Item 7. Management’s Discussion and Analysis
Item 7. Management’s
Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis of the Company’s
financial condition and results of operations should be read in conjunction with our audited financial statements and the notes related
thereto which are included in “Item 8. Financial Statements and Supplementary Data” of this Annual Report on Form 10-K. Certain
information contained in the discussion and analysis set forth below includes forward-looking statements. Our actual results may differ
materially from those anticipated in these forward-looking statements as a result of many factors, including those set forth under “Special
Note Regarding Forward-Looking Statements,” “Item 1A. Risk Factors” and elsewhere in this Annual Report on Form 10-K.
Overview
We are a blank check company incorporated in the
Cayman Islands on June 9, 2025 formed for the purpose of effecting a merger, amalgamation, share exchange, asset acquisition, share
purchase, reorganization or similar business combination with one or more businesses (the “Business Combination”). We intend
to effectuate our Business Combination using cash derived from the proceeds of the Initial Public Offering and the sale of the Private
Placement Warrants, our shares, debt or a combination of cash, shares and debt.
We expect to continue to incur significant costs
in the pursuit of our acquisition plans. We cannot assure you that our plans to complete a Business Combination will be successful.
In 2024, the SEC adopted additional rules and
regulations relating to SPACs. The 2024 SPAC Rules require, among other matters, (i) additional disclosures relating to SPAC sponsors
and related persons; (ii) additional disclosures relating to SPAC Business Combination transactions; (iii) additional disclosures
relating to dilution and to conflicts of interest involving sponsors and their affiliates in connection with proposed Business Combination
transactions; (iv) additional disclosures regarding projections included in SEC filings in connection with proposed Business Combination
transactions; and (v) the requirement that both the SPAC and its target company be co-registrants in connection with registration
statements relating to proposed Business Combination transactions. In addition, the SEC’s adopting release provided guidance describing
circumstances in which a SPAC could become subject to regulation under the Investment Company Act, including its duration, asset composition,
business purpose, and the activities of the SPAC and its management team. The 2024 SPAC Rules may materially affect our ability to negotiate
and complete our initial Business Combination and may increase the costs and time related thereto.
We may seek to extend the Combination Period consistent
with applicable laws, regulations and stock exchange rules by amending our Amended and Restated Articles. Such an amendment would require
the approval of our Public Shareholders, who will be provided the opportunity to redeem all or a portion of their Public Shares in connection
with the vote on such approval. Such redemptions will decrease the amount held in our Trust Account and our capitalization, and may affect
our ability to maintain our listing on Nasdaq. In addition, the Nasdaq Rules currently require SPACs (such as us) to complete our initial
Business Combination in accordance with the Nasdaq 36-Month Requirement. If we do not meet the Nasdaq 36-Month Requirement, our securities
will likely be subject to a suspension of trading and delisting from Nasdaq. Our Sponsor may also, in its discretion, explore transactions
under which it would sell its interest in our Company to another sponsor entity, which may result in a change to our Management Team.
Results of Operations
We have neither engaged in any operations nor
generated any revenues to date. Our only activities from June 9, 2025 (inception) through December 31, 2025 were organizational activities,
those necessary to prepare for the Initial Public Offering, described below, and identifying a target company for a Business Combination.
We do not expect to generate any operating revenues until after the completion of our Business Combination. Subsequent to the Initial
Public Offering, we generate non-operating income in the form of interest income on marketable securities held in 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 June 9, 2025 (inception)
through December 31, 2025, we had a net income $2,404,209, which consisted of Interest earned on marketable securities held in Trust
Account of $2,805,113 partially offset by general and administrative costs of $400,904.
Liquidity and Capital Resources
Factors That May Adversely Affect our Results
of Operations
Our results of operations and our ability to
complete an initial Business Combination may be adversely affected by various factors that could cause economic uncertainty and volatility
in the financial markets, many of which are beyond our control. Our results of operations and our ability to consummate an initial Business
Combination could be impacted by, among other things, downturns in the financial markets or in economic conditions, increases in oil
prices, inflation, fluctuations in interest rates, increases in tariffs, supply chain disruptions, declines in consumer confidence and
spending, public health considerations, 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 an initial Business Combination.
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Liquidity and Capital Resources
Until the consummation of the Initial Public Offering,
our only source of liquidity was an initial purchase of shares of Class B ordinary shares, par value $0.0001 per share, by the Sponsor
and loans from the Sponsor.
On September 29, 2025, we consummated the initial
public offering of 28,750,000 Units, including 3,750,000 Units issued as a result of the full exercise by the underwriters of their over-allotment
option, at $10.00 per Unit, generating gross proceeds of 287,500,000. Simultaneously with the closing of the Initial Public Offering,
the Company consummated the sale of an aggregate of 3,500,000 Private Placement Warrants to the Sponsor and Cantor Fitzgerald &
Co., the representative of the underwriters of the Initial Public Offering, at a price of $2.00 per warrant, or $7,000,000 in the aggregate,
in a private placement.
Following the Initial Public Offering, the full
exercise of the over-allotment option, and the sale of the Units, a total of $287,500,000 was placed in the Trust Account. We incurred
$17,861,874, consisting of $5,000,000 of cash underwriting fee, $12,250,000 of deferred underwriting fee, and $611,874 of other offering
costs.
For the period from June 9, 2025 (inception) through
December 31, 2025, net cash used in operating activities was $608,179. Net income of $2,404,209 consists of interest earned on marketable
securities held in the Trust Account of $2,805,113, payment of operation costs through promissory note of $10,420, and changes in operating
assets and liabilities of $217,695 used for operating activities.
At December 31, 2025, we had cash and marketable
securities held in the Trust Account of $290,305,113 (including approximately $2,805,113 of interest income and unrealized gains, net
of unrealized losses). We intend to use substantially all of the funds held in the Trust Account, including any amounts representing interest
earned on the Trust Account (less income taxes payable), to complete our Business Combination. To the extent that our share capital or
debt is used, in whole or in part, as consideration to complete our 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.
At December 31, 2025, we had cash of $869,527
held outside of the Trust Account. We intend to use the funds held outside 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, and structure, negotiate and complete a Business Combination.
In order to fund working capital deficiencies
or finance transaction costs in connection with a Business Combination, the Sponsor, or certain of our officers and directors or their
affiliates may, but are not obligated to, loan us funds as may be required. If we complete a Business Combination, we would repay such
loaned amounts. In the event that a Business Combination does not close, we may use a portion of the working capital 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 $1,500,000 of
such Working Capital Loans may be convertible into Private Placement Warrants of the post Business Combination entity at a price of $2.00
per warrant at the option of the lender. The units would be identical to the Private Placement Warrants.
We do not believe we will need to raise additional
funds in order to meet the expenditures required for operating our business. However, if our estimate of the costs of identifying a target
business, undertaking in-depth due diligence and negotiating a 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 Business Combination. Moreover, we may need to obtain additional
financing either to complete our Business Combination or because we become obligated to redeem a significant number of our Public Shares
upon consummation of our Business Combination, in which case we may issue additional securities or incur debt in connection with such
Business Combination.
Off-Balance Sheet Financing Arrangements
We have no obligations, assets or liabilities,
which would be considered off-balance sheet arrangements as of December 31, 2025. 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 into any off-balance sheet financing arrangements,
established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any non-financial assets.
Contractual Obligations
We do not have any long-term debt, capital lease
obligations, operating lease obligations or long-term liabilities, other than an agreement that the Company have granted the underwriter
a 45-day option from the date of the Initial Public Offering to purchase up to an additional 3,750,000 Units to cover over-allotments,
if any.
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The underwriters are entitled to a cash underwriting
discount of $5,000,000 (2.0% of the gross proceeds of the Units offered in the Initial Public Offering, excluding any proceeds from Units
sold pursuant to the underwriters’ over-allotment option). Additionally, the underwriters are entitled to a deferred underwriting
discount of 4.0% of the gross proceeds of the Initial Public Offering held in the Trust Account other than those sold pursuant to the
underwriters’ over-allotment option and 6.0% of the gross proceeds sold pursuant to the underwriters’ over-allotment option,
$12,250,000 in the aggregate upon the completion of the Company’s initial Business Combination subject to the terms of the underwriting
agreement.
Critical Accounting Estimates
The preparation of the financial statements and
related disclosures included in this Report under Item 1. “Financial Statements” in conformity with GAAP 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 included in this Report under Item 1. “Financial Statements”,
which Management consider in formulating its estimated, 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 December 31, 2025, we did not have any critical accounting estimates
to be disclosed.
Item 7A. 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.
Item 8. Financial Statements
and Supplementary Data.
Attached.
Item 9. Changes in and
Disagreements with Accountants on Accounting and Financial Disclosure.
None.