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

Overview

We are a blank check company incorporated in the Cayman Islands on May 14, 2018 formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar Business Combination with one or more businesses. We intend to effectuate our Business Combination using cash derived from the proceeds of the Initial Public Offering and the sale of the Private Units, our shares, debt or a combination of cash, shares and debt.

We expect 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.

We completed our initial public offering (the "IPO") in June 2024. Upon the closing of the IPO and exercise of the over-allotment option by underwriters as well as the sale of the private placement units, a total of $69,000,000, including $1,725,000 of deferred underwriting commissions and after deducting of the other underwriting commissions and expenses for the IPO, was placed in a U.S.-based trust account (the "Trust Account") maintained by Wilmington Trust National Association, acting as trustee, and will be invested only in specified U.S. government treasury bills or in specified money market funds. Transaction costs related to our IPO amounted to $3,448,233, consisting of $1,380,000 of underwriting fees, $1,725,000 of deferred underwriting fees and $343,233 of other offering costs.

We will provide our public shareholders with the opportunity to redeem all or a portion of their ordinary shares upon the completion of our initial business combination either (i) in connection with a shareholder meeting called to approve the business combination or (ii) by means of a tender offer. The decision as to whether we will seek shareholder approval of a proposed business combination or conduct a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would require us to seek shareholder approval under the law or stock exchange listing requirement. There will be no redemption rights upon the completion of our initial business combination with respect to our rights. The Sponsor, officers and directors have entered into a letter agreement with us, pursuant to which they have agreed to waive their redemption rights with respect to their founder shares, private placement shares and any public shares they may acquire during or after our IPO in connection with the completion of our initial business combination.

Proposed Business Combination with GFT

On October 21, 2024, we entered the Merger Agreement for the Proposed GRT Business Combination with GRT and Merger Sub. On February 28, 2025, the parties to the Merger Agreement entered into the First Amendment to amend Section 10.01 of the Merger Agreement to extend the Outside Date defined thereunder from February 28, 2025 to August 28, 2025.

On April 18, 2025, pursuant to the GRT Merger Agreement, the parties to the GRT Merger Agreement entered into a Mutual Termination Agreement (the "GRT Termination Agreement") to terminate the GRT Merger Agreement. The GRT Termination Agreement also provided that each other agreement among the parties relating to the GRT Merger Agreement is automatically terminated concurrently with the termination of the GRT Merger Agreement. The GRT Termination Agreement also provided for a mutual release of claims among the parties and their affiliates, except for liabilities arising from or relating to any knowing or intentional breach of a representation, a warranty or a covenant of the GRT Merger Agreement. No party will be required to pay a termination fee as a result of the mutual decision to enter into the GRT Termination Agreement.

On April 18, 2025, Flag Ship entered into an Agreement and Plan of Merger (the "GFT Merger Agreement") with Great Future Technology Inc., a Cayman Islands exempted company limited by shares ("GFT") and GFT Merger Sub Limited, a Cayman Islands exempted company limited by shares and a wholly-owned subsidiary of GFT ("Merger Sub"). The GFT Merger Agreement replaced and superseded the GRT Merger Agreement described above. The GFT Merger Agreement and related agreements are further described in our Current Report on Form 8-K filed with the SEC on April 22, 2025. On December 11, 2025, Flag Ship, GFT and Merger Sub entered into the first amendment to the Merger Agreement to amend Section 10.01 of the GFT Merger Agreement to extend the Outside Date defined thereunder from December 31, 2025 to June 20, 2026.

On May 3, 2026, pursuant to the GFT Merger Agreement, the parties to the GFT Merger Agreement entered into a Mutual Termination of Agreement (the "GFT Termination Agreement"), pursuant to which, among other things, the parties agreed to mutually terminate the GFT Merger Agreement. The GFT Termination Agreement also provided for a mutual release of claims among the parties and their affiliates, except for liabilities arising from or relating to any knowing or intentional breach of a representation, a warranty or a covenant of the GFT Merger Agreement. No party will be required to pay a termination fee as a result of the mutual decision to enter into the GFT Termination Agreement.

Letter of Intent

On May 8, 2026, the Company entered into a letter of intent (the "Letter of Intent") with Bluechip & Co. Holdings ("Bluechip"), a Cayman Islands exempt company, in connection with a proposed business combination transaction (the "Proposed Transaction"). The Letter of Intent provides for an exclusive negotiation period, during which the Company is conducting due diligence on Bluechip and the parties are negotiating the terms of a definitive agreement. The parties have agreed to a ninety (90) day period of mutual exclusivity, which may be extended under certain conditions specified in the Letter of Intent. The Letter of Intent includes binding provisions regarding exclusivity and other related transaction provisions governing the parties' negotiations. The Proposed Transaction remains subject to the completion of due diligence, the negotiation and execution of definitive agreements, satisfaction of customary closing conditions, and approval by the boards and shareholders of the parties. There can be no assurance that the parties will enter into a definitive agreement or that the Proposed Transaction will be consummated.

Extensions of Time Period

Flag Ship originally had until September 20, 2025 to consummate a business combination. However, our Sponsor was allowed to extend the time frame for us to complete a business combination by up to an additional 9 months (for a total period of up to 24 months from our initial public offering) provided that it (or its designee) deposits the required amount of funds into the Trust Account for each monthly extension. Holders of our securities do not have to right to approve or disapprove any such monthly extension. Further, holders of our securities do not have the right to seek or obtain redemption in connection with any such extension.

In order to extend the time available for Flag Ship to consummate a Business Combination, the Sponsor or its affiliates or designees were initially required to deposit into the Trust Account $230,000 (approximately $0.033 per public share in either case) on or prior to the date of the applicable deadline for each one month extension, and up to an aggregate of $2,070,000, or $0.30 per public share. On August 26, 2025, Flag Ship held an extraordinary general meeting of shareholders (the "Extraordinary General Meeting") and obtained shareholder approval of the reduction of the monthly fee payable to extend the date by which it must consummate its initial business combination from $0.033 per each outstanding public share (for each monthly extension) to an amount equal to the lesser of (i) $60,000 for all outstanding public shares and (ii) $0.033 for each outstanding public share. The first monthly extension fee must be made by September 20, 2025 while each subsequent monthly extension fee must be deposited into the trust account by the 20th of each succeeding month until June 20, 2026. Extension payments have been deposited into the Trust Account covering extensions through June 20, 2026. In connection with the vote to approve the reduction of the Monthly Extension Fee, holders of 3,837,483 ordinary shares of the Company properly exercised their right to redeem their shares for cash for an aggregate redemption amount of approximately $40,447,071. If we are unable to consummate our initial business combination within the prescribed time frame, we will, as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares for a pro rata portion of the funds held in the Trust Account and as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. In such event, the rights will be worthless.

In connection with the pending expiration of the current deadline to consummate an initial business combination, the Company anticipates holding an extraordinary general meeting on June 11, 2026 to seek shareholder approval of a proposal to extend the deadline to consummate a business combination for up to twelve (12) additional one-month periods, from June 20, 2026 to June 20, 2027.

Results of Operations

Our entire activity from inception up to June 20, 2024 was in preparation for the Initial Public Offering. Since the Initial Public Offering, our activity has been limited to the evaluation of business combination candidates and, through May 3, 2026, negotiating and pursuing a business combination with GRT and subsequently GFT, each of which was terminated. The Company is currently engaged in exclusive negotiations with Bluechip & Co. Holdings pursuant to a Letter of Intent relating to a potential business combination and is conducting due diligence in connection therewith. We do not expect to generate any operating revenues until after the completion of our initial Business Combination. We expect to generate non-operating income in the form of interest and dividends earned in cash and investments held in the Trust Account. We expect that we will 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 searching for, and completing, a Business Combination.

For the year ended December 31, 2025, we had net income of $1,828,909, which consisted of interest and dividends earned in cash and investments held in the Trust Account of $2,487,973, offset by expenses of $659,064.

For the year ended December 31, 2024, we had net income of $909,838, which consisted of interest and dividends earned in cash and investments held in the Trust Account of $1,799,136, offset by expenses of $889,298.

Liquidity and Capital Resources

On June 20, 2024, we consummated the Initial Public Offering of 6,900,000 Units, generating gross proceeds of $69,000,000. Simultaneously with the closing of the Initial Public Offering, we consummated the sale of 238,000 Private Units to the Sponsor at a price of $10.00 per Private Unit generating gross proceeds of $2,380,000.

Following the Initial Public Offering and the sale of the Private Units, a total of $69,000,000 was placed in the Trust Account. We incurred $3,448,233 in transaction costs, including $1,380,000 of underwriting fees, $1,725,000 of deferred underwriting fees and $343,233 of other offering costs.

In connection with the vote to approve the reduction of the Monthly Extension Fee at our Extraordinary General Meeting held on August 26, 2025, holders of 3,837,483 ordinary shares of the Company properly exercised their right to redeem their shares for cash for an aggregate redemption amount of approximately $40,447,071.

For the year ended December 31, 2025, net cash used in operating activities was $479,096. Net income of $1,828,909 was mainly impacted by interest and dividends earned in cash and investments held in the Trust Account of $2,487,973.

At December 31, 2025, we had cash and investments held in the Trust Account of $33,080,038. 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 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 a 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.

At December 31, 2025, we had cash of $6,551 held outside of the Trust Account and a working capital deficit of $1,438,801. We intend to use the funds from the 2024 Note (defined below) and the funds held outside the Trust Account primarily to identify and evaluate alternative target businesses, including conducting due diligence on Bluechip & Co. Holdings pursuant to the Letter of Intent entered into on May 8, 2026, 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.

In order to fund working capital deficiencies or 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. Such Working Capital Loans would be evidenced by promissory notes. If we complete a Business Combination, we may repay such notes out of the proceeds of the Trust Account released to us. In the event that a Business Combination does not close, we may use a portion of the working capital held outside the Trust Account to repay such notes, but no proceeds from our Trust Account would be used for such repayment. Up to $1,500,000 of notes may be convertible into units, at a price of $10.00 per unit, at the option of the lender. The units would be identical to the Private Units.

On August 30, 2024, we issued an unsecured promissory note (the "2024 Note") in the principal amount of up to $1,000,000 to our Sponsor pursuant to which we may borrow additional funds. The 2024 Note bears no interest and was initially due on the earlier of: (i) December 31, 2025 or (ii) the date on which we consummate our initial business combination. The principal balance may be prepaid at any time. Once an amount is drawn down under the 2024 Note, it shall not be available for future drawdown requests even if prepaid. The 2024 Note is subject to customary events of default, the occurrence of certain of which entitles the Sponsor to declare the unpaid principal balance of the 2024 Note and all other sums payable with regard to the 2024 Note becoming immediately due and payable. On August 21, 2025, Flag Ship and the Sponsor agreed to amend and restate the 2024 Note to increase the maximum principal amount from $1,000,000 to $1,200,000. On January 28, 2026, the Company and the Sponsor agreed to further amend and restate the 2024 Note (the "Second Amended Note") to raise the principal balance to $2,000,000 and extend the maturity date thereof to be the earlier of: (i) December 31, 2026 or (ii) the date on which the Company consummates its initial business combination. Other than the foregoing terms, the Second Amended Note has the same terms as the 2024 Note. As of December 31, 2025, there was $1,446,751 outstanding under the Second Amended Note.

In order to complete a Business Combination, the Company will need to raise additional capital through loans or additional investments from its Sponsor, shareholders, officers, directors, or third parties. The Company's officers, directors and Sponsor may, but are not obligated to, loan the Company funds, from time to time or at any time, in whatever amount they deem reasonable in their sole discretion, to meet the Company's working capital needs. Accordingly, the Company may not be able to obtain additional financing. If the Company is unable to raise additional capital, it may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing operations, suspending the pursuit of a potential transaction, and reducing overhead expenses.

The Company has incurred and expects to continue to incur significant professional costs to remain as a publicly traded company and to incur significant transaction costs in pursuit of the consummation of a Business Combination. The Company cannot provide any assurance that new financing will be available to it on commercially acceptable terms, if at all. These conditions raise substantial doubt about the Company's ability to continue as a going concern if a Business Combination is not consummated. In addition, if the Company is unable to complete a Business Combination within the requisite time period, the Company's board of directors would proceed to commence voluntary liquidation and thereby a formal dissolution of the Company. There is no assurance that the Company's plans to consummate a Business Combination will be successful within the period of time provided for by its Amended and Restated Memorandum and Articles of Association. As a result, management has determined that such additional condition also raises substantial doubt about the Company's ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the Company's inability to continue as a going concern.

Off-Balance Sheet Financing Arrangements

We have no obligations, assets or liabilities, which would be considered off-balance sheet arrangements as of December 31, 2025. We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements. We have not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any non-financial assets.

Contractual Obligations

We do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities, other than an agreement to pay the Sponsor a monthly fee of $10,000 for certain general and administrative services, including office space, utilities and administrative services, provided to the Company. We began incurring these fees on June 20, 2024 and will continue to incur these fees monthly until the earlier of the completion of a Business Combination or the Company's liquidation.

Pursuant to a registration rights agreement entered into on June 17, 2024, the holders of the insider shares, private placement units (including securities contained therein), and units (including securities contained therein) that may be issued on conversion of working capital loans or extension loans (and) are entitled to registration rights pursuant to a registration rights agreement signed on the effective date of our initial public offering requiring us to register such securities for resale. 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 subsequent to our completion of 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 expenses incurred in connection with the filing of any such registration statements.

The underwriters are entitled to a deferred fee of two and one-half percent (2.5%) of the gross proceeds of the Initial Public Offering, or $1,725,000. The deferred fee will be paid in cash upon the closing of a Business Combination from the amounts held in the Trust Account, subject to the terms of the underwriting agreement.

On January 28, 2021, the Company issued an unsecured promissory note to the Sponsor, pursuant to which the Company may borrow up to an aggregate principal amount of $300,000 (the "Promissory Note"). On December 2, 2022, the Company and the Sponsor mutually agreed to increase the principal amount up to $500,000. On December 29, 2023, the Company amended and restated the Promissory Note. The Promissory Note bears no interest and is repayable in full upon earlier of consummation of an initial public offering of our securities or December 31, 2024. The loan under the promissory note was paid off on June 20, 2024. The issuance of the Promissory Note was made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act of 1933, as amended.

On August 30, 2024, the Company issued the 2024 Note to the Sponsor, pursuant to which the Company may borrow up to an aggregate principal amount of $1,000,000. The 2024 Note bears no interest and is repayable in full upon the earlier of consummation of the initial business combination of the Company or December 31, 2025. On January 28, 2026, the Company and the Sponsor agreed to amend and restate the 2024 Note (the "Second Amended Note") to raise the principal balance from $1,000,000 to $2,000,000 and extend the maturity date thereof to be the earlier of: (i) December 31, 2026 or (ii) the date on which the Company consummates its initial business combination. The issuance of the 2024 Note was made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act of 1933, as amended.

Pursuant to the terms of our Amended and Restated Memorandum and Articles of Association and the trust agreement entered into between us and Wilmington Trust, National Association and Vstock Transfer LLC, as amended, in connection with our IPO, in order for the time available for us to consummate our initial business combination to be extended, our sponsor or its affiliates or designees, upon five days advance notice prior to the applicable deadline, must deposit into the trust account $60,000 on or prior to the date of the applicable deadline.

Critical Accounting Policies

The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America 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:

Ordinary Shares Subject to Redemption

We account for our ordinary shares subject to possible conversion in accordance with the guidance in ASC Topic 480 "Distinguishing Liabilities from Equity." Ordinary shares subject to mandatory redemption are classified as a liability instrument and are measured at fair value. Conditionally redeemable ordinary shares (including 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, ordinary shares are classified as shareholders' equity. Our ordinary shares feature certain redemption rights that are considered to be outside of our control and subject to occurrence of uncertain future events. Accordingly, ordinary shares subject to possible redemption are presented at redemption value as commitments and contingencies, outside of the shareholders' equity section of our balance sheets.

The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable ordinary shares to equal the redemption value at the end of each reporting period. Increases or decreases in the carrying amount of redeemable ordinary shares are affected by charges against additional paid-in capital and accumulated deficit if additional paid in capital equals to zero.

Net Loss Per Ordinary Share

Our statement of operations includes a presentation of income (loss) per share for ordinary shares subject to possible redemption in a manner similar to the two-class method of income (loss) per share. In order to determine the net income (loss) attributable to both the redeemable shares and non-redeemable shares, the Company first considered the undistributed income (loss) allocable to both the redeemable shares and non-redeemable shares and the undistributed income (loss) is calculated using the total net loss less any dividends paid. The Company then allocated the undistributed income (loss) ratably based on the weighted average number of shares outstanding between the redeemable and non-redeemable shares. Any remeasurement of the accretion to redemption value of the ordinary shares subject to possible redemption was considered to be dividends paid to the public shareholders.

Offering Costs Associated with the Initial Public Offering

Offering costs consist of underwriting, legal, accounting, registration and other expenses incurred through the balance sheet date that are directly related to the IPO. As of December 31, 2025, offering costs amounted to $3,448,233 consisting of $1,380,000 of underwriting fees, $1,725,000 of deferred underwriting fees, and $343,233 of other offering costs. The Company complies with the requirements of ASC 340-10-S99-1 and SEC Staff Accounting Bulletin Topic 5A "Expenses of Offering". The Company allocates offering costs between public shares and public rights based on the estimated fair values of the public shares and public rights at the date of issuance.

Recent Accounting Standard

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