Document and Entity Information
Document and Entity Information | 9 Months Ended |
Sep. 30, 2023 | |
Cover [Abstract] | |
Document Type | S-4/A |
Entity Registrant Name | DIGITAL HEALTH ACQUISITION CORP. |
Entity Filer Category | Non-accelerated Filer |
Entity Small Business | true |
Entity Emerging Growth Company | true |
Entity Ex Transition Period | false |
Amendment Description | AMENDMENT NO. 5 |
Entity Central Index Key | 0001864531 |
Amendment Flag | true |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Mar. 29, 2021 |
Current assets: | |||||||||
Cash | $ 507 | $ 106,998 | $ 760,012 | ||||||
Prepaid and other current assets | 17,500 | 457,605 | |||||||
Total current assets | 18,007 | 106,998 | 1,217,617 | ||||||
Investments held in Trust Account | 8,119,642 | 7,527,369 | 116,726,978 | ||||||
Total Assets | 8,137,649 | 7,634,367 | 117,944,595 | ||||||
Current liabilities: | |||||||||
Accounts payable and accrued expenses | 2,630,100 | 1,886,312 | 140,163 | ||||||
Income taxes payable | 187,225 | 187,225 | |||||||
Bridge Note, net of discount | 292,800 | ||||||||
Promissory note - related party | 926,500 | 350,000 | |||||||
Advances from related parties | 138,937 | 43,900 | 43,900 | ||||||
Bridge Note - Bifurcated Derivative | 364,711 | ||||||||
PIPE Forward Contract Derivative | 170,666 | ||||||||
Total current liabilities | 5,022,029 | 3,295,614 | 184,063 | ||||||
Deferred underwriting fee payable | 4,370,000 | 4,370,000 | 4,370,000 | ||||||
Total Liabilities | 9,392,029 | 7,665,614 | 4,554,063 | ||||||
Commitments | |||||||||
Common stock subject to possible redemption, 0.0001 par value; 694,123 shares issued and outstanding at redemption value of $11.37 and $10.65 per share as of September 30, 2023 and December 31, 2022, respectively | 7,894,214 | 7,395,349 | 116,725,000 | ||||||
Stockholders' Deficit | |||||||||
Common stock, $0.0001 par value; 50,000,000 shares authorized; 3,462,000 and 3,432,000 shares issued and outstanding as of December 31, 2022 and 2021, respectively (excluding 694,123 and 11,500,000 shares subject to possible redemption as of December 31, 2022 and 2021, respectively) | 350 | 347 | 344 | ||||||
Additional paid-in capital | 292,973 | ||||||||
Accumulated deficit | (9,771,586) | (7,719,916) | (3,334,812) | ||||||
Total Stockholders' Deficit | $ (9,148,594) | $ (9,131,969) | $ (9,107,038) | (7,426,596) | $ (5,586,680) | $ (4,521,287) | $ (3,861,828) | (3,334,468) | $ 0 |
TOTAL LIABILITIES, COMMON STOCK SUBJECT TO POSSIBLE REDEMPTION AND STOCKHOLDERS' DEFICIT | $ 7,634,367 | $ 117,944,595 |
CONSOLIDATED BALANCE SHEET (Par
CONSOLIDATED BALANCE SHEET (Parenthetical) - $ / shares | Sep. 30, 2023 | Dec. 31, 2022 | Oct. 20, 2022 | Dec. 31, 2021 |
Common stock, par value, (per share) | $ 0.0001 | $ 0.0001 | ||
Common stock, shares authorized | 50,000,000 | 50,000,000 | ||
Common stock, shares issued | 10,805,877 | |||
Common stock, shares outstanding | 4,156,123 | |||
Common stock subject to redemption | ||||
Temporary equity shares, redemption price (in dollars per share) | $ 11.37 | $ 10.65 | $ 10.15 | |
Temporary Equity, Shares Issued | 694,123 | 694,123 | 11,500,000 | |
Temporary Equity, Shares Outstanding | 694,123 | 694,123 | 694,123 | 11,500,000 |
Common stock subject to not redemption | ||||
Common stock, shares issued | 3,462,000 | 3,432,000 | ||
Common stock, shares outstanding | 3,462,000 | 3,432,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||
Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2022 | |
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||
Formation and operational costs | $ 518,084 | $ 1,129,361 | $ 1,668,105 | $ 2,394,702 | $ 282,671 | $ 3,594,967 | |||||
Loss from operations | (518,084) | (1,129,361) | (1,668,105) | (2,394,702) | (282,671) | (3,594,967) | |||||
Other income(expenses): | |||||||||||
Interest earned on investments held in Trust Account | 104,413 | 391,628 | 301,860 | 470,150 | 1,970 | 922,644 | |||||
Interest expenses - Bridge Note | (125,980) | ||||||||||
Change in fair value of Bridge Note - Bifurcated Derivative | (86,307) | ||||||||||
Change in fair value of PIPE Forward Contract Derivative | 700,506 | 170,666 | (170,666) | ||||||||
Total other (expense) income | 596,371 | 391,628 | 115,300 | 470,150 | 1,970 | 539,691 | |||||
Income (loss) before provision for income taxes | 78,287 | (737,733) | (1,552,805) | (1,924,552) | (280,701) | (3,055,276) | |||||
Provision for income taxes | (83,026) | (83,026) | (187,225) | ||||||||
Net income (loss) | $ 78,287 | $ 263,550 | $ (1,894,642) | $ (820,759) | $ (659,459) | $ (527,360) | $ (1,552,805) | $ (2,007,578) | $ (280,701) | $ (3,242,501) | |
Weighted average shares outstanding, non-redeemable common stock, basic | 4,183,123 | 14,932,000 | 4,177,427 | 14,932,000 | 3,981,054 | 12,741,219 | |||||
Weighted average shares outstanding, non-redeemable common stock, diluted | 4,183,123 | 14,932,000 | 4,177,427 | 14,932,000 | 3,981,054 | 12,741,219 | |||||
Basic net income (loss) per share, non-redeemable common stock | $ 0.02 | $ (0.05) | $ (0.37) | $ (0.13) | $ (0.07) | $ (0.25) | |||||
Diluted net income (loss) per share, non-redeemable common stock | $ 0.02 | $ (0.05) | $ (0.37) | $ (0.13) | $ (0.07) | $ (0.25) |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Total |
Balance at the beginning at Mar. 29, 2021 | $ 0 | $ 0 | $ 0 | $ 0 |
Balance at the beginning (in shares) at Mar. 29, 2021 | 0 | |||
Increase (Decrease) in Stockholders' Equity | ||||
Issuance of shares, net of offering cost | $ 288 | 24,712 | 25,000 | |
Issuance of shares, net of offering cost (in shares) | 2,875,000 | |||
Accretion of common stock subject to redemption value | (18,078,211) | (3,054,111) | (21,132,322) | |
Sale of 557,000 Private Placement Units | $ 56 | 5,569,944 | 5,570,000 | |
Sale of units, net of underwriting discounts (in shares) | 557,000 | |||
Fair value of Public Warrants at issuance | 12,483,555 | 12,483,555 | ||
Allocation of net income (loss), as adjusted | (280,701) | (280,701) | ||
Balance at the end at Dec. 31, 2021 | $ 344 | 0 | (3,334,812) | (3,334,468) |
Balance at the end (in shares) at Dec. 31, 2021 | 3,432,000 | |||
Increase (Decrease) in Stockholders' Equity | ||||
Allocation of net income (loss), as adjusted | (527,360) | (527,360) | ||
Balance at the end at Mar. 31, 2022 | $ 344 | 0 | (3,862,172) | (3,861,828) |
Balance at the beginning at Dec. 31, 2021 | $ 344 | 0 | (3,334,812) | (3,334,468) |
Balance at the beginning (in shares) at Dec. 31, 2021 | 3,432,000 | |||
Increase (Decrease) in Stockholders' Equity | ||||
Allocation of net income (loss), as adjusted | (2,007,578) | |||
Balance at the end at Sep. 30, 2022 | $ 344 | (5,587,024) | (5,586,680) | |
Balance at the beginning at Dec. 31, 2021 | $ 344 | 0 | (3,334,812) | (3,334,468) |
Balance at the beginning (in shares) at Dec. 31, 2021 | 3,432,000 | |||
Increase (Decrease) in Stockholders' Equity | ||||
Issuance of shares, net of offering cost | $ 3 | 284,421 | 284,424 | |
Issuance of shares, net of offering cost (in shares) | 30,000 | |||
Accretion of common stock subject to redemption value | (1,142,603) | (1,142,603) | ||
Issuance of 173,913 warrants issued with Bridge Note, net of offering costs | 8,552 | 8,552 | ||
Allocation of net income (loss), as adjusted | (3,242,501) | (3,242,501) | ||
Balance at the end at Dec. 31, 2022 | $ 347 | 292,973 | (7,719,916) | (7,426,596) |
Balance at the end (in shares) at Dec. 31, 2022 | 3,462,000 | |||
Balance at the beginning at Mar. 31, 2022 | $ 344 | 0 | (3,862,172) | (3,861,828) |
Increase (Decrease) in Stockholders' Equity | ||||
Allocation of net income (loss), as adjusted | (659,459) | (659,459) | ||
Balance at the end at Jun. 30, 2022 | 344 | 0 | (4,521,631) | (4,521,287) |
Increase (Decrease) in Stockholders' Equity | ||||
Accretion of common stock subject to redemption value | (244,634) | (244,634) | ||
Allocation of net income (loss), as adjusted | (820,759) | (820,759) | ||
Balance at the end at Sep. 30, 2022 | 344 | (5,587,024) | (5,586,680) | |
Balance at the beginning at Dec. 31, 2022 | 347 | 292,973 | (7,719,916) | (7,426,596) |
Increase (Decrease) in Stockholders' Equity | ||||
Issuance of shares, net of offering cost | $ 2 | 214,198 | 214,200 | |
Issuance of shares, net of offering cost (in shares) | 20,000 | |||
Allocation of net income (loss), as adjusted | (1,894,642) | (1,894,642) | ||
Balance at the end at Mar. 31, 2023 | $ 349 | 507,171 | (9,614,558) | (9,107,038) |
Balance at the beginning at Dec. 31, 2022 | $ 347 | 292,973 | (7,719,916) | (7,426,596) |
Balance at the beginning (in shares) at Dec. 31, 2022 | 3,462,000 | |||
Increase (Decrease) in Stockholders' Equity | ||||
Allocation of net income (loss), as adjusted | (1,552,805) | |||
Balance at the end at Sep. 30, 2023 | (9,148,594) | |||
Balance at the beginning at Mar. 31, 2023 | $ 349 | 507,171 | (9,614,558) | (9,107,038) |
Increase (Decrease) in Stockholders' Equity | ||||
Accretion of common stock subject to redemption value | (403,953) | (403,953) | ||
Allocation of net income (loss), as adjusted | 263,550 | 263,550 | ||
Balance at the end at Jun. 30, 2023 | $ 350 | $ 622,642 | (9,754,961) | (9,131,969) |
Increase (Decrease) in Stockholders' Equity | ||||
Accretion of common stock subject to redemption value | (94,912) | (94,912) | ||
Allocation of net income (loss), as adjusted | $ 78,287 | 78,287 | ||
Balance at the end at Sep. 30, 2023 | $ (9,148,594) |
CONSOLIDATED STATEMENTS OF CH_2
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT (Parenthetical) - shares | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
May 05, 2023 | Oct. 06, 2022 | Feb. 28, 2023 | Mar. 31, 2023 | Dec. 31, 2021 | Dec. 31, 2022 | |
Issuance of 173,913 warrants issued with Bridge Note, net of offering costs | 173,913 | |||||
Common Stock | ||||||
Sale of units, net of underwriting discounts (in shares) | 557,000 | |||||
Issuance of shares, net of offering cost (in shares) | 7,000 | 30,000 | 20,000 | 20,000 | 2,875,000 | 30,000 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS | 9 Months Ended | 12 Months Ended | ||
Mar. 29, 2021 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Cash Flows from Operating Activities: | ||||
Net loss | $ (280,701) | $ (3,242,501) | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||
Interest earned on investments held in Trust Account | (1,970) | (922,644) | ||
Change in fair value of derivative | 86,307 | |||
Change in Fair Value of Pipe Forward Contract Derivative | 170,666 | |||
Changes in operating assets and liabilities: | ||||
Prepaid and other current assets | (457,605) | 457,605 | ||
Accounts payable and accrued expenses | 140,163 | 1,746,149 | ||
Accrued interest expense - Bridge Note | 125,980 | |||
Income taxes payable | 187,225 | |||
Net cash used in operating activities | (600,113) | (1,391,213) | ||
Cash Flows from Investing Activities: | ||||
Investment of cash into Trust Account | (116,725,008) | (350,000) | ||
Cash withdrawn from Trust Account in connection with redemptions | 110,472,253 | |||
Net cash used in investing activities | (116,725,008) | 110,122,253 | ||
Cash Flows from Financing Activities: | ||||
Proceeds from issuance of common stock to Sponsor | 25,000 | |||
Proceeds from sale of Units, net of underwriting discounts paid | 113,045,000 | |||
Proceeds from sale of Private Placement Units | 5,570,000 | |||
Advances from related party | 43,900 | |||
Proceeds from Bridge Note | 800,000 | |||
Payment of Financing Cost in Bridge Note | (61,800) | |||
Proceeds from promissory note - related party | 149,951 | 350,000 | ||
Repayment of promissory note - related party | (602,720) | |||
Redemption of common stock | (110,472,254) | |||
Payment of offering costs | (145,998) | |||
Net cash provided by financing activities | 118,085,133 | (109,384,054) | ||
Net Change in Cash | 760,012 | (653,014) | ||
Cash - Beginning of period | 760,012 | |||
Cash - End of period | 760,012 | 106,998 | $ 760,012 | |
Non-cash investing and financing activities: | ||||
Warrants issued as financing cost in Bridge Promissory Note | $ 0 | 8,552 | ||
Common stock issued as financing cost in Bridge Promissory Note | 284,424 | |||
Offering costs paid through promissory note | 457,769 | |||
Deferred underwriting fee payable | 4,370,000 | $ 4,370,000 | 4,370,000 | |
Operating cost paid through advances | $ (5,000) | $ (5,000) |
DESCRIPTION OF ORGANIZATION AND
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | ||
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS Digital Health Acquisition Corp. (the “Company” or “DHAC”) is a blank check company incorporated as a Delaware corporation on March 30, 2021. The Company was incorporated for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar Business Combination with one or more businesses (the “Business Combination”). On June 9, 2022, DHAC Merger Sub I, Inc. (“Merger Sub I”), a Delaware corporation and a wholly owned subsidiary of the Company, was formed. On June 9, 2022, DHAC Merger Sub II, Inc. (“Merger Sub II”), a Texas corporation and a wholly owned subsidiary of the Company, was formed. As of September 30, 2023, the Company had not commenced any significant operations. All activity for the period from inception, the date which operations commenced, through September 30, 2023 relates to the Company’s formation, the Company’s Initial Public Offering (as defined below), and 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 generates non-operating income in the form of interest income from the proceeds derived from the Initial Public Offering (as defined below). The registration statement for the Company’s Initial Public Offering was declared effective on November 3, 2021. On November 8, 2021, the Company consummated the Initial Public Offering of 11,500,000 units (the “Units” and, with respect to the shares of common stock included in the Units sold, the “Public Shares”), which includes the full exercise by the underwriter of its over-allotment option in the amount of 1,500,000 Units, at $10.00 per Unit, generating gross proceeds of $115,000,000 , which is described in Note 3. On October 20, 2022, in connection with the stockholders meeting to approve the extension, 10,805,877 shares of DHAC’s common stock were redeemed leaving 694,123 shares subject to redemption. Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of 557,000 units (each, a “Private Placement Unit” and, collectively, the “Private Placement Units”) at a price of $10.00 per Private Placement Unit in a private placement to Digital Health Sponsor LLC (the “Sponsor”), generating gross proceeds of $5,570,000 , which is described in Note 4. As of November 8, 2021, the Company received $3,680,000 from the proceeds of the Private Placement and recorded $1,890,000 in subscription receivable. The Sponsor paid the subscription in full on November 12, 2021. Transaction costs amounted to $6,877,164 , consisting of $1,955,000 of underwriting fees, $4,370,000 of deferred underwriting fees and $552,164 of other offering costs. In addition, cash of $9,478 was held outside of the Trust Account (as defined below) and is available for the payment of offering costs and for working capital purposes. Following the closing of the Initial Public Offering on November 8, 2021, an amount of $116,725,000 ( $10.15 per Unit) from the net proceeds of the sale of the Units in the Initial Public Offering and the sale of the Private Placement Units was placed in a trust account (the “Trust Account”), invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 185 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 of 1940, as amended (the “Investment Company Act”). The Trust Account is intended as a holding place for funds pending the earliest to occur of either (i) the completion of the initial Business Combination; (ii) 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 (A) to modify the substance or timing of the Company’s obligation to allow redemption in connection with the initial Business Combination or to redeem 100% of the Company’s public shares if the Company does not complete the initial Business Combination within 21 months from the closing of the Initial Public Offering (as currently extended and as may be further extended in accordance with the Amended and Restated Certificate of Incorporation) or (B) with respect to any other material provisions relating to stockholders’ rights or pre-initial Business Combination activity; or (iii) absent an initial Business Combination within 21 months from the closing of the Initial Public Offering (as currently extended and as may be further extended in accordance with the Amended and Restated Certificate of Incorporation), the Company’s return of the funds held in the Trust Account to the Company’s public stockholders as part of the Company’s redemption of the public shares. On October 20, 2022, stockholders of DHAC approved a proposal to amend DHAC’s amended and restated certificate of incorporation to (a) extend the date by which DHAC has to consummate a business combination (the “Extension”) for an additional three (3) months, from November 8, 2022 to February 8, 2023, (b) provide DHAC’s board of directors the ability to further extend the date by which DHAC has to consummate a business combination up to three (3) additional times for three (3) months each time, for a maximum of nine (9) additional months if the Sponsor pays an amount equal to $350,000 for each three-month extension (the “Extension Fee”), which amount shall be deposited in the trust account of DHAC; provided, that if as of the time of an extension DHAC has filed a Form S-4 registration statement in connection with its initial business combination, then no Extension Fee would be required in connection with such extension; provided further that for each three -month extension (if any) following such extension where no deposit into the Trust Account or other payment has been made, an Extension Fee is required, and (c) allow for DHAC to provide redemption rights to DHAC’s public stockholders in accordance with the requirements of the amended and restated certificate of incorporation without complying with the tender offer rules. In connection with such stockholder vote, an aggregate of 10,805,877 shares of DHAC’s common stock were redeemed leaving 4,156,123 shares issued and outstanding and entitled to vote as of October 20, 2022. 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. There is no assurance that the Company will be able to successfully effect a Business Combination. The Company will provide the Company’s public stockholders with the opportunity to redeem all or a portion of their common shares in connection with the initial Business Combination either (i) in connection with a general meeting called to approve the Business Combination or (ii) without a stockholder vote by means of a tender offer. 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, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would require the Company to seek stockholder approval under applicable law or stock exchange listing requirement. The public stockholders will be entitled to redeem their shares at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account calculated as of two business days prior to the consummation of the initial Business Combination, including interest earned on the funds held in the Trust Account and not previously released to the Company to pay its taxes, divided by the number of then outstanding public shares, subject to the limitations. The amount in the Trust Account was initially anticipated to be $10.15 per public share. On October 26, 2022, in connection with the approval of the extension, the Sponsor deposited $350,000 into the Trust Account for the first three-month extension, as such the amount in the Trust Account is anticipated to be $10.65 per public share. On February 2, 2023 the Company announced a second extension of the date by which the Company has to consummate a business combination from February 8, 2023 to May 8, 2023. On May 8, 2023 the Company announced a third extension of the date by which the Company has to consummate a business combination from May 8, 2023 to August 8, 2023 (as extended, the “Combination Period”) and deposited $ 350,000 into the Trust Account for such extension. The May extension is the second of three additional three-month extensions permitted under the Company’s governing documents and provides the Company with additional time to complete its initial business combination. On August 1, 2023, the Company issued a press release announcing that on July 31, 2023, the Company extended the date by which the Company has to consummate a business combination from August 8, 2023 to November 8, 2023. The extension is the third of three additional three-month extensions permitted under the Company’s governing documents and provides the Company with additional time to complete its initial business combination. On November 6, 2023, the Company approved four additional extensions, each by an additional three month, for an aggregate of an additional twelve months up to November 8, 2024. If the Company is unable to complete its initial 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 (less taxes payable and up to $100,000 of interest to pay dissolution expenses), 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 liquidation distributions, if any) 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, liquidate and dissolve, subject, in each case, to the Company’s obligations under Delaware law to provide for claims of creditors and in all cases subject to the other requirements of applicable law. The shares of common stock subject to redemption are recorded at a redemption value and classified as temporary equity in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 480, “Distinguishing Liabilities from Equity.”. The Sponsor, along with certain advisors, officers and directors, has entered into a letter agreement with the Company, pursuant to which they have agreed to (i) waive their redemption rights with respect to their founder shares (as defined in Note 5) and public shares in connection with the completion of the initial Business Combination; (ii) waive their redemption rights with respect to their founder shares and public shares 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 Company’s obligation to allow redemption in connection with the initial Business Combination or to redeem 100% of the Company’s public shares if the Company have not consummated an initial Business Combination within the Combination Period or (B) with respect to any other material provisions relating to stockholders’ rights or pre-initial Business Combination activity; (iii) waive their rights to liquidating distributions from the Trust Account with respect to their founder shares if the Company fails to complete the initial Business Combination within the Combination 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 prescribed time frame; and (iv) vote any founder shares held by them and any public shares purchased during or after the Initial Public Offering (including in open market and privately negotiated transactions) in favor of the initial Business Combination. The Company’s Sponsor has agreed that it will be liable to the Company if and to the extent any claims by a third party (other than the Company’s independent registered public accounting firm) for services rendered or products sold to the Company, or a prospective target business with which the Company have entered into a written letter of intent, confidentiality or other similar agreement or Business Combination agreement, reduce the amount of funds in the Trust Account to below the lesser of (i) $10.15 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 $10.15 per 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 or prospective target business who executed a waiver of any and all rights to the monies held in the Trust Account (whether or not such waiver is enforceable) nor will it apply 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”). However, the Company has not asked the Sponsor to reserve for such indemnification obligations, nor have the Company independently verified whether the Sponsor has sufficient funds to satisfy its indemnity obligations and the Company believes that the Company’s Sponsor’s only assets are securities of the Company. Therefore, the Company cannot assure that the Sponsor would be able to satisfy those obligations. On June 15, 2022, DHAC, entered into a Business Combination agreement, by and among DHAC Merger Sub I, Inc., DHAC Merger Sub II, Inc., DHAC (together with Merger Sub I, the “Merger Subs”), VSee Lab, Inc., a Delaware corporation (“VSee”) and iDoc Virtual Telehealth Solutions, Inc., a Texas corporation (“iDoc”). The Business Combination agreement and the transactions contemplated thereby (collectively, the “Business Combination”) were unanimously approved by the boards of directors of each of DHAC, VSee and iDoc on June 15, 2022. On August 9, 2022, DHAC, Merger Sub I, Merger Sub II, VSee and iDoc entered into the First Amended and Restated Business Combination Agreement to provide for the concurrent execution of financing documents for a PIPE consisting of convertible notes and warrants and delivery of the Cassel Salpeter’s opinion to the Board. On October 6, 2022, DHAC, Merger Sub I, Merger Sub II, VSee and iDoc entered into a Second Amended and Restated Business Combination Agreement (as it may be amended, supplemented or otherwise modified from time to time, the “Business Combination Agreement”) to make the consideration payable to VSee and iDoc stockholders 100% DHAC common stock and to provide for the concurrent execution of amended PIPE financing documents providing for the issuance of the shares and warrants to the PIPE investors. On July 11, 2023, each of the PIPE Investors provided notice to the Company that since a closing condition was not met, the PIPE Investors were under no obligation to close the PIPE Financing. Pursuant to the Business Combination Agreement and subject to the terms and conditions set forth therein, Merger Sub I will merge with and into VSee (the “VSee Merger”), with VSee surviving the VSee Merger as a wholly owned subsidiary of DHAC, and Merger Sub II will merge with and into iDoc (the “iDoc Merger” and, together with the VSee Merger, the “Mergers”), with iDoc surviving the iDoc Merger as a wholly owned subsidiary of DHAC. At the effective time of the Mergers (the “Effective Time”), DHAC will change its name to VSee Health, Inc. On March 31, 2023, the Company received a letter (the “Letter”) from the staff (the “Staff”) at The Nasdaq Global Market (“Nasdaq Global”) notifying the Company that for the 30 consecutive trading days prior to the date of the Letter, the Company’s securities listed on the Nasdaq Global (including the Common Stock, Units and Warrants) (the “Securities”) had traded at a value below the minimum $50,000,000 “Market Value of Listed Securities” (“MVLS”) requirement set forth in Nasdaq Listing Rule 5450(b)(2)(A), which is required for continued listing of the Company’s Securities on Nasdaq Global. The Letter is only a notification of deficiency, not of imminent delisting, and has no current effect on the listing or trading of the Company’s Securities on Nasdaq Global. In accordance with Nasdaq listing rule 5810(c)(3)(C), the Company has 180 calendar days, or until September 27, 2023, to regain compliance. The Letter notes that to regain compliance, the Company’s Securities must trade at or above a level such that the Company’s MVLS closes at or above $50,000,000 for a minimum of ten consecutive business days during the compliance period, which ends September 27, 2023. The Letter further notes that if the Company is unable to satisfy the MVLS requirement prior to such date, the Company may be eligible to transfer the listing of its Securities to The Nasdaq Capital Market (provided that it then satisfies the requirements for continued listing on that market). If the Company does not regain compliance by September 27, 2023, Nasdaq staff will provide written notice to the Company that its Securities are subject to delisting. At that time, the Company may appeal any such delisting determination to a hearings panel. On May 23, 2023, the Company received a letter (the “Second Letter”) from the Staff. The Second Letter notifies the Company that for the 30 consecutive business days prior to the date of the Second Letter, the Company’s market value of publicly held shares (“MVPHS”) was below the $15 million required for continued listing on the Nasdaq Global and therefore, the Company no longer meets Nasdaq Listing Rule 5450(b)(3)(C) (the “MVPHS Requirement”). The Second Letter is only a notification of deficiency, not of imminent delisting, and has no current effect on the listing or trading of the Company’s securities on Nasdaq Global. In accordance with Nasdaq Listing Rule 5810(c)(3)(D), the Company has 180 calendar days, or until November 20, 2023 (the “Compliance Date”), to regain compliance. The Second Letter notes that to regain compliance with the MVPHS Requirement, the MVPHS must equal or exceed $15 million for a minimum of ten (10) consecutive business days on or prior to the Compliance Date. If the Company regains compliance with the MVPHS Requirement, Nasdaq will provide the Company with written confirmation and will close the matter. The Second Letter further notes that if the Company is unable to satisfy the MVPHS requirement prior to the Compliance Date, the Company may be eligible to transfer the listing of its securities to The Nasdaq Capital Market (provided that it then satisfies the requirements for continued listing on that market). If the Company does not regain compliance with the MVPHS Requirement by the Compliance Date, the Staff will provide written notice to the Company that its securities are subject to delisting. At that time, the Company may appeal any such delisting determination to a Nasdaq hearing’s panel. On September 28, 2023, the Company received a letter (the “Third Letter”) from the staff at The Nasdaq Global Market (“Nasdaq Global”) notifying the Company that the Staff has determined to delist the Company’s securities listed on Nasdaq Global (including the Common Stock, Units and Warrants) (the “Securities”) because it has not regained compliance with the Market Value of Listed Securities (“MVLS”) Standard. The market value of the Company’s listed Securities was below the $50,000,000 minimum MVLS requirement for continued listing on Nasdaq Global under Nasdaq Listing Rule 5450(b)(2)(A) (the “MLVS Rule”) and had not been at least $50,000,000 for the proceeding 30 consecutive trading days. As previously reported by the Company on its Current Report on Form 8-K filed with the Securities and Exchange Commission (the “SEC”) on April 6, 2023, the Staff initially notified the Company on March 31, 2023 that the minimum MVLS for the Company’s Securities were below the $50,000,000 minimum MVLS requirement for the previous 30 consecutive trading days, and in accordance with the Nasdaq Listing Rules, the Company was provided 180 calendar days, or until September 27, 2023 to regain compliance with the MVLS Rule. Pursuant to the Third Letter, on October 4, 2023, the Company requested a hearing (the “Hearing”) to appeal this determination and also applied to transfer the listing of its Securities from Nasdaq Global to the Nasdaq Capital Market (“NasdaqCM”). The Hearing is scheduled to be held on November 30, 2023 at 12:00 PM Eastern Time. On October 9, 2023, the Company received an additional letter (the “Fourth Letter”) from the staff at Nasdaq Global notifying the Company that its not meeting the 400 total shareholders requirement under the Nasdaq Listing Rule 5450(a)(2) serves as an additional basis for delisting the Company’s Securities from Nasdaq Global. The Company planned to also address the 400 total shareholder requirement at the Hearing. On October 26, 2023, the Nasdaq Listing Qualifications Department of the Nasdaq Stock Market notified the Company in writing (the “Notice”) that its application to transfer the listing of its Securities to NasdaqCM has been approved. The Notice also stated that the Company’s Securities will be transferred to the NasdaqCM at the opening of business on October 30, 2023. On November 1, 2023, the Company received a letter from the Nasdaq Global Hearings panel that due to the Company’s transfer of its listed Securities to NasdaqCM, the Hearing on November 30, 2023 regarding non-compliance with the Nasdaq Global listing standards has been cancelled. As of October 30, 2023, the Company’s Securities are listed and traded on The Nasdaq Stock Market on NasdaqCM and will continue to be listed and traded on NasdaqCM. On August 1, 2023, the Company issued a press release announcing that on July 31, 2023, the Company extended the date by which the Company has to consummate a business combination from August 8, 2023 to November 8, 2023. The extension is the third of three additional three -month extensions permitted under the Company’s governing documents and provides the Company with additional time to complete its initial business combination. On August 17, 2023, the Company issued an amended and restated promissory note to SCS Capital Partners LLC in the aggregate principal amount of $565,000 (the “Promissory Note”), which amended and restated the promissory note issued by the Company to SCS Capital Partners LLC in February 2023. The Promissory Note bears no interest and is due and payable at the closing of the business combination. On September 8, 2023, DHAC held a Special Meeting and the stockholders approved the proposal to the amendment of the Company’s amended and restated certificate of incorporation (as amended, the “Charter”) to expand the methods that the Company may employ to not become subject to the “penny stock” rules of the SEC (the “Charter Amendment Proposal”) and the adjournment of the special meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of the Charter Amendment Proposal. On September 8, 2023, DHAC filed an amendment to its Charter pursuant to the Charter Amendment Proposal. Under the amended Charter, DHAC would be able to consummate the Business Combination even if as a result of the transactions the combined company does not have net tangible assets of at least $5,000,001 upon consummation of such business combination. On November 6, 2023, DHAC held its 2023 annual stockholders meeting (“2023 Annual Meeting”). At the 2023 Annual Meeting, the stockholders of DHAC approved amendments to DHAC’s Charter to extend the date by which the Company must consummate a Business Combination (as defined in the Charter) up to four (4) times, each by an additional three (3) months, for an aggregate of twelve ( 12 ) additional months (i.e., from November 8, 2023 up to November 8, 2024) or such earlier date as determined by the Company’s board of directors. In connection with the amended Charter, on November 6, 2023, DHAC extended the period of time that it has to consummate its business combination by three months from November 8, 2023 to February 8, 2024. Furthermore, at the 2023 Annual Meeting, the stockholders of DHAC also approved an amendment to DHAC’s investment management trust agreement (the “Trust Agreement”), dated as of November 3, 2021 and as amended on October 26, 2022, by and between the Company and Continental Stock Transfer & Trust Company, which allows the Company to extend the business combination period from November 8, 2023 to up to four (4) times, each by an additional three (3) months, for an aggregate of twelve ( 12 ) additional months to November 8, 2024. In connection with the 2023 Annual Meeting and amendments to DHAC’s Charter and Trust Agreement, 579,157 shares of Common Stock were tendered for redemption. | NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS Digital Health Acquisition Corp. (the “Company” or “DHAC”) is a blank check company incorporated as a Delaware corporation on March 30, 2021. The Company was incorporated for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar Business Combination with one or more businesses (the “Business Combination”). On June 9, 2022, DHAC Merger Sub I, Inc. (“Merger Sub I”), a Delaware corporation and a wholly owned subsidiary of the Company, was formed. On June 9, 2022, DHAC Merger Sub II, Inc. (“Merger Sub II”), a Texas corporation and a wholly owned subsidiary of the Company, was formed. As of December 31, 2022, the Company had not commenced any significant operations. All activity for the period from inception, date which operations commenced, through December 31, 2022 relates to the Company’s formation and the Company’s Initial Public Offering (as defined below), and 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 generates non-operating income in the form of interest income from the proceeds derived from the Initial Public Offering (as defined below). The Company has selected December 31 as its fiscal year end. The registration statement for the Company’s Initial Public Offering was declared effective on November 3, 2021. On November 8, 2021, the Company consummated the Initial Public Offering of 11,500,000 units (the “Units” and, with respect to the shares of common stock included in the Units sold, the “Public Shares”), which includes the full exercise by the underwriter of its over-allotment option in the amount of 1,500,000 Units, at $10.00 per Unit, generating gross proceeds of $115,000,000, which is described in Note 3. On October 20, 2022, In connection with the stockholders meeting to approve the extension, 10,805,877 shares of DHAC’s common stock were redeemed leaving 694,123 shares subject to redemption. Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of 557,000 units (each, a “Private Placement Unit” and, collectively, the “Private Placement Units”) at a price of $10.00 per Private Placement Unit in a private placement to Digital Health Sponsor LLC (the “Sponsor”), generating gross proceeds of $5,570,000, which is described in Note 4. As of November 8, 2021, the Company received $3,680,000 from the proceeds of the Private Placement and recorded $1,890,000 in subscription receivable. The Sponsor paid the subscription in full on November 12, 2021. Transaction costs amounted to $6,877,164, consisting of $1,955,000 of underwriting fees, $4,370,000 of deferred underwriting fees and $552,164 of other offering costs. In addition, cash of $9,478 was held outside of the Trust Account (as defined below) and is available for the payment of offering costs and for working capital purposes. Following the closing of the Initial Public Offering on November 8, 2021, an amount of $116,725,000 ($10.15 per Unit) from the net proceeds of the sale of the Units in the Initial Public Offering and the sale of the Private Placement Units was placed in a trust account (the “Trust Account”), invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 185 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 of 1940, as amended (the “Investment Company Act”). The Trust Account is intended as a holding place for funds pending the earliest to occur of either (i) the completion of the initial Business Combination; (ii) 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 (A) to modify the substance or timing of the Company’s obligation to allow redemption in connection with the initial Business Combination or to redeem 100% of the Company’s public shares if the Company does not complete the initial Business Combination within 18 months 18 months three nine 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. There is no assurance that the Company will be able to successfully effect a Business Combination. The Company will provide the Company’s public stockholders with the opportunity to redeem all or a portion of their common shares in connection with the initial Business Combination either (i) in connection with a general meeting called to approve the Business Combination or (ii) without a stockholder vote by means of a tender offer. 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, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would require the Company to seek stockholder approval under applicable law or stock exchange listing requirement. The public stockholders will be entitled to redeem their shares at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account calculated as of two The amount in the Trust Account was Initially anticipated to be $10.15 per public share. On October 26, 2022, in connection with the approval of the extension, the Sponsor deposited $350,000 into the Trust Account for the first three-month extension, as such the amount in the Trust Account is anticipated to be $10.65 per public share. On February 2, 2023 the Company announced a second extension of the date by which the Company has to consummate a business combination from February 8, 2023 to May 8, 2023 (as extended, the “Combination Period”). The February extension is the first of three additional three-month extensions permitted under the Company’s governing documents and provides the Company with additional time to complete its initial business combination. In connection with such stockholder vote, an aggregate of 10,805,877 shares of DHAC’s common stock were redeemed leaving 4,156,123 shares issued and outstanding and entitled to vote as of October 20, 2022. However, if the Company is unable to complete its initial 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 The shares of common stock subject to redemption are recorded at a redemption value and classified as temporary equity in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 480, “Distinguishing Liabilities from Equity.” In such case, and in accordance with the closing conditions set forth in the Company’s business Combination Agreement (as defined below), the Company will proceed with a Business Combination if the Company has net tangible assets of at least $5,000,001 upon such consummation of a Business Combination and, if the Company seeks stockholder approval, a majority of the issued and outstanding shares voted are voted in favor of the Business Combination. The Sponsor, along with certain advisors, officers and directors, has entered into a letter agreement with the Company, pursuant to which they have agreed to (i) waive their redemption rights with respect to their founder shares (as defined in Note 5) and public shares in connection with the completion of the initial Business Combination; (ii) waive their redemption rights with respect to their founder shares and public shares 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 Company’s obligation to allow redemption in connection with the initial Business Combination or to redeem 100% of the Company’s public shares if the Company have not consummated an initial Business Combination within the Combination Period or (B) with respect to any other material provisions relating to stockholders’ rights or pre-initial Business Combination activity; (iii) waive their rights to liquidating distributions from the Trust Account with respect to their founder shares if the Company fail to complete the initial Business Combination within the Combination Period, although they will be entitled to liquidating distributions from the Trust Account with respect to any public shares they hold if the Company fail to complete the initial Business Combination within the prescribed time frame; and (iv) vote any founder shares held by them and any public shares purchased during or after the Initial Public Offering (including in open market and privately negotiated transactions) in favor of the initial Business Combination. The Company’s Sponsor has agreed that it will be liable to the Company if and to the extent any claims by a third party (other than the Company’s independent registered public accounting firm) for services rendered or products sold to the Company, or a prospective target business with which the Company have entered into a written letter of intent, confidentiality or other similar agreement or Business Combination agreement, reduce the amount of funds in the Trust Account to below the lesser of (i) $10.15 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 $10.15 per 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 or prospective target business who executed a waiver of any and all rights to the monies held in the Trust Account (whether or not such waiver is enforceable) nor will it apply 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”). However, the Company has not asked the Sponsor to reserve for such indemnification obligations, nor have the Company independently verified whether the Sponsor has sufficient funds to satisfy its indemnity obligations and the Company believe that the Company’s Sponsor’s only assets are securities of the Company. Therefore, the Company cannot assure that the Sponsor would be able to satisfy those obligations. On June 15, 2022, DHAC, entered into a business combination agreement, by and among DHAC Merger Sub I, Inc., a Delaware corporation and a wholly owned subsidiary of DHAC (“Merger Sub I”), DHAC Merger Sub II, Inc., a Texas corporation and a wholly owned subsidiary of DHAC (“Merger Sub II” and together with Merger Sub I, the “Merger Subs”), VSee Lab, Inc., a Delaware corporation (“VSee”) and iDoc Virtual Telehealth Solutions, Inc., a Texas corporation (“iDoc”) (as it may be amended, supplemented or otherwise modified from time to time, the “Business Combination Agreement”). Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to such terms in the Business Combination Agreement. The Business Combination Agreement and the transactions contemplated thereby (collectively, the “Business Combination”) were unanimously approved by the boards of directors of each of DHAC, VSee and iDoc on June 15, 2022. On August 9, 2022, DHAC, Merger Sub I, Merger Sub II, VSee and iDoc entered into the First Amended and Restated Business Combination Agreement to provide for the concurrent execution of financing documents for a PIPE consisting of convertible notes and warrants and delivery of the Cassel Salpeter’s opinion to the Board. On October 6, 2022, DHAC, Merger Sub I, Merger Sub II, VSee and iDoc entered into the Business Combination Agreement to make the consideration payable to VSee and iDoc stockholders 100% DHAC common stock and to provide for the concurrent execution of amended PIPE Financing documents providing for the issuance of the PIPE Shares and the PIPE Warrants further described on Note 6. Pursuant to the Business Combination Agreement and subject to the terms and conditions set forth therein, Merger Sub I will merge with and into VSee (the “VSee Merger”), with VSee surviving the VSee Merger as a wholly owned subsidiary of DHAC, and Merger Sub II will merge with and into iDoc (the “iDoc Merger” and, together with the VSee Merger, the “Mergers”), with iDoc surviving the iDoc Merger as a wholly owned subsidiary of DHAC. At the effective time of the Mergers (the “Effective Time”), DHAC will change its name to VSee Health, Inc. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X of the Securities and Exchange Commission (“SEC”). Certain information or footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the period ended December 31, 2022, as filed with the SEC on April 12, 2023. The interim results for the three and nine months ended September 30, 2023 are not necessarily indicative of the results to be expected for the year ending December 31, 2023 or for any future periods. Principles of Consolidation The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiary. All significant intercompany balances and transactions have been eliminated in consolidation. Liquidity and Going Concern The Company may raise additional capital through loans or additional investments from the Sponsor or its stockholders, officers, directors, or third parties. The Company’s officers and directors and the Sponsor may but are not obligated to (except as described above), loan the Company funds, from time to time, in whatever amount they deem reasonable in their sole discretion, to meet the Company’s working capital needs. Based on the foregoing, the Company believes it will have sufficient working capital and borrowing capacity from the Sponsor or an affiliate of the Sponsor, or certain of the Company directors to meet its needs through the earlier of the consummation of a Business Combination or at least one year from the date that the financial statements were issued. As of September 30, 2023, the Company had a cash balance of $507 and a working capital deficiency of $8,154,992 . In addition, in connection with the Company’s assessment of going concern considerations in accordance with FASB Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” management has determined that the liquidity, mandatory liquidation and subsequent dissolution on February 8, 2024 raises substantial doubt about the Company’s ability to continue as a going concern. No adjustments have been made to the carrying amounts of assets or liabilities of the Company as of September 30, 2023. The Company intends to complete a Business Combination before the mandatory liquidation date or file for an extension. Emerging Growth Company The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, 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 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. Offering Costs Offering costs consisted of legal, accounting, and other expenses incurred through the Initial Public Offering that were directly related to the Initial Public Offering. Offering costs were allocated to the separable financial instruments issued in the Initial Public Offering based on a relative fair value basis, compared to total proceeds received. Offering costs allocated to warrant were allocated to equity. Offering costs associated with the common stock issued were initially charged to temporary equity and then accreted to common stock subject to redemption upon the completion of the Initial Public Offering. Use of Estimates The preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires the Company’s 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 financial statements and the reported amounts of revenues and expenses during the reporting period. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. The most significant accounting estimates were the assumptions used to fair value the PIPE Forward Contract, the Investor Note Derivative and the Bridge Note Bifurcated Derivative. Accordingly, the actual results could differ significantly 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 no t have any cash equivalents as of September 30, 2023 and December 31, 2022. Investments Held in Trust Account At September 30, 2023 and December 31, 2022, the assets held in the Trust Account were held in money market funds, which are invested primarily in U.S. Treasury securities. Common Stock Subject to Possible Redemption The Company accounts for its common stock subject to possible redemption in accordance with the guidance in ASC Topic 480, “Distinguishing Liabilities from Equity.” Common stock subject to mandatory redemption is classified as a liability instrument and is measured at fair value. Conditionally redeemable common stock (including common stock that features 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) is classified in temporary equity. At all other times, common stock is classified as stockholders’ deficit. The Company’s common stock sold in the IPO features certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, at September 30, 2023 and December 31, 2022, common stock subject to possible redemption is presented at redemption value as temporary equity, outside of the stockholders’ deficit section of the Company’s condensed consolidated balance sheets. 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. This method would view the end of the reporting period as if it were also the redemption date for the security. Immediately upon the closing of the Initial Public Offering, increases or decreases in the carrying amount of redeemable common stock are affected by charges against additional paid-in capital and accumulated deficit. At September 30, 2023 and December 31, 2022, the common stock reflected in the condensed consolidated balance sheets is reconciled in the following table: Gross proceeds $ 115,000,000 Less: Proceeds Allocated to Public Warrants (12,483,555) Common stock issuance costs (6,923,767) Plus: Accretion of carrying value to redemption value 21,132,322 Common stock subject to possible redemption, December 31, 2021 116,725,000 Plus: Accretion of carrying value to redemption value 1,142,603 Less: Redemptions (110,472,254) Common stock subject to possible redemption, December 31, 2022 7,395,349 Plus: Accretion of carrying value to redemption value 498,865 Common stock subject to possible redemption, September 30, 2023 $ 7,894,214 Fair Value of Financial Instruments The fair value of the Company’s assets and liabilities, which qualify as financial instruments under FASB ASC 820, “Fair Value Measurements” approximates the carrying amounts represented in the condensed consolidated balance sheets, primarily due to its short-term nature. Income Taxes The Company accounts for income taxes under ASC 740, “Income Taxes.” ASC 740, Income Taxes, requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the unaudited condensed consolidated financial statements 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. ASC 740-270-25-2 requires that an annual effective tax rate be determined, and such annual effective rate applied to year to date income in interim periods under ASC 740-270-30-5. As of September 30, 2023 and December 31, 2022, the Company’s deferred tax asset had a full valuation allowance recorded against it. ASC 740-270-25-2 requires that an annual effective tax rate be determined and such annual effective rate applied to year to date income in interim periods under ASC 740-270-30-5. The Company’s effective tax rate was 0.0% and 11.25% for the three months ended September 30, 2023 and 2022, respectively, the effective tax rate was 0.0% and 4.31% for the nine months ended September 30, 2023 and 2022, respectively. The effective tax rate differs from the statutory tax rate of 21% for the three and nine months ended September 30, 2023 and 2022 due to 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 as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of September 30, 2023 and December 31, 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 taxation 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. Net Income (Loss) per Common Stock The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share.” Net income (loss) per common stock is computed by dividing net income (loss) by the weighted average number of common stocks outstanding for the period. Accretion associated with the redeemable shares of common stock is excluded from net income (loss) per common stock as the redemption value approximates fair value. The calculation of diluted income (loss) per share does not consider the effect of the warrants issued in connection with the (i) Initial Public Offering, and (ii) the private placement (iii) the Bridge and Investor Note Warrants because the exercise of the warrants is contingent upon the occurrence of future events and the inclusion of such warrants would be anti-dilutive. The warrants are exercisable to purchase 12,256,999 common stocks in the aggregate. As of the three and nine months ended September 30, 2023 and 2022, the Company did no t have any dilutive securities or other contracts that could, potentially, be exercised or converted into common stocks and then share in the earnings of the Company. As a result, diluted net income (loss) per common stock is the same as basic net income (loss) per common stock for the periods presented. The following table reflects the calculation of basic and diluted net income (loss) per common stock (in dollars, except per share amounts): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2023 2022 2023 2022 Common Stock Common Stock Common Stock Common Stock Basic and diluted net income (loss) per of common stock Numerator: Allocation of net income (loss), as adjusted $ 78,287 $ (820,759) $ (1,552,805) $ (2,007,578) Denominator: Basic and diluted weighted average shares outstanding, non- redeemable common stock 4,183,123 14,932,000 4,177,427 14,932,000 Basic and diluted net income (loss) per share, non-redeemable common stock $ 0.02 $ (0.05) $ (0.37) $ (0.13) Concentration of Credit Risk The Company has significant cash balances at a financial institutions which throughout the year did not exceed the federally insured limited of $250,000. There was no risk of loss incurred or a lack of access to such funds could have a significant adverse impact on the Company’s financial condition, results of operations, and cash flows. Warrant Instruments The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in FASB ASC 480, “Distinguishing Liabilities from Equity” (“ASC 480”), and ASC 815, “Derivatives and Hedging” (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own common stock, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding. For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. The Company has analyzed the Public Warrants, Private Warrants, Bridge Note Warrants and the Investor Warrants and determined they are considered to be freestanding instruments and do not exhibit any of the characteristics in ASC 480 and therefore are not classified as liabilities under ASC 480. The warrants meet all of the requirements for equity classification under ASC 815 and therefore are classified in equity. Derivative Financial Instruments The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as bifurcated derivatives in accordance with ASC 815. Derivative instruments are recorded at fair value on the grant date and re-valued at each reporting date, with changes in the fair value reported in the statements 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. The Company has determined the PIPE financing agreement is a derivative instrument, the Bridge Note and the Investor Note’s early redemption provisions are embedded feature that are required to be bifurcated as a derivative. FASB ASC 470-20, “Debt with Conversion and Other Options,” addresses the allocation of proceeds from the issuance of debt into its debt and bifurcated derivative components. The Company applies this guidance to allocate the Bridge Note and the Investor Note proceeds between the Bridge Note and the Investor Note, respectively and the respective Bifurcated Derivative, using the residual method by allocating the principal first to fair value of the bifurcated derivative and then to the debt. Fair Value Measurement 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. U.S. 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. Recent Accounting Pronouncements Management does not believe that any recently issued, but not effective, accounting standards, if currently adopted, would have a material effect on the Company’s condensed consolidated financial statements. Risks and Uncertainties Management continues to evaluate the impact of the COVID-19 pandemic and the current wars on the industry and has concluded that while it is reasonably possible that the virus and the war could have a negative effect on the Company’s financial position, results of its operations and/or closing a business combination, the specific impact is not readily determinable as of the date these condensed consolidated financial statements are issued. The condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Inflation Reduction Act of 2022 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 of stock by publicly traded U.S. domestic corporations and certain U.S. domestic subsidiaries of publicly traded foreign corporations occurring on or after January 1, 2023. 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 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. 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. | NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying consolidated financial statements are presented in U.S. dollars and have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the accounting and disclosure rules and regulations of the Securities and Exchange Commission (the “SEC”). Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiary. All significant intercompany balances and transactions have been eliminated in consolidation. Liquidity and Going Concern 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). As of December 31, 2022 and 2021, there were no amounts outstanding under any Working Capital Loans. The Company may raise additional capital through loans or additional investments from the Sponsor or its stockholders, officers, directors, or third parties. The Company’s officers and directors and the Sponsor may but are not obligated to (except as described above), loan the Company funds, from time to time, in whatever amount they deem reasonable in their sole discretion, to meet the Company’s working capital needs. Based on the foregoing, the Company believes it will have sufficient working capital and borrowing capacity from the Sponsor or an affiliate of the Sponsor, or certain of the Company directors to meet its needs through the earlier of the consummation of a Business Combination or at least one year from the date that the financial statements were issued. As of December 31, 2022, the Company had a cash balance of $106,998 and a working capital deficiency of $3,056,596 net of $132,020 of allowable interest withdraws from trust to cover income and franchise taxes. In addition, in connection with the Company’s assessment of going concern considerations in accordance with FASB Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” management has determined that the liquidity, mandatory liquidation and subsequent dissolution raises substantial doubt about the Company’s ability to continue as a going concern. No adjustments have been made to the carrying amounts of assets or liabilities of the Company as of December 31, 2022. The Company intends to complete a Business Combination before the mandatory liquidation date. Emerging Growth Company The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, 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 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. Offering Costs Offering costs consisted of legal, accounting, and other expenses incurred through the Initial Public Offering that were directly related to the Initial Public Offering. Offering costs were allocated to the separable financial instruments issued in the Initial Public Offering based on a relative fair value basis, compared to total proceeds received. Offering costs allocated to warrant were allocated to equity. Offering costs associated with the common stock issued were initially charged to temporary equity and then accreted to common stock subject to redemption upon the completion of the Initial Public Offering. Use of Estimates The preparation of the consolidated financial statements in conformity with U.S. GAAP requires the Company’s 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 financial statements and the reported amounts of revenues and expenses during the reporting period. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. The most significant accounting estimates were the assumptions used to fair value the PIPE Forward Contract and the Bridge Note Bifurcated Derivative. Accordingly, the actual results could differ significantly 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, 2022 and 2021. Investments Held in Trust Account At December 31, 2022 and 2021, the assets held in the Trust Account were held in money market funds, which are invested primarily in U.S. Treasury securities. Common Stock Subject to Possible Redemption The Company accounts for its common stock subject to possible redemption in accordance with the guidance in ASC Topic 480, “Distinguishing Liabilities from Equity.” Common stock subject to mandatory redemption is classified as a liability instrument and is measured at fair value. Conditionally redeemable common stock (including common stock that features 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) is classified in temporary equity. At all other times, common stock is classified as stockholders’ deficit. The Company’s common stock features certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, at December 31, 2022 and 2021, common stock subject to possible redemption is presented at redemption value as temporary equity, outside of the stockholders’ deficit section of the Company’s consolidated balance sheets. 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. This method would view the end of the reporting period as if it were also the redemption date for the security. Immediately upon the closing of the Initial Public Offering, increases or decreases in the carrying amount of redeemable common stock are affected by charges against additional paid-in capital and accumulated deficit. At December 31, 2022 and 2021, the common stock reflected in the consolidated balance sheets is reconciled in the following table: Gross proceeds $ 115,000,000 Less: Proceeds Allocated to Public Warrants (12,483,555) Common stock issuance costs (6,923,767) Plus: Accretion of carrying value to redemption value 21,132,322 Common stock subject to possible redemption, December 31, 2021 116,725,000 Plus: Accretion of carrying value to redemption value 1,142,603 Less: Redemptions (110,472,254) Common stock subject to possible redemption, December 31, 2022 $ 7,395,349 Fair Value of Financial Instruments The fair value of the Company’s assets and liabilities, which qualify as financial instruments under FASB ASC 820, “Fair Value Measurements” approximates the carrying amounts represented in the consolidated balance sheets, primarily due to its short-term nature. Income Taxes The Company follows the asset and liability method of accounting for income taxes under FASB ASC 740, “Income Taxes” (“ASC 740”). Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. The Company accounts for income taxes under ASC 740. ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions 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. The Company’s management determined that the United States is the Company’s major tax jurisdiction. As of December 31, 2022 and 2021, there were no unrecognized tax benefits and no amounts accrued for interest and penalties. 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’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months. Net Loss per Common Stock The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share.” Net loss per common stock is computed by dividing net loss by the weighted average number of common stocks outstanding for the period. This presentation contemplates a Business Combination as the most likely outcome, in which case, both classes of common stocks share pro rata in the loss of the Company. Accretion associated with the redeemable shares of common stock is excluded from net loss per common stock as the redemption value approximates fair value. The calculation of diluted loss per share does not consider the effect of the warrants issued in connection with the (i) Initial Public Offering, (ii) the private placement (iii) the Bridge Warrants because the exercise of the warrants is contingent upon the occurrence of future events and the inclusion of such warrants would be anti-dilutive. The warrants are exercisable to purchase 12,230,913 common stocks in the aggregate. As of December 31, 2022, the Company did not have any dilutive securities or other contracts that could, potentially, be exercised or converted into common stocks and then share in the earnings of the Company. As a result, diluted net loss per common stock is the same as basic net loss per common stock for the periods presented. The following table reflects the calculation of basic and diluted net loss per common stock (in dollars, except per share amounts): For the Period from March 30, 2021 Year Ended (Inception) through December 31, 2022 December 31, 2021 Common Stock Common Stock Basic and diluted net loss per of common stock Numerator: Net loss, as adjusted $ (3,242,501) $ (280,701) Denominator: Basic and diluted weighted average shares outstanding, common stock 12,741,219 3,981,054 Basic and diluted net loss per share, common stock $ (0.25) $ (0.07) Concentration of Credit Risk The Company has significant cash balances at financial institutions which throughout the year regularly exceed the federally insured limit of $250,000. Any loss incurred or a lack of access to such funds could have a significant adverse impact on the Company’s financial condition, results of operations, and cash flows. Warrant Instruments The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in FASB ASC 480, “Distinguishing Liabilities from Equity” (“ASC 480”), and ASC 815, “Derivatives and Hedging” (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own common stock, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding. For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. The Company’s has analyzed the Public Warrants and Private Warrants and determined they are considered to be freestanding instruments and do not exhibit any of the characteristics in ASC 480 and therefore are not classified as liabilities under ASC 480. The warrants meet all of the requirements for equity classification under ASC 815 and therefore are classified in equity. Derivative Financial Instruments The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as bifurcated derivatives in accordance with ASC 815. Derivative instruments are recorded at fair value on the grant date and re-valued at each reporting date, with changes in the fair value reported in the statements 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. The Company has determined the PIPE financing agreement is a derivative instrument and the Bridge Note’s early redemption provision is an embedded feature that is required to be bifurcated as a derivative. FASB ASC 470-20, “Debt with Conversion and Other Options,” addresses the allocation of proceeds from the issuance of debt into its debt and bifurcated derivative components. The Company applies this guidance to allocate the Bridge Note proceeds between the Bridge Note and the Bifurcated Derivative, using the residual method by allocating the principal first to fair value of the bifurcated derivative and then to the debt. Fair Value Measurement 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. U.S. 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. Recent Accounting Pronouncements In August 2020, the FASB issued ASU 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)” (“ASU 2020-06”), to simplify accounting for certain financial instruments. ASU 2020-06 eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity. The new standard also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity’s own equity. ASU 2020-06 amends the diluted earnings per share guidance, including the requirement to use the if-converted method for all convertible instruments. As a smaller reporting company, ASU 2020-06 is effective January 1, 2024 for fiscal years beginning after December 15, 2023 and should be applied on a full or modified retrospective basis, with early adoption permitted beginning on January 1, 2021. The Company is currently assessing the impact, if any, that ASU 2020-06 would have on its financial position, results of operations or cash flows. The Company adopted ASU 2020-06 at inception on March 30, 2021. The adoption of ASU 2020-06 did not have an impact on the Company’s consolidated financial statements. Management does not believe that any recently issued, but not effective, accounting standards, if currently adopted, would have a material effect on the Company’s consolidated financial statements. Risks and Uncertainties 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. Further, the impact of this action and related sanctions on the world economy is not determinable as of the date of these consolidated 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 consolidated financial statements. 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 the consolidated financial statements. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Inflation Reduction Act of 2022 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 of stock by publicly traded U.S. domestic corporations and certain U.S. domestic subsidiaries of publicly traded foreign corporations occurring on or after January 1, 2023. 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 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. 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. |
INITIAL PUBLIC OFFERING
INITIAL PUBLIC OFFERING | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
INITIAL PUBLIC OFFERING | ||
INITIAL PUBLIC OFFERING | NOTE 3. INITIAL PUBLIC OFFERING In the “Initial Public Offering,” the Company sold 11,500,000 units, which includes a full exercise by the underwriters of their over-allotment option in the amount of 1,500,000 Units, at a purchase price of $10.00 per unit. Each unit consists of one common share and one warrant. Each warrant will entitle the holder to purchase one (1) share of common stock at a price of $11.50 per whole share, subject to adjustment (see Note 7). Each warrant will become exercisable 30 days after the completion of the initial Business Combination or 12 months from the closing of this offering and will expire five years after the completion of the initial Business Combination, or earlier upon redemption or liquidation. | NOTE 3. INITIAL PUBLIC OFFERING In the “Initial Public Offering,” the Company sold 11,500,000 units, which includes a full exercise by the underwriters of their over-allotment option in the amount of 1,500,000 Units, at a purchase price of $10.00 per unit. Each unit consists of one common share and one warrant. Each warrant will entitle the holder to purchase one (1) share of common stock at a price of $11.50 per whole share, subject to adjustment (see Note 7). Each warrant will become exercisable 30 days 12 months five years |
PRIVATE PLACEMENT
PRIVATE PLACEMENT | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
PRIVATE PLACEMENT. | ||
PRIVATE PLACEMENT | NOTE 4. PRIVATE PLACEMENT Simultaneously with the closing of the Initial Public Offering, the Sponsor purchased 557,000 units, at $10.00 per unit for a total purchase price of $5,570,000 in a private placement. As of November 8, 2021, the Company received $3,680,000 from the proceeds of the Private Placement and recorded $1,890,000 in subscription receivable. The Sponsor paid the subscription in full on November 12, 2021. The private placement units are identical to the units sold in the Initial Public Offering but are not redeemable. There will be no underwriting fees or commissions with respect to the private placement units. The proceeds from the private placement were added to the proceeds of Initial Public Offering and placed in a Trust Account in the United States maintained by Continental Stock Transfer & Trust Company, as trustee. If the Company does not complete its initial business combination within 21 months (as currently extended and as may be further extended in accordance with the Amended and Restated Certificate of Incorporation), the Sponsor will waive any and all rights and claims to any proceeds and interest thereon in respect to the private placement units and the proceeds from the sale of the private placement units will be included in the liquidating distribution to the holders of the Company’s public shares. The Sponsor, advisors, officers and directors have entered into a letter agreement with the Company, pursuant to which they have agreed to (i) waive their redemption rights with respect to their founder shares and public shares in connection with the completion of the initial Business Combination; (ii) waive their redemption rights with respect to their founder shares and public shares 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 Company’s obligation to allow redemption in connection with the initial Business Combination or to redeem 100% of the Company’s public shares if the Company has not consummated an initial Business Combination within the Combination Period or (B) with respect to any other material provisions relating to stockholders’ rights or pre-initial Business Combination activity; (iii) waive their rights to liquidating distributions from the Trust Account with respect to their founder shares if the Company fails to complete the initial Business Combination within the Combination 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 prescribed time frame; and (iv) vote any founder shares held by them and any public shares purchased during or after the Initial Public Offering (including in open market and privately negotiated transactions) in favor of the initial Business Combination. | NOTE 4. PRIVATE PLACEMENT Simultaneously with the closing of the Initial Public Offering, the Sponsor purchased 557,000 units, at $10.00 per unit for a total purchase price of $5,570,000 in a private placement. As of November 8, 2021, the Company received $3,680,000 from the proceeds of the Private Placement and recorded $1,890,000 in subscription receivable. The Sponsor paid the subscription in full on November 12, 2021. The private placement units are identical to the units sold in the Initial Public Offering. There will be no underwriting fees or commissions with respect to the private placement units. The proceeds from the private placement were added to the proceeds of Initial Public Offering and placed in a Trust Account in the United States maintained by Continental Stock Transfer & Trust Company, as trustee. If the Company does not complete its initial business combination within 18 months The Sponsor, advisors, officers and directors have entered into a letter agreement with the Company, pursuant to which they have agreed to (i) waive their redemption rights with respect to their founder shares and public shares in connection with the completion of the initial Business Combination; (ii) waive their redemption rights with respect to their founder shares and public shares 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 Company’s obligation to allow redemption in connection with the initial Business Combination or to redeem 100% of the Company’s public shares if the Company has not consummated an initial Business Combination within the Combination Period or (B) with respect to any other material provisions relating to stockholders’ rights or pre-initial Business Combination activity; (iii) waive their rights to liquidating distributions from the Trust Account with respect to their founder shares if the Company fails to complete the initial Business Combination within the Combination 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 prescribed time frame; and (iv) vote any founder shares held by them and any public shares purchased during or after the Initial Public Offering (including in open market and privately negotiated transactions) in favor of the initial Business Combination. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
RELATED PARTY TRANSACTIONS | ||
RELATED PARTY TRANSACTIONS | NOTE 5. RELATED PARTY TRANSACTIONS Founder Shares On June 7, 2021, the Sponsor, along with certain of the Company’s directors, officers and advisors purchased 4,312,500 shares for an aggregate purchase price of $25,000 . In October 2021, the Sponsor, officers and certain advisors forfeited an aggregate of 1,437,500 shares of common stock, resulting in 2,875,000 founder shares outstanding. Such shares are referred to herein as “founder shares” or “insider shares”. Sponsor Note Payable On June 7, 2021, the Sponsor agreed to loan the Company up to $625,000 to be used for a portion of the expenses of the Initial Public Offering. These notes were non-interest bearing and any outstanding balance on the notes was due immediately following the Company’s Initial Public Offering. There was an amount of $602,720 borrowed under the Notes. The Notes were repaid on November 12, 2021. Advance from Related Party As of November 8, 2021, the Sponsor paid for $402,936 on expenses on behalf of the Company. The advance was repaid on November 12, 2021. Borrowings under the note are no longer available. The Company owes the Sponsor $138,937 and $43,900 as of September 30, 2023 and December 31, 2022, respectively. Working Capital Loans 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, loan the Company funds as may be required (“Working Capital Loans”). If the Company completes a Business Combination, the Company will repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. Otherwise, the Working Capital Loans would be repaid only out of funds held outside the Trust Account. In the event that a Business Combination does not close, the Company may use a portion of the proceeds held outside the Trust Account to repay the Working Capital Loans, but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. Except for the foregoing, the terms of such Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans. The Working Capital Loans would be repaid upon consummation of a Business Combination, without interest. As of September 30, 2023 and December 31, 2022, the Company had no borrowings under the Working Capital Loans. Promissory Note Related Party On October 26, 2022, the Company issued an unsecured promissory note in the aggregate principal amount of $350,000 to the Sponsor, the Company’s “sponsor.” The Company deposited to the trust account all of the loan amount and extended the amount of time it has available to complete a business combination from November 8, 2022 to February 8, 2023. The promissory note does not bear interest and will be repaid only upon closing of a business combination by the Company. On January 18, 2023, SCS Capital Partners LLC, a stockholder who currently holds more than 5% shares in the Company, issued an unsecured promissory note to the Company, pursuant to which the Company may borrow up to an aggregate principal amount of $250,000 (the “Promissory Note”). The Promissory Note is non-interest bearing and shall be used to pay for general operating expenses. On August 17, 2023, the Promissory Note was amended and restated to increase the principal amount of the note to $565,000 . On May 5, 2023, the Company issued a promissory note to SCS Capital Partners LLC in the aggregate principal amount of $200,000 (the “SCS Note”). The SCS Note bears interest at a rate of 10% per annum and is due and payable on May 5, 2024. Administrative Services Agreement The Company agreed, commencing on November 3, 2021, to pay an affiliate of the Sponsor a total of $10,000 per month for office space and secretarial, administrative, and other services. The monthly fees will cease upon completion of an initial business combination or liquidation. For the three months and nine months ended September 30, 2022, the Company incurred $30,000 and $90,000 , respectively, of which $10,000 is included in accrued expenses in the accompanying condensed consolidated balance sheet as of September 30, 2022. For the three and nine months ended September 30, 2023, the Company incurred $30,000 and $90,000 , of which $31,650 and $73,850 are included in accrued expenses in the accompanying condensed consolidated balance sheets as of September 30, 2023 and December 31, 2022, respectively. The Company will reimburse its officers and directors for any reasonable out-of-pocket business expenses incurred by them in connection with certain activities on the Company’s behalf such as identifying and investigating possible target businesses and business combinations. There is no limit on the amount of out-of-pocket expenses reimbursable by the Company; provided, however, that to the extent such expenses exceed the available proceeds not deposited in the Trust Account and the interest income earned on the amounts held in the Trust Account, such expenses would not be reimbursed by the Company unless the Company consummates an initial business combination. The audit committee will review and approve all reimbursements and payments made to any initial stockholder or member of the management team, or the Company’s or their respective affiliates, and any reimbursements and payments made to members of the audit committee will be reviewed and approved by the Board of Directors, with any interested director abstaining from such review and approval. No compensation or fees of any kind, including finder’s fees, consulting fees or other similar compensation, will be paid to any of the initial stockholders, officers or directors who owned the shares of common stock prior to this offering, or to any of their respective affiliates, prior to or with respect to the Business Combination (regardless of the type of transaction that it is). All ongoing and future transactions between the Company and any of its officers and directors or their respective affiliates will be on terms believed by the Company to be no less favorable to the Company than are available from unaffiliated third parties. Such transactions, including the payment of any compensation, will require prior approval by a majority of the Company’s uninterested “independent” directors (to the extent the Company has any) or the members of the board who do not have an interest in the transaction, in either case who had access, at the Company’s expense, to the Company’s attorneys or independent legal counsel. The Company will not enter into any such transaction unless the Company’s disinterested “independent” directors (or, if there are no “independent” directors, the Company’s disinterested directors) determine that the terms of such transaction are no less favorable to the Company than those that would be available to the Company with respect to such a transaction from unaffiliated third parties. | NOTE 5. RELATED PARTY TRANSACTIONS Founder Shares On June 7, 2021, the Sponsor, along with certain of the Company’s directors, officers and advisors purchased 4,312,500 shares for an aggregate purchase price of $25,000. In October 2021, the Sponsor, officers and certain advisors forfeited an aggregate of 1,437,500 shares of common stock, resulting in 2,875,000 founder shares outstanding. Such shares are referred to herein as “founder shares” or “insider shares”. Sponsor Note Payable On June 7, 2021, the Sponsor agreed to loan the Company up to $625,000 to be used for a portion of the expenses of the Initial Public Offering. These notes were non-interest bearing and any outstanding balance on the notes was due immediately following the Company’s Initial Public Offering. There was an amount of $602,720 borrowed under the Notes. The Notes were repaid on November 12, 2021. Advance from Related Party As of November 8, 2021, the Sponsor paid for $402,936 on expenses on behalf of the Company. The advance was repaid on November 12, 2021. Borrowing under the note are no longer available. On November 12, 2021, the Sponsor advanced an additional $43,900 which remains payable as of December 31, 2022 and 2021. Working Capital Loans 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, loan the Company funds as may be required (“Working Capital Loans”). If the Company completes a Business Combination, the Company will repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. Otherwise, the Working Capital Loans would be repaid only out of funds held outside the Trust Account. In the event that a Business Combination does not close, the Company may use a portion of the proceeds held outside the Trust Account to repay the Working Capital Loans, but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. Except for the foregoing, the terms of such Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans. The Working Capital Loans would be repaid upon consummation of a Business Combination, without interest. As of December 31, 2022 and 2021, the Company had no borrowings under the Working Capital Loans. Promissory Note Related Party On October 26, 2022, the Company issued an unsecured promissory note in the aggregate principal amount of $350,000 to the Sponsor, the Company’s “sponsor.” The Company deposited to the trust account all of the loan amount and extended the amount of time it has available to complete a business combination from November 8, 2022 to February 8, 2023. The promissory note does not bear interest and will be repaid only upon closing of a business combination by the Company. Administrative Services Agreement The Company agreed, commencing on November 3, 2021, to pay an affiliate of the Sponsor a total of $10,000 per month for office space and secretarial, administrative, and other services. The monthly fees will cease upon completion of an initial business combination or liquidation. For the year ended December 31, 2022, the Company incurred $120,000, of which $10,550 is included in accrued expenses in the accompanying consolidated balance sheets as of December 31, 2022. For the period from March 30, 2021 (inception) through December 31, 2021, the Company incurred $20,000 in fees for these services, of which $10,000 is included in accrued expenses in the accompanying balance sheet as of December 31, 2021. The Company will reimburse its officers and directors for any reasonable out-of-pocket business expenses incurred by them in connection with certain activities on the Company’s behalf such as identifying and investigating possible target businesses and business combinations. There is no limit on the amount of out-of-pocket expenses reimbursable by the Company; provided, however, that to the extent such expenses exceed the available proceeds not deposited in the Trust Account and the interest income earned on the amounts held in the Trust Account, such expenses would not be reimbursed by the Company unless the Company consummates an initial business combination. The audit committee will review and approve all reimbursements and payments made to any initial stockholder or member of the management team, or the Company’s or their respective affiliates, and any reimbursements and payments made to members of the audit committee will be reviewed and approved by the Board of Directors, with any interested director abstaining from such review and approval. No compensation or fees of any kind, including finder’s fees, consulting fees or other similar compensation, will be paid to any of the initial stockholders, officers or directors who owned the shares of common stock prior to this offering, or to any of their respective affiliates, prior to or with respect to the Business Combination (regardless of the type of transaction that it is). All ongoing and future transactions between the Company and any of its officers and directors or their respective affiliates will be on terms believed by the Company to be no less favorable to the Company than are available from unaffiliated third parties. Such transactions, including the payment of any compensation, will require prior approval by a majority of the Company’s uninterested “independent” directors (to the extent the Company has any) or the members of the board who do not have an interest in the transaction, in either case who had access, at the Company’s expense, to the Company’s attorneys or independent legal counsel. The Company will not enter into any such transaction unless the Company’s disinterested “independent” directors (or, if there are no “independent” directors, the Company’s disinterested directors) determine that the terms of such transaction are no less favorable to the Company than those that would be available to the Company with respect to such a transaction from unaffiliated third parties. |
COMMITMENTS
COMMITMENTS | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
COMMITMENTS | ||
COMMITMENTS | NOTE 6. COMMITMENTS IPO Registration and Stockholders’ Rights Pursuant to a registration rights agreement entered into on November 3, 2021, the holders of the (i) founder shares, which were issued in a private placement prior to the closing of the Initial Public Offering and (ii) private placement units (including all underlying securities), issued in a private placement simultaneously with the closing of the Initial Public Offering have registration rights to require the Company to register a sale of any of its securities held by them pursuant to a registration rights agreement. These holders are entitled to make up to two demands that the Company registers such securities for sale under the Securities Act. In addition, these holders will have “piggyback” registration rights to include their securities in other registration statements filed by the Company. Underwriters Agreement The Representative is entitled to a deferred underwriting commission of 3.8% of the gross proceeds of the Initial Public Offering held in the Trust Account upon the completion of the Company’s initial Business Combination subject to the terms of the underwriting agreement. The Company executed a Securities Purchase Agreement (the “Series B Securities Purchase Agreement”) dated November 3, 2022 with A.G.P. whereby A.G.P. subscribed for and will purchase, and DHAC will issue and sell, at the closing of the Business Combination, 4,370 shares of Series B Preferred Stock (“Series B Shares”) convertible into shares of DHAC common stock. The purchase price for the Series B Shares will be paid by conversion of A.G.P.’s $4,370,000 deferred underwriting fee into such Series B Shares. The Certificate of Designation of the Series B Preferred Stock establishes the terms and conditions of the Series B Preferred Stock. The Company reviewed the Series B Preferred Stock under ASC 480 and ASC 815 and concluded that Series B Preferred Stock did not include any elements that would preclude them from equity treatment and therefore are not subject to the liability treatment under ASC 480 or derivative guidance under ASC 815. The Business Combination Agreement On June 15, 2022, Digital Health Acquisition Corp (“DHAC”) entered into the Business Combination Agreement, with Merger Sub I, Merger Sub II, VSee and iDoc. On August 9, 2022, DHAC, Merger Sub I, Merger Sub II, VSee and iDoc entered into the First Amended and Restated Business Combination Agreement to provide for the concurrent execution of financing documents for a PIPE consisting of convertible notes and warrants and delivery of the Cassel Salpeter’s opinion to the Board. On October 6, 2022, DHAC, Merger Sub I, Merger Sub II, VSee and iDoc entered into the Business Combination Agreement to make the consideration payable to VSee and iDoc stockholders 100% DHAC common stock and to provide for the concurrent execution of amended PIPE financing documents providing for the issuance of the shares and warrants to the PIPE investor. Pursuant to the terms of the Business Combination Agreement, a business combination by and among DHAC, VSee and iDoc will be effected through the merger of Merger Sub I with and into VSee, with VSee surviving the Merger as a wholly owned subsidiary of DHAC and the merger of Merger Sub II with and into iDoc, with iDoc surviving the Merger as a wholly owned subsidiary of DHAC. The Board of Directors of DHAC (the “Board”) has (i) approved and declared advisable the Business Combination Agreement, the Business Combination and the other transactions contemplated thereby and (ii) resolved to recommend approval of the Business Combination Agreement and related matters by the stockholders of DHAC. The Merger Consideration The Business Combination combined equity value of VSee and iDoc is $ 110 million. At the Closing, each of VSee and iDoc will convert each share of VSee and iDoc capital stock (excluding shares of the holders who perfect rights of appraisal under Delaware or Texas law, as the case may be) into the right to receive the applicable merger consideration as further described below. VSee Merger Consideration The aggregate merger consideration that the holders of VSee Stock as of the Effective Time are entitled to receive in the Business Combination, referred to as the “VSee Closing Consideration,” is an amount equal to (1) $ 60,500,000 , minus (2) an amount equal to the Effective Time Option Grants multiplied by $10 , minus (3) the aggregate amount of VSee’s transaction expenses. “Effective Time Option Grants” refers to the stock options with an exercise price of $10 per share pursuant to the Incentive Plan to the individuals, in the amounts, and on the terms set forth on Exhibit E to the Business Combination Agreement. 100% of the VSee Closing Consideration will be paid in shares of Company Common Stock in accordance with the terms of the Business Combination Agreement and subject to deductions for the VSee Indemnity Escrow Amount as described below. The “VSee Per Share Consideration” refers to a number of shares of Common Stock equal to (a) (1) the VSee Closing Consideration, divided by (2) the total number of VSee Outstanding Shares, divided by (b) 10. “VSee Outstanding Shares” refers to the total number of shares of VSee Common Stock outstanding immediately prior to the Effective Time, expressed on a fully-diluted and as-converted to VSee Common Stock basis, and including, without limitation or duplication, the number of shares of VSee Common Stock issuable upon conversion of the VSee Preferred Stock. “Aggregate Transaction Proceeds” refers to an amount equal to the sum of (i) the aggregate cash proceeds available for release from the Trust Account in connection with the transactions contemplated hereby (after, for the avoidance of doubt, giving effect to all of the redemptions of the Public Shares) and (ii) the Aggregate Closing PIPE Proceeds. iDoc Merger Consideration The aggregate merger consideration that the holders of iDoc Stock as of the Effective Time are entitled to receive in the Business Combination, referred to as the “iDoc Closing Consideration,” is an amount equal to (1) $49,500,000 , minus (2) the aggregate amount of iDoc’s transaction expenses. 100% of the iDoc Closing Consideration will be paid in shares of Company Common Stock in accordance with the terms of the Business Combination Agreement and subject to deductions for the iDoc Indemnity Escrow Amount as described below. The “iDoc Per Share Consideration” refers to a number of shares of Common Stock equal to (a) (1) the iDoc Closing Consideration, divided by (2) the total number of iDoc Outstanding Shares, divided by (b) 10. “iDoc Outstanding Shares” refers to the total number of shares of iDoc Common Stock outstanding immediately prior to the Effective Time, expressed on a fully diluted and as-converted to iDoc Common Stock basis. VSee Health, Inc. Incentive Plan DHAC has agreed to approve and adopt the VSee Health, Inc. 2022 Equity Incentive Plan (the “Incentive Plan”) to be effective as of one day prior to the closing Business Combination and in a form mutually acceptable to DHAC, VSee and iDoc. The Incentive Plan shall provide for an initial aggregate share reserve equal to 15% of the number of shares of DHAC Common Stock outstanding following the closing after giving effect to the Business Combination, including without limitation, the PIPE Financing. Subject to approval of the Incentive Plan by DHAC’s Stockholders, DHAC has agreed to file a Form S-8 Registration Statement with the SEC following the Effective Time with respect to the shares of DHAC Common Stock issuable under the Incentive Plan. Conditions to Closing The obligations of DHAC, VSee and iDoc to consummate the Business Combination are subject to certain closing conditions, including, but not limited to, (i) the expiration or termination of any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, (ii) the approval of DHAC’s stockholders, (iii) the approval of VSee’s stockholders, (iv) the approval of iDoc’s stockholders and (v) the delivery of applicable closing deliverables. In addition, the obligations of VSee and iDoc to consummate the Business Combination are subject to the fulfillment of other closing conditions, including, but not limited to, (i) the approval by the Nasdaq Capital Market of DHAC’s listing application in connection with the Business Combination and (ii) the DHAC board of directors consisting of the number of directors, and comprising the individuals, as contemplated by the Business Combination Agreement. PIPE Securities Purchase Agreement In connection with the execution of the Business Combination Agreement, DHAC executed an Amended and Restated Securities Purchase Agreement (as amended, the “PIPE Securities Purchase Agreement” or “PIPE Forward Contract”) dated October 6, 2022 with certain PIPE Investors whereby the PIPE Investors subscribed for and will purchase, and DHAC will issue and sell, (i) 8,000 shares of Series A Preferred Stock (“Initial PIPE Shares”) convertible into shares of DHAC common stock and (ii) warrants (“Initial PIPE Warrants”) exercisable for 424,000 shares of DHAC Common Stock (such transactions, the “Initial PIPE Financing”) for aggregate proceeds of at least $8,000,000 . The PIPE Securities Purchase Agreement also provides that at any time after the date of the PIPE Securities Purchase Agreement and including (x) with respect to the PIPE Investors’ right to purchase Additional Offering Securities further to an Additional Offering (as each term is defined below) the earlier to occur of (I) the first anniversary of the date of the PIPE Securities Purchase Agreement and (II) the date of the consummation of one or more Subsequent Placements (as defined in the PIPE Securities Purchase Agreement) with the PIPE Investors on terms identical to the PIPE Securities Purchase Agreement and the other PIPE Financing documents in all material respects with an aggregate purchase price of at least $10 million (the “Additional Offering”, and the securities thereof, the “Additional Offering Securities”) and (y) with respect to Buyer’s right to participate in a Subsequent Placement other than an Additional Offering the earlier to occur of (I) the initial date after the Closing that no PIPE Shares remain outstanding, and (II) the date of the consummation of a Subsequent Placement by the Company with gross proceeds, paid in cash, of at least $5,000,000 , in either case, neither the Company nor any of its subsidiaries shall, directly or indirectly, effect any Subsequent Placement unless the Company shall have first complied with the PIPE Investors’ participation right described herein and set forth in the PIPE Securities Purchase Agreement. With respect to (i) Additional Offerings, DHAC is required to offer 100% of the Additional Offering Securities to the PIPE Investors; and (ii) Subsequent Placements, DHAC is required to offer 25% of the Offered Securities to the PIPE Investors. The Aggregate Closing PIPE Proceeds will be a part of the aggregate cash proceeds available for release to DHAC, Merger Sub I, and Merger Sub II in connection with the transactions contemplated by the Business Combination Agreement. The PIPE Warrants are exercisable into shares of DHAC Common Stock at a price of $12.50 per share and expire 5 years from the date of issuance. The PIPE Shares are convertible into shares of DHAC Common Stock at a price of $10.00 per share, subject to certain adjustments. The Certificate of Designation of the Series A Preferred Stock establishes the terms and conditions of the Series A Preferred Stock. The Company reviewed the PIPE Securities Purchase Agreement’s underlying securities under ASC 480 and ASC 815 and concluded that Series Preferred A Stock includes a contingent redemption that would require temporary equity treatment at issuance and the warrants do not have any elements that would preclude them from equity treatment and therefore are not subject to the Derivative guidance under ASC 815. However under ASC 480-10-55-33 a forward contract that permits the holder to purchase redeemable shares (the Series A Preferred Stock) is a liability pursuant to ASC 480 because (1) the forward contract itself is indexed to an underlying share (i.e., the option’s value varies with the fair value of the share) that embodies the issuer’s obligation to repurchase the share and (2) the issuer has a conditional obligation to transfer assets if the shares are put back. Accordingly, the Company determined the fair value of the PIPE Forward Contract and noted the value at the October 6, 2022, the executed date of agreement was zero. As of September 30, 2023, the value of the PIPE Forward Contract was $3,146,694 (see Note 9. Fair Value Measurements for additional disclosure on the PIPE Forward Contract). On April 11, 2023 but effective March 31, 2023, the Company entered into an amendment to the PIPE Securities Purchase Agreement to, among other things, (a) amend and restate the form of Certificate of Designation of the Series A Preferred Stock to provide the aggregate number of shares of Series A Preferred Stock issuable thereunder shall not exceed 15,000 , (b) amend and restate the form of PIPE Warrant to correct an error in the redemption provision of the PIPE Warrants, and (c) revise certain closing conditions for the PIPE Financing. As previously disclosed in its Current Report on Form 8-K filed on April 12, 2023, the Company and each of the PIPE Investors entered into amendments to the PIPE SPA to, among other things, add a closing condition providing that the closing date of the business combination shall occur on or prior to July 10, 2023 (the “Outside Date Closing Condition”). On July 11, 2023, each of the PIPE Investors provided notice to the Company that since the Outside Date Closing Condition was not met, the PIPE Investors were under no obligation to close the PIPE Financing. PIPE Registration Rights Agreement In connection with the closing of the transactions contemplated by the PIPE Securities Purchase Agreement, DHAC and the PIPE Investors will enter into the registration rights agreement (the “PIPE Registration Rights Agreement”). The PIPE Registration Rights Agreement provides the PIPE Investors with customary registration rights with respect to the shares of Common Stock underlying the PIPE Shares and PIPE Warrants issued to the PIPE Investors. Pursuant to the Registration Rights Agreement, DHAC will agree to (i) file a registration statement with the SEC for the registration and resale of a number of shares of DHAC Common Stock at least equal to 200% of the sum of the number of shares of DHAC Common Stock issuable upon conversion of the PIPE Shares and upon exercise of the PIPE Warrants (collectively, the “Registrable Securities”) within 30 days after the closing of the PIPE Securities Purchase Agreement; (ii) to use DHAC’s best efforts to have such registration statement to be declared effective as soon as practicable after the filing thereof, but no later than earlier of (a) the 90 th calendar day (or 120 th calendar day if the SEC notifies the Company that it will “review” the registration statement) and (b) the 2nd business day after the date the Company is notified (orally or in writing, whichever is earlier) by the SEC that the registration statement will not be “reviewed” or will not be subject to further review and (iii) to use DHAC’s best efforts to maintain the effectiveness of such registration statement with respect to the Registrable Securities at all times until the date all of the securities covered hereby can be sold publicly without restriction or limitation under Rule 144 under the Securities Act. On July 11, 2023, each of the PIPE Investors provided notice to the Company that since the Outside Date Closing Condition was not met, the PIPE Investors were under no obligation to close the PIPE Financing. PIPE Lock-Up Agreement Pursuant to the PIPE Securities Purchase Agreement, certain of DHAC’s stockholders will enter into a lock-up agreement (the “PIPE Lock-Up Agreement”) with DHAC. Pursuant to the PIPE Lock-Up Agreement, such stockholders will not (i) sell, offer to sell, contract or agree to sell, hypothecate, pledge, grant any option to purchase, make any short sale or otherwise dispose of or agree to dispose of, directly or indirectly, any shares of DHAC Common Stock or Convertible Securities (as defined in the PIPE Securities Purchase Agreement), or establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Securities and Exchange Act of 1934, as amended and the rules and regulations of the Securities and Exchange Commission promulgated thereunder with respect to any shares of Common Stock or Convertible Securities owned directly by the PIPE Investors (including holding as a custodian) or with respect to which each PIPE Investor has beneficial ownership within the rules and regulations of the Securities and Exchange Commission (collectively, the “PIPE Investor Shares”), or (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any of the PIPE Investor Shares, whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of shares of DHAC Common Stock or other securities, in cash or otherwise, or (iii) make any demand for or exercise any right or cause to be filed a registration statement, including any amendments thereto, with respect to the registration of any shares of DHAC Common Stock or Convertible Securities or (iv) publicly disclose the intention to do any of the foregoing. Under the PIPE Lock-Up Agreement, the PIPE Lock-Up Period means the period beginning on the date of the Lock-Up Agreement and ending on the earliest of (i) eight months after the Closing Date, or (ii) on the trading day after DHAC’s Common Stock exceeds $12.50 (as adjusted for any stock splits, stock dividends, stock combinations recapitalizations and similar events) for a period of twenty consecutive trading days after the Closing Date. On July 11, 2023, each of the PIPE Investors provided notice to the Company that since the Outside Date Closing Condition was not met, the PIPE Investors were under no obligation to close the PIPE Financing. Bridge Securities Purchase Agreement and Bifurcated Derivative On October 6, 2022, in connection with the execution of the Business Combination Agreement, DHAC, VSee and iDoc entered into a Securities Purchase Agreement (the “Bridge Purchase Agreement”) with an accredited investor, who is also an investor in the Sponsor, pursuant to which DHAC, VSee and iDoc each issued and sold to such investor 10% original issue discount senior secured promissory notes due October 5, 2023 in the aggregate principal amount of $ 2,222,222 (the “Bridge Notes”). $888,889 of the Bridge Note was allocated to DHAC. The Bridge Notes will be assumed by DHAC in connection with the closing of the Business Combination. The Bridge Notes bear guaranteed interest at a rate of 10.00% per annum. In connection with the purchase of the Bridge Notes, DHAC issued the investor (i) 173,913 warrants, each representing the right to purchase one share of DHAC common stock at an initial exercise price of $ 11.50 , subject to certain adjustments (the “Bridge Warrants”) and (ii) 30,000 shares of DHAC common stock as additional consideration for the purchase of the Bridge Notes and Bridge Warrants. If the PIPE Financing closes in connection with the closing of the Business Combination, 110% of all unpaid principal under the Bridge Notes and guaranteed interest of 10% are due and payable at the closing of the PIPE Financing. The Company reviewed the warrants and common stock issued in connection with the Securities Purchase agreement under ASC 815 and concluded that the Warrants are not in scope of ASC 480 and are not subject to the Derivative guidance under ASC 815. The Warrants and the Common Stock should be recorded as equity. As such the Principal value of the notes was allocated using the relative fair value basis of all three instruments. As the Warrants were issued with various instruments the purchase price needs to be allocated using the relative fair value method (i.e., warrant at its fair value and the common stock at its fair value the Promissory note at its principal value allocated using the relative fair value of the proceeds received an applied proportionally to the equity classified stock, warrants and Promissory Note). The Company reviewed the contingent early repayment option granted in the Bridge Note under ASC 815 and concluded that as a result of the significant discount granted in the note the contingent repayment provision is therefore considered an embedded derivative that should be bifurcated from the debt host. Accordingly, in accordance with ASC 470-20, the Company allocated the Bridge Note proceeds between the Bridge Note and the Bifurcated Derivative, using the residual method by allocating the principal first to fair value of the embedded derivative and then to the debt. Accordingly, the fair value of the embedded derivative at issuance was $278,404 and the residual value of $610,485 was allocated to the principal balance of the note (see Note 9. Fair Value Measurements for additional disclosure on the derivative). DHAC as a result received cash proceeds of $738,200 net of $61,800 of direct cost attributable to the financing. The warrants and shares issued to investors were analyzed under ASC 815 and noted there were no elements that would preclude equity treatment. As such the Company recorded the fair value of the Bridge Warrants of $8,552 , net of $613 of offering cost allocated based on the relative value basis and Bridge Shares of $284,424 , net of $20,376 of offering cost allocated based on the relative value basis. As a result, of the bifurcated derivative discussed above, the offering cost allocated to the debt, and the value of the share and warrants granted, the Company recorded amortizable debt discount of $443,665 consisting of $40,811 in financing cost allocated to the Bridge Note, $9,165 the issuance date fair value of the Bridge Warrants, $304,800 the fair value of the Bridge Shares and $88,889 originally issued discount. As of September 30, 2023, the Bridge Note net of unamortized debt discount was $692,216 . The Company recognized $332,749 of amortized debt discount and $66,666 in accrued interest for a total Bridge Note interest expense of $399,415 for the nine months ended September 30, 2023. In connection with the Bridge Purchase Agreement, the Company entered into a Registration Rights Agreement with the Bridge investor, dated October 5, 2022, which provides that the Company will file a registration statement to register the shares of Common Stock underlying the Bridge Warrants and the commitment shares. Securities Purchase Agreement and Bifurcated Derivative On May 5, 2023, the Company entered into a securities purchase agreement (the “May 2023 SPA”) with an institutional investor (the “Holder”). Pursuant to the May 2023 SPA, the Company issued the Holder a 16.67% original issue discount promissory note, in favor of the Holder, in the aggregate principal amount of $ 300,000 (the “Investor Note”). The Investor Note bears guaranteed interest at a rate of 10% per annum and is due and payable on May 5, 2024. If the Company’s PIPE financing closes in connection with the closing of its business combination, 110% of all unpaid principal under the Investor Note and guaranteed interest of 10% are due and payable at the closing of the PIPE financing. VSee Lab, Inc., a Delaware corporation (“VSee”) and iDoc Virtual Telehealth Solutions, Inc., a Texas corporation (“iDoc”), guaranteed the Company’s obligations under the May 2023 SPA, the Investor Note and the other transaction documents (the “May 2023 Financing Documents”) pursuant to a Subsidiary Guaranty dated May 5, 2023. The Company’s, VSee’s and iDoc’s obligations to the Holder under the May 2023 Financing Documents are subordinated to the Company’s, VSee’s and iDoc’s obligations to its existing bridge lender. In connection with the May 2023 SPA, the Company issued to the Holder (i) warrants with an exercise period of five years to purchase up to 26,086 shares of the Company’s Common Stock at an exercise price of $11.50 per share (the “Investor Note Warrants”), and (ii) 7,000 shares of the Company’s Common Stock as commitment shares (the “May 2023 Commitment Shares”). The Company also entered into a Registration Rights Agreement with the Holder, dated May 5, 2023 (the “ May 2023 RRA”), which provides that the Company will file a registration statement to register the shares of Common Stock underlying the Investor Note Warrants and the May 2023 Commitment Shares, subject to the terms thereof. The Company reviewed the Investor Note Warrants and May 2023 Commitment Shares issued in connection with the May 2023 SPA under ASC 815 and concluded that the Investor Note Warrants are not in scope of ASC 480 and are not subject to the Derivative guidance under ASC 815. The Investor Note Warrants and the May 2023 Commitment Shares should be recorded as equity. As such the Principal value of the Investor Note was allocated using the relative fair value basis of all three instruments. As the Investor Note Warrants were issued with various instruments the purchase price needs to be allocated using the relative fair value method (i.e., warrant at its fair value and the common stock at its fair value the Promissory note at its principal value allocated using the relative fair value of the proceeds received an applied proportionally to the equity classified stock, warrants and Promissory Note). The Company reviewed the contingent early repayment option granted in the Investor Note under ASC 815 and concluded that as a result of the significant discount granted in the note the contingent repayment provision is therefore considered an embedded derivative that should be bifurcated from the debt host. Accordingly, in accordance with ASC 470-20, the Company allocated the Investor Note proceeds between the Investor Note and the Bifurcated Derivative, using the residual method by allocating the principal first to fair value of the embedded derivative and then to the debt. Accordingly, the fair value of the embedded derivative at issuance was $ 71,755 and the residual value of $ 228,245 was allocated to the principal balance of the note (see Note 9. Fair Value Measurements for additional disclosure on the derivative). DHAC as a result received cash proceeds of $240,000 net of $10,000 of direct cost attributable to the financing. The warrants and shares issued to the Holder were analyzed under ASC 815 and noted there were no elements that would preclude equity treatment. As such the Company recorded the fair value of the Investor Note Warrants of $2,461 , net of $82 of offering cost allocated based on the relative value basis and May 2023 Commitment Shares of $76,102 , net of $2,542 of offering cost allocated based on the relative value basis. As a result, of the bifurcated derivative discussed above, the offering cost allocated to the debt, and the value of the shares and warrants granted, the Company recorded amortizable debt discount of $175,472 consisting of $56,993 in financing cost allocated to the Investor Note, $40,130 the issuance date fair value of the Investor Note Warrants, $78,349 the fair value of the May 2023 Commitment Shares and $50,000 originally issued discount. As of September 30, 2023, the Investor Note net of unamortized debt discount was $182,799 . The Company recognized $70,676 of amortized debt discount and $12,097 in accrued interest for a total Investor Note interest expense of $82,773 for the nine months ended September 30, 2023. In connection with the May 2023 SPA, the Company entered into the May 2023 RRA with the Holder, dated May 5, 2023, which provides that the Company will file a registration statement to register the shares of Common Stock underlying the Investor Note Warrants and the May 2023 Commitment Shares. Backstop Agreement On January 18, 2023 DHAC and the Sponsor, entered into a Backstop Agreement (the “Backstop Agreement”) pursuant to which DHAC agreed to offer on or prior to the closing of the Business Combination the PIPE Investors the option to purchase up to an additional 2,000 shares of Series A Preferred Stock initially convertible into 234,260 shares of DHAC common stock (the “Additional PIPE Shares” and together with the Initial PIPE Shares, the “PIPE Shares”), together with additional warrants to purchase up to 106,000 shares of DHAC common stock (the “Additional PIPE Warrants” and together with the Initial PIPE Warrants, the “PIPE Warrants”; the Additional PIPE Shares and Additional PIPE Warrants are referred to as the “Additional PIPE Securities”) pursuant to a participation right granted to the PIPE Investors under the PIPE Securities Purchase Agreement, in each case, on the same terms and conditions set forth in the PIPE Securities Purchase Agreement for an aggregate purchase price of up to $2,000,000 (such proceeds together with the proceeds from the Initial PIPE Financing, as increased pursuant to the amendment to the Backstop Agreement described below, the “Aggregate Closing PIPE Proceeds”). Pursuant to the Backstop Agreement, if the PIPE Investors do not elect to purchase all of the Additional PIPE Securities, the Sponsor has agreed to purchase any such unsubscribed Additional PIPE Securities concurrent with the closing of the transactions contemplated by the PIPE Securities Purchase Agreement on the same terms and conditions set forth in the PIPE Securities Purchase Agreement. The Backstop Agreement contains customary representations, warranties, and agreements of the Company and the Sponsor and is subject to customary closing conditions and termination rights. If the conditions to the consummation of the Backstop Commitment contemplated by the Backstop Agreement are triggered, the closing of the sale of the Remaining Securities is expected to occur substantially concurrently with the closing of the transactions contemplated by the PIPE SPA. On April 11, 2023 but effective March 31, 2023, the Sponsor and DHAC entered into an amendment to the Backstop Agreement to increase the Additional PIPE Shares that may be purchased pursuant to the Backstop Agreement from 2,000 shares of Series A Preferred Stock to 7,000 shares of Series A Preferred Stock, for an aggregate additional PIPE financing of up to $7,000,000 , increasing the Aggregate Closing PIPE Proceeds to a total of $15,000,000 . Pursuant to the PIPE Securities Purchase Agreement and the Backstop Agreement, each as amended, any purchaser of Additional PIPE Securities will enter into a lock up agreement with the Company pursuant to which such purchaser will agree not to, subject to certain limited exceptions, (i) sell, offer to sell, contract or agree to sell, hypothecate, pledge, grant any option to purchase, make any short sale or otherwise dispose of or agree to dispose of, directly or indirectly, any Additional PIPE Securities, or establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Securities and Exchange Act of 1934, as amended and the rules and regulations of the Securities and Exchange Commission promulgated thereunder with respect to any Additional PIPE Securities owned directly by the purchaser (including holding as a custodian) or with respect to which the purchaser has beneficial ownership within the rules and regulations of the Securities and Exchange Commission, or (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any of the purchaser’s Additional PIPE Securities, whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of shares of DHAC Common Stock or other securities, in cash or otherwise, (3) make any demand for or exercise any right or cause to be filed a registration statement, including any amendments thereto, with respect to the registration of any Additional PIPE Securities or (4) publicly disclose the intention to do any of the foregoing. On July 11, 2023, each of the PIPE Investors provided notice to the Company that since the Outside Date Closing Condition was not met, the PIPE Investors were under no obligation to close the PIPE Financing as such the Backstop | NOTE 6. COMMITMENTS IPO Registration and Stockholders’ Rights Pursuant to a registration rights agreement entered into on November 3, 2021, the holders of the (i) founder shares, which were issued in a private placement prior to the closing of the Initial Public Offering and (ii) private placement units (including all underlying securities), issued in a private placement simultaneously with the closing of the Initial Public Offering have registration rights to require the Company to register a sale of any of its securities held by them pursuant to a registration rights agreement. These holders are entitled to make up to two demands that the Company registers such securities for sale under the Securities Act. In addition, these holders will have “piggyback” registration rights to include their securities in other registration statements filed by the Company. Underwriters Agreement The Representative is entitled to a deferred underwriting commission of 3.8% of the gross proceeds of the Initial Public Offering held in the Trust Account upon the completion of the Company’s initial Business Combination subject to the terms of the underwriting agreement. The Company executed a Securities Purchase Agreement (the “Series B Securities Purchase Agreement”) dated November 3, 2022 with A.G.P. whereby A.G.P. subscribed for and will purchase, and DHAC will issue and sell, at the closing of the Business Combination, 4,370 shares of Series B Preferred Stock (“Series B Shares”) convertible into shares of DHAC common stock. The purchase price for the Series B Shares will be paid by conversion of A.G.P.’s $4,370,000 deferred underwriting fee into such Series B Shares. The Certificate of Designation of the Series B Preferred Stock establishes the terms and conditions of the Series B Preferred Stock. The Company reviewed the Series B Preferred Stock under ASC 480 and ASC 815 and concluded that Series B Preferred Stock did not include any elements that would preclude them from equity treatment and therefore are not subject to the liability treatment under ASC 480 or derivative guidance under ASC 815. The Business Combination Agreement On June 15, 2022, Digital Health Acquisition Corp (“DHAC”) entered into the Business Combination Agreement, with Merger Sub I, Merger Sub II, VSee and iDoc. On August 9, 2022, DHAC, Merger Sub I, Merger Sub II, VSee and iDoc entered into the First Amended and Restated Business Combination Agreement to provide for the concurrent execution of financing documents for a PIPE consisting of convertible notes and warrants and delivery of the Cassel Salpeter’s opinion to the Board. On October 6, 2022, DHAC, Merger Sub I, Merger Sub II, VSee and iDoc entered into the Business Combination Agreement to make the consideration payable to VSee and iDoc stockholders 100% DHAC common stock and to provide for the concurrent execution of amended PIPE Financing documents providing for the issuance of the PIPE Shares and the PIPE Warrants. Pursuant to the terms of the Business Combination Agreement, a business combination by and among DHAC, VSee and iDoc will be effected through the merger of Merger Sub I with and into VSee, with VSee surviving the Merger as a wholly owned subsidiary of DHAC and the merger of Merger Sub II with and into iDoc, with iDoc surviving the Merger as a wholly owned subsidiary of DHAC. The Board of Directors of DHAC (the “Board”) has (i) approved and declared advisable the Business Combination Agreement, the Business Combination and the other transactions contemplated thereby and (ii) resolved to recommend approval of the Business Combination Agreement and related matters by the stockholders of DHAC. The Merger Consideration The Business Combination combined equity value of VSee and iDoc is $110 million. At the Closing, each of VSee and iDoc will convert each share of VSee and iDoc capital stock (excluding shares of the holders who perfect rights of appraisal under Delaware or Texas law, as the case may be) into the right to receive the applicable merger consideration as further described below. VSee Merger Consideration The aggregate merger consideration that the holders of VSee Stock as of the Effective Time are entitled to receive in the Business Combination, referred to as the “VSee Closing Consideration,” is an amount equal to (1) $60,500,000, minus (2) an amount equal to the Effective Time Option Grants multiplied by $10, minus (3) the aggregate amount of VSee’s transaction expenses. “Effective Time Option Grants” refers to the stock options with an exercise price of $10 per share pursuant to the Incentive Plan to the individuals, in the amounts, and on the terms set forth on Exhibit E to the Business Combination Agreement. 100% of the VSee Closing Consideration will be paid in shares of Company Common Stock in accordance with the terms of the Business Combination Agreement and subject to deductions for the VSee Indemnity Escrow Amount as described below. The “VSee Per Share Consideration” refers to a number of shares of Common Stock equal to (a) (1) the VSee Closing Consideration, divided by (2) the total number of VSee Outstanding Shares, divided by (b) 10. “VSee Outstanding Shares” refers to the total number of shares of VSee Common Stock outstanding immediately prior to the Effective Time, expressed on a fully-diluted and as-converted to VSee Common Stock basis, and including, without limitation or duplication, the number of shares of VSee Common Stock issuable upon conversion of the VSee Preferred Stock. “Aggregate Transaction Proceeds” refers to an amount equal to the sum of (i) the aggregate cash proceeds available for release from the Trust Account in connection with the transactions contemplated hereby (after, for the avoidance of doubt, giving effect to all of the redemptions of the Public Shares) and (ii) the Aggregate Closing PIPE Proceeds. iDoc Merger Consideration The aggregate merger consideration that the holders of iDoc Stock as of the Effective Time are entitled to receive in the Business Combination, referred to as the “iDoc Closing Consideration,” is an amount equal to (1) $49,500,000, minus (2) the aggregate amount of iDoc’s transaction expenses. 100% of the iDoc Closing Consideration will be paid in shares of Company Common Stock in accordance with the terms of the Business Combination Agreement and subject to deductions for the iDoc Indemnity Escrow Amount as described below. The “iDoc Per Share Consideration” refers to a number of shares of Common Stock equal to (a) (1) the iDoc Closing Consideration, divided by (2) the total number of iDoc Outstanding Shares, divided by (b) 10. “iDoc Outstanding Shares” refers to the total number of shares of iDoc Common Stock outstanding immediately prior to the Effective Time, expressed on a fully diluted and as-converted to iDoc Common Stock basis. VSee Health, Inc. Incentive Plan DHAC has agreed to approve and adopt the VSee Health, Inc. 2022 Equity Incentive Plan (the “Incentive Plan”) to be effective as of one day prior to the closing Business Combination and in a form mutually acceptable to DHAC, VSee and iDoc. The Incentive Plan shall provide for an initial aggregate share reserve equal to 15% of the number of shares of DHAC Common Stock outstanding following the closing after giving effect to the Business Combination, including without limitation, the PIPE Financing. Subject to approval of the Incentive Plan by DHAC’s Stockholders, DHAC has agreed to file a Form S-8 Registration Statement with the SEC following the Effective Time with respect to the shares of DHAC Common Stock issuable under the Incentive Plan. Conditions to Closing The obligations of DHAC, VSee and iDoc to consummate the Business Combination are subject to certain closing conditions, including, but not limited to, (i) the expiration or termination of any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, (ii) the approval of DHAC’s stockholders, (iii) the approval of VSee’s stockholders, (iv) the approval of iDoc’s stockholders and (v) after giving effect to the transactions contemplated by the Business Combination Agreement, including the PIPE Financing, DHAC having at least $5,000,001 of net tangible assets immediately after the Effective Time and (vi) the delivery of applicable closing deliverables. In addition, the obligations of VSee and iDoc to consummate the Business Combination are subject to the fulfillment of other closing conditions, including, but not limited to, (i) the approval by the Nasdaq Capital Market of DHAC’s listing application in connection with the Business Combination and (ii) the DHAC board of directors consisting of the number of directors, and comprising the individuals, as contemplated by the Business Combination Agreement. PIPE Securities Purchase Agreement In connection with the execution of the Business Combination Agreement, DHAC executed an Amended and Restated Securities Purchase Agreement (as amended, the “PIPE Securities Purchase Agreement” or “PIPE Forward Contract”) dated October 6, 2022 with certain PIPE Investors whereby the PIPE Investors subscribed for and will purchase, and DHAC will issue and sell, (i) 8,000 shares of Series A Preferred Stock (“Initial PIPE Shares”) convertible into shares of DHAC common stock and (ii) warrants (“Initial PIPE Warrants”) exercisable for 424,000 shares of DHAC Common Stock (such transactions, the “Initial PIPE Financing”) for aggregate proceeds of at least $8,000,000. The PIPE Securities Purchase Agreement also provides that at any time after the date of the PIPE Securities Purchase Agreement and including (x) with respect to the PIPE Investors’ right to purchase Additional Offering Securities further to an Additional Offering (as each term is defined below) the earlier to occur of (I) the first anniversary of the date of the PIPE Securities Purchase Agreement and (II) the date of the consummation of one or more Subsequent Placements (as defined in the PIPE Securities Purchase Agreement) with the PIPE Investors on terms identical to the PIPE Securities Purchase Agreement and the other PIPE Financing documents in all material respects with an aggregate purchase price of at least $10 million (the “Additional Offering”, and the securities thereof, the “Additional Offering Securities”) and (y) with respect to Buyer’s right to participate in a Subsequent Placement other than an Additional Offering the earlier to occur of (I) the initial date after the Closing that no PIPE Shares remain outstanding, and (II) the date of the consummation of a Subsequent Placement by the Company with gross proceeds, paid in cash, of at least $5,000,000, in either case, neither the Company nor any of its subsidiaries shall, directly or indirectly, effect any Subsequent Placement unless the Company shall have first complied with the PIPE Investors’ participation right described herein and set forth in the PIPE Securities Purchase Agreement. With respect to (i) Additional Offerings, DHAC is required to offer 100% of the Additional Offering Securities to the PIPE Investors; and (ii) Subsequent Placements, DHAC is required to offer 25% of the Offered Securities to the PIPE Investors. The Aggregate Closing PIPE Proceeds will be a part of the aggregate cash proceeds available for release to DHAC, Merger Sub I, and Merger Sub II in connection with the transactions contemplated by the Business Combination Agreement. The PIPE Warrants are exercisable into shares of DHAC Common Stock at a price of $12.50 per share and expire 5 years from the date of issuance. The PIPE Shares are convertible into shares of DHAC Common Stock at a price of $10.00 per share, subject to certain adjustments. The Certificate of Designation of the Series A Preferred Stock establishes the terms and conditions of the Series A Preferred Stock. The Company reviewed the PIPE Securities Purchase Agreement’s underlying securities under ASC 480 and ASC 815 and concluded that Series Preferred A Stock includes a contingent redemption that would require temporary equity treatment at issuance and the warrants do not have any elements that would preclude them from equity treatment and therefore are not subject to the Derivative guidance under ASC 815. However under ASC 480-10-55-33 a forward contract that permits the holder to purchase redeemable shares (the Series A Preferred Stock) is a liability pursuant to ASC 480 because (1) the forward contract itself is indexed to an underlying share (i.e., the option’s value varies with the fair value of the share) that embodies the issuer’s obligation to repurchase the share and (2) the issuer has a conditional obligation to transfer assets if the shares are put back. Accordingly, the Company determined the fair value of the PIPE Forward Contract and noted the value at the October 6, 2022, the executed date of agreement was zero. As of December 31, 2022, the value of the PIPE Forward Contract was $84,605 (see Note 10. Fair Value Measurements for additional disclosure on the PIPE Forward Contract). PIPE Registration Rights Agreement In connection with the closing of the transactions contemplated by the PIPE Securities Purchase Agreement, DHAC and the PIPE Investors will enter into the registration rights agreement (the “PIPE Registration Rights Agreement”). The PIPE Registration Rights Agreement provides the PIPE Investors with customary registration rights with respect to the shares of Common Stock underlying the PIPE Shares and PIPE Warrants issued to the PIPE Investors. Pursuant to the Registration Rights Agreement, DHAC will agree to (i) file a registration statement with the SEC for the registration and resale of a number of shares of DHAC Common Stock at least equal to 200% of the sum of the number of shares of DHAC Common Stock issuable upon conversion of the PIPE Shares and upon exercise of the PIPE Warrants (collectively, the “Registrable Securities”) within 30 days after the closing of the PIPE Securities Purchase Agreement; (ii) to use DHAC’s best efforts to have such registration statement to be declared effective as soon as practicable after the filing thereof, but no later than earlier of (a) the 90th calendar day (or 120th calendar day if the SEC notifies the Company that it will “review” the registration statement) and (b) the 2nd business day after the date the Company is notified (orally or in writing, whichever is earlier) by the SEC that the registration statement will not be “reviewed” or will not be subject to further review and (iii) to use DHAC’s best efforts to maintain the effectiveness of such registration statement with respect to the Registrable Securities at all times until the date all of the securities covered hereby can be sold publicly without restriction or limitation under Rule 144 under the Securities Act. PIPE Lock-Up Agreement Pursuant to the PIPE Securities Purchase Agreement, certain of DHAC’s stockholders will enter into a lock-up agreement (the “PIPE Lock-Up Agreement”) with DHAC. Pursuant to the PIPE Lock-Up Agreement, such stockholders will not (i) sell, offer to sell, contract or agree to sell, hypothecate, pledge, grant any option to purchase, make any short sale or otherwise dispose of or agree to dispose of, directly or indirectly, any shares of DHAC Common Stock or Convertible Securities (as defined in the PIPE Securities Purchase Agreement), or establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Securities and Exchange Act of 1934, as amended and the rules and regulations of the Securities and Exchange Commission promulgated thereunder with respect to any shares of Common Stock or Convertible Securities owned directly by the PIPE Investors (including holding as a custodian) or with respect to which each PIPE Investor has beneficial ownership within the rules and regulations of the Securities and Exchange Commission (collectively, the “PIPE Investor Shares”), or (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any of the PIPE Investor Shares, whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of shares of DHAC Common Stock or other securities, in cash or otherwise, or (iii) make any demand for or exercise any right or cause to be filed a registration statement, including any amendments thereto, with respect to the registration of any shares of DHAC Common Stock or Convertible Securities or (iv) publicly disclose the intention to do any of the foregoing. Under the PIPE Lock-Up Agreement, the PIPE Lock-Up Period means the period beginning on the date of the Lock-Up Agreement and ending on the earliest of (i) eight months after the Closing Date, or (ii) on the trading day after DHAC’s Common Stock exceeds $12.50 (as adjusted for any stock splits, stock dividends, stock combinations recapitalizations and similar events) for a period of twenty consecutive trading days after the Closing Date. Bridge Securities Purchase Agreement and Bifurcated Derivative On October 6, 2022, in connection with the execution of the Business Combination Agreement, DHAC, VSee and iDoc entered into a Securities Purchase Agreement (the “Bridge Purchase Agreement”) with an accredited investor, who is also an investor in the Sponsor, pursuant to which DHAC, VSee and iDoc each issued and sold to such investor 10% original issue discount senior secured promissory notes due October 5, 2023 in the aggregate principal amount of $2,222,222 (the “Bridge Notes”). $888,889 of the Bridge Note was allocated to DHAC. The Bridge Notes will be assumed by DHAC in connection with the closing of the Business Combination. The Bridge Notes bear guaranteed interest at a rate of 10.00% per annum. In connection with the purchase of the Bridge Notes, DHAC issued the investor (i) 173,913 warrants, each representing the right to purchase one share of DHAC common stock at an initial exercise price of $11.50, subject to certain adjustments (the “Bridge Warrants”) and (ii) 30,000 shares of DHAC common stock as additional consideration for the purchase of the Bridge Notes and Bridge Warrants. If the PIPE Financing closes in connection with the closing of the Business Combination, 110% of all unpaid principal under the Bridge Notes and guaranteed interest of 10% are due and payable at the closing of the PIPE Financing. The Company reviewed the warrants and common stock issued in connection with the Securities Purchase agreement under ASC 815 and concluded that the Warrants are not in scope of ASC 480 and are not subject to the Derivative guidance under ASC 815. The Warrants and the Common Stock should be recorded as equity. As such the Principal value of the notes was allocated using the relative fair value basis of all three instruments. As the Warrants were issued with various instruments the purchase price needs to be allocated using the relative fair value method (i.e., warrant at its fair value and the common stock at its fair value the Promissory note at its principal value allocated using the relative fair value of the proceeds received an applied proportionally to the equity classified stock, warrants and Promissory Note). The Company reviewed the contingent early repayment option granted in the Bridge Note under ASC 815 and concluded that as a result of the significant discount granted in the note the contingent repayment provision is therefore considered an embedded derivative that should be bifurcated from the debt host. Accordingly, in accordance with ASC 470-20, the Company allocated the Bridge Note proceeds between the Bridge Note and the Bifurcated Derivative, using the residual method by allocating the principal first to fair value of the embedded derivative and then to the debt. Accordingly, the fair value of the embedded derivative at issuance was $278,404 and the residual value of $610,485 was allocated to the principal balance of the note (see Note 10. Fair Value Measurements for additional disclosure on the derivative). DHAC as a result received cash proceeds of $738,200 net of $61,800 of direct cost attributable to the financing. The warrants and shares issued to investors were analyzed under ASC 815 and noted there were no elements that would preclude equity treatment. As such the Company recorded the fair value of the Bridge Warrants of $8,552, net of $613 of offering cost allocated based on the relative value basis and Bridge Shares of $284,424, net of $20,376 of offering cost allocated based on the relative value basis. As a result, of the bifurcated derivative discussed above, the offering cost allocated to the debt, and the value of the share and warrants granted, the Company recorded amortizable debt discount of $443,665 consisting of $40,811 in financing cost allocated to the Bridge Note, $9,165 the issuance date fair value of the Bridge Warrants, $304,800 the fair value of the Bridge Shares and $88,889 originally issued discount. As of December 31, 2022, the Bridge Note net of unamortized debt discount was $292,800. The Company recognized $104,953 of amortized debt discount and $21,027 in accrued interest for a total Bridge Note interest expense of $125,980. In connection with the Bridge Purchase Agreement, the Company entered into a Registration Rights Agreement with the Bridge investor, dated October 5, 2022, which provides that the Company will file a registration statement to register the shares of Common Stock underlying the Bridge Warrants and the commitment shares. Legal Claims On September 26, 2022, the Company was notified of a lawsuit filed against the Company. The plaintiff’s claims arose out of an alleged breach of a purported employment agreement with iDoc and VSee that was to become DHAC’s obligation at the closing of the business combination, and the plaintiff’s alleged wrongful termination related thereto. The plaintiff sought unpaid compensation, back and front pay, compensatory damages, unreimbursed business expenses, an award equal to alleged promised stock, an award of prejudgment and post judgment interest, punitive damages, and taxable costs and reasonable attorneys’ fees. The lawsuit is currently pending before the Superior Court of the State of Arizona in and for the County of Maricopa. The parties began engaging in settlement discussions shortly after the complaint was served. The Company has not appeared in the action, but denies liability. On February 1, 2023, the parties came to a global resolution and executed a confidential settlement agreement. On February 3, 2023, Plaintiff’s counsel filed a notice of settlement with the court, requesting that the matter be placed on the inactive calendar for at least 30 days to allow the parties time to effectuate the terms of the settlement agreement. The parties filed a stipulation to dismiss the entire case with prejudice on April 7, 2023. |
STOCKHOLDERS' DEFICIT
STOCKHOLDERS' DEFICIT | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
STOCKHOLDERS' DEFICIT | ||
STOCKHOLDERS' DEFICIT | NOTE 7. STOCKHOLDERS’ DEFICIT Common Shares The Company is authorized to issue 50,000,000 of common shares with a par value of $0.0001 per share. On June 7, 2021, the Sponsor, along with certain of the Company’s directors, officers and advisors purchased 4,312,500 shares for an aggregate purchase price of $25,000 . In October 2021, the Sponsor, officers and certain advisors forfeited an aggregate of 1,437,500 shares of common stock, resulting in 2,875,000 founder shares outstanding. At the closing of the Initial Public Offering, 557,000 shares were issued as part of the Private Placement sale. On October 6, 2022 in connection with the Bridge Purchase Agreement 30,000 shares were issued to the Bridge Financing investor. In February 2023, 20,000 shares were issued to an additional stockholder. On May 5, 2023 in connection with the May 2023 SPA, 7,000 shares were issued to the investor. As of September 30, 2023 and December 31, 2022, there were 3,489,000 and 3,462,000 , respectively, common shares issued and outstanding , excluding 694,123 , respectively, shares subject to redemption which were classified outside of permanent deficit on the condensed consolidated balance sheets. The holders of record of the Company’s common stock are entitled to one vote for each share held on all matters to be voted on by stockholders. In connection with any vote held to approve the Company’s initial business combination, the initial stockholders, insiders, officers and directors, have agreed to vote their respective shares of common stock owned by them immediately prior to this offering, including both the insider shares and any shares acquired in this offering or following this offering in the open market, in favor of the proposed business combination. Pursuant to the amended and restated certificate of incorporation, if the Company does not consummate its initial business combination within 21 months from the closing of this offering (as currently extended and as may be further extended in accordance with the Amended and Restated Certificate of Incorporation), it 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 100% of the outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the remaining stockholders and the board of directors, dissolve and liquidate, subject (in the case of (ii) and (iii) above) to the Company’s obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. The Company’s insiders have agreed to waive their rights to share in any distribution with respect to their insider shares. The stockholders have no conversion, preemptive or other subscription rights and there are no sinking fund or redemption provisions applicable to the shares of common stock, except that public stockholders have the right to sell their shares to the Company in any tender offer or have their shares of common stock converted to cash equal to their pro rata share of the Trust Account if they vote on the proposed business combination and the business combination is completed. If the Company holds a stockholder vote to amend any provisions of the certificate of incorporation relating to stockholders’ rights or pre-business combination activity (including the substance or timing within which it has to complete a business combination), it will provide its public stockholders with the opportunity to redeem their shares of common stock upon approval of any such amendment 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 its franchise and income taxes, divided by the number of then outstanding public shares, in connection with any such vote. In either of such events, converting stockholders would be paid their pro rata portion of the Trust Account promptly following consummation of the business combination or the approval of the amendment to the certificate of incorporation. If the business combination is not consummated or the amendment is not approved, stockholders will not be paid such amounts. | NOTE 7. STOCKHOLDERS’ DEFICIT Common Shares The Company is authorized to issue 50,000,000 of common shares with a par value of $0.0001 per share. On June 7, 2021, the Sponsor, along with certain of the Company’s directors, officers and advisors purchased 4,312,500 shares for an aggregate purchase price of $25,000. In October 2021, the Sponsor, officers and certain advisors forfeited an aggregate of 1,437,500 shares of common stock, resulting in 2,875,000 founder shares outstanding. At the closing of the Initial Public Offering, 557,000 shares were issued as part of the Private Placement sale. On October 6, 2022 in connection with the Bridge Purchase Agreement 30,000 shares were issued to the Bridge Financing investor. As of December 31, 2022 and 2021, there were 3,462,000 and 3,432,000, respectively, common shares issued and outstanding, excluding 694,123 and 11,500,000, respectively, shares subject to redemption which were classified outside of permanent equity on the consolidated balance sheets. The holders of record of the Company’s common stock are entitled to one vote for each share held on all matters to be voted on by stockholders. In connection with any vote held to approve the Company’s initial business combination, the initial stockholders, insiders, officers and directors, have agreed to vote their respective shares of common stock owned by them immediately prior to this offering, including both the insider shares and any shares acquired in this offering or following this offering in the open market, in favor of the proposed business combination. The Company will consummate its initial business combination only if it has net tangible assets of at least $5,000,001 and a majority of the outstanding shares of common stock voted are voted in favor of the business combination. Pursuant to the amended and restated certificate of incorporation, if the Company does not consummate its initial business combination within 18 months from the closing of this offering (as currently extended and as may be further extended in accordance with the Amended and Restated Certificate of Incorporation), it will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten The stockholders have no conversion, preemptive or other subscription rights and there are no sinking fund or redemption provisions applicable to the shares of common stock, except that public stockholders have the right to sell their shares to the Company in any tender offer or have their shares of common stock converted to cash equal to their pro rata share of the Trust Account if they vote on the proposed business combination and the business combination is completed. If the Company holds a stockholder vote to amend any provisions of the certificate of incorporation relating to stockholders’ rights or pre-business combination activity (including the substance or timing within which it has to complete a business combination), it will provide its public stockholders with the opportunity to redeem their shares of common stock upon approval of any such amendment 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 its franchise and income taxes, divided by the number of then outstanding public shares, in connection with any such vote. In either of such events, converting stockholders would be paid their pro rata portion of the Trust Account promptly following consummation of the business combination or the approval of the amendment to the certificate of incorporation. If the business combination is not consummated or the amendment is not approved, stockholders will not be paid such amounts. |
WARRANTS
WARRANTS | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
WARRANTS | ||
WARRANTS | NOTE 8. WARRANTS Initial Public Offering Warrants There are 12,057,000 warrants issued and outstanding as of September 30, 2023 and December 31, 2022 issued in connection with the Initial Public Offering. Each warrant entitles the registered holder to purchase one (1) share of common stock at a price of $11.50 per whole share, subject to adjustment as discussed below, at any time commencing on the later of 30 days after the completion of an initial business combination or 12 months from the closing of the Initial Public Offering. However, no warrants will be exercisable for cash unless the Company has an effective and current registration statement covering the shares of common stock issuable upon exercise of the warrants and a current prospectus relating to such shares of common stock. Notwithstanding the foregoing, if a registration statement covering the shares of common stock issuable upon exercise of the public warrants is not effective within a specified period following the consummation of the initial business combination, warrant holders may, until such time as there is an effective registration statement and during any period when the Company shall have failed to maintain an effective registration statement, exercise warrants on a cashless basis pursuant to the exemption provided by Section 3(a)(9) of the Securities Act, provided that such exemption is available. If that exemption, or another exemption, is not available, holders will not be able to exercise their warrants on a cashless basis. In the event of such cashless exercise, each holder would pay the exercise price by surrendering the warrants for that number of shares of common stock equal to the quotient obtained by dividing (x) the product of the number of shares of common stock underlying the warrants, multiplied by the difference between the exercise price of the warrants and the “fair market value” (defined below) by (y) the fair market value. The “fair market value” for this purpose will mean the average reported last sale price of the shares of common stock for the 5 trading days ending on the trading day prior to the date of exercise. The warrants will expire on the fifth anniversary of the completion of an initial business combination, at 5:00 p.m., New York City time, or earlier upon redemption or liquidation. The Private Placement Warrants is identical to the warrants underlying the units in the Initial Public Offering. The Company may call the warrants for redemption, in whole and not in part, at a price of $0.01 per warrant, ● at any time after the warrants become exercisable; ● upon not less than 30 days ’ prior written notice of redemption to each warrant holder; ● if, and only if, the reported last sale price of the shares of common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations and recapitalizations), for any 20 trading days within a 30 trading day period commencing at any time after the warrants become exercisable and ending on the third business day prior to the notice of redemption to warrant holders; and ● if, and only if, there is a current registration statement in effect with respect to the shares of common stock underlying such warrants. The right to exercise will be forfeited unless the warrants are exercised prior to the date specified in the notice of redemption. On and after the redemption date, a record holder of a warrant will have no further rights except to receive the redemption price for such holder’s warrant upon surrender of such warrant. The redemption criteria for the warrants have been established at a price which is intended to provide warrant holders a reasonable premium to the initial exercise price and provide a sufficient differential between the then-prevailing share price and the warrant exercise price so that if the share price declines as a result of the redemption call, the redemption will not cause the share price to drop below the exercise price of the warrants. If the Company calls the warrants for redemption as described above, the Company’s management will have the option to require all holders that wish to exercise warrants to do so on a “cashless basis.” In such event, each holder would pay the exercise price by surrendering the warrants for that number of shares of common stock equal to the quotient obtained by dividing (x) the product of the number of shares of common stock underlying the warrants, multiplied by the difference between the exercise price of the warrants and the “fair market value” (defined below) by (y) the fair market value. The “fair market value” for this purpose shall mean the average reported last sale price of the shares of common stock for the 5 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. The warrants were issued in registered form under a warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and the Company. The warrant agreement provides that the terms of the warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective provision or to make any other change that does not adversely affect the interests of the registered holders. For any other change, the warrant agreement requires the approval by the holders of at least a majority of the then outstanding public warrants if such amendment is undertaken prior to or in connection with the consummation of a business combination or at least a majority of the then outstanding warrants if the amendment is undertaken after the consummation of a business combination. The exercise price and number of shares of common stock issuable on exercise of the warrants may be adjusted in certain circumstances including in the event of a stock dividend, extraordinary dividend or recapitalization, reorganization, merger or consolidation. However, except as described below, the warrants will not be adjusted for issuances of shares of common stock at a price below their respective exercise prices. If (x) the Company issues additional shares of common stock or equity-linked securities for capital raising purposes in connection with the closing of the initial business combination at an issue price or effective issue price of less than $9.20 per share of common stock (with such issue price or effective issue price to be determined in good faith by the board of directors, and in the case of any such issuance to the Company’s Sponsor, initial stockholders or their affiliates, without taking into account any founders’ shares held by them prior to such issuance), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of the initial business combination on the date of the consummation of the initial business combination (net of redemptions), and (z) the Market Value is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the greater of (i) the Market Value or (ii) the price at which the Company issue the additional shares of common stock or equity-linked securities and the $18.00 per share redemption trigger price described above will be adjusted (to the nearest cent) to be equal to 180% of the Market Value. The warrants may be exercised upon surrender of the warrant certificate on or prior to the expiration date at the offices of the warrant agent, with the exercise form on the reverse side of the warrant certificate completed and executed as indicated, accompanied by full payment of the exercise price, by certified or official bank check payable to the Company, for the number of warrants being exercised. The warrant holders do not have the rights or privileges of holders of shares of common stock and any voting rights until they exercise their warrants and receive shares of common stock. After the issuance of shares of common stock upon exercise of the warrants, each holder will be entitled to one vote for each share held of record on all matters to be voted on by stockholders. Warrant holders may elect to be subject to a restriction on the exercise of their warrants such that an electing warrant holder would not be able to exercise their warrants to the extent that, after giving effect to such exercise, such holder would beneficially own in excess of 9.8% of the shares of common stock outstanding. No fractional shares will be issued upon exercise of the warrants. If, upon exercise of the warrants, a holder would be entitled to receive a fractional interest in a share, the Company will, upon exercise, round up to the nearest whole number the number of shares of common stock to be issued to the warrant holder. Bridge Warrants On October 6, 2022, 173,913 warrants were issued pursuant to the Bridge Purchase Agreement. The purchase right represented by the Bridge Warrants shall terminate on or before 5:30 p.m., Pacific Time, on the date five years from the date of issuance (the “Expiration Date”). The exercise price at which the Bridge Warrants may be exercised shall be $11.50 per share of Common Stock. If at any time after the date of issuance of the Bridge Warrants there is no effective registration statement available for the resale of shares of Common Stock held by the holder, the Bridge Warrants may be exercised by cashless exercise. In lieu of any fractional share to which the holder would otherwise be entitled, the Company shall make a cash payment equal to the Exercise Price multiplied by such fraction. Except as provided in the Bridge Warrant, the Bridge Warrant does not entitle its holder to any rights of a stockholder of the Company. During the term the Bridge Warrants are exercisable, the Company will reserve from its authorized and unissued Common Stock a sufficient number of shares to provide for the issuance of Common Stock upon the exercise of the Bridge Warrant and, from time to time, will take all steps necessary to amend its Certificate of Incorporation to provide sufficient reserves of shares of Common Stock issuable upon exercise of the Bridge Warrants. All shares that may be issued upon the exercise of rights represented by the Bridge Warrants and payment of the Exercise Price will be free from all taxes, liens and charges in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously or otherwise specified in the Bridge Warrants). Prior to the Expiration Date, the Exercise Price and the number of shares of Common Stock purchasable upon the exercise of the Bridge Warrants are subject to adjustment from time to time upon the occurrence of any of the following events: (a) In the event that the Company shall at any time after the date of issuance of the Bridge Warrants (i) declare a dividend on Common Stock in shares or other securities of the Company, (ii) split or subdivide the outstanding Common Stock, (iii) combine the outstanding Common Stock into a smaller number of shares, or (iv) issue by reclassification of its Common Stock any shares or other securities of the Company, then, in each such event, the Exercise Price in effect at the time shall be adjusted so that the holder shall be entitled to receive the kind and number of such shares or other securities of the Company which the holder would have owned or have been entitled to receive after the happening of any of the events described above had such Bridge Warrant been exercised immediately prior to the happening of such event (or any record date with respect thereto). (b) No adjustment in the number of shares of Common Stock receivable upon exercise of the Bridge Warrant shall be required unless such adjustment would require an increase or decrease of at least 0.1% in the aggregate number of shares of Common Stock purchasable upon exercise of all Bridge Warrants; provided that any adjustments which are not required to be made shall be carried forward and taken into account in any subsequent adjustment. (c) If at any time, as a result of an adjustment, the holder of any Bridge Warrant thereafter exercised shall become entitled to receive any shares of the Company other than shares of Common Stock, thereafter the number of such other shares so receivable upon exercise of any Bridge Warrant shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the Common Stock receivable upon execution of the Bridge Warrant. (d) Whenever the Exercise Price payable upon exercise of each Bridge Warrant is adjusted, the Warrant Shares shall be adjusted by multiplying the number of shares of Common Stock receivable upon execution of the Bridge Warrant immediately prior to such adjustment by a fraction, the numerator of which shall be the Exercise Price in effect immediately prior to such adjustment, and the denominator of which shall be the Exercise Price as adjusted. (e) In the event of any capital reorganization of the Company, or of any reclassification of the Common Stock, or in case of the consolidation of the Company with or the merger of the Company with or into any other corporation or of the sale of the properties and assets of the Company as, or substantially as, an entirety to any other corporation, each Bridge Warrant shall, after such capital reorganization, reclassification of Common Stock, consolidation, merger or sale, and in lieu of being exercisable for shares of Common Stock of the Company, be exercisable, upon the terms and conditions specified in the Bridge Warrant, for the number of shares of stock or other securities or assets to which holder of the number of shares of Common Stock purchasable upon exercisable of such Bridge Warrant immediately prior to such capital organization, reclassification of Common Stock, consolidation, merger or sale would have been entitled upon such capital organization, reclassification of Common Stock, consolidation, merger or sale. The Company shall not effect any such consolidation, merger or sale, unless prior to or simultaneously with the consummation thereof, the successor corporation (if other than the Company) resulting from such consolidation or merger or the corporation purchasing such assets or the appropriate corporation or entity shall assume, by written instrument, the obligation to deliver to holder of each Bridge Warrant the shares of stock, securities or assets to which, in accordance with the foregoing provisions, such holder may be entitled and all other obligations of the Company under the Bridge Warrant. (f) If the Company in any manner issues or sells or enters into any agreement to issue or sell, any Common Stock, options or convertible securities (any such securities, “Variable Price Securities”) after the issuance of the Bridge Warrants that are issuable pursuant to such agreement or convertible into or exchangeable or exercisable for shares of Common Stock at a price which varies or may vary with the market price of the shares of Common Stock, including by way of one or more reset(s) to a fixed price, but exclusive of such formulations reflecting customary anti-dilution provisions (such as share splits, share combinations, share dividends and similar transactions) (each of the formulations for such variable price being herein referred to as, the “Variable Price”), the Company shall provide notice thereof to the holder on the date of such agreement and the issuance of such convertible securities or options. From and after the date the Company enters into such agreement or issues any such Variable Price Securities, the holder shall have the right, but not the obligation, in its sole discretion to substitute the Variable Price for the Exercise Price upon exercise of the Bridge Warrant by designating in the exercise form delivered upon any exercise of the Bridge Warrant that solely for purposes of such exercise the holder is relying on the Variable Price rather than the Exercise Price then in effect. (g) In case any event shall occur as to which the other provisions above are not strictly applicable or the failure to make any adjustment would result in an unfair enlargement or dilution of the purchase rights represented by the Bridge Warrants in accordance with the essential intent and principles hereof, then, in each such case, the independent auditors of the Company shall give an opinion as to the adjustment, if any, on a basis consistent with the essential intent and principles above, necessary to preserve, without enlargement or dilution, the purchase rights presented by the Bridge Warrants. Upon receipt of such opinion, the Company shall promptly make the adjustment described therein. The Bridge Warrants are governed by, and construed in accordance with, the laws of the State of Delaware, without regard to principles of conflicts of law. The Company and the holders of the Bridge Warrants consent to the exclusive jurisdiction of the federal courts of the United States sitting in Delaware. Investor Note Warrants On May 5, 2023, the Company issued 26,086 warrants pursuant to the Investor Note SPA. The purchase right represented by the Investor Note Warrants shall terminate on the date five years from the date of issuance (the “Expiration Date”). The exercise price at which the Investor Note Warrants may be exercised shall be $11.50 per share of Common Stock. If at any time after the date of issuance of the Investor Note Warrants there is no effective registration statement available for the resale of shares of Common Stock held by the holder, the Investor Note Warrants may be exercised by cashless exercise. In lieu of any fractional share to which the holder would otherwise be entitled, the Company shall make a cash payment equal to the exercise price multiplied by such fraction. Except as provided in the Investor Note Warrant, the Investor Note Warrant does not entitle its holder to any rights of a stockholder of the Company. During the term the May 2023 Warrants are exercisable, the Company will reserve from its authorized and unissued Common Stock a sufficient number of shares to provide for the issuance of Common Stock upon the exercise of the May 2023 Warrant and, from time to time, will take all steps necessary to amend its Certificate of Incorporation to provide sufficient reserves of shares of Common Stock issuable upon exercise of the Investor Note Warrants. All shares that may be issued upon the exercise of rights represented by the Investor Note Warrants and payment of the exercise price will be free from all taxes, liens and charges in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously or otherwise specified in the Investor Note Warrants). Prior to the Expiration Date, the exercise price and the number of shares of Common Stock purchasable upon the exercise of the Investor Note Warrants are subject to adjustment from time to time upon the occurrence of any of the following events: (a) In the event that the Company shall at any time after the date of issuance of the Investor Note Warrants (i) declare a dividend on Common Stock in shares or other securities of the Company, (ii) split or subdivide the outstanding Common Stock, (iii) combine the outstanding Common Stock into a smaller number of shares, or (iv) issue by reclassification of its Common Stock any shares or other securities of the Company, then, in each such event, the exercise price in effect at the time shall be adjusted so that the holder shall be entitled to receive the kind and number of such shares or other securities of the Company which the holder would have owned or have been entitled to receive after the happening of any of the events described above had such Investor Note Warrant been exercised immediately prior to the happening of such event (or any record date with respect thereto). (b) No adjustment in the number of shares of Common Stock receivable upon exercise of the Investor Note Warrants shall be required unless such adjustment would require an increase or decrease of at least 0.1% in the aggregate number of shares of Common Stock purchasable upon exercise of all Investor Note Warrants; provided that any adjustments which are not required to be made shall be carried forward and taken into account in any subsequent adjustment. (c) If at any time, as a result of an adjustment, the holder of any Investor Note Warrant thereafter exercised shall become entitled to receive any shares of the Company other than shares of Common Stock, thereafter the number of such other shares so receivable upon exercise of any Investor Note Warrant shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the Common Stock receivable upon execution of the Investor Note Warrant. (d) Whenever the exercise price payable upon exercise of each Investor Note Warrant is adjusted, the Investor Note Warrant shares shall be adjusted by multiplying the number of shares of Common Stock receivable upon execution of the Investor Note Warrant immediately prior to such adjustment by a fraction, the numerator of which shall be the exercise price in effect immediately prior to such adjustment, and the denominator of which shall be the exercise price as adjusted. (e) In the event of any capital reorganization of the Company, or of any reclassification of the Common Stock, or in case of the consolidation of the Company with or the merger of the Company with or into any other corporation or of the sale of the properties and assets of the Company as, or substantially as, an entirety to any other corporation, each Investor Note Warrant shall, after such capital reorganization, reclassification of Common Stock, consolidation, merger or sale, and in lieu of being exercisable for shares of Common Stock of the Company, be exercisable, upon the terms and conditions specified in the Investor Note Warrant, for the number of shares of stock or other securities or assets to which holder of the number of shares of Common Stock purchasable upon exercisable of such Investor Note Warrant immediately prior to such capital organization, reclassification of Common Stock, consolidation, merger or sale would have been entitled upon such capital organization, reclassification of Common Stock, consolidation, merger or sale. The Company shall not effect any such consolidation, merger or sale, unless prior to or simultaneously with the consummation thereof, the successor corporation (if other than the Company) resulting from such consolidation or merger or the corporation purchasing such assets or the appropriate corporation or entity shall assume, by written instrument, the obligation to deliver to holder of each Investor Note Warrant the shares of stock, securities or assets to which, in accordance with the foregoing provisions, such holder may be entitled and all other obligations of the Company under the Investor Note Warrant. (f) If the Company in any manner issues or sells or enters into any agreement to issue or sell, any Common Stock, options or convertible securities (any such securities, “Variable Price Securities”) after the issuance of the Investor Note Warrants that are issuable pursuant to such agreement or convertible into or exchangeable or exercisable for shares of Common Stock at a price which varies or may vary with the market price of the shares of Common Stock, including by way of one or more reset(s) to a fixed price, but exclusive of such formulations reflecting customary anti-dilution provisions (such as share splits, share combinations, share dividends and similar transactions) (each of the formulations for such variable price being herein referred to as, the “Variable Price”), the Company shall provide notice thereof to the holder on the date of such agreement and the issuance of such convertible securities or options. From and after the date the Company enters into such agreement or issues any such Variable Price Securities, the holder shall have the right, but not the obligation, in its sole discretion to substitute the Variable Price for the exercise price upon exercise of the Investor Note Warrant by designating in the exercise form delivered upon any exercise of the Investor Note Warrant that solely for purposes of such exercise the holder is relying on the Variable Price rather than the exercise price then in effect. (g) In case any event shall occur as to which the other provisions above are not strictly applicable or the failure to make any adjustment would result in an unfair enlargement or dilution of the purchase rights represented by the Investor Note Warrants in accordance with the essential intent and principles hereof, then, in each such case, the independent auditors of the Company shall give an opinion as to the adjustment, if any, on a basis consistent with the essential intent and principles above, necessary to preserve, without enlargement or dilution, the purchase rights presented by the Investor Note Warrants. Upon receipt of such opinion, the Company shall promptly make the adjustment described therein. The Investor Note Warrants are governed by, and construed in accordance with, the laws of the State of Delaware, without regard to principles of conflicts of law. The Company and the holders of the Investor Note Warrants consent to the exclusive jurisdiction of the federal courts of the United States sitting in Delaware. | NOTE 8. WARRANTS Initial Public Offering Warrants There are 12,057,000 warrants issued and outstanding as of December 31, 2022 and 2021 issued in connection with the Initial Public Offering. Each warrant entitles the registered holder to purchase one (1) share of common stock at a price of $11.50 per whole share, subject to adjustment as discussed below, at any time commencing on the later of 30 days after the completion of an initial business combination or 12 months from the closing of the Initial Public Offering. However, no warrants will be exercisable for cash unless the Company has an effective and current registration statement covering the shares of common stock issuable upon exercise of the warrants and a current prospectus relating to such shares of common stock. Notwithstanding the foregoing, if a registration statement covering the shares of common stock issuable upon exercise of the public warrants is not effective within a specified period following the consummation of the initial business combination, warrant holders may, until such time as there is an effective registration statement and during any period when the Company shall have failed to maintain an effective registration statement, exercise warrants on a cashless basis pursuant to the exemption provided by Section 3(a)(9) of the Securities Act, provided that such exemption is available. If that exemption, or another exemption, is not available, holders will not be able to exercise their warrants on a cashless basis. In the event of such cashless exercise, each holder would pay the exercise price by surrendering the warrants for that number of shares of common stock equal to the quotient obtained by dividing (x) the product of the number of shares of common stock underlying the warrants, multiplied by the difference between the exercise price of the warrants and the “fair market value” (defined below) by (y) the fair market value. The “fair market value” for this purpose will mean the average reported last sale price of the shares of common stock for the 5 trading days ending on the trading day prior to the date of exercise. The warrants will expire on the fifth The Private Placement Warrants is identical to the warrants underlying the units in the Initial Public Offering. The Company may call the warrants for redemption, in whole and not in part, at a price of $0.01 per warrant, ● at any time after the warrants become exercisable; ● upon not less than 30 days ’ prior written notice of redemption to each warrant holder; ● if, and only if, the reported last sale price of the shares of common stock equals or exceeds $ 18.00 per share (as adjusted for stock splits, stock dividends, reorganizations and recapitalizations), for any 20 trading days within a 30 trading day period commencing at any time after the warrants become exercisable and ending on the third business day prior to the notice of redemption to warrant holders; and ● if, and only if, there is a current registration statement in effect with respect to the shares of common stock underlying such warrants. The right to exercise will be forfeited unless the warrants are exercised prior to the date specified in the notice of redemption. On and after the redemption date, a record holder of a warrant will have no further rights except to receive the redemption price for such holder’s warrant upon surrender of such warrant. The redemption criteria for the warrants have been established at a price which is intended to provide warrant holders a reasonable premium to the initial exercise price and provide a sufficient differential between the then-prevailing share price and the warrant exercise price so that if the share price declines as a result of the redemption call, the redemption will not cause the share price to drop below the exercise price of the warrants. If the Company call the warrants for redemption as described above, the Company’s management will have the option to require all holders that wish to exercise warrants to do so on a “cashless basis.” In such event, each holder would pay the exercise price by surrendering the warrants for that number of shares of common stock equal to the quotient obtained by dividing (x) the product of the number of shares of common stock underlying the warrants, multiplied by the difference between the exercise price of the warrants and the “fair market value” (defined below) by (y) the fair market value. The “fair market value” for this purpose shall mean the average reported last sale price of the shares of common stock for the 5 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. The warrants were issued in registered form under a warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and the Company. The warrant agreement provides that the terms of the warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective provision or to make any other change that does not adversely affect the interests of the registered holders. For any other change, the warrant agreement requires the approval by the holders of at least a majority of the then outstanding public warrants if such amendment is undertaken prior to or in connection with the consummation of a business combination or at least a majority of the then outstanding warrants if the amendment is undertaken after the consummation of a business combination. The exercise price and number of shares of common stock issuable on exercise of the warrants may be adjusted in certain circumstances including in the event of a stock dividend, extraordinary dividend or recapitalization, reorganization, merger or consolidation. However, except as described below, the warrants will not be adjusted for issuances of shares of common stock at a price below their respective exercise prices. If (x) the Company issues additional shares of common stock or equity-linked securities for capital raising purposes in connection with the closing of the initial business combination at an issue price or effective issue price of less than $9.20 per share of common stock (with such issue price or effective issue price to be determined in good faith by the board of directors, and in the case of any such issuance to the Company’s Sponsor, initial stockholders or their affiliates, without taking into account any founders’ shares held by them prior to such issuance), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of the initial business combination on the date of the consummation of the initial business combination (net of redemptions), and (z) the Market Value is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the greater of (i) the Market Value or (ii) the price at which the Company issue the additional shares of common stock or equity-linked securities and the $18.00 per share redemption trigger price described above will be adjusted (to the nearest cent) to be equal to 180% of the Market Value. The warrants may be exercised upon surrender of the warrant certificate on or prior to the expiration date at the offices of the warrant agent, with the exercise form on the reverse side of the warrant certificate completed and executed as indicated, accompanied by full payment of the exercise price, by certified or official bank check payable to the Company, for the number of warrants being exercised. The warrant holders do not have the rights or privileges of holders of shares of common stock and any voting rights until they exercise their warrants and receive shares of common stock. After the issuance of shares of common stock upon exercise of the warrants, each holder will be entitled to one vote for each share held of record on all matters to be voted on by stockholders. Warrant holders may elect to be subject to a restriction on the exercise of their warrants such that an electing warrant holder would not be able to exercise their warrants to the extent that, after giving effect to such exercise, such holder would beneficially own in excess of 9.8% of the shares of common stock outstanding. No fractional shares will be issued upon exercise of the warrants. If, upon exercise of the warrants, a holder would be entitled to receive a fractional interest in a share, the Company will, upon exercise, round up to the nearest whole number the number of shares of common stock to be issued to the warrant holder. Bridge Warrants On October 6, 2022, 173,913 warrants were issued pursuant to the Bridge Purchase Agreement. The purchase right represented by the Bridge Warrants shall terminate on or before 5:30 p.m., Pacific Time, on the date five years from the date of issuance (the “Expiration Date”). The exercise price at which the Bridge Warrants may be exercised shall be $11.50 per share of Common Stock. If at any time after the date of issuance of the Bridge Warrants there is no effective registration statement available for the resale of shares of Common Stock held by the holder, the Bridge Warrants may be exercised by cashless exercise. In lieu of any fractional share to which the holder would otherwise be entitled, the Company shall make a cash payment equal to the Exercise Price multiplied by such fraction. Except as provided in the Bridge Warrant, the Bridge Warrant does not entitle its holder to any rights of a stockholder of the Company. During the term the Bridge Warrants are exercisable, the Company will reserve from its authorized and unissued Common Stock a sufficient number of shares to provide for the issuance of Common Stock upon the exercise of the Bridge Warrant and, from time to time, will take all steps necessary to amend its Certificate of Incorporation to provide sufficient reserves of shares of Common Stock issuable upon exercise of the Bridge Warrants. All shares that may be issued upon the exercise of rights represented by the Bridge Warrants and payment of the Exercise Price will be free from all taxes, liens and charges in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously or otherwise specified in the Bridge Warrants). Prior to the Expiration Date, the Exercise Price and the number of shares of Common Stock purchasable upon the exercise of the Bridge Warrants are subject to adjustment from time to time upon the occurrence of any of the following events: (a) In the event that the Company shall at any time after the date of issuance of the Bridge Warrants (i) declare a dividend on Common Stock in shares or other securities of the Company, (ii) split or subdivide the outstanding Common Stock, (iii) combine the outstanding Common Stock into a smaller number of shares, or (iv) issue by reclassification of its Common Stock any shares or other securities of the Company, then, in each such event, the Exercise Price in effect at the time shall be adjusted so that the holder shall be entitled to receive the kind and number of such shares or other securities of the Company which the holder would have owned or have been entitled to receive after the happening of any of the events described above had such Bridge Warrant been exercised immediately prior to the happening of such event (or any record date with respect thereto). (b) No adjustment in the number of shares of Common Stock receivable upon exercise of the Bridge Warrant shall be required unless such adjustment would require an increase or decrease of at least 0.1% in the aggregate number of shares of Common Stock purchasable upon exercise of all Bridge Warrants; provided that any adjustments which are not required to be made shall be carried forward and taken into account in any subsequent adjustment. (c) If at any time, as a result of an adjustment, the holder of any Bridge Warrant thereafter exercised shall become entitled to receive any shares of the Company other than shares of Common Stock, thereafter the number of such other shares so receivable upon exercise of any Bridge Warrant shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the Common Stock receivable upon execution of the Bridge Warrant. (d) Whenever the Exercise Price payable upon exercise of each Bridge Warrant is adjusted, the Warrant Shares shall be adjusted by multiplying the number of shares of Common Stock receivable upon execution of the Bridge Warrant immediately prior to such adjustment by a fraction, the numerator of which shall be the Exercise Price in effect immediately prior to such adjustment, and the denominator of which shall be the Exercise Price as adjusted. (e) In the event of any capital reorganization of the Company, or of any reclassification of the Common Stock, or in case of the consolidation of the Company with or the merger of the Company with or into any other corporation or of the sale of the properties and assets of the Company as, or substantially as, an entirety to any other corporation, each Bridge Warrant shall, after such capital reorganization, reclassification of Common Stock, consolidation, merger or sale, and in lieu of being exercisable for shares of Common Stock of the Company, be exercisable, upon the terms and conditions specified in the Bridge Warrant, for the number of shares of stock or other securities or assets to which holder of the number of shares of Common Stock purchasable upon exercisable of such Bridge Warrant immediately prior to such capital organization, reclassification of Common Stock, consolidation, merger or sale would have been entitled upon such capital organization, reclassification of Common Stock, consolidation, merger or sale. The Company shall not effect any such consolidation, merger or sale, unless prior to or simultaneously with the consummation thereof, the successor corporation (if other than the Company) resulting from such consolidation or merger or the corporation purchasing such assets or the appropriate corporation or entity shall assume, by written instrument, the obligation to deliver to holder of each Bridge Warrant the shares of stock, securities or assets to which, in accordance with the foregoing provisions, such holder may be entitled and all other obligations of the Company under the Bridge Warrant. (f) If the Company in any manner issues or sells or enters into any agreement to issue or sell, any Common Stock, options or convertible securities (any such securities, “Variable Price Securities”) after the issuance of the Bridge Warrants that are issuable pursuant to such agreement or convertible into or exchangeable or exercisable for shares of Common Stock at a price which varies or may vary with the market price of the shares of Common Stock, including by way of one or more reset(s) to a fixed price, but exclusive of such formulations reflecting customary anti-dilution provisions (such as share splits, share combinations, share dividends and similar transactions) (each of the formulations for such variable price being herein referred to as, the “Variable Price”), the Company shall provide notice thereof to the holder on the date of such agreement and the issuance of such convertible securities or options. From and after the date the Company enters into such agreement or issues any such Variable Price Securities, the holder shall have the right, but not the obligation, in its sole discretion to substitute the Variable Price for the Exercise Price upon exercise of the Bridge Warrant by designating in the exercise form delivered upon any exercise of the Bridge Warrant that solely for purposes of such exercise the holder is relying on the Variable Price rather than the Exercise Price then in effect. (g) In case any event shall occur as to which the other provisions above are not strictly applicable or the failure to make any adjustment would result in an unfair enlargement or dilution of the purchase rights represented by the Bridge Warrants in accordance with the essential intent and principles hereof, then, in each such case, the independent auditors of the Company shall give an opinion as to the adjustment, if any, on a basis consistent with the essential intent and principles above, necessary to preserve, without enlargement or dilution, the purchase rights presented by the Bridge Warrants. Upon receipt of such opinion, the Company shall promptly make the adjustment described therein. The Bridge Warrants are governed by, and construed in accordance with, the laws of the State of Delaware, without regard to principles of conflicts of law. The Company and the holders of the Bridge Warrants consent to the exclusive jurisdiction of the federal courts of the United States sitting in Delaware. |
INCOME TAX
INCOME TAX | 12 Months Ended |
Dec. 31, 2022 | |
INCOME TAX | |
INCOME TAX | NOTE 9. INCOME TAX The Company did not have any significant deferred tax assets or liabilities as of December 31, 2022 and 2021. The Company’s net deferred tax assets are as follows: December 31, December 31, 2022 2021 Deferred tax assets Net operating loss carryforward $ (379) $ 5,846 Start-up/organization Expenses 962,297 60,961 Total deferred tax assets 961,918 66,807 Valuation allowance (961,918) (66,807) Deferred tax assets, net of allowance $ — $ — The income tax provision consists of the following: For the Period from March 30, 2021 (Inception) For the Year Ended Through December 31, December 31, 2022 2021 Federal Current $ 187,225 $ — Deferred (741,805) (58,947) State Current — — Deferred (153,306) (7,860) Change in valuation allowance 895,111 66,807 Income tax provision $ 187,225 $ — As of December 31, 2022 and 2021, the Company has $0 and $24,565 of U.S. federal and state net operating loss carryovers available to offset future taxable income, respectively. 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, 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 year ended December 31, 2022 and for the period from March 30, 2021 (inception) through December 31, 2021, the change in the valuation allowance was $895,111 and $66,807, respectively. A reconciliation of the federal income tax rate to the Company’s effective tax rate at December 31, 2022 and 2021 is as follows: For the Period from March 30, 2021 (Inception) For the Year Ended Through December 31, December 31, 2022 2021 Statutory federal income tax rate 21.0 % 21.0 % State taxes, net of federal tax benefit 4.3 % 2.8 % Change in fair value of Bridge Note- bifurcated derivative (0.7) % 0.0 % Change in fair value of PIPE forward contract derivative (1.4) % 0.0 % Change in valuation allowance (29.3) % (23.8) % Income tax provision (6.1) % 0.0 % The Company files income tax returns in the U.S. federal jurisdiction and in various state and local jurisdictions and is subject to examination by the various taxing authorities. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
FAIR VALUE MEASUREMENTS | ||
FAIR VALUE MEASUREMENTS | NOTE 9. FAIR VALUE MEASUREMENTS The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities: The Company classifies its U.S. Treasury and equivalent securities 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 U.S. Treasury securities are recorded at amortized cost on the accompanying balance sheets and adjusted for the amortization or accretion of premiums or discounts. On September 30, 2023, assets held in the Trust Account were comprised of $8,119,642 in money market funds. During the three and nine months ended September 30, 2023, the Company did withdrew an amount of $59,586 from the Trust Account to pay tax obligations. On December 31, 2022, assets held in the Trust Account were comprised of $7,527,369 in money market funds. During the year ended December 31, 2022, the Company withdrew $110,472,254 as a result of an aggregate of 10,805,877 shares of common stock redeemed on October 20, 2022 and the Company did not withdraw any interest income from the Trust Account. The following table presents information about the Company’s assets that are measured at fair value on a recurring basis on September 30, 2023 and December 31, 2022 and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value. The fair value of securities held in the Trust on September 30, 2023 and December 31, 2022 are as follows: Fair Trading Securities Level Value September 30, 2023 Money Market Funds 1 $ 8,119,642 Fair Trading Securities Level Value December 31, 2022 Money Market Funds 1 $ 7,527,369 The following table presents fair value information as of September 30, 2023 and December 31, 2022 of the Company’s financial liabilities that were 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. September 30, 2023 Fair Value (Level 1) (Level 2) (Level 3) Liabilities: Investor Note – Bifurcated Derivative $ 22,805 $ — $ — $ 22,805 Bridge Note – Bifurcated Derivative $ 241,447 $ — $ — $ 241,447 December 31, 2022 Fair Value (Level 1) (Level 2) (Level 3) Liabilities: PIPE Forward Contract $ 170,666 $ — $ — $ 170,666 Bridge Note – Bifurcated Derivative $ 364,711 $ — $ — $ 364,711 Bridge Note Investor Note Forward – Bifurcated – Bifurcated Contract Derivative Derivative Fair value as of December 31, 2022 $ 170,666 $ 364,711 $ — Change in valuation inputs or other assumptions 1,163,950 (34,758) — Fair value as of March 31, 2023 (unaudited) $ 1,334,616 $ 329,953 $ — Initial value of Investor Note – Bifurcated Derivative May 5, 2023 — — 24,502 Change in valuation inputs or other assumptions (634,110) (117,344) 3,099 Fair value as of June 30, 2023 (unaudited) $ 700,506 $ 212,609 $ 27,601 Change in valuation inputs or other assumptions (700,506) 28,838 (4,796) Fair value as of September 30, 2023 (unaudited) $ — $ 241,447 $ 22,805 Measurement Bridge Note Bifurcated Derivative The Company established the initial fair value for the Bridge Note Bifurcated Derivative as of October 5, 2022, which was the date the Bridge Note was executed. On December 31, 2022 the fair value was remeasured. As such, the Company used a Probability Weighted Expected Return Method (“PWERM”) that fair values the early termination/repayment features of the debt. The PWERM is a multi-step process in which value is estimated based on the probability-weighted present value of various future outcomes. The PWERM was used to value the Bridge Note Bifurcated Derivative for the initial periods and subsequent measurement periods. The Bridge Note Bifurcated Derivative was classified within Level 3 of the fair value hierarchy at the initial measurement dates and as of September 30, 2023 and December 31, 2022 due to the use of unobservable inputs. The key inputs into the Monte Carlo simulation model for the Bridge Note Bifurcated Derivative were as follows at September 30, 2023 and December 31, 2022: September 30, 2023 December 31, 2022 CCC bond rates 13.31 % 15.09 % Probability of early termination/repayment – business combination not completed 5 % 5 % Probability of early termination/repayment – business combination completed, or PIPE completed 80 % 95 % Probability of completing a business combination by March 31, 2023 — % 50 % Probability of completing a business combination by June 30, 2023 — % 50 % Probability of completing a business combination by December 31, 2023 80 % — % Investor Note Bifurcated Derivative The Company established the initial fair value for the Investor Note Bifurcated Derivative as of May 5, 2023, which was the date the Investor Note was executed. On September 30, 2023 the fair value was remeasured. As such, the Company used a Discounted Cash Flow model (“DCF”) that fair values the early termination/repayment features of the debt. The DCF was used to value the Investor Note Bifurcated Derivative for the initial periods and subsequent measurement periods. The Investor Note Bifurcated Derivative was classified within Level 3 of the fair value hierarchy at the initial measurement dates and as of May 5, 2023 and September 30, 2023 due to the use of unobservable inputs. The key inputs into the DCF model for the Investor Note Bifurcated Derivative were as follows at May 5, 2023, initial value and at September 30, 2023: September 30, 2023 May 5, 2023 Risk-free interest rate 5.53 % 5.12 % Expected term (years) 0.25 0.38 Probability of completing a business combination by August 30, 2023 — % 25 % Probability of completing a business combination by September 30, 2023 20 % 75 % Probability of completing a business combination by December 31, 2023 80 % — % PIPE Forward Contract The Company established the initial fair value for the PIPE Forward Contract as of October 6, 2022, which was the date of the PIPE Securities Purchase Agreement was executed. On December 31, 2022 the fair value was remeasured. As such, the Company utilizing a PWERM. The PWERM is a multistep process in which value is estimated based on the probability-weighted present value of various future outcomes to value the PIPE Forward Contract for the initial periods and subsequent measurement periods. The PIPE Forward Contract was classified within Level 3 of the fair value hierarchy at the initial measurement dates and as of December 31, 2022 due to the use of unobservable inputs. As a result of the termination of the PIPE Forward Contract on July 11, 2023, the PIPE Forward Contract was derecognized. The key inputs into the PWERM for the PIPE Forward Contract were as follows at December 31, 2022: December 31, 2022 Risk-free interest rate 4.76 % Expected term (years) 0.37 Probability of completing a business combination 95 % The change in the fair value of the Level 3 financial liabilities for the period from contract inception through December 31, 2022 is summarized as follows: PIPE Bridge Note Investor Note Forward Bifurcated Bifurcated Contract Derivative Derivative Fair value at December 31, 2022 $ 170,666 $ 364,711 $ — Initial value of Investor Note – Bifurcated Derivative May 5, 2023 — — 24,502 Change in fair value (170,666) (123,265) (1,697) Fair value at September 30, 2023 $ — $ 241,447 $ 22,805 Transfers to/from Levels 1, 2 and 3 are recognized at the end of the reporting period in which a change in valuation technique or methodology occurs. There were no tran sfers to or from the various Levels at September 30, 2023 and December 31, 2022, respectively. | NOTE 10. FAIR VALUE MEASUREMENTS The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities: The Company classifies its U.S. Treasury and equivalent securities 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 U.S. Treasury securities are recorded at amortized cost on the accompanying balance sheets and adjusted for the amortization or accretion of premiums or discounts. On December 31, 2022, assets held in the Trust Account were comprised of $7,527,369 in money market funds. During the year ended December 31, 2022, the Company withdrew $110,472,254 as a result of an aggregate of 10,805,877 shares of common stock redeemed on October 20, 2022 and the Company did not withdraw any interest income from the Trust Account. On December 31, 2021, assets held in the Trust Account were comprised of $959 in cash and $116,726,019 in U.S. Treasury securities. During the period from March 30, 2021 (inception) through December 31, 2021, the Company did not withdraw any interest income from the Trust Account. The following table present information about the Company’s assets that are measured at fair value on a recurring basis on December 31, 2022 and 2021 and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value. The gross holding loss and fair value of held-to-maturity securities on December 31, 2022 and 2021 are as follows: Gross Amortized Holding Trading Securities Level Cost Loss Fair Value December 31, 2022 Money Market Funds 1 $ n/a $ n/a $ 7,527,369 Gross Amortized Holding Held-To-Maturity Level Cost Loss Fair Value December 31, 2021 U.S. Treasury Securities (Matured on 3/17/2022) 1 $ 116,726,019 $ (3,097) $ 116,722,922 The following table presents fair value information as of December 31, 2022 of the Company’s financial liabilities that were 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. The Company did not have any financial liabilities that were accounted for at fair values on a recurring basis as of December 31, 2021. Carrying Value (Level 1) (Level 2) (Level 3) Liabilities: PIPE Forward Contract $ 170,666 $ — $ — $ 170,666 Bridge Note – Bifurcated Derivative $ 364,711 $ — $ — $ 364,711 Measurement Bridge Note Bifurcated Derivative The Company established the initial fair value for the Bridge Note Bifurcated Derivative as of October 5, 2022, which was the date the Bridge Note was executed. On December 31, 2022 the fair value was remeasured. As such, the Company used a Probability Weighted Expected Return Method (“PWERM”) that fair values the early termination/repayment features of the debt. The PWERM is a multi-step process in which value is estimated based on the probability-weighted present value of various future outcomes. The PWERM was used to value the Bridge Note Bifurcated Derivative for the initial periods and subsequent measurement periods. The Bridge Note Bifurcated Derivative was classified within Level 3 of the fair value hierarchy at the initial measurement dates and as of December 31, 2022 due to the use of unobservable inputs. The key inputs into the Monte Carlo simulation model for the Bridge Note Bifurcated Derivative were as follows at October 5, 2022, initial value and at December 31, 2022: October 5, 2022 December 31, 2022 CCC bond rates 14.09 % 15.09 % Probability of early termination/repayment -business combination not completed 10 % 5 % Probability of early termination/repayment -business combination completed or PIPE completed 90 % 95 % Probability of completing a business combination by March 31, 2023 50 % 50 % Probability of completing a business combination by June 30, 2023 50 % 50 % PIPE Forward Contract The Company established the initial fair value for the PIPE Forward Contract as of October 6, 2022, which was the date of the PIPE Securities Purchas Agreement was executed. On December 31, 2022 the fair value was remeasured. As such, the Company utilizing a PWERM. The PWERM is a multistep process in which value is estimated based on the probability-weighted present value of various future outcomes to value the PIPE Forward Contract for the initial periods and subsequent measurement periods. The PIPE Forward Contract was classified within Level 3 of the fair value hierarchy at the initial measurement dates and as of December 31, 2022 due to the use of unobservable inputs. The key inputs into the PWERM for the PIPE Forward Contract were as follows at October 6, 2022, initial value and at December 31, 2022: October 6, 2022 December 31, 2022 Risk-fee interest rate 4.00 % 4.76 % Expected term (years) 0.61 0.37 Probability of completing a business combination 90 % 95 % The change in the fair value of the level 3 financial liabilities for the period from contract inception through December 31, 2022 is summarized as follows: PIPE Bridge Note Forward Contract Bifurcated Derivative Fair value at October 5, 2022 (Initial measurement) $ 278,404 Fair value at October 6, 2022 (Initial measurement) $ — — Change in fair value 170,666 86,307 Fair value at December 31, 2022 $ 170,666 $ 364,711 Transfers to/from Levels 1, 2 and 3 are recognized at the end of the reporting period in which a change in valuation technique or methodology occurs. There were no transfers to or from the various Levels during the year ended December 31, 2022 and 2021. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
SUBSEQUENT EVENTS | ||
SUBSEQUENT EVENTS | NOTE 10. SUBSEQUENT EVENTS The Company evaluated subsequent events and transactions that occurred after the condensed consolidated balance sheet date up to the date that the unaudited condensed consolidated financial statements were issued. Based upon this review, except as disclosed below, the Company did not identify any subsequent events that would have required adjustment or disclosure in the unaudited condensed consolidated financial statements. Pursuant to the Third Letter, on October 4, 2023, the Company requested a hearing (the “Hearing”) to appeal this determination and also applied to transfer the listing of its Securities from Nasdaq Global to the Nasdaq Capital Market (“NasdaqCM”). The Hearing is scheduled to be held on November 30, 2023 at 12:00 PM Eastern Time. On October 9, 2023, the Company received an additional letter (the “Fourth Letter”) from the staff at Nasdaq Global notifying the Company that its not meeting the 400 total shareholders requirement under the Nasdaq Listing Rule 5450(a)(2) serves as an additional basis for delisting the Company’s Securities from Nasdaq Global. The Company planned to also address the 400 total shareholder requirement at the Hearing. On October 26, 2023, the Nasdaq Listing Qualifications Department of the Nasdaq Stock Market notified the Company in writing (the “Notice”) that its application to transfer the listing of its Securities to NasdaqCM has been approved. The Notice also stated that the Company’s Securities will be transferred to the NasdaqCM at the opening of business on October 30, 2023. On November 1, 2023, the Company received a letter from the Nasdaq Global Hearings panel that due to the Company’s transfer of its listed Securities to NasdaqCM, the Hearing on November 30, 2023 regarding non-compliance with the Nasdaq Global listing standards has been cancelled. The Company’s Securities will continue to be listed and traded on The Nasdaq Stock Market on NasdaqCM. On November 6, 2023, DHAC held its 2023 annual stockholders meeting (“2023 Annual Meeting”). At the 2023 Annual Meeting, the stockholders of DHAC approved amendments to DHAC’s Charter to extend the date by which the Company must consummate a Business Combination (as defined in the Charter) up to four ( 4 ) times, each by an additional three ( 3 ) months, for an aggregate of twelve ( 12 ) additional months (i.e., from November 8, 2023 up to November 8, 2024) or such earlier date as determined by the Company’s board of directors. In connection with the amended Charter, on November 6, 2023, DHAC extended the period of time that it has to consummate its business combination by three months from November 8, 2023 to February 8, 2024. Furthermore, at the 2023 Annual Meeting, the stockholders of DHAC also approved an amendment to DHAC’s investment management trust agreement (the “Trust Agreement”), dated as of November 3, 2021 and as amended on October 26, 2022, by and between the Company and Continental Stock Transfer & Trust Company, which allows the Company to extend the business combination period from November 8, 2023 to up to four ( 4 ) times, each by an additional three ( 3 ) months, for an aggregate of twelve ( 12 ) additional months to November 8, 2024. In connection with the 2023 Annual Meeting and amendments to DHAC’s Charter and Trust Agreement, 579,157 shares of common stock were redeemed for approximately $6.8 million paid of trust at $11.73 redemption price per share. | NOTE 11. SUBSEQUENT EVENTS The Company evaluated subsequent events and transactions that occurred after the consolidated balance sheet date up to the date that the consolidated financial statements were issued. Based upon this review, expect as disclosed below, the Company did not identify any subsequent events that would have required adjustment or disclosure in the consolidated financial statements. On January 18, 2023, SCS Capital LLC issued an unsecured promissory note to the Company, pursuant to which the Company may borrow up to an aggregate principal amount of $250,000. The Promissory Note is non-interest bearing and shall be used to pay for general operating expenses. On January 18, 2023 DHAC and the Sponsor, entered into a Backstop Agreement (the “Backstop Agreement”) pursuant to which DHAC agreed to offer on or prior to the closing of the Business Combination the PIPE Investors the option to purchase up to an additional 2,000 shares of Series A Preferred Stock initially convertible into 234,260 shares of DHAC common stock (the “Additional PIPE Shares” and together with the Initial PIPE Shares, the “PIPE Shares”), together with additional warrants to purchase up to 106,000 shares of DHAC common stock (the “Additional PIPE Warrants” and together with the Initial PIPE Warrants, the “PIPE Warrants”; the Additional PIPE Shares and Additional PIPE Warrants are referred to as the “Additional PIPE Securities”) pursuant to a participation right granted to the PIPE Investors under the PIPE Securities Purchase Agreement, in each case, on the same terms and conditions set forth in the PIPE Securities Purchase Agreement for an aggregate purchase price of up to $2,000,000 (such proceeds together with the proceeds from the Initial PIPE Financing, as increased pursuant to the amendment to the Backstop Agreement described below, the “Aggregate Closing PIPE Proceeds”). Pursuant to the Backstop Agreement, if the PIPE Investors do not elect to purchase all of the Additional PIPE Securities, the Sponsor has agreed to purchase any such unsubscribed Additional PIPE Securities concurrent with the closing of the transactions contemplated by the PIPE Securities Purchase Agreement on the same terms and conditions set forth in the PIPE Securities Purchase Agreement. The Backstop Agreement contains customary representations, warranties, and agreements of the Company and the Sponsor and is subject to customary closing conditions and termination rights. If the conditions to the consummation of the Backstop Commitment contemplated by the Backstop Agreement are triggered, the closing of the sale of the Remaining Securities is expected to occur substantially concurrently with the closing of the transactions contemplated by the PIPE SPA. On February 2, 2023 the Company has extended the date by which the Company must consummate an initial business combination (the “Deadline Date”) for an additional three months from February 8, 2023 to May 8, 2023. The extension is the first of three additional three-month extensions permitted under the Company’s governing documents and provides the Company with additional time to complete its initial business combination. On February 1, 2023, the parties entered into a confidential settlement agreement. On February 3, 2023, Plaintiff’s counsel filed a notice of settlement with the court, requesting that the matter be placed on the inactive calendar for at least 30 days to allow the parties time to effectuate the terms of the settlement agreement. The parties filed a stipulation to dismiss the entire case with prejudice on April 7, 2023. See Note 6, Legal Claims for further detail. On March 31, 2023, the Company received a letter (the “Letter”) from the staff at The Nasdaq Global Market (“Nasdaq Global”) notifying the Company that for the 30 consecutive trading days prior to the date of the Letter, the Company’s securities listed on Nasdaq Global (including the Common Stock, Units and Warrants) (the “Securities”) had traded at a value below the minimum $50,000,000 “Market Value of Listed Securities” (“MVLS”) requirement set forth in Nasdaq Listing Rule 5450(b)(2)(A), which is required for continued listing of the Company’s Securities on Nasdaq Global. The Letter is only a notification of deficiency, not of imminent delisting, and has no current effect on the listing or trading of the Company’s Securities on Nasdaq Global. In accordance with Nasdaq listing rule 5810(c)(3)(C), the Company has 180 calendar days, or until September 27, 2023, to regain compliance. The Letter notes that to regain compliance, the Company’s Securities must trade at or above a level such that the Company’s MVLS closes at or above $50,000,000 for a minimum of ten On April 11, 2023 but effective March 31, 2023, the Company entered into an amendment to the PIPE Securities Purchase Agreement to, among other things, (a) amend and restate the form of Certificate of Designation of the Series A Preferred Stock to provide the aggregate number of shares of Series A Preferred Stock issuable thereunder shall not exceed 15,000, (b) amend and restate the form of PIPE Warrant to correct an error in the redemption provision of the PIPE Warrants, and (c) revise certain closing conditions for the PIPE Financing. On April 11, 2023 but effective March 31, 2023, the Sponsor and DHAC entered into an amendment to the Backstop Agreement to increase the Additional PIPE Shares that may be purchased pursuant to the Backstop Agreement from 2,000 shares of Series A Preferred Stock to 7,000 shares of Series A Preferred Stock, for an aggregate additional PIPE financing of up to $7,000,000, increasing the Aggregate Closing PIPE Proceeds to a total of $15,000,000. Pursuant to the PIPE Securities Purchase Agreement and the Backstop Agreement, each as amended, any purchaser of Additional PIPE Securities will enter into a lock up agreement with the Company pursuant to which such purchaser will agree not to, subject to certain limited exceptions, (i) sell, offer to sell, contract or agree to sell, hypothecate, pledge, grant any option to purchase, make any short sale or otherwise dispose of or agree to dispose of, directly or indirectly, any Additional PIPE Securities, or establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Securities and Exchange Act of 1934, as amended and the rules and regulations of the Securities and Exchange Commission promulgated thereunder with respect to any Additional PIPE Securities owned directly by the purchaser (including holding as a custodian) or with respect to which the purchaser has beneficial ownership within the rules and regulations of the Securities and Exchange Commission, or (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any of the purchaser’s Additional PIPE Securities, whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of shares of DHAC Common Stock or other securities, in cash or otherwise, (3) make any demand for or exercise any right or cause to be filed a registration statement, including any amendments thereto, with respect to the registration of any Additional PIPE Securities or (4) publicly disclose the intention to do any of the foregoing. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X of the Securities and Exchange Commission (“SEC”). Certain information or footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the period ended December 31, 2022, as filed with the SEC on April 12, 2023. The interim results for the three and nine months ended September 30, 2023 are not necessarily indicative of the results to be expected for the year ending December 31, 2023 or for any future periods. | Basis of Presentation The accompanying consolidated financial statements are presented in U.S. dollars and have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the accounting and disclosure rules and regulations of the Securities and Exchange Commission (the “SEC”). |
Principles of Consolidation | Principles of Consolidation The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiary. All significant intercompany balances and transactions have been eliminated in consolidation. | Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiary. All significant intercompany balances and transactions have been eliminated in consolidation. |
Liquidity and Going Concern | Liquidity and Going Concern The Company may raise additional capital through loans or additional investments from the Sponsor or its stockholders, officers, directors, or third parties. The Company’s officers and directors and the Sponsor may but are not obligated to (except as described above), loan the Company funds, from time to time, in whatever amount they deem reasonable in their sole discretion, to meet the Company’s working capital needs. Based on the foregoing, the Company believes it will have sufficient working capital and borrowing capacity from the Sponsor or an affiliate of the Sponsor, or certain of the Company directors to meet its needs through the earlier of the consummation of a Business Combination or at least one year from the date that the financial statements were issued. As of September 30, 2023, the Company had a cash balance of $507 and a working capital deficiency of $8,154,992 . In addition, in connection with the Company’s assessment of going concern considerations in accordance with FASB Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” management has determined that the liquidity, mandatory liquidation and subsequent dissolution on February 8, 2024 raises substantial doubt about the Company’s ability to continue as a going concern. No adjustments have been made to the carrying amounts of assets or liabilities of the Company as of September 30, 2023. The Company intends to complete a Business Combination before the mandatory liquidation date or file for an extension. | Liquidity and Going Concern 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). As of December 31, 2022 and 2021, there were no amounts outstanding under any Working Capital Loans. The Company may raise additional capital through loans or additional investments from the Sponsor or its stockholders, officers, directors, or third parties. The Company’s officers and directors and the Sponsor may but are not obligated to (except as described above), loan the Company funds, from time to time, in whatever amount they deem reasonable in their sole discretion, to meet the Company’s working capital needs. Based on the foregoing, the Company believes it will have sufficient working capital and borrowing capacity from the Sponsor or an affiliate of the Sponsor, or certain of the Company directors to meet its needs through the earlier of the consummation of a Business Combination or at least one year from the date that the financial statements were issued. As of December 31, 2022, the Company had a cash balance of $106,998 and a working capital deficiency of $3,056,596 net of $132,020 of allowable interest withdraws from trust to cover income and franchise taxes. In addition, in connection with the Company’s assessment of going concern considerations in accordance with FASB Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” management has determined that the liquidity, mandatory liquidation and subsequent dissolution raises substantial doubt about the Company’s ability to continue as a going concern. No adjustments have been made to the carrying amounts of assets or liabilities of the Company as of December 31, 2022. The Company intends to complete a Business Combination before the mandatory liquidation date. |
Emerging Growth Company | Emerging Growth Company The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, 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 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. | Emerging Growth Company The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, 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 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. |
Offering Costs | Offering Costs Offering costs consisted of legal, accounting, and other expenses incurred through the Initial Public Offering that were directly related to the Initial Public Offering. Offering costs were allocated to the separable financial instruments issued in the Initial Public Offering based on a relative fair value basis, compared to total proceeds received. Offering costs allocated to warrant were allocated to equity. Offering costs associated with the common stock issued were initially charged to temporary equity and then accreted to common stock subject to redemption upon the completion of the Initial Public Offering. | Offering Costs Offering costs consisted of legal, accounting, and other expenses incurred through the Initial Public Offering that were directly related to the Initial Public Offering. Offering costs were allocated to the separable financial instruments issued in the Initial Public Offering based on a relative fair value basis, compared to total proceeds received. Offering costs allocated to warrant were allocated to equity. Offering costs associated with the common stock issued were initially charged to temporary equity and then accreted to common stock subject to redemption upon the completion of the Initial Public Offering. |
Use of Estimates | Use of Estimates The preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires the Company’s 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 financial statements and the reported amounts of revenues and expenses during the reporting period. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. The most significant accounting estimates were the assumptions used to fair value the PIPE Forward Contract, the Investor Note Derivative and the Bridge Note Bifurcated Derivative. Accordingly, the actual results could differ significantly from those estimates. | Use of Estimates The preparation of the consolidated financial statements in conformity with U.S. GAAP requires the Company’s 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 financial statements and the reported amounts of revenues and expenses during the reporting period. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. The most significant accounting estimates were the assumptions used to fair value the PIPE Forward Contract and the Bridge Note Bifurcated Derivative. Accordingly, the actual results could differ significantly 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 no t have any cash equivalents as of September 30, 2023 and December 31, 2022. | 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, 2022 and 2021. |
Investments Held in Trust Account | Investments Held in Trust Account At September 30, 2023 and December 31, 2022, the assets held in the Trust Account were held in money market funds, which are invested primarily in U.S. Treasury securities. | Investments Held in Trust Account At December 31, 2022 and 2021, the assets held in the Trust Account were held in money market funds, which are invested primarily in U.S. Treasury securities. |
Common Stock Subject to Possible Redemption | Common Stock Subject to Possible Redemption The Company accounts for its common stock subject to possible redemption in accordance with the guidance in ASC Topic 480, “Distinguishing Liabilities from Equity.” Common stock subject to mandatory redemption is classified as a liability instrument and is measured at fair value. Conditionally redeemable common stock (including common stock that features 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) is classified in temporary equity. At all other times, common stock is classified as stockholders’ deficit. The Company’s common stock sold in the IPO features certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, at September 30, 2023 and December 31, 2022, common stock subject to possible redemption is presented at redemption value as temporary equity, outside of the stockholders’ deficit section of the Company’s condensed consolidated balance sheets. 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. This method would view the end of the reporting period as if it were also the redemption date for the security. Immediately upon the closing of the Initial Public Offering, increases or decreases in the carrying amount of redeemable common stock are affected by charges against additional paid-in capital and accumulated deficit. At September 30, 2023 and December 31, 2022, the common stock reflected in the condensed consolidated balance sheets is reconciled in the following table: Gross proceeds $ 115,000,000 Less: Proceeds Allocated to Public Warrants (12,483,555) Common stock issuance costs (6,923,767) Plus: Accretion of carrying value to redemption value 21,132,322 Common stock subject to possible redemption, December 31, 2021 116,725,000 Plus: Accretion of carrying value to redemption value 1,142,603 Less: Redemptions (110,472,254) Common stock subject to possible redemption, December 31, 2022 7,395,349 Plus: Accretion of carrying value to redemption value 498,865 Common stock subject to possible redemption, September 30, 2023 $ 7,894,214 | Common Stock Subject to Possible Redemption The Company accounts for its common stock subject to possible redemption in accordance with the guidance in ASC Topic 480, “Distinguishing Liabilities from Equity.” Common stock subject to mandatory redemption is classified as a liability instrument and is measured at fair value. Conditionally redeemable common stock (including common stock that features 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) is classified in temporary equity. At all other times, common stock is classified as stockholders’ deficit. The Company’s common stock features certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, at December 31, 2022 and 2021, common stock subject to possible redemption is presented at redemption value as temporary equity, outside of the stockholders’ deficit section of the Company’s consolidated balance sheets. 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. This method would view the end of the reporting period as if it were also the redemption date for the security. Immediately upon the closing of the Initial Public Offering, increases or decreases in the carrying amount of redeemable common stock are affected by charges against additional paid-in capital and accumulated deficit. At December 31, 2022 and 2021, the common stock reflected in the consolidated balance sheets is reconciled in the following table: Gross proceeds $ 115,000,000 Less: Proceeds Allocated to Public Warrants (12,483,555) Common stock issuance costs (6,923,767) Plus: Accretion of carrying value to redemption value 21,132,322 Common stock subject to possible redemption, December 31, 2021 116,725,000 Plus: Accretion of carrying value to redemption value 1,142,603 Less: Redemptions (110,472,254) Common stock subject to possible redemption, December 31, 2022 $ 7,395,349 |
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 FASB ASC 820, “Fair Value Measurements” approximates the carrying amounts represented in the condensed consolidated balance sheets, primarily due to its short-term nature. | Fair Value of Financial Instruments The fair value of the Company’s assets and liabilities, which qualify as financial instruments under FASB ASC 820, “Fair Value Measurements” approximates the carrying amounts represented in the consolidated balance sheets, primarily due to its short-term nature. |
Income Taxes | Income Taxes The Company accounts for income taxes under ASC 740, “Income Taxes.” ASC 740, Income Taxes, requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the unaudited condensed consolidated financial statements 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. ASC 740-270-25-2 requires that an annual effective tax rate be determined, and such annual effective rate applied to year to date income in interim periods under ASC 740-270-30-5. As of September 30, 2023 and December 31, 2022, the Company’s deferred tax asset had a full valuation allowance recorded against it. ASC 740-270-25-2 requires that an annual effective tax rate be determined and such annual effective rate applied to year to date income in interim periods under ASC 740-270-30-5. The Company’s effective tax rate was 0.0% and 11.25% for the three months ended September 30, 2023 and 2022, respectively, the effective tax rate was 0.0% and 4.31% for the nine months ended September 30, 2023 and 2022, respectively. The effective tax rate differs from the statutory tax rate of 21% for the three and nine months ended September 30, 2023 and 2022 due to 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 as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of September 30, 2023 and December 31, 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 taxation 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. | Income Taxes The Company follows the asset and liability method of accounting for income taxes under FASB ASC 740, “Income Taxes” (“ASC 740”). Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. The Company accounts for income taxes under ASC 740. ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions 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. The Company’s management determined that the United States is the Company’s major tax jurisdiction. As of December 31, 2022 and 2021, there were no unrecognized tax benefits and no amounts accrued for interest and penalties. 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’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months. |
Net Loss per Common Stock | Net Income (Loss) per Common Stock The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share.” Net income (loss) per common stock is computed by dividing net income (loss) by the weighted average number of common stocks outstanding for the period. Accretion associated with the redeemable shares of common stock is excluded from net income (loss) per common stock as the redemption value approximates fair value. The calculation of diluted income (loss) per share does not consider the effect of the warrants issued in connection with the (i) Initial Public Offering, and (ii) the private placement (iii) the Bridge and Investor Note Warrants because the exercise of the warrants is contingent upon the occurrence of future events and the inclusion of such warrants would be anti-dilutive. The warrants are exercisable to purchase 12,256,999 common stocks in the aggregate. As of the three and nine months ended September 30, 2023 and 2022, the Company did no t have any dilutive securities or other contracts that could, potentially, be exercised or converted into common stocks and then share in the earnings of the Company. As a result, diluted net income (loss) per common stock is the same as basic net income (loss) per common stock for the periods presented. The following table reflects the calculation of basic and diluted net income (loss) per common stock (in dollars, except per share amounts): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2023 2022 2023 2022 Common Stock Common Stock Common Stock Common Stock Basic and diluted net income (loss) per of common stock Numerator: Allocation of net income (loss), as adjusted $ 78,287 $ (820,759) $ (1,552,805) $ (2,007,578) Denominator: Basic and diluted weighted average shares outstanding, non- redeemable common stock 4,183,123 14,932,000 4,177,427 14,932,000 Basic and diluted net income (loss) per share, non-redeemable common stock $ 0.02 $ (0.05) $ (0.37) $ (0.13) | Net Loss per Common Stock The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share.” Net loss per common stock is computed by dividing net loss by the weighted average number of common stocks outstanding for the period. This presentation contemplates a Business Combination as the most likely outcome, in which case, both classes of common stocks share pro rata in the loss of the Company. Accretion associated with the redeemable shares of common stock is excluded from net loss per common stock as the redemption value approximates fair value. The calculation of diluted loss per share does not consider the effect of the warrants issued in connection with the (i) Initial Public Offering, (ii) the private placement (iii) the Bridge Warrants because the exercise of the warrants is contingent upon the occurrence of future events and the inclusion of such warrants would be anti-dilutive. The warrants are exercisable to purchase 12,230,913 common stocks in the aggregate. As of December 31, 2022, the Company did not have any dilutive securities or other contracts that could, potentially, be exercised or converted into common stocks and then share in the earnings of the Company. As a result, diluted net loss per common stock is the same as basic net loss per common stock for the periods presented. The following table reflects the calculation of basic and diluted net loss per common stock (in dollars, except per share amounts): For the Period from March 30, 2021 Year Ended (Inception) through December 31, 2022 December 31, 2021 Common Stock Common Stock Basic and diluted net loss per of common stock Numerator: Net loss, as adjusted $ (3,242,501) $ (280,701) Denominator: Basic and diluted weighted average shares outstanding, common stock 12,741,219 3,981,054 Basic and diluted net loss per share, common stock $ (0.25) $ (0.07) |
Concentration of Credit Risk | Concentration of Credit Risk The Company has significant cash balances at a financial institutions which throughout the year did not exceed the federally insured limited of $250,000. There was no risk of loss incurred or a lack of access to such funds could have a significant adverse impact on the Company’s financial condition, results of operations, and cash flows. | Concentration of Credit Risk The Company has significant cash balances at financial institutions which throughout the year regularly exceed the federally insured limit of $250,000. Any loss incurred or a lack of access to such funds could have a significant adverse impact on the Company’s financial condition, results of operations, and cash flows. |
Warrant Instruments | Warrant Instruments The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in FASB ASC 480, “Distinguishing Liabilities from Equity” (“ASC 480”), and ASC 815, “Derivatives and Hedging” (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own common stock, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding. For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. The Company has analyzed the Public Warrants, Private Warrants, Bridge Note Warrants and the Investor Warrants and determined they are considered to be freestanding instruments and do not exhibit any of the characteristics in ASC 480 and therefore are not classified as liabilities under ASC 480. The warrants meet all of the requirements for equity classification under ASC 815 and therefore are classified in equity. | Warrant Instruments The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in FASB ASC 480, “Distinguishing Liabilities from Equity” (“ASC 480”), and ASC 815, “Derivatives and Hedging” (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own common stock, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding. For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. The Company’s has analyzed the Public Warrants and Private Warrants and determined they are considered to be freestanding instruments and do not exhibit any of the characteristics in ASC 480 and therefore are not classified as liabilities under ASC 480. The warrants meet all of the requirements for equity classification under ASC 815 and therefore are classified in equity. |
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 bifurcated derivatives in accordance with ASC 815. Derivative instruments are recorded at fair value on the grant date and re-valued at each reporting date, with changes in the fair value reported in the statements 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. The Company has determined the PIPE financing agreement is a derivative instrument and the Bridge Note’s early redemption provision is an embedded feature that is required to be bifurcated as a derivative. FASB ASC 470-20, “Debt with Conversion and Other Options,” addresses the allocation of proceeds from the issuance of debt into its debt and bifurcated derivative components. The Company applies this guidance to allocate the Bridge Note proceeds between the Bridge Note and the Bifurcated Derivative, using the residual method by allocating the principal first to fair value of the bifurcated derivative and then to the debt. | |
Fair Value Measurement | Fair Value Measurement 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. U.S. 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. | Fair Value Measurement 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. U.S. 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. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Management does not believe that any recently issued, but not effective, accounting standards, if currently adopted, would have a material effect on the Company’s condensed consolidated financial statements. | Recent Accounting Pronouncements In August 2020, the FASB issued ASU 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)” (“ASU 2020-06”), to simplify accounting for certain financial instruments. ASU 2020-06 eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity. The new standard also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity’s own equity. ASU 2020-06 amends the diluted earnings per share guidance, including the requirement to use the if-converted method for all convertible instruments. As a smaller reporting company, ASU 2020-06 is effective January 1, 2024 for fiscal years beginning after December 15, 2023 and should be applied on a full or modified retrospective basis, with early adoption permitted beginning on January 1, 2021. The Company is currently assessing the impact, if any, that ASU 2020-06 would have on its financial position, results of operations or cash flows. The Company adopted ASU 2020-06 at inception on March 30, 2021. The adoption of ASU 2020-06 did not have an impact on the Company’s consolidated financial statements. Management does not believe that any recently issued, but not effective, accounting standards, if currently adopted, would have a material effect on the Company’s consolidated financial statements. |
Risks and Uncertainties | Risks and Uncertainties Management continues to evaluate the impact of the COVID-19 pandemic and the current wars on the industry and has concluded that while it is reasonably possible that the virus and the war could have a negative effect on the Company’s financial position, results of its operations and/or closing a business combination, the specific impact is not readily determinable as of the date these condensed consolidated financial statements are issued. The condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Inflation Reduction Act of 2022 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 of stock by publicly traded U.S. domestic corporations and certain U.S. domestic subsidiaries of publicly traded foreign corporations occurring on or after January 1, 2023. 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 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. 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. | Risks and Uncertainties 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. Further, the impact of this action and related sanctions on the world economy is not determinable as of the date of these consolidated 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 consolidated financial statements. 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 the consolidated financial statements. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Inflation Reduction Act of 2022 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 of stock by publicly traded U.S. domestic corporations and certain U.S. domestic subsidiaries of publicly traded foreign corporations occurring on or after January 1, 2023. 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 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. 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. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Schedule of common stock subject to possible redemption | Gross proceeds $ 115,000,000 Less: Proceeds Allocated to Public Warrants (12,483,555) Common stock issuance costs (6,923,767) Plus: Accretion of carrying value to redemption value 21,132,322 Common stock subject to possible redemption, December 31, 2021 116,725,000 Plus: Accretion of carrying value to redemption value 1,142,603 Less: Redemptions (110,472,254) Common stock subject to possible redemption, December 31, 2022 7,395,349 Plus: Accretion of carrying value to redemption value 498,865 Common stock subject to possible redemption, September 30, 2023 $ 7,894,214 | Gross proceeds $ 115,000,000 Less: Proceeds Allocated to Public Warrants (12,483,555) Common stock issuance costs (6,923,767) Plus: Accretion of carrying value to redemption value 21,132,322 Common stock subject to possible redemption, December 31, 2021 116,725,000 Plus: Accretion of carrying value to redemption value 1,142,603 Less: Redemptions (110,472,254) Common stock subject to possible redemption, December 31, 2022 $ 7,395,349 |
Reconciliation of Net Loss per Common Share | The following table reflects the calculation of basic and diluted net income (loss) per common stock (in dollars, except per share amounts): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2023 2022 2023 2022 Common Stock Common Stock Common Stock Common Stock Basic and diluted net income (loss) per of common stock Numerator: Allocation of net income (loss), as adjusted $ 78,287 $ (820,759) $ (1,552,805) $ (2,007,578) Denominator: Basic and diluted weighted average shares outstanding, non- redeemable common stock 4,183,123 14,932,000 4,177,427 14,932,000 Basic and diluted net income (loss) per share, non-redeemable common stock $ 0.02 $ (0.05) $ (0.37) $ (0.13) | The following table reflects the calculation of basic and diluted net loss per common stock (in dollars, except per share amounts): For the Period from March 30, 2021 Year Ended (Inception) through December 31, 2022 December 31, 2021 Common Stock Common Stock Basic and diluted net loss per of common stock Numerator: Net loss, as adjusted $ (3,242,501) $ (280,701) Denominator: Basic and diluted weighted average shares outstanding, common stock 12,741,219 3,981,054 Basic and diluted net loss per share, common stock $ (0.25) $ (0.07) |
INCOME TAX (Tables)
INCOME TAX (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
INCOME TAX | |
Schedule of net deferred tax assets | December 31, December 31, 2022 2021 Deferred tax assets Net operating loss carryforward $ (379) $ 5,846 Start-up/organization Expenses 962,297 60,961 Total deferred tax assets 961,918 66,807 Valuation allowance (961,918) (66,807) Deferred tax assets, net of allowance $ — $ — |
Schedule of Income Tax Provision | For the Period from March 30, 2021 (Inception) For the Year Ended Through December 31, December 31, 2022 2021 Federal Current $ 187,225 $ — Deferred (741,805) (58,947) State Current — — Deferred (153,306) (7,860) Change in valuation allowance 895,111 66,807 Income tax provision $ 187,225 $ — |
Summary of reconciliation of the federal income tax rate to the Company's effective tax rate | A reconciliation of the federal income tax rate to the Company’s effective tax rate at December 31, 2022 and 2021 is as follows: For the Period from March 30, 2021 (Inception) For the Year Ended Through December 31, December 31, 2022 2021 Statutory federal income tax rate 21.0 % 21.0 % State taxes, net of federal tax benefit 4.3 % 2.8 % Change in fair value of Bridge Note- bifurcated derivative (0.7) % 0.0 % Change in fair value of PIPE forward contract derivative (1.4) % 0.0 % Change in valuation allowance (29.3) % (23.8) % Income tax provision (6.1) % 0.0 % |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
FAIR VALUE MEASUREMENTS | ||
Summary of gross holding loss and fair value of held-to-maturity securities | Fair Trading Securities Level Value September 30, 2023 Money Market Funds 1 $ 8,119,642 Fair Trading Securities Level Value December 31, 2022 Money Market Funds 1 $ 7,527,369 | Gross Amortized Holding Trading Securities Level Cost Loss Fair Value December 31, 2022 Money Market Funds 1 $ n/a $ n/a $ 7,527,369 Gross Amortized Holding Held-To-Maturity Level Cost Loss Fair Value December 31, 2021 U.S. Treasury Securities (Matured on 3/17/2022) 1 $ 116,726,019 $ (3,097) $ 116,722,922 |
Schedule of fair value information on recurring basis | September 30, 2023 Fair Value (Level 1) (Level 2) (Level 3) Liabilities: Investor Note – Bifurcated Derivative $ 22,805 $ — $ — $ 22,805 Bridge Note – Bifurcated Derivative $ 241,447 $ — $ — $ 241,447 December 31, 2022 Fair Value (Level 1) (Level 2) (Level 3) Liabilities: PIPE Forward Contract $ 170,666 $ — $ — $ 170,666 Bridge Note – Bifurcated Derivative $ 364,711 $ — $ — $ 364,711 | The following table presents fair value information as of December 31, 2022 of the Company’s financial liabilities that were 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. The Company did not have any financial liabilities that were accounted for at fair values on a recurring basis as of December 31, 2021. Carrying Value (Level 1) (Level 2) (Level 3) Liabilities: PIPE Forward Contract $ 170,666 $ — $ — $ 170,666 Bridge Note – Bifurcated Derivative $ 364,711 $ — $ — $ 364,711 |
Schedule of key inputs into the Monte Carlo simulation model for Bridge Note Bifurcated Derivative | September 30, 2023 December 31, 2022 CCC bond rates 13.31 % 15.09 % Probability of early termination/repayment – business combination not completed 5 % 5 % Probability of early termination/repayment – business combination completed, or PIPE completed 80 % 95 % Probability of completing a business combination by March 31, 2023 — % 50 % Probability of completing a business combination by June 30, 2023 — % 50 % Probability of completing a business combination by December 31, 2023 80 % — % | October 5, 2022 December 31, 2022 CCC bond rates 14.09 % 15.09 % Probability of early termination/repayment -business combination not completed 10 % 5 % Probability of early termination/repayment -business combination completed or PIPE completed 90 % 95 % Probability of completing a business combination by March 31, 2023 50 % 50 % Probability of completing a business combination by June 30, 2023 50 % 50 % |
Schedule of key inputs into the PWERM for the PIPE Forward Contracts | October 6, 2022 December 31, 2022 Risk-fee interest rate 4.00 % 4.76 % Expected term (years) 0.61 0.37 Probability of completing a business combination 90 % 95 % | |
Schedule of change in fair value of level 3 financial liabilities | PIPE Bridge Note Investor Note Forward Bifurcated Bifurcated Contract Derivative Derivative Fair value at December 31, 2022 $ 170,666 $ 364,711 $ — Initial value of Investor Note – Bifurcated Derivative May 5, 2023 — — 24,502 Change in fair value (170,666) (123,265) (1,697) Fair value at September 30, 2023 $ — $ 241,447 $ 22,805 | PIPE Bridge Note Forward Contract Bifurcated Derivative Fair value at October 5, 2022 (Initial measurement) $ 278,404 Fair value at October 6, 2022 (Initial measurement) $ — — Change in fair value 170,666 86,307 Fair value at December 31, 2022 $ 170,666 $ 364,711 |
DESCRIPTION OF ORGANIZATION A_2
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||
Aug. 01, 2023 | Oct. 26, 2022 USD ($) $ / shares | Oct. 20, 2022 USD ($) item shares | Oct. 06, 2022 | Nov. 12, 2021 USD ($) | Nov. 11, 2021 USD ($) | Nov. 08, 2021 USD ($) $ / shares shares | Mar. 31, 2023 USD ($) | Sep. 30, 2023 USD ($) item $ / shares shares | Dec. 31, 2021 USD ($) shares | Dec. 31, 2022 USD ($) item $ / shares shares | Oct. 31, 2021 shares | |
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | ||||||||||||
Purchase price, per unit | $ / shares | $ 10.15 | $ 10.15 | ||||||||||
Proceeds from sale of Units, net of underwriting discounts paid | $ 113,045,000 | |||||||||||
Number of shares redeemed | shares | 10,805,877 | 10,805,877 | 10,805,877 | |||||||||
Transaction costs | $ 6,877,164 | $ 6,877,164 | ||||||||||
Underwriting fees | 1,955,000 | 1,955,000 | ||||||||||
Deferred underwriting fee payable | 4,370,000 | 4,370,000 | 4,370,000 | |||||||||
Other offering costs | 552,164 | 552,164 | ||||||||||
Cash | 9,478 | 9,478 | ||||||||||
Working Capital deficiency | $ 8,154,992 | 3,056,596 | ||||||||||
Aggregate purchase price | $ 214,200 | 25,000 | $ 284,424 | |||||||||
Extension period to consummate a business combination | 3 months | 3 months | ||||||||||
Number of extensions to consummate a business combination | item | 3 | |||||||||||
Maximum extension period to consummate a business combination | 9 months | |||||||||||
Extension fee payable by sponsor | $ 350,000 | |||||||||||
Condition for future business combination number of businesses minim | item | 1 | 1 | ||||||||||
Condition for future business combination threshold percentage ownership | 50 | 50 | ||||||||||
Redemption of shares calculated based on business days prior to consummation of business combination (in days) | 2 days | 2 days | ||||||||||
Investment of cash into trust account | $ 350,000 | $ 116,725,008 | $ 350,000 | |||||||||
Condition for future business combination threshold net tangible assets | $ 5,000,001 | $ 5,000,001 | ||||||||||
Common stock, shares issued | shares | 10,805,877 | |||||||||||
Common stock, shares outstanding | shares | 4,156,123 | |||||||||||
Threshold minimum aggregate fair market value as a percentage of the net assets held in the Trust Account | 80 | 80 | ||||||||||
Obligation to redeem Public Shares if entity does not complete a business combination (as a percent) | 100% | |||||||||||
Redemption period upon closure | 10 days | 10 days | ||||||||||
Anticipated price per public share based on amount held in trust account | $ / shares | $ 10.65 | |||||||||||
Maximum allowed dissolution expenses | $ 100,000 | $ 100,000 | ||||||||||
Months To Complete an Acquisition Period | 21 months | 18 months | ||||||||||
VSee and iDoc | ||||||||||||
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | ||||||||||||
Percentage of common stock issued as consideration | 100% | 100% | 100% | |||||||||
Common stock subject to redemption | ||||||||||||
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | ||||||||||||
Shares subject to redemption | shares | 694,123 | 694,123 | 11,500,000 | 694,123 | ||||||||
IPO | ||||||||||||
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | ||||||||||||
Sale of units, net of underwriting discounts (in shares) | shares | 11,500,000 | |||||||||||
Purchase price, per unit | $ / shares | $ 10 | |||||||||||
Proceeds from sale of Units, net of underwriting discounts paid | $ 115,000,000 | |||||||||||
Obligation to redeem Public Shares if entity does not complete a business combination (as a percent) | 100% | |||||||||||
Months To Complete an Acquisition Period | 21 months | |||||||||||
IPO | Private Placement Warrants | ||||||||||||
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | ||||||||||||
Purchase price, per unit | $ / shares | $ 10.15 | |||||||||||
Proceeds from sale of Units, net of underwriting discounts paid | $ 116,725,000 | |||||||||||
Private Placement | ||||||||||||
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | ||||||||||||
Common stock, shares issued | shares | 557,000 | 557,000 | ||||||||||
Private Placement | Private Placement Warrants | ||||||||||||
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | ||||||||||||
Number of warrants to purchase shares issued | shares | 557,000 | |||||||||||
Price of warrant | $ / shares | $ 10 | |||||||||||
Proceeds from sale of private placement warrants | $ 5,570,000 | $ 3,680,000 | ||||||||||
Receivable recorded from the sale of private placement warrants | 1,890,000 | |||||||||||
Underwriting fees | 0 | |||||||||||
Aggregate purchase price | $ 5,570,000 | $ 5,570,000 | ||||||||||
Obligation to redeem Public Shares if entity does not complete a business combination (as a percent) | 100% | 100% | ||||||||||
Months To Complete an Acquisition Period | 21 months | 18 months | ||||||||||
Over-allotment option | ||||||||||||
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | ||||||||||||
Sale of units, net of underwriting discounts (in shares) | shares | 1,500,000 | |||||||||||
Sponsor | ||||||||||||
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | ||||||||||||
Purchase price, per unit | $ / shares | $ 10.15 | $ 10.15 | ||||||||||
Investment of cash into trust account | $ 350,000 | |||||||||||
Obligation to redeem Public Shares if entity does not complete a business combination (as a percent) | 100% | 100% | ||||||||||
Anticipated price per public share based on amount held in trust account | $ / shares | $ 10.65 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Mar. 31, 2021 | |
Cash | $ 507 | $ 106,998 | $ 760,012 | |
Working Capital deficiency | 8,154,992 | 3,056,596 | ||
Interest withdraws from trust | 132,020 | |||
Cash equivalents | 0 | 0 | 0 | |
Unrecognized tax benefits | 0 | 0 | 0 | $ 0 |
Unrecognized tax benefits accrued for interest and penalties | 0 | 0 | 0 | |
Due to related party | 138,937 | $ 43,900 | $ 43,900 | |
Warrants outstanding | 12,057,000 | 12,057,000 | ||
Common stock subject to possible redemption reflected on the condensed balance sheet | ||||
Gross proceeds | $ 115,000,000 | |||
Less: | ||||
Proceeds Allocated to Public Warrants | (12,483,555) | |||
Common stock issuance costs | (6,923,767) | |||
Redemptions | $ (110,472,254) | |||
Plus: | ||||
Accretion of carrying value to redemption value | 1,142,603 | 21,132,322 | ||
Common stock subject to possible redemption | $ 7,894,214 | 7,395,349 | 116,725,000 | |
Working Capital Loans Warrants [Member] | ||||
Due to related party | $ 0 | $ 0 | ||
Private Placement Warrants | ||||
Warrants outstanding | 12,256,999 | 12,230,913 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Calculation of basic and diluted net loss per common stock (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||
Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2022 | |
Numerator: | |||||||||||
Allocation of net income (loss), as adjusted | $ 78,287 | $ 263,550 | $ (1,894,642) | $ (820,759) | $ (659,459) | $ (527,360) | $ (1,552,805) | $ (2,007,578) | $ (280,701) | $ (3,242,501) | |
Denominator: | |||||||||||
Weighted average shares outstanding, non-redeemable common stock, basic | 4,183,123 | 14,932,000 | 4,177,427 | 14,932,000 | 3,981,054 | 12,741,219 | |||||
Weighted average shares outstanding, non-redeemable common stock, diluted | 4,183,123 | 14,932,000 | 4,177,427 | 14,932,000 | 3,981,054 | 12,741,219 | |||||
Basic net income (loss) per share, non-redeemable common stock | $ 0.02 | $ (0.05) | $ (0.37) | $ (0.13) | $ (0.07) | $ (0.25) | |||||
Diluted net income (loss) per share, non-redeemable common stock | $ 0.02 | $ (0.05) | $ (0.37) | $ (0.13) | $ (0.07) | $ (0.25) | |||||
Common Stock [Member] | |||||||||||
Numerator: | |||||||||||
Allocation of net income (loss), as adjusted | $ 78,287 | $ (820,759) | $ (1,552,805) | $ (2,007,578) | $ (280,701) | $ (3,242,501) | |||||
Denominator: | |||||||||||
Weighted average shares outstanding, non-redeemable common stock, basic | 3,981,054 | 12,741,219 | |||||||||
Weighted average shares outstanding, non-redeemable common stock, diluted | 3,981,054 | 12,741,219 | |||||||||
Basic net income (loss) per share, non-redeemable common stock | $ (0.07) | $ (0.25) | |||||||||
Diluted net income (loss) per share, non-redeemable common stock | $ (0.07) | $ (0.25) | |||||||||
Common Stock Not Subject to Redemption [Member] | |||||||||||
Denominator: | |||||||||||
Weighted average shares outstanding, non-redeemable common stock, basic | 4,183,123 | 14,932,000 | 4,177,427 | 14,932,000 | |||||||
Weighted average shares outstanding, non-redeemable common stock, diluted | 4,183,123 | 14,932,000 | 4,177,427 | 14,932,000 | |||||||
Basic net income (loss) per share, non-redeemable common stock | $ 0.02 | $ (0.05) | $ (0.37) | $ (0.13) | |||||||
Diluted net income (loss) per share, non-redeemable common stock | $ 0.02 | $ (0.05) | $ (0.37) | $ (0.13) |
INITIAL PUBLIC OFFERING (Detail
INITIAL PUBLIC OFFERING (Details) - $ / shares | 9 Months Ended | 12 Months Ended | |
Nov. 08, 2021 | Sep. 30, 2023 | Dec. 31, 2022 | |
PRIVATE PLACEMENT | |||
Purchase price, per unit | $ 10.15 | $ 10.15 | |
Number of shares issuable per warrant | 1 | 1 | |
Exercise price of warrants | $ 11.50 | $ 11.50 | |
Public warrants expiration term | 5 years | 5 years | |
Months To Complete an Acquisition Period | 21 months | 18 months | |
Public Warrants | |||
PRIVATE PLACEMENT | |||
Threshold trading days for redemption of public warrants | 20 days | ||
IPO | |||
PRIVATE PLACEMENT | |||
Number of units sold | 11,500,000 | ||
Purchase price, per unit | $ 10 | ||
Number of shares in a unit | 1 | ||
Months To Complete an Acquisition Period | 21 months | ||
IPO | Public Warrants | |||
PRIVATE PLACEMENT | |||
Number of warrants in a unit | 1 | ||
Number of shares issuable per warrant | 1 | ||
Exercise price of warrants | $ 11.50 | ||
Threshold trading days for redemption of public warrants | 30 days | ||
Public warrants expiration term | 5 years | ||
Months To Complete an Acquisition Period | 12 months | 12 months | |
Over-allotment option | |||
PRIVATE PLACEMENT | |||
Number of units sold | 1,500,000 |
PRIVATE PLACEMENT (Details)
PRIVATE PLACEMENT (Details) - USD ($) | 9 Months Ended | 12 Months Ended | ||
Nov. 12, 2021 | Nov. 08, 2021 | Sep. 30, 2023 | Dec. 31, 2022 | |
Subsidiary, Sale of Stock [Line Items] | ||||
Underwriting fees | $ 1,955,000 | $ 1,955,000 | ||
Obligation to redeem Public Shares if entity does not complete a business combination (as a percent) | 100% | |||
Months To Complete an Acquisition Period | 21 months | 18 months | ||
Private Placement [Member] | Private Placement Warrants [Member] | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Number of warrants to purchase shares issued | 557,000 | |||
Price of warrants | $ 10 | |||
Aggregate purchase price | $ 5,570,000 | $ 3,680,000 | ||
Receivable recorded from the sale of private placement warrants | 1,890,000 | |||
Underwriting fees | $ 0 | |||
Obligation to redeem Public Shares if entity does not complete a business combination (as a percent) | 100% | 100% | ||
Months To Complete an Acquisition Period | 21 months | 18 months |
RELATED PARTY TRANSACTIONS - Fo
RELATED PARTY TRANSACTIONS - Founder Shares (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Jun. 07, 2021 | Mar. 31, 2023 | Dec. 31, 2021 | Dec. 31, 2022 | Oct. 20, 2022 | Oct. 31, 2021 | |
RELATED PARTY TRANSACTIONS | ||||||
Aggregate purchase price | $ 214,200 | $ 25,000 | $ 284,424 | |||
Common stock, shares outstanding (in shares) | 4,156,123 | |||||
Founder shares | Sponsor | ||||||
RELATED PARTY TRANSACTIONS | ||||||
Number of shares issued | 4,312,500 | |||||
Aggregate purchase price | $ 25,000 | |||||
Shares subject to forfeiture | 1,437,500 | |||||
Common stock, shares outstanding (in shares) | 2,875,000 |
RELATED PARTY TRANSACTIONS - Ad
RELATED PARTY TRANSACTIONS - Additional Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||
Nov. 12, 2021 | Nov. 08, 2021 | Nov. 03, 2021 | Jun. 07, 2021 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Nov. 26, 2022 | |
RELATED PARTY TRANSACTIONS | |||||||||||
Repayment of promissory note - related party | $ 602,720 | ||||||||||
Total expenses incurred | $ 402,936 | ||||||||||
Proceeds held in trust account used to repay working capital loans | $ 0 | $ 0 | |||||||||
Advances from related parties | $ 138,937 | 138,937 | 43,900 | 43,900 | |||||||
Due to related parties included in accrued expenses | 31,650 | 31,650 | 73,850 | ||||||||
Working capital loans warrant | |||||||||||
RELATED PARTY TRANSACTIONS | |||||||||||
Advances from related parties | 0 | 0 | 0 | 0 | |||||||
Unsecured promissory note | |||||||||||
RELATED PARTY TRANSACTIONS | |||||||||||
Aggregate principal amount | $ 350,000 | ||||||||||
Maximum borrowing capacity of related party promissory note | $ 625,000 | ||||||||||
Repayment of promissory note - related party | $ 602,720 | $ 602,720 | |||||||||
Administrative Support Agreement | |||||||||||
RELATED PARTY TRANSACTIONS | |||||||||||
Expenses per month | $ 10,000 | ||||||||||
Total expenses incurred | $ 30,000 | $ 30,000 | $ 90,000 | $ 90,000 | 20,000 | 120,000 | |||||
Due to related parties included in accrued expenses | $ 10,000 | $ 10,000 | $ 10,000 | $ 10,550 |
COMMITMENTS (Details)
COMMITMENTS (Details) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2023 | Dec. 31, 2022 | Nov. 03, 2021 item | |
COMMITMENTS | |||
Maximum number of demands for registration of securities | 2 | ||
Deferred underwriting commission, as a percent | 3.8 | 3.8 |
COMMITMENTS - Additional inform
COMMITMENTS - Additional information (Details) | 9 Months Ended | 12 Months Ended | |
Oct. 06, 2022 | Sep. 30, 2023 USD ($) $ / shares D shares | Dec. 31, 2022 USD ($) $ / shares D shares | |
COMMITMENTS AND CONTINGENCIES | |||
Exercise price of warrants | $ / shares | $ 11.50 | $ 11.50 | |
Exercise period | 5 years | 5 years | |
VSee and iDoc | |||
COMMITMENTS AND CONTINGENCIES | |||
Percentage of common stock issued as consideration | 100% | 100% | 100% |
Equity value of acquiree | $ 110,000,000 | $ 110,000,000 | |
Business Combination Agreement | |||
COMMITMENTS AND CONTINGENCIES | |||
Minimum net tangible assets upon closing | $ 5,000,001 | ||
Business Combination Agreement | Vsee Health Incentive Plan | |||
COMMITMENTS AND CONTINGENCIES | |||
Percentage of shares reserved for issuance | 15% | 15% | |
Business Combination Agreement | iDoc | |||
COMMITMENTS AND CONTINGENCIES | |||
Percentage of common stock issued as consideration | 100% | 100% | |
Numerator for calculation of closing consideration | $ 49,500,000 | $ 49,500,000 | |
Business Combination Agreement | Vsee | |||
COMMITMENTS AND CONTINGENCIES | |||
Exercise price of stock options | $ / shares | 10 | 10 | |
Numerator for calculation of closing consideration | $ 60,500,000 | $ 60,500,000 | |
Closing consideration, multiplication factor for calculation of amount of stock option exercisable | $ / shares | $ 10 | $ 10 | |
PIPE Securities Purchase Agreement | |||
COMMITMENTS AND CONTINGENCIES | |||
Fair value of PIPE Forward Contract | $ 84,605 | ||
PIPE Securities Purchase Agreement | PIPE Investors | |||
COMMITMENTS AND CONTINGENCIES | |||
Exercise price of warrants | $ / shares | $ 12.50 | $ 12.50 | |
Exercise period | 5 years | 5 years | |
Conversion price of convertible notes | $ / shares | $ 10 | $ 10 | |
Minimum aggregate purchase price of additional offering | $ 10,000,000 | $ 10,000,000 | |
Minimum gross proceeds of Notes to be paid in cash for consummation of subsequent placements | $ 5,000,000 | $ 5,000,000 | |
Percentage of additional offering securities in additional offerings | 100% | 100% | |
Percentage of offered securities in subsequent placements | 25% | 25% | |
Lock-up period (in months) | 8 months | 8 months | |
Stock price trigger | $ / shares | $ 12.50 | $ 12.50 | |
Agreement number of consecutive trading days | D | 20 | 20 | |
PIPE Registration Rights Agreement | |||
COMMITMENTS AND CONTINGENCIES | |||
Minimum percentage of shares issuable upon conversion of PIPE shares and warrants | 200% | 200% | |
Threshold number of days to file a registration statement | 30 days | 30 days | |
Threshold days for registration statement to be effective | 90 days | 90 days | |
Threshold days for registration statement to be effective if undergone review | 120 days | 120 days | |
Vsee Common Stock | Business Combination Agreement | Vsee | |||
COMMITMENTS AND CONTINGENCIES | |||
Percentage of common stock issued as consideration | 100% | 100% | |
Series A Preferred Stock | PIPE Securities Purchase Agreement | |||
COMMITMENTS AND CONTINGENCIES | |||
Sale of Private Placement Warrants (in shares) | shares | 424,000 | 424,000 | |
Aggregate purchase price | $ 8,000,000 | $ 8,000,000 | |
Series A Preferred Stock | PIPE Securities Purchase Agreement | PIPE Investors | |||
COMMITMENTS AND CONTINGENCIES | |||
Number of shares issued | shares | 8,000 | 8,000 | |
Series B Preferred Stock | Securities Purchase Agreement | |||
COMMITMENTS AND CONTINGENCIES | |||
Number of shares issued | shares | 4,370 | 4,370 | |
Deferred underwriting fee considered for purchase price of shares | $ 4,370,000 | $ 4,370,000 |
COMMITMENTS - Bridge Securities
COMMITMENTS - Bridge Securities Purchase Agreement (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Oct. 06, 2022 USD ($) instrument $ / shares shares | Sep. 30, 2023 USD ($) $ / shares shares | Sep. 30, 2023 USD ($) $ / shares shares | Dec. 31, 2022 USD ($) $ / shares shares | May 05, 2023 USD ($) | |
RELATED PARTY TRANSACTIONS | |||||
Number of warrants issued | shares | 173,913 | ||||
Number of shares issuable per warrant | shares | 1 | 1 | 1 | ||
Exercise price | $ / shares | $ 11.50 | $ 11.50 | $ 11.50 | ||
Amount of proceeds received | $ 800,000 | ||||
Amount of direct cost attributable to the financing | $ 10,000 | 61,800 | |||
Interest expense | 125,980 | ||||
Bridge Warrants | |||||
RELATED PARTY TRANSACTIONS | |||||
Warrants outstanding | $ 8,552 | $ 2,461 | |||
Net of offering cost | $ 613 | 82 | |||
Bridge Notes | |||||
RELATED PARTY TRANSACTIONS | |||||
Interest expense | $ 133,139 | 399,415 | |||
Bridge Securities Purchase Agreement | |||||
RELATED PARTY TRANSACTIONS | |||||
Number of shares issued | shares | 30,000 | ||||
Amortizable Discount | $ 443,665 | 175,472 | |||
Amount of financing costs | 40,811 | 56,993 | |||
Warrants outstanding | 284,424 | 76,102 | |||
Net of offering cost | $ 20,376 | 2,542 | |||
Bridge Securities Purchase Agreement | Bridge Warrants | |||||
RELATED PARTY TRANSACTIONS | |||||
Number of warrants issued | shares | 173,913 | ||||
Number of shares issuable per warrant | shares | 1 | ||||
Exercise price | $ / shares | $ 11.50 | ||||
Relative value attributed to the Bridge Warrants | $ 9,165 | 40,130 | |||
Relative value attributed to the Bridge Shares | 304,800 | 78,349 | |||
Originally issued discount | 88,889 | $ 50,000 | |||
Bridge Securities Purchase Agreement | Bridge Notes | |||||
RELATED PARTY TRANSACTIONS | |||||
Aggregate principal amount | 2,222,222 | ||||
Amount allocated | $ 888,889 | ||||
Interest rate (in percent) | 10% | ||||
Percentage of unpaid principal due and payable if PIPE Financing closes in connection with the closing of the Business Combination | 110% | ||||
Percentage of unpaid principal due and payable if PIPE Financing closes in connection with the closing of the Business Combination | 10% | ||||
Number of instruments for which relative fair value basis used | instrument | 3 | ||||
Fair value of derivative issuance | $ 278,404 | ||||
Amount of proceeds received | 738,200 | ||||
Amount of direct cost attributable to the financing | 61,800 | ||||
Principal due | $ 610,485 | ||||
Amount net of unamortized debt discount | 692,216 | 692,216 | 292,800 | ||
Amortized debt discount | 332,749 | 104,953 | |||
Accrued interest | $ 66,666 | 66,666 | 21,027 | ||
Interest expense | $ 399,415 | $ 125,980 | |||
Bridge Securities Purchase Agreement | Bridge Notes | Bridge Warrants | |||||
RELATED PARTY TRANSACTIONS | |||||
Original issue discount (in percent) | 10% |
STOCKHOLDERS' DEFICIT - Common
STOCKHOLDERS' DEFICIT - Common Stock Shares (Details) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||
May 05, 2023 shares | Oct. 06, 2022 shares | Jun. 07, 2021 USD ($) shares | Feb. 28, 2023 shares | Mar. 31, 2023 USD ($) shares | Sep. 30, 2023 USD ($) Vote shares | Dec. 31, 2021 USD ($) $ / shares shares | Dec. 31, 2022 USD ($) Vote $ / shares shares | Oct. 20, 2022 shares | Nov. 08, 2021 shares | Oct. 31, 2021 shares | |
Class of Stock | |||||||||||
Common stock, shares authorized (in shares) | 50,000,000 | 50,000,000 | |||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | |||||||||
Common shares, votes per share | Vote | 1 | 1 | |||||||||
Common stock, shares issued (in shares) | 10,805,877 | ||||||||||
Aggregate purchase price | $ | $ 214,200 | $ 25,000 | $ 284,424 | ||||||||
Common stock, shares outstanding (in shares) | 4,156,123 | ||||||||||
Condition for future business combination threshold net tangible assets | $ | $ 5,000,001 | $ 5,000,001 | |||||||||
Months to complete acquisition | 21 months | 18 months | |||||||||
Redemption period upon closure | 10 days | 10 days | |||||||||
Obligation to redeem Public Shares if entity does not complete a business combination (as a percent) | 100% | ||||||||||
Common Stock | |||||||||||
Class of Stock | |||||||||||
Number of shares issued | 7,000 | 30,000 | 20,000 | 20,000 | 2,875,000 | 30,000 | |||||
Aggregate purchase price | $ | $ 2 | $ 288 | $ 3 | ||||||||
Private Placement | |||||||||||
Class of Stock | |||||||||||
Common stock, shares issued (in shares) | 557,000 | 557,000 | |||||||||
Sponsor | |||||||||||
Class of Stock | |||||||||||
Obligation to redeem Public Shares if entity does not complete a business combination (as a percent) | 100% | 100% | |||||||||
Sponsor | Founder shares | |||||||||||
Class of Stock | |||||||||||
Number of shares issued | 4,312,500 | ||||||||||
Aggregate purchase price | $ | $ 25,000 | ||||||||||
Shares subject to forfeiture | 1,437,500 | ||||||||||
Common stock, shares outstanding (in shares) | 2,875,000 | ||||||||||
Common stock subject to redemption | |||||||||||
Class of Stock | |||||||||||
Common stock subject to possible redemption, issued (in shares) | 694,123 | 11,500,000 | 694,123 | ||||||||
Shares subject to redemption | 694,123 | 11,500,000 | 694,123 | 694,123 | |||||||
Common stock subject to not redemption | |||||||||||
Class of Stock | |||||||||||
Common stock, shares issued (in shares) | 3,432,000 | 3,462,000 | |||||||||
Common stock, shares outstanding (in shares) | 3,432,000 | 3,462,000 |
WARRANTS (Details)
WARRANTS (Details) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2023 D Vote $ / shares shares | Dec. 31, 2022 D Vote $ / shares shares | Dec. 31, 2021 shares | |
WARRANTS | |||
Warrants outstanding | shares | 12,057,000 | 12,057,000 | |
Number of shares issuable per warrant | shares | 1 | 1 | |
Exercise price | $ 11.50 | $ 11.50 | |
Warrant exercise period condition one | 30 days | 30 days | |
Warrant exercise period condition two | 12 months | 12 months | |
Warrants exercisable for cash | shares | 0 | 0 | |
Number of trading days to calculate fair market value of warrants | D | 5 | 5 | |
Public warrants expiration term | 5 years | 5 years | |
Warrant redemption condition minimum share price | $ 18 | $ 18 | |
Share price trigger used to measure dilution of warrant | $ 9.20 | $ 9.20 | |
Percentage of gross new proceeds to total equity proceeds used to measure dilution of warrant | 60 | 60 | |
Warrant exercise price adjustment multiple | 115 | 115 | |
Warrant redemption price adjustment multiple | 180 | 180 | |
Common shares, votes per share | Vote | 1 | 1 | |
Warrant exercise restriction threshold | 9.8 | 9.8 | |
Fractional shares issued | shares | 0 | 0 | |
Public Warrants | |||
WARRANTS | |||
Redemption price per public warrant (in dollars per share) | $ 0.01 | ||
Redemption period | 30 days | ||
Warrant redemption condition minimum share price | $ 18 | ||
Threshold trading days for redemption of public warrants | 20 days | ||
Threshold consecutive trading days for redemption of public warrants | D | 30 |
WARRANTS - Bridge Warrants (Det
WARRANTS - Bridge Warrants (Details) - $ / shares | 12 Months Ended | ||
Oct. 06, 2022 | Dec. 31, 2022 | Sep. 30, 2023 | |
WARRANTS | |||
Number of warrants issued | 173,913 | ||
Exercise period | 5 years | 5 years | |
Exercise price | $ 11.50 | $ 11.50 | |
Bridge Securities Purchase Agreement | Bridge Warrants | |||
WARRANTS | |||
Number of warrants issued | 173,913 | ||
Exercise period | 5 years | ||
Exercise price | $ 11.50 | ||
Minimum percentage of increase or decrease in in aggregate number of shares of Common Stock purchasable upon exercise of all Bridge Warrants for adjustment in the number of shares of Common Stock receivable upon exercise of the Bridge Warrant | 0.10% |
INCOME TAX - Schedule Net Defer
INCOME TAX - Schedule Net Deferred Tax Assets (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Deferred tax assets | ||
Net operating loss carryforward | $ (379) | $ 5,846 |
Start-up/organization Expenses | 962,297 | 60,961 |
Total deferred tax assets | 961,918 | 66,807 |
Valuation allowance | $ (961,918) | $ (66,807) |
INCOME TAX - Schedule of Income
INCOME TAX - Schedule of Income Tax Provision (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | |
Federal | ||||
Current | $ 187,225 | |||
Deferred | $ (58,947) | (741,805) | ||
State | ||||
Deferred | (7,860) | (153,306) | ||
Change in valuation allowance | $ 66,807 | 895,111 | ||
Income tax provision | $ 83,026 | $ 83,026 | $ 187,225 |
INCOME TAX - Summary of reconci
INCOME TAX - Summary of reconciliation of the federal income tax rate to the Company's effective tax rate (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | |
INCOME TAX | ||||||
Statutory federal income tax rate | 21% | 21% | 21% | 21% | 21% | 21% |
State taxes, net of federal tax benefit | 2.80% | 4.30% | ||||
Change in fair value of Bridge Note- bifurcated derivative | 0% | (0.70%) | ||||
Change in fair value of PIPE forward contract derivatives | 0% | (1.40%) | ||||
Change in valuation allowance | (23.80%) | (29.30%) | ||||
Income tax provision | (0.00%) | (11.25%) | (0.00%) | (4.31%) | (0.00%) | (6.10%) |
INCOME TAX (Details)
INCOME TAX (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Dec. 31, 2021 | Dec. 31, 2022 | |
INCOME TAX | ||
Operating loss carryforwards | $ 24,565 | $ 0 |
Change in valuation allowance | $ 66,807 | $ 895,111 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Assets: | |||
Assets Held-in-trust, Noncurrent | $ 8,119,642 | $ 7,527,369 | $ 116,726,978 |
U.S. Treasury Securities | |||
Assets: | |||
Cash held in the Trust Account | 959 | ||
Assets Held-in-trust, Noncurrent | 116,726,019 | ||
Money Market Funds | |||
Assets: | |||
Assets Held-in-trust, Noncurrent | 8,119,642 | 7,527,369 | |
Level 1 | U.S. Treasury Securities | |||
Debt Securities, Held-to-maturity, Fair Value to Amortized Cost | |||
Amortized Cost | 116,726,019 | ||
Gross Holding Loss | (3,097) | ||
Fair Value | $ 116,722,922 | ||
Level 1 | Money Market Funds | |||
Debt Securities, Held-to-maturity, Fair Value to Amortized Cost | |||
Fair Value | $ 8,119,642 | $ 7,527,369 |
FAIR VALUE MEASUREMENTS - Fair
FAIR VALUE MEASUREMENTS - Fair value information on recurring basis (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Sep. 30, 2023 | Dec. 31, 2022 | |
FAIR VALUE MEASUREMENTS | |||
PIPE Forward Contract | $ (700,506) | $ (170,666) | $ 170,666 |
Bridge Note - Bifurcated Derivative | 364,711 | ||
Level 3 | |||
FAIR VALUE MEASUREMENTS | |||
PIPE Forward Contract | 170,666 | ||
Bridge Note - Bifurcated Derivative | $ 364,711 |
FAIR VALUE MEASUREMENTS - Monte
FAIR VALUE MEASUREMENTS - Monte Carlo simulation model for Bridge Note Bifurcate Derivative (Details) | 1 Months Ended | 12 Months Ended | |||
Oct. 06, 2022 | Oct. 05, 2022 | Dec. 31, 2022 | Dec. 31, 2022 | Sep. 30, 2023 | |
FAIR VALUE MEASUREMENTS | |||||
Probability of completing a business combination | 90% | 95% | |||
Level 3 | |||||
FAIR VALUE MEASUREMENTS | |||||
CCC bond rates | 14.09% | 15.09% | 15.09% | 13.31% | |
Probability of early termination/repayment -business combination not completed | 10% | 5% | 5% | 5% | |
Probability of early termination/repayment -business combination completed or PIPE completed | 90% | 95% | 95% | 80% | |
Level 3 | Probability of completing a business combination by March 31, 2023 | |||||
FAIR VALUE MEASUREMENTS | |||||
Probability of completing a business combination | 50% | 50% | 50% | ||
Level 3 | Probability of completing a business combination by June 30, 2023 | |||||
FAIR VALUE MEASUREMENTS | |||||
Probability of completing a business combination | 50% | 50% | 50% |
FAIR VALUE MEASUREMENTS - PIPE
FAIR VALUE MEASUREMENTS - PIPE Forward Contract (Details) | 1 Months Ended | 9 Months Ended | ||
May 05, 2023 | Oct. 06, 2022 | Dec. 31, 2022 | Sep. 30, 2023 | |
FAIR VALUE MEASUREMENTS | ||||
Risk-fee interest rate | 5.12% | 4% | 4.76% | 5.53% |
Expected term (years) | 4 months 17 days | 7 months 9 days | 4 months 13 days | 3 months |
Probability of completing a business combination | 90% | 95% |
FAIR VALUE MEASUREMENTS - Fai_2
FAIR VALUE MEASUREMENTS - Fair value of the level 3 financial liabilities (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended |
Dec. 31, 2022 | Sep. 30, 2023 | Dec. 31, 2022 | |
FAIR VALUE MEASUREMENTS | |||
Change in fair value of derivative | $ 86,307 | ||
PIPE Forward Contract | |||
FAIR VALUE MEASUREMENTS | |||
Fair value, Initial measurement at the beginning | $ 170,666 | ||
Change in fair value of derivative | $ 170,666 | (170,666) | |
Fair value, Initial measurement at the ending | 170,666 | 170,666 | |
Bridge Loan | |||
FAIR VALUE MEASUREMENTS | |||
Fair value, Initial measurement at the beginning | 278,404 | $ 364,711 | |
Change in fair value of derivative | 86,307 | ||
Fair value, Initial measurement at the ending | $ 364,711 | $ 364,711 |
FAIR VALUE MEASUREMENTS - Addit
FAIR VALUE MEASUREMENTS - Additional information (Details) - USD ($) | 9 Months Ended | 12 Months Ended | |||
Nov. 08, 2021 | Mar. 31, 2021 | Sep. 30, 2023 | Dec. 31, 2021 | Dec. 31, 2022 | |
FAIR VALUE MEASUREMENTS | |||||
Assets held in trust account | $ 8,119,642 | $ 116,726,978 | $ 7,527,369 | ||
Redemption of common stock | $ 110,472,254 | ||||
Number of shares redeemed | 10,805,877 | 10,805,877 | 10,805,877 | ||
Transfers between Level 1 and Level 2 | $ 0 | $ 0 | 0 | $ 0 | |
Transfers between Level 2 and Level 1 | 0 | 0 | 0 | 0 | |
Transfers in of level 3 | 0 | 0 | 0 | 0 | |
Transfers Out of level 3 | $ 0 | 0 | $ 0 | 0 | |
Money Market Funds | |||||
FAIR VALUE MEASUREMENTS | |||||
Assets held in trust account | $ 8,119,642 | $ 7,527,369 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) | 9 Months Ended | ||||||
Sep. 27, 2023 USD ($) | May 23, 2023 USD ($) | Mar. 31, 2023 USD ($) shares | Feb. 02, 2023 item | Jan. 18, 2023 USD ($) shares | Sep. 30, 2023 shares | Dec. 31, 2022 shares | |
SUBSEQUENT EVENTS | |||||||
Number of consecutive trading days prior to the date of the Letter | 30 days | ||||||
Minimum Market Value of Listed Securities | $ | $ 50,000,000 | $ 15,000,000 | |||||
Number of consecutive business days during the compliance period | 10 days | ||||||
Backstop Agreement | Series A Preferred Stock | |||||||
SUBSEQUENT EVENTS | |||||||
Number of shares to be issued | 7,000 | ||||||
PIPE Securities Purchase Agreement | Series A Preferred Stock | |||||||
SUBSEQUENT EVENTS | |||||||
Number of warrants to purchase shares issued | 424,000 | 424,000 | |||||
Maximum number of shares issuable | 15,000 | ||||||
Maximum | Backstop Agreement | |||||||
SUBSEQUENT EVENTS | |||||||
Number of warrants to purchase shares issued | 106,000 | ||||||
Maximum | Backstop Agreement | Series A Preferred Stock | |||||||
SUBSEQUENT EVENTS | |||||||
Number of shares to be issued | 2,000 | 2,000 | |||||
Subsequent event | |||||||
SUBSEQUENT EVENTS | |||||||
Extension period (in months) | 3 months | ||||||
Number of extensions permitted | item | 3 | ||||||
Number of consecutive trading days prior to the date of the Letter | 30 days | ||||||
Minimum Market Value of Listed Securities | $ | $ 50,000,000 | $ 50,000,000 | |||||
Number of consecutive business days during the compliance period | 10 days | ||||||
Subsequent event | Backstop Agreement | |||||||
SUBSEQUENT EVENTS | |||||||
Aggregate purchase price | $ | $ 15,000,000 | ||||||
Subsequent event | Backstop Agreement | Series A Preferred Stock | |||||||
SUBSEQUENT EVENTS | |||||||
Number of shares to be issued | 7,000 | ||||||
Number of preferred stock converted to into common stock | 234,260 | ||||||
Subsequent event | Maximum | Backstop Agreement | |||||||
SUBSEQUENT EVENTS | |||||||
Number of warrants to purchase shares issued | 106,000 | ||||||
Aggregate purchase price | $ | $ 2,000,000 | ||||||
Additional PIPE financing | $ | $ 7,000,000 | ||||||
Subsequent event | Maximum | Backstop Agreement | Series A Preferred Stock | |||||||
SUBSEQUENT EVENTS | |||||||
Number of shares to be issued | 2,000 | 2,000 | |||||
Subsequent event | Unsecured promissory note | |||||||
SUBSEQUENT EVENTS | |||||||
Aggregate principal amount | $ | $ 250,000 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash | $ 507 | $ 106,998 |
Prepaid expenses | 17,500 | |
Total current assets | 18,007 | 106,998 |
Investments held in Trust Account | 8,119,642 | 7,527,369 |
Total Assets | 8,137,649 | 7,634,367 |
Current liabilities: | ||
Accounts payable and accrued expenses | 2,630,100 | 1,886,312 |
Income taxes payable | 187,225 | 187,225 |
Advances from related parties | 138,937 | 43,900 |
Net of discount | 292,800 | |
Promissory note - related party | 926,500 | 350,000 |
Bifurcated Derivative | 364,711 | |
PIPE Forward Contract Derivative | 170,666 | |
Total current liabilities | 5,022,029 | 3,295,614 |
Deferred underwriting fee payable | 4,370,000 | 4,370,000 |
Total Liabilities | 9,392,029 | 7,665,614 |
Commitments | ||
Common stock subject to possible redemption, 0.0001 par value; 694,123 shares issued and outstanding at redemption value of $11.37 and $10.65 per share as of September 30, 2023 and December 31, 2022, respectively | 7,894,214 | 7,395,349 |
Stockholders' Deficit | ||
Common stock, $0.0001 par value; 50,000,000 shares authorized; 3,489,000 and 3,462,000 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively (excluding 694,123 shares subject to possible redemption as of September 30, 2023 and December 31, 2022) | 350 | 347 |
Additional paid-in capital | 292,973 | |
Accumulated deficit | (9,771,586) | (7,719,916) |
Total Stockholders' Deficit | (9,148,594) | (7,426,596) |
TOTAL LIABILITIES, COMMON STOCK SUBJECT TO POSSIBLE REDEMPTION AND STOCKHOLDERS' DEFICIT | 7,634,367 | |
Bridge Notes | ||
Current liabilities: | ||
Net of discount | 692,216 | 292,800 |
Bifurcated Derivative | 241,447 | 364,711 |
Investor Note | ||
Current liabilities: | ||
Net of discount | 182,799 | |
Bifurcated Derivative | 22,805 | |
Stockholders' Deficit | ||
Total Stockholders' Deficit | (9,148,594) | |
Common stock subject to possible redemption | ||
Current liabilities: | ||
Common stock subject to possible redemption, 0.0001 par value; 694,123 shares issued and outstanding at redemption value of $11.37 and $10.65 per share as of September 30, 2023 and December 31, 2022, respectively | 7,894,214 | 7,395,349 |
Stockholders' Deficit | ||
Additional paid-in capital | 622,642 | 292,973 |
Common Stock Not Subject to Possible Redemption | ||
Stockholders' Deficit | ||
TOTAL LIABILITIES, COMMON STOCK SUBJECT TO POSSIBLE REDEMPTION AND STOCKHOLDERS' DEFICIT | $ 8,137,649 | $ 7,634,367 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2023 | Dec. 31, 2022 |
Common stock, par value (in dollars per share) | $ 0.0001 | |
Common stock, shares authorized | 50,000,000 | |
Common Stock Not Subject to Possible Redemption | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 3,489,000 | 3,462,000 |
Common stock, shares outstanding | 3,489,000 | 3,462,000 |
Common stock subject to possible redemption | ||
Common stock subject to possible redemption, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock subject to possible redemption, shares issued | 694,123 | 694,123 |
Common stock subject to possible redemption, shares outstanding | 694,123 | 694,123 |
Redemption price per share | $ 11.37 | $ 10.65 |
UNAUDITED CONDENSED CONSOLIDATE
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||
Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2022 | |
Formation and operational costs | $ 518,084 | $ 1,129,361 | $ 1,668,105 | $ 2,394,702 | $ 282,671 | $ 3,594,967 | |||||
Loss from operations | (518,084) | (1,129,361) | (1,668,105) | (2,394,702) | (282,671) | (3,594,967) | |||||
Other (expense) income: | |||||||||||
Interest expense | (125,980) | ||||||||||
Change in fair value | (86,307) | ||||||||||
Change in fair value of PIPE Forward Contract Derivative | 700,506 | 170,666 | (170,666) | ||||||||
Interest earned on investment held in Trust Account | 104,413 | 391,628 | 301,860 | 470,150 | 1,970 | 922,644 | |||||
Total other (expense) income | 596,371 | 391,628 | 115,300 | 470,150 | 1,970 | 539,691 | |||||
Income (loss) before provision for income taxes | 78,287 | (737,733) | (1,552,805) | (1,924,552) | (280,701) | (3,055,276) | |||||
Provision for income taxes | (83,026) | (83,026) | (187,225) | ||||||||
Net income (loss) | $ 78,287 | $ 263,550 | $ (1,894,642) | $ (820,759) | $ (659,459) | $ (527,360) | $ (1,552,805) | $ (2,007,578) | $ (280,701) | $ (3,242,501) | |
Basic weighted average shares outstanding | 4,183,123 | 14,932,000 | 4,177,427 | 14,932,000 | 3,981,054 | 12,741,219 | |||||
Diluted weighted average shares outstanding | 4,183,123 | 14,932,000 | 4,177,427 | 14,932,000 | 3,981,054 | 12,741,219 | |||||
Basic net income (loss) per share | $ 0.02 | $ (0.05) | $ (0.37) | $ (0.13) | $ (0.07) | $ (0.25) | |||||
Diluted net income (loss) per share | $ 0.02 | $ (0.05) | $ (0.37) | $ (0.13) | $ (0.07) | $ (0.25) | |||||
Bridge Notes | |||||||||||
Other (expense) income: | |||||||||||
Interest expense | $ (133,139) | $ (399,415) | |||||||||
Change in fair value | (28,838) | 123,265 | |||||||||
Investor Note | |||||||||||
Other (expense) income: | |||||||||||
Interest expense | (51,368) | (82,773) | |||||||||
Change in fair value | $ 4,796 | $ 1,697 |
UNAUDITED CONDENSED CONSOLIDA_2
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT - USD ($) | Common Stock Investor Note | Common Stock | Additional Paid-in Capital Investor Note | Additional Paid-in Capital | Accumulated Deficit Investor Note | Accumulated Deficit | May 2023 Note | Investor Note | Total |
Balance at the beginning at Mar. 29, 2021 | $ 0 | $ 0 | $ 0 | $ 0 | |||||
Increase (Decrease) in Stockholders' Equity | |||||||||
Change in value of common stock subject to redemption | (18,078,211) | (3,054,111) | (21,132,322) | ||||||
Issuance of shares, net of offering cost | $ 288 | 24,712 | 25,000 | ||||||
Issuance of shares, net of offering cost (in shares) | 2,875,000 | ||||||||
Net loss | (280,701) | (280,701) | |||||||
Balance at the end at Dec. 31, 2021 | $ 344 | 0 | (3,334,812) | (3,334,468) | |||||
Balance at the end (in shares) at Dec. 31, 2021 | 3,432,000 | ||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||
Net loss | (527,360) | (527,360) | |||||||
Balance at the end at Mar. 31, 2022 | $ 344 | 0 | (3,862,172) | (3,861,828) | |||||
Balance at the end (in shares) at Mar. 31, 2022 | 3,432,000 | ||||||||
Balance at the beginning at Dec. 31, 2021 | $ 344 | 0 | (3,334,812) | (3,334,468) | |||||
Balance at the beginning (in shares) at Dec. 31, 2021 | 3,432,000 | ||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||
Net loss | (2,007,578) | ||||||||
Balance at the end at Sep. 30, 2022 | $ 344 | (5,587,024) | (5,586,680) | ||||||
Balance at the end (in shares) at Sep. 30, 2022 | 3,432,000 | ||||||||
Balance at the beginning at Dec. 31, 2021 | $ 344 | 0 | (3,334,812) | (3,334,468) | |||||
Balance at the beginning (in shares) at Dec. 31, 2021 | 3,432,000 | ||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||
Change in value of common stock subject to redemption | (1,142,603) | (1,142,603) | |||||||
Issuance of shares, net of offering cost | $ 3 | 284,421 | 284,424 | ||||||
Issuance of shares, net of offering cost (in shares) | 30,000 | ||||||||
Net loss | (3,242,501) | (3,242,501) | |||||||
Balance at the end at Dec. 31, 2022 | $ 347 | 292,973 | (7,719,916) | (7,426,596) | |||||
Balance at the end (in shares) at Dec. 31, 2022 | 3,462,000 | ||||||||
Balance at the beginning at Mar. 31, 2022 | $ 344 | 0 | (3,862,172) | (3,861,828) | |||||
Balance at the beginning (in shares) at Mar. 31, 2022 | 3,432,000 | ||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||
Net loss | (659,459) | (659,459) | |||||||
Balance at the end at Jun. 30, 2022 | $ 344 | 0 | (4,521,631) | (4,521,287) | |||||
Balance at the end (in shares) at Jun. 30, 2022 | 3,432,000 | ||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||
Change in value of common stock subject to redemption | (244,634) | (244,634) | |||||||
Net loss | (820,759) | (820,759) | |||||||
Balance at the end at Sep. 30, 2022 | $ 344 | (5,587,024) | (5,586,680) | ||||||
Balance at the end (in shares) at Sep. 30, 2022 | 3,432,000 | ||||||||
Balance at the beginning at Dec. 31, 2022 | $ 347 | 292,973 | (7,719,916) | (7,426,596) | |||||
Balance at the beginning (in shares) at Dec. 31, 2022 | 3,462,000 | ||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||
Issuance of shares, net of offering cost | $ 2 | 214,198 | 214,200 | ||||||
Issuance of shares, net of offering cost (in shares) | 20,000 | ||||||||
Net loss | (1,894,642) | (1,894,642) | |||||||
Balance at the end at Mar. 31, 2023 | $ 349 | 507,171 | (9,614,558) | (9,107,038) | |||||
Balance at the end (in shares) at Mar. 31, 2023 | 3,482,000 | ||||||||
Balance at the beginning at Dec. 31, 2022 | $ 347 | 292,973 | (7,719,916) | (7,426,596) | |||||
Balance at the beginning (in shares) at Dec. 31, 2022 | 3,462,000 | ||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||
Net loss | (1,552,805) | ||||||||
Balance at the end at Sep. 30, 2023 | $ 350 | $ 622,642 | $ (9,771,586) | $ (9,148,594) | (9,148,594) | ||||
Balance at the end (in shares) at Sep. 30, 2023 | 3,489,000 | ||||||||
Balance at the beginning at Mar. 31, 2023 | $ 349 | 507,171 | (9,614,558) | (9,107,038) | |||||
Balance at the beginning (in shares) at Mar. 31, 2023 | 3,482,000 | ||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||
Change in value of common stock subject to redemption | (403,953) | (403,953) | |||||||
Issuance of shares, net of offering cost | $ 1 | 115,471 | 115,472 | ||||||
Issuance of shares, net of offering cost (in shares) | 7,000 | ||||||||
Net loss | 263,550 | 263,550 | |||||||
Balance at the end at Jun. 30, 2023 | $ 350 | $ 622,642 | (9,754,961) | (9,131,969) | |||||
Balance at the end (in shares) at Jun. 30, 2023 | 3,489,000 | ||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||
Change in value of common stock subject to redemption | (94,912) | (94,912) | |||||||
Issuance of shares, net of offering cost (in shares) | 7,000 | ||||||||
Net loss | $ 78,287 | 78,287 | |||||||
Balance at the end at Sep. 30, 2023 | $ 350 | $ 622,642 | $ (9,771,586) | $ (9,148,594) | $ (9,148,594) | ||||
Balance at the end (in shares) at Sep. 30, 2023 | 3,489,000 |
UNAUDITED CONDENSED CONSOLIDA_3
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT (Parenthetical) - shares | 3 Months Ended | |
Sep. 30, 2023 | Mar. 31, 2023 | |
May 2023 Note | ||
Number of shares issued | 7,000 | |
Common Stock | ||
Number of shares issued | 20,000 |
UNAUDITED CONDENSED CONSOLIDA_4
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Cash Flows from Operating Activities: | ||
Net loss | $ (1,552,805) | $ (2,007,578) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Interest earned on investments held in Trust Account | (301,859) | (470,150) |
Change in fair value of PIPE Forward Contract Derivative | (170,666) | |
Changes in operating assets and liabilities: | ||
Prepaid and other current assets | (17,500) | 397,231 |
Accounts payable and accrued expenses | 957,989 | 1,282,429 |
Advances from related parties | 87,037 | |
Income taxes payable | 83,026 | |
Net cash used in operating activities | (640,577) | (715,042) |
Cash Flows from Investing Activities: | ||
Investment of cash into Trust Account | (350,000) | |
Cash withdrawn from Trust Account to pay franchise and income taxes | 59,586 | |
Net cash used in investing activities | (290,414) | |
Cash Flows from Financing Activities: | ||
Advances from related party | 8,000 | |
Proceeds from promissory note - related party | 576,500 | |
Proceeds from promissory note | 250,000 | |
Financing costs paid - promissory note | (10,000) | |
Net cash provided by financing activities | 824,500 | |
Net Change in Cash | (106,491) | (715,042) |
Cash - Beginning of period | 106,998 | 760,012 |
Cash - End of period | 507 | $ 44,970 |
Non-cash investing and financing activities: | ||
Common stock issued from legal settlement | 214,200 | |
Financing costs included | 60,000 | |
Warrants issued as financing cost | 40,130 | |
Common stock issued as financing cost in Note | 78,349 | |
Bridge Notes | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Change in fair value of derivative | (123,265) | |
Changes in operating assets and liabilities: | ||
Accrued interest expense | 399,416 | |
Investor Note | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Change in fair value of derivative | (1,697) | |
Changes in operating assets and liabilities: | ||
Accrued interest expense | $ 82,773 |
DESCRIPTION OF ORGANIZATION A_3
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | ||
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS Digital Health Acquisition Corp. (the “Company” or “DHAC”) is a blank check company incorporated as a Delaware corporation on March 30, 2021. The Company was incorporated for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar Business Combination with one or more businesses (the “Business Combination”). On June 9, 2022, DHAC Merger Sub I, Inc. (“Merger Sub I”), a Delaware corporation and a wholly owned subsidiary of the Company, was formed. On June 9, 2022, DHAC Merger Sub II, Inc. (“Merger Sub II”), a Texas corporation and a wholly owned subsidiary of the Company, was formed. As of September 30, 2023, the Company had not commenced any significant operations. All activity for the period from inception, the date which operations commenced, through September 30, 2023 relates to the Company’s formation, the Company’s Initial Public Offering (as defined below), and 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 generates non-operating income in the form of interest income from the proceeds derived from the Initial Public Offering (as defined below). The registration statement for the Company’s Initial Public Offering was declared effective on November 3, 2021. On November 8, 2021, the Company consummated the Initial Public Offering of 11,500,000 units (the “Units” and, with respect to the shares of common stock included in the Units sold, the “Public Shares”), which includes the full exercise by the underwriter of its over-allotment option in the amount of 1,500,000 Units, at $10.00 per Unit, generating gross proceeds of $115,000,000 , which is described in Note 3. On October 20, 2022, in connection with the stockholders meeting to approve the extension, 10,805,877 shares of DHAC’s common stock were redeemed leaving 694,123 shares subject to redemption. Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of 557,000 units (each, a “Private Placement Unit” and, collectively, the “Private Placement Units”) at a price of $10.00 per Private Placement Unit in a private placement to Digital Health Sponsor LLC (the “Sponsor”), generating gross proceeds of $5,570,000 , which is described in Note 4. As of November 8, 2021, the Company received $3,680,000 from the proceeds of the Private Placement and recorded $1,890,000 in subscription receivable. The Sponsor paid the subscription in full on November 12, 2021. Transaction costs amounted to $6,877,164 , consisting of $1,955,000 of underwriting fees, $4,370,000 of deferred underwriting fees and $552,164 of other offering costs. In addition, cash of $9,478 was held outside of the Trust Account (as defined below) and is available for the payment of offering costs and for working capital purposes. Following the closing of the Initial Public Offering on November 8, 2021, an amount of $116,725,000 ( $10.15 per Unit) from the net proceeds of the sale of the Units in the Initial Public Offering and the sale of the Private Placement Units was placed in a trust account (the “Trust Account”), invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 185 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 of 1940, as amended (the “Investment Company Act”). The Trust Account is intended as a holding place for funds pending the earliest to occur of either (i) the completion of the initial Business Combination; (ii) 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 (A) to modify the substance or timing of the Company’s obligation to allow redemption in connection with the initial Business Combination or to redeem 100% of the Company’s public shares if the Company does not complete the initial Business Combination within 21 months from the closing of the Initial Public Offering (as currently extended and as may be further extended in accordance with the Amended and Restated Certificate of Incorporation) or (B) with respect to any other material provisions relating to stockholders’ rights or pre-initial Business Combination activity; or (iii) absent an initial Business Combination within 21 months from the closing of the Initial Public Offering (as currently extended and as may be further extended in accordance with the Amended and Restated Certificate of Incorporation), the Company’s return of the funds held in the Trust Account to the Company’s public stockholders as part of the Company’s redemption of the public shares. On October 20, 2022, stockholders of DHAC approved a proposal to amend DHAC’s amended and restated certificate of incorporation to (a) extend the date by which DHAC has to consummate a business combination (the “Extension”) for an additional three (3) months, from November 8, 2022 to February 8, 2023, (b) provide DHAC’s board of directors the ability to further extend the date by which DHAC has to consummate a business combination up to three (3) additional times for three (3) months each time, for a maximum of nine (9) additional months if the Sponsor pays an amount equal to $350,000 for each three-month extension (the “Extension Fee”), which amount shall be deposited in the trust account of DHAC; provided, that if as of the time of an extension DHAC has filed a Form S-4 registration statement in connection with its initial business combination, then no Extension Fee would be required in connection with such extension; provided further that for each three -month extension (if any) following such extension where no deposit into the Trust Account or other payment has been made, an Extension Fee is required, and (c) allow for DHAC to provide redemption rights to DHAC’s public stockholders in accordance with the requirements of the amended and restated certificate of incorporation without complying with the tender offer rules. In connection with such stockholder vote, an aggregate of 10,805,877 shares of DHAC’s common stock were redeemed leaving 4,156,123 shares issued and outstanding and entitled to vote as of October 20, 2022. 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. There is no assurance that the Company will be able to successfully effect a Business Combination. The Company will provide the Company’s public stockholders with the opportunity to redeem all or a portion of their common shares in connection with the initial Business Combination either (i) in connection with a general meeting called to approve the Business Combination or (ii) without a stockholder vote by means of a tender offer. 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, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would require the Company to seek stockholder approval under applicable law or stock exchange listing requirement. The public stockholders will be entitled to redeem their shares at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account calculated as of two business days prior to the consummation of the initial Business Combination, including interest earned on the funds held in the Trust Account and not previously released to the Company to pay its taxes, divided by the number of then outstanding public shares, subject to the limitations. The amount in the Trust Account was initially anticipated to be $10.15 per public share. On October 26, 2022, in connection with the approval of the extension, the Sponsor deposited $350,000 into the Trust Account for the first three-month extension, as such the amount in the Trust Account is anticipated to be $10.65 per public share. On February 2, 2023 the Company announced a second extension of the date by which the Company has to consummate a business combination from February 8, 2023 to May 8, 2023. On May 8, 2023 the Company announced a third extension of the date by which the Company has to consummate a business combination from May 8, 2023 to August 8, 2023 (as extended, the “Combination Period”) and deposited $ 350,000 into the Trust Account for such extension. The May extension is the second of three additional three-month extensions permitted under the Company’s governing documents and provides the Company with additional time to complete its initial business combination. On August 1, 2023, the Company issued a press release announcing that on July 31, 2023, the Company extended the date by which the Company has to consummate a business combination from August 8, 2023 to November 8, 2023. The extension is the third of three additional three-month extensions permitted under the Company’s governing documents and provides the Company with additional time to complete its initial business combination. On November 6, 2023, the Company approved four additional extensions, each by an additional three month, for an aggregate of an additional twelve months up to November 8, 2024. If the Company is unable to complete its initial 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 (less taxes payable and up to $100,000 of interest to pay dissolution expenses), 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 liquidation distributions, if any) 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, liquidate and dissolve, subject, in each case, to the Company’s obligations under Delaware law to provide for claims of creditors and in all cases subject to the other requirements of applicable law. The shares of common stock subject to redemption are recorded at a redemption value and classified as temporary equity in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 480, “Distinguishing Liabilities from Equity.”. The Sponsor, along with certain advisors, officers and directors, has entered into a letter agreement with the Company, pursuant to which they have agreed to (i) waive their redemption rights with respect to their founder shares (as defined in Note 5) and public shares in connection with the completion of the initial Business Combination; (ii) waive their redemption rights with respect to their founder shares and public shares 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 Company’s obligation to allow redemption in connection with the initial Business Combination or to redeem 100% of the Company’s public shares if the Company have not consummated an initial Business Combination within the Combination Period or (B) with respect to any other material provisions relating to stockholders’ rights or pre-initial Business Combination activity; (iii) waive their rights to liquidating distributions from the Trust Account with respect to their founder shares if the Company fails to complete the initial Business Combination within the Combination 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 prescribed time frame; and (iv) vote any founder shares held by them and any public shares purchased during or after the Initial Public Offering (including in open market and privately negotiated transactions) in favor of the initial Business Combination. The Company’s Sponsor has agreed that it will be liable to the Company if and to the extent any claims by a third party (other than the Company’s independent registered public accounting firm) for services rendered or products sold to the Company, or a prospective target business with which the Company have entered into a written letter of intent, confidentiality or other similar agreement or Business Combination agreement, reduce the amount of funds in the Trust Account to below the lesser of (i) $10.15 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 $10.15 per 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 or prospective target business who executed a waiver of any and all rights to the monies held in the Trust Account (whether or not such waiver is enforceable) nor will it apply 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”). However, the Company has not asked the Sponsor to reserve for such indemnification obligations, nor have the Company independently verified whether the Sponsor has sufficient funds to satisfy its indemnity obligations and the Company believes that the Company’s Sponsor’s only assets are securities of the Company. Therefore, the Company cannot assure that the Sponsor would be able to satisfy those obligations. On June 15, 2022, DHAC, entered into a Business Combination agreement, by and among DHAC Merger Sub I, Inc., DHAC Merger Sub II, Inc., DHAC (together with Merger Sub I, the “Merger Subs”), VSee Lab, Inc., a Delaware corporation (“VSee”) and iDoc Virtual Telehealth Solutions, Inc., a Texas corporation (“iDoc”). The Business Combination agreement and the transactions contemplated thereby (collectively, the “Business Combination”) were unanimously approved by the boards of directors of each of DHAC, VSee and iDoc on June 15, 2022. On August 9, 2022, DHAC, Merger Sub I, Merger Sub II, VSee and iDoc entered into the First Amended and Restated Business Combination Agreement to provide for the concurrent execution of financing documents for a PIPE consisting of convertible notes and warrants and delivery of the Cassel Salpeter’s opinion to the Board. On October 6, 2022, DHAC, Merger Sub I, Merger Sub II, VSee and iDoc entered into a Second Amended and Restated Business Combination Agreement (as it may be amended, supplemented or otherwise modified from time to time, the “Business Combination Agreement”) to make the consideration payable to VSee and iDoc stockholders 100% DHAC common stock and to provide for the concurrent execution of amended PIPE financing documents providing for the issuance of the shares and warrants to the PIPE investors. On July 11, 2023, each of the PIPE Investors provided notice to the Company that since a closing condition was not met, the PIPE Investors were under no obligation to close the PIPE Financing. Pursuant to the Business Combination Agreement and subject to the terms and conditions set forth therein, Merger Sub I will merge with and into VSee (the “VSee Merger”), with VSee surviving the VSee Merger as a wholly owned subsidiary of DHAC, and Merger Sub II will merge with and into iDoc (the “iDoc Merger” and, together with the VSee Merger, the “Mergers”), with iDoc surviving the iDoc Merger as a wholly owned subsidiary of DHAC. At the effective time of the Mergers (the “Effective Time”), DHAC will change its name to VSee Health, Inc. On March 31, 2023, the Company received a letter (the “Letter”) from the staff (the “Staff”) at The Nasdaq Global Market (“Nasdaq Global”) notifying the Company that for the 30 consecutive trading days prior to the date of the Letter, the Company’s securities listed on the Nasdaq Global (including the Common Stock, Units and Warrants) (the “Securities”) had traded at a value below the minimum $50,000,000 “Market Value of Listed Securities” (“MVLS”) requirement set forth in Nasdaq Listing Rule 5450(b)(2)(A), which is required for continued listing of the Company’s Securities on Nasdaq Global. The Letter is only a notification of deficiency, not of imminent delisting, and has no current effect on the listing or trading of the Company’s Securities on Nasdaq Global. In accordance with Nasdaq listing rule 5810(c)(3)(C), the Company has 180 calendar days, or until September 27, 2023, to regain compliance. The Letter notes that to regain compliance, the Company’s Securities must trade at or above a level such that the Company’s MVLS closes at or above $50,000,000 for a minimum of ten consecutive business days during the compliance period, which ends September 27, 2023. The Letter further notes that if the Company is unable to satisfy the MVLS requirement prior to such date, the Company may be eligible to transfer the listing of its Securities to The Nasdaq Capital Market (provided that it then satisfies the requirements for continued listing on that market). If the Company does not regain compliance by September 27, 2023, Nasdaq staff will provide written notice to the Company that its Securities are subject to delisting. At that time, the Company may appeal any such delisting determination to a hearings panel. On May 23, 2023, the Company received a letter (the “Second Letter”) from the Staff. The Second Letter notifies the Company that for the 30 consecutive business days prior to the date of the Second Letter, the Company’s market value of publicly held shares (“MVPHS”) was below the $15 million required for continued listing on the Nasdaq Global and therefore, the Company no longer meets Nasdaq Listing Rule 5450(b)(3)(C) (the “MVPHS Requirement”). The Second Letter is only a notification of deficiency, not of imminent delisting, and has no current effect on the listing or trading of the Company’s securities on Nasdaq Global. In accordance with Nasdaq Listing Rule 5810(c)(3)(D), the Company has 180 calendar days, or until November 20, 2023 (the “Compliance Date”), to regain compliance. The Second Letter notes that to regain compliance with the MVPHS Requirement, the MVPHS must equal or exceed $15 million for a minimum of ten (10) consecutive business days on or prior to the Compliance Date. If the Company regains compliance with the MVPHS Requirement, Nasdaq will provide the Company with written confirmation and will close the matter. The Second Letter further notes that if the Company is unable to satisfy the MVPHS requirement prior to the Compliance Date, the Company may be eligible to transfer the listing of its securities to The Nasdaq Capital Market (provided that it then satisfies the requirements for continued listing on that market). If the Company does not regain compliance with the MVPHS Requirement by the Compliance Date, the Staff will provide written notice to the Company that its securities are subject to delisting. At that time, the Company may appeal any such delisting determination to a Nasdaq hearing’s panel. On September 28, 2023, the Company received a letter (the “Third Letter”) from the staff at The Nasdaq Global Market (“Nasdaq Global”) notifying the Company that the Staff has determined to delist the Company’s securities listed on Nasdaq Global (including the Common Stock, Units and Warrants) (the “Securities”) because it has not regained compliance with the Market Value of Listed Securities (“MVLS”) Standard. The market value of the Company’s listed Securities was below the $50,000,000 minimum MVLS requirement for continued listing on Nasdaq Global under Nasdaq Listing Rule 5450(b)(2)(A) (the “MLVS Rule”) and had not been at least $50,000,000 for the proceeding 30 consecutive trading days. As previously reported by the Company on its Current Report on Form 8-K filed with the Securities and Exchange Commission (the “SEC”) on April 6, 2023, the Staff initially notified the Company on March 31, 2023 that the minimum MVLS for the Company’s Securities were below the $50,000,000 minimum MVLS requirement for the previous 30 consecutive trading days, and in accordance with the Nasdaq Listing Rules, the Company was provided 180 calendar days, or until September 27, 2023 to regain compliance with the MVLS Rule. Pursuant to the Third Letter, on October 4, 2023, the Company requested a hearing (the “Hearing”) to appeal this determination and also applied to transfer the listing of its Securities from Nasdaq Global to the Nasdaq Capital Market (“NasdaqCM”). The Hearing is scheduled to be held on November 30, 2023 at 12:00 PM Eastern Time. On October 9, 2023, the Company received an additional letter (the “Fourth Letter”) from the staff at Nasdaq Global notifying the Company that its not meeting the 400 total shareholders requirement under the Nasdaq Listing Rule 5450(a)(2) serves as an additional basis for delisting the Company’s Securities from Nasdaq Global. The Company planned to also address the 400 total shareholder requirement at the Hearing. On October 26, 2023, the Nasdaq Listing Qualifications Department of the Nasdaq Stock Market notified the Company in writing (the “Notice”) that its application to transfer the listing of its Securities to NasdaqCM has been approved. The Notice also stated that the Company’s Securities will be transferred to the NasdaqCM at the opening of business on October 30, 2023. On November 1, 2023, the Company received a letter from the Nasdaq Global Hearings panel that due to the Company’s transfer of its listed Securities to NasdaqCM, the Hearing on November 30, 2023 regarding non-compliance with the Nasdaq Global listing standards has been cancelled. As of October 30, 2023, the Company’s Securities are listed and traded on The Nasdaq Stock Market on NasdaqCM and will continue to be listed and traded on NasdaqCM. On August 1, 2023, the Company issued a press release announcing that on July 31, 2023, the Company extended the date by which the Company has to consummate a business combination from August 8, 2023 to November 8, 2023. The extension is the third of three additional three -month extensions permitted under the Company’s governing documents and provides the Company with additional time to complete its initial business combination. On August 17, 2023, the Company issued an amended and restated promissory note to SCS Capital Partners LLC in the aggregate principal amount of $565,000 (the “Promissory Note”), which amended and restated the promissory note issued by the Company to SCS Capital Partners LLC in February 2023. The Promissory Note bears no interest and is due and payable at the closing of the business combination. On September 8, 2023, DHAC held a Special Meeting and the stockholders approved the proposal to the amendment of the Company’s amended and restated certificate of incorporation (as amended, the “Charter”) to expand the methods that the Company may employ to not become subject to the “penny stock” rules of the SEC (the “Charter Amendment Proposal”) and the adjournment of the special meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of the Charter Amendment Proposal. On September 8, 2023, DHAC filed an amendment to its Charter pursuant to the Charter Amendment Proposal. Under the amended Charter, DHAC would be able to consummate the Business Combination even if as a result of the transactions the combined company does not have net tangible assets of at least $5,000,001 upon consummation of such business combination. On November 6, 2023, DHAC held its 2023 annual stockholders meeting (“2023 Annual Meeting”). At the 2023 Annual Meeting, the stockholders of DHAC approved amendments to DHAC’s Charter to extend the date by which the Company must consummate a Business Combination (as defined in the Charter) up to four (4) times, each by an additional three (3) months, for an aggregate of twelve ( 12 ) additional months (i.e., from November 8, 2023 up to November 8, 2024) or such earlier date as determined by the Company’s board of directors. In connection with the amended Charter, on November 6, 2023, DHAC extended the period of time that it has to consummate its business combination by three months from November 8, 2023 to February 8, 2024. Furthermore, at the 2023 Annual Meeting, the stockholders of DHAC also approved an amendment to DHAC’s investment management trust agreement (the “Trust Agreement”), dated as of November 3, 2021 and as amended on October 26, 2022, by and between the Company and Continental Stock Transfer & Trust Company, which allows the Company to extend the business combination period from November 8, 2023 to up to four (4) times, each by an additional three (3) months, for an aggregate of twelve ( 12 ) additional months to November 8, 2024. In connection with the 2023 Annual Meeting and amendments to DHAC’s Charter and Trust Agreement, 579,157 shares of Common Stock were tendered for redemption. | NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS Digital Health Acquisition Corp. (the “Company” or “DHAC”) is a blank check company incorporated as a Delaware corporation on March 30, 2021. The Company was incorporated for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar Business Combination with one or more businesses (the “Business Combination”). On June 9, 2022, DHAC Merger Sub I, Inc. (“Merger Sub I”), a Delaware corporation and a wholly owned subsidiary of the Company, was formed. On June 9, 2022, DHAC Merger Sub II, Inc. (“Merger Sub II”), a Texas corporation and a wholly owned subsidiary of the Company, was formed. As of December 31, 2022, the Company had not commenced any significant operations. All activity for the period from inception, date which operations commenced, through December 31, 2022 relates to the Company’s formation and the Company’s Initial Public Offering (as defined below), and 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 generates non-operating income in the form of interest income from the proceeds derived from the Initial Public Offering (as defined below). The Company has selected December 31 as its fiscal year end. The registration statement for the Company’s Initial Public Offering was declared effective on November 3, 2021. On November 8, 2021, the Company consummated the Initial Public Offering of 11,500,000 units (the “Units” and, with respect to the shares of common stock included in the Units sold, the “Public Shares”), which includes the full exercise by the underwriter of its over-allotment option in the amount of 1,500,000 Units, at $10.00 per Unit, generating gross proceeds of $115,000,000, which is described in Note 3. On October 20, 2022, In connection with the stockholders meeting to approve the extension, 10,805,877 shares of DHAC’s common stock were redeemed leaving 694,123 shares subject to redemption. Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of 557,000 units (each, a “Private Placement Unit” and, collectively, the “Private Placement Units”) at a price of $10.00 per Private Placement Unit in a private placement to Digital Health Sponsor LLC (the “Sponsor”), generating gross proceeds of $5,570,000, which is described in Note 4. As of November 8, 2021, the Company received $3,680,000 from the proceeds of the Private Placement and recorded $1,890,000 in subscription receivable. The Sponsor paid the subscription in full on November 12, 2021. Transaction costs amounted to $6,877,164, consisting of $1,955,000 of underwriting fees, $4,370,000 of deferred underwriting fees and $552,164 of other offering costs. In addition, cash of $9,478 was held outside of the Trust Account (as defined below) and is available for the payment of offering costs and for working capital purposes. Following the closing of the Initial Public Offering on November 8, 2021, an amount of $116,725,000 ($10.15 per Unit) from the net proceeds of the sale of the Units in the Initial Public Offering and the sale of the Private Placement Units was placed in a trust account (the “Trust Account”), invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 185 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 of 1940, as amended (the “Investment Company Act”). The Trust Account is intended as a holding place for funds pending the earliest to occur of either (i) the completion of the initial Business Combination; (ii) 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 (A) to modify the substance or timing of the Company’s obligation to allow redemption in connection with the initial Business Combination or to redeem 100% of the Company’s public shares if the Company does not complete the initial Business Combination within 18 months 18 months three nine 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. There is no assurance that the Company will be able to successfully effect a Business Combination. The Company will provide the Company’s public stockholders with the opportunity to redeem all or a portion of their common shares in connection with the initial Business Combination either (i) in connection with a general meeting called to approve the Business Combination or (ii) without a stockholder vote by means of a tender offer. 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, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would require the Company to seek stockholder approval under applicable law or stock exchange listing requirement. The public stockholders will be entitled to redeem their shares at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account calculated as of two The amount in the Trust Account was Initially anticipated to be $10.15 per public share. On October 26, 2022, in connection with the approval of the extension, the Sponsor deposited $350,000 into the Trust Account for the first three-month extension, as such the amount in the Trust Account is anticipated to be $10.65 per public share. On February 2, 2023 the Company announced a second extension of the date by which the Company has to consummate a business combination from February 8, 2023 to May 8, 2023 (as extended, the “Combination Period”). The February extension is the first of three additional three-month extensions permitted under the Company’s governing documents and provides the Company with additional time to complete its initial business combination. In connection with such stockholder vote, an aggregate of 10,805,877 shares of DHAC’s common stock were redeemed leaving 4,156,123 shares issued and outstanding and entitled to vote as of October 20, 2022. However, if the Company is unable to complete its initial 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 The shares of common stock subject to redemption are recorded at a redemption value and classified as temporary equity in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 480, “Distinguishing Liabilities from Equity.” In such case, and in accordance with the closing conditions set forth in the Company’s business Combination Agreement (as defined below), the Company will proceed with a Business Combination if the Company has net tangible assets of at least $5,000,001 upon such consummation of a Business Combination and, if the Company seeks stockholder approval, a majority of the issued and outstanding shares voted are voted in favor of the Business Combination. The Sponsor, along with certain advisors, officers and directors, has entered into a letter agreement with the Company, pursuant to which they have agreed to (i) waive their redemption rights with respect to their founder shares (as defined in Note 5) and public shares in connection with the completion of the initial Business Combination; (ii) waive their redemption rights with respect to their founder shares and public shares 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 Company’s obligation to allow redemption in connection with the initial Business Combination or to redeem 100% of the Company’s public shares if the Company have not consummated an initial Business Combination within the Combination Period or (B) with respect to any other material provisions relating to stockholders’ rights or pre-initial Business Combination activity; (iii) waive their rights to liquidating distributions from the Trust Account with respect to their founder shares if the Company fail to complete the initial Business Combination within the Combination Period, although they will be entitled to liquidating distributions from the Trust Account with respect to any public shares they hold if the Company fail to complete the initial Business Combination within the prescribed time frame; and (iv) vote any founder shares held by them and any public shares purchased during or after the Initial Public Offering (including in open market and privately negotiated transactions) in favor of the initial Business Combination. The Company’s Sponsor has agreed that it will be liable to the Company if and to the extent any claims by a third party (other than the Company’s independent registered public accounting firm) for services rendered or products sold to the Company, or a prospective target business with which the Company have entered into a written letter of intent, confidentiality or other similar agreement or Business Combination agreement, reduce the amount of funds in the Trust Account to below the lesser of (i) $10.15 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 $10.15 per 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 or prospective target business who executed a waiver of any and all rights to the monies held in the Trust Account (whether or not such waiver is enforceable) nor will it apply 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”). However, the Company has not asked the Sponsor to reserve for such indemnification obligations, nor have the Company independently verified whether the Sponsor has sufficient funds to satisfy its indemnity obligations and the Company believe that the Company’s Sponsor’s only assets are securities of the Company. Therefore, the Company cannot assure that the Sponsor would be able to satisfy those obligations. On June 15, 2022, DHAC, entered into a business combination agreement, by and among DHAC Merger Sub I, Inc., a Delaware corporation and a wholly owned subsidiary of DHAC (“Merger Sub I”), DHAC Merger Sub II, Inc., a Texas corporation and a wholly owned subsidiary of DHAC (“Merger Sub II” and together with Merger Sub I, the “Merger Subs”), VSee Lab, Inc., a Delaware corporation (“VSee”) and iDoc Virtual Telehealth Solutions, Inc., a Texas corporation (“iDoc”) (as it may be amended, supplemented or otherwise modified from time to time, the “Business Combination Agreement”). Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to such terms in the Business Combination Agreement. The Business Combination Agreement and the transactions contemplated thereby (collectively, the “Business Combination”) were unanimously approved by the boards of directors of each of DHAC, VSee and iDoc on June 15, 2022. On August 9, 2022, DHAC, Merger Sub I, Merger Sub II, VSee and iDoc entered into the First Amended and Restated Business Combination Agreement to provide for the concurrent execution of financing documents for a PIPE consisting of convertible notes and warrants and delivery of the Cassel Salpeter’s opinion to the Board. On October 6, 2022, DHAC, Merger Sub I, Merger Sub II, VSee and iDoc entered into the Business Combination Agreement to make the consideration payable to VSee and iDoc stockholders 100% DHAC common stock and to provide for the concurrent execution of amended PIPE Financing documents providing for the issuance of the PIPE Shares and the PIPE Warrants further described on Note 6. Pursuant to the Business Combination Agreement and subject to the terms and conditions set forth therein, Merger Sub I will merge with and into VSee (the “VSee Merger”), with VSee surviving the VSee Merger as a wholly owned subsidiary of DHAC, and Merger Sub II will merge with and into iDoc (the “iDoc Merger” and, together with the VSee Merger, the “Mergers”), with iDoc surviving the iDoc Merger as a wholly owned subsidiary of DHAC. At the effective time of the Mergers (the “Effective Time”), DHAC will change its name to VSee Health, Inc. |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X of the Securities and Exchange Commission (“SEC”). Certain information or footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the period ended December 31, 2022, as filed with the SEC on April 12, 2023. The interim results for the three and nine months ended September 30, 2023 are not necessarily indicative of the results to be expected for the year ending December 31, 2023 or for any future periods. Principles of Consolidation The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiary. All significant intercompany balances and transactions have been eliminated in consolidation. Liquidity and Going Concern The Company may raise additional capital through loans or additional investments from the Sponsor or its stockholders, officers, directors, or third parties. The Company’s officers and directors and the Sponsor may but are not obligated to (except as described above), loan the Company funds, from time to time, in whatever amount they deem reasonable in their sole discretion, to meet the Company’s working capital needs. Based on the foregoing, the Company believes it will have sufficient working capital and borrowing capacity from the Sponsor or an affiliate of the Sponsor, or certain of the Company directors to meet its needs through the earlier of the consummation of a Business Combination or at least one year from the date that the financial statements were issued. As of September 30, 2023, the Company had a cash balance of $507 and a working capital deficiency of $8,154,992 . In addition, in connection with the Company’s assessment of going concern considerations in accordance with FASB Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” management has determined that the liquidity, mandatory liquidation and subsequent dissolution on February 8, 2024 raises substantial doubt about the Company’s ability to continue as a going concern. No adjustments have been made to the carrying amounts of assets or liabilities of the Company as of September 30, 2023. The Company intends to complete a Business Combination before the mandatory liquidation date or file for an extension. Emerging Growth Company The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, 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 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. Offering Costs Offering costs consisted of legal, accounting, and other expenses incurred through the Initial Public Offering that were directly related to the Initial Public Offering. Offering costs were allocated to the separable financial instruments issued in the Initial Public Offering based on a relative fair value basis, compared to total proceeds received. Offering costs allocated to warrant were allocated to equity. Offering costs associated with the common stock issued were initially charged to temporary equity and then accreted to common stock subject to redemption upon the completion of the Initial Public Offering. Use of Estimates The preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires the Company’s 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 financial statements and the reported amounts of revenues and expenses during the reporting period. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. The most significant accounting estimates were the assumptions used to fair value the PIPE Forward Contract, the Investor Note Derivative and the Bridge Note Bifurcated Derivative. Accordingly, the actual results could differ significantly 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 no t have any cash equivalents as of September 30, 2023 and December 31, 2022. Investments Held in Trust Account At September 30, 2023 and December 31, 2022, the assets held in the Trust Account were held in money market funds, which are invested primarily in U.S. Treasury securities. Common Stock Subject to Possible Redemption The Company accounts for its common stock subject to possible redemption in accordance with the guidance in ASC Topic 480, “Distinguishing Liabilities from Equity.” Common stock subject to mandatory redemption is classified as a liability instrument and is measured at fair value. Conditionally redeemable common stock (including common stock that features 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) is classified in temporary equity. At all other times, common stock is classified as stockholders’ deficit. The Company’s common stock sold in the IPO features certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, at September 30, 2023 and December 31, 2022, common stock subject to possible redemption is presented at redemption value as temporary equity, outside of the stockholders’ deficit section of the Company’s condensed consolidated balance sheets. 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. This method would view the end of the reporting period as if it were also the redemption date for the security. Immediately upon the closing of the Initial Public Offering, increases or decreases in the carrying amount of redeemable common stock are affected by charges against additional paid-in capital and accumulated deficit. At September 30, 2023 and December 31, 2022, the common stock reflected in the condensed consolidated balance sheets is reconciled in the following table: Gross proceeds $ 115,000,000 Less: Proceeds Allocated to Public Warrants (12,483,555) Common stock issuance costs (6,923,767) Plus: Accretion of carrying value to redemption value 21,132,322 Common stock subject to possible redemption, December 31, 2021 116,725,000 Plus: Accretion of carrying value to redemption value 1,142,603 Less: Redemptions (110,472,254) Common stock subject to possible redemption, December 31, 2022 7,395,349 Plus: Accretion of carrying value to redemption value 498,865 Common stock subject to possible redemption, September 30, 2023 $ 7,894,214 Fair Value of Financial Instruments The fair value of the Company’s assets and liabilities, which qualify as financial instruments under FASB ASC 820, “Fair Value Measurements” approximates the carrying amounts represented in the condensed consolidated balance sheets, primarily due to its short-term nature. Income Taxes The Company accounts for income taxes under ASC 740, “Income Taxes.” ASC 740, Income Taxes, requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the unaudited condensed consolidated financial statements 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. ASC 740-270-25-2 requires that an annual effective tax rate be determined, and such annual effective rate applied to year to date income in interim periods under ASC 740-270-30-5. As of September 30, 2023 and December 31, 2022, the Company’s deferred tax asset had a full valuation allowance recorded against it. ASC 740-270-25-2 requires that an annual effective tax rate be determined and such annual effective rate applied to year to date income in interim periods under ASC 740-270-30-5. The Company’s effective tax rate was 0.0% and 11.25% for the three months ended September 30, 2023 and 2022, respectively, the effective tax rate was 0.0% and 4.31% for the nine months ended September 30, 2023 and 2022, respectively. The effective tax rate differs from the statutory tax rate of 21% for the three and nine months ended September 30, 2023 and 2022 due to 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 as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of September 30, 2023 and December 31, 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 taxation 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. Net Income (Loss) per Common Stock The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share.” Net income (loss) per common stock is computed by dividing net income (loss) by the weighted average number of common stocks outstanding for the period. Accretion associated with the redeemable shares of common stock is excluded from net income (loss) per common stock as the redemption value approximates fair value. The calculation of diluted income (loss) per share does not consider the effect of the warrants issued in connection with the (i) Initial Public Offering, and (ii) the private placement (iii) the Bridge and Investor Note Warrants because the exercise of the warrants is contingent upon the occurrence of future events and the inclusion of such warrants would be anti-dilutive. The warrants are exercisable to purchase 12,256,999 common stocks in the aggregate. As of the three and nine months ended September 30, 2023 and 2022, the Company did no t have any dilutive securities or other contracts that could, potentially, be exercised or converted into common stocks and then share in the earnings of the Company. As a result, diluted net income (loss) per common stock is the same as basic net income (loss) per common stock for the periods presented. The following table reflects the calculation of basic and diluted net income (loss) per common stock (in dollars, except per share amounts): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2023 2022 2023 2022 Common Stock Common Stock Common Stock Common Stock Basic and diluted net income (loss) per of common stock Numerator: Allocation of net income (loss), as adjusted $ 78,287 $ (820,759) $ (1,552,805) $ (2,007,578) Denominator: Basic and diluted weighted average shares outstanding, non- redeemable common stock 4,183,123 14,932,000 4,177,427 14,932,000 Basic and diluted net income (loss) per share, non-redeemable common stock $ 0.02 $ (0.05) $ (0.37) $ (0.13) Concentration of Credit Risk The Company has significant cash balances at a financial institutions which throughout the year did not exceed the federally insured limited of $250,000. There was no risk of loss incurred or a lack of access to such funds could have a significant adverse impact on the Company’s financial condition, results of operations, and cash flows. Warrant Instruments The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in FASB ASC 480, “Distinguishing Liabilities from Equity” (“ASC 480”), and ASC 815, “Derivatives and Hedging” (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own common stock, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding. For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. The Company has analyzed the Public Warrants, Private Warrants, Bridge Note Warrants and the Investor Warrants and determined they are considered to be freestanding instruments and do not exhibit any of the characteristics in ASC 480 and therefore are not classified as liabilities under ASC 480. The warrants meet all of the requirements for equity classification under ASC 815 and therefore are classified in equity. Derivative Financial Instruments The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as bifurcated derivatives in accordance with ASC 815. Derivative instruments are recorded at fair value on the grant date and re-valued at each reporting date, with changes in the fair value reported in the statements 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. The Company has determined the PIPE financing agreement is a derivative instrument, the Bridge Note and the Investor Note’s early redemption provisions are embedded feature that are required to be bifurcated as a derivative. FASB ASC 470-20, “Debt with Conversion and Other Options,” addresses the allocation of proceeds from the issuance of debt into its debt and bifurcated derivative components. The Company applies this guidance to allocate the Bridge Note and the Investor Note proceeds between the Bridge Note and the Investor Note, respectively and the respective Bifurcated Derivative, using the residual method by allocating the principal first to fair value of the bifurcated derivative and then to the debt. Fair Value Measurement 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. U.S. 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. Recent Accounting Pronouncements Management does not believe that any recently issued, but not effective, accounting standards, if currently adopted, would have a material effect on the Company’s condensed consolidated financial statements. Risks and Uncertainties Management continues to evaluate the impact of the COVID-19 pandemic and the current wars on the industry and has concluded that while it is reasonably possible that the virus and the war could have a negative effect on the Company’s financial position, results of its operations and/or closing a business combination, the specific impact is not readily determinable as of the date these condensed consolidated financial statements are issued. The condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Inflation Reduction Act of 2022 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 of stock by publicly traded U.S. domestic corporations and certain U.S. domestic subsidiaries of publicly traded foreign corporations occurring on or after January 1, 2023. 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 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. 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. | NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying consolidated financial statements are presented in U.S. dollars and have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the accounting and disclosure rules and regulations of the Securities and Exchange Commission (the “SEC”). Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiary. All significant intercompany balances and transactions have been eliminated in consolidation. Liquidity and Going Concern 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). As of December 31, 2022 and 2021, there were no amounts outstanding under any Working Capital Loans. The Company may raise additional capital through loans or additional investments from the Sponsor or its stockholders, officers, directors, or third parties. The Company’s officers and directors and the Sponsor may but are not obligated to (except as described above), loan the Company funds, from time to time, in whatever amount they deem reasonable in their sole discretion, to meet the Company’s working capital needs. Based on the foregoing, the Company believes it will have sufficient working capital and borrowing capacity from the Sponsor or an affiliate of the Sponsor, or certain of the Company directors to meet its needs through the earlier of the consummation of a Business Combination or at least one year from the date that the financial statements were issued. As of December 31, 2022, the Company had a cash balance of $106,998 and a working capital deficiency of $3,056,596 net of $132,020 of allowable interest withdraws from trust to cover income and franchise taxes. In addition, in connection with the Company’s assessment of going concern considerations in accordance with FASB Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” management has determined that the liquidity, mandatory liquidation and subsequent dissolution raises substantial doubt about the Company’s ability to continue as a going concern. No adjustments have been made to the carrying amounts of assets or liabilities of the Company as of December 31, 2022. The Company intends to complete a Business Combination before the mandatory liquidation date. Emerging Growth Company The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, 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 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. Offering Costs Offering costs consisted of legal, accounting, and other expenses incurred through the Initial Public Offering that were directly related to the Initial Public Offering. Offering costs were allocated to the separable financial instruments issued in the Initial Public Offering based on a relative fair value basis, compared to total proceeds received. Offering costs allocated to warrant were allocated to equity. Offering costs associated with the common stock issued were initially charged to temporary equity and then accreted to common stock subject to redemption upon the completion of the Initial Public Offering. Use of Estimates The preparation of the consolidated financial statements in conformity with U.S. GAAP requires the Company’s 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 financial statements and the reported amounts of revenues and expenses during the reporting period. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. The most significant accounting estimates were the assumptions used to fair value the PIPE Forward Contract and the Bridge Note Bifurcated Derivative. Accordingly, the actual results could differ significantly 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, 2022 and 2021. Investments Held in Trust Account At December 31, 2022 and 2021, the assets held in the Trust Account were held in money market funds, which are invested primarily in U.S. Treasury securities. Common Stock Subject to Possible Redemption The Company accounts for its common stock subject to possible redemption in accordance with the guidance in ASC Topic 480, “Distinguishing Liabilities from Equity.” Common stock subject to mandatory redemption is classified as a liability instrument and is measured at fair value. Conditionally redeemable common stock (including common stock that features 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) is classified in temporary equity. At all other times, common stock is classified as stockholders’ deficit. The Company’s common stock features certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, at December 31, 2022 and 2021, common stock subject to possible redemption is presented at redemption value as temporary equity, outside of the stockholders’ deficit section of the Company’s consolidated balance sheets. 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. This method would view the end of the reporting period as if it were also the redemption date for the security. Immediately upon the closing of the Initial Public Offering, increases or decreases in the carrying amount of redeemable common stock are affected by charges against additional paid-in capital and accumulated deficit. At December 31, 2022 and 2021, the common stock reflected in the consolidated balance sheets is reconciled in the following table: Gross proceeds $ 115,000,000 Less: Proceeds Allocated to Public Warrants (12,483,555) Common stock issuance costs (6,923,767) Plus: Accretion of carrying value to redemption value 21,132,322 Common stock subject to possible redemption, December 31, 2021 116,725,000 Plus: Accretion of carrying value to redemption value 1,142,603 Less: Redemptions (110,472,254) Common stock subject to possible redemption, December 31, 2022 $ 7,395,349 Fair Value of Financial Instruments The fair value of the Company’s assets and liabilities, which qualify as financial instruments under FASB ASC 820, “Fair Value Measurements” approximates the carrying amounts represented in the consolidated balance sheets, primarily due to its short-term nature. Income Taxes The Company follows the asset and liability method of accounting for income taxes under FASB ASC 740, “Income Taxes” (“ASC 740”). Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. The Company accounts for income taxes under ASC 740. ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions 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. The Company’s management determined that the United States is the Company’s major tax jurisdiction. As of December 31, 2022 and 2021, there were no unrecognized tax benefits and no amounts accrued for interest and penalties. 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’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months. Net Loss per Common Stock The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share.” Net loss per common stock is computed by dividing net loss by the weighted average number of common stocks outstanding for the period. This presentation contemplates a Business Combination as the most likely outcome, in which case, both classes of common stocks share pro rata in the loss of the Company. Accretion associated with the redeemable shares of common stock is excluded from net loss per common stock as the redemption value approximates fair value. The calculation of diluted loss per share does not consider the effect of the warrants issued in connection with the (i) Initial Public Offering, (ii) the private placement (iii) the Bridge Warrants because the exercise of the warrants is contingent upon the occurrence of future events and the inclusion of such warrants would be anti-dilutive. The warrants are exercisable to purchase 12,230,913 common stocks in the aggregate. As of December 31, 2022, the Company did not have any dilutive securities or other contracts that could, potentially, be exercised or converted into common stocks and then share in the earnings of the Company. As a result, diluted net loss per common stock is the same as basic net loss per common stock for the periods presented. The following table reflects the calculation of basic and diluted net loss per common stock (in dollars, except per share amounts): For the Period from March 30, 2021 Year Ended (Inception) through December 31, 2022 December 31, 2021 Common Stock Common Stock Basic and diluted net loss per of common stock Numerator: Net loss, as adjusted $ (3,242,501) $ (280,701) Denominator: Basic and diluted weighted average shares outstanding, common stock 12,741,219 3,981,054 Basic and diluted net loss per share, common stock $ (0.25) $ (0.07) Concentration of Credit Risk The Company has significant cash balances at financial institutions which throughout the year regularly exceed the federally insured limit of $250,000. Any loss incurred or a lack of access to such funds could have a significant adverse impact on the Company’s financial condition, results of operations, and cash flows. Warrant Instruments The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in FASB ASC 480, “Distinguishing Liabilities from Equity” (“ASC 480”), and ASC 815, “Derivatives and Hedging” (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own common stock, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding. For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. The Company’s has analyzed the Public Warrants and Private Warrants and determined they are considered to be freestanding instruments and do not exhibit any of the characteristics in ASC 480 and therefore are not classified as liabilities under ASC 480. The warrants meet all of the requirements for equity classification under ASC 815 and therefore are classified in equity. Derivative Financial Instruments The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as bifurcated derivatives in accordance with ASC 815. Derivative instruments are recorded at fair value on the grant date and re-valued at each reporting date, with changes in the fair value reported in the statements 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. The Company has determined the PIPE financing agreement is a derivative instrument and the Bridge Note’s early redemption provision is an embedded feature that is required to be bifurcated as a derivative. FASB ASC 470-20, “Debt with Conversion and Other Options,” addresses the allocation of proceeds from the issuance of debt into its debt and bifurcated derivative components. The Company applies this guidance to allocate the Bridge Note proceeds between the Bridge Note and the Bifurcated Derivative, using the residual method by allocating the principal first to fair value of the bifurcated derivative and then to the debt. Fair Value Measurement 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. U.S. 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. Recent Accounting Pronouncements In August 2020, the FASB issued ASU 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)” (“ASU 2020-06”), to simplify accounting for certain financial instruments. ASU 2020-06 eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity. The new standard also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity’s own equity. ASU 2020-06 amends the diluted earnings per share guidance, including the requirement to use the if-converted method for all convertible instruments. As a smaller reporting company, ASU 2020-06 is effective January 1, 2024 for fiscal years beginning after December 15, 2023 and should be applied on a full or modified retrospective basis, with early adoption permitted beginning on January 1, 2021. The Company is currently assessing the impact, if any, that ASU 2020-06 would have on its financial position, results of operations or cash flows. The Company adopted ASU 2020-06 at inception on March 30, 2021. The adoption of ASU 2020-06 did not have an impact on the Company’s consolidated financial statements. Management does not believe that any recently issued, but not effective, accounting standards, if currently adopted, would have a material effect on the Company’s consolidated financial statements. Risks and Uncertainties 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. Further, the impact of this action and related sanctions on the world economy is not determinable as of the date of these consolidated 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 consolidated financial statements. 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 the consolidated financial statements. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Inflation Reduction Act of 2022 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 of stock by publicly traded U.S. domestic corporations and certain U.S. domestic subsidiaries of publicly traded foreign corporations occurring on or after January 1, 2023. 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 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. 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. |
INITIAL PUBLIC OFFERING_2
INITIAL PUBLIC OFFERING | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
INITIAL PUBLIC OFFERING | ||
INITIAL PUBLIC OFFERING | NOTE 3. INITIAL PUBLIC OFFERING In the “Initial Public Offering,” the Company sold 11,500,000 units, which includes a full exercise by the underwriters of their over-allotment option in the amount of 1,500,000 Units, at a purchase price of $10.00 per unit. Each unit consists of one common share and one warrant. Each warrant will entitle the holder to purchase one (1) share of common stock at a price of $11.50 per whole share, subject to adjustment (see Note 7). Each warrant will become exercisable 30 days after the completion of the initial Business Combination or 12 months from the closing of this offering and will expire five years after the completion of the initial Business Combination, or earlier upon redemption or liquidation. | NOTE 3. INITIAL PUBLIC OFFERING In the “Initial Public Offering,” the Company sold 11,500,000 units, which includes a full exercise by the underwriters of their over-allotment option in the amount of 1,500,000 Units, at a purchase price of $10.00 per unit. Each unit consists of one common share and one warrant. Each warrant will entitle the holder to purchase one (1) share of common stock at a price of $11.50 per whole share, subject to adjustment (see Note 7). Each warrant will become exercisable 30 days 12 months five years |
PRIVATE PLACEMENT_2
PRIVATE PLACEMENT | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
PRIVATE PLACEMENT. | ||
PRIVATE PLACEMENT | NOTE 4. PRIVATE PLACEMENT Simultaneously with the closing of the Initial Public Offering, the Sponsor purchased 557,000 units, at $10.00 per unit for a total purchase price of $5,570,000 in a private placement. As of November 8, 2021, the Company received $3,680,000 from the proceeds of the Private Placement and recorded $1,890,000 in subscription receivable. The Sponsor paid the subscription in full on November 12, 2021. The private placement units are identical to the units sold in the Initial Public Offering but are not redeemable. There will be no underwriting fees or commissions with respect to the private placement units. The proceeds from the private placement were added to the proceeds of Initial Public Offering and placed in a Trust Account in the United States maintained by Continental Stock Transfer & Trust Company, as trustee. If the Company does not complete its initial business combination within 21 months (as currently extended and as may be further extended in accordance with the Amended and Restated Certificate of Incorporation), the Sponsor will waive any and all rights and claims to any proceeds and interest thereon in respect to the private placement units and the proceeds from the sale of the private placement units will be included in the liquidating distribution to the holders of the Company’s public shares. The Sponsor, advisors, officers and directors have entered into a letter agreement with the Company, pursuant to which they have agreed to (i) waive their redemption rights with respect to their founder shares and public shares in connection with the completion of the initial Business Combination; (ii) waive their redemption rights with respect to their founder shares and public shares 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 Company’s obligation to allow redemption in connection with the initial Business Combination or to redeem 100% of the Company’s public shares if the Company has not consummated an initial Business Combination within the Combination Period or (B) with respect to any other material provisions relating to stockholders’ rights or pre-initial Business Combination activity; (iii) waive their rights to liquidating distributions from the Trust Account with respect to their founder shares if the Company fails to complete the initial Business Combination within the Combination 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 prescribed time frame; and (iv) vote any founder shares held by them and any public shares purchased during or after the Initial Public Offering (including in open market and privately negotiated transactions) in favor of the initial Business Combination. | NOTE 4. PRIVATE PLACEMENT Simultaneously with the closing of the Initial Public Offering, the Sponsor purchased 557,000 units, at $10.00 per unit for a total purchase price of $5,570,000 in a private placement. As of November 8, 2021, the Company received $3,680,000 from the proceeds of the Private Placement and recorded $1,890,000 in subscription receivable. The Sponsor paid the subscription in full on November 12, 2021. The private placement units are identical to the units sold in the Initial Public Offering. There will be no underwriting fees or commissions with respect to the private placement units. The proceeds from the private placement were added to the proceeds of Initial Public Offering and placed in a Trust Account in the United States maintained by Continental Stock Transfer & Trust Company, as trustee. If the Company does not complete its initial business combination within 18 months The Sponsor, advisors, officers and directors have entered into a letter agreement with the Company, pursuant to which they have agreed to (i) waive their redemption rights with respect to their founder shares and public shares in connection with the completion of the initial Business Combination; (ii) waive their redemption rights with respect to their founder shares and public shares 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 Company’s obligation to allow redemption in connection with the initial Business Combination or to redeem 100% of the Company’s public shares if the Company has not consummated an initial Business Combination within the Combination Period or (B) with respect to any other material provisions relating to stockholders’ rights or pre-initial Business Combination activity; (iii) waive their rights to liquidating distributions from the Trust Account with respect to their founder shares if the Company fails to complete the initial Business Combination within the Combination 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 prescribed time frame; and (iv) vote any founder shares held by them and any public shares purchased during or after the Initial Public Offering (including in open market and privately negotiated transactions) in favor of the initial Business Combination. |
RELATED PARTY TRANSACTIONS_2
RELATED PARTY TRANSACTIONS | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
RELATED PARTY TRANSACTIONS | ||
RELATED PARTY TRANSACTIONS | NOTE 5. RELATED PARTY TRANSACTIONS Founder Shares On June 7, 2021, the Sponsor, along with certain of the Company’s directors, officers and advisors purchased 4,312,500 shares for an aggregate purchase price of $25,000 . In October 2021, the Sponsor, officers and certain advisors forfeited an aggregate of 1,437,500 shares of common stock, resulting in 2,875,000 founder shares outstanding. Such shares are referred to herein as “founder shares” or “insider shares”. Sponsor Note Payable On June 7, 2021, the Sponsor agreed to loan the Company up to $625,000 to be used for a portion of the expenses of the Initial Public Offering. These notes were non-interest bearing and any outstanding balance on the notes was due immediately following the Company’s Initial Public Offering. There was an amount of $602,720 borrowed under the Notes. The Notes were repaid on November 12, 2021. Advance from Related Party As of November 8, 2021, the Sponsor paid for $402,936 on expenses on behalf of the Company. The advance was repaid on November 12, 2021. Borrowings under the note are no longer available. The Company owes the Sponsor $138,937 and $43,900 as of September 30, 2023 and December 31, 2022, respectively. Working Capital Loans 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, loan the Company funds as may be required (“Working Capital Loans”). If the Company completes a Business Combination, the Company will repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. Otherwise, the Working Capital Loans would be repaid only out of funds held outside the Trust Account. In the event that a Business Combination does not close, the Company may use a portion of the proceeds held outside the Trust Account to repay the Working Capital Loans, but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. Except for the foregoing, the terms of such Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans. The Working Capital Loans would be repaid upon consummation of a Business Combination, without interest. As of September 30, 2023 and December 31, 2022, the Company had no borrowings under the Working Capital Loans. Promissory Note Related Party On October 26, 2022, the Company issued an unsecured promissory note in the aggregate principal amount of $350,000 to the Sponsor, the Company’s “sponsor.” The Company deposited to the trust account all of the loan amount and extended the amount of time it has available to complete a business combination from November 8, 2022 to February 8, 2023. The promissory note does not bear interest and will be repaid only upon closing of a business combination by the Company. On January 18, 2023, SCS Capital Partners LLC, a stockholder who currently holds more than 5% shares in the Company, issued an unsecured promissory note to the Company, pursuant to which the Company may borrow up to an aggregate principal amount of $250,000 (the “Promissory Note”). The Promissory Note is non-interest bearing and shall be used to pay for general operating expenses. On August 17, 2023, the Promissory Note was amended and restated to increase the principal amount of the note to $565,000 . On May 5, 2023, the Company issued a promissory note to SCS Capital Partners LLC in the aggregate principal amount of $200,000 (the “SCS Note”). The SCS Note bears interest at a rate of 10% per annum and is due and payable on May 5, 2024. Administrative Services Agreement The Company agreed, commencing on November 3, 2021, to pay an affiliate of the Sponsor a total of $10,000 per month for office space and secretarial, administrative, and other services. The monthly fees will cease upon completion of an initial business combination or liquidation. For the three months and nine months ended September 30, 2022, the Company incurred $30,000 and $90,000 , respectively, of which $10,000 is included in accrued expenses in the accompanying condensed consolidated balance sheet as of September 30, 2022. For the three and nine months ended September 30, 2023, the Company incurred $30,000 and $90,000 , of which $31,650 and $73,850 are included in accrued expenses in the accompanying condensed consolidated balance sheets as of September 30, 2023 and December 31, 2022, respectively. The Company will reimburse its officers and directors for any reasonable out-of-pocket business expenses incurred by them in connection with certain activities on the Company’s behalf such as identifying and investigating possible target businesses and business combinations. There is no limit on the amount of out-of-pocket expenses reimbursable by the Company; provided, however, that to the extent such expenses exceed the available proceeds not deposited in the Trust Account and the interest income earned on the amounts held in the Trust Account, such expenses would not be reimbursed by the Company unless the Company consummates an initial business combination. The audit committee will review and approve all reimbursements and payments made to any initial stockholder or member of the management team, or the Company’s or their respective affiliates, and any reimbursements and payments made to members of the audit committee will be reviewed and approved by the Board of Directors, with any interested director abstaining from such review and approval. No compensation or fees of any kind, including finder’s fees, consulting fees or other similar compensation, will be paid to any of the initial stockholders, officers or directors who owned the shares of common stock prior to this offering, or to any of their respective affiliates, prior to or with respect to the Business Combination (regardless of the type of transaction that it is). All ongoing and future transactions between the Company and any of its officers and directors or their respective affiliates will be on terms believed by the Company to be no less favorable to the Company than are available from unaffiliated third parties. Such transactions, including the payment of any compensation, will require prior approval by a majority of the Company’s uninterested “independent” directors (to the extent the Company has any) or the members of the board who do not have an interest in the transaction, in either case who had access, at the Company’s expense, to the Company’s attorneys or independent legal counsel. The Company will not enter into any such transaction unless the Company’s disinterested “independent” directors (or, if there are no “independent” directors, the Company’s disinterested directors) determine that the terms of such transaction are no less favorable to the Company than those that would be available to the Company with respect to such a transaction from unaffiliated third parties. | NOTE 5. RELATED PARTY TRANSACTIONS Founder Shares On June 7, 2021, the Sponsor, along with certain of the Company’s directors, officers and advisors purchased 4,312,500 shares for an aggregate purchase price of $25,000. In October 2021, the Sponsor, officers and certain advisors forfeited an aggregate of 1,437,500 shares of common stock, resulting in 2,875,000 founder shares outstanding. Such shares are referred to herein as “founder shares” or “insider shares”. Sponsor Note Payable On June 7, 2021, the Sponsor agreed to loan the Company up to $625,000 to be used for a portion of the expenses of the Initial Public Offering. These notes were non-interest bearing and any outstanding balance on the notes was due immediately following the Company’s Initial Public Offering. There was an amount of $602,720 borrowed under the Notes. The Notes were repaid on November 12, 2021. Advance from Related Party As of November 8, 2021, the Sponsor paid for $402,936 on expenses on behalf of the Company. The advance was repaid on November 12, 2021. Borrowing under the note are no longer available. On November 12, 2021, the Sponsor advanced an additional $43,900 which remains payable as of December 31, 2022 and 2021. Working Capital Loans 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, loan the Company funds as may be required (“Working Capital Loans”). If the Company completes a Business Combination, the Company will repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. Otherwise, the Working Capital Loans would be repaid only out of funds held outside the Trust Account. In the event that a Business Combination does not close, the Company may use a portion of the proceeds held outside the Trust Account to repay the Working Capital Loans, but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. Except for the foregoing, the terms of such Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans. The Working Capital Loans would be repaid upon consummation of a Business Combination, without interest. As of December 31, 2022 and 2021, the Company had no borrowings under the Working Capital Loans. Promissory Note Related Party On October 26, 2022, the Company issued an unsecured promissory note in the aggregate principal amount of $350,000 to the Sponsor, the Company’s “sponsor.” The Company deposited to the trust account all of the loan amount and extended the amount of time it has available to complete a business combination from November 8, 2022 to February 8, 2023. The promissory note does not bear interest and will be repaid only upon closing of a business combination by the Company. Administrative Services Agreement The Company agreed, commencing on November 3, 2021, to pay an affiliate of the Sponsor a total of $10,000 per month for office space and secretarial, administrative, and other services. The monthly fees will cease upon completion of an initial business combination or liquidation. For the year ended December 31, 2022, the Company incurred $120,000, of which $10,550 is included in accrued expenses in the accompanying consolidated balance sheets as of December 31, 2022. For the period from March 30, 2021 (inception) through December 31, 2021, the Company incurred $20,000 in fees for these services, of which $10,000 is included in accrued expenses in the accompanying balance sheet as of December 31, 2021. The Company will reimburse its officers and directors for any reasonable out-of-pocket business expenses incurred by them in connection with certain activities on the Company’s behalf such as identifying and investigating possible target businesses and business combinations. There is no limit on the amount of out-of-pocket expenses reimbursable by the Company; provided, however, that to the extent such expenses exceed the available proceeds not deposited in the Trust Account and the interest income earned on the amounts held in the Trust Account, such expenses would not be reimbursed by the Company unless the Company consummates an initial business combination. The audit committee will review and approve all reimbursements and payments made to any initial stockholder or member of the management team, or the Company’s or their respective affiliates, and any reimbursements and payments made to members of the audit committee will be reviewed and approved by the Board of Directors, with any interested director abstaining from such review and approval. No compensation or fees of any kind, including finder’s fees, consulting fees or other similar compensation, will be paid to any of the initial stockholders, officers or directors who owned the shares of common stock prior to this offering, or to any of their respective affiliates, prior to or with respect to the Business Combination (regardless of the type of transaction that it is). All ongoing and future transactions between the Company and any of its officers and directors or their respective affiliates will be on terms believed by the Company to be no less favorable to the Company than are available from unaffiliated third parties. Such transactions, including the payment of any compensation, will require prior approval by a majority of the Company’s uninterested “independent” directors (to the extent the Company has any) or the members of the board who do not have an interest in the transaction, in either case who had access, at the Company’s expense, to the Company’s attorneys or independent legal counsel. The Company will not enter into any such transaction unless the Company’s disinterested “independent” directors (or, if there are no “independent” directors, the Company’s disinterested directors) determine that the terms of such transaction are no less favorable to the Company than those that would be available to the Company with respect to such a transaction from unaffiliated third parties. |
COMMITMENTS_2
COMMITMENTS | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
COMMITMENTS | ||
COMMITMENTS | NOTE 6. COMMITMENTS IPO Registration and Stockholders’ Rights Pursuant to a registration rights agreement entered into on November 3, 2021, the holders of the (i) founder shares, which were issued in a private placement prior to the closing of the Initial Public Offering and (ii) private placement units (including all underlying securities), issued in a private placement simultaneously with the closing of the Initial Public Offering have registration rights to require the Company to register a sale of any of its securities held by them pursuant to a registration rights agreement. These holders are entitled to make up to two demands that the Company registers such securities for sale under the Securities Act. In addition, these holders will have “piggyback” registration rights to include their securities in other registration statements filed by the Company. Underwriters Agreement The Representative is entitled to a deferred underwriting commission of 3.8% of the gross proceeds of the Initial Public Offering held in the Trust Account upon the completion of the Company’s initial Business Combination subject to the terms of the underwriting agreement. The Company executed a Securities Purchase Agreement (the “Series B Securities Purchase Agreement”) dated November 3, 2022 with A.G.P. whereby A.G.P. subscribed for and will purchase, and DHAC will issue and sell, at the closing of the Business Combination, 4,370 shares of Series B Preferred Stock (“Series B Shares”) convertible into shares of DHAC common stock. The purchase price for the Series B Shares will be paid by conversion of A.G.P.’s $4,370,000 deferred underwriting fee into such Series B Shares. The Certificate of Designation of the Series B Preferred Stock establishes the terms and conditions of the Series B Preferred Stock. The Company reviewed the Series B Preferred Stock under ASC 480 and ASC 815 and concluded that Series B Preferred Stock did not include any elements that would preclude them from equity treatment and therefore are not subject to the liability treatment under ASC 480 or derivative guidance under ASC 815. The Business Combination Agreement On June 15, 2022, Digital Health Acquisition Corp (“DHAC”) entered into the Business Combination Agreement, with Merger Sub I, Merger Sub II, VSee and iDoc. On August 9, 2022, DHAC, Merger Sub I, Merger Sub II, VSee and iDoc entered into the First Amended and Restated Business Combination Agreement to provide for the concurrent execution of financing documents for a PIPE consisting of convertible notes and warrants and delivery of the Cassel Salpeter’s opinion to the Board. On October 6, 2022, DHAC, Merger Sub I, Merger Sub II, VSee and iDoc entered into the Business Combination Agreement to make the consideration payable to VSee and iDoc stockholders 100% DHAC common stock and to provide for the concurrent execution of amended PIPE financing documents providing for the issuance of the shares and warrants to the PIPE investor. Pursuant to the terms of the Business Combination Agreement, a business combination by and among DHAC, VSee and iDoc will be effected through the merger of Merger Sub I with and into VSee, with VSee surviving the Merger as a wholly owned subsidiary of DHAC and the merger of Merger Sub II with and into iDoc, with iDoc surviving the Merger as a wholly owned subsidiary of DHAC. The Board of Directors of DHAC (the “Board”) has (i) approved and declared advisable the Business Combination Agreement, the Business Combination and the other transactions contemplated thereby and (ii) resolved to recommend approval of the Business Combination Agreement and related matters by the stockholders of DHAC. The Merger Consideration The Business Combination combined equity value of VSee and iDoc is $ 110 million. At the Closing, each of VSee and iDoc will convert each share of VSee and iDoc capital stock (excluding shares of the holders who perfect rights of appraisal under Delaware or Texas law, as the case may be) into the right to receive the applicable merger consideration as further described below. VSee Merger Consideration The aggregate merger consideration that the holders of VSee Stock as of the Effective Time are entitled to receive in the Business Combination, referred to as the “VSee Closing Consideration,” is an amount equal to (1) $ 60,500,000 , minus (2) an amount equal to the Effective Time Option Grants multiplied by $10 , minus (3) the aggregate amount of VSee’s transaction expenses. “Effective Time Option Grants” refers to the stock options with an exercise price of $10 per share pursuant to the Incentive Plan to the individuals, in the amounts, and on the terms set forth on Exhibit E to the Business Combination Agreement. 100% of the VSee Closing Consideration will be paid in shares of Company Common Stock in accordance with the terms of the Business Combination Agreement and subject to deductions for the VSee Indemnity Escrow Amount as described below. The “VSee Per Share Consideration” refers to a number of shares of Common Stock equal to (a) (1) the VSee Closing Consideration, divided by (2) the total number of VSee Outstanding Shares, divided by (b) 10. “VSee Outstanding Shares” refers to the total number of shares of VSee Common Stock outstanding immediately prior to the Effective Time, expressed on a fully-diluted and as-converted to VSee Common Stock basis, and including, without limitation or duplication, the number of shares of VSee Common Stock issuable upon conversion of the VSee Preferred Stock. “Aggregate Transaction Proceeds” refers to an amount equal to the sum of (i) the aggregate cash proceeds available for release from the Trust Account in connection with the transactions contemplated hereby (after, for the avoidance of doubt, giving effect to all of the redemptions of the Public Shares) and (ii) the Aggregate Closing PIPE Proceeds. iDoc Merger Consideration The aggregate merger consideration that the holders of iDoc Stock as of the Effective Time are entitled to receive in the Business Combination, referred to as the “iDoc Closing Consideration,” is an amount equal to (1) $49,500,000 , minus (2) the aggregate amount of iDoc’s transaction expenses. 100% of the iDoc Closing Consideration will be paid in shares of Company Common Stock in accordance with the terms of the Business Combination Agreement and subject to deductions for the iDoc Indemnity Escrow Amount as described below. The “iDoc Per Share Consideration” refers to a number of shares of Common Stock equal to (a) (1) the iDoc Closing Consideration, divided by (2) the total number of iDoc Outstanding Shares, divided by (b) 10. “iDoc Outstanding Shares” refers to the total number of shares of iDoc Common Stock outstanding immediately prior to the Effective Time, expressed on a fully diluted and as-converted to iDoc Common Stock basis. VSee Health, Inc. Incentive Plan DHAC has agreed to approve and adopt the VSee Health, Inc. 2022 Equity Incentive Plan (the “Incentive Plan”) to be effective as of one day prior to the closing Business Combination and in a form mutually acceptable to DHAC, VSee and iDoc. The Incentive Plan shall provide for an initial aggregate share reserve equal to 15% of the number of shares of DHAC Common Stock outstanding following the closing after giving effect to the Business Combination, including without limitation, the PIPE Financing. Subject to approval of the Incentive Plan by DHAC’s Stockholders, DHAC has agreed to file a Form S-8 Registration Statement with the SEC following the Effective Time with respect to the shares of DHAC Common Stock issuable under the Incentive Plan. Conditions to Closing The obligations of DHAC, VSee and iDoc to consummate the Business Combination are subject to certain closing conditions, including, but not limited to, (i) the expiration or termination of any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, (ii) the approval of DHAC’s stockholders, (iii) the approval of VSee’s stockholders, (iv) the approval of iDoc’s stockholders and (v) the delivery of applicable closing deliverables. In addition, the obligations of VSee and iDoc to consummate the Business Combination are subject to the fulfillment of other closing conditions, including, but not limited to, (i) the approval by the Nasdaq Capital Market of DHAC’s listing application in connection with the Business Combination and (ii) the DHAC board of directors consisting of the number of directors, and comprising the individuals, as contemplated by the Business Combination Agreement. PIPE Securities Purchase Agreement In connection with the execution of the Business Combination Agreement, DHAC executed an Amended and Restated Securities Purchase Agreement (as amended, the “PIPE Securities Purchase Agreement” or “PIPE Forward Contract”) dated October 6, 2022 with certain PIPE Investors whereby the PIPE Investors subscribed for and will purchase, and DHAC will issue and sell, (i) 8,000 shares of Series A Preferred Stock (“Initial PIPE Shares”) convertible into shares of DHAC common stock and (ii) warrants (“Initial PIPE Warrants”) exercisable for 424,000 shares of DHAC Common Stock (such transactions, the “Initial PIPE Financing”) for aggregate proceeds of at least $8,000,000 . The PIPE Securities Purchase Agreement also provides that at any time after the date of the PIPE Securities Purchase Agreement and including (x) with respect to the PIPE Investors’ right to purchase Additional Offering Securities further to an Additional Offering (as each term is defined below) the earlier to occur of (I) the first anniversary of the date of the PIPE Securities Purchase Agreement and (II) the date of the consummation of one or more Subsequent Placements (as defined in the PIPE Securities Purchase Agreement) with the PIPE Investors on terms identical to the PIPE Securities Purchase Agreement and the other PIPE Financing documents in all material respects with an aggregate purchase price of at least $10 million (the “Additional Offering”, and the securities thereof, the “Additional Offering Securities”) and (y) with respect to Buyer’s right to participate in a Subsequent Placement other than an Additional Offering the earlier to occur of (I) the initial date after the Closing that no PIPE Shares remain outstanding, and (II) the date of the consummation of a Subsequent Placement by the Company with gross proceeds, paid in cash, of at least $5,000,000 , in either case, neither the Company nor any of its subsidiaries shall, directly or indirectly, effect any Subsequent Placement unless the Company shall have first complied with the PIPE Investors’ participation right described herein and set forth in the PIPE Securities Purchase Agreement. With respect to (i) Additional Offerings, DHAC is required to offer 100% of the Additional Offering Securities to the PIPE Investors; and (ii) Subsequent Placements, DHAC is required to offer 25% of the Offered Securities to the PIPE Investors. The Aggregate Closing PIPE Proceeds will be a part of the aggregate cash proceeds available for release to DHAC, Merger Sub I, and Merger Sub II in connection with the transactions contemplated by the Business Combination Agreement. The PIPE Warrants are exercisable into shares of DHAC Common Stock at a price of $12.50 per share and expire 5 years from the date of issuance. The PIPE Shares are convertible into shares of DHAC Common Stock at a price of $10.00 per share, subject to certain adjustments. The Certificate of Designation of the Series A Preferred Stock establishes the terms and conditions of the Series A Preferred Stock. The Company reviewed the PIPE Securities Purchase Agreement’s underlying securities under ASC 480 and ASC 815 and concluded that Series Preferred A Stock includes a contingent redemption that would require temporary equity treatment at issuance and the warrants do not have any elements that would preclude them from equity treatment and therefore are not subject to the Derivative guidance under ASC 815. However under ASC 480-10-55-33 a forward contract that permits the holder to purchase redeemable shares (the Series A Preferred Stock) is a liability pursuant to ASC 480 because (1) the forward contract itself is indexed to an underlying share (i.e., the option’s value varies with the fair value of the share) that embodies the issuer’s obligation to repurchase the share and (2) the issuer has a conditional obligation to transfer assets if the shares are put back. Accordingly, the Company determined the fair value of the PIPE Forward Contract and noted the value at the October 6, 2022, the executed date of agreement was zero. As of September 30, 2023, the value of the PIPE Forward Contract was $3,146,694 (see Note 9. Fair Value Measurements for additional disclosure on the PIPE Forward Contract). On April 11, 2023 but effective March 31, 2023, the Company entered into an amendment to the PIPE Securities Purchase Agreement to, among other things, (a) amend and restate the form of Certificate of Designation of the Series A Preferred Stock to provide the aggregate number of shares of Series A Preferred Stock issuable thereunder shall not exceed 15,000 , (b) amend and restate the form of PIPE Warrant to correct an error in the redemption provision of the PIPE Warrants, and (c) revise certain closing conditions for the PIPE Financing. As previously disclosed in its Current Report on Form 8-K filed on April 12, 2023, the Company and each of the PIPE Investors entered into amendments to the PIPE SPA to, among other things, add a closing condition providing that the closing date of the business combination shall occur on or prior to July 10, 2023 (the “Outside Date Closing Condition”). On July 11, 2023, each of the PIPE Investors provided notice to the Company that since the Outside Date Closing Condition was not met, the PIPE Investors were under no obligation to close the PIPE Financing. PIPE Registration Rights Agreement In connection with the closing of the transactions contemplated by the PIPE Securities Purchase Agreement, DHAC and the PIPE Investors will enter into the registration rights agreement (the “PIPE Registration Rights Agreement”). The PIPE Registration Rights Agreement provides the PIPE Investors with customary registration rights with respect to the shares of Common Stock underlying the PIPE Shares and PIPE Warrants issued to the PIPE Investors. Pursuant to the Registration Rights Agreement, DHAC will agree to (i) file a registration statement with the SEC for the registration and resale of a number of shares of DHAC Common Stock at least equal to 200% of the sum of the number of shares of DHAC Common Stock issuable upon conversion of the PIPE Shares and upon exercise of the PIPE Warrants (collectively, the “Registrable Securities”) within 30 days after the closing of the PIPE Securities Purchase Agreement; (ii) to use DHAC’s best efforts to have such registration statement to be declared effective as soon as practicable after the filing thereof, but no later than earlier of (a) the 90 th calendar day (or 120 th calendar day if the SEC notifies the Company that it will “review” the registration statement) and (b) the 2nd business day after the date the Company is notified (orally or in writing, whichever is earlier) by the SEC that the registration statement will not be “reviewed” or will not be subject to further review and (iii) to use DHAC’s best efforts to maintain the effectiveness of such registration statement with respect to the Registrable Securities at all times until the date all of the securities covered hereby can be sold publicly without restriction or limitation under Rule 144 under the Securities Act. On July 11, 2023, each of the PIPE Investors provided notice to the Company that since the Outside Date Closing Condition was not met, the PIPE Investors were under no obligation to close the PIPE Financing. PIPE Lock-Up Agreement Pursuant to the PIPE Securities Purchase Agreement, certain of DHAC’s stockholders will enter into a lock-up agreement (the “PIPE Lock-Up Agreement”) with DHAC. Pursuant to the PIPE Lock-Up Agreement, such stockholders will not (i) sell, offer to sell, contract or agree to sell, hypothecate, pledge, grant any option to purchase, make any short sale or otherwise dispose of or agree to dispose of, directly or indirectly, any shares of DHAC Common Stock or Convertible Securities (as defined in the PIPE Securities Purchase Agreement), or establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Securities and Exchange Act of 1934, as amended and the rules and regulations of the Securities and Exchange Commission promulgated thereunder with respect to any shares of Common Stock or Convertible Securities owned directly by the PIPE Investors (including holding as a custodian) or with respect to which each PIPE Investor has beneficial ownership within the rules and regulations of the Securities and Exchange Commission (collectively, the “PIPE Investor Shares”), or (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any of the PIPE Investor Shares, whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of shares of DHAC Common Stock or other securities, in cash or otherwise, or (iii) make any demand for or exercise any right or cause to be filed a registration statement, including any amendments thereto, with respect to the registration of any shares of DHAC Common Stock or Convertible Securities or (iv) publicly disclose the intention to do any of the foregoing. Under the PIPE Lock-Up Agreement, the PIPE Lock-Up Period means the period beginning on the date of the Lock-Up Agreement and ending on the earliest of (i) eight months after the Closing Date, or (ii) on the trading day after DHAC’s Common Stock exceeds $12.50 (as adjusted for any stock splits, stock dividends, stock combinations recapitalizations and similar events) for a period of twenty consecutive trading days after the Closing Date. On July 11, 2023, each of the PIPE Investors provided notice to the Company that since the Outside Date Closing Condition was not met, the PIPE Investors were under no obligation to close the PIPE Financing. Bridge Securities Purchase Agreement and Bifurcated Derivative On October 6, 2022, in connection with the execution of the Business Combination Agreement, DHAC, VSee and iDoc entered into a Securities Purchase Agreement (the “Bridge Purchase Agreement”) with an accredited investor, who is also an investor in the Sponsor, pursuant to which DHAC, VSee and iDoc each issued and sold to such investor 10% original issue discount senior secured promissory notes due October 5, 2023 in the aggregate principal amount of $ 2,222,222 (the “Bridge Notes”). $888,889 of the Bridge Note was allocated to DHAC. The Bridge Notes will be assumed by DHAC in connection with the closing of the Business Combination. The Bridge Notes bear guaranteed interest at a rate of 10.00% per annum. In connection with the purchase of the Bridge Notes, DHAC issued the investor (i) 173,913 warrants, each representing the right to purchase one share of DHAC common stock at an initial exercise price of $ 11.50 , subject to certain adjustments (the “Bridge Warrants”) and (ii) 30,000 shares of DHAC common stock as additional consideration for the purchase of the Bridge Notes and Bridge Warrants. If the PIPE Financing closes in connection with the closing of the Business Combination, 110% of all unpaid principal under the Bridge Notes and guaranteed interest of 10% are due and payable at the closing of the PIPE Financing. The Company reviewed the warrants and common stock issued in connection with the Securities Purchase agreement under ASC 815 and concluded that the Warrants are not in scope of ASC 480 and are not subject to the Derivative guidance under ASC 815. The Warrants and the Common Stock should be recorded as equity. As such the Principal value of the notes was allocated using the relative fair value basis of all three instruments. As the Warrants were issued with various instruments the purchase price needs to be allocated using the relative fair value method (i.e., warrant at its fair value and the common stock at its fair value the Promissory note at its principal value allocated using the relative fair value of the proceeds received an applied proportionally to the equity classified stock, warrants and Promissory Note). The Company reviewed the contingent early repayment option granted in the Bridge Note under ASC 815 and concluded that as a result of the significant discount granted in the note the contingent repayment provision is therefore considered an embedded derivative that should be bifurcated from the debt host. Accordingly, in accordance with ASC 470-20, the Company allocated the Bridge Note proceeds between the Bridge Note and the Bifurcated Derivative, using the residual method by allocating the principal first to fair value of the embedded derivative and then to the debt. Accordingly, the fair value of the embedded derivative at issuance was $278,404 and the residual value of $610,485 was allocated to the principal balance of the note (see Note 9. Fair Value Measurements for additional disclosure on the derivative). DHAC as a result received cash proceeds of $738,200 net of $61,800 of direct cost attributable to the financing. The warrants and shares issued to investors were analyzed under ASC 815 and noted there were no elements that would preclude equity treatment. As such the Company recorded the fair value of the Bridge Warrants of $8,552 , net of $613 of offering cost allocated based on the relative value basis and Bridge Shares of $284,424 , net of $20,376 of offering cost allocated based on the relative value basis. As a result, of the bifurcated derivative discussed above, the offering cost allocated to the debt, and the value of the share and warrants granted, the Company recorded amortizable debt discount of $443,665 consisting of $40,811 in financing cost allocated to the Bridge Note, $9,165 the issuance date fair value of the Bridge Warrants, $304,800 the fair value of the Bridge Shares and $88,889 originally issued discount. As of September 30, 2023, the Bridge Note net of unamortized debt discount was $692,216 . The Company recognized $332,749 of amortized debt discount and $66,666 in accrued interest for a total Bridge Note interest expense of $399,415 for the nine months ended September 30, 2023. In connection with the Bridge Purchase Agreement, the Company entered into a Registration Rights Agreement with the Bridge investor, dated October 5, 2022, which provides that the Company will file a registration statement to register the shares of Common Stock underlying the Bridge Warrants and the commitment shares. Securities Purchase Agreement and Bifurcated Derivative On May 5, 2023, the Company entered into a securities purchase agreement (the “May 2023 SPA”) with an institutional investor (the “Holder”). Pursuant to the May 2023 SPA, the Company issued the Holder a 16.67% original issue discount promissory note, in favor of the Holder, in the aggregate principal amount of $ 300,000 (the “Investor Note”). The Investor Note bears guaranteed interest at a rate of 10% per annum and is due and payable on May 5, 2024. If the Company’s PIPE financing closes in connection with the closing of its business combination, 110% of all unpaid principal under the Investor Note and guaranteed interest of 10% are due and payable at the closing of the PIPE financing. VSee Lab, Inc., a Delaware corporation (“VSee”) and iDoc Virtual Telehealth Solutions, Inc., a Texas corporation (“iDoc”), guaranteed the Company’s obligations under the May 2023 SPA, the Investor Note and the other transaction documents (the “May 2023 Financing Documents”) pursuant to a Subsidiary Guaranty dated May 5, 2023. The Company’s, VSee’s and iDoc’s obligations to the Holder under the May 2023 Financing Documents are subordinated to the Company’s, VSee’s and iDoc’s obligations to its existing bridge lender. In connection with the May 2023 SPA, the Company issued to the Holder (i) warrants with an exercise period of five years to purchase up to 26,086 shares of the Company’s Common Stock at an exercise price of $11.50 per share (the “Investor Note Warrants”), and (ii) 7,000 shares of the Company’s Common Stock as commitment shares (the “May 2023 Commitment Shares”). The Company also entered into a Registration Rights Agreement with the Holder, dated May 5, 2023 (the “ May 2023 RRA”), which provides that the Company will file a registration statement to register the shares of Common Stock underlying the Investor Note Warrants and the May 2023 Commitment Shares, subject to the terms thereof. The Company reviewed the Investor Note Warrants and May 2023 Commitment Shares issued in connection with the May 2023 SPA under ASC 815 and concluded that the Investor Note Warrants are not in scope of ASC 480 and are not subject to the Derivative guidance under ASC 815. The Investor Note Warrants and the May 2023 Commitment Shares should be recorded as equity. As such the Principal value of the Investor Note was allocated using the relative fair value basis of all three instruments. As the Investor Note Warrants were issued with various instruments the purchase price needs to be allocated using the relative fair value method (i.e., warrant at its fair value and the common stock at its fair value the Promissory note at its principal value allocated using the relative fair value of the proceeds received an applied proportionally to the equity classified stock, warrants and Promissory Note). The Company reviewed the contingent early repayment option granted in the Investor Note under ASC 815 and concluded that as a result of the significant discount granted in the note the contingent repayment provision is therefore considered an embedded derivative that should be bifurcated from the debt host. Accordingly, in accordance with ASC 470-20, the Company allocated the Investor Note proceeds between the Investor Note and the Bifurcated Derivative, using the residual method by allocating the principal first to fair value of the embedded derivative and then to the debt. Accordingly, the fair value of the embedded derivative at issuance was $ 71,755 and the residual value of $ 228,245 was allocated to the principal balance of the note (see Note 9. Fair Value Measurements for additional disclosure on the derivative). DHAC as a result received cash proceeds of $240,000 net of $10,000 of direct cost attributable to the financing. The warrants and shares issued to the Holder were analyzed under ASC 815 and noted there were no elements that would preclude equity treatment. As such the Company recorded the fair value of the Investor Note Warrants of $2,461 , net of $82 of offering cost allocated based on the relative value basis and May 2023 Commitment Shares of $76,102 , net of $2,542 of offering cost allocated based on the relative value basis. As a result, of the bifurcated derivative discussed above, the offering cost allocated to the debt, and the value of the shares and warrants granted, the Company recorded amortizable debt discount of $175,472 consisting of $56,993 in financing cost allocated to the Investor Note, $40,130 the issuance date fair value of the Investor Note Warrants, $78,349 the fair value of the May 2023 Commitment Shares and $50,000 originally issued discount. As of September 30, 2023, the Investor Note net of unamortized debt discount was $182,799 . The Company recognized $70,676 of amortized debt discount and $12,097 in accrued interest for a total Investor Note interest expense of $82,773 for the nine months ended September 30, 2023. In connection with the May 2023 SPA, the Company entered into the May 2023 RRA with the Holder, dated May 5, 2023, which provides that the Company will file a registration statement to register the shares of Common Stock underlying the Investor Note Warrants and the May 2023 Commitment Shares. Backstop Agreement On January 18, 2023 DHAC and the Sponsor, entered into a Backstop Agreement (the “Backstop Agreement”) pursuant to which DHAC agreed to offer on or prior to the closing of the Business Combination the PIPE Investors the option to purchase up to an additional 2,000 shares of Series A Preferred Stock initially convertible into 234,260 shares of DHAC common stock (the “Additional PIPE Shares” and together with the Initial PIPE Shares, the “PIPE Shares”), together with additional warrants to purchase up to 106,000 shares of DHAC common stock (the “Additional PIPE Warrants” and together with the Initial PIPE Warrants, the “PIPE Warrants”; the Additional PIPE Shares and Additional PIPE Warrants are referred to as the “Additional PIPE Securities”) pursuant to a participation right granted to the PIPE Investors under the PIPE Securities Purchase Agreement, in each case, on the same terms and conditions set forth in the PIPE Securities Purchase Agreement for an aggregate purchase price of up to $2,000,000 (such proceeds together with the proceeds from the Initial PIPE Financing, as increased pursuant to the amendment to the Backstop Agreement described below, the “Aggregate Closing PIPE Proceeds”). Pursuant to the Backstop Agreement, if the PIPE Investors do not elect to purchase all of the Additional PIPE Securities, the Sponsor has agreed to purchase any such unsubscribed Additional PIPE Securities concurrent with the closing of the transactions contemplated by the PIPE Securities Purchase Agreement on the same terms and conditions set forth in the PIPE Securities Purchase Agreement. The Backstop Agreement contains customary representations, warranties, and agreements of the Company and the Sponsor and is subject to customary closing conditions and termination rights. If the conditions to the consummation of the Backstop Commitment contemplated by the Backstop Agreement are triggered, the closing of the sale of the Remaining Securities is expected to occur substantially concurrently with the closing of the transactions contemplated by the PIPE SPA. On April 11, 2023 but effective March 31, 2023, the Sponsor and DHAC entered into an amendment to the Backstop Agreement to increase the Additional PIPE Shares that may be purchased pursuant to the Backstop Agreement from 2,000 shares of Series A Preferred Stock to 7,000 shares of Series A Preferred Stock, for an aggregate additional PIPE financing of up to $7,000,000 , increasing the Aggregate Closing PIPE Proceeds to a total of $15,000,000 . Pursuant to the PIPE Securities Purchase Agreement and the Backstop Agreement, each as amended, any purchaser of Additional PIPE Securities will enter into a lock up agreement with the Company pursuant to which such purchaser will agree not to, subject to certain limited exceptions, (i) sell, offer to sell, contract or agree to sell, hypothecate, pledge, grant any option to purchase, make any short sale or otherwise dispose of or agree to dispose of, directly or indirectly, any Additional PIPE Securities, or establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Securities and Exchange Act of 1934, as amended and the rules and regulations of the Securities and Exchange Commission promulgated thereunder with respect to any Additional PIPE Securities owned directly by the purchaser (including holding as a custodian) or with respect to which the purchaser has beneficial ownership within the rules and regulations of the Securities and Exchange Commission, or (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any of the purchaser’s Additional PIPE Securities, whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of shares of DHAC Common Stock or other securities, in cash or otherwise, (3) make any demand for or exercise any right or cause to be filed a registration statement, including any amendments thereto, with respect to the registration of any Additional PIPE Securities or (4) publicly disclose the intention to do any of the foregoing. On July 11, 2023, each of the PIPE Investors provided notice to the Company that since the Outside Date Closing Condition was not met, the PIPE Investors were under no obligation to close the PIPE Financing as such the Backstop | NOTE 6. COMMITMENTS IPO Registration and Stockholders’ Rights Pursuant to a registration rights agreement entered into on November 3, 2021, the holders of the (i) founder shares, which were issued in a private placement prior to the closing of the Initial Public Offering and (ii) private placement units (including all underlying securities), issued in a private placement simultaneously with the closing of the Initial Public Offering have registration rights to require the Company to register a sale of any of its securities held by them pursuant to a registration rights agreement. These holders are entitled to make up to two demands that the Company registers such securities for sale under the Securities Act. In addition, these holders will have “piggyback” registration rights to include their securities in other registration statements filed by the Company. Underwriters Agreement The Representative is entitled to a deferred underwriting commission of 3.8% of the gross proceeds of the Initial Public Offering held in the Trust Account upon the completion of the Company’s initial Business Combination subject to the terms of the underwriting agreement. The Company executed a Securities Purchase Agreement (the “Series B Securities Purchase Agreement”) dated November 3, 2022 with A.G.P. whereby A.G.P. subscribed for and will purchase, and DHAC will issue and sell, at the closing of the Business Combination, 4,370 shares of Series B Preferred Stock (“Series B Shares”) convertible into shares of DHAC common stock. The purchase price for the Series B Shares will be paid by conversion of A.G.P.’s $4,370,000 deferred underwriting fee into such Series B Shares. The Certificate of Designation of the Series B Preferred Stock establishes the terms and conditions of the Series B Preferred Stock. The Company reviewed the Series B Preferred Stock under ASC 480 and ASC 815 and concluded that Series B Preferred Stock did not include any elements that would preclude them from equity treatment and therefore are not subject to the liability treatment under ASC 480 or derivative guidance under ASC 815. The Business Combination Agreement On June 15, 2022, Digital Health Acquisition Corp (“DHAC”) entered into the Business Combination Agreement, with Merger Sub I, Merger Sub II, VSee and iDoc. On August 9, 2022, DHAC, Merger Sub I, Merger Sub II, VSee and iDoc entered into the First Amended and Restated Business Combination Agreement to provide for the concurrent execution of financing documents for a PIPE consisting of convertible notes and warrants and delivery of the Cassel Salpeter’s opinion to the Board. On October 6, 2022, DHAC, Merger Sub I, Merger Sub II, VSee and iDoc entered into the Business Combination Agreement to make the consideration payable to VSee and iDoc stockholders 100% DHAC common stock and to provide for the concurrent execution of amended PIPE Financing documents providing for the issuance of the PIPE Shares and the PIPE Warrants. Pursuant to the terms of the Business Combination Agreement, a business combination by and among DHAC, VSee and iDoc will be effected through the merger of Merger Sub I with and into VSee, with VSee surviving the Merger as a wholly owned subsidiary of DHAC and the merger of Merger Sub II with and into iDoc, with iDoc surviving the Merger as a wholly owned subsidiary of DHAC. The Board of Directors of DHAC (the “Board”) has (i) approved and declared advisable the Business Combination Agreement, the Business Combination and the other transactions contemplated thereby and (ii) resolved to recommend approval of the Business Combination Agreement and related matters by the stockholders of DHAC. The Merger Consideration The Business Combination combined equity value of VSee and iDoc is $110 million. At the Closing, each of VSee and iDoc will convert each share of VSee and iDoc capital stock (excluding shares of the holders who perfect rights of appraisal under Delaware or Texas law, as the case may be) into the right to receive the applicable merger consideration as further described below. VSee Merger Consideration The aggregate merger consideration that the holders of VSee Stock as of the Effective Time are entitled to receive in the Business Combination, referred to as the “VSee Closing Consideration,” is an amount equal to (1) $60,500,000, minus (2) an amount equal to the Effective Time Option Grants multiplied by $10, minus (3) the aggregate amount of VSee’s transaction expenses. “Effective Time Option Grants” refers to the stock options with an exercise price of $10 per share pursuant to the Incentive Plan to the individuals, in the amounts, and on the terms set forth on Exhibit E to the Business Combination Agreement. 100% of the VSee Closing Consideration will be paid in shares of Company Common Stock in accordance with the terms of the Business Combination Agreement and subject to deductions for the VSee Indemnity Escrow Amount as described below. The “VSee Per Share Consideration” refers to a number of shares of Common Stock equal to (a) (1) the VSee Closing Consideration, divided by (2) the total number of VSee Outstanding Shares, divided by (b) 10. “VSee Outstanding Shares” refers to the total number of shares of VSee Common Stock outstanding immediately prior to the Effective Time, expressed on a fully-diluted and as-converted to VSee Common Stock basis, and including, without limitation or duplication, the number of shares of VSee Common Stock issuable upon conversion of the VSee Preferred Stock. “Aggregate Transaction Proceeds” refers to an amount equal to the sum of (i) the aggregate cash proceeds available for release from the Trust Account in connection with the transactions contemplated hereby (after, for the avoidance of doubt, giving effect to all of the redemptions of the Public Shares) and (ii) the Aggregate Closing PIPE Proceeds. iDoc Merger Consideration The aggregate merger consideration that the holders of iDoc Stock as of the Effective Time are entitled to receive in the Business Combination, referred to as the “iDoc Closing Consideration,” is an amount equal to (1) $49,500,000, minus (2) the aggregate amount of iDoc’s transaction expenses. 100% of the iDoc Closing Consideration will be paid in shares of Company Common Stock in accordance with the terms of the Business Combination Agreement and subject to deductions for the iDoc Indemnity Escrow Amount as described below. The “iDoc Per Share Consideration” refers to a number of shares of Common Stock equal to (a) (1) the iDoc Closing Consideration, divided by (2) the total number of iDoc Outstanding Shares, divided by (b) 10. “iDoc Outstanding Shares” refers to the total number of shares of iDoc Common Stock outstanding immediately prior to the Effective Time, expressed on a fully diluted and as-converted to iDoc Common Stock basis. VSee Health, Inc. Incentive Plan DHAC has agreed to approve and adopt the VSee Health, Inc. 2022 Equity Incentive Plan (the “Incentive Plan”) to be effective as of one day prior to the closing Business Combination and in a form mutually acceptable to DHAC, VSee and iDoc. The Incentive Plan shall provide for an initial aggregate share reserve equal to 15% of the number of shares of DHAC Common Stock outstanding following the closing after giving effect to the Business Combination, including without limitation, the PIPE Financing. Subject to approval of the Incentive Plan by DHAC’s Stockholders, DHAC has agreed to file a Form S-8 Registration Statement with the SEC following the Effective Time with respect to the shares of DHAC Common Stock issuable under the Incentive Plan. Conditions to Closing The obligations of DHAC, VSee and iDoc to consummate the Business Combination are subject to certain closing conditions, including, but not limited to, (i) the expiration or termination of any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, (ii) the approval of DHAC’s stockholders, (iii) the approval of VSee’s stockholders, (iv) the approval of iDoc’s stockholders and (v) after giving effect to the transactions contemplated by the Business Combination Agreement, including the PIPE Financing, DHAC having at least $5,000,001 of net tangible assets immediately after the Effective Time and (vi) the delivery of applicable closing deliverables. In addition, the obligations of VSee and iDoc to consummate the Business Combination are subject to the fulfillment of other closing conditions, including, but not limited to, (i) the approval by the Nasdaq Capital Market of DHAC’s listing application in connection with the Business Combination and (ii) the DHAC board of directors consisting of the number of directors, and comprising the individuals, as contemplated by the Business Combination Agreement. PIPE Securities Purchase Agreement In connection with the execution of the Business Combination Agreement, DHAC executed an Amended and Restated Securities Purchase Agreement (as amended, the “PIPE Securities Purchase Agreement” or “PIPE Forward Contract”) dated October 6, 2022 with certain PIPE Investors whereby the PIPE Investors subscribed for and will purchase, and DHAC will issue and sell, (i) 8,000 shares of Series A Preferred Stock (“Initial PIPE Shares”) convertible into shares of DHAC common stock and (ii) warrants (“Initial PIPE Warrants”) exercisable for 424,000 shares of DHAC Common Stock (such transactions, the “Initial PIPE Financing”) for aggregate proceeds of at least $8,000,000. The PIPE Securities Purchase Agreement also provides that at any time after the date of the PIPE Securities Purchase Agreement and including (x) with respect to the PIPE Investors’ right to purchase Additional Offering Securities further to an Additional Offering (as each term is defined below) the earlier to occur of (I) the first anniversary of the date of the PIPE Securities Purchase Agreement and (II) the date of the consummation of one or more Subsequent Placements (as defined in the PIPE Securities Purchase Agreement) with the PIPE Investors on terms identical to the PIPE Securities Purchase Agreement and the other PIPE Financing documents in all material respects with an aggregate purchase price of at least $10 million (the “Additional Offering”, and the securities thereof, the “Additional Offering Securities”) and (y) with respect to Buyer’s right to participate in a Subsequent Placement other than an Additional Offering the earlier to occur of (I) the initial date after the Closing that no PIPE Shares remain outstanding, and (II) the date of the consummation of a Subsequent Placement by the Company with gross proceeds, paid in cash, of at least $5,000,000, in either case, neither the Company nor any of its subsidiaries shall, directly or indirectly, effect any Subsequent Placement unless the Company shall have first complied with the PIPE Investors’ participation right described herein and set forth in the PIPE Securities Purchase Agreement. With respect to (i) Additional Offerings, DHAC is required to offer 100% of the Additional Offering Securities to the PIPE Investors; and (ii) Subsequent Placements, DHAC is required to offer 25% of the Offered Securities to the PIPE Investors. The Aggregate Closing PIPE Proceeds will be a part of the aggregate cash proceeds available for release to DHAC, Merger Sub I, and Merger Sub II in connection with the transactions contemplated by the Business Combination Agreement. The PIPE Warrants are exercisable into shares of DHAC Common Stock at a price of $12.50 per share and expire 5 years from the date of issuance. The PIPE Shares are convertible into shares of DHAC Common Stock at a price of $10.00 per share, subject to certain adjustments. The Certificate of Designation of the Series A Preferred Stock establishes the terms and conditions of the Series A Preferred Stock. The Company reviewed the PIPE Securities Purchase Agreement’s underlying securities under ASC 480 and ASC 815 and concluded that Series Preferred A Stock includes a contingent redemption that would require temporary equity treatment at issuance and the warrants do not have any elements that would preclude them from equity treatment and therefore are not subject to the Derivative guidance under ASC 815. However under ASC 480-10-55-33 a forward contract that permits the holder to purchase redeemable shares (the Series A Preferred Stock) is a liability pursuant to ASC 480 because (1) the forward contract itself is indexed to an underlying share (i.e., the option’s value varies with the fair value of the share) that embodies the issuer’s obligation to repurchase the share and (2) the issuer has a conditional obligation to transfer assets if the shares are put back. Accordingly, the Company determined the fair value of the PIPE Forward Contract and noted the value at the October 6, 2022, the executed date of agreement was zero. As of December 31, 2022, the value of the PIPE Forward Contract was $84,605 (see Note 10. Fair Value Measurements for additional disclosure on the PIPE Forward Contract). PIPE Registration Rights Agreement In connection with the closing of the transactions contemplated by the PIPE Securities Purchase Agreement, DHAC and the PIPE Investors will enter into the registration rights agreement (the “PIPE Registration Rights Agreement”). The PIPE Registration Rights Agreement provides the PIPE Investors with customary registration rights with respect to the shares of Common Stock underlying the PIPE Shares and PIPE Warrants issued to the PIPE Investors. Pursuant to the Registration Rights Agreement, DHAC will agree to (i) file a registration statement with the SEC for the registration and resale of a number of shares of DHAC Common Stock at least equal to 200% of the sum of the number of shares of DHAC Common Stock issuable upon conversion of the PIPE Shares and upon exercise of the PIPE Warrants (collectively, the “Registrable Securities”) within 30 days after the closing of the PIPE Securities Purchase Agreement; (ii) to use DHAC’s best efforts to have such registration statement to be declared effective as soon as practicable after the filing thereof, but no later than earlier of (a) the 90th calendar day (or 120th calendar day if the SEC notifies the Company that it will “review” the registration statement) and (b) the 2nd business day after the date the Company is notified (orally or in writing, whichever is earlier) by the SEC that the registration statement will not be “reviewed” or will not be subject to further review and (iii) to use DHAC’s best efforts to maintain the effectiveness of such registration statement with respect to the Registrable Securities at all times until the date all of the securities covered hereby can be sold publicly without restriction or limitation under Rule 144 under the Securities Act. PIPE Lock-Up Agreement Pursuant to the PIPE Securities Purchase Agreement, certain of DHAC’s stockholders will enter into a lock-up agreement (the “PIPE Lock-Up Agreement”) with DHAC. Pursuant to the PIPE Lock-Up Agreement, such stockholders will not (i) sell, offer to sell, contract or agree to sell, hypothecate, pledge, grant any option to purchase, make any short sale or otherwise dispose of or agree to dispose of, directly or indirectly, any shares of DHAC Common Stock or Convertible Securities (as defined in the PIPE Securities Purchase Agreement), or establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Securities and Exchange Act of 1934, as amended and the rules and regulations of the Securities and Exchange Commission promulgated thereunder with respect to any shares of Common Stock or Convertible Securities owned directly by the PIPE Investors (including holding as a custodian) or with respect to which each PIPE Investor has beneficial ownership within the rules and regulations of the Securities and Exchange Commission (collectively, the “PIPE Investor Shares”), or (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any of the PIPE Investor Shares, whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of shares of DHAC Common Stock or other securities, in cash or otherwise, or (iii) make any demand for or exercise any right or cause to be filed a registration statement, including any amendments thereto, with respect to the registration of any shares of DHAC Common Stock or Convertible Securities or (iv) publicly disclose the intention to do any of the foregoing. Under the PIPE Lock-Up Agreement, the PIPE Lock-Up Period means the period beginning on the date of the Lock-Up Agreement and ending on the earliest of (i) eight months after the Closing Date, or (ii) on the trading day after DHAC’s Common Stock exceeds $12.50 (as adjusted for any stock splits, stock dividends, stock combinations recapitalizations and similar events) for a period of twenty consecutive trading days after the Closing Date. Bridge Securities Purchase Agreement and Bifurcated Derivative On October 6, 2022, in connection with the execution of the Business Combination Agreement, DHAC, VSee and iDoc entered into a Securities Purchase Agreement (the “Bridge Purchase Agreement”) with an accredited investor, who is also an investor in the Sponsor, pursuant to which DHAC, VSee and iDoc each issued and sold to such investor 10% original issue discount senior secured promissory notes due October 5, 2023 in the aggregate principal amount of $2,222,222 (the “Bridge Notes”). $888,889 of the Bridge Note was allocated to DHAC. The Bridge Notes will be assumed by DHAC in connection with the closing of the Business Combination. The Bridge Notes bear guaranteed interest at a rate of 10.00% per annum. In connection with the purchase of the Bridge Notes, DHAC issued the investor (i) 173,913 warrants, each representing the right to purchase one share of DHAC common stock at an initial exercise price of $11.50, subject to certain adjustments (the “Bridge Warrants”) and (ii) 30,000 shares of DHAC common stock as additional consideration for the purchase of the Bridge Notes and Bridge Warrants. If the PIPE Financing closes in connection with the closing of the Business Combination, 110% of all unpaid principal under the Bridge Notes and guaranteed interest of 10% are due and payable at the closing of the PIPE Financing. The Company reviewed the warrants and common stock issued in connection with the Securities Purchase agreement under ASC 815 and concluded that the Warrants are not in scope of ASC 480 and are not subject to the Derivative guidance under ASC 815. The Warrants and the Common Stock should be recorded as equity. As such the Principal value of the notes was allocated using the relative fair value basis of all three instruments. As the Warrants were issued with various instruments the purchase price needs to be allocated using the relative fair value method (i.e., warrant at its fair value and the common stock at its fair value the Promissory note at its principal value allocated using the relative fair value of the proceeds received an applied proportionally to the equity classified stock, warrants and Promissory Note). The Company reviewed the contingent early repayment option granted in the Bridge Note under ASC 815 and concluded that as a result of the significant discount granted in the note the contingent repayment provision is therefore considered an embedded derivative that should be bifurcated from the debt host. Accordingly, in accordance with ASC 470-20, the Company allocated the Bridge Note proceeds between the Bridge Note and the Bifurcated Derivative, using the residual method by allocating the principal first to fair value of the embedded derivative and then to the debt. Accordingly, the fair value of the embedded derivative at issuance was $278,404 and the residual value of $610,485 was allocated to the principal balance of the note (see Note 10. Fair Value Measurements for additional disclosure on the derivative). DHAC as a result received cash proceeds of $738,200 net of $61,800 of direct cost attributable to the financing. The warrants and shares issued to investors were analyzed under ASC 815 and noted there were no elements that would preclude equity treatment. As such the Company recorded the fair value of the Bridge Warrants of $8,552, net of $613 of offering cost allocated based on the relative value basis and Bridge Shares of $284,424, net of $20,376 of offering cost allocated based on the relative value basis. As a result, of the bifurcated derivative discussed above, the offering cost allocated to the debt, and the value of the share and warrants granted, the Company recorded amortizable debt discount of $443,665 consisting of $40,811 in financing cost allocated to the Bridge Note, $9,165 the issuance date fair value of the Bridge Warrants, $304,800 the fair value of the Bridge Shares and $88,889 originally issued discount. As of December 31, 2022, the Bridge Note net of unamortized debt discount was $292,800. The Company recognized $104,953 of amortized debt discount and $21,027 in accrued interest for a total Bridge Note interest expense of $125,980. In connection with the Bridge Purchase Agreement, the Company entered into a Registration Rights Agreement with the Bridge investor, dated October 5, 2022, which provides that the Company will file a registration statement to register the shares of Common Stock underlying the Bridge Warrants and the commitment shares. Legal Claims On September 26, 2022, the Company was notified of a lawsuit filed against the Company. The plaintiff’s claims arose out of an alleged breach of a purported employment agreement with iDoc and VSee that was to become DHAC’s obligation at the closing of the business combination, and the plaintiff’s alleged wrongful termination related thereto. The plaintiff sought unpaid compensation, back and front pay, compensatory damages, unreimbursed business expenses, an award equal to alleged promised stock, an award of prejudgment and post judgment interest, punitive damages, and taxable costs and reasonable attorneys’ fees. The lawsuit is currently pending before the Superior Court of the State of Arizona in and for the County of Maricopa. The parties began engaging in settlement discussions shortly after the complaint was served. The Company has not appeared in the action, but denies liability. On February 1, 2023, the parties came to a global resolution and executed a confidential settlement agreement. On February 3, 2023, Plaintiff’s counsel filed a notice of settlement with the court, requesting that the matter be placed on the inactive calendar for at least 30 days to allow the parties time to effectuate the terms of the settlement agreement. The parties filed a stipulation to dismiss the entire case with prejudice on April 7, 2023. |
STOCKHOLDERS' DEFICIT_2
STOCKHOLDERS' DEFICIT | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
STOCKHOLDERS' DEFICIT | ||
STOCKHOLDERS' DEFICIT | NOTE 7. STOCKHOLDERS’ DEFICIT Common Shares The Company is authorized to issue 50,000,000 of common shares with a par value of $0.0001 per share. On June 7, 2021, the Sponsor, along with certain of the Company’s directors, officers and advisors purchased 4,312,500 shares for an aggregate purchase price of $25,000 . In October 2021, the Sponsor, officers and certain advisors forfeited an aggregate of 1,437,500 shares of common stock, resulting in 2,875,000 founder shares outstanding. At the closing of the Initial Public Offering, 557,000 shares were issued as part of the Private Placement sale. On October 6, 2022 in connection with the Bridge Purchase Agreement 30,000 shares were issued to the Bridge Financing investor. In February 2023, 20,000 shares were issued to an additional stockholder. On May 5, 2023 in connection with the May 2023 SPA, 7,000 shares were issued to the investor. As of September 30, 2023 and December 31, 2022, there were 3,489,000 and 3,462,000 , respectively, common shares issued and outstanding , excluding 694,123 , respectively, shares subject to redemption which were classified outside of permanent deficit on the condensed consolidated balance sheets. The holders of record of the Company’s common stock are entitled to one vote for each share held on all matters to be voted on by stockholders. In connection with any vote held to approve the Company’s initial business combination, the initial stockholders, insiders, officers and directors, have agreed to vote their respective shares of common stock owned by them immediately prior to this offering, including both the insider shares and any shares acquired in this offering or following this offering in the open market, in favor of the proposed business combination. Pursuant to the amended and restated certificate of incorporation, if the Company does not consummate its initial business combination within 21 months from the closing of this offering (as currently extended and as may be further extended in accordance with the Amended and Restated Certificate of Incorporation), it 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 100% of the outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the remaining stockholders and the board of directors, dissolve and liquidate, subject (in the case of (ii) and (iii) above) to the Company’s obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. The Company’s insiders have agreed to waive their rights to share in any distribution with respect to their insider shares. The stockholders have no conversion, preemptive or other subscription rights and there are no sinking fund or redemption provisions applicable to the shares of common stock, except that public stockholders have the right to sell their shares to the Company in any tender offer or have their shares of common stock converted to cash equal to their pro rata share of the Trust Account if they vote on the proposed business combination and the business combination is completed. If the Company holds a stockholder vote to amend any provisions of the certificate of incorporation relating to stockholders’ rights or pre-business combination activity (including the substance or timing within which it has to complete a business combination), it will provide its public stockholders with the opportunity to redeem their shares of common stock upon approval of any such amendment 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 its franchise and income taxes, divided by the number of then outstanding public shares, in connection with any such vote. In either of such events, converting stockholders would be paid their pro rata portion of the Trust Account promptly following consummation of the business combination or the approval of the amendment to the certificate of incorporation. If the business combination is not consummated or the amendment is not approved, stockholders will not be paid such amounts. | NOTE 7. STOCKHOLDERS’ DEFICIT Common Shares The Company is authorized to issue 50,000,000 of common shares with a par value of $0.0001 per share. On June 7, 2021, the Sponsor, along with certain of the Company’s directors, officers and advisors purchased 4,312,500 shares for an aggregate purchase price of $25,000. In October 2021, the Sponsor, officers and certain advisors forfeited an aggregate of 1,437,500 shares of common stock, resulting in 2,875,000 founder shares outstanding. At the closing of the Initial Public Offering, 557,000 shares were issued as part of the Private Placement sale. On October 6, 2022 in connection with the Bridge Purchase Agreement 30,000 shares were issued to the Bridge Financing investor. As of December 31, 2022 and 2021, there were 3,462,000 and 3,432,000, respectively, common shares issued and outstanding, excluding 694,123 and 11,500,000, respectively, shares subject to redemption which were classified outside of permanent equity on the consolidated balance sheets. The holders of record of the Company’s common stock are entitled to one vote for each share held on all matters to be voted on by stockholders. In connection with any vote held to approve the Company’s initial business combination, the initial stockholders, insiders, officers and directors, have agreed to vote their respective shares of common stock owned by them immediately prior to this offering, including both the insider shares and any shares acquired in this offering or following this offering in the open market, in favor of the proposed business combination. The Company will consummate its initial business combination only if it has net tangible assets of at least $5,000,001 and a majority of the outstanding shares of common stock voted are voted in favor of the business combination. Pursuant to the amended and restated certificate of incorporation, if the Company does not consummate its initial business combination within 18 months from the closing of this offering (as currently extended and as may be further extended in accordance with the Amended and Restated Certificate of Incorporation), it will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten The stockholders have no conversion, preemptive or other subscription rights and there are no sinking fund or redemption provisions applicable to the shares of common stock, except that public stockholders have the right to sell their shares to the Company in any tender offer or have their shares of common stock converted to cash equal to their pro rata share of the Trust Account if they vote on the proposed business combination and the business combination is completed. If the Company holds a stockholder vote to amend any provisions of the certificate of incorporation relating to stockholders’ rights or pre-business combination activity (including the substance or timing within which it has to complete a business combination), it will provide its public stockholders with the opportunity to redeem their shares of common stock upon approval of any such amendment 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 its franchise and income taxes, divided by the number of then outstanding public shares, in connection with any such vote. In either of such events, converting stockholders would be paid their pro rata portion of the Trust Account promptly following consummation of the business combination or the approval of the amendment to the certificate of incorporation. If the business combination is not consummated or the amendment is not approved, stockholders will not be paid such amounts. |
WARRANTS_2
WARRANTS | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
WARRANTS | ||
WARRANTS | NOTE 8. WARRANTS Initial Public Offering Warrants There are 12,057,000 warrants issued and outstanding as of September 30, 2023 and December 31, 2022 issued in connection with the Initial Public Offering. Each warrant entitles the registered holder to purchase one (1) share of common stock at a price of $11.50 per whole share, subject to adjustment as discussed below, at any time commencing on the later of 30 days after the completion of an initial business combination or 12 months from the closing of the Initial Public Offering. However, no warrants will be exercisable for cash unless the Company has an effective and current registration statement covering the shares of common stock issuable upon exercise of the warrants and a current prospectus relating to such shares of common stock. Notwithstanding the foregoing, if a registration statement covering the shares of common stock issuable upon exercise of the public warrants is not effective within a specified period following the consummation of the initial business combination, warrant holders may, until such time as there is an effective registration statement and during any period when the Company shall have failed to maintain an effective registration statement, exercise warrants on a cashless basis pursuant to the exemption provided by Section 3(a)(9) of the Securities Act, provided that such exemption is available. If that exemption, or another exemption, is not available, holders will not be able to exercise their warrants on a cashless basis. In the event of such cashless exercise, each holder would pay the exercise price by surrendering the warrants for that number of shares of common stock equal to the quotient obtained by dividing (x) the product of the number of shares of common stock underlying the warrants, multiplied by the difference between the exercise price of the warrants and the “fair market value” (defined below) by (y) the fair market value. The “fair market value” for this purpose will mean the average reported last sale price of the shares of common stock for the 5 trading days ending on the trading day prior to the date of exercise. The warrants will expire on the fifth anniversary of the completion of an initial business combination, at 5:00 p.m., New York City time, or earlier upon redemption or liquidation. The Private Placement Warrants is identical to the warrants underlying the units in the Initial Public Offering. The Company may call the warrants for redemption, in whole and not in part, at a price of $0.01 per warrant, ● at any time after the warrants become exercisable; ● upon not less than 30 days ’ prior written notice of redemption to each warrant holder; ● if, and only if, the reported last sale price of the shares of common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations and recapitalizations), for any 20 trading days within a 30 trading day period commencing at any time after the warrants become exercisable and ending on the third business day prior to the notice of redemption to warrant holders; and ● if, and only if, there is a current registration statement in effect with respect to the shares of common stock underlying such warrants. The right to exercise will be forfeited unless the warrants are exercised prior to the date specified in the notice of redemption. On and after the redemption date, a record holder of a warrant will have no further rights except to receive the redemption price for such holder’s warrant upon surrender of such warrant. The redemption criteria for the warrants have been established at a price which is intended to provide warrant holders a reasonable premium to the initial exercise price and provide a sufficient differential between the then-prevailing share price and the warrant exercise price so that if the share price declines as a result of the redemption call, the redemption will not cause the share price to drop below the exercise price of the warrants. If the Company calls the warrants for redemption as described above, the Company’s management will have the option to require all holders that wish to exercise warrants to do so on a “cashless basis.” In such event, each holder would pay the exercise price by surrendering the warrants for that number of shares of common stock equal to the quotient obtained by dividing (x) the product of the number of shares of common stock underlying the warrants, multiplied by the difference between the exercise price of the warrants and the “fair market value” (defined below) by (y) the fair market value. The “fair market value” for this purpose shall mean the average reported last sale price of the shares of common stock for the 5 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. The warrants were issued in registered form under a warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and the Company. The warrant agreement provides that the terms of the warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective provision or to make any other change that does not adversely affect the interests of the registered holders. For any other change, the warrant agreement requires the approval by the holders of at least a majority of the then outstanding public warrants if such amendment is undertaken prior to or in connection with the consummation of a business combination or at least a majority of the then outstanding warrants if the amendment is undertaken after the consummation of a business combination. The exercise price and number of shares of common stock issuable on exercise of the warrants may be adjusted in certain circumstances including in the event of a stock dividend, extraordinary dividend or recapitalization, reorganization, merger or consolidation. However, except as described below, the warrants will not be adjusted for issuances of shares of common stock at a price below their respective exercise prices. If (x) the Company issues additional shares of common stock or equity-linked securities for capital raising purposes in connection with the closing of the initial business combination at an issue price or effective issue price of less than $9.20 per share of common stock (with such issue price or effective issue price to be determined in good faith by the board of directors, and in the case of any such issuance to the Company’s Sponsor, initial stockholders or their affiliates, without taking into account any founders’ shares held by them prior to such issuance), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of the initial business combination on the date of the consummation of the initial business combination (net of redemptions), and (z) the Market Value is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the greater of (i) the Market Value or (ii) the price at which the Company issue the additional shares of common stock or equity-linked securities and the $18.00 per share redemption trigger price described above will be adjusted (to the nearest cent) to be equal to 180% of the Market Value. The warrants may be exercised upon surrender of the warrant certificate on or prior to the expiration date at the offices of the warrant agent, with the exercise form on the reverse side of the warrant certificate completed and executed as indicated, accompanied by full payment of the exercise price, by certified or official bank check payable to the Company, for the number of warrants being exercised. The warrant holders do not have the rights or privileges of holders of shares of common stock and any voting rights until they exercise their warrants and receive shares of common stock. After the issuance of shares of common stock upon exercise of the warrants, each holder will be entitled to one vote for each share held of record on all matters to be voted on by stockholders. Warrant holders may elect to be subject to a restriction on the exercise of their warrants such that an electing warrant holder would not be able to exercise their warrants to the extent that, after giving effect to such exercise, such holder would beneficially own in excess of 9.8% of the shares of common stock outstanding. No fractional shares will be issued upon exercise of the warrants. If, upon exercise of the warrants, a holder would be entitled to receive a fractional interest in a share, the Company will, upon exercise, round up to the nearest whole number the number of shares of common stock to be issued to the warrant holder. Bridge Warrants On October 6, 2022, 173,913 warrants were issued pursuant to the Bridge Purchase Agreement. The purchase right represented by the Bridge Warrants shall terminate on or before 5:30 p.m., Pacific Time, on the date five years from the date of issuance (the “Expiration Date”). The exercise price at which the Bridge Warrants may be exercised shall be $11.50 per share of Common Stock. If at any time after the date of issuance of the Bridge Warrants there is no effective registration statement available for the resale of shares of Common Stock held by the holder, the Bridge Warrants may be exercised by cashless exercise. In lieu of any fractional share to which the holder would otherwise be entitled, the Company shall make a cash payment equal to the Exercise Price multiplied by such fraction. Except as provided in the Bridge Warrant, the Bridge Warrant does not entitle its holder to any rights of a stockholder of the Company. During the term the Bridge Warrants are exercisable, the Company will reserve from its authorized and unissued Common Stock a sufficient number of shares to provide for the issuance of Common Stock upon the exercise of the Bridge Warrant and, from time to time, will take all steps necessary to amend its Certificate of Incorporation to provide sufficient reserves of shares of Common Stock issuable upon exercise of the Bridge Warrants. All shares that may be issued upon the exercise of rights represented by the Bridge Warrants and payment of the Exercise Price will be free from all taxes, liens and charges in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously or otherwise specified in the Bridge Warrants). Prior to the Expiration Date, the Exercise Price and the number of shares of Common Stock purchasable upon the exercise of the Bridge Warrants are subject to adjustment from time to time upon the occurrence of any of the following events: (a) In the event that the Company shall at any time after the date of issuance of the Bridge Warrants (i) declare a dividend on Common Stock in shares or other securities of the Company, (ii) split or subdivide the outstanding Common Stock, (iii) combine the outstanding Common Stock into a smaller number of shares, or (iv) issue by reclassification of its Common Stock any shares or other securities of the Company, then, in each such event, the Exercise Price in effect at the time shall be adjusted so that the holder shall be entitled to receive the kind and number of such shares or other securities of the Company which the holder would have owned or have been entitled to receive after the happening of any of the events described above had such Bridge Warrant been exercised immediately prior to the happening of such event (or any record date with respect thereto). (b) No adjustment in the number of shares of Common Stock receivable upon exercise of the Bridge Warrant shall be required unless such adjustment would require an increase or decrease of at least 0.1% in the aggregate number of shares of Common Stock purchasable upon exercise of all Bridge Warrants; provided that any adjustments which are not required to be made shall be carried forward and taken into account in any subsequent adjustment. (c) If at any time, as a result of an adjustment, the holder of any Bridge Warrant thereafter exercised shall become entitled to receive any shares of the Company other than shares of Common Stock, thereafter the number of such other shares so receivable upon exercise of any Bridge Warrant shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the Common Stock receivable upon execution of the Bridge Warrant. (d) Whenever the Exercise Price payable upon exercise of each Bridge Warrant is adjusted, the Warrant Shares shall be adjusted by multiplying the number of shares of Common Stock receivable upon execution of the Bridge Warrant immediately prior to such adjustment by a fraction, the numerator of which shall be the Exercise Price in effect immediately prior to such adjustment, and the denominator of which shall be the Exercise Price as adjusted. (e) In the event of any capital reorganization of the Company, or of any reclassification of the Common Stock, or in case of the consolidation of the Company with or the merger of the Company with or into any other corporation or of the sale of the properties and assets of the Company as, or substantially as, an entirety to any other corporation, each Bridge Warrant shall, after such capital reorganization, reclassification of Common Stock, consolidation, merger or sale, and in lieu of being exercisable for shares of Common Stock of the Company, be exercisable, upon the terms and conditions specified in the Bridge Warrant, for the number of shares of stock or other securities or assets to which holder of the number of shares of Common Stock purchasable upon exercisable of such Bridge Warrant immediately prior to such capital organization, reclassification of Common Stock, consolidation, merger or sale would have been entitled upon such capital organization, reclassification of Common Stock, consolidation, merger or sale. The Company shall not effect any such consolidation, merger or sale, unless prior to or simultaneously with the consummation thereof, the successor corporation (if other than the Company) resulting from such consolidation or merger or the corporation purchasing such assets or the appropriate corporation or entity shall assume, by written instrument, the obligation to deliver to holder of each Bridge Warrant the shares of stock, securities or assets to which, in accordance with the foregoing provisions, such holder may be entitled and all other obligations of the Company under the Bridge Warrant. (f) If the Company in any manner issues or sells or enters into any agreement to issue or sell, any Common Stock, options or convertible securities (any such securities, “Variable Price Securities”) after the issuance of the Bridge Warrants that are issuable pursuant to such agreement or convertible into or exchangeable or exercisable for shares of Common Stock at a price which varies or may vary with the market price of the shares of Common Stock, including by way of one or more reset(s) to a fixed price, but exclusive of such formulations reflecting customary anti-dilution provisions (such as share splits, share combinations, share dividends and similar transactions) (each of the formulations for such variable price being herein referred to as, the “Variable Price”), the Company shall provide notice thereof to the holder on the date of such agreement and the issuance of such convertible securities or options. From and after the date the Company enters into such agreement or issues any such Variable Price Securities, the holder shall have the right, but not the obligation, in its sole discretion to substitute the Variable Price for the Exercise Price upon exercise of the Bridge Warrant by designating in the exercise form delivered upon any exercise of the Bridge Warrant that solely for purposes of such exercise the holder is relying on the Variable Price rather than the Exercise Price then in effect. (g) In case any event shall occur as to which the other provisions above are not strictly applicable or the failure to make any adjustment would result in an unfair enlargement or dilution of the purchase rights represented by the Bridge Warrants in accordance with the essential intent and principles hereof, then, in each such case, the independent auditors of the Company shall give an opinion as to the adjustment, if any, on a basis consistent with the essential intent and principles above, necessary to preserve, without enlargement or dilution, the purchase rights presented by the Bridge Warrants. Upon receipt of such opinion, the Company shall promptly make the adjustment described therein. The Bridge Warrants are governed by, and construed in accordance with, the laws of the State of Delaware, without regard to principles of conflicts of law. The Company and the holders of the Bridge Warrants consent to the exclusive jurisdiction of the federal courts of the United States sitting in Delaware. Investor Note Warrants On May 5, 2023, the Company issued 26,086 warrants pursuant to the Investor Note SPA. The purchase right represented by the Investor Note Warrants shall terminate on the date five years from the date of issuance (the “Expiration Date”). The exercise price at which the Investor Note Warrants may be exercised shall be $11.50 per share of Common Stock. If at any time after the date of issuance of the Investor Note Warrants there is no effective registration statement available for the resale of shares of Common Stock held by the holder, the Investor Note Warrants may be exercised by cashless exercise. In lieu of any fractional share to which the holder would otherwise be entitled, the Company shall make a cash payment equal to the exercise price multiplied by such fraction. Except as provided in the Investor Note Warrant, the Investor Note Warrant does not entitle its holder to any rights of a stockholder of the Company. During the term the May 2023 Warrants are exercisable, the Company will reserve from its authorized and unissued Common Stock a sufficient number of shares to provide for the issuance of Common Stock upon the exercise of the May 2023 Warrant and, from time to time, will take all steps necessary to amend its Certificate of Incorporation to provide sufficient reserves of shares of Common Stock issuable upon exercise of the Investor Note Warrants. All shares that may be issued upon the exercise of rights represented by the Investor Note Warrants and payment of the exercise price will be free from all taxes, liens and charges in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously or otherwise specified in the Investor Note Warrants). Prior to the Expiration Date, the exercise price and the number of shares of Common Stock purchasable upon the exercise of the Investor Note Warrants are subject to adjustment from time to time upon the occurrence of any of the following events: (a) In the event that the Company shall at any time after the date of issuance of the Investor Note Warrants (i) declare a dividend on Common Stock in shares or other securities of the Company, (ii) split or subdivide the outstanding Common Stock, (iii) combine the outstanding Common Stock into a smaller number of shares, or (iv) issue by reclassification of its Common Stock any shares or other securities of the Company, then, in each such event, the exercise price in effect at the time shall be adjusted so that the holder shall be entitled to receive the kind and number of such shares or other securities of the Company which the holder would have owned or have been entitled to receive after the happening of any of the events described above had such Investor Note Warrant been exercised immediately prior to the happening of such event (or any record date with respect thereto). (b) No adjustment in the number of shares of Common Stock receivable upon exercise of the Investor Note Warrants shall be required unless such adjustment would require an increase or decrease of at least 0.1% in the aggregate number of shares of Common Stock purchasable upon exercise of all Investor Note Warrants; provided that any adjustments which are not required to be made shall be carried forward and taken into account in any subsequent adjustment. (c) If at any time, as a result of an adjustment, the holder of any Investor Note Warrant thereafter exercised shall become entitled to receive any shares of the Company other than shares of Common Stock, thereafter the number of such other shares so receivable upon exercise of any Investor Note Warrant shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the Common Stock receivable upon execution of the Investor Note Warrant. (d) Whenever the exercise price payable upon exercise of each Investor Note Warrant is adjusted, the Investor Note Warrant shares shall be adjusted by multiplying the number of shares of Common Stock receivable upon execution of the Investor Note Warrant immediately prior to such adjustment by a fraction, the numerator of which shall be the exercise price in effect immediately prior to such adjustment, and the denominator of which shall be the exercise price as adjusted. (e) In the event of any capital reorganization of the Company, or of any reclassification of the Common Stock, or in case of the consolidation of the Company with or the merger of the Company with or into any other corporation or of the sale of the properties and assets of the Company as, or substantially as, an entirety to any other corporation, each Investor Note Warrant shall, after such capital reorganization, reclassification of Common Stock, consolidation, merger or sale, and in lieu of being exercisable for shares of Common Stock of the Company, be exercisable, upon the terms and conditions specified in the Investor Note Warrant, for the number of shares of stock or other securities or assets to which holder of the number of shares of Common Stock purchasable upon exercisable of such Investor Note Warrant immediately prior to such capital organization, reclassification of Common Stock, consolidation, merger or sale would have been entitled upon such capital organization, reclassification of Common Stock, consolidation, merger or sale. The Company shall not effect any such consolidation, merger or sale, unless prior to or simultaneously with the consummation thereof, the successor corporation (if other than the Company) resulting from such consolidation or merger or the corporation purchasing such assets or the appropriate corporation or entity shall assume, by written instrument, the obligation to deliver to holder of each Investor Note Warrant the shares of stock, securities or assets to which, in accordance with the foregoing provisions, such holder may be entitled and all other obligations of the Company under the Investor Note Warrant. (f) If the Company in any manner issues or sells or enters into any agreement to issue or sell, any Common Stock, options or convertible securities (any such securities, “Variable Price Securities”) after the issuance of the Investor Note Warrants that are issuable pursuant to such agreement or convertible into or exchangeable or exercisable for shares of Common Stock at a price which varies or may vary with the market price of the shares of Common Stock, including by way of one or more reset(s) to a fixed price, but exclusive of such formulations reflecting customary anti-dilution provisions (such as share splits, share combinations, share dividends and similar transactions) (each of the formulations for such variable price being herein referred to as, the “Variable Price”), the Company shall provide notice thereof to the holder on the date of such agreement and the issuance of such convertible securities or options. From and after the date the Company enters into such agreement or issues any such Variable Price Securities, the holder shall have the right, but not the obligation, in its sole discretion to substitute the Variable Price for the exercise price upon exercise of the Investor Note Warrant by designating in the exercise form delivered upon any exercise of the Investor Note Warrant that solely for purposes of such exercise the holder is relying on the Variable Price rather than the exercise price then in effect. (g) In case any event shall occur as to which the other provisions above are not strictly applicable or the failure to make any adjustment would result in an unfair enlargement or dilution of the purchase rights represented by the Investor Note Warrants in accordance with the essential intent and principles hereof, then, in each such case, the independent auditors of the Company shall give an opinion as to the adjustment, if any, on a basis consistent with the essential intent and principles above, necessary to preserve, without enlargement or dilution, the purchase rights presented by the Investor Note Warrants. Upon receipt of such opinion, the Company shall promptly make the adjustment described therein. The Investor Note Warrants are governed by, and construed in accordance with, the laws of the State of Delaware, without regard to principles of conflicts of law. The Company and the holders of the Investor Note Warrants consent to the exclusive jurisdiction of the federal courts of the United States sitting in Delaware. | NOTE 8. WARRANTS Initial Public Offering Warrants There are 12,057,000 warrants issued and outstanding as of December 31, 2022 and 2021 issued in connection with the Initial Public Offering. Each warrant entitles the registered holder to purchase one (1) share of common stock at a price of $11.50 per whole share, subject to adjustment as discussed below, at any time commencing on the later of 30 days after the completion of an initial business combination or 12 months from the closing of the Initial Public Offering. However, no warrants will be exercisable for cash unless the Company has an effective and current registration statement covering the shares of common stock issuable upon exercise of the warrants and a current prospectus relating to such shares of common stock. Notwithstanding the foregoing, if a registration statement covering the shares of common stock issuable upon exercise of the public warrants is not effective within a specified period following the consummation of the initial business combination, warrant holders may, until such time as there is an effective registration statement and during any period when the Company shall have failed to maintain an effective registration statement, exercise warrants on a cashless basis pursuant to the exemption provided by Section 3(a)(9) of the Securities Act, provided that such exemption is available. If that exemption, or another exemption, is not available, holders will not be able to exercise their warrants on a cashless basis. In the event of such cashless exercise, each holder would pay the exercise price by surrendering the warrants for that number of shares of common stock equal to the quotient obtained by dividing (x) the product of the number of shares of common stock underlying the warrants, multiplied by the difference between the exercise price of the warrants and the “fair market value” (defined below) by (y) the fair market value. The “fair market value” for this purpose will mean the average reported last sale price of the shares of common stock for the 5 trading days ending on the trading day prior to the date of exercise. The warrants will expire on the fifth The Private Placement Warrants is identical to the warrants underlying the units in the Initial Public Offering. The Company may call the warrants for redemption, in whole and not in part, at a price of $0.01 per warrant, ● at any time after the warrants become exercisable; ● upon not less than 30 days ’ prior written notice of redemption to each warrant holder; ● if, and only if, the reported last sale price of the shares of common stock equals or exceeds $ 18.00 per share (as adjusted for stock splits, stock dividends, reorganizations and recapitalizations), for any 20 trading days within a 30 trading day period commencing at any time after the warrants become exercisable and ending on the third business day prior to the notice of redemption to warrant holders; and ● if, and only if, there is a current registration statement in effect with respect to the shares of common stock underlying such warrants. The right to exercise will be forfeited unless the warrants are exercised prior to the date specified in the notice of redemption. On and after the redemption date, a record holder of a warrant will have no further rights except to receive the redemption price for such holder’s warrant upon surrender of such warrant. The redemption criteria for the warrants have been established at a price which is intended to provide warrant holders a reasonable premium to the initial exercise price and provide a sufficient differential between the then-prevailing share price and the warrant exercise price so that if the share price declines as a result of the redemption call, the redemption will not cause the share price to drop below the exercise price of the warrants. If the Company call the warrants for redemption as described above, the Company’s management will have the option to require all holders that wish to exercise warrants to do so on a “cashless basis.” In such event, each holder would pay the exercise price by surrendering the warrants for that number of shares of common stock equal to the quotient obtained by dividing (x) the product of the number of shares of common stock underlying the warrants, multiplied by the difference between the exercise price of the warrants and the “fair market value” (defined below) by (y) the fair market value. The “fair market value” for this purpose shall mean the average reported last sale price of the shares of common stock for the 5 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. The warrants were issued in registered form under a warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and the Company. The warrant agreement provides that the terms of the warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective provision or to make any other change that does not adversely affect the interests of the registered holders. For any other change, the warrant agreement requires the approval by the holders of at least a majority of the then outstanding public warrants if such amendment is undertaken prior to or in connection with the consummation of a business combination or at least a majority of the then outstanding warrants if the amendment is undertaken after the consummation of a business combination. The exercise price and number of shares of common stock issuable on exercise of the warrants may be adjusted in certain circumstances including in the event of a stock dividend, extraordinary dividend or recapitalization, reorganization, merger or consolidation. However, except as described below, the warrants will not be adjusted for issuances of shares of common stock at a price below their respective exercise prices. If (x) the Company issues additional shares of common stock or equity-linked securities for capital raising purposes in connection with the closing of the initial business combination at an issue price or effective issue price of less than $9.20 per share of common stock (with such issue price or effective issue price to be determined in good faith by the board of directors, and in the case of any such issuance to the Company’s Sponsor, initial stockholders or their affiliates, without taking into account any founders’ shares held by them prior to such issuance), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of the initial business combination on the date of the consummation of the initial business combination (net of redemptions), and (z) the Market Value is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the greater of (i) the Market Value or (ii) the price at which the Company issue the additional shares of common stock or equity-linked securities and the $18.00 per share redemption trigger price described above will be adjusted (to the nearest cent) to be equal to 180% of the Market Value. The warrants may be exercised upon surrender of the warrant certificate on or prior to the expiration date at the offices of the warrant agent, with the exercise form on the reverse side of the warrant certificate completed and executed as indicated, accompanied by full payment of the exercise price, by certified or official bank check payable to the Company, for the number of warrants being exercised. The warrant holders do not have the rights or privileges of holders of shares of common stock and any voting rights until they exercise their warrants and receive shares of common stock. After the issuance of shares of common stock upon exercise of the warrants, each holder will be entitled to one vote for each share held of record on all matters to be voted on by stockholders. Warrant holders may elect to be subject to a restriction on the exercise of their warrants such that an electing warrant holder would not be able to exercise their warrants to the extent that, after giving effect to such exercise, such holder would beneficially own in excess of 9.8% of the shares of common stock outstanding. No fractional shares will be issued upon exercise of the warrants. If, upon exercise of the warrants, a holder would be entitled to receive a fractional interest in a share, the Company will, upon exercise, round up to the nearest whole number the number of shares of common stock to be issued to the warrant holder. Bridge Warrants On October 6, 2022, 173,913 warrants were issued pursuant to the Bridge Purchase Agreement. The purchase right represented by the Bridge Warrants shall terminate on or before 5:30 p.m., Pacific Time, on the date five years from the date of issuance (the “Expiration Date”). The exercise price at which the Bridge Warrants may be exercised shall be $11.50 per share of Common Stock. If at any time after the date of issuance of the Bridge Warrants there is no effective registration statement available for the resale of shares of Common Stock held by the holder, the Bridge Warrants may be exercised by cashless exercise. In lieu of any fractional share to which the holder would otherwise be entitled, the Company shall make a cash payment equal to the Exercise Price multiplied by such fraction. Except as provided in the Bridge Warrant, the Bridge Warrant does not entitle its holder to any rights of a stockholder of the Company. During the term the Bridge Warrants are exercisable, the Company will reserve from its authorized and unissued Common Stock a sufficient number of shares to provide for the issuance of Common Stock upon the exercise of the Bridge Warrant and, from time to time, will take all steps necessary to amend its Certificate of Incorporation to provide sufficient reserves of shares of Common Stock issuable upon exercise of the Bridge Warrants. All shares that may be issued upon the exercise of rights represented by the Bridge Warrants and payment of the Exercise Price will be free from all taxes, liens and charges in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously or otherwise specified in the Bridge Warrants). Prior to the Expiration Date, the Exercise Price and the number of shares of Common Stock purchasable upon the exercise of the Bridge Warrants are subject to adjustment from time to time upon the occurrence of any of the following events: (a) In the event that the Company shall at any time after the date of issuance of the Bridge Warrants (i) declare a dividend on Common Stock in shares or other securities of the Company, (ii) split or subdivide the outstanding Common Stock, (iii) combine the outstanding Common Stock into a smaller number of shares, or (iv) issue by reclassification of its Common Stock any shares or other securities of the Company, then, in each such event, the Exercise Price in effect at the time shall be adjusted so that the holder shall be entitled to receive the kind and number of such shares or other securities of the Company which the holder would have owned or have been entitled to receive after the happening of any of the events described above had such Bridge Warrant been exercised immediately prior to the happening of such event (or any record date with respect thereto). (b) No adjustment in the number of shares of Common Stock receivable upon exercise of the Bridge Warrant shall be required unless such adjustment would require an increase or decrease of at least 0.1% in the aggregate number of shares of Common Stock purchasable upon exercise of all Bridge Warrants; provided that any adjustments which are not required to be made shall be carried forward and taken into account in any subsequent adjustment. (c) If at any time, as a result of an adjustment, the holder of any Bridge Warrant thereafter exercised shall become entitled to receive any shares of the Company other than shares of Common Stock, thereafter the number of such other shares so receivable upon exercise of any Bridge Warrant shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the Common Stock receivable upon execution of the Bridge Warrant. (d) Whenever the Exercise Price payable upon exercise of each Bridge Warrant is adjusted, the Warrant Shares shall be adjusted by multiplying the number of shares of Common Stock receivable upon execution of the Bridge Warrant immediately prior to such adjustment by a fraction, the numerator of which shall be the Exercise Price in effect immediately prior to such adjustment, and the denominator of which shall be the Exercise Price as adjusted. (e) In the event of any capital reorganization of the Company, or of any reclassification of the Common Stock, or in case of the consolidation of the Company with or the merger of the Company with or into any other corporation or of the sale of the properties and assets of the Company as, or substantially as, an entirety to any other corporation, each Bridge Warrant shall, after such capital reorganization, reclassification of Common Stock, consolidation, merger or sale, and in lieu of being exercisable for shares of Common Stock of the Company, be exercisable, upon the terms and conditions specified in the Bridge Warrant, for the number of shares of stock or other securities or assets to which holder of the number of shares of Common Stock purchasable upon exercisable of such Bridge Warrant immediately prior to such capital organization, reclassification of Common Stock, consolidation, merger or sale would have been entitled upon such capital organization, reclassification of Common Stock, consolidation, merger or sale. The Company shall not effect any such consolidation, merger or sale, unless prior to or simultaneously with the consummation thereof, the successor corporation (if other than the Company) resulting from such consolidation or merger or the corporation purchasing such assets or the appropriate corporation or entity shall assume, by written instrument, the obligation to deliver to holder of each Bridge Warrant the shares of stock, securities or assets to which, in accordance with the foregoing provisions, such holder may be entitled and all other obligations of the Company under the Bridge Warrant. (f) If the Company in any manner issues or sells or enters into any agreement to issue or sell, any Common Stock, options or convertible securities (any such securities, “Variable Price Securities”) after the issuance of the Bridge Warrants that are issuable pursuant to such agreement or convertible into or exchangeable or exercisable for shares of Common Stock at a price which varies or may vary with the market price of the shares of Common Stock, including by way of one or more reset(s) to a fixed price, but exclusive of such formulations reflecting customary anti-dilution provisions (such as share splits, share combinations, share dividends and similar transactions) (each of the formulations for such variable price being herein referred to as, the “Variable Price”), the Company shall provide notice thereof to the holder on the date of such agreement and the issuance of such convertible securities or options. From and after the date the Company enters into such agreement or issues any such Variable Price Securities, the holder shall have the right, but not the obligation, in its sole discretion to substitute the Variable Price for the Exercise Price upon exercise of the Bridge Warrant by designating in the exercise form delivered upon any exercise of the Bridge Warrant that solely for purposes of such exercise the holder is relying on the Variable Price rather than the Exercise Price then in effect. (g) In case any event shall occur as to which the other provisions above are not strictly applicable or the failure to make any adjustment would result in an unfair enlargement or dilution of the purchase rights represented by the Bridge Warrants in accordance with the essential intent and principles hereof, then, in each such case, the independent auditors of the Company shall give an opinion as to the adjustment, if any, on a basis consistent with the essential intent and principles above, necessary to preserve, without enlargement or dilution, the purchase rights presented by the Bridge Warrants. Upon receipt of such opinion, the Company shall promptly make the adjustment described therein. The Bridge Warrants are governed by, and construed in accordance with, the laws of the State of Delaware, without regard to principles of conflicts of law. The Company and the holders of the Bridge Warrants consent to the exclusive jurisdiction of the federal courts of the United States sitting in Delaware. |
FAIR VALUE MEASUREMENTS_2
FAIR VALUE MEASUREMENTS | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
FAIR VALUE MEASUREMENTS | ||
FAIR VALUE MEASUREMENTS | NOTE 9. FAIR VALUE MEASUREMENTS The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities: The Company classifies its U.S. Treasury and equivalent securities 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 U.S. Treasury securities are recorded at amortized cost on the accompanying balance sheets and adjusted for the amortization or accretion of premiums or discounts. On September 30, 2023, assets held in the Trust Account were comprised of $8,119,642 in money market funds. During the three and nine months ended September 30, 2023, the Company did withdrew an amount of $59,586 from the Trust Account to pay tax obligations. On December 31, 2022, assets held in the Trust Account were comprised of $7,527,369 in money market funds. During the year ended December 31, 2022, the Company withdrew $110,472,254 as a result of an aggregate of 10,805,877 shares of common stock redeemed on October 20, 2022 and the Company did not withdraw any interest income from the Trust Account. The following table presents information about the Company’s assets that are measured at fair value on a recurring basis on September 30, 2023 and December 31, 2022 and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value. The fair value of securities held in the Trust on September 30, 2023 and December 31, 2022 are as follows: Fair Trading Securities Level Value September 30, 2023 Money Market Funds 1 $ 8,119,642 Fair Trading Securities Level Value December 31, 2022 Money Market Funds 1 $ 7,527,369 The following table presents fair value information as of September 30, 2023 and December 31, 2022 of the Company’s financial liabilities that were 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. September 30, 2023 Fair Value (Level 1) (Level 2) (Level 3) Liabilities: Investor Note – Bifurcated Derivative $ 22,805 $ — $ — $ 22,805 Bridge Note – Bifurcated Derivative $ 241,447 $ — $ — $ 241,447 December 31, 2022 Fair Value (Level 1) (Level 2) (Level 3) Liabilities: PIPE Forward Contract $ 170,666 $ — $ — $ 170,666 Bridge Note – Bifurcated Derivative $ 364,711 $ — $ — $ 364,711 Bridge Note Investor Note Forward – Bifurcated – Bifurcated Contract Derivative Derivative Fair value as of December 31, 2022 $ 170,666 $ 364,711 $ — Change in valuation inputs or other assumptions 1,163,950 (34,758) — Fair value as of March 31, 2023 (unaudited) $ 1,334,616 $ 329,953 $ — Initial value of Investor Note – Bifurcated Derivative May 5, 2023 — — 24,502 Change in valuation inputs or other assumptions (634,110) (117,344) 3,099 Fair value as of June 30, 2023 (unaudited) $ 700,506 $ 212,609 $ 27,601 Change in valuation inputs or other assumptions (700,506) 28,838 (4,796) Fair value as of September 30, 2023 (unaudited) $ — $ 241,447 $ 22,805 Measurement Bridge Note Bifurcated Derivative The Company established the initial fair value for the Bridge Note Bifurcated Derivative as of October 5, 2022, which was the date the Bridge Note was executed. On December 31, 2022 the fair value was remeasured. As such, the Company used a Probability Weighted Expected Return Method (“PWERM”) that fair values the early termination/repayment features of the debt. The PWERM is a multi-step process in which value is estimated based on the probability-weighted present value of various future outcomes. The PWERM was used to value the Bridge Note Bifurcated Derivative for the initial periods and subsequent measurement periods. The Bridge Note Bifurcated Derivative was classified within Level 3 of the fair value hierarchy at the initial measurement dates and as of September 30, 2023 and December 31, 2022 due to the use of unobservable inputs. The key inputs into the Monte Carlo simulation model for the Bridge Note Bifurcated Derivative were as follows at September 30, 2023 and December 31, 2022: September 30, 2023 December 31, 2022 CCC bond rates 13.31 % 15.09 % Probability of early termination/repayment – business combination not completed 5 % 5 % Probability of early termination/repayment – business combination completed, or PIPE completed 80 % 95 % Probability of completing a business combination by March 31, 2023 — % 50 % Probability of completing a business combination by June 30, 2023 — % 50 % Probability of completing a business combination by December 31, 2023 80 % — % Investor Note Bifurcated Derivative The Company established the initial fair value for the Investor Note Bifurcated Derivative as of May 5, 2023, which was the date the Investor Note was executed. On September 30, 2023 the fair value was remeasured. As such, the Company used a Discounted Cash Flow model (“DCF”) that fair values the early termination/repayment features of the debt. The DCF was used to value the Investor Note Bifurcated Derivative for the initial periods and subsequent measurement periods. The Investor Note Bifurcated Derivative was classified within Level 3 of the fair value hierarchy at the initial measurement dates and as of May 5, 2023 and September 30, 2023 due to the use of unobservable inputs. The key inputs into the DCF model for the Investor Note Bifurcated Derivative were as follows at May 5, 2023, initial value and at September 30, 2023: September 30, 2023 May 5, 2023 Risk-free interest rate 5.53 % 5.12 % Expected term (years) 0.25 0.38 Probability of completing a business combination by August 30, 2023 — % 25 % Probability of completing a business combination by September 30, 2023 20 % 75 % Probability of completing a business combination by December 31, 2023 80 % — % PIPE Forward Contract The Company established the initial fair value for the PIPE Forward Contract as of October 6, 2022, which was the date of the PIPE Securities Purchase Agreement was executed. On December 31, 2022 the fair value was remeasured. As such, the Company utilizing a PWERM. The PWERM is a multistep process in which value is estimated based on the probability-weighted present value of various future outcomes to value the PIPE Forward Contract for the initial periods and subsequent measurement periods. The PIPE Forward Contract was classified within Level 3 of the fair value hierarchy at the initial measurement dates and as of December 31, 2022 due to the use of unobservable inputs. As a result of the termination of the PIPE Forward Contract on July 11, 2023, the PIPE Forward Contract was derecognized. The key inputs into the PWERM for the PIPE Forward Contract were as follows at December 31, 2022: December 31, 2022 Risk-free interest rate 4.76 % Expected term (years) 0.37 Probability of completing a business combination 95 % The change in the fair value of the Level 3 financial liabilities for the period from contract inception through December 31, 2022 is summarized as follows: PIPE Bridge Note Investor Note Forward Bifurcated Bifurcated Contract Derivative Derivative Fair value at December 31, 2022 $ 170,666 $ 364,711 $ — Initial value of Investor Note – Bifurcated Derivative May 5, 2023 — — 24,502 Change in fair value (170,666) (123,265) (1,697) Fair value at September 30, 2023 $ — $ 241,447 $ 22,805 Transfers to/from Levels 1, 2 and 3 are recognized at the end of the reporting period in which a change in valuation technique or methodology occurs. There were no tran sfers to or from the various Levels at September 30, 2023 and December 31, 2022, respectively. | NOTE 10. FAIR VALUE MEASUREMENTS The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities: The Company classifies its U.S. Treasury and equivalent securities 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 U.S. Treasury securities are recorded at amortized cost on the accompanying balance sheets and adjusted for the amortization or accretion of premiums or discounts. On December 31, 2022, assets held in the Trust Account were comprised of $7,527,369 in money market funds. During the year ended December 31, 2022, the Company withdrew $110,472,254 as a result of an aggregate of 10,805,877 shares of common stock redeemed on October 20, 2022 and the Company did not withdraw any interest income from the Trust Account. On December 31, 2021, assets held in the Trust Account were comprised of $959 in cash and $116,726,019 in U.S. Treasury securities. During the period from March 30, 2021 (inception) through December 31, 2021, the Company did not withdraw any interest income from the Trust Account. The following table present information about the Company’s assets that are measured at fair value on a recurring basis on December 31, 2022 and 2021 and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value. The gross holding loss and fair value of held-to-maturity securities on December 31, 2022 and 2021 are as follows: Gross Amortized Holding Trading Securities Level Cost Loss Fair Value December 31, 2022 Money Market Funds 1 $ n/a $ n/a $ 7,527,369 Gross Amortized Holding Held-To-Maturity Level Cost Loss Fair Value December 31, 2021 U.S. Treasury Securities (Matured on 3/17/2022) 1 $ 116,726,019 $ (3,097) $ 116,722,922 The following table presents fair value information as of December 31, 2022 of the Company’s financial liabilities that were 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. The Company did not have any financial liabilities that were accounted for at fair values on a recurring basis as of December 31, 2021. Carrying Value (Level 1) (Level 2) (Level 3) Liabilities: PIPE Forward Contract $ 170,666 $ — $ — $ 170,666 Bridge Note – Bifurcated Derivative $ 364,711 $ — $ — $ 364,711 Measurement Bridge Note Bifurcated Derivative The Company established the initial fair value for the Bridge Note Bifurcated Derivative as of October 5, 2022, which was the date the Bridge Note was executed. On December 31, 2022 the fair value was remeasured. As such, the Company used a Probability Weighted Expected Return Method (“PWERM”) that fair values the early termination/repayment features of the debt. The PWERM is a multi-step process in which value is estimated based on the probability-weighted present value of various future outcomes. The PWERM was used to value the Bridge Note Bifurcated Derivative for the initial periods and subsequent measurement periods. The Bridge Note Bifurcated Derivative was classified within Level 3 of the fair value hierarchy at the initial measurement dates and as of December 31, 2022 due to the use of unobservable inputs. The key inputs into the Monte Carlo simulation model for the Bridge Note Bifurcated Derivative were as follows at October 5, 2022, initial value and at December 31, 2022: October 5, 2022 December 31, 2022 CCC bond rates 14.09 % 15.09 % Probability of early termination/repayment -business combination not completed 10 % 5 % Probability of early termination/repayment -business combination completed or PIPE completed 90 % 95 % Probability of completing a business combination by March 31, 2023 50 % 50 % Probability of completing a business combination by June 30, 2023 50 % 50 % PIPE Forward Contract The Company established the initial fair value for the PIPE Forward Contract as of October 6, 2022, which was the date of the PIPE Securities Purchas Agreement was executed. On December 31, 2022 the fair value was remeasured. As such, the Company utilizing a PWERM. The PWERM is a multistep process in which value is estimated based on the probability-weighted present value of various future outcomes to value the PIPE Forward Contract for the initial periods and subsequent measurement periods. The PIPE Forward Contract was classified within Level 3 of the fair value hierarchy at the initial measurement dates and as of December 31, 2022 due to the use of unobservable inputs. The key inputs into the PWERM for the PIPE Forward Contract were as follows at October 6, 2022, initial value and at December 31, 2022: October 6, 2022 December 31, 2022 Risk-fee interest rate 4.00 % 4.76 % Expected term (years) 0.61 0.37 Probability of completing a business combination 90 % 95 % The change in the fair value of the level 3 financial liabilities for the period from contract inception through December 31, 2022 is summarized as follows: PIPE Bridge Note Forward Contract Bifurcated Derivative Fair value at October 5, 2022 (Initial measurement) $ 278,404 Fair value at October 6, 2022 (Initial measurement) $ — — Change in fair value 170,666 86,307 Fair value at December 31, 2022 $ 170,666 $ 364,711 Transfers to/from Levels 1, 2 and 3 are recognized at the end of the reporting period in which a change in valuation technique or methodology occurs. There were no transfers to or from the various Levels during the year ended December 31, 2022 and 2021. |
SUBSEQUENT EVENTS_2
SUBSEQUENT EVENTS | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
SUBSEQUENT EVENTS | ||
SUBSEQUENT EVENTS | NOTE 10. SUBSEQUENT EVENTS The Company evaluated subsequent events and transactions that occurred after the condensed consolidated balance sheet date up to the date that the unaudited condensed consolidated financial statements were issued. Based upon this review, except as disclosed below, the Company did not identify any subsequent events that would have required adjustment or disclosure in the unaudited condensed consolidated financial statements. Pursuant to the Third Letter, on October 4, 2023, the Company requested a hearing (the “Hearing”) to appeal this determination and also applied to transfer the listing of its Securities from Nasdaq Global to the Nasdaq Capital Market (“NasdaqCM”). The Hearing is scheduled to be held on November 30, 2023 at 12:00 PM Eastern Time. On October 9, 2023, the Company received an additional letter (the “Fourth Letter”) from the staff at Nasdaq Global notifying the Company that its not meeting the 400 total shareholders requirement under the Nasdaq Listing Rule 5450(a)(2) serves as an additional basis for delisting the Company’s Securities from Nasdaq Global. The Company planned to also address the 400 total shareholder requirement at the Hearing. On October 26, 2023, the Nasdaq Listing Qualifications Department of the Nasdaq Stock Market notified the Company in writing (the “Notice”) that its application to transfer the listing of its Securities to NasdaqCM has been approved. The Notice also stated that the Company’s Securities will be transferred to the NasdaqCM at the opening of business on October 30, 2023. On November 1, 2023, the Company received a letter from the Nasdaq Global Hearings panel that due to the Company’s transfer of its listed Securities to NasdaqCM, the Hearing on November 30, 2023 regarding non-compliance with the Nasdaq Global listing standards has been cancelled. The Company’s Securities will continue to be listed and traded on The Nasdaq Stock Market on NasdaqCM. On November 6, 2023, DHAC held its 2023 annual stockholders meeting (“2023 Annual Meeting”). At the 2023 Annual Meeting, the stockholders of DHAC approved amendments to DHAC’s Charter to extend the date by which the Company must consummate a Business Combination (as defined in the Charter) up to four ( 4 ) times, each by an additional three ( 3 ) months, for an aggregate of twelve ( 12 ) additional months (i.e., from November 8, 2023 up to November 8, 2024) or such earlier date as determined by the Company’s board of directors. In connection with the amended Charter, on November 6, 2023, DHAC extended the period of time that it has to consummate its business combination by three months from November 8, 2023 to February 8, 2024. Furthermore, at the 2023 Annual Meeting, the stockholders of DHAC also approved an amendment to DHAC’s investment management trust agreement (the “Trust Agreement”), dated as of November 3, 2021 and as amended on October 26, 2022, by and between the Company and Continental Stock Transfer & Trust Company, which allows the Company to extend the business combination period from November 8, 2023 to up to four ( 4 ) times, each by an additional three ( 3 ) months, for an aggregate of twelve ( 12 ) additional months to November 8, 2024. In connection with the 2023 Annual Meeting and amendments to DHAC’s Charter and Trust Agreement, 579,157 shares of common stock were redeemed for approximately $6.8 million paid of trust at $11.73 redemption price per share. | NOTE 11. SUBSEQUENT EVENTS The Company evaluated subsequent events and transactions that occurred after the consolidated balance sheet date up to the date that the consolidated financial statements were issued. Based upon this review, expect as disclosed below, the Company did not identify any subsequent events that would have required adjustment or disclosure in the consolidated financial statements. On January 18, 2023, SCS Capital LLC issued an unsecured promissory note to the Company, pursuant to which the Company may borrow up to an aggregate principal amount of $250,000. The Promissory Note is non-interest bearing and shall be used to pay for general operating expenses. On January 18, 2023 DHAC and the Sponsor, entered into a Backstop Agreement (the “Backstop Agreement”) pursuant to which DHAC agreed to offer on or prior to the closing of the Business Combination the PIPE Investors the option to purchase up to an additional 2,000 shares of Series A Preferred Stock initially convertible into 234,260 shares of DHAC common stock (the “Additional PIPE Shares” and together with the Initial PIPE Shares, the “PIPE Shares”), together with additional warrants to purchase up to 106,000 shares of DHAC common stock (the “Additional PIPE Warrants” and together with the Initial PIPE Warrants, the “PIPE Warrants”; the Additional PIPE Shares and Additional PIPE Warrants are referred to as the “Additional PIPE Securities”) pursuant to a participation right granted to the PIPE Investors under the PIPE Securities Purchase Agreement, in each case, on the same terms and conditions set forth in the PIPE Securities Purchase Agreement for an aggregate purchase price of up to $2,000,000 (such proceeds together with the proceeds from the Initial PIPE Financing, as increased pursuant to the amendment to the Backstop Agreement described below, the “Aggregate Closing PIPE Proceeds”). Pursuant to the Backstop Agreement, if the PIPE Investors do not elect to purchase all of the Additional PIPE Securities, the Sponsor has agreed to purchase any such unsubscribed Additional PIPE Securities concurrent with the closing of the transactions contemplated by the PIPE Securities Purchase Agreement on the same terms and conditions set forth in the PIPE Securities Purchase Agreement. The Backstop Agreement contains customary representations, warranties, and agreements of the Company and the Sponsor and is subject to customary closing conditions and termination rights. If the conditions to the consummation of the Backstop Commitment contemplated by the Backstop Agreement are triggered, the closing of the sale of the Remaining Securities is expected to occur substantially concurrently with the closing of the transactions contemplated by the PIPE SPA. On February 2, 2023 the Company has extended the date by which the Company must consummate an initial business combination (the “Deadline Date”) for an additional three months from February 8, 2023 to May 8, 2023. The extension is the first of three additional three-month extensions permitted under the Company’s governing documents and provides the Company with additional time to complete its initial business combination. On February 1, 2023, the parties entered into a confidential settlement agreement. On February 3, 2023, Plaintiff’s counsel filed a notice of settlement with the court, requesting that the matter be placed on the inactive calendar for at least 30 days to allow the parties time to effectuate the terms of the settlement agreement. The parties filed a stipulation to dismiss the entire case with prejudice on April 7, 2023. See Note 6, Legal Claims for further detail. On March 31, 2023, the Company received a letter (the “Letter”) from the staff at The Nasdaq Global Market (“Nasdaq Global”) notifying the Company that for the 30 consecutive trading days prior to the date of the Letter, the Company’s securities listed on Nasdaq Global (including the Common Stock, Units and Warrants) (the “Securities”) had traded at a value below the minimum $50,000,000 “Market Value of Listed Securities” (“MVLS”) requirement set forth in Nasdaq Listing Rule 5450(b)(2)(A), which is required for continued listing of the Company’s Securities on Nasdaq Global. The Letter is only a notification of deficiency, not of imminent delisting, and has no current effect on the listing or trading of the Company’s Securities on Nasdaq Global. In accordance with Nasdaq listing rule 5810(c)(3)(C), the Company has 180 calendar days, or until September 27, 2023, to regain compliance. The Letter notes that to regain compliance, the Company’s Securities must trade at or above a level such that the Company’s MVLS closes at or above $50,000,000 for a minimum of ten On April 11, 2023 but effective March 31, 2023, the Company entered into an amendment to the PIPE Securities Purchase Agreement to, among other things, (a) amend and restate the form of Certificate of Designation of the Series A Preferred Stock to provide the aggregate number of shares of Series A Preferred Stock issuable thereunder shall not exceed 15,000, (b) amend and restate the form of PIPE Warrant to correct an error in the redemption provision of the PIPE Warrants, and (c) revise certain closing conditions for the PIPE Financing. On April 11, 2023 but effective March 31, 2023, the Sponsor and DHAC entered into an amendment to the Backstop Agreement to increase the Additional PIPE Shares that may be purchased pursuant to the Backstop Agreement from 2,000 shares of Series A Preferred Stock to 7,000 shares of Series A Preferred Stock, for an aggregate additional PIPE financing of up to $7,000,000, increasing the Aggregate Closing PIPE Proceeds to a total of $15,000,000. Pursuant to the PIPE Securities Purchase Agreement and the Backstop Agreement, each as amended, any purchaser of Additional PIPE Securities will enter into a lock up agreement with the Company pursuant to which such purchaser will agree not to, subject to certain limited exceptions, (i) sell, offer to sell, contract or agree to sell, hypothecate, pledge, grant any option to purchase, make any short sale or otherwise dispose of or agree to dispose of, directly or indirectly, any Additional PIPE Securities, or establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Securities and Exchange Act of 1934, as amended and the rules and regulations of the Securities and Exchange Commission promulgated thereunder with respect to any Additional PIPE Securities owned directly by the purchaser (including holding as a custodian) or with respect to which the purchaser has beneficial ownership within the rules and regulations of the Securities and Exchange Commission, or (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any of the purchaser’s Additional PIPE Securities, whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of shares of DHAC Common Stock or other securities, in cash or otherwise, (3) make any demand for or exercise any right or cause to be filed a registration statement, including any amendments thereto, with respect to the registration of any Additional PIPE Securities or (4) publicly disclose the intention to do any of the foregoing. |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X of the Securities and Exchange Commission (“SEC”). Certain information or footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the period ended December 31, 2022, as filed with the SEC on April 12, 2023. The interim results for the three and nine months ended September 30, 2023 are not necessarily indicative of the results to be expected for the year ending December 31, 2023 or for any future periods. | Basis of Presentation The accompanying consolidated financial statements are presented in U.S. dollars and have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the accounting and disclosure rules and regulations of the Securities and Exchange Commission (the “SEC”). |
Principles of Consolidation | Principles of Consolidation The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiary. All significant intercompany balances and transactions have been eliminated in consolidation. | Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiary. All significant intercompany balances and transactions have been eliminated in consolidation. |
Liquidity and Going Concern | Liquidity and Going Concern The Company may raise additional capital through loans or additional investments from the Sponsor or its stockholders, officers, directors, or third parties. The Company’s officers and directors and the Sponsor may but are not obligated to (except as described above), loan the Company funds, from time to time, in whatever amount they deem reasonable in their sole discretion, to meet the Company’s working capital needs. Based on the foregoing, the Company believes it will have sufficient working capital and borrowing capacity from the Sponsor or an affiliate of the Sponsor, or certain of the Company directors to meet its needs through the earlier of the consummation of a Business Combination or at least one year from the date that the financial statements were issued. As of September 30, 2023, the Company had a cash balance of $507 and a working capital deficiency of $8,154,992 . In addition, in connection with the Company’s assessment of going concern considerations in accordance with FASB Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” management has determined that the liquidity, mandatory liquidation and subsequent dissolution on February 8, 2024 raises substantial doubt about the Company’s ability to continue as a going concern. No adjustments have been made to the carrying amounts of assets or liabilities of the Company as of September 30, 2023. The Company intends to complete a Business Combination before the mandatory liquidation date or file for an extension. | Liquidity and Going Concern 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). As of December 31, 2022 and 2021, there were no amounts outstanding under any Working Capital Loans. The Company may raise additional capital through loans or additional investments from the Sponsor or its stockholders, officers, directors, or third parties. The Company’s officers and directors and the Sponsor may but are not obligated to (except as described above), loan the Company funds, from time to time, in whatever amount they deem reasonable in their sole discretion, to meet the Company’s working capital needs. Based on the foregoing, the Company believes it will have sufficient working capital and borrowing capacity from the Sponsor or an affiliate of the Sponsor, or certain of the Company directors to meet its needs through the earlier of the consummation of a Business Combination or at least one year from the date that the financial statements were issued. As of December 31, 2022, the Company had a cash balance of $106,998 and a working capital deficiency of $3,056,596 net of $132,020 of allowable interest withdraws from trust to cover income and franchise taxes. In addition, in connection with the Company’s assessment of going concern considerations in accordance with FASB Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” management has determined that the liquidity, mandatory liquidation and subsequent dissolution raises substantial doubt about the Company’s ability to continue as a going concern. No adjustments have been made to the carrying amounts of assets or liabilities of the Company as of December 31, 2022. The Company intends to complete a Business Combination before the mandatory liquidation date. |
Emerging Growth Company | Emerging Growth Company The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, 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 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. | Emerging Growth Company The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, 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 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. |
Offering Costs | Offering Costs Offering costs consisted of legal, accounting, and other expenses incurred through the Initial Public Offering that were directly related to the Initial Public Offering. Offering costs were allocated to the separable financial instruments issued in the Initial Public Offering based on a relative fair value basis, compared to total proceeds received. Offering costs allocated to warrant were allocated to equity. Offering costs associated with the common stock issued were initially charged to temporary equity and then accreted to common stock subject to redemption upon the completion of the Initial Public Offering. | Offering Costs Offering costs consisted of legal, accounting, and other expenses incurred through the Initial Public Offering that were directly related to the Initial Public Offering. Offering costs were allocated to the separable financial instruments issued in the Initial Public Offering based on a relative fair value basis, compared to total proceeds received. Offering costs allocated to warrant were allocated to equity. Offering costs associated with the common stock issued were initially charged to temporary equity and then accreted to common stock subject to redemption upon the completion of the Initial Public Offering. |
Use of Estimates | Use of Estimates The preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires the Company’s 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 financial statements and the reported amounts of revenues and expenses during the reporting period. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. The most significant accounting estimates were the assumptions used to fair value the PIPE Forward Contract, the Investor Note Derivative and the Bridge Note Bifurcated Derivative. Accordingly, the actual results could differ significantly from those estimates. | Use of Estimates The preparation of the consolidated financial statements in conformity with U.S. GAAP requires the Company’s 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 financial statements and the reported amounts of revenues and expenses during the reporting period. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. The most significant accounting estimates were the assumptions used to fair value the PIPE Forward Contract and the Bridge Note Bifurcated Derivative. Accordingly, the actual results could differ significantly 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 no t have any cash equivalents as of September 30, 2023 and December 31, 2022. | 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, 2022 and 2021. |
Investments Held in Trust Account | Investments Held in Trust Account At September 30, 2023 and December 31, 2022, the assets held in the Trust Account were held in money market funds, which are invested primarily in U.S. Treasury securities. | Investments Held in Trust Account At December 31, 2022 and 2021, the assets held in the Trust Account were held in money market funds, which are invested primarily in U.S. Treasury securities. |
Common Stock Subject to Possible Redemption | Common Stock Subject to Possible Redemption The Company accounts for its common stock subject to possible redemption in accordance with the guidance in ASC Topic 480, “Distinguishing Liabilities from Equity.” Common stock subject to mandatory redemption is classified as a liability instrument and is measured at fair value. Conditionally redeemable common stock (including common stock that features 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) is classified in temporary equity. At all other times, common stock is classified as stockholders’ deficit. The Company’s common stock sold in the IPO features certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, at September 30, 2023 and December 31, 2022, common stock subject to possible redemption is presented at redemption value as temporary equity, outside of the stockholders’ deficit section of the Company’s condensed consolidated balance sheets. 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. This method would view the end of the reporting period as if it were also the redemption date for the security. Immediately upon the closing of the Initial Public Offering, increases or decreases in the carrying amount of redeemable common stock are affected by charges against additional paid-in capital and accumulated deficit. At September 30, 2023 and December 31, 2022, the common stock reflected in the condensed consolidated balance sheets is reconciled in the following table: Gross proceeds $ 115,000,000 Less: Proceeds Allocated to Public Warrants (12,483,555) Common stock issuance costs (6,923,767) Plus: Accretion of carrying value to redemption value 21,132,322 Common stock subject to possible redemption, December 31, 2021 116,725,000 Plus: Accretion of carrying value to redemption value 1,142,603 Less: Redemptions (110,472,254) Common stock subject to possible redemption, December 31, 2022 7,395,349 Plus: Accretion of carrying value to redemption value 498,865 Common stock subject to possible redemption, September 30, 2023 $ 7,894,214 | Common Stock Subject to Possible Redemption The Company accounts for its common stock subject to possible redemption in accordance with the guidance in ASC Topic 480, “Distinguishing Liabilities from Equity.” Common stock subject to mandatory redemption is classified as a liability instrument and is measured at fair value. Conditionally redeemable common stock (including common stock that features 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) is classified in temporary equity. At all other times, common stock is classified as stockholders’ deficit. The Company’s common stock features certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, at December 31, 2022 and 2021, common stock subject to possible redemption is presented at redemption value as temporary equity, outside of the stockholders’ deficit section of the Company’s consolidated balance sheets. 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. This method would view the end of the reporting period as if it were also the redemption date for the security. Immediately upon the closing of the Initial Public Offering, increases or decreases in the carrying amount of redeemable common stock are affected by charges against additional paid-in capital and accumulated deficit. At December 31, 2022 and 2021, the common stock reflected in the consolidated balance sheets is reconciled in the following table: Gross proceeds $ 115,000,000 Less: Proceeds Allocated to Public Warrants (12,483,555) Common stock issuance costs (6,923,767) Plus: Accretion of carrying value to redemption value 21,132,322 Common stock subject to possible redemption, December 31, 2021 116,725,000 Plus: Accretion of carrying value to redemption value 1,142,603 Less: Redemptions (110,472,254) Common stock subject to possible redemption, December 31, 2022 $ 7,395,349 |
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 FASB ASC 820, “Fair Value Measurements” approximates the carrying amounts represented in the condensed consolidated balance sheets, primarily due to its short-term nature. | Fair Value of Financial Instruments The fair value of the Company’s assets and liabilities, which qualify as financial instruments under FASB ASC 820, “Fair Value Measurements” approximates the carrying amounts represented in the consolidated balance sheets, primarily due to its short-term nature. |
Income Taxes | Income Taxes The Company accounts for income taxes under ASC 740, “Income Taxes.” ASC 740, Income Taxes, requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the unaudited condensed consolidated financial statements 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. ASC 740-270-25-2 requires that an annual effective tax rate be determined, and such annual effective rate applied to year to date income in interim periods under ASC 740-270-30-5. As of September 30, 2023 and December 31, 2022, the Company’s deferred tax asset had a full valuation allowance recorded against it. ASC 740-270-25-2 requires that an annual effective tax rate be determined and such annual effective rate applied to year to date income in interim periods under ASC 740-270-30-5. The Company’s effective tax rate was 0.0% and 11.25% for the three months ended September 30, 2023 and 2022, respectively, the effective tax rate was 0.0% and 4.31% for the nine months ended September 30, 2023 and 2022, respectively. The effective tax rate differs from the statutory tax rate of 21% for the three and nine months ended September 30, 2023 and 2022 due to 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 as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of September 30, 2023 and December 31, 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 taxation 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. | Income Taxes The Company follows the asset and liability method of accounting for income taxes under FASB ASC 740, “Income Taxes” (“ASC 740”). Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. The Company accounts for income taxes under ASC 740. ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions 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. The Company’s management determined that the United States is the Company’s major tax jurisdiction. As of December 31, 2022 and 2021, there were no unrecognized tax benefits and no amounts accrued for interest and penalties. 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’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months. |
Net Income (Loss) per Common Stock | Net Income (Loss) per Common Stock The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share.” Net income (loss) per common stock is computed by dividing net income (loss) by the weighted average number of common stocks outstanding for the period. Accretion associated with the redeemable shares of common stock is excluded from net income (loss) per common stock as the redemption value approximates fair value. The calculation of diluted income (loss) per share does not consider the effect of the warrants issued in connection with the (i) Initial Public Offering, and (ii) the private placement (iii) the Bridge and Investor Note Warrants because the exercise of the warrants is contingent upon the occurrence of future events and the inclusion of such warrants would be anti-dilutive. The warrants are exercisable to purchase 12,256,999 common stocks in the aggregate. As of the three and nine months ended September 30, 2023 and 2022, the Company did no t have any dilutive securities or other contracts that could, potentially, be exercised or converted into common stocks and then share in the earnings of the Company. As a result, diluted net income (loss) per common stock is the same as basic net income (loss) per common stock for the periods presented. The following table reflects the calculation of basic and diluted net income (loss) per common stock (in dollars, except per share amounts): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2023 2022 2023 2022 Common Stock Common Stock Common Stock Common Stock Basic and diluted net income (loss) per of common stock Numerator: Allocation of net income (loss), as adjusted $ 78,287 $ (820,759) $ (1,552,805) $ (2,007,578) Denominator: Basic and diluted weighted average shares outstanding, non- redeemable common stock 4,183,123 14,932,000 4,177,427 14,932,000 Basic and diluted net income (loss) per share, non-redeemable common stock $ 0.02 $ (0.05) $ (0.37) $ (0.13) | Net Loss per Common Stock The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share.” Net loss per common stock is computed by dividing net loss by the weighted average number of common stocks outstanding for the period. This presentation contemplates a Business Combination as the most likely outcome, in which case, both classes of common stocks share pro rata in the loss of the Company. Accretion associated with the redeemable shares of common stock is excluded from net loss per common stock as the redemption value approximates fair value. The calculation of diluted loss per share does not consider the effect of the warrants issued in connection with the (i) Initial Public Offering, (ii) the private placement (iii) the Bridge Warrants because the exercise of the warrants is contingent upon the occurrence of future events and the inclusion of such warrants would be anti-dilutive. The warrants are exercisable to purchase 12,230,913 common stocks in the aggregate. As of December 31, 2022, the Company did not have any dilutive securities or other contracts that could, potentially, be exercised or converted into common stocks and then share in the earnings of the Company. As a result, diluted net loss per common stock is the same as basic net loss per common stock for the periods presented. The following table reflects the calculation of basic and diluted net loss per common stock (in dollars, except per share amounts): For the Period from March 30, 2021 Year Ended (Inception) through December 31, 2022 December 31, 2021 Common Stock Common Stock Basic and diluted net loss per of common stock Numerator: Net loss, as adjusted $ (3,242,501) $ (280,701) Denominator: Basic and diluted weighted average shares outstanding, common stock 12,741,219 3,981,054 Basic and diluted net loss per share, common stock $ (0.25) $ (0.07) |
Concentration of Credit Risk | Concentration of Credit Risk The Company has significant cash balances at a financial institutions which throughout the year did not exceed the federally insured limited of $250,000. There was no risk of loss incurred or a lack of access to such funds could have a significant adverse impact on the Company’s financial condition, results of operations, and cash flows. | Concentration of Credit Risk The Company has significant cash balances at financial institutions which throughout the year regularly exceed the federally insured limit of $250,000. Any loss incurred or a lack of access to such funds could have a significant adverse impact on the Company’s financial condition, results of operations, and cash flows. |
Warrant Instruments | Warrant Instruments The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in FASB ASC 480, “Distinguishing Liabilities from Equity” (“ASC 480”), and ASC 815, “Derivatives and Hedging” (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own common stock, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding. For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. The Company has analyzed the Public Warrants, Private Warrants, Bridge Note Warrants and the Investor Warrants and determined they are considered to be freestanding instruments and do not exhibit any of the characteristics in ASC 480 and therefore are not classified as liabilities under ASC 480. The warrants meet all of the requirements for equity classification under ASC 815 and therefore are classified in equity. | Warrant Instruments The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in FASB ASC 480, “Distinguishing Liabilities from Equity” (“ASC 480”), and ASC 815, “Derivatives and Hedging” (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own common stock, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding. For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. The Company’s has analyzed the Public Warrants and Private Warrants and determined they are considered to be freestanding instruments and do not exhibit any of the characteristics in ASC 480 and therefore are not classified as liabilities under ASC 480. The warrants meet all of the requirements for equity classification under ASC 815 and therefore are classified in equity. |
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 bifurcated derivatives in accordance with ASC 815. Derivative instruments are recorded at fair value on the grant date and re-valued at each reporting date, with changes in the fair value reported in the statements 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. The Company has determined the PIPE financing agreement is a derivative instrument, the Bridge Note and the Investor Note’s early redemption provisions are embedded feature that are required to be bifurcated as a derivative. FASB ASC 470-20, “Debt with Conversion and Other Options,” addresses the allocation of proceeds from the issuance of debt into its debt and bifurcated derivative components. The Company applies this guidance to allocate the Bridge Note and the Investor Note proceeds between the Bridge Note and the Investor Note, respectively and the respective Bifurcated Derivative, using the residual method by allocating the principal first to fair value of the bifurcated derivative and then to the debt. | |
Fair Value Measurement | Fair Value Measurement 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. U.S. 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. | Fair Value Measurement 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. U.S. 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. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Management does not believe that any recently issued, but not effective, accounting standards, if currently adopted, would have a material effect on the Company’s condensed consolidated financial statements. | Recent Accounting Pronouncements In August 2020, the FASB issued ASU 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)” (“ASU 2020-06”), to simplify accounting for certain financial instruments. ASU 2020-06 eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity. The new standard also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity’s own equity. ASU 2020-06 amends the diluted earnings per share guidance, including the requirement to use the if-converted method for all convertible instruments. As a smaller reporting company, ASU 2020-06 is effective January 1, 2024 for fiscal years beginning after December 15, 2023 and should be applied on a full or modified retrospective basis, with early adoption permitted beginning on January 1, 2021. The Company is currently assessing the impact, if any, that ASU 2020-06 would have on its financial position, results of operations or cash flows. The Company adopted ASU 2020-06 at inception on March 30, 2021. The adoption of ASU 2020-06 did not have an impact on the Company’s consolidated financial statements. Management does not believe that any recently issued, but not effective, accounting standards, if currently adopted, would have a material effect on the Company’s consolidated financial statements. |
Risks and Uncertainties | Risks and Uncertainties Management continues to evaluate the impact of the COVID-19 pandemic and the current wars on the industry and has concluded that while it is reasonably possible that the virus and the war could have a negative effect on the Company’s financial position, results of its operations and/or closing a business combination, the specific impact is not readily determinable as of the date these condensed consolidated financial statements are issued. The condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Inflation Reduction Act of 2022 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 of stock by publicly traded U.S. domestic corporations and certain U.S. domestic subsidiaries of publicly traded foreign corporations occurring on or after January 1, 2023. 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 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. 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. | Risks and Uncertainties 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. Further, the impact of this action and related sanctions on the world economy is not determinable as of the date of these consolidated 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 consolidated financial statements. 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 the consolidated financial statements. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Inflation Reduction Act of 2022 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 of stock by publicly traded U.S. domestic corporations and certain U.S. domestic subsidiaries of publicly traded foreign corporations occurring on or after January 1, 2023. 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 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. 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. |
SUMMARY OF SIGNIFICANT ACCOUN_8
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Schedule of common stock subject to possible redemption | Gross proceeds $ 115,000,000 Less: Proceeds Allocated to Public Warrants (12,483,555) Common stock issuance costs (6,923,767) Plus: Accretion of carrying value to redemption value 21,132,322 Common stock subject to possible redemption, December 31, 2021 116,725,000 Plus: Accretion of carrying value to redemption value 1,142,603 Less: Redemptions (110,472,254) Common stock subject to possible redemption, December 31, 2022 7,395,349 Plus: Accretion of carrying value to redemption value 498,865 Common stock subject to possible redemption, September 30, 2023 $ 7,894,214 | Gross proceeds $ 115,000,000 Less: Proceeds Allocated to Public Warrants (12,483,555) Common stock issuance costs (6,923,767) Plus: Accretion of carrying value to redemption value 21,132,322 Common stock subject to possible redemption, December 31, 2021 116,725,000 Plus: Accretion of carrying value to redemption value 1,142,603 Less: Redemptions (110,472,254) Common stock subject to possible redemption, December 31, 2022 $ 7,395,349 |
Schedule of calculation of basic and diluted net loss per common stock | The following table reflects the calculation of basic and diluted net income (loss) per common stock (in dollars, except per share amounts): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2023 2022 2023 2022 Common Stock Common Stock Common Stock Common Stock Basic and diluted net income (loss) per of common stock Numerator: Allocation of net income (loss), as adjusted $ 78,287 $ (820,759) $ (1,552,805) $ (2,007,578) Denominator: Basic and diluted weighted average shares outstanding, non- redeemable common stock 4,183,123 14,932,000 4,177,427 14,932,000 Basic and diluted net income (loss) per share, non-redeemable common stock $ 0.02 $ (0.05) $ (0.37) $ (0.13) | The following table reflects the calculation of basic and diluted net loss per common stock (in dollars, except per share amounts): For the Period from March 30, 2021 Year Ended (Inception) through December 31, 2022 December 31, 2021 Common Stock Common Stock Basic and diluted net loss per of common stock Numerator: Net loss, as adjusted $ (3,242,501) $ (280,701) Denominator: Basic and diluted weighted average shares outstanding, common stock 12,741,219 3,981,054 Basic and diluted net loss per share, common stock $ (0.25) $ (0.07) |
FAIR VALUE MEASUREMENTS (Tabl_2
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
FAIR VALUE MEASUREMENTS | ||
Schedule of gross holding loss and fair value of held-to-maturity securities | Fair Trading Securities Level Value September 30, 2023 Money Market Funds 1 $ 8,119,642 Fair Trading Securities Level Value December 31, 2022 Money Market Funds 1 $ 7,527,369 | Gross Amortized Holding Trading Securities Level Cost Loss Fair Value December 31, 2022 Money Market Funds 1 $ n/a $ n/a $ 7,527,369 Gross Amortized Holding Held-To-Maturity Level Cost Loss Fair Value December 31, 2021 U.S. Treasury Securities (Matured on 3/17/2022) 1 $ 116,726,019 $ (3,097) $ 116,722,922 |
Schedule of fair value information on recurring basis | September 30, 2023 Fair Value (Level 1) (Level 2) (Level 3) Liabilities: Investor Note – Bifurcated Derivative $ 22,805 $ — $ — $ 22,805 Bridge Note – Bifurcated Derivative $ 241,447 $ — $ — $ 241,447 December 31, 2022 Fair Value (Level 1) (Level 2) (Level 3) Liabilities: PIPE Forward Contract $ 170,666 $ — $ — $ 170,666 Bridge Note – Bifurcated Derivative $ 364,711 $ — $ — $ 364,711 | The following table presents fair value information as of December 31, 2022 of the Company’s financial liabilities that were 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. The Company did not have any financial liabilities that were accounted for at fair values on a recurring basis as of December 31, 2021. Carrying Value (Level 1) (Level 2) (Level 3) Liabilities: PIPE Forward Contract $ 170,666 $ — $ — $ 170,666 Bridge Note – Bifurcated Derivative $ 364,711 $ — $ — $ 364,711 |
Schedule of changes in the fair value of the financial liabilities | Bridge Note Investor Note Forward – Bifurcated – Bifurcated Contract Derivative Derivative Fair value as of December 31, 2022 $ 170,666 $ 364,711 $ — Change in valuation inputs or other assumptions 1,163,950 (34,758) — Fair value as of March 31, 2023 (unaudited) $ 1,334,616 $ 329,953 $ — Initial value of Investor Note – Bifurcated Derivative May 5, 2023 — — 24,502 Change in valuation inputs or other assumptions (634,110) (117,344) 3,099 Fair value as of June 30, 2023 (unaudited) $ 700,506 $ 212,609 $ 27,601 Change in valuation inputs or other assumptions (700,506) 28,838 (4,796) Fair value as of September 30, 2023 (unaudited) $ — $ 241,447 $ 22,805 | |
Schedule of key inputs into the Monte Carlo simulation model for Bridge Note Bifurcated Derivative | September 30, 2023 December 31, 2022 CCC bond rates 13.31 % 15.09 % Probability of early termination/repayment – business combination not completed 5 % 5 % Probability of early termination/repayment – business combination completed, or PIPE completed 80 % 95 % Probability of completing a business combination by March 31, 2023 — % 50 % Probability of completing a business combination by June 30, 2023 — % 50 % Probability of completing a business combination by December 31, 2023 80 % — % | October 5, 2022 December 31, 2022 CCC bond rates 14.09 % 15.09 % Probability of early termination/repayment -business combination not completed 10 % 5 % Probability of early termination/repayment -business combination completed or PIPE completed 90 % 95 % Probability of completing a business combination by March 31, 2023 50 % 50 % Probability of completing a business combination by June 30, 2023 50 % 50 % |
Schedule of key inputs into the investor note bifurcated derivative and PWERM for the PIPE Forward Contracts | October 6, 2022 December 31, 2022 Risk-fee interest rate 4.00 % 4.76 % Expected term (years) 0.61 0.37 Probability of completing a business combination 90 % 95 % | |
Schedule of change in fair value of Level 3 financial liabilities | PIPE Bridge Note Investor Note Forward Bifurcated Bifurcated Contract Derivative Derivative Fair value at December 31, 2022 $ 170,666 $ 364,711 $ — Initial value of Investor Note – Bifurcated Derivative May 5, 2023 — — 24,502 Change in fair value (170,666) (123,265) (1,697) Fair value at September 30, 2023 $ — $ 241,447 $ 22,805 | PIPE Bridge Note Forward Contract Bifurcated Derivative Fair value at October 5, 2022 (Initial measurement) $ 278,404 Fair value at October 6, 2022 (Initial measurement) $ — — Change in fair value 170,666 86,307 Fair value at December 31, 2022 $ 170,666 $ 364,711 |
Investor Note - Bifurcated Derivative | ||
FAIR VALUE MEASUREMENTS | ||
Schedule of key inputs into the investor note bifurcated derivative and PWERM for the PIPE Forward Contracts | September 30, 2023 May 5, 2023 Risk-free interest rate 5.53 % 5.12 % Expected term (years) 0.25 0.38 Probability of completing a business combination by August 30, 2023 — % 25 % Probability of completing a business combination by September 30, 2023 20 % 75 % Probability of completing a business combination by December 31, 2023 80 % — % | |
PIPE Forward Contract | ||
FAIR VALUE MEASUREMENTS | ||
Schedule of key inputs into the investor note bifurcated derivative and PWERM for the PIPE Forward Contracts | December 31, 2022 Risk-free interest rate 4.76 % Expected term (years) 0.37 Probability of completing a business combination 95 % |
DESCRIPTION OF ORGANIZATION A_4
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||||||||||
Nov. 08, 2023 item | Nov. 06, 2023 item shares | Sep. 27, 2023 USD ($) | Aug. 01, 2023 | May 23, 2023 USD ($) | Mar. 31, 2023 USD ($) | Oct. 26, 2022 USD ($) $ / shares | Oct. 20, 2022 USD ($) item shares | Oct. 06, 2022 | Nov. 12, 2021 USD ($) | Nov. 11, 2021 USD ($) | Nov. 08, 2021 USD ($) $ / shares shares | Mar. 31, 2023 USD ($) | Sep. 30, 2023 USD ($) item $ / shares shares | Dec. 31, 2021 USD ($) shares | Dec. 31, 2022 USD ($) item $ / shares shares | Aug. 17, 2023 USD ($) | May 08, 2023 USD ($) | Nov. 26, 2022 USD ($) | |
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | |||||||||||||||||||
Condition for future Business Combination number of businesses minimum | item | 1 | 1 | |||||||||||||||||
Purchase price, per unit | $ / shares | $ 10.15 | $ 10.15 | |||||||||||||||||
Proceeds from issuance Initial Public Offering | $ 113,045,000 | ||||||||||||||||||
Aggregate purchase price | $ 214,200 | 25,000 | $ 284,424 | ||||||||||||||||
Transaction costs | $ 6,877,164 | 6,877,164 | |||||||||||||||||
Underwriting fees | 1,955,000 | 1,955,000 | |||||||||||||||||
Deferred underwriting fee payable | 4,370,000 | 4,370,000 | 4,370,000 | ||||||||||||||||
Other offering costs | 552,164 | 552,164 | |||||||||||||||||
Cash held outside trust account | $ 9,478 | $ 9,478 | |||||||||||||||||
Obligation to redeem public shares if entity does not complete a Business Combination (as a percent) | 100% | ||||||||||||||||||
Months to complete acquisition | 21 months | 18 months | |||||||||||||||||
Extension period to consummate a business combination | 3 months | 3 months | |||||||||||||||||
Number of extensions to consummate a business combination | item | 3 | ||||||||||||||||||
Aggregate extension period to consummate a business combination | 9 months | ||||||||||||||||||
Extension fee payable by Sponsor | $ 350,000 | $ 350,000 | |||||||||||||||||
Extension fee | $ 0 | ||||||||||||||||||
Extension fee in case of Form S-4 Registration statement | 3 months | ||||||||||||||||||
Number of remaining shares issued and outstanding entitled to vote Number of remaining shares issued and outstanding entitled to vote | shares | 4,156,123 | ||||||||||||||||||
Threshold minimum aggregate fair market value as a percentage of the net assets held in the trust account | 80 | 80 | |||||||||||||||||
Condition for future business combination threshold percentage ownership | 50 | 50 | |||||||||||||||||
Redemption of shares calculated based on business days prior to consummation of Business Combination (in days) | 2 days | 2 days | |||||||||||||||||
Investment of cash into trust account | $ 350,000 | $ 116,725,008 | $ 350,000 | ||||||||||||||||
Anticipated price per public share based on amount held in trust account | $ / shares | $ 10.65 | ||||||||||||||||||
Threshold consecutive trading days prior to the date of letter | 30 days | ||||||||||||||||||
Period to regain compliance | 10 days | ||||||||||||||||||
Redemption period upon closure | 10 days | 10 days | |||||||||||||||||
Maximum allowed dissolution expenses | $ 100,000 | $ 100,000 | |||||||||||||||||
Condition for future Business Combination threshold net tangible assets | $ 5,000,001 | $ 5,000,001 | |||||||||||||||||
Aggregate shares redeemed | shares | 10,805,877 | 10,805,877 | 10,805,877 | ||||||||||||||||
Number of consecutive trading days prior to the date of the Letter | 30 days | ||||||||||||||||||
Number of business days during compliance period | 10 days | ||||||||||||||||||
Minimum market value of listed securities | $ 50,000,000 | $ 15,000,000 | |||||||||||||||||
Promissory Note with Related Party | |||||||||||||||||||
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | |||||||||||||||||||
Aggregate principal amount | $ 350,000 | ||||||||||||||||||
VSee and iDoc | |||||||||||||||||||
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | |||||||||||||||||||
Percentage of common stock issued as consideration | 100% | 100% | 100% | ||||||||||||||||
Subsequent Event | |||||||||||||||||||
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | |||||||||||||||||||
Extension period to consummate a business combination | 3 months | 3 months | |||||||||||||||||
Number of extensions to consummate a business combination | item | 4 | ||||||||||||||||||
Aggregate extension period to consummate a business combination | 12 months | 12 months | |||||||||||||||||
Number of consecutive trading days prior to the date of the Letter | 30 days | ||||||||||||||||||
Number of business days during compliance period | 10 days | ||||||||||||||||||
Minimum market value of listed securities | $ 50,000,000 | $ 50,000,000 | |||||||||||||||||
Term by which the period to consummate initial business combination extended | 3 months | ||||||||||||||||||
Number of shares tendered for redemption | shares | 579,157 | ||||||||||||||||||
Subsequent Event | Maximum | |||||||||||||||||||
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | |||||||||||||||||||
Number of extensions to consummate a business combination | item | 4 | 4 | |||||||||||||||||
Common stock subject to possible redemption | |||||||||||||||||||
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | |||||||||||||||||||
Common stock subject to possible redemption, shares outstanding | shares | 694,123 | 694,123 | 11,500,000 | 694,123 | |||||||||||||||
Common Stock | |||||||||||||||||||
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | |||||||||||||||||||
Sale of units, net of underwriting discounts (in shares) | shares | 557,000 | ||||||||||||||||||
Aggregate purchase price | $ 2 | $ 288 | $ 3 | ||||||||||||||||
Common Stock | Common stock subject to possible redemption | |||||||||||||||||||
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | |||||||||||||||||||
Aggregate shares redeemed | shares | 10,805,877 | ||||||||||||||||||
IPO | |||||||||||||||||||
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | |||||||||||||||||||
Sale of units, net of underwriting discounts (in shares) | shares | 11,500,000 | ||||||||||||||||||
Purchase price, per unit | $ / shares | $ 10 | ||||||||||||||||||
Proceeds from issuance Initial Public Offering | $ 115,000,000 | ||||||||||||||||||
Obligation to redeem public shares if entity does not complete a Business Combination (as a percent) | 100% | ||||||||||||||||||
Months to complete acquisition | 21 months | ||||||||||||||||||
IPO | Private Placement Warrants | |||||||||||||||||||
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | |||||||||||||||||||
Purchase price, per unit | $ / shares | $ 10.15 | ||||||||||||||||||
Proceeds from issuance Initial Public Offering | $ 116,725,000 | ||||||||||||||||||
Private Placement | Private Placement Warrants | |||||||||||||||||||
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | |||||||||||||||||||
Number of warrants to purchase shares issued | shares | 557,000 | ||||||||||||||||||
Price of warrant | $ / shares | $ 10 | ||||||||||||||||||
Aggregate purchase price | $ 5,570,000 | $ 5,570,000 | |||||||||||||||||
Proceeds from sale of private placement warrants | $ 5,570,000 | 3,680,000 | |||||||||||||||||
Receivable recorded from the sale of private placement warrants | 1,890,000 | ||||||||||||||||||
Underwriting fees | $ 0 | ||||||||||||||||||
Obligation to redeem public shares if entity does not complete a Business Combination (as a percent) | 100% | 100% | |||||||||||||||||
Months to complete acquisition | 21 months | 18 months | |||||||||||||||||
Over-allotment option | |||||||||||||||||||
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | |||||||||||||||||||
Sale of units, net of underwriting discounts (in shares) | shares | 1,500,000 | ||||||||||||||||||
Sponsor | |||||||||||||||||||
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | |||||||||||||||||||
Purchase price, per unit | $ / shares | $ 10.15 | $ 10.15 | |||||||||||||||||
Obligation to redeem public shares if entity does not complete a Business Combination (as a percent) | 100% | 100% | |||||||||||||||||
Investment of cash into trust account | $ 350,000 | ||||||||||||||||||
Anticipated price per public share based on amount held in trust account | $ / shares | $ 10.65 | ||||||||||||||||||
Sponsor | Promissory Note with Related Party | |||||||||||||||||||
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | |||||||||||||||||||
Aggregate principal amount | $ 350,000 | ||||||||||||||||||
SCS Capital Partners LLC | Promissory note | Promissory Note with Related Party | |||||||||||||||||||
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | |||||||||||||||||||
Aggregate principal amount | $ 565,000 | ||||||||||||||||||
Interest rate (in percent) | 0% |
SUMMARY OF SIGNIFICANT ACCOUN_9
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Mar. 31, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||||
Cash | $ 507 | $ 507 | $ 760,012 | $ 106,998 | |||
Working capital | 8,154,992 | 3,056,596 | |||||
Cash equivalents | $ 0 | $ 0 | $ 0 | $ 0 | |||
Effective tax rate | 0% | 11.25% | 0% | 4.31% | 0% | 6.10% | |
Statutory tax rate (as a percent) | 21% | 21% | 21% | 21% | 21% | 21% | |
Unrecognized tax benefits | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | ||
Unrecognized tax benefits accrued for interest and penalties | $ 0 | $ 0 | $ 0 | $ 0 | |||
Warrants outstanding | 12,057,000 | 12,057,000 | |||||
Anti-dilutive securities attributable to warrants (in shares) | 0 | 0 | 0 | 0 | |||
Private Placement Warrants | |||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||||
Warrants outstanding | 12,256,999 | 12,256,999 | 12,230,913 |
SUMMARY OF SIGNIFICANT ACCOU_10
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Common Stock Reflected in the Condensed Consolidated Balance Sheet (Details) - USD ($) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Common stock subject to possible redemption reflected on the condensed consolidated balance sheet | |||
Gross proceeds | $ 115,000,000 | ||
Less: | |||
Proceeds Allocated to Public Warrants | (12,483,555) | ||
Common stock issuance costs | (6,923,767) | ||
Plus: | |||
Redemptions | $ (110,472,254) | ||
Common stock subject to possible redemption | $ 7,894,214 | 7,395,349 | 116,725,000 |
Common stock subject to possible redemption | |||
Common stock subject to possible redemption reflected on the condensed consolidated balance sheet | |||
Gross proceeds | 115,000,000 | ||
Less: | |||
Proceeds Allocated to Public Warrants | (12,483,555) | ||
Common stock issuance costs | (6,923,767) | ||
Plus: | |||
Accretion of carrying value to redemption value | 498,865 | 1,142,603 | 21,132,322 |
Redemptions | (110,472,254) | ||
Common stock subject to possible redemption | $ 7,894,214 | $ 7,395,349 | $ 116,725,000 |
SUMMARY OF SIGNIFICANT ACCOU_11
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Calculation of basic and diluted net loss per common stock (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||
Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2022 | |
Numerator: | |||||||||||
Allocation of net income (loss), as adjusted | $ 78,287 | $ 263,550 | $ (1,894,642) | $ (820,759) | $ (659,459) | $ (527,360) | $ (1,552,805) | $ (2,007,578) | $ (280,701) | $ (3,242,501) | |
Denominator: | |||||||||||
Weighted average shares outstanding, non-redeemable common stock, basic | 4,183,123 | 14,932,000 | 4,177,427 | 14,932,000 | 3,981,054 | 12,741,219 | |||||
Weighted average shares outstanding, non-redeemable common stock, diluted | 4,183,123 | 14,932,000 | 4,177,427 | 14,932,000 | 3,981,054 | 12,741,219 | |||||
Basic net income (loss) per share, non-redeemable common stock | $ 0.02 | $ (0.05) | $ (0.37) | $ (0.13) | $ (0.07) | $ (0.25) | |||||
Diluted net income (loss) per share, non-redeemable common stock | $ 0.02 | $ (0.05) | $ (0.37) | $ (0.13) | $ (0.07) | $ (0.25) | |||||
Common Stock | |||||||||||
Numerator: | |||||||||||
Allocation of net income (loss), as adjusted | $ 78,287 | $ (820,759) | $ (1,552,805) | $ (2,007,578) | $ (280,701) | $ (3,242,501) | |||||
Denominator: | |||||||||||
Weighted average shares outstanding, non-redeemable common stock, basic | 3,981,054 | 12,741,219 | |||||||||
Weighted average shares outstanding, non-redeemable common stock, diluted | 3,981,054 | 12,741,219 | |||||||||
Basic net income (loss) per share, non-redeemable common stock | $ (0.07) | $ (0.25) | |||||||||
Diluted net income (loss) per share, non-redeemable common stock | $ (0.07) | $ (0.25) | |||||||||
Common stock not subject to redemption | |||||||||||
Denominator: | |||||||||||
Weighted average shares outstanding, non-redeemable common stock, basic | 4,183,123 | 14,932,000 | 4,177,427 | 14,932,000 | |||||||
Weighted average shares outstanding, non-redeemable common stock, diluted | 4,183,123 | 14,932,000 | 4,177,427 | 14,932,000 | |||||||
Basic net income (loss) per share, non-redeemable common stock | $ 0.02 | $ (0.05) | $ (0.37) | $ (0.13) | |||||||
Diluted net income (loss) per share, non-redeemable common stock | $ 0.02 | $ (0.05) | $ (0.37) | $ (0.13) |
INITIAL PUBLIC OFFERING (Deta_2
INITIAL PUBLIC OFFERING (Details) - $ / shares | 9 Months Ended | 12 Months Ended | |
Nov. 08, 2021 | Sep. 30, 2023 | Dec. 31, 2022 | |
INITIAL PUBLIC OFFERING | |||
Purchase price, per unit | $ 10.15 | $ 10.15 | |
Number of shares for each warrant | 1 | 1 | |
Exercise price of warrants | $ 11.50 | $ 11.50 | |
Months to complete acquisition | 21 months | 18 months | |
Public warrants expiration term | 5 years | 5 years | |
Public Warrants | |||
INITIAL PUBLIC OFFERING | |||
Threshold trading days for redemption of public warrants | 20 days | ||
IPO | |||
INITIAL PUBLIC OFFERING | |||
Number of units sold | 11,500,000 | ||
Purchase price, per unit | $ 10 | ||
Number of shares in a unit | 1 | ||
Months to complete acquisition | 21 months | ||
IPO | Public Warrants | |||
INITIAL PUBLIC OFFERING | |||
Number of warrants in a unit | 1 | ||
Number of shares for each warrant | 1 | ||
Exercise price of warrants | $ 11.50 | ||
Threshold trading days for redemption of public warrants | 30 days | ||
Months to complete acquisition | 12 months | 12 months | |
Public warrants expiration term | 5 years | ||
Over-allotment option | |||
INITIAL PUBLIC OFFERING | |||
Number of units sold | 1,500,000 |
PRIVATE PLACEMENT (Details)_2
PRIVATE PLACEMENT (Details) - USD ($) | 9 Months Ended | 12 Months Ended | ||
Nov. 12, 2021 | Nov. 08, 2021 | Sep. 30, 2023 | Dec. 31, 2022 | |
PRIVATE PLACEMENT | ||||
Underwriting fees | $ 1,955,000 | $ 1,955,000 | ||
Months to complete acquisition | 21 months | 18 months | ||
Obligation to redeem public shares if entity does not complete a Business Combination (as a percent) | 100% | |||
Private Placement | Private Placement Warrants | ||||
PRIVATE PLACEMENT | ||||
Number of warrants to purchase shares issued | 557,000 | |||
Price of warrants | $ 10 | |||
Aggregate purchase price | $ 5,570,000 | $ 3,680,000 | ||
Receivable recorded from the sale of private placement warrants | 1,890,000 | |||
Underwriting fees | $ 0 | |||
Months to complete acquisition | 21 months | 18 months | ||
Obligation to redeem public shares if entity does not complete a Business Combination (as a percent) | 100% | 100% |
RELATED PARTY TRANSACTIONS - _2
RELATED PARTY TRANSACTIONS - Founder Shares (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Jun. 07, 2021 | Mar. 31, 2023 | Dec. 31, 2021 | Dec. 31, 2022 | Oct. 20, 2022 | Oct. 31, 2021 | |
RELATED PARTY TRANSACTIONS | ||||||
Aggregate purchase price | $ 214,200 | $ 25,000 | $ 284,424 | |||
Common stock, shares outstanding (in shares) | 4,156,123 | |||||
Founder shares | Sponsor | ||||||
RELATED PARTY TRANSACTIONS | ||||||
Number of shares issued | 4,312,500 | |||||
Aggregate purchase price | $ 25,000 | |||||
Shares subject to forfeiture | 1,437,500 | |||||
Common stock, shares outstanding (in shares) | 2,875,000 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||||||
Nov. 12, 2021 | Nov. 08, 2021 | Nov. 03, 2021 | Jun. 07, 2021 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Aug. 17, 2023 | May 05, 2023 | Jan. 18, 2023 | Nov. 26, 2022 | Oct. 26, 2022 | |
RELATED PARTY TRANSACTIONS | |||||||||||||||
Repayment of promissory note - related party | $ 602,720 | ||||||||||||||
Advance from related party for expenses incurred on behalf of company | $ 402,936 | ||||||||||||||
Advances from related parties | $ 138,937 | $ 138,937 | 43,900 | $ 43,900 | |||||||||||
Proceeds held in trust account used to repay working capital loans | 0 | 0 | |||||||||||||
Total expenses incurred | $ 402,936 | ||||||||||||||
Due to related parties included in accrued expenses | 31,650 | 31,650 | 73,850 | ||||||||||||
Unsecured promissory note | SCS Capital Partners LLC | |||||||||||||||
RELATED PARTY TRANSACTIONS | |||||||||||||||
Aggregate principal amount | $ 250,000 | ||||||||||||||
Promissory note | SCS Capital Partners LLC | |||||||||||||||
RELATED PARTY TRANSACTIONS | |||||||||||||||
Maximum borrowing capacity of related party promissory note | $ 565,000 | ||||||||||||||
Aggregate principal amount | $ 200,000 | ||||||||||||||
Interest rate (in percent) | 10% | ||||||||||||||
Working capital loans | |||||||||||||||
RELATED PARTY TRANSACTIONS | |||||||||||||||
Advances from related parties | 0 | 0 | 0 | 0 | |||||||||||
Promissory Note with Related Party | |||||||||||||||
RELATED PARTY TRANSACTIONS | |||||||||||||||
Maximum borrowing capacity of related party promissory note | $ 625,000 | ||||||||||||||
Repayment of promissory note - related party | $ 602,720 | $ 602,720 | |||||||||||||
Aggregate principal amount | $ 350,000 | ||||||||||||||
Promissory Note with Related Party | Sponsor | |||||||||||||||
RELATED PARTY TRANSACTIONS | |||||||||||||||
Aggregate principal amount | $ 350,000 | ||||||||||||||
Promissory Note with Related Party | SCS Capital Partners LLC | Promissory note | |||||||||||||||
RELATED PARTY TRANSACTIONS | |||||||||||||||
Aggregate principal amount | $ 565,000 | ||||||||||||||
Interest rate (in percent) | 0% | ||||||||||||||
Administrative Services Agreement | |||||||||||||||
RELATED PARTY TRANSACTIONS | |||||||||||||||
Expenses per month | $ 10,000 | ||||||||||||||
Total expenses incurred | $ 30,000 | $ 30,000 | $ 90,000 | $ 90,000 | 20,000 | 120,000 | |||||||||
Due to related parties included in accrued expenses | $ 10,000 | $ 10,000 | $ 10,000 | $ 10,550 |
COMMITMENTS (Details)_2
COMMITMENTS (Details) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2023 | Dec. 31, 2022 | Nov. 03, 2021 item | |
COMMITMENTS | |||
Maximum number of demands for registration of securities | 2 | ||
Deferred underwriting commission, as a percent | 3.8 | 3.8 |
COMMITMENTS - Additional info_2
COMMITMENTS - Additional information (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||
May 05, 2023 USD ($) $ / shares shares | Mar. 31, 2023 USD ($) shares | Jan. 18, 2023 USD ($) shares | Oct. 06, 2022 USD ($) instrument $ / shares shares | Sep. 30, 2023 USD ($) $ / shares shares | Mar. 31, 2023 shares | Sep. 30, 2023 USD ($) $ / shares D shares | Dec. 31, 2022 USD ($) $ / shares D shares | |
COMMITMENTS AND CONTINGENCIES | ||||||||
Exercise price of warrants | $ / shares | $ 11.50 | $ 11.50 | $ 11.50 | |||||
Number of shares for each warrant | shares | 1 | 1 | 1 | |||||
Interest expense | $ 125,980 | |||||||
Amount of proceeds received | 800,000 | |||||||
Amount of direct cost attributable to the financing | $ 10,000 | $ 61,800 | ||||||
Exercise period | 5 years | 5 years | 5 years | |||||
PIPE Forward Contract Derivative | $ 170,666 | |||||||
Bridge Warrants | ||||||||
COMMITMENTS AND CONTINGENCIES | ||||||||
Warrants outstanding | $ 2,461 | $ 8,552 | ||||||
Net of offering cost | 82 | $ 613 | ||||||
Bridge Securities Purchase Agreement | ||||||||
COMMITMENTS AND CONTINGENCIES | ||||||||
Number of shares issued | shares | 30,000 | |||||||
Warrants outstanding | 76,102 | $ 284,424 | ||||||
Net of offering cost | 2,542 | $ 20,376 | ||||||
Percentage of unpaid principal payable on closing of PIPE financing | 110% | |||||||
Amortizable Discount | 175,472 | $ 443,665 | ||||||
Amount of financing costs | 56,993 | $ 40,811 | ||||||
Bridge Securities Purchase Agreement | Bridge Warrants | ||||||||
COMMITMENTS AND CONTINGENCIES | ||||||||
Exercise price of warrants | $ / shares | $ 11.50 | |||||||
Number of warrants in a unit | shares | 173,913 | |||||||
Number of shares for each warrant | shares | 1 | |||||||
Relative value attributed to the Bridge Shares | 78,349 | $ 304,800 | ||||||
Originally issued discount | 50,000 | 88,889 | ||||||
Relative value attributed to the Bridge Warrants | 40,130 | $ 9,165 | ||||||
Exercise period | 5 years | |||||||
Bridge Notes | ||||||||
COMMITMENTS AND CONTINGENCIES | ||||||||
Interest expense | $ 133,139 | $ 399,415 | ||||||
Bridge Notes | Bridge Securities Purchase Agreement | ||||||||
COMMITMENTS AND CONTINGENCIES | ||||||||
Number of instruments for which relative fair value basis used | instrument | 3 | |||||||
Fair value of PIPE Forward Contract | $ 278,404 | |||||||
Aggregate principal amount | $ 2,222,222 | |||||||
Interest rate (in percent) | 10% | |||||||
Percentage of guaranteed purchase commitment | 10% | |||||||
Amount net of unamortized debt discount | 692,216 | 692,216 | 292,800 | |||||
Amortized debt discount | 332,749 | 104,953 | ||||||
Accrued interest | 66,666 | 66,666 | 21,027 | |||||
Interest expense | 399,415 | $ 125,980 | ||||||
Principal due | $ 610,485 | |||||||
Amount of proceeds received | 738,200 | |||||||
Amount of direct cost attributable to the financing | 61,800 | |||||||
Aggregate principal amount | 2,222,222 | |||||||
Amount allocated | $ 888,889 | |||||||
Bridge Notes | Bridge Securities Purchase Agreement | Bridge Warrants | ||||||||
COMMITMENTS AND CONTINGENCIES | ||||||||
Original issue discount (in percent) | 10% | |||||||
Percentage of issue discount on loan | 10% | |||||||
Investor Note | ||||||||
COMMITMENTS AND CONTINGENCIES | ||||||||
Interest expense | 51,368 | 82,773 | ||||||
Investor Note | Bridge Securities Purchase Agreement | ||||||||
COMMITMENTS AND CONTINGENCIES | ||||||||
Fair value of PIPE Forward Contract | $ 71,755 | |||||||
Original issue discount (in percent) | 16.67% | |||||||
Percentage of unpaid principal due and payable if PIPE Financing closes in connection with the closing of the Business Combination | 110% | |||||||
Percentage of unpaid principal due and payable if PIPE Financing closes in connection with the closing of the Business Combination | 10% | |||||||
Aggregate principal amount | $ 300,000 | |||||||
Interest rate (in percent) | 10% | |||||||
Amount net of unamortized debt discount | 182,799 | 182,799 | ||||||
Amortized debt discount | 70,676 | |||||||
Accrued interest | 12,097 | 12,097 | ||||||
Interest expense | $ 82,773 | |||||||
Principal due | $ 228,245 | |||||||
Amount of proceeds received | 240,000 | |||||||
Amount of direct cost attributable to the financing | $ 10,000 | |||||||
Exercise period | 5 years | |||||||
Number of warrants to purchase shares issued | shares | 26,086 | |||||||
VSee and iDoc | ||||||||
COMMITMENTS AND CONTINGENCIES | ||||||||
Percentage of common stock issued as consideration | 100% | 100% | 100% | |||||
Equity value of acquiree | 110,000,000 | $ 110,000,000 | $ 110,000,000 | |||||
Business Combination Agreement | ||||||||
COMMITMENTS AND CONTINGENCIES | ||||||||
Minimum net tangible assets upon closing | $ 5,000,001 | |||||||
Business Combination Agreement | Vsee Health Incentive Plan | ||||||||
COMMITMENTS AND CONTINGENCIES | ||||||||
Percentage of shares reserved for issuance | 15% | 15% | ||||||
Business Combination Agreement | iDoc | ||||||||
COMMITMENTS AND CONTINGENCIES | ||||||||
Percentage of common stock issued as consideration | 100% | 100% | ||||||
Numerator for calculation of closing consideration | $ 49,500,000 | $ 49,500,000 | $ 49,500,000 | |||||
Business Combination Agreement | Vsee | ||||||||
COMMITMENTS AND CONTINGENCIES | ||||||||
Exercise price of stock options | $ / shares | 10 | 10 | 10 | |||||
Numerator for calculation of closing consideration | $ 60,500,000 | $ 60,500,000 | $ 60,500,000 | |||||
Closing consideration, multiplication factor for calculation of amount of stock option exercisable | $ / shares | $ 10 | $ 10 | ||||||
PIPE Securities Purchase Agreement | PIPE Investors | ||||||||
COMMITMENTS AND CONTINGENCIES | ||||||||
Exercise price of warrants | $ / shares | $ 12.50 | 12.50 | 12.50 | |||||
Conversion price of convertible notes | $ / shares | $ 10 | $ 10 | $ 10 | |||||
Minimum aggregate purchase price of additional offering | $ 10,000,000 | $ 10,000,000 | $ 10,000,000 | |||||
Minimum gross proceeds of Notes to be paid in cash for consummation of subsequent placements | $ 5,000,000 | $ 5,000,000 | $ 5,000,000 | |||||
Percentage of additional offering securities in additional offerings | 100% | 100% | ||||||
Percentage of offered securities in subsequent placements | 25% | 25% | ||||||
Lock-up period (in months) | 8 months | 8 months | ||||||
Stock price trigger | $ / shares | $ 12.50 | $ 12.50 | ||||||
Agreement number of consecutive trading days | D | 20 | 20 | ||||||
Exercise period | 5 years | 5 years | 5 years | |||||
Debt Instrument, Convertible, Conversion Price | $ / shares | $ 10 | $ 10 | $ 10 | |||||
PIPE Registration Rights Agreement | ||||||||
COMMITMENTS AND CONTINGENCIES | ||||||||
Minimum percentage of shares issuable upon conversion of PIPE shares and warrants | 200% | 200% | 200% | |||||
Threshold number of days to file a registration statement | 30 days | 30 days | ||||||
Threshold days for registration statement to be effective | 90 days | 90 days | ||||||
Threshold days for registration statement to be effective if undergone review | 120 days | 120 days | ||||||
Backstop Agreement | ||||||||
COMMITMENTS AND CONTINGENCIES | ||||||||
Aggregate purchase price | $ 15,000,000 | |||||||
Backstop Agreement | Maximum | ||||||||
COMMITMENTS AND CONTINGENCIES | ||||||||
Number of warrants to purchase shares issued | shares | 106,000 | |||||||
Additional PIPE financing | $ 7,000,000 | |||||||
Aggregate purchase price | $ 2,000,000 | |||||||
Vsee Common Stock | Business Combination Agreement | Vsee | ||||||||
COMMITMENTS AND CONTINGENCIES | ||||||||
Percentage of common stock issued as consideration | 100% | 100% | ||||||
Commitment shares | Investor Note | Bridge Securities Purchase Agreement | ||||||||
COMMITMENTS AND CONTINGENCIES | ||||||||
Number of shares issued | shares | 7,000 | |||||||
Common Stock | ||||||||
COMMITMENTS AND CONTINGENCIES | ||||||||
Number of shares issued | shares | 20,000 | |||||||
Common Stock | Investor Note | Bridge Securities Purchase Agreement | ||||||||
COMMITMENTS AND CONTINGENCIES | ||||||||
Exercise price of warrants | $ / shares | $ 11.50 | |||||||
Series A Preferred Stock | PIPE Securities Purchase Agreement | ||||||||
COMMITMENTS AND CONTINGENCIES | ||||||||
Aggregate purchase price | $ 8,000,000 | $ 8,000,000 | ||||||
Maximum number of shares issuable | shares | 15,000 | |||||||
PIPE Forward Contract Derivative | $ 3,146,694 | $ 3,146,694 | ||||||
Number of warrants to purchase shares issued | shares | 424,000 | 424,000 | 424,000 | |||||
Series A Preferred Stock | PIPE Securities Purchase Agreement | PIPE Investors | ||||||||
COMMITMENTS AND CONTINGENCIES | ||||||||
Number of shares issued | shares | 8,000 | 8,000 | ||||||
Series A Preferred Stock | Backstop Agreement | ||||||||
COMMITMENTS AND CONTINGENCIES | ||||||||
Number of preferred stock converted to into common stock | shares | 234,260 | |||||||
Number of Shares to be Issued | shares | 7,000 | |||||||
Series A Preferred Stock | Backstop Agreement | Maximum | ||||||||
COMMITMENTS AND CONTINGENCIES | ||||||||
Number of Shares to be Issued | shares | 2,000 | 2,000 | ||||||
Series B Preferred Stock | Securities Purchase Agreement | ||||||||
COMMITMENTS AND CONTINGENCIES | ||||||||
Number of shares issued | shares | 4,370 | 4,370 | ||||||
Deferred underwriting fee considered for purchase price of shares | $ 4,370,000 | $ 4,370,000 | $ 4,370,000 |
STOCKHOLDERS' DEFICIT - Commo_2
STOCKHOLDERS' DEFICIT - Common Shares (Details) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||
May 05, 2023 shares | Oct. 06, 2022 shares | Jun. 07, 2021 USD ($) shares | Feb. 28, 2023 shares | Mar. 31, 2023 USD ($) shares | Sep. 30, 2023 Vote $ / shares shares | Dec. 31, 2021 USD ($) $ / shares shares | Dec. 31, 2022 USD ($) Vote $ / shares shares | Oct. 20, 2022 shares | Nov. 08, 2021 shares | Oct. 31, 2021 shares | |
STOCKHOLDERS' DEFICIT | |||||||||||
Common stock, shares authorized (in shares) | 50,000,000 | 50,000,000 | |||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | |||||||||
Aggregate purchase price | $ | $ 214,200 | $ 25,000 | $ 284,424 | ||||||||
Common stock, shares outstanding (in shares) | 4,156,123 | ||||||||||
Common stock, shares issued (in shares) | 10,805,877 | ||||||||||
Common stock, votes per share | Vote | 1 | 1 | |||||||||
Months to complete acquisition | 21 months | 18 months | |||||||||
Redemption period upon closure | 10 days | 10 days | |||||||||
Obligation to redeem public shares if entity does not complete a Business Combination (as a percent) | 100% | ||||||||||
Common Stock | |||||||||||
STOCKHOLDERS' DEFICIT | |||||||||||
Number of shares issued | 7,000 | 30,000 | 20,000 | 20,000 | 2,875,000 | 30,000 | |||||
Aggregate purchase price | $ | $ 2 | $ 288 | $ 3 | ||||||||
Private Placement | |||||||||||
STOCKHOLDERS' DEFICIT | |||||||||||
Common stock, shares issued (in shares) | 557,000 | 557,000 | |||||||||
Sponsor | |||||||||||
STOCKHOLDERS' DEFICIT | |||||||||||
Obligation to redeem public shares if entity does not complete a Business Combination (as a percent) | 100% | 100% | |||||||||
Founder shares | Sponsor | |||||||||||
STOCKHOLDERS' DEFICIT | |||||||||||
Number of shares issued | 4,312,500 | ||||||||||
Aggregate purchase price | $ | $ 25,000 | ||||||||||
Shares subject to forfeiture | 1,437,500 | ||||||||||
Common stock, shares outstanding (in shares) | 2,875,000 | ||||||||||
Common stock subject to possible redemption | |||||||||||
STOCKHOLDERS' DEFICIT | |||||||||||
Common stock subject to possible redemption, issued (in shares) | 694,123 | 11,500,000 | 694,123 | ||||||||
Common Stock Not Subject to Possible Redemption | |||||||||||
STOCKHOLDERS' DEFICIT | |||||||||||
Common stock, shares authorized (in shares) | 50,000,000 | 50,000,000 | |||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | |||||||||
Common stock, shares outstanding (in shares) | 3,489,000 | 3,462,000 | |||||||||
Common stock, shares issued (in shares) | 3,489,000 | 3,462,000 |
WARRANTS (Details)_2
WARRANTS (Details) | 9 Months Ended | 12 Months Ended | |||
May 05, 2023 $ / shares shares | Oct. 06, 2022 $ / shares shares | Sep. 30, 2023 D Vote $ / shares shares | Dec. 31, 2022 D Vote $ / shares shares | Dec. 31, 2021 shares | |
WARRANTS | |||||
Warrants issued | 12,057,000 | 12,057,000 | |||
Warrants outstanding | 12,057,000 | 12,057,000 | |||
Number of shares for each warrant | 1 | 1 | |||
Exercise price | $ / shares | $ 11.50 | $ 11.50 | |||
Warrant exercise period condition one | 30 days | 30 days | |||
Warrant exercise period condition two | 12 months | 12 months | |||
Warrants exercisable for cash | 0 | 0 | |||
Number of trading days to calculate fair market value of warrants | D | 5 | 5 | |||
Public warrants expiration term | 5 years | 5 years | |||
Warrant redemption condition minimum share price | $ / shares | $ 18 | $ 18 | |||
Share price trigger used to measure dilution of warrant | $ / shares | $ 9.20 | $ 9.20 | |||
Percentage of gross new proceeds to total equity proceeds used to measure dilution of warrant | 60 | 60 | |||
Warrant exercise price adjustment multiple | 115 | 115 | |||
Warrant redemption price adjustment multiple | 180 | 180 | |||
Common stock, votes per share | Vote | 1 | 1 | |||
Warrant exercise restriction threshold | 9.8 | 9.8 | |||
Fractional shares issued | 0 | 0 | |||
Private Placement Warrants | |||||
WARRANTS | |||||
Warrants outstanding | 12,256,999 | 12,230,913 | |||
Redemption price per public warrant (in dollars per share) | $ / shares | $ 0.01 | ||||
Redemption period | 30 days | ||||
Warrant redemption condition minimum share price | $ / shares | $ 18 | ||||
Threshold trading days for redemption of public warrants | 20 days | ||||
Threshold consecutive trading days for redemption of public warrants | D | 30 | ||||
Bridge Warrants | Bridge Securities Purchase Agreement | |||||
WARRANTS | |||||
Number of shares for each warrant | 1 | ||||
Exercise price | $ / shares | $ 11.50 | ||||
Public warrants expiration term | 5 years | ||||
Number of warrants in a unit | 173,913 | ||||
Minimum percentage of increase or decrease in in aggregate number of shares of Common Stock purchasable upon exercise of all Bridge Warrants for adjustment in the number of shares of Common Stock receivable upon exercise of the Bridge Warrant | 0.10% | ||||
Investor Note Warrants | Bridge Securities Purchase Agreement | |||||
WARRANTS | |||||
Exercise price | $ / shares | $ 11.50 | ||||
Public warrants expiration term | 5 years | ||||
Number of warrants in a unit | 26,086 | ||||
Minimum percentage of increase or decrease in in aggregate number of shares of Common Stock purchasable upon exercise of all Bridge Warrants for adjustment in the number of shares of Common Stock receivable upon exercise of the Bridge Warrant | 0.10% |
FAIR VALUE MEASUREMENTS - Add_2
FAIR VALUE MEASUREMENTS - Additional information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Nov. 08, 2021 | Mar. 31, 2021 | Sep. 30, 2023 | Sep. 30, 2023 | Dec. 31, 2021 | Dec. 31, 2022 | |
FAIR VALUE MEASUREMENTS | ||||||
Assets held in trust account | $ 8,119,642 | $ 8,119,642 | $ 116,726,978 | $ 7,527,369 | ||
Amount withdrew from Trust Account | 59,586 | $ 59,586 | ||||
Redemption of common stock | $ 110,472,254 | |||||
Number of shares redeemed | 10,805,877 | 10,805,877 | 10,805,877 | |||
Transfers between Level 1 and Level 2 | $ 0 | 0 | $ 0 | 0 | $ 0 | |
Transfers between Level 2 and Level 1 | 0 | 0 | 0 | 0 | 0 | |
Transfers in of level 3 | 0 | 0 | 0 | 0 | ||
Transfers Out of level 3 | $ 0 | 0 | $ 0 | 0 | ||
Money Market Funds | ||||||
FAIR VALUE MEASUREMENTS | ||||||
Assets held in trust account | $ 8,119,642 | $ 8,119,642 | $ 7,527,369 |
FAIR VALUE MEASUREMENTS (Deta_2
FAIR VALUE MEASUREMENTS (Details) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Level 1 | Money Market Funds | ||
FAIR VALUE MEASUREMENTS | ||
Fair Value | $ 8,119,642 | $ 7,527,369 |
FAIR VALUE MEASUREMENTS - Fai_3
FAIR VALUE MEASUREMENTS - Fair value information on recurring basis (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
FAIR VALUE MEASUREMENTS | ||
PIPE Forward Contract Derivative | $ 170,666 | |
Bifurcated Derivative | 364,711 | |
Investor Note | ||
FAIR VALUE MEASUREMENTS | ||
Bifurcated Derivative | $ 22,805 | |
Bridge Notes | ||
FAIR VALUE MEASUREMENTS | ||
Bifurcated Derivative | 241,447 | 364,711 |
Level 1 | ||
FAIR VALUE MEASUREMENTS | ||
PIPE Forward Contract Derivative | 0 | |
Level 1 | Investor Note | ||
FAIR VALUE MEASUREMENTS | ||
Bifurcated Derivative | 0 | |
Level 1 | Bridge Notes | ||
FAIR VALUE MEASUREMENTS | ||
Bifurcated Derivative | 0 | 0 |
Level 2 | ||
FAIR VALUE MEASUREMENTS | ||
PIPE Forward Contract Derivative | 0 | |
Level 2 | Investor Note | ||
FAIR VALUE MEASUREMENTS | ||
Bifurcated Derivative | 0 | |
Level 2 | Bridge Notes | ||
FAIR VALUE MEASUREMENTS | ||
Bifurcated Derivative | 0 | 0 |
Level 3 | ||
FAIR VALUE MEASUREMENTS | ||
PIPE Forward Contract Derivative | 170,666 | |
Bifurcated Derivative | 364,711 | |
Level 3 | Investor Note | ||
FAIR VALUE MEASUREMENTS | ||
Bifurcated Derivative | 22,805 | |
Level 3 | Bridge Notes | ||
FAIR VALUE MEASUREMENTS | ||
Bifurcated Derivative | $ 241,447 | $ 364,711 |
FAIR VALUE MEASUREMENTS - Chang
FAIR VALUE MEASUREMENTS - Changes in the fair value of financial liabilities (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2023 | |
PIPE Forward Contract | ||||
FAIR VALUE MEASUREMENTS | ||||
Fair value as of beginning | $ 700,506 | $ 1,334,616 | $ 170,666 | $ 170,666 |
Change in valuation inputs or other assumptions | (700,506) | (634,110) | 1,163,950 | |
Fair value as of ending | 700,506 | 1,334,616 | ||
Bridge Note - Bifurcated Derivative | ||||
FAIR VALUE MEASUREMENTS | ||||
Fair value as of beginning | 212,609 | 329,953 | 364,711 | 364,711 |
Change in valuation inputs or other assumptions | 28,838 | (117,344) | (34,758) | |
Fair value as of ending | 241,447 | 212,609 | $ 329,953 | 241,447 |
Investor Note - Bifurcated Derivative | ||||
FAIR VALUE MEASUREMENTS | ||||
Fair value as of beginning | 27,601 | |||
Change in valuation inputs or other assumptions | (4,796) | 3,099 | ||
Initial value of Investor Note - Bifurcated Derivative May 5, 2023 | 24,502 | |||
Fair value as of ending | $ 22,805 | $ 27,601 | $ 22,805 |
FAIR VALUE MEASUREMENTS - Mon_2
FAIR VALUE MEASUREMENTS - Monte Carlo simulation model for Bridge Note Bifurcate Derivative (Details) | 1 Months Ended | 9 Months Ended | 12 Months Ended | ||
Oct. 06, 2022 | Oct. 05, 2022 | Dec. 31, 2022 | Sep. 30, 2023 | Dec. 31, 2022 | |
FAIR VALUE MEASUREMENTS | |||||
Probability of completing a business combination | 90% | 95% | |||
Probability of completing a business combination by December 31, 2023 | |||||
FAIR VALUE MEASUREMENTS | |||||
Probability of completing a business combination | 80% | ||||
Level 3 | |||||
FAIR VALUE MEASUREMENTS | |||||
CCC bond rates | 14.09% | 15.09% | 13.31% | 15.09% | |
Probability of early termination/repayment -business combination not completed | 10% | 5% | 5% | 5% | |
Probability of early termination/repayment -business combination completed or PIPE completed | 90% | 95% | 80% | 95% | |
Level 3 | Probability of completing a business combination by March 31, 2023 | |||||
FAIR VALUE MEASUREMENTS | |||||
Probability of completing a business combination | 50% | 50% | 50% | ||
Level 3 | Probability of completing a business combination by June 30, 2023 | |||||
FAIR VALUE MEASUREMENTS | |||||
Probability of completing a business combination | 50% | 50% | 50% | ||
Level 3 | Probability of completing a business combination by December 31, 2023 | |||||
FAIR VALUE MEASUREMENTS | |||||
Probability of completing a business combination | 80% |
FAIR VALUE MEASUREMENTS - Inves
FAIR VALUE MEASUREMENTS - Investor Note Bifurcated Derivative and PIPE Forward Contract (Details) | 1 Months Ended | 9 Months Ended | 12 Months Ended | ||
May 05, 2023 | Oct. 06, 2022 | Dec. 31, 2022 | Sep. 30, 2023 | Dec. 31, 2022 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Risk-free interest rate | 5.12% | 4% | 4.76% | 5.53% | |
Expected term (years) | 4 months 17 days | 7 months 9 days | 4 months 13 days | 3 months | |
Probability of completing a business combination | 90% | 95% | |||
PIPE Forward Contract | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Risk-free interest rate | 4.76% | ||||
Expected term (years) | 4 months 13 days | ||||
Probability of completing a business combination | 95% | ||||
Probability of completing a business combination by September 30, 2023 | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Probability of completing a business combination | 75% | 20% | |||
Probability of completing a business combination by December 31, 2023 | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Probability of completing a business combination | 80% | ||||
Probability of completing a business combination by August 30, 2023 | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Probability of completing a business combination | 25% |
FAIR VALUE MEASUREMENTS - Fai_4
FAIR VALUE MEASUREMENTS - Fair value of the Level 3 financial liabilities (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended |
Dec. 31, 2022 | Sep. 30, 2023 | Dec. 31, 2022 | |
FAIR VALUE MEASUREMENTS | |||
Change in fair value | $ 86,307 | ||
Bridge Note - Bifurcated Derivative | |||
FAIR VALUE MEASUREMENTS | |||
Fair value, Initial measurement at the beginning | $ 364,711 | ||
Change in fair value | (123,265) | ||
Fair value, Initial measurement at the ending | $ 364,711 | 241,447 | 364,711 |
Investor Note - Bifurcated Derivative | |||
FAIR VALUE MEASUREMENTS | |||
Initial value of Investor Note - Bifurcated Derivative May 5, 2023 | 24,502 | ||
Change in fair value | (1,697) | ||
Fair value, Initial measurement at the ending | 22,805 | ||
PIPE Forward Contract | |||
FAIR VALUE MEASUREMENTS | |||
Fair value, Initial measurement at the beginning | 170,666 | ||
Change in fair value | 170,666 | $ (170,666) | |
Fair value, Initial measurement at the ending | $ 170,666 | $ 170,666 |
SUBSEQUENT EVENTS (Details)_2
SUBSEQUENT EVENTS (Details) | Nov. 08, 2023 item | Nov. 06, 2023 USD ($) item $ / shares shares | Aug. 01, 2023 | Oct. 20, 2022 item | Sep. 30, 2023 $ / shares | Aug. 17, 2023 USD ($) | Dec. 31, 2022 $ / shares | Nov. 26, 2022 USD ($) | Dec. 31, 2021 $ / shares |
SUBSEQUENT EVENTS | |||||||||
Number of extensions to consummate a business combination | item | 3 | ||||||||
Extension period to consummate a business combination | 3 months | 3 months | |||||||
Aggregate extension period to consummate a business combination | 9 months | ||||||||
Common stock subject to possible redemption | |||||||||
SUBSEQUENT EVENTS | |||||||||
Redemption price per share | $ / shares | $ 11.37 | $ 10.65 | $ 10.15 | ||||||
Promissory Note with Related Party | |||||||||
SUBSEQUENT EVENTS | |||||||||
Aggregate principal amount | $ | $ 350,000 | ||||||||
Promissory note | SCS Capital Partners LLC | Promissory Note with Related Party | |||||||||
SUBSEQUENT EVENTS | |||||||||
Aggregate principal amount | $ | $ 565,000 | ||||||||
Interest rate (in percent) | 0% | ||||||||
Subsequent Event | |||||||||
SUBSEQUENT EVENTS | |||||||||
Number of extensions to consummate a business combination | item | 4 | ||||||||
Extension period to consummate a business combination | 3 months | 3 months | |||||||
Aggregate extension period to consummate a business combination | 12 months | 12 months | |||||||
Term by which the period to consummate initial business combination extended | 3 months | ||||||||
Subsequent Event | Common stock subject to possible redemption | |||||||||
SUBSEQUENT EVENTS | |||||||||
Number of shares redeemed | shares | 579,157 | ||||||||
Value of shares redeemed | $ | $ 6,800,000 | ||||||||
Redemption price per share | $ / shares | $ 11.73 | ||||||||
Subsequent Event | Maximum | |||||||||
SUBSEQUENT EVENTS | |||||||||
Number of extensions to consummate a business combination | item | 4 | 4 |