Note 4 – Related Party Transactions

Class B Founder Shares

On February 24, 2021, the Sponsor paid $25,000, or approximately $0.004 per share, to cover certain offering costs in consideration for 5,750,000 Class B ordinary shares, par value $0.0001 (the “Founder Shares”). Up to 750,000 Founder Shares were subject to forfeiture by the Sponsor depending on the extent to which the underwriter’s over-allotment option was exercised. At the close of the Initial Public Offering, the underwriter exercised its overallotment option in full and these Founder Shares were no longer subjected to forfeiture as of October 29, 2021.

On September 29, 2021, the Sponsor effected a surrender of 718,750 Class B ordinary shares to the Company for no consideration, resulting in an aggregate of 5,031,250 of Class B ordinary shares outstanding. Prior to the initial investment in the Company of $25,000 by the Sponsor, we had no assets, tangible or intangible. The per share purchase price of the Founder Shares was determined by dividing the amount of cash contributed to the Company by the aggregate number of Founder Shares issued. In connection with the First Extension, on April 28, 2023, all 5,031,250 Class B ordinary shares were converted from Class B ordinary shares into Class A ordinary shares on a one-for-one basis for no consideration.

Private Placement Warrants

Simultaneously with the closing of the Initial Public Offering, the Company consummated the Private Placement of 10,156,250 Private Placement Warrants at a price of $1.00 per Private Placement Warrant to the Sponsor, generating proceeds of $10,156,250.

Each warrant is exercisable to purchase one Class A ordinary share at a price of $11.50 per share. Certain proceeds from the sale of the Private Placement Warrants were added to the proceeds from the Initial Public Offering held in the Trust Account. If the Company does not complete a Business Combination by the Extended Date, the proceeds from the sale of the Private Placement Warrants will be used to fund the redemption of the Public Shares (subject to the requirement of applicable law) and the Private Placement Warrants will expire worthless.

Promissory Notes

Working Capital Loan

The Sponsor has committed to loan us up to $1,500,000 for working capital loans (as amended and restated, the “Working Capital Loan”). If the Company completes an initial business combination, the Company would repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. In the event that an initial business combination does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. The Working Capital Loans bear no interest and would either be repaid upon consummation of an initial business combination or, at the Sponsor’s discretion. In addition, up to $1,500,000 of such Working Capital Loans may be convertible into Private Placement Warrants of the Company at a price of $1.00 per warrant.

On April 1, 2024, the Company amended and restated the Working Capital Loan to extend the maturity date thereunder to the earlier of (i) thirty (30) months after the closing of the Initial Public Offering and (ii) the consummation of a Business Combination. The Company also increased the principal amount from $1,500,000 to $1,840,616.

On April 26, 2024, the Company further amended and restated the Working Capital Loan and extended the maturity date thereunder to the earlier of (i) forty-two (42) months after the closing of the Initial Public Offering and (ii) the effective date of a Business Combination.

On April 25, 2025, the Company amended and restated the Working Capital Loan to extend the maturity date thereunder to the earlier of (i) maturity date of April 29, 2026 or (ii) the consummation of a Business Combination. The Company also increased the principal amount from $1,840,616 to $2,500,000.

On April 28, 2026, the Company amended and restated the Working Capital Loan to extend the maturity date thereunder to the earlier of (1) maturity date of April 29, 2027 or (ii) the consummation of a Business Combination. 

As of June 30, 2025 and December 31, 2024, the Company had $2,059,076 and $1,641,875 outstanding under the Working Capital Loans respectively.

Extension Loans

In connection with the First Extension, the Sponsor agreed to loan the Company an amount equal to the lesser of (i) $0.04 per Public Share multiplied by the number of Public Shares then outstanding and (ii) $160,000, for each calendar month beginning on April 30, 2023 until the earlier of (i) the completion of a Business Combination and (ii) the Company’s liquidation (each, a “Contribution”).

In connection with the first Contribution, on May 4, 2023, the Company issued a non-interest bearing note to the Sponsor with a principal amount up to $1.92 million for working capital expenses (as discussed in Note 1). The Sponsor may convert the outstanding principal into Private Placement Warrants at $1.00 per warrant. This note bears no interest and is repayable in full upon the earlier of the consummation of the Company’s initial Business Combination, or the liquidation of the Company. If the Company does not consummate an initial Business Combination by the First Extended Date, the note will be repaid only from funds held outside of the Trust Account or will be forfeited, eliminated or otherwise forgiven. The maturity date of this loan is the earlier of (i) the date in which the Company consummates an initial business combination and (ii) the Company’s liquidation date.

On April 26, 2024, in connection with the Second Extension Meeting, the Company issued a non-interest bearing promissory note to the Sponsor in the amount of $1.08 million in connection with the Second Extension Contributions. The maturity date of this loan is the earlier of (i) the Company’s liquidation date and (ii) the effective date of a Business Combination.

On April 25, 2025, in connection with the Third Extension Meeting, the Company issued a non-interest bearing promissory note to the Sponsor in the amount of $1.5 million (the “Third Extension Note”) in connection with the Third Extension Contributions. The maturity date of this loan is the earlier of (i) the date in which the Company consummates an initial business combination and (ii) the Company’s liquidation date.

On April 28, 2026, the Company also issued a new promissory note to the Sponsor with a principal amount up to $1,200,000 (the “Fourth Extension Note”). The Fourth Extension Note bears no interest and is repayable in full upon the earlier of (i) the date of the consummation of the Company’s initial business combination and (ii) the Company’s liquidation date 

As of June 30, 2025 and December 31, 2024, the Sponsor has advanced $3,078,076 and $2,370,000 respectively to the Company. As of June 30, 2025 and December 31, 2024, extension contributions of $151,395 and $360,000 respectively were due from Sponsor, which is not included in the outstanding balance of the extension loans.

The Company determined that the conversion option on the first extension and working capital notes should be bifurcated and accounted for as a derivative in accordance with ASC 815. As of June 30, 2025, although the closing price of the Company’s Class A ordinary shares exceeded the exercise price of the underlying warrants. In estimating the fair value of the conversion option, the Company considered, among other factors, the probability of an initial business combination and the likelihood of the Sponsor electing to convert the Promissory Notes into warrants. Based on this assessment, the Company determined that the probability of conversion was de minimis despite the warrants being in-the-money. Accordingly, the Company concluded that the fair value of the conversion option was immaterial as of June 30, 2025 and, therefore, no liability was recognized for the conversion feature.

Administrative Support Agreement

Commencing on the date of the Initial Public Offering, the Company has paid the Sponsor $15,000 per month for utilities, secretarial and administrative support services provided to the members of the Company’s management team, which included payment of $10,000 per month to our former Chief Financial Officer and Executive Vice President of Business Development. Upon completion of the initial business combination or the Company’s liquidation, the Company will cease paying these monthly fees. On July 1, 2022 the Company amended the administrative support agreement with the Sponsor from $15,000 per month to $5,000 per month. The agreement was amended again on September 25, 2024 with an effective date of May 1, 2024 to increase the fees from $5,000 to $15,000 per month. For the six months ended June 30, 2025 and 2024, the Company incurred $45,000 and $35,000 respectively in Sponsor administrative fees. The Company incurred $90,000 and $50,000 respectively for the six months ended June 30, 2025 and 2024 in Sponsor administrative fees.

For the six months ended June 30, 2025 and 2024, the Company reimbursed management $53,607 and $12,589, respectively, for expenses related to acquisition activities. 

Due from Related Party

As of March 31, 2025 and December 31, 2024, the Company has an outstanding balance of $26,780 and $68,854 respectively due from the Sponsor for prepaid administrative support services.

Due to Related Party

As of June 30, 2025 and December 31, 2024, the Company has an outstanding balance of $0 and $165,000 respectively due to the Sponsor for administrative support services.

Extension Contribution Due from Sponsor

In connection with the First Extension and Second Extension, the Sponsor is obligated to fund the Trust Account (Note 1). As of June 30, 2025 and December 31, 2024, $151,395 and $360,000 respectively of extension contributions were due from Sponsor. Following June 30, 2025, the Company made an aggregate deposit of $836,457 (including $6,852 in interest due) in extension contributions to extend the liquidation date through April 29, 2026.

Sponsor Support Agreement

Concurrently with the execution of the Sio Business Combination Agreement, the Sponsor entered into a letter agreement (the “Sponsor Support Agreement”) with Sio, Sio Newco, Pyrophyte and the directors and officers (or otherwise a part of the management team) of Pyrophyte, solely for purposes of amending certain of the terms of the letter agreement signed by them in connection with the Initial Public Offering, pursuant to which, among other things, the Sponsor agreed to among other things, vote all Class A Ordinary Shares, or any securities convertible into, exercisable or exchangeable for Class A Ordinary Shares, held by it or acquired after the date of the Sponsor Support Agreement (the “Covered Shares”) at the meeting of Pyrophyte shareholders to be held in connection with the Sio Business Combination in favor of the adoption and approval of the Sio Business Combination and each other proposal related to the Sio and not transfer any Covered Shares (other than Pubco Class A Common Shares issued upon exercise of any Private Placement Warrants held by the Sponsor) until the earlier of (A) one year after the closing of the Sio Business Combination, (B) the first day the last sale price of Pubco Class A Common Shares equals or exceeds $12.00 per share for any 20 trading days within a 30-day trading period commencing at least 150 days after the Closing or (C) after the closing of the Sio Business Combination, the date on which Pubco completes a liquidation, amalgamation, share exchange or similar transaction resulting in the shareholders of Pubco having the right to exchange their shares for consideration.

In addition, under the terms of the Sponsor Support Agreement, the Sponsor agreed to subject up to 4,025,000 Class A Ordinary Shares (“Restricted Owned Shares”) to certain earn out restrictions, if and only to the extent such shares are used to obtain any additional PIPE financing or other financing arrangements in connection with the consummation of the Sio Business Combination; provided that in no event shall the aggregate number of Restricted Owned Shares equal more than 4,025,000 Class A Ordinary Shares (the “Maximum Restricted Owned Shares”). If, prior to the closing of the Sio Business Combination, the SPAC Proceeds (as defined in the Sio Business Combination Agreement) are less than $70,000,000, then the number of Restricted Owned Shares will be adjusted pursuant to the terms of the Sponsor Support Agreement.