Quarterly report pursuant to Section 13 or 15(d)

Related Party Transactions

Related Party Transactions
9 Months Ended
Sep. 30, 2022
Related Party Transactions [Abstract]  
Related Party Transactions
Note 5 - Related Party Transactions
Founder Shares and Private Placement Warrants
In August 2020, the Company issued 8,625,000 shares of Class B common stock to the Sponsor for $25,000 in cash, or approximately $0.003 per share (the “Founder Shares”). On November 30, 2020 the Sponsor surrendered an aggregate of 1,437,500 Founder Shares, which were cancelled. On December 8, 2020, as part of an upsizing of the IPO, the Company effected a stock split in which each issued share of Class B common stock that was outstanding was converted into one and forty-four
shares of Class B common stock, resulting in an aggregate of 7,503,750 shares of Class B common stock issued and outstanding. All shares and associated amounts have been retroactively restated to reflect the share surrender and stock split. The Founder Shares included an aggregate of up to 978,750 shares subject to forfeiture if the over-allotment option was not exercised by the underwriters in full. On December 11, 2020, the underwriters partially exercised their over-allotment option, hence, 975,000 Founder Shares were no longer subject to forfeiture and 3,750 Founder Shares were forfeited for no consideration.
The Sponsor has agreed not to transfer, assign or sell its Founder Shares until the earlier to occur of (A) one year after the completion of the Company’s initial Business Combination or (B) subsequent to the Company’s initial Business Combination, (x) if the last sale price of the Company’s Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any
day period commencing at least 150 days after the Company’s initial Business Combination, or (y) the date on which the Company completes a liquidation, merger, capital stock exchange or other similar transaction that results in all of its stockholders having the right to exchange their shares of common stock for cash, securities or other property.
Simultaneously with the closing of the IPO, the Sponsor purchased an aggregate of 8,000,000 Private Placement Warrants for an aggregate purchase price of $8,000,000, or $1.00 per Private Placement Warrant (see Note 4).
Promissory Note - Related Party
On June 2, 2021, the Company issued an unsecured promissory note to the Sponsor for an aggregate available principal amount of $300,000 to be used for a portion of the expenses of the Business Combination. This loan is
bearing, unsecured and due at the earlier of December 31, 2021 or the closing of the Business Combination. The Company had no borrowings under the promissory note as of September 30, 2022 and December 31, 2021.
Due to Related Party
As of September 30, 2022 and December 31, 2021, the Company had due to related party balances of $212,089 and $122,089, which consisted of $217,667 and $127,667 for the administrative service fees incurred (see below), net of $5,578 and $5,578 receivable from related party, respectively.
Advances from Sponsor
On November 16, 2021, January 18, 2022, February 1, 2022, Apri1 25, 2022, May 2, 2022, May 13, 2022, June 3, 2022, June 6, 2022, and June 16, 2022, the Company received $100,000, $100,000, $250,000, $50,000, $100,000, $20,000, $25,000, $177,423 and $66,000 advances from the Sponsor or its affiliates to be used for working capital purposes, respectively. The advances are
bearing and due on demand. At September 30, 2022 and December 31, 2021, the Company owed the Sponsor or its affiliates $888,423 and $100,000 related to these advances, respectively.
Working Capital Loans
In order to finance transaction costs in connection with an initial 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 an initial Business Combination, the Company will repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. Otherwise, the Working Capital Loans would be repaid only out of funds held outside the Trust Account. In the event that an initial Business Combination does not close, the Company may use a portion of the working capital held outside the Trust Account to repay the Working Capital Loans but no proceeds from the Trust Account would be used to repay the Working Capital Loans. Up to $1,500,000 of such Working Capital Loans may be convertible into warrants at a price of $1.00 per warrant at the option of the lender. The warrants would be identical to the Private Placement Warrants, including as to exercise price, exercisability and exercise period. At September 30, 2022 and December 31, 2021, no Working Capital Loans were outstanding.
Administrative Service Fee
The Company has agreed, commencing on the date of the securities of the Company are first listed on The Nasdaq Capital Market, to pay an affiliate of the Company’s Sponsor a monthly fee of an aggregate of $10,000 for office space, utilities and secretarial and administrative support. The payment of the administrative service fee was suspended starting in May 2022. Upon completion of the Company’s initial Business Combination or its liquidation, the Company will cease paying these monthly fees. The Company incurred $30,000 and $60,000 of administrative service fees for three and nine months ended September 30, 2022, respectively. The Company recorded $30,000 and $60,000 for the administrative service fee for the three and nine months ended September 30, 2021, respectively.
At September 30, 2022 and December 31, 2021, due to related party includes amounts of $217,667 and $127,667
, respectively,
incurred under this arrangement.
In connection with the stockholder vote to approve an amendment to the Company’s Amended and Restated Certificate of Incorporation to extend the Combination Period, on June 7, 2022 and June 10, 2022, the Company and Gary Teplis, the Company’s Chief Executive Officer, entered into
agreements (collectively, the
Agreements”) with certain Company stockholders (the
Stockholders”) holding an aggregate of approximately 1.4 million shares of Class A common stock. Pursuant to the
Agreements, the
Stockholders agreed to (a) not redeem any shares of Class A common stock held by them on the date of the
Agreements in connection with the vote to approve the extension to the Combination Period, (b) vote all of such shares in favor of the extension to the Combination Period and any initial business combination presented by the Company for approval by its stockholders, and (c) not Transfer (as such term is defined in the
Agreements) any of such shares until the earlier of April 11, 2023 and consummation of the Company’s initial business combination (the “Termination Date”).
On June 14, 2022, the Company paid an aggregate of
to the Non-Redeeming Stockholder, which was funded through advances from Sponsor.