Agriculture & Natural Solutions Acquisition Corp 10-K

Item 2. Properties. Our executive offices are located at 712 Fifth Avenue, 36 th Floor, New York, NY 10019. The cost for our use of this space is included in the $10,000 per month fee we pay to an affiliate of our Sponsor for office space, utilities, secretarial support and administrative services. We consider our current office space adequate for our current operations. Ite m 3. Legal Proceedings. There is no material litigation, arbitration or governmental proceeding currently pending against us or any members of our management team in their capacity as such. Item 4. Mi ne Safety Disclosures. Not applicable. 45 PA RT II Item 5. Ma rket for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities. Market Information Our Units began trading on NASDAQ under the ticker symbol “ANSCU” on November 9, 2023. Commencing on January 3, 2024, holders of the Units could elect to separately trade the Class A ordinary shares and Warrants included in the Units. The Class A ordinary shares and Warrants that are separated trade on NASDAQ under the symbols “ANSC” and “ANSCW,” respectively. Those Units not separated continue to trade on NASDAQ under the symbol “ANSCU.” Holders At March 25, 2025, there was one holder of record of our Units, one holder of record of our Class A ordinary shares, four holders of record of our Class B ordinary shares, one holder of record of our Warrants and four holders of record of our Private Placement Warrants. Securities Authorized for Issuance Under Equity Compensation Plans None. Recent Sales of Unregistered Securities; Use of Proceeds from Registered Offerings Unregistered Sales On March 24, 2021, the Sponsor purchased an aggregate of 10,062,500 Founder Shares for $25,000. The Founder Shares are identical to the Class A ordinary shares included in the Units being sold in the Public Offering except that the Founder Shares automatically convert into Class A ordinary shares at the time of the Company’s initial business combination (with such conversion taking place immediately prior to, simultaneously with, or immediately following the time of the Initial Business Combination, as may be determined by the directors of the Company) or earlier at the option of the holders thereof and are subject to certain transfer restrictions. In September 2021, the Sponsor surrendered 2,156,250 Founder Shares to the Company for no consideration. In November 2022, the Company effected a share dividend with respect to Founder Shares of 2,635,417 shares. In September 2023, the Sponsor surrendered an aggregate of 4,791,667 Founder Shares to the Company for no consideration, which were accepted and cancelled. In October 2023, the Company effected a share dividend with respect to the Company’s Founder Shares of 2,875,000 shares. In November 2023, the Sponsor surrendered to the Company for no consideration 400,000 Founder Shares, and an aggregate of 400,000 Founder Shares were issued to the independent directors at their original purchase price. The Sponsor agreed to forfeit up to an aggregate of 1,125,000 Founder Shares to the extent that the over-allotment option was not exercised in full by the underwriters so that the Founder Shares would represent 20% of the Company’s issued and outstanding shares after the Public Offering. As a result of the underwriters’ exercise of the full overallotment, these shares are no longer subject to forfeiture as of the release of the financial statements. The Founder Shares were issued in connection with our organization pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act. On November 13, 2023, simultaneously with the closing of our Public Offering, we consummated the sale of 9,400,000 Private Placement Warrants at a price of $1.00 per Private Placement Warrant in a private placement to our Warrant Holdings Sponsor and our independent directors, generating gross proceeds of $9.4 million. This amount includes the exercise in full of the underwriters’ option to purchase an additional 900,000 warrants to cover over-allotments. Each Private Placement Warrant entitles the holder thereof to purchase one Class A ordinary share at an exercise price of $11.50 per share. The Private Placement Warrants will become exercisable 30 days after the completion of our initial business combination, and will not expire except upon liquidation. None of the Private Placement Warrants will be redeemable by us. The sales of the Private Placement Warrants were made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act. Use of Proceeds On November 13, 2023, we consummated the Public Offering of 34,500,000 Units. The Units were sold at a price of $10.00 per Unit, generating gross proceeds of $345.0 million. The underwriters were granted a 45-day option from the date of the final prospectus relating to the Public Offering to purchase up to 4,500,000 additional Units to cover over-allotments, if any, at $10.00 per Unit, less underwriting discounts and commissions. The underwriters exercised the over-allotment option in full and purchased an additional 4,500,000 Over-Allotment Units at the closing of the Public Offering. 46 On November 13, 2023, simultaneously with the closing of the Public Offering, we completed the private sale of 9,400,000 Private Placement Warrants at a purchase price of $1.00 per Private Placement Warrant to our Warrant Holdings Sponsor and our independent directors, generating gross proceeds of $9.4 million. This amount includes the exercise in full of the underwriters’ option to purchase an additional 900,000 warrants to cover over-allotments. Citigroup Global Markets Inc. served as underwriters for the Public Offering. The securities sold in the Public Offering were registered under the Securities Act on a registration statement on Form S-1 (File No. 333-275150) (the “Registration Statement”). The SEC declared the Registration Statement effective on November 8, 2023. From March 22, 2021 (inception) through December 31, 2024, we incurred approximately $1.4 million for costs and expenses related to the Public Offering. In connection with the closing of the Public Offering, we paid a total of approximately $6.9 million in underwriting discounts and commissions. In addition, the underwriters agreed to defer approximately $12.1 million in underwriting discounts and commissions, which amount will be payable upon consummation of the initial business combination. Prior to the closing of the Public Offering, the Sponsor loaned us $300,000 under a promissory note (the “Note”). We repaid this Note to our Sponsor on November 22, 2023. There has been no material change in the planned use of proceeds from the Public Offering as described in our final prospectus filed with the SEC on November 13, 2023. After deducting the underwriting discounts and commissions (excluding the deferred portion of approximately $12.1 million, which amount will be payable upon consummation of our initial business combination) and offering expenses, the total net proceeds from the Public Offering and the sale of the Private Placement Warrants were approximately $346.5 million, of which approximately $345.0 million (or $10.00 per Unit) was placed in the Trust Account. Item 6. [Reserved]. 47 Item 7. Management’s Dis cussion and Analysis of Financial Condition and Results of Operations. References in this report (the “Annual Report”) to “we,” “us” or the “Company” refer to Agriculture & Natural Solutions Acquisition Corporation. References to our “management” or our “management team” refer to our officers and directors, and references to the “Sponsor” refer to Agriculture & Natural Solutions Acquisition Sponsor LLC. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the financial statements and the notes thereto contained elsewhere in this Annual Report on Form 10-K. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties. Actual results and the timing of events may differ materially from those contained in these forward-looking statements due to a number of factors, including those discussed in the Section entitled “Part I, Item 1A. Risk Factors” and elsewhere in this Annual Report on Form 10-K. Overview We are a blank check company incorporated as a Cayman Islands exempted company and formed for the purpose of effecting a merger, amalgamation, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses (the “initial business combination”). Our Sponsor is Agriculture & Natural Solutions Acquisition Sponsor LLC, a Cayman Islands limited liability company and an affiliate of Riverstone Investment Group LLC, a Delaware limited liability company, and its affiliates (“Riverstone”) and Impact Ag Partners LLC, a Wyoming Limited Liability company, and its affiliates (“Impact Ag,” and, together with Riverstone, the “Sponsor Entities”). Although we may pursue an acquisition opportunity in any business or industry, we intend to capitalize on the Sponsor Entities’ platforms to identify, acquire and build a company whose principal effort is developing and advancing a platform that decarbonizes the traditional agriculture sector and enhances natural capital at scale. We believe these areas of focus represent a favorable and highly fragmented market opportunity to consummate a business combination. The Registration Statement for our initial public offering was declared effective on November 8, 2023 (“Public Offering”). On November 13, 2023, we consummated the Public Offering of 34,500,000 units (the “Units”), including 4,500,000 Units that were issued pursuant to the underwriters’ full exercise of their overallotment option, at $10.00 per Unit, generating gross proceeds of $345.0 million, and incurring transaction costs of approximately $20.4 million, consisting of approximately $6.9 million of underwriting fees, approximately $12.1 million of deferred underwriting fees and approximately $1.4 million of other offering costs. The underwriters were granted a 45-day over-allotment option to up to 4,500,000 Over-Allotment Units at the Public Offering price, less the underwriting discounts and commissions. The underwriters exercised the over-allotment option in full and purchased an additional 4,500,000 Over-Allotment Units at the closing of the Public Offering. Simultaneously with the consummation of the Public Offering, we consummated the sale of 9,400,000 Private Placement Warrants at a price of $1.00 per Private Placement Warrant in a private placement to our Warrant Holdings Sponsor and our independent directors, generating gross proceeds of $9,400,000. This amount includes the exercise in full of the underwriters’ option to purchase an additional 900,000 warrants to cover over-allotments. Approximately $345.0 million ($10.00 per Unit) of the net proceeds of the Public Offering (including the Over-Allotment Units and approximately $12.1 million of the underwriters’ deferred discount) and certain of the proceeds of the Private Placement were placed in a trust account (the “Trust Account”) located in the United States with the Continental Stock Transfer & Trust Company (the “Trustee”), and invested only in U.S. “government securities,” within the meaning set forth in Section 2(a)(16) of the Investment Company Act of 1940 (the “Investment Company Act”), with a maturity of 185 days or less, or in money market funds meeting the conditions of paragraphs (d)(1), (d)(2), (d)(3) and (d)(4) of Rule 2a-7 under the Investment Company Act, which invest only in direct U.S. government treasury obligations, as determined by the Company, until the earlier of: (i) the completion of our initial business combination and (ii) the distribution of the Trust Account as otherwise permitted under our amended and restated memorandum and articles of association. If we are unable to complete an initial business combination within 24 months from the closing of the Public Offering, or November 13, 2025, we will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to us to pay our taxes (less up to $100,000 of interest to pay dissolution expenses and net of taxes payable), divided by the number of then-outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. 48 Proposed Business Combination Business Combination Agreement On August 28, 2024, the Company, NewCo, Merger Sub 1, Merger Sub 2, Dalio, Bell Group, AFA and, solely with respect to Section 2.07 of the Business Combination Agreement, the Sponsor entered into the Business Combination Agreement and the Business Combination, pursuant to which, among other things and subject to the terms and conditions contained in the Business Combination Agreement, (a) NewCo Ordinary Shares will be issued to those AFA Shareholders who have elected to participate in the Contributions, (b) Merger Sub 1 will merge with and into the Company, with the Company surviving the First Merger as a wholly owned subsidiary of NewCo and each holder of Warrants, public shares and Founder Shares will receive (i) in exchange for such Warrants, an equal number of NewCo Warrants and (ii) in exchange for such public shares and Founder Shares, NewCo Ordinary Shares, (c) immediately following the First Merger and as part of the same overall transaction as the First Merger, unless the Sponsor determines not to undertake the Second Merger in accordance with Section 2.07 of the Business Combination Agreement, the First Surviving Corporation will merge with and into Merger Sub 2, with Merger Sub 2 surviving the Second Merger as a wholly owned subsidiary of NewCo, (d) immediately following the Second Merger (or the First Merger if the Sponsor determines not to undertake the Second Merger in accordance with Section 2.07 of the Business Combination Agreement), if so elected by the AFA Shareholders, the AFA Shareholders will transfer some or all of their shares of AFA to NewCo in exchange for NewCo Ordinary Shares they received prior to the First Merger, and (e) immediately following the Contributions, AFA will be required to enter into the Buy Back Agreement to buy back the Outstanding Company Shares for cash in accordance with the Buy Back Agreement. The foregoing description of the Business Combination Agreement is qualified in its entirety by reference to the full text of the Business Combination Agreement, a copy of which is attached as Exhibit 2.1 to this Annual Report on Form 10-K, and incorporated herein by reference. Sponsor Support Agreement Concurrently with the execution of the Business Combination Agreement, the Sponsor and the Warrant Holdings Sponsor entered into the Sponsor Support Agreement with the Company, NewCo, AFA and the AFA Shareholders, pursuant to which, among other things, the Sponsor agreed to (i) subject to, and conditioned upon the occurrence of the Business Combination Closing, waive the anti-dilution rights set forth in the Company’s amended and restated memorandum and articles of association with respect to the Founder Shares held by it, (ii) vote all the Founder Shares and public shares held by it in favor of the Business Combination and each of the Proposals included on the agenda for the Company shareholders meeting, except that, to the extent restricted by the rules, regulations and guidance of the SEC, the Sponsor will not vote any public shares purchased by the Sponsor after the Company publicly announced its intention to engage in the Business Combination for or against any of the Proposals, and (iii) not redeem any public shares or Founder Shares in connection with such shareholder approval. Further, (i) the Sponsor agreed not to transfer the Founder Shares (or NewCo Ordinary Shares issuable upon conversion thereof in the Business Combination) until the earlier of (a) one year after the Business Combination Closing or (b) subsequent to the Business Combination Closing, (x) the first date on which the last sale price of the NewCo Ordinary Shares equals or exceeds $12.00 per share (as adjusted for share splits, share dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the Business Combination Closing or (y) the date on which NewCo completes a liquidation, merger, share exchange or other similar transaction that results in all of NewCo’s shareholders having the right to exchange their NewCo Ordinary Shares for cash, securities or other property and (ii) the Warrant Holdings Sponsor agreed not to transfer any of the Private Placement Warrants or NewCo Warrants (or NewCo Ordinary Shares issued or issuable upon the exercise of the NewCo Warrants) until 30 days after the Business Combination Closing. The foregoing description of the Sponsor Support Agreement is qualified in its entirety by reference to the full text of the Sponsor Support Agreement, a copy of which is attached as Exhibit 10.6 to this Annual Report on Form 10-K, and incorporated herein by reference. Form of Lock-Up Agreements Concurrently with the Business Combination Closing, each AFA Shareholder that elects to participate in the Contributions will enter into the Lock-Up Agreement with NewCo pursuant to which it will agree, subject to certain customary exceptions, not to (i) effect any sale of, offer to sell, contract or agree to sell, hypothecate, pledge, create a security interest in, grant any option to purchase or otherwise dispose of or agree to dispose of, directly or indirectly, or establish or increase a put equivalent position or liquidation with respect to or decrease a call equivalent position within the meaning of Section 16 of the Exchange Act, and the rules and regulations of the SEC promulgated thereunder with respect to, any NewCo securities, including NewCo Ordinary Shares, (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any NewCo securities, whether any such transaction is to be settled by delivery of such securities, in cash or otherwise or (iii) make any public announcement of any intention to effect any transaction specified in clause (i) or (ii) until the earlier of (a) six months after the Business Combination Closing and (b) the latest date possible to enable the NewCo securities to be transferred or cancelled on a liquidation, merger, share 49 exchange or other similar transaction of NewCo that results in all of NewCo’s shareholders having the right to exchange their NewCo Ordinary Shares for cash, securities or other property, unless such a transaction is undertaken by way of an Australian takeover bid under the Australian Corporations Act 2001 (Cth), in which case the restrictions in clause (i) and (ii) will not apply provided certain conditions are met. The foregoing description of the Lock-Up Agreement is qualified in its entirety by reference to the full text of the form of Lock-Up Agreement, a copy of which is attached as Exhibit A to the Business Combination Agreement, filed as Exhibit 2.1 to this Annual Report on Form 10-K, and incorporated herein by reference. Form of Amended and Restated Registration Rights Agreement Concurrently with the Business Combination Closing, the Company will enter into the A&R Registration Rights Agreement pursuant to which NewCo will agree that, within 15 calendar days after the Business Combination Closing, NewCo will file with the SEC (at NewCo’s sole cost and expense) the Resale Registration Statement registering the resale of certain securities held by or issuable to certain existing securityholders of the Company and AFA, and NewCo will use its commercially reasonable efforts to have the Resale Registration Statement declared effective as promptly as is reasonably practicable after the filing thereof. In certain circumstances, the holders can demand NewCo’s assistance with underwritten offerings and block trades. Such holders will be entitled to customary piggyback registration rights. The foregoing description of the A&R Registration Rights Agreement is qualified in its entirety by reference to the full text of the form of A&R Registration Rights Agreement, a copy of which is attached as Exhibit B to the Business Combination Agreement, filed as Exhibit 2.1 to this Annual Report on Form 10-K, and incorporated herein by reference. NewCo Relationship Deed Concurrently with the Business Combination Closing, NewCo and each AFA Shareholder that elects to participate in the Contributions will enter into the NewCo Relationship Deed pursuant to which such AFA Shareholder will have the right to nominate certain individuals to the board of directors of NewCo. The foregoing description of the NewCo Relationship Deed is qualified in its entirety by reference to the full text of the form of NewCo Relationship Deed, a copy of which is attached as Exhibit H to the Business Combination Agreement, filed as Exhibit 2.1 to this Annual Report on Form 10-K, and incorporated herein by reference. Buy Back Agreement Following approval by the AFA Shareholders and necessary lodgments being made with the Australian Securities and Investments Commission, AFA and each of the AFA Shareholders participating in the Company Redemption will enter into the Buy Back Agreement, pursuant to which AFA will effect the Company Redemption after the Contributions and buy back and cancel the Outstanding Company Shares for cash in accordance with the terms of the Buy Back Agreement. The completion of the buy back will take place immediately following the Contributions. The Buy Back Agreement contains customary representations and warranties by the parties thereto and termination rights that align with those in the Business Combination Agreement, as more particularly set forth in the Buy Back Agreement. The foregoing description of the Buy Back Agreement is qualified in its entirety by reference to the full text of the form of Buy Back Agreement, a copy of which is attached as Exhibit C to the Business Combination Agreement, filed as Exhibit 2.1 to this Annual Report on Form 10-K, and incorporated herein by reference. Transaction Update The parties are currently discussing the best path forward for the Business Combination in light of the increasingly volatile equity market conditions, including potentially mutually terminating the Business Combination Agreement. 50 Results of Operations We have neither engaged in any operations nor generated any revenues to date. Our only activities from March 22, 2021 (inception) through December 31, 2024 were organizational activities, those necessary to prepare for the Public Offering, described below, and subsequent to the Public Offering, the Company’s search for a target business with which to complete an initial business combination. We do not expect to generate any operating revenues until after the completion of our initial business combination, at the earliest. Following the Public Offering, we generate non-operating income in the form of interest income on marketable securities. We are incurring expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses in connection with completing an initial business combination. For the year ended December 31, 2024, we reported net income of $8,363,892 which consisted of general and administrative expenses of $10,241,431, offset by $18,605,323 of interest on Trust Account. For the year ended December 31, 2023, we reported net income of $1,305,390 which consisted of general and administrative expenses of $1,151,448, offset by $2,456,838 of interest on Trust Account. Liquidity and Capital Resources As of December 31, 2024, the Company had a cash balance of $1 and a working capital deficit of $3,350,028. Following the closing of the Public Offering, the Company’s liquidity needs were satisfied through using an amount from net proceeds from the Public Offering and the sale of Private Placement Warrants held outside of the Trust Account for existing accounts payable, identifying and evaluating prospective acquisition candidates, performing business due diligence on prospective target businesses, traveling to and from the offices, plants or similar locations of prospective target businesses, reviewing corporate documents and material agreements of prospective target businesses, selecting the target business to acquire and structuring, negotiating and consummating the initial business combination. For the year ended December 31, 2024, cash used in operating activities was $1, which is made up of a net income of $8,363,892, changes in operating assets and liabilities of $7,422,791, and formation and operating costs funded by a note payable to Sponsor of $2,818,641. These amounts were offset by an interest on Trust Account of $18,605,323. If the Company’s estimates of the costs of identifying a target business, undertaking in-depth due diligence and negotiating an initial 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 an initial business combination. Moreover, the Company may need to obtain additional financing either to complete an initial business combination or because it becomes obligated to redeem a significant number of its public shares upon completion of an initial business combination, in which case the Company may issue additional securities or incur debt in connection with such initial business combination. In addition, in order to finance transaction costs in connection with an initial business combination, our officers, directors and initial shareholders may, but are not obligated to, provide us with loans up to $1,500,000 as the Company may require (“Working Capital Loans”). As of December 31, 2024, the outstanding balance under the Working Capital Note (as defined below) was $838,405. See Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Contractual Obligations - Promissory Note” to this Annual Report on Form 10-K. The Company has incurred and expects to incur additional significant costs in pursuit of its financing and acquisition plans, including the proposed business combination. The Company has until November 13, 2025 to complete a business combination or cease all operations except for the purpose of liquidating. In connection with the Company’s assessment of going concern considerations in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 205-40, “Presentation of Financial Statements–Going Concern,” our management has determined that this condition raises substantial doubt about the Company’s ability to continue as a going concern through one year from the date of this Annual Report on Form 10-K if a business combination is not consummated. No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to liquidate after this date. The Company intends to complete a business combination before the mandatory liquidation date. Contractual Obligations Registration Rights The holders of the Founder Shares, Private Placement Warrants and Warrants that may be issued upon conversion of working capital loans, if any, and any Class A ordinary shares issuable upon the exercise of the Private Placement Warrants and Warrants that may be issued upon conversion of Working Capital Loans and upon conversion of the Founder Shares are entitled to registration rights pursuant to a registration rights agreement, dated November 8, 2023 (the “Registration Rights Agreement”). These holders are entitled to certain demand and “piggyback” registration rights. We will bear the expenses incurred in connection with the filing of any such registration statements. 51 Underwriting Agreement On November 13, 2023, the underwriters were entitled to, and the Company paid, an underwriting discount of $0.20 per Unit, or $6,900,000 in the aggregate, upon closing of the Public Offering. In addition, $0.35 per Unit, or approximately $12,075,000 in the aggregate, will be payable to the underwriters for deferred underwriting commissions. The deferred fee will become payable to the underwriters from the amounts held in the Trust Account solely in the event that we complete an initial business combination, subject to the terms of the underwriting agreement. Administrative Services Agreement Commencing on the date that our securities were first listed on NASDAQ and continuing until the earlier of our consummation of an initial business combination or our liquidation, we have agreed to pay an affiliate of our Sponsor a total of $10,000 per month for office space, utilities, secretarial support and administrative support made available to the Company. Upon completion of an initial business combination or the Company’s liquidation, we will cease paying these monthly fees. For the years ended December 31, 2024 and 2023, the Company incurred $120,000 and $15,000, respectively, in administrative fees. Promissory Note On August 28, 2024, in connection with the execution of the Business Combination Agreement, the Company issued an unsecured promissory note (the “Working Capital Note”) in the principal amount of $1,500,000 to Warrant Holdings Sponsor. The Working Capital Note does not bear interest and is repayable in full upon consummation of an initial business combination. If the Company does not complete an initial business combination, the Working Capital Note will not be repaid and all amounts owed under the Working Capital Note will be forgiven except to the extent that the Company has funds available to it outside of its Trust Account. Immediately prior to the consummation of an initial business combination, Warrant Holdings Sponsor may elect to convert all or any portion of the unpaid principal balance of the Working Capital Note into that number of warrants, each entitling the holder to purchase one Public Share (the “Working Capital Warrants”) equal to the principal amount of the Working Capital Note so converted divided by $1.00. The Working Capital Warrants will be identical to the Private Placement Warrants, including as to exercise price, exercisability and exercise period. The Working Capital Note is subject to customary events of default, the occurrence of which automatically trigger the unpaid principal balance of the Working Capital Note and all other sums payable with regard to the Working Capital Note becoming immediately due and payable. As of December 31, 2024, the outstanding balance under the Working Capital Note was $838,405. The foregoing description of the Working Capital Note is qualified in its entirety by reference to the full text of the Working Capital Note, a copy of which is attached as Exhibit 10.7 to this Annual Report on Form 10-K, and incorporated herein by reference. 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 expenses during the periods reported. Actual results could materially differ from those estimates. We have identified the following critical accounting estimates: Offering Costs The Company complies with the requirements of the ASC 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 Public Offering. FASB ASC 470-20, “Debt with Conversion and Other Options,” addresses the allocation of proceeds from the issuance of convertible debt into its equity and debt components. The Company applied this guidance to allocate Public Offering proceeds from the Units between Class A ordinary shares and Warrants, using the residual method by allocating Public Offering proceeds first to assigned value of the Warrants and then to the Class A ordinary shares. Offering costs allocated to the Class A ordinary shares were charged to temporary equity and offering costs allocated to the Warrants and Private Placement Warrants were charged to shareholders’ equity as Warrants and Private Placement Warrants after management’s evaluation were accounted for under equity treatment. The significant judgement involved in valuation of warrant values and the allocation of proceeds led to the assessment of offering costs as a critical accounting estimate. Recent Accounting Pronouncements In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The amendments in this ASU require disclosures, on an annual and interim basis, of significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”), as well as the aggregate amount of other segment items included in the reported measure of segment profit or loss. The ASU requires that a public entity disclose the title and position of the CODM and 52 an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources. Public entities will be required to provide all annual disclosures currently required by Topic 280 in interim periods, and entities with a single reportable segment are required to provide all the disclosures required by the amendments in this ASU and existing segment disclosures in Topic 280. This ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The Company adopted ASU 2023-07 as of December 31, 2024. Our management does not believe that any recently issued, but not effective, accounting standards, if currently adopted, would have a material effect on the Company’s financial statements. Off-Balance Sheet Arrangements As of the date of this Annual Report on Form 10-K, we do not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K. JOBS Act On April 5, 2012, the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) was signed into law. The JOBS Act contains provisions that, among other things, relax certain reporting requirements for qualifying public companies. We qualify as an “emerging growth company” under the JOBS Act and are allowed to comply with new or revised accounting pronouncements based on the effective date for private (not publicly traded) companies. We elected to delay the adoption of new or revised accounting standards, and as a result, we may not comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. As a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates. As an “emerging growth company,” we are not required to, among other things, (i) provide an auditor’s attestation report on our system of internal controls over financial reporting, (ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies, (iii) comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (auditor discussion and analysis), and (iv) disclose comparisons of the CEO’s compensation to median employee compensation. These exemptions will apply for a period of five (5) years following the completion of our Public Offering or until we otherwise no longer qualify as an “emerging growth company.” Item 7A. Q uantitative and Qualitative Disclosures About Market Risk. We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise required under this Item. Item 8. Fi nancial Statements and Supplementary Data Reference is made to pages F-1 through F-17 comprising a portion of this Annual Report on Form 10-K. Item 9. Cha nges In and Disagreements with Accountants on Accounting and Financial Disclosure. None.