UY Scuti Acquisition Corp. 10-Q

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS References to the “Company,” “UY Scuti,” “our,” “us” or “we” refer to UY Scuti Acquisition Corp. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the unaudited interim financial statements and the notes thereto contained elsewhere in this Quarterly Report on Form 10-Q (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 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 Form 10-Q including, without limitation, statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding the Company’s financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. Words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would” and variations thereof 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. 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 and formed for the purpose of acquiring, engaging in a share exchange, share reconstruction and amalgamation with, purchasing all or substantially all of the assets of, entering into contractual arrangements with, or engaging in any other similar business combination with one or more businesses or entities. We intend to effectuate our initial business combination using cash from the proceeds of the Initial Public Offering (the “IPO”) and the sale of the private placement units, and the proceeds of potential sales of our securities in connection with our initial business combination, debt or a combination of cash, stock and debt. We expect 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. Pursuant to our Amended and Restated Memorandum and Articles of Association, as amended, if we are unable to complete our initial business combination within the Combination Period of twelve (12) months from the consummation of our IPO, subject to our ability to extend such time period by up to twelve (12) months, we will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but no 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 (which interest shall be net of amounts withdrawn to pay our income taxes), 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 liquidation distributions, if any), and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our board of directors, liquidate and dissolve, subject in each case to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. Results of Operations We have neither engaged in any operations nor generated any revenues to date. Our only activities since inception have been organizational activities and those necessary to prepare for the initial public offering and subsequent to our initial public offering, identifying a target company for an initial business combination, entering into the Merger Agreement (as defined below) with Isdera Group Limited, and taking actions in connection with the business combination contemplated by the Merger Agreement. Following the initial public offering, we will not generate any operating revenue until after completion of our initial business combination. We generated non-operating income in the form of interest income on investments held in trust and cash. 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 related to our initial business combination. 18 Table of Contents For the three months ended June 30, 2026, we had a net income of $164,865, which consists of interest earned on cash held in the Trust Account of $302,840, offset by operating costs of $137,975. For the three months ended June 30, 2025, we had net income of $332,078, which consists of operating costs of $234,453, offset by interest earned on cash held in the Trust Account of $566,531. Recent Developments Business Combination Agreement On July 18, 2025, we entered into the Merger Agreement with Isdera Group Limited, a Cayman Islands company (“Isdera Group”), a company that shall become the parent company of Xinghui Automotive Technology (Hainan) Co., Ltd, which is in the business of designing automobiles in the People’s Republic of China (“Xinghui Technology”), and Xinghui Technology’s Principal Shareholders for a business combination. The Merger Agreement contemplates that (i) UYSC shall form the Purchaser in the Cayman Islands as an exempted company and a wholly-owned subsidiary and (ii) the Purchaser shall form a company in the Cayman Islands as an exempted company and a wholly-owned subsidiary (the “Merger Sub”) for the purposes of consummating the business combination transactions described in the Merger Agreement. Pursuant to the Merger Agreement, we will merge with and into the Purchaser, resulting in its shareholders becoming shareholders of the Purchaser and concurrently therewith, Merger Sub will merge with and into Isdera Group, with Isdera Group surviving the merger and resulting in the Purchaser acquiring 100% of the issued and outstanding equity securities of Isdera Group (the “Acquisition Merger”). Pursuant to the Merger Agreement, the aggregate consideration to be paid to Isdera Group Shareholders for the Acquisition Merger is such number of newly issued PubCo Ordinary Shares determined by dividing the net value of Isdera Group, which was agreed to be $1,000,000,000, by $10.00 per share. Concurrently with the execution of the Merger Agreement, a principal shareholder of Isdera Group entered into a support agreement with UYSC, pursuant to which such shareholder of Isdera Group agreed not to transfer its shares of Isdera Group and to vote in favor of the Business Combination, subject to the terms of such shareholder support agreement. Sponsor Loan On September 12, 2025, we issued the Sponsor 2025 Note in the principal amount of up to $1,000,000 to Sponsor. The Sponsor 2025 Note bears no interest and initially provided that we shall repay the principal balance on the earlier of: (i) March 31, 2026 or (ii) the date on which we consummate a business combination. The principal balance may be prepaid at any time. Once an amount is drawn down under the Note, it shall not be available for future drawdown requests even if prepaid. The Sponsor 2025 Note was subject to customary events of default, the occurrence of certain of which entitles the Sponsor to declare, by written notice, the unpaid principal balance thereon and all other sums payable with regard to the Sponsor 2025 Note becoming due and payable within five (5) business days. Further, at any time on or prior to the maturity date, the Sponsor may elect to convert the outstanding principal balance of the Sponsor 2025 Note into units of our securities at a conversion price equal to $10.00 per unit. Each unit consists of one ordinary share and one right to receive one-fifth of one ordinary share. The terms of the units are identical to the private placement units sold by us simultaneously with the closing of its initial public offering. Effective as of March 31, 2026, the Company and Sponsor agreed to amend and restate the Sponsor 2025 Note (the “Amended Sponsor Note”) to extend the maturity date thereof to be the earlier of: (i) March 31, 2027 or (ii) the date on which we consummate a business combination. Other than the foregoing terms, the Amended Note has the same terms as the Sponsor 2025 Note. 2026 Extraordinary General Meeting On March 31, 2026, we held the Extraordinary General Meeting. At the Extraordinary General Meeting, holders of our Ordinary Shares approved certain amendments to our Second Amended and Restated Memorandum and Articles of Association (the “Charter Amendment Proposal”) and an amendment to our Investment Management Trust Agreement with Continental Stock Transfer & Trust Company (the “Trust Amendment Proposal”). In accordance with the Charter Amendment Proposal, we received the approval of our shareholders to amend our Amended and Restated Memorandum and Articles of Association to (i) extend the date by which we must complete a business combination up to four times from April 1, 2026 to April 1, 2027, with each extension comprised of a three-month extension period, provided that the Sponsor or its designees cause to be deposited to the Trust Account the amount provided for in the Trust Agreement and (ii) provide that we will not withdraw any amounts out of the interest from the Trust Account to pay dissolution expenses. 19 Table of Contents In accordance with the Trust Amendment Proposal, our shareholders approved the amendment of our Investment Management Trust Agreement to extend the period of time within which we must complete a business combination from two times, each by an additional three-month period to October 1, 2026, to a total of four times, each by an additional three-month period to April 1, 2027 (each an “Extension Period”), provided that the Sponsor and/or its designees deposit $450,000 into the Trust Account for each Extension Period. The Trust Agreement was also amended to provide that (x) if the extension fee is not timely deposited into the Trust Account, we shall have a period of thirty (30) days to pay any applicable past due payment for the extension fee and if we fail to make any applicable past due payment during the cure period, then we shall promptly liquidate the Trust Account and the property in the Trust Account shall be distributed to the public shareholders and (y) we will not withdraw any amounts out of the interest from the Trust Account to pay dissolution expenses. In connection with the Charter Amendment Proposal and Trust Amendment Proposal, we agreed that (i) if we extend the time period within which to consummate a business combination and contribute the revised extension fee to the Trust Account in connection with such election, we intend to file a Current Report on Form 8-K to disclose such event and (ii) if the shareholders approve the Charter Amendment Proposal and the Trust Amendment Proposal, we would not seek another shareholder vote to approve a further change to the terms and conditions concerning extending the time period within which to consummate a business combination In connection with the shareholder votes at the Extraordinary General Meeting, holders of 2,437,288 Ordinary Shares properly exercised their right to redeem their shares for cash at a redemption price of approximately $10.38 per share. As a result, approximately $25,302,078 was removed from the Trust Account to pay such holders and approximately $34,390,068 remained in the Trust Account. Following these redemptions, we had 5,221,060 Ordinary Shares, including 3,312,712 Public Shares, outstanding. Extension Loans Effective as of March 31, 2026, Sun Peisha, an individual and the designee of the Sponsor, loaned us the aggregate amount of $450,000, which sum was deposited into the Trust Account in order to extend the time that we have to consummate a Business Combination for the first three-month extension period. On April 25, 2026, we issued the Extension Note to the lender to evidence the loan. The Extension Note bears no interest and provides that we shall repay the outstanding principal on the date on which we consummate a business combination. On such maturity date, the entire outstanding principal balance of the Extension Note shall be converted into units of our securities at a conversion price of $10.00 per unit, with each unit consisting of one Ordinary Share and one right to receive one-fifth of one Ordinary Share. Further, on June 30, 2026, we caused an additional amount of $450,000 to be deposited into the Trust Account in order to further extend the time that we have to consummate our initial business combination to October 1, 2026. The second extension payment was loaned to us by Isdera HK Limited, an affiliate of Isdera Group. Liquidity and Capital Resources As of June 30, 2026, we had $8,807 in cash and cash equivalents held outside of the Trust Account, a working capital deficit of $1,640,146 and a shareholders’ deficit of $1,640,146. As of March 31, 2026, we had $8,846 in cash and cash equivalents held outside of the Trust Account, a working capital deficit of $1,052,099 and a shareholders’ deficit of $1,036,501. For the three months ended June 30, 2026, we had a net income of $164,865, which consists of interest earned on cash held in the Trust Account of $302,840, offset by operating costs of $137,975. For the three months ended June 30, 2026, we had a negative cash flow from operating activities of $39. For the fiscal year ended March 31, 2026, we had a negative cash flow from operating activities of $843,315. Our 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. In connection with the closing of our IPO, the approximately $337,584 drawn down under the unsecured promissory note was repaid in full. On April 1, 2025, we consummated the initial closing of our IPO of 5,000,000 units (the “Units”), at $10.00 per Unit, generating gross proceeds of $50,000,000. In connection with the IPO, the underwriters were granted a 45-day option (the “Over-Allotment Option”) to purchase up to 750,000 additional units to cover over-allotments (the “Option Units”), if any. In two separate closings of the Over-Allotment Option on April 7, 2025 and April 9, 2025, we sold an additional 750,000 Option Units at a price of $10.00 per Option Unit and raised additional gross proceeds of $7,500,000. Simultaneously with the closing of our IPO, including the full exercise of the Over-Allotment Option, we consummated the sale of 240,848 Private Placement Units at a price of $10.00 per Private Placement Unit in a private placement to the Sponsor, generating total gross proceeds of $2,408,840, including the cancellation of $337,500 of indebtedness. Each Private Placement Unit consists of one ordinary share and one right to receive one-fifth (1/5 th ) of one ordinary share. The Private Placement was conducted as a non-public transaction and, as a transaction by an issuer not involving a public offering, is exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”), in reliance upon Section 4(a)(2) of the Securities Act. 20 Table of Contents Upon the closing of the IPO and the private placement, a total of $57,500,000 was placed in a trust account (the “Trust Account”) maintained by Continental Stock Transfer & Trust Company as a trustee and will be invested only in U.S. government treasury bills with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act of 1940, as amended (the “Investment Company Act”), and that invest only in direct U.S. government treasury obligations. Except for the withdrawal of interest earned on the amounts in the trust account to fund the Company’s taxes, if any, or upon the redemption by public shareholders of Ordinary Shares in connection with certain amendments to the Company’s amended and restated memorandum and articles of association, none of the funds held in the trust account will be released until the completion of the Company’s initial business combination or the redemption by the Company of 100% of the outstanding Ordinary Shares issued by the Company in the Initial Public Offering if the Company does not consummate an initial business combination within the Combination Period. We intend to use substantially all of the net proceeds of the IPO and the private placement, including the funds held in the Trust Account, in connection with our initial business combination and to pay our expenses relating thereto. To the extent that our capital stock is used in whole or in part as consideration to effect our initial business combination, the remaining proceeds held in the Trust Account as well as any other net proceeds not expended will be used as working capital to finance the operations of the target business. Such working capital funds could be used in a variety of ways including continuing or expanding the target business’ operations, for strategic acquisitions and for marketing, research and development of existing or new products. 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. We will use 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. We also have ongoing professional and other costs to maintain our reporting, listing, compliance and administrative requirements of being a publicly traded company. In addition, we could use a portion of the funds not being placed in trust to pay commitment fees for financing, fees to consultants to assist us with our search for a target business or as a down payment or to fund a “no-shop” provision (a provision designed to keep target businesses from “shopping” around for transactions with other companies or investors on terms more favorable to such target businesses) with respect to a particular proposed business combination, although we do not have any current intention to do so. If we entered into an agreement where we paid for the right to receive exclusivity from a target business, the amount that would be used as a down payment or to fund a “no-shop” provision would be determined based on the terms of the specific business combination and the amount of our available funds at the time. Our forfeiture of such funds (whether as a result of our breach or otherwise) could result in our not having sufficient funds to continue searching for, or conducting due diligence with respect to, prospective target businesses. We have incurred and expect to continue to incur significant professional costs to remain a publicly traded company and to incur significant transaction costs in pursuit of the consummation of a Business Combination. In connection with our assessment of going concern considerations in accordance with Financial Accounting Standards Board’s Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” management has determined that, as of June 30, 2026, we have sufficient funds for our working capital needs until a minimum of one year from the date of issuance of these financial statements. We cannot assure that our plans to consummate an initial business combination will be successful. In addition, if we are unable to complete a Business Combination within the Combination Period, our board of directors would proceed to commence voluntary liquidation and thereby a formal dissolution of the Company. There is no assurance that our plans to consummate a Business Combination will be successful within the time period we have to complete our initial business combination. As a result, management has determined that this additional condition also raises substantial doubt about our ability to continue as a going concern. These financial statements do not include any adjustments that might result from the outcome of this uncertainty. Going concern consideration As of June 30, 2026, we had $8,807 in cash and cash equivalents held outside of the Trust Account, a working capital deficit of $1,640,146 and a shareholders’ deficit of $1,640,146. For the three months ended June 30, 2026, we had a net income of $164,865, which consists of interest earned on cash held in the Trust Account of $302,840, offset by operating costs of $137,975. For the three months ended June 30, 2026, we had a negative cash flow from operating activities of $39. Subsequent to the consummation of the IPO, our liquidity requirements have been satisfied through the net proceeds from the IPO, the Private Placement, loans from our Sponsor pursuant to the Promissory Note II, and loan from third parties as described below. We have incurred, and expect to continue to incur, significant professional fees and costs to maintain our status as a publicly traded company, as well as significant transaction costs in connection with pursuing the consummation of a Business Combination. 21 Table of Contents In order to fund working capital deficiencies or finance transaction costs in connection with a Business Combination, on September 12, 2025, we issued an unsecured promissory note (the “Promissory Note II”) in the principal amount of up to $1,000,000 to our Sponsor. The Promissory Note II bears no interest and after giving effect to the amendment to the Promissory Note II, it is repayable by us to the Sponsor in full on the earlier of (i) March 31, 2027 or (ii) the date of consummation of a Business Combination (the “Maturity Date”). The principal balance may be prepaid at any time. At any time on or prior to the Maturity Date, the Sponsor may elect to convert the outstanding principal balance of the Promissory Note II into units of our securities at a conversion price of $10.00 per unit. Each unit consists of one ordinary share and one right to receive one-fifth of one ordinary share. As of June 30, 2026, the principal amount due and owing under the Promissory Note II was $469,053. Our Amended and Restated Memorandum and Articles of Association originally provided that we will have until 12 months from the closing of our IPO, or up to 18 months from the closing of the IPO, to consummate an initial business combination. Following the approval of the Charter Amendment Proposal and Trust Amendment Proposal at our Extraordinary General Meeting held on March 31, 2026, if we do not consummate an initial business combination by April 1, 2027, we will be required to redeem the public shares and thereafter liquidate and dissolve. Accordingly, there is a possibility that an initial business combination may not be completed within the Combination Period. In connection with our assessment of going concern considerations in accordance with Accounting Standards Update (“ASU”) 2014-15, Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern, management has determined that if we are unsuccessful in consummating an initial business combination within the prescribed period of time from the closing of the IPO, the requirement that we cease all operations, redeem the public shares, and thereafter liquidate and dissolve raises substantial doubt about our ability to continue as a going concern within one year after the date the unaudited financial statements are issued. The unaudited financial statements do not include any adjustments that might result from the outcome of this uncertainty. The Company currently believes that it does not need additional capital to satisfy its liquidity needs beyond the net proceeds from the consummation of the IPO, the proceeds held outside of the Trust Account, and as discussed above, amounts available to us under the Promissory Note II (defined above) for paying existing accounts payable, identifying and evaluating prospective business combination candidates, performing due diligence on prospective target businesses, paying for travel expenditures, selecting the target business to merge with or acquire, and structuring, negotiating and consummating the Initial Business Combination. However, if our estimates of the costs of identifying a target business, undertaking in-depth due diligence and negotiating an initial 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 initial business combination. Moreover, we may need to obtain additional financing either to complete our initial business combination or because we become obligated to redeem a significant number of our public shares upon completion of our initial business combination, in which case we may issue additional securities or incur debt in connection with such business combination. Our sponsor, an affiliate of our sponsor or our officers and directors may, but none of them is obligated to, loan us funds as may be required to fund our working capital requirements. If we complete our initial business combination, we will repay such loaned amounts out of the proceeds of the trust account released to us. In the event that our initial 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. Up to $1,500,000 of such loans may be convertible into private placement units at a price of $10.00 per unit. Such units would be identical to the private placement units issued to our sponsor. Except for the foregoing, the terms of such loans, if any, have not been determined and no written agreements exist with respect to such loans. We do not expect to seek loans from parties other than our sponsor, an affiliate of our sponsor or our officers and directors, if any, as we do not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our trust account. In addition, if we raise additional funds through equity or convertible debt issuances, our public shareholders may suffer significant dilution, and these securities could have rights that rank senior to our public shares. If we raise additional funds through the incurrence of indebtedness, such indebtedness would have rights that are senior to our equity securities and could contain covenants that restrict our operations. Off-Balance Sheet Financing Arrangements We have no obligations, assets or liabilities, which would be considered off-balance sheet arrangements as of June 30, 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. 22 Table of Contents 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 a monthly fee of $10,000 for certain general and administrative services, including office space, utilities and administrative services, provided to the Company. We began incurring these fees on April 1, 2025 and will continue to incur these fees monthly until the earlier of the completion of a Business Combination or the Company’s liquidation. Registration Rights Pursuant to an agreement entered into on March 31, 2025, our initial shareholders are entitled to registration rights requiring the Company to register such securities for resale. The holders of these securities are entitled to make up to three demands, excluding short form demands, that the Company registers such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the completion of the initial business combination and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. The Company will bear the expenses incurred in connection with the filing of any such registration statements. Underwriting Agreement The Company granted Maxim, the representative of the underwriters, for a period of 45-days, the option to purchase up to 750,000 additional Units to cover over-allotments, if any, at the IPO price less the underwriting discounts and commissions. The underwriters were entitled to a cash underwriting discount of 1.75% of the gross proceeds of the IPO, or $875,000 (or $1,006,250 including the full exercise of the over-allotment option). Additionally, the Company issued the underwriter 4% of the gross proceeds of the IPO as underwriting discounts and commissions in the form of Representative Shares at a price of $10.00 per ordinary share, which equaled 200,000 shares (or 230,000 shares if the underwriter’s overallotment option is exercised in full) upon the consummation of the IPO. In connection with the closing of the IPO, the Company issued 200,000 Representative Shares to the underwriter. In connection with the issuance and sales of the Option Units, the Company issued an additional 30,000 Representative Shares to Maxim, the representative of the underwriters. Financial Advisor Agreement We entered into an advisory agreement with Keltwin International Limited (the “Advisor”) dated June 23, 2025, which was subsequently amended on July 1, 2026 (as amended, the “Advisory Agreement”). Pursuant to the Advisory Agreement, we engaged the Advisor to provide us with consultancy services including assistance in valuing, structuring and negotiating the terms for a transaction and assistance in the preparation of its proxy statement, registration statement, and/or other documents related to a business combination transaction. In consideration of such services, the Advisor agreed to be paid in 4,700,000 PubCo Class A Ordinary Shares upon the closing of the business combination transaction. The shares issuable to the Advisor are subject to a six-month lock-up period commencing on the closing date of the business combination transaction. Further, the Advisor was granted registration rights pursuant to which the shares issuable to them will either be included in the registration statement filed with the SEC in connection with the closing of the business combination or in a registration statement to be filed within thirty (30) days following the closing of the business combination covering the resale of such shares. Critical Accounting Policies Basis of Presentation The accompanying unaudited condensed financial statements are presented in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). The accompanying unaudited condensed financial statements as of June 30, 2026 has been prepared in accordance with U.S. GAAP and the rules of the SEC. Emerging Growth Company The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. 23 Table of Contents Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company that is neither an emerging growth company nor an emerging growth company that has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. Ordinary Shares Subject to Possible Redemption All of the 5,750,000 ordinary shares sold as part of the Units in the IPO contain a redemption feature which allows for the redemption of such public shares in connection with the Company’s liquidation, if there is a shareholder vote or tender offer in connection with the Business Combination and in connection with certain amendments to the Company’s amended and restated certificate of incorporation. The Company accounted for its ordinary shares subject to possible redemption in accordance with the guidance in ASC Topic 480, “Distinguishing Liabilities from Equity” (ASC 480). Ordinary shares subject to mandatory redemption (if any) were classified as a liability instrument and will be measured at fair value. Conditionally redeemable ordinary shares (including ordinary shares that features redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) were classified as temporary equity. At all other times, ordinary shares were classified as stockholders’ equity. In accordance with ASC 480-10-S99, the Company classified the ordinary shares subject to redemption outside of permanent equity as the redemption provisions are not solely within the control of the Company. Given that the 5,750,000 ordinary shares sold as part of the units in the IPO were issued with other freestanding instruments (i.e., rights), the initial carrying value of ordinary shares classified as temporary equity has been allocated to the proceeds determined in accordance with ASC 470-20. If it is probable that the equity instrument will become redeemable, the Company has the option to either (i) accrete changes in the redemption value over the period from the date of issuance (or from the date that it becomes probable that the instrument will become redeemable, if later) to the earliest redemption date of the instrument or (ii) recognize changes in the redemption value immediately as they occur and adjust the carrying amount of the instrument to equal the redemption value at the end of each reporting period. The Company has elected to recognize the changes in redemption value as a deemed dividend and charges against retained earnings or, in the absence of retained earnings, by charges against additional paid-in capital, over an expected 12-month period, which is the initial period that the Company has to complete a Business Combination. Use of Estimates In preparing these unaudited condensed financial statements in conformity with U.S. GAAP, the Company’s management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed financial statements and the reported expenses during the reporting period. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the unaudited condensed financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates. Income Taxes The Company follows the asset and liability method of accounting for income taxes under ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. There is currently no taxation imposed on income by the Government of the Cayman Islands. In accordance with Cayman income tax regulations, income taxes are not levied on the Company. Consequently, income taxes are not reflected in the Company’s financial statements. 24 Table of Contents Earnings (Loss) Per Ordinary Share The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share”. The unaudited condensed statements of operations and comprehensive income and loss include a presentation of earnings (loss) per redeemable share and earnings (loss) per non-redeemable share following the two-class method of income per share. In order to determine the net income (loss) attributable to both the redeemable shares and non-redeemable shares, the Company first considered the undistributed income (loss) allocable to both the redeemable shares and non-redeemable shares and the undistributed income (loss) is calculated using the total net income (loss) less any dividends paid. The Company then allocated the undistributed income (loss) ratably based on the weighted average number of shares outstanding between the redeemable and non-redeemable shares. Any remeasurement of the accretion to redemption value of the shares subject to possible redemption was considered to be dividends paid to the public shareholders. For the three months ended June 30, 2026 did not have any dilutive securities and other contracts that could, potentially, be exercised or converted into common stock and then share in the earnings of the Company. As a result, diluted income (loss) per share is the same as basic income (loss) per share for the period presented. Fair Value of Financial Instruments ASC Topic 820 “Fair Value Measurements and Disclosures” defines fair value, the methods used to measure fair value and the expanded disclosures about fair value measurements. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between the buyer and the seller at the measurement date. In determining fair value, the valuation techniques consistent with the market approach, income approach and cost approach shall be used to measure fair value. ASC Topic 820 establishes a fair value hierarchy for inputs, which represents the assumptions used by the buyer and seller in pricing the asset or liability. These inputs are further defined as observable and unobservable inputs. Observable inputs are those that buyer and seller would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs reflect the Company’s assumptions about the inputs that the buyer and seller would use in pricing the asset or liability developed based on the best information available in the circumstances. The fair value hierarchy is categorized into three levels based on the inputs as follows: ● Level 1 - Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. Valuation adjustments and block discounts are not being applied. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these securities does not entail a significant degree of judgment. ● Level 2 - Valuations based on (i) quoted prices in active markets for similar assets and liabilities, (ii) quoted prices in markets that are not active for identical or similar assets, (iii) inputs other than quoted prices for the assets or liabilities, or (iv) inputs that are derived principally from or corroborated by market through correlation or other means. ● Level 3 - Valuations based on inputs that are unobservable and significant to the overall fair value measurement. The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820 approximates the carrying amounts represented in the accompanying balance sheet, primarily due to their short-term nature. The carrying amounts reported in the balance sheet for cash and cash equivalents, marketable securities held in trust account, accounts payable and accrued expenses and due to related parties each qualify as financial instruments and are a reasonable estimate of their fair values because of the short period between the origination of such instruments and their expected realization and their current market rate of interest. Recent Accounting Standards Management does not believe that any other recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company’s unaudited condensed financial statement. 25 Table of Contents ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. Not required for smaller reporting companies.