Related Party Transactions

12 Months Ended

Dec. 31, 2022

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.

Promissory Note — Related Party

On March 25, 2021, the Sponsor issued an unsecured promissory note to the Company (the “Promissory Note”), pursuant to which the Company had the ability to borrow up to an aggregate principal amount of $250,000. The Promissory Note was non-interest bearing and payable on the earlier of (i) December 31, 2021 or (ii) the consummation of the Initial Public Offering. As of November 2, 2021, there was $250,000 outstanding under the Promissory Note. On November 3, 2021, the Promissory Note was paid down in its entirety by the Company. As of December 31, 2021, there was no balance outstanding pursuant to the Promissory Note.

Due to Related Party

A related party paid certain offering costs and operating costs on behalf of the Company. These advances are due on demand and are non-interest bearing. As of December 31, 2022 and December 31, 2021, there was $212 and $3,873, respectively, due to the related party for offering costs and operating costs.

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. During the year ended December 31, 2022 and 2021, the Company recorded $180,000 and $45,000 in administrative fees. As of December 31, 2022 and December 31, 2021, there was a balance of $15,000 due to the affiliate, which amount is included in due to related party on the accompanying balance sheets. This Agreement was amended in January 2023. See Note 11 Subsequent Events.

Related Party 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.

Per a Commitment Letter, dated March 10, 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 will continue as a going concern for at least 12 months from the public filing of the Company’s Annual Report on Form 10-K for calendar year 2021. Pursuant to a request by the Company, on December 22, the Sponsor made available $175,000 to the Company for working capital purposes. As of December 31, 2022, such funds remained outstanding.

Consulting Agreement

The Company and its Chief Financial Officer (“CFO”) entered into a consulting agreement pursuant to which the CFO receives $15,600 per month for services rendered, commencing February 1, 2021, through the closing of our initial business combination. On April 1, 2022, the agreement with the CFO was amended so that the CFO would be paid $10,400 per month. An additional amount of $5,200 per month beginning April 1, 2022 through the consummation of the initial business combination will become payable upon a successful consummation of a business combination. If a successful business combination does not occur, the Company will not be required to pay this additional contingent amount. The additional contingent fees have therefore not been accrued for as of December 31, 2022. As of December 31, 2022 and December 31, 2021, there was no balance due to the CFO. This consulting agreement was further amended in January 2023. See Note 11. Subsequent Events.

Limited Payments

The Company has agreed to pay its Chief Operating Officer and Chief Financial Officer a one-time fee of $300,000 and $150,000, respectively, upon the consummation of the initial business combination. The amounts 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 these contingent fees. These fees have therefore not been accrued for as of December 31, 2022 and December 31, 2021. There can be no assurances that the Company will complete a business combination.