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Item 2. Management’s Discussion and Analysis

2026-07-13 compared with 2026-04-14 · 318 added, 344 removed, 2 unchanged (100% of the section changed)

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

References to the “Company,” “XFLH Capital”

“our,” “us” or “we” refer to XFLH Capital Corporation.

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

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.

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 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.

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, if we are unable to complete our initial business combination within the completion window of fifteen (15) months

from the consummation of our IPO, unless the Company obtains shareholder approval to extend further its time frame to consummate a business

combination, 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 and up to $100,000 of interest to pay dissolution expenses), 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

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 and identifying a target company for an initial business combination.

the initial public offering, we will not generate any operating revenue until after completion of our initial business combination.

generated non-operating income in the form of interest income on investments held in trust and cash.

The operating costs incurred in the period from August 12, 2025 (inception)

to February 28, 2026 consist primarily of approximately $146,186 of professional fees, insurance, costs and fees associated with our financial

reporting, listing and other public company costs.

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.

For the three months ended February 28, 2026, we had a net income of

$42,199, which consists of interest earned on cash held in the Trust Account of $112,500, offset by operating costs of $70,301.

For the six months ended February 28, 2026, we had a net loss of $175,

which consists of operating costs of $112,675, offset by interest earned on cash held in the Trust Account of $112,500.

Liquidity and Capital Resources

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

In connection with the closing of our IPO, the approximately $278,496 drawn down under the unsecured promissory note was

repaid in full.

On February 13, 2026, we consummated the initial

closing of our IPO of 10,000,000 units (the “Units”), at $10.00 per Unit, generating gross proceeds of $100,000,000.

In connection

with the IPO, the underwriters were granted a 45-day option (the “Over-Allotment Option”) to purchase up to 1,500,000 additional

units to cover over-allotments (the “Option Units”), if any.

Subsequently, the 45-day period within which the over-allotment

option may be exercised expired without being exercised by the underwriters.

Simultaneously with the closing of our IPO, we

consummated the sale of 154,970 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 $1,549,700.

Each Private Placement Unit consists of one ordinary share and one right to receive

one-seventh (1/7 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, was 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.

Upon the closing of the IPO and the private placement,

a total of $100,000,000 was placed in a trust account (the “Trust Account”) maintained by Continental Stock Transfer &

Trust Company, as 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.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

to the “Company,” “XFLH Capital” “our,” “us” or “we” refer to XFLH Capital

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.

Note Regarding Forward-Looking Statements

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.

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.

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.

intend to effectuate our initial business combination using cash from the proceeds of the Initial Public Offering 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.

to our amended and restated memorandum and articles of association, if we are unable to complete our initial business combination within

the completion window of fifteen (15) months from the consummation of our IPO, unless the Company obtains shareholder approval to extend

further its time frame to consummate a business combination, 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 and up to $100,000 of interest to pay dissolution expenses),

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

of Operations

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 and identifying

a target company for an initial business combination.

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.

operating costs incurred in the period from August 12, 2025 (inception) to May 31, 2026 consist primarily of approximately $236,819 of

professional fees, insurance, costs and fees associated with our financial reporting, listing and other public company costs.

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.

the three months ended May 31, 2026, we had a net income of $757,749, which consists of interest earned on cash held in the Trust Account

of $853,313, offset by operating costs of $95,564.

the nine months ended May 31, 2026, we had a net income of $762,505, which consists of interest earned on cash held in the Trust Account

of $965,813, which was offset by operating costs of $203,308.

and Capital Resources

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

$278,496 drawn down under the unsecured promissory note was repaid in full.

February 13, 2026, we consummated the initial closing of our IPO of 10,000,000 units (the “Units”), at $10.00 per Unit, generating

gross proceeds of $100,000,000.

In connection with the IPO, the underwriters were granted a 45-day option (the “Over-Allotment

Option”) to purchase up to 1,500,000 additional units to cover over-allotments (the “Option Units”), if any.

Subsequently,

the 45-day period within which the over-allotment option may be exercised expired without being exercised by the underwriters.

Simultaneously

with the closing of our IPO, we consummated the sale of 154,970 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 $1,549,700.

Each Private Placement Unit consists of one ordinary

share and one right to receive one-seventh (1/7 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, was 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.

the closing of the IPO and the private placement, a total of $100,000,000 was placed in a trust account (the “Trust Account”)

maintained by Continental Stock Transfer & Trust Company, as 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 15 months after the closing of the Initial Public Offering.

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

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.

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.

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 currently believe that we do not need additional

capital to satisfy its liquidity needs beyond the net proceeds from the consummation of the IPO and the proceeds held outside of the Trust

Account 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

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 will have rights that are senior to our equity securities and could contain covenants that restrict

our operations.

As of February 28, 2026, the Company had $593,400 in cash and cash

equivalents held outside of the Trust Account and working capital of $379,070.

For the three months ended February 28, 2026, we had a

net income of $42,199, which consists of interest earned on cash held in the Trust Account of $112,500, offset by operating costs of $70,301.

For the six months ended February 28, 2026, we had a net loss of $175, which consists of operating costs of $112,675, offset by interest

earned on cash held in the Trust Account of $112,500.The Company has incurred and expects to continue to incur significant professional

costs to remain as a publicly traded company and to incur significant transaction costs in pursuit of the consummation of a Business Combination.

Off-Balance Sheet Financing Arrangements

We have no obligations, assets or liabilities, which would be considered

as off-balance sheet arrangements as of February 28, 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 a monthly fee of $10,000

for certain general and administrative services, including office space, utilities and administrative services, provided to us.

incurring these fees on February 11, 2026, 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

The holders of the Founder Shares and Private Units

(and their underlying securities) will be entitled to registration rights pursuant to a registration rights agreement to be signed prior

to or on the effective date of the IPO, 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 register 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

We granted Maxim, the representative of the underwriters,

a 45-day option from the date of our IPO prospectus to purchase up to 1,500,000 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 0.5% of the gross proceeds of the IPO, or $500,000 (or $575,000 if the over-allotment option is exercised in full).

Additionally,

the Company issued the underwriter 4% of the gross proceeds of the IPO as underwriting discounts and commissions in the form of the Company’s

shares at a price of $10.00 per ordinary share, which equaled 400,000 shares (or 460,000 shares if the underwriter’s overallotment

option is exercised in full) upon the consummation of the IPO.

In connection with the consummation of the IPO, the Company issued 400,000

Representative Shares to the underwriter.

Subsequently, on March 30, 2026, the over-allotment option granted to the underwriters expired without being exercised.

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 February 28, 2026 has been prepared in accordance with U.S.

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 15 months after the closing of the

Initial Public Offering.

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.

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.

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.

currently believe that we do not need additional capital to satisfy its liquidity needs beyond the net proceeds from the consummation

of the IPO and the proceeds held outside of the Trust Account 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.

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.

of May 31, 2026, the Company had $246,742 in cash and cash equivalents held outside of the Trust Account and working capital of $415,637.

For the three months ended May 31, 2026, we had a net income of $757,749, which consists of interest earned on cash held in the Trust

Account of $853,313, offset by operating costs of $95,564.

For the nine months ended May 31, 2026, we had a net income of $762,505, which

consists of interest earned on cash held in the Trust Account of $965,813, offset by operating costs of $203,308.

The Company has incurred

and expects to continue to incur significant professional costs to remain as a publicly traded company and to incur significant transaction

costs in pursuit of the consummation of a Business Combination.

Sheet Financing Arrangements

have no obligations, assets or liabilities, which would be considered as off-balance sheet arrangements as of May 31, 2026.

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.

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 us.

We began incurring these fees on February 11, 2026, and will continue to incur these fees monthly until the

earlier of the completion of a Business Combination or the Company’s liquidation.

holders of the Founder Shares and Private Units (and their underlying securities) will be entitled to registration rights pursuant to

a registration rights agreement to be signed prior to or on the effective date of the IPO, requiring the Company to register such securities

The holders of these securities are entitled to make up to three demands, excluding short form demands, that the Company

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.

granted Maxim, the representative of the underwriters, a 45-day option from the date of our IPO prospectus to purchase up to 1,500,000

additional Units to cover over-allotments, if any, at the IPO price less the underwriting discounts and commissions.

underwriters were entitled to a cash underwriting discount of 0.5% of the gross proceeds of the IPO, or $500,000 (or $575,000 if the

over-allotment option is exercised in full).

Additionally, the Company issued the underwriter 4% of the gross proceeds of the IPO as

underwriting discounts and commissions in the form of the Company’s shares at a price of $10.00 per ordinary share, which equaled

400,000 shares (or 460,000 shares if the underwriter’s overallotment option is exercised in full) upon the consummation of the

In connection with the consummation of the IPO, the Company issued 400,000 Representative Shares to the underwriter.

Subsequently,

on March 30, 2026, the over-allotment option granted to the underwriters expired without being exercised.

Accounting Policies

of Presentation

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

The accompanying unaudited condensed financial statements as of May 31, 2026 has been prepared in accordance with

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.

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 10,000,000 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

Given that the 10,000,000 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, we have 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 immediately.

The accretion

or remeasurement will be treated as a deemed dividend (i.e., a reduction to retained earnings, or in absence of retained earnings, additional

paid-in capital).

Use of Estimates

In preparing these unaudited condensed financial statements in conformity

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.

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.

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.

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 February 28, 2026, the Company 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

Except as described in Note 2 to the Notes to the

Unaudited Financial Statements included in this Quarterly Report on Form 10-Q, 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.

QUANTITATIVE AND QUALITATIVE DISCLOSURES

ABOUT MARKET RISK.

Not required for smaller reporting companies.

Growth Company

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

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

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.

Shares Subject to Possible Redemption

of the 10,000,000 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.

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’

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.

that the 10,000,000 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, we have 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.

Company has elected to recognize the changes immediately.

The accretion or remeasurement will be treated as a deemed dividend (i.e.,

a reduction to retained earnings, or in absence of retained earnings, additional paid-in capital).

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.

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.

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

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

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

(Loss) Per Ordinary Share

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 May 31, 2026, the Company

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.

Value of Financial Instruments

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.

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.

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.

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.

Accounting Standards

as described in Note 2 to the Notes to the Unaudited Financial Statements included in this Quarterly Report on Form 10-Q, 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.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

required for smaller reporting companies.

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