Commitments and Contingencies
|3 Months Ended|
Mar. 31, 2023
|Commitments and Contingencies Disclosure [Abstract]|
|Commitments and Contingencies||
NOTE 6 — COMMITMENTS AND CONTINGENCIES
The holders of the Founder Shares, Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans (and any shares of common stock issuable upon the exercise of the Private Placement Warrants or warrants issued upon conversion of the Working Capital Loans and upon conversion of the Founder Shares) will be entitled to registration rights pursuant to a registration rights agreement to be signed prior to or on the effective date of Initial Public Offering requiring the Company to register such securities for resale (in the case of the Founder Shares, only after conversion to shares of Class A common stock). The holders of these securities will be entitled to make up to three demands, excluding short form registration demands, that the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to completion of a Business Combination and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. However, the registration rights agreement provides that the Company will not be required to effect or permit any registration or cause any registration statement to become effective until the securities covered thereby are released from their
lock-uprestrictions. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
The Company granted the underwriter a
45-dayoption from the date of Initial Public Offering to purchase up to 3,000,000 additional Units to cover over-allotments, if any, at the Initial Public Offering price less the underwriting discounts and commissions. The underwriter elected to fully exercise the over-allotment option on January 25, 2022 in conjunction with the consummation of the Initial Public Offering.
The underwriter was paid a cash underwriting discount of $4,600,000, upon the closing of the Initial Public Offering. In addition, the underwriter will be entitled to a deferred fee of $6,900,000. 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.
In accordance with the underwriting agreement, the underwriter made a payment to the Company in an amount equal to $400,000 to reimburse certain of Company offering expenses which reduced the net cash underwriting fee to $4,200,000.
Prior to the consummation of the Initial Public Offering, the Company entered into a consulting agreement with an advisory firm that will assist in the identification, due diligence and assistance in the valuation of potential business combination opportunities for the Company. Pursuant to the agreement, the Company paid the advisory firm $400,000 at the consummation of the Initial Public Offering for services rendered from the inception of the agreement through that date. In addition, in accordance with the terms of the agreement, a percentage of the gross proceeds from the Company’s initial public offering is to be paid to the consultant for services rendered throughout the term of the contract to be due and payable upon the completion of a successful business combination. The Company has included $1,150,000 in other long-term liabilities pertaining to this amount owed.
Legal fees related to a potential business combination are identified separately from normal course of business legal fees. The Company entered into an agreement whereby half of business combination legal fees are contingent upon a successful business combination and will be paid at close. As of March 31, 2023 and December 31, 2022 the Company had contingent legal fees of $251,500 and $230,500, respectively.
The entire disclosure for commitments and contingencies.
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef