NOTE 5. RELATED PARTY TRANSACTIONS

Founder Shares

On October 6, 2023, the Company issued an aggregate of 2,156,250 shares of common stock (the “Founder Shares”) to the Sponsor for an aggregate purchase price of $25,000 in cash. On October 18, 2023, the Sponsor transferred an aggregate of 465,000 Founder Shares to members of the Company’s management, board of directors and senior advisors, resulting in the Sponsor holding 1,691,250 Founder Shares. The Founder Shares include an aggregate of up to 300,000 shares subject to forfeiture by the Sponsor to the extent that the underwriters’ over-allotment is not exercised in full or in part, so that the Initial Stockholders will collectively own 20% of the Company’s issued and outstanding shares after the IPO (assuming the Initial Stockholders did not purchase any Public Shares in the IPO and excluding the securities underlying the $15 Private Warrants, the Private Units).

On August 21, 2024, Company issued a dividend of approximately 0.066 Founder Shares for every issued and outstanding founder share resulting in our initial stockholders holding an aggregate of 2,300,000 Founder Shares, an increase of 143,750 Founder Shares compared to 2,156,250 initial Founder Shares issued.

On February 5, 2025, the underwriters elected to terminate their over-allotment option to purchase 1,200,000 IPO Units resulting in Sponsor to forfeit 300,000 Founder Shares. As of June 30, 2026, there were 2,000,000 Founder Shares outstanding.

The Initial Stockholders have agreed not to transfer, assign or sell any of the Founder Shares (except to certain permitted transferees) until, with respect to 50% of the Founder Shares, the earlier of (i) twelve months after the date of the consummation of a Business Combination, or (ii) the date on which the closing price of the Company’s common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations and recapitalizations) for any 20 trading days within any 30-trading day period commencing after a Business Combination, with respect to the remaining 50% of the Founder Shares, 12 months after the date of the consummation of a Business Combination, or earlier, in each case, if, subsequent to a Business Combination, the Company consummates a subsequent liquidation, merger, stock exchange or other similar transaction which results in all of the Company’s stockholders having the right to exchange their Public Shares for cash, securities or other property. The lock-up restrictions are also subject to early release upon certain liquidation, merger, exchange, or reorganization transactions and automatically expire if the Combined Company Common Stock trades at or above $20.00 per share at any time (including intraday)

Promissory Notes

On October 6, 2023, the Company issued a promissory note to the Sponsor, pursuant to which the Company may borrow up to an aggregate principal amount of $150,000. The Company drew $125,000 under the promissory note. On April 1, 2025, the Company paid off the entire $125,000 balance. The promissory note was noninterest bearing and payable on the consummation of the IPO.

On January 30, 2025, the Company issued an unsecured promissory note of $417,000 to the Sponsor. This promissory note bore interest at the rate of 12% per year and matured on January 30, 2026. As of April 1, 2025, all outstanding principal and interest under the promissory note had been paid in full

Administrative Services Agreement

The Company entered into an administrative services agreement (the “Administrative Services Agreement”) with the Sponsor whereby the Sponsor will perform certain services for the Company for a monthly fee of $15,000. Sponsor administrative fees were $45,000 and $90,000 for the three and six months ended June 30, 2026 respectively. The Administrative Services Agreement has been terminated as of July 16, 2026.

Larry G. Swets and Hassan R. Baqar, who served as executive officers of the company prior to the merger with BOXABL, both served as the managers of the Sponsor.

Forward Purchase Agreement

On May 28, 2026, the Company entered into an OTC Equity Prepaid Forward Transaction with Atsion Opportunity Fund LLC, Series 2, a non-related party. One-half of the Forward Purchase Agreement was subsequently novated to FG Capital Partners, LLC (‘FGCP’) pursuant to a Novation Agreement dated May 28, 2026. FGCP is affiliated with Larry G. Swets, Jr., Hassan R. Baqar, Scott D. Wollney and Richard E. Govignon, each an officer or director of the Company at the time of the transaction, making the Novation Agreement a related party transaction. See Note 8 for further discussion. Of the $9,677,387 derivative liability recognized as of June 30, 2026 related to the Forward Purchase Agreement, approximately $4,824,246 relates to the FGCP leg of the Forward Purchase Agreement, a related party.

Post Merger

Upon consummation of the Business Combination, Paolo Tiramani and Galiano Tiramani, directly and through the Austin Powers Trust and their respective family gift trusts, hold substantially all of the Company’s outstanding Class B Common Stock, which carries ten votes per share and, pursuant to the Company’s certificate of formation, may be held only by Paolo Tiramani, Galiano Tiramani and their respective permitted transferees. Paolo Tiramani beneficially owns 172,470,048 shares of Class B Common Stock (838,101 shares held directly, 86,864,301 shares held by the Austin Powers Trust, and 84,767,646 shares held by the Paolo Tiramani 2020 Family Gift Trust), representing approximately 71.42% of the Company’s outstanding common stock. Galiano Tiramani beneficially owns 59,613,662 shares of Class B Common Stock (389,629 shares held directly, 30,998,869 shares held by the Galiano Tiramani 2020 Family Gift Trust, and 28,225,164 shares held by the Shontor Asset Protection Trust), representing approximately 24.87% of the Company’s outstanding common stock. As a result, Messrs. Tiramani beneficially own approximately 96.37% of the combined voting power of the Company’s outstanding common stock, and the Company qualifies as a ‘controlled company’ under Nasdaq listing rules.