Related Party Transactions

3 Months Ended

Mar. 31, 2025

Note 5 — Related Party Transactions

Insider Shares

On April 18, 2024, the Company issued 2,156,250 Class B ordinary shares, par value of $0.0001 each, to the Sponsor for a purchase price of $25,000, or approximately $0.012 per share. On June 27, 2024, the Company issued additional 4,521,169 Class B ordinary shares, at par value of $452, which is accounted for as a nominal issuance to the sponsor. In total, an aggregate 6,677,419 Class B ordinary shares were issued to the Sponsor, at a per-share price of approximately $0.004 per share. On February 25, 2025, the Sponsor agreed to transfer all the insider shares it held to St Sponsor Investment LLC (the “Sponsor HoldCo”) as capital contribution, in exchange for the issuance of 100 membership interests to the Sponsor and for the admission of the Sponsor as the sole member of the Sponsor HoldCo. On April 30, 2025, the Sponsor agreed to surrender 4,507,258 insider shares it held, as a result of which the Sponsor HoldCo owns 2,010,161 insider shares. On May 21, 2025, Sponsor HoldCo converted 800,000 Class B ordinary shares, par value $0.0001 per share, on a one-for-one basis to 800,000 Class A ordinary shares of the Company, par value $0.0001 per share (the “Class A insider shares”, with the Class B insider shares, the “insider shares”). As a result, the Sponsor HoldCo owns 800,000 Class A insider shares and 1,150,161 Class B insider shares.

On May 15, 2024, the Sponsor entered into a securities transfer agreement, pursuant to which the Sponsor transferred 100,000 insider shares, which equated to 4.6% of the 2,170,161 Class B ordinary shares, at the purchase price of $1,159.42 to Bala Padmakumar, the CEO, Chairman and Director of the Company and 60,000 insider shares at the purchase price of $695.65 to Evan M. Graj, the CFO and director of the Company, respectively. The fair value of these 160,000 shares transferred on the grant date was $33,760 or $0.211 per share per valuation performed by a third-party specialist. The Company accounted for the transfer under ASC 718 stock compensation (See Note 2 for details).

The share price was calculated using a scenario-based method, incorporating probabilities of both a de-SPAC and an IPO, with the total unit value reaching $10 and the right valued at one-eighth of the share price. Based on these probabilities, an indicated per share marketable value for the Founders Shares was determined, and a discount for lack of marketability, derived from the Finnerty model, was applied to yield a minority non-marketable fair value. The following criteria presents the quantitative information regarding market assumptions used in the founder share valuation performed by a third-party specialist:

	May 15, 2024
Estimated Volatility		102.5	%
Risk-free rate		4.67	%
Spot price	$	9.639
Discount of lack of marketability (DLOM)		27.02	%

Promissory Note — Related Party

On April 18, 2024, the Sponsor agreed to loan the Company up to $500,000 (the “Promissory Note”) to be used for a portion of the expenses of the IPO. As of March 31, 2025 and December 31, 2024, the Company has an outstanding loan balance of $417,147 and $331,927, respectively. This Promissory Note is non-interest bearing, unsecured and is due at the earlier of (1) December 31, 2024, subsequently amended to August 31, 2025, or (2) the date on which the Company consummates an initial public offering of its securities, unless accelerated upon the occurrence of an Event of Default.

Working Capital Loans

In addition, in order to meet the Company’s working capital needs following the consummation of the IPO if the funds not held in the trust account are insufficient, or to extend its life, its insiders, officers and directors or their affiliates/designees may, but are not obligated to, loan the Company funds, from time to time or at any time, in whatever amount they deem reasonable in their sole discretion. Each loan would be evidenced by a promissory note. The notes would either be paid upon consummation of the Company’s initial Business Combination, without interest, or, at the lender’s discretion, up to $1,500,000 of the notes (“Working Capital Loans”) may be converted upon consummation of the Company’s Business Combination into working capital Units at a price of $10.00 per Unit. If the Company do not complete a Business Combination, the loans would be repaid out of funds not held in the trust account, and only to the extent available.

As of March 31, 2025 and December 31, 2024, the Company had no borrowings under the Working Capital Loans.

Due to Related Parties

On May 21, 2024, the Company signed the offer letter with the CEO for compensation of $7,500 per month in cash and $10,000 per month in cash for the post-IPO period.

As of March 31, 2025 and December 31, 2024, due to the CEO for salary payable amounted to of $55,000 and $32,500, respectively.

On May 21, 2024, the Company signed the offer letter with the CFO for compensation of $5,000 per month in cash and $6,000 per month in cash for the post-IPO period. The CFO also paid expenses on behalf of the Company.

As of March 31, 2025 and December 31, 2024, due to the CFO including salary and reimbursement payable amounted to of $36,931 and $21,901, 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
-Topic 850
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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Reference 10: http://www.xbrl.org/2003/role/disclosureRef
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Reference 11: http://www.xbrl.org/2003/role/disclosureRef
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-Section 50
-Paragraph 1
-Subparagraph (b)
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-URI https://asc.fasb.org/1943274/2147483326/850-10-50-1

+ Details

ChampionsGate Acquisition Corp 10-Q