UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2023

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

OceanTech Acquisitions I Corp.

(Exact name of registrant as specified in its charter)

Delaware

001-40450

85-2122558

(State or other jurisdiction of

incorporation or organization)

(Commission File Number)

(I.R.S. Employer

Identification Number)

515 Madison Avenue, 8th Floor – Suite 8133

New York, New York

10022

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (929) 412-1272

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of Each Class:	Trading Symbol:	Name of Each Exchange on Which Registered:
Units, each consisting of one share of Class A common stock and one redeemable warrant	OTECU	The Nasdaq Stock Market LLC
Class A common stock, par value $0.0001 per share	OTEC	The Nasdaq Stock Market LLC
Warrants, each warrant exercisable for one share of Class A common stock for $11.50 per share	OTECW	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ ‌

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☒ No ☐

As of November 17, 2023, 3,497,475 shares Class A common stock, par value $0.0001 per share, and 0 shares of Class B common stock, par value $0.0001 per share, were issued and outstanding, respectively.

OCEANTECH ACQUISITIONS I CORP.

Quarterly Report on Form 10-Q

TABLE OF CONTENTS

		Page

PART I — FINANCIAL INFORMATION		1
Item 1.	Financial Statements	1
	Condensed Consolidated Balance Sheets as of September 30, 2023 (unaudited) and December 31, 2022	1
	Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2023, and 2022 (unaudited)	2
	Condensed Consolidated Statements of Changes in Stockholders’ Deficit for the Three and Nine Months Ended September 30, 2023, and 2022 (unaudited)	3
	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2023 and 2022 (unaudited)	4
	Notes to Condensed Consolidated Financial Statements (unaudited)	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	30
Item 4.	Control and Procedures	30
Item 6.	Exhibits	31
SIGNATURES		32

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

OCEANTECH ACQUISITIONS I CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS


	September 30,			December 31,
	2023			2022
	(Unaudited)			(Audited)
ASSETS:
Cash	$	74,916		$	35,806
Prepaid expense		78,220			179
Total current assets		153,136			35,985
Investments held in Trust Account		9,167,017			19,429,439
TOTAL ASSETS	$	9,320,153		$	19,465,424

LIABILITIES, TEMPORARY EQUITY AND STOCKHOLDERS’ DEFICIT:
Accounts payable and accrued expenses	$	2,968,535		$	1,614,363
Payable to Trust Account		90,298			—
Income tax payable		81,823			—
Excise tax payable		112,338			—
Promissory notes		927,957			—
Promissory notes – related party		448,039			323,039
Due to related parties		397,667			307,667
Total current liabilities		5,026,657			2,245,069
Other long-term liabilities		2,000,000			2,000,000
Deferred underwriting commissions		3,614,100			3,614,100
Warrant liabilities		496,310			661,747
Total Liabilities		11,137,067			8,520,916

Commitments and Contingencies (see Note 8)

Redeemable Common Stock
Class A common stock subject to possible redemption, 812,715 and 1,848,503 shares (at redemption value) at September 30, 2023 and December 31, 2022, respectively		9,167,017			19,419,552
Stockholders’ Deficit:
Preferred shares, $0.0001 par value; 1,000,000 shares authorized; no shares issued and outstanding		—			—
Class A common stock, $0.0001 par value; 100,000,000 shares authorized; 2,684,760 and 103,260 (excluding 812,715 and 1,848,503 shares subject to possible redemption) shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively		269			10
Class B common stock, $0.0001 par value; 10,000,000 shares authorized; no shares and 2,581,500 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively		—			259
Additional paid-in capital		1,732,737			2,248,291
Accumulated deficit		(12,716,937	)		(10,723,604	)
Total Stockholders’ Deficit		(10,983,931	)		(8,475,044	)
TOTAL LIABILITIES, TEMPORARY EQUITY AND STOCKHOLDERS’ DEFICIT	$	9,320,153		$	19,465,424

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

OCEANTECH ACQUISITIONS I CORP.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)


	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2023			2022			2023			2022

Operating and formation costs	$	616,315		$	658,976		$	2,089,023		$	1,412,604
Loss from operations		(616,315	)		(658,976	)		(2,089,023	)		(1,412,604	)

Other income:
Interest earned on investments in trust		116,580			354,619			516,603			433,795
Interest expense		(26,253	)		—			(39,857	)		—
Finance transaction costs		—			—			(464,670	)		—
Offering costs allocated to warrants		—			—			—			(3,600,000	)
Change in fair value of warrants		165,437			308,445			165,437			5,798,246
Total other income, net		255,764			663,064			177,513			2,632,041
(Loss) Income before taxes		(360,551	)		4,088			(1,911,510	)		1,219,437
Provision for income taxes		(43,011	)		—			(81,823	)		—
Net (loss) income	$	(403,562	)	$	4,088		$	(1,993,333	)	$	1,219,437

Weighted average shares outstanding of Class A common stock subject to possible redemption, basic and diluted		812,715			10,326,000			1,381,829			10,326,000
Basic and diluted net (loss) income per common stock, Class A subject to possible redemption	$	(0.12	)	$	0.00		$	(0.49	)	$	0.09

Weighted average shares outstanding of non-redeemable common stock, basic and diluted		2,684,760			2,684,760			2,684,760			2,684,760
Basic and diluted net (loss) income per non-redeemable common stock	$	(0.12	)	$	0.00		$	(0.49	)	$	0.09

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

OCEANTECH ACQUISITIONS I CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT

(UNAUDITED)

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2023


	Class A				Class B						Additional						Total
	Common Stock				Common Stock						Paid-in			Accumulated			Stockholders’
	Shares		Amount		Shares			Amount			Capital			Deficit			Deficit
Balance as of December 31, 2022		103,260	$	10		2,581,500		$	259		$	2,248,291			(10,723,604	)	$	(8,475,044	)
Contribution related to financing costs attributed to Aspire Securities Purchase Agreement		—		—		—			—			464,670			—			464,670
Remeasurement of Class A common stock to redemption value		—		—		—			—			(532,405	)		—			(532,405	)
Net loss		—		—		—			—			—			(1,052,192	)		(1,052,192	)
Balance as of March 31, 2023		103,260		10		2,581,500			259			2,180,556			(11,775,796	)		(9,594,971	)
Fair Value of Class A Common Shares to be transferred under Promissory Notes (Note 6)		—		—		—			—			107,100			—			107,100
Recognition of excise liability on trust redemptions		—		—		—			—			(112,338	)		—			(112,338	)
Remeasurement of Class A common stock to redemption value		—		—		—			—			(316,912	)		—			(316,912	)
Net loss		—		—		—			—			—			(537,579	)		(537,579	)
Balance as of June 30, 2023		103,260	$	10		2,581,500		$	259		$	1,858,406		$	(12,313,375	)	$	(10,454,700	)
Fair Value of Class A Common Shares to be transferred under Promissory Notes (Note 6)		—		—		—			—			6,300			—			6,300
Conversion of Class B common stock in Class A common stock		2,581,500		259		(2,581,500	)		(259	)		—			—			—
Remeasurement of Class A common stock to redemption value		—		—		—			—			(131,969	)		—			(131,969	)
Net loss		—		—		—			—			—			(403,562	)		(403,562	)
Balance as of September 30, 2023		2,684,760	$	269		—		$	—		$	1,732,737		$	(12,716,937	)	$	(10,983,931	)

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2022


	Class A				Class B				Additional						Total
	Common Stock				Common Stock				Paid-in			Accumulated			Stockholders’
	Shares		Amount		Shares		Amount		Capital			Deficit			Deficit
Balance as of December 31, 2021		103,260	$	10		2,581,500	$	259	$	—		$	(12,688,552	)	$	(12,688,283	)
Net income		—		—		—		—		—			4,449,036			4,449,036
Balance as of March 31, 2022		103,260	$	10		2,581,500	$	259	$	—		$	(8,239,516	)	$	(8,239,247	)
Proceeds in excess of fair value of private placements warrants		—		—		—		—		1,316,565			—			1,316,565
Fair value of Sponsor Shares transferred to extension investors		—		—		—		—		3,600,000						3,600,000
Accretion of Class A common stock subject to possible redemption		—		—		—		—		(1,548,900	)		—			(1,548,900	)
Net income		—		—		—		—		—			(3,233,687	)		(3,233,687	)
Balance as of June 30, 2022		103,260	$	10		2,581,500	$	259	$	3,367,665		$	(11,473,203	)	$	(8,105,269	)
Accretion of Class A common stock subject to possible redemption		—		—		—		—		—			(105,225	)		(105,225	)
Net income		—		—		—		—		—			4,088			4,088
Balance as of September 30, 2022		103,260	$	10		2,581,500	$	259	$	3,367,665		$	(11,574,340	)	$	(8,206,406	)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

OCEANTECH ACQUISITIONS I CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)


	For the Nine Months Ended September 30,
	2023			2022
Cash Flows from Operating Activities:
Net (loss) income	$	(1,993,333	)	$	1,219,437
Adjustments to reconcile net (loss) income to net cash used in operating activities:
Interest earned on investments in trust		(516,603	)		(433,795	)
Non-cash interest expense		39,857			—
Change in fair value of warrants		(165,437	)		(5,798,246	)
Finance transaction cost		464,670			3,600,000
Changes in operating assets and liabilities:
Prepaid assets		(78,041	)		230,869
Accounts payable and accrued expenses		1,354,172			489,447
Income tax payable		81,823			—
Due to related party		90,000			90,000
Net cash used in operating activities		(722,892	)		(602,288	)

Cash Flows from Investing Activities:
Investment of cash in trust account for extensions		(650,000	)		(1,548,900	)
Cash withdrawn from Trust Account for taxes and redemptions		11,519,323			149,000
Net cash provided by (used in) investing activities		10,869,323			(1,399,900	)

Cash Flows from Financing Activities:
Proceeds from issuance of promissory notes		1,001,500			—
Proceeds from issuance of promissory note to related party		125,000			160,000
Proceeds from private placement		—			1,548,900
Redemptions of Class A common stock		(11,233,821	)		—
Net cash (used in) provided by financing activities		(10,107,321	)		1,708,900

Net Change in Cash		39,110			(293,288	)
Cash - Beginning		35,806			322,128
Cash - Ending	$	74,916		$	28,840

Supplemental Disclosure of Non-cash Financing Activities:
Remeasurement of Class A common stock to redemption value	$	981,286		$	1,548,900
Recognition of excise tax on share redemptions	$	112,338		$	—
Debt discount recognized from fair value of Class A common stock to be transferred under Promissory Notes (Note 6)	$	113,400		$	—

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

OCEANTECH ACQUISITIONS I CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2023

(UNAUDITED)

Note 1—Description of Organization and Business Operations

OceanTech Acquisitions I Corp. (the “Company”) is a blank check company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses.

As of September 30, 2023, the Company had not commenced any operations. All activity for the period from February 3, 2021 (inception) through September 30, 2023, relates to the Company’s formation and the public offering consummated on June 2, 2021 (the “Initial Public Offering”), and, since the closing of the Initial Public Offering, a search for a business combination candidate. The Company will not generate any operating revenues until after the completion of its initial business combination, at the earliest. The Company will generate non-operating income in the form of interest income on both cash from the proceeds derived from the Initial Public Offering and investments held in trust.

The Company’s original sponsor was OceanTech Acquisitions I Sponsors, LLC (the “Original Sponsor”). On March 13, 2023, the Company’s sponsor changed to Aspire Acquisition LLC, a Delaware limited liability company (“Aspire” or the “Sponsor”) when Aspire acquired all of the Class B common stock and Private Placement Warrants from the Original Sponsor. As part of this transaction, Aspire assumed ownership of all agreements and obligations of the Original Sponsor, agreed to reimburse the original chief executive officer $25,000, and has agreed to pay the original chief financial officer $5,000 per month during the transition period.

On September 5, 2023, as further described below, all of Sponsor’s Class B common stock was converted to Class A common stock.

Financing

The registration statement for the Company’s Initial Public Offering was declared effective on May 27, 2021 (the “Effective Date”). On June 2, 2021, the Company consummated its Initial Public Offering of 10,000,000 units (the “Units” and, with respect to the Class A common stock included in the Units, the “Common Stock”) at a price of $10.00 per Unit, generating gross proceeds to the Company of $100,000,000, which is discussed in Note 3.

Simultaneously with the consummation of the Initial Public Offering and the sale of the Units, the Company consummated the private placement sale (“Private Placement”) of an aggregate 4,571,000 warrants (“Private Placement Warrants”), of which 3,871,000 Private Placement Warrants were purchased by the Original Sponsor and 700,000 Private Placement Warrants were purchased by Maxim Group LLC and/or its designees (“Maxim”), at a price of $1.00 per Private Placement Warrant, generating total proceeds of $4,571,000.

Transaction costs of the Initial Public Offering amounted to $7,482,451 consisting of $2,065,200 of underwriting discount, $3,614,100 of deferred underwriting discount, $1,033,633 in fair value of representative shares issued and $769,518 of other offering costs. Of the transaction costs, $690,542 were charged to operations for the portion related to warrants and $6,791,909 were included as offering costs and charged against equity.

The Company granted the underwriter in the Initial Public Offering a 45-day option to purchase up to 1,500,000 additional Units to cover over-allotments, if any. On June 17, 2021, the underwriter partially exercised the over-allotment option to purchase 326,000 additional Units (the “Over-Allotment Units”), generating an aggregate of gross proceeds of $3,260,000, and incurred $65,200 in cash underwriting fees.

On June 2, 2022, the Company closed an offering to private investors which included issuance of 1,548,900 Private Warrants at a price of $1.00 per warrant and transfer of 1,200,000 of Original Sponsor’s Class B common stock. Proceeds of the offering were deposited in the Company’s Trust Account for its public stockholders, representing $0.15 per public share, allowing the Company to extend the period of time it has to consummate its initial business combination (an “Extension”) by six months from June 2, 2022, to December 2, 2022. The Extension is permitted under the Company’s governing documents.

On August 10, 2022, the Company, OceanTech Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of the Company (“Merger Sub 1”), and the Original Sponsor, entered into a definitive Agreement and Plan of Merger (the “Captura Merger Agreement”) with Captura Biopharma, Inc., a Delaware corporation (“Captura”) and Michael Geranen, as seller representative (“Geranen”). Pursuant to the Captura Merger Agreement, upon the closing of the business combination, the Company would effect the merger of Merger Sub 1 with and into Captura, with Captura continuing as the surviving entity, as a result of which all of the issued and outstanding capital stock of Captura would be exchanged for shares of the Class A common stock of the Company upon the terms set forth as follows: Captura’s shareholders collectively shall be entitled to receive from the Company, in the aggregate, a number of Company’s securities with an aggregate value equal to (a) $200,000,000 minus (b) the amount, if any, by which the Captura’s net working capital amount exceeds the net working capital amount (but not less than zero), minus (c) the amount of Closing Net Indebtedness (as defined in the Captura Merger Agreement) minus (d) the amount of any transaction expenses, provided that the merger consideration otherwise payable to the Captura’s shareholders is subject to adjustment after the Closing in accordance with the terms of the Merger Agreement.

The obligations of the parties to consummate such business combination was subject to the satisfaction or waiver of certain customary closing conditions of the respective parties, including, without limitation: (a) the representations and warranties of the Company, Merger Sub 1 and Captura being true and correct subject to the materiality standards contained in the Captura Merger Agreement; (b) material compliance by such parties of their respective pre-closing covenants and agreements, subject to the standards contained in the Captura Merger Agreement; (c) the approval by the Company’s stockholders of such business combination; (d) the approval by the Captura’s stockholders of such business combination; I the absence of any Material Adverse Effect (as defined in the Captura Merger Agreement) with respect to the Company or with respect to Captura since the effective date of the Captura Merger Agreement that is continuing and uncured; (f) the election of the members of the post-closing board consistent with the provisions of the Captura Merger Agreement, a majority of which are to be independent in accordance with the Nasdaq rules; (g) the Company having at least $5,000,001 in tangible net assets upon the Closing; (h) the entry into certain ancillary agreements as of the Closing; (i) the lack of any notice or communication from, or position of, the SEC requiring the Company to amend or supplement the prospectus and proxy statement; and (j) the receipt of certain closing deliverables.

On October 13, 2022, parties to the Captura Merger Agreement mutually terminated the Captura Merger Agreement pursuant to Section 8.1(a) of the Captura Merger Agreement, effective immediately. Neither party was required to pay the other a termination fee as a result of the mutual decision to terminate the Captura Merger Agreement.

On November 15, 2022, the Company entered into a definitive Agreement and Plan of Merger (the “Majic Merger Agreement”) with Merger Sub 1, OceanTech Merger Sub 2, LLC, a Wyoming limited liability company and wholly owned subsidiary of the Company (“Merger Sub 2”), the Original Sponsor in the capacity as the representative for the stockholders of the Company (the “Company Representative”), Majic Wheels Corp., a Wyoming corporation ( “Majic”), and Jeffrey H. Coats, an individual, in the capacity as the representative for the Majic stockholders (the “Majic Representative”).

On November 29, 2022, the Company held a special meeting of stockholders. At the meeting, the Company’s stockholders approved a charter amendment to extend the date by which the Company must consummate its initial business combination from December 2, 2022 to June 2, 2023, subject to the approval of the board of directors of the Company, provided the Original Sponsor or its designees deposit into the Trust Account an amount equal to $0.067 per share for each public share or $125,000, prior to the commencement of each extension period. In connection with the extension stockholders holding 8,477,497 shares of common stock exercised their right to redeem their shares for a pro rata portion of the funds in the Trust Account. As a result, approximately $87,541,322 (approximately $10.32 per share) was removed from the Trust Account to pay such holders.

On December 1, 2022, December 30, 2022 and February 2, 2023, the Company deposited $125,000 into its Trust Account for its public stockholders, representing $0.067 per public share, allowing the Company to extend the period of time it has to consummate its initial business combination from December 2, 2022 to March 2, 2023.

On February 3, 2023, Majic, the Company, Merger Sub 1 and Merger Sub 2 mutually terminated the Majic Merger Agreement pursuant to Section 8.1(a) of the Majic Merger Agreement, effective immediately. Neither party was required to pay the other a termination fee as a result of the mutual decision to terminate the Majic Merger Agreement.

On March 2, 2023, the Company deposited $125,000 into its Trust Account for its public stockholders, representing $0.067 per public share, allowing the Company to extend the period of time it has to consummate its initial business combination by one month from March 2, 2023, to April 2, 2023.

On March 13, 2023, the Company’s sponsor changed from Original Sponsor to Sponsor when Aspire agreed to acquire all of the 2,581,500 shares of Class B common stock and 5,869,880 Private Placement Warrants from the Original Sponsor upon the closing of an initial business combination.

On March 31, 2023 and May 2, 2023, the Company deposited $125,000 into its Trust Account for its public stockholders, representing $0.067 per public share, allowing the Company to extend the period of time it has to consummate its initial business combination by one month from April 2, 2023, to June 2, 2023.

On May 2, 2023, the Company, R.B. Merger Sub Ltd., an Israeli company and a wholly owned subsidiary of the Company (“Merger Sub”), and Regentis Biomaterials Ltd., an Israeli company (individually, “Regentis” and, together with the Company, Merger Sub, collectively, the “Parties” and each referred to as a “Party”), entered into an Agreement and Plan of Merger (the “Merger Agreement”), pursuant to which, among other things, Merger Sub will merge with and into Regentis (the “Merger” or “Business Combination”), with Regentis continuing as the surviving entity after the Merger, as a result of which Regentis will become a direct, wholly-owned subsidiary of the Company (the “Proposed Transaction”).

On May 18, 2023, the Company and Sponsor, announced that, the Company entered into an unsecured, interest-free promissory note in favor of the Sponsor, pursuant to which the Sponsor will loan the Company $30,000 per month for up to 12, 1-month extensions, up to an aggregate of $360,000. (See below regarding the current extensions exercised.)

On May 30, 2023, the Company held a virtual special meeting of its stockholders, pursuant to due notice in that certain Proxy Statement on Schedule 14(a) filed May 10, 2023 (as amended, the “Extension Proxy”). At such special meeting, the Company stockholders approved the proposal for the Company to adopt and file with the Delaware Secretary of State of the State of Delaware an amended charter (the “Extension Amendment Proposal”), which the Company promptly filed following the stockholders’ approval of the Extension Amendment Proposal. Pursuant to the Company’s amended charter, the Company has the right to extend beyond June 2, 2023 (the “Original Termination Date”) by up to 12, 1-month extensions through June 2, 2024 (the “Outside Date”; each of the 12, 1-month extensions, an “Extension”, and each such extension date a “Deadline Date”, and the latest of such Deadline Dates, the “Extended Deadline”) the date by which the Company must (i) consummate a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination involving the Company and one or more businesses, (ii) cease its operations if it fails to complete a business combination, and (iii) unless the closing of the Company’s initial business combination shall have occurred, redeem or repurchase 100% of the Company’s Class A common stock included as part of the units sold in the Initial Public Offering. In connection with each Extension, the Company or Sponsor (or its affiliates or permitted designees) is required to deposit into the Trust Account $30,000 (collectively, the “Extension Payments”), and the Sponsor made a non-interest bearing, unsecured loan to the Company in the aggregate of $360,000 for payment of the Extension Payments.

Additionally, at such special meeting, the stockholders of the Company approved the proposal to amend the trust agreement of the Trust Account to extend the termination date for an additional twelve months, until June 2, 2024 (the “Trust Amendment Proposal). Upon approval of the Extension Amendment Proposal and the Trust Amendment Proposal by the Company’s stockholders, the Company and the Trustee of the Trust Account promptly entered into an amendment to the trust agreement to extend the termination date for an additional twelve months, until June 2, 2024.

In connection with the voting on the Extension Amendment Proposal and the Trust Amendment Proposal at this special meeting, holders of 1,035,788 shares of Class A common stock (the “Redeeming Stockholder”) exercised the right to redeem such shares. On June 2, 2023, the Company made cash payments to the Redeeming Stockholders totaling $11,233,821, representing approximately $10.84 per share. Following such payments to the Redeeming Stockholders, the Trust Account had a balance of approximately $8,814,443. The Company’s remaining shares of Class A common stock outstanding were 812,715.

On June 1, 2023 and June 27, 2023, the Company deposited $30,000, representing $0.037 per public share, into its Trust Account for its public stockholders, allowing the Company to extend the period of time it has to consummate its initial business combination by one month each from June 2, 2023 to August 2, 2023, as the first and second of twelve 1-month extensions permitted under the Company’s governing documents.

On July 7, 2023, the Company and Regentis executed Amendment No. 1 to the Merger Agreement to increase the merger consideration to $96 million from $95 million to account, in part, for the issuance of Regentis ordinary shares to Maxim pre-closing for the fee to which it would be entitled upon consummation of the business combination.

On July 10, 2023, the Company filed the initial Form S-4 with the SEC.

On July 25, 2023, the Company received written notice (the “Delisting Letter”) from the Nasdaq Capital Market (“Nasdaq”) that the Company had not regained compliance within 180 calendar days (or until July 24, 2023) in accordance with Nasdaq Listing Rule 5810(c)(3)(C) for compliance with Nasdaq Listing Rule 5550(b)(2) as the Company’s market value of listed securities for the thirty (30) consecutive business days, was below the required minimum of $35 million for continued listing on Nasdaq (the “MVLS Requirement”).

On July 27, 2023, the Company filed a Current Report on Form 8-K stating that the Company fully intends to appeal such determination by requesting a hearing to the Hearings Panel (the “Panel”), pursuant to the procedures set forth in the Nasdaq Listing Rule 5800 Series to stay the suspension of the Company’s securities and the filing of the Form 25-NSE pending the Panel’s decision, and on such date the Company requested the hearing, and wired the $20,000 fee to Nasdaq for the hearing, prior to 4:00 p.m. Eastern Time on August 1, 2023, as required in the Delisting Letter. The hearing with the Panel was then scheduled for September 21, 2023 (the “Hearing”).

On July 28, 2023, the Company deposited $30,000, representing $0.037 per public share, into its Trust Account for its public stockholders, allowing the Company to extend the period of time it has to consummate its initial business combination by one month from August 2, 2023 to September 2, 2023, as the third of twelve, 1-month extension permitted under the Company’s governing documents. On July 31, 2023, the Company filed the Current Report on Form 8-K disclosing the same.

On August 8, 2023, the Company filed a Preliminary Proxy Statement on Schedule 14(a) with the Securities and Exchange Commission (“SEC”) for stockholders to approve the founder share amendment proposal to amend the Company’s existing certificate of incorporation dated as of May 27, 2021, as amended on December 1, 2022 by that certain First Amendment to the Amended and Restated Certificate of Incorporation and as further amended on May 30, 2023 by that certain Second Amendment to the Amended and Restated Certificate of Incorporation, as may be further amended (collectively, the “Existing OTEC Charter”), to provide for the right of the holders of Class B common stock, par value $0.0001 per share, to convert such shares of Class B common stock into shares of Class A common stock, par value $0.0001 per share, on a one-to-one basis at the election of such holders (the “Founder Share Amendment Proposal”), rather than upon the closing of an initial business combination. The Company then filed a Definitive Proxy Statement on Schedule 14A on August 23, 2023 (the “Proxy Statement”) with the SEC, providing notice of a special meeting of stockholders to be held on September 5, 2023 to propose to amend the Existing OTEC Charter in accordance with the Founder Share Amendment Proposal, in order to authorize the Company to regain compliance with the MVLS Requirement.

On August 31, 2023, the Company deposited $30,000, representing $0.037 per public share, into its Trust Account for its public stockholders, allowing the Company to extend the period of time it has to consummate its initial business combination by one month from September 2, 2023 to October 2, 2023, as the fourth of twelve 1-month extensions permitted under the Company’s governing documents.

On September 5, 2023, the Company held a virtual special meeting of its stockholders following the notice provided by the Proxy Statement to amend the Existing OTEC Charter for the Founder Share Amendment Proposal. Following approval of the Founder Share Amendment Proposal by the Company’s stockholders, the Company promptly adopted and filed the related amendment to the Existing OTEC Charter with the Secretary of State of the State of Delaware. Effective as of September 5, 2023, the conversion of the Class B common stock to Class A common stock, resulted in the Company’s market value of securities increasing approximately $28,706,280 in addition to the Company’s then-current market value of securities being approximately $10,185,642, based on calculations utilizing the Company’s common stock closing price of $11.12 per share on August 28, 2023 to total approximately $38,891,922, above the required $35 million. The following ten consecutive business days after September 5, 2023, ended ahead of the Hearing.

On September 12, 2023, the Company filed Amendment No. 1 to the initial Form S-4 filed on July 10, 2023.

As previously disclosed in a Form 8-K filed September 14, 2023, on September 13, 2023, the Company received written notice (the “Notification Letter”) from Nasdaq stating that the Company currently does not meet the required minimum of 300 public holders for continued listing on Nasdaq under Nasdaq Listing Rule 5550(a)(3) (the “Public Holder Requirement”), and further stated that Nasdaq’s Panel would consider this matter in rendering a determination regarding the Company’s continued listing on Nasdaq at the Hearing already scheduled.

On September 21, 2023, the Company attended the Hearing to discuss the Delisting Letter and Notification Letter with the Panel. At the Hearing, the Company discussed its anticipated compliance with the Public Holder Requirement upon the closing of the Business Combination pursuant to the Merger Agreement with Regentis and the Merger Sub. The results of the Hearing are further discussed under Note 11 —Nasdaq Compliance.

On September 27, 2023, the Company deposited $30,000, representing $0.037 per public share, into its Trust Account for its public stockholders, allowing the Company to extend the period of time it has to consummate its initial business combination by one month from October 2, 2023 to November 2, 2023, as the fifth of twelve 1-month extensions permitted under the Company’s governing documents.

Liquidity and Going Concern

On September 30, 2023, the Company had cash of $74,916 and a working capital deficit of $4,873,521.

The Company’s liquidity needs up to September 30, 2023 were satisfied through the proceeds of $25,000 from the sale of the Founder Shares (as defined in Note 5), loans from related parties and outside investors totalling $1,375,996 and $323,039 as of September 30, 2023 and December 31, 2022, respectively, and from the net proceeds from the consummation of the Initial Public Offering and the Private Placement held outside of the Trust Account.

Until the consummation of a business combination, the Company will be using the funds not held in the Trust Account for identifying and evaluating prospective acquisition candidates, performing due diligence on prospective target businesses, paying for travel expenditures, selecting the target business to acquire, and structuring, negotiating and consummating the Business Combination. The Company will need to raise additional capital through loans or additional investments from its Sponsor, stockholders, officers, directors, or third parties. The Company’s Sponsor, officers and directors 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, to meet the Company’s working capital needs. Accordingly, the Company may not be able to obtain additional financing. If the Company is unable to raise additional capital, it may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing operations, suspending the pursuit of a potential transaction, and reducing overhead expenses.

In connection with the Company’s assessment of going concern considerations in accordance with Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 205-40, Presentation of Financial Statements—Going Concern, the Company has until November 2, 2023, to consummate an initial business combination. It is uncertain that the Company will be able to consummate an initial business combination by this time. If an initial business combination is not consummated by this date, there will be a mandatory liquidation and subsequent dissolution of the Company. Additionally, the Company may not have sufficient liquidity to fund the working capital needs of the Company through one year from the issuance of these condensed consolidated financial statements. Management has determined that the liquidity condition and mandatory liquidation, should an initial business combination not occur, and potential subsequent dissolution raises substantial doubt about the Company’s ability to continue as a going concern for the next twelve months from the issuance of these financial statements. No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to liquidate after June 2, 2024. The Company’s Sponsor, officers and directors 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, to meet the Company’s working capital.

Risks and Uncertainties

In February 2022, the Russian Federation and Belarus commenced a military action with the country of Ukraine. As a result of this action, various nations, including the United States, have instituted economic sanctions against the Russian Federation and Belarus.

The escalation in October 2023 of the conflict between Israel and Hamas also could cause disruptions to global economic conditions and effect the stability of the Middle East region. It is unknown how long any of these disruptions will continue and whether such disruptions will become more severe.

The impact of these conflicts on the world economy is not determinable as of the date of these financial statements and the specific impact on the Company’s financial condition, results of operations, and cash flows is also not determinable as of the date of these condensed financial statements.

Inflation Reduction Act of 2022

On August 16, 2022, the Inflation Reduction Act of 2022 (the “IR Act”) was signed into federal law. The IR Act provides for, among other things, a new U.S. federal 1% excise tax on certain repurchases of stock by publicly traded U.S. domestic corporations and certain U.S. domestic subsidiaries of publicly traded foreign corporations occurring on or after January 1, 2023. The excise tax is imposed on the repurchasing corporation itself, not its shareholders from which shares are repurchased. The amount of the excise tax is generally 1% of the fair market value of the shares repurchased at the time of the repurchase. However, for purposes of calculating the excise tax, repurchasing corporations are permitted to net the fair market value of certain new stock issuances against the fair market value of stock repurchases during the same taxable year. In addition, certain exceptions apply to the excise tax. The U.S. Department of the Treasury (the “Treasury”) has been given authority to provide regulations and other guidance to carry out and prevent the abuse or avoidance of the excise tax.

Any redemption or other repurchase that occurs after December 31, 2022, in connection with a business combination, extension vote or otherwise, may be subject to the excise tax. Whether and to what extent the Company would be subject to the excise tax in connection with a business combination, extension vote or otherwise would depend on a number of factors, including (i) the fair market value of the redemptions and repurchases in connection with the business combination, extension or otherwise, (ii) the structure of a business combination, (iii) the nature and amount of any “PIPE” or other equity issuances in connection with a business combination (or otherwise issued not in connection with a business combination but issued within the same taxable year of a business combination) and (iv) the content of regulations and other guidance from the Treasury. In addition, because the excise tax would be payable by the Company and not by the redeeming holder, the mechanics of any required payment of the excise tax have not been determined. The foregoing could cause a reduction in the cash available on hand to complete the Business Combination and in the Company’s ability to complete the Business Combination.

As discussed above, on May 30, 2023, holders of 1,035,788 shares of Common Stock elected to redeem their shares in connection with the Extension. As a result, $11,233,821 was removed from the Company’s Trust Account to pay such holders. Management has evaluated the requirements of the IR Act and the Company’s operations and has determined that a liability of $112,338 should be recorded for the excise tax in connection with the above mentioned redemptions. This liability will be reviewed and remeasured at each subsequent reporting period.

Note 2 — Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X of the Securities and Exchange Commission (the “SEC”). Certain information or footnote disclosures normally included in financial statements prepared in accordance with 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 the Company’s management, the unaudited financial statements as of September 30, 2023, and for the three and six months ended September 30, 2023 include all adjustments, which are only of a normal and recurring nature, necessary for a fair statement of the financial position of the Company as of September 30, 2023, and its results of operations and cash flows for the three and nine months ended September 30, 2023. The results of operations for the three and nine months ended September 30, 2023, are not necessarily indicative of the results to be expected for the full fiscal year ending December 31, 2023 or any future interim period.

Principles of Consolidation

The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Merger Sub 1 and Merger Sub 2. All significant intercompany balances and transactions have been eliminated in consolidation.

Emerging Growth Company

The Company is an “emerging growth company,” as defined in Section2(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 auditor 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, Section102(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 an emerging growth 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 standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s unaudited condensed consolidated 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 these unaudited condensed consolidated financial statements in conformity with 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 consolidated financial statements and the reported amounts of revenues and 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 consolidated financial statements is the determination of 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.

Cash and Cash Equivalents

The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company did not have cash equivalents as of September 30, 2023 and December 31, 2022.

Trust Account

Upon the closing of the Initial Public Offering and the Private Placement, $104.3 million ($10.10 per Unit) of the net proceeds of the Initial Public Offering and certain of the proceeds of the Private Placement were held in the Trust Account located in the United States with Continental Stock Transfer & Trust Company acting as trustee, and invested only in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act 1940, as amended (the “Investment Company Act”), which will be invested only in direct U.S. government treasury obligations, as determined by the Company, until the earlier of: (i) the completion of the Business Combination and (ii) the distribution of the Trust Account as described below.

Upon closing of the offering of the Private Warrants on June 2, 2022 (as described above) an additional $1.5 million (or $0.15 per Class A share subject to redemption) was placed in the Trust Account to provide for the Extension as described above.

In connection with the extension vote at the special meeting of stockholders of the Company on November 29, 2022, stockholders holding 8,477,497 shares of common stock exercised their right to redeem their shares for a pro rata portion of the funds in the Trust Account. As a result, $87,541,321 (approximately $10.32 per share) was removed from the Trust Account to pay such holders.

On December 1, 2022, the Company caused to be deposited $125,000 into its Trust Account for its public stockholders, representing $0.067 per public share, allowing the Company to extend the period of time it has to consummate its initial business combination by one month from December 2, 2022 to January 2, 2023.

On December 30, 2022, The Company caused to be deposited $125,000 into its Trust Account for its public stockholders, representing $0.067 per public share, allowing the Company to extend the period of time it has to consummate its initial business combination by one month from January 2, 2023, to February 2, 2023.

On February 2, 2023, the Company caused to be deposited $125,000 into the Company’s Trust Account for its public stockholders, representing $0.067 per public share, allowing the Company to extend the period of time it has to consummate its initial business combination by one month from February 2, 2023 to March 2, 2023.

On March 2, 2023, the Company caused to be deposited $125,000 into the Company’s Trust Account for its public stockholders, representing $0.067 per public share, allowing the Company to extend the period of time it has to consummate its initial business combination by one month from March 2, 2023 to April 2, 2023.

On March 31, 2023, the Company caused to be deposited $125,000 into the Company’s Trust Account for its public stockholders, representing $0.067 per public share, allowing the Company to extend the period of time it has to consummate its initial business combination by one month from April 2, 2023 to May 2, 2023.

On May 2, 2023, the Company caused to be deposited $125,000 into its Trust Account for its public stockholders, representing $0.067 per public share, allowing the Company to extend the period of time it has to consummate its initial business combination by one month from May 2, 2023, to June 2, 2023.

On June 1, 2023, the Company caused to be deposited $30,000, representing $0.037 per public share, into its Trust Account for its public stockholders, allowing the Company to extend the period of time it has to consummate its initial business combination by one month from June 2, 2023 to July 2, 2023, as the first of twelve one-month extensions permitted under the Company’s governing documents.

On June 27, 2023, the Company caused to be deposited $30,000, representing $0.037 per public share, into its Trust Account for its public stockholders, allowing the Company to extend the period of time it has to consummate its initial business combination by one month from July 2, 2023 to August 2, 2023, as the second of twelve, 1-month extensions permitted under the Company’s governing documents.

On July 28, 2023, the Company caused to be deposited $30,000, representing $0.037 per public share, into its Trust Account for its public stockholders, allowing the Company to extend the period of time it has to consummate its initial business combination by one month from August 2, 2023 to September 2, 2023, as the third of twelve, 1-month extension permitted under the Company’s governing documents.

On August 30, 2023, the Company caused to be deposited $30,000, representing $0.037 per public share, into its Trust Account for its public stockholders, allowing the Company to extend the period of time it has to consummate its initial business combination by one month from September 2, 2023 to October 2, 2023, as the fourth of twelve, 1-month extension permitted under the Company’s governing documents.

On September 27, 2023, the Company caused to be deposited $30,000, representing $0.037 per public share, into its Trust Account for its public stockholders, allowing the Company to extend the period of time it has to consummate its initial business combination by one month from October 2, 2023 to November 2, 2023, as the fifth of twelve, 1-month extension permitted under the Company’s governing documents.

Offering Costs

Offering costs consisted of legal, accounting, underwriting and other costs incurred that were directly related to the Initial Public Offering. Offering costs are allocated to the separable financial instruments issued in the Initial Public Offering based on a relative fair value basis, compared to total proceeds received. Offering costs associated with warrant liabilities are expensed as incurred, presented as non-operating expenses in the unaudited condensed consolidated statements of operations. Offering costs associated with the issuance of Class A common stock subject to possible redemption were charged to temporary equity upon the completion of the Initial Public Offering. The Company classifies deferred underwriting commissions as non-current liabilities as their liquidation is not reasonably expected to require the use of current assets or require the creation of current liabilities.

In connection with the Extension payment on June 2, 2022, the Original Sponsor transferred 1,200,000 of previously issued common stock (as defined in Note 9) from the Founder Shares (as defined in Note 5) to the investors who participated in the Initial Public Offering. The fair value of the Founder Shares (as defined in Note 5) was determined to be an offering cost in accordance with Staff Accounting Bulletin Topic 5A and 5T. Accordingly, the offering cost was be allocated to the only financial instruments issued, which were private placement warrants. Offering costs allocated to derivative warrant liabilities are expensed as incurred in the statement of operations.

Fair Value of Financial Instruments

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

Derivative Financial Instruments

The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with ASC Topic 815, “Derivatives and Hedging”. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value on the grant date and is then re-valued at each reporting date, with changes in the fair value reported in the unaudited condensed consolidated statements of operations. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative liabilities are classified in the balance sheets as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date.

Fair Value Measurements

Fair value is defined as the price that would be received for sale of an asset or paid to transfer of a liability, in an orderly transaction between market participants at the measurement date. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include:

●

Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets;

●

Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and

●

Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

Net (Loss) Income Per Common Stock

The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share.” The Company has two classes of shares, which are referred to as Class A common stock and Class B common stock. Income and losses are shared pro rata between the two classes of shares. Net (loss) income per common stock is calculated by dividing the net (loss) income by the weighted average shares of common stock outstanding for the respective period.

The calculation of diluted net (loss) income does not consider the effect of the warrants underlying the Units sold in the Initial Public Offering and the private placement warrants to purchase an aggregate of 16,543,700 shares for the three and nine months ended September 30, 2023 and 2022 of Class A common stock subject to possible redemption in the calculation of diluted (loss) income per share, because they are contingent on future events and their inclusion would be anti-dilutive under the treasury stock method. As a result, diluted net (loss) income per share is the same as basic net (loss) income per share for the three and nine months ended September 30, 2023 and 2022. Remeasurement associated with the redeemable Class A common stock is excluded from earnings per share as the redemption value approximates fair value.

The basic and diluted (loss) income per common stock is calculated as follows:

	For the Three Months Ended
	September 30,
	2023			2022
Common stock subject to possible redemption
Numerator:
Net (loss) income allocable to Class A common stock subject to possible redemption	$	(93,776	)	$	3,244
Denominator:
Weighted Average Redeemable Class A common stock, basic and diluted		812,715			10,326,000
Basic and Diluted net (loss) income per share, redeemable Class A common stock	$	(0.12	)	$	0.00

Non-redeemable common stock
Numerator:
Net (loss) income allocable to non-redeemable common stock	$	(309,786	)	$	844
Denominator:
Weighted Average non-redeemable common stock, basic and diluted		2,684,760			2,684,760
Basic and diluted net (loss) income per share, common stock	$	(0.12	)	$	0.00

	For the Nine Months Ended
	September 30,
	2023			2022
Common stock subject to possible redemption
Numerator:
Net (loss) income allocable to Class A common stock subject to possible redemption	$	(677,336	)	$	967,807
Denominator:
Weighted Average Redeemable Class A common stock, basic and diluted		1,381,829			10,326,000
Basic and Diluted net (loss) income per share, redeemable Class A common stock	$	(0.49	)	$	0.09

Non-redeemable common stock
Numerator:
Net (loss) income allocable to non-redeemable common stock	$	(1,315,997	)	$	251,630
Denominator:
Weighted Average non-redeemable common stock, basic and diluted		2,684,760			2,684,760
Basic and diluted net (loss) income per share, common stock	$	(0.49	)	$	0.09

Income Taxes

The Company accounts for income taxes under ASC 740, “Income Taxes.” ASC 740, Income Taxes, requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the unaudited condensed consolidated financial statements and tax basis of assets and liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carry forwards. ASC 740 additionally requires a valuation allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not be realized. As of September 30, 2023 and December 31, 2022, the Company’s deferred tax asset had a full valuation allowance recorded against it. Our effective tax rate was (11.93%) and 0.00% for the three months ended September 30, 2023 and 2022, respectively. Our effective tax rate was (4.28%) and 0.00% for the nine months ended September 30, 2023 and 2022, respectively. The effective tax rate differs from the statutory tax rate of 21% for the three and nine months ended September 30, 2023 and 2022, due to changes in fair value in warrant liability, warrant issuance costs, and the valuation allowance on the deferred tax assets.

While ASC 740 identifies usage of an effective annual tax rate for purposes of an interim provision, it does allow for estimating individual elements in the current period if they are significant, unusual or infrequent. Computing the effective tax rate for the Company is complicated due to the potential impact of the timing of any Business Combination expenses and the actual interest income that will be recognized during the year. The Company has taken a position as to the calculation of income tax expense in a current period based on ASC 740-270-25-3 which states, “If an entity is unable to estimate a part of its ordinary income (or loss) or the related tax (benefit) but is otherwise able to make a reasonable estimate, the tax (or benefit) applicable to the item that cannot be estimated shall be reported in the interim period in which the item is reported.” The Company believes its calculation to be a reliable estimate and allows it to properly take into account the usual elements that can impact its annualized book income and its impact on the effective tax rate. As such, the Company is computing its taxable income (loss) and associated income tax provision based on actual results through September 30, 2023.

ASC 740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position 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. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim period, disclosure and transition.

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 September 30, 2023 and December 31, 2022. 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 has identified the United States as its only “major” tax jurisdiction. The Company is subject to income taxation by major taxing authorities since inception. These examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions and compliance with federal and state tax laws. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months.

Redeemable Share Classification

All of the 10,326,000 Class A common stock sold as part of the Units in the Initial Public Offering contain a redemption feature which allows for the redemption of such public shares in connection with the Company’s liquidation, if there is a stockholder vote or tender offer in connection with the Business Combination and in connection with certain amendments to the Company’s amended and restated certificate of incorporation. In accordance with SEC and its staff’s guidance on redeemable equity instruments, which has been codified in ASC 480-10-S99, redemption provisions not solely within the control of the Company require common stock subject to redemption to be classified outside of permanent equity. Given that the Class A common stock was issued with other freestanding instruments (i.e., public warrants), the initial carrying value of Class A common stock classified as temporary equity is the allocated proceeds based on the guidance in FASB ASC Topic 470-20, “Debt – Debt with Conversion and Other Options.”

Immediately upon the closing of the Initial Public Offering, the Company recognized the accretion from initial book value to redemption amount, which approximates fair value. The change in the carrying value of Class A common stock subject to possible redemption resulted in charges against additional paid-in capital (to the extent available) and accumulated deficit and Class A common stock.

As of September 30, 2023 and December 31, 2022, the Class A common stock reflected on the balance sheets are reconciled in the following table:


	September 30, 2023					December 31, 2022
	Shares		Amount			Shares		Amount
As of beginning of the period	1,848,503		$	19,419,552		10,326,000		$	104,292,600
Less:
Extension redemptions on May 27, 2023 and November 29, 2022, respectively	(1,035,788	)		(11,233,821	)	(8,477,497	)		(87,541,322	)
Plus:
Remeasurement of carrying value to redemption value attributable to:
Accretion of carrying value to redemption value	—			981,286		—			2,668,274
Contingently redeemable Class A common stock subject to possible redemption	812,715		$	9,167,017		1,848,503		$	19,419,552

Receivable from Sponsor and Payable to Trust Account

During the nine months ended September 30, 2023, the Company erroneously overdrew from the Trust Account amounts allocated for tax payments. Accordingly, at September 30, 2023, the Company had an amount payable to the Trust Account in the amount of $90,298, which is fully allocable to the contingently redeemable Class A common stock subject to possible redemption. The payable to trust is to be funded by the Sponsor, and corresponding receivable from the Sponsor has been included within the Investments held in Trust Account line on the accompanying condensed consolidated balance sheet at September 30, 2023. This amount will be deposited during the following fiscal quarter.

Debt discounts

Debt discounts relate to the issuance costs of the promissory notes to non-related parties (see Note 6), and are included in the condensed consolidated balance sheets as a direct deduction from the face amount of the promissory notes. Debt discounts are amortized over the term of the related promissory notes and included in the interest expense.

Recent Accounting Pronouncements

In August 2020, the FASB issued Accounting Standards Update (“ASU”) 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06”) to simplify accounting for certain financial instruments. ASU 2020-06 eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity. The new standard also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity’s own equity. ASU 2020-06 amends the diluted earnings per share guidance, including the requirement to use the if-converted method for all convertible instruments. ASU 2020-06 is effective for fiscal years beginning after December 15, 2023 and should be applied on a full or modified retrospective basis, with early adoption permitted beginning on January 1, 2021. The Company is currently assessing the impact, if any, that ASU 2020-06 would have on its financial position, results of operations or cash flows.

Management does not believe that any other recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying unaudited condensed consolidated financial statements.

Note 3 — Initial Public Offering

On June 2, 2021, the Company consummated its Initial Public Offering of 10,000,000 Units. Each Unit consists of one share of Class A common stock of the Company, par value $0.0001 per share, and one redeemable warrant of the Company (“Warrant”), each Warrant entitling the holder thereof to purchase one Class A common stock for $11.50 per share. The Units were sold at a price of $10.00 per Unit, generating gross proceeds to the Company of $100,000,000.

On June 17, 2021, the underwriter partially exercised the over-allotment option and purchased an additional 326,000 Over-Allotment Units. The Units were sold at a price of $10.00 per Unit, generating gross proceeds to the Company of $3,260,000.

Note 4 — Private Placement

On June 2, 2021, simultaneously with the closing of the Initial Public Offering and the sale of the Units, the Company consummated the Private Placement of an aggregate 4,571,000 Private Placement Warrants, of which 3,871,000 Private Placement Warrants were purchased by the Original Sponsor and 700,000 Private Placement Warrants were purchased by Maxim at a price of $1.00 per Private Placement Warrant, generating total proceeds of $4,571,000.

On June 17, 2021, the underwriter partially exercised the over-allotment option and purchased an additional 326,000 Over-Allotment Units. Simultaneously with the closing of the exercise of the overallotment option, the Company consummated the Private Placement of an aggregate of 97,800 Private Placement Warrants, of which 74,980 Private Placement Warrants were purchased by the Original Sponsor and 22,820 Private Placement Warrants were purchased by Maxim at a purchase price of $1.00 per Private Placement Warrant, generating gross proceeds of $97,800.

On June 2, 2022, the Company closed an offering to private investors which included issuance of 1,548,900 Private Warrants at a price of $1.00 per warrant.

The Private Placement Warrants (and the underlying securities) are identical to the public warrants sold as part of the Units in the Initial Public Offering, except as otherwise disclosed in the Registration Statement. No underwriting discounts or commissions were paid with respect to such sale. The issuance of the Private Placement Warrants was made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act of 1933, as amended.

Note 5 — Related Party Transactions

Founder Shares

In February 2021, the Original Sponsor paid $25,000 to cover certain offering costs in consideration for 2,875,000 Class B shares (the “Founder Shares”). The number of Founder Shares outstanding was determined based on the expectation that the total size of the Initial Public Offering would be a maximum of 11,500,000 Units if the underwriter’s over-allotment option is exercised in full, and therefore that such Founder Shares would represent 20% of the outstanding shares after the Initial Public Offering. Thus, up to 375,000 of the Founder Shares were subject to forfeiture depending on the extent to which the underwriter’s over-allotment option was exercised. On June 21, 2021, the underwriter partially exercised its over-allotment option, purchasing an additional 326,000 Units. On June 21, 2021, the underwriter forfeited the right to purchase the remaining Units of the over-allotment option, and hence 293,500 founder shares of Class B common stock were subsequently forfeited, resulting in 2,581,500 outstanding Founder Shares.

Concurrently with the issuance of Private Warrants on June 2, 2022, the Original Sponsor committed to transfer 1,200,000 of Class B shares previously issued and outstanding as additional incentive to participants in the Extension Offering. The Company accounted for the Original Sponsor shares transferred to the participants in the Extension Offering at Fair Value as a charge directly to stockholder’s equity. The Company estimated the fair value of these shares to be $3,600,000 or $3 per share.

In connection with the change in sponsor to Aspire on March 13, 2023, the Company estimated the aggregate fair value of the 2,581,500 founders’ shares sold to Aspire to be $464,670 or $0.18 per share. The excess of the fair value of the Founder Shares was determined to be a contribution to the Company from the Sponsor in accordance with Staff Accounting Bulletin (“SAB”) Topic 5T. As this transaction is directly related to the business combination, the costs related to the transaction were included as transaction finance costs in the statement of operations.

Upon the closing of the Initial Business Combination, Sponsor shall also convey (i) 250,000 (two hundred and fifty thousand) shares of Class B common stock to the equityholders of the Original Sponsor, as of the Effective Date (the “Original Sponsor Equityholders”), pro rata based on the Original Sponsor Equityholders’ underlying interest in the Company’s Class B common stock, and (ii) 250,000 (two hundred and fifty thousand) Private Placement Warrants to the Original Sponsor Equityholders, pro rata based on the Original Sponsor Equityholders’ underlying interest in the Company’s Private Placement Warrants as of the Effective Date.

The Company’s initial stockholders agreed not to transfer, assign or sell any of their Founder Shares until the earlier to occur of: (i) one year after the date of the consummation of the initial Business Combination or (ii) the date on which the Company consummates a liquidation, merger, stock exchange or other similar transaction which results in all of the stockholders having the right to exchange their shares of Class A common stock for cash, securities or other property. Any permitted transferees will be subject to the same restrictions and other agreements of the initial stockholders with respect to any Founder Shares. Notwithstanding the foregoing, if the closing price of the shares of 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 150 days after the initial Business Combination, the Founder Shares will no longer be subject to such transfer restrictions.

Promissory Notes—Related Party

On February 14, 2021, the Original Sponsor agreed to loan the Company up to $300,000 to be used for a portion of the expenses of the Initial Public Offering. This loan is non-interest bearing, unsecured and was due at the closing of the Initial Public Offering and the Original Sponsor has not demanded payment of the note through the date of this filing. As of September 30, 2023 and December 31, 2022, $448,039 and $323,039 were outstanding under the promissory notes, respectively.

Related Party Loans

In order to finance transaction costs in connection with an intended initial Business Combination, the sponsor, an affiliate of the sponsor or certain of the Company’s officers and directors may, but is not obligated to, loan the Company funds as may be required (the “Working Capital Loans”). If the Company completes an initial Business Combination, the Company would repay such loaned amounts out of the proceeds of the Trust Account released to the Company. Otherwise, such loans would be repaid only out of funds held outside the Trust Account. In the event that the initial Business Combination does not close, the Company may use a portion of the working capital held outside the Trust Account to repay such loaned amounts but no proceeds from the Trust Account would be used to repay such loaned amounts. Up to $1,500,000 of such loans may be convertible into Private Placement Warrants of the post Business Combination entity, at a price of $1.00 per warrant at the option of the lender. The warrants would be identical to the Private Placement Warrants issued to the Sponsor. As of September 30, 2023 and December 31, 2022, no such Working Capital Loans were outstanding.

On May 18, 2023, the Company and the Sponsor, announced that, the Company entered into an unsecured, interest-free promissory note in favor of the Sponsor, pursuant to which the Sponsor will loan the Company $30,000 per month for up to 12, 1-month extension, up to an aggregate of $360,000. No amounts have been drawn under this promissory note as of September 30, 2023.

Administrative Support Agreement

The Company has agreed to pay our sponsor a total of $10,000 per month for office space, utilities and secretarial and administrative support. The administrative support agreement began on the day the Company first listed on the Nasdaq Capital Market and continue monthly until the completion of the Company’s initial Business Combination or liquidation of the Company. As of September 30, 2023 and December 31, 2022, the Company owed $397,667 and $307,667 under the administrative support agreement, respectively. For the three and nine months ended September 30, 2023, the Company incurred $30,000 and $90,000 in administrative support fees, respectively. For the three and nine months ended September 30, 2022, the Company incurred $30,000 and $90,000 in administrative support fees, respectively.

SEC Form 10-Q filed by OceanTech Acquisitions I Corp.