Filed 2026-03-13 · Period ending 2025-12-31 · 52,750 words · SEC EDGAR
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# Dune Acquisition Corp II (IPOD) — 10-K
**Filed:** 2026-03-13
**Period ending:** 2025-12-31
**Accession:** 0001213900-26-027746
**Source:** [SEC EDGAR](https://www.sec.gov/Archives/edgar/data/2041047/000121390026027746/)
**Origin leaf:** a35e0e5c6027903b150a492dbad490f702db6c9952ea5ba9e68b781604895ec8
**Words:** 52,750
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UNITED STATES
SECURITIES AND
EXCHANGE COMMISSION
Washington, D.C.
20549
FORM 10-K
(Mark One)
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal
year ended December
31, 2025
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For
the transition period from to
Commission file
number: 001-42607
Dune
Acquisition Corp. II
(Exact name of
registrant as specified in its charter)
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Cayman
Islands |
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N/A |
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(State
or other jurisdiction of incorporation or organization) |
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(I.R.S. Employer Identification No.) | |
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12955
Biscayne Boulevard Suite 200 PMB 616
Miami, Florida |
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33181 |
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(Address of principal executive
offices) |
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(Zip Code) | |
Registrants
telephone number, including area code: (561) 489-2062
Securities registered pursuant to
Section 12(b) of the Act:
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Title
of each class |
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Trading
Symbol(s) |
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Name
of each exchange on which registered | |
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Units,
each consisting of one Class A Ordinary Share and three-quarters of one Redeemable Warrant |
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IPODU |
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The
Nasdaq Stock Market LLC | |
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Class
A Ordinary Shares, par value $0.0001 per share |
|
IPOD |
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The
Nasdaq Stock Market LLC | |
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| |
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Redeemable Warrants, each whole warrant exercisable
for one Class A Ordinary Share at an exercise price of $11.50 |
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IPODW |
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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 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 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.
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Large accelerated filer |
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Accelerated filer |
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Non-accelerated
filer |
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Smaller reporting company |
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Emerging growth company |
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| |
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 Act). Yes
No
As of June 30, 2025, the aggregate market value
of the Registrants ordinary shares held by non-affiliates of the Registrant was $146,625,000.
As of March 10, 2026, there were 14,482,813
Class A Ordinary Shares, par value $0.0001 per share, and 5,750,000
Class B Ordinary Shares, par value $0.0001 per share, of the registrant issued and outstanding.
TABLE
OF CONTENTS
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PAGE | |
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PART I |
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Item 1. |
Business. |
1 | |
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Item 1A. |
Risk Factors. |
21 | |
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Item 1B. |
Unresolved Staff Comments. |
25 | |
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Item 1C. |
Cybersecurity. |
25 | |
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Item 2. |
Properties. |
25 | |
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Item 3. |
Legal Proceedings. |
25 | |
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Item 4. |
Mine Safety Disclosures. |
25 | |
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PART II |
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Item 5. |
Market for Registrants Common Equity,
Related Stockholder Matters and Issuer Purchases of Equity Securities. |
26 | |
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Item 6. |
[Reserved] |
27 | |
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Item 7. |
Managements Discussion and Analysis of Financial Condition
and Results of Operations. |
27 | |
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Item 7A. |
Quantitative and Qualitative Disclosures About Market Risk. |
32 | |
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Item 8. |
Financial Statements and Supplementary Data. |
32 | |
|
Item 9. |
Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure. |
32 | |
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Item 9A. |
Controls and Procedures. |
32 | |
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Item 9B. |
Other Information. |
33 | |
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Item 9C. |
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections. |
33 | |
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PART III |
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Item 10. |
Directors, Executive Officers and Corporate Governance. |
34 | |
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Item 11. |
Executive Compensation. |
40 | |
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Item 12. |
Security Ownership of Certain Beneficial Owners and Management
and Related Stockholder Matters. |
41 | |
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Item 13. |
Certain Relationships and Related Transactions, and Director
Independence. |
43 | |
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Item 14. |
Principal Accountant Fees and Services. |
46 | |
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PART IV |
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Item 15. |
Exhibit and Financial Statement Schedules. |
47 | |
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Item 16. |
Form 10-K Summary. |
47 | |
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SIGNATURES |
49 | |
i
CAUTIONARY NOTE
REGARDING FORWARD-LOOKING STATEMENTS
This Report (as defined below),
including, without limitation, statements under Item 7. Managements Discussion and Analysis of Financial Condition and Results
of Operations, includes forward-looking statements within the meaning of Section 27A of the Securities Act (as defined below) and
Section 21E of the Exchange Act (as defined below). These forward-looking statements can be identified by the use of forward-looking terminology,
including the words believes, estimates, anticipates, expects, intends,
plans, may, will, potential, projects, predicts, continue,
or should, or, in each case, their negative or other variations or comparable terminology. There can be no assurance that
actual results will not materially differ from expectations. Such statements include, but are not limited to, any statements relating
to our ability to consummate any acquisition or other Business Combination (as defined below) and any other statements that are not statements
of current or historical facts. These statements are based on Managements (as defined below) current expectations, but actual results
may differ materially due to various factors, including, but not limited to:
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our ability to complete our initial Business Combination; | |
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our expectations around the performance of the prospective target business or businesses; | |
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our success in retaining or recruiting, or changes required in, our officers, key employees or directors following
our initial Business Combination; | |
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our officers and directors allocating their time to other businesses and potentially having conflicts of interest
with our business or in approving our initial Business Combination, as a result of which, they would then receive expense reimbursements; |
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the potential incentive to consummate an initial Business Combination with an acquisition target that subsequently
declines in value or is unprofitable for public investors due to the low initial price for the Founder Shares (as defined below) paid
by our Old Sponsor (as defined below); | |
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our potential ability to obtain additional financing to complete our initial Business Combination; | |
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the ability of our Management Team (as defined below) to generate and execute on potential acquisition opportunities
that will generate value for our shareholders; | |
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our public securities potential liquidity and trading; | |
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the use of proceeds not held in the Trust Account (as defined below) or available to us from interest income
on the Trust Account balance; | |
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the Trust Account not being subject to claims of third parties; | |
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the value of the Founder Shares following completion of our initial Business Combination likely being substantially
higher than the nominal price paid for them, even if the trading price of our Public Shares (as defined below) at such time is substantially
less than the Redemption Price (as defined below); | |
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the impact on the amount held in the Trust Account, our capitalization, principal shareholders and other impacts
on our Company (as defined below) or Management Team should we seek to extend the Combination Period (as defined below) consistent with
applicable laws, regulations and stock exchange rules; | |
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the value of the Founder Shares following completion of our initial Business Combination likely being substantially
higher than the nominal price paid for them, even if the trading price of our Public Shares (as defined below) at such time is substantially
less than the Redemption Price (as defined below); | |
ii
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the impact on the amount held in the Trust Account, our capitalization, principal shareholders and other impacts
on our Company (as defined below) or Management Team should we seek to extend the Combination Period (as defined below) consistent with
applicable laws, regulations and stock exchange rules; | |
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our financial performance; or | |
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the other risks and uncertainties discussed in Item 1A. Risk Factors below. | |
Additionally, in 2024, the
SEC (as defined below) adopted additional rules and regulations relating to SPACs (as defined below). The 2024 SPAC Rules (as defined
below) require, among other matters, (i) additional disclosures relating to SPAC sponsors and related persons; (ii) additional disclosures
relating to SPAC Business Combination transactions (iii) additional disclosures relating to dilution and to conflicts of interest
involving sponsors and their affiliates in connection with proposed Business Combination transactions; (iv) additional disclosures regarding
projections included in SEC filings in connection with proposed Business Combination transactions and (v) the requirement that both
the SPAC and its target company be co-registrants in connection with registration statements relating to proposed Business Combination
transactions. In addition, the SECs adopting release provided guidance describing circumstances in which a SPAC could become subject
to regulation under the Investment Company Act (as defined below), including its duration, asset composition, business purpose, and the
activities of the SPAC and its management team. The 2024 SPAC Rules may materially affect our ability to negotiate and complete our initial
Business Combination and may increase the costs and time related thereto.
The forward-looking statements
contained in this Report are based on our current expectations and beliefs concerning future developments and their potential effects
on us. Future developments affecting us may not 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. 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.
Unless otherwise stated in
this Report, or the context otherwise requires, references to:
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2024 SPAC Rules are to the rules and regulations for SPACs adopted by the SEC on January 24,
2024, which became effective on July 1, 2024; | |
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Administrative Services Agreement are to the Administrative Services Agreement, dated May 6,
2025, which we originally entered into with an affiliate of our Old Sponsor, for office space, utilities and secretarial and administrative
support, and the obligations of the Old Sponsor thereunder was assumed by our New Sponsor pursuant to the Joinder to Administrative Services
Agreement executed and delivered by our New Sponsor on February 5, 2026; | |
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Advisor is to Carter Glatt, our special advisor; | |
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Amended and Restated Charter are to our Amended and Restated Memorandum and Articles of Association,
as amended and restated, and currently in effect; | |
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ASC are to the FASB (as defined below) Accounting Standards Codification; | |
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ASU are to the FASB Accounting Standards Update; | |
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Audit Committee are to the audit committee of our Board of Directors (as defined below); | |
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Board of Directors or Board are to our board of directors; | |
iii
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Clear Street are to Clear Street LLC, the sole book-running manager for and representative of
the several underwriters of the Initial Public Offering; | |
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Business Combination are to a merger, capital share exchange, asset acquisition, share purchase,
reorganization or similar business combination with one or more businesses; | |
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Class A Ordinary Shares are to our Class A ordinary shares, par value $0.0001 per share; | |
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Class B Ordinary Shares are to our Class B ordinary shares, par value $0.0001 per share; | |
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Combination Period are to (i) the 15-month period, from the closing of the Initial Public Offering
(as defined below) to August 8, 2026 (or such earlier time as determined by our Board), that we have to consummate an initial Business
Combination, or (ii) such other period in which we must consummate an initial Business Combination pursuant to an amendment to our Amended
and Restated Charter and consistent with applicable laws, regulations and stock exchange rules; | |
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Companies Act are to the Companies Act (As Revised) of the Cayman Islands as may be amended
from time to time; | |
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Company, our, we, or us are to Dune Acquisition Corporation
II, a Cayman Islands exempted company; | |
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Continental are to Continental Stock Transfer & Trust Company, trustee of our Trust Account
and warrant agent of our Public Warrants (as defined below); | |
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Deferred Fee are to the additional fee of 4.0% of the gross proceeds of the Initial Public Offering
to which the underwriters to the Initial Public Offering are entitled that is payable only upon our completion of the initial Business
Combination; | |
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DWAC System are to the Depository Trust Companys Deposit/Withdrawal At Custodian System; | |
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Exchange Act are to the Securities Exchange Act of 1934, as amended; | |
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Excise Tax are to the U.S. federal 1% excise tax on certain repurchases of stock by publicly
traded U.S. domestic corporations and certain U.S. domestic subsidiaries of publicly traded foreign corporations occurring on or after
January 1, 2023 as provided for by the Inflation Reduction Act of 2022; | |
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FASB are to the Financial Accounting Standards Board; | |
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Founder Shares are to the Class B Ordinary Shares initially purchased by our Old Sponsor prior
to the Initial Public Offering, and subsequently transferred in part to our New Sponsor pursuant to the New Sponsor Purchase Agreement,
and the Class A Ordinary Shares that will be issued (i) upon the automatic conversion of the Class B Ordinary Shares at the time of our
Business Combination or (ii) at the option of the holders thereof, as described herein (for the avoidance of doubt, such Class A Ordinary
Shares will not be Public Shares); | |
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GAAP are to the accounting principles generally accepted in the United States of America; | |
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IFRS are to the International Financial Reporting Standards, as issued by the International
Accounting Standards Board; | |
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Initial Public Offering or IPO are to the initial public offering that we consummated
on May 8, 2025; | |
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Investment Company Act are to the Investment Company Act of 1940, as amended; | |
iv
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IPO Promissory Note are to that certain unsecured promissory note in the principal amount of
up to $150,000 issued to our Old Sponsor, originally issued on September 30, 2024 and as restated and amended on February 27, 2025; | |
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IPO Registration Statement are to the Registration Statement on Form S-1 initially filed with
the SEC on March 7, 2025, as amended, and declared effective on May 6, 2025 (File No. 333-285639); | |
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JOBS Act are to the Jumpstart Our Business Startups Act of 2012; | |
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Letter Agreement are to the Letter Agreement, dated May 6, 2025, which we originally entered
into with the Old Sponsor Parties, and the New Sponsor Parties have agreed to be bound by the terms thereof pursuant to the Joinder to
Letter Agreement executed and delivered by the New Sponsor Parties on February 5, 2026; | |
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Management or our Management Team are to our executive officers and directors; | |
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Nasdaq are to The Nasdaq Stock Market LLC; | |
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Nasdaq 36-Month Requirement are to the requirement pursuant to the Nasdaq Rules (as defined
below) that a SPAC must complete one or more Business Combinations within 36 months following the effectiveness of its initial public
offering registration statement; | |
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Nasdaq Rules are to the continued listing rules of Nasdaq, as they exist as of the date of this
Report; | |
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New Sponsor are to Collective Acquisition Sponsor LLC, a Delaware limited liability company; | |
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New Sponsor Parties are to the New Sponsor and its elected directors and officers; | |
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Old Sponsor are to Dune Acquisition Holdings II LLC, a Delaware limited liability company; | |
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Old Sponsor Parties are to the Old Sponsor and its elected directors and officers; | |
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Option Units are to the 1,875,000 units of our Company that were purchased by the underwriters
of the Initial Public Offering pursuant to the full exercise of the Over-Allotment Option (as defined below); | |
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Ordinary Resolution are to a resolution of our Company passed by a simple majority of the votes
cast by such shareholders as, being entitled to do so, vote in person or, where proxies are allowed, by proxy at a general meeting of
our Company, or a resolution approved in writing by all of the holders of the issued shares entitled to vote on such matter (or such lower
threshold as may be allowed under the Companies Act from time to time); | |
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Ordinary Shares are to the Class A Ordinary Shares and the Class B Ordinary Shares, together; | |
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Over-Allotment Option are to the 45-day option that the underwriters of the Initial Public Offering
had to purchase up to an additional 1,875,000 Option Units to cover over-allotments, if any, which was fully exercised; | |
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PCAOB are to the Public Company Accounting Oversight Board (United States); | |
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Private Placement are to the private placement of Private Placement Warrants that occurred simultaneously
with the closing of our Initial Public Offering and pursuant to the Private Placement Warrants Purchase Agreement (as defined below); | |
v
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Private Placement Warrants are to the warrants held by our New Sponsor and Old Sponsor originally
issued in connection with the Private Placement; | |
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Private Placement Warrants Purchase Agreement is the Private Placement Warrants Purchase Agreement,
dated May 6, 2025, which we entered into with our Old Sponsor; | |
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Public Shares are to the Class A Ordinary Shares sold as part of the Units in our Initial Public
Offering (whether they were purchased in our Initial Public Offering or thereafter in the open market); | |
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Public Shareholders are to the holders of our Public Shares, including the Old Sponsor Parties
to the extent each member of the Old Sponsor Parties purchased Public Shares, provided that each of the Old Sponsor Parties status
as a Public Shareholder will only exist with respect to such Public Shares; | |
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Public Warrants are to the redeemable warrants sold as part of the Units in our Initial Public
Offering (whether they were subscribed for in our Initial Public Offering or purchased in the open market); | |
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Redemption Price are to the pro rata redemption price in any redemption we expect to pay, which
was approximately $10.29 per Public Share as of December 31, 2025 (before taxes payable, if any); | |
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Registration Rights Agreement are to the Registration Rights Agreement, dated May 6, 2025, which
we originally entered into with the Old Sponsor, and our New Sponsor has agreed to be a party thereto pursuant to the Joinder to the Registration
Rights Agreement executed and delivered by our New Sponsor on February 5, 2026; | |
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Report are to this Annual Report on Form 10-K for the fiscal year ended December 31, 2025; | |
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Sarbanes-Oxley Act are to the Sarbanes-Oxley Act of 2002; | |
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SEC are to the U.S. Securities and Exchange Commission; | |
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Securities Act are to the Securities Act of 1933, as amended; | |
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SPACs are to special purpose acquisition companies; | |
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Special Resolution are to a resolution of our Company passed by at least a two-thirds (2/3)
majority of the votes cast by such shareholders as, being entitled to do so, vote in person or, where proxies are allowed, by proxy at
a general meeting of our Company of which notice specifying the intention to propose the resolution as a special resolution has been duly
given, or a resolution approved in writing by all of the holders of the issued shares entitled to vote on such matter (or such lower threshold
as may be allowed under the Companies Act from time to time); | |
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Trust Account are to the U.S.-based trust account in which an amount of $144,109,375 from the
net proceeds of the sale of the Units in the Initial Public Offering and the Private Placement Warrants in the Private Placement was placed
following the closing of the Initial Public Offering; | |
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Underwriting Agreement are to the Underwriting Agreement, dated May 6, 2025, which we entered
into with Clear Street, as representative of the several underwriters of the Initial Public Offering; | |
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Units are to the units sold in our Initial Public Offering, which consist of one Public Share
and one-half of one Public Warrant; | |
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Warrants are to the Private Placement Warrants and the Public Warrants, together; | |
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Grassi are to Grassi & Co., CPAs, P.C., our independent registered public accounting firm;
and | |
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Working Capital Loans are to funds that, in order to provide working capital or finance transaction
costs in connection with a Business Combination, the New Sponsor or an affiliate of the New Sponsor or certain of our directors and officers
may, but are not obligated to, loan us. | |
vi
PART
I
Item
1. Business.
Overview
We are a blank check company
incorporated on September 13, 2024 as a Cayman Islands exempted company and formed for the purpose of effecting a Business Combination
with one or more businesses or entities. To date, we have not selected any Business Combination target and our efforts have been limited
to (i) organizational activities, (ii) activities related to our Initial Public Offering, and (iii) searching for a Business Combination
target. We have also generated no operating revenues to date and we do not expect that we will generate operating revenues until we consummate
our initial Business Combination.
We may pursue an initial Business
Combination target in any business or industry or at any stage of its corporate evolution. Our Management Team has an extensive track
record of acquiring attractive assets at disciplined valuations, investing in growth while fostering financial discipline and improving
business results. Although our Management assess the risks inherent in a particular target business with which we may combine, we cannot
assure our shareholders that this assessment will result in our identifying all risks that a target business may encounter. Furthermore,
some of those risks may be outside of our control, meaning that we can do nothing to control or reduce the chances that those risks will
adversely affect a target business.
We believe that the experience
and capabilities of our Management Team makes us an attractive partner to potential target businesses, will enhance our ability to complete
a successful Business Combination, and will bring value to the business post-Business Combination. Our Management Team has broad sector
knowledge though their collective involvement across a variety of industries, as well as extensive global capital markets experience,
with local and cross-border capabilities allowing access to different sectors of the capital markets.
The 2024 SPAC Rules may materially
affect our ability to negotiate and complete our initial Business Combination and may increase the costs and time related thereto.
Initial Public Offering
On May 8, 2025, we consummated
our Initial Public Offering of 14,375,000 Units, including 1,875,000 Option Issues issued pursuant to the full exercise of the Over-Allotment
Option. Each Unit consists of one Public Share, and three-quarters of one Public Warrant, with each whole Public Warrant entitling the
holder thereof to purchase one Class A Ordinary Share for $11.50 per share. The Units were sold at a price of $10.00 per Unit, generating
gross proceeds to us of $143,750,000.
Simultaneously with
the closing of the Initial Public Offering and pursuant to the Private Placement Warrants Purchase Agreement, we completed the private
sale of an aggregate of 2,000,000 Private Placement Warrants to our Old Sponsor at a purchase price of $1.00 per Private Placement Warrant,
with each Private Placement Warrant exercisable to purchase one Class A Ordinary Share at $11.50 per share, at a price of $1.00 per Private
Placement Warrant, generating gross proceeds to us of $2,000,000.
A total of $144,109,375, comprised
of the proceeds from the Initial Public Offering and the Private Placement, was placed in the Trust Account maintained by Continental,
acting as trustee.
It is the job of our New Sponsor
and Management Team to complete our initial Business Combination. Our Management Team is led by Elliot Richmond, our Chief Executive Officer
and Chief Financial Officer. In addition, our Management Team is aided by Carter Glatt, our Advisor. We must complete our initial Business
Combination by August 8, 2026, which is 15 months from the closing of our Initial Public Offering, unless we decide to pursue an amendment
to our Amended and Restated Charter in order to extend the Combination Period. If our initial Business Combination is not consummated
by the end of our Combination Period (as extended, if it has been extended), then, unless our Board of Directors shall otherwise determine,
our existence will terminate, and we will distribute all amounts in the Trust Account, as described further herein.
1
We may seek to extend the
Combination Period, consistent with applicable laws, regulations and stock exchange rules, by amending our Amended and Restated Charter.
Such an amendment would require the approval of our Public Shareholders, who will be provided the opportunity to redeem all or a portion
of their Public Shares in connection with the vote on such approval. Such redemptions will decrease the amount held in our Trust Account
and our capitalization, and may affect our ability to maintain our listing on Nasdaq. In addition, the Nasdaq Rules currently require
SPACs (such as us) to complete our initial Business Combination in accordance with the Nasdaq 36-Month Requirement. If we do not meet
the Nasdaq 36-Month Requirement, our securities will likely be subject to a suspension of trading and delisting from Nasdaq. Our New Sponsor
may also, in its discretion, explore transactions under which it would sell its interest in our Company to another sponsor entity, which
may result in a change to our Management Team.
Prior SPAC Experience
Below are the SPAC Business
Combinations in which members of our Management Team (excluding our Advisor) have participated and consummated, along with certain other
information:
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Inflection Point Acquisition Corp. II ("IPXX", the SPAC), USA Rare Earth, Inc. ("USARE", the Target). Mr.
Richmond was a director of the SPAC. The SPAC consummated its initial public offering on May 30, 2023 for 25,000,000units, with
each unit consisting of one ordinary share and one-half of one redeemable warrant to purchase one ordinary share exercisable at $11.50
per share. The units were sold at a price of $10.00 per unit, generating gross proceeds of $250.0 million. The SPACs term was extended
one time, for a total extension of nine months. In connection with the extension, holders of 22,794,651 Class A ordinary shares of IPXX,
or 91.18% of the outstanding IPXX public shares, exercised their right to redeem those shares for cash at a price of approximately $10.83
per share, for an aggregate of $246.9 million. Prior to the extraordinary general meeting of IPXX shareholders to approve the business
combination with USARE, holders of 128,140 IPXX Class A ordinary shares, or 5.8% of the outstanding IPXX Class A ordinary shares, exercised
their right to redeem those shares for cash at a price of approximately $11.00 per share, for an aggregate of $1,409,139.27. The transaction
with USARE closed on March 13, 2025 and began trading on March 14, 2025 under the ticker USAR.. The price of the common
stock has ranged from $5.56 to $43.98 following consummation of its business combination, with a closing price of $20.45 on March 10,
2026. | |
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Ahren Acquisition Corp. (SPAC). Mr.Richmond was the Chief Financial Officer of the SPAC. The SPAC consummated
its initial public offering on December 17, 2021 for 29,999,800 units, with each unit consisting of one ordinary share and one-half of
one redeemable warrant to purchase one ordinary share exercisable at $11.50 per share. The units were sold at a price of $10.00 per unit,
generating gross proceeds of $ 299,998,000. The SPAC did not consummate a business combination and delisted its common stock, warrants,
and units from the Nasdaq Global Market on June 16, 2023. | |
However, in recent years,
the stock prices of many target businesses have underperformed post-business combination with a SPAC. We cannot assure our shareholders
that we will properly ascertain or assess all of the significant risk factors associated with a target business, such as Boost Run, or
that the price of the shares of the combined entity post-Business Combination will increase.
Our New Sponsor
On January 30, 2026, we, the
New Sponsor, the Old Sponsor, Carter Glatt, as the managing member of Old Sponsor (the Sponsor Member), certain members
of the Sponsor named as signatories thereto (the Non-Managing Members) and certain other institutional investors signatories
thereto (the Non-Managing Investors, together with the Non-Managing Members and the Sponsor Member, the Old Sponsor
Members) entered into a Purchase and Sponsor Handover Agreement (the New Sponsor Purchase Agreement) pursuant to
which New Sponsor has agreed to purchase from the Sponsor, an aggregate of (i) 4,475,000 Class B Ordinary Shares and (ii) 1,000,000 Private
Placement Warrants (the Transferred Interests), for an aggregate purchase price of $2,000,000.
2
Pursuant to the New Sponsor
Purchase Agreement, if a definitive business combination agreement is not entered into by May 7, 2026 (the Option Date),
the Sponsor Member shall have the right (but not the obligation) to repurchase the Transferred Interests from the New Sponsor for a purchase
price of $2,000,000 (the Repurchase Right). The Repurchase Right may be exercised only during the period commencing on the
Option Date and ending at 5:00 p.m., New York City time, on the date that is five (5) days after the Option Date (the Option Period),
by delivery of written notice of exercise to the New Sponsor in accordance with the terms set forth in the New Sponsor Purchase Agreement.
If the Sponsor Member does not exercise the Repurchase Right within the Option Period, the Repurchase Right shall automatically terminate
and be of no further force or effect.
Our New Sponsor is a Delaware
limited liability company, which was formed to invest in our Company. Although our New Sponsor is permitted to undertake any activities
permitted under the Delaware Limited Liability Company Act and other applicable law, our New Sponsors business is focused on investing
in our Company. The sole managing member of the sponsor is Elliot Richmond. Mr.Richmond serves as our Chief Executive Officer and
Chief Financial Officer. Mr.Richmond controls the management of our New Sponsor, including the exercise of voting and investment
discretion over the securities of our company held by our New Sponsor. Other than members of our Management Team who are members of our
New Sponsor, none of the other members of our New Sponsor will participate in our Companys activities.
Because our Old Sponsor and
our New Sponsor acquired the Founder Shares at a nominal price, our Public Shareholders incurred immediate and substantial dilution upon
the closing of the Initial Public Offering, assuming no value is ascribed to the Public Warrants. Further, the Class A Ordinary Shares
issuable in connection with the conversion of the Founder Shares may result in material dilution to our Public Shareholders due to the
anti-dilution rights of our Founder Shares that may result in an issuance of Class A Ordinary Shares on a greater than one-to-one basis
upon conversion. Additionally, our Public Shareholders may experience dilution in the event of exercise of the 2,000,000 Private Placement
Warrants purchased in the Private Placement, as well as conversion of any Working Capital Loans into equity, if elected.
The Founder Shares will automatically
convert into Class A Ordinary Shares concurrently with or immediately following the consummation of our initial Business Combination,
or at any time prior thereto at the option of the holders thereof, on a one-for-one basis, subject to adjustment, for share sub-divisions,
share capitalizations, reorganizations, recapitalizations and the like, and subject to further adjustment as provided herein. In the case
that additional Class A Ordinary Shares, or any other equity-linked securities, are issued or deemed issued in excess of the amounts sold
in the Initial Public Offering and related to or in connection with the closing of the initial Business Combination, the ratio at which
Class B Ordinary Shares convert into Class A Ordinary Shares will be adjusted (unless the holders of a majority of the outstanding Class
B Ordinary Shares agree to waive such adjustment with respect to any such issuance or deemed issuance) so that the number of Class A Ordinary
Shares issuable upon conversion of all Class B Ordinary Shares will equal, in the aggregate, approximately 28.4% of the sum of (i) the
total number of all Class A Ordinary Shares outstanding upon the completion of the Initial Public Offering (including any Class A Ordinary
Shares issued pursuant to the underwriters over-allotment option and excluding the Class A Ordinary Shares underlying the private
placement warrants issued to the Old Sponsor and the New Sponsor), plus (ii) all Class A Ordinary Shares and equity-linked securities
issued or deemed issued in connection with our 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 our Old Sponsor
and our New Sponsor or any of their respective affiliates or to our officers and directors upon conversion of working capital loans) minus
(iii) any redemptions of Class A 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.
If we raise additional funds
through equity or convertible debt issuances, our Public Shareholders may suffer significant dilution. This dilution would increase to
the extent that the anti-dilution provision 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. In addition, the cashless exercise
of the Private Placement Warrants would further increase the dilution to our Public Shareholders.
In order to facilitate our
initial Business Combination or for any other reason determined by our New Sponsor in its sole discretion, our New Sponsor may surrender
or forfeit, transfer or exchange our Founder Shares, Private Placement Warrants or any of our other securities, including for no consideration,
as well as subject any such securities to earn-outs or other restrictions, or otherwise amend the terms of any such securities or enter
into any other arrangements with respect to any such securities. 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.
3
Pursuant to the Letter Agreement,
each of the Old Sponsor Parties agreed to restrictions on its ability to transfer, assign, or sell any Units, Class A Ordinary Shares,
Class B Ordinary Shares, and Public Warrants for 180 days following the effective date of the Underwriting Agreement . The Old Sponsor
Parties and the New Sponsor Parties have also agreed to certain lock-up restrictions on their ability to transfer, assign, or sell the
Founder Shares and Class A Ordinary Shares issuable upon the conversion of the Founder Shares until the earlier of (i) one year after
the completion of a Business Combination or earlier if, subsequent to a Business Combination, the closing price of the Class A Ordinary
Shares (or shares of common equity of the combined company listed on the exchange) equals or exceeds $12.00 per share (as adjusted for
share sub-divisions, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any consecutive
30-trading day period commencing at least 150 days after the Business Combination and (ii) subsequent to a Business Combination, the date
on which the Company consummates a subsequent liquidation, merger, share exchange or other similar transaction which results in all of
the Public Shareholders having the right to exchange their Class A Ordinary Shares for cash, securities or other property. Further, the
Sponsor membership interests (including the interests held by the non-managing members) are locked up and not transferable because the
Letter Agreement prohibits indirect transfers. They have also waived their rights to 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 Combination Period.
We have provided a waiver
for the Letter Agreement for the Old Sponsor and the New Sponsor to enter into the New Sponsor Purchase Agreement. While there is no current
intention to do so, we may in the future approve another amendment or waiver of the Letter Agreement that would allow the Old Sponsor
Parties currently still holding Founder Shares and the Class A Ordinary Shares thereunder and the New Sponsor Parties to directly, or
members of the Old Sponsor Parties and the New Sponsor Parties to indirectly, transfer Founder Shares, the Class A Ordinary Shares thereunder
or membership interests in the Old Sponsor Parties and the New Sponsor Parties in a transaction in which such sponsor removes itself as
our sponsor before identifying a Business Combination. As a result, there is a risk that the Old Sponsor Parties or the New Sponsor Parties
may continue to divest their ownership or economic interests in us or in such sponsor, which would likely result in our loss of certain
key personnel, including Elliot Richmond, our current Chief Executive Officer and Chief Financial Officer. There can be no assurance that
any replacement the New Sponsor Parties or other key personnel will successfully identify a Business Combination target for us, or, even
if one is so identified, successfully complete such Business Combination
While members of the Old Sponsor
and the New Sponsor who are not our officers and directors are not a direct party to the Letter Agreement, as a result of their ownership
of membership interests in the Old Sponsor or New Sponsor, they are bound by the restrictions set forth above with respect to their allocated
Founder Shares and the Class A Ordinary Shares underlying the Founder Shares (including the restriction on transfer of their membership
interests because the Letter Agreement prohibits indirect transfers).
Business Strategy
We are focused on identifying
a business combination target that can benefit from the collective network, knowledge and depth of industry experience of our management
team. Likewise, we believe that the extensive experience that members of our management team have gained over their careers from building,
investing, and leading both private and publicly traded companies will position us favorably to identify, evaluate, and acquire an attractive
initial business combination target. We may pursue our initial business combination in any business, industry or geographic location.
Following the completion of
the Initial Public Offering, we will communicate with our management teams network, which includes private equity firms, venture
capitalists, investment bankers and entrepreneurs, to articulate the parameters for our search for a target company and a potential business
combination and begin the process of pursuing and reviewing potential opportunities.
4
Business Combination
Criteria
Consistent with our business
strategy, we have identified the following general criteria and guidelines that we believe are important in evaluating prospective target
businesses. 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 business that does not meet these criteria and guidelines.
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Total Addressable Market: Our strategy centers on identifying
investments with compelling potential for immediate and sustained market growth. Additionally, we intend to focus on businesses operating
in sectors with powerful market momentum, ensuring continuous expansion that enables sustained revenue acceleration over extended periods.
These enterprises should maintain competitive advantages through protected technologies and intellectual property; | |
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Experienced Management Team: Our approach targets organizations
led by seasoned, successful leadership teams, particularly those receptive to leveraging our teams strategic insights. We intend
to commit substantial effort to ensuring alignment between leadership teams and key stakeholders, recognizing this harmony as fundamental
to successful strategy execution; | |
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Benefit from Public Identity: Our partnership focuses on collaborating
with leadership and investors who seek public market status as a catalyst for value creation. The transformation to public status offers
expanded capital access, enhanced employee incentivization, improved acquisition capabilities, and strengthened market presence; |
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Appropriate Valuations: Our investment philosophy emphasizes
thorough, methodical valuation analysis, built on deep market understanding. We intend to pursue combinations when opportunities present
compelling upside with contained risk exposure; | |
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Opportunity for Strategic or Operational Enhancement: Our approach
leverages deep industry connections and expertise to catalyze ongoing growth. We intend to pursue partnerships with management teams demonstrating
both the willingness and capability to execute value-enhancing strategic initiatives, including accretive acquisitions; | |
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Strong Barriers to Entry with Defensible Market Position: Our
investment thesis prioritizes companies possessing unique technological advantages, protected intellectual property, or significant first-mover
benefits. Target enterprises should demonstrate sustainable pricing power through inherent competitive advantages; | |
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High Customer Retention Rates: Our ideal target candidate should
maintain an expanding, loyal customer foundation while showcasing strong potential for expanded service adoption among existing clients; |
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Strong Gross Margin Profile and Potential for High Cash Flow Conversion:
Our focus centers on businesses demonstrating streamlined operational structures and robust margin characteristics; and | |
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Low Asset Intensity: Our selection criteria favor enterprises
requiring minimal capital investment relative to their revenue generation and operational profitability. | |
These criteria are not intended
to be exhaustive. Any evaluation relating to the merits of a particular initial business combination may be based, to the extent relevant,
on these general guidelines as well as other considerations, factors, and criteria that our management team may deem relevant. In the
event that we decide to enter into our initial business combination with a target business that does not meet the above criteria and guidelines,
we will disclose that the target business does not meet the above criteria in our shareholder communications related to our initial business
combination, which, as discussed in this prospectus, would be in the form of proxy materials or tender offer documents, as applicable,
that we would file with the SEC.In evaluating a prospective target business, we expect to conduct a due diligence review which may
encompass, among other things, meetings with incumbent management and employees, document reviews, interviews of customers and suppliers,
inspections of facilities, as well as reviewing financial and other information which will be made available to us.
5
Sourcing of Potential
Business Combination Targets
We believe that our management
teams operational and transactional experience has generated a deep network of potential business combination targets. This network
has grown through our leadership teams activities in launching, acquiring, and financing businesses; their reputation for integrity
in dealings with sellers, financing sources, and management teams; and their experience in executing transactions across various economic
conditions. Attractive prospective sources for targets have been established through our leadership teams service on the boards
of private and public companies.
This extensive network has
historically provided our team with proprietary deal flow and referrals, often resulting in exclusive transaction opportunities. We expect
to receive potential business combination candidates from various sources within our network, including market participants, advisors,
private equity funds, investment banks, and large enterprises looking to divest non-core assets. Our leadership teams demonstrated
success in both investing and operating businesses across industries has created a distinctive set of capabilities that we will leverage
in our search.
We are not prohibited from
pursuing an initial Business Combination with a Business Combination target that is affiliated with our Old Sponsor or our New Sponsor
or their respective officers, directors or advisors (or their respective affiliates or related entities) or making the acquisition through
a joint venture or other form of shared ownership with our Old Sponsor or our New Sponsor or their respective officers, directors or advisors
(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 with our Old Sponsor or our New Sponsor or their respective 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 or
another independent firm that commonly renders valuation opinions for the type of company we are seeking to acquire or from an independent
accounting firm that our initial business combination is fair to our company from a financial point of view. We are not required to obtain
such an opinion in any other context.
Initial Business Combination
The Nasdaq Rules require that
we must complete one or more Business Combinations having an aggregate fair market value of at least 80% of the value of the assets held
in the Trust Account (excluding the Deferred Fee and taxes payable on the interest earned on the Trust Account, if any) (the 80%
Test). Our Board of Directors will make the determination as to the fair market value of our initial Business Combination. If our
Board of Directors is not able to independently determine the fair market value of our initial Business Combination, we will obtain an
opinion from an independent investment banking firm or another independent entity that commonly renders valuation opinions with respect
to the satisfaction of such criteria. While we consider it likely that our Board of Directors will be able to make an independent determination
of the fair market value of our initial Business Combination, it may be unable to do so if it is less familiar or experienced with the
business of a particular target or if there is a significant amount of uncertainty as to the value of the targets assets or prospects.
Additionally, pursuant to the Nasdaq Rules, any 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 Business Combination may collectively own a minority interest in the post-transaction company, depending on valuations ascribed
to the target and us in the Business Combination. For example, we could pursue a transaction in which we issue a substantial number of
new shares in exchange for all of the outstanding capital stock, shares or other equity interests of a target. In this case, we would
acquire a 100% controlling interest in the target. However, as a result of the issuance of a substantial number of new shares, our shareholders
immediately prior to our initial Business Combination could own less than a majority of our issued and outstanding shares subsequent to
our initial Business Combination. If less than 100% of the equity interests or assets of a target business or businesses are owned or
acquired by the post transaction company, the portion of such business or businesses that is owned or acquired is what will be taken into
account for purposes of the 80% Test described above. If the Business Combination involves more than one target business, the 80% Test
will be based on the aggregate value of all of the target businesses.
6
Members of our Management
Team and our independent directors directly or indirectly own Founder Shares and/or Private Placement Warrants after the Initial Public
Offering 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 the New Sponsor Parties (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 Combination Period, 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 the New
Sponsor Parties to complete a transaction even if we select an acquisition target that subsequently declines in value and is unprofitable
for Public Shareholders. Further, each of our officers and directors may have a conflict of interest with respect to evaluating a particular
Business Combination if the retention or resignation of any such officers and directors was included by a target business as a condition
to any agreement with respect to our initial Business Combination.
Each of our officers and directors
presently has, and any of them in the future may have additional, fiduciary, 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 that is suitable for an
entity to which he or she has then current fiduciary or contractual obligations, he or she will honor his or her fiduciary or contractual
obligations to present such Business Combination opportunity to such other entity, subject to their fiduciary duties under Cayman Islands
law. Our Amended and Restated Charter provides 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. As a result, the fiduciary duties or contractual obligations of our officers or directors
could materially affect our ability to complete our initial Business Combination.
In addition, each of the New
Sponsor Parties may sponsor or form other SPACs 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, each of the New Sponsor Parties could have conflicts of interest
in determining whether to present Business Combination opportunities to us or to any other SPACs 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 any such potential conflicts would materially affect our ability to complete our initial Business
Combination.
Status as a Public Company
We believe our structure makes
us an attractive Business Combination partner to target businesses. As an existing public company, we offer a target business an alternative
to the traditional initial public offering through a merger or other Business Combination with us. In a Business Combination transaction
with us, the owners of the target business may, for example, exchange their shares of stock or shares in the target business for our Class
A Ordinary Shares (or shares of a new holding company) or for a combination of our Class A Ordinary Shares and cash, allowing us to tailor
the consideration to the specific needs of the sellers. We believe target businesses will find this method a more expeditious and cost
effective method to becoming a public company than the typical initial public offering. The typical initial public offering process takes
a significantly longer period of time than the typical Business Combination transaction process, and there are significant expenses and
market and other uncertainties in the initial public offering process, including underwriting discounts and commissions, marketing and
road show efforts that may not be present to the same extent in connection with a Business Combination with us.
7
Furthermore, once a proposed
initial Business Combination is completed, the target business will have effectively become public, whereas an initial public offering
is always subject to the underwriters ability to complete the offering, as well as general market conditions, which could delay
or prevent the offering from occurring or could have negative valuation consequences. Following an initial Business Combination, we believe
the target business would then have greater access to capital, an additional means of providing management incentives consistent with
shareholders interests and the ability to use its shares as currency for acquisitions. Being a public company can offer further
benefits by augmenting a companys profile among potential new customers and vendors and aid in attracting talented employees.
While we believe that our
structure and our Management Teams backgrounds make us an attractive business partner, some potential target businesses may view
our status as a blank check company, such as our lack of an operating history and our ability to seek shareholder approval of any proposed
initial Business Combination, negatively.
Financial Position
With funds available for a
Business Combination, as of December 31, 2025, in the amount of approximately $147,910,775 (not including amounts held outside of the
Trust Account for working capital), before payment of $5,750,000 of the Deferred Fees and taxes payable, if any, we offer a target business
a variety of options, such as creating a liquidity event for its owners, providing capital for the potential growth and expansion of its
operations or strengthening its balance sheet by reducing its debt ratio. Because we are able to complete our initial Business Combination
using our cash, debt or equity securities, or a combination of the foregoing, we have the flexibility to use the most efficient combination
that we believe will allow us to tailor the consideration to be paid to the target business to fit its needs and desires. However, we
have not taken any steps to secure third party financing and there can be no assurance it will be available to us.
If our initial Business Combination
is paid for using equity or debt securities, or not all of the funds released from the Trust Account are used for payment of the consideration
in connection with our initial Business Combination or used for redemptions of our Public Shares, we may use the balance of the cash released
to us from the Trust Account following the closing for general corporate purposes, including for maintenance or expansion of operations
of the post-transaction company, the payment of principal or interest due on indebtedness incurred in completing our initial Business
Combination, to fund the purchase of other companies, or for working capital.
Potential Additional Financings
We are not presently engaged
in, and we will not engage in, any operations for an indefinite period of time following the Initial Public Offering. We intend to effectuate
our initial Business Combination using cash from the proceeds of the Initial Public Offering and the Private Placement, the proceeds of
the sale of our Ordinary Shares in connection with our initial Business Combination (including pursuant to any forward purchase agreements
or backstop agreements into which we may enter), 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 seek to raise additional
funds through a private offering of debt or equity securities in connection with the completion of our initial Business Combination and
we may effectuate our initial Business Combination using the proceeds of such offering rather than using the amounts held in the Trust
Account. In addition, we intend to target businesses with enterprise values that are greater than we could acquire with the net proceeds
of the Initial Public Offering and the Private Placement, and, 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 redemptions by Public Shareholders, we may be required to seek
additional financing to complete such proposed initial Business Combination. Subject to compliance with applicable securities laws, we
would expect to complete such financing only simultaneously with the completion of our initial Business Combination. In the case of an
initial Business Combination funded with assets other than the Trust Account assets, our proxy materials or tender offer documents disclosing
the initial Business Combination would disclose the terms of the financing and, only if required by law, we would seek shareholder approval
of such financing. There is no limitation on our ability to raise funds through the issuance of equity or equity-linked securities or
through loans, advances or other indebtedness in connection with our initial Business Combination, including pursuant to any forward purchase
agreements or backstop agreements into which we may enter. None of the New Sponsor Parties or its members or shareholders is required
to provide any financing to us in connection with or after our initial Business Combination.
8
Sources of Target Businesses
We anticipate that target
business candidates will be brought to our attention from various unaffiliated sources, including investment bankers and private investment
funds. Target businesses may also be brought to our attention by such unaffiliated sources, as a result of being solicited by us through
calls or mailings. These sources may also introduce us to target businesses in which they think we may be interested on an unsolicited
basis, since many of these sources will have read this Report or the prospectus of our Initial Public Offering and know what types of
businesses we are targeting. Our officers and directors, as well as their affiliates, may also bring to our attention target business
candidates of which they become aware through their business contacts as a result of formal or informal inquiries or discussions they
may have, as well as attending trade shows or conventions. In addition, we expect to receive a number of proprietary deal flow opportunities
that would not otherwise necessarily be available to us as a result of the track record and business relationships of our officers and
directors. While we do not presently anticipate engaging the services of professional firms or other individuals that specialize in business
acquisitions on any formal basis, we may engage these firms or other individuals in the future, in which event we may pay a finders
fee, consulting fee or other compensation to be determined in an arms length negotiation based on the terms of the transaction.
Prior to or in connection
with the completion of our initial Business Combination, there may be payment by us to each of the New Sponsor Parties, or our or their
respective affiliates, of a finders fee, advisory fee, consulting fee or success fee for any services they render in order to effectuate
the completion of our initial Business Combination, which, if made prior to the completion of our initial Business Combination, will be
paid from funds held outside the Trust Account.
We will engage a finder only
to the extent our Management determines that the use of a finder may bring opportunities to us that may not otherwise be available to
us or if finders approach us on an unsolicited basis with a potential transaction that our Management determines is in our best interest
to pursue. Payment of a finders fee is customarily tied to completion of a transaction, in which case any such fee will be paid
out of the funds held in the Trust Account.
We are not prohibited from
pursuing an initial Business Combination with a company that is affiliated with any of the New Sponsor Parties, or our Advisor, or completing
the Business Combination through a joint venture or other form of shared ownership with any of the New Sponsor Parties or our Advisor.
In the event we seek to complete our initial Business Combination with a company that is affiliated (as defined in our Amended and Restated
Charter) with any of the New Sponsor Parties or our Advisor, we, or a committee of independent directors, will obtain an opinion from
an independent investment banking firm or another independent entity that commonly renders valuation opinions, 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.
We believe our Management
Teams significant operating and transaction experience and relationships will provide us with a substantial number of potential
initial Business Combination targets. Over the course of their careers, the members of our Management Team or our Advisor have developed
a broad network of contacts and corporate relationships around the world. This network has grown through the activities of our Management
Team and advisor sourcing, acquiring and financing businesses, the reputation of our Management Team for integrity and fair dealing with
sellers, financing sources and target management teams and the experience of our Management Team in executing transactions under varying
economic and financial market conditions.
This network has provided
our Management Team with a flow of referrals that has resulted in numerous transactions that were proprietary or where a limited group
of investors were invited to participate in the sale process. We believe that the network of contacts and relationships of our Management
Team will provide us important sources of investment opportunities.
We have not contacted any
of the prospective target businesses that our Management Team in their prior SPACs had considered and rejected as target businesses to
acquire. However, we may contact such targets if we believe that such targets are currently interested in a potential initial Business
Combination with us and if such transaction would be attractive to our shareholders.
9
Lack of Business Diversification
For an indefinite period of
time after the completion of our initial Business Combination, the prospects for our success may depend entirely on the future performance
of a single business. Unlike other entities that have the resources to complete Business Combinations with multiple entities in one or
several industries, it is probable that we will not have the resources to diversify our operations and mitigate the risks of being in
a single line of business. By completing our initial Business Combination with only a single entity, our lack of diversification may:
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subject us to negative economic, competitive and regulatory developments, any or all of which may have a substantial
adverse impact on the particular industry in which we operate after our initial Business Combination, and | |
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cause us to depend on the marketing and sale of a single product or limited number of products or services. | |
Limited Ability
to Evaluate the Targets Management Team
Although we closely scrutinize
the management of a prospective target business when evaluating the desirability of effecting our initial Business Combination with that
business, our assessment of the target businesss management may not prove to be correct. In addition, the future management may
not have the necessary skills, qualifications or abilities to manage a public company. Furthermore, the future role of members of our
Management Team, if any, in the target business cannot presently be stated with any certainty. The determination as to whether any of
the members of our Management Team will remain with the combined company will be made at the time of our initial Business Combination.
While it is possible that one or more of our directors will remain associated in some capacity with us following our initial Business
Combination, it is unlikely that any of them will devote their full efforts to our affairs subsequent to our initial Business Combination.
Moreover, we cannot assure our shareholders that members of our Management Team will have significant experience or knowledge relating
to the operations of the particular target business.
We cannot assure our shareholders
that any of our key personnel will remain in senior management or advisory positions with the combined company. The determination as to
whether any of our key personnel will remain with the combined company will be made in connection with our initial Business Combination.
Following a Business Combination,
we may seek to recruit additional managers to supplement the incumbent management of the target business. We cannot assure our shareholders
that we will have the ability to recruit additional managers, or that additional managers will have the requisite skills, knowledge or
experience necessary to enhance the incumbent management.
Shareholders May Not Have the Ability
to Approve Our Initial Business Combination
We may conduct redemptions
without a shareholder vote pursuant to the tender offer rules of the SEC subject to the provisions of our Amended and Restated Charter.
However, we will seek shareholder approval if it is required by law or applicable stock exchange rule, or we may decide to seek shareholder
approval for business or other reasons.
Under the Nasdaq Rules, shareholder
approval would be required for our initial Business Combination if, for example:
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We issue Ordinary Shares that will be equal to or in excess of 20% of the number of our Ordinary Shares then
outstanding (other than in a public offering); | |
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Any of our directors, officers or substantial shareholders (as defined by the Nasdaq Rules) has a 5% or greater
interest (or such persons collectively have a 10% or greater interest), directly or indirectly, in the target business or assets to be
acquired or otherwise and the present or potential issuance of Ordinary Shares could result in an increase in outstanding Ordinary Shares
or voting power of 5% or more; or | |
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The issuance or potential issuance of Ordinary Shares will result in our undergoing a change of control. | |
10
The decision as to whether
we will seek shareholder approval of a proposed Business Combination in those instances in which shareholder approval is not required
by applicable law or stock exchange listing requirements will be made by us, solely in our discretion, and will be based on business and
legal reasons, which include a variety of factors, including, but not limited to: (i) the timing of the transaction, including in the
event we determine shareholder approval would require additional time and there is either not enough time to seek shareholder approval
or doing so would place us at a disadvantage in the transaction or result in other additional burdens on the company; (ii) the expected
cost of holding a shareholder vote; (iii) the risk that the shareholders would fail to approve the proposed Business Combination; (iv)
other time and budget constraints of the Company; and (v) additional legal complexities of a proposed Business Combination that would
be time-consuming and burdensome to present to shareholders.
Permitted Purchases 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, each of the New Sponsor Parties or our Advisor and any of 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
Public Shareholder, although still the record holder of our Public Shares, is no longer the beneficial owner thereof and therefore agrees
not to exercise its redemption rights. In the event that any of the New Sponsor Parties or our Advisor or any of their respective affiliates
purchase Public 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 Public shares. It is intended that,
if Rule 10b-18 would apply to purchases by any of the New Sponsor Parties or our Advisor or any of their respective 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.
Additionally, at any time
at or prior to our initial Business Combination, subject to applicable securities laws (including with respect to material nonpublic information),
any of the New Sponsor Parties or our Advisor and any of their respective 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
or Public Warrants in such transactions.
The purpose of any such transactions
could be to (1) increase the likelihood of obtaining shareholder approval of the Business Combination, (2) 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 (3) 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 in circumstances
that may not otherwise have been possible. To the extent such securities are purchased, such public securities will be not be voted as
required by Tender Offers and Schedules Compliance and Disclosure Interpretations Question 166.01 promulgated by the SEC.
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.
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Each of the New Sponsor Parties
or our Advisor and any of their respective affiliates anticipate that they may identify the Public Shareholders with whom any of the New
Sponsor Parties or our Advisor or any of their respective affiliates may pursue privately negotiated transactions by either the Public
Shareholders contacting us directly or by our receipt of redemption requests submitted by Public Shareholders (in the case of Public Shares)
following our mailing of proxy materials in connection with our initial Business Combination. To the extent that any of the New Sponsor
Parties or our Advisor or any of their respective affiliates enter into a private transaction, they would identify and contact only potential
selling or redeeming Public Shareholders who have expressed their election to redeem their Public Shares for a pro rata share of the Trust
Account or vote against our initial Business Combination, whether or not such Public Shareholder has already submitted a proxy with respect
to our initial Business Combination, but only if such Public Shares have not already been voted at the general meeting related to our
initial Business Combination. Each of the New Sponsor Parties or our Advisor and any of their respective affiliates, if any, will select
from which Public Shareholders to purchase Public Shares based on the negotiated price and number of Public Shares and any other factors
that they may deem relevant, and are restricted from purchasing Public Shares if such purchases do not comply with Regulation M under
the Exchange Act and the other federal securities laws.
Each of the New Sponsor Parties
or our Advisor and any of their respective affiliates are restricted from making purchases of Public 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 any of the New Sponsor Parties
or any of their respective affiliates were to purchase Public Shares or Public 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 any of the New Sponsor Parties or our Advisor or any of their respective affiliates may purchase shares, rights or warrants
from Public Shareholders outside the redemption process, along with the purpose of such purchases; | |
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if any of the New Sponsor Parties or our Advisor or any of their respective affiliates were to purchase Public
Shares or Public 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 any of the New Sponsor Parties or our Advisor or any of their respective affiliates
would not be voted in favor of approving the Business Combination transaction; | |
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any of the New Sponsor Parties or our Advisor or any of their respective 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 Current Report on Form 8-K, before our general meeting of shareholders to approve the
Business Combination transaction, the following material items: | |
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the amount of our securities purchased outside of the redemption offer by any of the New Sponsor Parties or
our Advisor or any of their respective affiliates, along with the purchase price; | |
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the purpose of the purchases by any of the New Sponsor Parties or our Advisor or any of their respective affiliates; |
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the impact, if any, of the purchases by any of the New Sponsor Parties or any of their respective 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 any of the New Sponsor Parties or our Advisor or any of
their respective affiliates (if not purchased on the open market) or the nature of our security holders (e.g., 5% security holders) who
sold to any of the New Sponsor Parties or our Advisor or any of their respective 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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12
Redemption Rights for Public Shareholders
upon Completion of Our Initial Business Combination
We will provide our Public
Shareholders with the opportunity to redeem all or a portion of their Public Shares upon the completion of our initial Business Combination
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 an initial Business Combination, including interest earned on the funds held in the Trust Account (less
taxes payable, if any), divided by the number of then outstanding Public Shares, subject to the limitations and on the conditions described
herein. As of December 31, 2025, the amount in the Trust Account was $147,910,775, or approximately $10.29 per Public Share (before taxes
payable, if any). The per share amount we will distribute to investors who properly redeem their Public Shares will not be reduced by
the Deferred Fee we will pay to the underwriters of the Initial Public Offering.
The Old Sponsor Parties and
the New Sponsor Parties have entered into the Letter Agreement with us, pursuant to which they have agreed to waive their redemption rights
with respect to any Founder Shares and Public Shares they may hold in connection with the completion of our initial Business Combination.
Manner of Conducting Redemptions
We will provide our Public
Shareholders with the opportunity to redeem all or a portion of their Public Shares upon the completion of our initial Business Combination
either (i) in connection with a general meeting called to approve the Business Combination or (ii) without a shareholder vote by means
of a tender offer. 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 (other than with a 90% subsidiary of ours) and any transactions where we issue more than 20% of our issued and outstanding Ordinary
Shares or seek to amend our Amended and Restated Charter 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 the Nasdaq 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 Charter 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 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, so long as we offer redemption in connection with such amendment.
If we provide our Public Shareholders
with the opportunity to redeem their Public Shares in connection with a general meeting, we will, pursuant to our Amended and Restated
Charter:
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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.
13
If we seek shareholder approval,
we will complete our initial Business Combination only if we receive an Ordinary Resolution. A quorum for such meeting will be present
if the holders of at least one third of issued and outstanding Ordinary Shares entitled to vote at the meeting are represented in person
or by proxy. The Old Sponsor Parties and the New Sponsor Parties will count toward this quorum and, pursuant to the Letter Agreement,
they have agreed to vote their Founder Shares, shares underlying the Private Placement Warrants and any Public Shares purchased during
or after the Initial Public Offering (including in open market and privately-negotiated transactions, aside from shares they may purchase
in compliance with the requirements of Rule 14e-5 under the Exchange Act, which would not be voted in favor of approving the Business
Combination transaction) 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. As a result, in addition to the Founder
Shares, we would need 3,703,126, or approximately 29.6%, of the 12,500,000 Public Shares sold in the Initial Public Offering to be voted
in favor of an initial Business Combination in order to have our initial Business Combination approved, and if we would require a Special
Resolution at the meeting, we would need 6,635,418 Public Shares, or 53.08% of the 12,500,000 Public Shares sold in the Initial Public
Offering, to be voted in favor of an initial Business Combination in order to have our initial Business Combination approved, assuming
all outstanding Ordinary Shares are voted, and the parties to the Letter Agreement do not acquire any Class A Ordinary Shares. If our
initial Business Combination is structured as a statutory merger or consolidation with another company under Cayman Islands law, the approval
of our initial Business Combination will require a Special Resolution.
In addition, only holders
of our Class B Ordinary Shares (i) have the right to appoint and remove directors prior to or in connection with the completion of our
initial Business Combination and (ii) are 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). These quorum and voting thresholds,
and the voting agreement of the Old Sponsor Parties and the New Sponsor Parties, may make it more likely that we will consummate our initial
Business Combination. Each Public Shareholder may elect to redeem their Public Shares irrespective of whether they vote for or vote against
the proposed transaction, or 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 Public Shares than we have offered to purchase, we will withdraw the tender
offer and not complete the initial Business Combination.
Upon the public announcement
of our initial Business Combination, if we elect to conduct redemption pursuant to the tender offer rules, we or the New Sponsor will
terminate any plan established in accordance with Rule 10b5-1 to purchase our Public Shares in the open market, in order to comply with
Rule 14e-5 under the Exchange Act.
14
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 DWAC 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 Public Shares is included. The proxy materials or tender offer
documents, as applicable, that we will furnish to our Public Shareholders 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 Public Shares.
Our proposed initial Business
Combination may impose a minimum cash requirement for (i) cash consideration to be paid to the target or its owners, (ii) cash for working
capital or other general corporate purposes or (iii) the retention of cash to satisfy other conditions. In the event the aggregate cash
consideration we would be required to pay for all Class A Ordinary Shares that are validly submitted for redemption plus any amount required
to satisfy cash conditions pursuant to the terms of the proposed initial Business Combination exceed the aggregate amount of cash available
to us, we will not complete the initial Business Combination or redeem any Public 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 or equity-linked securities or through
loans, advances or other indebtedness in connection with our initial Business Combination.
Limitation on Redemption Upon Completion
of Our Initial Business Combination If We Seek Shareholder Approval
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 Charter 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 seeking redemption rights with respect to more than an aggregate of 15% of the shares sold in our Initial
Public Offering (the Excess Shares) without our prior consent. 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 Public 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 sold in the Initial Public Offering could threaten to exercise its redemption rights if such Public Shareholders
Public Shares are not purchased by us or the Old Sponsor Parties at a premium to the then-current market price or on other undesirable
terms. By limiting our Public Shareholders ability to redeem no more than 15% of the Public Shares sold in the Initial Public Offering
without our prior consent, we believe we are limiting 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 are not restricting
our shareholders ability to vote all of their Public Shares (including Excess Shares) for or against our initial Business Combination.
15
Delivering Share Certificates in Connection
with the Exercise of Redemption Rights
As described above, we intend
to require our Public Shareholders seeking to exercise their redemption rights, whether they are record holders or hold their Public 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 DWAC 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 Public 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. Accordingly,
a Public Shareholder would have up to two business days prior to the scheduled vote on the initial Business Combination if we distribute
proxy materials, or from the time we send out our tender offer materials until the close of the tender offer period, as applicable, to
submit or tender its Public Shares if it wishes to seek to exercise its redemption rights. In the event that a shareholder fails to comply
with these or any other procedures disclosed in the proxy or tender offer materials, as applicable, its Public Shares may not be redeemed.
Given the relatively short exercise period, it is advisable for Public Shareholders to use electronic delivery of their Public Shares.
There is a nominal cost associated
with the above-referenced process and the act of certificating the Public Shares or delivering them through the DWAC system. The transfer
agent will typically charge the broker submitting or tendering shares a fee of approximately $100 and it would be up to the broker whether
or not to pass this cost on to the redeeming holder. However, this fee would be incurred regardless of whether or not we require Public
Shareholders seeking to exercise redemption rights to submit or tender their Public Shares. The need to deliver shares is a requirement
of exercising redemption rights regardless of the timing of when such delivery must be effectuated.
Any request to redeem such
Public Shares, once made, may be withdrawn at any time up to the date set forth in the proxy materials or tender offer documents, as applicable.
Furthermore, if a Public Shareholder delivered its certificate in connection with an election of redemption rights and subsequently decides
prior to the applicable date not to elect to exercise such rights, such Public Shareholder may simply request that the transfer agent
return the certificate (physically or electronically). It is anticipated that the funds to be distributed to holders of our Public Shares
electing to redeem their Public Shares will be distributed promptly after the completion of our initial Business Combination.
If our initial Business Combination
is not approved or completed for any reason, then our Public Shareholders who elected to exercise their redemption rights would not be
entitled to redeem their Public Shares for the applicable pro rata share of the Trust Account. In such case, we will promptly return any
certificates delivered by Public Shareholders who elected to redeem their Public Shares.
If our initial proposed Business
Combination is not completed, we may continue to try to complete a Business Combination with a different target until the end of the Combination
Period, as it may be extended.
Redemption of Public Shares and Liquidation
if No Initial Business Combination
Our Amended and Restated Charter
provides that we will have only the duration of the Combination Period, as it may be extended, to complete our initial Business Combination.
If we have not completed our initial Business Combination within such time period, we will (i) cease all operations except for the purpose
of winding up, (ii) as promptly as reasonably possible, but not more than 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 and less up to $100,000
of interest to pay dissolution expenses), divided by the number of then-outstanding Public Shares, which redemption will completely extinguish
Public Shareholders rights as shareholders (including the right to receive further liquidating distributions, if any), subject
to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders
and our Board of Directors, liquidate and dissolve, subject in each case to our obligations under Cayman Islands law to provide for claims
of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect
to our Warrants, which will expire worthless if we fail to complete our initial Business Combination within the Combination Period, as
it may be extended.
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The Old Sponsor Parties and
the New Sponsor Parties 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 Combination Period, although they will be entitled to liquidating distributions from assets outside the Trust Account. However, if
any of the Old Sponsor Parties or the New Sponsor Parties acquire Public Shares after the Initial Public Offering, each of them will be
entitled to liquidating distributions from the Trust Account with respect to such Public Shares if we fail to complete our initial Business
Combination within the allotted Combination Period.
Each of the New Sponsor Parties
have agreed, pursuant to the Letter Agreement, that they will not propose any amendment to our Amended and Restated Charter (x) 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 Combination Period or (y) 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 (less taxes payable, if any), divided by the number of then outstanding Public Shares.
We expect that all costs and
expenses associated with implementing our plan of dissolution, as well as payments to any creditors, will be funded from amounts remaining
out of the approximately $365,751 of proceeds held outside the Trust Account, as of December 31, 2025, although we cannot assure our shareholders
that there will be sufficient funds for such purpose. However, if those funds are not sufficient to cover the costs and expenses associated
with implementing our plan of dissolution, to the extent that there is any interest accrued in the Trust Account not required to pay income
taxes on interest income earned on the Trust Account balance, we may request the trustee to release to us an additional amount of up to
$100,000 of such accrued interest to pay those costs and expenses.
If we were to expend all of
the net proceeds of the 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 the Redemption Price. 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
our shareholders that the actual per-share redemption amount received by shareholders will not be substantially less than the Redemption
Price. While we intend to pay such amounts, if any, we cannot assure our shareholders that we will have funds sufficient to pay or provide
for all creditors claims.
Although we 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. Grassi, our independent registered public accounting firm, and the underwriters
of the Initial Public Offering did 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.
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In order to protect the amounts
held in the Trust Account, the New 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 our 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) $10.025 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 $10.025 per share due to reductions
in the value of the Trust Account assets, less taxes payable, if any, provided that such liability will not apply to any claims by a third
party or prospective target business who executed a waiver of any and all rights to the monies held in the Trust Account (whether or not
such waiver is enforceable) nor will it apply to any claims under our indemnity of the underwriters of the Initial Public Offering against
certain liabilities, including liabilities under the Securities Act. However, we have not asked the New Sponsor to reserve for such indemnification
obligations, nor have we independently verified whether the New Sponsor has sufficient funds to satisfy its indemnity obligations and
we believe that only assets held by the New Sponsor are securities of our Company. Therefore, we cannot assure our shareholders that the
New 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 $10.025 per Public Share. In such
an event, we may not be able to complete our initial Business Combination, and our Public Shareholders would receive such lesser amount
per share in connection with any redemption of their 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.
In the event that the proceeds
in the Trust Account are reduced below the lesser of (i) $10.025 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 $10.025 per share due to reductions in the value
of the Trust Account assets, in each case less taxes payable, if any, and the New 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 the New Sponsor, as applicable, to enforce its indemnification obligations. While we currently expect that
our independent directors would take legal action on our behalf against the New Sponsor, as applicable, 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 our
shareholders that due to claims of creditors the actual value of the per-share redemption price will not be less than $10.025 per share.
We seek to reduce the possibility
that the New 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. The New Sponsor will also not be liable as to any claims under our indemnity
of the underwriters of the Initial Public Offering against certain liabilities, including liabilities under the Securities Act. As of
December 31, 2025, we had access to up to approximately $365,751 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. 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 the Trust Account could be liable for claims
made by creditors. In the event that our offering expenses exceed our estimate of $500,000, we may fund such excess with funds from the
funds not to be held in the Trust Account. In such case, the amount of funds we intend to be held outside the Trust Account would decrease
by a corresponding amount. Conversely, in the event that the offering expenses are less than our estimate of $500,000, the amount of funds
we intend to be held outside the Trust Account would increase by a corresponding amount.
If we file a bankruptcy or
insolvency petition or an involuntary bankruptcy or insolvency petition is filed against us that is not dismissed, the proceeds held in
the Trust Account could be subject to applicable bankruptcy or insolvency law, and may be included in our bankruptcy estate and subject
to the claims of third parties with priority over the claims of our shareholders. To the extent any bankruptcy claims deplete the Trust
Account, we cannot assure our shareholders we will be able to return $10.025 per share to our Public Shareholders. Additionally, if we
file a bankruptcy or insolvency petition or an involuntary bankruptcy or insolvency 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
bankruptcy or other 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 our shareholders that claims will not be brought against us for these reasons.
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Our Public Shareholders are
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 Combination Period, (ii) in connection with a shareholder vote to amend our Amended and Restated
Charter (x) 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 Combination Period or (y) with
respect to any other material provisions relating to shareholders rights or pre-initial Business Combination activity or (iii)
if they redeem their respective shares for cash upon the completion of our initial Business Combination, subject to applicable law and
any limitations (including but not limited to cash requirements) created by the terms of the proposed Business Combination. In no other
circumstances will a Public Shareholder have any right or interest of any kind to or in the Trust Account. In the event we seek shareholder
approval in connection with our initial Business Combination, a Public Shareholders voting in connection with the Business Combination
alone will not result in a Public Shareholders redeeming its Public Shares to us for an applicable pro rata share of the Trust
Account. Such Public Shareholder must have also exercised its redemption rights described above. These provisions of our Amended and Restated
Charter, like all provisions of our Amended and Restated Charter, may be amended with a shareholder vote.
Competition
In identifying, evaluating
and selecting a target business for our initial Business Combination, we encounter competition from other entities having a business objective
similar to ours, including other SPACs, private equity groups and leveraged buyout funds, public companies and operating businesses seeking
strategic acquisitions. Many of these entities are well established and have extensive experience identifying and effecting Business Combinations
directly or through affiliates. Moreover, many of these competitors possess greater financial, technical, human and other resources than
us. Our ability to acquire larger target businesses is 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 or are forced to 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.
Employees
We currently have one officers:
Mr. Richmond. He is not obligated to devote any specific number of hours to our matters, but may devote as much of his time as he deems
necessary to our affairs until we have completed our initial Business Combination. The amount of time he will devote in any time period
will vary based on the stage of the Business Combination process we are in. We do not intend to have any full-time employees prior to
the completion of our initial Business Combination.
Periodic Reporting and Financial Information
We have registered our Units,
Public Shares and Public Warrants under the Exchange Act and have reporting obligations, including the requirement that we file annual,
quarterly and current reports with the SEC. In accordance with the requirements of the Exchange Act, our annual reports, including this
Report, contain financial statements audited and reported on by Grassi, our independent registered public accountant.
We will provide shareholders
with audited financial statements of the prospective target business as part of the proxy solicitation materials or tender offer documents
sent to shareholders to assist them in assessing the target business. In all likelihood, these financial statements will need to be prepared
in accordance with, or reconciled to, GAAP, or IFRS, depending on the circumstances, and the historical financial statements may be required
to be audited in accordance with the standards of the PCAOB. These financial statement requirements may limit the pool of potential target
businesses we may conduct an initial Business Combination with because some targets may be unable to provide such statements in time for
us to disclose such statements in accordance with federal proxy rules and complete our initial Business Combination within the prescribed
time frame. We cannot assure our shareholders that any particular target business identified by us as a potential Business Combination
candidate will have financial statements prepared in accordance with the requirements outlined above, or that the potential target business
will be able to prepare its financial statements in accordance with the requirements outlined above. To the extent that these requirements
cannot be met, we may not be able to acquire the proposed target business. While this may limit the pool of potential Business Combination
candidates, we do not believe that this limitation will be material.
19
We will be required to evaluate
our internal control procedures for the fiscal year ending December 31, 2025 as required by the Sarbanes-Oxley Act. Only in the event
we are deemed to be a large accelerated filer or an accelerated filer, and no longer qualify as an emerging growth company, will we be
required to have our internal control procedures audited. A target business may not be in compliance with the provisions of the Sarbanes-Oxley
Act regarding adequacy of their internal controls. The development of the internal controls of any such entity to achieve compliance with
the Sarbanes-Oxley Act may increase the time and costs necessary to complete any such Business Combination.
We have filed a Registration
Statement on Form 8-A with the SEC to voluntarily register our securities under Section 12 of the Exchange Act. As a result, we are subject
to the rules and regulations promulgated under the Exchange Act. We have no current intention of filing a Form 15 to suspend our reporting
or other obligations under the Exchange Act prior or subsequent to the consummation of our initial Business Combination.
We are a Cayman Islands exempted
company. Exempted companies are Cayman Islands companies conducting business mainly outside the Cayman Islands and, as such, are exempted
from complying with certain provisions of the Companies Act. As an exempted company, we have applied for and received a tax exemption
undertaking from the Cayman Islands government that, in accordance with Section 6 of the Tax Concessions Act (Revised) of the Cayman Islands,
for a period of 30 years from the date of the undertaking (being January 6, 2025), no law that is enacted in the Cayman Islands imposing
any tax to be levied on profits, income, gains or appreciations will apply to us or our operations and, in addition, that no tax to be
levied on profits, income, gains or appreciations or which is in the nature of estate duty or inheritance tax will be payable (i) on or
in respect of our shares, debentures or other obligations or (ii) by way of the withholding in whole or in part of a payment of dividends
or other distribution of income or capital by us to our shareholders or a payment of principal or interest or other sums due under a debenture
or other obligation of us.
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 May 8, 2029, the fifth anniversary of the completion
of the Initial Public Offering, (b) in which we have total annual gross revenue of at least $1.235 billion, or (c) in which we are deemed
to be a large accelerated filer, which means the market value of our Class A Ordinary Shares that are held by non-affiliates exceeds $700
million as of the prior June 30th, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt securities
during the prior three-year period.
Additionally, we are a smaller
reporting company as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced
disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller
reporting company until the last day of the fiscal year in which (1) the market value of our Class A Ordinary Shares held by non-affiliates
equals or exceeds $250 million as of the end of that years second fiscal quarter, or (2) our annual revenues equaled or exceeded
$100 million during such completed fiscal year and the market value of our Class A Ordinary Shares held by non-affiliates exceeds $700
million as of the end of that years second fiscal quarter.
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 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. 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, our shareholders will not have the same protections afforded to shareholders of companies that are
subject to all of the Nasdaq corporate governance requirements.
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Item
1A. Risk Factors.
As a smaller reporting company
under Rule 12b-2 of the Exchange Act, we are not required to include risk factors in this Report. However, the following is a partial
list of material risks, uncertainties and other factors that could have a material effect on us and our operations:
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we are a blank check company and an early-stage company with no revenue or basis to evaluate our ability to
select a suitable business target; | |
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we may not be able to select an appropriate target business or businesses and complete our initial Business
Combination within the Combination Period; | |
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our expectations around the performance of a prospective target business or businesses may not be realized; | |
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we may not be successful in retaining or recruiting required officers, key employees or directors following
our initial Business Combination; | |
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our officers and directors may have difficulty allocating their time between our Company and other businesses
and may potentially have conflicts of interest with our business or in approving our initial Business Combination; | |
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we may not be able to obtain additional financing to complete our initial Business Combination or reduce the
number of Public Shareholders requesting redemption; | |
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we may issue our Ordinary Shares to investors in connection with our initial Business Combination at a price
that is less than the prevailing market price of our Ordinary Shares at that time; | |
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our shareholders may not be given the opportunity to choose the initial Business Combination target or to
vote on the initial Business Combination; | |
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Trust Account funds may not be protected against third-party claims or bankruptcy; | |
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an active market for our public securities may not continue and our shareholders may have limited liquidity
and trading; | |
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our financial performance following a Business Combination with an entity may be negatively affected by their
lack of an established record of revenue, cash flows and experienced management; | |
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there may be more competition to find an attractive target for an initial Business Combination, which could
increase the costs associated with completing our initial Business Combination and may result in our inability to find a suitable target; | |
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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; | |
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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; | |
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we may engage one or more of the underwriters of the Initial Public Offering or one of their respective affiliates
to provide additional services to us after the Initial Public Offering, which may include acting as a financial advisor in connection
with an initial Business Combination or as placement agent in connection with a related financing transaction. The underwriters of the
Initial Public Offering are entitled to receive the Deferred Fee that will be released from the Trust Account only upon completion of
an initial Business Combination. These financial incentives may cause them to have potential conflicts of interest in rendering any such
additional services to us after the Initial Public Offering, including, for example, in connection with the sourcing and consummation
of an initial Business Combination; | |
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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; | |
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since the New Sponsor will lose its entire investment in us if our initial Business Combination is not completed
(other than with respect to any Public Shares they may acquire during or after the Initial Public Offering), and because each of the New
Sponsor Parties may profit substantially even under circumstances in which our Public Shareholders would experience losses in connection
with their investment, a conflict of interest may arise in determining whether a particular Business Combination target is appropriate
for our initial Business Combination; | |
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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 Public Shares at such time is substantially less than the
Redemption Price; | |
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resources could be wasted in researching acquisitions that are not completed, which could materially adversely
affect subsequent attempts to locate and acquire or merge with another business. If we have not completed our initial Business Combination
within the Combination Period, our Public Shareholders may receive only the Redemption Price or less than such amount in certain circumstances,
on the liquidation of our Trust Account and our Warrants will expire worthless; | |
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we may not be able to complete an initial Business Combination with certain potential target companies if
a proposed transaction with the target company may be subject to review or approval by regulatory authorities pursuant to certain U.S.
or foreign laws or regulations, including the Committee on Foreign Investment in the United States (CFIUS). Investments
that result in control of a U.S. business by a foreign person are always subject to CFIUS jurisdiction; | |
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recent fluctuations in inflation and interest rates in the United States and elsewhere could make it more
difficult for us to consummate an initial Business Combination; | |
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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; | |
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military or other conflicts in Ukraine, the Middle East or elsewhere may lead to increased volume and price
volatility for publicly traded securities, or affect the operations or financial condition of potential target companies, which could
make it more difficult for us to consummate an initial Business Combination; | |
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if our initial Business Combination involves a company organized under the laws of a state of the United States,
it is possible the Excise Tax will be imposed on us in connection with redemptions of our Ordinary Shares after or in connection with
such initial Business Combination; | |
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cyber incidents or attacks directed at us or third parties could result in information theft, data corruption,
operational disruption and/or financial loss; | |
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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; | |
22
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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; and | |
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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 (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 an interest-bearing demand deposit account at a bank until the earlier of the consummation of our initial Business
Combination or our liquidation. As a result of such transfer, we could receive less interest on the funds held in the Trust Account than
the interest we would have received pursuant to our original Trust Account investments, which could reduce the dollar amount our Public
Shareholders would receive upon any redemption or our liquidation. | |
*We may seek
to extend the Combination Period, which could reduce the amount held in our Trust Account and have adverse effects on our Company.*
If we are unable to consummate
our Initial Business Combination on or before August 8, 2026, we may seek shareholder approval to extend the Combination Period by amending
our Amended and Restated Charter. In such event, our Public Shareholders will be provided the opportunity to have all or a portion of
their Public Shares redeemed. Any redemptions will reduce the amount held in our Trust Account, the effect of which may adversely affect
our ability to consummate our initial Business Combination and may also impair our ability to maintain our Nasdaq listing.
**
*We anticipate
that our securities will be suspended from trading on Nasdaq and delisted if we do not consummate our initial Business Combination by
May 6, 2028. Any trading suspension or delisting could have a material adverse effect on the trading of our securities and may adversely
affect our ability to consummate an initial Business Combination.*
Our IPO Registration Statement
was declared effective by the SEC on May 6, 2025 and our securities are currently listed on the Global Market tier of Nasdaq. Pursuant
to our Amended and Restated Charter, we have until August 8, 2026 to consummate our initial Business Combination. However, under the Nasdaq
Rules, if a SPAC does not meet the Nasdaq 36-Month Requirement, the SPAC will be subject to a suspension of trading and delisting from
Nasdaq.
Under the Nasdaq Rules, a
SPACs Nasdaq-listed securities will be immediately suspended from trading if the SPAC does not meet the Nasdaq 36-Month Requirements,
and Nasdaq will, at such point, commence delisting procedures. Although a SPAC can request a hearing before the hearing panel of Nasdaq
(the Hearing Panel), the scope of the Hearing Panels review is limited. If a SPAC completes a Business Combination
after receiving a delisting determination by the staff of the Listing Qualifications Department of Nasdaq (a Staff Delisting Determination)
and/or demonstrates compliance with all applicable initial listing requirements, the combined company can apply to list its securities
on Nasdaq pursuant to the normal application review process. The Nasdaq Rules contain a list of deficiencies that would immediately result
in a Staff Delisting Determination, which includes noncompliance with the Nasdaq 36-Month Requirement. Accordingly, were we to amend our
Amended and Restated Charter to extend the date by which we are permitted to consummate our initial Business Combination, we would still
need to consummate our initial Business Combination on or prior to May 6, 2028 in order to avoid a suspension of our securities from trading
on and delisting from Nasdaq. If Nasdaq were to suspend our securities from trading and delist our securities, our securities could potentially
be quoted on an over-the-counter market. Even if our securities are then quoted on an over-the-counter market, our Nasdaq suspension and
delisting could have significant material adverse consequences, including:
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making our securities appear to be less attractive to potential target companies than the securities of an
exchange listed SPAC; | |
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limited availability of market quotations for our securities; | |
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reduced liquidity for our securities; | |
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the possibility that our Class A Ordinary Shares would be deemed penny stock, which will require
brokers trading in our Class A Ordinary Shares to adhere to more stringent rules and possibly result in a reduced level of trading activity
in the secondary trading market for our securities; | |
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limited news and analyst coverage; and | |
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decreased ability to issue additional securities or obtain additional financing in the future. | |
In addition, if our securities
are delisted from Nasdaq, trading in our securities, and offers and sales of our securities by us, may be subject to state securities
regulation and additional compliance costs.
*The share
price of the post-Business Combination company may be less than the Redemption Price) of our Public Shares.*
**
Each Unit sold in our Initial
Public Offering at an offering price of $10.00 per Unit consisted of one Public Share and one-half of one Public Warrant. Of the proceeds
we received from the Initial Public Offering and the Private Placement, $144,109,375 was placed in our Trust Account. We will provide
our Public Shareholders the opportunity to redeem all or a portion of their Public Shares in connection with the completion of our initial
Business Combination, and potentially upon the occurrence of certain other events prior to our initial Business Combination. We expect
that the pro rata redemption price in any redemption will be approximately $10.29 per Public Share as of December 31, 2025 (before taxes
payable, if any), representing a pro rata portion of our Trust Account without taking into account any interest or other income earned
on such funds (less any withdrawals from such interest or income for taxes paid), although the Redemption Price may be less in certain
circumstances. As a result, Public Shareholders who own our Public Shares on a redemption date can anticipate receiving the Redemption
Price in connection with a redemption for each Public Share that they choose to redeem.
There can be no assurance
that, after our initial Business Combination, our Public Shareholders would be able to sell their shares in the post-Business Combination
company for the Redemption Price, or any higher price. We have not as yet identified a target and are therefore unable to provide any
assurances as to its financial condition, business prospects or potential risks. It is therefore possible that the share price of the
post-Business Combination company may decline below the Redemption Price. In recent years, the share prices of many post-Business Combination
companies have fallen following a Business Combination. As a result, if our Public Shareholders continue to hold shares in the post-Business
Combination company following our initial Business Combination, we cannot assure our shareholders that the trading price of such shares
will be greater than the Redemption Price.
*Certain agreements
related to the Initial Public Offering may be amended, or their provisions waived, without shareholder approval.*
Certain of the agreements
related to the Initial Public Offering to which we are a party may be amended, or their provisions waived, without shareholder approval.
Such agreements include, among others, the (i) Underwriting Agreement, (ii) Letter Agreement, (iii) Registration Rights Agreement, (iii)
Private Placement Warrants Purchase Agreement and (iv) Administrative Services Agreement. These agreements contain various provisions
that our Public Shareholders might deem to be material. For example, our Letter Agreement and the Underwriting Agreement contain certain
lock-up provisions with respect to the Founder Shares and other securities held by the Old Sponsor Parties and the New Sponsor Parties,
subject to certain exceptions. Amendments or waivers to such agreements would require the consent of the applicable parties thereto and,
in certain cases, the consent of the underwriters of the Initial Public Offering. Any such modification, such as an amendment to shorten
lock-up restrictions, may benefit the Old Sponsor Parties and the New Sponsor Parties. Any such amendments would not require approval
from our shareholders, may result in the completion of our initial Business Combination that may not otherwise have been possible, and
may have an adverse effect on the value of an investment in our securities. For example, although we would not amend lock-up provisions
to permit securities held by the Old Sponsor or the New Sponsor to be freely sold, except to permitted transferees, prior to our initial
Business Combination, we may amend such provisions to permit them to be freely sold after the Business Combination earlier than they would
otherwise be permitted, which may have an adverse effect on the price of our securities. In no event, however, will the Letter Agreement
be amended to enable the Old Sponsor Parties and the New Sponsor Parties to redeem any of their Founder Shares from the aggregate amount
then on deposit in the Trust Account.
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*Uncertainty
in connection with certain international economic and political relationships, including the imposition of tariffs on international trade,
political disputes, regulatory changes and other international matters could have a material adverse effect on our ability to identify
potential targets and to consummate our initial Business Combination, and could adversely affect the financial performance of any target,
either foreign or domestic.*
The international economic
and political environment is dynamic and subject to change. There is currently significant uncertainty about the future economic and political
relationships between the United States and a number of other countries. These uncertainties include, among other things, the potential
imposition of protective tariffs on goods imported from other countries and reciprocal tariffs other countries may impose on United States
products, political disputes that may affect relationships between the United States and other countries and the imposition of regulatory
or other restrictions on trade and commerce. Any such matters could potentially limit the number of potential targets we may consider,
and could also have a material adverse effect on the financial performance of such potential targets. Among other things, historical financial
performance of companies affected by these international matters may not provide as accurate a barometer of future performance as would
pertain in a more stable economic environment.
For additional risks relating
to our operations, other than as set forth above, see the section titled Risk Factors contained in our IPO Registration
Statement. Any of these factors could result in a significant or material adverse effect on our results of operations or financial condition.
Additional risks could arise that may also affect our business or ability to consummate an initial Business Combination. We may disclose
changes to such risk factors or disclose additional risk factors from time to time in our future filings with the SEC.
Item
1B. Unresolved Staff Comments.
Not applicable.
Item
1C. Cybersecurity.
Although,
as a blank check company, we do not
have any operations, we are nonetheless subject to the risk of cybersecurity incidents. Among other things, the investments
in our Trust Account and bank deposits may be vulnerable to such incidents, and we may depend on the digital technologies of third parties.
We and third parties may be subject to cybersecurity attacks or security breaches. To the extent that we rely on the technologies of third
parties, we depend upon the personnel and the processes of such third parties to protect against cybersecurity incidents,
and we have no personnel or processes of our own for this purpose. In
the event of a cybersecurity incident impacting us, our Management Team will report to the Board
of Directors and provide updates on the Management Teams incident response plan for addressing and mitigating any
risks associated with such an incident. As an early-stage company without significant investments in data security protection,
we may not be sufficiently protected against such occurrences. We also lack sufficient resources to adequately protect against, or to
investigate and remediate any vulnerability to, cyber incidents. It is possible that any of these occurrences, or a combination of them,
could have material adverse consequences on our business and lead to financial loss. We have not encountered any cybersecurity incidents
since our Initial Public Offering. In addition to our own cybersecurity risks, any proposed Business Combination target may have been
subject to, or may in the future be subject to, cybersecurity incidents.
Item
2. Properties.
Our principal executive office
is located at 12955 Biscayne Boulevard Suite 200 PMB 616 Miami, Florida 33181. Our telephone number is (561) 489-2062. We believe that
our facilities are adequate to meet our needs for the immediate future, and that, if necessary, suitable physical space will be available
to accommodate any expansion of our operations. We will reimburse the New Sponsor in an amount equal to $15,000 per month for utilities
and secretarial and administrative support made available to us. Upon completion of our initial Business Combination or our liquidation,
we will cease paying these monthly fees.
Item
3. Legal Proceedings.
To the knowledge of our Management
Team, there is no material litigation currently pending or contemplated against us, any of our officers or directors in their capacity
as such or against any of our property.
Item
4. Mine Safety Disclosures.
Not applicable.
25
PART
II
Item
5. Market for Registrants Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities.
|
(a) |
Market Information | |
Our Units, Public Shares and
Public Warrants are each traded on the Global Market tier of Nasdaq under the symbols IPODU, IPOD and IPODW,
respectively. Our Units commenced public trading on May 7 2025, and our Public Shares and Public Warrants commenced separate public trading
on June 12, 2025.
|
(b) |
Holders | |
On March 10, 2026, there was
one holder of record of our Units, one holder of record of our Class A Ordinary Shares, one holder of record of our Class B Ordinary Shares,
and three holders of record of our Warrants.
|
(c) |
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 our initial Business Combination.
A Cayman Islands company may pay a dividend on its shares out of either profit or the share premium account, provided that in no circumstances
may a dividend be paid if following such payment the company would be unable to pay its debts as they fall due in the ordinary course
of business. The payment of cash dividends following completion of our initial Business Combination will be within the discretion of our
Board of Directors at such time and will be dependent upon our revenues and earnings, if any, capital requirements and general financial
condition at such time. There is no certainty we will be in a position to, or decide to, pay cash dividends after completing any Business
Combination. Further, if we incur any indebtedness in connection with our initial Business Combination, our ability to declare dividends
following completion of our initial Business Combination may be limited by restrictive covenants we may agree to in connection therewith.
|
(d) |
Securities Authorized for Issuance Under Equity
Compensation Plans | |
None.
|
(e) |
Performance Graph | |
As a smaller reporting company,
we are not required to provide the information required by Regulation S-K Item 201(e).
|
(f) |
Recent Sales of Unregistered Securities |
|
Simultaneously
with the closing of the Initial Public Offering and pursuant to the Private Placement Warrants Purchase Agreement, we completed the sale
of an aggregate of 2,000,000 Private Placement Warrants to the Sponsor in the Private Placement at a purchase price of $1.00 per Private
Placement Warrant, generating gross proceeds to us of $2,000,000. The Private Placement Warrants (and underlying securities) are identical
to the Public Warrants sold in the Initial Public Offering, except as otherwise disclosed in the IPO Registration Statement. No underwriting
discounts or commissions were paid with respect to such sale. The issuance of the Private Placement Warrants was made pursuant to the
exemption from registration contained in Section 4(a)(2) of the Securities Act.
|
(g) |
Use of Proceeds from the Initial Public Offering |
|
On
May 8, 2025, we consummated our Initial Public Offering of 14,375,000 Units, including 1,875,000 Option Units issued pursuant to the full
exercise of the Over-Allotment Option. Each Unit consists of one Public Share, and one-half of one Public Warrant, with each whole Public
Warrant entitling the holder thereof to purchase one Class A Ordinary Share for $11.50 per share.
26
The
Units were sold at a price of $10.00 per Unit, generating gross proceeds to us of $143,750,000. Clear Street acted as sole book running
manager and representative of the several underwriters of the Initial Public Offering. On November 12, simultaneously with the consummation
of our Initial Public Offering and pursuant to the Private Placement Warrants Purchase Agreement, we completed the private sale of an
aggregate of 2,000,000 Private Placement Warrants at a purchase price of $1.00 per Private Placement Warrant, to our Sponsor, generating
gross proceeds of $2,000,000.
Following the closing of our
Initial Public Offering on May 8, 2025, a total of $144,109,375, comprised of the proceeds from the Initial Public Offering and the Private
Placement (which amount includes $5,750,000 of the Deferred Fee), was placed in a U.S.-based trust account maintained by Continental,
acting as trustee. The proceeds held in the Trust Account may be invested by the trustee only in U.S. government securities with a maturity
of 185 days or less or in money market funds investing solely in U.S. government treasury obligations and meeting certain conditions under
Rule 2a-7 under the Investment Company Act. To mitigate the risk 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 the
Management Teams ongoing assessment of all factors related to the 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.
The remaining proceeds from
the Initial Public Offering and the Private Placement are held outside the Trust Account. Such funds are being used primarily to enable
us to identify a target and to negotiate and consummate our initial Business Combination.
There
has been no material change in the planned use of the proceeds from our Initial Public Offering and the Private Placement as described
in the IPO Registration Statement. The specific investments in our Trust Account may change from time to time.
|
(h) |
Purchases of Equity Securities by the Issuer
and Affiliated Purchasers | |
There were no such repurchases
of our equity securities by us or an affiliate during the fourth quarter of the fiscal year covered by the Report.
Item
6. [Reserved]
Item
7. Managements Discussion and Analysis of Financial Condition and Results of Operations.
Cautionary Note
Regarding Forward-Looking Statements
All
statements other than statements of historical fact included in this Report including, without limitation, statements under this Item
regarding our financial position, business strategy and the plans and objectives of Management for future operations, are forward-looking
statements. When used in this Report, words such as anticipate, believe, estimate, expect,
intend and similar expressions, as they relate to us or our Management, identify forward-looking statements. Such forward-looking
statements are based on the beliefs of our Management, as well as assumptions made by, and information currently available to, our Management.
Actual results could differ materially from those contemplated by the forward-looking statements as a result of certain factors detailed
in our filings with the SEC. All subsequent written or oral forward-looking statements attributable to us or persons acting on our behalf
are qualified in their entirety by this paragraph.
The
following discussion and analysis of our financial condition and results of operations should be read in conjunction with the financial
statements and the notes thereto contained elsewhere in this Report.
27
Overview
We are a blank check company
incorporated in the Cayman Islands on September 13, 2024 incorporated for the purpose of effecting a merger, amalgamation, share exchange,
asset acquisition, share purchase, reorganization or other similar business combination with one or more businesses. We intend to effectuate
our Business Combination using cash derived from the proceeds of the Initial Public Offering and the sale of the Private Placement Warrants,
our shares, debt or a combination of cash, shares and debt.
We expect to continue to incur
significant costs in the pursuit of our acquisition plans. We cannot assure you that our plans to complete a Business Combination will
be successful.
In 2024, the SEC adopted additional
rules and regulations relating to SPACs, which became effective on July1, 2024, referred herein as the 2024 SPAC Rules. The 2024
SPAC Rules require, among other matters, (i) additional disclosures relating to SPAC sponsors and related persons; (ii) additional disclosures
relating to SPAC Business Combination transactions; (iii) additional disclosures relating to dilution and to conflicts of interest involving
sponsors and their affiliates in connection with proposed Business Combination transactions; (iv) additional disclosures regarding projections
included in SEC filings in connection with proposed Business Combination transactions; and (v) the requirement that both the SPAC and
its target company be co-registrants in connection with registration statements relating to proposed Business Combination transactions.
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. The 2024 SPAC Rules may materially affect our ability to negotiate and complete our Initial Business Combination and
may increase the costs and time related thereto.
We may seek to extend the
Combination Period consistent with applicable laws, regulations and stock exchange rules by amending our amended and restated memorandum
and articles of association. Such an amendment would require the approval of our public shareholders, who will be provided the opportunity
to redeem all or a portion of their Public Shares in connection with the vote on such approval. Such redemptions will decrease the amount
held in our Trust Account and our capitalization, and may affect our ability to maintain our listing on Nasdaq. In addition, the Nasdaq
rules currently require SPACs (such as us) to complete our initial Business Combination within 36 months following the effective date
of our IPO Registration Statement. If we do not meet such 36-month requirement, our securities will likely be subject to a suspension
of trading and delisting from Nasdaq.
.
Results of Operations
We have neither engaged in
any operations nor generated any revenues to date. Our only activities from September 13, 2024 (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 year ended December
31, 2025, we had a net income of $3,349,485 which consists of interest earned on marketable securities held in the Trust Account of $3,801,400
offset by formation and general and administrative costs of $451,915.
For the period from September
13, 2024 (inception) through December 31, 2024, we had a net loss of $36,702, which consists of formation and general and administrative
costs.
Liquidity, Capital
Resources and Going Concern
On May8, 2025, we consummated
the Initial Public Offering of 14,375,000 Units, which included the full exercise by the underwriters of their over-allotment option in
the amount of 1,875,000 Units, at $10.00 per Unit generating gross proceeds of $143,750,000. Simultaneously with the closing of the Initial
Public Offering, we completed the sale of 2,000,000 Private Placement Warrants at a price of $1.00 per Private Placement Warrant in a
private placement to our Dune Acquisition Holdings II LLC (the Sponsor), generating gross proceeds of $2,000,000.
28
Following the Initial Public
Offering, the full exercise of the over-allotment option, and the sale of the Private Placement Warrants, a total of $144,109,375 ($10.025
per Unit) was placed in the Trust Account. We incurred transaction costs of $6,637,469, consisting of $550,000 of a cash underwriting
fee, $5,750,000 of deferred underwriting fees and $337,469 of other offering costs.
On January 30, 2026, we, the
New Sponsor, the Old Sponsor, the Sponsor Member, the Non-Managing Members, and the Non-Managing Investors entered into the New Sponsor
Purchase Agreement pursuant to which New Sponsor has agreed to purchase from the Sponsor the Transferred Interest, an aggregate of (i)
4,475,000 Class B Ordinary Shares and (ii) 1,000,000 Private Placement Warrants, for an aggregate purchase price of $2,000,000 (the Sponsor
Transaction).
Pursuant to the Purchase Agreement,
if a definitive business combination agreement is not entered into by the Option Date, May 7, 2026, the Sponsor Member shall be entitled
to the Repurchase Right, to repurchase the Transferred Interests from the New Sponsor for a purchase price of $2,000,000. The Repurchase
Right may be exercised only during the Option Period, commencing on the Option Date and ending at 5:00 p.m., New York City time, on the
date that is five (5) days after the Option Date, by delivery of written notice of exercise to the New Sponsor in accordance with the
terms set forth in the Purchase Agreement. If the Sponsor Member does not exercise the Repurchase Right within the Option Period, the
Repurchase Right shall automatically terminate and be of no further force or effect.
The closing of the Sponsor
Transaction and such other transactions contemplated by the Purchase Agreement occurred on February 5, 2026 (the New Sponsor Closing).
For the year ended December
31, 2025, cash used in operating activities was $429,113. Net income of $3,349,485 was affected by interest earned on marketable securities
held in the Trust Account of $3,801,400 offset by the payment of offering costs through promissory note of $23,500 and the payment of
operating costs through advances from related party of $4,320. Changes in operating assets and liabilities used $5,018 of cash for operating
activities.
For the period from September
13, 2024 (inception) through December 31, 2024, cash used in operating activities was $30,472. Net loss of $36,702 was affected by changes
in operating assets and liabilities which used $6,230 of cash for operating activities.
As of December 31, 2025, we
had marketable securities held in the Trust Account of $147,910,775 (including approximately $3,801,400 of interest income) consisting
of money market funds invested in U.S. treasury securities. We may withdraw interest from the Trust Account to pay taxes, if any. We intend
to use substantially all of the funds held in the Trust Account, including any amounts representing interest earned on the Trust Account
(less income taxes payable), to complete our Business Combination. To the extent that our share capital or debt is used, in whole or in
part, as consideration to complete our Business Combination, the remaining proceeds held in the Trust Account will be used as working
capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.
As of December 31, 2025, we
had cash of $365,751. We intend to use the funds held outside the Trust Account primarily to identify and evaluate target businesses,
perform business due diligence on prospective target businesses, travel to and from the offices, plants or similar locations of prospective
target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses,
and structure, negotiate and complete a Business Combination.
In order to fund working capital
deficiencies or finance transaction costs in connection with a Business Combination, our New Sponsor, or an affiliate of our New Sponsor
or certain of our officers and directors 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 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.
29
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.
As of December 31, 2025, we
had operating cash and cash equivalents of $365,751 and a working capital surplus of $289,539. We intend to use the funds held outside
the Trust Account primarily to identify and evaluate target businesses, perform business due diligence on prospective target businesses,
travel to and from the offices, plants or similar locations of prospective target businesses or their representatives or owners, review
corporate documents and material agreements of prospective target businesses, and structure, negotiate and complete a Business Combination.
In connection with Managements
assessment of going concern considerations in accordance with ASC 205-40, Going Concern, as of December 31, 2025, the Company
may need to raise additional capital through loans or additional investments from the New Sponsor, stockholders, officers, directors,
or third parties. Our officers, directors and New Sponsor may, but are not obligated to, loan the Company funds, from time to time or
at any time, in whatever amount they deem reasonable in their sole discretion, to meet the Companys working capital needs. Accordingly,
the Company may not be able to obtain additional financing. If the Company is unable to raise additional capital, it may be required to
take additional measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing operations, suspending
the pursuit of a potential transaction, and reducing overhead expenses. The Company cannot provide any assurance that new financing will
be available to it on commercially acceptable terms, if at all. The Companys liquidity condition raises substantial doubt about
the Companys ability to continue as a going concern for a period of time within one year after the date that the accompanying financial
statements are issued. Management plans to address this uncertainty through a Business Combination.
Off-Balance Sheet
Arrangements
We have no obligations, assets
or liabilities, which would be considered off-balance sheet arrangements as of December 31, 2025. We do not participate in transactions
that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which
would have been established for the purpose of facilitating off-balance sheet arrangements. We have not entered into any off-balance sheet
financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any
non-financial assets.
Contractual obligations
We do not have any long-term
debt, capital lease obligations, operating lease obligations or long-term liabilities, other than an agreement with the Old Sponsor and
subsequently New Sponsor an aggregate of $15,000 per month for utilities and secretarial and administrative support. We began incurring
these fees on May 6, 2025 and will continue to incur these fees monthly until the earlier of the completion of the Business Combination
and our liquidation.
The underwriters are entitled
to a deferred underwriting discount of $0.40 per unit, or up to $5,750,000 in the aggregate. The deferred fee will become payable to the
underwriters from the amounts held in the Trust Account solely on amounts remaining in the Trust Account following all properly submitted
shareholder redemptions in connection with the consummation of the initial Business Combination, subject to the terms of the underwriting
agreement.
30
Critical Accounting
Policies and Estimates
The preparation of financial
statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and
liabilities, disclosure of contingent assets and liabilities at the date of the 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, actual
results could materially differ from those estimates. We have identified the following critical accounting policies:
*Class A Ordinary
Shares Subject to Possible Redemption*
The public shares contain
a redemption feature which allows for the redemption of such public shares in connection with the Companys liquidation, or if there
is a shareholder vote or tender offer in connection with the Companys initial Business Combination. In accordance with ASC 480-10-S99,
the Company classifies public shares subject to possible redemption outside of permanent equity as the redemption provisions are not solely
within the control of the Company. The Company recognizes changes in redemption value immediately as they occur and will adjust the carrying
value of redeemable shares to equal the redemption value at the end of each reporting period. Immediately upon the closing of the Initial
Public Offering, the Company recognized the accretion from initial book value to redemption amount value. The change in the carrying value
of redeemable shares will result in charges against additional paid-in capital (to the extent available) and accumulated deficit.
*Net Income
(Loss) per Ordinary Share*
The Company complies with
accounting and disclosure requirements of ASC 260, Earnings Per Share. The Company has two classes of shares, which are
referred to as Class A ordinary shares and Class B ordinary shares. Income and losses are shared pro rata between the two classes of shares.
Net income (loss) per ordinary share is calculated by dividing the net income (loss) by the weighted average ordinary shares outstanding
for the respective period. Diluted net income (loss) per share attributable to ordinary shareholders adjusts the basic net income (loss)
per share attributable to ordinary shareholders and the weighted-average ordinary shares outstanding for the potentially dilutive impact
of outstanding warrants. However, because the warrants are anti-dilutive, they have been excluded from the calculation of diluted income
(loss) per ordinary share for the periods presented.
*Recent Accounting Standards*
In November 2023, the FASB
issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The amendments in this ASU require
disclosures, on an annual and interim basis, of significant segment expenses that are regularly provided to the chief operating officer
decision maker (CODM), as well as the aggregate amount of other segment items included in the reported measure of segment
profit or loss. The ASU requires that a public entity disclose the title and position of the CODM and an explanation of how the CODM uses
the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources. Public entities
will be required to provide all annual disclosures currently required by Topic 280 in interim periods, and entities with a single reportable
segment are required to provide all the disclosures required by the amendments in this ASU and existing segment disclosures in Topic 280.
This ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December
15, 2024, with early adoption permitted. The Company adopted ASU 2023-07 on September 13, 2024 (inception).
In December 2023, the FASB
issued ASU 2023-09, Income Taxes (ASC Topic 740): Improvements to Income Tax Disclosures (ASU 2023-09), which requires disclosure of incremental
income tax information within the rate reconciliation and expanded disclosures of income taxes paid, among other disclosure requirements.
ASU 2023-09 is effective for fiscal years beginning after December 15, 2025. Early adoption is permitted. Management does not believe
the adoption of ASU 2023-09 will have a material impact on its financial statements and disclosures.
Management does not believe
that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on our financial
statements.
31
Item
7A. Quantitative and Qualitative Disclosures about Market Risk.
We are a smaller reporting
company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise required under this Item.
Item
8. Financial Statements and Supplementary Data.
Reference is made to pages
F-1 through F-24 comprising a portion of this Report, which are incorporated 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 are procedures
that are designed with the objective of ensuring that information required to be disclosed in our reports filed under the Exchange Act
is recorded, processed, summarized, and reported within the time period specified in the SECs rules and forms. Disclosure controls
are also designed with the objective of ensuring that such information is accumulated and communicated to our management, including the
chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.
Under the supervision and
with the participation of our management, including our principal executive officer and principal financial and accounting officer, we
conducted an evaluation of the effectiveness of our disclosure controls and procedures as of the end of the fiscal quarter ended December
31, 2025, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on this evaluation, our principal executive
officer and principal financial and accounting officer have concluded that during the period covered by this report, our disclosure controls
and procedures were effective at a reasonable assurance level and, accordingly, provided reasonable assurance that the information required
to be disclosed by us in reports filed under the Exchange Act is recorded, processed, summarized and reported within the time periods
specified in the SECs rules and forms.
We do not expect that our
disclosure controls and procedures will prevent all errors and all instances of fraud. Disclosure controls and procedures, no matter how
well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures
are met. Further, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and the
benefits must be considered relative to their costs. Because of the inherent limitations in all disclosure controls and procedures, no
evaluation of disclosure controls and procedures can provide absolute assurance that we have detected all our control deficiencies and
instances of fraud, if any. The design of disclosure controls and procedures also is based partly on certain assumptions about the likelihood
of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future
conditions.
Managements
Report on Internal Controls Over Financial Reporting
As required by SEC rules and
regulations implementing Section 404 of the Sarbanes-Oxley Act, our management is responsible for establishing and maintaining adequate
internal control over financial reporting. Our internal control over financial reporting is designed to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of our financial statements for external reporting purposes in accordance with
GAAP. Our internal control over financial reporting includes those policies and procedures that:
|
(1) |
pertain to the maintenance of records that, in reasonable detail, accurately
and fairly reflect the transactions and dispositions of the assets of our company, | |
32
|
(2) |
provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with GAAP, and that our receipts and expenditures are being made only in accordance
with authorizations of our management and directors, and | |
|
(3) |
provide reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use or disposition of our assets that could have a material effect on the financial statements. | |
Because of its inherent limitations,
internal control over financial reporting may not prevent or detect errors or misstatements in our financial statements. Also, projections
of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in
conditions, or that the degree or compliance with the policies or procedures may deteriorate. Management assessed the effectiveness of
our internal control over financial reporting at December 31, 2025. In making these assessments, management used the criteria set forth
by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control Integrated Framework (2013).
Based on our assessments and those criteria, management determined that we maintained effective internal control over financial reporting
as of December 31, 2025.
This Report does not include
an attestation report of our independent registered public accounting firm due to our status as an emerging growth company under the JOBS
Act.
Changes in Internal
Control over Financial Reporting
There were no changes in our internal control over
financial reporting 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.
Trading Arrangements
During the quarterly period
ended December 31, 2025, none of our directors or officers (as defined in Rule 16a-1(f) promulgated under the Exchange Act) adopted
or terminated
any Rule 10b5-1 trading arrangement or any non-Rule 10b5-1 trading arrangement, as each term is defined in
Item 408 of Regulation S-K.
Additional Information
None.
Item
9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.
Not applicable.
33
PART
III
Item
10. Directors, Executive Officers and Corporate Governance.
Directors and Executive Officers
As of the date of this Report,
our directors and officers are as follows:
|
Name: |
|
Age: |
|
Position: | |
|
Elliot Richmond |
|
46 |
|
Chief Executive Officer and Chief Financial Officer | |
|
Ben Coates |
|
54 |
|
Director | |
|
Jeron Smith |
|
39 |
|
Director | |
|
Cecil White III |
|
31 |
|
Director | |
The experience of our directors
and executive officers is as follows:
Elliot
Richmond has served as our Chief Executive Officer and Chief Financial Officer since February 2026. He has served as President
of Collective Capital Management LLC since January 2024. He was an Independent Director of Inflection Point Acquisition Corp. II, a special
purpose acquisition company, from May 2023 until March 2025 when it completed its business combination with USA Rare Earth, Inc. From
April 2021 to June 2023, he served as Chief Financial Officer and Director of Ahren Acquisition Corp. Mr. Richmond had a successful 20-year
career in investment banking and was a Partner and Managing Director at Moelis & Company (from 2012 to 2019). Prior to joining Moelis
& Company in 2011, Mr. Richmond was Director of Investment Banking, and Head of UK ECM, at Bank of America Merrill Lynch. Throughout
his career, Mr. Richmond has advised on over $75 billion worth of mergers & acquisitions and equity offerings. He holds a B.Sc. in
Economics from University College London.
Ben
Coates is a Director as of the date hereof. He is an experienced company director, global business manager and chief executive
officer. Mr.Coates is currently a Director of Global Gas, serving as a member of the audit and risk committee and chair of the Nominating
and Governance Committee, having been appointed in December2023. From August2021 to April2023, Mr.Coates was a
board member of F45 Training Holdings Inc. (F45) (NYSE:FXLV), where he served as a member of F45s Audit Committee
until July2022, when he was appointed Interim Chief Executive Officer. Mr.Coates undertook a restructure and turnaround of
the company on behalf of the board and shareholders, including a recapitalization. F45 operates over 2,000 fitness franchises in over
60 countries. Mr.Coates is currently a Director of Coolgardie Investments, a private investment company that he founded in 2006.
Mr.Coates has actively worked with companies affiliated with Coolgardie since 2014 including as a partner with Prime Production,
a global translation company based in the United Kingdom, a Director with National Civil Group, an Australian civil contracting business,
and Glen Eden Pastoral, an Australian rural business, where he currently serves as a Director. From 2007 to 2014, Mr.Coates held
various roles at National Australia Bank (NAB) at both the Australia and United Kingdom offices. From 2010 to 2014, Mr.Coates
served as Director of Strategy for NAB Europe Ltd. From 2007 to 2010, he served as an Executive Director at NAB Private Wealth in Australia.
Prior to joining NAB, Mr.Coates spent severalyears as General Manager, Funds Management at Hanover Group, where he was responsible
for developing and managing the retail and wholesale fund raising activities, as well as chairing the compliance and risk management committee.
Mr.Coates commenced his tertiary education studying Civil Engineering at the University of Sydney before completing his Master of
Applied Finance at Macquarie University, and his Diploma of Financial Planning at Deakin University. He is also a graduate of the Australian
Institute of Company Directors (GAICD). Mr.Coates qualifications to serve on our Board include his breadth of financial and
public company management experience, including as a Director of Global Gas Corporation, Director and Interim Chief Executive Officer
of F45, an investor and founder of Coolgardie Investments, and from prior roles with National Australia Bank.
34
Jeron
Smith**is a Director as of the date hereof.Mr.Smith was a Director of DuneI from June2020 until
December2023. Mr.Smith serves as Director and Member of the Audit, Compensation, and Nominating Committees of Global Gas.
Mr.Smithfounded Unanimous Media with business partner Stephen Curry of the Golden State Warriors. Mr.Smith has served
as the Chief Executive Officer of Unanimous since its inception. Unanimousdevelops and produces television, film and digital content.Unanimous
launched in April2018 in partnership with Sony Pictures Entertainment. In 2021, Mr.Smith partnered with Michael Jordan and
his son, Jeffrey Michael Jordan, to found Heir Inc., an entertainment and tech venture geared towards athletes. In conjunction with Sony
Pictures Entertainment, Mr.Smith is also a founder of The Incubation Lab, a culture-forward media incubator founded in 2019. Mr.Smith
is a seasoned leader in brand management, helping spearhead the launch of Stephen Curry 30 Inc., as Chief Marketing Officer, from January
2017 to January 2019, and overseeing Mr.Currys holistic brand strategy and partnership portfolio. In his role at Stephen
Curry 30 Inc., Mr.Smith developed an industry-leading benchmark formula for player marketing and engineered various prominent partnership
deals.Prior to teaming up with Mr.Curry, Mr.Smith worked at the White House Office of Digital Strategy under President
Barack Obama from 2015 to 2017, where he developed and implemented a comprehensive digital strategy for the Executive Office of the President
including digital content, media partners, whitehouse.gov, as well as @whitehouse and @POTUS social media channels for specific policy
initiatives. Before joining the White House, Mr.Smith served as a Brand Marketing Strategic Lead across several categories and territories
at Nike Inc. While there, Mr.Smith leveraged the integrated marketing mix to launch and lead disruptive marketing campaigns.In
2015, Mr.Smith was recognized on Forbes 30 under 30 list for Marketing and Advertising and the Ad Age 40 Under 40 list, and
his expertise in digital marketing is highlighted through his published research in the International Journal of Mobile Marketing.Mr.Smith
holds a B.A. in Business Administration from Howard University, and Masters degrees from Georgetown University and Columbia University.Mr.Smiths
qualifications to serve on our Board include his deal structuring, operational and marketing expertise.
Cecil
WhiteIIIis a Director as of the date hereof. Mr.White was a Director of DuneI from February2023 until
December2023. Since November 2018, Mr.White has served as an Agent at William Morris Endeavor (WME) focused on business development
for talent and properties. At WME, Mr.White has steered over 150 brand endorsements, equity-based partnerships, and sponsorships
with some of the worlds fastest-growing companies, such as Tonal, Away Luggage, Talkspace, BodyArmor, Zeel, Asutra, HyperIce, Adidas,
Jordan Brand, Gatorade, Beats by Dre, Lemon Perfect, Mercedes Benz, and others. In 2020, he co-founded The InvescoQQQ Legacy Classic,
a new property headlined by a nationally-televised collegiate basketball showcase focused on spotlighting HBCU life& culture;
the event is co-owned by Endeavor, Michael B.Jordan, Harris Blitzer Sports& Entertainment, and Horizon Media. Mr.White
began his career as an Investment Banker at Barclays (NYSE:BCS) covering the consumer retail and healthcare industries. He was an
Echols Scholar at the University of Virginia, where he received his Bachelor of Science in Commerce with concentrations in Finance, Management,
and Business Analytics and a minor in African American studies. Cecil was listed on Forbes 30 Under 30 (2020)and Sports Business
Journals New Voices Under 30 (2020). Mr.Whites qualifications to serve on our board of directors include his business
development, financial and investment banking expertise.
Concurrently with New Sponsor
Closing, Mr. Coates, Mr. Smith, and Ms. White (the Resigning Directors) delivered their resignations, effective upon expiration
of all applicable waiting periods under Section 14(f) of the Exchange Act and Rule 14f-1 thereunderupon the 10th day following
the mailing by us of an information statement to our Public Shareholders advising them of the Sponsor Transaction and the other transactions
contemplated by the New Sponsor Purchase Agreement, including the change in control of a majority of our Board of Directors and new members
of our Board of Directors will be appointed by the New Sponsor. As a result of the foregoing, the Resigning Directors will be replaced
by a new Board of Directors.
*Family Relationships*
There are no family relationships
among any of our executive officers or directors or our Advisor.
**
35
**
*Involvement in Certain Legal Proceedings*
There are no material proceedings
to which any director or executive officer, or any associate of any such director or officer is a party adverse to our Company, or has
a material interest adverse to our Company.
Advisor
Carter
Glatt has served as our Advisor since February 2026. He was previously our Chief Executive Officer, Director and Chairman from
our inception to February 2026. Mr.Glatt was Chief Executive Officer and Director of DuneI from June2020 until December2023.
Mr.Glatt guided DuneI through its business combination with Global Gas, a nascent industrial gas project developer and supplier.
Mr.Glatt has served as the Chairman of Global Gas since December2023. From May2018 to April2020, Mr.Glatt
served as the Head of Corporate Development and Senior Vice President of GTY, a SaaS company that offers a cloud-based suite of solutions
for the public sector. GTY was formerly a SPAC founded by the former chairmen of EMC Corporation, VMware, Inc. and Accenture PLC.In
such role, Mr.Glatt oversaw, or was directly involved in, all M&A, joint venture, capital raising, investor relations and strategic
alternatives efforts for GTY.Mr.Glatts SPAC expertise and operational leadership is complemented by his background
in investment banking. He began his career at Barclays (NYSE:BCS), covering the financial technology, consumer retail and healthcare
industries. Mr.Glatt holds a BA with Honors from Dartmouth College. Mr.Glatts qualifications to serve on the board
include his expertise in SPACs, deal sourcing, M&A structuring, and capital raising.
Our Advisor (i) assists us
in sourcing and negotiating with potential Business Combination targets, (ii) provides business insights when we assess potential Business
Combination targets and (iii) upon our request, provides business insights as we work to create additional value in the businesses that
we acquire. However, our Advisor has no written advisory agreement with us. Additionally, our Advisor has no other employment or compensation
arrangements with us. Moreover, our Advisor is not under any fiduciary obligations to us nor does our Advisor perform Board or committee
functions, nor does our Advisor have any voting or decision-making capacity on our behalf. Our Advisor is also not required to devote
any specific amount of time to our efforts. Accordingly, if our Advisor becomes aware of a Business Combination opportunity that is suitable
for any of the entities to which our Advisor has fiduciary or contractual obligations (including other blank check companies), our Advisor
will honor their fiduciary or contractual obligations to present such business combination opportunity to such entity, and only present
it to us if such entity rejects the opportunity. We may modify or expand our roster of advisors as we source potential Business Combination
targets or create value in businesses that we may acquire.
Number and Terms of Office of Officers
and Directors
Our board of directors will
consist of five members and will be divided into three classes with only one class of directors being appointed in each year, and with
each class (except for those directors appointed prior to our first annual general meeting) serving a three-yearterm. Prior to the
closing of our initial business combination, only holders of our Class B Ordinary Shares will be entitled to vote on the appointment and
removal of directors or 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). Holders of our public shares will not be entitled to vote on such
matters during such time. These provisions of our amended and restated memorandum and articles of association relating to these rights
of holders of Class B Ordinary Shares may be amended 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.
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, which will be Mr. White,
will expire at our first annual general meeting. The term of office of the second class of directors, which will consist of Messrs. Coates
and Smith, will expire at the second annual general meeting. The term of office of the third class of directors, which will consist of
Messrs. Glatt and Castaldy, will expire at the third annual general meeting.
Our officers are appointed
by the board of directors and serve at the discretion of the board of directors, rather than for specific terms of office. Our board of
directors is authorized to appoint officers as it deems appropriate pursuant to our amended and restated memorandum and articles of association.
36
Committees of the Board of Directors
Our Board of Directors has
two standing committees: the Audit Committee and a compensation committee (the Compensation Committee). Subject to phase-in
rules, the Nasdaq Rules and Rule 10A-3 of the Exchange Act require that the audit committee of a listed company be comprised solely of
independent directors. Each committee operates under a charter that has been approved by our Board and has the composition and responsibilities
described below.
**
*Audit Committee*
We have established the Audit
Committee of the Board of Directors. Messrs. Coates, Smith and White serve as the members of our Audit Committee. Under the Nasdaq Rules
and applicable SEC rules, we are required to have three members of the Audit Committee, all of whom must be independent. Messrs. Coates,
Smith and White are each independent.
Mr. White serves as the chairman
of the Audit Committee. Each member of the Audit Committee is financially literate and our Board of Directors has determined that Mr.
White qualifies as an audit committee financial expert as defined in applicable SEC rules.
We have adopted a charter
of the Audit Committee, which details the principal functions of the Audit Committee, including:
|
|
assisting with Board oversight of (i) the integrity of our financial statements, (ii) our compliance with
legal and regulatory requirements, (iii) our independent registered public accounting firms qualifications and independence, and
(iv) 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 (i) the independent registered
public accounting firms internal quality-control procedures and (ii) any material issues raised by the most recent internal quality-control
review, or peer review, of the independent registered public accounting firm, or by any inquiry or investigation by governmental or professional
authorities, within the preceding five years respecting one or more independent audits carried out by the firm and any steps taken to
deal with such issues; | |
|
|
meeting to review and discuss our annual audited financial statements and quarterly financial statements with
management and the independent registered public accounting firm, including reviewing our specific disclosures under Managements
Discussion and Analysis of Financial Condition and Results of Operations; reviewing and approving any related party transaction
required to be disclosed pursuant to Item 404 of Regulation S-K promulgated by the SEC prior to us entering into such transaction; and |
|
|
|
reviewing with management, the independent registered public accounting firm, and our legal advisors, as appropriate,
any legal, regulatory or compliance matters, including any correspondence with regulators or government agencies and any employee complaints
or published reports that raise material issues regarding our financial statements or accounting policies and any significant changes
in accounting standards or rules promulgated by the FASB, the SEC or other regulatory authorities; | |
**
37
**
*Compensation Committee*
We have established the Compensation
Committee of our Board of Directors. The members of our Compensation Committee are Messrs. Coates, Smith and White. Mr. Smith serves as
chair of the Compensation Committee. Under the Nasdaq Rules and applicable SEC rules, we are required to have a Compensation Committee
of at least two members, all of whom must be independent. Messrs. Coates, Smith and White are each independent.
We have adopted a charter
of the Compensation Committee, 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.. | |
The charter also provides
that the Compensation Committee may, in its sole discretion, retain or obtain the advice of a compensation consultant, legal counsel or
other adviser and is directly responsible for the appointment, compensation and oversight of the work of any such adviser or entity. 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 or entity, including the factors required by Nasdaq and the SEC.
Director Nominations
We do not have a standing nominating
committee though we would form a corporate governance and nominating committee as and when required to do so by law or the Nasdaq Rules.
In accordance with Rule 5605(e)(2) 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 the 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 Messrs. Coates, Smith and White. In accordance with Rule 5605(e)(1)(A)
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 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
Charter.
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, our 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, our Public Shareholders do not have the right to recommend director candidates for nomination
to our Board of Directors.
38
Code of Ethics
We have adopted a Code of
Business Conduct and Ethics, applicable to our directors, officers and employees (the Code of Ethics). A copy of the Code
of Ethics and the charters of the committees of our Board of Directors will 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 rules or
the 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 Report 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.
The foregoing description
of the Code of Ethics does not purport to be complete and is qualified in its entirety by the terms and conditions of the Code of Ethics,
a copy of which is attached hereto as Exhibit 14 and is incorporated herein by reference.
Trading Policies
On May 8, 2025, we adopted
insider trading policies and procedures governing the purchase, sale, and/or other dispositions of our securities by directors, officers
and employees, which are reasonably designed to promote compliance with insider trading laws, rules and regulations, and the applicable
Nasdaq Rules (the Insider Trading Policy).
The foregoing description
of the Insider Trading Policy does not purport to be complete and is qualified in its entirety by the terms and conditions of the Insider
Trading Policy, a copy of which is attached hereto as Exhibit 19 and is incorporated herein by reference.
Compensation Recovery and Clawback
Policy
Under the Sarbanes-Oxley Act,
in the event of misconduct that results in a financial restatement that would have reduced a previously paid incentive amount, we can
recoup those improper payments from our executive officers. The SEC has also adopted the SEC Clawback Rule that directs national stock
exchanges to require listed companies to implement policies intended to recoup bonuses paid to executives if the company is found to have
misstated its financial results.
On May 8, 2025, our Board
of Directors approved the adoption of the Executive Compensation Clawback Policy (the Clawback Policy), in order to comply
with the SEC Clawback Rule, and the Nasdaq Rules, as set forth in Nasdaq Listing Rule 5608 (the Nasdaq Clawback Rules).
The Clawback Policy provides
for the mandatory recovery of erroneously awarded incentive-based compensation from our current and former executive officers as defined
in the SEC Clawback Rule (Covered Officers) in the event that we are required to prepare an accounting restatement, in accordance
with the Nasdaq Clawback Rules. The recovery of such compensation applies regardless of whether a Covered Officer engaged in misconduct
or otherwise caused or contributed to the requirement of an accounting restatement. Under the Clawback Policy, our Board of Directors
may recoup from the Covered Officers erroneously awarded incentive compensation received within a lookback period of the three completed
fiscal years preceding the date on which we are required to prepare an accounting restatement.
The foregoing description
of the Clawback Policy does not purport to be complete and is qualified in its entirety by the terms and conditions of the Clawback Policy,
a copy of which is attached hereto as Exhibit 97 and is incorporated herein by reference.
39
Item
11. Executive Compensation.
None of our executive officers
or directors have received any cash compensation for services rendered to us as of the date of this Report.
Our Audit Committee reviews
on a quarterly basis all payments that were made to our Sponsor, executive officers or directors, or our or their affiliates. Any such
payments prior to an initial Business Combination are made from funds held outside the Trust Account. Other than quarterly Audit Committee
review of such reimbursements, we do not have any additional controls in place governing our reimbursement or payments to our directors
and executive officers for their out-of-pocket expenses incurred in connection with our activities on our behalf in connection with identifying
and consummating an initial Business Combination.
We are not prohibited from
paying any fees (including advisory fees), reimbursements or cash payments to our Sponsor, officers or directors, or our or their affiliates,
for services rendered to us prior to or in connection with the completion of our initial Business Combination, including the following
payments, all of which, if made prior to the completion of our initial Business Combination, have been and will continue to be paid from
funds held outside the Trust Account:
|
|
Repayment of up to an aggregate of $150,000 in loans made to us by our Sponsor to cover offering-related and
organizational expenses pursuant to the IPO Promissory Note. As of December 31, 2025, the IPO Promissory Note had been paid in full and
borrowings under the IPO Promissory Note are no longer available | |
|
|
Reimbursement for office space, utilities and secretarial and administrative support made available to us
by an affiliate of our Old Sponsor, and subsequently New Sponsor, in an amount equal to $15,000 per month through the earlier of consummation
of the initial Business Combination and our liquidation, pursuant to the Administrative Services Agreement; | |
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|
Payment of consulting, success or finder fees to our independent directors or our Advisor or their respective
affiliates in connection with the consummation of our initial Business Combination; | |
|
|
We may engage our New Sponsor or an affiliate of our New Sponsor as an advisor or otherwise in connection
with our initial Business Combination and certain other transactions and pay such person or entity a salary or fee in an amount that constitutes
a market standard for comparable transactions; | |
|
|
Reimbursement for any out-of-pocket expenses related to identifying, investigating, negotiating and completing
an initial Business Combination; and | |
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|
Repayment of Working Capital Loans that may be made by our New Sponsor or an affiliate of our Sponsor or certain
of our officers and directors to finance transaction costs in connection with an intended initial Business Combination. Up to $1,500,000
of such Working Capital Loans may be convertible into warrants of the post-Business Combination entity at a price of $1.00 per warrant
at the option of the lender. Such warrants would be identical to the Private Placement Warrants. 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 Working Capital Loans. |
|
40
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 proxy solicitation
materials or tender offer materials furnished to our shareholders in connection with a proposed Business Combination. We have not established
any limit on the amount of such fees that may be paid by the combined company to the members of our Management Team. The amount of such
compensation may not be known at the time of the proposed Business Combination, because the directors of the post-Business Combination
business will be responsible for determining executive officer and director compensation.
Any compensation to be paid
to our executive officers will be determined, or recommended to the Board of Directors for determination, either by the Compensation Committee,
which consists solely of independent directors, or by a majority of the independent directors on our Board of Directors.
We do not intend to take any
action to ensure that members of our Management Team maintain their positions with the post-Business Combination company after the consummation
of our initial Business Combination, although it is possible that some or all of our executive officers and directors may negotiate employment
or consulting arrangements to remain with the post-Business Combination company 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 the post-Business
Combination company after the consummation of our initial Business Combination will be a determining factor in our decision to proceed
with any potential Business Combination. We are not party to any agreements with our executive officers and directors that provide for
benefits upon termination of employment.
Item
12. Security Ownership of Certain Beneficial Owners and Management
and Related Stockholder Matters.
The following table sets forth
information regarding the beneficial ownership of our Ordinary Shares as of March 10, 2026 based on information obtained from the persons
named below, with respect to the beneficial ownership of Ordinary Shares, by:
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|
each person known by us to be the beneficial owner of more than 5% of our outstanding Ordinary Shares; |
|
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|
each of our executive officers and directors that beneficially owns our Ordinary Shares; and | |
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|
all our executive officers and directors as a group. | |
In the table below, percentage
ownership is based on 20,232,813 shares of our Ordinary Shares, consisting of (i) 14,482,813 Class A Ordinary Shares and (ii) 5,750,000
Class B Ordinary Shares, issued and outstanding as of March 10, 2026. On all matters to be voted upon, except for (x) the appointment
and removal of directors of the Board and (y) continuing our Company in a jurisdiction outside the Cayman Islands, holders of the Class
A Ordinary Shares and Class B Ordinary Shares vote together as a single class, unless otherwise required by applicable law. Only holders
of Class B Ordinary Shares have the right to vote on the appointment and removal of directors prior to the completion of our initial Business
Combination and on a vote to continue our Company in a jurisdiction outside of the Cayman Islands. Currently, all of the Class B Ordinary
Shares are convertible into Class A Ordinary Shares on a one-for-one basis.
41
Unless otherwise indicated,
we believe that all persons named in the table have sole voting and investment power with respect to all Ordinary Shares beneficially
owned by them. The following table does not reflect record or beneficial ownership of the Private Placement Warrants as such Private Placement
Warrants are not exercisable within 60 days of the date of this Report.
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|
Class A Ordinary Shares |
|
|
Class B Ordinary Shares |
|
|
Approximate Percentage |
| |
|
Name and Address of Beneficial Owner |
|
Number of Shares Beneficially
Owned |
|
|
Approximate Percentage of Class |
|
|
Number of Shares Beneficially
Owned |
|
|
Approximate Percentage of Class |
|
|
of Total Outstanding Ordinary Shares |
| |
|
Collective Acquisition Sponsor LLC (1)(2)(3) |
|
|
- |
|
|
|
- |
|
|
|
4,475,000 |
|
|
|
77.8 |
% |
|
|
- |
| |
|
Elliot Richmond (1)(2)(3) |
|
|
- |
|
|
|
- |
|
|
|
4,475,000 |
|
|
|
77.8 |
% |
|
|
- |
| |
|
David Bailin (1) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
| |
|
Jeremy Sziklay (1) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
| |
|
Ben Coates (4) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
| |
|
Jeron Smith (4) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
| |
|
Cecil White III (4) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
All officers and directors as a group (five person) |
|
|
- |
|
|
|
- |
|
|
|
5,750,000 |
|
|
|
77.8 |
% |
|
|
28.4 |
% | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Other 5% Shareholders |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Dune Acquisition Holdings II LLC (2)(4)(5) |
|
|
- |
|
|
|
- |
|
|
|
1,275,000 |
|
|
|
22.2 |
% |
|
|
6.30 |
% | |
|
Magnetar Parties (6) |
|
|
850,000 |
|
|
|
5.87 |
% |
|
|
- |
|
|
|
- |
|
|
|
4.20 |
% | |
|
Aristeia Capital, L.L.C. (7) |
|
|
1,100,000 |
|
|
|
7.60 |
% |
|
|
- |
|
|
|
- |
|
|
|
5.44 |
% | |
|
Tenor Parties (8) |
|
|
1,000,000 |
|
|
|
6.90 |
% |
|
|
- |
|
|
|
- |
|
|
|
4.94 |
% | |
|
(1) |
The principal business address for this shareholder is c/o Collective Acquisition
Sponsor LLC, 12955 Biscayne Boulevard Suite 200 PMB 616, Miami, Florida 33181. | |
|
(2) |
Interests shown consist solely of Founder Shares, classified as Class B Ordinary
Shares. Such shares will (unless otherwise provided in our initial Business Combination agreement) automatically convert into Class A
Ordinary Shares concurrently with or immediately following the consummation of our initial Business Combination, and may be converted
at any time prior to our initial Business Combination, at the option of the holder, on a one-for-one basis, subject to adjustment. | |
|
(3) |
Collective Acquisition Sponsor LLC, the New Sponsor, is the record holder of
such Class B Ordinary Shares. Mr. Richmond is the sole managing member of the New Sponsor and holds voting and investment discretion with
respect to the Class B Ordinary Shares held of record by the New Sponsor. Mr. Richmond disclaims any beneficial ownership of the securities
held by the New Sponsor other than to the extent of any pecuniary interest he may have therein, directly or indirectly. | |
|
(4) |
The principal business address for this shareholder is c/o Dune Acquisition
Holdings II LLC, 700 S.Rosemary Avenue, Suite 204, West Palm Beach, FL33401. | |
42
|
(5) |
Dune Acquisition Holdings II LLC, the Old Sponsor, is the record holder of such
Class B Ordinary Shares. Mr. Glatt is the sole managing member of the Old Sponsor and holds voting and investment discretion with respect
to the Class B Ordinary Shares held of record by the Old Sponsor. Mr. Glatt disclaims any beneficial ownership of the securities held
by the Old Sponsor other than to the extent of any pecuniary interest he may have therein, directly or indirectly. | |
|
(6) |
The reported position is according to a Schedule 13G filed with the SEC on August
8, 2025 by (i) Magnetar Financial LLC, a Delaware limited liability company (Magnetar Financial), (ii) Magnetar Capital
Partners LP, a Delaware limited partnership (Magnetar Capital Partners), (iii) Supernova Management LLC, a Delaware limited
liability company (Supernova Management), and (iv) David J. Snyderman, a citizen of the United States (Mr. Snyderman,
collectively with Magnetar Financial, Magnetar Capital Partners and Supernova Management, the Magnetar Parties), in connection
with Public Shares held for the following funds (collectively, the Magnetar Funds): (a) Magnetar Constellation Master Fund, Ltd,
Magnetar Xing He Master Fund Ltd, Magnetar SC Fund Ltd, Purpose Alternative Credit Fund Ltd, all Cayman Islands exempted companies and
(b) Magnetar Structured Credit Fund, LP, a Delaware limited partnership and Magnetar Alpha Star Fund LLC, Magnetar Lake Credit Fund LLC,
Magnetar Waterfront Series A LLC, all Delaware limited liability companies. Magnetar Financial serves as the investment adviser to the
Magnetar Funds, and as such, Magnetar Financial exercises voting and investment power over the Public Shares held for the Magnetar Funds
accounts. Magnetar Capital Partners serves as the sole member and parent holding company of Magnetar Financial. Supernova Management is
the general partner of Magnetar Capital Partners. The manager of Supernova Management is Mr. Snyderman. The principal business address
of each of the Magnetar Parties is 1603 Orrington Avenue, 13th Floor, Evanston, Illinois 60201. | |
|
(7) |
The reported position is according to a Schedule 13G filed with the SEC on August
14, 2025. The principal business address of Aristeia Capital, L.L.C. is One Greenwich Plaza, Suite 300, Greenwhich, Connecticut 06830. | |
|
(8) |
The reported position is according to a Schedule 13G filed with the SEC on May
30, 2025 by (i) Tenor Capital Management Company, L.P., a Delaware limited partnership (Tenor Capital), (ii) Tenor Opportunity
Master Fund, Ltd., a Cayman Islands exempted company (Tenor Opportunity), (iii) Robin Shah, a citizen of the United States
(Mr. Shah, collectively with Tenor Capital and Tenor Opportunity, the Tenor Parties), in connection with Public
Shares held by Tenor Opportunity. Tenor Capital serves as the investment manager to the Opportunity. Mr. Shah serves as the managing member
of Tenor Management GP, LLC, the general partner of Tenor Capital. By virtue of these relationships, the Tenor Parties may be deemed to
have shared voting and dispositive power with respect to the Public Shares owned directly by the Tenor Opportunity.The principal
business address of each of the Tenor Parties is 810 Seventh Avenue, Suite 1905, New York, New York 10019. | |
Securities Authorized
for Issuance under Equity Compensation Plans
None.
Changes in Control
None.
Item
13. Certain Relationships and Related Transactions, and Director Independence.
On
September 27, 2024, the Old Sponsor paid $25,000 to cover offering costs in consideration of 6,900,000 Founder Shares. On April22,
2025, the number of outstanding founder shares was reduced to 5,750,000. Following and as a result of the reduction of Founder Shares,
the Old Sponsor is deemed to have purchased the Founder Shares for $0.004 per share.
The
number of Founder Shares outstanding was determined based on the expectation that the total size of the Initial Public Offering would
be a maximum of 14,375,000 Units if the Over-Allotment Option was exercised in full, and therefore that such Founder Shares would represent
approximately 28.4% of the issued and outstanding Ordinary Shares after the Initial Public Offering. Up to 750,000 Founder Shares were
to be surrendered for no consideration depending on the extent to which the Over-Allotment Option was exercised. On May 8, 2025, the Over-Allotment
Option was exercised in full and such Founder Shares are no longer subject to forfeiture.
43
Pursuant
to the Private Placement Warrants Purchase Agreement, the Old Sponsor purchased an aggregate of 2,000,000 Private Placement Warrants,
at a price of $1.00 per Private Placement Warrant, for an aggregate purchase price of $2,000,000 in the Private Placement that closed
simultaneously with our Initial Public Offering. Each Private Placement Warrant entitles the holder thereof to purchase one Class A Ordinary
Share at $11.50 per share. The Private Placement Warrants are identical to the Public Warrants included as part of the Units sold in our
Initial Public Offering, subject to certain limited exceptions as described in the IPO Registration Statement, including certain transfer
restrictions. If we do not complete our initial Business Combination within the Combination Period, the Private Placement Warrants will
expire worthless. The Private Placement Warrants (and underlying securities) are identical to the Public Warrants sold in the Initial
Public Offering.
On January 30, 2026, we, the
New Sponsor, the Old Sponsor, the Sponsor Member, the Non-Managing Members, and the Non-Managing Investors entered into the New Sponsor
Purchase Agreement pursuant to which New Sponsor has agreed to purchase from the Sponsor the Transferred Interest, an aggregate of (i)
4,475,000 Class B Ordinary Shares and (ii) 1,000,000 Private Placement Warrants, for an aggregate purchase price of $2,000,000.
Pursuant to the Purchase Agreement,
if a definitive business combination agreement is not entered into by the Option Date, May 7, 2026, the Sponsor Member shall be entitled
to the Repurchase Right, to repurchase the Transferred Interests from the New Sponsor for a purchase price of $2,000,000. The Repurchase
Right may be exercised only during the Option Period, commencing on the Option Date and ending at 5:00 p.m., New York City time, on the
date that is five (5) days after the Option Date, by delivery of written notice of exercise to the New Sponsor in accordance with the
terms set forth in the Purchase Agreement. If the Sponsor Member does not exercise the Repurchase Right within the Option Period, the
Repurchase Right shall automatically terminate and be of no further force or effect.
Prior
to or in connection with the completion of our initial Business Combination, there may be payment by us to each of the New Sponsor Parties,
and our advisor, or our or their respective affiliates, of a finders fee, advisory fee, consulting fee or success fee for any services
they render in order to effectuate the completion of our initial Business Combination, which, if made prior to the completion of our initial
Business Combination, will be paid from funds held outside the Trust Account.
Pursuant to the Administrative
Services Agreement, commenced on May 6, 2025, through the earlier of consummation of the initial Business Combination and our liquidation,
we pay an aggregate of $15,000 per month for office space, utilities, and secretarial and administrative support. For the period from
September 13, 2024 (inception) through December 31, 2024, we incurred and paid $20,000 in fees for these services pursuant to the Administrative
Services Agreement. Pursuant to the New Sponsor Purchase Agreement and the Joinder to the Administrative Services Agreement, such monthly
payments are being made to the New Sponsor.
On
September 30, 2024, the Old Sponsor agreed to loan us an aggregate of up to $150,000 to cover expenses related to the Initial Public Offering
as pursuant to the IPO Promissory Note. Such IPO Promissory Note was amended and restated on February 27, 2025. This loan was non-interest-bearing
and payable on the earlier of June 30, 2025, or the date on which we consummated the Initial Public Offering. We repaid all the outstanding
balance of the IPO Promissory Note at the closing of the Initial Public Offering on November 18, 2024. At the time of the Initial Public
Offering, the Company had borrowed $150,000 under the IPO Promissory Note. Such IPO Promissory Note was repaid in full at the close of
the Initial Public Offering and borrowings under the IPO Promissory Note are no longer allowed.
In
addition, in order to finance transaction costs in connection with an intended initial Business Combination, the New Sponsor or an affiliate
of the New Sponsor or certain of our officers and directors may, but are not obligated to, loan us Working Capital Loans as may be required
on a non-interest basis. If we complete an initial Business Combination, we would repay such Working Capital Loans unless they are converted
into warrants, as described below. 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 Working Capital Loans, 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 warrants of the post-Business Combination entity at
a price of $1.00 per warrant at the option of the lender. Such warrants would be identical to the Private Placement Warrants. Except as
set forth above, the terms of such Working Capital Loans, if any, have not been determined and no written agreements exist with respect
to such Working Capital Loans. Prior to the completion of our initial Business Combination, we do not expect to seek loans from parties
other than the New Sponsor or an affiliate of the New 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.
44
Each
of the New Sponsor Parties, or any of their respective affiliates, are 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 reviews, on a quarterly basis, all payments that were made to each of the New Sponsor Parties and to their respective
affiliates. Any such payments prior to an initial Business Combination, including any of the foregoing payments to the New Sponsor, repayments
of loans from the New Sponsor or repayments of Working Capital Loans, have been and will continue to be made using funds held outside
the Trust Account.
After
our initial Business Combination, members of our Management Team who remain with us may be paid consulting, management or other fees from
the combined company with any and all amounts being fully disclosed to our shareholders, to the extent then known, in the proxy solicitation
or tender offer materials, as applicable, furnished to our shareholders. It is unlikely the amount of such compensation will be known
at the time of distribution of such tender offer materials or at the time of a general meeting held to consider our initial Business Combination,
as applicable, as it will be up to the directors of the post-combination business to determine executive and director compensation.
Pursuant to the Registration
Rights Agreement, the holders of the (i) Founder Shares, (ii) Private Placement Warrants and (iii) warrants that may be issued upon conversion
of Working Capital Loans (and in each case holders of their underlying securities, as applicable) have registration rights to require
us to register a sale of any of our securities held by them and any other securities of our Company acquired by them prior to the consummation
of our initial Business Combination (in the case of the Founder Shares, only after conversion to our Class A Ordinary Shares). The holders
of these securities are entitled to make up to three demands, excluding short form demands, that we register such securities. In addition,
the holders have certain piggy-back registration rights with respect to registration statements filed subsequent to our
completion of our initial Business Combination. Notwithstanding anything to the contrary, Clear Street may only make a demand on one occasion
and only during the five-year period beginning on the date the sales for the Initial Public Offering commenced. In addition, Clear Street
may participate in a piggy-back registration only during the seven-year period beginning on the date the sales for the Initial
Public Offering commenced. We will bear the expenses incurred in connection with the filing of any such registration statements.
The Old Sponsor Parties and
the New Sponsor Parties have also entered into the 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 Combination Period. However, if any of the Old Sponsor Parties or the New Sponsor Parties acquired Public Shares in or after
the Initial Public Offering, they will be entitled to liquidating distributions from the Trust Account with respect to such Public Shares
if we fail to complete our initial Business Combination within the Combination Period.
Additionally, pursuant to
the Letter Agreement, each of the New Sponsor Parties will not propose any amendment to our Amended and Restated Memorandum (i) 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 Combination Period or (ii) 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 and not previously released to us to pay our taxes, if any, divided by the number of then outstanding Public Shares.
Director Independence
The Nasdaq Rules 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 Messrs. Coates, Smith and White are independent directors as defined
in the Nasdaq Rules and applicable SEC rules. Our independent directors have regularly scheduled meetings at which only independent directors
are present.
45
Item
14*.* Principal Accountant Fees and Services.
The firm of Grassi&
Co., CPAs, P.C, acts as our independent registered public accounting firm. The following is a summary of fees paid to Grassi&
Co., CPAs, P.C for services rendered.
**
Audit Fees
Audit fees consist of fees
for professional services rendered for the audit of our year-end financial statements and services that are normally provided by Grassi&
Co., CPAs, P.C in connection with regulatory filings. The aggregate fees of Grassi& Co., CPAs, P.C for professional services
rendered for the audit of our annual financial statements, review of the financial information included in our Forms 10-Q for the respective
periods and other required filings with the SEC for the year ended December 31, 2025 and for the period from September 13, 2024 (Inception)
through December 31, 2024 totaled approximately $62,678 and $20,550, respectively. The above amounts include interim procedures and audit
fees, as well as attendance at Audit Committee meetings.
**
Audit-Related
Fees
Audit-related fees consist
of fees billed for assurance and related services that are reasonably related to performance of the audit or review of our financial statements
and are not reported under Audit Fees. These services include attest services that are not required by statute or regulation
and consultations concerning financial accounting and reporting standards. We did not pay Grassi& Co., CPAs, P.C for any audit-related
fees for the year ended December 31, 2025 and for the period from September 13, 2024 (Inception) through December 31, 2024.
Tax Fees
Tax fees consist of fees billed
for professional services relating to tax compliance, tax planning and tax advice. We did not pay Grassi& Co., CPAs, P.C for
tax services, planning or advice for the year ended December 31, 2025 and for the period from September 13, 2024 (Inception) through December
31, 2024.
**
All Other Fees
All other fees consist of
fees billed for all other services. We did not pay Grassi& Co., CPAs, P.C for any other services for the year ended December
31, 2025 and for the period from September 13, 2024 (Inception) through December 31, 2024.
Pre-Approval
Policy
Our Audit Committee was formed
upon the consummation of our Initial Public Offering. As a result, the Audit Committee did not pre-approve all of the foregoing services,
although any services rendered prior to the formation of our Audit Committee were approved by our Board of Directors. Since the formation
of our Audit Committee, and on a going-forward basis, the Audit Committee has and will pre-approve all auditing services and permitted
non-audit services performed and to be performed for us by our auditors, including the fees and terms thereof (subject to the de minimis
exceptions for non-audit services described in the Exchange Act which are approved by the Audit Committee prior to the completion of the
audit).
46
PART
IV
Item
15. Exhibit and Financial Statement Schedules.
|
(a) |
The following documents are filed as part of this Report: | |
|
(1) |
Financial Statement | |
|
|
|
Page | |
|
Report of
Independent Registered Public Accounting Firm(PCAOB ID Number 606) |
|
F-2 | |
|
Balance Sheets
as of Dember 31, 2025 and 2024 |
|
F-3 | |
|
Statements
of Operations for the year ended December 31, 2025 and for the period from September 13, 2024 (Inception) through December 31, 2024 |
|
F-4 | |
|
Statements
of Changes in Shareholders Deficit for the year ended December 31, 2025 and for the period from September 13, 2024 (Inception)
through December 31, 2024 |
|
F-5 | |
|
Statements
of Cash Flows for the year ended December 31, 2025 and for the period from September 13, 2024 (Inception) through December 31, 2024 |
|
F-6 | |
|
Notes to Financial
Statements |
|
F-7 to F-24 | |
|
(2) |
Financial Statement Schedules | |
All financial statement schedules
are omitted because they are not applicable or the amounts are immaterial and not required, or the required information is presented in
the financial statements and notes thereto beginning on page F-1 of this Report.
|
(3) |
Exhibits | |
We hereby file as part of
this Report the exhibits listed in the attached Exhibit Index. Exhibits that are incorporated herein by reference can be inspected on
the SEC website at www.sec.gov.
Item
16. Form 10-K Summary.
Omitted at our Companys option.
47
DUNE
ACQUISITION CORPORATION II
INDEX
TO FINANCIAL STATEMENTS
|
Report
of Independent Registered Public Accounting Firm(PCAOB ID Number 606) |
F-2 | |
|
Financial Statements: |
| |
|
Balance Sheets
as of Dember 31, 2025 and 2024 |
F-3 | |
|
Statements of
Operations for the year ended December 31, 2025 and for the period from September 13, 2024 (Inception) through December 31, 2024 |
F-4 | |
|
Statements of
Changes in Shareholders Deficit for the year ended December 31, 2025 and for the period from September 13, 2024 (Inception) through
December 31, 2024 |
F-5 | |
|
Statements of
Cash Flows for the year ended December 31, 2025 and for the period from September 13, 2024 (Inception) through December 31, 2024 |
F-6 | |
|
Notes to Financial
Statements |
F-7 to F-24 | |
F-1
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and
Stockholders
of Dune Acquisition Corporation II
Opinion on the
Financial Statements
We have audited the accompanying balance sheets
of Dune Acquisition Corporation II (the Company) as of December 31, 2025 and 2024 and the related statements of operations, shareholders
deficit, and cash flows for the years then ended 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 2024, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally
accepted in the United States of America.
Explanatory ParagraphGoing
Concern
The accompanying financial statements have been
prepared assuming that the Company will continue as a going concern. As more fully described in Note1 to the financial statements,
the Company does not have sufficient cash to sustain its operations and the Companys ability to execute its business plan is dependent
upon obtaining additional financing and completion of a business combination. These conditions raise substantial doubt about the Companys
ability to continue as a going concern. Managements plans in regard to these matters are also described in Note1. The financial
statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These financial statements are the responsibility
of the Companys management. Our responsibility is to express an opinion on the Companys financial statements based on our
audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are
required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and
regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the
standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial
statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged
to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding
of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Companys
internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess
the risks of material misstatement of the 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 audits 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 audits provide a reasonable basis for our opinion.
*/s/ GRASSI
& CO., CPAs, P.C.*
GRASSI & CO., CPAs, P.C.
We have served as the Companys auditor
since 2024.
Glastonbury,
Connecticut
March 13, 2026
F-2
DUNE
ACQUISITION CORPORATION II
BALANCE
SHEETS
|
|
|
December 31, 2025 |
|
|
December31, 2024 |
| |
|
|
|
|
|
|
|
| |
|
ASSETS |
|
|
|
|
|
| |
|
Current assets |
|
|
|
|
|
| |
|
Cash |
|
$ |
365,751 |
|
|
$ |
13,818 |
| |
|
Prepaid expenses |
|
|
21,265 |
|
|
|
|
| |
|
Total current assets |
|
|
387,016 |
|
|
|
13,818 |
| |
|
Deferred offering costs |
|
|
|
|
|
|
69,160 |
| |
|
Marketable securities held in Trust Account |
|
|
147,910,775 |
|
|
|
|
| |
|
TOTAL ASSETS |
|
$ |
148,297,791 |
|
|
$ |
82,978 |
| |
|
|
|
|
|
|
|
|
|
| |
|
LIABILITIES AND SHAREHOLDERS DEFICIT |
|
|
|
|
|
|
|
| |
|
Current liabilities |
|
|
|
|
|
|
|
| |
|
Accounts payable and accrued expenses |
|
$ |
22,477 |
|
|
$ |
6,230 |
| |
|
Accrued offering costs |
|
|
75,000 |
|
|
|
13,450 |
| |
|
Promissory note related party |
|
|
|
|
|
|
75,000 |
| |
|
Total current liabilities |
|
|
97,477 |
|
|
|
94,680 |
| |
|
Deferred underwriting fee payable |
|
|
5,750,000 |
|
|
|
|
| |
|
Total Liabilities |
|
|
5,847,477 |
|
|
|
94,680 |
| |
|
|
|
|
|
|
|
|
|
| |
|
Commitments and Contingencies (Note 6) |
|
|
|
|
|
|
|
| |
|
Class A ordinary shares subject to possible redemption 14,375,000
shares at $10.29
per share redemption value |
|
|
147,910,775 |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
| |
|
Shareholders Deficit |
|
|
|
|
|
|
|
| |
|
Preference shares, $0.0001
par value; 1,000,000
shares authorized; none
issued or outstanding |
|
|
|
|
|
|
|
| |
|
Class A ordinary shares, $0.0001
par value; 200,000,000
shares authorized; 107,813
and no shares issued and outstanding
(excluding 14,375,000 and no shares subject to possible redemption) at December 31, 2025 and 2024, respectively |
|
|
11 |
|
|
|
|
| |
|
Class B ordinary shares, $0.0001
par value; 20,000,000
shares authorized; 5,750,000
shares issued and outstanding at December 31, 2025 and 2024, respectively (1)(2) |
|
|
575 |
|
|
|
575 |
| |
|
Additional paid-in capital |
|
|
|
|
|
|
24,425 |
| |
|
Accumulated deficit |
|
|
(5,461,047 |
) |
|
|
(36,702 |
) | |
|
Total Shareholders
Deficit |
|
|
(5,460,461 |
) |
|
|
(11,702 |
) | |
|
TOTAL LIABILITIES AND SHAREHOLDERS
DEFICIT |
|
$ |
148,297,791 |
|
|
$ |
82,978 |
| |
|
(1) |
At December 31, 2024, included up to 750,000
Class B ordinary shares subject to forfeiture if the over-allotment option was not exercised in fully by the underwriters (see Note 5).
As a result of the underwriters election to fully exercise their over-allotment option on May 8, 2025, the 750,000
Class B ordinary shares are no longer subject to forfeiture. | |
|
(2) |
On April, 22, 2025, the Sponsor surrendered 1,150,000
Class B ordinary shares, where the number of outstanding founder shares was reduced to 5,750,000
in the aggregate. All share and per share data have been retrospectively presented (see Note 5). | |
The accompanying notes are an integral
part of these financial statements.
F-3
DUNE
ACQUISITION CORPORATION II
STATEMENTS
OF OPERATIONS
|
|
|
For the Year Ended December 31, 2025 |
|
|
For the Period from September13,
2024 (Inception) through December 31, 2024 |
| |
|
Formation and general and administrative
costs |
|
$ |
451,915 |
|
|
$ |
36,702 |
| |
|
Loss from operations |
|
|
(451,915 |
) |
|
|
(36,702 |
) | |
|
|
|
|
|
|
|
|
|
| |
|
OTHER INCOME |
|
|
|
|
|
|
|
| |
|
Income earned on marketable securities held
in Trust Account |
|
|
3,801,400 |
|
|
|
|
| |
|
Total other income |
|
|
3,801,400 |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
| |
|
NET INCOME (LOSS) |
|
$ |
3,349,485 |
|
|
$ |
(36,702 |
) | |
|
|
|
|
|
|
|
|
|
| |
|
Basic weighted average shares outstanding,
Class A redeemable ordinary shares |
|
|
9,373,288 |
|
|
|
|
| |
|
Basic net income per
share, Class A redeemable ordinary shares |
|
$ |
0.22 |
|
|
$ |
|
| |
|
|
|
|
|
|
|
|
|
| |
|
Diluted weighted average shares outstanding,
Class A redeemable ordinary shares |
|
|
9,373,288 |
|
|
|
|
| |
|
Diluted net income per
share, Class A redeemable ordinary shares |
|
$ |
0.22 |
|
|
$ |
|
| |
|
|
|
|
|
|
|
|
|
| |
|
Basic weighted
average shares outstanding, Class A and Class B non-redeemable ordinary shares(1)(2) |
|
|
5,559,341 |
|
|
|
5,000,000 |
| |
|
Basic net income (loss)
per share, Class A and Class B non-redeemable ordinary shares |
|
$ |
0.22 |
|
|
$ |
(0.01 |
) | |
|
|
|
|
|
|
|
|
|
| |
|
Diluted weighted
average shares outstanding, Class A and Class B non-redeemable ordinary shares(2) |
|
|
5,820,300 |
|
|
|
5,000,000 |
| |
|
Diluted net income (loss)
per share, Class A and Class B non-redeemable ordinary shares |
|
$ |
0.22 |
|
|
$ |
(0.01 |
) | |
|
(1) |
Excluded an aggregate of up to 750,000
Class B ordinary shares subject to forfeiture if the over-allotment option was not exercised in fully by the underwriters at December
31, 2024 (see Note 5). As a result of the underwriters election to fully exercise their over-allotment option on May 8, 2025, the
750,000
Class B ordinary shares are no longer subject to forfeiture. | |
|
(2) |
On April 22, 2025, the Sponsor surrendered 1,150,000
Class B ordinary shares, where the number of outstanding founder shares was reduced to 5,750,000
in the aggregate. All share and per share data have been retrospectively presented. | |
The accompanying notes are an integral
part of these financial statements.
F-4
DUNE
ACQUISITION CORPORATION II
STATEMENTS
OF CHANGES IN SHAREHOLDERS DEFICIT
FOR
THE YEAR ENDED DECEMBER 31, 2025 AND
FOR
THE PERIOD FROM SEPTEMBER 13, 2024 (INCEPTION) THROUGH DECEMBER 31, 2024
|
|
|
Class A Ordinary Shares |
|
|
Class B Ordinary Shares |
|
|
Additional Paid-in |
|
|
Accumulated |
|
|
Total Shareholders |
| |
|
|
|
Shares |
|
|
Amount |
|
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
Deficit |
|
|
Deficit |
| |
|
Balance September 13, 2024 (Inception) |
|
|
|
|
|
$ |
|
|
|
|
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Issuance of Class B ordinary shares to Sponsor |
|
|
|
|
|
|
|
|
|
|
5,750,000 |
|
|
|
575 |
|
|
|
24,425 |
|
|
|
|
|
|
|
25,000 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Net loss |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(36,702 |
) |
|
|
(36,702 |
) | |
|
Balance
December 31, 2024(1)(2) |
|
|
|
|
|
|
|
|
|
|
5,750,000 |
|
|
|
575 |
|
|
|
24,425 |
|
|
|
(36,702 |
) |
|
|
(11,702 |
) | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Issuance of Representative Shares |
|
|
107,813 |
|
|
|
11 |
|
|
|
|
|
|
|
|
|
|
|
(11 |
) |
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Sale of 2,000,000
Private Placement Warrants |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,000,000 |
|
|
|
|
|
|
|
2,000,000 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Fair value of Public Warrants at issuance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
970,313 |
|
|
|
|
|
|
|
970,313 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Allocated value of transaction costs to Class A shares |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(49,402 |
) |
|
|
|
|
|
|
(49,402 |
) | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Accretion for Class A ordinary shares to redemption amount |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2,945,325 |
) |
|
|
(8,773,830 |
) |
|
|
(11,719,155 |
) | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Net income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,349,485 |
|
|
|
3,349,485 |
| |
|
Balance December 31, 2025 |
|
|
107,813 |
|
|
$ |
11 |
|
|
|
5,750,000 |
|
|
$ |
575 |
|
|
$ |
|
|
|
$ |
(5,461,047 |
) |
|
$ |
(5,460,461 |
) | |
|
(1) |
Class B ordinary shares included an aggregate of 750,000
shares subject to forfeiture if the over-allotment option was not exercised fully by the underwriters (see Note 5). As a result of the
underwriters election to fully exercise their over-allotment option on May 8, 2025, the 750,000
Class B ordinary shares are no longer subject to forfeiture. | |
|
(2) |
On April 22, 2025, the Sponsor surrendered 1,150,000
Class B ordinary shares, where the number of outstanding founder shares was reduced to 5,750,000
in the aggregate. All share and per share data have been retrospectively presented (see Note 5). | |
The accompanying notes are an integral part
of these financial statements.
F-5
DUNE
ACQUISITION CORPORATION II
STATEMENTS
OF CASH FLOWS
|
|
|
For the Year Ended December 31, |
|
|
For the Period from September13, 2024 (Inception)
through December 31, |
| |
|
|
|
2025 |
|
|
2024 |
| |
|
Cash Flows from Operating Activities: |
|
|
|
|
|
| |
|
Net income (loss) |
|
$ |
3,349,485 |
|
|
$ |
(36,702 |
) | |
|
Adjustments to reconcile net income (loss) to net cash used in operating activities: |
|
|
|
|
|
|
|
| |
|
Interest earned on marketable securities held in Trust Account |
|
|
(3,801,400 |
) |
|
|
|
| |
|
Payment of operating costs through promissory note |
|
|
23,500 |
|
|
|
|
| |
|
Payment of operating costs through advances from related party |
|
|
4,320 |
|
|
|
|
| |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
| |
|
Prepaid expenses |
|
|
(21,265 |
) |
|
|
|
| |
|
Accounts payable and accrued expenses |
|
|
16,247 |
|
|
|
6,230 |
| |
|
Net cash used in operating activities |
|
|
(429,113 |
) |
|
|
(30,472 |
) | |
|
|
|
|
|
|
|
|
|
| |
|
Cash Flows from Investing Activities: |
|
|
|
|
|
|
|
| |
|
Investment of cash in Trust Account |
|
|
(144,109,375 |
) |
|
|
|
| |
|
Net cash used in investing activities |
|
|
(144,109,375 |
) |
|
|
|
| |
|
|
|
|
|
|
|
|
|
| |
|
Cash Flows from Financing Activities: |
|
|
|
|
|
|
|
| |
|
Proceeds from issuance of Class B ordinary shares to Sponsor |
|
|
|
|
|
|
25,000 |
| |
|
Proceeds from sale of Units, net of underwriting discounts paid |
|
|
143,200,000 |
|
|
|
|
| |
|
Proceeds from sale of Private Placement Warrants |
|
|
2,000,000 |
|
|
|
|
| |
|
Repayment of advances from related party |
|
|
(4,320 |
) |
|
|
|
| |
|
Proceeds from promissory note related party |
|
|
51,500 |
|
|
|
75,000 |
| |
|
Repayment of promissory noterelated party |
|
|
(150,000 |
) |
|
|
|
| |
|
Payment of offering costs |
|
|
(206,759 |
) |
|
|
(55,710 |
) | |
|
Net cash provided by financing activities |
|
|
144,890,421 |
|
|
|
44,290 |
| |
|
|
|
|
|
|
|
|
|
| |
|
Net Change in Cash |
|
|
351,933 |
|
|
|
13,818 |
| |
|
Cash Beginning of period |
|
|
13,818 |
|
|
|
|
| |
|
Cash End of period |
|
$ |
365,751 |
|
|
$ |
13,818 |
| |
|
|
|
|
|
|
|
|
|
| |
|
Non-Cash investing and financing activities: |
|
|
|
|
|
|
|
| |
|
Offering costs included in accrued offering costs |
|
$ |
75,000 |
|
|
$ |
13,450 |
| |
|
Issuance of Class A Representative Shares |
|
$ |
11 |
|
|
$ |
|
| |
|
Accretion of Class A ordinary shares to redemption value |
|
$ |
11,719,155 |
|
|
$ |
|
| |
|
Deferred underwriting fee payable |
|
$ |
5,750,000 |
|
|
$ |
|
| |
The accompanying notes are an integral
part of these financial statements.
F-6
DUNE
ACQUISITION CORPORATION II
NOTES TO FINANCIAL
STATEMENTS
DECEMBER 31, 2025
NOTE 1ORGANIZATION
AND BUSINESS OPERATIONS
Dune Acquisition CorporationII (the Company)
is a blank check company incorporated as a Cayman Islands exempted company on September13, 2024. The Company was incorporated 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). The Company has not selected any specific Business Combination
target and the Company has not, nor has anyone on its behalf, engaged in any substantive discussions, directly or indirectly, with any
Business Combination target with respect to an initial Business Combination with the Company.
As of December 31, 2025, the Company had not commenced
any operations. All activity for the period from September13, 2024 (inception) through December 31, 2025 relates to the Companys
formation, initial public offering (the Initial Public Offering), which is described below, and subsequent to the Initial
Public Offering, identifying a target company for a Business Combination. The Company will not generate any operating revenues until after
the completion of its initial Business Combination, at the earliest. The Company generates non-operating income on cash and cash equivalents
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 Companys Sponsor is Dune Acquisition
HoldingsII LLC (the Sponsor). The registration statement for the Companys Initial Public Offering was declared
effective on May 6, 2025. On May 8, 2025, the Company consummated the Initial Public Offering of 14,375,000
units (the Units), which includes the full exercise by the underwriters of their over-allotment option in the amount of
1,875,000
Units, at $10.00
per Unit, generating gross proceeds of $143,750,000.
Each Unit consists of one
Class A ordinary share (Public Share) and three-quarters of one
redeemable warrant (Public Warrant). Each whole warrant entitles the holder to purchase one Class A ordinary share at a
price of $11.50
per share. Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of 2,000,000
Private Placement Warrants (the Private Placement Warrants) to the Sponsor, at a price of $1.00
per warrant, generating gross proceeds of $2,000,000.
The Companys management has broad discretion with respect to the specific application of the net proceeds of the Initial Public
Offering and the Private Placement Warrants, although substantially all of the net proceeds are intended to be generally applied toward
consummating a Business Combination (less deferred underwriting commissions).
Transaction costs amounted to $6,637,469,
consisting of $550,000
of cash underwriting fees, $5,750,000
of deferred underwriting fees and $337,469
of other offering costs.
The Companys Business Combination must
be with one or more target businesses that together have a fair market value equal to at least 80%
of the net balance in the Trust Account (as defined below) (excluding the amount of deferred underwriting discounts held and taxes payable
on the income earned on the Trust Account) at the time of the signing of an agreement to enter into a Business Combination. However, the
Company will only complete a Business Combination if the post-Business Combination company owns or acquires 50%
or more of the outstanding voting securities of the target or is otherwise not required to register as an investment company under the
Investment Company Actof1940, as amended (the Investment Company Act). There is no assurance that the Company
will be able to successfully effect a Business Combination.
F-7
DUNE ACQUISITION
CORPORATION II
NOTES TO FINANCIAL
STATEMENTS
DECEMBER 31, 2025
NOTE 1ORGANIZATION
AND BUSINESS OPERATIONS (cont.)
Following the closing of the Initial Public Offering
on May 8, 2025, an amount of $144,109,375
($10.025
per Unit) from the net proceeds of the sale of the Units and the sale of the Private Placement Warrants was held in a Trust Account (the
Trust Account) and initially will be 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, 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 the Company might be deemed to be an investment company
for purposes of the Investment Company Act, which risk increases the longer that it 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 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. Except with respect to interest earned on the funds held in the Trust
Account that may be released to the Company for taxes payable or up to $100,000
of interest to pay dissolution expenses, the proceeds from the Initial Public Offering 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,
(ii)the redemption of the Companys public shares if the Company is unable to complete the initial Business Combination within
15months from the closing of the Initial Public Offering or by such earlier liquidation date as the board of directors may approve
(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.
The Company will provide the Companys
public shareholders with the opportunity to redeem, regardless of whether they abstain, vote for, or against, the Companys initial
business combination, all or a portion of their public shares upon the completion of the initial Business Combination either (i)in
connection with a general meeting called to approve the initial 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 proposed initial Business Combination or
conduct a tender offer will be made by the Company, solely in its discretion. The public shareholders will be entitled to redeem their
shares at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account calculated as of twobusinessdays
prior to the consummation of the initial Business Combination, including interest earned on the funds held in the Trust Account (which
interest shall be net of taxes payable) and not previously released to the Company, divided by the number of then outstanding public shares,
subject to the limitations. The amount in the Trust Account is initially $10.025
per public share.
The ordinary shares subject to redemption will
be recorded at a redemption value and classified as temporary equity upon the completion of the Initial Public Offering, in accordance
with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic480, Distinguishing
Liabilities from Equity.
The Company will have only the duration of the
Completion Window to complete the initial Business Combination. However, if the Company is unable to complete its initial Business Combination
within the Completion Window, the Company will (i)cease all operations except for the purpose of winding up, (ii)as promptly
as reasonably possible but not more than tenbusinessdays thereafter (and subject to lawfully available funds therefor), redeem
the public shares, at a per-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 payable and less up to $100,000
of interest to pay dissolution expenses), divided by the number of then-outstanding public shares, which redemption will completely extinguish
public shareholders rights as shareholders (including the right to receive further liquidating distributions, if any), subject
to applicable law, and (iii)as promptly as reasonably possible following such redemption, subject to the approval of the remaining
shareholders and the board of directors, liquidate and dissolve, subject in each case to obligations under Cayman Islands law to provide
for claims of creditors and the requirements of other applicable law.
F-8
DUNE ACQUISITION
CORPORATION II
NOTES TO FINANCIAL
STATEMENTS
DECEMBER 31, 2025
NOTE 1ORGANIZATION
AND BUSINESS OPERATIONS (cont.)
The Sponsor, New Sponsor (as defined in Note
10), officers and directors have entered into a letter agreement with the Company, pursuant to which they have agreed to (i)waive
their redemption rights with respect to their founder shares and public shares in connection with the completion of the initial Business
Combination; (ii)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 (A)to 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 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; (iii)waive
their rights to liquidating distributions from the Trust Account with respect to their founder shares if the Company fails to complete
the 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 the Completion
Window and to liquidating distributions from assets outside the trust account; and (iv)vote any founder shares held by them and
any public shares purchased during or after the Initial Public Offering (including in open market and privately negotiated transactions)
in favor of the initial Business Combination.
The Companys New 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, reduce the amount of funds in the Trust Account to below the lesser of (i)$10.025
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 $10.025
per share due to reductions in the value of the trust assets, less taxes payable, provided that such liability will not apply to any claims
by a third party or prospective target business who executed a waiver of any and all rights to the monies held in the Trust Account (whether
or not such waiver is enforceable) nor will it apply to any claims under the Companys indemnity of the underwriters of the Initial
Public Offering against certain liabilities, including liabilities under the Securities Actof1933, as amended (the Securities
Act). However, the Company has not asked the New Sponsor to reserve for such indemnification obligations, nor has the Company independently
verified whether the New Sponsor has sufficient funds to satisfy its indemnity obligations and the Company believes that the New Sponsors
only assets are securities of the Company. Therefore, the Company cannot assure that the New Sponsor would be able to satisfy those obligations.
*Liquidity,
Capital Resources and Going Concern*
As of December 31, 2025, the Company had operating
cash and cash equivalents of $365,751
and a working capital surplus of $289,539.
The Company intends to use the funds held outside the Trust Account primarily to identify and evaluate target businesses, perform business
due diligence on prospective target businesses, travel to and from the offices, plants or similar locations of prospective target businesses
or their representatives or owners, review corporate documents and material agreements of prospective target businesses, and structure,
negotiate and complete a Business Combination.
In connection with the Companys assessment
of going concern considerations in accordance with ASC 205-40, Going Concern, as of December 31, 2025, the Company may need
to raise additional capital through loans or additional investments from its New Sponsor, shareholders, officers, directors, or third
parties. The Companys officers, directors and New Sponsor may, but are not obligated to, loan the Company funds, from time to time
or at any time, in whatever amount they deem reasonable in their sole discretion, to meet the Companys working capital needs. Accordingly,
the Company may not be able to obtain additional financing. If the Company is unable to raise additional capital, it may be required to
take additional measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing operations, suspending
the pursuit of a potential transaction, and reducing overhead expenses. The Company cannot provide any assurance that new financing will
be available to it on commercially acceptable terms, if at all. The Companys liquidity condition raises substantial doubt about
the Companys ability to continue as a going concern for a period of time within one year after the date that the accompanying financial
statements are issued. Management plans to address this uncertainty through a Business Combination.
F-9
DUNE ACQUISITION
CORPORATION II
NOTES TO FINANCIAL
STATEMENTS
DECEMBER 31, 2025
NOTE 2SIGNIFICANT
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 (GAAP)
and pursuant to the accounting and disclosure rules and regulations of the SEC.
*Emerging Growth
Company*
The Company is an emerging growth company,
as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the JOBS Act),
and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that
are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting
firm attestation requirements of Section 404 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.
*Emerging Growth
Company**(cont.)*
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 election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that
when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging
growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison
of the Companys financial statement with another public company 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 the financial statements in
conformity with GAAP requires the Companys management to make estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period.
F-10
DUNE
ACQUISITION CORPORATION II
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2025
NOTE 2SIGNIFICANT
ACCOUNTING POLICIES (cont.)
**
*Use of Estimates
(cont.)*
**
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 significantly 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 $365,751
and $13,818
in cash as of December 31, 2025 and 2024, respectively. The Company did not have any cash equivalents as of December 31, 2025 and 2024.
*Marketable
Securities Held in Trust Account*
**
At December 31, 2025, substantially all of the
assets in the Trust Account amounting to $147,910,775
were held in money market funds which invest in U.S. Treasury securities.
**
*Offering Costs*
The Company complies with the requirements of
the ASC340-10-S99 and SEC Staff Accounting Bulletin Topic5A,Expenses of Offering. Deferred
offering costs consist principally of professional and registration fees that are related to the Initial Public Offering. FASB ASC470-20,
Debt with Conversion and Other Options, addresses the allocation of proceeds from the issuance of convertible debt into
its equity and debt components. The Company applies this guidance to allocate Initial Public Offering proceeds from the Unitsbetween
ClassA ordinary shares and warrants, using the residual method by allocating Initial Public Offering proceeds first to assigned
value of the warrants and then to the ClassA ordinary shares. Offering costs allocated to the ClassA ordinary shares will
be charged to temporary equity and offering costs allocated to the Public and Private Placement Warrants were charged to shareholders
equity as Public and Private Placement Warrants after managements evaluation were accounted for under equity treatment.
**
*Fair Value
of Financial Instruments*
**
The fair value of the Companys assets and
liabilities, which qualify as financial instruments under the FASB ASC 820, Fair Value Measurement, approximates the carrying
amounts represented in the balance sheets, primarily due to their short-term nature.
**
*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. 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 | |
F-11
DUNE
ACQUISITION CORPORATION II
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2025
NOTE 2SIGNIFICANT
ACCOUNTING POLICIES (cont.)
*Fair Value
Measurements**(cont.)*
|
|
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. | |
*Income Taxes*
The Company accounts for income taxes under ASC
Topic740, Income Taxes, which requires an asset and liability approach to financial accounting and reporting for income
taxes. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets
and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates applicable to the periods
in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred
tax assets to the amount expected to be realized.
ASC Topic740 prescribes a recognition threshold
and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in
a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing
authorities. The Companys management determined that the Cayman Islands is the Companys major tax jurisdiction. The Company
recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. As of December 31, 2025, there were
no unrecognized tax benefits and no
amounts accrued for interest and penalties. The Company is currently not aware of any issues under review that could result in significant
payments, accruals or material deviation from its position.
The Company is considered to be an exempted Cayman
Islands company with no connection to any other taxable jurisdiction and is presently not subject to income taxes or income tax filing
requirements in the Cayman Islands or the UnitedStates. As such, the Companys tax provision was zero
for the period presented.
**
*Warrant Instruments*
**
The Company accounted for the Public and Private
Placement Warrants issued in connection with the Initial Public Offering and the private placement in accordance with the guidance contained
in FASB ASC Topic815, Derivatives and Hedging. Accordingly, the Company evaluated and classified the warrant instruments
under equity treatment at their assigned values.
**
*Class A Ordinary
Shares Subject to Possible Redemption*
The public shares contain a redemption feature
which allows for the redemption of such public shares in connection with the Companys liquidation, or if there is a shareholder
vote or tender offer in connection with the Companys initial Business Combination. In accordance with ASC 480-10-S99, the Company
classifies public shares subject to possible redemption outside of permanent equity as the redemption provisions are not solely within
the control of the Company. The Company recognizes changes in redemption value immediately as they occur and will adjust the carrying
value of redeemable shares to equal the redemption value at the end of each reporting period. Immediately upon the closing of the Initial
Public Offering, the Company recognized the accretion from initial book value to redemption amount value. The change in the carrying value
of redeemable shares will result in charges against additional paid-in capital (to the extent available) and accumulated deficit. Accordingly,
as of December 31, 2025, the 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 sheets.
F-12
DUNE
ACQUISITION CORPORATION II
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2025
NOTE 2SIGNIFICANT
ACCOUNTING POLICIES (cont.)
*Class A Ordinary
Shares Subject to Possible Redemption**(cont.)*
As of December 31, 2025, the Class A ordinary
shares subject to possible redemption reflected in the balance sheets are reconciled in the following table:
|
Gross proceeds |
|
$ |
143,750,000 |
| |
|
Less: |
|
|
|
| |
|
Proceeds allocated to public warrants |
|
|
(970,313 |
) | |
|
Class A ordinary shares issuance costs |
|
|
(6,588,067 |
) | |
|
Plus: |
|
|
|
| |
|
Remeasurement of carrying value to redemption value |
|
|
11,719,155 |
| |
|
Class A ordinary shares subject to possible redemption, December 31, 2025 |
|
$ |
147,910,775 |
| |
*Net Income
(Loss) per Ordinary Share*
The Company complies with accounting and disclosure
requirements of ASC 260, Earnings Per Share. The Company has two classes of shares, which are referred to as Class A ordinary
shares and Class B ordinary shares. Income and losses are shared pro rata between the two classes of shares. Net income (loss) per ordinary
share is calculated by dividing the net income (loss) by the weighted average ordinary shares outstanding for the respective period. Diluted
net income (loss) per share attributable to ordinary shareholders adjusts the basic net income (loss) per share attributable to ordinary
shareholders and the weighted-average ordinary shares outstanding for the potentially dilutive impact of outstanding warrants. However,
because the warrants are anti-dilutive, they have been excluded from the calculation of diluted income (loss) per ordinary share for the
periods presented.
With respect to the accretion of Class A ordinary
shares subject to possible redemption and consistent with ASC Topic 480-10-S99-3A, the Company treated accretion in the same manner as
a dividend paid to the shareholders in the calculation of the net income (loss) per ordinary share.
F-13
DUNE
ACQUISITION CORPORATION II
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2025
NOTE 2SIGNIFICANT
ACCOUNTING POLICIES (cont.)
**
*Net Income
(Loss) per Ordinary Share**(cont.)*
The following table reflects the calculation of
basic and diluted net income (loss) per ordinary share:
**
|
|
|
For the Year Ended |
|
|
For the Period from September13, 2024 (Inception) through |
| |
|
|
|
December 31, 2025 |
|
|
December 31, 2024 |
| |
|
|
|
ClassA redeemable |
|
|
Class A and Class B Non-redeemable |
|
|
ClassA redeemable |
|
|
Class A and Class B Non-redeemable |
| |
|
Basic net income(loss) per ordinary share |
|
|
|
|
|
|
|
|
|
|
|
| |
|
Numerator: |
|
|
|
|
|
|
|
|
|
|
|
| |
|
Allocation of net income (loss) |
|
$ |
2,102,489 |
|
|
$ |
1,246,996 |
|
|
$ |
|
|
|
$ |
(36,702 |
) | |
|
Denominator |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Basic weighted average ordinary shares outstanding |
|
|
9,373,288 |
|
|
|
5,559,341 |
|
|
|
|
|
|
|
5,000,000 |
| |
|
Basic net income (loss) per ordinary share |
|
$ |
0.22 |
|
|
$ |
0.22 |
|
|
$ |
|
|
|
$ |
(0.01 |
) | |
**
|
|
|
For the Year Ended |
|
|
For the Period from September13, 2024 (Inception) through |
| |
|
|
|
December 31, 2025 |
|
|
December 31, 2024 |
| |
|
|
|
ClassA redeemable |
|
|
Class A and Class B Non-redeemable |
|
|
ClassA redeemable |
|
|
Class A and Class B Non-redeemable |
| |
|
Diluted net income (loss) per ordinary share |
|
|
|
|
|
|
|
|
|
|
|
| |
|
Numerator: |
|
|
|
|
|
|
|
|
|
|
|
| |
|
Allocation of net income (loss) |
|
$ |
2,066,377 |
|
|
$ |
1,283,108 |
|
|
$ |
|
|
|
$ |
(36,702 |
) | |
|
Denominator |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Diluted weighted average ordinary shares outstanding |
|
|
9,373,288 |
|
|
|
5,820,300 |
|
|
|
|
|
|
|
5,000,000 |
| |
|
Diluted net income (loss) per ordinary share |
|
$ |
0.22 |
|
|
$ |
0.22 |
|
|
$ |
|
|
|
$ |
(0.01 |
) | |
*Concentration
of Credit Risk*
Financial instruments that potentially subject
the Company to concentrations of credit risk consist of cash accounts in a financial institution, which, at times may exceed the Federal
Depository Insurance Corporation coverage limit of $250,000.
The Company has not experienced losses on these accounts and management believes the Company is not exposed to significant risks on such
account.
F-14
DUNE
ACQUISITION CORPORATION II
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2025
NOTE 2SIGNIFICANT
ACCOUNTING POLICIES (cont.)
**
*Recent Accounting
Pronouncements*
In November 2023, the FASB issued ASU 2023-07,
Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The amendments in this ASU require disclosures, on an annual
and interim basis, of significant segment expenses that are regularly provided to the chief operating officer decision maker (CODM),
as well as the aggregate amount of other segment items included in the reported measure of segment profit or loss. The ASU requires that
a public entity disclose the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment
profit or loss in assessing segment performance and deciding how to allocate resources. Public entities will be required to provide all
annual disclosures currently required by Topic 280 in interim periods, and entities with a single reportable segment are required to provide
all the disclosures required by the amendments in this ASU and existing segment disclosures in Topic 280. This ASU is effective for fiscal
years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption
permitted. The Company adopted ASU 2023-07 on September 13, 2024 (inception).
In December 2023, the FASB issued ASU 2023-09,
Income Taxes (ASC Topic 740): Improvements to Income Tax Disclosures (ASU 2023-09), which requires disclosure of incremental income tax
information within the rate reconciliation and expanded disclosures of income taxes paid, among other disclosure requirements. ASU 2023-09
is effective for fiscal years beginning after December 15, 2025. Early adoption is permitted. The Companys management does not
believe the adoption of ASU 2023-09 will have a material impact on its financial statements and disclosures.
The Company does not believe that any other recently
issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Companys financial
statements.
NOTE 3INITIAL
PUBLIC OFFERING
Pursuant to the Initial Public Offering on May
8, 2025, the Company will sold 14,375,000Unitsat
a purchase price of $10.00
per Unit, generating gross proceeds of $143,750,000.
Each Unit that consists of one ClassA
ordinary share and three-quarters of one redeemable warrant. Each whole warrant entitles the holder to purchase one
ClassA ordinary share at a price of $11.50
per share, subject to adjustment. Each warrant will become exercisable the later of 30
days after the completion of the initial Business Combination and 12
months from the closing of the Initial Public Offering and will expire sevenyears
after the completion of the initial Business Combination, or earlier upon redemption or liquidation.
WarrantsAs
of December 31, 2025, there were 12,781,250
warrants outstanding, including 10,781,250
public warrants and 2,000,000
Private Placement Warrants.
The Company will not be obligated to deliver any
ClassA ordinary shares pursuant to the exercise of a warrant and will have no obligation to settle such warrant exercise unless
a registration statement under the Securities Act with respect to the ClassA ordinary shares underlying the warrants is then effective
and a prospectus relating thereto is current, or a valid exemption from registration is available. No warrant will be exercisable and
the Company will not be obligated to issue a ClassA ordinary share upon exercise of a warrant unless the ClassA ordinary share
issuable upon such warrant exercise has been registered, qualified or deemed to be exempt under the securities laws of the state of residence
of the registered holder of the warrants. In the event that the conditions in the two immediately preceding sentences are not satisfied
with respect to a warrant, the holder of such warrant will not be entitled to exercise such warrant and such warrant may have no value
and expire worthless. In no event will the Company be required to net cash settle any warrant. In the event that a registration statement
is not effective for the exercised warrants, or a valid exemption from registration is not available, the purchaser of a unit containing
such warrant will have paid the full purchase price for the unit solely for the ClassA ordinary share underlying such unit.
F-15
DUNE
ACQUISITION CORPORATION II
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2025
NOTE 3INITIAL
PUBLIC OFFERING (cont.)
Under the terms of the warrant agreement, the
Company has agreed that, as soon as practicable, but in no event later than 20businessdays,
after the closing of its Business Combination, it will use commercially reasonable efforts to file with the SEC a post-effective amendment
to the registration statement for the Initial Public Offering or a new registration statement covering the registration under the Securities
Actofthe ClassA ordinary shares issuable upon exercise of the warrants and thereafter will use its commercially reasonable
efforts to cause the same to become effective within 60businessdays
following the Companys 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
(60th)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. Notwithstanding the above, if the ClassA ordinary shares are at the time of any exercise of a warrant not listed on a
national securities exchange such that they satisfy the definition of a covered security under Section18(b)(1)of
the Securities Act, the Company may, at its option, require holders of public warrants who exercise their warrants to do so on a cashless
basis in accordance with Section3(a)(9)of the Securities Act and, in the event the Company so elects, the Company will
not be required to file or maintain in effect a registration statement, and in the event the Company does not so elect, the Company will
use its commercially reasonable efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is
not available.
If the holders exercise their public warrants
on a cashless basis, they would pay the warrant exercise price by surrendering the warrants for that number of ClassA ordinary shares
equal to the quotient obtained by dividing (x)the product of the number of ClassA ordinary shares underlying the warrants,
multiplied by the excess of the fair market value of the ClassA ordinary shares 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 ClassA ordinary
shares for the 10tradingdays ending on the thirdtradingday 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.
*Redemption of Warrants When the Price per
ClassA Ordinary Share Equals or Exceeds $18.00:*
The Company may redeem the outstanding warrants:
|
|
in whole and not in part; | |
|
|
at a price of $0.01
per warrant; | |
|
|
upon a minimum of 30
days prior written notice of redemption (the 30-day redemption period); and | |
|
|
if, and only if, the closing price of the Class A ordinary shares equals or exceeds $18.00
per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant) for any 20
trading days within a 30-trading
day period commencing at least 30 days after completion of the initial business combination and ending three business days before the
Company sends the notice of redemption to the warrant holders. | |
F-16
DUNE
ACQUISITION CORPORATION II
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2025
NOTE 3INITIAL
PUBLIC OFFERING (cont.)
Additionally, if the number of outstanding ClassA
ordinary shares is increased by a share capitalization payable in ClassA ordinary shares, or by a subdivision of ordinary shares
or other similar event, then, on the effective date of such share capitalization, subdivision or similar event, the number of ClassA
ordinary shares issuable on exercise of each warrant will be increased in proportion to such increase in the outstanding ordinary shares.
A rights offering made to all or substantially all holders of ordinary shares entitling holders to purchase ClassA ordinary shares
at a price less than the fair market value will be deemed a share capitalization of a number of ClassA ordinary shares equal to
the product of (i)the number of ClassA ordinary shares actually sold in such rights offering (or issuable under any other
equity securities sold in such rights offering that are convertible into or exercisable for ClassAordinary shares) and (ii)the
quotient of (x)the price per ClassA ordinary share paid in such rights offering and (y)the fair market value. For these
purposes (i)if the rights offering is for securities convertible into or exercisable for ClassA ordinary shares, in determining
the price payable for ClassA ordinary shares, there will be taken into account any consideration received for such rights, as well
as any additional amount payable upon exercise or conversion, and (ii)fair market value means the volume weighted average price
of ClassA ordinary shares as reported during the ten (10)tradingday
period ending on thetradingday prior to the first date on which the ClassAordinary shares trade on the applicable
exchange or in the applicable market, regular way, without the right to receive such rights.
NOTE 4PRIVATE
PLACEMENT
Simultaneously with the closing of the Initial
Public Offering on May 8, 2025, the Sponsor purchased an aggregate of 2,000,000
Private Placement Warrants at a price of $1.00
per warrant, generating gross proceeds of $2,000,000.
Each whole warrant entitles the registered holder to purchase one
Class A ordinary share at a price of $11.50
per share, subject to adjustment.
The Private Placement Warrants are identical to
the Public Warrants sold in the Initial Public Offering except that, so long as they are held by the Sponsor, the underwriters, or their
permitted transferees, the Private Placement Warrants (i)may not (including the ClassA ordinary shares issuable upon exercise
of these Private Placement Warrants), subject to certain limited exceptions, be transferred, assigned or sold by the holders until 30days
after the completion of the initial Business Combination and (ii)will be entitled to registration rights.
NOTE 5RELATED
PARTY TRANSACTIONS
**
*Founder Shares*
On September27, 2024, the Sponsor made
a capital contribution of $25,000,
or approximately $0.004
per share, to cover certain of the Companys expenses, for which the Company issued 6,900,000
founders shares to the Sponsor. On April 22, 2025, the Sponsor surrendered 1,150,000
Class B ordinary shares, where the number of outstanding founder shares was reduced to 5,750,000
in the aggregate. All share and per share data has been retrospectively presented. Up to 750,000
of the founder shares may be surrendered by the Sponsor for no consideration if the underwriters over-allotment is not fully exercised.
On May 8, 2025, the underwriters exercised their over-allotment option in full as part of the closing of the Initial Public Offering.
As such, the 750,000
founder shares are no longer subject to forfeiture.
F-17
DUNE
ACQUISITION CORPORATION II
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2025
NOTE 5RELATED
PARTY TRANSACTIONS (cont.)
*Founder Shares**(cont.)*
The Companys initial shareholders have
agreed not to transfer, assign or sell any of their founder shares and any ClassA ordinary shares issued upon conversion thereof
until the earlier to occur of (i)one
year after the completion of the initial Business Combination or (ii)the date on which the Company completes a liquidation,
merger, share exchange or other similar transaction after the initial Business Combination that results in all of the Companys
shareholders having the right to exchange their ClassA ordinary shares for cash, securities or other property. Any permitted transferees
will be subject to the same restrictions and other agreements of the Companys initial shareholders with respect to any founder
shares (the Lock-up). Notwithstanding the foregoing, if (1)the closing 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 initial Business Combination or (2)if the Company consummates a transaction after the initial Business Combination which
results in the Companys shareholders having the right to exchange their shares for cash, securities or other property, the founder
shares will be released from the Lock-up.
*Promissory
Note Related Party*
The Sponsor had agreed to loan the Company an
aggregate of up to $150,000,
as amended, to be used for a portion of the expenses of the Initial Public Offering. The loan was non-interest bearing, unsecured and
due at the earlier of December 31, 2025 or the closing of the Initial Public Offering. As of May 8, 2025, the Company had borrowed $150,000
under the promissory note. This amount was repaid at the close of the Initial Public Offering and borrowings under this note are no longer
allowed.
*Administrative Services Agreement*
Commencing on the effective date of the Initial
Public Offering, May 6, 2025, the Company entered into an agreement with the Sponsor or an affiliate to pay an aggregate of $15,000
per month for utilities and secretarial and administrative support. Upon completion of a Business Combination or its liquidation, the
Company will cease paying these monthly fees. For the year ended December 31, 2025, the Company incurred and paid $120,000
for these fees.
*Working Capital
Loans*
In order to fund working capital deficiencies
or finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor or certain of the Companys
officers and directors may, but are not obligated to, loan the Company funds as may be required (the Working Capital Loans).
If the Company completes a Business Combination, the Company would repay the Working Capital Loans. In the event that a Business Combination
does not close, the Company may use a portion of the working capital held outside the Trust Account to repay the Working Capital Loans
but no proceeds from the Trust Account would be used to repay the Working Capital Loans. 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. The warrants would be identical to the Private Placement Warrants. As of December 31, 2025 and
2024, no such Working Capital Loans
were outstanding.
F-18
DUNE
ACQUISITION CORPORATION II
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2025
NOTE 6COMMITMENTS
AND CONTINGENCIES
**
*Risks and
Uncertainties*
The UnitedStates and global markets are
experiencing volatility and disruption following the geopolitical instability resulting from the ongoing Russia-Ukraine conflict and the
Israel-Hamas conflict. In response to the ongoing Russia-Ukraine conflict, the North Atlantic Treaty Organization (NATO)
deployed additional military forces to eastern Europe, and the UnitedStates, 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 payment system. Certain countries,
including the UnitedStates, have also provided and may continue to provide military aid or other assistance to Ukraine and to Israel,
increasing geopolitical tensions among a number of nations. The invasion of Ukraine by Russia and the Israel-Hamas conflict and the resulting
measures that have been taken, and could be taken in the future, by NATO, the UnitedStates, 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 Israel-Hamas conflict and subsequent sanctions or related actions, could adversely affect the Companys search for an initial
Business Combination and any target business with which the Company may ultimately consummate an initial Business Combination.
*Registration
Rights*
The holders of the (i)founder shares, which
were issued in a private placement prior to the closing of the Initial Public Offering, (ii)private placement warrants which will
be issued in a private placement simultaneously with the closing of the 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 its securities held and any other securities of the company
acquired by them prior to the consummation of the initial Business Combination pursuant to a registration rights agreement signed on the
effective date of the Initial Public Offering. 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 completion of the initial Business Combination. The Company will bear the expenses
incurred in connection with the filing of any such registration statements.
*Underwriting
Agreement*
The underwriters were granted a 45-day
option from the date of the Initial Public Offering to purchase up to an additional 1,875,000units
to cover over-allotments, if any. On May 8, 2025, the underwriters exercised their over-allotment option, closing on the 1,875,000
additional units simultaneously with the Initial Public Offering.
The underwriters were entitled to an underwriting
discount of $550,000
which was paid in cash upon the closing of the Initial Public Offering.
F-19
DUNE
ACQUISITION CORPORATION II
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2025
NOTE 6COMMITMENTS
AND CONTINGENCIES (cont.)
*Underwriting
Agreement**(cont.)*
In addition, the underwriters are also entitled
to a deferred underwriting discount of $0.40
per unit, or up to $5,750,000,
payable to the underwriters for deferred underwriting commissions and will be placed in the Trust Account. The $0.40
per unit will become payable to the underwriters from the amounts held in the Trust Account solely on amounts remaining in the Trust Account
following all properly submitted shareholder redemption in connection with the consummation of the initial Business Combination.
*Representative
Shares*
The Company issued 107,813
Class A ordinary shares (Representative Shares) to the underwriter or its designee, for nominal consideration. With regard
to the Representative Shares, the underwriters have agreed (a) not to transfer, assign or sell any such shares without the Companys
written consent until the completion of the initial Business Combination, (ii) to waive their redemption rights (or right to participate
in any tender offer) with respect to such shares in connection with the completion of the initial Business Combination, and (iii) to waive
their rights to liquidating distributions from the Trust Account with respect to such shares if the Company does not complete its initial
Business Combination within 15 months from the closing of the Initial Public Offering.
The Representative Shares have been deemed compensation
by FINRA and are therefore subject to a lock-up for a period of 180
days immediately following the commencement of sales of the Initial Public Offering. Pursuant to FINRA Rule 5110(e)(1), these securities
may not be sold, transferred, assigned, pledged or hypothecated nor may they be the subject of any hedging, short sale, derivative, put
or call transaction that would result in the economic disposition of the securities by any person for a period of 180 days immediately
following the commencement of the Initial Public Offering except to any underwriter and selected dealer participating in the Initial Public
Offering and their officers or partners, registered persons or affiliates or as otherwise permitted under FINRA Rule 5110(e)(2).
NOTE 7SHAREHOLDERS
DEFICIT
*Preference
Shares*The Company is authorized to issue a total of 1,000,000
preference shares at par value of $0.0001
each. At December 31, 2025 and 2024, there were no
preference shares issued or outstanding.
*ClassA
Ordinary Shares*The Company is authorized to issue a total of 200,000,000
ordinary shares at par value of $0.0001
each. At December 31, 2025, there were 107,813
ClassA ordinary shares issued and outstanding, excluding 14,375,000
Class A ordinary shares subject to possible redemption. There were no
Class A ordinary shares issued and outstanding at December 31, 2024.
*ClassB
Ordinary Shares*The Company is authorized to issue a total of 20,000,000
ClassB ordinary shares at par value of $0.0001
each. On September27, 2024, the Company issued 6,900,000
ClassB ordinary shares to the Sponsor for $25,000,
or approximately $0.004
per share. On April 22, 2025, the Sponsor surrendered 1,150,000
Class B ordinary shares, where the number of outstanding founder shares was reduced to 5,750,000
in the aggregate. All share and per share data have been retrospectively presented. The founder shares included an aggregate of up to
750,000
Class B ordinary shares subject to forfeiture if the over-allotment option is not exercised by the underwriters in full. On May 8, 2025,
the underwriters exercised their over-allotment option in full as part of the closing of the Initial Public Offering. As such, the 750,000
founder shares are no longer subject to forfeiture. At December 31, 2025 and 2024, there were 5,750,000
Class B ordinary shares issued and outstanding.
F-20
DUNE
ACQUISITION CORPORATION II
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2025
NOTE 7SHAREHOLDERS
DEFICIT (cont.)
The founder shares will automatically convert
into ClassA ordinary shares concurrently with or immediately following the consummation of the initial Business Combination or earlier
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. 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 Initial Public Offering 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, 28.4%
of the sum of (i)the total number of all ClassA ordinary shares outstanding upon the completion of the Initial Public Offering
(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), plus (ii)all ClassA ordinary shares and
equity-linked securities issued or deemed issued, in connection with the closing of the 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 Sponsor or any of its affiliates or to 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.
Holders of record of the Companys ClassA
ordinary shares and ClassB ordinary shares are entitled to one
vote for each share held on all matters to be voted on by shareholders. Unless specified in the amended and restated memorandum and articles
of association or as required by the Companies Act or stock exchange rules, an ordinary resolution under Cayman Islands law and the Companys
amended and restated memorandum and articles of association, which requires the affirmative vote of a simple majority 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, voting together as a single class, and includes a unanimous written resolution. Approval of certain actions requires a
special resolution under Cayman Islands law, which (except as specified below) requires the affirmative vote of a majority of at least
two-thirds of the votes cast by such shareholders as, being entitled to do so, vote in person or, where proxies are allowed, by proxy
at the applicable general meeting of the Company, and pursuant to the amended and restated memorandum and articles of association, such
actions include amending the amended and restated memorandum and articles of association and approving a statutory merger or consolidation
with another company.
There is no cumulative voting with respect to
the appointment of directors, meaning, following the initial Business Combination, the holders of more than 50%
of ordinary shares voted for the appointment of directors can elect all of the directors. Prior to the consummation of the initial Business
Combination, only holders of the ClassB ordinary shares will (i)have the right to vote on the appointment and removal of directors
and (ii)be entitled to vote on continuing the Company 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). Holders of the ClassA ordinary shares will not be entitled
to vote on these matters during such time. These provisions of the 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 the 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.
F-21
DUNE
ACQUISITION CORPORATION II
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2025
NOTE 8
FAIR VALUE MEASUREMENTS
The fair value of the Companys financial
assets and liabilities reflects managements estimate of amounts that the Company would have received in connection with the sale
of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the
measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of
observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions
about how market participants would price assets and liabilities).
The following fair value hierarchy is used to
classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:
|
|
Level 1: |
Quoted prices in active markets for identical assets or liabilities.
An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency
and volume to provide pricing information on an ongoing basis. | |
|
|
Level 2: |
Observable inputs other than Level 1 inputs. Examples of Level 2
inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities
in markets that are not active. | |
|
|
Level 3: |
Unobservable inputs based on our assessment of the assumptions that
market participants would use in pricing the asset or liability. | |
The following table presents information about
the Companys assets that are measured at fair value as of December 31, 2025, and indicates the fair value hierarchy of the valuation
inputs the Company utilized to determine such fair value:
|
Description |
|
Level |
|
|
December 31, 2025 |
| |
|
Assets: |
|
|
|
|
|
|
|
| |
|
Marketable securities held in Trust account |
|
|
1 |
|
|
$ |
147,910,775 |
| |
The Public Warrants were valued using a Monte-Carlo
methodology. The Public Warrants have been classified within shareholders deficit and will not require remeasurement after issuance.
On May9, 2025, a fair value of $0.09
per Public Warrant was determined. The
following table presents the quantitative information regarding market assumptions used in the valuation of the Public Warrants:
|
|
|
May9, 2025 |
| |
|
Exercise |
|
$ |
11.50 |
| |
|
Market price of public shares |
|
$ |
9.96 |
| |
|
Term (years) |
|
|
8.25 |
| |
|
Risk-free rate |
|
|
4.23 |
% | |
|
Volatility |
|
|
3.33 |
% | |
F-22
DUNE
ACQUISITION CORPORATION II
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2025
NOTE 9
SEGMENT REPORTING
ASC Topic 280, Segment Reporting,
establishes standards for companies to report in their financial statement information about operating segments, products, services, geographic
areas, and major customers. Operating
segments are defined as components of an enterprise for which separate financial information is available that is regularly evaluated
by the Companys chief operating decision maker, or group, in deciding how to allocate resources and assess performance.
The Companys chief operating decision
maker (CODM) has been identified as a group that includes the Companys Chief
Financial Officer and Chief Executive Officer, that collectively review the operating results for the Company as a whole to make
decisions about allocating resources and assessing financial performance. Accordingly, management has determined that the Company only
has one
operating segment.
When evaluating the Companys performance
and making key decisions regarding resource allocation the CODM reviews several key metrics, which include the following:
|
|
|
Year Ended December 31,
2025 |
|
|
For the Period from September13,
2024 (Inception) through December 31, 2024 |
| |
|
Formation and general and administrative costs |
|
$ |
451,915 |
|
|
$ |
36,702 |
| |
|
Interest earned on marketable securities held in Trust Account |
|
$ |
3,801,400 |
|
|
$ |
|
| |
The key measures of segment profit or loss reviewed
by our CODM are interest earned on the Trust Account and formation and general and administrative expenses. The CODM reviews interest
earned on the Trust Account to measure and monitor shareholder value and determine the most effective strategy of investment with the
Trust Account funds while maintaining compliance with the trust agreement. General and administrative expenses are reviewed and monitored
by the CODM to manage and forecast cash to ensure enough capital is available to complete a business combination within the business combination
period. The CODM also reviews general and administrative costs to manage, maintain and enforce all contractual agreements to ensure costs
are aligned with all agreements and budget.
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 upon this review, other than
as described below, the Company did not identify any subsequent events that would have required adjustment or disclosure in the financial
statements.
On January 30, 2026, Collective Acquisition Sponsor
LLC, a Delaware limited liability company (the New Sponsor), Dune Acquisition Corporation II, a Cayman Islands exempted
company (the SPAC), Dune Acquisition Holdings II LLC, a Delaware limited liability company (the Sponsor),
Carter Glatt, as the managing member of Sponsor (the Sponsor Member), certain members of the Sponsor named as signatories
thereto (the Non-Managing Members) and certain other institutional investors signatories thereto (the Non-Managing
Investors, together with the Non-Managing Members and the Sponsor Member, the Old Sponsor Members) entered into a
Purchase and Sponsor Handover Agreement (the Purchase Agreement) pursuant to which New Sponsor has agreed to purchase from
the Sponsor, an aggregate of (i) 4,475,000
ClassB ordinary shares, $0.0001
par value per share and (ii) 1,000,000
private placement warrants of the SPAC (the Transferred Interests), for an aggregate purchase price of $2,000,000
(the Transaction).
F-23
DUNE
ACQUISITION CORPORATION II
NOTES
TO FINANCIAL STATEMENTS
DECEMBER
31, 2025
NOTE 10
SUBSEQUENT EVENTS (cont.)
Pursuant to the Purchase Agreement, if a definitive
business combination agreement is not entered into by May 7, 2026 (the Option Date), the Sponsor Member shall have the right
(but not the obligation) to repurchase the Transferred Interests from the New Sponsor for a purchase price of $2,000,000
(the Repurchase Right). The Repurchase Right may be exercised only during the period commencing on the Option Date and ending
at 5:00 p.m., New York City time, on the date that is five (5) days after the Option Date (the Option Period), by delivery
of written notice of exercise to the New Sponsor in accordance with the terms set forth in the Purchase Agreement. If the Sponsor Member
does not exercise the Repurchase Right within the Option Period, the Repurchase Right shall automatically terminate and be of no further
force or effect.
The closing of the Transaction and such other
transactions contemplated by the Purchase Agreement (the Closing) occurred on February 5, 2026 (the Closing Date).
The Closing is conditioned upon the delivery of certain documents, as set forth in the Purchase Agreement, and upon other customary closing
conditions.
Pursuant to the Purchase Agreement, among
other matters, effective on the Closing Date:
|
|
Carter Glatt, Michael Castaldy, Ben Coates, Jeron Smith and Cecil White have agreed to resign from their positions
as directors of the SPAC (collectively, the Resigning Directors) effective as of Schedule 14F Change in Control Date (as
defined below); | |
|
|
Carter Glatt and Michael Castaldy have agreed to resign from their positions as officers of the SPAC (together,
the Resigning Officers); | |
|
|
New Sponsor and each of the directors and officers elected by the New Sponsor have agreed to be bound by the
terms of the Letter Agreement, dated May 6, 2025, by and among the SPAC, its executive officers, its directors and the Sponsor (the Letter
Agreement), through a Joinder Agreement; | |
|
|
New Sponsor has agreed to assume the obligations of the Sponsor under the Administrative Services Agreement,
dated as of May 6, 2025, entered into between the SPAC and the Sponsor, through a Joinder Agreement, and | |
|
|
New Sponsor has agreed to become a party to the Registration Rights Agreement, dated as of May 6, 2025, entered
into between the SPAC and the Sponsor, through a Joinder Agreement. | |
Elliot Richmond will serve as Chief Executive
Officer and Chief Financial Officer of the SPAC, with David Bailin and Jeremy Sziklay serving as independent directors. Carter Glatt,
the former Chairman and CEO of the SPAC, will serve as Special Advisor to the SPAC. Concurrently with Closing, the Resigning Directors
will deliver their resignations, effective following the Closing upon expiration of all applicable waiting periods under Section 14(f)
of the Securities Exchange Act of 1934 (the Exchange Act) and Rule 14f-1 thereunder, and new members of the board of directors
of the SPAC (the Board of Directors) will be appointed by the New Sponsor. As a result of the foregoing, the Resigning Officers
will be replaced by the newly appointed officer and the Resigning Directors will be replaced by a new Board of Directors. On the 10th
day following the mailing by the SPAC of an information statement to the stockholders of the SPAC advising them of the Transaction and
the other transactions contemplated by the Purchase Agreement, including the change in control of a majority of the Board of Directors,
pursuant to Section 14(f) of the Exchange Act, as amended, and Rule 14(f) thereunder (the Schedule 14F Change in Control Date),
the Resigning Directors will resign as directors and the New Sponsor may appoint new directors.
F-24
EXHIBIT
INDEX
|
ExhibitNo. |
|
Description | |
|
1.1 |
|
Underwriting
Agreement, dated May 6, 2025, by and among the Company and Clear Street LLC, as representative of the several underwriters.(2) | |
|
3.1 |
|
Amended
and Restated Memorandum and Articles of Association.(2) | |
|
4.1 |
|
Specimen
Unit Certificate.(1) | |
|
4.2 |
|
Specimen
Ordinary Share Certificate.(1) | |
|
4.3 |
|
Specimen
Warrant Certificate (included as an exhibit to Exhibit 4.4).(2) | |
|
4.4 |
|
Warrant
Agreement, dated May 6, 2025, by and between the Company and Continental Stock Transfer & Trust Company, as warrant agent.(2) | |
|
4.5 |
|
Description of Registered
Securities.* | |
|
10.1 |
|
Amended
and Restated Promissory Note issued to Dune Acquisition Holdings II LLC.(1) | |
|
10.2 |
|
Securities
Subscription Agreement between Dune Acquisition Holdings II LLC and the Registrant.(1) | |
|
10.3 |
|
Investment
Management Trust Agreement, dated May 6, 2025, by and between the Company and Continental Stock Transfer & Trust Company, as trustee.(2) | |
|
10.4 |
|
Registration
Rights Agreement, dated May 6, 2025, by and between the Company and Dune Acquisition Holdings II LLC(2). | |
|
10.5 |
|
Private
Placement Warrants Purchase Agreement, dated May 6, 2025, by and between the Company and Dune Acquisition Holdings II LLC.(2) | |
|
10.6 |
|
Letter
Agreement, dated May 6, 2025, by and among the Company, its executive officers, its directors and Dune Acquisition Holdings II LLC.(2) | |
|
10.7 |
|
Administrative
Services Agreement, dated May 6, 2025 by and between the Company and Dune Acquisition Holdings II LLC.(2) | |
|
10.8 |
|
Form
of Purchase Agreement, dated January 30, 2026, by and among Collective Capital Management LLC, Dune Acquisition Corporation II, Dune Acquisition
Holdings II LLC, Carter Glatt and certain investors signatories thereto.(3) | |
|
10.9 |
|
Form
of Joinder to the Letter Agreement, dated February 5, 2026, by and among the SPAC, its executive officers, its directors and the New Sponsor.(3) | |
|
10.10 |
|
Joinder
to the Administrative Services Agreement, dated February 5, 2026, by and between the SPAC and the New Sponsor.(3) | |
|
10.11 |
|
Joinder
to the Registration Rights Agreement, dated February 5, 2026, by and between the SPAC and the New Sponsor.(3) | |
|
10.12 |
|
Form
of Indemnity Agreement.(1) | |
|
14.1 |
|
Code
of Ethics.(1) | |
|
19.1 |
|
Insider Trading Policies
and Procedures* | |
|
31.1 |
|
Certification of the Principal Executive Officer
and Principal Financial Officer pursuant to Rule 13a-14(a) and Rule 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 the
Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002.** | |
|
99.1 |
|
Audit
Committee Charter.(1) | |
|
99.2 |
|
Compensation
Committee Charter.(1) | |
|
97.1 |
|
Policy Related to 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 as Inline
XBRL document and contained in Exhibit 101).* | |
|
* |
Filed herewith. | |
|
** |
Furnished herewith. | |
|
(1) |
Incorporated by reference to the Companys Registration Statement on Form
S-1 (File No. 333-285639), filed with the SEC on March 7, 2025. | |
|
(2) |
Incorporated by reference to the Companys Current Report on Form 8-K,
filed with the SEC on May 8, 2025. | |
|
(3) |
Incorporated by reference to the Companys Current Report on Form 8-K,
filed with the SEC on February 5, 2026. | |
48
SIGNATURES
Pursuant to the requirements
of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by
the undersigned, thereunto duly authorized.
|
March 13, 2026 |
Dune Acquisition Corporation
II | |
|
|
|
| |
|
|
By: |
/s/
Elliot Richmond | |
|
|
Name: |
Elliot Richmond | |
|
|
Title: |
Chief Executive Officer and Chief Financial Officer (Principal Executive
Officer and Principal Financial and Accounting Officer) | |
Pursuant to the requirements
of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the Registrant and in
the capacities and on the dates indicated.
|
Name |
|
Position |
|
Date | |
|
|
|
| |
|
/s/
Elliot Richmond |
|
Chief Executive Officer and Chief Financial Officer |
|
March 13, 2026 | |
|
Elliot Richmond |
|
(Principal Executive Officer, and Principal Financial
and Accounting Officer) |
|
| |
|
|
|
| |
|
/s/
Ben Coates |
|
Independent Director |
|
March 13, 2026 | |
|
Ben Coates |
|
|
|
| |
|
|
|
| |
|
/s/
Jeron Smith |
|
Independent Director |
|
March 13, 2026 | |
|
Jeron Smith |
|
|
|
| |
|
|
|
|
|
| |
|
/s/
Cecil White III |
|
Independent Director |
|
March 13, 2026 | |
|
Cecil White III |
|
|
|
| |
|
|
|
| |
49