References in this report (the "Quarterly Report") to "we," "us" or the "Company" refer to Iris Acquisition Corp. References to our "management" or our "management team" refer to our officers and directors, and references to the "Sponsor" refer to Iris Acquisition Holdings LLC (formerly known as Tribe Arrow Holdings I LLC). The following discussion and analysis of the Company's financial condition and results of operations should be read in conjunction with the condensed financial statements and the notes thereto contained elsewhere in this Quarterly Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.

Special Note Regarding Forward-Looking Statements

This Quarterly Report includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the United States Securities Exchange Act of 1934 (the "Exchange Act") that are not historical facts and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements, other than statements of historical fact included in this Quarterly Report including, without limitation, statements in this "Management's Discussion and Analysis of Financial Condition and Results of Operations" regarding the Company's financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. Words such as "expect," "believe," "anticipate," "intend," "estimate," "seek" and variations and similar words and expressions are intended to identify such forward-looking statements. Such forward-looking statements relate to future events or future performance, but reflect management's current beliefs, based on information currently available. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the Risk Factors section of the Company's Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (the "SEC"). The Company's securities filings can be accessed on the EDGAR section of the SEC's website at www.sec.gov. Except as expressly required by applicable securities law, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.

Overview

We are a blank check company incorporated on November 5, 2020 as a Delaware corporation and formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. We have not selected any specific business combination target and we have not, nor has anyone on our behalf, engaged in any substantive discussions directly or indirectly, with any business combination target with respect to an initial business combination with us. We intend to effectuate our initial business combination using cash from the proceeds of our initial public offering and the private placement of the private placement warrants, the proceeds of the sale of our shares in connection with our initial business combination (pursuant to forward purchase agreements or backstop agreements we may enter into following the consummation of our initial public offering or otherwise), shares issued to the owners of the target, debt issued to bank or other lenders or the owners of the target, or a combination of the foregoing. The registration statement for the Company's IPO was declared effective by the SEC on March 4, 2021 (the "Effective Date"). On March 9, 2021, the Company consummated the IPO of 27,600,000 units (the "Units") at a price of $10.00 per Unit, for total gross proceeds of $276,000,000. Each Unit consists of one share of Class A common stock, $0.0001 par value, and one-fourth of one redeemable warrant entitling its holder to purchase one share of common stock at a price of $11.50 per share.

Simultaneously with the closing of the IPO, pursuant to the Warrant Purchase Agreements, the Company completed the private sale of an aggregate of 5,013,333 Warrants (each a "Private Placement Warrant") to the Sponsor and Cantor Fitzgerald & Co. at a purchase price of $1.50 per Private Placement Warrant. The sale of the Private Placement Warrants generated gross proceeds to the Company of $7,520,000.

Since completing the Company's IPO, the Company has reviewed, and continues to review, a number of opportunities to enter into a Business Combination with an operating business, but the Company is not able to determine at this time whether it will complete a Business Combination with any of the target businesses that it has reviewed or with any other target business. The Company intends to effectuate its Business Combination using cash from the proceeds of its IPO and the proceeds of the Private Placements, its capital stock, debt, or a combination of cash, stock and debt.

On June 1, 2022, Tribe Capital Markets LLC ("Tribe") withdrew as a member of the Sponsor. In connection with the withdrawal of Tribe as a member of the Sponsor: (1) on July 26, 2022 the following actions occurred: (i) Arjun Sethi resigned in his capacity as



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Chairman and Chief Executive Officer of Iris Acquisition Corp (formerly known as Tribe Capital Growth Corp I), (ii) Henry Ward resigned from his role as an independent director of the Company, (iii) Omar Chohan resigned from his role as Chief Financial Officer of the Company, and (v) Ted Maidenberg resigned from his role as Secretary of the Company; and (2) on July 27, 2022 the following actions occurred (i) the Sponsor changed its name from Tribe Arrow Holdings I LLC, to Iris Acquisition Holdings LLC, and (ii) the Company's strategy to identify a target business was revised as described in Item 8.01 of its Form 8-K filed on July 27, 2022. The director and officer departures were not the result of any disagreement between the Company and such individuals on any matter relating to the Company's operations, policies, or practices.

Effective July 26, 2022, the board of directors of the Company appointed (i) Sumit Mehta to serve as the Company's Chief Executive Officer, (ii) Lisha Parmar to serve as the Company's Chief Financial Officer, and (iii) Omkar Halady to serve as the Vice President of the Company. Also, Rohit Nanani was elevated from member to Chairman of the board of directors of the Company.

Results of Operations

We have neither engaged in any operations nor generated any revenues to date. Our only activities for the period from November 5, 2020 (inception) through June 30, 2022 were organizational activities, those necessary to prepare for the IPO, and identifying a target company for our initial Business Combination. We generate non-operating interest income from cash and cash equivalents marketable securities held in the Trust Account and changes in the value of warrant liabilities. We incur expenses as a result of being a public company (for legal, financial reporting, accounting and auditing), as well as for due diligence expenses. We will not be generating any operating revenues until the closing and completion of our initial Business Combination.

For the three months ended June 30, 2022, we had net income of approximately $3,712,688, which consisted of a $4,211,660 gain on the change in fair value of warrants and interest income on investments held in the Trust Account of $161,103, partially offset by unrealized losses on investments held in the Trust Account of $368,082 and $291,993 of formation and operating costs.

For the three months ended June 30, 2021, we had a net loss of $161,064, which consisted of approximately $395,233 of formation and operating costs, partially offset by a gain on the change in fair value of warrants $229,859 and interest income on investments held in the Trust Account for $4,310.

For the six months ended June 30, 2022, we had net income of $7,528,415, which consisted of a change in the fair value of warrant of $8,605,210 and interest income on investments held in the Trust Account of $167,910, partially offset by $876,623 of formation and operating costs and unrealized losses on investments held in the Trust Account of $368,082.

For the six months ended June 30, 2021, we had a net loss of $2,124,477, which consisted of $793,254 of formation and operating costs, a loss on the change in fair value of warrants of $430,086, $606,622 in expensed offering costs, and $298,825 in excess fair value of Private Warrants over proceeds received, partially offset by interest income on investments held in the Trust Account of $4,310.

Liquidity and Capital Resources

We consummated our IPO on March 9, 2021. As of June 30, 2022 and December 31, 2021, we had $50,429 and $336,228 in our operating bank account, negative working capital of approximately $1,395,091 and $758,467, which excludes franchise taxes payable which may be paid from interest earned on the Trust Account. In order to fund working capital deficiencies or finance transaction costs in connection with a Business Combination, our Sponsor or an affiliate of the Sponsor or certain of our officers and directors may, but are not obligated to, provide us Working Capital Loans. As of June 30, 2022 and December 31, 2021, there were no Working Capital Loans outstanding.

For the six months ended June 30, 2022, net cash used in operating activities was $585,799 which was due to a change in fair value of warrant liability of $8,605,210 and interest earned on investments held in the Trust Account of $167,910, which was partially offset by our net income of $7,528,415, a change in operating assets and liabilities of $290,824 and an unrealized loss on investments held in the Trust Account of $368,082.

For the six months ended June 30, 2021, net cash used in operating activities was $859,128, which was due to our net loss of $2,124,477, change in operating assets and liabilities of $65,874, and interest earned on investments held in the Trust Account for $4,310; which was partially offset by offering costs of $606,622, a change in fair value of warrant liability of $430,086, and excess of fair value of Private Warrants over proceeds received for $298,825.


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For the six months ended June 30, 2022 there no cash flows from investing activities.

For the six months ended June 30, 2021, there was $276,000,000 used in net cash from investing activities which was a result of cash being deposited into the Trust Account.

For the six months ended June 30, 2022, net cash provided by financing activities was $300,000 which was a result of the proceeds from the promissory note from a related party for $300,000.

For the six months ended June 30, 2021, net cash provided by financing activities was $277,552,107, which was a result of proceeds from the sale of Units, net of offering costs for $275,552,107, proceeds from the issuance of Private Warrants for $7,520,000 partially offset by the payment of the underwriter discount for $5,520,000.

In connection with the Company's assessment of going concern considerations in accordance with FASB Accounting Standards Update ("ASU") 2014-15, Disclosures of Uncertainties about an Entity's Ability to Continue as a Going Concern, management has determined that the Company has and will continue to incur significant costs in pursuit of its acquisition plans which raises substantial doubt about the Company's ability to continue as a going concern. Moreover, we may need to obtain additional financing either to complete our initial Business Combination or because we become obligated to redeem a significant number of our Public Shares upon consummation of our initial Business Combination, in which case we may issue additional securities or incur debt in connection with such Business Combination. Subject to compliance with applicable securities laws, we would only complete such financing simultaneously with the completion of our initial Business Combination. If we are unable to complete our initial Business Combination because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the Trust Accounts. In addition, following our initial Business Combination, if cash on hand is insufficient, we may need to obtain additional financing in order to meet our obligations.

In connection with the Company's assessment of going concern considerations in accordance with FASB ASC 205-40, Presentation of Financial Statements-Going Concern, management has determined that if the Company is unable to complete a Business Combination by March 8, 2023 (the "Combination Period"), then the Company will cease all operations except for the purpose of liquidating. The date for mandatory liquidation and subsequent dissolution as well as the Company's working capital deficit raise 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 the Combination Period. The Company intends to complete a Business Combination before the mandatory liquidation date.

Critical Accounting Policies

Management's discussion and analysis of our financial condition and results of operations is based on our condensed financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these condensed financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities in our condensed financial statements. On an ongoing basis, we evaluate our estimates and judgments, including those related to fair value of financial instruments and accrued expenses. We base our estimates on historical experience, known trends and events and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. We have identified the following as our critical accounting policies:

Marketable Securities Held in the Trust Account

Our portfolio of investments held in the Trust Account are invested in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act of 1940, as amended (the "Investment Company Act"), which invest only in direct U.S. government treasury obligations. The investments held in the Trust Account are classified as trading securities. Trading securities are presented on the balance sheet 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 net gain on investments held in Trust Account in the accompanying condensed statements of operations. The estimated fair values of investments held in the Trust Account are determined using quoted market prices.

JOBS Act

On April 5, 2012, the JOBS Act was signed into law. The JOBS Act contains provisions that, among other things, relax certain reporting requirements for qualifying public companies. We qualify as an "emerging growth company" under the JOBS Act and are allowed to


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comply with new or revised accounting pronouncements based on the effective date for private (not publicly traded) companies. We elected 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, our condensed financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.

As an "emerging growth company", we are not 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 condensed 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 IPO or until we are no longer an "emerging growth company," whichever is earlier.

Common Stock Subject to Possible Redemption

We account for shares of common stock subject to possible redemption in accordance with the guidance in FASB Accounting Standards Codification ("ASC") Topic 480, Distinguishing Liabilities from Equity. Common stock subject to mandatory redemption (if any) is classified as a liability instrument and is measured at fair value. Conditionally redeemable common stock (including common stock that features redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company's control) is classified as temporary equity. At all other times, shares of common stock are classified as a component of stockholders' equity. Our common stock features certain redemption rights that are considered to be outside of the Company's control and subject to the occurrence of uncertain future events. Accordingly, common stock subject to possible redemption is presented at redemption value as temporary equity, outside of the stockholders' equity section of the balance sheet.

Derivative Financial Instruments

We evaluate our financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with ASC Topic 815, Derivatives and Hedging. Derivative instruments are recorded at fair value on the grant date and re-valued at each reporting date, with changes in the fair value reported in the statements of operations. Derivative assets and liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date. We have determined the warrants are a derivative instrument.

ASC 470-20, Debt with Conversion and Other Options, addresses the allocation of proceeds from the issuance of convertible debt into its equity and debt components. We apply this guidance to allocate IPO proceeds from the Units between Class A common stock and warrants, using the residual method by allocating IPO proceeds first to fair value of the warrants and then the Class A common stock.

Recent Accounting Standards

Our management does not believe that any recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying condensed financial statements.

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