CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
In August 2020, our Sponsor paid $25,000, or approximately $0.002 per share, to cover certain of our offering costs in exchange for 10,062,500
Founder Shares. The number of Founder Shares issued was determined based on the expectation that such Founder Shares would represent 20% of the outstanding shares upon completion of the IPO (excluding the Private Placement Units and underlying
securities). The Founder Shares (including the Class A common stock issuable upon exercise thereof) may not, subject to certain limited exceptions, be transferred, assigned or sold by the holder.
Our Sponsor, pursuant to a written agreement, purchased an aggregate of 900,000 Private Placement Units at a price of $10.00 per unit, for an
aggregate purchase price of $9,000,000 that occurred simultaneously with our IPO. There are no redemption rights or liquidating distributions from the Trust Account with respect to the Founder Shares, Private Placement Shares or Private Placement
Warrants, which will expire worthless if we do not consummate a Business Combination by December 14, 2022.
Beginning on
December 14, 2020, we pay First In Line Enterprises, Inc., an affiliate of members of our Sponsor, a total of $15,000 per month for office space, utilities and secretarial and administrative support. Upon completion of our initial Business
Combination or our liquidation, we will cease paying these monthly fees. We may pay our Sponsor or any of our existing officers or directors, or any entity with which they are affiliated, a finders fee, consulting fee or other compensation in
connection with identifying, investigating and completing our initial Business Combination, which may be paid from the proceeds held in the trust account upon consummation of an initial Business Combination. These individuals and entities will be
reimbursed for any out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due
diligence on suitable Business Combinations. Our Audit Committee reviews on a quarterly basis all payments that were made to our Sponsor, officers, directors, advisors or our or their affiliates and will determine which expenses and the amount of
expenses that will be reimbursed. There is no cap or ceiling on the reimbursement of out-of-pocket expenses incurred by such persons in connection with activities on our
behalf.
On August 31, 2020, our Sponsor agreed to loan us up to $300,000 to be used for a portion of the expenses of the IPO. These
loans were non-interest bearing, unsecured and were due at the earlier of March 31, 2021 or the closing of the IPO. The outstanding balance of $185,000 under the loan was repaid upon the closing of the
IPO out of the $750,000 of offering proceeds that was allocated to the payment of offering expenses (other than underwriting commissions).
In addition, in order to finance transaction costs in connection with an intended initial Business Combination, our Sponsor or an affiliate of
our Sponsor or certain of our officers and directors may, but are not obligated to, loan us funds on a non-interest bearing basis as may be required. If we complete an initial Business Combination, we would
repay such loaned amounts. In the event that the initial Business Combination does not close, we may use a portion of the working capital held outside the Trust Account to repay such loaned amounts but no proceeds from our trust account would be
used for such repayment. Up to $1,500,000 of such loans may be convertible into units, at a price of $10.00 per unit at the option of the lender, upon consummation of our initial business combination. The units would be identical to the Private
Placement Units. Other than as described above, the terms of such loans by our officers and directors, if any, have not been determined and no written agreements exist with respect to such loans. We do not expect to seek loans from parties other
than our Sponsor or an affiliate of our Sponsor as we do not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our trust account.
On January 24, 2022, we issued a Promissory Note in the principal amount of up to $300,000 to our Sponsor, of which approximately
$178,300 was outstanding as of June 30, 2022. This Promissory Note was issued in connection with advances our Sponsor has made, and may make in the future, to us for working capital expenses. If we complete a Business Combination, we would repay
this Promissory Note out of the proceeds of the Trust Account released to us. Otherwise, this Promissory Note would be repaid only out of funds held outside
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