v3.25.3
Commitments and Contingencies
 9 Months Ended
Sep. 30, 2025
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies

Note 6 — Commitments and Contingencies

 

Broker Dealer Agreements

 

The Company entered into seven broker dealer agreements through September 30, 2025, for the purposes of identifying a target company (“Target”) in connection with the Company’s initial business combination. While the terms of these agreements vary, each agreement reflects that the broker dealer (the “Finder”) will be entitled to a fee if they identify potential targets with which the Company completes a business combination. As of September 30, 2025 and December 31, 2024, the Company had not accrued any amounts related to any broker dealer agreements. None of the Finders are entitled to any fee.

 

Consulting Agreements

 

The Company entered into nineteen consulting agreements through September 30, 2025.

 

With respect to seventeen of the nineteen consulting agreements, during the term of each agreement, the consultant (“Consultant”) will advise the Company concerning matters related to qualifying business combinations, including services such as valuation, diligence and general advice with respect to the business, operations and financial conditions of any such counterparty to a qualifying business combination. Upon closing of an initial business combination, the Company will pay the Consultant a base fee of $350,000. In lieu of, and not in addition to the base fee, the Company will pay a bonus fee of $1,000,000 if the Company and the Consultant mutually determine and agree that the Consultant will provide advice or services that are of a different kind than those contemplated in the agreement. In lieu of and not in addition to the base fee and bonus fee, the Company will pay to the Consultant an additional fee equal to 0.5% of the pre-money equity value of the Target if the Company and the Consultant mutually determine and agree that the Consultant provided, or will provide, material support in connection with the evaluation, negotiation, execution or marketing of an initial business combination that is ultimately consummated by the Company. Payment to the Consultant is dependent upon the closing of an initial business combination.

 

On August 3, 2022, the Company entered into a consulting agreement. During the term of this agreement, the Consultant will advise the Company concerning matters related to qualifying business combinations, including services such as valuation, diligence and general advice with respect to the business, operations and financial conditions of any such counterparty to a qualifying business combination. As consideration for the services performed by the Consultant during the term of the agreement, upon the closing of an initial business combination, the Company shall pay to the Consultant a fee equal to one percent (1%) of the pre-money equity value of the Target, as stated in the Agreement and Plan of Merger executed between the Company and the Target (which such pre-money equity value shall be determined in a manner consistent with disclosures set forth in the proxy statement/prospectus filed in connection with such initial business combination). Payment to the Consultant is dependent upon the closing of an initial business combination.

 

On October 25, 2022, the Company entered into a consulting agreement. During the term of this agreement, the consultant (“Consultant”) will advise the Company concerning matters related to qualifying business combinations, including services such as valuation, diligence and general advice with respect to the business, operations and financial conditions of any such counterparty to a qualifying business combination. In consideration for the services performed by the Consultant during the term, upon the closing of an initial business combination, the Company shall pay to the Consultant, in shares at close, 100,000 shares of the surviving entity.

 

As of September 30, 2025 and December 31, 2024, no work has been performed related to any of the aforementioned consulting agreements and thus the Company did not accrue any amounts related to these agreements.

 

Business Combination Agreement

 

On January 28, 2025, the Company, Roth CH Holdings, Inc. (the “Domestication Sub”), Roth CH Merger Sub, Inc. (the “Merger Sub”) and SharonAI Inc, a Delaware Corporation (the “Target”) entered into the business combination agreement, pursuant to which, subject to the terms and conditions set forth therein, (a) Roth shall continue out of the Cayman Islands and into the State of Delaware so as to re-domicile as and become a Delaware corporation by means of a merger (the “Domestication Merger”) of Roth with and into Domestication Sub, with the Domestication Sub as the surviving company (the “Domesticated Parent”), (b) upon the Domestication Merger, Domesticated Parent shall change its name to “SharonAI Holdings, Inc.” and, thereafter, (c) the Merger Sub shall be merged with and into SharonAI (together, the “Business Combination”), with SharonAI as the surviving company (the “Surviving Corporation”). The Surviving Corporation shall become a wholly-owned subsidiary of the Domesticated Parent.

 

Pursuant to the terms of the Business Combination Agreement, upon the consummation of the Business Combination on the Closing Date:

 

● Each share of SharonAI Series A Preferred Stock shall be converted into the right to receive a number of shares of Class B Common Stock equal to the Conversion Ratio.

 

● Each share of SharonAI Series B Preferred Stock shall, in accordance with SharonAI’s charter documents, be converted into the right to receive a number of shares of Roth Class A Ordinary Common Stock equal to: (i) the Conversion Ratio multiplied by (ii) the number of shares of SharonAI Common Stock issuable upon conversion of such share of SharonAI Series B Preferred Stock as of immediately prior to the closing.

 

● Each SharonAI Stock Right shall be cancelled and converted into a right to acquire, subject to substantially the same terms and conditions as were applicable under such SharonAI Stock Right, the number of shares of Roth Class A Ordinary Common Stock, determined by multiplying the number of shares of SharonAI Common Stock subject to such SharonAI Stock Right as of immediately prior to the effective time by the Conversion Ratio, with an exercise price per share of Roth Class A Ordinary Common Stock, if applicable, equal to (A) the exercise price per share of SharonAI Common Stock of such SharonAI Stock Right divided by (B) the Conversion Ratio (a “Converted Stock Right”).

 

● The “Conversion Ratio” is the quotient obtained by dividing (a) the number of shares constituting the Aggregate Merger Consideration, which is approximately 560,835,633 shares of Roth Common Stock, by (b) the number of shares constituting the “Aggregate Fully Diluted SharonAI Capital Stock”, which means: the sum, without duplication, of (a) all shares of SharonAI Common Stock that are issued and outstanding immediately prior to the Effective Time; plus (b) the aggregate number of shares of SharonAI Series A Preferred Stock that are issued and outstanding immediately prior to the effective time; plus (c) the aggregate number of shares of SharonAI Common Stock issuable upon conversion of all shares of SharonAI Series B Preferred Stock that are issued and outstanding immediately prior to the effective time; plus (d) the aggregate number of shares of SharonAI Common Stock issuable upon full conversion, exercise, settlement or exchange of any SharonAI Stock Rights outstanding immediately prior to the effective time directly or indirectly convertible into or exchangeable or exercisable or potentially settled for shares of SharonAI Common Stock.

 

On May 23, 2025, the parties to the Business Combination Agreement entered into an Amendment (the “Amendment”) to the Business Combination Agreement, pursuant to which the Closing Date was extended from July 31, 2025 to October 31, 2025.

 

On October 14, 2025, the parties to the Business Combination Agreement entered into an Amendment (the “Second Amendment”) to the Business Combination Agreement, pursuant to which the Closing Date was extended to December 31, 2025.

 

Sponsor Support Agreement 

 

In connection with the execution of the Business Combination Agreement, the Company and the officers and directors of the Company, the Target and the Sponsor entered into a support agreement (the “Sponsor Support Agreement”) pursuant to which the Sponsor and the officers and directors of the Company have agreed to vote all shares of the common stock beneficially owned by them, including any additional shares they acquire ownership of or the power to vote: (i) in favor of the Merger and related transactions, (ii) against any action reasonably be expected to impede, delay, or materially and adversely affect the Merger and related transactions, and (iii) in favor of an extension of the period of time the Company is afforded to consummate an initial business combination.

 

Company Support Agreement 

 

In connection with the execution of the Business Combination Agreement, the Company, the Target and certain stockholders of the Target entered into a support agreement, pursuant to which such Target stockholders have agreed to vote all common and preferred stock of the Target beneficially owned by them, including any additional shares of the Target they acquire ownership of or the power to vote, in favor of the Merger and related transactions and against any action reasonably be expected to impede, delay, or materially and adversely affect the Merger and related transactions.

 

Form of Lock-Up Agreement

 

In connection with the Closing, certain key Target stockholders will each agree, subject to certain customary exceptions, not to (i) offer, sell contract to sell, pledge or otherwise dispose of, directly or indirectly, any Lockup Shares (as defined below), (ii) enter into a transaction that would have the same effect, (iii) enter into any swap, hedge or other arrangement that transfers, in whole or in part, any of the economic consequences of ownership of the Lock-Up Shares or otherwise or engage in any short sales or other arrangement with respect to the Lock-Up Shares or (iv) publicly announce any intention to effect any transaction specified in clause (i) or (ii): (a) with respect to fifty (50%) percent of the Company Common Shares owned by Holder ninety (90) days after the Closing Date and (b) with respect to the remaining fifty (50%) percent of the Company Common Shares owned by Holder one hundred and eighty (180) days after the Closing Date. The term “Lockup Shares” mean the Company Common Shares owned by such Holder (or to be acquired by such Holder in connection with the Business Combination Agreement) as set forth on Schedule I to the Lock-Up Agreement.

 

Form Registration Rights Agreement

 

At the Closing, the Company will enter into a registration rights agreement (the “Registration Rights Agreement”) with certain existing stockholders of the Company and the Target (the “Holders”) with respect to their shares of the Company acquired before or pursuant to the Merger, and including the shares issuable on conversion of the warrants issued to the Sponsor in connection with the Company’s initial public offering and any shares issuable on conversion of preferred stock or loans. Pursuant to the Registration Rights Agreement, within thirty (30) days of the Closing, the Company shall file with the SEC a registration statement for a shelf registration on Form S-1 or a Registration Statement for a Shelf Registration on Form S-3 (the “Form S-3 Shelf”), if the Company is then eligible to use a Form S-3 Shelf, in each case, covering the resale of all the Registrable Securities on a delayed or continuous basis as permitted by Rule 415 under the Securities Act and shall use its reasonable best efforts to have such Shelf declared effective as soon as practicable after the filing thereof, but no later than the seventy-fifth (75th) calendar day following the Filing Date; provided that the Company shall have the Shelf declared effective within ten (10) business days after the date the Company is notified by the staff of the SEC that the Shelf will not be reviewed or will not be subject to further review by the SEC. In the event that any Holder holds Registrable Securities that are not registered for resale on a delayed or continuous basis, the Company, upon written request of such Holder, shall promptly use its commercially reasonable efforts to cause the resale of such Registrable Securities to be covered by filing a subsequent shelf registration statement and cause the same to become effective as soon as practicable after such filing and such subsequent shelf registration statement shall be subject to the terms hereof; provided, however, that the Company shall only be required to cause such Registrable Securities to be so covered twice per calendar year for each of the Holders. In addition, the Holders will have certain “piggyback” registration rights that require the Company to include such securities in registration statements that the Company otherwise files. The Registration Rights Agreement does not contain liquidating damages or other cash settlement provisions resulting from delays in registering the Company’s securities. the Company will bear the expenses incurred in connection with the filing of any such registration statements.

 

Deferred Legal Fee

 

As of September 30, 2025 and December 31, 2024, the Company had $234,849, in deferred legal fees, which are included in accounts payable and accrued expenses on the Company’s accompanying balance sheets.