Related Party Transactions |
6 Months Ended |
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Jun. 30, 2026 | |
| Related Party Transactions [Abstract] | |
| Related Party Transactions | NOTE 5. RELATED PARTY TRANSACTIONS Founder Shares On March 25, 2021, the Sponsor purchased 5,750,000 of the Company’s Class B common stock (the “Founder Shares”) for an aggregate purchase price of $25,000. The Founder Shares included an aggregate of up to 750,000 shares subject to forfeiture to the extent that the underwriters’ over-allotment was not exercised in full or in part, so that the number of Founder Shares would equal, on an as-converted basis, approximately 20% of the Company’s issued and outstanding shares of common stock after the Initial Public Offering. Upon exercise of the underwriters’ over-allotment option, these shares were no longer subject to forfeiture. The holders of the Founder Shares have agreed, subject to limited exceptions, not to transfer, assign or sell any of the Founder Shares until the earlier to occur of: (A) one year after the completion of a Business Combination and (B) subsequent to a Business Combination, (x) if the last reported sale price of the Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after a 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 the Public Stockholders having the right to exchange their shares of common stock for cash, securities or other property. Our underwriter entered into a purchase agreement in connection with the closing of the Initial Public Offering pursuant to which it or its affiliates purchased from our Sponsor an aggregate of 400,000 Founder Shares at a price of $4.00 per Founder Share, or an aggregate purchase price of $1,600,000, which was paid at the time of the closing of the Initial Public Offering. The Founder Shares will be delivered by the Sponsor to the underwriter or its affiliate upon consummation of our initial Business Combination and immediately following the expiration of the transfer restrictions applicable to the Founder Shares. On April 28, 2023, in connection with the Extension, 5,500,000 Founder Shares were converted into shares of Class A common stock. General and Administrative Services The Company entered into an agreement, commencing on the effective date of the Initial Public Offering through the earlier of the Company’s consummation of a Business Combination and its liquidation, to pay an affiliate of the Sponsor an aggregate of $15,000 per month for office space, utilities and secretarial, and administrative support services. This agreement was amended on January 28, 2023 to provide that, rather than be payable on a monthly basis, the payments due thereunder commencing with the monthly payment payable on or about February 28, 2023, shall accrue and be payable on the consummation of the Business Combination or the Company’s liquidation. During the six months ended June 30, 2026 and 2025, the Company recorded $90,000 in administrative fees. As of June 30, 2026 and December 31, 2025, there was a balance of $630,000 and $540,000, respectively, due to the affiliate, which amount is included in due to related party on the accompanying condensed balance sheets. Convertible Working Capital Loans In order to fund working capital deficiencies, 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”). Such Working Capital Loans would be evidenced by promissory notes. The notes may be repaid upon completion of a Business Combination, without interest, or, at the lender’s discretion, up to $1,500,000 of the notes may be converted upon completion of a Business Combination into warrants at a price of $1.00 per warrant. Such warrants would be identical to the Private Placement Warrants. In the event that a 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. As of June 30, 2026 and December 31, 2025, there were no amounts outstanding under the Working Capital Loans. Loan payable - Sponsor Per a Commitment Letter, dated July 19, 2022, the Sponsor undertook upon the Company’s written request to make available an aggregate amount of up to $250,000 to provide the Company funds for working capital purposes to ensure that the Company would continue as a going concern for at least 12 months. A second Commitment Letter was dated May 4, 2023 for up to an additional $750,000. A third Commitment Letter was dated December 20, 2023 for up to another $800,000. A fourth Commitment Letter was dated July 8, 2024 for up to another $750,000. A fifth Commitment Letter was dated March 4, 2025 for up to an additional $475,000. A sixth Commitment Letter was dated November 12, 2025 for up to an additional $100,000. A seventh Commitment Letter was dated December 23, 2025 for up to an additional $800,000. An eighth Commitment Letter was dated March 19, 2026 for up to an additional $1,000,000. The Sponsor is charging interest at the mid-term applicable federal rate the at the time of funding. During the six months ended June 30, 2026 and the year ended December 31, 2025, the Sponsor loaned an aggregate of $375,000 and $1,465,000, respectively, to the Company for working capital purposes. As of June 30, 2026 and December 31, 2025, $4,175,000 (plus $292,825 of accrued interest) and $3,800,000 (plus $210,542 of accrued interest) remained outstanding, respectively. Consulting Agreement The Company and its then Chief Financial Officer, who resigned from the Company on March 23, 2026 (the “Former CFO”) entered into a consulting agreement pursuant to which the Former CFO was entitled to receive $15,600 per month for services rendered, commencing February 1, 2021, through the closing of the Company’s initial business combination. Pursuant to the amended agreement on April 1, 2022, the Former CFO would be paid $10,400 per month and an additional amount of $5,200 per month would be accrued through and become payable contingent upon a successful business combination. If a successful business combination did not occur, the Company would not be required to pay this additional contingent amount. The consulting agreement was further amended on January 1, 2023, to provide that commencing on January 1, 2023, 100% of the consulting fee of $15,600 per month would be accrued by the Company for the former CFO’s benefit to be paid upon the closing of a business combination if such closing occurs, and if such business combination does not occur, then the accrued amount shall not be due or paid. In connection with the Former CFO’s resignation from the Company, the Company and the Former CFO entered into a Mutual Termination of Consulting Engagement and Forfeiture of Certain Accrued Contingent Compensation dated March 31, 2026, pursuant to which the Former CFO shall be entitled to receive and the Company shall be obligated to pay only those accrued monthly and contingent payments for the period commencing April 1, 2022 through December 31, 2024 totaling $421,200, as well as the one-time success fee of $150,000. The Former CFO has agreed to forfeit all fees, $187,200, accrued during the year ended December 31, 2025. Pursuant to the above, during the six months ended June 30, 2026, the Company wrote-off the 2025 annual compensation expense of $187,200. For the three and six months ended June 30, 2025, the Company recorded compensation of $46,800 and $93,600 for services provided, respectively. As of June 30, 2026 and December 31, 2025, there was $421,200 and $608,400 accrued, respectively. No additional fees have been accrued. Limited Payments The Company has agreed to pay the Former CFO a one-time fee of $150,000, upon the consummation of the initial business combination. The amount will only become payable upon a successful business combination. If a successful business combination does not occur, the Company will not be required to pay this contingent fee. This fee has therefore not been accrued for as of June 30, 2026 and December 31, 2025. There can be no assurances that the Company will complete a business combination. Non-redemption Agreements The Sponsor entered into Non-redemption agreements with various stockholders of the Company (the “Non-Redeeming Stockholders”), pursuant to which these stockholders agreed not to redeem a portion of their shares of Company common stock (the “Non-Redeemed Shares”) in connection with the Special Meeting held on April 28, 2023, but such stockholders retained their right to require the Company to redeem such Non-Redeemed Shares in connection with the closing of the Business Combination. In consideration for the non-redemption agreements, immediately prior to, and substantially concurrently with, the closing of an initial business combination, (i) the Sponsor (or its designees) will surrender and forfeit to the Company, for no consideration the 250,000 Founders Shares owned by it, and (ii) the Company will issue to the Non-Redeeming Stockholders 250,000 shares of Class A Common Stock. The Company estimated the aggregate fair value of such 250,000 Founder Shares to be $180,000 or $0.72 per share. The fair value as of April 26 and 27, 2023 was determined using the probability of a successful Business Combination of 7%, derived from an option pricing model for the publicly traded warrants, and the average value per shares as of the valuation date of $10.30. Each Non-Redeeming Stockholder acquired from the Sponsor an indirect economic interest in such Founder Shares. The fair value of such Founder Shares was determined to be to be a cost associated with completing a Business Combination and a capital contribution from a related entity under SAB Topic 5T. Warrant Forfeiture On December 31, 2024, Sponsor forfeited 4,000,000 of the 11,600,000 Private Placement Warrants it purchased in connection with the Company’s IPO for no consideration.
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