Related Party Transactions

3 Months Ended

Mar. 31, 2024

Related Party Transactions [Abstract]

Related Party Transactions

Note 5 — Related Party Transactions

Founder Shares

During August 2020, the Company issued 5,031,250 shares of Common Stock to the Sponsor for $25,000 in cash, or approximately $0.005 per share, in connection with formation (the “founder shares”). On December 21, 2020, the Sponsor surrendered an aggregate of 1,293,750 shares of Class B common stock for no consideration, which were cancelled, resulting in an aggregate of 3,737,500 shares of Class B common stock outstanding including up to 487,500 shares which were subject to forfeiture to the extent that the underwriters’ over-allotment was not exercised in full or in part. As a result of the underwriters’ election to fully exercise of their over-allotment option on January 20, 2021, the 487,500 shares are no longer subject to forfeiture.

The Sponsor has agreed not to transfer, assign or sell its founder shares until the earlier to occur of (A) one year after the completion of the Company’s initial business combination or (B) subsequent to the Company’s initial business combination, (x) if the last sale price of the Company’s Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the Company’s initial business combination, or (y) the date on which the Company completes a liquidation, merger, capital stock exchange or other similar transaction that results in all of its stockholders having the right to exchange their shares of Common Stock for cash, securities or other property.

On January 11, 2024, the Sponsor converted an aggregate of 300,000 shares of the Company’s Class B common stock into shares of Class A common stock on a one-for-one basis. The Sponsor waived any right to receive funds from the trust account with respect to the shares of Class A common stock received upon such conversion and acknowledged that such shares will be subject to all of the restrictions applicable to the original shares of Class B common stock under the terms of that certain letter agreement, dated as of January 14, 2021, by and among, the Company, its officers and directors and the Sponsor.

Promissory Note — Related Party

On July 28, 2020, the Company issued an unsecured promissory note to the Sponsor for an aggregate of up to $300,000 to cover expenses related to the IPO (the “2020 Note”). The 2020 Note was non-interest bearing and payable on the earlier of June 30, 2021 or the completion of the IPO. At December 31, 2020, the Company had drawn $141,451 under the 2020 Note. During the period from January 1, 2021 to January 18, 2021, the Company had additional borrowings of $10,800 under the 2020 Note. On January 20, 2021, the Company paid the full $152,251 balance on the 2020 Note from the proceeds of the IPO, and the 2020 Note is no longer available to be drawn upon.

Related Party Loans

In order to finance transaction costs in connection with an initial 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 (the “Working Capital Loans”). If the Company completes an initial business combination, the Company would 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 an initial business combination does not close, the Company may use a portion of the working capital held outside the trust account to repay the Working Capital Loans but no proceeds from the trust account would be used to repay the Working Capital Loans.

On December 14, 2021, the Company issued a promissory note in the principal amount of up to $1,500,000 to the Sponsor (the “2021 Note”). The 2021 Note was issued in connection with advances the Sponsor has made, and may make in the future, to the Company for working capital expenses. At the election of the Sponsor, all or a portion of the unpaid principal amount of the 2021 Note may be converted into warrants of the Company at a price of $1.00 per warrant (the “Conversion Warrants”). The Conversion Warrants and their underlying securities are entitled to the registration rights set forth in the 2021 Note. As of March 31, 2024 and December 31, 2023, $1,500,000 was outstanding under the 2021 Note.

Related Party Extension Loans

On July 15, 2022, the board elected to extend the date by which the Company has to consummate a business combination from July 20, 2022 to January 20, 2023, as permitted under the Company’s amended and restated certificate of incorporation. In connection with this extension, on July 20, 2022, Sponsor deposited an aggregate of $747,500 (“2022 Note”) (representing $0.05 per public share) into the Company’s trust account. This extension provided the Company with additional time to complete its initial business combination. The 2022 Note may be settled in whole warrants to purchase Class A common stock of the Company at a conversion price equal to $1.00 per warrant. The loan will not bear any interest and will be repayable to OCA Acquisition Holdings LLC upon the earlier of the date on which the Company consummates an initial business combination and the date that the winding up of the Company is effective. As of March 31, 2024, and December 31, 2023, there was $747,500 outstanding under the 2022 Note.

On January 19, 2023, the Company issued the 2023 Note, a promissory note in the principal amount of up to $1,080,000. The 2023 Note does not bear interest and matures upon closing of the initial business combination. In the event that the Company does not consummate an initial business combination, the 2023 Note will be repaid only from funds held outside of the trust account or will be forfeited, eliminated or otherwise forgiven. At the election of the Sponsor, all or a portion of the unpaid principal amount of the 2023 Note may be converted into warrants of the Company at a price of $1.00 per warrant. Pursuant to the Charter, the Sponsor deposited $270,000 into the trust account in order for the time available for the Company to consummate the initial business combination to be extended. Following April 20, 2023, the board approved all nine monthly extensions of the deadline to complete an initial business combination, extending the deadline to January 20, 2024 and drew an aggregate of $1,080,000 pursuant to the 2023 Note. As of March 31, 2024 and December 31, 2023, there was $1,080,000 outstanding under the 2023 Note.

Concurrently with the execution of the Business Combination Agreement, the Company entered into a subscription agreement (the “Insider Subscription Agreement”) with the Sponsor. Pursuant to the Insider Subscription Agreement, the Sponsor agreed to subscribe for and purchase, and the Company agreed to issue and sell to the Sponsor, immediately prior to the Merger, an aggregate of 200,000 shares of Class A common stock for an aggregate purchase price of $2,000,000 (the “Insider PIPE Investment”). Upon Closing, each issued and outstanding share of common stock will be automatically cancelled, extinguished and converted into the right to receive one share of PSI Common Stock.

On January 11, 2024, the Company issued the 2024 Note, a promissory note in the principal amount of up to $1,080,000. The 2024 Note does not bear interest and matures upon closing of the initial business combination. In the event that the Company does not consummate an initial business combination, the 2024 Note will be repaid only from funds held outside of the trust account or will be forfeited, eliminated or otherwise forgiven. At the election of the Sponsor, all or a portion of the unpaid principal amount of the 2024 Note may be converted into warrants of the Company at a price of $1.00 per warrant. Pursuant to the Charter, Sponsor deposited $270,000 into the trust account in order to extend the time available for the Company to consummate its initial business combination. If the Company anticipates that it may not be able to consummate the initial business combination by May 20, 2024, and subject to Sponsor depositing additional funds into the trust account pursuant to the 2024 Note, the Company’s time to consummate a business combination shall be extended for up to an additional nine months until January 20, 2025. For each monthly extension, Sponsor will deposit $90,000 into the trust account.

On February 20, 2024, March 20, 2024 and April 19, 2024, the board approved draws of the Extension Funds pursuant to the 2024 Note, which Extension Funds the Company deposited into the Company’s trust account for its public stockholders on February 20, 2024, March 20, 2024 and April 19, 2024, respectively. These deposits enabled the Company to extend the date by which it must complete its initial business combination from February 20, 2024 to March 20, 2024, from March 20, 2024 to April 20, 2024 and from April 20, 2024 to May 20, 2024, respectively (the “Extensions”). The Extensions are the first three of eleven one-month extensions permitted under the Charter and provide the Company with additional time to complete its initial business combination. As of March 31, 2024 there was $270,000 outstanding under the 2024 Note.

In connection with the Company’s entry into the Business Combination Agreement, the Sponsor agreed to convert the (i) 2021 Note into Working Capital Warrants (as defined in the warrant agreement, (ii) the 2022 Note into Extension Warrants (as defined in the warrant agreement, and (iii) the 2023 Note and the 2024 Note into Post-IPO Warrants (as defined in the warrant agreement) if the Business Combination is consummated.

Administrative Service Fee  

Effective January 20, 2021, the Company agreed to pay an affiliate of the Company’s Sponsor a monthly fee of $15,000 for office space, utilities and secretarial and administrative support. The Company has ceased paying these monthly fees effective July 2023. For the three months ended March 31, 2024 and 2023, the Company incurred $0 and $45,000, respectively, in administrative service fees. At March 31, 2024 and December 31, 2023, the Company owed the Sponsor $90,000 for amounts under this administrative support services agreement. This amount has been recorded in due to related party.

For the three months ended March 31, 2024 and 2023, the Company incurred an additional $43,383 and $59,432 for shared service expenses from the Sponsor primarily relating to legal services, respectively. The Company has a $139,462 and $96,079 balance due to Sponsor at March 31, 2024 and December 31, 2023, respectively.

Advances from Sponsor

At March 31, 2024 and December 31, 2023, the Company has recorded a total of $1,757,780 and $1,477,780 in due to related party for advances from the Sponsor to cover expenses, respectively.