principle value of $2,523,744.29 (the “Exchange Note”), which will be guaranteed by each of DHAC, VSee and iDoc. The Exchange Note will bear interest at a rate of 8.00% per annum and will be convertible into shares of common stock of the Company at a fixed conversion price of $10 per share. The conversion price of the Exchange Note is subject to reset if DHAC’s common stock trades below $10.00 on the 10th business day after the conversion shares are registered or may otherwise be freely resold, and every 90th day thereafter, to a price equal to the greater of (x) 95% of the average lowest VWAP of DHAC’s common stock in the 10th trading dates prior to the measurement date and (y) $2.00.
Administrative Services Agreement
We agreed, commencing on November 3, 2021, to pay an affiliate of the Sponsor a total of $10,000 per month for office space and secretarial, administrative, and other services. The monthly fees will cease upon completion of an initial business combination or liquidation. For the year ended December 31, 2023, we incurred $120,000, of which $55,000 is included in accrued expenses in the accompanying consolidated balance sheets at December 2023. For the year ended December 31, 2022, we incurred $120,000, of which $10,550 is included in accrued expenses in the accompanying consolidated balance sheets at December 2022.
VSee Lab Related Person Transactions
On January 1, 2008, Milton Chen, the CEO of VSee Lab, Inc., received 7,186,237 shares of VSee Lab, Inc common stock and entered an employment agreement with VSee Lab, Inc, with annual compensation of $100,000.
On December 23, 2010, Salesforce, Inc., an investor in VSee Lab, Inc., received 1,195,019 shares of VSee Lab, Inc preferred stock for its investment of $3,570,000 in VSee Lab, Inc. No other person or entity has more than 5% ownership in VSee Lab, Inc.
During the year ended December 31, 2022, $127,710 of cash was provided by Milton Chen and will be used for operating expenses in the future. During the year, VSee received $18,612 from iDoc for cost-sharing expenses. The balance in the due to related party payable as of December 31, 2022 and 2021, was $146,322 and $0, respectively.
During the year ended December 31, 2022, VSee received a loan of $110,000 from Milton Chen, VSee’s Chief Executive Officer, for advanced cash and paid operating expenses on behalf of VSee. No repayments were made during the year ended December 31, 2022. The loan balance as of December 31, 2022 and 2021, was $110,000 and $0, respectively.
On October 5, 2022, DHAC, along with VSee and iDoc, the target companies in our Business Combination, entered into a securities purchase agreement with the Bridge Investor, pursuant to which DHAC, VSee and iDoc each issued and sold to such investor 10% original issue discount senior secured promissory notes due October 5, 2023 in the aggregate principal amount of $2,222,222. Such note was exchanged on November 21, 2023 pursuant to the Exchange Agreement, which provides that the amounts currently due and owing under (i) the DHAC Bridge Note, (ii) the VSee Bridge Note other than $600,000 of the principal amount thereof, and (iii) the iDoc Bridge Note other than $600,000 of the principal amount thereof, will be exchanged at the Closing for a senior secured convertible promissory note issued by DHAC with an aggregate principle value of $2,523,744.29 (the “Exchange Note”), which will be guaranteed by each of DHAC, VSee and iDoc.
On November 21, 2023, DHAC and VSee entered into a Conversion SPA with Whacky - a Sponsor Affiliate, pursuant to which certain loans incurred by VSee to Whacky in the aggregate amount of $220,000 will be converted into Series A Shares at the Closing.
On November 21, 2023, DHAC and VSee, entered into a Conversion SPA with the Bridge Investor who is also an investor in our Sponsor, which Conversion SPA was amended and restated on February 13, 2024, pursuant to which certain loans incurred by VSee to the Bridge Investor in the aggregate amount of $600,000 will be converted into the Company’s Common Stock subject to executing of certain registration rights agreement and filing a registration statement thereunder following the Closing.
On November 21, 2023, DHAC, VSee and iDoc entered into a letter agreement to the October 2022 securities purchase agreement, pursuant to which the Bridge Investor agreed to purchase additional 10% original issue discount senior secured convertible promissory notes in the aggregate principal amount of $166,667 (with an aggregate subscription amount of $150,000) from DHAC with (1) a $111,111.33 note purchased at signing of the Bridge Amendment, which will mature on May 21, 2025 and (2) a $55,555.67 note purchased on January 25, 2024, which will mature on July 25, 2025 (as amended, the “Additional Bridge Notes”). The Additional Bridge Notes bear guaranteed interest at a rate of 8.00% per annum and are convertible into shares of DHAC common stock, par value
