| DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS Mountain Crest Acquisition Corp. V (the “Company”) is a blank check company that was incorporated in Delaware on April 8, 2021. The Company was 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”). Although the Company is not limited to a particular industry or sector for purposes of consummating a Business Combination, the Company intends to focus its search on private companies in North America and Asia Pacific regions that have positive operating cash flow or compelling economics and clear paths to positive operating cash flow, significant assets, and successful management teams that are seeking access to the U.S. public capital markets. The Company is an early stage and emerging growth company and, as such, the Company is subject to all of the risks associated with early stage and emerging growth companies. As of June 30, 2024, the Company had not
commenced any operations. All activity for the period from April 8, 2021 (inception) through June 30, 2024 relates to the
Company’s formation, the initial public offering (“Initial Public Offering”), which is described below, and
subsequent to the Initial Public Offering, identifying a target company for a Business Combination. 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 interest income from the proceeds derived from the Initial Public Offering. The registration statement for the
Company’s Initial Public Offering was declared effective on November 12, 2021. On November 16, 2021, the Company
consummated the Initial Public Offering of 6,000,000 0.0001 10.00 60,000,000 Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of 205,000 10.00 2,050,000 Following the closing of the Initial Public Offering on November 16, 2021, an amount of $60,000,000 ($10.00 per Unit) from the net proceeds of the sale of the Units in the Initial Public Offering and the sale of the Private Units was placed in a trust account (the “Trust Account”), which was invested in money market funds, within the meaning set forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”), with a maturity of 180 days or less or in any open-ended investment company that holds itself out as a money market fund meeting the conditions of Rule 2a-7 of the Investment Company Act, as determined by the Company, until the earlier of: (i) the consummation of a Business Combination or (ii) the distribution of the funds in the Trust Account as described below. On November 18, 2021, the underwriters fully exercised their over-allotment option, resulting in an additional 900,000 9,000,000 18,000 10.00 180,000 9,000,000 69,000,000 Transaction costs amounted to $ 5,090,361 1,380,000 2,070,000 1,640,361 1,383,617 The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering and the sale of the Private Units, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. The Company’s initial Business Combination must be with one or more target businesses that together have a fair market value equal to at least 80 50 The Company will provide its holders of the outstanding Public Shares (the “public stockholders”) with the opportunity to redeem all or a portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a stockholder meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek stockholder approval of a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The stockholders will be entitled to redeem their shares for a pro rata portion of the amount then on deposit in the Trust Account (initially $10.00 per share, plus any pro rata interest earned on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations). The per-share amount to be distributed to stockholders who redeem their shares will not be reduced by the deferred underwriting commission the Company will pay to the underwriters (as discussed in Note 6). The Company will proceed with a Business Combination if a majority of the outstanding shares voted are voted in favor of the Business Combination. If a stockholder vote is not required by law and the Company does not decide to hold a stockholder vote for business or other legal reasons, the Company will, pursuant to its Amended and Restated Certificate of Incorporation, as amended (the “Charter”), conduct the redemptions pursuant to the tender offer rules of the Securities and Exchange Commission (“SEC”), and file tender offer documents with the SEC prior to completing a Business Combination. If, however, stockholder approval of the transaction is required by law, or the Company decides to obtain stockholder approval for business or other legal reasons, the Company will offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. If the Company seeks stockholder approval in connection with a Business Combination, the Company’s Sponsor has agreed to (a) vote its Insider Shares (as defined in Note 5), Private Shares and any Public Shares held by it in favor of a Business Combination and (b) not to redeem any shares in connection with a stockholder vote to approve a Business Combination or sell any such shares to the Company in a tender offer in connection with a Business Combination. Additionally, each public stockholder may elect to redeem their Public Shares irrespective of whether they vote for or against the proposed transaction. Notwithstanding the above, if the Company seeks stockholder approval of a Business Combination and it does not conduct redemptions pursuant to the tender offer rules, the Charter provides that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from redeeming its shares with respect to more than an aggregate of 20% or more of the Public Shares, without the prior consent of the Company. The Sponsor has agreed to (i) waive its redemption
rights with respect to Insider Shares, Private Shares and any Public Shares it may acquire during or after the Initial Public Offering
in connection with the consummation of a Business Combination and (ii) not to propose an amendment to the Company’s Charter that
would affect the substance or timing of the Company’s obligation to redeem 100% of its Public Shares if the Company does not complete
a Business Combination, unless the Company provides the public stockholders an opportunity to redeem their Public Shares in conjunction
with any such amendment. However, the Sponsor will be entitled to liquidating distributions with respect to any Public Shares acquired
if the Company fails to consummate a Business Combination or liquidates within the period of time for the Company to complete a Business
Combination (the “Combination Period”). The Company initially had until November 16,
2022 (or until February 16, 2023 if the Company had executed a definitive agreement for a Business Combination by November 16,
2022 but had not completed the Business Combination by such date) to consummate a Business Combination. On October 19, 2022, upon
the upon the execution of a Business Combination Agreement, the Combination Period under its Charter was extended for a period of 3 months
from November 16, 2022 to February 16, 2023. Subsequently, as approved by its stockholders at the special meeting of stockholders
held on December 20, 2022, the Company entered into an amendment to the Investment Management Trust Agreement, dated as of November 12,
2021, with Continental Stock Transfer & Trust Company, on December 20, 2022 (the “Trust Amendment”). Pursuant to
the Trust Amendment, the Company extended the Combination Period from February 16, 2023 to May 16, 2023 by depositing
$ 300,000
In connection with the stockholders’ vote at the special meeting of stockholders held by the Company on December 20, 2022, 4,965,892 On April 3, 2023, the Company received a
notice from the Nasdaq Stock Market LLC (“Nasdaq”) stating that the Company’s listed securities failed to satisfy
the $ 50,000,000 On April 7, 2023, the Company submitted its
application to transfer the listing of its securities from the Global Market to The Nasdaq Capital Market (the “Capital Market”). On May 12, 2023, the Company held a special meeting of stockholders, at which the Company’s stockholders approved an amendment (the “Extension Amendment”) to the Company’s Charter, giving the Company the right to extend Combination Period from May 16, 2023 to February 16, 2024. In connection with the Extension Amendment, stockholders holding 1,405,134 On May 18, 2023, the Company received a second
notice (the “May 18, 2023 Notice”) from Nasdaq, stating that the Company no longer satisfies the requirement to maintain
a minimum of 1,100,000
On June 27, 2023, the Company received a third
notice from Nasdaq stating that the Company’s listed securities failed to maintain a minimum Market Value of Publicly Held Shares
(“MVPHS”) of $ 15,000,000
On June 30, 2023, in response to Nasdaq’s May 18, 2023 Notice, the Company submitted a plan to Nasdaq to regain compliance with the PHS Requirement. On July 18, 2023, the Company received a determination letter from Nasdaq advising it that the Nasdaq Staff has accepted the Company’s plan to regain compliance with the PHS Requirement provided that, on or before November 14, 2023, the Company must file with the SEC and Nasdaq a public document containing its current total shares outstanding and a beneficial ownership table in accordance with the SEC Proxy Rules. If the Company fails to file such public document by November 14, 2023, the Company may receive a notice that its securities will be delisted. In that case, the Company will have the opportunity to appeal that decision to a Listing Qualifications Panel. As approved by its stockholders at the annual meeting held on August 21, 2023, the Company filed the No. 3 amendment to the Charter (a) to modify the terms and extend the Combination Period to November 16, 2024, provided that the Company deposits into the Trust Account an amount equal to $0.10 per outstanding Public Share for each three-month extension commencing on November 17, 2023 by revising paragraph E of Article Sixth of the Charter; (b) to eliminate the requirement to maintain $ 5,000,001 In connection with the stockholders’ vote at the annual meeting of stockholders held by the Company on August 21, 2023, 9,653 On October 23, 2023 the Company received approval
(the “Approval”) from the Nasdaq Listing Qualifications Department of the Nasdaq that the Company’s application to transfer
the listing of its Common Stock, units and rights from the Global Market to the Capital Market has been approved. The Common Stock, units
and rights will be transferred to the Capital Market at the opening of business on October 27, 2023. Common stock, units and rights will
continue to trade under the symbols “MCAG,” “MCAGU” and “MCAGR,” respectively and trading of its Common
Stock, units and rights will be unaffected by this transfer. The Capital Market operates in substantially the same manner as the Global
Market, and listed companies must meet certain financial requirements and comply with Nasdaq’s corporate governance requirements. As previously disclosed, the Company received
three letters from Nasdaq indicating the Company failed to comply with certain continued listing requirements for the Global Market, specifically
on: (i) April 3, 2023, the Company received a letter from Nasdaq stating that the Company’s listed securities failed to comply with
the $ 50,000,000 1,100,000 15,000,000 On October 25, 2023, the Company issued a press
release announcing its listing transfer to the Capital Market. On November 9, 2023, the Company received a notice
from Nasdaq stating that the staff determined that the Company met all the continued listing standards to phase down, including the $ 35,000,000 On December 13, 2023, the Company received a notice
from the Nasdaq Stock Market LLC (“Nasdaq”), stating that the Company’s listed securities failed to comply with the
$ 35,000,000 The Notice has no immediate effect on the listing
of the Company’s securities on Nasdaq and in accordance with Nasdaq Listing Rule 5810(c)(3)(C), the Company has been provided a
period of 180 calendar days, or until June 10, 2024, in which to regain compliance. In order to regain compliance, the MVLS of the Company
must close at $ 35,000,000 35,000,000 On November 15, 2023, February 16, 2024, May 15,
2024 and August 15, 2024 the Company deposited $ 51,932 On July 18, 2024, the Company received a notice (the
“Notice”) from The Nasdaq Stock Market LLC (“Nasdaq”) notifying the Company that, because the Company is delinquent
in filing its Form 10-K for the year ended December 31, 2023 and Form 10-Q for the quarter ended March 31, 2024, the Company no longer
complies with Nasdaq Listing Rule 5250(c)(1) (the “Listing Rule”), which requires companies with securities listed on Nasdaq
to timely file all required periodic reports with the SEC. The Notice has no immediate effect on the listing or trading of the Company’s
common stock, units or rights on the Nasdaq Capital Market. In accordance with Nasdaq’s listing rules, the Company has 60 calendar
days, or until September 2, 2024, after the Notice to submit a plan of compliance (the “Plan”) to Nasdaq addressing how the
Company intends to regain compliance with Nasdaq’s listing rules, and Nasdaq has the discretion to grant the Company up to 180 calendar
days from the due date of the Form 10-K, or October 14, 2024, to regain compliance. On September 11, 2024, the Company received a letter
from Nasdaq that stated based on the August 26, 2024 filing of the Company’s Form 10-K for the year ended December 31, 2023, the
Staff has determined the Company complies with the Listing Rule and that the matter is now closed. On September 13, 2024, the Company filed the Q1 10-Q with the SEC.
Then on September 16, 2024, the Company submitted a letter to Nasdaq setting forth the Company’s plan to regain compliance with
the Listing Rule. The Company also requested the Staff to provide an exception, to October 14, 2024, to allow the Company to regain compliance
with the Listing Rule. If the Company is unable to complete a Business Combination within the Combination Period, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account including interest earned on the funds held in the Trust Account and not previously released to the Company to pay taxes, divided by the number of then outstanding Public Shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining stockholders and the Company’s board of directors, dissolve and liquidate, subject in the case of clauses (ii) and (iii) to the Company’s obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. The Sponsor has agreed to waive its liquidation rights with respect to the Private Shares if the Company fails to complete a Business Combination within the Combination Period. However, if the Sponsor or any of its respective affiliates acquire Public Shares after the Initial Public Offering, such Public Shares will be entitled to liquidating distributions from the Trust Account if the Company fails to complete a Business Combination within the Combination Period. The underwriters have agreed to waive their rights to their deferred underwriting commission (see Note 6) held in the Trust Account in the event the Company does not complete a Business Combination within the Combination Period and, in such event, such amounts will be included with the other funds held in the Trust Account that will be available to fund the redemption of the Public Shares. In the event of such distribution, it is possible that the per share value of the assets remaining available for distribution will be less than the Initial Public Offering price per Unit ($10.00). In order to protect the amounts held in the Trust Account, the Sponsor has agreed to be liable to the Company if and to the extent any claims by a vendor 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 amounts in the Trust Account to below the lesser of (i) $10.00 per Public Share and (ii) the actual amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account, if less than $10.00 per Public Share due to reductions in the value of the trust assets, less taxes payable, provided that such liability will not apply to any claims by a third party who executed a waiver of any and all rights to the monies held in the Trust Account nor will it apply to any claims under the Company’s indemnity of the underwriters of 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 Sponsor will not be responsible to the extent of any liability for such third-party claims. The Company will seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers, prospective target businesses or other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account. Risks and Uncertainties Management continues to evaluate the impact of
the COVID-19 pandemic and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s
financial position, results of its operations, and/or search for a target company, the specific impact is not readily determinable as
of the date of these financial statements. The financial statements do not include any adjustments that might result from the outcome
of this uncertainty. In February 2022, the Russian Federation and Belarus
commenced a military action with the country of Ukraine. As a result of this action, various nations, including the United States, have
instituted economic sanctions against the Russian Federation and Belarus. Separately, in October 2023, Israel and certain Iranian-backed
Palestinian forces began an armed conflict in Israel, the Gaza Strip, and surrounding areas, which threatens to spread to other Middle
Eastern countries including Lebanon and Iran. The impact of these conflicts and related sanctions on the world economy are not determinable
as of the date of these financial statements. The specific impact on the Company’s financial condition, results of operations, and
cash flows is also not determinable as of the date of these financial statements. On August 16, 2022, the Inflation Reduction Act of 2022 (the “IR Act”) was signed into federal law. The IR Act provides for, among other things, a new U.S. federal 1% excise tax on certain repurchases (including redemptions) of stock by publicly traded domestic (i.e., U.S.) corporations and certain domestic subsidiaries of publicly traded foreign corporations. The excise tax is imposed on the repurchasing corporation itself, not its shareholders 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 the Treasury (the “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 IR Act applies only to repurchases that occur after December 31, 2022. Any redemption or other repurchase that occurs after December 31, 2022, in connection with a Business Combination, extension vote or otherwise, may be subject to the excise tax. Whether and to what extent the Company would be subject to the excise tax in connection with a Business Combination, extension vote or otherwise would depend on a number of factors, including (i) the fair market value of the redemptions and repurchases in connection with the Business Combination, extension or otherwise, (ii) the structure of a Business Combination, (iii) the nature and amount of any “PIPE” or other equity issuances 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 (iv) the content of regulations and other guidance from 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 and in the Company’s ability to complete a Business Combination. On May 12, 2023, the Company’s stockholders elected to redeem 1,405,134 14,591,037 9,653 101,373 146,924 Going Concern In connection with the Company’s assessment of going concern considerations in accordance with Financial Accounting Standard Board (“FASB”) Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” the Company has until November 16, 2024 to consummate the proposed Business Combination, provided that the Company deposits into the Trust Account an amount equal to $ 0.10 Liquidity and Capital Resources As of June 30, 2024, the Company had $ 21,087 In addition, in order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor or certain of the Company’s officers and directors may, but are not obligated to, provide the Company working capital loans, as defined below (see Note 5). To date, there were no amounts outstanding under any working capital loans. The Company will need to raise additional capital through loans or additional investments from its Sponsor, stockholders, officers, directors, or third parties. The Company’s officers, directors and Sponsor may, but are not obligated to, loan the Company funds, from time to time or at any time, in whatever amount they deem reasonable in their sole discretion, to meet the Company’s working capital needs. Accordingly, the Company may not be able to obtain additional financing. If the Company is unable to raise additional capital, it may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing operations, suspending the pursuit of a potential transaction, and reducing overhead expenses. The Company cannot provide any assurance that new financing will be available to it on commercially acceptable terms, if at all. On February 15, 2023, the Company issued a non-interest bearing, unsecured promissory note in the aggregate principal amount of $ 300,000 300,000 10.00 On March 31, 2023, the Company and UHY Advisors/UHY
LLP, the Company’s independent registered public accounting firm, entered into an unsecured promissory note for services rendered
and unpaid in the principal sum of one hundred eight thousand one dollars and ninety cents ($108,001), plus interest applied monthly
on any un-paid balance at the rate of eight (8%) percent per year until such sum is fully paid. On August 21, 2023, the Company
and UHY Advisors/UHY LLP extended the due date of promissory note to October 31, 2023. If $ 102,877
5,125
58,001
179,035
6,989 160,000 0
0
On May 16, 2023, the Company and the Sponsor entered into an amendment to the Note, pursuant to which the Note and the forgiveness term was extended from May 16, 2023 to November 16, 2024. On September 13, 2023, as approved by the Company’s audit committee, the Company entered into a note conversion agreement (the “Note Conversion Agreement”) with the Sponsor, to convert the Note into 75,000 75,000 On October 30, 2023, the Company issued an
unsecured promissory note in the aggregate principal amount up to $ 400,000 400,000 On April 3, 2024, the Company issued an unsecured
promissory note in the aggregate principal amount up to $ 300,000 300,000 On April 19, 2024, as approved by the Company’s
audit committee, the Company entered into a note conversion agreement (the “Note Conversion Agreement”) with the Sponsor,
to convert the Principal Amount due under the Notes into 150,000 As of June 30, 2024 and December 31, 2023, there were $ 0 200,000 On April 30, 2024, the Company issued an unsecured
promissory note in the aggregate principal amount up to $ 300,000 300,000 250,000 On August 14, 2024, the Company issued an unsecured
promissory note in the aggregate principal amount up to $ 500,000 500,000 |
