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Item 2. Management’s Discussion and Analysis

2025-11-14 compared with 2025-08-14 · 60 added, 35 removed, 84 unchanged (53% of the section changed)

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Cautionary Note Regarding Forward-Looking Statements

All statements other than statements of historical fact included in this Quarterly Report on Form 10-Q for the quarter ended June 30, 2025 (this “Report”) including, without limitation, statements under this Item regarding our financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements.

All statements other than statements of historical fact included in this Quarterly Report on Form 10-Q for the quarter ended September 30, 2025 (this “Report”) including, without limitation, statements under this Item regarding our financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements.

When used in this Report, words such as “anticipate,” “believe,” “estimate,” “expect,” “intend” and similar expressions, as they relate to us or our management, identify forward-looking statements.

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All subsequent written or oral forward-looking statements attributable to us or persons acting on our behalf are qualified in their entirety by this paragraph.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the unaudited condensed financial statements and the notes thereto included in this Report under Item 1.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the unaudited condensed consolidated financial statements and the notes thereto included in this Report under Item 1.

“Financial Statements.”

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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.

On May 30, 2025, the Company entered into the Everli Note for a principal amount of up to $300,000.

The Everli Note is interest bearing at 17.5% per annum and is secured by Everli’s assets.

The principal and accrued interest of the Everli Note shall be due and payable on the earliest of:

On May 30, 2025, the Company entered into the Original Everli Note with Everli and the Pledging Stockholder for a principal amount of up to $300,000.

The Original Everli Note bore interest at an annual compounded rate of 17.5% and was secured by a continuing security interest in all of Everli’s and its subsidiaries’ property and assets, and a pledge of equity interests by the Pledging Stockholder as collateral.

The principal and accrued interest of the Original Everli Note was due and payable on the earliest of:

(i) July 29, 2025, if the Term Sheet was terminated by the Company in its sole discretion;

(ii) five (5) business days after any other termination of the Term Sheet in accordance with the terms thereof;

(iii) five (5) business days after the termination of a definitive agreement for a Business Combination transaction involving Everli and the Company;

and (iv) five (5) business days after Everli’s receipt of at least an aggregate of $5,000,000 in proceeds under a $10 million senior secured convertible loan as contemplated under the Term Sheet.

On August 18, 2025, the Company, Everli and the Pledging Stockholder entered into the Amended Everli Note to amend the principal amount of the Original Everli Note to $1,000,000, including an OID of 10%.

On September 12, 2025, the Company, Everli and the Pledging Stockholder entered into the First Amendment to Everli Note to increase the principal amount to up to $1,250,000.

On September 29, 2025, the Company, Everli and the Pledging Stockholder entered into the Second Amendment to Everli Note to increase the principal amount to up to $3,250,000.

The Company complies with the requirements of the ASC 835 “Interest” and reports accrued interest and the amortization of the OID on the unaudited statement of operations as interest due from Everli and reports the loan amount and unpaid interest as due from Everli on the unaudited condensed consolidated balance sheets.

At September 30, 2025, Everli had borrowed $3,232,490 (via cash borrowings and the payment of multiple invoices by the Company for Everli) and had an outstanding balance of $3,627,400 on the unaudited condensed consolidated balance sheet.

For the three and nine months ended September 30, 2025, the Company recognized $392,370 and $394,910, respectively, in amortized OID and accrued interest on the unaudited condensed consolidated statements of operations.

On May 30, 2025, the Company issued the Original Sponsor Note in the aggregate principal amount of up to $300,000 to the Sponsor, for the Sponsor Loan.

The Sponsor Loan is interest bearing at a rate of 17.5% per annum, unsecured and due on the earliest of:

(i) July 29, 2025, if the Term Sheet is terminated by the Company in its sole discretion;

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and (iv) five (5) business days after Everli’s receipt of at least an aggregate of $5,000,000 in proceeds under a $10 million senior secured convertible loan as contemplated under the Term Sheet.

The Company complies with the requirements of the ASC 835 “Interest” and reports accrued interest on the unaudited statement of operations as interest due from Everli and reports the loan amount and unpaid interest as due from Everli on the unaudited condensed balance sheet.

At June 30, 2025, the Company had loaned Everli $227,079 (via the payment of multiple invoices for Everli) and had an outstanding balance of $230,619 on the unaudited condensed balance sheet.

For the three and six months ended June 30, 2025, the Company recognized $2,540 in accrued interest on the unaudited condensed statement of operations.

On August 18, 2025, the Company issued the Amended Sponsor Note to amend the principal amount of the Original Sponsor Note to $1,000,000, including an OID of 10%.

On September 12, 2025, the Company issued the First Amendment to Sponsor Note to the Sponsor to increase the principal amount to up to $1,250,000.

On September 29, 2025, the Company issued the Second Amendment to Sponsor Note to the Sponsor to increase the principal amount to up to $3,250,000.

The Company complies with the requirements of the ASC 835 “Interest” and reports accrued interest and the amortization of the OID on the unaudited condensed consolidated statements of operations as interest expense on Sponsor Loan and reports the loan amount and unpaid interest as Sponsor Loan on the unaudited condensed consolidated balance sheets.

At September 30, 2025, the Company had borrowed $3,178,079 under the Sponsor Loan and reported $3,561,989 on the unaudited condensed consolidated balance sheet.

For the three and nine months ended September 30, 2025, the Company recognized $383,801 and $383,910, respectively, in amortized OID and accrued interest expense on the unaudited condensed consolidated statements of operations.

Recent Developments

Business Combination with Everli

Everli Business Combination

On July 30, 2025, the Company entered into the Merger Agreement with Merger Sub, Everli, the Sponsor and the Escrowed Seller.

Pursuant to the Merger Agreement, subject to the terms and conditions set forth therein, upon the Closing, (a) the Company shall de-register from the Register of Companies in the Cayman Islands by way of continuation out of the Cayman Islands and into the State of Nevada and domesticate as a Nevada corporation and (b) then Merger Sub will merge with and into Everli, with Everli continuing as the surviving entity and a wholly owned subsidiary of the Company, with Everli’s equity holders receiving shares of common stock of the Company and with certain stockholders of Everli receiving super-voting stock of the Company in exchange for their existing super-voting stock of Everli.

The pre-money equity value of Everli in the Transactions is $180 million (subject to increase for certain financings consummated by Everli prior to the Closing).

For more information regarding the Transactions, refer to the Company’s Current Reports on Form 8-K filed with the SEC on July 31, 2025 and August 5, 2025 and the other filings the Company and Everli may make from time to time with the SEC.

The pre-money equity value of Everli in the Everli Business Combination is $180 million (subject to increase for certain financings consummated by Everli prior to the Closing).

For more information regarding the Everli Business Combination, refer to the Company’s Current Reports on Form 8-K filed with the SEC on July 31, 2025, August 5, 2025, October 3, 2025 and October 24, 2025 and the other filings the Company and Everli may make from time to time with the SEC.

On October 2, 2025, the parties to the Merger Agreement entered into the First Amendment to Merger Agreement, pursuant to which the deadline for Everli to procure at least $10,000,000 in Bridge Financing (as defined in the Merger Agreement), the failure of which entitles Everli to terminate the Merger Agreement, was extended from September 30, 2025 to October 21, 2025.

On October 21, 2025, Everli entered into the Everli Convertible Note with MCG for the aggregate principal amount of $7,500,000, which includes a $750,000 OID.

The Everli Convertible Note is interest bearing at 17.5% per annum and is secured by the assets of Everli and its subsidiaries.

MCG is an affiliate of the Sponsor.

The principal under the Everli Note and the Everli Convertible Note satisfied the $10,000,000 Bridge Financing requirement as provided in the Merger Agreement.

Results of Operations

We have neither engaged in any operations nor generated any revenues to date.

Our only activities from March 11, 2024 (inception) through June 30, 2025 were organizational activities, those necessary to prepare for the Initial Public Offering, as described below, and identifying a target company for a Business Combination.

Our only activities from March 11, 2024 (inception) through September 30, 2025 were organizational activities, those necessary to prepare for the Initial Public Offering, as 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.

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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 three months ended June 30, 2025, we had net income of $1,556,238, which consists of dividends and interest earned on marketable securities and cash held in the Trust Account of $1,786,926, interest due from Everli of $2,540 and interest on cash held in the operating account of $169, partially offset by general and administrative costs of $233,288 and interest due to the Sponsor of $109.

For the six months ended June 30, 2025, we had net income of $3,136,231, which consists of dividends and interest earned on marketable securities and cash held in the Trust Account of $3,523,660, interest due from Everli of $2,540 and interest on cash held in the operating account of $376, partially offset by general and administrative costs of $390,236 and interest due to the Sponsor of $109.

For the three months ended June 30, 2024, we had a net income of $106,303, which consists of interest income on cash and marketable securities held in the Trust Account of $167,532 and an unrealized gain on over-allotment liability of $27,365, offset by operating costs of $88,594.

For the period from March 11, 2024 (inception) through June 30, 2024, we had net income of $87,168, which consists of interest income on cash and marketable securities held in the Trust Account of $167,532 and an unrealized gain on over-allotment liability of $27,365, offset by operating costs of $107,729.

For the three months ended September 30, 2025, we had net income of $1,109,702, which consists of dividends and interest earned on marketable securities and cash held in the Trust Account of $1,813,045, interest due from Everli of $392,370 and interest on cash held in the operating account of $109, partially offset by general and administrative costs of $712,021 and interest expense on Sponsor Loan of $383,801.

For the nine months ended September 30, 2025, we had net income of $4,245,933, which consists of dividends and interest earned on marketable securities and cash held in the Trust Account of $5,336,705, interest due from Everli of $394,910 and interest on cash held in the operating account of $485, partially offset by general and administrative costs of $1,102,257 and interest expense on Sponsor Loan of $383,910.

For the three months ended September 30, 2024, we had a net income of $2,375,937, which consists of interest income on cash and marketable securities held in the Trust Account of $2,363,818, interest on cash of $743 and an unrealized gain on over-allotment liability of $141,754, offset by operating costs of $130,378.

For the period from March 11, 2024 (inception) through September 30, 2024, we had net income of $2,463,105, which consists of interest income on cash and marketable securities held in the Trust Account of $2,531,350, interest on cash of $743 and an unrealized gain on over-allotment liability of $169,119, offset by operating costs of $238,107.

Factors That May Adversely Affect Our Results of Operations

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We incurred $10,184,856 in Initial Public Offering related costs, consisting of $3,000,000 of cash underwriting fee, $6,600,000 of deferred underwriting fee and $584,856 of other offering costs.

For the six months ended June 30, 2025, cash used in operating activities was $322,449.

Net income of $3,136,231 was affected by dividends and interest earned on marketable securities and cash held in the Trust Account of $3,523,660, interest due from Everli of $2,540 and interest due to the Sponsor of $109.

For the nine months ended September 30, 2025, cash used in operating activities was $537,585.

Net income of $4,245,933 was affected by dividends and interest earned on marketable securities and cash held in the Trust Account of $5,336,705, interest due from Everli of $394,910 and interest due on Sponsor Loan of $383,910.

Changes in operating assets and liabilities provided $564,187 of cash for operating activities.

For the six months ended June 30, 2025, the Company used $228,079 in investing activities via paying invoices on behalf of Everli and had $228,079 of cash provided by financing activities under a loan from the Sponsor.

For the period from March 11, 2024 (inception) through June 30, 2024, cash used in operating activities was $386,362.

For the nine months ended September 30, 2025, the Company used $3,232,490 in investing activities via cash loans and paying invoices on behalf of Everli and had $3,178,079 of cash provided by financing activities under the Sponsor Loan.

For the period from March 11, 2024 (inception) through September 30, 2024, cash used in operating activities was $489,390.

Net income of $2,463,105 was affected by interest earned on marketable securities held in the Trust Account of $2,531,350, formation costs paid by the Sponsor in exchange for issuance of Class B ordinary shares of $6,236, payment of operation costs through promissory note of $10,420, and unrealized gain on over-allotment liability of $169,119.

Changes in operating assets and liabilities used $268,682 of cash for operating activities.

At June 30, 2025, substantially all of the assets held in the Trust Account were held in U.S.

At September 30, 2025, substantially all of the assets held in the Trust Account were held in U.S.

Treasury Bills.

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Treasury securities.

The Company accounts for its marketable securities as trading securities under ASC 320, “Investments—Debt and Equity Securities,” where securities are presented at fair value on the unaudited condensed balance sheets.

Trading securities are presented on the unaudited condensed balance sheets at fair value at the end of each reporting period.

Gains and losses resulting from the change in fair value of investments held in the Trust Account are included in dividends and interest earned on marketable securities and cash held in Trust Account in the accompanying unaudited condensed statements of operations.

Trading securities are presented on the unaudited condensed consolidated balance sheets at fair value at the end of each reporting period.

The estimated fair values of investments held in the Trust Account are determined using available market information.

Fair values of these investments are determined by Level 1 inputs utilizing quoted prices (unadjusted) in active markets for identical assets.

At June 30, 2025, substantially all of the assets held in the Trust Account were held in U.S.

At September 30, 2025, substantially all of the assets held in the Trust Account were held in U.S.

Treasury Bills.

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To mitigate the risk that we might be deemed to be an investment company for purposes of the Investment Company Act, which risk increases the longer that we hold investments in the Trust Account, we may, at any time (based on the management team’s ongoing assessment of all factors related to the potential status under the Investment Company Act), instruct the trustee to liquidate the investments held in the Trust Account and instead to hold the funds in the Trust Account in cash or in an interest-bearing demand deposit account at a bank.

As of June 30, 2025 and December 31, 2024, we had cash of $555,805 and $878,254, respectively.

As of September 30, 2025 and December 31, 2024, we had cash of $286,258 and $878,254, respectively.

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.

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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.

We have until June 20, 2026, to consummate the initial Business Combination (assuming no extensions).

If we do not complete a Business Combination within the Completion Window, the Company will trigger an automatic winding up, dissolution and liquidation pursuant to the terms of the amended and restated memorandum and articles of association.

In connection with our assessment of going concern considerations in accordance with Accounting Standards Update 2014 - 15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” management believes that the funds which we have available following the completion of the Initial Public Offering will enable us to sustain operations for a period of at least one year from the issuance date of these unaudited condensed financial statements.

The Company has until June 20, 2026, to consummate the initial Business Combination (assuming no extensions).

If the Company does not complete a Business Combination within the Completion Window, the Company will trigger an automatic winding up, dissolution and liquidation pursuant to the terms of the amended and restated memorandum and articles of association.

In connection with the Company’s assessment of going concern considerations in accordance with ASC 205-40, “Presentation of Financial Statements-Going Concern,” the Company has incurred and expects to continue to incur significant costs in pursuit of its acquisition plans.

The working capital deficit and the expectation of significant future costs raises substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the unaudited condensed consolidated financial statements are issued.

Additionally, management has determined that the mandatory liquidation and subsequent dissolution, should the Company be unable to complete a Business Combination by the end of the Combination Period, raises substantial doubt about the Company’s ability to continue as a going concern.

No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to liquidate after June 20, 2026.

Management plans to address this uncertainty through the closing of its proposed Business Combination.

There is no assurance that the Company’s plans to consummate a Business Combination will be successful within the Combination Period.

The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Off-Balance Sheet Arrangements

We have no obligations, assets or liabilities, which would be considered off-balance sheet arrangements as of June 30, 2025.

We have no obligations, assets or liabilities, which would be considered off-balance sheet arrangements as of September 30, 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.

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Critical Accounting Estimates and Policies

The preparation of the unaudited condensed 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 unaudited condensed financial statements, and

income and expenses during the periods reported.

The preparation of the unaudited condensed consolidated financial statements and related disclosures included in this Report under Item 1.

Actual results could materially differ from those estimates.

The Company has not identified any critical accounting estimates that have a significant impact to our unaudited condensed financial statements.

The Company has not identified any critical accounting estimates that have a significant impact to our unaudited condensed consolidated financial statements.

Recent Accounting Pronouncements

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The Company is currently evaluating the impact of adopting ASU 2024-03.

Management does not believe that any other recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on our unaudited condensed financial statements.

Quantitative and Qualitative Disclosures About Market Risk

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis