Company: FTII
Filing Date: 2025-02-14
Form Type: S-4
Source: 0001493152-25-006997
Chunk: 580

Company: FutureTech II Acquisition Corp.
Filing Date: 2025-02-14
Form: S-4
Chunk 580
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 conversion feature did not required bifurcation as it did not meet the definition of a derivative in accordance with ASC 815-10, Derivatives and Hedging. The conversion feature does not meet the definition of a derivative as the net settlement criteria is not met because the underlying shares cannot be readily converted to cash within 32 days following exercise of the conversion feature. However, the promissory notes with the modified conversion feature were initially recorded on the modification date at a substantial premium over the amount due at maturity. As a result, the Company recognized $2,450,000 as note payable-related party related to the principal amount of the promissory notes and $6,201,403 to additional paid in capital representing the substantial premium.

The Company determined the fair value of the promissory notes on the date of modification in accordance with ASC 820, Fair Value Measurementusing Level 3 inputs. The fair value was determined by calculating the fair value of the underlying shares that would be received upon conversion at closing of the Business Combinations, discounted to present value using a discount rate 60% and a time to merger of approximately five months and applying a probability of closing the Business Combination of approximately 72%. The Company determined that there is no value in the underlying promissory notes if the Business Combination were terminated.

The Company issued additional promissory notes at par to FutureTech Partners between the modification date of January 25, 2023 and December 31, 2023 for an aggregate principal of $2.6 million all with maturity dates less than one year. These promissory notes also contain a conversion feature subject to the Convertible Note Agreement.

The following table outlines the promissory notes issued and outstanding as of December 31, 2023:

| Date of Issuance |     | Principal Amount |           |     | Maturity Date |
| 12/1/2021        |     |                  |   150,000 |     | 12/3/2021     |
| 1/14/2022        |     |                  |   150,000 |     | 7/14/2022     |
| 4/1/2022         |     |                  |   350,000 |     | 10/1/2022     |
| 6/13/2022        |     |                  |   300,000 |     | 12/13/2022    |
| 7/18/2022