Quarterly Report for Quarter Ending March 31, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations

References in this report (the "Quarterly Report") to "we," "us" or the "Company" refer to Jaws Mustang Acquisition Corporation References to our "management" or our "management team" refer to our officers and directors, and references to the "Sponsor" refer to Mustang Sponsor LLC. The following discussion and analysis of the Company's financial condition and results of operations should be read in conjunction with the unaudited condensed financial statements and the notes thereto contained elsewhere in this Quarterly Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.

Special Note Regarding Forward-Looking Statements

This Quarterly Report includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Exchange Act that are not historical facts and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements, other than statements of historical fact included in this Form 10-Q including, without limitation, statements in this "Management's Discussion and Analysis of Financial Condition and Results of Operations" regarding the completion of the proposed Business Combination, the Company's financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. Words such as "expect," "believe," "anticipate," "intend," "estimate," "seek" and variations and similar words and expressions are intended to identify such forward-looking statements. Such forward-looking statements relate to future events or future performance, but reflect management's current beliefs, based on information currently available. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements, including that the conditions of the proposed Business Combination are not satisfied. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the Risk Factors section of our Annual Report on Form 10-K filed with the SEC on March 31, 2026. Our 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, we disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.

Overview

We are a blank check company incorporated in the Cayman Islands on October 19, 2020, formed for the purpose of effecting a merger, amalgamation, share exchange, asset acquisition, share purchase, reorganization or other similar Business Combination with one or more businesses. We intend to effectuate our Business Combination using cash derived from the proceeds of the initial public offering and the sale of the private placement warrants, our shares, debt or a combination of cash, shares and debt.

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

On February 2, 2024, we held an extension meeting where the Termination Date was extended from February 4, 2024 to February 4, 2025 and we were authorized to, without another shareholder vote, elect to extend the Termination Date to consummate a business combination on a monthly basis for up to eleven times by an additional one month each time after the Articles Extension Date, by resolution of our board of directors each time accompanied by a deposit into the trust account in the amount of $25,000. In connection with the extension vote, 698,321 Class A ordinary shares were redeemed for an aggregate redemption amount of $7,662,571.

On February 5, 2024, we received a written notice from the New York Stock Exchange American LLC ("NYSE American") indicating that the staff of NYSE American (the "Staff") has determined to commence proceedings to delist our Units, Class A Ordinary Shares and Warrants (collectively, the "Securities") pursuant to Sections 119(b) and 119(f) of the NYSE American Company Guide because we failed to consummate a business combination (i) within 36 months of the effectiveness of our initial public offering registration statement or (ii) such shorter period that we specified in our registration statement. NYSE American completed the delisting by filing a Notification of Removal from Listing and/or Registration under Section 12(b) of the Exchange Act, on Form 25 with the SEC on November 1, 2024.

We currently have our Securities quoted on the OTCID Basic Market. We remain subject to the periodic reporting requirements of the Exchange Act.

The board approved draws of an aggregate of $225,000 (the "Extension Funds") pursuant to the March 2024 Note and the October 2024 Note (each as defined below), which are Extension Funds we subsequently deposited into our trust account for our public stockholders. These deposits enabled us to extend the date by which we must complete our initial business combination from March 4, 2024 to December 4, 2024 (the "Extensions"). The Extensions are the first nine of eleven one-month extensions permitted under our amended and restated memorandum and articles of association and provide us with additional time to complete our initial business combination.

On November 26, 2024, we held an extraordinary general meeting of shareholders (A) to amend, by way of special resolution, our amended and restated memorandum and articles of association to extend the date termination date by which we have to consummate a business combination from December 4, 2024 to January 4, 2025 (the "Charter Extension Date") and to allow us, without another shareholder vote, to elect to extend the Termination Date to consummate a business combination on a monthly basis for up to twenty-three times by an additional one month each time after the Charter Extension Date, by resolution of our board of directors, if requested by the sponsor, and upon five days' advance notice prior to the applicable Termination Date, until December 4, 2026, or a total of up to twenty-three months after the Charter Extension Date, unless the closing of a business combination shall have occurred prior thereto. In connection with the vote to approve the Extension Amendment Proposal, the holders of 1,315,813 Class A ordinary shares properly exercised their right to redeem their shares for cash at a redemption price of approximately $11.48 per share, for an aggregate redemption amount of approximately $15,111,008. Following the extraordinary general meeting of shareholders, the Termination Date was extended seventeen times on a monthly basis until June 4, 2026.

Results of Operations

We have neither engaged in any operations nor generated any revenues to date. Our only activities through March 31, 2026 were organizational activities, those necessary to prepare for the initial public offering, described below, and identifying a target company for a Business Combination. We do not expect to generate any operating revenues until after the completion of our Business Combination. We generate non-operating income in the form of interest income on cash and investments held in the trust account. 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 three months ended March 31, 2026, we had a net income of $269,426, which consisted of change in fair value warrant liability of $372,250, general and administrative expenses of $108,814, partially offset by interest earned on cash held in Trust Account of $5,990.

For the three months ended March 31, 2025, we had a net loss of $507,977, which consisted of change in fair value of warrant liabilities of $372,250 and general and administrative expenses of $142,551 partially offset by interest earned on cash held in the Trust Account of $6,824.

Liquidity and Capital Resources

On February 4, 2021, we consummated our initial public offering of 103,500,000 Units which includes full exercise by the underwriter of its over-allotment option in the amount of 13,500,000 Units, at $10.00 per Unit, generating gross proceeds of $1,035,000,000. Simultaneously with the closing of our initial public offering, we consummated the sale of 11,350,000 private placement warrants at a price of $2.00 per private placement warrant in a private placement to our sponsor, generating gross proceeds of $22,700,000.

Following our initial public offering, the full exercise of the over-allotment option, and the sale of the private placement warrants, a total of $1,035,000,000 was placed in the trust account. We incurred $57,010,008 in costs related to our initial public offering, including $19,800,000 of underwriting fees, net of $900,000 reimbursed from the underwriters, $36,225,000 of deferred underwriting fees and $995,008 of other costs.

For the three months ended March 31, 2026, cash used in operating activities was $68,076. Net income of $269,426 was affected by change in fair value of warrants of $372,250 and interest earned on cash held in trust account of $5,990. Changes in operating assets and liabilities provided $40,738 of cash for operating activities.

For the three months ended March 31, 2025, cash used in operating activities was $165,902. Net loss of $507,977 was affected by change in fair value of warrant liabilities of $372,250 and interest earned on cash held in the Trust Account of $6,824. Changes in operating assets and liabilities used $23,351 of cash for operating activities.

As of March 31, 2026, we had cash held in the trust account of $1,067,566. We may withdraw interest from the trust account to pay taxes, if any. We intend to use substantially all of the funds held in the trust account, including any amounts representing interest earned on the trust account, to complete our Business Combination. To the extent that our share capital or debt is used, in whole or in part, as consideration to complete our Business Combination, the remaining proceeds held in the trust account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies. For the three months ended March 31, we did not withdraw any amount from trust account in connection with the redemption.

The board approved draws of an aggregate of $225,000 (the "Extension Funds") pursuant to the March 2024 Note and the October 2024 Note, which are Extension Funds the Company subsequently deposited into the Company's Trust Account for its public stockholders. These deposits enabled the Company to extend the date by which it must complete its initial business combination from March 4, 2024 to December 4, 2024 (the "Extensions"). The Extensions are the first nine of eleven one-month extensions permitted under the Company's Memorandum and Articles of Association and provide the Company with additional time to complete its initial business combination.

On November 26, 2024, the Company held an extraordinary general meeting of shareholders (A) to amend, by way of special resolution, the Company's Memorandum and Articles of Association to extend the date termination date by which the Company has to consummate a business combination from December 4, 2024 to January 4, 2025 and to allow the Company, without another shareholder vote, to elect to extend the Termination Date to consummate a business combination on a monthly basis for up to twenty-three times by an additional one month each time after the Charter Extension Date, by resolution of the Company's board of directors, if requested by the Sponsor, and upon five days' advance notice prior to the applicable Termination Date, until December 4, 2026, or a total of up to twenty-three months after the Charter Extension Date, unless the closing of a business combination shall have occurred prior thereto. In connection with the vote to approve the Extension Amendment Proposal, the holders of 1,315,813 Class A ordinary shares properly exercised their right to redeem their shares for cash at a redemption price of approximately $11.48 per share, for an aggregate redemption amount of approximately $15,111,008. Following the extraordinary general meeting, the Termination Date was extended seventeen times on a monthly basis until June 4, 2026.

As of March 31, 2026, we had cash of $428,524. We intend to use the funds held outside the trust account primarily to identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from the offices, plants or similar locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses, and structure, negotiate and complete a Business Combination.

In order to fund working capital deficiencies or finance transaction costs in connection with a Business Combination, our sponsor, or certain of our officers and directors or their affiliates may, but are not obligated to, loan us funds as may be required. If we complete a Business Combination, we would repay such loaned amounts. In the event that a Business Combination does not close, we may use a portion of the working capital held outside the trust account to repay such loaned amounts but no proceeds from our trust account would be used for such repayment. Up to $1,500,000 of such loans may be convertible into warrants at a price of $2.00 per warrant, at the option of the lender. The warrants would be identical to the private placement warrants. As of March 31, 2026 and December 31, 2025, there was $500,000 outstanding under the working capital loans.

On August 8, 2023, we issued a promissory note (the "August 2023 Note") to our sponsor. The August 2023 Note provides up to $500,000 for withdrawal and does not incur interest. The August 2023 Note is due upon the earlier of the closing of a Business Combination or wind up. We borrowed the full $500,000 on August 8, 2023 and no further borrowings are available under the August 2023 Note as of December 31, 2025. As of March 31, 2026 and December 31, 2025, there was $500,000 outstanding under the August 2023 Note.

On March 13, 2024, we issued a promissory note (the "March 2024 Note") to our sponsor. The March 2024 Note provides up to $500,000 for withdrawal and does not incur interest. We borrowed $125,000 on March 14, 2024 and an additional $235,000 on March 28, 2024. The March 2024 Note is due upon the earlier of the closing of a business combination or wind up. On April 15, 2024, our sponsor assigned the March 2024 Note, and all of its right, title, interest in and obligation under the March 2024 Note, to Starwood Capital Group Management, L.L.C. We borrowed an additional $140,000 on July 22, 2024. As of March 31, 2026 and December 31, 2025, there was $500,000 outstanding under the March 2024 Note.

On October 31, 2024, we issued a promissory note (the "October 2024 Note") to Starwood Capital Group Management, L.L.C. The October 2024 Note provides up to $400,000 for withdrawal and does not incur interest. We borrowed $400,000 on October 31, 2024. The October 2024 Note is due upon the earlier of the closing of a business combination or a wind up. As of March 31, 2026 and December 31, 2025, there was $400,000 outstanding under the October 2024 Note.

On July 11, 2025, we issued a promissory note to our sponsor in the principal amount of $150,000 (the "July 11th Note"). The July 11th Note is non-interest bearing and due upon the completion of a business combination. In the event that we do not consummate a Business Combination, the July 11th Note will be repaid only from funds held outside of the trust account or will be forfeited, eliminated or otherwise forgiven. As of March 31, 2026 and December 31, 2025, there were amounts of $150,000 outstanding under the July 11th Note.

On July 21, 2025, we issued a promissory note to Madison Grose in the principal amount of $272,000 (the "July 21st Note"). The July 21st Note is non-interest bearing and due upon the completion of a business combination. In the event that we do not consummate a Business Combination, the July 21st Note will be repaid only from funds held outside of the trust account or will be forfeited, eliminated or otherwise forgiven. As of March 31, 2026 and December 31, 2025, there were amounts of $272,000 outstanding under the July 21st Note.

On February 23, 2026, the Company issued a promissory note with the Sponsor (the "February 2026 Note"). The February 2026 Note provides up to $435,771 for withdrawal and does not incur interest. The February 2026 Note is due upon the earlier of the closing of a Business Combination or wind up. As of March 31, 2026 and December 31, 2025, there were amounts of $272,000 and $0 outstanding under the July 21st Note, respectively.

Going Concern

If the Business Combination is not consummated, we will need to raise additional capital through loans on additional investments from its sponsor, shareholders, officers, directors, or third parties. Our officers, directors and sponsor may, but are not obligated to, loan us funds, from time to time or at any time, in whatever amount they deem reasonable in their sole discretion, to meet our working capital needs. Accordingly, we may not be able to obtain additional financing. If we are unable to raise additional capital, it may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing operations, suspending the pursuit of a potential transaction, and reducing overhead expenses. We cannot provide any assurance that new financing will be available to it on commercially acceptable terms, if at all. These conditions raise substantial doubt about our ability to continue as a going concern through one year from the date of these unaudited condensed financial statements if a Business Combination is not consummated. These unaudited condensed financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should we be unable to continue as a going concern.

In connection with the Company's assessment of going concern considerations in accordance with Accounting Standards Codification ("ASC") 205-40 "Going Concern," the Company has up to December 4, 2026, assuming all extensions are exercised, to consummate a Business Combination. It is uncertain that the Company will be able to consummate a Business Combination by this time. If a Business Combination is not consummated by this date, there will be a mandatory liquidation and subsequent dissolution of the Company. Management has determined that the liquidity condition and mandatory liquidation raise substantial doubt about the Company's ability to continue as a going concern. No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to liquidate after December 4, 2026, assuming all extensions are exercised. Management intends to complete a Business Combination prior to the mandatory liquidation date.

Off-Balance Sheet Arrangements

We have no obligations, assets or liabilities, which would be considered off-balance sheet arrangements as of March 31, 2026. We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements. We have not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any non-financial assets.

Contractual Obligations

We do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities, other than an agreement to pay an affiliate of one of our executive officers a monthly fee of $10,000 for office space, utilities and secretarial and administrative services. We began incurring these fees on February 1, 2021 and will continue to incur these fees monthly until the earlier of the completion of the Business Combination and our liquidation.

The underwriters are entitled to a deferred fee of $0.35 per Unit, or $36,225,000 in the aggregate. The deferred fee will become payable to the underwriters from the amounts held in the trust account solely in the event that the Company completes a Business Combination, subject to the terms of the underwriting agreement.

On February 14, 2023 and February 16, 2023, the Company was notified by BofA Securities, Inc. and Goldman Sachs & Co. LLC, respectively, waiving their rights to their portion of the deferred underwriting fee. We reduced the deferred underwriting fee payable on the condensed balance sheets by $21,735,000, as a result $467,291 is reflected on our unaudited condensed statements of operations for the amounts allocated in connection with our warrants at the initial public offering and $21,267,709 was charged to accumulated deficit for the portion allocated to Class A ordinary shares at the initial public offering.

On August 14, 2023, we were notified by Credit Suisse Securities (USA) LLC, they were waiving their rights to their portion of the deferred underwriting fee. We reduced the deferred underwriting fee payable on the condensed balance sheets by $14,490,000, as a result $311,527 is reflected on our unaudited condensed statements of operations for the amounts allocated in connection with our warrants at the initial public offering and $14,178,473 was charged to accumulated deficit for the portion allocated to Class A ordinary shares at the initial public offering.

Critical Accounting Policies and Estimates

The preparation of the unaudited condensed financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the unaudited condensed financial statements, and income and expenses during the periods reported. Actual results could materially differ from those estimates. We have not identified any critical accounting estimates. We have identified the following critical accounting policies:

Ordinary Shares Subject to Possible Redemption

We account for our ordinary shares subject to possible conversion in accordance with the guidance in ASC Topic 480, "Distinguishing Liabilities from Equity." Ordinary shares subject to mandatory redemption are classified as a liability instrument and measured at fair value. Conditionally redeemable ordinary shares (including ordinary shares that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within our control) are classified as temporary equity. At all other times, ordinary shares are classified as shareholders' equity (deficit). Our ordinary shares feature certain redemption rights that are considered to be outside of our control and subject to occurrence of uncertain future events. Accordingly, as of March 31, 2026 and December 31, 2025, ordinary shares subject to possible redemption are presented at redemption value as temporary equity, outside of the shareholders' deficit section of our condensed balance sheets.

We recognize changes in redemption value immediately as they occur and adjust the carrying value of redeemable ordinary shares to equal the redemption value at the end of each reporting period. Increases or decreases in the carrying amount of the redeemable ordinary shares are affected by charges against additional paid-in capital (to the extent available) and accumulated deficit.

Net Income (Loss) per Ordinary Share

Net income (loss) per ordinary share is computed by dividing the net income (loss) by the weighted average number of ordinary shares outstanding during the period. This presentation contemplates a Business Combination as the most likely outcome, in which case, both classes of shares share pro rata in the income (loss) of the Company. Accretion associated with the redeemable shares of Class A ordinary shares is excluded from the earnings per share as the redemption value approximates fair value.

Derivative Warrant Liabilities

We do not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. We evaluate all of our financial instruments, including issued Class A ordinary share purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives, pursuant to ASC 480 and ASC 815-15. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period.

We issued 25,875,000 public warrants to investors in our initial public offering and issued 11,350,000 private placement warrants. All of our outstanding warrants are recognized as derivative liabilities in accordance with ASC 815-40. Accordingly, we recognize the warrant instruments as liabilities at fair value and adjust the instruments to fair value at each reporting period. The liabilities are subject to re-measurement at each condensed balance sheet date until exercised, and any change in fair value is recognized in our unaudited condensed statements of operations. Our Public Warrants are values based on quotes market prices and are considered a Level 1 liability. Our private placement warrants are classified as a Level 2 liability due to the similarities to our Public Warrants and are valued using the quote market prices of the Public Warrants.

Recent Accounting Standards

Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on our unaudited condensed financial statements.

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