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Item 2. Management’s Discussion and Analysis

2025-07-10 compared with 2025-04-30 · 63 added, 78 removed, 73 unchanged (66% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations

References to the “Company,” “our,” “us” or “we” refer to Quartzsea Acquisition Corporation.

References to the “Company,” “Quartzsea,” “our,” “us” or “we” refer to Quartzsea Acquisition Corporation.

The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the unaudited financial statements and the notes related thereto.

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Recent Developments

On April 22, 2025, the

Company entered into a finder’s agreement (the “Finders Fee Agreement”), by and between the Company and Hugh Grow Investment

(the “Finder”).

Pursuant to the Finders Fee Agreement, the Company agreed to pay the Finder a one-time, non-refundable

retainer fee in the amount of $350,000, payable upon the execution of Finders Fee Agreement (the “Retainer Fee”).

also agreed to pay the Finder a success fee in the amount of $3,500,000, payable upon the closing (or closings) of a transaction (as

defined in the Finders Fee Agreement).

In addition, the Company agreed to reimburse the Finder on a monthly basis for all reasonable,

actual, and verifiable out-of-pocket expenses incurred in connection with the Finder’s engagement under the agreement, provided

that such expenses shall not exceed $150,000 without the Company’s prior written approval.

On April 29, 2025, the Company entered

into an amendment to the Finder’s Fee Agreement, pursuant to which the Retainer Fee was adjusted to $150,000.

The Company acknowledges

and agrees that the Finder is not a registered broker-dealer under U.S.

securities laws, and is not acting as a broker-dealer in connection

with the transaction.

Merger Agreement

On June 6, 2025, Quartzsea, Cuisine Universal Packaging Solution, a Cayman Islands exempted company and wholly-owned subsidiary of the Quartzsea (the “Purchaser”), and CUPS Sub Limited, a Cayman Islands exempted company and wholly-owned subsidiary of the Purchaser (the “Merger Sub”), entered into a Merger Agreement (the “Merger Agreement”) with the Broadway Technology Inc, a Cayman Islands exempted company (the “Broadway Tech”), a leading manufacturer of high-quality PET (polyethylene terephthalate) cups and lids through its operating subsidiary Zhejiang Gaokai New Materials Co., Ltd., Pivot Technology Holding Inc, a BVI business company organized under the Laws of the British Virgin Islands, and Zenith Technology International Inc, a BVI business company also organized under the Laws of the British Virgin Islands (each, a “Principal Shareholder” and collectively, the “Principal Shareholders”), Fan Zhang, an individual, solely in his capacity as the shareholder representative, agent and attorney-in-fact of the Principal Shareholders (the “Principal Shareholders’ Representative”).

Capitalized terms used herein but not defined herein shall have the meanings ascribed to them in the Merger Agreement.

Upon the closing of the transactions contemplated by the Merger Agreement, Quartzsea will merge with and into Purchaser, resulting in all Quartzsea shareholders becoming shareholders of the Purchaser.

Concurrently therewith, Merger Sub will merge with and into Broadway Tech, with Boardway Tech surviving the merger and resulting in Purchaser acquiring 100% of the issued and outstanding equity securities of Broadway Tech (the “Acquisition Merger”).

Upon the closing of the Acquisition Merger, the ordinary shares of Purchaser issued shall be reclassified into class A ordinary shares (“Purchaser Class A Ordinary Shares”) and class B ordinary shares (“Purchaser Class B Ordinary Shares , ” together with Purchaser Class A Ordinary Shares, “Purchaser Ordinary Shares”) where each Purchaser Class A Ordinary Share shall be entitled to one (1) vote on all matters subject to a vote at general and special meetings of the post-closing company and each Purchaser Class B Ordinary Share shall be entitled to 10 votes on all matters subject to a vote at general and special meetings of the post-closing company.

The aggregate consideration to be paid to Broadway Tech shareholders for the Acquisition Merger is $520,000,000, payable in newly issued Purchaser Ordinary Shares equal to $520,000,000 divided by $10.00 per share.

The board of directors of Quartzsea has unanimously (i) approved and declared advisable the Merger Agreement, the Business Combination and the other transactions contemplated thereby and (ii) resolved to recommend approval of the Merger Agreement and related matters by the shareholders of Quartzsea.

Shareholder Support Agreement

Concurrently with the execution of the Merger Agreement, certain shareholders of Broadway Tech entered into a support agreement with the Parent, pursuant to which each such shareholder of Broadway Tech agreed to vote in favor of the business combination, subject to the terms of such shareholder support agreement.

Lock-up Agreement

In connection with the transactions, Purchaser shall enter into a lock-up agreement with certain Broadway Tech shareholders with respect to certain lock-up arrangements, which will provide that such Broadway Tech shareholders will not, within 180 days from the closing of the business combination (subject to earlier release if the closing price of Purchaser Class A Ordinary Shares equals or exceeds $12.50 per share (as adjusted for share splits, share dividends, reorganizations and recapitalizations) for any 20 trading days within any 30-trading day period after the closing) and subject to certain exceptions, offer, sell, contract to sell, pledge or otherwise dispose of, directly or indirectly, any of the ordinary shares issued in connection with the Acquisition Merger, enter into a transaction that would have the same effect, or enter into any swap, hedge or other arrangement that transfers, in whole or in part, any of the economic consequences of ownership of such shares, whether any of these transactions are to be settled by delivery of any such shares, in cash, or otherwise.

The lock-up applies to shareholders who hold more than twenty percent (20%) of Broadway Tech prior to the Acquisition Merger.

All shares will also be subject to all applicable holding periods and requirements under the Securities Act of 1933 and SEC rules.

Results of Operations

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

Our only activities from November 5, 2024 (inception) through February 28, 2025, were organizational activities and those necessary to consummate the IPO, and subsequent to the IPO, identifying a target company for an initial business combination.

Our only activities from November 5, 2024 (inception) through May 31, 2025, were organizational activities and those necessary to consummate the IPO, and subsequent to the IPO, identifying a target company for an initial business combination.

We do not expect to generate any operating revenues until after the completion of our initial business combination.

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We expect to incur increased expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses in connection with searching for, and completing, a Business Combination.

For the three months ended February 28,

2025, we had a net loss of $31,255, which consisted of formation and operating costs of $33,504, offset by interest income of $2,249.

For the three months ended May 31,

2025, we had net loss of $27,147, which consisted of general and administrative expenses of $727,747, offset by interest income of

For the six months ended May 31, 2025,

we had net loss of $58,402, which consisted of general and administrative expenses of $761,251, offset by interest income of

Liquidity and Capital Resources

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Such funds could also be used to repay any operating expenses or finders’ fees which we had incurred prior to the completion of our initial business combination if the funds available to us outside of the Trust Account were insufficient to cover such expenses.

As of February 28, 2025, we had cash of $208,063 and a working capital deficit of $301,307.

The Company’s liquidity needs prior to the consummation of the IPO had been satisfied through a payment from the Sponsor of $25,000 for the Founder Shares and the loan under an unsecured promissory note from the Sponsor of $500,000.

The Company has incurred and expects to continue

to incur significant costs in pursuit of the consummation of an initial Business Combination.

In addition, the Company currently has

until June 19, 2026 (unless the Company extends such period by amending its Amended and Restated Memorandum and Articles of Association)

to consummate the initial Business Combination.

If the Company does not complete a Business Combination within the prescribed timeline,

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 Financial

Accounting Standard Board’s Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about

an Entity’s Ability to Continue as a Going Concern,” the Company has determined that it has incurred and expects to continue

to incur significant costs in pursuit of its acquisition plans.

There is no assurance that the Company’s plans to raise capital

or to consummate a Business Combination will be successful within the Combination Period.

The Company lacks the financial resources it

needs to sustain operations for a reasonable period of time, which is considered to be one year from the date of the issuance of the

financial statements.

Therefore, management has determined that these conditions raise substantial doubt about the Company’s ability

to continue as a going concern until the earlier of the consummation of the Business Combination or the date the Company is required

to liquidate.

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

As of May 31, 2025, we had cash of $49,122 and a working capital of $474,816.

The Company has incurred and expects to continue to incur significant costs in pursuit of the consummation of an initial Business Combination.

In addition, the Company currently has until June 19, 2026 (unless the Company extends such period by amending its Amended and Restated Memorandum and Articles of Association) to consummate the initial Business Combination.

If the Company does not complete a Business Combination within the prescribed timeline, 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 Financial Accounting Standard Board’s Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” the Company has determined that it has incurred and expects to continue to incur significant costs in pursuit of its acquisition plans.

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

The Company lacks the financial resources it needs to sustain operations for a reasonable period of time, which is considered to be one year from the date of the issuance of the financial statements.

Therefore, management has determined that these conditions raise substantial doubt about the Company’s ability to continue as a going concern until the earlier of the consummation of the Business Combination or the date the Company is required to liquidate.

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 February 28, 2025.

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

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The Promissory Note is unsecured, interest-free and due on the date on which the Company closes the IPO.

As of February 28, 2025, $500,000 was outstanding under the Promissory Note.

We repaid the outstanding balance of $500,000 to the Sponsor on March 19, 2025 upon the closing of the IPO.

As of May 31, 2025, no amount was outstanding under the Promissory Note.

Administrative Services Agreement

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The underwriter fully excised its over-allotment option on March 19, 2025.

The underwriter is entitled to a cash underwriting

discount of 0.75% on the first $69,000,000 of the gross proceeds from the IPO, plus 0.50% on the remaining $13,800,000, totalling $586,500

including the full excise of over-allotment option by the underwriter.

In addition, the underwriter is entitled to a deferred fee of

4.0% of the gross proceeds of the IPO, or $3,312,000, which will be paid upon the closing of a Business Combination solely from amounts

remaining in the Trust Account following all properly submitted shareholder redemption in connection with the consummation of the initial

Business Combination and such deferred fee shall be capped at such amount so remaining in the Trust Account.

The underwriter is entitled to a cash underwriting discount of 0.75% on the first $69,000,000 of the gross proceeds from the IPO, plus 0.50% on the remaining $13,800,000, totaling $586,500 including the full excise of over-allotment option by the underwriter.

In addition, the underwriter is entitled to a deferred fee of 4.0% of the gross proceeds of the IPO, or $3,312,000, which will be paid upon the closing of a Business Combination solely from amounts remaining in the Trust Account following all properly submitted shareholder redemption in connection with the consummation of the initial Business Combination and such deferred fee shall be capped at such amount so remaining in the Trust Account.

Right of First Refusal

We granted SAP a right of first refusal for a period

commencing from the consummation of the IPO until the earlier of (i) 10 months after the consummation of the initial business combination

(or the liquidation of the Trust Account in the event that the Company fails to consummate its initial business combination within the

prescribed time period) or (ii) 36 months after the consummation of the IPO in accordance with FINRA Rule 5110(g)(6)(A) to act as

lead financial advisor, capital markets advisor, underwriter and/or private placement agent in connection with any initial business combination

or in connection with any financing that occurs between the closing of the IPO and the date that is the earlier of (i) 10 months after

the closing of the initial business combination or (ii) 36 months after the consummation of the IPO.

Finders Fee Agreement

On April 22, 2025, the

Company entered into a Finders Fee Agreement with Hugh Grow Investment Ltd.

We granted SAP a right of first refusal for a period commencing from the consummation of the IPO until the earlier of (i) 10 months after the consummation of the initial business combination (or the liquidation of the Trust Account in the event that the Company fails to consummate its initial business combination within the prescribed time period) or (ii) 36 months after the consummation of the IPO in accordance with FINRA Rule 5110(g)(6)(A) to act as lead financial advisor, capital markets advisor, underwriter and/or private placement agent in connection with any initial business combination or in connection with any financing that occurs between the closing of the IPO and the date that is the earlier of (i) 10 months after the closing of the initial business combination or (ii) 36 months after the consummation of the IPO.

Finder’s Fee Agreement

On April 22, 2025, the Company entered into a Finder’s Fee Agreement with Hugh Grow Investment Ltd.

(the “Finder”).

Pursuant to the Finders Fee Agreement,

the Company agreed to pay the Finder a one-time, non-refundable retainer fee in the amount of $350,000, payable upon the execution of

Finders Fee Agreement (the “Retainer Fee”).

The Company also agreed to pay the Finder a success fee in the amount of $3,500,000,

payable upon the closing (or closings) of a transaction (as defined in the Finders Fee Agreement).

In addition, the Company agreed to

reimburse the Finder on a monthly basis for all reasonable, actual, and verifiable out-of-pocket expenses incurred in connection with

the Finder’s engagement under the agreement, provided that such expenses shall not exceed $150,000 without the Company’s

prior written approval.

On April 29, 2025, the Company entered into an amendment to the Finder’s Fee Agreement, pursuant to which

the Retainer Fee was adjusted to $150,000.

The Company acknowledges

and agrees that the Finder is not a registered broker-dealer under U.S.

securities laws, and is not acting as a broker-dealer in connection

with the transaction.

Pursuant to the Finder’s Fee Agreement, the Company agreed to pay the Finder a one-time, non-refundable retainer fee in the amount of $350,000, payable upon the execution of Finder’s Fee Agreement (the “Retainer Fee”).

The Company also agreed to pay the Finder a success fee in the amount of $3,500,000, payable upon the closing (or closings) of a transaction (as defined in the Finder’s Fee Agreement).

In addition, the Company agreed to reimburse the Finder on a monthly basis for all reasonable, actual, and verifiable out-of-pocket expenses incurred in connection with the Finder’s engagement under the agreement, provided that such expenses shall not exceed $150,000 without the Company’s prior written approval.

On April 29, 2025, the Company entered into an amendment to the Finder’s Fee Agreement, pursuant to which the Retainer Fee was adjusted to $150,000.

As of May 31, 2025, the Retainer Fee was not paid, and the Company accrued $150,000 in the accompanying balance sheet.

The Company acknowledges and agrees that the Finder is not a registered broker-dealer under U.S.

securities laws, and is not acting as a broker-dealer in connection with the transaction.

Merger Agreement

On June 6, 2025, Quartzsea, Cuisine Universal Packaging Solution, a Cayman Islands exempted company and wholly-owned subsidiary of the Quartzsea, and CUPS Sub Limited, a Cayman Islands exempted company and wholly-owned subsidiary of the Purchaser, entered into a Merger Agreement with the Broadway Technology Inc, a Cayman Islands exempted company, a leading manufacturer of high-quality PET (polyethylene terephthalate) cups and lids through its operating subsidiary Zhejiang Gaokai New Materials Co., Ltd., Pivot Technology Holding Inc, a BVI business company organized under the Laws of the British Virgin Islands, and Zenith Technology International Inc, a BVI business company also organized under the Laws of the British Virgin Islands, Fan Zhang, an individual, solely in his capacity as the shareholder representative, agent and attorney-in-fact of the Principal Shareholders.

Capitalized terms used herein but not defined herein shall have the meanings ascribed to them in the Merger Agreement.

Upon the closing of the Acquisition Merger, the ordinary shares of Purchaser issued shall be reclassified into class A ordinary shares and class B ordinary shares where each Purchaser Class A Ordinary Share shall be entitled to one (1) vote on all matters subject to a vote at general and special meetings of the post-closing company and each Purchaser Class B Ordinary Share shall be entitled to 10 votes on all matters subject to a vote at general and special meetings of the post-closing company.

Critical Accounting Policies and Estimates

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Recent Accounting Standards

In November 2023, the FASB issued ASU No.

2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures, which requires the disclosure of additional segment information.

2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

The Company adopted this guidance as of February 28, 2025, and it did not have a material impact on its financial statements and disclosures.

In December 2023, the FASB issued Accounting Standards Update 2023-09, “Income Taxes (Topic 740):

Improvements to Income Tax Disclosure” (“ASU 2023-09”).

ASU 2023-09 mostly requires, on an annual basis, disclosure of specific categories in an entity’s effective tax rate reconciliation and income taxes paid disaggregated by jurisdiction.

The incremental disclosures may be presented on a prospective or retrospective basis.

The ASU is effective for fiscal years beginning after December 15, 2024 with early adoption permitted.

The Company is currently evaluating the impact of adopting ASU 2023-09 on its financial statements.

As a Cayman Island entity, the Company is not subject to income taxes, as such, the Company does not expect any impact of adopting ASU 2023-09 on its financial statements.

Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s financial statements.

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Quarterly Results

As of February 28, 2025, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K and did not have any commitments or contractual obligations.

As of May 31, 2025, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K and did not have any commitments or contractual obligations.

On April 5, 2012, the JOBS Act was signed into law.

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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