| Significant Accounting Policies | Note
2 — Significant Accounting Policies Basis
of Presentation The accompanying unaudited condensed
financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S.
GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X of
the SEC. Certain information or footnote disclosures normally included in unaudited condensed financial statements prepared in accordance
with U.S. GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly,
they do not include all the information and footnotes necessary for a complete presentation of financial position, results of operations,
or cash flows. In the opinion of management, the accompanying unaudited condensed financial statements include all adjustments, consisting
of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows
for the periods presented. The accompanying unaudited condensed financial statements should be read
in conjunction with the Company’s Annual Report on Form 10-K for the period ended December 31, 2022, as filed with the SEC on January
30, 2023. The interim results for the three month periods ended March 31, 2023 are not necessarily indicative of the results to be expected
for the year ending December 31, 2023, or for any future period. Emerging
Growth Company Status The
Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended, (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 auditor attestation requirements of Section 404 of the
Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and
exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden
parachute payments not previously approved. Further, Section 102(b)(1) of the JOBS Act exempts
emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that
is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered
under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company
can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but
any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that
when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging
growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison
of the Company’s unaudited condensed financial statements with another public company which is neither an emerging growth company
nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential
differences in accounting standards used. Use
of Estimates The preparation of unaudited condensed financial statements in conformity
with U.S. 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 unaudited condensed financial statements. Making estimates requires
management to exercise significant judgment. Such estimates may be subject to change as more current information becomes available and
accordingly the actual results could differ significantly from those significant estimates. 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 unaudited condensed financial
statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming
events. Actual results could differ from those estimates. Cash
and Cash Equivalents The
Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents.
The Company did not have any cash equivalents as of March 31, 2023 and December 31, 2022. Marketable
Securities Held in Trust Account At
March 31, 2023 and December 31, 2022, substantially all of the assets held in the Trust Account were held in money market funds, which
are primarily invested in treasury securities. The Company’s portfolio of investments is 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.
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 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 is included in gain
on investments held in the Trust Account in the accompanying unaudited condensed statements of operations. The estimated fair values
of investments held in the Trust Account are determined using available market information. Concentration
of credit risk Financial
instruments that potentially subject the Company to concentration of credit risk consist of a cash account in a financial institution
which, at times may exceed the Federal depository insurance coverage of $ 250,000 Offering
Costs The
Company complies with the requirements of Accounting Standards Codification (“ASC”) 340-10-S99-1 and SEC Staff Accounting
Bulletin (“SAB”) Topic 5A-” Expenses of Offering”. Offering costs consist of legal, accounting, underwriting
discount and other costs that are directly related to the IPO. Accordingly, offering costs associated with the IPO totaled $ 8,333,135 2,875,000 5,031,250 426,885 500,000 Class
A Common Stock Subject to Possible Redemption The
Company accounts for its shares of Class A common stock subject to possible redemption in accordance with the guidance in ASC Topic 480
“Distinguishing Liabilities from Equity.” Shares of Class A common stock subject to mandatory redemption (if any) is classified
as a liability instrument and is measured at fair value. Conditionally redeemable shares of Class A common stock (including 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) is classified as temporary equity. At all other times, shares of Class A common
stock are classified as stockholders’ equity. The Company’s shares of Class A common stock 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,
shares of Class A common stock subject to possible redemption is presented at redemption value as temporary equity, outside of the stockholders’
equity section of the Company’s balance sheet. All
of the 14,375,000 The
Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable common stock to
equal the redemption value at the end of each reporting period. Increases or decreases in the carrying amount of redeemable common stock
are affected by charges against additional paid in capital and accumulated deficit. At March 31, 2021 and December 31, 2022, the Class
A common stock reflected in the balance sheet are reconciled in the following table: Schedule of Reconciliation of Class A Ordinary Shares
3/31/2023 12/31/2022
Gross proceeds $ 13,919,834 $ 146,625,000
Less:
Proceeds
allocated to Public Warrants at issuance - -
Redeemable
common stock issuance costs - -
NRA issuance
cost - (1,011,984 )
Redemption - (133,917,056 )
Add
Accretion of Carrying value to redemption value 80,789 2,223,875
Common stock subject to redemption $ 14,000,624 $ 13,919,834 Fair
Value of Financial Instruments The fair value of the Company’s assets and
liabilities, which qualify as financial instruments under the FASB ASC 820, “Fair Value Measurements and Disclosures,” approximates
the carrying amounts represented in the unaudited condensed financial statement, primarily due to its short-term nature. 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 include:
● 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. Accounting
for Warrants The
Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the instruments’
specific terms and applicable authoritative guidance in ASC 480 and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment
considers whether the instruments are free standing financial instruments pursuant to ASC 480, meet the definition of a liability pursuant
to ASC 480, and whether the instruments meet all of the requirements for equity classification under ASC 815, including whether the instruments
are indexed to the Company’s own common stocks and whether the instrument holders could potentially require “net cash settlement”
in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires
the use of professional judgment, was conducted at the time of warrant issuance and as of each subsequent period end date while the instruments
are outstanding. Management has concluded that the Public Warrants and Private Placement Warrants issued pursuant to the warrant agreement
qualify for equity accounting treatment. Income
Taxes The Company accounts for income taxes under ASC 740
Income Taxes (“ASC 740”). ASC 740 requires the recognition of deferred tax assets and liabilities for both the expected impact
of differences between the unaudited condensed financial statement and tax basis of assets and liabilities and for the expected future
tax benefit to be derived from tax loss and tax credit carry forwards. ASC 740 additionally requires a valuation allowance to be established
when it is more likely than not that all or a portion of deferred tax assets will not be realized. ASC
740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes
a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected
to be taken in a tax return. For those benefits to be recognized, a tax position must be more- likely-than-not to be sustained upon examination
by taxing authorities. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim
period, disclosure and transition. The
Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized
tax benefits and no amounts accrued for interest and penalties as of March 31, 2023. The Company is currently not aware of any issues
under review that could result in significant payments, accruals or material deviation from its position. The
Company has identified the United States and Florida as its only “major” tax jurisdictions. The
Company is subject to potential income tax examinations by federal and state taxing authorities. These potential examinations may include
questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions and compliance with federal and
state tax laws. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change
over the next twelve months. OmniLit Acquisition Corp. Provision for Income Taxes For the Period Ended
March 31, 2023 and the Year Ended December 31, 2022 Schedule of Income Tax Benefit
March 31, 2023 Year Ended December 31, 2022
Current taxes $ 27,427 $ 445,793
Deferred taxes - -
Income tax expense 27,427 445,793
Income (loss) before income taxes (185,219 ) 1,293,416
Effective tax rate -14.81 % 34.47 % The
accompanying notes are an integral part of the unaudited condensed financial statements Our
effective tax rate was (14.81)% for
the three months ended March 31, 2023, 34.47 %
for the year ended December 31, 2022. The effective tax rate differs from the statutory tax rate of 21 %
for the three months ended March 31, 2023 and year ended December 31, 2022, due to changes in the valuation allowance on the deferred
tax assets. New
Law and Changes On
August 16, 2022, the Inflation Reduction (the IR) Act was signed into law, which, beginning in 2023, will impose a 1 The
IR Act imposes a 1 Redemption
rights are ubiquitous to nearly all SPACs. Shareholders have the ability to require the SPAC to repurchase their shares prior to the
merger in what is known as a redemption right, essentially getting their money back. There are two possible scenarios in which redemption
rights come into play. First, they can be exercised by the shareholders themselves because they are exiting the transaction, or second,
they can be triggered because the SPAC did not find a target with which to merge. There will certainly need to be more clarity from the
Internal Revenue Service on the application of the excise tax to SPAC redemptions. Until there is further guidance from the IRS, the
Company will continue to access the potential impact of the IR Act. Based on our preliminary assessment, we do not expect a material
impact on our consolidated unaudited condensed financial statement Net
Income Per Common Stock 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 common stock and Class B common stock. Earnings and losses are shared pro rata
between the two classes of stock. The warrants are exercisable to purchase 14,108,000 For
the Three Months Ended March 31, 2023 and March 31, 2022, net income per common stock is as follows: Schedule of Net Income (loss) Per Common Share
Class A Class B Class A Class B
Three Months Ended March 31, 2023 Three Months Ended March 31, 2022
Class A Class B Class A Class B
Basic and diluted net income (loss) per share
Numerator:
Allocation of net income (loss) $ (70,164 ) $ (142,483 ) $ (128,938 ) $ (42,979 )
Denominator
Weighted-average shares outstanding 2,025,827 4,113,889 14,375,000 4,791,667
Basic and diluted net income (loss) per share $ (0.03 ) $ (0.03 ) $ (0.01 ) $ (0.01 ) Recent
Accounting Pronouncements In
August 2020, the FASB issued Accounting Standards Update (“ASU”) No. 2020-06, Debt - Debt with Conversion and Other Options
(Subtopic 470-20) and Derivatives and Hedging —Contracts in Entity’ Own Equity (Subtopic 815-40): Accounting for Convertible
Instruments and Contracts in an Entity’ Own Equity (“ASU 2020-06”), which simplifies accounting for convertible instruments
by removing major separation models required under current GAAP. The ASU also removes certain settlement conditions that are required
for equity-linked contracts to qualify for the derivative scope exception, and it simplifies the diluted earnings per share calculation
in certain areas. The provisions of ASU 2020-06 are applicable for fiscal years beginning after December 15, 2023, with early adoption
permitted no earlier than fiscal years beginning after December 15, 2020. The Company is currently evaluating the impact of ASU 2020-
06 on its financial statements. The
Company’s management does not believe that any other recently issued, but not yet effective, accounting standards if currently
adopted would have a material effect on the accompanying balance sheet. |
