Document and Entity Information
Document and Entity Information - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Mar. 05, 2024 | Jun. 30, 2023 | |
Document and Entity Information | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2023 | ||
Document Transition Report | false | ||
Entity File Number | 001-41013 | ||
Entity Registrant Name | Concord Acquisition Corp III | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 86-2171699 | ||
Entity Address, Address Line One | 477 Madison Avenue | ||
Entity Address, City or Town | New York | ||
Entity Address State Or Province | NY | ||
Entity Address, Postal Zip Code | 10022 | ||
City Area Code | 212 | ||
Local Phone Number | 883-4330 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | false | ||
ICFR Auditor Attestation Flag | false | ||
Document Financial Statement Error Correction [Flag] | false | ||
Entity Shell Company | true | ||
Entity Central Index Key | 0001851961 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2023 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Transition Report | false | ||
Entity Public Float | $ 42,020 | ||
Auditor Name | Marcum LLP | ||
Auditor Firm ID | 688 | ||
Auditor Location | Philadelphia, Pennsylvania | ||
Class A common stock | |||
Document and Entity Information | |||
Title of 12(b) Security | Class A common stock, $0.0001 par value per share | ||
Trading Symbol | CNDB | ||
Security Exchange Name | NYSE | ||
Entity Common Stock, Shares Outstanding | 12,566,360 | ||
Warrants to purchase one share of common stock | |||
Document and Entity Information | |||
Title of 12(b) Security | Warrants to purchase one share of common stock | ||
Trading Symbol | CNDB.WS | ||
Security Exchange Name | NYSE | ||
Units, each consisting of one share of Class A common stock and one-half of one redeemable warrant | |||
Document and Entity Information | |||
Title of 12(b) Security | Units, each consisting of one share of common | ||
Trading Symbol | CNDB.U | ||
Security Exchange Name | NYSE | ||
Class B common stock | |||
Document and Entity Information | |||
Entity Common Stock, Shares Outstanding | 1 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Current Assets: | ||
Cash | $ 16,371 | $ 521,149 |
Expense reimbursement receivable from GCT | 296,441 | 0 |
Prepaid expenses and other current assets | 6,418 | 331,453 |
Total Current Assets | 319,230 | 852,602 |
Marketable securities and cash held in trust account | 42,406,594 | 356,190,233 |
Total Assets | 42,725,824 | 357,042,835 |
Current Liabilities: | ||
Due to related party | $ 100,920 | $ 10,024 |
Other Liability, Current, Related Party, Type [Extensible Enumeration] | us-gaap:RelatedPartyMember | us-gaap:RelatedPartyMember |
Accrued income taxes | $ 485,207 | |
Accrued legal expense | $ 1,243,000 | 2,000 |
Accrued capital markets advisory expense | 2,500,000 | |
Other accounts payable and accrued expenses | 275,271 | 77,569 |
Excise tax payable | 3,184,272 | |
Total Current Liabilities | 7,303,463 | 574,800 |
Warrant liability, at fair value | 2,383,000 | $ 1,812,200 |
Promissory note - related party | $ 35,000 | |
Other Liability, Noncurrent, Related Party, Type [Extensible Enumeration] | us-gaap:RelatedPartyMember | us-gaap:RelatedPartyMember |
Sponsor loans, at fair value | $ 1,000,000 | |
Deferred underwriters' commission | $ 5,083,575 | 12,075,000 |
Total Liabilities | 14,805,038 | 15,462,000 |
Commitments and Contingencies | ||
Stockholders' Deficit: | ||
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding | ||
Accumulated deficit | (14,491,817) | (14,063,963) |
Total Stockholders' Deficit | (14,490,954) | (14,063,100) |
Total Liabilities and Stockholders' Deficit | 42,725,824 | 357,042,835 |
Class A common stock | ||
Stockholders' Deficit: | ||
Common stock | 863 | 0 |
Class A common stock subject to possible redemption | ||
Current Liabilities: | ||
Common stock subject to possible redemption, 3,941,361 and 34,500,000 shares at redemption value of $10.76 and $10.31 at December 31, 2023 and 2022, respectively | $ 42,411,740 | 355,643,935 |
Class B common stock | ||
Stockholders' Deficit: | ||
Common stock | $ 863 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2023 | Dec. 31, 2022 |
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Class A common stock | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Class A common stock subject to possible redemption | ||
Common stock subject to possible redemption shares outstanding | 3,941,361 | 34,500,000 |
Common stock subject to possible redemption price per share | $ 10.76 | $ 10.31 |
Class A common stock not subject to possible redemption | ||
Common stock, shares issued | 8,624,999 | 0 |
Common stock, shares outstanding | 8,624,999 | 0 |
Class B common stock | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 20,000,000 | 20,000,000 |
Common stock, shares issued | 1 | 8,625,000 |
Common stock, shares outstanding | 1 | 8,625,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Operating costs, net | $ 4,867,708 | $ 1,172,506 |
Loss From Operations | (4,867,708) | (1,172,506) |
Other income (loss): | ||
Income from operating bank account | 3,335 | |
Income from cash and investments held in trust account | 6,795,482 | 5,091,197 |
Recovery of offering costs attributable to warrant liability | 372,678 | |
Change in fair value of warrant liability and sponsor loans | (2,913,800) | 21,332,800 |
Total other income, net | 4,257,695 | 26,423,997 |
(Loss) income before provision for income taxes | (610,013) | 25,251,491 |
Provision for income taxes | (1,385,741) | (995,207) |
Net (Loss) Income | $ (1,995,754) | $ 24,256,284 |
Class A common stock subject to possible redemption | ||
Other income (loss): | ||
Weighted average shares outstanding, basic | 14,374,778 | 34,500,000 |
Weighted average shares outstanding, diluted | 14,374,778 | 34,500,000 |
Basic net (loss) income per share | $ (0.09) | $ 0.56 |
Diluted net (loss) income per share | $ (0.09) | $ 0.56 |
Class A and B common stock | ||
Other income (loss): | ||
Weighted average shares outstanding, basic | 8,625,000 | 8,625,000 |
Weighted average shares outstanding, diluted | 8,625,000 | 8,625,000 |
Basic net (loss) income per share | $ (0.09) | $ 0.56 |
Diluted net (loss) income per share | $ (0.09) | $ 0.56 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT - USD ($) | Class A common stock Common Stock | Class B common stock Common Stock | Additional Paid-in Capital | Accumulated Deficit | Total |
Balance at the beginning at Dec. 31, 2021 | $ 863 | $ (34,576,312) | $ (34,575,449) | ||
Balance at the beginning (in shares) at Dec. 31, 2021 | 8,625,000 | ||||
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT | |||||
Excise tax payable attributable to redemption of common stock | 0 | ||||
Increase in redemption value of shares subject to possible redemption | (3,743,935) | (3,743,935) | |||
Net Income (Loss) | 24,256,284 | 24,256,284 | |||
Balance at the end at Dec. 31, 2022 | $ 863 | (14,063,963) | (14,063,100) | ||
Balance at the end (in shares) at Dec. 31, 2022 | 8,625,000 | ||||
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT | |||||
Contribution - non-redemption agreements | $ 6,981,310 | 6,981,310 | |||
Fair value of shareholder non-redemption agreements | $ (6,981,310) | (6,981,310) | |||
Excise tax payable attributable to redemption of common stock | (3,184,272) | (3,184,272) | |||
Conversion of Class B common stock to Class A common stock | $ 863 | $ (863) | |||
Conversion of Class B common stock to Class A common stock (in shares) | 8,624,999 | (8,624,999) | |||
Partial waiver of deferred underwriters' commission | 6,618,747 | 6,618,747 | |||
Extinguishment of debt | 3,343,000 | 3,343,000 | |||
Increase in redemption value of shares subject to possible redemption | (5,209,575) | (5,209,575) | |||
Net Income (Loss) | (1,995,754) | (1,995,754) | |||
Balance at the end at Dec. 31, 2023 | $ 863 | $ (14,491,817) | $ (14,490,954) | ||
Balance at the end (in shares) at Dec. 31, 2023 | 8,624,999 | 1 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Cash Flows from Operating Activities: | ||
Net (loss) income | $ (1,995,754) | $ 24,256,284 |
Adjustments to reconcile net (loss) income to net cash used in operating activities: | ||
Income from cash and investments held in trust account | (6,795,482) | (5,091,197) |
Change in fair value of warrants subject to forfeiture | 2,913,800 | (21,332,800) |
Recovery of offering costs attributable to warrant liability | (372,678) | |
Changes in operating assets and liabilities: | ||
Expense reimbursement receivable from GCT | (296,441) | |
Prepaid expenses | 330,288 | 389,014 |
Due to related party | 90,896 | 7,297 |
Accrued income taxes, net | (490,460) | 485,207 |
Accrued legal expense | 1,241,000 | (3,000) |
Accrued capital markets advisory expense | 2,500,000 | |
Other accounts payable and accrued expenses | 197,702 | (226,869) |
Net Cash Used in Operating Activities | (2,677,129) | (1,516,064) |
Cash Flows from Investing Activities: | ||
Cash withdrawn from trust account to pay taxes | 2,137,351 | 822,658 |
Cash withdrawn from trust account in connection with redemptions | 318,441,770 | |
Net Cash Provided by Operating Activities | 320,579,121 | 822,658 |
Cash Flows from Financing Activities: | ||
Proceeds from issuance of promissory note to related party | 35,000 | |
Redemption of common stock | (318,441,770) | |
Net Cash Used in Financing Activities | (318,406,770) | |
Net change in cash | (504,778) | (693,406) |
Cash, beginning of the year | 521,149 | 1,214,555 |
Cash, end of the year | 16,371 | 521,149 |
Non-cash financing transactions: | ||
Increase in redemption value of shares subject to possible redemption | 5,209,575 | 3,743,935 |
Non-cash contribution - non-redemption agreements | 6,981,310 | |
Partial waiver of deferred underwriter commission | 6,618,747 | |
Excise tax payable attributable to redemption of common stock | $ 3,184,272 | |
Conversion of Class B common stock to Class A common stock | 863 | |
Extinguishment of debt | $ 3,343,000 | |
Other supplemental cash flow information: | ||
Federal income tax paid | $ 1,876,201 | $ 510,000 |
ORGANIZATION, BUSINESS OPERATIO
ORGANIZATION, BUSINESS OPERATIONS AND LIQUIDITY | 12 Months Ended |
Dec. 31, 2023 | |
ORGANIZATION, BUSINESS OPERATIONS AND LIQUIDITY | |
ORGANIZATION, BUSINESS OPERATIONS AND LIQUIDITY | NOTE 1. ORGANIZATION, BUSINESS OPERATIONS AND LIQUIDITY Organization and General Concord Acquisition Corp III (the “Company”) is a blank check company incorporated on February 18, 2021, as a Delaware corporation 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 (the “Business Combination”). As of December 31, 2023, the Company had not commenced any operations. All activity for the period from February 18, 2021 (inception) through December 31, 2023, relates to the Company’s formation, the Initial Public Offering (as defined below) and, subsequent to the Initial Public Offering, identifying a target company for a Business Combination and completion of the proposed Business Combination (described below). The Company will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest. The Company will generate non-operating income in the form of investment income on cash and cash equivalents from the proceeds derived from the Initial Public Offering, and non-operating income or expense from the changes in the fair value of warrant liability and Sponsor Loans. The Company’s sponsors are Concord Sponsor Group III LLC (the “Sponsor”) (an affiliate of Atlas Merchant Capital LLC), and CA2 Co-Investment LLC (an affiliate of one of the underwriters of the Initial Public Offering) (“CA2 Co-Investment” and, together with the Sponsor, the “Sponsors”). The registration statements for the Initial Public Offering were declared effective by the U.S. Securities and Exchange Commission (the “SEC”) on November 3, 2021 (the “Effective Date”). On November 8, 2021, the Company completed its initial public offering (the “Initial Public Offering” or “IPO”) of 34,500,000 units (“Units”), including the issuance of 4,500,000 Units as a result of the underwriters’ exercise in full of their over-allotment option at an offering price of $10.00 per Unit, generating gross proceeds of $345,000,000. Simultaneously with the closing of the IPO, the Company consummated the private placement of 8,260,606 warrants to the Sponsor and 1,139,394 warrants to CA2 Co-Investment (together, the “Private Placement Warrants”), each at a price of $1.00 per Private Placement Warrants, generating gross proceeds of $9,400,000. The Company also executed promissory notes with the Sponsors, evidencing loans to the Company in the aggregate amount of $6,900,000 (the “Sponsors Loans”). The Sponsor Loans may, by their terms, be repaid or converted into warrants (the “Sponsor Loan Warrants”) at a conversion price of $1.00 per warrant, at the Sponsors’ discretion. The Sponsor Loan Warrants will be identical to the Private Placement Warrants, which are described in Note 5. The Company’s Business Combination must be with one or more target businesses that together have a fair market value equal to at least 80% of the net balance in the Trust Account (as defined below) (excluding the amount of deferred underwriting discounts held and taxes payable on the income earned on the Trust Account) at the time of the signing an agreement to enter into a Business Combination. However, the Company will only complete a Business Combination if the post-Business Combination company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act of 1940, as amended (the “Investment Company Act”). There is no assurance that the Company will be able to successfully effect a Business Combination. Upon the closing of the Initial Public Offering, a total of $351,900,000 ($10.20 per Unit) of the net proceeds from the IPO, the Private Placement and the Sponsor Loans was deposited in a trust account (“Trust Account”) and was invested only in U.S. government treasury bills with a maturity of 185 days or less or in money market funds investing solely in U.S. Treasuries and meeting certain conditions under Rule 2a-7 under the Investment Company Act. Except with respect to interest earned on the funds held in the Trust Account that may be released to the Company as described below, the funds held in the Trust Account will not be released from the Trust Account until the earliest of: (1) the completion of the initial Business Combination; (2) the redemption of any public shares properly submitted in connection with a stockholder vote to amend the Company’s amended and restated certificate of incorporation (i) to modify the substance or timing of the Company’s obligation to provide for the redemption of the public shares in connection with the initial Business Combination or to redeem 100% of the public shares if the Company does not complete the initial Business Combination by the Current Extended Date (as defined below) or (ii) with respect to any other provisions relating to stockholders’ rights or pre-initial Business Combination activity; and (3) the redemption of all of the public shares if the Company has not completed the initial Business Combination by the Current Extended Date, subject to applicable law. The proceeds deposited in the Trust Account could become subject to the claims of the Company’s creditors, if any, which could have priority over the claims of the public stockholders. The Company will provide its public stockholders with the opportunity to redeem all or a portion of their public shares upon the completion of the initial Business Combination either: (1) in connection with a stockholder meeting called to approve the Business Combination; or (2) by means of a tender offer. Except as required by applicable law or stock exchange rules, the decision as to whether the Company will seek stockholder approval of a proposed Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The public stockholders will be entitled to redeem all or a portion of their public shares upon the completion of the initial Business Combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, calculated as of two All of the public shares contain a redemption feature which allows for the redemption of such public shares in connection with the Company’s liquidation, if there is a shareholder vote or tender offer in connection with the initial Business Combination and in connection with certain amendments to the Company’s amended and restated certificate of incorporation. The shares of common stock subject to redemption were recorded at redemption value and classified as temporary equity upon the completion of the Initial Public Offering, in accordance with FASB ASC Topic 480, “Distinguishing Liabilities from Equity.” In such case, the Company will proceed with a Business Combination, among other things, if the Company seeks stockholder approval, a majority of the issued and outstanding shares voted are voted in favor of the Business Combination. In April 2023, the Company and the Sponsor entered into Non-Redemption Agreements with a number of the Company’s stockholders in exchange for them agreeing not to redeem shares of the Company’s Class A common stock sold in the IPO (the “Non-Redeemed Shares”) in connection with the special meeting of stockholders called by the Company and held on May 4, 2023 (described below). In exchange for the foregoing commitments not to redeem such shares, the Sponsor has agreed to transfer to such stockholders an aggregate of 999,665 shares of the Company’s Class B common stock (the “Class B shares”), par value $0.0001 per share, held by the Sponsor immediately following consummation of an initial Business Combination. In November 2023, the Sponsor and the holders of the founder shares converted an aggregate of 8,624,999 shares of Class B common stock to shares of Class A common stock. On May 4, 2023, the Company’s stockholders approved at the special meeting of stockholders a proposal to amend the Company’s amended and restated certificate of incorporation (the “charter”) to extend the date by which the Company has to consummate a business combination from May 8, 2023 (the “Termination Date”) to November 8, 2023, or such earlier date as may be determined by the board of directors of the Company (such later date, the “Extended Date”). In connection with the votes to approve the Charter Amendment, the holders of 30,460,066 shares of Class A common stock of the Company properly exercised their right to redeem their shares for cash at a redemption price of approximately $10.42 per share, for an aggregate redemption amount of approximately $317,000,000, leaving approximately $42,000,000 in the Trust Account. In November 2023, the Company and the Sponsor entered into certain Non-Redemption Agreements with a number of the Company’s stockholders in exchange for them agreeing not to redeem shares of the Company’s Class A common stock sold in the IPO in connection with the special meeting of stockholders called by the Company and held on November 7, 2023 (described below). In exchange for the foregoing commitments not to redeem such shares, the Company has agreed to allocate to such investors an aggregate of 781,961 shares of Class A common stock (the “Promote Shares”) and the Sponsor has agreed to surrender and forfeit to the Company for no consideration a number of shares of Class B common stock equal to the number of Promote Shares upon closing of an initial Business Combination. On November 7, 2023, the Company’s stockholders approved at the special meeting of stockholders a proposal to amend the Company’s charter to further extend the date by which the Company has to consummate a Business Combination from the Extended Date to August 8, 2024, or such earlier date as may be determined by the board of directors of the Company (such later date, the “Current Extended Date”). In connection with the votes to approve such a proposal, the holders of an additional 98,573 shares of Class A common stock of the Company properly exercised their right to redeem their shares for cash at a redemption price of approximately $10.70 per share, for an aggregate redemption amount of approximately $1,100,000, leaving approximately $42,200,000 in the Trust Account and 3,941,361 shares of Class A common stock subject to possible redemption outstanding immediately following these redemptions. Deferred Underwriters’ Commission In December 2023, one of the underwriters waived any right to receive the deferred underwriters’ commission of $6,991,425 and will therefore receive no additional underwriting commissions in connection with the closing of a Business Combination. After one of the Company’s underwriters waived their right to the deferred underwriters’ commission, the remaining underwriters are entitled to a deferred underwriters’ commission of $5,083,575 of the gross proceeds of the IPO held in the Trust Account upon the completion of the Company’s initial Business Combination subject to the terms of the underwriting agreement. (see Note 4). Proposed Business Combination On November 2, 2023, the Company entered into a business combination agreement (the “Business Combination Agreement”) with GCT Semiconductor, Inc., a Delaware corporation (“GCT”), and Gibraltar Merger Sub Inc., a Delaware corporation and a direct, wholly-owned subsidiary of the Company (“Merger Sub”). Pursuant to the Business Combination Agreement, the parties will, subject to the satisfaction or waiver of the conditions contained in the Business Combination Agreement, consummate a business combination transaction pursuant to which Merger Sub will merge with and into GCT, with GCT surviving the merger as a wholly-owned subsidiary of the Company (the “Merger” and, together with the other transactions contemplated by the Business Combination Agreement, the “Transactions” and the closing of the Transactions, the “Closing”). The aggregate equity consideration to be paid to GCT’s stockholders and other equity holders in the Transactions (the “Aggregate Transaction Consideration”) will be equal to the quotient of (i) the Company Value (as defined below) divided by (ii) $10.00. Immediately prior to the Closing, all of the outstanding principal and accrued interest under the outstanding promissory notes issued by GCT that can be converted into shares of GCT common stock will be so converted in accordance with their terms. The “Company Value” means an amount equal to $350,000,000, minus the amount of indebtedness of GCT immediately prior to the Closing, plus the amount of GCT’s cash and cash equivalents immediately prior to the Closing (with standard exceptions), plus the aggregate exercise price of all “in-the-money” warrants of GCT outstanding immediately prior to the Closing. Following the Closing, the Company will issue up to an aggregate of 20,000,000 additional shares of its common stock to the stockholders of GCT as of immediately prior to the Closing and certain other persons, including the PIPE Investors (as defined below) (collectively, the “GCT Recipients”), if the volume weighted average price (the “VWAP”) of the shares of the Company’s common stock equals or exceeds certain minimum share prices at any time during the period starting 60 days following the Closing and expiring on the fifth anniversary of the Closing (the “Earnout Period”), as follows: (i) 6,666,667 shares if the VWAP of the shares of the common stock equals or exceeds $12.50 for any 20 trading days within a period of 30 consecutive trading days during the Earnout Period; (ii) 6,666,666 shares if the VWAP of the shares of the common stock equals or exceeds $15.00 for any 20 trading days within a period of 30 consecutive trading days during the Earnout Period; and (iii) 6,666,667 shares if the VWAP of the shares of the common stock equals or exceeds $17.50 for any 20 trading days within a period of 30 consecutive trading days during the Earnout Period. Such shares will also become issuable under certain circumstances if a “change of control” of the Company occurs following the Closing but prior to the applicable earnout expiration date and the price per share in the change of control equals or exceeds the applicable price target. Concurrently with the execution of the Business Combination Agreement, certain investors (the “PIPE Investors”) entered into subscription agreements (the “PIPE Subscription Agreements”) pursuant to which the PIPE Investors have committed to purchase in a private placement an aggregate of 4,484,854 shares of the Company’s Class A common stock (the “PIPE Shares”) at a purchase price of $6.67 per share and an aggregate purchase price of approximately $29,900,000 (the “PIPE Investment”). The purchase of the PIPE Shares is conditioned upon, among other things, the consummation of the Transactions and will be consummated immediately prior to or substantially concurrently with the Closing. The public warrants included as part of Units sold in the IPO (the “Public Warrants”) and Private Placement Warrants include certain down-round provisions under which their exercise price may be adjusted, if (a) the Company issues additional shares of the Company’s Class A common stock or securities convertible into or exercisable or exchangeable for shares of the Company’s Class A common stock for capital raising purposes in connection with the closing of its initial business combination at an issue price or effective issue price of less than $9.20 per share of the Company’s Class A common stock (the “Newly Issued Price”), (b) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of an initial business combination on the date of the consummation of such initial business combination (net of redemptions), and (c) the volume weighted average trading price of the Company’s Class A common stock during the twenty (20) trading day period starting on the trading day prior to the day on which the Company consummates an initial business combination (such price, the “Market Value”) is below $9.20 per share, the price per share (including in cash or by payment of warrants pursuant to a “cashless exercise,” to the extent permitted) at which shares of the Company’s Class A common stock may be purchased at the time a warrant is exercised will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price, and the $18.00 per share redemption trigger prices will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price. Concurrently with the execution of the Business Combination Agreement, the Company entered into a sponsor support agreement (the “Sponsor Support Agreement”) with GCT, the Sponsor and CA2 Co-Investment LLC (“CA2”). Pursuant to the Sponsor Support Agreement, the Sponsor and CA2 have, among other things, agreed to vote all of their shares of the Company’s common stock in favor of the approval of the Transactions, including the Merger, not to redeem any of their shares of the Company’s common stock and to waive their anti-dilution protections with respect to their shares of the Company’s Class B common stock. In addition, the Sponsor and CA2 agreed that a portion of up to an aggregate of 1,920,375 shares of common stock to be issued to them at Closing (collectively, the “Sponsor Earnout Shares”) will be unvested and subject to forfeiture as of the Closing, and will only vest if certain share price trading thresholds are satisfied during a specified period of time following the Closing. The Sponsor and CA2 further agreed that (i) 1,399,107 shares of common stock to be held by them at Closing, (ii) any portion of the Sponsor Earnout Shares not unvested and made subject to forfeiture as of the Closing and (iii) up to an aggregate of 2,820,000 Private Placement Warrants to be held by them at Closing may be allocated by GCT to the GCT Recipients, and transferred to the GCT Recipients at Closing (without any vesting conditions). The Sponsor and CA2 also agreed (i) to forfeit up to an additional 2,820,000 Private Placement Warrants held by them at Closing, to the extent not allocated prior to the Closing to certain third parties, including prospective PIPE Investors and holders of shares of the Company’s Class A common stock who agree not to redeem their shares in connection with any extension of the Company’s deadline to consummate an initial business combination, and (ii) to forgive all amounts outstanding under the Sponsor Loans. Additionally, GCT has agreed to pay (i) all SEC and other regulatory filing fees incurred in connection with the proposed Business Combination, (ii) such expenses incurred in connection with printing, mailing, and soliciting proxies with respect to the Registration Statement and Proxy Statement, (iii) such expenses incurred in connection with any filings with or approvals from the NYSE in connection with the proposed Business Combination, including any expenses and fees incurred by the Company to maintain the minimum NYSE listing requirements, (iv) such expenses relating to the filing fees and notification requirements under the HSR Act, and (v) the SPAC Extension Expenses. As of December 31, 2023 the Company has received $413,529 for the reimbursement of expenses and offset the reported expenses by $709,970 for amounts reimbursed or reimbursable by GCT. As of December 31, 2022, no amounts were received from GCT and no expenses were offset for any expense to be incurred by GCT related to the proposed Business Combination. As of December 31, 2023 and 2022, $296,441 and $0, respectively, is due from GCT and reported on the balance sheet as expense reimbursement receivable from GCT. On February 27, 2024, the Company held a special meeting in lieu of the 2024 annual meeting of stockholders in connection with the proposed Business Combination. At the Special Meeting, the Company’s stockholders approved the Business Combination Proposal, the Charter Amendment Proposal, each of the Governance Proposals (on a non-binding advisory basis), the election of each director nominee pursuant to the Election of Directors Proposal, the Incentive Award Plan Proposal, the Employee Stock Purchase Plan Proposal, and the NYSE Proposal, in each case as defined and described in greater detail in the Final Prospectus. Initial Business Combination The Company has until the Current Extended Date (the “Combination Period”) to complete the initial Business Combination. If the Company is unable to complete the initial Business Combination within the Combination Period or during any Extension Period (as defined below), the Company will: (1) cease all operations except for the purpose of winding up; (2) as promptly as reasonably possible but not more than ten The Sponsors, officers and directors have agreed to waive: (1) their redemption rights with respect to any Founder shares (as described in Note 5) or Converted Shares (as described below) and public shares held by them, as applicable, in connection with the completion of the initial Business Combination; (2) their redemption rights with respect to any Founder shares or Converted Shares and public shares held by them in connection with a stockholder vote to approve an amendment to the Company’s amended and restated certificate of incorporation (A) to modify the substance or timing of the obligation to allow redemptions in connection with the initial Business Combination or to redeem 100% of the public shares if the Company has not consummated the initial Business Combination within the Combination Period or (B) with respect to any other provision relating to stockholders’ rights or pre-initial Business Combination activity; and (3) their rights to liquidating distributions from the Trust Account with respect to any Founder shares or Converted Shares they hold if the Company fails to complete the initial Business Combination within the Combination Period or during any extended time that the Company has to consummate a Business Combination beyond the Combination Period as a result of a stockholder vote to amend the Company’s amended and restated certificate of incorporation (an “Extension Period”) (although they will be entitled to liquidating distributions from the Trust Account with respect to any public shares they hold if the Company fails to complete the initial Business Combination within the Combination Period). The Sponsor has agreed that it will be liable to the Company if and to the extent any claims by a third party for services rendered or products sold to the Company, or a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below: (1) $10.20 per public share; or (2) such lesser amount per public share held in the Trust Account as of the date of the liquidation of the Trust Account due to reductions in the value of the trust assets, in each case net of the amount of interest which may be withdrawn to pay taxes, except as to any claims by a third party who executed a waiver of any and all rights to seek access to the Trust Account and except as to any claims under the Company’s indemnity of the underwriters of the Initial Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsors will not be responsible to the extent of any liability for such third-party claims. The Company has not independently verified whether the Sponsor has sufficient funds to satisfy its indemnity obligations and believe that the Sponsor’s only assets are securities of the Company and, therefore, the Sponsor may not be able to satisfy those obligations. The Company has not asked the Sponsor to reserve for such obligations. Conversion of Class B Shares to Class A Shares On November 16, 2023, the holders of the Company’s Class B common stock, par value $0.0001 per share, converted 8,624,999 shares of the Company’s Class B Liquidity and Going Concern Considerations As of December 31, 2023, the Company had cash on hand of $16,371 held outside of the Trust Account and available for working capital purposes. Investment income on the cash held in the Trust Account may be released to the Company to pay taxes (excluding excise taxes) and up to $100,000 to pay dissolution expenses. During the year ended December 31, 2023, the Company withdrew $2,137,351 from the Trust Account for the payment of taxes. The Sponsor agreed to loan the Company up to $350,000 to be used to pay operating expenses and $35,000 is drawn down on this loan. Additionally, GCT has agreed to reimburse the Company for certain Business Combination related expenses. As of December 31, 2023 $296,441 is due from GCT. If the estimate of the costs of identifying a target business, undertaking in-depth due diligence and negotiating a Business Combination are less than the actual amount necessary to do so, the Company may have insufficient funds available to operate our business prior to a Business Combination. Moreover, the Company may need to obtain additional financing either to complete a Business Combination or because the Company becomes obligated to redeem a significant number of public shares upon consummation of a Business Combination, in which case the Company may issue additional securities or incur debt in connection with such Business Combination. Subject to compliance with applicable securities laws, the Company would only complete such financing simultaneously with the completion of a Business Combination. If the Company is unable to complete a Business Combination because it does not have sufficient funds available, the Company will be forced to cease operations and liquidate the Trust Account. In addition, following a Business Combination, if cash on hand is insufficient, the Company may need to obtain additional financing in order to meet its obligations. The Company has until the Current Extended Date to consummate a Business Combination. If a Business Combination is not consummated by this date and any additional extension(s) are not obtained, there will be a mandatory liquidation and subsequent dissolution of the Company. Although the Company intends to consummate a Business Combination on or before the Current Extended Date, it is uncertain whether the Company will be able to consummate a Business Combination by this time. In connection with the Company’s assessment of going concern considerations in accordance with ASC Subtopic 205-40, “Presentation of Financial Statements – Going Concern”, Management has determined that the mandatory liquidation, should a Business Combination not occur, and an additional extension is not obtained, and potential subsequent dissolution, as well as the potential for the Company to have insufficient funds available to operate its business prior to a Business Combination, raise substantial doubt about the Company’s ability to continue as a going concern. No adjustments have been made to the carrying amounts and classification of assets or liabilities should the Company be required to liquidate after the Current Extended Date. Notification from the New York Stock Exchange On January 19, 2024, the Company received a notification (the “Notice”) from the New York Stock Exchange (the “NYSE”) informing the Company that, because the number of public stockholders is less than 300, the Company is not in compliance with Section 802.01B of the NYSE Listed Company Manual (the “Listing Rule”). The Listing Rule requires the Company to maintain a minimum of 300 public stockholders on a continuous basis. The Notice specifies that the Company has 45 days to submit a business plan that demonstrates how the Company expects to return to compliance with the Listing Rule within 18 months of receipt of the Notice. The business plan will be reviewed by a Committee of the NYSE. The Committee will either accept the plan, at which time the Company will be subject to quarterly monitoring for compliance with this business plan, or the Committee will not accept the business plan and the Company will be subject to suspension and delisting procedures. The Company submitted its Compliance Plan on February 28, 2024. Although the Company submitted a Compliance Plan on February 28, 2024, the Company cannot assure that its securities will continue to be listed on the NYSE in the future or prior to a Business Combination. Risks and Uncertainties The continuing military conflict between the Russian Federation and Ukraine, the military action between Hamas and Israel and the risk of escalations of other military conflicts have created and are expected to create global economic consequences. The specific impact on the Company’s financial condition, results of operations, and cash flows is not determinable as of the date of these consolidated financial statements. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2023 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying consolidated financial statements of the Company are presented in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary. All intercompany transactions have been eliminated. Reclassification Certain prior period amounts have been reclassified to conform to the current period presentation. The reclassification had no impact on operating costs, net, net (loss) income, earnings per share, current or total assets or liabilities, or total equity. Emerging Growth Company The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended, as modified by the Jumpstart Our Business Startups Act of 2012, (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s consolidated financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates. Cash and Cash Equivalents The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company did not have any cash equivalents as of December 31, 2023 and 2022. Expense Reimbursement Receivable from GCT In association with the Company’s proposed Business Combination, GCT has agreed to pay (i) all SEC and other regulatory filing fees incurred in connection with the proposed Business Combination, (ii) such expenses incurred in connection with printing, mailing, and soliciting proxies with respect to the Registration Statement and Proxy Statement, (iii) such expenses incurred in connection with any filings with or approvals from the NYSE in connection with the proposed Business Combination, including any expenses and fees incurred by the Company to maintain the minimum NYSE listing requirements, (iv) such expenses relating to the filing fees and notification requirements under the HSR Act, and (v) the SPAC Extension Expenses. As of December 31, 2023 the Company has received $413,529 for the reimbursement of expenses and offset the reported expenses by $709,970 for amounts reimbursed or reimbursable by GCT. As of December 31, 2022, no amounts were received from GCT and no expenses were offset for any expense to be incurred by GCT related to the proposed Business Combination. As of December 31, 2023 and 2022, $296,441 and $0, respectively, is due from GCT and reported on the balance sheet as expense reimbursement receivable from GCT. Marketable Securities and Cash Held in Trust Account As of December 31, 2023 and 2022, investments held in Trust Account consisted of interest bearing demand deposits and mutual funds that invest primarily in U.S. government securities, respectively, and generally have a readily determinable fair value. Such cash and investments in mutual funds are presented on the consolidated balance sheets at fair value at the end of the reporting period. Interest, dividends, gains and losses resulting from the change in fair value of these securities are included in income from investments held in the Trust Account in the accompanying consolidated statements of operations. The estimated fair values of investments held in the Trust Account are determined using available market information. During the year ended December 31, 2022 the Trust Account held U.S. Treasury securities classified as held-to-maturity in accordance with ASC Topic 320, “Investments — Debt and Equity Securities.” Held-to-maturity securities are those securities which the Company has the ability and intent to hold until maturity. Held-to-maturity treasury securities are recorded at amortized cost on the accompanying balance sheet. A decline in the market value of held-to-maturity securities below cost that is deemed to be other than temporary, results in an impairment that reduces the carrying costs to such securities’ fair value. The impairment is charged to earnings and a new cost basis for the security is established. To determine whether an impairment is other than temporary, the Company considers whether it has the ability and intent to hold the investment until a market price recovery and considers whether evidence indicating the cost of the investment is recoverable outweighs evidence to the contrary. Evidence considered in this assessment includes the reasons for the impairment, the severity and the duration of the impairment, changes in value subsequent to year-end, forecasted performance of the investee, and the general market condition in the geographic area or industry the investee operates in. During the year ended December 31, 2022, premiums and discounts were amortized or accreted over the life of the related held-to-maturity security as an adjustment to yield using the effective-interest method. Such amortization and accretion is included in the “income from cash and investments held in Trust Account” line item in the consolidated statement of operations. Accretion of the discounts amounted to $320,030 for the year ended December 31, 2022. There were no such securities held with discounts or premiums during the year ended December 31, 2023, and as a result there was no accretion during such period. Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist of a cash account in a financial institution, which, at times, may exceed the Federal Depository Insurance Coverage of $250,000. At December 31, 2023 and 2022, the Company has not experienced losses on this account. Offering Costs The Company complies with the requirements of ASC 340-10-S99-1 and SAB Topic 5A-“Expenses of Offering”. Offering costs consist of legal, accounting, underwriting discount and other costs that are directly related to the IPO. Accordingly, offering costs were initially charged to stockholders’ equity (consisting of underwriting discount, deferred underwriters’ commission, and other offering costs offset by offering costs attributable to the warrant liability and recorded in the statement of operations). The Company adopted the residual method to allocate the gross proceeds between Class A common stock and warrants based on their relative fair values. Deferred Underwriters’ Commission The Company complies with ASC Topic 405 “Liabilities” and derecognized the deferred underwriting commission liability upon being released of the obligation by the underwriters. Upon the IPO, the Company treated the deferred underwriter’s commission as an offering cost (as discussed above). To account for the waiver of the deferred underwriting commission, the Company reduced the deferred underwriter commission liability and reversed the previously recorded cost of issuing the instruments in the IPO, which included recognizing a contra-expense in the amount previously allocated to liability classified warrants and expensed upon the IPO, and reduced the accumulated deficit and increased income available to Class B common stock, which was previously allocated to the Class A common stock subject to redemption and accretion recognized at the IPO date. Common Stock Subject to Possible Redemption The Company accounts for its shares of Class A common stock subject to possible redemption in accordance with the guidance in ASC Topic 480. Shares of Class A common stock subject to mandatory redemption (if any) are classified as a liability instrument and is measured at fair value. Conditionally redeemable shares of Class A common stock (including shares that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) are classified as temporary equity. At all other times, shares of Class A common stock are classified as stockholders’ equity. The Company’s shares of Class A common stock feature certain redemption rights that are considered to be outside of the Company’s control and subject to the occurrence of uncertain future events. Accordingly, all shares of Class A common stock subject to possible redemption are presented at redemption value as temporary equity, outside of the stockholders’ deficit section of the Company’s balance sheet. The shares of Class A common stock sold as part of the Units in the IPO contain a redemption feature which allows for the redemption of such public shares in connection with the Company’s liquidation, if there is a shareholder vote or tender offer in connection with a Business Combination and in connection with certain amendments to the Company’s amended and restated certificate of incorporation. In accordance with the accounting treatment for redeemable equity instruments, which has been codified in ASC 480-10-S99, redemption provisions not solely within the control of the Company require Class A common stock subject to redemption to be classified outside of permanent equity. Therefore, all shares of Class A common stock have been classified outside of permanent equity. In connection with the votes to approve the Charter Amendment at the special meeting of stockholders on May 4, 2023, the holders of 30,460,066 shares of Class A common stock of the Company properly exercised their right to redeem their shares for cash at a redemption price of approximately $10.42 per share, for an aggregate redemption amount of approximately $317,000,000. In connection with the votes to approve the Second Charter Amendment at the special meeting of stockholders on November 7, 2023, the holders of an additional 98,573 shares of Class A common stock of the Company properly exercised their right to redeem their shares for cash at a redemption price of approximately $10.70 per share, for an aggregate redemption amount of approximately $1,100,000. The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable common stock to equal the redemption value at the end of each reporting period. Increases or decreases in the carrying amount of redeemable common stock are affected by charges against additional paid-in capital (to the extent available) and accumulated deficit. For the year ended December 31, 2023 and 2022, the changes in Class A common stock subject to possible redemption are as follows: Class A common stock subject to possible redemption Shares Amount January 1, 2022 34,500,000 $ 351,900,000 Plus: Increase in redemption value of shares subject to possible redemption — 3,743,935 December 31, 2022 34,500,000 $ 355,643,935 January 1, 2023 34,500,000 $ 355,643,935 Plus: Increase in redemption value of shares subject to possible redemption — 5,209,575 Less: Redemption (30,558,639) (318,441,770) December 31, 2023 3,941,361 $ 42,411,740 Fair Value of Financial Instruments The fair value of the Company’s assets and liabilities, which qualify as financial instruments under the FASB ASC 820, “Fair Value Measurement” approximates the carrying amounts represented in the balance sheets, primarily due to their short-term nature. Fair Value Measurements Fair value is defined as the price that would be received for sale of an asset or paid for transfer of a liability, in an orderly transaction between market participants at the measurement date. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include: ● Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets; ● Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and ● Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. In some circumstances, the inputs used to measure fair value might be categorized within different levels of the fair value hierarchy. In those instances, the fair value measurement is categorized in its entirety in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement. Derivative Financial Instruments The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with ASC Topic 815, “Derivatives and Hedging”. Derivative instruments are initially recorded at fair value on the grant date and re-valued at each reporting date, with changes in the fair value reported in the statement of operations. Derivative assets and liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date. Warrant Liability The Company accounts for the 26,650,000 warrants issued in connection with the Initial Public Offering (the 17,250,000 Public Warrants and the 9,400,000 Private Placement Warrants) in accordance with the guidance contained in ASC Topic 815-40 “Contracts in Entity’s Own Equity”. Such guidance provides that because the warrants do not meet the criteria for equity classification thereunder, each warrant must be classified as a liability. Accordingly, the Company classifies each warrant as a liability at its fair value. This liability is subject to re-measurement at each balance sheet date. With each such re-measurement, the warrant liability will be adjusted to fair value, with the change in fair value recognized in the Company’s consolidated statement of operations. Sponsor Loans The Company has elected to account for the $6,900,000 (original principal amount) in Sponsor Loans using the fair value option in accordance with the guidance contained in ASC 825-10-25. The fair value option provides an option to elect fair value as an alternative measurement for selected financial assets, financial liabilities, unrecognized firm commitments, and written loan commitments. The Company has elected to apply the fair value option to the Sponsor Loans to simplify the accounting model applied to that class of financial instruments. See Notes 3 and 6 for additional information. Stock-Based Compensation The sale or transfers of the Founder Shares to members of the Company’s board of directors, as described in Note 5, is within the scope of FASB ASC Topic 718, “Compensation-Stock Compensation” (“ASC 718”). Under ASC 718, stock-based compensation associated with equity classified awards is measured at fair value upon the grant date. The Founder Shares were effectively sold or transferred subject to a performance condition (i.e., the occurrence of a Business Combination). Compensation expense related to the Founder Shares is recognized only when the performance condition is probable of occurrence under the applicable accounting literature in this circumstance. A business combination is not probable until it is completed. Stock-based compensation would be recognized at the date a Business Combination is considered probable in an amount equal to the number of Founder Shares times the grant date fair value per share (unless subsequently modified) less the amount initially received for the purchase of the Founder Shares. As of December 31, 2023 and for all prior periods, the Company determined that a Business Combination is not considered probable until a business combination is completed, and therefore, no stock-based compensation expense has been recognized. Income Taxes The Company accounts for income taxes under ASC 740 Income Taxes (“ASC 740”). ASC 740 requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statement and tax basis of assets and liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carry forwards. ASC 740 additionally requires a valuation allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not be realized. The effective tax rate differs from the statutory tax rate of 21% for the year ended December 31, 2023 and 2022, primarily due to changes in fair value of the warrant liability and Sponsor Loans, which are not currently recognized in taxable income, non-deductible start-up costs, offering costs attributable to the warrants, and the valuation allowance on the deferred tax assets. ASC 740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim period, disclosure and transition. The Company recognizes accrued interest and penalties related to unrecognized tax benefits. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of December 31, 2023, and 2022. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company has identified the United States as its only “major” tax jurisdiction. The Company is subject to income tax examinations by major taxing authorities since inception. These examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions and compliance with federal and state tax laws. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months. On August 16, 2022, the Inflation Reduction Act of 2022 (the “IRA”) was signed into federal law. The IRA provides for, among other things, a new U.S. federal 1% excise tax on certain repurchases (including redemptions) of stock by publicly traded U.S. corporations and certain U.S. subsidiaries of publicly traded non-U.S. corporations (each, a “covered corporation”). Because the Company is a Delaware corporation and its securities are trading on the NYSE, the Company is a “covered corporation” for this purpose. The excise tax is imposed on the repurchasing corporation itself, not its stockholders from which shares are repurchased. The amount of the excise tax is generally 1% of the fair market value of the shares repurchased at the time of the repurchase. However, for purposes of calculating the excise tax, repurchasing corporations are permitted to net the fair market value of certain new stock issuances against the fair market value of stock repurchases during the same taxable year. In addition, certain exceptions apply to the excise tax. The U.S. Department of Treasury has been given authority to provide regulations and other guidance to carry out, and prevent the abuse or avoidance of the excise tax. The IRA applies only to repurchases that occur after December 31, 2022. Any redemption or other repurchase that occurs in connection with a Business Combination may be subject to the excise tax. Whether and to what extent we would be subject to the excise tax would depend on a number of factors, including (i) the fair market value of the redemptions and repurchases in connection with a Business Combination, (ii) the timing, nature and amount of the equity issued in connection with a Business Combination (or otherwise issued not in connection with a Business Combination but issued within the same taxable year of a Business Combination), and (iii) the content of regulations and other guidance from the U.S. Department of the Treasury. In addition, because the excise tax would be payable by the Company, and not by the redeeming holder, the mechanics of any required payment of the excise tax have not been determined. The foregoing could cause a reduction in the cash available on hand to complete a Business Combination. For the year ended December 31, 2023 and 2022, the Company has recognized $3,184,272 and $0, respectively, in excise tax payable related to share redemptions. In accordance with ASC 340-10-S99-1, the liability does not impact the consolidated statements of operations and is offset against additional paid-in capital or accumulated deficit if additional paid-in capital is not available. Net (Loss) Income Per Common Share The Company has two classes of shares, which are referred to as redeemable Class A common stock and non-redeemable Class A and Class B common stock. Earnings and losses are shared pro rata between the two classes of stock. For purposes of computing diluted earnings per share, the weighted-average shares outstanding of common stock reflects the dilutive effect that could occur if convertible securities or other contracts to issue common stock were converted into or exercised for common stock as of the beginning of the period in which the conditions were satisfied (or as of the date of the contingent stock agreement, if later). The calculation of diluted net (loss) income per share does not consider the effect of the warrants issued in connection with the (i) IPO, (ii) exercise of over-allotment (iii) Private Placement and (iv) Sponsor Loans since the warrants are contingently convertible. The warrants (including warrants issuable in conjunction with the Sponsor Loans) are exercisable to purchase 33,550,000 shares of Class A common stock in the aggregate. At December 31, 2023 and 2022, the Company did not have any other dilutive securities and other contracts that could, potentially, be exercised or converted into common stock and then share in the earnings of the Company. When applying the two-class method for determining net income per share, the Company has elected to exclude remeasurement associated with the redeemable shares of Class A common stock to redemption value as the redemption amount is not in excess of fair value. Net (loss) income per common share is as follows: Year Ended December 31, 2023 2022 Non- Non- Redeemable Redeemable Redeemable Class A and Redeemable Class A and Class A Class B Class A Class B Basic and diluted net (loss) income per share Numerator: Allocation of net (loss) income $ (1,247,339) $ (748,415) $ 19,405,027 $ 4,851,257 Denominator: Weighted-average shares outstanding 14,374,778 8,625,000 34,500,000 8,625,000 Basic and diluted net (loss) income per share $ (0.09) $ (0.09) $ 0.56 $ 0.56 Non-Redemption Agreements In April 2023, the Sponsor and certain investors (“NRA Investors”) of the Company’s Class A common stock entered into Non-Redemption Agreements. The Non-Redemption Agreements provide for the assignment of economic interest of an aggregate of 999,665 shares of Class B common stock of the Company held by the Sponsor to the Investors in exchange for such Investors agreeing to hold and not redeem their Class A common stock at the special meeting of stockholders held on May 4, 2023. Pursuant to the Non-Redemption Agreements, the Sponsor has agreed to transfer to such Investors an aggregate of 999,665 shares of Class B common stock upon the consummation of an initial Business Combination. In November 2023, the Sponsor and the holders of the founder shares converted an aggregate of 8,624,999 shares of Class B common stock to shares of Class A common stock. The Company estimated the aggregate fair value of the shares attributable to the April 2023 Non-Redemption Agreements to be $884,554 or $0.88 per share. In November 2023, the Company and the Sponsor entered into Non-Redemption Agreements with a number of the Company’s stockholders in exchange for them agreeing not to redeem shares of the Company’s Class A common stock sold in the IPO in connection with the special meeting of stockholders called by the Company and held on November 7, 2023. In exchange for the foregoing commitments not to redeem such shares, the Company has agreed to allocate to such investors an aggregate of 781,961 Promote Shares and the Sponsor has agreed to surrender and forfeit to the Company for no consideration a number of shares of Class B common stock equal to the number of Promote Shares upon closing of an initial business combination. The Company estimated the aggregate fair value of the shares attributable to the November 2023 Non-Redemption Agreements to be $6,096,756 or $7.80 per share. The Company complies with the requirements of SEC Staff Accounting Bulletin (“SAB”) Topic 5(A) – “Expenses of Offering” and SAB Topic 5(T): Miscellaneous Accounting - Accounting for Expenses or Liabilities Paid by Principal Stockholder(s). As such, the value of Promote Shares assigned to the Investors are recognized as offering costs and charged to stockholders’ deficit. The value of the Class B common stock to be forfeited by the Sponsors is reported as an increase to stockholders’ deficit. Recent Accounting Pronouncements In August 2020, the FASB issued Accounting Standards Update (“ASU”) No. 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging --Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”), which simplifies accounting for convertible instruments by removing major separation models required under current GAAP. The ASU also removes certain settlement conditions that are required for equity-linked contracts to qualify for the derivative scope exception, and it simplifies the diluted earnings per share calculation in certain areas. The provisions of ASU 2020-06 are applicable for fiscal years beginning after December 15, 2023, with early adoption permitted no earlier than fiscal years beginning after December 15, 2020. The Company does not believe adoption of ASU 2020-06 on January 1, 2024 will have a significant impact on its consolidated financial statements. The Company’s management does not believe that any other recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying consolidated financial statements. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2023 | |
RELATED PARTY TRANSACTIONS | |
RELATED PARTY TRANSACTIONS | NOTE 3. RELATED PARTY TRANSACTIONS Founder Shares On March 1, 2021, the Sponsor paid $25,000 in exchange for 7,187,500 shares of Class B common stock (the “Founder Shares”). On March 25, 2021, the Sponsor transferred an aggregate of 75,000 Founder Shares to three members of the board of directors (each received 25,000 Founder Shares). The number of Founder Shares outstanding was determined based on the expectation that the total size of the Initial Public Offering would be a maximum of 28,750,000 Units if the underwriters’ over-allotment option is exercised in full, and therefore that such Founder Shares would represent 20% of the outstanding shares after the Initial Public Offering. On November 4, 2021, the Company’s board of directors approved the issuance of 1,437,500 additional shares of Class B common stock in the form of a stock dividend, resulting in an aggregate of 8,625,000 Class B common shares outstanding. At November 8, 2021, the total number of Class B common shares outstanding have been adjusted to reflect the issuance of the additional shares. The number of Founder Shares outstanding was adjusted based on the Initial Public Offering of 34,500,000 Units such that the Founder Shares would represent 20% of the outstanding shares after the Initial Public Offering. The issuance of 1,437,500 additional shares of Class B common stock in the form of a stock dividend was retroactively reflected for all applicable prior periods. On November 16, 2023, the holders of the Company’s Class B common stock, par value $0.0001 per share, converted 8,624,999 shares of the Company’s Class B The Company’s initial stockholders, officers and directors have agreed not to transfer, assign or sell, except to permitted transferees, any Founder Shares or Converted Shares held by them until the earlier to occur of: (1) one year after the completion of the initial Business Combination; and (2) subsequent to the initial Business Combination, (x) the date on which the Company completes a liquidation, merger, stock exchange, reorganization 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 or (y) 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 dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the initial Business Combination. Any permitted transferees would be subject to the same restrictions and other agreements of the initial stockholders with respect to any Founder Shares or Converted Shares (the “Lock-up”). Promissory Note — Related Party On May 3, 2022, the Sponsor agreed to loan the Company up to $350,000 to be used to pay operating expenses. This loan is non-interest bearing, unsecured, is not convertible into warrants or any other securities, and due at the closing of a Business Combination. There was $35,000 and no balance outstanding as of December 31, 2023 and December 31, 2022, respectively. Sponsor Loans The Company executed promissory notes with the Sponsors, evidencing loans to the Company in the aggregate amount of $6,900,000. The Sponsor Loans were extended in order to ensure that the amount in the Trust Account is $10.20 per public share upon completion of the IPO with the proceeds of the Sponsor Loans being added to the Trust Account. The Sponsor Loans are non-interest bearing with the principal balance to be repaid or converted into warrants at a conversion price of $1.00 per warrant, at the Sponsors’ discretion. All accrued and unpaid principal of the Sponsor Loans that is not converted into warrants shall continue to remain outstanding and to be subject to the terms and conditions of the Sponsor Loans and will become payable on the date the initial Business Combination is completed. If converted, the Sponsor Loan Warrants would be identical to the Private Placement Warrants. If the Company does not complete an initial Business Combination, the Company will not repay the Sponsor Loans from amounts held in the Trust Account, and its proceeds will be distributed to the Company’s public stockholders. See Note 6 for additional information. On November 2, 2023, the Company, GCT and the Sponsor entered into a Sponsor Support Agreement. Pursuant to the Sponsor Support Agreement, the Sponsor agreed to forgive all amounts outstanding under the Sponsor Loans upon the closing of the proposed Business Combination which was determined to be a modification of the Sponsor Loan. The Company follows the guidance of ASC Topic 470-50 “Debt—Modifications and Extinguishments,” for loan modifications. The Company’s Sponsor continues to maintain an equity interest in the Company. The Company determined that after accounting for the modification of the Sponsor Loan, the cash flows of the Sponsor Loan were substantially different and as such should be accounted for as an extinguishment of the original debt and the recognition of new debt. As such, the Company recognized a gain on extinguishment of the Sponsor Loans in the Company’s consolidated changes in stockholders’ equity calculated as the difference between the fair value of the Sponsor Loan under the original Sponsor Loan Agreement and the fair value of the Sponsor Loan under the updated terms of the Sponsor Support Agreement on the date of the extinguishment. During the year ended December 31, 2023, the Company recognized a gain of $2,343,000 from the changes in the fair value of the Sponsor loans in the consolidated statements of operations before the extinguishment event, and $3,343,000 related to the extinguishment of the Sponsor Loans in its consolidated statement of stockholders’ deficit. Related Party Loans In order to finance transaction costs in connection with an intended initial Business Combination, the Sponsors, an affiliate of the Sponsors or certain of the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (the “Working Capital Loans”). If the Company completes an initial Business Combination, the Company would repay such loaned amounts out of the proceeds of the Trust Account released to the Company. Otherwise, such loans would be repaid only out of funds held outside the Trust Account. In the event that the initial Business Combination does not close, the Company may use a portion of the working capital held outside the Trust Account to repay such loaned amounts but no proceeds from the Trust Account would be used to repay such loaned amounts. Up to $1,500,000 of such loans may be convertible into Private Placement Warrants of the post Business Combination entity, at a price of $1.00 per warrant at the option of the lender. The warrants would be identical to the Private Placement Warrants issued to the Sponsors. As of December 31, 2023 and 2022, no such Working Capital Loans were outstanding. Administrative Service Fee The Company has agreed to pay an affiliate of its Sponsor a total of $20,000 per month for office space, utilities and secretarial and administrative support. Upon completion of the Company’s Business Combination or its liquidation, the Company will cease paying these monthly fees. Additionally, as described in Note 2, GCT has agreed to reimburse the Company for the administrative service fee incurred after the execution date of the Business Combination Agreement. The aggregate administrative service fee for the year ended December 31, 2023 was $240,000 . The Company has recognized an expense of $220,000 for the administrative service fee, net of $20,000 for the amount reimbursed by GCT for the year ended December 31, 2023. For the year ended December 31, 2022, the Company recognized $240,000 for the administrative service fee. For the administrative service fee, as of December 31, 2023 and 2022, the Company had $100,000 and $0 , respectively, reported on the consolidated balance sheet and included in due to related party. Due to Related Party In the normal course of business, certain expenses of the Company may be paid by, and then reimbursed to an affiliate of the Sponsor. As of December 31, 2023 and 2022, the Company had an outstanding balance due to the affiliate of the Sponsor of $100,920 and $10,024 , respectively, including the administrative service fee discussed above. The amount is included in due to related party on the consolidated balance sheets and includes but is not limited to legal expense, expense related to identifying a target business, and other expenses. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2023 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | NOTE 4. COMMITMENTS AND CONTINGENCIES Registration Rights The holders of the Founder Shares, Private Placement Warrants and warrants that may be issued upon conversion of Sponsor Loans or 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 Sponsor Loans or Working Capital Loans and upon conversion of the Founder Shares) will be entitled to registration rights pursuant to a registration rights agreement entered into on November 3, 2021, 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 registers such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the Company’s completion of the initial Business Combination and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. The Company will bear the expenses incurred in connection with the filing of any such registration statements. The registration rights agreement does not contain liquidating damages or other cash settlement provisions resulting from delays in registering the Company’s securities. Deferred Underwriters’ Commission The Company agreed to pay the underwriters a deferred underwriting fee upon the consummation of an initial Business Combination in an amount equal to 3.5% of the gross proceeds of the IPO, or $12,075,000. In December 2023, one of the underwriters waived any right to receive the deferred underwriters’ commission and will therefore receive no additional underwriting commissions in connection with the closing of a Business Combination. The Company considers the deferred underwriters’ commission an offering cost. Offering costs are charged to stockholders’ equity or the statement of operations based on the relative value of the Public Warrants to the proceeds received from the Units sold upon the completion of the IPO. Upon the waiver of these offering costs, a portion of these offering costs were recorded to the statement of operations and to stockholders’ equity. As a result of the waived deferred underwriters’ commission, the Company recognized $372,678 of income, $6,618,747 was recorded to accumulated deficit and the deferred underwriters’ commission was reduced by $6,991,425. Capital Markets Advisor Agreement On March 29, 2023, the Company engaged a capital markets advisor in connection with seeking an extension for completing a business combination, a possible acquisition of a third party by merger, consolidation, acquisition of stock or assets or other business combination, and as a placement agent in connection with a private placement of debt, equity, equity-linked or convertible securities. The Company agreed to pay the capital markets advisor a transaction fee in connection with the services provided, payable upon and subject to the Company’s consummation of an initial business combination (“Capital Markets Advisor Fee”). The fee consists of a fixed and determinable portion and a variable portion contingent upon certain future events expected to take place upon completion of a business combination. As of December 31, 2023, $2,500,000 was accrued under Accrued capital markets advisory expense on the consolidated balance sheet for the fee as the amount was earned and fixed and determinable. These costs may be paid for using the proceeds of the cash available once a business combination is complete. Expenses Contingent on the Closing of a Business Combination As of December 31, 2023 and 2022, the Company has incurred approximately $3,610,000 and $0, respectively, in fees contingent on the closing of a business combination, of which $2,500,000 and $0, respectively, is related to the Capital Markets Advisor Fee and $1,110,000 is related to legal fees payable contingent on a business combination. These costs may be paid using the proceeds of the cash available once a business combination is complete. The Capital Markets Advisor Fee amount is included in Accrued capital markets advisory expense and legal fees payable contingent on a business combination are included in Accrued legal expense on the consolidated balance sheets. Excise Tax In connection with the Special Meetings, stockholders holding 30,558,639 of the Company’s Public Stock exercised their right to redeem such shares for a pro rata portion of the funds in the Trust Account for an aggregate amount of $318,441,770. As such, the Company has recorded an excise tax liability of $3,184,272 on the consolidated balance sheet as of December 31, 2023. Any excise tax liability payable will not be paid out of the funds in the Trust Account. Business Combination Agreement On November 2, 2023, the Company entered into the Business Combination Agreement with GCT and Merger Sub. Pursuant to the Business Combination Agreement, the parties will consummate a business combination transaction pursuant to which Merger Sub will merge with and into GCT, with GCT surviving the merger as a wholly-owned subsidiary of the Company. See “Note 1 – Organization, Business Operations and Liquidity – Proposed Business Combination.” |
STOCKHOLDERS' DEFICIT
STOCKHOLDERS' DEFICIT | 12 Months Ended |
Dec. 31, 2023 | |
STOCKHOLDERS' DEFICIT | |
STOCKHOLDERS' DEFICIT | NOTE 5. STOCKHOLDERS’ DEFICIT Preferred Stock The Company is authorized to issue a total of 1,000,000 shares of preferred stock with a par value of $0.0001 per share. At December 31, 2023 and 2022, there were no shares of preferred shares issued or outstanding. Class A Common Stock The Company is authorized to issue a total of 200,000,000 shares of Class A common stock with a par value of $0.0001 per share. Holders of Class A common stock are entitled to one vote for each share. As of December 31, 2023 and 2022, there were 8,624,999 and 0 shares of Class A common stock issued outstanding Class B Common Stock The Company is authorized to issue a total of 20,000,000 shares of Class B common stock with a par value of $0.0001 per share. Holders of the Class B common stock are entitled to one vote for each share. As of December 31, 2023 and 2022, there were 1 and 8,625,000 shares, respectively, of Class B common stock issued outstanding The Company’s initial stockholders have agreed not to transfer, assign or sell, except to permitted transferees, any of their Founder Shares or Converted Shares until the earlier to occur of: (1) one year after the completion of the initial Business Combination; and (2) subsequent to the initial Business Combination, (x) the date on which the Company completes a liquidation, merger, stock exchange, reorganization 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 or (y) 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 dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the initial Business Combination. Any permitted transferees would be subject to the same restrictions and other agreements of the initial stockholders with respect to any Founder Shares or Converted Shares. The shares of Class B common stock will automatically convert into shares of Class A common stock at the time of the initial Business Combination on a one-for-one basis, subject to adjustment. In the case that additional shares of Class A common stock, or equity-linked securities, are issued or deemed issued in excess of the amounts offered in the Initial Public Offering and related to the closing of the initial Business Combination, the ratio at which shares of Class B common stock shall convert into shares of Class A common stock will be adjusted (unless the holders of a majority of the outstanding shares of Class B common stock agree to waive such anti-dilution adjustment with respect to any such issuance or deemed issuance) so that the number of shares of Class A common stock issuable upon conversion of all shares of Class B common stock will equal, in the aggregate, on an as-converted basis, 20% of the sum of the total number of all shares of common stock outstanding upon the completion of the Initial Public Offering (not including the Class A common stock issuable upon exercise of the Private Placement Warrants or any Sponsor Loan Warrants) plus all shares of Class A common stock and equity-linked securities issued or deemed issued in connection with the initial Business Combination (net of the number of shares of Class A common stock redeemed in connection with the initial Business Combination), excluding any shares or equity-linked securities issued, or to be issued, to any seller in the initial Business Combination. In no event shall the Class B Common Stock convert into Class A Common Stock at a ratio that is less than one-for-one. Warrants Each whole warrant entitles the holder to purchase one share of the Company’s Class A common stock at a price of $11.50 per share, subject to adjustment. The warrants will expire at 5:00 p.m., New York City time on the warrant expiration date, which is five years after the completion of the initial Business Combination or earlier upon redemption or liquidation. On the exercise of any warrant, the warrant exercise price will be paid directly to the Company and not placed in the Trust Account. The Company will not be obligated to deliver any shares of Class A common stock pursuant to the exercise of a warrant and will have no obligation to settle such warrant exercise unless a registration statement under the Securities Act covering the issuance of the shares of Class A common stock issuable upon exercise of the warrants is then effective and a current prospectus relating to those shares of Class A common stock is available, subject to the satisfying the Company’s obligations described below with respect to registration. No warrant will be exercisable for cash or on a cashless basis, and the Company will not be obligated to issue any shares to holders seeking to exercise their warrants, unless the issuance of the shares upon such exercise is registered or qualified under the securities laws of the state of the exercising holder, or an exemption from registration is available. In the event that the conditions in the two immediately preceding sentences are not satisfied with respect to a warrant, the holder of such warrant will not be entitled to exercise such warrant and such warrant may have no value and expire worthless. In no event will the Company be required to net cash settle any warrant. In the event that a registration statement is not effective for the exercised warrants, the purchaser of a unit containing such warrant will have paid the full purchase price for the unit solely for the share of Class A common stock underlying such Unit. The Company did not register the shares of Class A common stock issuable upon exercise of the warrants in connection with the IPO. However, the Company has agreed that as soon as practicable, but in no event later than 20 business days after the closing of the initial Business Combination, the Company will use its commercially reasonable efforts to file with the SEC, and within 60 Redemption of warrants when the price per share of Class A common stock equals or exceeds $18.00 . Once the warrants become exercisable, the Company may redeem the outstanding public warrants: · in whole and not in part; · at a price of $0.01 per warrant; · upon a minimum of 30 days’ prior written notice of redemption, or the 30-day redemption period, to each warrant holder; and · if, and only if, the last reported sale price of the Class A common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 Redemption of warrants when the price per share of Class A common stock equals or exceeds $10.00 . Once the warrants become exercisable, the Company may redeem the outstanding public warrants: · in whole and not in part; · at a price of $0.10 per warrant provided that holders will be able to exercise their warrants prior to redemption and receive that number of shares of Class A common stock based on the redemption date and the “fair market value” of the Class A common stock (as defined below) except as otherwise described below; · upon a minimum of 30 days’ prior written notice of redemption · if, and only if, the last reported sale price of the Class A common stock equals or exceeds $10.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) on the trading day prior to the date on which the Company sends the notice of redemption to the warrant holders; and · if, and only if, there is an effective registration statement covering the issuance of the shares of Class A common stock issuable upon exercise of the warrants and a current prospectus relating thereto available throughout the 30-day period after written notice of redemption is given. The “fair market value” of the Class A common stock shall mean the average last reported sale price of the Class A common stock for the 10 trading days ending on the third trading day prior to the date on which the notice of redemption is sent to the holders of warrants. This redemption feature differs from the typical warrant redemption features used in many other blank check offerings. In no event will the warrants be exercisable in connection with this redemption feature for more than 0.361 Class A common stock per warrant (subject to adjustment). On November 2, 2023, the Company, GCT and the Sponsor entered into the Sponsor Support Agreement. Pursuant to the Sponsor Support Agreement, the Sponsor agreed to forfeit an aggregate amount of up to 2,820,000 Private Placement Warrants concurrently with the closing of the proposed Business Combination. The Company’s Private Placement Warrants are equity contracts classified as a liability. The Company follows the guidance in accordance with ASC 815-40 with this modification to the Private Placement Warrants. With the effect of the changed terms, the Company recognized a gain of $169,200 in the Company’s consolidated statement of operations. |
FAIR VALUE MEASUREMENT
FAIR VALUE MEASUREMENT | 12 Months Ended |
Dec. 31, 2023 | |
FAIR VALUE MEASUREMENT | |
FAIR VALUE MEASUREMENT | NOTE 6. FAIR VALUE MEASUREMENT The following table presents fair value information as of December 31, 2023 and 2022, for the Company’s assets and liabilities that are accounted for at fair value on a recurring basis and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value. December 31, December 31, Assets: Level 2023 2022 Marketable securities held in Trust Account 1 $ — $ 356,190,233 December 31, December 31, Liabilities: Level 2023 2022 Warrant Liability – Public Warrants (a) $ 1,725,000 $ 1,173,000 Warrant Liability – Private Placement Warrants (b) 3 $ 658,000 $ 639,200 Sponsor Loans 3 $ — $ 1,000,000 (a) Level 1 at December 31, 2023 and Level 2 at December 31, 2022 (b) At December 31, 2023, 2,820,000 Private Placement Warrants subject to forfeiture have no value as there is an assumed 100% probability of forfeiture due to the proposed Business Combination. As of December 31, 2023, cash held in the Trust Account was held in an interest-bearing demand deposit account and at December 31, 2022, investments held in Trust Account consisted of mutual funds that invest primarily in US government securities. Demand deposit accounts and mutual funds generally have a readily determinable fair value. Such investments in the Trust Account are presented on the consolidated balance sheets at fair value at the end the reporting period. The Company’s warrant liability for the Public Warrants is based on unadjusted quoted prices at the close of market. At December 31, 2022, there was insufficient trading volume for the Company’s Public Warrants to be classified as Level 1 and, as a result, were classified as Level 2. At December 31, 2023, the Company determined there was sufficient trading activity to classify its Public Warrants as Level 1. The fair value of the Company’s Private Placement Warrants (not subject to forfeiture) for all periods presented is based on a Black-Scholes-Merton model utilizing management judgment and pricing inputs from observable and unobservable markets with less volume and transaction frequency than active markets. In association with the Company’s Sponsor Support Agreement with GCT, the Sponsor agreed to forfeit up to 2,820,000 Private Placement Warrants upon the consummation of the Business Combination. For those Private Placement Warrants that became subject to forfeiture, the Company used a probability-weighted scenario analysis to value the Private Placement Warrants (subject to forfeiture) as of December 31, 2023. The change in valuation models between December 31, 2023 and December 31, 2022 was implemented as the probability-weighted scenario analysis better represents the fair value of the Private Placement Warrants that became subject to forfeiture during the year ended December 31, 2023. In association with the Company’s Sponsor Support Agreement with GCT, the Sponsor agreed to forgive all amounts outstanding under the Sponsor Loan upon the closing of the proposed Business Combination. The Company valued the Sponsor Loans using a bond plus call approach as of December 31, 2022. The bond plus call approach calculates the fair value of the Notes as the sum of (i) the fair value of the contractual cash flows of the Sponsor Loans absent the Conversion Option and (ii) the fair value of the Conversion Option which is determined using a risk-neutral framework based on the daily binomial lattice analysis. Upon forgiveness of the outstanding balance under the Sponsor Loans, the Company used a probability-weighted scenario analysis as of December 31, 2023. The change in valuation models between December 31, 2023 and December 31, 2022 was implemented as the probability-weighted scenario analysis better represents the fair value of the Sponsor Loans that were modified during the year ended December 31, 2023. The inputs used to measure fair value of the Private Placement Warrants and the Sponsor Loans are classified within Level 3 of the fair value hierarchy. Significant deviations from these estimates and inputs could result in a material change in fair value. The following table sets forth the fair value and unpaid principal balance as of December 31, 2023 and 2022 for the Sponsor Loans. Liabilities: Fair Value Unpaid Principal Balance December 31, 2023 $ — $ 6,900,000 December 31, 2022 $ 1,000,000 $ 6,900,000 The key inputs into the model for the Private Placement Warrants were as follows: December 31, December 31, Input 2023 2022 Common stock price $ 10.56 $ 10.19 Risk-free interest rate 3.81 % 3.95 % Expected term in years 5.25 years 5.36 years Expected volatility 0.00 % 0.00 % Exercise price $ 11.50 $ 11.50 Warrant fair value $ 0.10 $ 0.07 To the extent that the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Because of the inherent uncertainty of valuation, those estimated values may be materially higher or lower than the values that would have been used had a ready market for the investments existed. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for investments categorized in Level 3. The following table provides a reconciliation of changes in fair value of the beginning and ending balances for our financial instruments classified as Level 3: Fair value of financial instruments classified as Level 3 Public and Private Placement Warrants Sponsor Loans January 1, 2022 $ 18,655,000 $ 5,490,000 Public Warrants reclassified to level 1 (6,727,500) Change in valuation inputs or other assumptions (11,288,300) (4,490,000) December 31, 2022 $ 639,200 1,000,000 January 1, 2023 $ 639,200 $ 1,000,000 Change in fair value of warrants subject to forfeiture (191,760) — Change in valuation inputs or other assumptions 210,560 2,343,000 Extinguishment of debt — (3,343,000) December 31, 2023 $ 658,000 $ — |
INCOME TAX
INCOME TAX | 12 Months Ended |
Dec. 31, 2023 | |
INCOME TAX | |
INCOME TAX | NOTE 7. INCOME TAX As of December 31, 2023 and 2022, the Company’s net deferred tax assets are as follows: Deferred tax asset: 2023 2022 Organizational costs/startup expenses $ 1,223,864 $ 243,656 Federal net operating loss carryforward — — Total deferred tax asset 1,223,864 243,656 Valuation allowance (1,223,864) (243,656) Deferred tax asset, net of allowance $ — $ — The income tax provision consists of the following: For the year For the year December 31, 2023 December 31, 2022 Federal: Current $ 1,385,741 $ 995,207 Deferred 980,208 172,282 State: Current — — Deferred — — Valuation allowance (980,208) (172,282) Income tax provision $ 1,385,741 $ 995,207 As of December 31, 2023 and 2022, the Company had no U.S. federal net operating loss carryovers and no state net operating loss carryovers available to offset future taxable income. In assessing the realization of the deferred tax assets, management considers whether it is more likely than not that some portion of all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences representing net future deductible amounts become deductible. Management considers the scheduled reversal of deferred tax liabilities, if any, projected future taxable income and tax planning strategies in making this assessment. After consideration of all of the information available, management believes that significant uncertainty exists with respect to future realization of the deferred tax assets and has therefore established a full valuation allowance. For the years ended December 31, 2023 and 2022, there was an increase in the valuation allowance of $980,208 and $172,282, respectively. A reconciliation of the federal income tax rate to the Company’s effective tax rate, as a percentage of income before income taxes, is as follows: For the year For the year December 31, 2023 December 31, 2022 Statutory federal income tax rate 21.0 % 21.0 % Transaction costs 0.0 % 0.0 % Change in fair value of warrant liability and Sponsor Loans (100.3) % (17.7) % Transaction costs allocated to warrants 12.8 % 0.0 % Change in valuation allowance (160.7) % 0.7 % Income tax provision (227.2) % 4.0 % |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2023 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | NOTE 8. SUBSEQUENT EVENTS The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the consolidated financial statements were issued. Based upon this review, other than stated below, the Company did not identify any subsequent events that would have required adjustment or disclosure in the consolidated financial statements. On February 27, 2024, the Company held a special meeting in lieu of the 2024 annual meeting of stockholders in connection with the proposed Business Combination. At the Special Meeting, the Company’s stockholders approved the Business Combination Proposal, the Charter Amendment Proposal, each of the Governance Proposals (on a non-binding advisory basis), the election of each director nominee pursuant to the Election of Directors Proposal, the Incentive Award Plan Proposal, the Employee Stock Purchase Plan Proposal, and the NYSE Proposal, in each case as defined and described in greater detail in the Final Prospectus. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements of the Company are presented in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary. All intercompany transactions have been eliminated. |
Reclassification | Reclassification Certain prior period amounts have been reclassified to conform to the current period presentation. The reclassification had no impact on operating costs, net, net (loss) income, earnings per share, current or total assets or liabilities, or total equity. |
Emerging Growth Company | Emerging Growth Company The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended, as modified by the Jumpstart Our Business Startups Act of 2012, (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s consolidated financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company did not have any cash equivalents as of December 31, 2023 and 2022. |
Expense Reimbursement Receivable from GCT | Expense Reimbursement Receivable from GCT In association with the Company’s proposed Business Combination, GCT has agreed to pay (i) all SEC and other regulatory filing fees incurred in connection with the proposed Business Combination, (ii) such expenses incurred in connection with printing, mailing, and soliciting proxies with respect to the Registration Statement and Proxy Statement, (iii) such expenses incurred in connection with any filings with or approvals from the NYSE in connection with the proposed Business Combination, including any expenses and fees incurred by the Company to maintain the minimum NYSE listing requirements, (iv) such expenses relating to the filing fees and notification requirements under the HSR Act, and (v) the SPAC Extension Expenses. As of December 31, 2023 the Company has received $413,529 for the reimbursement of expenses and offset the reported expenses by $709,970 for amounts reimbursed or reimbursable by GCT. As of December 31, 2022, no amounts were received from GCT and no expenses were offset for any expense to be incurred by GCT related to the proposed Business Combination. As of December 31, 2023 and 2022, $296,441 and $0, respectively, is due from GCT and reported on the balance sheet as expense reimbursement receivable from GCT. |
Marketable Securities and Cash Held in Trust Account | Marketable Securities and Cash Held in Trust Account As of December 31, 2023 and 2022, investments held in Trust Account consisted of interest bearing demand deposits and mutual funds that invest primarily in U.S. government securities, respectively, and generally have a readily determinable fair value. Such cash and investments in mutual funds are presented on the consolidated balance sheets at fair value at the end of the reporting period. Interest, dividends, gains and losses resulting from the change in fair value of these securities are included in income from investments held in the Trust Account in the accompanying consolidated statements of operations. The estimated fair values of investments held in the Trust Account are determined using available market information. During the year ended December 31, 2022 the Trust Account held U.S. Treasury securities classified as held-to-maturity in accordance with ASC Topic 320, “Investments — Debt and Equity Securities.” Held-to-maturity securities are those securities which the Company has the ability and intent to hold until maturity. Held-to-maturity treasury securities are recorded at amortized cost on the accompanying balance sheet. A decline in the market value of held-to-maturity securities below cost that is deemed to be other than temporary, results in an impairment that reduces the carrying costs to such securities’ fair value. The impairment is charged to earnings and a new cost basis for the security is established. To determine whether an impairment is other than temporary, the Company considers whether it has the ability and intent to hold the investment until a market price recovery and considers whether evidence indicating the cost of the investment is recoverable outweighs evidence to the contrary. Evidence considered in this assessment includes the reasons for the impairment, the severity and the duration of the impairment, changes in value subsequent to year-end, forecasted performance of the investee, and the general market condition in the geographic area or industry the investee operates in. During the year ended December 31, 2022, premiums and discounts were amortized or accreted over the life of the related held-to-maturity security as an adjustment to yield using the effective-interest method. Such amortization and accretion is included in the “income from cash and investments held in Trust Account” line item in the consolidated statement of operations. Accretion of the discounts amounted to $320,030 for the year ended December 31, 2022. There were no such securities held with discounts or premiums during the year ended December 31, 2023, and as a result there was no accretion during such period. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist of a cash account in a financial institution, which, at times, may exceed the Federal Depository Insurance Coverage of $250,000. At December 31, 2023 and 2022, the Company has not experienced losses on this account. |
Offering Costs | Offering Costs The Company complies with the requirements of ASC 340-10-S99-1 and SAB Topic 5A-“Expenses of Offering”. Offering costs consist of legal, accounting, underwriting discount and other costs that are directly related to the IPO. Accordingly, offering costs were initially charged to stockholders’ equity (consisting of underwriting discount, deferred underwriters’ commission, and other offering costs offset by offering costs attributable to the warrant liability and recorded in the statement of operations). The Company adopted the residual method to allocate the gross proceeds between Class A common stock and warrants based on their relative fair values. |
Deferred Underwriters' Commission | Deferred Underwriters’ Commission The Company complies with ASC Topic 405 “Liabilities” and derecognized the deferred underwriting commission liability upon being released of the obligation by the underwriters. Upon the IPO, the Company treated the deferred underwriter’s commission as an offering cost (as discussed above). To account for the waiver of the deferred underwriting commission, the Company reduced the deferred underwriter commission liability and reversed the previously recorded cost of issuing the instruments in the IPO, which included recognizing a contra-expense in the amount previously allocated to liability classified warrants and expensed upon the IPO, and reduced the accumulated deficit and increased income available to Class B common stock, which was previously allocated to the Class A common stock subject to redemption and accretion recognized at the IPO date. |
Common Stock Subject to Possible Redemption | Common Stock Subject to Possible Redemption The Company accounts for its shares of Class A common stock subject to possible redemption in accordance with the guidance in ASC Topic 480. Shares of Class A common stock subject to mandatory redemption (if any) are classified as a liability instrument and is measured at fair value. Conditionally redeemable shares of Class A common stock (including shares that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) are classified as temporary equity. At all other times, shares of Class A common stock are classified as stockholders’ equity. The Company’s shares of Class A common stock feature certain redemption rights that are considered to be outside of the Company’s control and subject to the occurrence of uncertain future events. Accordingly, all shares of Class A common stock subject to possible redemption are presented at redemption value as temporary equity, outside of the stockholders’ deficit section of the Company’s balance sheet. The shares of Class A common stock sold as part of the Units in the IPO contain a redemption feature which allows for the redemption of such public shares in connection with the Company’s liquidation, if there is a shareholder vote or tender offer in connection with a Business Combination and in connection with certain amendments to the Company’s amended and restated certificate of incorporation. In accordance with the accounting treatment for redeemable equity instruments, which has been codified in ASC 480-10-S99, redemption provisions not solely within the control of the Company require Class A common stock subject to redemption to be classified outside of permanent equity. Therefore, all shares of Class A common stock have been classified outside of permanent equity. In connection with the votes to approve the Charter Amendment at the special meeting of stockholders on May 4, 2023, the holders of 30,460,066 shares of Class A common stock of the Company properly exercised their right to redeem their shares for cash at a redemption price of approximately $10.42 per share, for an aggregate redemption amount of approximately $317,000,000. In connection with the votes to approve the Second Charter Amendment at the special meeting of stockholders on November 7, 2023, the holders of an additional 98,573 shares of Class A common stock of the Company properly exercised their right to redeem their shares for cash at a redemption price of approximately $10.70 per share, for an aggregate redemption amount of approximately $1,100,000. The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable common stock to equal the redemption value at the end of each reporting period. Increases or decreases in the carrying amount of redeemable common stock are affected by charges against additional paid-in capital (to the extent available) and accumulated deficit. For the year ended December 31, 2023 and 2022, the changes in Class A common stock subject to possible redemption are as follows: Class A common stock subject to possible redemption Shares Amount January 1, 2022 34,500,000 $ 351,900,000 Plus: Increase in redemption value of shares subject to possible redemption — 3,743,935 December 31, 2022 34,500,000 $ 355,643,935 January 1, 2023 34,500,000 $ 355,643,935 Plus: Increase in redemption value of shares subject to possible redemption — 5,209,575 Less: Redemption (30,558,639) (318,441,770) December 31, 2023 3,941,361 $ 42,411,740 |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The fair value of the Company’s assets and liabilities, which qualify as financial instruments under the FASB ASC 820, “Fair Value Measurement” approximates the carrying amounts represented in the balance sheets, primarily due to their short-term nature. |
Fair Value Measurements | Fair Value Measurements Fair value is defined as the price that would be received for sale of an asset or paid for transfer of a liability, in an orderly transaction between market participants at the measurement date. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include: ● Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets; ● Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and ● Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. In some circumstances, the inputs used to measure fair value might be categorized within different levels of the fair value hierarchy. In those instances, the fair value measurement is categorized in its entirety in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement. |
Derivative Financial Instruments | Derivative Financial Instruments The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with ASC Topic 815, “Derivatives and Hedging”. Derivative instruments are initially recorded at fair value on the grant date and re-valued at each reporting date, with changes in the fair value reported in the statement of operations. Derivative assets and liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date. |
Warrant Liability | Warrant Liability The Company accounts for the 26,650,000 warrants issued in connection with the Initial Public Offering (the 17,250,000 Public Warrants and the 9,400,000 Private Placement Warrants) in accordance with the guidance contained in ASC Topic 815-40 “Contracts in Entity’s Own Equity”. Such guidance provides that because the warrants do not meet the criteria for equity classification thereunder, each warrant must be classified as a liability. Accordingly, the Company classifies each warrant as a liability at its fair value. This liability is subject to re-measurement at each balance sheet date. With each such re-measurement, the warrant liability will be adjusted to fair value, with the change in fair value recognized in the Company’s consolidated statement of operations. |
Sponsor Loans | Sponsor Loans The Company has elected to account for the $6,900,000 (original principal amount) in Sponsor Loans using the fair value option in accordance with the guidance contained in ASC 825-10-25. The fair value option provides an option to elect fair value as an alternative measurement for selected financial assets, financial liabilities, unrecognized firm commitments, and written loan commitments. The Company has elected to apply the fair value option to the Sponsor Loans to simplify the accounting model applied to that class of financial instruments. See Notes 3 and 6 for additional information. |
Stock-Based Compensation | Stock-Based Compensation The sale or transfers of the Founder Shares to members of the Company’s board of directors, as described in Note 5, is within the scope of FASB ASC Topic 718, “Compensation-Stock Compensation” (“ASC 718”). Under ASC 718, stock-based compensation associated with equity classified awards is measured at fair value upon the grant date. The Founder Shares were effectively sold or transferred subject to a performance condition (i.e., the occurrence of a Business Combination). Compensation expense related to the Founder Shares is recognized only when the performance condition is probable of occurrence under the applicable accounting literature in this circumstance. A business combination is not probable until it is completed. Stock-based compensation would be recognized at the date a Business Combination is considered probable in an amount equal to the number of Founder Shares times the grant date fair value per share (unless subsequently modified) less the amount initially received for the purchase of the Founder Shares. As of December 31, 2023 and for all prior periods, the Company determined that a Business Combination is not considered probable until a business combination is completed, and therefore, no stock-based compensation expense has been recognized. |
Income Taxes | Income Taxes The Company accounts for income taxes under ASC 740 Income Taxes (“ASC 740”). ASC 740 requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statement and tax basis of assets and liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carry forwards. ASC 740 additionally requires a valuation allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not be realized. The effective tax rate differs from the statutory tax rate of 21% for the year ended December 31, 2023 and 2022, primarily due to changes in fair value of the warrant liability and Sponsor Loans, which are not currently recognized in taxable income, non-deductible start-up costs, offering costs attributable to the warrants, and the valuation allowance on the deferred tax assets. ASC 740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim period, disclosure and transition. The Company recognizes accrued interest and penalties related to unrecognized tax benefits. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of December 31, 2023, and 2022. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company has identified the United States as its only “major” tax jurisdiction. The Company is subject to income tax examinations by major taxing authorities since inception. These examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions and compliance with federal and state tax laws. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months. On August 16, 2022, the Inflation Reduction Act of 2022 (the “IRA”) was signed into federal law. The IRA provides for, among other things, a new U.S. federal 1% excise tax on certain repurchases (including redemptions) of stock by publicly traded U.S. corporations and certain U.S. subsidiaries of publicly traded non-U.S. corporations (each, a “covered corporation”). Because the Company is a Delaware corporation and its securities are trading on the NYSE, the Company is a “covered corporation” for this purpose. The excise tax is imposed on the repurchasing corporation itself, not its stockholders from which shares are repurchased. The amount of the excise tax is generally 1% of the fair market value of the shares repurchased at the time of the repurchase. However, for purposes of calculating the excise tax, repurchasing corporations are permitted to net the fair market value of certain new stock issuances against the fair market value of stock repurchases during the same taxable year. In addition, certain exceptions apply to the excise tax. The U.S. Department of Treasury has been given authority to provide regulations and other guidance to carry out, and prevent the abuse or avoidance of the excise tax. The IRA applies only to repurchases that occur after December 31, 2022. Any redemption or other repurchase that occurs in connection with a Business Combination may be subject to the excise tax. Whether and to what extent we would be subject to the excise tax would depend on a number of factors, including (i) the fair market value of the redemptions and repurchases in connection with a Business Combination, (ii) the timing, nature and amount of the equity issued in connection with a Business Combination (or otherwise issued not in connection with a Business Combination but issued within the same taxable year of a Business Combination), and (iii) the content of regulations and other guidance from the U.S. Department of the Treasury. In addition, because the excise tax would be payable by the Company, and not by the redeeming holder, the mechanics of any required payment of the excise tax have not been determined. The foregoing could cause a reduction in the cash available on hand to complete a Business Combination. For the year ended December 31, 2023 and 2022, the Company has recognized $3,184,272 and $0, respectively, in excise tax payable related to share redemptions. In accordance with ASC 340-10-S99-1, the liability does not impact the consolidated statements of operations and is offset against additional paid-in capital or accumulated deficit if additional paid-in capital is not available. |
Net (Loss) Income Per Common Share | Net (Loss) Income Per Common Share The Company has two classes of shares, which are referred to as redeemable Class A common stock and non-redeemable Class A and Class B common stock. Earnings and losses are shared pro rata between the two classes of stock. For purposes of computing diluted earnings per share, the weighted-average shares outstanding of common stock reflects the dilutive effect that could occur if convertible securities or other contracts to issue common stock were converted into or exercised for common stock as of the beginning of the period in which the conditions were satisfied (or as of the date of the contingent stock agreement, if later). The calculation of diluted net (loss) income per share does not consider the effect of the warrants issued in connection with the (i) IPO, (ii) exercise of over-allotment (iii) Private Placement and (iv) Sponsor Loans since the warrants are contingently convertible. The warrants (including warrants issuable in conjunction with the Sponsor Loans) are exercisable to purchase 33,550,000 shares of Class A common stock in the aggregate. At December 31, 2023 and 2022, the Company did not have any other dilutive securities and other contracts that could, potentially, be exercised or converted into common stock and then share in the earnings of the Company. When applying the two-class method for determining net income per share, the Company has elected to exclude remeasurement associated with the redeemable shares of Class A common stock to redemption value as the redemption amount is not in excess of fair value. Net (loss) income per common share is as follows: Year Ended December 31, 2023 2022 Non- Non- Redeemable Redeemable Redeemable Class A and Redeemable Class A and Class A Class B Class A Class B Basic and diluted net (loss) income per share Numerator: Allocation of net (loss) income $ (1,247,339) $ (748,415) $ 19,405,027 $ 4,851,257 Denominator: Weighted-average shares outstanding 14,374,778 8,625,000 34,500,000 8,625,000 Basic and diluted net (loss) income per share $ (0.09) $ (0.09) $ 0.56 $ 0.56 |
Non-Redemption Agreements | Non-Redemption Agreements In April 2023, the Sponsor and certain investors (“NRA Investors”) of the Company’s Class A common stock entered into Non-Redemption Agreements. The Non-Redemption Agreements provide for the assignment of economic interest of an aggregate of 999,665 shares of Class B common stock of the Company held by the Sponsor to the Investors in exchange for such Investors agreeing to hold and not redeem their Class A common stock at the special meeting of stockholders held on May 4, 2023. Pursuant to the Non-Redemption Agreements, the Sponsor has agreed to transfer to such Investors an aggregate of 999,665 shares of Class B common stock upon the consummation of an initial Business Combination. In November 2023, the Sponsor and the holders of the founder shares converted an aggregate of 8,624,999 shares of Class B common stock to shares of Class A common stock. The Company estimated the aggregate fair value of the shares attributable to the April 2023 Non-Redemption Agreements to be $884,554 or $0.88 per share. In November 2023, the Company and the Sponsor entered into Non-Redemption Agreements with a number of the Company’s stockholders in exchange for them agreeing not to redeem shares of the Company’s Class A common stock sold in the IPO in connection with the special meeting of stockholders called by the Company and held on November 7, 2023. In exchange for the foregoing commitments not to redeem such shares, the Company has agreed to allocate to such investors an aggregate of 781,961 Promote Shares and the Sponsor has agreed to surrender and forfeit to the Company for no consideration a number of shares of Class B common stock equal to the number of Promote Shares upon closing of an initial business combination. The Company estimated the aggregate fair value of the shares attributable to the November 2023 Non-Redemption Agreements to be $6,096,756 or $7.80 per share. The Company complies with the requirements of SEC Staff Accounting Bulletin (“SAB”) Topic 5(A) – “Expenses of Offering” and SAB Topic 5(T): Miscellaneous Accounting - Accounting for Expenses or Liabilities Paid by Principal Stockholder(s). As such, the value of Promote Shares assigned to the Investors are recognized as offering costs and charged to stockholders’ deficit. The value of the Class B common stock to be forfeited by the Sponsors is reported as an increase to stockholders’ deficit. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In August 2020, the FASB issued Accounting Standards Update (“ASU”) No. 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging --Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”), which simplifies accounting for convertible instruments by removing major separation models required under current GAAP. The ASU also removes certain settlement conditions that are required for equity-linked contracts to qualify for the derivative scope exception, and it simplifies the diluted earnings per share calculation in certain areas. The provisions of ASU 2020-06 are applicable for fiscal years beginning after December 15, 2023, with early adoption permitted no earlier than fiscal years beginning after December 15, 2020. The Company does not believe adoption of ASU 2020-06 on January 1, 2024 will have a significant impact on its consolidated financial statements. The Company’s management does not believe that any other recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying consolidated financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Schedule of changes in Class A common stock subject to possible redemption | For the year ended December 31, 2023 and 2022, the changes in Class A common stock subject to possible redemption are as follows: Class A common stock subject to possible redemption Shares Amount January 1, 2022 34,500,000 $ 351,900,000 Plus: Increase in redemption value of shares subject to possible redemption — 3,743,935 December 31, 2022 34,500,000 $ 355,643,935 January 1, 2023 34,500,000 $ 355,643,935 Plus: Increase in redemption value of shares subject to possible redemption — 5,209,575 Less: Redemption (30,558,639) (318,441,770) December 31, 2023 3,941,361 $ 42,411,740 |
Schedule of reconciliation of net (loss) income per common share | Year Ended December 31, 2023 2022 Non- Non- Redeemable Redeemable Redeemable Class A and Redeemable Class A and Class A Class B Class A Class B Basic and diluted net (loss) income per share Numerator: Allocation of net (loss) income $ (1,247,339) $ (748,415) $ 19,405,027 $ 4,851,257 Denominator: Weighted-average shares outstanding 14,374,778 8,625,000 34,500,000 8,625,000 Basic and diluted net (loss) income per share $ (0.09) $ (0.09) $ 0.56 $ 0.56 |
FAIR VALUE MEASUREMENT (Tables)
FAIR VALUE MEASUREMENT (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
FAIR VALUE MEASUREMENT | |
Schedule of assets measured on fair value on a recurring basis | December 31, December 31, Assets: Level 2023 2022 Marketable securities held in Trust Account 1 $ — $ 356,190,233 |
Schedule of liabilities measured on fair value on a recurring basis | December 31, December 31, Liabilities: Level 2023 2022 Warrant Liability – Public Warrants (a) $ 1,725,000 $ 1,173,000 Warrant Liability – Private Placement Warrants (b) 3 $ 658,000 $ 639,200 Sponsor Loans 3 $ — $ 1,000,000 (a) Level 1 at December 31, 2023 and Level 2 at December 31, 2022 (b) At December 31, 2023, 2,820,000 Private Placement Warrants subject to forfeiture have no value as there is an assumed 100% probability of forfeiture due to the proposed Business Combination. |
Schedule of fair value option | Liabilities: Fair Value Unpaid Principal Balance December 31, 2023 $ — $ 6,900,000 December 31, 2022 $ 1,000,000 $ 6,900,000 |
Schedule of quantitative information regarding Level 3 fair value measurements inputs | December 31, December 31, Input 2023 2022 Common stock price $ 10.56 $ 10.19 Risk-free interest rate 3.81 % 3.95 % Expected term in years 5.25 years 5.36 years Expected volatility 0.00 % 0.00 % Exercise price $ 11.50 $ 11.50 Warrant fair value $ 0.10 $ 0.07 |
Schedule of change in the fair value of the warrant liabilities | Fair value of financial instruments classified as Level 3 Public and Private Placement Warrants Sponsor Loans January 1, 2022 $ 18,655,000 $ 5,490,000 Public Warrants reclassified to level 1 (6,727,500) Change in valuation inputs or other assumptions (11,288,300) (4,490,000) December 31, 2022 $ 639,200 1,000,000 January 1, 2023 $ 639,200 $ 1,000,000 Change in fair value of warrants subject to forfeiture (191,760) — Change in valuation inputs or other assumptions 210,560 2,343,000 Extinguishment of debt — (3,343,000) December 31, 2023 $ 658,000 $ — |
INCOME TAX (Tables)
INCOME TAX (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
INCOME TAX | |
Schedule of net deferred tax assets | Deferred tax asset: 2023 2022 Organizational costs/startup expenses $ 1,223,864 $ 243,656 Federal net operating loss carryforward — — Total deferred tax asset 1,223,864 243,656 Valuation allowance (1,223,864) (243,656) Deferred tax asset, net of allowance $ — $ — |
Schedule of income tax provision | For the year For the year December 31, 2023 December 31, 2022 Federal: Current $ 1,385,741 $ 995,207 Deferred 980,208 172,282 State: Current — — Deferred — — Valuation allowance (980,208) (172,282) Income tax provision $ 1,385,741 $ 995,207 |
Schedule of federal income tax rate to effective tax rate | For the year For the year December 31, 2023 December 31, 2022 Statutory federal income tax rate 21.0 % 21.0 % Transaction costs 0.0 % 0.0 % Change in fair value of warrant liability and Sponsor Loans (100.3) % (17.7) % Transaction costs allocated to warrants 12.8 % 0.0 % Change in valuation allowance (160.7) % 0.7 % Income tax provision (227.2) % 4.0 % |
ORGANIZATION, BUSINESS OPERAT_2
ORGANIZATION, BUSINESS OPERATIONS AND LIQUIDITY (Details) | 1 Months Ended | 12 Months Ended | ||||||||
Jan. 19, 2024 item | Nov. 16, 2023 $ / shares shares | Nov. 07, 2023 USD ($) $ / shares shares | Nov. 02, 2023 USD ($) D $ / shares shares | May 04, 2023 USD ($) $ / shares shares | Nov. 08, 2021 USD ($) $ / shares shares | Apr. 30, 2023 $ / shares shares | Dec. 31, 2023 USD ($) D $ / shares shares | Dec. 31, 2022 USD ($) $ / shares shares | May 03, 2022 USD ($) | |
ORGANIZATION, BUSINESS OPERATIONS AND LIQUIDITY | ||||||||||
Condition for future business combination number of businesses minimum | 1 | |||||||||
Purchase price, per unit | $ / shares | $ 10 | $ 10.20 | ||||||||
Proceeds received from initial public offering, gross | $ 345,000,000 | |||||||||
Aggregate amount | $ 6,900,000 | |||||||||
Promissory note - related party | $ 35,000 | |||||||||
Conversion price | $ / shares | $ 1 | |||||||||
Condition for future business combination use of proceeds percentage | 80 | |||||||||
Condition for future business combination threshold percentage ownership | 50 | |||||||||
Obligation to redeem public shares if entity does not complete a business combination (as a percent) | 100% | |||||||||
Redemption of shares calculated based on business days prior to consummation of business combination (in days) | 2 days | |||||||||
Aggregate of shares | shares | 999,665 | |||||||||
Stockholders of number of shares who exercised their right to redeem shares | shares | 30,558,639 | |||||||||
Redemption price per share | $ / shares | $ 10.70 | $ 10.42 | ||||||||
Aggregate redemption amount | $ 1,100,000 | $ 317,000,000 | ||||||||
Trust Account | $ 42,200,000 | |||||||||
Common stock subject to possible redemption shares outstanding | shares | 3,941,361 | |||||||||
Deferred underwriters commission | $ 6,991,425 | |||||||||
Gross proceeds | $ 5,083,575 | $ 12,075,000 | ||||||||
Maximum threshold period for registration statement to become effective after business combination | 60 days | |||||||||
Percentage of gross proceeds on total equity proceeds | 60 | |||||||||
Redemption period upon closure | 10 days | |||||||||
Maximum allowed dissolution expenses | $ 100,000 | |||||||||
Cash | 16,371 | 521,149 | ||||||||
Payment for dissolution expenses | 100,000 | |||||||||
Marketable securities and cash held in Trust Account | $ 42,000,000 | 42,406,594 | 356,190,233 | |||||||
Net proceeds from ipo, private placement and sponsor loans | 351,900,000 | |||||||||
Cash withdrawn from trust account to pay taxes | $ 2,137,351 | 822,658 | ||||||||
Holders of number of shares who exercised their right to redeem shares | shares | 30,558,639 | |||||||||
Reimbursement of expenses | $ 413,529 | 0 | ||||||||
Offset reported expenses | 709,970 | 0 | ||||||||
Expense reimbursement receivable | 296,441 | 0 | ||||||||
Subsequent Events | ||||||||||
ORGANIZATION, BUSINESS OPERATIONS AND LIQUIDITY | ||||||||||
Minimum stockholders on a continuous basis | item | 300 | |||||||||
Volume weighted average price [Member] | ||||||||||
ORGANIZATION, BUSINESS OPERATIONS AND LIQUIDITY | ||||||||||
Aggregate of shares | shares | 20,000,000 | |||||||||
VWAP greater or equals to 12.50 | ||||||||||
ORGANIZATION, BUSINESS OPERATIONS AND LIQUIDITY | ||||||||||
Unvested shares upon completion of business combination | shares | 6,666,667 | |||||||||
Stock price trigger to transfer, assign or sell any shares or warrants of the company, after the completion of the initial business combination (in dollars per share) | $ / shares | $ 12.50 | |||||||||
Threshold trading days for transfer, assign or sale of shares or warrants, after the completion of the initial business combination | D | 20 | |||||||||
Threshold consecutive trading days for transfer, assign or sale of shares or warrants, after the completion of the initial business combination | D | 30 | |||||||||
VWAP greater or equals to 15.00 | ||||||||||
ORGANIZATION, BUSINESS OPERATIONS AND LIQUIDITY | ||||||||||
Unvested shares upon completion of business combination | shares | 6,666,666 | |||||||||
Stock price trigger to transfer, assign or sell any shares or warrants of the company, after the completion of the initial business combination (in dollars per share) | $ / shares | $ 15 | |||||||||
VWAP greater or equals to 17.50 | ||||||||||
ORGANIZATION, BUSINESS OPERATIONS AND LIQUIDITY | ||||||||||
Unvested shares upon completion of business combination | shares | 6,666,667 | |||||||||
Stock price trigger to transfer, assign or sell any shares or warrants of the company, after the completion of the initial business combination (in dollars per share) | $ / shares | $ 17.50 | |||||||||
Promissory Note with Related Party | ||||||||||
ORGANIZATION, BUSINESS OPERATIONS AND LIQUIDITY | ||||||||||
Aggregate amount | $ 350,000 | |||||||||
Promissory note - related party | $ 35,000 | $ 0 | ||||||||
Class B common stock | ||||||||||
ORGANIZATION, BUSINESS OPERATIONS AND LIQUIDITY | ||||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||
Stock price trigger to transfer, assign or sell any shares or warrants of the company, after the completion of the initial business combination (in dollars per share) | $ / shares | $ 12 | |||||||||
Threshold trading days for transfer, assign or sale of shares or warrants, after the completion of the initial business combination | D | 20 | |||||||||
Threshold consecutive trading days for transfer, assign or sale of shares or warrants, after the completion of the initial business combination | D | 30 | |||||||||
Conversion of Class B common stock to Class A common stock (in shares) | shares | 8,624,999 | |||||||||
Class A common stock | ||||||||||
ORGANIZATION, BUSINESS OPERATIONS AND LIQUIDITY | ||||||||||
Sale of private placement warrants (in shares) | shares | 33,550,000 | |||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||||
Stockholders of number of shares who exercised their right to redeem shares | shares | 98,573 | 30,460,066 | ||||||||
Issue price per share | $ / shares | $ 9.20 | |||||||||
Adjustment of exercise price of warrants based on market value and newly issued price (as a percent) | 115 | |||||||||
Conversion of Class B common stock to Class A common stock (in shares) | shares | 8,624,999 | |||||||||
Holders of number of shares who exercised their right to redeem shares | shares | 98,573 | 30,460,066 | ||||||||
Class A common stock subject to possible redemption | ||||||||||
ORGANIZATION, BUSINESS OPERATIONS AND LIQUIDITY | ||||||||||
Common stock subject to possible redemption shares outstanding | shares | 3,941,361 | 34,500,000 | ||||||||
Warrants | Class A common stock | ||||||||||
ORGANIZATION, BUSINESS OPERATIONS AND LIQUIDITY | ||||||||||
Purchase price, per unit | $ / shares | $ 11.50 | |||||||||
Public Warrants | ||||||||||
ORGANIZATION, BUSINESS OPERATIONS AND LIQUIDITY | ||||||||||
Stock price trigger for redemption of public warrants (in dollars per share) | $ / shares | $ 18 | |||||||||
Adjustment one of redemption price of stock based on market value and newly issued price (as a percent) | 180% | |||||||||
Sponsor Loan Warrants | ||||||||||
ORGANIZATION, BUSINESS OPERATIONS AND LIQUIDITY | ||||||||||
Number of shares to be issued at closing | shares | 1,399,107 | |||||||||
Initial Public Offering | ||||||||||
ORGANIZATION, BUSINESS OPERATIONS AND LIQUIDITY | ||||||||||
Number of units issued | shares | 34,500,000 | |||||||||
Purchase price, per unit | $ / shares | $ 10.76 | |||||||||
Gross proceeds | $ 5,083,575 | |||||||||
Private Placement | Class A common stock | ||||||||||
ORGANIZATION, BUSINESS OPERATIONS AND LIQUIDITY | ||||||||||
Shares agreed to sell | shares | 4,484,854 | |||||||||
Private Placement | Class A common stock | PIPE Subscription Agreement | ||||||||||
ORGANIZATION, BUSINESS OPERATIONS AND LIQUIDITY | ||||||||||
Purchase price per share | $ / shares | $ 6.67 | |||||||||
Aggregate purchase price | $ 29,900,000 | |||||||||
Aggregate number of shares agreed to allocate by Sponsor | shares | 781,961 | |||||||||
Private Placement | Private Placement Warrants | ||||||||||
ORGANIZATION, BUSINESS OPERATIONS AND LIQUIDITY | ||||||||||
Price of warrant | $ / shares | $ 1 | |||||||||
Proceeds from issuance of private placement warrants | $ 9,400,000 | |||||||||
Over-allotment option | ||||||||||
ORGANIZATION, BUSINESS OPERATIONS AND LIQUIDITY | ||||||||||
Number of units issued | shares | 4,500,000 | |||||||||
Sponsor Earnout Shares [Member] | ||||||||||
ORGANIZATION, BUSINESS OPERATIONS AND LIQUIDITY | ||||||||||
Proceeds from issuance of private placement warrants | $ 169,200 | |||||||||
Aggregate transaction consideration share price | $ / shares | $ 10 | |||||||||
Company value amount | $ 350,000,000 | |||||||||
Number of shares to be unvested and subject to forfeiture as of the closing to certain earn-out shares | shares | 1,920,375 | |||||||||
Number of shares to be private placement warrants issued at closing | shares | 2,820,000 | 2,820,000 | ||||||||
Sponsor | Sponsor Loan Warrants | ||||||||||
ORGANIZATION, BUSINESS OPERATIONS AND LIQUIDITY | ||||||||||
Aggregate amount | $ 6,900,000 | |||||||||
Conversion price | $ / shares | $ 1 | |||||||||
Sponsor | Initial Public Offering | ||||||||||
ORGANIZATION, BUSINESS OPERATIONS AND LIQUIDITY | ||||||||||
Aggregate amount | $ 6,900,000 | |||||||||
Sponsor | Private Placement | Private Placement Warrants | ||||||||||
ORGANIZATION, BUSINESS OPERATIONS AND LIQUIDITY | ||||||||||
Sale of private placement warrants (in shares) | shares | 8,260,606 | |||||||||
CA2 Co-Investment LLC | Private Placement | Private Placement Warrants | ||||||||||
ORGANIZATION, BUSINESS OPERATIONS AND LIQUIDITY | ||||||||||
Sale of private placement warrants (in shares) | shares | 1,139,394 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||||||
Nov. 16, 2023 | Nov. 07, 2023 | May 04, 2023 | Aug. 16, 2022 | Nov. 30, 2023 | Apr. 30, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||||||
Expense reimbursement receivable | $ 296,441 | $ 0 | ||||||
Accretion of the discounts | 0 | $ 320,030 | ||||||
Federal depository insurance coverage | $ 250,000 | |||||||
Holders of number of shares who exercised their right to redeem shares | 30,558,639 | |||||||
Redemption price per share | $ 10.70 | $ 10.42 | ||||||
Aggregate redemption amount | $ 1,100,000 | $ 317,000,000 | ||||||
Number of warrants issued | 26,650,000 | |||||||
Aggregate amount | $ 6,900,000 | |||||||
Stock-based compensation expense | $ 0 | |||||||
Statutory tax rate | 21% | 21% | ||||||
Unrecognized tax benefits | $ 0 | $ 0 | ||||||
Unrecognized tax benefits accrued for interest and penalties | 0 | |||||||
Inflation Reduction Act of 2022, federal excise tax rate | 1% | |||||||
Excise tax payable attributable to redemption of common stock | 3,184,272 | 0 | ||||||
Aggregate of shares | 999,665 | |||||||
Cash equivalents | 0 | 0 | ||||||
Reimbursement of expenses | 413,529 | 0 | ||||||
Offset reported expenses | 709,970 | $ 0 | ||||||
Initial Public Offering | Sponsor | ||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||||||
Aggregate amount | $ 6,900,000 | |||||||
Private Placement Warrants | ||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||||||
Number of warrants issued | 9,400,000 | |||||||
Public Warrants | ||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||||||
Number of warrants issued | 17,250,000 | |||||||
Class A common stock | ||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||||||
Holders of number of shares who exercised their right to redeem shares | 98,573 | 30,460,066 | ||||||
Conversion of Class B common stock to Class A common stock (in shares) | 8,624,999 | |||||||
Class B common stock | ||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||||||
Conversion of Class B common stock to Class A common stock (in shares) | 8,624,999 | |||||||
Class B common stock | Sponsor | Non Redemption Agreements | ||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||||||
Holders of number of shares who exercised their right to redeem shares | 999,665 | |||||||
Aggregate of shares | 999,665 | |||||||
Aggregate number of shares agreed to allocate by Sponsor | 781,961 | |||||||
Estimated aggregate fair value of the shares | $ 6,096,756 | $ 884,554 | ||||||
Estimated aggregate fair value of the shares (in dollars per share) | $ 7.80 | $ 0.88 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Common Stock Subject to Possible Redemption (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||
Increase in redemption value of shares subject to possible redemption | $ (5,209,575) | $ (3,743,935) | |
Class A common stock subject to possible redemption | |||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||
Class A common stock subject to possible redemption (Shares) | 3,941,361 | 34,500,000 | 34,500,000 |
Class A common stock subject to possible redemption | $ 42,411,740 | $ 355,643,935 | $ 351,900,000 |
Increase in redemption value of shares subject to possible redemption | $ (5,209,575) | $ (3,743,935) | |
Decrease due to share redemption (Shares) | (30,558,639) | ||
Decrease due to share redemption | $ (318,441,770) |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Net income (loss) per common share (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Class A common stock | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Number of warrants to purchase shares issued | 33,550,000 | |
Numerator: | ||
Allocation of net (loss) income | $ (1,247,339) | $ 19,405,027 |
Denominator: | ||
Weighted-average shares outstanding, basic | 14,374,778 | 34,500,000 |
Basic net (loss) income per share | $ (0.09) | $ 0.56 |
Class B common stock | ||
Numerator: | ||
Allocation of net (loss) income | $ (748,415) | $ 4,851,257 |
Denominator: | ||
Weighted-average shares outstanding, basic | 8,625,000 | 8,625,000 |
Weighted average shares outstanding, diluted | 8,625,000 | 8,625,000 |
Basic net (loss) income per share | $ (0.09) | $ 0.56 |
Diluted net (loss) income per share | $ (0.09) | $ 0.56 |
RELATED PARTY TRANSACTIONS - Fo
RELATED PARTY TRANSACTIONS - Founder Shares (Details) | 12 Months Ended | ||||||
Nov. 16, 2023 $ / shares shares | Nov. 04, 2021 shares | Mar. 01, 2021 USD ($) $ / shares shares | Dec. 31, 2023 $ / shares shares | Apr. 30, 2023 $ / shares | Dec. 31, 2022 $ / shares shares | Mar. 25, 2021 director shares | |
Class A common stock | |||||||
RELATED PARTY TRANSACTIONS | |||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||
Conversion of Class B common stock to Class A common stock (in shares) | 8,624,999 | ||||||
Class B common stock | |||||||
RELATED PARTY TRANSACTIONS | |||||||
Common stock, shares outstanding | 1 | 8,625,000 | |||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||
Conversion of Class B common stock to Class A common stock (in shares) | 8,624,999 | ||||||
Restrictions on transfer period of time after business combination completion | 1 year | ||||||
Stock price trigger to transfer, assign or sell any shares or warrants of the company, after the completion of the initial business combination (in dollars per share) | $ / shares | $ 12 | ||||||
Threshold period after the business combination in which the 20 trading days within any 30 trading day period commences | 150 days | ||||||
Founder Shares | Class A common stock | |||||||
RELATED PARTY TRANSACTIONS | |||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | ||||||
Conversion of Class B common stock to Class A common stock (in shares) | 8,624,999 | ||||||
Founder Shares | Class B common stock | |||||||
RELATED PARTY TRANSACTIONS | |||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | ||||||
Conversion of Class B common stock to Class A common stock (in shares) | 8,624,999 | ||||||
Founder Shares | Sponsor | |||||||
RELATED PARTY TRANSACTIONS | |||||||
Member of the board of directors | director | 3 | ||||||
Founder Shares | Sponsor | Class B common stock | |||||||
RELATED PARTY TRANSACTIONS | |||||||
Aggregate purchase price | $ | $ 25,000 | ||||||
Number of shares issued | 7,187,500 | ||||||
Number of shares transferred (in shares) | 75,000 | ||||||
Aggregate number of shares owned | 28,750,000 | 25,000 | |||||
Percentage of issued and outstanding shares after the Initial Public Offering collectively held by initial stockholders | 20% | ||||||
Share dividend | 1,437,500 | ||||||
Common stock, shares outstanding | 8,625,000 | ||||||
Number of units sold | 34,500,000 | ||||||
Percentage of outstanding shares | 20% | ||||||
Restrictions on transfer period of time after business combination completion | 1 year | ||||||
Stock price trigger to transfer, assign or sell any shares or warrants of the company, after the completion of the initial business combination (in dollars per share) | $ / shares | $ 12 | ||||||
Threshold Trading Days Transfer Assign Or Sell Any Shares Or Warrants After Completion Of Initial Business Combination | 20 days | ||||||
Threshold Consecutive Trading Days Transfer Assign Or Sell Any Shares Or Warrants After Completion Of Initial Business Combination | 30 days | ||||||
Threshold period after the business combination in which the 20 trading days within any 30 trading day period commences | 150 days |
RELATED PARTY TRANSACTIONS - Ad
RELATED PARTY TRANSACTIONS - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | May 03, 2022 | |
RELATED PARTY TRANSACTIONS | |||
Aggregate amount | $ 6,900,000 | ||
Promissory note - related party | $ 35,000 | ||
Extension of sponsor loans | $ 10.20 | ||
Conversion price | $ 1 | ||
Change in the fair value of sponsor loans | $ 2,913,800 | $ (21,332,800) | |
Extinguishment of debt | 3,343,000 | ||
Working Capital Loans | |||
RELATED PARTY TRANSACTIONS | |||
Outstanding balance of related party note | 0 | 0 | |
Sponsor | |||
RELATED PARTY TRANSACTIONS | |||
Change in the fair value of sponsor loans | 2,343,000 | ||
Outstanding balance of related party note | 100,920 | 10,024 | |
Promissory Note with Related Party | |||
RELATED PARTY TRANSACTIONS | |||
Aggregate amount | $ 350,000 | ||
Promissory note - related party | 35,000 | 0 | |
Administrative Service Fee | |||
RELATED PARTY TRANSACTIONS | |||
Expenses per month | 20,000 | ||
Aggregate administrative service fee | 240,000 | 240,000 | |
Administrative service fee | 220,000 | ||
Net amount reimbursed by GCT | 20,000 | ||
Related Party Loans | |||
RELATED PARTY TRANSACTIONS | |||
Loan conversion agreement warrant | 1,500,000 | ||
Outstanding balance of related party note | $ 100,000 | $ 0 | |
Related Party Loans | Working Capital Loans | |||
RELATED PARTY TRANSACTIONS | |||
Price of warrants | $ 1 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) | 12 Months Ended | ||
Nov. 08, 2021 | Dec. 31, 2023 | Dec. 31, 2022 | |
COMMITMENTS AND CONTINGENCIES | |||
Amount of underwriters commission recognized | $ 372,678 | ||
Accumulated deficit | 6,618,747 | ||
Underwriters commission was reduced | 6,991,425 | ||
Contingent fees | 3,610,000 | $ 0 | |
Accrued fees | $ 2,500,000 | ||
Stockholders of number of shares who exercised their right to redeem shares | 30,558,639 | ||
Aggregate amount in Trust Account | $ 318,441,770 | ||
Excise tax payable | 3,184,272 | ||
Capital Markets Advisor Fee | |||
COMMITMENTS AND CONTINGENCIES | |||
Contingent fees | 2,500,000 | $ 0 | |
Legal Fees | |||
COMMITMENTS AND CONTINGENCIES | |||
Contingent fees | $ 1,110,000 | ||
IPO | |||
COMMITMENTS AND CONTINGENCIES | |||
Deferred underwriting discount (in percentage) | 3.50% | ||
Deferred underwriting discount | $ 12,075,000 |
STOCKHOLDERS' DEFICIT - Preferr
STOCKHOLDERS' DEFICIT - Preferred Stock (Details) - $ / shares | Dec. 31, 2023 | Dec. 31, 2022 |
STOCKHOLDERS' DEFICIT | ||
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, par value, (per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
STOCKHOLDERS' DEFICIT - Common
STOCKHOLDERS' DEFICIT - Common Stock (Details) | 12 Months Ended | ||||
Dec. 31, 2023 D Vote $ / shares shares | Nov. 16, 2023 $ / shares | Nov. 07, 2023 shares | Apr. 30, 2023 $ / shares | Dec. 31, 2022 $ / shares shares | |
STOCKHOLDERS' DEFICIT | |||||
Class A common stock subject to possible redemption, outstanding (in shares) | 3,941,361 | ||||
Class A common stock | |||||
STOCKHOLDERS' DEFICIT | |||||
Common stock, shares authorized | 200,000,000 | 200,000,000 | |||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||
Common stock, votes per share | Vote | 1 | ||||
Class A common stock subject to possible redemption | |||||
STOCKHOLDERS' DEFICIT | |||||
Class A common stock subject to possible redemption, outstanding (in shares) | 3,941,361 | 34,500,000 | |||
Class A common stock not subject to possible redemption | |||||
STOCKHOLDERS' DEFICIT | |||||
Common stock, shares issued | 8,624,999 | 0 | |||
Common stock, shares outstanding | 8,624,999 | 0 | |||
Class B common stock | |||||
STOCKHOLDERS' DEFICIT | |||||
Common stock, shares authorized | 20,000,000 | 20,000,000 | |||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | |
Common stock, votes per share | Vote | 1 | ||||
Common stock, shares issued | 1 | 8,625,000 | |||
Common stock, shares outstanding | 1 | 8,625,000 | |||
Restrictions on transfer period of time after business combination completion | 1 year | ||||
Threshold trading days for transfer, assign or sale of shares or warrants, after the completion of the initial business combination | D | 20 | ||||
Threshold consecutive trading days for transfer, assign or sale of shares or warrants, after the completion of the initial business combination | D | 30 | ||||
Threshold period after the business combination in which the 20 trading days within any 30 trading day period commences | 150 days | ||||
Stock conversion ratio | 1 | ||||
Ratio to be applied to the stock in the conversion | 20% | ||||
common stock equals or exceeds | $ / shares | $ 12 | ||||
Conversion of stock, shares converted | 8,624,299 |
STOCKHOLDERS' DEFICIT - Warrant
STOCKHOLDERS' DEFICIT - Warrants (Details) | 12 Months Ended | ||
Nov. 02, 2023 USD ($) shares | Dec. 31, 2023 D $ / shares shares | Nov. 08, 2021 $ / shares | |
STOCKHOLDERS' DEFICIT | |||
Purchase price, per unit | $ 10.20 | $ 10 | |
Sponsor Earnout Shares | |||
STOCKHOLDERS' DEFICIT | |||
Number of shares to be private placement warrants issued at closing | shares | 2,820,000 | 2,820,000 | |
Gain on Warrants | $ | $ 169,200 | ||
Class A common stock | |||
STOCKHOLDERS' DEFICIT | |||
Number of shares issuable per warrant | shares | 1 | ||
Warrants | |||
STOCKHOLDERS' DEFICIT | |||
Threshold trading days for redemption of public warrants | 20 days | ||
Period of time within which registration statement is expected to become effective | 60 days | ||
Warrants | Class A common stock | |||
STOCKHOLDERS' DEFICIT | |||
Purchase price, per unit | $ 11.50 | ||
Warrants | Redemption of warrants when the price per share of Class A common stock equals or exceeds $18.00 | |||
STOCKHOLDERS' DEFICIT | |||
Threshold trading days for redemption of public warrants | 20 days | ||
Stock price trigger for redemption of public warrants | $ 18 | ||
Redemption price per public warrant (in dollars per share) | $ 0.01 | ||
Minimum threshold written notice period for redemption of public warrants | 30 days | ||
Redemption period | 30 days | ||
Threshold number of business days before sending notice of redemption to warrant holders | D | 30 | ||
Warrants | Redemption of warrants when the price per share of Class A common stock equals or exceeds $10.00 | |||
STOCKHOLDERS' DEFICIT | |||
Stock price trigger for redemption of public warrants | $ 10 | ||
Redemption price per public warrant (in dollars per share) | $ 0.10 | ||
Redemption period | 30 days | ||
Warrant redemption condition minimum share price | $ 10 | ||
Number of trading days on which fair market value of shares is reported | D | 30 | ||
Warrant exercise price adjustment multiple | 0.361 |
FAIR VALUE MEASUREMENT (Details
FAIR VALUE MEASUREMENT (Details) - USD ($) | 12 Months Ended | ||
Nov. 02, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | |
Liabilities: | |||
Warrant Liability | $ 2,383,000 | $ 1,812,200 | |
Sponsor Earnout Shares | |||
Liabilities: | |||
Number of shares to be private placement warrants issued at closing | 2,820,000 | 2,820,000 | |
Private Placement Warrants | |||
Liabilities: | |||
percentage of warrants subject to forfeiture | 100% | ||
Level 1 | Recurring | Marketable Securities Held In Trust Account | |||
Liabilities: | |||
Marketable securities held in Trust Account | 356,190,233 | ||
Level 1 | Recurring | Public Warrants | |||
Liabilities: | |||
Warrant Liability | $ 1,725,000 | ||
Level 2 | Recurring | Public Warrants | |||
Liabilities: | |||
Warrant Liability | 1,173,000 | ||
Level 3 | Recurring | Private Placement Warrants | |||
Liabilities: | |||
Warrant Liability | $ 658,000 | 639,200 | |
Level 3 | Recurring | Sponsor Loans | |||
Liabilities: | |||
Warrant Liability | $ 1,000,000 |
FAIR VALUE MEASUREMENT - Sponso
FAIR VALUE MEASUREMENT - Sponsor Loan Measurement (Details) - Sponsor Loans - Level 3 - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
FAIR VALUE MEASUREMENT | |||
Fair Value | $ 1,000,000 | $ 5,490,000 | |
Unpaid Principal Balance | $ 6,900,000 | $ 6,900,000 |
FAIR VALUE MEASUREMENT - Level
FAIR VALUE MEASUREMENT - Level 3 Fair Value Measurements Inputs (Details) - Level 3 - Private Placement Warrants | Dec. 31, 2023 $ / shares Y | Dec. 31, 2022 $ / shares Y |
Common stock price | ||
FAIR VALUE MEASUREMENT | ||
Fair value measurement input | 10.56 | 10.19 |
Risk-free interest rate | ||
FAIR VALUE MEASUREMENT | ||
Fair value measurement input | 0.0381 | 0.0395 |
Expected term in years | ||
FAIR VALUE MEASUREMENT | ||
Fair value measurement input | Y | 5.25 | 5.36 |
Expected volatility | ||
FAIR VALUE MEASUREMENT | ||
Fair value measurement input | 0 | 0 |
Exercise price | ||
FAIR VALUE MEASUREMENT | ||
Fair value measurement input | 11.50 | 11.50 |
Warrant fair value | ||
FAIR VALUE MEASUREMENT | ||
Fair value measurement input | 0.10 | 0.07 |
FAIR VALUE MEASUREMENT - Change
FAIR VALUE MEASUREMENT - Change in the Fair Value of the Warrant Liabilities (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Changes in the fair value of the warrant | ||
Public Warrants reclassified to level 1 | $ (2,383,000) | $ (1,812,200) |
Change in fair value of warrants subject to forfeiture | 2,913,800 | $ (21,332,800) |
Extinguishment of debt | $ (3,343,000) | |
Fair Value, Liability, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Change in fair value of warrants subject to forfeiture | Change in fair value of warrants subject to forfeiture |
Public And Private Placement Warrants | Level 3 | ||
Changes in the fair value of the warrant | ||
Fair Value at the beginning | $ 639,200 | $ 18,655,000 |
Public Warrants reclassified to level 1 | (6,727,500) | |
Change in fair value of warrants subject to forfeiture | (191,760) | (11,288,300) |
Change in valuation inputs or other assumptions | 210,560 | |
Fair Value at the end | 658,000 | 639,200 |
Sponsor Loans | Level 3 | ||
Changes in the fair value of the warrant | ||
Fair Value at the beginning | 1,000,000 | 5,490,000 |
Change in fair value of warrants subject to forfeiture | (4,490,000) | |
Change in valuation inputs or other assumptions | 2,343,000 | |
Extinguishment of debt | $ (3,343,000) | |
Fair Value at the end | $ 1,000,000 |
INCOME TAX - Deferred tax asset
INCOME TAX - Deferred tax assets (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Deferred tax asset: | ||
Organizational costs/startup expenses | $ 1,223,864 | $ 243,656 |
Federal net operating loss carryforward | 0 | 0 |
Total deferred tax asset | 1,223,864 | 243,656 |
Valuation allowance | (1,223,864) | (243,656) |
Deferred tax asset, net of allowance | $ 0 | $ 0 |
INCOME TAX - Income tax benefit
INCOME TAX - Income tax benefit (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Federal: | ||
Current | $ 1,385,741 | $ 995,207 |
Deferred | 980,208 | 172,282 |
State: | ||
Current | 0 | 0 |
Deferred | 0 | 0 |
Valuation allowance | (980,208) | (172,282) |
Income tax provision | $ 1,385,741 | $ 995,207 |
INCOME TAX - Reconciliation of
INCOME TAX - Reconciliation of the federal income tax rate (Details) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
INCOME TAX | ||
Statutory federal income tax rate | 21% | 21% |
Transaction costs | 0% | 0% |
Change in fair value of warrant liability and Sponsor Loans | (100.30%) | (17.70%) |
Transaction costs allocated to warrants | 12.80% | 0% |
Change in valuation allowance | (160.70%) | 0.70% |
Income tax provision | (227.20%) | 4% |
INCOME TAX - Additional informa
INCOME TAX - Additional information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
INCOME TAX | ||
U.S. federal net operating loss carryovers | $ 0 | $ 0 |
Change in valuation allowance | $ 980,208 | $ 172,282 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Pay vs Performance Disclosure | ||
Net Income (Loss) | $ (1,995,754) | $ 24,256,284 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Dec. 31, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |