COMMITMENTS AND CONTINGENCIES

6 Months Ended

Jun. 30, 2024

Commitments and Contingencies (Note 6)

COMMITMENTS AND CONTINGENCIES

NOTE 6. COMMITMENTS AND CONTINGENCIES

Registration Rights

Pursuant to a registration rights agreement originally entered into on July 21, 2021, the holders of the Founder Shares, Private Placement Warrants and any warrants that may be issued upon conversion of the Working Capital Loans (and in each case holders of their component securities, as applicable) are entitled to registration rights requiring the Company to register such securities for resale (in the case of the Founder Shares, only after conversion to our Class A ordinary shares). The holders of the majority of these securities are entitled to make up to three demands, excluding short form demands, that the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the consummation of a Business Combination and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. The Company will bear the expenses incurred in connection with the filing of any such registration statements.

Underwriter’s Agreement

The Company granted the underwriters a 45-day option to purchase up to 3,600,000 additional Units to cover over-allotments at the Initial Public Offering price, less the underwriting discounts and commissions. On August 5, 2021, the underwriters partially exercised the over-allotment option to purchase an additional 1,911,379 Units and forfeited the option to exercise the remaining 1,688,621 Units.

The underwriters were paid a cash underwriting discount of 2.00% of the gross proceeds of the Initial Public Offering, or $5,182,275. In addition, the underwriters are entitled to a deferred fee of three and half percent (3.50%) of the gross proceeds of the Initial Public Offering, or $9,068,983.

On August 15, 2022, one of the underwriters waived its entitlement to the payment of any deferred fee to be paid under the terms of the underwriting agreement and is no longer serving in an advisor capacity. As a result, the Company recognized $298,484 of income and $6,231,184 was recorded to additional paid-in capital in relation to the reduction of the deferred underwriter fee. In June of 2023, the remaining underwriters waived their entitlement to the payment of any deferred fee to be paid under the terms of the underwriting agreement and is no longer serving in an advisor capacity. As a result, the Company recognized $352,969 of income and $2,186,346 was recorded to additional paid-in capital in relation to the reduction of the deferred underwriter fee. As of June 30, 2024 and December 31, 2023, the deferred underwriting fee payable was $0.

Non-Redemption Agreements

On July 14, 2023, July 17, 2023, July 18, 2023 and July 19, 2023, the Company and the Initial Sponsor entered into non-redemption agreements (each, a “Non-Redemption Agreement”) with certain unaffiliated third parties (each, a “Holder,” and collectively, the “Holders”) in exchange for the Holder or Holders agreeing either not to request redemption in connection with the First Extension Meeting or to reverse any previously submitted redemption demand in connection with the First Extension Meeting with respect to an aggregate of 2,166,667 Class A ordinary shares. In consideration of the Non-Redemption Agreements, immediately prior to, and substantially concurrently with, the closing of an initial Business Combination, (i) the Managing Sponsor (or its designees or transferees) has agreed to surrender and forfeit to the Company for no consideration an aggregate of approximately 0.6 million shares of the Company’s Class B ordinary shares, par value $0.0001 per share, held by the Managing Sponsor (the “Forfeited Shares”) and (ii) the Company shall issue to the Holders a number of Class A ordinary shares equal to those underlying the Forfeited Shares.

The Non-Redemption Agreements are accounted for under Topic 5T which concludes that the fair value of the shares transferred will be recorded within equity upon the date the shares are granted to the holder, which is the date a business combination is consummated.

In connection with the Second Extension Meeting, the Company and the Managing Sponsor entered into non-redemption agreements (“2024 Non-Redemption Agreements”) with one or more unaffiliated third-party shareholders of the Company in exchange for such shareholders agreeing to not redeem a to-be-determined number of Class A ordinary shares (“Non-Redeemed Shares”) at the Second Extension Meeting. In exchange for the foregoing commitment to the Company to not redeem the Non-Redeemed Shares, the Company anticipates agreeing to issue, or cause to be issued, to such shareholders, for every 200,000 Non-Redeemed Shares, 40,000 Class A ordinary shares for the first six months of extension, and 8,000 additional Class A ordinary shares for each additional month of extension, up to three additional months (such shares, the “Promote Shares”), upon closing of the initial business combination, and the Sponsor anticipates agreeing to surrender and forfeit, for no consideration, a number of Class B ordinary shares, par value $0.0001 per share, of the Company equal to the number of Promote Shares upon closing of the initial business combination.

The 2024 Non-Redemption Agreements shall terminate on the earlier of (i) the failure of the Company’s shareholders to approve the Second Extension Amendment Proposal at the Meeting, (ii) the Company’s determination not to proceed with the Second Extension, (iii) the fulfilment of all obligations of parties to the Non-Redemption Agreements, (iv) the liquidation or dissolution of the Company, (v) the mutual written agreement of the parties or (vi) if the applicable shareholder exercises its redemption rights with respect to any Non-Redeemed Shares in connection with the Meeting and such Non-Redeemed Shares are actually redeemed.

In connection with the 238,400 Class B ordinary shares the Sponsor agreed to transfer to the Investors on or promptly after the consummation of the Business Combination pursuant to the 2024 Non-Redemption Agreements, the Company estimated the aggregate fair value attributable to the Investors to be $2,042,132 or a weighted average of $8.57 per share, which is estimated by taking into considerations the estimated probability of the consummation of a Business Combination, estimated concessions and estimated cost of carrying charges to eliminate the investor’s exposure to changes in the price of their Class B Ordinary Shares. The excess of the fair value of the Class B Ordinary Shares was determined to be an offering cost in accordance with Staff Accounting Bulletin Topic 5A. In substance, the Company recognized the offering cost as a capital contribution by the Sponsor to induce the Investors not to redeem their Class A ordinary shares, with a corresponding charge to additional paid-in capital to recognize the fair value of the shares transferred as an offering cost.

CCM Engagement

On July 17, 2023, the Company entered into an engagement letter with J.V.B Financial Group, acting through its Cohen & Company Capital Markets division (“CCM”) to obtain capital markets advisory services in connection with seeking an extension for completing a business combination, capital market advisory services in connection with a possible business combination transaction with an unaffiliated third party (the “Target”) and to act as the Company’s placement agent in connection with raising capital. CCM would be entitled to an advisor fee of $2.0 million and a transaction fee of an amount equal to 5% of the sum of the gross proceeds raised from investors and received by the Company or Target plus proceeds released from the Trust Account with respect to any of the Class A ordinary shares that did not redeem such shares in connection with the extension or the business combination. If the gross proceeds raised from investors is $3,000,000 or less, the Company may elect to pay the portion of the fee related to the offering in the form of an equivalent dollar amount of Class A ordinary shares or equivalent equity of the post-business combination company, which shares shall be delivered four (4) business days following the closing of the sale transaction as determined by the Company. The shares, if issued, shall be duly authorized, validly issued, paid and non-assessable and shall be registered for resale under the Act, or otherwise freely tradeable, as of the delivery of the shares and will be delivered in book entry form in the name of and delivered to CCM (or its designee) four (4) business days following the closing of the transaction. In addition, up to 50% of the advisor fee may be paid in shares as described above in the case of gross proceeds raised from investors. Pursuant to the engagement letter, the advisor fee cannot be less than $1,000,000.

Subscription Agreement

On August 1, 2023, the Company entered into a Subscription Agreement (the “Subscription Agreement”) with an investor (the “Investor”) and the Managing Sponsor pursuant to which the parties agreed to the following:

● The Investor shall make a cash contribution to Managing Sponsor in an aggregate amount of $1,300,000 (the “Investor Capital Contribution”) as follows: (i) an initial tranche of $650,000, paid within five business days of the date of the Subscription Agreement, (ii) a second tranche of up to $325,000, to be paid following the Company’s announcement of executing an agreement for the Company’s initial Business Combination, and (iii) a third tranche of up to $325,000, to be paid after the Company files an initial registration statement with the Securities and Exchange Commission in relation to the Company’s initial Business Combination. At the request of the Managing Sponsor, the Investor may agree, in its sole discretion, to fund up to an additional $200,000 at any time.

● The Investor Capital Contribution will in turn be loaned by the Managing Sponsor to the Company to cover working capital expenses (the “SPAC Loan”). The SPAC Loan will not accrue interest and will be repaid by the Company upon the closing of the Company’s initial Business Combination (the “De-SPAC Closing”). The Managing Sponsor will pay to the Investor all repayments of the SPAC Loan the Managing Sponsor has received within five business days of the date of receipt. The Investor may elect at the De-SPAC Closing to receive such payments in cash or shares of Class A common stock of the Company (“Class A common stock”) at a rate of one share of Class A common stock for each $10 of the Investor Capital Contribution.

● In consideration of the Investor Capital Contribution, at the De-SPAC Closing the Company will issue to the Investor 0.9 shares of Class A Common Stock for each dollar of the Investor Capital Contribution funded by the Investor, which shares shall be subject to no transfer restrictions or any other lock-up provisions, earn outs, or other contingencies and shall be registered as part of any registration statement to be filed in connection with the De-SPAC Closing or, if no such registration statement is filed in connection with the De-SPAC Closing, pursuant to the first registration statement to be filed by the Company or the surviving entity following the De-SPAC Closing.

● If the Company liquidates without consummating a De-SPAC, any amounts remaining in the Managing Sponsor or the Company’s cash accounts, not including the Company’s trust account, will be paid to the Investor within five days of the liquidation.

● On the De-SPAC Closing, the Managing Sponsor will pay the Investor an amount equal to the reasonable attorney fees incurred by the Investor in connection with the Subscription Agreement not to exceed $5,000.

The Subscription Agreement is accounted for under ASC 470 which concludes that all proceeds received from issuance will be recorded as a liability, at par value, on the balance sheets. As of June 30, 2024 and December 31, 2023, the Subscription Agreement liability is $1,025,000 and $650,000 included on the balance sheets, respectively.

Business Combination Agreement

On February 6, 2024, the Company entered into a business combination agreement (the “Business Combination Agreement”) with RBio Energy Holdings Corp., a Delaware corporation and a wholly owned subsidiary of PC3 (“NewPubco”), Perception RBio Merger Sub, a Cayman Islands exempted company and a wholly owned subsidiary of NewPubco (“Merger Sub”), and RBio Energy Corporation, a Delaware corporation (“RBio Energy”).

Pursuant to the Business Combination Agreement, among other things, (i) the holders (whether one or more) of the common stock of RBio Energy (the “RBio Energy Stockholders”) will exchange all of their shares of common stock of RBio Energy (“RBio Common Stock”) for shares of common stock of NewPubco (the “Share Exchange”), as a result of which RBio Energy will become a direct wholly owned subsidiary of NewPubco, and (ii) Merger Sub will merge with and into PC3, with PC3 surviving such merger as a wholly-owned subsidiary of NewPubco (the “Merger” and, together with the other transactions contemplated by the Business Combination Agreement, the “Transaction” and the closing of the Transaction, the “Closing”).

Sponsor Support Agreement

Concurrently with the execution of the Business Combination Agreement, the Sponsor, RBio Energy and the Company entered into the Sponsor Support Agreement, pursuant to which, among other things, (i) Sponsor will vote its shares of the Company in favor of the Business Combination Agreement and the Transaction, and any other proposal submitted for approval by the shareholders of the Company in connection with the Transaction and against any action, agreement, transaction or proposal that would result in a breach of any covenant, representation or warranty or any other obligation or agreement of the Company under the BCA, (ii) Sponsor will agree to not demand that the Company redeem Sponsor’s Ordinary Shares in connection with the Transaction, and not to otherwise participate in any such redemption by tendering or submitting any of such shares for redemption, (iii) Sponsor will waive certain anti-dilution provisions of its the Company’s Ordinary Shares set forth in the Company’s amended and restated memorandum and articles of incorporation, and any and all other anti-dilution rights, in connection with the Transaction with respect to each Class B ordinary share of the Company held by Sponsor, and (iv) at the Closing and upon the written notice of RBio Energy, Sponsor will forfeit up to all of the private placement warrants of the Company (the “PC3 Private Placement Warrants”). Thereafter, in connection with any Potential Financing, Sponsor will cause the Company to issue new warrants exercisable at the same price per share for up to the number of the Company’s Ordinary Shares for which the PC3 Private Placement Warrants so forfeited were exercisable, to such persons as RBio Energy may direct in writing in its discretion prior to the Closing.