RELATED PARTY TRANSACTIONS

3 Months Ended

Mar. 31, 2024

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 Working Capital Loans as may be required. Each Working Capital Loan would be evidenced by promissory note. Such promissory notes may be repaid upon completion of a Business Combination, without interest, or, at the lender’s discretion, up to $1.50 million of such promissory 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 the WCL Promissory Note to the Sponsor in the principal amount of $0.4 million. On August 30, 2022, September 6, 2022 and September 21, 2022, there were additional drawdowns of approximately $0.04 million, $0.11 million and $0.02 million, respectively. The Company must make drawdown requests in amounts no less than $10,000 pursuant to the WCL Promissory Note.

On March 15, 2023, the Company amended and restated the WCL Promissory Note in its entirety to (i) increase the principal amount thereunder from $0.4 million to $0.9 million and (ii) remove the right of the holder of the WCL Promissory Note to convert all or any portion of the unpaid principal balance of the WCL Promissory Note into the units and related registration rights for such units (including underlying securities). As amended, the WCL Promissory Note is non-interest bearing and is payable on the earlier of (i) the date on which the Company consummates an initial Business Combination or (ii) the date that the Company’s winding up is effective.

On March 22, 2023, the Company amended and restated the WCL Promissory Note to increase the principal amount from up to $0.9 million to up to $2.1 million, pursuant to which the Sponsor agreed to loan to the Company up to $2.1 million.

In February 2023, $70,000 was drawn down under the WCL Promissory Note. In April 2023, $49,140 was drawn down under the WCL Promissory Note. In May 2023, an additional aggregate of $221,449 was drawn down under the WCL Promissory Note. In June 2023, an additional aggregate of $83,500 was drawn down, and an aggregate of $102,665 was refunded, under the WCL Promissory Note. In July 2023, $55,221 was drawn down under the WCL Promissory Note. In August 2023, an additional aggregate of $61,616 was drawn down under the WCL Promissory Note. In September 2023, an additional aggregate of $88,430 was drawn down under the WCL Promissory Note. In October 2023, $3,000 was drawn down under the WCL Promissory Note. In November 2023, an additional aggregate of $97,536 was drawn down, and an aggregate of $8,000 was refunded, under the WCL Promissory Note.

During the quarter ended March 31, 2024, an aggregate amount of $ 0.12 million was drawn down under the WCL Promissory Note.

At March 31, 2024 and December 31, 2023, approximately $1.14 million and $1.02 million were outstanding under the WCL Promissory Note, respectively.

NOTE 5 – RELATED PARTY TRANSACTIONS (Continued)

Extensions Loan and Contribution

In connection with the approval of the First Extension Amendment Proposal, the Sponsor or its designees agreed to contribute to the Company, under the WCL Promissory Note, (i) the Initial Contribution, plus, (ii) an aggregate of $200,000 per month (commencing on June 23, 2023 and on the 23rd day of each subsequent month) until September 25, 2023, or portion thereof, that was needed to complete an initial Business Combination, which amount was to be deposited into the Trust Account.

On March 24, 2023, the Sponsor made the Initial Contribution of $600,000, which was deposited into the Trust Account. On June 26, 2023, $200,000 was deposited into the Trust Account, which was comprised of a $100,000 payment from the Sponsor, bringing the balance under the WCL Promissory Note to $0.7 million, and a $100,000 payment from Infinite Reality. The remaining Monthly Extension Fees in connection with the approval of the First Extension Amendment were paid by Infinite Reality pursuant to the Second Merger Agreement Amendment.

In connection with the approval of the Second Extension Amendment Proposal, Infinite Reality agreed to contribute the Monthly Extension Fee to the Company, which amounted to $0.025 for each Public Share that was not redeemed in the Second Special Meeting Redemptions, or $50,989.25 (commencing on September 23, 2023 and on the 23rd day of each subsequent month) until March 25, 2024, or portion thereof, that was needed to complete an initial Business Combination. The remaining Monthly Extension Fees in connection with the approval of the Second Extension Amendment were paid by Infinite Reality pursuant to the Second Merger Agreement Amendment.

In connection with the approval of the Third Extension Amendment Proposal, and pursuant to the Third Merger Agreement Amendment, Infinite Reality agreed to contribute the Monthly Extension Fee to the Company, which amounted to $0.03 for each Public Share that was not redeemed in the Third Special Meeting Redemptions, or $33,932.22 (commencing on March 23, 2024 and on the 23rd day of each subsequent month) until September 25, 2024, or portion thereof, that is needed to complete an initial Business Combination. Monthly Extension Fee payments received from Infinite Reality have been treated as equity contribution.

Related Party Payable

As of March 31, 2024 and December 31, 2023, respectively, 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 IPO Registration Statement for office space, utilities and secretarial and administrative support, pursuant to the Administrative Support Agreement. Services will terminate upon the earlier of the consummation by the Company of a Business Combination or the liquidation of the Company. For the three months ended March 31, 2024, the Company incurred and accrued $0.03 million for these services. For the three months ended March 31, 2023, the Company incurred and paid $0.03 million for these services. These amounts are included in the operating costs on the accompanying unaudited condensed statements of operations.