Item 1. Business
Item 1. Business.
General
We are a blank check company
incorporated as a Cayman Islands exempted company for the purpose of effecting a merger, share exchange, asset acquisition, share purchase,
recapitalization, reorganization or similar business combination involving the Company, with one or more businesses or entities, which
we refer to throughout this report as our “initial business combination”. We have neither engaged in any operations nor generated
any revenue to date. Based on our business activities, we are a “shell company” as defined under the Securities Exchange Act
of 1934 (the “Exchange Act”) because we have no operations and nominal assets consisting almost entirely of cash.
On May 29, 2025, the Company
consummated its initial public offering (the “IPO”) of 7,475,000 units (“Units”), including 975,000 additional
Units granted to the underwriters to cover over-allotments, if any (the “Over-Allotment Option”). Each Unit consists of one
Class A ordinary share, $0.0001 par value per share (“Class A ordinary shares”), and one right (“rights”) to receive
of one-fifth of one Class A ordinary share upon the completion of the initial business combination. The Units were sold at an offering
price of $10.00 per Unit, generating total gross proceeds of $74,750,000.
Simultaneously with the consummation
of the IPO and the sale of the Units, the Company consummated the private placement (“Private Placement”) of 230,000 units
(the “Private Placement Units”) to the Sponsor HoldCo, at a price of $10.00 per Private Placement Unit, generating total proceeds
of $2,300,000.
Upon the closing of the IPO,
management has agreed that $74,750,000, or $10.00 per Unit sold in the IPO, would be held into a U.S.-based trust account (“trust
account”), with Continental Stock Transfer & Trust Company acting as trustee. The funds held in the trust account are invested
only in U.S. government treasury bills with a maturity of 185 days or less, or in money market funds meeting the applicable
conditions of Rule 2a-7 promulgated under the Investment Company Act which invest solely in direct U.S. government treasury.
Except with respect to divided and/or interest earned on the funds held in the trust account that may be released to the Company to pay
the Company’s tax obligation, if any, the proceeds from the IPO and the sale of the Private Placement Units that are deposited
and held in the trust account will not be released from the trust account until the earliest to occur of (i) the completion of the
Company’s initial business combination, (ii) the redemption of any public shares properly tendered in connection with a shareholder
vote to amend the company’s memorandum and articles of association effective at the time to (A) modify the substance or timing
of obligation to redeem 100% of the Company’s public shares if the Company does not complete the Company’s initial business
combination by the Combination Deadline (as defined below), or (B) with respect to any other provision relating to shareholders’
rights or pre-business combination activity and (iii) the redemption of all of public shares if the Company is unable to complete
their initial business combination by the Combination Deadline, subject to applicable law. In no other circumstances will a public shareholder
have any right or interest of any kind to or in the trust account. The proceeds deposited in the trust account could become subject to
the claims of the Company’s creditors, if any, which could have priority over the claims of the public shareholders.
Our efforts to identify a
prospective target business will not be limited to a particular industry or geographic location. Since our IPO, our sole business activity
has been identifying and evaluating suitable target businesses. We presently have no revenue and have had losses since inception from
incurring formation and operating costs. We have relied upon the sale of our securities and loans from the Sponsor HoldCo, sponsor and
other parties to fund our operations.
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Initial Business Combination
Nasdaq rules require that we must complete one or more initial business
combinations with a total aggregate fair market value of at least 80% of the value of the assets held in the trust account (excluding
any deferred underwriters’ fees and taxes payable on the interest income earned on the trust account) at the time of our signing
of a definitive agreement in connection with our initial business combination. We refer to this as the 80% of net assets test. If our
board of directors determines that it is not able to independently determine the fair market value of the target business or businesses,
we may obtain an opinion from an independent investment banking firm or an independent valuation or appraisal firm, with respect to the
satisfaction of such criteria. In addition, pursuant to Nasdaq rules, any initial business combination must be approved by a majority
of our independent directors.
We currently intend to structure our initial business combination so
that the post-transaction company in which our public shareholders own shares will own or acquire 100% of the outstanding equity interests
or assets of the target business or businesses. We may, however, structure our initial business combination such that the post-transaction
company owns or acquires less than 100% of such interests or assets of the target business in order to meet certain objectives of the
target management team or shareholders or for other reasons, but we will only complete such initial business combination if the post-transaction
company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in
the target business sufficient for it not to be required to register as an investment company under the Investment Company Act of 1940,
as amended, or the Investment Company Act.
Even if the post-transaction company owns or acquires 50% or more
of the outstanding voting securities of the target, our shareholders prior to the initial business combination may collectively own
a minority interest in the post- transaction company, depending on valuations ascribed to the target and us in the initial business
combination. For example, we could pursue a transaction in which we issue a substantial number of new shares in exchange for all of
the issued and outstanding capital stock of a target. In this case, we would acquire a 100% controlling interest in the target.
However, as a result of the issuance of a substantial number of new shares, our shareholders immediately prior to our initial
business combination could own less than a majority of our issued and outstanding shares subsequent to our initial business
combination. If less than 100% of the outstanding equity interests or assets of a target business or businesses are owned or
acquired by the post-transaction company, the portion of such business or businesses that is owned or acquired is what will be
valued for purposes of the 80% of net assets test. If our initial business combination involves more than one target business, the
80% of net assets test will be based on the aggregate value of all of the target businesses. If our securities are not then listed
on Nasdaq for whatever reason, we would no longer be required to meet the foregoing 80% of net asset test.
To the extent we effect our initial business combination with a company
or business that may be financially unstable or in its early stages of development or growth, we may be affected by numerous risks inherent
in such company or business. Although our management will endeavor to evaluate the risks inherent in a particular target business, we
cannot assure you that we will properly ascertain or assess all significant risk factors.
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 a prospective target business with which our initial
business combination is not ultimately completed will result in our incurring losses and will reduce the funds we can use to complete
another business combination.
Business Strategy and Acquisition Criteria
Our management team intends to focus on creating shareholder value
by leveraging its experience in the management and operation of businesses to improve the efficiency of operations while implementing
strategies to scale revenue organically and/or through acquisitions. Consistent with our strategy, we have identified the following general
criteria and guidelines that we believe are essential in evaluating prospective target businesses. While we intend to use these criteria
and guidelines in evaluating prospective businesses, we may deviate from these criteria and guidelines should we consider it appropriate
to do so:
● Strong Management Team
We will seek to acquire those businesses with reasoned and strong managements
having a track record of driving growth and profitability; or having proposition of the businesses that may likely be well received by
public investors.
● Niche Deal Size with Growth Potential
We intend to seek target companies that have underexploited expansion
opportunities. This expansion can be accomplished through a combination of accelerating organic growth and finding attractive add-on acquisition
targets. Our management team has significant experience in identifying such targets and in helping target management assess the strategic
and financial fit. Similarly, our management has the expertise to assess the likely synergies and to help a target integrate acquisitions.
● Long-term Revenue Visibility with Defensible
Market Position
In management’s view, the target companies should be close to
an anticipated inflection point, such as those companies requiring additional management expertise, those companies able to innovate by
developing new products or services, or companies where we believe we have ability to achievement improved profitability performance through
an acquisition designed to help facilitate growth.
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● Benefits from Being a U.S. Public Company (Value
Creation and Marketing Opportunities)
We intend to search target companies that we believe will help offer
attractive risk-adjusted equity returns for our shareholders. Amount other criteria, we expect to evaluate financial returns based
on (i) the potential for organic growth in cash flows, (ii) the ability to achieve cost savings, (iii) the ability to accelerate
growth, including through the opportunity for follow-on acquisitions, and (iv) the prospects for creating value through other
value creation initiatives. We also plan to evaluate potential upside from future growth in the target business’ earnings and an
improved capital structure.
These criteria are not intended to be exhaustive. Any evaluation relating
to the merits of a particular initial business combination may be based, to the extent relevant, on these general guidelines as well as
other considerations, factors and criteria that our management may deem relevant.
Redemption Rights for Public Shareholder upon
Completion of Our Initial Business Combination
We will provide our public
shareholders with the opportunity to redeem all or a portion of their Class A ordinary shares upon the completion of our initial business
combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account calculated as of
two business days prior to the consummation of the initial business combination, including interest earned on the funds held in the trust
account and not previously released to us to pay our franchise and income taxes, if any, divided by the number of then-issued and outstanding
public shares, subject to the limitations described herein. The amount in the trust account is initially anticipated to be $10.00 per
public share. The per share amount we will distribute to investors who properly redeem their shares will not be reduced by the deferred
underwriting commissions we will pay to the underwriters. The redemption rights will include the requirement that a beneficial owner must
identify itself in order to validly redeem its shares. There will be no redemption rights upon the completion of our initial business
combination with respect to our rights. Further, we will not proceed with redeeming our public shares, even if a public shareholder has
properly elected to redeem its shares, if an initial business combination does not close. Our initial shareholders have entered into agreements
with us, pursuant to which they have agreed to waive their redemption rights with respect to any founder shares and public shares held
by them in connection with (i) the completion of our initial business combination and (ii) a shareholder vote to approve an amendment
to our memorandum and articles of association effective at the time (A) that would modify the substance or timing of our obligation to
provide holders of our Class A ordinary shares the right to have their shares redeemed 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 the Combination Deadline or (B) with
respect to any other provision relating to the rights of holders of our Class A ordinary shares.
Manner of Conducting Redemptions
We will provide our
public shareholders with the opportunity to redeem all or a portion of their Class A ordinary shares upon the completion of our
initial business combination either (i) in connection with a general meeting called to approve the initial business combination or
(ii) by means of a tender offer. The decision as to whether we will seek shareholder approval of a proposed initial business
combination or conduct a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors such
as the timing of the transaction and whether the terms of the transaction would require us to seek shareholder approval under
applicable law or stock exchange listing requirement or whether we were deemed to be a foreign private issuer (which would require a
tender offer rather than seeking shareholder approval under SEC rules). Asset acquisitions and share purchases would not typically
require shareholder approval while direct mergers with our company and any transactions where we issue more than 20% of our issued
and outstanding ordinary shares or seek to amend our memorandum and articles of association effective at the time would typically
require shareholder approval. We currently intend to conduct redemptions in connection with a shareholder vote unless shareholder
approval is not required by applicable law or stock exchange listing requirement or we choose to conduct redemptions pursuant to the
tender offer rules of the SEC for business or other reasons. So long as we obtain and maintain a listing for our securities on
Nasdaq, we will be required to comply with Nasdaq rules. If we held a shareholder vote to approve our initial business combination,
we will, pursuant to our Current Charter:
●
conduct the redemptions in conjunction with a proxy solicitation pursuant to Regulation 14A of the Exchange Act, which regulates the solicitation of proxies, and not pursuant to the tender offer rules; and
●
file proxy materials with the SEC.
Submission of Our Initial Business Combination
to a Stockholder Vote
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.
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If we seek shareholder
approval of our initial business combination, we will complete our initial business combination only if we obtain the approval of an
ordinary resolution under Cayman Islands law, which requires the affirmative vote of a majority of the shareholders who attend and
vote at a general meeting of the company. In such case, our initial shareholders have agreed to vote their founder shares and public
shares in favor of our initial business combination. As a result, for purpose of seeking shareholder approval for our initial
business combination, in addition to our founder shares and Class A ordinary shares underlying the Private Placement Units (the
“private shares”), we would need additional 2,593,483 public shares to vote in order to obtain a quorum which is,
pursuant to the Current Charter, one-third of our shareholders entitled to vote at the meeting. Once a quorum is obtained, (i)
assuming only a quorum is present and voted at such meeting held to vote on our initial business combination, we do not need any
additional vote from public shareholders to approve the initial business combination, or (ii) assuming all issued and outstanding
shares are present and voted, we need additional 2,593,483, or 34.7%, of the 7,475,000 public shares sold in our initial public
offering to be voted in favor of a transaction (none of our officers, directors, initial shareholders or their affiliates has
indicated any intention to purchase units in our initial public offering or any units or Class A ordinary shares in the open market
or in private transactions (other than the private units)). Each public shareholder may elect to redeem their public shares
irrespective of whether they vote for or against the proposed transaction or vote at all.
Limitation on Redemption upon Completion of our Initial Business
Combination if We Seek Stockholder 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 Current Charter provides that a public shareholder, together with any affiliate of such
shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as defined under
Section 13 of the Exchange Act), will be restricted from redeeming its shares with respect to more than an aggregate of 15% of the
shares sold in the IPO, which we refer to as “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 initial business combination as a means to force us or our management to
purchase their shares at a significant premium to the then-current market price or on other undesirable terms. Absent this
provision, a public shareholder holding more than an aggregate of 15% of the shares sold in the IPO could threaten to exercise its
redemption rights if such holder’s shares are not purchased by us, our Sponsor HoldCo, sponsor or our management at a premium
to the then-current market price or on other undesirable terms. By limiting our shareholders’ ability to redeem no more than
15% of the shares sold in the IPO 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 an
initial business combination with a target that requires as a closing condition that we have a minimum net worth or a certain amount
of cash.
However, we would not be
restricting our shareholders’ ability to vote all of their shares (including Excess Shares) for or against our initial business
combination.
Redemption of Public Shares and Liquidation if No Initial Business
Combination
Under the Current Charter,
if we do not consummate the initial business combination by the Combination Deadline, 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 franchise and income taxes, if any (less up to $100,000
of interest to pay dissolution expenses) divided by the number of the then issued and outstanding public shares, which redemption will
completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidation distributions,
if any); and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders
and our board of directors, liquidate and dissolve, subject in each case to our obligations under Cayman Islands law to provide for claims
of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect
to our warrants, which will expire worthless if we fail to consummate an initial business combination by the Combination Deadline. Our
Current Charter provides that, if we wind up for any other reason prior to the consummation of our initial business combination, we will
follow the foregoing procedures with respect to the liquidation of the trust account as promptly as reasonably possible but not more than
ten business days thereafter, subject to applicable Cayman Islands law.
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Corporate Information
Our executive offices are
located at 419 Webster Street, Monterey, CA 93940, and our telephone number is 831-204-7337. We are required to file annual
reports on Form 10-K and quarterly reports on Form 10-Q with the SEC on a regular basis, and are required to disclose certain material
events in current reports on Form 8-K. The SEC maintains an Internet website that contains reports, proxy and information statements and
other information regarding issuers that file electronically with the SEC. The SEC’s Internet website is located at http://www.sec.gov.
In addition, the Company will provide copies of these documents without charge upon request from us by mail to 419 Webster Street, Monterey,
CA 93940.
Status as a Public Company
We believe our structure
will make us an attractive initial business combination partner to target businesses. As an existing public company, we offer a target
business an alternative to a traditional initial public offering through a merger or other initial business combination with us. In an
initial business combination transaction with us, the owners of the target business may, for example, exchange their shares of stock in
the target business for our Class A Ordinary Shares (or shares of a new holding company) or for a combination of our Class A Ordinary
Shares and cash, allowing us to tailor the consideration to the specific needs of the sellers. We believe target businesses will find
this method a more expeditious and cost-effective method to becoming a public company than a typical initial public offering. The typical
initial public offering process takes a significantly longer period of time than the typical initial business combination transaction
process, and there are significant expenses in the initial public offering process, including underwriting discounts and commissions,
that may not be present to the same extent in connection with an initial 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 underwriter’s ability to complete the offering, as well as general market conditions,
which could delay or prevent the offering from occurring or have negative valuation consequences. Once public, 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 company’s profile among potential new customers and vendors and aid in attracting talented
employees.
While we believe that our
structure and our management team’s backgrounds will make us an attractive business partner, some potential target businesses may
view our status as a special purpose acquisition company, including our lack of an operating history and our potential need to seek shareholder
approval of a proposed initial business combination, negatively.
We are an “emerging
growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended, (the “Securities Act”) and as
modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). As such, we are eligible to take advantage of
certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth
companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404
of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements,
and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and shareholder approval of any
golden parachute payments not previously approved. If some investors find our securities less attractive as a result, there may be a less
active trading market for our securities and the prices of our securities may be more volatile.
In addition, Section 107
of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided
in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging
growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies.
We intend to take advantage of the benefits of this extended transition period.
We will remain an emerging
growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of the IPO,
(b) in which we have total annual gross revenue of at least $1.235 billion, or (c) in which we are deemed to be a large accelerated filer,
which means the market value of our ordinary shares that are held by non-affiliates exceeds $700 million as of the end of that year’s
second fiscal quarter, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior
three-year period.
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Competition
In identifying, evaluating
and selecting a target business for our initial business combination, we have encountered, and expect to continue to encounter, intense
competition from other entities having a business objective similar to ours, including other blank check companies, private equity groups,
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 initial business combinations directly or through affiliates. Moreover, many of
these competitors possess greater financial, technical, human and other resources than us. Our ability to acquire larger target businesses
will be limited by our available financial resources. This inherent competitive 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 potential future dilutions that our outstanding
warrants represent, which may place us at a competitive disadvantage in successfully negotiating an initial business combination.
Facilities
We currently maintain our
executive offices at 419 Webster Street, Monterey, CA 93940. We consider our current office space adequate for our current operations.
Employees
We currently have two executive
officers, our Chief Executive Officer and Chairman, Timothy Lim, our Chief Financial Officer and Director, Evan Graj. The two individuals
are not obligated to devote any specific number of hours to our matters but they intend to devote as much of their time as they deem necessary
to our affairs until we have completed our initial business combination. The amount of time they will devote in any time period will vary
based on the status of the proposed Transactions and, if the proposed Transactions are not consummated, whether a target business has
been selected for our initial business combination and the stage of the initial 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.