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Item 2. Management’s Discussion and Analysis

2025-08-14 compared with 2025-05-15 · 40 added, 22 removed, 79 unchanged (44% 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 March 31, 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 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.

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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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 special purpose acquisition companies (“SPACs”).

The rules and regulations for SPACs adopted by the SEC on January 24, 2024, which became effective on July 1, 2024 (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 Completion Window consistent with applicable laws, regulations and stock exchange rules by amending our amended and restated memorandum and articles of association.

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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:

(i) July 29, 2025 if the Term Sheet is 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.

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.

Recent Developments

Business Combination with Everli

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.

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 March 31, 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 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.

We do not expect to generate any operating revenues until after the completion of our Business Combination.

We generate non-operating income in the form of dividend and interest income on marketable securities and cash held in the Trust Account, located in the United States, with Continental Stock Transfer & Trust Company acting as trustee.

We generate non-operating income in the form of dividends and interest income on marketable securities and cash held in the Trust Account, located in the United States, with Continental Stock Transfer & Trust Company acting as trustee.

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 March 31, 2025, we had net income of $1,579,993, which consists of dividends and interest earned on marketable securities and cash held in the Trust Account of $1,736,734 and interest on cash held in the operating account of $207, partially offset by general and administrative costs of $156,948.

For the period from March 11, 2024 through March 31, 2024, we had a net loss of $19,135, which consists of general and administrative costs.

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.

Factors That May Adversely Affect Our Results of Operations

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On June 20, 2024, we consummated the Initial Public Offering of 16,000,000 Units, which includes the partial exercise by the underwriters of their over-allotment option in the amount of 1,000,000 Units, at $10.00 per Unit, generating gross proceeds of $160,000,000.

Simultaneously with the closing of the Initial Public Offering and pursuant to the Private Placement Warrants Purchase Agreements, we consummated the sale of 5,000,000 Private Placement Warrants at a price of $1.00 per Private Placement Warrant, in a private placement to the Sponsor and the representatives of the underwriters of the Initial Public Offering generating gross proceeds of $5,000,000.

Simultaneously with the closing of the Initial Public Offering and pursuant to the Private Placement Warrants Purchase Agreements, we consummated the sale of 5,000,000 Private Placement Warrants at a price of $1.00 per Private Placement Warrant, in the Private Placement to the Sponsor and the representatives of the underwriters of the Initial Public Offering generating gross proceeds of $5,000,000.

Following the Initial Public Offering, the partial exercise of the over-allotment option, and the sale of the Units and the sale of the Private Placement Warrants, a total of $160,000,000 was placed in the Trust Account.

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 three months ended March 31, 2025, cash used in operating activities was $185,142.

Net income of $1,579,993 was affected by dividend and interest earned on marketable securities and cash held in the Trust Account of $1,736,734.

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.

Changes in operating assets and liabilities provided $67,411 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.

Net income of $87,168 was affected by interest earned on marketable securities held in the Trust Account of $167,532, 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 $27,365.

Changes in operating assets and liabilities used $295,289 of cash for operating activities.

For the period from March 11, 2024 through March 31, 2024, cash used in operating activities was $0.

Net loss of $19,135 was affected by formation costs paid by Sponsor in exchange for issuance of Class B ordinary shares.

Changes in operating liabilities provided $13,070 of cash for operating activities.

At March 31, 2025, substantially all of the assets held in the Trust Account were held in U.S.

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

Treasury Bills.

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

At March 31, 2025, substantially all of the assets held in the Trust Account were held in U.S.

At June 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 March 31, 2025 and December 31, 2024, we had cash of $693,112 and $878,254, respectively.

As of June 30, 2025 and December 31, 2024, we had cash of $555,805 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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Off-Balance Sheet Arrangements

We have no obligations, assets or liabilities, which would be considered off-balance sheet arrangements as of March 31, 2025.

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

income and expenses during the periods reported.

Actual results could materially differ from those estimates.

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Recent Accounting Pronouncements

In November 2024, the FASB issued 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 yet effective, accounting pronouncements, if currently adopted, would have a material effect on our unaudited condensed financial statements.

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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