Filed 2026-03-20 · Period ending 2025-12-31 · 74,627 words · SEC EDGAR
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# Bluerock Acquisition Corp. (BLRK) — 10-K
**Filed:** 2026-03-20
**Period ending:** 2025-12-31
**Accession:** 0001213900-26-032357
**Source:** [SEC EDGAR](https://www.sec.gov/Archives/edgar/data/2081532/000121390026032357/)
**Origin leaf:** 0b1cc9f7083fde63eab3da20f555b0d4cd3e47fb218772260718c53d65ea1c6f
**Words:** 74,627
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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
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period fromto
Commission File Number: 001-43007
BLUEROCK ACQUISITION CORP.
(Exact name of registrant as specified in its charter)
| Cayman Islands | | N/A | |
| (State or other jurisdiction of incorporation or organization) | | (I.R.S. Employer Identification Number) | |
| 919 Third Avenue New York, New York 10022 | |
| (Address of principal executive offices) | |
Registrants telephone number, including area code: (212) 843-1601
Securities registered pursuant to Section 12(b) of the Act:
| Title of Each Class: | | Trading Symbols | | Name of Each Exchange on Which Registered: | |
| Units, each consisting of one Class A Ordinary Share, $0.0001 par value, and one-third of one redeemable warrant | | BLRKU | | The Nasdaq Stock Market LLC | |
| Class A Ordinary Shares, par value $0.0001 per share | | BLRK | | The Nasdaq Stock Market LLC | |
| Warrants, each whole warrant exercisable for one Class A Ordinary Share at an exercise price of $11.50 per share | | BLRKW | | 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.YesNo
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes No
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of large accelerated filer, accelerated filer, smaller reporting company and emerging growth company in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | | Accelerated filer | | |
| Non-accelerated filer | | Smaller reporting company | | |
| Emerging growth company | | | | |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant has filed a report on and attestation to its managements assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrants executive officers during the relevant recovery period pursuant to 240.10D-1(b).
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No
The registrants Units began trading on The Nasdaq Stock Market LLC on December 11, 2025, and the registrants Class A Ordinary Shares began separate trading on The Nasdaq Stock Market LLC on February 2, 2026. The registrant was not a public company as of June 30, 2025 and therefore it cannot calculate the aggregate market value of its voting and non-voting common equity held by non-affiliates as of such date.
As of March 20, 2026, there were an aggregate of 23,000,000 ordinary shares of the registrant issued and outstanding, consisting of 17,250,000 Class A Ordinary Shares, par value $0.0001 per share, and 5,750,000 Class B Ordinary Shares, par value $0.0001 per share.
Documents Incorporated by Reference: None.
TABLE OF CONTENTS
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Part I |
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Item 1. Business |
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Item 1A. Risk Factors |
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Item 1B. Unresolved Staff Comments |
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Item 1C. Cybersecurity |
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Item 2. Properties |
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Item 3. Legal Proceedings |
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Item 4. Mine Safety Disclosures |
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Part II |
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Item 5. Market for Registrants Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities |
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Item 6. [Reserved] |
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Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations |
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Item 7A. Quantitative and Qualitative Disclosures about Market Risk |
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Item 8. Financial Statements and Supplementary Data |
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Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure |
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Item 9A. Controls and Procedures. |
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Item 9B. Other Information |
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Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections |
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Part III |
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Item 10. Directors, Executive Officers and Corporate Governance |
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Item 11. Executive Compensation. |
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Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters. |
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Item 13. Certain Relationships and Related Transactions, and Director Independence |
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Item 14. Principal Accounting Fees and Services |
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Part IV |
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Item 15. Exhibits, Financial Statement Schedules |
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Item 16. Form 10-K Summary |
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i
CAUTIONARY NOTE REGARDING FORWARD-LOOKING
STATEMENTS AND RISK FACTOR SUMMARY
Certain statements in this
Annual Report on Form 10-K (this Form 10-K) may constitute forward-looking statements for purposes of the
federal securities laws. Our forward-looking statements include, but are not limited to, statements regarding our or our management teams
expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts
or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The
words anticipate, believe, continue, could, estimate, expect,
intend, may, might, plan, possible, potential, predict,
project, should, would and similar expressions may identify forward-looking statements, but
the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this Form 10-K may include,
for example, statements about:
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| our ability to select an appropriate target business or businesses; |
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| our ability to complete our initial Business Combination (as
defined below); |
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| our expectations around the performance of the prospective
target business or businesses; |
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| our success in retaining or recruiting, or changes required
in, our officers, key employees or directors following our initial Business Combination; |
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| our officers and directors allocating their time to other
businesses and potentially having conflicts of interest with our business or in approving our initial Business Combination; |
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| our potential ability to obtain additional financing to complete
our initial Business Combination; |
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| our pool of prospective target businesses; |
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| the adverse impacts that events outside of our control, such
as increased geopolitical unrest and increased volatility in the debt and equity markets, may have on our ability to consummate an initial
Business Combination; |
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| our public securities potential liquidity and trading; |
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| the lack of a market for our securities; |
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| the use of proceeds or funds not held in the Trust Account
(as defined below) or available to us from interest income on the Trust Account balance; |
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| the Trust Account not being subject to claims of third parties;
or |
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| our financial performance. |
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The forward-looking statements
contained in this Form 10-K are based on our current expectations and beliefs concerning future developments and their potential effects
on us. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements
involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or
performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties
include, but are not limited to, those factors described under the section of this Form 10-K entitled Risk Factors. Should
one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in
material respects from those projected in these forward-looking statements. We undertake no obligation to update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities
laws.
ii
Summary of Risk Factors
An investment in our securities
involves a high degree of risk. The occurrence of one or more of the events or circumstances described in the section titled *Risk
Factors*, alone or in combination with other events or circumstances, may materially adversely affect our business, financial
condition and operating results. In that event, the trading price of our securities could decline, and you could lose all or part of your
investment. Such risks include, but are not limited to:
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| We are a blank check company with no operating history and no revenues, and you have no basis on which
to evaluate our ability to achieve our business objective. | |
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| Our shareholders may not be afforded an opportunity to vote on our proposed initial Business Combination,
and even if we hold a vote, holders of our Founder Shares (as defined below) will participate in such vote, which means we may complete
our initial Business Combination even though a majority of our Public Shareholders (as defined below) do not support such a combination. | |
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| Your only opportunity to effect your investment decision regarding a potential Business Combination may
be limited to the exercise of your right to redeem your shares from us for cash. | |
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| If we seek shareholder approval of our initial Business Combination, our initial shareholders and management
team have agreed to vote in favor of such initial Business Combination, regardless of how our Public Shareholders vote, and we may not
need any Public Shares (as defined below) in addition to our Founder Shares to be voted in favor of an initial Business Combination in
order to approve an initial Business Combination. | |
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| The ability of our Public Shareholders to redeem their shares for cash may make our financial condition
unattractive to potential Business Combination targets, which may make it difficult for us to enter into a Business Combination with a
target. | |
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| The ability of our Public Shareholders to exercise redemption rights with respect to a large number of
our shares and the amount of deferred underwriting compensation may not allow us to complete the most desirable Business Combination or
optimize our capital structure, and may substantially dilute your investment in us. | |
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| The requirement that we complete our initial Business Combination within the duration of the Completion
Window (as defined below) may give potential target businesses leverage over us in negotiating a Business Combination and may limit the
time we have in which to conduct due diligence on potential Business Combination targets, in particular as we approach our dissolution
deadline, which could undermine our ability to complete our initial Business Combination on terms that would produce value for our shareholders. | |
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| Our search for an initial Business Combination, and any target business with which we may ultimately consummate
an initial Business Combination, may be materially adversely affected by current global geopolitical conditions resulting from the ongoing
Russia-Ukraine conflict and the recent escalation of conflict in the Middle East and Southwest Asia. | |
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| If we seek shareholder approval of our initial Business Combination, our Sponsor (as defined below), initial
shareholders, directors, officers, and their affiliates may elect to purchase shares or Public Warrants from Public Shareholders, which
may influence a vote on a proposed Business Combination and reduce the public float of our securities. | |
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| If a shareholder fails to receive notice of our offer to redeem our Public Shares in connection with our
initial Business Combination, or fails to comply with the procedures for tendering its shares, such shares may not be redeemed. | |
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| If we are deemed to be an investment company under the Investment Company Act of 1940, as amended (the
Investment Company Act), we may be required to institute burdensome compliance requirements and our activities may be restricted,
which may make it difficult for us to complete our initial Business Combination. | |
iii
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| Our executive officers and directors will allocate their time to other businesses thereby causing conflicts
of interest in their determination as to how much time to devote to our affairs. This conflict of interest could have a negative impact
on our ability to complete our initial Business Combination. | |
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| You will not have any rights or interests in funds from the Trust Account, except under certain limited
circumstances. Therefore, to liquidate your investment, you may be forced to sell your Public Shares or warrants, potentially at a loss. | |
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| Nasdaq may delist our securities from trading on its exchange, which could limit investors ability
to make transactions in our securities and subject us to additional trading restrictions. | |
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| The nominal purchase price paid by our initial shareholders for the Founder Shares may result in significant
dilution to the implied value of your Public Shares upon the consummation of our initial Business Combination, and our initial shareholders
are likely to make a substantial profit on their investment in us in the event we consummate an initial Business Combination, even if
the Business Combination causes the trading price of our ordinary shares to materially decline. | |
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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 ordinary shares at such time is substantially
less than $10.00 per share. | |
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| You will not be entitled to protections normally afforded to investors of other blank check companies
subject to Rule 419 of the Securities Act of 1933, as amended (the Securities Act). | |
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| Because of our limited resources and the significant competition for Business Combination opportunities,
it may be more difficult for us to complete our initial Business Combination. If we have not completed our initial Business Combination
within the required time period, our Public Shareholders may receive only approximately $10.00 per share, or less in certain circumstances,
on our redemption of their shares, and our warrants will expire worthless. | |
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| If the net proceeds of the IPO and the sale of the Private Placement Warrants (each as defined below)
not being held in the Trust Account are insufficient to allow us to operate for at least the duration of the Completion Window, it could
limit the amount of cash available to fund our search for a target business or businesses and complete our initial Business Combination,
and we will depend on loans from our Sponsor or management team to fund our search and to complete our initial Business Combination. | |
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| Past performance by our management team and their respective affiliates, including investments and transactions
in which they have participated and businesses with which they have been associated, may not be indicative of future performance of an
investment in the Company. | |
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| We may be a passive foreign investment company, or PFIC, which could result in adverse United
States federal income tax consequences to U.S. investors. | |
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| We may reincorporate in or transfer by way of continuation to another jurisdiction in connection with
our Business Combination, and such reincorporation may result in taxes imposed on shareholders or warrant holders. | |
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| The Excise Tax (as defined below) could be imposed on redemptions of our stock if we were to become a
covered corporation in the future. | |
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| As the number of special purpose acquisition companies evaluating targets increases, attractive targets
may become more scarce and there may be more competition for attractive targets or such attractive targets may not be interested in consummating
a Business Combination with a SPAC due to a negative public perception of mergers involving SPACs. This could increase the cost of our
initial Business Combination and could even result in our inability to find a target or to consummate an initial Business Combination. | |
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| Transactions in connection with or in anticipation of our initial Business Combination and our structure
thereafter may not be tax-efficient to our shareholders and warrant holders. As a result of our Business Combination, our tax obligations
may be more complex, burdensome and/or uncertain. | |
iv
Part
I
Item 1. Business
**
*References in this Form
10-K to we, us, our or the Company refer to Apex Treasury Corporation. References
to our management or our management team refer to our officers and directors.*
Introduction
We are a blank check company
incorporated on July 11, 2025 as a Cayman Islands exempted company for the purpose of effecting a merger, amalgamation, share exchange,
asset acquisition, share purchase, reorganization or similar business combination with one or more businesses (the Business Combination).
We have 24 months from the closing of our initial public offering (IPO or Initial Public Offering), or until
such earlier liquidation date as our board of directors may approve (the Completion Window), to complete our initial Business
Combination.
We have reviewed, and continue
to review, a number of opportunities to enter into a Business Combination, but we are not able to determine at this time whether we will
complete a Business Combination with any of the target businesses that we have reviewed or with any other target business. We may pursue
an initial Business Combination in any business or industry. We also have neither engaged in any operations nor generated any revenue
to date. Based on our business activities, the Company is a shell company as defined under the Securities Exchange Act of
1934, as amended (the Exchange Act), because we have no operations and nominal assets consisting almost entirely of cash.
The registration statement
for our IPO was declared effective on December 10, 2025. On December 12, 2025, we consummated the IPO of 17,250,000 units (the Units
and, with respect to the Class A Ordinary Shares included in the Units being offered, the Public Shares or Class
A Ordinary Shares), which included the exercise by the underwriters of their over-allotment option in full in the amount of 2,250,000
Units, at $10.00 per Unit, generating gross proceeds of $172,500,000. Each Unit consists of one Class A Ordinary Share and one-third of
one redeemable warrant of the Company (the Public Warrants), with each whole warrant entitling the holder thereof to purchase
one Class A Ordinary Share at $11.50 per share.
Simultaneously with the closing
of our IPO, we consummated the sale of an aggregate of 4,500,000 warrants (the Private Placement Warrants) at a price of
$1.00 per Private Placement Warrant, in a private placement to the Companys Sponsor, Bluerock Acquisition Holdings, LLC, a Delaware
limited liability company (the Sponsor), and Cantor Fitzgerald & Co. (Cantor), the representative of the
underwriters of the IPO, generating gross proceeds of $4,500,000. Of those 4,500,000 Private Placement Warrants, the Sponsor purchased
3,000,000 Private Placement Warrants and Cantor purchased 1,500,000 Private Placement Warrants.
Prior to the consummation
of the IPO, on July 23, 2025, our Sponsor made a capital contribution of $25,000, or approximately $0.003 per share, to cover certain
expenses on our behalf in exchange for issuance of 7,666,667 Class B Ordinary Shares (the Founder Shares). On November 6,
2025, our Sponsor surrendered 1,916,667 Founder Shares to us for no consideration. In November 2025, our Sponsor transferred an aggregate
of 60,000 Founder Shares to certain of our independent directors, resulting in our Sponsor holding 5,690,000 Founder Shares. On December
12, 2025, the underwriters exercised their over-allotment option in full and forfeited the unexercised balance. On January 23, 2026, our
Sponsor transferred 35,000 Founder Shares to an independent director, resulting in our Sponsor holding 5,655,000 Founder Shares and our
initial shareholders holding an aggregate of 5,750,000 Founder Shares.
1
Following the closing of the
IPO, on December 12, 2025, an amount of $172,500,000 ($10.00 per Unit) from the net proceeds of the sale of the Units in the IPO and the
sale of the Private Placement Warrants was placed in the Trust Account (the Trust Account) and can be held as cash or invested
in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds meeting certain conditions under
Rule 2a-7 under the Investment Company Act, which invest only in direct U.S. government treasury obligations and/or held as cash or cash
items (including in demand deposit accounts). Except with respect to interest earned on the funds held in the Trust Account that may be
released to the Company to pay its taxes, if any, the proceeds from the IPO and the sale of the Private Placement Warrants will not be
released from the Trust Account until the earliest of (i) the completion of the Companys initial Business Combination or an earlier
redemption in connection with the commencement of the procedures to consummate the initial Business Combination if the Company determines
it is desirable to facilitate the completion of the initial Business Combination, (ii) the redemption of the Companys Public Shares
if the Company is unable to complete the initial Business Combination within the Completion Window, subject to applicable law, or (iii)
the redemption of the Companys Public Shares properly submitted in connection with a shareholder vote to amend the Companys
amended and restated memorandum and articles of association to (A) modify the substance or timing of the Companys obligation to
allow redemption in connection with the initial Business Combination or to redeem 100% of the Companys Public Shares if the Company
has not consummated an initial Business Combination within the Completion Window or (B) with respect to any other material provisions
relating to shareholders rights or pre-initial Business Combination activity. The proceeds deposited in the Trust Account could
become subject to the claims of the Companys creditors, if any, which could have priority over the claims of the Companys
Public Shareholders. To mitigate the risk that might be deemed to be an investment company for purposes of the Investment Company Act,
which risk increases the longer that the Company holds investments in the Trust Account, the Company may, at any time (based on the management
teams ongoing assessment of all factors related to the Companys potential status under the Investment Company Act), instruct
the trustee to liquidate the investments held in the Trust Account and instead to hold the funds in the Trust Account in an interest bearing
bank demand deposit account at a bank.
Effecting Our Initial Business Combination
General
We are not presently engaged
in, and we will not engage in, any operations for an indefinite period of time. We intend to effectuate our initial Business Combination
using cash held in the Trust Account, the proceeds of the sale of our shares in connection with our initial Business Combination (including
pursuant to forward purchase agreements or backstop agreements we may enter into), shares issued to the owners of the target, debt issued
to bank or other lenders or the owners of the target, other securities issuances, or a combination of the foregoing. We may seek to complete
our initial Business Combination with a company or business that may be financially unstable or in its early stages of development or
growth, which would subject us to the numerous risks inherent in such companies and businesses.
We may need to obtain additional
financing to complete our initial Business Combination, either because the transaction requires more cash than is available from the proceeds
held in our Trust Account or because we become obligated to redeem a significant number of our Public Shares upon completion of the Business
Combination, in which case we may issue additional securities or incur debt in connection with such business combination. There are no
prohibitions on our ability to issue securities or incur debt in connection with our initial Business Combination. We are not currently
a party to any arrangement or understanding with any third party with respect to raising any additional funds through the sale of securities,
the incurrence of debt or otherwise.
Business Strategy
We believe that we will
be able to capitalize on the capabilities of Bluerocks platform, as well as the management teams broad industry experience.
Our sourcing strategy will draw on the depth and breadth of Bluerock and its principals relationships, built over three decades
of institutional investing, operating, and investment banking. Bluerocks principals and affiliates maintain long-standing connections
across a wide array of counterparties, including both broad global and specialized boutique investment banks, lenders, financial advisors,
operating partners, private equity sponsors, venture capital firms, and institutional allocators. These relationships have been cultivated
through direct deal experience, capital and JV partnerships, and the firms track record of managing assets across a diverse set
of fund structures and strategies.
We intend to activate this
network to generate a broad pipeline of proprietary and selectively marketed opportunities. We intend to focus our sourcing efforts on
companies at an inflection point in their growth trajectory seeking a strategic, long-term capital partner. By leveraging Bluerocks
brand equity, institutional credibility, and demonstrated history of partnering with management teams, we believe we are well-positioned
to access high-quality deal flow that may not be widely marketed.
2
Once we identify a suitable
target, our focus will shift to planning for long-term value creation. We approach each potential combination as a partnershipwith
a clear focus on working collaboratively with incumbent management to drive growth, improve operations, and prepare the company for the
rigors and responsibilities of public ownership. We intend to support the target business in a number of ways, including:
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| Sharpening strategic positioning and long-term planning; |
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| Advising on capital allocation, capital markets strategy,
and potential follow-on M |
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| Enhancing operational efficiency and margin optimization; |
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| Improving financial reporting, internal controls, and investor
communications; |
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| Elevating governance practices and public company readiness;
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| Helping recruit key board or executive talent where appropriate. |
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Our team brings experience
across multiple investment cycles and asset classes, and we understand the key drivers of durable shareholder value in the public markets.
We aim to be a differentiated partner who brings real institutional insight, strategic alignment, and a demonstrated ability to help growth
companies scale successfully in the public arena.
Selection of a Target Business and
Structuring of Our Initial Business Combination
The rules of Nasdaq and our
amended and restated memorandum and articles of association require that we complete one or more business combinations having an aggregate
fair market value of at least 80% of the value of the assets held in the Trust Account (excluding the deferred underwriting commissions
and taxes paid or payable on the interest earned on the Trust Account) at the time of our signing a definitive agreement in connection
with our initial Business Combination. Our board of directors will make the determination as to the fair market value of our initial Business
Combination. In the event that we seek to complete our initial Business Combination with a company that is affiliated with our Sponsor,
officers or directors (or their respective affiliates or related entities), we, or a committee of independent directors, will obtain an
opinion from an independent investment banking firm that is a member of FINRA, or an independent firm that commonly renders valuation
opinions for the type of company we are seeking to acquire or from an independent accounting firm, that our initial Business Combination
is fair to the Company from a financial point of view. We are not required to obtain such an opinion in any other context. Additionally,
pursuant to Nasdaq rules, our initial Business Combination must be approved by a majority of our independent directors.
We anticipate structuring
our initial Business Combination so that the post transaction company in which our Public Shareholders own shares will own or acquire
100% of the equity interests or assets of the target business or businesses. We may, however, structure our initial Business Combination
such that the post transaction company owns or acquires less than 100% of such interests or assets of the target business in order to
meet certain objectives of the target management team or shareholders or for other reasons, but we will only complete such business combination
if the post transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires
a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company
Act. Even if the post transaction company owns or acquires 50% or more of the voting securities of the target, our shareholders prior
to the initial Business Combination may collectively own a minority interest in the post transaction company, depending on valuations
ascribed to the target and us in the initial Business Combination. For example, we could pursue a transaction in which we issue a substantial
number of new shares in exchange for all of the outstanding capital stock, shares or other equity interests of a target. In this case,
we would acquire a 100% controlling interest in the target. However, as a result of the issuance of a substantial number of new shares,
our shareholders immediately prior to our initial Business Combination could own less than a majority of our issued and outstanding shares
subsequent to our initial Business Combination.
If less than 100% of the equity
interests or assets of a target business or businesses are owned or acquired by the post transaction company, the portion of such business
or businesses that is owned or acquired is what will be taken into account for purposes of the 80% of net assets test described above.
If the business combination involves more than one target business, the 80% of net assets test will be based on the aggregate value of
all of the target businesses.
3
Consistent with our business
strategy, we will look to identify companies that have compelling growth potential and a combination of the characteristics below. We
intend to use these criteria and guidelines in evaluating initial business combination opportunities, but we may decide to enter into
our initial business combination with a target that does not meet the following criteria:
|
| Robust growth prospects: Companies with a history
of or potential for above-average growth, particularly those in expanding or attractive end markets with favorable secular trends supporting
long-term expansion. This includes growth businesses whose future performance is expected to outpace historical results,
especially where clear drivers exist to bridge from past to projected performance (for example, new product launches, market expansion,
or operational improvements). |
|
|
| Recurring and Predictable Revenues:A stable,
recurring revenue stream or subscription-like business model that provides visibility into future cash flows. We favor companies with
high customer retention and long-term contracts or other revenue stability, as these factors tend to be rewarded by public market investors. |
|
|
| Experienced management team:A proven,
capable management team with a successful track record of executing on its business plan. We place strong emphasis on partnering with
skilled operators who are committed to the company and have demonstrated the ability to drive growth, manage risks, and create shareholder
value. |
|
|
| Comparable public peers:Businesses that
have well-understood and publicly traded comparables in their industry. The presence of comparable companies can help validate valuation
multiples and investor interest. Companies in sectors that are already followed by analysts and investors (or that fit into a known category)
are generally easier for the market to understand and appreciate. |
|
|
| Strong profitability and margins:Businesses
with healthy operating margins and a track record (or clear path) to robust earnings. While high-growth companies may be investing for
expansion, we will look for unit economics or gross margins that demonstrate the potential for sustainable profitability. |
|
|
| Favorable industry dynamics:Companies
operating in sectors that are growing and supported by favorable macro-economic or technological tailwinds. We seek targets in industries
with attractive, expanding total addressable markets and secular dynamics that can underpin continued growth (for example, digital transformation,
demographic shifts, or supply/demand imbalances in an emerging market). |
|
|
| Moderate leverage:A
sound balance sheet with low to moderate leverage (debt) levels, or a clear and feasible plan to maintain prudent leverage post-transaction.
We are not inclined to acquire a highly levered business; ideally, the targets Debt/EBITDA ratio would be conservative, allowing
for flexibility and further investment in growth. |
|
These criteria and guidelines
are not intended to be exhaustive. Any evaluation relating to the merits of a particular initial Business Combination may be based, to
the extent relevant, on these general criteria and guidelines as well as other considerations, factors, guidelines and criteria that our
management may deem relevant. In the event that we decide to enter into our initial Business Combination with a target business that does
not meet the above criteria and guidelines, we will disclose that the target business does not meet the above criteria and guidelines
in our shareholder communications related to our initial Business Combination, which would be in the
form of proxy solicitation materials or tender offer documents, as applicable, that we would file with the U.S. Securities and Exchange
Commission (the SEC).
4
In evaluating a prospective
target business, we expect to conduct a thorough due diligence review that may encompass, among other things, meetings with incumbent
management and employees, document reviews, interviews of customers and suppliers, inspection of facilities, as applicable, as well as
a review of financial, operational, legal and other information which will be made available to us. If we determine to move forward with
a particular target, we will proceed to structure and negotiate the terms of the initial Business Combination transaction.
The time required to select
and evaluate a target business and to structure and complete our initial Business Combination, and the costs associated with this process,
are not currently ascertainable with any degree of certainty. Any costs incurred with respect to the identification and evaluation of,
and negotiation with, a prospective target business with which our initial Business Combination is not ultimately completed will result
in our incurring losses and will reduce the funds we can use to complete another business combination.
We are not prohibited from
pursuing an initial Business Combination with a company that is affiliated with our Sponsor, officers or directors (or their respective
affiliates or related entities). In the event that we seek to complete our Initial Business Combination with a company that is affiliated
(as defined in our amended and restated memorandum and articles of association) with our Sponsor, officers or directors (or their respective
affiliates or related entities), we, or a committee of independent directors, will obtain an opinion from an independent investment banking
firm which is a member of FINRA or a valuation or appraisal firm stating that the consideration to be paid by us in such an initial business
combination is fair to our company from a financial point of view. We are not required to obtain such an opinion in any other context.
Members of our management
team and our independent directors directly or indirectly own Founder Shares and Private Placement Warrants and, accordingly, may have
a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate our initial
Business Combination. The low price that our Sponsor, executive officers and directors (directly or indirectly) paid for the Founder Shares
creates an incentive whereby our officers and directors could potentially make a substantial profit even if we select an acquisition target
that subsequently declines in value and is unprofitable for Public Shareholders. If we are unable to complete our initial Business Combination
within the Completion Window, the Founder Shares and Private Placement Warrants may expire worthless, except to the extent they receive
liquidating distributions from assets outside the Trust Account, which could create an incentive for our Sponsor, executive officers and
directors to complete a transaction even if we select an acquisition target that subsequently declines in value and is unprofitable for
Public Shareholders. Further, each of our officers and directors may have a conflict of interest with respect to evaluating a particular
business combination if the retention or resignation of any such officers and directors was included by a target business as a condition
to any agreement with respect to our initial Business Combination.
Each of our officers and directors
presently has, and any of them in the future may have additional, fiduciary, contractual or other obligations to another entity pursuant
to which such officer or director is or will be required to present a business combination opportunity to such entity. Our amended and
restated memorandum and articles of association provide that to the fullest extent permitted by applicable law: (i) no individual serving
as a director or an officer shall have any duty, except and to the extent expressly assumed by contract, to refrain from engaging directly
or indirectly in the same or similar business activities or lines of business as us; and (ii) we renounce any interest or expectancy in,
or in being offered an opportunity to participate in, any potential transaction or matter which may be a corporate opportunity for to
any director or officer on the one hand, and us, on the other. Accordingly, if any of our officers or directors becomes aware of a business
combination opportunity which is suitable for an entity to which he or she has then current fiduciary or contractual obligations, he or
she will honor his or her fiduciary or contractual obligations to present such business combination opportunity to such other entity,
subject to their fiduciary duties under Cayman Islands law.
5
In
addition, our Sponsor and our officers and directors may sponsor or form other special purpose acquisition companies similar to ours or
may pursue other business or investment ventures during the period in which we are seeking an initial Business Combination. As a result,
our Sponsor, officers and directors could have conflicts of interest in determining whether to present business combination opportunities
to us or to any other special purpose acquisition company with which they may become involved. Any such companies, businesses or investments
may present additional conflicts of interest in pursuing an initial Business Combination. However, we do not believe that such duties
or obligations will materially affect our ability to complete our initial Business Combination.
Redemption Rights for Public Shareholders
upon Completion of our Initial Business Combination
We will provide our Public
Shareholders with the opportunity to redeem all or a portion of their Public Shares in connection with the completion of our initial Business
Combination either (i) in connection with a general meeting called to approve the Business Combination or (ii) without a shareholder vote
by means of a tender offer. Each Public Shareholder may elect to redeem its Public Shares irrespective of whether they vote for or against
the initial Business Combination, or whether they do not vote or abstain from voting on the initial Business Combination, or whether they
were a shareholder on the record date for the shareholder meeting held to approve the initial Business Combination. The decision as to
whether we will seek shareholder approval of a proposed Business Combination or conduct a tender offer will be made by us, solely in our
discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would
require us to seek shareholder approval under applicable law or stock exchange listing requirement or whether we were deemed to be a foreign
private issuer (which would require a tender offer rather than seeking shareholder approval under SEC rules). Asset acquisitions and share
purchases would not typically require shareholder approval while direct mergers with our Company and any transactions where we issue more
than 20% of our issued and outstanding Class A Ordinary Shares or seek to amend our amended and restated memorandum and articles of association
would require shareholder approval. So long as we obtain and maintain a listing for our securities on Nasdaq, we will be required to comply
with Nasdaqs shareholder approval rules.
The requirement that we provide
our Public Shareholders with the opportunity to redeem their Public Shares by one of the two methods listed above are contained in provisions
of our amended and restated memorandum and articles of association and will apply whether or not we maintain our registration under the
Exchange Act or our listing on Nasdaq. Such provisions may be amended if approved by a special resolution, which requires the affirmative
vote of at least two-thirds of the votes cast by the shareholders of the issued shares present in person or represented by proxy and entitled
to vote on such matter at a general meeting of the company, so long as we offer redemption in connection with such amendment.
If we provide our Public Shareholders
with the opportunity to redeem their Public Shares in connection with a general meeting, we will, pursuant to our amended and restated
memorandum and articles of association:
|
| conduct the redemptions in conjunction with a proxy solicitation
pursuant to Regulation 14A of the Exchange Act, which regulates the solicitation of proxies, and not pursuant to the tender offer rules,
and |
|
|
| file proxy materials with the SEC. |
|
In the event that we seek
shareholder approval of our initial Business Combination, we will distribute proxy materials and, in connection therewith, provide our
Public Shareholders with the redemption rights described above upon completion of the initial Business Combination.
If we seek shareholder approval,
we will complete our initial Business Combination only if we obtain the approval of an ordinary resolution under Cayman Islands law and
our amended and restated memorandum and articles of association, which requires the affirmative vote of a majority of the votes
cast by the shareholders of the issued shares present in person or represented by proxy and entitled to vote on such matter at a general
meeting of the company. A quorum for such meeting will be present if the holders of one-third of issued and outstanding shares entitled
to vote at the meeting are represented in person or by proxy. Our Sponsor, officers and directors will count toward this quorum and, pursuant
to the letter agreement, our Sponsor, officers and directors have agreed to vote their Founder Shares and any Public Shares purchased
during or after our IPO (including in open market and privately-negotiated transactions) in favor of our initial Business Combination.
For purposes of seeking approval of an ordinary resolution, non-votes will have no effect on the approval of our initial Business Combination
once a quorum is obtained. Assuming that only the holders of one-third of our issued and outstanding ordinary shares, representing a quorum
under our amended and restated memorandum and articles of association, vote their ordinary shares at a general meeting of the Company,
we will not need any Public Shares in addition to our Founder Shares to be voted in favor of an initial Business Combination in order
to approve an initial Business Combination. However, if our initial Business Combination is structured as a statutory merger or consolidation
with another company under Cayman Islands law, the approval of our initial Business Combination will require the approval of a special
resolution, which requires the affirmative vote of at least two-thirds of the votes cast by the shareholders of the issued shares present
in person or represented by proxy and entitled to vote on such matter at a general meeting of the company. Each Public Shareholder may
elect to redeem their Public Shares irrespective of whether they do not vote or abstain from voting on the proposed transaction or whether
they were a Public Shareholder on the record date for the general meeting held to approve the proposed transaction.
6
If a shareholder vote is not
required and we do not decide to hold a shareholder vote for business or other legal reasons, we will:
|
| conduct the redemptions pursuant to Rule 13e-4 and Regulation
14E of the Exchange Act, which regulate issuer tender offers, and |
|
|
| file tender offer documents with the SEC prior to completing
our initial Business Combination which contain substantially the same financial and other information about the initial Business Combination
and the redemption rights as is required under Regulation 14A of the Exchange Act, which regulates the solicitation of proxies. |
|
In the event we conduct redemptions
pursuant to the tender offer rules, our offer to redeem will remain open for at least 20 business days, in accordance with Rule 14e-1(a)
under the Exchange Act, and we will not be permitted to complete our initial Business Combination until the expiration of the tender offer
period. In addition, the tender offer will be conditioned on Public Shareholders not tendering more than the number of Public Shares we
are permitted to redeem. If Public Shareholders tender more shares than we have offered to purchase, we will withdraw the tender offer
and not complete the initial Business Combination.
Upon the public announcement
of our initial Business Combination, if we elect to conduct redemptions pursuant to the tender offer rules, we or our Sponsor will terminate
any plan established in accordance with Rule 10b5-1 to purchase our Class A Ordinary Shares in the open market, in order to comply with
Rule 14e-5 under the Exchange Act.
We intend to require our Public
Shareholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in street name,
to, at the holders option, either deliver their share certificates to our transfer agent or deliver their shares to our transfer
agent electronically using the Depository Trust Companys DWAC (Deposit/Withdrawal At Custodian) system, prior to the date set forth
in the proxy materials or tender offer documents, as applicable. In the case of proxy materials, this date may be up to two business days
prior to the scheduled vote on the proposal to approve the initial Business Combination. In addition, if we conduct redemptions in connection
with a shareholder vote, we intend to require a Public Shareholder seeking redemption of its Public Shares to also submit a written request
for redemption to our transfer agent two business days prior to the scheduled vote in which the name of the beneficial owner of such shares
is included. The proxy materials or tender offer documents, as applicable, that we will furnish to holders of our Public Shares in connection
with our initial Business Combination will indicate whether we are requiring Public Shareholders to satisfy such delivery requirements.
We believe that this will allow our transfer agent to efficiently process any redemptions without the need for further communication or
action from the redeeming Public Shareholders, which could delay redemptions and result in additional administrative cost. If the proposed
initial Business Combination is not approved and we continue to search for a target company, we will promptly return any certificates
or shares delivered by Public Shareholders who elected to redeem their shares.
We will provide our Public
Shareholders with the opportunity to redeem, regardless of whether they abstain, vote for, or against, our initial Business Combination,
all or a portion of their Public Shares upon the completion of our initial Business Combination at a per-share price, payable in cash,
equal to the aggregate amount then on deposit in the Trust Account calculated as of two business days prior to the consummation of the
initial Business Combination, including interest (which interest shall be net of taxes paid or payable), divided by the number of then
issued and outstanding Public Shares, subject to the limitations and on the conditions described herein. The amount in the Trust Account
is initially anticipated to be $10.00 per Public Share. The per share amount we will distribute to investors who properly redeem their
shares will not be reduced by the deferred underwriting commissions we will pay to the underwriters. The redemption rights will include
the requirement that any beneficial owner on whose behalf a redemption right is being exercised must identify itself in order to validly
redeem its shares. Our Sponsor, officers and directors have entered into a letter agreement with us, pursuant to which they have agreed
to waive their redemption rights with respect to their Founder Shares and any Public Shares they may hold in connection with the completion
of our initial Business Combination or an earlier redemption in connection with the commencement of the consummation of the initial Business
Combination if we determine it is desirable to facilitate the completion of the initial Business Combination.
7
Our proposed initial Business
Combination may impose a minimum cash requirement for (i) cash consideration to be paid to the target or its owners, (ii) cash for working
capital or other general corporate purposes or (iii) the retention of cash to satisfy other conditions. In the event the aggregate cash
consideration we would be required to pay for all Public Shares that are validly submitted for redemption plus any amount required to
satisfy cash conditions pursuant to the terms of the proposed initial Business Combination exceed the aggregate amount of cash available
to us, we will not complete the initial Business Combination or redeem any shares, and all Public Shares submitted for redemption will
be returned to the holders thereof. We may, however, raise funds through the issuance of equity-linked securities or through loans, advances
or other indebtedness in connection with our initial Business Combination, including pursuant to forward purchase agreements or backstop
arrangements we may enter into following the consummation of our Initial Public Offering, in order to, among other reasons, satisfy such
net tangible assets or minimum cash requirements.
If we seek shareholder approval
of our initial Business Combination and we do not conduct redemptions in connection with our initial Business Combination pursuant to
the tender offer rules, our Sponsor, initial shareholders, directors, officers or their affiliates may purchase Public Shares or Public
Warrants in privately negotiated transactions or in the open market either prior to or following the completion of our initial Business
Combination, although they are under no obligation or duty to do so. Such a purchase may include a contractual acknowledgment that such
shareholder, although still the record holder of our shares, is no longer the beneficial owner thereof and therefore agrees not to exercise
its redemption rights.
In the event that our Sponsor,
initial shareholders, directors, officers or their affiliates purchase shares in privately negotiated transactions from Public Shareholders
who have already elected to exercise their redemption rights, such selling shareholders would be required to revoke their prior elections
to redeem their shares.
The purpose of any such purchases
of shares could be to (i) vote such shares in favor of the business combination and thereby increase the likelihood of obtaining shareholder
approval of the business combination or (ii) to satisfy a closing condition in an agreement with a target that requires us to have a minimum
net worth or a certain amount of cash at the closing of our initial Business Combination, where it appears that such requirement would
otherwise not be met. The purpose of any such purchases of Public Warrants could be to reduce the number of Public Warrants outstanding
or to vote such warrants on any matters submitted to the warrant holders for approval in connection with our initial Business Combination.
Any such purchases of our securities may result in the completion of our initial Business Combination that may not otherwise have been
possible.
In addition, if such purchases
are made, the public float of our Class A Ordinary Shares or Public Warrants may be reduced and the number of beneficial
holders of our securities may be reduced, which may make it difficult to maintain or obtain the quotation, listing or trading of our securities
on a national securities exchange.
Our Sponsor, officers, directors
and/or their affiliates anticipate that they may identify the shareholders with whom our initial shareholders, officers, directors or
their affiliates may pursue privately negotiated purchases by either the shareholders contacting us directly or by our receipt of redemption
requests submitted by shareholders (in the case of Class A Ordinary Shares) following our mailing of proxy materials in connection with
our initial Business Combination. To the extent that our Sponsor, officers, directors or their affiliates enter into a private purchase,
they would identify and contact only potential selling shareholders who have expressed their election to redeem their shares for a pro
rata share of the Trust Account or vote against our initial Business Combination, whether or not such shareholder has already submitted
a proxy with respect to our initial Business Combination but only if such shares have not already been voted at the general meeting related
to our initial Business Combination. Our Sponsor, officers, directors or any of their affiliates will select which shareholders to purchase
shares from based on a negotiated price and number of shares and any other factors that they may deem relevant, and will only purchase
shares if such purchases comply with Regulation M under the Exchange Act and the other federal securities laws. Our Sponsor, officers,
directors and/or their affiliates will not make purchases of shares if the purchases would violate Section 9(a)(2) or Rule 10b-5 of the
Exchange Act. Any such purchases will be reported pursuant to Section 13 and Section 16 of the Exchange Act to the extent such purchasers
are subject to such reporting requirements.
8
Our Sponsor, initial shareholders,
directors, officers and their affiliates will be restricted from making purchases of shares if the purchases would violate Section 9(a)(2)
or Rule 10b-5 of the Exchange Act. Any such purchases will be reported pursuant to Section 13 and Section 16 of the Exchange Act to the
extent such purchasers are subject to such reporting requirements. Additionally, in the event our Sponsor, initial shareholders, directors,
officers and their affiliates were to purchase Public Shares or warrants from Public Shareholders, such purchases would be structured
in compliance with the requirements of Rule 14e-5 under the Exchange Act including, in pertinent part, through adherence to the following:
|
| our registration statement/proxy statement filed for our business
combination transaction would disclose the possibility that our Sponsor, initial shareholders, directors, officers and their affiliates
may purchase Public Shares or warrants from Public Shareholders outside the redemption process, along with the purpose of such purchases; |
|
|
| if our Sponsor, initial shareholders, directors, officers
or their affiliates were to purchase Public Shares or warrants from Public Shareholders, they would do so at a price no higher than the
price offered through our redemption process; |
|
|
| our registration statement/proxy statement filed for our business
combination transaction would include a representation that any of our securities purchased by our Sponsor, initial shareholders, directors,
officers or their affiliates would not be voted in favor of approving the business combination transaction; |
|
|
| our Sponsor, initial shareholders, directors, officers or
their affiliates would not possess any redemption rights with respect to our securities or, if they do acquire and possess redemption
rights, they would waive such rights; and |
|
|
| we would disclose in a Form 8-K, before our security holder
meeting to approve the Business Combination transaction, the following material items: |
|
|
| the amount of our securities purchased outside of the redemption
offer by our Sponsor, initial shareholders, directors, officers or their affiliates, along with the purchase price; |
|
|
| the purpose of the purchases by our Sponsor, initial shareholders,
directors, officers or their affiliates; |
|
|
| the impact, if any, of the purchases by our Sponsor, initial
shareholders, directors, officers or their affiliates on the likelihood that the business combination transaction will be approved; |
|
|
| the identities of our security holders who sold to our Sponsor,
initial shareholders, directors, officers or their affiliates (if not purchased on the open market) or the nature of our security holders
(e.g., 5% security holders) who sold to our Sponsor, initial shareholders, directors, officers or their affiliates; and |
|
|
| the number of our securities for which we have received redemption
requests pursuant to our redemption offer. |
|
Please see *Item
1A. Risk Factors - If we seek shareholder approval of our initial Business Combination, our Sponsor, initial shareholders, directors,
executive officers and their affiliates may elect to purchase shares or Public Warrants from Public Shareholders, which may influence
a vote on a proposed business combination and reduce the public float of our securities.*
9
Notwithstanding the foregoing,
if we seek shareholder approval of our initial Business Combination and we do not conduct redemptions in connection with our initial Business
Combination pursuant to the tender offer rules, our amended and restated memorandum and articles of association provide that a Public
Shareholder, together with any affiliate of such Public Shareholder or any other person with whom such Public Shareholder is acting in
concert or as a group (as defined under Section 13 of the Exchange Act), will be restricted from seeking redemption rights
with respect to more than an aggregate of 15% of the Public Shares without our prior consent (the Excess Shares). We believe
this restriction will discourage shareholders from accumulating large blocks of shares, and subsequent attempts by such holders to use
their ability to exercise their redemption rights against a proposed business combination as a means to force us or our management to
purchase their shares at a significant premium to the then-current market price or on other undesirable terms. Absent this provision,
a Public Shareholder holding more than an aggregate of 15% of the Public Shares could threaten to exercise its redemption rights if such
holders shares are not purchased by us, our Sponsor or our management at a premium to the then-current market price or on other
undesirable terms. By limiting our shareholders ability to redeem no more than 15% of the Public Shares, we believe we will limit
the ability of a small group of shareholders to unreasonably attempt to block our ability to complete our initial Business Combination,
particularly in connection with a business combination with a target that requires as a closing condition that we have a minimum net worth
or a certain amount of cash. However, we would not be restricting our shareholders ability to vote all of their shares (including
Excess Shares) for or against our initial Business Combination.
Redemption of Public Shares if No
Initial Business Combination
Our amended and restated memorandum
and articles of association provide that we will have only the duration of the Completion Window to complete our initial Business Combination.
If we are unable to complete our initial Business Combination within the Completion Window, we will as promptly as reasonably possible
but not more than ten business days thereafter (and subject to lawfully available funds therefor), redeem the Public Shares, at a per-share
price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest (which interest shall be
net of taxes paid or payable and up to $100,000 of interest to pay liquidation expenses), divided by the number of then issued and outstanding
Public Shares, which redemption will completely extinguish Public Shareholders rights as shareholders (including the right to receive
further liquidating distributions, if any), subject to our obligations under Cayman Islands law to provide for claims of creditors and
subject to the other requirements of applicable law.
Our Sponsor, officers and
directors have entered into a letter agreement with us, pursuant to which they have waived their rights to liquidating distributions from
the Trust Account with respect to any Founder Shares held by them if we fail to complete our initial Business Combination within the Completion
Window, although they will be entitled to liquidating distributions from assets outside the Trust Account. However, if our Sponsor or
management team acquire Public Shares in or after our Initial Public Offering, they will be entitled to liquidating distributions from
the Trust Account with respect to such Public Shares, and to liquidating distributions from assets outside the Trust Account, if we fail
to complete our initial Business Combination within the allotted Completion Window.
Our Sponsor, officers and
directors have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated memorandum
and articles of association (A) to modify the substance or timing of our obligation to allow redemption in connection with our initial
Business Combination or to redeem 100% of our Public Shares if we do not complete our initial Business Combination within the Completion
Window or (B) with respect to any other material provisions relating to shareholders rights or pre-initial Business Combination
activity, unless we provide our Public Shareholders with the opportunity to redeem their Public Shares upon approval of any such amendment
at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest (which interest
shall be net of taxes paid or payable), divided by the number of then issued and outstanding Public Shares.
We expect that all costs and
expenses associated with our liquidation, as well as payments to any creditors, will be funded from amounts remaining out of the approximately
$750,000 of proceeds held outside the Trust Account, although we cannot assure you that there will be sufficient funds for such purpose.
However, if those funds are not sufficient to cover the costs and expenses associated with our liquidation, to the extent that there is
any interest accrued in the Trust Account not required to pay taxes, we may request the trustee to release to us an additional amount
of up to $100,000 of such accrued interest to pay those costs and expenses.
10
If we were to expend all of
the net proceeds of our Initial Public Offering and the sale of the Private Placement Warrants, other than the proceeds deposited in the
Trust Account, and without taking into account interest, if any, earned on the Trust Account, the per-share redemption amount received
by shareholders upon our dissolution would be approximately $10.00. The proceeds deposited in the Trust Account could, however, become
subject to the claims of our creditors which would have higher priority than the claims of our Public Shareholders. We cannot assure you
that the actual per-share redemption amount received by shareholders will not be substantially less than $10.00. While we intend to pay
such amounts, if any, we cannot assure you that we will have funds sufficient to pay or provide for all creditors claims.
Although we will seek to have
all vendors, service providers, prospective target businesses and other entities with which we do business execute agreements with us
waiving any right, title, interest or claim of any kind in or to any monies held in the Trust Account for the benefit of our Public Shareholders,
there is no guarantee that they will execute such agreements or even if they execute such agreements that they would be prevented from
bringing claims against the Trust Account including but not limited to fraudulent inducement, breach of fiduciary responsibility or other
similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain an advantage with respect
to a claim against our assets, including the funds held in the Trust Account. If any third party refuses to execute an agreement waiving
such claims to the monies held in the Trust Account, our management will consider whether competitive alternatives are reasonably available
to us and will only enter into an agreement with such third party if management believes that such third partys engagement would
be in the best interests of the company under the circumstances. Examples of possible instances where we may engage a third party that
refuses to execute a waiver include the engagement of a third party consultant whose particular expertise or skills are believed by management
to be significantly superior to those of other consultants that would agree to execute a waiver or in cases where management is unable
to find a service provider willing to execute a waiver. WithumSmith+Brown, PC, our independent registered public accounting firm, and
the underwriters of our Initial Public Offering will not execute agreements with us waiving such claims to the monies held in the Trust
Account. In addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a result
of, or arising out of, any negotiations, contracts or agreements with us and will not seek recourse against the Trust Account for any
reason. In order to protect the amounts held in the Trust Account, our Sponsor has agreed that it will be liable to us if and to the extent
any claims by a third party for services rendered or products sold to us (except for the Companys independent registered public
accounting firm), or a prospective target business with which we have entered into a written letter of intent, confidentiality or other
similar agreement or business combination agreement, reduce the amount of funds in the Trust Account to below the lesser of (i) $10.00
per Public Share and (ii) the actual amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust
Account, if less than $10.00 per share due to reductions in the value of the trust assets, in each case less taxes paid or payable and
up to $100,000 of interests to pay liquidation expenses, provided that such liability will not apply to any claims by a third party or
prospective target business who executed a waiver of any and all rights to the monies held in the Trust Account (whether or not such waiver
is enforceable) nor will it apply to any claims under our indemnity of the underwriters of our Initial Public Offering against certain
liabilities, including liabilities under the Securities Act. However, we have not asked our Sponsor to reserve for such indemnification
obligations, nor have we independently verified whether our Sponsor has sufficient funds to satisfy its indemnity obligations and we believe
that our Sponsors only assets are securities of our company. Therefore, we cannot assure you that our Sponsor would be able to
satisfy those obligations. As a result, if any such claims were successfully made against the Trust Account, the funds available for our
initial Business Combination and redemptions could be reduced to less than $10.00 per Public Share. In such event, we may not be able
to complete our initial Business Combination, and you would receive such lesser amount per share in connection with any redemption of
your Public Shares. None of our officers or directors will indemnify us for claims by third parties including, without limitation, claims
by vendors and prospective target businesses.
In the event that the proceeds
in the Trust Account are reduced below the lesser of (i) $10.00 per Public Share and (ii) the actual amount per Public Share held in the
Trust Account as of the date of the liquidation of the Trust Account if less than $10.00 per share due to reductions in the value of the
trust assets, in each case less taxes paid or payable and up to $100,000 of interest to pay liquidation expenses, and our Sponsor asserts
that it is unable to satisfy its indemnification obligations or that it has no indemnification obligations related to a particular claim,
our independent directors would determine whether to take legal action against our Sponsor to enforce its indemnification obligations.
While we currently expect that our independent directors would take legal action on our behalf against our Sponsor to enforce its indemnification
obligations to us, it is possible that our independent directors in exercising their business judgment may choose not to do so in any
particular instance if, for example, the cost of such legal action is deemed by the independent directors to be too high relative to the
amount recoverable or if the independent directors determine that a favorable outcome is not likely. Accordingly, we cannot assure you
that due to claims of creditors the actual value of the per-share redemption price will not be less than $10.00 per share.
11
We will seek to reduce the
possibility that our Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service
providers, prospective target businesses or other entities with which we do business execute agreements with us waiving any right, title,
interest or claim of any kind in or to monies held in the Trust Account. Our Sponsor will also not be liable as to any claims under our
indemnity of the underwriters of our Initial Public Offering against certain liabilities, including liabilities under the Securities Act.
We will have access to up to approximately $1,000,000 from the proceeds of our Initial Public Offering with which to pay any such potential
claims (including costs and expenses incurred in connection with our liquidation, currently estimated to be no more than approximately
$100,000). In the event that we liquidate and it is subsequently determined that the reserve for claims and liabilities is insufficient,
shareholders who received funds from our Trust Account could be liable for claims made by creditors.
If we file a bankruptcy or
winding-up petition or an involuntary bankruptcy or winding-up petition is filed against us that is not dismissed, the proceeds held in
the Trust Account could be subject to applicable bankruptcy or insolvency law, and may be included in our bankruptcy or insolvency estate
and subject to the claims of third parties with priority over the claims of our shareholders. To the extent any bankruptcy or insolvency
claims deplete the Trust Account, we cannot assure you we will be able to return $10.00 per share to our Public Shareholders. Additionally,
if we file a bankruptcy or winding-up petition or an involuntary bankruptcy or winding-up petition is filed against us that is not dismissed,
any distributions received by shareholders could be viewed under applicable debtor/creditor and/or bankruptcy/insolvency laws as either
a preferential transfer or a fraudulent conveyance, preference or disposition. As a result, a liquidator,
bankruptcy or insolvency court could seek to recover some or all amounts received by our shareholders. Furthermore, our board of directors
may be viewed as having breached its fiduciary duty to us or our creditors and/or may have acted in bad faith, and thereby exposing itself
and our company to claims of punitive damages, by paying Public Shareholders from the Trust Account prior to addressing the claims of
creditors. We cannot assure you that claims will not be brought against us for these reasons.
Our Public Shareholders will
be entitled to receive funds from the Trust Account only (i) in the event of the redemption of our Public Shares if we do not complete
our initial Business Combination within the Completion Window, (ii) in connection with a shareholder vote to amend our amended and restated
memorandum and articles of association (A) to modify the substance or timing of our obligation to allow redemption in connection with
our initial Business Combination or to redeem 100% of our Public Shares if we do not complete our initial Business Combination within
the Completion Window or (B) with respect to any other material provisions relating to shareholders rights or pre-initial Business
Combination activity or (iii) if they redeem their respective shares for cash in connection with the completion of our initial Business
Combination. In no other circumstances will a shareholder have any right or interest of any kind to or in the Trust Account. In the event
that we seek shareholder approval in connection with our initial Business Combination, a shareholders voting in connection with
the business combination alone will not result in a shareholders redeeming its shares to us for an applicable pro rata share of
the Trust Account. Such shareholder must have also exercised its redemption rights described above. These provisions of our amended and
restated memorandum and articles of association, like all provisions of our amended and restated memorandum and articles of association,
may be amended with a shareholder vote.
Competition
In identifying, evaluating
and selecting a target business for our initial Business Combination, we may encounter competition from other entities having a business
objective similar to ours, including other special purpose acquisition companies, private equity groups and leveraged buyout funds, public
companies and operating businesses seeking strategic acquisitions. Many of these entities are well established and have extensive experience
identifying and effecting Business Combinations directly or through affiliates. Moreover, many of these competitors possess similar or
greater financial, technical, human and other resources than us. Our ability to acquire larger target businesses will be limited by our
available financial resources. This inherent limitation gives others an advantage in pursuing the acquisition of a target business. Furthermore,
our obligation to pay cash in connection with our Public Shareholders who exercise their redemption rights may reduce the resources available
to us for our initial Business Combination and our outstanding warrants, and the future dilution they potentially represent, may not be
viewed favorably by certain target businesses. Either of these factors may place us at a competitive disadvantage in successfully negotiating
an initial Business Combination.
12
Employees
We currently have eight officers:
R. Ramin Kamfar, Jordan B. Ruddy, Ryan S. MacDonald, Simon Adamiyatt, Christopher Vohs, Jason Emala, Harrison Seideman and Julia Phillips.
These individuals are not obligated to devote any specific number of hours to our matters but they intend to devote as much of their time
as they deem necessary to our affairs until we have completed our initial Business Combination. The amount of time they will devote in
any time period will vary based on whether a target business has been selected for our initial Business Combination and the stage of the
business combination process we are in. We do not intend to have any full time employees prior to the completion of our initial Business
Combination.
Available Information
We are required to file Annual
Reports on Form 10-K and Quarterly Reports on Form 10-Q with the SEC on a regular basis, and are required to disclose certain material
events (e.g., changes in corporate control, acquisitions or dispositions of a significant amount of assets other than in the ordinary
course of business and bankruptcy) in a Current Report on Form 8-K. The SEC maintains an Internet website that contains reports, proxy
and information statements and other information regarding issuers that file electronically with the SEC. The SECs Internet website
is located at *http://www.sec.gov*. In addition, we will provide copies of these documents without charge upon request from us in
writing at 919 Third Avenue, New York, New York 10022 or by telephone at (212) 843-1601.
Emerging Growth Company, Smaller Reporting
Company and Controlled Company
We are an emerging
growth company, as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act. As such, we are eligible to take
advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging
growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section
404 of the Sarbanes- Oxley Act reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements,
and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and shareholder approval of any
golden parachute payments not previously approved. If some investors find our securities less attractive as a result, there may be a less
active trading market for our securities and the prices of our securities may be more volatile.
In addition, Section 107 of
the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided
in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an emerging
growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies.
We intend to take advantage of the benefits of this extended transition period.
We will remain an emerging
growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of our IPO,
(b) in which we have total annual gross revenue of at least $1.235 billion, or (c) in which we are deemed to be a large accelerated filer,
which means the market value of our Class A Ordinary Shares that are held by non-affiliates exceeds $700 million as of the prior June
30, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period.
References herein to emerging growth company will have the meaning associated with it in the JOBS Act.
Additionally, we are a smaller
reporting company as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced
disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller
reporting company until the last day of the fiscal year in which (1) the market value of our ordinary shares held by non-affiliates is
equal to or exceeds $250 million as of the prior June 30, or (2) our annual revenues equaled or exceeded $100 million during such completed
fiscal year and the market value of our ordinary shares held by non-affiliates is equal to or exceeds $700 million as of the prior June
30.
In addition, prior to the
consummation of a Business Combination, only holders of our Class B Ordinary Shares will have the right to vote on the appointment or
removal of directors. As a result, Nasdaq will consider us to be a controlled company within the meaning of Nasdaq corporate
governance standards. Under Nasdaq corporate governance standards, a company of which more than 50% of the voting power for the appointment
of directors is held by an individual, group or another company is a controlled company and may elect not to comply with
certain corporate governance requirements. We currently do not intend to rely on the controlled company exemption, but may
do so in the future. Accordingly, if we choose to do so, you will not have the same protections afforded to shareholders of companies
that are subject to all of the Nasdaq corporate governance requirements.
13
Item 1A. Risk Factors
An investment in our
securities involves a high degree of risk. You should consider carefully all of the risks described below, together with the other information
contained in this Form 10-K. If any of the following events occur, our business, financial condition and operating results may be materially
adversely affected. In that event, the trading price of our securities could decline, and you could lose all or part of your investment.
Risks Relating to our Search for, Consummation
of*,* or Inability to Consummate, a *Business Combination*
**
*Our shareholders may not be afforded an
opportunity to vote on our proposed initial Business Combination, and even if we hold a vote, holders of our Founder Shares will participate
in such vote, which means we may complete our initial Business Combination even though a majority of our Public Shareholders do not support
such a combination.*
We may choose not to hold a shareholder vote to
approve our initial Business Combination if the Business Combination would not require shareholder approval under applicable law or stock
exchange listing requirement. Except for as required by applicable law or stock exchange requirement, the decision as to whether we will
seek shareholder approval of a proposed Business Combination or will allow shareholders to sell their shares to us in a tender offer will
be made by us, solely in our discretion, and will be based on a variety of factors, such as the timing of the transaction and whether
the terms of the transaction would otherwise require us to seek shareholder approval. Even if we seek shareholder approval, the holders
of our Founder Shares will participate in the vote on such approval. Accordingly, we may complete our initial Business Combination even
if a majority of our Public Shareholders do not approve of the Business Combination we complete. Please see the risk factor entitled
*Our shareholders may not be afforded an opportunity to vote on our proposed initial Business Combination, and even if we hold
a vote, holders of our Founder Shares will participate in such vote, which means we may complete our initial Business Combination even
though a majority of our Public Shareholders do not support such a combination* for additional information.
**
*If we seek shareholder approval of our initial
Business Combination, our initial shareholders and management team have agreed to vote in favor of such initial Business Combination,
regardless of how our Public Shareholders vote, and we may not need any Public Shares in addition to our Founder Shares to be voted in
favor of an initial Business Combination in order to approve an initial Business Combination.*
Our initial shareholders own 25% of our issued
and outstanding ordinary shares. Our initial shareholders and management team also may from time-to-time purchase Class A Ordinary Shares
prior to our initial Business Combination. Our amended and restated memorandum and articles of association provide that, if we seek shareholder
approval of an initial Business Combination, such initial Business Combination will be approved if we obtain the approval of an ordinary
resolution under Cayman Islands law and our amended and restated memorandum and articles of association, which requires the affirmative
vote of 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. As a result, in addition to our initial
shareholders Founder Shares, we would need 5,692,500 or 33.3%, of the 17,250,000 Public Shares sold in our IPO to be voted in favor
of an initial Business Combination in order to have our initial Business Combination approved (assuming all outstanding shares are voted).
Assuming that only the holders of one-third of our issued and outstanding ordinary shares, representing a quorum under our amended and
restated memorandum and articles of association, vote their ordinary shares at a general meeting of the Company, we will not need any
Public Shares in addition to our Founder Shares to be voted in favor of an initial Business Combination in order to approve an initial
Business Combination. However, if our initial Business Combination is structured as a statutory merger or consolidation with another company
under Cayman Islands law, the approval of our initial Business Combination will require the approval of a special resolution, which requires
the affirmative vote of at least two-thirds of the votes cast by such shareholders as, being entitled to do so, vote in person or, where
proxies are allowed, by proxy at the applicable general meeting of the Company, or by a unanimous written resolution passed in accordance
with the Companies Act (As Revised) of the Cayman Islands, as amended from time to time (the Companies Act). Assuming all
outstanding shares are voted at a special meeting of the Company, we will need 9,591,000, or 55.6%, of the 17,250,000 Public Shares sold
in our IPO, in addition to our Founder Shares to be voted in favor of an initial Business Combination in order to approve an initial Business
Combination. Assuming that only the holders of one-third of our issued and outstanding ordinary shares, representing a quorum under our
amended and restated memorandum and articles of association, vote their ordinary shares at a special meeting of the Company, we will not
need any Public Shares in addition to our Founder Shares to be voted in favor of an initial Business Combination in order to approve an
initial Business Combination. Accordingly, if we seek shareholder approval of our initial Business Combination, the agreement by our initial
shareholders and management team to vote in favor of our initial Business Combination will increase the likelihood that an ordinary resolution
will be passed, being the requisite shareholder approval for such initial Business Combination.
**
**
14
**
*Your only opportunity to effect your investment
decision regarding a potential Business Combination may be limited to the exercise of your right to redeem your shares from us for cash.*
At the time of your investment in us, you will
not be provided with an opportunity to evaluate the specific merits or risks of our initial Business Combination. Since our board of directors
may complete a Business Combination without seeking shareholder approval, Public Shareholders may not have the right or opportunity to
vote on the Business Combination, unless we seek such shareholder vote. Accordingly, your only opportunity to effect your investment decision
regarding our initial Business Combination may be limited to exercising your redemption rights within the period of time (which will be
at least 20 business days) set forth in our tender offer documents mailed to our Public Shareholders in which we describe our initial
Business Combination. The per share amount we will distribute to shareholders who properly exercise their redemption rights will not be
reduced by the deferred underwriting commissions and after such redemptions, the per-share value of shares held by non-redeeming shareholders
will reflect our obligation to pay the deferred underwriting commissions.
**
*The ability of our Public Shareholders to
redeem their shares for cash may make our financial condition unattractive to potential Business Combination targets, which may make it
difficult for us to enter into a Business Combination with a target.*
We may seek to enter into a Business Combination
transaction agreement with a minimum cash requirement for (i) cash consideration to be paid to the target or its owners, (ii) cash for
working capital or other general corporate purposes or (iii) the retention of cash to satisfy other conditions. If too many Public Shareholders
exercise their redemption rights, we would not be able to meet such closing condition and, as a result, would not be able to proceed with
the Business Combination. Consequently, if accepting all properly submitted redemption requests would not allow us to satisfy a closing
condition as described above, we would not proceed with such redemption and the related Business Combination and may instead search for
an alternate Business Combination. Prospective targets will be aware of these risks and, thus, may be reluctant to enter into a Business
Combination transaction with us.
**
*The ability of our Public Shareholders to
exercise redemption rights with respect to a large number of our shares and the amount of deferred underwriting compensation may not allow
us to complete the most desirable Business Combination or optimize our capital structure, and may substantially dilute your investment
in us.*
At the time we enter into an agreement for our
initial Business Combination, we will not know how many shareholders may exercise their redemption rights, and therefore will need to
structure the transaction based on our expectations as to the number of shares that will be submitted for redemption. If our initial Business
Combination agreement requires us to use a portion of the cash in the Trust Account to pay the purchase price, or requires us to have
a minimum amount of cash at closing, we will need to reserve a portion of the cash in the Trust Account to meet such requirements, or
arrange for third party financing. In addition, if a larger number of shares is submitted for redemption than we initially expected, we
may need to restructure the transaction to reserve a greater portion of the cash in the Trust Account or arrange for third party financing.
Raising additional third party financing may involve dilutive equity issuances or the incurrence of indebtedness at higher than desirable
levels. Furthermore, this dilution would increase to the extent that the anti-dilution provision of the Class B Ordinary Shares results
in the issuance of Class A Ordinary Shares on a greater than one-to-one basis upon conversion of the Class B Ordinary Shares at the time
of our initial Business Combination. The above considerations may limit our ability to complete the most desirable Business Combination
available to us or optimize our capital structure. As a result, our obligations to redeem Public Shares for which redemption is requested
and to pay the deferred underwriting commissions may not allow us to complete the most desirable Business Combination or optimize our
capital structure.
15
In addition, raising additional third-party financing
may involve dilutive equity issuances or the incurrence of indebtedness at higher than desirable levels. Furthermore, this dilution would
increase to the extent that the anti-dilution provisions of the Class B Ordinary Shares result in the issuance of Class A Ordinary Shares
on a greater than one-to-one basis upon conversion of the Class B Ordinary Shares at the time of our Business Combination. The above considerations
may limit our ability to complete the most desirable Business Combination available to us or optimize our capital structure and may result
in substantial dilution from your purchase of our Class A Ordinary Shares. The effect of this dilution will be greater for shareholders
who do not redeem. We may not be able to generate sufficient value from the completion of our initial Business Combination in order to
overcome the dilutive impact of these and other factors, and, accordingly, you may incur a net loss on your investment. Please see
*Risks Relating to Our Securities* *The nominal purchase price paid by our initial shareholders for the Founder
Shares may result in significant dilution to the implied value of your Public Shares upon the consummation of our initial Business
Combination, and our initial shareholders are likely to make a substantial profit on their investment in us in the event we
consummate an initial Business Combination, even if the Business Combination causes the trading price of our ordinary shares
to materially decline.*
**
*The ability of our Public Shareholders to
exercise redemption rights with respect to a large number of our shares could increase the probability that our initial Business Combination
would be unsuccessful and that you would have to wait for liquidation in order to redeem your shares.*
If our initial Business Combination agreement
requires us to use a portion of the cash in the Trust Account to pay the purchase price, or requires us to have a minimum amount of cash
at closing, the probability that our initial Business Combination would be unsuccessful is increased. If our initial Business Combination
is unsuccessful, you would not receive your pro rata portion of the funds in the Trust Account until we liquidate the Trust Account. If
you are in need of immediate liquidity, you could attempt to sell your shares in the open market; however, at such time our shares may
trade at a discount to the pro rata amount per share in the Trust Account. In either situation, you may suffer a material loss on your
investment or lose the benefit of funds expected in connection with your exercise of redemption rights until we liquidate or you are able
to sell your shares in the open market.
**
*The requirement that we complete our initial
Business Combination within the Completion Window may give potential target businesses leverage over us in negotiating a Business Combination
and may limit the time we have in which to conduct due diligence on potential Business Combination targets, in particular as we approach
our dissolution deadline, which could undermine our ability to complete our initial Business Combination on terms that would produce value
for our shareholders.*
Any potential target business with which we enter
into negotiations concerning a Business Combination will be aware that we must complete our initial Business Combination within the Completion
Window. Consequently, such target business may obtain leverage over us in negotiating a Business Combination, knowing that if we do not
complete our initial Business Combination with that particular target business, we may be unable to complete our initial Business Combination
with any target business. This risk will increase as we get closer to the timeframe described above. In addition, we may have limited
time to conduct due diligence and may enter into our initial Business Combination on terms that we would have rejected upon a more comprehensive
investigation. The length of time it may take us to complete our diligence and negotiate a Business Combination may reduce the amount
of time available for us to ultimately complete an initial Business Combination should such diligence or negotiations not lead to a consummated
initial Business Combination.
**
**
16
**
*We may engage our underwriters or one of
their affiliates to provide additional services to us after our IPO, which may include acting as M&A advisor in connection with an
initial Business Combination or as placement agent in connection with a related financing transaction. Our underwriters are entitled to
receive deferred underwriting commissions that will be released from the Trust Account only upon a completion of an initial Business Combination.
These financial incentives may cause them to have potential conflicts of interest in rendering any such additional services to us after
our IPO, including, for example, in connection with the sourcing and consummation of an initial Business Combination.*
We may engage our underwriters or one of their
affiliates to provide additional services to us after our IPO, including, for example, identifying potential targets, providing M&A
advisory services, acting as a placement agent in a private offering or arranging debt financing transactions. We may pay such underwriters
or their affiliates fair and reasonable fees or other compensation that would be determined at that time in an arms length negotiation.
The underwriters are also entitled to receive deferred underwriting commissions that are conditioned on the completion of an initial Business
Combination. The underwriters or their affiliates financial interests tied to the consummation of a Business Combination
transaction may give rise to potential conflicts of interest in providing any such additional services to us, including potential conflicts
of interest in connection with the sourcing and consummation of an initial Business Combination.
**
*We may not be able to complete our initial
Business Combination within the Completion Window, in which case we would cease all operations except for the purpose of winding up and
we would redeem our Public Shares.*
We may not be able to find a suitable target business
and complete our initial Business Combination within the Completion Window. In recent years, a number of SPACs have liquidated due to
an inability to complete an initial Business Combination within their allotted time periods. Furthermore, our ability to complete our
initial Business Combination may be negatively impacted by general market conditions, volatility in the capital and debt markets and the
other risks described herein, including the impact of geopolitical events such as the conflict between Russia and Ukraine and the war
between Israel and Hamas. If we have not completed our initial Business Combination within such time period, we will: as promptly as reasonably
possible but not more than ten business days thereafter (and subject to lawfully available funds therefor), redeem the Public Shares,
at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on
the funds held in the Trust Account (which interest shall be net of taxes paid or payable and up to $100,000 of interest to pay liquidation
expenses), divided by the number of issued and outstanding Public Shares, which redemption will completely extinguish Public Shareholders
rights as shareholders (including the right to receive further liquidating distributions, if any), subject to our obligations under Cayman
Islands law to provide for claims of creditors and the requirements of other applicable law. In such case, our Public Shareholders may
only receive $10.00 per share, or possibly less, and our warrants will expire without value to the holder. In certain circumstances, our
Public Shareholders may receive less than $10.00 per share on the redemption of their shares. See *If third parties bring
claims against us, the proceeds held in the Trust Account could be reduced and the per-share redemption amount received by shareholders
may be less than $10.00 per share for more information*.
**
*We may decide not to extend the term we
have to consummate our initial Business Combination, in which case we would redeem our Public Shares, and the warrants may be worthless.*
We have until the end of the Completion Window
to consummate our initial Business Combination. If we anticipate that we may be unable to consummate our initial Business Combination
within such period, we may seek shareholder approval to amend our amended and restated memorandum and articles of association to extend
the date by which we must consummate our initial Business Combination. However, we may decide not to seek to extend the date by which
we must consummate our initial Business Combination. If we do not seek to extend the date by which we must consummate our initial Business
Combination, and we are unable to consummate our initial Business Combination within the applicable time period, we will as promptly as
reasonably possible but not more than ten business days thereafter (and subject to lawfully available funds therefor), redeem the Public
Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest
earned on the funds held in the Trust Account (which interest shall be net of taxes paid or payable and up to $100,000 to pay liquidation
expenses), divided by the number of issued and outstanding Public Shares, which redemption will completely extinguish Public Shareholders
rights as shareholders (including the right to receive further liquidating distributions, if any), subject to our obligations under Cayman
Islands law to provide for claims of creditors and the requirements of other applicable law. In such event, the warrants may be worthless.
**
**
17
**
*If we seek shareholder approval of our initial
Business Combination, our Sponsor, initial shareholders, directors, executive officers and their affiliates may elect to purchase shares
or Public Warrants from Public Shareholders, which may influence a vote on a proposed Business Combination and reduce the public float
of our securities.*
If we seek shareholder approval of our initial
Business Combination and we do not conduct redemptions in connection with our initial Business Combination pursuant to the tender offer
rules, our Sponsor, initial shareholders, directors, executive officers or their affiliates may purchase Public Shares or warrants in
privately negotiated transactions or in the open market either prior to or following the completion of our initial Business Combination,
although they are under no obligation to do so. Such a purchase may include a contractual acknowledgment that such shareholder, although
still the record holder of our shares, is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights.
In the event that our Sponsor, initial shareholders, directors, executive officers or their affiliates purchase shares in privately negotiated
transactions from Public Shareholders who have already elected to exercise their redemption rights, such selling shareholders would be
required to revoke their prior elections to redeem their shares. It is intended that, if Rule 10b-18 would apply to purchases by our Sponsor,
initial shareholders, directors, officers and their affiliates, then such purchases will comply with Rule 10b-18 under the Exchange Act,
to the extent it applies, which provides a safe harbor for purchases made under certain conditions, including with respect to timing,
pricing and volume of purchases.
Additionally, at any time at or prior to our initial
Business Combination, subject to applicable securities laws (including with respect to material nonpublic information), our Sponsor, initial
shareholders, directors, officers and their affiliates may enter into transactions with investors and others to provide them with incentives
to acquire Public Shares, vote their Public Shares in favor of our initial Business Combination or not redeem their Public Shares. However,
they have no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for
any such transactions. None of the funds in the Trust Account will be used to purchase Public Shares, rights or warrants in such transactions.
The purpose of any such transactions could be
to (i) increase the likelihood of obtaining shareholder approval of the Business Combination, (ii) reduce the number of Public Warrants
outstanding and/or increase the likelihood of approval on any matters submitted to the Public Warrant holders for approval in connection
with our initial Business Combination or (iii) satisfy a closing condition in an agreement with a target that requires us to have a minimum
net worth or a certain amount of cash at the closing of our initial Business Combination, where it appears that such requirement would
otherwise not be met. Any such purchases of our securities may result in the completion of our initial Business Combination that may not
otherwise have been possible.
In addition, if such purchases are made, the public
float of our securities may be reduced and the number of beneficial holders of our securities may be reduced, which may
make it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange. Any such
purchases will be reported pursuant to Section 13 and Section 16 of the Exchange Act to the extent such purchasers are subject to such
reporting requirements. Additionally, in the event our Sponsor, initial shareholders, directors, officers and their affiliates were to
purchase Public Shares or warrants from Public Shareholders after the announcement of our initial Business Combination, such purchases
would be structured in compliance with the requirements of Rule 14e-5 under the Exchange Act including, in pertinent part, through adherence
to the following:
|
| our registration statement/proxy statement filed for our Business
Combination transaction would disclose the possibility that our Sponsor, initial shareholders, directors, officers and their affiliates
may purchase Public Shares or warrants from Public Shareholders outside the redemption process, along with the purpose of such purchases; |
|
|
| if our Sponsor, initial shareholders, directors, officers
and their affiliates were to purchase Public Shares or warrants from Public Shareholders, they would do so at a price no higher than
the price offered through our redemption process; |
|
|
| our registration statement/proxy statement filed for our Business
Combination transaction would include a representation that any of our securities purchased by our Sponsor, initial shareholders, directors,
officers and their affiliates would not be voted in favor of approving the Business Combination transaction; |
|
18
|
| our Sponsor, initial shareholders, directors, officers and
their affiliates would not possess any redemption rights with respect to our securities or, if they do acquire and possess redemption
rights, they would waive such rights; and |
|
|
| we would disclose in a Form 8-K, before our security holder
meeting to approve the Business Combination transaction, the following material items: |
|
|
| the amount of our securities purchased outside of the redemption
offer by our Sponsor, initial shareholders, directors, officers and their affiliates, along with the purchase price; |
|
|
| the purpose of the purchases by our Sponsor, initial shareholders,
directors, officers and their affiliates; |
|
|
| the impact, if any, of the purchases by our Sponsor, initial
shareholders, directors, officers and their affiliates on the likelihood that the Business Combination transaction will be approved; |
|
|
| the identities of our security holders who sold to our Sponsor,
initial shareholders, directors, officers and their affiliates (if not purchased on the open market) or the nature of our security holders
(e.g., 5% security holders) who sold to our Sponsor, initial shareholders, directors, officers and their affiliates; and |
|
|
| the number of our securities for which we have received redemption
requests pursuant to our redemption offer. |
|
**
*If a shareholder fails to receive notice
of our offer to redeem our Public Shares in connection with our initial Business Combination, or fails to comply with the procedures for
tendering its shares, such shares may not be redeemed.*
We will comply with the proxy rules or tender
offer rules, as applicable, when conducting redemptions in connection with our initial Business Combination. Despite our compliance with
these rules, if a shareholder fails to receive our proxy materials or tender offer documents, as applicable, such shareholder may not
become aware of the opportunity to redeem its shares. In addition, proxy materials or tender offer documents, as applicable, that we will
furnish to holders of our Public Shares in connection with our initial Business Combination will describe the various procedures that
must be complied with in order to validly tender or submit Public Shares for redemption. For example, we intend to require our Public
Shareholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in street name,
to, at the holders option, either deliver their share certificates to our transfer agent, or to deliver their shares to our transfer
agent electronically prior to the date set forth in the proxy materials or tender offer documents, as applicable. In the case of proxy
materials, this date may be up to two business days prior to the scheduled vote on the proposal to approve the initial Business Combination.
In addition, if we conduct redemptions in connection with a shareholder vote, we intend to require a Public Shareholder seeking redemption
of its Public Shares to also submit a written request for redemption to our transfer agent two business days prior to the scheduled vote
in which the name of the beneficial owner of such shares is included. In the event that a shareholder fails to comply with these or any
other procedures disclosed in the proxy materials or tender offer documents, as applicable, its shares may not be redeemed.
**
*You will not be entitled to protections normally afforded to
investors of other blank check companies subject to Rule 419 of the Securities Act.*
Since the net proceeds of the IPO and the sale
of the Private Placement Warrants are intended to be used to complete one or more initial Business Combinations with a target business
or businesses that have not been selected, we may be deemed to be a blank check company under the United States securities
laws. However, we are exempt from rules promulgated by the SEC to protect investors in blank check companies, such as Rule 419. Accordingly,
investors will not be afforded the benefits or protections of those rules. Among other things, this means we will have a longer period
of time to complete our respective Business Combinations than do companies subject to Rule 419.
Moreover, if the IPO had been subject to Rule
419, that rule would prohibit the release of any interest earned on funds held in the Trust Account to us unless and until the funds in
the Trust Account were released to us or in connection with our completion of an initial Business Combination.
**
**
19
**
*If we seek shareholder approval of our initial
Business Combination and we do not conduct redemptions pursuant to the tender offer rules, and if you or a group of shareholders
are deemed to hold in excess of 15% of our Class A Ordinary Shares, you may lose the ability to redeem all such shares in excess of 15%
of our Class A Ordinary Shares.*
If we seek shareholder approval of our initial
Business Combination and we do not conduct redemptions in connection with our initial Business Combination pursuant to the tender offer
rules, our amended and restated memorandum and articles of association provides that a Public Shareholder, together with any affiliate
of such shareholder or any other person with whom such shareholder is acting in concert or as a group (as defined under
Section 13 of the Exchange Act), will be restricted from redeeming its shares with respect to more than an aggregate of 15% of the then
outstanding Excess Shares without our prior consent. However, we would not be restricting our shareholders ability to vote all
of their shares (including Excess Shares) for or against our initial Business Combination. Your inability to redeem the Excess Shares
will reduce your influence over our ability to complete our initial Business Combination and you could suffer a material loss on your
investment in us if you sell Excess Shares in open market transactions. Additionally, you will not receive redemption distributions with
respect to the Excess Shares if we complete our initial Business Combination. And as a result, you will continue to hold that number of
shares exceeding 15% and, in order to dispose of such shares, would be required to sell your shares in open market transactions, potentially
at a loss.
**
*Because of our limited resources and the
significant competition for Business Combination opportunities, it may be more difficult for us to complete our initial Business Combination.
If we are unable to complete our initial Business Combination, our Public Shareholders may receive only their pro rata portion of the
funds in the Trust Account that are available for distribution to Public Shareholders, and our warrants will expire worthless.*
We expect to encounter
competition from other entities having a business objective similar to ours, including private investors (which may be individuals or
investment partnerships), other blank check companies and other entities, domestic and international, competing for the types of businesses
we intend to acquire. Many of these individuals and entities are well-established and have extensive experience in identifying and effecting,
directly or indirectly, acquisitions of companies operating in or providing services to various industries. Many of these competitors
possess similar or greater technical, human and other resources to ours or more local industry knowledge than we do and our financial
resources are relatively limited when contrasted with those of many of these competitors. While we believe there are numerous target businesses
we could potentially acquire with the net proceeds of the IPO and the sale of the Private Placement Warrants, our ability to compete with
respect to the acquisition of certain target businesses that are sizable will be limited by our available financial resources. This inherent
competitive limitation gives others an advantage in pursuing the acquisition of certain target businesses. Furthermore, we are obligated
to offer holders of our Public Shares the right to redeem their shares for cash at the time of our initial Business Combination
in conjunction with a shareholder vote or via a tender offer. Target companies will be aware that this may reduce the resources available
to us for our initial Business Combination. Any of these obligations may place us at a competitive disadvantage in successfully negotiating
a Business Combination. If we are unable to complete our initial Business Combination, our Public Shareholders may receive only their
pro rata portion of the funds in the Trust Account that are available for distribution to Public Shareholders, and our warrants will expire
worthless.
**
*If the net proceeds of the IPO and the sale
of the Private Placement Warrants not being held in the Trust Account are insufficient to allow us to operate for at least the duration
of the Completion Window, it could limit the amount available to fund our search for a target business or businesses and complete our
initial Business Combination, and we will depend on loans from our Sponsor or management team to fund our search and to complete our initial
Business Combination.*
As of December 31, 2025, $693,561 was available
to us outside the Trust Account to fund our working capital requirements. We believe that the funds available to us outside of the Trust
Account will be sufficient to allow us to operate for at least the duration of the Completion Window; however, we cannot assure you that
our estimate is accurate. Of the funds available to us, we could use a portion of the funds available to us to pay fees to consultants
to assist us with our search for a target business. We could also use a portion of the funds as a down payment or to fund a no-shop
provision (a provision in letters of intent or merger agreements designed to keep target businesses from shopping around
for transactions with other companies or investors on terms more favorable to such target businesses) with respect to a particular proposed
Business Combination, although we do not have any current intention to do so. If we entered into a letter of intent or merger agreement
where we paid for the right to receive exclusivity from a target business and were subsequently required to forfeit such funds (whether
as a result of our breach or otherwise), we might not have sufficient funds to continue searching for, or conduct due diligence with respect
to, a target business.
20
If we are required to seek additional capital,
we would need to borrow funds from our Sponsor, management team or other third parties to operate or may be forced to liquidate.
Neither our Sponsor, members of our management
team nor any of their affiliates is under any obligation to advance funds to us in such circumstances. Any such advances would be repaid
only from funds held outside the Trust Account or from funds released to us upon completion of our initial Business Combination. Up to
$1,500,000 of such loans may be convertible into Private Placement Warrants of the post-Business Combination entity at a price of $1.00
per warrant, at the option of the lender. The warrants would be identical to the Private Placement Warrants, including as to exercisability
and exercise price. Prior to the completion of our initial Business Combination, we do not expect to seek loans from parties other than
our Sponsor or an affiliate of our Sponsor as we do not believe third parties will be willing to loan such funds and provide a waiver
against any and all rights to seek access to funds in our Trust Account. If we are unable to complete our initial Business Combination
because we do not have sufficient funds available to us, we will be forced to liquidate the Trust Account. Consequently, our Public Shareholders
may only receive an estimated $10.00 per share, or possibly less, on our redemption of our Public Shares, and our warrants will expire
worthless.
**
*If third parties bring claims against us,
the proceeds held in the Trust Account could be reduced and the per-share redemption amount received by shareholders may be less than
$10.00 per share.*
Our placing of funds in the Trust Account may
not protect those funds from third party claims against us. Although we will seek to have all vendors, service providers (except for our
independent registered public accounting firm), prospective target businesses and other entities with which we do business execute agreements
with us waiving any right, title, interest or claim of any kind in or to any monies held in the Trust Account for the benefit of our Public
Shareholders, such parties may not execute such agreements, or even if they execute such agreements they may not be prevented from bringing
claims against the Trust Account, including, but not limited to, fraudulent inducement, breach of fiduciary responsibility or other similar
claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain advantage with respect to a claim
against our assets, including the funds held in the Trust Account. If any third party refuses to execute an agreement waiving such claims
to the monies held in the Trust Account, our management will consider whether competitive alternatives are reasonably available to us
and will only enter into an agreement with such third party if management believes that such third partys engagement would be in
the best interests of the Company under the circumstances. WithumSmith+Brown, PC, our independent registered public accounting firm, and
the underwriters of the IPO will not execute agreements with us waiving such claims to the monies held in the Trust Account.
Examples of possible instances where we may engage
a third party that refuses to execute a waiver include the engagement of a third-party consultant whose particular expertise or skills
are believed by management to be significantly superior to those of other consultants that would agree to execute a waiver or in cases
where management is unable to find a service provider willing to execute a waiver. In addition, there is no guarantee that such entities
will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements
with us and will not seek recourse against the Trust Account for any reason. Upon redemption of our Public Shares, if we are unable to
complete our initial Business Combination within the prescribed timeframe, or upon the exercise of a redemption right in connection with
our initial Business Combination, we will be required to provide for payment of claims of creditors that were not waived that may be brought
against us within the 10 years following redemption. Accordingly, the per-share redemption amount received by Public Shareholders could
be less than the $10.00 per Public Share initially held in the Trust Account, due to claims of such creditors. Pursuant to the letter
agreement, our Sponsor has agreed that it will be liable to us if and to the extent any claims by a third party for services rendered
or products sold to us (except for the Companys independent registered public accounting firm), or a prospective target business
with which we have entered into a written letter of intent, confidentiality or other similar agreement or Business Combination agreement,
reduce the amount of funds in the Trust Account to below the lesser of (i) $10.00 per Public Share and (ii) the actual amount per Public
Share held in the Trust Account as of the date of the liquidation of the Trust Account, if less than $10.00 per Public Share due to reductions
in the value of the trust assets, in each case less taxes paid or payable and up to $100,000 of interest to pay liquidation expenses,
provided that such liability will not apply to any claims by a third party or prospective target business who executed a waiver of any
and all rights to the monies held in the Trust Account (whether or not such waiver is enforceable) nor will it apply to any claims under
our indemnity of the underwriters of the IPO against certain liabilities, including liabilities under the Securities Act. However, we
have not asked our Sponsor to reserve for such indemnification obligations, nor have we independently verified whether our Sponsor has
sufficient funds to satisfy its indemnity obligations and we believe that our Sponsors only assets are securities of our company.
Therefore, we cannot assure you that our Sponsor would be able to satisfy those obligations. As a result, if any such claims were successfully
made against the Trust Account, the funds available for our initial Business Combination and redemptions could be reduced to less than
$10.00 per Public Share. In such event, we may not be able to complete our initial Business Combination, and you would receive such lesser
amount per share in connection with any redemption of your Public Shares. None of our officers or directors will indemnify us for claims
by third parties including, without limitation, claims by vendors and prospective target businesses.
**
**
21
**
*Our directors may decide not to enforce
the indemnification obligations of our Sponsor, resulting in a reduction in the amount of funds in the Trust Account available for distribution
to our Public Shareholders.*
In the event that the proceeds in the Trust Account
are reduced below the lesser of (i) $10.00 per Public Share and (ii) the actual amount per Public Share held in the Trust Account as of
the date of the liquidation of the Trust Account if less than $10.00 per Public Share due to reductions in the value of the trust assets,
in each case less taxes paid or payable and up to $100,000 of interest to pay liquidation expenses, and our Sponsor asserts that it is
unable to satisfy its obligations or that it has no indemnification obligations related to a particular claim, our independent directors
would determine whether to take legal action against our Sponsor to enforce its indemnification obligations. While we currently expect
that our independent directors would take legal action on our behalf against our Sponsor to enforce its indemnification obligations to
us, it is possible that our independent directors in exercising their business judgment and subject to their fiduciary duties may choose
not to do so in any particular instance. If our independent directors choose not to enforce these indemnification obligations, the amount
of funds in the Trust Account available for distribution to our Public Shareholders may be reduced below $10.00 per Public Share.
**
*We may not have sufficient funds to satisfy
indemnification claims of our directors and officers.*
We have agreed to indemnify our officers and directors
to the fullest extent permitted by applicable law, including for any liability incurred in their capacities as such, except through their
own actual fraud, willful default or willful neglect. However, our officers and directors have agreed to waive any right, title, interest
or claim of any kind in or to any monies in the Trust Account and to not seek recourse against the Trust Account for any reason whatsoever
(except to the extent they are entitled to funds from the Trust Account due to their ownership of Public Shares). Accordingly, any indemnification
provided will be able to be satisfied by us only if (i) we have sufficient funds outside of the Trust Account or (ii) we consummate an
initial Business Combination. Our obligation to indemnify our officers and directors may discourage shareholders from bringing a lawsuit
against our officers or directors for breach of their fiduciary duty. These provisions also may have the effect of reducing the likelihood
of derivative litigation against our officers and directors, even though such an action, if successful, might otherwise benefit us and
our shareholders. Furthermore, a shareholders investment may be adversely affected to the extent we pay the costs of settlement
and damage awards against our officers and directors pursuant to these indemnification provisions.
**
*If, after we distribute the proceeds in
the Trust Account to our Public Shareholders, we file a bankruptcy or winding-up petition or an involuntary bankruptcy or winding-up petition
is filed against us that is not dismissed, a liquidator or a bankruptcy, insolvency or other court may seek to recover such proceeds,
and the members of our board of directors may be viewed as having breached their fiduciary duties to us or our creditors, thereby exposing
the members of our board of directors and us to claims of punitive damages**.*
If, after we distribute the proceeds in the Trust
Account to our Public Shareholders, we file a bankruptcy or winding-up petition or an involuntary bankruptcy or winding-up petition is
filed against us that is not dismissed, any distributions received by shareholders could be viewed under applicable debtor/creditor and/or
bankruptcy/insolvency laws as either a preferential transfer or a fraudulent conveyance, preference or disposition.
As a result, a liquidator or a bankruptcy, insolvency or other court could seek to recover some or all amounts received by our shareholders.
In addition, our board of directors may be viewed as having breached its fiduciary duty to us or our creditors and/or having acted in
bad faith, by paying Public Shareholders from the Trust Account prior to addressing the claims of creditors, thereby exposing itself and
us to claims of punitive damages.
**
22
*If, before distributing the proceeds in
the Trust Account to our Public Shareholders, we file a bankruptcy or winding-up petition or an involuntary bankruptcy or winding-up petition
is filed against us that is not dismissed, the claims of creditors in such proceeding may have priority over the claims of our shareholders
and the per-share amount that would otherwise be received by our shareholders in connection with our liquidation may be reduced.*
If, before distributing the proceeds in the Trust
Account to our Public Shareholders, we file a bankruptcy or winding-up petition or an involuntary bankruptcy or winding-up petition is
filed against us that is not dismissed, the proceeds held in the Trust Account could be subject to applicable bankruptcy or insolvency
law, and may be included in our bankruptcy or insolvency estate and subject to the claims of third parties with priority over the claims
of our shareholders. To the extent any bankruptcy or insolvency claims deplete the Trust Account, the per-share amount that would otherwise
be received by our shareholders in connection with our dissolution may be reduced.
**
*Changes in laws or regulations, or a failure
to comply with any laws and regulations, may adversely affect our business, including our ability to negotiate and complete our initial
Business Combination, and results of operations.*
We are subject to laws and regulations enacted
by national, regional and local governments. In particular, we are required to comply with certain SEC and other legal requirements and
numerous complex tax laws. Compliance with, and monitoring of, applicable laws and regulations may be difficult, time consuming and costly.
Those laws and regulations and their interpretation and application may also change from time to time and those changes could have a material
adverse effect on our business, investments and results of operations. In addition, a failure to comply with applicable laws or regulations,
as interpreted and applied, could have a material adverse effect on our business, including our ability to negotiate and complete our
initial Business Combination, and results of operations.
On January 24, 2024, the SEC adopted a series
of new rules relating to SPACs (the SPAC Rules) requiring, among other items, (i) additional disclosures relating to SPAC
Business Combination transactions; (ii) additional disclosures relating to dilution and to conflicts of interest involving sponsors and
their affiliates in both SPAC initial public offerings and de-SPAC transactions; (iii) the use of projections by SPACs in SEC filings
in connection with proposed Business Combination transactions; and (iv) both the SPAC and the target companys status as co-registrants
on de-SPAC registration statements.
In addition, the SECs adopting release
provided guidance describing circumstances in which a SPAC could become subject to regulation under the Investment Company Act, including
its duration, asset composition, business purpose, and the activities of the SPAC and its management team in furtherance of such goals.
Compliance with the SPAC Rules and related guidance
may increase the costs of and the time needed to negotiate and complete an initial Business Combination and may constrain the circumstances
under which we could complete an initial Business Combination.
**
*If we are deemed to be an investment company
under the Investment Company Act, we may be required to institute burdensome compliance requirements and our activities may be restricted,
which may make it difficult for us to complete our initial Business Combination.*
As described in the risk factor above entitled
*Changes in laws or regulations, or a failure to comply with any laws and regulations, may adversely affect our business, including
our ability to negotiate and complete our initial Business Combination, and results of operations*, the SECs adopting
release with respect to the SPAC Rules provided guidance describing the extent to which SPACs could become subject to regulation under
the Investment Company Act and the regulations thereunder. Whether a SPAC is an investment company will be a question of facts and circumstances.
If our facts and circumstances change over time, we will update our disclosure to reflect how those changes impact the risk that we may
be considered to be operating as an unregistered investment company. We can give no assurance that a claim will not be made that we have
been operating as an unregistered investment company.
23
If we are deemed to be an investment company under
the Investment Company Act, we may have to change our operations, wind down our operations, or register as an investment company under
the Investment Company Act. Our activities may be restricted, including:
|
| restrictions on the nature of our investments; and |
|
|
| restrictions on the issuance of securities, each of which
may make it difficult for us to complete our initial Business Combination. |
|
|
| In addition, we may have imposed upon us burdensome requirements,
including: |
|
|
| registration as an investment company; |
|
|
| adoption of a specific form of corporate structure; and |
|
|
| reporting, record keeping, voting, proxy and disclosure requirements
and other rules and regulations. |
|
In order not to be regulated as an investment
company under the Investment Company Act, unless we can qualify for an exclusion, we must ensure that we are engaged primarily in a business
other than investing, reinvesting or trading in securities and that our activities do not include investing, reinvesting, owning, holding
or trading investment securities constituting more than 40% of our total assets (exclusive of U.S. government securities
and cash items) on an unconsolidated basis. Our business will be to identify and complete a Business Combination and thereafter to operate
the post-transaction business or assets for the long term. We do not intend to spend a considerable amount of time actively managing the
assets in the Trust Account for the primary purpose of achieving investment returns. We do not plan to buy businesses or assets with a
view to resale or profit from their resale. We do not plan to buy unrelated businesses or assets or to be a passive investor.
We do not believe that our anticipated principal
activities will subject us to the Investment Company Act. To this end, the proceeds held in the Trust Account may only be held as cash,
including in demand deposit accounts at a bank, or invested in U.S. government securities within the meaning of Section
2(a)(16) of the Investment Company Act having a maturity of 185 days or less or in money market funds meeting certain conditions under
Rule 2a-7 promulgated under the Investment Company Act which invest only in direct U.S. government treasury obligations and/or held as
cash or cash items (including in demand deposit accounts); the holding of these assets in this form is intended to be temporary and for
the sole purpose of facilitating the intended Business Combination and may at any time be held as cash or cash items, including in demand
deposit accounts at a bank. Pursuant to the trust agreement, the trustee is not permitted to invest in other securities or assets. By
restricting the investment of the proceeds to these instruments, and by having a business plan targeted at acquiring and growing businesses
for the long term (rather than on buying and selling businesses in the manner of a merchant bank or private equity fund), we intend to
avoid being deemed an investment company within the meaning of the Investment Company Act. Investing in our securities is
not intended for persons who are seeking a return on investments in government securities or investment securities. The Trust Account
is intended as a holding place for funds pending the earliest to occur of: (i) the completion of our initial Business Combination; (ii)
the redemption of any Public Shares properly submitted in connection with an amendment of our amended and restated memorandum and articles
of association (A) to modify the substance or timing of our obligation to provide for the redemption of our Public Shares in connection
with an initial Business Combination or to redeem 100% of our Public Shares if we have not consummated our initial Business Combination
within the Completion Window or (B) with respect to any other material provisions relating to shareholders rights or pre-initial
Business Combination activity; or (iii) absent an initial Business Combination within the Completion Window, our return of the funds held
in the Trust Account to our Public Shareholders as part of our redemption of the Public Shares. If we do not invest the proceeds as discussed
above, we may be deemed to be subject to the Investment Company Act.
Further, under the subjective test of an investment
company pursuant to Section 3(a)(1)(A) of the Investment Company Act, even if the funds deposited in the Trust Account were invested
in the assets discussed above (U.S. government securities or money market funds registered under the Investment Company Act), such assets,
other than cash, are securities for purposes of the Investment Company Act and, therefore, nevertheless, there is a risk
that we could be deemed an unregistered investment company and subject to the Investment Company Act at any time.
In the adopting release for the SPAC Rules, the
SEC provided guidance that a SPACs potential status as an investment company depends on a variety of factors, such
as a SPACs duration, asset composition, business purpose and activities and is a question of facts and circumstances
requiring individualized analysis. If we were deemed to be an unregistered investment company and subject to compliance with and regulation
under the Investment Company Act, we would be subject to additional regulatory burdens and expenses for which we have not allotted funds.
Unless we are able to modify our activities so that we would not be deemed an investment company, we would either register as an investment
company or wind-down and abandon our efforts to complete a Business Combination and instead liquidate the Trust Account. As a result,
our Public Shareholders may only receive their pro rata portion of the funds in the Trust Account that are available for distribution
to Public Shareholders and would be unable to realize the potential benefits of an initial Business Combination, including the possible
appreciation of the combined companys securities.
**
**
24
**
*To mitigate the risk that we might be deemed
to be an investment company for purposes of the Investment Company Act, we may, at any time, instruct the trustee to liquidate the securities
held in the Trust Account and instead to hold the funds in the Trust Account in cash until the earlier of the consummation of our initial
Business Combination or our dissolution. As a result, following the liquidation of securities in the Trust Account, the interest earned
on the funds held in the Trust Account may be materially reduced, which would reduce the dollar amount our Public Shareholders would receive
upon any redemption or dissolution of the Company.*
We hold the funds in the Trust Account as cash,
including in demand deposit accounts at a bank, or in U.S. government treasury obligations with a maturity of 185 days or less or in money
market funds investing solely in U.S. government treasury obligations and meeting certain conditions under Rule 2a-7 under the Investment
Company Act. U.S. government treasury obligations are considered securities for purposes of the Investment Company Act,
while cash is not. As noted above, one of the factors the SEC identified as relevant to the determination of whether a SPAC which holds
securities could potentially be deemed an investment company under the Investment Company Act is the SPACs duration.
To mitigate the risk of us being deemed to be an unregistered investment company (including under the subjective test of Section 3(a)(1)(A)
of the Investment Company Act) and thus subject to regulation under the Investment Company Act, we may, at any time, instruct Continental
Stock Transfer & Trust Company, the trustee with respect to the Trust Account, to liquidate the U.S. government treasury obligations
or money market funds held in the Trust Account and thereafter to hold all funds in the Trust Account in cash until the earlier of consummation
of our initial Business Combination or dissolution of the Company. Following such dissolution, the rate of interest we receive on the
funds held in the Trust Account may be materially decreased. However, interest previously earned on the funds held in the Trust Account
still may be released to us to pay our taxes, if any (excluding any Excise Tax, or similar tax, imposed on us) and certain other expenses
as permitted. As a result, any decision to liquidate the securities held in the Trust Account and thereafter to hold all funds in the
Trust Account in cash would reduce the dollar amount our Public Shareholders would receive upon any redemption or dissolution of the Company.
**
*Our search for an initial Business Combination,
and any target business with which we may ultimately consummate an initial Business Combination, may be materially adversely affected
by current global geopolitical conditions resulting from the ongoing Russia-Ukraine conflict and the recent escalation of conflict in
the Middle East and Southwest Asia.*
United States and global markets are experiencing
volatility and disruption following the geopolitical instability resulting from the ongoing Russia-Ukraine conflict and the recent escalation
of conflict in the Middle East and Southwest Asia. In response to the ongoing Russia-Ukraine conflict, the North Atlantic Treaty Organization
(NATO) deployed additional military forces to eastern Europe, and the United States, the United Kingdom, the European Union
and other countries announced various sanctions and restrictive actions against Russia, Belarus and related individuals and entities,
including the removal of certain financial institutions from the Society for Worldwide Interbank Financial Telecommunication (SWIFT) payment
system. Certain countries, including the United States, have also provided and may continue to provide military aid or other assistance
to Ukraine and to Israel, or have undertaken or will undertake military strikes in Southwest Asia, increasing geopolitical tensions among
a number of nations. The invasion of Ukraine by Russia and the escalation of conflict in the Middle East and Southwest Asia and the resulting
measures that have been taken, and could be taken in the future, by NATO, the United States, the United Kingdom, the European Union, Israel
and its neighboring states and other countries have created global security concerns that could have a lasting impact on regional and
global economies. Although the length and impact of the ongoing conflicts are highly unpredictable, they could lead to market disruptions,
including significant volatility in commodity prices, credit and capital markets, as well as supply chain interruptions and increased
cyber-attacks against U.S. companies. Additionally, any resulting sanctions could adversely affect the global economy and financial markets
and lead to instability and lack of liquidity in capital markets.
Any of the above mentioned factors, or any other
negative impact on the global economy, capital markets or other geopolitical conditions resulting from the Russian invasion of Ukraine,
the escalation of conflict in the Middle East and Southwest Asia and subsequent sanctions or related actions, may lead to increased volume
and price volatility for publicly traded securities or could adversely affect our search for an initial Business Combination by adversely
affecting the operations or financial condition of potential target companies, any of which could make it more difficult for us to identify
a Business Combination target and consummate an initial Business Combination on acceptable commercial terms, or at all.
25
The extent and duration of the ongoing conflicts,
resulting sanctions and any related market disruptions are impossible to predict, but could be substantial, particularly if current or
new sanctions continue for an extended period of time or if geopolitical tensions result in expanded military operations on a global scale.
Any such disruptions may also have the effect of heightening many of the other risks described in this section. If these disruptions or
other matters of global concern continue for an extensive period of time, our ability to consummate an initial Business Combination may
be materially adversely affected.
**
*Our shareholders may be held liable for
claims by third parties against us to the extent of distributions received by them upon redemption of their shares.*
If we are forced to enter into an insolvent liquidation,
any distributions received by shareholders could be viewed as an unlawful payment if it was proved that immediately following the date
on which the distribution was made, we were unable to pay our debts as they fall due in the ordinary course of business. As a result,
a liquidator could seek to recover some or all amounts received by our shareholders. Furthermore, our directors may be viewed as having
breached their fiduciary duties to us or our creditors and/or may have acted in bad faith, thereby exposing themselves and our company
to claims, by paying Public Shareholders from the Trust Account prior to addressing the claims of creditors. We cannot assure you that
claims will not be brought against us for these reasons. We and our directors and officers who knowingly and willfully authorized or permitted
any distribution to be paid out of our share premium account while we were unable to pay our debts as they fall due in the ordinary course
of business would be guilty of an offence and may be liable to a fine of approximately $18,293 and to imprisonment for five years in the
Cayman Islands.
**
*We may not hold an annual general meeting
until after the consummation of our initial Business Combination, which could delay the opportunity for our Public Shareholders to discuss
company affairs with management, and the holders of our Class A Ordinary Shares will not have the right to vote on the appointment or
removal of directors or continuing the Company in a jurisdiction outside the Cayman Islands until after the consummation of our initial
Business Combination.*
In accordance with Nasdaq corporate governance
requirements, we are not required to hold an annual general meeting until no later than one year after our first fiscal year end following
our listing on Nasdaq. There is no requirement under the Companies Act (As Revised) of the Cayman Islands, as amended from time to time
(the Companies Act) for us to hold annual or extraordinary general meetings to appoint directors. Until we hold an annual
general meeting, Public Shareholders may not be afforded the opportunity to discuss company affairs with management. In addition, as holders
of our Class A Ordinary Shares, our Public Shareholders will not have the right to vote on the appointment or removal of directors or
continuing the Company in a jurisdiction outside the Cayman Islands until after the consummation of our initial Business Combination.
**
*Because we are neither limited to evaluating
a target business in a particular industry sector nor have we selected any specific target businesses with which to pursue our initial
Business Combination, you will be unable to ascertain the merits or risks of any particular target businesss operations.*
Our efforts to identify a prospective initial
Business Combination target will not be limited to a particular industry, sector or geographic region. Our amended and restated memorandum
and articles of association prohibit us from effectuating a Business Combination solely with another blank check company or similar company
with nominal operations.
Because we have not yet selected any specific
target business with respect to a Business Combination, there is no basis to evaluate the possible merits or risks of any particular target
businesss operations, results of operations, cash flows, liquidity, financial condition or prospects. To the extent we complete
our initial Business Combination, we may be affected by numerous risks inherent in the business operations with which we combine. For
example, if we combine with a financially unstable business or an entity lacking an established record of sales or earnings, we may be
affected by the risks inherent in the business and operations of a financially unstable or a development stage entity. In recent years,
a number of target businesses have underperformed financially post-Business Combination. There are no assurances that the target business
with which we consummate our initial Business Combination will perform as anticipated. Although our officers and directors will endeavor
to evaluate the risks inherent in a particular target business, we cannot assure you that we will properly ascertain or assess all of
the significant risk factors or that we will have adequate time to complete due diligence. Furthermore, some of these risks may be outside
of our control and leave us with no ability to control or reduce the chances that those risks will adversely impact a target business.
We also cannot assure you that an investment in our Units will ultimately prove to be more favorable to investors than a direct investment,
if such opportunity were available, in a Business Combination target.
26
Accordingly, any shareholders or warrant holders
who choose to remain shareholders or warrant holders following the Business Combination could suffer a reduction in the value of their
securities. Such shareholders or warrant holders are unlikely to have a remedy for such reduction in value unless they are able to successfully
claim that the reduction was due to the breach by our officers or directors of a duty of care or other fiduciary duty owed to them, or
if they are able to successfully bring a private claim under securities laws that the proxy materials or tender offer documents, as applicable,
relating to the Business Combination contained an actionable material misstatement or material omission.
**
*We may seek Business Combination opportunities
in industries or sectors that may be outside of our managements areas of expertise.*
We will consider a Business Combination outside
of our managements areas of expertise if a Business Combination candidate is presented to us and we determine that such candidate
offers an attractive Business Combination opportunity for our company. Although our management will endeavor to evaluate the risks inherent
in any particular Business Combination candidate, we cannot assure you that we will adequately ascertain or assess all of the significant
risk factors. We also cannot assure you that an investment in our securities will not ultimately prove to be less favorable to investors
than a direct investment, if an opportunity were available, in a Business Combination candidate. In the event we elect to pursue a Business
Combination outside of the areas of our managements expertise, our managements expertise may not be directly applicable
to its evaluation or operation, and the information contained in this Form 10-K regarding the areas of our managements expertise
would not be relevant to an understanding of the business that we elect to acquire. As a result, our management may not be able to ascertain
or assess adequately all of the relevant risk factors. Accordingly, any shareholders who choose to remain shareholders following our initial
Business Combination could suffer a reduction in the value of their shares. Such shareholders are unlikely to have a remedy for such reduction
in value.
**
*Although we have identified general criteria
and guidelines that we believe are important in evaluating prospective target businesses, we may enter into our initial Business Combination
with a target that does not meet such criteria and guidelines, and as a result, the target business with which we enter into our initial
Business Combination may not have attributes entirely consistent with our general criteria and guidelines.*
Although we have identified general criteria and
guidelines for evaluating prospective target businesses, it is possible that a target business with which we enter into our initial Business
Combination will not have all of these positive attributes. If we complete our initial Business Combination with a target that does not
meet some or all of these guidelines, such combination may not be as successful as a combination with a business that does meet all of
our general criteria and guidelines. In addition, if we announce a prospective Business Combination with a target that does not meet our
general criteria and guidelines, a greater number of shareholders may exercise their redemption rights, which may make it difficult for
us to meet any closing condition with a target business that requires us to have a minimum net worth or a certain amount of cash. In addition,
if shareholder approval of the transaction is required by applicable law or stock exchange listing requirements, or we decide to obtain
shareholder approval for business or other reasons, it may be more difficult for us to attain shareholder approval of our initial Business
Combination if the target business does not meet our general criteria and guidelines. If we have not completed our initial Business Combination
within the Completion Window, our Public Shareholders may only receive their pro rata portion of the funds in the Trust Account that are
available for distribution to Public Shareholders, and our warrants will expire worthless.
**
27
*We are not required to obtain an opinion
from an independent accounting or investment banking firm or from another independent entity that commonly renders valuation opinions,
and consequently, you may have no assurance from an independent source that the price we are paying for the business is fair to our shareholders
from a financial point of view.*
Unless we complete our initial Business Combination
with a company that is affiliated with our Sponsor, officers or directors (or their respective affiliates or related entities), we are
not required to obtain an opinion from an independent investment banking firm which is a member of FINRA or a valuation or appraisal firm
stating that the consideration to be paid by us in such an initial Business Combination is fair to our company from a financial point
of view. If no opinion is obtained, our shareholders will be relying on the judgment of our board of directors, who will determine fair
market value based on standards generally accepted by the financial community. Such standards used will be disclosed in our proxy materials
or tender offer documents, as applicable, related to our initial Business Combination; provided that such conversion of Founder Shares
will never occur on a less than one-for-one basis.
**
*We may issue additional Class A Ordinary
Shares or preference shares to complete our initial Business Combination or under an employee incentive plan after completion of our initial
Business Combination. We may also issue Class A Ordinary Shares upon the conversion of the Founder Shares at a ratio greater than one-to-one
at the time of our initial Business Combination as a result of the anti-dilution provisions contained therein. Any such issuances would
dilute the interest of our shareholders and likely present other risks**.*
Our amended and restated memorandum and articles
of association authorize the issuance of up to 500,000,000 Class A Ordinary Shares, par value $0.0001 per share, 50,000,000 Class B Ordinary
Shares, par value $0.0001 per share, and 5,000,000 preference shares, par value $0.0001 per share. As of the date of this Form 10-K, there
are 17,250,000 Class A Ordinary Shares, 5,750,000 Class B Ordinary Shares, and 10,250,000 warrants outstanding.
The Class B Ordinary Shares are automatically
convertible into Class A Ordinary Shares (which such Class A Ordinary Shares issued upon conversion will not have any redemption rights
or be entitled to liquidating distributions from the Trust Account if we fail to consummate an initial Business Combination) immediately
prior to, concurrently with or immediately following the consummation of our initial Business Combination or at any time prior thereto
at the option of the holder, initially at a one-for-one ratio but subject to adjustment as set forth herein and in our amended and restated
memorandum and articles of association, including in certain circumstances in which we issue Class A Ordinary Shares or equity-linked
securities related to our initial Business Combination.
We may issue a substantial number of additional
Class A Ordinary Shares or preference shares to complete our initial Business Combination or under an employee incentive plan after completion
of our initial Business Combination. We may also issue Class A Ordinary Shares upon conversion of the Class B Ordinary Shares at a ratio
greater than one-to-one at the time of our initial Business Combination as a result of the anti-dilution provisions as set forth therein.
Such issuance of additional ordinary or preference shares could involve costs to us and our shareholders that would not otherwise be incurred
in a traditional initial public offering, including but not limited to:
|
| significant dilution of the equity interest of investors in
our IPO, which dilution would increase if the anti-dilution provisions in the Class B Ordinary Shares resulted in the issuance of Class
A Ordinary Shares on a greater than one-to-one basis upon conversion of the Class B Ordinary Shares ; |
|
|
| subordination of the rights of holders of Class A Ordinary
Shares if preference shares are issued with rights senior to those afforded our Class A Ordinary Shares; |
|
|
| additional costs involved in registering the resale of the
securities being sold in any PIPE transactions and potential additional downward pressure on our share price due to the ability of investors
in such PIPE transactions being able to sell their securities after registration; |
|
|
| potential change in control if a substantial number of Class
A Ordinary Shares are issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any,
and could result in the resignation or removal of our present officers and directors; |
|
|
| potential delaying or preventing of a change of control of
us by diluting the share ownership or voting rights of a person seeking to obtain control of us; and |
|
|
| adverse impact on prevailing market prices for our Units,
Class A Ordinary Shares and/or warrants. |
|
28
In addition, issuances of additional ordinary
or preference shares may not result in adjustment to the exercise price of our warrants. Such issuances may be structured in a way intended
to provide a return on investment to the investors in return for funds facilitating the completion of the Business Combination or providing
additional liquidity to the post-Business Combination entity.
**
*We may issue shares to investors in connection
with our initial Business Combination at a price which is less than $10.00 or the prevailing market price of our shares at that time,
which could dilute the interests of our existing shareholders and add costs.*
In connection with our initial Business Combination,
we may issue shares to investors in private placement transactions (so-called PIPE transactions) in order to complete an initial Business
Combination and provide sufficient liquidity and capital to the post-Business Combination entity. The price of the shares so
issued in connection with an initial Business Combination may be less, and potentially significantly less, than $10.00 per share or the
market price for our shares at such time. Any such issuances of equity securities at a price that is less than $10.00 or the prevailing
market price of our shares at that time could be structured to ensure a return on investment to the investors and could dilute the interests
of our existing shareholders in a manner that would not ordinarily occur in a traditional initial public offering and could result in
both a reduction in the trading price of our shares to the price at which the post-Business Combination company issues such equity securities
and fluctuations in the net tangible book value per share of the combined companys securities following the completion of our initial
Business Combination. We or the post-Business Combination company may also provide price protection or other incentives, or issue convertible
securities such as preferred equity or convertible debt, and the exercise or conversion price of those securities may be fixed or adjustable,
and may be less, and potentially significantly less, than $10.00 per share or the market price for our shares at such time. Such issuances
could also result in additional transaction costs related to our initial Business Combination compared to a traditional initial public
offering, including the placement fees associated with the engagement of a placement agent in connection with PIPE transactions.
**
*Since only holders of our Class B Ordinary
Shares have the right to vote on the appointment of directors, Nasdaq considers us to be a controlled company within the
meaning of Nasdaq rules and, as a result, we may qualify for exemptions from certain corporate governance requirements.*
Only holders of our Class B Ordinary Shares have
the right to vote on the appointment of directors. As a result, Nasdaq considers us to be a controlled company within the
meaning of Nasdaq corporate governance standards. Under Nasdaq corporate governance standards, a company of which more than 50% of the
voting power for the appointment of directors is held by an individual, group or another company is a controlled company
and may elect not to comply with certain corporate governance requirements, including the requirements that:
|
| we have a board that includes a majority of independent
directors, as defined under the rules of Nasdaq; and |
|
|
| we have a compensation committee of our board that is comprised
entirely of independent directors with a written charter addressing the committees purpose and responsibilities. |
|
We currently do not rely on the controlled
company exemption, but may do so in the future. Accordingly, if we choose to do so, you will not have the same protections afforded
to shareholders of companies that are subject to all of Nasdaq corporate governance requirements.
**
*Resources could be wasted in researching
Business Combinations that are not completed, which could materially adversely affect subsequent attempts to locate and acquire or merge
with another business. If we are unable to complete our initial Business Combination, our Public Shareholders may only receive their pro
rata portion of the funds in the Trust Account that are available for distribution to Public Shareholders, and our warrants will expire
worthless.*
We anticipate that the investigation of each specific
target business and the negotiation, drafting and execution of relevant agreements, disclosure documents and other instruments will require
substantial management time and attention and substantial costs for accountants, attorneys, consultants and others. If we decide not to
complete a specific initial Business Combination, the costs incurred up to that point for the proposed transaction likely would not be
recoverable. Furthermore, if we reach an agreement relating to a specific target business, we may fail to complete our initial Business
Combination for any number of reasons including those beyond our control. Any such event will result in a loss to us of the related costs
incurred which could materially adversely affect subsequent attempts to locate and acquire or merge with another business. If we are unable
to complete our initial Business Combination within the Completion Window, our Public Shareholders may only receive their pro rata portion
of the funds in the Trust Account that are available for distribution to Public Shareholders, and our warrants will expire worthless.
**
**
29
**
*We may engage in a Business Combination
with one or more target businesses that have relationships with entities that may be affiliated with our Sponsor, officers, directors
or existing holders which may raise potential conflicts of interest.*
In light of the involvement of our Sponsor, its
sole managing member, and our officers and directors with other entities, we may decide to acquire one or more businesses affiliated with
or competitive with our Sponsor, officers, directors and their respective affiliates or existing holders. Our directors also serve as
officers and/or board members for other entities, including, without limitation, those described in the registration statement for our
IPO under *Management - Conflicts of Interest.* Our Sponsor, officers and directors may Sponsor, form or participate
in other blank check companies similar to ours during the period in which we are seeking an initial Business Combination. Such entities
may compete with us for Business Combination opportunities. Our Sponsor, officers and directors are not currently aware of any specific
opportunities for us to complete our initial Business Combination with any entities with which they are affiliated, and there have been
no substantive discussions concerning a Business Combination with any such entity or entities. Although we will not be specifically focusing
on, or targeting, any transaction with any affiliated entities, we would pursue such a transaction if we determined that such affiliated
entity met our criteria for a Business Combination as set forth in *Business - Effecting our Initial Business Combination - Selection
of a Target Business and Structuring of Our Initial Business Combination* elsewhere in this Form 10-K and such transaction was
approved by a majority of our independent and disinterested directors. Despite our obligation to obtain an opinion from an independent
investment banking firm or another independent entity that commonly renders valuation opinions for the type of company we are seeking
to acquire or from an independent accounting firm regarding the fairness to our company from a financial point of view of a Business Combination
with one or more domestic or international businesses affiliated with our Sponsor, officers or directors (or their respective affiliates
or related entities), potential conflicts of interest still may exist and, as a result, the terms of the Business Combination may not
be as advantageous to our Public Shareholders as they would be absent any conflicts of interest.
**
*Since our Sponsor, officers, directors,
any other holder of our Founder Shares, and the underwriters may lose their entire investment in us if our initial Business Combination
is not completed (other than with respect to Public Shares they have acquired, or may in the future acquire, if any), a conflict of interest
may arise in determining whether a particular Business Combination target is appropriate for our initial Business Combination.*
On July 23, 2025, our Sponsor paid $25,000, or
approximately $0.003 per share, to cover certain of our offering costs in exchange for 7,666,667 Founder Shares. On November 6, 2025,
our Sponsor surrendered 1,916,667 Founder Shares to us for no consideration. In November 2025, our Sponsor transferred an aggregate of
60,000 Founder Shares to certain of our independent directors, resulting in our Sponsor holding 5,690,000 Founder Shares. On December
12, 2025, the underwriters exercised their over-allotment option in full and forfeited the unexercised balance. On January 23, 2026, our
Sponsor transferred 35,000 Founder Shares to an independent director, resulting in our Sponsor holding 5,655,000 Founder Shares and our
initial shareholders holding an aggregate of 5,750,000 Founder Shares.
In addition, our Sponsor and Cantor purchased
an aggregate of 4,500,000 Private Placement Warrants for an aggregate purchase price of $4,500,000, or $1.00 per warrant. Of those 4,500,000
Private Placement Warrants, our Sponsor purchased 3,000,000 Private Placement Warrants and Cantor purchased 1,500,000 Private Placement
Warrants. The Private Placement Warrants will be worthless if we do not complete our initial Business Combination.
The personal and financial interests of our executive
officers and directors may influence their motivation in identifying and selecting a target Business Combination, completing an initial
Business Combination and influencing the operation of the business following the initial Business Combination. This risk may become more
acute as the end of the Completion Window nears, which is the deadline for our completion of an initial Business Combination.
The non-managing Sponsor investors are not required
to (i) hold any Units, Class A Ordinary Shares or Public Warrants they purchased in the IPO or thereafter for any amount of time, (ii)
vote any Class A Ordinary Shares they may own at the applicable time in favor of our initial Business Combination or (iii) refrain from
exercising their right to redeem their Public Shares at the time of our initial Business Combination. The non-managing Sponsor investors
will have the same rights to the funds held in the Trust Account with respect to the Class A Ordinary Shares underlying the units they
may purchase in the initial offering as the rights afforded to our other Public Shareholders.
**
**
30
**
*We may issue notes or other debt securities,
or otherwise incur substantial debt, to complete a Business Combination, which may adversely affect our leverage and financial condition
and thus negatively impact the value of our shareholders investment in us.*
Although we have no commitments as of the date
of this Form 10-K to issue any notes or other debt securities, or to otherwise incur outstanding debt, we may choose to incur substantial
debt to complete our initial Business Combination. The incurrence of debt could have a variety of negative effects, including:
|
| default and foreclosure on our assets if our operating revenues
after an initial Business Combination are insufficient to repay our debt obligations; |
|
|
| acceleration of our obligations to repay the indebtedness
even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial
ratios or reserves without a waiver or renegotiation of that covenant; |
|
|
| our immediate payment of all principal and accrued interest,
if any, if the debt security is payable on demand; |
|
|
| our inability to obtain necessary additional financing if
the debt security contains covenants restricting our ability to obtain such financing while the debt security is outstanding; |
|
|
| using a substantial portion of our cash flow to pay principal
and interest on our debt, which will reduce the funds available for expenses, capital expenditures, acquisitions and other general corporate
purposes; |
|
|
| limitations on our flexibility in planning for and reacting
to changes in our business and in the industry in which we operate; |
|
|
| increased vulnerability to adverse changes in general economic,
industry and competitive conditions and adverse changes in government regulation; and |
|
|
| limitations on our ability to borrow additional amounts for
expenses, capital expenditures, acquisitions, debt service requirements, execution of our strategy and other purposes and other disadvantages
compared to our competitors who have less debt. |
|
**
*We may only be able to complete one Business
Combination with the proceeds of the IPO and the sale of the Private Placement Warrants, which will cause us to be solely dependent on
a single business which may have a limited number of products or services. This lack of diversification may negatively impact our operations
and profitability.*
We will likely effectuate our initial Business
Combination with a single target business or multiple target businesses simultaneously or within a short period of time. However, we may
not be able to effectuate our initial Business Combination with more than one target business because of various factors, including the
existence of complex accounting issues and the requirement that we prepare and file pro forma financial statements with the SEC that present
operating results and the financial condition of several target businesses as if they had been operated on a combined basis. By completing
our initial Business Combination with only a single entity, our lack of diversification may subject us to numerous economic, competitive
and regulatory developments. Further, we would not be able to diversify our operations or benefit from the possible spreading of risks
or offsetting of losses, unlike other entities which may have the resources to complete several Business Combinations in different industries
or different areas of a single industry. Accordingly, the prospects for our success may be:
|
| solely dependent upon the performance of a single business,
property or asset, or |
|
|
| dependent upon the development or market acceptance of a single
or limited number of products, processes or services. |
|
This lack of diversification may subject us to
numerous economic, competitive and regulatory risks, any or all of which may have a substantial adverse impact upon the particular industry
in which we may operate subsequent to our initial Business Combination.
**
**
31
**
*We may attempt to simultaneously complete
Business Combinations with multiple prospective targets, which may hinder our ability to complete our initial Business Combination and
give rise to increased costs and risks that could negatively impact our operations and profitability.*
If we determine to simultaneously acquire several
businesses that are owned by different sellers, we will need for each of such sellers to agree that our purchase of its business is contingent
on the simultaneous closings of the other Business Combinations, which may make it more difficult for us, and delay our ability, to complete
our initial Business Combination. With multiple Business Combinations, we could also face additional risks, including additional burdens
and costs with respect to possible multiple negotiations and due diligence investigations (if there are multiple sellers) and the additional
risks associated with the subsequent assimilation of the operations and services or products of the acquired companies in a single operating
business. If we are unable to adequately address these risks, it could negatively impact our profitability and results of operations.
**
*We may attempt to complete our initial Business
Combination with a private company about which little information is available, which may result in a Business Combination with a company
that is not as profitable as we suspected, if at all.*
In pursuing our Business Combination strategy,
we may seek to effectuate our initial Business Combination with a privately held company. Very little public information generally exists
about private companies, and we could be required to make our decision on whether to pursue a potential initial Business Combination on
the basis of limited information, which may result in a Business Combination with a company that is not as profitable as we suspected,
if at all.
**
*We do not have a specified maximum redemption
threshold. The absence of such a redemption threshold may make it possible for us to complete our initial Business Combination with which
a substantial majority of our shareholders do not agree.*
Our amended and restated memorandum and articles
of association do not provide a specified maximum redemption threshold. Our proposed initial Business Combination may impose a minimum
cash requirement for: (i) cash consideration to be paid to the target or its owners, (ii) cash for working capital or other general corporate
purposes or (iii) the retention of cash to satisfy other conditions. As a result, we may be able to complete our initial Business Combination
even though a substantial majority of our Public Shareholders do not agree with the transaction and have redeemed their shares. In the
event the aggregate cash consideration we would be required to pay for all Public Shares that are validly submitted for redemption plus
any amount required to satisfy cash conditions pursuant to the terms of the proposed Business Combination exceed the aggregate amount
of cash available to us, we will not complete the Business Combination or redeem any shares, all Public Shares submitted for redemption
will be returned to the holders thereof, and we instead may search for an alternate Business Combination.
**
*In order to effectuate an initial Business
Combination, special purpose acquisition companies have, in the recent past, amended various provisions of their charters and other governing
instruments, including their warrant agreements. We cannot assure you that we will not seek to amend our amended and restated memorandum
and articles of association or governing instruments in a manner that will make it easier for us to complete our initial Business Combination
that our shareholders or warrant holders, as applicable, may not support.*
In order to effectuate a Business Combination,
special purpose acquisition companies have, in the recent past, amended various provisions of their charters and governing instruments,
including their warrant agreements. For example, special purpose acquisition companies have amended the definition of business combination,
increased redemption thresholds, extended the time to consummate an initial Business Combination and, with respect to their warrants,
amended their warrant agreements to acquire the warrants to be exchanged for cash and/or other securities. Amending our amended and restated
memorandum and articles of association requires the approval of a special resolution under Cayman Islands law, which requires the affirmative
vote of at least two-thirds (or, with respect to the appointment or removal of directors or continuing the Company outside of the Cayman
Islands, 90%) of the votes cast by such shareholders as, being entitled to do so, vote in person or, where proxies are allowed, by proxy
at the applicable general meeting of the Company, and amending our warrant agreement requires a vote of holders of at least 50% of the
Public Warrants and, solely with respect to any amendment to the terms of the Private Placement Warrants or any provision of the warrant
agreement with respect to the Private Placement Warrants (including, for the avoidance of doubt, the forfeiture or cancellation of any
Private Placement Warrants or working capital warrants), 50% of the then outstanding Private Placement Warrants (including, the vote or
written consent of Cantor). In addition, our amended and restated memorandum and articles of association requires us to provide our Public
Shareholders with the opportunity to redeem their Public Shares, regardless of whether they abstain, vote for, or vote against, our initial
Business Combination, for cash if we propose an amendment to our amended and restated memorandum and articles of association (A) to modify
the substance or timing of our obligation to allow redemption in connection with our initial Business Combination or to redeem 100% of
our Public Shares if we do not complete an initial Business Combination within the Completion Window or (B) with respect to any other
material provisions relating to shareholders rights or pre-initial Business Combination activity. Many SPACs have faced delisting
of their securities following redemptions of shares by public shareholders in connection with proposed amendments to their corporate charters
since, after redeeming a large number of publicly held shares, they no longer meet the continued listing requirements of the stock exchange.
To the extent any of such amendments would be deemed to fundamentally change the nature of the securities offered through the registration
statement filed in connection with our IPO, we would register, or seek an exemption from registration for, the affected securities. We
cannot assure you that we will not seek to amend our charter or governing instruments or extend the time to consummate an initial Business
Combination in order to effectuate our initial Business Combination.
**
**
32
**
*The provisions of our amended and restated
memorandum and articles of association that relate to our pre-Business Combination activity (and corresponding provisions of the agreement
governing the release of funds from our Trust Account) may be amended with the approval of holders of not less than two-thirds of our
ordinary shares which are represented in person or by proxy and are voted at a general meeting of the Company, which is a lower amendment
threshold than that of some other special purpose acquisition companies. It may be easier for us, therefore, to amend our amended and
restated memorandum and articles of association to facilitate the completion of an initial Business Combination that some of our shareholders
may not support.*
Our amended and restated memorandum and articles
of association provide that any of its provisions related to pre-Business Combination activity (including the requirement to deposit proceeds
of the IPO and the Private Placement Warrants into the Trust Account and not release such amounts except in specified circumstances, and
to provide redemption rights to Public Shareholders as described herein, and other than amendments relating to the provisions regulating
the appointment and removal of directors and continuing the Company in a jurisdiction outside the Cayman Islands, which require the approval
of a special resolution passed by the affirmative vote of at least 90% (or, where such amendment is proposed in respect of the consummation
of our initial Business Combination, two-thirds) of the votes cast by such shareholders as, being entitled to do so, vote in person or,
where proxies are allowed, by proxy at the applicable general meeting of the Company) may be amended if approved by special resolution
under Cayman Islands law. Except as specified above with respect to matters requiring a 90% majority, a special resolution requires the
affirmative vote of at least two-thirds of the votes cast by such shareholders as, being entitled to do so, vote in person or, where proxies
are allowed, by proxy at the applicable general meeting of the Company. Corresponding provisions of the trust agreement governing the
release of funds from our Trust Account may be amended if approved by the affirmative vote of at least two-thirds of our ordinary shares
which are represented in person or by proxy and are voted at a general meeting of the Company. Our initial shareholders, who beneficially
own 25% of our ordinary shares, will participate in any vote to amend our amended and restated memorandum and articles of association
and/or trust agreement and will have the discretion to vote in any manner they choose. As a result, we may be able to amend the provisions
of our amended and restated memorandum and articles of association which govern our pre-Business Combination behavior more easily than
some other special purpose acquisition companies, and this may increase our ability to complete a Business Combination with which you
do not agree.
Our Sponsor, officers and directors have agreed,
pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated memorandum and articles
of association (A) to modify the substance or timing of our obligation to allow redemption in connection with our initial Business Combination
or to redeem 100% of our Public Shares if we do not complete our initial Business Combination within the Completion Window or (B) with
respect to any other material provisions relating to shareholders rights or pre-initial Business Combination activity, in each
case unless we provide our Public Shareholders with the opportunity to redeem their Public Shares upon approval of any such amendment
at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on
the funds held in the Trust Account (which interest shall be net of taxes paid or payable), divided by the number of then outstanding
Public Shares. Our shareholders are not parties to, or third-party beneficiaries of, these agreements and, as a result, will not have
the ability to pursue remedies against our Sponsor, officers or directors for any breach of these agreements. As a result, in the event
of a breach, our shareholders would need to pursue a shareholder derivative action, subject to applicable law.
**
**
33
**
*We may be unable to obtain additional financing
to complete our initial Business Combination or to fund the operations and growth of a target business, which could compel us to restructure
or abandon a particular Business Combination.*
We have not selected any specific Business Combination
target but intend to target businesses with enterprise values that are greater than we could acquire with the net proceeds of the IPO
and the sale of the Private Placement Warrants. As a result, if the cash portion of the purchase price exceeds the amount available from
the Trust Account, net of amounts needed to satisfy any redemption by Public Shareholders, we may be required to seek additional financing
to complete such proposed initial Business Combination. We cannot assure you that such financing will be available on acceptable terms,
if at all. To the extent that additional financing proves to be unavailable when needed to complete our initial Business Combination,
we would be compelled to either restructure the transaction or abandon that particular Business Combination and seek an alternative target
business candidate. Further, we may be required to obtain additional financing in connection with the closing of our initial Business
Combination for general corporate purposes, including for maintenance or expansion of operations of the post-transaction businesses, the
payment of principal or interest due on indebtedness incurred in completing our initial Business Combination, or to fund the purchase
of other companies. If we are unable to complete our initial Business Combination, our Public Shareholders may only receive their pro
rata portion of the funds in the Trust Account that are available for distribution to Public Shareholders, and our warrants will expire
worthless. In addition, even if we do not need additional financing to complete our initial Business Combination, we may require such
financing to fund the operations or growth of the target business. The failure to secure additional financing could have a material adverse
effect on the continued development or growth of the target business. None of our officers, directors or shareholders is required to provide
any financing to us in connection with or after our initial Business Combination.
**
*Our initial shareholders will control the
appointment of our board of directors until consummation of our initial Business Combination and will hold a substantial interest in us.
As a result, it will appoint all of our directors prior to the consummation of our initial Business Combination and may exert a substantial
influence on actions requiring a shareholder vote, potentially in a manner that you do not support.*
Our initial shareholders own 25% of our issued
and outstanding ordinary shares. Accordingly, they may exert a substantial influence on actions requiring a shareholder vote, potentially
in a manner that you do not support, including amendments to our amended and restated memorandum and articles of association. This potential
concentration of influence could be disadvantageous to other shareholders with interests different from those of our initial shareholders.
In addition, the Founder Shares, all of which are held by our initial shareholders, will entitle the holders to appoint all of our directors
prior to the consummation of our initial Business Combination. Holders of our Public Shares will have no right to vote on the appointment
or removal of directors during such time. Further, prior to the closing of our initial Business Combination, only holders of our Class
B Ordinary Shares will be entitled to vote on continuing our company in a jurisdiction outside the Cayman Islands (including any special
resolution required to amend our constitutional documents or to adopt new constitutional documents, in each case, as a result of our approving
a transfer by way of continuation to a jurisdiction outside the Cayman Islands). In addition, our board of directors is divided into three
classes, each of which generally serves for a term of three years with only one class of directors being appointed in each year. These
provisions of our amended and restated memorandum and articles of association may only be amended if approved by a special resolution
passed by the affirmative vote of at least 90% (or, where such amendment is proposed in respect of the consummation of our initial Business
Combination, two-thirds) of the votes cast by such shareholders as, being entitled to do so, vote in person or, where proxies are allowed,
by proxy at the applicable general meeting of the Company. As a result, you will not have any influence over the appointment or removal
of directors prior to our initial Business Combination or any influence over our continuation to a jurisdiction outside the Cayman Islands
prior to our initial Business Combination. If our initial shareholders purchase any additional Class A Ordinary Shares in the aftermarket
or in privately negotiated transactions, this would increase their control. Neither our initial shareholders nor, to our knowledge, any
of our officers or directors, have any current intention to purchase additional securities, other than as disclosed in this Form 10-K.
Factors that would be considered in making such additional purchases would include consideration of the current trading price of our Class
A Ordinary Shares. We may not hold an annual or extraordinary general meeting to appoint new directors prior to the completion of our
initial Business Combination, in which case all of the current directors will continue in office until at least the completion of the
Business Combination. In addition, since only holders of our Class B Ordinary Shares will have the right to vote on directors prior to
our initial Business Combination, our initial shareholders will continue to exert control at least until the completion of our initial
Business Combination.
**
**
34
**
*We may not be able to complete an initial
Business Combination because such initial Business Combination may be subject to regulatory review and approval requirements, including
foreign investment regulations and review by government entities such as the Committee on Foreign Investment in the United States (CFIUS),
or may be ultimately prohibited.*
Our initial Business Combination may be subject
to regulatory review and approval requirements by governmental entities, or ultimately prohibited. For example, CFIUS has authority to
review direct or indirect foreign investments in U.S. companies. Among other things, CFIUS is empowered to require certain foreign investors
to make mandatory filings, to charge filing fees related to such filings, and to self-initiate national security reviews of foreign direct
and indirect investments in U.S. companies if the parties to that investment choose not to file voluntarily. In the case that CFIUS determines
an investment to be a threat to national security, CFIUS has the power to unwind or place restrictions on the investment. Whether CFIUS
has jurisdiction to review an acquisition or investment transaction depends on - among other factors - the nature and structure of the
transaction, including the level of beneficial ownership interest and the nature of any information or governance rights involved. For
example, investments that result in control of a U.S. business by a foreign person always are subject to CFIUS jurisdiction.
CFIUSs expanded jurisdiction under the Foreign Investment Risk Review Modernization Act of 2018 and implementing regulations that
became effective on February 13, 2020 further includes investments that do not result in control of a U.S. business by a foreign person
but afford certain foreign investors certain information or governance rights in a U.S. business that has a nexus to critical technologies,
critical infrastructure and/or sensitive personal data.
If a particular proposed initial Business Combination
with a U.S. business falls within CFIUSs jurisdiction, we may determine that we are required to make a mandatory filing or that
we will submit to CFIUS review on a voluntary basis, or to proceed with the transaction without submitting to CFIUS and risk CFIUS intervention,
before or after closing the transaction. CFIUS may decide to block or delay our proposed initial Business Combination, impose conditions
with respect to such initial Business Combination or request the President of the United States to order us to divest all or a portion
of the U.S. target business of our initial Business Combination that we acquired without first obtaining CFIUS approval, which may limit
the attractiveness of, delay or prevent us from pursuing certain target companies that we believe would otherwise be beneficial to us
and our shareholders. As a result, the pool of potential targets with which we could complete an initial Business Combination may be limited
and we may be adversely affected in terms of competing with other special purpose acquisition companies which do not have any foreign
ownership issues. In addition, certain federally licensed businesses may be subject to rules or regulations that limit foreign ownership.
The process of government review, whether by CFIUS
or otherwise, could be lengthy. Because we have only a limited time to complete our initial Business Combination, our failure to obtain
any required approvals within the requisite time period may require us to liquidate. If we are unable to consummate our initial Business
Combination within the applicable time period required under our amended and restated memorandum and articles of association, including
as a result of extended regulatory review of a potential initial Business Combination, we will as promptly as reasonably possible but
not more than ten business days thereafter (and subject to lawfully available funds therefor), redeem the Public Shares, at a per-share
price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held
in the Trust Account (which interest shall be net of taxes paid or payable and up to $100,000 of interest to pay liquidation expenses),
divided by the number of then issued outstanding Public Shares, which redemption will completely extinguish Public Shareholders
rights as shareholders (including the right to receive further liquidating distributions, if any), subject to our obligations under Cayman
Islands law to provide for claims of creditors and the requirements of other applicable law. In such event, our shareholders will miss
the opportunity to benefit from an investment in a target company and the appreciation in value of such investment. Additionally, our
warrants may be worthless.
**
*As the number of special purpose acquisition
companies evaluating targets increases, attractive targets may become more scarce and there may be more competition for attractive targets
or such attractive targets may not be interested in consummating a Business Combination with a SPAC due to a negative public perception
of mergers involving SPACs. This could increase the cost of our initial Business Combination and could even result in our inability to
find a target or to consummate an initial Business Combination.*
In recent years, the number of special purpose
acquisition companies that have been formed increased substantially. Many potential targets for special purpose acquisition companies
have already entered into an initial Business Combination, and there are still many special purpose acquisition companies preparing for
an initial public offering, as well as many such companies currently in registration. As a result, at times, fewer attractive targets
may be available to consummate an initial Business Combination.
35
In addition, because there are more special purpose
acquisition companies seeking to enter into an initial Business Combination with available targets, the competition for available targets
with attractive fundamentals or business models may increase, which could cause target companies to demand improved financial terms. Attractive
deals could also become more scarce for other reasons, such as economic or industry sector downturns (including a negative public perception
of mergers involving SPACs), geopolitical tensions, or increases in the cost of additional capital needed to close Business Combinations
or operate targets post-Business Combination. This could increase the cost of, delay or otherwise complicate or frustrate our ability
to find and consummate an initial Business Combination and may result in our inability to consummate an initial Business Combination on
terms favorable to our investors altogether.
**
*Adverse developments affecting the financial
services industry, including events or concerns involving liquidity, defaults or non-performance by financial institutions, could adversely
affect our business, financial condition or results of operations, or our prospects.*
The funds in our operating account and our Trust
Account can be held in banks or other financial institutions and will be invested only in U.S. government treasury obligations with a
maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act which
invest only in direct U.S. government treasury obligations and/or held as cash or cash items (including in demand deposit accounts); the
holding of these assets in this form is intended to be temporary and for the sole purpose of facilitating the intended Business Combination.
To mitigate the risk that we might be deemed to be an investment company for purposes of the Investment Company Act, which risk increases
the longer that we hold investments in the Trust Account, we may, at any time (based on our management teams ongoing assessment
of all factors related to our potential status under the Investment Company Act), instruct the trustee to liquidate the investments held
in the Trust Account and instead to hold the funds in the Trust Account in cash or in an interest-bearing demand deposit account at a
bank. Our cash held in these accounts may exceed any applicable Federal Deposit Insurance Corporation (FDIC) insurance limits.
Should events, including limited liquidity, defaults, non-performance or other adverse developments occur with respect to the banks or
other financial institutions that hold our funds, or that affect financial institutions or the financial services industry generally,
or concerns or rumors about any events of these kinds or other similar risks, the value of the assets in our Trust Account could be impaired,
which could have a material impact on our operating results, liquidity, financial condition and prospects. For example, on March 10, 2023,
the FDIC announced that Silicon Valley Bank had been closed by the California Department of Financial Protection and Innovation. We cannot
guarantee that the banks or other financial institutions that will hold our funds will not experience similar issues.
**
*Because we must furnish our shareholders
with target business financial statements, we may lose the ability to complete an otherwise advantageous initial Business Combination
with some prospective target businesses.*
The federal proxy rules require that a proxy statement
with respect to a vote on an initial Business Combination meeting certain financial significance tests include historical and pro forma
financial statement disclosure. We will include the same financial statement disclosure in connection with our tender offer documents,
whether or not they are required under the tender offer rules. These financial statements may be required to be prepared in accordance
with, or be reconciled to, accounting principles generally accepted in the United States of America (GAAP) or international
financial reporting standards as issued by the International Accounting Standards Board (IFRS) depending on the circumstances
and the historical financial statements may be required to be audited in accordance with the standards of the Public Company Accounting
Oversight Board (United States) (PCAOB). These financial statement requirements may limit the pool of potential target businesses
we may acquire because some targets may be unable to provide such financial statements in time for us to disclose such financial statements
in accordance with federal proxy rules and complete our initial Business Combination within the prescribed time frame.
**
**
36
**
*Compliance obligations under the Sarbanes-Oxley
Act may make it more difficult for us to effectuate our initial Business Combination, require substantial financial and management resources,
and increase the time and costs of completing an initial Business Combination.*
Section 404 of the Sarbanes-Oxley Act requires
that we evaluate and report on our system of internal controls beginning with our Annual Report on Form 10-K for the year ending December
31, 2026. Only in the event we are deemed to be a large accelerated filer or an accelerated filer, and no longer qualify as an emerging
growth company, will we be required to comply with the independent registered public accounting firm attestation requirement on our internal
control over financial reporting. Further, for as long as we remain an emerging growth company, we will not be required to comply with
the independent registered public accounting firm attestation requirement on our internal control over financial reporting. The fact that
we are a blank check company makes compliance with the requirements of the Sarbanes-Oxley Act particularly burdensome on us as compared
to other public companies because a target business with which we seek to complete our initial Business Combination may not be in compliance
with the provisions of the Sarbanes-Oxley Act regarding adequacy of its internal controls. The development of the internal control of
any such entity to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete any such Business
Combination.
**
*Risks Relating to the Post-Business Combination
Company*
**
*Subsequent to our completion of our initial
Business Combination, we may be required to take write-downs or write-offs, restructuring and impairment or other charges that could have
a significant negative effect on our financial condition, results of operations and the price of our securities, which could cause you
to lose some or all of your investment.*
Even if we conduct due diligence on a target business
with which we combine, we cannot assure you that this diligence will identify all material issues that may be present within a particular
target business, that it would be possible to uncover all material issues through a customary amount of due diligence, or that factors
outside of the target business and outside of our control will not later arise. As a result of these factors, we may be forced to later
write-down or write-off assets, restructure our operations, or incur impairment or other charges that could result in our reporting losses.
Even if our due diligence successfully identifies certain risks, unexpected risks may arise and previously known risks may materialize
in a manner not consistent with our preliminary risk analysis. Even though these charges may be non-cash items and not have an immediate
impact on our liquidity, the fact that we report charges of this nature could contribute to negative market perceptions about us or our
securities. In addition, charges of this nature may cause us to violate net worth or other covenants to which we may be subject as a result
of assuming pre-existing debt held by a target business or by virtue of our obtaining debt financing to partially finance the initial
Business Combination or thereafter. Accordingly, any securityholders who choose to remain securityholders following the Business Combination
could suffer a reduction in the value of their securities. Such securityholders are unlikely to have a remedy for such reduction in value
unless they are able to successfully claim that the reduction was due to the breach by our officers or directors of a duty of care or
other fiduciary duty owed to them, or if they are able to successfully bring a private claim under securities laws that the proxy materials
or tender offer documents, as applicable, relating to the Business Combination contained an actionable material misstatement or material
omission.
**
*The officers and directors of an acquisition
candidate may resign upon completion of our initial Business Combination. The loss of a Business Combination targets key personnel
could negatively impact the operations and profitability of our post-combination business.*
The role of an acquisition candidates key
personnel upon the completion of our initial Business Combination cannot be ascertained at this time. Although we contemplate that certain
members of an acquisition candidates management team will remain associated with the acquisition candidate following our initial
Business Combination, it is possible that members of the management of an acquisition candidate will not wish to remain in place. The
departure of an acquisition candidates key personnel could negatively impact the operations and profitability of our post-combination
business.
**
*Our management may not be able to maintain
control of a target business after our initial Business Combination. We cannot provide assurance that, upon loss of control of a target
business, new management will possess the skills, qualifications or abilities necessary to profitably operate such business**.*
We may structure our initial Business Combination
so that the post-transaction company in which our Public Shareholders own shares will own less than 100% of the equity interests or assets
of a target business, but we will only complete such Business Combination if the post-transaction company owns or acquires 50% or more
of the outstanding voting securities of the target or is otherwise not to be required to register as an investment company under the Investment
Company Act. We will not consider any transaction that does not meet such criteria. Even if the post-transaction company owns 50% or more
of the voting securities of the target, our shareholders prior to our initial Business Combination may collectively own a minority interest
in the post Business Combination company, depending on valuations ascribed to the target and us in the Business Combination. For example,
we could pursue a transaction in which we issue a substantial number of new Class A Ordinary Shares in exchange for all of the outstanding
capital stock, shares or other equity interests of a target. In this case, we would acquire a 100% interest in the target. However, as
a result of the issuance of a substantial number of new Class A Ordinary Shares, our shareholders immediately prior to such transaction
could own less than a majority of our issued and outstanding Class A Ordinary Shares subsequent to such transaction. In addition, other
minority shareholders may subsequently combine their holdings resulting in a single person or group obtaining a larger share of the Companys
shares than we initially acquired. Accordingly, this may make it more likely that our management will not be able to maintain control
of the target business.
**
**
37
**
*We may have a limited ability to assess
the management of a prospective target business and, as a result, may effect our initial Business Combination with a target business whose
management may not have the skills, qualifications or abilities to manage a public company.*
When evaluating the desirability of effecting
our initial Business Combination with a prospective target business, our ability to assess the target businesss management may
be limited due to a lack of time, resources or information. Our assessment of the capabilities of the target businesss management,
therefore, may prove to be incorrect and such management may lack the skills, qualifications or abilities we suspected. Should the target
businesss management not possess the skills, qualifications or abilities necessary to manage a public company, the operations and
profitability of the post-combination business may be negatively impacted. Accordingly, any securityholders who choose to remain securityholders
following the Business Combination could suffer a reduction in the value of their shares. Such securityholders are unlikely to have a
remedy for such reduction in value unless they are able to successfully claim that the reduction was due to the breach by our officers
or directors of a duty of care or other fiduciary duty owed to them, or if they are able to successfully bring a private claim under securities
laws that the proxy materials or tender offer documents, as applicable, relating to the Business Combination contained an actionable material
misstatement or material omission.
**
*We may seek Business Combination opportunities
with a high degree of complexity that require significant operational improvements, which could delay or prevent us from achieving our
desired results.*
We may seek Business Combination opportunities
with large, highly complex companies that we believe would benefit from operational improvements. While we intend to implement such improvements,
to the extent that our efforts are delayed or we are unable to achieve the desired improvements, the Business Combination may not be as
successful as we anticipate.
To the extent we complete our initial Business
Combination with a large complex business or entity with a complex operating structure, we may also be affected by numerous risks inherent
in the operations of the business with which we combine, which could delay or prevent us from implementing our strategy. Although our
management team will endeavor to evaluate the risks inherent in a particular target business and its operations, we may not be able to
properly ascertain or assess all of the significant risk factors until we complete our Business Combination. If we are not able to achieve
our desired operational improvements, or the improvements take longer to implement than anticipated, we may not achieve the gains that
we anticipate. Furthermore, some of these risks and complexities may be outside of our control and leave us with no ability to control
or reduce the chances that those risks and complexities will adversely impact a target business. Such combination may not be as successful
as a combination with a smaller, less complex organization.
**
*Transactions in connection with or in anticipation
of our initial Business Combination and our structure thereafter may not be tax-efficient to our shareholders and warrant holders. As
a result of our Business Combination, our tax obligations may be more complex, burdensome and/or uncertain.*
Although we will attempt to structure the transactions
in connection with our initial Business Combination in a tax-efficient manner, tax structuring considerations are complex, the relevant
facts and law are uncertain and may change, and we may prioritize commercial and other considerations over tax considerations. For example,
in anticipation of or in connection with our initial Business Combination and subject to any requisite shareholder approval, we may: enter
into one or more transactions that require or structure our Business Combination in a manner that requires shareholders and/or warrant
holders to recognize gain or income for tax purposes or otherwise increase their tax burden; effect a Business Combination with a target
company in another jurisdiction; or reincorporate in a different jurisdiction (including, but not limited to, the jurisdiction in which
the target company or business is located). We do not intend to make any cash distributions to shareholders or warrant holders to pay
taxes in connection with our Business Combination or thereafter. Accordingly, a shareholder or a warrant holder may need to satisfy any
liability resulting from our initial Business Combination with cash from its own funds or by selling all or a portion of the shares or
warrants received.
38
In addition, we will likely effect a Business
Combination with a target company that has business operations outside of the United States, and possibly, business operations in multiple
jurisdictions. If we effect such a Business Combination, we could be subject to significant income, withholding and other tax obligations
in a number of jurisdictions with respect to income, operations and subsidiaries related to those jurisdictions. Due to the complexity
of tax obligations and filings in other jurisdictions, we may have a heightened risk related to audits or examinations by U.S. federal,
state, local and non-U.S. taxing authorities. This additional complexity and risk could have an adverse effect on our after-tax profitability
and financial condition. In addition, shareholders and warrant holders may be subject to additional income, withholding or other taxes
with respect to their ownership of us after any such transaction.
**
*Risks Relating to Acquiring and Operating
a Business in Foreign Countries*
**
*If we effect our initial Business Combination
with a company located outside of the United States, we would be subject to a variety of additional risks that may adversely affect us.*
If we pursue a target company with operations
or opportunities outside of the United States for our initial Business Combination, we may face additional burdens in connection with
investigating, agreeing to and completing such initial Business Combination, and if we effect such initial Business Combination, we would
be subject to a variety of additional risks that may negatively impact our operations.
If we pursue a target company with operations
or opportunities outside of the United States for our initial Business Combination, we would be subject to risks associated with cross-border
Business Combinations, including in connection with investigating, agreeing to and completing our initial Business Combination, conducting
due diligence in a foreign jurisdiction, having such transaction approved by any local governments, regulators or agencies and changes
in the purchase price based on fluctuations in foreign exchange rates.
If we effect our initial Business Combination
with such a company, we would be subject to any special considerations or risks associated with companies operating in an international
setting, including any of the following:
|
| costs and difficulties inherent in executing cross-border
transactions, managing cross-border business operations and complying with different commercial and legal requirements of overseas market; |
|
|
| rules and regulations regarding currency redemption; |
|
|
| complex corporate withholding taxes on individuals; |
|
|
| laws governing the manner in which future Business Combinations
may be effected; |
|
|
| exchange listing and/or delisting requirements; |
|
|
| tariffs and trade barriers; |
|
|
| regulations related to customs and import/export matters; |
|
|
| local or regional economic policies and market conditions; |
|
|
| unexpected changes in regulatory requirements; |
|
|
| challenges in managing and staffing international operations; |
|
|
| longer payment cycles; |
|
|
| tax issues, such as tax law changes and variations in tax
laws as compared to the United States; |
|
|
| currency fluctuations and exchange controls; |
|
39
|
| rates of inflation; |
|
|
| challenges in collecting accounts receivable; |
|
|
| cultural and language differences; |
|
|
| employment regulations; |
|
|
| underdeveloped or unpredictable legal or regulatory systems; |
|
|
| corruption; |
|
|
| protection of intellectual property; |
|
|
| social unrest, crime, strikes, riots and civil disturbances; |
|
|
| regime changes and political upheaval; |
|
|
| terrorist attacks, natural disasters, widespread health emergencies
and wars; and |
|
|
| deterioration of political relations with the United States. |
|
We may not be able to adequately address these
additional risks. If we were unable to do so, we may be unable to complete such initial Business Combination, or, if we complete such
initial Business Combination, our operations might suffer, either of which may adversely impact our business, financial condition and
results of operations.
**
*We may reincorporate in or transfer by way
of continuation to another jurisdiction in connection with our Business Combination, and such reincorporation may result in taxes imposed
on shareholders or warrant holders.*
We may, in connection with our initial Business
Combination or otherwise and, to the extent applicable, subject to requisite shareholder approval by special resolution under the Companies
Act (with respect to which only holders of Class B Ordinary Shares will be entitled to vote prior to our initial Business Combination),
reincorporate in or transfer by way of continuation to the jurisdiction in which the target company or business is located or in another
jurisdiction. The transaction may require a shareholder or warrant holder to recognize taxable income in the jurisdiction in which the
shareholder or warrant holder is a tax resident or in which its members are resident if it is a tax transparent entity (or may otherwise
result in adverse tax consequences). We do not intend to make any cash distributions to shareholders or warrant holders to pay such taxes.
Shareholders or warrant holders may be subject to withholding taxes or other taxes with respect to their ownership of our Class A Ordinary
Shares or warrants after the reincorporation.
In particular, although we may attempt to structure
any change in our jurisdiction of incorporation (if any) in a tax-efficient manner (including, if possible, in a manner that is tax-deferred
for U.S. federal income tax purposes), tax structuring considerations are complex, the relevant facts and law may be uncertain and may
change, we may prioritize commercial and other considerations over tax considerations, and we may prioritize company-level tax considerations
over the tax considerations of our shareholders and warrant holders. As a result, the change in our jurisdiction of incorporation may
have adverse tax consequences to us or to our shareholders and warrant holders, including the recognition of substantial gain for U.S.
federal income tax purposes, and because you may not have prior notice of our change in jurisdiction, you may not be able to avoid such
consequences. For example, under certain circumstances, including if we are treated as a PFIC, a U.S. Holder may be subject to U.S. federal
income tax on gain or a deemed dividend upon the exchange of our ordinary shares or warrants for our successors shares or warrants,
and such taxes may be substantial. For a more detailed discussion of the PFIC rules and the related tax considerations for U.S. investors,
see the section of the IPO registration statement captioned *Income Tax Considerations - Material United States Federal Income
Tax Considerations - U.S. Holders - Passive Foreign Investment Company Rules*.
In addition to the immediate consequences of a
change in our jurisdiction of incorporation, holding our successors shares or warrants following a change in our jurisdiction of
incorporation could have different, potentially adverse, consequences as compared to those of holding our shares or warrants prior to
any such change. For example, if we were to change our jurisdiction of incorporation from the Cayman Islands to Delaware, this could have
a number of adverse consequences to non-U.S. Holders who own our successors shares or warrants by exposing them to U.S. taxation
and reporting obligations, such as the taxation of dividends from our successor or the taxation of dispositions of our successors
shares or warrants. Because such persons may not have prior notice of our change in jurisdiction, they may not be able to change the manner
in which they hold our shares or warrants or dispose of our shares or warrants prior to any such change in our jurisdiction of incorporation,
and therefore such persons may not be able to avoid any adverse consequences of holding our successors shares or warrants after
such change.
40
Further, it is possible that we would change our
jurisdiction of incorporation in anticipation of consummating a specific Business Combination but not complete that Business Combination
for any number of reasons. If we are unable to consummate a Business Combination with a specific Business Combination target following
such a change in our jurisdiction of incorporation, our new jurisdiction of incorporation could have disadvantages to us or our shareholders
and/or warrant holders, particularly if we subsequently pursue a Business Combination with a target that is incorporated in a different
jurisdiction. In such circumstances, we may not be as competitive with other special purpose acquisition companies incorporated in the
Cayman Islands when pursuing certain target companies, the consummation of our initial Business Combination could be more complex, or
it may be more difficult to structure such an initial Business Combination in a tax-efficient manner. For example, we may change our jurisdiction
of incorporation to the United States in anticipation of a Business Combination with a U.S. target company but ultimately effect our initial
Business Combination with a non-U.S. target company. In such a case, we may be unable to structure our initial Business Combination in
a tax-deferred manner, and our shareholders and/or warrant holders may be required to pay substantial U.S. federal income or other taxes
in connection with the consummation of the initial Business Combination. In addition, the initial Business Combination may result in tax
inefficiencies for the post-Business Combination entity, including that, if the post-Business Combination entity is organized outside
of the United States, it may nevertheless be treated as a U.S. corporation for U.S. federal income tax purposes, which treatment may result
in substantial tax inefficiencies for both the post-Business Combination entity and for our shareholders and/or warrant holders.
We cannot assure you when or whether we will change
our jurisdiction of incorporation or, if we do change our jurisdiction of incorporation, the jurisdiction in which we will ultimately
be incorporated. Accordingly, there is significant uncertainty as to the legal, tax and other considerations that may be applicable to
us or to our shareholders and warrant holders, and we cannot provide you with specific or comprehensive examples of such potential consequences.
The rules governing a change in our jurisdiction of incorporation and the transactions that may occur in connection with our initial Business
Combination are complex, and the consequences arising from such rules or transactions will depend on a holders particular circumstances
and on the circumstances surrounding our change in jurisdiction and initial Business Combination. All investors considering an investment
in our securities are urged to consult with and rely solely upon their own legal and tax advisors regarding the potential consequences
to them of any change in our jurisdiction of incorporation.
**
*We may reincorporate in or transfer by way
of continuation to another jurisdiction in connection with our initial Business Combination, and the laws of such jurisdiction may govern
some or all of our future material agreements and we may not be able to enforce our legal rights.*
In connection with our initial Business Combination,
we may relocate the home jurisdiction of our business from the Cayman Islands to another jurisdiction. If we determine to do this, the
laws of such jurisdiction may govern some or all of our future material agreements. The system of laws and the enforcement of existing
laws in such jurisdiction may not be as certain in implementation and interpretation as in the United States. The inability to enforce
or obtain a remedy under any of our future agreements could result in a significant loss of business, business opportunities or capital.
**
*We are subject to changing law and regulations
regarding regulatory matters, corporate governance and public disclosure that have increased both our costs and the risk of non-compliance.*
We are subject to rules and regulations by various
governing bodies, including, for example, the SEC, which are charged with the protection of investors and the oversight of companies whose
securities are publicly traded, and to new and evolving regulatory measures under applicable law. Our efforts to comply with new and changing
laws and regulations have resulted in and are likely to continue to result in, increased general and administrative expenses and a diversion
of management time and attention from revenue-generating activities to compliance activities.
Moreover, because these laws, regulations and
standards are subject to varying interpretations, their application in practice may evolve over time as new guidance becomes available.
This evolution may result in continuing uncertainty regarding compliance matters and additional costs necessitated by ongoing revisions
to our disclosure and governance practices. If we fail to address and comply with these regulations and any subsequent changes, we may
be subject to penalty and our business may be harmed.
**
**
41
**
*Exchange rate fluctuations and currency
policies may cause a target business ability to succeed in the international markets to be diminished**.*
In the event we acquire a non-U.S. target, all
revenues and income would likely be received in a foreign currency, and the dollar equivalent of our net assets and distributions, if
any, could be adversely affected by reductions in the value of the local currency. The value of the currencies in our target regions fluctuate
and are affected by, among other things, changes in political and economic conditions. Any change in the relative value of such currency
against our reporting currency may affect the attractiveness of any target business or, following consummation of our initial Business
Combination, our financial condition and results of operations. Additionally, if a currency appreciates in value against the dollar prior
to the consummation of our initial Business Combination, the cost of a target business as measured in dollars will increase, which may
make it less likely that we are able to consummate such transaction.
**
*After our initial Business Combination,
substantially all of our assets may be located in a foreign country and substantially all of our revenue will be derived from our operations
in such country. Accordingly, our results of operations and prospects will be subject, to a significant extent, to the economic, political
and legal policies, developments and conditions in the country in which we operate.*
The economic, political and social conditions,
as well as government policies, of the country in which our operations are located could affect our business. Economic growth could be
uneven, both geographically and among various sectors of the economy and such growth may not be sustained in the future. If in the future
such countrys economy experiences a downturn or grows at a slower rate than expected, there may be less demand for spending in
certain industries. A decrease in demand for spending in certain industries could materially and adversely affect our ability to find
an attractive target business with which to consummate our initial Business Combination and if we effect our initial Business Combination,
the ability of that target business to become profitable.
Risks Relating to our *Sponsor* and Management
Team
**
*A change of ownership or control of our
Sponsor could adversely affect our ability to consummate our initial Business Combination.*
There are no restrictions on our Sponsors
sole managing members ability to transfer equity interests in our Sponsor held by the sole managing member or otherwise consent
to a transfer of such equity interests by another member of our Sponsor. Transfers of equity interests in the Sponsor or its direct or
indirect parent entities may result in a change of ownership or control of our Sponsor. Such change of ownership or control of our Sponsor
could adversely affect our ability to consummate our initial Business Combination, as there can be no assurances that a new sponsor will
possess the requisite skills, investor relationships and expertise to select an appropriate target business, obtain the necessary financing
and consummate the initial Business Combination.
**
*We are dependent upon our executive officers
and directors and their loss, or a reduction in the amount of time they can dedicate to our initial Business Combination, could adversely
affect our ability to operate.*
Our operations are dependent upon a relatively
small group of individuals and, in particular, our executive officers, directors and the members of our advisory board. We believe that
our success depends on the continued service of our officers, directors and the members of our advisory board, at least until we have
completed our initial Business Combination. In addition, our executive officers and directors are not required to commit any specified
amount of time to our affairs and, accordingly, will have conflicts of interest in allocating their time among various business activities,
including identifying potential Business Combinations and monitoring the related due diligence. We do not have an employment agreement
with, or key-man insurance on the life of, any of our directors or executive officers. The unexpected loss of the services of one or more
of our directors or executive officers could have a detrimental effect on us.
**
**
42
**
*Our ability to successfully effect our initial
Business Combination and to be successful thereafter will be dependent upon the efforts of our key personnel, some of whom may join us
following our initial Business Combination. The loss of key personnel could negatively impact the operations and profitability of our
post-combination business**.*
Our ability to successfully effect our initial
Business Combination is dependent upon the efforts of our key personnel. The role of our key personnel in the target business, however,
cannot presently be ascertained. Although some of our key personnel may remain with the target business in senior management or advisory
positions following our initial Business Combination, it is likely that some or all of the management of the target business will remain
in place. While we intend to closely scrutinize any individuals we engage after our initial Business Combination, we cannot assure you
that our assessment of these individuals will prove to be correct. These individuals may be unfamiliar with the requirements of operating
a company regulated by the SEC, which could cause us to have to expend time and resources helping them become familiar with such requirements.
**
*Our key personnel may negotiate employment
or consulting agreements with a target business in connection with a particular Business Combination, and a particular Business Combination
may be conditioned on the retention or resignation of such key personnel. These agreements may provide for them to receive compensation
following our initial Business Combination and, as a result, may cause them to have conflicts of interest in determining whether a particular
Business Combination is the most advantageous.*
Our key personnel may be able to remain with our
company after the completion of our initial Business Combination only if they are able to negotiate employment or consulting agreements
in connection with the Business Combination. Such negotiations would take place simultaneously with the negotiation of the Business Combination
and could provide for such individuals to receive compensation in the form of cash payments and/or our securities for services they would
render to us after the completion of the Business Combination. Such negotiations also could make such key personnels retention
or resignation a condition to any such agreement. The personal and financial interests of such individuals may influence their motivation
in identifying and selecting a target business, subject to their fiduciary duties under Cayman Islands law.
**
*Our executive officers and directors will
allocate their time to other businesses thereby causing conflicts of interest in their determination as to how much time to devote to
our affairs. This conflict of interest could have a negative impact on our ability to complete our initial Business Combination.*
Our executive officers and directors are not required
to, and will not, commit their full time to our affairs, which may result in a conflict of interest in allocating their time between our
operations and our search for a Business Combination and their other businesses. We do not intend to have any full-time employees prior
to the completion of our initial Business Combination. If our executive officers and directors other business affairs require
them to devote substantial amounts of time to such affairs in excess of their current commitment levels, it could limit their ability
to devote time to our affairs which may have a negative impact on our ability to complete our initial Business Combination. Any such companies,
businesses or investments may present additional conflicts of interest in pursuing an initial Business Combination. In our discussions
with any potential targets, our management team and our Sponsor will ensure that the target has a clear understanding that it will transact
with us and with no other special purpose acquisition company that may be sponsored by our management team. For a complete discussion
of our executive officers and directors other business affairs, please see *Item 10. Directors, Executive Officers
and Corporate Governance.*
**
43
*Our officers and directors presently have,
and any of them in the future may have additional, fiduciary or contractual obligations to other entities, including other blank check
companies, and, accordingly, may have conflicts of interest in allocating their time and in determining to which entity a particular business
opportunity should be presented.*
Until we consummate our initial Business Combination,
we intend to engage in the business of identifying and combining with one or more businesses or entities. Our Sponsor, its sole managing
member, and our officers and directors are, and in the future may become, affiliated with such entities (such as operating companies or
investment vehicles) that are engaged in a similar business. We do not have employment contracts with our officers and directors that
will limit their ability to work at other businesses. In addition, our Sponsor, officers and directors may participate in the formation
of, or become an officer or director of, any other blank check company prior to completion of our initial Business Combination. As a result,
our Sponsor, officers and directors could have conflicts of interest in determining whether to present Business Combination opportunities
to us or to any other blank check company with which they may become involved. Our Sponsor, officers and directors have complete discretion,
subject to applicable fiduciary duties, as to which blank check company they choose to pursue a Business Combination and the order in
which they pursue Business Combinations for any of their existing or future blank check companies. As a result, our Sponsor, officers
and directors may pursue Business Combinations for blank check companies that it has sponsored in any order, which could result in its
more recent blank check companies completing Business Combinations prior to its blank check companies that were launched earlier. Our
officers and directors presently have, and any of them in the future may have additional, fiduciary, contractual or other obligations
or duties to one or more other entities pursuant to which such officer or director is or will be required to present a Business Combination
opportunity to such entities. Accordingly, if any of our officers or directors becomes aware of a Business Combination opportunity which
is suitable for an entity to which he or she has then current fiduciary or contractual obligations, he or she will honor his or her fiduciary
or contractual obligations to present such Business Combination opportunity to such other entity, subject to their fiduciary duties under
Cayman Islands law. In addition, certain of our officers and directors are members of our Sponsor and own membership interests of our
Sponsor. The remaining membership interests are held by third party investors that are not affiliated with members of our management.
We do not believe, however, that the fiduciary duties or contractual obligations of our officers or directors will materially affect our
ability to complete our Business Combination. Our amended and restated memorandum and articles of association provide that, to the fullest
extent permitted by applicable law: (i) no individual serving as a director or an officer, among other persons, shall have any duty, except
and to the extent expressly assumed by contract, to refrain from engaging directly or indirectly in the same or similar business activities
or lines of business as us, and (ii) we renounce any interest or expectancy in, or in being offered an opportunity to participate in,
any potential transaction or matter which (a) may be a corporate opportunity for any director or officer, on the one hand, and us, on
the other or (b) the presentation of which would breach an existing legal obligation of a director or officer to any other entity. The
purpose for the surrender of corporate opportunities is to allow officers, directors or other representatives with multiple business affiliations
to continue to serve as an officer of our Company or on our board of directors. Our officers and directors may from time to time be presented
with opportunities that could benefit both another business affiliation and us. In the absence of the corporate opportunity
waiver in our charter, certain candidates would not be able to serve as an officer or director. We believe we substantially benefit from
having representatives who bring significant, relevant and valuable experience to our management, and, as a result, the inclusion of the
corporate opportunity waiver in our amended and restated memorandum and articles of association provide us with greater
flexibility to attract and retain the officers and directors that we feel are the best candidates. We do not believe, however, that the
fiduciary duties or contractual obligations of our officers or directors will materially affect our ability to complete our initial business.
In our discussions with any potential targets, our management team and our Sponsor will ensure that the target has a clear understanding
that it will transact with us and with no other special purpose acquisition company that may be sponsored by our management team.
**
*Our executive officers, directors, security
holders and their respective affiliates may have competitive pecuniary interests that conflict with our interests.*
We have not adopted a policy that expressly prohibits
our directors, officers, security holders or affiliates from having a direct or indirect pecuniary or financial interest in any investment
to be acquired or disposed of by us or in any transaction to which we are a party or have an interest. In fact, we may enter into a Business
Combination with a target business that is affiliated with our Sponsor, our directors or officers, although we do not intend to do so.
Nor do we have a policy that expressly prohibits any such persons from engaging for their own account in business activities of the types
conducted by us. Accordingly, such persons or entities may have a conflict between their interests and ours. Any such companies, businesses
or investments may present additional conflicts of interest in pursuing an initial Business Combination target. In our post-IPO discussions
with any potential targets, our management team and our Sponsor will ensure that the target has a clear understanding that it will transact
with us and with no other special purpose acquisition company that may be sponsored by our management team.
The personal and financial interests of our directors
and officers may influence their motivation in timely identifying and selecting a target business and completing a Business Combination.
Consequently, our directors and officers discretion in identifying and selecting a suitable target business may result in
a conflict of interest when determining whether the terms, conditions and timing of a particular Business Combination are appropriate
and in our best interest. If this were the case, it may be a breach of their fiduciary duties to us as a matter of Cayman Islands law
and claims against such individuals may arise for a breach of such duties. However, we might not ultimately be successful in any claim
we may make against them for such reason.
**
**
44
**
*Members of our management team and board
of directors have significant experience as founders, board members, officers, executives or employees of other companies. Certain of
those persons have been, are currently, or may become, involved in litigation, investigations or other proceedings, including related
to those companies or otherwise. This may have an adverse effect on us, which may impede our ability to consummate an initial Business
Combination.*
During the course of their careers, members of
our management team and board of directors have had significant experience as founders, board members, officers, executives or employees
of other companies. Certain of those persons have been, are currently or may in the future become, involved in litigation, investigations
or other proceedings, including relating to the business affairs of such companies, transactions entered into by such companies, or otherwise.
Any such litigation, investigations or other proceedings may divert the attention and resources of our management team and board of directors
away from identifying and selecting a target business or businesses for our initial Business Combination and may negatively affect our
reputation, which may impede our ability to complete an initial Business Combination.
**
*Members of our management team and affiliated
companies may have been, and may in the future be, involved in civil disputes or governmental investigations unrelated to our business.*
Members of our management team have been (and
intend to be) involved in a wide variety of businesses. Such involvement may lead to media coverage and public awareness. As a result,
members of our management team and affiliated companies may have been, and may in the future be, involved in civil disputes or governmental
investigations unrelated to our business. While to our knowledge there are no such claims or investigations, any such claims or investigations
may be detrimental to our reputation and could negatively affect our ability to identify and complete an initial Business Combination
and may have an adverse effect on the price of our securities.
*Since our Sponsor, executive officers
and directors will lose their entire investment in us if our initial Business Combination is not completed (other than with respect to
Public Shares they have acquired, or may in the future acquire, if any), a conflict of interest may arise in determining whether a particular
Business Combination target is appropriate for our initial Business Combination.*
On July 23, 2025, our Sponsor
made a capital contribution of $25,000, or approximately $0.003 per share, to cover certain of our expenses, for which we issued 7,666,667
Founders Shares to our Sponsor. On November 6, 2025, our Sponsor surrendered 1,916,667 Founder Shares to us for no consideration. In November
2025, our Sponsor transferred an aggregate of 60,000 Founder Shares to certain of our independent directors, resulting in our Sponsor
holding 5,690,000 Founder Shares. On December 12, 2025, the underwriters exercised their over-allotment option in full and forfeited the
unexercised balance. On January 23, 2026, our Sponsor transferred 35,000 Founder Shares to an independent director, resulting in our Sponsor
holding 5,655,000 Founder Shares and our initial shareholders holding an aggregate of 5,750,000 Founder Shares.
In addition, our Sponsor and
Cantor purchased an aggregate of 4,500,000 Private Placement Warrants for an aggregate purchase price of $4,500,000, or $1.00 per warrant.
Of those 4,500,000 Private Placement Warrants, our Sponsor purchased 3,000,000 Private Placement Warrants and Cantor purchased 1,500,000
Private Placement Warrants. The Private Placement Warrants will be worthless if we do not complete our initial Business Combination.
The personal and financial
interests of our executive officers and directors may influence their motivation in identifying and selecting a target Business Combination,
completing an initial Business Combination and influencing the operation of the business following the initial Business Combination. This
risk may become more acute as the end of the Completion Window nears, which is the deadline for our completion of an initial Business
Combination.
The non-managing Sponsor investors
are not required to (i) hold any Units, Class A Ordinary Shares or Public Warrants they purchased in the IPO or thereafter for any amount
of time, (ii) vote any Class A Ordinary Shares they may own at the applicable time in favor of our initial Business Combination or (iii)
refrain from exercising their right to redeem their Public Shares at the time of our initial Business Combination. The non-managing Sponsor
investors will have the same rights to the funds held in the Trust Account with respect to the Class A Ordinary Shares underlying the
Units they may have purchased in the IPO as the rights afforded to our other Public Shareholders.
45
*Risks Relating to our Securities*
**
*You will not have any rights or interests
in funds from the Trust Account, except under certain limited circumstances. Therefore, to liquidate your investment, you may be forced
to sell your Public Shares or warrants, potentially at a loss.*
Our Public Shareholders will be entitled to receive
funds from the Trust Account only upon the earliest to occur of: (i) our completion of an initial Business Combination, and then only
in connection with those Class A Ordinary Shares that such shareholder properly elected to redeem, subject to the limitations described
herein, (ii) the redemption of any Public Shares properly submitted in connection with a shareholder vote to amend our amended and restated
memorandum and articles of association (A) to modify the substance or timing of our obligation to redeem 100% of our Public Shares if
we do not complete our initial Business Combination within the Completion Window or (B) with respect to any other material provisions
relating to shareholders rights or pre-initial Business Combination activity, and (iii) the redemption of our Public Shares if
we are unable to complete an initial Business Combination within the Completion Window, subject to applicable law and as further described
herein. In addition, if our plan to redeem our Public Shares if we are unable to complete an initial Business Combination within the Completion
Window for any reason, compliance with Cayman Islands law may require that we submit a plan of dissolution to our then-existing shareholders
for approval prior to the distribution of the proceeds held in our Trust Account. In that case, Public Shareholders may be forced to wait
beyond the Completion Window before they receive funds from our Trust Account. In no other circumstances will a Public Shareholder have
any right or interest of any kind in the Trust Account. Holders of warrants will not have any right to the proceeds held in the Trust
Account with respect to the warrants. Accordingly, to liquidate your investment, you may be forced to sell your Public Shares or warrants,
potentially at a loss.
**
*Nasdaq may delist our securities from trading
on its exchange, which could limit investors ability to make transactions in our securities and subject us to additional trading
restrictions.*
Our Units, Class A Ordinary Shares and Public
Warrants are listed on Nasdaq. We cannot assure you that our securities will continue to be listed on Nasdaq in the future or prior to
our initial Business Combination. Additionally, in connection with our initial Business Combination, we will be required to demonstrate
compliance with Nasdaqs initial listing requirements, which are more rigorous than Nasdaqs continued listing requirements,
in order to continue to maintain the listing of our securities on Nasdaq. We cannot assure you that we will be able to meet those initial
listing requirements at that time.
If Nasdaq delists our securities from trading
on its exchange and we are not able to list our securities on another national securities exchange, we expect our securities could be
quoted on an over-the-counter market. If this were to occur, we could face significant material adverse consequences, including:
|
| a limited availability of market quotations for our securities; |
|
|
| reduced liquidity for our securities; |
|
|
| a determination that our Class A Ordinary Shares are a penny
stock which will require brokers trading in our Class A Ordinary Shares to adhere to more stringent rules and possibly result
in a reduced level of trading activity in the secondary trading market for our securities; |
|
|
| a limited amount of news and analyst coverage; and |
|
|
| a decreased ability to issue additional securities or obtain
additional financing in the future. |
|
The National Securities Markets Improvement Act
of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which are referred
to as covered securities. Because our securities are listed on Nasdaq, they qualify as covered securities under the statute.
Although the states are preempted from regulating the sale of our securities, the federal statute does allow the states to investigate
companies if there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the states can regulate or bar the
sale of covered securities in a particular case. While we are not aware of a state having used these powers to prohibit or restrict the
sale of securities issued by blank check companies, other than the State of Idaho, certain state securities regulators view blank check
companies unfavorably and might use these powers, or threaten to use these powers, to hinder the sale of securities of blank check companies
in their states. Further, if we were no longer listed on Nasdaq, our securities would not qualify as covered securities under the statute
and we would be subject to regulation in each state in which we offer our securities.
**
46
*The nominal purchase price paid by our initial
shareholders for the Founder Shares may result in significant dilution to the implied value of your Public Shares upon the consummation
of our initial Business Combination, and our initial shareholders are likely to make a substantial profit on their investment in us in
the event we consummate an initial Business Combination, even if the Business Combination causes the trading price of our ordinary shares
to materially decline.*
Prior to our IPO, our Sponsor paid a nominal aggregate
purchase price of $25,000 for the Founder Shares, or approximately $0.003 per share. As a result, the value of your Public Shares may
be significantly diluted upon the consummation of our initial Business Combination, when the Founder Shares are converted into Public
Shares.
The following table shows the Public Shareholders
and our Sponsors investment per share and how these compare to the implied value of one Class A Ordinary Share upon the completion
of our initial Business Combination. The following table assumes that (i) our valuation is $162,900,000 (which is the amount we would
have in the Trust Account for our initial Business Combination following payment of the maximum deferred underwriting commissions), (ii)
no interest is earned on the funds held in the Trust Account, (iii) no Public Shares are redeemed in connection with our initial Business
Combination and (iv) all Founder Shares are held by our initial shareholders upon completion of our initial Business Combination, and
does not take into account other potential impacts on our valuation at the time of the initial Business Combination, such as (i) the value
of our public and Private Placement Warrants, (ii) the trading price of our Class A Ordinary Shares, (iii) the initial Business Combination
transaction costs (other than the payment of up to $7,350,000 of deferred underwriting commissions), (iv) any equity issued or cash paid
to the targets sellers, (v) any equity issued to other third party investors, or (vi) the targets business itself.
|
Public Shares: | |
| 17,250,000 | | |
|
Founder Shares: | |
| 5,750,000 | | |
|
Total shares: | |
| 23,000,000 | | |
|
Total funds in trust available for initial Business Combination (after payment of deferred underwriting commissions): | |
$ | 162,900,000 | | |
|
Public Shareholders investment per Class A Ordinary Share(1): | |
$ | 10.00 | | |
|
Initial Shareholders investment per Class B Ordinary Share(2): | |
$ | 0.53 | | |
|
Initial implied value per Public Share: | |
$ | 10.00 | | |
|
Implied value per share upon consummation of initial Business Combination(3): | |
$ | 7.08 | | |
|
(1) | While the Public Shareholders investment is in both
the Public Shares and the Public Warrants, for purposes of this table the full investment amount is ascribed to the Public Shares only. |
|
|
(2) | The total investment of the Sponsor in the equity of the
Company, inclusive of the purchase of Founder Shares totaling $25,000 and the Sponsors $3,000,000 investment in the Private Placement
Warrants, is $3,025,000. |
|
|
(3) | All Founder Shares would automatically convert into Class
A Ordinary Shares upon completion 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, as described in Exhibit 4.5 Description of Securities to this Form 10-K. |
|
47
Based on these assumptions, each Class A Ordinary
Share would have an implied value of $7.08 per share upon completion of our initial Business Combination, representing an approximately
29% decrease from the initial implied value of $10.00 per Public Share. While the implied value of $7.08 per Class A Ordinary Share upon
completion of our initial Business Combination would represent a dilution to our Public Shareholders, this would represent a significant
increase in value for our initial shareholders relative to the price it paid for each Founder Share. At $7.08 per Class A Ordinary Share,
the 5,750,000 Class A Ordinary Shares that the Sponsor would own upon completion of our initial Business Combination (after automatic
conversion of the 5,750,000 Founder Shares) would have an aggregate implied value of approximately $40,710,000. As a result, even if the
trading price of our Class A Ordinary Shares significantly declines, the value of the Founder Shares held by our initial shareholders
will be significantly greater than the amount our initial shareholders paid to purchase such shares. In addition, our initial shareholders
could potentially recoup their entire investment in our Company even if the trading price of our Class A Ordinary Shares after the initial
Business Combination is as low as $0.53 per share. As a result, our initial shareholders are likely to earn a substantial profit on their
investment in us upon disposition of their Class A Ordinary Shares even if the trading price of our Class A Ordinary Shares declines after
we complete our initial Business Combination. Our initial shareholders may therefore be economically incentivized to complete an initial
Business Combination with a riskier, weaker-performing or less-established target business than would be the case if our Sponsor had paid
the same per share price for the Founder Shares as our Public Shareholders paid for their Public Shares.
This dilution would increase to the extent that
the anti-dilution provisions of the Founder Shares result in the issuance of Class A Ordinary Shares on a greater than one-to-one basis
upon conversion of the Founder Shares at the time of our initial Business Combination and would become exacerbated to the extent that
Public Shareholders seek redemptions from the trust for their Public Shares. In addition, because of the anti-dilution protection in the
Founder Shares, any equity or equity-linked securities issued in connection with our initial Business Combination would be disproportionately
dilutive to our Class A Ordinary Shares.
**
*The value of the Founder Shares following
completion of our initial Business Combination is likely to be substantially higher than the nominal price paid for them, even if the
trading price of our ordinary shares at such time is substantially less than $10.00 per Public Share.*
As a result of the IPO, our Sponsor has invested
in us an aggregate of $3,025,000, comprised of the $25,000 purchase price for the Founder Shares and the $3,000,000 purchase price for
the Private Placement Warrants. Assuming a trading price of $10.00 per Public Share upon consummation of our initial Business Combination,
the 5,750,000 Founder Shares would have an aggregate implied value of $57,500,000. Even if the trading price of our ordinary shares were
as low as $0.53 per share, and the Private Placement Warrants are worthless, the value of the Founder Shares would be equal to our Sponsors
aggregate initial investment in us. As a result, our Sponsor is likely to be able to make a substantial profit on its investment in us
at a time when our Public Shares have lost significant value. Accordingly, members of our management team, who own interests in our Sponsor,
may be more willing to pursue a Business Combination with a riskier or less-established target business than would be the case if our
Sponsor had paid the same per share price for the Founder Shares as our Public Shareholders paid for their Public Shares.
**
*Because we are incorporated under the laws
of the Cayman Islands, you may face difficulties in protecting your interests, and your ability to protect your rights through the U.S.
federal courts may be limited.*
We are an exempted company incorporated under
the laws of the Cayman Islands. As a result, it may be difficult for investors to effect service of process within the United States upon
our directors or officers, or enforce judgments obtained in the United States courts against our directors or officers.
Our corporate affairs are governed by our amended
and restated memorandum and articles of association, the Companies Act (As Revised) of the Cayman Islands and the common law of the Cayman
Islands. We will also be subject to the federal securities laws of the United States. The rights of shareholders to take action against
the directors, actions by minority shareholders and the fiduciary responsibilities of our directors to us under Cayman Islands law are
to a large extent governed by the common law of the Cayman Islands. The common law of the Cayman Islands is derived in part from comparatively
limited judicial precedent in the Cayman Islands as well as from English common law, the decisions of whose courts are of persuasive authority,
but are not binding on a court in the Cayman Islands.
The rights of our shareholders and the fiduciary
responsibilities of our directors under Cayman Islands law are different from what they would be under statutes or judicial precedent
in some jurisdictions in the United States. In particular, the Cayman Islands has a different body of securities laws as compared to the
United States, and certain states, such as Delaware, may have more fully developed and judicially interpreted bodies of corporate law.
In addition, Cayman Islands companies may not have standing to initiate a shareholders derivative action in a Federal court of the United
States.
48
We have been advised by Conyers Dill & Pearman
LLP, our Cayman Islands legal counsel, that the courts of the Cayman Islands are unlikely (i) to recognize or enforce against us judgments
of courts of the United States predicated upon the civil liability provisions of the federal securities laws of the United States or any
state; and (ii) in original actions brought in the Cayman Islands, to impose liabilities against us predicated upon the civil liability
provisions of the federal securities laws of the United States or any state, so far as the liabilities imposed by those provisions are
penal in nature. In those circumstances, although there is no statutory enforcement in the Cayman Islands of judgments obtained in the
United States, the courts of the Cayman Islands will recognize and enforce a foreign money judgment of a foreign court of competent jurisdiction
without retrial on the merits based on the principle that a judgment of a competent foreign court imposes upon the judgment debtor an
obligation to pay the sum for which judgment has been given provided certain conditions are met. For a foreign judgment to be enforced
in the Cayman Islands, such judgment must be final and conclusive and for a liquidated sum, and must not be in respect of taxes or a fine
or penalty, inconsistent with a Cayman Islands judgment in respect of the same matter, impeachable on the grounds of fraud or obtained
in a manner, or be of a kind the enforcement of which is, contrary to natural justice or the public policy of the Cayman Islands (awards
of punitive or multiple damages may well be held to be contrary to public policy). A Cayman Islands Court may stay enforcement proceedings
if concurrent proceedings are being brought elsewhere.
As a result of all of the above, Public Shareholders
may have more difficulty in protecting their interests in the face of actions taken by management, members of the board of directors or
controlling shareholders than they would as Public Shareholders of a United States company.
**
*After our initial Business Combination,
it is possible that a majority of our directors and officers will live outside the United States and all of our assets will be located
outside the United States; therefore, investors may not be able to enforce federal securities laws or their other legal rights.*
It is possible that after our initial Business
Combination, a majority of our directors and officers will reside outside of the United States and all of our assets will be located outside
of the United States. As a result, it may be difficult, or in some cases not possible, for investors in the United States to enforce their
legal rights, to effect service of process upon all of our directors or officers or to enforce judgments of United States courts predicated
upon civil liabilities and criminal penalties on our directors and officers under United States laws.
**
*Provisions in our amended and restated memorandum
and articles of association may inhibit a takeover of us, which could limit the price investors might be willing to pay in the future
for our Class A Ordinary Shares and could entrench management.*
Our amended and restated memorandum and articles
of association contain provisions that may discourage unsolicited takeover proposals that shareholders may consider to be in their best
interests. These provisions include the ability of the board of directors to designate the terms of and issue new series of preference
shares, which may make the removal of management more difficult and may discourage transactions that otherwise could involve payment of
a premium over prevailing market prices for our securities.
**
*Our amended and restated memorandum and
articles of association provide that the courts of the Cayman Islands are the exclusive forums for certain disputes between us and our
shareholders, which could limit our shareholders ability to obtain a favorable judicial forum for complaints against us or our
directors, officers or employees.*
Our amended and restated memorandum and articles
of association provide that unless we consent in writing to the selection of an alternative forum, the courts of the Cayman Islands shall
have exclusive jurisdiction over any claim or dispute arising out of or in connection with our amended and restated memorandum and articles
of association or otherwise related in any way to each shareholders shareholding in us, including but not limited to (i) any derivative
action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of any fiduciary or other duty owed by any of
our current or former directors, officers or other employees to us or our shareholders, (iii) any action asserting a claim arising pursuant
to any provision of the Companies Act or our amended and restated memorandum and articles of association, or (iv) any action asserting
a claim against us governed by the internal affairs doctrine (as such concept is recognized under the laws of the United States of America)
and that each shareholder irrevocably submits to the exclusive jurisdiction of the courts of the Cayman Islands over all such claims or
disputes. The forum selection provision in our amended and restated memorandum and articles of association does not apply to actions or
suits brought to enforce any liability or duty created by the Securities Act, Exchange Act or any claim for which the federal district
courts of the United States of America are, as a matter of the laws of the United States of America, the sole and exclusive forum for
determination of such a claim.
49
Our amended and restated memorandum and articles
of association also provide that, without prejudice to any other rights or remedies that we may have, each of our shareholders acknowledges
that damages alone would not be an adequate remedy for any breach of the selection of the courts of the Cayman Islands as exclusive forum
and that accordingly we shall be entitled, without proof of special damages, to the remedies of injunction, specific performance or other
equitable relief for any threatened or actual breach of the selection of the courts of the Cayman Islands as exclusive forum.
This choice of forum provision may increase a
shareholders cost and limit the shareholders ability to bring a claim in a judicial forum that it finds favorable for disputes
with us or our directors, officers or other employees, which may discourage lawsuits against us and our directors, officers and other
employees. Any person or entity purchasing or otherwise acquiring any of our shares or other securities, whether by transfer, sale, operation
of law or otherwise, shall be deemed to have notice of and have irrevocably agreed and consented to these provisions. There is uncertainty
as to whether a court would enforce such provisions, and the enforceability of similar choice of forum provisions in other companies
charter documents has been challenged in legal proceedings. It is possible that a court could find this type of provisions to be inapplicable
or unenforceable, and if a court were to find this provision in our amended and restated memorandum and articles of association to be
inapplicable or unenforceable in an action, we may incur additional costs associated with resolving the dispute in other jurisdictions,
which could have an adverse effect on our business and financial performance.
**
*Economic substance legislation of the Cayman
Islands may adversely impact us or our operations.*
The Cayman Islands, together with several other
non-European Union jurisdictions, have introduced legislation aimed at addressing concerns raised by the Organisation for Economic Co-operation
and Developments (OECD) Base Erosion and Profit Shifting (BEPS) initiative as to offshore structures engaged in certain activities
which attract profits without real economic activity. The International Tax Co-operation (Economic Substance) Act, (As Revised) (the Economic
Substance Act) contains economic substance requirements for in-scope Cayman Islands entities which are engaged in certain relevant
activities. As we are a Cayman Islands company, our compliance obligations will include filing an annual notification, which need
to state whether we are carrying out any relevant activities and if so, whether we have satisfied economic substance tests to the extent
required under the Economic Substance Act. If the Cayman Islands Tax Information Authority determines that the Company or any of its Cayman
Islands subsidiaries has failed to meet the requirements imposed by the Economic Substance Act, the Company may face significant financial
penalties, restriction on the regulation of its business activities and/or may be struck off as a registered entity in the Cayman Islands.
As it is still a relatively new regime, it is
anticipated that the Economic Substance Act and associated guidance will evolve and may be subject to further clarification and amendments.
We may need to allocate additional resources to keep updated with these developments, and may have to make changes to our operations in
order to comply with all requirements under the Economic Substance Act. Failure to satisfy these requirements may subject us to penalties
under the Economic Substance Act.
In addition, in order to comply with legislation,
regulations and guidance aimed at the prevention of money laundering, terrorist financing and proliferation financing, and sanctions legislation,
the Company may be required to adopt and maintain anti-money laundering procedures, and may require subscribers and their beneficial owners,
controllers or authorized persons (where applicable) (Related Persons) to provide evidence to verify their identity. Where
permitted, and subject to certain conditions, the Company may also rely on, or delegate to, a suitable person the maintenance of our anti-money
laundering procedures (including the acquisition of due diligence information).
The Company reserves the right to request such
information as is necessary to verify the identity of a subscriber or their Related Persons. In the event of delay or failure on the part
of the subscriber in producing any information required for verification purposes, we may refuse to accept the application, in which case
any funds received will be returned without interest to the account from which they were originally debited.
The Company also reserves the right to refuse
to make any redemption payment to a shareholder if directors or officers suspect or are advised that the payment of redemption proceeds
to such shareholder might result in a breach of applicable anti-money laundering, sanctions or other laws or regulations by any person
in any relevant jurisdiction, or if such refusal is considered necessary or appropriate to ensure compliance with any such laws or regulations
in any applicable jurisdiction.
50
If any person in the Cayman Islands knows or suspects,
or has reasonable grounds for knowing or suspecting that another person is engaged in criminal conduct or money laundering, or is involved
with terrorism or terrorist financing and property, and the information for that knowledge or suspicion came to their attention in the
course of business in the regulated sector, or other trade, profession, business or employment, the person will be required to report
such knowledge or suspicion to (i) the Financial Reporting Authority of the Cayman Islands (FRA), pursuant to the
Proceeds of Crime Act (As Revised) of the Cayman
Islands, if the disclosure relates to criminal conduct or money laundering, or (ii) a police officer of the rank of constable or higher,
or the FRA, pursuant to the Terrorism Act (As Revised) of the Cayman Islands, if the disclosure relates to involvement with terrorism
or terrorist financing and property.
**
*The U.S. federal income tax consequences
to a shareholder of a redemption of Class A Ordinary Shares will depend on such investors particular facts and circumstances.*
The U.S. federal income tax treatment of a redemption
of Class A Ordinary Shares to a shareholder will depend on whether the redemption qualifies as a sale of such Class A Ordinary Shares
under Section 302(a) of the Internal Revenue Code of 1986, as amended (the Code), which will depend largely on the total
number of our shares treated as held by the shareholder electing to redeem Class A Ordinary Shares (including any shares constructively
owned by the holder as a result of owning Private Placement Warrants or Public Warrants or otherwise) relative to all of our shares outstanding
both before and after the redemption. If such redemption is not treated as a sale of Class A Ordinary Shares for U.S. federal income tax
purposes, the redemption will instead be treated as a corporate distribution of cash from us. For more information about the U.S. federal
income tax treatment of the redemption of Class A Ordinary Shares, see the sections entitled *Income Tax Considerations - Material
United States Federal Income Tax Considerations - U.S. Holders - Redemption of Class A Ordinary Shares or Income
Tax Considerations - Material United States Federal Income Tax Considerations - Non-U.S. Holders,* as applicable.
**
*We may amend the terms of the warrants in
a manner that may be adverse to holders of Public Warrants with the approval by the holders of at least 50% of the then outstanding Public
Warrants. As a result, the exercise price of your warrants could be increased, the exercise period could be shortened, the number of Class
A Ordinary Shares purchasable upon exercise of a warrant could be decreased.*
Our warrants were issued in registered form under
a warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and us. The warrant agreement provides that
the terms of the warrants may be amended without the consent of any holder for the purpose of (i) curing any ambiguity or to correct any
defective provision or mistake, including to conform the provisions of the warrant agreement to the description of the terms of the warrants
and the warrant agreement, (ii) adjusting the provisions relating to cash dividends on ordinary shares as contemplated by and in accordance
with the warrant agreement or (iii) adding or changing any provisions with respect to matters or questions arising under the warrant agreement
as the parties to the warrant agreement may deem necessary or desirable, provided that the approval by the holders of at least 50% of
the then outstanding Public Warrants is required to make any such change. Accordingly, we may amend the terms of the Public Warrants in
a manner adverse to a holder of Public Warrants if holders of at least 50% of the then outstanding Public Warrants approve of such amendment.
Although our ability to amend the terms of the
Public Warrants with the consent of at least 50% of the then outstanding Public Warrants is unlimited, examples of such amendments could
be amendments to, among other things, increase the exercise price of the Public Warrants, convert the Public Warrants into cash or shares,
shorten the exercise period, decrease the number of Class A Ordinary Shares purchasable upon exercise of a Public Warrant.
**
*Our warrant agreement designates the courts
of the State of New York or the United States District Court for the Southern District of New York as the sole and exclusive forum for
certain types of actions and proceedings that may be initiated by holders of our warrants, which could limit the ability of warrant holders
to obtain a favorable judicial forum for disputes with our company.*
Our warrant agreement provides that, subject to
applicable law, (i) any action, proceeding or claim against us arising out of or relating in any way to the warrant agreement, including
under the Securities Act, will be brought and enforced in the courts of the State of New York or the United States District Court for
the Southern District of New York, and (ii) that we irrevocably submit to such jurisdiction, which jurisdiction shall be the exclusive
forum for any such action, proceeding or claim. We will waive any objection to such exclusive jurisdiction and that such courts represent
an inconvenient forum. With respect to any complaint asserting a cause of action arising under the Securities Act or the rules and regulations
promulgated thereunder, we note, however, that there is uncertainty as to whether a court would enforce this provision and that investors
cannot waive compliance with the federal securities laws and the rules and regulations thereunder. Section 22 of the Securities Act creates
concurrent jurisdiction for state and federal courts over all suits brought to enforce any duty or liability created by the Securities
Act or the rules and regulations thereunder.
51
Notwithstanding the foregoing, these provisions
of the warrant agreement do not apply to suits brought to enforce any liability or duty created by the Exchange Act or any other claim
for which the federal district courts of the United States of America are the sole and exclusive forum. Any person or entity purchasing
or otherwise acquiring any interest in any of our warrants shall be deemed to have notice of and to have consented to the forum provisions
in our warrant agreement. If any action, the subject matter of which is within the scope the forum provisions of the warrant agreement,
is filed in a court other than a court of the State of New York or the United States District Court for the Southern District of New York
(a foreign action) in the name of any holder of our warrants, such holder shall be deemed to have consented to: (x) the
personal jurisdiction of the state and federal courts located in the State of New York in connection with any action brought in any such
court to enforce the forum provisions (an enforcement action), and (y) having service of process made upon such warrant
holder in any such enforcement action by service upon such warrant holders counsel in the foreign action as agent for such warrant
holder. This choice-of-forum provision may limit a warrant holders ability to bring a claim in a judicial forum that it finds favorable
for disputes with our company, which may discourage such lawsuits. In addition, this choice-of-forum provision may also increase a warrant
holders cost to bring a claim. Alternatively, if a court were to find this provision of our warrant agreement inapplicable or unenforceable
with respect to one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving
such matters in other jurisdictions, which could materially and adversely affect our business, financial condition and results of operations
and result in a diversion of the time and resources of our management and board of directors.
**
*A provision of our warrant agreement may
make it more difficult for us to consummate an initial Business Combination.*
If (i) we issue additional ordinary shares or
equity-linked securities for capital raising purposes in connection with the closing of our initial Business Combination at a Newly Issued
Price of less than $9.20 per Class A Ordinary Share, (ii) the aggregate gross proceeds from such issuances represent more than 60% of
the total equity proceeds, and interest thereon, available for the funding of our initial Business Combination, and (iii) the Market Value
of our Class A Ordinary Shares is below $9.20 per share, then the exercise price of the warrants will be adjusted (to the nearest cent)
to be equal to 115% of the higher of the Market Value and the Newly Issued Price, and the $18.00 per share redemption trigger prices described
in Exhibit 4.5 *Description of Securities* to this Form 10-K will be adjusted (to the nearest cent) to be equal to
180% of the higher of the Market Value and the Newly Issued Price. This may make it more difficult for us to consummate an initial Business
Combination with a target business.
**
*We may redeem your unexpired warrants prior
to their exercise at a time that is disadvantageous to you, thereby making your warrants worthless.*
We have the ability to redeem outstanding warrants
at any time prior to their expiration, at a price of $0.01 per warrant, provided that the closing price of our Class A Ordinary Shares
equals or exceeds $18.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of
a warrant as described elsewhere in this Form 10-K) for any 20 trading days within a 30 trading-day period commencing at least 30 days
after completion of our initial Business Combination and ending on the third trading day prior to the date on which we give proper notice
of such redemption to the warrants holders and provided certain other conditions are met. We will not redeem the warrants as described
above unless a registration statement under the Securities Act covering the issuance of the Class A Ordinary Shares issuable upon exercise
of the warrants is then effective and a current prospectus relating to those Class A Ordinary Shares is available throughout the measurement
period. If and when the warrants become redeemable by us, we may not exercise our redemption right if the issuance of ordinary shares
upon exercise of the warrants is not exempt from registration or qualification under applicable state blue sky laws or we are unable to
effect such registration or qualification. We will use our best efforts to register or qualify such ordinary shares under the blue sky
laws of the state of residence in those states in which the warrants were offered by us in the IPO. Redemption of the outstanding warrants
could force you to (i) exercise your warrants and pay the exercise price therefor at a time when it may be disadvantageous for you to
do so, (ii) sell your warrants at the then-current market price when you might otherwise wish to hold your warrants or (iii) accept the
nominal redemption price which, at the time the outstanding warrants are called for redemption, is likely to be substantially less than
the market value of your warrants.
**
**
52
**
*Our warrants may have an adverse effect
on the market price of our Class A Ordinary Shares and make it more difficult to effectuate our initial Business Combination.*
We issued warrants to purchase 5,750,000 of Class
A Ordinary Shares in connection with the IPO and, simultaneously with the closing of the IPO, we issued in a private placement an aggregate
of 4,500,000 Private Placement Warrants, at $1.00 per warrant. In addition, if our Sponsor or an affiliate of our Sponsor or certain of
our officers or directors makes any working capital loans (as described below in *Item 13. Certain Relationships and Related
Transactions, and Director Independence*), such lender may convert those loans into up to an additional 1,500,000 Private Placement
Warrants, at the price of $1.00 per warrant. To the extent we issue ordinary shares to effectuate a business transaction, the potential
for the issuance of a substantial number of additional Class A Ordinary Shares upon exercise of these warrants could make us a less attractive
acquisition vehicle to a target business. Such warrants, when exercised, will increase the number of issued and outstanding Class A Ordinary
Shares and reduce the value of the Class A Ordinary Shares issued to complete the business transaction. Therefore, our warrants may make
it more difficult to effectuate a business transaction or increase the cost of acquiring the target business.
**
*Holders of Class A Ordinary Shares will
not be entitled to vote on continuing the Company in a jurisdiction outside of the Cayman Islands.*
As holders of our Class A Ordinary Shares, our
Public Shareholders will not have the right to vote on the appointment of directors and continuing our company in a jurisdiction outside
the Cayman Islands (including any special resolution required to amend our constitutional documents or to adopt new constitutional documents,
in each case, as a result of our approving a transfer by way of continuation to a jurisdiction outside the Cayman Islands). In addition,
prior to our initial Business Combination, holders of a majority of our Founder Shares may remove a member of the board of directors for
any reason. Accordingly, you will not have any say in the management of our company prior to the consummation of an initial Business Combination.
**
*You will not be permitted to exercise your
warrants unless we register and qualify the underlying Class A Ordinary Shares or certain exemptions are available.*
If the issuance of the Class A Ordinary Shares
upon exercise of the warrants is not registered, qualified or exempt from registration or qualification under the Securities Act and applicable
state securities laws, holders of warrants will not be entitled to exercise such warrants and such warrants may have no value and expire
worthless. In such event, holders who acquired their warrants as part of a purchase of Units will have paid the full unit purchase price
solely for the Class A Ordinary Shares included in the Units.
We registered the Class A Ordinary Shares issuable
upon exercise of the warrants in the registration statement for our IPO, because the warrants will become exercisable 30 days after the
completion of our initial Business Combination, which may be within one year of the IPO. However, because the warrants will be exercisable
until their expiration date of up to five years after the completion of our initial Business Combination, in order to comply with the
requirements of Section 10(a)(3) of the Securities Act following the consummation of our initial Business Combination, under the terms
of the warrant agreement, we have agreed that, as soon as practicable, but in no event later than 20 business days, after the closing
of our initial Business Combination, we will use our commercially reasonable efforts to file with the SEC a post-effective amendment to
the registration statement of our IPO, or a new registration statement covering the registration under the Securities Act of the Class
A Ordinary Shares issuable upon exercise of the warrants and thereafter will use our commercially reasonable efforts to cause the same
to become effective within 60 business days following our initial Business Combination and to maintain a current prospectus relating to
the Class A Ordinary Shares issuable upon exercise of the warrants until the expiration of the warrants in accordance with the provisions
of the warrant agreement. We cannot assure you that we will be able to do so if, for example, any facts or events arise which represent
a fundamental change in the information set forth in the registration statement or prospectus, the financial statements contained or incorporated
by reference therein are not current or correct or the SEC issues a stop order.
If the Class A Ordinary Shares issuable upon exercise
of the warrants are not registered under the Securities Act, under the terms of the warrant agreement, holders of warrants who seek to
exercise their warrants will not be permitted to do so for cash and, instead, will be required to do so on a cashless basis in accordance
with Section 3(a)(9) of the Securities Act or another exemption.
53
In no event will warrants be exercisable for cash
or on a cashless basis, and we will not be obligated to issue any shares to holders seeking to exercise their warrants, unless the issuance
of the shares upon such exercise is registered or qualified under the securities laws of the state of the exercising holder, or an exemption
from registration or qualification is available.
If our Class A Ordinary Shares are at the time
of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition of covered securities
under Section 18(b)(1) of the Securities Act, we may, at our option, not permit holders of warrants who seek to exercise their warrants
to do so for cash and, instead, require them to do so on a cashless basis in accordance with Section 3(a)(9) of the Securities Act; in
the event we so elect, we will not be required to file or maintain in effect a registration statement or register or qualify the shares
underlying the warrants under applicable state securities laws, and in the event we do not so elect, we will use our commercially reasonable
efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available.
In no event will we be required to net cash settle
any warrant, or issue securities (other than upon a cashless exercise as described above) or other compensation in exchange for the warrants
in the event that we are unable to register or qualify the shares underlying the warrants under the Securities Act or applicable state
securities laws.
**
*You may only be able to exercise your Public
Warrants on a cashless basis under certain circumstances, and if you do so, you will receive fewer Class A Ordinary Shares
from such exercise than if you were to exercise such warrants for cash.*
The warrant agreement provides that in the following
circumstances holders of warrants who seek to exercise their warrants will not be permitted to do for cash and will, instead, be required
to do so on a cashless basis in accordance with Section 3(a)(9) of the Securities Act: (i) if the Class A Ordinary Shares issuable upon
exercise of the warrants are not registered under the Securities Act in accordance with the terms of the warrant agreement; (ii) if we
have so elected and the Class A Ordinary Shares are at the time of any exercise of a warrant not listed on a national securities exchange
such that they satisfy the definition of covered securities under Section 18(b)(1) of the Securities Act; and (iii) if we
have so elected and we call the Public Warrants for redemption.
If you exercise your Public Warrants on a cashless
basis, you would pay the warrant exercise price by surrendering the warrants for that number of Class A Ordinary Shares equal to the quotient
obtained by dividing (x) the product of the number of Class A Ordinary Shares underlying the warrants, multiplied by the excess of the
fair market value of our Class A Ordinary Shares (as defined in the next sentence) over the exercise price of the warrants
by (y) the fair market value. The fair market value is the average reported closing price of the Class A Ordinary Shares
for the 10 trading days ending on the third trading day prior to the date on which the notice of exercise is received by the warrant agent
or on which the notice of redemption is sent to the holders of warrants, as applicable. As a result, you would receive fewer Class A Ordinary
Shares from such exercise than if you were to exercise such warrants for cash.
**
*The grant of registration rights to our
Sponsor, Cantor and other holders of our Private Placement Warrants may make it more difficult to complete our initial Business Combination,
and the future exercise of such rights may adversely affect the market price of our Class A Ordinary Shares**.*
Pursuant to an agreement entered into concurrently
with the issuance and sale of the securities in the IPO, our Sponsor, Cantor and their permitted transferees can demand that we register
the Class A Ordinary Shares into which Founder Shares are convertible, holders of our Private Placement Warrants and their permitted transferees
can demand that we register the Private Placement Warrants and the Class A Ordinary Shares issuable upon exercise of the Private Placement
Warrants or holders of securities that may be issued upon conversion of working capital loans and their permitted transferees may demand
that we register such Units, shares, warrants or the Class A Ordinary Shares issuable upon exercise of such warrants and any other securities
of the Company acquired by them prior to the consummation of our initial Business Combination. We will bear the cost of registering these
securities. The registration and availability of such a significant number of securities for trading in the public market may have an
adverse effect on the market price of our Class A Ordinary Shares. In addition, the existence of the registration rights may make our
initial Business Combination more costly or difficult to conclude. This is because the shareholders of the target business may increase
the equity stake they seek in the combined entity or ask for more cash consideration to offset the negative impact on the market price
of our Class A Ordinary Shares that is expected when the ordinary shares owned by our initial shareholders, holders of our Private Placement
Warrants or holders of our working capital loans or their respective permitted transferees are registered.
54
General Risk Factors
**
*We are a blank check company with no operating
history and no revenues, and you have no basis on which to evaluate our ability to achieve our business objective**.*
We are a blank check company incorporated under
the laws of the Cayman Islands with no operating results, and we did not commence operations until obtaining funding through the IPO.
Because we lack an operating history, you have no basis upon which to evaluate our ability to achieve our business objective of completing
our initial Business Combination. We have no plans, arrangements or understandings with any prospective target business concerning a Business
Combination and may be unable to complete our initial Business Combination. If we fail to complete our initial Business Combination, we
will never generate any operating revenues.
**
*Past performance by our management team
and their respective affiliates, including investments and transactions in which they have participated and businesses with which they
have been associated, may not be indicative of future performance of an investment in the Company.*
Information regarding our management team and
their respective affiliates, including investments and transactions in which they have participated and businesses with which they have
been associated, is presented for informational purposes only. Any past experience and performance by our management team, our advisors
and their respective affiliates and the businesses with which they have been associated, is not a guarantee that we will be able to successfully
identify a suitable candidate for our initial Business Combination, that we will be able to provide positive returns to our shareholders,
or of any results with respect to any initial Business Combination we may consummate. You should not rely on the historical experiences
of our management team, our advisors and their respective affiliates, including investments and transactions in which they have participated
and businesses with which they have been associated, as indicative of the future performance of an investment in us or as indicative of
every prior investment by each of the members of our management team, our advisors or their respective affiliates. The market price of
our securities may be influenced by numerous factors, many of which are beyond our control, and our shareholders may experience losses
on their investment in our securities.
**
*Cyber incidents or attacks directed at us
could result in information theft, data corruption, operational disruption and/or financial loss.*
We depend on digital technologies, including information
systems, infrastructure and cloud applications and services, including those of third parties with which we may deal. Sophisticated and
deliberate attacks on, or security breaches in, our systems or infrastructure, or the systems or infrastructure of third parties or the
cloud, could lead to corruption or misappropriation of our assets, proprietary information and sensitive or confidential data. As an early
stage company without significant investments in data security protection, we may not be sufficiently protected against such occurrences.
We may not have sufficient resources to adequately protect against, or to investigate and remediate any vulnerability to, cyber incidents.
It is possible that any of these occurrences, or a combination of them, could have adverse consequences on our business and lead to financial
loss.
**
*We may be a passive foreign investment company,
or PFIC, which could result in adverse United States federal income tax consequences to U.S. investors.*
If we are a PFIC for any taxable year (or portion
thereof) that is included in the holding period of a U.S. Holder (as defined in the section of the IPO registration statement captioned
*Income Tax Considerations - Material United States Federal Income Tax Considerations - U.S Holders*) of our Class
A Ordinary Shares or warrants, the U.S. Holder may be subject to adverse U.S. federal income tax consequences and may be subject to additional
reporting requirements. Our PFIC status for our current and subsequent taxable years may depend on whether we qualify for the PFIC start-up
exception (see the section of the IPO registration statement captioned *Income Tax Considerations - Material United States Federal
Income Tax Considerations - U.S. Holders - Passive Foreign Investment Company Rules*). Depending on the particular circumstances
the application of the start-up exception may be subject to uncertainty, and there cannot be any assurance that we will qualify for the
start-up exception. Our actual PFIC status for any taxable year, however, will not be determinable until after the end of such taxable
year (and, in the case of the start-up exception, potentially not until after the two taxable years following our current taxable year).
Accordingly, there can be no assurances with respect to our status as a PFIC for our current taxable year or any subsequent taxable year.
Moreover, if we determine that we are a PFIC for any taxable year, upon written request, we will endeavor to provide to a U.S. Holder
such information as the Internal Revenue Service (the IRS) may require, including a PFIC annual information statement, in
order to enable the U.S. Holder to make and maintain a qualified electing fund election, but there can be no assurance that
we will timely provide such required information, and such election may be unavailable with respect to our warrants. We urge U.S. investors
to consult their own tax advisors regarding the possible application of the PFIC rules in general, and in particular to our warrants.
For a more detailed explanation of the tax consequences of PFIC classification to U.S. Holders, see the section of the IPO registration
statement captioned *Income Tax Considerations - Material United States Federal Income Tax Considerations - U.S. Holders - Passive
Foreign Investment Company Rules.*
**
**
55
**
*The Excise Tax could be imposed on redemptions
of our stock if we were to become a covered corporation in the future.*
The Inflation Reduction Act of 2022, among other
things, generally imposes a 1% U.S. federal excise tax (the Excise Tax) on certain repurchases of stock by covered
corporations (which include publicly traded domestic (i.e., U.S.) corporations and certain domestic subsidiaries of publicly traded
foreign (i.e., non-U.S.) corporations). The Excise Tax is imposed on the repurchasing corporation itself, not its stockholders from which
the stock is repurchased. The amount of the Excise Tax is generally 1% of the fair market value of the shares repurchased at the time
of the repurchase. However, for purposes of calculating the Excise Tax, repurchasing corporations are permitted to net the fair market
value of certain new stock issuances against the fair market value of stock repurchases during the same taxable year (the netting
rule). In addition, certain exceptions apply to the Excise Tax. The U.S. Department of the Treasury (the Treasury)
has authority to provide regulations and other guidance to carry out, and prevent the abuse or avoidance of, the Excise Tax. In June of
2024, the Treasury and IRS issued final Treasury regulations on the reporting and payment of the Excise Tax. In November of 2025, the
Treasury and IRS issued final Treasury regulations on the computation of the Excise Tax.
We are currently not a covered corporation
for purposes of the Excise Tax. Accordingly, we generally would not be subject to the Excise Tax on a redemption of our stock in connection
with the consummation of our initial Business Combination. If we were to become a covered corporation in the future, whether
in connection with the consummation of our initial Business Combination with a U.S. company (including if we were to redomicile as a U.S.
corporation in connection therewith) or otherwise, whether and to what extent we would be subject to the Excise Tax on a redemption of
our stock would depend on a number of factors, including (i) whether the redemption is treated as a repurchase of stock for purposes of
the Excise Tax, (ii) the fair market value of the redemption treated as a repurchase of stock, (iii) the structure of our initial Business
Combination, (iv) the nature and amount of any PIPE or other equity issuances (whether in connection with our initial Business
Combination or otherwise) issued within the same taxable year of a redemption treated as a repurchase of stock and (v) other guidance
from the Treasury. As noted above, the Excise Tax would be payable by the repurchasing corporation, and not by the redeeming holder, and
only limited guidance on the mechanics of any required reporting and payment of the Excise Tax on which taxpayers may rely have been issued
to date. The imposition of the Excise Tax on us as a result of redemptions by us could, however, reduce the amount of cash available to
the target business in connection with our initial Business Combination, which could cause investors in our securities who do not redeem
or the other shareholders of the combined company to economically bear the impact of such Excise Tax. However, we will not use the proceeds
placed in the Trust Account, or the interest earned on the proceeds placed in the Trust Account, to pay for possible Excise Tax or any
other fees or taxes that may be levied on us on any redemptions or stock buybacks by us pursuant to any current, pending or further rules
or laws, including without limitation any Excise Tax, prior to release of such funds from the Trust Account following our initial Business
Combination.
**
*We are an emerging growth company and a
smaller reporting company within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure requirements
available to emerging growth companies or smaller reporting companies, this could make our securities less attractive to investors and
may make it more difficult to compare our performance with other public companies.*
We are an emerging growth company
within the meaning of the Securities Act, as modified by the JOBS Act, and we may take advantage of certain exemptions from various reporting
requirements that are applicable to other public companies that are not emerging growth companies, including, but not limited to, not
being required to comply with the auditor internal controls attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced
disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements
of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously
approved. As a result, our shareholders may not have access to certain information they may deem important. We could be an emerging growth
company for up to five years, although circumstances could cause us to lose that status earlier, including if the market value of our
Class A Ordinary Shares held by non-affiliates exceeds $700 million as of the prior June 30, in which case we would no longer be an emerging
growth company as of December 31 in the same year. We cannot predict whether investors will find our securities less attractive because
we will rely on these exemptions. If some investors find our securities less attractive as a result of our reliance on these exemptions,
the trading prices of our securities may be lower than they otherwise would be, there may be a less active trading market for our securities
and the trading prices of our securities may be more volatile.
56
Further, Section 102(b)(1) of the JOBS Act exempts
emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that
is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered
under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company
can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but
any such an election to opt out is irrevocable. We have elected not to opt out of such extended transition period which means that when
a standard is issued or revised and it has different application dates for public or private companies, we, as an emerging growth company,
can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of our
financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has
opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards
used.
Additionally, we are a smaller reporting
company as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure
obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting
company until the last day of the fiscal year in which (1) the market value of our ordinary shares held by non-affiliates is equal to
or exceeds $250 million as of the prior June 30, or (2) our annual revenues equaled or exceeded $100 million during such completed fiscal
year and the market value of our ordinary shares held by non-affiliates is equal to or exceeds $700 million as of the prior June 30. To
the extent we take advantage of such reduced disclosure obligations, it may also make comparison of our financial statements with other
public companies difficult or impossible.
If we no longer qualify as an emerging growth
company, we may still be subject to reduced reporting requirements so long as we qualify as a smaller reporting company.
**
*Changes in the market for directors and
officers liability insurance could make it more difficult and more expensive for us to negotiate and complete an initial Business Combination.*
The market for directors and officers liability
insurance for special purpose acquisition companies has changed in ways adverse to us and our management team. Fewer insurance companies
are offering quotes for directors and officers liability coverage, the premiums charged for such policies have generally increased and
the terms of such policies have generally become less favorable. These trends may continue into the future.
The increased cost and decreased availability
of directors and officers liability insurance could make it more difficult and more expensive for us to negotiate an initial Business
Combination. In order to obtain directors and officers liability insurance or modify its coverage as a result of becoming a public company,
the post-Business Combination entity might need to incur greater expense, accept less favorable terms or both. However, any failure to
obtain adequate directors and officers liability insurance could have an adverse impact on the post-Business Combination entitys
ability to attract and retain qualified officers and directors.
In addition, even after we were to complete an
initial Business Combination, our directors and officers could still be subject to potential liability from claims arising from conduct
alleged to have occurred prior to the initial Business Combination. As a result, in order to protect our directors and officers, the post-Business
Combination entity may need to purchase additional insurance with respect to any such claims (run-off insurance). The need
for run-off insurance would be an added expense for the post-Business Combination entity, and could interfere with or frustrate our ability
to consummate an initial Business Combination on terms favorable to our investors.
**
*Recent increases in inflation in the United
States and elsewhere could make it more difficult for us to complete our initial Business Combination.*
Recent increases in inflation in the United States
and elsewhere may lead to increased price volatility for publicly traded securities, including ours, or other national, regional or international
economic disruptions, any of which could make it more difficult for us to complete our initial Business Combination.
**
**
57
**
Item 1B. Unresolved Staff Comments
None.
Item 1C. Cybersecurity
As a blank check company, we have no operations and therefore do not have any operations of our own that face cybersecurity threats. However, we do depend on the digital technologies of third parties, and as noted in *Item 1A. Risk Factors* of this Form 10-K, any sophisticated and deliberate attacks on, or security breaches in, systems or infrastructure or the cloud that we utilize, including those of third parties, could lead to corruption or misappropriation of our assets, proprietary information and sensitive or confidential data. Because of our reliance on the technologies of third parties, we also depend upon the personnel and the processes of third parties to protect against cybersecurity threats, and we have no personnel or processes of our own for this purpose. Our board of directors oversees risk for our Company, and prior to filings with the SEC, our board of directors reviews our risk factors, including the descriptions of the risks we face from cybersecurity threats, as described in *Item 1A. Risk Factors* of this Form 10-K.
Item 2. Properties
Our executive offices
are located at 919 Third Avenue, New York, New York 10022. Our executive offices are provided to us by our Sponsor, and we have
agreed to pay our Sponsor up to $20,000 per month for a maximum of twelve months during the Completion Window for office space, secretarial and administrative services. We consider our current office space adequate for our current operations.
Item 3. Legal Proceedings
There is no material litigation,
arbitration or governmental proceeding currently pending against us or any members of our management team in their capacity as such.
Item 4. Mine Safety Disclosures
Not applicable.
58
Part
II
Item 5. Market for Registrants Common
Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities
Market Information
Our Units, Class A Ordinary
Shares, and Public Warrants are listed on Nasdaq under the symbols BLRKU, BLRK and BLRKW, respectively.
Holders
As of March 20, 2026, there
was 1 holder of record of our Units, 1 holder of record of our Class A Ordinary Shares, 4 holders of record of our Class B Ordinary Shares,
and 3 holders of record of our warrants.
Dividends
We have not paid any cash
dividends on our ordinary shares to date and do not intend to pay cash dividends prior to the completion of an initial Business Combination.
The payment of cash dividends in the future will be dependent upon our revenues and earnings, if any, capital requirements and general
financial conditions subsequent to completion of an initial Business Combination. The payment of any cash dividends subsequent to an initial
Business Combination will be within the discretion of our board of directors at such time. Further, if we incur any indebtedness, our
ability to declare dividends may be limited by restrictive covenants we may agree to in connection therewith.
Securities Authorized for Issuance under
Equity Compensation Plans
None.
Recent Sales of Unregistered Securities and
Use of Proceeds from Registered Offerings
None.
Item 6. [Reserved]
Item 7. Managements Discussion and Analysis
of Financial Condition and Results of Operations
**
*The following discussion
and analysis of the Companys financial condition and results of operations should be read in conjunction with our audited financial
statements and the notes related thereto which are included in Item 8. Financial Statements and Supplementary Data of this
Form 10-K. Certain information contained in the discussion and analysis set forth below includes forward-looking statements. Our actual
results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those
set forth under Special Note Regarding Forward-Looking Statements, Item 1A. Risk Factors and elsewhere in
this Form 10-K.*
Overview
We are a blank check
company incorporated in the Cayman Islands on July 11, 2025. We are formed for the purpose of effecting a merger, amalgamation, share
exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses. We may pursue
an initial Business Combination in any business or industry.
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.
Results of Operations
We have neither engaged in any operations nor
generated any revenues to date. Our only activities from July 11, 2025 (inception) through December 31, 2025 were organizational activities,
and 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.
59
For the period from July 11, 2025 (inception)
through December 31, 2025, we had a net income of $89,649, which consisted of interest earned on cash and marketable securities held in
Trust Account of $238,674, partially offset by operating costs of $149,025.
Liquidity and Capital Resources
On December 12, 2025, we consummated the Initial
Public Offering of 17,250,000 Units, which includes the exercise by the underwriters of their over-allotment option in full of 2,250,000
Units, at $10.00 per Unit, generating gross proceeds of $172,500,000. Simultaneously with the closing of the Initial Public Offering,
we consummated the sale of an aggregate of 4,500,000 Private Placement Warrants at a price of $1.00 per Private Placement Warrant, in
a private placement to the Sponsor and Cantor, as representative of the underwriters, generating gross proceeds of $4,500,000.
Following the Initial Public Offering, the exercise
of the over-allotment option in full, and the sale of the Private Placement Warrants, a total of $172,500,000 was placed in the Trust
Account. We incurred $10,960,469 in IPO related costs, consisting of $3,000,000 of cash underwriting fees, $7,350,000 of deferred underwriting
fees, and $610,469 of other costs.
For the period from July 11, 2025 (inception)
through December 31, 2025, cash used in operating activities was $253,070. Net income of $89,649 was offset by payment of general and
administrative costs through promissory note of $42,900 and interest earned on cash and marketable securities held in the Trust Account
of $238,674, and changes in operating assets and liabilities, which used $146,945 of cash for operating activities.
As of December 31, 2025, we had cash held in the
Trust Account of $172,738,674, consisting of U.S. Treasury Bills with a maturity of 185 days or less. We may withdraw interest from the
Trust Account as described above. We intend to use substantially all of the funds held in the Trust Account, including any amounts representing
earnings on the Trust Account (less taxes payable, if any), 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 $693,561 cash
and a working capital surplus of $701,777. We intend to use the funds held outside the Trust Account primarily to identify and evaluate
target businesses, perform business due diligence on prospective target businesses, travel to and from the offices, plants or similar
locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective
target businesses, and structure, negotiate and complete a Business Combination.
In order to fund working capital deficiencies
or finance transaction costs in connection with a Business Combination, the Sponsor, or certain of our officers and directors or their
affiliates may, but are not obligated to, loan us funds as may be required. If we complete a Business Combination, we would repay such
loaned amounts. In the event that a Business Combination does not close, we may use a portion of the working capital held outside the
Trust Account to repay such loaned amounts but no proceeds from our Trust Account would be used for such repayment. Up to $1,500,000 of
such working capital loans may be convertible into private placement warrants of the post-Business Combination entity, at a price of $1.00
per warrant at the option of the lender, upon consummation of the initial Business Combination. The warrants would be identical to the
Private Placement Warrants.
We do not believe we will need to raise additional
funds in order to meet the expenditures required for operating our business. However, if our estimate of the costs of identifying a target
business, undertaking in-depth due diligence and negotiating a Business Combination are less than the actual amount necessary to do so,
we may have insufficient funds available to operate our business prior to our Business Combination. Moreover, we may need to obtain additional
financing either to complete our Business Combination or because we become obligated to redeem a significant number of our public shares
upon consummation of our Business Combination, in which case we may issue additional securities or incur debt in connection with such
Business Combination.
60
Off-Balance Sheet Financing Arrangements
We have no obligations, assets or liabilities,
which would be considered off-balance sheet arrangements as of December 31, 2025. We do not participate in transactions that create relationships
with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established
for the purpose of facilitating off-balance sheet arrangements. We have not entered into any off-balance sheet financing arrangements,
established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any non-financial assets.
Contractual Obligations
Administrative Services and Indemnification
Agreement
We do not have any long-term debt, capital lease
obligations, operating lease obligations or long-term liabilities, other than an agreement to pay the Sponsor up to $20,000 per month
for a maximum of twelve months during the Completion Window for office space, secretarial and administrative services.
The Company agreed to indemnify and hold harmless
the Sponsor and its directors, officers, employees, principals, managers, partners, members, shareholders, equity holders, control persons,
affiliates, agents, advisors, consultants and representatives (the Indemnitees) from any claims, losses, liabilities, obligations,
causes of action, proceedings (whether pending or threatened), investigations, damages, awards, settlements, judgments, decrees, fees,
costs, penalties, amounts paid in settlement or expenses (including interest, assessments and other charges in connection therewith and
reasonable fees and disbursements of attorneys and other professional advisors and costs of suit) arising out of or relating to any pending
or threatened claim, action, suit, proceeding or investigation against any of them or in which any of them may be a participant or may
otherwise be involved (including as a witness) that arises out of or relates to (i) the IPO of the Companys securities or the Companys
operations or conduct of its business (including, for the avoidance of doubt, a Business Combination), or (ii) any claim against the Sponsor
alleging any expressed or implied management or endorsement by the Sponsor of any activities of the Company or any express or implied
association between the Sponsor, on the one hand, and the Company or any of its affiliates, on the other hand.
Underwriting Agreement
The underwriters received a cash underwriting
discount of $0.20 per Unit sold in the IPO, or $3,000,000 in the aggregate. In addition, the underwriters are entitled to a deferred fee
of $0.40 per Unit, or $7,350,000 in the aggregate. The deferred fee will become payable to the underwriters from the amounts held in the
Trust Account solely in the event that the Company completes a Business Combination, but such $0.40 per Unit shall be due to the underwriters
solely on amounts remaining in the Trust Account following all properly submitted shareholder redemptions, including in connection with
the consummation of the Companys initial Business Combination, subject to the terms of the underwriting agreement.
Critical Accounting Estimates
The preparation of financial statements and
related disclosures in conformity with accounting principles generally accepted in the United States of America requires management
to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and
liabilities at the date of the financial statements, and income and expenses during the periods reported. Making estimates requires
management to exercise significant judgement. It is at least reasonably possible that the estimate of the effect of a condition,
situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating
its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could
materially differ from those estimates.
Ordinary Shares Subject to Possible Redemption
We account for our ordinary shares subject to
possible redemption in accordance with the guidance in ASC Topic 480 Distinguishing Liabilities from Equity. Ordinary shares
subject to mandatory redemption is classified as a liability instrument and is measured at fair value. Conditionally redeemable ordinary
shares (including common stock that features redemption rights that are either within the control of the holder or subject to redemption
upon the occurrence of uncertain events not solely within the Companys control) is classified in temporary equity. At all other
times, ordinary shares are classified as stockholders equity. Our Public Shares feature certain redemption rights that are considered
to be outside of our control and subject to occurrence of uncertain future events. Accordingly, as of December 31, 2025, the Public Shares
are presented at redemption value as temporary equity, outside of the shareholders equity (deficit) section of our balance sheet.
We recognize changes in redemption value immediately as they occur and adjusts the carrying value of the ordinary shares subject to possible
redemption to equal the redemption value at the end of each reporting period. This method would view the end of the reporting period as
if it were also the redemption date for the security.
61
Recent Accounting Standards
**
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.
Item 7A. Quantitative and Qualitative Disclosures
about Market Risk
We are a smaller reporting
company as defined by Rule 12b-2 of the Securities Exchange Act of 1934, as amended, and are not required to provide the information otherwise
required under this item.
Item 8. Financial Statements and Supplementary
Data
This information appears following
Item 15 of this Report and is included herein by reference.
Item 9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure
None.
Item 9A. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures are designed
to ensure that information required to be disclosed by us in our Exchange Act reports is recorded, processed, summarized, and reported
within the time periods specified in the SECs rules and forms, and that such information is accumulated and communicated to our
management, including our principal executive officer and principal financial officer or persons performing similar functions, as appropriate
to allow timely decisions regarding required disclosure.
As required by Rules 13a-15 and 15d-15 under the
Exchange Act, our Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of the design and
operation of our disclosure controls and procedures as of December 31, 2025. Based upon their evaluation, our Chief Executive Officer
and Chief Financial Officer concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the
Exchange Act) were effective, Accordingly, management believes that the financial statements includedin this Annual Report present
fairly in all material respects our financial position, results of operations and cash flows for the period presented.
Managements Report on Internal Controls
Over Financial Reporting
This Annual Report on Form 10-K does not include
a report of managements assessment regarding internal control over financial reporting or an attestation report of our independent
registered public accounting firm due to a transition period established by rules of the SEC for newly public companies.
Changes in Internal Control over Financial
Reporting
There were no changes in our
internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the most
recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial
reporting.
Item 9B. Other Information
None.
Item 9C. Disclosure Regarding Foreign Jurisdictions
that Prevent Inspections
Not applicable.
62
Part
III
Item 10. Directors, Executive Officers and Corporate
Governance
Our executive officers and
directors are as follows:
|
NAME |
|
AGE |
|
POSITION | |
|
R. Ramin Kamfar |
|
61 |
|
Chief Executive Officer and Chairman | |
|
Jordan B. Ruddy |
|
62 |
|
President | |
|
Simon Adamiyatt |
|
63 |
|
Executive Vice President | |
|
Ryan S. MacDonald |
|
42 |
|
Executive Vice President | |
|
Christopher Vohs |
|
49 |
|
Chief Financial Officer | |
|
Jason Emala |
|
47 |
|
General Counsel | |
|
Harrison Seideman |
|
29 |
|
Senior Vice President | |
|
Julia Phillips |
|
42 |
|
Chief Strategy Officer | |
|
Peter Cotton |
|
51 |
|
Director | |
|
Andrew Weksler |
|
37 |
|
Director | |
|
Ziv Conen |
|
41 |
|
Director | |
*R. Ramin Kamfar*,61,
has served as our Chief Executive Officer and Chairman since July 2025. Mr. Kamfar started his career as an investment banker at Lehman
Brothers Inc. in 1988, and has over 35 years of experience in various aspects of mergers and acquisitions, private equity investing, investment
banking, asset management, private wealth, retail, and public and private financings. From 1993 to 2002, Mr.Kamfar executed a growth/consolidation
strategy to build a startup into a leading public company in the fast casual restaurant market that became known as Einstein
Noah Restaurant Group, Inc. (formerly Nasdaq: BAGL), which had approximately 800 locations and $400million in revenue by the time
of Mr.Kamfars departure. From 1999 to 2002, Mr.Kamfar also served as an investor, advisor and member of the Board of
Directors of Vsource, Inc., a technology company subsequently sold to Symphony House (KL: SYMPHNY), a leading business process outsourcing
company focused on the Fortune 500 and Global 500. In 2002 Mr. Kamfar left Einstein to found Bluerock, where he has served as Chairman
and Chief Executive Officer, and which he has built into a leading alternative asset management firm focused on the private wealth channel.
During this time Mr. Kamfar served as founder, Chairman and CEO of Bluerock Residential Growth REIT, a publicly traded REIT listed on
the NYSE American (BRG) until its sale in 2022 which delivered the highest ever premium in a REIT sale transaction, and
the highest Total Shareholder Return across the REIT industry across 1-, 2-, 3-, and 4-year periods. Mr. Kamfar currently serves as Chairman
and CEO of Bluerock Homes Trust, a publicly traded REIT listed on the NYSE American (BHM) since its spin-off from BRG in
2022, as well as Chairman of Bluerock Total Income+ Real Estate Fund and Bluerock High Income Institutional Credit Fund. Mr. Kamfar received
an M.B.A. degree with distinction in Finance in 1988 from The Wharton School of the University of Pennsylvania and a B.S. degree with
distinction in Finance in 1985 from the University of Maryland, College Park. We believe Mr. Kamfars experience in the finance
industry makes him well qualified to serve on our board of directors.
**
**
63
**
*Jordan B. Ruddy*,62,
has served as our President since July 2025. Mr. Ruddy began his almost 40-year career in 1986. With a background in investment banking
and construction lending, Mr. Ruddy has worked at several market leading firms, including Chase Manhattan Bank, Smith Barney and Banc
of America Securities. In 2002 Mr. Ruddy joined Mr. Kamfar to help found Bluerock, where he has served as Chief Operating Officer and
President, and which he has helped build into a leading alternative asset management firm focused on the private wealth channel. During
his tenure at Bluerock, Mr. Ruddy has continuously served in various senior management capacities for it and its affiliates. Mr. Ruddy
served as Chief Operating Officer and President of BRG until its sale in 2022. Mr. Ruddy currently serves as President of BHM and President
and Portfolio Manager of Bluerock Total Income+ Real Estate Fund. Mr. Ruddy received an M.B.A. degree in Finance and Real Estate from
The Wharton School of the University of Pennsylvania, and a B.S. degree with high honors in Economics from the London School of Economics.
**
*Simon Adamiyatt*,63,
has served as an Executive Vice President since October 2025. Mr.Adamiyatt is a seasoned financial services executive, with a career
spanning over 35 years of experience as both a senior investment banker and as a Chief Financial Officer of a publicly traded company.
During his investment banking career, Mr.Adamiyatt held senior leadership and management positions at several global investment
banks, including Co-Head of Financial Institutions M&A at Lehman Brothers, Head of Financial Institutions Group at UBS Americas as
well as Head of Financial Institutions Group at Bear Sterns. In addition, he was a member of the investment banking operating, business
review and fairness opinion committees of the aforementioned institutions. During his tenure as an investment banker, Mr.Adamiyatt
advised leading institutions on mergers & acquisitions, complex public and private company financings, and significant private equity
investments across sectors such as banks & thrifts, commercial finance, consumer finance, mono-line credit cards, brokerage, asset
management, and financial technology.
Prior to joining Bluerock,
Mr.Adamiyatt was an Executive Director and Chief Financial Officer of Earthport Plc, a financial technology company listed on the
London Stock Exchange, which was acquired by Visa in 2018. Mr.Adamiyatt joined Bluerock in 2018, and serves as Chief Financial Officer
and Executive Director, overseeing Bluerocks finance and control functions. In addition, Mr.Adamiyatt also serves as Treasurer
and Chief Financial Officer for Bluerock Total Income+ Real Estate Fund and Bluerock High Income Institutional Credit Fund. Mr.Adamiyatt
was educated at the Wharton School of the University of Pennsylvania, Columbia University, and Oxford University.
**
*Ryan S. MacDonald*,42,
has served as an Executive Vice President since October 2025. Mr.MacDonald started his career in corporate development at Mercantile
Bancshares in 2005 and worked on the formation and spinout of real estate investment manager PNC Realty Investors (PRI)
in 2006. Subsequent to the spinout, Mr.MacDonald joined the Investment Team at PRI to invest capital on behalf of a large pension
fund client. Mr.MacDonald joined Bluerock in 2008 and has continuously served in various senior level investment positions, most
recently as firmwide Chief Investment Officer, during which tenure he has led or helped lead over $8billion in transactions, including
Bluerock Residential Growth REITs market beating Total Shareholder Return (TSR) across all public REITs for the years prior to
its sale. Mr.MacDonald currently serves as Chief Investment Officer of BHM and Portfolio Manager of Bluerock Total Income+ Real
Estate Fund. Mr.MacDonald also has served on the Board of Trustees of Bluerock Total Income+ Real Estate Fund since September 2025.
Mr.MacDonald also has significant exposure to the biotechnology sector, and currently serves as Co-Chairman of IQHQ, Inc., a premier
life science real estate development company focused on creating urban districts in key innovation hubs, and also serves on the board
of directors for the Townsend Group, the leading provider of institutional global investment management and advisory services focused
exclusively on real assets. Mr.MacDonald received a B.A. in Economics from the University of Maryland, College Park.
**
**
64
**
*Christopher Vohs*,49,
has served as our Chief Financial Officer since July 2025. Mr. Vohs has over 25 years of public accounting experience, including extensive
experience in senior roles at public companies. Mr. Vohs has over 25 years of public accounting experience, including extensive experience
in senior roles at public companies. Mr. Vohs began his career at Deloitte & Touche in 1999, an international professional services
firm, where he earned his CPA certification and worked as an Audit Manager. Following his departure from Deloitte in 2004 and prior to
joining Bluerock in 2010, Mr. Vohs has held various senior accounting roles, including serving as Corporate Controller for Roberts Realty
Investors, Inc. (formerly NYSE: RPI), a then-public multifamily REIT, from March 2009 to July 2010. At Bluerock, Mr. Vohs has continuously
served in various senior accounting and financial capacities for it and its affiliates, including as Chief Financial Officer of BRG from
October 2017 until its sale in October 2022, at BHM and its external manager since BHMs spin-off from BRG in October 2022, and
at Bluerock Acquisition Corp. since July 2025. Mr. Vohs received his B.A. degree in Accounting from Michigan State University.
**
*Jason Emala*,47,
has served as our General Counsel since July 2025. Mr. Emala has over 20 years of experience advising on all aspects of operating as a
public company, including with respect to IPOs, public reporting obligations and M&A activity. Mr. Emala began his career at international
law firms White & Case LLP and Fried, Frank, Harris, Shriver & Jacobson LLP before transitioning in-house, holding senior legal
positions at a number of sponsors in the alternative investment space. Mr. Emala joined Bluerock in 2018 where he has served as General
Counsel/Chief Legal Officer of a number of companies sponsored by Bluerock. Mr. Emala has served as General Counsel of Bluerock since
October 2022. Mr. Emala has served as Chief Legal Officer and Secretary of BHM and its external manager since BHMs spin-off from
BRG in October 2022. Mr. Emala has served as Secretary of Bluerock Total Income+ Real Estate Fund, as well as General Counsel of both
Bluerock Capital Markets and Bluerock Asset Management since May 2018. In addition, Mr. Emala has served as Secretary of Bluerock High
Income Institutional Credit Fund since 2022. Mr. Emala earned a B.S. in Finance from the University of Maryland, College Park, a J.D.,
with honors, from the George Washington University Law School and an L.L.M. in Securities and Financial Regulation from the Georgetown
University Law Center.
**
*Harrison Seideman*,29,
has served as our Senior Vice President since October 2025. He has over 8 years of experience as a SPAC sponsor and an investment banking
professional, including public and private financings, mergers & acquisitions, and other capital markets transactions. He has served
as a Senior Vice President at Bluerock Capital Markets since January 2026. He has been Senior Vice President and Head of Special Situations
at Bluerock since September 2025, where he is responsible for leading the firms SPAC business. He has served as a Senior Vice President
of Bluerock Acquisition Corp. since September 2025. Mr. Seideman has worked on more than 200 SPAC transactions, including IPOs, De-SPACs,
PIPEs, warrant exchanges, and other related financings. Prior to joining Bluerock, Harrison held roles in the investment banking divisions
of RBC Capital Markets (from July 2018 to September 2020), Citigroup Global Markets (from September 2020 to March 2021), and Cantor Fitzgerald
(from March 2021 to February 2025), where he executed a broad range of capital markets transactions across various sectors. Harrison received
a B.S. in Business with a concentration in Finance from New York Universitys Stern School of Business.
**
*Julia Phillips*,42,
has served as our Chief Strategy Officer since October 2025. She has over 20 years of marketing and strategy experience focused on the
distribution of real estate and alternative credit products to retail and institutional investors. Prior to joining Bluerock in May 2024,
Ms. Phillips served as a Principal in Blackstones Private Wealth Solutions group. Previously, she was Head of Marketing and Product
for Ranger Global Real Estate Advisors, a boutique asset manager focused on alternative property sectors. Earlier in her career, Ms. Phillips
served in various marketing and product-related roles at Cohen & Steers Capital Management and Principal Global Investors.
**
*Peter Cotton*,51,
has served on our board of directors since December 10, 2025. Dr. Cotton is a quantitative finance practitioner, entrepreneur, and open-source
contributor. In 2022, he published *Microprediction: Building and Open AI Network*, discussing the rise of decentralized artificial
intelligence. During his time at JP Morgan (May 2013 to October 2019) he worked on the application of control theory to over-the-counter
trading and for part of his time at Morgan Stanley (August 2001 to June 2007) he led CDO pricing. He has co-founded several companies,
including Benchmark Solutions, which was acquired by Bloomberg in 2019, Microprediction LLC and Score Technologies. His contributions
to open source include Python packages for timeseries, optimization and portfolio construction with over a million downloads. Previously,
Dr. Cotton served as Chief Scientific Officer at Intech Investments from October 2019 to September 2024, Chief Data Scientist at ExodusPoint
Capital from October 2023 to August 2024 and Chief Scientist at Crunch Labs from August 2024 to August 2025. He received his doctorate
in mathematics from Stanford University. We believe Mr. Cottons experience in the technology and finance industries makes him well
qualified to serve on our board of directors.
**
**
65
**
*Andrew Weksler*,37,
has served on our board of directors since December 10, 2025. Mr.Weksler is a seasoned investment professional with extensive experience
in structured and corporate investments. Mr.Weksler serves as the Managing Partner of JBA Asset Management LLC (JBAAM),
a New York-based investment firm focused on public equities, structured and private credit since December 2024. In this role, he leads
the firms strategic initiatives and oversees its investment activities. Prior to JBAAM, Mr.Weksler worked at Atalaya Capital
Management (Atayala) from August 2018 up until its acquisition by Blue Owl in September 2024, where he managed the firms
public equities and ABS portfolios. Mr.Weksler served as Managing Director at Atalaya beginning in January 2022. Mr.Weksler
started his career at Axonic Capital and Goldman Sachs. We believe Mr. Wekslers experience in the investment management industry
makes him well qualified to serve on our board of directors.
**
*Ziv Conen,*41,
has served on our board of directors since January 23, 2026. Since September 2021, Mr. Conen has been a Partner at New Era Capital Partners,
where he leads early-stage investments across cybersecurity, cloud infrastructure, DevOps, and AI. Between January 2016 and September
2021, Mr. Conen served as an Associate Partner at McKinsey & Company, where he led digital, technology, and advance analytics transformations
across various industries. Mr. Conens career started in the Israeli Intelligence Corps, where he led technological, intelligence,
and operational teams in Unit 8200 (the Signal Intelligence Unit). Mr. Conen finished his service as a Major. Mr. Conen received his MBA
from the Massachusetts Institute of Technology (MIT) and his B.Sc in Computer Science from the Open University of Israel. We believe Mr.
Conens vast experience in the technology industry makes him well qualified to serve on our board of directors.
Number and Terms of Office of Officers and
Directors
Our board of directors consists
of four members and is divided into three classes with only one class of directors being appointed in each year, and with each class (except
for those directors appointed prior to our first annual general meeting) serving a three-year term. In accordance with Nasdaq corporate
governance requirements, we are not required to hold an annual general meeting until one year after our first fiscal year end following
our listing on Nasdaq. The term of office of the first class of directors, consisting of Peter Cotton and Andrew Weksler, will expire
at our first annual general meeting. The term of office of the second class of directors, consisting of Ziv Conen, will expire at the
second annual general meeting. The term of office of the third class of directors, consisting of R. Ramin Kamfar, will expire at the third
annual general meeting.
Our officers are appointed
by the board of directors and serve at the discretion of the board of directors, rather than for specific terms of office. Our board of
directors is authorized to appoint officers as it deems appropriate pursuant to our amended and restated memorandum and articles of association.
Director Independence
The rules of Nasdaq require
that a majority of our board of directors be independent within one year of our initial public offering. An independent director
is defined generally as a person who, in the opinion of the companys board of directors, has no material relationship with the
listed company (either directly or as a partner, shareholder or officer of an organization that has a relationship with the company).
Our board of directors has determined that each of Ziv Conen, Peter Cotton and Andrew Weksler is an independent director
as defined in Nasdaq listing standards and applicable SEC rules. Our independent directors have regularly scheduled meetings at which
only independent directors are present.
Committees of the Board of Directors
Our board of directors has
two standing committees: an audit committee and a compensation committee. Each of our audit committee and our compensation committee is
composed solely of independent directors. Subject to phase-in rules, the rules of Nasdaq and Rule 10A-3 of the Exchange Act require that
the audit committee of a listed company be comprised solely of independent directors, and the rules of Nasdaq require that the compensation
committee of a listed company be comprised solely of independent directors. Each committee operates under a charter that was approved
by our board of directors and has the composition and responsibilities described below. The charter of each committee is available on
our website.
66
Audit Committee
The members of our audit committee
are Ziv Conen, Peter Cotton and Andrew Weksler. Under Nasdaq listing standards and applicable SEC rules, we are required to have at least
three members of the audit committee, all of whom must be independent. Each of Ziv Conen, Peter Cotton and Andrew Weksler meets the independent
director standard under Nasdaq listing standards and under Rule 10-A-3(b)(1) of the Exchange Act. Andrew Weksler serves as chair of the
audit committee.
Each member of the audit committee
is financially literate and our board of directors has determined that Andrew Weksler qualifies as an audit committee financial
expert as defined in applicable SEC rules and has accounting or related financial management expertise.
We have adopted an audit committee
charter, which details the principal functions of the audit committee, including:
|
| assisting board oversight of (1)the integrity of our
financial statements, (2)our compliance with legal and regulatory requirements, (3)our independent registered public accounting
firms qualifications and independence, and (4)the performance of our internal audit function and independent registered
public accounting firm; the appointment, compensation, retention, replacement, and oversight of the work of the independent registered
public accounting firm and any other independent registered public accounting firm engaged by us; |
|
|
| setting clear policies for audit partner rotation in compliance
with applicable laws and regulations; obtaining and reviewing a report, at least annually, from the independent registered public accounting
firm describing (1)the independent registered public accounting firms internal quality-control procedures and (2)any
material issues raised by the most recent internal quality-control review, or peer review, of the independent registered public accounting
firm, or by any inquiry or investigation by governmental or professional authorities, within the preceding fiveyears respecting
one or more independent audits carried out by the firm and any steps taken to deal with such issues; |
|
|
| meeting to review and discuss our annual audited financial
statements and quarterly financial statements with management and the independent registered public accounting firm, including reviewing
our specific disclosures under Managements Discussion and Analysis of Financial Condition and Results of Operations;
reviewing and approving any related party transaction required to be disclosed pursuant to Item404 of RegulationS-K promulgated
by the SEC prior to us entering into such transaction; and |
|
|
| reviewing with management, the independent registered public
accounting firm, and our legal advisors, as appropriate, any legal, regulatory or compliance matters, including any correspondence with
regulators or government agencies and any employee complaints or published reports that raise material issues regarding our financial
statements or accounting policies and any significant changes in accounting standards or rules promulgated by the Financial Accounting
Standards Board, the SEC or other regulatory authorities. |
|
Compensation Committee
The members of our
compensation committee are Peter Cotton and Andrew Weksler. Under Nasdaq listing standards and applicable SEC rules, we are required
to have at least two members of the compensation committee, all of whom must be independent. Each of Peter Cotton and Andrew Weksler
is independent. Peter Cotton chairs the compensation committee.
67
We have adopted a compensation
committee charter, which details the principal functions of the compensation committee, including:
|
| reviewing and approving on an annual basis the corporate goals and objectives relevant to our chief executive
officers compensation, evaluating our chief executive officers performance in light of such goals and objectives and determining
and approving the remuneration (if any) of our chief executive officer based on such evaluation; | |
|
| reviewing and making recommendations to our board of directors with respect to the compensation, and any
incentive compensation and equity based plans that are subject to board approval of all of our other officers; | |
|
| reviewing our executive compensation policies and plans; | |
|
| implementing and administering our incentive compensation equity-based remuneration plans; | |
|
| assisting management in complying with our proxy statement and annual report disclosure requirements; | |
|
| approving all special perquisites, special cash payments and other special compensation and benefit arrangements
for our executive officers and employees; | |
|
| producing a report on executive compensation to be included in our annual proxy statement; and | |
|
| reviewing, evaluating and recommending changes, if appropriate, to the remuneration for directors. | |
Notwithstanding the
foregoing, other than the payment of up to $20,000 per month to our Sponsor for a maximum of twelve months during the Completion
Window for office space, secretarial and administrative services and reimbursement of expenses, no compensation of any kind,
including finders, consulting or other similar fees, will be paid to any of our existing shareholders, officers, directors or any of
their respective affiliates, prior to, or for any services they render in order to effectuate the consummation of an initial
Business Combination. Accordingly, it is likely that prior to the consummation of an initial Business Combination, the compensation
committee will only be responsible for the review and recommendation of any compensation arrangements to be entered into in
connection with such initial Business Combination.
The compensation committee
charter also provides that the compensation committee may, in its sole discretion, retain or obtain the advice of a compensation consultant,
independent legal counsel or other adviser and is directly responsible for the appointment, compensation and oversight of the work of
any such adviser. However, before engaging or receiving advice from a compensation consultant, external legal counsel or any other adviser,
the compensation committee will consider the independence of each such adviser, including the factors required by Nasdaq and the SEC.
Director Nominations
We do not have a standing
nominating committee though we intend to form a corporate governance and nominating committee as and when required to do so by law or
Nasdaq rules. In accordance with Rule 5605(e) of the Nasdaq rules, a majority of the independent directors may recommend a director nominee
for selection by our board of directors. Our board of directors believes that our independent directors can satisfactorily carry out the
responsibility of properly selecting or approving director nominees without the formation of a standing nominating committee. The directors
who participate in the consideration and recommendation of director nominees are Ziv Conen, Peter Cotton and Andrew Weksler. In accordance
with Rule 5605 of the Nasdaq rules, all such directors are independent. As there is no standing nominating committee, we do not have a
nominating committee charter in place.
The board of directors will
also consider director candidates recommended for nomination by our shareholders during such times as they are seeking proposed nominees
to stand for appointment at the next annual general meeting (or, if applicable, an extraordinary general meeting). Our shareholders that
wish to nominate a director for appointment to our board of directors should follow the procedures set forth in our amended and restated
memorandum and articles of association.
68
We have not formally established
any specific, minimum qualifications that must be met or skills that are necessary for directors to possess. In general, in identifying
and evaluating nominees for director, the board of directors considers educational background, diversity of professional experience, knowledge
of our business, integrity, professional reputation, independence, wisdom, and the ability to represent the best interests of our shareholders.
Prior to our initial business combination, holders of our public shares will not have the right to recommend director candidates for nomination
to our board of directors.
Compensation Committee Interlocks and Insider
Participation
None of our officers currently
serves, or in the past year has served, as a member of the compensation committee of any entity that has one or more officers serving
on our board of directors.
Code of Business Conduct and Ethics, Insider
Trading Policy and Committee Charters
We have adopted a Code of
Ethics applicable to our directors, officers and employees. We have filed a copy of our Code of Ethics as an exhibit to this Form 10-K.
You are able to review this document by accessing our public filings at the SECs web site at *www.sec.gov*. In addition, a
copy of the Code of Ethics and the charters of the committees of our board of directors can be provided without charge upon request from
us. If we make any amendments to our Code of Ethics other than technical, administrative or other non-substantive amendments, or grant
any waiver, including any implicit waiver, from a provision of the Code of Ethics applicable to our principal executive officer, principal
financial officer principal accounting officer or controller or persons performing similar functions requiring disclosure under applicable
SEC or Nasdaq rules, we will disclose the nature of such amendment or waiver on our website. The information included on our website is
not incorporated by reference into this Form 10-K or in any other report or document we file with the SEC, and any references to our website
are intended to be inactive textual references only.
We have also adopted a policy regarding insider training and dissemination of inside information (the Insider Trading Policy) governing the purchase, sale, and other disposition of our securities by our directors, officers, and employees as well as by the Company that we believe is reasonably designed to promote compliance with insider trading laws, rules, and regulations and listing standards applicable to the Company. A copy of our Insider Trading Policy is filed as Exhibit 19 to this Form 10-K.
Limitation on Liability and Indemnification
of Officers and Directors
Cayman Islands law does not
limit the extent to which a companys memorandum and articles of association may provide for indemnification of officers and directors,
except to the extent any such provision may be held by the Cayman Islands courts to be contrary to public policy, such as to provide indemnification
against willful default, fraud or the consequences of committing a crime. Our amended and restated memorandum and articles of association
provide for indemnification of our officers and directors to the maximum extent permitted by law, including for any liability incurred
in their capacities as such, except through their own actual fraud, willful default or willful neglect. We have purchased a policy of
directors and officers liability insurance that insures our officers and directors against the cost of defense, settlement
or payment of a judgment in some circumstances and insures us against our obligations to indemnify our officers and directors.
Our officers and directors
have agreed to waive any right, title, interest or claim of any kind in or to any monies in the Trust Account, and have agreed to waive
any right, title, interest or claim of any kind they may have in the future as a result of, or arising out of, any services provided to
us and will not seek recourse against the Trust Account for any reason whatsoever. Accordingly, any indemnification provided will only
be able to be satisfied by us if (i) we have sufficient funds outside of the Trust Account or (ii) we consummate an initial Business Combination.
Our indemnification obligations
may discourage shareholders from bringing a lawsuit against our officers or directors for breach of their fiduciary duty. These provisions
also may have the effect of reducing the likelihood of derivative litigation against our officers and directors, even though such an action,
if successful, might otherwise benefit us and our shareholders. Furthermore, a shareholders investment may be adversely affected
to the extent we pay the costs of settlement and damage awards against our officers and directors pursuant to these indemnification provisions.
We believe that these provisions,
the insurance and the indemnity agreements are necessary to attract and retain talented and experienced officers and directors.
69
Item 11. Executive Compensation.
None of our executive
officers or directors has received any cash compensation for services rendered. We pay our Sponsor up to $20,000 per month for a
maximum of twelve months for office space, secretarial and administrative services to members of our management team until
the consummation of our initial Business Combination. No compensation of any kind, including any finders fee, reimbursement,
consulting fee or monies in respect of any payment of a loan, will be paid by us to our Sponsor, officers and directors, or any
affiliate of theirs, for services rendered prior to, or for any services rendered in order to effectuate, the consummation of our
initial Business Combination (regardless of the type of transaction that it is). However, these individuals will be entitled to
certain payments including, but not limited to, reimbursement for any out-of-pocket expenses incurred in connection with activities
on our behalf such as identifying potential target businesses and performing due diligence on suitable business combinations. Our
audit committee reviews on a quarterly basis all payments that were made to our Sponsor, officers or directors, or our or their
affiliates. Any such payments prior to an initial Business Combination will be made using funds held outside the Trust Account.
Other than quarterly audit committee review of such payments, we do not expect to have any additional controls in place governing
our reimbursement payments to our directors and executive officers for their out-of-pocket expenses incurred in connection with
identifying and consummating an initial Business Combination.
After the completion of our
initial Business Combination, directors or members of our management team who remain with us may be paid consulting or management fees
from the combined company. All of these fees will be fully disclosed to shareholders, to the extent then known, in the tender offer materials
or proxy solicitation materials furnished to our shareholders in connection with a proposed initial Business Combination. We have not
established any limit on the amount of such fees that may be paid by the combined company to our directors or members of management. It
is unlikely the amount of such compensation will be known at the time of the proposed initial Business Combination, because the directors
of the post-combination business will be responsible for determining officer and director compensation. Any compensation to be paid to
our officers will be determined, or recommended to the board of directors for determination, either by a compensation committee constituted
solely by independent directors or by a majority of the independent directors on our board of directors.
We do not intend to take any
action to ensure that members of our management team maintain their positions with us after the consummation of our initial Business Combination,
although it is possible that some or all of our officers and directors may negotiate employment or consulting arrangements to remain with
us after our initial Business Combination. The existence or terms of any such employment or consulting arrangements to retain their positions
with us may influence our managements motivation in identifying or selecting a target business but we do not believe that the ability
of our management to remain with us after the consummation of our initial Business Combination will be a determining factor in our decision
to proceed with any potential Business Combination. We are not party to any agreements with our officers and directors that provide for
benefits upon termination of employment.
Item 12. Security Ownership of Certain Beneficial
Owners and Management and Related Shareholder Matters.
The following table sets forth
information regarding the beneficial ownership of our ordinary shares as of March 20, 2026, by:
|
| each person known by us to be the beneficial owner of more
than 5% of our outstanding ordinary shares; |
|
|
| each of our officers and directors; and |
|
|
| all our officers and directors as a group. |
|
70
Unless otherwise indicated,
we believe that all persons named in the table below have sole voting and investment power with respect to all ordinary shares beneficially
owned by them. The following table does not reflect beneficial ownership of the Public Warrants or Private Placement Warrants as these
warrants are not exercisable within 60 days of the date of this Form 10-K.
We have based our calculation
of the percentage of beneficial ownership on 17,250,000 Class A Ordinary Shares and 5,750,000 Class B Ordinary Shares issued and outstanding
as of March 20, 2026.
|
| |
Class A | | |
Class B | | |
| | |
|
| |
Ordinary Shares | | |
Ordinary Shares | | |
Approximate | | |
|
| |
Number of | | |
| | |
Number of | | |
| | |
Percentageof | | |
|
| |
Shares | | |
Approximate | | |
Shares | | |
Approximate | | |
Outstanding | | |
|
| |
Beneficially | | |
Percentage | | |
Beneficially | | |
Percentage | | |
Ordinary | | |
|
Name
and Address of Beneficial Owner(1) | |
Owned | | |
of Class | | |
Owned(2) | | |
of Class | | |
Shares | | |
|
Directors and Officers | |
| | |
| | |
| | |
| | |
| | |
|
R. Ramin Kamfar(3) | |
| - | | |
| - | | |
| 5,655,000 | | |
| 98.3 | % | |
| 24.6 | % | |
|
Jordan Ruddy | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
|
Simon Adamiyatt | |
| - | | |
| - | | |
| - | | |
| - | | |
| * | | |
|
Ryan MacDonald | |
| - | | |
| - | | |
| - | | |
| - | | |
| * | | |
|
Christopher Vohs | |
| - | | |
| - | | |
| - | | |
| - | | |
| * | | |
|
Jason Emala | |
| - | | |
| - | | |
| - | | |
| - | | |
| * | | |
|
Harrison Seideman | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
|
Julia Phillips | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
|
Peter Cotton | |
| - | | |
| - | | |
| 20,000 | | |
| * | | |
| * | | |
|
Andrew Weksler | |
| - | | |
| - | | |
| 40,000 | | |
| * | | |
| * | | |
|
Ziv Conen | |
| - | | |
| - | | |
| 35,000 | | |
| * | | |
| * | | |
|
All officers and directors as a group (11 individuals) | |
| - | | |
| - | | |
| 5,750,000 | | |
| 100.0 | % | |
| 25.0 | % | |
|
Five Percent Holders | |
| | | |
| | | |
| | | |
| | | |
| | | |
|
Bluerock Acquisition Holdings, LLC(3) | |
| - | | |
| - | | |
| 5,655,000 | | |
| 98.3 | % | |
| 24.6 | % | |
|
* | Less than 1% |
|
|
(1) | Unless otherwise noted, the business address of each of the
following entities or individuals is c/o Bluerock Acquisition Corp., 919 Third Avenue, New York, New York 10022. |
|
|
(2) | Interests shown consist solely of Founder Shares, classified
as Class B Ordinary Shares. Such shares will automatically convert into Class A Ordinary Shares concurrently with or immediately following
the consummation of our initial Business Combination, or earlier at the option of the holders thereof, on a one-for-one basis, subject
to adjustment. |
|
|
(3) | Bluerock Acquisition Holdings, LLC is the record holder of
the shares reported herein. The sole managing member of Bluerock Acquisition Holdings, LLC is BEH SPAC Holdings, LLC (BEH Holdings).
Bluerock Enterprise Holdings, LP ("Bluerock Enterprise") is the sole member of BEH. Bluerock Holdings Manager, Inc. ("Bluerock
Manager") is the general partner of Bluerock Enterprise. R. Ramin Kamfar controls Bluerock Manager and has voting and investment
discretion with respect to the securities held by Bluerock Acquisition Holdings, LLC. |
|
Item 13. Certain Relationships and Related Transactions,
and Director Independence
Founder Shares
On July 23, 2025, our Sponsor
purchased an aggregate of 7,666,667 Founder Shares for an aggregate purchase price of $25,000, or approximately $0.003 per share. On November
6, 2025, our Sponsor surrendered 1,916,667 Founder Shares to us for no consideration. In November 2025, our Sponsor transferred an aggregate
of 60,000 Founder Shares to certain of our independent directors, resulting in our Sponsor holding 5,690,000 Founder Shares. On January
23, 2026, our Sponsor transferred 35,000 Founder Shares to an independent director, resulting in our Sponsor holding 5,655,000 Founder
Shares and our initial shareholders holding an aggregate of 5,750,000 Founder Shares. The number of Founder Shares issued was determined
based on the expectation that such Founder Shares would represent 25% of the outstanding shares after the IPO.
71
Private Placement
Warrants
Our Sponsor and Cantor purchased
an aggregate of 4,500,000 Private Placement Warrants for an aggregate purchase price of $4,500,000, or $1.00 per warrant, in a private
placement that occurred simultaneously with the closing of the IPO. Of those 4,500,000 Private Placement Warrants, our Sponsor purchased
3,000,000 Private Placement Warrants and Cantor purchased 1,500,000 Private Placement Warrants. The Private Placement Warrants are identical
to the warrants sold as part of the Units in the IPO except that, so long as they are held by our Sponsor, Cantor or their respective
permitted transferees, (i) may not (including the underlying securities), subject to certain limited exceptions, be transferred, assigned
or sold by the holders until 30 days after the completion of our initial Business Combination, (ii) and are entitled to registration rights,
and (iii) with respect to Private Placement Warrants held by Cantor and/or their respective designees, are not exercisable more than five
years from the commencement of sales in the IPO in accordance with FINRA Rule 5110(g)(8). A portion of the purchase price of the Private
Placement Warrants were added to the proceeds from the IPO to be held in the Trust Account such that $172,500,000 is held in the Trust
Account. If we do not complete our initial Business Combination within the Completion Window, the Private Placement Warrants will expire
worthless. The Private Placement Warrants and Private Placement Warrants are subject to the transfer restrictions described above. Otherwise,
the Private Placement Warrants have terms and provisions that are identical to those of the units being sold in the IPO.
Administrative Services
and Indemnification Agreement
We entered into an
Administrative Services and Indemnification Agreement with our Sponsor in connection with the IPO. Pursuant to the terms of that
agreement, we agreed to pay our Sponsor up to $20,000 per month for a maximum of twelve months during the Completion Window for
office space, secretarial and administrative services provided to us and members of our management team. Upon completion of our
initial Business Combination or our liquidation, we will cease paying these monthly fees.
No compensation of any kind,
including finders and consulting fees, will be paid by the Company to our Sponsor, executive officers and directors, or any of
their respective affiliates, for services rendered prior to or in connection with the completion of an initial Business Combination without
shareholder approval. However, these individuals will be reimbursed for any out-of-pocket expenses incurred in connection with activities
on our behalf such as identifying potential target businesses and performing due diligence on suitable Business Combinations. Our audit
committee will review on a quarterly basis all payments that were made to our Sponsor, officers, directors or our or their affiliates.
Promissory Note
On July 23, 2025 the Sponsor
agreed to loan the Company up to $300,000 pursuant to a promissory note (the Note). The Note is non-interest bearing, unsecured
and due on the earlier of December 31, 2025 or the closing of the IPO. As of December 31, 2025, there are no amounts outstanding and no
further borrowings are permitted under the Note.
Working Capital Loans
In addition, in order to finance
transaction costs in connection with an intended initial Business Combination, our Sponsor or an affiliate of our Sponsor or certain of
our officers and directors may, but are not obligated to, loan us funds as may be required on a non-interest basis. If we complete an
initial Business Combination, we would repay such loaned amounts. In the event that the initial Business Combination does not close, we
may use a portion of the working capital held outside the Trust Account to repay such loaned amounts but no proceeds from our Trust Account
would be used for such repayment. Up to $1,500,000 of such loans may be convertible into Private Placement Warrants at a price of $1.00
per warrant, at the option of the lender. The warrants would be identical to the Private Placement Warrants, including as to exercisability
and exercise price. Except as set forth above, the terms of such loans, if any, have not been determined and no written agreements exist
with respect to such loans. Prior to the completion of our initial Business Combination, we do not expect to seek loans from parties other
than our Sponsor or an affiliate of our Sponsor as we do not believe third parties will be willing to loan such funds and provide a waiver
against any and all rights to seek access to funds in our Trust Account. Except for the foregoing, the terms of such working capital loans,
if any, have not been determined and no written agreements exist with respect to such loans. As of December 31, 2025, the Company had
no borrowings under the working capital loans.
Any of the foregoing payments
to our Sponsor, repayments of loans from our Sponsor or repayments of working capital loans prior to our initial Business Combination
will be made using funds held outside the Trust Account.
72
After our initial Business
Combination, members of our management team who remain with us may be paid consulting, management or other fees from the combined company
with any and all amounts being fully disclosed to our shareholders, to the extent then known, in the proxy materials or tender offer documents,
as applicable, furnished to our shareholders. It is unlikely the amount of such compensation will be known at the time of distribution
of such tender offer documents or at the time of a shareholder meeting held to consider our initial Business Combination, as applicable,
as it will be up to the directors of the post-Business Combination entity to determine executive and director compensation.
Registration Rights
Agreement
The holders of Founder Shares,
Private Placement Warrants and warrants that may be issued upon conversion of working capital loans (and any ordinary shares issuable
upon the exercise of the Private Placement Warrants or warrants issued upon conversion of the working capital loans), are entitled to
registration rights pursuant to a registration rights agreement signed in connection with the IPO. These holders are entitled to certain
demand and piggyback registration rights. We will bear the expenses incurred in connection with the filing of any such registration
statements.
Item 14. Principal Accounting Fees and Services.
The firm of WithumSmith+Brown,
PC (Withum) acts as our independent registered public accounting firm. The following is a summary of fees paid to Withum
for services rendered.
**
*Audit Fees*. During
the period from July 11, 2025 (inception) through December 31, 2025, fees for our independent registered public accounting firm were approximately
$82,680 for the services Withum performed in connection with our Initial Public Offering and the audit of our December 31, 2025 financial
statements included in this Form 10-K.
**
*Audit-Related Fees.*
During the period from July 11, 2025 (inception) through December 31, 2025, our independent registered public accounting firm did not
render assurance and related services related to the performance of the audit or review of financial statements.
**
*Tax Fees*. During the
period from July 11, 2025 (inception) through December 31, 2025, our independent registered public accounting firm did not render services
to us for tax compliance, tax advice and tax planning.
**
*All Other Fees*. During
the period from July 11, 2025 (inception) through December 31, 2025, there were no fees billed for products and services provided by our
independent registered public accounting firm other than those set forth above.
Pre-Approval Policy
Our audit committee was formed
upon the consummation of our Initial Public Offering. As a result, the audit committee did not pre-approve all of the foregoing services,
although any services rendered prior to the formation of our audit committee were approved by our board of directors. Since the formation
of our audit committee, and on a going-forward basis, the audit committee has and will pre-approve all auditing services and permitted
non-audit services to be performed for us by our auditors, including the fees and terms thereof (subject to the de minimis exceptions
for non-audit services described in the Exchange Act which are approved by the audit committee prior to the completion of the audit).
74
Part
IV
Item 15. Exhibits, Financial Statement Schedules.
|
(a) | The following documents are filed as part of this Form 10-K: |
|
|
1. | Financial Statements: See Index to Financial Statements
at Item 8. Financial Statements and Supplementary Data herein. |
|
|
(b) | Financial Statement Schedules. All schedules are omitted
for the reason that the information is included in the financial statements or the notes thereto or that they are not required or are
not applicable. |
|
|
(c) | Exhibits: The exhibits listed in the Exhibit Index below
are filed or incorporated by reference as part of this Form 10-K. |
|
Exhibit Index
|
Number |
|
Description |
|
|
3.1 |
|
Amended and Restated Memorandum and Articles of Incorporation (incorporated by reference to Exhibit 3.1 to the Registrants Current Report on Form 8-K (File No. 001-43007), filed with the SEC on December 16, 2025). |
|
|
4.1 |
|
Specimen Unit Certificate (incorporated by reference to Exhibit 4.1 to the Registrants Registration Statement on Form S-1 (File No. 333-291337), filed with the SEC on November 6, 2025). |
|
|
4.2 |
|
Specimen Class A Ordinary Shares Certificate (incorporated by reference to Exhibit 4.2 to the Registrants Registration Statement on Form S-1 (File No. 333-291337), filed with the SEC on November 6, 2025). |
|
|
4.3 |
|
Specimen Warrant Certificate (incorporated by reference to Exhibit 4.4 to the Registrants Registration Statement on Form S-1 (File No. 333-291337), filed with the SEC on November 6, 2025). |
|
|
4.4 |
|
Warrant Agreement, dated December 10, 2025, by and between the Registrant and Continental Stock Transfer & Trust Company, as warrant agent (incorporated by reference to Exhibit 4.1 to the Registrants Current Report on Form 8-K (File No. 001-43007), filed with the SEC on December 16, 2025). |
|
|
4.5* |
|
Description of Securities. |
|
|
10.1 |
|
Letter Agreement, dated December 10, 2025, by and among the Registrant, Bluerock Acquisition Holdings, LLC and each of the executive officers and directors of the Registrant (incorporated by reference to Exhibit 10.1 to the Registrants Current Report on Form 8-K (File No. 001-43007), filed with the SEC on December 16, 2025). |
|
|
10.2 |
|
Investment Management Trust Agreement, dated December 10, 2025, by and between the Registrant and Continental Stock Transfer & Trust Company, as trustee (incorporated by reference to Exhibit 10.2 to the Registrants Current Report on Form 8-K (File No. 001-43007), filed with the SEC on December 16, 2025). |
|
|
10.3 |
|
Registration Rights Agreement, dated December 10, 2025, by and among the Registrant, Bluerock Acquisition Holdings, LLC and the other holders party thereto (incorporated by reference to Exhibit 10.3 to the Registrants Current Report on Form 8-K (File No. 001-43007), filed with the SEC on December 16, 2025). |
|
|
10.4 |
|
Private Placement Warrants Purchase Agreement, dated December 10, 2025, by and between the Registrant and Bluerock Acquisition Holdings, LLC (incorporated by reference to Exhibit 10.4 to the Registrants Current Report on Form 8-K (File No. 001-43007), filed with the SEC on December 16, 2025). |
|
|
10.5 |
|
Private Placement Warrants Purchase Agreement, dated December 10, 2025, by and between the Registrant and Cantor Fitzgerald & Co. (incorporated by reference to Exhibit 10.5 to the Registrants Current Report on Form 8-K (File No. 001-43007), filed with the SEC on December 16, 2025). |
|
|
10.6 |
|
Form of Indemnity Agreement (incorporated by reference to Exhibit 10.6 to the Registrants Registration Statement on Form S-1 (File No. 333-291337), filed with the SEC on November 6, 2025). |
|
75
|
10.7 |
|
Administrative Services and Indemnification Agreement, dated December 10, 2025, by and between the Registrant and Bluerock Acquisition Holdings, LLC (incorporated by reference to Exhibit 10.6 to the Registrants Current Report on Form 8-K (File No. 001-43007), filed with the SEC on December 16, 2025). |
|
|
10.8 |
|
Promissory Note issued to Bluerock Acquisition Holdings, LLC (incorporated by reference to Exhibit 10.7 to the Registrants Registration Statement on Form S-1 (File No. 333-291337), filed with the SEC on November 6, 2025). |
|
|
10.9 |
|
Securities Subscription Agreement between Bluerock Acquisition Holdings, LLC and the Registrant (incorporated by reference to Exhibit 10.8 to the Registrants Registration Statement on Form S-1 (File No. 333-291337), filed with the SEC on November 8, 2025). |
|
|
14.1 |
|
Form of Code of Ethics (incorporated by reference to Exhibit 14.1 to the Registrants Registration Statement on Form S-1 (File No. 333-291337), filed with the SEC on November 6, 2025). |
|
|
19* |
|
Insider Trading Policy. |
|
|
24.1* |
|
Power of Attorney (included on the signature pages herein). |
|
|
31.1* |
|
Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
|
|
31.2* |
|
Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
|
|
32.1** |
|
Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
|
|
32.2** |
|
Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
|
|
97.1* |
|
Policy relating to the recovery of erroneously awarded compensation. |
|
|
101.INS |
|
Inline XBRL Instance Document |
|
|
101.SCH |
|
Inline XBRL Taxonomy Extension Schema Document |
|
|
101.CAL |
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document |
|
|
101.DEF |
|
Inline XBRL Taxonomy Extension Definition Linkbase Document |
|
|
101.LAB |
|
Inline XBRL Taxonomy Extension Label Linkbase Document |
|
|
101.PRE |
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document |
|
|
104 |
|
Cover Page Interactive Data File (Embedded within the Inline XBRL document and included in Exhibit) |
|
|
* | Filed herewith. |
|
|
** | Furnished herewith. |
|
Item 16. Form 10-K Summary
None.
76
SIGNATURES
Pursuant to the requirements
of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Form 10-K to be signed
on its behalf by the undersigned, thereunto duly authorized.
|
|
BLUEROCK ACQUISITION CORP. | |
|
|
|
| |
|
|
By: |
/s/ R. Ramin Kamfar | |
|
|
Name: |
R. Ramin Kamfar | |
|
|
Title: |
Chief Executive Officer and Chairman | |
|
|
|
(Principal Executive Officer) | |
|
|
| |
|
Dated: March 20, 2026 |
| |
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE
PRESENTS, that each person whose signature appears below constitutes and appoints R. Ramin Kamfar and Christopher Vohs, and each or any
one of them, his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him and in his name,
place and stead, in any and all capacities, to sign any and all amendments to this Form 10-K, and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the United States Securities and Exchange Commission, granting unto said attorneys-in-fact
and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done
in connection therewith, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents, or any of them, or his or her substitutes or substitute, may lawfully do or cause to be done
by virtue hereof.
Pursuant to the requirements
of the Securities Act of 1933, as amended, this Form 10-K has been signed below by the following persons on behalf of the Registrant in
the capacities and on the dates indicated.
|
Name |
|
Title |
|
Date | |
|
|
|
|
|
| |
|
/s/ R. Ramin Kamfar |
|
Chief Executive Officer and Chairman |
|
March 20, 2026 | |
|
R. Ramin Kamfar |
|
(Principal Executive Officer) |
|
| |
|
|
|
|
|
| |
|
/s/ Christopher Vohs |
|
Chief Financial Officer |
|
March 20, 2026 | |
|
Christopher Vohs |
|
(Principal Financial and Accounting Officer) |
|
| |
|
|
|
|
|
| |
|
/s/ Ziv Conen |
|
Director |
|
March 20, 2026 | |
|
Ziv Conen |
|
|
|
| |
|
|
|
|
|
| |
|
/s/ Peter Cotton |
|
Director |
|
March 20, 2026 | |
|
Peter Cotton |
|
|
|
| |
|
|
|
|
|
| |
|
/s/ Andrew Weksler |
|
Director |
|
March 20, 2026 | |
|
Andrew Weksler |
|
|
|
| |
77
BLUEROCK ACQUISITION CORP.
INDEX TO FINANCIAL STATEMENTS
|
Report of Independent Registered Public Accounting Firm (PCAOB ID Number 100) |
|
F-2 | |
|
Financial Statements: |
|
| |
|
Balance Sheet as of December 31, 2025 |
|
F-3 | |
|
Statement of Operations for the period from July 11, 2025 (Inception) through December 31, 2025 |
|
F-4 | |
|
Statement of Changes in Shareholders Deficit for the period from July 11, 2025 (Inception) through December 31, 2025 |
|
F-5 | |
|
Statement of Cash Flows for the period from July 11, 2025 (Inception) through December 31, 2025 |
|
F-6 | |
|
Notes to Financial Statements |
|
F-7 to F-18 | |
F-1
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Shareholder of
Bluerock Acquisition Corp.
Opinion on the Financial Statements
We have audited the accompanying balance sheet of Bluerock Acquisition Corp. (the Company) as of December 31, 2025, the related statements of operations, changes in shareholders deficit and cash flows for the period July 11, 2025 (inception) through December 31, 2025 and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and the results of its operations and its cash for the period July 11, 2025 (inception) through December 31, 2025 in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on the Company's 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 entity's 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/ WithumSmith+Brown, PC | | |
We have served as the Companys auditor since 2025.
New York, New York
March 20, 2026
PCAOB ID Number 100
F-2
BLUEROCK ACQUISITION CORP.
BALANCE SHEET
DECEMBER 31, 2025
|
Assets | |
| | |
|
Current assets | |
| | |
| Cash | | $ | 693,561 | | |
| Prepaid insurance | | | 66,500 | | |
| Prepaid expenses | | | 21,333 | | |
| Total current assets | | | 781,394 | | |
| Long term prepaid insurance | | | 63,729 | | |
| Cash and marketable securities held in Trust Account | | | 172,738,674 | | |
| Total Assets | | $ | 173,583,797 | | |
|
| |
| | | |
|
Liabilities, Class A Ordinary Shares Subject to Possible Redemption, and Shareholders Deficit | |
| | | |
|
Current liabilities | |
| | | |
| Accrued offering costs | | $ | 75,000 | | |
| Accrued expenses | | | 4,617 | | |
| Total current liabilities | | | 79,617 | | |
| Deferred underwriting fee | | | 7,350,000 | | |
| Total Liabilities | | | 7,429,617 | | |
|
| |
| | | |
| Commitments (Note 6) | | | | | |
| Class A ordinary shares subject to possible redemption, $0.0001 par value; 17,250,000 shares at redemption value of $10.01 per share | | | 172,738,674 | | |
|
| |
| | | |
|
Shareholders Deficit | |
| | | |
| Preference shares, $0.0001 par value; 5,000,000 shares authorized; none issued or outstanding | | | | | |
| Class A ordinary shares, $0.0001 par value; 500,000,000 shares authorized; none issued or outstanding (excluding 17,250,000 shares subject to possible redemption) | | | | | |
| Class B ordinary shares, $0.0001 par value; 50,000,000 shares authorized; 5,750,000 shares issued and outstanding(1) | | | 575 | | |
| Additional paid-in capital | | | | | |
| Accumulated deficit | | | (6,585,069 | ) | |
| Total Shareholders Deficit | | | (6,584,494 | ) | |
| Total Liabilities, Class A Ordinary Shares Subject to Possible Redemption, and Shareholders Deficit | | $ | 173,583,797 | | |
| (1) | Includes up to 750,000 ClassB ordinary shares that were subject to forfeiture if the over-allotment option is not exercised in full or in part by the underwriters. On December 12, 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 (Note 7). | |
The accompanying notes are an integral part
of these financial statements.
F-3
BLUEROCK ACQUISITION CORP.
STATEMENT OF OPERATIONS
|
| |
Forthe Periodfrom
July11,
2025
(Inception)
Through
December31, | | |
|
| |
2025 | | |
| General and administrative costs | | $ | 149,025 | | |
| Loss from operations | | | (149,025 | ) | |
|
| |
| | | |
|
Other income: | |
| | | |
| Interest earned on cash and marketable securities held in Trust Account | | | 238,674 | | |
| Total other income | | | 238,674 | | |
|
| |
| | | |
| Net income | | $ | 89,649 | | |
|
| |
| | | |
| Basic and diluted weighted average shares outstanding, Class A ordinary shares | | | 1,894,509 | | |
|
| |
| | | |
| Basic and diluted net income per share, Class A ordinary shares | | $ | 0.01 | | |
|
| |
| | | |
| Basic weighted average shares outstanding, Class B ordinary shares (1) | | | 5,082,370 | | |
|
| |
| | | |
| Basic net income per share, Class B ordinary shares | | $ | 0.01 | | |
|
| |
| | | |
| Diluted weighted average shares outstanding, Class B ordinary shares (1) | | | 5,396,552 | | |
|
| |
| | | |
| Diluted net income per share, Class B ordinary shares | | $ | 0.01 | | |
| (1) | Excludes up to 750,000 ClassB ordinary shares that were subject to forfeiture if the over-allotment option is not exercised in full or in part by the underwriters. On December 12, 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 (Note 7). | |
The accompanying notes are an integral part
of these financial statements.
F-4
BLUEROCK ACQUISITION CORP.
STATEMENT OF CHANGES IN SHAREHOLDERS
DEFICIT
FOR THE PERIOD FROM JULY 11, 2025 (INCEPTION)
THROUGH DECEMBER 31, 2025
|
| |
Class A Ordinary Shares | | |
Class B Ordinary Shares | | |
Additional Paid-in | | |
Accumulated | | |
Total Shareholders | | |
|
| |
Shares | | |
Amount | | |
Shares | | |
Amount | | |
Capital | | |
Deficit | | |
Deficit | | |
| Balance July 11, 2025 (inception) | | | | | | $ | | | | | | | | $ | | | | $ | | | | $ | | | | $ | | | |
|
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| Class B ordinary shares issued to Sponsor(1) | | | | | | | | | | | 5,750,000 | | | | 575 | | | | 24,425 | | | | | | | | 25,000 | | |
|
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| Sale of Private Placement Warrants | | | | | | | | | | | | | | | | | | | 4,500,000 | | | | | | | | 4,500,000 | | |
|
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| Fair Value of Public Warrants at issuance | | | | | | | | | | | | | | | | | | | 2,254,000 | | | | | | | | 2,254,000 | | |
|
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| Allocated value of transaction costs to Public and Private Placement Warrants | | | | | | | | | | | | | | | | | | | (158,534 | ) | | | | | | | (158,534 | ) | |
|
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| Accretion for Class A ordinary shares to redemption amount | | | | | | | | | | | | | | | | | | | (6,619,891 | ) | | | (6,674,718 | ) | | | (13,294,609 | ) | |
|
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| Net income | | | | | | | | | | | | | | | | | | | | | | | 89,649 | | | | 89,649 | | |
|
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| Balance December 31, 2025 | | | | | | $ | | | | | 5,750,000 | | | $ | 575 | | | $ | | | | $ | (6,585,069 | ) | | $ | (6,584,494 | ) | |
| (1) | Includes up to 750,000 ClassB ordinary shares that were subject to forfeiture if the over-allotment option is not exercised in full or in part by the underwriters. On December 12, 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 (Note 7). | |
The accompanying notes are an integral part
of these financial statements.
F-5
BLUEROCK ACQUISITION CORP.
STATEMENT OF CASH FLOWS
FOR THE PERIOD FROM JULY 11, 2025 (INCEPTION)
THROUGH DECEMBER 31, 2025
|
Cash Flows from Operating Activities: | |
| | |
| Net income | | $ | 89,649 | | |
|
Adjustments to reconcile net income to net cash used in operating activities: | |
| | | |
| Payment of general and administrative costs through promissory note related party | | | 42,900 | | |
| Interest earned on cash and marketable securities held in Trust Account | | | (238,674 | ) | |
|
Changes in operating assets and liabilities: | |
| | | |
| Prepaid expenses | | | (21,333 | ) | |
| Long term prepaid insurance | | | (130,229 | ) | |
| Accrued expenses | | | 4,617 | | |
| Net cash used in operating activities | | | (253,070 | ) | |
|
| |
| | | |
|
Cash Flows from Investing Activities: | |
| | | |
| Investment of cash in Trust Account | | | (172,500,000 | ) | |
| Net cash used in investing activities | | | (172,500,000 | ) | |
|
| |
| | | |
|
Cash Flows from Financing Activities: | |
| | | |
| Proceeds from sale of Units, net of underwriting discounts paid | | | 169,500,000 | | |
| Proceeds from sale of Private Placement Units | | | 4,500,000 | | |
| Proceeds from promissory note - related party | | | 249,101 | | |
| Repayment of promissory note - related party | | | (300,000 | ) | |
| Payment of offering costs | | | (502,470 | ) | |
| Net cash provided by financing activities | | | 173,446,631 | | |
|
| |
| | | |
| Net Change in Cash | | | 693,561 | | |
| Cash Beginning of period | | | | | |
| Cash End of period | | $ | 693,561 | | |
|
| |
| | | |
|
Non-cash investing and financing activities: | |
| | | |
| Offering costs included in accrued offering costs | | $ | 110,000 | | |
| Deferred offering costs paid by Sponsor in exchange for issuance of Class B ordinary shares | | $ | 25,000 | | |
| Deferred underwriting fee payable | | $ | 7,350,000 | | |
The accompanying notes are an integral part
of these financial statements.
F-6
BLUEROCK ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2025
NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS
Bluerock Acquisition Corp. (the Company) is a blank check company incorporated in the Cayman Islands on July11, 2025. The Company was formed for the purpose of entering into a merger, amalgamation, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses (a Business Combination). The Company is not limited to a particular industry or geographic region for purposes of consummating a Business Combination. The Company is an early stage and emerging growth company and, as such, the Company is subject to all of the risks associated with early stage and emerging growth companies.
As of December 31, 2025, the Company had not commenced any operations. All activity for the period from July11, 2025 (inception) through December 31, 2025 relates to the Companys formation, the initial public offering (Initial Public Offering), which is described below, and subsequent to the Initial Public Offering, identifying a target company for a Business Combination. The Company will not generate any operating revenues until after the completion of a Business Combination, at the earliest. The Company will generate non-operating income in the form of interest income from the proceeds derived from the Initial Public Offering. The Company has selected December31 as its fiscal year end.
The registration statements for the Companys Initial Public Offering became effective on December 10, 2025. On December 12, 2025, the Company consummated the Initial Public Offering of 17,250,000 units (the Units and, with respect to the Class A ordinary shares included in the Units being offered, the Public Shares), which includes the full exercise by the underwriters of their over-allotment option of 2,250,000 Units, at $10.00 per Unit, generating gross proceeds of $172,500,000. Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of an aggregate of 4,500,000 warrants (the Private Placement Warrants), at a price of $1.00 per Private Placement Warrant, in a private placement to Bluerock Acquisition Holdings LLC (the Sponsor) and Cantor Fitzgerald & Co., the representative of the underwriters of the Initial Public Offering, generating gross proceeds of $4,500,000. Of those 4,500,000 Private Placement Warrants, the Sponsor purchased 3,000,000 Private Placement Warrants and Cantor purchased 1,500,000 Private Placement Warrants.
Transaction costs amounted to $10,960,469, consisting of $3,000,000 of cash underwriting fee, $7,350,000 of deferred underwriting fee and $610,469 of other offering costs.
The Companys management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering and the sale of the Private Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. There is no assurance that the Company will be able to complete a Business Combination successfully. The Company must complete a Business Combination with one or more target businesses that together have an aggregate fair market value of at least 80% of the value of the Trust Account (as defined below) (excluding the deferred underwriting commissions and taxes paid or payable on the interest earned on the Trust Account) on the date of the execution of a definitive agreement into an initial Business Combination. The Company will only complete a Business Combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Actof1940, as amended (the Investment Company Act).
Following the closing of the Initial Public Offering on December 12, 2025, an amount of $172,500,000 ($10.00 per Unit) from the net proceeds of the sale of the Units, and a portion of the net proceeds from the sale of the Private Placement Warrants, was held in a trust account (Trust Account), located in the UnitedStates and invested only in U.S.government treasury obligations with a maturity of 185days or less, 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 and/or held as cash or cash items (including in demand deposit accounts), until the earlier of (i)the completion of a Business Combination and (ii)the distribution of the funds held in the Trust Account, as described below.
The Company will provide its holders of the outstanding Public Shares (the public shareholders) with the opportunity to redeem all or a portion of their Public Shares upon the completion of a Business Combination either (i)in connection with a shareholder meeting called to approve the Business Combination or (ii)without a shareholder vote by means of a tender offer. The decision as to whether the Company will seek shareholder approval of a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would require the Company to seek shareholder approval under applicable law or stock exchange listing requirements. The public shareholders will be entitled to redeem their Public Shares for a pro rata portion of the amount then in the Trust Account (initially anticipated to be $10.00 per Public Share, plus any pro rata interest earned on the funds held in the Trust Account (which interest shall be net of taxes payable and up to $100,000 of interest to pay liquidation expenses). There will be no redemption rights upon the completion of a Business Combination with respect to the Companys warrants. The Public Shares subject to redemption will be recorded at redemption value and classified as temporary equity upon the completion of the Initial Public Offering in accordance with the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic480, *Distinguishing Liabilities from Equity*.
F-7
BLUEROCK ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2025
The Company will proceed with a Business Combination only if the majority of the shares voted are voted in favor of the Business Combination. If a shareholder vote is not required by law and the Company does not decide to hold a shareholder vote for business or other reasons, the Company will, pursuant to its second amended and restated memorandum and articles of association (the Amended and Restated Memorandum and Articles of Association), conduct the redemptions pursuant to the tender offer rules of the U.S.Securities and Exchange Commission (SEC) and file tender offer documents with the SEC prior to completing a Business Combination. If, however, shareholder approval of the transaction is required by law, or the Company decides to obtain shareholder approval for business or other reasons, the Company will offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. If the Company seeks shareholder approval in connection with a Business Combination, the Sponsor has agreed to vote its Founder Shares (as defined in Note5) and any Public Shares purchased during or after the Initial Public Offering in favor of approving a Business Combination. Additionally, each public shareholder may elect to redeem their Public Shares irrespective of whether they vote for or against the proposed transaction or dont vote at all.
Notwithstanding the above, if the Company seeks shareholder approval of a Business Combination and the Company does not conduct redemptions pursuant to the tender offer rules, the Amended and Restated Memorandum and Articles of Association provides that a public shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a group (as defined under Section13 of the Securities ExchangeActof1934, as amended (the ExchangeAct)), will be restricted from redeeming its shares with respect to more than an aggregate of 15% or more of the Public Shares, without the prior consent of the Company.
The Sponsor has agreed to waive redemption rights with respect to any Founder Shares (as defined in Note5) held and any Public Shares they may acquire during or after the Initial Public Offering in connection with the completion of Business Combination, except that Public Shares held by the initial shareholders will be subject to mandatory redemption upon any diminution of the Trust Account in connection with an extension, and such shares will be entitled to redemption at a price equal to the per share redemption value then held in the Trust Account in connection therewith.
The Company will have until 24months from the closing of the Initial Public Offering to complete a Business Combination. However, if the Company anticipates that it may not be able to consummate a Business Combination within 24months from the closing of the Initial Public Offering, the Company may, but is not obligated to, by resolution of the board if requested by the initial shareholders, extend the period of time to consummate a Business Combination the Company may seek shareholder approval to amend the amended and restated memorandum and articles of association to extend the date by which the Company must consummate the initial business combination. If the Company seeks shareholder approval for an extension, holders of public shares will be offered an opportunity to redeem their shares, regardless of whether they abstain, vote for, or against, the Companys initial Business Combination, at a per share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned thereon (which interest shall be net of taxes paid or payable (excluding any 1% U.S.federal excise tax on stock repurchases under the Inflation Reduction Actof2022, or similar tax, that is imposed on the Company, if any) and up to $100,000 of interest to pay liquidation expenses) and not previously released to the Company pursuant to permitted withdrawals, divided by the number of then issued and outstanding public shares, which redemption will completely extinguish public shareholders rights as shareholders (including the right to receive further liquidating distributions, if any), subject to applicable law. For the avoidance of doubt, the time to complete a Business Combination shall not be extended beyond 24months without a shareholder vote. The underwriters have agreed to waive their rights to their deferred underwriting commission held in the Trust Account in the event the Company does not complete a Business Combination within (i) the period ending on the date that is 24 months from the closing of the Initial Public Offering, or such earlier liquidation date as its board of directors may approve, in which it must complete an initial Business Combination or (ii) such other time period in which the Company must complete an initial Business Combination pursuant to an amendment to its amended and restated memorandum and articles of association (the Completion Window) and, in such event, such amounts will be included with the other funds held in the Trust Account that will be available to fund the redemption of the Public Shares.
In order to protect the amounts held in the Trust Account, the Sponsor has agreed that it will be liable to the Company if and to the extent any claims by a third party for services rendered or products sold to the Company, or a prospective target business with which the Company has entered into a written letter of intent, confidentiality or other similar agreement or Business Combination agreement (except for the Companys independent registered public accounting firm), reduce the amount of funds in the Trust Account to below the lesser of (i)$10.00 per Public Share and (ii)the actual amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account, if less than $10.00 per Public Share due to reductions in the value of the trust assets, less taxes paid or payable and up to $100,000 of interest to pay liquidation expenses, provided that such liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights to the monies held in the Trust Account (whether or not such waiver is enforceable) nor will it apply to any claims under the indemnity of the underwriters of the Initial Public Offering against certain liabilities, including liabilities under the Securities Actof1933, as amended (the Securities Act).
F-8
BLUEROCK ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2025
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying financial statements are presented in U.S. dollars and have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) and pursuant to the accounting and disclosure rules and regulations of the Securities and Exchange Commission (the SEC).
Liquidity and Capital Resources
The Companys liquidity needs up until the Initial Public Offering had been satisfied through the loan under an unsecured promissory note from the Sponsor of up to $300,000 (see Note 5). As of December 31, 2025, the Company had $693,561 of cash and had a working capital surplus of $701,777.
In order to finance transaction costs in connection with the initial Business Combination, the Sponsor or an affiliate of the Sponsor or certain of the Companys officers and directors may, but are not obligated to, loan the Company funds as may be required. If the Company completes the initial Business Combination, the Company will repay such loaned amounts. In the event that the initial Business Combination does not close, the Company may use a portion of the working capital held outside the Trust Account to repay such loaned amounts, including the repayment of loans from the Sponsor to pay for any amount deposited to pay for any extension of the time to complete the initial Business Combination, but no proceeds from the Trust Account would be used for such repayment. Up to $1,500,000 of such loans may be convertible into Warrants, at a price of $1.00 per warrant at the option of the lender, upon consummation of the initial Business Combination. The Warrants would be identical to the Private Placement Warrants. The terms of such loans by the Companys officers and directors, if any, have not been determined and no written agreements exist with respect to such loans. There are no such outstanding related party loans as of December 31, 2025.
In connection with the Companys assessment of going concern considerations in accordance with FASB ASC 204-50, *Presentation of Financial Statements - Going Concern*, the Company does not believe it will need to raise additional funds in order to meet the expenditures required for operating its business. However, if the estimate of the costs of identifying a target business, undertaking in-depth due diligence and negotiating a Business Combination are less than the actual amount necessary to do so, the Company may have insufficient funds available to operate its business prior to the initial Business Combination. The Company has the Completion Window to complete the initial Business Combination. Management has determined that the Company has sufficient funds to finance the working capital needs of the Company within one year from the date of issuance of the financial statement.
Emerging Growth Company
The Company is an emerging growth company, as defined in Section2(a)of the Securities Act, as modified by the Jumpstart Our Business Startups Actof2012 (the JOBS Act). As such, the Company is eligible 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 independent registered public accounting firm attestation requirements of Section404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.
Further, Section102(b)(1)of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the ExchangeAct) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that 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 statement in conformity with U.S.GAAP requires the Companys management to make estimates and assumptions that affect the reported amounts of assets and liabilities.
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 statement, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ from those estimates.
F-9
BLUEROCK ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2025
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 $693,561 in cash and no cash equivalents as of December 31, 2025.
Cash and Marketable Securities Held in Trust Account
As of December 31, 2025, the assets held in the Trust Account, amounting to $172,738,674, were held in cash and marketable securities invested in U.S. Treasury funds.
Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist of a cash account in a financial institution, which, at times, may exceed the Federal Deposit Insurance Corporation coverage limit of $250,000. Any loss incurred or a lack of access to such funds could have a significant adverse impact on the Companys financial condition, results of operations, and cash flows.
Offering Costs
The Company complies with the requirements of FASB ASC340-10-S99-1 and SEC Staff Accounting Bulletin Topic5A, *Expenses of Offering*. Offering costs consist principally of professional and registration fees that are related to the Initial Public Offering. FASB ASC 470-20, *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 Units between Class A ordinary shares and warrants, prorate, allocating the Initial Public Offering proceeds to the assigned value of the warrants and to the Class A ordinary shares. Offering costs allocated to the Public Shares were charged to temporary equity and offering costs allocated to the Public and Private Placement Warrants were charged to shareholders deficit as Public and Private Placement Warrants after managements evaluation were accounted for under equity treatment.
Income Taxes
The Company accounts for income taxes under FASB ASC740, *Income Taxes* (ASC740). FASB ASC740 requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statement and tax basis of assets and liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carryforwards. FASB ASC740 additionally requires a valuation allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not be realized.
FASB ASC740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprises financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. FASB ASC740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim period, disclosure and transition. Based on the Companys evaluation, it has been concluded that there are no significant uncertain tax positions requiring recognition in the Companys financial statement. Since the Company was incorporated on July11, 2025, the evaluation was performed for the upcoming 2025 tax year which will be the only period subject to examination.
The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of December 31, 2025. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. There are no taxes in the Cayman Islands, and accordingly, income taxes are not levied on the Company. Consequently, income taxes are not reflected in the Companys financial statement.
F-10
BLUEROCK ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2025
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 FASB ASC 480-10-S99, the Company classifies public shares subject to redemption outside of permanent equity as the redemption provisions are not solely within the control of the Company. The Company recognizes changes in redemption value immediately as they occur and will adjust the carrying value of redeemable shares to equal the redemption value at the end of each reporting period. Immediately upon the closing of the Initial Public Offering, the Company recognized the accretion from initial book value to redemption value. The change in the carrying value of redeemable shares will result in charges against additional paid-in capital (to the extent available) and then to accumulated deficit. Accordingly, as of December 31, 2025, Class A ordinary shares subject to possible redemption are presented at redemption value as temporary equity, outside of the shareholders deficit section of the Companys balance sheet. As of December 31, 2025, the Class A ordinary shares subject to possible redemption reflected in the balance sheet are reconciled in the following table:
| Gross proceeds | | $ | 172,500,000 | | |
| Less: | | | | | |
| Proceeds allocated to Public Warrants | | | (2,254,000 | ) | |
| Public Shares issuance cost | | | (10,801,935 | ) | |
| Plus: | | | | | |
| Remeasurement of carrying value to redemption value | | | 13,294,609 | | |
| Class A ordinary shares subject to possible redemption, December 31, 2025 | | $ | 172,738,674 | | |
Net Income per Ordinary Share
The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, Earnings Per Share. Net income per ordinary share is computed by dividing net income by the weighted average number of shares of ordinary shares outstanding for the period. The Company has two classes of ordinary shares, which are referred to as ClassA ordinary Shares and ClassB ordinary shares. Accretion associated with the redeemable shares of ClassA Ordinary Shares is excluded from income per ordinary share as the redemption value approximates fair value.
The following table reflects the calculation of basic and diluted net income per ordinary share (in dollars, except per share amounts):
| | | For the Period from July 11, 2025 (Inception) Through December 31, 2025 | | |
| | | ClassA | | | ClassB | | |
| Basic net income per ordinary share | | | | | | | |
| Basic net income per ordinary share | | | | | | | |
| Numerator: | | | | | | | |
| Allocation of net income, as adjusted | | $ | 24,343 | | | $ | 65,306 | | |
| Denominator: | | | | | | | | | |
| Basic weighted average shares outstanding | | | 1,894,509 | | | | 5,082,370 | | |
| Basic net income per ordinary share | | $ | 0.01 | | | $ | 0.01 | | |
| | | For the Period from July 11, 2025 (Inception) Through December 31, 2025 | | |
| | | ClassA | | | ClassB | | |
| Diluted net income per ordinary share | | | | | | | |
| Diluted net income per ordinary share | | | | | | | |
| Numerator: | | | | | | | | | |
| Allocation of net income, as adjusted | | $ | 23,294 | | | $ | 66,355 | | |
| Denominator: | | | | | | | | | |
| Diluted weighted average shares outstanding | | | 1,894,509 | | | | 5,396,552 | | |
| Diluted net income per ordinary share | | $ | 0.01 | | | $ | 0.01 | | |
F-11
BLUEROCK ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2025
Fair Value of Financial Instruments
The fair value of the Companys assets and liabilities, which qualify as financial instruments under FASB ASC Topic820, *Fair Value Measurement*, approximates the carrying amounts represented in the accompanying balance sheet, primarily due to their short-term nature.
Warrants
The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrants specific terms and applicable authoritative guidance in FASB ASC Topic480, *Distinguishing Liabilities from Equity* (ASC480), and FASB ASC815. The assessment considers whether the warrants are freestanding financial instruments pursuant to FASB ASC480, meet the definition of a liability pursuant to FASB ASC480, and whether the warrants meet all of the requirements for equity classification under FASB ASC815, including whether the warrants are indexed to the Companys own ordinary shares, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.
For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded as liabilities at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the statement of operations.
The warrants are not precluded from equity classification and were accounted for as such on the date of issuance and each balance sheet date thereafter. There are 5,750,000 Public Warrants and 4,500,000 Private Placement Warrants currently outstanding as of December 31, 2025.
Share-Based Compensation
The Company records share-based compensation in accordance with FASB ASC Topic 718, *Compensation-Stock Compensation* (ASC 718), guidance to account for its share-based compensation. It defines a fair value-based method of accounting for an employee share option or similar equity instrument. The Company recognizes all forms of share-based payments at their fair value on the grant date, which are based on the estimated number of awards that are ultimately expected to vest. Share-based payments are valued using the Monte Carlo model. Grants of share-based payment awards issued to non-employees for services rendered have been recorded at the fair value of the share-based payment, which is the more readily determinable value. The grants are amortized on a straight-line basis over the requisite service periods, which is generally the vesting period. If an award is granted, but vesting does not occur, any previously recognized compensation cost is reversed in the period related to the termination of service. Share-based compensation expenses are included in costs and operating expenses depending on the nature of the services provided in the statement of operations.
Recent Accounting Standards
Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Companys financial statements.
NOTE 3. INITIAL PUBLIC OFFERING
Pursuant to the closing of the Initial Public Offering on December 12, 2025, the Company sold 17,250,000Units,including 2,250,000 Units for the full close of the underwriters overallotment option, at a purchase price of $10.00 per Unit, generating gross proceeds of $172,500,000. Each Unit consists of one ClassA ordinary share and one-third of one redeemable warrant (Public Warrant). Each whole Public Warrant entitles the holder to purchase one ClassA ordinary share at an exercise price of $11.50 per share, subject to adjustment (see Note7).
NOTE 4. PRIVATE PLACEMENT
Simultaneously with the closing of the Initial Public Offering on December 12, 2025, the Sponsor and the underwriters purchased 4,500,000 Private Placement Warrants at a price of $1.00 per Private Placement Warrant, generating gross proceeds of $4,500,000. Of those 4,500,000 Private Placement Warrants, the Sponsor purchased 3,000,000 Private Placement Warrants and Cantor purchased 1,500,000 Private Placement Warrants. If the Company does not complete a Business Combination, the proceeds from the sale of the Private Placement Warrants held in the Trust Account will be used to fund the redemption of the Public Shares (subject to the requirements of applicable law) and the Private Placement Warrants will expire worthless.
F-12
BLUEROCK ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2025
NOTE 5. RELATED PARTY TRANSACTIONS
Founder Shares
On July23, 2025, the Sponsor was issued 7,666,667 ClassB ordinary shares (the Founder Shares) for an aggregate price of $25,000, or approximately $0.003 per share, paid to cover certain expenses on behalf of the Company. On October 1, 2025, the Sponsor surrendered 1,916,667 Founder Shares for no consideration. On October 29, 2025, the Sponsor transferred 60,000 Founder Shares to the independent directors, resulting in the Sponsor holding 5,690,000 of the total 5,750,000 Founder Shares. All share and per share data have been retrospectively presented. The Founder Shares include an aggregate of up to 750,000 ClassB ordinary shares that were subject to forfeiture by the Sponsor to the extent that the underwriters over-allotment option was not exercised in full or in part, so that the Sponsor would own, on an as-converted basis, 25% of the Companys issued and outstanding shares after the Initial Public Offering. On December 12, 2025, the underwriters exercised their over-allotment option in full as part of the closing of the Initial Public Offering. As a result, the 750,000 Founder Shares are no longer subject to forfeiture by the Sponsor.
On October 29, 2025, the Sponsor assigned and transferred an aggregate of 60,000 Founder Shares to the two independent directors of the Company in exchange for their services as independent directors through the Companys initial Business Combination. The Founder Shares will remain with the Sponsor if the independent directors are no longer serving the Company prior to the initial Business Combination. The Founder Share transfer is within the scope of FASB ASC 718. Under FASB ASC 718, stock-based compensation associated with equity classified awards is measured at fair value upon the assignment date. The total fair value of the 60,000 Founder Shares on October 29, 2025 was $187,140 or $3.12 per share. The Company established the initial fair value of the Founder Shares on October 29, 2025, the date of the grant agreement, using a calculation prepared by a third party valuation team which takes into consideration a risk-free rate of 3.95%, implied market adjustment of 31.7%, and underlying stock price of $9.87. The Founder Shares were assigned subject to a performance condition (i.e., providing services through Business Combination). Stock-based compensation would be recognized at the date a Business Combination is considered probable (i.e., upon consummation of a Business Combination) in an amount equal to the number of Founder Shares times the assignment date fair value per share (unless subsequently modified) less the amount initially received for the assignment of the Founder Shares. As of December 31, 2025, the Company determined that the initial Business Combination is not considered probable and therefore no compensation expense has been recognized.
The Founder Shares are designated as ClassB ordinary shares and, except as described below, are identical to the ClassA ordinary shares included in the units being sold in the Initial Public Offering, and holders of Founder Shares have the same shareholder rights as public shareholders, except that (i)the Founder Shares are subject to certain transfer restrictions, as described in more detail below, (ii)the Founder Shares are entitled to registration rights, (iii)in connection with their receipt of Founder Shares and/or Private Placement Warrants and their appointment as directors and/or officers, as applicable, the Companys Sponsor, officers and directors have entered into a letter agreement with the Company, pursuant to which they have agreed, for no additional consideration, to (A)waive their redemption rights with respect to their Founder Shares and public shares in connection with the completion of the Companys initial Business Combination, (B)waive their redemption rights with respect to their Founder Shares and public shares in connection with a shareholder vote to approve an amendment to the Companys amended and restated memorandum and articles of association (1)to modify the substance or timing of the Companys obligation to allow redemption in connection with the Companys initial Business Combination or to redeem 100% of the Companys public shares if the Company has not consummated an initial Business Combination within the completion window or (2)with respect to any other material provisions relating to shareholders rights or pre-initial Business Combination activity, (3)waive their rights to liquidating distributions from the Trust Account with respect to their Founder Shares if the Company fails to complete the Companys initial Business Combination within the completion window, although they will be entitled to liquidating distributions from the Trust Account with respect to any public shares they hold if the Company fails to complete the initial Business Combination within such time period and to liquidating distributions from assets outside the Trust Account and (4)vote any Founder Shares held by them and any public shares purchased during or after the Initial Public Offering (including in open market and privately negotiated transactions) in favor of the initial Business Combination, (iv)the Founder Shares are automatically convertible into ClassA ordinary shares immediately prior to, concurrently with or immediately following the consummation of the Companys initial Business Combination or at any time prior thereto at the option of the holder on a one-for-one basis, subject to adjustment as described herein and in the amended and restated memorandum and articles of association, and (v)prior to the closing of the Companys initial Business Combination, only holders of ClassB ordinary shares will be entitled to vote on the appointment and removal of directors or continuing in a jurisdiction outside the Cayman Islands (including any special resolution required to amend the constitutional documents or to adopt new constitutional documents, in each case, as a result of approving a transfer by way of continuation to a jurisdiction outside the Cayman Islands).
F-13
BLUEROCK ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2025
The Founder Shares will automatically convert into ClassA ordinary shares immediately prior to, concurrently with or immediately following the consummation of the initial business combination or at any time prior thereto at the option of the holder on a one-for-one basis, subject to adjustment for share subdivisions, share capitalizations, reorganizations, recapitalizations and the like, and subject to further adjustment as provided herein. In the case that additional ClassA ordinary shares, or any other equity-linked securities, are issued or deemed issued in excess of the amounts sold in the 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, 25% 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 and Cantor), plus (ii)all ClassA ordinary shares and equity-linked securities issued or deemed issued in connection with the Companys initial Business Combination (excluding any shares or equity-linked securities issued, or to be issued, to any seller in the initial Business Combination and any private placement-equivalent warrants issued to the Companys Sponsor or any of its affiliates or to the Companys officers and directors upon conversion of working capital loans) minus (iii)any redemptions of ClassA ordinary shares by public shareholders in connection with an initial Business Combination; provided that such conversion of Founder Shares will never occur on a less than one-for-one basis.
With certain limited exceptions, the Founder Shares are not transferable, assignable or saleable (except to the Companys officers and directors and other persons or entities affiliated with the Companys Sponsor, each of whom will be subject to the same transfer restrictions) until the earlier of (A)180 days after the completion of the Companys initial Business Combination or earlier if, subsequent to the initial Business Combination, the last sale price of the Class A ordinary shares 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 30-trading day period commencing after the closing of the initial Business Combination, and (B)the date following the completion of the Companys initial Business Combination on which the Company completes a liquidation, merger, share exchange or other similar transaction that results in all of the Companys shareholders having the right to exchange their ClassA ordinary shares for cash, securities or other property. Up to 750,000 Founder Shares will be surrendered to the Company for no consideration depending on the exercise of the over-allotment option.
Promissory NoteRelated Party
On July23, 2025, the Sponsor agreed to loan the Company an aggregate of up to $300,000 to cover expenses related to the Initial Public Offering pursuant to a promissory note (the Promissory Note). This loan was non-interest bearing and payable on the earlier of December31, 2025 or the date on which the Company consummates the Initial Public Offering of its securities. On December 12, 2025, the Company had borrowed $300,000 under the Promissory Note which was fully settled simultaneously with the closing of the Initial Public Offering. Borrowing against the Promissory Note is no longer available.
Administrative Support Agreement
The Companys Sponsor agreed, commencing on December 10, 2025, the effective date of the Initial Public Offering, through the earlier of the Companys consummation of a Business Combination and its liquidation, to make available to the Company certain general and administrative services, including office space, utilities and administrative services, as the Company may require from time to time. The Company has agreed to pay to the Sponsor $20,000 per month for up to twelve months during the 24-month period to complete a Business Combination. Upon completion of the initial Business Combination or liquidation, the Company will cease paying these monthly fees. For the period from July11, 2025 (inception) through December 31, 2025, the Company incurred and paid $14,667 in fees for these services.
Related Party Loans
In order to finance transaction costs in connection with the initial Business Combination, the Sponsor or an affiliate of the Sponsor or certain of the Companys officers and directors may, but are not obligated to, loan the Company funds as may be required. If the Company completes the initial Business Combination, the Company will repay such loaned amounts. In the event that the initial Business Combination does not close, the Company may use a portion of the working capital held outside the Trust Account to repay such loaned amounts, including the repayment of loans from the Sponsor to pay for any amount deposited to pay for any extension of the time to complete the initial Business Combination, but no proceeds from the Trust Account would be used for such repayment. Up to $1,500,000 of such loans may be convertible into Warrants, at a price of $1.00 per warrant at the option of the lender, upon consummation of the initial Business Combination. The Warrants would be identical to the Private Placement Warrants. The terms of such loans by the Companys officers and directors, if any, have not been determined and no written agreements exist with respect to such loans. There are no such outstanding related party loans as of December 31, 2025.
F-14
BLUEROCK ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2025
NOTE 6. COMMITMENTS
Registration and Shareholder Rights Agreement
The holders of the (i)Founder Shares, which were issued in a private placement prior to the closing of the Initial Public Offering, (ii)Private Placement Warrants which were issued in a private placement simultaneously with the closing 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 the Companys securities held by them and any other securities of the company acquired by them prior to the consummation of the Companys initial Business Combination pursuant to a registration rights agreement 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 Companys completion of the Companys initial Business Combination. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
Underwriting Agreement
Pursuant to the underwriting agreement dated December 12, 2025, the Sponsor and the executive officers and directors have agreed that, for a period of 180days from the date of the Initial Public Offering, they will not, without the prior written consent of the representatives, offer, sell, contract to sell, pledge, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend or otherwise transfer or dispose of, directly or indirectly, any units, warrants, ordinary shares or any other securities convertible into, or exercisable or exchangeable for, any units, ordinary shares, Founder Shares or warrants, subject to certain exceptions. The representatives in their discretion may release any of the securities subject to these lock-up agreements at any time without notice, other than in the case of the officers and directors, which shall be with notice. The Sponsor, officers and directors are also subject to separate transfer restrictions on their Founder Shares and Private Placement Warrants pursuant to the letter agreement described herein.
The Company granted the underwriters a 45-day option from the date of the Initial Public Offering to purchase up to 2,250,000 additional Unitsto cover over-allotments, if any, at the Initial Public Offering price less the underwriting discounts and commissions. On December 12, 2025, the underwriters exercised their over-allotment option, closing on the 2,250,000 additional units simultaneously with the Initial Public Offering.
The underwriters were paid in cash an underwriting discount of $3,000,000 simultaneously at the closing of the Initial Public Offering. In addition, the underwriters are entitled to a deferred fee of $0.60 per Unit, or $7,350,000 in the aggregate. The deferred fee will become payable to the underwriters from the amounts held in the Trust Account solely in the event that the Company completes a Business Combination.
NOTE 7. SHAREHOLDERS DEFICIT
**
*Preference shares*The Company is authorized to issue 5,000,000 preference shares with a par value of $0.0001 per share, with such designations, voting and other rights and preferences as may be determined from time to time by the Companys board of directors. As of December 31, 2025, there were no preference shares issued or outstanding.
**
*ClassA ordinary shares*The Company is authorized to issue 500,000,000 ClassA ordinary shares with a par value of 0.0001 per share. Holders of the Companys ClassA ordinary shares are entitled to one vote for each share. As of December 31, 2025, there were no ClassA ordinary shares issued or outstanding, excluding the 17,250,000 shares subject to possible redemption.
*ClassB ordinary shares*The Company is authorized to issue 50,000,000 ClassB ordinary shares with a par value of 0.0001 per share. Holders of the Companys ClassB ordinary shares are entitled to one vote for each share. As of December 31, 2025, there were 5,750,000 ClassB ordinary shares outstanding. Of the 5,750,000 ClassB ordinary shares outstanding, up to 750,000shares were subject to forfeiture to the Company by the Sponsor for no consideration to the extent that the underwriters over-allotment option was not exercised in full or in part, so that the initial shareholders would collectively own 25% of the Companys issued and outstanding ordinary shares after the Initial Public Offering. On December 12, 2025, the underwriters exercised their over-allotment option in full as part of the closing of the Initial Public Offering. As a result, 750,000 Founder Shares are no longer subject to forfeiture by the Sponsor.
Ordinary shareholders of record are entitled to one vote for each share held on all matters to be voted on by shareholders. Except as described below, holders of ClassA ordinary shares and holders of ClassB ordinary shares will vote together as a single class on all matters submitted to a vote of the Companys shareholders except as required by law. Prior to the closing of the initial Business Combination, only holders of ClassB ordinary shares (i)will have the right to appoint and remove directors prior to or in connection with the completion of the initial Business Combination and (ii)will be entitled to vote on continuing the Company in a jurisdiction outside the Cayman Islands (including any special resolution required to amend constitutional documents or to adopt new constitutional documents, in each case, as a result of approving a transfer by way of continuation to a jurisdiction outside the Cayman Islands). On any other matters submitted to a vote of shareholders prior to or in connection with the completion of the initial Business Combination, holders of the ClassB ordinary shares and holders of the ClassA ordinary shares will vote together as a single class, except as required by law.
F-15
BLUEROCK ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2025
The Founder Shares will automatically convert into ClassA ordinary shares immediately prior to, concurrently with or immediately following the consummation of a Business Combination, and may be converted at any time prior to the Business Combination, at the option of the holder, on a one-for-one basis (unless otherwise provided in the Business Combination agreement), subject to adjustment for share subdivisions, share dividends, reorganizations, recapitalizations and the like, and subject to further adjustment as provided herein. In the case that additional ClassA ordinary shares or equity-linked securities are issued or deemed issued in connection with the Business Combination, the number of ClassA ordinary shares issuable upon conversion of all Founder Shares will equal, in the aggregate, on an as-converted basis, approximately 25% of the sum of (i)the total number of all 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 and the underwriters), plus (ii)all ClassA ordinary shares and equity-linked securities issued or deemed issued in connection with 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 the Companys officers and directors upon conversion of working capital loans) minus (iii)any redemptions of ClassA ordinary shares by public shareholders prior to or in connection with an initial Business Combination.
**
*Warrants*As of December 31, 2025, there were 10,250,000 warrants outstanding, including 5,750,000 of Public Warrants and 4,500,000 of Private Placement Warrants. Each whole Public Warrant entitles the registered holder to purchase one ClassA ordinary share at a price of $11.50 per share, subject to adjustment as discussed below, at any time commencing 30days after the completion of the initial Business Combination. Pursuant to the warrant agreement, a warrant holder may exercise its Public Warrants only for a whole number of ClassA ordinary shares. No fractional Public Warrants will be issued upon separation of the units and only whole Public Warrants will trade. The Public Warrants will expire fiveyears after the completion of the initial Business Combination, at 5:00p.m., NewYork City time, or earlier upon redemption or liquidation.
The Company has agreed that as soon as practicable, but in no event later than 20businessdays after the closing of the initial Business Combination, the Company will use commercially reasonable efforts to file with the SEC a post-effective amendment to the registration statement filed in connection with the Initial Public Offering or a new registration statement covering the registration, under the Securities Act, of the ClassA ordinary shares issuable upon exercise of the warrants and thereafter will use the Companys commercially reasonable efforts to cause the same to become effective within 60businessdays following the initial Business Combination and to maintain a current prospectus relating to the ClassA ordinary shares issuable upon exercise of the warrants, until the expiration of the warrants in accordance with the provisions of the warrant agreement. If a registration statement covering the ClassA ordinary shares issuable upon exercise of the warrants is not effective by the sixtieth (60)businessday after the closing of the initial Business Combination, warrant holders may, until such time as there is an effective registration statement and during any period when the Company will have failed to maintain an effective registration statement, exercise warrants on a cashless basis in accordance with Section3(a)(9)of the Securities Act or another exemption.
Once the warrants become exercisable, the Company may call the warrants for redemption for cash:
| | in whole and not in part; | |
| | at a price of $0.01 per warrant; | |
| | upon a minimum of 30days prior written notice of redemption; | |
| | if, and only if, the closing price of the ClassA ordinary shares equals or exceeds $18.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading Warrants) for any 20tradingdays within a 30-tradingday period commencing at least 30days after completion of the Companys initial Business Combination and ending threebusinessdays before the Company sends the notice of redemption to the warrant holders. | |
If and when the warrants become redeemable by the Company for cash, the Company may exercise the redemption right even if the Company is unable to register or qualify the underlying securities for sale under all applicable state securities laws.
F-16
BLUEROCK ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2025
In addition, if (x)the Company issues additional ClassA ordinary shares or equity-linked securities for capital raising purposes in connection with the closing of the initial Business Combination at an issue price or effective issue price of less than $9.20 per ClassA ordinary shares (with such issue price or effective issue price to be determined in good faith by the Companys board of directors and, in the case of any such issuance to the initial shareholders or their affiliates, without taking into account any Founder Shares or Private Placement Shares held by the initial shareholders or such affiliates, as applicable, prior to such issuance) (the Newly Issued Price), (y)the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of the initial Business Combination on the date of the consummation of the initial Business Combination (net of redemptions), and (z)the volume weighted average trading price of the ClassA ordinary shares during the 20tradingday period starting on thetradingday after theday on which the Company consummates the initial Business Combination (such price, the Market Value) is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price, and the $18.00 per share redemption trigger price will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price.
The Private Placement Warrants (including the ClassA ordinary shares issuable upon exercise of the Private Placement Warrants) will not be transferable, assignable or salable until 30days after the completion of the initial Business Combination. The Private Placement Warrants have terms and provisions that are identical to those of the Public Warrants being sold as part of the units in the Initial Public Offering.
NOTE 8. SEGMENT INFORMATION
FASB ASC Topic280, *Segment Reporting*, establishes standards for companies to report in their financial statement information about operating segments, products, services, geographic areas, and major customers. Operating segments are defined as components of an enterprise that engage in business activities from which it may recognize revenues and incur expenses, and for which separate financial information is available that is regularly evaluated by the Companys CODM, or group, in deciding how to allocate resources and assess performance.
The Companys CODM has been identified as the Chief Executive Officer, who reviews the 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 reporting segment.
The CODM assesses performance for the single segment and decides how to allocate resources based on net income or loss, which is presented on the statement of operations as net income or loss. The measure of segment assets is reported on the balance sheet as total assets. When evaluating the Companys performance and making key decisions regarding resource allocation the CODM reviews several key metrics, which include the following:
| | | As of December31, 2025 | | |
| Cash | | $ | 693,561 | | |
| Cash and securities held in Trust Account | | $ | 172,738,674 | | |
| | | For the Period from July 11, 2025 (Inception) through December31, 2025 | | |
| General and administrative costs | | $ | 149,025 | | |
The CODM reviews general and administrative costs to manage and forecast cash to ensure enough capital is available to complete a Business Combination or similar transaction within the Business Combination period. The CODM also reviews general and administrative costs to manage, maintain and enforce all contractual agreements to ensure costs are aligned with all agreements and budget. General and administrative costs, as reported on the statement of operations, are the significant segment expenses provided to the CODM on a regular basis.
The CODM reviews the position of total assets as reported in the Companys balance sheet to assess if the Company has sufficient resources available to discharge its liabilities. The CODM is provided with details of cash and liquid resources available with the Company.
F-17
BLUEROCK ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2025
NOTE 9. FAIR VALUE MEASUREMENTS
Fair value is defined as the price that would be received for sale of an asset or paid for transfer of a liability in an orderly transaction between market participants at the measurement date. U.S. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include:
| | Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets; | |
| | Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and | |
| | Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. | |
In some circumstances, the inputs used to measure fair value might be categorized within different levels of the fair value hierarchy. In those instances, the fair value measurement is categorized in its entirety in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement.
The fair value of the Public Warrants is $2,254,000 or $0.39 per Public Warrant. The fair value of Public Warrants was determined using Monte Carlo Simulation Model. The Public Warrants have been classified within shareholders deficit and will not require remeasurement after issuance. The following table presents the quantitative information regarding market assumptions used in the Level 3 valuation of the Public Warrants:
| | | December12, 2025 | | |
| Underlying stock price | | $ | 9.86 | | |
| Exercise price | | $ | 11.50 | | |
| Volatility | | | 5.0 | % | |
| Remaining term (years) | | | 7.00 | | |
| Risk-free rate | | | 3.87 | % | |
| Implied market adjustment | | | 32.3 | % | |
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, the Company did not identify any subsequent events that would have required adjustment or disclosure in the financial statements.
F-18