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 the Company's financial condition and results of operations should be read in conjunction with the financial statements and the notes thereto contained elsewhere in this Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties and should be read in conjunction with the disclosures and information contained in "Cautionary Note Regarding Forward-Looking Statements" and "Risk Factors" in this Report.

Overview

We were incorporated as a Delaware corporation on November 3, 2021 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 intend to effectuate our business combination using cash from the proceeds of the exercise of our SPARs and the private placements of the Sponsor Shares, Sponsor Warrants, Forward Purchase Shares, or a combination of cash, stock and debt.

The issuance of additional shares in a business combination, including the Forward Purchase Shares:

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

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We expect to continue to incur significant costs in the pursuit of our acquisition plans. We cannot assure you that our plans to raise capital, including through the exercise of our SPARs and the sale of Forward Purchase Shares, or to complete our Business Combination will be successful.

Results of Operations

All activities since the Company's inception through December 31, 2025 were related to the Company's organizational activities, preparation for, and the distribution of, SPARs, and searching for a business combination. We will not generate any operating revenues until after the completion of our business combination. We may generate non-operating income in the form of interest income on cash and cash equivalents held. There has been no significant change in our financial or trading position and no material adverse change has occurred since the date of our audited financial statements. We will incur substantially increased expenses in future periods 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 $4,420,632, which consisted of (i) non-cash loss related to change in the fair value of the Sponsor Warrants liability of $1,520,366, (ii) directors' compensation expense of $900,000 and (iii) accounting, franchise tax, legal, printing, research, and other expenses totaling $2,000,266. For the year ended December 31, 2024, we had a net loss of $4,191,705, which consisted of (i) non-cash loss related to change in the fair value of the Sponsor Warrants liability of $2,465,281, (ii) directors' compensation expense of $900,000 and (iii) accounting, franchise tax, legal, printing, research, and other expenses totaling $826,424.

Liquidity and Capital Resources

Our liquidity needs have been satisfied by the sales of $4,225,330 Sponsor Shares and $35,892,480 Sponsor Warrants to the Sponsor in private placements. As of December 31, 2025 and December 31, 2024, we had a cash balance of $20,080,652 and $23,070,496 in the operating account, respectively, and $5,001,000 in the Segregated Account. We will hold these funds in cash.

We will use the funds in the operating account primarily to pay ongoing expenses and director compensation and to identify and evaluate target businesses, perform 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 intend to use substantially all of the funds provided by the exercise of our SPARs to complete our business combination. To the extent that our capital stock or debt financing is used, in whole or in part, as consideration to complete our business combination, the remaining proceeds from the exercise of SPARs, and any remaining proceeds from the sale of Forward Purchase Shares, will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.

In order to fund working capital deficiencies or finance transaction costs in connection with an intended business combination, our Sponsor may, but is not obligated to, purchase additional Sponsor Shares.

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If our estimates of the costs of identifying a target business, undertaking in-depth due diligence and negotiating our 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 business combination. Moreover, we may need to obtain additional financing to complete our business combination if the cash consideration to be paid exceeds our capital available, including because a lower-than-expected number of SPAR holders choose to exercise their SPARs or because an insufficient amount of Additional Forward Purchase Shares are purchased. In such case, we may issue additional securities or incur debt in connection with such business combination. Subject to compliance with applicable securities laws, we would only complete such financing simultaneously with the completion of our business combination. If we are unable to complete our business combination because we do not have sufficient funds available to us, we may be forced to cease operations. In addition, following our business combination, if cash on hand is insufficient, we may need to obtain additional financing in order to meet our obligations.

Contractual Obligations

We did not have any long-term debt, capital lease obligations or operating lease obligations as of December 31, 2025 and December 31, 2024.

Critical Accounting Policies

The preparation of the financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America ("GAAP") 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 financial statements, and income and expenses during the periods reported. Actual results could materially differ from those estimates. We have identified the following critical accounting policies:

Advisor Warrants Liability

The Advisor Warrants were issued at no cost to our advisory board members. Accordingly, we account for the Advisor Warrants under ASC 718-Stock compensationas the instruments were issued in connection with services provided towards our operations and potential business combination by the advisory board. The Advisor Warrants have a settlement feature whereby we or our Sponsor have the option to purchase the warrant from the holder upon the termination of their services for $1,000,000. The settlement feature results in liability classification at the Advisor Warrants' repurchase price on grant date. Upon the consummation of our Business Combination (or vesting date), the outstanding liability will be measured at fair value.

Sponsor Warrants Liability

We account for the Sponsor Warrants pursuant to applicable guidance in ASC 480-Distinguishing liabilities from equity("ASC 480") and ASC 815-40-Contracts in an entity's own equity("ASC 815-40"), under which the Sponsor Warrants do not meet the criteria for equity treatment because the number of underlying Public Shares for which the Sponsor Warrants are exercisable is dependent upon the number of Public Shares outstanding immediately following the consummation of our business combination along with the amount of funds raised in connection therewith. Accordingly, the Sponsor Warrants' fair value at initial measurement was recorded as a derivative liability, and subsequent changes in fair value will be reflected on the statement of operations at each reporting period. The fair value of the Sponsor Warrants is measured using a Black-Scholes option pricing model, and the Sponsor Warrants' classification will be re-assessed at the end of each reporting period. See Note 6 of the notes to the financial statements included herein for further information on the significant inputs utilized to determine fair value.

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SPARs and Forward Purchase Agreement Liabilities

We account for the SPARs and the Forward Purchase Agreements in accordance with the guidance contained in ASC 480 and ASC 815-40. Under this guidance, we have determined that the SPARs and the Forward Purchase Agreements do not meet the criteria for equity treatment and will be recorded as derivative liabilities. Upon issuance, we recorded the initial fair value of the SPARs and Forward Purchase Agreements as expenses because such instruments were distributed to parties other than shareholders and accordingly may not be recognized as dividends under ASC 505-Equity. These liabilities will subsequently be measured at fair value with changes in fair value reflected on the statement of operations at each reporting period. The classification of these instruments, including whether such instruments should be recorded as liabilities or as equity, will be re-assessed at the end of each reporting period. See Note 6 of the notes to the financial statements included herein for further information on their fair values.

Off-Balance Sheet Arrangements

As of December 31, 2025 and December 31, 2024, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K.

Recent Accounting Pronouncements

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures ("ASU 2023-09"), which intends to improve the transparency of income tax disclosures. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024 and is to be adopted on a prospective basis with the option to apply retrospectively. The Company has adopted ASU 2023-09 as of December 31, 2025 and retrospectively for all periods presented, and concluded that the application of this guidance did not have any material impact on its financial statements.

We do not believe that any other recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material impact on our financial statements.