SPECIAL MEETING OF STOCKHOLDERS
OF
KINGSWOOD ACQUISITION CORP.
SUPPLEMENT NO. 2
TO THE
PROXY STATEMENT
OF
KINGSWOOD ACQUISITION CORP.
This is a supplement (this “Supplement
No. 2”) to the Proxy Statement (the “Proxy Statement”) first sent or given to stockholders of Kingswood Acquisition
Corp. (“we”, “us”, “our”, or the “Company”) on or about October
27, 2022, for use at the special meeting of stockholders of Company scheduled to be held on November 18, 2022, at 10:00 a.m., Eastern
Time, via live webcast at the following address https://www.cstproxy.com/kingswoodacquisition/ext2022.
This Supplement No. 2 has been filed with the
Securities and Exchange Commission (“SEC”) because on November 18, 2022, if the Extension Amendment Proposal (“Extension
Proposal”) is approved and the Extension Proposal becomes effective, Wentworth Management Services LLC, a Delaware limited liability
company (the “Wentworth”) will deposit into the Company’s trust account: the greater of (a) $69,218.35 or (b)
$0.05 per month (“Monthly Contribution”) for each public share of Company that is not redeemed in connection with the
Special Meeting for an aggregate deposit of up to the greater of (x) $415,310.10 or (y) $0.30 for each public share of Company that is
not redeemed in connection with the Special Meeting (if Company takes until May 23, 2023 to complete an initial business combination).
Assuming the Extension Proposal is approved, the
first Monthly Contribution will be deposited in the trust account within five (5) calendar days following the special meeting. Each subsequent
Monthly Contribution will be deposited in the trust account within five (5) calendar days from the 23rd day of such calendar month (or
portion thereof).
The Monthly Contributions are conditioned upon
the implementation of the Extension Proposal. The Monthly Contributions will not occur if the Extension Proposal is not approved, or the
Extension Proposal is not completed. The Company or its designees will have the sole discretion whether to continue extending for additional
calendar months until the Extended Date and if Company determines not to continue extending for additional calendar months, Wentworth’s
obligation to make additional Monthly Contributions will terminate.
On August 16, 2022, President Biden signed into
law the Inflation Reduction Act of 2022 (“IRA”), which, among other things, imposes a 1% excise tax on the fair market
value of stock repurchased by “covered corporations” beginning in 2023, with certain exceptions (the “Excise Tax”).
The Excise Tax is imposed on the repurchasing corporation itself, not its stockholders from which the stock is repurchased. Because we
are a Delaware corporation and our securities are trading on the OTC Markets Group Inc. exchange, we believe that we are a “covered
corporation” for this purpose. The amount of the Excise Tax is generally 1% of the fair market value of the shares repurchased at
the time of the repurchase, net of the fair market value of certain new stock issuances during the same taxable year. The U.S. Department
of Treasury has been given authority to provide regulations and other guidance to carry out and prevent the abuse or avoidance of the
Excise Tax; however, no guidance has been issued to date. It is uncertain whether, and to what extent, the Excise Tax could apply to any
redemptions of our public shares after December 31, 2022, including any redemptions in connection with a business combination or in the
event we do not consummate a business combination by the Extended Date.
As described under the “Extension
Amendment Proposal”, if the Extension Proposal is not approved and we do not consummate our initial business combination by
November 24, 2022, as contemplated by our IPO prospectus and in accordance with our amended Charter, our public stockholders will
have the right to require us to redeem their public shares. Because any redemption that occurs as a result of the Extension Proposal
would occur before December 31, 2022, we would not be subject to the Excise Tax as a result of any redemptions in connection with
the Extension Proposal. However, if our stockholders approve the Extension Proposal, then any redemption or other repurchase that we
make that occurs after December 31, 2022, may be subject to the Excise Tax. Whether and to what extent we would be subject to the
Excise Tax would depend on a number of factors, including (i) the fair market value of the redemptions and repurchases in connection
with our initial business combination, (ii) the structure of a business combination, (iii) the nature and amount of any
“PIPE” or other equity issuances in connection with a business combination (or otherwise issued not in connection with
the business combination but issued within the same taxable year of a business combination) and (iv) the content of regulations and
other guidance from the U.S. Department of Treasury.
In addition, because the excise tax would be payable
by us, and not by the redeeming holder, the mechanics of any required payment of the excise tax have not been determined. The foregoing
could cause a reduction in the cash available on hand to complete a business combination and in our ability to complete a business combination.
We will not use the proceeds placed in the Company’s trust account and the interests earned thereon to pay any Excise Tax that may
be imposed on the Company pursuant to any current, pending, or future rules or laws, including without limitation under the IRA on any
redemptions or stock buybacks by the Company or under any scenario, including liquidation of the Company.
About Kingswood Acquisition Corp.
We are a blank check company incorporated under
the laws of the State of Delaware on July 27, 2020, for the purpose of effecting a merger, share exchange, asset acquisition, stock purchase,
recapitalization, reorganization, or similar business combination with one or more businesses, which we refer to throughout this proxy
statement as our initial business combination. While we may pursue our initial business combination target in any stage of its corporate
evolution or in any industry or sector, we are focusing our search on companies with favorable growth prospects and attractive returns
on invested capital.
Additional Information and Where to Find It
The definitive proxy statement has been mailed
to the Company’s stockholders. INVESTORS AND SECURITY HOLDERS ARE ADVISED TO READ THE DEFINITIVE PROXY STATEMENT AND OTHER RELEVANT
MATERIALS BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT THE COMPANY. Investors and security holders may obtain free copies of these
documents and other documents filed with the SEC at the SEC’s web site at www.sec.gov. In addition, the documents filed by Company
with the SEC may be obtained free of charge by contacting Company at Michael Nessim, Chief Executive Officer, Kingswood Acquisition Corp.,
Email: mnessim@kingswoodus.com, (212) 404-7002.
Participants in the Solicitation
Company and its sponsor, officers and directors
may be deemed to be participants in the solicitation of proxies from Company stockholders. Information about Company’s sponsor,
officers and directors and their ownership of Company common shares is set forth in the proxy statement for Company’s Special Meeting
of Stockholders, which was filed with the SEC on October 25, 2022, and in Company’s Annual Report on Form 10-K for the year ended
December 31, 2021, which was filed with the SEC on March 31, 2022. Investors and security holders may obtain more detailed information
regarding the direct and indirect interests of the participants in the solicitation of proxies in connection with the transaction by reading
the preliminary and definitive proxy statements regarding the transaction, which will be filed by Company with the SEC.
Non-Solicitation
This Current Report on Form 8-K is not a proxy
statement or solicitation of a proxy, consent or authorization with respect to any securities or in respect of the proposed Extension
Proposal shall not constitute an offer to sell or a solicitation of an offer to buy the securities of the Company, nor shall there be
any sale of any such securities in any state or jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration
or qualification under the securities laws of such state or jurisdiction. No offer of securities shall be made except by means of a prospectus
meeting the requirements of Section 10 of the Securities Act of 1933, as amended.
