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, possible Business Combinations and the financing thereof, and related matters, and the plans and objectives
of Management for future operations, are forward-looking statements within the meaning of Section 27A of the Securities Act and Section
21E of the Exchange Act. When used in this Report, words such as “may,” “should,” “could,” “would,”
“anticipate,” “believe,” “estimate,” “expect,” “intend” and similar expressions,
as they relate to us or our Management, identify forward-looking statements. We have based these forward-looking statements on our Management’s
current expectations and projections about future events, 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 included elsewhere in this Report.
28
Overview
We
are a blank check company incorporated in the Cayman Islands on November 4, 2025 for the purpose of effecting a Business Combination.
Our Sponsor is Spartacus Sponsor II LLC.
Although
we are not limited in our search for target businesses to a particular industry or sector for the purpose of consummating the Business
Combination, we are focusing our search on the TMT sector. We are an early stage and emerging growth company and, as such, we are subject
to all of the risks associated with early stage and emerging growth companies. We expect to incur significant costs in the pursuit of
our acquisition plans. There can be no assurance that our plans to complete a Business Combination will be successful.
Our
IPO Registration Statement became effective on January 30, 2026. On February 12, 2026, we consummated our Initial Public Offering of
23,000,000 Public Units, including 3,000,000 Option Units issued pursuant to the full exercise of the Over-Allotment Option. Each Public
Unit consists of one Public Share and one-third of one Public Warrant. The Public Units were sold at a price of $10.00 per Public Unit,
generating gross proceeds to us of $230,000.000.
Simultaneously
with the closing of the Initial Public Offering and pursuant to the Private Placement Warrants Purchase Agreement, we completed the sale
of an aggregate of 4,125,000 Private Placement Warrants to the Sponsor in the Private Placement at a purchase price of $1.00 per Private
Placement Warrant, generating gross proceeds to us of $4,125,000. The Private Placement Warrants are identical to the Public Warrants,
except as otherwise disclosed in the IPO Registration Statement.
Following
the closing of the Initial Public Offering and Private Placement, an amount of $230,000,000 from the net proceeds of the Initial Public
Offering and the Private Placement was initially placed in the Trust Account located in the United States with Continental acting as
trustee. Pursuant to the Trust Agreement, the Trust Account may be invested only (i) in United States government securities within the
meaning of Section 2(a)(16) of the Investment Company Act, having a maturity of 185 days or less, (ii) in money market funds meeting
the conditions of paragraphs (d)(1), (d)(2), (d)(3) and (d)(4) of Rule 2a-7 promulgated under the Investment Company Act, which invest
only in direct U.S. government treasury obligations, (iii) as uninvested cash or (iv) in an interest or non-interest bearing demand deposit
account at a U.S. chartered commercial bank with consolidated assets of $100 billion or more selected by Continental that is reasonably
satisfactory to us, until the earlier of: (x) the completion of the Business Combination and (y) the distribution of the Trust Account,
as described below.
We
have until February 12, 2028 (24 months from the closing of the Initial Public Offering), or until such (x) earlier date as our Board
may approve or (y) later date as our shareholders may approve, pursuant to the Amended and Restated Articles, to consummate the Business
Combination. If we are unable to complete the Business Combination by the end of the Combination Period, we will (i) cease all operations
except for the purpose of winding up, (ii) as promptly as reasonably possible, but not more than ten business days thereafter, redeem
the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account including
interest earned on the funds held in the Trust Account and not previously released to us to pay taxes, if any, divided by the number
of then outstanding Public Shares, which redemption will completely extinguish Public Shareholders’ rights as shareholders (including
the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible
following such redemption, subject to the approval of our remaining shareholders and our Board, dissolve and liquidate, subject, in each
case, to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law.
We
may seek to extend the Combination Period consistent with applicable laws, regulations and stock exchange rules by amending our Amended
and Restated Articles. Any such amendment would require the approval of our shareholders, and our Public Shareholders 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 their 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 suspension of
trading and delisting from Nasdaq. Our Sponsor may also, in its discretion, consider selling its interest in our Company to another sponsor
entity, which may result in a change to our Management Team.
Recent
Developments
On
January 27, 2026, the Sponsor granted membership interests equivalent to an aggregate of 150,000 Founder Shares to our directors and
officers for their services as directors and officers through our initial Business Combination.
On
January 27, 2026, Odeon purchased 25,000 Founder Shares from the Sponsor for the purchase price of $75.00, or approximately $0.003 per
Founder Share, which Founder Shares are deemed underwriting compensation.
29
Our
IPO Registration Statement became effective on January 30, 2026.
Commencing
on February 10, 2026, we began to reimburse the Sponsor in an amount equal to $10,000 per month for office space, utilities and secretarial
and administrative support made available to us pursuant to the Administrative Services Agreement. Upon completion of the initial Business
Combination or liquidation, we will cease paying these monthly fees.
On
February 12, 2026, we consummated our Initial Public Offering of 23,000,000 Public Units, including 3,000,000 Option Units issued pursuant
to the full exercise of the Over-Allotment Option. Each Public Unit consists of one Public Share and one-third of one Public Warrant.
The Public Units were sold at a price of $10.00 per Public Unit, generating gross proceeds to us of $230,000.000.
Simultaneously
with the closing of the Initial Public Offering and pursuant to the Private Placement Warrants Purchase Agreement, we completed the sale
of an aggregate of 4,125,000 Private Placement Warrants to the Sponsor in the Private Placement at a purchase price of $1.00 per Private
Placement Warrant, generating gross proceeds to us of $4,125,000. The Private Placement Warrants are identical to the Public Warrants,
except as otherwise disclosed in the IPO Registration Statement.
Following
the closing of the Initial Public Offering on February 12, 2026, an amount of $230,000,000 ($10.00 per Unit) from the net proceeds of
the Initial Public Offering, and a portion of the net proceeds from the Private Placement, was held in the Trust Account.
On
February 12, 2026, the Underwriters exercised their Over-Allotment Option, closing on the 3,000,000 Option Units simultaneously with
the Initial Public Offering.
The
Underwriters were paid a cash underwriting discount of $2,300,000 upon the closing of the Initial Public Offering on February 12, 2026.
Additionally, the Underwriters are entitled to the Deferred Fee of $2,300,000 deposited into the Trust Account solely upon consummation
of our initial Business Combination, which will be released to the Underwriters upon the completion of the initial Business Combination
subject to the terms of the Underwriting Agreement.
On
February 13, 2026, we paid The Klein Group (as defined below) $310,363 for its services as the capital markets advisor in connection
with our Initial Public Offering. Simultaneously with the closing of the Initial Public Offering, the Underwriters reimbursed the Company amounting to $310,363.
On February 19, 2026, we fully repaid the aggregate $252,021 borrowed under the IPO Promissory Note.
Results
of Operations
We
have neither engaged in any operations nor generated any revenues to date. Our only activities since November 4, 2025 (inception) through
December 31, 2025 were (i) organizational activities and (ii) activities relating to the Initial Public Offering. We will not generate
any operating revenues until after completion of our initial Business Combination. We have generated non-operating income in the form
of interest income on investments held in the Trust Account after the Initial Public Offering. We expect to incur increased 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 November 4, 2025 (inception) through December 31, 2025, we had a net loss of $1,038,713, which consisted of general and
administrative costs of $55,463 and share-based compensation expense of $983,250.
Liquidity
and Capital Resources
Following
the Initial Public Offering, including the full exercise of the Over-Allotment Option, and the Private Placement, a total of $230,000,000
was placed in the Trust Account. We incurred fees of $5,355,245 in the Initial Public Offering, consisting of $1,989,637 of cash underwriting
fee (net of $310,363 Underwriters’ reimbursement), the Deferred Fee of $2,300,000 and $1,065,608 of other offering costs.
30
For
the period from November 4, 2025 (inception) through December 31, 2025, net cash used in operating activities was $41,495. Net loss of
$1,038,713 was affected by general and administrative costs paid by Sponsor in exchange for the issuance of Class B Ordinary Shares of
$8,025, share-based compensation expense of $983,250, and changes in accrued expenses of $5,943.
As
of December 31, 2025, we did not have any marketable securities held in the Trust Account. Following the Initial Public Offering, 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 (which interest shall be net of taxes payable, if any,
and exclude the Deferred Fee), 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 Team’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, 2025, we had no cash and had a working capital deficit of $219,347. Following the closing of the Initial Public Offering
on February 12, 2026, we had cash held outside of the Trust Account of approximately $1,962,363 and working capital of $1,061,501. Since
the closing of the Initial Public Offering, 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.
Our
liquidity needs through December 31, 2025 were satisfied through (i) a contribution of $25,000 from the Sponsor in exchange for the issuance
of our Founder Shares and (ii) a loan pursuant to the IPO Promissory Note.
Promissory
Note
Prior
to the closing of our Initial Public Offering, our Sponsor agreed to loan us an aggregate of up to $300,000 under the IPO Promissory
Note to cover expenses related to the Initial Public Offering. Such loans and advances were non-interest bearing and payable on the earlier
of March 31, 2026 or the completion of our Initial Public Offering. As of December 31, 2025, there was $154,359 outstanding under the
IPO Promissory Note. Subsequent to the Initial Public Offering, on February 19, 2026, we fully repaid the aggregate of $252,021 borrowings
under the IPO Promissory Note. Borrowings under the IPO Promissory Note are no longer available.
Working
Capital Loans
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 may, but are not obligated to, loan us Working Capital Loans, as may be required. If
we complete a Business Combination, we will repay such Working Capital Loans. 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 converted into warrants of
the post-Business Combination entity at a price of $1.00 per warrant. The warrants would be identical to the Private Placement Warrants.
Other than as set forth above, 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. As of December 31, 2025, we did not have any borrowings under any Working Capital Loans.
We
do not believe we will need to raise additional funds 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.
31
Contractual
Obligations
We
do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities, other than as follows:
Administrative
Services Agreement
Commencing
on February 10, 2026, and until the completion of our Business Combination or liquidation, we may reimburse the Sponsor $10,000 per month
for office space, utilities, and secretarial and administrative support pursuant to the Administrative Services Agreement. As of December
31, 2025, the Administrative Services Agreement had not been executed, and no fees for these services were incurred or accrued.
Underwriting
Agreement
As
of December 31, 2025, the Underwriting Agreement had not been executed.
We
granted the Underwriters 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 February 12, 2026, simultaneously with the closing of the IPO, the Underwriters fully exercised
their Over-Allotment Option.
The
Underwriters were paid a cash underwriting discount of $2,300,000 (1% of the gross proceeds of the Public Units offered in the Initial
Public Offering). Additionally, the Underwriters are entitled to the Deferred Fee of $2,300,000 following the full exercise of the Over-Allotment
Option and is payable to the Underwriters solely upon the completion of the initial Business Combination, subject to the terms of the
Underwriting Agreement.
Capital
Markets Advisor
The
Klein Group, LLC (“The Klein Group”), an affiliate of Klein, acted as the capital markets advisor in connection with our
Initial Public Offering. The Klein Group was engaged to represent our interests only and is independent of the Underwriters. The Klein
Group did not act as an underwriter in connection with Initial Public Offering, it did not identify or solicit potential investors for
the Initial Public Offering or otherwise was not involved in the distribution of the Initial Public Offering. Accordingly, The Klein
Group neither purchased Public Units in the Initial Public Offering nor offered Public Units to the public in connection with the Initial
Public Offering and otherwise did not participate in the Initial Public Offering as defined under FINRA Rule 5110. As of December 31,
2025, there had been no accrual made pursuant to the agreement governing this relationship.
On February 13, 2026, we paid
The Klein Group $310,363 for its services as the capital markets advisor in connection with our Initial Public Offering. Simultaneously
with the closing of the Initial Public Offering, the Underwriters reimbursed us amounting to $310,363.
Financial
and M&A Advisor Engagement
On
December 18, 2025, we entered into a mergers and acquisition advisor agreement with The Klein Group to assist us with identifying potential
targets in connection with our initial Business Combination and to provide certain advisory services. In connection with this agreement,
we may be required to pay certain contingent fees related to those advisory services to the extent that certain conditions are met. As
of December 31, 2025, there has been no accrual made pursuant to this agreement.
Registration
Rights Agreement
As
of December 31, 2025, the Registration Rights Agreement had not been executed.
The
holders of (i) the Founder Shares, (ii) the Private Placement Warrants and (iii) any private placement-equivalent warrants issued in
connection with the Working Capital Loans, if any (and in each case holders of their underlying securities, as applicable) are entitled
to registration rights pursuant to the Registration Rights Agreement, requiring us to register such securities for resale (in the case
of the Founder Shares, only after conversion to our Class A Ordinary Shares). The holders of the majority of these securities are entitled
to make up to three demands, excluding short form demands, that we register such securities. In addition, the holders have certain “piggyback”
registration rights with respect to registration statements filed subsequent to the consummation of a Business Combination and rights
to require us to register for resale such securities pursuant to Rule 415 under the Securities Act. Odeon and Klein may only make a demand
on one occasion and only during the five-year period beginning on the effective date of the IPO Registration Statement. In addition,
Odeon and Klein may participate in a “piggyback” registration only during the seven-year period beginning on the effective
date of the IPO Registration Statement. We will bear the expenses incurred in connection with the filing of any such registration statements.
32
Letter
Agreement
As
of December 31, 2025, the Letter Agreement had not been executed.
Our
Sponsor, directors and officers have entered into the Letter Agreement with us, pursuant to which they have waived their rights to liquidating
distributions from the Trust Account with respect to any Founder Shares held by them if we fail to complete our initial Business Combination
within the Combination Period. However, if they acquire Public Shares in or after the Initial Public Offering, they will be entitled
to liquidating distributions from the Trust Account with respect to such Public Shares if we fail to complete our initial Business Combination
within the Combination Period.
Additionally,
pursuant to the Letter Agreement, our Sponsor, directors and officers will not propose any amendment to our Amended and Restated Articles
to modify (i) the substance or timing of our obligation to allow redemption in connection with our initial Business Combination or to
redeem 100% of our Public Shares if we do not complete our initial Business Combination within the Combination Period or (ii) any other
material provisions relating to shareholders’ rights or pre-initial Business Combination activity, unless we provide our Public
Shareholders with the opportunity to redeem their Public Shares upon approval of any such amendment at a per-share price, payable in
cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account
and not previously released to us to pay our taxes, divided by the number of then outstanding Public Shares.
The
Sponsor and our officers and directors have agreed not to transfer, assign or sell any of their Founder Shares and any Class A Ordinary
Shares issued upon conversion thereof until the earlier to occur of (i) six months after the completion of the initial Business
Combination or (ii) the date on which we complete a liquidation, merger, share exchange or other similar transaction after the initial
Business Combination that results in all of our shareholders having the right to exchange their Class A Ordinary Shares for cash,
securities or other property. Any permitted transferees will be subject to the same restrictions and other agreements of the Sponsor
and our officers and directors with respect to any Founder Shares (the “Lock-Up”). Notwithstanding the foregoing, if (1) the
closing price of the Class A Ordinary Shares equals or exceeds $12.00 per share (as adjusted for share subdivisions, share capitalizations,
reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing after
the initial Business Combination or (2) if the Company consummates a transaction after the initial Business Combination which results
in our shareholders having the right to exchange their shares for cash, securities or other property, the Founder Shares will be released
from the Lock-Up.
Critical
Accounting Estimates and Standards
The
preparation of the financial statements and notes thereto included elsewhere in this Report in conformity with GAAP requires Management
to make estimates and assumptions that affect the reported amounts of assets and liabilities, income and expenses, and the disclosure
of contingent assets and liabilities, in our financial statements. These accounting estimates require the use of assumptions about matters,
some of which are highly uncertain at the time of estimation. Management bases its estimates on historical experience and on various
other assumptions it believes to be reasonable under the circumstances, the results of which form the basis for making judgments, and
we evaluate these estimates on an ongoing basis. To the extent actual experience differs from the assumptions used, our financial statements
and notes thereto included elsewhere in this Report could be materially affected. We believe that the following accounting policies involve
a higher degree of judgment and complexity. As of December 31, 2025, we did not have any critical accounting estimates to be disclosed,
except as noted below.
Share-Based
Compensation
We
record share-based compensation in accordance with FASB ASC Topic 718, “Compensation-Stock Compensation”, guidance to account
for our share-based compensation, which defines a fair value-based method of accounting for an employee share option or similar equity
instrument. We recognize all forms of share-based payments at their fair value on the grant date, which are based on the estimated number
of awards that are ultimately expected to vest. Share-based payments are valued using the Monte Carlo model. Grants of share-based payment
awards issued to non-employees for services rendered have been recorded at the fair value of the share-based payment, which is the more
readily determinable value. The grants are amortized on a straight-line basis over the requisite service periods, which is generally
the vesting period. If an award is granted, but vesting does not occur, any previously recognized compensation cost is reversed in the
period related to the termination of service. Share-based compensation expenses are included in costs and operating expenses depending
on the nature of the services provided in the statement of operations of the financial statements included elsewhere in this Report.
33
Recent
Accounting Standards
Management
does not believe that there are any recently issued, but not yet effective, accounting standards, which, if currently adopted, would
have a material effect on the financial statements and notes thereto included elsewhere in this Report.
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-18
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.