What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-08-14 compared with 2025-05-15 · 147 added, 70 removed, 205 unchanged (51% of the section changed)

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meeting the conditions of paragraphs (d)(2), (d)(3) and (d)(4) of Rule 2a-7 of the Investment Company Act, or held as cash or cash items

(including in demand deposit accounts) at a bank as determined by us, until the earlier of the consummation of:

(i) the completion of

the Business Combination and (ii) the distribution of the Trust Account, as described below.

(including in demand deposit accounts) at a bank as determined by us, until the earlier of:

(i) the completion of the Business Combination

and (ii) the distribution of the Trust Account, as described below.

We have until January 8, 2027 (24 months from

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In March 2024, the SEC adopted final rules relating

to The Enhancement and Standardization of Climate-Related Disclosures for Investors, that would require registrants to provide climate-related

disclosures in registration statements and certain periodic reports.

The final rules set forth requirements for disclosure of material

climate-related risks, mitigation activities, targets and goals, and governance.

The rules also require disclosure of certain greenhouse

gas emissions metrics and attestation of emissions disclosures.

Subsequent to the issuance of the final rules, in April 2024, the SEC

has released an order staying the final rules pending judicial review of all of the petitions challenging the rules and in March 2025,

to The Enhancement and Standardization of Climate-Related Disclosures for Investors , that would require registrants to provide

climate-related disclosures in registration statements and certain periodic reports.

The final rules set forth requirements for disclosure

of material climate-related risks, mitigation activities, targets and goals, and governance.

The rules also require disclosure of certain

greenhouse gas emissions metrics and attestation of emissions disclosures.

Subsequent to the issuance of the final rules, in April 2024,

the SEC has released an order staying the final rules pending judicial review of all of the petitions challenging the rules and in March

2025, the SEC voted to end its defense of the rules.

We are continuing to monitor the developments pertaining to the rules.

However, if these

reporting requirements are implemented following the completion of judicial review, they may significantly increase the complexity of

our periodic reporting as a U.S.

these reporting requirements are implemented following the completion of judicial review, they may significantly increase the complexity

of our periodic reporting as a U.S.

public company.

On July 16, 2025, we entered into a business combination

agreement (the “Business Combination Agreement”), with BSTR Holdings, Inc., a Delaware corporation (“Pubco”),

BSTR Intermediate, a Cayman Islands exempted company (“CEPO Merger Sub”), BSTR Holdings (Cayman), a Cayman Islands exempted

company (the “Seller”), BSTR Newco, LLC, a Delaware limited liability company and a wholly owned subsidiary of the Seller

(“Newco”), PEMS Sub A, Inc., a Delaware corporation and a wholly owned subsidiary of the Company (“CEPO Subsidiary A”),

PEMS Sub B, Inc., a Delaware corporation and a wholly owned subsidiary of CEPO Subsidiary A (“CEPO Subsidiary B”) and PEMS

Merger Sub C, Inc., a Delaware corporation and a wholly owned subsidiary of CEPO Subsidiary B (“Newco Merger Sub”).

Pursuant to the Business Combination Agreement,

and subject to the terms and conditions set forth therein, upon the consummation of the transactions contemplated thereby, (a) we will

merge with and into CEPO Merger Sub, with CEPO Merger Sub continuing as the surviving entity (the “CEPO Merger”), and with

our shareholders (i) holding our Class B ordinary shares, par value $0.0001 per share (“Class B ordinary shares”), receiving

one Class A ordinary share for each Class B ordinary share held by such shareholder immediately prior to the CEPO Merger, and (ii) receiving

one share of Class A common stock, par value $0.01 per share, of Pubco (“Pubco Class A Stock”) for each Class A ordinary share

held by such shareholder at the time of the CEPO Merger, and (b) at least two hours after the CEPO Merger, Newco Merger Sub will merge

with and into Newco, with Newco continuing as the surviving company (the “Newco Merger”, and together with the CEPO Merger,

the “Mergers”), and with (i) the Seller receiving shares of Pubco Class A Stock and Class B common stock, par value $0.01

per share, of Pubco in exchange for its membership interests in Newco (the “Newco Interests”), and (ii) the Newco Equity PIPE

Investors (as defined below) converting their Newco Interests into non-voting units of Newco (the “Newco Exchange Interests”),

which Newco Exchange Interests shall be exchangeable for an equal number of shares of Pubco Class A Stock or at Pubco’s election,

the cash equivalent.

As a result of the Mergers and the other transactions contemplated by the Business Combination Agreement (the “Transactions”),

CEPO Merger Sub will become a wholly owned subsidiary of Pubco, CEPO Subsidiary B will become the managing member of Newco, and Pubco

will become a publicly traded company.

Contemporaneously with the execution of the Business

Combination Agreement, (a) we and Pubco entered into subscription agreements (the “July Convertible Notes Subscription Agreements”)

with certain investors (the “July Convertible Note Investors”), pursuant to which the July Convertible Note Investors have

agreed to purchase, in a private placement, $500,000,000 aggregate principal amount of 1.00% convertible senior secured notes due five

years after the closing date of the Transactions (“Convertible Notes”) to be issued pursuant to and on the terms set forth

in an indenture (the “Indenture”), (b) we and Pubco entered into a subscription agreement with an investor, pursuant to which

such investor has agreed to purchase, in a private placement, shares of Pubco’s 7.00% perpetual convertible preferred stock (the

“Preferred Stock”) to be issued by Pubco pursuant to and on the terms set forth in a certificate of designations with an aggregate

principal amount of $30,000,000 at $85.00 per share, (c) we and Pubco entered into subscription agreements with certain investors (the

“CEPO Cash Equity PIPE Investors”), pursuant to which the CEPO Cash Equity PIPE Investors have agreed to purchase, in a private

placement immediately prior to the CEPO Merger, 40,000,000 Class A ordinary shares, at a purchase price of $10.00 per share payable in

cash, for an aggregate purchase price of $400,000,000, (d) we and Pubco entered into subscription agreements with certain investors (the

“CEPO Bitcoin Equity PIPE Investors”), pursuant to which the CEPO Bitcoin Equity PIPE Investors have agreed to purchase, in

a private placement immediately prior to the CEPO Merger, a certain number of Class A ordinary shares, at $10.00 per share, in exchange

for 4,156.11 Bitcoin in the aggregate, with the number of Class A ordinary shares to be issued to each CEPO BTC Equity PIPE Investor being

equal to (i) the product of (A) the number of Bitcoin contributed by such CEPO BTC Equity PIPE Investor multiplied by (B) the U.S.

price of one Bitcoin as determined by the average of the CME CF Bitcoin Reference Rate - New York Variant for the ten-day period ending

on the second day prior to the closing date of the Transactions (the “Closing Bitcoin Price”), and then divided by (ii) $10.00,

and (e) we, Pubco and Newco entered into subscription agreements with certain investors (the “Newco Equity PIPE Investors”),

pursuant to which the Newco Equity PIPE Investors have agreed to purchase, in a private placement immediately prior to the Newco Merger,

a certain number of Newco Interests, at $10.00 per interest, in exchange for 865 Bitcoin in the aggregate, with the number of Newco Interests

to be issued to each Newco Equity PIPE Investor being equal to (i) the product of (A) the number of Bitcoin contributed by such Newco

Equity PIPE Investor multiplied by (B) the Closing Bitcoin Price, and then divided by (ii) $10.00.

Pubco has also granted the July Convertible Note

Investors options to purchase (i) additional Convertible Notes in an aggregate principal amount of up to $125,000,000, exercisable within

fifteen days following the date of the July Convertible Notes Subscription Agreements (the “First Convertible Notes Option”),

(ii) additional Convertible Notes in an aggregate principal amount of up to $125,000,000, exercisable within thirty days following the

date of the July Convertible Notes Subscription Agreements, and (iii) Preferred Stock in an aggregate amount of up to $320,000,000, exercisable

within thirty days following the date of the July Convertible Notes Subscription Agreements.

As of August 1, 2025, certain July Convertible

Notes Investors exercised their pro rata share of the First Convertible Notes Option (including with respect to the unexercised

portion of other July Convertible Notes Investors) to purchase additional Convertible Notes in an aggregate principal amount of $34,870,000.

Simultaneously with the execution of the Business

Combination Agreement, we, Pubco and the Sponsor entered into a Sponsor Support Agreement pursuant to which the Sponsor, among other things,

agreed to vote its Class A ordinary shares and Class B ordinary shares in favor of the adoption and approval of the Business Combination

Agreement and the transactions contemplated thereby.

Certain of our existing agreements will be amended

or amended and restated in connection with the Transactions.

On August 7, 2025, we and Pubco entered into subscription

agreements with certain investors (the “August Convertible Note Investors”), pursuant to which the August Convertible Note

Investors have agreed to purchase, in a private placement, $30,500,000 aggregate principal amount of Convertible Notes to be issued pursuant

to and on the terms set forth in the Indenture.

For more information regarding the Transactions,

refer to our filings with the SEC, including the Current Reports on Form 8-K filed by us with the SEC on July 17, 2025, July 22, 2025

and August 7, 2025, and the other filings we and Pubco may make from time to time with the SEC.

Liquidity and Capital Resources

As of March 31, 2025 and December 31, 2024, we

had approximately $275,000 and $0, respectively, of cash in our operating account.

As of March 31, 2025 and December 31, 2024, we had

working capital of approximately $196,000 and a working capital deficit of approximately $299,000, respectively.

As of March 31, 2025

and December 31, 2024, approximately $1,186,000 and $0, respectively, of interest income earned on funds held in the Trust Account was

available to pay taxes, if any.

Our liquidity needs through March 31, 2025 have

As of June 30, 2025 and December 31, 2024, we

had $25,000 and $0, respectively, of cash in our operating account.

As of June 30, 2025 and December 31, 2024, we had a working capital

deficit of approximately $75,000 and approximately $299,000, respectively.

As of June 30, 2025 and December 31, 2024, approximately $3,316,000

and $0, respectively, of interest income earned on funds held in the Trust Account was available to pay taxes, if any.

Our liquidity needs through June 30, 2025 have

been satisfied through a contribution of $25,000 from the Sponsor in exchange for the issuance of our Class B ordinary shares, a loan

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Combination, the Sponsor has committed to loan us up to $1,750,000 to fund our expenses relating to investigating and selecting a target

business and other working capital requirements (the “Sponsor Loan”), of which no amount has been drawn by us as of both March

31, 2025 and December 31, 2024.

business and other working capital requirements (the “Sponsor Loan”), of which approximately $244,000 and $0 has been drawn

by us as of June 30, 2025 and December 31, 2024, respectively.

If the Sponsor Loan is insufficient, the Sponsor

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Capital Loans”).

As of both March 31, 2025 and December 31, 2024, we did not have any borrowings under the Working Capital Loans.

As of both June 30, 2025 and December 31, 2024, we did not have any borrowings under the Working Capital Loans.

Based on the foregoing, management believes that

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Results of Operations

Our entire activity from inception through March

Our entire activity from inception through June

30, 2025 related to our formation, the Initial Public Offering, and to our efforts toward locating and completing a suitable Business

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and auditing compliance), as well as for due diligence expenses.

For the three months ended March 31, 2025, we

had net income of approximately $993,000, which consisted of approximately $1,186,000 of interest income on investments held in the Trust

For the three months ended June 30, 2025, we had

net income of approximately $1,955,000, which consisted of approximately $2,130,000 of interest income on investments held in the Trust

Account, partially offset by approximately $145,000 of general and administrative expenses, and $30,000 of administrative expenses paid

to the Sponsor.

For the three months ended June 30, 2024, we had

a net loss of approximately $43,000, which resulted from approximately $43,000 of general and administrative expenses.

For the six months ended June 30, 2025, we had

net income of approximately $2,949,000, which consisted of approximately $3,316,000 of interest income on investments held in the Trust

Account, partially offset by approximately $309,000 of general and administrative expenses, and approximately $58,000 of administrative

expenses paid to the Sponsor.

For the three months ended March 31, 2024, we

had no net income or net loss.

For the six months ended June 30, 2024, we had

a net loss of approximately $43,000, which resulted from approximately $43,000 of general and administrative expenses.

Factors That May Adversely Affect Our Results of Operations

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Our results of operations and our ability to consummate the Business Combination could

be impacted by, among other things, downturns in the financial markets or in economic conditions, inflation, fluctuations in interest

rates, increases in tariffs, and geopolitical instability, such as the military conflicts in Ukraine and the Middle East.

this time predict the likelihood of one or more of the above events, their duration or magnitude or the extent to which they may negatively

impact our business and our ability to complete the Business Combination.

be impacted by, among other things, downturns in the financial markets or in economic conditions, fluctuations in interest rates, and

geopolitical instability, such as the military conflicts in Ukraine and the Middle East.

We cannot at this time predict the likelihood

of one or more of the above events, their duration or magnitude or the extent to which they may negatively impact our business and our

ability to complete the Business Combination.

Contractual Obligations

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to, provide us Working Capital Loans.

As of both March 31, 2025 and December 31, 2024,

we had no borrowings under the Sponsor Loan, Working Capital Loans or the Sponsor Note.

Cash and Cash Equivalents Held in the Trust

As of March 31, 2025, our assets held in the Trust

Account at CF Secured were comprised of approximately $650,000 in cash and approximately $200,536,000 in cash equivalents.

As of June 30, 2025 and December 31, 2024, we

had approximately $244,000 and $0, respectively, outstanding under the Sponsor Loan.

As of both June 30, 2025 and December 31, 2024,

we had no borrowings under the Working Capital Loans or the Sponsor Note.

Investment Held in the Trust Account

Starting on January 9, 2025, our investment in

a money market fund has been held in the Trust Account that is custodied by CF Secured with Continental acting as trustee.

Critical Accounting Policies and Estimates

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To the extent actual experience differs from the assumptions

used, our condensed balance sheets, unaudited condensed statements of operations, unaudited condensed statements of comprehensive income,

unaudited condensed statements of shareholders’ equity (deficit) and unaudited condensed statements of cash flows could be materially

We believe that the following accounting policies involve a higher degree of judgment and complexity.

used, our condensed balance sheets, unaudited condensed statements of operations, unaudited condensed statements of shareholders’

equity (deficit) and unaudited condensed statements of cash flows could be materially affected.

We believe that the following accounting

policies involve a higher degree of judgment and complexity.

Emerging Growth Company

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subject to mandatory redemption (if any) are classified as liability instruments and measured at fair value.

Shares of conditionally

redeemable Class A ordinary shares (including Class A ordinary shares that feature redemption rights that are either within the control

of the holder or subject to redemption upon the occurrence of uncertain events not solely within our control) are classified as temporary

At all other times, Class A ordinary shares are classified as shareholders’ equity.

All of the Public Shares feature certain

redemption rights that are considered to be outside of our control and subject to the occurrence of uncertain future events.

as of March 31, 2025 and December 31, 2024, 20,000,000 and 0 Class A ordinary shares subject to possible redemption, respectively, are

presented as temporary equity outside of the shareholders’ deficit section of our condensed balance sheets.

We recognize any subsequent

changes in redemption value immediately as they occur and adjust the carrying value of redeemable Class A ordinary shares to the redemption

value at the end of each reporting period.

Immediately upon the closing of the Initial Public Offering, we recognized the accretion from

initial book value to redemption amount value of redeemable Class A ordinary shares.

This method would view the end of the reporting

period as if it were also the redemption date for the security.

The change in the carrying value of redeemable Class A ordinary shares

also resulted in charges against Additional paid-in capital and Accumulated deficit.

Net Income Per Ordinary Share

We comply with the accounting and disclosure requirements

of ASC 260, Earnings Per Share .

Net income per ordinary share is computed by dividing net income applicable to shareholders by

the weighted average number of ordinary shares outstanding for the applicable periods.

We apply the two-class method in calculating earnings

per share and allocate net income pro rata to Class A ordinary shares subject to possible redemption, nonredeemable Class A ordinary shares

and Class B ordinary shares.

Accretion associated with the redeemable Class A ordinary shares is excluded from earnings per share as the

redemption value approximates fair value.

Shares of conditionally redeemable

Class A ordinary shares (including Class A ordinary shares that feature redemption rights that are either within the control of the holder

or subject to redemption upon the occurrence of uncertain events not solely within our control) are classified as temporary equity.

all other times, Class A ordinary shares are classified as shareholders’ equity.

All of the Public Shares feature certain redemption

rights that are considered to be outside of our control and subject to the occurrence of uncertain future events.

Accordingly, as of June

30, 2025 and December 31, 2024, 20,000,000 and 0 Class A ordinary shares subject to possible redemption, respectively, are presented as

temporary equity outside of the shareholders’ deficit section of our condensed balance sheets.

We recognize any subsequent changes

in redemption value immediately as they occur and adjust the carrying value of redeemable Class A ordinary shares to the redemption value

at the end of each reporting period.

Immediately upon the closing of the Initial Public Offering, we recognized the accretion from initial

book value to redemption amount value of redeemable Class A ordinary shares.

This method would view the end of the reporting period as

if it were also the redemption date for the security.

The change in the carrying value of redeemable Class A ordinary shares also resulted

in charges against Additional paid-in capital and Accumulated deficit.

Net Income (Loss) Per Ordinary Share

We comply with the accounting and disclosure

requirements of ASC 260, Earnings Per Share .

Net income (loss) per ordinary share is computed by dividing net income (loss) applicable

to shareholders by the weighted average number of ordinary shares outstanding for the applicable periods.

We apply the two-class method

in calculating earnings per share and allocate net income (loss) pro rata to Class A ordinary shares subject to possible redemption,

nonredeemable Class A ordinary shares and Class B ordinary shares.

Accretion associated with the redeemable Class A ordinary shares is

excluded from earnings per share as the redemption value is not in excess of the fair value.

See Note 2—“Summary of Significant

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Off-Balance Sheet Arrangements and Contractual Obligations

As of March 31, 2025, we did not have any off-balance sheet arrangements

As of June 30, 2025, we did not have any off-balance sheet arrangements

as defined in Item 303(a)(4)(ii) of Regulation S-K and did not have any commitments or contractual obligations.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis