Support Services
The Company pays the Sponsor a fee of up to $33,333 per month for the use of office and administrative support services following the consummation of the IPO until the earlier of the consummation of the Business Combination or liquidation. As of March 31, 2023, $43,500 has been expensed under the arrangement and included under Due to affiliate. As of December 31, 2022, $14,500 has been accrued as outstanding under this agreement under Due to affiliate and $161,875 has been expensed under the arrangement.
The Company pays FintechForce, Inc., an entity affiliated with the Chief Financial Officer, a fee of $15,000 per month for consulting services, financial planning and analysis and general professional services. As of March 31, 2023, $52,531 had been expensed under the arrangement. As of December 31, 2022, $15,000 had been accrued under this agreement and is included in accounts payable and accrued expenses in the accompanying balance sheet and $152,176 had been expensed under the arrangement.
The Company paid Kuleana Capital Management, an affiliated entity with Mr. Tim Schenk, Chairman of the Board of Directors, approximately $14,900 a month for certain consulting services to the Company. Kuleana Capital Management has received a total of $160,425 for its services. The consulting arrangement with Kuleana Capital Management was terminated on December 7, 2022, upon Mr. Schenk’s appointment to the Board of Directors.
Note 6 — Commitments and Contingencies
Registration Rights
The holders of Founder Shares, Private Placement Units and warrants that may be issued upon conversion of Working Capital Loans, if any, will be entitled to registration rights pursuant to a registration rights agreement dated January 13, 2022. These holders will be entitled to certain demands and “piggyback” registration rights. However, the registration rights agreement provides that the Company will not permit any registration statement filed under the Securities Act to become effective until the termination of the applicable lock-up period for the securities to be registered. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
Underwriting Agreement
The Company granted the underwriters a 45-day option from the date of the final prospectus relating to the IPO to purchase up to 3,750,000 additional Units to cover overallotments, if any, at the IPO price less the underwriting discounts and commissions. On January 19, 2022, the underwriters fully exercised their overallotment option and purchased 3,750,000 Units at $10.00 per Unit.
The underwriters were paid an underwriting discount of $0.20 per unit, or $5,000,000 in the aggregate, upon the closing of the IPO (plus an additional $750,000 upon the underwriters’ exercise of the overallotment option in full). An additional $0.50 per unit, or $12,500,000, plus an additional $0.70 per Overallotment Unit or $2,625,000 (or $15,125,000 in the aggregate) is payable to the underwriters for deferred underwriting commissions. The deferred fee will become payable to the underwriters from the amounts held in the Trust Account solely in the event that the Company completes a Business Combination, subject to the terms of the underwriting agreement.
Note 7 — Stockholders’ Deficit
Class A Common Stock — The Company is authorized to issue 110,000,000 shares of Class A common stock with a par value of $0.0001 per share. As of March 31, 2023 and December 31, 2022, there were 1,365,500 shares of Class A common stock outstanding, excluding 28,750,000 shares of Class A common stock subject to redemption.
Class B Common Stock — The Company is authorized to issue 20,000,000 shares of Class B common stock with a par value of $0.0001 per share. Holders of Class B common stock are entitled to one vote for each share. As of March 31, 2023 and December 31, 2022, there were 7,528,875 shares of Class B common stock outstanding.
Holders of Class A common stock and Class B common stock vote together as a single class on all matters submitted to a vote of stockholders except as required by law.