Harvard Ave Acquisition Corp 10-K

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Forward-Looking Statements 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 August 15, 2024 formed for the purpose of effecting a merger, amalgamation, share exchange, asset acquisition, share purchase, reorganization or other similar Business Combination with one or more businesses. We intend to effectuate our Business Combination using cash derived from the proceeds of the IPO and the sale of the Private Placement Units, 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. Results of Operations We have neither engaged in any operations nor generated any revenues to date. Our only activities from August 15, 2024 (inception) through December 31, 2025 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 Continental Stock Transfer & Trust Company 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. On October 24, 2025, we consummated the IPO of 14,500,000 Units at $10.00 per Unit, which is discussed in Note 3, generating gross proceeds of $145,000,000. Simultaneously with the closing of the IPO, we consummated the sale of an aggregate of 339,964 Private Placement Units and 1,019,892 Class A ordinary shares, par value $0.0001 per share at a price of $10.00 per Private Placement Unit in a private placement to the Sponsors and underwriters, generating gross proceeds of $3,399,640. Following the IPO, the forfeiture of the over-allotment option, and the sale of the Private Placement Units, a total of $145,000,000 was placed in the Trust Account. We incurred $6,780,776 of transaction costs, consisting of $1,800,000 of cash underwriting fee, $4,350,000 of deferred underwriting fee, and $630,776 of other offering costs. For the year ended December 31, 2025, we had a net income of $729,121, which consisted of interest earned on investments held in Trust Account of $1,003,054, partially offset by formation and operating costs of $273,933. For the period from August 15, 2024 (inception) through December 31, 2024, we had a net loss of $84,721, which consisted primarily of formation and operating costs. Liquidity and Capital Resources For the year ended December 31, 2025, net cash used in operating activities was $1,311,873. Net income of $729,121 was offset by interest earned on marketable securities held in Trust Account of $1,003,054 and payment of operating expense through promissory note – related party of $32,675. Changes in operating assets and liabilities, which used $1,070,615 cash in operating activities. For the period from August 14, 2024 (inception) through December 31, 2024, net cash used in operating activities was $11,000. Net loss of $84,721 was offset by payment of operating expense through promissory note – related party of $10,420, Operating costs applied to prepaid expenses contributed by Sponsor through promissory note – related party of $33,475, Payment of formation cost through promissory note – related party of $6,826. Changes in operating assets and liabilities, which provided $22,900 of cash from operating activities. For the year ended December 31, 2025, net cash used in investing activities was $145,000,000, consisting of investment of cash into Trust Account. For the period from August 14, 2024 (inception) through December 31, 2024, net cash used in investing activities was $nil. For the year ended December 31, 2025, net cash provided by financing activities was $146,311,873, which consists of proceeds from sale of Units, net of underwriting discounts paid $143,200,000, proceeds from sale of Private Placement Units of $1,013,093, proceeds from sale of restricted shares of $2,386,547, advances from Sponsor of $2,555,308 and proceeds from promissory note - related party of $216,059, partially offset by payments to Sponsor of $2,549,640, repayment of promissory note - related party of $100,000 and payment of offering costs of $409,494. 9 For the period from August 14, 2024 (inception) through December 31, 2024, net cash provided by financing activities was $11,100, which consists of proceeds from promissory note - related party of $12,000, partially offset by payment of offering costs of $900. At December 31, 2025, we had cash and marketable securities held in the Trust Account of $146,003,054 (including approximately $1,003,054 of interest income). 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 has a related party receivable of $965,240, which represents the cash held in our bank account, while the bank account is owned by a related party to the Sponsor, and as such we have no direct ownership of the account. We intend to use the funds held as related party receivable 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 $3,000,000 of such working capital loans may be convertible into working capital units of the post Business Combination entity at a price of $10.00 per Unit at the option of the lender. The Private Placement Units would be identical to the units. We do not believe we will need to raise additional funds in order to meet the expenditure 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. Going Concern Consideration As of December 31, 2025, the Company has a related party receivable of $965,240 and a working capital of $635,210. As of December 31, 2024, the Company had a related party receivable of $6,082 and a working capital deficit of $266,763. The Company has incurred and expects to continue to incur significant costs in pursuit of its financing and acquisition plans. These conditions raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued. There is no assurance that the Company’s plans to consummate a Business Combination will be successful or successful within the required period. The financial statement does not include any adjustments that might result from the Company’s inability to consummate the Business Combination to continue as a going concern. Off-Balance Sheet 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 to pay the Sponsors $10,000 per month for office space, utilities and secretarial and administrative support services provided to members of the management team. The Company granted the underwriters a 45-day option to purchase up to an additional 2,175,000 Units solely to cover over-allotments, if any. On October 24, 2025, the underwriters informed the Company its forfeiture of the over-allotment option to purchase the additional 2,175,000 Units. The underwriters were entitled to a cash underwriting discount of $1,800,000, which was paid at the closing of the IPO. Critical Accounting Estimates The preparation of 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 December 31, 2025, we did not have any critical accounting estimates to be disclosed. 10 Recent Accounting Pronouncements In November 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The amendments in this ASU require disclosures, on an annual and interim basis, of significant segment expenses that are regularly provided to the chief operating officer decision maker (“CODM”), as well as the aggregate amount of other segment items included in the reported measure of segment profit or loss. The ASU requires that a public entity disclose the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources. Public entities will be required to provide all annual disclosures currently required by Topic 280 in interim periods, and entities with a single reportable segment are required to provide all the disclosures required by the amendments in this ASU and existing segment disclosures in Topic 280. This ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The Company adopted ASU 2023-07 on August 15, 2024, its date of incorporation. In November 2024, the FASB issued Accounting Standards Update (“ASU”) 2024-03, “Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses”, requiring public entities to disclose additional information about specific expense categories in the notes to the financial statements on an interim and annual basis. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and for interim periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2024-03. Management does not believe that any other recently issued, but not effective, accounting standards, if currently adopted, would have a material effect on the Company’s financial statement. 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. This information appears following Item 15 of this Report and is included herein by reference. Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure. None.