{"url_path":"/sec/imaq/10-k/2026/item-13","section_key":"item-13","section_title":"Item 13 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE","topic":"sec","document":{"doc_type":"10-K","doc_date":"2026-06-25","source_url":"https://www.sec.gov/Archives/edgar/data/1846235/0001213900-26-072115-index.html","accession_number":"0001213900-26-072115","cik":"0001846235","ticker":"IMAQ","issuer_name":"International Media Acquisition Corp.","edgar_url":"https://www.sec.gov/Archives/edgar/data/1846235/0001213900-26-072115-index.html","primary_entity_key":"0001846235","primary_entity_name":"International Media Acquisition Corp."},"word_count":3992,"has_tables":true,"body_markdown":"ITEM\n13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE\n\n \n\n*Founder\nShares*\n\n \n\nOn\nFebruary 9, 2021, the Prior Sponsor paid an aggregate of $25,000 to cover certain expenses on behalf of the Company in exchange for the\nissuance of 5,750,000 share of common stock (the “Founder Shares”). The Founder Shares included an aggregate of up\nto 750,000 shares of common stock subject to forfeiture to the extent that the underwriters’ over-allotment option was not exercised\nin full or in part, so that the Prior Sponsor would own, on an as-converted basis, 20% of the Company’s issued and outstanding\nshares after the Initial Public Offering (not including the Private Units and underlying securities and assuming the Prior Sponsor did\nnot purchase any Public Shares in the Initial Public Offering). On August 6, 2021, the underwriters’ exercised the over-allotment\noption in full, thus these shares are no longer subject to forfeiture.\n\n \n\nThe\nPrior Sponsor and the other holders of the Founder Shares (the “initial stockholders”) have agreed not to transfer,\nassign or sell any of the Founder Shares (except to certain permitted transferees) until, with respect to 50% of the Founder Shares,\nthe earlier of six months after the date of the consummation of an initial Business Combination and the date on which the closing price\nof the Company’s common stock equals or exceeds $12.50 per share for any 20 trading days within a 30-trading day period following\nthe consummation of an initial Business Combination and, with respect to the remaining 50% of the Founder Shares, six months after the\ndate of the consummation of an initial Business Combination, or earlier in each case if, subsequent to an initial Business Combination,\nthe Company completes a liquidation, merger, stock exchange or other similar transaction which results in all of the Company’s\nstockholders having the right to exchange their shares of common stock for cash, securities or other property.\n\n \n\nOn\nJuly 7, 2021, the Prior Sponsor entered into agreements with two independent directors of the Company to transfer 95,000 Founder Shares\nto each director, subject to and upon closing of the Company’s initial business combination. As such, under ASC 718, these shares\nare transferred subject to a performance condition and compensation expense will be recognized at the date of a business combination\nwhen earned.\n\n \n\nOn\nJuly 22, 2021, the Prior Sponsor sold 30,000 of its Founder Shares to each of the Initial Independent Directors (or 150,000 Founder Shares\nin total) for cash consideration of approximately $0.004 per share. These awards are subject to ASC 718. In accordance with ASC 718,\nthe Company recognized compensation expense in an amount equal to the number of Founders Shares sold times the grant date fair value\nper share less the amount initially received for the purchase of the Founder Shares. The value of the Founder Shares sold to the Initial\nIndependent Directors was determined to be $787,500 as of July 22, 2021. As such, the Company recognized compensation expense of $786,848\nwithin stock-based compensation expense in the Company’s Statements of Operations for the period from January 15, 2021 (inception)\nthrough December 31, 2021.\n\n \n\nOn\nSeptember 17, 2021, the Prior Sponsor sold 25,000 of its Founder Shares to the Additional Independent Director for consideration of approximately\n$0.004 per share. These awards are subject to ASC 718. In accordance with ASC 718, the Company recognized compensation expense in an\namount equal to the number of Founders Shares sold times the grant date fair value per share less the amount initially received for the\npurchase of the Founder Shares. The value of the Founder Shares sold to the Additional Independent Director was determined to be $141,250\nas of September 17, 2021. As such, the Company recognized compensation expense of $141,150 within stock-based compensation expense in\nthe Company’s Statements of Operations for the period from January 15, 2021 (inception) through December 31, 2021.\n\n \n\n80\n\n \n\n \n\nOn\nSeptember 17, 2021, the Prior Sponsor sold 75,000 of its Founder Shares to the Consultant for consideration of approximately $0.004 per\nshare. These awards are subject to ASC 718. In accordance with ASC 718, the Company recognized compensation expense in an amount equal\nto the number of Founders Shares sold times the grant date fair value per share less the amount initially received for the purchase of\nthe Founder Shares. The value of the Founder Shares sold to the Consultant was determined to be $423,750 as of September 17, 2021. As\nsuch, the Company recognized compensation expense of $423,450 within stock-based compensation expense in the Company’s Statements\nof Operations for the period from January 15, 2021 (inception) through December 31, 2021.\n\n \n\nOn\nNovember 10, 2023, the Company entered into a Securities Purchase Agreement with the Buyer, the Sellers, and as amended on January\n31, 2024, pursuant to which the Prior Sponsor agreed to sell, and the Buyer agreed to purchase, 4,125,000 Founder Shares and 657,675\nprivate placement units of the Company, which represents 76% of the total Company Securities (as defined in the Securities Purchase Agreement)\nowned by the Prior Sponsor for an aggregate purchase price of $1.00.\n\n \n\n*Polar\nLoan Agreement*\n\n \n\nOn\nJanuary 24, 2023, the Company entered into the Polar Loan Agreement by and among the Company, the Prior Sponsor, and NPIC, pursuant to\nwhich the Prior Sponsor was permitted to borrow the Polar Initial Loan and Polar Monthly Loans at the Company’s discretion\nwhich will in turn be loaned by the Prior Sponsor to the Company, to cover certain extension payments to the trust account of the Company.\nPursuant to the Polar Loan Agreement, the Polar Loan shall be payable within five (5) days of the date on which Company consummates its\nde-SPAC transaction.\n\n \n\nAs\nadditional consideration for NPIC making the Polar Initial Loan available to the Prior Sponsor, the Company shall issue the Initial Securities\nto NPIC, and as additional consideration for NPIC making each Polar Monthly Loan available to the Prior Sponsor, the Company shall issue\n166,700 shares of Common Stock to NPIC for each Polar Monthly Loan. Such securities shall be subject to no transfer restrictions or any\nother lock-up provisions, earn outs or other contingencies, and shall promptly be registered pursuant to the first registration statement\nfiled by the Company or the surviving entity following the de-SPAC Closing in connection with the de-SPAC Closing, or if no such registration\nstatement is filed in connection with the de-SPAC Closing, the first registration statement filed subsequent to the de-SPAC Closing,\nwhich will be filed no later than 45 days after the de-SPAC Closing and declared effective no later than 90 days after the de-SPAC Closing.\n\n  \n\nThe\nproceeds of the Polar Loan were used by the Company to fund amounts deposited into the Company’s trust account in connection with\neach extension.\n\n* *\n\n*Promissory\nNotes - Related Party*\n\n* *\n\n*Promissory\nNotes to Prior Sponsor*\n\n \n\nOn\nFebruary 1, 2021, the Company issued Initial Promissory Note to the Prior, pursuant to which the Company could borrow up to an aggregate\nof $300,000 to cover expenses related to the Initial Public Offering. On April 6, 2021, and June 17, 2021, the Company issued Additional\nPromissory Notes to the Prior Sponsor, pursuant to which the Company may borrow up to an additional aggregate principal amount of $200,000.\nThe IPO Promissory Notes were non-interest bearing and payable on the earlier of (i) March 31, 2022, or (ii) the consummation of the\nInitial Public Offering. The outstanding balance under the Promissory Notes was repaid on August 6, 2021.\n\n  \n\n81\n\n \n\n \n\nOn\nJanuary 14, 2022, the Company issued the Post-IPO Promissory Note to the Prior Sponsor, pursuant to which the Company could borrow up\nto an aggregate of $500,000 in two installments of (i) $300,000 during the month of March 2022, and (ii) $200,000 during the month of\nJune 2022 at the Company’s discretion. The Post-IPO Promissory Note is non-interest bearing and payable promptly after the date\non which the Company consummates an initial Business Combination.\n\n \n\nOn\nMarch 29, 2022, the Company amended and restated the Post-IPO Promissory Note, such that the aggregate amount the Company can borrow\nat its discretion under the note increased from $500,000 in two installments as described above, to up to $750,000 in three installments\nof (i) up to $195,000 no later than February 28, 2022, (ii) up to $355,000 no later than April 30, 2022, and (iii) up to $200,000 no\nlater than June 30, 2022 (the “Amended Post-IPO Promissory Note”). No other terms were amended pursuant to this amendment\nand restatement.\n\n \n\nOn\nAugust 10, 2022, the Company issued the August 2022 Promissory Note to the Prior Sponsor, pursuant to which the Company may borrow up\nto an aggregate of $895,000 in three installments of (i) up to $195,000 no later than July 31, 2022, (ii) up to $500,000 no later than\nOctober 31, 2022, and (iii) up to $200,000 no later than January 31, 2023, at the Company’s discretion. The August 2022 Promissory\nNote is non-interest bearing and payable promptly after the date on which the Company consummates an initial Business Combination.\n\n \n\nOn\nNovember 18, 2022, the Company issued the November 2022 Promissory Note to the Prior Sponsor, pursuant to which the Company may borrow\nup to an aggregate of $300,000 no later than March 31, 2023, at the Company’s discretion. The November 2022 Promissory Note is\nnon-interest bearing and payable promptly after the date on which the Company consummates an initial Business Combination.\n\n \n\nOn\nFebruary 14, 2023, the Company issued February 2023 Promissory Note to the Prior Sponsor, pursuant to which the Company may borrow up\nto an aggregate amount of up to $500,000 in four installments of (i) up to $150,000 no later than February 28, 2023, (ii) up to $200,000\nno later than March 31, 2023, (iii) up to $50,000 no later than April 30, 2023, and (iv) up to $100,000 no later than July 31, 2023,\nupon the request by the Company at the Company’s discretion. The February 2023 Promissory Note is non-interest bearing and payable\npromptly after the date on which the Company consummates an initial Business Combination.\n\n \n\n The\nAmended Post-IPO Promissory Note, the August 2022 Promissory Note, the November 2022 Promissory Note and the February 2023 Promissory\nNote are collectively referred to as the “CCM Prior Notes”. On March 11, 2025, the Company entered into the Amendments\nto the CCM Promissory Notes with the Prior Sponsor. Pursuant to the Amendments to the CCM Promissory Notes, the Prior Sponsor shall receive\n75,000, 89,500, 30,000 and 12,156 Shares of Common Stock pursuant to the Second Amended Post-IPO Note, Amended August 2022 Note, Amended\nNovember 2022 Note and Amended February 2023 Note, respectively, which equals to an aggregate of 206,656 Shares of Common Stock after\nthe date on which the Company consummates a Business Combination as final and full settlement of all outstanding amounts owed under the\nCCM Prior Notes issued to the Prior Sponsor by the Company, which shall be subject to a 12-month lock-up as described in the Lock-Up\nAgreement dated March 11, 2025.\n\n \n\n As\nof March 31, 2026 and 2025, $2,445,000 and $2,445,000 were outstanding, respectively, under all the promissory notes due to the Prior\nSponsor.\n\n  \n\n82\n\n \n\n \n\n*Promissory\nNotes to JC Unify*\n\n \n\nOn\nJanuary 31, 2024, the Company issued the January 2024 Promissory Note in the aggregate principal amount of up to $1,300,000 to the Buyer.\nPursuant to the January 2024 Promissory Note, the Buyer agreed to loan to the Company an aggregate amount of up to $1,300,000. The January\n2024 Promissory Note shall be payable promptly on demand and in any event, no later than the date on which the Company terminates or\nconsummates an initial business combination. Such January 2024 Promissory Note is convertible into units having the same terms and conditions\nas the private placement units as described in the Prospectus dated July 28, 2021, at the price of $10.00 per unit, at the option of\nthe Buyer. The January 2024 Promissory Note does not bear interest. As additional consideration for the Buyer making the January 2024\nPromissory Note available to the Company, the Company shall issue to the Buyer the New Units, and the Additional Securities of which\n(i) 250,000 of the Additional Securities shall be subject to no transfer restrictions or any other lock-up provisions, earn outs or other\ncontingencies, and shall be registered for resale pursuant to the first registration statement filed by the Company or the surviving\nentity in connection with the closing of the Business Combination, or if no such registration statement is filed in connection with the\nclosing of the Business Combination, the first registration statement filed subsequent to the closing of the Business Combination, which\nwill be filed no later than 30 days after the closing of the Business Combination and declared effective no later than 60 days after\nthe closing of the Business Combination; and (ii) 657,675 of the Additional Securities shall be subject to the same terms and conditions\napplied to the insider shares described in the Prospectus. The Additional Securities and New Units shall be issued to the Buyer in conjunction\nwith the closing of a Business Combination.\n\n \n\nOn\nFebruary 27, 2024, the Company issued Promissory Note B in the aggregate principal amount of up to $530,000 to the Buyer. Pursuant to\nPromissory Note B, the Buyer agreed to loan to the Company an aggregate amount of up to $530,000. The Promissory Note B shall be payable\npromptly on demand and in any event, no later than the date on which the Company terminates or consummates an initial business combination.\nThe Promissory Note B is convertible into units having the same terms and conditions as the private placement units as described in the\nProspectus, at the price of $10.00 per unit, at the option of the Buyer. The Promissory Note B does not bear interest. The proceeds of\nPromissory Note B will be used by the Company to pay various expenses of the Company, including any payment to extend the period of time\nthe Company has to consummate an initial business combination, and for working capital purposes.\n\n  \n\nOn\nFebruary 27, 2024, the Company issued Promissory Note C in the aggregate principal amount of up to $470,000 to the Buyer. Pursuant to\nPromissory Note C, the Buyer agreed to loan to the Company an aggregate amount of up to $470,000. The Promissory Note C shall be payable\npromptly on demand and in any event, no later than the date on which the Company terminates or consummates an initial business combination.\nThe Promissory Note C is convertible into units having the same terms and conditions as the private placement units as described in the\nProspectus, at the price of $10.00 per unit, at the option of the Buyer.\n\n \n\nOn\nJune 28, 2024, the Company entered into the Amendments to the JC Unify Prior Notes with the Buyer. Pursuant to the Amendments to the\nJC Unify Prior Notes, the Buyer has the right to convert the JC Unify Prior Notes into the JC Unify Prior Notes Conversion Securities,\nwith no fractional JC Unify Prior Notes Conversion Securities to be issued upon conversion. If the Buyer elects to convert the JC Unify\nPrior Notes into JC Unify Prior Notes Conversion Securities, the JC Unify Prior Notes shall be converted immediately prior to the closing\nof the Business Combination. The Amendments to the JC Unify Prior Notes also amended the events of default, so that the failure of the\nCompany to issue JC Unify Prior Notes Conversion Securities constitutes a failure to make required payments, constituting an event of\ndefault.\n\n \n\nOn\nMarch 28, 2025, the Company issued Promissory Note D in the aggregate principal amount of up to $600,000 to the Buyer. Pursuant to Promissory\nNote D, the Buyer agreed to loan to the Company an aggregate amount of up to $600,000. The Promissory Note D shall be payable promptly\non demand and in any event, no later than the date on which the Company terminates or consummates an initial business combination. The\nPromissory Note D is convertible into the Promissory Note D Conversion Securities, with no fractional Promissory Note D Conversion Securities\nto be issued upon conversion, and has the right to be converted immediately prior to the closing of the Business Combination. The Promissory\nNote D does not bear interest. The proceeds of Promissory Note D will be used by the Company to pay various expenses of the Company,\nincluding any payment to extend the period of time the Company has to consummate an initial business combination, and for working capital\npurposes. \n\n \n\nAs\nof March 31, 2026 and 2025, $2,900,000 and $2,659,713 were outstanding, respectively, under all the promissory notes due to JC Unify. \n\n \n\n*Due\nto Prior Sponsor*\n\n \n\nThe\nCompany received additional funds from the Prior Sponsor to finance term extension fees, and the Buyer to pay various expenses of the\nCompany. As of March 31, 2026 and 2025, the amount due to related parties was $656,913 and $656,913, respectively.\n\n \n\n83\n\n \n\n \n\n*Administrative\nSupport Agreement*\n\n \n\nThe\nCompany entered into an agreement, commencing on the effective date of the Initial Public Offering, to pay the Prior Sponsor up to a\ntotal of $10,000 per month for office space, administrative and support services. Upon completion of a Business Combination or liquidation,\nthe Company will cease paying these monthly fees. In April 2023, the agreement was terminated and the amount due was waived. Since then,\nno further payment has accrued or paid under this agreement. As of March 31, 2026 and 2025, the amount outstanding under this agreement\nis $0. No further payment has accrued or paid under this agreement.\n\n \n\n*Related\nParty – Working Capital Loans*\n\n \n\nIn\norder to finance transaction costs in connection with a Business Combination, the initial stockholders or an affiliate of the initial\nstockholders or certain of the Company’s directors and officers may, but are not obligated to, loan the Company funds as may be\nrequired (“Working Capital Loans”). If the Company completes a Business Combination, the Company would repay the Working\nCapital Loans out of the proceeds of the Trust Account released to the Company. Otherwise, the Working Capital Loans would be repaid\nonly out of funds held outside the Trust Account. In the event that a Business Combination does not close, the Company may use a portion\nof proceeds held outside the Trust Account to repay the Working Capital Loans, but no proceeds held in the Trust Account would be used\nto repay the Working Capital Loans. Except for the foregoing, the terms of such Working Capital Loans, if any, have not been determined\nand no written agreements exist with respect to such loans. The Working Capital Loans would either be repaid upon consummation of a Business\nCombination, without interest, or, at the lender’s discretion, up to $1,500,000 of such loans may be convertible into units of\nthe post-Business Combination entity at a price of $10.00 per unit at the option of the lender. The units would be identical to the Private\nUnits.\n\n \n\nAs\nof March 31, 2026 and 2025, the Company had no borrowings under the related party loans. \n\n \n\n*General*\n\n \n\nOur\nPrior Sponsor, Buyer, officers and directors, or any of their respective affiliates, are entitled to be reimbursed for certain bona-fide,\ndocumented out-of-pocket expenses incurred in connection with activities on behalf of the Company such as identifying potential target\nbusinesses and performing due diligence on suitable business combinations. The Company’s audit committee will review on a quarterly\nbasis all payments that were made to the Company’s Prior Sponsor, Buyer, officers, directors or the Company’s or their affiliates\nand will determine which expenses and the amount of expenses that will be reimbursed. There is no cap or ceiling on the reimbursement\nof out-of-pocket expenses incurred by such persons in connection with activities on our behalf.\n\n \n\nNo\ncompensation or fees of any kind, including finder’s fees, consulting fees and other similar fees, will be paid to the Company’s\ninsiders or any of the members of the Company’s management team, for services rendered prior to or in connection with the consummation\nof the initial business combination (regardless of the type of transaction that it is).\n\n \n\nAll\nongoing and future transactions between us and any of the Company’s officers and directors or their respective affiliates will\nbe on terms believed by the Company to be no less favorable to us than are available from unaffiliated third parties. Such transactions\nwill require prior approval by the Company’s audit committee and a majority of the Company’s uninterested “independent”\ndirectors, or the members of the Company board who do not have an interest in the transaction, in either case who had access, at our\nexpense, to our attorneys or independent legal counsel. The Company will not enter into any such transaction unless the Company’s\naudit committee and a majority of the Company’s disinterested “independent” directors determine that the terms of such\ntransaction are no less favorable to the Company than those that would be available to the Company with respect to such a transaction\nfrom unaffiliated third parties.\n\n  \n\nRelated\nParty Policy\n\n \n\nOur\nCode of Ethics requires us to avoid, wherever possible, all related party transactions that could result in actual or potential conflicts\nof interests, except under guidelines approved by the board of directors (or the audit committee). Related party transactions are defined\nas transactions in which (1) the aggregate amount involved will or may be expected to exceed $120,000 in any calendar year, (2) we or\nany of our subsidiaries is a participant, and (3) any (a) executive officer, director or nominee for election as a director, (b) greater\nthan 5% beneficial owner of our shares of common stock, or (c) immediate family member, of the persons referred to in clauses (a) and\n(b), has or will have a direct or indirect material interest (other than solely as a result of being a director or a less than 10% beneficial\nowner of another entity). A conflict of interest situation can arise when a person takes actions or has interests that may make it difficult\nto perform his or her work objectively and effectively. Conflicts of interest may also arise if a person, or a member of his or her family,\nreceives improper personal benefits as a result of his or her position\n\n \n\nWe\nalso require each of our directors and executive officers to annually complete a directors’ and officers’ questionnaire that\nelicits information about related party transactions.\n\n \n\n84\n\n \n\n \n\nOur\nPrior Sponsor, our Buyer, officers and directors are, and may become a sponsor, an officer or director of other special purpose acquisition\ncompanies with a class of securities registered under the Securities Exchange Act of 1934, as amended, or the Exchange Act. Notwithstanding\nthat, such officers and directors will continue to have a pre-existing fiduciary obligation to us, and we will, therefore, have priority\nover any special purpose acquisition companies they subsequently join.\n\n \n\nThese\nprocedures are intended to determine whether any such related party transaction impairs the independence of a director or presents a\nconflict of interest on the part of a director, employee or officer.\n\n \n\nTo\nfurther minimize conflicts of interest, we have agreed not to consummate our initial business combination with an entity that is affiliated\nwith any of our insiders, officers or directors unless we have obtained an opinion from an independent investment banking firm or another\nindependent firm that commonly renders valuation opinions for the type of company we are seeking to acquire or an independent accounting\nfirm that our initial business combination is fair to our company from a financial point of view. In no event will our insiders, or any\nof the members of our management team be paid any finder’s fee, consulting fee or other similar compensation prior to, or for any\nservices they render in order to effectuate, the consummation of our initial business combination (regardless of the type of transaction\nthat it is).\n\n \n\nDirector\nIndependence\n\n \n\nNasdaq\nlisting standards require that a majority of our board of directors be independent. For a description of the director independence, see\n“- *Part III, Item 10 - Directors, Executive Officers and Corporate Governance”*."}