Filed 2026-03-04 · Period ending 2025-12-31 · 76,750 words · SEC EDGAR
# Safeguard Acquisition Corp. (SAC) — 10-K
**Filed:** 2026-03-04
**Period ending:** 2025-12-31
**Accession:** 0001213900-26-023746
**Source:** [SEC EDGAR](https://www.sec.gov/Archives/edgar/data/2082844/000121390026023746/)
**Origin leaf:** 11051c2695a10e6e576fa0b16d7bb1a5df17a40d577f15c03639f42f0b913413
**Words:** 76,750
---
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2025
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number: 001-42991
SAFEGUARD ACQUISITION CORP.
(Exact name of registrant as specified in its charter)
| Cayman Islands | | 98-1868175 | |
| (State or other jurisdiction of incorporation or organization) | | (I.R.S. Employer Identification Number) | |
| 7251 West Lake Mead Boulevard, Suite 300 Las Vegas, NV 89128 | |
| (Address of principal executive offices) | |
Registrants telephone number, including area code: (702) 867-5899
Securities registered pursuant to Section 12(b) of the Act:
| Title of Each Class: | | Trading Symbols | | Name of Each Exchange on Which Registered: | |
| Units, each consisting of one Class A Ordinary Share, $0.0001 par value, and one-half of one redeemable warrant | | SAC.U | | New York Stock Exchange | |
| Class A Ordinary Shares, par value $0.0001 per share | | SAC | | New York Stock Exchange | |
| Warrants, each whole warrant exercisable for one Class A Ordinary Share at an exercise price of $11.50 per share | | SAC WS | | New York Stock Exchange | |
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes No
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of large accelerated filer, accelerated filer, smaller reporting company and emerging growth company in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | | Accelerated filer | | |
| Non-accelerated filer | | Smaller reporting company | | |
| Emerging growth company | | | | |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant has filed a report on and attestation to its managements assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrants executive officers during the relevant recovery period pursuant to 240.10D-1(b).
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No
The registrant was not a public company as of June 30, 2025, and therefore it cannot calculate the aggregate market value of its voting and non-voting common equity held by non-affiliates as of such date.
As of March 4, 2026, there were an aggregate of 31,366,667 ordinary shares of the registrant issued and outstanding, consisting of 23,700,000 (including 23,000,000 shares subject to possible redemption) Class A Ordinary Shares, par value $0.0001 per share, and 7,666,667 Class B ordinary shares, par value $0.0001 per share.
Documents Incorporated by Reference: None.
TABLE OF CONTENTS
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Part I |
1 | |
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Item 1. Business |
1 | |
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Item 1A. Risk Factors |
15 | |
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Item 1B. Unresolved Staff Comments |
60 | |
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Item 1C. Cybersecurity |
60 | |
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Item 2. Properties |
60 | |
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Item 3. Legal Proceedings |
60 | |
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Item 4. Mine Safety Disclosures |
60 | |
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Part II |
61 | |
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Item 5. Market for Registrants Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities |
61 | |
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Item 6. [Reserved] |
61 | |
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Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations |
61 | |
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Item 7A. Quantitative and Qualitative Disclosures about Market Risk |
63 | |
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Item 8. Financial Statements and Supplementary Data |
63 | |
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Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure |
63 | |
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Item 9A. Controls and Procedures. |
64 | |
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Item 9B. Other Information |
64 | |
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Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections |
64 | |
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Part III |
65 | |
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Item 10. Directors, Executive Officers and Corporate Governance Officers and Directors |
65 | |
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Item 11. Executive Compensation. |
71 | |
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Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters. |
72 | |
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Item 13. Certain Relationships and Related Transactions, and Director Independence |
73 | |
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Item 14. Principal Accounting Fees and Services. |
75 | |
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Part IV |
76 | |
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Item 15. Exhibits, Financial Statement Schedules. |
76 | |
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Item 16. Form 10-K Summary |
77 | |
i
CAUTIONARY NOTE REGARDING FORWARD-LOOKING
STATEMENTS AND RISK FACTOR SUMMARY
Certain statements in this
Annual Report on Form 10-K (this Form 10-K) may constitute forward-looking statements for purposes of the
federal securities laws. Our forward-looking statements include, but are not limited to, statements regarding our or our management teams
expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts
or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The
words anticipate, believe, continue, could, estimate, expect,
intend, may, might, plan, possible, potential, predict,
project, should, would and similar expressions may identify forward-looking statements, but
the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this Form 10-K may include,
for example, statements about:
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| our ability to select an appropriate target business or businesses; | |
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| our ability to complete our initial Business Combination (as defined below); | |
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| our expectations around the performance of the prospective target business or businesses; | |
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| our success in retaining or recruiting, or changes required in, our officers, key employees or directors
following our initial Business Combination; | |
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| our officers and directors allocating their time to other businesses and potentially having conflicts
of interest with our business or in approving our initial Business Combination; | |
|
| our potential ability to obtain additional financing to complete our initial Business Combination; | |
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| our pool of prospective target businesses; | |
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| the adverse impacts that events outside of our control, such as increased geopolitical unrest and increased
volatility in the debt and equity markets, may have on our ability to consummate an initial Business Combination; | |
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| our public securities potential liquidity and trading; | |
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| the lack of a market for our securities; | |
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| the use of proceeds not held in the Trust Account (as defined below) or available to us from interest
income on the Trust Account balance; | |
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| the Trust Account not being subject to claims of third parties; or | |
|
| our financial performance. | |
The forward-looking statements
contained in this Form 10-K are based on our current expectations and beliefs concerning future developments and their potential effects
on us. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements
involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or
performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties
include, but are not limited to, those factors described under the section of this Form 10-K entitled Risk Factors. Should
one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in
material respects from those projected in these forward-looking statements. We undertake no obligation to update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities
laws.
ii
Summary of Risk Factors
An investment in our securities
involves a high degree of risk. The occurrence of one or more of the events or circumstances described in the section titled *Risk
Factors*, alone or in combination with other events or circumstances, may materially adversely affect our business, financial
condition and operating results. In that event, the trading price of our securities could decline, and you could lose all or part of your
investment. Such risks include, but are not limited to:
|
| We are a blank check company with no operating history and no revenues, and you have no basis on which
to evaluate our ability to achieve our business objective. Until we complete our initial Business Combination, we will have no operations
and will generate no operating revenues. | |
|
| Our Public Shareholders may not be afforded an opportunity to vote on our proposed initial Business Combination,
and even if we hold a vote, holders of our Founder Shares will participate in such vote, which means we may complete our initial Business
Combination even though a majority of our Public Shareholders do not support such a combination. | |
|
| Your only opportunity to effect your investment decision regarding a potential Business Combination may
be limited to the exercise of your right to redeem your shares from us for cash. | |
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| If we seek shareholder approval of our initial Business Combination, our Sponsor and members of our management
team have agreed to vote in favor of such initial Business Combination, regardless of how our Public Shareholders vote. | |
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| The ability of our Public Shareholders to redeem their shares for cash may make our financial condition
unattractive to potential Business Combination targets, which may make it difficult for us to enter into a Business Combination with a
target. | |
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| The ability of our Public Shareholders to exercise redemption rights with respect to a large number of
our shares and the amount of deferred underwriting compensation may not allow us to complete the most desirable Business Combination or
optimize our capital structure, and may substantially dilute your investment in us. | |
|
| The requirement that we complete our initial Business Combination within the duration of the Completion
Window may give potential target businesses leverage over us in negotiating a Business Combination and may limit the time we have in which
to conduct due diligence on potential Business Combination targets, in particular as we approach our dissolution deadline, which could
undermine our ability to complete our initial Business Combination on terms that would produce value for our shareholders. | |
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| We may not be able to complete our initial Business Combination within the Completion Window, in which
case we would redeem our Public Shares and liquidate. Our warrants will expire without value to the holder if we do not complete our initial
Business Combination within the timeframe required by our amended and restated memorandum and articles of association. | |
|
| If we seek shareholder approval of our initial Business Combination, our Sponsor, directors, officers,
advisors and their affiliates may elect to purchase shares or warrants from Public Shareholders, which may influence a vote on a proposed
Business Combination and reduce the public float of our securities. | |
|
| If a shareholder fails to receive notice of our offer to redeem our Public Shares in connection with our
initial Business Combination, or fails to comply with the procedures for submitting or tendering its shares, such shares may not be redeemed. | |
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| Because of our limited resources and the significant competition for Business Combination opportunities,
it may be more difficult for us to complete our initial Business Combination. If we do not to complete our initial Business Combination,
our Public Shareholders may receive only their pro rata portion of the funds in the Trust Account that are available for distribution
to Public Shareholders. | |
iii
|
| If the net proceeds of the IPO and the sale of the Private Placement Units not being held in the Trust
Account are insufficient to allow us to operate for at least the next 24 months, it could limit the amount available to fund our search
for a target business or businesses and complete our initial Business Combination, and we will depend on loans from our Sponsor or management
team to fund our search and to complete our initial Business Combination. | |
|
| Past experience or performance by our management team or their affiliates may not be indicative of future
performance of an investment in us. | |
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| You will not have any rights or interests in funds from the Trust Account, except under certain limited
circumstances. Therefore, to liquidate your investment, you may be forced to sell your Public Shares or warrants, potentially at a loss. | |
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| We may amend the terms of the warrants in a manner that may be adverse to holders of Public Warrants with
the approval by the holders of at least 50% of the then-outstanding Public Warrants. As a result, the exercise price of your warrants
could be increased, the warrant could be converted into cash or shares (at a ratio different than initially provided), the exercise period
could be shortened and the number of our Class A Ordinary Shares purchasable upon exercise of a warrant could be decreased, all without
your approval. | |
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| We may redeem your unexpired warrants prior to their exercise at a time that is disadvantageous to you,
thereby making your warrants worthless. | |
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| The NYSE may delist our securities from trading on its exchange, which could limit investors ability
to make transactions in our securities and subject us to additional trading restrictions. | |
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| The nominal purchase price paid by our Sponsor for the Founder Shares may result in significant dilution
to the implied value of your Public Shares upon consummation of our initial Business Combination. | |
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| We may be a passive foreign investment company, which could result in adverse U.S. federal income tax
consequences to U.S. investors. | |
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| An investment in our securities may result in uncertain U.S. federal income tax consequences, including
uncertainty with respect to the allocation of basis among the components of our Units, the tax treatment of a cashless exercise of Public
Warrants and the applicable holding period of our Class A Ordinary Shares. | |
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| We may reincorporate in or transfer by way of continuation to another jurisdiction which may result in
taxes imposed on shareholders or warrant holders. | |
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| The Excise Tax could be imposed on redemptions of our ordinary shares if we were to become a covered
corporation in the future. | |
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| Because we are incorporated in the Cayman Islands, you may face difficulties in protecting your interests,
and your ability to protect your rights through the U.S. Federal courts may be limited. | |
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| Our executive officers, directors, security holders and their respective affiliates may have competitive
pecuniary interests that conflict with our interests. | |
|
| Our initial Business Combination and our structure thereafter may not be tax-efficient to our shareholders
and warrant holders. As a result of our Business Combination, our tax obligations may be more complex, burdensome and uncertain. | |
|
| The other risks and uncertainties discussed in Risk Factors and elsewhere in this
Form 10-K. | |
iv
Part
I
Item 1. Business
**
*References in this Form
10-K to we, us, our or the Company refer to Safeguard Acquisition Corp. References
to our management or our management team refer to our officers and directors.*
Introduction
We are a blank check company
incorporated on June 27, 2025 as a Cayman Islands exempted company for the purpose of effecting a merger, share exchange, asset acquisition,
share purchase, reorganization or similar business combination with one or more businesses (the Business Combination). We
have 24 months from the closing of our initial public offering (IPO or Initial Public Offering), or until
such earlier liquidation date as our board of directors may approve (the Completion Window) to complete our initial Business
Combination.
We have reviewed, and continue
to review, a number of opportunities to enter into a Business Combination, but we are not able to determine at this time whether we will
complete a Business Combination with any of the target businesses that we have reviewed or with any other target business. We may pursue
an acquisition opportunity in any industry, sector or geographic location. We also have neither engaged in any operations nor generated
any revenue to date. Based on our business activities, the Company is a shell company as defined under the Exchange Act
of 1934 (the Exchange Act) because we have no operations and nominal assets consisting almost entirely of cash.
The registration statement
for our IPO became effective pursuant to Section 8(a) of the Securities Act of 1933, as amended (the Securities Act) on November
26, 2025. On December 5, 2025, we consummated the IPO of 23,000,000 units (the Units and, with respect to the Class A ordinary
shares included in the Units being offered, the Public Shares or Class A Ordinary Shares), which includes
the full exercise by the underwriters of their over-allotment option in the amount of 3,000,000 Units, at $10.00 per Unit, generating
gross proceeds of $230,000,000. Each Unit consists of one Class A Ordinary Share and one-half of one redeemable warrant of the Company
(the Public Warrants), with each whole warrant entitling the holder thereof to purchase one Class A Ordinary Share at $11.50
per share.
Simultaneously with the closing
of our IPO, we consummated the sale of an aggregate of 700,000 units (the Private Placement Units) at a price of $10.00
per Private Placement Unit, in a private placement to the Companys Sponsor, Safeguard Acquisition Management LLC, a Delaware limited
liability company (the Sponsor), and Jefferies LLC (Jefferies), the representative of the underwriters of
the IPO, generating gross proceeds of $7,000,000. Each Private Placement Unit is comprised of one Class A Ordinary Share and one-half
of one private placement warrant (the Private Placement Warrants). Of those 700,000 Private Placement Units, the Sponsor
purchased 470,000 Private Placement Units and Jefferies purchased 230,000 Private Placement Units.
Prior to the consummation
of the IPO, on July 18, 2025, our Sponsor made a capital contribution of $25,000, or approximately $0.003 per share, to cover certain
expenses on our behalf in exchange for issuance of 7,666,667 Class B ordinary shares (the Founder Shares). On October 31,
2025, our Sponsor transferred 25,000 Founder Shares to each of our independent directors (for an aggregate of 100,000 Founder Shares)
and 25,000 Founder Shares to our Chief Financial Officer at the same per-share price that our Sponsor purchased such shares, or approximately
$0.003 per share, resulting in our Sponsor holding 7,541,667 Founder Shares. The number of Founder Shares issued was determined based
on the expectation that such Founder Shares would represent 25% of the outstanding shares after the IPO.
1
Following the closing of the
IPO, on December 8, 2025, an amount of $230,000,000 ($10.00 per Unit) from the net proceeds of the sale of the Units in the Initial Public
Offering and the sale of the Private Placement Units was placed in the trust account (the Trust Account) and will be held
as cash, including in demand deposit accounts at a bank, or invested in U.S. government treasury obligations with a maturity of 185 days
or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act, which invest only in direct
U.S. government treasury obligations. Except with respect to interest earned on the funds held in the Trust Account that may be released
to the Company to pay its taxes, if any, the proceeds from the Initial Public Offering and the sale of the Private Placement Units will
not be released from the Trust Account until the earliest of (i) the completion of the Companys initial Business Combination, (ii)
the redemption of the Companys Public Shares if the Company is unable to complete the initial Business Combination within the Completion
Window, subject to applicable law, or (iii) the redemption of the Companys Public Shares properly submitted in connection with
a shareholder vote to amend the Companys amended and restated memorandum and articles of association to (A) modify the substance
or timing of the Companys obligation to allow redemption in connection with the initial Business Combination or to redeem 100%
of the Companys Public Shares if the Company has not consummated an initial Business Combination within the Completion Window or
(B) with respect to any other material provisions relating to shareholders rights or pre-initial Business Combination activity.
The proceeds deposited in the Trust Account could become subject to the claims of the Companys creditors, if any, which could have
priority over the claims of the holders of the Public Units (the Public Shareholders). To mitigate the risk that might be deemed to be an investment company
for purposes of the Investment Company Act, which risk increases the longer that the Company holds investments in the Trust Account, the
Company may, at any time in its own discretion, instruct the trustee to liquidate the investments held in the Trust Account and instead
to hold the funds in the Trust Account in an interest bearing bank demand deposit account.
Effecting Our Initial Business Combination
General
We are not presently engaged
in, and we will not engage in, any operations for an indefinite period of time. We intend to effectuate our initial Business Combination
using cash held in the Trust Account, the proceeds of the sale of our shares in connection with our initial Business Combination (including
pursuant to forward purchase agreements or backstop agreements we may enter into), shares issued to the owners of the target, debt issued
to bank or other lenders or the owners of the target, or a combination of the foregoing. We may seek to complete our initial Business
Combination with a company or business that may be financially unstable or in its early stages of development or growth, which would subject
us to the numerous risks inherent in such companies and businesses.
We may need to obtain additional
financing to complete our initial Business Combination, either because the transaction requires more cash than is available from the proceeds
held in our Trust Account or because we become obligated to redeem a significant number of our Public Shares upon completion of the Business
Combination, in which case we may issue additional securities or incur debt in connection with such Business Combination. There are no
prohibitions on our ability to issue securities or incur debt in connection with our initial Business Combination. We are not currently
a party to any arrangement or understanding with any third party with respect to raising any additional funds through the sale of securities,
the incurrence of debt or otherwise.
Business Strategy and Target Industries
We believe there is a significant
growth opportunity in the global defense sector, driven by sustained increases in United States Department of Defense (DoD)
funding and a renewed focus on modernization and strategic deterrence, both with the U.S. military and its allies. Several macro-level
developments are catalyzing this growth. The ongoing war in Ukraine, rising instability in the Middle East, and long-term strategic competition
with China and Russia have prompted a global reassessment of defense priorities. In response, the U.S. DoD and allied governments are
significantly increasing defense budgets, with a focus on modernization, deterrence, and readiness. A landmark NATO agreement now commits
all member states to increase pure-defense spending to 3.5% of GDP by 2035, representing a substantial long-term tailwind for the defense
sector and reinforcing the durability of this investment cycle.
The enacted U.S. DoD budget
has grown each of the last eight years, reaching $842 billion in fiscal year 2024. While the fiscal year 2025 requested budget of $850
billion represents a modest ~1% increase over the prior year, the One Big Beautiful Bill Act (OBBB) outlines a fiscal year
2026 DoD budget of $962 billion, reflecting a ~13% year-over-year increase when reconciliations are included. This continued upward trajectory
underscores the federal governments commitment to strengthening national defense capabilities. We anticipate that the current administrations
early actions will mirror the previous Trump Administration, under which the enacted DoD budget increased at an approximate 8% compound
annual growth rate. Historically, the DoD has prioritized programs that support homeland security however, following the most recent election
cycle the DoD is also actively modernizing the U.S. approach to enduring and emerging threats which we think will drive increased growth
and opportunities for companies in our targeted sectors.
2
To that end, the current administration
has outlined numerous priority areas aimed at addressing both existing and evolving national security challenges. These investments span
the defense technology, government services & national security, and space industries.
Defense Technology
We believe the global defense
technology sector is undergoing a profound transformation, driven by heightened geopolitical tensions, evolving threat landscapes, and
a renewed emphasis in national security and technological superiority. These dynamics are creating a robust and sustained investment environment,
particularly in the U.S. and among NATO allies, as governments prioritize defense modernization and strategic deterrence in response to
a rapidly shifting global security environment.
We believe that the broad
adoption of next-generation defense technology represents a foundational investment theme within the sector. The proliferation of unmanned
systems including unmanned aerial vehicles, unmanned surface vessels, and unmanned underwater vehicles is reshaping modern
warfare by enhancing intelligence, surveillance, and reconnaissance (ISR), enabling precision strikes, and improving logistics.
Emerging tactics such as use of swarms, autonomous operation and attritable (one-way) drone design are increasing both the number of devices
fielded and the complexity and capability of each device. Simultaneously, investment in counter-unmanned and other electronic warfare
systems is accelerating as adversaries increasingly rely on those same advances in unmanned systems and continue to develop more sophisticated
detection capabilities. Advanced militaries are also investing in next-generation platforms, including sixth-generation fighter programs
such as NGAD, Tempest, and FCAS, as well as hypersonic weapons and autonomous combat systems, to maintain air and space superiority. Additionally,
artificial intelligence and machine learning (AI/ML) are becoming foundational across defense platforms, enabling autonomous
operation & decision-making, predictive maintenance, and enhanced situational awareness.
We believe that the modernization
of command and control (C2) infrastructure and the integration of advanced communications and software-defined systems represent
a critical investment frontier in the defense sector. As military operations become increasingly multi-domain spanning land, air,
sea, space, and cyber the ability to rapidly collect, process, and disseminate data across platforms and services is essential
to maintaining operational superiority. Initiatives such as Joint All-Domain Command and Control are driving demand for interoperable
systems, resilient networks, and real-time data fusion capabilities that enable faster, more informed decision-making. This shift is accelerating
the adoption of cloud-native architectures, edge computing, and AI-enabled battle management software, which together form the digital
backbone of next-generation defense operations. As the battlespace becomes more connected and contested, investment in secure, scalable,
and adaptive C2 solutions is becoming a strategic imperative for advanced militaries worldwide.
We also see significant opportunity
in munitions replenishment and industrial base revitalization. The conflict in Ukraine has exposed critical vulnerabilities in global
munitions stockpiles and broader industrial base capacity, prompting the U.S. and NATO allies to invest heavily in replenishing and expanding
inventories of key systems such as Javelins, Stingers, HIMARS rockets, and precision-guided munitions. This has triggered a wave of investment
in the defense industrial base, including modernization of munitions plants through automation and digital manufacturing, capacity expansion
to reduce production lead times and meet surge demand, and public-private partnerships to ensure supply chain resilience and innovation.
In our view, these trends
represent a generational opportunity for investment across the defense technology sector. As allied nations continue to prioritize readiness,
deterrence, and technological superiority, we believe the sector is well-positioned for sustained growth, with long-term demand underpinned
by both geopolitical necessity and strategic policy alignment.
3
Government Solutions &
National Security
We believe the government
solutions & national security sector is undergoing rapid transformation as the U.S. and its allies adapt to a new era defined by hybrid
warfare, persistent cyber threats, and accelerating adversary technological capability. This evolution is driving sustained investment
in cybersecurity, mission support, and digital modernization core pillars of national resilience and operational superiority.
Despite broader reductions in federal civilian consulting and discretionary spending, we anticipate that critical areas such as cybersecurity,
analysis & intelligence, deployment of AI, and digital transformation will continue to receive robust funding. These investments reflect
bipartisan recognition of their strategic importance to national security and defense readiness.
We believe several structural
growth drivers are reinforcing this momentum. The U.S. Federal Budget for fiscal year 2025 allocated over $13 billion to cybersecurity
across civilian departments and agencies, reinforcing a whole-of-government approach to cyber resilience. In parallel, the Federal IT
budget for fiscal year 2025 exceeded $75 billion, with a significant portion directed toward secure, cloud-native platforms and zero-trust
architectures. These funding levels underscore the governments commitment to modernizing its digital infrastructure and protecting
critical systems from increasingly sophisticated threats.
Key investment themes are
emerging across several primary domains. First, in cybersecurity and digital defense, the DoD is advancing a defend forward
strategy aimed at proactively disrupting adversarial cyber operations before they can impact U.S. interests. This includes both domestic
infrastructure protection and cyber support for allies such as Ukraine. A layered cyber ecosystem is being developed to integrate military,
civilian, and private sector capabilities, enhancing national resilience against both state and non-state actors.
We believe that the growing
complexity of national security missions is driving a fundamental shift toward data-centric operations, where advanced analytics, AI,
and model-based systems engineering (MBSE) are becoming mission-critical enablers. Government agencies and defense primes
are increasingly leveraging AI/ML to extract actionable intelligence from vast, heterogeneous data sources ranging from satellite
imagery and signals intelligence to cyber threat indicators and open-source content. These capabilities are enhancing threat detection,
accelerating decision cycles, and enabling predictive insights across domains. At the same time, MBSE is transforming how complex defense
systems are designed, tested, and deployed replacing static documentation with dynamic, digital models that improve system integration,
reduce lifecycle costs, and enable rapid iteration in response to evolving mission needs. We believe that companies delivering secure,
interoperable, and mission-tailored analytics and engineering solutions are well-positioned to capture long-term value in this evolving
landscape.
Additionally, we see significant
opportunity in mission support and training modernization. AI-driven training simulations are increasingly replacing traditional physical
environments, offering scalable and cost-effective readiness solutions. Live-Virtual-Constructive integration is blending live exercises
with virtual and constructive simulations to enhance realism and adaptability. Additionally, human-machine teaming is being prioritized
to prepare warfighters for collaboration with autonomous systems and AI-enabled decision tools, reflecting the future of joint operations.
Cloud infrastructure and zero-trust
architectures are becoming foundational to defense IT modernization. Defense agencies are adopting zero-trust frameworks across cloud
environments to ensure continuous authentication and minimize both insider and external threats. The DoD is rapidly replacing outdated
IT systems with cloud-native platforms, improving interoperability, cybersecurity, and operational agility. In tandem, the U.S. is deploying
joint warfighting cloud capabilities to provide secure, multi-vendor cloud access from headquarters to the tactical edge, enabling real-time
data sharing across domains.
In our view, these trends
represent a durable and expanding opportunity set within the government services and national security landscape. As federal priorities
continue to align around digital transformation, cyber resilience, and mission readiness, we believe the sector is well-positioned for
sustained growth and innovation, supported by long-term policy commitments and strategic investment.
Space
We believe the global space
industry is undergoing a period of unprecedented growth and transformation, driven by both national security imperatives and commercial
innovation. Governments and private enterprises alike are investing heavily in space-based capabilities, recognizing the domains
critical role in defense, communications, economic development, and scientific advancement. As space becomes increasingly central to geopolitical
strategy and commercial opportunity, we anticipate continued momentum across both public and private sectors.
4
We believe military space
capabilities represent a foundational investment theme. The U.S. DoD is prioritizing investments in missile warning systems, satellite
communications, and resilient space architectures to ensure space superiority and operational continuity in contested environments. A
major initiative introduced by the Trump Administration, the Golden Dome for America, aims to establish an integrated air
and missile defense shield. The anticipated fiscal year 2026 budget allocates $25 billion toward this initiative, with a projected total
cost of $175 billion over the Administrations term. It is intended that the architecture will integrate space-based interceptors,
directed energy weapons, and ground-based missile defense systems. In parallel, the Proliferated Warfighter Space Architecture (PWSA)
is deploying a multi-layered low Earth orbit (LEO) satellite constellation to enhance secure communications and missile
tracking. International allies are also advancing sovereign capabilities, including Europes Galileo navigation system and IRIS
secure communications network.
We also see significant opportunity
in the expansion of commercial space. The advent of low-cost, commercially operating launch has led to significantly reduced launch costs
and increased mission frequency, enabling broader access to space for commercial and scientific purposes. LEO broadband constellations
are being rapidly deployed to provide global satellite internet, particularly in underserved rural and remote regions. NASA is funding
private companies to develop commercial space stations as successors to the International Space Station (ISS), targeting
applications in space tourism, microgravity research, and orbital manufacturing. Additionally, firms in the U.S. and abroad are exploring
microgravity manufacturing for high-value products such as pharmaceuticals, semiconductors, and advanced materials, leveraging the unique
properties of the space environment to unlock new commercial applications.
In our view, the convergence
of national security priorities and commercial innovation is creating a generational opportunity in the space sector. As governments and
private enterprises continue to invest in space-based infrastructure and capabilities, we believe the industry is well-positioned for
sustained growth, with a broad range of actionable opportunities across defense, communications, and advanced manufacturing.
We also seek to capitalize
on the experience of our management, board of directors, our Sponsor and their affiliates to identify, evaluate, acquire and operate a
target business.
We plan to engage with our
extensive network of industry relationships, which includes numerous private companies and entrepreneurs, private equity firms, venture
capitalists and private investors, to articulate the parameters of our search for a target company and a potential Business Combination
and begin the process of pursuing and reviewing potential opportunities.
Selection of a Target Business and
Structuring of Our Initial Business Combination
The rules of the New York
Stock Exchange (NYSE) and our amended and restated memorandum and articles of association require that we must complete
one or more Business Combinations having an aggregate fair market value of at least 80% of the value of the assets held in the Trust Account
(excluding the amount of any deferred underwriting commissions and taxes payable or paid on the interest earned on the Trust Account)
at the time of our signing a definitive agreement in connection with our initial Business Combination. Our board of directors will make
the determination as to the fair market value of our initial Business Combination. If our board of directors is not able to independently
determine the fair market value of our initial Business Combination (including with the assistance of financial advisors), we will obtain
an opinion from an independent investment banking firm which is a member of FINRA or an independent firm that commonly renders valuation
opinions for the type of company we are seeking to acquire or from an independent accounting firm that our initial Business Combination
is fair to our Company from a financial point of view. While we consider it likely that our board of directors will be able to make an
independent determination of the fair market value of our initial Business Combination, it may be unable to do so if it is less familiar
or experienced with the business of a particular target or if there is a significant amount of uncertainty as to the value of the targets
assets or prospects, including if such company is at an early stage of development, operations or growth, or if the anticipated transaction
involves a complex financial analysis or other specialized skills and the board of directors determines that outside expertise would be
helpful or necessary in conducting such analysis. As any such opinion, if obtained, would only state that the fair market value meets
the 80% of net assets threshold, unless such opinion includes material information regarding the valuation of the target or the consideration
to be provided, it is not anticipated that copies of such opinion would be distributed to our shareholders. However, if required by Schedule
14A of the Exchange Act, any proxy solicitation materials or tender offer documents that we will file with the SEC in connection with
our initial Business Combination will include such opinion.
5
We anticipate structuring
our initial Business Combination so that the post transaction company in which our Public Shareholders own shares will own or acquire
100% of the equity interests or assets of the target business or businesses. We may, however, structure our initial Business Combination
such that the post transaction company owns or acquires less than 100% of such interests or assets of the target business in order to
meet certain objectives of the target management team or shareholders or for other reasons, but we will only complete such Business Combination
if the post transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires
a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company
Act of 1940, as amended, or the Investment Company Act. Even if the post transaction company owns or acquires 50% or more of the voting
securities of the target, our shareholders prior to the Business Combination may collectively own a minority interest in the post transaction
company, depending on valuations ascribed to the target and us in the Business Combination. For example, we could pursue a transaction
in which we issue a substantial number of new shares in exchange for all of the outstanding capital stock, shares or other equity interests
of a target. In this case, we would acquire a 100% controlling interest in the target. However, as a result of the issuance of a substantial
number of new shares, our shareholders immediately prior to our initial Business Combination could own less than a majority of our issued
and outstanding shares subsequent to our initial Business Combination. If less than 100% of the equity interests or assets of a target
business or businesses are owned or acquired by the post transaction company, the portion of such business or businesses that is owned
or acquired is what will be taken into account for purposes of the 80% of net assets test described above. If the Business Combination
involves more than one target business, the 80% of net assets test will be based on the aggregate value of all of the target businesses.
We expect to seek to identify
companies that have compelling growth potential and a combination of the following characteristics. We expect to use these criteria and
guidelines in evaluating acquisition opportunities, but we may decide to enter into our initial Business Combination with a target business
that does not meet these criteria and guidelines. We intend to acquire companies or assets that we believe have the following attributes:
|
| Track Record of Operational SuccessWe will seek to complete our initial Business
Combination with a target who has a history of strong operational performance. We do not intend to acquire start-upcompanies. Furthermore,
our ideal target will be, or have the potential to be, a leader (number one or number two) in critical core segments of its business. | |
|
| Secular GrowthWe will seek to complete our initial Business Combination with
a company who is operating in a sector that is experiencing strong growth. We believe it is important for the Company to operate within
a sector that has a total addressable market that is continuing to expand at a rapid pace. | |
|
| Experienced Management TeamWe will seek to complete our initial Business Combination
with a target whose management team has a track record of strong operating and financial performance. | |
|
| Revenue Growth and VisibilityWe will seek to complete our initial Business Combination
with a target that exhibits significant growth potential, both organically and through bolt-onacquisitions. Additionally, we will
seek targets that have long-termcontracts that provide meaningful backlog and demonstrate visibility into forward revenue. | |
|
| Cash Flow PositiveWe will seek to complete our initial Business Combination
with a target that has demonstrated consistent positive operating cash flow, or a clear path to near-termcash flow generation. | |
|
| Technological DifferentiationWe will seek to complete our initial Business Combination
with a target whose products or services are underpinned by proprietary technologies or unique capabilities. | |
|
| Public Readiness We will seek to complete our initial Business Combination with a
target that has the proper financial, governance and operational systems in place | |
6
These criteria are not intended
to be exhaustive. We may use other criteria as well. Any evaluation relating to the merits of a particular initial Business Combination
may be based, to the extent relevant, on these general guidelines as well as other considerations, factors and criteria that our management
may deem relevant. In the event that we decide to enter into our initial Business Combination with a target business that does not meet
the above criteria and guidelines, we will disclose that the target business does not meet the above criteria in our shareholder communications
related to our initial Business Combination, which would be in the form of proxy solicitation materials or tender offer documents that
we would file with the U.S. Securities and Exchange Commission (the SEC).
In evaluating a prospective
target business, we expect to conduct a thorough due diligence review that will encompass, among other things, meetings with incumbent
management and employees, document reviews and inspection of facilities, as well as a review of financial and other information that will
be made available to us. We also plan to utilize our operational and capital planning experience.
The time required to select
and evaluate a target business and to structure and complete our initial Business Combination, and the costs associated with this process,
are not currently ascertainable with any degree of certainty. Any costs incurred with respect to the identification and evaluation of
a prospective target business with which our initial Business Combination is not ultimately completed will result in our incurring losses
and will reduce the funds we can use to complete another Business Combination.
We are not prohibited from
pursuing an initial Business Combination with a company that is affiliated with our Sponsor, officers or directors, or completing the
Business Combination through a joint venture or other form of shared ownership with our Sponsor, officers or directors. In the event we
seek to complete an initial Business Combination with a target that is affiliated with our Sponsor, officers or directors, we, or a committee
of independent directors, would obtain an opinion from an independent investment banking firm that is a member of FINRA or an independent
firm that commonly renders valuation opinions for the type of company we are seeking to acquire or from an independent accounting firm
that our initial Business Combination is fair to our Company from a financial point of view.
Members of our management
team and our independent directors directly or indirectly own Founder Shares and Private Placement Units and, accordingly, may have a
conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate our initial
Business Combination. The low price that our Sponsor, executive officers and directors (directly or indirectly) paid for the Founder Shares
creates an incentive whereby our officers and directors could potentially make a substantial profit even if we select an acquisition target
that subsequently declines in value and is unprofitable for Public Shareholders. If we are unable to complete our initial Business Combination
within the Completion Window, the Founder Shares and Private Placement Units may expire worthless, except to the extent they receive liquidating
distributions from assets outside the Trust Account, which could create an incentive for our Sponsor, executive officers and directors
to complete a transaction even if we select an acquisition target that subsequently declines in value and is unprofitable for Public Shareholders.
Further, each of our officers and directors may have a conflict of interest with respect to evaluating a particular Business Combination
if the retention or resignation of any such officers and directors was included by a target business as a condition to any agreement with
respect to our initial Business Combination.
Each of our officers and directors
presently has, and any of them in the future may have additional, fiduciary or contractual obligations to another entity pursuant to which
such officer or director is or will be required to present a Business Combination opportunity to such entity. Accordingly, if any of our
officers or directors becomes aware of a Business Combination opportunity which is suitable for an entity to which he or she has then
current fiduciary or contractual obligations, he or she will honor his or her fiduciary or contractual obligations to present such Business
Combination opportunity to such other entity, subject to their fiduciary duties under Cayman Islands law. Our amended and restated memorandum
and articles of association provide that to the fullest extent permitted by applicable law: (i) no individual serving as a director or
an officer shall have any duty, except and to the extent expressly assumed by contract, to refrain from engaging directly or indirectly
in the same or similar business activities or lines of business as us, and (ii) we renounce any interest or expectancy in, or in being
offered an opportunity to participate in, any potential transaction or matter which may be a corporate opportunity for any director or
officer, on the one hand, and us, on the other.
7
In addition, our Sponsor and
our officers and directors may Sponsor or form other special purpose acquisition companies similar to ours or may pursue other business
or investment ventures during the period in which we are seeking an initial Business Combination. Any such companies, businesses or investments
may present additional conflicts of interest in pursuing an initial Business Combination. However, we do not believe that such duties
or obligations will materially affect our ability to complete our initial Business Combination.
Redemption Rights for Public Shareholders
upon Completion of our Initial Business Combination
We will provide our Public
Shareholders with the opportunity to redeem all or a portion of their Public Shares upon the completion of our initial Business Combination
either (i) in connection with a general meeting called to approve the Business Combination or (ii) without a shareholder vote by means
of a tender offer. Each Public Shareholder may elect to redeem its Public Shares irrespective of whether they vote for or against the
initial Business Combination, or whether they do not vote or abstain from voting on the initial Business Combination, or whether they
were a shareholder on the record date for the shareholder meeting held to approve the initial Business Combination. The decision as to
whether we will seek shareholder approval of a proposed Business Combination or conduct a tender offer will be made by us, solely in our
discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would
require us to seek shareholder approval under applicable law or stock exchange listing requirement or whether we were deemed to be a foreign
private issuer (which would require a tender offer rather than seeking shareholder approval under SEC rules). Asset acquisitions and share
purchases would not typically require shareholder approval while direct mergers with our Company and any transactions where we issue more
than 15% of our issued and outstanding ordinary shares or seek to amend our amended and restated memorandum and articles of association
would require shareholder approval. So long as we obtain and maintain a listing for our securities on NYSE, we will be required to comply
with NYSEs shareholder approval rules.
The requirement that we provide
our Public Shareholders with the opportunity to redeem their Public Shares by one of the two methods listed above are contained in provisions
of our amended and restated memorandum and articles of association and will apply whether or not we maintain our registration under the
Exchange Act or our listing on NYSE. Such provisions may be amended if approved by a special resolution, which requires the affirmative
vote of at least two-thirds of the votes cast by the shareholders of the issued shares present in person or represented by proxy and entitled
to vote on such matter at a general meeting of the company, so long as we offer redemption in connection with such amendment.
If we provide our Public Shareholders
with the opportunity to redeem their Public Shares in connection with a general meeting, we will, pursuant to our amended and restated
memorandum and articles of association:
|
| conduct the redemptions in conjunction with a proxy solicitation pursuant to Regulation 14A of the Exchange
Act, which regulates the solicitation of proxies, and not pursuant to the tender offer rules, and | |
|
| file proxy materials with the SEC. | |
In the event that we seek
shareholder approval of our initial Business Combination, we will distribute proxy materials and, in connection therewith, provide our
Public Shareholders with the redemption rights described above upon completion of the initial Business Combination.
8
If we seek shareholder approval,
we will complete our initial Business Combination only if we obtain the approval of an ordinary resolution under Cayman Islands law, which
requires the affirmative vote of at least a majority of the votes cast by the shareholders of the issued shares present in person or represented
by proxy and entitled to vote on such matter at a general meeting of the company. A quorum for such meeting will be present if the holders
of one-third of issued and outstanding shares entitled to vote at the meeting are represented in person or by proxy. Our Sponsor, officers
and directors will count toward this quorum and, pursuant to the letter agreement, our Sponsor, officers and directors have agreed to
vote their Founder Shares, private placement shares included in the Private Placement Units and any Public Shares purchased during or
after our Initial Public Offering (including in open market and privately-negotiated transactions) in favor of our initial Business Combination.
For purposes of seeking approval of an ordinary resolution, non-votes will have no effect on the approval of our initial Business Combination
once a quorum is obtained. Assuming that only one-third of our issued and outstanding ordinary shares, representing a quorum under our
amended and restated memorandum and articles of association, are voted, we will not need any Public Shares in addition to our Founder
Shares to be voted in favor of an initial Business Combination in order to have an initial Business Combination approved. However, if
our initial Business Combination is structured as a statutory merger or consolidation with another company under Cayman Islands law, the
approval of our initial Business Combination will require a special resolution, which requires the affirmative vote of at least two-thirds
of the votes cast by the shareholders of the issued shares present in person or represented by proxy and entitled to vote on such matter
at a general meeting of the company. Each Public Shareholder may elect to redeem their Public Shares irrespective of whether they vote
for or against the proposed transaction or whether they were a Public Shareholder on the record date for the general meeting held to approve
the proposed transaction.
If a shareholder vote is not
required and we do not decide to hold a shareholder vote for business or other legal reasons, we will:
|
| conduct the redemptions pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, which regulate
issuer tender offers, and | |
|
| file tender offer documents with the SEC prior to completing our initial Business Combination which contain
substantially the same financial and other information about the initial Business Combination and the redemption rights as is required
under Regulation 14A of the Exchange Act, which regulates the solicitation of proxies. | |
In the event we conduct redemptions
pursuant to the tender offer rules, our offer to redeem will remain open for at least 20 business days, in accordance with Rule 14e-1(a)
under the Exchange Act, and we will not be permitted to complete our initial Business Combination until the expiration of the tender offer
period. In addition, the tender offer will be conditioned on Public Shareholders not tendering more than the number of Public Shares we
are permitted to redeem. If Public Shareholders tender more shares than we have offered to purchase, we will withdraw the tender offer
and not complete the initial Business Combination.
Upon the public announcement
of our initial Business Combination, if we elect to conduct redemption pursuant to the tender offer rules, we or our Sponsor will terminate
any plan established in accordance with Rule 10b5-1 to purchase our Class A Ordinary Shares in the open market, in order to comply with
Rule 14e-5 under the Exchange Act.
We intend to require our Public
Shareholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in street name,
to, at the holders option, either deliver their share certificates to our transfer agent or deliver their shares to our transfer
agent electronically using the Depository Trust Companys DWAC (Deposit/Withdrawal At Custodian) system, prior to the date set forth
in the proxy materials or tender offer documents, as applicable. In the case of proxy materials, this date may be up to two business days
prior to the scheduled vote on the proposal to approve the initial Business Combination. In addition, if we conduct redemptions in connection
with a shareholder vote, we intend to require a Public Shareholder seeking redemption of its Public Shares to also submit a written request
for redemption to our transfer agent two business days prior to the scheduled vote in which the name of the beneficial owner of such shares
is included. The proxy materials or tender offer documents, as applicable, that we will furnish to holders of our Public Shares in connection
with our initial Business Combination will indicate whether we are requiring Public Shareholders to satisfy such delivery requirements.
We believe that this will allow our transfer agent to efficiently process any redemptions without the need for further communication or
action from the redeeming Public Shareholders, which could delay redemptions and result in additional administrative cost. If the proposed
initial Business Combination is not approved and we continue to search for a target company, we will promptly return any certificates
or shares delivered by Public Shareholders who elected to redeem their shares.
9
We will provide our Public
Shareholders with the opportunity to redeem, regardless of whether they abstain, vote for, or against, our initial Business Combination,
all or a portion of their Public Shares upon the completion of our initial Business Combination at a per-share price, payable in cash,
equal to the aggregate amount then on deposit in the Trust Account calculated as of two business days prior to the consummation of the
initial Business Combination, including interest (which interest shall be net of taxes payable paid or payable), divided by the number
of then issued and outstanding Public Shares, subject to the limitations and on the conditions described herein. The amount in the Trust
Account is initially anticipated to be $10.00 per Public Share. The per share amount we will distribute to investors who properly redeem
their shares will not be reduced by the deferred underwriting commissions we will pay to the underwriters. The redemption rights will
include the requirement that any beneficial owner on whose behalf a redemption right is being exercised must identify itself in order
to validly redeem its shares. Our Sponsor, officers and directors have entered into a letter agreement with us, pursuant to which they
have agreed to waive their redemption rights with respect to their Founder Shares, private placement shares included in the Private Placement
Units and any Public Shares they may hold in connection with the completion of our initial Business Combination or an earlier redemption
in connection with the commencement of the consummation of the initial Business Combination if we determine it is desirable to facilitate
the completion of the initial Business Combination.
Our proposed initial Business
Combination may impose a minimum cash requirement for (i) cash consideration to be paid to the target or its owners, (ii) cash for working
capital or other general corporate purposes or (iii) the retention of cash to satisfy other conditions. In the event the aggregate cash
consideration we would be required to pay for all Class A Ordinary Shares that are validly submitted for redemption plus any amount required
to satisfy cash conditions pursuant to the terms of the proposed initial Business Combination exceed the aggregate amount of cash available
to us, we will not complete the initial Business Combination or redeem any shares, and all Class A Ordinary Shares submitted for redemption
will be returned to the holders thereof. We may, however, raise funds through the issuance of equity-linked securities or through loans,
advances or other indebtedness in connection with our initial Business Combination, including pursuant to forward purchase agreements
or backstop arrangements we may enter into following the consummation of our Initial Public Offering, in order to, among other reasons,
satisfy such net tangible assets or minimum cash requirements.
If we seek shareholder approval
of our initial Business Combination and we do not conduct redemptions in connection with our initial Business Combination pursuant to
the tender offer rules, our Sponsor, initial shareholders, directors, officers, advisors or their affiliates may purchase shares or Public
Warrants in privately negotiated transactions or in the open market either prior to or following the completion of our initial Business
Combination, although they are under no obligation or duty to do so. Any such price per share may be different than the amount per share
a Public Shareholder would receive if it elected to redeem its shares in connection with our initial Business Combination. Such a purchase
may include a contractual acknowledgment that such shareholder, although still the record holder of our shares is no longer the beneficial
owner thereof and therefore agrees not to exercise its redemption rights.
In the event that our Sponsor,
initial shareholders, directors, officers, advisors or their affiliates purchase shares in privately negotiated transactions from Public
Shareholders who have already elected to exercise their redemption rights, such selling shareholders would be required to revoke their
prior elections to redeem their shares.
The purpose of any such purchases
of shares could be to (i) vote such shares in favor of the Business Combination and thereby increase the likelihood of obtaining shareholder
approval of the Business Combination or (ii) to satisfy a closing condition in an agreement with a target that requires us to have a minimum
net worth or a certain amount of cash at the closing of our initial Business Combination, where it appears that such requirement would
otherwise not be met. The purpose of any such purchases of Public Warrants could be to reduce the number of Public Warrants outstanding
or to vote such warrants on any matters submitted to the warrant holders for approval in connection with our initial Business Combination.
Any such purchases of our securities may result in the completion of our initial Business Combination that may not otherwise have been
possible.
In addition, if such purchases
are made, the public float of our Class A Ordinary Shares or Public Warrants may be reduced and the number of beneficial
holders of our securities may be reduced, which may make it difficult to maintain or obtain the quotation, listing or trading of our securities
on a national securities exchange.
10
Our Sponsor, officers, directors
and/or their affiliates anticipate that they may identify the shareholders with whom our initial shareholders, officers, directors or
their affiliates may pursue privately negotiated purchases by either the shareholders contacting us directly or by our receipt of redemption
requests submitted by shareholders (in the case of Class A Ordinary Shares) following our mailing of proxy materials in connection with
our initial Business Combination. To the extent that our Sponsor, officers, directors, advisors or their affiliates enter into a private
purchase, they would identify and contact only potential selling shareholders who have expressed their election to redeem their shares
for a pro rata share of the Trust Account or vote against our initial Business Combination, whether or not such shareholder has already
submitted a proxy with respect to our initial Business Combination but only if such shares have not already been voted at the general
meeting related to our initial Business Combination. Our Sponsor, officers, directors, advisors or any of their affiliates will select
which shareholders to purchase shares from based on a negotiated price and number of shares and any other factors that they may deem relevant,
and will only purchase shares if such purchases comply with Regulation M under the Exchange Act and the other federal securities laws.
Our Sponsor, officers, directors and/or their affiliates will not make purchases of shares if the purchases would violate Section 9(a)(2)
or Rule 10b-5 of the Exchange Act. Any such purchases will be reported pursuant to Section 13 and Section 16 of the Exchange Act to the
extent such purchasers are subject to such reporting requirements.
Our Sponsor, initial shareholders,
directors, officers and their affiliates will be restricted from making purchases of shares if the purchases would violate Section 9(a)(2)
or Rule 10b-5 of the Exchange Act. Any such purchases will be reported pursuant to Section 13 and Section 16 of the Exchange Act to the
extent such purchasers are subject to such reporting requirements. Additionally, in the event our Sponsor, initial shareholders, directors,
officers and their affiliates were to purchase Public Shares or warrants from Public Shareholders, such purchases would be structured
in compliance with the requirements of Rule 14e-5 under the Exchange Act including, in pertinent part, through adherence to the following:
|
| our registration statement/proxy statement filed for our Business Combination transaction would disclose
the possibility that our Sponsor, initial shareholders, directors, officers and their affiliates may purchase Public Shares or warrants
from Public Shareholders outside the redemption process, along with the purpose of such purchases; | |
|
| if our Sponsor, initial shareholders, directors, officers and their affiliates were to purchase Public
Shares or warrants from Public Shareholders, they would do so at a price no higher than the price offered through our redemption process; | |
|
| our registration statement/proxy statement filed for our Business Combination transaction would include
a representation that any of our securities purchased by our Sponsor, initial shareholders, directors, officers and their affiliates would
not be voted in favor of approving the Business Combination transaction; | |
|
| our Sponsor, initial shareholders, directors, officers and their affiliates would not possess any redemption
rights with respect to our securities or, if they do acquire and possess redemption rights, they would waive such rights; and | |
|
| we would disclose in a Form 8-K, before our security holder meeting to approve the Business Combination
transaction, the following material items: | |
|
| the amount of our securities purchased outside of the redemption offer by our Sponsor, initial shareholders,
directors, officers and their affiliates, along with the purchase price; | |
|
| the purpose of the purchases by our Sponsor, initial shareholders, directors, officers and their affiliates; | |
|
| the impact, if any, of the purchases by our Sponsor, initial shareholders, directors, officers and their
affiliates on the likelihood that the Business Combination transaction will be approved; | |
|
| the identities of our security holders who sold to our Sponsor, initial shareholders, directors, officers
and their affiliates (if not purchased on the open market) or the nature of our security holders (e.g., 5% security holders) who sold
to our Sponsor, initial shareholders, directors, officers and their affiliates; and | |
|
| the number of our securities for which we have received redemption requests pursuant to our redemption
offer. | |
11
Please see *Item
1A. Risk Factors - If we seek shareholder approval of our initial Business Combination, our Sponsor, initial shareholders, directors,
officers and their affiliates may elect to purchase shares or Public Warrants from Public Shareholders, which may influence a vote on
a proposed Business Combination and reduce the public float of our Class A Ordinary Shares or Public Warrants.*
Notwithstanding the foregoing,
if we seek shareholder approval of our initial Business Combination and we do not conduct redemptions in connection with our initial Business
Combination pursuant to the tender offer rules, our amended and restated memorandum and articles of association provide that a Public
Shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as
a group (as defined under Section 13 of the Exchange Act), will be restricted from seeking redemption rights with respect
to more than an aggregate of 15% of the Public Shares without our prior consent, which we refer to as the Excess Shares.
We believe this restriction will discourage shareholders from accumulating large blocks of shares, and subsequent attempts by such holders
to use their ability to exercise their redemption rights against a proposed Business Combination as a means to force us or our management
to purchase their shares at a significant premium to the then-current market price or on other undesirable terms. Absent this provision,
a Public Shareholder holding more than an aggregate of 15% of the Public Shares could threaten to exercise its redemption rights if such
holders shares are not purchased by us, our Sponsor or our management at a premium to the then-current market price or on other
undesirable terms. By limiting our shareholders ability to redeem no more than 15% of the Public Shares, we believe we will limit
the ability of a small group of shareholders to unreasonably attempt to block our ability to complete our initial Business Combination,
particularly in connection with a Business Combination with a target that requires as a closing condition that we have a minimum net worth
or a certain amount of cash. However, we would not be restricting our shareholders ability to vote all of their shares (including
Excess Shares) for or against our initial Business Combination.
Redemption of Public Shares if No
Initial Business Combination
Our amended and restated memorandum
and articles of association provide that we will have only the duration of the Completion Window to complete our initial Business Combination.
If we are unable to complete our initial Business Combination within the Completion Window, we will as promptly as reasonably possible
but not more than ten business days thereafter, redeem the Public Shares, at a per-share price, payable in cash, equal to the aggregate
amount then on deposit in the Trust Account, including interest (which interest shall be net of taxes payable and up to $100,000 of interest
to pay liquidation expenses), divided by the number of then issued and outstanding Public Shares, which redemption will constitute full
and complete payment for the Public Shares and completely extinguish Public Shareholders rights as shareholders (including the
right to receive further liquidation or other distributions, if any) subject to our obligations under Cayman Islands law to provide for
claims of creditors and subject to the other requirements of applicable law.
Our Sponsor, officers and
directors have entered into a letter agreement with us, pursuant to which they have waived their rights to liquidating distributions from
the Trust Account with respect to any Founder Shares held by them if we fail to complete our initial Business Combination within the Completion
Window, although they will be entitled to liquidating distributions from assets outside the Trust Account. However, if our Sponsor or
management team acquire Public Shares in or after our Initial Public Offering, they will be entitled to liquidating distributions from
the Trust Account with respect to such Public Shares, and to liquidating distributions from assets outside the Trust Account, if we fail
to complete our initial Business Combination within the allotted Completion Window.
Our Sponsor, officers and
directors have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated memorandum
and articles of association (A) to modify the substance or timing of our obligation to allow redemption in connection with our initial
Business Combination or to redeem 100% of our Public Shares if we do not complete our initial Business Combination within the Completion
Window or (B) with respect to any other material provisions relating to shareholders rights or pre-initial Business Combination
activity, unless we provide our Public Shareholders with the opportunity to redeem their Public Shares upon approval of any such amendment
at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest (which interest
shall be net of taxes payable), divided by the number of then issued and outstanding Public Shares.
12
We expect that all costs and
expenses associated with implementing our plan of dissolution, as well as payments to any creditors, will be funded from amounts remaining
out of the approximately $1,650,000 of proceeds held outside the Trust Account, although we cannot assure you that there will be sufficient
funds for such purpose. However, if those funds are not sufficient to cover the costs and expenses associated with implementing our plan
of dissolution, to the extent that there is any interest accrued in the Trust Account not required to pay income taxes on interest income
earned on the Trust Account balance, we may request the trustee to release to us an additional amount of up to $100,000 of such accrued
interest to pay those costs and expenses.
If we were to expend all of
the net proceeds of our Initial Public Offering and the sale of the Private Placement Units, other than the proceeds deposited in the
Trust Account, and without taking into account interest, if any, earned on the Trust Account, the per-share redemption amount received
by shareholders upon our dissolution would be approximately $10.00. The proceeds deposited in the Trust Account could, however, become
subject to the claims of our creditors which would have higher priority than the claims of our Public Shareholders. We cannot assure you
that the actual per-share redemption amount received by shareholders will not be substantially less than $10.00. While we intend to pay
such amounts, if any, we cannot assure you that we will have funds sufficient to pay or provide for all creditors claims.
Although we will seek to have
all vendors, service providers, prospective target businesses and other entities with which we do business execute agreements with us
waiving any right, title, interest or claim of any kind in or to any monies held in the Trust Account for the benefit of our Public Shareholders,
there is no guarantee that they will execute such agreements or even if they execute such agreements that they would be prevented from
bringing claims against the Trust Account including but not limited to fraudulent inducement, breach of fiduciary responsibility or other
similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain an advantage with respect
to a claim against our assets, including the funds held in the Trust Account. If any third party refuses to execute an agreement waiving
such claims to the monies held in the Trust Account, our management will consider whether competitive alternatives are reasonably available
to us and will only enter into an agreement with such third party if management believes that such third partys engagement would
be in the best interests of the Company under the circumstances. Examples of possible instances where we may engage a third party that
refuses to execute a waiver include the engagement of a third party consultant whose particular expertise or skills are believed by management
to be significantly superior to those of other consultants that would agree to execute a waiver or in cases where management is unable
to find a service provider willing to execute a waiver. MaloneBailey, LLP, our independent registered public accounting firm, will not
execute agreements with us waiving such claims to the monies held in the Trust Account. In addition, there is no guarantee that such entities
will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements
with us and will not seek recourse against the Trust Account for any reason. In order to protect the amounts held in the Trust Account,
our Sponsor has agreed that it will be liable to us if and to the extent any claims by a third party for services rendered or products
sold to us (except for the companys independent auditors), or a prospective target business with which we have entered into a written
letter of intent, confidentiality or other similar agreement or Business Combination agreement, reduce the amount of funds in the Trust
Account to below the lesser of (i) $10.00 per Public Share and (ii) the actual amount per Public Share held in the Trust Account as of
the date of the liquidation of the Trust Account, if less than $10.00 per share due to reductions in the value of the trust assets, less
taxes payable, provided that such liability will not apply to any claims by a third party or prospective target business who executed
a waiver of any and all rights to the monies held in the Trust Account (whether or not such waiver is enforceable) nor will it apply to
any claims under our indemnity of the underwriters of our Initial Public Offering against certain liabilities, including liabilities under
the Securities Act. However, we have not asked our Sponsor to reserve for such indemnification obligations, nor have we independently
verified whether our Sponsor has sufficient funds to satisfy its indemnity obligations and we believe that our Sponsors only assets
are securities of our company. Therefore, we cannot assure you that our Sponsor would be able to satisfy those obligations. As a result,
if any such claims were successfully made against the Trust Account, the funds available for our initial Business Combination and redemptions
could be reduced to less than $10.00 per Public Share. In such event, we may not be able to complete our initial Business Combination,
and you would receive such lesser amount per share in connection with any redemption of your Public Shares. None of our officers or directors
will indemnify us for claims by third parties including, without limitation, claims by vendors and prospective target businesses.
13
In the event that the proceeds
in the Trust Account are reduced below the lesser of (i) $10.00 per Public Share and (ii) the actual amount per Public Share held in the
Trust Account as of the date of the liquidation of the Trust Account if less than $10.00 per share due to reductions in the value of the
trust assets, in each case less taxes payable, and our Sponsor asserts that it is unable to satisfy its indemnification obligations or
that it has no indemnification obligations related to a particular claim, our independent directors would determine whether to take legal
action against our Sponsor to enforce its indemnification obligations. While we currently expect that our independent directors would
take legal action on our behalf against our Sponsor to enforce its indemnification obligations to us, it is possible that our independent
directors in exercising their business judgment may choose not to do so in any particular instance if, for example, the cost of such legal
action is deemed by the independent directors to be too high relative to the amount recoverable or if the independent directors determine
that a favorable outcome is not likely. Accordingly, we cannot assure you that due to claims of creditors the actual value of the per-share
redemption price will not be less than $10.00 per share.
We will seek to reduce the
possibility that our Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service
providers, prospective target businesses or other entities with which we do business execute agreements with us waiving any right, title,
interest or claim of any kind in or to monies held in the Trust Account. Our Sponsor will also not be liable as to any claims under our
indemnity of the underwriters of our Initial Public Offering against certain liabilities, including liabilities under the Securities Act.
We will have access to up to approximately $1,650,000 from the proceeds of our Initial Public Offering with which to pay any such potential
claims (including costs and expenses incurred in connection with our liquidation, currently estimated to be no more than approximately
$100,000). In the event that we liquidate and it is subsequently determined that the reserve for claims and liabilities is insufficient,
shareholders who received funds from our Trust Account could be liable for claims made by creditors.
If we file a bankruptcy or
winding-up petition or an involuntary bankruptcy or winding-up petition is filed against us that is not dismissed, the proceeds held in
the Trust Account could be subject to applicable bankruptcy or insolvency law, and may be included in our bankruptcy estate and subject
to the claims of third parties with priority over the claims of our shareholders. To the extent any bankruptcy claims deplete the Trust
Account, we cannot assure you we will be able to return $10.00 per share to our Public Shareholders. Additionally, if we file a bankruptcy
or winding-up petition or an involuntary bankruptcy or winding-up petition is filed against us that is not dismissed, any distributions
received by shareholders could be viewed under applicable debtor/creditor and/or bankruptcy or insolvency laws as either a preferential
transfer or a fraudulent conveyance. As a result, a bankruptcy or insolvency court could seek to recover some or
all amounts received by our shareholders. Furthermore, our board of directors may be viewed as having breached its fiduciary duty to our
creditors and/or may have acted in bad faith, and thereby exposing itself and our Company to claims of punitive damages, by paying Public
Shareholders from the Trust Account prior to addressing the claims of creditors. We cannot assure you that claims will not be brought
against us for these reasons.
Our Public Shareholders will
be entitled to receive funds from the Trust Account only (i) in the event of the redemption of our Public Shares if we do not complete
our initial Business Combination within the Completion Window, (ii) in connection with a shareholder vote to amend our amended and restated
memorandum and articles of association (A) to modify the substance or timing of our obligation to allow redemption in connection with
our initial Business Combination or to redeem 100% of our Public Shares if we do not complete our initial Business Combination within
the Completion Window or (B) with respect to any other material provisions relating to shareholders rights or pre-initial Business
Combination activity or (iii) if they redeem their respective shares for cash upon the completion of our initial Business Combination.
In no other circumstances will a shareholder have any right or interest of any kind to or in the Trust Account. In the event we seek shareholder
approval in connection with our initial Business Combination, a shareholders voting in connection with the Business Combination
alone will not result in a shareholders redeeming its shares to us for an applicable pro rata share of the Trust Account. Such
shareholder must have also exercised its redemption rights described above. These provisions of our amended and restated memorandum and
articles of association, like all provisions of our amended and restated memorandum and articles of association, may be amended with a
shareholder vote.
14
Competition
In identifying, evaluating
and selecting a target business for our initial Business Combination, we may encounter competition from other entities having a business
objective similar to ours, including other special purpose acquisition companies, private equity groups and leveraged buyout funds, public
companies and operating businesses seeking strategic acquisitions. Many of these entities are well established and have extensive experience
identifying and effecting Business Combinations directly or through affiliates. Moreover, many of these competitors possess similar or
greater financial, technical, human and other resources than us. Our ability to acquire larger target businesses will be limited by our
available financial resources. This inherent limitation gives others an advantage in pursuing the acquisition of a target business. Furthermore,
our obligation to pay cash in connection with our Public Shareholders who exercise their redemption rights may reduce the resources available
to us for our initial Business Combination and our outstanding warrants, and the future dilution they potentially represent, may not be
viewed favorably by certain target businesses. Either of these factors may place us at a competitive disadvantage in successfully negotiating
an initial Business Combination.
Emerging Growth Company and Smaller Reporting
Company
We are an emerging
growth company, as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012
(the JOBS Act). As such, we are eligible to take advantage of certain exemptions from various reporting requirements that
are applicable to other public companies that are not emerging growth companies including, but not limited to, not being
required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act reduced disclosure obligations regarding
executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory
vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. If some investors find
our securities less attractive as a result, there may be a less active trading market for our securities and the prices of our securities
may be more volatile.
In addition, Section 107 of
the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided
in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an emerging
growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies.
We intend to take advantage of the benefits of this extended transition period.
We will remain an emerging
growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of our IPO,
(b) in which we have total annual gross revenue of at least $1.235 billion, or (c) in which we are deemed to be a large accelerated filer,
which means the market value of our Class A Ordinary Shares that are held by non-affiliates exceeds $700 million as of the prior June
30th, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period.
Additionally, we are a smaller
reporting company as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced
disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller
reporting company until the last day of the fiscal year in which (1) the market value of our ordinary shares held by non-affiliates is
equal to or exceeds $250 million as of the prior June 30th, or (2) our annual revenues equaled to or exceeded $100 million during such
completed fiscal year and the market value of our ordinary shares held by non-affiliates is equal to or exceeds $700 million as of the
prior June 30th.
Recent Developments
On January 15,
2026, the Company engaged Kevin Gottfredson, a family member of our Chief Executive Officer, to provide management and consulting services
in connection with our search for a potential Business Combination target. Under the engagement, the Company agreed to pay a $37,500 engagement
fee and a recurring fee of $12,500 per month for up to 24 months, and the contract was reviewed and approved in advance by the Audit Committee.
Fees paid to Mr. Gottfredson totaled $0 in 2025.
On February 20, 2026, the Company,
Right Advisory LLC and Robert M. Tarola entered into an agreement (the Officer Agreement). Under the terms of the Officer
Agreement, Mr. Tarola provides certain services to the Company in his capacity as Chief Financial Officer, effective as of October 31, 2025. Mr. Tarola and Right Advisory
LLC do not receive any compensation for services provided under the Officer Agreement beyond the Founder Shares already held by Mr. Tarola.
Item 1A. Risk Factors
**
*An
investment in our securities involves a high degree of risk. You should consider carefully all of the risks described below, together
with the other information contained in this Form 10-K. If any of the following events occur, our business, financial condition and operating
results may be materially adversely affected. In that event, the trading price of our securities could decline, and you could lose all
or part of your investment*.
15
Risks Relating to our Search for, and Consummation
of, or Inability to Consummate, a Business Combination
**
*Our shareholders may not be afforded an
opportunity to vote on our initial Business Combination, which means we may complete our initial Business Combination even though a majority
of our shareholders do not support such a combination.*
We may not hold a shareholder
vote to approve our initial Business Combination unless the Business Combination would require shareholder approval under applicable Cayman
Islands law or stock exchange listing requirements or if we decide to hold a shareholder vote for business or other reasons. For instance,
NYSE rules currently allow us to engage in a tender offer in lieu of a shareholder meeting but would still require us to obtain shareholder
approval if we were seeking to issue more than 15% of our issued and outstanding shares (excluding the private placement shares included
in the Private Placement Units) to a target business as consideration in any Business Combination. Therefore, if we were structuring a
Business Combination that required us to issue more than 15% of our issued and outstanding ordinary shares, we would seek shareholder
approval of such Business Combination. However, except as required by applicable law or stock exchange rule, the decision as to whether
we will seek shareholder approval of an initial Business Combination or will allow shareholders to sell their shares to us in a tender
offer will be made by us, solely in our discretion, and will be based on a variety of factors, such as the timing of the transaction and
whether the terms of the transaction would otherwise require us to seek shareholder approval. Accordingly, we may consummate our initial
Business Combination even if holders of a majority of the issued and outstanding ordinary shares do not approve of the Business Combination
we consummate.
**
*Your only opportunity to affect the investment
decision regarding a potential Business Combination may be limited to the exercise of your right to redeem your shares from us for cash.*
At the time of your investment
in us, you will not be provided with an opportunity to evaluate the specific merits or risks of any target businesses. Since our board
of directors may complete a Business Combination without seeking shareholder approval, Public Shareholders may not have the right or opportunity
to vote on the Business Combination, unless we seek such shareholder approval. Accordingly, your only opportunity to affect the investment
decision regarding a potential Business Combination may be limited to exercising your redemption rights within the period of time (which
will be at least 20business days) set forth in our tender offer documents mailed to our Public Shareholders in which we describe
our initial Business Combination. The amount of the deferred underwriting commissions payable to the underwriters is not currently required
to be adjusted for any shares that are redeemed in connection with an initial Business Combination. The per share amount we will distribute
to shareholders who properly exercise their redemption rights will not be reduced by the deferred underwriting commission and after such
redemptions and the per share value of shares held by non-redeemingshareholders may reflect our obligation to pay the deferred underwriting
commissions.
**
*If we seek shareholder approval of our initial
Business Combination, our Sponsor and members of our management team have agreed to vote in favor of such initial Business Combination,
regardless of how our Public Shareholders vote.*
Our Sponsor and members of
our management team own, on an as-convertedbasis, 25% of our outstanding ordinary shares (excluding the private placement shares
included in the Private Placement Units). Our Sponsor and members of our management team also may from time to time purchase Class A Ordinary
Shares prior to the completion of our initial Business Combination. Our amended and restated memorandum and articles of association provides
that, if we seek shareholder approval, we will complete our initial Business Combination only if a majority of the ordinary shares, represented
in person or by proxy and entitled to vote thereon, voted at a shareholder meeting are voted in favor of the Business Combination.
**
**
16
As a result, in addition to our Founder Shares and private placement
shares included in the Private Placement Units, we would need 7,316,667 or 31.8% of the 23,000,000 Public Shares sold in our IPO to be
voted in favor of an initial Business Combination in order to have our initial Business Combination approved (assuming all outstanding
shares are voted). Assuming that only the holders of one-thirdof our outstanding ordinary shares, representing a quorum under our
amended and restated memorandum and articles of association, vote their shares, we will not need any Public Shares in addition to our
Founder Shares and the private placement shares included in the Private Placement Units purchased by our Sponsor simultaneously with our
IPO to be voted in favor of an initial Business Combination in order to approve an initial Business Combination. Accordingly, if we seek
shareholder approval of our initial Business Combination, the agreement by our Sponsor and our management team to vote in favor of our
initial Business Combination will increase the likelihood that we will receive the requisite shareholder approval for such initial Business
Combination.
**
*You will not have any rights or interests
in funds from the Trust Account, except under certain limited circumstances. Therefore, to liquidate your investment, you may be forced
to sell your Public Shares or warrants, potentially at a loss.*
Our Public Shareholders will
be entitled to receive funds from the Trust Account only upon the earlier to occur of: (i)our completion of an initial Business
Combination, and then only in connection with those Class A Ordinary Shares that such shareholder properly elected to redeem, subject
to the limitations described herein, (ii)the redemption of any Public Shares properly tendered in connection with the implementation
by the directors of, following a shareholder vote, an amendment to our amended and restated memorandum and articles of association (A)to
modify the substance or timing of our obligation to provide holders of our Class A Ordinary Shares the right to have their shares redeemed
or repurchased in connection with our initial Business Combination or to redeem 100% of our Public Shares if we do not complete our initial
Business Combination within the Completion Window or (B)with respect to any other material provision relating to the rights of holders
of our Class A Ordinary Shares, and (iii)the redemption of our Public Shares if we have not consummated an initial Business Combination
within the Completion Window, subject to applicable law and as further described herein. Public Shareholders who redeem their Class A
Ordinary Shares in connection with a shareholder vote described in clause (ii)in the preceding sentence shall not be entitled to
funds from the Trust Account upon the subsequent completion of an initial Business Combination or liquidation if we have not consummated
an initial Business Combination within the Completion Window, with respect to such Class A Ordinary Shares so redeemed. In no other circumstances
will a shareholder have any right or interest of any kind to or in the Trust Account. Holders of warrants will not have any right to the
proceeds held in the Trust Account with respect to the warrants. Accordingly, to liquidate your investment, you may be forced to sell
your Public Shares or warrants, potentially at a loss.
**
*The ability of our Public Shareholders to
redeem their shares for cash may make our financial condition unattractive to potential Business Combination targets, which may make it
difficult for us to enter into a Business Combination with a target.*
We may seek to enter into
a Business Combination transaction agreement with a minimum cash requirement for (i)cash consideration to be paid to the target
or its owners, (ii)cash for working capital or other general corporate purposes or (iii)the retention of cash to satisfy other
conditions, such as the payment of expenses incurred in connection with the Business Combination. If too many Public Shareholders exercise
their redemption rights, we would not be able to meet such closing condition and, as a result, would not be able to proceed with the Business
Combination. Consequently, if accepting all properly submitted redemption requests would not allow us to satisfy a closing condition as
described above, we would not proceed with such redemption and the related Business Combination and may instead search for an alternate
Business Combination. Prospective targets will be aware of these risks and, thus, may be reluctant to enter into a Business Combination
transaction with us.
**
**
17
**
*The ability of our Public Shareholders to
exercise redemption rights with respect to a large number of our shares may not allow us to complete the most desirable Business Combination
or optimize our capital structure.*
At the time we enter into
an agreement for our initial Business Combination, we will not know how many shareholders may exercise their redemption rights, and therefore
will need to structure the transaction based on our expectations as to the number of shares that will be submitted for redemption. If
a large number of shares are submitted for redemption, we may need to restructure the transaction to reserve a greater portion of the
cash in the Trust Account or arrange for additional third-party financing. Raising additional third party financing may involve dilutive
equity issuances or the incurrence of indebtedness at higher than desirable levels (for more information on additional financings, also
see *We may issue additionalClass A Ordinary Shares or preference shares to complete our initial Business
Combination or under an employee incentive plan after completion of our initial Business Combination. We may also issue Class A Ordinary
Shares upon the conversion of the Founder Shares at a ratio greater thanone-to-oneat the time of our initial Business Combination
as a result of theanti-dilutionprovisions contained in our amended and restated memorandum and articles of association. Any
such issuances would dilute the interest of our shareholders and likely present other risks, We may issue shares
to investors in connection with our initial Business Combination at a price which is less than $10.00 or the prevailing market price of
our shares at that time, which could dilute the interests of our existing shareholders and add costs, We may
issue notes or other debt, or otherwise incur substantial debt, to complete a Business Combination, which may adversely affect our leverage
and financial condition and thus negatively impact the value of our shareholders investment in us,*and*We
may be unable to obtain additional financing to complete our initial Business Combination or to fund the operations and growth of a target
business, which could compel us to restructure or abandon a particular Business Combination. If we do not complete our initial Business
Combination, our Public Shareholders may receive only approximately $10.00 per public share, or less in certain circumstances, on the
liquidation of our Trust Account*.. Furthermore, this dilution would increase to the extent that the anti-dilutionprovision
of the Class B ordinary shares results in the issuance of Class A Ordinary Shares on a greater than one-to-onebasis upon conversion
of the ClassB ordinary shares at the time of our initial Business Combination. The effect of this dilution will be greater for shareholders
who do not redeem. In addition, the amount of the deferred underwriting compensation payable to the underwriter will not be adjusted for
any shares that are redeemed in connection with an initial Business Combination. We may not be able to generate sufficient value from
the completion of our initial Business Combination in order to overcome the dilutive impact of these and other factors, and, accordingly,
you may incur a net loss on your investment. Please see*The nominal purchase price paid by our Sponsor for
the Founder Shares may significantly dilute the implied value of your Public Shares in the event we consummate an initial Business Combination,
and our Sponsor is likely to make a substantial profit on its investment in us in the event we consummate an initial Business Combination,
even if the Business Combination causes the trading price of our Class A Ordinary Shares to materially decline*. The above considerations
may limit our ability to complete the most desirable Business Combination available to us or optimize our capital structure. The amount
of the deferred underwriting commissions payable to the underwriters will not be adjusted for any shares that are redeemed in connection
with an initial Business Combination. The per share amount we will distribute to shareholders who properly exercise their redemption rights
will not be reduced by the deferred underwriting commission and after such redemptions, the amount held in Trust Account will continue
to reflect our obligation to pay the entire deferred underwriting commissions.
**
*The ability of our Public Shareholders to
exercise redemption rights with respect to a large number of our shares could increase the probability that our initial Business Combination
would be unsuccessful and that you would have to wait for liquidation in order to redeem your shares.*
If our initial Business Combination
agreement requires us to use a portion of the cash in the Trust Account to pay the purchase price, or requires us to have a minimum amount
of cash at closing, the probability that our initial Business Combination would be unsuccessful is increased. If our initial Business
Combination is unsuccessful, you would not receive your pro rata portion of the funds in the Trust Account until we liquidate the Trust
Account. If you are in need of immediate liquidity, you could attempt to sell your shares in the open market; however, at such time our
shares may trade at a discount to the pro rata amount per share in the Trust Account. In either situation, you may suffer a material loss
on your investment or lose the benefit of funds expected in connection with your exercise of redemption rights until we liquidate or you
are able to sell your shares in the open market.
**
*The requirement that we consummate an initial
Business Combination within the Completion Window may give potential target businesses leverage over us in negotiating a Business Combination
and may limit the time we have in which to conduct due diligence on potential Business Combination targets, in particular as we approach
our dissolution deadline, which could undermine our ability to complete our initial Business Combination on terms that would produce value
for our shareholders.*
Any potential target business
with which we enter into negotiations concerning a Business Combination will be aware that we must consummate an initial Business Combination
within the Completion Window. Consequently, such target business may obtain leverage over us in negotiating a Business Combination, knowing
that if we do not complete our initial Business Combination within the required time period with that particular target business, we may
be unable to complete our initial Business Combination with any target business. This risk will increase as we get closer to the timeframe
described above. In addition, we may have limited time to conduct due diligence and may enter into our initial Business Combination on
terms that we would have rejected upon a more comprehensive investigation. The length of time it may take us to complete our diligence
and negotiate a Business Combination may reduce the amount of time available for us to ultimately complete an initial Business Combination
should such diligence or negotiations not lead to a consummated initial Business Combination.
**
**
18
**
*The nominal purchase price paid by our Sponsor
for the Founder Shares may significantly dilute the implied value of your Public Shares in the event we consummate an initial Business
Combination, and our Sponsor is likely to make a substantial profit on its investment in us in the event we consummate an initial Business
Combination, even if the Business Combination causes the trading price of our Class A Ordinary Shares to materially decline.*
Prior to our IPO, our Sponsor
paid a nominal aggregate purchase price of $25,000 for the Founder Shares, or approximately $0.003 per share (which does not include and
is not adjusted for the private placement shares included in the Private Placement Units). As a result, the value of your Public Shares
may be significantly diluted in the event we consummate an initial Business Combination, when the Founder Shares are converted into Class
A Ordinary Shares.
For example, the following
table shows the Public Shareholders, the Sponsors and the underwriters investment per share and how that compares
to the implied value of one of our shares upon the consummation of our initial Business Combination if at that time we were valued at
$220,800,000 (following payment of $9,200,000 of deferred underwriting commissions), which is the amount we would have for our initial
Business Combination in the Trust Account assuming no interest is earned on the funds held in the Trust Account and no Public Shares are
redeemed in connection with our initial Business Combination, and without taking into account any other potential impacts on our valuation
at such time, such as the trading price of our Public Shares, the Business Combination transaction costs, any equity issued or cash paid
to the targets sellers or other third parties, or the targets business itself, including its assets, liabilities, management
and prospects, as well as the value of our Public Warrants and Private Placement Warrants. At such valuation, each of our ordinary shares
would have an implied value of $7.26 per share upon consummation of our initial Business Combination, which is a 27.4% decrease as compared
to the initial implied value per Public Share (after taking into consideration the payment of the deferred underwriting commission) of
$10.00.
|
Public Shares | |
| 23,000,000 | | |
|
Founder Shares | |
| 7,666,667 | | |
|
Private placement shares included in the Private Placement Units | |
| 700,000 | | |
|
Total shares | |
| 31,366,667 | | |
|
Total funds in trust available for initial Business Combination | |
$ | 220,800,000 | | |
|
Initial implied value per Public Share | |
$ | 10.00 | | |
|
Implied value per share upon consummation of initial Business Combination | |
$ | 7.26 | | |
**
*We may engage our underwriters or any of
their respective affiliates to provide additional services to us after our IPO, which may include acting as M&A advisors in connection
with an initial Business Combination or as placement agents in connection with a related financing transaction. Our underwriters are entitled
to receive deferred underwriting commissions that will be released from the Trust Account only upon a completion of an initial Business
Combination. These financial incentives may cause our underwriters to have potential conflicts of interest in rendering any such additional
services to us after our IPO, including, for example, in connection with the sourcing and consummation of an initial Business Combination.*
We may engage our underwriters
or any of their affiliates to provide additional services to us after our IPO, including, for example, identifying potential targets,
providing M&A advisory services, acting as a placement agents in a private offering or arranging debt financing transactions. We may
pay our underwriters or any of their affiliates fair and reasonable fees or other compensation that would be determined at that time in
an arms length negotiation; provided that no agreement will be entered into with our underwriters or any of their affiliates and
no fees or other compensation for such services will be paid to our underwriters or their affiliates prior to the date that is 60days
from the date of the IPO, unless such payment would not be deemed underwriters compensation in connection with the IPO.
The underwriters are also
entitled to receive deferred underwriting commissions that are conditioned on the completion of an initial Business Combination. The underwriters
or their affiliates financial interests are tied to the consummation of a Business Combination transaction, which may give rise
to potential conflicts of interest in providing any such additional services to us, including potential conflicts of interest in connection
with the sourcing and consummation of an initial Business Combination. The underwriters are under no obligation to provide any further
services to us in order to receive all or any part of the deferred underwriting commissions.
**
**
19
**
*We may not be able to consummate an initial
Business Combination within the Completion Window, in which case we would redeem our Public Shares and liquidate.*
We may not be able to find
a suitable target business and consummate an initial Business Combination within the Completion Window. In recentyears, a number
of SPACs have liquidated due to an inability to complete an initial Business Combination within their allotted time periods. Our ability
to complete our initial Business Combination may be negatively impacted by general market conditions, volatility in the capital and debt
markets and the other risks described herein, including, but not limited to, the war between Russia and Ukraine and the Israel-Hamasconflict.
If we have not consummated
an initial Business Combination within such applicable time period, we will: (i)as promptly as reasonably possible but not more
than tenbusiness days thereafter, redeem the Public Shares, at a per share price, payable in cash, equal to the aggregate amount
then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account, if any (less up to $100,000 of
interest to pay liquidation expenses), divided by the number of the then-outstanding Public Shares, which redemption will completely extinguish
Public Shareholders rights as shareholders (including the right to receive further liquidation distributions, if any); and (ii)as
promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our board of directors,
liquidate, subject to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable
law. Our amended and restated memorandum and articles of association provides that, if we wind up for any other reason prior to the consummation
of our initial Business Combination, we will follow the foregoing procedures with respect to the liquidation of the Trust Account as promptly
as reasonably possible but not more than tenbusiness days thereafter, subject to applicable Cayman Islands law. In either such case,
our Public Shareholders may receive only $10.00 per public share, or less than $10.00 per public share, on the redemption of their shares,
and our warrants will expire worthless. See*If third parties bring claims against us, the proceeds held in
the Trust Account could be reduced and the per share redemption amount received by shareholders may be less than $10.00 per public share*
and other risk factors herein.
**
*We may decide not to extend the term we
have to consummate our initial Business Combination, in which case we would redeem our Public Shares.*
We have until the date that
is 24months from the closing of our IPO or until such earlier liquidation date as our board of directors may approve, to consummate
our initial Business Combination. If we anticipate that we may be unable to consummate our initial Business Combination within such Completion
Window, we may seek shareholder approval to amend our amended and restated memorandum and articles of association to extend the date by
which we must consummate our initial Business Combination. If we seek shareholder approval for an extension and the related amendments
are implemented by the directors, holders of Class A Ordinary Shares will be offered an opportunity to redeem their shares at a per share
price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned thereon (less taxes
paid or payable), divided by the number of then issued and outstanding Public Shares, subject to applicable law. However, we may decide
not to seek to extend the date by which we must consummate our initial Business Combination. If we do not seek to extend the date by which
we must consummate our initial Business Combination, and we are unable to consummate our initial Business Combination within the applicable
time period, we will, as promptly as reasonably possible but not more than tenbusiness days thereafter, redeem the Public Shares
for a pro rata portion of the funds held in the Trust Account, subject to our obligations under Cayman Islands law to provide for claims
of creditors and the requirements of other applicable law, and our warrants will expire worthless. There is no limit on the number of
extensions that we may seek; however, we do not expect to extend the time period to consummate our initial Business Combination beyond
36months from the closing of the IPO. If we determine not to or are unable to extend the time period to consummate our initial Business
Combination or fail to obtain shareholder approval to extend, our Sponsor, officers and directors, any other holder of our Founder Shares,
and the underwriters may lose their entire investment in us. For more information, also see *Since our Sponsor,
executive officers and directors may lose their entire investment in us*(*other than with respect to Public Shares*)*if
our initial Business Combination is not completed and no liquidating distributions from assets outside the Trust Account are available,
a conflict of interest may arise in determining whether a particular Business Combination target is appropriate for our initial Business
Combination*.
**
20
*If we seek shareholder approval of our initial
Business Combination, our Sponsor, directors, officers, advisors and their affiliates may elect to purchase units, Public Shares or warrants
from Public Shareholders, which may influence a vote on a proposed Business Combination and reduce the public float of our
Class A Ordinary Shares or warrants.*
If we seek shareholder approval
of our Business Combination and we do not conduct redemptions in connection with our Business Combination pursuant to the tender offer
rules, our Sponsor, directors, officers, advisors and their affiliates may purchase Units, Public Shares, equity-linkedsecurities
or warrants in privately negotiated transactions or in the open market either prior to or following the completion of our initial Business
Combination, although they are under no obligation to do so. Additionally, at any time at or prior to the completion of our initial Business
Combination, subject to applicable securities laws (including with respect to material nonpublic information), our Sponsor, directors,
executive officers, advisors or their affiliates may enter into transactions with investors and others to provide them with incentives
to acquire Units, Public Shares or warrants or not redeem their Public Shares, including such Public Shares included in the Units. Such
a purchase may include a contractual acknowledgment that such shareholder, although still the record holder of our shares is no longer
the beneficial owner thereof and therefore agrees not to exercise its redemption rights. In the event that our Sponsor, directors, officers,
advisors and their affiliates purchase shares in privately negotiated transactions from Public Shareholders who have already elected to
exercise their redemption rights or submitted a proxy to vote against our initial Business Combination, such selling shareholders would
be required to revoke their prior elections to redeem their shares and any proxy to vote against our initial Business Combination. We
do not currently anticipate that such purchases, if any, would constitute a tender offer subject to the tender offer rules under the ExchangeAct
or a going-privatetransaction subject to the going-privaterules under the ExchangeAct; however, if the purchasers determine
at the time of any such purchases that the purchases are subject to such rules, the purchasers will be required to comply with such rules.
It is intended that, if Rule10b-18would apply to purchases by our Sponsor, directors, officers, advisors and their affiliates,
then such purchases will comply with Rule10b-18under the ExchangeAct, to the extent it applies, which provides a safe
harbor for purchases made under certain conditions, including with respect to timing, pricing and volume of purchases.
There is no limit on the number
of securities our Sponsor, directors, officers, advisors or their affiliates may purchase in such transactions, subject to compliance
with applicable law and NYSE rules. However, they have no current commitments, plans or intentions to engage in such transactions and
have not formulated any terms or conditions for any such transactions. None of the funds held in the Trust Account will be used to purchase
Units, Public Shares or warrants in such transactions. Such persons will be subject to restrictions in making any such purchases when
they are in possession of any material non-publicinformation not disclosed to the seller or if such purchases are prohibited by
RegulationM under the ExchangeAct. The purpose of any such purchases of shares could be to (i)increase the likelihood
of obtaining shareholder approval of the Business Combination, (ii)reduce the number of Public Warrants outstanding or vote such
warrants on any matters submitted to the warrant holders for approval in connection with our initial Business Combination or (iii)to
satisfy a closing condition in an agreement with a target that requires us to have a minimum net worth or a certain amount of cash at
the closing of the Business Combination, where it appears that such requirement would otherwise not be met. Any such transactions may
result in the completion of our Business Combination that may not otherwise have been possible.
In addition, if such purchases
are made, the public float of our securities may be reduced and the number of beneficial holders of our securities may be
reduced, which may make it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities
exchange.
Our Sponsor, directors, officers,
advisors and/or their affiliates anticipate that they may identify the shareholders with whom our Sponsor, directors, officers, advisors
or their affiliates may pursue privately negotiated purchases by either the shareholders contacting us directly or by our receipt of redemption
requests submitted by shareholders (holding Class A Ordinary Shares) following our mailing of proxy materials in connection with our initial
Business Combination. To the extent that our Sponsor, directors, officers, advisors or their affiliates enter into a private purchase,
they would identify and contact only potential selling shareholders who have expressed their election to redeem their shares for a pro
rata share of the Trust Account or vote against our initial Business Combination, whether or not such shareholder has already submitted
a proxy with respect to our initial Business Combination but only if such shares have not already been voted at the general meeting related
to our initial Business Combination. Our Sponsor, directors, officers, advisors or their affiliates will select which shareholders to
purchase shares from based on the negotiated price and number of shares and any other factors that they may deem relevant, and will only
purchase shares if such purchases comply with RegulationM under the ExchangeAct and the other federal securities laws.
Any purchases by our Sponsor,
directors, officers, advisors and/or their affiliates who are affiliated purchasers under Rule10b-18under the ExchangeAct
will only be made to the extent such purchases are able to be made in compliance with Rule10b-18, which is a safe harbor from liability
for manipulation under Section9(a)(2)and Rule10b-5of the ExchangeAct. Rule10b-18has certain
technical requirements that must be complied with in order for the safe harbor to be available to the purchaser. Our Sponsor, directors,
officers, advisors and/or their affiliates will be subject to restrictions in making purchases of ordinary shares if the purchases would
violate Section9(a)(2)or Rule10b-5of the ExchangeAct. Any such purchases will be reported pursuant to Section13
and Section16 of the ExchangeAct to the extent such purchasers are subject to such reporting requirements.
21
Additionally, in the event
our Sponsor, directors, officers, advisors or their affiliates were to purchase Units, Public Shares or warrants from Public Shareholders,
such purchases would be structured in compliance with the requirements of Rule14e-5under the ExchangeAct including,
in pertinent part, through adherence to the following:
|
| Our registration statement/proxy statement filed for our
Business Combination transaction would disclose the possibility that our Sponsor, directors, officers, advisors and their affiliates
may purchase Public Shares from Public Shareholders outside the redemption process, along with the purpose of such purchases; |
|
|
| if our Sponsor, directors, officers, advisors and their affiliates
were to purchase Public Shares from Public Shareholders, they would do so at a price no higher than the price offered through our redemption
process; |
|
|
| our registration statement/proxy statement filed for our
Business Combination transaction would include a representation that any of our securities purchased by our Sponsor, directors, officers,
advisors and their affiliates would not be voted in favor of approving the Business Combination transaction; |
|
|
| our Sponsor, directors, officers, advisors and their affiliates
would not possess any redemption rights with respect to our securities or, if they do acquire and possess redemption rights, they would
waive such rights; and |
|
|
| we would disclose in a Form8-K, before our security
holder meeting to approve the Business Combination transaction, the following material items: |
|
|
| the amount of our securities purchased outside of the redemption
offer by our Sponsor, directors, officers, advisors and their affiliates, along with the purchase price; |
|
|
| the purpose of the purchases by our Sponsor, directors, officers,
advisors and their affiliates; |
|
|
| the impact, if any, of the purchases by our Sponsor, directors,
officers, advisors and their affiliates on the likelihood that the Business Combination transaction will be approved; |
|
|
| the identities of our security holders who sold to our Sponsor,
directors, officers, advisors and their affiliates (if not purchased on the open market) or the nature of our security holders (e.g.,
5% security holders) who sold to our Sponsor, directors, officers, advisors and their affiliates; and |
|
|
| the number of our securities for which we have received redemption
requests pursuant to our redemption offer. |
|
**
*If a shareholder fails to receive notice
of our offer to redeem our Public Shares in connection with our initial Business Combination, or fails to comply with the procedures for
tendering its shares, such shares may not be redeemed.*
We will comply with the proxy
rules or tender offer rules, as applicable, when conducting redemptions in connection with our initial Business Combination. Despite our
compliance with these rules, if a shareholder fails to receive our proxy solicitation or tender offer materials, as applicable, such shareholder
may not become aware of the opportunity to redeem its shares. In addition, the proxy solicitation or tender offer materials, as applicable,
that we will furnish to holders of our Public Shares in connection with our initial Business Combination will describe the various procedures
that must be complied with in order to validly redeem or tender Public Shares. In the event that a shareholder fails to comply with these
procedures, its shares may not be redeemed.
**
*As the number of special purpose acquisition
companies evaluating targets increases, attractive targets may become scarcer and there may be more competition for attractive targets.
This could increase the cost of our initial Business Combination and could even result in our inability to find a target or to consummate
an initial Business Combination.*
In recentyears, the
number of special purpose acquisition companies that have been formed has increased substantially. Many potential targets for special
purpose acquisition companies have already entered into an initial Business Combination, and there are still many special purpose acquisition
companies seeking targets for their initial Business Combination, as well as many such companies currently in registration. As a result,
at times, fewer attractive targets may be available, and it may require more time, more effort and more resources to identify a suitable
target and to consummate an initial Business Combination. In addition, because there are more special purpose acquisition companies seeking
to enter into an initial Business Combination with available targets, the competition for available targets with attractive fundamentals
or business models may increase, which could cause target companies to demand improved financial terms. Attractive Business Combinations
could also become scarcer for other reasons, such as economic or industry sector downturns, geopolitical tensions or increases in the
cost of additional capital needed to close Business Combinations or operate targets post-Business Combination. This could increase the
cost of, delay or otherwise complicate or frustrate our ability to find and consummate an initial Business Combination, and may result
in our inability to consummate an initial Business Combination on terms favorable to our investors altogether.
**
**
22
**
*Because of our limited resources and the
significant competition for Business Combination opportunities, it may be more difficult for us to complete our initial Business Combination.
If we do not complete our initial Business Combination within the Completion Window, our Public Shareholders may receive only approximately
$10.00 per public share, or less in certain circumstances, on the liquidation of our Trust Account and our warrants will expire worthless.*
We expect to encounter competition
from other entities having a business objective similar to ours, including private investors (which may be individuals or investment partnerships),
other blank check companies and other entities, domestic and international, competing for the types of businesses we intend to acquire.
Many of these individuals and entities are well-establishedand have extensive experience in identifying and effecting, directly
or indirectly, acquisitions of companies operating in or providing services to various industries. Many of these competitors possess greater
technical, human and other resources or more local industry knowledge than we do and our financial resources will be relatively limited
when contrasted with those of many of these competitors. While we believe there are numerous target businesses we could potentially acquire
with the net proceeds of our IPO and the sale of the Private Placement Units, our ability to compete with respect to the acquisition of
certain target businesses that are sizable will be limited by our available financial resources. This inherent competitive limitation
gives others an advantage in pursuing the acquisition of certain target businesses. Furthermore, we are obligated to offer holders of
our Public Shares the right to redeem their shares for cash at the time of our initial Business Combination in conjunction with a shareholder
vote or via a tender offer. Target companies will be aware that this may reduce the resources available to us for our initial Business
Combination. Any of these obligations may place us at a competitive disadvantage in successfully negotiating a Business Combination. If
we have not consummated our initial Business Combination within the required time period, our Public Shareholders may receive only approximately
$10.00 per public share, or less in certain circumstances, on the liquidation of our Trust Account and our warrants will expire worthless.
See *If third parties bring claims against us, the proceeds held in the Trust Account could be reduced and the per
share redemption amount received by shareholders may be less than $10.00 per public share* and other risk factors herein.
**
*If the net proceeds of our IPO and the sale
of the Private Placement Units not being held in the Trust Account are insufficient to allow us to operate for at least the duration of
the Completion Window, it could limit the amount available to fund our search for a target business or businesses and complete our initial
Business Combination, and we will depend on loans from our Sponsor or management team to fund our search and to complete our initial Business
Combination.*
As of December 31, 2025, $1,634,631
was available to us outside the Trust Account to fund our working capital requirements. We believe that the funds available to us outside
of the Trust Account, together with funds available from loans from our Sponsor, members of our management team or any of their affiliates
will be sufficient to allow us to operate for at least the Completion Window; however, our estimate may not be accurate, and our Sponsor,
members of our management team or any of their affiliates are under no obligation to advance funds to us in such circumstances. Of the
funds available to us, we expect to use a portion of the funds available to us to pay fees to consultants to assist us with our search
for a target business. We could also use a portion of the funds as a down payment or to fund a no-shop provision (a provision
in letters of intent designed to keep target businesses from shopping around for transactions with other companies or investors
on terms more favorable to such target businesses) with respect to a particular proposed Business Combination, although we do not have
any current intention to do so. If we entered into a letter of intent where we paid for the right to receive exclusivity from a target
business and were subsequently required to forfeit such funds (whether as a result of our breach or otherwise), we might not have sufficient
funds to continue searching for, or conduct due diligence with respect to, a target business.
23
If we are required to seek
additional capital, we would need to borrow funds from our Sponsor, members of our management team or any of their affiliates or other
third parties to operate or may be forced to liquidate. Neither our Sponsor, members of our management team nor any of their affiliates
is under any obligation to advance funds to us in such circumstances. Any such advances may be repaid only from funds held outside the
Trust Account or from funds released to us upon completion of our initial Business Combination. Up to $1,500,000 of such loans may be
convertible into Private Placement Units of the post Business Combination entity at a price of $10.00 per unit at the option of the lender.
The units issued upon conversion of any such loans would be identical to the Private Placement Units. Prior to the completion of our initial
Business Combination, we do not expect to seek loans from parties other than our Sponsor, members of our management team or any of their
affiliates as we do not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek
access to funds in our Trust Account. If we do not complete our initial Business Combination within the required time period because we
do not have sufficient funds available to us, we will be forced to cease operations and liquidate the Trust Account. Consequently, our
Public Shareholders may only receive an estimated $10.00 per public share, or possibly less, on our redemption of our Public Shares. See
*If third parties bring claims against us, the proceeds held in the Trust Account could be reduced and the per share
redemption amount received by shareholders may be less than $10.00 per public share* and other risk factors herein.
**
*We may seek Business Combination opportunities
with a high degree of complexity that require significant operational improvements, which could delay or prevent us from achieving our
desired results.*
We may seek Business Combination
opportunities with large, highly complex companies that we believe would benefit from operational improvements. While we intend to implement
such improvements, to the extent that our efforts are delayed or we are unable to achieve the desired improvements, the Business Combination
may not be as successful as we anticipate.
To the extent we complete
our initial Business Combination with a large complex business or entity with a complex operating structure, we may also be affected by
numerous risks inherent in the operations of the business with which we combine, which could delay or prevent us from implementing our
strategy. Although our management team will endeavor to evaluate the risks inherent in a particular target business and its operations,
we may not be able to properly ascertain or assess all of the significant risk factors until we complete our Business Combination. If
we are not able to achieve our desired operational improvements, or the improvements take longer to implement than anticipated, we may
not achieve the gains that we anticipate. Furthermore, some of these risks and complexities may be outside of our control and leave us
with no ability to control or reduce the chances that those risks and complexities will adversely impact a target business. Such combination
may not be as successful as a combination with a smaller, less complex organization.
**
*Our shareholders may be held liable for
claims by third parties against us to the extent of distributions received by them upon redemption of their shares.*
If we are forced to enter
into an insolvent liquidation, any distributions received by shareholders could be viewed as an unlawful payment if it was proved that
immediately following the date on which the distribution was made, we were unable to pay our debts as they fall due in the ordinary course
of business. As a result, a liquidator could seek to recover some or all amounts received by our shareholders. Furthermore, our directors
may be viewed as having breached their fiduciary duties to us or our creditors and/or may have acted in bad faith, thereby exposing themselves
and our Company to claims, by paying Public Shareholders from the Trust Account prior to addressing the claims of creditors. Claims may
be brought against us for these reasons. We and our directors and officers who knowingly and willfully authorized or permitted any distribution
to be paid out of our share premium account while we were unable to pay our debts as they fall due in the ordinary course of business
would be guilty of an offence and may be liable for a fine of $18,292.68 and imprisonment for fiveyears in the Cayman Islands.
**
*We may not hold an annual meeting of shareholders
until after the consummation of our initial Business Combination.*
In accordance with the NYSEs
corporate governance requirements, we are not required to hold an annual meeting until one year after our first fiscal year end following
our listing on the NYSE.As an exempted company, there is no requirement under the Companies Act for us to hold annual or shareholder
meetings to elect directors. Until we hold an annual meeting of shareholders, Public Shareholders may not be afforded the opportunity
to elect directors and to discuss company affairs with management. Our board of directors is divided into three classes with only one
class of directors being elected in each year and each class (except for those directors appointed prior to our first annual meeting of
shareholders) serving a three-yearterm.
24
**
*We may seek acquisition opportunities in
industries or sectors which may or may not be outside of our managements area of expertise.*
We will consider a Business
Combination outside of our managements area of expertise if a Business Combination target is presented to us and we determine that
such candidate offers an attractive acquisition opportunity for our company. Although our management will endeavor to evaluate the risks
inherent in any particular Business Combination target, we may not adequately ascertain or assess all of the significant risk factors.
We also cannot assure you that an investment in our Units will not ultimately prove to be less favorable to investors than a direct investment,
if an opportunity were available, in a Business Combination target. In the event we elect to pursue an acquisition outside of the areas
of our managements expertise, our managements expertise may not be directly applicable to its evaluation or operation. As
a result, our management may not be able to adequately ascertain or assess all of the significant risk factors. Accordingly, any holders
who choose to retain their securities following our initial Business Combination could suffer a reduction in the value of their securities.
Such holders are unlikely to have a remedy for such reduction in value unless they are able to successfully claim that the reduction was
due to the breach by our officers or directors of a duty of care or other fiduciary duty owed to them, or if they are able to successfully
bring a private claim under securities laws that the proxy solicitation or tender offer materials, as applicable, relating to the Business
Combination contained an actionable material misstatement or material omission.
**
*Our Sponsor may receive additional Class
A Ordinary Shares if we issue shares to consummate an initial Business Combination.*
Subject to adjustment for
share sub-divisions, share capitalizations, reorganizations, recapitalizations and the like, and subject to further adjustment as provided
herein, the Founder Shares, which are designated as ClassB ordinary shares, will be convertible at the option of the holder on a
one-for-onebasis or will automatically convert into Class A Ordinary Shares (such ClassA Ordinary Shares delivered upon conversion
will not have any redemption rights or be entitled to liquidating distributions from the Trust Account if we fail to consummate an initial
Business Combination) concurrently with or immediately following the consummation of our initial Business Combination at a ratio such
that the number of Class A Ordinary Shares issuable upon conversion of all Founder Shares (including, for the avoidance of doubt for purposes
of the calculation described hereafter, the Class A Ordinary Shares that may have been issued upon conversion of ClassB ordinary
shares at the option of the holder thereof prior to the consummation of our initial Business Combination) will equal, in the aggregate,
on an as-convertedbasis, 25% of the sum of (i)the total number of ordinary shares issued and outstanding (excluding the private
placement shares included in the Private Placement Units), plus (ii)the sum of the total number of Class A Ordinary Shares issued
or deemed issued or issuable upon conversion or exercise of any equity-linkedsecurities or rights issued or deemed issued, by the
Company in connection with or in relation to the consummation of the initial Business Combination, excluding any Class A Ordinary Shares
or equity-linkedsecurities exercisable for or convertible into Class A Ordinary Shares issued, deemed issued, or to be issued, to
any seller in the initial Business Combination and any private placement-equivalentunits issued to our Sponsor, members of our management
team or any of their affiliates upon conversion of working capital loans made to the Company. In no event will the ClassB ordinary
shares convert into Class A Ordinary Shares at a rate of less than one to one.
**
*We do not have a specified maximum redemption
threshold. The absence of such a redemption threshold may make it possible for us to complete our initial Business Combination with which
a substantial majority of our shareholders do not agree.*
Our amended and restated memorandum
and articles of association will not provide a specified maximum redemption threshold. Our proposed initial Business Combination may impose
a minimum cash requirement for (i)cash consideration to be paid to the target or its owners, (ii)cash for working capital
or other general corporate purposes or (iii)the retention of cash to satisfy other conditions. As a result, we may be able to complete
our initial Business Combination even though a substantial majority of our Public Shareholders do not agree with the transaction and have
redeemed their shares or, if we seek shareholder approval of our initial Business Combination and do not conduct redemptions in connection
with our initial Business Combination pursuant to the tender offer rules, have entered into privately negotiated agreements to sell their
shares to our Sponsor, officers, directors, advisors or any of their affiliates. In the event the aggregate cash consideration we would
be required to pay for all Class A Ordinary Shares that are validly submitted for redemption plus any amount required to satisfy cash
conditions pursuant to the terms of the proposed Business Combination exceed the aggregate amount of cash available to us, we will not
complete the Business Combination or redeem any shares, all Class A Ordinary Shares submitted for redemption will be returned to the holders
thereof, and we instead may search for an alternate Business Combination.
**
**
25
**
*In order to effectuate an initial Business
Combination, blank check companies have, in the recent past, amended various provisions of their charters and other governing instruments.
We may seek to amend our amended and restated memorandum and articles of association or governing instruments in a manner that will make
it easier for us to complete our initial Business Combination that our shareholders may not support.*
In order to effectuate a Business
Combination, blank check companies have, in the recent past, amended various provisions of their charters and governing instruments. For
example, blank check companies have amended the definition of Business Combination, increased redemption thresholds, extended the time
to consummate a Business Combination and, with respect to their warrants, amended their warrant agreements to require the warrants to
be exchanged for cash and/or other securities. Amending our amended and restated memorandum and articles of association requires at least
a special resolution of our shareholders as a matter of Cayman Islands law, meaning the approval of holders of at least two-thirdsof
our ordinary shares who attend and vote at a shareholder meeting of the Company, and amending our warrant agreement requires a vote of
holders of at least 50% of the Public Warrants and, solely with respect to any amendment to the terms of the Private Placement Warrants
or any provision of the warrant agreement with respect to the Private Placement Warrants, 50% of the number of the then outstanding Private
Placement Warrants and separately the vote or written consent of the underwriters. In addition, our amended and restated memorandum and
articles of association requires us to provide our Public Shareholders with the opportunity to redeem their Public Shares for cash if
we implement, following the approval of the shareholders, an amendment to our amended and restated memorandum and articles of association
(A)that would modify the substance or timing of our obligation to provide holders of our Class A Ordinary Shares the right to have
their shares redeemed or repurchased in connection with our initial Business Combination or to redeem 100% of our Public Shares if we
do not complete our initial Business Combination within the Completion Window or (B)with respect to any other material provision
relating to the rights of holders of our Class A Ordinary Shares. To the extent any of such amendments would be deemed to fundamentally
change the nature of the securities offered hereby, we would register, or seek an exemption from registration for, the affected securities.
We cannot assure you that we will not seek to amend our charter or governing instruments or extend the time to consummate an initial Business
Combination in order to effectuate our initial Business Combination.
**
*Our initial shareholders control a substantial
interest in us and thus may exert a substantial influence on actions requiring a shareholder vote, potentially in a manner that you do
not support.*
Our Sponsor and members of
our management team own, on an as-convertedbasis, 25% of our issued and outstanding ordinary shares (excluding the private placement
shares included in the Private Placement Units). Accordingly, they may exert a substantial influence on actions requiring a shareholder
vote, potentially in a manner that you do not support, including amendments to our amended and restated memorandum and articles of association.
In addition, prior to the closing of our initial Business Combination, only holders of our ClassB ordinary shares will be entitled
to vote on transferring the Company by way of continuation in a jurisdiction outside the Cayman Islands (including any special resolution
required to amend the constitutional documents of the Company or to adopt new constitutional documents of the company, in each case, as
a result of the Company approving a transfer by way of continuation in a jurisdiction outside the Cayman Islands) and, as a result, our
initial shareholders will be able to approve any such proposal without the vote of any other shareholder. These provisions of our amended
and restated memorandum and articles of association may only be amended by a special resolution passed by holders representing at least
two-thirdsof our outstanding ClassB ordinary shares. Holders of our Public Shares will not be entitled to vote on a special
resolution to amend such provisions of our amended and restated memorandum and articles during such period.
If our initial shareholders
purchase any additional Class A Ordinary Shares in the aftermarket or in privately negotiated transactions, this would increase their
control. Neither our Sponsor nor, to our knowledge, any of our officers or directors, have any current intention to purchase additional
securities. Factors that would be considered in making such additional purchases would include consideration of the current trading price
of our Class A Ordinary Shares.
26
In addition, our board of
directors, whose members were elected by our Sponsor, is and will be divided into three classes, each of which will generally serve for
a term of threeyears with only one class of directors being elected in each year. We may not hold an annual meeting of shareholders
to elect new directors prior to the completion of our initial Business Combination, in which case all of the current directors will continue
in office until at least the completion of the Business Combination. If there is an annual meeting, as a consequence of our staggered
board of directors, only a minority of the board of directors will be considered for election and our Sponsor, because of its ownership
position, will control the outcome, as only holders of our ClassB ordinary shares will have the right to vote on the election of
directors prior to our initial Business Combination. Accordingly, our Sponsor will continue to exert control at least until the completion
of our initial Business Combination. In addition, we have agreed not to enter into a definitive agreement regarding an initial Business
Combination without the prior consent of our Sponsor.
**
*After our initial Business Combination,
it is possible that a majority of our directors and officers will live outside the UnitedStates and all of our assets will be located
outside the UnitedStates; therefore investors may not be able to enforce federal securities laws or their other legal rights.*
It is possible that after
our initial Business Combination, a majority of our directors and officers will reside outside of the UnitedStates and all of our
assets will be located outside of the UnitedStates. As a result, it may be difficult, or in some cases not possible, for investors
in the UnitedStates to enforce their legal rights, to effect service of process upon all of our directors or officers or to enforce
judgments of UnitedStates courts predicated upon civil liabilities and criminal penalties on our directors and officers under UnitedStates
laws.
In particular, there is uncertainty
as to whether the courts of the Cayman Islands or any other applicable jurisdictions would recognize and enforce judgments of U.S.courts
obtained against us or our directors or officers predicated upon the civil liability provisions of the securities laws of the UnitedStates
or any state in the UnitedStates or entertain original actions brought in the Cayman Islands or any other applicable jurisdictions
courts against us or our directors or officers predicated upon the securities laws of the UnitedStates or any state in the UnitedStates.
**
*Subsequent to our completion of our initial
Business Combination, we may be required to takewrite-downsorwrite-offs, restructuring and impairment or other charges
that could have a significant negative effect on our financial condition, results of operations and the price of our securities, which
could cause you to lose some or all of your investment.*
Even if we conduct due diligence
on a target business with which we combine, this diligence may not surface all material issues with a particular target business. In addition,
factors outside of the target business and outside of our control may later arise. As a result of these factors, we may be forced to later
write-downor write-offassets, restructure our operations, or incur impairment or other charges that could result in our reporting
losses. Even if our due diligence successfully identifies certain risks, unexpected risks may arise and previously known risks may materialize
in a manner not consistent with our preliminary risk analysis. Even though these charges may be non-cashitems and not have an immediate
impact on our liquidity, the fact that we report charges of this nature could contribute to negative market perceptions about us or our
securities. In addition, charges of this nature may cause us to violate net worth or other covenants to which we may be subject as a result
of assuming pre-existing debt held by a target business or by virtue of our obtaining post-combinationdebt financing. Accordingly,
any holders who choose to retain their securities following the Business Combination could suffer a reduction in the value of their securities.
Such holders are unlikely to have a remedy for such reduction in value unless they are able to successfully claim that the reduction was
due to the breach by our officers or directors of a duty of care or other fiduciary duty owed to them, or if they are able to successfully
bring a private claim under securities laws that the proxy solicitation or tender offer materials, as applicable, relating to the Business
Combination contained an actionable material misstatement or material omission.
**
*If third parties bring claims against us,
the proceeds held in the Trust Account could be reduced and the per share redemption amount received by shareholders may be less than
$10.00 per public share.*
Our placing of funds in the
Trust Account may not protect those funds from third-party claims against us. Although we will seek to have all vendors, service providers
(excluding our independent registered public accounting firm), prospective target businesses and other entities with which we do business
execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the Trust Account for the
benefit of our Public Shareholders, such parties may not execute such agreements, or even if they execute such agreements, they may not
be prevented from bringing claims against the Trust Account, including, but not limited to, fraudulent inducement, breach of fiduciary
responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain
advantage with respect to a claim against our assets, including the funds held in the Trust Account. If any third party refuses to execute
an agreement waiving such claims to the monies held in the Trust Account, our management will perform an analysis of the alternatives
available to it and will only enter into an agreement with a third party that has not executed a waiver if management believes that such
third partys engagement would be significantly more beneficial to us than any alternative.
27
Examples of possible instances
where we may engage a third party that refuses to execute a waiver include the engagement of a third party consultant whose particular
expertise or skills are believed by management to be significantly superior to those of other consultants that would agree to execute
a waiver or in cases where management is unable to find a service provider willing to execute a waiver. In addition, there is no guarantee
that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts
or agreements with us and will not seek recourse against the Trust Account for any reason. Upon redemption of our Public Shares, if we
have not consummated an initial Business Combination within the Completion Window, or upon the exercise of a redemption right in connection
with our initial Business Combination, we will be required to provide for payment of claims of creditors that were not waived that may
be brought against us within the 10years following redemption. Accordingly, the per share redemption amount received by Public Shareholders
could be less than the $10.00 per public share initially held in the Trust Account, due to claims of such creditors. Pursuant to the letter
agreement, our Sponsor has agreed that it will be liable to us if and to the extent any claims by a third party (excluding our independent
registered public accounting firm) for services rendered or products sold to us, or a prospective target business with which we have entered
into a written letter of intent, confidentially or other similar agreement or Business Combination agreement, reduce the amounts in the
Trust Account to below the lesser of (i)$10.00 per public share and (ii)the actual amount per public share held in the Trust
Account as of the date of the liquidation of the Trust Account if less than $10.00 per public share due to reductions in the value of
the trust assets, in each case less taxes paid or payable, provided that such liability will not apply to any claims by a third party
or prospective target business who executed a waiver of any and all rights to seek access to the Trust Account nor will it apply to any
claims under our indemnity of the underwriters against certain liabilities, including liabilities under the Securities Act. Moreover,
in the event that an executed waiver is deemed to be unenforceable against a third party, our Sponsor will not be responsible to the extent
of any liability for such third-party claims. However, we have not asked our Sponsor to reserve for such indemnification obligations,
nor have we independently verified whether our Sponsor has sufficient funds to satisfy its indemnity obligations and we believe that our
Sponsors only assets are securities of our company. Our Sponsor may not be able to satisfy those obligations. As a result, if any
such claims were successfully made against the Trust Account, the funds available for our initial Business Combination and redemptions
could be reduced to less than $10.00 per public share. In such event, we may not be able to complete our initial Business Combination,
and you would receive such lesser amount per share in connection with any redemption of your Public Shares. None of our officers or directors
will indemnify us for claims by third parties including, without limitation, claims by vendors and prospective target businesses.
**
*Our directors may decide not to enforce
the indemnification obligations of our Sponsor, resulting in a reduction in the amount of funds in the Trust Account available for distribution
to our Public Shareholders.*
In the event that the proceeds
in the Trust Account are reduced below the lesser of (i)$10.00 per Public Share and (ii)the actual amount per Public Share
held in the Trust Account as of the date of the liquidation of the Trust Account if less than $10.00 per Public Share due to reductions
in the value of the trust assets, in each case less taxes paid or payable, and our Sponsor asserts that it is unable to satisfy its obligations
or that it has no indemnification obligations related to a particular claim, our independent directors would determine whether to take
legal action against our Sponsor to enforce its indemnification obligations. While we currently expect that our independent directors
would take legal action on our behalf against our Sponsor to enforce its indemnification obligations to us, it is possible that our independent
directors in exercising their business judgment and subject to their fiduciary duties may choose not to do so in any particular instance.
If our independent directors choose not to enforce these indemnification obligations, the amount of funds in the Trust Account available
for distribution to our Public Shareholders may be reduced below $10.00 per public share.
**
**
28
**
*If, after we distribute the proceeds in
the Trust Account to our Public Shareholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us
that is not dismissed, a bankruptcy court may seek to recover such proceeds, and the members of our board of directors may be viewed as
having breached their fiduciary duties to our creditors, thereby exposing the members of our board of directors and us to claims of punitive
damages.*
If, after we distribute the
proceeds in the Trust Account to our Public Shareholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed
against us that is not dismissed, any distributions received by shareholders could be viewed under applicable debtor/creditor and/or bankruptcy
laws as either a preferential transfer or a fraudulent conveyance. As a result, a bankruptcy court could seek
to recover some or all amounts received by our shareholders.
In addition, our board of
directors may be viewed as having breached its fiduciary duty to our creditors and/or having acted in bad faith, thereby exposing itself
and us to claims of punitive damages, by paying Public Shareholders from the Trust Account prior to addressing the claims of creditors.
**
*If, before distributing the proceeds in
the Trust Account to our Public Shareholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us
that is not dismissed, the claims of creditors in such proceeding may have priority over the claims of our shareholders and the per share
amount that would otherwise be received by our shareholders in connection with our liquidation may be reduced.*
If, before distributing the
proceeds in the Trust Account to our Public Shareholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed
against us that is not dismissed, the proceeds held in the Trust Account could be subject to applicable bankruptcy law, and may be included
in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our shareholders. To the extent any
bankruptcy claims deplete the Trust Account, the per share amount that would otherwise be received by our shareholders in connection with
our liquidation may be reduced.
**
*Public Shareholders will not be entitled
to vote on any appointment of directors we hold prior to the completion of our initial Business Combination and will also not be able
to vote on our continuation in a jurisdiction outside the Cayman Islands prior to our initial Business Combination.*
Prior to the completion of
our initial Business Combination, only holders of our Founder Shares will have the right to vote on the appointment of directors. Public
Shareholders will not be entitled to vote on the election of directors during such time. Accordingly, you may not have any say in the
management of our company prior to the consummation of an initial Business Combination.
Further, prior to the closing
of our initial Business Combination, only holders of Founder Shares will be entitled to vote on transferring the Company by way of continuation
in a jurisdiction outside the Cayman Islands (including any special resolution required to amend the constitutional documents of the Company
or to adopt new constitutional documents of the Company, in each case, as a result of the Company approving a transfer by way of continuation
in a jurisdiction outside the Cayman Islands) and, as a result, our Sponsor will be able to approve any such proposal without the vote
of any other shareholder.
The provisions of our amended
and restated memorandum and articles of association governing the appointment of directors prior to our initial Business Combination and
our continuation in a jurisdiction outside the Cayman Islands prior to our initial Business Combination may only be amended by a special
resolution passed by holders representing at least two-thirdsof our outstanding Founder Shares. Holders of our Public Shares will
not be entitled to vote on a special resolution to amend such provisions of our amended and restated memorandum and articles during such
period.
**
**
29
**
*Because we are neither limited to evaluating
a target business in a particular industry sector nor have we selected any specific target businesses with which to pursue our initial
Business Combination, you will be unable to ascertain the merits or risks of any particular target businesss operations.*
We may pursue Business Combination
opportunities in any sector, except that we will not, under our amended and restated memorandum and articles of association, be permitted
to effectuate our initial Business Combination solely with another blank check company or similar company with nominal operations. Because
we have not yet selected or approached any specific target business with respect to a Business Combination, there is no basis to evaluate
the possible merits or risks of any particular target business operations, results of operations, cash flows, liquidity, financial
condition or prospects. To the extent we complete our initial Business Combination, we may be affected by numerous risks inherent in the
business operations with which we combine. For example, if we combine with a financially unstable business or an entity lacking an established
record of sales or earnings, we may be affected by the risks inherent in the business and operations of a financially unstable or a development
stage entity. In recentyears, a number of target businesses of special purpose acquisition companies have underperformed financially
post-Business Combination. There are no assurances that the target business with which we consummate our initial Business Combination
will perform as anticipated. Although our officers and directors will endeavor to evaluate the risks inherent in a particular target business,
we may not properly ascertain or assess all of the significant risk factors or that we will have adequate time to complete due diligence.
Furthermore, some of these risks may be outside of our control and leave us with no ability to control or reduce the chances that those
risks will adversely impact a target business. An investment in our units may not ultimately prove to be more favorable to investors than
a direct investment, if such opportunity were available, in a Business Combination target. Accordingly, any holders who choose to retain
their securities following our initial Business Combination could suffer a reduction in the value of their securities. Such holders are
unlikely to have a remedy for such reduction in value unless they are able to successfully claim that the reduction was due to the breach
by our officers or directors of a duty of care or other fiduciary duty owed to them, or if they are able to successfully bring a private
claim under securities laws that the proxy solicitation or tender offer materials, as applicable, relating to the Business Combination
contained an actionable material misstatement or material omission.
**
*Although we have identified general criteria
that we believe are important in evaluating prospective target businesses, we may enter into our initial Business Combination with a target
that does not meet such criteria, and as a result, the target business with which we enter into our initial Business Combination may not
have attributes entirely consistent with our general criteria.*
Although we have identified
general criteria for evaluating prospective target businesses, it is possible that a target business with which we enter into our initial
Business Combination will not have all of these positive attributes. If we complete our initial Business Combination with a target that
does not meet some or all of these criteria, such combination may not be as successful as a combination with a business that does meet
all of our general criteria. In addition, if we announce a prospective Business Combination with a target that does not meet our general
criteria, a greater number of shareholders may exercise their redemption rights, which may make it difficult for us to meet any closing
condition with a target business that requires us to have a minimum net worth or a certain amount of cash. In addition, if shareholder
approval of the transaction is required by applicable law or stock exchange rule, or we decide to obtain shareholder approval for business
or other reasons, it may be more difficult for us to attain shareholder approval of our initial Business Combination if the target business
does not meet our general criteria. If we do not complete our initial Business Combination within the required time period, our Public
Shareholders may receive only approximately $10.00 per public share, or less in certain circumstances, on the liquidation of our Trust
Account and our warrants will expire worthless.
**
*We are not required to obtain an opinion
from an independent accounting or investment banking firm, and consequently, you may have no assurance from an independent source that
the price we are paying for the business is fair to our shareholders from a financial point of view.*
Unless we complete our initial
Business Combination with an affiliated entity, we are not required to obtain an opinion from an independent accounting firm or independent
investment banking firm that the price we are paying is fair to our shareholders from a financial point of view. If no opinion is obtained,
our shareholders will be relying on the judgment of our board of directors, who will determine fair market value based on standards generally
accepted by the financial community. Such standards used will be disclosed in our proxy solicitation or tender offer materials, as applicable,
related to our initial Business Combination.
**
**
30
**
*We may issue additional Class A Ordinary
Shares or preference shares to complete our initial Business Combination or under an employee incentive plan after completion of our initial
Business Combination. We may also issue Class A Ordinary Shares upon the conversion of the Founder Shares at a ratio greater thanone-to-one
at the time of our initial Business Combination as a result of theanti-dilutionprovisions contained in our amended and restated
memorandum and articles of association. Any such issuances would dilute the interest of our shareholders and likely present other risks.*
Our amended and restated memorandum
and articles of association authorizes the issuance of up to 500,000,000 Class A Ordinary Shares, par value $0.0001 per share, 50,000,000
ClassB ordinary shares, par value $0.0001 per share, and 5,000,000 preference shares, par value $0.0001 per share. As of the date
of this Form 10-K, there are 23,700,000 Class A Ordinary Shares, 7,666,667 Class B ordinary shares, and 11,850,000 warrants outstanding.
The ClassB ordinary shares are automatically convertible into Class A Ordinary Shares at the time of our initial Business Combination
or earlier at the option of the holder on a one-for-onebasis (such ClassA Ordinary Shares delivered upon conversion will not
have any redemption rights or be entitled to liquidating distributions from the Trust Account if we fail to consummate an initial Business
Combination), subject to adjustment pursuant to certain anti-dilutionrights, as described herein and in our amended and restated
memorandum and articles of association. The warrants will become exercisable for Class A Ordinary Shares at an initial exercise price
of $11.50 per share beginning 30 days after the completion of our initial Business Combination. There are no preference shares issued
and outstanding.
We may issue a substantial
number of additional Class A Ordinary Shares or preference shares to complete our initial Business Combination or under an employee incentive
plan after completion of an initial Business Combination. We may also issue Class A Ordinary Shares in connection with the redemption
of warrants or upon conversion of the ClassB ordinary shares at a ratio greater than one-to-oneat the time of our initial
Business Combination as a result of the anti-dilutionprovisions as set forth herein. However, our amended and restated memorandum
and articles of association provides, among other things, that prior to the completion of our initial Business Combination, we may not
issue additional shares that would entitle the holders thereof to (i)receive funds from the Trust Account or (ii)vote as a
class with our Public Shares (a)on our initial Business Combination or on any other proposal presented to shareholders prior to
or in connection with the completion of an initial Business Combination or (b)to approve an amendment to our amended and restated
memorandum and articles of association to (x)extend the time we have to consummate a Business Combination beyond the Completion
Window or (y)amend the foregoing provisions. These provisions of our amended and restated memorandum and articles of association,
like all provisions of our amended and restated memorandum and articles of association, may be amended with a shareholder vote. The issuance
of additional ordinary or preference shares:
|
| may significantly dilute the equity interest of investors
in our IPO, which dilution would increase if the anti-dilutionprovisions in the ClassB ordinary shares resulted in the issuance
of Class A Ordinary Shares on a greater than one-to-onebasis upon conversion of the ClassB ordinary shares; |
|
|
| may subordinate the rights of holders of Class A Ordinary
Shares if preference shares are issued with rights senior to those afforded to Class A Ordinary Shares; |
|
|
| could cause a change in control if a substantial number of
Class A Ordinary Shares are issued, which may affect, among other things, the post-Business Combination companys ability to use
its net operating loss carry forwards, if any, and could result in the resignation or removal of officers and directors; |
|
|
| may have the effect of delaying or preventing a change of
control of the post-Business Combination company by diluting the share ownership or voting rights of a person seeking to obtain control
of the post-Business Combination company; |
|
|
| may adversely affect prevailing market prices for our units,
Class A Ordinary Shares and/or warrants; and |
|
|
| may not result in adjustment to the exercise price of our
warrants. |
|
For more information on additional
financing that we may raise in connection with our Business Combination and risks related thereto, also see *We
may issue shares to investors in connection with our initial Business Combination at a price which is less than $10.00 or the prevailing
market price of our shares at that time, which could dilute the interests of our existing shareholders and add costs* and *We
may issue notes or other debt, or otherwise incur substantial debt, to complete a Business Combination, which may adversely affect our
leverage and financial condition and thus negatively impact the value of our shareholders investment in us*.
**
**
31
**
*We may issue shares to investors in connection
with our initial Business Combination at a price which is less than $10.00 or the prevailing market price of our shares at that time,
which could dilute the interests of our existing shareholders and add costs.*
In connection with our initial
Business Combination, we may issue shares to investors in private placement transactions (so-calledPIPE transactions) in order to
complete an initial Business Combination and provide sufficient liquidity and capital to the post-Business Combination entity. As of the
date of this Form 10-K, we have no commitments to issue any shares in connection with such a transaction. The price of the shares so issued
in connection with an initial Business Combination may be less, and potentially significantly less, than $10.00 per share or the market
price for our shares at such time. Any such issuances of equity securities at a price that is less than $10.00 or the prevailing market
price of our shares at that time could be structured to ensure a return on investment to the investors and could dilute the interests
of our existing shareholders and could result in both a reduction in the trading price of our shares to the price at which we issue such
equity securities and fluctuations in the net tangible book value per share of the combined companys securities following the completion
of our initial Business Combination. We may also provide price protection or other incentives, or issue convertible securities such as
preferred equity or convertible debt, and the exercise or conversion price of those securities may be fixed or adjustable, and may be
less, and potentially significantly less, than $10.00 per share or the market price for our shares at such time. Further, such dilution
would even increase if the anti-dilutionprovisions in the Class B ordinary shares resulted in the issuance of Class A Ordinary Shares
on a greater than one-to-onebasis upon conversion of the Class B ordinary shares. Such issuances could also result in additional
transaction costs related to our initial Business Combination, including the placement fees associated with the engagement of a placement
agent in connection with PIPE transactions. In order to facilitate our initial Business Combination or for any other reason determined
by our Sponsor in its sole discretion, our Sponsor, in accordance with the terms of the letter agreement, may (i) surrender or forfeit,
transfer or exchange, directly or indirectly, our Founder Shares, Private Placement Units or any of our other securities held by it, including
for no consideration, in connection with a PIPE financing or otherwise, (ii) subject any such securities to earn-outsor other restrictions,
and (iii) enter into any other arrangements with respect to any such securities.
**
*Resources could be wasted in researching
acquisitions that are not completed, which could materially adversely affect subsequent attempts to locate and acquire or merge with another
business. If we do not complete our initial Business Combination within the Completion Window, our Public Shareholders may receive only
approximately $10.00 per public share, or less in certain circumstances, on the liquidation of our Trust Account and our warrants will
expire worthless.*
We anticipate that the investigation
of each specific target business and the negotiation, drafting and execution of relevant agreements, disclosure documents and other instruments
will require substantial management time and attention and substantial costs for accountants, attorneys and others. If we decide not to
complete a specific initial Business Combination, the costs incurred up to that point for the proposed transaction likely would not be
recoverable. Furthermore, if we reach an agreement relating to a specific target business, we may fail to complete our initial Business
Combination for any number of reasons including those beyond our control. Any such event will result in a loss to us of the related costs
incurred which could materially adversely affect subsequent attempts to locate and acquire or merge with another business. If we do not
complete our initial Business Combination within the Completion Window, our Public Shareholders may receive only approximately $10.00
per public share, or less in certain circumstances, on the liquidation of our Trust Account and our warrants will expire worthless.
**
*Compliance obligations under theSarbanes-OxleyAct
may make it more difficult for us to effectuate a Business Combination, require substantial financial and management resources, and increase
the time and costs of completing an acquisition.*
Section404 of the Sarbanes-OxleyAct
requires that we evaluate and report on our system of internal controls beginning with our Annual Report on Form10-Kfor the
year ending December31, 2026. Only in the event we are deemed to be a large accelerated filer or an accelerated filer and no longer
qualify as an emerging growth company, will we be required to comply with the independent registered public accounting firm attestation
requirement on our internal control over financial reporting. The fact that we are a blank check company makes compliance with the requirements
of the Sarbanes-OxleyAct particularly burdensome on us as compared to other public companies because a target business with which
we seek to complete our initial Business Combination may not be in compliance with the provisions of the Sarbanes-OxleyAct regarding
adequacy of its internal controls. The development of the internal control of any such entity to achieve compliance with the Sarbanes-OxleyAct
may increase the time and costs necessary to complete any such Business Combination.
**
**
32
**
*We may have a limited ability to assess
the management of a prospective target business and, as a result, may affect our initial Business Combination with a target business whose
management may not have the skills, qualifications or abilities to manage a public company, which could, in turn, negatively impact the
value of our shareholders investment in us.*
When evaluating the desirability
of effecting our initial Business Combination with a prospective target business, our ability to assess the target business management
may be limited due to a lack of time, resources or information. Our assessment of the capabilities of the target businesss management,
therefore, may prove to be incorrect and such management may lack the skills, qualifications or abilities we suspected. Should the target
business management not possess the skills, qualifications or abilities necessary to manage a public company, the operations and
profitability of the post-combinationbusiness may be negatively impacted. Accordingly, any holders who choose to retain their securities
following our initial Business Combination could suffer a reduction in the value of their securities. Such holders are unlikely to have
a remedy for such reduction in value unless they are able to successfully claim that the reduction was due to the breach by our officers
or directors of a duty of care or other fiduciary duty owed to them, or if they are able to successfully bring a private claim under securities
laws that the proxy solicitation or tender offer materials, as applicable, relating to the Business Combination contained an actionable
material misstatement or material omission.
**
*We may issue notes or other debt, or otherwise
incur substantial debt, to complete a Business Combination, which may adversely affect our leverage and financial condition and thus negatively
impact the value of our shareholders investment in us.*
Although we have no commitments
as of the date of this Form 10-K to issue any notes or other debt, or to otherwise incur debt, we may choose to pursue a Business Combination
in connection with which we incur substantial debt. No issuance of debt will affect the per share amount available for redemption from
the Trust Account. However, if we issue debt securities or otherwise incur significant debt to banks or other lenders or the owners of
a target, it could result in:
|
| default and foreclosure on the assets of the post-Business
Combination company if its operating revenues are insufficient to repay its debt obligations; |
|
|
| acceleration of the post-Business Combination companys
obligations to repay such indebtedness, even if it makes all principal and interest payments when due, if it breaches certain covenants
that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant; |
|
|
| the post-Business Combination companys immediate payment
of all principal and accrued interest, if any, if the debt security is payable on demand; |
|
|
| the post-Business Combination companys inability to
obtain necessary additional financing if the debt security contains covenants restricting its ability to obtain such financing while
the debt security is outstanding; |
|
|
| using a substantial portion of the post-Business Combination
companys cash flow to pay principal and interest on its debt, which will reduce the funds available for expenses, capital expenditures,
acquisitions and other general corporate purposes; |
|
|
| limitations on the post-Business Combination companys
flexibility in planning for and reacting to changes in its business and in the industry in which it operates; |
|
|
| increased vulnerability to adverse changes in general economic,
industry and competitive conditions and adverse changes in government regulation; and |
|
|
| limitations on the post-Business Combination companys
ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, execution of its strategy
and other purposes and other disadvantages compared to its competitors who have less debt. |
|
**
*We may only be able to complete one Business
Combination with the proceeds of our IPO and the sale of the Private Placement Units, which will cause us to be solely dependent on a
single business which may have a limited number of products or services. This lack of diversification may negatively impact our operations
and profitability.*
The net proceeds from our
IPO and the sale of the Private Placement Units will provide us with up to $220,800,000 that we may use to complete our initial Business
Combination (after taking into account the $9,200,000 of deferred underwriting commissions being held in the Trust Account and the estimated
expenses of our IPO).
33
We may effectuate our initial
Business Combination with a single target business or multiple target businesses simultaneously or within a short period of time. However,
we may not be able to effectuate our initial Business Combination with more than one target business because of various factors, including
the existence of complex accounting issues and the requirement that we prepare and file pro forma financial statements with the SEC that
present operating results and the financial condition of several target businesses as if they had been operated on a combined basis. By
completing our initial Business Combination with only a single entity, our lack of diversification may subject us to numerous economic,
competitive and regulatory developments. Further, we would not be able to diversify our operations or benefit from the possible spreading
of risks or offsetting of losses, unlike other entities which may have the resources to complete several Business Combinations in different
industries or different areas of a single industry. Accordingly, the prospects for our success may be:
|
| solely dependent upon the performance of a single business,
property or asset; or |
|
|
| dependent upon the development or market acceptance of a
single or limited number of products, processes or services. |
|
This lack of diversification
may subject us to numerous economic, competitive and regulatory risks, any or all of which may have a substantial adverse impact upon
the particular industry in which we may operate subsequent to our initial Business Combination.
**
*We may attempt to simultaneously complete
Business Combinations with multiple prospective targets, which may hinder our ability to complete our initial Business Combination and
give rise to increased costs and risks that could negatively impact our operations and profitability.*
If we determine to simultaneously
acquire several businesses that are owned by different sellers, we will need for each of such sellers to agree that our purchase of its
business is contingent on the simultaneous closings of the other Business Combinations, which may make it more difficult for us, and delay
our ability, to complete our initial Business Combination. With multiple Business Combinations, we could also face additional risks, including
additional burdens and costs with respect to possible multiple negotiations and due diligence (if there are multiple sellers) and the
additional risks associated with the subsequent assimilation of the operations and services or products of the acquired companies in a
single operating business. If we do not adequately address these risks, it could negatively impact our profitability and results of operations.
**
*We may attempt to complete our initial Business
Combination with a private company about which little information is available, which may result in a Business Combination with a company
that is not as profitable as we suspected, if at all.*
In pursuing our acquisition
strategy, we may seek to effectuate our initial Business Combination with a privately held company. Very little public information generally
exists about private companies, and we could be required to make our decision on whether to pursue a potential initial Business Combination
on the basis of limited information, which may result in a Business Combination with a company that is not as profitable as we suspected,
if at all.
**
*Because we must furnish our shareholders
with target business financial statements, we may lose the ability to complete an otherwise advantageous initial Business Combination
with some prospective target businesses.*
The federal proxy rules require
that a proxy statement with respect to a vote on our proposed Business Combination include historical and/or pro forma financial statement
disclosure. We will include the same financial statement disclosure in connection with our tender offer documents, whether or not they
are required under the tender offer rules. These financial statements may be required to be prepared in accordance with, or be reconciled
to, accounting principles generally accepted in the UnitedStates of America, or GAAP, or international financial reporting standards
as issued by the International Accounting Standards Board, or IFRS, depending on the circumstances and the historical financial statements
may be required to be audited in accordance with the standards of the Public Company Accounting Oversight Board (UnitedStates),
or PCAOB.These financial statement requirements may limit the pool of potential target businesses we may acquire because some targets
may be unable to provide such statements in time for us to disclose such statements in accordance with federal proxy rules and complete
our initial Business Combination within the Completion Window.
**
**
34
**
*If we do not consummate an initial Business
Combination within the Completion Window, our Public Shareholders may be forced to wait beyond such 24months before redemption from
our Trust Account.*
If we do not consummate an
initial Business Combination within the Completion Window, the proceeds then on deposit in the Trust Account, including interest earned
on the funds held in the Trust Account (less up to $100,000 of interest to pay liquidation expenses), will be used to fund the redemption
of our Public Shares. Any redemption of Public Shareholders from the Trust Account will be effected automatically by function of our amended
and restated memorandum and articles of association prior to any voluntary winding up. If we are required to wind up, liquidate the Trust
Account and distribute such amount therein, pro rata, to our Public Shareholders, as part of any liquidation process, such winding up,
liquidation and distribution must comply with the applicable provisions of the Companies Act. In that case, investors may be forced to
wait beyond the Completion Window before the redemption proceeds of our Trust Account become available to them, and they receive the return
of their pro rata portion of the proceeds from our Trust Account. We have no obligation to return funds to investors prior to the date
of our redemption of our Public Shares or the date of liquidation of the Company unless, prior thereto, we consummate our initial Business
Combination or amend certain provisions of our amended and restated memorandum and articles of association, and only then in cases where
investors have sought to redeem their Class A Ordinary Shares. Only upon our redemption of our Public Shares or any liquidation of the
Company will Public Shareholders be entitled to distributions if we do not complete our initial Business Combination and do not amend
certain provisions of our amended and restated memorandum and articles of association. Our amended and restated memorandum and articles
of association provides that, if we wind up for any other reason prior to the consummation of our initial Business Combination, we will
follow the foregoing procedures with respect to the liquidation of the Trust Account as promptly as reasonably possible but not more than
tenbusiness days thereafter, subject to applicable Cayman Islands law.
**
*We may not be able to complete an initial
Business Combination because such initial Business Combination may be subject to regulatory review and approval requirements, including
foreign investment regulations and review by government entities such as the Committee on Foreign Investment in the UnitedStates
(CFIUS), or may be ultimately prohibited.*
Our initial Business Combination
may be subject to regulatory review and approval requirements by governmental entities, or ultimately prohibited. For example, CFIUS has
authority to review direct or indirect foreign investments in U.S.companies. Among other things, CFIUS is empowered to require certain
foreign investors to make mandatory filings, to charge filing fees related to such filings, and to self-initiatenational security
reviews of foreign direct and indirect investments in U.S.companies if the parties to that investment choose not to file voluntarily.
In the case that CFIUS determines an investment to be a threat to national security, CFIUS has the power to unwind or place restrictions
on the investment. Whether CFIUS has jurisdiction to review an acquisition or investment transaction depends onamong
other factorsthe nature and structure of the transaction, including the level of beneficial ownership interest and
the nature of any information or governance rights involved. For example, investments that result in control of a U.S.business
by a foreign person always are subject to CFIUS jurisdiction. CFIUSs expanded jurisdiction under the Foreign Investment Risk Review
Modernization Actof2018 and implementing regulations that became effective on February13, 2020 further includes investments
that do not result in control of a U.S.business by a foreign person but afford certain foreign investors certain information or
governance rights in a U.S.business that has a nexus to critical technologies, critical infrastructure
and/or sensitive personal data.
If a particular proposed initial
Business Combination with a U.S.business falls within CFIUSs jurisdiction, we may determine that we are required to make
a mandatory filing or that we will submit to CFIUS review on a voluntary basis, or to proceed with the transaction without submitting
to CFIUS and risk CFIUS intervention, before or after closing the transaction. CFIUS may decide to block or delay our proposed initial
Business Combination, impose conditions with respect to such initial Business Combination or request the President of the UnitedStates
to order us to divest all or a portion of the U.S.target business of our initial Business Combination that we acquired without first
obtaining CFIUS approval, which may limit the attractiveness of, delay or prevent us from pursuing certain target companies that we believe
would otherwise be beneficial to us and our shareholders. As a result, the pool of potential targets with which we could complete an initial
Business Combination may be limited and we may be adversely affected in terms of competing with other special purpose acquisition companies
which do not have any foreign ownership issues. In addition, certain federally licensed businesses may be subject to rules or regulations
that limit foreign ownership.
The process of government
review, whether by CFIUS or otherwise, could be lengthy. Because we have only a limited time to complete our initial Business Combination,
our failure to obtain any required approvals within the requisite time period may require us to liquidate. If we are unable to consummate
our initial Business Combination within the applicable time period required under our amended and restated memorandum and articles of
association, including as a result of extended regulatory review of a potential initial Business Combination, we will as promptly as reasonably
possible but not more than tenbusinessdays thereafter (and subject to lawfully available funds therefor), redeem the Public
Shares, at a per-shareprice, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest
earned on the funds held in the Trust Account (which interest shall be net of up to $100,000 of interest to pay liquidation expenses),
divided by the number of then issued and outstanding Public Shares, which redemption will completely extinguish Public Shareholders
rights as shareholders (including the right to receive further liquidating distributions, if any), subject to our obligations under Cayman
Islands law to provide for claims of creditors and the requirements of other applicable law. In such event, our shareholders will miss
the opportunity to benefit from an investment in a target company and the appreciation in value of such investment. Additionally, our
warrants may be worthless.
**
35
*If we are deemed to be an investment company
under the Investment Company Act, we may be required to institute burdensome compliance requirements and our activities may be restricted,
which may make it difficult for us to complete our initial Business Combination.*
If we are deemed to be an investment
company under the Investment Company Act, our activities may be restricted, including:
|
| restrictions on the nature of our investments; and |
|
|
| restrictions on the issuance of securities, each of which
may make it difficult for us to complete our initial Business Combination. In addition, we may have imposed upon us burdensome requirements,
including: |
|
|
| registration as an investment company with the SEC; |
|
|
| adoption of a specific form of corporate structure; and |
|
|
| reporting, record keeping, voting, proxy and disclosure requirements
and other rules and regulations that we are currently not subject to. |
|
In order not to be regulated
as an investment company under the Investment Company Act, unless we can qualify for an exclusion, we must ensure that we are engaged
primarily in a business other than investing, reinvesting or trading of securities and that our activities do not include investing, reinvesting,
owning, holding or trading investment securities constituting more than 40% of our assets (exclusive of U.S.government
securities and cash items) on an unconsolidated basis. Our business will be to identify and complete a Business Combination and thereafter
to operate the post-transactionbusiness or assets for the long term. We do not intend to spend a considerable amount of time actively
managing the assets in the Trust Account for the primary purpose of achieving investment returns. We do not plan to buy businesses or
assets with a view to resale or profit from their resale. We do not plan to buy unrelated businesses or assets or to be a passive investor.
We do not believe that our
anticipated principal activities will subject us to the Investment Company Act. To this end, the proceeds held in the Trust Account may
only be held as cash, including in demand deposit accounts at a bank, or invested in U.S.government securities within
the meaning of Section2(a)(16)of the Investment Company Act having a maturity of 185days or less or in money market
funds meeting certain conditions under Rule2a-7promulgated under the Investment Company Act which invest only in direct U.S.government
treasury obligations. Pursuant to the trust agreement, the trustee is not permitted to invest in other securities or assets. By restricting
the investment of the proceeds to these instruments, and by having a business plan targeted at acquiring and growing businesses for the
long term (rather than on buying and selling businesses in the manner of a merchant bank or private equity fund), we intend to avoid being
deemed an investment company within the meaning of the Investment Company Act. The Trust Account is intended as a holding
place for funds pending the earliest to occur of: (i)the completion of our initial Business Combination; (ii)the redemption
of any Public Shares properly submitted in connection with the implementation by the directors of, following a shareholder vote, an amendment
to our amended and restated memorandum and articles of association (A)to modify the substance or timing of our obligation to provide
for the redemption of our Public Shares in connection with an initial Business Combination or to redeem 100% of our Public Shares if we
have not consummated our initial Business Combination within the Completion Window or (B)with respect to any other material provisions
relating to shareholders rights or pre-initialBusiness Combination activity; or (iii)absent an initial Business Combination
within the Completion Window, our return of the funds held in the Trust Account to our Public Shareholders as part of our redemption of
the Public Shares. If we do not invest the proceeds as discussed above, we may be deemed to be subject to the Investment Company Act.
Further, under the subjective
test of a investment company pursuant to Section3(a)(1)(A)of the Investment Company Act, even if the funds deposited
in the Trust Account were invested in the assets discussed above, such assets, other than cash, are securities for purposes
of the Investment Company Act and, therefore, there is a risk that we could be deemed an investment company and subject to the Investment
Company Act.
36
In the adopting release for
the 2024 SPAC Rules (as defined below), the SEC provided guidance that a SPACs potential status as an investment company
depends on a variety of factors, such as a SPACs duration, asset composition, business purpose and activities and is a question
of facts and circumstances requiring individualized analysis. If we were deemed to be subject to compliance with and regulation
under the Investment Company Act, we would be subject to additional regulatory burdens and expenses for which we have not allotted funds.
Unless we are able to modify our activities so that we would not be deemed an investment company, we would either register as an investment
company or wind down and abandon our efforts to complete an initial Business Combination and instead liquidate the Company. As a result,
our Public Shareholders may receive only approximately $10.00 per Public Share, or less in certain circumstances, on the liquidation of
our Trust Account and our warrants will expire worthless, would lose the investment opportunity in a target company with which we may
decide to consummate an initial Business Combination and would be unable to realize the potential benefits of an initial Business Combination,
including the possible appreciation of the combined companys securities.
If our circumstances change
over time, we will update our disclosure to reflect how such changes impact the risk that we may be considered to be operating as an unregistered
investment company.
**
*To mitigate the risk that we might be deemed
to be an investment company for purposes of the Investment Company Act, we may, at any time, instruct the trustee to liquidate the securities
held in the Trust Account and instead to hold the funds in the Trust Account in cash until the earlier of the consummation of our initial
Business Combination or our liquidation. As a result, following the liquidation of securities in the Trust Account, the interest earned
on the funds held in the Trust Account may be materially reduced, which would reduce the dollar amount our Public Shareholders would receive
upon any redemption or liquidation of the Company.*
We intend to initially hold
the funds in the Trust Account as cash, including in demand deposit accounts at a bank, or in U.S.government treasury obligations
with a maturity of 185days or less or in money market funds investing solely in U.S.government treasury obligations and meeting
certain conditions under Rule2a-7under the Investment Company Act. U.S.government treasury obligations are considered
securities for purposes of the Investment Company Act, while cash is not. As noted above, one of the factors the SEC identified
as relevant to the determination of whether a SPAC which holds securities could potentially be deemed an investment company
under the Investment Company Act is the SPACs duration. To mitigate the risk of us being deemed to be an unregistered investment
company (including under the subjective test of Section3(a)(1)(A)of the Investment Company Act) and thus subject to regulation
under the Investment Company Act, we may, at any time, instruct Continental Stock Transfer& Trust Company, the trustee with
respect to the Trust Account, to liquidate the U.S.government treasury obligations or money market funds held in the Trust Account
and thereafter to hold all funds in the Trust Account in cash until the earlier of consummation of our initial Business Combination or
liquidation of the Company. Following such liquidation, the rate of interest we receive on the funds held in the Trust Account may be
materially decreased. However, interest previously earned on the funds held in the Trust Account still may be released to us to pay our
taxes, if any (excluding any Excise Tax, or similar tax, imposed on us). As a result, any decision to liquidate the securities held in
the Trust Account and thereafter to hold all funds in the Trust Account in cash would reduce the dollar amount our Public Shareholders
would receive upon any redemption or liquidation of the Company.
**
*Changes to laws or regulations or in how
such laws or regulations are interpreted or applied, or a failure to comply with any laws, regulations, interpretations or applications
may adversely affect our business, including our ability to negotiate and complete our initial Business Combination.*
We are subject to laws and
regulations, and interpretations and applications of such laws and regulations, of national, regional, state and local governments and
applicable non-U.S.jurisdictions. In particular, we are required to comply with certain SEC and potentially other legal and regulatory
requirements, and our consummation of an initial Business Combination may be contingent upon our ability to comply with certain laws,
regulations, interpretations and applications and any post-Business Combination company may be subject to additional laws, regulations,
interpretations and applications. Compliance with, and monitoring of, the foregoing may be difficult, time consuming and costly. Those
laws and regulations and their interpretation and application may also change from time to time, and those changes could have a material
adverse effect on our business, including our ability to negotiate and complete an initial Business Combination. A failure to comply with
applicable laws or regulations, as interpreted and applied, could have a material adverse effect on our business, including our ability
to negotiate and complete our initial Business Combination.
37
On January24, 2024,
the SEC issued final rules (the 2024 SPAC Rules), which became effective on July1, 2024, that formally adopted some
of the SECs proposed rules for SPACs that were released on March30, 2022. The 2024 SPAC Rules, among other items, impose
additional disclosure requirements in initial public offerings by SPACs and Business Combination transactions involving SPACs and private
operating companies; amend the financial statement requirements applicable to Business Combination transactions involving such companies;
update and expand guidance regarding the general use of projections in SEC filings, as well as when projections are disclosed in connection
with proposed Business Combination transactions; increase the potential liability of certain participants in proposed Business Combination
transactions; and could impact the extent to which SPACs could become subject to regulation under the Investment Company Actof1940.
The 2024 SPAC Rules may materially adversely affect our business, including our ability to negotiate and complete, and the costs associated
with, our initial Business Combination, and results of operations.
**
*Our search for a Business Combination, and
any target business with which we ultimately consummate a Business Combination, may be materially adversely affected by the recent and
ongoing military action between Russia and Ukraine.*
On February24, 2022,
Russian military forces launched a military action in Ukraine, and sustained conflict and disruption in the region is likely. Although
the length, impact and outcome of the ongoing military conflict in Ukraine is highly unpredictable, this conflict could lead to significant
market and other disruptions, including significant volatility in commodity prices and supply of energy resources, instability in financial
markets, supply chain interruptions, political and social instability, changes in consumer or purchaser preferences as well as increase
in cyberattacks and espionage. Russias recognition of two separatist republics in the Donetsk and Luhansk regions of Ukraine and
subsequent military action against Ukraine have led to an unprecedented expansion of sanction programs imposed by the UnitedStates,
the European Union, the United Kingdom, Canada, Switzerland, Japan and other countries against Russia, Belarus, the Crimea Region of Ukraine,
the so-calledDonetsk Peoples Republic and the so-calledLuhansk Peoples Republic.
The situation is rapidly evolving
as a result of the conflict in Ukraine, and the UnitedStates, the European Union, the United Kingdom and other countries may implement
additional sanctions, export controls or other measures against Russia, Belarus and other countries, regions, officials, individuals or
industries in the respective territories. Such sanctions and other measures, as well as the existing and potential further responses from
Russia or other countries to such sanctions, tensions and military actions, could adversely affect the global economy and financial markets
and could adversely affect our ability to search for a Business Combination or finance such Business Combination, and the business, financial
condition and results of operations of any target business with which we ultimately consummate a Business Combination may be materially
adversely affected.
**
*Macro-economicturbulence and instability
relating to recent and ongoing global conflicts and other drivers of uncertainty may adversely affect our business, investments and results
of operations and our ability to successfully consummate a Business Combination.*
A deterioration in economic
conditions and related drivers of global uncertainty and change, such as reduced business activity, high unemployment, rising interest
rates, housing prices, and energy prices (including the price of gasoline), increased consumer indebtedness, lack of available credit,
the rate of inflation, and consumer perceptions of the economy, as well as other factors, such as terrorist attacks, protests, looting,
and other forms of civil unrest, cyber attacks and data breaches, public health emergencies (such as the COVID-19pandemic and other
epidemics), extreme weather conditions and climate change, significant changes in the political environment, political instability, armed
conflict (such as the ongoing military conflict between Ukraine and Russia and the military conflict in Israel and Gaza) and/or public
policy, including increased state, local or federal taxation, could adversely affect our financial condition, the financial condition
of prospective target companies for our initial Business Combination, or the financial condition of the combined company even if we successfully
consummate a Business Combination, as well as our ability to locate a commercially viable target company for our Business Combination
in the first instance.
**
**
38
**
*The provisions of our amended and restated
memorandum and articles of association that relate to ourpre-Business Combination activity (and corresponding provisions of the
agreement governing the release of funds from our Trust Account) may be amended with the approval of a special resolution which requires
the approval of the holders of at leasttwo-thirdsof our ordinary shares who attend and vote at a shareholder meeting of the
Company (or 65% of our ordinary shares with respect to amendments to the trust agreement governing the release of funds from our Trust
Account), which is a lower amendment threshold than that of some other blank check companies. It may be easier for us, therefore, to amend
our amended and restated memorandum and articles of association to facilitate the completion of an initial Business Combination that some
of our shareholders may not support.*
Some other blank check companies
have a provision in their charter which prohibits the amendment of certain of its provisions, including those which relate to a companys
pre-Business Combination activity, without approval by a certain percentage of the companys shareholders. In those companies, amendment
of these provisions typically requires approval by between 90% and 100% of the companys shareholders. Our amended and restated
memorandum and articles of association provides that any of its provisions related to pre-Business Combination activity (including the
requirement to deposit proceeds of our IPO and the sale of the Private Placement Units into the Trust Account and not release such amounts
except in specified circumstances, and to provide redemption rights to Public Shareholders as described herein) may be amended if approved
by special resolution, meaning holders of at least two-thirdsof our ordinary shares who attend and vote at a shareholder meeting
of the Company, and corresponding provisions of the trust agreement governing the release of funds from our Trust Account may be amended
if approved by holders of at least 65% of our ordinary shares, which are represented in person or by proxy and are voted at a general
meeting; provided that the provisions of our amended and restated memorandum and articles of association governing the appointment of
directors prior to our initial Business Combination and our continuation in a jurisdiction outside the Cayman Islands prior to our initial
Business Combination may only be amended by a special resolution passed by holders representing at least two-thirdsof our outstanding
ClassB ordinary shares. Holders of our Public Shares will not be entitled to vote on a special resolution to amend such provisions
of our amended and restated memorandum and articles during such period. Our Sponsor and our management team, and their permitted transferees,
if any, who collectively beneficially own, on an as-convertedbasis, 25% of our Class A Ordinary Shares (excluding the private placement
shares included in the Private Placement Units), will participate in any vote to amend our amended and restated memorandum and articles
of association and/or trust agreement and will have the discretion to vote in any manner they choose. As a result, we may be able to amend
the provisions of our amended and restated memorandum and articles of association which govern our pre-Business Combination behavior more
easily than some other blank check companies, and this may increase our ability to complete a Business Combination with which you do not
agree. Our shareholders may pursue remedies against us for any breach of our amended and restated memorandum and articles of association.
Our Sponsor, executive officers
and directors have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated
memorandum and articles of association (A)that would modify the substance or timing of our obligation to provide holders of our
Class A Ordinary Shares the right to have their shares redeemed or repurchased in connection with our initial Business Combination or
to redeem 100% of our Public Shares if we do not complete our initial Business Combination within the Completion Window or (B)with
respect to any other material provision relating to the rights of holders of our Class A Ordinary Shares; unless we provide our Public
Shareholders with the opportunity to redeem their Class A Ordinary Shares upon implementation of any such amendment at a per share price,
payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the
Trust Account (which interest shall be net of taxes paid or payable), divided by the number of the then-outstandingPublic Shares.
Our shareholders are not parties to, or third-partybeneficiaries of, this agreement and, as a result, will not have the ability
to pursue remedies against our Sponsor, executive officers and directors for any breach of this agreement. As a result, in the event of
a breach, our shareholders would need to pursue a shareholder derivative action, subject to applicable law.
**
*We may be unable to obtain additional financing
to complete our initial Business Combination or to fund the operations and growth of a target business, which could compel us to restructure
or abandon a particular Business Combination. If we do not complete our initial Business Combination, our Public Shareholders may receive
only approximately $10.00 per public share, or less in certain circumstances, on the liquidation of our Trust Account.*
Although we believe that the
net proceeds of our IPO and the sale of the Private Placement Units will be sufficient to allow us to complete our initial Business Combination,
because we have not yet selected any specific target business we cannot ascertain the capital requirements for any particular transaction.
If the net proceeds of our IPO and the sale of the Private Placement Units prove to be insufficient, either because of the size of our
initial Business Combination, the depletion of the available net proceeds in search of a target business, the obligation to redeem for
cash a significant number of shares from shareholders who elect redemption in connection with our initial Business Combination or the
terms of negotiated transactions to purchase shares in connection with our initial Business Combination, we may be required to seek additional
financing or to abandon the proposed Business Combination. Such financing may not be available on acceptable terms, if at all. The current
economic environment may make it difficult for companies to obtain acquisition financing. To the extent that additional financing proves
to be unavailable when needed to complete our initial Business Combination, we would be compelled to either restructure the transaction
or abandon that particular Business Combination and seek an alternative target business candidate. If we do not complete our initial Business
Combination within the required time period, our Public Shareholders may receive only approximately $10.00 per public share, or less in
certain circumstances, on the liquidation of our Trust Account and our warrants will expire worthless. In addition, even if we do not
need additional financing to complete our initial Business Combination, we may require such financing to fund the operations or growth
of the target business. The failure to secure additional financing could have a material adverse effect on the continued development or
growth of the target business. None of our officers, directors or shareholders is required to provide any financing to us in connection
with or after our initial Business Combination.
**
**
39
**
*We may approve an amendment or waiver of
the letter agreement that would allow our Sponsor to directly, or members of our Sponsor to indirectly, transfer Founder Shares and Private
Placement Units or membership interests in our Sponsor in a transaction in which the Sponsor removes itself as our Sponsor before identifying
a Business Combination, which may deprive us of key personnel.*
While there is no current
intention to do so, we may approve an amendment or waiver of the letter agreement that would allow the Sponsor to directly, or members
of our Sponsor to indirectly, transfer Founder Shares and Private Placement Units (including the securities comprising such units) or
membership interests in our Sponsor in a transaction in which the Sponsor removes itself as our Sponsor before identifying a Business
Combination. As a result, there is a risk that our Sponsor and our officers and directors may divest their ownership or economic interests
in us or in our Sponsor, which would likely result in our loss of certain key personnel, including Mark Gottfredson, our Chairman and
Chief Executive Officer, Frank Bachinksy, our Chief Operating Officer, and Robert M. Tarola, our Chief Financial Officer. There can be
no assurance that any replacement Sponsor or key personnel will successfully identify a Business Combination target for us, or, even if
one is so identified, successfully complete such Business Combination.
Risks Relating to our Securities
**
*The securities in which we invest the funds
held in the Trust Account could bear a negative rate of interest, which could reduce the value of the assets held in the Trust Account
such that the per share redemption amount received by Public Shareholders may be less than $10.00 per share.*
The proceeds held in the Trust
Account will be held in cash, including in demand deposit accounts at a bank, or invested only in U.S.government treasury obligations
with a maturity of 185days or less or in money market funds meeting certain conditions under Rule2a-7under the Investment
Company Act, which invest only in direct U.S.government treasury obligations. While short-termU.S.government treasury
obligations currently yield a positive rate of interest, they have briefly yielded negative interest rates in recentyears. Central
banks in Europe and Japan pursued interest rates below zero in recentyears, and the Open Market Committee of the Federal Reserve
has not ruled out the possibility that it may in the future adopt similar policies in the UnitedStates. In the event that we are
unable to complete our initial Business Combination or make certain amendments to our amended and restated memorandum and articles of
association, our Public Shareholders are entitled to receive their pro-ratashare of the proceeds held in the Trust Account, plus
any interest income (less tax paid or payable and up to $100,000 of interest to pay liquidation expenses). Negative interest rates could
reduce the value of the assets held in the Trust Account such that the per share redemption amount received by Public Shareholders may
be less than $10.00 per share.
**
*If we seek shareholder approval of our initial
Business Combination and we do not conduct redemptions pursuant to the tender offer rules, and if you or a group of shareholders
are deemed to hold in excess of 15% of our Public Shares, you will lose the ability to redeem all such shares in excess of 15% of our
Public Shares.*
If we seek shareholder approval
of our initial Business Combination and we do not conduct redemptions in connection with our initial Business Combination pursuant to
the tender offer rules, our amended and restated memorandum and articles of association provides that a public shareholder, together with
any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a group (as
defined under Section13 of the ExchangeAct), will be restricted from seeking redemption rights with respect to more than an
aggregate of 15% of the Public Shares sold in our IPO, which we refer to as the Excess Shares, without our prior consent.
However, we would not be restricting our shareholders ability to vote all of their shares (including Excess Shares) for or against
our initial Business Combination. Your inability to redeem the Excess Shares will reduce your influence over our ability to complete our
initial Business Combination and you could suffer a material loss on your investment in us if you sell Excess Shares in open market transactions.
Additionally, you will not receive redemption distributions with respect to the Excess Shares if we complete our initial Business Combination.
And as a result, you will continue to hold that number of shares exceeding such 15% and, in order to dispose of such shares, would be
required to sell your shares in open market transactions, potentially at a loss.
**
40
*The NYSE may delist our securities from
trading on its exchange, which could limit investors ability to make transactions in our securities and subject us to additional
trading restrictions.*
Our Units, Class A Ordinary
Shares and Public Warrants on listed on the NYSE. We cannot assure you that our securities will continue to be listed on the NYSE in the
future or prior to our initial Business Combination. In order to continue listing our securities on NYSE prior to our initial Business
Combination, we must maintain certain financial, distribution and share price levels. Generally, following our initial public offering,
we must maintain a minimum amount in shareholders equity (generally $2,500,000) and a minimum number of holders of our securities
(generally 300 public holders). Additionally, in connection with our initial Business Combination, we will be required to demonstrate
compliance with the NYSEs initial listing requirements, which are more rigorous than the NYSEs continued listing requirements,
in order to continue to maintain the listing of our securities on the NYSE.For instance, our share price would generally be required
to be at least $4.00 per share and our shareholders equity would generally be required to be at least $5.0million. We cannot
assure you that we will be able to meet those initial listing requirements at that time.
If the NYSE delists our securities
from trading on its exchange and we are not able to list our securities on another national securities exchange, we expect our securities
could be quoted on an over-the-countermarket. If this were to occur, we could face significant material adverse consequences, including:
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| a limited availability of market quotations for our securities; |
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|
| reduced liquidity for our securities; |
|
|
| a determination that our Class A Ordinary Shares are a penny
stock which will require brokers trading in our Class A Ordinary Shares to adhere to more stringent rules and possibly result
in a reduced level of trading activity in the secondary trading market for our securities; |
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| a limited amount of news and analyst coverage; and |
|
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| a decreased ability to issue additional securities or obtain
additional financing in the future. |
|
The National Securities Markets
Improvement Actof1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities,
which are referred to as covered securities. Because we expect that our units and eventually our Class A Ordinary Shares
and warrants will be listed on the NYSE, our units, Class A Ordinary Shares and warrants will qualify as covered securities under the
statute. Although the states are preempted from regulating the sale of our securities, the federal statute does allow the states to investigate
companies if there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the states can regulate or bar the
sale of covered securities in a particular case. While we are not aware of a state having used these powers to prohibit or restrict the
sale of securities issued by blank check companies, other than the State of Idaho, certain state securities regulators view blank check
companies unfavorably and might use these powers, or threaten to use these powers, to hinder the sale of securities of blank check companies
in their states. Further, if we were no longer listed on the NYSE, our securities would not qualify as covered securities under the statute
and we would be subject to regulation in each state in which we offer our securities.
**
*The Founder Shares held by our Sponsor were
issued at a nominal purchase price of $25,000, or approximately $0.003 per founder share, and, accordingly, you will experience immediate
and material dilution from the purchase of our Class A Ordinary Shares.*
The difference between the
IPO price per share (allocating all of the Unit purchase price to the Class A Ordinary Shares and none to the warrant included in the
Unit ) and the pro forma net tangible book value per ClassA ordinary share following the IPO constitutes the dilution to you and
the other investors. Our Sponsor acquired the Founder Shares at a nominal price, significantly contributing to this dilution.
41
Generally, the dilution that
our Public Shareholders will experience increases the more Public Shares are redeemed. The issuance of additional ordinary or preference
shares may also significantly dilute the equity interest of investors, which dilution would even further increase if the anti-dilutionprovisions
in the ClassB ordinary shares resulted in the issuance of Class A Ordinary Shares on a greater than one-to-onebasis upon conversion
of the ClassB ordinary shares. In addition, because of the anti-dilutionprotection in the Founder Shares, any equity or equity-linkedsecurities
issued in connection with our initial Business Combination would be disproportionately dilutive to our Class A Ordinary Shares.
Our Public Shareholders will
experience dilution even if no Public Shares are redeemed in connection with an initial Business Combination or another redemption event,
for instance in connection with the implementation by the directors of, following a shareholder vote, an amendment to our amended and
restated memorandum and articles of association (A)to modify the substance or timing of our obligation to provide holders of our
Class A Ordinary Shares the right to have their shares redeemed or repurchased in connection with our initial Business Combination or
to redeem 100% of our Public Shares if we do not complete our initial Business Combination within the Completion Window or (B)with
respect to any other material provision relating to the rights of holders of our Class A Ordinary Shares.
However, while our Public
Shareholders will experience dilution even if none of our Public Shares are redeemed, the dilution they will experience will decrease
the more of our Public Shares remain issued and outstanding following a redemption event. For instance, if we seek shareholder approval
of our initial Business Combination and we do not conduct redemptions in connection with our initial Business Combination pursuant to
the tender offer rules, our Sponsor, directors, executive officers, advisors or their affiliates may purchase units, Public Shares, warrants
or equity-linkedsecurities in privately negotiated transactions or in the open market either prior to or following the completion
of our initial Business Combination, although they are under no obligation to do so. In the event of any such purchases of our shares
prior to the completion of our initial Business Combination or if we enter into non-redemptionagreements with certain of our shareholders,
the number of Class A Ordinary Shares subject to redemption will be reduced by the amount of any such purchases or shares subject to non-redemptionagreements,
increasing the pro forma net tangible book value per share.
**
*There is currently no market for our securities
and a market for our securities may not develop, which would adversely affect the liquidity and price of our securities.*
There is currently no market
for our securities. Shareholders therefore have no access to information about prior market history on which to base their investment
decision. The price of our securities may vary significantly due to one or more potential Business Combinations and general market or
economic conditions, including as a result of geopolitical events like the conflicts in Ukraine and Russia, the Israel-Hamasconflict,
economic impacts such as inflation or the COVID-19virus and any variants thereof. Furthermore, an active trading market for our
securities may never develop or, if developed, it may not be sustained. You may be unable to sell your securities unless a market can
be established and sustained.
**
*Provisions in our amended and restated memorandum
and articles of association may inhibit a takeover of us, which could limit the price investors might be willing to pay in the future
for our Class A Ordinary Shares and could entrench management.*
Our amended and restated memorandum
and articles of association will contain provisions that may discourage unsolicited takeover proposals that shareholders may consider
to be in their best interests. These provisions will include a staggered board of directors, the ability of the board of directors to
designate the terms of and issue new series of preference shares, and the fact that prior to the completion of our initial Business Combination
only holders of our ClassB ordinary shares, which have been issued to our Sponsor, are entitled to vote on the election of directors,
which may make more difficult the removal of management and may discourage transactions that otherwise could involve payment of a premium
over prevailing market prices for our securities.
**
**
42
**
*Our amended and restated memorandum and
articles of association provide that the courts of the Cayman Islands will be the exclusive forums for certain disputes between us and
our shareholders, which could limit our shareholders ability to obtain a favorable judicial forum for complaints against us or
our directors, officers or employees.*
Our amended and restated memorandum
and articles of association provide that unless we consent in writing to the selection of an alternative forum, the courts of the Cayman
Islands shall have exclusive jurisdiction over any claim or dispute arising out of or in connection with our amended and restated memorandum
and articles of association or otherwise related in any way to each shareholders shareholding in us, including but not limited
to (i)any derivative action or proceeding brought on our behalf, (ii)any action asserting a claim of breach of any fiduciary
or other duty owed by any of our current or former director, officer or other employee to us or our shareholders, (iii)any action
asserting a claim arising pursuant to any provision of the Companies Act or our amended and restated memorandum and articles of association,
or (iv)any action asserting a claim against us governed by the internal affairs doctrine (as such concept is recognized under the
laws of the UnitedStates of America) and that each shareholder irrevocably submits to the exclusive jurisdiction of the courts of
the Cayman Islands over all such claims or disputes. The forum selection provision in our amended and restated memorandum and articles
of association will not apply to actions or suits brought to enforce any liability or duty created by the Securities Act, ExchangeAct
or any claim for which the federal district courts of the UnitedStates of America are, as a matter of the laws of the UnitedStates
of America, the sole and exclusive forum for determination of such a claim.
Our amended and restated memorandum
and articles of association also provide that, without prejudice to any other rights or remedies that we may have, each of our shareholders
acknowledges that damages alone would not be an adequate remedy for any breach of the selection of the courts of the Cayman Islands as
exclusive forum and that accordingly we shall be entitled, without proof of special damages, to the remedies of injunction, specific performance
or other equitable relief for any threatened or actual breach of the selection of the courts of the Cayman Islands as exclusive forum.
This choice of forum provision
may increase a shareholders cost and limit the shareholders ability to bring a claim in a judicial forum that it finds favorable
for disputes with us or our directors, officers or other employees, which may discourage lawsuits against us and our directors, officers
and other employees. Any person or entity purchasing or otherwise acquiring any of our shares or other securities, whether by transfer,
sale, operation of law or otherwise, shall be deemed to have notice of and have irrevocably agreed and consented to these provisions.
There is uncertainty as to whether a court would enforce such provisions, and the enforceability of similar choice of forum provisions
in other companies charter documents has been challenged in legal proceedings. It is possible that a court could find this type
of provisions to be inapplicable or unenforceable, and if a court were to find this provision in our amended and restated memorandum and
articles of association to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving the
dispute in other jurisdictions, which could have adverse effect on our business and financial performance.
**
*Changes in the market for directors and
officers liability insurance could make it more difficult and more expensive for us to negotiate and complete an initial Business Combination.*
The market for directors and
officers liability insurance for special purpose acquisition companies may change in ways adverse to us and our management team. Fewer
insurance companies may offer quotes for directors and officers liability coverage, the premiums charged for such policies may increase
and the terms of such policies may become less favorable.
The increased cost and decreased
availability of directors and officers liability insurance could make it more difficult and more expensive for us to negotiate an initial
Business Combination. In order to obtain directors and officers liability insurance or modify its coverage as a result of becoming a public
company, the post-Business Combination entity might need to incur greater expense, accept less favorable terms or both. However, any failure
to obtain adequate directors and officers liability insurance could have an adverse impact on the post-Business Combinations ability
to attract and retain qualified officers and directors.
In addition, even after we
were to complete an initial Business Combination, our directors and officers could still be subject to potential liability from claims
arising from conduct alleged to have occurred prior to the initial Business Combination. As a result, in order to protect our directors
and officers, the post-Business Combination entity may need to purchase additional insurance with respect to any such claims (run-offinsurance).
The need for run-offinsurance would be an added expense for the post-Business Combination entity, and could interfere with or frustrate
our ability to consummate an initial Business Combination on terms favorable to our investors.
**
**
43
**
*Recent increases in inflation in the UnitedStates
and elsewhere could make it more difficult for us to complete our initial Business Combination.*
Recent increases in inflation
in the UnitedStates and elsewhere may lead to increased price volatility for publicly traded securities, including ours, or other
national, regional or international economic disruptions, any of which could make it more difficult for us to complete our initial Business
Combination.
**
*The grant of registration rights to our
Sponsor may make it more difficult to complete our initial Business Combination, and the future exercise of such rights may adversely
affect the market price of our Class A Ordinary Shares.*
Pursuant to a registration
rights agreement entered into concurrently with the issuance and sale of the securities in our IPO, our Sponsor, and its permitted transferees
can demand that we register the resale of the securities they hold or may acquire, including the Class A Ordinary Shares into which Founder
Shares are convertible and the securities included in Private Placement Units (including any Private Placement Units that may be issued
upon conversion of working capital loans), such as the private placement shares included in Private Placement Units, the warrants included
in such Private Placement Units and any Class A Ordinary Shares issuable upon conversion of such warrants. We will bear the cost of registering
these securities. The registration and availability of such a significant number of securities for trading in the public market may have
an adverse effect on the market price of our Class A Ordinary Shares. In addition, the existence of the registration rights may make our
initial Business Combination more costly or difficult to conclude. This is because the shareholders of the target business may increase
the equity stake they seek in the combined entity or ask for more cash consideration to offset the negative impact on the market price
of our securities that is expected when the securities owned by our Sponsor, holders of working capital loans or their permitted transferees
are registered for resale.
Risks Relating to our Sponsor and Management
Team
**
*We are dependent upon our executive officers
and directors and their loss, or a reduction in the amount of time they can dedicate to our initial Business Combination, could adversely
affect our ability to operate.*
Our operations are dependent
upon a relatively small group of individuals and, in particular, our executive officers and directors. We believe that our success depends
on the continued service of our officers and directors, at least until we have completed our initial Business Combination. In addition,
our executive officers and directors are not required to commit any specified amount of time to our affairs and, accordingly, will have
conflicts of interest in allocating their time among various business activities, including identifying potential Business Combinations
and monitoring the related due diligence. In particular, certain of our officers and directors may serve as an officer and/or director
of other blank check companies. We do not have an employment agreement with, or key-maninsurance on the life of, any of our directors
or executive officers. The unexpected loss of the services of one or more of our directors or executive officers could have a detrimental
effect on us.
**
*Our ability to successfully effect our initial
Business Combination and to be successful thereafter will be dependent upon the efforts of our key personnel, some of whom may join us
following our initial Business Combination. The loss of key personnel could negatively impact the operations and profitability of ourpost-combinationbusiness.*
Our ability to successfully
effect our initial Business Combination is dependent upon the efforts of our key personnel. The role of our key personnel in the target
business, however, cannot presently be ascertained. Although some of our key personnel may remain with the target business in senior management,
director or advisory positions following our initial Business Combination, it is likely that some or all of the management of the target
business will remain in place. While we intend to closely scrutinize any individuals we engage after our initial Business Combination,
we cannot assure you that our assessment of these individuals will prove to be correct. These individuals may be unfamiliar with the requirements
of operating a company regulated by the SEC, which could cause us to have to expend time and resources helping them become familiar with
such requirements.
**
44
*Our key personnel may negotiate employment
or consulting agreements with a target business in connection with a particular Business Combination, and a particular Business Combination
may be conditioned on the retention or resignation of such key personnel. These agreements may provide for them to receive compensation
following our initial Business Combination and as a result, may cause them to have conflicts of interest in determining whether a particular
Business Combination is the most advantageous.*
Our key personnel may be able
to remain with our Company after the completion of our initial Business Combination only if they are able to negotiate employment or consulting
agreements in connection with the Business Combination. Such negotiations would take place simultaneously with the negotiation of the
Business Combination and could provide for such individuals to receive compensation in the form of cash payments and/or our securities
for services they would render to us after the completion of the Business Combination. Such negotiations also could make such key personnels
retention or resignation a condition to any such agreement. The personal and financial interests of such individuals may influence their
motivation in identifying and selecting a target business.
**
*The officers and directors of an acquisition
candidate may resign upon completion of our initial Business Combination. The loss of a Business Combination targets key personnel
could negatively impact the operations and profitability of ourpost-combinationbusiness.*
The role of an acquisition
candidates key personnel upon the completion of our initial Business Combination cannot be ascertained at this time. Although we
contemplate that certain members of an acquisition candidates management team will remain associated with the acquisition candidate
following our initial Business Combination, it is possible that members of the management of an acquisition candidate will not wish to
remain in place.
**
*Our executive officers and directors will
allocate their time to other businesses thereby causing conflicts of interest in their determination as to how much time to devote to
our affairs. This conflict of interest could have a negative impact on our ability to complete our initial Business Combination.*
Our executive officers and
directors are not required to, and will not, commit their full time to our affairs, which may result in a conflict of interest in allocating
their time between our operations and our search for a Business Combination and their other businesses. We do not intend to have any full-timeemployees
prior to the completion of our initial Business Combination. Each of our executive officers is engaged in several other business endeavors
for which he may be entitled to substantial compensation, and our executive officers are not obligated to contribute any specific number
ofhours per week to our affairs. In particular, certain of our officers and directors may serve as an officer and/or director of
other blank check company.
Our independent directors
also serve as officers and board members for other entities. If our executive officers and directors other business affairs
require them to devote substantial amounts of time to such affairs in excess of their current commitment levels, it could limit their
ability to devote time to our affairs which may have a negative impact on our ability to complete our initial Business Combination.
**
*Our officers and directors presently have,
and any of them in the future may have additional, fiduciary or contractual obligations to other entities, possibly including other blank
check companies, and, accordingly, may have conflicts of interest in determining to which entity a particular business opportunity should
be presented.*
Until we consummate our initial
Business Combination, we intend to engage in the business of identifying and combining with one or more businesses. Each of our officers
and directors presently has, and any of them in the future may have, additional fiduciary or contractual obligations to other entities
pursuant to which such officer or director is or may be required to present a Business Combination opportunity to such entity. Accordingly,
they may have conflicts of interest in determining to which entity a particular business opportunity should be presented. These conflicts
may not be resolved in our favor and a potential target business may be presented to another entity prior to its presentation to us.
In addition, our directors
and officers may in the future become affiliated with other blank check companies that may have acquisition objectives that are similar
to ours. Accordingly, they may have conflicts of interest in determining to which entity a particular business opportunity should be presented.
These conflicts may not be resolved in our favor and a potential target business may be presented to such other blank check companies
prior to its presentation to us. Our amended and restated memorandum and articles of association provides that we renounce our interest
in any Business Combination opportunity offered to any director or officer unless such opportunity is expressly offered to such person
solely in his or her capacity as a director or officer of the Company and it is an opportunity that we are able to complete on a reasonable
basis. Our Sponsor and its affiliates and our directors and officers are also not prohibited from Sponsoring, or otherwise becoming involved
with, any other blank check companies prior to us completing our initial Business Combination.
**
45
*Certain of our officers and directors have
direct and indirect economic interests in us and/or our Sponsor and such interests may potentially conflict with those of our Public Shareholders
as we evaluate and decide whether to recommend a potential Business Combination to our Public Shareholders.*
Certain of our officers and
directors may own membership interests, limited partnership interests or other equity interests in our Sponsor and indirect interests
in our ClassB ordinary shares and Private Placement Units which may result in interests that differ from the economic interests
of the investors in our IPO, which includes making a determination of whether a particular target business is an appropriate business
with which to effectuate our initial Business Combination. There may be a potential conflict of interest between our officers and directors
that hold interests in our Sponsor and our Public Shareholders that may not be resolved in favor of our Public Shareholders.
**
*Our executive officers, directors, security
holders and their respective affiliates may have competitive pecuniary interests that conflict with our interests.*
We have not adopted a policy
that expressly prohibits our directors, executive officers, security holders or affiliates from having a direct or indirect pecuniary
or financial interest in any investment to be acquired or disposed of by us or in any transaction to which we are a party or have an interest.
In fact, we may enter into a Business Combination with a target business that is affiliated with our Sponsor, our directors or executive
officers. Nor do we have a policy that expressly prohibits any such persons from engaging for their own account in business activities
of the types conducted by us. Accordingly, such persons or entities may have a conflict between their interests and ours.
The personal and financial
interests of our directors and officers may influence their motivation in timely identifying and selecting a target business and completing
a Business Combination. Consequently, our directors and officers discretion in identifying and selecting a suitable target
business may result in a conflict of interest when determining whether the terms, conditions and timing of a particular Business Combination
are appropriate and in our shareholders best interest. If this were the case, it may be a breach of their fiduciary duties to us
as a matter of Cayman Islands law and we or our shareholders might have a claim against such individuals for infringing on our shareholders
rights. However, we might not ultimately be successful in any claim we may make against them for such reason.
**
*We may engage in a Business Combination
with one or more target businesses that have relationships with entities that may be affiliated with our Sponsor, executive officers,
directors or Sponsor which may raise potential conflicts of interest.*
In light of the involvement
of our Sponsor, executive officers and directors with other entities, we may decide to acquire one or more businesses affiliated with
our Sponsor, executive officers, directors or Sponsor. Our directors also serve as officers and board members for other entities. Our
Sponsor and our officers and directors may Sponsor or form other special purpose acquisition companies similar to ours or may pursue other
business or investment ventures during the period in which we are seeking an initial Business Combination. Such entities may compete with
us for Business Combination opportunities. Our Sponsor, officers and directors are not currently aware of any specific opportunities for
us to complete our initial Business Combination with any entities with which they are affiliated, and there have been no substantive discussions
concerning a Business Combination with any such entity or entities. Although we will not be specifically focusing on, or targeting, any
transaction with any affiliated entities, we would pursue such a transaction if we determined that such affiliated entity met our criteria
for a Business Combination as set forth in *Item 1. Business - Introduction - Business Strategy and Target Industries*
and such transaction was approved by a majority of our independent and disinterested directors. Despite our agreement to obtain an opinion
from an independent investment banking firm or an independent valuation or accounting firm regarding the fairness to our Company from
a financial point of view of a Business Combination with one or more domestic or international businesses affiliated with our Sponsor,
executive officers, directors or Sponsor, potential conflicts of interest still may exist and, as a result, the terms of the Business
Combination may not be as advantageous to our Public Shareholders as they would be absent any conflicts of interest.
**
**
46
**
*Our management may not be able to maintain
control of a target business after our initial Business Combination. Upon the loss of control of a target business, new management may
not possess the skills, qualifications or abilities necessary to profitably operate such business.*
We may structure our initial
Business Combination so that the post-Business Combination company in which our Public Shareholders own shares will own less than 100%
of the equity interests or assets of a target business, but we will only complete such Business Combination if the post-Business Combination
company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in
the target business sufficient for us not to be required to register as an investment company under the Investment Company Act. We will
not consider any transaction that does not meet such criteria. Even if the post-Business Combination company owns 50% or more of the voting
securities of the target, our shareholders prior to the completion of our initial Business Combination may collectively own a minority
interest in the post-Business Combination company, depending on valuations ascribed to the target and us in the Business Combination.
For example, we could pursue a transaction in which we issue a substantial number of new Class A Ordinary Shares in exchange for all of
the outstanding capital stock of a target. In this case, we would acquire a 100% interest in the target. However, as a result of the issuance
of a substantial number of new Class A Ordinary Shares, our shareholders immediately prior to such transaction could own less than a majority
of our outstanding Class A Ordinary Shares subsequent to such transaction. In addition, other minority shareholders may subsequently combine
their holdings resulting in a single person or group obtaining a larger share of the Companys shares than we initially acquired.
Accordingly, this may make it more likely that our management will not be able to maintain control of the target business.
**
*Since our Sponsor, officers and directors,
any other holder of our Founder Shares, and the underwriters may lose their entire investment in us (other than with respect to Public
Shares) if our initial Business Combination is not completed and no liquidating distributions from assets outside the Trust Account are
available, a conflict of interest may arise in determining whether a particular Business Combination target is appropriate for our initial
Business Combination.*
On July18, 2025, Safeguard
Acquisition Management LLC, our Sponsor, paid $25,000 to cover certain expenses on our behalf in exchange for the issuance of 7,666,667
Founder Shares, or approximately $0.003 per share. On October 31, 2025, our Sponsor transferred 25,000 Founder Shares to each of our independent
directors (for an aggregate of 100,000 Founder Shares) and 25,000 Founder Shares to our Chief Financial Officer at the same per-shareprice
that our Sponsor purchased such shares, or approximately $0.003 per share, resulting in our Sponsor holding 7,541,667 Founder Shares.
Prior to such initial investment
in the Company of $25,000, the Company had no assets, tangible or intangible. The per share price of the Founder Shares was determined
by dividing the amount so paid by the number of Founder Shares issued in consideration therefor. In addition, our Sponsor purchased 470,000
Private Placement Units, at a price of $10.00 per share ($4,700,000 in the aggregate), in a private placement that closed simultaneously
with the closing of our IPO. Holders of our Founder Shares and private placement shares included in the Private Placement Units have agreed
to waive their right to receive distributions from our Trust Account in connection with a redemption of our Public Shares. Unless there
are liquidating distributions from assets outside the Trust Account, the Founder Shares and Private Placement Units will be worthless
if we do not consummate an initial Business Combination within the Completion Window. The personal and financial interests of our executive
officers and directors may influence their motivation in identifying and selecting a target Business Combination, completing an initial
Business Combination and influencing the operation of the business following the initial Business Combination. This risk may become more
acute as the 24-monthanniversary of the closing of our IPO nears, which is the deadline for our consummation of an initial Business
Combination.
**
*We may not have sufficient funds to satisfy
indemnification claims of our Sponsor, directors and officers.*
We have agreed to indemnify
our Sponsor and our officers and directors to the fullest extent permitted by law. However, our Sponsor and our officers and directors
have agreed to waive any right, title, interest or claim of any kind in or to any monies in the Trust Account and to not seek recourse
against the Trust Account for any reason whatsoever (except to the extent they are entitled to funds from the Trust Account due to their
ownership of Public Shares). Accordingly, any indemnification provided will be able to be satisfied by us only if (i)we have sufficient
funds outside of the Trust Account or (ii)we consummate an initial Business Combination. Our obligation to indemnify our Sponsor
and our officers and directors may discourage shareholders from bringing a lawsuit against our Sponsor and our officers or directors.
These provisions also may have the effect of reducing the likelihood of derivative litigation against our Sponsor and our officers and
directors, even though such an action, if successful, might otherwise benefit us and our shareholders. Furthermore, a shareholders
investment may be adversely affected to the extent we pay the costs of settlement and damage awards against our officers and directors
pursuant to these indemnification provisions.
**
**
47
**
*We may amend the terms of the warrants in
a manner that may be adverse to holders of Public Warrants with the approval by the holders of at least 50% of thethen-outstandingPublic
Warrants. As a result, the exercise price of your warrants could be increased, the exercise period could be shortened and the number of
our Class A Ordinary Shares purchasable upon exercise of a warrant could be decreased, all without your approval.*
Our warrants are issued in
registered form under a warrant agreement between Continental Stock Transfer& Trust Company, as warrant agent, and us. The warrant
agreement provides that the terms of the warrants may be amended without the consent of any holder for the purpose of (i)curing
any ambiguity or correct any mistake, including to conform the provisions of the warrant agreement to the description of the terms of
the warrants and the warrant agreement set forth in the registration statement filed in connection with our IPO, or defective provision,
(ii)amending the provisions relating to cash dividends on ordinary shares as contemplated by and in accordance with the warrant
agreement or (iii)adding or changing any provisions with respect to matters or questions arising under the warrant agreement as
the parties to the warrant agreement may deem necessary or desirable and that the parties deem to not adversely affect the rights of the
registered holders of the warrants, provided that the approval by the holders of at least 50% of the then-outstandingPublic Warrants
is required to make any change that adversely affects the interests of the registered holders of Public Warrants. Accordingly, we may
amend the terms of the Public Warrants in a manner adverse to a holder if holders of at least 50% of the then-outstandingPublic
Warrants approve of such amendment and, solely with respect to any amendment to the terms of the Private Placement Warrants or any provision
of the warrant agreement with respect to the Private Placement Warrants, 50% of the number of the then outstanding Private Placement Warrants
and separately the vote or written consent of the underwriters. Although our ability to amend the terms of the Public Warrants with the
consent of at least 50% of the then-outstandingPublic Warrants is unlimited, examples of such amendments could be amendments to,
among other things, increase the exercise price of the warrants, convert the warrants into cash, shorten the exercise period or decrease
the number of Class A Ordinary Shares purchasable upon exercise of a warrant. Notwithstanding the foregoing, (a)any amendment to
the terms of the Private Placement Warrants shall only require our consent and the holders of a majority of the Private Placement Warrants,
(b)we may lower the exercise price of the warrants or extend the duration of the exercise period of the warrants without the consent
of the registered holders of the warrants, and (c)we may in our sole discretion and at any time allow or require the exercise of
the warrants on a cashless basis without the consent of any registered holders.
**
*We may redeem your unexpired warrants prior
to their exercise at a time that is disadvantageous to you, thereby making your warrants worthless.*
We have the ability to redeem
the outstanding Public Warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant,
provided that the closing price of our Class A Ordinary Shares equals or exceeds $18.00 per share (as adjusted for adjustments to the
number of shares issuable upon exercise or the exercise price of a warrant) for any 20trading days within a 30 trading-dayperiod
ending on the thirdtrading day prior to proper notice of such redemption and provided that certain other conditions are met. If
and when the warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying
securities for sale under all applicable state securities laws. As a result, we may redeem the warrants as set forth above even if the
holders are otherwise unable to exercise the warrants. Redemption of the outstanding warrants could force you to (i)exercise your
warrants and pay the exercise price therefor at a time when it may be disadvantageous for you to do so, (ii)sell your warrants at
the then-currentmarket price when you might otherwise wish to hold your warrants or (iii)accept the nominal redemption price
which, at the time the outstanding warrants are called for redemption, we expect would be substantially less than the market value of
your warrants.
**
*Our managements ability to require
holders of our Public Warrants to exercise such Public Warrants on a cashless basis will cause holders to receive fewer Class A Ordinary
Shares upon their exercise of the Public Warrants than they would have received had they been able to exercise their Public Warrants for
cash.*
If we call our Public Warrants
for redemption after the redemption criteria have been satisfied, our management will have the option to require any holder that wishes
to exercise its Public Warrants to do so on a cashless basis. If our management chooses to require holders to exercise their Public Warrants
on a cashless basis, the number of Class A Ordinary Shares received by a holder upon exercise will be fewer than it would have been had
such holder exercised their Public Warrants for cash. This will have the effect of reducing the potential upside of the
holders investment in us.
**
**
48
**
*Our warrants may have an adverse effect
on the market price of our Class A Ordinary Shares and make it more difficult to effectuate our initial Business Combination.*
We issued warrants to purchase
up to 11,500,000 Class A Ordinary Shares in connection with our IPO and, simultaneously with the closing of the IPO, we issued in a private
placement an aggregate of 700,000 Private Placement Units, at $11.50 per share. In addition, if the Sponsor, its affiliates or a member
of our management team makes any working capital loans to us, up to $1,500,000 of such loans may be convertible into Private Placement
Units of the post Business Combination entity at a price of $10.00 per unit at the option of the lender. The Private Placement Units issued
upon conversion of any such loans would be identical to the Private Placement Units sold in a private placement concurrently with our
IPO and each such private placement unit would include one-halfof a Private Placement Warrant.
To the extent we issue ordinary
shares for any reason, including to effectuate a Business Combination, the potential for the issuance of a substantial number of additional
Class A Ordinary Shares upon exercise of these warrants could make us a less attractive acquisition vehicle to a target business. Such
warrants, when exercised, will increase the number of issued and outstanding Class A Ordinary Shares and reduce the value of the Class
A Ordinary Shares issued to complete the business transaction. Therefore, our warrants may make it more difficult to effectuate a business
transaction or increase the cost of acquiring the target business.
**
*Because each Unit containsone-half**of
one redeemable warrant and only a whole warrant may be exercised, the Unit may be worth less than units of other blank check companies.*
Each Unit contains one-halfof
one redeemable warrant. Pursuant to the warrant agreement, no fractional warrants will be issued upon separation of the units, and only
whole units will trade. If, upon exercise of the warrants, a holder would be entitled to receive a fractional interest in a share, we
will, upon exercise, round down to the nearest whole number the number of Class A Ordinary Shares to be issued to the warrant holder.
This is different from other companies whose units include one ordinary share and one whole warrant to purchase one whole share. We have
established the components of the Units in this way in order to reduce the dilutive effect of the warrants upon completion of a Business
Combination since the warrants will be exercisable in the aggregate for one-halfof the number of shares compared to units that each
contain a whole warrant to purchase one whole share, thus making us, we believe, a more attractive merger partner for target businesses.
Nevertheless, this unit structure may cause our
Units to be worth less than if a unit included a warrant to purchase one whole share.
**
*A provision of our warrant agreement may
make it more difficult for us to consummate an initial Business Combination.*
Unlike most blank check companies,
if (i) we issue additional ordinary shares or equity-linked securities for capital raising purposes in connection with the closing of
our initial Business Combination at a Newly Issued Price of less than $9.20 per Class A Ordinary Share, (ii) the aggregate gross proceeds
from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of our initial
Business Combination (net of redemptions), and (iii) the volume weighted average trading price of the Ordinary Shares during the
20 trading day period starting on the trading day prior to the day on which the Company consummates the Business Combination (such price,
the Market Value) of our Class A Ordinary Shares is below $9.20 per share, then the exercise price of the warrants will
be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price, and the $18.00 per
share redemption trigger prices will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly
Issued Price. This may make it more difficult for us to consummate an initial Business Combination with a target business.
**
*The warrants may become exercisable and
redeemable for a security other than the Class A Ordinary Shares, and you will not have any information regarding such other security
at this time.*
In certain situations, including
if we are not the surviving entity in our initial Business Combination, the warrants may become exercisable for a security other than
the Class A Ordinary Shares. As a result, if the surviving company redeems your warrants for securities pursuant to the warrant agreement,
you may receive a security in a company of which you do not have information at this time. Pursuant to the warrant agreement, the surviving
company will be required to use commercially reasonable efforts to register the issuance of the security underlying the warrants within
twentybusiness days of the closing of an initial Business Combination.
**
**
49
**
*You will not be permitted to exercise your
warrants unless we register and qualify the underlying Class A Ordinary Shares or certain exemptions are available.*
If the issuance of the Class
A Ordinary Shares upon exercise of the warrants is not registered, qualified or exempt from registration or qualification under the Securities
Act and applicable state securities laws, holders of warrants will not be entitled to exercise such warrants and such warrants may have
no value and expire worthless. In such event, holders who acquired their warrants as part of a purchase of units will have paid the full
unit purchase price solely for the Class A Ordinary Shares included in the units.
We registered the Class A
Ordinary Shares issuable upon exercise of the warrants in the registration statement for our IPO because the warrants will become exercisable
30days after the completion of our initial Business Combination, which may be within one year of the IPO. However, because the warrants
will be exercisable until their expiration date of up to fiveyears after the completion of our initial Business Combination, in
order to comply with the requirements of Section10(a)(3)of the Securities Act following the consummation of our initial Business
Combination, we have agreed that as soon as practicable, but in no event later than twentybusiness days after the closing of our
initial Business Combination, we will use our commercially reasonable efforts to file with the SEC a registration statement on FormS-1,
FormS-3, FormF-1or FormF-3, as applicable, covering the Class A Ordinary Shares issuable upon exercise of the
warrants, and we will use our commercially reasonable efforts to cause the same to become effective within 60business days after
the closing of our initial Business Combination, and to maintain the effectiveness of such registration statement and a current prospectus
relating to those Class A Ordinary Shares until the warrants expire or are redeemed, as specified in the warrant agreement provided that
if our Class A Ordinary Shares are at the time of any exercise of a warrant not listed on a national securities exchange such that they
satisfy the definition of a covered security under Section18(b)(1)of the Securities Act, we may, at our option,
require holders of Public Warrants who exercise their warrants to do so on a cashless basis in accordance with Section3(a)(9)of
the Securities Act and, in the event we so elect, we will not be required to file or maintain in effect a registration statement. If a
registration statement on FormS-1, FormS-3, FormF-1or FormF-3, as applicable, covering the Class A Ordinary
Shares issuable upon exercise of the warrants is not effective by the 60thday after
the closing of the initial Business Combination, warrant holders may, until such time as such a registration statement on FormS-1,
FormS-3, FormF-1or FormF-3, as applicable, is effective and during any period when we will have failed to maintain
such an effective registration statement, exercise warrants on a cashless basis in accordance with Section3(a)(9)of
the Securities Act or another exemption, but we will use our commercially reasonable efforts to register or qualify the shares under applicable
blue sky laws to the extent an exemption is not available. We cannot assure you that we will be able to do so if, for example, any facts
or events arise which represent a fundamental change in the information set forth in the registration statement or prospectus, the financial
statements contained or incorporated by reference therein are not current or correct or the SEC issues a stop order.
If the Class A Ordinary Shares
issuable upon exercise of the warrants are not registered under the Securities Act, under the terms of the warrant agreement, holders
of warrants who seek to exercise their warrants will not be permitted to do so for cash and, instead, will be required to do so on a cashless
basis in accordance with Section3(a)(9)of the Securities Act or another exemption.
In no event will warrants
be exercisable for cash or on a cashless basis, and we will not be obligated to issue any shares to holders seeking to exercise their
warrants, unless the issuance of the shares upon such exercise is registered or qualified under the securities laws of the state of the
exercising holder, or an exemption from registration or qualification is available.
In no event will we be required
to net cash settle any warrant. In the event that a registration statement on FormS-1, FormS-3, FormF-1or FormF-3,
as applicable, is not effective for the exercised warrants, the purchaser of a unit containing such warrant will have paid the full purchase
price for the unit solely for the ClassA ordinary share underlying such unit.
**
**
50
**
*Members of our management team and board
of directors have significant experience as founders, board members, officers, executives or employees of other companies. Certain of
those persons are now, have been, may be, or may become, involved in litigation, investigations or other proceedings, including related
to those companies or otherwise. The defense or prosecution of these matters could betime-consumingand could divert our managements
attention, and may have an adverse effect on us, which may impede our ability to consummate an initial Business Combination.*
During the course of their
careers, members of our management team and board of directors have had significant experience as founders, board members, officers, executives
or employees of other companies. As a result of their involvement and positions in these companies, certain of those persons are now,
have been, may be or may in the future become involved in litigation, investigations or other proceedings, including relating to the business
affairs of such companies, transactions entered into by such companies, or otherwise. Individual members of our management team and board
of directors also may become involved in litigation, investigations or other proceedings involving claims or allegations related to or
as a result of their personal conduct, either in their capacity as a corporate officer or director or otherwise, and may be personally
named in such actions and potentially subject to personal liability. Any such liability may or may not be covered by insurance and/or
indemnification, depending on the facts and circumstances. The defense or prosecution of these matters could be time-consuming. Any litigation,
investigations or other proceedings and the potential outcomes of such actions may divert the attention and resources of our management
team and board of directors away from identifying and selecting a target business or businesses for our initial Business Combination and
may negatively affect our reputation, which may impede our ability to complete an initial Business Combination.
**
*Members of our management team and affiliated
companies may have been, and may in the future be, involved in civil disputes or governmental investigations unrelated to our business.*
Members of our management
team have been (and intend to be) involved in a wide variety of businesses. Such involvement has, and may lead to, media coverage and
public awareness. As a result, members of our management team and affiliated companies may have been, and may in the future be, involved
in civil disputes or governmental investigations unrelated to our business. Any claims or investigations, in which our management team
and affiliated companies may become involved, may be detrimental to our reputation and could negatively affect our ability to identify
and complete an initial Business Combination and may have an adverse effect on the price of our securities.
**
*Our letter agreement with our Sponsor, officers
and directors may be amended without shareholder approval.*
Our letter agreement with
our Sponsor, officers and directors contains provisions relating to transfer restrictions of our Founder Shares and Private Placement
Units, indemnification of the Trust Account, waiver of redemption rights and participation in liquidating distributions from the Trust
Account. The letter agreement may be amended without shareholder approval with our written consent as well as the written consent of the
Sponsor and our directors and officers to the extent they are the subject of any change, amendment, modification or waiver to the letter
agreement. The written consent of Jefferies LLC, as representative of the underwriters, will also be required for an amendment of a provision
of the letter agreement that subjects the Sponsor and our directors and officers to certain of the restrictions included in the underwriting
agreement and pursuant to which the Sponsor and our officers and directors agree that, subject to certain limited exceptions described
in the letter agreement and certain other exceptions described in the underwriting agreement, for a period of 180days from the date
of the IPO, they will not, without the prior written consent of Jefferies LLC, as representative of the underwriters, offer, sell, contract
to sell, pledge or otherwise dispose of, directly or indirectly, units, warrants, Class A Ordinary Shares or any other securities convertible
into, or exercisable, or exchangeable for, Class A Ordinary Shares. While we do not expect our board to approve any amendment to the letter
agreement prior to our initial Business Combination, it may be possible that our board, in exercising its business judgment and subject
to its fiduciary duties, chooses to approve one or more amendments to the letter agreement. Any such amendments to the letter agreement
would not require approval from our shareholders and may have an adverse effect on the value of an investment in our securities.
Risks Associated with Acquiring and Operating
a Business in Foreign Countries
**
*If we pursue a target company with operations
or opportunities outside of the UnitedStates for our initial Business Combination, we may face additional burdens in connection
with investigating, agreeing to and completing such initial Business Combination, and if we effect such initial Business Combination,
we would be subject to a variety of additional risks that may negatively impact our operations.*
If we pursue a target a company
with operations or opportunities outside of the UnitedStates for our initial Business Combination, we would be subject to risks
associated with cross-borderBusiness Combinations, including in connection with investigating, agreeing to and completing our initial
Business Combination, conducting due diligence in a foreign jurisdiction, having such transaction approved by any local governments, regulators
or agencies and changes in the purchase price based on fluctuations in foreign exchange rates.
51
If we effect our initial Business
Combination with such a company, we would be subject to any special considerations or risks associated with companies operating in an
international setting, including any of the following:
|
| costs and difficulties inherent in managing cross-borderbusiness
operations; |
|
|
| rules and regulations regarding currency redemption; |
|
|
| complex corporate withholding taxes on individuals; |
|
|
| laws governing the manner in which future Business Combinations
may be effected; |
|
|
| exchange listing and/or delisting requirements; |
|
|
| tariffs and trade barriers; |
|
|
| regulations related to customs and import/export matters; |
|
|
| local or regional economic policies and market conditions; |
|
|
| unexpected changes in regulatory requirements; |
|
|
| longer payment cycles; |
|
|
| tax issues, such as tax law changes and variations in tax laws
as compared to the UnitedStates; |
|
|
| currency fluctuations and exchange controls; |
|
|
| rates of inflation; |
|
|
| challenges in collecting accounts receivable; |
|
|
| cultural and language differences; |
|
|
| employment regulations; |
|
|
| underdeveloped or unpredictable legal or regulatory systems; |
|
|
| corruption; |
|
|
| protection of intellectual property; |
|
|
| social unrest, crime, strikes, riots and civil disturbances; |
|
|
| regime changes and political upheaval; |
|
|
| terrorist attacks, natural disasters, widespread health emergencies
and wars; and |
|
|
| deterioration of political relations with the UnitedStates. |
|
We may not be able to adequately
address these additional risks. If we were unable to do so, we may be unable to complete such initial Business Combination, or, if we
complete such combination, our operations might suffer, either of which may adversely impact our business, financial condition and results
of operations.
**
*If we acquire anon-U.S.target,
our results of operations may be negatively impacted because of the costs and difficulties inherent in managingcross-borderbusiness
operations.*
We may pursue a target company
with operations or opportunities outside of the UnitedStates for our initial Business Combination. Managing a business, operations,
personnel or assets in another country is challenging and costly. Any management that we may have (whether based abroad or in the U.S.)
may be inexperienced in cross-borderbusiness practices and unaware of significant differences in accounting rules, legal regimes
and labor practices. Even with a seasoned and experienced management team, the costs and difficulties inherent in managing cross-borderbusiness
operations, personnel and assets can be significant (and much higher than in a purely domestic business) and may negatively impact our
financial and operational performance.
**
**
52
**
*If social unrest, acts of terrorism, regime
changes, changes in laws and regulations, political upheaval or policy changes or enactments occur in a country in which we may operate
after we effect our initial Business Combination, it may result in a negative impact on our business.*
In the event we acquire a
non-U.S.target, political events in another country may significantly affect our business, assets or operations. Social unrest,
acts of terrorism, regime changes, changes in laws and regulations, political upheaval, and policy changes or enactments could negatively
impact our business in a particular country.
**
*If our management following our initial
Business Combination is unfamiliar with UnitedStates securities laws, they may have to expend time and resources becoming familiar
with such laws, which could lead to various regulatory issues.*
Following our initial Business
Combination, our management may resign from their positions as officers or directors of the Company and the management of the target business
at the time of the Business Combination will remain in place. Management of the target business may not be familiar with UnitedStates
securities laws. If new management is unfamiliar with UnitedStates securities laws, they may have to expend time and resources becoming
familiar with such laws. This could be expensive and time-consumingand could lead to various regulatory issues which may adversely
affect our operations.
**
*After our initial Business Combination,
substantially all of our assets may be located in a foreign country and substantially all of our revenue may be derived from our operations
in any such country. Accordingly, our results of operations and prospects will be subject, to a significant extent, to the economic, political
and social conditions and government policies, developments and conditions in the country in which we operate.*
The economic, political and
social conditions, as well as government policies, of the country in which our operations are located could affect our business. Economic
growth could be uneven, both geographically and among various sectors of the economy and such growth may not be sustained in the future.
If in the future such countrys economy experiences a downturn or grows at a slower rate than expected, there may be less demand
for spending in certain industries. A decrease in demand for spending in certain industries could materially and adversely affect our
ability to find an attractive target business with which to consummate our initial Business Combination and if we effect our initial Business
Combination, the ability of that target business to become profitable.
**
*Exchange rate fluctuations and currency
policies may cause a target business ability to succeed in the international markets to be diminished.*
In the event we acquire a
non-U.S.target, all revenues and income would likely be received in a foreign currency, and the dollar equivalent of our net assets
and distributions, if any, could be adversely affected by reductions in the value of the local currency. The value of the currencies in
our target regions fluctuate and are affected by, among other things, changes in political and economic conditions. Any change in the
relative value of such currency against our reporting currency may affect the attractiveness of any target business or, following consummation
of our initial Business Combination, our financial condition and results of operations. Additionally, if a currency appreciates in value
against the dollar prior to the consummation of our initial Business Combination, the cost of a target business as measured in dollars
will increase, which may make it less likely that we are able to consummate such transaction.
**
*We may reincorporate in or transfer by way
of continuation to another jurisdiction in connection with our initial Business Combination, and the laws of such jurisdiction may govern
some or all of our future material agreements and we may not be able to enforce our legal rights.*
In connection with our initial
Business Combination and subject to requisite shareholder approval under the Companies Act, we may relocate the home jurisdiction of our
business from the Cayman Islands to another jurisdiction. If we determine to do this, the laws of such jurisdiction may govern some or
all of our future material agreements. The system of laws and the enforcement of existing laws in such jurisdiction may not be as certain
in implementation and interpretation as in the UnitedStates. The inability to enforce or obtain a remedy under any of our future
agreements could result in a significant loss of business, business opportunities or capital.
**
*Many countries have difficult and unpredictable
legal systems and underdeveloped laws and regulations that are unclear and subject to corruption and inexperience, which may adversely
impact our results of operations and financial condition.*
In the event we acquire a
non-U.S.target, our ability to seek and enforce legal protections, including with respect to intellectual property and other property
rights, or to defend ourselves with regard to legal actions taken against us in a given country, may be difficult or impossible, which
could adversely impact our operations, assets or financial condition.
53
Rules and regulations in many
countries are often ambiguous or open to differing interpretation by responsible individuals and agencies at the municipal, state, regional
and federal levels. The attitudes and actions of such individuals and agencies are often difficult to predict and inconsistent.
Delay with respect to the
enforcement of particular rules and regulations, including those relating to customs, tax, environmental and labor, could cause serious
disruption to operations abroad and negatively impact our results.
General Risk Factors
**
*We are a newly incorporated company with
no operating history and no revenues, and you have no basis on which to evaluate our ability to achieve our business objective.*
We are a newly incorporated
company established in the Cayman Islands with no operating results. Because we lack an operating history, you have no basis upon which
to evaluate our ability to achieve our business objective of completing our initial Business Combination with one or more target businesses.
We have no plans, arrangements or understandings with any prospective target business concerning a Business Combination and may be unable
to complete our Business Combination. If we fail to complete our Business Combination, we will never generate any operating revenues.
**
*Past experience or performance by our management
team or their affiliates may not be indicative of future performance of an investment in us.*
Information regarding performance
by, or businesses associated with, our management team or their affiliates is presented for informational purposes only. Any past experience
of and performance by our management team or their affiliates is not a guarantee either: (1)that we will be able to successfully
identify a suitable candidate for our initial Business Combination; or (2)of any results with respect to any Business Combination
we may consummate. You should not rely on the historical record of our management team or their affiliates or any of their affiliates
performance as indicative of the future performance of an investment in us or the returns we will, or are likely to, generate going forward.
**
*Cyber incidents or attacks directed at us
could result in information theft, data corruption, operational disruption and/or financial loss.*
We depend on digital technologies,
including information systems, infrastructure and cloud applications and services, including those of third parties with which we may
deal. Sophisticated and deliberate attacks on, or security breaches in, our systems or infrastructure, or the systems or infrastructure
of third parties or the cloud, could lead to corruption or misappropriation of our assets, proprietary information and sensitive or confidential
data. As an early stage company without significant investments in data security protection, we may not be sufficiently protected against
such occurrences. We may not have sufficient resources to adequately protect against, or to investigate and remediate any vulnerability
to, cyber incidents. It is possible that any of these occurrences, or a combination of them, could have adverse consequences on our business
and lead to financial loss.
**
*Changes in laws or regulations, or a failure
to comply with any laws and regulations, may adversely affect our business, including our ability to negotiate and complete our initial
Business Combination, and results of operations.*
We are subject to laws and
regulations enacted by national, regional and local governments. In particular, we will be required to comply with certain SEC and other
legal requirements. Compliance with, and monitoring of, applicable laws and regulations may be difficult, time consuming and costly. Those
laws and regulations and their interpretation and application may also change from time to time and those changes could have a material
adverse effect on our business, investments and results of operations. In addition, a failure to comply with applicable laws or regulations,
as interpreted and applied, could have a material adverse effect on our business, including our ability to negotiate and complete our
initial Business Combination, and results of operations.
**
**
54
**
*We are an emerging growth company and a
smaller reporting company within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure requirements
available to emerging growth companies or smaller reporting companies, this could make our securities less
attractive to investors and may make it more difficult to compare our performance with other public companies.*
We are an emerging
growth company within the meaning of the Securities Act, as modified by the JOBS Act, and we may take advantage of certain exemptions
from various reporting requirements that are applicable to other public companies that are not emerging growth companies
including, but not limited to, not being required to comply with the auditor attestation requirements of Section404 of the Sarbanes-OxleyAct,
reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the
requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments
not previously approved. As a result, our shareholders may not have access to certain information they may deem important. We could be
an emerging growth company for up to fiveyears, although circumstances could cause us to lose that status earlier, including if
the market value of our Class A Ordinary Shares held by non-affiliatesexceeds $700million as of any June30 before that
time, in which case we would no longer be an emerging growth company as of the following December31. We cannot predict whether investors
will find our securities less attractive because we will rely on these exemptions. If some investors find our securities less attractive
as a result of our reliance on these exemptions, the trading prices of our securities may be lower than they otherwise would be, there
may be a less active trading market for our securities and the trading prices of our securities may be more volatile.
Further, Section102(b)(1)of
the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until
private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class
of securities registered under the ExchangeAct) are required to comply with the new or revised financial accounting standards. The
JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to
non-emerginggrowth companies but any such an election to opt out is irrevocable. We have elected not to opt out of such extended
transition period which means that when a standard is issued or revised and it has different application dates for public or private companies,
we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard.
This may make comparison of our financial statements with another public company which is neither an emerging growth company nor an emerging
growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences
in accounting standards used.
Additionally, we are a smaller
reporting company as defined in Item10(f)(1)of RegulationS-K.Smaller reporting companies may take advantage
of certain reduced disclosure obligations, including, among other things, providing only twoyears of audited financial statements.
We will remain a smaller reporting company until the lastday of the fiscal year in which (1)the market value of our ordinary
shares held by non-affiliatesequals or exceeds $250million as of the prior June30, and (2)our annual revenues
equaled or exceeded $100million during such completed fiscal year or the market value of our ordinary shares held by non-affiliatesequals
or exceeds $700million as of the prior June30. To the extent we take advantage of such reduced disclosure obligations, it
may also make comparison of our financial statements with other public companies difficult or impossible.
If we no longer qualify as
an emerging growth company, we may still be subject to reduced reporting requirements so long as we qualify as a smaller reporting company.
**
*Our warrant agreement designates the courts
of the State of NewYork or the UnitedStates District Court for the Southern District of NewYork as the sole and exclusive
forum for certain types of actions and proceedings that may be initiated by holders of our warrants, which could limit the ability of
warrant holders to obtain a favorable judicial forum for disputes with our Company.*
Our warrant agreement provides
that, subject to applicable law, (i)any action, proceeding or claim against us arising out of or relating in any way to the warrant
agreement, including under the Securities Act, will be brought and enforced in the courts of the State of NewYork or the UnitedStates
District Court for the Southern District of NewYork, and (ii)that we irrevocably submit to such jurisdiction, which jurisdiction
shall be the exclusive forum for any such action, proceeding or claim. We will waive any objection to such exclusive jurisdiction and
that such courts represent an inconvenient forum.
55
Notwithstanding the foregoing,
these provisions of the warrant agreement will not apply to suits brought to enforce any liability or duty created by the ExchangeAct
or any other claim for which the federal district courts of the UnitedStates of America are the sole and exclusive forum. Any person
or entity purchasing or otherwise acquiring any interest in any of our warrants shall be deemed to have notice of and to have consented
to the forum provisions in our warrant agreement. If any action, the subject matter of which is within the scope the forum provisions
of the warrant agreement, is filed in a court other than a court of the State of NewYork or the UnitedStates District Court
for the Southern District of NewYork (a foreign action) in the name of any holder of our warrants, such holder shall
be deemed to have consented to: (x)the personal jurisdiction of the state and federal courts located in the State of NewYork
in connection with any action brought in any such court to enforce the forum provisions (an enforcement action), and (y)having
service of process made upon such warrant holder in any such enforcement action by service upon such warrant holders counsel in
the foreign action as agent for such warrant holder.
This choice-of-forumprovision
may limit a warrant holders ability to bring a claim in a judicial forum that it finds favorable for disputes with our Company,
which may discourage such lawsuits. Alternatively, if a court were to find this provision of our warrant agreement inapplicable or unenforceable
with respect to one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving
such matters in other jurisdictions, which could materially and adversely affect our business, financial condition and results of operations
and result in a diversion of the time and resources of our management and board of directors.
**
*Because we are incorporated under the laws
of the Cayman Islands, you may face difficulties in protecting your interests, and your ability to protect your rights through the U.S.federal
courts may be limited.*
We are an exempted company
incorporated under the laws of the Cayman Islands. As a result, it may be difficult for investors to effect service of process within
the UnitedStates upon our directors or executive officers, or enforce judgments obtained in the UnitedStates courts against
our directors or officers.
Our corporate affairs and
the rights of shareholders are governed by our amended and restated memorandum and articles of association, the Companies Act (as the
same may be supplemented or amended from time to time) and the common law of the Cayman Islands. We will also be subject to the federal
securities laws of the UnitedStates. The rights of shareholders to take action against the directors, actions by minority shareholders
and the fiduciary responsibilities of our directors to us under Cayman Islands law are to a large extent governed by the common law of
the Cayman Islands. The common law of the Cayman Islands is derived in part from comparatively limited judicial precedent in the Cayman
Islands as well as from English common law, the decisions of whose courts are of persuasive authority, but are not binding on a court
in the Cayman Islands. The rights of our shareholders and the fiduciary responsibilities of our directors under Cayman Islands law are
different from what they would be under statutes or judicial precedent in some jurisdictions in the UnitedStates. In particular,
the Cayman Islands has a different body of securities laws as compared to the UnitedStates, and certain states, such as Delaware,
may have more fully developed and judicially interpreted bodies of corporate law. In addition, Cayman Islands companies may not have standing
to initiate a shareholders derivative action in a Federal court of the UnitedStates.
Shareholders of Cayman Islands
exempted companies like the Company have no general rights under Cayman Islands law to inspect corporate records or to obtain copies of
the register of members of these companies. Our directors have discretion under our amended and restated memorandum and articles of association
to determine whether or not, and under what conditions, our corporate records may be inspected by our shareholders, but are not obliged
to make them available to our shareholders. This may make it more difficult for you to obtain the information needed to establish any
facts necessary for a shareholder motion or to solicit proxies from other shareholders in connection with a proxy contest.
We have been advised by our
Cayman Islands legal counsel that the courts of the Cayman Islands are unlikely (i)to recognize or enforce against us judgments
of courts of the UnitedStates predicated upon the civil liability provisions of the federal securities laws of the UnitedStates
or any state; and (ii)in original actions brought in the Cayman Islands, to impose liabilities against us predicated upon the civil
liability provisions of the federal securities laws of the UnitedStates or any state, so far as the liabilities imposed by those
provisions are penal in nature. In those circumstances, although there is no statutory enforcement in the Cayman Islands of judgments
obtained in the UnitedStates, the courts of the Cayman Islands will recognize and enforce a foreign money judgment of a foreign
court of competent jurisdiction without retrial on the merits based on the principle that a judgment of a competent foreign court imposes
upon the judgment debtor an obligation to pay the sum for which judgment has been given*provided*certain conditions are
met. For a foreign judgment to be enforced in the Cayman Islands, such judgment must be final and conclusive and for a liquidated sum,
and must not be in respect of taxes or a fine or penalty, inconsistent with a Cayman Islands judgment in respect of the same matter, impeachable
on the grounds of fraud or obtained in a manner, or be of a kind the enforcement of which is, contrary to natural justice or the public
policy of the Cayman Islands (awards of punitive or multiple damages may well be held to be contrary to public policy). A Cayman Islands
Court may stay enforcement proceedings if concurrent proceedings are being brought elsewhere.
56
As a result of all of the
above, Public Shareholders may have more difficulty in protecting their interests in the face of actions taken by management, members
of the board of directors or controlling shareholders than they would as Public Shareholders of a UnitedStates company.
**
*Since only holders of our Founder Shares
will have the right to vote on the appointment of directors prior to our initial Business Combination, the NYSE may consider us to be
a controlled company within the meaning of NYSEs rules and, as a result, we may qualify for exemptions from certain
corporate governance requirements.*
Prior to the consummation of
a Business Combination, only holders of our Founder Shares have the right to vote on the appointment of directors. As a result, the NYSE
may consider us to be a controlled company within the meaning of the NYSEs corporate governance standards. Under
the NYSEs corporate governance standards, a company of which more than 50% of the voting power for the appointment of directors
is held by an individual, group or another company is a controlled company and may elect not to comply with certain corporate
governance requirements, including the requirements that:
|
| we have a board that includes a majority of independent
directors, as defined under the rules of the NYSE; |
|
|
| we have a compensation committee of our board that is comprised
entirely of independent directors with a written charter addressing the committees purpose and responsibilities; and |
|
|
| we currently do not intend to rely on the controlled
company exemption, but may do so in the future. Accordingly, if we choose to do so, you will not have the same protections afforded
to shareholders of companies that are subject to all of the NYSEs corporate governance requirements. |
|
**
*We may be a passive foreign investment company,
which could result in adverse U.S.federal income tax consequences to U.S.investors.*
If we are a passive foreign
investment company (PFIC) for any taxable year (or portion thereof) that is included in the holding period of a U.S.Holder
(as defined in the section of the IPO registration statement captioned *TaxationU.S.Federal Income Tax
ConsiderationsGeneral*) of our Class A Ordinary Shares or warrants, the U.S.Holder may be subject to
adverse U.S.federal income tax consequences and may be subject to additional reporting requirements. Our PFIC status for our current
and subsequent taxableyears may depend on whether we qualify for the PFIC start-upexception (see the section of the IPO registration
statement captioned *TaxationU.S.Federal Income Tax ConsiderationsU.S.HoldersPassive
Foreign Investment Company Rules*). Depending on the particular circumstances, the application of the start-upexception
may be subject to uncertainty, and there cannot be any assurance that we will qualify for the start-upexception. Our actual PFIC
status for any taxable year, however, will not be determinable until after the end of such taxable year (and, in the case of the start-upexception,
potentially not until after the two taxableyears following our current taxable year). Accordingly, there can be no assurances with
respect to our status as a PFIC for our current taxable year or any subsequent taxable year. Moreover, if we determine we are a PFIC for
any taxable year, upon written request, we will endeavor to provide to a U.S.Holder such information as the Internal Revenue Service
(IRS) may require, including a PFIC Annual Information Statement, in order to enable the U.S.Holder to make and maintain
a qualified electing fund election, but there can be no assurance that we will timely provide such required information,
and under current law such election would be unavailable with respect to our warrants in all cases. We urge U.S.investors to consult
their tax advisors regarding the possible application of the PFIC rules in general, and in particular to our warrants. For a more detailed
discussion of the tax consequences of PFIC classification to U.S.Holders, see the section of the IPO registration statement captioned
*TaxationU.S.Federal Income Tax ConsiderationsU.S.HoldersPassive
Foreign Investment Company*Rules.
**
**
57
**
*The Excise Tax could be imposed on redemptions
of our ordinary shares if we were to become a covered corporation in the future.*
The Inflation Reduction Actof2022,
among other things, generally imposes the Excise Tax on certain repurchases of stock by covered corporations (which include
publicly traded domestic (i.e., U.S.) corporations and certain domestic subsidiaries of publicly traded foreign (i.e., non-U.S.) corporations)
occurring on or after January1, 2023. The Excise Tax is imposed on the repurchasing corporation itself, not its stockholders from
which the stock is repurchased. The amount of the Excise Tax is generally 1% of the fair market value of the shares repurchased at the
time of the repurchase. However, for purposes of calculating the Excise Tax, repurchasing corporations are permitted to net the fair market
value of certain new stock issuances against the fair market value of stock repurchases during the same taxable year (the netting
rule). In addition, certain exceptions apply to the Excise Tax. The U.S.Department of the Treasury (the Treasury)
has authority to provide regulations and other guidance to carry out, and prevent the abuse or avoidance of, the Excise Tax. On April9,
2024, the Treasury issued proposed regulations on which taxpayers may rely until final Treasury regulations addressing the Excise Tax
are published, which generally adopt (but in some respects expand or modify) the rules and guidance set forth in IRS Notice2023-2,
published on January17, 2023, providing initial guidance regarding the application of the Excise Tax. On June28, 2024, the
Treasury finalized certain of the proposed regulations (those relating to procedures for reporting and paying the Excise Tax). Although
IRS Notice2023-2and proposed Treasury regulations clarify certain aspects of the Excise Tax, the interpretation and operation
of certain other aspects of the Excise Tax remain unclear. There can be no assurance that final Treasury regulations will not adversely
affect the accuracy of the below description of the Excise Tax considerations that may be applicable to us if we were to become a covered
corporation in the future.
We are currently not a covered
corporation for purposes of the Excise Tax. Accordingly, we generally would not be subject to the Excise Tax on a redemption of
our stock, whether in connection with the consummation of our initial Business Combination or otherwise. If we were to become a covered
corporation in the future, whether in connection with the consummation of our initial Business Combination with a U.S.company
(including if we were to redomicile as a U.S.corporation in connection therewith) or otherwise, whether and to what extent we would
be subject to the Excise Tax on a redemption of our stock would depend on a number of factors, including (i)whether the redemption
is treated as a repurchase of stock for purposes of the Excise Tax, (ii)the fair market value of the redemption treated as a repurchase
of stock, (iii)the structure of our initial Business Combination, (iv)the nature and amount of any PIPE or other
equity issuances (whether in connection with our initial Business Combination or otherwise) issued within the same taxable year of a redemption
treated as a repurchase of stock and (v)the content of forthcoming regulations and other guidance from the Treasury. As noted above,
the Excise Tax would be payable by the repurchasing corporation, and not by the redeeming holder. The imposition of the Excise Tax on
us as a result of redemptions by us could, however, reduce the amount of cash available to the target business in connection with our
initial Business Combination, which could cause investors in our securities who do not redeem or the other shareholders of the combined
company to economically bear the impact of such Excise Tax. However, we will not use the proceeds placed in the Trust Account, or the
interest earned on the proceeds placed in the Trust Account, to pay for possible Excise Tax or any other fees or taxes that may be levied
on us on any redemptions or stock buybacks by us pursuant to any current, pending or further rules or laws, including without limitation
any Excise Tax, prior to release of such funds from the Trust Account following our initial Business Combination.
**
*An investment in our securities may result
in uncertain U.S.federal income tax consequences.*
An investment in our securities
may result in uncertain U.S.federal income tax consequences. For example, if we are determined to be a personal holding company
for U.S.federal income tax purposes, our taxable income, subject to certain adjustments, would be subjected to an additional 20%
federal income tax. Additionally, it is unclear whether the redemption rights with respect to our Class A Ordinary Shares suspend the
running of a U.S.Holders holding period for purposes of determining whether (i)any gain or loss realized by such holder
on the sale or exchange of Class A Ordinary Shares is long-termcapital gain or loss, (ii)any dividend we pay would be considered
qualified dividend income for U.S.federal income tax purposes, and (iii)any dividend we pay would be eligible
for the corporate dividends-receiveddeduction. Furthermore, because there are no authorities that directly address instruments similar
to our Units, the allocation an investor makes with respect to the purchase price of a Unit between the ClassA ordinary share and
the one-halfof a warrant to purchase one ClassA ordinary share included in each Unit could be challenged by the IRS or courts.
Finally, the U.S.federal income tax consequences of a cashless exercise of warrants included in the Units is unclear under current
law. See the section titled *TaxationU.S.Federal Income Tax Considerations* in the IPO registration
statement for a summary of the U.S.federal income tax considerations of an investment in our securities. Prospective investors are
urged to consult their tax advisors with respect to these and other tax consequences when acquiring, owning or disposing of our securities.
**
**
58
**
*Our initial Business Combination and our
structure thereafter may not betax-efficientto our shareholders. As a result of our Business Combination, our tax obligations
may be more complex, burdensome and uncertain.*
Although we will attempt to
structure our initial Business Combination in a tax-efficientmanner, tax structuring considerations are complex, the relevant facts
and law are uncertain and may change, and we may prioritize commercial and other considerations over tax considerations. For example,
in connection with our initial Business Combination and subject to any requisite shareholder approval, we may structure our Business Combination
in a manner that requires shareholders to recognize gain or income for tax purposes, effect a Business Combination with a target company
in another jurisdiction, or reincorporate in or transfer by way of continuation to a different jurisdiction (including, but not limited
to, the jurisdiction in which the target company or business is located). We currently do not intend to make any cash distributions to
shareholders to pay taxes in connection with our initial Business Combination or thereafter. Accordingly, a shareholder may need to satisfy
any liability resulting from our initial Business Combination with cash from its own funds or by selling all or a portion of the shares
received. In addition, shareholders may also be subject to additional income, withholding or other taxes with respect to their ownership
of us after our initial Business Combination.
In addition, we may effect
a Business Combination with a target company that has business operations outside of the UnitedStates, and possibly, business operations
in multiple jurisdictions. If we effect such a Business Combination, we could be subject to significant income, withholding and other
tax obligations in a number of jurisdictions with respect to income, operations and subsidiaries related to those jurisdictions. Due to
the complexity of tax obligations and filings in other jurisdictions, we may have a heightened risk related to audits or examinations
by U.S.federal, state and local and non-U.S.taxing authorities. This additional complexity and risk could have an adverse
effect on our after-taxprofitability and financial condition.
**
*We may reincorporate in or transfer by way
of continuation to another jurisdiction in connection with our initial Business Combination and such reincorporation may result in taxes
imposed on shareholders and warrant holders.*
We may, in connection with
our initial Business Combination and subject to requisite shareholder approval under the Companies Act, reincorporate in or transfer by
way of continuation to the jurisdiction in which the target company or business is located or in another jurisdiction. The transaction
may require a shareholder or warrant holder to recognize taxable income in the jurisdiction in which the shareholder or warrant holder
is a tax resident or in which its members are resident if it is a tax transparent entity. We do not intend to make any cash distributions
to shareholders or warrant holders to pay such taxes. Shareholders or warrant holders may be subject to withholding taxes or other taxes
with respect to their ownership of us after the reincorporation.
**
*Our initial Business Combination or reincorporation
may result in taxes imposed on shareholders.*
We may, subject to requisite
shareholder approval under the Companies Act, effect a Business Combination with a target company in another jurisdiction, reincorporate
in or transfer by way of continuation to the jurisdiction in which the target company or business is located, or reincorporate or transfer
by way of continuation to in another jurisdiction. The transaction may require a shareholder to recognize taxable income in the jurisdiction
in which the shareholder is a tax resident or in which its members are resident if it is a tax transparent entity. We do not intend to
make any cash distributions to shareholders to pay taxes attributable to such income. Shareholders may be subject to withholding taxes
or other taxes with respect to their ownership of us after the reincorporation.
**
**
59
**
*We are subject to changing law and regulations
regarding regulatory matters, corporate governance and public disclosure that have increased both our costs and the risk ofnon-compliance.*
We are subject to rules and
regulations by various governing bodies, including, for example, the SEC, which are charged with the protection of investors and the oversight
of companies whose securities are publicly traded, and to new and evolving regulatory measures under applicable law. Our efforts to comply
with new and changing laws and regulations have resulted in and are likely to continue to result in, increased general and administrative
expenses and a diversion of management time and attention from seeking a Business Combination target.
Moreover, because these laws, regulations and
standards are subject to varying interpretations, their application in practice may evolve over time as new guidance becomes available.
This evolution may result in continuing uncertainty regarding compliance matters and additional costs necessitated by ongoing revisions
to our disclosure and governance practices. If we fail to address and comply with these regulations and any subsequent changes, we may
be subject to penalty and our business may be harmed.
Item 1B. Unresolved Staff Comments
None.
Item 1C. Cybersecurity
As a blank check company, we have no operations and therefore do not have any operations of our own that face cybersecurity threats. However, we do depend on the digital technologies of third parties, and as noted in *Item 1A. Risk Factors* of this Form 10-K, any sophisticated and deliberate attacks on, or security breaches in, systems or infrastructure or the cloud that we utilize, including those of third parties, could lead to corruption or misappropriation of our assets, proprietary information and sensitive or confidential data. Because of our reliance on the technologies of third parties, we also depend upon the personnel and the processes of third parties to protect against cybersecurity threats, and we have no personnel or processes of our own for this purpose. Our board of directors oversees risk for our Company, and prior to filings with the SEC, our board of directors reviews our risk factors, including the descriptions of the risks we face from cybersecurity threats, as described in *Item 1A. Risk Factors* of this Form 10-K.
Item 2. Properties
Our executive offices are
located at 7251 West Lake Mead Boulevard, Suite 300, Las Vegas, NV 89128. Our executive offices are provided to us by our Sponsor, and
we have agreed to pay our Sponsor $25,000 per month for office space, utilities and secretarial and administrative support. We consider
our current office space adequate for our current operations.
Item 3. Legal Proceedings
There is no material litigation,
arbitration or governmental proceeding currently pending against us or any members of our management team in their capacity as such.
Item 4. Mine Safety Disclosures
Not applicable.
60
Part
II
Item 5. Market for Registrants Common
Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities
Market Information
Our Units, Class A Ordinary
Shares, and Public Warrants are listed on the NYSE under the symbols SAC.U, SAC and SAC WS,
respectively.
Holders
As of December 31, 2025, there three holders of record of our
Units, one holder of record of our Class A Ordinary Shares, six holders of record of our Class B ordinary shares, and one holder
of record of our warrants.
Dividends
We have not paid any cash
dividends on our ordinary shares to date and do not intend to pay cash dividends prior to the completion of an initial Business Combination.
The payment of cash dividends in the future will be dependent upon our revenues and earnings, if any, capital requirements and general
financial conditions subsequent to completion of an initial Business Combination. The payment of any cash dividends subsequent to an initial
Business Combination will be within the discretion of our board of directors at such time. Further, if we incur any indebtedness, our
ability to declare dividends may be limited by restrictive covenants we may agree to in connection therewith.
Securities Authorized for Issuance under
Equity Compensation Plans
None.
Recent Sales of Unregistered Securities and
Use of Proceeds from Registered Offerings
None.
Item 6. [Reserved]
Item 7. Managements
Discussion and Analysis of Financial Condition and Results of Operations
Cautionary Note Regarding Forward-Looking Statements
All statements other than
statements of historical fact included in this Form 10-K including, without limitation, statements under this Item 7 regarding our financial
position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. When used
in this Form 10-K, words such as anticipate, believe, estimate, expect, intend
and similar expressions, as they relate to us or our management, identify forward-looking statements. Such forward-looking statements
are based on the beliefs of our management, as well as assumptions made by, and information currently available to, our management. Actual
results could differ materially from those contemplated by the forward-looking statements as a result of certain factors detailed in our
filings with the SEC. All subsequent written or oral forward-looking statements attributable to us or persons acting on our behalf are
qualified in their entirety by this paragraph.
The following discussion and
analysis of our financial condition and results of operations should be read in conjunction with the financial statements and the notes
thereto contained elsewhere in this Report.
Overview
We are a blank check company
incorporated in the Cayman Islands on June 27, 2025 formed for the purpose of effecting a merger, amalgamation, share exchange, asset
acquisition, share purchase, reorganization or other similar Business Combination with one or more businesses. We intend to effectuate
our Business Combination using cash derived from the proceeds of the Initial Public Offering and the sale of the Private Placement Units,
our shares, debt or a combination of cash, shares and debt.
We expect to continue to incur
significant costs in the pursuit of our acquisition plans. We cannot assure you that our plans to complete a Business Combination will
be successful.
61
Results of Operations
We have neither engaged in any operations nor generated any revenues
to date. Our only activities from June 27, 2025 (inception) through December 31, 2025 were organizational activities, those necessary
to prepare for the Initial Public Offering (as described below), and subsequent to the closing of the Initial Public Offering, identifying
a target company for a Business Combination. We do not expect to generate any operating revenues until after the completion of our Business
Combination. We generate non-operating income in the form of interest income on investments held in the Trust Account. We incur expenses
as a result of being a public company (for legal, financial reporting, accounting and auditing compliance, among other things), as well
as for due diligence expenses.
For the period from June 27, 2025 (inception) through December 31,
2025, we had net income of $333,565, which consisted of interest earned on cash and investments held in Trust Account of $526,196, partially
offset by formation, general and administrative cost of $192,631.
Liquidity and Capital Resources
On December 5, 2025, we consummated
the Initial Public Offering of 23,000,000 Units which includes the full exercise by the underwriters of their over-allotment option of
3,000,000 Units, at $10.00 per unit, generating gross proceeds of $230,000,000. Simultaneously with the closing of the Initial Public
Offering, we consummated the sale of an aggregate of 700,000 Private Placement Units at a price of $10.00 per unit, generating gross proceeds
of $7,000,000. Of those 700,000 Private Placement Units, the Sponsor purchased 470,000 Private Placement Units, and the underwriters purchased
230,000.
Following the Initial Public
Offering, the full exercise of the over-allotment option, and the sale of the Units, a total of $230,000,000 was placed in the Trust Account.
We incurred transaction costs totaling $14,360,472, consisting of $4,600,000 of cash underwriting fee, $9,200,000 of deferred underwriting
fee, and $560,472 of other offering costs.
For the period from June 27, 2025 (inception) through December 31,
2025, cash used in operating activities was $287,303. Net income of $333,565 was affected by payment of general and administrative costs
through promissory note related party of $27,594 and interest earned on cash and investments held in trust of $526,196, at an
annual effective rate of 3.6%. Changes in operating assets and liabilities used $122,266 of cash from operating activities.
We
intend to use substantially all of the funds held in the Trust Account, including any amounts representing interest earned on the Trust
Account (less income taxes payable), to complete our Business Combination. To the extent that our share capital or debt is used, in whole
or in part, as consideration to complete our Business Combination, the remaining proceeds held in the Trust Account will be used as working
capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.
We intend to use the funds
held outside the Trust Account primarily to identify and evaluate target businesses, perform business due diligence on prospective target
businesses, travel to and from the offices, plants or similar locations of prospective target businesses or their representatives or owners,
review corporate documents and material agreements of prospective target businesses, and structure, negotiate and complete a Business
Combination.
In order to fund working capital
deficiencies or finance transaction costs in connection with a Business Combination, the Sponsor, or certain of our officers and directors
or their affiliates may, but are not obligated to, loan us funds as may be required. If we complete a Business Combination, we would repay
such loaned amounts. In the event that a Business Combination does not close, we may use a portion of the working capital held outside
the Trust Account to repay such loaned amounts but no proceeds from our Trust Account would be used for such repayment. Up to $1,500,000
of such working capital loans may be convertible into Private Placement Units of the post-Business Combination entity at a price of $10.00
per unit, at the option of the lender. The Private Placement Unitsissued upon conversion of any such loans would be identical to
the Private Placement Unitssold in a private placement concurrently with the Initial Public Offering. As of December 31, 2025, no
working capital loans were outstanding.
We do not believe we will
need to raise additional funds in order to meet the expenditures required for operating our business. However, if our estimate of the
costs of identifying a target business, undertaking in-depth due diligence and negotiating a Business Combination are less than the actual
amount necessary to do so, we may have insufficient funds available to operate our business prior to our Business Combination. Moreover,
we may need to obtain additional financing either to complete our Business Combination or because we become obligated to redeem a significant
number of our Public Shares upon consummation of our Business Combination, in which case we may issue additional securities or incur debt
in connection with such Business Combination.
62
Off-Balance Sheet Financing Arrangements
We have no obligations, assets
or liabilities, which would be considered off-balance sheet arrangements as of December 31, 2025. We do not participate in transactions
that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which
would have been established for the purpose of facilitating off-balance sheet arrangements. We have not entered into any off-balance sheet
financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any
non-financial assets.
Contractual Obligations
We do not have any long-term
debt, capital lease obligations, operating lease obligations or long-term liabilities, other than an agreement to an affiliate of the
Sponsor $25,000 per month for office space, utilities and secretarial and administrative support services provided to members of the management
team.
The Company granted the underwriters
a 45-day option from the final prospectus relating to the Initial Public Offering to purchase up to 3,000,000 additional Public Unitsto
cover over-allotments, if any, at the Initial Public Offering price less the underwriting discounts and commissions. On December 5, 2025,
the underwriters elected to fully exercise their over-allotment option to purchase an additional 3,000,000 Public Units at a price of
$10.00 per unit.
The underwriters were entitled
to an underwriting discount of $0.20 per Public Share, or $4,600,000 in the aggregate, which was paid at the closing of the Initial Public
Offering. In addition, $0.40 per unit, or $9,200,000 in the aggregate, payable to the underwriters for deferred underwriting commissions
placed in the Trust Account, and will be released to the underwriters only upon the consummation of an initial Business Combination. The
deferred fee will become payable to the underwriters from the amounts held in the Trust Account solely in the event that the Company completes
a Business Combination, subject to the terms of the underwriting agreement.
Critical Accounting Estimates and Policies
The preparation of audited
financial statements and related disclosures in conformity with U.S. GAAP requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the audited financial statements,
and income and expenses during the periods reported. Making estimates requires management to exercise significant judgement. It is at
least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of
the audited financial statements, which management considered in formulating its estimate, could change in the near term due to one or
more future confirming events. Accordingly, the actual results could materially differ from those estimates. As of December 31, 2025,
we did not have any critical accounting estimates to be disclosed.
Item 7A. Quantitative and Qualitative Disclosures
about Market Risk
We are a smaller reporting
company as defined by Rule 12b-2 of the Securities Exchange Act of 1934, as amended, and are not required to provide the information otherwise
required under this item.
Item 8. Financial Statements and Supplementary
Data
Reference is made to pages F-1 through F-21 comprising a portion of
this Form 10-K, which is included herein by reference.
Item 9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure
None.
63
Item 9A. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures
are controls and other procedures designed to ensure that information required to be disclosed in our reports filed or submitted under
the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SECs rules and forms.
Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to
be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to management, including our Chief
Executive Officer and Chief Financial Officer (together, the Certifying Officers), or persons performing similar functions,
as appropriate, to allow timely decisions regarding required disclosure.
Under the supervision
and with the participation of management, including our Certifying Officers, we carried out an evaluation of the effectiveness of
the design and operation of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange
Act. Based on the foregoing, our Certifying Officers concluded that our disclosure controls and procedures were not effective as of
December 31, 2025 due to inadequate segregation of duties within accounting processes due to limited personnel and insufficient
written policies and procedures for accounting, IT, financial reporting, and bookkeeping. However, the Certifying Officers completed
a review of the accounting for material transactions covering this period and determined that the financial statements presented
were complete and accurate and in conformity with U.S. generally accepted accounting principles. In February 2026, the Certifying
Officers and the audit committee approved a set of policies and procedures designed to meet requirements for adequate internal
controls over financial reporting.
Managements Report on Internal Controls
Over Financial Reporting
This Annual Report on Form
10-K does not include a report of managements assessment regarding internal control over financial reporting or an attestation
report of our independent registered public accounting firm due to a transition period established by rules of the SEC for newly public
companies.
Changes in Internal Control over Financial
Reporting
There were no changes in our internal control over
financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the most recent fiscal quarter
that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Item 9B. Other Information
None.
Item 9C. Disclosure Regarding Foreign Jurisdictions
that Prevent Inspections
Not applicable.
64
Part
III
Item 10. Directors, Executive Officers and Corporate
Governance Officers and Directors
Our executive officers and
directors are as follows:
|
NAME |
|
AGE |
|
POSITION | |
|
Mark Gottfredson |
|
68 |
|
Chief Executive Officer and Chairman | |
|
Frank Bachinsky |
|
62 |
|
Chief Operating Officer and Director | |
|
Robert M. Tarola |
|
75 |
|
Chief Financial Officer and Director | |
|
Dan Crowley |
|
62 |
|
Director | |
|
Bruce Carlson |
|
75 |
|
Director | |
|
Richard Newton |
|
69 |
|
Director | |
|
Lee Stern |
|
74 |
|
Director | |
*Mark Gottfredson*,
68, has served as our Chairman since June 2025 and our Chief Executive Officer since September 2025. Mr. Gottfredson has also served in
several senior leadership positions over more than 40 years at Bain & Company (Bain) including as a member of the board
of directors of the parent company. Mr. Gottfredson has founded and served as the head of numerous practices at Bain, leading them to
become large, significant businesses within the firm. This includes the Global Performance Improvement practice, Complexity Management
practice and the Americas Automotive and Mobility practice. In addition, he was the founder of the Dallas Office and the Energy practice
at Bain. Over his four decades at Bain, Mr. Gottfredson has advised Chief Executives and boards across a wide range of industries, including
companies in our sectors of focus as well as companies in the industrial and consumer industries. Outside of his work at Bain, Mr. Gottfredson
was also an active board member for several companies including Vista Outdoors (formerly NYSE: VSTO), TBM Consulting, and Emerge Energy
Services. Mr. Gottfredson is also the co-author of The Breakthrough Imperative and has written extensively for publications
including the Harvard Business Review and The Wall Street Journal amongst other notable business publications. In addition, Mr. Gottfredson
serves as a Managing Member of our Sponsor.
**
*Frank Bachinsky*,
62, has served as our Chief Operating Officer since September 2025 and as a member of our board of directors since June 2025. Prior to
that, Mr. Bachinsky served as our Chief Executive Officer and Chief Financial Officer. Mr. Bachinsky has over 35 years of investing and
operating experience, having spent several years as a C-level executive of several private companies. Mr. Bachinsky also has deep expertise
driving sustainable aquaculture development through new technology development, highly scalable business models, and project lifecycle
management. Mr. Bachinsky has held various roles at both public and private companies including Chief Executive Officer, Chief Global
Development Officer, Vice President of Business Development, Vice President of Marketing, Chairman, and Independent Director. Mr. Bachinsky
currently serves as the Chief Executive Officer of Avalor Capital Management 1 LLC. He is also the manager of Anchor Family Holdings LLC.
Previously, Mr. Bachinsky served as Chief Global Development Officer at Forever Oceans Corporation from 2017 to 2018, and Vice President
of Business Development from 2015 to 2016. From 2008 to 2014, Mr. Bachinsky was Chairman and Chief Executive Officer of Avalor Energy
Corporation. Earlier in his career, Mr. Bachinsky served as Managing Partner of Viridian Capital Partners from 1998 until 2002. Mr. Bachinsky
has also held positions as Marketing Manager, Corporate Planning Manager, and other consulting titles during his professional career.
Mr. Bachinsky previously served on the board of directors of Reliacast, Verticore Technologies, and Off Hollywood Network. In addition,
Mr. Bachinsky serves as a Managing Member of our Sponsor.
**
*Robert M. Tarola*,
75, has served as our Chief Financial Officer and on our board of directors since September 2025. Mr. Tarola is president of Right Advisory
LLC (Right Advisory) in Washington, DC where his firm has provided turnaround and betterment services for clients since
2008. As president of Right Advisory, Mr. Tarola has taken transition CFO roles with multiple organizations, including Howard University,
Southcoast Health System, Covenant Health, Good Shepherd Rehabilitation Network, and Redeemer Health. Prior to serving as a CFO and consultant,
Mr. Tarola was a Partner with Price Waterhouse LLP (Price Waterhouse) where he was employed from 1974 to 1996. During his
twenty-two year tenure with Price Waterhouse, he served in a variety of capacities, including Regional Managing Partner for a strategic
industry segment in technology and media, a partner in its National SEC Services Group, and an engagement partner for major client accounts.
Mr. Tarola served as Chief Financial officer of MedStar Health, Inc. from 1996 to 1999 and W.R. Grace & Co. (NYSE: GRA) from 1999
to 2008. Mr. Tarolas career spans roles in auditing, corporate finance, governance and consulting. He has extensive experience
in the board room and C-suite of public and private companies including serving as a director of Vista Outdoor, Inc. (NYSE:VSTO) from
February 2015 to February 2025, a director of Revelyst, Inc. (NYSE:GEAR) from Augus 2024 to February 2025, a director of TeleTech Holdings,
Inc. (NASDAQ:TTEC) from 2008 to 2014, a trustee of mutual funds Sponsored by Franklin Resources, Inc. from 1996 to 2023, director and
board chair of The American Kidney Fund from 2008 to 2018, director an board chair of XBRL International, Inc. 2014 to 2024, a director
of the Maryland Association of CPAs from 2005 to 2015, and a member of both the Standing Advisory Group and Investor Advisory Group of
the Public Company Accounting Oversight Board (PCAOB) from 2006 to 2021. Mr. Tarola is a Certified Public Accountant and a Chartered Global
Management Accountant with active licenses in three states and the District of Columbia.
**
**
65
**
*Dan Crowley*,
62, has served on our board of directors since December 2025. Mr. Crowley brings 42 years of industry experience and has held key leadership
roles in the development, production and deployment of some of the largest and most complex aerospace and defense products, including
unmanned and reconnaissance aircraft, launch vehicles, commercial and classified spacecraft, missile defense systems, flight training
and logistics, tactical fighters, and air traffic and command and control systems. Mr. Crowley served as President & CEO of Triumph
Group (Triumph) from January 2016 until July 2025, where he led a team of over 4,800 men and women generating $1.3 billion
in sales across over 25 sites who provide systems and aftermarket services for commercial and defense aerospace applications. In this
role, Mr. Crowley led a comprehensive turnaround, portfolio restructuring, return to profitable growth and restoration of customer and
investor confidence. This included the evaluation or completion of over 12 acquisitions. Mr. Crowley joined Triumph from Raytheon Company
(Raytheon) where he served as President of Integrated Defense Systems from 2013 until 2015, with annual revenues over $6
billion, and Network Centric Systems from 2010 until 2013. During his time at Raytheon he led 13,000 employees and evaluated or completed
six acquisitions. Prior to working at Raytheon, Mr. Crowley held senior leadership positions at Lockheed Martin, including President of
their training and logistics business, Executive Vice President of the F-35 Joint Strike Fighter Program and Chief Operating Officer of
Lockheed Martin Aeronautics (Lockheed). As COO, he was responsible for supporting Lockheed Martins key tactical fighter
and military transport programs as well as the Advanced Development Programs (Skunk Works) organization. During his time at Lockheed,
Mr. Crowley led 18,000 employees generating $10 billion in sales. Under his oversight, critical franchise aerospace and defense programs
have contributed billions of dollars in backlog and revenue to their respective prime contractors in support of domestic and international
customers. Mr. Crowley was also key to the integration of Lockheed and Martin Marietta. Dan earned a bachelors degree in mechanical
engineering and a masters degree in manufacturing systems engineering from the University of Texas at Austin. He also received
a masters degree in management from Stanford University as a Sloan Fellow. Dan serves as an Independent Director of Knowles Inc.,
a publicly-traded semiconductor design and manufacturing company, and as a trustee at the American Air Museum in Britain. He is a former
member of the University of Texas at Austin Engineering Advisory Board. Mr. Crowley is qualified to serve on our board of directors because
of his executive leadership experience and industry insight into major aerospace and defense programs.
**
*Bruce Carlson*,
75, has served on our board of directors since December 2025. Prior to his retirement, as Commander of the AF Materiel Command, in Jan
2009, General Carlson was responsible for all US Air Force (AF) science & technology research efforts, AF acquisition
personnel, AF flight developmental testing and worldwide sustainment of all AF aircraft, communications, computer and weapons systems,
including supply chain management and depot & contractor support. He managed an annual operating budget in excess of $7 billion, and
his command annually executed $50 billion of additional AF funding. General Carlson served as Vice Commander for a new one-of-a-kind Air
Force composite fighter and bomber wing, where he directed the activation of a 3500-person, 74-aircraft organization and oversaw its manning,
staffing and directed new construction, finance and training for this diverse combat-ready organization. He then returned to the Pentagon
to serve as principal military advisor to the Undersecretary of Defense for Acquisition and then Deputy Secretary of Defense, Dr. John
Deutch. He was responsible for coordination of critical national security matters with the Joint Staff, Secretary of Defense and White
House Staff. He later served as principle Joint Staff advisor to the Secretary of Defense on the 2001 Quadrennial Defense Review and authored
financial options for the first wartime Congressional Supplemental ($38 billion in less than 24 hours) in wake of 9/11 attacks on the
United States. Prior to assuming his last AF position, General Carlson left the Pentagon to serve as commander of the AFs Eighth
Air Force where he commanded all AF nuclear and conventional bomber forces and the AFs intelligence gathering and processing capability.
While in command he successfully created the Air Forces Information Operations management organization. Following his retirement
from active duty, General Carlson was asked by the Obama Administration to serve as the seventeenth director of the National Reconnaissance
Office. He served from July 2009 through July 2012 providing direction and leadership on the development, construction, launch, and operation
the United States reconnaissance satellite constellation. He served as a member of the Boards of Directors at Lockheed Martin Corporation
from July 2015 to May 2025 and The Benchmark Corporation from July 2017 to October 2021. He currently serves as chairman of Utah States
Space Dynamics Laboratory Board of Directors. Carlsons military awards and decorations include the Defense Distinguished Service
Medal with oak leaf cluster, Air Force Distinguished Service Medal with two oak leaf clusters, Air Force ROTC Distinguished Alumni Award,
the National Intelligence Distinguished Service Award, the DoD Medal for Distinguished Public Service, the James V. Hartinger Award for
Distinguished Service in the Field of Military Space, and the Order of the Sword, Air Force Materiel Command. General Carlson is qualified
to serve on our board of directors because of his extensive experience in the defense industry as well as his prior public company board
service and oversight of multi-billion dollar budgets.
**
*Richard Newton*,
69, has served on our board of directors since December 2025. Lieutenant General Newton (Ret.) served 34 years in the US Military, culminating
as the US Air Force Assistant Vice Chief of Staff. He previously served as Deputy Chief of Staff for Manpower & Personnel and oversaw
Global Operations directorate for the Joint Chiefs of Staff. General Newton commanded Minot AFB and the first B-2 Stealth bomber squadron.
He currently serves on the boards of Victory Capital Management (NASDAQ: VCTR) and Victory Portfolios III. He was previously Chairman
of the Board of the $10 billion for profit Army and Air Force Exchange Service retail global store chain, among others. Mr. Newton is
qualified to serve on our board of directors because of his leadership experience in the military and current service on multiple boards
in the financial and technology sectors.
**
**
66
**
*Lee Stern*, 74,
has served on our board of directors since December 2025. Mr. Stern currently serves as a Managing Director at Centre Lane Partners, a
private equity firm focused on middle-market companies. Previously, he was a Managing Director at Monroe Capital from May 2014 until April
2021 and was a founding member of KKRs mezzanine fund in August 2009, helping raise over $1 billion. Earlier in his career, he
held senior roles at Blackstone/GSO, Technology Investment Capital, Levine Leichtman, Nomura Securities, Kidder Peabody, and Drexel Burnham
Lambert. Mr. Stern was a member of the Board of Directors of AECOM from February 2006 until September 2007. He was also a board member
of GreenVison Acquisition Corp from November 2020 until August 2021 and is currently on the Board of Directors of micromobility.com Inc.
Mr. Stern is qualified to serve on our board of directors because of his track record in raising capital and history of senior leadership
roles.
Number and Terms of Office of Officers and
Directors
Our board of directors consists
of seven members and is divided into three classes with only one class of directors being appointed in each year, and with each class
(except for those directors appointed prior to our first annual general meeting) serving a three-year term. In accordance with the NYSE
corporate governance requirements, we are not required to hold an annual general meeting until one year after our first fiscal year end
following our listing on the NYSE. The term of office of the first class of directors, consisting of Richard Newton and Bruce Carlson,
will expire at our first annual general meeting. The term of office of the second class of directors, consisting of Lee Stern and Dan
Crowley, will expire at the second annual general meeting. The term of office of the third class of directors, consisting of Frank Bachinsky,
Mark Gottfredson and Robert M. Tarola, will expire at the third annual general meeting.
Our officers are appointed
by the board of directors and serve at the discretion of the board of directors, rather than for specific terms of office. Our board of
directors is authorized to appoint officers as it deems appropriate pursuant to our amended and restated memorandum and articles of association.
Director Independence
The rules of the NYSE require
that a majority of our board of directors be independent within one year of our initial public offering. An independent director
is defined generally as a person who, in the opinion of the companys board of directors, has no material relationship with the
listed company (either directly or as a partner, shareholder or officer of an organization that has a relationship with the company).
Our board of directors has determined that each of Richard Newton, Bruce Carlson, Dan Crowley and Lee Stern is an independent director
as defined in the NYSE listing standards and applicable SEC rules. Our independent directors will have regularly scheduled meetings at
which only independent directors are present.
Committees of the Board of Directors
Our board of directors has
three standing committees: an audit committee, a nominating and corporate governance committee and a compensation committee. Each of our
audit committee, nominating and corporate governance committee and our compensation committee are composed solely of independent directors.
Subject to phase-in rules, the rules of the NYSE and Rule 10A-3 of the Exchange Act require that the audit committee of a listed company
be comprised solely of independent directors, and the rules of the NYSE require that the compensation committee and the nominating and
corporate governance committee of a listed company be comprised solely of independent directors. Each committee operates under a charter
that was approved by our board of directors and has the composition and responsibilities described below. The charter of each committee
is available on our website.
Audit Committee
The members of our audit committee
are Richard Newton, Bruce Carlson, Dan Crowley and Lee Stern. Under the NYSE listing standards and applicable SEC rules, we are required
to have at least three members of the audit committee, all of whom must be independent. Each of Richard Newton, Bruce Carlson, Dan Crowley
and Lee Stern meet the independent director standard under the NYSE listing standards and under Rule 10-A-3(b)(1) of the Exchange Act.
Dan Crowley serves as chair of the audit committee.
67
Each member of the audit committee
is financially literate and our board of directors has determined that Dan Crowley qualifies as an audit committee financial expert
as defined in applicable SEC rules and has accounting or related financial management expertise.
We have adopted an audit committee
charter, which details the principal functions of the audit committee, including:
|
| assisting board oversight of (1) the integrity of our financial statements, (2) our compliance with legal
and regulatory requirements, (3) our independent auditors qualifications and independence, and (4) the performance of our internal
audit function and independent auditors; the appointment, compensation, retention, replacement, and oversight of the work of the independent
auditors and any other independent registered public accounting firm engaged by us; | |
|
| pre-approving all audit and non-audit services to be provided by the independent auditors or any other
registered public accounting firm engaged by us, and establishing pre-approval policies and procedures; reviewing and discussing with
the independent auditors all relationships the auditors have with us in order to evaluate their continued independence; | |
|
| setting clear policies for audit partner rotation in compliance with applicable laws and regulations;
obtaining and reviewing a report, at least annually, from the independent auditors describing (1) the independent auditors internal
quality-control procedures and (2) any material issues raised by the most recent internal quality-control review, or peer review, of the
audit firm, or by any inquiry or investigation by governmental or professional authorities, within the preceding five years respecting
one or more independent audits carried out by the firm and any steps taken to deal with such issues; | |
|
| meeting to review and discuss our annual audited financial statements and quarterly financial statements
with management and the independent auditor, including reviewing our specific disclosures under Managements Discussion
and Analysis of Financial Condition and Results of Operations; | |
|
| reviewing and approving any related party transaction required to be disclosed pursuant to Item 404 of
Regulation S-K promulgated by the SEC prior to us entering into such transaction; and | |
|
| reviewing with management, the independent auditors, and our legal advisors, as appropriate, any legal,
regulatory or compliance matters, including any correspondence with regulators or government agencies and any employee complaints or published
reports that raise material issues regarding our financial statements or accounting policies and any significant changes in accounting
standards or rules promulgated by the Financial Accounting Standards Board, the SEC or other regulatory authorities. | |
Compensation Committee
The members of our compensation
committee are Richard Newton, Bruce Carlson, Dan Crowley and Lee Stern. Under the NYSE listing standards and applicable SEC rules, we
are required to have at least two members of the compensation committee, all of whom must be independent. Each of Richard Newton, Bruce
Carlson, Dan Crowley and Lee Stern are independent. Lee Stern chairs the compensation committee.
We have adopted a compensation
committee charter, which details the principal functions of the compensation committee, including:
|
| reviewing and approving on an annual basis the corporate goals and objectives relevant to our chief executive
officers compensation, evaluating our chief executive officers performance in light of such goals and objectives and determining
and approving the remuneration (if any) of our chief executive officer based on such evaluation; | |
|
| reviewing and making recommendations to our board of directors with respect to the compensation, and any
incentive compensation and equity based plans that are subject to board approval of all of our other officers; | |
68
|
| reviewing our executive compensation policies and plans; | |
|
| implementing and administering our incentive compensation equity-based remuneration plans; | |
|
| assisting management in complying with our proxy statement and annual report disclosure requirements; | |
|
| approving all special perquisites, special cash payments and other special compensation and benefit arrangements
for our officers and employees; | |
|
| producing a report on executive compensation to be included in our annual proxy statement; and | |
|
| reviewing, evaluating and recommending changes, if appropriate, to the remuneration for directors. | |
Notwithstanding the foregoing,
other than the payment of $25,000 per month to our Sponsor for office space, utilities and secretarial and administrative support and
reimbursement of expenses, no compensation of any kind, including finders, consulting or other similar fees, will be paid to any of our
existing shareholders, officers, directors or any of their respective affiliates, prior to, or for any services they render in order to
effectuate the consummation of an initial Business Combination. Accordingly, it is likely that prior to the consummation of an initial
Business Combination, the compensation committee will only be responsible for the review and recommendation of any compensation arrangements
to be entered into in connection with such initial Business Combination.
The compensation committee
charter also provides that the compensation committee may, in its sole discretion, retain or obtain the advice of a compensation consultant,
independent legal counsel or other adviser and is directly responsible for the appointment, compensation and oversight of the work of
any such adviser. However, before engaging or receiving advice from a compensation consultant, external legal counsel or any other adviser,
the compensation committee will consider the independence of each such adviser, including the factors required by the NYSE and the SEC.
*Nominating and
Corporate Governance Committee*
The members of our nominating
and corporate governance are BruceCarlson, Dan Crowley, Richard Newton and Lee Stern. Richard Newton serves as chair of the nominating
and corporate governance committee.
We have adopted a nominating
and corporate governance committee charter, which details the purpose and responsibilities of the nominating and corporate governance
committee, including:
|
| identifying, screening and reviewing individuals qualified to serve as directors, consistent with criteria
approved by the board, and recommending to the board of directors candidates for nomination for appointment at the annual general meeting
of shareholders or to fill vacancies on the board of directors; | |
|
| developing and recommending to the board of directors and overseeing implementation of our corporate governance
guidelines; | |
|
| coordinating and overseeing the annual self-evaluationof the board of directors, its committees,
individual directors and management in the governance of the company; and | |
|
| reviewing on a regular basis our overall corporate governance and recommending improvements as and when
necessary. | |
The charter also provides
that the nominating and corporate governance committee may, in its sole discretion, retain or obtain the advice of, and terminate, any
search firm to be used to identify director candidates, and will be directly responsible for approving the search firms fees and
other retention terms.
We have not formally
established any specific, minimum qualifications that must be met or skills that are necessary for directors to possess. In general, in
identifying and evaluating nominees for director, the board of directors considers educational background, diversity of professional experience,
knowledge of our business, integrity, professional reputation, independence, wisdom, and the ability to represent the best interests of
our shareholders. Prior to our initial Business Combination, holders of our Class A Ordinary Shares will not have the right to recommend
director candidates for nomination to our board of directors.
**
**
69
**
*Guidelines for
Selecting Director Nominees*
The guidelines for selecting
nominees, which are specified in the nominating and corporate governance charter, generally provide that persons to be nominated:
|
| should have demonstrated notable or significant achievements
in business, education or public service; |
|
|
| should possess the requisite intelligence, education and experience
to make a significant contribution to the board of directors and bring a range of skills, diverse perspectives and backgrounds to its
deliberations; and |
|
|
| should have the highest ethical standards, a strong sense of
professionalism and intense dedication to serving the interests of the shareholders. |
|
The nominating and corporate
governance committee will consider a number of qualifications relating to management and leadership experience, background and integrity
and professionalism in evaluating a persons candidacy for membership on the board of directors. The nominating and corporate governance
committee may require certain skills or attributes, such as financial or accounting experience, to meet specific board needs that arise
from time to time and will also consider the overall experience and makeup of its members to obtain a broad and diverse mix of board members.
The nominating and corporate governance committee will not distinguish among nominees recommended by shareholders and other persons.
Compensation Committee Interlocks and Insider
Participation
None of our officers currently
serves, or in the past year has served, as a member of the compensation committee of any entity that has one or more officers serving
on our board of directors.
Code of Business Conduct and Ethics, Insider
Trading Policy and Committee Charters
We have adopted a Code of
Ethics applicable to our directors, officers and employees. We have filed a copy of our Code of Ethics as an exhibit to this Form 10-K.
You are able to review this document by accessing our public filings at the SECs web site at *www.sec.gov*. In addition, a
copy of the Code of Ethics and the charters of the committees of our board of directors can be provided without charge upon request from
us. If we make any amendments to our Code of Ethics other than technical, administrative or other non-substantive amendments, or grant
any waiver, including any implicit waiver, from a provision of the Code of Ethics applicable to our principal executive officer, principal
financial officer principal accounting officer or controller or persons performing similar functions requiring disclosure under applicable
SEC or the NYSE rules, we will disclose the nature of such amendment or waiver on our website. The information included on our website
is not incorporated by reference into this Form 10-K or in any other report or document we file with the SEC, and any references to our
website are intended to be inactive textual references only.
We have also adopted a policy
regarding insider training and dissemination of inside information (the Insider Trading Policy) governing the purchase,
sale, and other disposition of our securities by our directors, officers, and employees as well as by the Company that we believe is reasonably
designed to promote compliance with insider trading laws, rules, and regulations and listing standards applicable to the Company. A copy
of our Insider Trading Policy is filed as Exhibit 19 to this Form 10-K.
Limitation on Liability and Indemnification
of Officers and Directors
Cayman Islands law does not
limit the extent to which a companys memorandum and articles of association may provide for indemnification of officers and directors,
except to the extent any such provision may be held by the Cayman Islands courts to be contrary to public policy, such as to provide indemnification
against willful default, fraud or the consequences of committing a crime. Our amended and restated memorandum and articles of association
provide for indemnification of our officers and directors to the maximum extent permitted by law, including for any liability incurred
in their capacities as such, except through their own actual fraud, willful default or willful neglect. We have purchased a policy of
directors and officers liability insurance that insures our officers and directors against the cost of defense, settlement
or payment of a judgment in some circumstances and insures us against our obligations to indemnify our officers and directors.
70
Our officers and directors
have agreed to waive any right, title, interest or claim of any kind in or to any monies in the Trust Account, and have agreed to waive
any right, title, interest or claim of any kind they may have in the future as a result of, or arising out of, any services provided to
us and will not seek recourse against the Trust Account for any reason whatsoever. Accordingly, any indemnification provided will only
be able to be satisfied by us if (i) we have sufficient funds outside of the Trust Account or (ii) we consummate an initial Business Combination.
Our indemnification obligations
may discourage shareholders from bringing a lawsuit against our officers or directors for breach of their fiduciary duty. These provisions
also may have the effect of reducing the likelihood of derivative litigation against our officers and directors, even though such an action,
if successful, might otherwise benefit us and our shareholders. Furthermore, a shareholders investment may be adversely affected
to the extent we pay the costs of settlement and damage awards against our officers and directors pursuant to these indemnification provisions.
We believe that these provisions,
the insurance and the indemnity agreements are necessary to attract and retain talented and experienced officers and directors.
Item 11. Executive Compensation.
None of our executive officers
or directors has received any cash compensation for services rendered. We will pay our Sponsor $25,000 for office space, utilities and
secretarial and administrative services provided to members of our management team until the consummation of our initial Business Combination.
No compensation of any kind, including any finders fee, reimbursement, consulting fee or monies in respect of any payment of a
loan, will be paid by us to our Sponsor, officers and directors, or any affiliate of theirs, for services rendered prior to, or for any
services rendered in order to effectuate, the consummation of our initial Business Combination (regardless of the type of transaction
that it is). However, these individuals will be entitled to certain payments including, but not limited to, reimbursement for any out-of-pocket
expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence
on suitable Business Combinations. Our audit committee will review on a quarterly basis all payments that were made to our Sponsor, officers
or directors, or our or their affiliates. Any such payments prior to an initial Business Combination will be made using funds held outside
the Trust Account. Other than quarterly audit committee review of such payments, we do not expect to have any additional controls in place
governing our reimbursement payments to our directors and executive officers for their out-of-pocket expenses incurred in connection with
identifying and consummating an initial Business Combination.
After the completion of our
initial Business Combination, directors or members of our management team who remain with us may be paid consulting or management fees
from the combined company. All of these fees will be fully disclosed to shareholders, to the extent then known, in the tender offer materials
or proxy solicitation materials furnished to our shareholders in connection with a proposed initial Business Combination. We have not
established any limit on the amount of such fees that may be paid by the combined company to our directors or members of management. It
is unlikely the amount of such compensation will be known at the time of the proposed initial Business Combination, because the directors
of the post-combination business will be responsible for determining officer and director compensation. Any compensation to be paid to
our officers will be determined, or recommended to the board of directors for determination, either by a compensation committee constituted
solely by independent directors or by a majority of the independent directors on our board of directors.
We do not intend to take any
action to ensure that members of our management team maintain their positions with us after the consummation of our initial Business Combination,
although it is possible that some or all of our officers and directors may negotiate employment or consulting arrangements to remain with
us after our initial Business Combination. The existence or terms of any such employment or consulting arrangements to retain their positions
with us may influence our managements motivation in identifying or selecting a target business but we do not believe that the ability
of our management to remain with us after the consummation of our initial Business Combination will be a determining factor in our decision
to proceed with any potential Business Combination. We are not party to any agreements with our officers and directors that provide for
benefits upon termination of employment.
71
Item 12. Security Ownership
of Certain Beneficial Owners and Management and Related Shareholder Matters.
The following table sets forth
information regarding the beneficial ownership of our ordinary shares as of March 4, 2026,
by:
|
| each person known by us to be the beneficial owner of more than 5% of our outstanding ordinary shares; | |
|
| each of our officers and directors; and | |
|
| all our officers and directors as a group. | |
Unless otherwise indicated,
we believe that all persons named in the table below have sole voting and investment power with respect to all ordinary shares beneficially
owned by them. The following table does not reflect beneficial ownership of the Public Warrants or Private Placement Warrants as these
warrants are not exercisable within 60 days of the date of this Form 10-K.
We have based our calculation
of the percentage of beneficial ownership on 23,700,000 Class A Ordinary Shares and 7,666,667 Class B ordinary shares issued and outstanding
as of March 4, 2026.
|
| |
Class A | | |
Class B | | |
| | |
|
| |
Ordinary Shares | | |
Ordinary Shares | | |
Approximate | | |
|
| |
Number of | | |
| | |
Number of | | |
| | |
Percentageof | | |
|
| |
Shares | | |
Approximate | | |
Shares | | |
Approximate | | |
Outstanding | | |
|
| |
Beneficially | | |
Percentage | | |
Beneficially | | |
Percentage | | |
Ordinary | | |
|
Name and Address of Beneficial Owner(1) | |
Owned | | |
of Class | | |
Owned(2) | | |
of Class | | |
Shares | | |
|
Directors, Executive Officers and Founders | |
| | |
| | |
| | |
| | |
| | |
|
Mark Gottfredson(3) | |
| 470,000 | | |
| 2.0 | % | |
| 7,541,667 | | |
| 98.4 | % | |
| 25.5 | % | |
|
Frank Bachinsky(3) | |
| 470,000 | | |
| 2.0 | % | |
| 7,541,667 | | |
| 98.4 | % | |
| 25.5 | % | |
|
Bruce Carlson | |
| - | | |
| - | | |
| 25,000 | | |
| * | | |
| * | | |
|
Dan Crowley | |
| - | | |
| - | | |
| 25,000 | | |
| * | | |
| * | | |
|
Richard Newton | |
| - | | |
| - | | |
| 25,000 | | |
| * | | |
| * | | |
|
Robert M. Tarola(4) | |
| - | | |
| - | | |
| 25,000 | | |
| * | | |
| * | | |
|
Lee Stern | |
| - | | |
| - | | |
| 25,000 | | |
| * | | |
| * | | |
|
All executive officers, directors
and director as a group (7 individuals) | |
| 470,000 | | |
| 2.0 | % | |
| 7,666,667 | | |
| 100.0 | % | |
| 25.5 | % | |
|
Five Percent Holders | |
| | | |
| | | |
| | | |
| | | |
| | | |
|
Safeguard Acquisition Management LLC(3) | |
| 470,000 | | |
| 2.0 | % | |
| 7,541,667 | | |
| 98.4 | % | |
| 25.5 | % | |
|
Adage Capital Management, L.P.(5) | |
| 1,800,000 | | |
| 7.6 | % | |
| - | | |
| - | | |
| 5.7 | % | |
|
* |
Less than 1% | |
|
(1) | Unless otherwise noted, the business address of each of the following entities or individuals is c/o Safeguard
Acquisition Corp., 7251 West Lake Mead Boulevard, Suite 300, Las Vegas, NV 89128. | |
|
(2) | Interests shown consist solely of Founder Shares, classified as Class B ordinary shares. Such shares will
automatically convert into Class A Ordinary Shares concurrently with or immediately following the consummation of our initial Business
Combination, or earlier at the option of the holders thereof, on a one-for-one basis, subject to adjustment. | |
|
(3) | Safeguard Acquisition Management LLC is the record holder of the shares. Frank Bachinsky and Mark Gottfreson
are the managing members of Safeguard Acquisition Management LLC and have voting and investment discretion over the securities held by
Safeguard Acquisition Management LLC. | |
|
(4) | The shares reported above are held directly by Right Advisory LLC. Robert M. Tarola has control over the
securities held by Right Advisory LLC and is deemed to beneficially own the securities held by Right Advisory LLC. | |
|
(5) | According to a Schedule 13G filed with the SEC on February
12, 2026, interests shown are held by (i) Adage Capital Management, L.P., a Delaware limited partnership (ACM), as the investment
manager of Adage Capital Partners, L.P., a Delaware limited partnership (ACP), (ii) Robert Atchinson (Mr. Atchinson),
as (1) managing member of Adage Capital Advisors, L.L.C., a limited liability company organized under the laws of the State of Delaware
(ACA), managing member of Adage Capital Partners GP, L.L.C., a limited liability company organized under the laws of the
State of Delaware (ACPGP), general partner of ACP and (2) managing member of Adage Capital Partners LLC, a Delaware limited
liability company (ACPLLC), general partner of ACM, with respect to the Class A Ordinary Shares directly held by ACP, and
(iii) Phillip Gross (Mr. Gross), as (1) managing member of ACA, managing member of ACPGP and (2) managing member of ACPLLC,
general partner of ACM, with respect to the Class A Ordinary Shares directly held by ACP. The business address of each of the foregoing
entities and individuals is 200 Clarendon Street, 52nd Floor, Boston, Massachusetts 02116. |
|
72
Item 13. Certain Relationships and Related Transactions,
and Director Independence
Founder Shares
On July 18, 2025, our Sponsor
purchased an aggregate of 7,666,667 Founder Shares for an aggregate purchase price of $25,000, or approximately $0.003 per share. On October
31, 2025, our Sponsor transferred 25,000 Founder Shares to each of our independent director nominees (for an aggregate of 100,000 Founder
Shares) and 25,000 Founder Shares to our Chief Financial Officer at the same per-share price that our Sponsor purchased such shares, or
approximately $0.003 per share, resulting in our Sponsor holding 7,541,667 Founder Shares. The number of Founder Shares outstanding was
determined based on the expectation that the total size of the IPO would be a maximum of 23,000,000 units if the underwriters over-allotment
option is exercised in full, and therefore that such Founder Shares would represent 25% of the outstanding shares after the IPO.
Private Placement
Units
Our Sponsor and Jefferies LLC (Jefferies) purchased an
aggregate of 700,000 Private Placement Units for an aggregate purchase price of $7,000,000, or $10.00 per unit, in a private placement
that occurred simultaneously with the closing of the IPO. Of those 700,000 Private Placement Units, our Sponsor purchased 470,000 Private
Placement Units and Jefferies purchased 230,000. The Private Placement Units are identical to the Units sold in the IPO, except that the
Private Placement Units will not be transferable or salable until 30 days after the completion of the initial Business Combination. A
portion of the purchase price of the Private Placement Units was added to the proceeds from the IPO to be held in the Trust Account such
that $230,000,000 is held in the Trust Account. If we do not complete our initial Business Combination within the Completion Window, the
Private Placement Warrants underlying the Private Placement Units will expire worthless.
Administrative Services
Agreement
We entered into an Administrative
Services Agreement with our Sponsor in connection with the IPO. Pursuant to the terms of that agreement, we agreed to pay our Sponsor
$25,000 per month for office space, secretarial, administrative and support services provided to us and members of our management team.
Upon completion of our initial Business Combination or our liquidation, we will cease paying these monthly fees.
No compensation of any kind,
including finders and consulting fees, will be paid by the Company to our Sponsor, executive officers and directors, or any of
their respective affiliates, for services rendered prior to or in connection with the completion of an initial Business Combination without
shareholder approval. However, these individuals will be reimbursed for any out-of-pocket expenses incurred in connection with activities
on our behalf such as identifying potential target businesses and performing due diligence on suitable Business Combinations. Our audit
committee will review on a quarterly basis all payments that were made to our Sponsor, officers, directors or our or their affiliates.
Promissory Note
On July 18, 2025, the Sponsor
agreed to loan the Company up to $500,000 pursuant to a promissory note (the Note). The Note is non-interest bearing, unsecured
and due on the earlier of December 31, 2025 or the closing of the Initial Public Offering. At December 31, 2025, there are no amounts
outstanding and no further borrowings are permitted under the Note.
73
Working Capital Loans
In addition, in order to finance
transaction costs in connection with an intended initial Business Combination, our Sponsor or an affiliate of our Sponsor or certain of
our officers and directors may, but are not obligated to, loan us funds as may be required on a non-interest basis. If we complete an
initial Business Combination, we would repay such loaned amounts. In the event that the initial Business Combination does not close, we
may use a portion of the working capital held outside the Trust Account to repay such loaned amounts but no proceeds from our Trust Account
would be used for such repayment. Up to $1,500,000 of such loans may be convertible into Private Placement Units at a price of $10.00
per unit, at the option of the lender. The units would be identical to the Private Placement Units, including as to exercisability and
exercise price. Except as set forth above, the terms of such loans, if any, have not been determined and no written agreements exist with
respect to such loans. Prior to the completion of our initial Business Combination, we do not expect to seek loans from parties other
than our Sponsor or an affiliate of our Sponsor as we do not believe third parties will be willing to loan such funds and provide a waiver
against any and all rights to seek access to funds in our Trust Account. Except for the foregoing, the terms of such working capital loans,
if any, have not been determined and no written agreements exist with respect to such loans. As of December 31, 2025, the Company had
no borrowings under the working capital loans.
Any of the foregoing payments
to our Sponsor, repayments of loans from our Sponsor or repayments of working capital loans prior to our initial Business Combination
will be made using funds held outside the Trust Account.
After our initial Business
Combination, members of our management team who remain with us may be paid consulting, management or other fees from the combined company
with any and all amounts being fully disclosed to our shareholders, to the extent then known, in the proxy solicitation or tender offer
materials, as applicable, furnished to our shareholders. It is unlikely the amount of such compensation will be known at the time of distribution
of such tender offer materials or at the time of a shareholder meeting held to consider our initial Business Combination, as applicable,
as it will be up to the directors of the post-combination business to determine executive and director compensation.
Registration Rights
Agreement
The holders of Founder Shares,
Private Placement Units, including from time to time the Public Shares, Private Placement Units that may be issued upon conversion of
working capital loans, any Class A Ordinary Shares or Private Placement Warrants included in Private Placement Units, any Class A Ordinary
Shares issuable upon conversion of Founder Shares or upon exercise of warrants they may hold or acquire, and any warrants, including Private
Placement Warrants, that they may hold or acquire, will be entitled to registration rights pursuant to a registration rights agreement
signed upon the consummation of the Initial Public Offering. These holders will be entitled to certain demand and piggyback
registration rights. We will bear the expenses incurred in connection with the filing of any such registration statements.
**
*Consulting Agreement*
On January 15, 2026, the Company engaged Kevin Gottfredson, a family
member of our Chief Executive Officer, to provide management and consulting services in connection with our search for a potential Business
Combination target. Under the engagement, the Company agreed to pay a $37,500 engagement fee and a recurring fee of $12,500 per month
for up to 24 months, and the contract was reviewed and approved in advance by the Audit Committee. Fees paid to Mr. Gottfredson totaled
$0 in 2025.
74
Item 14. Principal Accounting Fees and Services.
The firm of MaloneBailey,
LLP (Malone) acts as our independent registered public accounting firm. The following is a summary of fees paid to Malone
for services rendered.
Audit Fees
Audit fees consist of fees for professional services rendered for the
audit of our year-end financial statements and services that are normally provided by Malone in connection with regulatory filings. The
aggregate fees of Malone for professional services rendered for the audit of our annual financial statements, review of the financial
information included in our Forms 10-Q for the respective periods and other required filings with the SEC for the period from June 27,
2025 (inception) through December 31, 2025 totaled approximately $97,850. The above amounts include interim procedures and audit fees.
Audit-Related Fees
Audit-related fees consist
of fees billed for assurance and related services that are reasonably related to performance of the audit or review of our financial statements
and are not reported under *Audit Fees*. These services include attest services that are not required by statute or
regulation and consultations concerning financial accounting and reporting standards. We did not pay Malone for any audit-related fees
for the period from June 27, 2025 (inception) through December 31, 2025.
Tax Fees
Tax fees consist of fees billed
for professional services relating to tax compliance, tax planning and tax advice.We did not pay Malone for tax services, planning
or advice for the period June 27, 2025 (inception) through December 31, 2025.
All Other Fees
All other fees consist of
fees billed for all other services. We did not pay Malone for any other services for the period from June 27, 2025 (inception) through
December 31, 2025.
Pre-Approval Policy
Our audit committee was formed
upon the consummation of our Initial Public Offering. As a result, the audit committee did not pre-approve all of the foregoing services,
although any services rendered prior to the formation of our audit committee were approved by our Board of Directors. Since the formation
of our audit committee, and on a going-forward basis, the audit committee has and will pre-approve all auditing services and permitted
non-audit services performed and to be performed for us by our auditors, including the fees and terms thereof (subject to the de minimis
exceptions for non-audit services described in the Exchange Act which are approved by the audit committee prior to the completion of the
audit).
75
Part
IV
Item 15. Exhibits, Financial Statement Schedules.
(a) The
following documents are filed as part of this Form 10-K:
|
1. |
Financial Statements: See Index to Financial Statements at Item 8. Financial Statements and Supplementary
Data herein. | |
(b) Financial
Statement Schedules. All financial statement schedules are omitted for the reason that the information is included in the financial statements
or the notes thereto or that they are not required or are not applicable.
(c) Exhibits:
The exhibits listed in the Exhibit Index below are filed or incorporated by reference as part of this Form 10-K.
Exhibit Index
|
Number |
|
Description |
|
|
3.1 |
|
Amended and Restated Memorandum and Articles of Incorporation (incorporated by reference to Exhibit 3.1 to the Registrants Current Report on Form 8-K (File No. 001-42991), filed with the SEC on December 8, 2025). |
|
|
4.1 |
|
Specimen Unit Certificate (incorporated by reference to Exhibit 4.1 to the Registrants Registration Statement on Form S-1 (File No. 333-291300), filed with the SEC on November 6, 2025). |
|
|
4.2 |
|
Specimen Class A Ordinary Shares Certificate (incorporated by reference to Exhibit 4.2 to the Registrants Registration Statement on Form S-1 (File No. 333-291300), filed with the SEC on November 6, 2025). |
|
|
4.3 |
|
Specimen Warrant Certificate (incorporated by reference to Exhibit 4.3 to the Registrants Registration Statement on Form S-1 (File No. 333-291300), filed with the SEC on November 6, 2025). |
|
|
4.4 |
|
Warrant Agreement, dated December 3, 2025, by and between the Registrant and Continental Stock Transfer & Trust Company, as warrant agent (incorporated by reference to Exhibit 4.1 to the Registrants Current Report on Form 8-K (File No. 001-42991), filed with the SEC on December 8, 2025). |
|
|
4.5* |
|
Description of Securities. |
|
|
10.1 |
|
Letter Agreement, dated December 3, 2025, by and among the Registrant, Safeguard Acquisition Management LLC and each of the executive officers and directors of Registrant (incorporated by reference to Exhibit 10.1 to the Registrants Current Report on Form 8-K (File No. 001-42991), filed with the SEC on December 8, 2025). |
|
|
10.2 |
|
Investment Management Trust Agreement, dated December 3, 2025, by and between the Registrant and Continental Stock Transfer & Trust Company, as trustee (incorporated by reference to Exhibit 10.2 to the Registrants Current Report on Form 8-K (File No. 001-42991), filed with the SEC on December 8, 2025). |
|
|
10.3 |
|
Registration Rights Agreement, dated December 3, 2025, by and among the Registrant, Safeguard Acquisition Management LLC and the other holders party thereto (incorporated by reference to Exhibit 10.3 to the Registrants Current Report on Form 8-K (File No. 001-42991), filed with the SEC on December 8, 2025). |
|
|
10.4 |
|
Private Placement Units Purchase Agreement, dated December 3, 2025, by and between the Registrant and Safeguard Acquisition Management LLC (incorporated by reference to Exhibit 10.4 to the Registrants Current Report on Form 8-K (File No. 001-42991), filed with the SEC on December 8, 2025). |
|
|
10.5 |
|
Private Placement Units Purchase Agreement, dated December 3, 2025, by and between the Company, Jefferies LLC (incorporated by reference to Exhibit 10.5 to the Registrants Current Report on Form 8-K (File No. 001-42991), filed with the SEC on December 8, 2025). |
|
|
10.6 |
|
Form of Indemnity Agreement (incorporated by reference to Exhibit 10.6 to the Registrants Registration Statement on Form S-1 (File No. 333-291300), filed with the SEC on November 6, 2025). |
|
|
10.7 |
|
Administrative Services Agreement, dated December 3, 2025, by and between the Company and Safeguard Acquisition Management LLC (incorporated by reference to Exhibit 10.6 to the Registrants Current Report on Form 8-K (File No. 001-42991), filed with the SEC on December 8, 2025). |
|
|
10.8 |
|
Promissory Note, dated July 18, 2025, issued to Safeguard Acquisition Management LLC (incorporated by reference to Exhibit 10.7 to the Registrants Registration Statement on Form S-1 (File No. 333-291300), filed with the SEC on November 6, 2025). |
|
|
10.9 |
|
Securities Subscription Agreement, dated July 18, 2025, between Safeguard Acquisition Management LLC and the Registrant (incorporated by reference to Exhibit 10.8 to the Registrants Registration Statement on Form S-1 (File No. 333-291300), filed with the SEC on November 6, 2025). |
|
|
10.10*+ |
|
Officer Agreement, dated February 20, 2026, between the Registrant, Right Advisory LLC and Robert M. Tarola. | |
|
14.1 |
|
Form of Code of Business Conduct and Ethics (incorporated by reference to Exhibit 14.1 to the Registrants Registration Statement on Form S-1 (File No. 333-291300), filed with the SEC on November 6, 2025). |
|
76
|
19* |
|
Insider Trading Policy. |
|
|
24.1* |
|
Power of Attorney (included on the signature pages herein). |
|
|
31.1* |
|
Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
|
|
31.2* |
|
Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
|
|
32.1** |
|
Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
|
|
32.2** |
|
Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
|
|
97.1* |
|
Policy relating to the recovery of erroneously awarded compensation. |
|
|
101.INS |
|
Inline XBRL Instance Document |
|
|
101.SCH |
|
Inline XBRL Taxonomy Extension Schema Document |
|
|
101.CAL |
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document |
|
|
101.DEF |
|
Inline XBRL Taxonomy Extension Definition Linkbase Document |
|
|
101.LAB |
|
Inline XBRL Taxonomy Extension Label Linkbase Document |
|
|
101.PRE |
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document |
|
|
104 |
|
Cover Page Interactive Data File (Embedded within the Inline XBRL document and included in Exhibit) |
|
|
* | Filed herewith. |
|
|
** |
Furnished herewith. | |
|
|
| |
|
+ |
Management contract or compensatory plan or arrangement. | |
Item 16. Form 10-K Summary
None.
77
SIGNATURES
Pursuant to the requirements
of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Form 10-K to be signed
on its behalf by the undersigned, thereunto duly authorized.
|
|
SAFEGUARD ACQUISITION CORP. | |
|
|
|
| |
|
|
By: |
/s/ Mark Gottfredson | |
|
|
Name: |
Mark Gottfredson | |
|
|
Title: |
Chief Executive Officer and Director | |
|
|
|
(Principal executive officer) | |
|
|
| |
|
Dated: March 4, 2026 |
| |
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE
PRESENTS, that each person whose signature appears below constitutes and appoints Mark Gottfredson, Robert M. Tarola and Frank Bachinsky,
and each or any one of them, his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him
and in his name, place and stead, in any and all capacities, to sign any and all amendments to this Form 10-K, and to file the same, with
all exhibits thereto, and other documents in connection therewith, with the United States Securities and Exchange Commission, granting
unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite
and necessary to be done in connection therewith, as fully to all intents and purposes as he or she might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or his or her substitutes or substitute, may lawfully
do or cause to be done by virtue hereof.
Pursuant to the requirements
of the Securities Act of 1933, as amended, this Form 10-K has been signed below by the following persons on behalf of the Registrant in
the capacities and on the dates indicated.
|
Name |
|
Title |
|
Date | |
|
|
|
|
|
| |
|
/s/ Mark Gottfredson |
|
Chief Executive Officer and Director |
|
March 4, 2026 | |
|
Mark Gottfredson |
|
(Principal Executive Officer) |
|
| |
|
|
|
|
|
| |
|
/s/ Robert M. Tarola |
|
Chief Financial Officer and Director |
|
March 4, 2026 | |
|
Robert M. Tarola |
|
(Principal Financial and Accounting Officer) |
|
| |
|
|
|
|
|
| |
|
/s/ Frank Bachinsky |
|
Chief Operating Officer and Director |
|
March 4, 2026 | |
|
Frank Bachinsky |
|
|
|
| |
|
|
|
|
|
| |
|
/s/ Dan Crowley |
|
Director |
|
March 4, 2026 | |
|
Dan Crowley |
|
|
|
| |
|
|
|
|
|
| |
|
/s/ Bruce Carlson |
|
Director |
|
March 4, 2026 | |
|
Bruce Carlson |
|
|
|
| |
|
|
|
|
|
| |
|
/s/ Richard Newton |
|
Director |
|
March 4, 2026 | |
|
Richard Newton |
|
|
|
| |
|
|
|
|
|
| |
|
/s/ Lee Stern |
|
Director |
|
March 4, 2026 | |
|
Lee Stern |
|
|
|
| |
78
ACQUISITION CORP.
INDEX TO FINANCIAL STATEMENTS
| Report of Independent Registered Public Accounting Firm (PCAOB ID Number 206) | F-2 | |
| Financial Statements: | | |
| Balance Sheet as of December 31, 2025 | F-3 | |
| Statement of Operations for the Period from June 27, 2025 (Inception) Through December 31, 2025 | F-4 | |
| Statement of Changes in Shareholders Deficit for the Period from June 27, 2025 (Inception) Through December 31, 2025 | F-5 | |
| Statement of Cash Flows for the Period from June 27, 2025 (Inception) Through December 31, 2025 | F-6 | |
| Notes to Financial Statements | F-7 to F-21 | |
F-1
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and Board of Directors of
Safeguard Acquisition Corp.
*Opinion on the Financial Statements*
We have audited the accompanying balance sheet of Safeguard Acquisition Corp. (the Company) as of December 31, 2025, and the related statements of operations, changes in shareholders deficit, and cash flows for the period from June 27, 2025 (inception) through December 31, 2025, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025, and the results of its operations and its cash flows for the period from June 27, 2025 (inception) through December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.
*Basis for Opinion*
**
These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on the Companys financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.
Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.
*/s/ MaloneBailey, LLP*
www.malonebailey.com
We have served as the Company's auditor since 2025.
Houston, Texas
March 3, 2026
F-2
SAFEGUARD ACQUISITION CORP.
BALANCE SHEET
DECEMBER31, 2025
|
Assets: | |
| | |
|
Current assets | |
| | |
| Cash | | $ | 1,634,631 | | |
| Prepaid expenses | | | 16,281 | | |
| Prepaid insurance short term | | | 67,508 | | |
| Total current assets | | | 1,718,420 | | |
| Prepaid insurance long term | | | 62,426 | | |
| Cash and investments held in Trust Account | | | 230,526,196 | | |
| Total Assets | | $ | 232,307,042 | | |
|
| |
| | | |
|
Liabilities, Class A Ordinary Shares Subject to Possible Redemption, and Shareholders Deficit | |
| | | |
|
Liabilities: | |
| | | |
|
Current liabilities | |
| | | |
| Accrued offering costs | | $ | 85,000 | | |
| Accounts payable and accrued expenses | | | 23,949 | | |
| Total current liabilities | | | 108,949 | | |
| Deferred underwriting fee | | | 9,200,000 | | |
| Total Liabilities | | | 9,308,949 | | |
|
| |
| | | |
| Commitments and Contingencies (Note 5) | | | | | |
| Class A Ordinary Shares subject to possible redemption, $0.0001 par value; 23,000,000 shares at redemption value of $10.02 per share | | | 230,526,196 | | |
|
| |
| | | |
|
Shareholders Deficit | |
| | | |
| Preference shares, $0.0001 par value; 5,000,000 shares authorized; none issued or outstanding | | | | | |
| Class A Ordinary Shares, $0.0001 par value; 500,000,000 shares authorized; 700,000 issued and outstanding (excluding 23,000,000 shares subject to possible redemption) | | | 70 | | |
| Class B ordinary shares, $0.0001 par value; 50,000,000 shares authorized; 7,666,667 shares issued and outstanding | | | 767 | | |
| Additional paid-in capital | | | | | |
| Accumulated deficit | | | (7,528,940 | ) | |
| Total Shareholders Deficit | | | (7,528,103 | ) | |
| Total Liabilities, Class A Ordinary Shares Subject to Possible Redemption, and Shareholders Deficit | | $ | 232,307,042 | | |
The accompanying notes are an integral part of
the financial statements.
F-3
SAFEGUARD ACQUISITION CORP.
STATEMENT OF OPERATIONS
FOR THE PERIOD FROM JUNE 27, 2025 (INCEPTION)
THROUGH DECEMBER 31, 2025
| Formation, general, and administrative costs | | $ | 192,631 | | |
| Loss from Operations | | | (192,631 | ) | |
|
| |
| | | |
|
Other income: | |
| | | |
| Interest earned on cash and investments held in Trust Account | | | 526,196 | | |
| Total other income | | | 526,196 | | |
|
| |
| | | |
| Net income | | $ | 333,565 | | |
|
| |
| | | |
| Basic weighted average shares outstanding, Class A Ordinary Shares | | | 3,303,191 | | |
| Basic net income per share, Class A Ordinary Shares | | $ | 0.04 | | |
| Diluted weighted average shares outstanding, Class A Ordinary Shares | | | 3,303,191 | | |
| Diluted net income per share, Class A Ordinary Shares | | $ | 0.03 | | |
| Basic weighted average shares outstanding, Class B ordinary shares(1) | | | 6,065,603 | | |
| Basic net income per share, Class B ordinary shares | | $ | 0.04 | | |
| Diluted weighted average shares outstanding, Class B ordinary shares(1) | | | 7,666,667 | | |
| Diluted net income per share, Class B ordinary shares | | $ | 0.03 | | |
| (1) | Includes an aggregate of up to 1,000,000 ClassB ordinary shares subject to forfeiture by the holders thereof depending on the extent to which the underwriters over-allotment option was exercised (Note5). On December 5, 2025, the Company consummated its Initial Public Offering and sold 23,000,000 Units, including 3,000,000 Units sold pursuant to the full exercise of the underwriters option to purchase additional units to cover the over-allotment; hence, the 1,000,000 Class B ordinary shares were no longer subject to forfeiture. | |
The accompanying notes are an integral part of
the financial statements.
F-4
SAFEGUARD ACQUISITION CORP.
STATEMENT OF CHANGES IN SHAREHOLDERS
DEFICIT
FOR THE PERIOD FROM JUNE 27, 2025 (INCEPTION)
THROUGH DECEMBER 31, 2025
|
| |
Class A Ordinary Shares | | |
Class B Ordinary Shares | | |
Additional Paid-in | | |
Accumulated | | |
Total Shareholders | | |
|
| |
Shares | | |
Amount | | |
Shares | | |
Amount | | |
Capital | | |
Deficit | | |
Deficit | | |
| Balance June 27, 2025 (inception) | | | | | | $ | | | | | | | | $ | | | | $ | | | | $ | | | | $ | | | |
|
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| Class B ordinary shares to Sponsor (1) | | | | | | | | | | | 7,666,667 | | | | 767 | | | | 24,233 | | | | | | | | 25,000 | | |
|
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| Accretion of Class A Ordinary Shares carrying value to redemption value | | | | | | | | | | | | | | | | | | | (12,183,355 | ) | | | (7,336,309 | ) | | | (19,519,664 | ) | |
|
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| Subsequent remeasurement of Class A Ordinary Shares subject to redemption | | | | | | | | | | | | | | | | | | | | | | | (526,196 | ) | | | (526,196 | ) | |
|
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| Sale of Private Placement Units | | | 700,000 | | | | 70 | | | | | | | | | | | | 6,999,930 | | | | | | | | 7,000,000 | | |
|
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| Fair Value of Public Warrants at issuance | | | | | | | | | | | | | | | | | | | 5,520,000 | | | | | | | | 5,520,000 | | |
|
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| Allocated value of transaction costs to Class A shares | | | | | | | | | | | | | | | | | | | (360,808 | ) | | | | | | | (360,808 | ) | |
|
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| Net income | | | | | | | | | | | | | | | | | | | | | | | 333,565 | | | | 333,565 | | |
|
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| Balance December 31, 2025 | | | 700,000 | | | $ | 70 | | | | 7,666,667 | | | $ | 767 | | | $ | | | | $ | (7,528,940 | ) | | $ | (7,528,103 | ) | |
| (1) | Includes an aggregate of up to 1,000,000 ClassB ordinary shares subject to forfeiture by the holders thereof depending on the extent to which the underwriters over-allotment option was exercised (Note5). On December 5, 2025, the Company consummated its Initial Public Offering and sold 23,000,000 Units, including 3,000,000 Units sold pursuant to the full exercise of the underwriters option to purchase additional units to cover the over-allotment; hence, the 1,000,000 Class B ordinary shares were no longer subject to forfeiture. | |
The accompanying notes are an integral part of
the financial statements.
F-5
SAFEGUARD ACQUISITION CORP.
STATEMENT OF CASH FLOWS
FOR THE PERIOD FROM JUNE 27, 2025 (INCEPTION)
THROUGH DECEMBER 31, 2025
|
Cash Flows from Operating Activities: | |
| | |
| Net income | | $ | 333,565 | | |
|
Adjustments to reconcile net income to net cash used in operating activities: | |
| | | |
| Payment of general and administrative costs through promissory note related party | | | 27,594 | | |
| Interest earned on cash and investments held in Trust Account | | | (526,196 | ) | |
|
Changes in operating assets and liabilities: | |
| | | |
| Prepaid expenses | | | (16,281 | ) | |
| Prepaid insurance short term | | | (67,508 | ) | |
| Prepaid insurance long term | | | (62,426 | ) | |
| Accounts payable and accrued expenses | | | 23,949 | | |
| Net cash used in operating activities | | | (287,303 | ) | |
|
| |
| | | |
|
Cash Flows from Investing Activities: | |
| | | |
| Investment of cash in Trust Account | | | (230,000,000 | ) | |
| Net cash used in investing activities | | | (230,000,000 | ) | |
|
| |
| | | |
|
Cash Flows from Financing Activities: | |
| | | |
| Proceeds from sale of Units, net of underwriting discounts paid | | | 225,400,000 | | |
| Proceeds from sale of Private Placement Units | | | 7,000,000 | | |
| Repayment of promissory note - related party | | | (133,462 | ) | |
| Payments of offering costs | | | (344,604 | ) | |
| Net cash provided by financing activities | | | 231,921,934 | | |
|
| |
| | | |
| Net Change in Cash | | | 1,634,631 | | |
| Cash - Beginning of period | | | | | |
| Cash - End of period | | $ | 1,634,631 | | |
|
| |
| | | |
|
Non-Cash Investing and Financing Activities: | |
| | | |
| Offering costs included in accrued offering costs | | $ | 85,000 | | |
| Issuance of founder shares in exchange for payment of offering costs | | $ | 25,000 | | |
| Offering costs paid through promissory note - related party | | $ | 105,868 | | |
| Deferred underwriting fee payable | | $ | 9,200,000 | | |
| Accretion of Class A ordinary shares carrying value to redemption value | | $ | 19,519,664 | | |
| Subsequent remeasurement of Class A ordinary shares subject to redemption | | $ | 526,196 | | |
The accompanying notes are an integral part of
the financial statements.
F-6
Note1 Description of Organization and Business Operations
Safeguard Acquisition Corp. (the Company) is a newly organized blank check company incorporated as a Cayman Islands exempted company and formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar Business Combination with one or more businesses or entities (the Business Combination). The Company has not selected any specific Business Combination target and the Company has not, nor has anyone on its behalf, engaged in any substantive discussions, directly or indirectly, with any Business Combination target with respect to an initial Business Combination with the Company. The Company is an emerging growth company and, as such, the Company is subject to all of the risks associated with emerging growth companies.
As of December31, 2025, the Company had not commenced any operations. All activity for the period from June27, 2025 (inception) through December31, 2025 relates to the Companys formation, initial public offering (the Initial Public Offering), which is described below, and subsequent to the Initial Public Offering, identifying a target company for a Business Combination. The Company will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest. The Company will generate non-operating income in the form of interest income on proceeds derived from the Initial Public Offering. The Company has selected December31 as its fiscal year end.
The Companys Sponsor is Safeguard Acquisition Management LLC, a Delaware limited liability company (the Sponsor). The registration statement for the Companys Initial Public Offering became effective on November 26, 2025. On December 5, 2025, the Company consummated the Initial Public Offering of 23,000,000 units (each a Public Unit and together, the Public Units), which includes the full exercise by the underwriters of their over-allotment option of 3,000,000 Public Units, at $10.00 per unit, generating gross proceeds of $230,000,000. Each Public Unit consists of one Class A ordinary share and one-half of one redeemable warrant (each a Public Warrant and collectively, the Public Warrants). Each whole Public Warrant entitles the holder thereof to purchase one Class A ordinary share at a price of $11.50 per share, subject to adjustment.
Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of an aggregate of 700,000 Private Placement Units (each a Private Placement Unit, collectively the Private Placement Units) at a price of $10.00 per Private Placement Unit, generating gross proceeds of $7,000,000. Each Private Placement Unit consists of one Class A ordinary share and one-half of one redeemable warrant (each a Private Placement Warrant and collectively, the Private Placement Warrants). Of those 700,000 Private Placement Units, the Sponsor purchased 470,000 Private Placement Units, and the underwriters purchased 230,000 Private Placement Units.
Transaction costs amounted to $14,360,472, consisting of $4,600,000 of cash underwriting fee, $9,200,000 of deferred underwriting fee, and $560,472 of other offering costs.
The Companys management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering and the sale of Private Placement Units, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. There is no assurance that the Company will be able to complete a Business Combination successfully. The Company must complete one or more initial Business Combinations having an aggregate fair market value of at least 80% of the net assets held in the Trust Account (as defined below) (excluding the amount of deferred underwriting commissions and taxes payable on the interest earned on the Trust Account) at the time of the signing of the agreement to enter into the initial Business Combination. However, the Company will only complete a Business Combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Actof1940, as amended (the Investment Company Act).
Following the closing of the Initial Public Offering, on December 5, 2025, an amount of $230,000,000 ($10.00 per Public Unit) from the net proceeds of the sale of the Public Units and the Private Placement Units was placed in the Trust Account (the Trust Account), with U.S. based, Continental Stock Transfer & Trust Company, acting as trustee, and will be held in cash, including in demand deposit accounts at a bank, or invested only in UnitedStates government securities within the meaning of Section2(a)(16)of the Investment Company Act having a maturity of 185days or less or in money market funds meeting certain conditions under Rule2a-7 promulgated under the Investment Company Act which invest only in direct U.S.government treasury obligations, until the earlier of: (i)the completion of a Business Combination and (ii)the distribution of the Trust Account.
F-7
The Company will provide the holders (the Public Shareholders) of Public Units, with the opportunity to redeem all or a portion of the Class A Ordinary Shares underlying their Public Units (the Public Shares) upon the completion of a Business Combination either (i)in connection with a shareholder meeting called to approve the Business Combination or (ii)by means of a tender offer. The decision as to whether the Company will seek shareholder approval of a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The Public Shareholders will be entitled to redeem their Public Shares for a pro rata portion of the amount held in the Trust Account at $10.02 per Public Share as of December 31, 2025, inclusive of any pro rata interest earned on the funds held in the Trust Account and not previously released to the Company. The per-share amount to be distributed to Public Shareholders who redeem their Public Shares will not be reduced by the deferred underwriting commissions the Company will pay to the underwriters (as discussed in Note5).
Upon the public announcement of the initial Business Combination, if the Company elects to conduct redemptions pursuant to the tender offer rules, the Company and the Sponsor will terminate any plan established in accordance with Rule10b5-1 to purchase the Class A Ordinary Shares in the open market, in order to comply with Rule14e-5 under the Securities ExchangeActof1934, as amended (the ExchangeAct). In the event the Company conducts redemptions pursuant to the tender offer rules, the offer to redeem will remain open for at least 20business days, in accordance with Rule14e-1(a)under the ExchangeAct, and the Company will not be permitted to complete the initial Business Combination until the expiration of the tender offer period. In addition, the tender offer will be conditioned on Public Shareholders not tendering more than the number of Public Shares the Company is permitted to redeem. If Public Shareholders tender more shares than the Company has offered to purchase, the Company will withdraw the tender offer and not complete such initial Business Combination.
Notwithstanding the foregoing, if the Company seeks shareholder approval of its Business Combination and does not conduct redemptions in connection with its Business Combination pursuant to the tender offer rules, the amended and restated memorandum and articles of association provides that a Public Shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a group (as defined under Section13 of the ExchangeAct), will be restricted from redeeming its Public Shares with respect to more than an aggregate of 15% of the Public Shares issued in the Initial Public Offering, without the prior consent of the Company.
The Sponsor and the Companys officers and directors (the initial shareholders) have agreed not to propose an amendment to the amended and restated memorandum and articles of association (a)that would modify the substance or timing of the Companys obligation to provide Public Shareholders the right to have their shares redeemed or repurchased in connection with a Business Combination or to redeem 100% of the Companys Public Shares if the Company does not complete its Business Combination within 24months from the closing of the Initial Public Offering (the Completion Window) or (b)with respect to any other provision relating to the rights of Public Shareholders, unless the Company provides the Public Shareholders with the opportunity to redeem their Class A Ordinary Shares in conjunction with any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account (which interest shall be net of taxes paid or payable (which shall exclude the 1% U.S. federal excise tax that was implemented by the Inflation Reduction Act of 2022 if any is imposed on us)), divided by the number of the then-outstanding Public Shares.
If the Company has not completed a Business Combination within the Completion Window, the Company will (i)as promptly as reasonably possible but not more than tenbusiness days thereafter, redeem the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account which interest shall be net of taxes paid or payable and up to $100,000 of interest to pay liquidation expenses), divided by the number of the then-outstanding Public Shares, which redemption will completely extinguish Public Shareholders rights as shareholders (including the right to receive further liquidation distributions, if any); and (ii)as promptly as reasonably possible following such redemption, subject to the approval of the remaining shareholders and the board of directors, liquidate, subject the Companys obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to the Companys warrants, which will expire worthless if the Company does not consummate an initial Business Combination within the Completion Window.
F-8
The initial shareholders have agreed to waive their liquidation rights with respect to the Founder Shares (as defined below) and Class A Ordinary Shares included in the Private Placement Unitsif the Company fails to complete a Business Combination within the Combination Period. However, if the initial shareholders acquire Public Shares in or after the Initial Public Offering, they will be entitled to liquidating distributions from the Trust Account with respect to such Public Shares if the Company fails to complete a Business Combination within the Combination Period. The underwriters have agreed to waive their rights to their deferred underwriting commission (see Note5) held in the Trust Account in the event the Company does not complete a Business Combination within the Combination Period and, in such event, such amounts will be included with the other funds held in the Trust Account that will be available to fund the redemption of the Public Shares.
In the event of such distribution, it is possible that the per share value of the assets remaining available for distribution (including Trust Account assets) will be only $10.00 per share initially held in the Trust Account. In order to protect the amounts held in the Trust Account, the Sponsor has agreed to be liable to the Company if and to the extent any claims by a third party (excluding the Companys independent registered public accounting firm) for services rendered or products sold to the Company, or a prospective target business with which the Company has entered into a written letter of intent, confidentially or other similar agreement or Business Combination agreement, reduce the amount of funds in the Trust Account to below the lesser of (i)$10.00 per Public Share and (ii)the actual amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account if less than $10.00 per Public Share due to reductions in the value of the trust assets. This liability will not apply with respect to any claims by a third party who executed a waiver of any right, title, interest or claim of any kind in or to any monies held in the Trust Account or to any claims under the Companys indemnity of the underwriters of the Initial Public Offering against certain liabilities, including liabilities under the Securities Act.
Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third-party claims. The Sponsor has not made reserves for such indemnification obligations, nor has the Company independently verified whether the Sponsor has sufficient funds to satisfy its indemnity obligations and the Company believes that the Sponsors only assets are securities of the Company. Therefore, the Sponsor may not be able to satisfy those obligations. The Company will seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers (excluding the Companys independent registered public accounting firm), prospective target businesses or other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.
*Liquidity and Capital Resources*
At December 31, 2025, the Company had $1,634,631 cash and a working capital of $1,609,471. The Company has incurred and expects to continue to incur significant costs in pursuit of its financing and acquisition plans. In connection with the Companys assessment of going concern considerations in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC)205-40, *Financial Statements Presentation Going Concern* management has determined that the Company does not believe it will need to raise additional funds in order to meet the expenditures required to operate its business. However, if the estimate of the costs of identifying a target business, undertaking in-depth due diligence and negotiating a Business Combination are less than the actual amount necessary to do so, the Company may have insufficient funds available to operate its business prior to the initial Business Combination. Management has determined that upon the consummation of the Initial Public Offering and the sale of the Private Placement Units, the Company has sufficient funds to finance the working capital needs of the Company within one year from the date of issuance of the financial statement.
F-9
Note2 Basis of Presentation and Summary of Significant Accounting Policies
**
*Basis of Presentation*
The accompanying financial statements are presented in U.S. dollars and have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) and pursuant to the accounting and disclosure rules and regulations of the Securities and Exchange Commission (the SEC).
*Emerging Growth Company*
The Company is an emerging growth company, as defined in Section2(a)of the Securities Act, as modified by the Jumpstart Our Business Startups Actof2012 (the JOBS Act), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.
Further, Section102(b)(1)of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the ExchangeAct) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that an emerging growth company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Companys financial statement with another public company that is neither an emerging growth company nor an emerging growth company that has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
*Use of Estimates*
**
The preparation of this financial statement in conformity with U.S.GAAP requires the Companys management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statement. Actual results could differ from those estimates.
*Cash and Cash Equivalents*
The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company had cash of $1,634,631 and did not have any cash equivalent as of December 31, 2025.
*Cash and Investments Held in Trust Account*
**
On December 8, 2025 the Company directed the funds in the Trust Account to be deposited in three and six month treasury bill securities.
**
As of December 31, 2025, the assets held in the Trust Account, amounted to $230,526,196. The Company classifies its U.S. Treasury and equivalent securities as held-to-maturity in accordance with ASC Topic 320, *Investments - Debt and Equity Securities*. Held-to-maturity securities are those securities which the Company has the ability and intent to hold until maturity. Held-to-maturity treasury securities are recorded at amortized cost on the accompanying balance sheets and adjusted for the amortization or accretion of premiums or discounts. When the Companys investments held in the Trust Account are comprised of money market securities, the investments are classified as trading securities. Gains and losses resulting from the change in fair value of these securities is included in interest earned on cash and investments held in the Trust Account in the accompanying statement of operations. The estimated fair values of investments held in the Trust Account are determined using available market information.
F-10
*Concentration of Credit Risk*
Financial instruments that potentially subject the Company to concentrations of credit risk consist of a cash account in a financial institution, which, at times, may exceed the Federal Deposit Insurance Corporation coverage limit of $250,000. Any loss incurred or a lack of access to such funds could have a significant adverse impact on the Companys financial condition, results of operations, and cash flows. As of December 31, 2025, the Company has not experienced losses on these accounts.
**
*Offering Costs*
The Company complies with the requirements of the ASC340-10-S99 and SEC Staff Accounting Bulletin Topic5A*Expenses of Offering*. Deferred offering costs consist principally of professional and registration fees that are related to the Initial Public Offering. FASB ASC470-20, *Debt with Conversion and Other Options*, addresses the allocation of proceeds from the issuance of convertible debt into its equity and debt components. The Company applies this guidance to allocate Initial Public Offering proceeds from the Public Unitsbetween Class A Ordinary Shares and warrants, using the residual method by allocating Initial Public Offering proceeds first to assigned value of the warrants and then to the Class A Ordinary Shares. Offering costs allocated to the Class A Ordinary Shares are charged to temporary equity, offering costs allocated to the Public Warrants and Private Placement Warrants are charged to shareholders equity, and Public Warrants and Private Placement Warrants after managements evaluation are accounted for under equity treatment.
*Fair Value of Financial Instruments*
The fair value of the Companys assets and liabilities, which qualify as financial instruments under FASB ASC820, *Fair Value Measurements and Disclosures*, approximates the carrying amounts represented in the balance sheet, primarily due to its short-term nature.
*Income Taxes*
The Company follows the asset and liability method of accounting for income taxes under FASB ASC Topic740, *Income Taxes* (ASC 740) Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in theyears in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The Companys management determined that the Cayman Islands is the Companys major tax jurisdiction. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. As of December31, 2025, there were no unrecognized tax benefits and no amounts accrued for interest and penalties. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position.
F-11
The Company is considered to be an exempted Cayman Islands company with no connection to any other taxable jurisdiction and is presently not subject to income taxes or income tax filing requirements in the Cayman Islands or the United States. As such, the Companys losses do not create recoverable taxes and there is no requirement for a tax provision on income.
**
*Derivative Financial Instruments*
The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with FASB ASC Topic815, *Derivatives and Hedging*. (ASC 815) For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value on the grant date and is then re-valued at each reporting date, with changes in the fair value reported in the statement of operations. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative liabilities are classified in the balance sheet as current or non-current based on whether or not net cash settlement or conversion of the instrument could be required within 12months of the balance sheet date. The underwriters over-allotment option is deemed to be a freestanding financial instrument indexed on the contingently redeemable shares and will be accounted for as a liability pursuant to ASC480-10-S99 (ASC 480) if not fully exercised at the time of the Initial Public Offering. As such, as of December 31, 2025, since the underwriters exercised the over-allotment option in full, no over-allotment option liability is recognized in the Companys balance sheet.
*Warrant Instruments*
The Company accounted for the Public Warrants and Private Placement Warrants issued in connection with the Initial Public Offering and the private placement in accordance with the guidance contained in ASC 815. Accordingly, the Company evaluated and classified the warrant instruments under equity treatment at their assigned values. Such guidance provides that the warrants described above will not be precluded from equity classification. Equity-classified contracts are initially measured at fair value (or allocated value). Subsequent changes in fair value are not recognized as long as the contracts continue to be classified in equity in accordance with ASC480 and ASC815.
*Share-Based Payment Arrangements*
The Company accounts for share awards in accordance with FASB ASC 718, *CompensationStock Compensation* (ASC 718), which requires that all equity awards be accounted for at their fair value. Fair value is measured on the grant date and is equal to the underlying value of the share.
Costs equal to these fair values are recognized ratably over the requisite service period based on the number of awards that are expected to vest, in the period of grant for awards that vest immediately and have no future service condition, or in the period the awards vest immediately after meeting a performance condition becomes probable (i.e., the occurrence of a Business Combination). For awards that vest over time, cumulative adjustments in later periods are recorded to the extent actual forfeitures differ from the Companys initial estimates; previously recognized compensation cost is reversed if the service or performance conditions are not satisfied and the award is forfeited.
F-12
*Class A Ordinary Shares Subject to Possible Redemption*
The Public Shares contain a redemption feature which allows for the redemption of such Public Shares in connection with the Companys liquidation, or if there is a shareholder vote or tender offer in connection with the Companys initial Business Combination. In accordance with ASC 480, the Company classifies Public Shares subject to possible redemption outside of permanent equity as the redemption provisions are not solely within the control of the Company. The Company recognizes changes in redemption value immediately as they occur and will adjust the carrying value of redeemable shares to equal the redemption value at the end of each reporting period. Immediately upon the closing of the Initial Public Offering, the Company recognized the accretion from initial book value to redemption value. The change in the carrying value of redeemable shares will result in charges against additional paid-in capital (to the extent available) and accumulated deficit. Accordingly, as of December 31, 2025, Class A Ordinary Shares subject to possible redemption are presented at redemption value as temporary equity, outside of the shareholders deficit section of the Companys balance sheet. As of December 31, 2025, the Class A Ordinary Shares subject to possible redemption reflected in the balance sheet are reconciled in the following table:
| Gross proceeds | | $ | 230,000,000 | | |
| Less: | | | | | |
| Proceeds allocated to Public Warrants | | | (5,520,000 | ) | |
| Public Shares issuance costs | | | (13,999,664 | ) | |
| Plus: | | | | | |
| Accretion of Class A Ordinary Shares carrying value to redemption value | | | 19,519,664 | | |
| Subsequent remeasurement of Class A Ordinary Shares subject to redemption | | | 526,196 | | |
| Class A Ordinary Shares subject to possible redemption, December 31, 2025 | | $ | 230,526,196 | | |
*Net Income Per Ordinary Share*
The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, *Earnings Per Share*. Income and losses are shared pro rata to the shares. Net income per ordinary share is computed by dividing net income by the weighted average number of ordinary shares outstanding for the period. Accretion associated with the redeemable ordinary shares is excluded from income per ordinary share as the redemption value approximates fair value.
The calculation of diluted income per ordinary share does not consider the effect of the warrants issued in connection with the (i) Initial Public Offering, (ii) the exercise of the over-allotment option and (iii) Private Warrants, since the average stock price of the Companys ordinary shares for the period from June 27, 2025 (inception) through December 31, 2025 was less than the exercise price and therefore, the inclusion of such warrants under the treasury stock method would be anti-dilutive and the exercise is contingent upon the occurrence of future events. The warrants are exercisable to purchase 11,850,000 shares of ordinary shares in the aggregate. As of December 31, 2025, the Company did not have any dilutive securities or other contracts that could, potentially, be exercised or converted into ordinary shares and then share in the earnings of the Company. Founder Shares issued to the Sponsor were subject to forfeiture contingent upon the exercise of the underwriters over-allotment option. For purposes of diluted income per ordinary share, the Founder Shares are included in the denominator as of the beginning of the period in which the contingent condition was satisfied. Accordingly, the Founder Shares are included in the calculation of diluted EPS as if outstanding from the inception date upon the full exercise of the over-allotment option on December5,2025.
The following table reflects the calculation of basic and diluted net income per ordinary share:
| | | FortheperiodfromJune 27,2025 (Inception) throughDecember 31,2025 | | |
| | | Basic | | | Diluted | | |
| | | Class A Ordinary Shares | | | Class B Ordinary Shares | | | Class A Ordinary Shares | | | Class B Ordinary Shares | | |
| Basic and diluted net income per ordinary share: | | | | | | | | | | | | | |
| Numerator: | | | | | | | | | | | | | |
| Allocation of net income | | $ | 117,606 | | | $ | 215,959 | | | $ | 100,442 | | | $ | 233,123 | | |
| Denominator: | | | | | | | | | | | | | | | | | |
| Weighted-average shares outstanding | | | 3,303,191 | | | | 6,065,603 | | | | 3,303,191 | | | | 7,666,667 | | |
| Basic and diluted net income per ordinary share | | $ | 0.04 | | | $ | 0.04 | | | $ | 0.03 | | | $ | 0.03 | | |
**
F-13
**
*Recent Accounting Pronouncements*
In November2023, the FASB issued Accounting Standards Update (ASU)2023-07, *Segment Reporting (Topic280): Improvements to Reportable Segment Disclosures.* The amendments in this ASU require disclosures, on an annual and interim basis, of significant segment expenses that are regularly provided to the chief operating officer decision maker (CODM), as well as the aggregate amount of other segment items included in the reported measure of segment profit or loss. The ASU requires that a public entity disclose the title and position of the CODM and an explanation of how the CODM uses the reported measure(s)of segment profit or loss in assessing segment performance and deciding how to allocate resources. Public entities will be required to provide all annual disclosures currently required by Topic280 in interim periods, and entities with a single reportable segment are required to provide all the disclosures required by the amendments in this ASU and existing segment disclosures in Topic280. This ASU is effective for fiscalyears beginning after December15, 2023, and interim periods within fiscalyears beginning after December15, 2024, with early adoption permitted. The Company adopted ASU2023-07 on June27, 2025, the date of incorporation.
Management does not believe that any other recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying financial statement.
Note3 Initial Public Offering
Pursuant to the Initial Public Offering on December 5, 2025, the Company sold 23,000,000 Public Units, which includes the full exercise by the underwriters of their over-allotment option in the amount of 3,000,000 Public Units at a purchase price of $10.00 per unit. Each Public Unit consisted of one ClassA ordinary share, and one half of one Public Warrant. Each whole warrant entitles the holder thereof to purchase one ClassA ordinary share at a price of $11.50 per share, subject to adjustment (see Note6).
Note4 Related Party Transactions
**
*Founder Shares*
On July18, 2025, the Sponsor paid $25,000 to cover certain of the Companys expenses in exchange for the issuance of 7,666,667 ClassB ordinary shares, par value $0.0001 (the Founder Shares). The Sponsor has agreed to forfeit up to 1,000,000Founder Shares to the extent that the over-allotment option is not exercised in full by the underwriters. The forfeiture will be adjusted to the extent that the over-allotment option is not exercised in full by the underwriters so that the Founder Shares will represent 25% of the Companys issued and outstanding ordinary shares (excluding the Private Placement Unitsand assuming the initial shareholders do not purchase any Public Shares in the Initial Public Offering) after the Initial Public Offering. On December 5, 2025, the underwriters exercised their over-allotment option in full as part of the closing of the Initial Public Offering. As such, the 1,000,000 Founder Shares are no longer subject to forfeiture.
Subject to limited exceptions, the initial shareholders will agree not to transfer, assign or sell any Founder Shares until the earlier to occur of: (A)180days after the completion of the initial Business Combination and (B)subsequent to the initial Business Combination, the date on which the Company completes a liquidation, merger, share exchange, reorganization or other similar transaction that results in all of the Public Shareholders having the right to exchange their ordinary shares for cash, securities or other property.
On October 31, 2025, the Sponsor transferred an aggregate of 100,000 Founder Shares to the four independent directors of the Company (25,000 shares each) and 25,000 Founder Shares to the Chief Financial Officer, in exchange for their services as director through the Companys initial Business Combination. The Founder Shares shall return to the Sponsor if the director is no longer serving the Company on or prior to the initial Business Combination. The transfer of Founder Shares to the four independent directors and to the Chief Financial Officer is in the scope of FASB ASC Topic 718, *Compensation-Stock Compensation* (ASC 718). Under ASC 718, stock-based compensation associated with equity classified awards is measured at fair value upon the assignment date. The total fair value of the 100,000 Founder Shares transferred to the four directors and 25,000 Founder Shares transferred to the Chief Financial Officer on October 31, 2025 was $371,250 or $2.97 per share. The Company established the initial fair value Founder Shares on October 31, 2025, using a calculation prepared by a third-party valuation team which takes into consideration the implied share price of $9.75, probability of De-SPAC and instrument-specific market adjustment of 35.0%, and discount for lack of marketability of $(0.44). The Founder Shares are classified as Level 3 at the measurement date due to the use of unobservable inputs, and other risk factors. The Founder Shares were transferred subject to a performance condition (i.e., providing services through Business Combination). Stock-based compensation would be recognized at the date a Business Combination is considered probable (i.e., upon consummation of a Business Combination) in an amount equal to the number of Founder Shares that ultimately vest times the assignment date fair value per share (unless subsequently modified) less the amount initially received for the transfer of Founder Shares. Given the significant uncertainties in timing and the complexities in consummating a Business Combination, equity-based compensation will be recognized when completed. The total grant-date fair value of $371,250 represents the amount of stock-based compensation that would be recognized upon consummation of a Business Combination, to the extent the Founder Shares ultimately vest.
**
**
F-14
**
*Private Placement Units*
Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of an aggregate of 700,000 Private Placement Units at a price of $10.00 per Private Placement Unit, generating gross proceeds of $7,000,000. Each Private Placement Unit consists of one Class A ordinary share and one-half of one Private Placement Warrant. Of those 700,000 Private Placement Units, the Sponsor purchased 470,000 Private Placement Units, and the underwriters purchased 230,000 Private Placement Units.
Such Private Placement Unitsare identical to the Public Unitssold in the Initial Public Offering. If the Company does not consummate an initial Business Combination within 24months from the closing of the Initial Public Offering, any proceeds from the sale of the Private Placement Unitsheld in the Trust Account will be used to fund the redemption of the Public Shares (subject to the requirements of applicable law). Holders of the Private Placement Unitshave entered into an agreement, pursuant to which they have agreed to waive their redemption rights with respect to their Founder Shares, Private Placement Shares included in any Private Placement Unitsand Public Shares in connection with (i)the completion of the initial Business Combination and (ii)the implementation by the directors of, following a shareholder vote to approve, an amendment to the amended and restated memorandum and articles of association (A)that would modify the substance or timing of the obligation to provide holders of the Class A Ordinary Shares the right to have their shares redeemed or repurchased in connection with the initial Business Combination or to redeem 100% of the Public Shares if the Company does not complete the initial Business Combination within 24months from the closing of the Initial Public Offering or (B)with respect to any other provision relating to the rights of holders of the Class A Ordinary Shares. Subject to limited exceptions, the Private Placement Units(including any Private Placement Shares or Private Placement Warrants included in such Private Placement Units) will not be transferable or salable until 30days after the completion of the initial Business Combination. Certain proceeds from the Private Placement Unitswill be added to the proceeds from the Initial Public Offering to be held in the Trust Account.
*Promissory NoteRelated Party*
On July18, 2025, the Sponsor agreed to loan the Company an aggregate of up to $500,000 to cover expenses related to the Initial Public Offering pursuant to a promissory note (the Note). This Note is non-interest bearing and payable on the earlier of December31, 2025 or the completion of the Initial Public Offering. As of December 5, 2025, the Company had borrowed $133,462 under the Promissory Note, which was paid in full by the Company on December 8, 2025, subsequent to the closing of the Initial Public Offering. Borrowings against the Promissory Note are no longer available.
*Working Capital Loans*
In addition, 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 officers and directors may, but are not obligated to, loan the Company funds as may be required (Working Capital Loans). If the Company completes a Business Combination, the Company may repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. Otherwise, the Working Capital Loans may be repaid only out of funds held outside the Trust Account. In the event that a Business Combination does not close, the Company may use a portion of the proceeds held outside the Trust Account to repay the Working Capital Loans but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. Except for the foregoing, the terms of such Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans. The Working Capital Loans would either be repaid upon consummation of a Business Combination, without interest, or, at the lenders discretion, up to $1.5million of such Working Capital Loans may be convertible into Private Placement Units of the post Business Combination entity at a price of $10.00 per unit. The Private Placement Unitsissued upon conversion of any such loans would be identical to the Private Placement Unitssold in a private placement concurrently with the Initial Public Offering. As of December31, 2025, the Company had no outstanding borrowings under the Working Capital Loans.
F-15
*Administrative Support Agreement*
Commencing on November 26, 2025, the date of the effectiveness of the registration statement related to the Companys Initial Public Offering through the earlier of consummation of the initial Business Combination and the Companys liquidation, the Company will pay the Sponsor for office space, secretarial and administrative services provided to the Company in the amount of $25,000 per month. For the period from June 27, 2025 (inception) through December 31, 2025, the Company incurred and paid $25,000 in fees for these services
Note5 Commitmentsand Contingencies
**
*Registration Rights*
Holders of the Founder Shares and Private Placement Units, including from time to time the Public Shares, Private Placement Unitsthat may be issued upon conversion of Working Capital Loans, any Private Placement Shares or Private Placement Warrants included in Private Placement Units, any Class A Ordinary Shares issuable upon conversion of Founder Shares or upon exercise of warrants they may hold or acquire, and any warrants, including Private Placement Warrants, that they may hold or acquire, are entitled to registration rights pursuant to a registration rights agreement signed in connection with the consummation of the Initial Public Offering. The holders of these securities are entitled to make up to threedemands, excluding short form demands, that the Company register such securities. In addition, the holders have certain piggyback registration rights with respect to registration statements filed subsequent to the completion of the initial Business Combination. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
**
*Underwriting Agreement*
The Company granted the underwriters a 45-day option from the final prospectus relating to the Initial Public Offering to purchase up to 3,000,000 additional Public Unitsto cover over-allotments, if any, at the Initial Public Offering price less the underwriting discounts and commissions. On December 5, 2025, the underwriters elected to fully exercise their over-allotment option to purchase an additional 3,000,000 Public Units at a price of $10.00 per unit.
The underwriters were entitled to an underwriting discount of $0.20 per Public Share, or $4,600,000 in the aggregate, which was paid to the underwriters upon the closing of the Initial Public Offering. In addition, $0.40 per unit, or $9,200,000 in the aggregate, payable to the underwriters for deferred underwriting commissions placed in the Trust Account located in the UnitedStates, as described herein, and released to the underwriters only upon the consummation of an initial Business Combination. The deferred fee will become payable to the underwriters from the amounts held in the Trust Account solely in the event that the Company completes a Business Combination, subject to the terms of the underwriting agreement.
**
*Risks and Uncertainties*
The Companys ability to complete an initial Business Combination may be adversely affected by various factors, many of which are beyond the Companys control. The Companys ability to consummate an initial Business Combination could be impacted by, among other things, changes in laws or regulations, downturns in the financial markets or in economic conditions, inflation, fluctuations in interest rates, increases in tariffs, supply chain disruptions, declines in consumer confidence and spending, public health considerations, and geopolitical instability, such as the military conflicts in Ukraine and the Middle East. The Company cannot at this time predict the likelihood of one or more of the above events, their duration or magnitude or the extent to which they may negatively impact the Companys ability to complete an initial Business Combination.
F-16
Note6 Shareholders Deficit
The shareholders deficit of $7,528,103 is a function of recognizing both the deferred underwriters fee of $9,200,000, and the full redemption value of the Class A shares of $230,000,000, as offsets to total assets. The deficit does not represent a liquidity risk to the Company in that sufficient accessible cash is available to fund its planned evaluation and consummation of an initial Business Combination and, accordingly, no going concern risk exists at this time.
**
*Preference Shares*The Company is authorized to issue 5,000,000 preference shares with such designations, voting and other rights and preferences as may be determined from time to time by the Companys board of directors. As of December31, 2025, there were no preference shares issued or outstanding.
**
*Class A Ordinary Shares*The Company is authorized to issue 500,000,000 Class A Ordinary Shares with a par value of $0.0001 per share. As of December31, 2025, there are 700,000 Class A Ordinary Shares issued or outstanding, excluding 23,000,000 shares subject to possible redemption.
**
*ClassB Ordinary Shares*The Company is authorized to issue 50,000,000 ClassB ordinary shares with a par value of $0.0001 per share. As of December31, 2025, there were 7,666,667 ClassB ordinary shares outstanding.
Except as described below, ordinary shareholders of record are entitled to one vote for each share held on all matters to be voted on by shareholders and holders of Class A Ordinary Shares and holders of ClassB ordinary shares will vote together as a single class on all matters submitted to a vote of the shareholders except as required by law. Unless otherwise specified in the amended and restated memorandum and articles of association, or as required by applicable provisions of the Companies Act or applicable stock exchange rules, the affirmative vote of a majority of the ordinary shares that are represented in person or by proxy and are voted is required to approve any such matter voted on by the shareholders. Approval of certain actions will require a special resolution under Cayman Islands law, being the affirmative vote of at least two-thirds of the votes cast by such shareholders as, being entitled to do so, vote in person or, where proxies are allowed, by proxy at the applicable general meeting of the company, and pursuant to the amended and restated memorandum and articles of association; such actions include amending the amended and restated memorandum and articles of association and approving a statutory merger or consolidation with another company. The board of directors is divided into three classes, each of which will generally serve for terms of threeyears with only one class of directors being elected in each year. There is no cumulative voting with respect to the election of directors, with the result that the holders of more than 50% of the shares entitled to vote and voted for the election of directors can elect all of the directors. The shareholders are entitled to receive ratable dividends when, as and if declared by the board of directors out of funds legally available therefor. Prior to the initial Business Combination, only holders of the Founder Shares will have the right to vote on the appointment of directors. Holders of the Public Shares will not be entitled to vote on the election of directors during such time. Incumbent directors shall also have the ability to appoint additional directors or to appoint replacement directors in the event of a casual vacancy in accordance with the amended and restated memorandum and articles of association. Further, prior to the closing of the Business Combination, only holders of the ClassB ordinary shares will be entitled to vote on transferring the Company by way of continuation in a jurisdiction outside the Cayman Islands (including any special resolution required to amend the constitutional documents of the Company or to adopt new constitutional documents of the company, in each case, as a result of the company approving a transfer by way of continuation in a jurisdiction outside the Cayman Islands) and, as a result, the Sponsor will be able to approve any such proposal without the vote of any other shareholder. The provisions of the amended and restated memorandum and articles of association governing the appointment of directors prior to the Business Combination and the Companys continuation in a jurisdiction outside the Cayman Islands prior to the initial Business Combination may only be amended by a special resolution passed by holders representing at least two-thirds of the Companys outstanding ClassB ordinary shares. Holders of the Public Shares will not be entitled to vote on a special resolution to amend such provisions of the amended and restated memorandum and articles of association during such period.
F-17
Subject to adjustment for share sub-divisions, share capitalizations, reorganizations, recapitalizations and the like, and subject to further adjustment as provided herein, the Founder Shares, which are designated as ClassB ordinary shares, will be convertible at the option of the holder on a one-for-one basis or will automatically convert into Class A Ordinary Shares (such ClassA ordinary share delivered upon conversion will not have any redemption rights or be entitled to liquidating distributions from the Trust Account if we fail to consummate an initial Business Combination) concurrently with or immediately following the consummation of the initial Business Combination at a ratio such that the number of Class A Ordinary Shares issuable upon conversion of all Founder Shares (including, for the avoidance of doubt for purposes of the calculation described hereafter, the Class A Ordinary Shares that may have been issued upon conversion of Founder Shares at the option of the holder thereof prior to the consummation of the initial Business Combination) will equal, in the aggregate, on an as-converted basis, 25% of the sum of (i)the total number of ordinary shares issued and outstanding upon the completion of the Initial Public Offering (excluding the Private Placement Shares included in the Private Placement Unitsand including any ClassA ordinary share issued pursuant to the underwriters over-allotment option), plus (ii)the sum of the total number of Class A Ordinary Shares issued or deemed issued or issuable upon conversion or exercise of any equity-linked securities or rights issued or deemed issued, by the Company in connection with or in relation to the consummation of the initial Business Combination, excluding any Class A Ordinary Shares or equity-linked securities exercisable for or convertible into Class A Ordinary Shares issued, deemed issued, or to be issued, to any seller in the Business Combination and any private placement-equivalent units issued to the Sponsor, members of the management team or any of their affiliates upon conversion of working capital loans made to the Company. In no event will the ClassB ordinary shares convert into Class A Ordinary Shares at a rate of less than one to one.
*Warrants*As of December 31, 2025, there were 11,850,000 warrants outstanding, including 11,500,000 Public Warrants and 350,000 Private Placement Warrants. Public Warrants may only be exercised for a whole number of shares. No fractional Public Warrants will be issued upon separation of the Public Unitsand only whole Public Warrants will trade.
The Public Warrants will become exercisable 30days after the completion of a Business Combination, provided in each case that the Company has an effective registration statement under the Securities Act covering the Class A Ordinary Shares issuable upon exercise of the Public Warrants and a current prospectus relating to them is available and such shares are registered, qualified or exempt from registration under the securities, or blue sky, laws of the state of residence of the holder (or the Company permit holders to exercise their warrants on a cashless basis under certain circumstances). The Company is registering the Class A Ordinary Shares issuable upon exercise of the Public Warrants in the registration statement of which the prospectus, in which this financial statement is included, forms a part because the Public Warrants will become exercisable 30days after the completion of a Business Combination, which may be within one year of the Initial Public Offering. However, because the Public Warrants will be exercisable until their expiration date of up to fiveyears after the completion of the Business Combination, in order to comply with the requirements of Section10(a)(3)of the Securities Act following the consummation of the Business Combination, the Company has agreed that as soon as practicable, but in no event later than 20business days after the closing of the initial Business Combination, the Company will use commercially reasonable efforts to file with the SEC a registration statement covering the Class A Ordinary Shares issuable upon exercise of the warrants and to maintain a current prospectus relating to those Class A Ordinary Shares until the warrants expire or are redeemed, as specified in the warrant agreement. If a registration statement covering the Class A Ordinary Shares issuable upon exercise of the warrants is not effective by the 60thday after the closing of the initial Business Combination, warrant holders may, until such time as there is an effective registration statement and during any period when the Company will have failed to maintain an effective registration statement, exercise warrants on a cashless basis in accordance with Section3(a)(9)of the Securities Act or another exemption. Notwithstanding the above, if the Class A Ordinary Shares are at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition of a covered security under Section18(b)(1)of the Securities Act, the Company may, at its option, require holders of Public Warrants who exercise their warrants to do so on a cashless basis and, in the event the Company so elects, the Company will not be required to file or maintain in effect a registration statement, and in the event the Company does not so elect, it will use commercially reasonable efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available.
The warrants have an exercise price of $11.50 per share, subject to adjustments, and will expire fiveyears after the completion of a Business Combination or earlier upon redemption or liquidation. In addition, if (x)the Company issues additional Class A Ordinary Shares or equity-linked securities for capital raising purposes in connection with the closing of the initial Business Combination at an issue price or effective issue price of less than $9.20 per ClassA ordinary share (with such issue price or effective issue price to be determined in good faith by the board of directors and, in the case of any such issuance to the Sponsor or its affiliates, without taking into account any Founder Shares held by the Sponsor or its affiliates, as applicable, prior to such issuance) (the Newly Issued Price), (y)the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of the initial Business Combination on the date of the consummation of the initial Business Combination (net of redemptions), and (z)the volume weighted average trading price of Class A Ordinary Shares during the 20-tradingday period starting on thetrading day prior to theday on which the Company consummates its initial Business Combination (such price, the Market Value) is below $9.20 per share, then the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price, the $18.00 per share redemption trigger price will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price.
F-18
The Private Placement Warrants are identical to the Public Warrants underlying the Public Unitssold in the Initial Public Offering, except (i)that the Private Placement Warrants and the Class A Ordinary Shares issuable upon exercise of the Private Placement Warrants will not be transferable, assignable or salable until 30days after the completion of a Business Combination, subject to certain limited exceptions, (ii)the Private Placement Warrants will be non-redeemable and (iii)the Private Placement Warrants will be exercisable on a cashless basis and have certain registration rights.
Redemption of warrants when the price per Class A Ordinary Shares equals or exceeds $18.00. Once the warrants become exercisable, the Company may redeem the outstanding warrants (except as described herein with respect to the Private Placement Warrants):
| | | in whole and not in part; | |
| | | | |
| | | at a price of $0.01 per warrant; | |
| | | | |
| | | upon a minimum of 30days prior written notice of redemption, which we refer to as the 30-day redemption period; and | |
| | | | |
| | | if, and only if, the last reported sale price of the Class A Ordinary Shares equals or exceeds $18.00 per share (asadjusted) for any 20trading days within a 30-tradingday period ending on the thirdtrading day prior to the date on which the Company sends the notice of redemption to the warrant holders. | |
The Company will not redeem the warrants as described above unless a registration statement under the Securities Act covering the issuance of the Class A Ordinary Shares issuable upon exercise of the warrants is then effective and a current prospectus relating to those Class A Ordinary Shares is available throughout the 30-day redemption period.
In no event will the Company be required to net cash settle any warrant. If the Company has not completed a Business Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of warrants will not receive any of such funds with respect to their warrants, nor will they receive any distribution from the Companys assets held outside of the Trust Account with the respect to such warrants. Accordingly, the warrants may expire worthless.
Note 7 Fair Value Measurements
At December 31, 2025, assets held in the Trust Account were comprised of $455 in cash and $230,525,741 in U.S. Treasury securities. For the period from June 27, 2025 (inception) through December 31, 2025, the Company did not withdraw any interest income from the Trust Account.
F-19
Fair value is defined as the price that would be received for sale of an asset or paid for transfer of a liability in an orderly transaction between market participants at the measurement date. U.S. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include:
| | | Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets; | |
| | | Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and | |
| | | Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. In some circumstances, the inputs used to measure fair value might be categorized within different levels of the fair value hierarchy. In those instances, the fair value measurement is categorized in its entirety in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement. | |
The following table presents information about the Companys assets that are measured at fair value on a recurring basis at December 31, 2025 and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value. The gross holding gains and fair value of held-to-maturity securities at December 31, 2025 are as follows:
| | | Held-To-Maturity | | Level | | | Amortized Cost | | | Gross Holding Gain | | | Fair Value | | |
| December 31, 2025 | | U.S. Treasury Securities (Mature on 6/4/2026) | | | 1 | | | $ | 115,262,873 | | | $ | 35,332 | | | $ | 115,298,205 | | |
| December 31, 2025 | | U.S. Treasury Securities (Mature on 3/5/2026) | | | 1 | | | $ | 115,262,868 | | | $ | 28,136 | | | $ | 115,291,004 | | |
The fair value of the Public Warrants is $5,520,000, or $0.48 per Public Warrant. The fair value of Public Warrants was determined using Monte Carlo Simulation Model. The Public Warrants have been classified within shareholders deficit and will not require remeasurement after issuance. The following table presents the quantitative information regarding market assumptions used in the Level 3 valuation of the Public Warrants:
| | | December 5, 2025 | | |
| Underlying stock price | | $ | 9.76 | | |
| Exercise price | | $ | 11.50 | | |
| Volatility | | | 8.50 | % | |
| Probability of De-SPAC and market adjustment | | | 35.00 | % | |
| Risk-free rate | | | 3.83 | % | |
| Expected term to De-SPAC (years) | | | 2.00 | | |
Note8 Segment Information
FASB ASC Topic280, *Segment Reporting*, establishes standards for companies to report in their financial statement information about operating segments, products, services, geographic areas, and major customers. Operating segments are defined as components of an enterprise that engage in business activities from which it may recognize revenues and incur expenses, and for which separate financial information is available that is regularly evaluated by the Companys chief operating decision maker, or group, in deciding how to allocate resources and assess performance.
F-20
The Companys CODM has been identified as the Chief Executive Officer, who reviews the operating results for the Company as a whole to make decisions about allocating resources and assessing financial performance. Accordingly, management has determined that the Company only has one operating segment. The CODM assesses performance for the single segment and decides how to allocate resources based on net income or loss that also is reported on the statement of operations as net income or loss. The measure of segment assets is reported on the balance sheet as total assets. When evaluating the Companys performance and making key decisions regarding resource allocation the CODM reviews several key metrics, which include the following:
| | | December31, 2025 | | |
| Cash | | $ | 1,634,631 | | |
| Cash and investments held in Trust Account | | $ | 230,526,196 | | |
| | | For the Period from June 27, 2025 (inception) through December 31, | | |
| | | 2025 | | |
| Formation, general and administrative expenses | | $ | 192,631 | | |
| Interest earned on cash and investments held in Trust Account | | $ | 526,196 | | |
The CODM reviews interest earned on the Trust Account to measure and monitor shareholder value and determine the most effective strategy of investment with the Trust Account funds while maintaining compliance with the Trust Agreement.
General and administrative expenses are reviewed and monitored by the CODM to manage and forecast cash to ensure enough capital is available to complete a Business Combination or similar transaction within the Business Combination period. The CODM also reviews general and administrative costs to manage, maintain and enforce all contractual agreements to ensure costs are aligned with all agreements and budget. General and administrative costs, as reported on the statement of operations, are the significant segment expenses provided to the CODM on a regular basis.
Note9 Subsequent Events
The Company has evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the financial statements were available to be issued. Based upon this review, other than as noted below, the Company did not identify any subsequent events that would have required adjustment or disclosure in the financial statement.
On January 15, 2026, the Company engaged Kevin Gottfredson, a family member of our Chief Executive Officer, to provide management and consulting services in connection with our search for a potential Business Combination target. Under the engagement, the Company agreed to pay a $37,500 engagement fee and a recurring fee of $12,500 per month for up to 24 months, and the contract was reviewed and approved in advance by the Audit Committee. Fees paid to Mr. Gottfredson totaled $0 in 2025.
On February 20, 2026, the Company, Right Advisory LLC and Robert M. Tarola entered into an agreement (the Officer Agreement). Under the terms of the Officer Agreement, Mr. Tarola provides certain services to the Company in his capacity as Chief Financial Officer, effective as of October 31, 2025. Mr. Tarola and Right Advisory LLC do not receive any compensation for services provided under the Officer Agreement beyond the Founder Shares already held by Mr. Tarola.
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