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Item 7. Management’s Discussion and Analysis

2025-04-15 compared with 2024-04-01 · 82 added, 34 removed, 68 unchanged (63% of the section changed)

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We are a blank check company incorporated as a Delaware corporation and formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses.

We have not identified any business combination target.

We intend to effectuate our initial business combination using cash from the proceeds from our IPO and the Private Placement, our capital stock, debt or a combination of cash, capital stock and debt.

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An aggregate of $234,600,000 in proceeds from our IPO and the Private Placement has been placed in the Trust Account.

Except with respect to interest earned on the funds held in the Trust Account that may be released to us to pay our tax obligations (less up to $100,000 of interest to pay dissolution expenses), the proceeds deposited in the Trust Account will not be released from the Trust Account until the earliest of (a) the completion of our initial business combination, (b) the redemption of any public shares properly submitted in connection with a stockholder vote to amend our amended and restated certificate of incorporation (i) to modify the substance or timing of our obligation to provide our public stockholders the right to have their public shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination by December 14, 2024 or during any extended time we have to consummate our initial business combination beyond December 14, 2024 as a result of a stockholder vote to amend our amended and restated certificate of incorporation (an “Extension Period”) or (ii) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity, and (c) the redemption of all of our public shares if we are unable to complete our initial business combination by December 14, 2024 or during any Extension Period, subject to applicable law.

Except with respect to interest earned on the funds held in the Trust Account that may be released to us to pay our tax obligations (less up to $100,000 of interest to pay dissolution expenses), the proceeds deposited in the Trust Account will not be released from the Trust Account until the earliest of (a) the completion of our initial business combination, (b) the redemption of any public shares properly submitted in connection with a stockholder vote to amend our amended and restated certificate of incorporation (i) to modify the substance or timing of our obligation to provide our public stockholders the right to have their public shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination by September 30, 2025 or during an Extension Period or (ii) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity, and (c) the redemption of all of our public shares if we are unable to complete our initial business combination by September 30, 2025 or during any Extension Period, subject to applicable law.

The proceeds held in the Trust Account may only be invested in U.S.

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government treasury obligations.

On June 9, 2023, the Company’s stockholders approved a proposal to amend the Company’s amended and restated certificate of incorporation to extend the time that the Company has to consummate its initial business combination from June 14, 2023 to September 14, 2023 and to allow the board of directors of the Company, without another stockholder vote, to elect to further extend the date to consummate an initial business combination after September 14, 2023 up to six times, by an additional month each time, up to March 14, 2024, providing the Company a 21-month period (or up to 27-month period) from the closing of the IPO to consummate its initial business combination.

In connection with the Special Meeting, the holders of 18,849,935 shares of Class A common stock properly exercised their right to redeem their shares for cash, resulting in 4,150,065 shares of Class A common stock issued and outstanding and subject to possible redemption.

Accordingly, at December 31, 2023 and 2022, there were 8,350,065 and 23,000,000 shares of Class A common stock issued and outstanding, including 4,150,065 and 23,000,000 shares of Class A common stock subject to possible redemption, respectively.

In advance of the Special Meeting, on May 25, 2023, the Company entered into non-redemption agreements with unaffiliated third parties in exchange for each such party agreeing not to redeem public shares held by them in connection with such meeting.

In exchange for the foregoing commitments not to redeem public shares, the sponsor agreed to transfer to such third parties an aggregate of up to 1,499,996 founder shares.

In addition, in advance of the Special Meeting and the entry into the non-redemption agreements, on May 25, 2023, pursuant to the terms of our charter, the sponsor converted 4,200,000 founder shares held by it on a one-for-one basis into Public Shares.

Prior to December 31, 2023, the board of directors of the Company approved four monthly extensions from September 14, 2023 to January 14, 2024.

As described in Note 11 to the financial statements (Subsequent Events), in January and February 2024, the board approved two further monthly extensions up to March 14, 2024.

In connection with each of the monthly extensions, the sponsor transferred 166,666 shares of the Company’s Class B common stock held by the sponsor to unaffiliated third parties in accordance with those certain voting and non-redemption agreements previously entered into between the sponsor and such third parties.

In addition, on March 14, 2024, the Company’s stockholders approved a proposal to amend the Company’s amended and restated certificate of incorporation to further extend the time that the Company has to consummate its initial business combination from March 14, 2024 to December 14, 2024.

In connection with the vote to extend the time that the Company has to consummate its initial business combination from March 14, 2024 to December 14, 2024, the holders of 2,986,952 shares of Class A common stock properly exercised their right to redeem their shares for an aggregate redemption amount of $32,214,591, resulting in 1,163,113 shares of Class A common stock issued and outstanding and subject to possible redemption.

As of December 31, 2023, we had not yet commenced any operations.

All activity from inception through December 31, 2023 relates to our formation, our IPO and our pursuit of a target company with which to effect our initial business combination.

The Company has selected December 31 as its fiscal year end.

For the year ended December 31, 2023, we had net income of $2,729,602, which consisted of dividend income of $6,707,678 on marketable securities held in trust, offset by operating expenses of $1,670,440, a provision for income tax of $1,319,280, a $934,906 financing expense, and a $53,450 loss on the change in fair value of the warrant liability.

In comparison, for the year ended December 31, 2022, we had net income of $18,132,948, which consisted of dividend income of $3,383,823 on marketable securities held in trust and a $16,668,950 gain on the change in fair value of the warrant liability, offset by operating expenses of $1,577,543 and a provision for income tax of $362,282.

The provision for income taxes increased $956,998 as a result of the Company’s effective tax rate increasing from 1.96% as of December 31, 2022 to 32.58% as of December 31, 2023 largely due to changes in the fair value of warrant liabilities and the valuation allowance.

On June 9, 2023, at the First Extension Special Meeting, the Company’s stockholders approved a proposal to amend the Company’s amended and restated certificate of incorporation to extend the time that the Company has to consummate its initial business combination from June 14, 2023 to September 14, 2023 and to allow the board of directors of the Company, without another stockholder vote, to elect to further extend the date to consummate an initial business combination after September 14, 2023 up to six times, by an additional month each time, up to March 14, 2024, providing the Company a 21-month period (or up to a 27-month period) from the closing of the IPO to consummate its initial business combination.

Prior to the First Extension Special Meeting, on May 25, 2023, the Company and our sponsor entered into the Non-Redemption Agreements with the Third-Party SAC Investors in exchange for the Third-Party SAC Investors agreeing (i) not to redeem the Non-Redeemed Shares in connection with the First Extension Special Meeting and (ii) to vote in favor of the First Extension Amendment Proposal and the First Extension at the First Extension Special Meeting (other than with respect to certain shares acquired or to be acquired pursuant to the Non-Redemption Agreements).

In exchange for the foregoing commitments, our sponsor agreed to transfer to the Third-Party SAC Investors an aggregate of up to 1,499,996 shares of our Class B common stock held by our sponsor, with 500,000 of such shares to be transferred to the Third-Party SAC Investors promptly upon consummation of the First Extension, and an additional 166,666 shares to be transferred to the Third-Party SAC Investors monthly beginning on September 14, 2023 and up to, and including, February 14, 2024, if the board of directors of SAC elects to further extend the deadline to consummate an initial business combination at or prior to such date, in each case, if the Third-Party SAC Investors continue to hold such Non-Redeemed Shares through the First Extension Special Meeting.

In connection with the First Extension Special Meeting and the entry into the Non-Redemption Agreements, on May 25, 2023, pursuant to the terms of our amended and restated certificate of incorporation, our sponsor converted 4,200,000 shares of our Class B common stock held by it on a one-for-one basis into shares of our Class A common stock.

After giving effect to the Conversion, we had an aggregate of 27,200,000 shares of our Class A common stock issued and outstanding, comprised of 4,200,000 shares held by our sponsor and not subject to possible redemption and 23,000,000 shares of our Class A common stock subject to possible redemption, and 1,550,000 shares of our Class B common stock issued and outstanding.

In connection with the First Extension Special Meeting, the holders of 18,849,935 shares of Class A common stock properly exercised their right to redeem their shares for cash, resulting in 4,150,065 shares of Class A common stock issued and outstanding and subject to possible redemption.

The board of directors of the Company approved six monthly extensions to extend the time the Company had to consummate an initial business combination from September 14, 2023 to March 14, 2024.

In connection with each of the six monthly extensions, our sponsor transferred 166,666 shares of our Class B common stock held by the sponsor to the Third-Party SAC Investors in accordance with the Non-Redemption Agreements.

In addition, on March 14, 2024, at the Second Extension Special Meeting, the Company’s stockholders approved a proposal to amend the Company’s amended and restated certificate of incorporation to further extend the time that the Company has to consummate its initial business combination from March 14, 2024 to December 14, 2024.

In connection with the Second Extension Special Meeting, the holders of 2,986,952 shares of Class A common stock properly exercised their right to redeem their shares for an aggregate redemption amount of $32,214,591, resulting in 1,163,113 shares of Class A common stock issued and outstanding and subject to possible redemption.

On March 21, 2024, the Company received correspondence from the staff of NYSE Regulation of the NYSE indicating that the staff has determined to commence proceedings to delist our Class A common stock, SAC Public Warrants and SAC Units, because the Company had fallen below the NYSE’s continued listing standard requiring a listed acquisition company to maintain an average aggregate global market capitalization attributable to its publicly held shares over a consecutive 30 trading day period of at least $40.0 million.

On April 8, 2024, the NYSE filed a Form 25 to delist our Class A common stock, SAC Public Warrants and SAC Units, and to remove such securities from registration under Section 12(b) of the Exchange Act.

The delisting became effective ten days after the filing of the Form 25, and the deregistration became effective 90 days after the Form 25 filing.

Our Class A common stock, SAC Public Warrants and SAC Units remain registered under Section 12(g) of the Exchange Act, and began trading on the OTC Pink Marketplace on or about March 22, 2024 under the ticker symbols “PORT,” “PORTW” and “PORTU,” respectively.

On October 2, 2024, the Company filed a definitive proxy statement with respect to the Third Extension Special Meeting to obtain stockholder approval of the Third Extension Amendment Proposal.

On October 11, 2024, the Company received a redemption report from the Trustee indicating that, as of October 11, 2024, the holders of 985,170 shares of the Company’s Class A common stock had properly exercised their right to redeem their shares for cash at a redemption price of approximately $11.08 per share.

On October 14, 2024, the Company determined to postpone the Third Extension Special Meeting originally scheduled for October 15, 2024, to October 22, 2024, to allow additional time for the Company to engage with its stockholders and solicit redemption reversals.

On October 21, 2024, the Company cancelled the Third Extension Special Meeting and announced that it intended to file an amendment to the definitive proxy statement to reflect the addition of the Redemption Limitation Amendment Proposal.

Accordingly, the redemptions indicated on the October 11, 2024 redemption report from the Trustee in connection with the Third Extension Special Meeting were not processed.

On October 29, 2024, the Company filed an amendment to the Original Filing that amends and restates the Original Filing to:

1) reschedule the Third Extension Special Meeting originally scheduled for October 15, 2024 and postponed to October 22, 2024 (as previously disclosed in the Current Report on Form 8-K filed with the SEC on October 15, 2024) to November 13, 2024 and 2) reflect the addition of the Redemption Limitation Amendment Proposal.

On November 12, 2024, the Company filed a Registration Statement on Form S-4 with the SEC in connection with the Business Combination with Angel Studios.

On November 13, 2024, the Company held the Third Extension Special Meeting, at which the Company’s stockholders approved the Third Extension Amendment Proposal and the Redemption Limitation Amendment Proposal.

In connection with the vote to approve the Third Extension Amendment Proposal and the Redemption Limitation Amendment Proposal, the holders of 1,125,126 shares of the Company’s Class A common stock properly exercised their right to redeem their shares (and did not withdraw their redemption) for cash at a redemption price of approximately $11.15 per share of Class A common stock, for an aggregate redemption amount of $12,543,118.

Proposed Business Combination

Merger Agreement

On September 11, 2024, the Company entered into the Merger Agreement, by and among the Company, Merger Sub, and Angel Studios.

The Merger Agreement provides that, among other things and upon the terms and subject to the conditions thereof, (i) at the Closing, upon the terms and subject to the conditions thereof, and in accordance with the Delaware General Corporation Law, as amended, Merger Sub will merge with and into Angel Studios, with Angel Studios continuing as the surviving corporation and a wholly owned subsidiary of SAC;

(ii) at the Closing, all of the outstanding capital stock of Angel Studios (other than shares subject to Angel Studios options, shares held in treasury and any dissenting shares) will be converted into the right to receive shares of our common stock, in an aggregate amount equal to (x) $1,500,000,000 plus the aggregate gross proceeds of any capital raised by Angel Studios prior to the Closing, divided by (y) $10.00;

(iii) at the Closing, all of the outstanding options to acquire capital stock of Angel Studios will be converted into comparable options to acquire shares of our common stock (subject to appropriate adjustments to the number of shares of our common stock underlying such options and the exercise price of such options);

(iv) subject to the approval of the holders of SAC’s public warrants, SAC will amend its public warrants so that, immediately prior to the Closing, each of the issued and outstanding SAC public warrants automatically will convert into 0.1 newly issued share of our Class A common stock and such warrants will cease to be outstanding;

and (v) at the Closing, SAC will be renamed “Angel Studios, Inc.”

The Merger Agreement is subject to the satisfaction or waiver of certain customary closing conditions, including, among others, (i) the absence of any law or injunction prohibiting the consummation of the Business Combination, (ii) the effectiveness of the registration statement on Form S-4 filed by SAC in connection with the transaction, (iii) the approval of the Merger Agreement and the transactions contemplated thereby by the respective stockholders of SAC and Angel Studios, and (iv) the receipt of approval for listing on the New York Stock Exchange or the Nasdaq Stock Market (or any other nationally recognized stock exchange in the United States as may be agreed by Angel Studios and SAC) of our Class A common stock (including shares issued in the transaction).

Each party’s obligations to consummate the Business Combination are also conditioned upon the accuracy of the other party’s representations and warranties, subject to customary materiality and material adverse effect qualifiers, and the performance in all material respects by the other party of its covenants in the Merger Agreement to be performed as of or prior to the Closing.

The Merger Agreement contains additional covenants, including, among others, providing for (i) the parties to conduct their respective businesses in the ordinary course through the Closing, (ii) the parties to not initiate any negotiations or enter into any agreements for certain alternative transactions, (iii) SAC to prepare and file a registration statement on Form S-4, including a joint proxy statement/prospectus, and take certain other actions to obtain the requisite approval of SAC stockholders of certain proposals regarding the Business Combination and SAC warrant holders regarding the warrant conversion, and (iv) the parties to use reasonable best efforts to obtain necessary approvals from governmental agencies.

The Merger Agreement contains customary representations and warranties by SAC, Merger Sub and Angel Studios.

The representations and warranties of the respective parties to the Merger Agreement generally will not survive the Closing.

The Merger Agreement may be terminated at any time prior to the Closing (i) by written consent of SAC and Angel Studios, (ii) by either Angel Studios or SAC, if certain approvals of the stockholders of SAC or Angel Studios, to the extent required under the Merger Agreement, are not obtained as set forth therein, (iii) by Angel Studios, if there is a Modification in Recommendation (as defined in the Merger Agreement), or by SAC, if there is a Company Modification in Recommendation (as defined in the Merger Agreement), and (iv) by either SAC or Angel Studios in certain other circumstances set forth in the Merger Agreement, including (a) if any governmental authority shall have issued or otherwise entered a final, non-appealable order making consummation of the Merger illegal or otherwise preventing or prohibiting consummation of the Merger, (b) in the event of certain uncured material breaches by the other party or (c) if the Closing has not occurred on or before September 30, 2025.

Support Agreement

On September 11, 2024, SAC also entered into a Sponsor Support Agreement (the “Sponsor Support Agreement”), by and among SAC, our sponsor and Angel Studios, pursuant to which our sponsor has agreed to, among other things, (i) vote in favor of the Merger Agreement and the transactions contemplated thereby and (ii) not redeem its shares of our common stock in connection therewith.

In addition, our sponsor has agreed to forfeit all of the private placement warrants held by it at the Closing for no additional

consideration.

Our Sponsor has also agreed to cover certain expenses incurred by SAC that are unpaid and payable at the Closing in excess of a specified cap.

The Sponsor Agreement will terminate upon the earlier of the termination of the Merger Agreement or written agreement by the parties.

Angel Studios Stockholder Support Agreement

On September 11, 2024, SAC also entered into a Stockholder Support Agreement (the “Angel Studios Stockholder Support Agreement”) by and among SAC, Angel Studios and certain stockholders of Angel Studios (the “Key Stockholders”).

Under the Angel Studios Stockholder Support Agreement, the Key Stockholders agreed, with respect to the outstanding shares of Angel Studios common stock held by such Key Stockholders, to vote their shares or execute and deliver a written consent adopting the Merger Agreement and related transactions and approving the Merger Agreement and transactions contemplated thereby.

Registration Rights Agreement

The Merger Agreement contemplates that, at the Closing, SAC, our sponsor, certain equity holders of Angel Studios, Jared Stone and the other parties thereto, will enter into a Registration Rights Agreement (the “Registration Rights Agreement”), pursuant to which SAC will grant customary registration rights to the other parties thereto, including to register for resale, pursuant to Rule 415 under the Securities Act, certain shares of SAC common stock that are held by the other parties thereto.

Lock-Up Agreement

The Merger Agreement contemplates that, at the Closing, SAC and the Key Holders (as defined in the Merger Agreement) will enter into a Lock-Up Agreement (the “Lock-Up Agreement”).

The Lock-Up Agreement contains certain restrictions on transfer with respect to shares of SAC common stock held by the Key Holders immediately following the Closing (other than shares purchased in the public market after the Closing) and the shares of SAC common stock issued to directors and executive officers of the combined company upon settlement or exercise of stock options or other equity awards outstanding as of immediately following the Closing in respect of awards of Angel Studios outstanding immediately prior to the Closing (the “Lock-Up Shares”).

Such restrictions begin at the Closing and end on the earlier of (i) one year after the Closing and (ii) (a) for 33% of the Lock-Up Shares, the date on which the last reported sale price of SAC common stock equals or exceeds $12.50 per share for any 20 trading days within any 30-trading day period commencing at least 30 days after the Closing and (b) for an additional 50% of the Lock-Up Shares, the date on which the last reported sale price of SAC common stock equals or exceeds $15.00 per share for any 20 trading days within any 30-trading day period commencing at least 30 days after the Closing.

For additional information about the Merger Agreement and the related agreements and transactions, please see the Registration Statement on Form S-4 initially by SAC with the SEC on November 12, 2024, as amended.

Results of Operations and Known Trends or Future Events

We did not commence operations until after the closing of our IPO in December 2021, and we have not engaged in any significant operations nor generated any operating revenues to date.

We will not generate any operating revenues until after completion of our initial business combination.

Our entire activity from inception through December 31, 2024 relates solely to our formation, our IPO and, pursuit of an initial business combination.

We have not generated any operating revenues to date, and we will not generate any operating revenues until after completion of our initial business combination.

We will generate non-operating income in the form of interest income on cash and cash equivalents.

There has been no material adverse change in our financial condition since the date of our audited financial statements.

There has been no significant change in our financial or trading position and no material adverse change has occurred since the date of our audited financial statements.

We have incurred and expect to continue to incur increased expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses.

For the year ended December 31, 2024, we had net loss of $5,107,051 which consisted of operating expenses of $1,587,286, a loss on the change in the fair value of the warrant liability of $4,058,500, a $274,973 financing expense, and a provision for income tax of $152,466, offset by dividend income of $966,174.

In comparison, for the year ended December 31, 2023, we had net income of $2,729,602, which consisted of dividend income of $6,707,678 on marketable securities held in trust, offset by operating expenses of $1,670,440, a provision for income tax of $1,319,280, a $934,906 financing expense, and a $53,450 loss on the change in fair value of the warrant liability.

Liquidity, Capital Resources and Going Concern

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maintained by Continental Stock Transfer & Trust Company, acting as trustee.

In connection with the Special Meeting, the holders of 18,849,935 shares of Class A common stock properly exercised their right to redeem their shares for an aggregate redemption amount of $197,694,657, resulting in 4,150,065 shares of Class A common stock issued and outstanding and subject to possible redemption.

Accordingly, at December 31, 2023, there were 8,350,065 shares of Class A common stock issued and outstanding, including 4,150,065 shares of Class A common stock subject to possible redemption.

Continental Stock Transfer & Trust Company (the “Trustee”) processed the redemptions and withdrew the $197,694,657 payable to the holders redeeming 18,849,935 shares of Class A common stock on July 7, 2023.

In connection with the First Extension Special Meeting, the holders of 18,849,935 shares of Class A common stock properly exercised their right to redeem their shares for an aggregate redemption amount of $197,694,657, resulting in 4,150,065 shares of Class A common stock issued and outstanding and subject to possible redemption.

In connection with the Third Extension Special Meeting, the holders of 1,125,126 shares of Class A common stock properly exercised their right to redeem their shares for an aggregate redemption amount of $12,543,118, resulting in 37,987 shares of Class A common stock issued and outstanding and subject to possible redemption.

Accordingly as of December 31, 2024 and 2023, there was $429,151 and $44,709,805 held in the Trust Account, respectively.

Transaction costs of the initial public offering amounted to $13,935,218, consisting of $4,600,000 of underwriting discount, $8,050,000 of deferred underwriting discount, and $1,285,218 of actual offering costs.

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On August 22, 2022, the underwriter delivered a letter to the Company pursuant to which the underwriter waived its entitlement to the payment of the deferred underwriting fee.

For the year ended December 31, 2024, net cash used in operating activities was $2,284,359.

Net loss of $5,107,051 was increased by accrued dividends on marketable securities held in trust of $1,603 and a $1,509,178 decrease in operating assets and liabilities, offset by a $4,058,500 loss on the change in fair value of the warrant liability and $274,973 of financing expense related to the transfer of Class B common stock from the sponsor to unaffiliated third parties under non-redemption agreements.

For the year ended December 31, 2023, net cash provided by operating activities was $5,542,225.

Net income of $2,729,602 was increased by a $53,450 gain on the change in fair value of the warrant liability, $934,906 of financing expense, and $2,022,686 of changes in operating assets and liabilities, offset by accrued dividends on marketable securities held in trust of $198,419.

As of December 31, 2023, we had marketable securities held in the Trust Account of $44,709,805, consisting of securities held in a money market fund that invests in U.S.

Net income of $2,729,602 was increased by a $53,450 gain on the change in fair value of the warrant liability, $934,906 of financing expense related to the transfer of Class B common stock from the sponsor to unaffiliated third parties under non-redemption agreements, and a $2,022,686 increase in operating assets and liabilities, offset by accrued dividends on marketable securities held in trust of $198,419.

As of December 31, 2024 and 2023, we had marketable securities held in the Trust Account of $429,151 and $44,709,805, respectively, consisting of securities held in a money market fund that invests in U.S.

Treasury securities with a maturity of 185 days or less.

As of December 31, 2023, we had cash of $2,171,553 held outside the Trust Account.

As of December 31, 2024 and 2023, we had cash of $494,974 and $2,171,553 held outside the Trust Account, respectively.

We intend to use the funds held outside the Trust Account primarily to identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from the offices, plants or similar locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses, and structure, negotiate and complete a business combination.

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The sponsor has provided cash contributions of $644,227 and $800,000 for the years ended December 31, 2024 and December 31, 2023, respectively.

On October 3, 2024, the sponsor agreed to loan the Company an aggregate of up to $1,000,000 to cover expenses related to the Business Combination (the “Sponsor Promissory Note”).

The Sponsor Promissory Note is non-interest bearing and payable on the earlier of September 30, 2025 or the date on which the Company consummates an initial business combination.

If the Company does not consummate a business combination, the Sponsor Promissory Note will not be repaid and all amounts owed under the Sponsor Promissory Note will be forgiven except to the extent that the Company as funds available to it outside of the Trust Account.

As of December 31, 2024, the Company drew $439,004 under the Sponsor Promissory Note.

We do not believe we will have sufficient funds in order to meet the expenditures required for operating our business prior to our initial business combination.

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However, on August 22, 2022, the underwriter delivered a letter to the Company pursuant to which the underwriter waived its entitlement to the payment of the deferred underwriting fee.

We have entered into a letter agreement with our sponsor pursuant to which we are required to pay our sponsor a total of $15,000 per month for office space, utilities, and secretarial and administrative services, commencing on December 10, 2021, the date that our securities were first listed on the NYSE, through the earlier of our initial business combination and our liquidation.

We have entered into a letter agreement with our sponsor pursuant to which we are required to pay our sponsor a total of $15,000 per month for office space, utilities, and secretarial and administrative services, commencing on December 10, 2021, through the earlier of our initial business combination and our liquidation.

On October 3, 2024, the sponsor agreed to loan the Company an aggregate of up to $1,000,000 to cover expenses related to the Business Combination.

The Sponsor Promissory Note is non-interest bearing and payable on the earlier of September 30, 2025 or the date on which the Company consummates an initial business combination.

Commitments and Contingencies

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Non-redemption Agreements

On May 25, 2023, the Company and the sponsor entered into Non-Redemption Agreements with unaffiliated third parties in exchange for such third parties agreeing (i) not to redeem an aggregate of 4,000,000 shares of Class A common stock sold in its initial public offering (the “Non-Redeemed Shares”) in connection with the Special Meeting and (ii) to vote in favor of the Extension Amendment Proposal and the Extension at the Special Meeting (other than with respect to certain shares acquired or to be acquired pursuant to the Non-Redemption Agreements).

In exchange for the foregoing commitments, the sponsor agreed to transfer to such third parties an aggregate of up to 1,499,996 shares of Class B common stock held by the sponsor, with 500,000 of such shares to be transferred to such third parties promptly upon consummation of the Extension, and an additional 166,666 shares to be transferred to such third parties monthly beginning on September 14, 2023 and up to, and including, February 14, 2024, if the board of directors of the Company elects to further extend the deadline to consummate an initial business combination at or prior to such date, in each case, if such third parties continue to hold such Non-Redeemed Shares through the Special Meeting.

As of December 31, 2023, the Company had extended the deadline to complete the business combination four times, to January 14, 2024, resulting in an aggregate of 666,664 additional shares of Class B common stock held by the sponsor being transferred to such third parties.

As discussed in Note 11 to the financial statements (Subsequent Events), in January and February 2024, the Company further extended the deadline to March 14, 2024, resulting in the full amount of 1,499,996 shares of Class B common stock being transferred to such third parties.

On May 25, 2023, the Company and the sponsor entered into Non-Redemption Agreements with the Third-Party SAC Investors in exchange for the Third-Party SAC Investors agreeing (i) not to redeem an aggregate of 4,000,000 shares of Class A common stock sold in its initial public offering in connection with the First Extension Special Meeting and (ii) to vote in favor of the First Extension Amendment Proposal and the First Extension at the First Extension Special Meeting (other than with respect to certain shares acquired or to be acquired pursuant to the Non-Redemption Agreements).

In exchange for the foregoing commitments, the sponsor agreed to transfer to such third parties an aggregate of up to 1,499,996 shares of Class B common stock held by the sponsor, with 500,000 of such shares to be transferred to such third parties promptly upon consummation of the First Extension, and an additional 166,666 shares to be transferred to such third parties monthly beginning on September 14, 2023 and up to, and including, February 14, 2024, if the board of directors of the Company elects to further extend the deadline to consummate an initial business combination at or prior to such date, in each case, if such third parties continue to hold such Non-Redeemed Shares through the First Extension Special Meeting.

The board of directors of the Company approved six monthly extensions to extend the time the Company had to consummate an initial business combination from September 14, 2023 to March 14, 2024.

The Company accounted for the Non-Redemption Agreements in accordance with Staff Accounting Bulletin Topic 5T (“SAB Topic 5T”).

The Company considered the sponsor’s transfer of Class B common stock to the unaffiliated third parties in exchange for the Non-Redemption Agreements as a capital contribution by the sponsor and recognized the excess fair value of the transferred Class B common stock as a financing expense on the statements of operations.

The Company determined the excess fair value of the 1,166,664 shares of Class B common stock transferred to such third parties upon the consummation of the Extension to be $934,906.

The Company determined the excess fair value of the 1,499,996 shares of Class B common stock transferred to such third parties to be $1,209,879.

Critical Accounting Estimates

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis