Tavia Acquisition Corp. 10-Q

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations References in this report (the “Quarterly Report”) to “we,” “us,” “our” or the “Company” refer to Tavia Acquisition Corp. References to our “management” or our “management team” refer to our officers and directors, references to the “Sponsor” refer to Tavia Sponsor Pte. Ltd., and references to “EBC” refer to EarlyBirdCapital, Inc. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the unaudited condensed financial statements and the notes thereto contained elsewhere in this Quarterly Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties. Special Note Regarding Forward-Looking Statements This Quarterly Report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Exchange Act that are not historical facts and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements, other than statements of historical fact included in this Quarterly Report including, without limitation, statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding our ability to complete an initial business combination (a “Business Combination”), the Company’s financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. Words such as “expect,” “believe,” “anticipate,” “intend,” “estimate,” “seek” and variations and similar words and expressions are intended to identify such forward-looking statements. Such forward-looking statements relate to future events or future performance, but reflect management’s current beliefs, based on information currently available. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the Risk Factors section of the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 filed with the U.S. Securities and Exchange Commission (the “SEC”). The Company’s securities filings can be accessed on the EDGAR section of the SEC’s website at www.sec.gov. Except as expressly required by applicable securities law, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise. Overview We are a blank check company incorporated in the Cayman Islands on March 7, 2024 formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization, or similar business combination with one or more businesses. We intend to effectuate our Business Combination using cash derived from the proceeds of the Initial Public Offering 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. Recent Developments Subsequent to the period covered by this Quarterly Report, on April 28, 2026, we filed a preliminary proxy statement in connection with a possible extension of the period of time in which we must consummate an initial Business Combination from June 5, 2026 to March 5, 2027, or such earlier date as determined by our board of directors, for a total extension of up to nine months. There can be no assurance as to whether or when such an extension may be approved by our shareholders. Results of Operations We have neither engaged in any operations nor generated any operating revenues to date. Our only activities from March 7, 2024 (inception) through March 31, 2026 were organizational activities and those necessary to prepare for the Initial Public Offering, described below, and, subsequent to 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 after the Initial Public Offering. We have incurred and expect to continue 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 March 31, 2026, we had net income of $821,709, which consisted of interest earned on marketable securities held in Trust Account of $1,061,785, offset by general and administrative costs of $240,076. For the three months ended March 31, 2025, we had net income of $974,311, which consisted of interest earned on marketable securities held in Trust Account of $ 1,215,702, offset by general and administrative costs of $241,391. 17 Liquidity and Capital Resources On December 5, 2024, we consummated the Initial Public Offering of 10,000,000 Units at $10.00 per Unit, generating gross proceeds of $100,000,000. Simultaneously with the closing of the Initial Public Offering, we consummated the sale of 350,000 Private Placement Units at a price of $10.00 per Private Placement Unit in a private placement to the Sponsor and EBC, generating gross proceeds of $3,500,000. Following the closing of the Initial Public Offering on December 5, 2024, an amount of $100,500,000 ($10.05 per Unit) from the net proceeds of the sale of the Units, and a portion of the net proceeds from the sale of the Private Placement Units, was placed in the Trust Account. We incurred $3,605,995 in Initial Public Offering related cost, consisting of $2,300,000 of cash underwriting fee and $1,305,995 of other offering costs. On December 9, 2024, the underwriters notified us of their exercise of the over-allotment option in full and purchased 1,500,000 additional units at $10.00 per unit upon the closing of the over-allotment option, generating gross proceeds of $15,000,000. Simultaneously with the closing of the over-allotment option on December 11, 2024, we consummated the private placement of an aggregate of 37,500 Private Placement Units to the Sponsor and EBC at a price of $10.00 per unit, generating gross proceeds of $375,000. After giving effect to the exercise of the over-allotment option, an aggregate of 11,500,000 Units have been issued in the Initial Public Offering and the over-allotment at an aggregate offering price of $115,000,000, and an aggregate amount of $115,575,000 ($10.05 per unit) from the net proceeds of the sale of the Public Units, and a portion of the net proceeds from the sale of the Private Placement Units, was placed in the Trust Account. For the three months ended March 31, 2026, cash used in operating activities was $110,593. Net income of $821,709 was a result of interest earned on marketable securities held in the Trust Account of $1,061,785. Changes in operating assets and liabilities provided $129,483 of cash for operating activities. For the three months ended March 31, 2025, cash used in operating activities was $248,029. Net income of $974,311 was a result of interest earned on marketable securities held in the Trust Account of $1,215,702. Changes in operating assets and liabilities used $6,638 of cash for operating activities. As of March 31, 2026, we had marketable securities held in the Trust Account of $121,816,078 (including approximately $6,241,078 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, which interest shall be net of taxes payable and excluding deferred underwriting commissions, to complete our Business Combination. We may withdraw interest from the Trust Account to pay taxes, if any. To the extent that our share capital or debt is used, in whole or in part, as consideration to complete a 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. As of March 31, 2026, we had cash of $344,032 and working capital deficit of $1,293,441. 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, structure, negotiate and complete a Business Combination. In order to fund working capital deficiencies or finance transaction costs in connection with a Business Combination, our Sponsor or an affiliate of our Sponsor or certain of our officers and directors may, but are not obligated to, loan us funds as may be required. If we complete a Business Combination, we may repay such loaned amounts out of the proceeds of the Trust Account released to us. 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. We believe we will need to raise additional funds in order to meet the expenditures required for operating our business for at least the next 12 months. 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 completion of our Business Combination, in which case we may issue additional securities or incur debt in connection with such Business Combination. 18 Off-Balance Sheet Financing Arrangements We have no obligations, assets or liabilities, which would be considered off-balance sheet arrangements as of March 31, 2026. 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 Sponsor an aggregate of $10,000 per month for certain utilities and administrative support services. We began incurring these fees on December 3, 2024 and will continue to incur these fees monthly until the earlier of the completion of the Business Combination and our liquidation. Underwriting Agreement The underwriters were entitled to a cash underwriting discount of $0.20 per Unit, or $2,300,000 in the aggregate, which was paid at the closing of the Initial Public Offering and the over-allotment option, as applicable. Business Combination Marketing Agreement We have engaged EBC as an advisor in connection with our Business Combination to assist us in holding meetings with our shareholders to discuss the potential Business Combination and the target business’ attributes, introduce us to potential investors that are interested in purchasing our securities in connection with our Business Combination and assist with press releases and public filings in connection with our Business Combination. We will pay EBC a cash fee for such services upon the consummation of our Business Combination in an amount equal to 3.5% of the gross proceeds of the Initial Public Offering. In addition, we will pay EBC a cash fee upon the consummation of our Business Combination in an amount equal to 1.0% of the total consideration payable in our Business Combination if EBC introduces us to the target business with whom we complete a Business Combination. Promissory Notes On March 7, 2024, we issued the Promissory Note to the Sponsor, pursuant to which, as amended on July 24, 2024, we could borrow up to an aggregate principal amount of $500,000. The Promissory Note was non-interest bearing and payable on the earlier of (i) December 31, 2024, or (ii) the consummation of the Initial Public Offering. On November 10, 2025, we amended and restated the Promissory Note in the principal amount of up to $500,000, to extend the maturity of the Promissory Note to the earlier of: (i) the date we complete a Business Combination and (ii) the date our wind up is effective. The Sponsor will not have any claim against the Trust Account with respect to the Second Amended and Restated Note. As of March 31, 2026, there was $500,000 outstanding under the Second Amended and Restated Note. On February 2, 2026, we issued the EBC Note to EBC. Pursuant to the EBC Note, EBC agreed to loan us up to an aggregate principal amount of $300,000. The EBC Note is non-interest bearing and all outstanding amounts under the EBC Note will be due on the earlier of the consummation of a Business Combination, or the liquidation of the Trust Account, if a Business Combination is not consummated. If we do not consummate a Business Combination, we may use a portion of any funds held outside the Trust Account into which we have placed the proceeds of the Initial Public Offering to repay the EBC Note; however, no proceeds from the Trust Account may be used for such repayment. If such funds are insufficient to repay the EBC Note, the EBC Note will not be repaid. As of March 31, 2026, there was $300,000 outstanding under the EBC Note. 19 Critical Accounting Policies and Estimates The preparation of unaudited condensed 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 unaudited condensed financial statements, and income and expenses during the periods reported. Actual results could materially differ from those estimates. We have identified the following critical accounting policies and estimates: Ordinary Shares Subject to Redemption We account for our ordinary shares subject to possible conversion in accordance with the guidance in 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. 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, ordinary shares subject to possible redemption are presented at redemption value as temporary equity, outside of the shareholders’ deficit section of our condensed balance sheets. Net Income Per Ordinary Share Net income per ordinary share is computed by dividing net income by the weighted average number of ordinary shares outstanding during the period. Accretion associated with the redeemable Ordinary shares is excluded from earnings per share as the redemption value approximates fair value. Recent Accounting Standards Management does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on our unaudited condensed financial statements. Item 3. Quantitative and Qualitative Disclosures About Market Risk Not required for smaller reporting companies.