Filed 2026-03-11 · Period ending 2025-12-31 · 86,117 words · SEC EDGAR
← ATEK Profile · ATEK JSON API
# Athena Technology Acquisition Corp. II (ATEK) — 10-K
**Filed:** 2026-03-11
**Period ending:** 2025-12-31
**Accession:** 0001213900-26-025927
**Source:** [SEC EDGAR](https://www.sec.gov/Archives/edgar/data/1882198/000121390026025927/)
**Origin leaf:** 08a5042d711c2a2a1258c70d951cbfc0c26d579372a1f1e60cefa2c53164116e
**Words:** 86,117
---
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
OR
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: 001-41144
ATHENA TECHNOLOGY ACQUISITION CORP. II
(Exact Name of Registrant as Specified in Its Charter)
| Delaware | | 87-2447308 | |
| (State or Other Jurisdiction of Incorporation or Organization) | | (I.R.S. Employer Identification No.) | |
| | | | |
| 442 5th Avenue New York, NY | | 10018 | |
| (Address of Principal Executive Offices) | | (Zip Code) | |
(970) 925-1572
(Registrants Telephone Number, Including Area Code)
Securities registered pursuant to Section 12(b) of the Act: None
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 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 (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit 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. (Check one):
| 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
At June 30, 2025, the last business day of the Registrants most recently completed second fiscal quarter, the aggregate market value of the Registrants Class A common stock outstanding, other than shares held by persons who may be deemed affiliates of the Registrant, was approximately $12,877,810, based on the closing price of the Class A common stock reported on the OTC Pink Market on such date.
As of March 6, 2026, there were 9,859,887 shares of Class A common stock, par value $0.0001 per share, outstanding, and 0 shares of Class B common stock, $0.0001 par value, outstanding.
Auditor Firm id: Auditor Name: WithumSmith+Brown, PC Auditor Location: New York, New York PCAOB ID: 100
Documents Incorporated by Reference: None.
Table of Contents
|
|
|
Page | |
|
|
Cautionary Note Regarding Forward-Looking Statements |
ii | |
|
PART I |
|
1 | |
|
Item 1. |
Business |
1 | |
|
Item 1A. |
Risk Factors |
12 | |
|
Item 1B. |
Unresolved Staff Comments |
49 | |
|
Item 1C. |
Cybersecurity |
49 | |
|
Item 2. |
Properties |
49 | |
|
Item 3. |
Legal Proceedings |
49 | |
|
Item 4. |
Mine Safety Disclosures |
49 | |
|
|
|
| |
|
PART II |
50 | |
|
Item 5. |
Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities |
50 | |
|
Item 6. |
[Reserved] |
51 | |
|
Item 7. |
Managements Discussion and Analysis of Financial Condition and Results of Operations |
52 | |
|
Item 7A. |
Quantitative and Qualitative Disclosures About Market Risk |
63 | |
|
Item 8. |
Financial Statements and Supplementary Data |
63 | |
|
Item 9. |
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure |
63 | |
|
Item 9A. |
Controls and Procedures |
64 | |
|
Item 9B. |
Other Information |
65 | |
|
Item 9C. |
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections |
65 | |
|
|
|
| |
|
PART III |
66 | |
|
Item 10. |
Directors, Executive Officers and Corporate Governance |
63 | |
|
Item 11. |
Executive Compensation |
74 | |
|
Item 12. |
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters |
75 | |
|
Item 13. |
Certain Relationships and Related Transactions, and Director Independence |
76 | |
|
Item 14. |
Principal Accounting Fees and Services |
80 | |
|
|
|
| |
|
PART IV |
81 | |
|
Item 15. |
Exhibits and Financial Statement Schedules |
81 | |
|
Item 16. |
Form 10-K Summary |
83 | |
|
|
|
| |
|
SIGNATURES |
84 | |
i
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements in this annual report on Form
10-K (this Annual Report on Form 10-K) may constitute forward-looking statements for purposes of the federal
securities laws. 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.
The forward-looking statements contained in this
Annual Report on 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 (many 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. 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. These risks and uncertainties include, but are not limited to, the following risks, uncertainties
and other factors:
|
|
|
our being a company with no operating history and no revenues; | |
|
|
|
our ability to select an appropriate target business or businesses; | |
|
|
|
our ability to complete our initial business combination; | |
|
|
|
our expectations around the performance of the prospective target business or businesses; | |
|
|
|
our success in retaining or recruiting, or changes required in, our officers, key employees or directors following our initial business combination; | |
|
|
|
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; | |
|
|
|
our ability to obtain additional working capital; | |
|
|
|
our pool of prospective target businesses; | |
|
|
|
our ability to consummate an initial business combination due to challenging market conditions; | |
|
|
|
the ability of our officers and directors to generate a number of potential business combination opportunities; | |
|
|
|
our public securities potential liquidity and trading; | |
|
|
|
our securities have been delisted from trading on NYSE American, which could limit investors ability to make transactions in our securities and subject us to additional trading restrictions; | |
|
|
|
the lack of a market for our securities; | |
|
|
|
the ability of the Company to list, and maintain the listing of, its securities on a U.S. exchange before and following the closing of an initial business combination; | |
|
|
|
the use of proceeds not held in the trust account or available to us from interest income on the trust account balance; | |
|
|
|
the trust account not being subject to claims of third parties; | |
|
|
|
our identified material weakness in our internal controls over financial reporting and the restatement of our previously issued unaudited condensed financial statements; | |
|
|
|
our financial performance; | |
|
|
|
risks and uncertainties related to technology and consumer businesses; and | |
|
|
|
the other risks and uncertainties discussed in Risk Factors and elsewhere in this Annual Report on Form 10-K. | |
ii
PART I
*References in this report to Athena,
we, us or the Company refer to Athena Technology Acquisition Corp. II. References to our management
or our management team refer to our officers and directors, and references to the Sponsor refer to Athena
Technology Sponsor II, LLC, a Delaware limited liability company. References to our initial stockholders are to the holders
of our founder shares prior to our initial public offering.*
**
Item 1. Business.
Introduction
We are a blank check company formed as a Delaware
corporation for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar
business combination with one or more businesses (the business combination). While we may pursue an acquisition in any business
industry or sector, we intend to focus our efforts identifying businesses in the fintech, enterprise, deep tech and health-tech industries.
We intend to focus on companies that have powerful and differentiated relationships with their customers, and that have market-leading
insight into how their consumers live, what they need, and how to communicate with them effectively. These companies may serve both domestic
and international audiences.
We are focused on identifying companies that would
benefit from becoming publicly-traded entities. We believe that our business strategy creates a compelling alternative for a growing company
in a traditionally underfunded area to become a public entity and thus gain liquidity, diversify funding sources, and benefit from public
market participation.
We have developed the following high-level, non-exclusive
investment criteria that we will use to screen for and evaluate target businesses.
We will seek to acquire a business that have strong
business fundamentals and that:
*Would Benefit Uniquely from our Capabilities*- a business where the collective capabilities of our management and advisors can be leveraged to tangibly improve the operations
and market position of the target.
*Is Sourced Through our Proprietary Channels*- we do not expect to participate in broadly marketed processes, but rather will aim to leverage our extensive network to source potential
targets.
*Has a Committed and Capable Management Team*- a business with a professional management team whose interests are aligned with those of our investors and complement the expertise
of our founders. Where necessary, we may also look to complement and enhance the capabilities of the target businesss management
team by recruiting additional talent through our network of contacts.
*Has the Potential to Grow Through Further Acquisition
Opportunities* - a business that has the platform to grow inorganically through acquisitions.
*Offers an Attractive Potential Return for our
Stockholders*- weighing potential growth opportunities and operational improvements in the target business against any identified
downside risks.
These criteria are not intended to be exhaustive.
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 on 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 stockholder communications related to our initial business combination,
which would be in the form of tender offer documents or proxy solicitation materials that we would file with the U.S. Securities and Exchange
Commission (the SEC).
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. We have generated no operating revenues to date and we do not expect that we will
generate operating revenues until we consummate our initial business combination.
1
On December 14, 2021, we consummated our initial
public offering (the initial public offering) of 25,000,000 units (the units). Each unit consists of one share
of Class A common stock and one-half of one redeemable warrant, with each warrant entitling the holder thereof to purchase one share of
Class A common stock for $11.50 per share. The units were sold at a price of $10.00 per unit, generating gross proceeds of $250,000,000.
Simultaneously with the consummation of the initial
public offering, we completed the private sale (the private placement) of an aggregate of 950,000 units (the private
placement units) to Athena Technology Sponsor II, LLC (the Sponsor) at a purchase price of $10.00 per private placement
unit, generating gross proceeds of $9,500,000.
Subsequent to the closing of the initial public
offering, on December 28, 2021, we consummated the closing of the sale of 375,000 additional units (over-allotment units)
upon receiving notice of the underwriters election to partially exercise its over-allotment option, generating additional gross
proceeds of $3,750,000. Simultaneously with the exercise of the over-allotment, we consummated the private placement of an additional
3,750 private placement units to the Sponsor at a purchase price of $10.00 per private placement unit, generating gross proceeds of $37,500.
Prior to the consummation of the initial public
offering, on August 31, 2021, the Sponsor paid $25,000 to cover certain of our offering costs in exchange for 7,362,500 shares of our
Class B common stock, par value $0.0001 per share (the founder shares), and in November 2021, the Company effected a 1.36672326
for 1 stock split of its common stock, resulting in the Sponsor owning an aggregate of 10,062,500 founder shares. Up to 1,312,500 founder
shares were subject to forfeiture by the Sponsor depending on the extent to which the underwriters over-allotment option was exercised.
In connection with the underwriters partial exercise of their over-allotment option on December 28, 2021, the Sponsor forfeited
1,181,250 founder shares. On June 21, 2023, the Sponsor converted 8,881,250 shares of Class B common stock held by it on a one-to-one
basis into 8,881,250 shares of non-redeemable Class A common stock (the Conversion). The 8,881,250shares of ClassA
common stock issued in connection with the Conversion are subject to the same restrictions as applied to ClassB common stock before
the Conversion.
A total of $256,287,500 was placed in a U.S.-based
trust account (the Trust Account) maintained by Continental Stock Transfer & Trust Company, acting as trustee.
The funds held in the Trust Account are 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 of 1940, as amended (the Investment Company Act), which invest only in direct
U.S. government treasury obligations.
As of December 31, 2025, there was $297,614 held
in the Trust Account, which includes interest income available to us to complete a business combination of $110,291. There was no restricted
cash and cash equivalents as of December 31, 2025.
Effecting Our Initial Business Combination
*General*
**
We intend to effectuate our initial business combination
using cash from the proceeds of the initial public offering and the private placement of the private placement units, the proceeds of
the sale of our shares in connection with our initial business combination (pursuant to forward purchase agreements or backstop agreements
we may enter into following the consummation of the initial public offering or otherwise), 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.
If our initial business combination is paid for
using equity or debt securities, or not all of the funds released from the Trust Account are used for payment of the consideration in
connection with our initial business combination, we may apply the balance of the cash released from the Trust Account for general corporate
purposes, including for maintenance or expansion of operations of the post-transaction company, the payment of principal or interest due
on indebtedness incurred in completing our initial business combination, to fund the purchase of other companies or for working capital.
**
2
**
*Selection of a Target Business and Structuring
of Our Initial Business Combination*
**
While we may pursue an acquisition in any business
industry or sector, we intend to focus our efforts identifying businesses in the fintech, enterprise, deep tech and health-tech industries.
Our amended and restated certificate of incorporation prohibits us from effectuating a business combination with another blank check company
or similar company with nominal operations.
**
Applicable exchange listing rules require that
we must consummate an initial business combination with one or more operating businesses or assets with a fair market value equal to at
least 80% of the net assets held in the Trust Account (excluding the amount of any deferred underwriting discount held in trust) at the
time of our signing a definitive agreement in connection with our initial business combination. If our board of directors is not able
to independently determine the fair market value of our initial business combination, we will obtain an opinion from an independent investment
banking firm or another independent entity that commonly renders valuation opinions. While we consider it unlikely that our board of directors
will not 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.
**
We will complete our initial business combination
only if the post-transaction company in which our public stockholders own shares will own or acquire 50% or more of the outstanding voting
securities of the target or is otherwise not required to register as an investment company under the Investment Company Act. Even if the
post-transaction company owns or acquires 50% or more of the voting securities of the target, our stockholders prior to 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 transaction. 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 or shares 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 stockholders 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%
fair market value test described above. We do not currently intend to purchase multiple businesses in unrelated industries in conjunction
with our initial business combination; however, in the event that the business combination does involve more than one target business,
the 80% fair market value test will be based on the aggregate value of all of the target businesses and we will treat the target businesses
together as our initial business combination for purposes of seeking stockholder approval or conducting a tender offer, as applicable.
In evaluating a prospective target business, we
expect to conduct an extensive due diligence review which will encompass, as applicable and among other things, meetings with incumbent
management and employees, document reviews, code reviews, security audits, interviews of customers and suppliers, inspection of facilities
and a review of financial and other information about the target and its industry.
Certain of our directors and officers own founder
shares and/or 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. Further, such 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.
Certain of our officers and directors presently
have, 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 subject to his or her fiduciary
duties. Subject to his or her fiduciary duties under Delaware law, none of the members of our management team who are also employed by
our Sponsor or its affiliates have any obligation to present us with any opportunity for a potential business combination of which they
become aware. If any of our officers or directors becomes aware of a business combination opportunity that falls within the line of business
of any entity to which he or she has pre-existing fiduciary or contractual obligations, he or she may be required to present such business
combination opportunity to such entity prior to presenting such business combination opportunity to us, subject to his or her fiduciary
duties under Delaware law and any other applicable fiduciary duties. Our amended and restated certificate of incorporation provides that
we renounce our interest in any corporate 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.
3
We are not prohibited from pursuing an initial
business combination with a company that is affiliated with our Sponsor, executive officers or directors, or completing the business combination
through a joint venture or other form of shared ownership with our Sponsor, executive officers or directors. In the event we seek to complete
an initial business combination with a target that is affiliated with our Sponsor, executive officers or directors, we, or a committee
of independent directors, would obtain an opinion from an independent investment banking firm or another independent entity that commonly
renders valuation opinions stating that such an initial business combination is fair to our company from a financial point of view.
*Permitted Purchases of Our Securities*
If we seek stockholder 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 stockholders, directors, executive officers 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.
There is no limit on the number of shares our initial stockholders, directors, officers, or their affiliates may purchase in such transactions,
subject to compliance with applicable law and exchange listing rules. However, (apart from the purchase of the private placement units)
our initial stockholders, directors, officers and their affiliates 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 shares or public warrants in such transactions. If they engage in such transactions, they will be restricted from
making any such purchases when they are in possession of any material nonpublic information not disclosed to the seller or if such purchases
are prohibited by Regulation M under the Exchange Act.
We do not currently anticipate that such purchases,
if any, would constitute a tender offer subject to the tender offer rules under the Exchange Act or a going-private transaction subject
to the going-private rules under the Exchange Act; however, if the purchasers determine at the time of any such purchases that the purchases
are subject to such rules, the purchasers will comply with such rules. We expect 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.
The purpose of any such purchases of shares could
be to vote such shares in favor of the business combination and thereby increase the likelihood of obtaining stockholder approval of the
business combination or 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 common stock or 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.
*Redemption Rights for Public Stockholders
upon Completion of our Initial Business Combination*
**
We
will provide our public stockholders with the opportunity to redeem all or a portion of their shares of Class A common stock 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 earned on the funds held in the Trust Account (which interest shall be net of taxes payable), divided by the
number of then outstanding public shares, subject to the limitations and on the conditions described herein. The amount in the Trust
Account as of December 31, 2025 was $14.41 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 underwriter. Our initial stockholders, 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 any founder shares, private placement shares and public shares they may hold in connection with the completion of our
initial business combination.
4
*Limitations on Redemptions*
**
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 shares of Class A common stock 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 in connection with such initial business combination,
and all shares of Class A common stock 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, in order to, among other reasons, satisfy such
net tangible assets or minimum cash requirements.
*Manner of Conducting Redemptions*
We will provide our public stockholders 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 stockholder meeting called to approve the initial business combination or (ii) without a stockholder vote by means of a tender
offer. The decision as to whether we will seek stockholder approval of a proposed initial 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 stockholder approval under applicable law or stock exchange listing requirements.
Asset acquisitions and stock purchases would not typically require stockholder approval while direct mergers with our company where we
do not survive and any transactions where we issue more than 20% of our outstanding common stock or seek to amend our amended and restated
certificate of incorporation would require stockholder approval. So long as we obtain and maintain a listing for our securities on a national
securities exchange, we will be required to comply with such exchanges stockholder approval rules.
The requirement that we provide our public stockholders
with the opportunity to redeem their public shares by one of the two methods listed above is contained in provisions of our amended and
restated certificate of incorporation and will apply whether or not we maintain our registration under the Exchange Act or obtain a listing
on a national securities exchange. Such provisions may be amended if approved by holders of 65% of our common stock entitled to vote thereon.
If we amend such provisions of our amended and restated certificate of incorporation, we will provide our public stockholders with the
opportunity to redeem their public shares in connection with a stockholder meeting.
If we provide our public stockholders with the
opportunity to redeem their public shares in connection with a stockholder meeting, we will
|
|
|
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. | |
If we seek stockholder approval, we will complete
our initial business combination only if a majority of the outstanding shares of common stock voted are voted in favor of the initial
business combination. A quorum for such meeting will consist of the holders present in person or by proxy of shares of outstanding capital
stock of the Company representing a majority of the voting power of all outstanding shares of capital stock of the Company entitled to
vote at such meeting. For purposes of seeking approval of the majority of our outstanding shares of common stock voted, non-votes will
have no effect on the approval of our initial business combination once a quorum is obtained.
5
Based
on 9,859,887 shares of Class A common stock issued and outstanding as of March 6, 2026, our initial stockholders hold 8,881,250 shares of our Class A common stock and 953,750 shares of Class A
common Stock underlying the 953,750 private placement units. Accordingly, the shares held by our initial stockholders represent
approximately 99.7% of our outstanding Class A common stock. Our initial stockholders will count towards the quorum requirement and,
pursuant to the letter agreement, our Sponsor, officers and directors have agreed to vote any founder shares and private placement
shares they hold and any public shares purchased during or after the initial public offering (including in open market and
privately-negotiated transactions) in favor of our initial business combination. Assuming that a quorum is achieved at the
stockholder meeting and that the initial stockholders vote all of their shares in favor of the initial business combination at such
stockholder meeting, then the business combination will be approved even if some or all of the other public stockholders do not vote
in favor of the business combination. Our quorum and voting thresholds, and the voting agreements of our initial stockholders, make
it more likely that we will consummate our initial business combination. Each public stockholder may elect to redeem its public
shares irrespective of whether they vote for or against the proposed transaction, whether they participate in or abstain from
voting, or whether they were a stockholder on the record date for the stockholder meeting held to approve the proposed
transaction.
If a stockholder vote is not required and we do
not decide to hold a stockholder 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.
If public stockholders 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 redemptions pursuant to the tender offer rules, we or our Sponsor will terminate any plan established
in accordance with Rule 10b5-1 to purchase shares of our Class A common stock in the open market, in order to comply with Rule 14e-5 under
the Exchange Act.
We intend to require our public stockholders
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 stock 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 vote on the proposal to approve the initial business combination. In addition, if we conduct redemptions in connection
with a stockholder vote, we intend to require a public stockholder seeking redemption of its public shares to also submit a written request
for redemption to our transfer agent two business days prior to the 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 stockholders 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 stockholders, 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 stockholders who elected to redeem their shares.
6
*Limitation on Redemption upon Completion
of our Initial Business Combination if We Seek Stockholder Approval*
**
If we seek stockholder 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 certificate of incorporation provides that a public stockholder, together with any affiliate of such stockholder
or any other person with whom such stockholder 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 Excess Shares, without our prior consent. We believe this restriction
will discourage stockholders 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 stockholder holding
more than an aggregate of 15% of the shares sold in the initial public offering 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 stockholders ability to redeem no more than 15% of the shares sold in the initial public offering
without our prior consent, we believe we will limit the ability of a small group of stockholders 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 stockholders
ability to vote all of their shares (including Excess Shares) for or against our initial business combination.
*Redemption of Public Shares and Liquidation
if No Initial Business Combination*
**
Our amended and restated certificate of incorporation
provides that we will have until June 14, 2026, to complete our initial business combination. If we are unable to complete our initial
business combination by June 14, 2026, we will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably
possible but not more than 10 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 earned on the funds held in the Trust Account (which interest
shall be net of taxes payable and up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public
shares, which redemption will completely extinguish public stockholders rights as stockholders (including the right to receive
further liquidating distributions, if any), and (iii) as promptly as reasonably possible following such redemption, subject to the approval
of our remaining stockholders and our board of directors, liquidate and dissolve, subject in each case to our obligations under Delaware
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 our warrants, which will expire worthless if we fail to complete our initial business combination by June
14, 2026.
*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 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 stockholders 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.
7
*Employees*
**
We currently have three executive officers. These
individuals are not obligated to devote any specific number of hours to our matters but they intend to devote as much of their time as
they deem necessary to our affairs until we have completed our initial business combination. The amount of time they will devote in any
time period will vary based on whether a target business has been selected for our initial business combination and the stage of the business
combination process we are in. We do not intend to have any full time employees prior to the completion of our initial business combination.
*Periodic Reporting and Financial Information*
**
We are required to file Annual Reports on Form
10-K and Quarterly Reports on Form 10-Q with the SEC on a regular basis, and are required to disclose certain material events in a Current
Report on Form 8-K. Such reports and other information filed by the Company with the SEC are available free of charge on the Companys
website at www.athenaspac.com when such reports are available on the SECs website. The SEC maintains an Internet website that contains
reports, proxy and information statements and other information regarding issuers that file electronically with the SEC. The SECs
Internet website is located at www.sec.gov. In addition, the Company will provide copies of these documents without charge upon request
from us in writing at 442 5th Avenue, New York, NY 10018 or by telephone at (970) 925-1572. The information included on our website is
not incorporated by reference into this Annual Report on 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 will provide stockholders with audited financial
statements of the prospective target business as part of the proxy solicitation materials or tender offer documents sent to stockholders
to assist them in assessing the target business. In all likelihood, these financial statements will need to be prepared in accordance
with, or reconciled to, accounting principles generally accepted in the United States of America (GAAP), or international
financial reporting standards as issued by the International Accounting Standards Board (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 (United States) (PCAOB). These financial statement requirements may limit the pool of potential target businesses
we may conduct an initial business combination with 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 prescribed time frame.
We cannot assure you that any particular target business identified by us as a potential business combination candidate will have financial
statements prepared in accordance with the requirements outlined above, or that the potential target business will be able to prepare
its financial statements in accordance with the requirements outlined above. To the extent that these requirements cannot be met, we may
not be able to acquire the proposed target business. While this may limit the pool of potential business combination candidates, we do
not believe that this limitation will be material.
We are required to evaluate our internal control
procedures for the fiscal year ending December 31, 2025 as required by the Sarbanes-Oxley Act. 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 have our
internal control procedures audited. A target business may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding
adequacy of their internal controls. The development of the internal controls of any such entity to achieve compliance with the Sarbanes-Oxley
Act may increase the time and costs necessary to complete any such business combination.
We are an emerging growth company,
as defined in Section 2(a) of the Securities Act of 1933, as amended (the Securities Act), as modified by 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 stockholder 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.
8
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 the initial public offering,
(b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated filer,
which means the market value of our shares of Class A common stock 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 common stock held by non-affiliates exceeds $250 million
as of the prior June 30th, and (2) our annual revenues exceeded $100 million during such completed fiscal year and the market value of
our common stock held by non-affiliates exceeds $700 million as of the prior June 30th.
*Business Combination Agreement*
On December 4, 2024, the Company, the Sponsor,
Ace Green Recycling, Inc., a Delaware corporation (Ace Green Recycling) and Project Atlas Merger Sub Inc., a Delaware corporation
(Merger Sub), entered into a Business Combination Agreement (the Business Combination Agreement), pursuant
to which, subject to the satisfaction or waiver of certain conditions precedent in the Business Combination Agreement, the following transactions
will occur: (a) Merger Sub will merge with and into Ace Green Recycling (the Merger), with Ace Green Recycling surviving
the Merger as a wholly owned subsidiary of the Company and the security holders of Ace Green Recycling becoming security holders of the
Company and (b) the other transactions contemplated by the Business Combination Agreement and the Ancillary Documents referred to therein
(together with the Merger, the Transactions).
Pursuant to the Business Combination Agreement,
at the effective time of the Merger, each outstanding share of common stock of Ace Green Recycling (other than any excluded shares and
dissenting shares) shall be converted into the right to receive (i) a number of shares of Company common stock equal to a specified exchange
ratio and (ii) a pro rata portion of any Earnout Shares (as defined below) that the Company is obligated to issue pursuant to the terms
of the Business Combination Agreement.
The Business Combination Agreement, subject to
the terms and conditions set forth therein, provides that Athena will issue up to an aggregate 10,500,000 shares of its common stock (the
Earnout Shares) to Ace Green Recyclings shareholders and up to an aggregate of 1,500,000 shares of its common stock
to Sponsor based on the trading prices of Athenas common stock during the five-year period following the closing of the Merger
(the Closing).
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 with Ace Green Recycling
will be successful.
*Voting and Support Agreements*
In connection with the execution of the Business
Combination Agreement, Sponsor entered into a Voting and Support Agreement (the Sponsor Support Agreement) with Athena and
Ace Green Recycling, pursuant to which Sponsor has agreed to, among other things, (a) vote at any meeting of Athena shareholders to be
called for approval of the Business Combination Agreement, the Merger, and the other Transactions all shares of Athena Class A Common
Stock (together with any warrants to acquire Athena Class A Common Stock, the Sponsor Securities) beneficially owned or
thereafter acquired in favor of the Business Combination Agreement, the Merger, and the other Transactions, (b) be bound by certain other
covenants and agreements related to the Transactions and (c) be bound by certain transfer restrictions with respect to the Sponsor Securities,
in each case, on the terms and subject to the conditions set forth in the Sponsor Support Agreement.
9
In connection with the execution of the Business
Combination Agreement, certain Ace Green Recycling shareholders entered into a Voting and Support Agreement (the Ace Green Recycling
Support Agreement) with Athena and Ace Green Recycling, pursuant to which each such Ace Green Recycling shareholder has agreed
to, among other things, (a) vote at any meeting of Ace Green Recyclings shareholders to be called for approval of, among other
things, the Business Combination Agreement and the Transactions all of such Ace Green Recycling shareholders shares of Ace Green
Recycling common stock (the Ace Green Recycling Securities) beneficially owned or thereafter acquired in favor of the Transactions,
(b) be bound by certain other covenants and agreements related to the Transactions and (c) be bound by certain transfer restrictions with
respect to the Ace Green Recycling Securities, in each case, on the terms and subject to the conditions set forth in the Ace Green Recycling
Support Agreement.
*Lock-Up Agreements*
In connection with the Closing, certain Ace Green
Recycling shareholders will each enter into an agreement (the Ace Green Recycling Shareholder Lock-Up Agreement) providing
that each such Ace Green Recycling shareholder will not, subject to certain exceptions, transfer its shares of Athena common stock during
the period commencing on the closing date of the business combination and ending 180 days thereafter.
In connection with the Closing, Sponsor will enter
into an agreement (the Sponsor Lock-Up Agreement) providing that Sponsor will not, subject to certain exceptions, transfer
its shares of Athena common stock during the period commencing on the closing date of the business combination and ending 180 days thereafter.
*New Registration Rights Agreement*
The Business Combination Agreement contemplates
that, at the Closing, certain Ace Green Recycling equityholders, Sponsor and Athena will enter into a Registration Rights Agreement (the
New Registration Rights Agreement), pursuant to which Athena will agree to register for resale certain shares of Athenas
common stock and other equity securities of Athena that are held by the parties thereto. Pursuant to the New Registration Rights Agreement,
Athena will agree to file a shelf registration statement registering the sale or resale of all of the Registrable Securities (as defined
in the New Registration Rights Agreement) within 30 days after the closing date of the business combination. Athena will also agree to
provide customary piggyback registration rights, subject to certain requirements and customary conditions. The New Registration
Rights Agreement will also provide that Athena will pay certain expenses relating to such registrations and indemnify the shareholders
against certain liabilities.
*Stockholder Meetings*
On June 13, 2023, the Company held a special meeting
of its stockholders (the First Extension Special Meeting), at which the stockholders approved proposals to amend the Companys
amended and restated certificate of incorporation, as amended and corrected (Charter) to (i) extend the date by which the
Company must consummate its initial business combination from June 14, 2023 to up to March 14, 2024 by electing to extend the date to
consummate an initial business combination on a monthly basis up to nine times by an additional one month each time after June 14, 2023
(the date which is 18 months from the closing date of the IPO, the First Current Outside Date) until March 14, 2024 (the
date which is 27 months from the closing date of the IPO), or a total of up to nine months after the First Current Outside Date, provided
that the Sponsor or its affiliates or permitted designees deposit into the Trust Account the lesser of (a) $60,000 and (b) $0.03 for each
share of common stock issued and outstanding that had not been redeemed in accordance with the terms of the Charter and (ii) provide holders
of the Companys Class B common stock, par value $0.0001 per share (the Class B common stock), the right to convert
any and all of their Class B common stock into the Companys Class A common stock, par value $0.0001 per share (the Class
A common stock), on a one-for-one basis prior to the closing of a business combination at the election of the holder. The Company
filed an amendment to the Charter to reflect the accepted proposals on June 13, 2023. In connection with the First Extension Special Meeting,
23,176,961 shares of the Companys Class A common stock were redeemed.
10
On March 12, 2024, the Company held a special
meeting of its stockholders (the Second Extension Special Meeting), at which the stockholders approved proposals to further
amend the Charter to (i) further extend the date by which the Company must consummate its initial business combination on a monthly basis
for up to nine times by an additional one month each time for a total of up to nine months from March 14, 2024 (the date which is 27 months
from the closing date of the Companys IPO) to December 14, 2024 (the date which is 36 months from the closing date of the IPO)
provided that the Sponsor or its affiliates or permitted designees deposit into the Trust Account the lesser of (a) $40,000 and (b) $0.02
for each share of the Companys common stock issued and outstanding that had not been redeemed in accordance with the terms of the
Charter upon the election of each such one-month extension unless the closing of the Companys initial business combination shall
have occurred and (ii) eliminate the limitation that the Company may not redeem public shares in an amount that would cause the Companys
net tangible assets to be less than $5,000,001 immediately prior to or upon consummation of an initial business combination. The Company
filed an amendment to the Charter to reflect the accepted proposals on March 12, 2024. In connection with the Second Extension Special
Meeting, 910,258 shares of the Companys Class A common stock were redeemed.
On December 10, 2024, the Company held an annual
meeting of its stockholders (the 2024 Annual Meeting), at which the stockholders approved the proposal to further amend
the Charter to further extend the date by which the Company must consummate its initial business combination on a monthly basis for up
to nine times by an additional one month each time for a total of up to nine months from December 14, 2024 to September 14, 2025, provided
that the Sponsor or its affiliates or permitted designees deposit into the Trust Account the lesser of (a) $25,000 and (b) $0.02 for each
share of the Companys common stock issued and outstanding that had not been redeemed in accordance with the terms of the Charter
upon the election of each such one-month extension unless the closing of the Companys initial business combination shall have occurred.
The Company filed an amendment to the Charter to reflect the accepted proposals on December 10, 2024. In connection with the 2024 Annual
Meeting, 977,625 shares of the Companys Class A common stock were redeemed.
On September 10, 2025, Athena held a special meeting
of stockholders (the Fourth Extension Special Meeting) pursuant to which its stockholders approved the proposal to further
amend the Charter to further extend the date by which the Company must consummate its initial business combination on a monthly basis
for up to nine times by an additional one month each time for a total of up to nine months September 14, 2025 to June 14, 2026. In connection
with the Fourth Extension Special Meeting, 285,269 shares of the Companys Class A common stock were redeemed.
*Trust Deposits*
On each of January 8, 2024 and February 9, 2024,
the Company deposited $60,000 into the Trust Account allowing the Company to extend the period of time it has to consummate its initial
Business Combination by one month for each deposit from January 14, 2024 to March 14, 2024.
On each of March 13, 2024, April 16, 2024, May
14, 2024, June 14, 2024, July 10, 2024, August 8, 2024, September 12, 2024, October 15, 2024 and November 11, 2024, the Company deposited
$25,756 into the Trust Account, or an aggregate of $231,800, allowing the Company to extend the period of time it has to consummate its
initial Business Combination by one month from March 14, 2024 to December 14, 2024.
On each of December 11, 2024, January 10, 2025,
February 10, 2025 and March 6, 2025, the Company deposited $6,203 into the Trust Account, or an aggregate of $24,812, allowing the Company
to extend the period of time it has to consummate its initial Business Combination by one month from December 14, 2024 to April 14, 2025.
On each of September 12, 2025, October 7, 2025,
November 4, 2025, December 8, 2025, January 5, 2026, February 5, 2026 and March 4, 2026, Athena deposited approximately $498 into the
Trust Account, or an aggregate of approximately $3,486, allowing Athena to extend the period of time that it has to consummate its initial
business combination by one month per deposit from September 14, 2025 to April 14, 2026.
*NYSE American Notifications and Delisting*
On July 17, 2023, our Board of Directors authorized
the transfer of the listing of our Class A common stock, redeemable warrants, each exercisable to purchase one share of Class A common
stock at a price of $11.50 per share (the Warrants), and units, each consisting of one share of Class A common stock and
one-half of one Warrant (the Units and together with the Class A common stock and the Warrants, the Listed Securities),
from the New York Stock Exchange (the NYSE) to the NYSE American LLC (the NYSE American). The listing and
trading of the Listed Securities on the NYSE ended at market close on July 20, 2023, and the trading of the Listed Securities on the NYSE
American commenced at market open on July 21, 2023.
11
On each of April 17, 2024 and November 20, 2024,
the Company received an official notice of noncompliance from NYSE Regulation stating that it was not in compliance with NYSE American
continued listing standards under the timely filing criteria included in Section 1007 of the NYSE American Company Guide due to the failure
to timely file the Annual Report on Form 10-K by the filing due date of April 16, 2024 and Quarterly Report on Form 10-Q for the quarter
ended September 30, 2024 by the filing due date of November 19, 2024, respectively (the Filing Delinquencies.) The Company
filed its Annual Report on Form 10-K, the Quarterly Report on Form 10-Q for the three months ended March 31, 2024, the Quarterly Report
on Form 10-Q for the three months ended June 30, 2024 and the Quarterly Report on Form 10-Q for the three months ended September 30, 2024,
and believed it had cured the Filing Delinquencies. On October 21, 2024, the Company received a letter from the NYSE notifying the Company
of its past due annual listing fees. On December 10, 2024, the Company received a letter from the NYSE stating that the staff of NYSE
Regulation determined to commence proceedings to delist the Companys (i) Class A common stock (ii) Units, and (iii) Warrants pursuant
to Sections 119(b) and 119(f) of the NYSE American Company Guide because the Company failed to consummate a business combination within
36 months of the effectiveness of its initial public offering registration statement, or such shorter period that the Company specified
in its registration statement. As a result of the determination, trading of the Listed Securities on NYSE American was suspended on December
10, 2024. On December 19, 2024, NYSE American filed a Form 25 to delist the Listed Securities and to remove such securities from registration
under Section 12(b) of the Exchange Act. Such delisting took effect approximately 10 days after the filing of Form 25, or December 30,
2024. Our Class A common stock, Units and Warrants currently trade on OTC Markets OTCPK under the symbols ATEK, ATEK.U
and ATEK WS, respectively.
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 Annual Report on Form 10-K, before making a decision to invest in our units. 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.*
Risk Factor Summary
Our business is subject to numerous risks and
uncertainties, including those highlighted in this section titled Risk Factors, that represent challenges that we face in
connection with the successful implementation of our strategy. The occurrence of one or more of the events or circumstances described
in this section titled Risk Factors, alone or in combination with other events or circumstances, may adversely affect our
ability to effect a business combination, and may have an adverse effect on our business, cash flows, financial condition and results
of operations. Such risks include, but are not limited to:
|
|
|
newly formed company without an operating history; | |
|
|
|
delay in receiving distributions from the Trust Account; | |
|
|
|
lack of opportunity to vote on our proposed business combination; | |
|
|
|
lack of protections afforded to investors of blank check companies; | |
|
|
|
deviation from acquisition criteria; | |
|
|
|
issuance of equity and/or debt securities to complete a business combination; | |
|
|
|
lack of working capital; | |
|
|
|
third-party claims reducing the per-share redemption price; | |
|
|
|
negative interest rate for securities in which we invest the funds held in the Trust Account; | |
12
|
|
|
our stockholders being held liable for claims by third parties against us; | |
|
|
|
failure to enforce our Sponsors indemnification obligations; | |
|
|
|
warrant holders limited to exercising warrants only on a cashless basis; | |
|
|
|
the ability of warrant holders to obtain a favorable judicial forum for disputes with our company; | |
|
|
|
dependence on key personnel; | |
|
|
|
conflicts of interest of our Sponsor, officers and directors; | |
|
|
|
our securities have been delisted from trading on NYSE American, which could limit investors ability to make transactions in our securities and subject us to additional trading restrictions; | |
|
|
|
dependence on a single target business with a limited number of products or services; | |
|
|
|
our stockholders inability to vote or redeem their shares in connection with our extensions; | |
|
|
|
shares being redeemed and warrants becoming worthless; | |
|
|
|
our competitors with advantages over us in seeking business combinations; | |
|
|
|
ability to obtain additional financing; | |
|
|
|
our initial stockholders controlling a substantial interest in us; | |
|
|
|
warrants adverse effect on the market price of our shares of common stock; | |
|
|
|
disadvantageous timing for redeeming warrants; | |
|
|
|
registration rights adverse effect on the market price of our shares of common stock; | |
|
|
|
our ability to consummate an initial business combination due to challenging market conditions; | |
|
|
|
business combination with a company located in a foreign jurisdiction; | |
|
|
|
changes in laws or regulations; | |
|
|
|
impact of rising inflation and interest rates; | |
|
|
|
uncertainty concerning the applicability of the Investment Company Act to special purpose acquisition companies; | |
|
|
|
impact of the excise tax included in the Inflation Reduction Act of 2022 on the value of our securities following the business combination and the amount of funds available for distribution; | |
|
|
|
tax consequences to business combinations; | |
|
|
|
exclusive forum provisions in our amended and restated certificate of incorporation; and | |
|
|
|
our ability to continue as a going concern. | |
13
Risks Relating to our Search for, Consummation
of, or Inability to Consummate a Business Combination and Post-Business Combination Risks
*Our public stockholders 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 and private
placement shares will participate in such vote, which means we may complete our initial business combination even though a majority of
our public stockholders do not support such a combination.*
We may choose not to hold a stockholder vote to
approve our initial business combination unless the initial business combination would require stockholder approval under applicable law
or stock exchange listing requirements or if we decide to hold a stockholder vote for business or other legal reasons. Except as required
by law or applicable stock exchange listing rules, the decision as to whether we will seek stockholder approval of a proposed initial
business combination or will allow stockholders 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 stockholder approval. Even if we seek stockholder approval, the holders of our founder shares and private placement
shares will participate in the vote on such approval. Accordingly, we may complete our initial business combination even if holders of
a majority of our public shares do not approve of the initial business combination we complete. For more information, see Part I, Item
1A, Risk FactorsRisks Relating to our Search for, Consummation of, or Inability to Consummate a Business Combination and
Post-Business Combination RisksIf we seek stockholder approval of our initial business combination, our initial stockholders and
management team have agreed to vote in favor of such initial business combination, regardless of how our public stockholders vote.
*If we seek stockholder approval of our initial
business combination, our initial stockholders and management team have agreed to vote in favor of such initial business combination,
regardless of how our public stockholders vote.*
Our
amended and restated certificate of incorporation provides that, if we seek stockholder approval of an initial business combination, such
initial business combination will be approved if we receive the affirmative vote of a majority of the shares voted at such meeting, including
the founder shares and private placement shares. Based on 9,859,887 shares of Class A common stock issued and outstanding as of March
6, 2026,
our initial stockholders hold 8,881,250 shares of our Class A common stock and 953,750 shares of Class A common Stock underlying the 953,750
private placement units. Accordingly, the shares held by our initial stockholders represent approximately 99.7% of our outstanding Class
A common stock. Our initial stockholders will count towards the quorum requirement and, pursuant to the letter agreement, our Sponsor,
officers and directors have agreed to vote any founder shares and private placement shares they hold and any public shares purchased during
or after the initial public offering (including in open market and privately-negotiated transactions) in favor of our initial business
combination. Assuming that a quorum is achieved at the stockholder meeting and that the initial stockholders vote all of their shares
in favor of the initial business combination at such stockholder meeting, then the business combination will be approved even if some
or all of the other public stockholders do not vote in favor of the business combination. Accordingly, if we seek stockholder approval
of our initial business combination, the agreement by our initial stockholders and management team to vote in favor of our initial business
combination will increase the likelihood that we will receive the requisite stockholder approval for such initial business combination.
*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 may
not be provided with an opportunity to evaluate the specific merits or risks of our initial business combination. Since our board of directors
may complete a business combination without seeking stockholder approval, public stockholders may not have the right or opportunity to
vote on the business combination, unless we seek such stockholder vote. Accordingly, your only opportunity to affect the investment decision
regarding our initial business combination may be limited to exercising your redemption rights within the period of time (which will be
at least 20 business days) set forth in our tender offer documents mailed to our public stockholders in which we describe our initial
business combination.
14
*The ability of our public stockholders 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 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. If too many public stockholders
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. Prospective targets will be aware of these risks and, thus, may be reluctant to enter into a business combination
transaction with us.
*The ability of our public stockholders 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, including at the time we entered into our existing Business Combination Agreement, we will not (or did not)
know how many stockholders 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 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, we will need to
reserve a portion of the cash in the Trust Account to meet such requirements, or arrange for third-party financing. In addition, if a
larger number of shares is submitted for redemption than we initially expected, we may need to restructure the transaction to reserve
a greater portion of the cash in the Trust Account or arrange for third-party financing. Raising additional third-party financing may
involve dilutive equity issuances or the incurrence of indebtedness at higher than desirable levels. In addition, the amount of the deferred
underwriting commissions payable to the underwriter 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 stockholders who properly exercise their redemption rights will not be
reduced by the deferred underwriting commission and after such redemptions, the amount held in trust will continue to reflect our obligation
to pay the entire deferred underwriting commissions. The above considerations may limit our ability to complete the most desirable business
combination available to us or optimize our capital structure.
*The ability of our public stockholders 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 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 complete our initial
business combination by June 14, 2026 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 stockholders.*
Any potential target business with which we enter
into negotiations concerning a business combination will be aware that we must complete our initial business combination by June 14, 2026.
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 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.
15
*We
may not be able to complete our initial business combination by June 14, 2026, in which case we would cease all operations except for
the purpose of winding up and we would redeem our public shares and liquidate, in which case our public stockholders may only receive
$14.41 per share based on the amount held in the Trust Account as of December 31, 2025, or less than such amount in certain
circumstances, and our warrants will expire worthless.*
We
may not be able to find a suitable target business and complete our initial business combination by June 14, 2026. Our ability to complete
our initial business combination may be adversely impacted by general market conditions, volatility in the capital and debt markets and
the other risks described herein. If we have not completed our initial business combination within such time period, we will (i) cease
all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than 10 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 earned on the funds held in the Trust Account (which interest shall be net of taxes payable and up to $100,000 of
interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish
public stockholders rights as stockholders (including the right to receive further liquidating distributions, if any), and (iii)
as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of
directors, liquidate and dissolve, subject in each case, to our obligations under Delaware law to provide for claims of creditors and
the requirements of other applicable law, in which case our public stockholders may only receive $14.41 per share based on the amount
held in the Trust Account as of December 31, 2025, or less than such amount in certain circumstances, and our warrants will expire worthless.
Further, on December 4, 2024, the Company, the
Sponsor, Ace Green Recycling, and Merger Sub, entered into a business combination agreement, which contains a number of closing conditions,
including the listing of the Companys securities on The Nasdaq Stock Market, LLC (Nasdaq), that if not satisfied
could cause the termination of the proposed business combination. If the Company is unable to consummate the proposed business combination
with Ace Green Recycling pursuant to the terms and conditions of the Business Combination Agreement or is unable to complete an initial
business combination with another target by June 14, 2026, the Company would cease all operations except for the purpose of winding up,
redeem the public shares as described above and liquidate and dissolve, subject in each case, to the Companys obligations under
Delaware law to provide for claims of creditors and the requirements of other applicable law.
*Challenging market conditions have caused
an increasing number of special purpose acquisition companies to be unable to complete an initial business combination.*
In recent years, an increasing number of special
purpose acquisition companies have liquidated due to an inability to complete an initial business combination due to competition for available
targets with attractive fundamentals or business models as well as challenging market conditions impacted by geopolitical tensions, economic
and political uncertainty and trade issues. Further, challenges in the market for so-called PIPE transactions may limit our ability to
secure additional financing in an initial business combination, which may in turn result in our inability to consummate an initial business
combination. Any of the abovementioned factors, or any other negative impact on the global economy or capital markets or other geopolitical
tensions and political uncertainty, could adversely affect our consummation of a business combination. Any such disruptions may also have
the effect of heightening many of the other risks described elsewhere in this Annual Report on Form 10-K. If these disruptions or other
matters of global concern continue for an extensive period of time, our ability to consummate a business combination, or the operations
of a target business with which we may ultimately consummate a business combination, may be materially adversely affected.
*If we seek stockholder approval of our initial
business combination, our Sponsor, initial stockholders, directors, executive officers and their affiliates may elect to purchase shares
or public warrants from public stockholders, which may influence a vote on a proposed business combination and reduce the public float
of our Class A common stock.*
If we seek stockholder 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 stockholders, directors, executive officers 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 to do so. There is no limit on the number of shares our initial stockholders, directors, officers
or their affiliates may purchase in such transactions, subject to compliance with applicable law and stock exchange listing rules.
16
However, other than as expressly stated herein,
our initial stockholders, directors, officers and their affiliates 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 in the Trust Account will be
used to purchase shares or public warrants in such transactions. Such purchases may include a contractual acknowledgment that such stockholder,
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 stockholders,
directors, executive officers or their affiliates purchase shares in privately negotiated transactions from public stockholders who have
already elected to exercise their redemption rights, such selling stockholders would be required to revoke their prior elections to redeem
their shares. The purpose of any such purchases of shares could be to vote such shares in favor of the business combination and thereby
increase the likelihood of obtaining stockholder approval of the business combination or 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. We expect 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.
In addition, if such purchases are made, the public
float of our Class A common stock or public warrants and the number of beneficial holders of our securities may be reduced,
possibly making it difficult to obtain or maintain the quotation, listing or trading of our securities on a national securities exchange.
*If a stockholder 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 stockholder fails to receive our proxy materials or tender offer documents, as applicable, such stockholder may not
become aware of the opportunity to redeem its shares. In addition, 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 describe the various procedures that
must be complied with in order to validly tender or submit public shares for redemption. For example, we intend to require our public
stockholders 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 stock certificates to our transfer agent, or to deliver their shares to our transfer
agent electronically 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 vote on the proposal to approve the initial business combination. In
addition, if we conduct redemptions in connection with a stockholder vote, we intend to require a public stockholder seeking redemption
of its public shares to also submit a written request for redemption to our transfer agent two business days prior to the vote in which
the name of the beneficial owner of such shares is included. In the event that a stockholder fails to comply with these or any other procedures
disclosed in the proxy or tender offer materials, as applicable, its shares may not be redeemed.
*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 stockholders 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 shares of Class A common stock that such stockholder properly elected to redeem, subject to the limitations described
herein, (ii) the redemption of any public shares properly tendered in connection with a stockholder vote to amend our amended and restated
certificate of incorporation to modify the substance or timing of our obligation to redeem 100% of our public shares if we do not complete
our initial business combination by June 14, 2026 or with respect to any other material provisions relating to stockholders rights
(including redemption rights) or pre-initial business combination activity, or (iii) the redemption of our public shares if we are unable
to complete an initial business combination by June 14, 2026, subject to applicable law and as further described herein. In addition,
if our plan to redeem our public shares if we are unable to complete an initial business combination by June 14, 2026 is not completed
for any reason, compliance with Delaware law may require that we submit a plan of dissolution to our then-existing stockholders for approval
prior to the distribution of the proceeds held in our Trust Account. In that case, public stockholders may be forced to wait beyond June
14, 2026 before they receive funds from our Trust Account. In no other circumstances will a public stockholder have any right or interest
of any kind 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.
17
*You will not be entitled to protections
normally afforded to investors of many other blank check companies.*
Since the net proceeds of the initial public offering
and the sale of the private placement units are intended to be used to complete an initial business combination with a target business
that has not been selected, we may be deemed to be a blank check company under the United States securities laws. However,
because we have net tangible assets in excess of $5,000,000 and filed a Current Report on Form 8-K, including an audited balance sheet
demonstrating this fact, we are exempt from rules promulgated by the SEC to protect investors in blank check companies, such as Rule 419.
Accordingly, investors will not be afforded the benefits or protections of those rules. Among other things, this means our units will
be immediately tradable and we will have a longer period of time to complete our initial business combination than do companies subject
to Rule 419. Moreover, if the initial public offering were subject to Rule 419, that rule would prohibit the release of any interest earned
on funds held in the Trust Account to us unless and until the funds in the Trust Account were released to us in connection with our completion
of an initial business combination.
*As the number of special purpose acquisition
companies (SPACs) 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 consummate
an initial business combination.*
In recent years, 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 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
deals 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 consummate an initial business combination, and may result in our
inability to consummate an initial business combination on terms favorable to our investors altogether.
*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.*
In recent years, the market for directors and
officers liability insurance for special purpose acquisition companies has changed. Fewer insurance companies are offering quotes for
directors and officers liability coverage, the premiums charged for such policies have generally increased and the terms of such policies
have generally become less favorable. There can be no assurance that these trends will not continue.
18
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-off insurance). The need
for run-off insurance 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.
*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 are unable to complete our initial business combination, our public stockholders may receive only their pro rata portion of the
funds in the Trust Account that are available for distribution to public stockholders, 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-established and 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 similar or greater
technical, human and other resources to ours 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 the initial public offering 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 stockholder 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 are unable to complete our initial business combination, our public stockholders may receive only their pro rata portion
of the funds in the Trust Account that are available for distribution to public stockholders, and our warrants will expire worthless.
*If our available working capital funds are
insufficient to allow us to operate for at least until June 14, 2026, 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.*
Of the net proceeds of the initial public offering
and the sale of the private placement units, only $1,450,000 were available to us initially outside the Trust Account to fund our working
capital requirements and, as of December 31, 2025, all such funds have been extinguished. We believe that the funds available to us outside
of the Trust Account acquired through fundraising subsequent to the initial public offering will be sufficient to allow us to operate
for at least until June 14, 2026; however, we cannot assure you that our estimate is accurate. Of the funds available to us, we could
use a portion of the funds 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 or merger agreements 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 or merger agreement 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.
19
If we are unable to complete our initial business
combination 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 stockholders may only receive an estimated $14.41 per share based on the amount held in the Trust Account as
of December 31, 2025, or possibly less, on our redemption of our public shares, and our warrants will expire worthless.
*Subsequent to our completion of our initial
business combination, we may be required to take write-downs or write-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 extensive due diligence on
a target business with which we combine, we cannot assure you that this diligence will identify all material issues that may be present
with a particular target business, that it would be possible to uncover all material issues through a customary amount of due diligence,
or that factors outside of the target business and outside of our control will not later arise. As a result of these factors, we may be
forced to later write-down or write-off assets, 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-cash items 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 debt financing to partially
finance the initial business combination or thereafter. Accordingly, any stockholders or warrant holders who choose to remain stockholders
or warrant holders following the business combination could suffer a reduction in the value of their securities. Such stockholders or
warrant 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 materials or tender offer documents, 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 stockholders may be less than
the $14.41 per share held in the Trust Account as of December 31, 2025.*
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 (other than 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
stockholders, 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 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. The underwriters of the initial public offering as well as our independent
registered public accounting firm will not execute agreements with us waiving such claims to the monies held in the Trust Account.
20
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 are unable to
complete our initial business combination within the prescribed timeframe, 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 10 years following redemption. Accordingly, the per-share redemption amount received by public stockholders could
be less than the $14.41 per public share held in the Trust Account as of December 31, 2025, 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 for services
rendered or products sold to us, 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)
$10.10 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 $10.10 per public 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 the 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
$10.10 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 stockholders.*
In the event that the proceeds in the Trust Account
are reduced below the lesser of (i) $10.10 per 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 $10.10 per public 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 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 stockholders may
be reduced below $10.10 per share.
*We may not have sufficient funds to satisfy
indemnification claims of our directors and executive officers.*
We have agreed to indemnify our officers and
directors to the fullest extent permitted by law. However, 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.
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 officers and directors may discourage
stockholders 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 stockholders. Furthermore, a stockholders 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.
21
*If, after we distribute the proceeds in
the Trust Account to our public stockholders, 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 stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not
dismissed, any distributions received by stockholders 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 stockholders. 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, by paying public stockholders from the Trust Account prior to addressing the claims
of creditors, thereby exposing itself and us to claims of punitive damages.
*If, before distributing the proceeds in
the Trust Account to our public stockholders, 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 stockholders and the per-share
amount that would otherwise be received by our stockholders in connection with our liquidation may be reduced.*
If, before distributing the proceeds in the Trust
Account to our public stockholders, 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 stockholders. To the extent any bankruptcy claims
deplete the Trust Account, the per-share amount that would otherwise be received by our stockholders in connection with our liquidation
may be reduced.
*Our stockholders may be held liable for
claims by third parties against us to the extent of distributions received by them upon redemption of their shares.*
Under the DGCL, stockholders may be held liable
for claims by third parties against a corporation to the extent of distributions received by them in a dissolution. The pro rata portion
of our Trust Account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete our
initial business combination by June 14, 2026 may be considered a liquidating distribution under Delaware law. If a corporation complies
with certain procedures set forth in Section 280 of the DGCL intended to ensure that it makes reasonable provision for all claims against
it, including a 60-day notice period during which any third-party claims can be brought against the corporation, a 90-day period during
which the corporation may reject any claims brought, and an additional 150-day waiting period before any liquidating distributions are
made to stockholders, any liability of stockholders with respect to a liquidating distribution is limited to the lesser of such stockholders
pro rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder would be barred after the
third anniversary of the dissolution. However, it is our intention to redeem our public shares as soon as reasonably possible following
June 14, 2026 in the event we do not complete our initial business combination and, therefore, we do not intend to comply with the foregoing
procedures.
Because we will not be complying with Section
280, Section 281(b) of the DGCL requires us to adopt a plan, based on facts known to us at such time that will provide for our payment
of all existing and pending claims or claims that may be potentially brought against us within the 10 years following our dissolution.
However, because we are a blank check company, rather than an operating company, and our operations will be limited to searching for prospective
target businesses to acquire, the only likely claims to arise would be from our vendors (such as lawyers, investment bankers, etc.) or
prospective target businesses. If our plan of distribution complies with Section 281(b) of the DGCL, any liability of stockholders with
respect to a liquidating distribution is limited to the lesser of such stockholders pro rata share of the claim or the amount distributed
to the stockholder, and any liability of the stockholder would likely be barred after the third anniversary of the dissolution. We cannot
assure you that we will properly assess all claims that may be potentially brought against us. As such, our stockholders could potentially
be liable for any claims to the extent of distributions received by them (but no more) and any liability of our stockholders may extend
beyond the third anniversary of such date. Furthermore, if the pro rata portion of our Trust Account distributed to our public stockholders
upon the redemption of our public shares in the event we do not complete our initial business combination by June 14, 2026 is not considered
a liquidating distribution under Delaware law and such redemption distribution is deemed to be unlawful (potentially due to the imposition
of legal proceedings that a party may bring or due to other circumstances that are currently unknown), then pursuant to Section 174 of
the DGCL, the statute of limitations for claims of creditors could then be six years after the unlawful redemption distribution, instead
of three years, as in the case of a liquidating distribution.
22
*We may seek business combination opportunities
in industries or sectors that may be outside of our managements areas of expertise.*
We will consider a business combination outside
of our managements areas of expertise if a business combination candidate is presented to us and we determine that such candidate
offers an attractive business combination opportunity for our company. Although our management will endeavor to evaluate the risks inherent
in any particular business combination candidate, we cannot assure you that we will 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 in
the initial public offering than a direct investment, if an opportunity were available, in a business combination candidate. In the event
we elect to pursue a business combination outside of the areas of our managements expertise, our managements expertise may
not be directly applicable to its evaluation or operation, and the information regarding the areas of our managements expertise
would not be relevant to an understanding of the business that we elect to acquire. As a result, our management may not be able to ascertain
or assess adequately all of the relevant risk factors. Accordingly, any stockholders who choose to remain stockholders following our initial
business combination could suffer a reduction in the value of their shares. Such stockholders are unlikely to have a remedy for such reduction
in value.
*We may seek business combination opportunities
with an early stage company, a financially unstable business or an entity lacking an established record of revenue, cash flow or earnings,
which could subject us to volatile revenues, cash flows or earnings or difficulty in retaining key personnel.*
To the extent we complete our initial business
combination with an early stage company, a financially unstable business or an entity lacking an established record of sales or earnings,
we may be affected by numerous risks inherent in the operations of the business with which we combine. These risks include investing in
a business without a proven business model and with limited historical financial data, volatile revenues or earnings, intense competition
and difficulties in obtaining and retaining key personnel. Although our officers and directors will endeavor to evaluate the risks inherent
in a particular target business, we may not be able to properly ascertain or assess all of the significant risk factors and we may not
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.
*We are not required to obtain an opinion
from an independent investment banking firm or from a valuation or appraisal 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 stockholders from a financial point of view.*
Unless we complete our initial business combination
with an affiliated entity or our board of directors cannot independently determine the fair market value of the target business or businesses
(including with the assistance of financial advisors), we are not required to obtain an opinion from an independent investment banking
firm or from another independent entity that commonly renders valuation opinions that the price we are paying is fair to our stockholders
from a financial point of view. If no opinion is obtained, our stockholders 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 materials or tender offer documents, as applicable, related to our initial business combination.
*Because we must furnish our stockholders
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 the proxy
statement with respect to the vote on an initial business combination include historical and 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, GAAP,
or IFRS, depending on the circumstances and the historical financial statements may be required to be audited in accordance with the standards
of the 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 financial statements in time for us to disclose such statements in accordance with federal proxy rules and
complete our initial business combination within the prescribed time frame.
23
*Compliance obligations under the Sarbanes-Oxley
Act may make it more difficult for us to effectuate our initial business combination, require substantial financial and management resources,
and increase the time and costs of completing an initial business combination.*
Section 404 of the Sarbanes-Oxley Act requires
that we evaluate and report on our system of internal controls for the year ended December 31, 2025. 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. Further,
for as long as we remain an emerging growth company, we will not 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-Oxley Act 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-Oxley Act
regarding adequacy of its internal controls. The development of the internal control of any such entity to achieve compliance with the
Sarbanes-Oxley Act may increase the time and costs necessary to complete any such business combination.
*We have identified a material weakness in
our internal control over financial reporting. This material weakness could continue to adversely affect our ability to report our results
of operations and financial condition accurately and in a timely manner.*
Our management is responsible for establishing
and maintaining adequate internal control over financial reporting designed to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. Our management is likewise
required, on a quarterly basis, to evaluate the effectiveness of our internal controls and to disclose any changes and material weakness
identified through such evaluation of those internal controls. A material weakness is a deficiency, or a combination of deficiencies,
in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or
interim financial statements will not be prevented or detected on a timely basis.
As described in Part II, Item 9A. Controls and
Procedures, we have concluded that our internal control over financial reporting was ineffective as of December 31, 2025 because a material
weakness existed in our internal control over financial reporting. We have taken a number of measures to remediate the material weakness
described herein; however, if we are unable to remediate our material weakness in a timely manner or we identify additional deficiencies
or material weaknesses, we may be unable to provide required financial information in a timely and reliable manner and we may incorrectly
report financial information. Likewise, if our financial statements are not filed or continue to not be filed on a timely basis, we could
be subject to sanctions or investigations by the stock exchange on which our Class A common stock is listed, the SEC or other regulatory
authorities. The existence of material weaknesses or deficiencies in internal control over financial reporting could adversely affect
our business and our reputation or investor perceptions of us, which could have a negative effect on the trading price of our stock. In
addition, we will incur additional costs to remediate material weakness in our internal control over financial reporting, as described
in Part II, Item 9A. Controls and Procedures.
We can give no assurance that the measures we
have taken and plan to take in the future will remediate the material weakness identified or that any additional material weaknesses or
restatements of financial results will not arise in the future due to a failure to implement and maintain adequate internal control over
financial reporting or circumvention of these controls. In addition, even if we are successful in strengthening our controls and procedures,
in the future those controls and procedures may not be adequate to prevent or identify irregularities or errors or to facilitate the fair
presentation of our financial statements.
24
*The restatement of the Companys financial
statements may lead to additional risks and uncertainties, including regulatory, litigation, stockholder or other actions, loss of investor
and counterparty confidence and negative impacts on our stock price.*
**
As a result of the restatement of our previously
issued unaudited condensed financial statements contained in our Quarterly Report on Form 10-Q for the three months ended September 30,
2023, we are subject to additional risks, including unanticipated costs for accounting and legal fees in connection with or related to
the restatement. In addition, the attention of our management team may be diverted by these efforts. We could also be subject to regulatory,
litigation, stockholder, or other actions in connection with the restatement, which would, regardless of the outcome, consume managements
time and attention and may result in additional legal, accounting, and other costs. If we do not prevail in any such proceedings, we could
be required to pay damages or settlement costs, which could be material. In addition, the restatement and related matters could have a
negative effect on our any proposed business combination and our reputation, or could cause our customers, stockholders, or other counterparties
to lose confidence in us. Any of these occurrences could have a material adverse effect on our business, results of operations, financial
condition, and stock price.
*In order to effectuate an initial business
combination, special purpose acquisition companies have, in the recent past, amended various provisions of their charters and other governing
instruments, including their warrant agreements. We cannot assure you that we will not seek to amend our amended and restated certificate
of incorporation or governing instruments in a manner that will make it easier for us to complete our initial business combination that
our stockholders may not support.*
In order to effectuate a business combination,
special purpose acquisition companies have, in the recent past, amended various provisions of their charters and governing instruments,
including their warrant agreements. For example, special purpose acquisition companies have amended the definition of business combination,
increased redemption thresholds and extended the time to consummate an initial 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
certificate of incorporation requires the approval of holders of 65% of our shares of common stock, and amending our public warrant agreement
(as may be amended and restated, our public warrant agreement) requires a vote of holders of at least a majority of the
public warrants (which may include public warrants acquired by our Sponsor or its affiliates in the initial public offering or thereafter
in the open market). In addition, our amended and restated certificate of incorporation requires us to provide our public stockholders
with the opportunity to redeem their public shares for cash if we propose an amendment to our amended and restated certificate of incorporation
to modify the substance or timing of our obligation to redeem 100% of our public shares if we do not complete an initial business combination
by June 14, 2026 or with respect to any other material provisions relating to stockholders rights (including redemption rights)
or pre-initial business combination activity. To the extent any of such amendments would be deemed to fundamentally change the nature
of the securities offered in the initial public offering, 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.
*The provisions of our amended and restated
certificate of incorporation that relate to our pre-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 holders of 65% of our shares of common stock, which is
a lower amendment threshold than that of some other special purpose acquisition companies. It may be easier for us, therefore, to amend
our amended and restated certificate of incorporation to facilitate the completion of an initial business combination that some of our
stockholders may not support.*
Our amended and restated certificate of incorporation
provides that any of its provisions related to pre-business combination activity (including the requirement to deposit proceeds of the
initial public offering and the sale of private placement units into the Trust Account and not release such amounts except in specified
circumstances, and to provide redemption rights to public stockholders as described herein) may be amended if approved by holders of 65%
of our shares of common stock entitled to vote thereon and corresponding provisions of the trust agreement governing the release of funds
from our Trust Account may be amended if approved by holders of 65% of our shares of common stock entitled to vote thereon. If we amend
such provisions of our amended and restated certificate of incorporation, we will provide our public stockholders with the opportunity
to redeem their public shares in connection with a stockholder meeting. In all other instances, our amended and restated certificate of
incorporation may be amended by holders of a majority of our outstanding common stock entitled to vote thereon, subject to applicable
provisions of the DGCL or applicable stock exchange rules. Our initial stockholders, who collectively beneficially own approximately 99.7%
of our shares of common stock (including the private placement shares), may participate in any vote to amend our amended and restated
certificate of incorporation 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 certificate of incorporation which govern our pre-business combination behavior
more easily than some other special purpose acquisition companies, and this may increase our ability to complete a business combination
with which you do not agree. Our stockholders may pursue remedies against us for any breach of our amended and restated certificate of
incorporation.
25
Our Sponsor, executive officers and directors
have agreed, pursuant to written agreements with us, that they will not propose any amendment to our amended and restated certificate
of incorporation to modify the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial
business combination by June 14, 2026 or with respect to any other material provisions relating to stockholders rights (including
redemption rights) or pre-initial business combination activity, unless we provide our public stockholders with the opportunity to redeem
their Class A common stock 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 earned on the funds held in the Trust Account (which interest shall be net of taxes
payable), divided by the number of then outstanding public shares. Our stockholders are not parties to, or third-party beneficiaries of,
these agreements and, as a result, will not have the ability to pursue remedies against our Sponsor, executive officers, or directors
for any breach of these agreements. As a result, in the event of a breach, our stockholders would need to pursue a stockholder derivative
action, subject to applicable law.
*Certain agreements related to the initial
public offering may be amended without stockholder approval.*
Each of the agreements related to the initial
public offering to which we are a party, other than the public warrant agreement and the investment management trust agreement, may be
amended without stockholder approval. Such agreements are: the underwriting agreement; the letter agreement among us and our initial stockholders,
Sponsor, officers and directors; the registration rights agreement among us and our initial stockholders; the private placement units
purchase agreement between us and our Sponsor; and the administrative services agreement among us, our Sponsor and an affiliate of our
Sponsor. These agreements contain various provisions that our public stockholders might deem to be material. For example, our letter agreement
and the underwriting agreement contain certain lock-up provisions with respect to the founder shares, private placement units and other
securities held by our initial stockholders, Sponsor, officers and directors. Amendments to such agreements would require the consent
of the applicable parties thereto and would need to be approved by our board of directors, which may do so for a variety of reasons, including
to facilitate our initial business combination. While we do not expect our board of directors to approve any amendment to any of these
agreements prior to our initial business combination, it may be possible that our board of directors, in exercising its business judgment
and subject to its fiduciary duties, chooses to approve one or more amendments to any such agreement. Any amendment entered into in connection
with the consummation of our initial business combination will be disclosed in our proxy materials or tender offer documents, as applicable,
related to such initial business combination, and any other material amendment to any of our material agreements will be disclosed in
a filing with the SEC. Any such amendments would not require approval from our stockholders, may result in the completion of our initial
business combination that may not otherwise have been possible, and may have an adverse effect on the value of an investment in our securities.
For example, amendments to the lock-up provision discussed above may result in our initial stockholders selling their securities earlier
than they would otherwise be permitted, which may have an adverse effect on the price of our securities.
*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.*
We have not selected any specific business combination
target but intend to target businesses with enterprise values that are greater than we could acquire with the net proceeds of the initial
public offering and the sale of the private placement units. As a result, if the cash portion of the purchase price exceeds the amount
available from the Trust Account, net of amounts needed to satisfy any redemption by public stockholders, we may be required to seek additional
financing to complete such proposed initial business combination. We cannot assure you that such financing will be available on acceptable
terms, if at all. 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. Further, we may be required to obtain additional financing in connection with the closing of our initial business
combination for general corporate purposes, including for maintenance or expansion of operations of the post-transaction businesses, the
payment of principal or interest due on indebtedness incurred in completing our initial business combination, or to fund the purchase
of other companies. If we are unable to complete our initial business combination, our public stockholders may only receive their pro
rata portion of the funds in the Trust Account that are available for distribution to public stockholders, 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 stockholders is required to provide
any financing to us in connection with or after our initial business combination.
26
*Our initial stockholders control a substantial
interest in us and thus may exert a substantial influence on actions requiring a stockholder vote, potentially in a manner that you do
not support.*
As of the date of this Annual Report on Form 10-K,
our initial stockholders own approximately 99.7% of our issued and outstanding common stock. Accordingly, they may exert a substantial
influence on actions requiring a stockholder vote, potentially in a manner that you do not support, including amendments to our amended
and restated certificate of incorporation. If our initial stockholders purchase any additional Class A common stock in the aftermarket
or in privately negotiated transactions, this would increase their control. Neither our initial stockholders nor, to our knowledge, any
of our officers or directors, have any current intention to purchase additional securities, other than as disclosed in this Annual Report
on Form 10-K. Factors that would be considered in making such additional purchases would include consideration of the current trading
price of our Class A common stock. 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 three years with only one class of directors being elected in each
year. We may not hold an annual meeting of stockholders 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 initial stockholders, because of their ownership position, will have considerable influence regarding
the outcome. Accordingly, our initial stockholders will continue to exert control at least until the completion of our initial business
combination.
*Our initial business combination and our
structure thereafter may not be tax-efficient to our stockholders and warrant holders. 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-efficient manner, 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 stockholder approval, we may structure our business combination in a manner that requires
stockholders and/or warrant holders to recognize gain or income for tax purposes, effect a business combination with a target company
in another jurisdiction, or reincorporate in a different jurisdiction (including, but not limited to, the jurisdiction in which the target
company or business is located). We do not intend to make any cash distributions to stockholders or warrant holders to pay taxes in connection
with our business combination or thereafter. Accordingly, a stockholder or a warrant holder 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,
stockholders and warrant holders may 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 United States, 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, local and
non-U.S. taxing authorities. This additional complexity and risk could have an adverse effect on our after-tax profitability and financial
condition.
27
*Resources could be wasted in researching
business combinations that are not completed, which could materially adversely affect subsequent attempts to locate and acquire or merge
with another business. If we are unable to complete our initial business combination, our public stockholders may only receive their pro
rata portion of the funds in the Trust Account that are available for distribution to public stockholders, 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 are unable to complete our initial business combination, our public
stockholders may only receive their pro rata portion of the funds in the Trust Account that are available for distribution to public stockholders,
and our warrants will expire worthless.
*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, subject to their fiduciary duties under Delaware law.
*We may have a limited ability to assess
the management of a prospective target business and, as a result, may effect our initial business combination with a target business whose
management may not have the skills, qualifications or abilities to manage a public company.*
When evaluating the desirability of effecting
our initial business combination with a prospective target business, our ability to assess the target businesss 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
businesss management not possess the skills, qualifications or abilities necessary to manage a public company, the operations and
profitability of the post-combination business may be adversely impacted. Accordingly, any stockholders or warrant holders who choose
to remain stockholders or warrant holders following the business combination could suffer a reduction in the value of their securities.
Such stockholders or warrant 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.
*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 adversely impact the operations and profitability of our post-combination business.*
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.
28
*If we effect our initial business combination
with a company located outside of the United States, we would be subject to a variety of additional risks that may adversely affect us.*
If we pursue a target company with operations
or opportunities outside of the United States 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 adversely impact our operations.
If we pursue a target a company with operations
or opportunities outside of the United States for our initial business combination, we would be subject to risks associated with cross-border
business 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.
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-border business 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; | |
|
|
|
challenges in managing and staffing international operations; | |
|
|
|
longer payment cycles; | |
|
|
|
tax issues, such as tax law changes and variations in tax laws as compared to the United States; | |
|
|
|
currency fluctuations and exchange controls; | |
|
|
|
rates of inflation; | |
|
|
|
challenges in collecting accounts receivable; | |
|
|
|
cultural and language differences; | |
|
|
|
employment regulations; | |
29
|
|
|
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 and wars; and | |
|
|
|
deterioration of political relations with the United States. | |
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
initial business combination, our operations might suffer, either of which may adversely impact our business, financial condition and
results of operations.
*If our management following our initial
business combination is unfamiliar with U.S. 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, any
or all of our management could resign from their positions as officers of the Company, and the management of the target business at the
time of the business combination could remain in place. Management of the target business may not be familiar with U.S. securities laws.
If new management is unfamiliar with U.S. securities laws, they may have to expend time and resources becoming familiar with such laws.
This could be expensive and time-consuming and could lead to various regulatory issues which may adversely affect our operations.
*We may issue notes or other debt securities,
or otherwise incur substantial debt, to complete a business combination, which may adversely affect our leverage and financial condition
and thus adversely impact the value of our stockholders investment in us.*
We may choose to incur substantial debt to complete
our initial business combination. We and our officers have agreed that we will not incur any indebtedness unless we have obtained from
the lender a waiver of any right, title, interest or claim of any kind in or to the monies held in the Trust Account. As such, no issuance
of debt will affect the per share amount available for redemption from the Trust Account. Nevertheless, the incurrence of debt could have
a variety of negative effects, including:
|
|
|
default and foreclosure on our assets if our operating revenues after an initial business combination are insufficient to repay our debt obligations; | |
|
|
|
acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant; | |
|
|
|
our immediate payment of all principal and accrued interest, if any, if the debt is payable on demand; | |
|
|
|
our inability to obtain necessary additional financing if the debt contains covenants restricting our ability to obtain such financing while the debt is outstanding; | |
|
|
|
our inability to pay dividends on our Class A common stock; | |
30
|
|
|
using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our Class A common stock, expenses, capital expenditures, acquisitions and other general corporate purposes; | |
|
|
|
limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate; | |
|
|
|
increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation; and | |
|
|
|
limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, execution of our strategy and other purposes and other disadvantages compared to our competitors who have less debt. | |
*We may only be able to complete one business
combination with the proceeds of the initial public offering 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 adversely impact
our operations and profitability.*
The net proceeds from the initial public offering
and the sale of the private placement units provided us with $247,331,250 that we may use to complete our initial business combination
(after taking into account the $8,956,250 of deferred underwriting commissions being held in the Trust Account).
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 adversely 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 investigations (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 are unable to adequately address these risks, it could adversely impact our profitability and results of operations.
31
*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 business combination 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.
*We may issue our shares to investors in
connection with our initial business combination at a price that is less than the prevailing market price of our shares at that time.*
In connection with our initial business combination,
we may issue shares to investors in private placement transactions (so-called PIPE transactions). The purpose of such issuances will be
to enable us to provide sufficient liquidity to the post-business combination entity. The price of the shares we issue may be less, and
potentially significantly less, than the market price for our shares at such time.
Risks Relating to our Sponsor and Management Team
*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 our
post-combination business.*
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 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 employ 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.
In addition, the officers and directors of an initial business combination candidate may resign upon completion of our initial business
combination. The departure of an initial business combination targets key personnel could negatively impact the operations and
profitability of our post-combination business. The role of an initial business combination 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 initial business
combination candidates management team will remain associated with the initial business combination candidate following our initial
business combination, it is possible that members of the management of an initial business combination candidate will not wish to remain
in place. The loss of key personnel could negatively impact the operations and profitability of our post-combination business.
*We are dependent upon our executive officers
and directors and their departure 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. We do not have an employment agreement with, or key-man insurance 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.
32
*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 shares of common stock to materially decline.*
While we offered our units at an offering price
of $10.00 per unit and the amount in the Trust Account was initially anticipated to be $10.10 per public share, implying an initial value
of $10.10 per public share, our Sponsor paid only a nominal aggregate purchase price of $25,000 for the founder shares, or approximately
$0.003 per share. As a result, the value of your public shares may be significantly diluted in the event we consummate an initial business
combination.
Our Sponsor invested an aggregate of $9,562,500
in us in connection with the initial public offering, comprised of the $25,000 purchase price for the founder shares and the $9,537,500
purchase price for the private placement units. As a result, even if the trading price of our shares of common stock significantly declines,
our Sponsor will stand to make significant profit on its investment in us. In addition, our Sponsor could potentially recoup its entire
investment in us even if the trading price of our shares of common stock is less than $0.98 per share. As a result, our Sponsor is likely
to make a substantial profit on its investment in us even if we select and consummate an initial business combination that causes the
trading price of our shares of common stock to decline, while our public stockholders who purchased their units in the initial public
offering could lose significant value in their public shares. Our Sponsor may therefore be economically incentivized to consummate an
initial business combination with a riskier, weaker-performing or less established target business than would be the case if our Sponsor
had paid the same per share price for the founder shares as our public stockholders paid for their public shares.
*Since our Sponsor, executive officers and
directors will lose their entire investment in us if our initial business combination is not completed (other than with respect to public
shares they may acquire during or after the initial public offering), a conflict of interest may arise in determining whether a particular
business combination target is appropriate for our initial business combination.*
In August 2021, our Sponsor paid $25,000 to cover
certain of our offering costs in exchange for 7,362,500 founder shares, and in November 2021, we effected a 1.36672326 for 1 stock split
of our shares of common stock, so that our Sponsor owned an aggregate of 10,062,500 founder shares. In connection with the underwriters
partial exercise of their over-allotment option on December 28, 2021, the Sponsor forfeited 1,181,250 founder shares, resulting in the
Sponsor holding 8,881,250 founder shares. Prior to the initial investment in the company of $25,000 by the Sponsor, the company had no
assets, tangible or intangible. The purchase price of the founder shares was determined by dividing the amount of cash contributed to
the company by the number of founder shares issued.
The number of founder shares outstanding was determined
based on the expectation that the total size of the initial public offering would be a maximum of 28,750,000 units if the underwriters
over-allotment option is exercised in full, and therefore that such founder shares would represent 25.28% of the outstanding shares of
common stock (including the public shares, private placement units and founder shares) after the initial public offering. Up to 1,312,500
of the founder shares were subject to forfeiture by the Sponsor depending on the extent to which the underwriters over-allotment
was exercised. The founder shares will be worthless if we do not complete an initial business combination. In addition, our Sponsor purchased
an aggregate of 953,750 private placement units at a price of $10.00 per unit, or $9,537,500, that will also be worthless if we do not
complete our initial business combination. Each private placement unit consists of one share of Class A common stock and one-half of one
warrant. Each whole warrant is exercisable to purchase one whole share of common stock at $11.50 per share. These securities will also
be worthless if we do not complete an initial business combination and our Sponsor and members of our board of directors acquired founder
shares for approximately $0.003 per share and we offered units at a price of $10.00 per unit in the initial public offering; as a result,
our Sponsor and members of our board of directors could make a substantial profit after the initial business combination even if public
investors experience substantial losses 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 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 June 14, 2026 nears, which is the deadline for our completion of an initial business combination.
33
*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-time employees prior
to the completion of our initial business combination. Each of our executive officers is engaged in several other business endeavors for
which he or she may be entitled to substantial compensation, and our executive officers are not obligated to contribute any specific number
of hours per week to our affairs. 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. For a complete discussion of our executive officers and directors
other business affairs, please see Directors, Executive Officers and Corporate Governance - Directors and Executive Officers.
*Our officers and directors presently have,
and any of them in the future may have additional, fiduciary or contractual obligations to other entities 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 will 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, subject to our directors
and officers fiduciary duties under the DGCL. Our amended and restated certificate of incorporation provides that we renounce our
interest in any corporate 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 such opportunity is one we are legally and contractually permitted
to undertake and would otherwise be reasonable for us to pursue, and to the extent the director or officer is permitted to refer that
opportunity to us without violating another legal obligation. In addition, our Sponsor and our officers and directors may Sponsor, invest
in, form or otherwise become involved with any other special purpose acquisition companies similar to ours, including in connection with
their initial business combinations, 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 ventures may present additional conflicts of interest in pursuing an initial
business combination. However, we do not believe that any such potential conflicts would materially affect our ability to complete our
initial business combination.
For a complete discussion of our executive officers
and directors business affiliations and the potential conflicts of interest that you should be aware of, please see Directors,
Executive Officers and Corporate Governance - Directors and Executive Officers, Directors, Executive Officers and Corporate
Governance - Conflicts of Interest and Certain Relationships and Related Transactions, and Director Independence.
*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, although
we do not intend to do so. 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 officers and directors 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 stockholders best interest. If this were the case, it would be a breach of their
fiduciary duties to us as a matter of Delaware law and we or our stockholders might have a claim against such individuals for infringing
on our stockholders rights. However, we might not ultimately be successful in any claim we may make against them for such reason.
34
*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 existing holders 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 existing holders. Our directors also serve as officers and board members for other entities including, without limitation,
those described under Directors, Executive Officers and Corporate Governance - Conflicts of Interest. 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 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 from another independent entity that commonly renders
valuation opinions 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 existing holders, 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 stockholders as they
would be absent any conflicts of interest.
*Our management may not be able to maintain
control of a target business after our initial business combination. We cannot provide assurance that, upon loss of control of a target
business, new management will possess the skills, qualifications or abilities necessary to profitably operate such business.*
We may structure our initial business combination
so that the post-transaction company in which our public stockholders 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-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 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-transaction company owns 50% or more of the voting securities of the target, our stockholders prior
to the 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 shares of Class A common stock 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 shares of Class A common stock,
our stockholders immediately prior to such transaction could own less than a majority of our outstanding Class A common stock subsequent
to such transaction. In addition, other minority stockholders 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.
*Members of our management team and board
of directors have significant experience as founders, board members, officers or executives of other companies. As a result, certain of
those persons have been, or may become, involved in proceedings, investigations and litigation relating to the business affairs of the
companies with which they were, are, or may be in the future be, affiliated. These activities may have an adverse effect on us, which
may impeded 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 or executives of other
companies. As a result of their involvement and positions in these companies, certain of those persons, are now, or may in the future
become, involved in litigation, investigations or other proceedings relating to the business affairs of such companies or transactions
entered into by such companies. Any such litigation, investigations or other proceedings may divert the attention and resources of the
members of both our management team and our 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.
35
Risks Relating to our Securities
*Our securities have been delisted from trading
on NYSE American, which could limit investors ability to make transactions in our securities and subject us to additional trading
restrictions.*
On December 19, 2024, NYSE American filed a Form
25 to delist the Companys securities and to remove such securities from registration under Section 12(b) of the Securities Exchange
Act of 1934 because we failed to consummate a business combination within 36 months of our initial public offering as required by the
NYSE American rules. Such delisting took effect approximately 10 days after the filing of Form 25, or December 30, 2024. Our Class A common
stock, Units and Warrants currently trade on the OTC Markets OTCPK under the symbols ATEK, ATEK.U and ATEK
WS, respectively. The Company remains subject to the periodic reporting requirements of the Exchange Act. Because our securities
were delisted from NYSE American and are no longer listed on a national securities exchange, we may face significant material adverse
consequences, including: (i) a limited availability of market quotations for our securities, (ii) reduced liquidity for our securities,
and (iii) a less attractive acquisition vehicle to a target business in connection with an initial business combination.
The National Securities Markets Improvement Act
of 1996, 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 our Class A common stock, Units and Warrants were delisted from NYSE American and trade
on OTC Markets OTCPK, our Class A common stock, Units and Warrants do not qualify as covered securities under the Securities Act and we
are subject to regulation in each state in which we offer our securities. Public shareholders who do not elect to redeem their Public
Shares in connection with the shareholder meeting to approve the Business Combination may be unable to recover their investment except
through sales of our shares on the open market or upon our liquidation or redemption of shares. The price of our shares may be volatile,
and there can be no assurance that shareholders will be able to dispose of our shares at favorable prices, or at all.
*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 trust such that the
per-share redemption amount received by public stockholders may be less than the $14.41 per share held in the Trust Account as of December
31, 2025.*
The proceeds held in the Trust Account are invested
only 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. While short-term
U.S. government treasury obligations currently yield a positive rate of interest, they have briefly yielded negative interest rates in
recent years. Central banks in Europe and Japan pursued interest rates below zero in recent years, 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 United States. In the event
that we are unable to complete our initial business combination or make certain amendments to our amended and restated certificate of
incorporation, our public stockholders are entitled to receive their pro-rata share of the proceeds held in the Trust Account, plus any
interest income, net of taxes paid or payable (less, in the case we are unable to complete our initial business combination, $100,000
of interest to pay dissolution expenses). Negative interest rates could reduce the value of the assets held in trust such that the per-share
redemption amount received by public stockholders may be less than the $14.41 per share held in the Trust Account as of December 31,
2025.
*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 | |
36
|
|
|
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 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-transaction business or assets for the long term. 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 invested in
United States government securities within the meaning of Section 2(a)(16) of the Investment Company Act having a maturity
of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated 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 initial public offering is not intended for persons who are seeking a return on investments in government securities or investment
securities. The Trust Account is intended as a holding place for funds pending the earliest to occur of either: (i) the completion of
our initial business combination; (ii) the redemption of any public shares properly tendered in connection with a stockholder vote to
amend our amended and restated certificate of incorporation to modify the substance or timing of our obligation to redeem 100% of our
public shares if we do not complete our initial business combination by June 14, 2026 or with respect to any other material provisions
relating to stockholders rights (including redemption rights) or pre-initial business combination activity; or (iii) absent an
initial business combination by June 14, 2026, our return of the funds held in the Trust Account to our public stockholders 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. If we were deemed to be subject to the Investment Company Act, compliance with these additional regulatory burdens would
require additional expenses for which we have not allotted funds and may hinder our ability to complete a business combination. If we
are unable to complete our initial business combination, our public stockholders may only receive their pro rata portion of the funds
in the Trust Account that are available for distribution to public stockholders, and our warrants will expire worthless.
*Increases in inflation and interest rates
in the United States and elsewhere could make it more difficult for us to consummate an initial business combination.*
Increases in inflation and interest rates in the
United States and elsewhere may lead to increased price volatility for publicly traded securities, including ours, and may lead to other
national, regional and international economic disruptions, any of which could make it more difficult for us to consummate an initial business
combination.
37
*If we are deemed to be an investment company
for purposes of the Investment Company Act, we may be forced to abandon our efforts to complete an initial business combination and instead
be required to liquidate the Company. In an effort to mitigate the risk of that result we may instruct Continental Stock Transfer &
Trust Company to liquidate the securities held in the Trust Account and instead hold all funds in the Trust Account in cash. As a result,
following such a change, we would likely receive minimal, if any, interest, on the funds held in the Trust Account, which would reduce
the dollar amount that our public stockholders would otherwise receive upon any redemption or liquidation of the Company if the assets
in the Trust Account had remained in U.S. government securities or money market funds.*
**
On January 24, 2024, the SEC issued final rules
(the 2024 SPAC Rules), which became effective on July 1, 2024, that formally adopted some of the SECs proposed rules
for SPACs that were released on March 30, 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, including requiring disclosure of all material bases of the projections and all material assumptions
underlying the projections; 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 Act. 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.
**
There is currently uncertainty concerning the
applicability of the Investment Company Act to a SPAC. It is possible that a claim could be made that we have been operating as an unregistered
investment company, including under the subjective test of Section 3(a)(1)(A) of the Investment Company Act, based on the current views
of the SEC. If we were deemed to be an investment company for purposes of the Investment Company Act, we might be forced to abandon our
efforts to complete an initial business combination and instead be required to liquidate the Company. If we are required to liquidate
the Company, our investors would not be able to realize the benefits of owning shares in a successor operating business, including the
potential appreciation in the value of our shares and warrants or rights following such a transaction, and our warrants or rights would
expire worthless.
The funds in the Trust Account have, since our
initial public offering, been held only in U.S. government treasury obligations with a maturity of 185 days or less or in money market
funds investing solely in U.S. government treasury obligations and meeting certain conditions under Rule 2a-7 under the Investment Company
Act. To mitigate the risk of us being deemed to have been operating as an unregistered investment company under the Investment Company
Act, we may, in our discretion (assuming that we are to amend our Amended and Restated Certificate of Incorporation to extend the amount
of time we have to complete our initial business combination beyond the 18 months from the closing of our initial public offering currently
available), 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 (i.e., in one or more bank accounts) until the earlier of the consummation of a business combination or our liquidation. Following
such liquidation of the assets in our Trust Account, we would likely receive minimal interest, if any, on the funds held in the Trust
Account, which would reduce the dollar amount our public stockholders would otherwise receive upon any redemption or liquidation of the
Company if the assets in the Trust Account had remained in U.S. government securities or money market funds. This means that the amount
available for redemption may not increase in the future.
We may nonetheless be deemed to be an investment
company. The longer that the funds in the Trust Account are held in short-term U.S. government securities or in money market funds invested
exclusively in such securities, there is a greater risk that we may be considered an unregistered investment company, in which case we
may be required to liquidate. For so long as the funds in the Trust Account are held in short-term U.S. government securities or in money
market funds invested exclusively in such securities, the risk that we may be considered an unregistered investment company and required
to liquidate is greater than that of a special purpose acquisition company that has elected to liquidate such investments and to hold
all funds in its Trust Account in cash (i.e., in one or more bank accounts). Accordingly, we may determine, in our discretion, to liquidate
the securities held in the Trust Account at any time, and instead hold all funds in the Trust Account in cash, which would further reduce
the dollar amount our public stockholders would receive upon any redemption or our liquidation.
38
*If we seek stockholder 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 stockholders
are deemed to hold in excess of 15% of our Class A common stock, you will lose the ability to redeem all such shares in excess of 15%
of our Class A common stock.*
If we seek stockholder 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 certificate of incorporation provides that a public stockholder, together with any affiliate of such stockholder
or any other person with whom such stockholder 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 shares sold in the initial
public offering without our prior consent, which we refer to as the Excess Shares. However, we would not be restricting
our stockholders 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 15% and, in order to dispose of such shares, would be required to sell your
shares in open market transactions, potentially at a loss.
*Since our Sponsor paid only approximately
$0.003 per share for the founder shares, certain of our officers and directors could potentially make a substantial profit even if we
acquire a target business that subsequently declines in value.*
In August 2021, we issued 7,362,500 founder shares
to our Sponsor in exchange for a capital contribution of $25,000, and in November 2021, we effected a 1.36672326 for 1 stock split of
our shares of common stock, so that our Sponsor owned an aggregate of 10,062,500 founder shares. In connection with the underwriters
partial exercise of their over-allotment option on December 28, 2021, our Sponsor forfeited 1,181,250 founder shares, resulting in our
Sponsor holding 8,881,250 founder shares. Our Sponsor paid approximately $0.003 per share for the founder shares. Certain of our officers
and directors have a significant economic interest in our Sponsor. As a result, the low acquisition cost of the founder shares creates
an economic incentive whereby our officers and directors could potentially make a substantial profit even if we complete a business combination
with a target business that subsequently declines in value and is unprofitable for public investors.
*We may issue additional shares of Class
A common stock or shares of preferred stock to complete our initial business combination or under an employee incentive plan after completion
of our initial business combination. We may also issue shares of Class A common stock upon the conversion of the founder shares at a ratio
greater than one-to-one at the time of our initial business combination as a result of the anti-dilution provisions contained in our amended
and restated certificate of incorporation. Any such issuances would dilute the interest of our stockholders and likely present other risks.*
Our amended and restated certificate of incorporation
authorizes the issuance of up to 100,000,000 shares of Class A common stock, par value $0.0001 per share, 10,000,000 shares of Class B
common stock, par value $0.0001 per share, and 1,000,000 shares of preferred stock, par value $0.0001 per share. As of December 31, 2025,
there were 90,140,113 and 10,000,000 authorized but unissued shares of Class A common stock and Class B common stock, respectively,
available for issuance which amount does not take into account shares reserved for issuance upon exercise of outstanding warrants. Immediately
after the initial public offering, there were no shares of preferred stock issued and outstanding.
We may issue a substantial number of additional
shares of Class A common stock or shares of preferred stock to complete our initial business combination or under an employee incentive
plan after completion of our initial business combination. We may also issue shares of Class A common stock upon conversion of the Class
B common stock at a ratio greater than one-to-one at the time of our initial business combination as a result of the anti-dilution provisions
as set forth therein. However, our amended and restated certificate of incorporation provides, among other things, that prior to 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 any initial business combination or (b) to approve an amendment to our amended and
restated certificate of incorporation to (x) extend the time we have to consummate a business combination beyond June 14, 2026 or (y)
amend the foregoing provisions. These provisions of our amended and restated certificate of incorporation, like all provisions of our
amended and restated certificate of incorporation, may be amended with a stockholder vote. The issuance of additional shares of common
stock or shares of preferred stock:
|
|
|
may significantly dilute the equity interest of investors in the initial public offering; | |
39
|
|
|
may subordinate the rights of holders of Class A common stock if shares of preferred stock are issued with rights senior to those afforded our Class A common stock; | |
|
|
|
could cause a change in control if a substantial number of shares of Class A common stock is issued, which could result in the resignation or removal of our present officers and directors; and | |
|
|
|
may adversely affect prevailing market prices for our units, Class A common stock and/or warrants. | |
*You will not be permitted to exercise your
warrants unless we register and qualify the underlying Class A common stock or certain exemptions are available.*
If the issuance of the Class A common stock 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 common stock included in the units.
We have agreed that as soon as practicable, but
in no event later than 15 business days after the closing of our initial business combination, we will use our best efforts to file with
the SEC a post-effective amendment to the registration statement relating to the initial public offering or a new registration statement
covering the registration under the Securities Act of the Class A common stock issuable upon exercise of the warrants and thereafter will
use our best efforts to cause the same to become effective within 60 business days following our initial business combination and to maintain
a current prospectus relating to the Class A common stock issuable upon exercise of the warrants until the expiration of the warrants
in accordance with the provisions of the public warrant agreement and private warrant agreement (as may be amended and restated, the private
warrant agreement, and together with the public warrant agreement, the warrant agreements). 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 shares of Class A common stock issuable
upon exercise of the warrants are not registered under the Securities Act, under the terms of the public 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 Section 3(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.
If our shares of Class A common stock are at the
time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition of covered
securities under Section 18(b)(1) of the Securities Act, we may, at our option, not permit holders of warrants who seek to exercise
their warrants to do so for cash and, instead, require them to do so on a cashless basis in accordance with Section 3(a)(9) of the Securities
Act; in the event we so elect, we will not be required to file or maintain in effect a registration statement or register or qualify the
shares underlying the warrants under applicable state securities laws, and in the event we do not so elect, we will use our best efforts
to register or qualify the shares underlying the warrants under applicable state securities laws to the extent an exemption is not available.
40
In no event will we be required to net cash settle
any warrant, or issue securities (other than upon a cashless exercise as described above) or other compensation in exchange for the warrants
in the event that we are unable to register or qualify the shares underlying the warrants under the Securities Act or applicable state
securities laws.
*You may only be able to exercise your public
warrants on a cashless basis under certain circumstances, and if you do so, you will receive fewer shares of Class A common
stock from such exercise than if you were to exercise such warrants for cash.*
The public warrant agreement provides that in
the following circumstances holders of warrants who seek to exercise their warrants will not be permitted to do for cash and will, instead,
be required to do so on a cashless basis in accordance with Section 3(a)(9) of the Securities Act: (i) if the shares of Class A common
stock issuable upon exercise of the warrants are not registered under the Securities Act in accordance with the terms of the public warrant
agreement; (ii) if we have so elected and the shares of Class A common stock is at the time of any exercise of a warrant not listed on
a national securities exchange such that they satisfy the definition of covered securities under Section 18(b)(1) of the
Securities Act; and (iii) if we have so elected and we call the public warrants for redemption. If you exercise your public warrants on
a cashless basis, you would pay the warrant exercise price by surrendering the warrants for that number of shares of Class A common stock
equal to the quotient obtained by dividing (x) the product of the number of shares of Class A common stock underlying the warrants, multiplied
by the excess of the fair market value of our shares of Class A common stock (as defined in the next sentence) over the
exercise price of the warrants by (y) the fair market value. The fair market value is the average reported closing price
of the shares of Class A common stock for the 10 trading days ending on the third trading day prior to the date on which the notice of
exercise is received by the warrant agent or on which the notice of redemption is sent to the holders of warrants, as applicable. As a
result, you would receive fewer shares of Class A common stock from such exercise than if you were to exercise such warrants for cash.
*We may amend the terms of the public warrants
in a manner that may be adverse to holders of public warrants with the approval by the holders of at least a majority of the then outstanding
public warrants. As a result, the exercise price of your warrants could be increased, the exercise period could be shortened and the number
of shares of Class A common stock purchasable upon exercise of a warrant could be decreased, all without your approval.*
Our public warrants will be issued in registered
form under a public warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and us. The public warrant
agreement provides that the terms of the public warrants may be amended without the consent of any holder to cure any ambiguity or correct
any defective provision, but requires the approval by the holders of at least a majority of the then outstanding public warrants 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 a majority of the then outstanding public warrants approve of such
amendment. Although our ability to amend the terms of the public warrants with the consent of at least a majority of the then outstanding
public warrants is unlimited, examples of such amendments could be amendments to, among other things, increase the exercise price of the
public warrants, convert the public warrants into cash or stock (at a ratio different than initially provided), shorten the exercise period
or decrease the number of shares of Class A common stock purchasable upon exercise of a public warrant.
*Our public warrant agreement designates
the courts of the State of New York or the United States District Court for the Southern District of New York as the sole and exclusive
forum for certain types of actions and proceedings that may be initiated by holders of our public warrants, which could limit the ability
of warrant holders to obtain a favorable judicial forum for disputes with our company.*
Our public 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 public warrant agreement,
including under the Securities Act, will be brought and enforced in the courts of the State of New York or the United States District
Court for the Southern District of New York, 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.
41
Notwithstanding the foregoing, these provisions
of the public warrant agreement will not apply to suits brought to enforce any liability or duty created by the Exchange Act or any other
claim for which the federal district courts of the United States of America are the sole and exclusive forum. Any person or entity purchasing
or otherwise acquiring any interest in any of our public warrants shall be deemed to have notice of and to have consented to the forum
provisions in our public warrant agreement. If any action, the subject matter of which is within the scope the forum provisions of the
public warrant agreement, is filed in a court other than a court of the State of New York or the United States District Court for the
Southern District of New York (a foreign action) in the name of any holder of our public 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 New York 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-forum provision 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 public 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.
*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 outstanding 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 common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock capitalizations, reorganizations,
recapitalizations and the like) for any 20 trading days within a 30 trading-day period commencing once the warrants become exercisable
and ending on the third trading day prior to proper notice of such redemption provided that on the date we give notice of redemption.
We will not redeem the warrants unless an effective registration statement under the Securities Act covering the shares of Class A common
stock issuable upon exercise of the warrants is effective and a current prospectus relating to those shares of Class A common stock is
available throughout the 30-day redemption period, except if the warrants may be exercised on a cashless basis and such cashless exercise
is exempt from registration under the Securities Act. 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. 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-current market 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, is likely
to be substantially less than the market value of your warrants.
*Our warrants and founder shares may have
an adverse effect on the market price of our shares of Class A common stock and make it more difficult to effectuate our initial business
combination.*
We issued warrants to purchase 12,687,500 shares
of our Class A common stock as part of the units. Simultaneously with the closing of the initial public offering, we issued in a private
placement an aggregate of 953,750 private placement units at a price of $10.00 per unit, or $9,537,500. Each private placement unit consists
of one private placement share and one-half of one private placement warrant and each private placement warrant is exercisable to purchase
one share of Class A common stock at a price of $11.50 per share, subject to adjustment as provided herein. In addition, if our Sponsor
or an affiliate of our Sponsor or certain of our officers and directors makes any working capital loans, such lender may convert those
loans into up to an additional 150,000 private placement-equivalent units, at the price of $10.00 per unit. The units would be identical
to the private placement units. To the extent we issue common stock to effectuate a business transaction, the potential for the issuance
of a substantial number of additional shares of Class A common stock 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 shares of Class A common
stock and reduce the value of the Class A common stock 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.
42
The private placement warrants included in the
private placement units are identical to the warrants sold as part of the units in the initial public offering except that, so long as
they are held by our Sponsor or its permitted transferees, (i) they (including the Class A common stock issuable upon exercise of these
warrants) may not, subject to certain limited exceptions, be transferred, assigned or sold by our Sponsor until 30 days after the completion
of our initial business combination and (ii) they may be exercised by the holders on a cashless basis.
*Because each unit contains one-half of one
public warrant and only a whole warrant may be exercised, the units may be worth less than units of other special purpose acquisition
companies.*
Each unit contains one-half of one public warrant.
Pursuant to the public warrant agreement, no fractional warrants will be issued upon separation of the units, and only whole units will
trade. If, upon exercise of the public 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 shares of Class A common stock to be issued to the warrant holder. This
is different from other offerings similar to ours whose units include one common share and one 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-half of the number of shares compared to units that each contain
a whole warrant to purchase one 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 it 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 shares of common stock or equity-linked securities for capital raising purposes in connection with the closing of our initial
business combination at an issue price or effective issue price of less than $9.20 per share of common stock (with such issue price or
effective issue price to be determined in good faith by our board of directors and, in the case of any such issuance to our sponsor or
its affiliates, without taking into account any founder shares held by our sponsor or such affiliates, as applicable, prior to such issuance)
(the Newly Issued Price), (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 on the date of the consummation of our initial
business combination (net of redemptions), and (iii) the volume weighted average trading price of our Class A common stock during the
20 trading day period starting on the trading day prior to the day on which we consummate our 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 be equal to 115%
of the greater 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 grant of registration rights to our
initial stockholders and holders of our private placement units 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 shares of Class A common stock.*
Pursuant to an agreement entered into concurrently
with the issuance and sale of the securities in the initial public offering, our initial stockholders and their permitted transferees
can demand that we register the private placement warrants, the shares of Class A common stock issuable upon exercise of the private placement
warrants, the shares of Class A common stock issuable upon conversion of the founder shares, the shares of Class A common stock included
in the private placement units and holders of units that may be issued upon conversion of working capital loans may demand that we register
such Class A common stock, warrants or the Class A common stock issuable upon exercise of such units and 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 common stock. In addition, the existence of the registration rights
may make our initial business combination more costly or difficult to conclude. This is because the stockholders 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 Class A common stock that is expected when the shares of common stock owned by our initial stockholders, holders of
our private placement units or holders of our working capital loans or their respective permitted transferees are registered.
43
*Provisions in our amended and restated certificate
of incorporation and Delaware law may inhibit a takeover of us, which could limit the price investors might be willing to pay in the future
for our shares of Class A common stock and could entrench management.*
Our amended and restated certificate of incorporation
contains provisions that may discourage unsolicited takeover proposals that stockholders may consider to be in their best interests. These
provisions include a staggered board of directors and the ability of the board of directors to designate the terms of and issue new series
of preferred stock, 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.
We are also subject to anti-takeover provisions
under Delaware law, which could delay or prevent a change of control. Together these provisions may make the removal of management more
difficult and may discourage transactions that otherwise could involve payment of a premium over prevailing market prices for our securities.
*An investment in our securities may result
in uncertain or adverse U.S. federal income tax consequences.*
An investment in our securities may result in
uncertain U.S. federal income tax consequences. For instance, because there are no authorities that directly address the U.S. federal
income tax implications of instruments similar to our units, their treatment for U.S. federal income tax purposes is uncertain, and the
allocation an investor makes with respect to the purchase price of a unit between the share of Class A common stock and the one-half of
one redeemable warrant included in each unit could be challenged by the Internal Revenue Service (IRS) or the courts. In
addition, if we are determined to be a personal holding company for U.S. federal income tax purposes, our undistributed taxable income
would be subjected to an additional 20% federal income tax, which would reduce the net after-tax amount of interest income earned on the
funds placed in our Trust Account. Furthermore, the U.S. federal income tax consequences of a cashless exercise of warrants included in
our units is unclear under current law. Finally, it is unclear whether the redemption rights with respect to our 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 common stock is long-term capital gain or loss, (ii) any dividends we pay would be considered qualified dividends
for U.S. federal income tax purposes and (iii) any dividend we pay would be eligible for the corporate dividends-received deduction. Prospective
investors are urged to consult their tax advisors with respect to these and other tax consequences when purchasing, holding or disposing
of our securities.
*A 1% U.S. federal excise tax was previously
and may in the future be imposed in the future on us in connection with redemptions by us of our shares or our liquidation.*
On August 16, 2022, President Biden signed into
law the Inflation Reduction Act of 2022 (the IR Act), which, among other things, generally imposes a 1% U.S. federal excise
tax (the Excise Tax) on certain repurchases of stock by covered corporations (which include publicly traded
U.S. corporations) occurring on or after January 1, 2023. The Excise Tax is imposed on the repurchasing corporation itself, not its stockholders
from which the stock is repurchased. Because we are a Delaware corporation and our securities were trading on the NYSE or NYSE American
at the time of redemptions, we are a covered corporation for this purpose. 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. 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.
In connection with the stockholders vote
at the Special Meeting of Stockholders held on June 13, 2023, there were 23,176,961 shares tendered for redemption and approximately $239,604,919
was paid out of the Trust Account to the redeeming stockholders. The Company recorded 1% excise tax based on the amount redeemed or an
aggregate amount of $2,396,049 excise tax payable as of December 31, 2023.
In connection with the stockholders vote
at the Special Meeting of Stockholders held on March 12, 2024, there were 910,258 shares tendered for redemption and approximately $10,179,663
was paid out of the Trust Account on April 5, 2024 to the redeeming stockholders. The Company has recorded 1% excise tax based on the
amount redeemed or an aggregate amount of $101,797.
44
In connection with the stockholders vote
at the 2024 Annual Meeting held on December 10, 2024, there were 977,625 shares tendered for redemption and approximately $11,497,959
was paid out of the Trust Account on December 11, 2024 to the redeeming stockholders. The Company has recorded 1% excise tax based on
the amount redeemed or an aggregate amount of $114,980 excise tax payable. As of December 31, 2024, the Companys aggregate excise
tax payable amounted to $3,501,166 including interest and penalties.
Pursuant to Internal Revenue Service regulations,
the Company was required to file a return and remit payment for the 2023 excise tax liability of $2,396,049 on or before October 31, 2024.
In December 2024, the Internal Revenue Service issued a notice to the Company asserting that $3,284.389.20 was payable with respect to
our 2023 excise tax liability inclusive of associated interest and penalties. The amount payable will continue to increase until paid
as a result of penalties and interest. The Company recognized a total of $888,340 in interest and penalties with respect to the 2023 excise
tax liability through December 31, 2024. The Company was required to file a return and remit payment for the 2024 excise tax liabilities
on or before April 30, 2025.
On November 24, 2025, the IRS published additional
information relating to excise tax on repurchases of corporate stock relating specifically to SPACs. The IRS published that any
SPAC that priced their initial public offering prior to August 16, 2022 is not subject to excise tax on any redemptions. As such, the
Company reversed $3,688,337 of liabilities relating to excise tax due for redemptions occurring in 2023 through 2025 that was accrued
in previous periods. Of the $3,688,337, an amount of $2,612,825 was recorded to accumulated deficit where the initial excise tax in connection
with the redemption of Class A common stock was recorded and is reflected in the unaudited condensed consolidated statements of changes
in stockholders deficit, $888,340 was recorded as a reversal of prior year interest and penalties on excise tax liability and $187,171
was recorded to general and administrative expenses in the accompanying unaudited condensed consolidated statements of operations.
*Whether a redemption of Class A common stock
will be treated as a sale of such Class A common stock for U.S. federal income tax purposes will depend on a stockholders specific
facts.*
The U.S. federal income tax treatment of a redemption
of Class A common stock will depend on whether the redemption qualifies as a sale of such Class A common stock under Section 302(a) of
the Internal Revenue Code of 1986, as amended, which will depend largely on the total number of shares of our stock treated as held by
the stockholder electing to redeem Class A common stock (including any shares of stock constructively owned by the holder as a result
of owning private placement warrants or public warrants or otherwise) relative to all of the shares of our stock outstanding both before
and after the redemption. If such redemption is not treated as a sale of Class A common stock for U.S. federal income tax purposes, the
redemption will instead be treated as a corporate distribution of cash from us.
*Provisions in our amended and restated certificate
of incorporation and Delaware law may have the effect of discouraging lawsuits against our directors and officers.*
Our amended and restated certificate of incorporation
requires, unless we consent in writing to the selection of an alternative forum, that (i) any derivative action or proceeding brought
on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee to us or
our stockholders, (iii) any action asserting a claim against us, our directors, officers or employees arising pursuant to any provision
of the DGCL or our amended and restated certificate of incorporation or bylaws, or (iv) any action asserting a claim against us, our directors,
officers or employees governed by the internal affairs doctrine may be brought only in the Court of Chancery in the State of Delaware,
except any claim (A) as to which the Court of Chancery of the State of Delaware determines that there is an indispensable party not subject
to the jurisdiction of the Court of Chancery (and the indispensable party does not consent to the personal jurisdiction of the Court of
Chancery within ten days following such determination), (B) which is vested in the exclusive jurisdiction of a court or forum other than
the Court of Chancery, or (C) for which the Court of Chancery does not have subject matter jurisdiction. If an action is brought outside
of Delaware, the stockholder bringing the suit will be deemed to have consented to service of process on such stockholders counsel.
Although we believe this provision benefits us by providing increased consistency in the application of Delaware law in the types of lawsuits
to which it applies, a court may determine that this provision is unenforceable, and to the extent it is enforceable, the provision may
have the effect of discouraging lawsuits against our directors and officers, although our stockholders will not be deemed to have waived
our compliance with federal securities laws and the rules and regulations thereunder.
45
Notwithstanding the foregoing, our amended and
restated certificate of incorporation provides that the exclusive forum provision will not apply to suits brought to enforce a duty or
liability created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction. Section 27 of the Exchange
Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the
rules and regulations thereunder.
Additionally, unless we consent in writing to
the selection of an alternative forum, the federal courts shall be the exclusive forum for the resolution of any complaint asserting a
cause of action arising under the Securities Act against us or any of our directors, officers, other employees or agents. Section 22 of
the Securities Act, however, created concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or
liability created by the Securities Act or the rules and regulations thereunder. Accordingly, there is uncertainty as to whether a court
would enforce these exclusive forum provisions, and the enforceability of similar choice of forum provisions in other companies
charter documents has been challenged in legal proceedings. While the Delaware courts have determined that such exclusive forum provisions
are facially valid, a stockholder may nevertheless seek to bring a claim in a venue other than those designated in the exclusive forum
provisions, and there can be no assurance that such provisions will be enforced by a court in those other jurisdictions. Any person or
entity purchasing or otherwise acquiring any interest in our securities shall be deemed to have notice of and consented to these provisions;
however, we note that investors cannot waive compliance with the federal securities laws and the rules and regulations thereunder.
Although we believe this provision benefits us
by providing increased consistency in the application of Delaware law in the types of lawsuits to which it applies, the provision may
limit our stockholders ability to obtain a favorable judicial forum for disputes with us and may have the effect of discouraging
lawsuits against our directors and officers.
General Risk Factors
*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.*
We are a blank check company incorporated under
the laws of the State of Delaware with no operating results, and we will not commence operations until obtaining funding through the initial
public offering. 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. We have no plans, arrangements or understandings with any prospective target business
concerning a business combination and may be unable to complete our initial business combination. If we fail to complete our initial business
combination, we will never generate any operating revenues.
*Past performance by our management team
and 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 businesses associated with them is presented for informational purposes only. Past performance
by our management team is not a guarantee either (i) of success with respect to any business combination we may consummate or (ii) that
we will be able to locate a suitable candidate for our initial business combination. You should not rely on the historical record of the
performance of our management team or businesses associated with them 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.
46
*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 are required to comply with certain SEC and other legal requirements and
in the future may be required to comply with additional such 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.
*We may face risks related to technology
and consumer businesses.*
Business combinations with technology and consumer
businesses entail special considerations and risks. If we are successful in completing a business combination with such a target business,
we may be subject to, and possibly adversely affected by, the following risks after the business combination:
|
|
|
we may invest in new lines of business that could fail to attract or retain users or generate revenue; | |
|
|
|
we will face significant competition and if we are not able to maintain or improve our market share, our business could suffer; | |
|
|
|
the loss of one or more members of our management team, or our failure to attract and retain other highly qualified personnel in the future, could seriously harm our business; | |
|
|
|
if our security is compromised or if our platform is subjected to attacks that frustrate or thwart our users ability to access our products and services, our users, advertisers, and partners may cut back on or stop using our products and services altogether, which could seriously harm our business; | |
|
|
|
mobile malware, viruses, hacking and phishing attacks, spamming, and improper or illegal use of our products could seriously harm our business and reputation; | |
|
|
|
if we are unable to successfully grow our user base and further monetize our products, our business will suffer; | |
|
|
|
if we are unable to protect our intellectual property, the value of our brand and other intangible assets may be diminished, and our business may be seriously harmed; | |
|
|
|
we may be subject to regulatory investigations and proceedings in the future, which could cause us to incur substantial costs or require us to change our business practices in a way that could seriously harm our business; | |
|
|
|
an inability to manage rapid change, increasing consumer expectations and growth; and | |
|
|
|
an inability to build strong brand identity and improve subscriber or customer satisfaction and loyalty. | |
Any of the foregoing could have an adverse impact
on our operations following a business combination. However, our efforts in identifying prospective target businesses will not be limited
to the technology and consumer businesses.
Accordingly, if we acquire a target business in
another industry, these risks we will be subject to risks attendant with the specific industry in which we operate or target business
which we acquire, which may or may not be different than those risks listed above.
47
*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 internal controls 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 nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
As a result, our stockholders may not have access to certain information they may deem important. We could be an emerging growth company
for up to five years, although circumstances could cause us to lose that status earlier, including if the market value of our Class A
common stock held by non-affiliates exceeds $700 million as of any June 30 before that time, in which case we would no longer be an emerging
growth company as of the following December 31. 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, Section 102(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 Exchange Act) 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-emerging growth 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 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 shares of common stock held by non-affiliates exceeds
$250 million as of the prior June 30th, and (2) our annual revenues exceeded $100 million during such completed fiscal year and the market
value of our shares of common stock held by non-affiliates exceeds $700 million as of the prior June 30th. 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.
*Our independent registered public accounting
firms report contains an explanatory paragraph that expresses substantial doubt about our ability to continue as a going
concern.*
In connection with the Companys assessment
of going concern considerations in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification
(ASC) 205-40, Presentation of Financial Statements - Going Concern (ASC 205-40), we have determined
that if the Company is unable to complete a business combination by June 14, 2026, then the Company will cease all operations except for
the purpose of liquidating. The date for mandatory liquidation and subsequent dissolution raise substantial doubt about the Companys
ability to continue as a going concern. The financial statements contained elsewhere in this Annual Report on Form 10-K do not include
any adjustments that might result from our inability to continue as a going concern.
48
Item 1B. Unresolved Staff Comments.
None.
Item 1C. Cybersecurity.
We are a SPAC with no business operations. Since our IPO, our sole business activity has been identifying and evaluating suitable acquisition transaction candidates. Therefore, we do not consider that we face significant cybersecurity risk and have not adopted any cybersecurity risk management program or formal processes for assessing cybersecurity risk. However, because we have investments in our Trust Account and bank deposits and we depend on the digital technologies of third parties, including information systems, we and third parties may be subject to attacks on or security breaches in systems or infrastructure we utilize which 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 is generally responsible for the oversight of risks from cybersecurity threats, if any. In the event of a cybersecurity incident impacting us, the management team expects to report to the board of directors and provide updates on the management teams incident response plan for addressing and mitigating any risks associated with such an incident. As an early-stage company without significant investments in data security protection, we may not be sufficiently protected against such occurrences. We also lack 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 material adverse consequences on our business and lead to financial loss. We have not encountered any cybersecurity incidents since our IPO.
Item 2. Properties.
We currently utilize office space at 442 5th Avenue,
New York, NY 10018 from our Sponsor. We have agreed to pay our Sponsor a total of $10,000 per month for office space, secretarial and
administrative services provided to members of our management team. 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.
49
PART II
Item 5. Market for Registrants Common
Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
Market Information
Our units, Class A common stock and warrants are
traded on OTC Markets OTCPK under the symbols ATEK.U, ATEK and ATEK WS, respectively. Over-the-counter
market quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual
transactions.
Holders
As
of March 6, 2026, there were two holders of record of our units, one holder of record of our Class A common stock and one holder of record
of our warrants. The actual number of stockholders of our common stock is greater than the number of record holders and includes stockholders
whose common stock are held in street name by brokers and other nominees.
Dividends
We have not paid any cash dividends on our common
stock to date and do not intend to pay cash dividends prior to the completion of our 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 condition
subsequent to completion of our initial business combination. Further, if we incur any indebtedness in connection with our initial business
combination, our ability to declare dividends may be limited by restrictive covenants we may agree to in connection therewith. The payment
of any cash dividends subsequent to our initial business combination will be within the discretion of our board of directors at such time.
Securities Authorized for Issuance Under Equity Compensation Plans
None.
Recent Sales of Unregistered Securities; Use of Proceeds from Registered
Offerings
In August 2021, we issued to the Sponsor an aggregate
of 7,362,500 founder shares in exchange for a capital contribution of $25,000, and in November 2021, we effected a 1.36672326 for 1 stock
split of our shares of common stock, so that our Sponsor owns an aggregate of 10,062,500 founder shares. Up to 1,312,500 founder shares
were subject to forfeiture by the Sponsor depending on the extent to which the underwriters over-allotment option was exercised.
In connection with the underwriters partial exercise of their over-allotment option on December 28, 2021, the Sponsor forfeited
1,181,250 founder shares, resulting in the Sponsor holding 8,881,250 founder shares. The foregoing issuance was made pursuant to the exemption
from registration contained in Section 4(a)(2) of the Securities Act.
On December 14, 2021, we consummated our initial
public offering of 25,000,000 units, and on December 28, 2021, we issued 375,000 additional units as a result of the underwriters
partial exercise of their over-allotment option. Each unit consists of one share of Class A common stock and one-half of one redeemable
warrant, with each warrant entitling the holder thereof to purchase one share of Class A common stock for $11.50 per share. The units
were sold at an offering price of $10.00 per unit, generating total gross proceeds of $253,750,000. Citigroup Global Markets Inc. acted
as the sole bookrunner and Roberts & Ryan Investments, Inc., Siebert Williams Shank& Co., LLC and Tigress Financial Partners LLC
acted as co-managers. The securities sold in the offering were registered under the Securities Act on a registration statement on Form
S-1 (No. 333-261287). The SEC declared the registration statement effective on December 9, 2021.
50
Simultaneously with the consummation of the initial
public offering, we consummated the private placement of 950,000 private placement units to the Sponsor, and simultaneously with the sale
of the over-allotment units, we completed the private sale of an additional 3,750 private placement units to the Sponsor. The private
placement units were sold at a purchase price of $10.00 per unit, generating gross proceeds of $9,537,500. Each private placement unit
consists of one share of Class A common stock and one-half of one warrant. Each whole warrant is exercisable to purchase one whole share
of common stock at $11.50 per share. Such securities were issued pursuant to the exemption from registration contained in Section 4(a)(2)
of the Securities Act.
The private placement units are identical to the
units sold in the initial public offering, except that the private placement units (and the shares of Class A common stock and private
placement warrants underlying the private placement units) are not transferable, assignable or salable until 30 days after the completion
of a business combination, subject to certain limited exceptions, and the private placement warrants are exercisable on a cashless basis.
Of the gross proceeds received from the initial
public offering (including the sale of the over-allotment units) and private placement of private placement units, $256,287,500 was placed
in the Trust Account.
At the closing of our initial public offering,
on December 14, 2021, we paid a total of $5,000,000 in underwriting fees and $463,896 for other costs and expenses related to the initial
public offering. In addition, on December 9, 2021, the underwriters agreed to defer $8,956,250 in underwriting fees. On January 28, 2025,
Citigroup Global Markets Inc., as representative of the underwriters (Citigroup), agreed to formally waive the deferred
underwriting commissions of $8,956,250 in full, pursuant to a deferred fee waiver letter agreement between Citigroup and us upon the successful
business combination with Ace Green Recycling. The waiver of deferred underwriting commissions is contingent upon such successful business
combination.
Item 6. [Reserved]
51
Item 7. Managements Discussion and Analysis of Financial
Condition and Results of Operations.
*The following discussion and analysis of the
Companys financial condition and results of operations should be read in conjunction with our audited financial statements and
the notes related thereto which are included in Item 8. Financial Statements and Supplementary Data of this Annual Report
on Form 10-K. Certain information contained in the discussion and analysis set forth below includes forward-looking statements. Our actual
results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those
set forth under Cautionary Note Regarding Forward-Looking Statements and Risk Factor Summary, Item 1A. Risk Factors
and elsewhere in this Annual Report on Form 10-K.*
Overview
Athena Technology Acquisition Corp. II was incorporated
in Delaware on May 20, 2021. The Company was formed for the purpose of entering into a merger, stock exchange, asset acquisition, stock
purchase, reorganization or other similar business transaction with one or more businesses that the Company has not yet consummated (a
Business Combination).
On April 19, 2023, the Company entered into a
business combination agreement with the Air Water Company in order to effect a Business Combination, but then terminated the agreement
on December 13, 2023 by entering into a mutual release agreement.
On December 4, 2024, the Company, the Sponsor,
Ace Green Recycling and Merger Sub, entered into the Business Combination Agreement, pursuant to which, subject to the satisfaction or
waiver of certain conditions precedent in the Business Combination Agreement, the following transactions will occur: (a) Merger Sub will
merge with and into Ace Green Recycling (the Merger), with Ace Green Recycling surviving the Merger as a wholly owned subsidiary
of the Company and the security holders of Ace Green Recycling becoming security holders of the Company and (b) the other transactions
contemplated by the Business Combination Agreement and the Ancillary Documents referred to therein (together with the Merger, the Transactions).
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 with Ace Green Recycling
will be successful.
*Proposed Business Combination*
Pursuant to the Business Combination Agreement,
at the effective time of the Merger, each outstanding share of common stock of Ace Green Recycling (other than any excluded shares and
dissenting shares) shall be converted into the right to receive (i) a number of shares of Company common stock equal to the a specified
exchange ratio and (ii) a pro rata portion of any Earnout Shares that the Company is obligated to issue pursuant to the terms of the Business
Combination Agreement.
The Business Combination Agreement, subject to
the terms and conditions set forth therein, provides that Athena will issue up to an aggregate 10,500,000 shares of its common stock (the
Earnout Shares) to Ace Green Recyclings shareholders and up to an aggregate of 1,500,000 shares of its common stock
to Sponsor based on the trading prices of Athenas common stock during the five-year period following the closing of the Merger
(the Closing).
*Voting and Support Agreements*
In connection with the execution of the Business
Combination Agreement, Sponsor entered into a Voting and Support Agreement (the Sponsor Support Agreement) with Athena and
Ace Green Recycling, pursuant to which Sponsor has agreed to, among other things, (a) vote at any meeting of Athena shareholders to be
called for approval of the Business Combination Agreement, the Merger, and the other Transactions all shares of Athena Class A common
stock (together with any warrants to acquire Athena Class A common stock, the Sponsor Securities) beneficially owned or
thereafter acquired in favor of the Business Combination Agreement, the Merger, and the other Transactions, (b) be bound by certain other
covenants and agreements related to the Transactions and (c) be bound by certain transfer restrictions with respect to the Sponsor Securities,
in each case, on the terms and subject to the conditions set forth in the Sponsor Support Agreement.
52
In connection with the execution of the Business
Combination Agreement, certain Ace Green Recycling shareholders entered into a Voting and Support Agreement (the Ace Green Recycling
Support Agreement) with Athena and Ace Green Recycling, pursuant to which each such Ace Green Recycling shareholder has agreed
to, among other things, (a) vote at any meeting of Ace Green Recyclings shareholders to be called for approval of, among other
things, the Business Combination Agreement and the Transactions all of such Ace Green Recycling shareholders shares of Ace Green
Recycling common stock (the Ace Green Recycling Securities) beneficially owned or thereafter acquired in favor of the Transactions,
(b) be bound by certain other covenants and agreements related to the Transactions and (c) be bound by certain transfer restrictions with
respect to the Ace Green Recycling Securities, in each case, on the terms and subject to the conditions set forth in the Ace Green Recycling
Support Agreement.
*Lock-Up Agreements*
In connection with the Closing, certain Ace Green
Recycling shareholders will each enter into an agreement (the Ace Green Recycling Shareholder Lock-Up Agreement) providing
that each such Ace Green Recycling shareholder will not, subject to certain exceptions, transfer its shares of Athena common stock during
the period commencing on the closing date of the business combination and ending 180 days thereafter.
In connection with the Closing, Sponsor will enter
into an agreement (the Sponsor Lock-Up Agreement) providing that Sponsor will not, subject to certain exceptions, transfer
its shares of Athena common stock during the period commencing on the closing date of the business combination and ending 180 days thereafter.
*New Registration Rights Agreement*
The Business Combination Agreement contemplates
that, at the Closing, certain Ace Green Recycling equity holders, Sponsor and Athena will enter into a Registration Rights Agreement (the
New Registration Rights Agreement), pursuant to which Athena will agree to register for resale certain shares of Athenas
common stock and other equity securities of Athena that are held by the parties thereto. Pursuant to the New Registration Rights Agreement,
Athena will agree to file a shelf registration statement registering the sale or resale of all of the Registrable Securities (as defined
in the New Registration Rights Agreement) within 30 days after the closing date of the business combination. Athena will also agree to
provide customary piggyback registration rights, subject to certain requirements and customary conditions. The New Registration
Rights Agreement will also provide that Athena will pay certain expenses relating to such registrations and indemnify the shareholders
against certain liabilities.
*Stockholder Meetings*
On June 13, 2023, the Company held a special meeting
of its stockholders (the First Extension Special Meeting), at which the stockholders approved proposals to amend the Companys
amended and restated certificate of incorporation, as amended and corrected (Charter) to (i) extend the date by which the
Company must consummate its initial Business Combination from June 14, 2023 to up to March 14, 2024 by electing to extend the date to
consummate an initial Business Combination on a monthly basis up to nine times by an additional one month each time after June 14, 2023
until March 14, 2024, or a total of up to nine months, provided that the Sponsor or its affiliates or permitted designees deposited into
the Trust Account the lesser of (a) $60,000 and (b) $0.03 for each share of common stock issued and outstanding that was subject to redemption
and that had not been redeemed in accordance with the terms of the amended Charter and (ii) provided holders of the Companys Class
B common stock, par value $0.0001 per share (the Class B common stock), the right to convert any and all of their Class
B common stock into the Companys Class A common stock, par value $0.0001 per share (the Class A common stock), on
a one-for-one basis prior to the closing of a Business Combination at the election of the holder. The Company filed an amendment to the
Charter to reflect the accepted proposals on June 13, 2023. In connection with the First Extension Special Meeting, 23,176,961 shares
of the Companys Class A common stock were redeemed.
53
On March 12, 2024, the Company held a special
meeting of its stockholders (the Second Extension Special Meeting), at which the stockholders approved proposals to further
amend the Charter to (i) further extend the date by which the Company must consummate its initial Business Combination on a monthly basis
for up to nine times by an additional one month each time for a total of up to nine months from March 14, 2024 to December 14, 2024 provided
that the Sponsor or its affiliates or permitted designees deposited into the Trust Account the lesser of (a) $40,000 and (b) $0.02 for
each share of the Companys common stock issued and outstanding that was subject to redemption and that had not been redeemed upon
the election of each such one-month extension unless the closing of the Companys initial Business Combination had occurred and
(ii) eliminated the limitation that the Company may not redeem public shares in an amount that would cause the Companys net tangible
assets to be less than $5,000,001 immediately prior to or upon consummation of an initial Business Combination. The Company filed an amendment
to the Charter to reflect the accepted proposals on March 12, 2024. In connection with the Second Extension Special Meeting, 910,258 shares
of the Companys Class A common stock were redeemed.
On December 10, 2024, the Company held an annual
meeting of its stockholders (the Third Extension Meeting), at which the stockholders approved the proposal to amend the
Charter to further extend the date by which the Company must consummate its initial Business Combination on a monthly basis for up to
nine times by an additional one month each time for a total of up to nine months from December 14, 2024 to September 14, 2025 (the Third
Extension), provided that the Sponsor or its affiliates or permitted designees deposit into the Trust Account the lesser of (a)
$25,000 and (b) $0.02 for each share of the Companys common stock issued and outstanding that was subject to redemption and that
had not been redeemed upon the election of each such one-month extension unless the closing of the Companys initial Business Combination
had occurred. The Company filed an amendment to the Charter to reflect the accepted proposals on December 10, 2024. In connection with
the Third Extension, 977,625 shares of the Companys Class A common stock were redeemed.
On September 10, 2025, the Company held a special
meeting of its stockholders (the Fourth Extension Special Meeting), at which the stockholders approved the proposal to further
amend the Charter to further extend the date by which the Company must consummate its initial Business Combination on a monthly basis
for up to nine times by an additional one month each time for a total of up to nine months from September 14, 2025 to June 14, 2026 (the
Fourth Extension), provided that the Sponsor or its affiliates or permitted designees deposit into the Trust Account the
lesser of (a) $25,000 and (b) $0.02 for each share of the Companys common stock issued and outstanding that is subject to redemption
and that has not been redeemed upon the election of each such one-month extension unless the closing of the Companys initial Business
Combination shall have occurred. The Company filed an amendment to the Charter to reflect the accepted proposals on September 10, 2025.
In connection with the Fourth Extension Special Meeting, 285,269 shares of the Companys Class A common stock were redeemed.
*Trust Deposits*
On January 8, 2024, the Company deposited $60,000
into the Trust Account allowing the Company to extend the period of time it has to consummate its initial Business Combination by one
month from January 14, 2024 to February 14, 2024.
On February 9, 2024, the Company deposited $60,000
into the Trust Account allowing the Company to extend the period of time it has to consummate its initial Business Combination by one
month from February 14, 2024 to March 14, 2024.
On each of March 13, 2024, April 16, 2024, May
14, 2024, June 14, 2024, July 10, 2024, August 8, 2024, September 12, 2024, October 15, 2024 and November 11, 2024, the Company deposited
$25,756 into the Trust Account, or an aggregate of $231,800, allowing the Company to extend the period of time it has to consummate its
initial Business Combination from March 14, 2024 to December 14, 2024.
On each of December 11, 2024, January 10, 2025,
February 10, 2025, March 6, 2025, April 7, 2025, May 7, 2025, June 6, 2025, July 8, 2025 and August 11, 2025, the Company deposited $6,203
into the Trust Account, or an aggregate of $55,827, allowing the Company to extend the period of time it has to consummate its initial
Business Combination from December 14, 2024 to September 14, 2025.
On each of September 12, 2025, October 7, 2025,
November 4, 2025, December 8, 2025, January 5, 2026, February 5, 2026 and March 4, 2026, the Company deposited approximately $498 into
the Trust Account, or an aggregate of approximately $3,486, allowing the Company to extend the period of time it has to consummate its
initial Business Combination from September 14, 2025 to April 14, 2026.
54
*NYSE American Notifications and Delisting*
On July 17, 2023, our Board of Directors authorized
the transfer of the listing of our Class A common stock, redeemable warrants, each exercisable to purchase one share of Class A common
stock at a price of $11.50 per share (the Warrants), and units, each consisting of one share of Class A common stock and
one-half of one Warrant (the Units and together with the Class A common stock and the Warrants, the Listed Securities),
from the New York Stock Exchange (the NYSE) to the NYSE American LLC (the NYSE American). The listing and
trading of the Listed Securities on the NYSE ended at market close on July 20, 2023, and the trading of the Listed Securities on the NYSE
American commenced at market open on July 21, 2023.
On each of April 17, 2024 and November 20, 2024,
the Company received an official notice of noncompliance from NYSE Regulation stating that it was not in compliance with NYSE American
continued listing standards under the timely filing criteria included in Section 1007 of the NYSE American Company Guide due to the failure
to timely file the Annual Report on Form 10-K by the filing due date of April 16, 2024 and the Quarterly Report on Form 10-Q for the quarter
ended September 30, 2024 by the filing due date of November 19, 2024, respectively (the Filing Delinquencies.) The Company
filed its Annual Report on Form 10-K, the Quarterly Report on Form 10-Q for the three months ended March 31, 2024, the Quarterly Report
on Form 10-Q for the three months ended June 30, 2024 and the Quarterly Report on Form 10-Q for the three months ended September 30, 2024,
and believed it had cured the Filing Delinquencies. On October 21, 2024, the Company received a letter from the NYSE notifying the Company
of its past due annual listing fees. On December 10, 2024, the Company received a letter from the NYSE stating that the staff of NYSE
Regulation has determined to commence proceedings to delist the Companys (i) Class A common stock (ii) Units, and (iii) Warrants
pursuant to Sections 119(b) and 119(f) of the NYSE American Company Guide because the Company failed to consummate a Business Combination
within 36 months of the effectiveness of its initial public offering registration statement, or such shorter period that the Company specified
in its registration statement. As a result of the determination, trading of the Listed Securities on NYSE American was suspended on December
10, 2024 and the Listed Securities were delisted on December 30, 2024. Our Class A common stock, Units and Warrants currently trade on
OTC Pink under the symbols ATEK, ATEK.U and ATEK WS, respectively.
*Use of Restricted Funds*
Through April 2023, the Company withdrew $356,693
of interest and dividend income earned in the Trust Account for payment of the Companys 2021 and 2022 franchise tax liabilities.
The Company settled the 2021 and 2022 franchise tax liabilities of $356,693 in April 2023.
On June 21, 2023, the Company withdrew from the
Trust Account an aggregate amount of $2.4 million to be used for tax purposes. It was determined as of June 30, 2023 that the withdrawal
amount was approximately $328,000 in excess of the amount necessary for tax purposes. As a result, the overdrawn amount of $328,000 was
allocated back to the contingently redeemable Class A common stock subject to possible redemption and distributed back to the Trust Account
on August 17, 2023. As of December 31, 2023, after the overdrawn amount was returned to the Trust Account, approximately $2.1 million
of restricted funds remained in the Companys operating account for future payment of franchise and income taxes (the Restricted
Funds). On March 19, 2024, the Company withdrew an additional $252,108 from the Trust Account to pay the Companys franchise
and income taxes payable, increasing the Restricted Funds to $2.3 million as of March 31, 2024.
Through March 31, 2024, the Company used portions
of the Restricted Funds to pay for general operating expenses in the aggregate amount of $669,440. Management later determined that this
use of Restricted Funds was not in accordance with the Charter and the amended Trust Agreement. On April 10, 2024, the misallocated $669,440
of Restricted Funds was replenished to the Companys operating account in the form of an intercompany loan made by Sponsor.
On April 3, 2024, the Company paid $720,192 to
satisfy income tax liabilities for 2022. On May 16, 2024, the Company paid $820,571 of its 2023 income tax liabilities and on July 22,
2024, the Company paid $79,849 of its 2023 Delaware franchise tax liabilities. During September 2024, the Company paid $658,686 of its
2024 income taxes, inclusive of $43,257 of interest and penalties incurred. On May 21, 2025, the Company paid $171,778 of its 2023 tax
penalties and interest. As of December 31, 2025, the total amount of prepaid income taxes was $610,976, and the remaining restricted cash
balance amounted to $0.
55
**
*Company Funding*
On July 26, 2024, the Company issued an unsecured
promissory note to the Sponsor with a principal amount equal to $422,182. The note is non-interest bearing and payable on the earlier
of July 26, 2026 or the Companys initial Business Combination. The Note may be converted into equity securities of the Company
on mutually agreeable terms if consented to in writing by the Sponsor. As of December 31, 2025, the Company received the full principal
amount of $422,182 under this note.
On October 10, 2024 (effective on April 10, 2024),
the Company issued an unsecured and non-interest-bearing promissory note to the Sponsor with a principal amount equal to $1,500,000 to
cover the monthly extension payments of the Company and for working capital purposes. The note is payable in full upon the earlier of
(a) April 10, 2026 and (b) the date the Company consummates a Business Combination. The Company drew $800,000 from this note on April
10, 2024 to replenish the misallocated Restricted Funds.
On December 6, 2024, the Company and Sponsor entered
into an Amended and Restated Subscription Agreement (the A&R Polar Subscription Agreement) with Polar Multi-Strategy
Master Fund (Polar) pursuant to which Polar contributed an additional $200,000 to Sponsor (for an aggregate of $500,000,
such funded amounts, the Initial Polar Capital Investment), which in turn was loaned by Sponsor to the Company to fund any
additional extensions of the date by which the Company must consummate an initial Business Combination and to cover working capital expenses.
The Subscription Agreement provides that in connection with the Initial Polar Capital Investment, the Company will repay the entire balance
of the Initial Polar Capital Investment to Polar within five business days of the closing of an initial Business Combination of the Company
and that Sponsor will transfer and/or the Company will issue on Sponsors behalf an additional 200,000 shares of Class A common
stock to Polar immediately prior to the closing of an initial Business Combination of the Company (for an aggregate of 500,000 shares
to be transferred and/or issued to Polar as consideration for the Initial Polar Capital Investment).
On February 9, 2025, the Company and Sponsor entered
into a subscription agreement (the February 2025 Subscription Agreement) with Kevin Wright and Jeanine Percival Wright Revocable
Trust (the Investor) pursuant to which the Investor contributed $500,000 to Sponsor (the Contribution), which
in turn was loaned by Sponsor to the Company to fund any additional extensions of the date by which the Company must consummate an initial
Business Combination and to cover working capital expenses. The February 2025 Subscription Agreement provides that in connection with
the Contribution, the Company will repay the entire balance of the Contribution to the Investor within five business days of the closing
of an initial Business Combination of the Company and that Sponsor will transfer and/or the Company will issue on Sponsors behalf
an additional 300,000 shares of Class A common stock to the Investor immediately prior to the closing of an initial Business Combination
of the Company.
On August 11, 2025, the Company and Sponsor entered
into a subscription agreement (the August Subscription Agreement) with Polar pursuant to which Polar contributed an additional
$400,000 (the August Polar Capital Investment) to the Company to cover working capital expenses. The August Subscription
Agreement provides that in connection with the Polar Capital Investment, immediately prior to the closing of a Business Combination, the
Company will issue to Polar one share of Company class A common stock per $1.00 contributed by Polar (the subscription shares).
Additionally, in connection with the August Subscription
Agreement, an amount equal to the August Polar Capital Investment shall be paid by the Company to Polar as a return of capital within
five business days of the closing of a Business Combination. Additionally, the Sponsor shall not sell, transfer, or otherwise dispose
of any securities (including warrants) owned by the Sponsor without Polars consent, other than Permitted Share Transfers, until
the full amount of the contribution has been paid to Polar. The Company and Sponsor are jointly and severally obligated for such repayment.
If the closing of a Business Combination occurs, Polar may, in its sole discretion, elect at the closing of such Business Combination
or at any time prior to the repayment of the August Polar Capital Investment to receive such repayment from the Company either in cash
or shares of the Companys Class A common stock at a rate of one share of Class A common stock for each $10 of the contribution
(the Capital Contribution Shares). In the event that the Sponsor or the Company defaults in its obligations and that such
default continues for a period of five business days following written notice to the Sponsor and Company (the Default Date),
the Company shall immediately issue to Polar 0.1 shares of the Companys Class A common stock (the Default Shares)
for each $1.00 of the August Polar Capital Investment on the Default Date and shall issue to Polar an additional 0.1 Default Shares for
each $1.00 of the August Polar Capital Investment that Polar funded each month thereafter, until the default is cured.
56
Results of Operations
We have neither engaged in any operations nor
generated any operating revenues to date. Our only activities from May 20, 2021 (inception) through December 31, 2025 were organizational
activities and those necessary to prepare for our initial public offering, described below, and since our initial public offering, the
search for a prospective initial Business Combination. We do not expect to generate any operating revenues until after the completion
of our initial Business Combination, at the earliest. We expect to generate non-operating income in the form of interest income from the
proceeds of our initial public offering placed in the Trust Account. We expect that we will incur increased expenses as a result of being
a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses in connection
with searching for, and completing, a Business Combination.
For the year ended December 31, 2025, we had a
net loss of $1,271,227, which consisted of operating expenses of $1,876,932, return of capital subscription shares expense of $164,000,
finance costs of $235,630, income tax expense of $4,453 and franchise tax expense of $5,243, partially offset by interest income on investments
held in Trust Account of $110,291, gain on change in fair value of return of capital subscription shares liability of $16,400 and reversal
of interest and penalties on excise tax liability of $888,340.
For the year ended December 31, 2024, we had a
net loss of $2,648,946, which consisted of operating expenses of $3,402,952 and finance costs of $78,039, offset by interest income on
investments held in Trust Account of $850,641.
Liquidity, Capital Resources and Going Concern
The securities in our initial public offering
were registered under the Securities Act on a Registration Statement on Form S-1 (Registration No. 333-261287). The Registration Statement
on Form S-1, as amended (the Registration Statement), for the Companys initial public offering was declared effective
on December 9, 2021. On December 14, 2021, the Company consummated its initial public offering of 25,000,000 units. Each unit consists
of one share of Class A common stock and one-half of one redeemable warrant, with each warrant entitling the holder thereof to purchase
one share of Class A common stock for $11.50 per share. The units were sold at a price of $10.00 per unit, generating gross proceeds of
$250,000,000.
Simultaneously with the closing of our initial
public offering, we consummated the sale of 950,000 private placement units at a price of $10.00 per private placement unit in a private
placement with our Sponsor, generating gross proceeds of $9,500,000.
Subsequent to the closing of our initial public
offering, we consummated the closing of the sale of 375,000 additional units upon receiving notice of the underwriters election
to partially exercise their over-allotment option, generating additional gross proceeds of $3,750,000. Simultaneously with the exercise
of the over-allotment, we consummated the private placement of an additional 3,750 private placement units to our Sponsor, generating
gross proceeds of $37,500.
Offering costs for our initial public offering
amounted to $14,420,146, consisting of $5,000,000 of underwriting fees, $8,956,250 of deferred underwriting fees payable (which are held
in the Trust Account) and $463,896 of other costs. The $8,956,250 of deferred underwriting fee payable is contingent upon the consummation
of a Business Combination by June 14, 2026, subject to the terms of the underwriting agreement. On January 28, 2025, Citigroup, as representative
of the underwriters, agreed to formally waive the deferred underwriting commissions of $8,956,250 in full, pursuant to a deferred fee
waiver letter agreement between Citigroup and the Company upon the successful Business Combination with Ace Green Recycling. The waiver
of deferred underwriting commissions is contingent upon such successful Business Combination, thus, as of December 31, 2025, the full
amount of $8,956,250 remains outstanding.
Following the closing of the initial public offering
and partial exercise of the over-allotment, $256,287,500 of the net proceeds from the initial public offering (including the over-allotment
units) and a portion of the private placement units was placed in the Trust Account and 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 of 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, as described below.
57
As of December 31, 2025, there is $29,191 of interest
income available in the Trust Account available to pay for franchise and income taxes and total amounts withdrawn from the Trust Account
to pay the Companys franchise and income tax obligations amounted to $2,869,660 (net of approximately $328,000 cash deposited to
the Trust Account to refund the over withdrawal). During the year ended December 31, 2025 the Company withdrew an additional $195,437
from the Trust Account to pay the Companys franchise and income taxes payable. In connection with the First Extension Special Meeting
held on June 13, 2023, 23,176,961 shares of the Companys Class A common stock were redeemed. On June 21, 2023, $239,604,919 was
withdrawn from the Trust Account to pay the redeeming holders and the 23,176,961 shares of the Companys Class A common stock that
were redeemed were cancelled. In connection with the Second Extension Special Meeting held on March 12, 2024, 910,258 shares of the Companys
Class A common stock were redeemed. On April 5, 2024, $10,179,663 was withdrawn from the Trust Account to pay the redeeming holders and
the 910,258 shares of the Companys Class A common stock that were redeemed were cancelled. In connection with the Third Extension
Meeting held on December 10, 2024, 977,625 shares of the Companys Class A common stock were redeemed. On December 11, 2024, $11,497,959
was withdrawn from the Trust Account to pay the redeeming holders and the 977,625 shares of the Companys Class A common stock that
were redeemed were cancelled. In connection with the Fourth Extension Special Meeting held on September 10, 2025, 285,269 shares of the
Companys Class A common stock were redeemed. On September 12, 2025, an amount of $3,335,294 was withdrawn from the Trust Account
to pay such redeeming holders and the 285,269 shares of the Companys Class A common stock that were redeemed were cancelled.
Through March 31, 2024, the Company used portions
of the Restricted Funds to pay for general operating expenses in the aggregate amount of $669,440. Management later determined that this
use of Restricted Funds was not in accordance with the Charter and the amended Trust Agreement. On April 10, 2024, the misallocated $669,440
of Restricted Funds was replenished to the Companys operating account in the form of an intercompany loan made by Sponsor. On April
3, 2024, the Company paid $720,192 to satisfy income tax liabilities for 2022. On May 16, 2024, the Company paid $820,571 of its 2023
income tax liabilities and on July 22, 2024, the Company paid $79,849 of its 2023 Delaware franchise tax liabilities. During December
2024, the Company paid $658,686 of its 2024 income taxes, inclusive of $43,257 of interest and penalties incurred. As of December 31,
2025, the total amount of prepaid income taxes was $610,976, and the remaining restricted cash balance amounted to $0.
For the year ended December 31, 2025, cash used
in operating activities was $837,610. Net loss of $1,271,227 was reduced by interest income on investments held in Trust Account of $110,291,
increased by finance costs amortization of debt issuance of $235,630 and reduced by return of capital subscription shares expense
of $164,000 and gain on change in fair value of return of capital subscription shares liability of $16,400. Changes in operating assets
and liabilities provided $160,678 of cash for operating activities. Net cash provided by investing activities was $3,479,116 which consisted
of cash withdrawn from trust in connection with redemption of $3,335,294 and cash withdrawn from Trust Account to pay penalties and interest
on franchise and income taxes of $195,437, partially offset by cash deposited to Trust Account of $51,615. Net cash used in financing
activities was $2,435,294, which consisted of redemptions of Class A common stock of $3,335,294, proceeds from promissory note - related
party of $500,000 and proceeds from Polar Subscription Agreement of $400,000.
For the year ended December 31, 2024, cash used
in operating activities was $2,944,606. Net loss of $2,648,946 was reduced by interest income on investments held in Trust Account of
$850,641 and increased by finance costs amortization of debt issuance of $78,039 and expenses paid by related party of $175,323.
Changes in operating assets and liabilities used $301,619 of cash for operating activities. Net cash provided by investing activities
was $21,571,727 which consisted of cash withdrawn from Trust Account in connection with redemption of $21,677,622, cash withdrawn from
Trust Account to pay franchise and income taxes of $252,108, and cash deposited to Trust Account for extension payments of $358,003. Net
cash used in financing activities was $20,309,754, which consisted of redemptions of Class A common stock of $21,677,622, proceeds from
convertible and promissory notes of $1,422,182, and reimbursements to related party of $54,314.
In connection with the stockholders vote
at the Special Meeting of Stockholders held on June 13, 2023, 23,176,961 shares were tendered for redemption and approximately $239,604,919
was paid out of the Trust Account to the redeeming stockholders. The Company recorded 1% excise tax based on the amount redeemed or an
aggregate amount of $2,396,049 excise tax payable as of December 31, 2023.
58
In connection with the stockholders vote
at the Special Meeting of Stockholders held on March 12, 2024, 910,258 shares were tendered for redemption and approximately $10,179,663
was paid out of the Trust Account on April 5, 2024 to the redeeming stockholders. The Company has recorded 1% excise tax based on the
amount redeemed or an aggregate amount of $101,797.
In connection with the stockholders vote
at the Annual Meeting of Stockholders held on December 10, 2024, 977,625 shares were tendered for redemption and approximately $11,497,959
was paid out of the Trust Account on December 11, 2024 to the redeeming stockholders. The Company has recorded 1% excise tax based on
the amount redeemed or an aggregate amount of $114,980 excise tax payable.
In connection with the stockholders vote
at the Special Meeting of Stockholders held on September 10, 2025, 285,269 shares were tendered for redemption and approximately $3,335,294
was paid out of the Trust Account on September 12, 2025 to the redeeming stockholders. The Company has recorded 1% excise tax based on
the amount redeemed or an aggregate amount of $33,353 excise tax payable.
Pursuant to Internal Revenue Service (IRS)
regulations, the Company was required to file a return and remit payment for the 2023 excise tax liability of $2,396,049 on or before
October 31, 2024. In December 2024, the Internal Revenue Service issued a notice to the Company asserting that $3,284,389 is payable with
respect to the 2023 excise tax liability and associated interest and penalties. The Company did not pay the amount due. The Company recognized
a total of $1,051,283 in interest and penalties with respect to the 2023 excise tax liability through December 31, 2025. The Company was
required to file a return and remit payment for the 2024 excise tax liabilities on or before April 30, 2025.
On November 24, 2025, the IRS published additional
information relating to excise tax on repurchases of corporate stock relating specifically to Special Purpose Acquisition Companies (SPAC).
The IRS published that any SPAC that priced their IPO prior to August 16, 2022 are not subject to excise tax on any redemptions. As such,
the Company has reversed $3,688,337 of liabilities relating to excise tax that was accrued in previous quarters. Of the $3,688,337, $2,612,825
was reversed back to accumulated deficit where the initial excise tax in connection with the redemption of class A common stock was recorded
and is reflected in the consolidated statements of changes in stockholders deficit, $888,340 was recorded to reversal of prior
year interest and penalties on excise tax liability and $187,171 within general and administrative expense in the accompanying consolidated
statements of operations.
At December 31, 2025, we had investments held
in the Trust Account of $297,614. 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 taxes payable), to complete our Business Combination. We may withdraw interest from the Trust
Account to pay our taxes. We estimate our annual franchise tax obligations, based on the number of shares of Athena common stock authorized
and outstanding as of the date of this filing, to be approximately $20,000, which we may pay from funds from the initial public offering
held outside of the Trust Account or from interest earned on the funds held in the Trust Account and released to us for this purpose.
Our annual income tax obligations will depend on the amount of interest and other income earned on the amounts held in the Trust Account.
We expect the interest earned on the amount in the Trust Account will be sufficient to pay our franchise and income taxes. To the extent
that our equity 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.
However, as the Trust Account balance may not
be sufficient after the payment of our annual taxes, the Company will likely need to raise additional funds prior to the closing of a
Business Combination to satisfy further tax liabilities, operational costs and closing costs. In the event that a Business Combination
does not close, any loan made to the Company for the purpose of paying overdue tax obligations would be repaid only out of funds held
outside the Trust Account. As of the date of this Quarterly Report on Form 10-Q, the Company has not obtained any commitments to provide
additional funds and the Companys board of directors has not approved any method of funding the Companys further tax and
cost obligations.
59
At December 31, 2025, we had operating cash of
$348,472, restricted cash and cash equivalents to pay tax obligations of $0 and a working capital deficit of $8,004,895. As of December
31, 2025, approximately $29,191 of the amount on deposit in the Trust Account represented interest income, which is available to pay the
Companys tax obligations.
In order to fund working capital deficiencies
or 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 will repay the Working Capital Loans out of the proceeds of
the Trust Account released to the Company. Otherwise, the Working Capital Loans would 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 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 $1.5 million of such Working Capital Loans may be convertible into units of the post Business Combination
entity at a price of $10.00 per unit. The units would be identical to the private placement units.
On July 26, 2024, the Company issued an unsecured
promissory note to the Sponsor with a principal amount equal to $422,182. The note is non-interest bearing and payable on the earlier
of July 26, 2026 or the Companys initial Business Combination. The Note may be converted into equity securities of the Company
on mutually agreeable terms if consented to in writing by the Sponsor. As of December 31, 2025, the Company received the full principal
amount of $422,182 under this note.
On October 10, 2024 (effective on April 10, 2024),
the Company issued an unsecured and non-interest-bearing promissory note to the Sponsor with a principal amount equal to $1,500,000 to
cover the monthly extension payments of the Company and for working capital purposes. The note is payable in full upon the earlier of
(a) April 10, 2026 and (b) the date the Company consummates a Business Combination. The Company drew $800,000 from this note on April
10, 2024 to replenish the misallocated Restricted Funds.
On December 6, 2024, the Company and Sponsor entered
into the A&R Polar Subscription Agreement with Polar pursuant to which Polar contributed an additional $200,000 to Sponsor (for an
aggregate of $500,000), which in turn was loaned by Sponsor to the Company to fund any additional extensions of the date by which the
Company must consummate an initial Business Combination and to cover working capital expenses. The A&R Polar Subscription Agreement
provides that in connection with the Initial Polar Capital Investment, the Company will repay the entire balance of the Initial Polar
Capital Investment to Polar within five business days of the closing of an initial Business Combination of the Company and that Sponsor
will transfer and/or the Company will issue on Sponsors behalf an additional 200,000 shares of Class A common stock to Polar immediately
prior to the closing of an initial Business Combination of the Company (for an aggregate of 500,000 shares to be transferred and/or issued
to Polar as consideration for the Initial Polar Capital Investment).
On February 9, 2025, the Company and Sponsor entered
into the February 2025 Subscription Agreement with Kevin Wright and Jeanine Percival Wright Revocable Trust pursuant to which the Investor
contributed $500,000 to Sponsor, which in turn was loaned by Sponsor to the Company to fund any additional extensions of the date by which
the Company must consummate an initial Business Combination and to cover working capital expenses. The February 2025 Subscription Agreement
provides that in connection with the Contribution, the Company will repay the entire balance of the Contribution to the Investor within
five business days of the closing of an initial Business Combination of the Company and that Sponsor will transfer and/or the Company
will issue on Sponsors behalf an additional 300,000 shares of Class A common stock to the Investor immediately prior to the closing
of an initial Business Combination of the Company.
The borrowings under the Working Capital Loans
structure as of December 31, 2025 and 2024 were $1,800,000 and $1,155,205, respectively.
60
On August 11, 2025, the Company and Sponsor entered
into the August Subscription Agreement with Polar pursuant to which Polar contributed an additional $400,000 to the Company to cover working
capital expenses. The August Subscription Agreement provides that in connection with the August Polar Capital Investment, immediately
prior to the closing of a Business Combination, the Company will issue to Polar Capital Investments one share of Company class A common
stock per $1.00 contributed by Polar (subscription shares). The subscription shares meet equity classification under Accounting
Standards Codification ("ASC") 815-40. Additionally, in connection with the August Subscription Agreement, an amount equal to
Polars contribution shall be paid by the Company to Polar as a return of capital within five business days of the closing of a
Business Combination. Further, the Sponsor shall not sell, transfer, or otherwise dispose of any securities (including warrants) owned
by the Sponsor without Polars consent, other than Permitted Share Transfers, until the full amount of the August Polar Capital
Investment has been paid to Polar. The Company and Sponsor are jointly and severally obligated for such repayment. If the closing of a
Business Combination occurs, Polar may, in its sole discretion, elect at the closing of such Business Combination or at any time prior
to the repayment by the Company either in cash or shares of the Companys Class A common stock at a rate of one share of Class A
common stock for each $10 of the August Polar Capital Investment (the Return of Capital). In the event that the Sponsor
or the Company defaults in its obligations and that such default continues for a period of five business days following written notice
to the Sponsor and Company (the Default Date), the Company shall immediately issue to Polar 0.1 shares of the Companys
Class A common stock (iii) (the Default Shares) for each $1.00 of the Polar contribution on the Default Date and shall issue
Polar an additional 0.1 Default Shares for each $1.00 of the Polar contribution that Polar funded each month thereafter, until the default
is cured. Although the Default Shares and Return of Capital shares are equity linked, they are classified as liabilities due to the failure
to meet equity classification criteria under ASC 815-40.
In connection with the Companys assessment
of going concern considerations in accordance with Financial Accounting Standards Board ("FASB") ASC 205-40, Presentation
of Financial Statements - Going Concern (ASC 205-40), management has determined that the Companys liquidity
position and mandatory liquidation and subsequent dissolution raise substantial doubt about the Companys ability to continue as
a going concern. The Company intends to complete its initial Business Combination before June 14, 2026 (the mandatory liquidation
date); however, there can be no assurance that the Company will be able to extend the mandatory liquidation date (if the mandatory
liquidation date is extended by the full amount of time). No adjustments have been made to the carrying amounts of assets or liabilities
should the Company be required to liquidate after June 14, 2026. The consolidated financial statements do not include any adjustment that
might be necessary if the Company is unable to continue as a going concern.
Off-Balance Sheet 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 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 pay our Sponsor a monthly fee of $10,000
for office space, and administrative and support services, provided to the Company. We began incurring these fees on December 9, 2021,
and will continue to incur these fees monthly until the earlier of the completion of a Business Combination and the Companys liquidation.
The underwriters are entitled to deferred underwriting
commissions of $0.35 per unit ($0.55 per unit from the over-allotment units), or $8,956,250 from the closing of the initial public offering
and the over-allotment units. 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. On January 28, 2025,
Citigroup, as representative of the underwriters, agreed to formally waive the deferred underwriting commissions of $8,956,250 in full,
pursuant to a deferred fee waiver letter agreement between Citigroup and the Company upon the successful Business Combination with Ace
Green Recycling. The waiver of deferred underwriting commissions is contingent upon such successful Business Combination, thus, as of
December 31, 2025, the full amount of $8,956,250 remains outstanding.
61
The holders of Founder Shares, Private Placement
Units and units that may be issued upon conversion of Working Capital Loans, if any, are entitled to registration rights pursuant to a
certain registration rights agreement, dated December 9, 2021. These holders are entitled to make up to three demands, excluding short
form demands, that the Company register such securities. In addition, these holders will have certain piggyback registration
rights with respect to registration statements filed subsequent to the Companys completion of its initial Business Combination.
The Company will bear the expenses incurred in connection with the filing of any such registration statements.
JOBS Act
On April 5, 2012, the Jumpstart Our Business Startups
Act of 2012 (the JOBS Act) was signed into law. The JOBS Act contains provisions that, among other things, relax certain
reporting requirements for qualifying public companies. We qualify as an emerging growth company and under the JOBS Act
are allowed to comply with new or revised accounting pronouncements based on the effective date for private (not publicly traded) companies.
We have elected to delay the adoption of new or revised accounting standards, and as a result, we may not comply with new or revised accounting
standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. As such, our financial
statements may not be comparable to companies that comply with public company effective dates.
Subject to certain conditions set forth in the
JOBS Act, if, as an emerging growth company, we choose to rely on such exemptions we may not be required to, among other
things, (i) provide an auditors attestation report on our system of internal control over financial reporting pursuant to Section
404 of the Sarbanes-Oxley Act, (ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies
under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may be adopted by the PCAOB
regarding mandatory audit firm rotation or a supplement to the auditors report providing additional information about the audit
and the financial statements (auditor discussion and analysis) and (iv) disclose certain executive compensation related items such as
the correlation between executive compensation and performance and comparisons of executive compensation to median employee compensation.
These exemptions will apply for a period of five years following the completion of our IPO or until we are no longer an emerging
growth company, whichever is earlier.
Critical Accounting Estimates
The preparation of consolidated financial statements
and related disclosures in conformity with accounting principles generally accepted in the United States of America 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 financial statements, and income and expenses during the periods reported. Actual results could materially differ from
those estimates. Such estimates may be subject to change as more current information becomes available and, accordingly, actual results
may differ from these estimates under different assumptions or conditions. As of December 31, 2025, we have identified the following critical
accounting estimates:
*Return of capital subscription shares liability*
At initial recognition, the Return of Capital shares
and Default Shares are measured at fair value and recognized in the statement of profit and loss as a subscription expense, consistent
with the guidance in ASC 815-10 for fair value measurement. Subsequent changes in fair value are also recognized in profit and loss, in
accordance with ASC 815-10, as the instrument does not qualify for equity classification and is accounted for as a liability measured
at fair value through earnings.
62
Recent Accounting Pronouncements
In November 2023, the FASB issued Accounting Standards
Update ("ASU") 2023-07, Segment Reporting (Topic 280): 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 Topic 280 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 Topic 280. This ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning
after December 15, 2024, with early adoption permitted. This ASU became effective as of December 31, 2024 and the Companys management
adopted in its financial statements and related disclosures.
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 consolidated
financial statements.
Item 7A. Quantitative and Qualitative Disclosures
about Market Risk
As a smaller reporting company,
we are not required to provide the information called for by this Item.
Item 8. Financial Statements and Supplementary Data.
Reference is made to pages F-1 through F-25 comprising a portion
of this Annual Report on Form 10-K.
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 that are 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 our management, including our Chief Executive
Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
As required by Rules 13a-15(b) and 15d-15(b) under
the Exchange Act, our Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of the design
and operation of our disclosure controls and procedures as of December 31, 2025. Based upon their evaluation, our Chief Executive Officer
and Chief Financial Officer concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the
Exchange Act) were not effective as of December 31, 2025 due to the material weakness described below.
Material Weakness
A material weakness is a deficiency or combination
of deficiencies in internal control over financial reporting such that there is a reasonable possibility that a material misstatement
of its financial statements would not be prevented or detected on a timely basis. These deficiencies could result in additional material
misstatements to our financial statements that could not be prevented or detected on a timely basis.
The following deficiencies resulted in the Companys
inability to timely file its Annual Report on Form 10-K for the year ended December 31, 2023, the Quarterly Report on Form 10-Q for the
three months ended March 31, 2024, the Quarterly Report on Form 10-Q for the three months ended June 30, 2024 and the Quarterly Report
on Form 10-Q for the three months ended September 30, 2024, and resulted in a material weakness in our internal control over financial
reporting.
Through March 31, 2024, the Company used portions
of the Restricted Funds to pay for general operating expenses in the aggregate amount of $669,440. Management later determined that this
use of Restricted Funds was not in accordance with the Charter and the amended Trust Agreement. On April 10, 2024, the misallocated $669,440
of Restricted Funds was replenished to the Companys operating account in the form of an intercompany loan made by Sponsor.
On April 3, 2024, the Company paid $720,192 to
satisfy income tax liabilities for 2022. On May 16, 2024, the Company paid $820,571 of its 2023 income tax liabilities and on July 22,
2024, the Company paid $79,849 of 2023 Delaware franchise tax liabilities. During December 2024, the Company paid $658,686 of its 2024
income taxes, inclusive of $43,257 of interest and penalties incurred, and $61,891 of its 2024 Delaware franchise tax liabilities.
In connection with the preparation of the Companys
financial statements as of and for the year ended December 31, 2023, the Audit Committee of the Board of Directors, in consultation with
management, determined that the Company should restate its previously issued financial statements contained in its Quarterly Report on
Form 10-Q for the three months ended September 30, 2023. During 2023, the Company withdrew funds from the Trust Account, which was restricted
for payment of tax liabilities, and determined that approximately $1.5 million of the funds withdrawn from the Trust Account were incorrectly
recorded as a component of Investments held in Trust Account when such funds should have been recorded and presented as a component of
restricted cash as of September 30, 2023. This resulted in a restatement of restricted cash and investments held in Trust Account. In
connection with the change in presentation for restricted cash and Trust Account, the Company also restated the cash flow statement to
properly present the amount of cash withdrawn from the Trust Account to pay franchise and income taxes.
The Company identified a material weakness in internal
control over financial reporting related to the valuation of its subscription shares liability, as controls were not adequately designed
or operating effectively to ensure the fair value estimate was calculated in accordance with U.S. GAAP. This material weakness resulted
in a material adjustment corrected by management to the recorded fair value of the subscription shares liability.
64
Remediation Efforts to Address the Identified
Material Weakness
To address the material weakness, management has
devoted, and plans to continue to devote, significant effort and resources to the remediation and improvement of its internal control
over financial reporting. In particular, managements plans include enhanced controls and improved internal communications within
the Company and its financial reporting advisors related to the identification of any new contractual arrangements, as well as controls
to ensure the Company has oversight of the cash availability for operating needs, including more clearly designating in the Companys
internal books and records the cash that is restricted in its use and the implementation of an additional layer of review of payments
for operating expenses to ensure that restricted cash is not used for payment of general operating expenses, and conducting remedial training
for management, relevant staff and service providers to reiterate and reinforce the terms of the Trust Agreement. Managements remediation
plan also includes the addition of a control requiring the Companys audit committee to approve any withdrawals from the Trust Account
and requiring the placement of such withdrawn funds in a restricted account for the payment of taxes. To address the material weakness
identified in connection with the Companys financial statements, management has added a control requiring enhanced documentation
of discussions between management, the Companys advisors and the Companys audit committee regarding the proper usage of
the cash withdrawn from the Trust Account.
As of December 31, 2025, we continue to implement our
remediation plan and we believe we have put in place the processes, procedures and reviews necessary to address the material weakness;
however, until the applicable controls operate for a sufficient period of time and management has concluded, through testing, that these
controls are operating effectively, the material weaknesses will not be considered remediated. We can offer no assurance that these initiatives
will ultimately have the intended effects. We are committed to the continuous improvement of our internal control over financial reporting
and will continue to diligently review our internal control over financial reporting.
Managements Report on Internal Controls
Over Financial Reporting
As required by SEC rules and regulations implementing
Section 404 of the Sarbanes-Oxley Act, our management is responsible for establishing and maintaining adequate internal control over financial
reporting. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of our financial statements for external reporting purposes in accordance with GAAP. Our internal control
over financial reporting includes those policies and procedures that:
|
|
(1) |
pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of our company, | |
|
|
(2) |
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors, and | |
|
|
(3) |
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements. | |
Because of its inherent limitations, internal control
over financial reporting may not prevent or detect errors or misstatements in our consolidated financial statements. Also, projections
of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in
conditions, or that the degree or compliance with the policies or procedures may deteriorate. Management assessed the effectiveness of
our internal control over financial reporting at December 31, 2025. In making these assessments, management used the criteria set forth
by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control Integrated Framework (2013).
Based on our assessments and those criteria, management determined that we did not maintain an effective internal control over financial
reporting as of December 31, 2025.
This Annual Report on Form 10-K does not include
an attestation report of our independent registered public accounting firm due to our status as an emerging growth company under the JOBS
Act.
Changes in Internal Control Over Financial
Reporting
Except as described above under Remediation
Efforts to Address the Identified Material Weakness, there were no changes in our internal control over financial reporting (as
defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter ended December 31, 2025 that 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.
65
PART III
Item 10. Directors, Executive Officers and
Corporate Governance.
Directors and Executive Officers
Our officers and directors are as follows:
|
Name |
|
Age |
|
Position | |
|
Isabelle Freidheim |
|
45 |
|
Chief Executive Officer and Chairperson of the Board of Directors | |
|
Jennifer Calabrese |
|
55 |
|
Chief Financial Officer | |
|
Kirthiga Reddy |
|
54 |
|
President and Director | |
|
Judith Rodin |
|
81 |
|
Director | |
|
Sharon Brown-Hruska |
|
66 |
|
Director | |
|
Trier Bryant |
|
41 |
|
Director | |
|
Carolyn Trabuco |
|
56 |
|
Director | |
**
*Isabelle Freidheim*has served as
our Chief Executive Officer since August 2021 and as Chairperson of the Board of Directors since November 2021. Isabelle was the founder
and Chair of Athena Technology Acquisition Corp. She was the founder and managing partner of Athena Capital, an investment management
firm. She is also the founder of Athena Consumer Acquisition Corp. and served as its Chairperson of the Board of Directors from June 2021
to October 2023. She is a venture capitalist and entrepreneur; she is the co-founder of Magnifi, a fintech company, and was a co-founder
and managing partner of Castle VC (formerly Starwood VC), a venture investment firm, and a venture partner at MissionOG, a venture capital
firm. She currently serves on the board of directors of Next.e.GO N.V. (NASDAQ: EGOX) and served on the board of directors of The Growth
For Good Acquisition Corporation (Nasdaq: GFGDU).
Ms. Freidheim co-founded Magnifi, an artificial
intelligence and machine learning fintech company which was acquired by The Tifin Group in December 2020. In addition to co-founding the
company, Ms. Freidheim acted as the Chief Executive Officer of Magnifi, in 2018 and 2019 before its acquisition.
Ms. Freidheim was a venture partner at MissionOG,
a venture capital firm, from 2015 to 2016, where she sourced investments in high-growth technology companies. MissionOG funds technology
businesses with a focus on B2B companies and partners with portfolio companies to provide deep market expertise and hands-on operational
support and execution capabilities.
Ms. Freidheim was a co-founder and managing partner
of Castle VC (formerly Starwood VC), making investments in technology companies across stages with a current focus on late-stage investments
in the sectors of financial technologies, data analytics, artificial intelligence, machine learning and SaaS. Ms. Freidheim has led investments
in late-stage, pre-IPO growth companies. She is engaged in all aspects of the deal process. Ms. Freidheim was also a co-founder of the
London Fund, a fund that invests in IP-rich high-growth companies with a particular focus on emerging technologies.
Ms. Freidheim started her career in investment
banking at Lehman Brothers and then joined one of Invescos private equity funds to invest in European assets. She holds a B.A.
in Economics from Columbia University and an M.B.A. from Columbia Business School. Ms. Freidheim is well qualified to serve on the Companys
Board because of her perspective and experience as founder, Chairperson of the Board and Chief Executive Officer of Athena, as well as
her extensive venture capital background, in depth experience in founding various companies and service as a director on other boards.
66
*Jennifer
Calabrese* has served as our Chief Financial Officer since July 2024. Ms. Calabrese served as the Companys outside consultant
providing accounting and financial reporting services to the Company since September 2022. Ms. Calabrese is the founder and CEO of Calabrese
Consulting LLC (CCL).Founded in 2012, CCL is a minority/woman-owned,
full-service accounting and financial reporting advisory firm with over 50 employees, serving clients around the world. CCL specializes
in SEC financial reporting, compliance, and consulting services to facilitate the reporting between auditors and public/private companies
on behalf of clients. Ms. Calabrese also currently serves as the Chief Financial Officer of Launchpad Streetlight Acquisition Corp., a
special purpose acquisition company, since August 2025 and the Chief Financial Officer of Lafayette Acquisition Corp., a special purpose
acquisition company, since July 2025. Ms. Calabrese also serves on the Audit Committee of Marpai, Inc. (Nasdaq: MRAI), a company which
provides administration services to self-insured employer groups across the UnitedStates, since December 2023. She previously spent
severalyears working for publicly traded companies, serving as Corporate Controller, Director of Accounting and SEC Reporting, Executive
Vice President of Finance and Chief Financial Officer. Ms. Calabrese began her career in 1994 working at KPMG, LLP where she held numerous
positions, including senior audit manager. She holds a B.B.A. in Accounting and a B.A. in Psychology from Hofstra University and earned
her Master of Science in Accountancy from SUNY Polytechnic. Ms. Calabrese is a Certified Public Accountant, a Chartered Global Management
Accountant, and a member of both The American Institute of Certified Public Accountants and The NewYork State Society of Certified
Public Accountants. She is also a member of the Association of Latino Professionals for America and a Director on the Board of Trustees
for Sacred Heart Academy, her high school alma mater.
**
*Kirthiga Reddy*has served as
our President since August 2021 and as a Director since November 2021. Kirthiga Reddy brings over twenty years of experience leading technology-driven
transformations. Ms. Reddy is also the co-founder and CEO of OptimizeGEO, a marketing intelligence platform helping brands be visible,
trusted and chosen in AI Search results. From December 2018 to October 2021, Ms. Reddy served as the Investment Partner at SoftBank Investment
Advisers, a private equity firm headquartered in London (SBIA), and served on the Investment Committee for the SoftBank Vision Fund Emerge
program, a global accelerator for companies led by underrepresented founders. Ms. Reddy is also a co-founder and since October 2018 has
served as Investment Council of F7 Ventures, a female-led seed investment fund focused on enabling human operations and the investment
themes of connected communities, future of work, and physical and mental health. From July 2010 to March 2018, Ms. Reddy held various
executive roles at Facebook, Inc. (Nasdaq: FB). At Facebook, Ms. Reddy first served as the Managing Director for India and South Asia,
and subsequently focused on emerging and high-growth markets including Mexico, Brazil, Indonesia, South Africa and the Middle East. Additionally,
Ms. Reddy has served as a member of the board of directors of several companies, including Collective Health, Inc. (2019 2021),
WeWork Inc. (2020 2023), Fungible, Inc. (2021 2022), and Pear Therapeutics, Inc. (2021 2023). Ms. Reddy has also
served on the Investment Advisory Council for Neythri Futures Fund, a South Asian female-led stage-agnostic tech fund since March 2021.
Ms. Reddy holds an MBA from Stanford University, where she graduated with the highest honors as an Arjay Miller Scholar, an M.S. in Computer
Engineering from Syracuse University and a B.E. in Computer Science from Marathwada University, India. She served on Stanford Business
School Management Board from September 2014 to April 2019, including serving as Chair from September 2018 to April 2019. She is on the
Trustee Board at Syracuse University and has been recognized as Fortune Indias Most Powerful Women and as Fast Companys
Most Creative People in Business among other recognitions. Ms. Reddy is well qualified to serve on the Companys Board
because of her private equity background, various executive roles at Facebook, in depth experience in founding various companies and service
as a director on other boards.
*Judith Rodin, PhD*has served as
one of our directors since August 2021. Dr. Rodin served as the President of The Rockefeller Foundation, which supports efforts to combat
global social, economic, health and environmental challenges, from March 2005 to January 2017. From 1994 to 2004, Dr. Rodin served as
the President of the University of Pennsylvania, as well as a professor of psychology and of medicine and psychiatry at the University
of Pennsylvania. Before that, Dr. Rodin chaired the Department of Psychology at Yale University, and also served as the dean of the Graduate
School of Arts and Sciences and provost, and served as a faculty member at the university for 22 years. Dr. Rodin served as a director
of Athena Technology Acquisition Corp. one of the first all women SPACs. Dr. Rodin has served as the chair of the board of Prodigy Services
Limited, a fintech platform, since 2019, and a member of the board and a member of the nominating and governance committee of Laureate
Education, a higher education institution, since 2013. From 2002 to 2018, Dr. Rodin served as a member of the board of directors and a
member of the audit and compensation committees of Comcast Corporation (Nasdaq: CMCSA). From 1997 to 2013, Dr. Rodin served as a member
of the board of directors and a member of the audit committee of American Airlines Group (formerly known as AMR Corporation) (Nasdaq:
AAL). From 2004 to 2017, Dr. Rodin served as a member of the board of directors and a member of both the nominating and governance and
the compensation committees of Citigroup Inc. Dr. Rodin earned a B.A. in Psychology from the University of Pennsylvania and a Ph.D. in
Psychology from Columbia University. Dr. Rodin is well-qualified to serve on our Board due to her extensive experience in higher education
and philanthropy.
67
*Sharon Brown-Hruska, PhD*has served
as one of our directors since December2021. Dr.Hruska has been a Principal of Hruska Economics, LLC since October2021,
where she works with nonprofit entities, universities, corporate clients, and government to facilitate practical and market-based solutions
to our toughest social and economic challenges. She also has served as a public director and the Chairman of the Regulatory Oversight
Committee of FMX Futures Exchange, L.P. since December2021. She has served on the Management Board of PRIME Finance Disputes Center
since October2021, and previously served on the Board of the PRIME Finance Dispute Resolution and Education Foundation from November2017
to January2019. As a financial economist and former regulator, Dr.Hruska has over three decades of experience in public policy,
leadership and administration, including as Chief Economist of the U.S.Department of State from January2019 to January2021,
and as Commissioner from July2002 to July2006 of the U.S.Commodity Futures Trading Commission. In addition to her public
service, she is an affiliate of National Economic Research Associates, where she was Managing Director and Partner in the Global Securities
and Finance Practice, from July2006 to January2019. She served as a Public Director of MarketAxess Holdings, Inc. (Nasdaq:
MKTX) and on its Corporate Governance Committee from April2010 to April2013. She also served as a Director on the ELX Futures,
L.P. from May2009 to September2016 and as a Trustee on the International Securities Exchange Trust from December2007
to June2016.
She was also a Professor at Tulane University
A.B.Freeman School of Business from July2012 until June2016. She has testified before Congress and spoken widely to
various audiences, and her thought leadership has been published in Barrons, Financial Times, Forbes, the Encyclopedia of Business Ethics
and Society, and various peer-reviewed journals and books. She received a PhD in 1994 and an MA in 1988 in economics, and a BA in 1983
in economics and international studies from Virginia Tech. Dr. Hruska is well qualified to serve on the Companys Board because
of her financial expertise and leadership experience in business and government.
*Trier Bryant* has served as one of
our directors since December 2022. She is the founder of TrierBryant.com, a consulting firm that advises organizations on strategies and
tactics to improve their workplace culture. Ms. Bryant is also the co-founder of Just Work LLC, a professional services firm, and Pathfinder
1963 LLC, a diversity, equity and inclusion (DEI) and human resources (HR) consulting firm, which she founded
in February 2019. Previously, Ms. Bryant was General Partner and President of 82VS, the venture creation arm of Alloy Therapeutics, where
she supported cutting-edge innovators launching companies to bring drug discoveries to market. From March 2020 to January 2021, Ms. Bryant
was the first Chief People Officer (CPO) at Astra, an aerospace company building low orbital rockets. From April 2019 to March 2020, she
was also the VP of People and Workplace Experience at SigFig, a global FinTech company. From February 2016 to May 2018, Ms. Bryant was
the Global Head of Revenue, G&A (Corporate Functions), University, and Diversity Recruiting at Twitter. Before Twitter, Ms. Bryant
spent three years (2013-2016) as the VP of Global Diversity Talent Acquisition at Goldman Sachs. Additionally, from 2013 to 2014, Ms.
Bryant served as the Chief of Staff to the Global Head of Talent Acquisition at Goldman Sachs. Ms. Bryant serves as a Board Member for
Athena SPACs and Campaign Zero, a non-profit committed to ending police violence in America. Ms. Bryant built her professional foundation
as an officer in the United States Air Force across seven years of active duty service (2006-2013). Prior to leaving the military, Ms.
Bryant was by-name-requested by the Pentagon to return to the Air Force Academy to spearhead DEI and talent development initiatives for
the Air Force Academy, Air Force, and the Department of Defense (DoD). Ms. Bryant earned a B.S. in Systems Engineering with a minor in
Spanish and Leadership from the United States Air Force Academy. Ms. Bryant is well qualified to serve on the Companys Board because
of her in-depth experience in human resources and DEI at several different companies.
*Carolyn Trabuco* has served as one
of our directors since October 2024. Since 2017, Ms. Trabuco has been serving as Founder and CEO of Thistledown Advisory Group, LLC, a
USA-based strategic advisory and consulting firm. She also serves as a member of the board of directors of USA Rare Earth, Inc. (Nasdaq:
USAR), on which she has served since it went public in March 2025. She has served as a director of Inflection Point V since January 2026.
Prior to this, Ms. Trabuco previously served as an independent board member of Shimmick Corporation (Nasdaq:SHIM) from November 2023 to
June 2025, as an independent director at Azul Brazilian Airlines (NYSE:AZUL), a commercial passenger airline she co-founded, from 2007
until April 2025, where she served as Compensation Committee Chair and member of the ESG Committee, as the lead independent director and
audit committee member of Critical Metals Corp. (Nasdaq:CRML) from November 2022 to December 2024, and as a director at Sizzle Acquisition
Corp. (Nasdaq:SZZL) from 2022-23. From 2009-2014, Ms. Trabuco was a portfolio manager and senior advisor at Astenbeck Capital Markets/Phibro
Energy Trading LLC, with responsibility for investing in global resources and energy equities. Prior to that, Ms. Trabuco was a portfolio
manager and senior equity research analyst at Pequot Capital Management where she established the firms investment presence in
global metals, mining and steel and in Brazil. Ms. Trabuco began her investment career in Equity Research at Fidelity Investments and
later at the Wall Street firms Lehman Brothers, Montgomery Securities and First Union Capital Markets. She is also an adjunct professor
of finance at Sacred Heart University. Ms. Trabuco graduated from Georgetown University with a B.A. in Art History and an M.P.A. from
Sacred Heart University in Public Administration with a concentration in Emergency and Crisis Management. She holds certificates in Corporate
Sustainability from Yale School of Management and in Compensation Committees from Harvard Business School. Ms. Trabuco is well-qualified
to serve on the Athena Board given her extensive experience with public companies and finance.
68
Number and Terms of Office of Officers and Directors
Our board of directors currently consists of six
members: Isabelle Freidheim, Kirthiga Reddy, Judith Rodin, Sharon Brown-Hruska, Trier Bryant and Carolyn Trabuco. As set forth in our
Charter, the Board is currently divided into three classes with staggered, three-year terms. At each annual meeting of stockholders, the
successors to directors whose terms then expire will be elected to serve from the time of election and qualification until the third annual
meeting following election (except for those directors appointed prior to our first annual meeting of stockholders). The current class
structure is as follows: Class I, whose current term will expire at the 2026 Annual Meeting; Class II, whose term will expire at the 2027
Annual Meeting of Stockholders; and Class III, whose term will expire at the 2028 Annual Meeting of Stockholders. The current Class I
Director is Trier Bryant and Carolyn Trabuco; the current Class II Directors are Judith Rodin and Sharon Brown-Hruska; and the current
Class III Directors are Isabelle Freidheim and Kirthiga Reddy.
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 Certificate of Incorporation.
Committees of the Board of Directors
Our board of directors has three standing committees:
an audit committee, a compensation committee and a nominating and corporate governance committee. Subject to phase-in rules and a limited
exception, applicable stock exchange listing standards and Rule 10A of the Exchange Act require that the audit committee of a listed company
be comprised solely of independent directors. Subject to phase-in rules and a limited exception, applicable stock exchange listing rules
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 has been approved by our Board and has the composition and responsibilities
described below.
*Audit Committee*
**
We have established an audit committee of the
board of directors. Sharon Brown-Hruska, Trier Bryant and Carolyn Trabuco serve as members of our audit committee, and Sharon Brown-Hruska
chairs the audit committee. Under applicable stock exchange listing standards and SEC rules, all the directors on the audit committee
must be independent and the audit committee must have at least three members. Each of Sharon Brown-Hruska, Trier Bryant and Carolyn Trabuco
meet the independent director standard under applicable stock exchange listing standards and under Rule 10-A-3(b)(1) of the Exchange Act.
Each member of the audit committee is financially
literate and our board of directors has determined that each of Sharon Brown-Hruska and Carolyn Trabuco 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 registered public accounting firms qualifications and independence, and (4) the performance of our internal audit function and independent registered public accounting firm; | |
69
|
| reviewing
the appointment, compensation, retention, replacement, and oversight of the work of the independent registered public accounting firm
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 registered public accounting firm or any other registered public accounting firm engaged by us, and establishing pre-approval policies and procedures; | |
|
|
|
reviewing and discussing with the independent registered public accounting firm all relationships the auditors have with us in order to evaluate their continued independence; | |
|
|
|
setting clear hiring policies for employees or former employees of the independent registered public accounting firm; | |
|
|
|
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 registered public accounting firm describing (1) the independent registered public accounting firms internal quality-control procedures and (2) any material issues raised by the most recent internal quality-control review, or peer review, of the independent registered public accounting 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 registered public accounting firm, 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 registered public accounting firm, 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. | |
During the Companys 2025 fiscal year, Sharon
Brown-Hruska served as chair and Trier Bryant and Carolyn Trabuco served as members of the audit committee.
**
*Compensation Committee*
**
We have established a compensation committee of
the board of directors. Judith Rodin and Sharon Brown-Hruska serve as members of our compensation committee. Judith Rodin 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; | |
70
|
|
|
reviewing and making recommendations to our board of directors with respect to (or approving, if such authority is so delegated by our board of directors) the compensation, and any incentive-compensation and equity-based plans that are subject to board approval of all of our other officers; | |
|
|
|
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. | |
During the Companys 2025 fiscal year, Judith
Rodin served as chair and Sharon Brown-Hruska served as a member of the compensation committee.
Notwithstanding the foregoing, as indicated above,
other than the payment to our Sponsor of $10,000 per month, for up to 18 months, 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 stockholders, 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 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 will be 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 applicable listing exchange rules and the SEC.
*Nominating and Corporate Governance Committee*
**
We have established a nominating and corporate
governance committee. The members of our nominating and corporate governance are Judith Rodin and Trier Bryant. Judith Rodin serves as
chairperson of the nominating and corporate governance committee.
The primary purposes of our nominating and corporate
governance committee are to assist the Board in:
|
|
|
identifying, screening and reviewing individuals qualified to serve as directors and recommending to the board of directors candidates for nomination for election at the annual meeting of stockholders or to fill vacancies on the board of directors; | |
|
|
|
developing, recommending to the board of directors and overseeing implementation of our corporate governance guidelines; | |
|
|
|
coordinating and overseeing the annual self-evaluation of 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 nominating and corporate governance committee
is governed by a charter that complies with applicable listing exchange rules.
During the Companys 2025 fiscal year, Judith
Rodin served as chair and Trier Bryant served as a member of the nominating and corporate governance committee.
71
*Director Nominations*
**
Our Nominating and Corporate Governance Committee
will recommend to the board of directors candidates for nomination for election at the annual meeting of the stockholders. Prior to our
initial business combination, the board of directors will also consider director candidates recommended for nomination by holders of our
shares of common stock during such times as they are seeking proposed nominees to stand for election at an annual meeting of stockholders
(or, if applicable, a special meeting of stockholders).
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 stockholders.
Code of Ethics
We have a written Code of Business Conduct and
Ethics that applies to our directors, officers and employees, including our principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing similar functions. We have posted a current copy of the Code of Business
Conduct and Ethics in the Governance section of our website located at www.athenaspac.com. In addition, we intend to post
on our website all disclosures that are required by law or applicable listing exchange rules concerning any amendments to, or waivers
from, any provision of the Code of Business Conduct and Ethics.
Insider Trading Policy
We have adopted an insider trading policy that governs the purchase, sale, and/or other dispositions of our securities by directors, officers and employees that is reasonably designed to promote compliance with insider trading laws, rules and regulations, and the listing requirements of the NYSE American. A copy of our insider trading policy is filed as Exhibit 19.1 to this Annual Report on Form 10-K.
Conflicts of Interest
In general, officers and directors of a corporation
incorporated under the laws of the State of Delaware are required to present business opportunities to a corporation if:
|
|
|
the corporation could financially undertake the opportunity; | |
|
|
|
the opportunity is within the corporations line of business; and | |
|
|
|
it would not be fair to our company and its stockholders for the opportunity not to be brought to the attention of the corporation. | |
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 entity. Our Charter provides that we renounce our interest in any corporate 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 such opportunity is one we are legally and contractually permitted to undertake and would otherwise be reasonable for us to pursue,
and to the extent the director or officer is permitted to refer that opportunity to us without violating another legal obligation. We
do not believe, however, that the fiduciary duties or contractual obligations of our officers or directors will materially affect our
ability to complete our initial business combination.
72
Below is a table summarizing the entities to which
our executive officers and directors currently have fiduciary duties or contractual obligations:
|
Individual |
|
Entity |
|
Entitys
Business |
|
Affiliation | |
|
Isabelle
Freidheim |
|
Athena
Technology Sponsor II, LLC |
|
Technology,
consumer, tech-enabled retail/consumer and direct to consumer |
|
Managing
Member | |
|
|
|
Infinitum
Energy |
|
Solar
Power |
|
Director | |
|
Jennifer
Calabrese |
|
Calabrese
Consulting, LLC |
|
Accounting
and Advisory Services |
|
Founder
and Chief Executive Officer | |
|
|
|
Marpai,
Inc. |
|
Healthcare
Financing Services |
|
Director | |
|
Kirthiga
Reddy |
|
OptimizeGEO |
|
Marketing
intelligence |
|
Co-founder
and CEO | |
|
|
|
F7
Ventures |
|
Seed
investment fund |
|
Co-founder
and Investment Council | |
|
|
|
Pear
Therapeutics, Inc. |
|
Technology,
healthcare |
|
Director | |
|
Judith
Rodin |
|
Prodigy
Services Limited |
|
Fintech |
|
Chair
of the Board | |
|
|
|
Portfolia |
|
Venture
Investment |
|
Director | |
|
|
|
Laureate
Education |
|
Higher
Education |
|
Director | |
|
Sharon
Brown-Hruska |
|
Hruska
Economics, LLC |
|
Economics
and Global Markets Advisory |
|
Principal | |
|
|
|
PRIME
Finance Foundation |
|
Non-For-Profit
Foundation |
|
Member
of the Management Board | |
|
|
|
FMX
Futures Exchange, L.P. |
|
Futures
and options exchange |
|
Director
and Chair of Regulatory Oversight Committee | |
|
Trier
Bryant |
|
Just
Work LLC |
|
Professional
services |
|
Co-founder
and CEO | |
|
|
|
Pathfinder
1963 LLC |
|
DEI
and HR consulting |
|
Founder
and CEO | |
|
Carolyn
Trabuco |
|
USA
Rare Earth, Inc.
Inflection Point Acquisition Corp. V |
|
Fabricated
Metal Products
Special Purpose Acquisition Corporation |
|
Director
Co-founder and
Director | |
We are not prohibited from pursuing an initial
business combination with a business combination target 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 our initial business combination with a business combination target that is affiliated with our Sponsor, executive officers or
directors, we, or a committee of independent directors, would obtain an opinion from an independent investment banking firm or another
independent entity that commonly renders valuation opinions, that such initial business combination is fair to our company from a financial
point of view. We are not required to obtain such an opinion in any other context.
In the event that we submit our initial business
combination to our public stockholders for a vote, our initial stockholders have agreed to vote their founder shares and private placement
shares, and they and the other members of our management team have agreed to vote any founder shares and private placement shares they
hold and any shares purchased during or after the offering in favor of our initial business combination.
73
Limitation on Liability and Indemnification of Officers and Directors
Our Charter provides that our officers and directors
will be indemnified by us to the fullest extent authorized by Delaware law, as it now exists or may in the future be amended. In addition,
our Charter provides that our directors will not be personally liable for monetary damages to us or our stockholders for breaches of their
fiduciary duty as directors, unless they violated their duty of loyalty to us or our stockholders, acted in bad faith, knowingly or intentionally
violated the law, authorized unlawful payments of dividends, unlawful stock purchases or unlawful redemptions, or derived an improper
personal benefit from their actions as directors.
We have entered into agreements with our officers
and directors to provide contractual indemnification in addition to the indemnification provided for in our Charter. Our bylaws also will
permit us to secure insurance on behalf of any officer, director or employee for any liability arising out of his or her actions, regardless
of whether Delaware law would permit such indemnification. 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. Except with respect to any public shares they may acquire
in the initial public offering or thereafter (in the event we do not consummate an initial business combination), our officers and directors
have agreed to waive (and any other persons who may become an officer or director prior to the initial business combination will also
be required to waive) any right, title, interest or claim of any kind in or to any monies in the Trust Account, and not to seek recourse
against the Trust Account for any reason whatsoever, including with respect to such indemnification.
These provisions may discourage stockholders from
bringing a lawsuit against our directors for breach of their fiduciary duty. These provisions also may have the effect of reducing the
likelihood of derivative litigation against officers and directors, even though such an action, if successful, might otherwise benefit
us and our stockholders. Furthermore, a stockholders investment may be adversely affected to the extent we pay the costs of settlement
and damage awards against officers and directors pursuant to these indemnification provisions.
We believe that these provisions, the directors
and officers liability insurance and the indemnity agreements are necessary to attract and retain talented and experienced officers
and directors.
Item 11. Executive Compensation.
None of our directors has received any cash compensation
for services rendered to us. Commencing on the date that our securities were first listed on the NYSE through the earlier of consummation
of our initial business combination and our liquidation, we will pay our Sponsor $10,000 per month for office space, secretarial and administrative
services provided to members of our management team. In addition, our Sponsor, executive officers and directors, or any of their respective
affiliates 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, executive officers or directors, or our or their affiliates. Any such payments prior
to an initial business combination will be made from funds held outside the Trust Account. Other than quarterly audit committee review
of such reimbursements, 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 our activities on our behalf in connection with identifying
and consummating an initial business combination. Other than these payments and reimbursements, 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, prior to completion of our initial business combination.
After the completion of our initial business combination,
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 stockholders, to the extent then known, in the proxy solicitation materials or tender offer materials furnished
to our stockholders in connection with a proposed 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 business combination, because the directors of the post-combination business will be responsible for
determining executive officer and director compensation. Any compensation to be paid to our executive 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 executive 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 executive officers
and directors that provide for benefits upon termination of employment.
74
Item 12. Security Ownership of Certain Beneficial Owners and Management
and Related Stockholder Matters.
The following table sets forth information regarding
the beneficial ownership of our shares of common stock as of March 6, 2026 by:
|
|
|
each person known by us to be the beneficial owner of more than 5% of our outstanding shares of common stock; | |
|
|
|
each of our executive officers and directors; and | |
|
|
|
all our executive officers and directors as a group. | |
Unless otherwise indicated, we believe that all
persons named in the table have sole voting and investment power with respect to all of our shares of common stock beneficially owned
by them. The following table does not reflect record or beneficial ownership of the private placement warrants as these warrants are not
exercisable within 60 days of the date of this Annual Report on Form 10-K.
Unless otherwise indicated, the beneficial ownership
of our shares of common stock is based on 9,859,887 shares of Class A common stock issued and outstanding as of March 6, 2026, consisting
of 9,859,887 shares of Class A common stock issued and outstanding and 0 shares of Class B common stock issued and outstanding.
|
Name and Address of Beneficial Owner(1) | |
Number of Shares of
Class A Common Stock Beneficially Owned | | |
Approximate Percentage of Outstanding Class A
Common Stock | | |
|
Directors and Executive Officers | |
| | |
| | |
|
Isabelle Freidheim(2) | |
| 9,835,000 | | |
| 99.7 | % | |
|
Jennifer Calabrese | |
| - | | |
| - | | |
|
Kirthiga Reddy | |
| - | | |
| - | | |
|
Judith Rodin | |
| - | | |
| - | | |
|
Sharon Brown-Hruska | |
| - | | |
| - | | |
|
Trier Bryant | |
| - | | |
| - | | |
|
Carolyn Trabuco | |
| - | | |
| - | | |
|
All executive officers and directors as a group (seven individuals) | |
| 9,835,000 | | |
| 99.7 | % | |
|
Five Percent Holders | |
| | | |
| | | |
|
Athena Technology Sponsor II LLC(2) | |
| 9,835,000 | | |
| 99.7 | % | |
|
(1) |
Unless otherwise noted, the business address of each of the following is 442 5th Avenue, New York, NY 10018. | |
|
|
| |
|
(2) |
Represents shares held by our Sponsor. Isabelle Freidheim is the sole managing member of our Sponsor. Ms. Freidheim has sole voting and investment discretion and sole dispositive power with respect to the common stock held of record by our Sponsor. Ms. Freidheim disclaims any beneficial ownership of the reported shares other than to the extent of any pecuniary interest she may have therein, directly or indirectly. As previously disclosed in the Companys Quarterly Report on Form 10-Q that was filed on November 20, 2023 for the quarter ended September 30, 2023, the Company issued two promissory notes to the Sponsor for an aggregate amount of $300,000 (the Notes) to pay certain working capital and proxy extension expenses. In connection with the funding of the Notes, on July 5, 2023, the Sponsor entered into a subscription agreement with Polar pursuant to which, upon the closing of the initial business combination, the Sponsor will transfer up to 300,000 shares of Class A common stock to Polar. On December 6, 2024, Polar contributed an additional $200,000 to Sponsor (for an aggregate of $500,000), which in turn was loaned by Sponsor to the Company. The Company will repay the entire balance to Polar within five business days of the closing of an initial business combination of the Company and the Sponsor will transfer and/or the Company will issue on Sponsors behalf an additional 200,000 shares of Class A common stock to Polar immediately prior to the closing of an initial business combination of the Company (for an aggregate of 500,000 shares to be transferred and/or issued to Polar). | |
75
Item 13. Certain Relationships and Related Transactions, and Director
Independence.
*Founder Shares*
**
On August 31, 2021, the Sponsor paid certain costs
totaling $25,000 on behalf of the Company as consideration for 7,362,500 shares of Class B common stock, and in November 2021, the Company
effected a 1.36672326 for 1 stock split of its common stock, so that the Sponsor owned an aggregate of 10,062,500 founder shares. The
founder shares are subject to certain transfer restrictions. The Sponsor agreed to forfeit up to 1,312,500 founder shares to the extent
that the over-allotment option was not exercised in full by the underwriters. In connection with the underwriters partial exercise
of their over-allotment option on December 28, 2021, the Sponsor forfeited 1,181,250 founder shares, resulting in the Sponsor holding
8,881,250 founder shares, all of which were converted on a one-to-one basis to shares of Class A common stock on June 21, 2023.
The initial stockholders agreed, subject to limited
exceptions, not to transfer, assign or sell any of its founder shares until the earlier to occur of: (A) one year after the completion
of the initial business combination or (B) subsequent to the initial business combination, (x) if the last sale price of the Class A common
stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like)
for any 20 trading days within any 30-trading day period commencing at least 150 days after the initial business combination, or (y) the
date on which the Company completes a liquidation, merger, capital stock exchange or other similar transaction that results in all of
the Companys stockholders having the right to exchange their shares of common stock for cash, securities or other property.
*Related Party Loans*
**
On August 31, 2021, the Sponsor agreed to loan
the Company an aggregate of up to $300,000 to cover expenses related to the IPO pursuant to a promissory note (the IPO Note).
This loan was non-interest bearing and payable on the earlier of January 31, 2022 or the completion of the IPO. The Company borrowed $104,402
under the IPO Note, all of which was repaid prior to December 31, 2021 and the IPO Note is no longer available for use for future borrowings.
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. If the Company completes a Business Combination, it
will repay the Working Capital Loans out of the proceeds of the Trust Account released by the Company. Otherwise, the Working Capital
Loans will 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 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.
In July 2023, the Company issued an unsecured
promissory note to Sponsor with a principal amount equal to $60,000 (the Extension Note). On the same date, in connection
with advances Sponsor may make in the future to Athena for working capital expenses in connection with Athenas initial business
combination, Athena issued a separate unsecured promissory note to the Sponsor in the principal amount of up to $240,000 (the Working
Capital Note). Both notes bear no interest and are repayable in full upon the earlier of (a) the date of the consummation of Athenas
initial business combination, or (b) the date of Athenas liquidation. As of December 31, 2024, the total outstanding balance of
the Notes was $300,000.
In connection with funding the notes, on July
5, 2023, Sponsor entered into a subscription agreement with a third-party investor. Pursuant to such agreement, Sponsor will transfer
one share of Athena Class A Common Stock for each dollar funded upon the closing of a Business Combination. As of December 31, 2024, such
third-party investor loaned $300,000 to Sponsor, which amount is included in the balance due to Sponsor under the notes described above.
As discussed herein, the Company has the right
to extend the date by which it must consummate an initial Business Combination (the Deadline Date) up to three more times
for an additional one month each time up to June 14, 2026, and, for every extension implemented, the Sponsor or its designees will deposit
into the Trust Account the lesser of (x) $25,000 or (y) $0.02 per Public Share outstanding, upon the election of each such one-month extension
unless the closing of an initial Business Combination has occurred.
76
In connection with prior extension contributions,
in July 2023, the Company issued an unsecured promissory note to the Sponsor with a principal amount equal to $60,000 (the Extension
Note). On the same date, in connection with advances the Sponsor may make in the future to the Company for working capital expenses
in connection with the initial business combination, Athena issued a separate unsecured promissory note to the Sponsor in the principal
amount of up to $240,000 (together with the Extension Note, the 2023 Notes). The 2023 Notes bear no interest and are repayable
in full upon the earlier of (a) the date of the consummation of the Companys initial Business Combination, or (b) the date of the
Companys liquidation. If the Company does not consummate an initial Business Combination by the Deadline Date, the 2023 Notes will
be repaid only from funds held outside of the Trust Account or will be forfeited, eliminated or otherwise forgiven.
On October 10, 2024 (effective on April 10, 2024),
the Company issued an unsecured and non-interest-bearing promissory note to Sponsor with a principal amount equal to $1,500,000 to cover
the monthly extension payments of the Company and for working capital purposes. The note is payable in full upon the earlier of (a) April
10, 2026 (b) the date the Company consummates a Business Combination. Athena drew $800,000 from this note on April 10, 2024.
On December 6, 2024, the Company and Sponsor entered
into an Amended and Restated Subscription Agreement with Polar pursuant to which Polar contributed an additional $200,000 to Sponsor (for
an aggregate of $500,000), which in turn was loaned by Sponsor to the Company to fund any additional extensions of the date by which the
Company must consummate an initial Business Combination and to cover working capital expenses. The A&R Polar Subscription Agreement
provides that in connection with the Initial Polar Capital Investment, the Company will repay the entire balance of the Initial Polar
Capital Investment to Polar within five business days of the closing of Athenas initial Business Combination, and that Sponsor
will transfer and/or the Company will issue on Sponsors behalf an additional 200,000 shares of Class A common stock to Polar immediately
prior to the closing of an initial Business Combination (for an aggregate of 500,000 shares to be transferred and/or issued to Polar in
connection with the Initial Polar Capital Investment).
On each of June 14, 2023, July 7, 2023, August
8, 2023, September 7, 2023, October 6, 2023, November 7, 2023, December 8, 2023, January 8, 2024 and February 9, 2024, the Company determined
to exercise its extension option and to extend the Deadline Date each time for an additional month for a total extension to March 14,
2024. On or about each such date, the Company delivered to the Sponsor a written request to draw down $60,000 for each monthly extension
and the Sponsor funded $60,000 to the Company for each monthly extension, with an aggregate additional amount of $540,000 funded by the
Sponsor.
On each of March 13, 2024, April 16, 2024, May
14, 2024, June 14, 2024, July 10, 2024, August 8, 2024, September 12, 2024, October 15, 2024 and November 11, 2024, the Company determined
to exercise its extension option and to extend the Deadline Date each time for an additional month for a total extension to December 14,
2024. On or about each such date, the Company delivered to the Sponsor a written request to draw down $25,756 for each monthly extension
and the Sponsor funded $25,756 to the Company for each monthly extension, with an aggregate additional amount of $231,804 funded by the
Sponsor.
On each of December 11, 2024, January 10, 2025,
February 10, 2025, March 6, 2025, April 7, 2025, May 7, 2025, June 6, 2025, July 8, 2025 and August 11, 2025, the Company determined to
exercise its extension option and to extend the Deadline Date each time for an additional month for a total extension to September 14,
2025. On or about each such date, the Company delivered to the Sponsor a written request to draw down $6,203 for each monthly extension
and the Sponsor funded $6,203 to the Company for each monthly extension, with an aggregate additional amount of $55,827 funded by the
Sponsor.
On each of September 12, 2025, October 7, 2025,
November 4, 2025, December 8, 2025, January 5, 2026, February 5, 2026 and March 4, 2026, the Company determined to exercise its extension
option and to extend the Deadline Date for an additional month for a total extension to April 14, 2026. On or about each such date, the
Company delivered to the Sponsor a written request to draw down approximately $497.74 for the monthly extension and the Sponsor funded
$497.74 to the Company for each monthly extension.
77
On February 9, 2025, the Company and Sponsor entered
into the February 2025 Subscription Agreement with Kevin Wright and Jeanine Percival Wright Revocable Trust pursuant to which the Investor
contributed $500,000 to Sponsor, which in turn was loaned by Sponsor to the Company to fund any additional extensions of the date by which
Athena must consummate an initial Business Combination and to cover working capital expenses. The February 2025 Subscription Agreement
provides that in connection with the Contribution, the Company will repay the entire balance of the Contribution to the Investor within
five business days of the closing of the Companys initial Business Combination and that Sponsor will transfer and/or Athena will
issue on the Sponsors behalf an additional 300,000 shares of Class A common stock to the Investor immediately prior to the closing
of the Companys initial business combination.
On August 11, 2025, the Company and Sponsor entered
into the August Subscription Agreement with Polar pursuant to which Polar contributed an additional $400,000 (for an aggregate of $900,000)
to the Company to cover working capital expenses. The August Subscription Agreement provides that in connection with the August Polar
Capital Investment, immediately prior to the closing of a Business Combination, the Company will issue to Polar one share of Class A common
Stock per $1.00 contributed by Polar.
Additionally, in connection with the August Subscription
Agreement, an amount equal to the August Polar Capital Investment shall be paid by the Company to Polar as a return of capital within
five business days of the closing of a Business Combination. Additionally, Sponsor may not sell, transfer, or otherwise dispose of any
securities (including warrants) owned by Sponsor without Polars consent, other than permitted share transfers, until the full amount
of the August Polar Capital Investment has been paid to Polar. The Company and Sponsor are jointly and severally obligated for such repayment.
If the closing of a Business Combination occurs, Polar may, in its sole discretion, elect at the closing of such Business Combination
or at any time prior to the repayment of the August Polar Capital Investment to receive such repayment from the Company either in cash
or shares of Class A common stock at a rate of one share of Class A common stock for each $10 of the contribution. In the event that Sponsor
or the Company defaults in its obligations and that such default continues for a period of five business days following written notice
to Sponsor and the Company, Athena must immediately issue to Polar 0.1 shares of Class A common stock for each $1.00 of the August Polar
Capital Investment on the Default Date, and must issue to Polar an additional 0.1 Default Shares for each $1.00 of the August Polar Capital
Investment that Polar funded each month thereafter, until the default is cured.
Except for the foregoing, the terms of any additional
Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans. The Working Capital
Loans will either be repaid upon consummation of a business combination, without interest, or, at the lenders discretion, up to
$1.5 million of such Working Capital Loans may be convertible into units of the post-business combination entity at a price of $10.00
per unit. The units would be identical to the private placement units.
Total borrowings under the Working Capital Loans
structure as of December 31, 2025 and December 31, 2024 were $1,800,000 and $1,155,205, respectively.
*Convertible Note - Related Party*
On April 10, 2024, the Company issued an unsecured
promissory note to Isabelle Freidheim, its Chief Executive Officer, with a principal amount equal to $600,000. The note accrues interest
on the unpaid principal amount at a rate equal to six percent (6.0%) per annum, computed as a simple interest on the basis of a year of
365 days. The note is due on the earlier of (i) April 10, 2024, or (ii) the Companys initial Business Combination. The Company
received the full principal amount of $600,000 on April 10, 2024.
On April 10, 2024, the Company issued an unsecured
promissory note to Kirthiga Reddy, its President and Director, with a principal amount equal to $200,000. The note accrues interest on
the unpaid principal amount at a rate equal to six percent (6.0%) per annum, computed as a simple interest on the basis of a year of 365
days. The note is due on the earlier of (i) April 10, 2024, or (ii) the Companys initial Business Combination. The Company received
the full principal amount of $200,000 on April 10, 2024.
On July 26, 2024, the Company issued an unsecured
promissory note to Sponsor with a principal amount equal to $422,182. The note is non-interest bearing and payable on the earlier of July
26, 2026 or the Companys initial Business Combination. The note may be converted into equity securities of the Company on mutually
agreeable terms if consented to in writing by Sponsor. As of December 31, 2024, the Company received the full principal amount of $422,182
under this note.
78
*Administrative Services Agreement*
**
We entered into an agreement with the Sponsor
whereby, commencing on December 9, 2021 through the earlier of the consummation of a business combination and our liquidation, we agreed
to pay the Sponsor $10,000 per month for office space, utilities, and secretarial and administrative services.
For the year ended December 31, 2025, $120,000
has been incurred and $80,000 was paid under this agreement. For the year ended December 31, 2024, $120,000 has been incurred under this
agreement, $40,000 of which was paid as of December 31, 2024.
*Sponsor Support Agreement*
In connection with the execution of the Business
Combination Agreement, Sponsor entered into a Voting and Support Agreement (the Sponsor Support Agreement) with Athena and
Ace Green Recycling, pursuant to which Sponsor has agreed to, among other things, (a) vote at any meeting of Athena shareholders to be
called for approval of the Business Combination Agreement, the Merger, and the other Transactions all shares of Athena Class A Common
Stock (together with any warrants to acquire Athena Class A Common Stock, the Sponsor Securities) beneficially owned or
thereafter acquired in favor of the Business Combination Agreement, the Merger, and the other Transactions, (b) be bound by certain other
covenants and agreements related to the Transactions and (c) be bound by certain transfer restrictions with respect to the Sponsor Securities,
in each case, on the terms and subject to the conditions set forth in the Sponsor Support Agreement.
In connection with the execution of the Business
Combination Agreement, certain Ace Green Recycling shareholders entered into a Voting and Support Agreement (the Ace Green Recycling
Support Agreement) with Athena and Ace Green Recycling, pursuant to which each such Ace Green Recycling shareholder has agreed
to, among other things, (a) vote at any meeting of Ace Green Recyclings shareholders to be called for approval of, among other
things, the Business Combination Agreement and the Transactions all of such Ace Green Recycling shareholders shares of Ace Green
Recycling common stock (the Ace Green Recycling Securities) beneficially owned or thereafter acquired in favor of the Transactions,
(b) be bound by certain other covenants and agreements related to the Transactions and (c) be bound by certain transfer restrictions with
respect to the Ace Green Recycling Securities, in each case, on the terms and subject to the conditions set forth in the Ace Green Recycling
Support Agreement.
*Lock-Up Agreements*
**
In connection with the closing of a Business Combination,
Sponsor will enter into an agreement (the Sponsor Lock-Up Agreement) providing that Sponsor will not, subject to certain
exceptions, transfer its shares of Athena common stock during the period commencing on the closing date of the Business Combination and
ending 180 days thereafter.
*Sponsor Extension Deposits*
As of the date of this Annual Report on Form 10-K,
the Sponsor has deposited an aggregate of $796,612 into the Trust Account in order to extend the deadline by which the Company must consummate
its initial business combination pursuant to the Charter and the amended Trust Agreement.
*Sponsor Indemnity*
The Sponsor has agreed that it will be liable
to the Company if and to the extent any claims by a third-party 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, confidentiality or similar agreement or business combination,
reduce the amounts in the Trust Account to below the lesser of (i) $10.10 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 $10.10 per Public Share due to reductions
in the value of the trust assets, in each case net of the interest that may be withdrawn to pay the Companys tax obligations, provided
that such liability will not apply to any claims by a third-party or prospective target business that executed a waiver of any and all
rights to seek access to the Trust Account (whether or not such waiver is enforceable) nor will it apply to any claims under the Companys
indemnity of the underwriters of the IPO against certain liabilities, including liabilities under the Securities Act. The Company has
not asked the Sponsor to reserve for such indemnification obligations and has not 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
and, therefore, the Sponsor may not be able to satisfy those obligations. None of the Companys other directors or officers will
indemnify it for claims by third parties including, without limitation, claims by vendors and prospective target businesses.
79
*Calabrese Consulting, LLC*
As of the date of this Annual Report on Form 10-K,
the Companys Chief Financial Officer is Ms. Jennifer Calabrese. Ms. Calabrese is the founder and Chief Executive Officer of Calabrese
Consulting, LLC, a financial consulting firm which has provided accounting and financial reporting services to the Company since September
2022. In 2025, Calabrese Consulting, LLC provided services to the Company totaling $94,150.
Statement of Policy Regarding Transactions
with Related Persons
The Company has adopted a formal written policy
providing that the Companys executive officers, directors, director nominees, record or beneficial owners of more than 5% of any
class of the Companys voting securities, and any member of the immediate family of any of the foregoing persons, are not permitted
to enter into a related party transaction with the Company without the approval of the Companys audit committee, subject to certain
exceptions.
*Director Independence*
**
National listing exchange rules generally require
that independent directors must comprise a majority of a listed companys board of directors. Based upon information requested from
and provided by each director concerning her background, employment and affiliations, including family relationships, we have determined
that each of Judith Rodin, Sharon Brown-Hruska, Trier Bryant and Carolyn Trabuco, representing a majority of our directors, are independent
as that term is defined under the applicable rules and regulations of the SEC and the listing requirements and rules of any applicable
stock exchange.
Item 14. Principal Accounting Fees and Services.
The firm of WithumSmith+Brown, PC (Withum)
acts as our independent registered public accounting firm. The following is a summary of fees paid to Withum for services rendered.
Audit Fees. Audit fees consist of fees billed for professional services
rendered for the audit of our year-end financial statements and services that are normally provided by Withum in connection with regulatory
filings. The aggregate fees billed by Withum for audit fees, inclusive of required filings with the SEC for the year ended December 31,
2025 and 2024, totaled $134,555 and $120,640, respectively.
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 year-end financial
statements and are not reported under Audit Fees. These services include attest services that are not required by statute
or regulation and consultation concerning financial accounting and reporting standards. For the year ended December 31, 2025 and 2024,
we did not pay Withum any audit-related fees.
Tax Fees. Tax fees consist of fees billed for
professional services relating to tax compliance, tax planning and tax advice. For the year ended December 31, 2025 and 2024, Withum billed
an aggregate fees of $0 and $0, respectively.
All Other Fees. All other fees consist of fees
billed for all other services. For the year ended December 31, 2025 and 2024, we did not pay Withum any other fees.
Pre-Approval Policy
Our audit committee was formed in connection with
the effectiveness of our registration statement for 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
audit services and permitted non-audit services to be performed for us by our auditors, including the fees and terms thereof (subject
to thede minimisexceptions for non-audit services described in the Exchange Act which are approved by the audit committee
prior to the completion of the audit).
80
PART IV
Item 15. Exhibits and Financial Statement Schedules.
|
(a) | Financial
Statements |
|
Our consolidated financial statements
are included in this Annual Report on Form 10-K beginning on page F-1.
|
(b) | Financial
Statement Schedules |
|
All financial statement schedules have
been omitted because they are not applicable, not material or because the information required is already included in the consolidated
financial statements or the notes thereto.
|
(c) | Exhibits |
|
The exhibits listed in the Exhibit Index
below are filed or incorporated by reference as part of this Annual Report on Form 10-K.
Exhibit Index
|
Exhibit Number |
|
Description | |
|
2.1 |
|
Business Combination Agreement, dated as of December 4, 2024, by and among Athena Technology Acquisition Corp. II, Athena Technology Sponsor II, LLC, Ace Green Recycling, Inc. and Project Atlas Merger Sub Inc. (incorporated by reference to Exhibit 2.1 to the Companys Form 8-K (File No. 001-41144), filed with the Securities and Exchange Commission on December 5, 2024). | |
|
3.1(a) |
|
Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1(a) to the Companys Quarterly Report on Form 10-Q (File No. 001-41144), filed with the Securities and Exchange Commission on January 20, 2022). | |
|
3.1(b) |
|
Certificate of Correction to the Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1(b) to the Companys Quarterly Report on Form 10-Q (File No. 001-41144), filed with the Securities and Exchange Commission on January 20, 2022). | |
|
3.1(c) |
|
Certificate of Amendment to the Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to the Companys Form 8-K (File No. 001-41144), filed with the Securities and Exchange Commission on June 14, 2023). | |
|
3.1(d) |
|
Certificate of Amendment to the Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to the Companys Form 8-K (File No. 001-41144), filed with the Securities and Exchange Commission on June 20, 2023). | |
|
3.1(e) |
|
Certificate of Amendment to the Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to the Companys Form 8-K (File No. 001-41144), filed with the Securities and Exchange Commission on March 18, 2024). | |
|
3.1(f) |
|
Certificate of Amendment to the Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to the Companys Form 8-K (File No. 001-41144), filed with the Securities and Exchange Commission on December 11, 2024). | |
|
3.1(g) |
|
Certificate of Amendment to the Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to the Companys Form 8-K (File No. 001-41144), filed with the Securities and Exchange Commission on September 12, 2025). | |
|
3.2 |
|
Bylaws (incorporated by reference to Exhibit 3.3 to the Companys Registration Statement on Form S-1 (File No. 333-261287), filed with the Securities and Exchange Commission on December 3, 2021). | |
|
4.1 |
|
Specimen Unit Certificate (incorporated by reference to Exhibit 4.1 to the Companys Registration Statement on Form S-1 (File No. 333-261287), filed with the Securities and Exchange Commission on December 3, 2021). | |
81
|
4.2 |
|
Specimen Class A Common Stock Certificate (incorporated by reference to Exhibit 4.2 to the Companys Registration Statement on Form S-1 (File No. 333-261287), filed with the Securities and Exchange Commission on December 3, 2021). | |
|
4.3 |
|
Specimen Warrant Certificate (incorporated by reference to Exhibit 4.3 to the Companys Registration Statement on Form S-1 (File No. 333-261287), filed with the Securities and Exchange Commission on December 3, 2021). | |
|
4.4 |
|
Amended and Restated Public Warrant Agreement, dated March 29, 2022, by and between the Company and Continental Stock Transfer & Trust Company, as warrant agent (incorporated by reference to Exhibit 4.4 to the Companys Annual Report on Form 10-K (File No. 001-41144), filed with the Securities and Exchange Commission on March 30, 2022). | |
|
4.5 |
|
Amended and Restated Private Warrant Agreement, dated March 29, 2022, by and between the Company and Continental Stock Transfer & Trust Company, as warrant agent (incorporated by reference to Exhibit 4.5 to the Companys Annual Report on Form 10-K (File No. 001-41144), filed with the Securities and Exchange Commission on March 30, 2022). | |
|
4.6 |
|
Description of Securities. (incorporated by reference to Exhibit 4.6 to the Companys Annual Report on Form 10-K (File No. 001-41144), filed with the Securities and Exchange Commission on March 30, 2022) | |
|
10.1(a) |
|
Letter Agreement among the Company, its officers, its directors and Athena Technology Sponsor II LLC, dated as of December 9, 2021 (incorporated by reference to Exhibit 10.1 to the Companys Current Report on Form 8-K (File No. 001-41144), filed with the Securities and Exchange Commission on December 15, 2021). | |
|
10.1(b) |
|
Joinder Agreement, dated December 8, 2022, by and between the Company and Trier Bryant (incorporated by reference to Exhibit 10.1 to the Companys Current Report on Form 8-K (File No. 001-41144), filed with the Securities and Exchange Commission on December 9, 2022). | |
|
10.1(c) |
|
Joinder Agreement, dated October 30, 2024, by and between the Company and Carolyn Trabuco (incorporated by reference to Exhibit 10.1 to the Companys Quarterly Report on Form 10-Q (File No. 001-41144), filed with the Securities and Exchange Commission on November 1, 2024). | |
|
10.2 |
|
Investment Management Trust Agreement by and between the Company and Continental Stock Transfer & Trust Company, dated as of December 9, 2021 (incorporated by reference to Exhibit 10.2 to the Companys Current Report on Form 8-K (File No. 001-41144), filed with the Securities and Exchange Commission on December 15, 2021). | |
|
10.3 |
|
Registration Rights Agreement, dated December 9, 2021, by and among the Company and Athena Technology Sponsor II LLC (incorporated by reference to Exhibit 10.3 to the Companys Current Report on Form 8-K (File No. 001-41144), filed with the Securities and Exchange Commission on December 15, 2021). | |
|
10.4 |
|
Private Placement Units Purchase Agreement by and between the Company and Athena Technology Sponsor II LLC, dated as of December 9, 2021 (incorporated by reference to Exhibit 10.4 to the Companys Current Report on Form 8-K (File No. 001-41144), filed with the Securities and Exchange Commission on December 15, 2021). | |
|
10.5 |
|
Administrative Service Agreement by and between the Company and Athena Technology Sponsor II LLC, dated as of December 9, 2021 (incorporated by reference to Exhibit 10.5 to the Companys Current Report on Form 8-K (File No. 001-41144), filed with the Securities and Exchange Commission on December 15, 2021). | |
|
10.6 |
|
Form of Indemnity Agreement (incorporated by reference to Exhibit 10.5 to the Companys Registration Statement on Form S-1 (File No. 333-261287), filed with the Securities and Exchange Commission on December 3, 2021). | |
|
10.7 |
|
Promissory Note, dated August 31, 2021, issued to Athena Technology Sponsor II LLC (incorporated by reference to Exhibit 10.6 to the Companys Registration Statement on Form S-1 (File No. 333-261287), filed with the Securities and Exchange Commission on December 3, 2021). | |
|
10.8 |
|
Securities Subscription Agreement by and between the Company and Athena Technology Sponsor II LLC, dated August 31, 2021 (incorporated by reference to Exhibit 10.7 to the Companys Registration Statement on Form S-1 (File No. 333-261287), filed with the Securities and Exchange Commission on December 3, 2021). | |
|
10.9 |
|
Amendment No. 1 Investment Management Trust Agreement, dated as of June 13, 2023, by and among Athena Technology Acquisition Corp. II and Continental Stock Transfer & Trust Company (incorporated by reference to Exhibit 10.1 to the Companys Form 8-K (File No. 001-41144), filed with the Securities and Exchange Commission on June 14, 2023). | |
82
|
10.10 |
|
Promissory Note, dated as of July 26, 2024, by and among Athena Technology Acquisition Corp. II and Athena Technology Sponsor II, LLC (incorporated by reference to Exhibit 10.17 to the Companys Annual Report on Form 10-K (File No. 001-41144), filed with the Securities and Exchange Commission on September 27, 2024). | |
|
10.11 |
|
Promissory Note, dated October 10, 2024 and effective as of April 10, 2024, by and among Athena Technology Acquisition Corp. II and Athena Technology Sponsor II, LLC (incorporated by reference to Exhibit 10.1 to the Companys Quarterly Report on Form 10-Q (File No. 001-41144), filed with the Securities and Exchange Commission on November 1, 2024). | |
|
10.12 |
|
Sponsor Support Agreement, dated as of December 4, 2024, by and among Athena Technology Sponsor II, LLC, Athena Technology Acquisition Corp. II, and Ace Green Recycling, Inc (incorporated by reference to Exhibit 10.1 to the Companys Form 8-K (File No. 001-41144), filed with the Securities and Exchange Commission on December 5, 2024). | |
|
10.13 |
|
Company Support Agreement, dated as of December 4, 2024, by and among Athena Technology Sponsor II, LLC, Athena Technology Acquisition Corp. II, and Ace Green Recycling, Inc. and certain shareholders party thereto (incorporated by reference to Exhibit 10.2 to the Companys Form 8-K (File No. 001-41144), filed with the Securities and Exchange Commission on December 5, 2024). | |
|
10.14 |
|
Form of Company Shareholder Lock-Up Agreement (incorporated by reference to Exhibit 10.3 to the Companys Form 8-K (File No. 001-41144), filed with the Securities and Exchange Commission on December 5, 2024). | |
|
10.15 |
|
Form of Sponsor Lock-Up Agreement (incorporated by reference to Exhibit 10.4 to the Companys Form 8-K (File No. 001-41144), filed with the Securities and Exchange Commission on December 5, 2024). | |
|
10.16 |
|
Form of New Registration Rights Agreement (incorporated by reference to Exhibit 10.5 to the Companys Form 8-K (File No. 001-41144), filed with the Securities and Exchange Commission on December 5, 2024). | |
|
10.17 |
|
Amended and Restated Subscription Agreement, dated as of December 6, 2024, by and between Polar Multi-Strategy Master Fund, Athena Technology Sponsor II, LLC, and Athena Technology Acquisition Corp. II (incorporated by reference to Exhibit 10.1 to the Companys Form 8-K (File No. 001-41144), filed with the Securities and Exchange Commission on December 12, 2024). | |
|
10.18 |
|
Subscription Agreement,
dated as of February 9, 2025, by and between Kevin Wright and Jeanine Percival Wright Revocable Trust and Athena Technology Sponsor
II, LLC. (incorporated by reference to Exhibit 10.18 to the Company's Annual Report on Form 10-K (File No. 001-41144), filed with the Securities
and Exchange Commission on March 21, 2025). | |
|
10.19 |
|
Subscription Agreement,
dated as of August 11, 2025, by and between Polar Multi-Strategy Master Fund, Athena Technology Sponsor II, LLC and Athena
Technology Acquisition Corp II. (incorporated by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q (File No. 001-41144), filed with the Securities
and Exchange Commission on August 19, 2025). | |
|
14 |
|
Code of Business Conduct and Ethics (incorporated by reference to Exhibit 14 of the Companys Registration Statement on Form S-1 (File No. 333-261287), filed with the Securities and Exchange Commission on December 3, 2021). | |
|
19.1 |
|
Insider Trading Policy (incorporated by reference to Exhibit 19.1 to the Companys Annual Report on Form 10-K (File No. 001-41144), filed with the Securities and Exchange Commission on March 21, 2025). | |
|
21.1 |
|
List of Subsidiaries (incorporated by reference to Exhibit 21.1 to the Company's Annual Report on Form 10-K (File No. 001-41144), filed with the Securities
and Exchange Commission on March 21, 2025). | |
|
24* |
|
Power of Attorney (included on signature page). | |
|
31.1* |
|
Certification of the Chief Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a). | |
|
31.2* |
|
Certification of the Chief Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a). | |
|
32.1** |
|
Certification of the Chief Executive Officer required by Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. 1350. | |
|
32.2** |
|
Certification of the Chief Financial Officer required by Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. 1350. | |
|
97.1 |
|
Policy Relating to Recovery of Erroneously Awarded Compensation (incorporated by reference to Exhibit 97.1 to the Companys Annual Report on Form 10-K (File No. 001-41144), filed with the Securities and Exchange Commission on September 27, 2024). | |
|
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 (formatted as Inline XBRL and contained in Exhibit 101). | |
|
* |
Filed herewith. | |
|
** |
Furnished herewith. | |
Item 16. Form 10-K Summary
None
83
SIGNATURES
Pursuant to the requirements of Section 13 or
15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
|
Date: March 11, 2026 |
ATHENA TECHNOLOGY ACQUISITION CORP. II | |
|
|
| |
|
|
By: |
/s/ Isabelle Freidheim | |
|
|
Name: |
Isabelle Freidheim | |
|
|
Title: |
Chief Executive Officer and
Chairperson of the Board of Directors | |
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each
person whose signature appears below constitutes and appoints Isabelle Freidheim and Jennifer Calabrese, 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 Annual Report on 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
Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and
on the dates indicated.
|
/s/ Isabelle Freidheim |
|
Chief Executive Officer and Chairperson of the Board of Directors |
|
March
11, 2026 | |
|
Isabelle Freidheim |
|
(Principal Executive Officer) |
|
| |
|
|
|
|
|
| |
|
/s/ Jennifer Calabrese |
|
Chief Financial Officer |
|
March
11, 2026 | |
|
Jennifer Calabrese |
|
(Principal Financial and Accounting Officer) |
|
| |
|
|
|
|
|
| |
|
/s/ Kirthiga Reddy |
|
President and Director |
|
March
11, 2026 | |
|
Kirthiga Reddy |
|
|
|
| |
|
|
|
|
|
| |
|
/s/ Judith Rodin |
|
Director |
|
March
11, 2026 | |
|
Judith Rodin |
|
|
|
| |
|
|
|
|
|
| |
|
/s/ Sharon Brown-Hruska |
|
Director |
|
March
11, 2026 | |
|
Sharon Brown-Hruska |
|
|
|
| |
|
|
|
|
|
| |
|
/s/ Trier Bryant |
|
Director |
|
March
11, 2026 | |
|
Trier Bryant |
|
|
|
| |
|
|
|
|
|
| |
|
/s/ Carolyn Trabuco |
|
Director |
|
March
11, 2026 | |
|
Carolyn Trabuco |
|
|
|
| |
84
ATHENA TECHNOLOGY ACQUISITION CORP. II
TABLE OF CONTENTS
|
|
Page | |
|
Report of WithumSmith+Brown, PC, Independent Registered Public Accounting Firm (PCAOB ID: 100) |
F-2 | |
|
Consolidated Financial
Statements: |
| |
|
Consolidated Balance Sheets as of December 31, 2025 and 2024 |
F-3 | |
|
Consolidated Statements of Operations for the Years Ended December 31, 2025 and 2024 |
F-4 | |
|
Consolidated Statements of Changes in Stockholders Deficit for the Years Ended December 31, 2025 and 2024 |
F-5 | |
|
Consolidated Statements of Cash Flows for the Years Ended December 31, 2025 and 2024 |
F-6 | |
|
Notes to Consolidated Financial Statements |
F-7 | |
F-1
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM
To the Stockholders and the Board of Directors of
Athena Technology Acquisition Corp. II:
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated balance sheets of Athena Technology Acquisition Corp. II (the Company) as of December 31, 2025 and 2024, the related consolidated statements of operations, changes in stockholders deficit and cash flows for the years then ended, and the related notes (collectively referred to as the financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.
Going Concern
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, if the Company is unable to raise additional funds to alleviate liquidity needs and complete a business combination by June 14, 2026 (if extended by the full amount of time), then the Company will cease all operations except for the purpose of liquidating. The date for mandatory liquidation and subsequent dissolution raise substantial doubt about the Companys ability to continue as a going concern. Managements plans in regard to these matters are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on the these financial statements based on our audits. 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 audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated 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 audits, 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 Companys internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the consolidated 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 consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
/s/ WithumSmith+Brown, PC
We have served as the Companys auditor since 2021.
**
New York, New York
March 10, 2026
PCAOB ID Number 100
F-2
ATHENA TECHNOLOGY ACQUISITION CORP. II
CONSOLIDATED BALANCE SHEETS
|
| |
December31, 2025 | | |
December31, 2024 | | |
|
ASSETS | |
| | |
| | |
|
CURRENT ASSETS | |
| | |
| | |
| Cash and cash equivalents | | $ | 348,472 | | | $ | 142,260 | | |
| Prepaid expenses and other assets | | | 81,665 | | | | 41,585 | | |
| Prepaid income taxes | | | 610,976 | | | | 601,348 | | |
| Due from Sponsor | | | 15,510 | | | | 15,510 | | |
| Total current assets | | | 1,056,623 | | | | 800,703 | | |
|
| |
| | | |
| | | |
| Investments held in Trust Account | | | 297,614 | | | | 3,666,439 | | |
| TOTAL ASSETS | | $ | 1,354,237 | | | $ | 4,467,142 | | |
|
| |
| | | |
| | | |
|
LIABILITIES, CLASS A COMMON STOCK SUBJECT TO POSSIBLE REDEMPTION AND STOCKHOLDERS DEFICIT | |
| | | |
| | | |
|
| |
| | | |
| | | |
|
CURRENT LIABILITIES | |
| | | |
| | | |
| Accounts payable and accrued expenses | | $ | 5,894,706 | | | $ | 4,805,980 | | |
| Note payable - related party, net of discount | | | 1,800,000 | | | | 1,155,205 | | |
| Convertible note - related party | | | 422,182 | | | | 422,182 | | |
| Due to related party | | | 211,029 | | | | 201,029 | | |
| Return of capital subscription shares liability | | | 147,600 | | | | | | |
| Due to redeeming stockholders | | | 586,001 | | | | | | |
| Excise tax payable | | | | | | | 3,501,166 | | |
| Total current liabilities | | | 9,061,518 | | | | 10,085,562 | | |
| Deferred underwriting fee payable | | | 8,956,250 | | | | 8,956,250 | | |
| TOTAL LIABILITIES | | | 18,017,768 | | | | 19,041,812 | | |
|
| |
| | | |
| | | |
| COMMITMENTS AND CONTINGENCIES | | | | | | | | | |
|
| |
| | | |
| | | |
|
CLASS A COMMON STOCK SUBJECT TO POSSIBLE REDEMPTION | |
| | | |
| | | |
| Class A Common stock subject to possible redemption, $0.0001 par value, 24,887 and 310,156 shares at redemption value of $14.41 and $13.82 per share at December 31, 2025 and 2024, respectively | | | 358,631 | | | | 4,285,713 | | |
|
STOCKHOLDERS DEFICIT | |
| | | |
| | | |
| Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued or outstanding at December 31, 2025 and 2024 | | | | | | | | | |
| Class A common stock; $0.0001 par value; 100,000,000 shares authorized; 9,835,000 shares issued and outstanding (excluding 24,887 and 310,156 shares subject to possible redemption) at December 31, 2025 and 2024, respectively | | | 983 | | | | 983 | | |
| Class B common stock; $0.0001 par value; 10,000,000 shares authorized; none issued or outstanding at December 31, 2025 and 2024 | | | | | | | | | |
| Additional paid-in capital | | | 378,820 | | | | | | |
| Accumulated deficit | | | (17,401,965 | ) | | | (18,861,366 | ) | |
| TOTAL STOCKHOLDERS DEFICIT | | | (17,022,162 | ) | | | (18,860,383 | ) | |
| LIABILITIES, CLASS A COMMON STOCK SUBJECT TO POSSIBLE REDEMPTION AND STOCKHOLDERS DEFICIT | | $ | 1,354,237 | | | $ | 4,467,142 | | |
*The accompanying notes are an integral part
of these consolidated financial statements.*
F-3
ATHENA TECHNOLOGY ACQUISITION CORP. II
CONSOLIDATED STATEMENTS OF OPERATIONS
|
| |
For the Year Ended December31, | | |
For the Year Ended December31, | | |
|
| |
2025 | | |
2024 | | |
|
OPERATING EXPENSES | |
| | |
| | |
| General and administrative expenses | | $ | 1,876,932 | | | $ | 3,402,952 | | |
| Franchise tax | | | 5,243 | | | | 18,596 | | |
| Total operating expenses | | | 1,882,175 | | | | 3,421,548 | | |
|
| |
| | | |
| | | |
|
OTHER INCOME (EXPENSE) | |
| | | |
| | | |
| Interest income on investments held in Trust Account | | | 110,291 | | | | 850,641 | | |
| Finance costs amortization of debt issuance | | | (235,630 | ) | | | (78,039 | ) | |
| Subscription expense | | | (164,000 | ) | | | | | |
| Gain on return of capital liability change | | | 16,400 | | | | | | |
| Reversal of interest and penalties on excise tax liability | | | 888,340 | | | | | | |
| Total other income, net | | | 615,401 | | | | 772,602 | | |
|
| |
| | | |
| | | |
| LOSS BEFORE PROVISION FOR INCOME TAXES | | | (1,266,774 | ) | | | (2,648,946 | ) | |
| Provision for income taxes | | | (4,453 | ) | | | | | |
| NET LOSS | | $ | (1,271,227 | ) | | $ | (2,648,946 | ) | |
|
| |
| | | |
| | | |
| Weighted average shares outstanding of Class A common stock | | | 10,057,621 | | | | 11,243,598 | | |
| Basic and diluted net loss per share, Class A | | $ | (0.13 | ) | | $ | (0.24 | ) | |
**
*The accompanying notes are an integral part
of these consolidated financial statements.*
F-4
ATHENA TECHNOLOGY ACQUISITION CORP. II
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS
DEFICIT
FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024
|
| |
Class A Common Stock | | |
Class B Common Stock | | |
Additional Paid-in | | |
Accumulated | | |
Total Stockholders | | |
|
| |
Shares | | |
Amount | | |
Shares | | |
Amount | | |
Capital | | |
Deficit | | |
Deficit | | |
|
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| Balance, December 31, 2023 | | | 9,835,000 | | | $ | 983 | | | | | | | $ | | | | $ | 239,759 | | | $ | (15,272,029 | ) | | $ | (15,031,287 | ) | |
|
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| Class A common stock to be transferred to fund promissory note | | | | | | | | | | | | | | | | | | | 162,894 | | | | | | | | 162,894 | | |
|
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| Excise tax payable attributable to redemption of Class A common stock | | | | | | | | | | | | | | | | | | | | | | | (216,777 | ) | | | (216,777 | ) | |
|
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| Remeasurement of common stock subject to redemption | | | | | | | | | | | | | | | | | | | (402,653 | ) | | | (723,614 | ) | | | (1,126,267 | ) | |
|
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| Net loss | | | | | | | | | | | | | | | | | | | | | | | (2,648,946 | ) | | | (2,648,946 | ) | |
|
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| Balance, December 31, 2024 | | | 9,835,000 | | | | 983 | | | | | | | | | | | | | | | | (18,861,366 | ) | | | (18,860,383 | ) | |
|
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| Remeasurement of common stock subject to redemption | | | | | | | | | | | | | | | | | | | (112,015 | ) | | | 117,802 | | | | 5,787 | | |
|
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| Class A common stock to be transferred to fund promissory note | | | | | | | | | | | | | | | | | | | 90,835 | | | | | | | | 90,835 | | |
|
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| Class A common stock to be transferred in connection with Polar subscription agreement | | | | | | | | | | | | | | | | | | | 400,000 | | | | | | | | 400,000 | | |
|
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| Reversal of excise tax payable attributable to redemption of common stock | | | | | | | | | | | | | | | | | | | | | | | 2,612,826 | | | | 2,612,826 | | |
|
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| Net loss | | | | | | | | | | | | | | | | | | | | | | | (1,271,227 | ) | | | (1,271,227 | ) | |
|
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| Balance, December 31, 2025 | | | 9,835,000 | | | $ | 983 | | | | | | | $ | | | | $ | 378,820 | | | $ | (17,401,965 | ) | | $ | (17,022,162 | ) | |
*The accompanying notes are an integral part
of these consolidated financial statements.*
F-5
ATHENA TECHNOLOGY ACQUISITION CORP. II
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
| |
For the Year Ended December 31,
2025 | | |
For the Year Ended December 31,
2024 | | |
|
CASH FLOWS FROM OPERATING ACTIVITIES | |
| | | |
| | | |
| Net loss | | $ | (1,271,227 | ) | | $ | (2,648,946 | ) | |
|
Adjustments to reconcile net loss to net cash used in operating activities: | |
| | | |
| | | |
| Interest income on investments held in Trust Account | | | (110,291 | ) | | | (850,641 | ) | |
| Expenses paid by related party | | | | | | | 175,323 | | |
| Finance costs amortization of debt issuance | | | 235,630 | | | | 78,039 | | |
| Subscription expense on event of default subscription share liability change | | | 164,000 | | | | | | |
| Gain on return of capital liability change | | | (16,400 | ) | | | | | |
|
Changes in operating assets and liabilities: | |
| | | |
| | | |
| Prepaid expenses and other assets | | | (40,080 | ) | | | (41,585 | ) | |
| Prepaid income taxes | | | (9,628 | ) | | | (601,348 | ) | |
| Due to related party | | | 10,000 | | | | | | |
| Due from Sponsor | | | | | | | (15,510 | ) | |
| Accounts payable and accrued expenses | | | 1,088,726 | | | | 1,687,600 | | |
| Franchise tax payable | | | | | | | (75,086 | ) | |
| Income tax payable | | | | | | | (1,540,792 | ) | |
| Excise tax payable | | | (888,340 | ) | | | 888,340 | | |
| Net cash flows used in operating activities | | | (837,610 | ) | | | (2,944,606 | ) | |
|
| |
| | | |
| | | |
|
CASH FLOWS FROM INVESTING ACTIVITIES | |
| | | |
| | | |
| Cash deposited to Trust Account | | | (51,615 | ) | | | (358,003 | ) | |
| Cash withdrawn from Trust Account in connection with redemption | | | 3,335,294 | | | | 21,677,622 | | |
| Cash withdrawn from Trust Account to pay franchise and income taxes | | | 195,437 | | | | 252,108 | | |
| Net cash flows provided by investing activities | | | 3,479,116 | | | | 21,571,727 | | |
|
| |
| | | |
| | | |
|
CASH FLOWS FROM FINANCING ACTIVITIES | |
| | | |
| | | |
| Reimbursements to related party | | | | | | | (54,314 | ) | |
| Redemptions of Class A common stock | | | (3,335,294 | ) | | | (21,677,622 | ) | |
| Proceeds from promissory note - related party | | | 500,000 | | | | 1,000,000 | | |
| Proceeds from Polar Subscription Agreement | | | 400,000 | | | | | | |
| Proceeds from convertible note - related party | | | | | | | 422,182 | | |
| Net cash flows used in financing activities | | | (2,435,294 | ) | | | (20,309,754 | ) | |
|
| |
| | | |
| | | |
| NET CHANGE IN CASH | | | 206,212 | | | | (1,682,633 | ) | |
| CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR | | | 142,260 | | | | 1,824,893 | | |
| CASH AND CASH EQUIVALENTS, END OF YEAR | | $ | 348,472 | | | $ | 142,260 | | |
|
| |
| | | |
| | | |
|
CASH AND RESTRICTED CASH AND CASH EQUIVALENTS, END OF YEAR | |
| | | |
| | | |
| Cash and cash equivalents | | $ | 348,472 | | | $ | 142,260 | | |
| Cash and cash equivalents restricted | | | | | | | | | |
| CASH AND RESTRICTED CASH AND CASH EQUIVALENTS, END OF YEAR | | $ | 348,472 | | | $ | 142,260 | | |
|
| |
| | | |
| | | |
|
SUPPLEMENTAL CASH FLOW INFORMATION: | |
| | | |
| | | |
|
Cash paid during the year for: | |
| | | |
| | | |
| Income tax paid | | $ | | | | $ | 2,199,449 | | |
|
| |
| | | |
| | | |
|
SUPPLEMENTAL DISCLOSURE OF NONCASH ACTIVITIES: | |
| | | |
| | | |
| Excise tax payable attributable to redemption of Class A common stock | | $ | | | | $ | 216,777 | | |
| Class A common stock to be transferred to fund promissory note | | $ | | | | $ | 162,894 | | |
| Reversal of excise tax payable attributable to redemption of Class A common stock | | $ | 2,612,826 | | | $ | | | |
*The accompanying notes are an integral part
of these consolidated financial statements.*
**
F-6
ATHENA TECHNOLOGY ACQUISITION CORP. II
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2025
Note 1 Organization and Business Operations
Athena Technology Acquisition Corp. II (Athena or the Company) was incorporated in Delaware on May 20, 2021. The Company is a blank check company formed for the purpose of entering into a merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization or other similar business combination with one or more businesses or entities (a Business Combination).
The Company is not limited to a particular industry or geographic region for purposes of consummating a Business Combination. The Company is an early stage and emerging growth company and, as such, the Company is subject to all of the risks associated with early stage and emerging growth companies.
As of December 31, 2025, the Company had not commenced any operations. All activity through December 31, 2025, relates to the Companys formation and Initial Public Offering (IPO), which is described below and, since the offering, the search for a prospective initial Business Combination. The Company will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest. The Company generates non-operating income in the form of interest income earned on investments from the proceeds derived from the IPO.
The registration statement for the Companys IPO was declared effective on December 9, 2021. On December 14, 2021, the Company consummated the IPO of 25,000,000 units (Units). Each Unit consists of one share of Class A common stock (the Public Shares) and one-half of one redeemable warrant (each, a Public Warrant), with each warrant entitling the holder thereof to purchase one share of Class A common stock for $11.50 per share. The Units were sold at a price of $10.00 per Unit, generating gross proceeds of $250,000,000, which is discussed in Note 3.
Simultaneously with the closing of the IPO, the Company consummated the sale (Private Placement) of 950,000 private placement units (Private Placement Units) to the Companys sponsor, Athena Technology Sponsor II, LLC (the Sponsor). Each Private Placement Unit consists of one share of Class A common stock (Placement Shares) and one-half of one redeemable warrant (each, a Private Placement Warrant). Each Private Placement Warrant will be exercisable to purchase one share of Class A common stock at a price of $11.50 per share. The Private Placement Units were sold at a price of $10.00 per Private Placement Unit, generating gross proceeds of $9,500,000, which is described in Note 4.
Subsequent to the closing of the IPO, on December 28, 2021, the Company consummated the closing of the sale of 375,000 additional units (Over-allotment Units) upon receiving notice of the underwriters election to partially exercise their over-allotment option, generating additional gross proceeds of $3,750,000. Simultaneously with the exercise of the over-allotment, the Company consummated the private placement of an additional 3,750 Private Placement Units to the Sponsor at a purchase price of $10.00 per Private Placement Unit, generating gross proceeds of $37,500.
Offering costs for the IPO and over-allotment amounted to $14,420,146, consisting of $5,000,000 of underwriting fees, $8,956,250 of deferred underwriting fees payable (which are held in the Trust Account (defined below)) and $463,896 of other costs. As described in Note 6, the $8,956,250 of deferred underwriting fees payable is contingent upon the consummation of a Business Combination by June 14, 2026, subject to the terms of the underwriting agreement. On January 28, 2025, Citigroup Global Markets Inc. (Citigroup), as representative of the underwriters, agreed to formally waive the deferred underwriting commissions of $8,956,250 in full, pursuant to a deferred fee waiver letter agreement between Citigroup and the Company upon the successful Business Combination with Ace Green Recycling (as defined herein). The waiver of deferred underwriting commissions is contingent upon such successful Business Combination, thus, as of December 31, 2025, the full amount of $8,956,250 remains outstanding.
Following the closing of the IPO, $252,500,000 ($10.10 per Unit) from the net proceeds of the sale of the Units in the IPO and the Private Placement Units was placed in a trust account (Trust Account) and invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended (the Investment Company Act), with a maturity of 185 days or less or in any open-ended investment company that holds itself out as a money market fund selected by the Company meeting the conditions of paragraphs (d)(2), (d)(3) and (d)(4) of Rule 2a-7 of the Investment Company Act, as determined by the Company, until the earlier of (i) the completion of a Business Combination and (ii) the distribution of the Trust Account, as described below.
The Companys management has broad discretion with respect to the specific application of the net proceeds of the IPO and the sale of the 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 assets held in the Trust Account (excluding the deferred underwriting commissions and taxes payable on income earned on the Trust Account) at the time 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 Act.
The Company will provide the holders of the outstanding Public Shares (the Public Stockholders) with the opportunity to redeem all or a portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a stockholder meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek stockholder approval of a Business Combination or conduct a tender offer will be made by the Company. The Public Stockholders will be entitled to redeem their Public Shares for a pro rata portion of the amount then in the Trust Account (initially anticipated to be $10.10 per Public Share, plus any pro rata interest then in the Trust Account, net of taxes payable). There will be no redemption rights with respect to the Companys Public Warrants and Private Placement Warrants (together, the Warrants).
F-7
All of the Public Shares contain a redemption feature which allows for the redemption of such Public Shares in connection with the Companys liquidation, if there is a stockholder vote or tender offer in connection with the Companys Business Combination and in connection with certain amendments to the Companys amended and restated certificate of incorporation (as amended, restated, supplemented and/or otherwise modified from time to time, the Charter). In accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 480-10-S99, redemption provisions not solely within the control of a company require Class A common stock subject to redemption to be classified outside of permanent equity. Given that the Public Shares will be issued with other freestanding instruments (i.e., Public Warrants), the initial carrying value of the Class A common stock classified as temporary equity will be the allocated proceeds determined in accordance with ASC 470-20. The Class A common stock is subject to ASC 480-10-S99. If it is probable that the equity instrument will become redeemable, the Company has the option to either (i) accrete changes in the redemption value over the period from the date of issuance (or from the date that it becomes probable that the instrument will become redeemable, if later) to the earliest redemption date of the instrument or (ii) recognize changes in the redemption value immediately as they occur and adjust the carrying amount of the instrument to equal the redemption value at the end of each reporting period. The Company has elected to recognize the changes immediately. The Public Shares are redeemable and are classified as such on the consolidated balance sheets until such date that a redemption event takes place.
Redemptions of the Companys Public Shares may be subject to the satisfaction of conditions, including minimum cash conditions, pursuant to an agreement relating to the Companys Business Combination. If the Company seeks stockholder approval of the Business Combination, the Company will proceed with a Business Combination if a majority of the shares voted are voted in favor of the Business Combination, or such other vote as required by law or stock exchange rule. If a stockholder vote is not required by applicable law or stock exchange listing requirements and the Company does not decide to hold a stockholder vote for business or other reasons, the Company will, pursuant to its Charter, conduct the redemptions pursuant to the tender offer rules of the U.S. Securities and Exchange Commission (the SEC) and file tender offer documents with the SEC prior to completing a Business Combination. If, however, stockholder approval of the transaction is required by applicable law or stock exchange listing requirements, or the Company decides to obtain stockholder approval for business or other reasons, the Company will offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules.
If the Company seeks stockholder approval in connection with a Business Combination, the Companys Sponsor, officers and directors (the Initial Stockholders) have agreed to vote their Founder Shares (as defined in Note 5) and any Public Shares purchased during or after the IPO in favor of approving a Business Combination. Additionally, each Public Stockholder may elect to redeem their Public Shares without voting, and if they do vote, irrespective of whether they vote for or against the proposed transaction.
Notwithstanding the foregoing, the Charter provides that a Public Stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a group (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the Exchange Act)), will be restricted from redeeming its shares with respect to more than an aggregate of 15% or more of the Class A common stock sold in the IPO, without the prior consent of the Company.
The Initial Stockholders have agreed not to propose an amendment to the Charter that would affect the substance or timing of the Companys obligation to redeem 100% of its Public Shares if the Company does not complete a Business Combination, unless the Company provides the Public Stockholders with the opportunity to redeem their shares of Class A common stock in conjunction with any such amendment. This agreement is required to be extended on a monthly basis.
If the Company is unable to complete a Business Combination within the Combination Period (as defined herein), the Company will (i) cease all operations except for the purpose of winding up, (ii) 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 earned on the funds held in the Trust Account and not previously released to the Company to pay its franchise and income taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding Public Shares, which redemption will completely extinguish the Public Stockholders rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Companys remaining stockholders and the Companys board of directors, dissolve and liquidate, subject in each case to the Companys obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law.
On June 13, 2023, the Company held a special meeting of its stockholders (the First Extension Special Meeting), at which the stockholders approved proposals to amend the Companys Charter to (i) extend the date by which the Company must consummate its initial business combination from June 14, 2023 to up to March 14, 2024 by electing to extend the date to consummate an initial business combination on a monthly basis up to nine times by an additional one month each time after June 14, 2023 until March 14, 2024, or a total of up to nine months, provided that the Sponsor or its affiliates or permitted designees deposited into the Trust Account the lesser of (a) $60,000 and (b) $0.03 for each share of common stock issued and outstanding that was subject to redemption and that had not been redeemed in accordance with the terms of the amended Charter and (ii) provided holders of the Companys Class B common stock, par value $0.0001 per share (the Class B common stock), the right to convert any and all of their Class B common stock into the Companys Class A common stock, par value $0.0001 per share (the Class A common stock), on a one-for-one basis prior to the closing of a business combination at the election of the holder.
In connection with the First Extension Special Meeting, 23,176,961 shares of the Companys Class A common stock were redeemed (the Redemptions). On June 21, 2023, $239,604,919 was withdrawn from the Trust Account to pay the redeeming holders and the 23,176,961 shares of the Companys Class A common stock that were redeemed were cancelled.
On June 21, 2023, the Company issued an aggregate of 8,881,250 shares of its Class A common stock to the Sponsor, upon the conversion of an equal number of shares of Class B common stock of the Company (the Conversion). The 8,881,250 shares of Class A common stock issued in connection with the Conversion are subject to the same restrictions as applied to the shares of Class B common stock before the Conversion, including, among other things, certain transfer restrictions, waiver of redemption rights and the obligation to vote in favor of an initial Business Combination.
F-8
Following the Conversion, and after giving effect to the Redemptions, there were 12,033,039 shares of Class A common stock issued and outstanding, and no shares of Class B common stock issued and outstanding. As a result of the Conversion, and after giving effect to the Redemptions, the Sponsor held approximately 81.7% of the outstanding shares of the Companys Class A common stock.
On July 17, 2023, the Companys Board of Directors authorized the transfer of the listing of its Class A common stock, redeemable warrants, each exercisable to purchase one share of Class A common stock at a price of $11.50 per share (the Warrants), and units, each consisting of one share of Class A common stock and one-half of one Warrant (the Units and together with the Class A common stock and the Warrants, the Listed Securities), from the New York Stock Exchange (the NYSE) to the NYSE American LLC (the NYSE American). The listing and trading of the Listed Securities on the NYSE ended at market close on July 20, 2023, and the trading of the Listed Securities on the NYSE American commenced at market open on July 21, 2023.
On January 8, 2024, the Company deposited $60,000 into the Trust Account allowing the Company to extend the period of time it has to consummate its initial Business Combination by one month from January 14, 2024 to February 14, 2024.
On February 9, 2024, the Company deposited $60,000 into the Trust Account allowing the Company to extend the period of time it has to consummate its initial Business Combination by one month from February 14, 2024 to March 14, 2024.
As approved by the stockholders of the Company, at its special meeting of stockholders held on March 12, 2024 (the Second Extension Special Meeting), the Company filed an amendment to its Charter with the Secretary of State of the State of Delaware which (i) extended the date by which the Company must consummate its initial Business Combination on a monthly basis for up to nine times by an additional one month each time for a total of up to nine months from March 14, 2024 to December 14, 2024 provided that the Sponsor or its affiliates or permitted designees deposited into the Trust Account the lesser of (a) $40,000 and (b) $0.02 for each share of the Companys common stock issued and outstanding that was subject to redemption and that had not been redeemed in accordance with the terms of the charter upon the election of each such one-month extension unless the closing of the Companys initial Business Combination shall have occurred and (ii) eliminated the limitation that the Company may not redeem public shares in an amount that would cause the Companys net tangible assets to be less than $5,000,001 immediately prior to or upon consummation of an initial Business Combination. In connection with the Second Extension Special Meeting, 910,258 shares of the Companys Class A common stock were redeemed. On April 5, 2024, an amount of $10,179,663 was withdrawn from the Trust Account to pay the redeeming stockholders and the 910,258 shares of the Companys Class A common stock that were redeemed were cancelled.
On each of March 13, 2024, April 16, 2024, May 14, 2024, June 14, 2024, July 10, 2024, August 8, 2024, September 12, 2024, October 15, 2024 and November 11, 2024, the Company deposited $25,756 into the Trust Account, or an aggregate of $231,800, allowing the Company to extend the period of time it has to consummate its initial Business Combination by one month for a total extension from March 14, 2024 to December 14, 2024.
On July 26, 2024, the Company issued an unsecured promissory note to the Sponsor with a principal amount equal to $422,182. The Note is non-interest bearing and payable on the earlier of July 26, 2026 or the Companys initial Business Combination. The note may be converted into equity securities of the Company on mutually agreeable terms if consented to in writing by the Sponsor. As of December 31, 2025, the Company received the full principal amount of $422,182 under this note.
On October 10, 2024 (effective on April 10, 2024), the Company issued an unsecured and non-interest-bearing promissory note to the Sponsor with a principal amount equal to $1,500,000 to cover the monthly extension payments of the Company and for working capital purposes. The note is payable in full upon the earlier of (a) April 10, 2026 and (b) the date the Company consummates a Business Combination. The Company drew $800,000 from this note on April 10, 2024 to replenish the misallocated restricted funds, as discussed below.
On October 21, 2024, the Company received a letter from the NYSE notifying the Company of its past due annual listing fees and that failure to pay the annual listing fees may result in the Company facing disciplinary action from the NYSE Regulation, up to and including delisting from the NYSE American.
On November 20, 2024, the Company received an official notice of noncompliance from the NYSE stating that the Company was not in compliance with NYSE American continued listing standards due to the failure to timely file the Companys Quarterly Report on Form 10-Q for the quarter ended September 30, 2024 by the filing due date of November 19, 2024.
On December 4, 2024, the Company, the Sponsor, Ace Green Recycling, Inc., a Delaware corporation (Ace Green Recycling), and Project Atlas Merger Sub Inc., a Delaware corporation (Merger Sub), entered into a Business Combination Agreement (the Business Combination Agreement), pursuant to which, subject to the satisfaction or waiver of certain conditions precedent in the Business Combination Agreement, the following transactions will occur: (a) Merger Sub will merge with and into Ace Green Recycling (the Merger), with Ace Green Recycling surviving the Merger as a wholly owned subsidiary of the Company and the security holders of Ace Green Recycling becoming security holders of the Company and (b) the other transactions contemplated by the Business Combination Agreement and the Ancillary Documents referred to therein (together with the Merger, the Transactions).
On December 6, 2024, the Company and Sponsor entered into an Amended and Restated Subscription Agreement (the A&R Polar Subscription Agreement) with Polar Multi-Strategy Master Fund (Polar) pursuant to which Polar contributed an additional $200,000 to Sponsor (for an aggregate of $500,000, such funded amounts, the Initial Polar Capital Investment), which in turn was loaned by Sponsor to the Company to fund any additional extensions of the date by which the Company must consummate an initial Business Combination and to cover working capital expenses. The Subscription Agreement provides that in connection with the Initial Polar Capital Investment, the Company will repay the entire balance of the Initial Polar Capital Investment to Polar within five business days of the closing of an initial Business Combination of the Company and that Sponsor will transfer and/or the Company will issue on Sponsors behalf an additional 200,000 shares of Class A common stock to Polar immediately prior to the closing of an initial Business Combination of the Company (for an aggregate of 500,000 shares to be transferred and/or issued to Polar as consideration for the Initial Polar Capital Investment).
F-9
As approved by the stockholders of the Company, at its annual meeting of stockholders held on December 10, 2024 (the Third Extension Meeting), the Company filed an amendment to the Charter with the Secretary of State of the State of Delaware which extended the date by which the Company must consummate a Business Combination on a monthly basis for up to nine times (the Third Extension) by an additional one month each time for a total of up to nine months from December 14, 2024 to September 14, 2025, provided that the Sponsor or its affiliates or permitted designees deposited into the Trust Account the lesser of (a) $25,000 and (b) $0.02 for each share of Class A common stock issued and outstanding that was subject to redemption and that had not been redeemed in accordance with the terms of the Charter upon the election of each such one-month extension unless the closing of the Companys initial Business Combination shall have occurred. In connection with the Third Extension, stockholders holding 977,625 shares of Class A common stock exercised their right to redeem such shares for a pro rata portion of the funds in the Trust Account. As a result, $11,497,959 (approximately $11.76 per share) was withdrawn from the Trust Account to pay such redeeming holders.
On December 10, 2024, the Company received a letter from the NYSE stating that the staff of NYSE Regulation determined to commence proceedings to delist the Companys Class A common stock, units and redeemable warrants, pursuant to Sections 119(b) and 119(f) of the NYSE American Company Guide because the Company failed to consummate a business combination within 36 months of the effectiveness of its initial public offering registration statement, or such shorter period that the Company specified in its registration statement. As a result of the determination, the Listed Securities on NYSE American were suspended from trading on December 10, 2024 and the Listed Securities were delisted on December 30, 2024. The Companys Class A common stock, units and redeemable warrants currently trade on OTC Pink under the symbols ATEK, ATEK.U and ATEK WS, respectively.
On each of December 11, 2024, January 10, 2025, February 10, 2025, March 6, 2025, April 7, 2025, May 7, 2025, June 6, 2025, July 8, 2025 and August 11, 2025, the Company deposited $6,203 into the Trust Account, or an aggregate of $55,827, allowing the Company to extend the period of time it has to consummate its initial Business Combination by one month for a total extension from December 14, 2024 to September 14, 2025.
On February 9, 2025, the Company and Sponsor entered into a Subscription Agreement (the February 2025 Subscription Agreement) with Kevin Wright and Jeanine Percival Wright Revocable Trust (the Investor) pursuant to which the Investor contributed $500,000 to Sponsor (the Contribution), which in turn was loaned by Sponsor to the Company to fund any additional extensions of the date by which the Company must consummate an initial Business Combination and to cover working capital expenses.
On August 11, 2025, the Company and Sponsor entered into a Subscription Agreement (the August Subscription Agreement) with Polar pursuant to which Polar contributed an additional $400,000 (the August Polar Capital Investment) to the Company to cover working capital expenses. The August Subscription Agreement provides that in connection with the Polar Capital Investment, immediately prior to the closing of a Business Combination, the Company will issue to Polar one share of Company class A common stock per $1.00 contributed by Polar (Subscription Shares).
Additionally, in connection with the August Subscription Agreement, an amount equal to the August Polar Capital Investment shall be paid by the Company to Polar as a return of capital within five business days of the closing of a Business Combination. Additionally, the Sponsor shall not sell, transfer, or otherwise dispose of any securities (including warrants) owned by the Sponsor without Polars consent, other than Permitted Share Transfers, until the full amount of the contribution has been paid to Polar. The Company and Sponsor are jointly and severally obligated for such repayment. If the closing of a Business Combination occurs, Polar may, in its sole discretion, elect at the closing of such Business Combination or at any time prior to the repayment of the August Polar Capital Investment to receive such repayment from the Company either in cash or shares of the Companys Class A common stock at a rate of one share of Class A common stock for each $10 of the contribution (the Capital Contribution Shares). In the event that the Sponsor or the Company defaults in its obligations and that such default continues for a period of five business days following written notice to the Sponsor and Company (the Default Date), the Company shall immediately issue to Polar 0.1 shares of the Companys Class A common stock (the Default Shares) for each $1.00 of the August Polar Capital Investment on the Default Date and shall issue to Polar an additional 0.1 Default Shares for each $1.00 of the August Polar Capital Investment that Polar funded each month thereafter, until the default is cured.
As approved by the stockholders of the Company, at its special meeting of stockholders held on September 10, 2025 (the Fourth Extension Special Meeting), the Company filed an amendment to its Charter with the Secretary of State of the State of Delaware (the Amendment). The Amendment extends the date by which the Company must consummate a business combination on a monthly basis for up to nine times by an additional one month each time for a total of up to nine months from September 14, 2025 to June 14, 2026 (the Combination Period), provided that Athena Technology Sponsor II, LLC or its affiliates or permitted designees will deposit into the Trust Account the lesser of (a) $25,000 and (b) $0.02 for each share of Class A common stock issued and outstanding that is subject to redemption and that has not been redeemed in accordance with the terms of the Charter upon the election of each such one-month extension unless the closing of the Companys initial business combination shall have occurred. In connection with the Fourth Extension Special Meeting, stockholders holding 285,269 shares of Class A common stock exercised their right to redeem such shares for a pro rata portion of the funds in the Trust Account. As a result, $3,335,294 (approximately $11.69 per share) was withdrawn from the Trust Account to pay such redeeming holders. Additionally, $586,001 was calculated as an additional payment due to redeeming stockholders on September 10, 2025 which is presented as due to redeeming stockholders on the consolidated balance sheets.
On each of September 12, 2025, October 7, 2025, November 4, 2025, December 8, 2025, January 5, 2026, February 5, 2026 and March 4, 2026, the Company deposited approximately $498 into the Trust Account allowing the Company to extend the period of time it has to consummate its initial Business Combination by one month from September 14, 2025 to April 14, 2026 (the Monthly Extension). The most recent Monthly Extension was the seventh of up to nine potential monthly extensions permitted under the Companys Charter, as amended.
F-10
The Initial Stockholders have agreed to waive their liquidation rights with respect to the Founder Shares if the Company fails to complete a Business Combination within the Combination Period. However, if the Initial Stockholders should acquire Public Shares in or after the IPO, 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 its deferred underwriting commission (see Note 6) 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 residual assets remaining available for distribution (including the Trust Account assets) will be only $10.10 per shares 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 (i) any third party for services rendered or products sold to the Company or (ii) any prospective target business with which the Company has entered into a written letter of intent, confidentiality or other similar agreement or Business Combination agreement (a Target), reduce the amount of funds in the Trust Account; provided, however, that such indemnification of the Company by the Sponsor shall apply only to the extent necessary to ensure that any such claims by a third party or a Target do not reduce the amount of funds in the Trust Account to below the lesser of (i) $10.10 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 $10.10 per Public Share is then held in the Trust Account due to reductions in the value of the trust assets, less taxes payable. This liability will not apply with respect to any claims by a third party or a Target which executed a waiver of any and all rights to the monies held in the Trust Account or to any claims under the Companys indemnity of the underwriters of the IPO against certain liabilities, including liabilities under the Securities Act of 1933, as amended (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 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 (except the Companys independent registered public accounting firm), prospective target businesses or other entities with which the Company does business, execute agreements waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.
*Risks and Uncertainties*
*Excise Tax*
On August 16, 2022, President Biden signed into law the Inflation Reduction Act of 2022 (the IR Act), which, among other things, generally imposes a 1% U.S. federal excise tax (the Excise Tax) on certain repurchases of stock by covered corporations (which include publicly traded domestic (i.e., U.S.) corporations) occurring on or after January 1, 2023. The Excise Tax is imposed on the repurchasing corporation itself, not its stockholders from which the stock is repurchased. Because the Company is a Delaware corporation and its securities were traded on the NYSE American at the time of the Redemptions, the Company is a covered corporation for this purpose. 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. 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.
In connection with the stockholders vote at the Special Meeting of Stockholders held on June 13, 2023, there were 23,176,961 shares tendered for redemption and approximately $239,604,919 was paid out of the Trust Account to the redeeming stockholders. The Company recorded 1% excise tax based on the amount redeemed or an aggregate amount of $2,396,049 excise tax payable as of December 31, 2023.
In connection with the stockholders vote at the Special Meeting of Stockholders held on March 12, 2024, there were 910,258 shares tendered for redemption and approximately $10,179,663 was paid out of the Trust Account on April 5, 2024 to the redeeming stockholders. The Company has recorded 1% excise tax based on the amount redeemed or an aggregate amount of $101,797.
In connection with the stockholders vote at the Annual Meeting of Stockholders held on December 10, 2024, there were 977,625 shares tendered for redemption and approximately $11,497,959 was paid out of the Trust Account on December 11, 2024 to the redeeming stockholders. The Company has recorded 1% excise tax based on the amount redeemed or an aggregate amount of $114,980 excise tax payable.
In connection with the stockholders vote at the Special Meeting of Stockholders held on September 10, 2025, there were 285,269 shares tendered for redemption and approximately $3,335,294 was paid out of the Trust Account on September 12, 2025 to the redeeming stockholders. The Company has recorded 1% excise tax based on the amount redeemed or an aggregate amount of $33,353 excise tax payable.
Pursuant to Internal Revenue Service ("IRS") regulations, the Company was required to file a return and remit payment for the 2023 excise tax liability of $2,396,049 on or before October 31, 2024. In December 2024, the IRS issued a notice to the Company asserting that $3,284,389 was payable with respect to the 2023 excise tax liability, inclusive of associated interest and penalties. The Company did not pay the amount due. The Company recognized a total of $1,051,283 in interest and penalties with respect to the 2023 excise tax liability through December 31, 2025. The Company was required to file a return and remit payment for the 2024 excise tax liabilities on or before April 30, 2025.
F-11
On November 24, 2025, the IRS published additional information relating to excise tax on repurchases of corporate stock relating specifically to Special Purpose Acquisition Companies (SPACs). The IRS published that any SPAC that priced their initial public offering prior to August 16, 2022 are not subject to excise tax on any redemptions. As such, the Company reversed $3,688,337 of liabilities relating to excise tax due for redemptions occurring in 2023 through 2025 that was accrued in previous periods. Of the $3,688,337, an amount of $2,612,825 was recorded to accumulated deficit where the initial excise tax in connection with the redemption of Class A common stock was recorded and is reflected in the consolidated statements of changes in stockholders deficit, $888,340 was recorded as a reversal of prior year interest and penalties on excise tax liability and $187,171 was recorded to general and administrative expenses in the accompanying consolidated statements of operations.
*Franchise and Income Tax Withdrawals from Trust Account*
On June 21, 2023, the Company withdrew from the Trust Account an aggregate amount of $2.4 million to be used for tax purposes. It was determined as of June 30, 2023, that the withdrawal amount was approximately $328,000 in excess of the amount necessary for tax purposes. As a result, the overdrawn amount of $328,000 was allocated back to the contingently redeemable Class A common stock subject to possible redemption and distributed back to the Trust Account on August 17, 2023. The withdrawn funds were restricted for payment of such tax liabilities under the Companys Charter and the terms of the Trust Agreement. Through December 31, 2023, the Company used $240,528 of these funds for the payment of general operating expenses, resulting in a balance of the restricted funds in the Companys operating account of approximately $1.8 million as of December 31, 2023.
On March 19, 2024, the Company withdrew an additional $252,108 from the Trust Account to pay the Companys franchise and income taxes payable and a total of $428,912 was used for the payment of general operating expenses, resulting in a balance of the restricted funds to $1.6 million as of March 31, 2024. Through March 31, 2024, the Company used an aggregate of $669,440 of these funds for the payment of general operating expenses.
Management determined that this use of funds was not in accordance with the Trust Agreement. The Company disbursed an aggregate of $669,440, the balance of the funds withdrawn from the Trust Account, for payment of general operating expenses between October 1, 2023 and March 31, 2024, also counter to the terms of the Trust Agreement. On April 3, 2024, the Company paid $720,192 to satisfy income tax liabilities for 2022. On April 10, 2024, the misallocated $669,440 funds that were used for general operating expenses were replenished to the Companys operating account in the form of an intercompany loan made by the Sponsor. On May 16, 2024, the Company paid $820,571 of its 2023 income tax liabilities, and on July 22, 2024, the Company paid $79,849 of its 2023 Delaware franchise tax liabilities. During December 2024, the Company paid $658,686 of its 2024 income taxes, inclusive of $43,257 in interest and penalties incurred, and $61,891 of its 2024 Delaware franchise tax liabilities. On May 21, 2025, the Company paid $171,778 of its 2023 tax penalties and interest. As of December 31, 2025, the total amount of prepaid income taxes was $610,976, and the remaining restricted cash balance amounted to $0. The total amount of interest and penalties of $157,897 through December 31, 2025 is included in general and administrative expenses.
*Going Concern Consideration and Capital Resources*
**
As of December 31, 2025, the Company had operating cash of $348,472 and a working capital deficit of $8,004,895. The Company also has investments held in the Trust Account of $293,283 to be used for a Business Combination or to repurchase or redeem its common stock in connection therewith. As of December 31, 2025, a total of $29,191 of the amount on deposit in the Trust Account represented interest income, which is available to pay the Companys tax obligations.
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 will repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. Otherwise, the Working Capital Loans would 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 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 $1.5 million of such Working Capital Loans may be convertible into units of the post-Business Combination entity at a price of $10.00 per unit. The units would be identical to the Private Placement Units. As of December 31, 2025 and 2024, there were amounts of $2,222,182 and $1,577,387, respectively, for Working Capital Loans and convertible note - related party outstanding (see Note 5).
Based on the foregoing, management does not believe that the Company will have sufficient working capital and borrowing capacity to meet its needs through the earlier of the consummation of a Business Combination or one year from this filing. Over this time period, the Company will be using these funds to pay existing accounts payable, identifying and evaluating prospective initial Business Combination candidates, performing due diligence on prospective target businesses, paying for travel expenditures, selecting the target business to merge with or acquire, and structuring, negotiating and consummating the Business Combination.
In connection with the Companys assessment of going concern considerations in accordance with FASB ASC 205-40, Presentation of Financial Statements Going Concern (ASC 205-40), management has determined that the Companys liquidity position and mandatory liquidation and subsequent dissolution raise substantial doubt about the Companys ability to continue as a going concern. The Company intends to complete its initial Business Combination before the mandatory liquidation date; however, there can be no assurance that the Company will be able to consummate any Business Combination by June 14, 2026 (if extended by the full amount of time). No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to liquidate after June 14, 2026. The Companys consolidated financial statements do not include any adjustment that might be necessary if the Company is unable to continue as a going concern.
F-12
*Impact of Changes in Global Trade Policies*
**
In recent months, changes in trade policies, including tariffs, trade agreements and other trade restrictions have been threatened and imposed by the U.S. and other governments, often with little or no advance notice. Tariffs or other trade restrictions may lead to continuing uncertainty and volatility in U.S. and global financial and economic conditions and commodity markets, declining consumer confidence, significant inflation and diminished expectations for the economy and economic growth. Such conditions could have a material adverse impact on the Companys business, results of operations and cash flows. Also, disruptions and volatility in the financial markets may lead to adverse changes in the availability, terms and cost of capital. Such adverse changes could increase the Companys costs of capital and limit access to financing sources, which could in turn reduce cash flow and limit the Companys ability to pursue and consummate a Business Combination.
Management continues to evaluate the macroeconomic environment as a result of challenging and uncertain market conditions, and the Company has concluded that while it is reasonably possible that the market conditions could have a negative effect on consummating a business combination, the specific impact is not readily determinable as of the date of the consolidated financial statements. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Note 2 Summary of Significant Accounting Policies
*Basis of Presentation*
**
The accompanying consolidated financial statements are presented in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) and pursuant to the rules and regulations of the SEC.
*Principles of Consolidation*
**
The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiary. All significant intercompany balances and transactions have been eliminated in consolidation.
*Emerging Growth Company*
The Company is an emerging growth company as defined in Section 102(b)(1) of the Jumpstart Our Business Startups Act of 2012 (the JOBS Act), which 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 Exchange Act) 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 statements 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 consolidated financial statements 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 consolidated financial statements and the reported amounts of income and expenses during the reporting periods. Making estimates requires management to exercise significant judgment. Such estimates may be subject to change as more current information becomes available and accordingly the actual results could differ significantly from those estimates. 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 consolidated financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. 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 $348,472 and $142,260 of unrestricted cash and no cash equivalents as of December 31, 2025 and 2024, respectively.
**
*Investments Held in Trust Account*
At December 31, 2025 and 2024, substantially all of the assets held in the Trust Account were held in mutual funds which are invested primarily in U.S. Treasury securities. All of the Companys investments held in the Trust Account are classified as trading securities. Trading securities are presented on the consolidated balance sheets at fair value at the end of each reporting period. Gains and losses resulting from the change in fair value of investments held in the Trust Account are included in interest income on investments held in Trust Account in the accompanying consolidated statements of operations. The estimated fair values of investments held in the Trust Account are determined using available market information.
**
F-13
At December 31, 2025 and 2024, the Company had $297,614 and $3,666,439, respectively, in investments held in Trust Account.
*Offering Costs Associated with the Initial Public Offering*
**
Offering costs for the IPO amounted to $14,420,146, consisting of $5,000,000 of underwriting fees, $8,956,250 of deferred underwriting fees payable (which are held in the Trust Account) and $463,896 of other costs. As described in Note 6, the $8,956,250 of deferred underwriting fee payable is contingent upon the consummation of a Business Combination by June 14, 2026 (if extended by the full amount of time) subject to the terms of the underwriting agreement. On January 28, 2025, Citigroup, as representative of the underwriters, agreed to formally waive the deferred underwriting commissions of $8,956,250 in full, pursuant to a deferred fee waiver letter agreement between Citigroup and the Company upon the successful Business Combination with Ace Green Recycling. The waiver of deferred underwriting commissions is contingent upon such successful Business Combination, thus, as of December 31, 2025, the full amount of $8,956,250 remains outstanding.
**
*Concentration of Credit Risk*
Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts 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.
*Fair Value of Financial Instruments*
**
The fair value of the Companys financial assets and liabilities reflects managements estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:
| Level 1: | Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis. | |
| Level 2: | Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active. | |
| Level 3: | Unobservable inputs based on an assessment of the assumptions that market participants would use in pricing the asset or liability. | |
**
*Income Taxes*
The Company follows the asset and liability method of accounting for income taxes under FASB ASC Topic 740, Income Taxes. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the consolidated 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 the years 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 includes 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. As of December 31, 2025 and 2024, interest and penalties of $157,897 and $57,309, respectively, were offset against prepaid income taxes. The Company recognizes accrued interest and penalties related to unrecognized tax benefits in general and administrative expenses. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company has been subject to income tax examinations by major taxing authorities since its inception.
In December 2023, the FASB issued Accounting Standards Update ("ASU") 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The amendments require enhanced annual disclosures related to income taxes, including the rate reconciliation and income taxes paid by jurisdiction. This ASU is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The adoption of this ASU is not expected to have a material impact on our condensed financial statements.
*Class A Common Stock Subject to Possible Redemption*
The Company accounts for its Class A common stock subject to possible redemption in accordance with the guidance in ASC Topic 480, Distinguishing Liabilities from Equity (ASC 480). Shares of Class A common stock subject to mandatory redemption (if any) are classified as a liability instrument and are measured at fair value. Conditionally redeemable Class A common stock (including Class A common stock that features redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Companys control) is classified as temporary equity. At all other times, Class A common stock is classified as stockholders equity (deficit).
F-14
The Companys Class A common stock sold in the IPO and over-allotment features certain redemption rights that are considered to be outside of the Companys control and subject to occurrence of uncertain future events. In connection with the First Extension Special Meeting, 23,176,961 shares of the Companys Class A common stock were redeemed. On June 21, 2023, an amount of $239,604,919 was withdrawn from the Trust Account to pay the redeeming holders and the 23,176,961 shares of the Companys Class A common stock that were redeemed were cancelled. In connection with the Second Extension Special Meeting, 910,258 shares of the Companys Class A common stock were redeemed. On April 5, 2024, an amount of $10,179,663 was withdrawn from the Trust Account to pay the redeeming holders and the 910,258 shares of the Companys Class A common stock that were redeemed were cancelled. In connection with the Third Extension Meeting, 977,625 shares of the Companys Class A common stock were redeemed. On December 11, 2024, an amount of $11,497,959 was withdrawn from the Trust Account to pay such redeeming holders and the 977,625 shares of the Companys Class A common stock that were redeemed were cancelled. In connection with Fourth Extension Special Meeting, 285,269 shares of the Companys Class A common stock were redeemed. On September 12, 2025, an amount of $3,335,294 was withdrawn from the Trust Account to pay such redeeming holders and the 285,269 shares of the Companys Class A common stock that were redeemed were cancelled. Additionally, $586,001 was calculated as an additional payment due to redeeming stockholders on September 10, 2025. Accordingly, as of December 31, 2025 and 2024, there were 24,887 and 310,156 shares of Class A common stock subject to possible redemption, respectively, presented as temporary equity, outside of the stockholders deficit section of the Companys consolidated balance sheets.
Under ASC 480-10-S99, the Company has elected to recognize changes in redemption value immediately as they occur and adjust the carrying value of the Class A common stock subject to possible redemption to equal the redemption value at the end of each reporting period. This method would view the end of the reporting period as if it were also the redemption date for the security. Immediately upon the closing of the IPO, the Company recognized the accretion from initial book value to redemption amount, which resulted in charges against additional paid-in capital (to the extent available) and accumulated deficit.
As of December 31, 2025 and 2024, shares of Class A common stock subject to possible redemption reflected on the consolidated balance sheets are reconciled on the following table:
| Class A common stock subject to possible redemption at December 31, 2022 | | $ | 258,996,758 | | |
| Less: | | | | | |
| Redemption of common stock subject to possible redemption | | | (239,604,919 | ) | |
| Plus: | | | | | |
| Accretion of carrying value to redemption value | | | 5,445,229 | | |
| Class A common stock subject to possible redemption at December 31, 2023 | | | 24,837,068 | | |
| Less: | | | | | |
| Redemption of common stock subject to possible redemption | | | (21,677,622 | ) | |
| Plus: | | | | | |
| Accretion of carrying value to redemption value | | | 1,126,267 | | |
| Class A common stock subject to possible redemption at December 31, 2024 | | | 4,285,713 | | |
| Less: | | | | | |
| Redemption of common stock subject to possible redemption | | | (3,921,295 | ) | |
| Plus: | | | | | |
| Diminution of carrying value to redemption value | | | (5,787 | ) | |
| Class A common stock subject to possible redemption at December 31, 2025 | | $ | 358,631 | | |
*Net Loss per Common Share*
The Company has two classes of shares, which are referred to as Class A common stock and Class B common stock. Earnings and losses are shared pro rata between the two classes of common shares. Public Warrants (see Note 4) and Private Placement Warrants (see Note 7) to purchase13,164,375 shares of Class A common stock at $11.50per share were issued on December 14, 2021. At December 31, 2025 and 2024,noPublic Warrants or Private Placement Warrants have been exercised. The 13,164,375potential shares of Class A common stock for outstanding Public Warrants and Private Placement Warrants to purchase the Companys stock were excluded from diluted earnings per share for the years ended December 31, 2025 and 2024 because they are contingently exercisable, and the contingencies have not yet been met. As a result, diluted net loss per common share is the same as basic net loss per common share for the periods presented. The table below presents a reconciliation of the numerator and denominator used to compute basic and diluted net loss per share for each class of stock.
| | | For the Year Ended December 31, 2025 | | | For the Year Ended December 31, 2024 | | |
| | | Common Stock | | | Common Stock | | |
| | | Class A | | | Class B | | | Class A | | | Class B | | |
| Basic and diluted net loss per common share: | | | | | | | | | | | | | |
| Numerator: | | | | | | | | | | | | | |
| Allocation of net loss | | $ | (1,271,227 | ) | | $ | | | | $ | (2,648,946 | ) | | $ | | | |
| | | | | | | | | | | | | | | | | | |
| Denominator: | | | | | | | | | | | | | | | | | |
| Weighted average shares outstanding | | | 10,057,621 | | | | | | | | 11,243,598 | | | | | | |
| | | | | | | | | | | | | | | | | | |
| Basic and diluted net loss per common share | | $ | (0.13 | ) | | $ | | | | $ | (0.24 | ) | | $ | | | |
F-15
*Accounting for Warrants*
The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the instruments specific terms and applicable authoritative guidance in ASC 480 and ASC 815, Derivatives and Hedging (ASC 815).
The assessment considers whether the instruments are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the instruments meet all of the requirements for equity classification under ASC 815, including whether the instruments are indexed to the Companys own common shares and whether the instrument holders could potentially require net cash settlement in a circumstance outside of the Companys control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the instruments are outstanding. As discussed in Note 7, the Company determined that its Warrants, issued pursuant to the public warrant agreement (as may be amended and restated, the Public Warrant Agreement) and private warrant agreement (as may be amended and restated, the Private Warrant Agreement, and together with the Public Warrant Agreement, the Warrant Agreements), qualify for equity accounting treatment.
*Recent Accounting Pronouncements*
The Companys management does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Companys consolidated financial statements.
Note 3 Initial Public Offering and Over-Allotment
**
Pursuant to the IPO and over-allotment, the Company sold 25,375,000 Units at a price of $10.00 per Unit. Each Unit consists of one Public Share and one-half of a Public Warrant. Each whole Public Warrant entitles the holder to purchase one share of Class A common stock at a price of $11.50 per share, subject to adjustment (see Note 7).
Note 4 Private Placement
On December 14, 2021, simultaneously with the consummation of the IPO and the underwriters exercise of their over-allotment option, the Company consummated the Private Placement of950,000Private Placement Units at a price of $10.00per Private Placement Unit, generating gross proceeds of $9,500,000. On December 28, 2021, subsequent to the IPO and the underwriters exercise of their over-allotment option, the Company consummated the Private Placement of 3,750 Private Placement Units at a price of $10.00 per Private Placement Unit, generating gross proceeds of $37,500. Each whole Private Placement Unit will consist of one Placement Share and one-half of a Private Placement Warrant. Each whole Private Placement Warrant will be exercisable to purchase one share of Class A common stock at a price of $11.50per share. A portion of the proceeds from the Private Placement Units will be added to the proceeds from the IPO to be held in the Trust Account. If the Company does not complete a Business Combination within the Combination Period, the proceeds from the sale of the Private Placement Units will be used to fund the redemption of the Public Shares (subject to the requirements of applicable law), and the Private Placement Units and all underlying securities will be worthless.
Note 5 Related Party Transactions
*Founder Shares*
On August 31, 2021, the Sponsor purchased7,362,500shares of the Companys Class B common stock, par value $0.0001 (Founder Shares), for an aggregate price of $25,000, and in November 2021, the Company effected a 1.36672326 for 1 stock split of its common stock, so that the Sponsor owned an aggregate of10,062,500Founder Shares.The Founder Shares will automatically convert into Class A common stock at the time of the Companys initial Business Combination and are subject to certain transfer restrictions, as described in Note 7.
The Initial Stockholders had agreed to forfeit up to1,312,500Founder Shares to the extent that the over-allotment option is not exercised in full by the underwriters.Subsequent to December 31, 2021, since the underwriters exercised the over-allotment option only in part, the Sponsor forfeited1,181,250Founder Shares.
The Initial Stockholders have agreed, subject to limited exceptions, not to transfer, assign or sell any of their Founder Shares until the earlier to occur of (A) one year after the completion of the initial Business Combination or (B) subsequent to the initial Business Combination, (x) if the last sale price of the Class A common stock equals or exceeds $12.00per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the initial Business Combination, or (y) the date on which the Company completes a liquidation, merger, capital stock exchange or other similar transaction that results in all of the Companys stockholders having the right to exchange their shares of common stock for cash, securities or other property.
*Due from Sponsor*
Due from Sponsor represents payments of Sponsors expenses by the Company on the Sponsors behalf. As of December 31, 2025 and 2024, due from Sponsor amounted to $15,510.
**
F-16
*Due to Related Party*
Due to related party represents payments of Companys expenses by the Sponsor on the Companys behalf, including accrual of unpaid monthly administrative support services fees. As of December 31, 2025 and 2024, due to related party amounted to $211,029 and $201,029, respectively.
*Convertible Note Related Party*
On July 26, 2024, the Company issued an unsecured promissory note to the Sponsor with a principal amount equal to $422,182. The note is non-interest bearing and payable on the earlier of July 26, 2026 or the Companys initial Business Combination. The Note may be converted into equity securities of the Company on mutually agreeable terms if consented to in writing by the Sponsor. As of December 31, 2025, the Company received the full principal amount of $422,182 under this Note.
*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 will repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. Otherwise, the Working Capital Loans would 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 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 $1.5 million of such Working Capital Loans may be convertible into units of the post-Business Combination entity at a price of $10.00 per unit. The units would be identical to the Private Placement Units. As of December 31, 2025 and 2024, the promissory notes below were entered into which fall under the Working Capital Loans structure.
In July 2023, the Company issued an unsecured promissory note to the Sponsor with a principal amount equal to $60,000 (the Extension Note). On the same date, in connection with advances the Sponsor may make in the future to the Company for working capital expenses in connection with the Companys initial Business Combination, the Company issued a separate unsecured promissory note to the Sponsor in the principal amount of up to $240,000 (the Working Capital Note, together with the Extension Note, the Notes). Both Notes bear no interest and are repayable in full upon the earlier of (a) the date of the consummation of the Companys initial business combination, or (b) the date of the Companys liquidation. As of December 31, 2025 and 2024, the total outstanding balance of the Notes was $300,000.
In connection with funding the Notes, on July 5, 2023, the Sponsor entered into a subscription agreement with a third-party investor. Pursuant to the subscription agreement, the Sponsor will transfer one share of Class A common stock of the Company for each dollar funded upon the closing of a Business Combination. As of December 31, 2025, such third-party investor loaned $300,000 to the Sponsor, which amount is included under the Extension Note described above.
On October 10, 2024 (effective on April 10, 2024), the Company issued an unsecured and non-interest-bearing promissory note to the Sponsor with a principal amount equal to $1,500,000 to cover the monthly extension payments of the Company and for working capital purposes. The note is payable in full upon the earlier of (a) April 10, 2026 and (b) the date the Company consummates a business combination. The Company drew $800,000 from this note on April 10, 2024 to replenish the misallocated restricted funds.
On December 6, 2024, the Company and Sponsor entered into the A&R Polar Subscription Agreement with Polar pursuant to which Polar contributed an additional $200,000 to Sponsor (for an aggregate of $500,000), which in turn was loaned by Sponsor to the Company to fund any additional extensions of the date by which the Company must consummate an initial Business Combination and to cover working capital expenses. The A&R Polar Subscription Agreement provides that in connection with the Initial Polar Capital Investment, the Company will repay the entire balance of the Initial Polar Capital Investment to Polar within five business days of the closing of an initial Business Combination of the Company and that Sponsor will transfer and/or the Company will issue on Sponsors behalf an additional 200,000 shares of Class A common stock to Polar immediately prior to the closing of an initial Business Combination of the Company (for an aggregate of 500,000 shares to be transferred and/or issued to Polar as consideration for the Initial Polar Capital Investment).
On February 9, 2025, the Company and Sponsor entered into the February 2025 Subscription Agreement with Kevin Wright and Jeanine Percival Wright Revocable Trust pursuant to which the Investor contributed $500,000 to Sponsor, which in turn was loaned by Sponsor to the Company to fund any additional extensions of the date by which the Company must consummate an initial Business Combination and to cover working capital expenses. The February 2025 Subscription Agreement provides that in connection with the Contribution, the Company will repay the entire balance of the Contribution to the Investor within five business days of the closing of an initial Business Combination of the Company and that Sponsor will transfer and/or the Company will issue on Sponsors behalf an additional 300,000 shares of Class A common stock to the Investor immediately prior to the closing of an initial Business Combination of the Company.
As of December 31, 2025, the total borrowings under the Working Capital Loans structure were $1,800,000, with a discount allocation of $0, or a net amount of $1,800,000. As of December 31, 2024, the total borrowings under the Working Capital Loans structure were $1,300,000, with a discount allocation of $144,795, or a net amount of $1,155,205.
F-17
*August Subscription Agreement*
On August 11, 2025, the Company and Sponsor entered into the August Subscription Agreement with Polar pursuant to which Polar contributed an additional $400,000 to the Company to cover working capital expenses. The August Subscription Agreement provides that in connection with the August Polar Capital Investment, immediately prior to the closing of a Business Combination, the Company will issue to Polar Capital Investments one share of Company class A common stock per $1.00 contributed by Polar (subscription shares). The subscription shares meet equity classification under ASC 815-40. Additionally, in connection with the August Subscription Agreement, an amount equal to Polars contribution shall be paid by the Company to Polar as a return of capital within five business days of the closing of a Business Combination. Further, the Sponsor shall not sell, transfer, or otherwise dispose of any securities (including warrants) owned by the Sponsor without Polars consent, other than Permitted Share Transfers, until the full amount of the August Polar Capital Investment has been paid to Polar. The Company and Sponsor are jointly and severally obligated for such repayment. If the closing of a Business Combination occurs, Polar may, in its sole discretion, elect at the closing of such Business Combination or at any time prior to the repayment by the Company either in cash or shares of the Companys Class A common stock at a rate of one share of Class A common stock for each $10 of the August Polar Capital Investment (the Return of Capital). In the event that the Sponsor or the Company defaults in its obligations and that such default continues for a period of five business days following written notice to the Sponsor and Company (the Default Date), the Company shall immediately issue to Polar 0.1 shares of the Companys Class A common stock (iii) (the Default Shares) for each $1.00 of the Polar contribution on the Default Date and shall issue Polar an additional 0.1 Default Shares for each $1.00 of the Polar contribution that Polar funded each month thereafter, until the default is cured. Although the Default Shares and Return of Capital shares are equity linked, they are classified as liabilities due to the failure to meet equity classification criteria under ASC 815-40.
At initial recognition, the Return of Capital shares and Default Shares are measured at fair value and recognized in the statement of profit and loss as a subscription expense, consistent with the guidance in ASC 815-10 for fair value measurement. Subsequent changes in fair value are also recognized in profit and loss, in accordance with ASC 815-10, as the instrument does not qualify for equity classification and is accounted for as a liability measured at fair value through earnings. For the year ended December 31, 2025, the Company recognized $0 as subscription expense related to the recognition of the Default Shares, $164,000 as return of capital subscription shares expense, $0 gain on changes of event of default subscription share liability and $16,400 gain on change in fair value of return of capital subscription shares liability. As of December 31, 2025, the Company had outstanding balance of $0 on default shares liability and $147,600 on return of capital subscription shares liability. As of December 31, 2024, there was no outstanding balance on both default shares liability and return of capital subscription shares liability.
*Support Services*
The Company has agreed to pay the Sponsor a fee of $10,000 per month following the Companys listing on the New York Stock Exchange for office space, utilities, and secretarial and administrative services. The agreement will terminate upon the earlier of the Companys consummation of a Business Combination or its liquidation. For the year ended December 31, 2025, $120,000 has been incurred and $80,000 was paid under this agreement. For the year ended December 31, 2024, $120,000 has been incurred under this agreement, $40,000 of which has been paid by the Company as of December 31, 2024. As of December 31, 2025 and 2024, the Company had accrued administrative support services fees of $110,000 and $70,000, respectively, under due to related party account in the Companys accompanying consolidated balance sheets.
Note 6 Commitments and Contingencies
*Registration Rights*
**
The holders of Founder Shares, Private Placement Units and units that may be issued upon conversion of Working Capital Loans, if any, will be entitled to registration rights to require the Company to register a sale of any of the Companys securities held by them pursuant to a certain registration rights agreement, dated December 9, 2021. These holders will be entitled to make up to three demands, excluding short form demands, that the Company register such securities. In addition, these holders will have certain piggyback registration rights with respect to registration statements filed subsequent to the Companys completion of its 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 IPO to purchase up to 3,750,000 additional Units to cover over-allotments, if any, at the IPO price less underwriting discounts and commissions.
The underwriters were paid a cash underwriting discount of $0.20 per unit on the offering, or $5,000,000 in the aggregate at the closing of the IPO. In addition, the underwriters are entitled to deferred underwriting commissions of $0.35 per unit, or $8,881,250 from the closing of the IPO and over-allotment. The total deferred fee of $8,956,250 (including underwriting discount of $75,000 related to the exercise of the over-allotment option) is deferred until completion of a Business Combination. The deferred fee will become payable to the underwriters from the amounts held in the Trust Account solely if the Company completes a Business Combination, subject to the terms of the underwriting agreement.
On January 28, 2025, Citigroup, as representative of the underwriters, agreed to formally waive the deferred underwriting commissions of $8,956,250in full, pursuant to a deferred fee waiver letter agreement between Citigroup and the Company only upon a successful Business Combination with Ace Green Recycling, as further described below. The waiver of deferred underwriting commissions is contingent upon a successful Business Combination with Ace Green Recycling, thus, as of December 31, 2025, the full amount of $8,956,250remains outstanding.
F-18
*Business Combination Agreement*
On December 4, 2024, the Company, the Sponsor, Ace Green Recycling and Merger Sub, entered into the Business Combination Agreement, pursuant to which, subject to the satisfaction or waiver of certain conditions precedent in the Business Combination Agreement, the following transactions will occur: (a) Merger Sub will merge with and into Ace Green Recycling, with Ace Green Recycling surviving the Merger as a wholly owned subsidiary of the Company and the security holders of Ace Green Recycling becoming security holders of the Company and (b) the other transactions contemplated by the Business Combination Agreement and the Ancillary Documents referred to therein (together with the Merger, the Transactions).
Pursuant to the Business Combination Agreement, at the effective time of the Merger, each outstanding share of common stock of Ace Green Recycling (other than any excluded shares and dissenting shares) shall be converted into the right to receive (i) a number of shares of Company common stock equal to the a specified exchange ratio and (ii) a pro rata portion of any Earnout Shares that the Company is obligated to issue pursuant to the terms of the Business Combination Agreement.
The Business Combination Agreement, subject to the terms and conditions set forth therein, provides that Athena will issue up to an aggregate 10,500,000 shares of its common stock (the Earnout Shares) to Ace Green Recyclings shareholders and up to an aggregate of 1,500,000 shares of its common stock to Sponsor based on the trading prices of Athenas common stock during the five-year period following the closing of the Merger (the Closing).
*Voting and Support Agreements*
In connection with the execution of the Business Combination Agreement, Sponsor entered into a Voting and Support Agreement (the Sponsor Support Agreement) with Athena and Ace Green Recycling, pursuant to which Sponsor has agreed to, among other things, (a) vote at any meeting of Athena shareholders to be called for approval of the Business Combination Agreement, the Merger, and the other Transactions all shares of Athena Class A common stock (together with any warrants to acquire Athena Class A common stock, the Sponsor Securities) beneficially owned or thereafter acquired in favor of the Business Combination Agreement, the Merger, and the other Transactions, (b) be bound by certain other covenants and agreements related to the Transactions and (c) be bound by certain transfer restrictions with respect to the Sponsor Securities, in each case, on the terms and subject to the conditions set forth in the Sponsor Support Agreement.
In connection with the execution of the Business Combination Agreement, certain Ace Green Recycling shareholders entered into a Voting and Support Agreement (the Ace Green Recycling Support Agreement) with Athena and Ace Green Recycling, pursuant to which each such Ace Green Recycling shareholder has agreed to, among other things, (a) vote at any meeting of Ace Green Recyclings shareholders to be called for approval of, among other things, the Business Combination Agreement and the Transactions all of such Ace Green Recycling shareholders shares of Ace Green Recycling common stock (the Ace Green Recycling Securities) beneficially owned or thereafter acquired in favor of the Transactions, (b) be bound by certain other covenants and agreements related to the Transactions and (c) be bound by certain transfer restrictions with respect to the Ace Green Recycling Securities, in each case, on the terms and subject to the conditions set forth in the Ace Green Recycling Support Agreement.
*Lock-Up Agreements*
In connection with the Closing, certain Ace Green Recycling shareholders will each enter into an agreement providing that each such Ace Green Recycling shareholder will not, subject to certain exceptions, transfer its shares of Athena common stock during the period commencing on the closing date of the business combination and ending 180 days thereafter.
In connection with the Closing, Sponsor will enter into an agreement providing that Sponsor will not, subject to certain exceptions, transfer its shares of Athena common stock during the period commencing on the closing date of the business combination and ending 180 days thereafter.
*New Registration Rights Agreement*
The Business Combination Agreement contemplates that, at the Closing, certain Ace Green Recycling equity holders, Sponsor and Athena will enter into a Registration Rights Agreement (the New Registration Rights Agreement), pursuant to which Athena will agree to register for resale certain shares of Athenas common stock and other equity securities of Athena that are held by the parties thereto. Pursuant to the New Registration Rights Agreement, Athena will agree to file a shelf registration statement registering the sale or resale of all of the Registrable Securities (as defined in the New Registration Rights Agreement) within 30 days after the closing date of the business combination. Athena will also agree to provide customary piggyback registration rights, subject to certain requirements and customary conditions. The New Registration Rights Agreement will also provide that Athena will pay certain expenses relating to such registrations and indemnify the shareholders against certain liabilities.
Note 7 Stockholders Deficit
*Preferred Stock*The Company is authorized to issue 1,000,000 shares of preferred stock with a par value of $0.0001 per share 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 December 31, 2025 and 2024, there were no shares of preferred stock issued or outstanding.
F-19
*Class A Common Stock*The Company is authorized to issue 100,000,000 shares of Class A common stock with a par value of $0.0001 per share. On June 21, 2023, the Company issued an aggregate of 8,881,250 shares of its Class A common stock to the Sponsor, upon the conversion of an equal number of shares of Class B common stock, par value $0.0001 per share, of the Company. The 8,881,250 shares of Class A common stock issued in connection with the conversion are subject to the same restrictions as applied to the shares of Class B common stock before the Conversion, including, among other things, certain transfer restrictions, waiver of redemption rights and the obligation to vote in favor of an initial business combination, as described in the prospectus for the Companys initial public offering. As of December 31, 2025 and 2024, there were 9,835,000 shares of Class A common stock issued and outstanding which are classified as permanent equity, and 24,887 and 310,156 shares of Class A common stock issued and outstanding are subject to possible redemption, which are classified as temporary equity, respectively.
*Class B Common Stock*The Company is authorized to issue 10,000,000 shares of Class B common stock with a par value of $0.0001 per share. Holders of Class B common stock are entitled to one vote for each share. As of December 31, 2025 and 2024, there were no shares of Class B common stock outstanding.
The Companys Charter provides that the shares of Class B common stock will automatically convert into shares of Class A common stock at the time of the initial Business Combination on a one-for-one basis, subject to adjustment. In the case that additional Class A common stock, or equity-linked securities, are issued or deemed issued in excess of the amounts offered in the IPO and related to the closing of the initial Business Combination, the ratio at which Class B common stock shall convert into Class A common stock will be adjusted (unless the holders of a majority of the outstanding Class B common stock agree to waive such adjustment with respect to any such issuance or deemed issuance) so that the number of shares of Class A common stock issuable upon conversion of all Class B common stock will equal, in the aggregate, on an as-converted basis, 25.28% of the sum of the total number of shares of Class A common stock outstanding upon the completion of the IPO (including the Public Shares, Private Placement Units and Founder Shares) plus all Class A common stock and equity-linked securities issued or deemed issued in connection with the initial Business Combination. Holders of Founder Shares may also elect to convert their Class B common stock into an equal number of shares of Class A common stock, subject to adjustment as provided above, at any time.
Holders of common stock will have the right to elect all of the Companys directors prior to a Business Combination. Holders of Class A common stock and Class B common stock will vote together as a single class on all other matters submitted to a vote of stockholders except as required by law.
*Warrants*As of December 31, 2025 and 2024, the Company has 12,687,500 Public Warrants and 953,750 Private Placement Warrants outstanding. Warrants may only be exercised for a whole number of shares. No fractional shares will be issued upon exercise of the Warrants. The Warrants will become exercisable 30 days after the completion of an initial Business Combination and will expire five years from the completion of a Business Combination or earlier upon redemption or liquidation.
The Company will not be obligated to deliver any shares of common stock pursuant to the exercise of a Warrant and will have no obligation to settle such Warrant exercise unless a registration statement under the Securities Act with respect to the shares of common stock underlying the Warrants is then effective and a prospectus relating thereto is current, subject to the Company satisfying its obligations with respect to registration. No Warrant will be exercisable for cash or on a cashless basis, and the Company 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 is available.
The Company has agreed that as soon as practicable, but in no event later than 15 business days after the closing of its initial Business Combination, it will use its best efforts to file with the SEC a post-effective amendment to the registration statement for the IPO or a new registration statement for the registration, under the Securities Act, of the shares of Class A common stock issuable upon exercise of the Warrants. The Company will use its best efforts to cause the same to become effective and to maintain the effectiveness of such registration statement, and a current prospectus relating thereto, until the expiration of the Warrants in accordance with the provisions of the Warrant Agreements. No Warrants will be exercisable for cash unless the Company has an effective and current registration statement covering the offer and sale of the shares of common stock issuable upon exercise of the Warrants and a current prospectus relating to such shares of common stock. Notwithstanding the foregoing, if a registration statement covering the shares of Class A common stock issuable upon exercise of the Warrants is not effective by the 60th business day after the closing of the Companys initial Business Combination, Warrant holders may, until such time as there is an effective registration statement and during any period when the Company shall have failed to maintain an effective registration statement, exercise Warrants on a cashless basis in accordance with Section 3(a)(9) of the Securities Act or another exemption. If that exemption, or another exemption, is not available, holders will not be able to exercise their Warrants on a cashless basis.
Once the Warrants become exercisable, the Company may redeem the Warrants:
| | | in whole and not in part; | |
| | | | |
| | | at a price of $0.01 per Warrant; | |
| | | | |
| | | upon not less than 30 days prior written notice of redemption, to each Warrant holder; and | |
| | | | |
| | | if, and only if, the reported last sale price of the shares of common stock equals or exceeds $18.00 per share (as adjusted for share subdivisions, share consolidations, share capitalizations, rights issuances, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date the Company sends the notice of redemption to the Warrant holders. | |
F-20
If and when the Warrants become redeemable by the Company, the Company may not exercise its redemption right if the issuance of shares upon exercise of the Warrants is not exempt from registration or qualification under applicable state blue sky laws or the Company is unable to effect such registration or qualification.
If the Company calls the Warrants for redemption, management will have the option to require all holders that wish to exercise the Warrants to do so on a cashless basis, as described in the Public Warrant Agreement and the Private Warrant Agreement. The exercise price and number of shares of common stock issuable upon exercise of the Warrants may be adjusted in certain circumstances including in the event of a share dividend, or recapitalization, reorganization, merger or consolidation. However, except as described below, the Warrants will not be adjusted for issuances of shares of common stock at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the Warrants. If the Company is unable to complete 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.
In addition, if (x) the Company issues additional shares of common stock or equity-linked securities for capital raising purposes in connection with the closing of its initial Business Combination at an issue price or effective issue price of less than $9.20 per share of common stock (with such issue price or effective issue price to be determined in good faith by the Companys 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 such 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 Companys initial Business Combination on the date of the consummation of such initial Business Combination (net of redemptions), and (z) the volume weighted average trading price of the Companys shares of common stock during the 20 trading day period starting on the trading day prior to the day on which the Company consummates its initial Business Combination (such price, the Market Value) is below $9.20 per share, the exercise price of the Warrants will be adjusted (to the nearest cent) to be equal to 115% of the greater of the Market Value and the Newly Issued Price.
The Private Placement Warrants are identical to the Public Warrants underlying the Units sold in the IPO, except that the Private Placement Warrants and the shares of common stock issuable upon the exercise of the Private Placement Warrants will not be transferable, assignable or saleable until 30 days after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants will be exercisable at the election of the holder on a cashless basis.
Neither the Private Placement Warrants nor the Public Warrants contain any provision that change dependent upon the characteristics of the holder of the Warrant.
Note 8 Income Taxes
The total provision for income taxes is comprised of the following:
| | | For the Years Ended | | |
| | | December31, 2025 | | | December31, 2024 | | |
| Federal | | | | | | | |
| Current | | $ | 4,453 | | | $ | | | |
| Deferred | | | (45,999 | ) | | | (356,333 | ) | |
| | | | | | | | | | |
| State | | | | | | | | | |
| Current | | | | | | | | | |
| Deferred | | | | | | | | | |
| | | | | | | | | | |
| Change in valuation allowance | | | 45,999 | | | | 356,333 | | |
| Total provision for income taxes | | $ | 4,453 | | | $ | | | |
The net deferred tax assets and liabilities in the accompanying consolidated balance sheets included the following components:
| | | December31, 2025 | | | December31, 2024 | | |
| Capitalized expenses before business combination | | $ | 941,705 | | | $ | 877,896 | | |
| Net operating loss carryforward | | | 111,449 | | | | 129,259 | | |
| Valuation allowance for deferred tax assets | | | (1,053,154 | ) | | | (1,007,155 | ) | |
| | | | | | | | | | |
| Net deferred tax assets | | $ | | | | $ | | | |
F-21
In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences representing net future deductible amounts become deductible. Management considers the scheduled reversal of deferred tax assets, projected future taxable income and tax planning strategies in making this assessment. After consideration of all of the information available, management believes that significant uncertainty exists with respect to future realization of the deferred tax assets and has therefore established a full valuation allowance. At December 31, 2025 and 2024, the valuation allowance was $1,053,154 and $1,007,155, respectively.
A reconciliation of the statutory federal income tax rate to the Companys effective tax rate is as follows:
| | | December31, 2025 | | | December31, 2024 | | |
| Statutory federal income tax rate | | | 21.00 | % | | | 21.00 | % | |
| State taxes, net of federal tax benefit | | | 0.00 | % | | | 0.00 | % | |
| Subscription expense | | | (2.72 | )% | | | (0.00 | )% | |
| Fines and penalties | | | (2.62 | )% | | | (7.55 | )% | |
| Perm differences | | | (12.65 | )% | | | (0.00 | )% | |
| Loss on return of capital liability change | | | 0.27 | % | | | (0.00 | )% | |
| Valuation allowance | | | (3.63 | )% | | | (13.45 | )% | |
| Income tax provision expense | | | (0.35 | )% | | | 0.00 | % | |
Note 9 Fair Value Measurements
The fair value of the Companys financial assets and liabilities reflects managements estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities).
As of December 31, 2025 and 2024, the assets held in the Trust Account were comprised of $297,614 and $3,666,439, respectively, held in money market funds.
All of the Companys investments held in the Trust Account are classified as trading securities. Net amounts of $2,869,660 and $2,674,222 (net of approximately $328,000 cash deposited to the Trust Account to refund the over withdrawal) have been withdrawn from the Trust Account to pay for franchise and income taxes of the Company as of December 31, 2025 and 2024, respectively.
The following tables present information about the Companys assets that are measured at fair value on a recurring basis at December 31, 2025 and 2024 and indicate the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:
| | | | | | Quoted Pricesin Active Markets | | | Significant Other Observable Inputs | | | Significant Other Unobservable Inputs | | |
| December 31, 2025 | | Level | | | (Level1) | | | (Level2) | | | (Level3) | | |
| Assets: | | | | | | | | | | | | | | | | |
| Investments held in Trust Account Money Market Fund | | 1 | | | $ | 297,614 | | | $ | | | | $ | | | |
| | | | | | | | | | | | | | | | | |
| Liabilities: | | | | | | | | | | | | | | | | |
| Return of capital subscription shares liability | | 3 | | | $ | | | | $ | | | | $ | 147,600 | | |
F-22
| | | | | | Quoted Pricesin Active Markets | | | Significant Other Observable Inputs | | | Significant Other Unobservable Inputs | | |
| December 31, 2024 | | Level | | | (Level1) | | | (Level2) | | | (Level3) | | |
| Assets: | | | | | | | | | | | | | | | | |
| Investments held in Trust Account Money Market Fund | | 1 | | | $ | 3,666,439 | | | $ | | | | $ | | | |
The following tables present information about the Companys equity instruments that are measured at fair value at August 11, 2025, February 9, 2025 and December 6, 2024, and indicate the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:
| | | | | | Quoted Pricesin Active Markets | | | Significant Other Observable Inputs | | | Significant Other Unobservable Inputs | | |
| August 11, 2025 | | Level | | | (Level1) | | | (Level2) | | | (Level3) | | |
| Liabilities: | | | | | | | | | | | | | | | | |
| Return of capital subscription shares liability | | 3 | | | $ | | | | $ | | | | $ | 164,000 | | |
| | | | | | Quoted Pricesin Active Markets | | | Significant Other Observable Inputs | | | Significant Other Unobservable Inputs | | |
| February 9, 2025 | | Level | | | (Level1) | | | (Level2) | | | (Level3) | | |
| Equity: | | | | | | | | | | | | | | | | |
| Fair value of 300,000 subscription shares | | 3 | | | $ | | | | $ | | | | $ | 55,500 | | |
| | | | | | Quoted Pricesin Active Markets | | | Significant Other Observable Inputs | | | Significant Other Unobservable Inputs | | |
| December 6, 2024 | | Level | | | (Level1) | | | (Level2) | | | (Level3) | | |
| Equity: | | | | | | | | | | | | | | | | |
| Fair value of 200,000 subscription shares | | 3 | | | $ | | | | $ | | | | $ | 878,000 | | |
The return of capital subscription shares liability was valued using the market approach. The following table presents the quantitative information regarding market assumptions used in the valuation of return of capital subscription shares liability:
| Inputs | | August 11, 2025 | | |
| Market Price | | $ | 10.00 | | |
| Discount for Lack of Marketability | | | 9 | % | |
| Discount for Probability of Liquidation | | | 50 | % | |
| Discount for Expected Forfeiture | | | 10 | % | |
| Inputs | | February 9, 2025 | | |
| Market Price | | $ | 1.00 | | |
| Discount for Lack of Marketability | | | 7 | % | |
| Discount for Probability of Liquidation | | | 50 | % | |
| Discount for Expected Forfeiture | | | 20 | % | |
| Inputs | | December 6, 2024 | | |
| Market Price | | $ | 11.92 | | |
| Discount for Lack of Marketability | | | 8 | % | |
| Discount for Probability of Liquidation | | | 50 | % | |
| Discount for Expected Forfeiture | | | 20 | % | |
F-23
The return of capital subscription shares liability is accounted for as a liability in accordance with ASC 815-40 and is presented as return of capital subscription shares liability on the consolidated balance sheets. The return of capital subscription shares liability is measured at fair value at inception and on a recurring basis, with changes in fair value presented within other income (expense) in the consolidated statements of operations.
The Company established the initial fair value for the return of capital subscription shares liability on August 11, 2025, the date of the Company entered into the Subscription Agreement, using the market approach model. As of December 31, 2025, the return of capital subscription shares liability was valued using the market approach model. Transfers between levels are recognized at the end of each quarterly reporting period. There were no transfers from a Level 3 measurement to a Level 2 or Level 1 fair value measurement during the year ended December 31, 2025.
The following table presents the changes in the fair value of Level 3 return of capital subscription shares liability:
| | | Return of Capital Subscription Shares Liability | | |
| Fair value as of December 31, 2024 | | $ | | | |
| Initial measurement on August 11, 2025 | | | 164,000 | | |
| Change in fair value | | | (16,400 | ) | |
| Fair value as of December 31, 2025 | | $ | 147,600 | | |
On December 31, 2025, the estimated fair value of the return of capital subscription shares liability is determined using Level 3 inputs utilizing the market approach model.
The key inputs into the market approach model as of December 31, 2025:
| Inputs | | December 31, 2025 | | |
| Market Price | | $ | 9.02 | | |
| Discount for Lack of Marketability | | | 9 | % | |
| Discount for Probability of Liquidation | | | 50 | % | |
| Discount for Expected Forfeiture | | | 10 | % | |
Note 10 Segment Information
ASC Topic 280,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 (CODM), or group, in deciding how to allocate resources and assess performance.
The Companys CODM has been identified as the Chief Executive Officer, who reviews the assets, operating results, and financial metrics for the Company as a whole to make decisions about allocating resources and assessing financial performance. Accordingly, management has determined that there is only one reportable segment.
F-24
The CODM assesses performance for the single segment and decides how to allocate resources based on net (loss) income that also is reported on the consolidated statements of operations as net (loss) income. The measure of segment assets is reported on the consolidated balance sheets as total assets. When evaluating the Companys performance and making key decisions regarding resource allocation, the CODM reviews several key metrics included in net loss and total assets, which include the following:
| | | December 31, | | | December31, | | |
| | | 2025 | | | 2024 | | |
| Investments held in Trust Account | | $ | 297,614 | | | $ | 3,666,439 | | |
| Cash and cash equivalents | | $ | 348,472 | | | $ | 142,260 | | |
| | | For the Year Ended December 31, | | |
| | | 2025 | | | 2024 | | |
| General and administrative expenses | | $ | 1,876,932 | | | $ | 3,402,952 | | |
| Interest income on investments held in Trust Account | | $ | 110,291 | | | $ | 850,641 | | |
The CODM reviews interest income on investments held in Trust Account to measure and monitor stockholder 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 expenses, as reported on the consolidated statements of operations, are the significant segment expenses provided to the CODM on a regular basis. The accounting policies used to measure the profit and loss of the segment are the same as those described in the summary of significant accounting policies.
All other segment items included in net income or loss are reported on the consolidated statements of operations and described within their respective disclosures.
Note 11 Subsequent Events
The Company has evaluated subsequent events and transactions that occurred after the consolidated balance sheet date through the date these consolidated financial statements were issued and determined that there were no subsequent events that would require adjustment or disclosure, except as described below.
On each of January 5, 2026, February 5, 2026 and March 4, 2026, the Company deposited $497.74 into the Trust Account, allowing the Company to extend the period of time it has to consummate its initial business combination by one month per deposit from January 14, 2026 to April 14, 2026 (the Monthly Extension). The last Monthly Extension is the seventh of up to nine potential monthly extensions permitted under the Companys Amended and Restated Certificate of Incorporation, as amended.
F-25