MURPHY CANYON ACQUISITION CORP. INDEX TO FINANCIAL STATEMENT Page Audited Financial Statement of Murphy Canyon Acquisition Corp.: Report of Independent Registered Public Accounting Firm F-2 Balance Sheet as of

CANYON ACQUISITION CORP.

TO FINANCIAL STATEMENT

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

the Shareholder and Board of Directors of

Canyon Acquisition Corp.

on the Financial Statement

have audited the accompanying balance sheet of Murphy Canyon Acquisition Corp. (the "Company") as of February 7, 2022 and

the related notes (collectively referred to as the "financial statement"). In our opinion, the financial statement presents

fairly, in all material respects, the financial position of the Company as of February 7, 2022 in conformity with accounting principles

generally accepted in the United States of America

financial statement is the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's

financial statement based on our audit. 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.

conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain

reasonable assurance about whether the financial statement is 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 audit

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.

audit included performing procedures to assess the risks of material misstatement of the financial statement, 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 financial statement. Our audit also included evaluating the accounting principles used and significant

estimates made by management, as well as evaluating the overall presentation of the financial statement. We believe that our audit provides

a reasonable basis for our opinion.

have served as the Company's auditor since 2021.

CANYON ACQUISITION CORP.

accompanying notes are an integral part of this financial statement.

CANYON ACQUISITION CORP.

to financial statement

1 - DESCRIPTION OF ORGANIZATION, BUSINESS OPERATIONS AND LIQUIDITY AND MANAGEMENT'S PLAN

Canyon Acquisition Corp. (the "Company") was incorporated in Delaware on October 19, 2021. The Company was 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 (the "Business Combination"). The Company is not limited to a particular industry or sector for

purposes of consummating a Business Combination. The Company is an early stage and emerging growth company and, as such, the Company

is subject to all of the risks associated with early stage and emerging growth companies.

of February 7, 2022, the Company had not commenced any operations. All activity for the period from October 19, 2021 (inception) through

February 7, 2022 relates to the Company's formation and the initial public offering ("Initial Public Offering"), which

is described below. 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 interest income from the proceeds derived from the Initial

Public Offering. The Company has selected December 31 as its fiscal year end.

registration statement for the Company's Initial Public Offering (the "Registration Statement") was declared effective

on February 2, 2022. On February 7, 2022, the Company consummated the Initial Public Offering of 13,225,000 units ("Units")

and, with respect to the common stock included in the Units being offered, the ("Public Shares"), generating gross

proceeds of $132,250,000, which is described in Note 3.

with the closing of the Initial Public Offering, the Company consummated the sale of 754,000 units (the "Private Placement Units")

at a price of $10.00 per Private Unit in private placements to Murphy Canyon Acquisition Sponsor LLC (the "Sponsor").

of February 7, 2022, transaction costs amounted to $7,738,161 consisting of $2,645,000 of underwriting fees, $4,628,750 of

deferred underwriting fee (which are held in a trust account with Wilmington Trust Company acting as trustee (the "Trust Account")),

and $464,411 of Initial Public Offering costs. These costs were charged to additional paid-in capital or accumulated deficit to

the extent additional paid-in capital is fully depleted upon completion of the Public Offering. As described in Note 6, the $4,628,750

deferred underwriting fee is contingent upon the consummation of a Business Combination within 12 months from the closing, unless

the time period to consummate a Business Combination is extended pursuant to the Company's amended and restated certificate of

the closing of the Initial Public Offering on February 7, 2022, an amount of $139,790,000 from the net proceeds of the sale of the

Units in the Initial Public Offering and the Private Placement (as defined in Note 4) was placed in the Trust Account. This resulted

in an overfunding of the Trust Account of $4,895,000. As such, subsequent to the initial funding of the Trust Account, $2,000,000

was transferred to the Company's operating cash account and $2,895,000 was used to pay offering costs. The funds

held in the Trust Account may be invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the

Investment Company Act of 1940, as amended (the "Investment Company Act"), with a maturity of 185 days or less or in any

open-ended investment company that holds itself out as a money market fund selected by the Company meeting the conditions of Rule 2a-7

of the Investment Company Act, as determined by the Company, until the earlier of: (i) the completion of a Business Combination

or (ii) the distribution of the Trust Account, as described below.

Company's management has broad discretion with respect to the specific application of the net proceeds of the 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. There is no assurance that the Company will be able to complete a Business Combination successfully.

The Company must complete one or more initial Business Combinations 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 (as defined below) (excluding the deferred underwriting commissions

and taxes payable on the interest earned on the Trust Account). The Company will only complete a Business Combination if the post-transaction

company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest

in the target business sufficient for it not to be required to register as an investment company under the Investment Company Act of

1940, as amended (the "Investment Company Act"). Upon the closing of the Initial Public Offering, management has agreed that

an amount equal to at least $10.00 per Unit sold in the Initial Public Offering, including proceeds of the Private Placement Warrants,

will be held in a trust account ("Trust Account"), located in the United States and invested only in 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 in any open-ended

investment company that holds itself out as a money market fund selected by the Company meeting certain conditions of Rule 2a-7 of the

Investment Company Act, as determined by the Company, until the earlier of: (i) the completion of a Business Combination and (ii) the

distribution of the funds held in the Trust Account, as described below.

Company will provide the holders of the outstanding Public Shares (the "Public Stockholders") with the opportunity to redeem

all or a portion of their Public Shares either (i) in connection with a stockholder meeting called to approve the Business Combination

or (ii) by means of a tender offer in connection with the Business Combination. The decision as to whether the Company will seek stockholder

approval of a Business Combination or conduct a tender offer will be made by the Company. The Public Stockholders will be entitled to

redeem their Public Shares for a pro rata portion of the amount then in the Trust Account (initially anticipated to be $10.20 per Public

Share, plus any pro rata interest then in the Trust Account, net of taxes payable). There will be no redemption rights upon the completion

of a Business Combination with respect to the Company's warrants. All of the Public Shares contain a redemption feature which allows

for the redemption of such Public Shares in connection with our liquidation, if there is a stockholder vote or tender offer in connection

with our initial business combination and in connection with certain amendments to our amended and restated certificate of incorporation.

In accordance with U.S. Securities and Exchange Commission ("SEC") and its guidance on redeemable equity instruments,

which has been codified in ASC 480-10-S99, redemption provisions not solely within the control of a company require common stock subject

to redemption to be classified outside of permanent equity. Given that the Public Shares will be issued with other freestanding instruments

(i.e., public warrants), the initial carrying value of Class A common stock classified as temporary equity will be the allocated proceeds

determined in accordance with ASC 470-20. The Class A common stock is subject to ASC 480-10-S99. If it is probable that the equity instrument

will become redeemable, we have the option to either (i) accrete changes in the redemption value over the period from the date of issuance

(or from the date that it becomes probable that the instrument will become redeemable, if later) to the earliest redemption date of the

instrument or (ii) recognize changes in the redemption value immediately as they occur and adjust the carrying amount of the instrument

to equal the redemption value at the end of each reporting period. We have elected to recognize the changes immediately. The accretion

or remeasurement will be treated as a deemed dividend (i.e., a reduction to retained earnings, or in absence of retained earnings, additional

paid-in capital). While redemptions cannot cause the Company's net tangible assets to fall below $5,000,001, the Public Shares

are redeemable and will be classified as such on the balance sheet until such date that a redemption event takes place.

Company will not redeem Public Shares in an amount that would cause its net tangible assets to be less than $5,000,001 (so that it does