Quarterly Report for Quarter Ending September 30, 2025 (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 ChampionsGate Acquisition Corporation. References to our "management" or our "management team" refer to our officers and directors, and references to the "Sponsor" refer to ST Sponsor Limited and the "Sponsor HoldCo" refer to ST Sponsor Investment LLC. The following discussion and analysis of the Company's financial condition and results of operations should be read in conjunction with the unaudited 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, as amended, (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 "anticipate," "believe," "continue," "could," "estimate," "expect," "intends," "may," "might," "plan," "possible," "potential," "predict," "project," "should," "would" and variations thereof 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 for its initial public offering (the "IPO" described below) filed with the Securities Exchange Commission (the "SEC") on May 28, 2025 (Registration No. 333-283689) (the "Prospectus"). The Company's 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, 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.

We are a blank check company incorporated as a Cayman Islands exempted company and incorporated for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses. We have not selected any specific business combination target and we have not, nor has anyone on our behalf, initiated any substantive discussions, directly or indirectly, with any business combination target. We intend to effectuate our Business Combination using cash from the proceeds of our Initial Public Offering ("IPO") and the sale of our shares, debt or a combination of cash, equity 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.

Our Initial Public Offering

On May 29, 2025, we consummated our IPO of 7,475,000 units (including 975,000 units issued upon the full exercise of the over-allotment option, the "Units"). Each Unit consists of one Class A ordinary share (the "Class A ordinary share"), $0.0001 par value per share, and one right ("Right") to receive of one-eighth of one Class A ordinary share upon the completion of the initial Business Combination. The Units were sold at an offering price of $10.00 per Unit, generating total gross proceeds of $74,750,000. Simultaneously with the consummation (the "closing") of the IPO and the sale of the Units, we consummated the Private Placement of 230,000 units (the "Private Placement Units") to Sponsor HoldCo at a price of $10.00 per Private Placement Unit, generating total proceeds of $2,300,000. Each Private Placement Unit consists of one Class A ordinary share, and one Right to receive of one-eighth of one Class A ordinary share upon the completion of the initial Business Combination. On May 29, 2025, a total of $75,123,750 of the net proceeds from the IPO and the Private Placement was deposited in a trust account established for the benefit of the Company's Public Shareholders at a U.S. based trust account, with Continental Stock Transfer & Trust Company, acting as trustee.

We also issued to Clear Street LLC, the representative of the underwriters of the IPO, 112,125 Class A ordinary shares as part of the underwriting compensation (the "Representative Shares") on the closing date of the IPO. The Representative Shares are identical to the Class A Ordinary Shares included in the Units, with certain exceptions.

Since our IPO, our sole business activity has been identifying, evaluating suitable acquisition transaction candidates and preparing for consummation of a Business Combination. We presently have no revenue and have had losses since inception from incurring formation and operating costs. We have relied upon the sale of our securities and loans from the Sponsor and other parties to fund our operations.

On June 16, 2025, the Company announced that holders of the Company's units may elect to separately trade the Class A ordinary shares and rights included in its units, commencing on or about June 20, 2025. The Class A ordinary shares and rights would trade on the Nasdaq Global Market ("Nasdaq") under the symbols "CHPG" and "CHPGR", respectively. Units not separated would continue to trade on Nasdaq under the symbol "CHPGU."

Recent Developments

On July 31, 2025, Mr. Bala Padmakumar, then Chairman, CEO and director of the Company notified the board of directors of the Company, that he has decided to resign all the positions he held at the Company, effective immediately.

Mr. Padmakumar had no known disagreement with the Company on any matter relating to the Company's operations, policies or practices.

Mr. Padmakumar has received all the monthly compensation payments as provided in the offer letter by and between him and the Company, dated as of May 21, 2024 and as amended on May 11, 2025 ("the Offer Letter") through July 31, 2025, and the Offer Letter shall be deemed to have been terminated as of July 31, 2025.

On October 17, 2025, Mr. Timothy Boon Liat Lim was appointed as the Chairman, CEO and director of the Company, effective immediately. In connection with the appointment, the Company extended an offer letter to Mr. Lim (the "New Offer Letter"), which he accepted on October 17, 2025, pursuant to which Mr. Lim shall receive $13,250 if and when the Company enters into a definitive agreement with a target company and another $13,250 if and when the Company consummates an initial business combination with a target company.

Results of Operations

We have neither engaged in any operations nor generated any revenues to date. Our only activities since inception have been organizational activities and those necessary to prepare for the IPO and after the IPO, identifying a target company for a Business Combination. Following the IPO, we will not generate any operating revenues until after completion of our initial business combination. We expect to generate non-operating income in the form of interest and dividend income on investment held in trust account after the IPO. After the IPO, we expect to incur increased expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses in connection with completing a Business Combination.

For the three months ended September 30, 2025, we had a net income of $682,288, which consisted of interest and dividend income on investments held in trust account of $795,474. This was partially offset by formation and operating costs of $113,186.

For the three months ended September 30, 2024, we had a net loss of $107,443, which consisted of formation and operating costs of $107,443.

For the nine months ended September 30, 2025, we had a net income of $494,905, which consisted of interest and dividend income on investments held in trust account of $1,043,808. This was partially offset by formation and operating costs of $392,999 and stock compensation expense of $155,904.

For the period from March 27, 2024 (inception) to September 30, 2024, we had a net loss of $172,120, which consisted of formation and operating costs of $140,215 and stock compensation expense of $31,905.

Liquidity and Capital Resources

Our liquidity needs have been satisfied prior to completion of the IPO through contribution from our sponsor of $22,901 to purchase the founder shares (the initial purchase price of $25,001 for the issuance of the 2,170,161 insider shares less the consideration price of $2,551 to be received from directors and officers in exchange for the transfer of certain insider shares) and up to $500,000 in loans from our sponsor under an unsecured promissory note.

Following the closing of the IPO and sale of the Private Placement Units on May 29, 2025, a total of $75,123,750 was placed in the trust account, and we had $464,339 of cash held outside of the trust account, after payment of costs related to the IPO, and available for working capital purposes. In connection with the IPO, we incurred $3,259,220 in transaction costs, consisting of $745,500 of underwriting fees, $1,495,000 of deferred underwriting fees, $293,020 of the Representative Shares, and $723,700 of other offering costs.

In conjunction with the IPO, the Company issued to the underwriter 112,125 Class A ordinary shares for no consideration (the "Representative Shares"). The fair value of the Representative Shares accounted for as compensation under the Financial Accounting Standards Board's Accounting Standards Codification ("ASC") 718, "Compensation - Stock Compensation" ("ASC 718") is included in the offering costs. The estimated fair value of the Representative Shares as of the IPO date totaled $293,020.

As of September 30, 2025, we had $17,351 in cash and a working capital deficit of $23,287.

For the nine months ended September 30, 2025, there was $432,991 of cash used in operating activities resulting from dividend earned on investments held in trust account of $1,043,808, the increase in prepaid expenses of $57,547, and the decrease in accounts payable and accrued expenses of $36,646. The changes were partially offset by net income of $494,905, stock compensation expense of 155,904 and the increase in due to related parties of $54,201.

For the period from March 27, 2024 (inception) through September 30, 2024, there was $91,519 of cash used in operating activities resulting from net loss of $172,120 and the increase in prepaid expenses of $26,000. The changes were partially offset by stock compensation expense of $31,905, the increase in due to related parties of $16,774, and the increase in accounts payable and accrued expenses of $57,922.

For the nine months ended September 30, 2025, there was $75,123,750 of cash used in investing activity resulting from the purchase of investments held in trust account.

For the period from March 27, 2024 (inception) through September 30, 2024, there were no investing activities.

For the nine months ended September 30, 2025, there was $75,574,089 of cash provided by financing activities resulting from the proceeds from the IPO of $74,750,000, from the proceeds of the private placement consummated simultaneously with the IPO of $2,300,000, proceeds from working capital loans provided by a related party of $16,459, and from promissory note provided by a related party of $95,048. The changes were partially offset by the payment of the underwriter discount of $747,500, the payment of promissory note-related party of $350,000, and the payment of deferred offering costs of $489,918.

For the period from March 22, 2024 (inception) through September 30, 2024, there was $91,567 of cash provided by financing activities resulting from the proceeds from promissory note-related parties of $219,862 and from issuance of Class B ordinary shares of $25,000. The changes were partially offset by the payment of deferred offering costs of $153,295.

As of September 30, 2025, $76,167,558 was held in the Trust Account in money market funds, which are invested in U.S. Treasury securities. We intend to use substantially all of the funds held in the Trust Account, including any amounts representing interest earned on the Trust Account, excluding deferred underwriting commissions, to complete our Initial Business Combination. We may withdraw interest from the Trust Account to pay taxes, if any. To the extent that our share capital or debt is used, in whole or in part, as consideration to complete an 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.

We intend to use the funds held in the trust account, including any amounts representing interest earned on the trust account (which interest shall be net of taxes payable and up to $100,000 of interest released to the Company to pay dissolution expenses) to complete our initial business combination. We may withdraw interest to pay taxes, if any. Our annual income tax obligations will depend on the amount of interest and other income earned on the amounts held in the trust account. To the extent that our ordinary shares 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.

Prior to the completion of our initial business combination, we will have available to the Company $1,500,000 of proceeds held outside the trust account. We will use these funds 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, structure, negotiate and complete a business combination, and to pay taxes to the extent the interest earned on the trust account is not sufficient to pay our taxes.

In order to fund working capital deficiencies or finance transaction costs in connection with an intended initial business combination, the Sponsor HoldCo, the Sponsor or their affiliates or certain of our officers and directors may, but are not obligated to, loan us funds as may be required. If we complete our initial business combination, we would repay such loaned amounts. In the event that our 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.

On June 26, 2025, the Company issued a promissory note to the Sponsor HoldCo, under which the Sponsor HoldCo may loan the Company up to $500,000 to be used for a portion of the working capital. The promissory note is non-interest bearing, unsecured and is due at the earlier of (1) the date on which the Company consummates its initial business combination or (2) the date on which the Company liquidates and dissolves. The Sponsor HoldCo, as the payee, has the right, but not the obligation, to convert the promissory note, in whole or in part, into Private Placement Units of the Company, that are identical to the Private Placement Units issued by the Company in the Private Placement consummated simultaneously with the Company's IPO, subject to the Cap described below, by providing the Company with written notice of the intention to convert at least two business days prior to the closing of the Initial Business Combination. The number of Private Placement Units to be received by the Sponsor HoldCo in connection with such conversion shall be an amount determined by dividing (x) the sum of the outstanding principal amount payable to the Sponsor HoldCo by (y) $10.00.

Up to $1,500,000 of the loans (the "Cap") made by our Sponsor HoldCo, sponsor, our officers and directors, or our or their affiliates to the Company prior to or in connection with our initial business combination may be convertible into units, at a price of $10.00 per unit at the option of the lender, upon consummation of our initial business combination. The units would be identical to the placement units. The terms of such loans by our officers and directors, if any, have not been determined and no written agreements exist with respect to such loans. We do not expect to seek loans from parties other than the Sponsor HoldCo, the sponsor, the officers and directors or their affiliates as we do not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our trust account.

As of September 30, 2025, the Company had $93,434 of borrowings under the working capital loans.

On July 7, 2025, the Company repaid $350,000 of the promissory note, dated April 18, 2024, to Sponsor and transferred the remaining balance of $76,975 to the working capital loans.

We do not believe we will need to raise additional funds in order to meet the expenditures required for operating our business. However, if our estimates of the costs of identifying a target business, undertaking in-depth due diligence and negotiating an initial 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 initial business combination. Moreover, we may need to obtain additional financing either to complete our initial business combination or because we become obligated to redeem a significant number of our public shares upon completion of our initial business combination, in which case we may issue additional securities or incur debt in connection with such business combination.

Off-Balance Sheet Arrangements; Commitments and Contractual Obligations; Quarterly Results

As of September 30, 2025, 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. No unaudited quarterly operating data is included in this prospectus as we have not conducted any operations to date.

Contractual Obligations

Registration Rights

The holders of the insider shares and Private Placement Units, including any Working Capital Units of those issued upon conversion of Working Capital Loans will be entitled to registration rights pursuant to a registration rights agreement signed on May 27, 2025. The holders of these securities are entitled to make up to three demands, excluding short form demands, that we register such securities. In addition, the holders have certain "piggy-back" registration rights with respect to registration statements filed after the completion of our initial business combination and rights to require us to register for resale such securities pursuant to Rule 415 under the Securities Act. We will bear the costs and expenses of filing any such registration statements.

Underwriting Agreement

The underwriters received a cash underwriting discount of $0.10 per Unit, or $747,500 at the closing of the IPO. In addition, the underwriters will be entitled to a deferred fee of $0.20 per Unit, or $1,495,000 in the aggregate upon the consummation of a Business Combination. 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 its Business Combination, subject to the terms of the underwriting agreement dated May 27, 2025.

Critical Accounting Policies and Estimates

Use of Estimates

The preparation of the unaudited financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates. Making estimates requires management to exercise significant judgment. 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 unaudited financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events.

Recent Accounting Pronouncements

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