NOTE 5. RELATED PARTY TRANSACTIONS
Founder Shares
On January 13, 2021, the
Sponsor paid $25,000 to cover certain offering costs of the Company in consideration for 5,750,000 shares of Class B common stock (the Founder Shares). On February 4, 2021, the Sponsor transferred an aggregate 90,000 Founder
Shares to the Companys independent directors, resulting in the Sponsor holding 5,660,000 Founder Shares. On March 4, 2021, the Company effected a 1.125-for-1
stock split of its Class B common stock, resulting in an aggregate of 6,468,750 Founder Shares issued and outstanding, 6,378,750 of which were held by the Sponsor. On November 22, 2021, the Sponsor transferred 30,000 Founder Shares to a
newly appointed independent director of the Company, resulting in the Sponsor holding 6,348,750 Founder Shares. The aggregate value of the 120,000 Founder Shares transferred to the independent directors will be recorded as compensation expense at
the time of a Business Combination. The initial grant was deemed de minimis and the second grant in November 2021 is estimated at $9.79 per share, approximately $300,000. The Founder Shares included an aggregate of up to 843,750 shares subject to
forfeiture. As a result of the underwriters election to fully exercise their over-allotment option, no Founder Shares were subject to forfeiture.
Administrative Services Agreement
The Company
entered into an agreement, commencing on March 4, 2021, pursuant to which the Company will pay the Sponsor a total of $10,000 per month for office space, administrative and support services. Upon completion of the Business Combination or the
Companys liquidation, the agreement will terminate, and the Company will cease paying these monthly fees. For the three months ended September 30, 2022 and 2021, the Company recorded $30,000 and $30,000, respectively, in fees for these
services. For the nine months ended September 30, 2022 and 2021, the Company recorded $90,000 and $70,000, respectively, in fees for these services. As of September 30, 2022 and December 31, 2021, the service fee payable was $0,
respectively. Payments were reimbursed through the related party payable on the accompanying condensed balance sheets.
Convertible Promissory Note
Related Party
On March 31, 2022, the Company entered into a convertible promissory note with the Sponsor, pursuant to which the
Company may borrow up to an aggregate principal amount of $1,500,000 (the Convertible Promissory Note). The Convertible Promissory Note is non-interest bearing and due on the earlier of
March 9, 2023 and the date on which the Company consummates its initial business combination. If the Company completes a business combination, it would repay such additional loaned amounts, without interest, upon consummation of the business
combination. In the event that a business combination does not close, the Company may use a portion of the working capital held outside the trust account to repay such additional loaned amounts but no proceeds from the trust account would be used
for such repayment. Up to $1,500,000 of such additional loans (if any) may be convertible into warrants, at a price of $1.50 per warrant at the option of the Sponsor. The warrants would be identical to the private placement warrants, including as to
exercise price, exercisability and exercise period. Except for the foregoing, the terms of such additional loans (if any) have not been determined and no written agreements exist with respect to such loans. If the Company fully draws down on the
Convertible Promissory Note and requires additional funds for working capital purposes, the Sponsor, an affiliate of the Sponsor, or the Companys officers and directors may, but are not obligated to, loan the Company such additional funds as
may be required. The issuance of the Convertible Promissory Note was approved by the board of directors and the audit committee on March 31, 2022. As of September 30, 2022, there was $0 outstanding under the Convertible Promissory Note
which is reported in related party payables.
Related Party Loans
In order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor or certain of the Companys
directors and officers may, but are not obligated to, loan the Company funds as may be required (Working Capital Loans). The Working Capital Loans would either be repaid upon consummation of a Business Combination, without interest, or,
at the lenders discretion, up to $1,500,000 of such Working Capital Loans may be convertible into warrants of the post-Business Combination entity at a price of $1.50 per warrant. The warrants would be identical to the Private Placement
Warrants.
In addition, as the Company incurs operating expenses, these fees are paid by InterPrivate LLC, and InterPrivate LLC is subsequently reimbursed
by the Company for the full amount paid. As of September 30, 2022 and December 31, 2021, the Company had $439,279 and $50,320 in related party payables outstanding, respectively. The increase is primarily due to increased invoices paid by
the LLC on behalf of InterPrivate II for operations.
Services Agreement
The Company entered into an agreement, pursuant to which the Company will pay its Vice President a total of $10,000 per month for assisting the Company in
negotiating and consummating an initial Business Combination. Upon completion of the Business Combination or the Companys liquidation, the agreement will terminate, and the Company will cease paying these monthly fees. For the three months
ended September 30, 2022 and 2021, the Company incurred $30,000 and $30,000 in fees, respectively, for these services. For the nine months ended September 30, 2022 and 2021, the Company incurred $90,000 and $70,000 in fees, respectively,
for these services. As of September 30, 2022 and December 31, 2021, the service fee payable was $0 and $0, respectively. Payments were reimbursed through the related party payable on the accompanying condensed balance sheets.
9