PMV Consumer Acquisition Corp

NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS

PMV Consumer Acquisition Corp. (the “Company”) was incorporated in Delaware on March 18, 2020. The Company was formed for the purpose of entering into a merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization or similar business combination with one or more businesses or entities.

Although the Company is not limited to a particular industry or sector for purposes of identifying a potential business opportunity and consummating a transaction, the Company intends to focus its search on business opportunities in the consumer industry. The Company is an early stage and emerging growth company and, as such, the Company is subject to all of the risks associated with early stage and emerging growth companies.

As of March 31, 2024, the Company had not commenced any operations. All activity through March 31, 2024, relates to the Company’s formation, the initial public offering (“Initial Public Offering”) and simultaneous private sale of warrants (“Private Warrants”), which is described below, and identifying a potential business opportunity. It is unlikely that the Company will generate any operating revenues until after the completion of a transaction, at the earliest. The Company generates non-operating income in the form of interest income.

The Company initially had until September 21, 2022, to complete a business combination (the “Combination Period”). On September 21, 2022, the Company held a special meeting of stockholders (the “Meeting”). The purpose of the Meeting was to approve the following amendments to the Company’s certificate of incorporation; to extend the date by which the Company had to consummate a business combination for one year, from September 21, 2022 to September 21, 2023, conditioned on the deposit of 200,000 shares of Class B convertible common stock (to be converted into Class C common stock) into the Company’s Trust account; to increase authorized stock from 86,000,000 to 120,000,000 shares, of which 100,000,000 shall be shares of common stock, consisting of 45,000,000 shares of Class A convertible common stock,10,000,000 shares of Class B convertible common stock,25,000,000 shares of Class C common stock and 20,000,000 shares of Special common stock, and 20,000,000 shall be shares of preferred stock; to permit the Company’s board of directors to create Special common stock in one or more series and to fix for each series the voting powers, designations, preferences, rights, qualifications, limitations and restrictions thereof; to provide for (i) the right of a holder of Class A convertible common stock to convert into Class C common stock on a one-for-one basis, (ii) the right of the Company to redeem Class A convertible common stock in exchange for a pro rata share of the net cash (and not stock) held in the Company’s Trust Account, unless the holder elects to receive Class C common stock issued on a one-for-one basis, plus a pro rata share of any stock held in the Trust Account, and (iii) upon such redemption the extinguishment of the legal force and effect of the business combination and Trust Account provisions contained in paragraphs A through I of Article Sixth of the charter; to (i) eliminate the Class B convertible common stock anti-dilution provisions that require adjustment to maintain the specified 20% class ownership, and (ii) provide for the right of a holder of Class B convertible common stock to convert into Class C common stock on a one-for-one basis. All such amendments were approved at the Meeting. On September 27, 2022, the Sponsor contributed to the Company for purposes of making a deposit into the Company’s Trust Account of an aggregate of 200,000 shares of Class B convertible common stock (to be converted into Class C common stock) to extend the date by which the Company has to consummate a business combination for one year, from September 21, 2022 to September 21, 2023.

At the Meeting, in connection with the extension, stockholders holding 15,453,391 shares of Class A convertible common stock exercised their right to redeem such shares for a pro rata portion of the funds in the Trust Account. As a result, $154,874,303 (approximately $10.02 per share), which included $340,393 of interest earned on the Trust Account which was not previously used to pay the Company’s tax obligation, was removed from the Trust Account to pay such holders. Following these redemptions, the Company had 2,046,609 shares of Class A convertible common stock outstanding and the aggregate amount remaining in the Trust Account at the time was $20,511,170.

On October 17, 2022, the Sponsor elected to convert 3,000,000 shares of its Class B convertible common stock into 3,000,000 shares of Class A convertible common stock. Following the conversion, the Sponsor owned 1,175,000 shares of Class B convertible common stock, and the Company had 5,046,609 shares of Class A convertible common stock outstanding.

On October 24, 2022, the Company’s Class A convertible common stock, redeemable warrants and units (consisting of one share of Class A convertible common stock and one-half of one redeemable warrant) (collectively, the “Securities”) commenced trading on the OTC Pink; the Company previously announced its intention to voluntarily delist the Securities from the New York Stock Exchange (“NYSE”), and that the last day of trading on the NYSE would be October 21, 2022.

On December 14, 2022, any unseparated units of the Company (consisting of one share of Class A convertible common stock and one-half of one redeemable warrant) terminated trading and were subsequently separated.

NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS(CONT.)

On December 27, 2022, the Company announced the completion of the redemption of its outstanding shares of Class A convertible common stock subject to redemption, totaling 2,046,609 shares issued in its IPO (the “Class A IPO Shares”), in accordance with the provision of its charter. Holders representing a total of 2,042,409 shares of the Class A IPO Shares called for redemption elected to receive a pro rata share of the cash, including the interest earned thereon net of interest that may be used by the Company to pay its taxes payable (and not any stock), held in the Company’s Trust Account. The $10.10 per share pro rata amount was calculated by dividing the number of Class A IPO Shares redeemed from each such holder by the total number of outstanding Class A IPO Shares. Holders representing a total of 4,200 shares of the Class A IPO Shares called for redemption elected to receive Class C common stock issued on a one-for-one basis for the number of Class A IPO Shares redeemed from each such holder, plus each such holder’s pro rata share of the 200,000 shares of Class C common stock held in the IPO Trust Account. The pro rata share of the Class C common stock held in the Trust Account was calculated by dividing the number of Class A IPO Shares redeemed from each such holder by the total number of Class A IPO Shares redeemed from all holders of Class A IPO Shares that elected to receive stock. The amount of cash that would otherwise have been paid to holders who redeemed for cash (totaling approximately $42,424) was released from the Trust Account and transferred to the Company. The Trust Account was terminated following the release of the cash and stock to holders of Class A IPO Shares in complete liquidation of the assets held in trust. The 3,000,000 shares of Class A convertible common stock owned by the Sponsor were not redeemed and were expressly excluded from participating in, and were not otherwise entitled to, any of the cash and stock held in the Trust Account. The Class A IPO Shares redeemed are no longer deemed to be outstanding and all rights of the holders thereof as stockholders of the Company with respect to the Class A IPO Shares so redeemed have ceased. The Class C common stock received by holders who elected to receive stock has not been listed on a securities exchange. Following the redemption, the Company had outstanding 3,000,000 shares of Class A convertible common stock,1,175,000 shares of Class B convertible common stock,204,200 shares of Class C common stock,8,750,000 public warrants and 6,150,000 private placement warrants, as well as approximately $1,149,000 of cash on hand available for working capital purposes.

On February 27, 2023, the Sponsor purchased the 204,200 shares of Class C common stock from the holder thereof, which were comprised of (i)4,200 shares of Class C common stock, which were issued on a one-for-one basis for the number of Class A convertible common stock of the Company previously redeemed from the holder (as described above), and (ii)200,000 shares of Class C common stock, which represents the holder’s pro rata share of the Class C common stock that were held in the Trust Account (as described above), for an aggregate purchase price of $42,000.

On September 29, 2023, the Sponsor elected to voluntarily convert all of its shares of Class A convertible common stock into shares of Class C common stock (the “Class C Conversion”). Following this conversion, which occurred on November 1, 2023, the Sponsor owned 1,175,000 shares of Class B convertible common stock and 3,204,200 shares of Class C common stock.

In light of the Class C Conversion, and in order to simplify and better reflect the purpose, capital structure, governance and organizational policies and procedures of the Company, the Board of Directors of the Company (the “Board”) recommended, and the stockholders approved on September 29, 2023, various amendments to the Charter, as well as a reverse stock split of all outstanding shares of Class B convertible common stock and Class C common stock at a ratio of 43.792-to-1 (the “Reverse Stock Split”). The purpose of the Reverse Stock Split was to decrease the total number of shares of the Company’s common stock outstanding and increase the liquidity and market price of such shares to approximately $10.00 per share. The other amendments to the Charter were as follows: (i) the elimination of any and all authorized shares of Class A convertible common stock, the renaming of the Class C common stock to Class A common stock (the “Reclassification”), and the elimination of any and all authorized shares of Special common stock, (ii) the modification of the rights of the Class B convertible common stock such that (a) the provisions permitting conversion into shares of Class C common stock were deleted and (b) each holder of record shall be entitled toten (10) votes for each share of Class B convertible common stock held, (iii) the deletion of certain provisions of Article SIXTH of the Charter, including with respect to any references to a business combination and/or the Company’s IPO Trust Account, as such provisions were previously extinguished in accordance with the terms and conditions of the Charter and were therefore of no further legal force and effect, and (iv) the deletion of certain provisions of Article SIXTH of the Charter, including the requirement that the Board be divided into staggered classes for election. On November 2, 2023, the Company filed a Second Amended and Restated Certificate of Incorporation, dated November 1, 2023, with the State of Delaware.

Also, the Board recommended, and the stockholders approved on September 29, 2023, an amendment to the Bylaws of the Company (the “Bylaws”) to provide that, subject to applicable law, any action that is required or permitted to be taken by the stockholders of the Company at any annual or special meeting of stockholders may be effected by written consent of stockholders in lieu of a meeting. On November 2, 2023, the Company filed the Amended and Restated Bylaws with the State of Delaware.

NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS(CONT.)

On March 12, 2024 (the “Effective Date”), the Reverse Stock Split was declared effective. As a result of the Reclassification and the Reverse Stock Split, approximately 26,831 shares of Class B convertible common stock are in issue and outstanding and approximately 73,169 shares of Class A common stock are in issue and outstanding as of the Effective Date. Accordingly, earnings per share reported for prior periods in the unaudited condensed financial statements have been restated to reflect the retroactive effect of the reverse stock split.

Following the Effective Date, and consistent with the terms and conditions of the Warrant Agreement, the terms of the Company’s public and private warrants are proportionately adjusted in the same ratio as the reduction in the number of shares of outstanding common stock, except any fractional shares resulting from such adjustment are rounded up or down, as the case may be, to the nearest whole share. Correspondingly, the per share exercise price of such warrants is increased in direct proportion to the Reverse Stock Split ratio such that the aggregate dollar amount payable for the purchase of the shares subject to such securities remains unchanged; therefore, the 8,750,000 public warrants are exercisable into approximately 199,808 shares of Class A common stock and the 6,150,000 private placement warrants are exercisable into approximately 140,437 shares of Class A common stock, each at a price of approximately $503.61 per share. In furtherance of any prospective business opportunities, the Company may in the future seek to pursue a variety of capital raising initiatives.

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited condensed 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 SEC. Certain information or footnote disclosures normally included in the 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 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 financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the SEC on March 28, 2024, which contains the audited financial statements and notes thereto. The interim results for the three months ended March 31, 2024, are not necessarily indicative of the results to be expected for the year ending December 31, 2024, or for any future periods.

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 independent registered public accounting firm 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 standards 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.

Use of Estimates

The preparation of 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 reported amounts of 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. One of the more significant accounting estimates included in these financial statements is the determination of the fair value of the warrant liabilities. Such estimates may be subject to change as more current information becomes available and accordingly the actual results could differ significantly from those estimates.

Common Stock Subject to Possible Redemption

The Company had classified all of the shares of Class A IPO common stock as temporary equity. Immediately upon the closing of the Public Offering, the Company recognized the accretion from initial book value to redemption amount value. The change in the carrying value of redeemable shares of Class A IPO common stock resulted in charges against additional paid-in capital and accumulated deficit. As a result of redemptions in September and December 2022, the Class A IPO Shares are no longer deemed to be outstanding and all rights of the holders thereof as stockholders of the Company with respect to the Class A IPO Shares so redeemed have ceased.

Derivative Warrant Liabilities

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 Financial Accounting Standards Board (“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. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the condensed statements of operations.

Income Taxes

The Company follows the asset and liability method of accounting for income taxes under 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 statements’ 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.

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 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 March 31, 2024 and December 31, 2023. 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 is subject to income tax examinations by major taxing authorities since inception.

Net Loss per Common Share

Net loss per common share is computed by dividing net loss by the weighted average number of shares of common stock outstanding for the period. The Company has not considered the effect of warrants to purchase 340,245 shares of Class A common stock, since the warrants are contingent upon the occurrence of future events and average market price of the Company’s Class A common stock for the three month periods ended March 31, 2024 and 2023, was below the Warrants’ $503.61 exercise price. As a result, diluted loss per common share is the same as basic loss per common share for the periods presented.

As of March 31, 2024, the Company has two classes of shares that participate in earnings, which are referred to as Class A common stock (fka Class C common stock) and Class B convertible common stock (the “Founder Shares”). Earnings and losses are shared pro-rata between the two classes of shares. This presentation contemplates a transaction as the most likely outcome, in which case, all two classes of shares share pro rata in the income (loss) of the Company.

The following tables reflect the calculation of basic and diluted net loss per share of common stock (in dollars, except share amounts):

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist of a cash account in a financial institution, which, at times, may exceed the Federal Deposit Insurance Corporation coverage 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.

Fair Value of Financial Instruments

Excluding the warrant liability, the fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the accompanying condensed balance sheets, primarily due to their short-term nature.

Reclassification

The related party payables and accrued expenses have been reclassified for the prior year on the current year balance sheet for presentation purposes. No changes to the total assets, liabilities, or stockholder’s equity have been made.

Recent Accounting Pronouncements

Management does not believe that any other recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company’s unaudited condensed interim financial statements.

NOTE 3. RELATED PARTY TRANSACTIONS

On March 20, 2020, the Sponsor purchased 3,593,750 shares of Class B convertible common stock (the “Founder Shares”) for an aggregate price of $25,000, or approximately $0.007 per share.

On August 3, 2020, the Company effected a 1.4-for-1 forward stock split of its issued and outstanding shares of Class B convertible common stock, resulting in an aggregate of 5,031,250 Founder Shares being outstanding, of which an aggregate of up to 656,250 shares were subject to forfeiture by the Sponsor to the extent that the underwriters’ over-allotment option was not exercised in full or in part so that the Sponsor would own, on an as-converted basis,20% of the Company’s issued and outstanding shares after the Initial Public Offering.

On November 5, 2020, the over-allotment option expired and was not exercised. Consequently 656,250 Founder Shares were forfeited. Following the forfeiture, the sponsor owned 4,375,000 shares of Class B convertible common stock.

On September 27, 2022, the Company’s Sponsor contributed to the Company an aggregate of 200,000 shares of Class B convertible common stock. Following the contribution, the Sponsor owned 4,175,000 shares of Class B convertible common stock.

On October 17, 2022, the Sponsor elected to convert 3,000,000 shares of Class B convertible common stock into 3,000,000 shares of Class A convertible common stock. Following the conversion, the Sponsor owned 1,175,000 shares of Class B convertible common stock.

The Class B convertible common stock is identical to the Class A convertible common stock except that (i) each share of Class B convertible common stock shall be entitled toten (10) votes at any annual or special meeting of stockholders or in the case of any written consent of stockholders in lieu of a meeting and for all purposes, and (ii) the Class B convertible common stock has the exclusive right to elect, replace and remove the directors of the Company. Holders of Class B convertible common stock may also elect to convert their shares of Class B convertible common stock into an equal number of shares of Class A common stock, subject to adjustment as provided above, at any time.

On February 27, 2023, the Sponsor purchased 204,200 shares of Class C common stock from a Holder, which were comprised of (i)4,200 shares of Class C common stock, which were issued on a one-for-one basis for the number of shares of Class A convertible common stock of the Company previously redeemed from the Holder, and (ii)200,000 shares of Class C common stock, which represent the Holder’s pro rata share of the Class C common stock that were held in the Trust Account, for an aggregate purchase price of $42,000.

On November 1, 2023, the Sponsor voluntarily elected to convert all of its shares of Class A convertible common stock into shares of Class C common stock (the “Class C Conversion”), which upon completion the Class C common stock was renamed Class A common stock.

Administrative Support Agreement

The Company entered into an agreement whereby, commencing September 24, 2020, the Company will pay an affiliate of the Sponsor a total of $10,000 per month for office space, utilities and secretarial and administrative support. For the three months ended March 31, 2024 and 2023, the Company incurred fees for these services of $30,000 and $30,000, respectively. Administrative support fees included in accounts payable – related party in the accompanying unaudited condensed balance sheets at March 31, 2024 and December 31, 2023, were $422,000 and $392,000, respectively.

Cash and Cash Equivalents

At March 31, 2024 and December 31, 2023, the Company held $1,081,115 and $1,067,915, respectively, in the Gabelli U.S. Treasury Money Market Fund, which is recorded in cash and cash equivalents on the condensed balance sheets. The Gabelli U.S. Treasury Money Market Fund is an open-ended money market fund with published daily net asset values (“NAV”), in which case the Company uses NAV as a practical expedient to fair value. The NAV on this investment is held constant at $1.00 per unit.

NOTE 4. COMMITMENTS AND CONTINGENCIES

Underwriting Agreement

The underwriters were entitled to a deferred fee of $0.35 per Unit, or $6,125,000.

On August 22, 2022, UBS agreed to waive its entitlement to the deferred underwriting commission of $4,593,750 to which it became entitled upon completion of the Company’s Initial Public Offering, subject to the consummation of the Transaction. On December 27, 2022, the Company announced the completion of the redemption of its outstanding shares of Class A common stock subject to redemption, totaling 2,046,609 shares issued in its IPO, in accordance with the provision of its charter, which resulted in the forfeiture of the remaining $1,531,250 of the deferred underwriting fee. As a result, and for the year ended December 31, 2022, the Company derecognized the entire deferred underwriting fee payable of $6,125,000 and recorded $5,815,688 of the forgiveness of the deferred underwriting fee allocated to Public Shares to the carrying value of the shares of Class A common stock and the remaining balance of $309,312 as a gain from extinguishment of liability allocated to warrant liabilities.

Risks and Uncertainties

United States and global markets are experiencing volatility and disruption following the geopolitical instability resulting from the ongoing Russia-Ukraine conflict and the recent escalation of the Israel-Hamas conflict. In response to the ongoing Russia-Ukraine conflict, the North Atlantic Treaty Organization (“NATO”) deployed additional military forces to eastern Europe, and the United States, the United Kingdom, the European Union and other countries have announced various sanctions and restrictive actions against Russia, Belarus and related individuals and entities, including the removal of certain financial institutions from the Society for Worldwide Interbank Financial Telecommunication (“SWIFT”) payment system. Certain countries, including the United States, have also provided and may continue to provide military aid or other assistance to Ukraine and to Israel, increasing geopolitical tensions among a number of nations. The invasion of Ukraine by Russia and the escalation of the Israel-Hamas conflict and the resulting measures that have been taken, and could be taken in the future, by NATO, the United States, the United Kingdom, the European Union, Israel and its neighboring states and other countries have created global security concerns that could have a lasting impact on regional and global economies. Although the length and impact of the ongoing conflicts are highly unpredictable, they could lead to market disruptions, including significant volatility in commodity prices, credit and capital markets, as well as supply chain interruptions and increased cyber-attacks against U.S. companies. Additionally, any resulting sanctions could adversely affect the global economy and financial markets and lead to instability and lack of liquidity in capital markets.

Any of the above mentioned factors, or any other negative impact on the global economy, capital markets or other geopolitical conditions resulting from the Russian invasion of Ukraine, the escalation of the Israel-Hamas conflict and subsequent sanctions or related actions, could adversely affect the Company’s search for a business opportunity and any target business with which the Company may ultimately consummate a business opportunity.

NOTE 5. STOCKHOLDER’S EQUITY

Preferred Stock — At inception, the Company was authorized to issue 1,000,000 shares of preferred stock with a par value of $0.0001 per share with such designation, rights and preferences as may be determined from time to time by the Company’s board of directors. On September 21, 2022, the Company amended the Certificate of Incorporation to authorize 20,000,000 shares of preferred stock with a par value of $0.0001. At March 31, 2024 and December 31, 2023, there were no shares of preferred stock issued or outstanding.

Common Stock — At inception, the authorized common stock of the Company included up to 75,000,000 shares of Class A convertible common stock and 10,000,000 shares of Class B convertible common stock. On September 21, 2022, the Company amended the Certificate of Incorporation to authorize 45,000,000 shares of Class A convertible common stock,10,000,000 shares of Class B convertible common stock,25,000,000 shares of Class C common stock and 20,000,000 shares of Special common stock. On November 1, 2023, the Company amended the Certificate of Incorporation to authorize 25,000,000 shares of Class A common stock (fka Class C common stock) and 10,000,000 shares of Class B convertible common stock.

At March 31, 2024 and December 31, 2023, there wereno shares of Class A convertible common stock issued and outstanding,73,169 shares of Class A common stock (fka Class C common stock) issued and outstanding, and 26,831 shares of Class B convertible common stock issued and outstanding.

NOTE 5. STOCKHOLDER’S EQUITY(CONT.)

Warrants— Public Warrants may only be exercised for a whole number of shares. No fractional shares will be issued upon exercise of the Public Warrants. 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.

Once the warrants become exercisable, the Company may redeem the Public Warrants:

If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement.

The exercise price and number of shares of common stock issuable upon exercise of the warrants may be adjusted in certain circumstances, including in the event of a stock dividend, or recapitalization, reorganization, merger or consolidation. However, the warrants will not be adjusted for issuance of common stock at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the warrants. The Company liquidated the funds held in the Trust Account; holders of warrants did not receive any of such funds with respect to their warrants, nor did they receive any distribution from the Company’s assets held outside of the Trust Account with respect to such warrants. Accordingly, the warrants may expire worthless.

The Private Warrants will be identical to the Public Warrants underlying the Units sold in the Initial Public Offering, subject to certain limited exceptions. Additionally, the Private Warrants will be exercisable for cash or on a cashless basis, at the holder’s option, and be non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Private Warrants are held by someone other than the initial purchaser or its permitted transferees, the Private Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants.

The below table outlines the Company’s capital structure as of March 31, 2024 and December 31, 2023:

NOTE 6. INCOME TAX

The Company’s net deferred tax assets at March 31, 2024 and December 31, 2023, are as follows:

The income tax provision for the three months ended March 31, 2024 and 2023, consists of the following:

As of March 31, 2024 and December 31, 2023, the Company did not have any U.S. federal and state net operating loss carryovers (“NOLs”) available to offset future taxable income.

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 determined that a full valuation allowance was required.

A reconciliation of the income tax rate to the Company’s effective tax rate for the three months ended March 31, 2024 and 2023, is as follows:

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.

NOTE 7. 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 following tables present information about the Company’s assets that are measured at fair value on a recurring basis at March 31, 2024 and December 31, 2023, and indicate the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value.

The fair value of the Company’s Public Warrants at March 31, 2024 and December 31, 2023, is based on observable inputs. As of March 31, 2024 and December 31, 2023, the measurement of the Private Warrants are classified as Level 2 due to the use of the closing price of the Public Warrants, an observable market quote for a similar asset in an active market.

The aforementioned warrant liabilities are not subject to qualified hedge accounting.

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.

NOTE 8. SUBSEQUENT EVENTS

The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the financial statements were issued. Based upon this review, the Company did not identify any subsequent events that would have required adjustment or disclosure in the financial statements other than as follows:

On April 29, 2024, the Board of Directors of the Company recommended, and the Company’s sole shareholder approved, an amendment to the Company’s Second Amended and Restated Certificate of Incorporation (the “Amendment”) to (i) reduce the number of authorized shares of Class A common stock from 25,000,000 shares to 570,000 shares, (ii) reduce the number of authorized shares of Class B common stock from 10,000,000 shares to 230,000 shares, and (iii) reduce the number of authorized shares of preferred stock from 20,000,000 shares to 460,000 shares. The Company filed the Amendment with the Secretary of State of the State of Delaware on April 30, 2024.