Item 7. Management’s Discussion and Analysis
Item
7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Cautionary Note Regarding Forward-Looking Statements
All statements other than statements of historical fact included in
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. Such forward-looking statements are based on the beliefs of our Management, as
well as assumptions made by, and information currently available to, our Management. Actual results could differ materially from those
contemplated by the forward-looking statements as a result of certain factors detailed in our filings with the SEC. 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 financial statements and the notes thereto contained elsewhere in this Report.
Overview
We
are a blank check company incorporated in the Cayman Islands on May 21, 2024 formed for the purpose of a Business Combination with one
or more businesses. We intend to effectuate our Business Combination using cash from the proceeds of our Initial Public Offering and
the Private Placement, the proceeds of the sale of our Ordinary Shares in connection with our initial Business Combination, shares issued
to the owners of the target, debt issued to bank or other lenders or the owners of the target, other securities issuances, or a combination
of the foregoing.
We
expect to continue to incur significant costs in the pursuit of our acquisition plans. We cannot assure our shareholders that our plans
to complete a Business Combination will be successful.
We may seek to extend the Combination Period consistent with applicable
laws, regulations and stock exchange rules by amending our Amended and Restated Charter. 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.
Results
of Operations
We
have neither engaged in any operations nor generated any revenues to date. Our only activities from May 21, 2024 (inception) through
December 31, 2024 were organizational activities, those necessary to prepare for the Initial Public Offering, described below, and subsequent
to the closing of the Initial Public Offering, 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 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, among other things), as well as for due diligence expenses.
For
the period from May 21, 2024 (inception) through December 31, 2024, we had net income of $3,046,826, which consisted of interest earned
on marketable securities held in Trust Account of $3,350,051, partially offset by general and administrative cost of $303,225.
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 Class B Ordinary Shares, par value $0.0001 per share, by the Sponsor and loans from the Sponsor
pursuant to the IPO Promissory Note.
On May 21, 2024, the Sponsor loaned us an aggregate of up to $300,000
to cover expenses related to the Initial Public Offering pursuant to the IPO Promissory Note. On July 16, 2024, we amended the IPO Promissory
Note to increase the principal amount to $400,000. This loan was non-interest bearing and payable on the earlier of December 31, 2024
or the date on which we consummated the Initial Public Offering. We repaid a total of $312,130 outstanding balance under the IPO Promissory
Note at the closing of the Initial Public Offering on September 9, 2024. Borrowings under the IPO Promissory Note are no longer available.
On September 9, 2024, we consummated
the Initial Public Offering of 23,000,000 Public Units, at $10.00 per Public Unit, generating gross proceeds of $230,000,000. Simultaneously
with the closing of the Initial Public Offering and pursuant to the Private Placement Units Purchase Agreement, we consummated the sale
of an aggregate of 760,000 Private Placement Units at a price of $10.00 per Private Placement Unit to the Sponsor and BTIG, generating
gross proceeds of $7,600,000
Following
the Initial Public Offering, a total of $231,150,000 was placed in the Trust Account. We incurred $15,014,904 in Initial Public Offering
related costs, including $4,600,000 of cash underwriting fees, $9,775,000 of deferred underwriting fees, and $639,904 of other offering
costs.
As of December 31, 2024, we
had marketable securities held in the Trust Account of $234,500,051 (including approximately $3,350,051 of interest income). We may withdraw
interest from the Trust Account to pay taxes, if any. 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. 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 our Management’s ongoing assessment of all factors related to our 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 December 31, 2024, we had cash of $798,454. We 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 or our advisor
may, but are not obligated to, loan us Working Capital Loans as may be required. If we complete a Business Combination, we would repay
such Working Capital Loans, if any. 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 Working Capital Loans, 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 units of the post Business Combination entity at a price of $10.00
per unit at the option of the lender. These units would be identical to the Private Placement Units. Except for the foregoing, the terms
of such Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such Working Capital Loans.
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.
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Contractual
Obligations
We do not have any long-term
debt, capital lease obligations, operating lease obligations or long-term liabilities, other than as set forth below.
Administrative Services
and Chief Executive Officer Agreements
Commencing
on December 13, 2025, and until completion of our initial Business Combination or liquidation, we pay an affiliate of our Sponsor $2,500
per month for c ertain office space, utilities and secretarial and administrative support pursuant to the Administrative
Services Agreement. As of December 31, 2024, we had incurred $9,167 under the Administrative Services Agreement.
Additionally,
we agreed to pay our Chief Executive Officer $12,500 per month for his services commencing on September 5, 2024, through the earlier of
consummation or the initial Business Combination or the liquidation. As of December 31, 2024, we had incurred $45,833 in such fees.
Underwriting Agreement
The underwriters of the Initial
Public Offering had a 45-day option from the date of the Initial Public Offering to purchase up to an additional 3,000,000 Option Units
to cover over-allotments, if any. On September 9, 2024, simultaneously with the closing of the Initial Public Offering, the underwriters
elected to fully exercise the Over-Allotment Option and purchased the additional 3,000,000 Option Units at a price of $10.00 per Option
Unit pursuant to the Underwriting Agreement.
The underwriters of the Initial
Public Offering were entitled to a cash underwriting discount of 2.00% of the gross proceeds of the Initial Public Offering, or $4,600,000
in the aggregate, paid on September 9, 2024, at the closing of the Initial Public Offering. Additionally, the underwriters are entitled
to a deferred underwriting discount of 4.25% of the gross proceeds of the Initial Public Offering, or $9,775,000 in the aggregate, with
such Deferred Fee payable upon the completion of the initial Business Combination.
Critical Accounting Estimates and Policies
The preparation of the audited financial statements and related disclosures
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.
Actual results could materially differ from those estimates. We have not identified any critical accounting estimates.
Ordinary
Shares Subject to Possible Redemption
We account for our ordinary shares subject to possible conversion in
accordance with the guidance in FASB ASC Topic 480, “Distinguishing Liabilities from Equity.” Ordinary Shares subject to mandatory
redemption are classified as a liability instrument and measured at fair value. Conditionally redeemable Ordinary Shares (including Ordinary
Shares that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of
uncertain events not solely within our control) are classified as temporary equity. At all other times, ordinary shares are classified
as shareholders’ equity (deficit). Our Ordinary Shares feature certain redemption rights that are considered to be outside of our
control and subject to occurrence of uncertain future events. Accordingly, as of December 31, 2024, Ordinary Shares subject to possible
redemption are presented at redemption value as temporary equity, outside of the shareholders’ deficit section of our balance sheet
contained elsewhere in this Report.
We recognize changes in redemption value immediately as they occur
and adjusts the carrying value of redeemable Ordinary Shares to equal the redemption value at the end of each reporting period. Increases
or decreases in the carrying amount of the redeemable Ordinary Shares are affected by charges against additional paid-in capital (to the
extent available) and accumulated deficit.
Net
Income per Ordinary Share
We comply with accounting and disclosure requirements of FASB ASC 260,
“Earnings Per Share”. We have two classes of Ordinary Shares, our Class A Ordinary Shares and Class B Ordinary Shares. Income
and losses are shared pro rata between the two classes of Ordinary Shares. Net income per Ordinary Share is calculated by dividing the
net income by the weighted average Ordinary Shares outstanding for the respective period. Diluted net income per share attributable to
holders of Ordinary Shares adjust the basic net income per share attributable to holders of Ordinary Shares and the weighted-average of
Ordinary Shares outstanding for the potentially dilutive impact of outstanding Warrants. However, because the Warrants are anti-dilutive,
diluted income per Ordinary Share is the same as basic income per Ordinary Share for the periods presented.
Recent
Accounting Standards
Management does not believe that any recently issued, but not yet effective,
accounting standards, if currently adopted, would have a material effect on the financial statements contained elsewhere in this Report.
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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
Reference is made to pages F-1 through F-17 comprising a portion of
this Report, which are incorporated herein by reference.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.