Filed 2026-03-13 · Period ending 2025-12-31 · 72,677 words · SEC EDGAR
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# Insight Digital Partners II (DYOR) — 10-K
**Filed:** 2026-03-13
**Period ending:** 2025-12-31
**Accession:** 0001213900-26-027719
**Source:** [SEC EDGAR](https://www.sec.gov/Archives/edgar/data/2079292/000121390026027719/)
**Origin leaf:** ec427a385c9fa6c488e90785c57c99fcd1c076b6507b68e09971b29ab60665c9
**Words:** 72,677
---
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2025
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number: 001-42919
INSIGHT DIGITAL PARTNERS II
(Exact name of registrant as specified in its charter)
| Cayman Islands | | N/A | |
| (State or other jurisdiction of incorporation or organization) | | (I.R.S. Employer Identification Number) | |
| 17 State Street, Suite 4000 New York, New York 10004 | |
| (Address of principal executive offices) | |
Registrants telephone number, including area code: (212) 739-0495
Securities registered pursuant to Section 12(b) of the Act:
| Title of Each Class: | | Trading Symbols | | Name of Each Exchange on Which Registered: | |
| Units, each consisting of one Class A Ordinary Share, $0.0001 par value, and one-half of one redeemable warrant | | DYORU | | The Nasdaq Stock Market LLC | |
| Class A Ordinary Shares, par value $0.0001 per share | | DYOR | | The Nasdaq Stock Market LLC | |
| Warrants, each whole warrant exercisable for one Class A Ordinary Share at an exercise price of $11.50 per share | | DYORW | | The Nasdaq Stock Market LLC | |
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes No
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of large accelerated filer, accelerated filer, smaller reporting company and emerging growth company in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | | Accelerated filer | | |
| Non-accelerated filer | | Smaller reporting company | | |
| Emerging growth company | | | | |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant has filed a report on and attestation to its managements assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrants executive officers during the relevant recovery period pursuant to 240.10D-1(b).
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No
The registrants units began trading on The Nasdaq Stock Market LLC on October 29, 2025, and the registrants Class A Ordinary Shares began separate trading on The Nasdaq Stock Market LLC on November 18, 2025. The registrant was not a public company as of June 30, 2025 and therefore it cannot calculate the aggregate market value of its voting and non-voting common equity held by non-affiliates as of such date.
As of March 13, 2026, there were an aggregate of 23,000,000 ordinary shares of the registrant issued and outstanding, consisting of 17,250,000 Class A Ordinary Shares, par value $0.0001 per share, and 5,750,000 Class B Ordinary Shares, par value $0.0001 per share.
Documents Incorporated by Reference: None.
TABLE
OF CONTENTS
|
PAGE | |
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Part I |
1 | |
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Item 1. Business |
1 | |
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Item 1A. Risk Factors |
13 | |
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Item 1B. Unresolved Staff Comments |
56 | |
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Item 1C. Cybersecurity |
56 | |
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Item 2. Properties |
56 | |
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Item 3. Legal Proceedings |
56 | |
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Item 4. Mine Safety Disclosures |
56 | |
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Part II |
57 | |
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| |
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Item 5. Market for Registrants Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities |
57 | |
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Item 6. [Reserved] |
57 | |
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Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations |
57 | |
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Item 7A. Quantitative and Qualitative Disclosures about Market Risk |
60 | |
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Item 8. Financial
Statements and Supplementary Data |
60 | |
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Item 9. Changes
in and Disagreements with Accountants on Accounting and Financial Disclosure |
60 | |
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Item 9A. Controls and Procedures. |
60 | |
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Item 9B. Other Information |
60 | |
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Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent
Inspections |
60 | |
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Part
III |
61 | |
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| |
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Item 10. Directors,
Executive Officers and Corporate Governance |
61 | |
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Item 11. Executive
Compensation. |
66 | |
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Item 12. Security
Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters. |
67 | |
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Item 13. Certain
Relationships and Related Transactions, and Director Independence |
68 | |
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Item 14. Principal
Accounting Fees and Services. |
69 | |
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Part
IV |
70 | |
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Item 15. Exhibits,
Financial Statement Schedules. |
70 | |
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Item 16. Form
10-K Summary |
71 | |
i
CAUTIONARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS AND RISK FACTOR SUMMARY
Certain
statements in this Annual Report on Form 10-K (this Form 10-K) may constitute forward-looking statements
for purposes of the federal securities laws. Our forward-looking statements include, but are not limited to, statements regarding our
or our management teams expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements
that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions,
are forward-looking statements. The words anticipate, believe, continue, could,
estimate, expect, intend, may, might, plan, possible,
potential, predict, project, should, would and similar expressions
may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking
statements in this Form 10-K may include, for example, statements about:
|
| our
ability to select an appropriate target business or businesses; | |
|
| our
ability to complete our initial Business Combination (as defined below); | |
|
| 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
pool of prospective target businesses; | |
|
| the
adverse impacts that events outside of our control, such as increased geopolitical unrest
and increased volatility in the debt and equity markets, may have on our ability to consummate
an initial Business Combination; | |
|
| our
public securities potential liquidity and trading; | |
|
| the
lack of a market for our securities; | |
|
| the
use of proceeds not held in the Trust Account (as defined below) or available to us from
interest income on the Trust Account balance; | |
|
| the
Trust Account not being subject to claims of third parties; or | |
|
| our
financial performance. | |
The
forward-looking statements contained in this Form 10-K are based on our current expectations and beliefs concerning future developments
and their potential effects on us. There can be no assurance that future developments affecting us will be those that we have anticipated.
These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions
that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements.
These risks and uncertainties include, but are not limited to, those factors described under the section of this Form 10-K entitled Risk
Factors. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual
results may vary in material respects from those projected in these forward-looking statements. We undertake no obligation to update
or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required
under applicable securities laws.
ii
Summary
of Risk Factors
An
investment in our securities involves a high degree of risk. The occurrence of one or more of the events or circumstances described in
the section titled *Risk Factors*, alone or in combination with other events or circumstances, may materially adversely
affect our business, financial condition and operating results. In that event, the trading price of our securities could decline, and
you could lose all or part of your investment. Such risks include, but are not limited to:
|
| We
are a blank check company with no operating history and no revenues, and you have no basis
on which to evaluate our ability to achieve our business objective. | |
|
| Our
shareholders may not be afforded an opportunity to vote on our proposed initial Business
Combination, and even if we hold a vote, holders of our Founder Shares (as defined below)
will participate in such vote, which means we may complete our initial Business Combination
even though a majority of our Public Shareholders (as defined below) do not support such
a combination. | |
|
| Your
only opportunity to effect your investment decision regarding a potential Business Combination
may be limited to the exercise of your right to redeem your shares from us for cash. | |
|
| If
we seek shareholder approval of our initial Business Combination, our initial shareholders
and management team have agreed to vote in favor of such initial Business Combination, regardless
of how our Public Shareholders vote, and we may not need any Public Shares (as defined below)
in addition to our Founder Shares to be voted in favor of an initial Business Combination
in order to approve an initial Business Combination. | |
|
| The
ability of our Public Shareholders to redeem their shares for cash may make our financial
condition unattractive to potential Business Combination targets, which may make it difficult
for us to enter into a Business Combination with a target. | |
|
| The
ability of our Public Shareholders to exercise redemption rights with respect to a large
number of our shares and the amount of deferred underwriting compensation may not allow us
to complete the most desirable Business Combination or optimize our capital structure, and
may substantially dilute your investment in us. | |
|
| The
requirement that we complete our initial Business Combination within the duration of the
Completion Window (as defined below) may give potential target businesses leverage over us
in negotiating a Business Combination and may limit the time we have in which to conduct
due diligence on potential Business Combination targets, in particular as we approach our
dissolution deadline, which could undermine our ability to complete our initial Business
Combination on terms that would produce value for our shareholders. | |
|
| Our
search for an initial Business Combination, and any target business with which we may ultimately
consummate an initial Business Combination, may be materially adversely affected by current
global geopolitical conditions resulting from the ongoing Russia-Ukraine conflict and the
recent escalation of conflict in the Middle East and Southwest Asia, including the recent conflict involving the United States, Israel and Iran. | |
|
| If
we seek shareholder approval of our initial Business Combination, our Sponsor (as defined
below), initial shareholders, directors, officers, and their affiliates may elect to purchase
shares or Public Warrants from Public Shareholders, which may influence a vote on a proposed
Business Combination and reduce the public float of our securities. | |
|
| If
a shareholder fails to receive notice of our offer to redeem our Public Shares in connection
with our initial Business Combination, or fails to comply with the procedures for tendering
its shares, such shares may not be redeemed. | |
|
| If
we are deemed to be an investment company under the Investment Company Act of 1940, as amended
(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. | |
iii
|
| 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. | |
|
| 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. | |
|
| Nasdaq
may delist our securities from trading on its exchange, which could limit investors
ability to make transactions in our securities and subject us to additional trading restrictions. | |
|
| The
nominal purchase price paid by our Sponsor for the Founder Shares may result in significant
dilution to the implied value of your Public Shares upon the consummation of our 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 ordinary shares to materially decline. | |
|
| The
value of the Founder Shares following completion of our initial Business Combination is likely
to be substantially higher than the nominal price paid for them, even if the trading price
of our ordinary shares at such time is substantially less than $10.00 per share. | |
|
| You
will not be entitled to protections normally afforded to investors of other blank check companies
subject to Rule 419 of the Securities Act. | |
|
| 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 have
not completed our initial Business Combination within the required time period, our Public
Shareholders may receive only approximately $10.00 per share, or less in certain circumstances,
on our redemption of their shares, and our warrants will expire worthless. | |
|
| If
the net proceeds of the IPO and the sale of the Private Placement Warrants (each as defined
below) not being held in the Trust Account are insufficient to allow us to operate for at
least the duration of the Completion Window, it could limit the amount of cash available
to fund our search for a target business or businesses and complete our initial Business
Combination, and we will depend on loans from our Sponsor or management team to fund our
search and to complete our initial Business Combination. | |
|
| Past
performance by our management team and their respective affiliates, including investments
and transactions in which they have participated and businesses with which they have been
associated, may not be indicative of future performance of an investment in the Company. | |
|
| We
may be a passive foreign investment company, or PFIC, which could result in
adverse United States federal income tax consequences to U.S. investors. | |
|
| We
may reincorporate in or transfer by way of continuation to another jurisdiction in connection
with our Business Combination, and such reincorporation may result in taxes imposed on shareholders
or warrant holders. | |
|
| The
Excise Tax (as defined below) could be imposed on redemptions of our ordinary shares if we
were to become a covered corporation in the future. | |
|
| Due
to the number of special purpose acquisition companies evaluating targets, attractive targets
may become more scarce and there may be more competition for attractive targets or such attractive
targets may not be interested in consummating a Business Combination with a SPAC due to a
negative public perception of mergers involving SPACs. This could increase the cost of our
initial Business Combination and could even result in our inability to find a target or to
consummate an initial Business Combination. | |
|
| Transactions
in connection with or in anticipation of our initial Business Combination and our structure
thereafter may not be tax-efficient to our shareholders and warrant holders. As a result
of our Business Combination, our tax obligations may be more complex, burdensome and/or uncertain. | |
iv
Part
I
Item
1. Business
**
*References
in this Form 10-K to we, us, our or the Company refer to Insight Digital Partners
II. References to our management or our management team refer to our officers and directors.*
Introduction
We
are a blank check company incorporated on July 11, 2025 as a Cayman Islands exempted company for the purpose of effecting a merger, amalgamation,
share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses (the Business
Combination). We have 24 months from the closing of our initial public offering (IPO or Initial Public Offering),
or until such earlier liquidation date as our board of directors may approve (the Completion Window), to complete our initial
Business Combination.
We
have reviewed, and continue to review, a number of opportunities to enter into a Business Combination, but we are not able to determine
at this time whether we will complete a Business Combination with any of the target businesses that we have reviewed or with any other
target business. We may pursue an initial Business Combination in any business or industry but we expect to target opportunities and
companies that are in high-growth, high impact sectors that form the backbone of the digital economy including Payment Gateways, Stablecoin,
Exchanges, Crypto Miners, Crypto Holding and Trading, High Performance Computing, Energy, and Crypto Treasury Strategy. We also have
neither engaged in any operations nor generated any revenue to date. Based on our business activities, the Company is a shell
company as defined under the Exchange Act of 1934, as amended (the Exchange Act), because we have no operations
and nominal assets consisting almost entirely of cash.
The
registration statements for our IPO became effective pursuant to Section 8(a) of the Securities Act of 1933, as amended (the Securities
Act) on October 28, 2025. On October 30, 2025, we consummated the IPO of 17,250,000 units (the Units and, with respect
to the Class A Ordinary Shares included in the Units being offered, the Public Shares or Class A Ordinary Shares),
which included the exercise by Cohen (as defined below) of its over-allotment option in full in the amount of 2,250,000 Units, at $10.00
per Unit, generating gross proceeds of $172,500,000. Each Unit consists of one Class A Ordinary Share and one-half of one redeemable
warrant of the Company (the Public Warrants), with each whole warrant entitling the holder thereof to purchase one Class
A Ordinary Share at $11.50 per share.
Simultaneously
with the closing of our IPO, we consummated the sale of an aggregate of 5,450,000 warrants (the Private Placement Warrants)
at a price of $1.00 per Private Placement Warrant, in a private placement to the Companys Sponsor, Insight Digital Partners Sponsor
LLC, a Delaware limited liability company (the Sponsor), and Cohen & Company Capital Markets, a division of Cohen &
Company Securities, LLC (Cohen), the underwriter of the IPO, generating gross proceeds of $5,450,000. Of those 5,450,000
Private Placement Warrants, the Sponsor purchased 3,725,000 Private Placement Warrants and Cohen purchased 1,725,000 Private Placement
Warrants.
Prior
to the consummation of the IPO, on July 16, 2025, our Sponsor made a capital contribution of $25,000, or approximately $0.004 per share,
to cover certain expenses on our behalf in exchange for issuance of 5,750,000 Class B Ordinary Shares (the Founder Shares).
In July 2025, our Sponsor subsequently transferred an aggregate of 210,000 Founder Shares to our independent directors and certain of
our officers, including our Chief Financial Officer, at the same per-share price that our Sponsor purchased such shares, or approximately
$0.004 per share, resulting in our Sponsor holding 5,540,000 Founder Shares and our initial shareholders collectively holding an aggregate
of 5,750,000 Founder Shares.
1
Following
the closing of the IPO, on October 30, 2025, an amount of $172,500,000 ($10.00 per Unit) from the net proceeds of the sale of the Units
in the IPO and the sale of the Private Placement Warrants was placed in the Trust Account (the Trust Account) and can be
held as cash or invested in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds meeting
certain conditions under Rule 2a-7 under the Investment Company Act, which invest only in direct U.S. government treasury obligations.
Except with respect to interest earned on the funds held in the Trust Account that may be released to the Company to pay its taxes, if
any, the proceeds from the IPO and the sale of the Private Placement Warrants will not be released from the Trust Account until the earliest
of (i) the completion of the Companys initial Business Combination or an earlier redemption in connection with the commencement
of the procedures to consummate the initial Business Combination if the Company determines it is desirable to facilitate the completion
of the initial Business Combination, (ii) the redemption of the Companys Public Shares if the Company is unable to complete the
initial Business Combination within the Completion Window, subject to applicable law, or (iii) the redemption of the Companys
Public Shares properly submitted in connection with a shareholder vote to amend the Companys amended and restated memorandum and
articles of association to (A) modify the substance or timing of the Companys obligation to allow redemption in connection with
the initial Business Combination or to redeem 100% of the Companys Public Shares if the Company has not consummated an initial
Business Combination within the Completion Window or (B) with respect to any other material provisions relating to shareholders
rights or pre-initial Business Combination activity. The proceeds deposited in the Trust Account could become subject to the claims of
the Companys creditors, if any, which could have priority over the claims of the Companys Public Shareholders. To mitigate
the risk that might be deemed to be an investment company for purposes of the Investment Company Act, which risk increases the longer
that the Company holds investments in the Trust Account, the Company may, at any time (based on the management teams ongoing assessment
of all factors related to the Companys potential status under the Investment Company Act), instruct the trustee to liquidate the
investments held in the Trust Account and instead to hold the funds in the Trust Account in an interest bearing bank demand deposit account
at a bank.
Effecting
Our Initial Business Combination
General
We
are not presently engaged in, and we will not engage in, any operations for an indefinite period of time. We intend to effectuate our
initial Business Combination using cash held in the Trust Account, the proceeds of the sale of our shares in connection with our initial
Business Combination (including pursuant to forward purchase agreements or backstop agreements we may enter into), shares issued to the
owners of the target, debt issued to bank or other lenders or the owners of the target, other securities issuances, or a combination
of the foregoing. We may seek to complete our initial Business Combination with a company or business that may be financially unstable
or in its early stages of development or growth, which would subject us to the numerous risks inherent in such companies and businesses.
We
may need to obtain additional financing to complete our initial Business Combination, either because the transaction requires more cash
than is available from the proceeds held in our Trust Account or because we become obligated to redeem a significant number of our Public
Shares upon completion of the Business Combination, in which case we may issue additional securities or incur debt in connection with
such business combination. There are no prohibitions on our ability to issue securities or incur debt in connection with our initial
Business Combination. We are not currently a party to any arrangement or understanding with any third party with respect to raising any
additional funds through the sale of securities, the incurrence of debt or otherwise.
Business
Strategy
Our
team unites leaders across digital finance, blockchain technology, and venture capital bringing together vast experience in Web3
ecosystems and financial innovation. We aim to unlock shareholder value by completing a business combination with a transformative company
in the digital infrastructure economy. We intend to target high-growth, high impact sectors that form the backbone of the digital economy
including Payment Gateways, Stablecoin, Exchanges, Crypto Miners, Crypto Holding and Trading, High Performance Computing, Energy, and
Crypto Treasury Strategy.
We
believe that applying our approach to investing, and leveraging our network, resources and expertise, will help our management team execute
on our business strategy:
|
| Growth
Mindset. We look to partner with future
market leading companies with potential for driving innovation while remaining adaptable
within the rapidly evolving digital economy, enabling the next generation of digital financial
infrastructure. Leveraging our deep experience in identifying and scaling growth-stagebusinesses,
we aim to support visionary teams with the potential to become market leaders. | |
2
|
| Management-focused,
partnership-orientedapproach. We
will aim to align with the strategy and goals of the management team we partner with. By
partnering with the target companys existing management, we believe that we can build
upon the existing managements current traction and support them as they strive to
achieve category leadership, while minimizing the business disruption associated with a leadership
transition. | |
|
| Long
investment horizon. We intend to be
a long-terminvestor and our goal is to help companies transform into industry leaders,
and to be supportive along the way by continuing to serve on the board of directors. We intend
to target companies where we can be a long-termpartner, supporting their path towards
market leadership. | |
We
believe there are many potential targets within the digital infrastructure economy that could become attractive public companies. These
potential targets exhibit a broad range of business models and financial characteristics from mature businesses with recurring revenues
and strong cash flows to high growth innovative companies.
Selection
of a Target Business and Structuring of Our Initial Business Combination
The
rules of Nasdaq and our amended and restated memorandum and articles of association require that we complete one or more business combinations
having an aggregate fair market value of at least 80% of the value of the assets held in the Trust Account (excluding the deferred underwriting
commissions and taxes paid or payable on the interest earned on the Trust Account) at the time of our signing a definitive agreement
in connection with our initial Business Combination. Our board of directors will make the determination as to the fair market value of
our initial Business Combination. In the event that we seek to complete our initial Business Combination with a company that is affiliated
with our Sponsor, officers or directors (or their respective affiliates or related entities), we, or a committee of independent directors,
will obtain an opinion from an independent investment banking firm that is a member of FINRA, or an independent firm that commonly renders
valuation opinions for the type of company we are seeking to acquire or from an independent accounting firm, that our initial Business
Combination is fair to the Company from a financial point of view. We are not required to obtain such an opinion in any other context.
Additionally, pursuant to Nasdaq rules, our initial Business Combination must be approved by a majority of our independent directors.
We
anticipate structuring our initial Business Combination so that the post transaction company in which our Public Shareholders own shares
will own or acquire 100% of the equity interests or assets of the target business or businesses. We may, however, structure our initial
Business Combination such that the post transaction company owns or acquires less than 100% of such interests or assets of the target
business in order to meet certain objectives of the target management team or shareholders or for other reasons, but we will only complete
such business combination if the post transaction company owns or acquires 50% or more of the outstanding voting securities of the target
or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company
under the Investment Company Act. Even if the post transaction company owns or acquires 50% or more of the voting securities of the target,
our shareholders prior to the initial Business Combination may collectively own a minority interest in the post transaction company,
depending on valuations ascribed to the target and us in the initial Business Combination. For example, we could pursue a transaction
in which we issue a substantial number of new shares in exchange for all of the outstanding capital stock, shares or other equity interests
of a target. In this case, we would acquire a 100% controlling interest in the target. However, as a result of the issuance of a substantial
number of new shares, our shareholders immediately prior to our initial Business Combination could own less than a majority of our issued
and outstanding shares subsequent to our initial Business Combination.
If
less than 100% of the equity interests or assets of a target business or businesses are owned or acquired by the post transaction company,
the portion of such business or businesses that is owned or acquired is what will be taken into account for purposes of the 80% of net
assets test described above. If the business combination involves more than one target business, the 80% of net assets test will be based
on the aggregate value of all of the target businesses.
3
Consistent
with our business strategy, we will look to identify companies that have compelling growth potential and a combination of the characteristics
below. We intend to use these criteria and guidelines in evaluating initial business combination opportunities, but we may decide to
enter into our initial business combination with a target that does not meet the following criteria:
|
| $500
million to $5 billion enterprise value; |
|
|
| Compelling
business model with a clear competitive advantage; |
|
|
| Positive
cash flow and strong balance sheet supporting sustainable growth; |
|
|
| Strategic
rationale for going public, including access to capital, public currency for acquisitions, and equity-based talent retention; |
|
|
| Experienced
management team prepared to operate in the public markets; and/or |
|
|
| Audited
financials with at least two years of Public Company Accounting Oversight Board (United States) (PCAOB)-compliant audits. |
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These
criteria and guidelines 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 criteria and guidelines as well as other considerations, factors, guidelines 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
and guidelines in our shareholder communications related to our initial Business Combination, which, as discussed in this prospectus,
would be in the form of proxy solicitation materials or tender offer documents, as applicable, that we would file with the U.S. Securities
and Exchange Commission (the SEC).
In
evaluating a prospective target business, we expect to conduct a thorough due diligence review that may encompass, among other things,
meetings with incumbent management and employees, document reviews, interviews of customers and suppliers, inspection of facilities,
as applicable, as well as a review of financial, operational, legal and other information which will be made available to us. If we determine
to move forward with a particular target, we will proceed to structure and negotiate the terms of the initial Business Combination transaction.
The
time required to select and evaluate a target business and to structure and complete our initial Business Combination, and the costs
associated with this process, are not currently ascertainable with any degree of certainty. Any costs incurred with respect to the identification
and evaluation of, and negotiation with, a prospective target business with which our initial Business Combination is not ultimately
completed will result in our incurring losses and will reduce the funds we can use to complete another business combination.
We
are not prohibited from pursuing an initial Business Combination with a company that is affiliated with our Sponsor, officers or directors
(or their respective affiliates or related entities). In the event that we seek to complete our initial Business Combination with a company
that is affiliated (as defined in our amended and restated memorandum and articles of association) with our Sponsor, officers or directors
(or their respective affiliates or related entities), we, or a committee of independent directors, will obtain an opinion from an independent
investment banking firm which is a member of FINRA or a valuation or appraisal firm stating that the consideration to be paid by us in
such an 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.
Members
of our management team and our independent directors directly or indirectly own Founder Shares and/or Private Placement Warrants and,
accordingly, may have a conflict of interest in determining whether a particular target business is an appropriate business with which
to effectuate our initial Business Combination. The low price that our Sponsor, executive officers and directors (directly or indirectly)
paid for the Founder Shares creates an incentive whereby our officers and directors could potentially make a substantial profit even
if we select an acquisition target that subsequently declines in value and is unprofitable for Public Shareholders. If we are unable
to complete our initial Business Combination within the Completion Window, the Founder Shares and Private Placement Warrants may expire
worthless, except to the extent they receive liquidating distributions from assets outside the Trust Account, which could create an incentive
for our Sponsor, executive officers and directors to complete a transaction even if we select an acquisition target that subsequently
declines in value and is unprofitable for Public Shareholders. Further, each of our officers and directors may have a conflict of interest
with respect to evaluating a particular business combination if the retention or resignation of any such officers and directors was included
by a target business as a condition to any agreement with respect to our initial Business Combination.
4
Each
of our officers and directors presently has, and any of them in the future may have additional, fiduciary, contractual or other 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. Our amended and restated memorandum and articles of association provide that to the fullest extent permitted by applicable
law: (i) no individual serving as a director or an officer shall have any duty, except and to the extent expressly assumed by contract,
to refrain from engaging directly or indirectly in the same or similar business activities or lines of business as us; and (ii) we renounce
any interest or expectancy in, or in being offered an opportunity to participate in, any potential transaction or matter which may be
a corporate opportunity for to any director or officer on the one hand, and us, on the other. Accordingly, if any of our officers or
directors becomes aware of a business combination opportunity which is suitable for an entity to which he or she has then current fiduciary
or contractual obligations, he or she will honor his or her fiduciary or contractual obligations to present such business combination
opportunity to such other entity, subject to their fiduciary duties under Cayman Islands law.
In
addition, our Sponsor and our officers and directors may sponsor or form other special purpose acquisition companies similar to ours
or may pursue other business or investment ventures during the period in which we are seeking an initial Business Combination. As a result,
our Sponsor, officers and directors could have conflicts of interest in determining whether to present business combination opportunities
to us or to any other special purpose acquisition company with which they may become involved. Any such companies, businesses or investments
may present additional conflicts of interest in pursuing an initial business combination target. However, we do not believe that such
duties or obligations will materially affect our ability to complete our initial Business Combination.
Redemption
Rights for Public Shareholders upon Completion of our Initial Business Combination
We
will provide our Public Shareholders with the opportunity to redeem all or a portion of their Public Shares in connection with the completion
of our initial Business Combination either (i) in connection with a general meeting called to approve the Business Combination or (ii)
without a shareholder vote by means of a tender offer. Each Public Shareholder may elect to redeem its Public Shares irrespective of
whether they vote for or against the initial Business Combination, or whether they do not vote or abstain from voting on the initial
Business Combination, or whether they were a shareholder on the record date for the shareholder meeting held to approve the initial Business
Combination. The decision as to whether we will seek shareholder approval of a proposed Business Combination or conduct a tender offer
will be made by us, solely in our discretion, and will be based on a variety of factors such as the timing of the transaction and whether
the terms of the transaction would require us to seek shareholder approval under applicable law or stock exchange listing requirement
or whether we were deemed to be a foreign private issuer (which would require a tender offer rather than seeking shareholder approval
under SEC rules). Asset acquisitions and share purchases would not typically require shareholder approval while direct mergers with our
Company and any transactions where we issue more than 20% of our issued and outstanding Class A Ordinary Shares or seek to amend our
amended and restated memorandum and articles of association would require shareholder approval. So long as we obtain and maintain a listing
for our securities on Nasdaq, we will be required to comply with Nasdaqs shareholder approval rules.
The
requirement that we provide our Public Shareholders with the opportunity to redeem their Public Shares by one of the two methods listed
above are contained in provisions of our amended and restated memorandum and articles of association and will apply whether or not we
maintain our registration under the Exchange Act or our listing on Nasdaq. Such provisions may be amended if approved by a special resolution,
which requires the affirmative vote of at least two-thirds of the votes cast by the shareholders of the issued shares present in person
or represented by proxy and entitled to vote on such matter at a general meeting of the company, so long as we offer redemption in connection
with such amendment.
5
If
we provide our Public Shareholders with the opportunity to redeem their Public Shares in connection with a general meeting, we will,
pursuant to our amended and restated memorandum and articles of association:
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| 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 | |
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| file
proxy materials with the SEC. | |
In
the event that we seek shareholder approval of our initial Business Combination, we will distribute proxy materials and, in connection
therewith, provide our Public Shareholders with the redemption rights described above upon completion of the initial Business Combination.
If
we seek shareholder approval, we will complete our initial Business Combination only if we obtain the approval of an ordinary resolution
under Cayman Islands law and our amended and restated memorandum and articles of association, which requires the affirmative vote of
at least a majority of the votes cast by the shareholders of the issued shares present in person or represented by proxy and entitled
to vote on such matter at a general meeting of the company. A quorum for such meeting will be present if the holders of one-third of
issued and outstanding shares entitled to vote at the meeting are represented in person or by proxy. Our Sponsor, officers and directors
will count toward this quorum and, pursuant to the letter agreement, our Sponsor, officers and directors have agreed to vote their Founder
Shares and any Public Shares purchased during or after our IPO (including in open market and privately-negotiated transactions) in favor
of our initial Business Combination. For purposes of seeking approval of an ordinary resolution, non-votes will have no effect on the
approval of our initial Business Combination once a quorum is obtained. Assuming that only the holders of one-third of our issued and
outstanding ordinary shares, representing a quorum under our amended and restated memorandum and articles of association, vote their
ordinary shares at a general meeting of the Company, we will not need any Public Shares in addition to our Founder Shares to be voted
in favor of an initial Business Combination in order to approve an initial Business Combination. However, if our initial Business Combination
is structured as a statutory merger or consolidation with another company under Cayman Islands law, the approval of our initial Business
Combination will require the approval of a special resolution, which requires the affirmative vote of at least two-thirds of the votes
cast by the shareholders of the issued shares present in person or represented by proxy and entitled to vote on such matter at a general
meeting of the company. Each Public Shareholder may elect to redeem their Public Shares irrespective of whether they do not vote or abstain
from voting on the proposed transaction or whether they were a Public Shareholder on the record date for the general meeting held to
approve the proposed transaction.
If
a shareholder vote is not required and we do not decide to hold a shareholder vote for business or other legal reasons, we will:
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| conduct
the redemptions pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, which regulate
issuer tender offers, and | |
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| file
tender offer documents with the SEC prior to completing our initial Business Combination
which contain substantially the same financial and other information about the initial Business
Combination and the redemption rights as is required under Regulation 14A of the Exchange
Act, which regulates the solicitation of proxies. | |
In
the event we conduct redemptions pursuant to the tender offer rules, our offer to redeem will remain open for at least 20 business days,
in accordance with Rule 14e-1(a) under the Exchange Act, and we will not be permitted to complete our initial Business Combination until
the expiration of the tender offer period. In addition, the tender offer will be conditioned on Public Shareholders not tendering more
than the number of Public Shares we are permitted to redeem. If Public Shareholders tender more shares than we have offered to purchase,
we will withdraw the tender offer and not complete the initial Business Combination.
Upon
the public announcement of our initial Business Combination, if we elect to conduct redemptions pursuant to the tender offer rules, we
or our Sponsor will terminate any plan established in accordance with Rule 10b5-1 to purchase our Class A Ordinary Shares in the open
market, in order to comply with Rule 14e-5 under the Exchange Act.
6
We
intend to require our Public Shareholders seeking to exercise their redemption rights, whether they are record holders or hold their
shares in street name, to, at the holders option, either deliver their share certificates to our transfer agent
or deliver their shares to our transfer agent electronically using the Depository Trust Companys DWAC (Deposit/Withdrawal At Custodian)
system, prior to the date set forth in the proxy materials or tender offer documents, as applicable. In the case of proxy materials,
this date may be up to two business days prior to the scheduled vote on the proposal to approve the initial Business Combination. In
addition, if we conduct redemptions in connection with a shareholder vote, we intend to require a Public Shareholder seeking redemption
of its Public Shares to also submit a written request for redemption to our transfer agent two business days prior to the scheduled vote
in which the name of the beneficial owner of such shares is included. The proxy materials or tender offer documents, as applicable, that
we will furnish to holders of our Public Shares in connection with our initial Business Combination will indicate whether we are requiring
Public Shareholders to satisfy such delivery requirements. We believe that this will allow our transfer agent to efficiently process
any redemptions without the need for further communication or action from the redeeming Public Shareholders, which could delay redemptions
and result in additional administrative cost. If the proposed initial Business Combination is not approved and we continue to search
for a target company, we will promptly return any certificates or shares delivered by Public Shareholders who elected to redeem their
shares.
We
will provide our Public Shareholders with the opportunity to redeem, regardless of whether they abstain, vote for, or against, our initial
Business Combination, all or a portion of their Public Shares upon the completion of our initial Business Combination at a per-share
price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account calculated as of two business days prior to
the consummation of the initial Business Combination, including interest (which interest shall be net of taxes paid or payable), divided
by the number of then issued and outstanding Public Shares, subject to the limitations and on the conditions described herein. The amount
in the Trust Account is initially anticipated to be $10.00 per Public Share. The per share amount we will distribute to investors who
properly redeem their shares will not be reduced by the deferred underwriting commissions we will pay to the underwriter. The redemption
rights will include the requirement that any beneficial owner on whose behalf a redemption right is being exercised must identify itself
in order to validly redeem its shares. Our Sponsor, officers and directors have entered into a letter agreement with us, pursuant to
which they have agreed to waive their redemption rights with respect to their Founder Shares and any Public Shares they may hold in connection
with the completion of our initial Business Combination or an earlier redemption in connection with the commencement of the consummation
of the initial Business Combination if we determine it is desirable to facilitate the completion of the initial Business Combination.
Our
proposed initial Business Combination may impose a minimum cash requirement for (i) cash consideration to be paid to the target or its
owners, (ii) cash for working capital or other general corporate purposes or (iii) the retention of cash to satisfy other conditions.
In the event the aggregate cash consideration we would be required to pay for all Public Shares that are validly submitted for redemption
plus any amount required to satisfy cash conditions pursuant to the terms of the proposed initial Business Combination exceed the aggregate
amount of cash available to us, we will not complete the initial Business Combination or redeem any shares, and all Public Shares submitted
for redemption will be returned to the holders thereof. We may, however, raise funds through the issuance of equity-linked securities
or through loans, advances or other indebtedness in connection with our initial Business Combination, including pursuant to forward purchase
agreements or backstop arrangements we may enter into following the consummation of our Initial Public Offering, in order to, among other
reasons, satisfy such net tangible assets or minimum cash requirements.
If
we seek shareholder approval of our initial Business Combination and we do not conduct redemptions in connection with our initial Business
Combination pursuant to the tender offer rules, our Sponsor, initial shareholders, directors, officers, or their affiliates may purchase
Public Shares or Public Warrants in privately negotiated transactions or in the open market either prior to or following the completion
of our initial Business Combination, although they are under no obligation or duty to do so. Such a purchase may include a contractual
acknowledgment that such shareholder, although still the record holder of our shares, is no longer the beneficial owner thereof and therefore
agrees not to exercise its redemption rights.
7
In
the event that our Sponsor, initial shareholders, directors, officers, or their affiliates purchase shares in privately negotiated transactions
from Public Shareholders who have already elected to exercise their redemption rights, such selling shareholders would be required to
revoke their prior elections to redeem their shares.
The
purpose of any such purchases of shares could be to (i) vote such shares in favor of the business combination and thereby increase the
likelihood of obtaining shareholder approval of the business combination or (ii) to satisfy a closing condition in an agreement with
a target that requires us to have a minimum net worth or a certain amount of cash at the closing of our initial Business Combination,
where it appears that such requirement would otherwise not be met. The purpose of any such purchases of Public Warrants could be to reduce
the number of Public Warrants outstanding or to vote such warrants on any matters submitted to the warrant holders for approval in connection
with our initial Business Combination. Any such purchases of our securities may result in the completion of our initial Business Combination
that may not otherwise have been possible.
In
addition, if such purchases are made, the public float of our Class A Ordinary Shares or Public Warrants may be reduced
and the number of beneficial holders of our securities may be reduced, which may make it difficult to maintain or obtain the quotation,
listing or trading of our securities on a national securities exchange.
Our
Sponsor, officers, directors and/or their affiliates anticipate that they may identify the shareholders with whom our initial shareholders,
officers, directors or their affiliates may pursue privately negotiated purchases by either the shareholders contacting us directly or
by our receipt of redemption requests submitted by shareholders (in the case of Class A Ordinary Shares) following our mailing of proxy
materials in connection with our initial Business Combination. To the extent that our Sponsor, officers, directors, or their affiliates
enter into a private purchase, they would identify and contact only potential selling shareholders who have expressed their election
to redeem their shares for a pro rata share of the Trust Account or vote against our initial Business Combination, whether or not such
shareholder has already submitted a proxy with respect to our initial Business Combination but only if such shares have not already been
voted at the general meeting related to our initial Business Combination. Our Sponsor, officers, directors, or any of their affiliates
will select which shareholders to purchase shares from based on a negotiated price and number of shares and any other factors that they
may deem relevant, and will only purchase shares if such purchases comply with Regulation M under the Exchange Act and the other federal
securities laws. Our Sponsor, officers, directors and/or their affiliates will not make purchases of shares if the purchases would violate
Section 9(a)(2) or Rule 10b-5 of the Exchange Act. Any such purchases will be reported pursuant to Section 13 and Section 16 of the Exchange
Act to the extent such purchasers are subject to such reporting requirements.
Our
Sponsor, initial shareholders, directors, officers and their affiliates will be restricted from making purchases of shares if the purchases
would violate Section 9(a)(2) or Rule 10b-5 of the Exchange Act. Any such purchases will be reported pursuant to Section 13 and Section
16 of the Exchange Act to the extent such purchasers are subject to such reporting requirements. Additionally, in the event our Sponsor,
initial shareholders, directors, officers and their affiliates were to purchase Public Shares or warrants from Public Shareholders, such
purchases would be structured in compliance with the requirements of Rule 14e-5 under the Exchange Act including, in pertinent part,
through adherence to the following:
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| our
registration statement/proxy statement filed for our business combination transaction would disclose the possibility that our Sponsor,
initial shareholders, directors, officers and their affiliates may purchase Public Shares or warrants from Public Shareholders outside
the redemption process, along with the purpose of such purchases; |
|
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| if
our Sponsor, initial shareholders, directors, officers or their affiliates were to purchase Public Shares or warrants from Public Shareholders,
they would do so at a price no higher than the price offered through our redemption process; |
|
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| our
registration statement/proxy statement filed for our business combination transaction would include a representation that any of our
securities purchased by our Sponsor, initial shareholders, directors, officers or their affiliates would not be voted in favor of approving
the business combination transaction; |
|
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| our
Sponsor, initial shareholders, directors, officers or their affiliates would not possess any redemption rights with respect to our securities
or, if they do acquire and possess redemption rights, they would waive such rights; and |
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| we
would disclose in a Form 8-K, before our security holder meeting to approve the Business Combination transaction, the following material
items: |
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8
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| the
amount of our securities purchased outside of the redemption offer by our Sponsor, initial shareholders, directors, officers or their
affiliates, along with the purchase price; |
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| the
purpose of the purchases by our Sponsor, initial shareholders, directors, officers or their affiliates; |
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| the
impact, if any, of the purchases by our Sponsor, initial shareholders, directors, officers or their affiliates on the likelihood that
the business combination transaction will be approved; |
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| the
identities of our security holders who sold to our Sponsor, initial shareholders, directors, officers or their affiliates (if not purchased
on the open market) or the nature of our security holders (e.g., 5% security holders) who sold to our Sponsor, initial shareholders,
directors, officers or their affiliates; and |
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| the
number of our securities for which we have received redemption requests pursuant to our redemption offer. |
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Please
see *Item 1A. Risk Factors - If we seek shareholder approval of our initial Business Combination, our Sponsor, initial shareholders,
directors, officers and their affiliates may elect to purchase shares or Public Warrants from Public Shareholders, which may influence
a vote on a proposed business combination and reduce the public float of our securities.*
Notwithstanding
the foregoing, if we seek shareholder approval of our initial Business Combination and we do not conduct redemptions in connection with
our initial Business Combination pursuant to the tender offer rules, our amended and restated memorandum and articles of association
provide that a Public Shareholder, together with any affiliate of such Public Shareholder or any other person with whom such Public Shareholder
is acting in concert or as a group (as defined under Section 13 of the Exchange Act), will be restricted from seeking redemption
rights with respect to more than an aggregate of 15% of the Public Shares without our prior consent (the Excess Shares).
We believe this restriction will discourage shareholders from accumulating large blocks of shares, and subsequent attempts by such holders
to use their ability to exercise their redemption rights against a proposed business combination as a means to force us or our management
to purchase their shares at a significant premium to the then-current market price or on other undesirable terms. Absent this provision,
a Public Shareholder holding more than an aggregate of 15% of the Public Shares could threaten to exercise its redemption rights if such
holders shares are not purchased by us, our Sponsor or our management at a premium to the then-current market price or on other
undesirable terms. By limiting our shareholders ability to redeem no more than 15% of the Public Shares, we believe we will limit
the ability of a small group of shareholders to unreasonably attempt to block our ability to complete our initial Business Combination,
particularly in connection with a business combination with a target that requires as a closing condition that we have a minimum net
worth or a certain amount of cash. However, we would not be restricting our shareholders ability to vote all of their shares (including
Excess Shares) for or against our initial Business Combination.
Redemption
of Public Shares if No Initial Business Combination
Our
amended and restated memorandum and articles of association provide that we will have only the duration of the Completion Window to complete
our initial Business Combination. If we are unable to complete our initial Business Combination within the Completion Window, we will
as promptly as reasonably possible but not more than ten business days thereafter (and subject to lawfully available funds therefor),
redeem the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account,
including interest (which interest shall be net of taxes paid or payable and up to $100,000 of interest to pay liquidation expenses),
divided by the number of then issued and outstanding Public Shares, which redemption will completely extinguish Public Shareholders
rights as shareholders (including the right to receive further liquidating distributions, if any), subject to our obligations under Cayman
Islands law to provide for claims of creditors and subject to the other requirements of applicable law.
Our
Sponsor, officers and directors have entered into a letter agreement with us, pursuant to which they have waived their rights to liquidating
distributions from the Trust Account with respect to any Founder Shares held by them if we fail to complete our initial Business Combination
within the Completion Window, although they will be entitled to liquidating distributions from assets outside the Trust Account. However,
if our Sponsor or management team acquire Public Shares in or after our Initial Public Offering, they will be entitled to liquidating
distributions from the Trust Account with respect to such Public Shares, and to liquidating distributions from assets outside the Trust
Account, if we fail to complete our initial Business Combination within the allotted Completion Window.
9
Our
Sponsor, officers and directors have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our
amended and restated memorandum and articles of association (A) to modify the substance or timing of our obligation to allow redemption
in connection with our initial Business Combination or to redeem 100% of our Public Shares if we do not complete our initial Business
Combination within the Completion Window or (B) with respect to any other material provisions relating to shareholders rights
or pre-initial Business Combination activity, unless we provide our Public Shareholders with the opportunity to redeem their Public Shares
upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust
Account, including interest (which interest shall be net of taxes paid or payable), divided by the number of then issued and outstanding
Public Shares.
We
expect that all costs and expenses associated with our liquidation, as well as payments to any creditors, will be funded from amounts
remaining out of the approximately $1,200,000 of proceeds held outside the Trust Account, although we cannot assure you that there will
be sufficient funds for such purpose. However, if those funds are not sufficient to cover the costs and expenses associated with our
liquidation, to the extent that there is any interest accrued in the Trust Account not required to pay taxes, we may request the trustee
to release to us an additional amount of up to $100,000 of such accrued interest to pay those costs and expenses.
If
we were to expend all of the net proceeds of our Initial Public Offering and the sale of the Private Placement Warrants, other than the
proceeds deposited in the Trust Account, and without taking into account interest, if any, earned on the Trust Account, the per-share
redemption amount received by shareholders upon our dissolution would be approximately $10.00. The proceeds deposited in the Trust Account
could, however, become subject to the claims of our creditors which would have higher priority than the claims of our Public Shareholders.
We cannot assure you that the actual per-share redemption amount received by shareholders will not be substantially less than $10.00.
While we intend to pay such amounts, if any, we cannot assure you that we will have funds sufficient to pay or provide for all creditors
claims.
Although
we will seek to have all vendors, service providers, prospective target businesses and other entities with which we do business execute
agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the Trust Account for the benefit
of our Public Shareholders, there is no guarantee that they will execute such agreements or even if they execute such agreements that
they would be prevented from bringing claims against the Trust Account including but not limited to fraudulent inducement, breach of
fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order
to gain an advantage with respect to a claim against our assets, including the funds held in the Trust Account. If any third party refuses
to execute an agreement waiving such claims to the monies held in the Trust Account, our management will consider whether competitive
alternatives are reasonably available to us and will only enter into an agreement with such third party if management believes that such
third partys engagement would be in the best interests of the company under the circumstances. Examples of possible instances
where we may engage a third party that refuses to execute a waiver include the engagement of a third party consultant whose particular
expertise or skills are believed by management to be significantly superior to those of other consultants that would agree to execute
a waiver or in cases where management is unable to find a service provider willing to execute a waiver. WithumSmith+Brown, PC, our independent
registered public accounting firm, and the underwriter of our Initial Public Offering will not execute agreements with us waiving such
claims to the monies held in the Trust Account. In addition, there is no guarantee that such entities will agree to waive any claims
they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements with us and will not seek recourse
against the Trust Account for any reason. In order to protect the amounts held in the Trust Account, our Sponsor has agreed that it will
be liable to us if and to the extent any claims by a third party for services rendered or products sold to us (except for the Companys
independent registered public accounting firm), or a prospective target business with which we have entered into a written letter of
intent, confidentiality or other similar agreement or business combination agreement, reduce the amount of funds in the Trust Account
to below the lesser of (i) $10.00 per Public Share and (ii) the actual amount per Public Share held in the Trust Account as of the date
of the liquidation of the Trust Account, if less than $10.00 per share due to reductions in the value of the trust assets, in each case
less taxes paid or payable and up to $100,000 of interests to pay liquidation expenses, 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 underwriter of our Initial
Public Offering against certain liabilities, including liabilities under the Securities Act. However, we have not asked our Sponsor to
reserve for such indemnification obligations, nor have we independently verified whether our Sponsor has sufficient funds to satisfy
its indemnity obligations and we believe that our Sponsors only assets are securities of our company. Therefore, we cannot assure
you that our Sponsor would be able to satisfy those obligations. As a result, if any such claims were successfully made against the Trust
Account, the funds available for our initial Business Combination and redemptions could be reduced to less than $10.00 per Public Share.
In such event, we may not be able to complete our initial Business Combination, and you would receive such lesser amount per share in
connection with any redemption of your Public Shares. None of our officers or directors will indemnify us for claims by third parties
including, without limitation, claims by vendors and prospective target businesses.
10
In
the event that the proceeds in the Trust Account are reduced below the lesser of (i) $10.00 per Public Share and (ii) the actual amount
per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account if less than $10.00 per share due to
reductions in the value of the trust assets, in each case less taxes paid or payable and up to $100,000 of interest to pay liquidation
expenses, and our Sponsor asserts that it is unable to satisfy its indemnification obligations or that it has no indemnification obligations
related to a particular claim, our independent directors would determine whether to take legal action against our Sponsor to enforce
its indemnification obligations. While we currently expect that our independent directors would take legal action on our behalf against
our Sponsor to enforce its indemnification obligations to us, it is possible that our independent directors in exercising their business
judgment may choose not to do so in any particular instance if, for example, the cost of such legal action is deemed by the independent
directors to be too high relative to the amount recoverable or if the independent directors determine that a favorable outcome is not
likely. Accordingly, we cannot assure you that due to claims of creditors the actual value of the per-share redemption price will not
be less than $10.00 per share.
We
will seek to reduce the possibility that our Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring
to have all vendors, service providers, prospective target businesses or other entities with which we do business execute agreements
with us waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account. Our Sponsor will also not
be liable as to any claims under our indemnity of the underwriter of our Initial Public Offering against certain liabilities, including
liabilities under the Securities Act. We will have access to up to approximately $1,200,000 from the proceeds of our Initial Public Offering
with which to pay any such potential claims (including costs and expenses incurred in connection with our liquidation, currently estimated
to be no more than approximately $100,000). In the event that we liquidate and it is subsequently determined that the reserve for claims
and liabilities is insufficient, shareholders who received funds from our Trust Account could be liable for claims made by creditors.
If
we file a bankruptcy or winding-up petition or an involuntary bankruptcy or winding-up petition is filed against us that is not dismissed,
the proceeds held in the Trust Account could be subject to applicable bankruptcy or insolvency law, and may be included in our bankruptcy
or insolvency estate and subject to the claims of third parties with priority over the claims of our shareholders. To the extent any
bankruptcy or insolvency claims deplete the Trust Account, we cannot assure you we will be able to return $10.00 per share to our Public
Shareholders. Additionally, if we file a bankruptcy or winding-up petition or an involuntary bankruptcy or winding-up petition is filed
against us that is not dismissed, any distributions received by shareholders could be viewed under applicable debtor/creditor and/or
bankruptcy/insolvency laws as either a preferential transfer or a fraudulent conveyance, preference or disposition.
As a result, a liquidator, bankruptcy or insolvency court could seek to recover some or all amounts received by our shareholders. Furthermore,
our board of directors may be viewed as having breached its fiduciary duty to us or our creditors and/or may have acted in bad faith,
and thereby exposing itself and our company to claims of punitive damages, by paying Public Shareholders from the Trust Account prior
to addressing the claims of creditors. We cannot assure you that claims will not be brought against us for these reasons.
Our Public
Shareholders will be entitled to receive funds from the Trust Account only (i) in the event of the redemption of our Public Shares if
we do not complete our initial Business Combination within the Completion Window, (ii) in connection with a shareholder vote to amend
our amended and restated memorandum and articles of association (A) to modify the substance or timing of our obligation to allow redemption
in connection with our initial Business Combination or to redeem 100% of our Public Shares if we do not complete our initial Business
Combination within the Completion Window or (B) with respect to any other material provisions relating to shareholders rights
or pre-initial Business Combination activity or (iii) if they redeem their respective shares for cash in connection with the completion
of our initial Business Combination. In no other circumstances will a shareholder have any right or interest of any kind to or in the
Trust Account. In the event that we seek shareholder approval in connection with our initial Business Combination, a shareholders
voting in connection with the business combination alone will not result in a shareholders redeeming its shares to us for an applicable
pro rata share of the Trust Account. Such shareholder must have also exercised its redemption rights described above. These provisions
of our amended and restated memorandum and articles of association, like all provisions of our amended and restated memorandum and articles
of association, may be amended with a shareholder vote.
Competition
In
identifying, evaluating and selecting a target business for our initial Business Combination, we may encounter competition from other
entities having a business objective similar to ours, including other special purpose acquisition companies, private equity groups and
leveraged buyout funds, public companies and operating businesses seeking strategic acquisitions. Many of these entities are well established
and have extensive experience identifying and effecting Business Combinations directly or through affiliates. Moreover, many of these
competitors possess similar or greater financial, technical, human and other resources than us. Our ability to acquire larger target
businesses will be limited by our available financial resources. This inherent limitation gives others an advantage in pursuing the acquisition
of a target business. Furthermore, our obligation to pay cash in connection with our Public Shareholders who exercise their redemption
rights may reduce the resources available to us for our initial Business Combination and our outstanding warrants, and the future dilution
they potentially represent, may not be viewed favorably by certain target businesses. Either of these factors may place us at a competitive
disadvantage in successfully negotiating an initial Business Combination.
11
Employees
We
currently have two officers: Michael Singer and Glenn Worman. 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.
Available
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 (e.g., changes in corporate control, acquisitions or dispositions of a significant amount of assets
other than in the ordinary course of business and bankruptcy) in a Current Report on Form 8-K. 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 *http://www.sec.gov*. In addition, we will provide copies of these documents without
charge upon request from us in writing at 17 State Street, Suite 4000, New York, New York 10004 or by telephone at (212) 739-0495.
Emerging
Growth Company, Smaller Reporting Company and Controlled Company
We
are an emerging growth company, as defined in Section 2(a) of 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
shareholder approval of any golden parachute payments not previously approved. If some investors find our securities less attractive
as a result, there may be a less active trading market for our securities and the prices of our securities may be more volatile.
In
addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended
transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other
words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise
apply to private companies. We intend to take advantage of the benefits of this extended transition period.
We
will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of
the completion of our IPO, (b) in which we have total annual gross revenue of at least $1.235 billion, or (c) in which we are deemed
to be a large accelerated filer, which means the market value of our Class A Ordinary Shares that are held by non-affiliates exceeds
$700 million as of the prior June 30, 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. References herein to emerging growth company will have the meaning associated with
it in the JOBS Act.
Additionally,
we are a smaller reporting company as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take
advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements.
We will remain a smaller reporting company until the last day of the fiscal year in which (1) the market value of our ordinary shares
held by non-affiliates is equal to or exceeds $250 million as of the prior June 30, or (2) our annual revenues equaled or exceeded $100
million during such completed fiscal year and the market value of our ordinary shares held by non-affiliates is equal to or exceeds $700
million as of the prior June 30.
12
In
addition, prior to the consummation of a Business Combination, only holders of our Class B Ordinary Shares will have the right to vote
on the appointment or removal of directors. As a result, Nasdaq will consider us to be a controlled company within the
meaning of Nasdaq corporate governance standards. Under Nasdaq corporate governance standards, a company of which more than 50% of the
voting power for the appointment of directors is held by an individual, group or another company is a controlled company
and may elect not to comply with certain corporate governance requirements. We currently do not intend to rely on the controlled
company exemption, but may do so in the future. Accordingly, if we choose to do so, you will not have the same protections afforded
to shareholders of companies that are subject to all of the Nasdaq corporate governance requirements.
Item
1A. Risk Factors
*An
investment in our securities involves a high degree of risk. You should consider carefully all of the risks described below, together
with the other information contained in this Form 10-K. If any of the following events occur, our business, financial condition and operating
results may be materially adversely affected. In that event, the trading price of our securities could decline, and you could lose all
or part of your investment.*
Risks
Relating to our Search for, Consummation of*,* or Inability to Consummate, a *Business Combination*
**
*Our
shareholders may not be afforded an opportunity to vote on our proposed initial Business Combination, and even if we hold a vote, holders
of our Founder Shares will participate in such vote, which means we may complete our initial Business Combination even though a majority
of our Public Shareholders do not support such a combination.*
We
may choose not to hold a shareholder vote to approve our initial Business Combination if the Business Combination would not require shareholder
approval under applicable law or stock exchange listing requirement. Except for as required by applicable law or stock exchange requirement,
the decision as to whether we will seek shareholder approval of a proposed Business Combination or will allow shareholders to sell their
shares to us in a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors, such as the timing
of the transaction and whether the terms of the transaction would otherwise require us to seek shareholder approval. Even if we seek
shareholder approval, the holders of our Founder Shares will participate in the vote on such approval. Accordingly, we may complete our
initial Business Combination even if a majority of our Public Shareholders do not approve of the Business Combination we complete. Please
see the risk factor entitled *Our shareholders may not be afforded an opportunity to vote on our proposed initial Business
Combination, and even if we hold a vote, holders of our Founder Shares will participate in such vote, which means we may complete our
initial Business Combination even though a majority of our Public Shareholders do not support such a combination* for additional
information.
**
*If
we seek shareholder approval of our initial Business Combination, our initial shareholders and management team have agreed to vote in
favor of such initial Business Combination, regardless of how our Public Shareholders vote, and we may not need any Public Shares in
addition to our Founder Shares to be voted in favor of an initial Business Combination in order to approve an initial Business Combination.*
Our
initial shareholders own 25% of our issued and outstanding ordinary shares. Our initial shareholders and management team also may from
time-to-time purchase Class A Ordinary Shares prior to our initial Business Combination. Our amended and restated memorandum and articles
of association provide that, if we seek shareholder approval of an initial Business Combination, such initial Business Combination will
be approved if we obtain the approval of an ordinary resolution under Cayman Islands law and our amended and restated memorandum and
articles of association, which requires the affirmative vote of at least a simple majority of the votes cast by such shareholders as,
being entitled to do so, voting together as a single class, vote in person or, where proxies are allowed, by proxy at the applicable
general meeting of the Company. As a result, in addition to our initial shareholders Founder Shares, we would need 5,744,250 or
33.3%, of the 17,250,000 Public Shares sold in our IPO to be voted in favor of an initial Business Combination in order to have our initial
Business Combination approved (assuming all outstanding shares are voted). Assuming that only the holders of one-third of our issued
and outstanding ordinary shares, representing a quorum under our amended and restated memorandum and articles of association, vote their
ordinary shares at a general meeting of the Company, we will not need any Public Shares in addition to our Founder Shares to be voted
in favor of an initial Business Combination in order to approve an initial Business Combination. However, if our initial Business Combination
is structured as a statutory merger or consolidation with another company under Cayman Islands law, the approval of our initial Business
Combination will require the approval of a special resolution, which requires the affirmative vote of at least two-thirds of the votes
cast by such shareholders as, being entitled to do so, vote in person or, where proxies are allowed, by proxy at the applicable general
meeting of the Company, or by a unanimous written resolution passed in accordance with the Companies Act (As Revised) of the Cayman Islands,
as amended from time to time (the Companies Act). Assuming all outstanding shares are voted at an extraordinary general
meeting of the Company, we will need 9,584,100, or 55.56%, of the 17,250,000 Public Shares sold in our IPO, in addition to our Founder
Shares to be voted in favor of an initial Business Combination in order to approve an initial Business Combination. Assuming that only
the holders of one-third of our issued and outstanding ordinary shares, representing a quorum under our amended and restated memorandum
and articles of association, vote their ordinary shares at an extraordinary general meeting of the Company, we will not need any Public
Shares in addition to our Founder Shares to be voted in favor of an initial Business Combination in order to approve an initial Business
Combination. Accordingly, if we seek shareholder approval of our initial Business Combination, the agreement by our initial shareholders
and management team to vote in favor of our initial Business Combination will increase the likelihood that an ordinary resolution will
be passed, being the requisite shareholder approval for such initial Business Combination.
**
13
**
*Your
only opportunity to effect your investment decision regarding a potential Business Combination may be limited to the exercise of your
right to redeem your shares from us for cash.*
At
the time of your investment in us, you will 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 shareholder approval, Public Shareholders
may not have the right or opportunity to vote on the Business Combination, unless we seek such shareholder vote. Accordingly, your only
opportunity to effect your 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
Shareholders in which we describe our initial Business Combination. The per share amount we will distribute to shareholders who properly
exercise their redemption rights will not be reduced by the deferred underwriting commissions and after such redemptions, the per-share
value of shares held by non-redeeming shareholders will reflect our obligation to pay the deferred underwriting commissions.
**
*The
ability of our Public Shareholders to redeem their shares for cash may make our financial condition unattractive to potential Business
Combination targets, which may make it difficult for us to enter into a Business Combination with a target.*
We
may seek to enter into a Business Combination transaction agreement with a minimum cash requirement for (i) cash consideration to be
paid to the target or its owners, (ii) cash for working capital or other general corporate purposes or (iii) the retention of cash to
satisfy other conditions. If too many Public Shareholders exercise their redemption rights, we would not be able to meet such closing
condition and, as a result, would not be able to proceed with the Business Combination. Consequently, if accepting all properly submitted
redemption requests would not allow us to satisfy a closing condition as described above, we would not proceed with such redemption and
the related Business Combination and may instead search for an alternate Business Combination. Prospective targets will be aware of these
risks and, thus, may be reluctant to enter into a Business Combination transaction with us.
**
*The
ability of our Public Shareholders to exercise redemption rights with respect to a large number of our shares and the amount of deferred
underwriting compensation may not allow us to complete the most desirable Business Combination or optimize our capital structure, and
may substantially dilute your investment in us.*
At
the time we enter into an agreement for our initial Business Combination, we will not know how many shareholders may exercise their redemption
rights, and therefore will need to structure the transaction based on our expectations as to the number of shares that will be submitted
for redemption. If 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. Furthermore, this dilution would increase to the extent that the anti-dilution provision
of the Class B Ordinary Shares results in the issuance of Class A Ordinary Shares on a greater than one-to-one basis upon conversion
of the Class B Ordinary Shares at the time of our initial Business Combination. The above considerations may limit our ability to complete
the most desirable Business Combination available to us or optimize our capital structure. As a result, our obligations to redeem Public
Shares for which redemption is requested and to pay the deferred underwriting commissions may not allow us to complete the most desirable
Business Combination or optimize our capital structure.
In
addition, raising additional third-party financing may involve dilutive equity issuances or the incurrence of indebtedness at higher
than desirable levels. Furthermore, this dilution would increase to the extent that the anti-dilution provisions of the Class B Ordinary
Shares result in the issuance of Class A Ordinary Shares on a greater than one-to-one basis upon conversion of the Class B Ordinary Shares
at the time of our Business Combination. The above considerations may limit our ability to complete the most desirable Business Combination
available to us or optimize our capital structure and may result in substantial dilution from your purchase of our Class A Ordinary Shares.
The effect of this dilution will be greater for shareholders who do not redeem. We may not be able to generate sufficient value from
the completion of our initial Business Combination in order to overcome the dilutive impact of these and other factors, and, accordingly,
you may incur a net loss on your investment. Please see *Risks Relating to Our Securities The nominal purchase
price paid by our Sponsor for the Founder Shares may result in significant dilution to the implied value of your Public
Shares upon the consummation of our 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 ordinary shares to materially decline.*
**
14
**
*The
ability of our Public Shareholders to exercise redemption rights with respect to a large number of our shares could increase the probability
that our initial Business Combination would be unsuccessful and that you would have to wait for liquidation in order to redeem your shares.*
If
our initial Business Combination agreement requires us to use a portion of the cash in the Trust Account to pay the purchase price, or
requires us to have a minimum amount of cash at closing, the probability that our initial Business Combination would be unsuccessful
is increased. If our initial Business Combination is unsuccessful, you would not receive your pro rata portion of the funds in the Trust
Account until we liquidate the Trust Account. If you are in need of immediate liquidity, you could attempt to sell your shares in the
open market; however, at such time our shares may trade at a discount to the pro rata amount per share in the Trust Account. In either
situation, you may suffer a material loss on your investment or lose the benefit of funds expected in connection with your exercise of
redemption rights until we liquidate or you are able to sell your shares in the open market.
**
*The
requirement that we complete our initial Business Combination within the Completion Window may give potential target businesses leverage
over us in negotiating a Business Combination and may limit the time we have in which to conduct due diligence on potential Business
Combination targets, in particular as we approach our dissolution deadline, which could undermine our ability to complete our initial
Business Combination on terms that would produce value for our shareholders.*
Any
potential target business with which we enter into negotiations concerning a Business Combination will be aware that we must complete
our initial Business Combination within the Completion Window. Consequently, such target business may obtain leverage over us in negotiating
a Business Combination, knowing that if we do not complete our initial Business Combination with that particular target business, we
may be unable to complete our initial Business Combination with any target business. This risk will increase as we get closer to the
timeframe described above. In addition, we may have limited time to conduct due diligence and may enter into our initial Business Combination
on terms that we would have rejected upon a more comprehensive investigation. The length of time it may take us to complete our diligence
and negotiate a Business Combination may reduce the amount of time available for us to ultimately complete an initial Business Combination
should such diligence or negotiations not lead to a consummated initial Business Combination.
**
*We
may engage our underwriter or one of its affiliates to provide additional services to us after our IPO, which may include acting as an
M&A advisor in connection with an initial Business Combination or as placement agent in connection with a related financing transaction.
Our underwriter is entitled to receive deferred underwriting commissions that will be released from the Trust Account only upon a completion
of an initial Business Combination. These financial incentives may cause it to have potential conflicts of interest in rendering any
such additional services to us after our IPO, including, for example, in connection with the sourcing and consummation of an initial
Business Combination.*
We
may engage our underwriter or one of its affiliates to provide additional services to us after our IPO, including, for example, identifying
potential targets, providing M&A advisory services, acting as a placement agent in a private offering or arranging debt financing
transactions. We may pay our underwriter or its affiliate fair and reasonable fees or other compensation that would be determined at
that time in an arms length negotiation. The underwriter is also entitled to receive deferred underwriting commissions that are
conditioned on the completion of an initial Business Combination. The underwriter or its affiliates financial interests tied to
the consummation of a Business Combination transaction may give rise to potential conflicts of interest in providing any such additional
services to us, including potential conflicts of interest in connection with the sourcing and consummation of an initial Business Combination.
**
15
**
*We
may not be able to complete our initial Business Combination within the Completion Window, in which case we would cease all operations
except for the purpose of winding up and we would redeem our Public Shares.*
We
may not be able to find a suitable target business and complete our initial Business Combination within the Completion Window. In recent
years, a number of SPACs have liquidated due to an inability to complete an initial Business Combination within their allotted time periods.
Furthermore, our ability to complete our initial Business Combination may be negatively impacted by general market conditions, volatility
in the capital and debt markets and the other risks described herein, including the impact of events such as the conflict between Russia
and Ukraine and the war between Israel and Hamas. If we have not completed our initial Business Combination within such time period,
we will: as promptly as reasonably possible but not more than ten business days thereafter (and subject to lawfully available funds therefor),
redeem the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account,
including interest earned on the funds held in the Trust Account (which interest shall be net of taxes paid or payable and up to $100,000
of interest to pay liquidation expenses), divided by the number of issued and outstanding Public Shares, which redemption will completely
extinguish Public Shareholders rights as shareholders (including the right to receive further liquidating distributions, if any),
subject to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law.
In such case, our Public Shareholders may only receive $10.00 per share, or possibly less, and our warrants will expire without value
to the holder. In certain circumstances, our Public Shareholders may receive less than $10.00 per share on the redemption of their shares.
See *If third parties bring claims against us, the proceeds held in the Trust Account could be reduced and the per-share
redemption amount received by shareholders may be less than $10.00 per share for more information*.
**
*We
may decide not to extend the term we have to consummate our initial Business Combination, in which case we would redeem our Public Shares,
and the warrants may be worthless.*
We
have until the end of the Completion Window to consummate our initial Business Combination. If we anticipate that we may be unable to
consummate our initial Business Combination within such period, we may seek shareholder approval to amend our amended and restated memorandum
and articles of association to extend the date by which we must consummate our initial Business Combination. However, we may decide not
to seek to extend the date by which we must consummate our initial Business Combination. If we do not seek to extend the date by which
we must consummate our initial Business Combination, and we are unable to consummate our initial Business Combination within the applicable
time period, we will as promptly as reasonably possible but not more than ten business days thereafter (and subject to lawfully available
funds therefor), redeem the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the
Trust Account, including interest earned on the funds held in the Trust Account (which interest shall be net of taxes paid or payable
and up to $100,000 for dissolution expenses), divided by the number of issued and outstanding Public Shares, which redemption will completely
extinguish Public Shareholders rights as shareholders (including the right to receive further liquidating distributions, if any),
subject to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law.
In such event, the warrants may be worthless.
**
*If
we seek shareholder approval of our initial Business Combination, our Sponsor, initial shareholders, directors, executive officers and
their affiliates may elect to purchase shares or Public Warrants from Public Shareholders, which may influence a vote on a proposed Business
Combination and reduce the public float of our securities.*
If
we seek shareholder approval of our initial Business Combination and we do not conduct redemptions in connection with our initial Business
Combination pursuant to the tender offer rules, our Sponsor, initial shareholders, directors, executive officers or their affiliates
may purchase Public Shares or warrants in privately negotiated transactions or in the open market either prior to or following the completion
of our initial Business Combination, although they are under no obligation to do so. Such a purchase may include a contractual acknowledgment
that such shareholder, although still the record holder of our shares, is no longer the beneficial owner thereof and therefore agrees
not to exercise its redemption rights. In the event that our Sponsor, initial shareholders, directors, executive officers or their affiliates
purchase shares in privately negotiated transactions from Public Shareholders who have already elected to exercise their redemption rights,
such selling shareholders would be required to revoke their prior elections to redeem their shares. It is intended that, if Rule 10b-18
would apply to purchases by our Sponsor, initial shareholders, directors, officers and their affiliates, then such purchases will comply
with Rule 10b-18 under the Exchange Act, to the extent it applies, which provides a safe harbor for purchases made under certain conditions,
including with respect to timing, pricing and volume of purchases.
16
Additionally,
at any time at or prior to our initial Business Combination, subject to applicable securities laws (including with respect to material
nonpublic information), our Sponsor, initial shareholders, directors, officers and their affiliates may enter into transactions with
investors and others to provide them with incentives to acquire Public Shares, vote their Public Shares in favor of our initial Business
Combination or not redeem their Public Shares. However, they have no current commitments, plans or intentions to engage in such transactions
and have not formulated any terms or conditions for any such transactions. None of the funds in the Trust Account will be used to purchase
Public Shares, rights or warrants in such transactions.
The
purpose of any such transactions could be to (i) increase the likelihood of obtaining shareholder approval of the Business Combination,
(ii) reduce the number of Public Warrants outstanding and/or increase the likelihood of approval on any matters submitted to the Public
Warrant holders for approval in connection with our initial Business Combination or (iii) 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. 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 securities may be reduced and the number of beneficial holders
of our securities may be reduced, which may make it difficult to maintain or obtain the quotation, listing or trading of our securities
on a national securities exchange. Any such purchases will be reported pursuant to Section 13 and Section 16 of the Exchange Act to the
extent such purchasers are subject to such reporting requirements. Additionally, in the event our Sponsor, initial shareholders, directors,
officers and their affiliates were to purchase Public Shares or warrants from Public Shareholders after the announcement of our initial
Business Combination, such purchases would be structured in compliance with the requirements of Rule 14e-5 under the Exchange Act including,
in pertinent part, through adherence to the following:
|
| our
registration statement/proxy statement filed for our Business Combination transaction would
disclose the possibility that our Sponsor, initial shareholders, directors, officers and
their affiliates may purchase Public Shares or warrants from Public Shareholders outside
the redemption process, along with the purpose of such purchases; | |
|
| if
our Sponsor, initial shareholders, directors, officers and their affiliates were to purchase
Public Shares or warrants from Public Shareholders, they would do so at a price no higher
than the price offered through our redemption process; | |
|
| our
registration statement/proxy statement filed for our Business Combination transaction would
include a representation that any of our securities purchased by our Sponsor, initial shareholders,
directors, officers and their affiliates would not be voted in favor of approving the Business
Combination transaction; | |
|
| our
Sponsor, initial shareholders, directors, officers and their affiliates would not possess
any redemption rights with respect to our securities or, if they do acquire and possess redemption
rights, they would waive such rights; and | |
17
|
| we
would disclose in a Form 8-K, before our security holder meeting to approve the Business
Combination transaction, the following material items: | |
|
| the
amount of our securities purchased outside of the redemption offer by our Sponsor, initial
shareholders, directors, officers and their affiliates, along with the purchase price; | |
|
| the
purpose of the purchases by our Sponsor, initial shareholders, directors, officers and their
affiliates; | |
|
| the
impact, if any, of the purchases by our Sponsor, initial shareholders, directors, officers
and their affiliates on the likelihood that the Business Combination transaction will be
approved; | |
|
| the
identities of our security holders who sold to our Sponsor, initial shareholders, directors,
officers and their affiliates (if not purchased on the open market) or the nature of our
security holders (e.g., 5% security holders) who sold to our Sponsor, initial shareholders,
directors, officers and their affiliates; and | |
|
| the
number of our securities for which we have received redemption requests pursuant to our redemption
offer. | |
**
*If
a shareholder fails to receive notice of our offer to redeem our Public Shares in connection with our initial Business Combination, or
fails to comply with the procedures for tendering its shares, such shares may not be redeemed.*
We
will comply with the proxy rules or tender offer rules, as applicable, when conducting redemptions in connection with our initial Business
Combination. Despite our compliance with these rules, if a shareholder fails to receive our proxy materials or tender offer documents,
as applicable, such shareholder 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 Shareholders seeking to exercise their redemption rights, whether they are record holders or
hold their shares in street name, to, at the holders option, either deliver their share certificates to our transfer
agent, or 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 scheduled vote on the
proposal to approve the initial Business Combination. In addition, if we conduct redemptions in connection with a shareholder vote, we
intend to require a Public Shareholder seeking redemption of its Public Shares to also submit a written request for redemption to our
transfer agent two business days prior to the scheduled vote in which the name of the beneficial owner of such shares is included. In
the event that a shareholder fails to comply with these or any other procedures disclosed in the proxy materials or tender offer documents,
as applicable, its shares may not be redeemed.
**
*You
will not be entitled to protections normally afforded to investors of other blank check companies subject to Rule 419 of the Securities
Act.*
Since
the net proceeds of the IPO and the sale of the Private Placement Warrants are intended to be used to complete one or more initial Business
Combinations with a target business or businesses that have not been selected, we may be deemed to be a blank check company
under the United States securities laws. However, 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 we will have a longer period of time to complete our respective initial Business Combinations than do companies subject to
Rule 419.
Moreover,
if the IPO had been 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.
**
*If
we seek shareholder approval of our initial Business Combination and we do not conduct redemptions pursuant to the tender offer rules,
and if you or a group of shareholders are deemed to hold in excess of 15% of our Class A Ordinary Shares, you may lose
the ability to redeem all such shares in excess of 15% of our Class A Ordinary Shares.*
If
we seek shareholder approval of our initial Business Combination and we do not conduct redemptions in connection with our initial Business
Combination pursuant to the tender offer rules, our amended and restated memorandum and articles of association provides that a Public
Shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as
a group (as defined under Section 13 of the Exchange Act), will be restricted from redeeming its shares with respect to
more than an aggregate of 15% of the then outstanding Excess Shares without our prior consent. However, we would not be restricting our
shareholders ability to vote all of their shares (including Excess Shares) for or against our initial Business Combination. Your
inability to redeem the Excess Shares will reduce your influence over our ability to complete our initial Business Combination and you
could suffer a material loss on your investment in us if you sell Excess Shares in open market transactions. Additionally, you will not
receive redemption distributions with respect to the Excess Shares if we complete our initial Business Combination. And as a result,
you will continue to hold that number of shares exceeding 15% and, in order to dispose of such shares, would be required to sell your
shares in open market transactions, potentially at a loss.
**
18
**
*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 Shareholders may receive
only their pro rata portion of the funds in the Trust Account that are available for distribution to Public Shareholders, 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 are 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 IPO and the sale of the Private Placement Warrants,
our ability to compete with respect to the acquisition of certain target businesses that are sizable will be limited by our available
financial resources. This inherent competitive limitation gives others an advantage in pursuing the acquisition of certain target businesses.
Furthermore, we are obligated to offer holders of our Public Shares the right to redeem their shares for cash at the time of our initial
Business Combination in conjunction with a shareholder vote or via a tender offer. Target companies will be aware that this may reduce
the resources available to us for our initial Business Combination. Any of these obligations may place us at a competitive disadvantage
in successfully negotiating a Business Combination. If we are unable to complete our initial Business Combination, our Public Shareholders
may receive only their pro rata portion of the funds in the Trust Account that are available for distribution to Public Shareholders,
and our warrants will expire worthless.
**
*If
the net proceeds of the IPO and the sale of the Private Placement Warrants not being held in the Trust Account are insufficient to allow
us to operate for at least the duration of the Completion Window, it could limit the amount available to fund our search for a target
business or businesses and complete our initial Business Combination, and we will depend on loans from our Sponsor or management team
to fund our search and to complete our initial Business Combination.*
As
of December 31, 2025, $1,247,831 was available to us outside the Trust Account to fund our working capital requirements. We believe that
the funds available to us outside of the Trust Account will be sufficient to allow us to operate for at least the duration of the Completion
Window; however, we cannot assure you that our estimate is accurate. Of the funds available to us, we could use a portion of the funds
available to us to pay fees to consultants to assist us with our search for a target business. We could also use a portion of the funds
as a down payment or to fund a no-shop provision (a provision in letters of intent 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.
If
we are required to seek additional capital, we would need to borrow funds from our Sponsor, management team or other third parties to
operate or may be forced to liquidate.
Neither
our Sponsor, members of our management team nor any of their affiliates is under any obligation to advance funds to us in such circumstances.
Any such advances would be repaid only from funds held outside the Trust Account or from funds released to us upon completion of our
initial Business Combination. Up to $1,500,000 of such loans may be convertible into Private Placement Warrants of the post-Business
Combination entity at a price of $1.00 per warrant, at the option of the lender. The warrants would be identical to the Private Placement
Warrants, including as to exercisability and exercise price. Prior to the completion of our initial Business Combination, we do not expect
to seek loans from parties other than our Sponsor or an affiliate of our Sponsor as we do not believe third parties will be willing to
loan such funds and provide a waiver against any and all rights to seek access to funds in our Trust Account. 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 liquidate the Trust Account.
Consequently, our Public Shareholders may only receive an estimated $10.00 per share, or possibly less, on our redemption of our Public
Shares, and our warrants will expire worthless.
**
19
**
*If
third parties bring claims against us, the proceeds held in the Trust Account could be reduced and the per-share redemption amount received
by shareholders may be less than $10.00 per share.*
Our
placing of funds in the Trust Account may not protect those funds from third party claims against us. Although we will seek to have all
vendors, service providers (except for our independent registered public accounting firm), prospective target businesses and other entities
with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held
in the Trust Account for the benefit of our Public Shareholders, such parties may not execute such agreements, or even if they execute
such agreements they may not be prevented from bringing claims against the Trust Account, including, but not limited to, fraudulent inducement,
breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case
in order to gain advantage with respect to a claim against our assets, including the funds held in the Trust Account. If any third party
refuses to execute an agreement waiving such claims to the monies held in the Trust Account, our management will 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. WithumSmith+Brown, PC, our independent
registered public accounting firm, and the underwriter of the IPO will not execute agreements with us waiving such claims to the monies
held in the Trust Account.
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 Shareholders could be less than the $10.00 per Public Share initially held in the Trust Account, due to claims of
such creditors. Pursuant to the letter agreement, our Sponsor has agreed that it will be liable to us if and to the extent any claims
by a third party for services rendered or products sold to us (except for the Companys independent registered public accounting
firm), or a prospective target business with which we have entered into a written letter of intent, confidentiality or other similar
agreement or Business Combination agreement, reduce the amount of funds in the Trust Account to below the lesser of (i) $10.00 per Public
Share and (ii) the actual amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account, if
less than $10.00 per Public Share due to reductions in the value of the trust assets, in each case less taxes paid or payable and up
to $100,000 of interest to pay liquidation expenses, 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 underwriter of the IPO against certain liabilities, including liabilities
under the Securities Act. However, we have not asked our Sponsor to reserve for such indemnification obligations, nor have we independently
verified whether our Sponsor has sufficient funds to satisfy its indemnity obligations and we believe that our Sponsors only assets
are securities of our company. Therefore, we cannot assure you that our Sponsor would be able to satisfy those obligations. As a result,
if any such claims were successfully made against the Trust Account, the funds available for our initial Business Combination and redemptions
could be reduced to less than $10.00 per Public Share. In such event, we may not be able to complete our initial Business Combination,
and you would receive such lesser amount per share in connection with any redemption of your Public Shares. None of our officers or directors
will indemnify us for claims by third parties including, without limitation, claims by vendors and prospective target businesses.
**
*Our
directors may decide not to enforce the indemnification obligations of our Sponsor, resulting in a reduction in the amount of funds in
the Trust Account available for distribution to our Public Shareholders.*
In
the event that the proceeds in the Trust Account are reduced below the lesser of (i) $10.00 per Public Share and (ii) the actual amount
per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account if less than $10.00 per Public Share
due to reductions in the value of the trust assets, in each case less taxes paid or payable and up to $100,000 of interest to pay liquidation
expenses, and our Sponsor asserts that it is unable to satisfy its obligations or that it has no indemnification obligations related
to a particular claim, our independent directors would determine whether to take legal action against our Sponsor to enforce its indemnification
obligations. While we currently expect that our independent directors would take legal action on our behalf against our Sponsor to enforce
its indemnification obligations to us, it is possible that our independent directors in exercising their business judgment and subject
to their fiduciary duties may choose not to do so in any particular instance. If our independent directors choose not to enforce these
indemnification obligations, the amount of funds in the Trust Account available for distribution to our Public Shareholders may be reduced
below $10.00 per Public Share.
**
20
**
*We
may not have sufficient funds to satisfy indemnification claims of our directors and officers.*
We
have agreed to indemnify our officers and directors to the fullest extent permitted by law, including for any liability incurred in their
capacities as such, except through their own actual fraud, willful default or willful neglect. 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 (except to the extent they are entitled to funds from the Trust Account due to their ownership
of Public Shares). Accordingly, any indemnification provided will be able to be satisfied by us only if (i) we have sufficient funds
outside of the Trust Account or (ii) we consummate an initial Business Combination. Our obligation to indemnify our officers and directors
may discourage shareholders from bringing a lawsuit against our officers or directors for breach of their fiduciary duty. These provisions
also may have the effect of reducing the likelihood of derivative litigation against our officers and directors, even though such an
action, if successful, might otherwise benefit us and our shareholders. Furthermore, a shareholders investment may be adversely
affected to the extent we pay the costs of settlement and damage awards against our officers and directors pursuant to these indemnification
provisions.
**
*If,
after we distribute the proceeds in the Trust Account to our Public Shareholders, we file a bankruptcy or winding-up petition or an involuntary
bankruptcy or winding-up petition is filed against us that is not dismissed, a liquidator or a bankruptcy, insolvency or other 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 us or our creditors, thereby exposing the members of our board of directors and us to claims of punitive damages**.*
If,
after we distribute the proceeds in the Trust Account to our Public Shareholders, we file a bankruptcy or winding-up petition or an involuntary
bankruptcy or winding-up petition is filed against us that is not dismissed, any distributions received by shareholders could be viewed
under applicable debtor/creditor and/or bankruptcy/insolvency laws as either a preferential transfer or a fraudulent
conveyance, preference or disposition. As a result, a liquidator or a bankruptcy, insolvency or other court could seek to recover
some or all amounts received by our shareholders. In addition, our board of directors may be viewed as having breached its fiduciary
duty to us or our creditors and/or having acted in bad faith, by paying Public Shareholders 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 Shareholders, we file a bankruptcy or winding-up petition or an involuntary
bankruptcy or winding-up petition is filed against us that is not dismissed, the claims of creditors in such proceeding may have priority
over the claims of our shareholders and the per-share amount that would otherwise be received by our shareholders in connection with
our liquidation may be reduced.*
If,
before distributing the proceeds in the Trust Account to our Public Shareholders, we file a bankruptcy or winding-up petition or an involuntary
bankruptcy or winding-up petition is filed against us that is not dismissed, the proceeds held in the Trust Account could be subject
to applicable bankruptcy or insolvency law, and may be included in our bankruptcy or insolvency estate and subject to the claims of third
parties with priority over the claims of our shareholders. To the extent any bankruptcy or insolvency claims deplete the Trust Account,
the per-share amount that would otherwise be received by our shareholders in connection with our dissolution may be reduced.
**
*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 numerous complex tax laws. 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.
On
January 24, 2024, the SEC adopted a series of new rules relating to SPACs (the SPAC Rules) requiring, among other items,
(i) additional disclosures relating to SPAC Business Combination transactions; (ii) additional disclosures relating to dilution and to
conflicts of interest involving sponsors and their affiliates in both SPAC initial public offerings and de-SPAC transactions; (iii) the
use of projections by SPACs in SEC filings in connection with proposed Business Combination transactions; and (iv) both the SPAC and
the target companys status as co-registrants on de-SPAC registration statements.
In
addition, the SECs adopting release provided guidance describing circumstances in which a SPAC could become subject to regulation
under the Investment Company Act, including its duration, asset composition, business purpose, and the activities of the SPAC and its
management team in furtherance of such goals.
21
Compliance
with the SPAC Rules and related guidance may increase the costs of and the time needed to negotiate and complete an initial Business
Combination and may constrain the circumstances under which we could complete an initial Business Combination.
**
*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.*
As
described in the risk factor above entitled *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*,
the SECs adopting release with respect to the SPAC Rules provided guidance describing the extent to which SPACs could become subject
to regulation under the Investment Company Act and the regulations thereunder. Whether a SPAC is an investment company will be a question
of facts and circumstances. If our facts and circumstances change over time, we will update our disclosure to reflect how those changes
impact the risk that we may be considered to be operating as an unregistered investment company. We can give no assurance that a claim
will not be made that we have been operating as an unregistered investment company.
If
we are deemed to be an investment company under the Investment Company Act, we may have to change our operations, wind down our operations,
or register as an investment company under the Investment Company Act. Our activities may be restricted, including:
|
| restrictions
on the nature of our investments; and | |
|
| restrictions
on the issuance of securities, each of which may make it difficult for us to complete our
initial Business Combination. | |
In
addition, we may have imposed upon us burdensome requirements, including:
|
| adoption
of a specific form of corporate structure; and | |
|
| reporting,
record keeping, voting, proxy and disclosure requirements and other rules and regulations. | |
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 in securities and that our activities
do not include investing, reinvesting, owning, holding or trading investment securities constituting more than 40% of our
total 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 intend
to spend a considerable amount of time actively managing the assets in the Trust Account for the primary purpose of achieving investment
returns. We do not plan to buy businesses or assets with a view to resale or profit from their resale. We do not plan to buy unrelated
businesses or assets or to be a passive investor.
We
do not believe that our anticipated principal activities will subject us to the Investment Company Act. To this end, the proceeds held
in the Trust Account may only be held as cash, including in demand deposit accounts at a bank, or invested in U.S. government
securities within the meaning of 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; the holding of these assets in this form is intended to be temporary and for the sole purpose of facilitating
the intended Business Combination and may at any time be held as cash or cash items, including in demand deposit accounts at a bank.
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. Investing in our securities 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: (i) the completion of our initial Business Combination; (ii) the redemption of any Public Shares properly
submitted in connection with an amendment of our amended and restated memorandum and articles of association (A) to modify the substance
or timing of our obligation to provide for the redemption of our Public Shares in connection with an initial Business Combination or
to redeem 100% of our Public Shares if we have not consummated our initial Business Combination within the Completion Window or (B) with
respect to any other material provisions relating to shareholders rights or pre-initial Business Combination activity; or (iii)
absent an initial Business Combination within the Completion Window, our return of the funds held in the Trust Account to our Public
Shareholders as part of our redemption of the Public Shares. If we do not invest the proceeds as discussed above, we may be deemed to
be subject to the Investment Company Act.
22
Further, under the subjective test of a investment
company pursuant to Section 3(a)(1)(A) of the Investment Company Act, even if the funds deposited in the Trust Account were invested
in the assets discussed above (U.S. government securities or money market funds registered under the Investment Company Act), such assets,
other than cash, are securities for purposes of the Investment Company Act and, therefore, nevertheless, there is a risk
that we could be deemed an unregistered investment company and subject to the Investment Company Act at any time.
In the adopting release for the SPAC Rules, the
SEC provided guidance that a SPACs potential status as an investment company depends on a variety of factors, such
as a SPACs duration, asset composition, business purpose and activities and is a question of facts and circumstances
requiring individualized analysis. If we were deemed to be an unregistered investment company and subject to compliance with and regulation
under the Investment Company Act, we would be subject to additional regulatory burdens and expenses for which we have not allotted funds.
Unless we are able to modify our activities so that we would not be deemed an investment company, we would either register as an investment
company or wind-down and abandon our efforts to complete a Business Combination and instead liquidate the Trust Account. As a result,
our Public Shareholders may only receive their pro rata portion of the funds in the Trust Account that are available for distribution
to Public Shareholders and would be unable to realize the potential benefits of an initial Business Combination, including the possible
appreciation of the combined companys securities.
**
*To mitigate the risk that we might be deemed
to be an investment company for purposes of the Investment Company Act, we may, at any time, instruct the trustee to liquidate the securities
held in the Trust Account and instead to hold the funds in the Trust Account in cash until the earlier of the consummation of our initial
Business Combination or our dissolution. As a result, following the liquidation of securities in the Trust Account, the interest earned
on the funds held in the Trust Account may be materially reduced, which would reduce the dollar amount our Public Shareholders would
receive upon any redemption or dissolution of the Company.*
We hold the funds in the Trust Account as cash,
including in demand deposit accounts at a bank, or in U.S. government treasury obligations with a maturity of 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. U.S. government treasury obligations are considered securities for purposes of the Investment Company
Act, while cash is not. As noted above, one of the factors the SEC identified as relevant to the determination of whether a SPAC which
holds securities could potentially be deemed an investment company under the Investment Company Act is the SPACs
duration. To mitigate the risk of us being deemed to be an unregistered investment company (including under the subjective test of Section
3(a)(1)(A) of the Investment Company Act) and thus subject to regulation under the Investment Company Act, we may, at any time, instruct
Efficiency, the trustee with respect to the Trust Account, to liquidate the U.S. government treasury obligations or money market funds
held in the Trust Account and thereafter to hold all funds in the Trust Account in cash until the earlier of consummation of our initial
Business Combination or dissolution of the Company. Following such dissolution, the rate of interest we receive on the funds held in
the Trust Account may be materially decreased. However, interest previously earned on the funds held in the Trust Account still may be
released to us to pay our taxes, if any (excluding any Excise Tax, or similar tax, imposed on us). As a result, any decision to liquidate
the securities held in the Trust Account and thereafter to hold all funds in the Trust Account in cash would reduce the dollar amount
our Public Shareholders would receive upon any redemption or dissolution of the Company.
**
23
*Our search for an initial Business Combination,
and any target business with which we may ultimately consummate an initial Business Combination, may be materially adversely affected
by current global geopolitical conditions resulting from the ongoing Russia-Ukraine conflict and the recent escalation of conflict in
the Middle East and Southwest Asia, including the recent conflict involving the United States, Israel and Iran.*
United States and global markets are experiencing
volatility and disruption following the geopolitical instability resulting from the ongoing Russia-Ukraine conflict and the recent escalation
of conflict in the Middle East and Southwest Asia. In response to the ongoing Russia-Ukraine conflict, the North Atlantic Treaty Organization
(NATO) deployed additional military forces to eastern Europe, and the United States, the United Kingdom, the European Union
and other countries have announced various sanctions and restrictive actions against Russia, Belarus and related individuals and entities,
including the removal of certain financial institutions from the Society for Worldwide Interbank Financial Telecommunication (SWIFT)
payment system. Certain countries, including the United States, have also provided and may continue to provide military aid or other
assistance to Ukraine and to Israel, or have undertaken or will undertake military strikes in Southwest Asia, increasing geopolitical
tensions among a number of nations. The invasion of Ukraine by Russia and the escalation of conflict in the Middle East and Southwest
Asia, including U.S. and Israeli strikes on Iran, and retaliatory strikes by Iran on, among others, Israel, Saudi Arabia, and the United Arab
Emirates, and the resulting measures that have been taken, and could be taken in the future, by NATO, the United States, the United Kingdom,
the European Union, Israel and its neighboring states and other countries have created global security concerns that could have a lasting
impact on regional and global economies. Although the length and impact of the ongoing conflicts are highly unpredictable, they could
lead to market disruptions, including significant volatility in commodity prices, credit and capital markets, as well as supply chain
interruptions and increased cyber-attacks against U.S. companies. Additionally, any resulting sanctions could adversely affect the global
economy and financial markets and lead to instability and lack of liquidity in capital markets.
Any of the above mentioned factors, or any other
negative impact on the global economy, capital markets or other geopolitical conditions resulting from the Russian invasion of Ukraine,
the escalation of conflict in the Middle East and Southwest Asia and subsequent sanctions or related actions, may lead to increased volume
and price volatility for publicly traded securities or could adversely affect our search for an initial Business Combination by adversely
affecting the operations or financial condition of potential target companies, any of which could make it more difficult for us to identify
a Business Combination target and consummate an initial Business Combination on acceptable commercial terms, or at all.
The extent and duration of the ongoing conflicts,
resulting sanctions and any related market disruptions are impossible to predict, but could be substantial, particularly if current or
new sanctions continue for an extended period of time or if geopolitical tensions result in expanded military operations on a global
scale. Any such disruptions may also have the effect of heightening many of the other risks described in this section. If these disruptions
or other matters of global concern continue for an extensive period of time, our ability to consummate an initial Business Combination
may be materially adversely affected.
**
*Our shareholders may be held liable for
claims by third parties against us to the extent of distributions received by them upon redemption of their shares.*
If we are forced to enter into an insolvent liquidation,
any distributions received by shareholders could be viewed as an unlawful payment if it was proved that immediately following the date
on which the distribution was made, we were unable to pay our debts as they fall due in the ordinary course of business. As a result,
a liquidator could seek to recover some or all amounts received by our shareholders. Furthermore, our directors may be viewed as having
breached their fiduciary duties to us or our creditors and/or may have acted in bad faith, thereby exposing themselves and our company
to claims, by paying Public Shareholders from the Trust Account prior to addressing the claims of creditors. We cannot assure you that
claims will not be brought against us for these reasons. We and our directors and officers who knowingly and willfully authorized or
permitted any distribution to be paid out of our share premium account while we were unable to pay our debts as they fall due in the
ordinary course of business would be guilty of an offence and may be liable to a fine of approximately $18,293 and to imprisonment for
five years in the Cayman Islands.
**
*We may not hold an annual general meeting
until after the consummation of our initial Business Combination, which could delay the opportunity for our Public Shareholders to discuss
company affairs with management, and the holders of our Class A Ordinary Shares will not have the right to vote on the appointment or
removal of directors or continuing the Company in a jurisdiction outside the Cayman Islands until after the consummation of our initial
Business Combination.*
In accordance with Nasdaq corporate governance
requirements, we are not required to hold an annual general meeting until no later than one year after our first fiscal year end following
our listing on Nasdaq. There is no requirement under the Companies Act for us to hold annual or extraordinary general meetings to appoint
directors. Until we hold an annual general meeting, Public Shareholders may not be afforded the opportunity to discuss company affairs
with management. In addition, as holders of our Class A Ordinary Shares, our Public Shareholders will not have the right to vote on the
appointment or removal of directors or continuing the Company in a jurisdiction outside the Cayman Islands until after the consummation
of our initial Business Combination.
**
24
**
*Because we are neither limited to evaluating
a target business in a particular industry sector nor have we selected any specific target businesses with which to pursue our initial
Business Combination, you will be unable to ascertain the merits or risks of any particular target businesss operations.*
Our efforts to identify a prospective initial
Business Combination target will not be limited to a particular industry, sector or geographic region. Our amended and restated memorandum
and articles of association prohibit us from effectuating a Business Combination solely with another blank check company or similar company
with nominal operations.
Because we have not yet selected any specific
target business with respect to a Business Combination, there is no basis to evaluate the possible merits or risks of any particular
target businesss operations, results of operations, cash flows, liquidity, financial condition or prospects. To the extent we
complete our initial Business Combination, we may be affected by numerous risks inherent in the business operations with which we combine.
For example, if we combine with a financially unstable business or an entity lacking an established record of sales or earnings, we may
be affected by the risks inherent in the business and operations of a financially unstable or a development stage entity. In recent years,
a number of target businesses have underperformed financially post-Business Combination. There are no assurances that the target business
with which we consummate our initial Business Combination will perform as anticipated. Although our officers and directors will endeavor
to evaluate the risks inherent in a particular target business, we cannot assure you that we will properly ascertain or assess all of
the significant risk factors or that we will have adequate time to complete due diligence. Furthermore, some of these risks may be outside
of our control and leave us with no ability to control or reduce the chances that those risks will adversely impact a target business.
We also cannot assure you that an investment in our Units will ultimately prove to be more favorable to investors than a direct investment,
if such opportunity were available, in a Business Combination target.
Accordingly, any shareholders or warrant holders
who choose to remain shareholders or warrant holders following the Business Combination could suffer a reduction in the value of their
securities. Such shareholders 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.
**
*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 securities will not ultimately prove to be less favorable to investors
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 contained in this Form 10-K 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 shareholders who choose to remain shareholders following our
initial Business Combination could suffer a reduction in the value of their shares. Such shareholders are unlikely to have a remedy for
such reduction in value.
**
25
*Although we have identified general criteria
and guidelines that we believe are important in evaluating prospective target businesses, we may enter into our initial Business Combination
with a target that does not meet such criteria and guidelines, and as a result, the target business with which we enter into our initial
Business Combination may not have attributes entirely consistent with our general criteria and guidelines.*
Although we have identified general criteria
and guidelines for evaluating prospective target businesses, it is possible that a target business with which we enter into our initial
Business Combination will not have all of these positive attributes. If we complete our initial Business Combination with a target that
does not meet some or all of these guidelines, such combination may not be as successful as a combination with a business that does meet
all of our general criteria and guidelines. In addition, if we announce a prospective Business Combination with a target that does not
meet our general criteria and guidelines, a greater number of shareholders may exercise their redemption rights, which may make it difficult
for us to meet any closing condition with a target business that requires us to have a minimum net worth or a certain amount of cash.
In addition, if shareholder approval of the transaction is required by applicable law or stock exchange listing requirements, or we decide
to obtain shareholder approval for business or other reasons, it may be more difficult for us to attain shareholder approval of our initial
Business Combination if the target business does not meet our general criteria and guidelines. If we have not completed our initial Business
Combination within the Completion Window, our Public Shareholders may only receive their pro rata portion of the funds in the Trust Account
that are available for distribution to Public Shareholders, and our warrants will expire worthless.
**
*We are not required to obtain an opinion
from an independent accounting or investment banking firm or from an independent entity that commonly renders valuation opinions, and
consequently, you may have no assurance from an independent source that the price we are paying for the business is fair to our shareholders
from a financial point of view.*
Unless we complete our initial Business Combination
with a company that is affiliated with our Sponsor, officers or directors (or their respective affiliates or related entities), we are
not required to obtain an opinion from an independent investment banking firm which is a member of FINRA or a valuation or appraisal
firm stating that the consideration to be paid by us in such an initial Business Combination is fair to our company from a financial
point of view. If no opinion is obtained, our shareholders will be relying on the judgment of our board of directors, who will determine
fair market value based on standards generally accepted by the financial community. Such standards used will be disclosed in our proxy
materials or tender offer documents, as applicable, related to our initial Business Combination; provided that such conversion of Founder
Shares will never occur on a less than one-for-one basis.
**
*We may issue additional Class A Ordinary
Shares or preference shares to complete our initial Business Combination or under an employee incentive plan after completion of our
initial Business Combination. We may also issue Class A Ordinary Shares upon the conversion of the Founder Shares at a ratio greater
than one-to-one at the time of our initial Business Combination as a result of the anti-dilution provisions contained therein. Any such
issuances would dilute the interest of our shareholders and likely present other risks**.*
Our amended and restated memorandum and articles
of association authorize the issuance of up to 500,000,000 Class A Ordinary Shares, par value $0.0001 per share, 50,000,000 Class B Ordinary
Shares, par value $0.0001 per share, and 5,000,000 preference shares, par value $0.0001 per share. As of the date of this Form 10-K,
there are 17,250,000 Class A Ordinary Shares, 5,750,000 Class B Ordinary Shares, and 14,075,000 warrants outstanding.
The Class B Ordinary Shares are automatically
convertible into Class A Ordinary Shares (which such Class A Ordinary Shares issued upon conversion will not have any redemption rights
or be entitled to liquidating distributions from the Trust Account if we fail to consummate an initial Business Combination) immediately
prior to, concurrently with or immediately following the consummation of our initial Business Combination or at any time prior thereto
at the option of the holder, initially at a one-for-one ratio but subject to adjustment as set forth herein and in our amended and restated
memorandum and articles of association, including in certain circumstances in which we issue Class A Ordinary Shares or equity-linked
securities related to our initial Business Combination.
We may issue a substantial number of additional
Class A Ordinary Shares or preference shares to complete our initial Business Combination or under an employee incentive plan after completion
of our initial Business Combination. We may also issue Class A Ordinary Shares upon conversion of the Class B Ordinary 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 as set forth therein.
Such issuance of additional ordinary or preference shares could involve costs to us and our shareholders that would not otherwise be
incurred in a traditional initial public offering, including but not limited to:
|
| significant
dilution of the equity interest of investors in our IPO, which dilution would increase if
the anti-dilution provisions in the Class B Ordinary Shares resulted in the issuance of Class
A Ordinary Shares on a greater than one-to-one basis upon conversion of the Class B Ordinary
Shares; | |
|
| subordination of the rights of holders
of Class A Ordinary Shares if preference shares are issued with rights senior to those afforded
our Class A Ordinary Shares; | |
26
|
| additional costs involved in registering
the resale of the securities being sold in any PIPE transactions and potential additional
downward pressure on our share price due to the ability of investors in such PIPE transactions
being able to sell their securities after registration; | |
|
| potential change in control if a
substantial number of Class A Ordinary Shares are issued, which may affect, among other things,
our ability to use our net operating loss carry forwards, if any, and could result in the
resignation or removal of our present officers and directors; | |
|
| potential delaying or preventing
of a change of control of us by diluting the share ownership or voting rights of a person
seeking to obtain control of us; and | |
|
| adverse impact on prevailing market
prices for our Units, Class A Ordinary Shares and/or warrants. | |
In addition, issuances of additional ordinary
or preference shares may not result in adjustment to the exercise price of our warrants. Such issuances may be structured in a way intended
to provide a return on investment to the investors in return for funds facilitating the completion of the Business Combination or providing
additional liquidity to the post-Business Combination entity.
**
*We may issue our shares to investors in
connection with our initial Business Combination at a price which 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) at a price of $10.00 per share or lower,
at a price that approximates the per-share amounts in our Trust Account at such time. The purpose of such issuances will be to enable
us to provide sufficient liquidity and capital to the post-Business Combination entity. The price of the shares we issue may therefore
be less, and potentially significantly less, than the market price for our shares at such time. Any such issuances of equity securities
could dilute the interests of our existing shareholders.
**
*Since only holders of our Class B Ordinary
Shares have the right to vote on the appointment of directors, Nasdaq considers us to be a controlled company within the
meaning of Nasdaq rules and, as a result, we may qualify for exemptions from certain corporate governance requirements.*
Only holders of our Class B Ordinary Shares have
the right to vote on the appointment of directors. As a result, Nasdaq considers us to be a controlled company within the
meaning of Nasdaq corporate governance standards. Under Nasdaq corporate governance standards, a company of which more than 50% of the
voting power for the appointment of directors is held by an individual, group or another company is a controlled company
and may elect not to comply with certain corporate governance requirements, including the requirements that:
|
| we have a board that includes a
majority of independent directors, as defined under the rules of Nasdaq, and | |
|
| we
have a compensation committee of our board that is comprised entirely of independent directors
with a written charter addressing the committees purpose and responsibilities. | |
We currently do not rely on the controlled
company exemption, but may do so in the future. Accordingly, if we choose to do so, you will not have the same protections afforded
to shareholders of companies that are subject to all of Nasdaq corporate governance requirements.
**
*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 Shareholders may only receive their
pro rata portion of the funds in the Trust Account that are available for distribution to Public Shareholders, 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, consultants 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 within the Completion Window, our Public Shareholders may only receive
their pro rata portion of the funds in the Trust Account that are available for distribution to Public Shareholders, and our warrants
will expire worthless.
**
27
**
*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, officers, directors
or existing holders which may raise potential conflicts of interest.*
In light of the involvement of our Sponsor, its
managing member, and our officers and directors with other entities, we may decide to acquire one or more businesses affiliated with
or competitive with our Sponsor, officers, directors and their respective affiliates or existing holders. Our directors also serve as
officers and/or board members for other entities, including, without limitation, those described in the registration statement for our
IPO under *Management Conflicts of Interest.* Our Sponsor, officers and directors may Sponsor, form or participate
in other blank check companies similar to ours during the period in which we are seeking an initial Business Combination. Such entities
may compete with us for Business Combination opportunities. Our Sponsor, officers and directors are not currently aware of any specific
opportunities for us to complete our initial Business Combination with any entities with which they are affiliated, and there have been
no substantive discussions concerning a Business Combination with any such entity or entities. Although we will not be specifically focusing
on, or targeting, any transaction with any affiliated entities, we would pursue such a transaction if we determined that such affiliated
entity met our criteria for a Business Combination as set forth in *Business Effecting our Initial Business Combination
Selection of a Target Business and Structuring of Our Initial Business Combination* elsewhere in this Form 10-K and
such transaction was approved by a majority of our independent and disinterested directors. Despite our obligation to obtain an opinion
from an independent investment banking firm or an independent entity that commonly renders valuation opinions for the type of company
we are seeking to acquire or from an independent accounting firm regarding the fairness to our company from a financial point of view
of a Business Combination with one or more domestic or international businesses affiliated with our Sponsor, officers or directors (or
their respective affiliates or related entities), potential conflicts of interest still may exist and, as a result, the terms of the
Business Combination may not be as advantageous to our Public Shareholders as they would be absent any conflicts of interest.
**
*Since our Sponsor, officers, directors,
any other holder of our Founder Shares, and the underwriter may lose their entire investment in us if our initial Business Combination
is not completed (other than with respect to Public Shares they have acquired, or may in the future acquire, if any), a conflict of interest
may arise in determining whether a particular Business Combination target is appropriate for our initial Business Combination.*
**
On July 16, 2025, our Sponsor
made a capital contribution of $25,000, or approximately $0.004 per share, to cover certain of our offering costs in exchange for 5,750,000
Founder Shares. In July 2025, our Sponsor subsequently transferred an aggregate of 210,000 Founder Shares to our independent directors
and certain of our officers, including our Chief Financial Officer, at the same per-share price that our Sponsor purchased such shares,
or approximately $0.004 per share, resulting in our Sponsor holding 5,540,000 Founder Shares and our initial shareholders collectively
holding an aggregate of 5,750,000 Founder Shares.
In addition, our Sponsor and Cohen purchased
an aggregate of 5,450,000 Private Placement Warrants for an aggregate purchase price of $5,450,000, or $1.00 per warrant. Of those 5,450,000
Private Placement Warrants, our Sponsor purchased 3,725,000 Private Placement Warrants and Cohen purchased 1,725,000 Private Placement
Warrants. The Private Placement Warrants will be worthless if we do not complete 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 the end of the Completion Window nears, which is the deadline for our completion of an initial Business Combination.
The non-managing Sponsor investors are not required
to (i) hold any Units, Class A Ordinary Shares or Public Warrants they purchased in the IPO or thereafter for any amount of time, (ii)
vote any Class A Ordinary Shares they may own at the applicable time in favor of our initial Business Combination or (iii) refrain from
exercising their right to redeem their Public Shares at the time of our initial Business Combination. The non-managing Sponsor investors
will have the same rights to the funds held in the Trust Account with respect to the Class A Ordinary Shares underlying the Units they
may have purchased in the IPO as the rights afforded to our other Public Shareholders.
**
28
**
*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 negatively impact the value of our shareholders investment in us.*
Although we have no commitments as of the date
of this Form 10-K to issue any notes or other debt securities, or to otherwise incur outstanding debt, we may choose to incur substantial
debt to complete our initial Business Combination. 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 security is payable on demand; | |
|
| our inability to obtain necessary
additional financing if the debt security contains covenants restricting our ability to obtain
such financing while the debt security is outstanding; | |
|
| using a substantial portion of our
cash flow to pay principal and interest on our debt, which will reduce the funds available
for 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 IPO and the sale of the Private Placement Warrants, which will cause us to be solely dependent on
a single business which may have a limited number of products or services. This lack of diversification may negatively impact our operations
and profitability.*
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. | |
29
This lack of diversification may subject us to
numerous economic, competitive and regulatory risks, any or all of which may have a substantial adverse impact upon the particular industry
in which we may operate subsequent to our initial Business Combination.
**
*We may attempt to simultaneously complete
Business Combinations with multiple prospective targets, which may hinder our ability to complete our initial Business Combination and
give rise to increased costs and risks that could negatively impact our operations and profitability.*
If we determine to simultaneously acquire several
businesses that are owned by different sellers, we will need for each of such sellers to agree that our purchase of its business is contingent
on the simultaneous closings of the other Business Combinations, which may make it more difficult for us, and delay our ability, to complete
our initial Business Combination. With multiple Business Combinations, we could also face additional risks, including additional burdens
and costs with respect to possible multiple negotiations and due diligence 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 negatively impact our profitability and results of operations.
**
*We may attempt to complete our initial
Business Combination with a private company about which little information is available, which may result in a Business Combination with
a company that is not as profitable as we suspected, if at all.*
In pursuing our 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 do not have a specified maximum redemption
threshold. The absence of such a redemption threshold may make it possible for us to complete our initial Business Combination with which
a substantial majority of our shareholders do not agree.*
Our amended and restated memorandum and articles
of association do not provide a specified maximum redemption threshold. Our proposed initial Business Combination may impose a minimum
cash requirement for: (i) cash consideration to be paid to the target or its owners, (ii) cash for working capital or other general corporate
purposes or (iii) the retention of cash to satisfy other conditions. As a result, we may be able to complete our initial Business Combination
even though a substantial majority of our Public Shareholders do not agree with the transaction and have redeemed their shares. In the
event the aggregate cash consideration we would be required to pay for all Public Shares that are validly submitted for redemption plus
any amount required to satisfy cash conditions pursuant to the terms of the proposed Business Combination exceed the aggregate amount
of cash available to us, we will not complete the Business Combination or redeem any shares, all Public Shares submitted for redemption
will be returned to the holders thereof, and we instead may search for an alternate Business Combination.
**
30
*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 memorandum
and articles of association or governing instruments in a manner that will make it easier for us to complete our initial Business Combination
that our shareholders or warrant holders, as applicable, 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 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 memorandum and articles of association requires the approval of a special
resolution under Cayman Islands law, which requires the affirmative vote of at least two-thirds (or, with respect to the appointment
or removal of directors or continuing the Company outside of the Cayman Islands, 90%) of the votes cast by such shareholders as, being
entitled to do so, vote in person or, where proxies are allowed, by proxy at the applicable general meeting of the Company, and amending
our warrant agreement requires a vote of holders of at least 50% of the Public Warrants and, solely with respect to any amendment to
the terms of the Private Placement Warrants or any provision of the warrant agreement with respect to the Private Placement Warrants
(including, for the avoidance of doubt, the forfeiture or cancellation of any Private Placement Warrants or working capital warrants),
50% of the then outstanding Private Placement Warrants (including, the vote or written consent of Cohen). In addition, our amended and
restated memorandum and articles of association requires us to provide our Public Shareholders with the opportunity to redeem their Public
Shares, regardless of whether they abstain, vote for, or vote against, our initial Business Combination, for cash if we propose an amendment
to our amended and restated memorandum and articles of association (A) to modify the substance or timing of our obligation to allow redemption
in connection with our initial Business Combination or to redeem 100% of our Public Shares if we do not complete an initial Business
Combination within the Completion Window or (B) with respect to any other material provisions relating to shareholders rights
or pre-initial Business Combination activity. Many SPACs have faced delisting of their securities following redemptions of shares by
public shareholders in connection with proposed amendments to their corporate charters since, after redeeming a large number of publicly
held shares, they no longer meet the continued listing requirements of the stock exchange. To the extent any of such amendments would
be deemed to fundamentally change the nature of the securities offered through the registration statement filed in connection with our
IPO, 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
memorandum and articles of association 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 not less than two-thirds of our
ordinary shares which are represented in person or by proxy and are voted at a general meeting of the Company, 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 memorandum and articles of association to facilitate the completion of an initial Business Combination that some of our shareholders
may not support.*
Our amended and restated memorandum and articles
of association provide that any of its provisions related to pre-Business Combination activity (including the requirement to deposit
proceeds of the IPO and the Private Placement Warrants into the Trust Account and not release such amounts except in specified circumstances,
and to provide redemption rights to Public Shareholders as described herein, and other than amendments relating to the provisions regulating
the appointment and removal of directors and continuing the Company in a jurisdiction outside the Cayman Islands, which require the approval
of a special resolution passed by the affirmative vote of at least 90% (or, where such amendment is proposed in respect of the consummation
of our initial Business Combination, two-thirds) of the votes cast by such shareholders as, being entitled to do so, vote in person or,
where proxies are allowed, by proxy at the applicable general meeting of the Company) may be amended if approved by special resolution
under Cayman Islands law. Except as specified above with respect to matters requiring a 90% majority, a special resolution requires the
affirmative vote of at least two-thirds of the votes cast by such shareholders as, being entitled to do so, vote in person or, where
proxies are allowed, by proxy at the applicable general meeting of the Company or by a unanimous written resolution passed in accordance
with the Companies Act. Corresponding provisions of the trust agreement governing the release of funds from our Trust Account may be
amended if approved by the affirmative vote of at least two-thirds of our ordinary shares which are represented in person or by proxy
and are voted at a general meeting of the Company. Our initial shareholders, who beneficially own 25% of our ordinary shares, will participate
in any vote to amend our amended and restated memorandum and articles of association and/or trust agreement and will have the discretion
to vote in any manner they choose. As a result, we may be able to amend the provisions of our amended and restated memorandum and articles
of association which govern our pre-Business Combination behavior more easily than some other special purpose acquisition companies,
and this may increase our ability to complete a Business Combination with which you do not agree.
Our Sponsor, officers and directors have agreed,
pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated memorandum and articles
of association (A) to modify the substance or timing of our obligation to allow redemption in connection with our initial Business Combination
or to redeem 100% of our Public Shares if we do not complete our initial Business Combination within the Completion Window or (B) with
respect to any other material provisions relating to shareholders rights or pre-initial Business Combination activity, in each
case unless we provide our Public Shareholders with the opportunity to redeem their Public Shares upon approval of any such amendment
at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned
on the funds held in the Trust Account (net of taxes paid or payable), divided by the number of then outstanding Public Shares. Our shareholders
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, officers or directors for any breach of these agreements. As a result, in the event of a breach, our shareholders
would need to pursue a shareholder derivative action, subject to applicable law.
**
31
**
*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 IPO
and the sale of the Private Placement Warrants. 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 Shareholders, 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 Shareholders may only receive their pro
rata portion of the funds in the Trust Account that are available for distribution to Public Shareholders, and our warrants will expire
worthless. In addition, even if we do not need additional financing to complete our initial Business Combination, we may require such
financing to fund the operations or growth of the target business. The failure to secure additional financing could have a material adverse
effect on the continued development or growth of the target business. None of our officers, directors or shareholders is required to
provide any financing to us in connection with or after our initial Business Combination.
**
*Our initial shareholders will control the
appointment of our board of directors until consummation of our initial Business Combination and will hold a substantial interest in
us. As a result, it will appoint all of our directors prior to the consummation of our initial Business Combination and may exert a substantial
influence on actions requiring a shareholder vote, potentially in a manner that you do not support.*
Our initial shareholders own 25% of our issued
and outstanding ordinary shares. Accordingly, they may exert a substantial influence on actions requiring a shareholder vote, potentially
in a manner that you do not support, including amendments to our amended and restated memorandum and articles of association. This potential
concentration of influence could be disadvantageous to other shareholders with interests different from those of our initial shareholders.
In addition, the Founder Shares, all of which are held by our initial shareholders, will entitle the holders to appoint all of our directors
prior to the consummation of our initial Business Combination. Holders of our Public Shares will have no right to vote on the appointment
or removal of directors during such time. Further, prior to the closing of our initial Business Combination, only holders of our Class
B Ordinary Shares will be entitled to vote on continuing our company in a jurisdiction outside the Cayman Islands (including any special
resolution required to amend our constitutional documents or to adopt new constitutional documents, in each case, as a result of our
approving a transfer by way of continuation in a jurisdiction outside the Cayman Islands). In addition, our board of directors is divided
into two classes, each of which generally serves for a term of two years with only one class of directors being appointed in each
year. These provisions of our amended and restated memorandum and articles of association may only be amended if approved by a special
resolution passed by the affirmative vote of at least 90% (or, where such amendment is proposed in respect of the consummation of our
initial Business Combination, two-thirds) of the votes cast by such shareholders as, being entitled to do so, vote in person or, where
proxies are allowed, by proxy at the applicable general meeting of the Company. As a result, you will not have any influence over the
appointment or removal of directors prior to our initial Business Combination or any influence over our continuation in a jurisdiction
outside the Cayman Islands prior to our initial Business Combination. If our initial shareholders purchase any additional Class A Ordinary
Shares in the aftermarket or in privately negotiated transactions, this would increase their control. Neither our initial shareholders
nor, to our knowledge, any of our officers or directors, have any current intention to purchase additional securities, other than as
disclosed in this 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 Ordinary Shares. We may not hold an annual or extraordinary general meeting to appoint 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. In addition, since only holders of our Class B Ordinary Shares will have the right
to vote on directors prior to our initial Business Combination, our initial shareholders will continue to exert control at least until
the completion of our initial Business Combination.
**
32
**
*We may not be able to complete an initial
Business Combination because such initial Business Combination may be subject to regulatory review and approval requirements, including
foreign investment regulations and review by government entities such as the Committee on Foreign Investment in the United States (CFIUS),
or may be ultimately prohibited.*
Our initial Business Combination may be subject
to regulatory review and approval requirements by governmental entities, or ultimately prohibited. For example, CFIUS has authority to
review direct or indirect foreign investments in U.S. companies. Among other things, CFIUS is empowered to require certain foreign investors
to make mandatory filings, to charge filing fees related to such filings, and to self-initiate national security reviews of foreign direct
and indirect investments in U.S. companies if the parties to that investment choose not to file voluntarily. In the case that CFIUS determines
an investment to be a threat to national security, CFIUS has the power to unwind or place restrictions on the investment. Whether CFIUS
has jurisdiction to review an acquisition or investment transaction depends on ** among other factors **
the nature and structure of the transaction, including the level of beneficial ownership interest and the nature of any information or
governance rights involved. For example, investments that result in control of a U.S. business by a foreign person always
are subject to CFIUS jurisdiction. CFIUSs expanded jurisdiction under the Foreign Investment Risk Review Modernization Act of
2018 and implementing regulations that became effective on February 13, 2020 further includes investments that do not result in control
of a U.S. business by a foreign person but afford certain foreign investors certain information or governance rights in a U.S. business
that has a nexus to critical technologies, critical infrastructure and/or sensitive personal data.
If a particular proposed initial Business Combination
with a U.S. business falls within CFIUSs jurisdiction, we may determine that we are required to make a mandatory filing or that
we will submit to CFIUS review on a voluntary basis, or to proceed with the transaction without submitting to CFIUS and risk CFIUS intervention,
before or after closing the transaction. CFIUS may decide to block or delay our proposed initial Business Combination, impose conditions
with respect to such initial Business Combination or request the President of the United States to order us to divest all or a portion
of the U.S. target business of our initial Business Combination that we acquired without first obtaining CFIUS approval, which may limit
the attractiveness of, delay or prevent us from pursuing certain target companies that we believe would otherwise be beneficial to us
and our shareholders. As a result, the pool of potential targets with which we could complete an initial Business Combination may be
limited and we may be adversely affected in terms of competing with other special purpose acquisition companies which do not have any
foreign ownership issues. In addition, certain federally licensed businesses may be subject to rules or regulations that limit foreign
ownership.
The process of government review, whether by
CFIUS or otherwise, could be lengthy. Because we have only a limited time to complete our initial Business Combination, our failure to
obtain any required approvals within the requisite time period may require us to liquidate. If we are unable to consummate our initial
Business Combination within the applicable time period required under our amended and restated memorandum and articles of association,
including as a result of extended regulatory review of a potential initial Business Combination, we will as promptly as reasonably possible
but not more than ten business days thereafter (and subject to lawfully available funds therefor), redeem the Public Shares, at a per-share
price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held
in the Trust Account (which interest shall be net of taxes paid or payable and up to $100,000 of interest to pay liquidation expenses),
divided by the number of then issued outstanding Public Shares, which redemption will completely extinguish Public Shareholders
rights as shareholders (including the right to receive further liquidating distributions, if any), subject to our obligations under Cayman
Islands law to provide for claims of creditors and the requirements of other applicable law. In such event, our shareholders will miss
the opportunity to benefit from an investment in a target company and the appreciation in value of such investment. Additionally, our
warrants may be worthless.
**
33
*Due to the number of special purpose acquisition
companies evaluating targets, attractive targets may become more scarce and there may be more competition for attractive targets or such
attractive targets may not be interested in consummating a Business Combination with a SPAC due to a negative public perception of mergers
involving SPACs. This could increase the cost of our initial Business Combination and could even result in our inability to find a target
or to consummate an initial Business Combination.*
During 2021 and 2022, the number of special purpose
acquisition companies that have been formed 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 preparing for
an initial public offering, as well as many such companies currently in registration. As a result, at times, fewer attractive targets
may be available 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 more scarce for other reasons, such as economic or industry sector downturns (including a negative
public perception of mergers involving SPACs), geopolitical tensions, or increases in the cost of additional capital needed to close
Business Combinations or operate targets post-Business Combination. This could increase the cost of, delay or otherwise complicate or
frustrate our ability to find and consummate an initial Business Combination and may result in our inability to consummate an initial
Business Combination on terms favorable to our investors altogether.
**
*Adverse developments affecting the financial
services industry, including events or concerns involving liquidity, defaults or non-performance by financial institutions, could adversely
affect our business, financial condition or results of operations, or our prospects.*
The funds in our operating account and our Trust
Account can be held in banks or other financial institutions and will be 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; the holding of these assets in this form is intended to be temporary and
for the sole purpose of facilitating the intended Business Combination. To mitigate the risk that we might be deemed to be an investment
company for purposes of the Investment Company Act, which risk increases the longer that we hold investments in the Trust Account, we
may, at any time (based on our management teams ongoing assessment of all factors related to our potential status under the Investment
Company Act), instruct the trustee to liquidate the investments held in the Trust Account and instead to hold the funds in the Trust
Account in cash or in an interest-bearing demand deposit account at a bank. Our cash held in these accounts may exceed any applicable
Federal Deposit Insurance Corporation (FDIC) insurance limits. Should events, including limited liquidity, defaults, non-performance
or other adverse developments occur with respect to the banks or other financial institutions that hold our funds, or that affect financial
institutions or the financial services industry generally, or concerns or rumors about any events of these kinds or other similar risks,
the value of the assets in our Trust Account could be impaired, which could have a material impact on our operating results, liquidity,
financial condition and prospects. For example, on March 10, 2023, the FDIC announced that Silicon Valley Bank had been closed by the
California Department of Financial Protection and Innovation. We cannot guarantee that the banks or other financial institutions that
will hold our funds will not experience similar issues.
**
*Because we must furnish our shareholders
with target business financial statements, we may lose the ability to complete an otherwise advantageous initial Business Combination
with some prospective target businesses.*
The federal proxy rules require that a proxy
statement with respect to a vote on an initial Business Combination meeting certain financial significance tests 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, 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 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 financial statements in accordance with federal proxy rules and
complete our initial Business Combination within the prescribed time frame.
**
34
*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 beginning with our Annual Report on Form 10-K for the year ending December
31, 2026. Only in the event we are deemed to be a large accelerated filer or an accelerated filer, and no longer qualify as an emerging
growth company, will we be required to comply with the independent registered public accounting firm attestation requirement on our internal
control over financial reporting. 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.
**
*Risks Relating to the Post-Business Combination
Company*
**
*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 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 within
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 securityholders who choose to remain securityholders
following the Business Combination could suffer a reduction in the value of their securities. Such securityholders 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.
**
*The officers and directors of an acquisition
candidate may resign upon completion of our initial Business Combination. The loss of a Business Combination targets key personnel
could negatively impact the operations and profitability of 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.
The departure of an acquisition candidates key personnel could negatively impact the operations and profitability of our post-combination
business.
**
35
*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 Shareholders own shares will own less than 100% of the equity interests or assets
of a target business, but we will only complete such Business Combination if the post-transaction company owns or acquires 50% or more
of the outstanding voting securities of the target or is otherwise 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 shareholders 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.
For example, we could pursue a transaction in which we issue a substantial number of new Class A Ordinary Shares in exchange for all
of the outstanding capital stock, shares or other equity interests of a target. In this case, we would acquire a 100% interest in the
target. However, as a result of the issuance of a substantial number of new Class A Ordinary Shares, our shareholders immediately prior
to such transaction could own less than a majority of our issued and outstanding Class A Ordinary Shares subsequent to such transaction.
In addition, other minority shareholders may subsequently combine their holdings resulting in a single person or group obtaining a larger
share of the Companys shares than we initially acquired. Accordingly, this may make it more likely that our management will not
be able to maintain control of the target business.
**
*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 negatively impacted. Accordingly, any securityholders who choose to remain
securityholders following the Business Combination could suffer a reduction in the value of their shares. Such securityholders 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.
**
*We may seek Business Combination opportunities
with a high degree of complexity that require significant operational improvements, which could delay or prevent us from achieving our
desired results.*
We may seek Business Combination opportunities
with large, highly complex companies that we believe would benefit from operational improvements. While we intend to implement such improvements,
to the extent that our efforts are delayed or we are unable to achieve the desired improvements, the Business Combination may not be
as successful as we anticipate.
To the extent we complete our initial Business
Combination with a large complex business or entity with a complex operating structure, we may also be affected by numerous risks inherent
in the operations of the business with which we combine, which could delay or prevent us from implementing our strategy. Although our
management team will endeavor to evaluate the risks inherent in a particular target business and its operations, we may not be able to
properly ascertain or assess all of the significant risk factors until we complete our Business Combination. If we are not able to achieve
our desired operational improvements, or the improvements take longer to implement than anticipated, we may not achieve the gains that
we anticipate. Furthermore, some of these risks and complexities may be outside of our control and leave us with no ability to control
or reduce the chances that those risks and complexities will adversely impact a target business. Such combination may not be as successful
as a combination with a smaller, less complex organization.
**
36
**
*Transactions in connection with or in anticipation
of our initial Business Combination and our structure thereafter may not be tax-efficient to our shareholders and warrant holders. As
a result of our Business Combination, our tax obligations may be more complex, burdensome and/or uncertain.*
Although we will attempt to structure the transactions
in connection with 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 anticipation of or in connection with our initial Business Combination and subject to any requisite shareholder approval, we may:
enter into one or more transactions that require or structure our Business Combination in a manner that requires shareholders and/or
warrant holders to recognize gain or income for tax purposes or otherwise increase their tax burden; 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 shareholders or warrant holders
to pay taxes in connection with our Business Combination or thereafter. Accordingly, a shareholder 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
or warrants received.
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. In addition, shareholders and warrant holders may be subject to additional income, withholding or other taxes with respect
to their ownership of us after any such transaction.
**
*Risks Relating to Acquiring and Operating
a Business in Foreign Countries*
**
*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 negatively impact our operations.
If we pursue a target 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 executing cross-border transactions, managing cross-border business
operations and complying with different commercial and legal requirements of overseas market; | |
|
| 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; | |
37
|
| 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; | |
|
| underdeveloped
or unpredictable legal or regulatory systems; | |
|
| corruption; | |
|
| protection
of intellectual property; | |
|
| social
unrest, crime, strikes, riots and civil disturbances; | |
|
| regime
changes and political upheaval; | |
|
| terrorist
attacks, natural disasters, widespread health emergencies and wars; and | |
|
| deterioration
of political relations with the 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.
**
*We may reincorporate in or transfer by
way of continuation to another jurisdiction in connection with our Business Combination, and such reincorporation may result in taxes
imposed on shareholders or warrant holders.*
We may, in connection with our initial Business
Combination or otherwise and, to the extent applicable, subject to requisite shareholder approval by special resolution under the Companies
Act (with respect to which only holders of Class B Ordinary Shares will be entitled to vote prior to our initial Business Combination),
reincorporate in or transfer by way of continuation to the jurisdiction in which the target company or business is located or in another
jurisdiction. The transaction may require a shareholder or warrant holder to recognize taxable income in the jurisdiction in which the
shareholder or warrant holder is a tax resident or in which its members are resident if it is a tax transparent entity (or may otherwise
result in adverse tax consequences). We do not intend to make any cash distributions to shareholders or warrant holders to pay such taxes.
Shareholders or warrant holders may be subject to withholding taxes or other taxes with respect to their ownership of our Class A Ordinary
Shares or warrants after the reincorporation.
In particular, although we may attempt to structure
any change in our jurisdiction of incorporation (if any) in a tax-efficient manner (including, if possible, in a manner that is tax-deferred
for U.S. federal income tax purposes), tax structuring considerations are complex, the relevant facts and law may be uncertain and may
change, we may prioritize commercial and other considerations over tax considerations, and we may prioritize company-level tax considerations
over the tax considerations of our shareholders and warrant holders. As a result, the change in our jurisdiction of incorporation may
have adverse tax consequences to us or to our shareholders and warrant holders, including the recognition of substantial gain for U.S.
federal income tax purposes, and because you may not have prior notice of our change in jurisdiction, you may not be able to avoid such
consequences. For example, under certain circumstances, including if we are treated as a PFIC, a U.S. Holder may be subject to U.S. federal
income tax on gain or a deemed dividend upon the exchange of our ordinary shares or warrants for our successors shares or warrants,
and such taxes may be substantial. For a more detailed discussion of the PFIC rules and the related tax considerations for U.S. investors,
see the section of the IPO registration statement captioned *Certain Income Tax Considerations Material United States Federal
Income Tax Considerations* *U.S. Holders* *Passive Foreign Investment Company Rules*.
38
In addition to the immediate consequences of
a change in our jurisdiction of incorporation, holding our successors shares or warrants following a change in our jurisdiction
of incorporation could have different, potentially adverse, consequences as compared to those of holding our shares or warrants prior
to any such change. For example, if we were to change our jurisdiction of incorporation from the Cayman Islands to Delaware, this could
have a number of adverse consequences to non-U.S. Holders who own our successors shares or warrants by exposing them to U.S. taxation
and reporting obligations, such as the taxation of dividends from our successor or the taxation of dispositions of our successors
shares or warrants. Because such persons may not have prior notice of our change in jurisdiction, they may not be able to change the
manner in which they hold our shares or warrants or dispose of our shares or warrants prior to any such change in our jurisdiction of
incorporation, and therefore such persons may not be able to avoid any adverse consequences of holding our successors shares or
warrants after such change.
Further, it is possible that we would change
our jurisdiction of incorporation in anticipation of consummating a specific Business Combination but not complete that Business Combination
for any number of reasons. If we are unable to consummate a Business Combination with a specific Business Combination target following
such a change in our jurisdiction of incorporation, our new jurisdiction of incorporation could have disadvantages to us or our shareholders
and/or warrant holders, particularly if we subsequently pursue a Business Combination with a target that is incorporated in a different
jurisdiction. In such circumstances, we may not be as competitive with other special purpose acquisition companies incorporated in the
Cayman Islands when pursuing certain target companies, the consummation of our initial Business Combination could be more complex, or
it may be more difficult to structure such an initial Business Combination in a tax-efficient manner. For example, we may change our
jurisdiction of incorporation to the United States in anticipation of a Business Combination with a U.S. target company but ultimately
effect our initial Business Combination with a non-U.S. target company. In such a case, we may be unable to structure our initial Business
Combination in a tax-deferred manner, and our shareholders and/or warrant holders may be required to pay substantial U.S. federal income
or other taxes in connection with the consummation of the initial Business Combination. In addition, the initial Business Combination
may result in tax inefficiencies for the post-Business Combination entity, including that, if the post-Business Combination entity is
organized outside of the United States, it may nevertheless be treated as a U.S. corporation for U.S. federal income tax purposes, which
treatment may result in substantial tax inefficiencies for both the post-Business Combination entity and for our shareholders and/or
warrant holders.
We cannot assure you when or whether we will
change our jurisdiction of incorporation or, if we do change our jurisdiction of incorporation, the jurisdiction in which we will ultimately
be incorporated. Accordingly, there is significant uncertainty as to the legal, tax and other considerations that may be applicable to
us or to our shareholders and warrant holders, and we cannot provide you with specific or comprehensive examples of such potential consequences.
The rules governing a change in our jurisdiction of incorporation and the transactions that may occur in connection with our initial
Business Combination are complex, and the consequences arising from such rules or transactions will depend on a holders particular
circumstances and on the circumstances surrounding our change in jurisdiction and initial Business Combination. All investors considering
an investment in our securities are urged to consult with and rely solely upon their own legal and tax advisors regarding the potential
consequences to them of any change in our jurisdiction of incorporation.
**
*We may reincorporate in or transfer by
way of continuation to another jurisdiction in connection with our initial Business Combination, and the laws of such jurisdiction may
govern some or all of our future material agreements and we may not be able to enforce our legal rights.*
In connection with our initial Business Combination,
we may relocate the home jurisdiction of our business from the Cayman Islands to another jurisdiction. If we determine to do this, the
laws of such jurisdiction may govern some or all of our future material agreements. The system of laws and the enforcement of existing
laws in such jurisdiction may not be as certain in implementation and interpretation as in the United States. The inability to enforce
or obtain a remedy under any of our future agreements could result in a significant loss of business, business opportunities or capital.
**
39
**
*We are subject to changing law and regulations
regarding regulatory matters, corporate governance and public disclosure that have increased both our costs and the risk of non-compliance.*
We are subject to rules and regulations by various
governing bodies, including, for example, the SEC, which are charged with the protection of investors and the oversight of companies
whose securities are publicly traded, and to new and evolving regulatory measures under applicable law. Our efforts to comply with new
and changing laws and regulations have resulted in and are likely to continue to result in, increased general and administrative expenses
and a diversion of management time and attention from revenue-generating activities to compliance activities.
Moreover, because these laws, regulations and
standards are subject to varying interpretations, their application in practice may evolve over time as new guidance becomes available.
This evolution may result in continuing uncertainty regarding compliance matters and additional costs necessitated by ongoing revisions
to our disclosure and governance practices. If we fail to address and comply with these regulations and any subsequent changes, we may
be subject to penalty and our business may be harmed.
**
*Exchange rate fluctuations and currency
policies may cause a target business ability to succeed in the international markets to be diminished**.*
In the event we acquire a non-U.S. target, all
revenues and income would likely be received in a foreign currency, and the dollar equivalent of our net assets and distributions, if
any, could be adversely affected by reductions in the value of the local currency. The value of the currencies in our target regions
fluctuate and are affected by, among other things, changes in political and economic conditions. Any change in the relative value of
such currency against our reporting currency may affect the attractiveness of any target business or, following consummation of our initial
Business Combination, our financial condition and results of operations. Additionally, if a currency appreciates in value against the
dollar prior to the consummation of our initial Business Combination, the cost of a target business as measured in dollars will increase,
which may make it less likely that we are able to consummate such transaction.
**
*After our initial Business Combination,
substantially all of our assets may be located in a foreign country and substantially all of our revenue will be derived from our operations
in such country. Accordingly, our results of operations and prospects will be subject, to a significant extent, to the economic, political
and legal policies, developments and conditions in the country in which we operate.*
The economic, political and social conditions,
as well as government policies, of the country in which our operations are located could affect our business. Economic growth could be
uneven, both geographically and among various sectors of the economy and such growth may not be sustained in the future. If in the future
such countrys economy experiences a downturn or grows at a slower rate than expected, there may be less demand for spending in
certain industries. A decrease in demand for spending in certain industries could materially and adversely affect our ability to find
an attractive target business with which to consummate our initial Business Combination and if we effect our initial Business Combination,
the ability of that target business to become profitable.
Risks Relating to our *Sponsor* and Management
Team
**
*A change of ownership or control of our
Sponsor could adversely affect our ability to consummate our initial Business Combination.*
There are no restrictions on our Sponsors
managing members ability to transfer equity interests in our Sponsor held by the managing member or otherwise consent to a transfer
of such equity interests by another member of our Sponsor. Transfers of equity interests in the Sponsor or its direct or indirect parent
entities may result in a change of ownership or control of our Sponsor. Such change of ownership or control of our Sponsor could adversely
affect our ability to consummate our initial Business Combination, as there can be no assurances that a new sponsor will possess the
requisite skills, investor relationships and expertise to select an appropriate target business, obtain the necessary financing and consummate
the initial Business Combination.
**
40
**
*We are dependent upon our executive officers
and directors and their loss, or a reduction in the amount of time they can dedicate to our initial Business Combination, could adversely
affect our ability to operate.*
Our operations are dependent upon a relatively
small group of individuals and, in particular, our executive officers and directors. We believe that our success depends on the continued
service of our officers and directors, at least until we have completed our initial Business Combination. In addition, our executive
officers and directors are not required to commit any specified amount of time to our affairs and, accordingly, will have conflicts of
interest in allocating their time among various business activities, including identifying potential Business Combinations and monitoring
the related due diligence. 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.
**
*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 engage after our initial Business Combination, we cannot assure you
that our assessment of these individuals will prove to be correct. These individuals may be unfamiliar with the requirements of operating
a company regulated by the SEC, which could cause us to have to expend time and resources helping them become familiar with such requirements.
**
*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 Cayman Islands law.
**
*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. 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. Any
such companies, businesses or investments may present additional conflicts of interest in pursuing an initial Business Combination target.
For a complete discussion of our executive officers and directors other business affairs, please see *Item 10.
Directors, Executive Officers and Corporate Governance.*
**
41
*Our officers and directors presently have,
and any of them in the future may have additional, fiduciary or contractual obligations to other entities, including other blank check
companies, and, accordingly, may have conflicts of interest in allocating their time and 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. Our Sponsor, its managing member, and our
officers and directors are, and in the future may become, affiliated with such entities (such as operating companies or investment vehicles)
that are engaged in a similar business. We do not have employment contracts with our officers and directors that will limit their ability
to work at other businesses. In addition, our Sponsor, officers and directors may participate in the formation of, or become an officer
or director of, any other blank check company prior to completion of our initial Business Combination. As a result, our Sponsor, officers
and directors could have conflicts of interest in determining whether to present Business Combination opportunities to us or to any other
blank check company with which they may become involved. Our Sponsor, officers and directors have complete discretion, subject to applicable
fiduciary duties, as to which blank check company they choose to pursue a Business Combination and the order in which they pursue Business
Combinations for any of their existing or future blank check companies. As a result, our Sponsor, officers and directors may pursue Business
Combinations for blank check companies that it has sponsored in any order, which could result in its more recent blank check companies
completing Business Combinations prior to its blank check companies that were launched earlier. Our officers and directors presently
have, and any of them in the future may have additional, fiduciary, contractual or other obligations or duties to one or more other entities
pursuant to which such officer or director is or will be required to present a Business Combination opportunity to such entities. Accordingly,
if any of our officers or directors becomes aware of a Business Combination opportunity which is suitable for an entity to which he or
she has then current fiduciary or contractual obligations, he or she will honor his or her fiduciary or contractual obligations to present
such Business Combination opportunity to such other entity, subject to their fiduciary duties under Cayman Islands law. In addition,
certain of our officers and directors are members of our Sponsor and own membership interests of our Sponsor. The remaining membership
interests are held by third party investors that are not affiliated with members of our management. 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 Business
Combination. Our amended and restated memorandum and articles of association provide that, to the fullest extent permitted by law: (i)
no individual serving as a director or an officer, among other persons, shall have any duty, except and to the extent expressly assumed
by contract, to refrain from engaging directly or indirectly in the same or similar business activities or lines of business as us, and
(ii) we renounce any interest or expectancy in, or in being offered an opportunity to participate in, any potential transaction or matter
which (a) may be a corporate opportunity for any director or officer, on the one hand, and us, on the other or (b) the presentation of
which would breach an existing legal obligation of a director or officer to any other entity. The purpose for the surrender of corporate
opportunities is to allow officers, directors or other representatives with multiple business affiliations to continue to serve as an
officer of our Company or on our board of directors. Our officers and directors may from time to time be presented with opportunities
that could benefit both another business affiliation and us. In the absence of the corporate opportunity waiver in our
charter, certain candidates would not be able to serve as an officer or director. We believe we substantially benefit from having representatives
who bring significant, relevant and valuable experience to our management, and, as a result, the inclusion of the corporate opportunity
waiver in our amended and restated memorandum and articles of association provide us with greater flexibility to attract and retain the
officers and directors that we feel are the best candidates. 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.
**
*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, 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 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. Any such companies, businesses
or investments may present additional conflicts of interest in pursuing an initial Business Combination target.
The personal and financial interests of our directors
and officers may influence their motivation in timely identifying and selecting a target business and completing a Business Combination.
Consequently, our directors and officers discretion in identifying and selecting a suitable target business may result
in a conflict of interest when determining whether the terms, conditions and timing of a particular Business Combination are appropriate
and in our best interest. If this were the case, it may be a breach of their fiduciary duties to us as a matter of Cayman Islands law
and claims against such individuals may arise for a breach of such duties. However, we might not ultimately be successful in any claim
we may make against them for such reason.
**
42
**
*Members of our management team and board
of directors have significant experience as founders, board members, officers, executives or employees of other companies. Certain of
those persons have been, are currently, or may become, involved in litigation, investigations or other proceedings, including related
to those companies or otherwise. This may have an adverse effect on us, which may impede our ability to consummate an initial Business
Combination.*
During the course of their careers, members of
our management team and board of directors have had significant experience as founders, board members, officers, executives or employees
of other companies including SPACs. Certain of those persons have been, are currently and may in the future become, involved in litigation,
investigations or other proceedings, including but not limited to issues relating to breach of fiduciary duty and/or the business affairs
of such companies, including SPACs; transactions entered into by such companies, including SPACs; or otherwise. Any such litigation,
investigations or other proceedings may divert the attention and resources of our management team and board of directors away from identifying
and selecting a target business or businesses for our initial Business Combination and may result in findings, orders, or other determinations
adverse to members of our management team and board of directors or otherwise negatively affect our reputation, which may impede our
ability to complete an initial Business Combination.
**
*Members of our management team and affiliated
companies may have been, and may in the future be, involved in civil disputes or governmental investigations unrelated to our business.*
Members of our management team have been (and
intend to be) involved in a wide variety of businesses. Such involvement has, and may lead to, media coverage and public awareness. As
a result, members of our management team and affiliated companies may have been, and may in the future be, involved in civil disputes
or governmental investigations unrelated to our business. Any such claims or investigations may be detrimental to our reputation and
could negatively affect our ability to identify and complete an initial Business Combination and may have an adverse effect on the price
of our securities.
*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 have acquired, or may in the future acquire, if any), a conflict of interest may arise in determining whether a particular
Business Combination target is appropriate for our initial Business Combination.*
On July
16, 2025, our Sponsor made a capital contribution of $25,000, or approximately $0.004 per share, to cover certain of our expenses, for
which we issued 5,750,000 Founder Shares to our Sponsor. In July 2025, our Sponsor subsequently transferred an aggregate of 210,000 Founder
Shares to our independent directors and certain of our officers, including our Chief Financial Officer, at the same per-share price that
our Sponsor purchased such shares, or approximately $0.004 per share, resulting in our Sponsor holding 5,540,000 Founder Shares and our
initial shareholders collectively holding an aggregate of 5,750,000 Founder Shares.
In addition,
our Sponsor and Cohen purchased an aggregate of 5,450,000 Private Placement Warrants for an aggregate purchase price of $5,450,000, or
$1.00 per warrant. Of those 5,450,000 Private Placement Warrants, our Sponsor purchased 3,725,000 Private Placement Warrants and Cohen
purchased 1,725,000 Private Placement Warrants. The Private Placement Warrants will be worthless if we do not complete 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 the end of the Completion Window nears, which is the deadline for our completion
of an initial Business Combination.
43
The non-managing
Sponsor investors are not required to (i) hold any Units, Class A Ordinary Shares or Public Warrants they purchased in the IPO or thereafter
for any amount of time, (ii) vote any Class A Ordinary Shares they may own at the applicable time in favor of our initial Business Combination
or (iii) refrain from exercising their right to redeem their Public Shares at the time of our initial Business Combination. The non-managing
Sponsor investors will have the same rights to the funds held in the Trust Account with respect to the Class A Ordinary Shares underlying
the Units they may have purchased in the IPO as the rights afforded to our other Public Shareholders.
*Risks Relating to our Securities*
**
*You will not have any rights or interests
in funds from the Trust Account, except under certain limited circumstances. Therefore, to liquidate your investment, you may be forced
to sell your Public Shares or warrants, potentially at a loss.*
Our Public Shareholders will be entitled to receive
funds from the Trust Account only upon the earliest to occur of: (i) our completion of an initial Business Combination, and then only
in connection with those Class A Ordinary Shares that such shareholder properly elected to redeem, subject to the limitations described
herein, (ii) the redemption of any Public Shares properly submitted in connection with a shareholder vote to amend our amended and restated
memorandum and articles of association (A) to modify the substance or timing of our obligation to redeem 100% of our Public Shares if
we do not complete our initial Business Combination within the Completion Window or (B) with respect to any other material provisions
relating to shareholders rights or pre-initial Business Combination activity, and (iii) the redemption of our Public Shares if
we are unable to complete an initial Business Combination within the Completion Window, 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 within the
Completion Window for any reason, compliance with Cayman Islands law may require that we submit a plan of dissolution to our then-existing
shareholders for approval prior to the distribution of the proceeds held in our Trust Account. In that case, Public Shareholders may
be forced to wait beyond the Completion Window before they receive funds from our Trust Account. In no other circumstances will a Public
Shareholder 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.
**
*Nasdaq may delist our securities from trading
on its exchange, which could limit investors ability to make transactions in our securities and subject us to additional trading
restrictions.*
Our Units, Class A Ordinary Shares and Public
Warrants are listed on Nasdaq. We cannot assure you that our securities will continue to be listed on Nasdaq in the future or prior to
our initial Business Combination. Additionally, in connection with our initial Business Combination, we will be required to demonstrate
compliance with Nasdaqs initial listing requirements, which are more rigorous than Nasdaqs continued listing requirements,
in order to continue to maintain the listing of our securities on Nasdaq. We cannot assure you that we will be able to meet those initial
listing requirements at that time.
If Nasdaq delists our securities from trading
on its exchange and we are not able to list our securities on another national securities exchange, we expect our securities could be
quoted on an over-the-counter market. If this were to occur, we could face significant material adverse consequences, including:
|
| a
limited availability of market quotations for our securities; | |
|
| reduced
liquidity for our securities; | |
|
| a
determination that our Class A Ordinary Shares are a penny stock which will
require brokers trading in our Class A Ordinary Shares to adhere to more stringent rules
and possibly result in a reduced level of trading activity in the secondary trading market
for our securities; | |
|
| a
limited amount of news and analyst coverage; and | |
|
| a
decreased ability to issue additional securities or obtain additional financing in the future. | |
44
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 securities are listed on Nasdaq, they qualify as covered securities under the statute.
Although the states are preempted from regulating the sale of our securities, the federal statute does allow the states to investigate
companies if there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the states can regulate or bar the
sale of covered securities in a particular case. While we are not aware of a state having used these powers to prohibit or restrict the
sale of securities issued by blank check companies, other than the State of Idaho, certain state securities regulators view blank check
companies unfavorably and might use these powers, or threaten to use these powers, to hinder the sale of securities of blank check companies
in their states. Further, if we were no longer listed on Nasdaq, our securities would not qualify as covered securities under the statute
and we would be subject to regulation in each state in which we offer our securities.
**
*The nominal purchase price paid by our
Sponsor for the Founder Shares may result in significant dilution to the implied value of your Public Shares upon the consummation of
our 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 ordinary shares to materially decline.*
Prior to our IPO, our Sponsor paid a nominal
aggregate purchase price of $25,000 for the Founder Shares, or approximately $0.004 per share. As a result, the value of your Public
Shares may be significantly diluted upon the consummation of our initial Business Combination, when the Founder Shares are converted
into Public Shares.
The following table shows the Public Shareholders
and our Sponsors investment per share and how these compare to the implied value of one Class A Ordinary Share upon the completion
of our initial Business Combination. The following table assumes that (i) our valuation is $165,600,000 (which is the amount we would
have in the Trust Account for our initial Business Combination following payment of the deferred underwriting commissions), (ii) no interest
is earned on the funds held in the Trust Account, (iii) no Public Shares are redeemed in connection with our initial Business Combination
and (iv) all Founder Shares are held by our initial shareholders upon completion of our initial Business Combination, and does not take
into account other potential impacts on our valuation at the time of the initial Business Combination, such as (i) the value of our public
and Private Placement Warrants, (ii) the trading price of our Class A Ordinary Shares, (iii) the initial Business Combination transaction
costs (other than the payment of up to $6,900,000 of deferred underwriting commissions), (iv) any equity issued or cash paid to the targets
sellers, (v) any equity issued to other third party investors, or (vi) the targets business itself.
|
Public Shares: | |
| 17,250,000 | | |
|
Founder Shares: | |
| 5,750,000 | | |
|
Total shares: | |
| 23,000,000 | | |
|
Total funds in trust available for initial Business Combination (after payment of deferred underwriting commissions): | |
$ | 165,600,000 | | |
|
Public Shareholders investment per Class A Ordinary Share: | |
$ | 10.00 | | |
|
Sponsors investment per Class B Ordinary Share(1): | |
$ | 0.65 | | |
|
Initial implied value per Public Share: | |
$ | 10.00 | | |
|
Implied value per share upon consummation of initial Business Combination: | |
$ | 7.20 | |
|
(1) | The total investment of the Sponsor in the
equity of the Company, inclusive of the purchase of Founder Shares totaling $25,000 and the
Sponsors $3,725,000 investment in the Private Placement Warrants, is $3,750,000. | |
Based on these assumptions, each Class A Ordinary
Share would have an implied value of $7.20 per share upon completion of our initial Business Combination, representing an approximately
28% decrease from the initial implied value of $10.00 per Public Share. While the implied value of $7.20 per Class A Ordinary Share upon
completion of our initial Business Combination would represent a dilution to our Public Shareholders, this would represent a significant
increase in value for our Sponsor relative to the price it paid for each Founder Share. At $7.20 per Class A Ordinary Share, the 5,540,000
Class A Ordinary Shares that the Sponsor would own upon completion of our initial Business Combination (after automatic conversion of
the 5,540,000 Founder Shares) would have an aggregate implied value of approximately $39,888,000. As a result, even if the trading price
of our Class A Ordinary Shares significantly declines, the value of the Founder Shares held by our Sponsor will be significantly greater
than the amount our Sponsor paid to purchase such shares. In addition, our Sponsor could potentially recoup its entire investment in
our company even if the trading price of our Class A Ordinary Shares after the initial Business Combination is as low as $0.65 per share.
As a result, our Sponsor is likely to earn a substantial profit on its investment in us upon disposition of its Class A Ordinary Shares
even if the trading price of our Class A Ordinary Shares declines after we complete our initial Business Combination. Our Sponsor may
therefore be economically incentivized to complete 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 Shareholders
paid for their Public Shares.
45
This dilution would increase to the extent that
the anti-dilution provisions of the Founder Shares result in the issuance of Class A Ordinary Shares on a greater than one-to-one basis
upon conversion of the Founder Shares at the time of our initial Business Combination and would become exacerbated to the extent that
Public Shareholders seek redemptions from the trust for their Public Shares. In addition, because of the anti-dilution protection in
the Founder Shares, any equity or equity-linked securities issued in connection with our initial Business Combination would be disproportionately
dilutive to our Class A Ordinary Shares.
**
*The value of the Founder Shares following
completion of our initial Business Combination is likely to be substantially higher than the nominal price paid for them, even if the
trading price of our ordinary shares at such time is substantially less than $10.00 per Public Share.*
As a result of the IPO, our Sponsor has invested
in us an aggregate of $3,750,000, comprised of the $25,000 purchase price for the Founder Shares and the $3,725,000 purchase price for
the Private Placement Warrants. Assuming a trading price of $10.00 per Public Share upon consummation of our initial Business Combination,
the 5,540,000 Founder Shares would have an aggregate implied value of $55,400,000. Even if the trading price of our ordinary shares
were as low as $0.65 per share, and the Private Placement Warrants are worthless, the value of the Founder Shares would be equal to our
Sponsors aggregate initial investment in us. As a result, our Sponsor is likely to be able to make a substantial profit on its
investment in us at a time when our Public Shares have lost significant value. Accordingly, members of our management team, who own interests
in our Sponsor, may be more willing to pursue a Business Combination with a riskier 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 Shareholders paid for their Public Shares.
**
*Because we are incorporated under the laws
of the Cayman Islands, you may face difficulties in protecting your interests, and your ability to protect your rights through the U.S.
federal courts may be limited.*
We are an exempted company incorporated under
the laws of the Cayman Islands. As a result, it may be difficult for investors to effect service of process within the United States
upon our directors or officers, or enforce judgments obtained in the United States courts against our directors or officers.
Our corporate affairs are governed by our amended
and restated memorandum and articles of association, the Companies Act (As Revised) of the Cayman Islands and the common law of the Cayman
Islands. We will also be subject to the federal securities laws of the United States. The rights of shareholders to take action against
the directors, actions by minority shareholders and the fiduciary responsibilities of our directors to us under Cayman Islands law are
to a large extent governed by the common law of the Cayman Islands. The common law of the Cayman Islands is derived in part from comparatively
limited judicial precedent in the Cayman Islands as well as from English common law, the decisions of whose courts are of persuasive
authority, but are not binding on a court in the Cayman Islands.
The rights of our shareholders and the fiduciary
responsibilities of our directors under Cayman Islands law are different from what they would be under statutes or judicial precedent
in some jurisdictions in the United States. In particular, the Cayman Islands has a different body of securities laws as compared to
the United States, and certain states, such as Delaware, may have more fully developed and judicially interpreted bodies of corporate
law. In addition, Cayman Islands companies may not have standing to initiate a shareholders derivative action in a Federal court of the
United States.
46
We have been advised by Appleby (Cayman) Ltd.,
our Cayman Islands legal counsel, that the courts of the Cayman Islands are unlikely (i) to recognize or enforce against us judgments
of courts of the United States predicated upon the civil liability provisions of the federal securities laws of the United States or
any state; and (ii) in original actions brought in the Cayman Islands, to impose liabilities against us predicated upon the civil liability
provisions of the federal securities laws of the United States or any state, so far as the liabilities imposed by those provisions are
penal in nature. In those circumstances, although there is no statutory enforcement in the Cayman Islands of judgments obtained in the
United States, the courts of the Cayman Islands will recognize and enforce a foreign money judgment of a foreign court of competent jurisdiction
without retrial on the merits based on the principle that a judgment of a competent foreign court imposes upon the judgment debtor an
obligation to pay the sum for which judgment has been given provided certain conditions are met. For a foreign judgment to be enforced
in the Cayman Islands, such judgment must be final and conclusive and for a liquidated sum, and must not be in respect of taxes or a
fine or penalty, inconsistent with a Cayman Islands judgment in respect of the same matter, impeachable on the grounds of fraud or obtained
in a manner, or be of a kind the enforcement of which is, contrary to natural justice or the public policy of the Cayman Islands (awards
of punitive or multiple damages may well be held to be contrary to public policy). A Cayman Islands Court may stay enforcement proceedings
if concurrent proceedings are being brought elsewhere.
As a result of all of the above, Public Shareholders
may have more difficulty in protecting their interests in the face of actions taken by management, members of the board of directors
or controlling shareholders than they would as Public Shareholders of a United States company.
**
*After our initial Business Combination,
it is possible that a majority of our directors and officers will live outside the United States and all of our assets will be located
outside the United States; therefore, investors may not be able to enforce federal securities laws or their other legal rights.*
It is possible that after our initial Business
Combination, a majority of our directors and officers will reside outside of the United States and all of our assets will be located
outside of the United States. As a result, it may be difficult, or in some cases not possible, for investors in the United States to
enforce their legal rights, to effect service of process upon all of our directors or officers or to enforce judgments of United States
courts predicated upon civil liabilities and criminal penalties on our directors and officers under United States laws.
**
*Provisions in our amended and restated
memorandum and articles of association may inhibit a takeover of us, which could limit the price investors might be willing to pay in
the future for our Class A Ordinary Shares and could entrench management.*
Our amended and restated memorandum and articles
of association contain provisions that may discourage unsolicited takeover proposals that shareholders may consider to be in their best
interests. These provisions include the ability of the board of directors to designate the terms of and issue new series of preference
shares, which 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.
**
*Our amended and restated memorandum and
articles of association provide that the courts of the Cayman Islands are the exclusive forums for certain disputes between us and our
shareholders, which could limit our shareholders ability to obtain a favorable judicial forum for complaints against us or our
directors, officers or employees.*
Our amended and restated memorandum and articles
of association provide that unless we consent in writing to the selection of an alternative forum, the courts of the Cayman Islands shall
have exclusive jurisdiction over any claim or dispute arising out of or in connection with our amended and restated memorandum and articles
of association or otherwise related in any way to each shareholders shareholding in us, including but not limited to (i) any derivative
action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of any fiduciary or other duty owed by any of
our current or former directors, officers or other employees to us or our shareholders, (iii) any action asserting a claim arising pursuant
to any provision of the Companies Act or our amended and restated memorandum and articles of association, or (iv) any action asserting
a claim against us governed by the internal affairs doctrine (as such concept is recognized under the laws of the United States of America)
and that each shareholder irrevocably submits to the exclusive jurisdiction of the courts of the Cayman Islands over all such claims
or disputes. The forum selection provision in our amended and restated memorandum and articles of association does not apply to actions
or suits brought to enforce any liability or duty created by the Securities Act, Exchange Act or any claim for which the federal district
courts of the United States of America are, as a matter of the laws of the United States of America, the sole and exclusive forum for
determination of such a claim.
47
Our amended and restated memorandum and articles
of association also provide that, without prejudice to any other rights or remedies that we may have, each of our shareholders acknowledges
that damages alone would not be an adequate remedy for any breach of the selection of the courts of the Cayman Islands as exclusive forum
and that accordingly we shall be entitled, without proof of special damages, to the remedies of injunction, specific performance or other
equitable relief for any threatened or actual breach of the selection of the courts of the Cayman Islands as exclusive forum.
This choice of forum provision may increase a
shareholders cost and limit the shareholders ability to bring a claim in a judicial forum that it finds favorable for disputes
with us or our directors, officers or other employees, which may discourage lawsuits against us and our directors, officers and other
employees. Any person or entity purchasing or otherwise acquiring any of our shares or other securities, whether by transfer, sale, operation
of law or otherwise, shall be deemed to have notice of and have irrevocably agreed and consented to these provisions. There is uncertainty
as to whether a court would enforce such provisions, and the enforceability of similar choice of forum provisions in other companies
charter documents has been challenged in legal proceedings. It is possible that a court could find this type of provisions to be inapplicable
or unenforceable, and if a court were to find this provision in our amended and restated memorandum and articles of association to be
inapplicable or unenforceable in an action, we may incur additional costs associated with resolving the dispute in other jurisdictions,
which could have an adverse effect on our business and financial performance.
**
*Economic substance legislation of the Cayman
Islands may adversely impact us or our operations.*
The Cayman Islands, together with several other
non-European Union jurisdictions, have introduced legislation aimed at addressing concerns raised by the Organization for Economic Co-operation
and Developments (OECD) Base Erosion and Profit Shifting (BEPS) initiative as to offshore structures engaged in certain activities
which attract profits without real economic activity. The International Tax Co-operation (Economic Substance) Act, (As Revised) (the
Economic Substance Act) contains economic substance requirements for in-scope Cayman Islands entities which are engaged
in certain relevant activities. As we are a Cayman Islands company, our compliance obligations will include filing an annual
notification, which need to state whether we are carrying out any relevant activities and if so, whether we have satisfied economic substance
tests to the extent required under the Economic Substance Act. If the Cayman Islands Tax Information Authority determines that the Company
or any of its Cayman Islands subsidiaries has failed to meet the requirements imposed by the Economic Substance Act, the Company may
face significant financial penalties, restriction on the regulation of its business activities and/or may be struck off as a registered
entity in the Cayman Islands.
As it is still a relatively new regime, it is
anticipated that the Economic Substance Act and associated guidance will evolve and may be subject to further clarification and amendments.
We may need to allocate additional resources to keep updated with these developments, and may have to make changes to our operations
in order to comply with all requirements under the Economic Substance Act. Failure to satisfy these requirements may subject us to penalties
under the Economic Substance Act.
In addition, in order to comply with legislation,
regulations and guidance aimed at the prevention of money laundering, terrorist financing and proliferation financing, and sanctions
legislation, the Company may be required to adopt and maintain anti-money laundering procedures, and may require subscribers and their
beneficial owners, controllers or authorized persons (where applicable) (Related Persons) to provide evidence to verify
their identity. Where permitted, and subject to certain conditions, the Company may also rely on, or delegate to, a suitable person the
maintenance of our anti-money laundering procedures (including the acquisition of due diligence information).
The Company reserves the right to request such
information as is necessary to verify the identity of a subscriber or their Related Persons. In the event of delay or failure on the
part of the subscriber in producing any information required for verification purposes, we may refuse to accept the application, in which
case any funds received will be returned without interest to the account from which they were originally debited.
The Company also reserves the right to refuse
to make any redemption payment to a shareholder if directors or officers suspect or are advised that the payment of redemption proceeds
to such shareholder might result in a breach of applicable anti-money laundering, sanctions or other laws or regulations by any person
in any relevant jurisdiction, or if such refusal is considered necessary or appropriate to ensure compliance with any such laws or regulations
in any applicable jurisdiction.
48
If any person in the Cayman Islands knows or
suspects, or has reasonable grounds for knowing or suspecting that another person is engaged in criminal conduct or money laundering,
or is involved with terrorism or terrorist financing and property, and the information for that knowledge or suspicion came to their
attention in the course of business in the regulated sector, or other trade, profession, business or employment, the person will be required
to report such knowledge or suspicion to (i) the Financial Reporting Authority of the Cayman Islands (FRA), pursuant to
the
Proceeds of Crime Act (As Revised) of the Cayman
Islands, if the disclosure relates to criminal conduct or money laundering, or (ii) a police officer of the rank of constable or higher,
or the FRA, pursuant to the Terrorism Act (As Revised) of the Cayman Islands, if the disclosure relates to involvement with terrorism
or terrorist financing and property.
**
*The U.S. federal income tax consequences
to a shareholder of a redemption of Class A Ordinary Shares will depend on such investors particular facts and circumstances.*
The U.S. federal income tax treatment of a redemption
of Class A Ordinary Shares to a shareholder will depend on whether the redemption qualifies as a sale of such Class A Ordinary Shares
under Section 302(a) of the Internal Revenue Code of 1986, as amended (the Code), which will depend largely on the total
number of our shares treated as held by the shareholder electing to redeem Class A Ordinary Shares (including any shares constructively
owned by the holder as a result of owning Private Placement Warrants or Public Warrants or otherwise) relative to all of our shares outstanding
both before and after the redemption. If such redemption is not treated as a sale of Class A Ordinary Shares for U.S. federal income
tax purposes, the redemption will instead be treated as a corporate distribution of cash from us. For more information about the U.S.
federal income tax treatment of the redemption of Class A Ordinary Shares, see the sections entitled *Certain Income Tax Considerations
- Material United States Federal Income Tax Considerations - U.S. Holders - Redemption of Class A Ordinary Shares or Certain
Income Tax Considerations - Material United States Federal Income Tax Considerations - Non-U.S. Holders,* as applicable.
**
*We may amend the terms of the warrants
in a manner that may be adverse to holders of Public Warrants with the approval by the holders of at least 50% of the then outstanding
Public Warrants. As a result, the exercise price of your warrants could be increased, the exercise period could be shortened, the number
of Class A Ordinary Shares purchasable upon exercise of a warrant could be decreased.*
Our warrants were issued in registered form under
a warrant agreement between Efficiency, as warrant agent, and us. The warrant agreement provides that the terms of the warrants may be
amended without the consent of any holder for the purpose of (i) curing any ambiguity or to correct any defective provision or mistake,
including to conform the provisions of the warrant agreement to the description of the terms of the warrants and the warrant agreement,
(ii) adjusting the provisions relating to cash dividends on ordinary shares as contemplated by and in accordance with the warrant agreement
or (iii) adding or changing any provisions with respect to matters or questions arising under the warrant agreement as the parties to
the warrant agreement may deem necessary or desirable, provided that the approval by the holders of at least 50% of the then outstanding
Public Warrants is required to make any such change. Accordingly, we may amend the terms of the Public Warrants in a manner adverse to
a holder of Public Warrants if holders of at least 50% 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 50% 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 shares,
shorten the exercise period, decrease the number of Class A Ordinary Shares purchasable upon exercise of a Public Warrant.
**
*Our 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 warrants, which could limit the ability of warrant holders
to obtain a favorable judicial forum for disputes with our company.*
Our warrant agreement provides that, subject
to applicable law, (i) any action, proceeding or claim against us arising out of or relating in any way to the warrant agreement, including
under the Securities Act, will be brought and enforced in the courts of the State of 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. With respect to any complaint asserting a cause of action arising under the Securities Act or the rules and regulations
promulgated thereunder, we note, however, that there is uncertainty as to whether a court would enforce this provision and that investors
cannot waive compliance with the federal securities laws and the rules and regulations thereunder. Section 22 of the Securities Act creates
concurrent jurisdiction for state and federal courts over all suits brought to enforce any duty or liability created by the Securities
Act or the rules and regulations thereunder.
49
Notwithstanding the foregoing, these provisions
of the warrant agreement do 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 warrants shall be deemed to have notice of and to have consented to the forum provisions
in our warrant agreement. If any action, the subject matter of which is within the scope the forum provisions of the warrant agreement,
is filed in a court other than a court of the State of 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 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 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.
**
*A provision of our warrant agreement may
make it more difficult for us to consummate an initial Business Combination.*
If (i) we issue additional ordinary shares or
equity-linked securities for capital raising purposes in connection with the closing of our initial Business Combination at a Newly Issued
Price of less than $9.20 per Class A Ordinary Share, (ii) the aggregate gross proceeds from such issuances represent more than 60% of
the total equity proceeds, and interest thereon, available for the funding of our initial Business Combination, and (iii) the Market
Value of our Class A Ordinary Shares is below $9.20 per share, then the exercise price of the warrants will be adjusted (to the nearest
cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price, and the $18.00 per share redemption trigger prices
described in Exhibit 4.5 *Description of Securities* to this Form 10-K will be adjusted (to the nearest cent) to be
equal to 180% of the higher of the Market Value and the Newly Issued Price. This may make it more difficult for us to consummate an initial
Business Combination with a target business.
**
*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 prior to their expiration, at a price of $0.01 per warrant, provided that the closing price of our Class A Ordinary Shares
equals or exceeds $18.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price
of a warrant as described elsewhere in this Form 10-K) for any 20 trading days within a 30 trading-day period commencing at least 30
days after completion of our initial Business Combination and ending on the third trading day prior to the date on which we give proper
notice of such redemption to the warrants holders and provided certain other conditions are met. We will not redeem the warrants as described
above unless a registration statement under the Securities Act covering the issuance of the Class A Ordinary Shares issuable upon exercise
of the warrants is then effective and a current prospectus relating to those Class A Ordinary Shares is available throughout the measurement
period. If and when the warrants become redeemable by us, we may not exercise our redemption right if the issuance of ordinary shares
upon exercise of the warrants is not exempt from registration or qualification under applicable state blue sky laws or we are unable
to effect such registration or qualification. We will use our best efforts to register or qualify such ordinary shares under the blue
sky laws of the state of residence in those states in which the warrants were offered by us in the IPO. 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.
**
50
**
*Our warrants may have an adverse effect
on the market price of our Class A Ordinary Shares and make it more difficult to effectuate our initial Business Combination.*
We issued warrants to purchase 8,625,000 of Class
A Ordinary Shares in connection with the IPO and, simultaneously with the closing of the IPO, we issued in a private placement an aggregate
of 5,450,000 Private Placement Warrants, at $1.00 per warrant. In addition, if our Sponsor or an affiliate of our Sponsor or certain
of our officers or directors makes any working capital loans (as described below in *Item 13. Certain Relationships and Related
Transactions, and Director Independence*), such lender may convert those loans into up to an additional 1,500,000 Private Placement
Warrants, at the price of $1.00 per warrant. To the extent we issue ordinary shares to effectuate a business transaction, the potential
for the issuance of a substantial number of additional Class A Ordinary Shares upon exercise of these warrants could make us a less attractive
acquisition vehicle to a target business. Such warrants, when exercised, will increase the number of issued and outstanding Class A Ordinary
Shares and reduce the value of the Class A Ordinary Shares issued to complete the business transaction. Therefore, our warrants may make
it more difficult to effectuate a business transaction or increase the cost of acquiring the target business.
**
*Holders of Class A Ordinary Shares will
not be entitled to vote on continuing the Company in a jurisdiction outside of the Cayman Islands.*
As holders of our Class A Ordinary Shares, our
Public Shareholders will not have the right to vote on the appointment of directors and continuing our company in a jurisdiction outside
the Cayman Islands (including any special resolution required to amend our constitutional documents or to adopt new constitutional documents,
in each case, as a result of our approving a transfer by way of continuation in a jurisdiction outside the Cayman Islands). In addition,
prior to our initial Business Combination, holders of a majority of our Founder Shares may remove a member of the board of directors
for any reason. Accordingly, you will not have any say in the management of our company prior to the consummation of an initial Business
Combination.
**
*You will not be permitted to exercise your
warrants unless we register and qualify the underlying Class A Ordinary Shares or certain exemptions are available.*
If the issuance of the Class A Ordinary Shares
upon exercise of the warrants is not registered, qualified or exempt from registration or qualification under the Securities Act and
applicable state securities laws, holders of warrants will not be entitled to exercise such warrants and such warrants may have no value
and expire worthless. In such event, holders who acquired their warrants as part of a purchase of Units will have paid the full unit
purchase price solely for the Class A Ordinary Shares included in the Units.
We registered the Class A Ordinary Shares issuable
upon exercise of the warrants in the registration statement for our IPO, because the warrants will become exercisable 30 days after the
completion of our initial Business Combination, which may be within one year of the IPO. However, because the warrants will be exercisable
until their expiration date of up to five years after the completion of our initial Business Combination, in order to comply with the
requirements of Section 10(a)(3) of the Securities Act following the consummation of our initial Business Combination, under the terms
of the warrant agreement, we have agreed that, as soon as practicable, but in no event later than 20 business days, after the closing
of our initial Business Combination, we will use our commercially reasonable efforts to file with the SEC a post-effective amendment
to the registration statement of our IPO, or a new registration statement covering the registration under the Securities Act of the Class
A Ordinary Shares issuable upon exercise of the warrants and thereafter will use our commercially reasonable 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 Ordinary Shares issuable upon exercise of the warrants until the expiration of the warrants in accordance with the provisions
of the warrant agreement. We cannot assure you that we will be able to do so if, for example, any facts or events arise which represent
a fundamental change in the information set forth in the registration statement or prospectus, the financial statements contained or
incorporated by reference therein are not current or correct or the SEC issues a stop order.
If the Class A Ordinary Shares issuable upon
exercise of the warrants are not registered under the Securities Act, under the terms of the warrant agreement, holders of warrants who
seek to exercise their warrants will not be permitted to do so for cash and, instead, will be required to do so on a cashless basis in
accordance with Section 3(a)(9) of the Securities Act or another exemption.
51
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 Class A Ordinary Shares are at the time
of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition of 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 commercially reasonable
efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available.
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 Class A Ordinary Shares
from such exercise than if you were to exercise such warrants for cash.*
The 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 Class A Ordinary Shares issuable upon
exercise of the warrants are not registered under the Securities Act in accordance with the terms of the warrant agreement; (ii) if we
have so elected and the Class A Ordinary Shares are at the time of any exercise of a warrant not listed on a national securities exchange
such that they satisfy the definition of 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 Class A Ordinary Shares equal to the
quotient obtained by dividing (x) the product of the number of Class A Ordinary Shares underlying the warrants, multiplied by the excess
of the fair market value of our Class A Ordinary Shares (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 Class A Ordinary
Shares 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 Class
A Ordinary Shares from such exercise than if you were to exercise such warrants for cash.
**
*The grant of registration rights to our
Sponsor, the underwriter and other holders of our Private Placement Warrants may make it more difficult to complete our initial Business
Combination, and the future exercise of such rights may adversely affect the market price of our Class A Ordinary Shares**.*
Pursuant to an agreement entered into concurrently
with the issuance and sale of the securities in the IPO, our Sponsor, the underwriter of the IPO and their permitted transferees can
demand that we register the Class A Ordinary Shares into which Founder Shares are convertible, holders of our Private Placement Warrants
and their permitted transferees can demand that we register the Private Placement Warrants and the Class A Ordinary Shares issuable upon
exercise of the Private Placement Warrants or holders of securities that may be issued upon conversion of working capital loans and their
permitted transferees may demand that we register such Units, shares, warrants or the Class A Ordinary Shares issuable upon exercise
of such warrants and any other securities of the Company acquired by them prior to the consummation of our initial Business Combination.
We will bear the cost of registering these securities. The registration and availability of such a significant number of securities for
trading in the public market may have an adverse effect on the market price of our Class A Ordinary Shares. In addition, the existence
of the registration rights may make our initial Business Combination more costly or difficult to conclude. This is because the shareholders
of the target business may increase the equity stake they seek in the combined entity or ask for more cash consideration to offset the
negative impact on the market price of our Class A Ordinary Shares that is expected when the ordinary shares owned by our initial shareholders,
holders of our Private Placement Warrants or holders of our working capital loans or their respective permitted transferees are registered.
52
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 Cayman Islands with no operating results, and we did not commence operations until obtaining funding through the IPO.
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 respective affiliates, including investments and transactions in which they have participated and businesses with which they
have been associated, may not be indicative of future performance of an investment in the Company.*
Information regarding our management team and
their respective affiliates, including investments and transactions in which they have participated and businesses with which they have
been associated, is presented for informational purposes only. Any past experience and performance by our management team and their respective
affiliates and the businesses with which they have been associated, is not a guarantee that we will be able to successfully identify
a suitable candidate for our initial Business Combination, that we will be able to provide positive returns to our shareholders, or of
any results with respect to any initial Business Combination we may consummate. You should not rely on the historical experiences of
our management team and their respective affiliates, including investments and transactions in which they have participated and businesses
with which they have been associated, as indicative of the future performance of an investment in us or as indicative of every prior
investment by each of the members of our management team or their respective affiliates. The market price of our securities may be influenced
by numerous factors, many of which are beyond our control, and our shareholders may experience losses on their investment in our securities.
**
*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.
**
53
**
*We may be a passive foreign investment
company, or PFIC, which could result in adverse United States federal income tax consequences to U.S. investors.*
If we are a PFIC for any taxable year (or portion
thereof) that is included in the holding period of a U.S. Holder (as defined in the section of the IPO registration statement captioned
*Certain Income Tax Considerations Material United States Federal Income Tax Considerations U.S. Holders*)
of our Class A Ordinary Shares or warrants, the U.S. Holder may be subject to adverse U.S. federal income tax consequences and may be
subject to additional reporting requirements. Our PFIC status for our current and subsequent taxable years may depend on whether we qualify
for the PFIC start-up exception (see the section of the IPO registration statement captioned *Certain Income Tax Considerations
Material United States Federal Income Tax Considerations U.S. Holders Passive Foreign Investment Company Rules*).
Depending on the particular circumstances the application of the start-up exception may be subject to uncertainty, and there cannot be
any assurance that we will qualify for the start-up exception. Our actual PFIC status for any taxable year, however, will not be determinable
until after the end of such taxable year (and, in the case of the start-up exception, potentially not until after the two taxable years
following our current taxable year). Accordingly, there can be no assurances with respect to our status as a PFIC for our current taxable
year or any subsequent taxable year. Moreover, if we determine that we are a PFIC for any taxable year, upon written request, we will
endeavor to provide to a U.S. Holder such information as the Internal Revenue Service (the IRS) may require, including
a PFIC annual information statement, in order to enable the U.S. Holder to make and maintain a qualified electing fund
election, but there can be no assurance that we will timely provide such required information, and under current law such election would
be unavailable with respect to our warrants. We urge U.S. investors to consult their own tax advisors regarding the possible application
of the PFIC rules in general, and in particular to our warrants. For a more detailed explanation of the tax consequences of PFIC classification
to U.S. Holders, see the section of the IPO registration statement captioned *Certain Income Tax Considerations Material
United States Federal Income Tax Considerations U.S. Holders Passive Foreign Investment Company Rules.*
**
*The Excise Tax could be imposed on redemptions
of our ordinary shares if we were to become a covered corporation in the future.*
The Inflation Reduction Act of 2022, 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 and certain domestic subsidiaries of publicly traded
foreign (i.e., non-U.S.) corporations). The Excise Tax is imposed on the repurchasing corporation itself, not its stockholders from which
the stock is repurchased. The amount of the Excise Tax is generally 1% of the fair market value of the shares repurchased at the time
of the repurchase. However, for purposes of calculating the Excise Tax, repurchasing corporations are permitted to net the fair market
value of certain new stock issuances against the fair market value of stock repurchases during the same taxable year (the netting
rule). In addition, certain exceptions apply to the Excise Tax. The U.S. Department of the Treasury (the Treasury)
has authority to provide regulations and other guidance to carry out, and prevent the abuse or avoidance of, the Excise Tax. In June
of 2024, the Treasury and IRS issued final Treasury regulations on the reporting and payment of the Excise Tax. In November of 2025,
the Treasury and IRS issued final Treasury regulations on the computation of the Excise Tax.
We are currently not a covered corporation
for purposes of the Excise Tax. Accordingly, we generally would not be subject to the Excise Tax on a redemption of our stock, whether
in connection with the consummation of our initial Business Combination or otherwise. If we were to become a covered corporation
in the future, whether in connection with the consummation of our initial Business Combination with a U.S. company (including if we were
to redomicile as a U.S. corporation in connection therewith) or otherwise, whether and to what extent we would be subject to the Excise
Tax on a redemption of our stock would depend on a number of factors, including (i) whether the redemption is treated as a repurchase
of stock for purposes of the Excise Tax, (ii) the fair market value of the redemption treated as a repurchase of stock, (iii) the structure
of our initial Business Combination, (iv) the nature and amount of any PIPE or other equity issuances (whether in connection
with our initial Business Combination or otherwise) issued within the same taxable year of a redemption treated as a repurchase of stock
and (v) other guidance from the Treasury. As noted above, the Excise Tax would be payable by the repurchasing corporation, and not by
the redeeming holder. The imposition of the Excise Tax on us as a result of redemptions by us could, however, reduce the amount of cash
available to the target business in connection with our initial Business Combination, which could cause investors in our securities who
do not redeem or the other shareholders of the combined company to economically bear the impact of such Excise Tax. However, we will
not use the proceeds placed in the Trust Account, or the interest earned on the proceeds placed in the Trust Account, to pay for possible
Excise Tax or any other fees or taxes that may be levied on us on any redemptions or stock buybacks by us pursuant to any current, pending
or further rules or laws, including without limitation any Excise Tax, prior to release of such funds from the Trust Account following
our initial Business Combination.
**
54
**
*We are an emerging growth company and a
smaller reporting company within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure requirements
available to emerging growth companies or smaller reporting companies, this could make our securities less attractive to investors and
may make it more difficult to compare our performance with other public companies.*
We are an emerging growth company
within the meaning of the Securities Act, as modified by the JOBS Act, and we may take advantage of certain exemptions from various reporting
requirements that are applicable to other public companies that are not emerging growth companies, including, but not limited to, not
being required to comply with the auditor 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 shareholder approval of any golden parachute payments not previously
approved. As a result, our shareholders may not have access to certain information they may deem important. We could be an emerging growth
company for up to five years, although circumstances could cause us to lose that status earlier, including if the market value of our
Class A Ordinary Shares held by non-affiliates exceeds $700 million as of the prior June 30, in which case we would no longer be an emerging
growth company as of December 31 in the same year. 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 ordinary shares held by non-affiliates is equal to
or exceeds $250 million as of the prior June 30, or (2) our annual revenues equaled or exceeded $100 million during such completed fiscal
year and the market value of our ordinary shares held by non-affiliates is equal to or exceeds $700 million as of the prior June 30.
To the extent we take advantage of such reduced disclosure obligations, it may also make comparison of our financial statements with
other public companies difficult or impossible.
If we no longer qualify as an emerging growth
company, we may still be subject to reduced reporting requirements so long as we qualify as a smaller reporting company.
**
*Changes in the market for directors and
officers liability insurance could make it more difficult and more expensive for us to negotiate and complete an initial Business Combination.*
The market for directors and officers liability
insurance for special purpose acquisition companies has changed in ways adverse to us and our management team. 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. These trends may continue into the future.
55
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 Combination entitys
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.
**
*Recent increases in inflation in the United
States and elsewhere could make it more difficult for us to complete our initial Business Combination.*
Recent increases in inflation in the United States
and elsewhere may lead to increased price volatility for publicly traded securities, including ours, or other national, regional or international
economic disruptions, any of which could make it more difficult for us to complete our initial Business Combination.
Item 1B. Unresolved Staff Comments
None.
Item 1C. Cybersecurity
As a blank check company, we have no operations and therefore do not have any operations of our own that face cybersecurity threats. However, we do depend on the digital technologies of third parties, and as noted in *Item 1A. Risk Factors* of this Form 10-K, any sophisticated and deliberate attacks on, or security breaches in, systems or infrastructure or the cloud that we utilize, including those of third parties, could lead to corruption or misappropriation of our assets, proprietary information and sensitive or confidential data. Because of our reliance on the technologies of third parties, we also depend upon the personnel and the processes of third parties to protect against cybersecurity threats, and we have no personnel or processes of our own for this purpose. Our board of directors oversees risk for our Company, and before we make filings with the SEC, our board of directors reviews our risk factors, including the descriptions of the risks we face from cybersecurity threats, as described in *Item 1A. Risk Factors* of this Form 10-K.
Item 2. Properties
Our executive
offices are located at 17 State Street, Suite 4000, New York, New York 10004. Our executive offices are provided to us by our Sponsor,
and we have agreed to pay our Sponsor $30,000 per month for office space, utilities and secretarial and administrative support. We consider
our current office space adequate for our current operations.
Item 3. Legal Proceedings
There
is no material litigation, arbitration or governmental proceeding currently pending against us or any members of our management team
in their capacity as such.
Item 4. Mine Safety Disclosures
Not applicable.
56
Part
II
Item 5. Market for Registrants Common
Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities
Market Information
Our Units,
Class A Ordinary Shares, and Public Warrants are listed on Nasdaq under the symbols DYORU, DYOR and DYORW,
respectively.
Holders
As of March 13, 2026, there was 1 holder of record
of our Units, 1 holder of record of our Class A Ordinary Shares, 6 holders of record of our Class B Ordinary Shares, and 3 holders of
record of our warrants.
Dividends
We have
not paid any cash dividends on our ordinary shares to date and do not intend to pay cash dividends prior to the completion of an initial
Business Combination. The payment of cash dividends in the future will be dependent upon our revenues and earnings, if any, capital requirements
and general financial conditions subsequent to completion of an initial Business Combination. The payment of any cash dividends subsequent
to an initial Business Combination will be within the discretion of our board of directors at such time. Further, if we incur any indebtedness,
our ability to declare dividends may be limited by restrictive covenants we may agree to in connection therewith.
Securities Authorized for Issuance under
Equity Compensation Plans
None.
Recent Sales of Unregistered Securities
and Use of Proceeds from Registered Offerings
None.
Item 6. [Reserved]
Item 7. Managements Discussion and Analysis
of Financial Condition and Results of Operations
**
*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 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 Special Note Regarding Forward-Looking Statements, Item 1A. Risk Factors
and elsewhere in this Form 10-K.*
Overview
We are a blank check company incorporated in
the Cayman Islands on July11, 2025. We are formed for the purpose of effecting a merger, amalgamation, share exchange, asset acquisition,
share purchase, reorganization or similar business combination with one or more businesses. We may pursue an initial Business Combination
in any business or industry but we expect to target opportunities and companies that are in high-growth, high impact sectors that form
the backbone of the digital economy including Payment Gateways, Stablecoin, Exchanges, Crypto Miners, Crypto Holding and Trading, High
Performance Computing, Energy, and Crypto Treasury Strategy. We also have neither engaged in any operations nor generated any revenue
to date.
We expect to continue to incur significant costs
in the pursuit of our acquisition plans. We cannot assure you that our plans to complete a Business Combination will be successful.
57
Results of Operations
We have neither engaged in any operations nor
generated any revenues to date. Our only activities from July 11, 2025 (inception) through December 31, 2025 were organizational activities,
those necessary to prepare for the Initial Public Offering, described below, and identifying a target company for a Business Combination.
We do not expect to generate any operating revenues until after the completion of our Business Combination. We generate non-operating
income in the form of interest income on marketable securities held in the Trust Account. We incur expenses as a result of being a public
company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses.
For the period from July 11, 2025 (inception)
through December 31, 2025, we had a net income of $893,385, which consisted of interest earned on cash and securities held in the Trust
Account of $1,159,928, partially offset by general and administrative costs of $266,543.
Liquidity and Capital Resources
On October 30, 2025, we consummated the Initial
Public Offering of 17,250,000 Units, which includes the exercise by the underwriter of its over-allotment option in full in the amount
of 2,250,000 Units, at $10.00 per Unit, generating gross proceeds of $172,500,000. Simultaneously with the closing of the Initial Public
Offering, we consummated the sale of 5,450,000 Private Placement Warrants at a price of $1.00 per Private Placement Warrant, in a private
placement to the Sponsor and Cohen, as the underwriter, generating gross proceeds of $5,450,000.
Following the Initial Public Offering and the
sale of the Private Placement Warrants, a total of $172,500,000 was placed in the Trust Account. We incurred $10,861,223 in IPO related
costs, consisting of $3,450,000 of cash underwriting fees, $6,900,000 of deferred underwriting fees, and $511,223 of other costs.
We intend to use the funds held outside the Trust
Account primarily to identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel
to and from the offices, plants or similar locations of prospective target businesses or their representatives or owners, review corporate
documents and material agreements of prospective target businesses, and structure, negotiate and complete a Business Combination.
As of December 31, 2025, we had $1,247,831 cash
and a working capital surplus of $1,200,667.
For the period from July 11, 2025 (inception)
through December 31, 2025, net cash used in operating activities was $339,159. Net income of $ $893,385, interest earned on cash and securities
held in the Trust Account of $1,159,928 and changes in operating assets and liabilities used $72,616 of cash for operating activities.
In order to fund working capital deficiencies
or finance transaction costs in connection with a Business Combination, the Sponsor, or certain of our officers and directors or their
affiliates may, but are not obligated to, loan us funds as may be required. If we complete a Business Combination, we would repay such
loaned amounts. In the event that a Business Combination does not close, we may use a portion of the working capital held outside the
Trust Account to repay such loaned amounts but no proceeds from our Trust Account would be used for such repayment. Up to $1,500,000 of
such working capital loans may be convertible into private placement warrants of the post-Business Combination entity, at a price of $1.00
per warrant at the option of the lender, upon consummation of the initial Business Combination. The warrantswould be identical to
the Private Placement Warrants.
We do not believe we will need to raise additional
funds in order to meet the expenditures required for operating our business. However, if our estimate of the costs of identifying a target
business, undertaking in-depth due diligence and negotiating a Business Combination are less than the actual amount necessary to do so,
we may have insufficient funds available to operate our business prior to our Business Combination. Moreover, we may need to obtain additional
financing either to complete our Business Combination or because we become obligated to redeem a significant number of our Public Shares
upon consummation of our Business Combination, in which case we may issue additional securities or incur debt in connection with such
Business Combination.
58
Off-Balance Sheet Financing Arrangements
We have no obligations, assets or liabilities,
which would be considered off-balance sheet arrangements as of December 31, 2025. We do not participate in transactions that create relationships
with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established
for the purpose of facilitating off-balance sheet arrangements. We have not entered into any off-balance sheet financing arrangements,
established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any non-financial assets.
Contractual Obligations
Administrative Services and Indemnification
Agreement
We do not have any long-term debt, capital lease
obligations, operating lease obligations or long-term liabilities, other than an agreement to pay the Sponsor up to $30,000 per month
for office space and administrative support services during the Completion Window.
The Company agreed to indemnify and hold harmless
the Sponsor and its directors, officers, employees, principals, managers, partners, members, shareholders, equity holders, control persons,
affiliates, agents, advisors, consultants and representatives (the Indemnitees) from any claims, losses, liabilities, obligations,
causes of action, proceedings (whether pending or threatened), investigations, damages, awards, settlements, judgments, decrees, fees,
costs, penalties, amounts paid in settlement or expenses (including interest, assessments and other charges in connection therewith and
reasonable fees and disbursements of attorneys and other professional advisors and costs of suit) arising out of or relating to any pending
or threatened claim, action, suit, proceeding or investigation against any of them or in which any of them may be a participant or may
otherwise be involved (including as a witness) that arises out of or relates to (i) the IPO of the Companys securities or the
Companys operations or conduct of its business (including, for the avoidance of doubt, a Business Combination), or (ii) any claim
against the Sponsor alleging any expressed or implied management or endorsement by the Sponsor of any activities of the Company or any
express or implied association between the Sponsor, on the one hand, and the Company or any of its affiliates, on the other hand.
Underwriting Agreement
The underwriter is entitled to a deferred underwriting
discount of $0.20 per Unit sold in the IPO, or $3,450,000 in the aggregate. In addition, the underwriter is entitled to a deferred fee
of $0.40 per Unit, or $6,900,000 in the aggregate. The deferred fee will become payable to the underwriter from the amounts held in the
Trust Account solely in the event that the Company completes a Business Combination, but such $0.40 per Unit shall be due to the underwriter
solely on amounts remaining in the Trust Account following all properly submitted shareholder redemptions, including in connection with
the consummation of the Companys initial Business Combination, subject to the terms of the underwriting agreement.
Critical
Accounting Estimates
The preparation
of 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. Making estimates
requires management to exercise significant judgement. It is at least reasonably possible that the estimate of the effect of a condition,
situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its
estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could materially
differ from those estimates. As of December 31, 2025 the only estimates that we used were related to the inputs in the valuation of the
warrants as of the date of the IPO on October 30, 2025.
59
Ordinary
Shares Subject to Possible Redemption
We account for our ordinary shares subject to
possible redemption in accordance with the guidance in ASC Topic 480 Distinguishing Liabilities from Equity. Ordinary shares
subject to mandatory redemption is classified as a liability instrument and is measured at fair value. Conditionally redeemable ordinary
shares (including 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 in temporary equity. At all other
times, ordinary shares are classified as stockholders equity. Our Public Shares feature certain redemption rights that are considered
to be outside of our control and subject to occurrence of uncertain future events. Accordingly, as of December 31, 2025, the Public Shares
are presented at redemption value as temporary equity, outside of the shareholders equity (deficit) section of our balance sheet.
We recognize changes in redemption value immediately as they occur and adjusts the carrying value of the ordinary shares 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.
Warrants
We account for warrants as either equity-classified or liability-classified
instruments based on an assessment of the warrants specific terms and applicable authoritative guidance in ASC Topic480,
*Distinguishing Liabilities from Equity* (ASC480), and ASC815. The assessment considers whether the warrants
are freestanding financial instruments pursuant to ASC480, meet the definition of a liability pursuant to ASC480, and whether
the warrants meet all of the requirements for equity classification under ASC815, including whether the warrants are indexed to
the Companys own ordinary shares, among other conditions for equity classification. This assessment, which requires the use of
professional judgment, was conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants
are outstanding.
Recent Accounting Standards
**
Management does not believe that any other recently
issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on our financial statements.
Item 7A. Quantitative and Qualitative Disclosures
about Market Risk
We are
a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934, as amended, and are not required to provide
the information otherwise required under this item.
Item 8. Financial Statements and Supplementary
Data
This information
appears following Item 15 of this Report and is included herein by reference.
Item 9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure
None.
Item 9A. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures are designed
to ensure that information required to be disclosed by us in our Exchange Act reports is recorded, processed, summarized, and reported
within the time periods specified in the SECs rules and forms, and that such information is accumulated and communicated to our
management, including our principal executive officer and principal financial officer or persons performing similar functions, as appropriate
to allow timely decisions regarding required disclosure.
As required by Rules 13a-15 and 15d-15 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 effective, Accordingly, management believes that the financial statements includedin this Annual Report
present fairly in all material respects our financial position, results of operations and cash flows for the period presented.
Managements Report on Internal Controls
Over Financial Reporting
This Annual
Report on Form 10-K does not include a report of managements assessment regarding internal control over financial reporting or
an attestation report of our independent registered public accounting firm due to a transition period established by rules of the SEC
for newly public companies.
Changes in Internal Control over Financial
Reporting
There
were no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange
Act) during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal
control over financial reporting.
Item 9B. Other Information
None.
Item 9C. Disclosure Regarding Foreign Jurisdictions
that Prevent Inspections
Not applicable.
60
Part
III
Item 10. Directors, Executive Officers and
Corporate Governance Officers and Directors
Our executive officers and
directors are as follows:
|
NAME |
|
AGE |
|
POSITION | |
|
Michael Singer |
|
59 |
|
Chief Executive Officer and Chairman | |
|
Glenn Worman |
|
67 |
|
Chief Financial Officer | |
|
Sam Cassatt |
|
41 |
|
Director | |
|
Daniel Hume |
|
59 |
|
Director | |
|
Lok Lee |
|
53 |
|
Director | |
*Michael Singer*,59,
has served as our Chief Executive Officer and Executive Chairman since July2025. Mr.Singer is currently the Managing Partner
of Insight Private Equity Funds and Alternative Insight, LLC, positions he has held since April 2018 and October 2017, respectively.
Previously Mr.Singer was the Chief Executive Officer and Executive Chairman of Insight Acquisition Corp from its formation in April2021
through its successful business combination in December2024. From May 2017 to February 2022, Mr.Singer was Vice Chairman
of the board of directors of National Holdings Corp. Mr.Singer previously served as Chief Executive Officer and President of the
Ramius Capital Group division of Cowen Investment Management, an alternative investment advisory platform, from October 2012 to January
2017. Mr.Singer previously served as co-President of Ivy Asset Management and Senior Managing Director and Executive Committee
Member of Weiss, Peck& Greer. Mr.Singer received a J.D. from the Emory University School of Law and a B.S. in accounting
from Penn State University. We believe Mr.Singer is qualified to serve on our board of directors because of his extensive experience
within the alternative investment management industry.
**
*Glenn
Worman*,67, has served as our Chief Financial Officer since July2025. Mr.Worman is currently the Chief
Executive Officer of GCW Consulting LLC. Since January 2026 and August 2025, Mr. Worman has served as the Chief Financial Officer of
Arete Wealth Inc. and K2 Capital Acquisition Corporation, respectively. Mr. Worman was a Partner in the NewYork office of
SeatonHill Partners, LP from October2022 through November 2025. Mr. Worman served as the Chief Financial Officer of Drugs Made
in America Acquisition Corp. from July 2024 through October 2025 and the Chief Financial Officer of Drugs Made in America
Acquisition II Corp. from July 2025 through October 2025. Mr.Worman also served as the Chief Financial Officer of Orion
Innovations Corp., a private medical device company, from February2025 through September 2025. From April2024 to
December2024, Mr.Worman served as Chief Financial Officer of Insight Acquisition Corp., a special purpose acquisition
company. Between May2015 and March2022, Mr.Worman served as the Chief Financial Officer and President of National
Holdings Corporation. Previously, Mr.Worman was the Chief Financial Officer of the Americas for ICAP, plc., from May2011
to March2015. Mr.Worman has held various other senior positions at, among other companies, Deutsche Bank, Morgan
Stanley, and Merrill Lynch. Mr.Worman earned a B.S. from Ramapo College of New Jersey and an MBA from Fairleigh Dickinson
University.
**
*Sam Cassatt*,41,
has served on our board of directors since October28, 2025. Mr.Cassatt founded Layer Labs (Cayman) Ltd., which focuses on
decentralized technologies and building infrastructure to support the evolution of the web3 ecosystem, in June2024 and served as
its Chief Business Officer and as a director until July 2024. Mr.Cassatt currently serves as an Advisor to Layer Labs. Previously,
Mr.Cassatt founded and served as Chairman and President of Alignment Engine Inc., a high-performance computing company that builds
novel hardware architectures serving web3 and AI workloads, from March2021 to May2023. From February2015 to November2019,
Mr.Cassatt was the Chief Strategy Officer at ConsenSys AG, an Ethereum development firm. Prior to that, Mr.Cassatt served
as Chief Technology Officer of Atmospheir from January2014 to February2015. Mr.Cassatt earned a B.S. in computer science
from Johns Hopkins University. We believe Mr.Cassatt is qualified to serve on our board of directors because of his experience
with blockchain technology, decentralized systems and digital finance.
**
61
**
*Daniel Hume*,59,
has served on our board of directors since October28, 2025. Mr.Hume currently serves as the Managing Partner of Kirby McInerney,
LLP, where his practice focuses on securities law regulation, structured finance, antitrust, and civil litigation, and where he has practiced
law since 1995. Since June2015, Mr.Hume has served as a director of TG Therapeutics, Inc., a public biopharmaceutical company
and Lirum Therapeutics, a private biopharmaceutical company. Previously, Mr.Hume was a director of Stemline Therapeutics Inc.,
a late clinical stage biopharmaceutical company, from 2017 to 2021, and National Holdings Corporation, a financial services company,
from 2016 to 2021, until those companies successful acquisitions. Mr.Hume earned a B.A. in philosophy from the State University
of NewYork at Albany and earned a J.D. from the Columbia University Law School. We believe Mr.Hume is qualified to serve
on our board of directors because of his extensive legal experience and experience serving as a public company director.
**
*Lok Lee*,53,
has served on our board of directors since October28, 2025. Since January2010, Mr.Lee has served as the Managing Member
of 2L Advisors, LLC, a private investment firm focused on the digital infrastructure economy. Since June2014, Mr.Lee has
also served as a Venture Partner at Tuesday Capital (formerly Crunchfund), where he sources and supports a broad range of early-stage
startups. Previously, Mr.Lee held senior roles in investment banking, including Managing Director and European Co-Head of Leveraged
Capital Markets at UBS Investment Bank, Head of European High Yield Capital Markets at J.P.Morgan and Vice President in High Yield
Capital Markets at Deutsche Bank. Mr.Lee began his career at Bankers Trust in leveraged finance. Mr.Lee earned a B.A. from
Claremont McKenna College. We believe Mr.Lee is qualified to serve on our board of directors because of his extensive investment
experience, including in the digital infrastructure economy.
Number and Terms of Office of Officers and
Directors
Our board of directors consists
of four members and is divided into two classes with only one class of directors being appointed in each year, and with each class (except
for those directors appointed prior to our first annual general meeting) serving a two-year term. In accordance with Nasdaq corporate
governance requirements, we are not required to hold an annual general meeting until one year after our first fiscal year end following
our listing on Nasdaq. The term of office of the first class of directors, consisting of Sam Cassatt, Daniel Hume and Lok Lee, will expire
at our first annual general meeting. The term of office of the second class of directors, consisting of Michael Singer, will expire at
the second annual general meeting.
Our officers are appointed
by the board of directors and serve at the discretion of the board of directors, rather than for specific terms of office. Our board
of directors is authorized to appoint officers as it deems appropriate pursuant to our amended and restated memorandum and articles of
association.
Director Independence
The rules of Nasdaq require
that a majority of our board of directors be independent within one year of our initial public offering. An independent director
is defined generally as a person who, in the opinion of the companys board of directors, has no material relationship with the
listed company (either directly or as a partner, shareholder or officer of an organization that has a relationship with the company).
Our board of directors has determined that each of Sam Cassatt, Daniel Hume and Lok Lee is an independent director as defined
in Nasdaq listing standards and applicable SEC rules. Our independent directors have regularly scheduled meetings at which only independent
directors are present.
62
Committees of the Board of Directors
Our board of directors has
two standing committees: an audit committee and a compensation committee. Each of our audit committee and our compensation committee
is composed solely of independent directors. Subject to phase-in rules, the rules of Nasdaq and Rule 10A-3 of the Exchange Act require
that the audit committee of a listed company be comprised solely of independent directors, and the rules of Nasdaq require that the compensation
committee of a listed company be comprised solely of independent directors. Each committee operates under a charter that was approved
by our board of directors and has the composition and responsibilities described below. The charter of each committee is available on
our website.
Audit Committee
The members of our audit
committee are Sam Cassatt, Daniel Hume and Lok Lee. Under Nasdaq listing standards and applicable SEC rules, we are required to have
at least three members of the audit committee, all of whom must be independent. Each of Sam Cassatt, Daniel Hume and Lok Lee meets the
independent director standard under Nasdaq listing standards and under Rule 10-A-3(b)(1) of the Exchange Act. Lok Lee serves as chair
of the audit committee.
Each member of the audit
committee is financially literate and our board of directors has determined that Lok Lee 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; 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 independent registered public accounting firm have
with us in order to evaluate their continued independence; |
|
|
| setting clear policies
for audit partner rotation in compliance with applicable laws and regulations; obtaining
and reviewing a report, at least annually, from the independent 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 fiveyears 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 Item404 of RegulationS-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. |
|
63
Compensation Committee
The members of our compensation
committee are Sam Cassatt and Daniel Hume. Under Nasdaq listing standards and applicable SEC rules, we are required to have at least
two members of the compensation committee, all of whom must be independent. Each of Sam Cassatt and Daniel Hume are independent. Daniel
Hume chairs the compensation committee.
We have adopted a compensation
committee charter, which details the principal functions of the compensation committee, including:
|
| reviewing and approving
on an annual basis the corporate goals and objectives relevant to our chief executive officers
compensation, evaluating our chief executive officers performance in light of such
goals and objectives and determining and approving the remuneration (if any) of our chief
executive officer based on such evaluation; |
|
|
| reviewing and making
recommendations to our board of directors with respect to the compensation, and any incentive
compensation and equity based plans that are subject to board approval of all of our other
officers; |
|
|
| 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 executive officers and employees; |
|
|
| producing a report
on executive compensation to be included in our annual proxy statement; and |
|
|
| reviewing, evaluating
and recommending changes, if appropriate, to the remuneration for directors. |
|
Notwithstanding the foregoing,
other than the payment of $30,000 per month to our Sponsor for office space and administrative support services and reimbursement of
expenses, no compensation of any kind, including finders, consulting or other similar fees, will be paid to any of our existing shareholders,
officers, directors or any of their respective affiliates, prior to, or for any services they render in order to effectuate the consummation
of an initial Business Combination. Accordingly, it is likely that prior to the consummation of an initial Business Combination, the
compensation committee will only be responsible for the review and recommendation of any compensation arrangements to be entered into
in connection with such initial Business Combination.
The compensation committee
charter also provides that the compensation committee may, in its sole discretion, retain or obtain the advice of a compensation consultant,
independent legal counsel or other adviser and is directly responsible for the appointment, compensation and oversight of the work of
any such adviser. However, before engaging or receiving advice from a compensation consultant, external legal counsel or any other adviser,
the compensation committee will consider the independence of each such adviser, including the factors required by Nasdaq and the SEC.
64
Director Nominations
We do not have a standing
nominating committee though we intend to form a corporate governance and nominating committee as and when required to do so by law or
Nasdaq rules. In accordance with Rule 5605(e) of the Nasdaq rules, a majority of the independent directors may recommend a director nominee
for selection by our board of directors. Our board of directors believes that our independent directors can satisfactorily carry out
the responsibility of properly selecting or approving director nominees without the formation of a standing nominating committee. The
directors who participate in the consideration and recommendation of director nominees are Sam Cassatt, Daniel Hume and Lok Lee. In accordance
with Rule 5605 of the Nasdaq rules, all such directors are independent. As there is no standing nominating committee, we do not have
a nominating committee charter in place.
The board of directors will
also consider director candidates recommended for nomination by our shareholders during such times as they are seeking proposed nominees
to stand for appointment at the next annual general meeting (or, if applicable, an extraordinary general meeting). Our shareholders that
wish to nominate a director for appointment to our board of directors should follow the procedures set forth in our amended and restated
memorandum and articles of association.
We have not formally established
any specific, minimum qualifications that must be met or skills that are necessary for directors to possess. In general, in identifying
and evaluating nominees for director, the board of directors considers educational background, diversity of professional experience,
knowledge of our business, integrity, professional reputation, independence, wisdom, and the ability to represent the best interests
of our shareholders. Prior to our initial business combination, holders of our Public Shares will not have the right to recommend director
candidates for nomination to our board of directors.
Compensation Committee Interlocks and Insider
Participation
None of our officers currently
serves, or in the past year has served, as a member of the compensation committee of any entity that has one or more officers serving
on our board of directors.
Code of Business Conduct and Ethics, Insider
Trading Policy and Committee Charters
We have adopted a Code of
Ethics applicable to our directors, officers and employees. We have filed a copy of our Code of Ethics as an exhibit to this Form 10-K.
You are able to review this document by accessing our public filings at the SECs web site at *www.sec.gov*. In addition,
a copy of the Code of Ethics and the charters of the committees of our board of directors can be provided without charge upon request
from us. If we make any amendments to our Code of Ethics other than technical, administrative or other non-substantive amendments, or
grant any waiver, including any implicit waiver, from a provision of the Code of Ethics applicable to our principal executive officer,
principal financial officer principal accounting officer or controller or persons performing similar functions requiring disclosure under
applicable SEC or Nasdaq rules, we will disclose the nature of such amendment or waiver on our website. The information included on our
website is not incorporated by reference into this Form 10-K or in any other report or document we file with the SEC, and any references
to our website are intended to be inactive textual references only.
We have also adopted a policy regarding insider training and dissemination of inside information (the Insider Trading Policy) governing the purchase, sale, and other disposition of our securities by our directors, officers, and employees as well as by the Company that we believe is reasonably designed to promote compliance with insider trading laws, rules, and regulations and listing standards applicable to the Company. A copy of our Insider Trading Policy is filed as Exhibit 19 to this Form 10-K.
65
Limitation on Liability and Indemnification
of Officers and Directors
Cayman Islands law does not
limit the extent to which a companys memorandum and articles of association may provide for indemnification of officers and directors,
except to the extent any such provision may be held by the Cayman Islands courts to be contrary to public policy, such as to provide
indemnification against willful default, fraud or the consequences of committing a crime. Our amended and restated memorandum and articles
of association provide for indemnification of our officers and directors to the maximum extent permitted by law, including for any liability
incurred in their capacities as such, except through their own actual fraud, willful default or willful neglect. We have purchased a
policy of directors and officers liability insurance that insures our officers and directors against the cost of defense,
settlement or payment of a judgment in some circumstances and insures us against our obligations to indemnify our officers and directors.
Our officers and directors
have agreed to waive any right, title, interest or claim of any kind in or to any monies in the Trust Account, and have agreed to waive
any right, title, interest or claim of any kind they may have in the future as a result of, or arising out of, any services provided
to us and will not seek recourse against the Trust Account for any reason whatsoever. Accordingly, any indemnification provided will
only be able to be satisfied by us if (i) we have sufficient funds outside of the Trust Account or (ii) we consummate an initial Business
Combination.
Our indemnification obligations
may discourage shareholders from bringing a lawsuit against our officers or directors for breach of their fiduciary duty. These provisions
also may have the effect of reducing the likelihood of derivative litigation against our officers and directors, even though such an
action, if successful, might otherwise benefit us and our shareholders. Furthermore, a shareholders investment may be adversely
affected to the extent we pay the costs of settlement and damage awards against our officers and directors pursuant to these indemnification
provisions.
We believe that these provisions,
the insurance and the indemnity agreements are necessary to attract and retain talented and experienced officers and directors.
Item 11. Executive Compensation.
None of our executive officers
or directors has received any cash compensation for services rendered. We pay our Sponsor $30,000 per month for office space and administrative
support services to members of our management team until the consummation of our initial Business Combination. No compensation of any
kind, including any finders fee, reimbursement, consulting fee or monies in respect of any payment of a loan, will be paid by
us to our Sponsor, officers and directors, or any affiliate of theirs, for services rendered prior to, or for any services rendered in
order to effectuate, the consummation of our initial Business Combination (regardless of the type of transaction that it is). However,
these individuals are entitled to certain payments including, but not limited to, reimbursement for any out-of-pocket expenses incurred
in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable
business combinations. Our audit committee reviews on a quarterly basis all payments that were made to our Sponsor, officers or directors,
or our or their affiliates. Any such payments prior to an initial Business Combination will be made using funds held outside the Trust
Account. Other than quarterly audit committee review of such payments, we do not expect to have any additional controls in place governing
our reimbursement payments to our directors and executive officers for their out-of-pocket expenses incurred in connection with identifying
and consummating an initial Business Combination.
After the completion of our
initial Business Combination, directors or members of our management team who remain with us may be paid consulting or management fees
from the combined company. All of these fees will be fully disclosed to shareholders, to the extent then known, in the tender offer documents
or proxy materials furnished to our shareholders in connection with a proposed initial Business Combination. We have not established
any limit on the amount of such fees that may be paid by the combined company to our directors or members of management. It is unlikely
the amount of such compensation will be known at the time of the proposed initial Business Combination, because the directors of the
post-combination business will be responsible for determining officer and director compensation. Any compensation to be paid to our officers
will be determined, or recommended to the board of directors for determination, either by a compensation committee constituted solely
by independent directors or by a majority of the independent directors on our board of directors.
66
We do not intend to take
any action to ensure that members of our management team maintain their positions with us after the consummation of our initial Business
Combination, although it is possible that some or all of our officers and directors may negotiate employment or consulting arrangements
to remain with us after our initial Business Combination. The existence or terms of any such employment or consulting arrangements to
retain their positions with us may influence our managements motivation in identifying or selecting a target business but we do
not believe that the ability of our management to remain with us after the consummation of our initial Business Combination will be a
determining factor in our decision to proceed with any potential Business Combination. We are not party to any agreements with our officers
and directors that provide for benefits upon termination of employment.
Item 12. Security Ownership of Certain Beneficial
Owners and Management and Related Shareholder Matters.
The following table sets
forth information regarding the beneficial ownership of our ordinary shares as of March 13, 2026, by:
|
| each
person known by us to be the beneficial owner of more than 5% of our outstanding ordinary
shares; |
|
|
| each
of our officers and directors; and |
|
|
| all
our officers and directors as a group. |
|
Unless otherwise indicated,
we believe that all persons named in the table below have sole voting and investment power with respect to all ordinary shares beneficially
owned by them. The following table does not reflect beneficial ownership of the Public Warrants or Private Placement Warrants as these
warrants are not exercisable within 60 days of the date of this Form 10-K.
We have based our calculation
of the percentage of beneficial ownership on 17,250,000 Class A Ordinary Shares and 5,750,000 Class B Ordinary Shares issued and outstanding
as of March 13, 2026.
|
| |
Class A | | |
Class B | | |
| | |
|
| |
Ordinary Shares | | |
Ordinary Shares | | |
Approximate | | |
|
| |
Number of | | |
| | |
Number of | | |
| | |
Percentage of | | |
|
| |
Shares | | |
Approximate | | |
Shares | | |
Approximate | | |
Outstanding | | |
|
| |
Beneficially | | |
Percentage | | |
Beneficially | | |
Percentage | | |
Ordinary | | |
|
Name
and Address of Beneficial Owner(1) | |
Owned | | |
of Class | | |
Owned(2) | | |
of Class | | |
Shares | | |
|
Directors and Officers | |
| | |
| | |
| | |
| | |
| | |
|
Michael Singer(3) | |
| - | | |
| - | | |
| 5,540,000 | | |
| 96.3 | % | |
| 24.1 | % | |
|
Glenn Worman | |
| - | | |
| - | | |
| 100,000 | | |
| 1.7 | % | |
| * | | |
|
Sam Cassatt | |
| - | | |
| - | | |
| 40,000 | | |
| * | | |
| * | | |
|
Daniel Hume | |
| - | | |
| - | | |
| 20,000 | | |
| * | | |
| * | | |
|
Lok Lee | |
| - | | |
| - | | |
| 40,000 | | |
| * | | |
| * | | |
|
All officers and directors as a group (5 individuals) | |
| - | | |
| - | | |
| 5,740,000 | | |
| 99.8 | % | |
| 25.0 | % | |
|
Five Percent Holders | |
| | | |
| | | |
| | | |
| | | |
| | | |
|
Insight Digital Partners Sponsor LLC(3) | |
| - | | |
| - | | |
| 5,540,000 | | |
| 96.3 | % | |
| 24.1 | % | |
|
Adage Capital Management, L.P.(4) | |
| 1,350,000 | | |
| 7.8 | % | |
| - | | |
| - | | |
| | * | |
|
* | Less than 1% |
|
|
(1) | Unless otherwise noted,
the business address of each of the following entities or individuals is c/o Insight Digital
Partners II, 17 State Street, Suite 4000, New York, New York 10004. |
|
|
(2) | Interests shown consist
solely of Founder Shares, classified as Class B Ordinary Shares. Such shares will automatically
convert into Class A Ordinary Shares concurrently with or immediately following the consummation
of our initial Business Combination, or earlier at the option of the holders thereof, on
a one-for-one basis, subject to adjustment. |
|
|
(3) | Insight Digital Partners
Sponsor LLC is the record holder of the shares reported herein. Michael Singer is the manager
of Insight Digital Partners Sponsor LLC and has voting and investment discretion over the
securities held by Insight Digital Partners Sponsor LLC. |
|
67
|
(4) | According to a Schedule
13G filed with the SEC on February 12, 2026 by (i) Adage Capital Management, L.P., a Delaware
limited partnership (ACM), as the investment manager of Adage Capital Partners,
L.P., a Delaware limited partnership (ACP), (ii) Robert Atchinson (Mr.
Atchinson), as (1) managing member of Adage Capital Advisors, L.L.C., a limited liability
company organized under the laws of the State of Delaware (ACA), managing member
of Adage Capital Partners GP, L.L.C., a limited liability company organized under the laws
of the State of Delaware (ACPGP), general partner of ACP and (2) managing member
of Adage Capital Partners LLC, a Delaware limited liability company (ACPLLC),
general partner of ACM, and (iii) Phillip Gross (Mr. Gross), as (1) managing
member of ACA, managing member of ACPGP and (2) managing member of ACPLLC, general partner
of ACM, with respect to the Class A Ordinary Shares directly held by ACP. The address of
the business office of each of the Reporting Persons is 200 Clarendon Street, 52nd Floor,
Boston, Massachusetts 02116. |
|
Item 13. Certain Relationships and Related
Transactions, and Director Independence
Founder Shares
On July 16, 2025, our Sponsor
purchased an aggregate of 5,750,000 Founder Shares for an aggregate purchase price of $25,000, or approximately $0.004 per share. In
July 2025, our Sponsor transferred an aggregate of 210,000 Founder Shares to our independent directors and certain of our officers, including
our Chief Financial Officer, at the same per-share price that our Sponsor purchased such shares, or approximately $0.004 per share, resulting
in our Sponsor holding 5,540,000 Founder Shares. The number of Founder Shares issued was determined based on the expectation that such
Founder Shares would represent 25% of the outstanding shares after the IPO.
Private Placement
Warrants
Our Sponsor and Cohen purchased
an aggregate of 5,450,000 Private Placement Warrants for an aggregate purchase price of $5,450,000, or $1.00 per warrant, in a private
placement that occurred simultaneously with the closing of the IPO. Of those 5,450,000 Private Placement Warrants, our Sponsor purchased
3,725,000 Private Placement Warrants and Cohen purchased 1,725,000 Private Placement Warrants. The Private Placement Warrants are identical
to the warrants sold as part of the Units in the IPO except that, so long as they are held by our Sponsor, Cohen or their respective
permitted transferees, (i) may not (including the underlying securities), subject to certain limited exceptions, be transferred, assigned
or sold by the holders until 30 days after the completion of our initial Business Combination, (ii) and will be entitled to registration
rights and (iii) with respect to Private Placement Warrants held by Cohen and/or their respective designees, will not be exercisable
more than five years from the commencement of sales in the IPO in accordance with FINRA Rule 5110(g)(8). A portion of the purchase price
of the Private Placement Warrants were added to the proceeds from the IPO to be held in the Trust Account such that $172,500,000 is held
in the Trust Account. If we do not complete our initial Business Combination within the Completion Window, the Private Placement Warrants
will expire worthless. The Private Placement Warrants and Private Placement Warrants are subject to the transfer restrictions described
above. Otherwise, the Private Placement Warrants have terms and provisions that are identical to those of the units being sold in the
IPO.
Administrative Services
and Indemnification Agreement
We entered into an Administrative
Services and Indemnification Agreement with our Sponsor in connection with the IPO. Pursuant to the terms of that agreement, we agreed
to pay our Sponsor $30,000 per month for office space and administrative support services provided to us and members of our management
team. Upon completion of our initial Business Combination or our liquidation, we will cease paying these monthly fees.
No compensation of any kind,
including finders and consulting fees, will be paid by the Company to our Sponsor, executive officers and directors, or any of
their respective affiliates, for services rendered prior to or in connection with the completion of an initial Business Combination without
shareholder approval. However, these individuals will be reimbursed for any out-of-pocket expenses incurred in connection with activities
on our behalf such as identifying potential target businesses and performing due diligence on suitable Business Combinations. Our audit
committee will review on a quarterly basis all payments that were made to our Sponsor, officers, directors or our or their affiliates.
Promissory Note
On July 16, 2025 the Sponsor
agreed to loan the Company up to $300,000 pursuant to a promissory note (the Note). The Note is non-interest bearing, unsecured
and was due on the earlier of December 31, 2025 or the closing of the IPO. As of December 31, 2025, there are no amounts outstanding
and no further borrowings are permitted under the Note.
68
Working Capital Loans
In addition, in order to
finance transaction costs in connection with an intended initial Business Combination, our Sponsor or an affiliate of our Sponsor or
certain of our officers and directors may, but are not obligated to, loan us funds as may be required on a non-interest basis. If we
complete an initial Business Combination, we would repay such loaned amounts. In the event that the initial Business Combination does
not close, we may use a portion of the working capital held outside the Trust Account to repay such loaned amounts but no proceeds from
our Trust Account would be used for such repayment. Up to $1,500,000 of such loans may be convertible into Private Placement Warrants
at a price of $1.00 per warrant, at the option of the lender. The warrants would be identical to the Private Placement Warrants, including
as to exercisability and exercise price. Except as set forth above, the terms of such loans, if any, have not been determined and no
written agreements exist with respect to such loans. Prior to the completion of our initial Business Combination, we do not expect to
seek loans from parties other than our Sponsor or an affiliate of our Sponsor as we do not believe third parties will be willing to loan
such funds and provide a waiver against any and all rights to seek access to funds in our Trust Account. Except for the foregoing, the
terms of such working capital loans, if any, have not been determined and no written agreements exist with respect to such loans. As
of December 31, 2025, the Company had no borrowings under the working capital loans.
Any of the foregoing payments
to our Sponsor, repayments of loans from our Sponsor or repayments of working capital loans prior to our initial Business Combination
will be made using funds held outside the Trust Account.
After our initial Business
Combination, members of our management team who remain with us may be paid consulting, management or other fees from the combined company
with any and all amounts being fully disclosed to our shareholders, to the extent then known, in the proxy materials or tender offer
documents, as applicable, furnished to our shareholders. It is unlikely the amount of such compensation will be known at the time of
distribution of such tender offer documents or at the time of a shareholder meeting held to consider our initial Business Combination,
as applicable, as it will be up to the directors of the post-Business Combination entity to determine executive and director compensation.
Registration Rights
Agreement
The holders of Founder Shares,
Private Placement Warrants and warrants that may be issued upon conversion of working capital loans (and any ordinary shares issuable
upon the exercise of the Private Placement Warrants or warrants issued upon conversion of the working capital loans), are entitled to
registration rights pursuant to a registration rights agreement signed in connection with the IPO. These holders are entitled to certain
demand and piggyback registration rights. We will bear the expenses incurred in connection with the filing of any such
registration statements.
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*. During
the period from July 11, 2025 (inception) through December 31, 2025, fees for our independent registered public accounting firm were approximately
$123,635 for the services Withum performed in connection with our Initial Public Offering and the audit of our December 31, 2025 financial
statements included in this Form 10-K.
**
*Audit-Related Fees.*
During the period from July 11, 2025 (inception) through December 31, 2025, our independent registered public accounting firm did not
render assurance and related services related to the performance of the audit or review of financial statements.
**
*Tax Fees*. During the
period from July 11, 2025 (inception) through December 31, 2025, our independent registered public accounting firm did not render services
to us for tax compliance, tax advice and tax planning.
**
*All Other Fees*. During
the period from July 11, 2025 (inception) through December 31, 2025, there were no fees billed for products and services provided by
our independent registered public accounting firm other than those set forth above.
Pre-Approval Policy
Our audit committee was formed
upon the consummation of our Initial Public Offering. As a result, the audit committee did not pre-approve all of the foregoing services,
although any services rendered prior to the formation of our audit committee were approved by our board of directors. Since the formation
of our audit committee, and on a going-forward basis, the audit committee has and will pre-approve all auditing services and permitted
non-audit services to be performed for us by our auditors, including the fees and terms thereof (subject to the de minimis exceptions
for non-audit services described in the Exchange Act which are approved by the audit committee prior to the completion of the audit).
69
Part
IV
Item 15. Exhibits, Financial Statement Schedules.
(a) The following documents are filed as part
of this Form 10-K:
1. Financial Statements: See Index to
Financial Statements at Item 8. Financial Statements and Supplementary Data herein.
(b) Financial Statement Schedules. All schedules
are omitted for the reason that the information is included in the financial statements or the notes thereto or that they are not required
or are not applicable.
(c) Exhibits: The exhibits listed in the Exhibit
Index below are filed or incorporated by reference as part of this Form 10-K.
Exhibit Index
|
Number |
|
Description |
|
|
3.1 |
|
Amended and Restated Memorandum and Articles of Incorporation (incorporated by reference to Exhibit 3.1 to the Registrants Current Report on Form 8-K (File No. 001-42919), filed with the SEC on November 3, 2025). |
|
|
4.1 |
|
Specimen Unit Certificate (incorporated by reference to Exhibit 4.1 to Amendment No. 1 to the Registrants Registration Statement on Form S-1 (File No. 333-289728), filed with the SEC on October 1, 2025). |
|
|
4.2 |
|
Specimen Class A Ordinary Shares Certificate (incorporated by reference to Exhibit 4.2 to Amendment No. 1 to the Registrants Registration Statement on Form S-1 (File No. 333-289728), filed with the SEC on October 1, 2025). |
|
|
4.3 |
|
Specimen Warrant Certificate (incorporated by reference to Exhibit 4.4 to the Registrants Registration Statement on Form S-1 (File No. 333-289728), filed with the SEC on August 20, 2025). |
|
|
4.4 |
|
Warrant Agreement, dated October 28, 2025, by and between the Registrant and Continental Stock Transfer & Trust Company, as warrant agent (incorporated by reference to Exhibit 4.1 to the Registrants Current Report on Form 8-K (File No. 001-42919), filed with the SEC on November 3, 2025). |
|
|
4.5* |
|
Description of Securities. |
|
|
10.1 |
|
Letter Agreement, dated October 28, 2025, by and among the Registrant, Insight Digital Partners Sponsor LLC and each of the executive officers and directors of the Registrant (incorporated by reference to Exhibit 10.1 to the Registrants Current Report on Form 8-K (File No. 001-42919), filed with the SEC on November 3, 2025). |
|
|
10.2 |
|
Investment Management Trust Agreement, dated October 28, 2025, by and between the Registrant and Continental Stock Transfer & Trust Company, as trustee (incorporated by reference to Exhibit 10.2 to the Registrants Current Report on Form 8-K (File No. 001-42919), filed with the SEC on November 3, 2025). |
|
|
10.3 |
|
Registration Rights Agreement, dated October 28, 2025, by and among the Registrant, Insight Digital Partners Sponsor LLC and the other holders party thereto (incorporated by reference to Exhibit 10.3 to the Registrants Current Report on Form 8-K (File No. 001-42919), filed with the SEC on November 3, 2025). |
|
|
10.4 |
|
Private Placement Warrants Purchase Agreement, dated October 28, 2025, by and between the Registrant and Insight Digital Partners Sponsor LLC (incorporated by reference to Exhibit 10.4 to the Registrants Current Report on Form 8-K (File No. 001-42919), filed with the SEC on November 3, 2025). |
|
|
10.5 |
|
Private Placement Warrants Purchase Agreement, dated October 28, 2025, by and between the Registrant and Cohen & Company Capital Markets, a division of Cohen & Company Securities, LLC (incorporated by reference to Exhibit 10.5 to the Registrants Current Report on Form 8-K (File No. 001-42919), filed with the SEC on November 3, 2025). |
|
70
|
10.6 |
|
Form of Indemnity Agreement (incorporated by reference to Exhibit 10.6 to Amendment No. 1 to the Registrants Registration Statement on Form S-1 (File No. 333-289728), filed with the SEC on October 1, 2025). |
|
|
10.7 |
|
Administrative Services and Indemnification Agreement, dated October 28, 2025, by and between the Registrant and Insight Digital Partners Sponsor LLC (incorporated by reference to Exhibit 10.6 to the Registrants Current Report on Form 8-K (File No. 001-42919), filed with the SEC on November 3, 2025). |
|
|
10.8 |
|
Promissory Note issued to Insight Digital Partners Sponsor LLC (incorporated by reference to Exhibit 10.7 to the Registrants Registration Statement on Form S-1 (File No. 333-289728), filed with the SEC on August 20, 2025). |
|
|
10.9 |
|
Securities Subscription Agreement between Insight Digital Partners Sponsor LLC and the Registrant (incorporated by reference to Exhibit 10.8 to the Registrants Registration Statement on Form S-1 (File No. 333-289728), filed with the SEC on August 20, 2025). |
|
|
14.1 |
|
Form of Code of Ethics (incorporated by reference to Exhibit 14.1 to Amendment No. 1 to the Registrants Registration Statement on Form S-1 (File No. 333-289728), filed with the SEC on October 1, 2025). |
|
|
19* |
|
Insider Trading Policy. |
|
|
24.1* |
|
Power of Attorney (included on the signature pages herein). |
|
|
31.1* |
|
Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
|
|
31.2* |
|
Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
|
|
32.1** |
|
Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
|
|
32.2** |
|
Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
|
|
97.1* |
|
Policy relating to the recovery of erroneously awarded compensation. |
|
|
101.INS |
|
Inline XBRL Instance Document |
|
|
101.SCH |
|
Inline XBRL Taxonomy Extension Schema Document |
|
|
101.CAL |
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document |
|
|
101.DEF |
|
Inline XBRL Taxonomy Extension Definition Linkbase Document |
|
|
101.LAB |
|
Inline XBRL Taxonomy Extension Label Linkbase Document |
|
|
101.PRE |
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document |
|
|
104 |
|
Cover Page Interactive Data File (Embedded within the Inline XBRL document and included in Exhibit) |
|
|
* | Filed herewith. |
|
|
** | Furnished herewith. |
|
Item 16. Form 10-K Summary
None.
71
SIGNATURES
Pursuant to the requirements
of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Form 10-K to be signed
on its behalf by the undersigned, thereunto duly authorized.
|
|
INSIGHT DIGITAL PARTNERS II | |
|
|
|
| |
|
|
By: |
/s/ Michael Singer | |
|
|
Name: |
Michael Singer | |
|
|
Title: |
Chief Executive Officer and Executive Chairman | |
|
|
|
(Principal Executive Officer) | |
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Dated: March 13, 2026 |
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POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE
PRESENTS, that each person whose signature appears below constitutes and appoints Michael Singer and Glenn Worman, and each or any one
of them, his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him and in his name,
place and stead, in any and all capacities, to sign any and all amendments to this Form 10-K, and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the United States Securities and Exchange Commission, granting unto said attorneys-in-fact
and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done
in connection therewith, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents, or any of them, or his or her substitutes or substitute, may lawfully do or cause to be done
by virtue hereof.
Pursuant to the requirements
of the Securities Act of 1933, as amended, this Form 10-K has been signed below by the following persons on behalf of the Registrant
in the capacities and on the dates indicated.
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Name |
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Title |
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Date | |
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/s/ Michael Singer |
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Chief Executive Officer and Executive Chairman |
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March 13, 2026 | |
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Michael Singer |
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(Principal Executive Officer) |
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/s/ Glenn Worman |
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Chief Financial Officer |
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March 13, 2026 | |
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Glenn Worman |
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(Principal Financial and Accounting Officer) |
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/s/ Sam Cassatt |
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Director |
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March 13, 2026 | |
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Sam Cassatt |
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/s/ Daniel Hume |
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Director |
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March 13, 2026 | |
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Daniel Hume |
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/s/ Lok Lee |
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Director |
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March 13, 2026 | |
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Lok Lee |
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72
INSIGHT DIGITAL PARTNERS II
INDEX TO FINANCIAL STATEMENTS
|
Report of Independent Registered Public Accounting Firm (PCAOB ID Number 100) |
F-2 | |
|
Financial Statements: |
| |
|
Balance Sheet as of December 31, 2025 |
F-3 | |
|
Statement of Operations for the period from July 11, 2025 (Inception) through December 31, 2025 |
F-4 | |
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Statement of Changes in Shareholders Deficit for the period from July 11, 2025 (Inception) through December 31, 2025 |
F-5 | |
|
Statement of Cash Flows for the period from July 11, 2025 (Inception) through December 31, 2025 |
F-6 | |
|
Notes to Financial Statements |
F-7 to F-20 | |
F-1
Report of Independent
Registered Public Accounting Firm
To the Board of Directors and Shareholders of
Insight Digital Partners II
*Opinion on the Financial Statements*
We have audited the accompanying balance sheet of Insight Digital Partners II (the Company) as of December 31*,*2025, the related statement of operations, changes in shareholders deficit and cash flows for the period from July 11, 2025 (inception) through December 31, 2025, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31*,*2025, and the results of its operations and its cash flows for the period from July 11, 2025 (inception) through December 31, 2025 in conformity with accounting principles generally accepted in the United States of America.
*Basis for Opinion*
These financial statements are the responsibility of the entitys management. Our responsibility is to express an opinion on the entitys financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the entitys internal control over financial reporting. Accordingly, we express no such opinion.
Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.
/s/ WithumSmith+Brown, PC
We have served as the Companys auditor since 2025.
New York, New York
March 13, 2026
PCAOB ID Number 100
F-2
INSIGHT DIGITAL PARTNERS II
BALANCE SHEET
DECEMBER 31, 2025
|
Assets | |
| | |
|
Current assets | |
| | |
| Cash | | $ | 1,247,831 | | |
| Due from Sponsor | | | 3,961 | | |
| Prepaid expenses | | | 66,000 | | |
| Total current assets | | | 1,317,792 | | |
| Long term prepaid insurance | | | 46,567 | | |
| Cash held in Trust Account | | | 173,659,928 | | |
| Total Assets | | $ | 175,024,287 | | |
|
| |
| | | |
|
Liabilities, Class A Ordinary Shares
Subject to Possible Redemption, and Shareholders Deficit | |
| | | |
|
Current Liabilities | |
| | | |
| Accrued offering costs | | $ | 77,174 | | |
| Accrued expenses | | | 39,951 | | |
| Total current liabilities | | | 117,125 | | |
| Deferred underwriting fee | | | 6,900,000 | | |
| Total Liabilities | | | 7,017,125 | | |
|
| |
| | | |
| Commitments (Note 6) | | | | | |
| Class A ordinary shares subject to possible redemption, $0.0001 par value; 17,250,000 shares at redemption value of $10.07 per share | | | 173,659,928 | | |
|
| |
| | | |
|
Shareholders Deficit | |
| | | |
| Preference shares, $0.0001 par value; 5,000,000 shares authorized; none issued and outstanding | | | | | |
| Class A ordinary shares, $0.0001 par value; 500,000,000 shares authorized; none issued and outstanding (excluding 17,250,000 shares subject to possible redemption) | | | | | |
| Class B ordinary shares, $0.0001 par value; 50,000,000 shares authorized; 5,750,000 shares issued and outstanding | | | 575 | | |
| Additional paid-in capital | | | | | |
| Accumulated deficit | | | (5,653,341 | ) | |
| Total Shareholders Deficit | | | (5,652,766 | ) | |
| Total Liabilities, Class A Ordinary Shares Subject to Possible Redemption, and Shareholders Deficit | | $ | 175,024,287 | | |
The accompanying notes are an integral
part of these financial statements.
F-3
INSIGHT DIGITAL PARTNERS II
STATEMENT OF OPERATIONS
|
| |
Forthe Period from July11, 2025 (Inception) Through December31, | | |
|
| |
2025 | | |
| General and administrative costs | | $ | 266,543 | | |
| Loss from operations | | | (266,543 | ) | |
|
| |
| | | |
|
Other income: | |
| | | |
| Interest earned on cash held in Trust Account | | | 1,159,928 | | |
| Total other income | | | 1,159,928 | | |
|
| |
| | | |
| Net income | | $ | 893,385 | | |
|
| |
| | | |
| Basic weighted average shares outstanding, Class A ordinary shares | | | 6,182,081 | | |
|
| |
| | | |
| Basic net income per share, Class A ordinary shares | | $ | 0.08 | | |
|
| |
| | | |
| Diluted weighted average non-redeemable Class A ordinary Shares | | | 6,182,081 | | |
|
| |
| | | |
| Diluted net income per non-redeemable Class A Ordinary Shares | | $ | 0.08 | | |
|
| |
| | | |
| Basic weighted average non-redeemable Class B Ordinary Shares outstanding(1) | | | 5,124,277 | | |
|
| |
| | | |
| Basic net income per non-redeemable Class B Ordinary Shares | | $ | 0.08 | | |
|
| |
| | | |
| Diluted weighted average non-redeemable Class B Ordinary Shares outstanding(1) | | | 5,250,000 | | |
|
| |
| | | |
| Diluted net income per non-redeemable Class B Ordinary Shares | | $ | 0.08 | | |
| (1) | Excludes an aggregate of up to 750,000 ClassB ordinary shares subject to forfeiture by the holders thereof depending on the extent to which the underwriters over-allotment option was exercised (Note6). On October 30, 2025, the Company consummated its Initial Public Offering and sold 17,250,000Units, including 2,250,000 Units sold pursuant to the exercise of the underwriters option in full to purchase additional units to cover the over-allotment; hence, the 750,000 shares of Class B ordinary shares are no longer subject to forfeiture. | |
The accompanying notes are an integral
part of these financial statements.
F-4
INSIGHT DIGITAL PARTNERS II
STATEMENT OF CHANGES IN SHAREHOLDERS
DEFICIT
FOR THE PERIOD FROM JULY 11, 2025
(INCEPTION) THROUGH DECEMBER 31, 2025
|
| |
Class A
Ordinary Shares | | |
Class B
Ordinary Shares | | |
Additional Paid-in | | |
Accumulated | | |
Total Shareholders | | |
|
| |
Shares | | |
Amount | | |
Shares | | |
Amount | | |
Capital | | |
Deficit | | |
Deficit | | |
| Balance July 11, 2025 (inception) | | | | | | $ | | | | | | | | $ | | | | $ | | | | $ | | | | $ | | | |
|
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| Issuance of Class B ordinary to initial Shareholders(1) | | | | | | | | | | | 5,750,000 | | | | 575 | | | | 24,425 | | | | | | | | 25,000 | | |
|
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| Sale of Private Placement Warrants | | | | | | | | | | | | | | | | | | | 5,450,000 | | | | | | | | 5,450,000 | | |
|
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| Fair value of Warrants at issuance | | | | | | | | | | | | | | | | | | | 4,597,125 | | | | | | | | 4,597,125 | | |
|
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| Allocated value of transaction costs to Class A shares | | | | | | | | | | | | | | | | | | | (304,691 | ) | | | | | | | (304,691 | ) | |
|
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| Accretion for Class A ordinary shares to redemption amount | | | | | | | | | | | | | | | | | | | (9,766,859 | ) | | | (6,546,726 | ) | | | (16,313,585 | ) | |
|
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| Net income | | | | | | | | | | | | | | | | | | | | | | | 893,385 | | | | 893,385 | | |
|
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| Balance December 31, 2025 | | | | | | $ | | | | | 5,750,000 | | | $ | 575 | | | $ | | | | $ | (5,653,341 | ) | | $ | (5,652,766 | ) | |
| (1) | Included an aggregate of up to 750,000 ClassB ordinary shares subject to forfeiture by the holders thereof depending on the extent to which the underwriters over-allotment option was exercised (Note6). On October 30, 2025, the Company consummated its Initial Public Offering and sold 17,250,000Units, including 2,250,000 Units sold pursuant to the exercise of the underwriters option in full to purchase additional units to cover the over-allotment; hence, the 750,000 shares of Class B ordinary shares are no longer subject to forfeiture. | |
The accompanying notes are an integral
part of these financial statements.
F-5
INSIGHT DIGITAL PARTNERS II
STATEMENT OF CASH FLOWS
FOR THE PERIOD FROM JULY 11, 2025
(INCEPTION) THROUGH DECEMBER 31, 2025
|
Cash Flows from Operating Activities: | |
| | |
| Net income | | $ | 893,385 | | |
|
Adjustments to reconcile net income to net cash used in operating activities: | |
| | | |
| Interest earned on marketable securities held in Trust Account | | | (1,159,928 | ) | |
|
Changes in operating assets and liabilities: | |
| | | |
| Prepaid expenses | | | (66,000 | ) | |
| Long term prepaid insurance | | | (46,567 | ) | |
| Accrued expenses | | | 39,951 | | |
| Net cash used in operating activities | | | (339,159 | ) | |
|
| |
| | | |
|
Cash Flows from Investing Activities: | |
| | | |
| Investment of cash in Trust Account | | | (172,500,000 | ) | |
| Net cash used in investing activities | | | (172,500,000 | ) | |
|
| |
| | | |
|
Cash Flows from Financing Activities: | |
| | | |
| Proceeds from sale of Units, net of underwriting discounts paid | | | 169,050,000 | | |
| Reimbursement to the Underwriters | | | (27,000 | ) | |
| Proceeds from sale of Private Placement Warrants | | | 5,450,000 | | |
| Due from Sponsor | | | (3,961 | ) | |
| Proceeds from promissory note - related party | | | 140,000 | | |
| Repayment of promissory note - related party | | | (140,000 | ) | |
| Payment of offering costs | | | (382,049 | ) | |
| Net cash provided by financing activities | | | 174,086,990 | | |
|
| |
| | | |
| Net Change in Cash | | | 1,247,831 | | |
| Cash Beginning of period | | | | | |
| Cash End of period | | $ | 1,247,831 | | |
|
| |
| | | |
|
Non-cash investing and financing activities: | |
| | | |
| Deferred offering costs included in accrued offering costs | | $ | 77,174 | | |
| Deferred offering cost paid by Initial Shareholders in exchange for issuance of Class B ordinary shares | | $ | 25,000 | | |
The accompanying notes are an integral
part of these financial statements.
F-6
INSIGHT DIGITAL PARTNERS
II
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2025
NOTE 1. DESCRIPTION OF ORGANIZATION, BUSINESS OPERATIONS
Insight Digital PartnersII (the Company) is a blank check company incorporated in the Cayman Islands on July11, 2025. The Company was formed for the purpose of effecting a merger, amalgamation, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses (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 for the period from July11, 2025 (inception) through December 31, 2025 relates to the Companys formation, the initial public offering (Initial Public Offering), which is described below, and subsequent to the Initial Public Offering, identifying a target company for a Business Combination. The Company will not generate any operating revenues until after the completion of a Business Combination, at the earliest. The Company generates non-operating income in the form of interest income from the proceeds derived from the Initial Public Offering. The Company has selected December31 as its fiscal year end.
The registration statements for the Companys Initial Public Offering became effective on October 28, 2025. On October 30, 2025, the Company consummated the Initial Public Offering of 17,250,000units (the Units and, with respect to the ClassA ordinary shares included in the Unitsbeing offered, the Public Shares), which includes the full exercise by the underwriter of its over-allotment option of 2,250,000 Units, at $10.00 per Unit, generating gross proceeds of $172,500,000. Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of an aggregate of 5,450,000warrants (the Private Placement Warrants), at a price of $1.00 per Private Placement Warrant, in a private placement to Insight Digital Partners Sponsor LLC (the Sponsor) and the underwriter of its Initial Public Offering, generating gross proceeds of $5,450,000. Of those 5,450,000 Private Placement Warrants, the Sponsor purchased 3,725,000 Private Placement Warrants and the underwriter purchased 1,725,000 Private Placement Warrants. Each whole Private Placement Warrant is exercisable to purchase one ClassA ordinary share at a price of $11.50 per share, subject to adjustment, terms and limitations as described herein. The Private Placement Warrants will become exercisable 30days after the completion of the initial Business Combination.
Transaction costs amounted to $10,861,223, consisting of a $3,450,000 of cash underwriting fee, $6,900,000 of deferred underwriting fees, and $511,223 of other offering costs.
The Companys management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering and the sale of the Private Placement Warrants, 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 a Business Combination with one or more target businesses that together have an aggregate fair market value of at least 80% of the value of the Trust Account (as defined below) (excluding the deferred underwriting commissions and taxes payable on income earned on the Trust Account) at the time of the agreement to enter into an initial Business Combination. The Company will only complete a Business Combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Actof1940, as amended (the Investment Company Act).
Following the closing of the Initial Public Offering on October 30, 2025, an amount of $172,500,000 ($10.00 per Unit) from the net proceeds of the sale of the Units, and a portion of the net proceeds from the sale of the Private Placement Warrants, was deposited in a trust account (Trust Account), located in the UnitedStates at Continental Stock Transfer & Trust and invested only in U.S.government treasury obligations with a maturity of 185days or less or in money market funds meeting certain conditions under Rule2a-7 under the Investment Company Act. These proceeds are invested until the earlier of (i)the completion of a Business Combination and (ii)the distribution of the funds held in the Trust Account; the holding of these assets in this form is intended to be temporary and for the sole purpose of facilitating the intended Business Combination.
F-7
INSIGHT DIGITAL PARTNERS II
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2025
The Company will provide its holders of the outstanding Public Shares (the public shareholders) 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 shareholder meeting called to approve the Business Combination or (ii)without a shareholder vote by means of a tender offer. The decision as to whether the Company will seek shareholder approval of a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion, 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 the Company to seek shareholder approval under applicable law or stock exchange listing requirements. The public shareholders 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 $10.00 per Public Share, plus any pro rata interest earned on the funds held in the Trust Account and not previously released to the Company and up to $100,000 of interest to pay potential liquidation expenses). There will be no redemption rights upon the completion of a Business Combination with respect to the Companys warrants. The Public Shares subject to redemption will be recorded at redemption value and classified as temporary equity upon the completion of the Initial Public Offering in accordance with the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic480, *Distinguishing Liabilities from Equity*.
The Company will proceed with a Business Combination only if a majority of the shares voted are voted in favor of the Business Combination. If a shareholder vote is not required by law and the Company does not decide to hold a shareholder vote for business or other reasons, the Company will, pursuant to its amended and restated memorandum and articles of association (the Amended and Restated Memorandum and Articles of Association), conduct the redemptions pursuant to the tender offer rules of the U.S.Securities and Exchange Commission (SEC) and file tender offer documents with the SEC prior to completing a Business Combination. If, however, shareholder approval of the transaction is required by law, or the Company decides to obtain shareholder 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 shareholder approval in connection with a Business Combination, the Sponsor, officers and directors have agreed to vote its Founder Shares (as defined in Note5) and any Public Shares purchased during or after the Initial Public Offering in favor of approving a Business Combination. Additionally, each public shareholder may elect to redeem their Public Shares irrespective of whether they vote for or against the proposed transaction or dont vote at all.
Notwithstanding the above, if the Company seeks shareholder approval of a Business Combination and the Company does not conduct redemptions pursuant to the tender offer rules, the Amended and Restated Memorandum and Articles of Association provides that a public shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a group (as defined under Section13 of the Securities ExchangeActof1934, as amended (the ExchangeAct), will be restricted from redeeming its shares with respect to more than an aggregate of 15% or more of the Public Shares, without the prior consent of the Company.
The Sponsor, officers and directors have agreed to waive redemption rights with respect to any Founder Shares (as defined in Note5) held and any Public Shares they may acquire during or after the Initial Public Offering in connection with the completion of Business Combination, except that Public Shares held by the initial shareholders will be subject to mandatory redemption upon any diminution of the Trust Account in connection with an extension, and such shares will be entitled to redemption at a price equal to the per share redemption value then held in the Trust Account in connection therewith.
The Company will have until 24months from the closing of the Initial Public Offering to complete a Business Combination. However, if the Company anticipates that it may not be able to consummate a Business Combination within such period, the Company may, but is not obligated to, by resolution of the board if requested by the initial shareholders, extend the period of time to consummate a Business Combination. The Company may seek shareholder approval to amend the amended and restated memorandum and articles of association to extend the date by which the Company must consummate the initial Business Combination. If the Company seeks shareholder approval for an extension, holders of public shares will be offered an opportunity to redeem their shares, regardless of whether they abstain, vote for, or against, the Companys initial Business Combination, at a per share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned thereon (which interest shall be net of net of taxes paid or payable), divided by the number of then issued and outstanding public shares, subject to applicable law.
F-8
INSIGHT DIGITAL PARTNERS II
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2025
There is no limit on the number or length of extensions that the Company may seek; however, the Company does not expect to extend the time period to consummate the initial Business Combination beyond 36months from the closing of the Initial Public Offering. If the Company determines not to or is unable to extend the time period to consummate the initial Business Combination or fails to obtain shareholder approval to extend, the Sponsor, management team and other initial shareholders will lose their entire investment in the Founder Shares and the Companys Private Placement Warrants, except to the extent they entitle the holders thereof to receive liquidating distributions from assets outside the Trust Account.
In order to protect the amounts held in the Trust Account, 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 other similar agreement or Business Combination agreement, reduces the amount of funds in the Trust Account to below the lesser of (i)$10.00 per Public Share and (ii)the actual amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account, if less than $10.00 per Public Share due to reductions in the value of the trust assets, in each case less taxes payable and up to $100,000 of interest to pay liquidation expenses, 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 the indemnity of the underwriter of the Initial Public Offering against certain liabilities, including liabilities under the Securities Actof1933, as amended (the Securities Act).
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying financial statements are presented in U.S. dollars and have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) and pursuant to the accounting and disclosure rules and regulations of the Securities and Exchange Commission (the SEC).
Liquidity and Capital Resources
The Companys liquidity needs up to Initial Public Offering on December 31, 2025 had been were satisfied through a loan under an unsecured promissory note from the Sponsor of up to $300,000 (see Note 5), and net proceeds from the sale of the Private Placement Warrants. Subsequent to the closing of the Initial Public Offering, on November 4, 2025, the Company received the net share subscription receivable from the Sponsor and simultaneously settled the outstanding $140,000 balance of the Promissory Note.
In order to fund working capital 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 (the Working Capital Loans). If the Company completes a Business Combination, the Company would repay such loaned amounts at that time. Up to $1,500,000 of such Working Capital Loans may be converted into private placement units upon consummation of the Business Combination at a price of $10.00 per unit. The units would be identical to the Private Placement Units. As of December 31, 2025, the Company had no borrowings under the Working Capital Loans.
In connection with the Companys assessment of going concern considerations in accordance with FASB ASC 204-50, *Presentation of Financial Statements - Going Concern*, the Company does not believe it will need to raise additional funds in order to meet the expenditures required for operating its business. However, if the estimate of the costs of identifying a target business, undertaking in-depth due diligence and negotiating a Business Combination are less than the actual amount necessary to do so, the Company may have insufficient funds available to operate its business prior to the initial Business Combination. The Company has the Completion Window to complete the initial Business Combination. Management has determined that the Company has sufficient funds to finance the working capital needs of the Company within one year from the date of issuance of the financial statements.
Emerging Growth Company
The Company is an emerging growth company, as defined in Section2(a)of the Securities Act, as modified by the Jumpstart Our Business Startups Actof2012 (the JOBS Act). As such, the Company is eligible take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.
F-9
INSIGHT DIGITAL PARTNERS II
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2025
Further, Section102(b)(1)of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the ExchangeAct) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-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 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.
Use of Estimates
The preparation of 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, as well as operating expenses.
Making estimates requires management to exercise significant judgment. 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 financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could 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 $1,247,831 in cash and no cash equivalents as of December 31, 2025.
Cash Held in Trust Account
As of December 31, 2025, the assets held in the Trust Account, amounting to $173,659,928, were held in cash. The Trust Account is 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, until the earlier of (i) the completion of a Business Combination and (ii) the distribution of the funds held in the Trust Account; the holding of these assets in this form is intended to be temporary and for the sole purpose of facilitating the intended Business Combination (see Note 1).
Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist of a cash account in a financial institution, which, at times, may exceed the Federal Deposit Insurance Corporation coverage limit of $250,000. Any loss incurred or a lack of access to such funds could have a significant adverse impact on the Companys financial condition, results of operations, and cash flows.
Offering Costs
The Company complies with the requirements of ASC340-10-S99-1 and SEC Staff Accounting Bulletin Topic5A, *Expenses of Offering*. Offering costs consist principally of professional and registration fees that are related to the Initial Public Offering. FASB ASC470-20, *Debt with Conversion and Other Options*, addresses the allocation of proceeds from the issuance of convertible debt into its equity and debt components. The Company applies this guidance to allocate Initial Public Offering proceeds from the Unitsbetween ClassA ordinary shares and warrants, prorate, allocating the Initial Public Offering proceeds to the assigned value of the warrants and to the ClassA ordinary shares. Offering costs allocated to the Public shares were charged to temporary equity and offering costs allocated to the Public and Private Placement Warrants were charged to shareholders deficit as Public and Private Placement Warrants after managements evaluation were accounted for under equity treatment.
F-10
INSIGHT DIGITAL PARTNERS II
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2025
Income Taxes
The Company accounts for income taxes under ASC740, *Income Taxes* (ASC740). ASC740 requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statement and tax basis of assets and liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carryforwards. ASC740 additionally requires a valuation allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not be realized.
ASC740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprises financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position 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. ASC740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim period, disclosure and transition.
Based on the Companys evaluation, it has been concluded that there are no significant uncertain tax positions requiring recognition in the Companys financial statements. Since the Company was incorporated on July11, 2025, the evaluation was performed for the upcoming 2025 tax year which will be the only period subject to examination.
The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of December 31, 2025. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. There are no taxes in the Cayman Islands, and accordingly, income taxes are not levied on the Company. Consequently, income taxes are not reflected in the Companys financial statements.
On July 4, 2025, President Trump signed into law the One Big Beautiful Bill Act (OBBBA). ASC 740, Income Taxes, requires the effects of changes in tax laws to be recognized in the period in which the legislation is enacted. The Company is currently evaluating the impact of the new law. However, none of the tax provisions are expected to have a significant impact on the Companys financial statements.
ClassA Ordinary Shares Subject to Possible Redemption
The public shares contain a redemption feature which allows for the redemption of such public shares in connection with the Companys liquidation, or if there is a shareholder vote or tender offer in connection with the Companys initial Business Combination. In accordance with ASC 480-10-S99, the Company classifies public shares subject to redemption outside of permanent equity as the redemption provisions are not solely within the control of the Company. The Company recognizes changes in redemption value immediately as they occur and will adjust the carrying value of redeemable shares to equal the redemption value at the end of each reporting period. Immediately upon the closing of the Initial Public Offering, the Company recognized the accretion from initial book value to redemption value. The change in the carrying value of redeemable shares will result in charges against additional paid-in capital (to the extent available) and then to accumulated deficit. Accordingly, as of December 31, 2025, Class A ordinary shares subject to possible redemption are presented at redemption value as temporary equity, outside of the shareholders deficit section of the Companys balance sheet. As of December 31, 2025, the Class A ordinary shares subject to possible redemption reflected in the balance sheet are reconciled in the following table:
| Gross proceeds | | $ | 172,500,000 | | |
| Less: | | | | | |
| Proceeds allocated to Public Warrants | | | (4,597,125 | ) | |
| Public share issuance cost | | | (10,556,532 | ) | |
| Plus: | | | | | |
| Remeasurement of carrying value to redemption value | | | 16,313,585 | | |
| Class A ordinary shares subject to possible redemption, December 31, 2025 | | $ | 173,659,928 | | |
F-11
INSIGHT DIGITAL PARTNERS II
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2025
*Net Income per Ordinary Share*
The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, Earnings Per Share. Net income per ordinary share is computed by dividing net income by the weighted average number of shares of ordinary shares outstanding for the period. The Company has two classes of ordinary shares, which are referred to as ClassA ordinary Shares and ClassB ordinary shares. Accretion associated with the redeemable shares of ClassA Ordinary Shares is excluded from loss per ordinary share as the redemption value approximates fair value.
The following table reflects the calculation of basic and diluted net income per ordinary share (in dollars, except per share amounts):
| | | For the Period from July 11, 2025 (Inception) Through December 31, 2025 | | |
| Basic net income per ordinary share | | ClassA | | | ClassB | | |
| Numerator: | | | | | | | |
| Allocation of net income, as adjusted | | $ | 488,484 | | | $ | 404,901 | | |
| Denominator: | | | | | | | | | |
| Basic weighted average shares outstanding | | | 6,182,081 | | | | 5,124,277 | | |
| Basic and diluted net income per ordinary share | | $ | 0.08 | | | $ | 0.08 | | |
| | | For the Period from July 11, 2025 (Inception) Through December 31, 2025 | | |
| Diluted net income per ordinary share | | ClassA | | | ClassB | | |
| Numerator: | | | | | | | |
| Allocation of net income, as adjusted | | $ | 483,112 | | | $ | 410,273 | | |
| Denominator: | | | | | | | | | |
| Basic and diluted weighted average shares outstanding | | | 6,182,081 | | | | 5,250,000 | | |
| Basic and diluted net income per ordinary share | | $ | 0.08 | | | $ | 0.08 | | |
Fair Value of Financial Instruments
The fair value of the Companys assets and liabilities, which qualify as financial instruments under FASB ASC Topic820, *Fair Value Measurement*, approximates the carrying amounts represented in the accompanying balance sheet, primarily due to their short-term nature.
Warrants
The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrants specific terms and applicable authoritative guidance in ASC Topic480, *Distinguishing Liabilities from Equity* (ASC480), and ASC815. The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC480, meet the definition of a liability pursuant to ASC480, and whether the warrants meet all of the requirements for equity classification under ASC815, including whether the warrants are indexed to the Companys own ordinary shares, 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 warrants are outstanding.
For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded as liabilities at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the statement of operations.
The warrants are not precluded from equity classification and were accounted for as such on the date of issuance and each balance sheet date thereafter. There are 8,625,000 Public Warrants and 5,450,000 Private Placement Warrants currently outstanding as of December 31, 2025.
F-12
INSIGHT DIGITAL PARTNERS II
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2025
Share-Based Compensation
The Company records share-based compensation in accordance with FASB ASC Topic 718, Compensation-Stock Compensation guidance to account for its share-based compensation. It defines a fair value-based method of accounting for an employee share option or similar equity instrument. The Company recognizes all forms of share-based payments at their fair value on the grant date, which are based on the estimated number of awards that are ultimately expected to vest. Share-based payments are valued using the Monte Carlo model. Grants of share-based payment awards issued to non-employees for services rendered have been recorded at the fair value of the share-based payment, which is the more readily determinable value. The grants are amortized on a straight-line basis over the requisite service periods, which is generally the vesting period. If an award is granted, but vesting does not occur, any previously recognized compensation cost is reversed in the period related to the termination of service. Share-based compensation expenses are included in costs and operating expenses depending on the nature of the services provided in the statement of operations.
Recent Accounting Standards
In December 2023 FASB issued ASU 2023-09, Improvements to Income Tax Disclosures, which amends ASC 740, Income Taxes, to improve the transparency and decision usefulness of income tax disclosures for all entities subject to income taxes for the fiscal years beginning after December 31, 2024. The Company evaluated requirements for the new standard and determined that they are not applicable as it is not subject to income taxation.
Other than as described above, management does not believe that any recently issued, but not effective, accounting pronouncements, if currently adopted, would have a material effect on the Companys financial statements.
NOTE 3. INITIAL PUBLIC OFFERING
Pursuant to the Initial Public Offering on October 30, 2025, the Company sold 17,250,000Units, including 2,250,000 Units for the full close of the underwriters overallotment option, at a purchase price of $10.00 per Unit, generating gross proceeds of $172,500,000. Each Unit consists of one ClassA ordinary share and one-half of one redeemable warrant (Public Warrant). Each whole Public Warrant entitles the holder to purchase one ClassA ordinary share at an exercise price of $11.50 per share, subject to adjustment (see Note7).
NOTE 4. PRIVATE PLACEMENT
Simultaneously with the closing of the Initial Public Offering on October 30, 2025, the Sponsor and the underwriter purchased an aggregate of 5,450,000 Private Placement Warrants at a price of $1.00 per Private Placement Warrant, generating gross proceeds of $5,450,000. Of those 5,450,000 Private Placement Warrants, the Sponsor purchased 3,725,000 Private Placement Warrants and the underwriter purchased 1,725,000 Private Placement Warrants. Each whole Private Placement Warrant is exercisable to purchase one ClassA ordinary share at a price of $11.50 per share, subject to adjustment, terms and limitations as described herein. A portion of the proceeds from the sale of the Private Placement Warrants was added to the net proceeds from the Initial Public Offering held in the Trust Account. If the Company does not complete a Business Combination, the proceeds from the sale of the Private Placement Warrants held in the Trust Account will be used to fund the redemption of the Public Shares (subject to the requirements of applicable law) and the Private Placement Warrants will expire worthless.
NOTE 5. RELATED PARTY TRANSACTIONS
Founder Shares
On July17, 2025, the Sponsor was issued 5,750,000 ClassB ordinary shares (the Founder Shares) for an aggregate price of $25,000 paid to cover certain expenses on behalf of the Company. The Founder Shares include an aggregate of up to 750,000 ClassB ordinary shares subject to forfeiture by the Sponsor to the extent that the underwriters over-allotment option is not exercised in full or in part, so that the Sponsor will own, on an as-converted basis, 25% of the Companys issued and outstanding shares after the Initial Public Offering (assuming the Sponsor does not purchase any Public Shares in the Initial Public Offering). On October 30, 2025, the underwriter exercised its over-allotment option in full to be settled as part of the closing of the Initial Public Offering. As a result, 750,000 Founder Shares are no longer subject to forfeiture by the Sponsor.
F-13
INSIGHT DIGITAL PARTNERS II
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2025
On July 30, 2025, the Company issued an aggregate of 210,000 Founder Shares to director nominees and officers in connection with their nomination as a director of the Company. These issuances were made pursuant to the exemption from registration contained in section 4(a)(2) of the Securities Act. The issuance of the Founder Shares to the Companys director nominees is within the scope of FASB ASC Topic 718, *Compensation-Stock Compensation* (ASC 718). Under ASC 718, stock-based compensation associated with equity-classified awards is measured at fair value upon the grant date. The total fair value of the 210,000 Founder Shares represented by such membership interests assigned to the holders of such interests on July 30, 2025 was $963,900 or $4.59 per share. The Company established the initial fair value of the transferred Founder Shares on July 30, 2025, the date of the grant agreement, using a calculation prepared by a third-party valuation team. The membership interests were assigned subject to a performance condition (i.e., providing services through Business Combination). Stock-based compensation would be recognized at the date a Business Combination is considered probable (i.e., upon consummation of a Business Combination) in an amount equal to the number of membership interests that ultimately vest times the assignment date fair value per share (unless subsequently modified) less the amount initially received for the assignment of the membership interests. As of December 31, 2025, the Company determined that the initial Business Combination is not considered probable and therefore no compensation expense has been recognized.
The Founder Shares are designated as Class B ordinary shares and, except as described below, are identical to the ClassA ordinary shares included in the units being sold in the IPO, and holders of Founder Shares have the same shareholder rights as public shareholders, except that (i)the Founder Shares are subject to certain transfer restrictions, as described in more detail below, (ii)the Founder Shares are entitled to registration rights, (iii)the Companys Sponsor, officers and directors have entered into a letter agreement with the Company, pursuant to which they have agreed to (A)waive their redemption rights with respect to their Founder Shares and public shares in connection with the completion of the Companys initial Business Combination, (B)waive their redemption rights with respect to their Founder Shares and public shares in connection with a shareholder vote to approve an amendment to the Companys amended and restated memorandum and articles of association (1)to modify the substance or timing of the Companys obligation to allow redemption in connection with the Companys initial Business Combination or to redeem 100% of the Companys public shares if the Company has not consummated an initial Business Combination within the completion window or (2)with respect to any other material provisions relating to shareholders rights or pre-initial Business Combination activity, (3)waive their rights to liquidating distributions from the Trust Account with respect to their Founder Shares if the Company fails to complete the Companys initial Business Combination within the completion window, although they will be entitled to liquidating distributions from the Trust Account with respect to any public shares they hold if the Company fails to complete the initial Business Combination within such time period and to liquidating distributions from assets outside the Trust Account and (4)vote any Founder Shares held by them and any public shares purchased during or after the IPO (including in open market and privately negotiated transactions) in favor of the initial Business Combination (including any proposals recommended by the Companys board of directors in connection with such Business Combination) (except with respect to any public shares which may not be voted in favor of approving the Business Combination transaction in accordance with the requirements of Rule14e-5 under the ExchangeAct and any SEC interpretations or guidance relating thereto), (iv)the Founder Shares are automatically convertible into ClassA ordinary shares immediately prior to, concurrently with or immediately following the consummation of the Companys initial Business Combination or at any time prior thereto at the option of the holder on a one-for-one basis, subject to adjustment as described herein and in the amended and restated memorandum and articles of association, and (v)prior to the closing of the Companys initial Business Combination, only holders of ClassB ordinary shares will be entitled to vote on the appointment and removal of directors or continuing in a jurisdiction outside the Cayman Islands (including any special resolution required to amend the constitutional documents or to adopt new constitutional documents, in each case, as a result of approving a transfer by way of continuation in a jurisdiction outside the Cayman Islands).
The Founder Shares will automatically convert into ClassA ordinary shares immediately prior to, concurrently with or immediately following the consummation of the initial Business Combination or at any time prior thereto at the option of the holder on a one-for-one basis, subject to adjustment for share subdivisions, share capitalizations, reorganizations, recapitalizations and the like, and subject to further adjustment as provided herein. In the case that additional ClassA ordinary shares, or any other equity-linked securities, are issued or deemed issued in excess of the amounts sold in the IPO and related to or in connection with the closing of the initial Business Combination, the ratio at which ClassB ordinary shares convert into ClassA ordinary shares will be adjusted (unless the holders of a majority of the outstanding ClassB ordinary shares agree to waive such adjustment with respect to any such issuance or deemed issuance) so that the number of ClassA ordinary shares issuable upon conversion of all ClassB ordinary shares will equal, in the aggregate, 25% of the sum of (i)the total number of all ClassA ordinary shares outstanding upon the completion of the IPO (including any ClassA ordinary shares issued pursuant to the underwriters over-allotment option and excluding the ClassA ordinary shares underlying the Private Placement Warrants issued to the Sponsor and the underwriter), plus (ii)all ClassA ordinary shares and equity-linked securities issued or deemed issued in connection with the Companys initial Business Combination (excluding any shares or equity-linked securities issued, or to be issued, to any seller in the initial Business Combination and any private placement-equivalent warrants issued to the Companys Sponsor or any of its affiliates or to the Companys officers and directors upon conversion of working capital loans) minus (iii)any redemptions of ClassA ordinary shares by public shareholders in connection with an initial Business Combination; provided that such conversion of Founder Shares will never occur on a less than one-for-one basis.
With certain limited exceptions, the Founder Shares are not transferable, assignable or saleable (except to the Companys officers and directors and other persons or entities affiliated with the Companys Sponsor, each of whom will be subject to the same transfer restrictions) until, with respect to 15% of the Founder Shares held by the Sponsor, upon the completion of a Business Combination and, with respect to the remaining Founder Shares, the earlier of (A)one year after the completion of the Companys initial Business Combination or earlier if, subsequent to the Companys initial Business Combination, the last sale price of the ClassA ordinary shares equals or exceeds $12.00 per share (as adjusted for share subdivisions, share capitalizations, reorganizations, recapitalizations and the like) for any 20tradingdays within any 30-tradingday period commencing at least 150days after the Companys initial Business Combination, and (B)the date following the completion of the Companys initial Business Combination on which the Company completes a liquidation, merger, share exchange or other similar transaction that results in all of the Companys shareholders having the right to exchange their ClassA ordinary shares for cash, securities or other property.
F-14
INSIGHT DIGITAL PARTNERS II
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2025
Promissory NoteRelated Party
On July17, 2025, the Sponsor agreed to loan the Company an aggregate of up to $300,000 to cover expenses related to the Initial Public Offering pursuant to a promissory note (the Promissory Note). This loan is non-interest bearing and payable on the earlier of December31, 2025 or the date on which the Company consummates the Initial Public Offering of its securities. On October 30, 2025, the Company had $140,000 borrowed under the Promissory Note which was fully settled on November 4, 2025, subsequent to the closing of the Initial Public Offering. Borrowing against the Promissory Note is no longer available.
Share Subscription Receivable
On October 30, 2025, in connection with the sale of the Private Placement Warrants, the Sponsor should have deposited the net proceeds of $1,618,000 into the Companys bank account. This was still being held at the Sponsors bank account at the Initial Public Offering date hence, the Company has accounted for the amount due as a share subscription receivable within equity. On November 4, 2025, the Company has received the share subscription receivable from the Sponsor subsequent to the closing of the Initial Public Offering. No share subscription receivable was outstanding as of December 31, 2025.
Administrative Services Agreement
The Companys Sponsor has agreed, commencing on October 28, 2025, the effective date of the registration statement relating to the Initial Public Offering, through the earlier of the Companys consummation of a Business Combination and its liquidation, to make available to the Company certain general and administrative services, including office space and administrative services, as the Company may require from time to time. The Company has agreed to pay to the Sponsor up to $30,000 per month for these services during the 24-month period to complete a Business Combination. As of December 31, 2025, the Company incurred $63,000 in administrative service fees, of which $60,000 was paid and $3,000 was recorded as an accrued expense in the accompanying balance sheet.
Related Party Loans
In order to finance transaction costs in connection with the initial 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 the initial Business Combination, the Company will repay such loaned amounts. In the event that the initial Business Combination does not close, the Company may use a portion of the working capital held outside the Trust Account to repay such loaned amounts, including the repayment of loans from the Sponsor to pay for any amount deposited to pay for any extension of the time to complete the initial Business Combination, but no proceeds from the Trust Account would be used for such repayment. Up to $1,500,000 of such loans may be convertible into Units, at a price of $10.00 per Unit at the option of the lender, upon consummation of the initial Business Combination. The Unitswould be identical to the Private Placement Warrants. The terms of such loans by the Companys officers and directors, if any, have not been determined and no written agreements exist with respect to such loans. There are no such outstanding related party loans as of December 31, 2025.
NOTE 6. COMMITMENTS AND CONTINGENCIES
Risks and Uncertainties
The Companys ability to complete an initial Business Combination may be adversely affected by various factors, many of which are beyond the Companys control. The Companys ability to consummate an initial Business Combination could be impacted by, among other things, changes in laws or regulations, downturns in the financial markets or in economic conditions, inflation, fluctuations in interest rates, increases in tariffs, supply chain disruptions, declines in consumer confidence and spending, public health considerations, and geopolitical instability, such as the military conflicts in Ukraine and the Middle East. The Company cannot at this time predict the likelihood of one or more of the above events, their duration or magnitude or the extent to which they may negatively impact the Companys ability to complete an initial Business Combination.
F-15
INSIGHT DIGITAL PARTNERS II
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2025
Registration and Shareholder Rights Agreement
The holders of the (i)Founder Shares, which were issued in a private placement prior to the closing of the IPO, (ii)Private Placement Warrants which were issued in a private placement simultaneously with the closing of Initial Public Offering and the ClassA ordinary shares underlying such Private Placement Warrants and (iii)Private Placement Warrants that may be issued upon conversion of working capital loans, have registration rights to require the Company to register a sale of any of the Companys securities held by them and any other securities of the Company acquired by them prior to the consummation of the Companys initial Business Combination pursuant to a registration rights agreement to be signed on the effective date of the IPO.
Pursuant to the registration rights agreement the Company is obligated to register the 12,700,000 ClassA ordinary shares and 6,950,000warrants. The number of ClassA ordinary shares includes (i)5,750,000 ClassA ordinary shares to be issued upon conversion of the Founder Shares, (ii)5,450,000 ClassA ordinary shares underlying the Private Placement Warrants and (iii)1,500,000 ClassA ordinary shares underlying the Private Placement Warrants issued upon conversion of working capital loans. The number of warrants includes the 5,450,000 Private Placement Warrants and 1,500,000 Private Placement Warrants issued upon the conversion of working capital loans. The holders of these securities are entitled to make up to three demands, excluding short form demands, that the Company registers such securities. In addition, the holders have certain piggyback registration rights with respect to registration statements filed subsequent to the Companys completion of the Companys initial Business Combination. The Company bears the expenses incurred in connection with the filing of any such registration statements.
Underwriting Agreement
Pursuant to the underwriting agreement dated October 28, 2025, the Sponsor and the executive officers and directors have agreed that, for a period of 180days from the date of this prospectus, will not, without the prior written consent of the representative, offer, sell, contract to sell, pledge, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend or otherwise transfer or dispose of, directly or indirectly, any units, warrants, ordinary shares or any other securities convertible into, or exercisable or exchangeable for, any units, ordinary shares, Founder Shares or warrants, subject to certain exceptions. The representative in their discretion may release any of the securities subject to these lock-up agreements at any time without notice, other than in the case of the officers and directors, which shall be with notice. The Sponsor, officers and directors are also subject to separate transfer restrictions on their Founder Shares and Private Placement Warrants pursuant to the letter agreement described herein.
The Company granted the underwriter a 45-day option from the date of the Initial Public Offering to purchase up to 2,250,000 additional Unitsto cover over-allotments, if any, at the Initial Public Offering price less the underwriting discounts and commissions. On October 30, 2025, the underwriter exercised its over-allotment option in full, closing on the 2,250,000 additional units simultaneously with the Initial Public Offering.
The underwriter was paid in cash an underwriting discount of $3,450,000 simultaneously at the closing of the Initial Public Offering. In addition, the underwriter was entitled to a deferred fee of $0.40 per Unit, or $6,900,000 in the aggregate. The deferred fee will become payable to the underwriter from the amounts held in the Trust Account solely in the event that the Company completes a Business Combination, but such $0.40 per unit shall be due to the underwriter solely on amounts remaining in the Trust Account following all properly submitted shareholder redemptions, including in connection with the consummation of the initial Business Combination, subject to the terms of the underwriting agreement.
F-16
INSIGHT DIGITAL PARTNERS II
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2025
NOTE 7. SHAREHOLDERS DEFICIT
*Preference shares*The Company is authorized to issue 5,000,000 preference shares 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, there were no preference shares issued or outstanding.
*ClassA ordinary shares*The Company is authorized to issue 500,000,000 ClassA ordinary shares with a par value of 0.0001 per share. Holders of the Companys ClassA ordinary shares are entitled to one vote for each share. As of December 31, 2025, there were no ClassA ordinary shares issued or outstanding, excluding the 17,250,000 shares subject to possible redemption.
*ClassB ordinary shares*The Company is authorized to issue 50,000,000 ClassB ordinary shares with a par value of 0.0001 per share. Holders of the Companys ClassB ordinary shares are entitled to one vote for each share. As of December 31, 2025, there were 5,750,000 ClassB ordinary shares outstanding. Of the 5,750,000 ClassB ordinary shares outstanding, up to 750,000 shares are subject to forfeiture to the Company by the Sponsor for no consideration to the extent that the underwriters over-allotment option is not exercised in full or in part, so that the initial shareholders will collectively own 25% of the Companys issued and outstanding ordinary shares after the Initial Public Offering. On October 30, 2025, the underwriter exercised its over-allotment option in full to be settled as part of the closing of the Initial Public Offering. As a result, 750,000 Founder Shares are no longer subject to forfeiture by the Sponsor.
Ordinary shareholders of record are entitled to one vote for each share held on all matters to be voted on by shareholders. Except as described below, holders of ClassA ordinary shares and holders of ClassB ordinary shares will vote together as a single class on all matters submitted to a vote of the Companys shareholders except as required by law. Prior to the closing of the initial Business Combination, only holders of ClassB ordinary shares (i)will have the right to appoint and remove directors prior to or in connection with the completion of the initial Business Combination and (ii)will be entitled to vote on continuing the Company in a jurisdiction outside the Cayman Islands (including any special resolution required to amend constitutional documents or to adopt new constitutional documents, in each case, as a result of approving a transfer by way of continuation in a jurisdiction outside the Cayman Islands).
On any other matters submitted to a vote of shareholders prior to or in connection with the completion of the initial Business Combination, holders of the ClassB ordinary shares and holders of the ClassA ordinary shares will vote together as a single class, except as required by law.
The Founder Shares will automatically convert into ClassA ordinary shares immediately prior to, concurrently with or immediately following the consummation of a Business Combination, and may be converted at any time prior to the Business Combination, at the option of the holder, on a one-for-one basis (unless otherwise provided in the Business Combination agreement), subject to adjustment for share subdivisions, share dividends, reorganizations, recapitalizations and the like, and subject to further adjustment as provided herein. In the case that additional ClassA ordinary shares or equity-linked securities are issued or deemed issued in connection with the Business Combination, the number of ClassA ordinary shares issuable upon conversion of all Founder Shares will equal, in the aggregate, on an as-converted basis, approximately 25% of the total number of ClassA ordinary shares outstanding after such conversion (not including the ClassA ordinary shares underlying the Private Placement Warrants), including the total number of ClassA ordinary shares issued, or deemed issued or issuable upon conversion or exercise of any equity-linked securities or rights issued or deemed issued, by the Company in connection with or in relation to the consummation of the Business Combination, excluding any ClassA ordinary shares or equity-linked securities or rights exercisable for or convertible into ClassA ordinary shares issued, or to be issued, to any seller in the Business Combination and any Private Placement Warrants issued to the Sponsor, officers or directors upon conversion of Working Capital Loans, provided that such conversion of Founder Shares will never occur on a less than one-for-one basis.
*Warrants*As of December 31, 2025, there were 14,075,000 warrants outstanding, including 8,625,000 Public Warrants and 5,450,000 Private Placement Warrants. Each whole Public Warrant entitles the registered holder to purchase one ClassA ordinary share at a price of $11.50 per share, subject to adjustment as discussed below, at any time commencing 30days after the completion of the initial Business Combination. Pursuant to the warrant agreement, a warrant holder may exercise its Public Warrants only for a whole number of ClassA ordinary shares. No fractional Public Warrants will be issued upon separation of the units and only whole Public Warrants will trade.
The Public Warrants will expire fiveyears after the completion of the initial Business Combination, at 5:00p.m., NewYork City time, or earlier upon redemption or liquidation.
F-17
INSIGHT DIGITAL PARTNERS II
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2025
The Company has agreed that as soon as practicable, but in no event later than 20businessdays after the closing of the initial Business Combination, the Company will use commercially reasonable efforts to file with the SEC a post-effective amendment to the registration statement of which this prospectus forms a part or a new registration statement covering the registration, under the Securities Act, of the ClassA ordinary shares issuable upon exercise of the warrants and thereafter will use the Companys commercially reasonable efforts to cause the same to become effective within 60businessdays following the initial Business Combination and to maintain a current prospectus relating to the ClassA ordinary shares issuable upon exercise of the warrants, until the expiration of the warrants in accordance with the provisions of the warrant agreement. If a registration statement covering the ClassA ordinary shares issuable upon exercise of the warrants is not effective by the sixtieth (60)businessday after the closing of the initial Business Combination, warrant holders may, until such time as there is an effective registration statement and during any period when the Company will have failed to maintain an effective registration statement, exercise warrants on a cashless basis in accordance with Section3(a)(9)of the Securities Act or another exemption.
Once the warrants become exercisable, the Company may call the warrants for redemption for cash:
| | in whole and not in part; | |
| | at a price of $0.01 per warrant; | |
| | upon a minimum of 30days prior written notice of redemption; | |
| | if, and only if, the closing price of the ClassA ordinary shares equals or exceeds $18.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading Warrants) for any 20tradingdays within a 30-tradingday period commencing at least 30days after completion of the Companys initial Business Combination and ending threebusinessdays before the Company sends the notice of redemption to the warrant holders. | |
If and when the warrants become redeemable by the Company for cash, the Company may exercise the redemption right even if the Company is unable to register or qualify the underlying securities for sale under all applicable state securities laws.
In addition, if (x)the Company issues additional ClassA ordinary shares or equity-linked securities for capital raising purposes in connection with the closing of the initial Business Combination at an issue price or effective issue price of less than $9.20 per ClassA ordinary shares (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 initial shareholders or their affiliates, without taking into account any Founder Shares held by the initial shareholders 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 initial Business Combination on the date of the consummation of the initial Business Combination (net of redemptions), and (z)the volume weighted average trading price of the ClassA ordinary shares during the 20tradingday period starting on thetradingday after theday on which the Company consummate the 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 higher of the Market Value and the Newly Issued Price, and the $18.00 per share redemption trigger price will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price.
The Private Placement Warrants (including the ClassA ordinary shares issuable upon exercise of the Private Placement Warrants) will not be transferable, assignable or salable until 30days after the completion of the initial Business Combination. The Private Placement Warrants have terms and provisions that are identical to those of the Public Warrants being sold as part of the units in the Initial Public Offering.
The Company accounted for the 14,075,000warrants issued in connection with the Initial Public Offering (including 8,625,000 Public Warrants and 5,450,000 Private Placement Warrants) in accordance with the guidance contained in ASC815-40. Such guidance provides that the warrants described above are not precluded from equity classification. Equity-classified contracts are initially measured at fair value (or allocated value). Subsequent changes in fair value are not recognized as long as the contracts continue to be classified in equity.
F-18
INSIGHT DIGITAL PARTNERS II
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2025
NOTE 8. FAIR VALUE MEASUREMENTS
Fair value is defined as the price that would be received for sale of an asset or paid for transfer of a liability in an orderly transaction between market participants at the measurement date. U.S. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include:
| | | Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets; | |
| | | | |
| | | Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and | |
| | | | |
| | | Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. | |
In some circumstances, the inputs used to measure fair value might be categorized within different levels of the fair value hierarchy. In those instances, the fair value measurement is categorized in its entirety in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement.
The fair value of the Public Warrants is $4,597,125 or $0.533 per Public Warrant. The fair value of Public Warrants was determined using Monte Carlo Simulation Model. The Public Warrants have been classified within shareholders deficit and will not require remeasurement after issuance. The following table presents the quantitative information regarding market assumptions used in the Level 3 valuation of the Public Warrants:
| | | October 30, 2025 | | |
| Volatility | | | 11.3 | % | |
| Risk-free rate | | | 3.63 | % | |
| Stock price | | $ | 9.73 | | |
| Weighted term (years) | | | 2.94 | | |
NOTE 9. SEGMENT INFORMATION
ASC Topic280, *Segment Reporting*, establishes standards for companies to report, in their financial statements, 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.
F-19
INSIGHT DIGITAL PARTNERS II
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2025
The Companys CODM has been identified as the Chief Executive Officer, who reviews the operating results for the Company as a whole to make decisions about allocating resources and assessing financial performance. Accordingly, management has determined that the Company only has one reportable segment.
The CODM assesses performance for the single segment and decides how to allocate resources based on net income or loss that also is reported on the statement of operations as net income or loss. The measure of segment assets is reported on the balance sheet as total assets. When evaluating the Companys performance and making key decisions regarding resource allocation, the CODM reviews several key metrics included in net income or loss and total assets, which include the following:
| | | December 31, 2025 | | |
| Cash | | $ | 1,247,831 | | |
| Cash held in Trust Account | | $ | 173,659,928 | | |
| | | For the Period from July 11, 2025 (inception) through December31, 2025 | | |
| General and administrative expenses | | $ | 266,543 | | |
| Interest earned on cash held in Trust Account | | $ | 1,159,928 | | |
The CODM reviews general and administrative expenses 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 expenses 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 statement of operations, are the significant segment expenses provided to the CODM on a regular basis.
The CODM reviews the position of total assets to assess if the Company has sufficient resources available to discharge its liabilities. The CODM is provided with details of cash and liquid resources available with the Company. Additionally, the CODM regularly reviews the status of deferred costs incurred to assess if these are in line with the planned use of proceeds raised from the Initial Public Offering.
NOTE 10. SUBSEQUENT EVENTS
The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the financial statements were issued. Based on this review the Company did not identify any subsequent events that would have required adjustment or disclosure in the financial statements.
F-20