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

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

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our audited financial statements and the notes related thereto which are included in "Item 8. Financial Statements and Supplementary Data" of this Annual Report on Form 10-K. Certain information contained in the discussion and analysis set forth below includes forward-looking statements. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those set forth under "Special Note Regarding Forward-Looking Statements," "Item 1A. Risk Factors" and elsewhere in this Annual Report on Form 10-K.

Overview

We are a blank check company incorporated as a Delaware corporation and formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. We are not presently engaged in, and we will not engage in, any operations until we consummate our business combination. We intend to effectuate our business combination using cash from the proceeds of our initial public offering, the private placement of the private shares, the private placement of the forward purchase shares, the proceeds of the sale of our shares in connection with our business combination (pursuant to forward purchase agreements or backstop agreements we may enter into following the closing of our initial public offering or otherwise), shares issued to the owners of the target, debt issued to bank or other lenders or the owners of the target, or a combination of the foregoing. We have no legally binding business combination agreement with any specific business combination target.

The issuance of additional shares in connection with a business combination to the owners of the target or other investors, including the forward purchase shares:

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may significantly dilute the equity interest of our public stockholders, which dilution would increase if the anti-dilution provisions in the Class B common stock resulted in the issuance of shares of Class A Common Stock on a greater than one-to-one basis upon conversion of the Class B common stock;

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may subordinate the rights of holders of our common stock if preferred stock is issued with rights senior to those afforded our common stock;

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could cause a change in control if a substantial number of shares of our common stock is issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors;

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may have the effect of delaying or preventing a change of control of us by diluting the stock ownership or voting rights of a person seeking to obtain control of us; and

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may adversely affect prevailing market prices for our Class A common stock and/or warrants.

Similarly, if we issue debt securities or otherwise incur significant debt to bank or other lenders or the owners of a target, it could result in:

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default and foreclosure on our assets if our operating revenues after a business combination are insufficient to repay our debt obligations;

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acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant;

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our immediate payment of all principal and accrued interest, if any, if the debt security is payable on demand;

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our inability to obtain necessary additional financing if the debt security contains covenants restricting our ability to obtain such financing while the debt security is outstanding;

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our inability to pay dividends on our common stock;

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using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our common stock if declared, our ability to pay expenses, make capital expenditures and acquisitions, and fund other general corporate purposes;

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limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate;

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increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation;

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limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, and execution of our strategy; and

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other disadvantages compared to our competitors who have less debt.

Recent Developments

Stockholder Meetings

At an annual meeting on August 6, 2025, the stockholders of the Company approved amendments (the "August 2025 Amendments") to the Company's Amended and Restated Certificate of Incorporation to extend the Combination Period by one month each time from August 12, 2025 to August 12, 2026, or such earlier date as determined by the Board in its sole discretion, unless the closing of a Business Combination shall have occurred prior thereto. (See Note 1 of Notes to Financial Statements). The Company is required to deposit $17,470 to the trust account with respect to each such monthly extension. In connection with the August 2025 Amendments, 571,053 of the public shares were tendered for redemption for a total redemption price of $7,019,660 or approximately $12.29 per share.

Promissory Notes

On May 9, 2023, the Company issued a convertible promissory note to the sponsor for $1,725,000 in connection with the sponsor's funding of the Initial Extension (the "Initial Extension Loan"), and on May 12, 2023, the Company issued a convertible promissory note to the Sponsor for $775,000 in connection with the Sponsor's funding of the Company's working capital needs (the "Initial Working Capital Loan").

In August 2023, the Company issued to the Sponsor a convertible promissory note in the amount of $625,000 (the "Additional Extension Loan") in connection with the Sponsor's funding of an extension deposit to the Trust Account. In August 2023 the Company issued a convertible promissory note in the principal amount of $710,000 (the "Additional Working Capital Loan") to the Sponsor to provide the Company with additional working capital, of which $110,000 was funded on August 10, 2023 and $600,000 is available for future borrowings.

Together, the Initial Extension Loan, the Initial Working Capital Loan, the Additional Extension Loan, and the Additional Working Capital Loan are the Convertible Promissory Notes.

In December 2023, April 2024, June 2024, August 2024, September 2024, December 2024, January 2025, March 2025, June 2025, August 2025 and December 2025, the Company issued non-convertible promissory notes (together the "Non-convertible Promissory Notes") to Achilles Capital AB (formerly known as DDM Debt AB) ("Achilles"), an affiliate of the Sponsor, with an aggregate value of $4,450,000. The proceeds of the borrowings under the Non-Convertible Promissory Notes were used to provide the Company with general working capital.

None of the Convertible Promissory Notes or the Non-convertible Promissory Notes bear interest and are due upon consummation of a Business Combination. If the Company completes a Business Combination, the Company would expect to repay the Convertible Promissory Notes and the Non-convertible Promissory Notes from funds that are released to the Company from the Trust Account. At the option of the holder of the Convertible Promissory Notes, the holder may convert all or a portion of the Convertible Promissory Notes into Private Shares at a price of $10.00 per Private Share, which Private Shares will be identical to the Private Shares described herein (Note 5 of Notes to Financial Statements).

Trust Account Funding

Since May 8, 2023 when the Company announced that its Board of Directors elected to extend the date by which the Company has to consummate a Business Combination through the date of this filing, the Company has deposited an aggregate of $3,603,504 to the Trust Account to extend the Combination Period to April 12, 2026.

Results of Operations

We have neither engaged in any operations nor generated any revenues to date. Our only activities from December 27, 2019 (inception) through December 31, 2025 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 marketable securities 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 year ended December 31, 2025, we had a net loss of $731,544, which consisted of general and administrative support fees of $1,058,408 and federal income taxes of $71,472, partially offset by interest earned on marketable securities held in trust account of $398,336.

For the year ended December 31, 2024, we had a net loss of $206,537, which consisted of general and administrative support fees of $1,454,382 and provision for income taxes of $312,612, partially offset by interest earned on marketable securities held in Trust Account of $1,560,457.

Liquidity, Capital Resources and Going Concern

As of December 31, 2025, the Company had cash of $337,755 not held in the Trust Account and a working capital deficit of $8,152,366.

For the year ended December 31, 2025, cash used in operating activities was $1,095,356. Net loss of $731,544 was affected by interest earned on marketable securities held in the Trust Account of $397,877 and deferred taxes of $5,757. Changes in operating assets and liabilities provided $39,822 of cash for operating activities. Cash provided by investing activities was $6,730,183 which includes investment of cash to the Trust Account of $369,534, cash withdrawn from Trust Account in connection with redemptions of $7,019,660 and withdrawals from trust account to pay taxes of $80,057. Cash used in financing activities includes $1,450,000 of proceeds from the promissory notes issued to a related party and $7,019,660 paid to redeeming stockholders.

For the year ended December 31, 2024, cash used in operating activities was $3,030,748. Net loss of $206,537 was affected by interest earned on marketable securities held in Trust Account of $1,536,233 and deferred taxes payable of $27,563. Changes in operating assets and liabilities used $1,260,415 of cash for operating activities. Cash provided by investing activities was $29,188,023 including $528,161 withdrawn from the Trust Account to pay taxes, $29,491,422 cash withdrawn from trust account in connection with redemptions partially offset by $831,560 of deposits to the Trust Account. Cash used in financing activities includes $1,300,000 of proceeds from the promissory notes to related party partially offset by $29,491,422 for redemption of common stock

As of December 31, 2025, we had marketable securities held in the Trust Account of $5,532,541 consisting of money market funds which are invested in U.S. Treasury securities. Interest income on the balance in the Trust Account may be used by us to pay taxes. For the period ended December 31, 2025, we withdrew $80,057 of interest earned on the Trust Account for the payment of franchise and income taxes.

We intend to use substantially all of the funds held in the Trust Account, including any amounts representing interest earned on the Trust Account (less taxes payable), to complete our Business Combination. To the extent that our capital stock 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.

The Company has entered into the Convertible Promissory Notes and Non-convertible Promissory Notes and as of December 31, 2025 borrowed $7,685,000 to be used to extend the Combination Period and for general working capital purposes. The aggregate principal amounts outstanding under Convertible and Non-Convertible Promissory Notes issued to the Sponsor and Achilles are $3,235,000 and $4,450,000, respectively.

The Company currently has until April 12, 2026 or the end of any further monthly extension period approved by the Board through August 12, 2026 to consummate a Business Combination. It is uncertain that the Company will be able to consummate a Business Combination by April 12, 2026 or such later date to which the business combination period may be extended. If a Business Combination is not consummated by April 12, 2026 or during any further extension period, there will be a mandatory liquidation and subsequent dissolution.

In connection with the Company's assessment of going concern considerations in accordance with Financial Accounting Standard Board's Accounting Standards Update ("ASU") 2014-15, "Disclosures of Uncertainties about an Entity's Ability to Continue as a Going Concern," management has determined that (i) uncertainty with respect to the Company's ability to obtain the cash needed to fund professional fees and other expenses related to its target search activities, SEC reports, tax returns, trust and stock transfer administration and other business and corporate activities, and trust deposits required for further extensions to the Combination Period, and (ii) the mandatory liquidation and subsequent dissolution, should the Company be unable to complete a Business Combination by the end of the Combination Period, raises 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 April 12, 2026 or at the end of any further extension period.

Off-Balance Sheet Arrangements

We have no obligations, assets or liabilities, which would be considered off-balance sheet arrangements as of December 31, 2025. 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 pay the Sponsor a total of $10,000 per month for administrative support services and outstanding promissory notes to the Sponsor and its affiliates in the aggregate amount of $7,685,000 as of December 31, 2025. We began incurring the administrative support services fees on February 8, 2022 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 underwriting discount of 3.5% of the gross proceeds of the IPO and exercise of the over-allotment option, or $6,037,500, upon the completion of the Company's business combination. The Company's former legal counsel agreed to defer legal fees in the amount of $175,000, which is payable (without interest) upon and concurrently with the completion of a business combination.

Critical Accounting Policies

We describe our significant accounting policies in Note 2 - Summary of Significant Accounting Policies, of the Notes to Financial Statements included in this report. Our financial statements have been prepared in accordance with U.S. GAAP. Certain of our accounting policies require that the Company's management apply significant judgments in defining the appropriate assumptions integral to financial estimates. On an ongoing basis, the Company's management reviews the accounting policies, assumptions, estimates and judgments to ensure that our financial statements are presented fairly and in accordance with U.S. GAAP. Judgments are based on historical experience, terms of existing contracts, industry trends and information available from outside sources, as appropriate. However, by their nature, judgments are subject to an inherent degree of uncertainty, and, therefore, actual results could differ from our estimates.