v3.25.2
Member's Deficit
 3 Months Ended
Mar. 31, 2025
Member’s Deficit [Abstract]  
Member's Deficit

Note 9 — Member’s Deficit

 

Convertible Preferred Units: During the three months ended March 31, 2025, the Company issued 7,050,000 convertible preferred units in exchange for $1.00 per unit for gross proceeds of $7,050,000 (the “Q1 2025 Preferred Units”) as follows:

 

   Convertible
preferred units		   Gross proceeds 
January 2025   500,000   $500,000 
February 2025   2,700,000    2,700,000 
March 2025   3,850,000    3,850,000 
Total   7,050,000   $7,050,000 

At March 31, 2025, $1,500,000 of the gross proceeds was not yet received by the Company and reflected as a subscription receivable in stockholder’s deficit. These proceeds were received in April 2025. The Company intends to use the proceeds from the convertible preferred unit issuances as working capital to complete the Business Combination (See Note 4). The convertible preferred units are accounted for as permanent equity.

 

The Q1 2025 Preferred Units have the same rights, preferences, privileges and restrictions as the outstanding convertible preferred units with the exception of the conversion ratio, which were as follows:

 

   Convertible
Preferred Units		   Conversion
Ratio		   New EM
common shares		 
January 2025   500,000   5:1    100,000 
February 2025   2,700,000   5:1    540,000 
March 2025   1,850,000   5:1    370,000 
March 2025   2,000,000   1:1    2,000,000 
Total   7,050,000        3,010,000 

 

Additionally, three of the convertible preferred units include a CPU Share Allocation Obligation representing pro rata percentage of 1.0% of the Company’s fully diluted ownership in New EM at closing of the Business Combination equal to the percentage of the investor’s investment into the Company’s convertible preferred units the investors purchase divided by $2,000,000.