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

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

References in this quarterly report on Form 10-Q (the "Quarterly Report") to "we," "us" "our" or "the Company" refer to Starlink AI Acquisition Corporation, a blank check company newly incorporated as a Cayman Islands exempted company for the purpose of entering into a merger, share exchange, asset acquisition, share purchase, recapitalization, reorganization or similar business combination with one or more businesses or entities. References to our "management" or our "management team" refer to our officers and directors, and references to the "Sponsor" refer to JKapital Ltd., a British Virgin Islands business company. 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, as amended (the "Securities Act") and Section 21E of the Securities Exchange Act of 1934 (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 Quarterly Report 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 "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. 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 the Company's final prospectus filed with the U.S. Securities and Exchange Commission (the "SEC") pursuant to Rule 424(b)(4) on May 7, 2026 (the "Final Prospectus") in connection with its initial public offering (the "IPO"). The Company's filings can be accessed on the EDGAR section of the SEC's website at www.sec.gov. Except as expressly required by applicable securities law, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.

Overview

We are a blank check company incorporated as a Cayman Islands exempted company on September 29, 2025, for the purpose of entering into a merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization or other similar business combination with one or more businesses or entities. Our efforts to identify a prospective target business will not be limited to a particular industry or geographic region. We intend to utilize cash derived from the proceeds of our IPO, the sale of the Private Units (as defined below), our securities, debt or a combination of cash, securities and debt. Our Sponsor is JKapital Ltd.

The registration statement on Form S-1 for our IPO was declared effective on May 7, 2026. On May 11, 2026, we consummated our IPO of 10,000,000 units (the "Units," each a "Unit"). Each Unit consists of one ordinary share, par value US$0.0001 per share, of the Company (each an "Ordinary Share," collectively the "Ordinary Shares") and one right (each a "Right"), with each Right entitling the holder to receive one-fourth of one Ordinary Share upon the consummation of the Company's initial business combination. The Units were sold at a price of $10.00 per Unit, generating gross proceeds of $100,000,000 to the Company. The underwriters were granted a 45-day option from the date of the Final Prospectus to purchase up to an additional 1,500,000 Units to cover over-allotments, if any.

Simultaneously with the consummation of the IPO, we consummated the private placement (the "Private Placement") of 221,500 Units to the Sponsor (each, a "Private Unit" and collectively, the "Private Units"), at a price of $10.00 per Unit, generating gross proceeds of $2,215,000.

On May 20, 2026, the underwriters partially exercised the over-allotment option to purchase 500,000 Units (the "Option Units") at a price of $10.00 per Unit. On May 27, 2026, we completed the sale of the Option Units to the underwriters, generating gross proceeds of $5,000,000. Simultaneously with the closing of the Over-Allotment Units, we consummated the second closing of the Private Placement, resulting in the purchase of an aggregate of additional 4,750 Private Units by the Sponsor, at a price of $10.00 per Unit, generating gross proceeds of $47,500.

Following the closing of the IPO, the partial exercise of the over-allotment option and the Private Placement, a total of $105,525,000 ($10.05 per Unit) was held in a U.S.-based trust account maintained by Continental Stock Transfer & Trust Company, acting as trustee (the "Trust Account"). We incurred total transaction costs of $5,000,995, consisting of $472,500 upfront underwriting commission paid in cash at the closing date of the IPO and the partial exercise of the over-allotment option, $3,675,000 deferred underwriting commission (representing 3.5% of the proceeds remaining in the Trust Account immediately prior to the closing of the initial Business Combination, assuming no redemptions of Public Shares), and $853,495 of legal and other offering costs.

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.

Our Amended and Restated Memorandum and Articles of Association provide that we will have until 12 months from the closing of the IPO (or 15 months in the event that a definitive business combination agreement has been publicly announced during such 12-month period), or until such earlier liquidation date as our board of directors may approve, to consummate our initial business combination. We refer to the time period we have to complete an initial business combination, as it may be extended as described above, as the "completion window." If we have not completed our initial business combination within the completion window, we will: (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but not 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 (net of funds withdrawn to pay our taxes and up to $100,000 of interest to pay dissolution expenses), divided by the number of then issued and outstanding public shares, which redemption will completely extinguish public shareholders' rights as shareholders (including the right to receive further liquidating distributions, if any); and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our board of directors, liquidate and dissolve, subject in each case to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law.

Results of Operations

We have neither engaged in any operations nor generated any revenues to date. Our only activities from September 29, 2025 (inception) through July 31, 2026 were organizational activities, those necessary to prepare for the IPO, described below, and subsequent to the IPO, identifying a target company for an initial 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 three months ended July 31, 2026, we had net income of $707,825, which consisted of interest income of $847,992, offset by general and administrative expenses of $140,167.

For the six months ended July 31, 2026, we had net income of $674,969, which consisted of interest income of $847,992, offset by general and administrative expenses of $173,023.

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, public health considerations, and geopolitical instability. We cannot at this time 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.

Going Concern Consideration

As of July 31, 2026, the Company had $545,960 in cash and working capital of $578,305. The Company's liquidity needs prior to the consummation of the IPO had been satisfied through a $300,000 promissory note and advances from the Sponsor.

We intend to use substantially all of the funds held in the Trust Account, including interest earned on the Trust Account (net of taxes payable and less up to $100,000 of interest to pay liquidation and dissolution expenses), to complete our initial business combination. To the extent that our share capital 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. 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 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.

In order to fund working capital deficiencies or finance transaction costs in connection with an initial business combination, the 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 an initial business combination, we would repay such loaned amounts. In the event that an 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 $1,000,000 of such working capital loans may be convertible into units upon the consummation of our initial business combination at a price of $10.00 per unit at the option of the lender. The units would be identical to the Private Units.

The Company has incurred and expects to continue to incur significant costs in pursuit of the consummation of an initial Business Combination. In addition, the Company currently has until May 11, 2027 (unless the Company extends such period) to consummate the initial Business Combination. If the Company does not complete a Business Combination within the prescribed timeline, the Company will trigger an automatic winding up, dissolution and liquidation pursuant to the terms of the Amended and Restated Memorandum and Articles of Association. In connection with the Company's assessment of going concern considerations in accordance with Financial Accounting Standard Board's Accounting Standards "Codification Subtopic 205-40, Presentation of Financial Statements - Going Concern", the Company has determined that it has incurred and expects to continue to incur significant costs in pursuit of its acquisition plans. There is no assurance that the Company's plans to raise capital or to consummate a Business Combination will be successful within the Completion Window. The Company lacks the financial resources it needs to sustain operations for a reasonable period of time, which is considered to be one year from the date of the issuance of the financial statements. Therefore, management has determined that these conditions raise substantial doubt about the Company's ability to continue as a going concern until the earlier of the consummation of the Business Combination or the date the Company is required to liquidate. The financial statements do not include any adjustments that might result from the Company's inability to continue as a going concern.

Commitments and Contractual Obligations

Administrative Services Agreement

The Company entered into an Administrative Services Agreement with the Sponsor, effective from the date of the Final Prospectus through the earlier of the consummation by the Company of an initial business combination or the Company's liquidation, to pay the Sponsor a total of $10,000 per month for office space and administrative and support services.

Underwriting Agreement

We granted the underwriters a 45-day option following the date of the Final 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. On May 20, 2026, the underwriters partially exercised the over-allotment option to purchase the Option Units at $10.00 per unit. The closing of the issuance and sale of the Option Units occurred on May 27, 2026. As a result of the partial exercise of the underwriters' over-allotment option, 125,000 out of the total 375,000 ordinary shares held by the Sponsor were no longer subject to forfeiture. The remaining 250,000 shares were subsequently forfeited for no consideration after the expiration of the over-allotment option in June 2026.

The underwriters were entitled to a cash underwriting discount of 0.45% of the gross proceeds of the IPO and over-allotment, or $472,500 which was paid upon the closing of the IPO and the underwriters' partial exercise of the over-allotment option. The underwriters were also entitled to an aggregate of 150,000 ordinary shares ("Representative Shares"), as part of representative compensation, which were issued upon the closing of the IPO. Finally, a deferred underwriting discount of 3.5% of the proceeds remaining in the Trust Account immediately prior to the closing of the initial Business Combination will be payable in cash upon the closing of the initial Business Combination, or $3,675,000 assuming no redemptions of Public Shares.

Representative Shares

The Representative Shares have the same terms as any founder shares issued as part of the IPO and shall be subject to a 180-day lock-up from the closing of the IPO. The Representative Shares provide customary anti-dilution provisions (for stock dividends and splits and recapitalizations) consistent with FINRA Rule 5110, and further, the number of shares underlying the Representative Shares shall be reduced, if necessary, to comply with FINRA rules or regulations.

Representative Shares have been deemed compensation by FINRA and are therefore subject to a lock-up for a period of 180 days immediately following the date of the effectiveness of the registration statement relating to the IPO pursuant to Rule 5110(e)(1) of the FINRA Manual. Pursuant to FINRA Rule 5110(e)(1), these securities will not be sold during the offering, or sold, transferred, assigned, pledged, or hypothecated, or be the subject of any hedging, short sale, derivative, put or call transaction that would result in the economic disposition of the securities by any person for a period of 180 days immediately following the commencement of sales in the IPO, subject to exceptions pursuant to Rule 5110(e)(2).

Off-Balance Sheet Arrangements

We have no obligations, assets or liabilities, which would be considered off-balance sheet arrangements as of July 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.

Critical Accounting Policies and Estimates

We prepare our unaudited financial statements in accordance with accounting principles generally accepted in the United States of America. The preparation of unaudited financial statements also requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, costs and expenses and related disclosures. Making estimates requires management to exercise significant judgement. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. 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 financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, actual results could differ significantly from the estimates made by our management. As of July 31, 2026, we have not identified any critical accounting policies and estimates.

Recent Accounting Pronouncements

In December 2023, the FASB issued ASU 2023-09, Income taxes (Topic 740): Improvements to Income Tax Disclosure ("ASU 2023-09"), which enhances the transparency and usefulness of income tax disclosures. ASU 2023-09 will be effective for fiscal years beginning after December 15, 2024. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. The Company adopted this guidance on February 1, 2026 and there was no significant impact.

The Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the Company's unaudited condensed financial statements.