RELATED PARTY TRANSACTIONS

6 Months Ended

Jun. 30, 2024

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

NOTE 5. RELATED PARTY TRANSACTIONS

Founder Shares

On October 17, 2021, the Sponsor purchased 2,156,250 Founder Shares for an aggregate purchase price of $25,000. The number of Founder Shares will equal, on an as-converted basis, approximately 20% of the Company’s issued and outstanding shares of common stocks after the Initial Public Offering.

The initial stockholders have agreed not to transfer, assign or sell any of the Class B common stock (except to certain permitted transferees as disclosed herein) until, with respect to any of the Class B common stock, the earlier of (i) six months after the date of the consummation of a Business Combination, or (ii) the date on which the closing price of the Company’s common stock equals or exceeds $12.00 per share (as adjusted for share subdivisions, share dividends, reorganizations and recapitalizations) for any 20 trading days within any 30-trading day period commencing after a Business Combination, or earlier, if, subsequent to a Business Combination, the Company consummates a subsequent liquidation, merger, share exchange or other similar transaction which results in all of the Company’s stockholders having the right to exchange their common stock for cash, securities or other property.

Related Party 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”). Such Working Capital Loans would be evidenced by promissory notes. The notes may be repaid upon completion of a Business Combination, without interest, or, at the lender’s discretion, up to $1,500,000 of the notes may be converted upon completion of a Business Combination into units at a price of $10.00 per unit. Such units would be identical to the Private Placement Units. In the event that a Business Combination does not close, the Company may use a portion of 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.

On July 6, 2023, the Company issued a promissory note (the “Promissory Note”) in the principal amount of $1,500,000 to the Sponsor. The Promissory Note was issued to provide the Company with additional working capital, and the funds provided in accordance therewith will not be deposited into the Company’s Trust Account. The Company issued the Promissory Note in consideration for a loan from the Sponsor to fund the Company’s extension costs and working capital requirements. The Promissory Note bears no interest and is due and payable upon the earlier to occur of (i) the date on which the Company’s initial business combination is consummated and (ii) the liquidation of the Company on or before July 23, 2023 (subject to the extension of the period in which the Company must complete its initial business combination pursuant to the Company’s governing documents, or such later liquidation date as may be approved by the Company’s stockholders). At the election of the Sponsor, the unpaid principal amount of the Promissory Note may be converted into units of the Company (the “Conversion Units”) and the total Conversion Units so issued shall be equal to: (x) the portion of the principal amount of the Promissory Note being converted divided by (y) the conversion price of ten dollars ($10.00), rounded up to the nearest whole number of Conversion Units. As of June 30, 2024 and December 31, 2023, there was $1,303,842 and $1,242,500 outstanding under the Working Capital Loans, respectively.

As described in Note 1, on December 18, 2023, the Company approved the Extension Amendment and the Trust Amendment to allow the Company to extend the deadline from January 24, 2024 to January 24, 2025 or such earlier date as determined by the board of directors, pursuant to twelve one-month extensions, which we refer to as the “Extension,” and such later date, the “Extended Date,” provided that (i) the Sponsor, or its affiliates or permitted designees will deposit into the Trust Account the lesser of (x) $40,000 or (y) $0.04 per share for each public share that is not redeemed in connection with the Special Meeting for each such one-month extension commencing December 24, 2023 until January 24, 2025 unless the closing of the Company’s initial business combination shall have occurred (the “Extension Payment”) in exchange for a non-interest bearing, unsecured promissory note payable upon consummation of a business combination (ii) the procedures relating to any such extension, as set forth in the Trust Agreement, shall have been complied with. As of June 30, 2024 and December 31, 2023, there was $1,370,000 and $1,090,000 outstanding under the Extension Loans, respectively.

Convertible Note Purchase Agreement

On July 6, 2023, DUET Partners LLC (the “Sponsor”) and Fenix entered into a convertible note purchase agreement (the “Note Purchase Agreement”), pursuant to which Fenix agreed to loan $200,000 to the Sponsor at the signing of the Letter of Intent and an additional $800,000 at the signing of the Definitive Agreement. In addition, in order to finance any further extensions in connection with the Proposed Business Combination, Fenix shall at its discretion, loan funds as may be required up to another $500,000. The Sponsor will sell and issue to Fenix one or more unsecured, non-interest-bearing notes in connection with the aforementioned loans, with an aggregate principal amount of up to $1,500,000 (the “Fenix Notes”).

The Note Purchase Agreement contains customary representations, warranties, conditions and indemnification obligations by each party thereto. The representations and warranties contained therein were made only for the purposes of the Note Purchase Agreement, and as of specific dates, were solely for the benefit of the parties to such agreement and are subject to certain limitations set forth therein.

The Fenix Notes are due and payable by the Sponsor upon the closing of the Proposed Business Combination between the Company and Fenix (the “Maturity Date”). The Fenix Notes are convertible into common stocks of the Company pursuant to terms that will be set forth in the Definitive Agreement. The Fenix Notes will be cancelled and the principal amount of the loans disbursed by the Sponsor to the Company (as described below in the section titled “Promissory Note”) shall be forgiven, and the balance of the principal amount of the Fenix Notes not disbursed by the Sponsor to the Company will be returned to Fenix (i) in the event that a Definitive Agreement is not signed by July 31, 2023 or such later date that may be mutually agreed between the parties), (ii) if a Definitive Agreement is entered into and then subsequently terminated by the Company, or (iii) if the PCAOB audited financial statements of Fenix have not been delivered by the date mutually agreed between the parties and stipulated in the Business Combination Agreement.

The issuance of the Fenix Notes will be made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act of 1933, as amended.

Administrative Services Arrangement

The Company’s Sponsor has agreed, commencing from the date that the Company’s securities are first listed on Nasdaq through the earlier of the Company’s consummation of a Business Combination and its liquidation, to make available to the Company certain general and administrative services, including office space, utilities and administrative services, as the Company may require from time to time. The Company has agreed to pay to the Sponsor $10,000 per month for these services during the 15-month period to complete a business combination. For the three months ended June 30, 2024 and 2023, the Company had paid nil and $30,000 for administrative services, respectively. For the three months ended June 30, 2024 and 2023, the Company had accrued $30,000 and nil for administrative services, respectively. For the six months ended June 30, 2024 and 2023, the Company had paid $2,330 and $60,000 for administrative services, respectively. For the six months ended June 30, 2024 and 2023, the Company had accrued $60,000 and nil for administrative services, respectively.