East West Ave Acquisition Corp. 10-Q

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS References in this Quarterly Report on Form 10-Q (the “Quarterly Report”) to “we,” “us,” “our” or the “Company” refer to East West Ave Acquisition Corp. References to our “management” or our “management team” refer to our officers and directors, references to the “Sponsor A” refer to East West Avenue LLC, references to the “Sponsor B” refer to NFR Capital Limited, and references to the “Sponsors” refer to Sponsor A and Sponsor B. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the unaudited condensed financial statements and the notes thereto contained elsewhere in this Quarterly Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties. Special Note Regarding Forward-Looking Statements This Quarterly Report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that are not historical facts, and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements other than statements of historical fact included in this Quarterly Report, including statements in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section regarding the Company’s financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. Words such as “expect,” “believe,” “anticipate,” “intend,” “estimate,” “seek” and variations and similar words and expressions are intended to identify such forward-looking statements. Such forward-looking statements relate to future events or future performance, but reflect management’s current beliefs, based on information currently available. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the Risk Factors section of the Company’s Registration Statement on Form S-1 declared effective by the Securities Exchange Commission (the “SEC”) on June 16, 2026. The Company’s securities filings can be accessed on the EDGAR section of the SEC’s website at www.sec.gov. Except as expressly required by applicable securities law, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise. Overview We are a blank check company incorporated on October 30, 2025 as a Nevada corporation 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 or entities. Although we will not limit our search to any particular industry, we intend to focus our search for a target business in the financial technology, compute infrastructure, and energy solutions sectors. In addition, although we will not limit our search to any particular geographic region, we will not undertake our initial business combination with any company being based in or having the majority of the company’s operations in China (including Hong Kong and Macau). We will utilize cash derived from the proceeds of our initial public offering (the “IPO”), our securities, debt or a combination of cash, securities and debt, in effecting our initial business combination. Results of Operations We have neither engaged in any operations nor generated any revenues to date. Our only activities from October 30, 2025 (inception) through May 31, 2026 were organizational activities and those necessary to prepare for the IPO, described below. We do not expect to generate any operating revenues until after the completion of our Business Combination. Subsequent to the IPO, we generate non-operating income in the form of interest income on marketable securities held in our trust account established for the benefit of the public shareholders and the underwriters of the IPO with Equiniti Trust Company, LLC acting as trustee (the “Trust Account”). We incur expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses. For the period from March 1, 2026 through May 31, 2026, we have a net loss of $13,455, which consist of operating expenses. For the period from October 30, 2025 (inception) through May 31, 2026, we had an accumulated deficit of $27,107 that consist of formation costs and operating expenses. 1 Liquidity and Capital Resources As of May 31, 2026 and November 30, 2025, we had cash available to us of $831,306 and $20,000, respectively, and had working capital deficit of $228,539 and working capital of $120,000, respectively. Subsequent to the quarterly period covered by this Quarterly Report, on August 3, 2026, we consummated the IPO of 10,000,000 units at $10.00 per Unit, which is discussed in Note 9 to the accompanying unaudited condensed financial statements, generating gross proceeds of $100,000,000. Simultaneously with the closing of the IPO, we consummated the sale of an aggregate of 272,500 private placement units, at a price of $10.00 per private placement unit in a private placement to the sponsors, generating gross proceeds of $2,725,000. Upon the closing, the underwriter also forfeited its over-allotment option in full, as a result of which, 375,000 founder shares issued to Sponsor A will be forfeited accordingly without any consideration. Of this amount, $100,500,000 is held in the Trust Account. For the avoidance of doubt, the funds held in the Trust Account (including the interest earned on the funds held in the Trust Account) will not be used to pay any federal, state, local, excise or other tax associated with the Company being a Nevada corporation. The Sponsors will provide sufficient loans as working capital to the Company to pay any such taxes owed from an account other than the Trust Account. The remaining $852,500 is not held in the Trust Account. We intend to use substantially all of the net proceeds of the IPO, including the funds held in the Trust Account, to acquire a target business or businesses and to pay our expenses relating thereto. To the extent that our share capital is used in whole or in part as consideration to effect our initial business combination, the remaining proceeds held in the Trust Account, as well as any other net proceeds not expended, will be used as working capital to finance the operations of the target business. Such working capital funds could be used in a variety of ways including continuing or expanding the target business’ operations, for strategic acquisitions and for marketing, research and development of existing or new products. Such funds could also be used to repay any operating expenses or finders’ fees that we had incurred prior to the completion of our initial business combination if the funds available to us outside of the Trust Account were insufficient to cover such expenses. Over the next 12 months from the closing of the IPO (or 15 months if we enter into a definitive business combination agreement by August 3, 2027), we will be using the funds held outside of the Trust Account for 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 business combination. Out of the funds available outside the Trust Account, we anticipate that we will incur approximately: ● $120,000 of expenses for legal, accounting, due diligence, travelling and other expenses associated with structuring, negotiating and documenting successful business combinations; ● $50,000 of expenses for legal and accounting related to regulatory reporting obligations; ● $80,000 for NASDAQ and other continued listing expenses; ● $180,000 for office space, utilities and secretarial and administrative support; ● $120,000 for directors’ and officers’ liability insurance; ● $108,000 for certain director compensation; and ● $194,500 for other miscellaneous expenses. If our estimates of the costs of undertaking in-depth due diligence and negotiating our initial business combination is less than the actual amount necessary to do so, or the amount of interest available to us from the Trust Account is less than we expect as a result of the current interest rate environment, 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 consummate our initial business combination or because we become obligated to redeem a significant number of our public shares upon consummation of our initial business combination, in which case we may issue additional securities or incur debt in connection with such business combination. Subject to compliance with applicable securities laws, we would only consummate such financing simultaneously with the consummation of our initial business combination. Following our initial business combination, if cash on hand is insufficient, we may need to obtain additional financing in order to meet our obligations. 2 Related Party Transactions On November 8, 2025, the Sponsor A, paid $5,000 in exchange for 20,000 founder shares, or approximately $0.25 per share. On November 20, 2025, we issued a dividend of approximately 142.75 founder shares for every issued and outstanding founder share, or an aggregate of 2,855,000 dividend shares, in exchange for an additional consideration of $20,000, resulting in the Sponsor A holding an aggregate of 2,875,000 founder shares for a per share consideration of $0.0087. On March 5, 2026, the Sponsor A entered into a securities assignment agreement with the Sponsor B, pursuant to which, the Sponsor B acquired 560,000 founder shares for $4,872, for a per share consideration of $0.0087, and agreed to acquire 80,000 units in the private placement at $10.00 per unit to be consummated simultaneously with the consummation of the IPO. On July 30, 2026, Our Sponsor A entered into a securities transfer agreement with each of our directors, pursuant to which, the Sponsor A transferred (w) 100,000 founder shares to Ms. Huang, (x) 40,000 founder shares to Mr. Kerkaert, (y) 20,000 founder shares to each of Mr. Parikh and Honna, and (z) 10,000 founder shares to Mr. Verjee. The number of founder shares outstanding was determined based on the expectation that the total size of the IPO would be a maximum of 11,500,000 units if the underwriters’ over- allotment option is exercised in full, and therefore that such founder shares would represent 20% of the outstanding shares after the IPO (not including the representative shares, private shares, or any share underlying the units issuable upon conversion of working capital loans). Upon the closing, the underwriter forfeited its over-allotment option in full, as a result of which, 375,000 founder shares issued to Sponsor A will be forfeited accordingly without any consideration. In connection with the closing of the IPO, our sponsors purchased 272,500 private units, at $10.00 per unit, including 192,500 units for the Sponsor A, and 80,000 for the Sponsor B, respectively, for an aggregate purchase price of $2,725,000 (whether or not the over-allotment option is exercised). The private units are identical to the units sold in the IPO except that the private units (including the underlying securities) may not, subject to certain limited exceptions, be transferred, assigned or sold by the holders until after the completion of our initial business combination. A portion of the purchase price of the private units was added to the proceeds from the IPO so that at the time of closing $100,500,000 ($10.05 per share) was held in the Trust Account. If we do not complete our initial business combination within the combination window, the private units (and the underlying securities) will expire worthless. Upon separation, the private units will be separated into 272,500 private shares and 272,500 private rights. On November 8, 2025, our Sponsor A agreed to loan us an aggregate amount of up to $500,000 to be used for a portion of the expenses of the IPO. These loans were non-interest bearing, unsecured and due at the earlier of December 31, 2026 or the closing of the IPO. As of May 31, 2026 and November 30, 2025, we had borrowed $350,633 and $158,562 under the promissory note with our Sponsor A, respectively. At the closing of the IPO, the outstanding balance under the promissory note was fully repaid by the Company. W e have agreed to reimburse our Sponsor A $10,000 per month from August 3, 2026, for up to 12 months (or 15 months if we have executed a definitive business combination agreement by August 3, 2027), for office space, utilities and secretarial and administrative support made available to us. Upon completion of our initial business combination or our liquidation, we will cease paying these monthly fees. No administrative service expense had been paid for the period from October 30, 2025 (inception) through May 31, 2026 . Our insiders or their affiliates, will be reimbursed for any out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable business combinations. Our audit committee will review on a quarterly basis all payments that were made to our insiders or their affiliates and will determine which expenses and the amount of expenses that will be reimbursed. There is no cap or ceiling on the reimbursement of out-of-pocket expenses incurred by such persons in connection with activities on our behalf. 3 In addition, in order to finance transaction costs in connection with an intended initial business combination, our insiders or their affiliates may, but are not obligated to, loan us funds as may be required on a non-interest basis. If we complete an initial business combination, we would repay such loaned amounts. In the event that the initial business combination does not close, we may use amounts held outside the Trust Account to repay such loaned amounts but no proceeds from our Trust Account would be used for such repayment. Up to $3,000,000 of such loans may be convertible into private units at a price of $10.00 per unit at the option of the lender. Such units would be identical to the private units. Except as set forth above, the terms of such loans, if any, have not been determined and no written agreements exist with respect to such loans. Prior to the completion of our initial business combination, we do not expect to seek loans from parties other than our sponsors or their affiliates as we do not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in the Trust Account. As of May 31, 2026 and November 30, 2025, we had no borrowings under the working capital loans. Pursuant to a registration rights agreement dated July 30, 2026, among us and our sponsors, directors, officers and the underwriter, we may be required to register certain securities for sale under the Securities Act. These holders, and holders of units issued upon conversion of working capital loans, if any, are entitled under the registration rights agreement to make up to three demands that we register certain of our securities held by them for sale under the Securities Act and to have the securities covered thereby registered for resale pursuant to Rule 415 under the Securities Act. In addition, these holders have the right to include their securities in other registration statements filed by us. We will bear the costs and expenses of filing any such registration statements. Off-Balance Sheet Financing Arrangements We have no obligations, assets or liabilities which would be considered off-balance sheet arrangements. We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements. We have not entered any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or entered any non-financial assets. Contractual Obligations We do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities. Critical Accounting Estimates The preparation of unaudited 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. Making estimates requires management to exercise significant judgement. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could materially differ from those estimates. As of May 31, 2026, we did not have any critical accounting estimates to be disclosed. 4 Item 3. Quantitative and Qualitative Disclosures about Market Risk As a smaller reporting company, we are not required to make disclosures under this Item.