RELATED PARTY TRANSACTIONS

9 Months Ended

Sep. 30, 2023

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS

NOTE 5 – RELATED PARTY TRANSACTIONS

Related Party Loans

In order to finance transaction costs in connection with a Business Combination, the Sponsor or certain of the Company’s officers and directors or their affiliates may, but are not obligated to, loan the Company funds as may be required (the “Working Capital Loans”). Each loan would be evidenced by promissory note.

The notes may be repaid upon completion of a Business Combination, without interest, or, at the lender’s discretion, up to $1.50 million of notes may be converted upon completion of a Business Combination into units at a price of $10.00 per unit. Such units would be identical to the Private Units. 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.

On May 3, 2022, the Company issued a promissory note for up to approximately $0.4 million (the “Note”) to the Sponsor, of which $0.4 million was outstanding under the Note as of December 31, 2022. The Note is non-interest bearing and the Company must make drawdown requests in amounts no less than $10,000 unless otherwise agreed upon by the parties. The principal balance of the Note is payable on the earlier of (i) the date on which the Company consummates its initial Business Combination and (ii) the date that the winding up of the Company is effective (such date, the “Maturity Date”). The Company, pursuant to the Note, may at any time prior to payment in full of the principal balance of the Note elect to convert all or any portion of the unpaid principal balance of the Note into units at a conversion price of $10.00 per unit.

However, on March 15, 2023, the Company amended and restated the Note (the “Amended Note”) in its entirety to (1) increase the principal amount thereunder from $0.4 million to $0.9 million and (2) remove the right of the holder of the Amended Note to convert all or any portion of the unpaid principal balance of the note into the Company’s units and related registration rights for such units (including underlying securities). The Amended Note is non-interest bearing and is payable on the Maturity Date.

NOTE 5 – RELATED PARTY TRANSACTIONS (Continued)

Related Party Loans (Continued)

On March 22, 2023, the Company amended and restated the Note (the “Second Amended Note”) to increase the principal amount of up to $0.9 million to up to $2.1 million to the Sponsor, pursuant to which the Sponsor agreed to loan to the Company up to such amount.

In April 2023, $49,140 was drawn down under the Second Amended Note. In May 2023, an additional aggregate of $221,449 was drawn down under the Second Amended Note. In June 2023, an additional aggregate of $83,500 was drawn down, and an aggregate of $102,665 was refunded, under the Second Amended Note. In July 2023, $55,221 was drawn down under the Second Amended Note. In August 2023, an additional aggregate of $61,616 was drawn down under the Second Amended Note. In September 2023, an additional aggregate of $88,430 was drawn down under the Second Amended Note.

At September 30, 2023 and December 31, 2022, approximately $0.93 million and $0.40 million were outstanding under the Second Amended Note, respectively.

Extensions Loan and Contribution

The Sponsor or its designees agreed to contribute to the Company as a note in connection with the Company’s extension of time to consummate an initial Business Combination. The Initial Contribution of $600,000 was deposited by the Sponsor into the Trust Account on March 24, 2023.

On June 26, 2023, a Monthly Extension Fee of $200,000 was deposited into the Trust Account, which was comprised of a $100,000 payment from the Sponsor, bringing the balance of the extension loan outstanding to $0.7 million as of September 30, 2023, and a $100,000 payment from Infinite Reality. On July 25, 2023 and August 28, 2023, Infinite Reality deposited a Monthly Extension Fee of $200,000, in each case, into the Trust Account, bringing the balance of the Contribution outstanding to $1.2 million as of September 30, 2023.

Related Party Payable

As of September 30, 2023, an amount of $10,480 was payable to the Sponsor, in connection with the filing of a tax return.

Administrative Support Agreement

The Company has agreed to pay the Sponsor a total of up to $0.01 million per month from the effective date of the Registration Statement for office space, utilities and secretarial and administrative support. Services will terminate upon the earlier of the consummation by the Company of a Business Combination or the liquidation of the Company. For the nine months ended September 30, 2023, the Company has accrued $0.12 million for these services. For the nine months ended September 30, 2022, the Company paid $0.09 million for these services. These amounts are included in the operating costs on the accompanying condensed statements of operations.