Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)

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

Special Note Regarding Forward-Looking Statements

This annual report includes forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. All statements other than statements of historical fact included in this annual report, including statements regarding our financial position, business strategy, ability to complete an Initial Business Combination and the proposed transaction with Aiways Europe, are forward-looking statements. Actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those set forth under "Item 1A. Risk Factors" and elsewhere in this annual report.

Overview

We are a blank check company formed in Delaware on January 13, 2021 for the purpose of effecting an Initial Business Combination. We do not have any operations and have generated no operating revenues to date. Our activities since inception have consisted of organizational activities, activities related to our initial public offering, maintaining our status as a public company, identifying and evaluating prospective target businesses, negotiating business combination terms, and preparing for the proposed transaction with Aiways Europe.

We expect to continue to incur significant costs in the pursuit of our acquisition plans. We cannot assure you that our plans to complete an Initial Business Combination will be successful.

Business Combination Deadline and Extension Amendments Since our Initial Public Offering, we have held multiple stockholder votes to extend the deadline by which we must complete an Initial Business Combination:

July 17, 2023: Stockholders approved an extension to April 18, 2024, with monthly deposits of $80,000 into the trust account. In connection with this vote, holders of 4,427,969 shares redeemed their shares for approximately $10.43 per share, leaving approximately $25 million in the trust account.

April 17, 2024: Stockholders approved an extension to January 18, 2025, with monthly deposits of $25,000. In connection with this vote, holders of 2,315,868 shares redeemed their shares for approximately $11.10 per share.

July 10, 2024: Stockholders approved an extension to October 18, 2025, with no further monthly deposit requirements. Holders of 3,200 shares redeemed their shares for approximately $11.08 per share.

October 15, 2025: Stockholders approved an extension to July 18, 2026, with no further monthly deposit requirements. Holders of 61,492 shares redeemed their shares for approximately $11.08 per share.

If we do not consummate an Initial Business Combination by July 18, 2026, we will be required to cease all operations except for the purpose of winding up, redeem the outstanding public shares and dissolve and liquidate.

Proposed Business Combination with Aiways Europe

On November 22, 2024, we entered into a Business Combination Agreement with EUROEV Holdings Limited ("Pubco"), Aiways Merger Sub, Inc., Aiways Automobile Europe GmbH ("Aiways Europe") and Aiways Tech Limited. The proposed transaction remains subject to stockholder approval, effectiveness of the registration statement, and the satisfaction or waiver of customary closing conditions. As disclosed in the Form F-4 filed on March 23, 2026, Pubco has applied to list its ordinary shares on Nasdaq under the symbol "EUEV" in connection with the closing.

Nasdaq Delisting

On January 22, 2025, the Nasdaq Hearings Panel determined to delist our securities from Nasdaq, and trading in our securities was suspended effective January 24, 2025. Nasdaq filed a Form 25 on July 11, 2025. The delisting has reduced the liquidity of our securities and may adversely affect our ability to complete financing transactions and consummate our Initial Business Combination.

Results of Operations

We have neither engaged in any operations nor generated any revenues to date. Our only activities from inception through December 31, 2025 were organizational activities and those necessary to prepare for our initial public offering, described below, and identifying a target for an Initial Business Combination. We do not expect to generate any operating revenues until after the completion of our Initial Business Combination. We generate non-operating income in the form of interest income on marketable securities held after the initial public offering. We incur expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses.

For the year ended December 31, 2025, we had a net loss of $887,178, which consisted of interest earned on marketable securities held in the trust account of $40,060 and interest earned on operating cash account of $2,105, offset by general and administrative expenses of $581,493 and franchise tax expense of $353,850.

For the year ended December 31, 2024, we had a net loss of $817,025, which consisted of interest earned on marketable securities held in the trust account of $582,231, fair value adjustment on convertible debt of $790, and interest earned on operating cash account of $3,307, offset by general and administrative expenses of $993,775, franchise tax expense of $58,412, loss on overpayment of franchise tax of $172,166, and provision for income taxes of $179,000.

Factors That May Adversely Affect Our Results of Operations

Our results of operations and our ability to complete an Initial Business Combination may be adversely affected by various factors that could cause economic uncertainty and volatility in the financial markets, many of which are beyond our control. Our business could be impacted by, among other things, downturns in the financial markets or in economic conditions, increases in oil prices, inflation, increases in interest rates, supply chain disruptions, declines in consumer confidence and spending, the ongoing effects of the COVID-19 pandemic, including resurgences and the emergence of new variants, and geopolitical instability, such as the military conflict in the Ukraine. We cannot at this time fully predict the likelihood of one or more of the above events, their duration or magnitude or the extent to which they may negatively impact our business and our ability to complete an Initial Business Combination.

Liquidity and Capital Resources

Initial Public Offering and Private Placement

On October 18, 2022, we consummated our Initial Public Offering of 6,000,000 units at $10.00 per unit, generating gross proceeds of $60,000,000. On October 21, 2022, we issued an additional 845,300 units upon the underwriters' partial exercise of the over-allotment option, generating additional gross proceeds of $8,453,000. Simultaneously with the closing of the Initial Public Offering and the over-allotment closing, the Sponsor purchased 371,500 private placement units for aggregate gross proceeds of $3,715,000.

Following the closing of the Initial Public Offering and partial exercise of the overallotment, an amount of $69,479,795 was placed in a Trust Account in the United States maintained by Continental Stock Transfer & Trust Company, as trustee.

Current Liquidity Position

For the year ended December 31, 2025, cash used in operating activities was $699,875, consisting of a net loss of $881,197, interest received on marketable securities held in the Trust Account of $40,060, a lease payment of $14,397, an increase in accounts payable and accrued expenses of $310,137, a decrease in franchise tax payable of $98,886, that were partially offset by the amortization expense of $27,997, interest expense of $1,331, plus a decrease in prepaid expenses of $1,200.

For the year ended December 31, 2024, cash used in operating activities was $1,081,935, consisting of a net loss of $817,025, interest received on marketable securities held in the Trust Account of $582,231, a lease payment of $20,777, a decrease in accounts payable and accrued expenses of $94,097 and the fair value of related party notes of $790, that were partially offset by the amortization expense of $17,736, interest expense of $123, franchise tax payable of $230,578, and income tax payable of $179,000 , plus a decrease in prepaid expenses of $5,548.

For the year ended December 31, 2025, cash provided by investing activities was $758,613, consisting of cash withdrawn from the Trust Account of $758,613.

For the year ended December 31, 2024, cash provided by investing activities was $25,492,597, consisting of cash withdrawn from the Trust Account of $26,045,551, that was partially offset by an investment of cash in Trust Account of $552,954.

For the year ended December 31, 2025, cash provided by financing activities was $249,965, consisting of cash paid for the redemption of Public Units of $681,347 and the repayment of borrowing due to related parties of $146,025, that were partially offset by cash proceeds from related party borrowing of $701,981 and proceeds from receipt of clawbacked income tax related to redemption of $344,506.

For the year ended December 31, 2024, cash used in financing activities was $24,353,604, consisting of cash paid for the redemption of Public Units of $25,747,589 and the repayment of borrowing due to related parties of $270,000, that were partially offset by cash proceeds from bridge loan of $1,476,882, a cash proceeds from related party borrowing of $187,103.

As of December 31, 2025, we had cash held in the trust account of $406,761. We intend to use substantially all of the funds held in the trust account, including any amounts representing interest earned in the trust account to complete our Initial Business Combination. We may withdraw interest to pay taxes. To the extent that our capital stock or debt is used, in whole or in part, as consideration to complete our Initial Business Combination, the remaining proceeds held in the trust account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.

As of December 31, 2025, the Company had $346,611 cash held outside of the trust account. We intend to pay the outstanding tax liabilities since the funds are basically from clawbacked income tax related to redemption overpayment, and should be characterized as withdraw from trust account.

Redemption Impact on Public Float and Cash Available In connection with the stockholder votes to extend the deadline to complete an Initial Business Combination, we have experienced significant redemptions of our public shares:

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July 2023: 4,427,969 shares redeemed

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April 2024: 2,315,868 shares redeemed

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July 2024: 3,200 shares redeemed

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October 2025: 61,492 shares redeemed

As a result, as of December 31, 2025, only 36,771 public shares remained outstanding, representing a reduction of over 99% of the public shares originally issued in the Initial Public Offering. These redemptions have substantially reduced the amount of cash available in the trust account and have significantly diminished our public float.

Trust Account Depletion

The aggregate amount held in the trust account has decreased materially as a result of the redemptions described above. As of December 31, 2025, the trust account balance was $406,761, compared to approximately $69.5 million immediately following the Initial Public Offering. While we have withdrawn an aggregate of $674,236 from the trust account to pay tax obligations, the primary driver of the reduction has been the payment of redemption proceeds to redeeming public stockholders.

Franchise and Income Tax Withdrawals from Trust Account

Since the completion of its IPO on October 14, 2022, and through December 31, 2025, the Company withdrew $672,843 from the Trust Account in total to pay its liabilities related to the income taxes and Delaware franchise taxes. Through December 31, 2025, the Company remitted $215,265, $236,286 and $216,450 to the Delaware franchise tax authorities to pay its outstanding Delaware franchise tax of the fiscal year 2022, 2023 and 2024, respectively, which resulted in $4,842 in excess of the total withdrawn from the Trust Account not remitted to the tax payments, but held in HUDA's operating account for upcoming tax payments, including the 2025 franchise tax, and not used for operating expenses. On December 31, 2025, HUDA regained the Certificate of Good Standing from the State of Delaware.

The Company continues to incur further tax liabilities and intends to cover such liabilities from the funds in its operating account, preserved funds for taxes and, if necessary, from the proceeds from the promissory note to Sponsor,

Related-Party Financing

To finance transaction costs and working capital needs, our Sponsor and its affiliates have provided financing through promissory notes and working capital advances. As of December 31, 2025, the principal amount outstanding under related-party promissory notes was $1,115,977. Under the Business Combination Agreement, obligations under Sponsor loans made prior to closing, up to an aggregate of $1.5 million, may be converted into Pubco ordinary shares at $10.00 per share at the closing of the proposed business combination.

Dependence on Transaction Closing

Our liquidity and capital resources are critically dependent upon the successful completion of the proposed Business Combination with Aiways Europe. If the Business Combination is not consummated by July 18, 2026, we will be required to cease all operations, redeem the outstanding public shares, and dissolve and liquidate. In that event, our rights will expire worthless, our founder shares will become worthless, and our public stockholders may receive less than the amount currently held in the trust account on a per-share basis.

Going Concern

We have until July 18, 2026 to consummate an Initial Business Combination. If we are unable to do so, we will be required to liquidate. Because we have no operating revenues, limited cash outside the trust account and a mandatory liquidation date if a business combination is not completed, management has determined that these conditions raise substantial doubt about our ability to continue as a going concern. No adjustments have been made to the carrying amounts of assets or liabilities should we be required to liquidate after the end of the combination period.

Off-Balance Sheet Arrangements

We did not have any off-balance sheet arrangements as of December 31, 2025.

Contractual Obligations

Other than our obligations under related-party promissory notes, a three-year operating lease for a Lexus vehicle effective October 29, 2024, and our deferred underwriting commissions and representative shares payable upon completion of our Initial Business Combination, we do not have material long-term debt, capital lease obligations or other long-term contractual commitments.

As of December 31, 2025, deferred underwriting commissions and representative shares totaled $2,723,060, consisting of cash commissions of $2,395,855 and representative shares issuable in connection with the Initial Public Offering.

Critical Accounting Estimates

The preparation of our financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Our significant accounting estimates include the valuation allowance for deferred tax assets.