Related Party Transactions	6 Months Ended
Jun. 30, 2023
Related Party Transactions [Abstract]
Related Party Transactions	Note 6 — Related Party Transactions Founder Shares In August 2020, the Sponsor paid $25,000 to cover certain offering costs of the Company in consideration for 5,750,000 shares of Class B common stock. In January 2021, the Company effected a stock dividend of 0.2 shares for each founder share outstanding, resulting in an aggregate of 6,900,000 founder shares outstanding and held by the Sponsor (up to 900,000 of which are subject to forfeiture by the Sponsor if the underwriters’ over-allotment option is not exercised in full). On January 20, 2021, the Sponsor forfeited 25,000 founder shares to the extent that the over-allotment option was not exercised in full by the underwriters, resulting in an aggregate of 6,875,000 founder shares outstanding. 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, reorganization 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. Promissory Note — Related Party On August 27, 2020, the Company issued an unsecured promissory note to the Sponsor, pursuant to which the Company may borrow up to an aggregate principal amount of $300,000 to be used for a portion of the expenses of the IPO. This loan is non-interest bearing, unsecured and due at the earlier of March 31, 2021 or the closing of the IPO. The loan would be repaid upon the closing of the IPO out of offering proceeds not held in the Trust Account. On January 20, 2021, the Company repaid $275,000 to the Sponsor. The facility is no longer available to the Company. As of June 30, 2023 and December 31, 2022, there were no outstanding amounts due under the promissory note. Convertible Working Capital Loan 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 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 a 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. Up to $1,500,000 of such Working Capital Loans may be convertible into warrants at a price of $1.00 per warrant at the option of the lender. The warrants would be identical to the Private Placement Warrants, including as to exercise price, exercisability and exercise period. On December 8, 2021, the Company received $1,500,000 from the Sponsor in a Working Capital Loan. This Working Capital Loan was valued using the fair value method. The fair value of the note as of December 8, 2021 and December 31, 2021 was $1,500,000. The fair value of the note as of June 30, 2023 and December 31, 2022 was $730,130 and $1,409,181, respectively (see Note 7). Convertible Promissory Notes – Shares - Related Party On January 5, 2023 and March 30, 2023, the Company issued the Convertible Promissory Notes - Shares to the Sponsor, pursuant to which the Company may borrow up to an aggregate maximum amount of $2,500,000 on each Convertible Promissory Notes - Shares from the Sponsor to pay fees and expenses and for other general corporate purposes, for a total available amount of $5,000,000. Any advances under the Convertible Note shall be made at the sole discretion of the Sponsor. The Convertible Promissory Notes - Shares mature upon the earlier of (a) the satisfaction of all conditions set forth in Article 7 of the UEI Merger and Share Acquisition Agreement other than those conditions set forth in Article 7 of the UEI Merger and Share Acquisition Agreement that by their nature cannot be satisfied other than at the Closing (as defined in the UEI Merger and Share Acquisition Agreement) and (b) the date that the winding up of the Company is effective. The Convertible Promissory Notes - Shares does not bear interest. Subject to the prior receipt of stockholder approval, and provided that the Company has not deposited an amount equal to the unpaid principal of the advances outstanding under the Convertible Promissory Notes - Shares to an account designated for the benefit of the Sponsor, then upon the occurrence of the Pre-Closing Satisfaction Date, the unpaid principal amount of advances under the Convertible Promissory Notes - Shares will convert into a number of shares of Class A common stock at a conversion price per share equal to (i) portion of the principal amount of the Convertible Promissory Notes - Shares being converted divided by (ii) $2.50, rounded up to the nearest whole number; provided that the holder of the Convertible Promissory Notes - Shares shall not be entitled to receive more than 2,000,000 shares of common stock in the aggregate on account of (1) both Convertible Promissory Notes – Shares (i.e., 2,000,000 shares issuable in the aggregate in connection with both Convertible Promissory Notes – Shares) and (2) the conversion of any other note or other equity issuance made after March 30, 2023 in connection with the ongoing funding of the Company. As such, the Company analyzed the Convertible Promissory Notes – Shares – Related Party under ASC 815 and results in no bifurcation of a derivative due to the conversion feature impacting equity. Additionally, there is a contingent beneficial conversion feature that would be recognized once the contingency is resolved. As of June 30, 2023, $5,000,000 is outstanding under the Convertible Promissory Notes – Shares, and no further borrowings are available under the Convertible Promissory Notes – Shares. On April 28, 2023, the Company issued an unsecured convertible promissory note (the “Convertible Promissory Note 2 - Shares”) to the Sponsor, pursuant to which the Company may borrow up to an aggregate maximum amount of $4,000,000 from the Sponsor to pay fees and expenses and for other general corporate purposes. Any advances under the Convertible Promissory Note 2 – Shares shall be made at the sole discretion of the Sponsor. The Convertible Promissory Note 2 - Shares matures upon the earlier of (a) the Pre-Closing Satisfaction Date and (b) the date that the winding up of the Company is effective. The Convertible Promissory Note 2 - Shares does not bear interest. Subject to the prior receipt of stockholder approval, and provided that the Company has not deposited an amount equal to the unpaid principal of the advances outstanding under the Convertible Promissory Note 2 - Shares to an account designated for the benefit of the Sponsor, then upon the occurrence of the Pre-Closing Satisfaction Date, the unpaid principal amount of advances under the Convertible Promissory Note 2- Shares will convert into a number of shares of Class A common stock at a conversion price per share equal to equal to (x) the portion of the principal amount of the promissory note being converted, divided by (y) the average closing price of the Class A Common Stock for the 30 consecutive Trading Days immediately preceding the Pre-Closing Satisfaction Date, rounded up to the nearest whole number. The Convertible Promissory Note 2 – Shares were analyzed under ASC 815 and does meet the scope exception under ASC 815, as such bifurcation was not required. As of June 30, 2023, $4,000,000 is outstanding under the Convertible Promissory Note 2 – Shares, no further borrowings are available under the Convertible Promissory Note 2 – Shares. On June 29, 2023, the Company issued a secured convertible promissory note (the “Secured Convertible Promissory Note - Shares”) to the Sponsor, pursuant to which the Company may borrow up to an aggregate maximum amount of $2,000,000 from the Sponsor to pay fees and expenses and for other general corporate purposes. Any advances under the Secured Convertible Promissory Note - Shares shall be made at the sole discretion of the Sponsor. The Secured Convertible Promissory Note - Shares matures upon the earlier of (a) the Pre-Closing Satisfaction Date, (b) the date that the winding up of the Company is effective and (c) the one year anniversary of the issuance of the Secured Convertible Promissory Note - Shares. The Secured Convertible Promissory Note - Shares is secured by all of the assets of the Company except for the Trust Account, any funds, monies, or other property on deposit in the Trust Account, or any right, title, interest, or claim in or to any distribution from the Trust Account. The Secured Convertible Promissory Note - Shares does not bear interest. Subject to the prior receipt of stockholder approval, and provided that the Company has not deposited an amount equal to the unpaid principal of the advances outstanding under the Convertible Promissory Note 2 - Shares to an account designated for the benefit of the Sponsor, then upon the occurrence of the Pre-Closing Satisfaction Date, the unpaid principal amount of advances under the Convertible Promissory Note 2- Shares will convert into a number of shares of Class A common stock at a conversion price per share equal to equal to (x) the portion of the principal amount of the promissory note being converted, divided by (y) the average closing price of the Class A Common Stock for the 30 consecutive Trading Days immediately preceding the Pre-Closing Satisfaction Date, rounded up to the nearest whole number. The Convertible Promissory Note 2 – Shares were analyzed under ASC 815 and does meet the scope exception under ASC 815, as such bifurcation was not required. As of June 30, 2023, $500,000 has been borrowed against Secured Convertible Promissory Note - Shares, with $1,500,000 remaining available for borrowings. Administrative Service Fee The Company has agreed to pay its Sponsor, commencing on January 14, 2021, a total of $10,000 per month for office space, utilities and secretarial and administrative support. Upon completion of the Company’s Business Combination or its liquidation, the Company will cease paying these monthly fees. For the three and six months ended June 30, 2023 and 2022, the Company has incurred $30,000 and $60,000, and $30,000 and $60,000 for these services, respectively, of which $90,000 and $0 are recorded on the condensed balance sheets in accounts payable and accrued expenses, respectively.

Related Party Transactions

6 Months Ended

Jun. 30, 2023

Note 6 — Related Party Transactions

Founder Shares

In August 2020, the Sponsor paid $25,000 to cover certain offering costs of the Company in consideration for 5,750,000 shares of Class B common stock. In January 2021, the Company effected a stock dividend of 0.2 shares for each founder share outstanding, resulting in an aggregate of 6,900,000 founder shares outstanding and held by the Sponsor (up to 900,000 of which are subject to forfeiture by the Sponsor if the underwriters’ over-allotment option is not exercised in full). On January 20, 2021, the Sponsor forfeited 25,000 founder shares to the extent that the over-allotment option was not exercised in full by the underwriters, resulting in an aggregate of 6,875,000 founder shares outstanding.

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, reorganization 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.

Promissory Note — Related Party

On August 27, 2020, the Company issued an unsecured promissory note to the Sponsor, pursuant to which the Company may borrow up to an aggregate principal amount of $300,000 to be used for a portion of the expenses of the IPO. This loan is non-interest bearing, unsecured and due at the earlier of March 31, 2021 or the closing of the IPO. The loan would be repaid upon the closing of the IPO out of offering proceeds not held in the Trust Account. On January 20, 2021, the Company repaid $275,000 to the Sponsor. The facility is no longer available to the Company. As of June 30, 2023 and December 31, 2022, there were no outstanding amounts due under the promissory note.

Convertible Working Capital Loan

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 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 a 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. Up to $1,500,000 of such Working Capital Loans may be convertible into warrants at a price of $1.00 per warrant at the option of the lender. The warrants would be identical to the Private Placement Warrants, including as to exercise price, exercisability and exercise period.

On December 8, 2021, the Company received $1,500,000 from the Sponsor in a Working Capital Loan. This Working Capital Loan was valued using the fair value method. The fair value of the note as of December 8, 2021 and December 31, 2021 was $1,500,000. The fair value of the note as of June 30, 2023 and December 31, 2022 was $730,130 and $1,409,181, respectively (see Note 7).

Convertible Promissory Notes – Shares - Related Party

On January 5, 2023 and March 30, 2023, the Company issued the Convertible Promissory Notes - Shares to the Sponsor, pursuant to which the Company may borrow up to an aggregate maximum amount of $2,500,000 on each Convertible Promissory Notes - Shares from the Sponsor to pay fees and expenses and for other general corporate purposes, for a total available amount of $5,000,000. Any advances under the Convertible Note shall be made at the sole discretion of the Sponsor. The Convertible Promissory Notes - Shares mature upon the earlier of (a) the satisfaction of all conditions set forth in Article 7 of the UEI Merger and Share Acquisition Agreement other than those conditions set forth in Article 7 of the UEI Merger and Share Acquisition Agreement that by their nature cannot be satisfied other than at the Closing (as defined in the UEI Merger and Share Acquisition Agreement) and (b) the date that the winding up of the Company is effective. The Convertible Promissory Notes - Shares does not bear interest. Subject to the prior receipt of stockholder approval, and provided that the Company has not deposited an amount equal to the unpaid principal of the advances outstanding under the Convertible Promissory Notes - Shares to an account designated for the benefit of the Sponsor, then upon the occurrence of the Pre-Closing Satisfaction Date, the unpaid principal amount of advances under the Convertible Promissory Notes - Shares will convert into a number of shares of Class A common stock at a conversion price per share equal to (i) portion of the principal amount of the Convertible Promissory Notes - Shares being converted divided by (ii) $2.50, rounded up to the nearest whole number; provided that the holder of the Convertible Promissory Notes - Shares shall not be entitled to receive more than 2,000,000 shares of common stock in the aggregate on account of (1) both Convertible Promissory Notes – Shares (i.e., 2,000,000 shares issuable in the aggregate in connection with both Convertible Promissory Notes – Shares) and (2) the conversion of any other note or other equity issuance made after March 30, 2023 in connection with the ongoing funding of the Company. As such, the Company analyzed the Convertible Promissory Notes – Shares – Related Party under ASC 815 and results in no bifurcation of a derivative due to the conversion feature impacting equity. Additionally, there is a contingent beneficial conversion feature that would be recognized once the contingency is resolved. As of June 30, 2023, $5,000,000 is outstanding under the Convertible Promissory Notes – Shares, and no further borrowings are available under the Convertible Promissory Notes – Shares.

On April 28, 2023, the Company issued an unsecured convertible promissory note (the “Convertible Promissory Note 2 - Shares”) to the Sponsor, pursuant to which the Company may borrow up to an aggregate maximum amount of $4,000,000 from the Sponsor to pay fees and expenses and for other general corporate purposes. Any advances under the Convertible Promissory Note 2 – Shares shall be made at the sole discretion of the Sponsor. The Convertible Promissory Note 2 - Shares matures upon the earlier of (a) the Pre-Closing Satisfaction Date and (b) the date that the winding up of the Company is effective. The Convertible Promissory Note 2 - Shares does not bear interest. Subject to the prior receipt of stockholder approval, and provided that the Company has not deposited an amount equal to the unpaid principal of the advances outstanding under the Convertible Promissory Note 2 - Shares to an account designated for the benefit of the Sponsor, then upon the occurrence of the Pre-Closing Satisfaction Date, the unpaid principal amount of advances under the Convertible Promissory Note 2- Shares will convert into a number of shares of Class A common stock at a conversion price per share equal to equal to (x) the portion of the principal amount of the promissory note being converted, divided by (y) the average closing price of the Class A Common Stock for the 30 consecutive Trading Days immediately preceding the Pre-Closing Satisfaction Date, rounded up to the nearest whole number. The Convertible Promissory Note 2 – Shares were analyzed under ASC 815 and does meet the scope exception under ASC 815, as such bifurcation was not required. As of June 30, 2023, $4,000,000 is outstanding under the Convertible Promissory Note 2 – Shares, no further borrowings are available under the Convertible Promissory Note 2 – Shares.

On June 29, 2023, the Company issued a secured convertible promissory note (the “Secured Convertible Promissory Note - Shares”) to the Sponsor, pursuant to which the Company may borrow up to an aggregate maximum amount of $2,000,000 from the Sponsor to pay fees and expenses and for other general corporate purposes. Any advances under the Secured Convertible Promissory Note - Shares shall be made at the sole discretion of the Sponsor. The Secured Convertible Promissory Note - Shares matures upon the earlier of (a) the Pre-Closing Satisfaction Date, (b) the date that the winding up of the Company is effective and (c) the one year anniversary of the issuance of the Secured Convertible Promissory Note - Shares. The Secured Convertible Promissory Note - Shares is secured by all of the assets of the Company except for the Trust Account, any funds, monies, or other property on deposit in the Trust Account, or any right, title, interest, or claim in or to any distribution from the Trust Account. The Secured Convertible Promissory Note - Shares does not bear interest. Subject to the prior receipt of stockholder approval, and provided that the Company has not deposited an amount equal to the unpaid principal of the advances outstanding under the Convertible Promissory Note 2 - Shares to an account designated for the benefit of the Sponsor, then upon the occurrence of the Pre-Closing Satisfaction Date, the unpaid principal amount of advances under the Convertible Promissory Note 2- Shares will convert into a number of shares of Class A common stock at a conversion price per share equal to equal to (x) the portion of the principal amount of the promissory note being converted, divided by (y) the average closing price of the Class A Common Stock for the 30 consecutive Trading Days immediately preceding the Pre-Closing Satisfaction Date, rounded up to the nearest whole number. The Convertible Promissory Note 2 – Shares were analyzed under ASC 815 and does meet the scope exception under ASC 815, as such bifurcation was not required. As of June 30, 2023, $500,000 has been borrowed against Secured Convertible Promissory Note - Shares, with $1,500,000 remaining available for borrowings.

Administrative Service Fee

The Company has agreed to pay its Sponsor, commencing on January 14, 2021, a total of $10,000 per month for office space, utilities and secretarial and administrative support. Upon completion of the Company’s Business Combination or its liquidation, the Company will cease paying these monthly fees. For the three and six months ended June 30, 2023 and 2022, the Company has incurred $30,000 and $60,000, and $30,000 and $60,000 for these services, respectively, of which $90,000 and $0 are recorded on the condensed balance sheets in accounts payable and accrued expenses, respectively.

- Definition

The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

26 Capital Acquisition Corp. 10-Q