Annual Report for Fiscal Year Ending 12-31, 2024 (Form 10-K)

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

References to the "company," "Corner Growth 2," "our," "us" or "we" refer to Corner Growth Acquisition Corp. 2 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 Annual Report on Form 10-K. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.

Overview

We are a blank check company incorporated on February 10, 2021 (inception) as a Cayman Islands exempted company for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses (a "Business Combination"). While we may pursue an acquisition opportunity in any business, industry, sector or geographical location, we focus on industries that complement our management team's background, and in our search for targets for our Business Combination seek to capitalize on the ability of our management team to identify and acquire a business, focusing on the technology industry in the United States and other developed countries.

The registration statement for our initial public offering (the "Initial Public Offering") was declared effective on June 16, 2021. On June 21, 2021, we consummated our Initial Public Offering of 18,500,000 units, at $10.00 per unit, generating gross proceeds of $185,000,000, and incurring offering costs of approximately $698,351, inclusive of $6,475,000 in deferred underwriting commissions. Each unit consists of one Class A ordinary share, par value $0.0001 per share (the "Class A ordinary shares") and one-third of one redeemable warrant, each whole public warrant entitling the holder thereof to purchase one Class A ordinary share at a price of $11.50 per share, subject to adjustment.

Simultaneously with the closing of the Initial Public Offering, we consummated the private placement of 4,950,000 private placement warrants at a price of $1.50 per private placement warrant (the "Private Placement") to our sponsor, generating gross proceeds of $7,425,000. Each private placement warrant is exercisable for one Class A ordinary share at a price of $11.50 per share.

Transaction costs amounted to $10,873,351, consisting of $3,700,000 of underwriting discount, $6,475,000 of deferred underwriting discount, and $698,351 of other offering costs.

Upon the closing of the Initial Public Offering and private placement, $185,000,000 ($10.00 per unit) of the net proceeds of the Initial Public Offering and certain of the proceeds of the private placement were placed in the Trust Account, located in the United States at UBS Financial Services Inc., with Continental Stock Transfer & Trust Company acting as trustee, and are only invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 185 days or less or in any open-ended investment company that holds itself out as a money market fund selected by us meeting the conditions of paragraphs (d)(2), (d)(3) and (d)(4) of Rule 2a-7 of the Investment Company Act, as determined by us, until the earlier of: (i) the completion of a Business Combination and (ii) the distribution of the assets held in the Trust Account. Our management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering and the private placement, although substantially all of the net proceeds are intended to be applied toward consummating an initial Business Combination.

On January 6, 2023, the Company's fixed price tender offer (the "2022 Tender Offer") to purchase and redeem its Class A Ordinary Shares at a purchase price of $10.21 per share of Class A Ordinary Shares, net to seller in cash and without interest upon the terms and subject to the conditions set forth in the 2022 Tender Offer expired (the "Expiration Time"). A total of 4,101,830 Class A ordinary shares were validly tendered and not withdrawn in the 2022 Tender Offer. The Company accepted for purchase all such Class A ordinary shares at a purchase price of $10.21 per share for an aggregate purchase price of $41,879,684, which includes $319,942 of earnings in the Trust Account not previously withdrawn. After giving effect to the 2022 Tender Offer, there were 3,304,435 Class A Ordinary Shares issued and outstanding. In connection with the 2022 Tender Offer, the Sponsor deposited an additional $198,266 into the Trust Account (an aggregate of $0.06 per Class A ordinary share) on each of January, February and March 9, 2023.

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On March 10, 2023, pursuant to the terms of the amended and restated memorandum and articles of association of the Company, the Sponsor, the holder of an aggregate of 4,475,000 shares of the Company's Class B Ordinary Shares, par value $0.0001 per share, elected to convert 4,475,000 shares of the Class B Ordinary Shares held by it on a one-for-one basis into Class A Ordinary Shares of the Company, with immediate effect. Following such conversion, the Company had an aggregate of 7,779,435 shares of Class A Ordinary Shares issued and outstanding, of which 3,304,435 were subject to possible redemption, and 150,000 shares of Class B Ordinary Shares issued and outstanding. In connection with the conversion, the Sponsor has agreed to certain transfer restrictions, a waiver of redemption rights, a waiver of any right to receive funds from the Trust Account and the obligation to vote in favor of an initial business combination. Since the conversion occurred after the record date of the March 2023 Extraordinary General Meeting (as defined below), there was no impact to the votes required to approve the proposals or the counting of the votes at the March 2023 Extraordinary General Meeting as a result of the conversion.

On March 15, 2023, the Company held an extraordinary general meeting of shareholders (the "March 2023 Extraordinary General Meeting"), to amend the Company's amended and restated memorandum and articles of association (the "Second Articles Amendment") to extend the date by which the Company has to consummate a business combination from March 21, 2023 to March 21, 2024 (the "March 2023 Extension Amendment Proposal"). The shareholders of the Company approved the March 2023 Extension Amendment Proposal and the Redemption Limitation Amendment Proposal at the March 2023 Extraordinary General Meeting and on March 15, 2023, the Company filed the Second Articles Amendment with the Cayman Islands Registrar of Companies.

As part of the March 2023 Extraordinary General Meeting, shareholders elected to redeem 1,444,221 Class A ordinary shares, resulting in redemption payments out of the Trust Account totaling $15,297,014, or approximately $10.59 per share which includes $404,207 of earnings in the Trust Account not previously withdrawn. Subsequent to the redemptions and the Sponsor's conversion, 6,335,214 Class A ordinary shares remained issued and outstanding, of which 1,860,214 were subject to possible redemption.

The Company and the Sponsor have agreed that they will deposit into the Trust Account an amount equal to the lesser of (i) $0.04 per share or (ii) $65,000.00 for each month (the "Second Monthly Contribution") of the extension period up and until February 21, 2024, resulting in a maximum contribution of $0.48 per share of Class A Ordinary Shares that is not redeemed in connection with the March 2023 Extraordinary General Meeting (the "Second Maximum Contribution", and the period from March 21, 2023 to March 21, 2024 the "Second Guaranteed Payment Period"), subject to the Company's and the Sponsor's right to stop making said Monthly Contributions This contribution was funded on or about the 21st of each month through February 21, 2024; provided that, no such deposits will be made following the completion of any business combination.

On March 8, 2024, the Company held an extraordinary general meeting of shareholders (the "March 2024 Extraordinary General Meeting,"), to amend the Company's amended and restated memorandum and articles of association to extend the date by which the Company has to consummate a business combination from March 21, 2024 to December 31, 2024 (the "March 2024 Extension Amendment Proposal") and eliminate the limitation that the Company shall not redeem Class A Ordinary Shares included as part of the units sold in the IPO to the extent that such redemption would cause the Company's net tangible assets to be less than $5,000,001. As part of the March 2024 Extraordinary General Meeting, the Company and/or the Sponsor is no longer required to deposit monthly contributions into the trust account. The shareholders approved the March 2024 Extension Amendment Proposal and the Company filed the amended and restated memorandum and articles of association with the Cayman Islands Registrar of Companies.

As part of the March 2024 Extraordinary General Meeting, shareholders elected to redeem 1,407,653 Class A ordinary shares, resulting in redemption payments out of the trust account totaling $16,309,778, or approximately $11.59 per share which includes $1,203,822 of earnings in the trust account not previously withdrawn.

Subsequent to the redemptions, 4,927,561 Class A ordinary shares remained issued and outstanding.

On February 22, 2024, the Company received a letter (the "Notice") from the Listing Qualifications Department of The Nasdaq Stock Market LLC ("Nasdaq") notifying the Company that the Company no longer meets the minimum 300 public holders requirement for The Nasdaq Capital Market pursuant to Nasdaq Listing Rule 5500(a)(3) (the "Minimum Public Holders Requirement"). The Company timely submitted a plan to regain compliance with the Minimum Public Holders Requirement. On May 10, 2024, the Company received a letter from Nasdaq notifying the Company that the Company had, based on email correspondence with Nasdaq, demonstrated that it was in compliance with the Minimum Public Holders Requirement. As such, Nasdaq considers the matter closed.

On May 10, 2024, the Company received a letter (the "Second Notice") from the Listing Qualifications Department of Nasdaq notifying the Company that the Company no longer meets the minimum 500,000 publicly held shares requirement for The Nasdaq Capital Market pursuant to Nasdaq Listing Rule 5550(a)(4) (the "Minimum Publicly Held Shares Requirement"). In accordance with Nasdaq rules, the Company has 45 days, or until June 24, 2024, to submit a plan to regain compliance with the Minimum Publicly Held Shares Requirement. The Second Notice is only a notification of deficiency, not of imminent delisting, and has no current effect on the listing or trading of the Company's securities on The Nasdaq Capital Market.

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On April 1, 2024, the Company instructed Continental Stock Transfer & Trust Company, the trustee with respect to the Trust Account, to liquidate the U.S. government securities or money market funds held in the Trust Account and thereafter to hold all funds in the Trust Account in cash (i.e., in one or more bank accounts).

On April 2, 2024, Jerome "Jerry" Letter provided written notice to the Company of his resignation as the Company's Chief Financial Officer, effective immediately. Mr. Letter's resignation was not as a result of any disagreement with the Company on any matter relating to the Company's operations, policies or practices. Concurrently therewith, the Company's current Co-Chairman and Chief Executive Officer, Marvin Tien, was appointed as acting Chief Financial Officer for the Company. Mr. Tien will retain his roles as Co-Chairman and Chief Executive Officer.

On August 15, 2024, the Company, CGA Sponsor 2, LLC (the "Original Sponsor"), Connor Square, LLC (the "New Sponsor"), and Alexandre Balkanski, John Mulkey, and Jason Park entered into a share purchase agreement (the "Purchase Agreement"). Pursuant to the Purchase Agreement, among other things: (a) the Original Sponsor transferred an aggregate of 2,685,000 Class A Ordinary Shares of the Company to the New Sponsor; (b) the New Sponsor executed a joinder agreement to become a party to that certain letter agreement, dated June 16, 2021 ("Letter Agreement"), and that certain Registration Rights Agreement, dated June 16, 2021 ("Registration Rights Agreement"), each originally entered into in connection with the Company's initial public offering ("IPO"), among the Company, the Original Sponsor, and certain equity holders of the Company; (c) the Original Sponsor and holders of Class B Shares granted the New Sponsor the irrevocable right to vote the retained shares on their behalf and to take certain other actions on their behalf (the "POA Agreements"); (d) the Original Sponsor entered into surrender and cancellation agreements (the "Warrant Cancellation Agreements") to cancel an aggregate of 4,950,000 private placement warrants purchased by the Original Sponsor at the time of the IPO; and (e) certain creditors agreed to cancel or reduce the amounts owed by the Company, with any remaining liabilities assigned to the Original Sponsor (the "Debt Assignment Agreements"). Additionally, the Company, the Original Sponsor, the New Sponsor, and Cantor Fitzgerald & Co., as the underwriter of the IPO, entered into an agreement whereby Cantor agreed to accept a certain number of shares of the Company following any business combination in lieu of the cash deferred commissions owed from the IPO.

On June 17, 2024, the Company received a notice from the Listing Qualifications Department of Nasdaq indicating that, unless the Company timely requested a hearing before the Nasdaq Hearings Panel (the "Panel"), the Company's securities (shares, warrants, and rights) would be subject to suspension and delisting from The Nasdaq Capital Market at the opening of business on June 26, 2024, due to the Company's non-compliance with Nasdaq IM-5101-2. This rule requires that a special purpose acquisition company complete one or more business combinations within 36 months of the effectiveness of its IPO registration statement. The Company submitted a request for a hearing to the Panel on June 24, 2024, which resulted in a temporary stay of the delisting action. The Panel convened to review the Company's appeal on July 25, 2024. Following the hearing, Nasdaq notified the Company that, despite the Company's request for additional time, the delisting of the Company's securities would proceed. On October 15, 2024, Nasdaq filed Form 25 with the Securities and Exchange Commission to formally remove the Company's securities from listing and registration under Section 12(b) of the Securities Exchange Act of 1934. The delisting became effective at the opening of business on August 14, 2024. As of that date, the Company's securities, including Class A ordinary shares, warrants, and units, were no longer listed or registered on Nasdaq. The Company's public warrants remain outstanding, and the Company is currently evaluating alternative options, including over-the-counter (OTC) trading and potential future re-listing on the exchanges, in order to maximize shareholder value. (See Note 9 to the notes to the unaudited condensed financial statements for further information regarding this delisting and its impact on the Company's operations).

On December 23, 2024, the Company held an extraordinary general meeting of shareholders (the "December 2024 Extraordinary General Meeting") to amend the Company's amended and restated memorandum and articles of association to extend the date by which the Company has to consummate a business combination from December 31, 2024, to December 31, 2025 (the "December 2024 Extension Amendment Proposal") or such earlier liquidation and dissolution date as the Company's board of directors may approve. The shareholders approved the December 2024 Extension Amendment Proposal, and in connection therewith, the Company filed an amendment to its memorandum and articles of association with the Cayman Islands Registrar of Companies.

In connection with the vote to approve the December 2024 Extension Amendment Proposal, shareholders elected to redeem 437,513 Class A ordinary shares, resulting in redemption payments out of the trust account totalling $5,238,525, or approximately $11.97 per share. The redemption payments included the proportionate share of Trust Account earnings. Following these redemptions, an aggregate of 15,048 Class A ordinary shares remained issued and outstanding

If we are unable to complete a Business Combination by December 31, 2025, 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 earned on the funds held in the Trust Account and not previously released to us to pay for our income taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public shareholders' rights as shareholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our board of directors, proceed to commence a voluntary liquidation and thereby a formal dissolution of our company, subject in each case to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law.

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Liquidity, Capital Resources and Going Concern

As indicated in the accompanying unaudited condensed financial statements, at December 31, 2024, we had $0 in our operating bank account, and working capital deficit of $32,524. We expect to continue to incur significant costs in pursuit of our initial Business Combination plans.

Our liquidity needs prior to the consummation of the Initial Public Offering were satisfied through the proceeds of $25,000 from the sale of the founder shares, and loans from our sponsor of $100,000. The loan was repaid in full on August 9, 2021. Subsequent to the consummation of the Initial Public Offering, our liquidity has been satisfied through the net proceeds received from the consummation of the Initial Public Offering and the Private Placement that were not placed in the Trust Account.

In order to finance transaction costs in connection with an intended initial Business Combination, our Sponsor or an affiliate of our Sponsor or certain of our officers and directors may, but are not obligated to, loan the Company funds as may be required. The terms of such loans have not been determined and no written agreements exist with respect to such loans. However, as discussed in Note 4 to the unaudited condensed financial statements herein, as of August 15, 2024, in connection with the sale of the Sponsor's interest to the New Sponsor, the Company's outstanding liabilities, amounting to $1,050,795, consisting of operating and formation costs, were transferred to the Original Sponsor. Following this transaction, the Company had no outstanding liabilities to the former Sponsor as of December 31, 2024, with all such debts effectively settled upon transfer. The new Sponsor is not under any obligation to make additional expenditures on the Company's behalf.

Based on the foregoing, management believes that we may not have sufficient working capital to meet our needs through the consummation of a Business Combination. Over this time period, we will be using these funds for paying existing accounts payable, identifying and evaluating prospective initial Business Combination candidates, performing due diligence on prospective target businesses, paying for travel expenditures, selecting the target business to merge with or acquire, and structuring, negotiating and consummating the Business Combination.

In connection with our assessment of going concern considerations in accordance with FASB ASC Subtopic 205-40, "Presentation of Financial Statements - Going Concern", management has determined that the date for mandatory liquidation and dissolution raise substantial doubt about our ability to continue as a going concern for a period of time which is considered to be one year from the issuance of these unaudited condensed financial statements. The Company also demonstrates other adverse conditions that raise substantial doubt about the Company's ability to continue as a going concern for one year following the issuance of these unaudited condensed financial statements. These other adverse conditions are negative financial trends, specifically working capital deficiency and other adverse key financial ratios. No adjustments have been made to the carrying amounts or classification of assets or liabilities should the Company be required to liquidate after December 31, 2025, our scheduled liquidation date if we do not complete the Business Combination prior to such date.

Material Changes in Financial Condition

As of December 31, 2024 and December 31, 2023, we had cash and marketable securities held in Trust Account of $182,240 and $21,200,364, respectively and had Class A ordinary shares subject to possible redemption of 15,048 and 1,860,214, respectively. The reduction of value in each of the account balances was primarily driven by redemption payments out of the Trust Account to shareholders as part of the March and December 2024 Extraordinary General Meeting disclosed above.

Results of Operations

Our entire activity since inception through December 31, 2024 related to our formation, Initial Public Offering and, since the closing of our Initial Public Offering, the search for initial Business Combination candidates. As of December 31, 2024, $0 was held outside the Trust Account and was being used to fund the Company's operating expenses. We are not generating any operating revenues until the closing and completion of our initial Business Combination.

For the year ended December 31, 2024, net income was $1,598,802, largely attributable to $2,000,514 in debt forgiveness and $400,179 in Trust Account earnings, offset by $747,441 in operating and formation costs and a $54,450 reduction in warrant liabilities.

Comparatively, For the year ended December 31, 2023, we had a net loss of $806,149, primarily due to $1,641,861 in operating and formation costs and a $172,821 loss from changes in warrant liabilities, partially offset by $1,008,533 in Trust Account earnings.

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Related Party Transactions

Founder Shares

On February 18, 2021, our sponsor paid $25,000, or approximately $0.005 per share, to cover offering costs in consideration of 5,031,250 Class B ordinary shares, par value $0.0001. In March 2021, our sponsor transferred 50,000 Class B ordinary shares to each of our independent directors. The number of founder shares issued was determined based on the expectation that such founder shares would represent 20% of the issued and outstanding shares upon completion of the Initial Public Offering. Up to 656,250 of the Class B ordinary shares outstanding were subject to forfeiture by our sponsor to the extent that the underwriters' over-allotment in connection with the Initial Public Offering was not exercised in full or in part. As a result of the underwriters' election to partially exercise their over-allotment option, the sponsor forfeited 406,250 Class B ordinary shares for no consideration, resulting in an aggregate of 4,625,000 Class B ordinary shares outstanding as of December 31, 2022.

On March 10, 2023, pursuant to the terms of the amended and restated memorandum and articles of association of the Company, the sponsor elected to convert its 4,475,000 shares of Class B ordinary shares on a one-for-one basis into Class A ordinary shares of the Company, with immediate effect. In connection with the conversion, the Sponsor has agreed to certain transfer restrictions, a waiver of redemption rights, a waiver of any right to receive funds from the Trust Account and the obligation to vote in favor of an initial business combination. The founder shares (including the Class A ordinary shares issuable upon exercise thereof) may not, subject to certain limited exceptions, be transferred, assigned or sold by the holder.

The Sponsor has agreed, subject to limited exceptions, not to transfer, assign or sell any of their founder shares or Class A ordinary shares received upon conversion thereof until the earlier to occur of: (A) one year after the completion of the initial Business Combination or (B) subsequent to the initial Business Combination, (x) if the last sale price of the Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share splits, share dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the initial Business Combination, or (y) the date on which we complete a liquidation, merger, share exchange or other similar transaction that results in all of our shareholders having the right to exchange their ordinary shares for cash, securities or other property.

The founder shares are subject to transfer restrictions pursuant to lock-up provisions in a letter agreement with the Company entered into by the initial shareholders, and officers and directors. The sponsor has the right to transfer its ownership in the founder shares at any time, and to any transferee, to the extent that the sponsor determines, in good faith, that such transfer is necessary to ensure that it and/or any of its parents, subsidiaries or affiliates are in compliance with the Investment Company Act of 1940. Any permitted transferees will be subject to the same restrictions and other agreements of the initial shareholders with respect to any founder shares. Prior to the closing of the Initial Public Offering, our sponsor transferred 150,000 founder shares to our three independent directors in recognition of and as compensation for their future services to the Company. The transfer of founder shares to these directors is within the scope of FASB ASC Topic 718, "Compensation- Stock Compensation" ("ASC 718"). Under ASC 718, stock-based compensation associated with equity-classified awards is measured at fair value upon the grant date. Compensation expense related to the founder shares is recognized only when the performance condition (i.e., the remediation of the lock-up provision) is probable of achievement under the applicable accounting literature. Stock-based compensation would be recognized at the date the lock-up provisions have been remediated, or are probable to be remediated, in an amount equal to the number of founder shares times the grant date fair value per share (unless subsequently modified) less the amount initially received for the transfer of the founder shares. As of September 30, 2024, the Company has not yet entered into any definitive agreements in connection with any business combination and as such, the lock-up provisions have not been remediated and are not probable to be remediated. Any such agreements may be subject to certain conditions to closing, such as, for example, approval by the Company's shareholders. As a result, the Company determined that, taking into account that there is a possibility that a business combination might not happen, no stock-based compensation expense should be recognized through December 31, 2024.

On August 15, 2024, Corner Growth Acquisition Corp. 2 (the "Company"), CGA Sponsor 2, LLC (the "Original Sponsor"), and Connor Square, LLC (the "New Sponsor") entered into a share purchase agreement (the "Purchase Agreement"). Pursuant to the Purchase Agreement, among other things: (a) the Original Sponsor transferred an aggregate of 2,685,000 Class A Ordinary Shares of the Company to the New Sponsor; (b) the New Sponsor executed a joinder agreement to become a party to that certain letter agreement, dated June 16, 2021 ("Letter Agreement"), and that certain Registration Rights Agreement, dated June 16, 2021 ("Registration Rights Agreement"), both originally entered into in connection with the Company's initial public offering ("IPO"), among the Company, the Original Sponsor, and certain equity holders of the Company; and (c) the Original Sponsor and holders of Class B Founder Shares granted the New Sponsor the irrevocable right to vote the retained shares on their behalf and to take certain other actions on their behalf.

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Working Capital Loans

In order to finance transaction costs in connection with a Business Combination, our sponsor or an affiliate of our sponsor, or certain of our officers and directors may, but are not obligated to, loan us funds as may be required ("Working Capital Loans"). If we complete a Business Combination, we would repay the Working Capital Loans out of the proceeds of the Trust Account released to us. Otherwise, the Working Capital Loans would be repaid only out of funds held outside the Trust Account. In the event that a Business Combination is not completed, we may use a portion of the proceeds held outside the Trust Account to repay the Working Capital Loans but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. Except for the foregoing, the terms of such Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans. The Working Capital Loans would either be repaid upon consummation of a Business Combination, without interest, or, at the lender's discretion, up to $1,500,000 of such Working Capital Loans may be convertible into warrants of the post Business Combination entity at a price of $1.50 per warrant. The warrants would be identical to the private placement warrants. As of December 31, 2024, and through the filing date of this Form 10-K, there were no outstanding Working Capital Loans under this arrangement.

Administrative Services Agreement

We agreed, commencing on the effective date of the Initial Public Offering, to pay our sponsor a total of (A) $40,000 per month and continuing monthly until December 31, 2024 and (B) on December 31, 2024, an amount equal to $480,000 less any amounts previously paid by the Company for office space, utilities and secretarial and administrative support services provided to the members of the Company's management team. As of June 21, 2022, the total amount of $480,000 was incurred. There have been no expenses incurred since June 21, 2022. We recognized $0 in expenses incurred in connection with the aforementioned arrangements with the related parties in our statements of operations for year ended December 31, 2024 and 2023, which is included in operating and formation costs on the statements of operations. As of December 31, 2024 and December 31, 2023, there were no fees outstanding for these services.

Operating and Formation Costs

Through December 31, 2024, the Sponsor and affiliates of the Sponsor paid operating and formation costs totaling $1,693,799 on behalf of the Company, out of which $1,065,496 was paid as of December 31, 2023, and an additional $628,303 was paid during the year ended December 31, 2024. These amounts were included in "Due to Related Party" on the balance sheets as of December 31, 2023, and December 31, 2024.

However, in connection with the change of Sponsor pursuant to the Purchase Agreement dated August 15, 2024, all outstanding liabilities due to the Original Sponsor were written down. As a result, no amounts remain payable to the Original Sponsor as of December 31, 2024.

Subsequent to the change in Sponsor, the New Sponsor and its affiliate paid $25,813 on behalf of the Company, which remained outstanding and is included in "Due to Related Party" as of December 31, 2024.

Contractual Obligations

Registration Rights

The holders of founder shares, private placement warrants and warrants that may be issued upon conversion of Working Capital Loans, if any, are entitled to registration rights (in the case of the founder shares, only after conversion of such shares into Class A ordinary shares) pursuant to a registration and shareholder rights agreement entered into upon consummation of the Initial Public Offering. These holders are entitled to certain demand and "piggyback" registration and shareholder rights. However, the registration and shareholder rights agreement provides that we may not permit any registration statement filed under the Securities Act to become effective until the termination of the applicable lock-up period for the securities to be registered. We will bear the expenses incurred in connection with the filing of any such registration statements.

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Underwriting Agreement

The underwriters were entitled to underwriting discounts of $0.20 per Unit sold in the Initial Public Offering, or $3,700,000 in the aggregate, paid upon the closing of the Initial Public Offering. An additional fee of $0.35 per Unit sold in the Initial Public Offering, or $6,475,000 in the aggregate will be payable to the underwriters for deferred underwriting commissions. The deferred underwriting commissions will become payable to the underwriters from the amounts held in the Trust Account solely in the event that we complete a Business Combination, subject to the terms of the underwriting agreement.

However, pursuant to the Purchase Agreement dated August 15, 2024, the Company, the Original Sponsor, the New Sponsor, and Cantor Fitzgerald & Co., the underwriter from the IPO, entered into an agreement under which Cantor agreed to accept a certain number of shares of the Company in lieu of the cash deferred commissions owed. As a result, the previously accrued deferred fee liability has been removed, and the corresponding balance was written off to retained earnings as of December 31, 2024.

Critical Accounting Policies

Class A Ordinary Shares subject to possible redemption

We account for our Class A ordinary shares subject to possible redemption in accordance with the guidance in FASB ASC Topic 480 "Distinguishing Liabilities from Equity" ("ASC 480"). Class A ordinary shares subject to mandatory redemption (if any) are classified as liability instruments and are measured at fair value. Conditionally redeemable Class A ordinary shares (including Class A 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, Class A ordinary shares are classified as shareholders' equity. Our Class A ordinary shares feature certain redemption rights that are considered to be outside of our control and subject to the occurrence of uncertain future events. Accordingly, as of December 31, 2024, 15,048 Class A ordinary shares subject to possible redemption at the redemption amount are presented as temporary equity, outside of the shareholders' equity section of our balance sheet.

Immediately upon the closing of the Initial Public Offering, we recognized the accretion from initial carrying value to redemption amount. The change in the carrying value of redeemable shares of Class A ordinary shares resulted in charges against additional paid-in capital and accumulated deficit.

Warrant Liabilities

The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant's specific terms and applicable authoritative guidance in FASB ASC 480 and ASC 815. The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company's own ordinary shares and whether the warrant holders could potentially require "net cash settlement" in a circumstance outside of the Company's control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.

For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the statements of operations.

Net Income (loss) Per Ordinary Share

We have two classes of shares: Class A ordinary shares and Class B ordinary shares. Income and losses are shared pro rata between the two classes of shares. Net income (loss) per ordinary share is computed by dividing net income (loss) by the weighted-average number of ordinary shares outstanding during the periods.

As of December 31, 2024, the Company had 6,166,667 public warrants and no outstanding private placement warrants, following the cancellation of all 4,950,000 private placement warrants pursuant to the Sponsor transfer and warrant cancellation agreements dated August 15, 2024. We have not considered the effect of the public warrants in the calculation of diluted net income (loss) per share, as their exercise is contingent upon future events and their inclusion would be anti-dilutive under the treasury stock method.

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As a result, diluted net income (loss) per share is the same as basic net income (loss) per share for the years ended December 31, 2024 and 2023. Remeasurement associated with the Class A ordinary shares subject to possible redemption is excluded from earnings per share as the redemption value approximates fair value.

Recent Accounting Pronouncements

In June 2016, FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments ("ASU 2016-13"). ASU 2016-13 changes the way entities measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. For emerging growth companies, the new guidance is effective for annual periods beginning after January 1, 2023. The Company adopted ASU 2016-13 as of January 1, 2023, with no impact to its financial statements because the Company does not have financial assets within the scope of ASU 2016-13.

In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires the disclosure of additional segment information. ASU No. 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The Company adopted this guidance as of December 31, 2024.

In December 2023, the FASB issued Accounting Standards Update 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosure" ("ASU 2023-09"). ASU 2023-09 mostly requires, on an annual basis, disclosure of specific categories in an entity's effective tax rate reconciliation and income taxes paid disaggregated by jurisdiction. The incremental disclosures may be presented on a prospective or retrospective basis. The ASU is effective for fiscal years beginning after December 15, 2024 with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2023-09 on its financial statements. As a British Virgin Islands entity, the Company is not subject to income taxes, as such, the Company does not expect any impact of adopting ASU 2023-09 on its financial statements.

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

Off-Balance Sheet Arrangements

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

JOBS Act

On April 5, 2012, the JOBS Act was signed into law. The JOBS Act contains provisions that, among other things, relax certain reporting requirements for qualifying public companies. We qualify as an "emerging growth company" and under the JOBS Act are allowed to comply with new or revised accounting pronouncements based on the effective date for private (not publicly traded) companies. We are electing to delay the adoption of new or revised accounting standards, and as a result, we may not comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. As such, our financial statements may not be comparable to companies that comply with public company effective dates.

Additionally, we are in the process of evaluating the benefits of relying on the other reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, if, as an "emerging growth company," we choose to rely on such exemptions we may not be required to, among other things, (i) provide an auditor's attestation report on our system of internal controls over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act, (ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the auditor's report providing additional information about the audit and the financial statements (auditor discussion and analysis) and (iv) disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the principal executive officer's compensation to median employee compensation. These exemptions will apply for a period of five years following the completion of our initial public offering or until we are no longer an "emerging growth company," whichever is earlier.