Copley Acquisition Corp 10-Q

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations Overview We are a blank check company incorporated as a Cayman Islands exempted company and incorporated for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses. While we intend to focus our search on businesses in the Asia Pacific and North American regions, we are not limited to a particular industry or geographic region for purposes of consummating an initial business combination. We intend to effectuate our initial business combination using cash from the proceeds of our initial public offering (“IPO”) and the private placement (“Private Placement”) of the private units (“Private Placement Units”), our shares, debt or a combination of cash, shares and debt. On June 10, 2026, the Company entered into a Business Combination Agreement with Ignite Proteomics Holdings, Inc., Ignite Proteomics, LLC and affiliated merger entities pursuant to which the parties agreed to consummate a business combination transaction, subject to the satisfaction of customary closing conditions and required approvals. Following completion of the proposed transaction, Ignite and the Company are expected to become wholly owned subsidiaries of a publicly traded parent company. As a result, the Company’s primary business activities are now focused on completing the proposed Business Combination and satisfying the required regulatory, financing and shareholder approval conditions necessary to close the transaction. Results of Operations We have neither engaged in any operations nor generated any revenues to date. Our only activities since inception have been organizational activities, those necessary to prepare for the IPO and those related to identifying and evaluating an initial business combination target and, following execution of the Business Combination Agreement on June 10, 2026, activities associated with pursuing the proposed Business Combination with Ignite Proteomics, LLC, including transaction execution, regulatory filings, capital raising activities and shareholder approval processes. Following the IPO, we will not generate any operating revenues until after completion of our initial business combination. We generate non-operating income in the form of interest and dividend income on the proceeds derived from the IPO, which are held in the Trust Account (defined below). After the IPO, we incur increased expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as expenses as we conduct due diligence on prospective business combination candidates. For the three and six months ended June 30, 2026, we had a net income of $1,485,641 and $2,774,553 respectively which consisted primarily of dividends earned on marketable securities held in the Trust Account, partially offset by general and administrative expenses. For the three and six months ended June 30, 2025, we had a net income of $913,544 and $838,845, respectively, which consisted of general and administrative expenses. Liquidity and Capital Resources On May 2, 2025, we consummated our IPO of 15,000,000 units (the “Units”), at $10.00 per Unit, generating gross proceeds of $150,000,000. Simultaneously with the closing of our IPO, we consummated the sale of 499,643 Private Placement Units at a price of $10.00 per Private Placement Unit for the first 67,500 Private Placement Units purchased and at a price of $7.00 per Private Placement Unit for the remaining Private Placement Units in a private placement to our sponsor, Copley Acquisition Sponsors, LLC (the “Sponsor”), generating total gross proceeds of $3,700,000. Simultaneously with the closing of the IPO, the underwriters exercised the over-allotment option in full to purchase 2,250,000 Units. As a result, we sold an additional 2,250,000 Units at $10.00 per Unit, generating gross proceeds of $22,500,000. Simultaneously with the closing of the full exercise of the over-allotment option, we completed the private sale of an aggregate of 56,250 Private Placement Units, at a purchase price of $7.00 per Private Placement Unit, generating gross proceeds of $393,750. 24 Transaction costs amounted to $8,257,998, consisting of $2,156,295 of cash underwriting fees, $5,175,000 of deferred underwriting fees, $322,575 for the fair value of the Representative Shares (defined below) and $604,128 of other offering costs. Following the closing of the IPO and over-allotment option, an amount of $173,362,500 ($10.05 per Unit) from the net proceeds of the sale of the Units in the IPO and the Private Placement was placed in a trust account (the “Trust Account”). The funds in the Trust Account will be invested or held only in either (i) U.S. government treasury bills with a maturity of 185 days or less or in money market funds investing solely in U.S. Treasuries, (ii) uninvested cash, or (iii) an interest-bearing bank demand deposit account or other accounts at a bank. We intend to use substantially all of the funds held in the Trust Account, including any amounts representing interest earned on the Trust Account, to complete our initial business combination. To the extent that our capital stock or debt is used, in whole or in part, as consideration to complete our initial 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. We will use funds held outside of 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, structure, negotiate and complete a business combination, and to pay taxes to the extent the interest earned on the Trust Account is not sufficient to pay our taxes. On June 10, 2026, the Company entered into a definitive Business Combination Agreement relating to a proposed business combination with Ignite Proteomics, LLC. Under the terms of the Business Combination Agreement, completion of the proposed transaction is subject to minimum financing requirements. The parties have agreed to seek aggregate transaction financing of at least $22.5 million, including a minimum of $15.0 million to be raised by the Company and at least $7.5 million to be raised by the target. Such financing may include cash remaining in the Trust Account following shareholder redemptions and additional financing arrangements, including convertible notes, an equity line of credit and/or a standby equity purchase agreement. The amount of cash ultimately available at closing will depend on, among other things, the level of shareholder redemptions and the Company’s ability to secure the required financing commitments. Accordingly, the Company’s liquidity needs are no longer limited to operating expenses associated with identifying a target company, but also include funding transaction costs associated with consummating the proposed Business Combination and satisfying the financing conditions required under the Business Combination Agreement. We expect our primary liquidity requirements during that period to include approximately $200,000 for legal, accounting, due diligence, travel and other expenses in connection with any business combinations; $75,000 for legal and accounting fees related to regulatory reporting requirements; $85,000 for NYSE continued listing fees; $100,000 for directors’ and officers’ insurance and $15,000 for general working capital that will be used for miscellaneous expenses and reserves, net of estimated interest income. These amounts are estimates and may differ materially from our actual expenses. If our available funds are not sufficient, we may be unable to continue searching for, or conducting due diligence with respect to, prospective target businesses. Moreover, if our 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, we may have insufficient funds available to operate our business prior to our initial business combination. Moreover, we may need to obtain additional financing either to complete our initial business combination or because we become obligated to redeem a significant number of our public shares upon completion of our initial business combination, in which case we may issue additional securities or incur debt in connection with such business combination. 25 Going Concern Consideration As of June 30, 2026, the Company had cash of $3,099 and a working capital deficit of $401,141. The Company has incurred and expects to continue to incur significant costs as a publicly traded company, to evaluate business opportunities, and to close on a Business Combination. Such costs will be incurred prior to generating any operating revenues. 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,” management had determined that the Company lacks the financial resources it needs to sustain operations for a reasonable period of time, which is considered to be one year from the date of the issuance of the condensed financial statements. Mandatory liquidation at the end of the completion window is a liquidity condition that raises substantial doubt about the Company’s ability to continue as a going concern. In addition, the Company’s officers, directors and Sponsor may, but are not obligated to, provide additional Working Capital Loans to fund operating activities and transaction costs pending completion of the proposed Business Combination. As of June 30, 2026, the outstanding balance under the Working Capital Loan was $441,609. On June 10, 2026, the Company entered into a Business Combination Agreement with Ignite Proteomics Holdings, Inc. and related parties. Completion of the proposed Business Combination is subject to a number of conditions, including minimum financing requirements. The Business Combination Agreement contemplates aggregate financing of at least $22.5 million and, on a best-efforts basis, up to $30.0 million, consisting of cash remaining in the Trust Account following shareholder redemptions and additional financing sources, including convertible notes, an equity line of credit and/or a standby equity purchase agreement. The financing structure contemplates a minimum of $15.0 million to be raised by the Company and at least $7.5 million to be raised by Ignite. The amount of cash available at closing will depend, in part, upon the level of shareholder redemptions and the Company’s ability to obtain the financing required by the Business Combination Agreement. There can be no assurance that these financing requirements will be satisfied or that the proposed Business Combination will be consummated. If the Company is unable to complete the proposed Business Combination, obtain the required financing or otherwise raise sufficient liquidity, it may be required to curtail operations and seek alternative financing arrangements. Accordingly, management has determined that substantial doubt exists about the Company’s ability to continue as a going concern for a period of one year from the date these unaudited condensed financial statements are issued. The accompanying unaudited condensed financial statements do not include any adjustments that might result from the outcome of this uncertainty. Related Party Transactions Founder Shares On December 3, 2024, the Sponsor received 5,750,000 of the Company’s Class B ordinary shares (“Founder Shares”) in exchange for $25,000 paid for deferred offering costs borne by the Sponsor. Up to 750,000 of such Founder Shares were subject to forfeiture to the extent that the underwriters’ over-allotment was not exercised in full. On May 2, 2025, the over-allotment option was exercised in full, resulting in no forfeiture of Founder Shares. Private Placement On May 2, 2025, the Company consummated the sale of 499,643 Private Placement Units at a price of $10.00 per Private Placement Unit for the first 67,500 Private Placement Units sold and at a price of $7.00 for each additional Private Placement Unit in a private placement to the Sponsor, generating gross proceeds of $3,700,000 to the Company. On May 2, 2025, with the closing of the full exercise of the over-allotment option, we completed the private sale of an aggregate of additional 56,250 Private Placement Units, at a purchase price of $7.00 per Private Placement Unit, generating gross proceeds of $393,750. 26 Due to Related Party The Sponsor paid certain formation, operating or deferred offering costs on behalf of the Company. These amounts are due on demand and non-interest bearing. During the period from November 26, 2024 (inception) through May 2, 2025, the Sponsor paid $276,803 on behalf of the Company, of which $25,000 was paid in exchange for the issuance of Founder Shares and $251,803 was transferred into the Promissory Note. As of June 30, 2026 and December 31, 2025, no amounts were due to the related party. Promissory Note - Related Party On December 3, 2024, the Sponsor issued an unsecured promissory note to the Company (the “Promissory Note”), pursuant to which the Company could borrow up to an aggregate principal amount of $700,000. On April 18, 2025, the Promissory Note was amended and restated, resulting in a reduction of the maximum aggregate principal amount to $525,000. The Promissory Note was non-interest bearing and payable on the earlier of (i) December 31, 2025, or (ii) the consummation of the Initial Public Offering. After borrowing under the Promissory Note, the loans were to be repaid upon completion of the Initial Public Offering out of the offering proceeds not held in the Trust Account. On May 2, 2025, the $251,803 balance due to the Sponsor was transferred into the Promissory Note. On May 30, 2025, $105,194 of these borrowings were repaid using proceeds not held in the Trust Account, resulting in a balance of $146,609, which was transferred into a Working Capital Loan on June 12, 2025. Following the repayment and transfer, the Promissory Note was settled in full, resulting in no balance as of June 30, 2026 or December 31, 2025, and no further borrowings are permitted under its terms. Working Capital Loans In order to fund working capital deficiencies or finance transaction costs in connection with initial Business Combination, the Sponsor or an affiliate of the Sponsor or certain officers and directors may, but are not obligated to, loan the Company funds as may be required, from time to time or at any time, in whatever amount they deem reasonable in their sole discretion (“Working Capital Loans”). In addition, the Sponsor or an affiliate of the Sponsor or certain officers and directors may loan the Company funds of up to $3,450,000 (assuming the underwriters exercise their over-allotment option, and no public shares have been redeemed at the time of each extension) to cover the cost of extension options to allow additional time to complete an initial Business Combination (“Extension Loans”). Such Working Capital Loans and Extension Loans may be convertible into units at a price of $7.00 per unit at the option of the lender at the time of the Business Combination. The units would be identical to the Private Placement Units and include one-half of one private warrant (each a “Working Capital Warrant” or “Extension Warrant”, respectively). If the Company does not complete an initial Business Combination, the Working Capital Loans and Extension Loans would be repaid out of funds not held in the Trust Account, and only to the extent available. Except for the foregoing, the terms of such Working Capital Loans and Extension Loans by the Sponsor or its affiliates, or officers and directors, if any, have not been determined and no written agreements exist with respect to such loans (except as disclosed below). On June 12, 2025, the Company entered into a Working Capital Loan with the Sponsor, pursuant to which the Company may borrow up to $450,000. The Working Capital Loan is non-interest bearing and matures on the earlier of (i) the date on which the Business Combination is consummated and (ii) the Company’s liquidation and is subject to conversion into units (as disclosed above). On June 12, 2025, the outstanding balance of $146,609 under the Company’s promissory note was transferred into the Working Capital Loan. During the six months ended June 30, 2026, the Company received additional proceeds of $295,000 under the Working Capital Loan. As of June 30, 2026 and December 31, 2025, the outstanding balance of the Working Capital Loan was $441,609 and $146,609, respectively. No Extension Loans were outstanding as of June 30, 2026 or December 31, 2025. 27 Other Contractual Obligations Registration Rights Pursuant to a registration rights agreement dated on the effectiveness of the Registration Statement on April 30, 2025, the holders of the Founder Shares, Private Placement Units (including securities contained therein), and units (including securities contained therein) that may be issued on conversion of working capital loans or extension loans are entitled to registration rights pursuant to a registration rights agreement, signed on the effective date of the IPO, requiring the Company to register such securities for resale. The holders of these securities are entitled to make up to three demands, excluding short form demands, that the Company’s register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the Company completion of initial business combination and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. The Company will bear the expenses incurred in connection with the filing of any such registration statements. Underwriting Agreement The Company granted the underwriters a 45-day option to purchase up to 2,250,000 additional Units to cover over-allotments at the IPO price, less the underwriting discounts and commissions. The underwriters were entitled to a cash underwriting discount of $0.15 per Unit, or $2,587,500 in the aggregate, payable upon the closing of the IPO. In addition, the underwriters are entitled to a deferred fee of $0.30 per Unit, or $5,175,000 in the aggregate. In addition, the Company issued to the representative of the underwriters an aggregate of 172,500 Class A ordinary shares for no cash consideration at the closing of the IPO (the “Representative Shares”). On May 2, 2025, the underwriters exercised the over-allotment option in full to purchase 2,250,000 Units. As a result, the Company sold an additional 2,250,000 Units at $10.00 per Unit, generating gross proceeds to the Company of $22,500,000. Critical Accounting Estimates The preparation of condensed 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. Actual results could materially differ from those estimates. As of June 30, 2026, we have not identified any critical accounting policies or estimates. Off-Balance Sheet Arrangements; Commitments and Contractual Obligations; Quarterly Results As of June 30, 2026, we did 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 will qualify as an “emerging growth company” and under the JOBS Act will be allowed to comply with new or revised accounting pronouncements based on the effective date for private (not publicly traded) companies. We are electing 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 condensed financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates. 28 Additionally, we are in the process of evaluating the benefits of relying on the other reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, if, as an “emerging growth company,” we choose to rely on such exemptions we may not be required to, among other things: (1) provide an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act; (2) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act; (3) comply with any requirement that may be adopted by the PCAOB 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 (4) disclose certain executive compensation-related items such as the correlation between executive compensation and performance and comparisons of the CEO’s compensation to median employee compensation. These exemptions will apply for a period of five years following the completion of the IPO or until we are no longer an “emerging growth company,” whichever is earlier. Recent Accounting Standards Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on our condensed financial statements. 29 Item 3. Quantitative 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.