Filed 2026-03-31 · Period ending 2025-12-31 · 69,737 words · SEC EDGAR
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# Cal Redwood Acquisition Corp. (CRAQ) — 10-K
**Filed:** 2026-03-31
**Period ending:** 2025-12-31
**Accession:** 0001213900-26-037519
**Source:** [SEC EDGAR](https://www.sec.gov/Archives/edgar/data/2058359/000121390026037519/)
**Origin leaf:** 4cd406e8ba1ac5ef2ef0acbeea52fd353d6e1b8d560073bf8d0720bac0a399fe
**Words:** 69,737
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**
UNITED STATES**
**SECURITIES AND EXCHANGE COMMISSION**
**Washington, D.C. 20549**
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**FORM 10-K**
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**ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**
**For the fiscal year ended December 31, 2025**
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**OR**
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**TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**
**For the transition period fromto**
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**Cal Redwood Acquisition Corp.**
**(Exact name of registrant as specified in its
charter)**
| Cayman Islands | | 001-42665 | | N/A | |
| (State or other jurisdiction of incorporation or organization) | | (Commission File Number) | | (I.R.S. Employer Identification Number) | |
| 2440 Sand Hill Road, Suite 101 Menlo Park, CA | | 94025 | |
| (Address of principal executive offices) | | (Zip Code) | |
**(415)692-7762**
**(Registrants telephone number, including
area code)**
**Not Applicable**
**(Former name, former address and former fiscal
year, if changed since last report)**
**Securities registered pursuant to Section 12(b)
of the Act:**
| Title of Each Class: | | Trading Symbol: | | Name of Each Exchange on Which Registered: | |
| Units, each consisting of one Class A Ordinary Share and one Right | | CRAQU | | The Nasdaq Stock Market LLC | |
| Class A Ordinary Shares, par value $0.0001 per share | | CRA | | The Nasdaq Stock Market LLC | |
| Rights, each Right to acquire one-tenth (1/10) of one Class A Ordinary Share | | CRAQR | | The Nasdaq Stock Market LLC | |
**Securities registered pursuant to Section 12(g)
of the Exchange Act: None**
Indicate by check mark if the Registrant is a
well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes
No
Indicate by check mark if the Registrant is not
required to file reports pursuant to Section 13 or 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 such files). Yes
No
Indicate by check mark whether the registrant
is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company.
See 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
As of June 30, 2025, the aggregate
market value of the common stock, par value $0.0001 per share, of the Registrant held by non-affiliates of the registrant was $229,310,000
based on the $9.97 closing sale price of the Registrants common stock on such date.
As of March 31, 2026, there were 23,660,000
Class A ordinary shares, $0.0001 par value and 7,665,900 Class B ordinary shares, $0.0001 par value, issued and outstanding.
| | |
**TABLE OF CONTENTS**
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PART I |
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Item 1. |
Business. |
1 | |
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Item 1A. |
Risk Factors. |
17 | |
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Item 1B. |
Unresolved Staff Comments. |
58 | |
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Item 1C. |
Cybersecurity. |
58 | |
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Item 2. |
Properties. |
58 | |
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Item 3. |
Legal Proceedings. |
58 | |
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Item 4. |
Mine Safety Disclosures. |
58 | |
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PART II |
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Item 5. |
Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. |
59 | |
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Item 6. |
[Reserved] |
60 | |
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Item 7. |
Managements Discussion and Analysis of Financial Condition and Results of Operations. |
60 | |
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Item 7A. |
Quantitative and Qualitative Disclosures About Market Risk. |
62 | |
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Item 8. |
Financial Statements and Supplementary Data. |
62 | |
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Item 9. |
Changes in and Disagreements With Accountants on Accounting and Financial Disclosure. |
63 | |
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Item 9A. |
Controls and Procedures. |
63 | |
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Item 9B. |
Other Information. |
63 | |
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Item 9C. |
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections. |
63 | |
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PART III |
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Item 10. |
Directors, Executive Officers and Corporate Governance. |
64 | |
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Item 11. |
Executive Compensation. |
69 | |
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Item 12. |
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. |
70 | |
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Item 13. |
Certain Relationships and Related Transactions, and Director Independence. |
71 | |
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Item 14. |
Principal Accountant Fees and Services. |
74 | |
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PART IV |
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Item 15. |
Exhibits and Financial Statement Schedules. |
75 | |
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Item 16. |
Form 10-K Summary. |
76 | |
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SIGNATURES |
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77 | |
i
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**CERTAIN TERMS**
Unless otherwise stated in this Annual Report on Form 10-K (Annual
Report) or unless the context otherwise requires, references to:
|
| amended and restated
memorandum and articles of association are to our amended and restated memorandum and articles of association in effect as of
the date hereof; |
|
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| Cohen are to
Cohen & Company Capital Markets, a division of Cohen & Company Securities, LLC, a representative of the underwriters in the initial
public offering; |
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| Companies Act
are to the Companies Act (As Revised) of the Cayman Islands as the same may be amended from time to time; |
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| directors are
to our directors named in this Annual Report; |
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| founder shares
are to Class B ordinary shares initially purchased by our sponsor in a private placement prior to our initial public offering and the
Class A ordinary shares that will be issued upon the automatic conversion of the Class B ordinary shares at the time of our initial business
combination or earlier at the option of the holders thereof as described herein (for the avoidance of doubt, such Class A ordinary shares
will not be public shares); |
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| initial shareholders
are to sponsor and our four independent directors that held our founder shares prior or shortly after the initial public offering; |
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| initial public offering
are to our initial public offering, which was consummated on May 22, 2025. |
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| management or our management team
are to our directors and officers; |
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| non-managing sponsor investors means certain
investors (none of which are affiliated with any member of our management, our sponsor or any other investor) that indirectly purchased,
through the purchase of non-managing sponsor membership interests, an aggregate of 300,000 of the private placement units at a price
of $10.00 per unit ($3,000,000 in the aggregate) in a private placement that closed simultaneously with the closing of our initial public
offering. Subject to the non-managing sponsor investors purchasing, through the sponsor, the private placement units allocated to them
simultaneously with the closing of our initial public offering, the sponsor issued membership interests at a nominal purchase price to
the non-managing sponsor investors reflecting their interest in an aggregate of 2,400,000 founder shares held by the sponsor; however,
the non-managing sponsor investors have no right to vote the founder shares, private placement units or securities underlying the private
placement units that they hold indirectly through their membership interests in the sponsor; |
|
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| ordinary shares
are to our Class A ordinary shares and our Class B ordinary shares; |
|
ii
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| private placement rights are to the Share Rights
included in the private placement units; |
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| private placement shares are to the Class A
ordinary shares included in the private placement units; |
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| private placement units are to the units, each
unit consisting of one Class A ordinary share and one Share Right, at a price of $10.00 per unit, issued to our sponsor in a private
placement simultaneously with the closing of our initial public offering; |
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| public shares are to Class A ordinary shares
sold as part of the units in our initial public offering (whether they were purchased in our initial public offering or thereafter in
the open market); |
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| public shareholders are to the holders of our
public shares, including our initial shareholders, management team or advisors, to the extent our initial shareholders, members of our
management team and/or advisors purchase public shares, provided that each initial shareholders, member of our management teams
or advisors status as a public shareholder will only exist with respect to such public shares; |
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| Seaport are to Seaport Global Securities LLC,
a representative of the underwriters in our initial public offering; |
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| Share Rights are to the rights to receive one
tenth (1/10) of a Class A ordinary share upon the consummation of an initial business combination which were sold as part of the units
in our initial public offering and the private placement; |
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| special resolution are to a resolution of the
company passed by at least a two-thirds (2/3) majority (or such higher approval threshold as specified in the companys amended
and restated memorandum and articles of association) of the votes cast by such shareholders as, being entitled to do so, vote in person
or, where proxies are allowed, by proxy at a general meeting of the company of which notice specifying the intention to propose the resolution
as a special resolution has been duly given, or a resolution approved in writing by all of the holders of the issued shares entitled
to vote on such matter (or such lower threshold as may be allowed under the Companies Act from time to time); and |
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| sponsor are to Cal Redwood sponsor LLC, Delaware
limited liability company. |
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| underwriters
are, collectively, to Cohen and Seaport; |
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| we, us,
our or our company are to Cal Redwood Acquisition Corp., a Cayman Islands exempted company; and |
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| $, US$
and U.S. dollar each refer to the United States dollar. |
|
****
iii
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**PART I**
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**CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS**
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Certain statements in this
Annual Report on Form 10-K (the Annual Report) 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 Annual Report may
include, for example, statements about:
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| our ability to complete our
initial business combination; |
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| our expectations around the
performance of the prospective target business or businesses; |
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| our success in retaining or
recruiting, or changes required in, our officers, key employees or directors following our initial business combination; |
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| our officers and directors
allocating their time to other businesses and potentially having conflicts of interest with our business or in approving our initial
business combination, as a result of which they would then receive expense reimbursements; |
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| our potential ability to obtain
additional financing to complete our initial business combination; |
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| the ability of our officers
and directors to generate a number of potential acquisition opportunities; |
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| our public securities
potential liquidity and trading; |
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| the lack of a market for our
securities; |
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| the use of proceeds not held
in the trust account 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 following
our initial public offering. |
|
The forward-looking statements
contained in this Annual Report 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 in the section of this Annual Report 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.
**ITEM 1. BUSINESS**
****
**Overview**
We are a blank check company incorporated on January7,
2025, as a Cayman Islands exempted company for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization
or similar business combination, which we refer to throughout this Annual Report as our business combination or initial
business combination, with one or more businesses or entities, which we refer to throughout this Annual Report as a target
business or target businesses. While we may pursue an initial business combination in any sector, we intend to focus
our efforts on businesses in the technology, media and telecommunications (TMT) sector as well as sectors that are being
transformed via technology disruption, where we believe our management teams operational and investment expertise will provide
us with a competitive advantage. We believe that our management team, which includes our executive officers and directors as discussed
below, is well-positionedto identify attractive business combination opportunities with a compelling industry backdrop, customer
proposition and market position, as well as multiple vectors to create value post-combination. However, we have not selected any specific
target business.
1
We have generated no revenues
to date and we do not expect that we will generate operating revenues until, at the earliest, we consummate our initial business combination.
Our management team is continuously made aware of potential business opportunities, one or more of which we may desire to pursue for an
initial business combination. However, we have not selected any specific target business.
On May 27, 2025, we consummated
our initial public offering of 23,000,000 units, which included the full exercise of the underwriters over-allotment option, at
$10.00 per unit, each unit consisting of one Class A ordinary share and one right entitling the holder thereof to receive one-tenth of
one Class A ordinary share upon the completion of our initial business combination, generating gross proceeds of $230,000,000. Simultaneously
with the closing of the initial public offering, we consummated the sale of 660,000 private placement units at a price of $10.00 per unit
in a private placement to the sponsor, Cohen, and Seaport, generating gross proceeds of $6,600,000. Following the closings of the initial
public offering and the private placement on May 27, 2025, an aggregate amount of $236,600,000 ($10.00 per unit) from the net proceeds
of the sale of the public units, and a portion of the net proceeds from the sale of the private placement units, was placed in the trust
account and held in demand deposit or cash accounts or invested only in U.S. government securities, within the meaning set forth in Section
2(a)(16) of the Investment Company Act, with a maturity of 185 days or less, or in any open-ended investment company that holds itself
out as a money market fund investing solely in U.S. Treasuries and meeting certain conditions under Rule 2a-7 of the Investment Company
Act, as determined by the company, until the earlier of (i) the completion of a business combination and (ii) the distribution of the
funds in the trust account to our shareholders. An aggregate of 23,660,000 units have been issued in the initial public offering at an
aggregate offering price of $236,600,000 from the net proceeds of the sale of the public units, and a portion of the net proceeds from
the sale of the private placement units, was placed in the trust account.
**
**Business Strategy**
We intend to specifically focus
on target businesses with sound business fundamentals that will contribute to the movement of digital transformation, especially, but
not exclusively within the TMT industries.
We seek to effectively employ
our management teams investment acumen, operational skills and experience, as well as their extensive networks to add value to
a target business. We believe that the experience of our management team can guide a target business through a number of growth and efficiency
initiatives, including attracting and retaining customers, up-sellingcustomers, strategically spending capital on research and development,
focusing sales and marketing initiatives, and inorganically rounding out product suites, among others. We will seek to generate returns
for our stockholders by applying the previously described operational rigor, all while focusing on profitable growth. We believe our management
team possesses the following tools necessary to drive profitable growth:
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| Expertise in advising, operating, and investing in TMT
businesses: Our management team has extensive experience in identifying disruptive companies with a high-growthprofile,
and operating and providing strategic advice to these companies as they continue to grow and transform society. We believe we can also
recruit top talent and use that intellectual capital to our competitive advantage. Specifically, Mr.Ranadiv pioneered efforts
in digitizing Wall Street, and applied similar technologies through TIBCO to provide a digital transformation platform to a wide range
of industries, including financial services, telecommunications, energy, manufacturing, logistics and transportation, healthcare and
others. He grew TIBCO to have over $1billion in annual revenue as a public company and an equity value of $4.3billion at
the time of TIBCOs sale in 2014. Over his tenure, the company completed approximately 30 M&A transactions. As an operator
and leader, Mr.Ranadiv focused on organic and inorganic growth, building transformative products and technologies, creating
deep relationships across the ecosystem, and constructing a world class management team. |
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| Ability to mentor and support exceptional executives: The members of our management team have
served on the leadership teams and boards of directors of innovative, high-growthcompanies in North America, both within and
outside of the TMT ecosystem. |
|
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| Research and discoveries through academia: With our management teams connection to the
UC system through Bow Capital FundI, LP, we believe we are strategically positioned to draw from one of the worlds
leading public research university systems to identify and progress cutting edge technology. |
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|
| Product promotion: By potentially using our management teams network across Global
2000 companies and the sports and entertainment world, including athletes and entertainers, we believe we will be well positioned to
significantly increase brand value and product adoption rate of a target business through effective branding and marketing. |
|
2
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| Maximizing the value of becoming a publicly traded entity: As a public entity, we believe we
can offer a wide range of advantages to stakeholders. These include but are not limited to utilizing our management teams
collective skills and experience to catalyze accelerated, profitable growth, broader access to debt and equity capital providers,
liquidity alternatives for employees and early investors, alternate currency in the form of publicly traded stock for potential
acquisitions, and improved branding in the marketplace. Having collectively spent 15years leading a successful public company,
as well as leading successful privately owned companies and other entrepreneurial endeavors, certain of our executive officers have
acquired a wealth of information and best practices that we believe can help drive stockholder value. |
|
****
|
| Proprietary sourcing network: Following the completion of this offering, we will look to
communicate with our management teams network of relationships, which includes private equity firms, growth equity firms,
venture capitalists and entrepreneurs, to articulate the parameters for our search for a target business and a potential business
combination and begin the process of pursuing and reviewing potential opportunities. |
|
****
**Our Acquisition Process**
In evaluating a prospective
target business, we expect to conduct a due diligence review which may encompass, among other things, meetings with incumbent management
and employees, document reviews, interviews of customers and suppliers, inspection of facilities, as applicable, as well as a review of
financial, operational, legal and other information about the target and its industry 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 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 available for us to use to complete another business combination.
Because there are numerous
special purpose acquisition companies seeking to enter into an initial business combination with available targets, the competition for
available targets with attractive fundamentals or business models may increase, which could cause target companies to demand improved
financial terms. Attractive deals could also become scarcer for other reasons, such as economic or industry sector downturns (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-businesscombination. Thus, our ability to identify and evaluate a target
company may be impacted by significant competition among other special purpose acquisition companies in pursuing business combination
transaction candidates and significant competition may impact the attractiveness of the acquisition terms that we will be able to negotiate.
****
**Status as a Public Company**
We believe our structure will
make us an attractive business combination partner to target businesses. As an existing public company, we offer a target business an
alternative to the traditional initial public offering through a merger or other business combination with us. In a business combination
transaction with us, the owners of the target business may, for example, exchange their shares of stock or shares in the target business
for our ClassA ordinary shares (or shares of a new holding company) or for a combination of our ClassA ordinary shares and
cash, allowing us to tailor the consideration to the specific needs of the sellers. We believe target businesses will find this method
a more expeditious and cost effective method to becoming a public company than the typical initial public offering. The typical initial
public offering process takes a significantly longer period of time than the typical business combination transaction process, and there
are significant expenses and market and other uncertainties in the initial public offering process, including underwriting discounts and
commissions, marketing and road show efforts that may not be present to the same extent in connection with a business combination with
us.
Furthermore, once a proposed
initial business combination is completed, the target business will have effectively become public, whereas an initial public offering
is always subject to the underwriters ability to complete the offering, as well as general market conditions, which could delay
or prevent the offering from occurring or could have negative valuation consequences. Following an initial business combination, we believe
the target business would then have greater access to capital, an additional means of providing management incentives consistent with
shareholders interests and the ability to use its shares as currency for acquisitions. Being a public company can offer further
benefits by augmenting a companys profile among potential new customers and vendors and aid in attracting talented employees.
While we believe that our
structure and our management teams backgrounds will make us an attractive business partner, some potential target businesses may
view our status as a blank check company, such as our lack of an operating history and our ability to seek shareholder approval of any
proposed initial business combination, negatively.
We are an emerging
growth company, as defined in the JOBS Act. We will remain an emerging growth company until the earlier of (1)the lastday
of the fiscal year (a)following the fifth anniversary of the completion of our initial public offering, (b)in which we have
total annual gross revenue of at least $1.235billion, or (c)in which we are deemed to be a large accelerated filer, which
means the market value of our ClassA ordinary shares that is held by non-affiliatesexceeds $700million as of the prior
June30, and (2)the date on which we have issued more than $1.0billion in non-convertibledebt securities during
the prior three-yearperiod.
3
Additionally, we are a smaller
reporting company as defined in Item10(f)(1)of RegulationS-K.Smaller reporting companies may take advantage
of certain reduced disclosure obligations, including, among other things, providing only twoyears of audited financial statements.
We will remain a smaller reporting company until the lastday of the fiscal year in which (1)the market value of our ordinary
shares held by non-affiliatesis equal to or exceeds $250million as of the prior June30, or (2)our annual revenues
equaled or exceeded $100million during such completed fiscal year and the market value of our ordinary shares held by non-affiliatesis
equal to or exceeds $700million as of the prior June30th.
In addition, prior to the
consummation of a business combination, only holders of our ClassB 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 the Nasdaq Stock Market LLC (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.
****
**Financial Position**
With funds available for a
business combination initially in the amount of $220,800,000 assuming no redemptions and after payment of up to $9,200,000 of deferred
underwriting fees, we offer a target business a variety of options, such as creating a liquidity event for its owners, providing capital
for the potential growth and expansion of its operations or strengthening its balance sheet by reducing its debt ratio. Because we are
able to complete our initial business combination using our cash, debt or equity securities, or a combination of the foregoing, we have
the flexibility to use the most efficient combination that will allow us to tailor the consideration to be paid to the target business
to fit its needs and desires. However, we have not taken any steps to secure third party financing and there can be no assurance it will
be available to us.
****
**Effecting our Initial Business Combination**
We are not presently engaged
in, and we will not engage in, any operations for an indefinite period of time following our initial public offering. We intend to effectuate
our initial business combination using cash from the proceeds of our initial public offering and the private placement of the private
placement units, the proceeds of the sale of our shares in connection with our initial business combination (including pursuant to forward
purchase agreements or backstop agreements we may enter into following the consummation of our initial public offering or otherwise),
shares issued to the owners of the target, debt issued to bank or other lenders or the owners of the target, 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.
If our initial business combination
is paid for using equity or debt securities, or not all of the funds released from the trust account are used for payment of the consideration
in connection with our initial business combination or used for redemptions of our ClassA ordinary shares, we may use the balance
of the cash released to us from the trust account following the closing for general corporate purposes, including for maintenance or expansion
of operations of the post-transactioncompany, the payment of principal or interest due on indebtedness incurred in completing our
initial business combination, to fund the purchase of other companies, or for working capital.
We have not selected any business
combination target. We may pursue an initial business combination in any business or industry but expect to focus our efforts on businesses
in the TMT sector as well as sectors that are being transformed via technology disruption, where we believe our management teams
operational and investment expertise will provide us with a competitive advantage. Accordingly, there is no current basis for investors
in our initial public offering to evaluate the possible merits or risks of the target business with which we may ultimately complete our
initial business combination. Although our management will assess the risks inherent in a particular target business with which we may
combine, we cannot assure you that this assessment will result in our identifying all risks that a target business may encounter. Furthermore,
some of those risks may be outside of our control, meaning that we can do nothing to control or reduce the chances that those risks will
adversely affect a target business.
4
We may seek to raise additional
funds through a private offering of debt or equity securities in connection with the completion of our initial business combination and
we may effectuate our initial business combination using the proceeds of such offering rather than using the amounts held in the trust
account. In addition, we intend to target businesses with enterprise values that are greater than we could acquire with the net proceeds
of our initial public offering and the sale of the private placement units, and, as a result, if the cash portion of the purchase price
exceeds the amount available from the trust account, net of amounts needed to satisfy any redemptions by public shareholders, we may be
required to seek additional financing to complete such proposed initial business combination. Subject to compliance with applicable securities
laws, we would expect to complete such financing only simultaneously with the completion of our initial business combination. In the case
of an initial business combination funded with assets other than the trust account assets, our proxy materials or tender offer documents
disclosing the initial business combination would disclose the terms of the financing and, only if required by law, we would seek shareholder
approval of such financing. There is no limitation on our ability to raise funds through the issuance of equity or equity-linkedsecurities
or through loans, advances or other indebtedness in connection with our initial business combination, including pursuant to forward purchase
agreements or backstop agreements we may enter into following consummation of our initial public offering. At this time, we are not a
party to any arrangement or understanding with any third party with respect to raising any additional funds through the sale of securities
or otherwise. None of our sponsors, officers, directors or shareholders is required to provide any financing to us in connection with
or after our initial business combination.
****
**Sources of Target Businesses**
We anticipate that target
business candidates will be brought to our attention from various unaffiliated sources, including investment bankers and private investment
funds. Target businesses may be brought to our attention by such unaffiliated sources as a result of being solicited by us through calls
or mailings. These sources may also introduce us to target businesses in which they think we may be interested on an unsolicited basis,
since many of these sources will have read this Annual Report and know what types of businesses we are targeting. Our officers and directors,
as well as their affiliates, may also bring to our attention target business candidates of which they become aware through their business
contacts as a result of formal or informal inquiries or discussions they may have, as well as attending trade shows or conventions. In
addition, we expect to receive a number of proprietary deal flow opportunities that would not otherwise necessarily be available to us
as a result of the track record and business relationships of our officers and directors. While we do not presently anticipate engaging
the services of professional firms or other individuals that specialize in business acquisitions on any formal basis, we may engage these
firms or other individuals in the future, in which event we may pay a finders fee, consulting fee or other compensation to be determined
in an arms length negotiation based on the terms of the transaction.
Prior to or in connection
with the completion of our initial business combination, there may be payment by the company to our sponsor or a member of our management
team, or our or their affiliates, of a finders fee, advisory fee, consulting fee or success fee for any services they render in
order to effectuate the completion of our initial business, which, if made prior to the completion of our initial business combination,
will be paid from working capital.
We will engage a finder only
to the extent our management determines that the use of a finder may bring opportunities to us that may not otherwise be available to
us or if finders approach us on an unsolicited basis with a potential transaction that our management determines is in our best interest
to pursue. Payment of a finders fee is customarily tied to completion of a transaction, in which case any such fee will be paid
out of the funds held in the trust account.
We are not prohibited from
pursuing an initial business combination with a company that is affiliated with our sponsor, officers, directors, the non-managingsponsor
investors or any of their respective affiliates, or completing the business combination through a joint venture or other form of shared
ownership with our sponsor, officers or directors. In the event we seek to complete our initial business combination with a company that
is affiliated (as defined in our amended and restated memorandum and articles of association) with our sponsor, officers or directors,
we, or a committee of independent directors, will obtain an opinion from an independent investment banking firm or another independent
entity that commonly renders valuation opinions, stating that the consideration to be paid by us in such an initial business combination
is fair to our company from a financial point of view. We are not required to obtain such an opinion in any other context.
****
**Lack of Business Diversification**
For an indefinite period of
time after the completion of our initial business combination, the prospects for our success may depend entirely on the future performance
of a single business. Unlike other entities that have the resources to complete business combinations with multiple entities in one or
several industries, it is probable that we will not have the resources to diversify our operations and mitigate the risks of being in
a single line of business. In addition, we intend to focus our search for an initial business combination in a single industry. By completing
our initial business combination with only a single entity, our lack of diversification may:
|
| subject us to negative economic,
competitive, and regulatory developments, any or all of which may have a substantial adverse impact on the particular industry in which
we operate after our initial business combination, and |
|
|
| cause us to depend on the marketing
and sale of a single product or limited number of products or services. |
|
****
5
****
**Limited Ability to Evaluate the Targets
Management Team**
Although we intend to closely
scrutinize the management of a prospective target business when evaluating the desirability of effecting our initial business combination
with that business, our assessment of the target business management may not prove to be correct. In addition, the future management
may not have the necessary skills, qualifications, or abilities to manage a public company. Furthermore, the future role of members of
our management team or of our board, if any, in the target business cannot presently be stated with any certainty. While it is possible
that one or more of our directors will remain associated in some capacity with us following our initial business combination, it is presently
unknown if any of them will devote their full efforts to our affairs subsequent to our initial business combination.
Moreover, we cannot assure
you that members of our management team will have significant experience or knowledge relating to the operations of the particular target
business. The determination as to whether any members of our board of directors will remain with the combined company will be made at
the time of our initial business combination.
Following a business combination,
to the extent that we deem it necessary, we may seek to recruit additional managers to supplement the incumbent management team of the
target business. We cannot assure you that we will have the ability to recruit additional managers, or that additional managers will have
the requisite skills, knowledge or experience necessary to enhance the incumbent management.
****
**Shareholders May Not Have the Ability to Approve
our Initial Business Combination**
We may conduct redemptions
without a shareholder vote pursuant to the tender offer rules of the SEC subject to the provisions of our amended and restated memorandum
and articles of association. However, we will seek shareholder approval if it is required by law or applicable stock exchange rule, or
we may decide to seek shareholder approval for business or other reasons.
Under Nasdaqs listing
rules, shareholder approval would be required for our initial business combination if, for example:
|
| We issue ordinary shares that will be equal to or in excess
of 20% of the number of our ordinary shares then outstanding (other than in a public offering); |
|
|
| Any of our directors, officers or substantial shareholders
(as defined by Nasdaq rules) has a 5% or greater interest earned on the trust account (or such persons collectively have a 10% or greater
interest), directly or indirectly, in the target business or assets to be acquired or otherwise and the present or potential issuance
of ordinary shares could result in an increase in outstanding ordinary shares or voting power of 5% or more; or |
|
|
| The issuance or potential issuance of ordinary shares will
result in our undergoing a change of control. |
|
The decision as to whether
we will seek shareholder approval of a proposed business combination in those instances in which shareholder approval is not required
by applicable law or stock exchange listing requirements will be made by us, solely in our discretion, and will be based on business and
legal reasons, which include a variety of factors, including, but not limited to: (i)the timing of the transaction, including in
the event we determine shareholder approval would require additional time and there is either not enough time to seek shareholder approval
or doing so would place the company at a disadvantage in the transaction or result in other additional burdens on the company; (ii)the
expected cost of holding a shareholder vote; (iii)the risk that the shareholders would fail to approve the proposed business combination;
(iv)other time and budget constraints of the company; and (v)additional legal complexities of a proposed business combination
that would be time-consumingand burdensome to present to shareholders.
****
**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 ClassA ordinary shares, regardless of whether they abstain, vote for, or vote against,
our initial business combination, upon the completion of our initial business combination at a per-shareprice, payable in cash,
equal to the aggregate amount then on deposit in the trust account calculated as of twobusiness days prior to the consummation of
the initial business combination, including interest earned on the funds held in the trust account (net of taxes payable), divided by
the number of then-outstandingpublic 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. 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.
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 ClassA ordinary shares that are validly submitted for redemption
plus any amount required to satisfy cash conditions pursuant to the terms of the proposed initial business combination exceed the aggregate
amount of cash available to us, we will not complete the initial business combination or redeem any shares, and all ClassA ordinary
shares submitted for redemption will be returned to the holders thereof. We may, however, raise funds through the issuance of equity-linkedsecurities
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 consummation of our initial public offering, in order to, among other
reasons, satisfy such net tangible assets or minimum cash requirements.
6
**Manner of Conducting Redemptions**
****
We will provide our public
shareholders with the opportunity to redeem all or a portion of their ClassA ordinary shares upon the completion of our initial
business combination either (i)in connection with a general meeting called to approve the business combination or (ii)without
a shareholder vote by means of a tender offer. The decision as to whether we will seek shareholder approval of a proposed business combination
or conduct a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors such as the timing of
the transaction and whether the terms of the transaction would require us to seek shareholder approval under applicable law or stock exchange
listing requirement or whether we were deemed to be a foreign private issuer (which would require a tender offer rather than seeking shareholder
approval under SEC rules). Asset acquisitions and share purchases would not typically require shareholder approval while direct mergers
with our company (other than with a 90% subsidiary of ours) and any transactions where we issue more than 20% of our issued and outstanding
ordinary shares or seek to amend our amended and restated 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
ExchangeAct 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-thirdsof the votes cast by such shareholders as, being entitled to do so, vote in person or, where proxies
are allowed, by proxy at the applicable general meeting of the company, so long as we offer redemption in connection with such amendment.
If we provide our public shareholders
with the opportunity to redeem their public shares in connection with a general meeting, we will, pursuant to our amended and restated
memorandum and articles of association:
|
| conduct the redemptions in conjunction with a proxy solicitation
pursuant to Regulation14A of the Securities Exchange Act of 1934, as amended (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 receive an ordinary resolution under Cayman Islands law and our amended and
restated memorandum and articles of association, which requires the affirmative vote of at least a majority of the votes cast by 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. A quorum for such meeting will be present if the holders of at least one third of issued and outstanding shares entitled
to vote at the meeting are represented in person or by proxy. Our sponsor, officers and directors will count toward this quorum and, pursuant
to the letter agreement, our sponsor, officers and directors have agreed to vote their founder shares, private placement shares and any
public shares purchased during or after our initial public offering (including in open market and privately-negotiatedtransactions)
in favor of our initial business combination (except that any public shares such parties may purchase in compliance with the requirements
of Rule14e-5under the ExchangeAct would not be voted in favor of approving the business combination transaction). For
purposes of seeking approval of an ordinary resolution, non-voteswill have no effect on the approval of our initial business combination
once a quorum is obtained. Assuming that only the holders of one-thirdof our issued and outstanding ordinary shares, representing
a quorum under our amended and restated memorandum and articles of association vote their 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 a special resolution, which
requires the affirmative vote of at least two-thirdsof the votes cast by such shareholders as, being entitled to do so, vote in
person or, where proxies are allowed, by proxy at the applicable general meeting of the company. In addition, prior to the closing of
our initial business combination, only holders of our ClassB ordinary shares (i)will have the right to vote to appoint and
remove directors prior to or in connection with the completion of our initial business combination and (ii)will be entitled to vote
on continuing our company in a jurisdiction outside the Cayman Islands (including any special resolution required to amend our constitutional
documents or to adopt new constitutional documents, in each case, as a result of our approving a transfer by way of continuation in a
jurisdiction outside the Cayman Islands). These quorum and voting thresholds, and the voting agreement of our sponsor, officers and directors,
may make it more likely that we will consummate our initial business combination. Each public shareholder may elect to redeem their public
shares irrespective of whether they vote for or vote against the proposed transaction, or whether they do not vote or abstain from voting
on the proposed transaction, or whether they were a public shareholder on the record date for the general meeting held to approve the
proposed transaction.
If a shareholder vote is not
required and we do not decide to hold a shareholder vote for business or other legal reasons, we will:
|
| conduct the redemptions pursuant to Rule13e-4and
Regulation14E of the ExchangeAct, which regulate issuer tender offers; and |
|
7
|
| 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 Regulation14A of the ExchangeAct, 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 20business days, in accordance with Rule14e-1(a)under
the ExchangeAct, and we will not be permitted to complete our initial business combination until the expiration of the tender offer
period. In addition, the tender offer will be conditioned on public shareholders not tendering more than the number of public shares we
are permitted to redeem. If public shareholders tender more shares than we have offered to purchase, we will withdraw the tender offer
and not complete the initial business combination.
Upon the public announcement
of our initial business combination, if we elect to conduct redemption pursuant to the tender offer rules, we or our sponsor will terminate
any plan established in accordance with Rule10b5-1to purchase our ClassA ordinary shares in the open market, in order
to comply with Rule14e-5under the ExchangeAct.
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 twobusiness
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 twobusiness 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.
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 ClassA ordinary shares that are validly submitted for redemption
plus any amount required to satisfy cash conditions pursuant to the terms of the proposed initial business combination exceed the aggregate
amount of cash available to us, we will not complete the initial business combination or redeem any shares, and all ClassA ordinary
shares submitted for redemption will be returned to the holders thereof. We may, however, raise funds through the issuance of equity or
equity-linkedsecurities 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 consummation of our initial public offering,
in order to, among other reasons, satisfy such net tangible assets or minimum cash requirements.
****
**Limitation on Redemption upon Completion
of Initial Business Combination if we Seek Shareholder Approval**
If we seek shareholder approval
of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to
the tender offer rules, our amended and restated memorandum and articles of association provide that a public shareholder, together with
any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a group (as
defined under Section13 of the ExchangeAct), will be restricted from seeking redemption rights with respect to Excess Shares
without our prior consent. We believe this restriction will discourage shareholders from accumulating large blocks of shares, and subsequent
attempts by such holders to use their ability to exercise their redemption rights against a proposed business combination as a means to
force us or our management to purchase their shares at a significant premium to the then-currentmarket price or on other undesirable
terms. Absent this provision, a public shareholder holding more than an aggregate of 20% of the shares sold in our initial public offering
could threaten to exercise its redemption rights if such holders shares are not purchased by us, our sponsor or our management
at a premium to the then-currentmarket price or on other undesirable terms. By limiting our shareholders ability to redeem
no more than 20% of the shares sold in our initial public offering without our prior consent, 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.
****
8
****
**Redemption of Public Shares and Liquidation
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 have not completed our initial business combination within such time period, we will (i)cease all operations
except for the purpose of winding up, (ii)as promptly as reasonably possible but not more than tenbusiness days thereafter
(and subject to lawfully available funds therefor), redeem the public shares, at a per-shareprice, payable in cash, equal to the
aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account (which interest
shall be net of taxes payable and less up to $100,000 of interest to pay dissolution expenses), divided by the number of then-outstandingpublic
shares, which redemption will completely extinguish public shareholders rights as shareholders (including the right to receive
further liquidating distributions, if any), subject to applicable law, and (iii)as promptly as reasonably possible following such
redemption, subject to the approval of our remaining shareholders and our board of directors, liquidate and dissolve, subject in each
case to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. There
will be no redemption rights or liquidating distributions with respect to our Share Rights, which will expire worthless if we fail to
complete our initial business combination by May 27, 2027.
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 and private placement shares held by them if we fail to complete our initial business
combination by May 27, 2027, although they will 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 if we fail to complete our initial business combination within
the allotted completion window. The non-managinginvestors are not required to (i) hold any units, Class A ordinary shares or Share
Rights they may purchase in our initial public offering 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-managinginvestors 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 our initial public offering
as the rights afforded to our other public shareholders.
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 by May 27, 2027 or
(B)with respect to any other material provisions relating to shareholders rights or pre-initialbusiness 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-shareprice, payable in cash, equal to the aggregate amount then on deposit in the trust account, including
interest earned on the funds held in the trust account (net of taxes payable), divided by the number of then-outstandingpublic shares.
We expect that all costs
and expenses associated with implementing our plan of dissolution, as well as payments to any creditors, will be funded from working capital,
although we cannot assure you that there will be sufficient funds for such purpose. However, if those funds are not sufficient to cover
the costs and expenses associated with implementing our plan of dissolution, to the extent that there is any interest accrued in the trust
account not required to pay taxes on interest income earned on the trust account balance, we may request the trustee to release to us
an additional amount of up to $100,000 of such accrued interest to pay those costs and expenses.
If we were to expend all
of the net proceeds of our initial public offering and the sale of the private placement units, other than the proceeds deposited in the
trust account, and without taking into account interest, if any, earned on the trust account, the per-shareredemption 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-shareredemption 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.
9
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. Withum Smith+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, net of taxes payable, provided that such liability
will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights to the monies
held in the trust account (whether or not such waiver is enforceable) nor will it apply to any claims under our indemnity of the underwriters
of our initial public offering against certain liabilities, including liabilities under the Securities Act. However, we have not asked
our sponsor to reserve for such indemnification obligations, nor have we independently verified whether our sponsor has sufficient funds
to satisfy its indemnity obligations and we believe that our sponsors only assets are securities of our company. Therefore, we
cannot assure you that our sponsor would be able to satisfy those obligations. As a result, if any such claims were successfully made
against the trust account, the funds available for our initial business combination and redemptions could be reduced to less than $10.00
per public share. In such event, we may not be able to complete our initial business combination, and you would receive such lesser amount
per share in connection with any redemption of your public shares. None of our officers or directors will indemnify us for claims by third
parties including, without limitation, claims by vendors and prospective target businesses.
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 net of taxes payable, and our sponsor asserts that it is unable to satisfy its indemnification
obligations or that it has no indemnification obligations related to a particular claim, our independent directors would determine whether
to take legal action against our sponsor to enforce its indemnification obligations. While we currently expect that our independent directors
would take legal action on our behalf against our sponsor to enforce its indemnification obligations to us, it is possible that our independent
directors in exercising their business judgment may choose not to do so in any particular instance if, for example, the cost of such legal
action is deemed by the independent directors to be too high relative to the amount recoverable or if the independent directors determine
that a favorable outcome is not likely. Accordingly, we cannot assure you that due to claims of creditors the actual value of the per-shareredemption
price will not be less than $10.00 per share.
10
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 working capital with which to pay any such potential claims (including costs and expenses incurred in connection
with our liquidation, currently estimated to be no more than approximately $100,000). In the event that we liquidate and it is subsequently
determined that the reserve for claims and liabilities is insufficient, shareholders who received funds from our trust account could be
liable for claims made by creditors. In the event that the offering expenses are less than our estimate of $600,000, the amount of funds
available outside the trust account would increase by a corresponding amount.
If we file a bankruptcy or
insolvency petition or an involuntary bankruptcy or insolvency petition is filed against us that is not dismissed, the proceeds held in
the trust account could be subject to applicable bankruptcy or insolvency law, and may be included in our bankruptcy estate and subject
to the claims of third parties with priority over the claims of our shareholders. To the extent any bankruptcy claims deplete the trust
account, we cannot assure you we will be able to return $10.00 per share to our public shareholders. Additionally, if we file a bankruptcy
or insolvency petition or an involuntary bankruptcy or insolvency petition is filed against us that is not dismissed, any distributions
received by shareholders could be viewed under applicable debtor/creditor and/or bankruptcy/insolvency laws as either a preferential
transfer or a fraudulent conveyance, preference or disposition. As a result, a liquidator or bankruptcy or other
court could seek to recover some or all amounts received by our shareholders. Furthermore, our board of directors may be viewed as having
breached its fiduciary duty to us or our creditors and/or may have acted in bad faith, and thereby exposing itself and our company to
claims of punitive damages, by paying public shareholders from the trust account prior to addressing the claims of creditors. We cannot
assure 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 by May 27, 2027, (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 by May 27, 2027 or
(B)with respect to any other material provisions relating to shareholders rights or pre-initialbusiness combination
activity or (iii)if they redeem their respective shares for cash upon the completion of our initial business combination, subject
to applicable law and any limitations (including but not limited to cash requirements) created by the terms of the proposed business combination.
In no other circumstances will a shareholder have any right or interest of any kind to or in the trust account. In the event we seek shareholder
approval in connection with our initial business combination, a shareholders voting in connection with the business combination
alone will not result in a shareholders redeeming its shares to us for an applicable pro rata share of the trust account. Such
shareholder must have also exercised its redemption rights described above. These provisions of our amended and restated memorandum and
articles of association, like all provisions of our amended and restated memorandum and articles of association, may be amended with a
shareholder vote.
****
11
****
**Comparison of Redemption
or Purchase Prices in Connection with our Initial Business Combination and if We Fail to Complete our Initial Business Combination**
The following table compares
the redemptions and other permitted purchases of public shares that may take place in connection with the completion of our initial business
combination and if we are unable to complete our initial business combination by May 27, 2027.
|
|
|
Redemptions
in Connection
with our Initial
BusinessCombination |
|
Other Permitted
Purchases of Public
SharesbyourAffiliates |
|
Redemptions
if we fail to
Complete an Initial
Business Combination | |
|
Calculation of redemption price |
|
Redemptions at the time of our initial business combination may be made pursuant to a tender offer or in connection with a shareholder vote. The redemption price will be the same whether we conduct redemptions pursuant to a tender offer or in connection with a shareholder vote. In either case, our public shareholders may redeem their public shares for cash equal to the aggregate amount then on deposit in the trust account calculated as of twobusiness days prior to the consummation of the initial business combination (which is initially anticipated to be $10.00 per share), including interest earned on the funds held in the trust account (net of taxes payable), divided by the number of then-outstandingpublic shares, subject to the limitation that no redemptions will take place if all of the redemptions would cause to be unable to satisfy any limitations (including but not limited to cash requirements) agreed to in connection with the negotiation of terms of a proposed business combination. |
|
If we seek shareholder approval of our initial business combination, our sponsor, initial shareholders, directors, officers, advisors or their affiliates may purchase shares or Share Rights in privately negotiated transactions or in the open market either prior to or following completion of our initial business combination. If our sponsor, initial shareholders, directors, officers, advisors or their affiliates were to purchase shares of Share Rights from public shareholders, they would do so at a price no higher than the price offered through our redemption process. If they engage in such transactions they will not make any such purchases when they are in possession of any material nonpublic information not disclosed to the seller or if such purchases are prohibited by RegulationM under the ExchangeAct. We do not currently anticipate that such purchases, if any, would constitute a tender offer subject to the tender offer rules under the ExchangeAct or a going-privatetransaction subject to the going-privaterules under the ExchangeAct; however, if the purchasers determine at the time of any such purchases that the purchases are subject to such rules, the purchasers will comply with such rules. |
|
If we are unable to complete our initial business combination by May 27, 2027, we will redeem all public shares at a per-shareprice, payable in cash, equal to the aggregate amount, then on deposit in the trust account (which is initially anticipated to be $10.00 per share), including interest earned on the funds held in the trust account and not previously released to us (net of taxes payable and up to $100,000 of interest to pay dissolution expenses) divided by the number of then-outstandingpublic shares. | |
|
|
|
|
|
|
|
| |
|
Impact to remaining shareholders |
|
The redemptions in connection with our initial business combination will reduce the book value per share for our remaining shareholders, who will bear the burden of the deferred underwriting commissions and interest withdrawn for taxes. |
|
If the permitted purchases described above are made, there would be no impact to our remaining shareholders because the purchase price would not be paid by us. |
|
The redemption of our public shares if we fail to complete our initial business combination will reduce the book value per share for the shares held by our initial shareholders, who will be our only remaining shareholders after such redemptions. | |
****
12
****
**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 issued and outstanding Share Rights, 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.****
**Facilities**
Our office address is 2440
Sand Hill Road Suite 101, Menlo Park, CA94025, and our telephone number is (415)692-7762, provided by an affiliate of our
sponsor free of charge.
**Employees**
We currently have four officers:
Messrs. Vivek Ranadiv, Daven Patel, James Chan and Raymond Dong. These individuals are not obligated to devote any specific number
ofhours to our matters but they intend to devote as much of their time as they deem necessary to our affairs until we have completed
our initial business combination. The amount of time they will devote in any time period will vary based on whether a target business
has been selected for our initial business combination and the stage of the business combination process we are in. We do not intend to
have any full time employees prior to the completion of our initial business combination.****
****
**Periodic Reporting and Financial Information**
We have registered our units,
ClassA ordinary shares and Share Rights under the ExchangeAct and have reporting obligations, including the requirement that
we file annual, quarterly and current reports with the SEC.In accordance with the requirements of the ExchangeAct, our annual
reports contain financial statements audited and reported on by our independent registered public accountants.
We will provide shareholders
with audited financial statements of the prospective target business as part of the proxy solicitation materials or tender offer documents
sent to shareholders to assist them in assessing the target business. In all likelihood, these financial statements will need to be prepared
in accordance with, or reconciled to, GAAP or IFRS, depending on the circumstances, and the historical financial statements may be required
to be audited in accordance with the standards of the PCAOB.These financial statement requirements may limit the pool of potential
target businesses we may conduct an initial business combination with because some targets may be unable to provide such statements in
time for us to disclose such statements in accordance with federal proxy rules and complete our initial business combination within the
prescribed time frame. We cannot assure you that any particular target business identified by us as a potential business combination candidate
will have financial statements prepared in accordance with the requirements outlined above, or that the potential target business will
be able to prepare its financial statements in accordance with the requirements outlined above. To the extent that these requirements
cannot be met, we may not be able to acquire the proposed target business. While this may limit the pool of potential business combination
candidates, we do not believe that this limitation will be material.
We will be required to evaluate
our internal control procedures for the fiscal year ending December31, 2026 as required by the Sarbanes-OxleyAct. Only in
the event we are deemed to be a large accelerated filer or an accelerated filer, and no longer qualify as an emerging growth company,
will we be required to have our internal control procedures audited. A target business may not be in compliance with the provisions of
the Sarbanes-OxleyAct regarding adequacy of their internal controls. The development of the internal controls of any such entity
to achieve compliance with the Sarbanes-OxleyAct may increase the time and costs necessary to complete any such business combination.
We have filed a Registration
Statement on Form8-Awith the SEC to voluntarily register our securities under Section12 of the ExchangeAct. As
a result, we are subject to the rules and regulations promulgated under the ExchangeAct. We have no current intention of filing
a Form15 to suspend our reporting or other obligations under the ExchangeAct prior or subsequent to the consummation of our
initial business combination.
13
We are a Cayman Islands exempted
company. Exempted companies are Cayman Islands companies conducting business mainly outside the Cayman Islands and, as such, are exempted
from complying with certain provisions of the Companies Act. As an exempted company, we have applied for and received a tax exemption
undertaking from the Cayman Islands government that, in accordance with Section6 of the Tax Concessions Act (As Revised) of the
Cayman Islands, for a period of 20years from the date of the undertaking, no law which is enacted in the Cayman Islands imposing
any tax to be levied on profits, income, gains or appreciations will apply to us or our operations and, in addition, that no tax to be
levied on profits, income, gains or appreciations or which is in the nature of estate duty or inheritance tax will be payable (i)on
or in respect of our shares, debentures or other obligations or (ii)by way of the withholding in whole or in part of a payment of
dividends or other distribution of income or capital by us to our shareholders or a payment of principal or interest or other sums due
under a debenture or other obligation of us. We are an emerging growth company, as defined in Section2(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 Section404 of the Sarbanes-OxleyAct, reduced
disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements
of holding a non-bindingadvisory 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, Section107
of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided
in Section7(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 lastday of the fiscal year (a)following the fifth anniversary of the completion
of our initial public offering, (b)in which we have total annual gross revenue of at least $1.235billion, or (c)in which
we are deemed to be a large accelerated filer, which means the market value of our ClassA ordinary shares that are held by non-affiliatesexceeds
$700million as of the prior June30, and (2)the date on which we have issued more than $1.0billion in non-convertibledebt
during the prior three-yearperiod.
Additionally, we are a smaller
reporting company as defined in Item10(f)(1)of RegulationS-K.Smaller reporting companies may take advantage
of certain reduced disclosure obligations, including, among other things, providing only twoyears of audited financial statements.
We will remain a smaller reporting company until the lastday of the fiscal year in which (1)the market value of our ClassA
ordinary shares held by non-affiliatesequals or exceeds $250million as of the end of that years second fiscal quarter,
or (2)our annual revenues equaled or exceeded $100million during such completed fiscal year and the market value of our ClassA
ordinary shares held by non-affiliatesexceeds $700million as of the end of that years second fiscal quarter.
****
14
****
**RISK FACTORS SUMMARY**
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 entitled 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, the following:
|
| We are a blank check company with no operating history and
no revenues, and you have no basis on which to evaluate our ability to achieve our business objective. |
|
|
| Our public shareholders may not be afforded an opportunity
to vote on our proposed initial business combination, and even if we hold a vote, holders of our founder shares will participate in such
vote, which means we may complete our initial business combination even though a majority of our public shareholders do not support such
a combination. |
|
|
| Your only opportunity to effect your investment decision
regarding a potential business combination may be limited to the exercise of your right to redeem your shares from us for cash. |
|
|
| Our sponsor 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. |
|
|
| 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. |
|
|
| The ability of our public shareholders to redeem their shares
for cash may make our financial condition unattractive to potential business combination targets, which may make it difficult for us
to enter into a business combination with a target. |
|
|
| The ability of our public shareholders to exercise redemption
rights with respect to a large number of our shares and the amount of deferred underwriting compensation may not allow us to complete
the most desirable business combination or optimize our capital structure, and may substantially dilute your investment in us. |
|
|
| The requirement that we complete our initial business combination
by May 27, 2027 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. |
|
|
| If we seek shareholder approval of our initial business combination,
our sponsor, initial shareholders, directors, officers, advisors and their affiliates may elect to purchase shares or public Share Rights
from public shareholders, which may influence a vote on a proposed business combination and reduce the public float of
our ClassA ordinary shares or public Share Rights. |
|
|
| 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 Share Rights, potentially at a loss. |
|
|
| Nasdaq may delist our securities from trading on its exchange,
which could limit investors ability to make transactions in our securities and subject us to additional trading restrictions. |
|
|
| The nominal purchase price paid by our sponsor for the founder
shares may result in significant dilution to the implied value of your public shares upon the consummation of our initial business combination
and our sponsor is likely to make a substantial profit on its investment in us in the event we consummate an initial business combination,
even if the business combination causes the trading price of our ordinary shares to materially decline. |
|
|
| The value of the founder shares following completion of our
initial business combination is likely to be substantially higher than the nominal price paid for them, even if the trading price of
our ordinary at such time is substantially less than $10.00 per share. |
|
|
| You will not be entitled to protections normally afforded
to investors of many other blank check companies. |
|
15
|
| If our working capital is 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, its affiliates or our management team to
fund our search and to complete our initial business combination. |
|
|
| Past performance by 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, may not be indicative of future performance of an investment in the company. |
|
|
| We may be a passive foreign investment company, or PFIC,
which could result in adverse UnitedStates federal income tax consequences to U.S.investor. |
|
|
| 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 until the earlier of the consummation of our initial business
combination or our liquidation. As a result, following the liquidation of investments in the trust account, we would likely receive less
interest on the funds held in the trust account, which would likely reduce the dollar amount our public shareholders would receive upon
any redemption or liquidation. |
|
|
| Depending on the details of our initial business combination,
a U.S.federal excise tax could be imposed on us in connection with any redemptions of our ClassA ordinary shares in connection
with such 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. |
|
|
| 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. |
|
|
| 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-Ukraineconflict and the recent escalation of the conflict in the Middle
East and Southwest Asia. |
|
|
| Military or other conflicts in Ukraine, the Middle East or
elsewhere may lead to increased volume and price volatility for publicly traded securities, or affect the operations or financial condition
of potential target companies, which could make it more difficult for us to consummate an initial business combination. |
|
|
| We may reincorporate in or transfer by way of continuation
to another jurisdiction which may result in taxes imposed on shareholders and/or Share Right holders. |
|
16
****
**ITEM 1A. RISK FACTORS**
****
**This Annual Report
contains forward-looking information based on our current expectations. You should carefully consider the risks and uncertainties described
below together with all of the other information contained in this Annual Report, including our financial statements and
the related notes appearing at the end of this Annual Report, before deciding whether to invest in our securities. 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, and Consummation
of or Inability to Consummate, a Business Combination**
****
**Our public shareholders may not be afforded
an opportunity to vote on our proposed initial business combination, and even if we hold a vote, holders of our founder shares will participate
in such vote, which means we may complete our initial business combination even though a majority of our public shareholders do not support
such a combination.**
We may choose not to hold a shareholder vote to
approve our initial business combination unless the business combination would require shareholder approval under applicable law or stock
exchange listing requirements. In such case, 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 holders of a majority of our ordinary shares do not approve
of the business combination we complete.
****
**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.**
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 ClassA ordinary
shares prior to our initial business combination. Our amended and restated memorandum and articles of association provides that, if we
seek shareholder approval of an initial business combination, such initial business combination will be approved if we receive an ordinary
resolution under Cayman Islands law and our amended and restated memorandum and articles of association, which requires the affirmative
vote of at least a majority of the votes cast by 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. Assuming that only the holders of one-thirdof 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 a special resolution, which requires the affirmative vote of at least two-thirdsof 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. 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.
****
**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.**
You may not be provided with an opportunity to
evaluate the specific merits or risks of our initial business combination. Since our board of directors may complete a business combination
without seeking 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 20business days) set forth
in our tender offer documents mailed to our public shareholders in which we describe our initial business combination. The amount of the
deferred underwriting commissions payable to the underwriters will not be adjusted for any shares that are redeemed in connection with
an initial business combination. The per share amount we will distribute to shareholders who properly exercise their redemption rights
will not be reduced by the deferred underwriting commission and after such redemptions, the per-sharevalue of shares held by non-redeemingshareholders
will reflect our obligation to pay the deferred underwriting commissions.
****
17
****
**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 are 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-dilutionprovision of the ClassB ordinary shares
results in the issuance of ClassA ordinary shares on a greater than one-to-onebasis upon conversion of the ClassB ordinary
shares at the time of our initial business combination. In addition, the amount of the deferred underwriting compensation payable to the
underwriters will not be adjusted for any shares that are redeemed in connection with an initial business combination. The per share amount
we will distribute to shareholders who properly exercise their redemption rights will not be reduced by the deferred underwriting compensation
and after such redemptions, the amount held in trust will continue to reflect our obligation to pay the entire deferred underwriting compensation.
The above considerations may limit our ability to complete the most desirable business combination available to us or optimize our capital
structure. As a result, our obligations to redeem public shares for which redemption is requested and to pay the deferred underwriting
commissions may not allow us to complete the most desirable business combination or optimize our capital structure.
In addition, raising additional third-partyfinancing
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-dilutionprovisions of the ClassB ordinary shares result in the issuance of ClassA
ordinary shares on a greater than one-to-onebasis upon conversion of the ClassB 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 ClassA ordinary shares. The effect of this
dilution will be greater for shareholders who do not redeem. The amount of the deferred underwriting compensation payable to the underwriters
will not be adjusted for any shares that are redeemed in connection with an initial business combination, which may further dilute your
investment. The per-shareamount we will distribute to shareholders who properly exercise their redemption rights will not be reduced
by the deferred underwriting compensation and after such redemptions, the per-sharevalue of shares held by non-redeemingshareholders
will reflect our obligation to pay the deferred underwriting compensation. 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.
****
**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.
****
18
****
**The requirement that we complete our initial
business combination by May 27, 2027 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 by May 27, 2027.
Consequently, such target business may obtain leverage over us in negotiating a business combination, knowing that if we do not complete
our initial business combination with that particular target business, we may be unable to complete our initial business combination with
any target business. This risk will increase as we get closer to the timeframe described above. In addition, we may have limited time
to conduct due diligence and may enter into our initial business combination on terms that we would have rejected upon a more comprehensive
investigation. The length of time it may take us to complete our diligence and negotiate a business combination may reduce the amount
of time available for us to ultimately complete an initial business combination should such diligence or negotiations not lead to a consummated
initial business combination.
****
**We may engage our underwriters or their respective
affiliates to provide additional services to us, 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, including, for example, in connection
with the sourcing and consummation of an initial business combination.**
We may engage the underwriters or their respective
affiliates to provide additional services to us, 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 respective 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. The underwriters are under no obligation to provide any further
services to us in order to receive all or any part of the deferred underwriting commissions.
****
**We may not be able to complete our initial
business combination by May 27, 2027, in which case we would redeem our public shares.**
We may not be able to find a suitable target business
and complete our initial business combination by May 27, 2027. 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. If we have not
completed our initial business combination within such time period, we will (i)cease all operations except for the purpose of winding
up, (ii)as promptly as reasonably possible but not more than tenbusiness days thereafter (and subject to lawfully available
funds therefor), redeem the public shares, at a per-shareprice, payable in cash, equal to the aggregate amount then on deposit in
the trust account, including interest earned on the funds held in the trust account (which interest shall be net of taxes payable and
less up to $100,000 of interest to pay dissolution expenses), divided by the number of then-outstandingpublic shares, which redemption
will completely extinguish public shareholders rights as shareholders (including the right to receive further liquidating distributions,
if any), subject to applicable law, and (iii)as promptly as reasonably possible following such redemption, subject to the approval
of our remaining shareholders and our board of directors, liquidate and dissolve, subject in each case to our obligations under Cayman
Islands law to provide for claims of creditors and the requirements of other applicable law. In such case, our public shareholders may
only receive $10.00 per share, or possibly less, and our Share Rights 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.
****
**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 Share Rights may be worthless.**
We have until May 27, 2027 or until such earlier
liquidation date as our board of directors may approve, to consummate our initial business combination. If we anticipate that we may be
unable to consummate our initial business combination within such 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 (i)cease all operations except for the purpose of winding up, (ii)as promptly as reasonably
possible but not more than tenbusiness days thereafter (and subject to lawfully available funds therefor), redeem the public shares,
at a per-shareprice, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned
on the funds held in the trust account (which interest shall be net of taxes payable and less up to $100,000 of interest to pay dissolution
expenses), divided by the number of then-outstandingpublic shares, which redemption will completely extinguish public shareholders
rights as shareholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii)as
promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our board of directors,
liquidate and dissolve, subject in each case, to our obligations under Cayman Islands law to provide for claims of creditors and the requirements
of other applicable law. In such event, the Share Rights may be worthless.
****
19
****
**If we seek shareholder approval of our initial
business combination, our sponsor, initial shareholders, directors, officers, advisors and their affiliates may elect to purchase shares
or public Share Rights from public shareholders, which may influence a vote on a proposed business combination and reduce the public float
of our ClassA 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 sponsor, initial shareholders, directors, officers, advisors and their affiliates may purchase public shares or Share Rights
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, advisors and 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 Rule10b-18would apply to
purchases by sponsor, initial shareholders, directors, officers, advisors and their affiliates, then such purchases will comply with Rule10b-18under
the ExchangeAct, to the extent it applies, which provides a safe harbor for purchases made under certain conditions, including with
respect to timing, pricing and volume of purchases.
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, advisors 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 or Share Rights
in such transactions.
The purpose of any such transactions could be
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. 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 Section13 and Section16 of the ExchangeAct to the extent such purchasers are
subject to such reporting requirements. Additionally, in the event our sponsor, initial shareholders, directors, officers, advisors and
their affiliates were to purchase public shares or Share Rights from public shareholders, such purchases would be structured in compliance
with the requirements of Rule14e-5under the ExchangeAct including, in pertinent part, through adherence to the following:
|
| our registration statement/proxy statement filed for our
business combination transaction would disclose the possibility that our sponsor, initial shareholders, directors, officers, advisors
and their affiliates may purchase public shares or Share Rights from public shareholders outside the redemption process, along with the
purpose of such purchases; |
|
|
| if our sponsor, initial shareholders, directors, officers,
advisors and their affiliates were to purchase public shares from public shareholders, they would do so at a price no higher than the
price offered through our redemption process; |
|
|
| our registration statement/proxy statement filed for our
business combination transaction would include a representation that any of our securities purchased by our sponsor, initial shareholders,
directors, officers, advisors and their affiliates would not be voted in favor of approving the business combination transaction; |
|
|
| our sponsor, initial shareholders, directors, officers, advisors
and their affiliates would not possess any redemption rights with respect to our securities or, if they do acquire and possess redemption
rights, they would waive such rights; and |
|
|
| we would disclose in a Form8-K, before our security
holder meeting to approve the business combination transaction, the following material items: |
|
|
| the amount of our securities purchased outside of the redemption
offer by our sponsor, initial shareholders, directors, officers, advisors and their affiliates, along with the purchase price; |
|
|
| the purpose of the purchases by our sponsor, initial shareholders,
directors, officers, advisors and their affiliates; |
|
|
| the impact, if any, of the purchases by our sponsor, initial
shareholders, directors, officers, advisors and their affiliates on the likelihood that the business combination transaction will be
approved; |
|
|
| the identities of our security holders who sold to our sponsor,
initial shareholders, directors, officers, advisors and their affiliates (if not purchased on the open market) or the nature of our security
holders (e.g., 5% security holders) who sold to our sponsor, initial shareholders, directors, officers, advisors and their affiliates;
and |
|
|
| the number of our securities for which we have received redemption
requests pursuant to our redemption offer. |
|
****
20
****
**If a shareholder fails to receive notice of
our offer to redeem our public shares in connection with our initial business combination, or fails to comply with the procedures for
submitting or tendering its shares, such shares may not be redeemed.**
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 twobusiness 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 twobusiness 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 or tender offer materials, as applicable, its shares may not be redeemed. See the section
of this Annual Report entitled *Effecting our Initial Business CombinationDelivering Share Certificates in
Connection with the Exercise of Redemption Rights.*
****
**You will not be entitled to protections normally
afforded to investors of other blank check companies subject to Rule419 of the Securities Act.**
Since the net proceeds of our initial public offering
and the sale of the private placement units 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 UnitedStates
securities laws. However, because our securities will be listed on a national securities exchange with listing standards that meet certain
requirements, our securities will not be deemed a penny stock and therefore we are exempt from rules promulgated by the SEC to protect
investors in blank check companies, such as Rule419. Accordingly, investors will not be afforded the benefits or protections of
those rules. Among other things, this means our units will be immediately tradable and we will have a longer period of time to complete
our respective business combinations than do companies subject to Rule419. Moreover, if our initial public offering were subject
to Rule419, 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.
****
**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 20% of our ClassA ordinary shares, you may lose the ability to redeem all such shares in excess
of 20% of our ClassA 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
Section13 of the ExchangeAct), will be restricted from redeeming its shares with respect to more than an aggregate of 20%
of the shares sold in our initial public offering, which we refer to as the Excess Shares, without our prior consent. However,
we would not be restricting our shareholders ability to vote all of their shares (including Excess Shares) for or against our initial
business combination. Your inability to redeem the Excess Shares will reduce your influence over our ability to complete our initial business
combination and you could suffer a material loss on your investment in us if you sell Excess Shares in open market transactions. Additionally,
you will not receive redemption distributions with respect to the Excess Shares if we complete our initial business combination. And as
a result, you will continue to hold that number of shares exceeding 20% 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 Share Rights will expire worthless.**
We expect to encounter competition from other
entities having a business objective similar to ours, including private investors (which may be individuals or investment partnerships),
other blank check companies and other entities, domestic and international, competing for the types of businesses we intend to acquire.
Many of these individuals and entities are well-establishedand have extensive experience in identifying and effecting, directly
or indirectly, acquisitions of companies operating in or providing services to various industries. Many of these competitors possess similar
or greater technical, human and other resources to ours or more local industry knowledge than we do and our financial resources will be
relatively limited when contrasted with those of many of these competitors. While we believe there are numerous target businesses we could
potentially acquire with the net proceeds of our initial public offering and the sale of the private placement units, our ability to compete
with respect to the acquisition of certain target businesses that are sizable will be limited by our available financial resources. This
inherent competitive limitation gives others an advantage in pursuing the acquisition of certain target businesses. Furthermore, we are
obligated to offer holders of our public shares the right to redeem their shares for cash at the time of our initial business combination
in conjunction with a 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 Share Rights will
expire worthless.
****
21
****
**If our working capital is 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.**
We believe that, our working capital 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.
We could use working capital to pay fees to consultants to assist us with our search for a target business. We could also use working
capital as a down payment or to fund a no-shop provision (a provision in letters of intent or merger agreements designed
to keep target businesses from shopping around for transactions with other companies or investors on terms more favorable
to such target businesses) with respect to a particular proposed business combination, although we do not have any current intention to
do so. If we entered into a letter of intent or merger agreement where we paid for the right to receive exclusivity from a target business
and were subsequently required to forfeit such funds (whether as a result of our breach or otherwise), we might not have sufficient funds
to continue searching for, or conduct due diligence with respect to, a target business.
If we are required to seek additional capital,
we would need to borrow funds from our sponsor, management team or other third parties to operate or may be forced to liquidate.
Neither our sponsor, members of our management
team nor any of their affiliates is under any obligation to advance funds to us in such circumstances. Any such advances would be repaid
only from working capital or from funds released to us upon completion of our initial business combination. Up to $2,500,000 of such loans
may be convertible into private placement units of the post-businesscombination entity at a price of $10.00 per unit at the option
of the lender. Such units would be identical to the private placement units. Prior to the completion of our initial business combination,
we do not expect to seek loans from parties other than our sponsor 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 Share Rights will expire worthless.
****
**If third parties bring claims against us, the
proceeds held in the trust account could be reduced and theper-shareredemption 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, 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. Withum Smith+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.
22
Examples of possible instances where we may engage
a third party that refuses to execute a waiver include the engagement of a third-partyconsultant 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 10years following redemption. Accordingly, the per-shareredemption 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 signed prior to the closing of our initial public offering, 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, net of taxes payable, provided that
such liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights
to the monies held in the trust account (whether or not such waiver is enforceable) nor will it apply to any claims under our indemnity
of the underwriters of our initial public offering against certain liabilities, including liabilities under the Securities Act. However,
we have not asked our sponsor to reserve for such indemnification obligations, nor have we independently verified whether our sponsor
has sufficient funds to satisfy its indemnity obligations and we believe that our sponsors only assets are securities of our company.
Therefore, we cannot assure you that our sponsor would be able to satisfy those obligations. As a result, if any such claims were successfully
made against the trust account, the funds available for our initial business combination and redemptions could be reduced to less than
$10.00 per public share. In such event, we may not be able to complete our initial business combination, and you would receive such lesser
amount per share in connection with any redemption of your public shares. None of our officers or directors will indemnify us for claims
by third parties including, without limitation, claims by vendors and prospective target businesses.
****
**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 net of taxes payable, and our sponsor asserts that it is unable to satisfy his obligations or that he 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, 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. 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.
****
23
****
**We may not have sufficient funds to satisfy
indemnification claims of our directors and officers.**
We have agreed to indemnify our officers and directors
to the fullest extent permitted by law, including for any liability incurred in their capacities as such, except through their own actual
fraud, willful default or willful neglect. However, our officers and directors have agreed to waive any right, title, interest or claim
of any kind in or to any monies in the trust account and to not seek recourse against the trust account for any reason whatsoever. 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 insolvency petition or an involuntary bankruptcy or insolvency petition
is filed against us that is not dismissed, a bankruptcy or insolvency court may seek to recover such proceeds, and the members of our
board of directors may be viewed as having breached their fiduciary duties to our creditors, thereby exposing the members of our board
of directors and us to claims of punitive damages.**
If, after we distribute the proceeds in the trust
account to our public shareholders, we file a bankruptcy or insolvency petition or an involuntary bankruptcy or insolvency petition is
filed against us that is not dismissed, any distributions received by shareholders could be viewed under applicable debtor/creditor and/or
bankruptcy/insolvency laws as either a preferential transfer or a fraudulent conveyance, preference or disposition.
As a result, a liquidator or a bankruptcy 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, thereby
exposing itself and us to claims of punitive damages, by paying public shareholders from the trust account prior to addressing the claims
of creditors.
****
**If, before distributing the proceeds in the
trust account to our public shareholders, we file a bankruptcy or insolvency petition or an involuntary bankruptcy or insolvency 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 theper-shareamount 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 insolvency petition or an involuntary bankruptcy or insolvency petition is
filed against us that is not dismissed, the proceeds held in the trust account could be subject to applicable bankruptcy law, and may
be included in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our shareholders. To
the extent any bankruptcy claims deplete the trust account, the per-shareamount that would otherwise be received by our shareholders
in connection with our liquidation 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 will be 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.
24
On January24, 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-SPACtransactions; (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-registrantson de-SPACregistration 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.
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. We are mindful of the SECs investment company definition and guidance and intend to
identify and complete an initial business combination with an operating business, and not with an investment company, or to acquire minority
interests in other businesses exceeding the permitted threshold.
25
We do not believe that our anticipated activities
will subject us to the Investment Company Act. To this end, the proceeds held in the trust account will initially be invested only in
U.S.government treasury obligations with a maturity of 185days or less or in money market funds meeting certain conditions
under Rule2a-7under the Investment Company Act which invest only in direct U.S.government treasury obligations; the
holding of these assets in this form is intended to be temporary and for the sole purpose of facilitating the intended business combination.
To mitigate the risk that we might be deemed to be an investment company for purposes of the Investment Company Act, which risk increases
the longer that we hold investments in the trust account, we may, at any time, (based on our management teams ongoing assessment
of all factors related to our potential status under the Investment Company Act) instruct the trustee to liquidate the investments held
in the trust account and instead to hold the funds in the trust account in cash or in an interest bearing demand deposit account at a
bank. However, even if the assets in our trust account are U.S.Government securities or shares of money market funds registered
under the Investment Company Act and regulated pursuant to Rule2a-7of that Act, we could nevertheless and at any time be considered
to be operating as an unregistered investment company. If we are found to be operating as an unregistered investment company, we may be
required to change our operations, wind down our operations, or register as an investment company. If we are required to wind down our
operations as a result of this status, and are unable to complete our initial business combination, our public shareholders may receive
only approximately $10.00 per share on the liquidation of our trust account and our Share Rights will expire worthless, and our public
shareholders would also lose the possibility of an investment opportunity in a target company as well as any potential price appreciation
in the combined company following a business combination.
Pursuant to the trust agreement, the trustee is
not permitted to invest in securities or assets other than as described above. 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. Our initial public offering is not intended for persons who are seeking a return on
investments in government securities or investment securities. The trust account is intended solely as a temporary depository 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 a shareholder vote to amend our amended and restated memorandum and articles of association
(A)in a manner that would affect the substance or timing of our obligation to redeem 100% of our public shares if we do not complete
our initial business combination by May 27, 2027 or (B)with respect to any other provision relating to the rights of holders of
our ClassA ordinary shares or pre-initialbusiness combination activity; or (iii)absent an initial business combination
by May 27, 2027, our return of the funds held in the trust account to our public shareholders as part of our redemption of the public
shares.
We are aware of litigation claiming that certain
SPACs should be considered to be investment companies. Although we believe that these claims were without merit, we cannot guarantee that
we will not be deemed to be an investment company and thus subject to the Investment Company Act. If we were deemed to be subject to the
Investment Company Act, compliance with these additional regulatory burdens would require additional expenses for which we have not allotted
funds and may hinder our ability to complete an initial business combination or may result in our winding down our operations and our
liquidation. If we are unable to complete our initial business combination, our public shareholders may receive only approximately $10.00
per share on the liquidation of our trust account and our Share Rights will expire worthless, and our public shareholders would also lose
the possibility of an investment opportunity in a target company as well as any potential price appreciation in the combined company following
a business combination.
****
**To mitigate the risk that we might be deemed
to be an investment company for purposes of the Investment Company Act, we may, at any time (based on our management teams ongoing
assessment of all factors related to our potential status under the Investment Company Act), instruct the trustee to liquidate the investments
held in the trust account and instead to hold the funds in the trust account in an interest bearing demand deposit account at a bank until
the earlier of the consummation of an initial business combination or our liquidation. As a result, following the liquidation of investments
in the trust account, we will likely receive less interest on the funds held in the trust account than we would have had the trust account
remained as initially invested, such that our public shareholders would receive less upon any redemption or liquidation of the Company
than what they would have received had the investments not been liquidated.**
The funds to be held in the trust account will
be initially held only in U.S.government treasury obligations with a maturity of 185days or less, in money market funds investing
solely in U.S.government treasury obligations and meeting certain conditions under Rule2a-7under the Investment Company
Act and in cash or cash like items (including demand deposit accounts) at a bank. However, to mitigate the risk of us being deemed to
be an unregistered investment company (including under the subjective test of Section3(a)(1)(A)of the Investment Company Act)
and thus subject to regulation under the Investment Company Act, we may, at any time (based on our management teams ongoing assessment
of all factors related to our potential status under the Investment Company Act), instruct Efficiency INC. (Efficiency),
the trustee with respect to the trust account, to liquidate the U.S.government treasury obligations or money market funds held in
the trust account and thereafter to hold all funds in the trust account in an interest bearing demand deposit account at a bank until
the earlier of the consummation of our initial business combination or our liquidation. Following such liquidation, we will likely receive
less interest on the funds held in the trust account than we would earn if the trust account remained invested in U.S.government
treasury obligations with a maturity of 185days or less or in money market funds investing solely in U.S.government treasury
obligations and meeting certain conditions under Rule2a-7under the Investment Company Act. As a result, any decision to liquidate
the investments held in the trust account and thereafter to hold all funds in the trust account in an interest-bearingdemand deposit
at a bank could reduce the dollar amount our public shareholders would receive upon any redemption or liquidation of the Company as compared
to what they would have received had the investments not been so liquidated.
26
Notwithstanding the measures set forth above,
we may still be deemed to be an investment company. The longer that the funds in the trust account are held in short-termU.S.government
treasury obligations or in money market funds invested exclusively in such securities, the greater the risk that we may be deemed to be
an unregistered investment company, in which case we may be required to liquidate. 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. As disclosed above, we may determine, in our discretion, to liquidate the securities held in the trust account at any time and
instead hold all funds in the trust account in an interest bearing demand deposit account or as cash or cash items at a bank, which could
further reduce the dollar amount our public shareholders would receive upon any redemption or liquidation of the Company as compared to
what they would have received had the investments not been so liquidated. Were we to liquidate the Company, our Share Rights would expire
worthless, and our securityholders would lose the investment opportunity associated with an investment in the target company with which
we could have consummated an initial business combination. In addition, upon moving the funds from the trust account to a deposit account,
we will maintain the cash items in bank accounts which, at times, may exceed federally insured limits as guaranteed by the FDIC.While
we intend to place our deposits in high-qualitybanks, only a small portion of the funds in our trust account will be guaranteed
by the FDIC.
****
**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 ongoingRussia-Ukraineconflict and the recent escalation of the
conflict in the Middle East and Southwest Asia.**
UnitedStates and global markets are experiencing
volatility and disruption following the geopolitical instability resulting from the ongoing Russia-Ukraineconflict and the recent
escalation of the conflict in the Middle East and Southwest Asia. In response to the ongoing Russia-Ukraineconflict, the North Atlantic
Treaty Organization (NATO) deployed additional military forces to eastern Europe, and the UnitedStates, the United
Kingdom, the European Union and other countries have announced various sanctions and restrictive actions against Russia, Belarus and related
individuals and entities, including the removal of certain financial institutions from the Society for Worldwide Interbank Financial Telecommunication
(SWIFT) payment system. Certain countries, including the UnitedStates, have also provided and may continue to provide military aid
or other assistance to Ukraine and to Israel, 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 the 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 UnitedStates, the United Kingdom,
the European Union, Israel and its neighboring states and other countries have created global security concerns that could have a lasting
impact on regional and global economies. Although the length and impact of the ongoing conflicts are highly unpredictable, they could
lead to market disruptions, including significant volatility in commodity prices, credit and capital markets, as well as supply chain
interruptions and increased cyber-attacksagainst 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 abovementioned 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 the conflict in the Middle East and Southwest Asia and subsequent sanctions or related actions, could adversely affect
our search for an initial business combination and any target business with which we may ultimately consummate an initial business combination.
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, or
the operations of a target business with which we may ultimately consummate an initial business combination, may be materially adversely
affected.
****
**Military or other conflicts in Ukraine, the
Middle East and Southwest Asia or elsewhere may lead to increased volume and price volatility for publicly traded securities, or affect
the operations or financial condition of potential target companies, which could make it more difficult for us to consummate an initial
business combination.**
Military or other conflicts in Ukraine, the Middle
East, Southwest Asia or elsewhere may lead to increased volume and price volatility for publicly traded securities, or affect the operations
or financial condition of potential target companies, and to other company or industry-specific, national, regional or international economic
disruptions and economic uncertainty, 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.
****
27
****
**If we are unable to consummate our initial
business combination by May 27, 2027, our public shareholders may be forced to wait beyond 24months before redemption from our trust
account.**
If we are unable to consummate our initial business
combination by May 27, 2027, the proceeds then on deposit in the trust account, including interest earned on the funds held in the trust
account (net of taxes payable and up to $100,000 of interest to pay dissolution expenses), will be used to fund the redemption of our
public shares, as further described herein. Any redemption of public shareholders from the trust account will be effected automatically
by function of our amended and restated memorandum and articles of association prior to any voluntary winding up. If we are required to
wind-up, liquidate the trust account and distribute such amount therein, pro rata, to our public shareholders, as part of any liquidation
process, such winding up, liquidation and distribution must comply with the applicable provisions of the Companies Act. In that case,
investors may be forced to wait beyond the end of the completion window before the redemption proceeds of our trust account become available
to them, and they receive the return of their pro rata portion of the proceeds from our trust account. We have no obligation to return
funds to investors prior to the date of our redemption or liquidation unless we consummate our initial business combination prior thereto
and only then in cases where investors have sought to redeem their ClassA ordinary shares. Only upon our redemption or any liquidation
will public shareholders be entitled to distributions if we are unable to complete our initial business combination.
****
**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 $18,293 and to imprisonment for fiveyears 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 ClassA ordinary shares will not have the right to vote on the appointment or removal
of directors or continuing the company in a jurisdiction outside the Cayman Islands until after the consummation of our initial business
combination.**
In accordance with Nasdaq corporate governance
requirements, we are not required to hold an annual general meeting until no later than one year after our first fiscal year end following
our listing on Nasdaq. There is no requirement under the Companies Act for us to hold annual or extraordinary general meetings to appoint
directors. Until we hold an annual general meeting, public shareholders may not be afforded the opportunity to discuss company affairs
with management. Our board of directors is divided into three classes with only one class of directors being appointed in each year and
each class (except for those directors appointed prior to our first annual general meeting) serving a three-yearterm. In addition,
as holders of our ClassA 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 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. While we
may pursue an initial business combination opportunity in any industry or sector, we intend to capitalize on the ability of our management
team to identify and acquire a business or businesses that can benefit from our management teams established global relationships
and operating experience. Our management team has extensive experience in identifying and executing strategic investments globally and
has done so successfully in a number of sectors. Our amended and restated memorandum and articles of association prohibits us from effectuating
a business combination solely with another blank check company or similar company with nominal operations.
****
28
****
**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 recentyears,
a number of target businesses have underperformed financially post-businesscombination. There are no assurances that the target
business with which we consummate our initial business combination will perform as anticipated. Although our officers and directors will
endeavor to evaluate the risks inherent in a particular target business, we cannot assure you that we will properly ascertain or assess
all of the significant risk factors or that we will have adequate time to complete due diligence. Furthermore, some of these risks may
be outside of our control and leave us with no ability to control or reduce the chances that those risks will adversely impact a target
business. We also cannot assure you that an investment in our units will ultimately prove to be more favorable to investors than a direct
investment, if such opportunity were available, in a business combination target. Accordingly, any shareholders who choose to remain shareholders
following the business combination could suffer a reduction in the value of their securities. Such shareholders are unlikely to have a
remedy for such reduction in value unless they are able to successfully claim that the reduction was due to the breach by our officers
or directors of a duty of care or other fiduciary duty owed to them, or if they are able to successfully bring a private claim under securities
laws that the proxy solicitation or tender offer materials, as applicable, relating to the business combination contained an actionable
material misstatement or material omission.**
****
**We may seek business combination opportunities
in industries or sectors that may be outside of our managements areas of expertise.**
We will consider a business combination outside
of our managements areas of expertise if a business combination candidate is presented to us and we determine that such candidate
offers an attractive business combination opportunity for our company. Although our management will endeavor to evaluate the risks inherent
in any particular business combination candidate, we cannot assure you that we will adequately ascertain or assess all of the significant
risk factors. We also cannot assure you that an investment in our units will not ultimately prove to be less favorable to investors in
our initial public offering than a direct investment, if an opportunity were available, in a business combination candidate. In the event
we elect to pursue a business combination outside of the areas of our managements expertise, our managements expertise may
not be directly applicable to its evaluation or operation, and the information contained in this Annual Report 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 law, 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 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 Share Rights
will expire worthless.
****
**We are not required to obtain an opinion from
an independent 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 an affiliated entity or our board of directors cannot independently determine the fair market value of the target business or businesses
(including with the assistance of financial advisors), we are not required to obtain an opinion from an independent investment banking
firm or another independent entity that commonly renders valuation opinions that the price we are paying is fair to our shareholders from
a financial point of view. If no opinion is obtained, our shareholders will be relying on the judgment of our board of directors, who
will determine fair market value based on standards generally accepted by the financial community. Such standards used will be disclosed
in our proxy materials or tender offer documents, as applicable, related to our initial business combination.
****
29
**We may issue additional ClassA 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 ClassA ordinary shares upon the conversion of the founder shares at a ratio greater thanone-to-one
at the time of our initial business combination as a result of theanti-dilutionprovisions contained 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 authorizes the issuance of up to 500,000,000 ClassA ordinary shares, par value $0.0001 per share, 50,000,000 ClassB
ordinary shares, par value $0.0001 per share, and 5,000,000 preference shares, par value $0.0001 per share. Immediately after our initial
public offering, there were 479,340,000 and 44,334,900 authorized but unissued ClassA ordinary shares and ClassB ordinary
shares, respectively, available for issuance which amount does not take into account shares reserved for issuance upon exercise of outstanding
Share Rights or shares issuable upon conversion of the ClassB ordinary shares. The ClassB ordinary shares are automatically
convertible into ClassA ordinary shares (which such ClassA ordinary shares delivered upon conversion will not have any redemption
rights or be entitled to liquidating distributions from the trust account if we fail to consummate an initial business combination) concurrently
with or immediately following the consummation of our initial business combination or earlier at the option of the holder, initially at
a one-for-oneratio 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 ClassA ordinary shares or equity-linkedsecurities related to our initial
business combination. Immediately after our initial public offering, there are no preference shares issued and outstanding.
We may issue a substantial number of additional
ClassA 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 ClassA ordinary shares upon conversion of the ClassB ordinary
shares at a ratio greater than one-to-oneat the time of our initial business combination as a result of the anti-dilutionprovisions
as set forth therein. However, our amended and restated memorandum and articles of association provide, among other things, that prior
to our initial business combination, except in connection with the conversion of ClassB ordinary shares into ClassA ordinary
shares where the holders of such shares have waived any rights to receive funds from the trust account, we may not issue additional shares
that would entitle the holders thereof to (i)receive funds from the trust account or (ii)vote as a class with public shares
on any initial business combination. These provisions of our amended and restated memorandum and articles of association, like all provisions
of our amended and restated memorandum and articles of association, may be amended with a shareholder vote. The issuance of additional
ordinary or preference shares:
|
| may significantly dilute the equity interest of investors
in our initial public offering, which dilution would increase if the anti-dilutionprovisions in the ClassB ordinary shares
resulted in the issuance of ClassA ordinary shares on a greater than one-to-onebasis upon conversion of the ClassB
ordinary shares; |
|
|
| may subordinate the rights of holders of ClassA ordinary
shares if preference shares are issued with rights senior to those afforded our ClassA ordinary shares; |
|
|
| could cause a change in control if a substantial number of
ClassA 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; |
|
|
| may have the effect of delaying or preventing a change of
control of us by diluting the share ownership or voting rights of a person seeking to obtain control of us; |
|
|
| may adversely affect prevailing market prices for our units,
ClassA ordinary shares and/or Share Rights; and |
|
|
| may not result in adjustment to the exercise price of our
Share Rights. |
|
****
30
****
**Unlike some other similarly structured special
purpose acquisition companies, our initial shareholders will receive additional ClassA ordinary shares if we issue certain shares
to consummate an initial business combination.**
The founder shares will automatically convert
into ClassA ordinary shares (which such ClassA ordinary shares delivered upon conversion will not have any redemption rights
or be entitled to liquidating distributions from the trust account if we fail to consummate an initial business combination) concurrently
with or immediately following the consummation of our initial business combination or earlier at the option of the holder on a one-for-onebasis,
subject to adjustment for share sub-divisions, share capitalizations, reorganizations, recapitalizations and the like, and subject to
further adjustment as provided herein. In the case that additional ClassA ordinary shares, or any other equity-linkedsecurities,
are issued or deemed issued in excess of the amounts sold in our 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, approximately 25% of the sum of (i)the total number of all ClassA ordinary shares
outstanding upon the completion of our initial public offering (excluding the ClassA ordinary shares underlying the private placement
units), plus (ii)all ClassA ordinary shares and equity-linkedsecurities issued or deemed issued, in connection with
the closing of the initial business combination (excluding any shares or equity-linkedsecurities issued, or to be issued, to any
seller in the initial business combination and any private placement-equivalentShare Rights issued to our sponsor or any of its
affiliates or to our officers or directors upon conversion of working capital loans) minus (iii)any redemptions of ClassA
ordinary shares by public shareholders in connection with charter amendments prior to an initial business combination or an initial business
combination; provided that such conversion of founder shares will never occur on a less than one-for-onebasis.
****
**We may issue our shares to investors in connection
with our initial business combination at a price which is less than the prevailing market price of our shares at that time.**
In connection with our initial business combination,
we may issue shares to investors in private placement transactions (so-calledPIPE transactions) at a price of $10.00 per share or
lower, at a price that approximates the per-shareamount in our trust account at such time. The purpose of such issuances will be
to enable us to provide sufficient liquidity and capital to the post-businesscombination entity. The price of the shares we issue
may therefore be less, and potentially significantly less, than the market price for our shares at such time. Any such issuances of equity
securities could dilute the interests of our existing shareholders.
****
**Since only holders of our ClassB ordinary
shares will have the right to vote on the appointment of directors, upon the listing of our shares on Nasdaq, Nasdaq will consider 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 ClassB ordinary shares
will have the right to vote on the appointment 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, 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. |
|
31
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.
****
**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 Share Rights 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, 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 Share Rights will expire worthless.
****
**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, thenon-managingsponsor
investors, or any of their respective affiliates, which may raise potential conflicts of interest.**
In light of the involvement of our sponsor, its
managing member, and our officers and directors with other entities, we may decide to acquire one or more businesses affiliated with or
competitive with our sponsor, officers, directors the non-managingsponsor investors, or any of their respective affiliates. Our
directors also serve as officers and/or board members for other entities. 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. Although we will not be specifically focusing on, or targeting, any transaction with
any affiliated entities, we would pursue such a transaction if we determined that such affiliated entity met our criteria for a business
combination, and such transaction was approved by a majority of our independent and disinterested directors. Despite our agreement to
obtain an opinion from an independent investment banking firm or another independent entity that commonly renders valuation opinions regarding
the fairness to our company from a financial point of view of a business combination with one or more domestic or international businesses
affiliated with our sponsor, officers, directors, the non-managingsponsor investors, or any of their respective affiliates, 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.
****
32
****
**Since our sponsor, officers and directors,
any other holder of our founder shares, including thenon-managingsponsor investors may lose their entire investment in us
if our initial business combination is not completed (other than with respect to public shares they may acquire during or after our initial
public offering), a conflict of interest may arise in determining whether a particular business combination target is appropriate for
our initial business combination; in addition, we are not prohibited from pursuing an initial business combination with a company that
is affiliated with our sponsor, officers, directors, thenon-managingsponsor investors, or any of their respective affiliates,
or completing the business combination through a joint venture or other form of shared ownership with our sponsor, officers, directors,
thenon-managingsponsor investors, or any of their respective affiliates.**
Our Sponsor acquired an aggregate of 7,575,900
founder shares in exchange for a capital contribution of $25,000. The purchase price of the founder shares was determined by dividing
the amount of cash contributed to the company by the number of founder shares issued. The number of founder shares outstanding was determined
based on the expectation that the total size of our initial public offering would be a maximum of 23,000,000units, and therefore
that such founder shares would represent 25% of the outstanding shares after our initial public offering (excluding the private placement
shares included in the private placement units). Our public shareholders may incur material dilution due to anti-dilutionadjustments
that result in the issuance of ClassA ordinary shares on a greater than one-to-onebasis upon conversion. The founder shares
will be worthless if we do not complete an initial business combination, except to the extent they receive liquidating distributions from
assets outside of the trust account. In addition, our sponsor purchased an aggregate of 430,000 private placement units, each private
placement unit consisting of one ClassA ordinary share and one right to receive one tenth (1/10) of a ClassA ordinary share
upon the consummation of an initial business combination, as described in more detail in this Annual Report, at a price of $10.00 per
unit, or $4,300,000 in the aggregate, in a private placement that closed simultaneously with the closing of our initial public offering.
The underwriters used a portion of their underwriting discount and commission to purchase an aggregate of 230,000 private placement units
at a price of $10.00 per unit, or $2,300,000 in the aggregate, in a private placement that closed simultaneously with the closing of our
initial public offering. The non-managingsponsor investors have expressed an interest to indirectly purchase, through the purchase
of non-managingsponsor membership interests, an aggregate of 300,000 private placement units at a price of $10.00 per unit ($3,000,000
in the aggregate) in a private placement that closed simultaneously with the closing of our initial public offering. Subject to the non-managingsponsor
investors purchasing, through the sponsor, the private placement units allocated to them in connection with the closing of our initial
public offering, the sponsor will issue membership interests at a nominal purchase price to the non-managingsponsor investors reflecting
their interest in an aggregate of 2,400,000 founder shares held by the sponsor. The private placement units will be worthless if we do
not complete our initial business combination. The personal and financial interests of our 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.
In addition, we are not prohibited from pursuing
an initial business combination with a company that is affiliated with our sponsor, officers, directors, the non-managingsponsor
investors, or any of their respective affiliates, or completing the business combination through a joint venture or other form of shared
ownership with our sponsor, officers, directors or the non-managingsponsor investors, or any of their respective affiliates; accordingly,
such affiliated person(s)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 as such affiliated person(s)would have interests different from our public
shareholders and would likely not receive any financial benefit unless we consummated such business combination.
****
**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 Annual Report 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; |
|
33
|
| 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 our initial public offering and the sale of the private placement units, which will cause us to be solely
dependent on a single business which may have a limited number of products or services. This lack of diversification may negatively impact
our operations and profitability.**
We may effectuate our initial business combination
with a single target business or multiple target businesses simultaneously or within a short period of time. However, we may not be able
to effectuate our initial business combination with more than one target business because of various factors, including the existence
of complex accounting issues and the requirement that we prepare and file pro forma financial statements with the SEC that present operating
results and the financial condition of several target businesses as if they had been operated on a combined basis. By completing our initial
business combination with only a single entity, our lack of diversification may subject us to numerous economic, competitive and regulatory
developments. Further, we would not be able to diversify our operations or benefit from the possible spreading of risks or offsetting
of losses, unlike other entities which may have the resources to complete several business combinations in different industries or different
areas of a single industry. Accordingly, the prospects for our success may be:
|
| solely dependent upon the performance of a single business,
property or asset, or |
|
|
| dependent upon the development or market acceptance of a
single or limited number of products, processes or services. |
|
This lack of diversification may subject us to
numerous economic, competitive and regulatory risks, any or all of which may have a substantial adverse impact upon the particular industry
in which we may operate subsequent to our initial business combination.
****
**We may attempt to simultaneously complete business
combinations with multiple prospective targets, which may hinder our ability to complete our initial business combination and give rise
to increased costs and risks that could negatively impact our operations and profitability.**
If we determine to simultaneously acquire several
businesses that are owned by different sellers, we will need for each of such sellers to agree that our purchase of its business is contingent
on the simultaneous closings of the other business combinations, which may make it more difficult for us, and delay our ability, to complete
our initial business combination. With multiple business combinations, we could also face additional risks, including additional burdens
and costs with respect to possible multiple negotiations and due diligence investigations (if there are multiple sellers) and the additional
risks associated with the subsequent assimilation of the operations and services or products of the acquired companies in a single operating
business. If we are unable to adequately address these risks, it could negatively impact our profitability and results of operations.
****
34
****
**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 will not provide a specified maximum redemption threshold. Our proposed initial business combination may impose a minimum
cash requirement for (i)cash consideration to be paid to the target or its owners, (ii)cash for working capital or other general
corporate purposes or (iii)the retention of cash to satisfy other conditions. As a result, we may be able to complete our initial
business combination even though a substantial majority of our public shareholders do not agree with the transaction and have redeemed
their shares or, if we seek shareholder approval of our initial business combination and do not conduct redemptions in connection with
our initial business combination pursuant to the tender offer rules, have entered into privately negotiated agreements to sell their shares
to our sponsor, officers, directors, advisors or any of their affiliates. In the event the aggregate cash consideration we would be required
to pay for all ClassA ordinary shares that are validly submitted for redemption plus any amount required to satisfy cash conditions
pursuant to the terms of the proposed business combination exceed the aggregate amount of cash available to us, we will not complete the
business combination or redeem any shares, all ClassA ordinary 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. 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 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.
For example, special purpose acquisition companies have extended the time to consummate an initial business combination. Amending our
amended and restated memorandum and articles of association will require a special resolution under Cayman Islands law, which requires
the affirmative vote of at least two-thirds(or, in the scenarios described below, 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 Share Rights Agreement will require a vote of holders of at least 50% of the public Share Rights and, solely with respect
to any amendment to the terms of the private placement Share Rights or any provision of the Share Rights Agreement with respect to the
private placement Share Rights (including, for the avoidance of doubt, the forfeiture of cancellation of any private placement Share Rights),
50% of the then-outstandingprivate placement Share Rights. 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 by May 27, 2027 or (B)with
respect to any other material provisions relating to shareholders rights or pre-initialbusiness combination activity. To
the extent any of such amendments would be deemed to fundamentally change the nature of the securities offered through this registration
statement, 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.
****
35
****
**The provisions of our amended and restated
memorandum and articles of association that relate to ourpre-businesscombination 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 thantwo-thirdsof
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-businesscombination activity (including the requirement to deposit
proceeds of our initial public offering and the private placement of units into the trust account and not release such amounts except
in specified circumstances, and to provide redemption rights to public shareholders as described herein, 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 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-thirdsof 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-thirdsof
our ordinary shares which are represented in person or by proxy and are voted at a general meeting of the company. Our sponsor, who will
beneficially own 25% of our ordinary shares upon the closing of our initial public offering, 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-businesscombination 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 by May 27, 2027 or (B)with
respect to any other material provisions relating to shareholders rights or pre-initialbusiness combination activity, in
each case unless we provide our public shareholders with the opportunity to redeem their ClassA ordinary shares upon approval of
any such amendment at a per-shareprice, payable in cash, equal to the aggregate amount then on deposit in the trust account, including
interest earned on the funds held in the trust account (net of taxes payable), divided by the number of then-outstandingpublic shares.
Our shareholders are not parties to, or third-partybeneficiaries 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.
****
**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 our initial
public offering and the sale of the private placement units. As a result, if the cash portion of the purchase price exceeds the amount
available from the trust account, net of amounts needed to satisfy any redemption by public 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-transactionbusinesses,
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 Share Rights 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.
****
36
**Our sponsor 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 (excluding the private placement 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 sponsor. In addition, the founder shares, all of which are held by our sponsor, will entitle the holders to appoint
all of our directors prior to the consummation of our initial business combination. The non-managingsponsor investors have no right
to vote the founder shares, private placement units or securities underlying the private placement units that they hold indirectly through
their membership interests in the sponsor. The non-managingsponsor investors membership interests in our sponsor track our
underlying securities on a 1:1 basis. 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 ClassB ordinary shares
will be entitled to vote on continuing our company in a jurisdiction outside the Cayman Islands (including any special resolution required
to amend our constitutional documents or to adopt new constitutional documents, in each case, as a result of our approving a transfer
by way of continuation in a jurisdiction outside the Cayman Islands). These provisions of our amended and restated memorandum and articles
of association may only be amended if approved by a special resolution passed by the affirmative vote of at least 90% (or, where such
amendment is proposed in respect of the consummation of our initial business combination, two-thirds) of the votes cast by such shareholders
as, being entitled to do so, vote in person or, where proxies are allowed, by proxy at the applicable general meeting of the company.
As a result, you will not have any influence over the appointment or removal of directors prior to our initial business combination or
any influence over our continuation in a jurisdiction outside the Cayman Islands prior to our initial business combination.
If our sponsor purchases any units in our initial
public offering or if our sponsor purchases any additional ClassA ordinary shares in the aftermarket or in privately negotiated
transactions, this would increase its control. Factors that would be considered in making such additional purchases would include consideration
of the current trading price of our ClassA ordinary shares. In addition, our board of directors, whose members were appointed by
our sponsor, is and will be divided into three classes, each of which will generally serve for a term for threeyears with only one
class of directors being appointed in each year. 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.
If there is an annual general meeting, as a consequence
of our staggered board of directors, only a minority of the board of directors will be considered for appointment and our
sponsor, because of its ownership position, will have considerable influence regarding the outcome. In addition, since only holders of
our ClassB 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. Accordingly, our sponsor will continue
to exert control at least until the completion of our initial business combination.
****
37
****
**We may not be able to complete an initial business
combination because such initial business combination may be subject to regulatory review and approval requirements, including foreign
investment regulations and review by government entities such as the Committee on Foreign Investment in the UnitedStates (CFIUS),
or may be ultimately prohibited.**
The sponsor is a Delaware limited liability company,
and is not controlled by, nor has substantial ties with any non-U.S. person. Our initial business combination may be subject to regulatory
review and approval requirements by governmental entities, or ultimately prohibited. For example, CFIUS has authority to review direct
or indirect foreign investments in U.S.companies. Among other things, CFIUS is empowered to require certain foreign investors to
make mandatory filings, to charge filing fees related to such filings, and to self-initiatenational security reviews of foreign
direct and indirect investments in U.S.companies if the parties to that investment choose not to file voluntarily. In the case that
CFIUS determines an investment to be a threat to national security, CFIUS has the power to unwind or place restrictions on the investment.
Whether CFIUS has jurisdiction to review an acquisition or investment transaction depends onamong other factorsthe
nature and structure of the transaction, including the level of beneficial ownership interest and the nature of any information or governance
rights involved. For example, investments that result in control of a U.S.business by a foreign person always are
subject to CFIUS jurisdiction. CFIUSs expanded jurisdiction under the Foreign Investment Risk Review Modernization Actof2018
and implementing regulations that became effective on February13, 2020 further includes investments that do not result in control
of a U.S.business by a foreign person but afford certain foreign investors certain information or governance rights in a U.S.business
that has a nexus to critical technologies, critical infrastructure and/or sensitive personal data.
If a particular proposed initial business combination
with a U.S.business falls within CFIUSs jurisdiction, we may determine that we are required to make a mandatory filing or
that we will submit to CFIUS review on a voluntary basis, or to proceed with the transaction without submitting to CFIUS and risk CFIUS
intervention, before or after closing the transaction. CFIUS may decide to block or delay our proposed initial business combination, impose
conditions with respect to such initial business combination or request the President of the UnitedStates to order us to divest
all or a portion of the U.S.target business of our initial business combination that we acquired without first obtaining CFIUS approval,
which may limit the attractiveness of, delay or prevent us from pursuing certain target companies that we believe would otherwise be beneficial
to us and our shareholders. As a result, the pool of potential targets with which we could complete an initial business combination may
be limited and we may be adversely affected in terms of competing with other special purpose acquisition companies which do not have any
foreign ownership issues. In addition, certain federally licensed businesses may be subject to rules or regulations that limit foreign
ownership.
The process of government review, whether by CFIUS
or otherwise, could be lengthy. Because we have only a limited time to complete our initial business combination, our failure to obtain
any required approvals within the requisite time period may require us to liquidate. If we are unable to consummate our initial business
combination within the applicable time period required under our amended and restated memorandum and articles of association, including
as a result of extended regulatory review of a potential initial business combination, we will (i)cease all operations except for
the purpose of winding up, (ii)as promptly as reasonably possible but not more than tenbusiness days thereafter (and subject
to lawfully available funds therefor), redeem the public shares, at a per-shareprice, payable in cash, equal to the aggregate amount
then on deposit in the trust account, including interest earned on the funds held in the trust account (which interest shall be net of
taxes payable and less up to $100,000 of interest to pay dissolution expenses), divided by the number of then-outstandingpublic
shares, which redemption will completely extinguish public shareholders rights as shareholders (including the right to receive
further liquidating distributions, if any), subject to applicable law, and (iii)as promptly as reasonably possible following such
redemption, subject to the approval of our remaining shareholders and our board of directors, liquidate and dissolve, subject in each
case to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. 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 Share Rights may be worthless.
****
38
****
**Attractive targets for special purpose acquisition
companies may become scarcer and there may be more competition for attractive targets, or such attractive targets may not be interested
to consummate 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.**
Many potential targets for special purpose acquisition
companies have already entered into an initial business combination, and there are numerous special purpose acquisition companies preparing
for an initial public offering, as well as many such companies currently in registration. As a result, at times, fewer attractive targets
may be available to consummate an initial business combination.
In addition, because there are numerous special
purpose acquisition companies seeking to enter into an initial business combination with available targets, the competition for available
targets with attractive fundamentals or business models may increase, which could cause target companies to demand improved financial
terms. Attractive deals could also become scarcer for other reasons, such as economic or industry sector downturns (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-businesscombination. 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 ornon-performanceby 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 will initially be held in banks or other financial institutions and will be invested only in U.S.government treasury obligations
with a maturity of 185days or less or in money market funds meeting certain conditions under Rule2a-7under the Investment
Company Act which invest only in direct U.S.government treasury obligations; the holding of these assets in this form is intended
to be temporary and for the sole purpose of facilitating the intended business combination. To mitigate the risk that we might be deemed
to be an investment company for purposes of the Investment Company Act, which risk increases the longer that we hold investments in the
trust account, we may, at any time (based on our management teams ongoing assessment of all factors related to our potential status
under the Investment Company Act), instruct the trustee to liquidate the investments held in the trust account and instead to hold the
funds in the trust account in cash or in an interest-bearingdemand 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-performanceor 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 March10, 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 the proxy
statement with respect to the vote on an initial business combination include historical and pro forma financial statement disclosure.
We will include the same financial statement disclosure in connection with our tender offer documents, whether or not they are required
under the tender offer rules. These financial statements may be required to be prepared in accordance with, or be reconciled to, accounting
principles generally accepted in the UnitedStates 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 (UnitedStates)
(PCAOB). These financial statement requirements may limit the pool of potential target businesses we may acquire because
some targets may be unable to provide such financial statements in time for us to disclose such statements in accordance with federal
proxy rules and complete our initial business combination within the prescribed time frame.
****
39
**Compliance obligations under theSarbanes-OxleyAct
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.**
Section404 of the Sarbanes-OxleyAct
requires that we evaluate and report on our system of internal controls beginning with our Annual Report on Form10-Kfor the
year ending December31, 2026. Only in the event we are deemed to be a large accelerated filer or an accelerated filer, and no longer
qualify as an emerging growth company, will we be required to comply with the independent registered public accounting firm attestation
requirement on our internal control over financial reporting. 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-OxleyAct particularly
burdensome on us as compared to other public companies because a target business with which we seek to complete our initial business combination
may not be in compliance with the provisions of the Sarbanes-OxleyAct regarding adequacy of its internal controls. The development
of the internal control of any such entity to achieve compliance with the Sarbanes-OxleyAct may increase the time and costs necessary
to complete any such business combination.
****
**Risks Relating to thePost-BusinessCombination
Company**
****
**Subsequent to our completion of our initial
business combination, we may be required to takewrite-downsorwrite-offs, restructuring and impairment or other charges
that could have a significant negative effect on our financial condition, results of operations and the price of our securities, which
could cause you to lose some or all of your investment.**
Even if we conduct due diligence on a target business
with which we combine, 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-downor write-offassets, restructure our operations, or incur impairment or other charges that could result in our reporting
losses. Even if our due diligence successfully identifies certain risks, unexpected risks may arise and previously known risks may materialize
in a manner not consistent with our preliminary risk analysis. Even though these charges may be non-cashitems and not have an immediate
impact on our liquidity, the fact that we report charges of this nature could contribute to negative market perceptions about us or our
securities. In addition, charges of this nature may cause us to violate net worth or other covenants to which we may be subject as a result
of assuming pre-existingdebt held by a target business or by virtue of our obtaining debt financing to partially finance the initial
business combination or thereafter. Accordingly, any shareholders who choose to remain shareholders following the business combination
could suffer a reduction in the value of their securities. Such shareholders are unlikely to have a remedy for such reduction in value
unless they are able to successfully claim that the reduction was due to the breach by our officers or directors of a duty of care or
other fiduciary duty owed to them, or if they are able to successfully bring a private claim under securities laws that the proxy solicitation
or tender offer materials, as applicable, relating to the business combination contained an actionable material misstatement or material
omission.
****
**The officers and directors of an acquisition
candidate may resign upon completion of our initial business combination. The loss of a business combination targets key personnel
could negatively impact the operations and profitability of ourpost-combinationbusiness.**
The role of an acquisition candidates key
personnel upon the completion of our initial business combination cannot be ascertained at this time. Although we contemplate that certain
members of an acquisition candidates management team will remain associated with the acquisition candidate following our initial
business combination, it is possible that members of the management of an acquisition candidate will not wish to remain in place.
****
**Our 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-transactioncompany 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-transactioncompany owns or acquires
50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for
us not to be required to register as an investment company under the Investment Company Act. We will not consider any transaction that
does not meet such criteria. Even if the post-transactioncompany owns 50% or more of the voting securities of the target, our shareholders
prior to the business combination may collectively own a minority interest in the post 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 ClassA 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 ClassA ordinary shares, our shareholders immediately prior to such transaction could own less than a majority of our issued
and outstanding ClassA 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.
****
40
****
**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-combinationbusiness may be negatively impacted. Accordingly, any shareholders who choose to remain shareholders
following the 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 unless they are able to successfully claim that the reduction was due to the breach by our officers or directors
of a duty of care or other fiduciary duty owed to them, or if they are able to successfully bring a private claim under securities laws
that the proxy solicitation or tender offer materials, as applicable, relating to the business combination contained an actionable material
misstatement or material omission.
****
**We may seek business combination opportunities
with a high degree of complexity that require significant operational improvements, which could delay or prevent us from achieving our
desired results.**
We may seek business combination opportunities
with large, highly complex companies that we believe would benefit from operational improvements. While we intend to implement such improvements,
to the extent that our efforts are delayed or we are unable to achieve the desired improvements, the business combination may not be as
successful as we anticipate.
To the extent we complete our initial business
combination with a large complex business or entity with a complex operating structure, we may also be affected by numerous risks inherent
in the operations of the business with which we combine, which could delay or prevent us from implementing our strategy. Although our
management team will endeavor to evaluate the risks inherent in a particular target business and its operations, we may not be able to
properly ascertain or assess all of the significant risk factors until we complete our business combination. If we are not able to achieve
our desired operational improvements, or the improvements take longer to implement than anticipated, we may not achieve the gains that
we anticipate. Furthermore, some of these risks and complexities may be outside of our control and leave us with no ability to control
or reduce the chances that those risks and complexities will adversely impact a target business. Such combination may not be as successful
as a combination with a smaller, less complex organization.
****
**Our initial business combination and our structure
thereafter may not betax-efficientto our shareholders and Share Right 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 our initial
business combination in a tax-efficientmanner, tax structuring considerations are complex, the relevant facts and law are uncertain
and may change, and we may prioritize commercial and other considerations over tax considerations. For example, in connection with our
initial business combination and subject to any requisite shareholder approval, we may: structure our business combination in a manner
that requires shareholders and/or Share Right holders to recognize gain or income for tax purposes; effect a business combination with
a target company in another jurisdiction; or reincorporate in a different jurisdiction (including, but not limited to, the jurisdiction
in which the target company or business is located). We do not intend to make any cash distributions to shareholders or Share Right holders
to pay taxes in connection with our business combination or thereafter. Accordingly, a shareholder or a Share Right 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 Share Rights received. In addition, shareholders and Share Right holders may also be subject to additional income, withholding
or other taxes with respect to their ownership of us after our initial business combination.
In addition, we may effect a business combination
with a target company that has business operations outside of the UnitedStates, and possibly, business operations in multiple jurisdictions.
If we effect such a business combination, we could be subject to significant income, withholding and other tax obligations in a number
of jurisdictions with respect to income, operations and subsidiaries related to those jurisdictions. Due to the complexity of tax obligations
and filings in other jurisdictions, we may have a heightened risk related to audits or examinations by U.S.federal, state, local
and non-U.S.taxing authorities. This additional complexity and risk could have an adverse effect on our after-taxprofitability
and financial condition.
****
41
****
**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 UnitedStates, 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 UnitedStates for our initial business combination, we may face additional burdens in connection
with investigating, agreeing to and completing such initial business combination, and if we effect such initial business combination,
we would be subject to a variety of additional risks that may negatively impact our operations.
If we pursue a target a company with operations
or opportunities outside of the UnitedStates for our initial business combination, we would be subject to risks associated with
cross-borderbusiness combinations, including in connection with investigating, agreeing to and completing our initial business combination,
conducting due diligence in a foreign jurisdiction, having such transaction approved by any local governments, regulators or agencies
and changes in the purchase price based on fluctuations in foreign exchange rates.
If we effect our initial business combination
with such a company, we would be subject to any special considerations or risks associated with companies operating in an international
setting, including any of the following:
|
| costs and difficulties inherent in managing cross-borderbusiness
operations; |
|
|
| rules and regulations regarding currency redemption; |
|
|
| complex corporate withholding taxes on individuals; |
|
|
| laws governing the manner in which future business combinations
may be effected; |
|
|
| exchange listing and/or delisting requirements; |
|
|
| tariffs and trade barriers; |
|
|
| regulations related to customs and import/export matters; |
|
|
| local or regional economic policies and market conditions; |
|
|
| unexpected changes in regulatory requirements; |
|
|
| 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 UnitedStates; |
|
|
| currency fluctuations and exchange controls; |
|
|
| rates of inflation; |
|
|
| challenges in collecting accounts receivable; |
|
|
| cultural and language differences; |
|
|
| employment regulations; |
|
|
| underdeveloped or unpredictable legal or regulatory systems; |
|
|
| corruption; |
|
|
| protection of intellectual property; |
|
42
|
| social unrest, crime, strikes, riots and civil disturbances; |
|
|
| regime changes and political upheaval; |
|
|
| terrorist attacks, natural disasters, widespread health emergencies
and wars; and |
|
|
| deterioration of political relations with the UnitedStates. |
|
We may not be able to adequately address these
additional risks. If we were unable to do so, we may be unable to complete such initial business combination, or, if we complete such
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 another jurisdiction,
which may result in taxes imposed on shareholders or Share Rights 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 ClassB ordinary shares will be entitled to vote prior to our initial business combination),
reincorporate in the jurisdiction in which the target company or business is located or in another jurisdiction. The transaction may require
a shareholder or Share Right holder to recognize taxable income in the jurisdiction in which the shareholder or Share Right 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 Share Right holders to pay such taxes. Shareholders or Share Right
holders may be subject to withholding taxes or other taxes with respect to their ownership of our ClassA ordinary shares or Share
Rights after the reincorporation.
****
**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 UnitedStates. The inability to enforce
or obtain a remedy under any of our future agreements could result in a significant loss of business, business opportunities or capital.
****
43
****
**We are subject to changing law and regulations
regarding regulatory matters, corporate governance and public disclosure that have increased both our costs and the risk ofnon-compliance.**
We are subject to rules and regulations by various
governing bodies, including, for example, the SEC, which are charged with the protection of investors and the oversight of companies whose
securities are publicly traded, and to new and evolving regulatory measures under applicable law. Our efforts to comply with new and changing
laws and regulations have resulted in and are likely to continue to result in, increased general and administrative expenses and a diversion
of management time and attention from revenue-generatingactivities 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.
****
**If our management following our initial business
combination is unfamiliar with UnitedStates securities laws, they may have to expend time and resources becoming familiar with such
laws, which could lead to various regulatory issues.**
Following our initial business combination, our
management may resign from their positions as officers or directors of the company and the management of the target business at the time
of the business combination will remain in place. Management of the target business may not be familiar with UnitedStates securities
laws. If new management is unfamiliar with UnitedStates securities laws, they may have to expend time and resources becoming familiar
with such laws. This could be expensive and time-consumingand could lead to various regulatory issues which may adversely affect
our operations.
****
**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.
****
44
****
**Risks Relating to our Management Team**
****
**We are dependent upon our 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 officers and directors. We believe that our success depends on the continued service
of our officers and directors, at least until we have completed our initial business combination. In addition, our 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-maninsurance on the life of, any of our directors or officers. The unexpected
loss of the services of one or more of our directors or officers could have a detrimental effect on us.
****
**The ownership interest of our sponsor may change,
and our sponsor may divest its ownership interest in us before identifying a business combination, which could deprive us of key personnel
and advisors.**
Our sponsor is a limited liability company of
which Mr.Ranadiv, Chairman of our board of directors and President, Mr.Patel, our Chief Executive Officer and director,
and Mr.Dong, our Chief Investment Officer, are the managing members. Messrs. Ranadiv, Patel and Dong hold voting and investment
discretion with respect to the ordinary shares, private placement units or securities held of record by the sponsor, and all our officers
and directors as well as the non-managingsponsor investors individual economic interests in our sponsor. Each of our officers
and directors and the non-managingsponsor investors membership interests in our sponsor tracks our underlying securities
on a 1:1 basis. However, this may change as there are no contractual restriction on the sponsors, Messrs. Ranadivs,
Patels or Dongs nor the non-managingsponsor investors ability, acting together, to share, sell or otherwise
dispose of part or all of the interests in our sponsor or held by our sponsor. As a result, there is a risk that our sponsor (or Messrs.
Ranadiv, Patel or Dong, acting together) may divest their ownership or economic interests in us or in the sponsor before a business
combination target is identified, which would likely result in our loss of certain key personnel or advisors, including Messrs. Ranadiv,
Patel and Dong. Additionally, there can be no assurance that any replacement sponsor or management team will successfully identify a business
combination target for us, or, even if one is so identified, successfully complete such business combination.
****
**Our ability to successfully effect our initial
business combination and to be successful thereafter will be dependent upon the efforts of our key personnel, some of whom may join us
following our initial business combination. The loss of key personnel could negatively impact the operations and profitability of ourpost-combinationbusiness.**
Our ability to successfully effect our initial
business combination is dependent upon the efforts of our key personnel. The role of our key personnel in the target business, however,
cannot presently be ascertained. Although some of our key personnel may remain with the target business in senior management 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.
****
45
****
**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 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 officers and directors are not required to,
and will not, commit their full time to our affairs, which may result in a conflict of interest in allocating their time between our operations
and our search for a business combination and their other businesses. We do not intend to have any full-timeemployees prior to the
completion of our initial business combination. Each of our officers is engaged in other business endeavors for which he may be entitled
to substantial compensation, and our officers are not obligated to contribute any specific number ofhours per week to our affairs.
Our independent directors also serve as officers and board members for other entities. If our officers and directors other
business affairs require them to devote substantial amounts of time to such affairs in excess of their current commitment levels, it could
limit their ability to devote time to our affairs which may have a negative impact on our ability to complete our initial business combination.
Any such companies, businesses or investments may present additional conflicts of interest in pursuing an initial business combination
target. Therefore, any such potential conflicts could materially affect our ability to complete our business combination.
****
**Our officers and directors presently have,
and any of them in the future may have additional, fiduciary or contractual obligations to other entities, including other blank check
companies, and, accordingly, may have conflicts of interest in allocating their time and in determining to which entity a particular business
opportunity should be presented.**
Until we consummate our initial business combination,
we intend to engage in the business of identifying and combining with one or more businesses. Our sponsor, its managing member, and our
officers and directors are, or may in the future become, affiliated with 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 future blank check companies. As a result, our sponsor, officers and directors may pursue business combinations for
blank check companies that it may sponsor 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. Each of our officers and directors presently has, and any
of them in the future may have additional, fiduciary, contractual or other obligations or duties to one or more other entities pursuant
to which such officer or director is or will be required to present a business combination opportunity to such entities. Accordingly,
if any of our officers or directors becomes aware of a business combination opportunity which is suitable for an entity to which he or
she has then current fiduciary or contractual obligations, he or she will honor his or her fiduciary or contractual obligations to present
such business combination opportunity to such other entity, subject to their fiduciary duties under Cayman Islands law. Our amended and
restated memorandum and articles of association provide that, to the fullest extent permitted by 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. Therefore, any such potential conflicts could materially
affect our ability to complete our business combination.
****
46
**Our 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, directors, officers the non-managingsponsor investors, or
any of their respective affiliates although we do not intend to do so. Nor do we have a policy that expressly prohibits any such persons
from engaging for their own account in business activities of the types conducted by us. Accordingly, such persons or entities may have
a conflict between their interests and ours. Any such companies, businesses or investments may present additional conflicts of interest
in pursuing an initial business combination target.
The personal and financial interests of our directors
and officers may influence their motivation in timely identifying and selecting a target business and completing a business combination.
Consequently, our directors and officers discretion in identifying and selecting a suitable target business may result in
a conflict of interest when determining whether the terms, conditions and timing of a particular business combination are appropriate
and in our shareholders best interest. If this were the case, it would be a breach of their fiduciary duties to us as a matter
of Cayman Islands law and we or our shareholders might have a claim against such individuals for infringing on our shareholders
rights. Therefore, any such potential conflicts could materially affect our ability to complete our business combination. However, we
might not ultimately be successful in any claim we may make against them for such reason.
****
**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 has, and may lead to, media coverage and public awareness. As
a result, members of our management team and affiliated companies may have been, and may in the future be, involved in civil disputes
or governmental investigations unrelated to our business. Any such claims or investigations may be detrimental to our reputation and could
negatively affect our ability to identify and complete an initial business combination and may have an adverse effect on the price of
our securities.
****
47
****
**Our letter agreement with our sponsor, officers
and directors may be amended without shareholder approval.**
Our letter agreement with our sponsor, officers
and directors contains provisions relating to transfer restrictions of our founder shares and private placement units, indemnification
of the trust account, waiver of redemption rights and participation in liquidating distributions from the trust account. The letter agreement
may be amended without shareholder approval (although releasing the parties from the restriction not to transfer the founder shares for
185days following the date of the initial public offering will require the prior written consent of the underwriter). While we do
not expect our board to approve any amendment to the letter agreement prior to our initial business combination, it may be possible that
our board, in exercising its business judgment and subject to its fiduciary duties, chooses to approve one or more amendments to the letter
agreement. Any such amendments to the letter agreement would not require approval from our shareholders and may have an adverse effect
on the value of an investment in our securities.
****
**Risks 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 Share Rights, 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 ClassA ordinary shares that such shareholder properly elected to redeem, subject to the limitations
and on the conditions 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 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 by May 27, 2027 or (B)with respect to any other material provisions relating to shareholders
rights or pre-initialbusiness combination activity; and (iii)the redemption of our public shares if we are unable to complete
an initial business combination by May 27, 2027, subject to applicable law and as further described herein. In no other circumstances
will a public shareholder have any right or interest of any kind in the trust account. Holders of Share Rights will not have any right
to the proceeds held in the trust account with respect to the Share Rights. Accordingly, to liquidate your investment, you may be forced
to sell your public shares or Share Rights, 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, ClassA ordinary shares and Share
Rights are listed on Nasdaq. Although after giving effect to our initial public offering we expect to meet, on a pro forma basis, the
minimum initial listing standards set forth in Nasdaq listing standards, we cannot assure you that our securities will be, or will continue
to be, listed on Nasdaq in the future or prior to our initial business combination. In order to continue listing our securities on Nasdaq
prior to our initial business combination, we must maintain certain financial, distribution and share price levels. Generally, we must
maintain a minimum market value of listed securities (generally $50,000,000) and a minimum number of holders of our securities (generally
400 public holders). 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. For instance, unless we decide to list on a different Nasdaq tier such
as the Nasdaq Capital Market which has different initial listing requirements, our share price would generally be required to be at least
$4.00 per share and we would be required to have a minimum of 400 round lot holders of our securities. 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-countermarket. 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; |
|
48
|
| a determination that our ClassA ordinary shares are
a penny stock which will require brokers trading in our ClassA 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 Actof1996,
which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which are referred to as covered
securities. Because we expect that our units and eventually our ClassA ordinary shares and Share Rights will be listed on
Nasdaq, our units, ClassA ordinary shares and Share Rights will qualify as covered securities under the statute. Although the states
are preempted from regulating the sale of our securities, the federal statute does allow the states to investigate companies if there
is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the states can regulate or bar the sale of covered securities
in a particular case. While we are not aware of a state having used these powers to prohibit or restrict the sale of securities issued
by blank check companies, other than the State of Idaho, certain state securities regulators view blank check companies unfavorably and
might use these powers, or threaten to use these powers, to hinder the sale of securities of blank check companies in their states. Further,
if we were no longer listed on 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.
****
**Amarket for our securities and a market
for our securities may not develop, which would adversely affect the liquidity and price of our securities.**
The price of our securities may vary significantly
due to one or more potential business combinations and general market or economic conditions, including as a result of geopolitical events
like the conflicts in Ukraine, the Middle East and Southwest Asia, and economic impacts such as inflation. Furthermore, an active trading
market for our securities may never develop or, if developed, it may not be sustained. You may be unable to sell your securities unless
a market can be established and sustained.
****
**Because we are incorporated under the laws
of the Cayman Islands, you may face difficulties in protecting your interests, and your ability to protect your rights through the U.S.Federal
courts may be limited.**
We are an exempted company incorporated under
the laws of the Cayman Islands. As a result, it may be difficult for investors to effect service of process within the UnitedStates
upon our directors or officers, or enforce judgments obtained in the UnitedStates courts against our directors or officers.
Our corporate affairs will be governed by our
amended and restated memorandum and articles of association, the Companies Act (as the same may be supplemented or amended from time to
time) and the common law of the Cayman Islands. We will also be subject to the federal securities laws of the UnitedStates. The
rights of shareholders to take action against the directors, actions by minority shareholders and the fiduciary responsibilities of our
directors to us under Cayman Islands law are to a large extent governed by the common law of the Cayman Islands. The common law of the
Cayman Islands is derived in part from comparatively limited judicial precedent in the Cayman Islands as well as from English common law,
the decisions of whose courts are of persuasive authority, but are not binding on a court in the Cayman Islands.
The rights of our shareholders and the fiduciary
responsibilities of our directors under Cayman Islands law are different from what they would be under statutes or judicial precedent
in some jurisdictions in the UnitedStates. In particular, the Cayman Islands has a different body of securities laws as compared
to the UnitedStates, and certain states, such as Delaware, may have more fully developed and judicially interpreted bodies of corporate
law. In addition, Cayman Islands companies may not have standing to initiate a shareholders derivative action in a Federal court of the
UnitedStates.
49
We have been advised by Mourant Ozannes (Cayman)
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 UnitedStates predicated upon the civil liability provisions of the federal securities laws of the UnitedStates
or any state; and (ii)in original actions brought in the Cayman Islands, to impose liabilities against us predicated upon the civil
liability provisions of the federal securities laws of the UnitedStates or any state, so far as the liabilities imposed by those
provisions are penal in nature. In those circumstances, although there is no statutory enforcement in the Cayman Islands of judgments
obtained in the UnitedStates, the courts of the Cayman Islands will recognize and enforce a foreign money judgment of a foreign
court of competent jurisdiction without retrial on the merits based on the principle that a judgment of a competent foreign court imposes
upon the judgment debtor an obligation to pay the sum for which judgment has been given provided certain conditions are met. For a foreign
judgment to be enforced in the Cayman Islands, such judgment must be final and conclusive and for a liquidated sum, and must not be in
respect of taxes or a fine or penalty, inconsistent with a Cayman Islands judgment in respect of the same matter, impeachable on the grounds
of fraud or obtained in a manner, or be of a kind the enforcement of which is, contrary to natural justice or the public policy of the
Cayman Islands (awards of punitive or multiple damages may well be held to be contrary to public policy). A Cayman Islands Court may stay
enforcement proceedings if concurrent proceedings are being brought elsewhere.
As a result of all of the above, public shareholders
may have more difficulty in protecting their interests in the face of actions taken by management, members of the board of directors or
controlling shareholders than they would as public shareholders of a UnitedStates company.
****
**After our initial business combination, it
is possible that a majority of our directors and officers will live outside the UnitedStates and all of our assets will be located
outside the UnitedStates; therefore, investors may not be able to enforce federal securities laws or their other legal rights.**
It is possible that after our initial business
combination, a majority of our directors and officers will reside outside of the UnitedStates and all of our assets will be located
outside of the UnitedStates. As a result, it may be difficult, or in some cases not possible, for investors in the UnitedStates
to enforce their legal rights, to effect service of process upon all of our directors or officers or to enforce judgments of UnitedStates
courts predicated upon civil liabilities and criminal penalties on our directors and officers under UnitedStates laws.
****
**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 ClassA 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 a staggered board of directors and 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.
****
50
****
**Our amended and restated memorandum and articles
of association provide that the courts of the Cayman Islands will be the exclusive forums for certain disputes between us and our shareholders,
which could limit our shareholders ability to obtain a favorable judicial forum for complaints against us or our directors, officers
or employees.**
Our amended and restated memorandum and articles
of association provide that unless we consent in writing to the selection of an alternative forum, the courts of the Cayman Islands shall
have exclusive jurisdiction over any claim or dispute arising out of or in connection with our amended and restated memorandum and articles
of association or otherwise related in any way to each shareholders shareholding in us, including but not limited to (i)any
derivative action or proceeding brought on our behalf, (ii)any action asserting a claim of breach of any fiduciary or other duty
owed by any of our current or former 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 UnitedStates of America) and that each shareholder irrevocably submits to the exclusive jurisdiction of the courts of the
Cayman Islands over all such claims or disputes. The forum selection provision in our amended and restated memorandum and articles of
association will not apply to actions or suits brought to enforce any liability or duty created by the Securities Act, ExchangeAct
or any claim for which the federal district courts of the UnitedStates of America are, as a matter of the laws of the UnitedStates
of America, the sole and exclusive forum for determination of such a claim.
Our amended and restated memorandum and articles
of association also provide that, without prejudice to any other rights or remedies that we may have, each of our shareholders acknowledges
that damages alone would not be an adequate remedy for any breach of the selection of the courts of the Cayman Islands as exclusive forum
and that accordingly we shall be entitled, without proof of special damages, to the remedies of injunction, specific performance or other
equitable relief for any threatened or actual breach of the selection of the courts of the Cayman Islands as exclusive forum.
This choice of forum provision may increase a
shareholders cost and limit the shareholders ability to bring a claim in a judicial forum that it finds favorable for disputes
with us or our directors, officers or other employees, which may discourage lawsuits against us and our directors, officers and other
employees. Any person or entity purchasing or otherwise acquiring any of our shares or other securities, whether by transfer, sale, operation
of law or otherwise, shall be deemed to have notice of and have irrevocably agreed and consented to these provisions. There is uncertainty
as to whether a court would enforce such provisions, and the enforceability of similar choice of forum provisions in other companies
charter documents has been challenged in legal proceedings. It is possible that a court could find this type of provisions to be inapplicable
or unenforceable, and if a court were to find this provision in our amended and restated memorandum and articles of association to be
inapplicable or unenforceable in an action, we may incur additional costs associated with resolving the dispute in other jurisdictions,
which could have adverse effect on our business and financial performance.
****
**We may amend the terms of the Share Rights
in a manner that may be adverse to holders of public Share Rights with the approval by the holders of at least 50% of thethen-outstandingpublic
Share Rights. As a result, the exercise price of your Share Rights could be increased, the exercise period could be shortened and the
number of ClassA ordinary shares purchasable upon conversion of a Share Right could be decreased, all without your approval.**
Our Share Rights are issued in registered form
under a Share Rights Agreement between Efficiency, as Rights agent, and us. The Share Rights Agreement provides that the terms of the
Share Rights 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 Share Rights Agreement to the description of the terms of the Share Rights
and the Share Rights Agreement set forth in this Annual Report or (ii)adding or changing any provisions with respect to matters
or questions arising under the Share Rights Agreement as the parties to the Share Rights Agreement may deem necessary or desirable and
that the parties deem to not adversely affect the rights of the registered holders of the Share Rights, provided that the approval by
the holders of at least 50% of the then-outstandingpublic Share Rights is required to make any change that adversely affects the
interests of the registered holders of public Share Rights. Accordingly, we may amend the terms of the public Share Rights in a manner
adverse to a holder of public Share Rights if holders of at least 50% of the then-outstandingpublic Share Rights approve of such
amendment. Although our ability to amend the terms of the public Share Rights with the consent of at least 50% of the then-outstandingpublic
Share Rights is unlimited, examples of such amendments could be amendments to, among other things, convert the Share Rights into cash
or another security or decrease the number of ClassA ordinary shares exchangeable upon conversion of a Share Right.
****
51
****
**OurShare Rights Agreement designates
the courts of the State of NewYork or the UnitedStates District Court for the Southern District of NewYork as the sole
and exclusive forum for certain types of actions and proceedings that may be initiated by holders of our Share Rights, which could limit
the ability of Share Right holders to obtain a favorable judicial forum for disputes with our company.**
Our Share Rights 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 Share Rights Agreement,
including under the Securities Act, will be brought and enforced in the courts of the State of NewYork or the UnitedStates
District Court for the Southern District of NewYork, and (ii)that we irrevocably submit to such jurisdiction, which jurisdiction
shall be the exclusive forum for any such action, proceeding or claim. We will waive any objection to such exclusive jurisdiction and
that such courts represent an inconvenient forum. 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. Section22
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.
Notwithstanding the foregoing, these provisions
of the Share Rights Agreement will not apply to suits brought to enforce any liability or duty created by the ExchangeAct or any
other claim for which the federal district courts of the UnitedStates of America are the sole and exclusive forum. Any person or
entity purchasing or otherwise acquiring any interest in any of our Share Rights shall be deemed to have notice of and to have consented
to the forum provisions in our Share Rights Agreement. If any action, the subject matter of which is within the scope the forum provisions
of the Share Rights Agreement, is filed in a court other than a court of the State of NewYork or the UnitedStates District
Court for the Southern District of NewYork (a foreign action) in the name of any holder of our Share Rights, such
holder shall be deemed to have consented to: (x)the personal jurisdiction of the state and federal courts located in the State of
NewYork in connection with any action brought in any such court to enforce the forum provisions (an enforcement action);
and (y)having service of process made upon such Share Right holder in any such enforcement action by service upon such Share Right
holders counsel in the foreign action as agent for such Share Right holder. This choice-of-forumprovision may limit a Share
Right holders ability to bring a claim in a judicial forum that it finds favorable for disputes with our company, which may discourage
such lawsuits. Alternatively, if a court were to find this provision of our Share Rights Agreement inapplicable or unenforceable with
respect to one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such
matters in other jurisdictions, which could materially and adversely affect our business, financial condition and results of operations
and result in a diversion of the time and resources of our management and board of directors.
****
**Because each unit contains one right to receive
one tenth (1/10) of one ClassA ordinary share upon the consummation of our initial business combination, and only whole shares will
be issued in exchange for Share Rights, the units may be worth less than units of other special purpose acquisition companies.**
Except in cases where we are not the surviving
company in a business combination, each holder of a Share Right will automatically receive one tenth (1/10) of one ClassA ordinary
share upon consummation of our initial business combination. In the event we will not be the surviving company upon completion of our
initial business combination, each holder of a Share Right will be required to affirmatively convert its Share Rights in order to receive
the one tenth (1/10) of one ClassA ordinary share underlying each Share Right upon consummation of the business combination. We
will not issue fractional shares in connection with an exchange of Share Rights.
As a result, you must hold Share Rights in multiples
of 10 in order to receive ClassA ordinary shares for all of your Share Rights upon closing of a business combination. If we are
unable to complete an initial business combination within the required time period and we redeem the public shares for the funds held
in the trust account, holders of Share Rights will not receive any of such funds for their Share Rights and the Share Rights will expire
worthless.
****
52
****
**Holders of ClassA ordinary shares will
not be entitled to vote on continuing the company in a jurisdiction outside of the Cayman Islands.**
As holders of our ClassA ordinary shares,
our public shareholders will not have the right to vote on continuing the company in a jurisdiction outside of the Cayman Islands (including
any special resolution required to amend our constitutional documents or to adopt new constitutional documents, in each case, as a result
of our approving a transfer by way of continuation in a jurisdiction outside of the Cayman Islands).
****
**The grant of registration rights to our sponsor
and other holders of our private placement units may make it more difficult to complete our initial business combination, and the future
exercise of such rights may adversely affect the market price of our ClassA ordinary shares.**
Pursuant to an agreement entered into at the time
of our initial public offering, our sponsor and its permitted transferees can demand that we register the ClassA ordinary shares
into which founder shares are convertible, holders of our private placement units and their permitted transferees can demand that we register
the private placement units and the ClassA ordinary shares underlying the private placement units issuable upon exercise of the
private placement rights 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, Share Rights or the ClassA ordinary shares issuable upon exercise of such Share
Rights 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 ClassA 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 ClassA ordinary shares that is expected when the ordinary shares owned by our initial
shareholders, holders of our private placement units or holders of our working capital loans or their respective permitted transferees
are registered.
****
**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. 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.
****
53
**Past performance by 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, may not be indicative of future performance of an investment in the company.**
Information regarding 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, 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 UnitedStates federal income tax consequences to U.S.investors.**
As used herein, the term U.S. Holder
means a beneficial owner of units, ordinary shares or warrants who or that is for U.S. federal income tax purposes: (1) an individual
citizen or resident of the United States; (2) a corporation (or other entity treated as a corporation for U.S. federal income tax purposes)
that is created or organized (or treated as created or organized) in or under the laws of the United States, any state thereof or the
District of Columbia; (3) an estate the income of which is subject to U.S. federal income taxation regardless of its source; or (4) a
trust if (A) a court within the United States is able to exercise primary supervision over the administration of the trust and one or
more U.S. persons have the authority to control all substantial decisions of the trust, or (B) it has in effect a valid election to be
treated as a U.S. person.
54
If we are a PFIC for any taxable year (or portion
thereof) that is included in the holding period of a U.S.Holderof our ClassA ordinary shares or Share Rights, the U.S.Holder
may be subject to adverse U.S.federal income tax consequences and may be subject to additional reporting requirements. Our PFIC
status for our current and subsequent taxableyears may depend on whether we qualify for the PFIC start-upexception. Depending
on the particular circumstances the application of the start-upexception may be subject to uncertainty, and there cannot be any
assurance that we will qualify for the start-upexception. Our actual PFIC status for any taxable year, however, will not be determinable
until after the end of such taxable year (and, in the case of the start-upexception, potentially not until after the two taxableyears
following our current taxable year). Accordingly, there can be no assurances with respect to our status as a PFIC for our current taxable
year or any subsequent taxable year. Moreover, if we determine we are a PFIC for any taxable year, upon written request, we will endeavor
to provide to a U.S.Holder such information as the 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 would be unavailable with respect to our Share Rights in all cases. We urge
U.S.investors to consult their own tax advisors regarding the possible application of the PFIC rules.
****
**If our initial business combination involves
a company organized under the laws of the UnitedStates (or any subdivision thereof), a U.S.federal excise tax could be imposed
on us in connection with any redemptions of our ClassA ordinary shares after or in connection with such initial business combination.**
The Inflation Reduction Actof2022
provides for, among other things, a new 1% U.S.federal excise tax on certain repurchases (including redemptions) of stock by publicly
traded U.S.corporations after December31, 2022 (the stock buyback tax), subject to certain exceptions (and other
rules that may significantly reduce the amount of any stock buyback tax liability). If applicable, the amount of the stock buyback tax
is generally 1% of the aggregate fair market value of any stock repurchased by the corporation during a taxable year, net of the aggregate
fair market value of certain new stock issuances by the repurchasing corporation during the same taxable year. The Biden administration
has proposed increasing the stock buyback tax rate from 1% to 4%; however, it is unclear whether such a change will be enacted and, if
enacted, how soon it could take effect. In addition, the U.S.Treasury Department and IRS have released proposed regulations that
would potentially cause a non-U.S.corporations U.S.subsidiaries to be subject to the stock buyback tax with respect
to any share repurchases made by the non-U.S.corporation under certain circumstances. The stock buyback tax is imposed on the repurchasing
corporation and not on its stockholders.
As an entity incorporated as a Cayman Islands
exempted company, the stock buyback tax is currently not expected to apply to redemptions of our ClassA ordinary shares (absent
any further regulations or other additional guidance that may be issued in the future). However, in connection with an initial business
combination involving a company organized under the laws of the UnitedStates (or any subdivision thereof), it is possible that we
could domesticate and continue as a Delaware corporation prior to certain redemptions. Because we expect that, following such a domestication,
our securities would continue to trade on Nasdaq, in such a case we could be subject to the stock buyback tax with respect to any subsequent
redemptions that are treated as repurchases for this purpose (which may include redemptions in connection with our initial business combination,
depending on the details of such business combination). In all cases, whether and to what extent we would be subject to the stock buyback
tax will depend on a number of factors, including (i)the structure and other details of the initial business combination, including
the extent to which the initial business combination involves a U.S.corporation and the extent to which we issue shares in the initial
business combination or otherwise during the same taxable year that are eligible to offset any redemptions or other repurchases, (ii)the
fair market value of the shares redeemed and (iii)the extent such redemptions could be treated as dividends and not as repurchases.
The applicability of the stock buyback tax to us could be further affected by the content of the final regulations and any clarifications
or other additional guidance from the U.S.Treasury Department that may be issued and applicable to the redemptions. In no event
would we withdraw interest earned on amounts held in the trust account to pay any stock buyback tax.
Any stock buyback taxes we incur could reduce
the amount of cash available to pay redemptions or to transfer to the target business in connection with our initial business combination,
which could result in our inability to meet conditions in the agreement relating to our initial business combination related to a minimum
cash requirement, if any, or otherwise result in the shareholders of the combined company (including any of our shareholders who do not
exercise their redemption rights in connection with the initial business combination) to economically bear the impact of such stock buyback
tax.
****
55
****
**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 Section404 of the Sarbanes-OxleyAct,
reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the
requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments
not previously approved. As a result, our shareholders may not have access to certain information they may deem important. We could be
an emerging growth company for up to fiveyears, although circumstances could cause us to lose that status earlier, including if
the market value of our ClassA ordinary shares held by non-affiliatesexceeds $700million as of any June30thbefore
that time, in which case we would no longer be an emerging growth company as of the following December31st. We cannot
predict whether investors will find our securities less attractive because we will rely on these exemptions. If some investors find our
securities less attractive as a result of our reliance on these exemptions, the trading prices of our securities may be lower than they
otherwise would be, there may be a less active trading market for our securities and the trading prices of our securities may be more
volatile.
Further, Section102(b)(1)of the JOBS
Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies
(that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered
under the ExchangeAct) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that
a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerginggrowth
companies but any such an election to opt out is irrevocable. We have elected not to opt out of such extended transition period which
means that when a standard is issued or revised and it has different application dates for public or private companies, we, as an emerging
growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison
of our financial statements with another public company which is neither an emerging growth company nor an emerging growth company which
has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards
used.
Additionally, we are a smaller reporting
company as defined in Item10(f)(1)of RegulationS-K.Smaller reporting companies may take advantage of certain
reduced disclosure obligations, including, among other things, providing only twoyears of audited financial statements. We will
remain a smaller reporting company until the lastday of the fiscal year in which (1)the market value of our ordinary shares
held by non-affiliatesis equal to or exceeds $250million as of the prior June30th, or (2)our annual
revenues equaled or exceeded $100million during such completed fiscal year and the market value of our ordinary shares held by non-affiliatesis
equal to or exceeds $700million as of the prior June30. To the extent we take advantage of such reduced disclosure obligations,
it may also make comparison of our financial statements with other public companies difficult or impossible.
****
56
**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-businesscombination 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-businesscombinations
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-businesscombination
entity may need to purchase additional insurance with respect to any such claims (run-offinsurance). The need for
run-offinsurance would be an added expense for the post-businesscombination entity, and could interfere with or frustrate
our ability to consummate an initial business combination on terms favorable to our investors.
****
**Increases in inflation in the UnitedStates
and elsewhere could make it more difficult for us to complete our initial business combination.**
Increases in inflation in the UnitedStates
and elsewhere may lead to increased price volatility for publicly traded securities, including ours, or other national, regional or international
economic disruptions, any of which could make it more difficult for us to complete our initial business combination.
****
57
****
**ITEM 1B. UNRESOLVED STAFF COMMENTS**
None.
****
**ITEM 1C. CYBERSECURITY**
We are a special purpose
acquisition company with no business operations. Since our initial public offering, our sole business activity has been identifying and
evaluating suitable acquisition transaction candidates. Therefore, we do not consider that we face significant cybersecurity risk and
have not adopted any cybersecurity risk management program or formal processes for assessing cybersecurity risk. Our board of directors
is generally responsible for the oversight of risks from cybersecurity threats, if any. We have not encountered any cybersecurity incidents
since our initial public offering.
****
**ITEM 2. PROPERTIES**
We currently utilize office
space at 2440 Sand Hill Road Suite 101, Menlo Park, CA94025, and our telephone number is (415)692-7762, provided by an affiliate
of our sponsor free of charge. 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.
****
**ITEM 4. MINE SAFETY DISCLOSURES**
Not applicable.
****
58
**PART II**
****
**ITEM 5. MARKET FOR REGISTRANTS COMMON
EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES**
Our equity securities trade
on the Nasdaq Global Market. Each of our units consists of one Class A ordinary share and one right and, commencing on May 27, 2025, trades
on the Nasdaq Global Market under the symbol CRAQU. The ordinary shares and rights underlying our units are trading separately
on the Nasdaq Global Market under the symbols CRA and CRAQR, respectively.
****
**Holders of Record**
On March 23, 2026, there
was 4 holders of record of our units, 1 holder of record of our Class A ordinary shares and 4 holders of our Class B ordinary shares,
and 1 holder of record of our Share Rights. Such numbers do not include beneficial owners holding our securities through nominee names.
****
**Dividends**
We have not paid any cash
dividends on our ordinary shares to date and do not intend to pay cash dividends prior to the completion of our initial business combination.
The payment of any dividends
subsequent to a business combination will be within the discretion of our board of directors at such time and we will only pay such dividend
out of our profits or share premium (subject to solvency requirements) as permitted under Cayman Islands Law. It is the present intention
of our board of directors to retain all earnings, if any, for use in our business operations and, accordingly, our board of directors
does not anticipate declaring any dividends in the foreseeable future. In addition, our board of directors is not currently contemplating
and does not anticipate declaring any share dividends in the foreseeable future. Further, the ability to pay such dividends in kind at
the combined companys option may result in dilution to existing shareholders. If we incur any indebtedness in connection with our
initial business combination, our ability to declare dividends may be limited by restrictive covenants we may agree to in connection therewith.
****
**Use of Proceeds from our Initial Public Offering**
On May 27, 2025, we consummated
the initial public offering of 23,000,000 units, which included the full exercise of the underwriters over-allotment option. The
units were sold at an offering price of $10.00 per unit, generating gross proceeds of $230,000,000. Cohen acted as lead book-running manager
and Seaport acted as joint book runner of the initial public offering. The securities in the offering were registered under the Securities
Act on a registration statement on Form S-1 (File No. 333-285517). The SEC declared the registration statement effective on May 22, 2025.
Simultaneously with the closing
of the initial public offering, we consummated the sale of an aggregate of 660,000 private placement units to the Sponsor and the underwriters
at a price of $10.00 per unit in a private placement, generating gross proceeds of $6,600,000. Each unit consists of one Class A ordinary
share and one right entitling the holder thereof to receive tenth (1/10) of one Class A ordinary share upon the consummation of an initial
business combination. Management has broad discretion with respect to the specific application of the net proceeds of the initial public
offering and the private placement units, although substantially all of the net proceeds are intended to be generally applied toward consummating
a business combination (less deferred underwriting commissions). The foregoing issuances were made pursuant to the exemption from registration
contained in Section 4(a)(2) of the Securities Act.
Of the gross proceeds received
from the initial public offering and the proceeds of the sale of the private placement units, an aggregate of $230,000,000 was placed
in the trust account.
59
We paid a total of $14,320,654,
consisting of $4,600,000 of cash underwriting fee, $9,200,000 of deferred underwriting fee, and $520,654 of other offering costs.
**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
Annual Report on Form 10-K. Certain information contained in the discussion and analysis set forth below includes forward-looking statements.
Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including
those set forth under Special Note Regarding Forward-Looking Statements, Item 1A. Risk Factors and elsewhere
in this Annual Report on Form 10-K.
**Overview**
We are a blank check company
incorporated in the Cayman Islands on January7, 2025 formed for the purpose of effecting a merger, amalgamation, share exchange,
asset acquisition, share purchase, reorganization or other similar business combination with one or more businesses. We intend to effectuate
our business combination using cash derived from the proceeds of the initial public offering and the sale of the private placement units,
our shares, debt or a combination of cash, shares and debt.
We expect to continue to
incur significant costs in the pursuit of our acquisition plans. We cannot assure you that our plans to complete a business combination
will be successful.
**Results of Operations**
We have neither engaged
in any operations nor generated any revenues to date. Our only activities from January7, 2025 (inception) through December 31, 2025
were organizational activities, those necessary to prepare for the initial public offering, described below, and, after our initial public
offering, identifying a target company for a business combination. We do not expect to generate any operating revenues until after the
completion of our business combination. Subsequent to the initial public offering, we generate non-operating income in the form of interest
income on marketable securities held in the trust account. We incur expenses as a result of being a public company (for legal, financial
reporting, accounting and auditing compliance), as well as for due diligence expenses.
For the period from January7,
2025 (inception) through December 31, 2025, we had a net income $5,054,949, which consisted of earnings on investments held in Trust Account
of $5,633,565 and interest income from bank operating account of $26,678 offset by compensation expense of $132,300, bank service fees
of $5,000, and general and administrative costs of $467,994.
**Liquidity and Capital Resources**
Until the consummation of
the initial public offering, our only source of liquidity was an initial purchase of ClassB ordinary shares, par value $0.0001 per
share, by the Sponsor and loans from the Sponsor.
On May 27, 2025, we consummated
the initial public offering of 23,000,000 units, at $10.00 per unit, which includes the full exercise by the underwriters of their over-allotment
option in the amount of 3,000,000 units, generating gross proceeds of $230,000,000. Simultaneously with the closing of the initial public
offering, we consummated the sale of an aggregate of 660,000 private placement units at a price of $10.00 per private placement unit,
generating gross proceeds of $6,600,000.
60
Following the initial public
offering, the full exercise of the over-allotment option, and the sale of the units, a total of $230,000,000 was placed in the trust account.
We incurred transaction costs of $14,320,654, consisting of $4,600,000 of cash underwriting fee, $9,200,000 of deferred underwriting fee,
and $520,654 of other offering costs.
For the period from January
7, 2025 (inception) through December 31, 2025, net cash used in operating activities was $446,485. Net income of $5,054,949 was affected
by payment of expense through promissory note related party of $36,220, earnings on investments held in Trust Account of $5,633,565
and compensation expense of $132,300. Changes in operating assets and liabilities used $36,389 of cash from operating activities.
As of December 31, 2025,
we had cash and investments held in the trust account of $235,633,565 consisting primarily of U.S. Treasury Bills. We may withdraw earnings
from the trust account to pay taxes, if any. We intend to use substantially all of the funds held in the trust account, including any
amounts representing 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 cash of $1,096,942. 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 $2,500,000 of such working capital loans may be convertible into private placement units of the post business combination entity at
a price of $10.00 per unit at the option of the lender. The units would be identical to the private placement units.
From time to time, our officers
and directors may pay expenses on behalf of the Company which may be in the form of non-interest bearing loans that are due on demand.
At December 31, 2025, we owed $29,694 to affiliates of the Company. We report this amount as due to affiliates on the Companys
balance sheet.
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.
61
**Off-Balance Sheet Financing Arrangements**
We have no obligations,
assets or liabilities, which would be considered off-balance sheet arrangements as of December 31, 2025. We do not participate in transactions
that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which
would have been established for the purpose of facilitating off-balance sheet arrangements. We have not entered into any off-balance sheet
financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any
non-financial assets.
**Contractual Obligations**
We do not have any long-term
debt, capital lease obligations.
The underwriters were entitled
to an underwriting discount of $0.20 per unit, or $4,600,000 in the aggregate, of which (i) $0.10 per unit, or $2,300,000 was paid to
the underwriters in cash upon the closing of the initial public offering and (ii) $0.10 per unit, or $2,300,000 was used by the underwriters
to purchase private placement units. In addition, the underwriters are entitled to a deferred fee of (i) $0.40 per unit sold in the initial
public offering, or up to $9,200,000 in the aggregate, payable based on the percentage of funds remaining in the trust account after redemptions
of public shares, solely in the event that the Company completes a business combination, subject to the terms of the underwriting agreement.
****
**Critical Accounting Estimates**
The preparation of financial
statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets
and liabilities at the date of the financial statements, and income and expenses during the periods reported. Making estimates requires
management to exercise significant judgement. It is at least reasonably possible that the estimate of the effect of a condition, situation
or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate,
could change in the near term due to one or more future confirming events. Accordingly, the actual results could materially differ from
those estimates. As of December 31, 2025, we did not have any critical accounting estimates to be disclosed other than discussed below.
At the date of the initial
public offering, May 27, 2025, the fair value of the public rights was determined based on the market value of the associated public units,
with a market adjustment which takes into account low market volatility, the likelihood of closing on a business combination and the possibility
of a post-acquisition decline in the stock price. The public rights have been classified within shareholders deficit and will not
require remeasurement after issuance.
****
**ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**
Not required for smaller
reporting companies.
**ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA**
This information appears following Item 15 of
this Report and is included herein by reference.
****
62
****
**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 controls
and other procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange
Act is recorded, processed, summarized and reported within the time periods specified in the SECs rules and forms. Disclosure controls
and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our
reports filed or submitted under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer
and Chief Financial Officer (together, the Certifying Officers), or persons performing similar functions, as appropriate,
to allow timely decisions regarding required disclosure.
Under the supervision and
with the participation of our management, including our Certifying Officers, we carried out an evaluation of the effectiveness of the
design and operation of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based
on the foregoing, our Certifying Officers concluded that our disclosure controls and procedures were effective as of the end of the quarterly
period ended December 31, 2025.
**Managements Report on Internal Controls
Over Financial Reporting**
This Annual Report 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 year that have materially affected, or are reasonably likely to materially affect, our internal control over financial
reporting.
**ITEM 9B. OTHER INFORMATION**
****
**Trading Arrangements**
****
No director or officer of
the Company adopted or terminated any contract, instruction or written plan for the purchase or sale of securities of the registrant intended
to satisfy the affirmative defense conditions of Rule 10b5-1(c); or any non-Rule 10b5-1 trading arrangement as defined in
paragraph (c) of Item 408 of Regulation S-K.
**ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS
THAT PREVENT INSPECTIONS.**
Not applicable.
****
63
****
**PART III**
****
**ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND
CORPORATE GOVERNANCE**
****
**Executive Officers and Directors**
Our executive officers and directors are as follows:
|
Name |
|
Age |
|
Position | |
|
Vivek Ranadiv |
|
67 |
|
Chairman of the Board and President | |
|
Daven Patel |
|
36 |
|
Chief Executive Officer and Director | |
|
James Chan |
|
46 |
|
Chief Financial Officer | |
|
Raymond Dong |
|
30 |
|
Chief Investment Officer | |
|
Eric C.W.Dunn |
|
67 |
|
Director | |
|
Sanjay Subhedar |
|
72 |
|
Director | |
|
Lori Wright |
|
48 |
|
Director | |
****
**Vivek Ranadiv**has served
as our Chairman and President since our inception. Mr.Ranadiv has been the Founder and Managing Director of Bow Capital
and its affiliated funds since 2016, and the Owner and Chairman of the Sacramento Kings since 2013. He founded his first company, Teknekron
Software Systems, Inc., in 1986 to develop and apply software to financial trading floors. After selling Teknekron to Reuters PLC in 1994,
he then went on to found and spin-outTIBCO as a separate company in 1997. TIBCO completed its initial public offering in 1999 and
was subsequently sold to Vista Equity Partners in 2014 for $4.3billion. As Chairman and Chief Executive Officer, Mr.Ranadiv
built TIBCO into a leading provider of middleware software that became the central data nervous system for many of the worlds largest
companies and government agencies. Mr.Ranadiv became involved in NBA basketball first as Vice Chairman of the Golden State
Warriors. Mr.Ranadiv formerly served on the boards of Nielsen, a global media company, and WebEx, a telecommunications company,
prior to its sale to Cisco. From August2020 to October2021, Mr.Ranadiv served as Chairman and Co-ChiefExecutive
Officer of BowX, a special purpose acquisition company and, following the consummation of BowXs business combination, he served
as a director of WeWork, Inc. from October2021 to August2023. Mr.Ranadiv holds a Bachelor of Science and a Master
of Arts in Electrical Engineering from the Massachusetts Institute of Technology and a Master of Business Administration from Harvard
Business School where he graduated as a Baker Scholar.
****
**Daven Patel**has served as our
Chief Executive Officer and director since our inception. Mr.Patel joined Bow Capital in 2020, where he serves as a Principal and
leads growth and private equity investing efforts. Prior to this, Mr.Patel held investing and operating roles in the Merchant Banking
Division at Goldman Sachs, TIBCO, and Dialpad, a high-growthsoftware-as-a-servicecompany. Mr.Patel also began his career
as an Analyst at Goldman Sachs. Mr.Patel holds a Bachelor of Science from the University of California, Berkeley.
****
**James Chan**has served as our
Chief Financial Officer since our inception. Mr.Chan brings over 20 years of experience in venture capital, private equity, and
multinational corporations. Since 2024, he has served as Chief Financial Officer of Bow Capital, where he oversees financial strategy,
fund management, and operational efficiency. In addition to his role at Bow Capital, Mr.Chan concurrently serves as Chief Financial
Officer of First Spark Ventures and Breakout Ventures since 2022, and of BankTech Ventures since 2022, where he manages complex financial
operations across multiple funds. Mr.Chan served as Chief Financial Officer of Yamaha Motor Ventures from 2019 to 2022, where he
led corporate venture capital and M&A initiatives. Previously, Mr.Chan held senior finance leadership roles at several multinational
corporations and high-growthventures, including ASSA ABLOY, Beats by Dre, and Zodiac Aerospace, where his duties spanned corporate
venture capital, M&A, financial strategy, and operational leadership, and he was involved in driving growth, executing strategic carve-outs,
and managing complex financial transformations. Mr.Chan holds a Master of Business Taxation from the University of Southern California
and dual Bachelor of Science degrees in Physiological Science and Business Economics from the University of California, Los Angeles.
****
64
****
**Raymond
Dong**has served as our Chief Investment Officer since our inception. Mr.Dong has extensive experience investing
and advising in the technology industry. He served as a Principal at Bow Capital from 2021 to January 2026, where he focused on
venture technology investments as well as opportunistic acquisitions. Prior to Bow Capital, from 2018 to 2021, he was an analyst at
Senator Investment Group (Senator), a long/short fundamental hedge fund covering healthcare technology and technology
public equities. At Senator, he was instrumental in utilizing alternative data (e.g. credit card data, web traffic) to inform
investment strategies. Prior to Senator, Mr.Dong was a consultant at McKinsey from 2016 through 2018 where he advised leading
healthcare companies on growth and analytics strategies. Mr.Dong has been a board member at National Security Group, Inc., an
insurance company based in Alabama. Mr.Dong holds a Bachelor of Arts in Economics from University of Chicago.
****
**Eric
C.W.Dunn***,*has served as a director since May 2025. Mr. Dunn has served as Chief
Executive Officer of Quicken Inc., a producer of personal finance software in the UnitedStates since April2016.
Mr.Dunn joined Intuit Inc., Quickens previous owner, in 1986 as employee number4. He spent a total of
20years at Intuit over his career, including as its Chief Financial Officer through its 1993 initial public offering, as a
software developer who worked on almost all of the early versions of Quicken, as the first general manager of the Quicken business,
as Intuits first Chief Technology Officer and finally as the leader of Intuits payments business. From 2003 to 2010,
Mr.Dunn was a General Partner at Cardinal Venture Capital, an investment firm. Mr.Dunn previously served as a director
of several public companies, including BowX, from August2020 to October2021, as well as TIBCO Software, Inc. Mr. Dunn
holds a B.A. from Harvard College and an MBA from Harvard Business School.
****
**Sanjay
Subhedar***,*has served as a director since May 2025. Mr. Subhedar founded Storm Ventures in
October2000, where he is currently a Managing Director Emeritus. Previously, he served as the chief operating officer
atE-TEKDynamics, afiber-opticcomponent manufacturer from December1997 to October 2000, playing a key
role in the companys growth from400 employees to over 5,000 employees in less than threeyears, in its initial
public offering in 1998 (Nasdaq:ETEK), as well as in its merger with JDS Uniphase in July2000. Prior to this,
Mr.Subhedar was the Chief Financial Officer for StrataCom, Inc. from its inception in January1986, through its initial
public offering in July1992 (Nasdaq:STRM) and until its merger with Cisco Systems in July1996. Following
StrataComs merger with Cisco Systems, in July1996 he served as Vice President of Ciscos WAN business unit until
October1997. Mr.Subhedar serves on the Advisory Board of the Kelly School Entrepreneurship Program. Mr.Subhedar
holds a BSc. from the University of Mumbai and an MBA from Indiana University, Bloomington, where he was inducted in the Indiana
University Presidents Circle in recognition of his support of the university.
****
**Lori
Wright***,*has served as a director since May 2025. Ms. Wright served as the Corporate Vice President
of Xbox from January2021 to February 2026. In this role, she led partnerships, business development, and strategy for the Gaming
business at Microsoft. Formerly, she was the Vice President of Business Development at Microsoft from October2019, leading
global partnerships for Consumer products, including Gaming, Search, Advertising and News, and all Media& Entertainment.
Prior to this, from April2017 to October2019, Ms. Wright served as General Manager for Office 365 collaboration
applications, including Microsoft Teams and Outlook, where she oversaw global marketing for these products. Ms. Wright developed her
business expertise through previous executive roles including Chief Marketing Officer at BlueJeans Network from April2016 to
April2017 and Chief Marketing Officer at TIBCO from October2013 to June2015. Before joining TIBCO, she served as
Vice President at Symantec overseeing worldwide e-commercesales and strategy for Norton software from 2011 to 2013. Ms. Wright
held executive positions within Symantecs Cloud and Enterprise divisions over her tenure, which began with VERITAS Software.
Ms. Wright started her career at Walt Disney World in marketing and sales. Beginning in February2021, Ms. Wright has also
served as a director of Kahoot!, a developer of a game-basedlearning platform used as educational technology. From
August2020 to October2021, she served as a director of BowX.Ms. Wright has served as a startup advisor to
companies including Color Genomics and ServiceMax, as well as venture firms, including Bow Capital. Ms. Wright holds a B.A. in
Business, with a major in Finance, from the University of Central Florida.
****
65
**Number and Terms of Office of Officers and
Directors**
We have five directors. Our
board of directors is divided into three classes with only one class of directors being elected in each year and each class (except for
those directors appointed prior to our first annual meeting of shareholders) serving a three-year term. The term of office of the first
class of directors, which will consist of Sanjay Subhedar, will expire at our first annual general meeting. The term of office of the
second class of directors, which will consist of Lori Wright and Eric Dunn, will expire at the second annual general meeting. The term
of office of the third class of directors, which will consist of Vivek Ranadive and Daven Patel, will expire at the third annual general
meeting. We may not hold an annual meeting of shareholders until after we consummate our initial business combination.
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 persons to the offices set forth in our amended and restated memorandum and articles of association
as it deems appropriate.
****
**Committees of the Board of Directors**
Our board of directors has
two standing committees: an audit committee and a compensation committee. Subject to phase-in rules and a limited exception, 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.
****
**Audit Committee**
Our board of directors have
established an audit committee of the board of directors. Eric C.W.Dunn, Sanjay Subhedar and Lori Wright serve as the members of
our audit committee. Under the Nasdaq listing standards and applicable SEC rules, we are required to have three members of the audit committee,
all of whom must be independent. Messrs. Dunn and Subhedar and Ms. Wright are each independent.
Eric C.W. Dunn serves as the
chairman of the audit committee. Each member of the audit committee is financially literate and our board of directors has determined
that Eric C.W. Dunn qualifies as an audit committee financial expert as defined in applicable SEC rules.
We have adopted an audit committee
charter, which will detail the principal functions of the audit committee, including:
|
| assisting board oversight of (1)the integrity of our
financial statements, (2)our compliance with legal and regulatory requirements, (3)our independent registered public accounting
firms qualifications and independence, and (4)the performance of our internal audit function and independent registered
public accounting firm; the appointment, compensation, retention, replacement, and oversight of the work of the independent registered
public accounting firm and any other independent registered public accounting firm engaged by us; |
|
|
| pre-approvingall audit and non-auditservices
to be provided by the independent registered public accounting firm or any other registered public accounting firm engaged by us, and
establishing pre-approvalpolicies and procedures; reviewing and discussing with the independent registered public accounting firm
all relationships the independent registered public accounting firm have with us in order to evaluate their continued independence; |
|
66
|
| 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-controlprocedures and (2)any
material issues raised by the most recent internal quality-controlreview, 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-Kpromulgated
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**
Our board of directors established
a compensation committee of our board of directors. The members of our compensation committee are Eric C.W.Dunn, Sanjay Subhedar
and Lori Wright. Lori Wright serves as chair of the compensation committee. Under the Nasdaq listing standards and applicable SEC rules,
we are required to have a compensation committee of at least two members, all of whom must be independent. Messrs. Dunn and Subhedar and
Ms. Wright are each independent.
We have adopted a compensation committee charter,
which will detail 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 officers
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-basedremuneration 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. |
|
67
The charter also provides
that the compensation committee may, in its sole discretion, retain or obtain the advice of a compensation consultant, legal counsel or
other adviser and will be directly responsible for the appointment, compensation and oversight of the work of any such adviser. However,
before engaging or receiving advice from a compensation consultant, external legal counsel or any other adviser, the compensation committee
will consider the independence of each such adviser, including the factors required by Nasdaq and the SEC.
****
**Director Nominations**
We do not have a standing
nominating committee. In accordance with Rule 5605(e)(2) of the Nasdaq Rules, a majority of the independent directors may recommend a
director nominee for selection by the board of directors. The board of directors believes that the independent directors can satisfactorily
carry out the responsibility of properly selecting or approving director nominees without the formation of a standing nominating committee.
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 election at the next annual meeting of shareholders (or, if applicable, a special meeting of shareholders). Our shareholders
that wish to nominate a director for election to our board of directors should follow the procedures set forth in our amended and restated
memorandum and articles of association.
We have not formally established
any specific, minimum qualifications that must be met or skills that are necessary for directors to possess. In general, in identifying
and evaluating nominees for director, our board of directors considers educational background, diversity of professional experience, knowledge
of our business, integrity, professional reputation, independence, wisdom, and the ability to represent the best interests of our shareholders.
**Code of Ethics**
We have adopted a Code of
Ethics applicable to our directors, officers and employees. You will be able to review these documents by accessing our public filings
at the SECs web site at *www.sec.gov*. In addition, a copy of the Code of Ethics will be provided without charge upon request
from us. We intend to disclose any amendments to or waivers of certain provisions of our Code of Ethics in a Current Report on Form 8-K.
****
68
**ITEM 11. EXECUTIVE COMPENSATION**
****
**Executive Officer and Director Compensation**
None of our executive officers
or directors has received any cash compensation for services rendered to us. The sponsor transferred 30,000 founder shares to each of
our independent directors (an aggregate of 90,000 founder shares), in each case at their original purchase price of $0.003 per share.
We are not prohibited from paying any fees (including advisory fees), reimbursements or cash payments to our sponsor, officers or directors,
or our or their affiliates, for services rendered to us prior to or in connection with the completion of our initial business combination,
including the following payments, all of which, if made prior to the completion of our initial business combination, will be paid from
working capital:
|
| Payment of consulting, success or finder fees to our sponsor
or a member of our management team, or their respective affiliates in connection with the consummation of our initial business combination; |
|
|
| We may engage our sponsor or an affiliate of our sponsor
as an advisor or otherwise in connection with our initial business combination and certain other transactions and pay such person or
entity a salary or fee in an amount that constitutes a market standard for comparable transactions; |
|
|
| Reimbursement for any out-of-pocketexpenses related
to identifying, investigating, negotiating and completing an initial business combination; and |
|
|
| Repayment of loans which may be made by our sponsor or an
affiliate of our sponsor or certain of our officers and directors to finance transaction costs in connection with an intended initial
business combination. Up to $2,500,000 of such loans may be convertible into private placement units of the post-businesscombination
entity at a price of $10.00 per unit at the option of the lender. Such units would be identical to the private placement units. |
|
After the completion of our
initial business combination, directors or members of our management team who remain with us may be paid consulting or management fees
from the combined company. All of these fees will be fully disclosed to shareholders, to the extent then known, in the proxy solicitation
materials or tender offer materials furnished to our shareholders in connection with a proposed 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-combinationbusiness will be responsible for determining executive officer and director compensation.
Any compensation to be paid
to our executive officers will be determined, or recommended to the board of directors for determination, either by a compensation committee
constituted solely by independent directors or by a majority of the independent directors on our board of directors.
We do not intend to take any
action to ensure that members of our management team maintain their positions with us after the consummation of our initial business combination,
although it is possible that some or all of our 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.
****
**Clawback Policy**
Under the Sarbanes-Oxley Act, in the event of misconduct that results
in a financial restatement that would have reduced a previously paid incentive amount, we can recoup those improper payments from our
executive officers. We have adopted the Executive Officer Clawback Policy to comply with the rules adopted by the SEC under Rule 10D-1
under the Exchange Act, and the listing standards, as set forth in Nasdaq Listing Rule. We have filed our Executive Officer Clawback Policy
as an exhibit to this Annual Report.
****
69
****
**ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS**
****
The following table sets
forth information regarding the beneficial ownership of our ordinary shares as of the date of this Annual Report:
|
| each person known by us to
be the beneficial owner of more than 5% of our outstanding ordinary shares; |
|
|
| each of our executive officers
and directors; and |
|
|
| all our executive officers
and directors as a group. |
|
Unless otherwise indicated,
we believe that all persons named in the table have sole voting and investment power with respect to all ordinary shares beneficially
owned by them.
|
Name
and Address of Beneficial Owner(1) | |
Number of
Ordinary
Shares
Beneficially
Owned | | |
Approximate
Percentageof
Outstanding
Ordinary
Shares | | |
|
Cal Redwood Sponsor
LLC(2) | |
| 8,005,900 | | |
| 25.6 | % | |
|
Vivek Ranadiv(2) | |
| 8,005,900 | | |
| 25.6 | % | |
|
Daven Patel(2) | |
| 8,005,900 | | |
| 25.6 | % | |
|
James Chan | |
| | | |
| | | |
|
Raymond Dong(2) | |
| | | |
| | | |
|
Eric C.W.Dunn | |
| 30,000 | | |
| * | | |
|
Sanjay Subhedar | |
| 30,000 | | |
| * | | |
|
Lori Wright | |
| 30,000 | | |
| * | | |
|
All officers and directors as a group(7 persons) | |
| 8,095,900 | | |
| 25.8 | % | |
|
Meteora Capital, LLC(3) | |
| 2,276,418 | | |
| 7.3 | % | |
|
* | Less than one percent. |
|
|
(1) | Unless otherwise noted, the business address of each of the
following is c/o Cal Redwood Acquisition Corp., 2440 Sand Hill Road Suite 101, Menlo Park, CA94025. |
|
|
(2) | Consists of 430,000 Class A ordinary shares and 7,575,900 Class B ordinary
shares. Cal Redwood Sponsor LLC, our sponsor, is the record holder
of such shares. Messrs. Ranadiv, Patel and Dong are the three managers of our sponsor. Any decisions by our sponsor with respect
to the securities held by it, including voting and dispositive decisions, are made jointly by the three managers and no one individual
has a controlling decision. Accordingly, under the so-calledrule of three, because voting and dispositive decisions
are made jointly by three managers, none of the managers of our sponsor is deemed to be a beneficial owner of securities held by our
sponsor, even those in which such managers hold a pecuniary interest. Accordingly, none of such individuals is deemed to have or share
beneficial ownership of the securities held by our sponsor. Messrs. Ranadiv, Patel and Dong directly or indirectly own membership
interests of our sponsor.
Messrs. Ranadiv, Patel and Dong disclaim any beneficial ownership of the securities held by the sponsor other than to the extent
of any pecuniary interest they may have therein. |
|
|
(3) | Based on a Schedule 13G/A filed on February 13, 2026, by
Meteora Capital and Vik Mittal. The principal business address for each of the reporting persons is 1200 N Federal Hwy, #200, Boca Raton
FL 33432. |
|
70
**ITEM 13. CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS, AND DIRECTOR INDEPENDENCE**
****
**Certain Relationships and Related Transactions**
On February11, 2025,
our sponsor paid $25,000, or approximately $0.003 per share, to cover certain of our offering costs in exchange for 7,665,900 founder
shares (up to 999,900shares of which are subject to forfeiture depending on the extent to which the underwriters over-allotmentoption
is exercised). Our sponsor transferred 30,000 founder shares to each of our independent directors (an aggregate of 90,000 founder shares)
at their original purchase price.
The number of founder shares
outstanding was determined based on the expectation that the total size of our initial public offering would be a maximum of 23,000,000units
if the underwriters over-allotmentoption is exercised in full, and therefore that such founder shares would represent 25%
of the outstanding shares after our initial public offering (excluding the private placement shares). Our public shareholders may incur
material dilution due to anti-dilutionadjustments that result in the issuance of ClassA ordinary shares on a greater than
one-to-onebasis upon conversion. If we increase or decrease the size of the offering, we will effect a share capitalization or a
share repurchase or redemption or other appropriate mechanism, as applicable, with respect to our ClassB ordinary shares immediately
prior to the consummation of our initial public offering in such amount as to maintain the number of founder shares at 25% of our issued
and outstanding ordinary shares upon the consummation of our initial public offering (excluding the private placement shares).
Our sponsor purchased an
aggregate of 430,000 private placement units, each private placement unit consisting of one ClassA ordinary share and one right
to receive one tenth (1/10) of a ClassA ordinary share upon the consummation of an initial business combination, as described in
more detail in this Annual Report, at a price of $10.00 per unit, or $4,300,000 in the aggregate, in a private placement that closed simultaneously
with the closing of our initial public offering. The underwriters have committed to use a portion of their underwriting discount and commission
to purchase an aggregate of 230,000 private placement units at a price of $10.00 per unit, or $2,300,000 in the aggregate, in a private
placement that closed simultaneously with the closing of our initial public offering. The private placement units will be identical to
the units sold in our initial public offering except that, so long as they are held by our sponsor or its permitted transferees, the private
placement units (including their component securities) (i)may not (including the ClassA ordinary shares issuable upon conversion
of the underlying rights), subject to certain limited exceptions, be transferred, assigned or sold by the holders until 30days after
the completion of our initial business combination and (ii)will be entitled to registration rights.
71
Prior to or in connection
with the completion of our initial business combination, there may be payment by the company to our sponsor or a member of our management
team or one of their affiliates of a finders fee, advisory fee, consulting fee or success fee for any services they render in order
to effectuate the completion of our initial business, which, if made prior to the completion of our initial business combination, will
be paid from working capital.
Upon the closing of our initial
public offering, we will pay customary transfer agent, rights agent and trustee fees, including an account and trust set up fee of $10,000
and monthly fees of $5,000, to Efficiency, the CEO and founder of which is the spouse of Daven Patel, our Chief Executive Officer.
The Sponsor had agreed to
loan the Company an aggregate of up to $300,000 to be used for a portion of the expenses of the Initial Public Offering. The loan was
non-interest bearing and unsecured. The promissory note was payable on the earlier of June30, 2025 and the date the Company consummated
the Initial Public Offering. As of May 27, 2025, the Company had borrowed $178,793 under the promissory note which was outstanding. Borrowings
under the note are no longer available. Subsequently, on May 29, 2025, the Company repaid the outstanding balance
We expect to fund our working
capital requirements prior to the time of our initial business combination with working capital. 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-interestbasis. 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
working capital to repay such loaned amounts but no proceeds from our trust account would be used for such repayment. Up to $2,500,000
of such loans may be convertible into private placement units of the post business combination entity at a price of $10.00 per unit at
the option of the lender. Such units would be identical to the private placement units. 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.
We have until May 27, 2027
or until such earlier liquidation date as our board of directors may approve, to consummate our initial business combination. If we anticipate
that we may be unable to consummate our initial business combination by May 27, 2027, we may seek shareholder approval to amend our amended
and restated memorandum and articles of association to extend the date by which we must consummate our initial business combination. If
we seek shareholder approval for an extension, holders of public shares will be offered an opportunity to vote on the extension and to
redeem their shares at a per share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including
interest earned thereon (net of taxes payable), divided by the number of then issued and outstanding public shares, subject to applicable
law.
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 working capital.
After our initial business
combination, members of our management team who remain with us may be paid consulting, management or other fees from the combined company
with any and all amounts being fully disclosed to our shareholders, to the extent then known, in the proxy solicitation or tender offer
materials, as applicable, furnished to our shareholders. It is unlikely the amount of such compensation will be known at the time of distribution
of such tender offer materials or at the time of a general meeting held to consider our initial business combination, as applicable, as
it will be up to the directors of the post-combinationbusiness to determine executive and director compensation.
72
**Related Party Policy**
We have not yet adopted a
formal policy for the review, approval or ratification of related party transactions. Accordingly, the transactions discussed above were
not reviewed, approved or ratified in accordance with any such policy. Prior to the closing of our initial public offering, we adopted
our Code of Ethics requiring us to avoid, wherever possible, all conflicts of interests, except under guidelines or resolutions approved
by our board of directors (or the appropriate committee of our board of directors) or as disclosed in our public filings with the SEC.
Under our Code of Ethics, conflict of interest situations include any financial transaction, arrangement or relationship (including any
indebtedness or guarantee of indebtedness) involving the company.
In addition, our audit committee
is responsible for reviewing and approving related party transactions to the extent that we enter into such transactions. An affirmative
vote of a majority of the members of the audit committee present at a meeting at which a quorum is present will be required in order to
approve a related party transaction. A majority of the members of the entire audit committee will constitute a quorum. Without a meeting,
the unanimous written consent of all of the members of the audit committee will be required to approve a related party transaction. Our
audit committee will review on a quarterly basis all payments that were made to our sponsor, directors or officers, or our or any of their
respective affiliates.
These procedures are intended
to determine whether any such related party transaction impairs the independence of a director or presents a conflict of interest on the
part of a director, employee or officer.
To further minimize conflicts of interest, we have agreed not to consummate
an initial business combination with an entity that is affiliated with any of our sponsor, directors or officers unless we, or a committee
of independent and disinterested directors, have obtained an opinion from an independent investment banking firm which is a member of
FINRA or an independent accounting firm that our initial business combination is fair to our shareholders from a financial point of view.
In addition, pursuant to Nasdaq listing rules, our initial business combination must be approved by a majority of our independent directors.
We are not prohibited from
paying any fees (including advisory fees), reimbursements or cash payments to our sponsor, officers or directors, or our or their affiliates,
for services rendered to us prior to or in connection with the completion of our initial business combination, including the following
payments, all of which, if made prior to the completion of our initial business combination, will be paid from working capital:
|
| Repayment of up to an aggregate of $300,000 in loans made
to us by our sponsor to cover offering-relatedand organizational expenses; |
|
|
| Payment of consulting, success or finder fees to our sponsor
or a member of our management team, or their respective affiliates in connection with the consummation of our initial business combination; |
|
|
| We may engage our sponsor or an affiliate of our sponsor
as an advisor or otherwise in connection with our initial business combination and certain other transactions and pay such person or
entity a salary or fee in an amount that constitutes a market standard for comparable transactions; |
|
|
| Reimbursement for any out-of-pocketexpenses related
to identifying, investigating, negotiating and completing an initial business combination; and |
|
|
| Repayment of loans which may be made by our sponsor or an
affiliate of our sponsor or certain of our officers and directors to finance transaction costs in connection with an intended initial
business combination. Up to $2,500,000 of such loans may be convertible into private placement units of the post-businesscombination
entity at a price of $10.00 per unit at the option of the lender. Such units would be identical to the private placement units. Except
for the foregoing, the terms of such loans, if any, have not been determined and no written agreements exist with respect to such loans. |
|
****
73
**Director Independence**
Nasdaq rules require
that a majority of our board of directors be independent within one year of our initial public offering. An independent
director is defined generally as a person who, in the opinion of the companys board of directors, has no material
relationship with the listed company (either directly or as a partner, shareholder or officer of an organization that has a
relationship with the company). Our board of directors has determined that Eric C.W.Dunn, Sanjay Subhedar and Lori Wright are
independent directors as defined in Nasdaq listing standards and applicable SEC rules. Our independent directors
expect to have regularly scheduled meetings at which only independent directors are present.
****
**ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES**
*Audit Fees*. During
the period from January 7, 2025 (inception) through December 31, 2025, fees for our independent registered public accounting firm were
approximately $133,000 for the services Withum Smith+Brown, PC performed in connection with our Initial Public Offering.
*Audit-Related Fees.*
Audit-related services consist of fees billed for assurance and related services that are reasonably related to performance of the audit
or review of our financial statements and are not reported under Audit Fees. These services include attest services that
are not required by statute or regulation and consultations concerning financial accounting and reporting standards. We did not pay Withum
Smith+Brown, PC for consultations concerning financial accounting and reporting standards for the period from January 7, 2025 (inception)
through December 31, 2025.
*Tax Fees*. For
the period from January 7, 2025 (inception) through December 31, 2025, we paid approximately $4,500 to Withum Smith+Brown, PC for tax planning and
tax advice.
*All Other Fees*. We
did not pay Withum Smith+Brown, PC for other services for the period from January 7, 2025 (inception) through December 31, 2025.
**Pre-Approval Policy**
****
Our audit committee was
formed upon the consummation of our initial public offering. As a result, the audit committee did not pre-approve all of the foregoing
services, although any services rendered prior to the formation of our audit committee were approved by our board of directors. Since
the formation of our audit committee, and on a going-forward basis, the audit committee has and will pre-approve all auditing services
and permitted non-audit services 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 AND FINANCIAL STATEMENT SCHEDULES**
|
(a) | The following documents are
filed as part of this Form 10-K: |
|
|
(1) | Financial Statements: |
|
|
|
|
Page | |
|
Report of Independent Registered Public Accounting Firm |
|
F-2 | |
|
Balance Sheet |
|
F-3 | |
|
Statement of Operations |
|
F-4 | |
|
Statement of Changes in Shareholders Equity |
|
F-5 | |
|
Statement of Cash Flows |
|
F-5 | |
|
Notes to Financial Statements |
|
F-7 to F-18 | |
|
(2) | Financial Statement Schedules: |
|
None.
|
(3) | Exhibits |
|
We hereby file as part of
this Report the exhibits listed in the attached Exhibit Index. Exhibits which are incorporated herein by reference can be inspected and
copied at the public reference facilities maintained by the SEC, 100 F Street, N.E., Room 1580, Washington, D.C. 20549. Copies of such
material can also be obtained from the Public Reference Section of the SEC, 100 F Street, N.E., Washington, D.C. 20549, at prescribed
rates or on the SEC website at www.sec.gov.
75
The following documents are
included as exhibits to this Annual Report:
|
Exhibit No. |
|
Description | |
|
3.1(1) |
|
Amended and Restated Memorandum and Articles of Association of the Company. | |
|
4.1(2) |
|
Specimen Unit Certificate. | |
|
4.2(2) |
|
Specimen Ordinary Share Certificate. | |
|
4.3(2) |
|
Specimen Rights Certificate. | |
|
4.4(1) |
|
Share Rights Agreement, dated May 22, 2025, between the Company and Efficiency. | |
|
4.5* |
|
Description of Securities of the Registrant | |
|
10.1(1) |
|
Investment Management Trust Agreement, dated May 22, 2025, between the Company and Efficiency. | |
|
10.2(1) |
|
Private Placement Units Purchase Agreement, dated May 22, 2025, between the Company and Sponsor. | |
|
10.3(1) |
|
Private Placement Units Purchase Agreement, dated May 22, 2025, between the Company and Cohen & Company Capital Markets, a division of Cohen & Company Securities, LLC. | |
|
10.4(1) |
|
Private Placement Units Purchase Agreement, dated May 22, 2025, between the Company and Seaport Global Securities LLC. | |
|
10.5(1) |
|
Registration Rights Agreement, dated May 22, 2025, among the Company, the Sponsor and certain securityholders. | |
|
10.6(1) |
|
Letter Agreement, dated May 22, 2025, by and among the Company, the Sponsor, the initial shareholders and each officer and director of the Company. | |
|
10.7(1) |
|
Form of Indemnity Agreement. | |
|
19.1* |
|
Insider Trading Policy. | |
|
31.1* |
|
Certification of Chief Executive Officer (Principal Executive Officer) required by Rule 13a-14(a) or Rule 15d-14(a). | |
|
31.2* |
|
Certification of Chief Financial Officer (Principal Financial and Accounting Officer) required by Rule 13a-14(a) or Rule 15d-14(a). | |
|
32.1** |
|
Certification of Chief Executive Officer required by Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. 1350. | |
|
32.2** |
|
Certification of Chief Financial Officer required by Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. 1350. | |
|
97.1(3) |
|
Clawback Policy. | |
|
101.INS* |
|
XBRL Instance Document | |
|
101.SCH* |
|
XBRL Taxonomy Extension Schema | |
|
101.CAL* |
|
XBRL Taxonomy Calculation Linkbase | |
|
101.LAB* |
|
XBRL Taxonomy Label Document | |
|
101.PRE* |
|
XBRL Definition Linkbase Document | |
|
101.DEF* |
|
XBRL Definition Linkbase Document | |
|
104 |
|
Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101) | |
|
* | Filed herewith. |
|
|
** | Furnished herewith. |
|
|
(1) | Incorporated by reference to
an exhibit to the Registrants Current Report on Form 8-K, filed with the Securities and Exchange Commission on May 27, 2025. |
|
|
(2) | Incorporated by reference to an exhibit to Amendment No. 1 to the
Registrants Form S-1 (File No. 333-285517), filed with the SEC on April 2, 2025. |
|
****
|
(3) | Incorporated
by reference to an exhibit to Amendment No. 2 to the Registrants Form S-1 (File No. 333-285517), filed with the SEC on April 14,
2025. |
|
****
**ITEM 16. FORM 10-K SUMMARY**
None
76
****
**CAL REDWOOD ACQUISITION CORP.**
**INDEX TO FINANCIAL STATEMENTS**
|
Report of Independent Registered Public Accounting Firm |
F-2 | |
|
Financial Statements: |
| |
|
Balance Sheet as of December 31, 2025 |
F-3 | |
|
Statement of Operations for the Period from January 7, 2025 (Inception) Through December 31, 2025 |
F-4 | |
|
Statement of Changes in Shareholders Deficit for the Period from January 7, 2025 (Inception) Through December 31, 2025 |
F-5 | |
|
Statement of Cash Flows for the Period from January 7, 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**
Board of Directors and Shareholders
Cal Redwood Acquisition Corp.
**Opinion on the Financial Statements**
We have audited the accompanying balance
sheet of Cal Redwood Acquisition Corp. as of December 31, 2025, the related statements of operations, changes in shareholders deficit
and cash flows for the period from January 7, 2025 (inception) through December 31, 2025 and the related notes (collectively referred
to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the
financial position of the Company as of December 31, 2025, and the results of its operations and its cash flows for the period from January
7, 2025 (inception) through December 31, 2025 in conformity with accounting principles generally accepted in the United States of America.
**Basis for Opinion**
**
These financial statements are the responsibility
of the entitys management. Our responsibility is to express an opinion on these financial statements based on our audit. We are
a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required
to be independent with respect to Cal Redwood Acquisition Corp. in accordance with the U.S. federal securities laws and the applicable
rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the
standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement, whether due to error or fraud. Cal Redwood Acquisition Corp. is not required to have, nor
were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain
an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of
the entitys internal control over financial reporting. Accordingly, we express no such opinion.
Our audit included performing procedures to assess
the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond
to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating
the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.
**
/s/ WithumSmith+Brown, PC
PCAOB ID 100
We have served as the Companys auditor
since 2025.
New York,
March 31, 2026
F-2
| | |
****
**CAL REDWOOD ACQUISITION CORP.**
**BALANCE SHEET**
**DECEMBER 31, 2025**
****
|
Assets | |
| | |
|
Current assets | |
| | |
|
Cash | |
$ | 1,096,942 | | |
|
Prepaid expense | |
| 3,740 | | |
|
Prepaid insurance | |
| 98,356 | | |
|
Total current assets | |
| 1,199,038 | | |
|
Long-term prepaid insurance | |
| 38,534 | | |
|
Cash and investments held in Trust Account | |
| 235,633,565 | | |
|
Total Assets | |
$ | 236,871,137 | | |
|
| |
| | | |
|
Liabilities and Shareholders Deficit | |
| | | |
|
Current Liabilities | |
| | | |
|
Accrued offering costs | |
$ | 75,000 | | |
|
Accounts payable and accrued expenses | |
| 74,547 | | |
|
Due to affiliates | |
| 29,694 | | |
|
Promissory note - related party | |
| 301 | | |
|
Total current liabilities | |
| 179,542 | | |
|
Deferred underwriting fee payable | |
| 9,200,000 | | |
|
Total Liabilities | |
| 9,379,542 | | |
|
| |
| | | |
|
Commitments and Contingencies (Note 6) | |
| | | |
|
Class A ordinary shares subject to possible redemption, 23,000,000 shares at a redemption value of $10.24 per share | |
| 235,633,565 | | |
|
| |
| | | |
|
Shareholders Deficit | |
| | | |
|
Preference shares, $0.0001 par value; 5,000,000 shares authorized; none issued or outstanding | |
| | | |
|
ClassA ordinary shares, $0.0001 par value; 500,000,000 shares authorized; 660,000 shares issued and outstanding (excluding 23,000,000 shares subject to possible redemption) | |
| 66 | | |
|
ClassB ordinary shares, $0.0001 par value; 50,000,000 shares authorized; 7,665,900 shares issued and outstanding | |
| 767 | | |
|
Accumulated deficit | |
| (8,142,803 | ) | |
|
Total Shareholders Deficit | |
| (8,141,970 | ) | |
|
Total Liabilities and Shareholders Deficit | |
$ | 236,871,137 | | |
The accompanying notes are an integral
part of these financial statements.
F-3
| | |
**CAL REDWOOD ACQUISITION CORP.**
**STATEMENT OF OPERATIONS**
**FOR THE PERIOD FROM JANUARY 7, 2025
(INCEPTION) THROUGH DECEMBER 31, 2025**
****
|
General and administrative costs | |
$ | 467,994 | | |
|
Loss from Operations | |
| (467,994 | ) | |
|
| |
| | | |
|
Other income (expense): | |
| | | |
|
Compensation expense | |
| (132,300 | ) | |
|
Bank service fees | |
| (5,000 | ) | |
|
Interest income from operating bank account | |
| 26,678 | | |
|
Earnings on investments held in Trust Account | |
| 5,633,565 | | |
|
Total other income, net | |
| 5,522,943 | | |
|
| |
| | | |
|
Net income | |
$ | 5,054,949 | | |
|
| |
| | | |
|
Weighted average redeemable Class A ordinary shares outstanding basic and diluted | |
| 14,030,641 | | |
|
Basic and diluted net income per redeemable Class A ordinary share | |
$ | 0.23 | | |
|
Weighted average non-redeemable Class A and Class B ordinary shares outstanding basic (1) | |
| 7,678,585 | | |
|
Basic net income per non-redeemable Class A and Class B ordinary share | |
$ | 0.23 | | |
|
Weighted average non-redeemable Class A and Class B ordinary shares outstanding diluted(1) | |
| 7,834,558 | | |
|
Diluted net income per non-redeemable Class A and Class B ordinary share | |
$ | 0.23 | | |
|
(1) | Excludes an aggregate of up
to 999,900 Class B ordinary shares subject to forfeiture by the holders thereof depending on the extent to which the underwriters
over-allotment option was exercised (Note 5). On May 27, 2025, the Company consummated its Initial Public Offering and sold 23,000,000
Units, including 3,000,000 Units sold pursuant to the full exercise of the underwriters option to purchase additional Units to
cover the over-allotment and as such 999,900 Class B ordinary shares are no longer subject to forfeiture. |
|
The accompanying notes are an integral
part of these financial statements.
F-4
| | |
**CAL REDWOOD ACQUISITION CORP.**
**STATEMENT OF CHANGES IN SHAREHOLDERS
DEFICIT**
**FOR THE PERIOD FROM JANUARY 7, 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 January 7, 2025 (inception) | |
| | | |
$ | | | |
| | | |
$ | | | |
$ | | | |
$ | | | |
$ | | | |
|
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
|
Class B ordinary shares issued to Sponsor
(1) | |
| | | |
| | | |
| 7,665,900 | | |
| 767 | | |
| 24,233 | | |
| | | |
| 25,000 | | |
|
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
|
Accretion of Class A ordinary shares to redemption value | |
| | | |
| | | |
| | | |
| | | |
| (9,934,213 | ) | |
| (13,197,752 | ) | |
| (23,131,965 | ) | |
|
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
|
Sale of 660,000 Private Placement Units | |
| 660,000 | | |
| 66 | | |
| | | |
| | | |
| 6,599,934 | | |
| | | |
| 6,600,000 | | |
|
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
|
Fair value of rights included in Public Units | |
| | | |
| | | |
| | | |
| | | |
| 3,404,000 | | |
| | | |
| 3,404,000 | | |
|
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
|
Allocated value of transaction costs to Private Placement Units and
rights included in Public Units | |
| | | |
| | | |
| | | |
| | | |
| (226,254 | ) | |
| | | |
| (226,254 | ) | |
|
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
|
Share-based compensation to director nominees | |
| | | |
| | | |
| | | |
| | | |
| 132,300 | | |
| | | |
| 132,300 | | |
|
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
|
Net income | |
| | | |
| | | |
| | | |
| | | |
| | | |
| 5,054,949 | | |
| 5,054,949 | | |
|
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
|
Balance December 31, 2025 | |
| 660,000 | | |
$ | 66 | | |
| 7,665,900 | | |
$ | 767 | | |
$ | | | |
$ | (8,142,803 | ) | |
$ | (8,141,970 | ) | |
|
(1) | Includes an aggregate
of up to 999,900 Class B ordinary shares subject to forfeiture by the holders thereof depending on the extent to which the underwriters
over-allotment option was exercised (Note 5). On May 27, 2025, the Company consummated its Initial Public Offering and sold 23,000,000
Units, including 3,000,000 Units sold pursuant to the full exercise of the underwriters option to purchase additional units to
cover the over-allotment and as such 999,900 Class B ordinary shares are no longer subject to forfeiture. |
|
The accompanying notes are an integral
part of these financial statements.
F-5
| | |
**CAL REDWOOD ACQUISITION CORP.**
**STATEMENT OF CASH FLOWS**
**FOR THE PERIOD FROM JANUARY 7, 2025
(INCEPTION) THROUGH DECEMBER 31, 2025**
****
|
Cash Flows from Operating Activities: | |
| | |
|
Net income | |
$ | 5,054,949 | | |
|
Adjustments to reconcile net income to net cash used in operating activities: | |
| | | |
|
Payment of expense through promissory note related party | |
| 36,220 | | |
|
Earnings on investments held in Trust Account | |
| (5,633,565 | ) | |
|
Compensation expense | |
| 132,300 | | |
|
Changes in operating assets and liabilities: | |
| | | |
|
Prepaid expenses | |
| (140,630 | ) | |
|
Due to affiliates | |
| 29,694 | | |
|
Accrued expenses | |
| 74,547 | | |
|
Net cash used in Operating Activities | |
| (446,485 | ) | |
|
| |
| | | |
|
Cash Flows from Investing Activities: | |
| | | |
|
Investment of cash into Trust Account | |
| (230,000,000 | ) | |
|
Net cash used in Investing Activities | |
| (230,000,000 | ) | |
|
| |
| | | |
|
Cash Flows from Financing Activities: | |
| | | |
|
Proceeds from issuance of Class B ordinary shares | |
| 25,000 | | |
|
Proceeds from sale of Public Units, net of underwriting discounts paid | |
| 225,400,000 | | |
|
Proceeds from sale of Private Placement Units | |
| 6,600,000 | | |
|
Due from Sponsor | |
| (1,423,800 | ) | |
|
Repayment of advances from related party | |
| 1,245,307 | | |
|
Payment of offering costs | |
| (303,080 | ) | |
|
Net cash provided by Financing Activities | |
| 231,543,427 | | |
|
| |
| | | |
|
Net Change in Cash | |
| 1,096,942 | | |
|
Cash Beginning of period | |
| | | |
|
Cash End of period | |
$ | 1,096,942 | | |
|
| |
| | | |
|
Supplemental disclosure of cash flow information: | |
| | | |
|
Deferred offering costs included in accrued offering costs | |
$ | 303,080 | | |
|
Deferred offering costs paid through promissory noterelated party | |
$ | 142,574 | | |
|
Reclass balance due from Sponsor to promissory note | |
$ | 178,493 | | |
|
Deferred underwriting fee payable | |
$ | 9,200,000 | | |
The accompanying notes are an integral
part of these financial statements.
F-6
| | |
****
**CAL REDWOOD ACQUISITION
CORP.**
**NOTES TO FINANCIAL STATEMENTS**
**DECEMBER 31, 2025**
****
**NOTE 1. DESCRIPTION OF ORGANIZATION AND
BUSINESS OPERATIONS**
Cal Redwood Acquisition Corp. (the Company)
is a blank check company incorporated as a Cayman Islands exempted corporation on January7, 2025. The Company was incorporated for
the purpose of effecting a merger, amalgamation, share exchange, asset acquisition, share purchase, reorganization or similar business
combination with one or more businesses (the Business Combination).
As of December 31, 2025, the Company had not commenced
any operations. All activity for the period from January7, 2025 (inception) through December 31, 2025 relates to the Companys
formation and the Initial Public Offering (Initial Public Offering), which is defined below and, after the Initial Public
Offering, identifying a target company for a Business Combination. The Company will not generate any operating revenues until after the
completion of its initial Business Combination, at the earliest. The Company will generate non-operating income in the form of interest
income from the proceeds derived from the Initial Public Offering. The Company has selected December31 as its fiscal year end.
The Companys sponsor is Cal Redwood SponsorLLC
(the Sponsor). The registration statement for the Companys Initial Public Offering was declared effective on May
22, 2025. On May 27, 2025, the Company consummated the Initial Public Offering of 23,000,000units at $10.00 per unit (the Units),
as discussed in Note3, which includes the full exercise of the over-allotment option by the Sponsor and the underwriters of 3,000,000
Units, generating gross proceeds of $230,000,000. Simultaneously with the closing of the Initial Public Offering, the Company consummated
the sale of an aggregate of 660,000 Private Placement Units(the Private Placement Units) to the Sponsor and the underwriters
at a price of $10.00 per Unit in a private placement, generating gross proceeds of $6,600,000. Each Unit and Private Placement Unit consists
of one ClassA ordinary share (public share or Class A ordinary share) and one right entitling the holder
thereof to receive tenth (1/10) of one Class A ordinary share upon the consummation of an initial Business Combination. The Companys
management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering and the Private
Placement Units, although substantially all of the net proceeds are intended to be generally applied toward consummating a Business Combination
(less deferred underwriting commissions).
Transaction costs amounted to $14,320,654, consisting
of $4,600,000 of cash underwriting fee, $9,200,000 of deferred underwriting fee, and $520,654 of other offering costs.
The Companys Business Combination must
be with one or more target businesses that together have a fair market value equal to at least 80% of the net balance in the Trust Account
(as defined below) (excluding the amount of deferred underwriting discounts held and taxes payable on the income earned on the Trust Account,
if any) at the time of the signing an agreement to enter into a Business Combination. However, the Company will only complete a Business
Combination if the post-Business Combination company owns or acquires 50% or more of the outstanding voting securities of the target or
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). There is no assurance that the Company
will be able to successfully effect a Business Combination.
Upon the closing of the Initial Public Offering
on May 27, 2025, an amount of $230,000,000 ($10.00 per Unit) from the net proceeds of the sale of the Units, and a portion of the proceeds
of the sale of the Private Placement Units, were deposited in a Trust Account (the Trust Account) and were invested only
in U.S.government treasury obligations with a maturity of 185days or less or in money market funds meeting certain conditions
under Rule2a-7under the Investment Company Act which invest only in direct U.S.government treasury obligations; the
holding of these assets in this form is intended to be temporary and for the sole purpose of facilitating the intended Business Combination.
To mitigate the risk that the Company might be deemed to be an investment company for purposes of the Investment Company Act, which risk
increases the longer that 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 cash or in an interest bearing
demand deposit account at a bank. Except with respect to interest earned on the funds held in the Trust Account that may be released to
the Company to pay its taxes, if any, the proceeds from the Initial Public Offering and the sale of the Private Placement Unitswill
not be released from the Trust Account until the earliest of (i)the completion of the Companys initial Business Combination,
(ii)the redemption of the Companys public shares if the Company is unable to complete the initial Business Combination within
24months from the closing of the Initial Public Offering (May 27, 2027) or by such earlier liquidation date as the Companys
board of directors may approve (the Completion Window), subject to applicable law, or (iii)the redemption of the Companys
public shares properly submitted in connection with a shareholder vote to amend the Companys amended and restated memorandum and
articles of association to (A)modify the substance or timing of the Companys obligation to allow redemption in connection
with the initial Business Combination or to redeem 100% of the Companys public shares if the Company has not consummated an initial
Business Combination within the Completion Window or (B)with respect to any other material provisions relating to shareholders
rights or pre-initial Business Combination activity. The proceeds deposited in the Trust Account could become subject to the claims of
the Companys creditors, if any, which could have priority over the claims of the Companys public shareholders.
F-7
| | |
The Company will provide the Companys public
shareholders with the opportunity to redeem all or a portion of their public shares upon the completion of the initial Business Combination
either (i)in connection with a general meeting called to approve the initial Business Combination or (ii)without a shareholder
vote by means of a tender offer. The decision as to whether the Company will seek shareholder approval of a proposed initial Business
Combination or conduct a tender offer will be made by the Company, solely in its discretion. The public shareholders will be entitled
to redeem their shares at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account calculated
as of twobusinessdays prior to the consummation of the initial Business Combination, including interest earned on the funds
held in the Trust Account (less taxes payable, if any), divided by the number of then outstanding public shares, subject to limitations.
The initial amount in the Trust Account was $10.00 per public share.
The
Public Shares were recorded at were recorded at a redemption value and
classified as temporary equity upon the completion of the Initial Public Offering, in accordance with Financial Accounting Standards Boards
(FASB) Accounting Standards Codification (ASC) Topic480, Distinguishing Liabilities from Equity.
The Company has only the duration of the Completion
Window to complete the initial Business Combination. However, if the Company is unable to complete its initial Business Combination within
the Completion Window, the Company willas promptly as reasonably possible but not more than tenbusinessdays thereafter,
redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including
interest earned on the funds held in the Trust Account (less the amount of taxes payable, if any, and up to $100,000 of interest to pay
dissolution expenses), divided by the number of then outstanding public shares, which redemption will constitute full and complete payment
for the public shares and completely extinguish public shareholders rights as shareholders (including the right to receive further
liquidation or other distributions, if any), subject to the Companys obligations under Cayman Islands law to provide for claims
of creditors and subject to the other requirements of applicable law.
The Sponsor, officers and directors have entered
into a letter agreement with the Company, pursuant to which they have agreed to (i)waive their redemption rights with respect to
their Class B ordinary shares, par value of $0.0001 per share (founder shares or Class B ordinary shares),
private placement shares and public shares in connection with the completion of the initial Business Combination; (ii)waive their
redemption rights with respect to their founder shares, private placement 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; (iii)waive their rights
to liquidating distributions from the Trust Account with respect to their founder shares and private placement shares if the Company fails
to complete the initial Business Combination within the Completion Window, although they will be entitled to liquidating distributions
from the Trust Account with respect to any public shares they hold if the Company fails to complete the initial Business Combination within
the Completion Window and to liquidating distributions from assets outside the Trust Account; and (iv)vote any founder shares or
private placement shares held by them and any public shares purchased during or after the Initial Public Offering (including in open market
and privately-negotiated transactions, aside from shares they may purchase in compliance with the requirements of Rule14e-5 under
the ExchangeAct, which would not be voted in favor of approving the Business Combination) in favor of the initial Business Combination.
The Companys Sponsor has agreed that it
will be liable to the Company if and to the extent any claims by a third party for services rendered or products sold to the Company,
or a prospective target business with which the Company has entered into a written letter of intent, confidentiality or other similar
agreement or Business Combination agreement, reduce the amount of funds in the Trust Account to below the lesser of (i)$10.00 per
public share and (ii)the actual amount per public share held in the Trust Account as of the date of the liquidation of the Trust
Account, if less than $10.00 per share due to reductions in the value of the trust assets, less taxes payable, if any, provided that such
liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights to
the monies held in the Trust Account (whether or not such waiver is enforceable) nor will it apply to any claims under the Companys
indemnity of the underwriters of the Initial Public Offering against certain liabilities, including liabilities under the Securities Actof1933,
as amended (the Securities Act). However, the Company has not asked the Sponsor to reserve for such indemnification obligations,
nor has the Company independently verified whether the Sponsor has sufficient funds to satisfy its indemnity obligations and the Company
believes that the Sponsors only assets are securities of the Company. Therefore, the Company cannot assure that the Sponsor would
be able to satisfy those obligations.
F-8
| | |
**Liquidity, Capital Resources and Going Concern**
The Companys liquidity needs up to December
31, 2025 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 cash of $1,096,942 and a working capital surplus of $1,019,496.
In order to fund working capital deficiencies
or finance transaction costs in connection with a Business Combination, the Sponsor, any of its affiliates, or our officers or directors
may, but are not obligated to, loan the Company funds as may be required (Working Capital Loans). If the Company completes
a Business Combination, the Company would repay such loaned amounts at that time. Up to $2,500,000 of such Working Capital Loans may be
converted into Units of the post-Business Combination entity at a price of $10.00 per Unit. The Units would be identical to the Private
Placement Units. As of December 31, 2025, the Company had no borrowings under the Working Capital Loans.
In connection with the Companys assessment
of going concern considerations in accordance with FASB ASC 204-50, Presentation of Financial Statements - Going Concern,
the Company does not believe it will need to raise additional funds in order to meet the expenditures required for operating its business.
However, if the estimate of the costs of identifying a target business, undertaking in-depth due diligence and negotiating a Business
Combination are less than the actual amount necessary to do so, the Company may have insufficient funds available to operate its business
prior to the initial Business Combination. The Company has the Completion Window to complete the initial Business Combination. Management
has determined that the Company has sufficient funds to finance the working capital needs of the Company within one year from the date
of issuance of the financial statement.
**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).
**Emerging Growth Company**
The Company is an emerging growth company,
as defined in Section2(a)of the Securities Act, as modified by the Jumpstart Our Business Startups Actof2012 (the
JOBS Act), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other
public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor 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 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.
F-9
| | |
**Use of Estimates**
**
The preparation of the financial statements in
conformity with GAAP requires the Companys management to make estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period.
Making estimates requires management to exercise
significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances
that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near
term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates.
**Cash and Cash Equivalents**
The Company considers all short-term investments
with an original maturity of three months or less when purchased to be cash equivalents. The Company had $1,096,942 in cash and no cash
equivalents as of December 31, 2025.
**Investments Held in Trust Account**
At December 31, 2025, substantially all of the
assets held in the Trust Account were held in U.S. Treasury Bills. The Company accounts for its marketable securities as trading securities
under ASC Topic 320, InvestmentsDebt and Equity Securities, where securities are presented at fair value on the balance
sheet. Gains and losses resulting from the change in fair value of marketable securities held in the Trust Account are included in earnings
on investments held in Trust Account in the statements of operations. The Companys investments held in the Trust Account are classified
as a Level 1 in the fair value hierarchy, see Note 8.
****
**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
ASC Topic 340-10-S99 and SEC Staff Accounting Bulletin Topic 5A, Expenses of Offering. Deferred offering costs consist principally
of professional and registration fees that are related to the Initial Public Offering. ASC Topic 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 share
rights, using the residual method by allocating Initial Public Offering proceeds first to assigned value of the rights and then to the
Class A ordinary shares. Offering costs allocated to the Public Shares were charged to temporary equity, and offering costs allocated
to the rights included in the Units and the Private Placement Units were charged to shareholders' equity as the rights included in the
Units and Private Placement Units, after management's evaluation, were accounted for under equity treatment.
**Fair Value of Financial Instruments**
The fair value of the Companys assets and
liabilities, which qualify as financial instruments under ASCTopic 820, Fair Value Measurements and Disclosures, approximates
the carrying amounts represented in the balance sheet, primarily due to their short-term nature.
F-10
| | |
**Net Income per Ordinary Share**
The Company complies with accounting and disclosure
requirements of ASC Topic 260, Earnings Per Share. The Company has two classes of ordinary shares, which are referred to
as redeemable Class A ordinary shares and non-redeemable Class A and Class B ordinary shares. Income and losses are shared pro rata between
the two classes of ordinary shares. This presentation assumes a Business Combination as the most likely outcome. Net income per ordinary
share is calculated by dividing the net income by the weighted average ordinary shares outstanding for the respective period.
The calculation of diluted net income per ordinary
share does not consider the effect of the rights issued in connection with the Initial Public Offering and the Private Placement to receive
one tenth (1/10) of one Class A ordinary share upon the consummation of an initial Business Combination in the calculation of diluted
income per ordinary share, because their exercise is contingent upon future events. Accretion associated with the redeemable Class A ordinary
shares is excluded from earnings per ordinary share as the redemption value approximates fair value.
The Company has considered the effect of Class
B ordinary shares that were excluded from the weighted average number as they were contingent on the exercise of over-allotment option
by the underwriters. Since the contingency was satisfied, the Company included these shares in the weighted average number as of the date
they were no longer contingent to determine the dilutive impact of these shares.
The following table reflects the calculation of
basic and diluted net income perordinary share (in dollars, except per share amounts):
|
| |
For Period from January 7,
2025 (Inception) Through
December 31, 2025 | | |
|
| |
Redeemable
Class A | | |
Non-redeemable
Class A and
Class B | | |
|
Basic net income per share: | |
| | |
| | |
|
Numerator: | |
| | |
| | |
|
Allocation of net income | |
$ | 3,267,006 | | |
$ | 1,787,943 | | |
|
Denominator: | |
| | | |
| | | |
|
Basic weighted-average shares outstanding | |
| 14,030,641 | | |
| 7,678,585 | | |
|
Basic net income per ordinary share | |
$ | 0.23 | | |
$ | 0.23 | | |
****
|
| |
For Period from January 7,
2025 (Inception) Through
December 31, 2025 | | |
|
| |
Redeemable
Class A | | |
Non-redeemable
Class A and
Class B | | |
|
Diluted net income per share: | |
| | |
| | |
|
Numerator: | |
| | |
| | |
|
Allocation of net income | |
$ | 3,209,361 | | |
$ | 1,845,588 | | |
|
Denominator: | |
| | | |
| | | |
|
Diluted weighted-average shares outstanding | |
| 14,030,641 | | |
| 7,834,558 | | |
|
Diluted net income per ordinary share | |
$ | 0.23 | | |
$ | 0.23 | | |
****
**Income Taxes**
The Company accounts for income taxes under ASC
Topic 740, Income Taxes, which requires an asset and liability approach to financial accounting and reporting for income
taxes. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets
and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates applicable to the periods
in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred
tax assets to the amount expected to be realized.
F-11
| | |
ASC Topic 740 prescribes a recognition threshold
and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in
a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing
authorities. The Companys management determined that the Cayman Islands is the Companys major tax jurisdiction. The Company
recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. As of December 31, 2025, there were
no unrecognized tax benefits and no amounts accrued for interest and penalties. The Company is currently not aware of any issues under
review that could result in significant payments, accruals or material deviation from its position.
The Company is considered to be an exempted Cayman
Islands company with no connection to any other taxable jurisdiction and is presently not subject to income taxes or income tax filing
requirements in the Cayman Islands or the UnitedStates. As such, the Companys tax provision was zero for the period presented.
**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, if there is a shareholder vote
(A) to modify the substance or timing of the Companys obligation to allow redemption in connection with a Business Combination
or to redeem 100% of the public shares if the Company does 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,
or if there is a shareholder vote or tender offer in connection with the Companys initial Business Combination. In accordance with
ASC Topic 480-10-S99, the Company classifies Class A ordinary shares subject to possible redemption outside of permanent equity as the
redemption provisions are not solely within the control of the Company. The Company recognizes changes in redemption value immediately
as they occur and will adjust the carrying value of redeemable shares to equal the redemption value at the end of each reporting period.
Immediately upon the closing of the Initial Public Offering, the Company recognized the accretion from initial book value to redemption
value. The change in the carrying value of redeemable shares will result in charges against additional paid-in capital (to the extent
available) and accumulated deficit. Accordingly, as of December 31, 2025, Class A ordinary shares subject to possible redemption are presented
at redemption value as temporary equity, outside of the shareholders deficit section of the Companys balance sheet. As of
December 31, 2025, the Class A ordinary shares subject to possible redemption reflected in the balance sheet are reconciled in the following
table:
|
| |
Shares | | |
Amount | | |
|
Gross proceeds | |
| 23,000,000 | | |
$ | 230,000,000 | | |
|
Less: | |
| | | |
| | | |
|
Proceeds allocated to Public Rights | |
| | | |
| (3,404,000 | ) | |
|
Public Shares issuance costs | |
| | | |
| (14,094,400 | ) | |
|
Plus: | |
| | | |
| | | |
|
Accretion of carrying value to redemption value | |
| | | |
| 23,131,965 | | |
|
ClassA ordinary shares subject to possible redemption, December 31, 2025 | |
| 23,000,000 | | |
$ | 235,633,565 | | |
****
**Share-Based Compensation**
The Company records share-based compensation in
accordance with ASC Topic 718, Compensation-Share 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 by multiplying the marketable value per founder share (defined in
Note 5) by the probability of successful closing of an initial Business Combination. 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 statements of operations.
****
F-12
| | |
****
**Recent Accounting Pronouncements**
In November 2024, the FASB issued Accounting Standards
Update (ASU) 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic
220-40): Disaggregation of Income Statement Expenses, requiring public entities to disclose additional information about specific
expense categories in the notes to the financial statements on an interim and annual basis. ASU 2024-03 is effective for fiscal years
beginning after December 15, 2026, and for interim periods beginning after December 15, 2027, with early adoption permitted. The Company
is currently evaluating the impact of adopting ASU 2024-03.
Management does not believe that any other recently
issued, but not effective, accounting standards, if currently adopted, would have a material effect on the Companys financial statements.
**NOTE 3. INITIAL PUBLIC OFFERING**
Pursuant to the Initial Public Offering on May
27, 2025, the Company sold 23,000,000Units at a purchase price of $10.00 per Unit for a total of $230,000,000, which includes the
full exercise of the underwriters over-allotment option in the amount of 3,000,000 units. Each Unit has a price of $10.00 and consists
of one ClassA ordinary share and one right (Public Right) entitling the holder thereof to receive one tenth (1/10)
of one ClassA ordinary share upon the consummation of an initial Business Combination.
**NOTE 4. PRIVATE PLACEMENT**
Simultaneously with the closing of the Initial
Public Offering on May 27, 2025, the Sponsor purchased an aggregate of 430,000Private Placement Units, each Unit consisting of one
ClassA ordinary share and one right to receive one tenth (1/10) of a ClassA ordinary share upon the consummation of an initial
business combination (Private Placement Rights), at a price of $10.00 per unit, in a private placement for an aggregate
purchase price of $4,300,000. The underwriters used a portion of their underwriting discount and commission to purchase an aggregate of
230,000 Private Placement Units at a price of $10.00 per Unit, for an aggregate purchase price of $2,300,000.
The Private Placement Unitsare identical
to the Public Unitssold in the Initial Public Offering except that, so long as they are held by the Sponsor or their permitted transferees,
the Private Placement Units(including their component securities) (i)may not (including the ClassA ordinary shares issuable
upon conversion of these Private Placement Rights), subject to certain limited exceptions, be transferred, assigned or sold by the holders
until 30days after the completion of the initial Business Combination and (ii)will be entitled to registration rights.
The Sponsor, officers and directors have entered
into a letter agreement with the Company, pursuant to which they have agreed to (i)waive their redemption rights with respect to
their founder shares, private placement shares and public shares in connection with the completion of the initial Business Combination;
(ii)waive their redemption rights with respect to their founder shares, private placement shares and public shares in connection
with a shareholder vote to approve an amendment to the Companys amended and restated memorandum and articles of association (A)to
modify the substance or timing of the Companys obligation to allow redemption in connection with the initial Business Combination
or to redeem 100% of the public shares if the Company has not consummated an initial Business Combination within the Completion Window
or (B)with respect to any other material provisions relating to shareholders rights or pre-initial Business Combination activity;
(iii)waive their rights to liquidating distributions from the Trust Account with respect to their founder shares and private placement
shares if the Company fails to complete the initial Business Combination within the Completion Window, although they will be entitled
to liquidating distributions from the Trust Account with respect to any public shares they hold if the Company fails to complete the initial
Business Combination within the Completion Window and to liquidating distributions from assets outside the Trust Account; and (iv)vote
any founder shares or private placement shares held by them and any public shares purchased during or after the Initial Public Offering
(including in open market and privately-negotiated transactions, aside from shares they may purchase in compliance with the requirements
of Rule14e-5 under the ExchangeAct, which would not be voted in favor of approving the Business Combination) in favor of the
initial Business Combination.
F-13
| | |
**NOTE 5. RELATED PARTY TRANSACTIONS**
**Founder Shares**
On February11, 2025, the Sponsor made a
capital contribution of $25,000, or approximately $0.003 per share, for which the Company issued 7,665,900 founder shares to the Sponsor
(up to 999,900 shares of which were subject to forfeiture depending on the extent to which the underwriters over-allotment option
was exercised), for a purchase price of approximately $0.003 per share. On May 27, 2025, the underwriters exercised their over-allotment
option in full as part of the closing of the Initial Public Offering. As such, the 999,900 founder shares are no longer subject to forfeiture.
In April and May 2025, the Sponsor transferred
a total of 90,000 founder shares to the three independent directors (30,000 each) for an aggregate consideration of $0.003 per share,
or an aggregate total amount of $270. The transfer of the founder shares to the independent director nominees is in the scope of ASC
718. Under ASC 718, stock-based compensation associated with equity-classified awards is measured at fair value upon the grant date. The
fair value of the 90,000 founder shares granted to the Companys independent directors on their respective grant dates in April
and May 2025 has an aggregate total of $132,300, or $1.47 per share. The transfer of founder shares required the directors to continue
as such at the date of the Initial Public Offering, thus, the total fair value of $132,300 was recorded as compensation expense on the
respective grant dates in April and May 2025. The fair value of the founder shares was derived through a third-party valuation in which
the implied Class A share price of $9.80 is multiplied by the market adjustment of 15%.
The Companys initial shareholders have
agreed not to transfer, assign or sell any of their founder shares and any ClassA ordinary shares issued upon conversion thereof
until the earlier to occur of (i)one year after the completion of the initial Business Combination or (ii)the date on which
the Company completes a liquidation, merger, share exchange or other similar transaction after the initial Business Combination that results
in all of the Companys shareholders having the right to exchange their ClassA ordinary shares for cash, securities or other
property. Any permitted transferees will be subject to the same restrictions and other agreements of the Companys initial shareholders
with respect to any founder shares (the Lock-up). Notwithstanding the foregoing, if (1)the closing price of the ClassA
ordinary shares equals or exceeds $12.00 per share (as adjusted for share subdivisions, share capitalizations, reorganizations, recapitalizations
and the like) for any 20tradingdays within any 30-tradingday period commencing at least 150days after the initial
Business Combination or (2)if the Company consummates a transaction after the initial Business Combination which results in the
Companys shareholders having the right to exchange their shares for cash, securities or other property, the founder shares will
be released from the Lock-up.
**Promissory NoteRelated Party**
The Sponsor agreed to loan the Company an aggregate
of up to $300,000 to be used for a portion of the expenses of the Initial Public Offering. The loan was non-interest bearing and unsecured.
The promissory note was payable on the earlier of June 30, 2025 and the date the Company consummated the Initial Public Offering. As of
December 31, 2025, the Company owed $301 under the promissory note. Borrowings under the note are no longer available.
**Due to Affiliates**
From time to time, officers and directors of the
Company may pay expenses on behalf of the Company. Amounts paid on behalf of the Company are non-interest bearing and due on demand. At
December 31, 2025, the Company owed $29,694 to affiliates of the Company and reports this amount as due to affiliates on the balance sheet.
****
**Working Capital Loans**
In order to finance transaction costs in connection
with a Business Combination, the Sponsor or an affiliate of the Sponsor or certain of the Companys officers and directors may,
but are not obligated to, loan the Company funds as may be required (the Working Capital Loans). If the Company completes
a Business Combination, the Company would repay the Working Capital Loans. In the event that a Business Combination does not close, the
Company may use a portion of the working capital held outside the Trust Account to repay the Working Capital Loans but no proceeds from
the Trust Account would be used to repay the Working Capital Loans. Up to $2,500,000 of such Working Capital Loans may be convertible
into Private Placement Units of the post Business Combination entity at a price of $10.00 per Unit at the option of the lender. As of
December 31, 2025, no such Working Capital Loans were outstanding.
****
F-14
| | |
****
**NOTE 6. COMMITMENTS AND CONTINGENCIES **
**Risks and Uncertainties**
UnitedStates and global markets are experiencing
volatility and disruption following the geopolitical instability resulting from the ongoing Russia-Ukraine conflict and the Israel-Hamas
conflict. In response to the ongoing Russia-Ukraine conflict, the North Atlantic Treaty Organization (NATO) deployed additional
military forces to eastern Europe, and the UnitedStates, the United Kingdom, the European Union and other countries have announced
various sanctions and restrictive actions against Russia, Belarus and related individuals and entities, including the removal of certain
financial institutions from the Society for Worldwide Interbank Financial Telecommunication (SWIFT) payment system. Certain countries,
including the UnitedStates, have also provided and may continue to provide military aid or other assistance to Ukraine and to Israel,
increasing geopolitical tensions among a number of nations. The invasion of Ukraine by Russia and the Israel-Hamas conflict and the resulting
measures that have been taken, and could be taken in the future, by NATO, the UnitedStates, the United Kingdom, the European Union,
Israel and its neighboring states and other countries have created global security concerns that could have a lasting impact on regional
and global economies. Although the length and impact of the ongoing conflicts are highly unpredictable, they could lead to market disruptions,
including significant volatility in commodity prices, credit and capital markets, as well as supply chain interruptions and increased
cyberattacks against U.S.companies. Additionally, any resulting sanctions could adversely affect the global economy and financial
markets and lead to instability and lack of liquidity in capital markets.
Any of the above mentioned factors, or any other
negative impact on the global economy, capital markets or other geopolitical conditions resulting from the Russian invasion of Ukraine,
the Israel-Hamas conflict and subsequent sanctions or related actions, could adversely affect the Companys search for an initial
Business Combination and any target business with which the Company may ultimately consummate an initial Business Combination.
****
**Registration Rights**
The holders of the founder shares, Private Placement
Unitsand the ClassA ordinary shares underlying such Private Placement Unitsand Private Placement Rights and units that
may be issued upon conversion of the 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
initial Business Combination pursuant to a registration rights agreement signed prior to the effective date of the Initial Public Offering.
The holders of these securities are entitled to make up to three demands, excluding short form demands, that the Company registers such
securities. In addition, the holders have certain piggyback registration rights with respect to registration statements filed subsequent
to the completion of the initial Business Combination. The underwriters and/or their designees may not exercise their demand and piggyback
registration rights after five and sevenyears after the commencement of the Initial Public Offering and may not exercise their demand
rights on more than one occasion. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
****
**Underwriters Agreement**
The underwriters had a 45-day option from the date of the Initial Public
Offering to purchase up to an additional 3,000,000Units to cover over-allotments, if any. On May 27, 2025, simultaneously with the
closing of the Initial Public Offering, the underwriters elected to fully exercise the over-allotment option to purchase the additional
3,000,000 Units at a price of $10.00 per Unit.
The underwriters were entitled to a cash underwriting
discount of $0.20 per Unit, or $4,600,000 in the aggregate. Of this amount, $0.10 per Unit was paid to the underwriters upon the closing
of the Initial Public Offering in cash and $0.10 per Unit was used by the underwriters to purchase Private Placement Units.
Additionally, the underwriters are entitled to
a deferred underwriting discount of $0.40 per Unit, or $9,200,000 in the aggregate payable to the underwriters for deferred underwriting
commissions on amounts remaining in the Trust Account after all redemptions by public shareholders have been met. The deferred underwriting
discount is payable to the underwriters from the amounts held in the Trust Account solely in the event the Company completes its Initial
Business Combination.
F-15
| | |
**NOTE 7. SHAREHOLDERS DEFICIT**
****
**Preference Shares**The
Company is authorized to issue a total of 5,000,000 preference shares at par value of $0.0001 each. At December 31, 2025, there were no
preference shares issued or outstanding.
****
**ClassA Ordinary Shares**The
Company is authorized to issue a total of 500,000,000 ClassA ordinary shares at par value of $0.0001 each. At December 31, 2025,
there were 660,000 ClassA ordinary shares issued and outstanding, excluding 23,000,000 shares subject to possible redemption.
**ClassB Ordinary Shares**The
Company is authorized to issue a total of 50,000,000 ClassB ordinary shares at par value of $0.0001 each. As of December 31, 2025,
there were 7,665,900 Class B ordinary shares issued and outstanding (up to 999,900 shares of which were subject to forfeiture depending
on the extent to which the underwriters over-allotment option was exercised). On May 27, 2025, the underwriters exercised their
over-allotment option in full as part of the closing of the Initial Public Offering. As such, the 999,900 founder shares are no longer
subject to forfeiture.
The founder shares will automatically convert
into ClassA ordinary shares concurrently with or immediately following the consummation of the initial Business Combination or earlier
at the option of the holder on a one-for-one basis, subject to adjustment for share subdivisions, share capitalizations, reorganizations,
recapitalizations and the like, and subject to further adjustment 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, approximately 25% of the sum of (i)the
total number of all ClassA ordinary shares outstanding upon the completion of the Initial Public Offering (excluding the ClassA
ordinary shares underlying the Private Placement Units), plus (ii)all ClassA ordinary shares and equity-linked securities
issued or deemed issued, in connection with the closing of the initial Business Combination (excluding any shares or equity-linked securities
issued, or to be issued, to any seller in the initial Business Combination and any private placement-equivalent shares issued to the Sponsor
or any of its affiliates or to the Companys officers or directors upon conversion of Working Capital Loans) minus (iii)any
redemptions of ClassA ordinary shares by public shareholders in connection with charter amendments prior to an initial Business
Combination or an initial Business Combination; provided that such conversion of founder shares will never occur on a less than one-for-one
basis.
Holders of record of the Companys ClassA
ordinary shares and ClassB ordinary shares are entitled to one vote for each share held on all matters to be voted on by shareholders.
Unless specified in the amended and restated memorandum and articles of association or as required by the Companies Act or stock exchange
rules, an ordinary resolution under Cayman Islands law and the amended and restated memorandum and articles of association, which requires
the affirmative vote of at least a 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 is generally required to approve any matter voted on by
the Companys shareholders. Approval of certain actions requires a special resolution under Cayman Islands law, which (except as
specified below) 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, and pursuant to the Companys amended
and restated memorandum and articles of association, such actions include amending the amended and restated memorandum and articles of
association and approving a statutory merger or consolidation with another company. There is no cumulative voting with respect to the
appointment of directors, meaning, following the Companys initial Business Combination, the holders of more than 50% of the ordinary
shares voted for the appointment of directors can elect all of the directors. Prior to the consummation of the initial Business Combination,
only holders of the ClassB ordinary shares will (i)have the right to vote on the appointment and removal of directors and
(ii)be entitled to vote on continuing the Company in a jurisdiction outside the Cayman Islands (including any special resolution
required to amend the constitutional documents or to adopt new constitutional documents, in each case, as a result of approving a transfer
by way of continuation in a jurisdiction outside the Cayman Islands). Holders of the ClassA ordinary shares will not be entitled
to vote on these matters during such time. These provisions of the amended and restated memorandum and articles of association may only
be amended if approved by a special resolution passed by the affirmative vote of at least 90% (or, where such amendment is proposed in
respect of the consummation of the initial Business Combination, two-thirds) of the votes cast by such shareholders as, being entitled
to do so, vote in person or, where proxies are allowed, by proxy at the applicable general meeting of the Company.
F-16
| | |
**Rights**Except
in cases where the Company is not the surviving company in a business combination, each holder of a right will automatically receive one-tenth
(1/10) of one ordinary share upon consummation of the initial Business Combination. The Company will not issue fractional shares in connection
with an exchange of rights. Fractional shares will either be rounded down to the nearest whole share or otherwise addressed in accordance
with the applicable provisions of Cayman law. In the event the Company is not the surviving company upon completion of the initial Business
Combination, each holder of a right will be required to affirmatively convert his, her or its rights in order to receive the one-tenth
(1/10) of one ordinary share underlying each right upon consummation of the Business Combination. If the Company is unable to complete
the initial Business Combination within the required time period and the Company will redeem the public shares for the funds held in the
Trust Account, holders of rights will not receive any of such funds for their rights and the rights will expire worthless.
****
**NOTE 8. FAIR VALUE MEASUREMENT**
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. |
|
At the date of the Initial Public Offering, May
27, 2025, the fair value of the Public Rights was determined to be $3,404,000 or $0.148 per Public Right. The Public Right valuation was
determined based on the market value of the associated Public Units, with a market adjustment which takes into account low market volatility,
the likelihood of closing on a business combination and the possibility of a post-acquisition decline in the stock price. The Public Rights
have been classified within shareholders deficit and will not require remeasurement after issuance. Valuation of the Public Rights
is considered a Level 3 valuation. The following table presents the quantitative information regarding market assumptions used in the
valuation of the Public Rights:
|
| |
May 27, 2025 | | |
|
Unit price | |
$ | 10.03 | | |
|
Pre-adjusted value per Public Right | |
$ | 0.99 | | |
|
Market adjustment(1) | |
| 15.0 | % | |
|
Fair value per Public Right | |
$ | 0.148 | | |
|
(1) | Market
adjustment reflects additional factors not fully captured by low volatility selection, which may include likelihood of Business Combination
occurring, market perception or lack of available or suitable targets, or possible post-acquisition decline of stock price prior to beginning
of the exercise period. The adjustment is determined by comparing traded Public Right prices to simulated model outputs. The market adjustment
was determined by calibrating traded Public Rights prices as of the valuation dates. |
|
At December 31, 2025, substantially all of the
assets held in the Trust Account were held in U.S. Treasury Bills and are presented at fair value on the balance sheet.
The following table presents information about
the Companys assets that are measured at fair value on a recurring basis at December 31, 2025 and indicates the fair value hierarchy
of the valuation inputs the Company utilized to determine such fair value:
|
| |
| | |
December 31, | | |
|
| |
Level | | |
2025 | | |
|
Assets: | |
| | | |
| | | |
|
U.S. Treasury Bills | |
| 1 | | |
$ | 235,632,380 | | |
F-17
| | |
**NOTE9. SEGMENT INFORMATION**
ASC Topic 280, Segment Reporting,
establishes standards for companies to report in their financial statement information about operating segments, products, services, geographic
areas, and major customers. Operating segments are defined as components of an enterprise that engage in business activities from which
it may recognize revenues and incur expenses, and for which separate financial information is available that is regularly evaluated by
the Companys chief operating decision maker (CODM), or group, in deciding how to allocate resources and assess performance.
The Companys CODM has been identified as
the Chief Executive Officer and the Chief Financial Officer, who reviews the assets, operating results, and financial metrics for the
Company as a whole to make decisions about allocating resources and assessing financial performance. Accordingly, management has determined
that the Company only has one operating segment.
The CODM assesses performance for the single segment
and decides how to allocate resources based on net income or loss that also is reported on the statements of operations as net income
or loss. The measure of segment assets is reported on the balance sheet as total assets. When evaluating the Companys performance
and making key decisions regarding resource allocation, the CODM reviews several key metrics included in net income or loss and total
assets, which include the following:
|
| |
December31, 2025 | | |
|
Cash | |
$ | 1,096,942 | | |
|
Cash and investments held in Trust Account | |
$ | 235,633,565 | | |
****
|
| |
For the Period from January 7, 2025 (Inception) Through December31, 2025 | | |
|
General and administrative costs | |
$ | 467,994 | | |
|
Earnings on investments held in Trust Account | |
$ | 5,633,565 | | |
The accounting policies used to measure the net
income or loss of the segment are the same as those described in the summary of significant accounting policies. General and administrative
expenses are reviewed and monitored by the CODM to manage and forecast cash to ensure enough capital is available to complete a Business
Combination or similar transaction within the 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 statements of operations, are the significant segment expenses provided to the CODM on a regular basis.
The CODM reviews earnings on investments held
in Trust Account to measure and monitor shareholder value and determine the most effective strategy of investment with the Trust Account
funds while maintaining compliance with the Trust Agreement.
All other segment items included in net income or loss are reported
on the statement of operations and described within their respective disclosures
****
**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
| | |
**SIGNATURES**
Pursuant to the requirements of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
|
|
CAL REDWOOD ACQUISITION CORP. | |
|
|
| |
|
Dated: March 31, 2026 |
By: |
/s/ Daven Patel | |
|
|
|
Daven Patel | |
|
|
|
Chief Executive Officer and Director | |
Pursuant to the requirements of the Securities
Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities indicated
on March 31, 2026.
|
Signatures |
|
Capacity in Which Signed | |
|
|
|
| |
|
/s/ Daven Patel |
|
Chief Executive Officer and Director | |
|
Daven Patel |
|
(Principal Executive Officer) | |
|
|
|
| |
|
/s/ James Chan |
|
Chief Financial Officer | |
|
James Chan |
|
(Principal Financial and Accounting Officer) | |
|
|
|
| |
|
/s/ Vivek Ranadiv |
|
Chairman of the Board and President | |
|
Vivek Ranadiv |
|
| |
|
|
|
| |
|
/s/ Eric C.W.Dunn |
|
Director | |
|
Eric C.W.Dunn |
|
| |
|
|
|
| |
|
/s/ Sanjay Subhedar |
|
Director | |
|
Sanjay Subhedar |
|
| |
|
|
|
| |
|
/s/ Lori Wright |
|
Director | |
|
Lori Wright |
|
| |
77