to acquire. Many of these individuals and entities are well established and have extensive experience
in identifying and effecting, directly or indirectly, acquisitions of companies operating in or providing services to various industries.
Many of these competitors possess greater technical, human and other resources or more local industry knowledge than we do and our financial
resources will be relatively limited when contrasted with those of many of these competitors. While we believe there are numerous target
businesses we could potentially acquire with the net proceeds of our initial public offering and the sale of the private placement warrants,
our ability to compete with respect to the acquisition of certain target businesses that are sizable will be limited by our available
financial resources. This inherent competitive limitation gives others an advantage in pursuing the acquisition of certain target businesses.
Furthermore, we are obligated to offer holders of our public shares the right to redeem their shares for cash at the time of our initial
business combination in conjunction with a shareholder vote or via a tender offer. Target companies will be aware that this may reduce
the resources available to us for our initial business combination. Any of these obligations may place us at a competitive disadvantage
in successfully negotiating a business combination. If we have not consummated our initial business combination within the required time
period, our public shareholders may receive only approximately $10.00 per public share, or less in certain circumstances, on the liquidation
of our Trust Account and our warrants will expire worthless. See "If third parties bring claims against us, the proceeds held in the
Trust Account could be reduced and the per-share redemption amount received by shareholders may be less than $10.00 per public share"
and other risk factors herein.

 If
the net proceeds of our initial public offering and the sale of the private placement warrants not being held in the Trust Account are
insufficient to allow us to operate for the 36 months (or 42 months, subject to six one-month extensions) following the closing of our
initial public offering, it could limit the amount available to fund our search for a target business or businesses and our ability to
complete our initial business combination, and we will depend on loans from our Sponsor, its affiliates or members of our management
team to fund our search and to complete our initial business combination.

 Of
the net proceeds of our initial public offering and the sale of the private placement warrants, only approximately $1,225,000 was available
to us initially outside the Trust Account to fund our working capital requirements. We believe that the funds available to us outside
of the Trust Account, together with funds available from loans from our Sponsor, its affiliates or members of our management team will
be sufficient to allow us to operate for at least the 36 months (or 42 months, subject to six one-month extensions) following the closing
of our initial public offering; however, we cannot assure you that our estimate is accurate, and our Sponsor, its affiliates or members
of our management team are under no obligation to advance funds to us in such circumstances. Of the funds available to us, we expect
to use a portion of the funds available to us to pay fees to consultants who assisted us with our search for a target business.

 In
the event that our offering expenses exceed our estimate of $1,400,000, we may fund such excess with funds not to be held in the Trust
Account. In such case, unless funded by the proceeds of loans available from our Sponsor, its affiliates or members of our management
team the amount of funds we intend to be held outside the Trust Account would decrease by a corresponding amount. Conversely, in the
event that the offering expenses are less than our estimate of $1,400,000, the amount of funds we intend to be held outside the Trust
Account would increase by a corresponding amount. The amount held in the Trust Account will not be impacted as a result of such increase
or decrease. If we are required to seek additional capital, we would need to borrow funds from our Sponsor, its affiliates, members of
our management team or other third parties to operate or may be forced to liquidate. Neither our Sponsor, members of our management team
nor their affiliates is under any obligation to us in such circumstances. Any such advances may be repaid only from funds held outside
the Trust Account or from funds released to us upon completion of our initial business combination. Up to $1,500,000 of such loans may
be convertible into warrants of the post-business combination entity at a price of $1.00 per warrant at the option of the lender. The
warrants would be identical to the private placement warrants. Prior to the completion of our initial business combination, we do not
expect to seek loans from parties other than our Sponsor, its affiliates or members of our management team as we do not believe third
parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our Trust Account.
If we have not consummated our initial business combination within the required time period because we do not have sufficient funds available
to us, we will be forced to cease operations and liquidate the Trust Account. Consequently, our public shareholders may only receive
an estimated $10.00 per public share, or possibly less, on our redemption of our public shares, and our warrants will expire worthless.
See "-If third parties bring claims against us, the proceeds held in the Trust Account could be reduced and the per-share redemption
amount received by shareholders may be less than $10.00 per public share" and other risk factors herein.

 We
may seek business combination opportunities with a high degree of complexity that require significant operational improvements, which
could delay or prevent us from achieving our desired results.

 We
may seek business combination opportunities with large, highly complex companies that we believe would benefit from operational improvements.
While we intend to implement such improvements, to the extent that our efforts are delayed or we are unable to achieve the desired improvements,
the business combination may not be as successful as we anticipate.

 To
the extent we complete our initial business combination with a large complex business or entity with a complex operating structure, we
may also be affected by numerous risks inherent in the operations of the business with which we combine, which could delay or prevent
us from implementing our strategy. Although our management team will endeavor to evaluate the risks inherent in a particular target business
and its operations, we may not be able to properly ascertain or assess all of the significant risk factors until we complete our business
combination. If we are not able to achieve our desired operational improvements, or the improvements take longer to implement than anticipated,
we may not achieve the gains that we anticipate. Furthermore, some of these risks and complexities may be outside of our control and
leave us with no ability to control or reduce the chances that those risks and complexities will adversely impact a target business.
Such combination may not be as successful as a combination with a smaller, less complex organization.

 Our
shareholders may be held liable for claims by third parties against us to the extent of distributions received by them upon redemption
of their shares.

 If
we are forced to enter into an insolvent liquidation, any distributions received by shareholders could be viewed as an unlawful payment
if it was proved that immediately following the date on which the distribution was made, we were unable to pay our debts as they fall
due in the ordinary course of business. As a result, a liquidator could seek to recover some or all amounts received by our shareholders.
Furthermore, our directors may be viewed as having breached their fiduciary duties to us or our creditors and/or may have acted in bad
faith, thereby exposing themselves and our company to claims, by paying public shareholders from the Trust Account prior to addressing
the claims of creditors. We cannot assure you that claims will not be brought against us for these reasons. We and our directors and
officers who knowingly and willfully authorized or permitted any distribution to be paid out of our share premium account while we were
unable to pay our debts as they fall due in the ordinary course of business would be guilty of an offence and may be liable for a fine
of $18,292.68 and imprisonment for five years in the Cayman Islands.

 We
may seek acquisition opportunities in industries or sectors which may or may not be outside of our management's area of expertise.

 We
will consider a business combination outside of our management's area of expertise if a business combination target is presented
to us and we determine that such candidate offers an attractive acquisition opportunity for our company. Although our management will
endeavor to evaluate the risks inherent in any particular business combination target, we cannot assure you that we will adequately ascertain
or assess all of the significant risk factors. We also cannot assure you that an investment in our Units will not ultimately prove to
be less favorable to investors in our initial public offering than a direct investment, if an opportunity were available, in a business
combination target. In the event we elect to pursue an acquisition outside of the areas of our management's expertise, our management's
expertise may not be directly applicable to its evaluation or operation, and the information contained in this report regarding the areas
of our management's expertise would not be relevant to an understanding of the business that we elect to acquire. As a result,
our management may not be able to adequately ascertain or assess all of the significant risk factors. Accordingly, any holders who choose
to retain their securities following the business combination could suffer a reduction in the value of their securities. Such holders
are unlikely to have a remedy for such reduction in value.

 Unlike
some other similarly structured blank check companies, our Sponsor will receive additional Class A ordinary shares if we issue shares
to consummate an initial business combination.

 The
founder shares will automatically convert into Class A ordinary shares (which such Class A ordinary shares delivered upon conversion
will not have any redemption rights or be entitled to liquidating distributions from the Trust Account if we fail to consummate an initial
business combination) at the time of our initial business combination or earlier at the option of the holders thereof at a ratio such
that the number of Class A ordinary shares issuable upon conversion of all founder shares will equal, in the aggregate, on an as-converted
basis, 20% of the sum of (i) the total number of ordinary shares issued and outstanding upon completion of our initial public offering,
plus (ii) the total number of Class A ordinary shares issued or deemed issued or issuable upon conversion or exercise of any equity-linked
securities or rights issued or deemed issued, by the Company in connection with or in relation to the consummation of the initial business
combination, excluding any Class A ordinary shares or equity-linked securities exercisable for or convertible into Class A ordinary shares
issued, deemed issued, or to be issued, to any seller in the initial business combination and any private placement warrants issued to
our Sponsor, any of its affiliates or any members of our management team upon conversion of working capital loans. In no event will the
Class B ordinary shares convert into Class A ordinary shares at a rate of less than one-to-one. This is different than some other similarly
structured blank check companies in which the initial shareholders will only be issued an aggregate of 20% of the total number of shares
to be outstanding prior to the initial business combination.

 We
do not have a specified maximum redemption threshold. The absence of such a redemption threshold may make it possible for us to complete
our initial business combination with which a substantial majority of our shareholders do not agree.

 Our
Charter does not provide a specified maximum redemption threshold, except that, unless amended, in no event will we redeem our public
shares in an amount that would cause our net tangible assets to be less than $5,000,001 (so that we do not then become subject to the
SEC's "penny stock" rules). As a result, we may be able to complete our initial business combination even though a
substantial majority of our public shareholders do not agree with the transaction and have redeemed their shares or, if we seek shareholder
approval of our initial business combination and do not conduct redemptions in connection with our initial business combination pursuant
to the tender offer rules, have entered into privately negotiated agreements to sell their shares to our Sponsor, officers, directors
or their affiliates. In the event the aggregate cash consideration we would be required to pay for all Class A ordinary shares that are
validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed business combination
exceeds the aggregate amount of cash available to us, we will not complete the business combination or redeem any shares, all Class A
ordinary shares submitted for redemption will be returned to the holders thereof, and we instead may search for an alternate business
combination. However, because the minimum cash requirements provided in the Business Combination Agreement has been waived by AIRO, if
we do not proceed with the Business Combination in such situation, it may be in breach of our obligations under the Business Combination
Agreement, which could have an adverse effect on our ability to consummate an alternate business combination.

 In
order to effectuate an initial business combination, blank check companies have, in the recent past, amended various provisions of their
charters and other governing instruments, including their warrant agreements. We cannot assure you that we will not seek to amend our
Charter or governing instruments in a manner that will make it easier for us to complete our initial business combination that our shareholders
may not support.

 In
order to effectuate a business combination, blank check companies have, in the recent past, amended various provisions of their charters
and governing instruments, including their warrant agreements. For example, blank check companies have amended the definition of business
combination, increased redemption thresholds, extended the time to consummate an initial business combination and, with respect to their
warrants, amended their warrant agreements to require the warrants to be exchanged for cash and/or other securities. Amending our Charter
will require at least a special resolution of our shareholders as a matter of Cayman Islands law, meaning the approval of holders of
at least two-thirds of our ordinary shares who attend and vote at a shareholder meeting of the company, and amending our warrant agreement
will require a vote of holders of at least 50% of the public warrants and, solely with respect to any amendment to the terms of the private
placement warrants or any provision of the warrant agreement with respect to the private placement warrants, 50% of the number of the
then outstanding private placement warrants. In addition, our Charter require us to provide our public shareholders with the opportunity
to redeem their public shares for cash if we propose an amendment to our Charter (A) that would modify the substance or timing of our
obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed in connection with our initial business
combination or to redeem 100% of our public shares if we do not complete our initial business combination within 36 months (or 42 months,
subject to six one-month extensions) from the closing of our initial public offering or (B) with respect to any other provision relating
to the rights of holders of our Class A ordinary shares. To the extent any of such amendments would be deemed to fundamentally change
the nature of any of the securities offered through our initial public offering, we would register, or seek an exemption from registration
for, the affected securities.

 Our
Sponsor controls a substantial interest in us and thus may exert a substantial influence on actions requiring a shareholder vote, potentially
in a manner that you do not support.

 Our
Sponsor owns, on an as-converted basis, 92.2% of our issued and outstanding ordinary shares. Accordingly, it may exert a substantial
influence on actions requiring a shareholder vote, potentially in a manner that you do not support, including amendments to our Charter.
If our Sponsor purchases any additional Class A ordinary shares in the aftermarket or in privately negotiated transactions, this would
increase its control. Neither our Sponsor nor, to our knowledge, any of our officers or directors, have any current intention to purchase
additional securities, other than as disclosed in this report. Factors that would be considered in making such additional purchases would
include consideration of the current trading price of our Class A ordinary shares. In addition, our board of directors, whose members
were elected by our Sponsor, is and will be divided into three classes, each of which will generally serve for a term of three years
with only one class of directors being elected in each year. We may not hold an annual meeting of shareholders to elect new directors
prior to the completion of our initial business combination, in which case all of the current directors will continue in office until
at least the completion of the business combination. If there is an annual meeting, as a consequence of our "staggered" board of directors,
only a minority of the board of directors will be considered for election and our Sponsor, because of its ownership position, will control
the outcome, as only holders of our Class B ordinary shares will have the right to vote on the election of directors and to remove directors
prior to our initial business combination. Accordingly, our Sponsor will continue to exert control at least until the completion of our
initial business combination. In addition, we have agreed not to enter into a definitive agreement regarding an initial business combination
without the prior consent of our Sponsor.

 After
our initial business combination, it is possible that a majority of our directors and officers will live outside the United States and
all of our assets will be located outside the United States; therefore investors may not be able to enforce federal securities laws or
their other legal rights.

 It
is possible that after our initial business combination, a majority of our directors and officers will reside outside of the United States
and all of our assets will be located outside of the United States. As a result, it may be difficult, or in some cases not possible,
for investors in the United States to enforce their legal rights, to effect service of process upon all of our directors or officers
or to enforce judgments of United States courts predicated upon civil liabilities and criminal penalties on our directors and officers
under United States laws.

 You
will not be entitled to protections normally afforded to investors of many other blank check companies.

 Since
the net proceeds of our initial public offering and the sale of the private placement warrants are intended to be used to complete
an initial business combination with a target business that has not been selected, we may be deemed to be a "blank
check" company under the United States securities laws. However, because we have net tangible assets in excess of $5,000,000
following the completion of our initial public offering and the sale of the private placement warrants, including an audited
consolidated balance sheet demonstrating this fact, we are exempt from rules promulgated by the SEC to protect investors in blank
check companies, such as Rule 419. Accordingly, investors will not be afforded the benefits or protections of those rules. Among
other things, this means our Units were immediately tradable and we have a longer period of time to complete our initial business
combination than do companies subject to Rule 419. Moreover, if our initial public offering were subject to Rule 419, that rule
would prohibit the release of any interest earned on funds held in the Trust Account to us unless and until the funds in the Trust
Account were released to us in connection with our completion of an initial business combination.

 Subsequent
to our completion of our initial business combination, we may be required to take write-downs or write-offs, restructuring and impairment
or other charges that could have a significant negative effect on our financial condition, results of operations and the price of our
securities, which could cause you to lose some or all of your investment.

 Even
if we conduct extensive due diligence on a target business with which we combine, we cannot assure you that this diligence will identify
all material issues with a particular target business, that it would be possible to uncover all material issues through a customary amount
of due diligence, or that factors outside of the target business and outside of our control will not later arise. As a result of these
factors, we may be forced to later write-down or write-off assets, restructure our operations, or incur impairment or other charges that
could result in our reporting losses. Even if our due diligence successfully identifies certain risks, unexpected risks may arise and
previously known risks may materialize in a manner not consistent with our preliminary risk analysis. Even though these charges may be
non-cash items and not have an immediate impact on our liquidity, the fact that we report charges of this nature could contribute to
negative market perceptions about us or our securities. In addition, charges of this nature may cause us to violate net worth or other
covenants to which we may be subject as a result of assuming pre-existing debt held by a target business or by virtue of our obtaining
post-combination debt financing. Accordingly, any holders who choose to retain their securities following the business combination could
suffer a reduction in the value of their securities. Such holders are unlikely to have a remedy for such reduction in value.

 If
third parties bring claims against us, the proceeds held in the Trust Account could be reduced and the per-share redemption amount received
by shareholders may be less than $10.00 per public share.

 Our
placing of funds in the Trust Account may not protect those funds from third-party claims against us. Although we will seek to have all
vendors, service providers (except our independent registered public accounting firm), prospective target businesses and other entities
with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held
in the Trust Account for the benefit of our public shareholders, such parties may not execute such agreements, or even if they execute
such agreements, they may not be prevented from bringing claims against the Trust Account, including, but not limited to, fraudulent
inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver,
in each case in order to gain advantage with respect to a claim against our assets, including the funds held in the Trust Account. If
any third-party refuses to execute an agreement waiving such claims to the monies held in the Trust Account, our management will perform
an analysis of the alternatives available to it and will only enter into an agreement with a third-party that has not executed a waiver
if management believes that such third-party's engagement would be significantly more beneficial to us than any alternative.

 Examples
of possible instances where we may engage a third-party that refuses to execute a waiver include the engagement of a third-party consultant
whose particular expertise or skills are believed by management to be significantly superior to those of other consultants that would
agree to execute a waiver or in cases where management is unable to find a service provider willing to execute a waiver. In addition,
there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of, or arising out of,
any negotiations, contracts or agreements with us and will not seek recourse against the Trust Account for any reason. Upon redemption
of our public shares, if we have not consummated an initial business combination within 24 months (or 30 months, subject to six one-month
extensions) from the closing of our initial public offering, or upon the exercise of a redemption right in connection with our initial
business combination, we will be required to provide for payment of claims of creditors that were not waived that may be brought against
us within the ten years following redemption. Accordingly, the per-share redemption amount received by public shareholders could be less
than the $10.00 per public share initially held in the Trust Account, due to claims of such creditors. Pursuant to the letter agreement,
our Sponsor has agreed that it will be liable to us if and to the extent any claims by a third-party (other than our independent registered
public accounting firm) for services rendered or products sold to us, or a prospective target business with which we have discussed entering
into a transaction agreement, reduce the amounts in the Trust Account to below the lesser of (i) $10.00 per public share and (ii) the
actual amount per public share held in the Trust Account as of the date of the liquidation of the Trust Account if less than $10.00 per
public share due to reductions in the value of the trust assets, in each case net of the interest that may be withdrawn to pay our tax
obligations, provided that such liability will not apply to any claims by a third-party or prospective target business that executed
a waiver of any and all rights to seek access to the Trust Account nor will it apply to any claims under our indemnity of the underwriters
of our initial public offering against certain liabilities, including liabilities under the Securities Act. Moreover, in the event that
an executed waiver is deemed to be unenforceable against a third-party, our sponsor will not be responsible to the extent of any liability
for such third-party claims.

 However,
we have not asked our Sponsor to reserve for such indemnification obligations, nor have we independently verified whether our Sponsor
has sufficient funds to satisfy its indemnity obligations and we believe that our Sponsor's only assets are securities of our company.
Therefore, we cannot assure you that our Sponsor would be able to satisfy those obligations. As a result, if any such claims were successfully
made against the Trust Account, the funds available for our initial business combination and redemptions could be reduced to less than
$10.00 per public share. In such event, we may not be able to complete our initial business combination, and you would receive such lesser
amount per share in connection with any redemption of your public shares. None of our officers or directors will indemnify us for claims
by third parties including, without limitation, claims by vendors and prospective target businesses.

 Our
directors may decide not to enforce the indemnification obligations of our Sponsor, resulting in a reduction in the amount of funds in
the Trust Account available for distribution to our public shareholders.

 In
the event that the proceeds in the Trust Account are reduced below the lesser of (i) $10.00 per public share and (ii) the actual amount
per public share held in the Trust Account as of the date of the liquidation of the Trust Account if less than $10.00 per public share
due to reductions in the value of the trust assets, in each case net of the interest that may be withdrawn to pay our tax obligations,
and our Sponsor asserts that it is unable to satisfy its obligations or that it has no indemnification obligations related to a particular
claim, our independent directors would determine whether to take legal action against our Sponsor to enforce its indemnification obligations.
While we currently expect that our independent directors would take legal action on our behalf against our Sponsor to enforce its indemnification
obligations to us, it is possible that our independent directors in exercising their business judgment and subject to their fiduciary
duties may choose not to do so in any particular instance. If our independent directors choose not to enforce these indemnification obligations,
the amount of funds in the Trust Account available for distribution to our public shareholders may be reduced below $10.00 per public
share.

 If,
after we distribute the proceeds in the Trust Account to our public shareholders, we file a bankruptcy petition or an involuntary bankruptcy
petition is filed against us that is not dismissed, a bankruptcy court may seek to recover such proceeds, and the members of our board
of directors may be viewed as having breached their fiduciary duties to our creditors, thereby exposing the members of our board of directors
and us to claims of punitive damages.

 If,
after we distribute the proceeds in the Trust Account to our public shareholders, we file a bankruptcy petition or an involuntary bankruptcy
petition is filed against us that is not dismissed, any distributions received by shareholders could be viewed under applicable debtor/creditor
and/or bankruptcy laws as either a "preferential transfer" or a "fraudulent conveyance." As a result, a bankruptcy court could seek to
recover some or all amounts received by our shareholders. In addition, our board of directors may be viewed as having breached its fiduciary
duty to our creditors and/or having acted in bad faith, thereby exposing itself and us to claims of punitive damages, by paying public
shareholders from the Trust Account prior to addressing the claims of creditors.

 If,
before distributing the proceeds in the Trust Account to our public shareholders, we file a bankruptcy petition or an involuntary bankruptcy
petition is filed against us that is not dismissed, the claims of creditors in such proceeding may have priority over the claims of our
shareholders and the per-share amount that would otherwise be received by our shareholders in connection with our liquidation may be
reduced.

 If,
before distributing the proceeds in the Trust Account to our public shareholders, we file a bankruptcy petition or an involuntary bankruptcy
petition is filed against us that is not dismissed, the proceeds held in the Trust Account could be subject to applicable bankruptcy
law, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our shareholders.
To the extent any bankruptcy claims deplete the Trust Account, the per-share amount that would otherwise be received by our shareholders
in connection with our liquidation may be reduced.

we are not limited to evaluating a target business in a particular industry sector, you may be unable to ascertain the merits or risks
of any particular target business's operations.

 We
may pursue business combination opportunities in any sector, except that we are not, under our Charter, be permitted to effectuate our
initial business combination solely with another blank check company or similar company with nominal operations. To the extent we complete
our initial business combination, we may be affected by numerous risks inherent in the business operations with which we combine. For
example, if we combine with a financially unstable business or an entity lacking an established record of sales or earnings, we may be
affected by the risks inherent in the business and operations of a financially unstable or a development stage entity. Although our officers
and directors will endeavor to evaluate the risks inherent in a particular target business, we cannot assure you that we will properly
ascertain or assess all of the significant risk factors or that we will have adequate time to complete due diligence. Furthermore, some
of these risks may be outside of our control and leave us with no ability to control or reduce the chances that those risks will adversely
impact a target business. We also cannot assure you that an investment in our units will ultimately prove to be more favorable to investors
than a direct investment, if such opportunity were available, in a business combination target. Accordingly, any holders who choose to
retain their securities following the business combination could suffer a reduction in the value of their securities. Such holders are
unlikely to have a remedy for such reduction in value.

 We
are not required to obtain an opinion from an independent accounting or investment banking firm, and consequently, you may have no assurance
from an independent source that the price we are paying for the business is fair to our shareholders from a financial point of view.

 Unless
we complete our initial business combination with an affiliated entity, we are not required to obtain an opinion from an independent
investment banking firm or another independent entity that commonly renders valuation opinions that the price we are paying is fair to
our shareholders from a financial point of view. On January 18, 2023, the our board discussed AIRO Group Holdings, the evaluation of
the company and the need for a fairness opinion. Our board unanimously voted to move forward with a fairness opinion. The Mentor Group,
Inc. was engaged to provide the board an evaluation of AIRO Group Holdings. The opinion was furnished solely to be utilized by our board
as only one input to consider in its process of analyzing the Business Combination and it did not constitute a recommendation to our
board (or any member thereof), any shareholder or any other person as to how such person should vote or invest in Kernel or otherwise
act with respect to the Business Combination or in any other manner. Except for the opinion, our shareholders will be relying on the
judgment of our board of directors, who will determine fair market value based on standards generally accepted by the financial community.
Such standards used will be disclosed in our proxy solicitation or tender offer materials, as applicable, related to our initial business
combination.

 We
may engage one or more of our underwriters or one of their respective affiliates to provide additional services to us after our initial
public offering, which may include acting as financial advisor in connection with an initial business combination or as placement agent
in connection with a related financing transaction. Our underwriters are entitled to receive deferred commissions that will released
from the trust only on a completion of an initial business combination. These financial incentives may cause them to have potential conflicts
of interest in rendering any such additional services to us after our initial public offering, including, for example, in connection
with the sourcing and consummation of an initial business combination.

 We
may engage one or more of our underwriters or one of their respective affiliates to provide additional services to us after our initial
public offering, including, for example, identifying potential targets, providing financial advisory services, acting as a placement
agent in a private offering or arranging debt financing. We may pay such underwriter or its affiliate fair and reasonable fees or other
compensation that would be determined at that time in an arm's length negotiation; provided that no agreement will be entered into
with any of the underwriters or their respective affiliates and no fees or other compensation for such services will be paid to any of
the underwriters or their respective affiliates prior to the date that is 60 days from the date of this report, unless FINRA determines
that such payment would not be deemed underwriters' compensation in connection with our initial public offering. The underwriters
are also entitled to receive deferred commissions that are conditioned on the completion of an initial business combination. The fact
that the underwriters' or their respective affiliates' financial interests tied to the consummation of a business combination
transaction may give rise to potential conflicts of interest in providing any such additional services to us, including potential conflicts
of interest in connection with the sourcing and consummation of an initial business combination.

 Resources
could be wasted in researching acquisitions that are not completed, which could materially adversely affect subsequent attempts to locate
and acquire or merge with another business. If we have not consummated our initial business combination within the required time period,
our public shareholders may receive only approximately $10.00 per public share, or less in certain circumstances, on the liquidation
of our Trust Account and our warrants will expire worthless.

 We
anticipate that the investigation of each specific target business and the negotiation, drafting and execution of relevant agreements,
disclosure documents and other instruments will require substantial management time and attention and substantial costs for accountants,
attorneys and others. If we decide not to complete a specific initial business combination, the costs incurred up to that point for the
proposed transaction likely would not be recoverable. Furthermore, if we reach an agreement relating to a specific target business, we
may fail to complete our initial business combination for any number of reasons including those beyond our control. Any such event will
result in a loss to us of the related costs incurred which could materially adversely affect subsequent attempts to locate and acquire
or merge with another business. If we have not consummated our initial business combination within the required time period, our public
shareholders may receive only approximately $10.00 per public share, or less in certain circumstances, on the liquidation of our Trust
Account and our warrants will expire worthless.

 Compliance
obligations under the Sarbanes-Oxley Act may make it more difficult for us to effectuate a business combination, require substantial
financial and management resources, and increase the time and costs of completing an acquisition.

 Section
404 of the Sarbanes-Oxley Act requires that we evaluate and report on our system of internal controls beginning with our Annual Report
on Form 10-K for the year ending December 31, 2023. Only in the event we are deemed to be a large accelerated filer or an accelerated
filer and no longer qualify as an emerging growth company, will we not be required to comply with the independent registered public accounting
firm attestation requirement on our internal control over financial reporting. The fact that we are a blank check company makes compliance
with the requirements of the Sarbanes-Oxley Act particularly burdensome on us as compared to other public companies because a target
business with which we seek to complete our initial business combination may not be in compliance with the provisions of the Sarbanes-Oxley
Act regarding adequacy of its internal controls. The development of the internal control of any such entity to achieve compliance with
the Sarbanes-Oxley Act may increase the time and costs necessary to complete any such acquisition.

 The
provisions of our Charter that relate to the rights of holders of our Class A ordinary shares (and corresponding provisions of the agreement
governing the release of funds from our Trust Account) may be amended with the approval of a special resolution which requires the approval
of the holders of at least two-thirds of our ordinary shares who attend and vote at a shareholder meeting of the company, which is a
lower amendment threshold than that of some other blank check companies. It may be easier for us, therefore, to amend our Charter to
facilitate the completion of an initial business combination that some of our shareholders may not support.

 Some
other blank check companies have a provision in their charter which prohibits the amendment of certain of its provisions, including those
which relate to the rights of a company's shareholders, without approval by a certain percentage of the company's shareholders.
In those companies, amendment of these provisions typically requires approval by between 90% and 100% of the company's shareholders.
Our Charter provide that any of its provisions related to the rights of holders of our Class A ordinary shares (including the requirement
to deposit proceeds of our initial public offering and the private placement of warrants into the Trust Account and not release such
amounts except in specified circumstances, and to provide redemption rights to public shareholders as described herein) may be amended
if approved by special resolution, meaning holders of at least two-thirds of our ordinary shares who attend and vote at a shareholder
meeting of the company, and corresponding provisions of the trust agreement governing the release of funds from our Trust Account may
be amended if approved by holders of at least 65% of our ordinary shares; provided that the provisions of our Charter governing the appointment
or removal of directors prior to our initial business combination may only be amended by a special resolution passed by not less than
two-thirds of our ordinary shares who attend and vote at our shareholder meeting which shall include the affirmative vote of a simple
majority of our Class B ordinary shares. Our Sponsor and its permitted transferees, if any, who collectively beneficially own, on an
as-converted basis, 92.2% of our Class A ordinary shares upon the closing of our initial public offering, will participate in any
vote to amend our Charter and/or trust agreement and will have the discretion to vote in any manner they choose. As a result, we may
be able to amend the provisions of our Charter which govern our pre-business combination behavior more easily than some other blank check
companies, and this may increase our ability to complete a business combination with which you do not agree. Our shareholders may pursue
remedies against us for any breach of our Charter.

 Our
Sponsor, executive officers and directors have agreed, pursuant to agreements with us, that they will not propose any amendment to our
Charter (A) that would modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to
have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete
our initial business combination within 36 months (or 42 months, subject to six one-month extensions) from the closing of our initial
public offering or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares, unless we
provide our public shareholders with the opportunity to redeem their Class A ordinary shares upon approval of any such amendment at a
per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the
funds held in the Trust Account and not previously released to us to pay our taxes, if any, divided by the number of the then-outstanding
public shares. Our shareholders are not parties to, or third-party beneficiaries of, these agreements and, as a result, do not have the
ability to pursue remedies against our Sponsor, executive officers or directors for any breach of these agreements. As a result, in the
event of a breach, our shareholders would need to pursue a shareholder derivative action, subject to applicable law.

 Our
letter agreement with our Sponsor, officers and directors may be amended without shareholder approval.

 Our
letter agreement with our Sponsor, officers and directors contains provisions relating to transfer restrictions of our founder shares
and private placement warrants, indemnification of the Trust Account, waiver of redemption rights and participation in liquidating distributions
from the Trust Account. The letter agreement may be amended without shareholder approval (although releasing the parties from the restriction
not to transfer the founder shares for 180 days following the date of our final prospectus will require the prior written consent of
the representatives). While we do not expect our board to approve any amendment to the letter agreement prior to our initial business
combination, it may be possible that our board, in exercising its business judgment and subject to its fiduciary duties, chooses to approve
one or more amendments to the letter agreement. Any such amendments to the letter agreement would not require approval from our shareholders
and may have an adverse effect on the value of an investment in our securities.

 We
may be unable to obtain additional financing to complete our initial business combination or to fund the operations and growth of a target
business, which could compel us to restructure or abandon a particular business combination. If we have not consummated our initial business
combination within the required time period, our public shareholders may receive only approximately $10.00 per public share, or less
in certain circumstances, on the liquidation of our Trust Account and our warrants will expire worthless.

 Although
we believe that the net proceeds of our initial public offering and the sale of the private placement warrants will be sufficient to
allow us to complete our initial business combination, we cannot fully ascertain the capital requirements for our initial business combination.
If the net proceeds of our initial public offering and the sale of the private placement warrants prove to be insufficient, either because
of the size of our initial business combination, the depletion of the available net proceeds in search of a target business, the obligation
to redeem for cash a significant number of shares from shareholders who elect redemption in connection with our initial business combination
or the terms of negotiated transactions to purchase shares in connection with our initial business combination, we may be required to
seek additional financing or to abandon the proposed business combination. We cannot assure you that such financing will be available
on acceptable terms, if at all. The current economic environment may make it difficult for companies to obtain acquisition financing.
To the extent that additional financing proves to be unavailable when needed to complete our initial business combination, we would be
compelled to either restructure the transaction or abandon that particular business combination and seek an alternative target business
candidate. If we have not consummated our initial business combination within the required time period, our public shareholders may receive
only approximately $10.00 per public share, or less in certain circumstances, on the liquidation of our Trust Account and our warrants
will expire worthless. In addition, even if we do not need additional financing to complete our initial business combination, we may
require such financing to fund the operations or growth of the target business. The failure to secure additional financing could have
a material adverse effect on the continued development or growth of the target business. None of our officers, directors or shareholders
is required to provide any financing to us in connection with or after our initial business combination.

 The
waiver of fees by Citigroup Global Markets Inc. may indicate that they may be unwilling to be associated with our initial business combination.

 On
May 24, 2023, Citigroup Global Markets Inc., the underwriter of our IPO waived its rights to the deferred underwriting commission totaling
$10.7 million held in the Trust Account. Citigroup Global Markets Inc. did not provide a reason for waiving its deferred underwriting
commission. Shareholders should be aware that such waivers indicate that Citigroup Global Markets Inc. does not want to be associated
with the disclosures in a proxy statement/prospectus relating to our Business Combination or any underlying business analysis related
to the Business Combination described therein. Further, pursuant to the letter received on May 24, 2023, Citigroup Global Markets Inc.
ceased and refuses to act in every office, capacity and relationship with respect to the Business Combination.

 Citigroup
Global Markets Inc. has performed all its obligations under the Underwriting Agreement to obtain its fee and is therefore gratuitously
waiving its right to be compensated. Such a fee waiver for services already rendered is unusual. We were not made aware of the reasons
why Citigroup Global Markets Inc. waived the deferred underwriting commission fee. Citigroup Global Markets Inc. has not performed any
additional services for us after the IPO and is not expected to perform any additional services following the consummation of the Business
Combination.

may delist our securities from its exchange which could limit investors' ability to make transactions in our securities and subject
us to additional trading restrictions.

 We
are listed on The Nasdaq Capital Market. Nasdaq IM-5101-2 requires that a special purpose acquisition company completes one or more business
combinations within 36 months of the effectiveness of its IPO registration statement, which, in the case of Kernel, would be February
2, 2024 (the "Nasdaq Deadline"). The approval of the Third Charter Amendment at the Extension Meeting - Third extended the
date by which we must complete our initial business combination to August 5, 2024, which is beyond the Nasdaq Deadline. As a result,
our Charter does not comply with Nasdaq rules.

 On
February 5, 2024, we received a notice from the staff of the Listing Qualifications Department of The Nasdaq Stock Market LLC indicating
that, unless we timely requests a hearing before the Nasdaq Hearings Panel (the "Panel"), our securities would be subject
to suspension and delisting from The Nasdaq Capital Market at the opening of business on February 14, 2024, due to our non-compliance
with Nasdaq IM-5101-2. We timely requested a hearing before the Panel to request sufficient time to complete the Business Combination
with AIRO Group Holdings. We cannot assure you that Nasdaq will not delist us, or that we will be able to obtain a hearing with the Panel
to appeal the delisting determination, or that our securities will not be suspended pending the Panel's decision.

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

Our ability to complete an initial business combination with a target company contemplating a Nasdaq listing;

a limited availability of market quotations for our securities;

reduced liquidity for our securities;

a determination that our Class A ordinary share are a "penny stock," which will require brokers trading in our Class A ordinary
shares to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for
our securities;

a limited amount of news and analyst coverage; and

a decreased ability to issue additional securities or obtain additional financing in the future.

 The
National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the
sale of certain securities, which are referred to as "covered securities." Because our Units, Class A ordinary shares, and
Public Warrants are currently listed on Nasdaq, our Units, Class A ordinary shares, and Pubic Warrants are covered securities. If we
are no longer listed on Nasdaq, our securities would not be covered securities and we would be subject to regulation in each state in
which we offer our securities.

 We
may have a limited ability to assess the management of a prospective target business and, as a result, may affect our initial business
combination with a target business whose management may not have the skills, qualifications or abilities to manage a public company.

 When
evaluating the desirability of effecting our initial business combination with a prospective target business, our ability to assess the
target business's management may be limited due to a lack of time, resources or information. Our assessment of the capabilities
of the target business's management, therefore, may prove to be incorrect and such management may lack the skills, qualifications
or abilities we suspected. Should the target business's management not possess the skills, qualifications or abilities necessary
to manage a public company, the operations and profitability of the post-combination business may be negatively impacted. Accordingly,
any holders who choose to retain their securities following the business combination could suffer a reduction in the value of their securities.
Such holders are unlikely to have a remedy for such reduction in value.

 We
may issue notes or other debt securities, or otherwise incur substantial debt, to complete a business combination, which may adversely
affect our leverage and financial condition and thus negatively impact the value of our shareholders' investment in us.

 Although
we have no commitments as of the date of this report to issue any notes or other debt securities, or to otherwise incur outstanding debt
following our initial public offering, we may choose to incur substantial debt to complete our initial business combination. We and our
officers have agreed that we will not incur any indebtedness unless we have obtained from the lender a waiver of any right, title, interest
or claim of any kind in or to the monies held in the Trust Account. As such, no issuance of debt will affect the per-share amount available
for redemption from the Trust Account. Nevertheless, the incurrence of debt could have a variety of negative effects, including:

 default
 and foreclosure on our assets if our operating revenues after an initial business combination are insufficient to repay our debt
 obligations;

 acceleration
 of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants
 that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant;

 our
 immediate payment of all principal and accrued interest, if any, if the debt is payable on demand;

 our
 inability to obtain necessary additional financing if the debt contains covenants restricting our ability to obtain such financing
 while the debt is outstanding;

 our
 inability to pay dividends on our Class A ordinary shares;

 using
 a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends
 on our Class A ordinary shares if declared, expenses, capital expenditures, acquisitions and other general corporate purposes;

 limitations
 on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate;

 increased
 vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation;
 and

 limitations
 on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, execution
 of our strategy and other purposes and other disadvantages compared to our competitors who have less debt.

 We
may only be able to complete one business combination with the proceeds of our initial public offering and the sale of the private placement
warrants, which will cause us to be solely dependent on a single business which may have a limited number of products or services. This
lack of diversification may negatively impact our operations and profitability

 The
net proceeds from our initial public offering and the sale of the private placement warrants provided us with up to $295,338,750 that
we may use to complete our initial business combination.

 We
may effectuate our initial business combination with a single-target business or multiple-target businesses simultaneously or within
a short period of time. However, we may not be able to effectuate our initial business combination with more than one target business
because of various factors, including the existence of complex accounting issues and the requirement that we prepare and file pro forma
financial statements with the SEC that present operating results and the financial condition of several target businesses as if they
had been operated on a combined basis. By completing our initial business combination with only a single entity, our lack of diversification
may subject us to numerous economic, competitive and regulatory developments. Further, we would not be able to diversify our operations
or benefit from the possible spreading of risks or offsetting of losses, unlike other entities which may have the resources to complete
several business combinations in different industries or different areas of a single industry.

 Accordingly,
the prospects for our success may be:

 solely
 dependent upon the performance of a single business, property or asset; or

 dependent
 upon the development or market acceptance of a single or limited number of products, processes or services.

 This
lack of diversification may subject us to numerous economic, competitive and regulatory risks, any or all of which may have a substantial
adverse impact upon the particular industry in which we may operate subsequent to our initial business combination.

 We
plan to complete our initial business combination with a private company about which little information is available, which may result
in a business combination with a company that is not as profitable as we suspected, if at all.

 In
pursuing our acquisition strategy, we plan to effectuate our initial business combination with a privately held company. Very little
public information generally exists about private companies, and we could be required to make our decision on whether to pursue a potential
initial business combination on the basis of limited information, which may result in a business combination with a company that is not
as profitable as we suspected, if at all.

we must furnish our shareholders with target business financial statements, we may lose the ability to complete an otherwise advantageous
initial business combination with some prospective target businesses.

 The
federal proxy rules require that a proxy statement with respect to a vote on a business combination meeting certain financial significance
tests include historical and/or pro forma financial statement disclosure in periodic reports. We will include the same financial statement
disclosure in connection with our tender offer documents, whether or not they are required under the tender offer rules. These financial
statements may be required to be prepared in accordance with, or be reconciled to, accounting principles generally accepted in the United
States of America, or GAAP, or international financial reporting standards as issued by the International Accounting Standards Board,
or IFRS, depending on the circumstances and the historical financial statements may be required to be audited in accordance with the
standards of the Public Company Accounting Oversight Board (United States), or PCAOB. These financial statement requirements may limit
the pool of potential target businesses we may acquire because some targets may be unable to provide such statements in time for us to
disclose such statements in accordance with federal proxy rules and complete our initial business combination within the prescribed time
frame.

 If
we have not consummated an initial business combination within 36 months (or 42 months, subject to six one-month extensions) from the
closing of our initial public offering, our public shareholders may be forced to wait beyond such 36 months (or 42 months, subject to
six one-month extensions) before redemption from our Trust Account.

 If
we have not consummated an initial business combination within 36 months from the closing of our initial public offering, the proceeds
then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to
us to pay our taxes, if any (less up to $100,000 of interest to pay dissolution expenses), will be used to fund the redemption of our
public shares, as further described herein. Any redemption of public shareholders from the Trust Account will be effected automatically
by function of our Charter prior to any voluntary winding up. If we are required to wind up, liquidate the Trust Account and distribute
such amount therein, pro rata, to our public shareholders, as part of any liquidation process, such winding up, liquidation and distribution
must comply with the applicable provisions of the Companies Act. In that case, investors may be forced to wait beyond 36 months from
the closing of our initial public offering before the redemption proceeds of our Trust Account become available to them, and they receive
the return of their pro rata portion of the proceeds from our Trust Account. We have no obligation to return funds to investors prior
to the date of our redemption or liquidation unless, prior thereto, we consummate our initial business combination or amend certain provisions
of our Charter, and only then in cases where investors have sought to redeem their Class A ordinary shares. Only upon our redemption
or any liquidation will public shareholders be entitled to distributions if we do not complete our initial business combination and do
not amend certain provisions of our Charter. Our Charter provide that, if we wind up for any other reason prior to the consummation of
our initial business combination, we will follow the foregoing procedures with respect to the liquidation of the Trust Account as promptly
as reasonably possible but not more than ten business days thereafter, subject to applicable Cayman Islands law.

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

 Whether
a SPAC is an investment company as defined in the Investment Company Act is a question of facts and circumstances according to the adopting
release, which added, "Given the individualized nature of this analysis, and depending on the facts and circumstances,
a SPAC could be an investment company at any stage of its operations." As a result, it is possible that a claim could be made that
we have been operating as an unregistered investment company.

 If
we are deemed to be an investment company under the Investment Company Act, our activities would be severely restricted. In addition,
if we are deemed to be an investment company and subject to compliance with and regulation under the Investment Company Act, we would
be subject to additional regulatory burdens and expenses for which we have not allotted funds. As a result, unless we are able to modify
our activities so that we would not be deemed an investment company, we would expect to abandon our efforts to complete an initial business
combination and instead to liquidate.

 Moreover,
if we are deemed to be an investment company under the Investment Company Act, we may be required to liquidate our Trust Account by returning
the then remaining funds in such account to the public shareholders and then proceed to liquidate and dissolve. If we are required to
liquidate and dissolve, we will be unable to complete our business combination with AIRO Group Holdings, we may lose the opportunity
for any stock price appreciation and our outstanding warrants would expire worthless.

 Our
independent registered public accounting firm's report contains an explanatory paragraph that expresses substantial doubt about
our ability to continue as a "going concern."

 If
we are unable to raise additional capital, we may be required to take additional measures to conserve liquidity, which could include,
but not necessarily be limited to, suspending the pursuit of a Business Combination. We cannot provide any assurance that new financing
will be available to us on commercially acceptable terms, if at all. Further, our plans to raise capital and to consummate our initial
business combination may not be successful. We currently have a mandatory liquidation date of August 5, 2024 to complete an initial business
combination. Although we expect to complete a business combination on or prior to August 5, 2024, it is uncertain whether we will be
able to do so. These factors, among others, raise substantial doubt about our ability to continue as a going concern through our liquidation
date. The financial statements contained elsewhere in this Report do not include any adjustments that might result from our inability
to consummate a Business Combination or our inability to continue as a going concern.

 Risks
Relating to our Securities

 To
mitigate the risk that we might be deemed to be an investment company for purposes of the Investment Company Act, in February 2023, we
instructed Continental Stock Transfer & Trust Company, the trustee with respect to the Trust Account to liquidate the investments
held in the Trust Account and instead to hold the funds in the Trust Account in cash until the earlier of the consummation of our initial
Business Combination or our liquidation. In July 2023, we instructed the trustee to instead hold the funds in the Trust Account in an
interest-bearing demand deposit account at a bank until the earlier of the consummation of our initial Business Combination or our liquidation.
As a result, following such liquidation of investments in the Trust Account, we will receive less interest on the funds held in the Trust
Account than we would have received had we not liquidated such investments in the Trust Account, which would reduce the dollar amount
our Public Shareholders would receive upon any redemption or liquidation of the Company.

 Until
February 2023, the funds in the Trust Account had been, since our IPO, been held only in U.S. government treasury obligations with a
maturity of 185 days or less or in money market funds investing solely in U.S. government treasury obligations and meeting certain conditions
under Rule 2a-7 under the Investment Company Act. However, to mitigate the risk of us being deemed to be an unregistered investment company
(including under the subjective test of Section 3(a)(1)(A) of the Investment Company Act) and thus subject to regulation under the Investment
Company Act, in February 2023, we instructed Continental Stock Transfer & Trust Company, the trustee with respect to the Trust Account
to liquidate the investments held in the Trust Account and instead to hold the funds in the Trust Account in cash until the earlier of
the consummation of our initial Business Combination or our liquidation. In July 2023, we instructed the trustee to instead hold the
funds in the Trust Account in an interest-bearing demand deposit account at a bank until the earlier of the consummation of our initial
Business Combination or our liquidation. Following such liquidation, we may receive less interest on the funds held in the Trust Account
than the interest we would have received pursuant to our original Trust Account investments; however, interest previously earned on the
funds held in the Trust Account still may be released to us to pay our taxes, if any, and certain other expenses as permitted. Consequently,
the transfer of the funds in the Trust Account into cash in February 2023 and to an interest-bearing demand deposit account at a bank
in February 2023 could reduce the dollar amount our Public Shareholders would receive upon any redemption or our liquidation.

 Notwithstanding
the divestment of all investments in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds
investing solely in U.S. government treasury obligations effective as of January 24, 2024, we may still be deemed to be an investment
company under the Investment Company Act, which could require us to liquidate our Trust Account by returning the then remaining funds
in such account to the public shareholders and then proceed to liquidate and dissolve. If we are required to liquidate and dissolve,
we will be unable to complete our business combination with AIRO, we may lose the opportunity for any stock price appreciation and our
outstanding warrants would expire worthless.

 If
we seek shareholder approval of our initial business combination and we do not conduct redemptions pursuant to the tender offer rules,
and if you or a "group" of shareholders are deemed to hold in excess of 15% of our Class A ordinary shares, you will lose
the ability to redeem all such shares in excess of 15% of our Class A ordinary shares.

 If
we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business
combination pursuant to the tender offer rules, our Charter provide that a public shareholder, together with any affiliate of such shareholder
or any other person with whom such shareholder is acting in concert or as a "group" (as defined under Section 13 of the Exchange
Act), will be restricted from redeeming its shares with respect to more than an aggregate of 15% of the shares sold in our initial public
offering, which we refer to as the "Excess Shares," without our prior consent.

 However,
we would not be restricting our shareholders' ability to vote all of their shares (including Excess Shares) for or against our
initial business combination. Your inability to redeem the Excess Shares will reduce your influence over our ability to complete our
initial business combination and you could suffer a material loss on your investment in us if you sell Excess Shares in open market transactions.
Additionally, you will not receive redemption distributions with respect to the Excess Shares if we complete our initial business combination.
And as a result, you will continue to hold that number of shares exceeding 15% and, in order to dispose of such shares, would be required
to sell your shares in open market transactions, potentially at a loss.

may delist our securities from trading on its exchange, which could limit investors' ability to make transactions in our securities
and subject us to additional trading restrictions.

 Our
Units, Class A ordinary shares and warrants are listed on Nasdaq. In order to continue listing our securities on Nasdaq prior to our
initial business combination, we must maintain certain financial, distribution and share price levels. Generally, we must maintain a
minimum amount in shareholders' equity (generally $2,500,000) and a minimum number of holders of our securities (generally 300
public holders).

our Units will not be traded after completion of our initial business combination and, in connection with our initial business combination,
we will be required to demonstrate compliance with the Nasdaq's initial listing requirements, which are more rigorous than the
Nasdaq's continued listing requirements, in order to continue to maintain the listing of our securities on Nasdaq. For instance,
our share price would generally be required to be at least $4.00 per share and our shareholders' equity would generally be required
to be at least $5.0 million and we would be required to have a minimum of 300 round lot holders (with at least 50% of such round lot
holders holding securities with a market value of at least $2,500). We cannot assure you that we will be able to meet those initial listing
requirements at that time.

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

 a
 limited availability of market quotations for our securities;

 reduced
 liquidity for our securities;

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

 a
 limited amount of news and analyst coverage; and

 a
 decreased ability to issue additional securities or obtain additional financing in the future.

 The
National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the
sale of certain securities, which are referred to as "covered securities." Our units, Class A ordinary shares and warrants
are listed on Nasdaq, and, as a result, qualify as covered securities under the statute. Although the states are preempted from regulating
the sale of covered securities, the federal statute does allow the states to investigate companies if there is a suspicion of fraud,
and, if there is a finding of fraudulent activity, then the states can regulate or bar the sale of covered securities in a particular
case. While we are not aware of a state having used these powers to prohibit or restrict the sale of securities issued by blank check
companies, other than the State of Idaho, certain state securities regulators view blank check companies unfavorably and might use these
powers, or threaten to use these powers, to hinder the sale of securities of blank check companies in their states. Further, if we were
no longer listed on Nasdaq, our securities would not qualify as covered securities under the statute, and we would be subject to regulation
in each state in which we offer our securities.

 We
may issue additional Class A ordinary shares or preference shares to complete our initial business combination or under an employee incentive
plan after completion of our initial business combination. We may also issue Class A ordinary shares upon the conversion of the founder
shares at a ratio greater than one-to-one at the time of our initial business combination as a result of the anti-dilution provisions
contained in our Charter. Any such issuances would dilute the interest of our shareholders and likely present other risks.

 Our
Charter authorize the issuance of up to 500,000,000 Class A ordinary shares, par value $0.0001 per share, 50,000,000 Class B ordinary
shares, par value $0.0001 per share, and 1,000,000 preference shares, par value $0.0001 per share. There are 475,000,000 and 43,750,000
authorized but unissued Class A ordinary shares and Class B ordinary shares, respectively, available for issuance which amount does not
take into account shares reserved for issuance upon exercise of outstanding warrants or shares issuable upon conversion of the Class
B ordinary shares, if any. The Class B ordinary shares will automatically convert into Class A ordinary shares (which such Class A ordinary
shares delivered upon conversion will not have any redemption rights or be entitled to liquidating distributions from the Trust Account
if we fail to consummate an initial business combination) at the time of our initial business combination or earlier at the option of
the holders thereof as described herein and in our Charter. Immediately after our initial public offering, there will be no preference
shares issued and outstanding.

 We
may issue a substantial number of additional Class A ordinary shares or preference shares to complete our initial business combination
or under an employee incentive plan after completion of our initial business combination. We may also issue Class A ordinary shares in
connection with our redeeming the warrants as described in " Description of Securities-Warrants - Public Shareholders'
Warrants " or upon conversion of the Class B ordinary shares at a ratio greater than one-to-one at the time of our initial business
combination as a result of the anti-dilution provisions as set forth herein. However, our Charter provide, among other things, that prior
to or in connection with our initial business combination, we may not issue additional shares that would entitle the holders thereof
to (i) receive funds from the Trust Account or (ii) vote on any initial business combination or on any other proposal presented to shareholders
prior to or in connection with the completion of an initial business combination. These provisions of our Charter, like all provisions
of our Charter, may be amended with a shareholder vote. The issuance of additional ordinary or preference shares:

 may
 significantly dilute the equity interest of investors in our initial public offering, which dilution would increase if the anti-dilution
 provisions in the Class B ordinary shares resulted in the issuance of Class A ordinary shares on a greater than one-to-one basis
 upon conversion of the Class B ordinary shares;

 may
 subordinate the rights of holders of Class A ordinary shares if preference shares are issued with rights senior to those afforded
 our Class A ordinary shares;

 could
 cause a change in control if a substantial number of Class A ordinary shares are issued, which may affect, among other things, our
 ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers
 and directors;

 may
 have the effect of delaying or preventing a change of control of us by diluting the share ownership or voting rights of a person
 seeking to obtain control of us;

 may
 adversely affect prevailing market prices for our units, Class A ordinary shares and/or warrants; and

 may
 not result in adjustment to the exercise price of our warrants.

 Holders
of Class A ordinary shares will not be entitled to vote on any election of directors we hold prior to our initial business combination.

 Prior
to our initial business combination, only holders of our founder shares will have the right to vote on the election of directors. Holders
of our public shares will not be entitled to vote on the election of directors during such time. In addition, prior to our initial business
combination, holders of a majority of our founder shares may remove a member of the board of directors for any reason. Accordingly, you
may not have any say in the management of our company prior to the consummation of an initial business combination.

 We
are not registering the Class A ordinary shares issuable upon exercise of the warrants under the Securities Act or any state securities
laws at this time, and such registration may not be in place when an investor desires to exercise warrants, thus precluding such investor
from being able to exercise its warrants except on a cashless basis and potentially causing such warrants to expire worthless.

 We
are not registering the Class A ordinary shares issuable upon exercise of the warrants under the Securities Act or any state securities
laws at this time. However, under the terms of the warrant agreement, we have agreed that, as soon as practicable, but in no event later
than 20 business days after the closing of our initial business combination, we will use our commercially reasonable efforts to file
with the SEC a registration statement covering the issuance of such shares, and we will use our commercially reasonable efforts to cause
the same to become effective within 60 business days after the closing of our initial business combination and to maintain the effectiveness
of such registration statement and a current prospectus relating to those Class A ordinary shares until the warrants expire or are redeemed.
We cannot assure you that we will be able to do so if, for example, any facts or events arise which represent a fundamental change in
the information set forth in the registration statement or prospectus, the financial statements contained or incorporated by reference
therein are not current, complete or correct or the SEC issues a stop order. If the shares issuable upon exercise of the warrants are
not registered under the Securities Act in accordance with the above requirements, we will be required to permit holders to exercise
their warrants on a cashless basis, in which case, the number of Class A ordinary shares that you will receive upon cashless exercise
will be based on a formula subject to a maximum amount of shares equal to 0.361 Class A ordinary shares per warrant (subject to adjustment).
However, no warrant will be exercisable for cash or on a cashless basis, and we will not be obligated to issue any shares to holders
seeking to exercise their warrants, unless the issuance of the shares upon such exercise is registered or qualified under the securities
laws of the state of the exercising holder, or an exemption from registration is available. Notwithstanding the above, if our Class A
ordinary shares are at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the
definition of a "covered security" under Section 18(b)(1) of the Securities Act, we may, at our option, require holders of
public warrants who exercise their warrants to do so on a "cashless basis" in accordance with Section 3(a)(9) of the Securities
Act and, in the event we so elect, we will not be required to file or maintain in effect a registration statement, but we will use our
commercially reasonable efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available.
Exercising the warrants on a cashless basis could have the effect of reducing the potential "upside" of the holder's
investment in our company because the warrant holder will hold a smaller number of Class A ordinary shares upon a cashless exercise of
the warrants they hold. In no event will we be required to net cash settle any warrant, or issue securities or other compensation in
exchange for the warrants in the event that we are unable to register or qualify the shares underlying the warrants under applicable
state securities laws and no exemption is available. If the issuance of the shares upon exercise of the warrants is not so registered
or qualified or exempt from registration or qualification, the holder of such warrant shall not be entitled to exercise such warrant
and such warrant may have no value and expire worthless. In such event, holders who acquired their warrants as part of a purchase of
units will have paid the full unit purchase price solely for the Class A ordinary shares included in the units. There may be a circumstance
where an exemption from registration exists for holders of our private placement warrants to exercise their warrants while a corresponding
exemption does not exist for holders of the public warrants included as part of units sold in our initial public offering. In such an
instance, our Sponsor and its permitted transferees (which may include our directors and executive officers) would be able to exercise
their warrants and sell the ordinary shares underlying their warrants while holders of our public warrants would not be able to exercise
their warrants and sell the underlying ordinary shares. If and when the warrants become redeemable by us, we may exercise our redemption
right even if we are unable to register or qualify the underlying Class A ordinary shares for sale under all applicable state securities
laws. As a result, we may redeem the warrants as set forth above even if the holders are otherwise unable to exercise their warrants.

 We
may amend the terms of the warrants in a manner that may be adverse to holders of public warrants with the approval by the holders of
at least 50% of the then-outstanding public warrants. As a result, the exercise price of your warrants could be increased, the exercise
period could be shortened and the number of our Class A ordinary shares purchasable upon exercise of a warrant could be decreased, all
without your approval.

 Our
warrants were issued in registered form under a warrant agreement between Continental Stock Transfer & Trust Company, as warrant
agent, and us. The warrant agreement provides that the terms of the warrants may be amended without the consent of any holder for the
purpose of (i) curing any ambiguity or correct any mistake, including to conform the provisions of the warrant agreement to the description
of the terms of the warrants and the warrant agreement set forth in the final prospectus related to our initial public offering, or defective
provision, (ii) amending the provisions relating to cash dividends on ordinary shares as contemplated by and in accordance with the warrant
agreement or (iii) adding or changing any provisions with respect to matters or questions arising under the warrant agreement as the
parties to the warrant agreement may deem necessary or desirable and that the parties deem to not adversely affect the rights of the
registered holders of the warrants, provided that the approval by the holders of at least 50% of the then-outstanding public warrants
is required to make any change that adversely affects the interests of the registered holders of public warrants. Accordingly, we may
amend the terms of the public warrants in a manner adverse to a holder if holders of at least 50% of the then-outstanding public warrants
approve of such amendment and, solely with respect to any amendment to the terms of the private placement warrants or any provision of
the warrant agreement with respect to the private placement warrants, 50% of the number of the then outstanding private placement warrants.
Although our ability to amend the terms of the public warrants with the consent of at least 50% of the then-outstanding public warrants
is unlimited, examples of such amendments could be amendments to, among other things, increase the exercise price of the warrants, convert
the warrants into cash, shorten the exercise period or decrease the number of Class A ordinary shares purchasable upon exercise of a
warrant.

 We
may redeem your unexpired warrants prior to their exercise at a time that is disadvantageous to you, thereby making your warrants worthless.

 We
have the ability to redeem the outstanding public warrants at any time after they become exercisable and prior to their expiration, at
a price of $0.01 per warrant, provided that the closing price of our Class A ordinary shares equals or exceeds $18.00 per share
(as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the
heading "Description of Securities-Warrants-Public Shareholders' Warrants-Anti-Dilution Adjustments") for any 20 trading
days within a 30 trading-day period ending on the third trading day prior to proper notice of such redemption and provided that
certain other conditions are met. If and when the warrants become redeemable by us, we may exercise our redemption right even if we are
unable to register or qualify the underlying securities for sale under all applicable state securities laws. As a result, we may redeem
the warrants as set forth above even if the holders are otherwise unable to exercise the warrants. Redemption of the outstanding warrants
could force you to (i) exercise your warrants and pay the exercise price therefor at a time when it may be disadvantageous for you to
do so, (ii) sell your warrants at the then-current market price when you might otherwise wish to hold your warrants or (iii) accept the
nominal redemption price which, at the time the outstanding warrants are called for redemption, we expect would be substantially less
than the market value of your warrants.

 In
addition, we have the ability to redeem the outstanding public warrants at any time after they become exercisable and prior to their
expiration, at a price of $0.10 per warrant upon a minimum of 30 days' prior written notice of redemption provided that
the closing price of our Class A ordinary shares equals or exceeds $10.00 per share (as adjusted for adjustments to the number of shares
issuable upon exercise or the exercise price of a warrant) for any 20 trading days within a 30 trading-day period ending on the third
trading day prior to proper notice of such redemption and provided that certain other conditions are met, including that holders
will be able to exercise their warrants prior to redemption for a number of Class A ordinary shares determined based on the redemption
date and the fair market value of our Class A ordinary shares. The value received upon exercise of the warrants (1) may be less than
the value the holders would have received if they had exercised their warrants at a later time where the underlying share price is higher
and (2) may not compensate the holders for the value of the warrants, including because the number of ordinary shares received is capped
at 0.361 Class A ordinary shares per warrant (subject to adjustment) irrespective of the remaining life of the warrants.

 None
of the private placement warrants are redeemable by us as so long as they are held by our Sponsor or its permitted transferees.

 Our
warrants may have an adverse effect on the market price of our Class A ordinary shares and make it more difficult to effectuate our initial
business combination.

 We
issued Public Warrants to purchase 14,375,000 of our Class A ordinary shares as part of the Units sold in our initial public offering
and, simultaneously with the closing of our IPO and exercise of the underwriters' over-allotment option, we issued in private placements
an aggregate of 8,750,000 private placement warrants, each exercisable to purchase one Class A ordinary share at $11.50 per share, subject
to adjustment. In addition, if the Sponsor, its affiliates or a member of our management team makes any working capital loans, it may
convert up to $1,500,000 of such loans into up to an additional 1,000,000 private placement warrants, at the price of $1.00 per warrant.
We may also issue Class A ordinary shares in connection with our redemption of our warrants.

 To
the extent we issue ordinary shares for any reason, including to effectuate a business combination, the potential for the issuance of
a substantial number of additional Class A ordinary shares upon exercise of these warrants could make us a less attractive acquisition
vehicle to a target business. Such warrants, when exercised, will increase the number of issued and outstanding Class A ordinary shares
and reduce the value of the Class A ordinary shares issued to complete the business combination. Therefore, our warrants may make it
more difficult to effectuate a business combination or increase the cost of acquiring the target business.

each unit contains one-half of one redeemable warrant and only a whole warrant may be exercised, the units may be worth less than units
of other blank check companies.

 Each
unit contains one-half of one redeemable warrant. Pursuant to the warrant agreement, no fractional warrants were issued upon separation
of the units, and only whole units trade. If, upon exercise of the warrants, a holder would be entitled to receive a fractional interest
in a share, we will, upon exercise, round down to the nearest whole number the number of Class A ordinary shares to be issued to the
warrant holder. This is different from other offerings similar to ours whose units include one ordinary share and one whole warrant to
purchase one whole share. We have established the components of the units in this way in order to reduce the dilutive effect of the warrants
upon completion of a business combination since the warrants will be exercisable in the aggregate for one-half of the number of shares
compared to units that each contain a whole warrant to purchase one whole share, thus making us, we believe, a more attractive merger
partner for target businesses.

 Nevertheless,
this unit structure may cause our units to be worth less than if a unit included a warrant to purchase one whole share.

 A
provision of our Warrant Agreement may make it more difficult for us to consummate an initial business combination.

 Unlike
most blank check companies, if (i) we issue additional Class A ordinary shares or equity-linked securities for capital raising purposes
in connection with the closing of our initial business combination at a Newly Issued Price of less than $9.20 per ordinary share, (ii)
the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available
for the funding of our initial business combination on the date of the consummation of our initial business combination (net of redemptions),
and (iii) the Market Value is below $9.20 per share, then the exercise price of the warrants will be adjusted to be equal to 115% of
the higher of the Market Value and the Newly Issued Price, and the $18.00 per share redemption trigger prices described below under "Description
of Securities-Warrants-Public Shareholders' Warrants-Redemption of warrants when the price per Class A ordinary share equals or
exceeds $18.00" and " Redemption of warrants when the price per Class A ordinary share equals or exceeds $10.00 "
will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price, and the $10.00
per share redemption trigger price described below under " Description of Securities-Warrants-Public Shareholders' Warrants-Redemption
of warrants when the price per Class A ordinary share equals or exceeds $10.00 " will be adjusted (to the nearest cent) to be
equal to the higher of the Market Value and the Newly Issued Price. This may make it more difficult for us to consummate an initial business
combination with a target business.

 The
warrants may become exercisable and redeemable for a security other than the Class A ordinary shares, and you will not have any information
regarding such other security at this time.

 In
certain situations, including if we are not the surviving entity in our initial business combination, the warrants may become exercisable
for a security other than the Class A ordinary shares. As a result, if the surviving company redeems your warrants for securities pursuant
to the warrant agreement, you may receive a security in a company of which you do not have information at this time. Pursuant to the
warrant agreement, the surviving company will be required to use commercially reasonable efforts to register the issuance of the security
underlying the warrants within twenty business days of the closing of an initial business combination.

 Provisions
in our Charter may inhibit a takeover of us, which could limit the price investors might be willing to pay in the future for our Class
A ordinary shares and could entrench management.

 Our
Charter contains provisions that may discourage unsolicited takeover proposals that shareholders may consider to be in their best interests.
These provisions include a staggered board of directors, the ability of the board of directors to designate the terms of and issue new
series of preference shares, and the fact that prior to the completion of our initial business combination only holders of our Class
B ordinary shares, which have been issued to our Sponsor, are entitled to vote on the election of directors, which may make more difficult
the removal of management and may discourage transactions that otherwise could involve payment of a premium over prevailing market prices
for our securities.

 The
grant of registration rights to our Sponsor may make it more difficult to complete our initial business combination, and the future exercise
of such rights may adversely affect the market price of our Class A ordinary shares.

to an agreement entered into on or prior to the closing of our initial public offering, our Sponsor and its permitted transferees can
demand that we register the resale of the Class A ordinary shares into which founder shares are convertible, the private placement warrants
and the Class A ordinary shares issuable upon exercise of the private placement warrants, and warrants that may be issued upon conversion
of working capital loans and the Class A ordinary shares issuable upon conversion of such warrants. The registration rights will be exercisable
with respect to the founder shares and the private placement warrants and the Class A ordinary shares issuable upon exercise of such
private placement warrants. We will bear the cost of registering these securities. The registration and availability of such a significant
number of securities for trading in the public market may have an adverse effect on the market price of our Class A ordinary shares.
In addition, the existence of the registration rights may make our initial business combination more costly or difficult to conclude.
This is because the shareholders of the target business may increase the equity stake they seek in the combined entity or ask for more
cash consideration to offset the negative impact on the market price of our securities that is expected when the securities owned by
our Sponsor or its permitted transferees are registered for resale.

 Risks
Relating to our Sponsor and Management Team

 We
are dependent upon our executive officers and directors and their loss could adversely affect our ability to operate.

 Our
operations are dependent upon a relatively small group of individuals and, in particular, our executive officers and directors. We believe
that our success depends on the continued service of our officers and directors, at least until we have completed our initial business
combination. In addition, our executive officers and directors are not required to commit any specified amount of time to our affairs
and, accordingly, will have conflicts of interest in allocating their time among various business activities, including identifying potential
business combinations and monitoring the related due diligence. We do not have an employment agreement with, or key-man insurance on
the life of, any of our directors or executive officers.

 The
unexpected loss of the services of one or more of our directors or executive officers could have a detrimental effect on us.

 Our
ability to successfully effect our initial business combination and to be successful thereafter will be totally dependent upon the efforts
of our key personnel, some of whom may join us following our initial business combination. The loss of key personnel could negatively
impact the operations and profitability of our post-combination business.

 Our
ability to successfully effect our initial business combination is dependent upon the efforts of our key personnel. The role of our key
personnel in the target business, however, cannot presently be ascertained. Although some of our key personnel may remain with the target
business in senior management, director or advisory positions following our initial business combination, it is likely that some or all
of the management of the target business will remain in place. While we intend to closely scrutinize any individuals we engage after
our initial business combination, we cannot assure you that our assessment of these individuals will prove to be correct. These individuals
may be unfamiliar with the requirements of operating a company regulated by the SEC, which could cause us to have to expend time and
resources helping them become familiar with such requirements.

 Our
key personnel may negotiate employment or consulting agreements with a target business in connection with a particular business combination,
and a particular business combination may be conditioned on the retention or resignation of such key personnel. These agreements may
provide for them to receive compensation following our initial business combination and as a result, may cause them to have conflicts
of interest in determining whether a particular business combination is the most advantageous.

 Our
key personnel may be able to remain with our company after the completion of our initial business combination only if they are able to
negotiate employment or consulting agreements in connection with the business combination. Such negotiations would take place simultaneously
with the negotiation of the business combination and could provide for such individuals to receive compensation in the form of cash payments
and/or our securities for services they would render to us after the completion of the business combination. Such negotiations also could
make such key personnel's retention or resignation a condition to any such agreement. The personal and financial interests of such
individuals may influence their motivation in identifying and selecting a target business. In addition, pursuant to an agreement entered
into on or prior to the closing of our initial public offering, our Sponsor, upon and following consummation of an initial business combination,
will be entitled to nominate three individuals for election to our board of directors, as long as the Sponsor holds any securities covered
by the registration and shareholder rights agreement.

 The
officers and directors of an acquisition candidate may resign upon completion of our initial business combination. The loss of a business
combination target's key personnel could negatively impact the operations and profitability of our post-combination business.

 The
role of an acquisition candidate's key personnel upon the completion of our initial business combination cannot be ascertained
at this time. Although we contemplate that certain members of an acquisition candidate's management team will remain associated
with the acquisition candidate following our initial business combination, it is possible that members of the management of an acquisition
candidate will not wish to remain in place.

 Our
executive officers and directors will allocate their time to other businesses thereby causing conflicts of interest in their determination
as to how much time to devote to our affairs. This conflict of interest could have a negative impact on our ability to complete our initial
business combination.

 Our
executive officers and directors are not required to, and will not, commit their full time to our affairs, which may result in a conflict
of interest in allocating their time between our operations and our search for a business combination and their other businesses. We
do not intend to have any full-time employees prior to the completion of our initial business combination. Each of our executive officers
and directors is engaged in several other business endeavors for which he may be entitled to substantial compensation, and our executive
officers and directors are not obligated to contribute any specific number of hours per week to our affairs. Our independent directors
also serve as officers and board members for other entities. If our executive officers' and directors' other business affairs
require them to devote substantial amounts of time to such affairs in excess of their current commitment levels, it could limit their
ability to devote time to our affairs which may have a negative impact on our ability to complete our initial business combination.

 Our
officers and directors presently have, and any of them in the future may have, additional, fiduciary or contractual obligations to other
entities, including another blank check company, and, accordingly, may have conflicts of interest in determining to which entity a particular
business opportunity should be presented.

 Until
we consummate our initial business combination, we intend to engage in the business of identifying and combining with one or more businesses
or entities. Our Sponsor, officers, and directors are, and may in the future become, affiliated with entities that are engaged in a similar
business. In addition, our Sponsor, officers, and directors may participate in the formation of, or become an officer or director of,
any other blank check company prior to completion of our initial business combination. As a result, our Sponsor, officers, or directors
could have conflicts of interest in determining whether to present business combination opportunities to us or to any other blank check
company with which they may become involved. However, we do not believe that any potential conflicts would materially affect our ability
to complete our initial business combination.

 Our
Sponsor, officers, and directors also may become aware of business opportunities which may be appropriate for presentation to us and
the other entities to which they owe certain fiduciary or contractual duties. Accordingly, they may have conflicts of interest in determining
to which entity a particular business opportunity should be presented. These conflicts may not be resolved in our favor and a potential
target business may be presented to another entity prior to its presentation to us. Our Charter provide that, to the fullest extent permitted
by applicable law: (i) no individual serving as a director or an officer shall have any duty, except to the extent expressly assumed
by contract, to refrain from engaging directly or indirectly in the same of similar business activities or lines of business as us; and
(ii) we renounce any interest or expectancy in, or in being offered an opportunity to participate in, any potential transaction or matter
which may be a corporate opportunity for any director of officer, on the one hand, and us, on the other.

 Our
executive officers, directors, security holders and their respective affiliates may have competitive pecuniary interests that conflict
with our interests.

 We
have not adopted a policy that expressly prohibits our directors, executive officers, security holders or affiliates from having a direct
or indirect pecuniary or financial interest in any investment to be acquired or disposed of by us or in any transaction to which we are
a party or have an interest. In fact, we may enter into a business combination with a target business that is affiliated with our Sponsor,
our directors or executive officers, although we do not intend to do so. Nor do we have a policy that expressly prohibits any such persons
from engaging for their own account in business activities of the types conducted by us. Accordingly, such persons or entities may have
a conflict between their interests and ours.

 The
personal and financial interests of our directors and officers may influence their motivation in timely identifying and selecting a target
business and completing a business combination. Consequently, our directors' and officers' discretion in identifying and
selecting a suitable target business may result in a conflict of interest when determining whether the terms, conditions and timing of
a particular business combination are appropriate and in our shareholders' best interest. If this were the case, it would be a
breach of their fiduciary duties to us as a matter of Cayman Islands law and we or our shareholders might have a claim against such individuals
for infringing on our shareholders' rights. See the section entitled "Description of Securities-Certain Differences in Corporate
Law-Shareholders' Suits" for further information on the ability to bring such claims. However, we might not ultimately be
successful in any claim we may make against them for such reason.

 We
may engage in a business combination with one or more target businesses that have relationships with entities that may be affiliated
with our Sponsor, executive officers, or directors which may raise potential conflicts of interest.

 In
light of the involvement of our Sponsor, executive officers and directors with other entities, we may decide to acquire one or more businesses
or entities affiliated with our Sponsor, executive officers, or directors. Our directors also serve as officers and board members for
other entities, including, without limitation, those described under " Management-Conflicts of Interest." Our Sponsor,
officers and directors may sponsor, form or participate in other blank check companies similar to ours during the period in which we
are seeking an initial business combination. Such entities may compete with us for business combination opportunities. Our Sponsor, officers,
and directors are not currently aware of any specific opportunities for us to complete our initial business combination with any entities
with which they are affiliated, and there have been no substantive discussions concerning a business combination with any such entity
or entities. Although we will not be specifically focusing on, or targeting, any transaction with any affiliated entities, we would pursue
such a transaction if we determined that such affiliated entity met our criteria and guidelines for a business combination and such transaction
was approved by a majority of our independent and disinterested directors. Despite our agreement to obtain an opinion from an independent
investment banking firm or another independent entity that commonly renders valuation opinions regarding the fairness to our company
from a financial point of view of a business combination with one or more domestic or international businesses affiliated with our Sponsor,
executive officers, or directors potential conflicts of interest still may exist and, as a result, the terms of the business combination
may not be as advantageous to our public shareholders as they would be absent any conflicts of interest.

 Our
management may not be able to maintain control of a target business after our initial business combination. Upon the loss of control
of a target business, new management may not possess the skills, qualifications or abilities necessary to profitably operate such business.

 We
may structure our initial business combination so that the post-business combination company in which our public shareholders own shares
will own less than 100% of the equity interests or assets of a target business, but we will only complete such business combination if
the post-business combination company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires
a controlling interest in the target business sufficient for us not to be required to register as an investment company under the Investment
Company Act. We will not consider any transaction that does not meet such criteria. Even if the post-business combination company owns
50% or more of the voting securities of the target, our shareholders prior to our initial business combination may collectively own a
minority interest in the post-business combination company, depending on valuations ascribed to the target and us in the business combination.
For example, we could pursue a transaction in which we issue a substantial number of new Class A ordinary shares in exchange for all
of the outstanding capital stock, shares or other equity interests of a target. In this case, we would acquire a 100% interest in the
target. However, as a result of the issuance of a substantial number of new Class A ordinary shares, our shareholders immediately prior
to such transaction could own less than a majority of our outstanding Class A ordinary shares subsequent to such transaction. In addition,
other minority shareholders may subsequently combine their holdings resulting in a single person or group obtaining a larger share of
the company's shares than we initially acquired. Accordingly, this may make it more likely that our management will not be able
to maintain control of the target business.

 Since
our Sponsor, executive officers and directors will lose their entire investment in us if our initial business combination is not completed
(other than with respect to public shares they may have acquired during or may acquire after our initial public offering), a conflict
of interest may arise in determining whether a particular business combination target is appropriate for our initial business combination.

 On
November 19, 2020, our Original Sponsor paid $25,000 to cover certain expenses on our behalf in consideration of 5,750,000 Class B ordinary
shares, par value $0.0001. In January 2021, we effected a 1 for 1.2 forward stock split of the founder shares that increased the number
of outstanding founder shares from 5,750,000 to 7,618,750 shares and our Original Sponsor transferred an aggregate of 75,000 founder
shares to our independent director nominees and an aggregate of 50,000 founder shares to our Former Advisors. Prior to the initial investment
in the company of $25,000 by the Original Sponsor, the company had no assets, tangible or intangible. The per share price of the founder
shares was determined by dividing the amount contributed to the company by the number of founder shares issued. The founder shares will
be worthless if we do not complete an initial business combination. In addition, our sponsor has committed, pursuant to a written agreement,
to purchase an aggregate of 8,750,000, each exercisable to purchase one Class A ordinary share at $11.50 per share, subject to adjustment,
at a price of $1.00 per warrant ($8,750,000 in the aggregate), in a private placement that closed simultaneously with the closing of
our initial public offering. If we do not consummate an initial business within 24 months (or 30 months, subject to six one-month extensions)
from the closing of our initial public offering, the private placement warrants will expire worthless. The personal and financial interests
of our executive officers and directors may influence their motivation in identifying and selecting a target business combination, completing
an initial business combination and influencing the operation of the business following the initial business combination. This risk may
become more acute as the 42-month anniversary of the closing of our initial public offering nears, which is the deadline for our consummation
of an initial business combination.

 Certain
of our officers and directors have or will have direct and indirect economic interests in us and/or our Sponsor after the consummation
of our initial public offering and such interests may potentially conflict with those of our public shareholders as we evaluate and decide
whether to recommend a potential business combination to our public shareholders.

 Certain
of our officers and directors may own membership interests in our Sponsor and indirect interests in our Class B ordinary shares and private
placement warrants which may result in interests that differ from the economic interests of the investors in our initial public offering,
which includes making a determination of whether a particular target business is an appropriate business with which to effectuate our
initial business combination. There may be a potential conflict of interest between our officers and directors that hold membership interests
in our Sponsor and our public shareholders that may not be resolved in favor of our public shareholders.

 We
may not have sufficient funds to satisfy indemnification claims of our directors and executive officers.

 We
have agreed to indemnify our officers and directors to the fullest extent permitted by law. However, our officers and directors have
agreed to waive any right, title, interest or claim of any kind in or to any monies in the Trust Account and to not seek recourse against
the Trust Account for any reason whatsoever (except to the extent they are entitled to funds from the Trust Account due to their ownership
of public shares). Accordingly, any indemnification provided will be able to be satisfied by us only if (i) we have sufficient funds
outside of the Trust Account or (ii) we consummate an initial business combination. Our obligation to indemnify our officers and directors
may discourage shareholders from bringing a lawsuit against our officers or directors for breach of their fiduciary duty. These provisions
also may have the effect of reducing the likelihood of derivative litigation against our officers and directors, even though such an
action, if successful, might otherwise benefit us and our shareholders. Furthermore, a shareholder's investment may be adversely
affected to the extent we pay the costs of settlement and damage awards against our officers and directors pursuant to these indemnification
provisions.

 General
Risk Factors

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

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

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

 We
are subject to laws and regulations enacted by national, regional and local governments. In particular, we are required to comply with
certain SEC and other legal requirements. 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.

 Our
warrants are accounted for as liabilities and the changes in value of our warrants could have a material effect on our financial results
and thus may have an adverse effect on the market price of our securities.

 On
April 12, 2021, the staff of the SEC (the "SEC Staff") issued a public statement entitled "Staff Statement on
Accounting and Reporting Considerations for Warrants issued by Special Purpose Acquisition Companies ("SPACs") (the
"SEC Staff Statement"). In the SEC Staff Statement, the SEC Staff expressed its view that certain terms and conditions
common to SPAC warrants may require the warrants to be classified as liabilities on the SPAC's consolidated balance sheet as
opposed to equity. As a result of the SEC Staff Statement, we reevaluated the accounting treatment of our 15,237,500 Public Warrants
and 8,750,000 Private Placement Warrants, and determined to classify the warrants as derivative liabilities measured at fair value,
with changes in fair value each period reported in earnings.

 As
a result, included on the Company consolidated balance sheet as of December 31, 2023 contained elsewhere in this Annual Report are derivative liabilities
related to embedded features contained within our warrants. ASC 815, Derivatives and Hedging, provides for the remeasurement of the fair
value of such derivatives at each balance sheet date, with a resulting noncash gain or loss related to the change in the fair value being
recognized in earnings in the statement of operations. As a result of the recurring fair value measurement, our financial statements
and results of operations may fluctuate quarterly, based on factors, which are outside of our control. Due to the recurring fair value
measurement, we expect that we will recognize non-cash gains or losses on our warrants each reporting period and that the amount of such
gains or losses could be material. The impact of changes in fair value on earnings may have an adverse effect on the market price of
our securities.

 We
are an emerging growth company and a smaller reporting company within the meaning of the Securities Act, and if we take advantage of
certain exemptions from disclosure requirements available to "emerging growth companies" or "smaller reporting companies,"
this could make our securities less attractive to investors and may make it more difficult to compare our performance with other public
companies.

 We
are an "emerging growth company" within the meaning of the Securities Act, as modified by the JOBS Act, and we 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 auditor attestation requirements of Section
404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements,
and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any
golden parachute payments not previously approved. As a result, our shareholders may not have access to certain information they may
deem important. We could be an emerging growth company for up to five years, although circumstances could cause us to lose that status
earlier, including if the market value of our Class A ordinary shares held by non-affiliates exceeds $700 million as of any June 30 before
that time, in which case we would no longer be an emerging growth company as of the following December 31. We cannot predict whether
investors will find our securities less attractive because we will rely on these exemptions. If some investors find our securities less
attractive as a result of our reliance on these exemptions, the trading prices of our securities may be lower than they otherwise would
be, there may be a less active trading market for our securities and the trading prices of our securities may be more volatile.

 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 an election to opt out is irrevocable. We have 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, we, 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 our 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.

we are a "smaller reporting company" as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take
advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements.
We will remain a smaller reporting company until the last day of the fiscal year in which (1) the market value of our ordinary shares
held by non-affiliates exceeds $250 million as of the prior June 30, or (2) our annual revenues exceeded $100 million during such completed
fiscal year and the market value of our ordinary shares held by non-affiliates exceeds $700 million as of the prior June 30. To the extent
we take advantage of such reduced disclosure obligations, it may also make comparison of our financial statements with other public companies
difficult or impossible.

 Our
warrant agreement designates the courts of the State of New York or the United States District Court for the Southern District of New
York as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by holders of our warrants, which
could limit the ability of warrant holders to obtain a favorable judicial forum for disputes with our company.

 Our
warrant agreement provides that, subject to applicable law, (i) any action, proceeding or claim against us arising out of or relating
in any way to the warrant agreement, including under the Securities Act, will be brought and enforced in the courts of the State of New
York or the United States District Court for the Southern District of New York, and (ii) that we irrevocably submit to such jurisdiction,
which jurisdiction shall be the exclusive forum for any such action, proceeding or claim. We will waive any objection to such exclusive
jurisdiction and that such courts represent an inconvenient forum.

 Notwithstanding
the foregoing, these provisions of the warrant agreement will not apply to suits brought to enforce any liability or duty created by
the Exchange Act or any other claim for which the federal district courts of the United States of America are the sole and exclusive
forum. Any person or entity purchasing or otherwise acquiring any interest in any of our warrants shall be deemed to have notice of and
to have consented to the forum provisions in our warrant agreement. If any action, the subject matter of which is within the scope of
the forum provisions of the warrant agreement, is filed in a court other than a court of the State of New York or the United States District
Court for the Southern District of New York ("foreign action") in the name of any holder of our warrants, such holder shall
be deemed to have consented to: (x) the personal jurisdiction of the state and federal courts located in the State of New York in connection
with any action brought in any such court to enforce the forum provisions (an "enforcement action"), and (y) having service
of process made upon such warrant holder in any such enforcement action by service upon such warrant holder's counsel in the foreign
action as agent for such warrant holder.

 This
choice-of-forum provision may limit a warrant holder's ability to bring a claim in a judicial forum that it finds favorable for
disputes with our company, which may discourage such lawsuits. Alternatively, if a court were to find this provision of our warrant agreement
inapplicable or unenforceable with respect to one or more of the specified types of actions or proceedings, we may incur additional costs
associated with resolving such matters in other jurisdictions, which could materially and adversely affect our business, financial condition
and results of operations and result in a diversion of the time and resources of our management and board of directors.

we are incorporated under the laws of the Cayman Islands, you may face difficulties in protecting your interests, and your ability to
protect your rights through the U.S. federal courts may be limited.

 We
are an exempted company incorporated under the laws of the Cayman Islands. As a result, it may be difficult for investors to effect service
of process within the United States upon our directors or executive officers, or enforce judgments obtained in the United States courts
against our directors or officers.

 Our
corporate affairs are governed by our Charter, the Companies Act (as the same may be supplemented or amended from time to time) and the
common law of the Cayman Islands. We are also subject to the federal securities laws of the United States. The rights of shareholders
to take action against the directors, actions by minority shareholders and the fiduciary responsibilities of our directors to us under
Cayman Islands law are to a large extent governed by the common law of the Cayman Islands. The common law of the Cayman Islands is derived
in part from comparatively limited judicial precedent in the Cayman Islands as well as from English common law, the decisions of whose
courts are of persuasive authority, but are not binding on a court in the Cayman Islands. The rights of our shareholders and the fiduciary
responsibilities of our directors under Cayman Islands law are different from what they would be under statutes or judicial precedent
in some jurisdictions in the United States. In particular, the Cayman Islands has a different body of securities laws as compared to
the United States, and certain states, such as Delaware, may have more fully developed and judicially interpreted bodies of corporate
law. In addition, Cayman Islands companies may not have standing to initiate a shareholders derivative action in a Federal court of the
United States.

 We
have been advised by Cayman Islands legal counsel, that the courts of the Cayman Islands are unlikely (i) to recognize or enforce against
us judgments of courts of the United States predicated upon the civil liability provisions of the federal securities laws of the United
States or any state; and (ii) in original actions brought in the Cayman Islands, to impose liabilities against us predicated upon the
civil liability provisions of the federal securities laws of the United States or any state, so far as the liabilities imposed by those
provisions are penal in nature. In those circumstances, although there is no statutory enforcement in the Cayman Islands of judgments
obtained in the United States, the courts of the Cayman Islands will recognize and enforce a foreign money judgment of a foreign court
of competent jurisdiction without retrial on the merits based on the principle that a judgment of a competent foreign court imposes upon
the judgment debtor an obligation to pay the sum for which judgment has been given provided certain conditions are met. For a foreign
judgment to be enforced in the Cayman Islands, such judgment must be final and conclusive and for a liquidated sum, and must not be in
respect of taxes or a fine or penalty, inconsistent with a Cayman Islands judgment in respect of the same matter, impeachable on the
grounds of fraud or obtained in a manner, or be of a kind the enforcement of which is, contrary to natural justice or the public policy
of the Cayman Islands (awards of punitive or multiple damages may well be held to be contrary to public policy). A Cayman Islands Court
may stay enforcement proceedings if concurrent proceedings are being brought elsewhere.

 As
a result of all of the above, public shareholders may have more difficulty in protecting their interests in the face of actions taken
by management, members of the board of directors or controlling shareholders than they would as public shareholders of a United States
company.

 An
investment in us may result in uncertain or adverse U.S. federal income tax consequences.

 An
investment in us may result in uncertain U.S. federal income tax consequences. For instance, because there are no authorities that directly
address instruments similar to the units we issued in our initial public offering, the allocation an investor makes with respect to the
purchase price of a unit between the Class A ordinary shares and the one-half of a warrant to purchase one Class A ordinary share included
in each unit could be challenged by the IRS or courts. Furthermore, the U.S. federal income tax consequences of a cashless exercise of
warrants included in the units we issued in our initial public offering is unclear under current law. Finally, it is unclear whether
the redemption rights with respect to our ordinary shares suspend the running of a U.S. Holder's) holding period for purposes of
determining whether any gain or loss realized by such holder on the sale or exchange of Class A ordinary shares is long-term capital
gain or loss and for determining whether any dividend we pay would be considered "qualified dividends" for U.S. federal income
tax purposes. Prospective investors are urged to consult their tax advisors with respect to these and other tax consequences when purchasing,
holding or disposing of our securities.

 Since
only holders of our founder shares will have the right to vote on the election of directors, upon the listing of our shares on Nasdaq,
Nasdaq may consider us to be a "controlled company" within the meaning of the Nasdaq rules and, as a result, we may qualify
for exemptions from certain corporate governance requirements.

 After
completion of our initial public offering, only holders of our founder shares will have the right to vote on the election of directors.
As a result, Nasdaq may consider us to be a "controlled company" within the meaning of the Nasdaq corporate governance standards.
Under the Nasdaq corporate governance standards, a company of which more than 50% of the voting power is held by an individual, group
or another company is a "controlled company" and may elect not to comply with certain corporate governance requirements,
including the requirements that:

 we
 have a board that includes a majority of "independent directors," as defined under the rules of Nasdaq;

 we
 have a compensation committee of our board that is comprised entirely of independent directors with a written charter addressing
 the committee's purpose and responsibilities; and

 we
 have a nominating and corporate governance committee of our board that is comprised entirely of independent directors with a written
 charter addressing the committee's purpose and responsibilities.

 We
do not intend to utilize these exemptions and intend to comply with the corporate governance requirements of Nasdaq, subject to applicable
phase-in rules. However, if we determine in the future to utilize some or all of these exemptions, you will not have the same protections
afforded to shareholders of companies that are subject to all of the Nasdaq corporate governance requirements.

 We
may be a passive foreign investment company, or "PFIC," which could result in adverse U.S. federal income tax consequences
to U.S. investors.

 If
we are a PFIC for any taxable year (or portion thereof) that is included in the holding period of a U.S. Holder of our Class A ordinary
shares or warrants, the U.S. Holder may be subject to adverse U.S. federal income tax consequences and may be subject to additional reporting
requirements. Our PFIC status for our current and subsequent taxable years may depend on whether we qualify for the PFIC start-up exception
and the timing of our initial business combination. Depending on the particular circumstances the application of the start-up exception
may be subject to uncertainty, and there cannot be any assurance that we will qualify for the start-up exception. Accordingly, there
can be no assurances with respect to our status as a PFIC for our current taxable year or any subsequent taxable year. Our actual PFIC
status for any taxable year, however, will not be determinable until after the end of such taxable year. Moreover, if we determine we
are a PFIC for any taxable year, upon written request, we will endeavor to provide to a U.S. Holder such information as the Internal
Revenue Service ("IRS") may require, including a PFIC Annual Information Statement, in order to enable the U.S. Holder to
make and maintain a "qualified electing fund" election, but there can be no assurance that we will timely provide such required
information, and such election would be unavailable with respect to our warrants in all cases. We urge U.S. investors to consult their
tax advisors regarding the possible application of the PFIC rules with respect to their particular circumstances.

 We
may reincorporate in another jurisdiction in connection with our initial business combination and such reincorporation may result in
taxes imposed on shareholders or warrant holders.

 We
may, in connection with our initial business combination and subject to requisite shareholder approval under the Companies Act, reincorporate
in the jurisdiction in which the target company or business is located or in another jurisdiction. This may require a shareholder or
warrant holder to recognize taxable income in the jurisdiction in which the shareholder or warrant holder is a tax resident (or in which
its members are resident if it is a tax transparent entity). We do not intend to make any cash distributions to shareholders or warrant
holders to pay such taxes. Shareholders or warrant holders may be subject to withholding taxes or other taxes with respect to their ownership
of us after the reincorporation.

 Risks
Associated with Acquiring and Operating a Business in Foreign Countries

 If
we pursue a target company with operations or opportunities outside of the United States for our initial business combination, we may
face additional burdens in connection with investigating, agreeing to and completing such initial business combination, and if we effect
such initial business combination, we would be subject to a variety of additional risks that may negatively impact our operations.

 If
we pursue a target a company with operations or opportunities outside of the United States for our initial business combination, we would
be subject to risks associated with cross-border business combinations, including in connection with investigating, agreeing to and completing
our initial business combination, conducting due diligence in a foreign jurisdiction, having such transaction approved by any local governments,
regulators or agencies and changes in the purchase price based on fluctuations in foreign exchange rates.

 If
we effect our initial business combination with such a company, we would be subject to any special considerations or risks associated
with companies operating in an international setting, including any of the following:

 costs
 and difficulties inherent in managing cross-border business operations;

 rules
 and regulations regarding currency redemption;

 complex
 corporate withholding taxes on individuals;

 laws
 governing the manner in which future business combinations may be effected;

 exchange
 listing and/or delisting requirements;

 tariffs
 and trade barriers;

 regulations
 related to customs and import/export matters;

 local
 or regional economic policies and market conditions;

 unexpected
 changes in regulatory requirements;

 longer
 payment cycles;

 tax
 issues, such as tax law changes and variations in tax laws as compared to the United States;

 currency
 fluctuations and exchange controls;

 rates
 of inflation;

 challenges
 in collecting accounts receivable;

 cultural
 and language differences;

 employment
 regulations;

 underdeveloped
 or unpredictable legal or regulatory systems;

 corruption;

 protection
 of intellectual property;

 social
 unrest, crime, strikes, riots and civil disturbances;

 regime
 changes and political upheaval;

 terrorist
 attacks, natural disasters and wars; and

 deterioration
 of political relations with the United States.

 We
may not be able to adequately address these additional risks. If we were unable to do so, we may be unable to complete such initial business
combination, or, if we complete such combination, our operations might suffer, either of which may adversely impact our business, financial
condition and results of operations.

 If
our management following our initial business combination is unfamiliar with United States securities laws, they may have to expend time
and resources becoming familiar with such laws, which could lead to various regulatory issues.

 Following
our initial business combination, our management may resign from their positions as officers or directors of the company and the management
of the target business at the time of the business combination will remain in place. Management of the target business may not be familiar
with United States securities laws. If new management is unfamiliar with United States securities laws, they may have to expend time
and resources becoming familiar with such laws. This could be expensive and time-consuming and could lead to various regulatory issues
which may adversely affect our operations.

 We
may reincorporate in another jurisdiction in connection with our initial business combination, and the laws of such jurisdiction may
govern some or all of our future material agreements and we may not be able to enforce our legal rights.

 In
connection with our initial business combination, we may relocate the home jurisdiction of our business from the Cayman Islands to another
jurisdiction. If we determine to do this, the laws of such jurisdiction may govern some or all of our future material agreements. The
system of laws and the enforcement of existing laws in such jurisdiction may not be as certain in implementation and interpretation as
in the United States. The inability to enforce or obtain a remedy under any of our future agreements could result in a significant loss
of business, business opportunities or capital.

 We
are subject to changing law and regulations regarding regulatory matters, corporate governance and public disclosure that have increased
both our costs and the risk of non-compliance.

 We
are subject to rules and regulations by various governing bodies, including, for example, the SEC, which are charged with the protection
of investors and the oversight of companies whose securities are publicly traded, and to new and evolving regulatory measures under applicable
law. Our efforts to comply with new and changing laws and regulations have resulted in and are likely to continue to result in, increased
general and administrative expenses and a diversion of management time and attention from seeking a business combination target.

 Moreover,
because these laws, regulations and standards are subject to varying interpretations, their application in practice may evolve over time
as new guidance becomes available. This evolution may result in continuing uncertainty regarding compliance matters and additional costs
necessitated by ongoing revisions to our disclosure and governance practices. If we fail to address and comply with these regulations
and any subsequent changes, we may be subject to penalty and our business may be harmed.

 Item
 1B.

 Unresolved
 Staff Comments

 None.

 Item
 1C.

 Cybersecurity

 As
a blank check company, we have no operations and therefore do not have any operations of our own that face cybersecurity threats.
However, we do depend on the digital technologies of third parties, and as noted in Item 1A. Risk Factors of this Report, any
sophisticated and deliberate attacks on, or security breaches in, systems or infrastructure or the cloud that we utilize, including
those of third parties, could lead to corruption or misappropriation of our assets, proprietary information and sensitive or
confidential data and could have a material adverse effect on our business, financial condition or reputation. Because of our reliance on the technologies of third parties, we also depend upon the personnel and the
processes of third parties to protect against cybersecurity threats, and we have no personnel or processes of our own for this
purpose.

 Our
board of directors and our audit committee oversee risk for our company and are generally responsible for the oversight of risks from cybersecurity threats. Our management will promptly report to the board of directors and our
audit committee on incidents of material cybersecurity risks facing us and any third parties and the measures that may be taken to mitigate
such risks. In the event of a cybersecurity incident, we intend to follow an incident
response plan, which outlines the steps to be followed from incident identification, mitigation, recovery and notification to legal counsel,
senior leadership and the board of directors and our audit committee.

 Prior to filings with the SEC, our board of directors
reviews our risk factors, including the descriptions of the risks we face from cybersecurity threats, as described in Item 1A.
Risk Factors of this Report. We have not encountered any cybersecurity incidents since our IPO.

 Item
 2.

 Properties

 We
currently maintain our executive offices at 515 Madison Avenue, 8th Floor - Suite 8078, New York, New York 10022. The cost for our use
of this space is included in the $10,000 per month fee we will pay to our Sponsor or an affiliate of our Sponsor for office space, administrative
and support services. We consider our current office space adequate for our Sponsor operations.

 Item
 3.

 Legal
 Proceedings

 On
September 19, 2023, the Company was served with a lawsuit by KPMG AG Wirtschaftspr fungsgesellschaft ("KPMG Germany").
KPMG Germany asserted claims against the Company for unpaid fees incurred by the Company for KPMG Germany's transaction advice
in 2021 in the amount of $758,282.35 (the "Claim"). The Claim is being brought in Germany in the District Court of Frankfurt
am Main Chamber for Commercial Affairs, Regional Court of Urbach. On September 21, 2023, the Regional Court of Urbach set the amount
in dispute at $736,690.70.

 Item
 4.

 Mine
 Safety Disclosures

 Not
applicable.

 PART
II

 Item
 5.

 Market
 for Registrant's Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities

 (a)

 Market
 Information

 Our
Units, Class A ordinary shares and warrants are each traded on the Nasdaq. Our units commenced public trading on February 2, 2021 under
the symbol "KRNLU" Our Class A ordinary shares and warrants began separate trading on March 26, 2021, under the symbols "KRNL"
and "KRNLW," respectively.

 (b)

 Holders

 As
of March 8, 2024, there was one holder of record of our Units, one holder of record of our Class A ordinary shares,
9 holders of record of our Class B ordinary shares, and one holder of record of our Public Warrants.

 (c)

 Dividends

 We
have not paid any cash dividends on our ordinary shares to date and do not intend to pay cash dividends prior to the completion of a
business combination. The payment of cash dividends in the future will be dependent upon our revenues and earnings, if any, capital requirements
and general financial condition subsequent to completion of a business combination. The payment of any cash dividends subsequent to a
business combination will be within the discretion of our board of directors at such time. In addition, our board of directors is not
currently contemplating and does not anticipate declaring any share dividends in the foreseeable future. Further, if we incur any indebtedness,
our ability to declare dividends may be limited by restrictive covenants we may agree to in connection therewith.

 (d)

 Securities
 Authorized for Issuance Under Equity Compensation Plans

 None.

 (e)

 Performance
 Graph

 Not
applicable.

 Recent
 Sales of Unregistered Securities; Use of Proceeds from Registered Offerings.

 On
November 19, 2020, our Original Sponsor paid $25,000 to cover certain expenses on our behalf in consideration of 5,750,000 Class B ordinary
shares, par value $0.0001.

 In
January 2021, we effected a 1 for 1.2 forward stock split of the founder shares that increased the number of outstanding founder shares
from 5,750,000 to 7,618,750 shares and our Original Sponsor transferred an aggregate of 75,000 founder shares to our independent directors
and an aggregate of 50,000 founder shares to our Former Advisors.

 On
February 2, 2021, we completed our initial public offering of 30,475,000 units, including 3,975,000 units as a result of the underwriters'
exercise of their over-allotment option in full, at a price of $10.00 per unit, generating aggregate gross proceeds to the Company of
$304,750,000.

 Concurrently
with the closing of the initial public offering, our Original Sponsor purchased 8,750,000 private placement warrants, each exercisable
to purchase one ordinary share at $11.50 per share generating gross proceeds of $8.75 million, in a private placement that closed simultaneously
with the closing of our initial public offering. A portion of the proceeds from the sale of the private placement warrants was added
to the proceeds from the initial public offering held in the Trust Account. If the company does not complete an initial business combination
within 36 months (or 42 months, subject to six one-month extensions) from the closing of our initial public offering, the private placement
warrants will expire worthless. The private placement warrants are substantially similar to the warrants underlying the units issued
in the initial public offering, except that they are non-redeemable and exercisable on a cashless basis so long as they are held by the
Sponsor or its permitted transferees. The Sponsor and the company's officers and directors agreed, subject to limited exceptions,
not to transfer, assign or sell any of their private placement warrants until 30 days after the completion of the initial business combination.
The sale of the private placement warrants was made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities
Act. No underwriting discounts or commissions were paid with respect to such sales.

 On
December 28, 2022 (the "Effective Date"), we entered into a purchase agreement with the Original Sponsor and the Sponsor,
pursuant to which the Sponsor, or an entity designated by the Sponsor, will purchase from the Original Sponsor 7,618,500 Class B Ordinary
Shares, par value $0.0001 per share and 8,750,000 Private Placement Warrants, each of which is exercisable to purchase one Class A ordinary
share, par value $0.0001 per share, for an aggregate purchase price of $1.00 payable at the time we effect our initial business combination.
Upon the closing of the initial business combination, Sponsor shall also convey 2,000,000 Class B Ordinary Shares to the equity holders
of the Original Sponsor, as of the Effective Date, pro rata based on the equity holders' underlying interest in Kernel's
Class B Ordinary Shares as of the Effective Date.

 Use
of Proceeds

 In
connection with the initial public offering and the exercise of the underwriters' over-allotment option, we incurred offering costs
of approximately $17.4 million, of which approximately $10.7 million was for deferred underwriting commissions. Other incurred offering
costs consisted principally preparation fees related to the initial public offering. After deducting the underwriting discounts and commissions
(excluding the deferred portion, which amount will be payable upon consummation of the initial business combination, if consummated)
and the initial public offering expenses, approximately $304.8 million of the net proceeds from our initial public offering and certain
of the proceeds from the private placement of the private placement warrants (or $10.00 per Unit sold in the initial public offering)
was placed in the Trust Account. The net proceeds of the initial public offering and certain proceeds from the sale of the private placement
warrants are held in the Trust Account and invested as described elsewhere in this Report.

 There
has been no material change in the planned use of the proceeds from the initial public offering and the sale of the private placement
warrants as is described in our final prospectus related to our initial public offering.

 Purchases
 of Equity Securities by the Issuer and Affiliated Purchasers

 None.

 Item
 6.

 Reserved

 Item
 7.

 Management's
 Discussion and Analysis of Financial Condition and Results of Operations

 References
to the "Company," "Kernel Group Holdings, Inc..," "Kernel," "our," "us" or
"we" refer to Kernel Group Holdings, Inc. The following discussion and analysis of the Company's financial condition
and results of operations should be read in conjunction with the unaudited interim condensed financial statements and the notes thereto
contained elsewhere in this report. Certain information contained in the discussion and analysis set forth below includes forward-looking
statements that involve risks and uncertainties.

 Cautionary
Note Regarding Forward-Looking Statements

 This
Annual Report on Form 10-K includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Exchange Act. We have based these forward-looking statements on our current expectations and projections about
future events. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about us that may
cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels
of activity, performance or achievements expressed or implied by such forward-looking statements. In some cases, you can identify forward-looking
statements by terminology such as "may," "should," "could," "would," "expect,"
"plan," "anticipate," "believe," "estimate," "continue," or the negative
of such terms or other similar expressions. Factors that might cause or contribute to such a discrepancy include, but are not limited
to, those described in our other U.S. Securities and Exchange Commission ("SEC") filings.

 Overview

 We
are a blank check company incorporated as a Cayman Islands exempted company on November 10, 2020. We were formed for the purpose of effecting
a merger, share exchange, asset acquisition, share purchase, reorganization or similar Business Combination with one or more businesses.
We are an emerging growth company and, as such, we are subject to all of the risks associated with emerging growth companies.

 Our
sponsor was Kernel Capital Holdings, LLC, a Delaware limited liability company (the "Original Sponsor"). The registration
statement for our Initial Public Offering was declared effective on February 2, 2021. On February 5, 2021, we consummated our Initial
Public Offering of 30,475,000 units (the "Units" and, with respect to the Class A ordinary shares included in the Units being
offered, the "Public Shares"), including 3,975,000 additional Units to cover the underwriters' over-allotment (the
"Over-Allotment Units"), at $10.00 per Unit, generating gross proceeds of approximately $304.8 million, and incurring offering
costs of approximately $17.4 million, of which approximately $10.7 million was for deferred underwriting commissions.

with the closing of the Initial Public Offering, we consummated the private placement ("Private Placement") of 8,750,000
warrants (each, a "Private Placement Warrant" and collectively, the "Private Placement Warrants"), at a price
of $1.00 per Private Placement Warrant with the Original Sponsor, generating gross proceeds of approximately $8.8 million.

 On
December 28, 2022, we entered into a purchase agreement with the Original Sponsor, and VKSS Capital, LLC, a Delaware corporation (the
"New Sponsor" or "Sponsor"), pursuant to which the New Sponsor, or an entity designated by the New Sponsor, will
purchase from the Original Sponsor 7,618,500 Class B ordinary shares, par value $0.0001 per share and 8,750,000 Private Placement Warrants,
each of which is exercisable to purchase one Class A ordinary share, par value $0.0001 per share, for an aggregate purchase price of
$1.00 payable at the time we effect the initial Business Combination. Upon the closing of the initial Business Combination, New Sponsor
shall also convey 2,000,000 Class B ordinary shares to the equityholders of the Original Sponsor, as of December 28, 2022, pro rata based
on the equityholders' underlying interest in our Class B ordinary shares as of the December 28, 2022.

 Upon
the closing of the Initial Public Offering and the Private Placement, approximately $304.8 million ($10.00 per Unit) of the net proceeds
of the Initial Public Offering and certain of the proceeds of the Private Placement were placed in a trust account ("Trust Account")
with Continental Stock Transfer & Trust Company ("Continental") acting as trustee and invested only in United States
"government securities" within the meaning of Section 2(a)(16) of the Investment Company Act of 1940, as amended, having
a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company
Act which invest only in direct U.S. government treasury obligations, as determined by us, until the earlier of (i) the completion of
a Business Combination and (ii) the distribution of the Trust Account as described below.

 Our
management has broad discretion with respect to the specific application of the net proceeds of its Initial Public Offering and the sale
of Private Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating
a Business Combination. Our initial Business Combination must be with one or more operating businesses or assets with a fair market value
equal to at least 80% of the net assets held in the Trust Account (excluding the deferred underwriting commissions and taxes payable
on the interest earned on the Trust Account) at the time we sign a definitive agreement in connection with the initial Business Combination.
However, we 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 business or otherwise acquires a controlling interest in the target business sufficient for it not to
be required to register as an investment company under the Investment Company.

 If
we are unable to complete a Business Combination by August 5, 2024, we will (i) cease all operations except for the purpose of winding
up; (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the Public Shares, at a per-share
price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held
in the Trust Account and not previously released to us to pay our taxes that were paid by us or are payable by us, if any (less up to
$100,000 of interest to pay dissolution expenses), divided by the number of the then-outstanding Public Shares, which redemption will
completely extinguish Public Shareholders' rights as shareholders (including the right to receive further liquidation distributions,
if any); and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the remaining shareholders
and the board of directors, liquidate and dissolve, subject in the case of clauses (ii) and (iii) to the our obligations under Cayman
Islands law to provide for claims of creditors and the requirements of other applicable law.

 Charter
Amendment and Share Redemptions

 In
an extraordinary general meeting held on February 3, 2023, shareholders approved the charter amendment (the "Charter Amendment"),
changing the structure and cost of the Company's right to extend the date by which the Company must (i) consummate a merger, capital
stock exchange, asset acquisition, stock purchase, reorganization or similar Business Combination involving the Company and one or more
businesses (a "Business Combination"), (ii) cease its operations if it fails to complete such Business Combination, and (iii)
redeem or repurchase 100% of the Company's Public Shares (the "Termination Date"), which was previously February 5,
2023. The Charter Amendment allowed the Company to extend the Termination
Date by up to six (6) one-month extensions to August 5, 2023 (each, an "Extension," and such later date, the "Extended
Deadline") provided that if any Extended Deadline ends on a day that is not a business day, such Extended Deadline will be automatically
extended to the next succeeding business day. To effect each Extension, the Company, its Sponsor or any of their affiliates or designees
must deposit into the Company's Trust Account with Continental by the applicable Extended Deadline (the "Extension Payment")
the lesser of (x) $300,000 or (y) $0.06 per share for each of the Company's publicly held shares outstanding as of the deadline
prior to the extension (after giving effect to redemptions in connection with the approval of the Charter Amendment by the Company's
shareholders with respect to the first such extension). In connection with the approval of the Charter Amendment Proposal, the shareholders
also approved a proposal to amend the Company's trust agreement with Continental (the "Trust Agreement"), pursuant
to which the Company's Trust Agreement with Continental was amended to conform the procedures in the Trust Agreement by which the
Company may extend the date on which Continental must liquidate the Trust Account if the Company has not completed its initial Business
Combination to the procedures in the Charter Amendment (the "Trust Amendment Proposal"). In connection with the
approval of the Charter Amendment and the Trust Amendment Proposal at the shareholders meeting, holders of 22,848,122 of the Company's
Public Shares exercised their right to redeem those shares for cash at an approximate price of $10.15 per share, for an aggregate of
approximately $231.9 million. Following the payment of the redemptions, the Trust Account had a balance of approximately $74.7 million
before the first Extension Payment.

 The
shareholders of the Company approved the Amendment to the Charter of the Company (the "Second Charter Amendment") at the
August 3, 2023 shareholders meeting, changing the structure and cost of the Company's right to extend the Termination Date by
up to six (6) one-month Extensions to February 5, 2024, provided that if any Extended Deadline ends on a day that is not a business
day, such Extended Deadline will be automatically extended to the next succeeding business day (the "Second Charter Amendment Proposal"). To effect each Extension, the
Company, its sponsor or any of their affiliates or designees must deposit into the Company's Trust Account with Continental an
Extension Payment (after giving effect to redemptions in connection with the approval of the Second Charter Amendment) the
lesser of (x) $150,000 or (y) $0.04 per share for each of the Company's Public Shares outstanding as of the applicable
Extended Deadline, unless the closing of the Company's initial Business Combination shall have occurred, in exchange for a
non-interest bearing, unsecured promissory note payable upon consummation of a Business Combination. In connection with the approval
of the Second Charter Amendment Proposal, the shareholders also approved a proposal to amend the Trust Agreement, pursuant to
which the Company's Trust Agreement with Continental was amended to conform the procedures in the Trust Agreement by which the
Company may extend the date on which Continental must liquidate the Trust Account if the Company has not completed its initial
Business Combination to the procedures in the Second Charter Amendment (the "Second Trust Amendment
Proposal").

 In
connection with the approval of the Second Charter Amendment Proposal and the Second Trust Amendment Proposal at the August 3, 2023
Shareholders Meeting, holders of 1,310,929 of the Company's Class A ordinary shares exercised their rights to redeem those
shares for cash at an approximate price of $10.42 per share, for an aggregate of approximately $13.6 million. Following the payment
of the redemptions, for the year ended December 31, 2023, the Trust Account had a balance of $67,819,662 inclusive of Extension
Payments. (see Note 11 for further discussions).

 On
each of February 9, 2023, March 7, 2023, April 4, 2023, May 9, 2023, June 6, 2023, and July 5, 2023 the Company deposited $300,000, and
on each of August 3, 2023, September 5, 2023, October 5, 2023, November 6, 2023, and December 5, 2023 the Company deposited $150,000
into the Trust Account to extend the date to consummate a Business Combination through March 5, 2023, April 5, 2023, May 5, 2023, June
5, 2023, July 5, 2023, August 5, 2023, September 5, 2023, October 5, 2023, November 5, 2023, December 5, 2023, and January 5, 2024, respectively.
As of December 31, 2023, cash deposited into the Trust Account in relation to the extensions amounted to $2,550,000.

 Refer
to Note 11 for further information regarding the Company's February 1, 2024 Shareholder Meeting.

 Proposed
Business Combination

 On
March 3, 2023, the Company entered into a Business Combination agreement by and among the Company, AIRO Group, Inc., a Delaware corporation
and a wholly owned subsidiary of the Company ("ParentCo"), Kernel Merger Sub, Inc., a Delaware corporation and a wholly owned
subsidiary of ParentCo ("Kernel Merger Sub"), AIRO Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary
of ParentCo ("AIRO Merger Sub"), the Company's Sponsor, Dr. Chirinjeev Kathuria, in the capacity as the representative
for the Company's shareholders (the "Seller Representative"), and AIRO Group Holdings, Inc., a Delaware corporation
("AIRO Group Holdings"), referred to collectively as the parties (the "Parties") (as may be amended and/or restated
from time to time, the "Business Combination Agreement"), pursuant to which, among other things, the Company will change
the Company's jurisdiction of incorporation by deregistering as a Cayman Islands exempted company and continuing and domesticating
as a corporation incorporated under the laws of the State of Delaware (the "Domestication").

 In
connection with the Domestication, each Class B ordinary share, par value $0.0001 per share, shall convert into a share of Class B common
stock, par value $0.0001 per share, and each Class A ordinary share, par value $0.0001 per share, shall convert into a share of Class
A common stock, par value $0.0001 per share. Further, each share of Class B common stock and each share of Class A common stock that
is then issued and outstanding shall convert automatically, on a one-for-one basis, into one share of Kernel common stock (the "Kernel
Common Stock").

 Following
the Domestication, the parties will effect the merger of Kernel Merger Sub with and into the Company, with the Company continuing as
the surviving entity as a wholly owned subsidiary of ParentCo (the "First Merger"). Immediately following the First Merger,
AIRO Merger Sub will merge with and into AIRO Group Holdings, with AIRO Group Holdings continuing as the surviving entity as a wholly
owned subsidiary of ParentCo (the "Second Merger" and the other transactions contemplated by the Business Combination Agreement,
together, the "Transaction").

 As
consideration for the Second Merger, the holders of AIRO Group Holdings' securities collectively shall be entitled to receive from
ParentCo, in the aggregate, a number of shares of ParentCo common stock with an aggregate value equal to (the "AIRO Merger Consideration")
(a) $770,000,000 minus (b) the amount, if any, by which the net working capital is less than negative $500,000, plus (c) the amount,
if any, by which the net working capital exceeds $500,000 (but not less than zero), minus (d) the amount, if any, by which the closing
net debt exceeds the target net debt of $75,000,000, by more than $500,000 (but not less than zero), plus (e) the amount, if any, by
which the target net debt of $75,000,000 exceeds closing net debt, minus (f) the amount, if any, by which the company transaction expenses
exceed the target company transaction expenses of $14,000,000 (but not less than zero). In addition, holders of AIRO Group Holdings'
securities shall have the contingent right to receive from ParentCo, in the aggregate, up to 33,000,000, and the Sponsor shall have the
contingent right to receive up to 3,300,000 shares of ParentCo Common Stock (the "Earnout Shares"). In the event that for
any full 12-month period (each an "Earnout Period") commencing on or after the Closing Date (the "Earnout Start Date")
and ending on or before the last day of the thirteenth full calendar quarter following the Closing Date (the "Earnout End Date",
and the period between the Earnout Start Date and the Earnout End Date, the "Earnout Eligibility Period") ParentCo's
revenue is (i) greater than or equal to $42,600,000 for the first time during the Earnout Eligibility Period, (ii) greater than or equal
to $141,400,000 for the first time during the Earnout Eligibility Period, and (iii) greater than or equal to $358,900,000 for the first
time during the Earnout Eligibility Period, then upon the occurrence of each (i), (ii), and (iii) ParentCo shall issue to each of the
stockholders of AIRO Group Holdings such stockholder's pro rata share of 6,600,000 Earnout Shares and the Sponsor shall be issued
660,000 Earnout Shares. In the event that ParentCo's EBITDA for any Earnout Period is (x) greater than or equal to $(19,300,000)
for the first time during the Earnout Eligibility Period, (y) greater than or equal to $4,000,000 for the first time during the Earnout
Eligibility Period and (z) greater than or equal to $98,600,000 for the first time during the Earnout Eligibility Period, then upon the
occurrence of each of (x), (y), and (z), ParentCo shall issue to each of the stockholders of AIRO Group Holding such stockholder's
pro rata share of 4,400,000 Earnout Shares and the Sponsor shall be issued 440,000 Earnout Shares.

 The
Business Combination Agreement contains customary conditions to Closing, including the following mutual conditions of the parties (unless
waived): (i) approval of the shareholders of Kernel and AIRO Group Holdings of the Transaction and the other matters requiring shareholder
approval; (ii) approvals of any required governmental authorities and completion of any antitrust expiration periods; (iii) receipt of
specified third party consents; (iv) no law or order preventing the Transaction; (v) the Registration Statement having been declared
effective by the SEC; (vi) no material uncured breach by the other party; (vii) no occurrence of a Material Adverse Effect with respect
to the other party; (viii) approval from Nasdaq for the listing of the shares of ParentCo's common to be issued in connection with
the Transaction; and (ix) reconstitution of the Post-Closing Board as contemplated under the Business Combination Agreement. Refer to
Note 11 for further information regarding the Third Amendment (the "Third Amendment") to the Business Combination Agreement
entered into on February 5, 2024, by and among the Parties.

 In
addition, unless waived by AIRO Group Holdings, the obligations of AIRO Group Holdings to consummate the Transaction are subject to the
satisfaction of the following additional Closing conditions, in addition to the delivery by Kernel of the Related Agreements (as defined
and described in greater detail below), customary certificates and other Closing deliverables: (i) the representations and warranties
of Kernel being true and correct as of the date of the Business Combination Agreement and as of the Closing (subject to customary exceptions,
including materiality qualifiers); (ii) Kernel having performed in all material respects its obligations and complied in all material
respects with its covenants and agreements under the Business Combination Agreement required to be performed or complied with by it on
or prior to the date of the Closing; (iii) absence of any Material Adverse Effect with respect to Kernel since the date of the Business
Combination Agreement which is continuing and uncured; (iv) the replacement of the Replacement Warrants and Replacement Options; (v)
at the Closing, Kernel having $50,000,000 in Unencumbered Cash, including funds remaining in the Trust Account (after giving effect to
the completion and payment of any redemptions and any Transaction Expenses) and the proceeds of the PIPE/Convertible Note Investment,
fifty percent (50%) of any net cash proceeds of any capital investment raise and/or convertible debt raise conducted by the Company during
the period beginning on the effective date of the Business Combination and ending on the Closing Date, and any net cash proceeds of any
executed agreements regarding a capital investment raise and/or convertible debt raise conducted by Kernel or ParentCo in which such
cash proceeds are required to be paid to ParentCo during the thirty (30) day period beginning on the Closing Date.

 Finally,
unless waived by Kernel, the obligations of Kernel to consummate the Transaction are subject to the satisfaction of the following additional
Closing conditions, in addition to the delivery by Kernel of the Related Agreements (as defined and described in greater detail below),
customary certificates and other Closing deliverables: (i) the representations and warranties of AIRO Group Holdings being true and correct
as of the date of the Business Combination Agreement and as of the Closing (subject to customary exceptions, including materiality qualifiers);
(ii) AIRO Group Holdings having performed in all material respects their respective obligations and complied in all material respects
with their respective covenants and agreements under the Business Combination Agreement required to be performed or complied with by
them on or prior to the date of the Closing; (iii) absence of any Material Adverse Effect with respect to AIRO Group Holdings and its
subsidiaries on a consolidated basis since the date of the Business Combination Agreement which is continuing and uncured; (iv) delivery
of AIRO's 2022 Audited Financials within 60 days of the Business Combination Agreement's signing; (v) the completion of Kernel's
legal due diligence of AIRO Group Holdings and its subsidiaries to Kernel's reasonable satisfaction; (vi) the replacement of the
Replacement Warrants and Replacement Options; and (vii) the aggregate amount of all Indebtedness of the Target Companies due earlier
than 180 days after the Closing (less Company cash at Closing) is less than Fifty Million U.S. Dollars ($50,000,000).

 On
August 29, 2023, the Company, ParentCo, Kernel Merger Sub, AIRO Merger Sub, Seller Representative, AIRO Group Holdings, and the Sponsor
entered into the First Amendment to the Business Combination Agreement (the "First Amendment"). The First Amendment amends
the Business Combination Agreement to make certain changes to the earnout provisions to fix the number of Earnout Shares that can be
granted in each Earnout Period based on a $10.00 per share price. Refer to Note 11 for further information.

Delisting Notice

 On
July 7, 2023, the Company received a notice (the "Nasdaq Notice") from the Listing Qualifications Department of Nasdaq stating
that, as of June 29, 2023, the Company had failed to hold an annual meeting of shareholders within 12 months after its fiscal year ended
December 31, 2021, as required by Nasdaq Listing Rule 5620(a) (the "Rule") and therefore was not in compliance with the Rule.
As a result, Nasdaq advised the Company that its securities would be subject to delisting unless the Company timely requests a hearing
before an independent Hearings Panel (the "Panel"). Accordingly, the Company timely requested a hearing. The hearing request
stayed the suspension of the Company's securities and the termination of registration of the securities with Nasdaq as required
by the rules of the SEC pending the Panel's decision and, therefore, Nasdaq's notice had no immediate effect on the listing
of the Company's ordinary shares, Units or Public Warrants on Nasdaq. On September 1, 2023, the Company received a letter from
the Listing Qualifications Department of Nasdaq stating that the Company regained compliance under the Rule upon holding its annual meeting
of shareholders on August 31, 2023.

 Refer
to Note 11 for further information regarding the February 5, 2024 notice received from the Listing Qualifications Department of Nasdaq
(the "February 5, 2024 Nasdaq Notice").

 Liquidity,
Capital Resources, and Going Concern

 For
the year ended December 31, 2023, net cash used in operating activities of $1,457,659, which was due to our net loss of $7,541,436, income
from investments held in Trust Account of $2,260,223, gain on waiver of deferred underwriting commissions of $755,346, partially offset
by an unrealized loss on changes in the fair value of warrant liabilities of $305,396, unrealized loss on fair value of derivative liabilities
related to the forward purchase agreement of $6,261,728, amortization of debt discount of $1,415,773, and changes in working capital
of $1,116,449.

 For
the year ended December 31, 2022, net cash used in operating activities was $311,850, which was due to unrealized loss on changes in
the fair value of warrant liabilities of $12,299,146, income from investments held in Trust Account of $4,469,702, partially offset by
our net income of $15,656,029, and changes in working capital of $800,969.

 For
the year ended December 31, 2023, net cash provided by investing activities of $243,675,328 included the proceeds from cash proceeds
from the Trust Account of $246,225,328 to pay redeeming shareholders, partially offset by the investment of Advances to Trust Account
of $2,550,000 in connection with the Extension Payments.

 There
were no cash flows from investing activities for the year ended December 31, 2022.

 For
the year ended December 31, 2023, net cash used in financing activities of $242,309,960 included payments to redeeming shareholders of
$246,225,328, partially offset by proceeds from related party promissory notes of $2,215,368, and convertible promissory notes of $1,700,000.

 For
the year ended December 31, 2022, net cash used in financing activities was $70,000, which was a result of payment of offering costs.

 As
of December 31, 2023, we had $804 in our operating bank account and a working capital deficit of $7,822,239.

 The
Company's liquidity needs to date have been satisfied through a contribution of $25,000 from Original Sponsor to cover for certain
expenses in exchange for the issuance of the Founder Shares, the loan of $77,000 from the Original Sponsor under the Note, certain portion
of the proceeds from the consummation of the Private Placement not held in the Trust Account, the Promissory Note of $2,500,000, and
Convertible Promissory Note of $1,700,000. The Company repaid $77,000 of the loan from the Original Sponsor in February 2021. In addition,
in order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain
of the Company's officers and directors may, but are not obligated to, provide the Company Working Capital Loans. If the Company
completes a Business Combination, the Company may repay the Working Capital Loans out of the proceeds of the Trust Account released to
the Company. Otherwise, the Working Capital Loans may be repaid only out of funds held outside the Trust Account. In the event that a
Business Combination does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital
Loans but no proceeds held in the Trust Account would be used to repay the Working Capital Loans.

 Management
has determined that the Company has access to funds from the Sponsor or an affiliate of the Sponsor, or certain of our officers and
directors to meet its needs through the earlier of the consummation of a Business Combination or one year from this filing. Over
this time period, the Company will be using these funds for paying existing accounts payable, identifying and evaluating prospective
initial Business Combination candidates, performing due diligence on prospective target businesses, paying for travel expenditures,
selecting the target business to merge with or acquire, and structuring, negotiating and consummating the Business Combination. In
connection with the Company's assessment of going concern considerations in accordance with Financial Accounting Standards
Board ("FASB") Accounting Standards Update ("ASU") 2014-15, " Disclosures of Uncertainties about an
Entity's Ability to Continue as a Going Concern, " the Company have determined that the liquidity condition, the date
of the mandatory liquidation and subsequent dissolution raises substantial doubt about the Company's ability to continue as a
going concern. No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to
liquidate after August 5, 2024. The financial statements do not include any adjustment that might be necessary if the Company are
unable to continue as a going concern. The Company's management plans to complete a Business Combination prior to the
mandatory liquidation date.

 Risks
and Uncertainties

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

 In
February 2022, the Russian Federation and Belarus commenced a military action with the country of Ukraine. As a result of this action,
various nations, including the United States, have instituted economic sanctions against the Russian Federation and Belarus. Further,
the impact of this action and related sanctions on the world economy is not determinable as of the date of these financial statements.
The specific impact on our financial condition, results of operations, and cash flows is also not determinable as of the date of these
financial statements.

 On
March 10, 2023, Silicon Valley Bank ("SVB") was closed by the California Department of Financial Protection and Innovation,
which appointed the Federal Deposit Insurance Corporation ("FDIC") as receiver. On March 13, 2023, the FDIC announced that
it had transferred all insured and uninsured deposits and substantially all assets of SVB to a newly created, full-service FDIC-operated
"bridge bank" called Silicon Valley Bank, N.A., where depositors would have full access to their money beginning immediately.
As of the date of filing this Annual Report on Form 10-K, we have access to and control over all our cash, cash equivalents and marketable
securities, notwithstanding the closure of Silicon Valley Bank.

 Results
of Operations

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

 For
the year ended December 31, 2023, we had a net loss of $7,541,436, which consisted of $2,449,228 in general and administrative expenses
and $120,000 of related party administrative fees, an unrealized loss of $305,396 resulting from the change in fair value of warrant
liabilities, an unrealized loss on fair value of derivative liabilities related to the forward purchase agreement of $6,261,728, $1,415,773
in amortization of debt discount, $4,880 in interest expense, partially offset by $2,260,223 of income from investments held in the Trust
Account, and $755,346 gain resulting from a waiver of deferred underwriting commissions.

 For
the year ended December 31, 2022, we had net income of $15,656,029, which consisted of $4,469,702 of income from investments held in
Trust Account and an unrealized gain of $12,299,146 resulting from the change in fair value of warrant liabilities, partially offset
by $992,819 in general and administrative expenses and $120,000 related party administrative fees.

Party Transactions

 Founder

 On
November 19, 2020, the Original Sponsor paid an aggregate of $25,000 for certain expenses on behalf of us in exchange for issuance of
5,750,000 Class B ordinary shares (the "Founder Shares"). On January 11, 2021, we effected a 1 for 1.25 forward stock split
of the Founder Shares that increased the number of outstanding Founder Shares from 5,750,000 to 7,187,500 shares, and the Original Sponsor
transferred an aggregate of 75,000 Founder Shares to the independent directors and an aggregate of 50,000 Founder Shares to the Former
Advisors. On February 2, 2021, we effected a 1 for 1.06 forward stock split of the Founder Shares that increased the number of outstanding
Founder Shares from 7,187,500 to 7,618,750 shares and resulted in the Original Sponsor holding 7,493,750 Founder Shares. The Original
Sponsor agreed to forfeit up to an aggregate of 993,750 Founder Shares to the extent that the option to purchase additional Units was
not exercised in full by the underwriters or was reduced, so that the Founder Shares would represent 20% of our issued and outstanding
shares after the Initial Public Offering. On February 5, 2021, the underwriter fully exercised its over-allotment option; thus, these
993,750 Founder Shares are no longer subject to forfeiture.

 The
Sponsor agreed not to transfer, assign or sell any of their Founder Shares until the earlier to occur of (A) one year after the completion
of the initial Business Combination and (B) subsequent to the initial Business Combination, (x) if the closing price of the Class A ordinary
shares equals or exceeds $12.00 per share (as adjusted for share splits, share capitalizations, reorganizations, recapitalizations and
the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the initial Business Combination,
or (y) the date on which we complete a liquidation, merger, share exchange, reorganization or other similar transaction that results
in all of the Public Shareholders having the right to exchange their ordinary shares for cash, securities or other property.

 On
December 28, 2022, we entered into a purchase agreement with the Original Sponsor and the Sponsor, pursuant to which the New Sponsor,
or an entity designated by the New Sponsor, will purchase from the Original Sponsor 7,618,500 Class B ordinary shares, par value $0.0001
per share and 8,750,000 Private Placement Warrants, each of which is exercisable to purchase one Class A ordinary share, par value $0.0001
per share, for an aggregate purchase price of $1.00 payable at the time we effect the initial Business Combination. Upon the closing
of the initial Business Combination, New Sponsor shall also convey 2,000,000 Class B ordinary shares to the equityholders of the Original
Sponsor, as of December 28, 2022, pro rata based on the equityholders' underlying interest in our Class B ordinary shares as of
December 28, 2022.

 Private
Placement Warrants

with the closing of the Initial Public Offering, we consummated the Private Placement of 8,750,000 Private Placement Warrants, at a price
of $1.00 per Private Placement Warrant with the Original Sponsor, generating gross proceeds of approximately $8.8 million.

 On
December 28, 2022, the Original Sponsor transferred all Private Placement Warrants to the New Sponsor.

 Each
whole Private Placement Warrant is exercisable for one whole Class A ordinary share at a price of $11.50 per share. A portion of the
proceeds from the sale of the Private Placement Warrants to the Sponsor was added to the proceeds from the Initial Public Offering held
in the Trust Account. If we do not complete a Business Combination within the Combination Period, the Private Placement Warrants will
expire worthless. The Private Placement Warrants will be non-redeemable for cash and exercisable on a cashless basis so long as they
are held by the Sponsor or its permitted transferees.

 The
Sponsor and our officers and directors agreed, subject to limited exceptions, not to transfer, assign or sell any of their Private Placement
Warrants until 30 days after the completion of the initial Business Combination.

Party Loans

 In
order to fund working capital deficiencies or finance transaction costs in connection with a Business Combination, the Sponsor or an
affiliate of the Sponsor, or certain of our officers and directors may, but are not obligated to, loan us funds as may be required ("Working
Capital Loans"). If we complete a Business Combination, we may repay the Working Capital Loans out of the proceeds of the Trust
Account released to us. Otherwise, the Working Capital Loans may be repaid only out of funds held outside the Trust Account. In the event
that a Business Combination does not close, we may use a portion of proceeds held outside the Trust Account to repay the Working Capital
Loans but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. The Working Capital Loans would either
be repaid upon consummation of a Business Combination, without interest, or, at the lender's discretion, up to $1.5 million of
such Working Capital Loans may be convertible into warrants of the post Business Combination entity at a price of $1.00 per warrant.
The warrants would be identical to the Private Placement Warrants. Except for the foregoing, the terms of such Working Capital Loans,
if any, have not been determined and no written agreements exist with respect to such loans. As of December 31, 2023 and December 31,
2022, we had no borrowings under the Working Capital Loans.

 During
the for the year ended December 31, 2023, the Company entered into loan agreements with eleven investors and the Sponsor (the "Loan
Agreements"). Pursuant to the Loan Agreements, the investors loaned the Sponsor a total of $2,500,000, which will in turn be loaned
by the Sponsor to the Company, to cover a portion of the extension fees with any remaining balance to be used for the Company's
working capital. The Loan Agreements accrue 8% interest per annum and shall be repaid upon closing the initial Business Combination.
The Company intends to pay all principal under the Loan Agreements and shall not be responsible for the payment of any interest on the
loans. As of December 31, 2023, the total amount drawn on the Loan Agreements was $2,215,368.

 Administrative
Services Agreement

 Commencing
on the date that our securities were first listed on Nasdaq through the earlier of consummation of the initial Business Combination or
its liquidation, we agreed to pay the Sponsor $10,000 per month for office space, administrative and support services. For the years
ended December 31, 2023 and 2022, the Company incurred $120,000 and $120,000 for such services, respectively. As of December 31, 2023
and December 31, 2022, $290,000 and $170,000 were outstanding, respectively, and included in accrued expenses – related party as
reflected in the accompanying consolidated balance sheets.

 Forward
Purchase Agreement

 In
February 2023, the Company entered into a forward purchase agreement (the "Forward Purchase Agreement") pursuant to which
Meteora Special Opportunity Fund I, LP, Meteora Capital Partners, LP, Meteora Select Trading Opportunities Master, LP (collectively the
"Seller"), intends, but is not obligated, to purchase from the Company up to a maximum of 7,700,000 Class A ordinary shares
(the "Forward Purchase Shares") from holders (other than the Company or its affiliates) who have elected to redeem such shares
in connection with the Business Combination. Purchases by Seller will be made through brokers in the open market after the redemption
deadline in connection with the Business Combination at a price no higher than the redemption price to be paid by the Company in connection
with the Business Combination.

 The
Seller will determine in its sole discretion the specific number of Forward Purchase Shares (up to 7,700,000) that it will purchase,
if any, and the obligation of the Company to sell the Forward Purchase Shares is subject to the approval of the Seller's manager
following notice to the Seller that the Company intends to enter into an agreement for a Business Combination.

 The
Forward Purchase Agreement also provides that the Seller is entitled to registration rights with respect to the Forward Purchase Shares.
The proceeds from the sale of the Forward Purchase Shares may be used as part of the consideration to the Company in an initial Business
Combination, expenses in connection with an initial Business Combination or for working capital in the post-Business Combination company.
These purchases are required to be made regardless of whether any Class A ordinary shares are redeemed by the Public Shareholders and
are intended to provide the Company with a minimum funding level for an initial Business Combination. The Forward Purchase Shares will
be issued only in connection with the closing of an initial Business Combination.

 The
Company accounts for the Forward Purchase Agreement in accordance with the guidance contained in ASC 480-10, D istinguishing
Liabilities from Equity - Preferred Stock Subject to Mandatory Redemption. Such guidance provides that because the Forward
Purchase Agreement does not meet the criteria for equity treatment thereunder, the agreement must be recorded as a liability.
Accordingly, the Company classifies the Forward Purchase Agreement as an asset or liability at its fair value. This asset or
liability is subject to re-measurement at each balance sheet date. With each such remeasurement, the asset or liability will be
adjusted to fair value, with the change in fair value recognized in the Company's consolidated statements of
operations.

 On
November 27, 2023, the Company, Seller, and Airo entered into a mutual termination agreement (the "Mutual Termination Agreement")
to terminate the Forward Purchase Agreement. In consideration of the termination of the FPA, ParentCo agreed to issue 50,000 shares of
common stock to an entity designated by Seller at the time of the closing of the Business Combination, which shares will have certain
demand and piggyback registration rights. At the termination date the Company assessed the fair value of the derivative liability - forward
purchase agreement and determined the change in fair value to be immaterial. The derivative liability - forward purchase agreement was extinguished as a result of the Mutual Termination
Agreement, and upon the derecognition of the liability, a reduction of $6.3 million was recorded as a gain to accumulated deficit.

to the Mutual Termination Agreement, in the event that the closing of the Business Combination does not occur or the Company otherwise
fails to make the payment of the 50,000 shares, the Company shall pay or cause to be paid a break-up fee equal to (i) all of Seller's
actual out-of-pocket reasonable and documented fees, costs and expenses relating to the transaction in an amount not to exceed $50,000,
plus (ii) $500,000, payable by the Company to the Seller, and (iii) reimbursement of reasonable and documented attorney fees and other
reasonable out-of-pocket expenses related thereto actually incurred by Seller or its affiliates in connection with the transaction not
to exceed $50,000.

 The
company considered the guidance under ASC 815, Derivatives and Hedging, and determined the consideration shares payment pursuant to the
Mutual Termination Agreement described above met the scope exception within ASC 815-10-15-74. As such, the equity-classified contract
was accounted for within equity at fair value as determined on the settlement date. The measurement date fair value of $53,100 was determined
using the Company's share price on the settlement date, the number of shares pursuant to the Mutual Termination Agreement, and
probability weighted for the Company's expected percentage of completing its Business Combination.

 Commitments
and Contractual Obligations

 Registration
and Shareholder Rights

 The
holders of the Founder Shares, Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans (and
any Class A ordinary shares issuable upon the exercise of the Private Placement Warrants) were entitled to registration rights pursuant
to a registration and shareholder rights agreement signed upon the effective date of the Initial Public Offering. The holders of these
securities were entitled to make up to three demands, excluding short form demands, that we register such securities. In addition, the
holders will be entitled to certain demand and "piggy-back" registration rights with respect to registration statements filed
subsequent to the completion of the initial Business Combination. We will bear the expenses incurred in connection with the filing of
any such registration statements.

 Underwriting
Agreement

 We
granted the underwriters a 45-day option from the final date of the prospectus relating to the Initial Public Offering to purchase up
to 3,975,000 additional Units at the Initial Public Offering price less the underwriting discounts and commissions. On February 5, 2021,
the underwriter fully exercised its over-allotment option.

 The
underwriters were entitled to an underwriting discount of $0.20 per unit, approximately $6.1 million in the aggregate, paid upon the
closing of the Initial Public Offering. In addition, $0.35 per unit, or approximately $10.7 million in the aggregate will be payable
to the underwriters for deferred underwriting commissions. On May 24, 2023, the underwriters agreed to waive its rights to its portion
of the fee payable by the Company for deferred underwriting commissions, with respect to any potential Business Combination of the Company.
Of the total $10,666,250 waived fee, $9,910,904 was recorded as a reduction to accumulated deficit and $755,346 was recorded as a gain
on the waiver of deferred underwriting commissions by underwriter in the statements of operations, following a
manner consistent with the original allocation of the deferred underwriting fees.

 Critical
Accounting Estimates

 Derivative
Warrant Liabilities

 We
do not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. We evaluate all of our financial
instruments, including issued stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify
as embedded derivatives, pursuant to Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC")
Topic 480, " Distinguishing Liabilities from Equity " ("ASC 480") and ASC 815, "Derivatives and
Hedging" ("ASC 815"). The classification of derivative instruments, including whether such instruments should be
recorded as liabilities or as equity, is re-assessed at the end of each reporting period.

 The
warrants issued in connection with the Initial Public Offering and the Private Placement Warrants are recognized as derivative liabilities
in accordance with ASC 815. Accordingly, the Company recognizes the warrant instruments as liabilities at fair value and adjusts the
instruments to fair value at each reporting period. The liabilities are subject to re-measurement at each balance sheet date until exercised.
The fair value of warrants issued in connection with the Private Placement has been measured by using the market value of the public
warrants. The fair value of the warrants issued in connection with the Initial Public Offering was initially measured using a Monte-Carlo
simulation and subsequently has been measured based on the market price at each measurement date when separately listed and traded. The
determination of the fair value of the derivative liability may be subject to change as more current information becomes available and
accordingly the actual results could differ significantly. Derivative liabilities are classified as non-current liabilities as their
liquidation is not reasonably expected to require the use of current assets or require the creation of current liabilities.

 Class
A Ordinary Shares Subject to Possible Redemption

 We
account for our Class A ordinary shares subject to possible redemption in accordance with the guidance in ASC Topic 480. Class A ordinary
shares subject to mandatory redemption (if any) are classified as liability instruments and are measured at fair value. Conditionally
redeemable Class A ordinary shares (including Class A ordinary shares that feature redemption rights that are either within the control
of the holder or subject to redemption upon the occurrence of uncertain events not solely within our control) are classified as temporary
equity. At all other times, Class A ordinary shares are classified as shareholders' equity. Our Class A ordinary shares feature
certain redemption rights that are considered to be outside of our control and subject to the occurrence of uncertain future events.
Accordingly, as of Initial Public Offering, we had 30,475,000 Class A ordinary shares subject to possible redemption, that are presented
as temporary equity, outside of the shareholders' equity (deficit) section of the Company consolidated balance sheets. For the
year ended December 31, 2023, 24,159,051 Class A ordinary shares were redeemed by shareholders.

 We
recognize changes in redemption value immediately as they occur and adjust the carrying value of the Class A ordinary shares subject
to possible redemption to equal the redemption value at the end of each reporting period. This method would view the end of the reporting
period as if it were also the redemption date for the security. Effective with the closing of the Initial Public Offering, we recognized
the accretion from initial book value to redemption amount, which resulted in charges against additional paid-in capital (to the extent
available) and accumulated deficit.

Instruments – Credit Losses

 In
January 2023, the Company adopted the FASB issued Accounting Standards Update ("ASU") No. 2016-13, "Financial
Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments," which requires an entity to utilize
a new impairment model known as the current expected credit loss (CECL) model to estimate its lifetime "expected credit loss"
and record an allowance that, when deducted from the amortized cost basis of the financial asset, presents the net amount expected to
be collected on the financial asset. The CECL model is to result in more timely recognition of credit losses. This guidance also requires
new disclosures for financial assets measured at amortized costs, loans, and available-for-sale debt securities. The adoption of
this standard did not have a material effect on the Company's operating results or financial position as the only securities to
which this standard applies are the U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company
Act, with a maturity of 185 days or less, or investments in money market funds that invest in U.S. government securities and generally
have a readily determinable fair value, which the Company deemed to have no credit losses.

 Off-Balance
Sheet Arrangements

 As
of December 31, 2023, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K.

 JOBS
Act

 The
Jumpstart Our Business Startups Act of 2012 (the "JOBS Act") contains provisions that, among other things, relax certain
reporting requirements for qualifying public companies. We qualify as an "emerging growth company" and under the JOBS Act
are allowed to comply with new or revised accounting pronouncements based on the effective date for private (not publicly traded) companies.
We are electing to delay the adoption of new or revised accounting standards, and as a result, we may not comply with new or revised
accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. As a result,
the financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company
effective dates.

we are in the process of evaluating the benefits of relying on the other reduced reporting requirements provided by the JOBS Act. Subject
to certain conditions set forth in the JOBS Act, if, as an "emerging growth company," we choose to rely on such exemptions
we may not be required to, among other things, (i) provide an auditor's attestation report on our system of internal controls over
financial reporting pursuant to Section 404, (ii) provide all of the compensation disclosure that may be required of non-emerging growth
public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may be adopted
by the PCAOB regarding mandatory audit firm rotation or a supplement to the auditor's report providing additional information about
the audit and the financial statements (auditor discussion and analysis) and (iv) disclose certain executive compensation related items
such as the correlation between executive compensation and performance and comparisons of the CEO's compensation to median employee
compensation. These exemptions will apply for a period of five years following the completion of our Initial Public Offering or until
we are no longer an "emerging growth company," whichever is earlier.

 Item
 7A.

 Quantitative
 and Qualitative Disclosures About Market Risk

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

 Item
 8.

 Statements and Supplementary Data

 The
financial statements and supplementary data filed as part of this report are set forth below beginning on page F-1 of this report.

 Item
 9.

 Changes
 in and Disagreements with Accountants on Accounting and Financial Disclosure

 None.

 Item
 9A.

 Controls
 and Procedures

 Disclosure
Controls and Procedures

 Disclosure
controls are procedures that are designed with the objective of ensuring that information required to be disclosed in our reports filed
under the Exchange Act, such as this Report, is recorded, processed, summarized, and reported within the time period specified in the
SEC's rules and forms. Disclosure controls are also designed with the objective of ensuring that such information is accumulated
and communicated to our management, including the chief executive officer and chief financial officer, as appropriate to allow timely
decisions regarding required disclosure. Based upon their evaluation, our Chief Executive Officer and Chief Financial Officer concluded
that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were effective as of
December 31, 2023.

 Disclosure
controls and procedures are designed to ensure that information required to be disclosed by us in our Exchange Act reports is recorded,
processed, summarized, and reported within the time periods specified in the SEC's rules and forms, and that such information is
accumulated and communicated to our management, including our principal executive officer and principal financial officer or persons
performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

 Internal
Controls Over Financial Reporting

 Our
management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined
in Rule 13a-15(f) and 15(d)-15(f) under the Exchange Act. The Company's management assessed the effectiveness of its internal control
over financial reporting as of December 31, 2023. In making this assessment, management used the criteria set forth by the Committee
of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework (2013). Based on this assessment,
management has concluded that, as of December 31, 2023, the Company's internal control over financial reporting was effective.

 Changes
in Internal Control Over Financial Reporting

 There
was no change in our internal control over financial reporting that occurred during the fiscal quarter ended December 31, 2023 that has
materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 Item
 9B.

 Other
 Information

 For
the year ended December 31, 2023, there was no information required to be disclosed in a report on Form 8-K which was not disclosed in
a report on Form 8-K.

 None
of the Company's directors or officers adopted, modified or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading
arrangement during the Company's fiscal quarter ended December 31, 2023, as such terms are defined under Item 408(a) of Regulation
S-K.

 Item
 9C.

 Disclosure
 Regarding Foreign Jurisdictions that Prevent Inspections

 Not
applicable.

 PART
III

 Item
 10.

 Directors,
 Executive Officers and Corporate Governance Directors and Executive Officers

 As
of the date of this Annual Report on Form 10-K, our directors and officers are as follows:

 Name

 Age

 Position

 Surendra
 Ajjarapu

 Chief
 Executive Officer and Chairman

 Doss

 Chief
 Financial Officer and Director

 L. Peterson

 G. Fell

 Srinivasan

 Siva
 Saravanan

 Surendra
Ajjarapu has served as Chief Executive Officer and Chairman of Kernel since December
2023. In addition to his involvement with Kernel, Mr. Ajjarapu has served as Chief Executive Officer and Chairman of Power Up Acquisitions
Corp. (Nasdaq: PWUP), a special purpose acquisition company since August 2023. Mr. Ajjarapu served as Chief Executive Officer and Chairman
of Semper Paratus Acquisition Corporation (Nasdaq: LSGT), a special purpose acquisition company, from June 2023 until the completion of
its initial business combination in 2024. Mr. Ajjarapu now serves as a director of the post-combination company Tevogen Bio Holdings Inc.
(Nasdaq: TVGN). Mr. Ajjarapu has served as Chief Executive Officer and Chairman of OceanTech Acquisitions I Corp. (Nasdaq: OTEC), a special
purpose acquisition company, since March 2023. Mr. Ajjarapu currently serves Trxade Health, Inc. (Nasdaq: MEDS), a health services information
technology company, as Chairman of the Board, Chief Executive Officer and Secretary and has served in these roles since its acquisition
of Trxade Group, Inc., a Nevada corporation ("Trxade Nevada") on January 8, 2014, and as the Chairman of the Board, Chief
Executive Officer and Secretary of Trxade Nevada since its inception in 2013. Mr. Ajjarapu is also currently serving as a director of
the merged company, Ocean Biomedical Inc. (NASDAQ: OCEA) (f.k.a Aesther Healthcare Acquisition Corp.), a biopharmaceutical company. Since
March 2018, Mr. Ajjarapu has served as Executive Chairman of the Board of Kano Energy Corp., a company involved in the development of
renewable natural gas sites in the United States. Mr. Ajjarapu was a Founder and served as Chief Executive Officer and Chairman of the
Board of Sansur Renewable Energy, Inc., a company involved in developing wind power sites in the Midwest of the United States, from March
2009 to December 2012. Mr. Ajjarapu was also a Founder, President and Director of Aemetis, Inc., a biofuels company (NASDAQ: AMTX), and
a Founder, Chairman and Chief Executive Officer of International Biofuels, a subsidiary of Aemetis, Inc., from January 2006 to March 2009.
Mr. Ajjarapu was Co-Founder, Chief Operations Officer, and Director of Global Information Technology, Inc., an IT outsourcing and systems
design company, headquartered in Tampa, Florida with major operations in India. Mr. Ajjarapu graduated from South Dakota State University
with a M.S. in Environmental Engineering, and from the University of South Florida with an M.B.A., specializing in International Finance
and Management. Mr. Ajjarapu is also a graduate of the Venture Capital and Private Equity program at Harvard University.

Doss has served as Chief Financial Officer of Kernel since December 2022. Mr. Doss is a seasoned chief financial officer and accountant.
Mr. Doss has served as Chief Financial Officer of Power Up Acquisitions Corp. (Nasdaq: PWUP), a special purpose acquisition company, since
August 2023. Beginning in 2021, he served as Chief Financial Officer of Aesther Healthcare Acquisition Corp., a special purpose acquisition
company until it consummated its initial business combination in February 2023. He has also served as chief financial officer of TRxADE
HEALTH, INC., an online marketplace for health traded on Nasdaq under the symbol "MEDS." Mr. Doss has served in a variety
of capacities with accounting and investment firms. He joined the staff of Seidman & Seidman (BDO Seidman, Dallas) in 1977 and in
1980 he joined the investment firm Van Kampen Investments, opening the firm's southeast office in Tampa, Florida in 1982. He remained
with the firm until 1996 when he joined Franklin Templeton. After working for the Principal Financial Group office in Tampa, Florida,
Mr. Doss was City Executive for U.S. Trust in Sarasota, Florida, responsible for high net worth individuals. He retired from that position
in 2009. He served as CFO and Director for Sansur Renewable Energy an alternative energy development company, from 2010 to 2012. Mr.
Doss has also served as President of STARadio Corp. since 2005. Mr. Doss is a member of the America Institute of CPA's. He is a
graduate of Illinois Wesleyan University.

Peterson, has served as a director of Kernel since December 2022. Mr. Peterson has
served as a director of Power Up Acquisitions Corp. (Nasdaq: PWUP), a special purpose acquisition company, since August 2023 and as a director
of OceanTech Acquisitions I Corp. (Nasdaq: OTEC), a special purpose acquisition company since March 2023. Mr. Peterson served as a director
of Semper Paratus Acquisition Corporation (Nasdaq: LSGT), a special purpose acquisition company from June 2023 until the completion of
its initial business combination in 2024. Mr. Peterson has been serving as President, Chief Executive Officer and as a member of the Board
of Directors of Lafayette Energy Corp. in April 2022. Beginning in September 2021, Mr. Peterson served as a member of the Board of Directors,
Audit Committee (Chair), Compensation Committee and Nominating and Corporate Governance Committee of Aesther Healthcare Acquisition Corp.
(Nasdaq: AEHA), a special purpose acquisition company, that consummated its initial business combination in February 2023. Mr. Peterson
is currently serving as a director of the merged company, Ocean Biomedical, Inc. (Nasdaq: OCEA) (f.k.a Aesther Healthcare Acquisition
Corp.). Mr. Peterson has served as the president of Nevo Motors, Inc. since December 2020, which was established to commercialize a range
extender generator technology for the heavy-duty electric vehicle market but is currently non-operational. Since May 2022, Mr. Peterson
has served as a member of the Board of Directors and as the Chairperson of the Audit Committee of Trio Petroleum Corp., an oil and gas
exploration and development company which is in the process of going public. Since February 2021, Mr. Peterson has served on the board
of directors and as the Chairman of the Audit Committee of Indonesia Energy Corporation Limited (NYSE American: INDO). Mr. Peterson previously
served as the president of the Taipei Taiwan Mission of The Church of Jesus Christ of Latter-day Saints, in Taipei, Taiwan from June 2018
to June 2021. Mr. Peterson served as an independent member of the Board of Directors of TRxADE HEALTH, INC (formerly Trxade Group, Inc.)
from August 2016 to May 2021 (Nasdaq: MEDS). Mr. Peterson served as the Chief Executive Officer of PEDEVCO Corp. (NYSE American: PED),
a public company engaged primarily in the acquisition, exploration, development and production of oil and natural gas shale plays in the
US from May 2016 to May 2018. Mr. Peterson served as Chief Financial Officer of PEDEVCO between July 2012 and May 2016, and as Executive
Vice President of Pacific Energy Development (PEDEVCO's predecessor) from July 2012 to October 2014, and as PEDEVCO's President
from October 2014 to May 2018. Mr. Peterson joined Pacific Energy Development as its Executive Vice President in September 2011, assumed
the additional office of Chief Financial Officer in June 2012, and served as a member of its board of directors from July 2012 to September
2013. Mr. Peterson formerly served as Interim President and CEO (from June 2009 to December 2011) and as director (from May 2008 to December
2011) of Pacific Energy Development, as a director (from May 2006 to July 2012) of Aemetis, Inc. (formerly AE Biofuels Inc.), a Cupertino,
California-based global advanced biofuels and renewable commodity chemicals company (Nasdaq: AMTX), and as Chairman and Chief Executive
Officer of Nevo Energy, Inc. (NEVE) (formerly Solargen Energy, Inc.), a Cupertino, California-based developer of utility-scale solar farms
which he helped form in December 2008 (from December 2008 to July 2012). From 2005 to 2006, Mr. Peterson served as a managing partner
of American Institutional Partners, a venture investment fund based in Salt Lake City. From 2000 to 2004, he served as a First Vice President
at Merrill Lynch, where he helped establish a new private client services division to work exclusively with high-net-worth investors.
From September 1989 to January 2000, Mr. Peterson was employed by Goldman Sachs & Co. in a variety of positions and roles, including
as a Vice President. Mr. Peterson received his MBA at the Marriott School of Management and a BS in statistics/computer science from Brigham
Young University.

Fell has served as a director of Kernel since December 2022. Mr. Fell brings
along a wealth of experience in the field of economics and business to Kernel. Mr. Fell has served as a director of Power Up Acquisitions
Corp. (Nasdaq: PWUP), a special purpose acquisition company, since August 2023 and as a director of OceanTech Acquisitions I Corp. (Nasdaq:
OTEC), a special purpose acquisition company since March 2023. Mr. Fell served as a director of Semper Paratus Acquisition Corporation
(Nasdaq: LSGT), a special purpose acquisition company from June 2023 until the completion of its initial business combination in 2024.
Mr. Fell served as an independent director of Aesther Healthcare Acquisition Corp., a special purpose acquisition company, from 2021 until
it consummated its initial business combination in February 2023. Mr. Fell has served as an independent director of TRxADE HEALTH, INC
(Nasdaq: MEDS) since January 2014, as well as a director of Trxade Nevada since December 2013. He is presently Professor and Institute
Director for the Davis, California-based Foundation for Teaching Economics and adjunct professor of economics for the University of Colorado,
Colorado Springs. Mr. Fell held positions with the University of South Florida as a member of the Executive MBA faculty, Director of Executive
and Professional Education and Senior Fellow of the Public Policy Institute from 1995 to 2012. Mr. Fell was also a visiting professor
at the University of LaRochelle, France, and an adjunct professor of economics at both Illinois State University and The Ohio State University.
Mr. Fell holds undergraduate and graduate degrees in economics from Indiana State University and his all but dissertation (ABD) in economics
from Illinois State University. Through his work with the Foundation for Teaching Economics and the University of Colorado, Colorado Springs
he has overseen graduate institutes on economic policy and environmental economics in 44 states, throughout Canada, the Islands and Eastern
Europe.

Srinivasan has served as a director of Kernel since December 2022. Mr. Srinivasan has a tremendous amount of experience in the pharmaceutical
industry and currently serves as President of Micro Labs USA and previously served as President of Rising Pharma, USA and as President
and CEO of Ascend Laboratories, USA where he grew the business, building a new team and strengthening processes and systems. Mr. Srinivasan
is currently serving as a Director of OceanTech Acquisition I Corp (Nasdaq: OTEC). In addition, Mr. Srinivasan served as a Director at
Pfizer India. Mr. Srinivasan served as an independent director of Aesther Healthcare Acquisition Corp., a special purpose acquisition
company, from 2021 until it consummated its initial business combination in February 2023.

 Siva
Saravanan has served as a director of Kernel since December 2022. Mr. Saravanan has more than 20 years of experience steering digital
strategies and technology solutions for businesses. Mr. Saravanan is the Chief Digital Officer at Wavestone US, helping Fortune 1000
business and technology leaders accelerate digital transformation. Prior to joining Wavestone US, Siva was Chief Information Officer
and SVP of Business Operations at Reviver, an exciting IoT start-up that creates connected digital license plates to enable true autonomous
driving. He designed customer digital experiences, unified commerce, supply chain, field service operations and the digital agenda for
Reviver. Siva was also VP for IT Digital Transformation and Program Delivery at Aristocrat Technologies. While at Aristocrat Technologies,
he led the transformation of business systems for a leading high-tech gaming manufacturer. Siva spent many years at Verifone as a Senior
Director supporting technology operations in 40+ countries and also taking on delivery responsibilities. At VeriFone, he built a world-class
global integrated supply chain network for agility and efficiency. Mr. Saravanan holds a M.S. in Systems Engineering from Tennessee State
University and B.S in Mechanical Engineering from Annamalai University in Chidambaram, India. He is also on the Advisory Board of NishTech
Inc., a digital commerce company and the Advisory Council of George Washington University School of Business Digital Program. Siva is
a member of Forbes Technology Council contributing regularly. In addition, Mr. Saravan is currently serving as a Director of OceanTech
Acquisition I Corp (Nasdaq: OTEC). Mr. Saravanan served as an independent director of Aesther Healthcare Acquisition Corp., a special
purpose acquisition company. from 2021 until it consummated its initial business combination in February 2023.

 Number
and Terms of Office of Officers and Directors

 Our
board of directors is divided into three classes, with only one class of directors being elected in each year, and with each class (except
for those directors appointed prior to our first annual meeting of shareholders) serving a three-year term. In accordance with the Nasdaq
corporate governance requirements, we are not required to hold an annual meeting until one year after our first fiscal year end following
our listing on Nasdaq. The term of office of the first class of directors, consisting of Venkatesh Srinivas and Siva Srinivasan, will
expire at our first annual meeting of shareholders. The term of office of the second class of directors, consisting of Michael Peterson
and Donald Fell, will expire at our second annual meeting of shareholders. The term of office of the third class of directors, consisting
of Surendra Ajjarapu will expire at our third annual meeting of shareholders.

 Prior
to the completion of an initial business combination, any vacancy on the board of directors may be filled by a nominee chosen by holders
of a majority of our founder shares. In addition, prior to the completion of an initial business combination, holders of a majority of
our founder shares may remove a member of the board of directors for any reason.

to an agreement entered into on or prior to the closing of our initial public offering, our Sponsor, upon and following consummation
of an initial business combination, will be entitled to nominate three individuals for election to our board of directors, as long as
the Sponsor holds any securities covered by the registration and shareholder rights agreement.

 Our
officers are appointed by the board of directors and serve at the discretion of the board of directors, rather than for specific terms
of office. Our board of directors is authorized to appoint persons to the offices set forth in our Charter as it deems appropriate. Our
Charter provide that our officers may consist of one or more chairman of the board, chief executive officer, president, chief financial
officer, vice presidents, secretary, treasurer and such other offices as may be determined by the board of directors.

Independence

listing standards require that a majority of our board of directors be independent. Our board of directors has determined that Michael
Peterson, Donald Fell, Venkatesh Srinivasan and Siva Saravanan are "independent directors" as defined in the Nasdaq listing
standards. Our independent directors will have regularly scheduled meetings at which only independent directors are present.

 Executive
Officer and Director Compensation

 None
of our executive officers or directors have received any cash compensation for services rendered to us. Commencing on the date that our
securities are first listed on Nasdaq through the earlier of consummation of our initial business combination and our liquidation, we
will reimburse our Sponsor or an affiliate of our Sponsor for office space, secretarial and administrative services provided to us in
the amount of $10,000 per month. In addition, our Sponsor, executive officers, directors, or their respective affiliates will be reimbursed
for any out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses and
performing due diligence on suitable business combinations. Our audit committee will review on a quarterly basis all payments that were
made by us to our Sponsor, executive officers, directors, or their affiliates. Any such payments prior to an initial business combination
will be made using funds held outside the Trust Account. Other than quarterly audit committee review of such reimbursements, we do not
expect to have any additional controls in place governing our reimbursement payments to our directors and executive officers for their
out-of-pocket expenses incurred in connection with our activities on our behalf in connection with identifying and consummating an initial
business combination. Other than these payments and reimbursements, no compensation of any kind, including finder's and consulting
fees, will be paid by the company to our Sponsor, executive officers and directors, or their respective affiliates, prior to completion
of our initial business combination.

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

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

 Committees
of the Board of Directors

 Our
board of directors has three standing committees: an audit committee, a nominating committee and a compensation committee. Subject to
phase-in rules and a limited exception, the rules of Nasdaq and Rule 10A-3 of the Exchange Act require that the audit committee of a
listed company be comprised solely of independent directors. Subject to phase-in rules and a limited exception, the rules of Nasdaq require
that the compensation committee and the nominating committee of a listed company be comprised solely of independent directors.

 Audit
Committee

 We
have established an audit committee of the board of directors. Mr. Peterson, Mr. Fell and Mr. Saravanan will serve on our audit committee.
Our board of directors has determined that Mr. Peterson, Mr. Fell and Mr. Saravanan are independent under the Nasdaq listing standards
and applicable SEC rules. Ms. Peterson serves as the Chairman of the audit committee.

 Under
the Nasdaq listing standards and applicable SEC rules, all the directors on the audit committee must be independent. Each member of the
audit committee is financially literate and our board of directors has determined that Mr. Peterson qualifies as an "audit committee
financial expert" as defined in applicable SEC rules.

 The
audit committee is responsible for:

 meeting
 with our independent registered public accounting firm regarding, among other issues, audits, and adequacy of our accounting and
 control systems;

 monitoring
 the independence of the independent registered public accounting firm;

 verifying
 the rotation of the lead (or coordinating) audit partner having primary responsibility for the audit and the audit partner responsible
 for reviewing the audit as required by law;

 inquiring
 and discussing with management our compliance with applicable laws and regulations;

 pre-approving
 all audit services and permitted non-audit services to be performed by our independent registered public accounting firm, including
 the fees and terms of the services to be performed;

 appointing
 or replacing the independent registered public accounting firm;

 determining
 the compensation and oversight of the work of the independent registered public accounting firm (including resolution of disagreements
 between management and the independent registered public accounting firm regarding financial reporting) for the purpose of preparing
 or issuing an audit report or related work;

 establishing
 procedures for the receipt, retention and treatment of complaints received by us regarding accounting, internal accounting controls
 or reports which raise material issues regarding our financial statements or accounting policies;

 monitoring
 compliance on a quarterly basis with the terms of our initial public offering and, if any noncompliance is identified, immediately
 taking all action necessary to rectify such noncompliance or otherwise causing compliance with the terms of our initial public offering;
 and

 reviewing
 and approving all payments made to our existing shareholders, executive officers or directors and their respective affiliates. Any
 payments made to members of our audit committee will be reviewed and approved by our board of directors, with the interested director
 or directors abstaining from such review and approval.

 Nominating
Committee

 We
have established a nominating committee of our board of directors. The members of our nominating committee will be Mr. Fell, Mr. Peterson
and Mr. Saravanan, and Mr. Fell serves as chairman of the nominating committee. Under the Nasdaq listing standards, we are required to
have a nominating committee composed entirely of independent directors. Our board of directors determined that Mr. Fell, Mr. Peterson
and Mr. Saravanan are independent under the Nasdaq listing standards.

 The
nominating committee is responsible for overseeing the selection of persons to be nominated to serve on our board of directors. The nominating
committee considers persons identified by its members, management, shareholders, investment bankers and others.

 Guidelines
for Selecting Director Nominees

 The
guidelines for selecting nominees, which will be specified in a charter to be adopted by us, generally will provide that persons to be
nominated:

 have demonstrated notable or significant achievements in business, education or public service;

 possess the requisite intelligence, education and experience to make a significant contribution to the board of directors and bring
 a range of skills, diverse perspectives and backgrounds to its deliberations; and

 have the highest ethical standards, a strong sense of professionalism and intense dedication to serving the interests of the shareholders.

 The
nominating committee will consider a number of qualifications relating to management and leadership experience, background and integrity
and professionalism in evaluating a person's candidacy for membership on the board of directors. The nominating committee may require
certain skills or attributes, such as financial or accounting experience, to meet specific board needs that arise from time to time and
will also consider the overall experience and makeup of its members to obtain a broad and diverse mix of board members. The nominating
committee does not distinguish among nominees recommended by shareholders and other persons.

 Guidelines
for Selecting Director Nominees

 The
guidelines for selecting nominees, which will be specified in a charter to be adopted by us, generally will provide that persons to be
nominated:

 have demonstrated notable or significant achievements in business, education or public service;

 possess the requisite intelligence, education and experience to make a significant contribution to the board of directors and bring
 a range of skills, diverse perspectives and backgrounds to its deliberations; and

 have the highest ethical standards, a strong sense of professionalism and intense dedication to serving the interests of the shareholders.

 The
nominating committee will consider a number of qualifications relating to management and leadership experience, background and integrity
and professionalism in evaluating a person's candidacy for membership on the board of directors. The nominating committee may require
certain skills or attributes, such as financial or accounting experience, to meet specific board needs that arise from time to time and
will also consider the overall experience and makeup of its members to obtain a broad and diverse mix of board members. The nominating
committee does not distinguish among nominees recommended by shareholders and other persons.

 Compensation
Committee

 We
have established a compensation committee of our board of directors. The members of our compensation committee are Mr. Fell, Mr. Peterson
and Mr. Saravanan, and Mr. Fell serves as chairman of the compensation committee.

 Under
the Nasdaq listing standards, we are required to have a compensation committee composed entirely of independent directors. Our board
of directors has determined that Mr. Fell, Mr. Peterson and Mr. Saravanan are independent under the Nasdaq listing standards.

 We
will adopt a compensation committee charter, which will detail the principal functions of the compensation committee, including:

 reviewing
 and approving on an annual basis the corporate goals and objectives relevant to our Chief Executive Officer's and Chief Financial
 Officer's and Chief Operating Officer's, evaluating our Chief Executive Officer's and Chief Financial Officer's
 performance in light of such goals and objectives and determining and approving the remuneration (if any) of our Chief Executive
 Officer and Chief Financial Officer based on such evaluation;

 reviewing
 and approving the compensation of all of our other Section 16 executive officers;

 reviewing
 our executive compensation policies and plans;

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

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

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

 producing
 a report on executive compensation to be included in our annual proxy statement; and

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

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

 Compensation
Committee Interlocks and Insider Participation

 None
of our executive officers currently serves, and in the past year has not served, as a member of the compensation committee of any entity
that has one or more executive officers serving on our board of directors.

 Code
of Ethics

 We
have adopted a Code of Ethics applicable to our directors, officers and employees. A copy of the Code of Ethics will be provided without
charge upon request from us. We intend to disclose any amendments to or waivers of certain provisions of our Code of Ethics in a Current
Report on Form 8-K.

 Conflicts
of Interest

 Under
Cayman Islands law, directors and officers owe the following fiduciary duties:

 duty
 to act in good faith in what the director or officer believes to be in the best interests of the company as a whole;

 duty
 to exercise powers for the purposes for which those powers were conferred and not for a collateral purpose;

 directors
 should not improperly fetter the exercise of future discretion;

 duty
 to exercise powers fairly as between different sections of shareholders;

 duty
 not to put themselves in a position in which there is a conflict between their duty to the company and their personal interests;
 and

 duty
 to exercise independent judgment.

 In
addition to the above, directors also owe a duty of care which is not fiduciary in nature. This duty has been defined as a requirement
to act as a reasonably diligent person having both the general knowledge, skill and experience that may reasonably be expected of a person
carrying out the same functions as are carried out by that director in relation to the company and the general knowledge skill and experience
of that director.

 As
set out above, directors have a duty not to put themselves in a position of conflict and this includes a duty not to engage in self-dealing,
or to otherwise benefit as a result of their position. However, in some instances what would otherwise be a breach of this duty can be
forgiven and/or authorized in advance by the shareholders provided that there is full disclosure by the directors. This can be done by
way of permission granted in the Charter or alternatively by shareholder approval at shareholder meetings.

 Certain
of our officers and directors presently have, and any of them in the future may have additional, fiduciary and contractual duties to
other entities. As a result, if any of our officers or directors become aware of a business combination opportunity which is suitable
for an entity to which he or she has then-current fiduciary or contractual obligations, then, subject to their fiduciary duties under
Cayman Islands law, he or she will need to honor such fiduciary or contractual obligations to present such business combination opportunity
to such entity, before we can pursue such opportunity. If these other entities decide to pursue any such opportunity, we may be precluded
from pursuing the same. However, we do not expect these duties to materially affect our ability to complete our initial business combination.
Our Charter provide that to the fullest extent permitted by applicable law: (i) no individual serving as a director or officer shall
have any duty, except and to the extent expressly assumed by contract, to refrain from engaging directly or indirectly in the same or
similar business activities or lines of business as us; and (ii) we renounce any interest or expectancy in, or in being offered an opportunity
to participate in, any potential transaction or matter which may be a corporate opportunity for any director or officer on the one hand,
and us, on the other.

 In
addition, our Sponsor, officers and directors may sponsor or form other special purpose acquisition companies similar to ours or may
pursue other business or investment ventures during the period in which we are seeking an initial business combination. Any such companies,
businesses or investments may present additional conflicts of interest in pursuing an initial business combination. However, we do not
believe that any potential conflicts would materially affect our ability to complete our initial business combination.

 Below
is a table summarizing the entities to which our executive officers and directors currently have fiduciary duties, contractual obligations
or other material management relationships:

 Individual

 Entity

 Entity's Business

 Affiliation

 Surendra Ajjarapu

 Tevogen Bio Holdings Inc.

 Biopharmaceutical Company

 Ocean Biomedical Inc.

 Biopharmaceutical Company

 Chief Executive Officer, Chairman and Director

 Power Up Acquisition Corp.

 Chief Executive Officer, Chairman and Director

 TRxADE HEALTH, INC.

 Health services IT company

 Chief Executive Officer,

 Chairman and Secretary

 Kano Energy Corp.

 Renewable natural gas

 Executive Chairman

 Howard Doss

 Power Up Acquisition Corp.

 Chief Financial Officer

 STARadio Corp.

 Radio broadcast company

 Radio Broadcast Company

 Michael Peterson

 Ocean Biomedical Inc.

 Biopharmaceutical Company

 Power Up Acquisition Corp.

 Nevo Motors, Inc.

 Commercializing a range-extender generator technology for the heavy-duty electric vehicle market

 President

 Indonesia Energy Corporation Limited

 Oil and gas company

 Director and Chairman of Audit Committee

 Venkatesh Srinivasan

 Micro Labs USA

 Pharmaceutical Company

 President

 Donald Fell

 Ocean Biomedical Inc.

 Biopharmaceutical Company

 Power Up Acquisition Corp.

 Foundation for Teaching Economics

 Workshop and educational resource company

 Professor and Institute Director

 University of Colorado, Colorado Springs

 University

 Adjunct Professor

 TRxADE HEALTH, INC.

 Health services IT company

 Siva Saravanan

 Wavestone US

 Management and Digital Consulting

 Chief Digital Officer and Managing Director

 NishTech Inc.

 Content Management and Digital Marketing

 Advisory Board Member

 Potential
investors should also be aware of the following other potential conflicts of interest:

 Our
 officers and directors are not required to, and will not, commit their full time to our affairs, which may result in a conflict of
 interest in allocating their time between our operations and our search for a business combination and their other businesses, on
 the other hand. We do not intend to have any full-time employees prior to the completion of our initial business combination. Each
 of our executive officers and directors is engaged in several other business endeavors for which he is entitled to substantial compensation
 and has substantial time commitments, and our executive officers and directors are not obligated to contribute any specific number
 of hours per week to our affairs.

 Our
 Sponsor subscribed for founder shares prior to the date of this Annual Report on Form 10-K.

 Our
 Sponsor and each member of our management team have entered into an agreement with us, pursuant to which they have agreed to waive
 their redemption rights with respect to any founder shares and public shares held by them in connection with (i) the completion of
 our initial business combination and (ii) a shareholder vote to approve an amendment to our Charter (A) that would modify the substance
 or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed in connection
 with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination
 within 24 months (or 30 months, subject to six one-month extensions) from the closing of our initial public offering or (B) with
 respect to any other provision relating to the rights of holders of our Class A ordinary shares.

our Sponsor has agreed to waive its rights to liquidating distributions from the Trust Account with respect to its founder shares if
we fail to complete our initial business combination within the prescribed time frame. If we do not complete our initial business combination
within the prescribed time frame, the private placement warrants will expire worthless. Except as described herein, our Sponsor and our
directors and executive officers have agreed not to transfer, assign or sell any of their founder shares until the earliest of (A) one
year after the completion of our initial business combination and (B) subsequent to our initial business combination, (x) if the closing
price of our Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share sub-divisions, share capitalizations,
reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days
after our initial business combination, or (y) the date on which we complete a liquidation, merger, share exchange, reorganization or
other similar transaction that results in all of our public shareholders having the right to exchange their ordinary shares for cash,
securities or other property. Except as described herein, the private placement warrants will not be transferable until 30 days following
the completion of our initial business combination. Because each of our executive officers and directors will own ordinary shares or
warrants directly or indirectly, they may have a conflict of interest in determining whether a particular target business is an appropriate
business with which to effectuate our initial business combination.

 Our
officers and directors may have a conflict of interest with respect to evaluating a particular business combination if the retention
or resignation of any such officers and directors is included by a target business as a condition to any agreement with respect to our
initial business combination. In addition, our Sponsor, officers and directors may sponsor, form or participate in other blank check
companies similar to ours during the period in which we are seeking an initial business combination. Any such companies may present additional
conflicts of interest in pursuing an acquisition target, particularly in the event there is overlap among investment mandates.

 We
are not prohibited from pursuing an initial business combination with a company that is affiliated with our Sponsor, officers, or directors.
In the event we seek to complete our initial business combination with a company that is affiliated with our Sponsor or any of our Sponsor,
officers, or directors, we, or a committee of independent directors, will obtain an opinion from an independent investment banking firm
or another independent entity that commonly renders valuation opinions that such initial business combination is fair to our company
from a financial point of view. We are not required to obtain such an opinion in any other context.

 Furthermore,
in no event will our Sponsor or any of our existing officers or directors, or their respective affiliates, be paid by us any finder's
fee, consulting fee or other compensation prior to, or for any services they render in order to effectuate, the completion of our initial
business combination. Further, commencing on the date our securities are first listed on Nasdaq, we will also reimburse our Sponsor or
an affiliate of our Sponsor for office space, secretarial and administrative services provided to us in the amount of $10,000 per month.

 We
cannot assure you that any of the above mentioned conflicts will be resolved in our favor.

 If
we seek shareholder approval, we will complete our initial business combination only if a majority of the ordinary shares, represented
in person or by proxy and entitled to vote thereon, voted at a shareholder meeting are voted in favor of the business combination. In
such case, our Sponsor and each member of our management team have agreed to vote their founder shares and public shares in favor of
our initial business combination.

 Limitation
on Liability and Indemnification of Officers and Directors

 Cayman
Islands law does not limit the extent to which a company's memorandum and articles of association may provide for indemnification
of officers and directors, except to the extent any such provision may be held by the Cayman Islands courts to be contrary to public
policy, such as to provide indemnification against willful default, willful neglect, civil fraud or the consequences of committing a
crime. Our Charter provide for indemnification of our officers and directors to the maximum extent permitted by law, including for any
liability incurred in their capacities as such, except through their own actual fraud, willful default or willful neglect. We will enter
into agreements with our directors and officers to provide contractual indemnification in addition to the indemnification provided for
in our Charter. We expect to purchase a policy of directors' and officers' liability insurance that insures our officers
and directors against the cost of defense, settlement or payment of a judgment in some circumstances and insures us against our obligations
to indemnify our officers and directors.

 Our
officers and directors have agreed to waive any right, title, interest or claim of any kind in or to any monies in the Trust Account,
and have agreed to waive any right, title, interest or claim of any kind they may have in the future as a result of, or arising out of,
any services provided to us and will not seek recourse against the Trust Account for any reason whatsoever (except to the extent they
are entitled to funds from the Trust Account due to their ownership of public shares). Accordingly, any indemnification provided will
only be able to be satisfied by us if (i) we have sufficient funds outside of the Trust Account or (ii) we consummate an initial business
combination.

 Our
indemnification obligations may discourage shareholders from bringing a lawsuit against our officers or directors for breach of their
fiduciary duty. These provisions also may have the effect of reducing the likelihood of derivative litigation against our officers and
directors, even though such an action, if successful, might otherwise benefit us and our shareholders. Furthermore, a shareholder's
investment may be adversely affected to the extent we pay the costs of settlement and damage awards against our officers and directors
pursuant to these indemnification provisions.

 We
believe that these provisions, the insurance and the indemnity agreements are necessary to attract and retain talented and experienced
officers and directors.

 Item
 11.

 Executive
 Compensation

 Executive
Officer and Director Compensation

 None
of our executive officers or directors have received any cash compensation for services rendered to us. Commencing on the date that our
securities are first listed on the Nasdaq through the earlier of consummation of our initial business combination and our liquidation,
we will reimburse our Sponsor or an affiliate of our Sponsor for office space, secretarial and administrative services provided to us
in the amount of $10,000 per month. Pursuant to our Administrative Services Agreement we may make payments or reimbursements to our Sponsor,
or their respective affiliates, for the reasonable salaries and other allocable costs of their employees or consultants, who may include
our officers or directors. In addition, our Sponsor, executive officers, directors or their respective affiliates will be reimbursed
for any out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses and
performing due diligence on suitable business combinations. Our audit committee will review on a quarterly basis all payments that were
made by us to our Sponsor, executive officers, directors or their affiliates. Any such payments prior to an initial business combination
will be made using funds held outside the Trust Account. Other than quarterly audit committee review of such reimbursements, we do not
expect to have any additional controls in place governing our reimbursement payments to our directors and executive officers for their
out-of-pocket expenses incurred in connection with our activities on our behalf in connection with identifying and consummating an initial
business combination.

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

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

 Item
 12.

 Security
 Ownership of Certain Beneficial Owners and management and Related Shareholder Matters

 The
following table sets forth information regarding the beneficial ownership of our ordinary shares as of March 11, 2023 based on
information obtained from the persons named below, with respect to the beneficial ownership of our ordinary shares, by:

 each
 person known by us to be the beneficial owner of more than 5% of our outstanding ordinary shares;

 each
 of our executive officers and directors that beneficially owns our ordinary share; and

 all
 our executive officers and directors as a group.

 In
the table below, percentage ownership is based on 509,341 Class A ordinary shares (which includes Class A ordinary shares that are underlying
the units) and 7,618,750 Class B ordinary shares outstanding as of March 11, 2023. Unless otherwise indicated, we believe that
all persons named in the table have sole voting and investment power with respect to all of our ordinary shares beneficially owned by
them. Voting power represents the combined voting power of Class A ordinary shares and Class B ordinary shares owned beneficially by
such person. On all matters to be voted upon, the holders of the Class A ordinary shares and the Class B ordinary shares vote together
as a single class. Currently, all of the Class B ordinary shares are convertible into Class A ordinary shares on a one-for-one basis.

 Class
 A Ordinary Shares

 Class
 B Ordinary Shares (2)

 Approximate

 Name
 and Address of Beneficial Owner)

 Number
 of
 Beneficially
 Owned

 Approximate

 Percentage of
 Class

 Number
 of
 Beneficially
 Owned

 Approximate

 Percentage
 of Class

 Percentage
 of
 Outstanding
 Ordinary

 VKSS
 Capital, LLC (1)(3)

 —

 —

 7,493,750

 98.3
 %

 92.2
 %

 Suren Ajjarapu (1)(3)

 —

 —

 7,493,750

 98.3
 %

 92.2

 Howard Doss (1)

 —

 —

 —

 —

 —

 Michael Peterson (1)

 —

 —

 —

 —

 —

 Donald Fell (1)

 —

 —

 —

 —

 —

 Srinivas Venkatesh (1)

 —

 —

 —

 —

 —

 Siva Srinivasan

 —

 —

 —

 —

 —

 All directors
 and executive officers as a group (6 individuals)

 —

 —

 7,493,750

 98.3
 %

 92.2
 %

 Other
 5% Shareholders

 Glazer Capital,
 LLC (4)

 197,154

 38.7
 %

 —

 —

 2.4
 %

 Saba Capital
 Management, L.P. (5)

 1,575,610

 309.3
 %

 —

 —

 19.4
 %

 Boaz R. Weinstein (5)

 1,575,610

 309.3
 %

 —

 —

 19.4
 %

 Fir Tree
 Capital Management LP (6)

 459,482

 90.2
 %

 —

 —

 5.7
 %

 Radcliffe
 Capital Management, L.P (7)

 103.5
 %

 —

 —

 6.5
 %

 RGC Management
 Company, LLC (7)

 103.5
 %

 —

 —

 6.5
 %

 Steven B.
 Katznelson (7)

 103.5
 %

 —

 —

 6.5
 %

 Christopher Hinkel (7)

 103.5
 %

 —

 —

 6.5
 %

 Radcliffe
 SPAC Master Fund, L.P. (7)

 103.5
 %

 —

 —

 6.5
 %

 Radcliffe
 SPAC GP, LLC (7)

 103.5
 %

 —

 —

 6.5
 %

 Cowen and
 Company, LLC (8)

 367,833

 72.2
 %

 —

 —

 4.5
 %

 Mizuho Financial
 Group, Inc. (9)

 540,110

 106.0
 %

 —

 —

 6.6
 %

 Antara Capital
 LP (10)

 452,224

 88.8
 %

 —

 —

 5.6
 %

 Antara Capital
 GP LLC (10)

 452,224

 88.8
 %

 —

 —

 5.6
 %

 Himanshu
 Gulati (10)

 452,224

 88.8
 %

 —

 —

 5.6
 %

 First Trust
 Merger Arbitrage Fund (11)

 530,960

 104.2
 %

 —

 —

 6.5
 %

 First Trust
 Capital Management L.P. (11)

 530,960

 104.2
 %

 —

 —

 6.5
 %

 First Trust
 Capital Solutions L.P. (11)

 530,960

 104.2
 %

 —

 —

 6.5
 %

 FTCS Sub
 GP LLC (11)

 530,960

 104.2
 %

 —

 —

 6.5
 %

 (1)

 Unless
 otherwise noted, the business address of each of the following entities or individuals is c/o Kernel Group Holdings, Inc., 515 Madison
 Avenue, Suite 8133, New York, NY 10022.

 (2)

 Interests
 shown consist solely of founder shares, classified as Class B ordinary shares. Such shares are convertible into Class A ordinary
 shares on a one-for-one basis, subject to adjustment.

 (3)

 Represents
 shares held by VKSS Capital, LLC, our Sponsor. Suren Ajjarapu is the managing member of our Sponsor and may be deemed to have beneficial
 ownership of the ordinary shares held directly by our Sponsor. Suren Ajjarapu disclaims any beneficial ownership of the reported
 shares other than to the extent of any pecuniary interest they may have therein, directly or indirectly.

 (4)

 According
 to a Schedule 13G/A filed with the SEC on February 14, 2024, on behalf of Glazer Capital, LLC. The business address of this shareholder
 is 2 Rousseau Street, San Francisco, California 94112. The number of shares held by Glazer Capital, LLC is reported as of February 14, 2024, as stated in the Schedule 13G/A,
which does not reflect any redemption of shares by Kernel in connection with the Extension Meeting - Third.

 (5)

 According
 to a Schedule 13G filed with the SEC on May 27, 2022, on behalf of Saba Capital Management, L.P., Boaz R. Weinstein and Saba Capital
 Management GP, LLC. The business address of these shareholders is 405 Lexington Avenue, 58th Floor, New York, New York 10174. The number of shares held by Saba Capital Management, L.P., Boaz R. Weinstein and Saba Capital Management GP, LLC
is reported as of May 27, 2022, as stated in the Schedule 13G, which does not reflect any redemption of shares by Kernel in connection
with the Extension Meeting, Extension Meeting – Second, and Extension Meeting – Third.

 (6)

 According
 to a Schedule 13G/A filed with the SEC on February 14, 2024, on behalf of Fir Tree Capital Management LP. The business address of
 this shareholder is 55 West 46th Street, 29th Floor New York, NY 10036. The number of shares held by Fir Tree Capital Management LP is reported as of February 14, 2024, as stated in the
Schedule 13G/A, which does not reflect any redemption of shares by Kernel in connection with the Extension Meeting - Third.

 (7)

 According
 to a Schedule 13G filed with the SEC on February 8, 2023, on behalf of Radcliffe Capital Management, L.P., RGC Management Company,
 LLC, Steven B. Katznelson, Christopher Hinkel, Radcliffe SPAC Master Fund, L.P., and Radcliffe SPAC GP, LLC. The business address of
 these shareholders is 50 Monument Road, Suite 300, Bala Cynwyd, PA 19004. The number of shares held by Radcliffe Capital Management,
 L.P., RGC Management Company, LLC, Steven B. Katznelson, Christopher Hinkel, Radcliffe SPAC Master Fund, L.P., and Radcliffe SPAC
 GP, LLC is reported as of February 14, 2024, as stated in the Schedule 13G/A, which does not reflect any redemption of shares by
 Kernel in connection with the Extension Meeting, Extension Meeting – Second, and Extension Meeting – Third.

 (8)

 According to a Schedule
 13G filed with the SEC on February 2, 2024, on behalf of Cowen and Company, LLC. The business address of this shareholder is 599
 Lexington Ave., New York, NY 10022. The number of shares held by Cowen and Company, LLC is reported as of February 2, 2024, as stated
 in the Schedule 13G, which does not reflect any redemption of shares by Kernel in connection with the Extension Meeting - Third.

 (9)

 According to a Schedule
 13G filed with the SEC on February 13, 2024, on behalf of Mizuho Financial Group, Inc. The business address of this shareholder is
 1–5–5, Otemachi, Chiyoda–ku, Tokyo 100–8176, Japan. The number of shares held by Mizuho Financial Group,
 Inc. is reported as of February 13, 2024, as stated in the Schedule 13G, which does not reflect any redemption of shares by Kernel
 in connection with the Extension Meeting - Third.

 (10)

 According to a Schedule
 13G filed with the SEC on February 14, 2024, on behalf of Antara Capital LP, Antara Capital GP LLC, and Himanshu Gulati. The business
 address of these shareholders is 55 Hudson Yards, 47th Floor, Suite C, New York, NY 10001. The number of shares held by Antara Capital
 LP, Antara Capital GP LLC, and Himanshu Gulati is reported as of February 14, 2024, as stated in the Schedule 13G, which does not
 reflect any redemption of shares by Kernel in connection with the Extension Meeting - Third.

 (11)

 According to a Schedule
 13G filed with the SEC on February 14, 2024, on behalf of First Trust Merger Arbitrage Fund ("VARBX"), First Trust Capital
 Management L.P. ("FTCM"), First Trust Capital Solutions L.P. ("FTCS"), and FTCS Sub GP LLC ("Sub GP").
 The principal business address of FTCM, FTCS and Sub GP is 225 W. Wacker Drive, 21st Floor, Chicago, IL 60606. The principal business
 address of VARBX is 235 West Galena Street, Milwaukee, WI 53212. The number of shares held by VARBX, FTCM, FTCS and Sub GP is reported
 as of February 14, 2024, as stated in the Schedule 13G, which does not reflect any redemption of shares by Kernel in connection with
 the Extension Meeting - Third.

 The
table above does not include the ordinary shares underlying the Private Placement Warrants held or to be held by our Sponsor because
these securities are not exercisable within 60 days of the date of this Report.

 Changes
in Control

 None.

 Item
 13.

 Certain
 Relationships and Related Transactions, and Director Independence

Party Transactions

 Founder

 On
November 19, 2020, the Sponsor paid an aggregate of $25,000 for certain expenses on behalf of us in exchange for issuance of 5,750,000
Class B ordinary shares (the "Founder Shares"). On January 11, 2021, we effected a 1 for 1.25 forward stock split of the
Founder Shares that increased the number of outstanding Founder Shares from 5,750,000 to 7,187,500 shares, and the Sponsor transferred
an aggregate of 75,000 Founder Shares to the independent directors and an aggregate of 50,000 Founder Shares to the Former Advisors.
On February 2, 2021, the Company effected a 1 for 1.06 forward stock split of the Founder Shares that increased the number of outstanding
Founder Shares from 7,187,500 to 7,618,750 shares and resulted in the Sponsor holding 7,493,750 Founder Shares. The Sponsor agreed to
forfeit up to an aggregate of 993,750 Founder Shares to the extent that the option to purchase additional Units was not exercised in
full by the underwriters or was reduced, so that the Founder Shares would represent 20% of our issued and outstanding shares after the
Initial Public Offering. On February 5, 2021, the underwriter fully exercised its over-allotment option; thus, these 993,750 Founder
Shares are no longer subject to forfeiture.

 The
Sponsor agreed not to transfer, assign or sell any of their Founder Shares until the earlier to occur of: (A) one year after the completion
of the initial Business Combination and (B) subsequent to the initial Business Combination, (x) if the closing price of the Class A ordinary
shares equals or exceeds $12.00 per share (as adjusted for share splits, share capitalizations, reorganizations, recapitalizations and
the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the initial Business Combination,
or (y) the date on which we complete a liquidation, merger, share exchange, reorganization or other similar transaction that results
in all of the Public Shareholders having the right to exchange their ordinary shares for cash, securities or other property.

 On
December 28, 2022, Kernel entered into a purchase agreement (the "Purchase Agreement") with the Original Sponsor, which held
7,493,750 Founder Shares that were issued to the Original Sponsor prior to our IPO, and 8,750,000 Private Placement Warrants, and the
Sponsor, pursuant to which the Original Sponsor transferred to the Sponsor all of the Founder Shares and Private Placement Warrants.

 Private
Placement Warrants

with the closing of the Initial Public Offering, we consummated the Private Placement of 8,750,000 Private Placement Warrants, at a price
of $1.00 per Private Placement Warrant with the Sponsor, generating gross proceeds of approximately $8.8 million.

 Each
whole Private Placement Warrant is exercisable for one whole Class A ordinary share at a price of $11.50 per share. A portion of the
proceeds from the sale of the Private Placement Warrants to the Sponsor was added to the proceeds from the Initial Public Offering held
in the Trust Account. If we do not complete a Business Combination within the Combination Period, the Private Placement Warrants will
expire worthless. The Private Placement Warrants will be non-redeemable for cash and exercisable on a cashless basis so long as they
are held by the Sponsor or its permitted transferees.

 The
Sponsor and our officers and directors agreed, subject to limited exceptions, not to transfer, assign or sell any of their Private Placement
Warrants until 30 days after the completion of the initial Business Combination.

Party Loans

 On
November 19, 2020, the Sponsor agreed to loan us up to $300,000 to be used for the payment of costs related to the Initial Public Offering
pursuant to a promissory note (the "Note"). The Note was non-interest bearing, unsecured and due upon the closing of the
Initial Public Offering. We borrowed $77,000 outstanding under the Note. We repaid approximately $13,000 on February 5, 2021 and repaid
the remaining amount of approximately $64,000 on February 10, 2021. Subsequent to the repayment, the facility was no longer available
to us.

 In
addition, in order to fund working capital deficiencies or finance transaction costs in connection with a Business Combination, the Sponsor
or an affiliate of the Sponsor, or certain of our officers and directors may, but are not obligated to, loan us funds as may be required
("Working Capital Loans"). If we complete a Business Combination, we may repay the Working Capital Loans out of the proceeds
of the Trust Account released to us. Otherwise, the Working Capital Loans may be repaid only out of funds held outside the Trust Account.
In the event that a Business Combination does not close, we may use a portion of proceeds held outside the Trust Account to repay the
Working Capital Loans but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. The Working Capital
Loans would either be repaid upon consummation of a Business Combination, without interest, or, at the lender's discretion, up
to $1.5 million of such Working Capital Loans may be convertible into warrants of the post Business Combination entity at a price of
$1.00 per warrant. The warrants would be identical to the Private Placement Warrants. Except for the foregoing, the terms of such Working
Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans. As of December 31, 2023 and
2022, we had no borrowings under the Working Capital Loans.

 Administrative
Services Agreement

 Commencing
on the date that our securities were first listed on Nasdaq through the earlier of consummation of the initial Business Combination or
its liquidation, we agreed to pay the Sponsor $10,000 per month for office space, administrative and support services. For the years
ended December 31, 2023 and 2021, we incurred $120,000 and $110,000, respectively, in expenses in connection with such services, of which
$170,000 and $50,000, respectively, were outstanding and included in related party accrued expenses as reflected in the accompanying
consolidated balance sheets.

 Commitments
and Contractual Obligations

 Registration
and Shareholder Rights

 The
holders of the Founder Shares, Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans (and
any Class A ordinary shares issuable upon the exercise of the Private Placement Warrants) were entitled to registration rights pursuant
to a registration and shareholder rights agreement signed upon the effective date of the Initial Public Offering. The holders of these
securities were entitled to make up to three demands, excluding short form demands, that we register such securities. In addition, the
holders will be entitled to certain demand and "piggy-back" registration rights with respect to registration statements filed
subsequent to the completion of the initial Business Combination. We will bear the expenses incurred in connection with the filing of
any such registration statements.

 Underwriting
Agreement

 We
granted the underwriters a 45-day option from the final date of the prospectus relating to the Initial Public Offering to purchase up
to 3,975,000 additional Units at the Initial Public Offering price less the underwriting discounts and commissions. On February 5, 2021,
the underwriter fully exercised its over-allotment option.

 The
underwriters were entitled to an underwriting discount of $0.20 per unit, approximately $6.1 million in the aggregate, paid upon the
closing of the Initial Public Offering. In addition, $0.35 per unit, or approximately $10.7 million in the aggregate will be payable
to the underwriters for deferred underwriting commissions. The deferred fee will become payable to the underwriters from the amounts
held in the Trust Account solely in the event that we complete a Business Combination, subject to the terms of the underwriting agreement.

 Policy
for Approval of Related Party Transactions

 The
audit committee of our board of directors will adopt a charter, providing for the review, approval and/or ratification of "related
party transactions," which are those transactions required to be disclosed pursuant to Item 404 of Regulation S-K as promulgated
by the SEC, by the audit committee. At its meetings, the audit committee shall be provided with the details of each new, existing, or
proposed related party transaction, including the terms of the transaction, any contractual restrictions that the company has already
committed to, the business purpose of the transaction, and the benefits of the transaction to the company and to the relevant related
party. Any member of the committee who has an interest in the related party transaction under review by the committee shall abstain from
voting on the approval of the related party transaction, but may, if so requested by the chairman of the committee, participate in some
or all of the committee's discussions of the related party transaction. Upon completion of its review of the related party transaction,
the committee may determine to permit or to prohibit the related party transaction.

 Item
 14.

 Principal
 Accountant Fees and Services

 The
firm of WithumSmith+Brown, PC, or Withum, acts as our independent registered public accounting firm. The following is a summary of fees
paid to Withum for services rendered.

 Audit
Fees. Audit fees consist of fees billed for professional services rendered for the audit and review of our financial statements and
services that are normally provided by Withum in connection with regulatory filings. The aggregate fees for WithumSmith+Brown, PC for
audit fees, inclusive of required filings with the SEC for the years ended December 31, 2023 and 2022, totaled $130,728 and $151,140,
respectively.

 Audit-Related
Fees. Audit-related fees consist of fees billed for assurance and related services that are reasonably related to performance of
the audit or review of the financial statements and are not reported under "Audit Fees." These services include attest services
that are not required by statute or regulation and consultation concerning financial accounting and reporting standards. During the years
ended December 31, 2023 and 2022, we did not pay WithumSmith+Brown, PC any audit-related fees.

 Tax
Fees. Tax fees consist of fees billed for professional services relating to tax compliance, tax planning and tax advice. During the
years ended December 31, 2023 and 2022, we paid WithumSmith+Brown, PC tax fees of $3,605 and $4,160, respectively.

 All
Other Fees. All other fees consist of fees billed for all other services. During the years ended December 31, 2023 and 2022, we did
not pay WithumSmith+Brown, PC any other fees.

 PART
IV

 Item
 15.

 Exhibits,
 Financial Statement Schedules

 (a)

 The
 following documents are filed as part of this Annual Report:

 (1)

 Statements

 (2)

 Exhibits

 We
hereby file as part of this Annual Report the exhibits listed in the attached Exhibit Index.

 Exhibit
 No.

 Description

 2.1

 Business Combination Agreement, dated as of March 3, 2023, by and among Kernel Group Holdings, Inc., AIRO Group, Inc., Kernel Merger Sub, Inc., AIRO Merger Sub, Inc., VKSS Capital, LLC, Seller Representative, and AIRO Group Holdings, Inc. (incorporated by reference to the registrant's Form 8-K, Exhibit 2.1, filed with the SEC on March 6, 2023)

 2.2

 First Amendment to Business Combination Agreement, dated as of August 29, 2023, by and among Kernel Group Holdings, Inc., AIRO Group, Inc., Kernel Merger Sub, Inc., AIRO Merger Sub, Inc., VKSS Capital, LLC, Seller Representative, and AIRO Group Holdings, Inc. (incorporated by reference to the registrant's Form 8-K, Exhibit 2.1, filed with the SEC on August 30, 2023)

 2.3

 Second Amendment to Business Combination Agreement, dated as of January 16, 2024, by and among Kernel Group Holdings, Inc., AIRO Group, Inc., Kernel Merger Sub, Inc., AIRO Merger Sub, Inc., VKSS Capital, LLC, Seller Representative, and AIRO Group Holdings, Inc. (incorporated by reference to the registrant's Form 8-K, Exhibit 2.1, filed with the SEC on January 16, 2024)

 2.4

 Third Amendment to Business Combination Agreement, dated as of February 5, 2024, by and among Kernel Group Holdings, Inc., AIRO Group, Inc., Kernel Merger Sub, Inc., AIRO Merger Sub, Inc., VKSS Capital, LLC, Seller Representative, and AIRO Group Holdings, Inc. (incorporated by reference to the registrant's Form 8-K, Exhibit 2.1, filed with the SEC on February 6, 2024)

 3.1

 Amended and Restated Memorandum and Articles of Association of the Company. (incorporated by reference to the registrant's Form 8-K, Exhibit 3.1, filed with the SEC on February 6, 2021)

 3.2

 Amended and Restated Memorandum and Articles of Association of the Company dated August 3, 2023. (incorporated by reference to the registrant's Form 8-K, Exhibit 3.1, filed with the SEC on August 4)

 3.3

 Amendment to the Amended and Restated Articles of Association of the Company dated February 1, 2024. (incorporated by reference to the registrant's Form 8-K, Exhibit 3.1, filed with the SEC on February 6, 2024)

 4.1

 Warrant Agreement between Continental Stock Transfer & Trust Company and the Company. (incorporated by reference to the registrant's Current Report on Form 8-K, filed with the SEC on February 5, 2021)

 4.2

 Description of Company's Securities.

 10.1

 Private Placement Warrants Purchase Agreement between the Company and the Sponsor. (incorporated by reference to the registrant's Current Report on Form 8-K, filed with the SEC on February 5, 2021)

 10.2

 Investment Management Trust Agreement between Continental Stock Transfer & Trust Company and the Company. (incorporated by reference to the registrant's Current Report on Form 8-K, filed with the SEC on February 5, 2021)

 10.3

 Amendment No. 1 to Investment Management Trust Agreement dated February 3, 2023 by and between the Company and Continental Stock Transfer and Trust Company (incorporated by reference to the registrant's Current Report on Form 8-K, filed with the SEC on February 6, 2023).

 10.4

 Amendment No. 2 to Investment Management Trust Agreement dated August 3, 2023 by and between Kernel Group Holdings, Inc. and Continental Stock Transfer and Trust Company (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed August 4, 2023).

 10.5

 Amendment No. 3 to Investment Management Trust Agreement dated February 1, 2024 by and between Kernel Group Holdings, Inc. and Continental Stock Transfer and Trust Company (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed February 6, 2024).

 10.6

 Registration and Shareholder Rights Agreement among Company and the Sponsor. (incorporated by reference to the registrant's Current Report on Form 8-K, filed with the SEC on February 5, 2021)

 10.7

 Letter Agreement between the Company and the Sponsor. (incorporated by reference to the registrant's Current Report on Form 8-K, filed with the SEC on February 5, 2021)

 10.8

 Administrative Services Agreement between the Registrant and the sponsor. (incorporated by reference to the registrant's Current Report on Form 8-K, filed with the SEC on February 5, 2021)

 10.9

 Purchase Agreement, by, between, and among VKSS Capital, LLC, Kernel Group Holdings, Inc., and Kernel Capital Holdings, LLC (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed January 3, 2023).

 10.10

 Form of Loan and Transfer Agreement (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed November 7, 2023).

 31.1*

 Certification of the Chief Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a).

 31.2*

 Certification of the Chief Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a).

 32.1**

 Certification of the Chief Executive Officer required by Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. 1350

 32.2**

 Certification of the Chief Financial Officer required by Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. 1350

 97*

 Kernel Group Holdings, Inc. Clawback Policy

 101.INS

 Instance Document

 101.SCH

 Taxonomy Extension Schema

 101.CAL

 Taxonomy Extension Calculation Linkbase

 101.DEF

 Taxonomy Extension Definition Linkbase

 101.LAB

 Taxonomy Extension Label Linkbase

 101.PRE

 Taxonomy Extension Presentation Linkbase

 Cover

 *

 Filed
 herewith

 **

 Furnished
 herewith

 Item
 16.

 Form
 10-K Summary

 None.

 SIGNATURES

to the requirements of Section 13 or 15(d) of the Securities Act of 1934, the registrant has duly caused this Annual Report on Form 10-K
to be signed on its behalf by the undersigned, thereunto duly authorized.

 March

 /s/ Suren Ajjarapu

 Name:

 Suren
 Ajjarapu

 Title:

 Chief
 Executive Officer

 (Principal
 Executive Officer)

to the requirements of the Securities Exchange Act of 1934, this Annual Report on Form 10-K has been signed below by the following persons
on behalf of the registrant and in the capacities and on the dates indicated.

 /s/
 Suren Ajjarapu

 Chief
 Executive Officer and Chairman

 March

 Suren
 Ajjarapu

 (Principal
 Executive Officer)

 /s/
 Howard Doss

 Chief
 Financial Officer and Director

 March

 Doss

 (Principal
 Financial and Accounting Officer)

 /s/
 Michael Peterson

 March

 Peterson

 /s/
 Donald Fell

 March

 Fell

 /s/
 Venkatesh Srinivasan

 March

 Srinivasan

 /s/
 Siva Saravanan

 March

 Siva
 Saravanan

TO FINANCIAL STATEMENTS

 Page

 Report of Independent Registered Public Accounting Firm

 Statements:

 Consolidated Balance Sheets as of December 31, 2023 and 2022

 Consolidated Statements of Operations for the Years Ended December 31, 2023 and 2022

 Consolidated Statements of Changes in Shareholders' Deficit for the Years Ended December 31, 2023 and 2022

 Consolidated Statements of Cash Flows for the Years Ended December 31, 2023 and 2022

 Notes to Financial Statements

 F- 1

 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 To
the Shareholders and the Board of Directors of

 Kernel
Group Holdings, Inc.:

 Opinion
on the Financial Statements

 We
have audited the accompanying consolidated balance sheets of Kernel Group Holdings, Inc. (the
"Company") as of December 31, 2023 and 2022, the related consolidated statements of operations, changes in
shareholders' deficit and cash flows for the years then ended, and the related notes (collectively referred to as the
"consolidated financial statements"). In our opinion, the consolidated financial statements present fairly, in all
material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its
cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of
America.

 Going
Concern

 The
accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As
discussed in Note 1 to the consolidated financial statements, if the Company is unable to raise additional funds to alleviate
liquidity needs and complete a business combination by August 5, 2024 then the Company will cease all operations except for the
purpose of liquidating. The liquidity condition and date for mandatory liquidation and subsequent dissolution raise substantial
doubt about the Company's ability to continue as a going concern. Management's plans in regard to these matters are also
described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this
uncertainty.

 Basis
for Opinion

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

 We
conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to
error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial
reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for
the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting.
Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of
the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such
procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial
statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well
as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable
basis for our opinion.

 /s/ WithumSmith+Brown, PC

 We
 have served as the Company's auditor since 2020.

 New
 York, New York

 March

 PCAOB
 Number 100

 F- 2

 CONSOLIDATED
BALANCE SHEETS

 December 31, 2023

 December 31, 2022

 Assets

 Current assets:

 Cash

 $

 $
 93,095

 Prepaid expenses

 27,148

 42,022

 Total current assets

 27,952

 135,117

 Cash and investments held in Trust Account

 67,819,662

 309,234,766

 Total Assets

 $
 67,847,614

 $
 309,369,883

 Liabilities and Shareholders' Deficit:

 Current liabilities:

 Accounts payable

 $
 3,729,095

 $
 848,420

 Accrued expenses and other current liabilities

 50,615

 1,949,715

 Accrued expenses - related party

 290,000

 170,000

 Promissory note - related party

 2,215,368

 —

 Convertible promissory notes, net of discount

 1,565,113

 —

 Total current liabilities

 7,850,191

 2,968,135

 Deferred underwriting commissions

 —

 10,666,250

 Warrant liabilities

 479,750

 174,354

 Total Liabilities

 8,329,941

 13,808,739

 Commitments and Contingencies

 -

 Class A ordinary shares subject to possible redemption, $ 0.0001 par value; 6,315,949 and 30,475,000 shares issued and outstanding at approximately $ 10.72 and $ 10.14 per share redemption value as of December 31, 2023 and December 31, 2022, respectively

 67,719,662

 309,134,766

 Shareholders' Deficit:

 Preference shares, $ 0.0001 par value 1,000,000 shares authorized none issued or outstanding as of December 31, 2023 and December 31, 2022

 —

 —

 Class A ordinary shares, $ 0.0001 par value; 500,000,000 shares authorized; no non-redeemable shares issued or outstanding as of December 31, 2023 and December 31, 2022

 —

 —

 Class B ordinary shares, $ 0.0001 par value; 50,000,000 shares authorized; 7,618,750 shares issued and outstanding as of December 31, 2023 and December 31, 2022

 Ordinary shares

 Additional paid-in capital

 —

 —

 Accumulated deficit

 ( 8,202,751
)

 ( 13,574,384
)

 Total Shareholders' Deficit

 ( 8,201,989
)

 ( 13,573,622
)

 Total Liabilities and Shareholders' Deficit

 $
 67,847,614

 $
 309,369,883

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

 F- 3

 CONSOLIDATED
STATEMENTS OF OPERATIONS

 2023

 2022

 For the Years Ended December 31,

 2023

 2022

 General and administrative expenses

 $
 2,449,228

 $
 992,819

 Administrative fees - related party

 120,000

 120,000

 Loss from operations

 ( 2,569,228
)

 ( 1,112,819
)

 Other income (expense):

 Unrealized (loss) gain from change in fair value of warrant liabilities

 ( 305,396
)

 12,299,146

 Income from cash and investments held in Trust Account

 2,260,223

 4,469,702

 Gain on waiver of deferred underwriting commissions by underwriter allocated to Public Warrants

 755,346

 —

 Unrealized loss on fair value of derivative liabilities - forward purchase agreement

 ( 6,261,728
)

 —

 Interest expense - amortization of debt discount

 ( 1,415,773
)

 —

 Interest expense

 ( 4,880
)

 —

 Total other income (expense), net

 $
 ( 4,972,208
)

 $

 Net (loss) income

 $
 ( 7,541,436

)

 $

 Basic and diluted weighted average shares outstanding, Class A ordinary shares

 12,726,377

 30,475,000

 Basic and diluted net (loss) income per share, Class A ordinary shares

 $
 ( 0.37
)

 $
 0.41

 Basic and diluted weighted average shares outstanding, Class B ordinary shares

 Basic and diluted net (loss) income per share, Class B ordinary shares

 $
 ( 0.37
)

 $
 0.41

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

 F- 4

 CONSOLIDATED
STATEMENTS OF CHANGES IN SHAREHOLDERS' DEFICIT

 YEAR
ENDED DECEMBER 31, 2023

 Capital

 Ordinary

 Additional

 Total

 Class
 A

 Class
 B

 Paid-in

 Accumulated

 Shareholders'

 Capital

 Balance
 at January 1, 2023

 —

 $
 —

 $

 $
 —

 $
 ( 13,574,384
)

 $
 ( 13,573,622
)

 Proceeds allocated to Share Rights of convertible promissory note - related party

 —

 —

 —

 —

 1,550,660

 —

 1,550,660

 Remeasurement of Class A ordinary shares to redemption amount

 —

 —

 —

 —

 ( 1,550,660
)

 6,651,341

 5,100,681

 Extinguishment of forward purchase agreement

 —

 —

 —

 —

 —

 Fair value of equity contract, mutual termination agreement

 53,100

 53,100

 Fair value of equity contract, mutual termination agreement

 ( 53,100
)

 ( 53,100
)

 Net loss

 —

 —

 —

 —

 —

 ( 7,541,436
)

 ( 7,541,436
)

 Balance at December 31, 2023

 —

 $
 —

 $

 $
 —

 $
 ( 8,202,751
)

 $
 ( 8,201,989
)

 YEAR
ENDED DECEMBER 31, 2022

 Ordinary

 Additional

 Total

 Class
 A

 Class
 B

 Paid-in

 Accumulated

 Shareholders'

 Capital

 Balance at January 1, 2022

 —

 $
 —

 $

 $
 —

 $
 ( 24,845,647
)

 $
 ( 24,844,885
)

 Balance

 —

 $
 —

 $

 $
 —

 $
 ( 24,845,647
)

 $
 ( 24,844,885
)

 Remeasurement of Class A ordinary shares to redemption amount

 —

 —

 —

 —

 —

 ( 4,384,766
)

 ( 4,384,766
)

 Net income

 —

 —

 —

 —

 —

 Net income (loss)

 —

 —

 —

 —

 —

 Balance at December 31, 2022

 —

 $
 —

 $

 $
 —

 $
 ( 13,574,384
)

 $
 ( 13,573,622
)

 Balance

 —

 $
 —

 $

 $
 —

 $
 ( 13,574,384
)

 $
 ( 13,573,622
)

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

 F- 5

 CONSOLIDATED
STATEMENTS OF CASH FLOWS

 2023

 2022

 For the Years Ended December 31,

 2023

 2022

 Cash Flows from Operating Activities:

 Net (loss) income

 $
 ( 7,541,436
)

 $

 Adjustments to reconcile net (loss) income to net cash used in operating activities:

 Income from cash and investments held in Trust Account

 ( 2,260,223
)

 ( 4,469,702
)

 Interest expense - amortization of debt discount

 1,415,773

 —

 Unrealized loss (gain) from change in fair value of warrant liabilities

 305,396

 ( 12,299,146
)

 Unrealized loss on fair value of derivative liabilities - forward purchase agreement

 —

 Gain on waiver of deferred underwriting commissions by underwriter allocated to Public Warrants

 ( 755,346
)

 —

 Changes in operating assets and liabilities:

 Prepaid expenses

 14,874

 402,481

 Accounts payable

 2,880,675

 50,631

 Accrued expenses and other current liabilities

 ( 1,899,100
)

 227,857

 Accrued expenses - related party

 120,000

 120,000

 Net cash used in operating activities

 ( 1,457,659
)

 ( 311,850
)

 Cash Flows from Investing Activities:

 Advances to Trust Account

 ( 2,550,000
)

 —

 Proceeds from Trust Account for payment to redeeming shareholders

 246,225,328

 —

 Net cash provided by investing activities

 243,675,328

 —

 Cash Flows from Financing Activities:

 Proceeds from promissory note - related party

 2,215,368

 —

 Proceeds from convertible promissory note

 1,700,000

 —

 Payment to redeeming shareholders

 ( 246,225,328
)

 —

 Offering costs paid

 —

 ( 70,000
)

 Net cash used in financing activities

 ( 242,309,960
)

 ( 70,000
)

 Net Change in Cash

 ( 92,291
)

 ( 381,850
)

 Cash - Beginning of the year

 93,095

 474,945

 Cash - End of the year

 $

 $
 93,095

 Non-cash investing and financing activities:

 Waiver of deferred underwriting commissions by underwriter

 $
 9,910,904

 $
 —

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

 F- 6

 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 NOTE
1. DESCRIPTION OF ORGANIZATION, BUSINESS OPERATIONS, RISKS AND UNCERTAINTIES AND GOING CONCERN

 Kernel
Group Holdings, Inc. (the "Company") is a blank check company incorporated as a Cayman Islands exempted company on November
10, 2020. The Company was incorporated for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization
or similar Business Combination with one or more businesses that the Company has not yet identified ("Business Combination").

 As
of December 31, 2023, the Company had not commenced any operations. All activity from November 10, 2020 through December 31, 2023 relates
to the Company's formation and the preparation of its initial public offering ("Initial Public Offering"), as described
below, and since the closing of the Initial Public Offering, the search for a target for the Business Combination. The Company will not
generate any operating revenues until after the completion of its initial Business Combination, at the earliest. The Company will generate
non-operating income in the form of dividend income, interest income or gains on investments held in a Trust Account ("Trust Account")
from the proceeds derived from the Initial Public Offering.

 The
Company's sponsor was Kernel Capital Holdings, LLC, a Delaware limited liability company (the "Original Sponsor").
The registration statement for the Company's Initial Public Offering was declared effective on February 2, 2021. On February 5,
2021, the Company consummated its Initial Public Offering of 30,475,000 units (the "Units" and, with respect to the Class
A ordinary shares included in the Units being offered, the "Public Shares"), including 3,975,000 additional Units to cover
the underwriters' over-allotment (the "Over-Allotment Units"), at $ 10.00 per Unit, generating gross proceeds of approximately
$ 304.8 million, and incurring offering costs of approximately $ 17.4 million, of which approximately $ 10.7 million was for deferred underwriting
commissions. On May 24, 2023, the underwriters agreed to waive their rights to their portion of the fee payable by the Company for deferred
underwriting commissions, with respect to any potential Business Combination of the Company (see Note 6).

with the closing of the Initial Public Offering, the Company consummated a private placement (the "Private Placement") of
 8,750,000 warrants (the "Private Placement Warrants"), at a price of $ 1.00 per Private Placement Warrant with the Original
Sponsor, generating gross proceeds of approximately $ 8.8 million, which is discussed in Note 4.

 On
December 28, 2022, the Company entered into a purchase agreement with the Original Sponsor, and VKSS Capital, LLC, a Delaware corporation
(the "New Sponsor" or "Sponsor"), pursuant to which the New Sponsor, or an entity designated by the New Sponsor,
will purchase from the Original Sponsor 7,618,750 Class B ordinary shares of the Company, par value $ 0.0001 per share and 8,750,000 Private
Placement Warrants, each of which is exercisable to purchase one Class A ordinary share of the Company, par value $ 0.0001 per share,
for an aggregate purchase price of $ 1.00 payable at the time the Company effects the initial Business Combination. Upon the closing of
the initial Business Combination, New Sponsor shall also convey 2,000,000 Class B ordinary shares to the equityholders of the Original
Sponsor, as of December 28, 2022, pro rata based on the equityholders' underlying interest in the Company's Class B ordinary
shares as of December 28, 2022 (see Note 4).

 Upon
the closing of the Initial Public Offering and the Private Placement, approximately $ 304.8 million ($ 10.00 per Unit) of the net proceeds
of the Initial Public Offering and certain of the proceeds of the Private Placement were placed in the Trust Account with Continental
Stock Transfer & Trust Company ("Continental") acting as trustee and has been invested in United States "government
securities" within the meaning of Section 2(a)(16) of the Investment Company Act of 1940 (the "Investment Company Act"),
as amended, having a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under
the Investment Company Act which invest only in direct U.S. government treasury obligations, as determined by the Company, until the
earlier of (i) the completion of a Business Combination and (ii) the distribution of the Trust Account as described below.

 F- 7

 NOTES

 DECEMBER
31, 2023

 The
Company's management has broad discretion with respect to the specific application of the net proceeds of its Initial Public Offering
and the sale of Private Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward
consummating a Business Combination. The Company's initial Business Combination must be with one or more operating businesses or
assets with a fair market value equal to at least 80% of the net assets held in the Trust Account (excluding the deferred underwriting
commissions and taxes payable on the interest earned on the Trust Account) at the time the Company signs a definitive agreement in connection
with 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 business or otherwise acquires a controlling interest
in the target business sufficient for it not to be required to register as an investment company under the Investment Company Act.

 The
Company will provide its holders of the Public Shares (the "Public Shareholders") 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 general meeting called to
approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek shareholder approval
of a Business Combination or conduct a tender offer will be made by the Company. The Public Shareholders 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 $ 10.00 per share, plus any
pro rata interest earned on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations).
The per-share amount to be distributed to Public Shareholders who redeem their Public Shares will not be reduced by the deferred underwriting
commissions the Company will pay to the underwriters (as discussed in Note 6). These Public Shares will be recorded at a redemption value
and classified as temporary equity upon the completion of the Initial Public Offering, in accordance with Accounting Standards Codification
("ASC") Topic 480, "Distinguishing Liabilities from Equity." In such case, the Company will proceed with a Business
Combination if the Company has net tangible assets of at least $ 5,000,001 upon such consummation of a Business Combination and a majority
of the shares voted are voted in favor of the Business Combination. If a shareholder vote is not required by applicable law or stock
exchange listing requirements and the Company does not decide to hold a shareholder vote for business or other reasons, the Company will,
pursuant to the amended and restated memorandum and articles of association (the "Amended and Restated Memorandum and Articles
of Association"), conduct the redemptions pursuant to the tender offer rules of the U.S. Securities and Exchange Commission (the
"SEC"), and file tender offer documents with the SEC prior to completing a Business Combination. If, however, a shareholder
approval of the transactions is required by applicable law or stock exchange listing requirements, or the Company decides to obtain shareholder
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. Additionally, each Public Shareholder may elect to redeem their Public Shares
irrespective of whether they vote for or against the proposed transaction or whether they were a Public Shareholder on the record date
for the general meeting held to approve the proposed transaction. If the Company seeks shareholder approval in connection with a Business
Combination, the holders of the Founder Shares (as defined in Note 4) prior to this Initial Public Offering (the "Initial Shareholders")
agreed to vote their Founder Shares and any Public Shares purchased during or after the Initial Public Offering in favor of a Business
Combination. In addition, the Initial Shareholders agreed to waive their redemption rights with respect to their Founder Shares and Public
Shares in connection with the completion of a Business Combination. In addition, the Company agreed not to enter into a definitive agreement
regarding an initial Business Combination without the prior consent of the New Sponsor.

 Notwithstanding
the foregoing, the Company's Amended and Restated Memorandum and Articles of Association provide that a Public Shareholder, together
with any affiliate of such shareholder or any other person with whom such shareholder 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, without the prior consent of the
Company.

 F- 8

 NOTES

 The
Company's New Sponsor, officers and directors agreed not to propose an amendment to the Company's Amended and Restated Memorandum
and Articles of Association (A) to modify the substance or timing of the Company's obligation to allow the redemption of its Public
Shares in connection with a Business Combination or to redeem 100% of its Public Shares if the Company does not complete a Business Combination
within 30 months (including six month extension) from the closing of the Initial Public Offering, or February 5, 2023, (the "Combination
Period") or (B) with respect to any other provisions relating to shareholders' rights or pre-initial Business Combination
activity, unless the Company provides the Public Shareholders with the opportunity to redeem their Public Shares in conjunction with
any such amendment.

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

 In
connection with the redemption of 100 % of the Company's outstanding Public Shares for a portion of the funds held in the Trust
Account, each holder will receive a full pro rata portion of the amount then in the Trust Account, plus any pro rata interest earned
on the funds held in the Trust Account and not previously released to the Company to pay the Company's taxes payable (less taxes
payable and up to $ 100,000 of interest to pay dissolution expenses).

 The
Initial Shareholders 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 Shareholders 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. The underwriters agreed to waive their rights to their
deferred underwriting commissions (see Note 6) 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 funds held in the Trust Account that will be
available to fund the redemption of the Company's Public Shares. In the event of such distribution, it is possible that the per
share value of the residual assets remaining available for distribution in the Trust Account will be less than the $ 10.00 per share initially
held in the Trust Account. In order to protect the amounts held in the Trust Account, the Sponsor agreed that it will be liable to the
Company if and to the extent any claims by a third party for services rendered or products sold to the Company, or a prospective target
business with which the Company has entered into a written letter of intent, confidentiality or other similar agreement or Business Combination
agreement, reduce the amount of funds in the Trust Account to below the lesser of (i) $ 10.00 per Public Share and (ii) the actual amount
per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account, if less than $ 10.00 per share due
to reductions in the value of the trust assets, less taxes payable, provided that such liability will not apply to any claims by a third
party or prospective target business who executed a waiver of any and all rights to the monies held in the Trust Account (whether or
not such waiver is enforceable) nor will it apply to any claims under the Company's indemnity of the underwriters of the Initial
Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the "Securities
Act"). 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 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 with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.
There can be no guarantee that the Company will be successful in obtaining such waivers from its targeted vendors and service providers.

 F- 9

 NOTES

 Charter
Amendment and Share Redemptions

 In
an extraordinary general meeting held on February 3, 2023, shareholders approved a charter amendment (the "Charter Amendment"),
changing the structure and cost of the Company's right to extend the date by which the Company must (i) consummate a merger, capital
stock exchange, asset acquisition, stock purchase, reorganization or similar Business Combination involving the Company and one or more
businesses (a "Business Combination"), (ii) cease its operations if it fails to complete such Business Combination, and (iii)
redeem or repurchase 100 % of the Company's Public Shares (the "Termination Date"), which was previously February 5,
2023 (the "Charter Amendment Proposal"). The Charter Amendment allowed the Company to extend the Termination
Date by up to six (6) one-month extensions to August 5, 2023 (each, an "Extension," and such later date, the "Extended
Deadline") provided that if any Extended Deadline ends on a day that is not a business day, such Extended Deadline will be automatically
extended to the next succeeding business day. To effect each 1-month Extension, the Company, its Sponsor or any of their affiliates or
designees must deposit into the Company's Trust Account with Continental by the applicable Extended Deadline (the "Extension
Payment"), the lesser of (x) $ 300,000 or (y) $ 0.06 per share for each of the Company's publicly held shares outstanding as
of the deadline prior to the extension (after giving effect to redemptions in connection with the approval of the Charter Amendment
by the Company's shareholders with respect to the first such extension). In connection with the approval of the Charter Amendment
Proposal, the shareholders also approved a proposal to amend the Company's trust agreement with Continental (the "Trust Agreement"),
pursuant to which the Company's Trust Agreement with Continental was amended to conform the procedures in the Trust Agreement by
which the Company may extend the date on which Continental must liquidate the Trust Account if the Company has not completed its initial
Business Combination to the procedures in the Charter Amendment (the "Trust Amendment Proposal"). In connection
with the approval of the Charter Amendment Proposal and the Trust Amendment Proposal at the shareholders meeting, holders of 22,848,122
of the Company's Public Shares exercised their right to redeem those shares for cash at an approximate price of $ 10.15 per share,
for an aggregate of approximately $ 231.9 million. Following the payment of the redemptions, the Trust Account had a balance of approximately
$ 74.7 million before the first Extension Payment.

 The
shareholders of the Company approved the Amendment to the Amended and Restated Memorandum and Articles of Association of the Company
(the "Second Charter Amendment") at the August 3, 2023 shareholders meeting, changing the structure and cost of the Company's
right to extend the Termination Date by up to six (6) one-month Extensions to February 5, 2024, provided that if any Extended Deadline
ends on a day that is not a business day, such Extended Deadline will be automatically extended to the next succeeding business day (the
"Section Charter Amendment Proposal"). To effect each 1-month Extension, the Company, its sponsor or any of their affiliates
or designees must deposit into the Company's Trust Account with Continental an Extension Payment (after giving effect to redemptions
in connection with the approval of the Second Charter Amendment) the lesser of (x) $150,000 or (y) $0.04 per share for each
of the Company's Public Shares outstanding as of the applicable Extended Deadline, unless the closing of the Company's initial
Business Combination shall have occurred, in exchange for a non-interest bearing, unsecured promissory note payable upon consummation
of a Business Combination. In connection with the approval of the Second Charter Amendment Proposal, the shareholders also approved
a proposal to amend the Trust Agreement, pursuant to which the Company's Trust Agreement with Continental was amended to conform
the procedures in the Trust Agreement by which the Company may extend the date on which Continental must liquidate the Trust Account
if the Company has not completed its initial Business Combination to the procedures in the Second Charter Amendment (the "Second
Trust Amendment Proposal").

 F- 10

 NOTES

 In
connection with the approval of the Second Charter Amendment Proposal and the Second Trust Amendment Proposal at the August 3, 2023
Shareholders Meeting, holders of 1,310,929
of the Company's Class A ordinary shares exercised their rights to redeem those shares for cash at an approximate price of
$ 10.42
per share, for an aggregate of approximately $ 13.6
million. Following the payment of the redemptions, for the year ended December 31, 2023 showed the Trust Account with a balance of
$ 67,819,662
inclusive of Extension Payments.

 On
each of February 9, 2023, March 7, 2023, April 4, 2023, May 9, 2023, June 6, 2023, and July 5, 2023 the Company deposited $ 300,000, and
on each of August 3, 2023, September 5, 2023, October 5, 2023, November 6, 2023, and December 5, 2023 the Company deposited $ 150,000
 into the Trust Account to extend the date to consummate a Business Combination through March 5, 2023, April 5, 2023, May 5, 2023, June
5, 2023, July 5, 2023, August 5, 2023, September 5, 2023, October 5, 2023, November 5, 2023, December 5, 2023, and January 5, 2024, respectively.
As of December 31, 2023, cash deposited into the Trust Account in relation to the extensions amounted to $ 2,550,000. Refer to Note 11
for additional details.

 Proposed
Business Combination

 On
March 3, 2023, the Company entered into a Business Combination agreement by and among the Company, AIRO Group, Inc., a Delaware corporation
and a wholly owned subsidiary of the Company ("ParentCo"), Kernel Merger Sub, Inc., a Delaware corporation and a wholly owned
subsidiary of ParentCo ("Kernel Merger Sub"), AIRO Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary
of ParentCo ("AIRO Merger Sub"), the Company's Sponsor, Dr. Chirinjeev Kathuria, in the capacity as the representative
for the Company's shareholders (the "Seller Representative"), and AIRO Group Holdings, Inc., a Delaware corporation
("AIRO Group Holdings"), referred to collectively as the Parties (the "Parties") (as may be amended and/or restated
from time to time, the "Business Combination Agreement"), pursuant to which, among other things, the Company will change
the Company's jurisdiction of incorporation by deregistering as a Cayman Islands exempted company and continuing and domesticating
as a corporation incorporated under the laws of the State of Delaware (the "Domestication").

 In
connection with the Domestication, each Class B ordinary share, par value $ 0.0001 per share, shall convert into a share of Class B common
stock, par value $ 0.0001 per share, and each Class A ordinary share, par value $ 0.0001 per share, shall convert into a share of Class
A common stock, par value $ 0.0001 per share. Further, each share of Class B common stock and each share of Class A common stock that
is then issued and outstanding shall convert automatically, on a one-for-one basis, into one share of Kernel common stock (the "Kernel
Common Stock").

 Following
the domestication, the parties will effect the merger of Kernel Merger Sub with and into the Company, with the Company continuing as
the surviving entity as a wholly owned subsidiary of ParentCo (the "First Merger"). Immediately following the First Merger,
AIRO Merger Sub will merge with and into AIRO Group Holdings, with AIRO Group Holdings continuing as the surviving entity as a wholly
owned subsidiary of ParentCo (the "Second Merger" and the other transactions contemplated by the Business Combination Agreement,
together, the "Transaction").

 As
consideration for the Second Merger, the holders of AIRO Group Holdings' securities collectively shall be entitled to receive from
ParentCo, in the aggregate, a number of shares of ParentCo common stock with an aggregate value equal to (the "AIRO Merger Consideration")
(a) $770,000,000 minus (b) the amount, if any, by which the net working capital is less than negative $500,000, plus (c) the amount,
if any, by which the net working capital exceeds $500,000 (but not less than zero), minus (d) the amount, if any, by which the closing
net debt exceeds the target net debt of $75,000,000, by more than $500,000 (but not less than zero), plus (e) the amount, if any, by
which the target net debt of $75,000,000 exceeds closing net debt, minus (f) the amount, if any, by which the company transaction expenses
exceed the target company transaction expenses of $14,000,000 (but not less than zero). In addition, holders of AIRO Group Holdings'
securities shall have the contingent right to receive from ParentCo, in the aggregate, up to 33,000,000 additional shares of ParentCo
common stock, and the Sponsor shall have the contingent right to receive up to 3,300,000 shares of ParentCo Common Stock (the "Earnout
Shares"). In the event that for any full 12-month period (each an "Earnout Period") commencing on or after the Closing
Date (the "Earnout Start Date") and ending on or before the last day of the thirteenth full calendar quarter following the
Closing Date (the "Earnout End Date," and the period between the Earnout Start Date and the Earnout End Date, the "Earnout
Eligibility Period") ParentCo's revenue is (i) greater than or equal to $42,600,000 for the first time during the Earnout
Eligibility Period, (ii) greater than or equal to $141,400,000 for the first time during the Earnout Eligibility Period, and (iii) greater
than or equal to $358,900,000 for the first time during the Earnout Eligibility Period, then upon the occurrence of each (i), (ii), and
(iii), ParentCo shall issue to each of the stockholders of AIRO Group Holdings such stockholder's pro rata share of 6,600,000 Earnout
Shares and the Sponsor shall be issued 660,000 Earnout Shares. In the event that ParentCo's EBITDA for any Earnout Period is (x)
greater than or equal to $(19,300,000) for the first time during the Earnout Eligibility Period, (y) greater than or equal to $4,000,000
for the first time during the Earnout Eligibility Period and (z) greater than or equal to $98,600,000 for the first time during the Earnout
Eligibility Period, then upon the occurrence of each (x), (y), and (z), ParentCo shall issue to each of the stockholders of AIRO Group
Holding such stockholder's pro rata share of 4,400,000 Earnout Shares and the Sponsor shall be issued 440,000 Earnout Shares.

 F- 11

 NOTES

 The
Business Combination Agreement contains customary conditions to Closing, including the following mutual conditions of the parties (unless
waived): (i) approval of the shareholders of Kernel and AIRO Group Holdings of the Transaction and the other matters requiring shareholder
approval; (ii) approvals of any required governmental authorities and completion of any antitrust expiration periods; (iii) receipt of
specified third party consents; (iv) no law or order preventing the Transaction; (v) the Registration Statement having been declared
effective by the SEC; (vi) no material uncured breach by the other party; (vii) no occurrence of a Material Adverse Effect with respect
to the other party; (viii) the satisfaction of the $5,000,001 minimum net tangible asset test by Kernel; (ix) approval from Nasdaq for
the listing of the shares of ParentCo's common to be issued in connection with the Transaction; and (x) reconstitution of the Post-Closing
Board as contemplated under the Business Combination Agreement. Refer to Note 11 for further information regarding the Third Amendment
(the "Third Amendment") to the Business Combination Agreement entered into on February 5, 2024, by and among the Parties.

 In
addition, unless waived by AIRO Group Holdings, the obligations of AIRO Group Holdings to consummate the Transaction are subject to the
satisfaction of the following additional Closing conditions, in addition to the delivery by Kernel of the Related Agreements (as defined
and described in greater detail below), customary certificates and other Closing deliverables: (i) the representations and warranties
of Kernel being true and correct as of the date of the Business Combination Agreement and as of the Closing (subject to customary exceptions,
including materiality qualifiers); (ii) Kernel having performed in all material respects its obligations and complied in all material
respects with its covenants and agreements under the Business Combination Agreement required to be performed or complied with by it on
or prior to the date of the Closing; (iii) absence of any Material Adverse Effect with respect to Kernel since the date of the Business
Combination Agreement which is continuing and uncured; (iv) the replacement of the Replacement Warrants and Replacement Options; (v)
at the Closing, Kernel having $50,000,000 in Unencumbered Cash, including funds remaining in the Trust Account (after giving effect to
the completion and payment of any redemptions and any Transaction Expenses) and the proceeds of the PIPE/Convertible Note Investment,
fifty percent (50%) of any net cash proceeds of any capital investment raise and/or convertible debt raise conducted by the Company during
the period beginning on the effective date of the Business Combination and ending on the Closing Date, and any net cash proceeds of any
executed agreements regarding a capital investment raise and/or convertible debt raise conducted by Kernel or ParentCo in which such
cash proceeds are required to be paid to ParentCo during the thirty (30) day period beginning on the Closing Date.

 Finally,
unless waived by Kernel, the obligations of Kernel to consummate the Transaction are subject to the satisfaction of the following additional
Closing conditions, in addition to the delivery by Kernel of the Related Agreements (as defined and described in greater detail below),
customary certificates and other Closing deliverables: (i) the representations and warranties of AIRO Group Holdings being true and correct
as of the date of the Business Combination Agreement and as of the Closing (subject to customary exceptions, including materiality qualifiers);
(ii) AIRO Group Holdings having performed in all material respects their respective obligations and complied in all material respects
with their respective covenants and agreements under the Business Combination Agreement required to be performed or complied with by
them on or prior to the date of the Closing; (iii) absence of any Material Adverse Effect with respect to AIRO Group Holdings and its
subsidiaries on a consolidated basis since the date of the Business Combination Agreement which is continuing and uncured; (iv) delivery
of AIRO's 2022 Audited Financials within 60 days of the Business Combination Agreement's signing; (v) the completion of Kernel's
legal due diligence of AIRO Group Holdings and its subsidiaries to Kernel's reasonable satisfaction; (vi) the replacement of the
Replacement Warrants and Replacement Options; and (vii) the aggregate amount of all Indebtedness of the Target Companies due earlier
than 180 days after the Closing (less Company cash at Closing) is less than Fifty Million U.S. Dollars ($ 50,000,000).

 F- 12

 NOTES

 On
August 29, 2023, the Parties entered into the First Amendment to the Business Combination Agreement (the "First Amendment").
The First Amendment amends the Business Combination Agreement to make certain changes to the earnout provisions to fix the number of
Earnout Shares that can be granted in each Earnout Period on a $ 10.00 Per Share Price. Refer to Note 11 for additional details.

 Risks
and Uncertainties

 The
following is a summary of the principal risks described below in Part I, Item 1A "Risk Factors" in this Annual Report on
Form 10-K. We believe that the risks described in the "Risk Factors" section are material to investors, but other factors
not presently known to us or that we currently believe are immaterial may also adversely affect us. The following summary should not
be considered an exhaustive summary of the material risks facing the Company, and it should be read in conjunction with the "Risk Factors"
section and the other information contained in this Annual Report on Form 10-K.

The company has no operating history and no revenues, and investors have no basis on which to evaluate the Company's ability
to achieve its business objective.

Past performance by the management team or their respective affiliates may not be indicative of future performance of an investment in
the Company.

Your only opportunity to affect the investment decision regarding a potential business combination may be limited to the exercise of
your right to redeem your shares from the Company for cash.

If the Company seeks shareholder approval of our initial business combination, the Sponsor has agreed to vote in favor of such initial
business combination, regardless of how the public shareholders vote.

The ability of public shareholders to redeem their shares for cash may make
the Company's financial condition unattractive to potential business combination targets, which may make it difficult for the Company
to enter into a business combination with a target.

The requirement that the Company consummate an initial business combination
within 36 (or 42, subject to six one-month extensions) months after the closing of its initial public offering may give potential target
businesses leverage over the Company in negotiating a business combination and may limit the time the Company has in which to conduct
due diligence on potential business combination targets, in particular as the Company approachs its dissolution deadline, which could
undermine the Company's ability to complete our initial business combination on terms that would produce value for its shareholders.

 F- 13

 NOTES

The Company's search for a business combination, and any target business
with which it ultimately consummates a business combination, may be materially adversely affected by the recent coronavirus (COVID-19)
outbreak and the status of debt and equity markets.

If the Company seeks shareholder approval of our initial business combination,
the Company's Sponsor, executive officers, directors or their affiliates may elect to purchase public shares or warrants, which
may influence a vote on a proposed business combination and reduce the public "float" of the Company's Class A ordinary
shares or public warrants.

If a shareholder fails to receive notice of the Company's offer to redeem
our public shares in connection with its initial business combination, or fails to comply with the procedures for tendering its shares,
such shares may not be redeemed.

The SEC issued final rules to regulate special purpose acquisition companies that may increase the Company's costs and the time
needed to complete its initial business combination.

If the net proceeds of the IPO and the sale of the private placement warrants not being held in the Trust Account are insufficient to
allow the Company to operate for the 36 months (or 42 months, subject to six one-month extensions) following the closing of the IPO,
it could limit the amount available to fund the Company's search for a target business or businesses and its ability to complete
its initial business combination, and the Company will depend on loans from its Sponsor, its affiliates or members of the Company's
management team to fund its search and to complete its initial business combination.

You will not have any rights or interests in funds from the Trust Account, except under certain limited circumstances. Therefore, to
liquidate your investment, you may be forced to sell your public shares or warrants, potentially at a loss.

You will not be entitled to protections normally afforded to investors of many other blank check companies.

The waiver of fees by Citigroup Global Markets Inc. may indicate that they may be unwilling to be associated with the Company's initial business combination.

Nasdaq may delist the Company's securities from its exchange which could limit investors' ability to make transactions in
the Company's securities and subject the Company to additional trading restrictions

If the Company seeks shareholder approval of its initial business combination and the Company does not conduct redemptions pursuant to
the tender offer rules, and if you or a "group" of shareholders are deemed to hold in excess of 15% of the Company's
Class A ordinary shares, you will lose the ability to redeem all such shares in excess of 15% of the Company's Class A ordinary
shares.

Our independent registered public accounting firm's report contains an explanatory paragraph that expresses substantial doubt about
our ability to continue as a "going concern."

Because the Company instructed Continental Stock Transfer & Trust Company to hold the funds in the Trust Account in an interest-bearing
demand deposit account at a bank until the earlier of the consummation of our initial business combination or the Company's liquidation,
following such liquidation of investments in the Trust Account, the Company will receive less interest on the funds held in the Trust
Account than it would have received had it not liquidated such investments in the Trust Account, which would reduce the dollar amount
the public shareholders would receive upon any redemption or liquidation of the Company.

 F- 14

 NOTES

Subsequent to the Company's completion of its initial business combination,
it may be required to take write-downs or write-offs, restructuring and impairment or other charges that could have a significant negative
effect on its financial condition, results of operations and the price of its securities, which could cause shareholders to lose some
or all of their investment.

If third parties bring claims against the Company, the proceeds held in the Trust Account could be reduced and the per-share redemption amount
received by shareholders may be less than $ 10.00 per public share.

The Company's directors may decide not to enforce the indemnification obligations of the Sponsor, resulting in a reduction in the amount of funds
in the Trust Account available for distribution to our public shareholders.

The Company may not have sufficient funds to satisfy indemnification claims of its directors and executive officers.

The Company's warrants are accounted for as liabilities and the changes in value of its warrants could have a material effect on its financial
results and thus may have an adverse effect on the market price of its securities.

 F- 15

 NOTES

 DECEMBER
31, 2023

 Going
Concern

 As
of December 31, 2023, the Company had approximately $ 804 in its operating bank account and a working capital deficit of $ 7,822,239.

 The
Company's liquidity needs to date have been satisfied through a contribution of $ 25,000 from Original Sponsor to cover for certain
expenses in exchange for the issuance of the Founder Shares, the loan of $ 77,000 from the Original Sponsor under the Note, certain portion
of the proceeds from the consummation of the Private Placement not held in the Trust Account, the Promissory Note of $ 2,500,000, and
Convertible Promissory Note of $ 1,700,000. The Company repaid $ 77,000 of the loan from the Original Sponsor in February 2021. In addition,
in order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain
of the Company's officers and directors may, but are not obligated to, provide the Company Working Capital Loans. If the Company
completes a Business Combination, the Company may repay the Working Capital Loans out of the proceeds of the Trust Account released to
the Company. Otherwise, the Working Capital Loans may be repaid only out of funds held outside the Trust Account. In the event that a
Business Combination does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital
Loans but no proceeds held in the Trust Account would be used to repay the Working Capital Loans.

 Management
has determined that the Company has access to funds from the Sponsor or an affiliate of the Sponsor, or certain of our officers and
directors to meet its needs through the earlier of the consummation of a Business Combination or one year from this filing. Over
this time period, the Company will be using these funds for paying existing accounts payable, identifying and evaluating prospective
initial Business Combination candidates, performing due diligence on prospective target businesses, paying for travel expenditures,
selecting the target business to merge with or acquire, and structuring, negotiating and consummating the Business Combination. In
connection with the Company's assessment of going concern considerations in accordance with Financial Accounting Standards
Board ("FASB") Accounting Standards Update ("ASU") 2014-15, " Disclosures of Uncertainties about an
Entity's Ability to Continue as a Going Concern, " the Company has determined that the liquidity condition, the date
of the mandatory liquidation and subsequent dissolution raises substantial doubt about the Company's ability to continue as a
going concern. No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to
liquidate after August 5, 2024 (see Note 11). The financial statements do not include any adjustment that might be necessary if the
Company is unable to continue as a going concern. The Company's management plans to complete a Business Combination prior to
the mandatory liquidation date.

 F- 16

 NOTES

 NOTE
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 Basis
of Presentation

 The
accompanying financial statements are presented in U.S. dollars in conformity with accounting principles generally accepted in the United
States of America ("GAAP") for financial information and pursuant to the rules and regulations of the SEC.

 Principles
of Consolidation

 The
accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiary. All significant intercompany
balances and transactions have been eliminated in consolidation.

 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 shareholder approval of any golden parachute payments not previously
approved.

 Use
of Estimates

 The
preparation of the 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 financial statements and the reported amounts of revenues and expenses during the reporting periods. Making estimates
requires the Company's 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 financial statements, which the
Company's management considered in formulating its estimate, could change in the near term due to one or more future
confirming events. One of the more significant accounting estimates included in these financial statements is the determination of
the fair value of the warrant liability and Forward Purchase Agreement. Actual results could differ from those estimates.

 Concentration
of Credit Risk

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 and investments held in Trust Account.
The Company has significant cash balances at financial institutions which throughout the year regularly exceed the federally insured
limit of $ 250,000. Any loss incurred or a lack of access to such funds could have a significant adverse impact on the Company's
financial condition, results of operations, and cash flows.

 Cash
and Cash Equivalents

 The
Company co nsiders all short-term investments with an original maturity of three months or less
when purchased to be cash equivalents. The Company did no t have any cash equivalents as of December 31, 2023 or December 31, 2022.

 F- 17

 NOTES

 Cash
and Investments Held in Trust Account

 Until
February 2023, the Company's portfolio of investments held in the Trust Account was comprised of U.S. government securities,
within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 185 days or less, or investments
in money market funds that invest in U.S. government securities and generally have a readily determinable fair value, or a
combination thereof. In July 2023, the Company instructed Continental to instead hold the funds in the Trust Account in an
interest-bearing demand deposit account. In February 2023, the Company transferred the funds in the Trust Account into cash, and in
August 2023, the Company transferred the Trust Account funds back to an interest-bearing demand deposit account. When the
Company's investments held in the Trust Account are comprised of U.S. government securities, the investments are classified as
trading securities. When the Company's investments held in the Trust Account are comprised of money market funds, the
investments are recognized at fair value. Trading securities and investments in money market funds are presented on the consolidated
balance sheets at fair value at the end of each reporting period. Gains and losses resulting from the change in fair value of these
securities are included in income from investments held in Trust Account in the accompanying statements of operations. The estimated
fair values of investments held in the Trust Account are determined using available market information. For the year ended December
31, 2023, $ 246,225,327
was paid to redeeming shareholders. At December 31, 2023 and December 31, 2022, the cash and investments held in the Trust Account
totaled $ 67,819,662
and $ 309,234,766,
respectively.

 Fair
Value of Financial Instruments

 The
fair value of the Company's assets and liabilities, which qualify as financial instruments under the ASC Topic 820,
"Fair Value Measurements", equals or approximates the carrying amounts represented in the consolidated balance sheets,
except for warrant liabilities (see Note 10).

 Fair
Value Measurements

 Fair
value is defined as the price that would be received for sale of an asset or paid for transfer of a liability in an orderly transaction
between market participants at the measurement date. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs
used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets
or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers consist of:

 Level
 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets;

 Level
 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted
 prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active;
 and

 Level
 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions,
 such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

 In
some circumstances, the inputs used to measure fair value might be categorized within different levels of the fair value hierarchy. In
those instances, the fair value measurement is categorized in its entirety in the fair value hierarchy based on the lowest level input
that is significant to the fair value measurement.

 Derivative
Financial Instruments

 The
Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates
all of its financial instruments, including issued stock purchase warrants, to determine if such instruments are derivatives or contain
features that qualify as embedded derivatives, pursuant to ASC 480 and ASC 815, "Derivatives and Hedging". The classification
of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end
of each reporting period.

 The
warrants issued in connection with the Initial Public Offering and the Private Placement Warrants are recognized as derivative
liabilities in accordance with ASC 815. Accordingly, the Company recognizes the warrant instruments as liabilities at fair value and
adjusts the instruments to fair value at each reporting period. The liabilities are subject to re-measurement at each consolidated
balance sheet date until exercised. The fair value of warrants issued in connection with the Private Placement has been measured by
using the market value of the public warrants. The fair value of the warrants issued in connection with the Initial Public Offering
was initially measured using a Monte-Carlo simulation and subsequently has been measured based on the market price at each
measurement date when separately listed and traded. The determination of the fair value of the derivative liability may be subject
to change as more current information becomes available and accordingly the actual results could differ significantly. Derivative
liabilities are classified as non-current liabilities as their liquidation is not reasonably expected to require the use of current
assets or require the creation of current liabilities. The Company's public and private warrant liabilities (see Notes 7 and
10) are classified as derivatives in the consolidated balance sheets with changes in the fair value recognized in the statements of
operations.

 F- 18

 NOTES

 The
Forward Purchase Agreement (see Note 4) was classified as a derivative in the consolidated balance sheets with changes in the fair
value recognized in the statements of operations.

 Convertible
Promissory Notes

 On
March 23, 2023, Polar Multi-Strategy Master Fund agreed to loan the Company an aggregate principal of $ 600,000
(the 'First Polar Fund Convertible Note") to be used for a portion of the expenses of the Company in exchange for the
issuance of 600,000
Class A Common Stock at the closing of a Business Combination ("Share Rights"). At the option of Polar Multi-Strategy
Master Fund, upon the closing of a Business Combination, the outstanding principal of $ 600,000
at December 31, 2023 may be converted into a number of Class A Common Stock at a rate of one Class A Common Stock for each $ 10
of additional capital contribution ( 60,000
shares).

 On
April 4, 2023, Aesther Healthcare Sponsor agreed to loan the Company an aggregate principal of $ 50,000 ("the Aesther Healthcare
Convertible Note") to be used for a portion of the expenses of the Company in exchange for the issuance of 50,000 Class A Common
Stock at the closing of a Business Combination ("Share Rights"). At the option of Aesther Healthcare Sponsor, upon the closing
of a Business Combination, the outstanding principal of $ 50,000 at December 31, 2023 may be converted into a number of Class A Common
Stock at a rate of one Class A Common Stock for each $ 10 of additional capital contribution ( 5,000 shares).

 On
April 25, 2023, Polar Multi-Strategy Master Fund agreed to loan the Company an aggregate principal of $ 800,000 (the "Second Polar
Fund Convertible Note") to be used for a portion of the expenses of the Company in exchange for the issuance of 800,000 Class A
Common Stock at the closing of a Business Combination ("Share Rights"). At the option of Polar Multi-Strategy Master Fund,
upon the closing of a Business Combination, the outstanding principal of $ 800,000 at December 31, 2023 may be converted into a number
of Class A Common Stock at a rate of one Class A Common Stock for each $ 10 of additional capital contribution ( 80,000 shares).

 On
December 6, 2023, Polar Multi-Strategy Master Fund agreed to loan the Company an aggregate principal of $ 250,000 (the "Third Polar
Fund Convertible Note") to be used for a portion of the expenses of the Company in exchange for the issuance of 250,000 Class A
Common Stock at the closing of a Business Combination ("Share Rights"). At the option of Polar Multi-Strategy Master Fund,
upon the closing of a Business Combination, the outstanding principal of $ 250,000 at December 31, 2023 may be converted into a number
of Class A Common Stock at a rate of one Class A Common Stock for each $ 10 of additional capital contribution ( 25,0000 shares).

 Collectively,
the First Polar Fund Convertible Note, the Aesther Healthcare Convertible Note, Second Polar Fund Convertible Note, and Third Polar Fund
Convertible Note are referred to as the Convertible Notes. The Company accounted for its Share Rights as equity-classified instruments
based on an assessment of the Share Right's specific terms and applicable authoritative guidance in ASC 480 and ASC 815. The assessment
considers whether the Share Rights are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant
to ASC 480, and whether the Share Rights meet all the requirements for equity classification under ASC 815, including whether the Share
Rights are indexed to the Company's own common stock, among other conditions for the equity classification. This assessment, which
requires the use of professional judgment, was conducted at the time of Share Rights issuance. Both the Convertible Promissory Note and
the Share Rights meet the scope exception of ASC 815-10-15-74(a). The Company applied the guidance in ASC 470-20-25-2, " Debt
With Conversion and Other Options ", requiring that the loan proceeds be allocated to the two instruments based on their relative
fair values. At March 23, 2023, the Company allocated $ 53,191 of the proceeds to the First Polar Fund Convertible Note and $ 546,809 for
the Share Rights. At April 4, 2023, the Company allocated $ 4,409 of the proceeds to the Aesther Healthcare Convertible Note and $ 45,591
for the Share Rights. At April 25, 2023, the Company allocated $ 70,299 of the proceeds to the Second Polar Fund Convertible Note and
$ 729,701 for the Share Rights. At December 6, 2023, the Company allocated $ 21,441 of the proceeds to the Third Polar Fund Convertible
Note and $ 228,559 for the Share Rights. The Share Rights are recognized as a debt discount to the Convertible Promissory Notes and accreted
through interest expense to the face value of the Convertible Promissory Notes utilizing an effective interest method. At December 31,
2023, the carrying value of the Convertible Promissory Notes (see Note 5) was $ 1,565,113, reflecting the unamortized discount of $ 134,887.

 F- 19

 NOTES

 Offering
Costs Associated with the Initial Public Offering

 Offering
costs consisted of legal, accounting, underwriting fees and other costs incurred through the Initial Public Offering that were directly
related to the Initial Public Offering. Offering costs are allocated to the separable financial instruments issued in the Initial Public
Offering based on a relative fair value basis, compared to total proceeds received. Offering costs associated with derivative warrant
liabilities are expensed as incurred, and presented as other income (expenses) in the statements of operations. Offering costs associated
with the Class A ordinary shares issued were charged against the carrying value of Class A ordinary shares upon the completion of the
Initial Public Offering. The Company classifies deferred underwriting commissions as non-current liabilities as their liquidation is
not reasonably expected to require the use of current assets or require the creation of current liabilities.

 Class
A Ordinary Shares Subject to Possible Redemption

 The
Company accounts for its Class A ordinary shares subject to possible redemption in accordance with the guidance in ASC Topic 480,
" Distinguishing Liabilities from Equity." Class A ordinary shares subject to mandatory redemption (if any) are
classified as liability instruments and are measured at fair value. Conditionally redeemable Class A ordinary shares (including
Class A ordinary shares that feature 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) are classified as temporary equity. At all
other times, Class A ordinary shares are classified as shareholders' equity. The Company's Class A ordinary shares
feature certain redemption rights that are considered to be outside of the Company's control and subject to the occurrence of
uncertain future events. Accordingly, as of December 31, 2023 and December 31, 2022, the Company had 6,315,949 and 30,475,000 Class
A ordinary shares subject to possible redemption, that are presented as temporary equity, outside of the shareholders' deficit
section of the Company's consolidated balance sheets, respectively. For the year ended December 31, 2023, 24,159,051 Class
A ordinary shares were redeemed by shareholders.

 Under
ASC 480-10 S99, the Company has elected to recognize changes in the redemption value immediately as they occur and adjust the carrying
value of the security to equal the redemption value at the end of each reporting period. This method would view the end of the reporting
period as if it were also the redemption date for the security. Effective with the closing of the Initial Public Offering, the Company
recognized the accretion from initial book value to redemption amount, which resulted in charges against additional paid-in capital (to
the extent available) and accumulated deficit.

 Net
(Loss) Income per Ordinary Share

 The
Company complies with accounting and disclosure requirements of FASB ASC Topic 260, "Earnings Per Share." The Company has
two classes of shares, which are referred to as Class A ordinary shares and Class B ordinary shares. Income and losses are shared pro
rata between the two classes of shares. This presentation assumes a Business Combination as the most likely outcome. Net (loss) income
per ordinary share is calculated by dividing the net (loss) income by the weighted average number of ordinary shares outstanding for
the respective period.

 The
calculation of diluted net (loss) income per ordinary share does not consider the effect of the warrants underlying the Units sold in
the Initial Public Offering and the Private Placement Warrants to purchase 23,987,500 Class A ordinary shares, nor the effect of the
conversion features under the convertible promissory notes to issue up to 170,000 additional Class A ordinary shares, in the calculation
of diluted (loss) income per share, because their exercise is contingent upon future events and their inclusion would be anti-dilutive
under the treasury stock method. As a result, diluted net (loss) income per share is the same as basic net (loss) income per share for
the year ended December 31, 2023 and 2022. Accretion associated with the redeemable Class A ordinary shares is excluded from earnings
per share as the redemption value approximates fair value.

 F- 20

 NOTES

 The
Company has considered the effect of Class B ordinary shares that were excluded from weighted average number as they were contingent
on the exercise of over-allotment option by the underwriters. Since the contingency was satisfied, the Company included these shares
in the weighted average number as of the beginning of the interim period to determine the dilutive impact of these shares.

OF BASIC AND DILUTED NET INCOME PER SHARE OF ORDINARY SHARE

 For
 the Year Ended
December 31, 2023

 For
 the Year Ended
December 31, 2022

 Class
 A

 Class
 B

 Class
 A

 Class
 B

 Numerator:

 Allocation of net (loss) income
 - basic and diluted

 $
 ( 4,717,354
)

 $
 ( 2,824,082
)

 $
 12,524,823

 $
 3,131,206

 Denominator:

 Weighted average ordinary shares outstanding,
 basic and diluted

 12,726,377

 30,475,000

 Basic and diluted net (loss) income per ordinary
 share

 $
 ( 0.37
)

 $
 ( 0.37
)

 $
 0.41

 $
 0.41

 Income
Taxes

 The
Company complies with the accounting and reporting requirements of ASC Topic 740, "Income Taxes". ASC Topic 740 prescribes
a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or
expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained
upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as
income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of December 31, 2023
and December 31, 2022. The Company's management determined that the Cayman Islands is the Company's only major tax jurisdiction.
The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation
from its position.

 There
is currently no taxation imposed on income by the government of the Cayman Islands. In accordance with Cayman federal income tax regulations,
income taxes are not levied on the Company. Consequently, income taxes are not reflected in the Company's financial statements.
The Company's management does not expect that the total amount of unrecognized tax benefits will materially change over the next
twelve months.

 Financial Instruments – Credit Losses

 In January 2023, the Company adopted the FASB issued
Accounting Standards Update ("ASU") No. 2016-13, "Financial Instruments - Credit Losses (Topic 326):
Measurement of Credit Losses on Financial Instruments," which requires an entity to utilize a new impairment model known as the
current expected credit loss (CECL) model to estimate its lifetime "expected credit loss" and record an allowance that, when
deducted from the amortized cost basis of the financial asset, presents the net amount expected to be collected on the financial asset.
The CECL model is to result in more timely recognition of credit losses. This guidance also requires new disclosures for financial assets
measured at amortized costs, loans, and available-for-sale debt securities. The adoption of this standard did not have a material
effect on the Company's operating results or financial position as the only securities to which this standard applies are the U.S.
government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 185 days or
less, or investments in money market funds that invest in U.S. government securities and generally have a readily determinable fair value,
which the Company deemed to have no credit losses.

 Recent
Accounting Pronouncements

 In
June 2022, the FASB issued ASU 2022-03, ASC Subtopic 820, "Fair Value Measurement of Equity Securities Subject to Contractual Sale
Restrictions". The ASU amends ASC 820 to clarify that a contractual sales restriction is not considered in measuring an equity
security at fair value and to introduce new disclosure requirements for equity securities subject to contractual sale restrictions that
are measured at fair value. The ASU applies to both holders and issuers of equity and equity-linked securities measured at fair value.
The amendments in this ASU are effective for the Company in fiscal years beginning after December 15, 2023, and interim periods within
those fiscal years. Early adoption is permitted for both interim and annual financial statements that have not yet been issued or made
available for issuance. The Company is still evaluating the impact of this pronouncement on the financial statements.

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

 F- 21

 NOTES

 NOTE
3. INITIAL PUBLIC OFFERING

 On
February 5, 2021, the Company consummated its Initial Public Offering of 30,475,000 Units, including 3,975,000 Over-Allotment Units,
at $ 10.00 per Unit, generating gross proceeds of approximately $ 304.8 million, and incurring offering costs of approximately $ 17.4 million,
of which approximately $ 10.7 million was for deferred underwriting commissions. For the year ended December 31, 2023, 24,159,051, Class
A ordinary shares were redeemed by shareholders.

 Each
Unit consists of one Class A ordinary share and one-half of one redeemable warrant ("Public Warrant"). Each whole Public
Warrant will entitle the holder to purchase one Class A ordinary share at an exercise price of $ 11.50 per share, subject to adjustment
(see Note 9).

 NOTE
4. RELATED PARTY TRANSACTIONS

 Founder

 On
November 19, 2020, the Original Sponsor paid an aggregate of $ 25,000 for certain expenses on behalf of the Company in exchange for issuance
of 5,750,000 Class B ordinary shares (the "Founder Shares"). On January 11, 2021, the Company effected a 1 for 1.25 forward
stock split of the Founder Shares that increased the number of outstanding Founder Shares from 5,750,000 to 7,187,500 shares, and the
Original Sponsor transferred an aggregate of 75,000 Founder Shares to the independent directors and an aggregate of 50,000 Founder Shares
to the Former Advisors. On February 2, 2021, the Company effected a 1 for 1.06 forward stock split of the Founder Shares that increased
the number of outstanding Founder Shares from 7,187,500 to 7,618,750 shares and resulted in the Original Sponsor holding 7,493,750 Founder
Shares. The Original Sponsor agreed to forfeit up to an aggregate of 993,750 Founder Shares to the extent that the option to purchase
additional Units was not exercised in full by the underwriters or was reduced, so that the Founder Shares would represent 20 % of the
Company's issued and outstanding shares after the Initial Public Offering. On February 5, 2021, the underwriter fully exercised
its over-allotment option; thus, these 993,750 Founder Shares are no longer subject to forfeiture.

 The
Initial Shareholders agreed not to transfer, assign or sell any of their Founder Shares until the earlier to occur of (A) one year after
the completion of the initial Business Combination and (B) subsequent to the initial Business Combination, (x) if the closing price of
the Class A ordinary shares equals or exceeds $ 12.00 per share (as adjusted for share splits, share capitalizations, reorganizations,
recapitalizations and the like) for any 20 trading days within any 30 -trading-day period commencing at least 150 days after the initial
Business Combination, or (y) the date on which the Company completes a liquidation, merger, share exchange, reorganization or other similar
transaction that results in all of the Public Shareholders having the right to exchange their ordinary shares for cash, securities or
other property.

 On
December 28, 2022, the Company entered into a purchase agreement with the Original Sponsor, and the New Sponsor, pursuant to which the
New Sponsor, or an entity designated by the New Sponsor, will purchase from the Original Sponsor 7,618,750 Class B ordinary shares of
the Company, par value $ 0.0001 per share and 8,750,000 Private Placement Warrants, each of which is exercisable to purchase one Class
A ordinary share of the Company, par value $ 0.0001 per share, for an aggregate purchase price of $ 1.00 payable at the time the Company
effects the initial Business Combination. Upon the closing of the initial Business Combination, New Sponsor shall also convey 2,000,000
Class B ordinary shares to the equityholders of the Original Sponsor, as of the Effective Date, pro rata based on the equityholders'
underlying interest in the Company's Class B ordinary shares as of the Effective Date.

 F- 22

 NOTES

 Private
Placement Warrants

with the closing of the Initial Public Offering, the Company consummated a private placement (the "Private Placement") of
 8,750,000 Private Placement Warrants, at a price of $ 1.00 per Private Placement Warrant with the Original Sponsor, generating gross proceeds
of approximately $ 8.8 million.

 On
December 28, 2022, the Original Sponsor transferred all Private Placement Warrants to the New Sponsor.

 Each
whole Private Placement Warrant is exercisable for one whole Class A ordinary share at a price of $ 11.50 per share. A portion of the
proceeds from the sale of the Private Placement Warrants to the Original Sponsor was added to the proceeds from the Initial Public Offering
held in the Trust Account. If the Company does not complete a Business Combination within the Combination Period, the Private Placement
Warrants will expire worthless. The Private Placement Warrants will be non-redeemable and exercisable on a cashless basis so long as
they are held by the Sponsor or its permitted transferees.

 The
Sponsor and the Company's officers and directors agreed, subject to limited exceptions, not to transfer, assign or sell any of
their Private Placement Warrants until 30 days after the completion of the initial Business Combination.

Party Loans

 In
order to fund working capital deficiencies or finance transaction costs in connection with a Business Combination, the Sponsor or an
affiliate of the Sponsor, or certain of the Company's officers and directors may, but are not obligated to, loan the Company funds
as may be required ("Working Capital Loans"). If the Company completes a Business Combination, the Company may repay the
Working Capital Loans out of the proceeds of the Trust Account released to the Company. Otherwise, the Working Capital Loans may be repaid
only out of funds held outside the Trust Account. In the event that a Business Combination does not close, the Company may use a portion
of proceeds held outside the Trust Account to repay the Working Capital Loans but no proceeds held in the Trust Account would be used
to repay the Working Capital Loans. The Working Capital Loans would either be repaid upon consummation of a Business Combination, without
interest, or, at the lender's discretion, up to $ 1.5 million of such Working Capital Loans may be convertible into warrants of
the post Business Combination entity at a price of $ 1.00 per warrant. The warrants would be identical to the Private Placement Warrants.
Except for the foregoing, the terms of such Working Capital Loans, if any, have not been determined and no written agreements exist with
respect to such loans.

 During
the year ended December 31, 2023, the Company entered into loan agreements with the Sponsor (the "Loan
Agreements" or "Promissory Notes – related party"). Pursuant to the Loan Agreements, the investors loaned the
Sponsor a total of $ 2,500,000,
which will in turn be loaned by the Sponsor to the Company, to cover a portion of the extension fees with any remaining balance to
be used for the Company's working capital. The Loan Agreements accrue 8 %
interest per annum and shall be repaid upon closing the initial Business Combination. The Company intends to pay all principal under
the Loan Agreements. As of December 31, 2023, the total
amount drawn on the Loan Agreements was $ 2,215,368.

 Administrative
Support Agreement

 Commencing
on the date that the Company's securities were first listed on Nasdaq through the earlier of consummation of the initial Business
Combination or its liquidation, the Company agreed to pay the Sponsor $ 10,000 per month for office space, administrative and support
services. For the years ended December 31, 2023 and 2022, the Company incurred $ 120,000 and $ 120,000 for such services, respectively.
As of December 31, 2023 and December 31, 2022, $ 290,000 and $ 170,000 were outstanding, respectively, and included in accrued expenses
– related party as reflected in the accompanying consolidated balance sheets.

 In
addition, the Sponsor, officers and directors, or any of their respective affiliates will be reimbursed for any out-of-pocket expenses
incurred in connection with activities on the Company's behalf such as identifying potential target businesses and performing due
diligence on suitable Business Combinations. The audit committee will review on a quarterly basis all payments that were made by the
Company to the Sponsor, officers or directors, or the Company's or their affiliates. Any such payments prior to an initial Business
Combination will be made from funds held outside the Trust Account. For the year ended December 31, 2023 and 2022, the Company did not
incur or reimburse any Business Combination costs to the Sponsor or any related party.

 F- 23

 NOTES

 Forward
Purchase Agreement

 In
February 2023, the Company entered into a forward purchase agreement (the "Forward Purchase Agreement") pursuant to which
Meteora Special Opportunity Fund I, LP, Meteora Capital Partners, LP, Meteora Select Trading Opportunities Master, LP (collectively the
"Seller"), intends, but is not obligated, to purchase from the Company up to a maximum of 7,700,000 Class A ordinary shares
(the "Forward Purchase Shares") from holders (other than the Company or its affiliates) who have elected to redeem such shares
in connection with the Business Combination. Purchases by Seller will be made through brokers in the open market after the redemption
deadline in connection with the Business Combination at a price no higher than the redemption price to be paid by the Company in connection
with the Business Combination.

 The
Seller will determine in its sole discretion the specific number of Forward Purchase Shares (up to 7,700,000) that it will purchase,
if any, and the obligation of the Company to sell the Forward Purchase Shares is subject to the approval of the Seller's manager
following notice to the Seller that the Company intends to enter into an agreement for a Business Combination.

 The
Forward Purchase Agreement also provides that the Seller is entitled to registration rights with respect to the Forward Purchase Shares.
The proceeds from the sale of the Forward Purchase Shares may be used as part of the consideration to the Company in an initial Business
Combination, expenses in connection with an initial Business Combination or for working capital in the post-Business Combination company.
These purchases are required to be made regardless of whether any Class A ordinary shares are redeemed by the Public Shareholders and
are intended to provide the Company with a minimum funding level for an initial Business Combination. The forward purchase shares will
be issued only in connection with the closing of an initial Business Combination.

 The
Company accounts for the Forward Purchase Agreement in accordance with the guidance contained in ASC 480-10. Such guidance provides
that because the forward purchase agreement does not meet the criteria for equity treatment thereunder, the agreement must be
recorded as a liability. Accordingly, the Company classifies the forward purchase agreement as an asset or liability at its fair
value. This asset or liability is subject to re-measurement at each consolidated balance sheet date. With each such remeasurement,
the asset or liability will be adjusted to fair value, with the change in fair value recognized in the Company's statements of
operations.

 On
November 27, 2023, the Company, Seller, and AIRO entered into a mutual termination agreement (the "Mutual Termination
Agreement") to terminate the Forward Purchase Agreement. In consideration of the termination of the FPA, ParentCo agreed to
issue 50,000
shares of common stock to an entity designated by Seller at the time of the closing of the Business Combination, which shares will
have certain demand and piggyback registration rights. At the termination date the Company assessed the fair value of the derivative
liability - forward purchase agreement and determined the change in fair value to be immaterial. The derivative liability - forward
purchase agreement was extinguished as a result of the Mutual Termination Agreement, and upon the derecognition of the liability, a
reduction of $ 6.3
million was recorded as a gain to accumulated deficit.

to the Mutual Termination Agreement, in the event that the closing of the Business Combination does not occur or the Company otherwise
fails to make the payment of the 50,000 shares, the Company shall pay or cause to be paid a break-up fee equal to (i) all of Seller's
actual out-of-pocket reasonable and documented fees, costs and expenses relating to the transaction in an amount not to exceed $ 50,000,
plus (ii) $ 500,000, payable by the Company to the Seller, and (iii) reimbursement of reasonable and documented attorney fees and other
reasonable out-of-pocket expenses related thereto actually incurred by Seller or its affiliates in connection with the transaction not
to exceed $ 50,000.

 F- 24

 NOTES

 The Company considered the guidance under ASC 815, Derivatives and Hedging,
and determined the consideration shares payment pursuant to the Mutual Termination Agreement described above met the scope exception within
ASC 815-10-15-74. As such, the equity-classified contract was accounted for within equity at fair value as determined on the settlement
date. The measurement date fair value of $ 53,100 was determined using the Company's share price on the settlement date, the number
of shares pursuant to the Mutual Termination Agreement, and probability weighted for the Company's expected percentage of completing
its Business Combination.

 NOTE
5. DEBT

 The
Convertible Promissory Notes are non-interest bearing and are due within five business days from the date on which the Company consummates a Business
Combination. If the Company does not consummate a Business Combination, the Company may use a portion of any funds held outside the Trust
Account to repay the Convertible Promissory Notes; however, no proceeds from the Trust Account may be used for such repayment if the
Company does not consummate the Business Combination. The Convertible Promissory Notes may be converted into Class A Common Stock at
one share for each $ 10 of additional capital contribution at the option of the investor.

 The
Company complies with ASC Topic 835, "Interest" ("ASC 835"). In accordance with ASC 835-30, discounts to the
principal amounts are included in the carrying value of the Notes and amortized to "Interest expense" over the remaining
term of the underlying debt to the Convertible Promissory Note's maturity date.

 As
described in Note 2, on March 23, 2023 the Company entered into the First Polar Fund Convertible Note pursuant to which Polar Multi-Strategy
Master Fund agreed to loan the Company an aggregate principal of $ 600,000. The Company on April 25, 2023 entered into the Second Polar
Fund Convertible Note, pursuant to which Polar Multi-Strategy Master Fund agreed to loan the Company an aggregate principal of $ 800,000.
Additionally, the Company on December 6, 2023, entered into the Third Polar Fund Convertible Note, pursuant to which Polar Multi-Strategy
Master Fund agreed to loan the Company an aggregate principal of $ 250,000. As of December 31, 2023 and December 31, 2022, the outstanding
balance under the First, Second, and Third Polar Fund Convertible Promissory Notes amounted to an aggregate of $ 1,650,000 and $ 0, respectively.
The Company recorded $ 546,809, $ 729,701, and $ 228,559 for debt discount upon issuance of the First Polar Fund Convertible Note, Second
Polar Fund Convertible Note, and Third Polar Fund Convertible Note, respectively. For the year ended December 31, 2023, the amortization
of the discount resulted in total interest expense of $ 1,370,182 for these loans.

 The
Company also entered into the Aesther Healthcare Convertible Note on April 4, 2023, pursuant to which Aesther Healthcare Sponsor agreed
to loan the Company an aggregate principal of $ 50,000. As of December 31, 2023 and December 31, 2022, the outstanding balance under the
Aesther Healthcare Convertible Note amounted to an aggregate of $ 50,000 and $ 0, respectively. The Company recorded a $ 45,591 debt discount
upon issuance of the Aesther Healthcare Convertible Promissory Note. As of December 31, 2023, the amortization of the discount resulted
in interest expense of $ 45,591 for this loan.

 For
the year ended December 31, 2023, the amortization of the discount resulted in total interest expense of $ 1,415,773 for all of the Company's
convertible promissory note loans.

 The
following table presents the aggregate of Convertible Promissory Notes as of December 31, 2023:

OF CONVERTIBLE PROMISSORY NOTES

 Principal value

 $
 1,700,000

 Debt discount

 ( 134,887
)

 Carrying value

 $
 1,565,113

 F- 25

 NOTES

 NOTE
6. COMMITMENTS AND CONTINGENCIES

 Registration
and Shareholder Rights

 The
holders of the Founder Shares, Private Placement Warrants and warrants that may be issued upon conversion of Convertible Promissory Note
(and any Class A ordinary shares issuable upon the exercise of the Private Placement Warrants and warrants that may be issued upon conversion
of Working Capital Loans) were entitled to registration rights pursuant to a registration and shareholder rights agreement signed upon
the effective date of the Initial Public Offering. The holders of these securities were entitled to make up to three demands, excluding
short form demands, that the Company registers such securities. In addition, the holders will be entitled to certain demand and "piggyback"
registration rights with respect to registration statements filed subsequent to the completion of the initial Business Combination. The
Company will bear the expenses incurred in connection with the filing of any such registration statements.

 Underwriting
Agreement

 The
Company granted the underwriters a 45 -day option from the final date of the prospectus relating to the Initial Public Offering to purchase
up to 3,975,000 additional Units at the Initial Public Offering price less the underwriting discounts and commissions. On February 5,
2021, the underwriter fully exercised its over-allotment option.

 The
underwriters were entitled to an underwriting discount of $ 0.20 per unit, approximately $ 6.1 million in the aggregate, paid upon the
closing of the Initial Public Offering. In addition, $ 0.35 per unit, or approximately $ 10.7 million in the aggregate will be payable
to the underwriters for deferred underwriting commissions. On May 24, 2023, the underwriters agreed to waive its rights to its portion
of the fee payable by the Company for deferred underwriting commissions, with respect to any potential Business Combination of the Company.
Of the total $ 10,666,250 waived fee, $ 9,910,904 was recorded as a decrease to accumulated deficit and $ 755,346 was recorded as a gain
on the waiver of deferred underwriting commissions by underwriter in the consolidated statements of operations, following a
manner consistent with the original allocation of the deferred underwriting fees.

 Premium
Finance Agreement - D&O Insurance

 In
order to obtain a public company directors and officers insurance policy ("D&O Insurance"), the Company entered into
two agreements with premium financing lenders, where by the lenders paid the D&O Insurance premium for the company ("Premium
Finance Agreements"). If the Company were to not pay the lenders monthly installment payments, the lenders would cancel the D&O
Insurance and the remaining D&O Insurance premium would be returned to the lenders. In addition, if the Company were to cancel the
D&O Insurance, the remaining D&O Insurance premium would be returned to the lenders.

 The
first Premium Finance Agreement is for $ 350,000 and accrues interest at a fixed rate of 7.5 % per annum for a total of $ 3,136 over the
term of the Premium Finance Agreement. Monthly payments of $ 35,784, were paid in four monthly installments, which commenced on February
28, 2023 with a maturity date of May 28, 2023. Upon entering into the Premium Finance Agreement, an upfront payment of $ 210,000 was due
and paid on March 27, 2023.

 The
second Premium Finance Agreement is for $ 194,569 and accrues interest at a fixed rate of 7.5 % per annum for a total of $ 1,744 over the
term of the Premium Finance Agreement. Monthly payments of $ 19,893, were paid in four monthly installments, which commenced on February
28, 2023 with a maturity date of May 28, 2023. Upon entering into the Premium Finance Agreement, an upfront payment of $ 116,741 was due
and paid on March 27, 2023.

 For
the year ended December 31, 2023, the total expenses incurred under the Premium Finance Agreements, covering upfront, monthly and interest
payments were $ 548,665 and are included in general and administrative expenses on the accompanying statements of operations. The total
cash disbursements made under the Finance Agreements totaled $ 545,302 for the year ended December 31, 2023.

 F- 26

 NOTES

 NOTE
7. WARRANTS

 As
of December 31, 2023 and December 31, 2022, the Company had 15,237,500 Public Warrants and 8,750,000 Private Placement Warrants outstanding.

 Public
Warrants may only be exercised for a whole number of shares. No fractional Public Warrants will be issued upon separation of the Units
and only whole Public Warrants will trade. The Public Warrants will become exercisable on the later of (a) 30 days after the completion
of a Business Combination and (b) 12 months from the closing of the Initial Public Offering; provided in each case that the Company has
an effective registration statement under the Securities Act covering the Class A ordinary shares issuable upon exercise of the Public
Warrants and a current prospectus relating to them is available and such shares are registered, qualified or exempt from registration
under the securities, or blue sky, laws of the state of residence of the holder (or the Company permit holders to exercise their warrants
on a cashless basis under certain circumstances). The Company agreed that as soon as practicable, but in no event later than twenty ( 20)
business days after the closing of the initial Business Combination, the Company will use commercially reasonable efforts to file with
the SEC a registration statement covering the Class A ordinary shares issuable upon exercise of the warrants and to maintain a current
prospectus relating to those Class A ordinary shares until the warrants expire or are redeemed, as specified in the warrant agreement.
If a registration statement covering the Class A ordinary shares issuable upon exercise of the warrants is not effective by the 60th
day after the closing of the initial Business Combination, warrant holders may, until such time as there is an effective registration
statement and during any period when the Company will have failed to maintain an effective registration statement, exercise warrants
on a "cashless basis" in accordance with Section 3(a)(9) of the Securities Act or another exemption. Notwithstanding the
above, if the Class A ordinary shares are at the time of any exercise of a warrant not listed on a national securities exchange such
that they satisfy the definition of a "covered security" under Section 18(b)(1) of the Securities Act, the Company may, at
its option, require holders of Public Warrants who exercise their warrants to do so on a "cashless
basis" in accordance with Section 3(a)(9) of the Securities Act and, in the event the Company so elects, it will not be required
to file or maintain in effect a registration statement.

 The
warrants have an exercise price of $ 11.50 per share, subject to adjustments, and will expire five years after the completion of a Business
Combination or earlier upon redemption or liquidation. In addition, if (x) the Company issues additional Class A ordinary shares or equity-linked
securities for capital raising purposes in connection with the closing of the initial Business Combination at an issue price or effective
issue price of less than $ 9.20 per ordinary share (with such issue price or effective issue price to be determined in good faith by the
board of directors and, in the case of any such issuance to the Sponsor or its affiliates, without taking into account any Founder Shares
held by the Sponsor or such affiliates, as applicable, prior to such issuance) (the "Newly Issued Price"), (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 the initial Business Combination on the date of the consummation of the initial Business Combination (net of redemptions), and (z)
the volume weighted average trading price of Class A ordinary shares during the 20 trading day period starting on the trading day prior
to the day on which the Company consummates its initial 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 higher of the Market
Value and the Newly Issued Price, the $ 18.00 per share redemption trigger price described under "Redemption of warrants when the
price per Class A ordinary share equals or exceeds $ 18.00 " and "Redemption of warrants when the price per Class A ordinary
share equals or exceeds $ 10.00 " will be adjusted (to the nearest cent) to be equal to 180 % of the higher of the Market Value and
the Newly Issued Price, and the $ 10.00 per share redemption trigger price described under "Redemption of warrants when the price
per Class A ordinary share equals or exceeds $ 10.00 " will be adjusted (to the nearest cent) to be equal to the higher of the Market
Value and the Newly Issued Price.

 F- 27

 NOTES

 The
Private Placement Warrants are identical to the Public Warrants underlying the Units sold in the Initial Public Offering, except (i)
that the Private Placement Warrants and the Class A ordinary shares issuable upon exercise of the Private Placement Warrants will not
be transferable, assignable or salable until 30 days after the completion of a Business Combination, subject to certain limited exceptions,
(ii) except as described below, the Private Placement Warrants will be non-redeemable so long as they are held by the Sponsor or such
its permitted transferees and (iii) the Sponsor or its permitted transferees will have the option to exercise the Private Placement Warrants
on a cashless basis and have certain registration rights. If the Private Placement Warrants are held by someone other than the Sponsor
or its permitted transferees, the Private Placement Warrants will be redeemable by the Company in all redemption scenarios and exercisable
by such holders on the same basis as the Public Warrants.

 Redemption
of warrants when the price per Class A ordinary share equals or exceeds $ 18.00:

 Once
the warrants become exercisable, the Company may call the outstanding warrants (except as described herein with respect to the Private
Placement Warrants):

 in
 whole and not in part;

 at
 a price of $ 0.01 per warrant;

 upon
 a minimum of 30 days' prior written notice of redemption; and

 if,
 and only if, the last reported sale price (the "closing price") of Class A ordinary shares equals or exceeds $ 18.00 per
 share (as adjusted) for any 20 trading days within a 30 -trading-day period ending on the third trading day prior to the date on which
 the Company sends the notice of redemption to the warrant holders.

 The
Company will not redeem the warrants as described above unless a registration statement under the Securities Act covering the issuance
of the Class A ordinary shares issuable upon exercise of the warrants is then effective and a current prospectus relating to those Class
A ordinary shares is available throughout the 30 -day redemption period.

 Redemption
of warrants when the price per Class A ordinary share equals or exceeds $ 10.00:

 Once
the warrants become exercisable, the Company may redeem the outstanding warrants:

 in
 whole and not in part;

 at
 $ 0.10 per warrant upon a minimum of 30 days' prior written notice of redemption provided that holders will be able to exercise
 their warrants on a cashless basis prior to redemption and receive that number of Class A ordinary shares to be determined by reference
 to an agreed table based on the redemption date and the "fair market value" of Class A ordinary shares;

 if,
 and only if, the closing price of Class A ordinary shares equals or exceeds $ 10.00 per share (as adjusted) for any 20 trading days
 within the 30 -trading-day period ending three trading days before the Company sends the notice of redemption to the warrant holders;
 and

 if
 the closing price of the Class A ordinary shares for any 20 trading days within a 30 -trading-day period ending on the third trading
 day prior to the date on which the Company sends the notice of redemption to the warrant holders is less than $ 18.00 per share (as
 adjusted), the Private Placement Warrants must also be concurrently called for redemption on the same terms as the outstanding Public
 Warrants, as described above.

 The
"fair market value" of Class A ordinary shares for the above purpose shall mean the volume weighted average price of Class
A ordinary shares during the 10 trading days immediately following the date on which the notice of redemption is sent to the holders
of warrants. In no event will the warrants be exercisable on a cashless basis in connection with this redemption feature for more than
 0.361 Class A ordinary shares per warrant (subject to adjustment).

 In
no event will the Company be required to net cash settle any warrant. 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.

 F- 28

 NOTES

 NOTE
8. CLASS A ORDINARY SHARES SUBJECT TO POSSIBLE REDEMPTION

 The
Company's Class A ordinary shares feature certain redemption rights that are considered to be outside of the Company's control
and subject to the occurrence of future events. The Company is authorized to issue 500,000,000 Class A ordinary shares with a par value
of $ 0.0001 per share. Holders of the Company's Class A ordinary shares are entitled to one vote for each share. As of December
31, 2023 and December 31, 2022, there were 6,315,949 and 30,475,000, respectively, of Class A ordinary shares outstanding, which were
all subject to possible redemption and are classified outside of permanent equity in the consolidated balance sheets.

 The
Class A ordinary shares subject to possible redemption reflected on the consolidated balance sheets are reconciled on the following
table:

OF CLASS A ORDINARY SHARES SUBJECT TO POSSIBLE REDEMPTION

 Gross proceeds received from Initial Public Offering

 $
 304,750,000

 Less:

 Fair value of Public Warrants at issuance

 ( 23,922,875
)

 Offering costs allocated to Class A ordinary shares

 ( 16,172,159
)

 Plus:

 Accretion on Class A ordinary shares to redemption value

 44,479,800

 Class A ordinary shares subject to possible redemption as of December 31, 2022

 309,134,799

 Accretion on Class A ordinary shares subject to possible redemption

 ( 241,415,104
)

 Class
 A ordinary shares subject to possible redemption as of December 31, 2023

 $
 67,719,662

 NOTE
9. SHAREHOLDERS' DEFICIT

 Preference
Shares - The Company is authorized to issue 1,000,000
preference shares with a par value of $ 0.0001
per share. As of December 31, 2023 and December 31, 2022, there were no preference
shares issued or outstanding.

 Class
A Ordinary Shares - The Company is authorized to issue 500,000,000 Class A ordinary shares with a par value of $ 0.0001 per share.
Holders of the Company's Class A ordinary shares are entitled to one vote for each share. For the year ended December 31, 2023,
 24,159,051 Class A ordinary shares were redeemed by shareholders. As of December 31, 2023 and December 31, 2022, there were 6,315,949
and 30,475,000 Class A ordinary shares outstanding, all of which were subject to possible redemption and included as temporary equity
(see Note 8).

 Class
B Ordinary Shares - There were 7,618,750 shares issued and outstanding as of December 31, 2023 and December 31, 2022.

 Class
A ordinary shareholders and Class B ordinary shareholders of record are entitled to one vote for each share held on all matters to be
voted on by shareholders. Except as described below, holders of Class A ordinary shares and holders of Class B ordinary shares will vote
together as a single class on all matters submitted to a vote of the shareholders except as required by law.

 The
Class B ordinary shares will automatically convert into Class A ordinary shares at the time of the initial Business Combination at a
ratio such that the number of Class A ordinary shares issuable upon conversion of all Founder Shares will equal, in the aggregate, on
an as-converted basis, 20 % of the sum of (i) the total number of ordinary shares issued and outstanding upon completion of the Initial
Public Offering, plus (ii) the total number of Class A ordinary shares issued or deemed issued or issuable upon conversion or exercise
of any equity-linked securities (as defined herein) or rights issued or deemed issued, by the Company in connection with or in relation
to the consummation of the initial Business Combination, excluding any Class A ordinary shares or equity-linked securities exercisable
for or convertible into Class A ordinary shares issued, deemed issued, or to be issued, to any seller in the initial Business Combination
and any Private Placement Warrants issued to the Sponsor, its affiliates or any member of the management team upon conversion of Working
Capital Loans. In no event will the Class B ordinary shares convert into Class A ordinary shares at a rate of less than one to one.

 F- 29

 NOTES

 NOTE
10. FAIR VALUE MEASUREMENTS

 The
following tables present information about the Company's financial assets and liabilities that are measured at fair value on a
recurring basis as of December 31, 2023 and December 31, 2022, and indicate the fair value hierarchy of the valuation inputs the Company
utilized to determine such fair value:

OF ASSETS AND LIABILITIES MEASURED AT FAIR VALUE ON RECURRING BASIS

 Description

 Amount at

 Fair Value

 Level

 Level

 Level

 December 31, 2023

 Assets

 Investments held in Trust
 Account:

 Cash or
 Deposit Account

 $
 67,819,662

 $
 67,819,662

 $
 —

 $
 —

 Liabilities

 Derivative
 liability – forward purchase agreement

 $
 —

 $
 —

 $
 —

 $
 —

 Warrant liability –
 Public Warrants

 $
 304,750

 $
 —

 $
 304,750

 $
 —

 Warrant liability –
 Private Placement Warrants

 $
 175,000

 $
 —

 $
 175,000

 $
 —

 Description

 Amount at

 Fair Value

 Level

 Level

 Level

 December 31, 2022

 Assets

 Investments held in Trust
 Account:

 Money market
 funds

 $
 309,234,766

 $
 309,234,766

 $
 —

 $
 —

 Liabilities

 Warrant liability –
 Public Warrants

 $
 86,854

 $
 86,854

 $
 —

 $
 —

 Warrant liability –
 Private Placement Warrants

 $
 87,500

 $
 —

 $
 87,500

 $
 —

 Warrant liability

 87,500

 87,500

 Transfers
to/from Levels 1, 2, and 3 are recognized at the beginning of the reporting period. The estimated fair value of the Private
Placement Warrants was transferred from a Level 3 measurement to a Level 2 fair value measurement in December 2022, as the
Black-Scholes model used historically did not produce a meaningful result, the Company determined that the fair value of each
Private Placement Warrant is equivalent to that of each Public Warrant. The estimated fair value of the Public Warrants transferred
from a Level 1 fair value measurement to a Level 2 fair value measurement in the second quarter of 2023 due to limited trading
activity observed. There were no other transfers during the years ended December 31, 2023 and 2022.

 Level
1 assets include cash, demand deposit account and investments in money market funds that invest solely in U.S. Treasury securities.
The Company uses inputs such as actual trade data, benchmark yields, quoted market prices from dealers or brokers, and other similar
sources to determine the fair value of its investments.

 For
periods where no observable traded price was available, the fair value of the Public Warrants issued in connection with the Initial
Public Offering, the Company utilized Black-Scholes Option Pricing Model to estimate the fair value of the private warrants at each
reporting period, with changes in fair value recognized in the statements of operations.

 The
estimated fair value of the Forward Purchase Agreement was measured at fair value using a Monte Carlo simulation model, which was determined using Level 3 inputs. Inherent in a Monte Carlo
simulation are assumptions related to expected stock-price volatility, expected life, and risk-free interest rate. The Company estimates
the volatility based on historical volatility of select peer company's shares that matches the expected remaining life of the Forward Purchase Agreement.
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 Forward Purchase Agreement. The expected life of the Forward Purchase Agreement is assumed to be equivalent to their remaining contractual term. Any
changes in these assumptions can change the valuation significantly.

 The
following table provides quantitative information regarding Level 3 fair value measurements inputs at their inception date:

OF LEVEL 3 FAIR VALUE MEASUREMENT INPUTS

 Forward Purchase Agreement

 At June 30, 2023

 Exercise price

 $
 10.39

 Stock Price

 $
 10.49

 Time to Business Combination (years)

 3.34

 Risk-free rate

 4.33
 %

 Volatility rate

 4.70
 %

 Probability of completing an initial Business Combination

 %

 The
following table provides quantitative information regarding Level 3 fair value measurements inputs at their measurement date:

 Forward Purchase Agreement

 At November 27, 2023

 Exercise price

 $
 10.53

 Stock Price

 10.62

 Time to Business Combination (years)

 2.97

 Risk-free rate

 4.39
 %

 Volatility rate

 4.80
 %

 Probability of completing an initial Business Combination

 %

 On
November 27, 2023, the Company, Seller, and AIRO entered into a mutual termination agreement (the "Mutual Termination Agreement")
to terminate the Forward Purchase Agreement. Refer above to Note 4 for further discussion of the termination.

 The
following table provides a summary of the changes in the fair value of the Company's Level 3 financial instruments that are measured
at fair value on a recurring basis:

OF FINANCIAL INSTRUMENTS THAT ARE MEASURED AT FAIR VALUE ON A RECURRING BASIS

 Derivative liability - forward purchase agreement at December 31, 2022

 $
 -

 Unrealized loss

 5,473,232

 Fair value as of June 30, 2023

 $
 5,473,232

 Unrealized loss

 788,496

 Fair value as of September 30, 2023

 $

 Unrealized loss

 -

 Fair value as of November 27, 2023, immediately prior to extinguishment

 $

 Extinguishment of derivative liability - forward purchase agreement (See Note 4)

 ( 6,261,728
)

 Fair value as of November 27, 2023, upon extinguishment

 $
 -

 Unrealized loss

 -

 Fair value as of December 31, 2023

 $
 -

 As
discussed in Note 4, the Forward Purchase Agreement was terminated on November 27, 2023 and upon termination, the derivative liability
- forward purchase agreement had a fair value of $ 0 as of December 31, 2023.

 F- 30

 NOTES

 NOTE
11. SUBSEQUENT EVENTS

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

 On
January 4, 2024, The Company deposited $ 150,000
into the Company's Trust Account for its public shareholders, representing $ 0.02
per public share, allowing the Company to extend the period of time it has to consummate its initial Business Combination by one
month from January 5, 2024, to August 5, 2024. The Extension is the sixth of up to six-monthly extensions permitted under the
Company's governing documents.

 On
January 16, 2024, the Parties entered into the Second Amendment to the Business Combination Agreement (the "Second Amendment").
The Second Amendment amends the Business Combination Agreement to change the terms under which the AIRO Group Holdings Inc. shareholders
and the Sponsor shall have a contingent right to receive the Earnout Shares as additional consideration based on ParentCo's achievement
of certain revenue thresholds. The Second Amendment also amended the termination date pursuant to the original Business Combination agreement,
(the "Outside Date") from August 2, 2023, to August 5, 2024.

 On
February 1, 2024, the Company held an extraordinary general meeting of its shareholders pursuant to due notice (the "Shareholders
Meeting"). At the Shareholders Meeting, the Company's shareholders entitled to vote at the meeting cast their votes and approved
a proposal to amend the Trust Agreement to conform the procedures in the Trust Agreement by which the Company may extend the date on
which Continental must liquidate the Trust Account if the Company has not completed its initial Business Combination to the procedures
in an amendment to the Company's Amended and Restated Memorandum and Articles of Association which was also approved by the Company's
shareholders at the meeting. The Charter Amendment allows the Company to extend the Termination Date by up to six (6) one-month extensions
to August 5, 2024 (each of which we refer to as an "Extension", and such later date, the "Extended Deadline")
provided that if any Extended Deadline ends on a day that is not a business day, such Extended Deadline will be automatically extended
to the next succeeding business day. The Shareholders approved the proposal at the meeting (the "Extension Amendment Proposal")
to change the structure and cost of the Company's right to extend the date by which the Company must (i) consummate a merger, capital
stock exchange, asset acquisition, stock repurchase, reorganization or similar Business Combination involving the Company and one or
more businesses, (ii) cease its operations if it fails to complete such Business Combination, or (iii) redeem or repurchase 100% of the
Company's Class A ordinary shares included as part of the units sold in the Company's initial public offering from February
5, 2024, by up to six (6) one-month extensions to August 5, 2024, provided that if any Extended Deadline ends on a day that is not a
business day, such Extended Deadline will be automatically extended to the next succeeding business day.

 At the Shareholders Meeting, holders of 5,806,608
of the Company's Public Shares exercised their right to redeem those shares for cash at an approximate value of $ 10.80 per share, for
an aggregate of approximately $ 62.7 million. Following the payment of the redemptions, the Trust Account will have a balance of approximately
$ 5.5 million.

 On
February 5, 2024, the Parties entered into the Third Amendment to the Business Combination Agreement (the "Third Amendment").
The Third Amendment amends the Business Combination Agreement amended and removed the previous requirement of the Company to satisfy
maintain a minimum of $ 5,000,001 in net tangible assets at Closing.

 On
February 5, 2024 the Company received a notice (the "February 5, 2024 Nasdaq Notice") from the Listing Qualifications Department
of Nasdaq stating that the Company is not in compliance with Nasdaq IM-5101-2, which requires that a special purpose acquisition company
complete one or more Business Combinations within 36 months of the effectiveness of its initial public offering registration statement.
The letter stated that unless the Company requests a hearing before the Nasdaq Hearings Panel (the "Panel"), trading of the
Company's securities on the Nasdaq Capital Market would be suspended at the opening of business on February 14, 2024. The Company
requested a hearing before the Panel to request sufficient time to complete the previously disclosed proposed Business Combination with
AIRO Group Holdings. The hearing request made pursuant to the Nasdaq Notice resulted in a stay of any suspension or delisting action,
pending the hearing. However, there can be no assurance that the Company will be able to satisfy Nasdaq's continued listing requirements,
regain compliance with Nasdaq IM-5101-2, and maintain compliance with other Nasdaq listing requirements.

 On February
23, 2024, three accredited investors agreed to loan the Company an aggregate principal of $ 250,000,
(the "February 2024 Convertible Promissory Notes") $ 100,000,
$ 100,000,
and $ 50,000
 respectively, to be used for a portion of the expenses of the Company in exchange for the issuance of an aggregate 250,000
 Class A Common Stock at the closing of a Business Combination ("Share Rights"), or 100,000,
 100,000,
and 50,000
 to each of the investors. At the option of the investors, upon the closing of a Business Combination, the outstanding principal
of $ 250,000
 may be converted into a number of Class A Common Stock at a rate of one Class A Common Stock for each $ 10
 of additional capital contribution ( 25,000
 shares). The Convertible Promissory Notes are non-interest bearing and are due within five business days from the date on which
we consummate a Business Combination. If the Company does not consummate a Business Combination, the Company may use a portion of any
funds held outside the Trust Account to repay the Convertible Promissory Notes; however, no proceeds from the Trust Account may be used
for such repayment if the Company does not consummate the Business Combination.

 On March 5, 2024, the Company issued a press release
announcing that they have elected to extend the period of time it has to consummate its initial Business Combination by one month from
March 5, 2024 to April 5, 2024 (the "Extension"). The Extension is the second of up to six monthly extensions permitted under
the Company's governing documents.

 F- 31