RELATED PARTIES

6 Months Ended

Jun. 30, 2024

RELATED PARTIES [Abstract]

RELATED PARTIES

NOTE 4 - RELATED PARTIES

Founder Shares

During the period ended March 4, 2021, the Sponsor received 7,187,500 of the Company’s Class B ordinary shares (the “Founder Shares”) for an aggregate price of $25,000 in exchange for paying certain expenses on behalf of the Company. On October 5, 2021, the Company effected a share capitalization issuing 0.2 of a share for each ordinary share in issue, resulting in the Sponsor holding an aggregate of 8,625,000 Founder Shares. The Founder Shares included an aggregate of up to 1,125,000 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 ordinary shares after the Initial Public Offering. Upon exercise of the underwriter’s overallotment option, these shares are no longer subject to forfeiture. Concurrent with the offering, the Sponsor transferred 20,000 Founder Shares to each of the Company’s independent directors as consideration for services already performed on behalf of the Company. These 80,000 Founder Shares were not subject to forfeiture in the event that the underwriter’s did not exercise the over-allotment option. Upon transfer of these shares, the Company recorded $557,600 of share-based compensation for services provided by the independent directors in 2021.

Upon close of the Initial Public Offering, the anchor investors received 2,050,200 Founder Shares (“Anchor Shares”) with the Company cancelling an equivalent number of shares. The grant date fair value of the shares transferred was $6.97 per share or an aggregate of $14,289,894 which was treated as an offering cost in accordance with Staff Accounting Bulletin 5A. Accordingly, the offering cost was allocated to the separable financial instruments issued in the Initial Public Offering in the same proportion that the proceeds were allocated to such instruments.

The initial shareholders 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 ordinary shares 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 Shareholders having the right to exchange their shares of ordinary shares for cash, securities or other property.

On October 17, 2023 and October 23, 2023, in connection with the Extension Amendment, 6,812,500 Founder Shares were converted into Class A ordinary shares (see Note 1).

General and Administrative Services

Commencing on the date the Units were first listed on the NYSE, the Company agreed to pay the Sponsor a total of $10,000 per month for office space, utilities and secretarial and administrative support. Upon completion of the Initial Business Combination or the Company’s liquidation, the Company will cease paying these monthly fees. During the three months ended June 30, 2024 and 2023, the Company recorded $30,000 respectively in fees pursuant to the agreement, which are recorded in the statements of operations. During the six months ended June 30, 2024 and 2023, the Company recorded $60,000 respectively in fees pursuant to the agreement, which are recorded in the statements of operations. As of June 30, 2024 and December 31, 2023, $330,000 and $270,000, respectively, was due to the Sponsor which is included in accounts payable and accrued expenses on the accompanying balance sheets.

Extension Notes

On October 10, 2023, the Company issued a promissory note (the “First Extension Note”) to the Sponsor or its registered assigns or successors in interest (the “Payee”), pursuant to which the Payee agreed that the Payee or one or more of its affiliates or designees will deposit into the Company’s trust account established in connection with its initial public offering an amount equal to the lesser of (i) $0.025 per Class A ordinary share of the Company multiplied by the number of Class A ordinary shares of the Company then outstanding and (ii) $100,000, for each calendar month (each, a “Deposit”) until the earlier of (i) the Company’s completion of a business combination and (ii) February 8, 2024 (the “Extended Date”). The maximum aggregate amount of deposits shall be $400,000. The extension note is non-interest bearing and payable promptly on the date on which the Company consummates the Business Combination. As of June 30, 2024, a total of $400,000 was deposited into the Trust Account pursuant to this agreement.

On February 6, 2024, the Company issued a promissory note (the “Second Extension Note”) to Enphys Management Company LLC, pursuant to which Enphys Management Company LLC agreed that it or one or more of its affiliates or designees will deposit into the Company’s Trust Account an amount equal to the lesser of (i) $0.02 per Public Share of the Company multiplied by the number of Public Shares of the Company then outstanding and (ii) $80,000, for each calendar month (each, a “Deposit”) until the earlier of (i) the Company’s completion of a business combination and (ii) June 8, 2024. The maximum aggregate amount of deposits shall be $320,000. The Second Extension Note is non-interest bearing and payable promptly on the date on which the Company consummates the Business Combination. As of June 30, 2024, a total of $320,000 was deposited into the Trust Account pursuant to this agreement.

On June 5, 2024, the Company issued a promissory note (the “Third Extension Note”) to Enphys Management Company LLC, pursuant to which Enphys Management Company LLC agreed that it or one or more of its affiliates or designees will deposit into the Company’s Trust Account an amount equal to the lesser of (i) $0.02 per Public Share of the Company multiplied by the number of Public Shares of the Company then outstanding and (ii) $50,000, for each calendar month (each, a “Deposit”) until the earlier of (i) the Company’s completion of a business combination and (ii) December 8, 2024. The maximum aggregate amount of deposits shall be $300,000. The Third Extension Note is non-interest bearing and payable promptly on the date on which the Company consummates the Business Combination. As of June 30, 2024, a total of $50,000 was deposited into the Trust Account pursuant to this agreement.

As of June 30, 2024 and December 31, 2023, there was a total of $770,000 and $300,000 outstanding on the extension notes, respectively.

Notes Payable – Related Parties

On October 30, 2023, the Company issued a promissory note to the Sponsor, as amended by the First Amendment to Promissory note dated March 1, 2024, pursuant to which the Company may borrow an aggregate of $300,000 from the Sponsor in order to fund costs and expenses related to the Company’s daily operations and due diligence in connection with a potential business combination and which the Company shall repay on the date on which the Company consummates an initial business combination (the “OPEX Note”). If the Company has not consummated an initial business combination on or prior to December 31, 2024, then the Sponsor shall have no recourse against the Company and all outstanding amounts of principal and accrued and unpaid interest payable under the Promissory Note shall immediately terminate and all related indebtedness shall be deemed cancelled. Interest on the notes shall accrue on the principal of each drawdown under the note outstanding from time to time at a rate per annum equal to Term SOFR for the interest period therefor plus 3%. As of June 30, 2024, there was $300,000 outstanding pursuant to this note.

On March 1, 2024, the Company issued a promissory note to the Sponsor (the “2024 Variable Rate Promissory Note”), pursuant to which the Company may borrow up to an aggregate of $100,000. The 2024 Variable Rate Promissory Note is subject to a variable interest rate equal to Term SOFR for the interest period therefor plus 300 basis points (3%) and payable on the date on which the Company consummates the Business Combination.  If the Company has not consummated a Business Combination on or prior to December 31, 2024, then the Sponsor shall have no recourse against the Company and all outstanding amounts of principal and accrued and unpaid interest payable under the 2024 Variable Rate Promissory Note shall immediately terminate and all related indebtedness shall be deemed cancelled. As of June 30, 2024 there was $100,000 outstanding under the 2024 Variable Rate Promissory Note.

On March 1, 2024, the Company issued a promissory note to the Sponsor (the “2024 Fixed Rate Promissory Note”), pursuant to which the Company may borrow up to an aggregate of $100,000. The 2024 Fixed Rate Promissory Note is subject to a fixed interest rate equal to twelve percent (12%) per annum and payable on the date on which the Company consummates the Business Combination.  If the Company has not consummated a Business Combination on or prior to December 31, 2024, then the Sponsor shall have no recourse against the Company and all outstanding amounts of principal and accrued and unpaid interest payable under the 2024 Fixed Rate Promissory Note shall immediately terminate and all related indebtedness shall be deemed cancelled. As of June 30, 2024, there was $100,000 outstanding under the 2024 Fixed Rate Promissory Note.

On June 5, 2024, the Company issued a promissory note to Enphys Management Company LLC, (the “2024 OPEX Note”), pursuant to which the Company may borrow an aggregate of $300,000. The 2024 OPEX Note is subject to a fixed interest rate equal to twelve percent (12%) per annum and payable on the date on which the Company consummates the Business Combination.  If the Company has not consummated a Business Combination on or prior to December 31, 2024, then Enphys Management Company LLC shall have no recourse against the Company and all outstanding amounts of principal and accrued and unpaid interest payable under the 2024 OPEX Note shall immediately terminate and all related indebtedness shall be deemed cancelled. As of June 30, 2024, there was $0 outstanding under the 2024 OPEX Note.

As of June 30, 2024 and December 31, 2023, there was $42,436 and $24,969 of interest on the above notes outstanding, which is included in accounts payable and accrued expenses on the accompanying balance sheets.

Related Party Loans

In order to finance transaction costs in connection with a Business Combination, 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, 2024 and December 31, 2023, there were no amounts outstanding under the Working Capital Loans.