Note 4—Related Party Transactions

Sponsor Shares

Since the Company’s inception through March 31, 2026, the Sponsor acquired 422,533 Sponsor Shares, at an aggregate price of $4,225,330, or $10.00 per Sponsor Share. In the event that the Final Exercise Price is higher than the minimum exercise price of $10.00, the Company will carry out a reverse stock split of the Sponsor Shares such that the effective per-share purchase price of the Sponsor Shares is equal to the Final Exercise Price.

The Sponsor Shares are subject to transfer restrictions pursuant to the subscription agreement between the Company and the Sponsor, which provides that such shares are not transferable or salable unless (a) a registration statement on the appropriate form under the Securities Act and applicable state securities laws with respect to the Sponsor Shares proposed to be transferred is then effective or (b) the Company has received an opinion from counsel reasonably satisfactory to the Company, that such registration is not required because such transaction is exempt from registration under the Securities Act and the rules promulgated by the SEC thereunder and with all applicable securities laws.

Forward Purchase Agreements

On September 29, 2023, the Pershing Square Funds (the “Committed Forward Purchasers”) and PS SPARC I Master, L.P., a Cayman Islands limited partnership managed by PSCM (the “Additional Forward Purchaser” and together with the Committed Forward Purchasers, the “Forward Purchasers”) entered into the forward purchase agreements (the “Forward Purchase Agreements”), pursuant to which an aggregate amount of $3.5 billion of Public Shares may be purchased. The amount that the Committed Forward Purchasers will be obligated to buy will equal $250 million at a Final Exercise Price of $10.00, and will be a proportionately greater amount at a higher Final Exercise Price, up to $1.0 billion at a Final Exercise Price of $40.00 per share or greater (the “Committed Forward Purchase Shares”). The Additional Forward Purchaser will have the right, but not the obligation, to purchase (the “Additional Forward Purchase”), at the Final Exercise Price, the remainder of the $3.5 billion of Forward Purchase Shares (the “Additional Forward Purchase Shares” and together with the Committed Forward Purchase Shares, the “Forward Purchase Shares”) that is not allocated to the Committed Forward Purchasers (such amount, the “Aggregate Additional Forward Purchase Amount”).

The Additional Forward Purchaser may exercise the Additional Forward Purchase, at its election, in one or two tranches (each, the “First Tranche Additional Forward Purchase” and the “Second Tranche Additional Forward Purchase”, respectively), each of which would be effectuated, at the Final Exercise Price, at the time of the consummation of the Business Combination; provided that in no event will the number of Public Shares purchased pursuant to the First Tranche Additional Forward Purchase and the Second Tranche Additional Forward Purchase collectively exceed the quotient of (i) the Aggregate Additional Forward Purchase Amount divided by (ii) the Final Exercise Price (the “Maximum Additional Forward Purchase”). The Additional Forward Purchaser will have the right, but not the obligation, to commit to purchase the First Tranche Additional Forward Purchase, in an amount up to the Maximum Additional Forward Purchase, by written notice to the Company no later than five business days prior to the execution of the Definitive Agreement. In the event that (i) the First Tranche Additional Forward Purchase is less than the Maximum Additional Forward Purchase and (ii) all SPARs issued and outstanding immediately prior to the commencement of the SPAR Holder Election Period are not elected to be exercised as of the end of the SPAR Holder Election Period, then the Company shall promptly notify the Additional Forward Purchaser of the number of such issued and outstanding SPARs that were not elected to be exercised (the “Unexercised SPARs”). The Additional Forward Purchaser will have the right, but not the obligation, to commit to purchase the Second Tranche Additional Forward Purchase no later than five business days after such notice, the Public Shares equal to the product of (i) two and (ii) the number of Unexercised SPARs at the Final Exercise Price.

The Committed Forward Purchasers’ obligation to purchase the Committed Forward Purchase Shares may be allocated among the Committed Forward Purchasers from time to time, but may not be transferred to any third parties. The Additional Forward Purchaser’s right to purchase the Additional Forward Purchase Shares may be transferred, in whole or in part, to any entity that is managed by PSCM (“Affiliate Transferee”), but not to third parties.

The Forward Purchase Shares will be subject to transfer restrictions pursuant to lock-up provisions that are set forth in the Forward Purchase Agreements. These lock-up provisions will provide that such shares are not transferable or salable until the earlier of (i) 180 days after the completion of the Business Combination or (ii) subsequent to the Business Combination, the date on which the Company completes a liquidation, merger, capital stock exchange, reorganization or other similar transaction that results in all of the Company’s public stockholders having the right to exchange their shares of common stock for cash, securities or other property, except in the case of the Forward Purchasers and their permitted transferees, (a) to any Affiliate Transferee or (b) in the event of the Company’s liquidation prior to the completion of the Business Combination. However, in the case of each of clauses (a) and (b), these permitted transferees must enter into a written agreement agreeing to be bound by these transfer restrictions, and the other restrictions contained in the applicable purchase agreement and by the same agreements entered into by the purchasers of the Forward Purchase Shares with respect to such securities.

Sponsor Warrants

On July 28, 2023, the Company sold warrants to the Sponsor (the “Sponsor Warrants”) for an aggregate price of $35,892,480 in a private placement, of which $5,001,000 was deposited into the Segregated Account. The transaction price of the Sponsor Warrants was determined by the Company, in consultation with a third-party, nationally recognized valuation firm, based on its fair value as of the previous month-end. The Sponsor Warrants are exercisable, in the aggregate, for up to 4.95% of the Public Shares that are outstanding as of the time immediately following the consummation of the Business Combination, on a fully diluted basis (including without limitation, Public Shares issued upon exercise of the SPARs, Public Shares issued pursuant to the Forward Purchase Agreements, Public Shares issued to the target business or its shareholders and Public Shares issuable upon the exercise of Sponsor and Advisor Warrants or the conversion or exercise of then-outstanding securities of the Surviving Corporation, whether or not convertible or exercisable at such time).

The Company refers to the number of Public Shares into which the Sponsor Warrants are exercisable as the “Reference Shares.” The actual percentage of the Public Shares on a fully diluted basis into which the Sponsor Warrants are exercisable will depend on the amount of funds raised by the exercise of SPARs at the closing of the Business Combination and the amount of the Additional Forward Purchase, if any, made by the Additional Forward Purchaser, and will be calculated by multiplying 4.95% by a fraction (the “Proration Fraction”), (i) the numerator of which is the sum of (A) the amount of funds raised by the exercise of SPARs at the closing of the Business Combination and (B) the amount of the Additional Forward Purchase, if any, funded by the Additional Forward Purchaser at the closing of the Business Combination (including, for the avoidance of doubt, pursuant to the Second Tranche Additional Forward Purchase) and (ii) the denominator of which is the amount of funds that would have been raised at the Final Exercise Price if all SPARs issued and outstanding immediately prior to the start of the SPAR Holder Election Period had been exercised at the closing of the Business Combination, excluding for the avoidance of doubt the amount of the Additional Forward Purchase (i.e., at the Minimum Exercise Price, and assuming all 60,971,299 SPARs as of March 31, 2026 are issued and outstanding immediately prior to the start of the SPAR Holder Election Period, the denominator will be $1,219,425,980).

Because the Additional Forward Purchaser may exercise the Second Tranche Additional Forward Purchase at its election after the SPAR Holder Election Period as described above, the Additional Forward Purchaser (which, like the Sponsor, is an affiliate of PSCM) has the ability to prevent the Proration Fraction from being reduced to less than 1.0. In no event, however, will the Proration Fraction exceed 1.0; accordingly, under no circumstance will the Sponsor Warrants be exercisable, in the aggregate, for in excess of 4.95% of the Public Shares that are outstanding as of the time immediately following the consummation of the Business Combination, on a fully diluted basis (the “Proration”).

The Sponsor Warrants are exercisable at any time after the three-year anniversary, and on or prior to the 10-year anniversary, of the Business Combination and have an exercise price equal to 120% of the Final Exercise Price (the “Reference Price”). The Sponsor Warrants may be exercised on a cashless basis, with the number of Public Shares to be issued upon exercise calculated as the number of Reference Shares, multiplied by (x) the “fair market value” of a Public Share in excess of the Reference Price, divided by (y) the fair market value of a Public Share. As used above, “fair market value” refers to the volume-weighted average trading price of a Public Share over the 10 consecutive trading days ending on the third trading day prior to a notice of exercise being sent.

The Sponsor Warrants and the Public Shares issuable upon exercise of the Sponsor Warrants will generally not be saleable or transferable until three years after the consummation of the Business Combination (except to certain permitted transferees) and are subject to certain adjustments and registration rights. The Sponsor Warrants will expire on the date that is 10 years from the consummation of the Business Combination. The Sponsor Warrants may be exercised in whole or in part and will not be subject to redemption.

Advisor Warrants

On September 29, 2023, the Company issued warrants at no cost to the Company’s advisory board members (the “Advisor Warrants”). The Advisor Warrants are identical to the Sponsor Warrants, including with respect to the Proration, transfer restrictions and registration rights, except that the Advisor Warrants (i) will be exercisable, in the aggregate, for up to approximately 0.124% of the Public Shares that are outstanding as of the time immediately following the consummation of the Business Combination, on a fully diluted basis and (ii) will expressly provide that if the percentage of Public Shares into which the Sponsor Warrants are exercisable is reduced for any reason, the percentage of Public Shares into which the Advisor Warrants are exercisable will be reduced proportionally.

In addition, in the event an advisory board member resigns for any reason prior to the Business Combination and at a time when the Company is not subject to a letter of intent (or a Definitive Agreement) with respect to its Business Combination, the Company or the Sponsor will be entitled, at its election, to repurchase in full such advisory board member’s Advisor Warrants. The repurchase price in each case will be $1,000,000 with respect to each advisory board member. The repurchase right may be assigned or transferred to one of the Company’s affiliates and must be exercised, if at all, by the date that is the later of (i) the two-year anniversary of the date on which the SPARs were first distributed pursuant to the Prospectus and (ii) 60 days after the effective date of such advisory board member’s resignation. In the event the Company (or an affiliate) does not exercise the repurchase right by such time, the resigning advisory board member will retain the Advisor Warrants. If the Company exercises its repurchase right, upon payment of the repurchase price, the Advisor Warrants held by the resigning advisory board member will be cancelled from the warrant registry and will no longer be outstanding. If the Company assigns or transfers that repurchase right to an affiliate, upon payment of the repurchase price, such assignee or transferee will become the registered holder on the warrant registry.

The repurchase price of the Advisor Warrants was established by the Sponsor in its discretion and was not intended to, and may not, represent the fair market value of the Advisor Warrants as of the time of issuance or any time of potential repurchase. The repurchase price and other terms of the Advisor Warrants were established in order to attract what the Company believes are highly experienced and capable advisory board members, and were based on the significant time commitment expected of an advisory board member, including with respect to assisting the Company in identifying potential Business Combination candidates, the novel nature of the Company in the public market and the risks and responsibilities attendant to untested public vehicles, the potential 10-year term of the Company, the skill, expertise and business contacts of the advisory board members, and the value of the advisory board members’ respective time in light of their experience and other professional responsibilities. The repurchase price was also established at a price the Company believes will likely be a substantial discount to the fair value of the Advisor Warrants immediately after the Business Combination, which the Company believes incentivizes the advisory board members to remain on the board over time. In the event an advisory board member elects to resign during the time periods described above, the Company currently anticipates that it or the Sponsor will likely exercise its repurchase right (assuming the Company or the Sponsor, as applicable, believed that the repurchase price was less than the then fair value of the Advisor Warrants as of such time), and contemplates that any such repurchase would reasonably compensate such an advisory board member for their service on the board. The repurchase was structured as the Company’s repurchase right (and not the Company’s obligation) to permit the Company to decide, at the time of any advisory board member resignation, whether or not the exercise of the repurchase right is advantageous to the Company in light of market and other conditions then applicable to the Company.

As discussed in Note 2, the Advisor Warrants have a settlement feature that results in liability classification as the Advisor Warrants repurchase price on the grant date under ASC 718 and upon the consummation of the Business Combination (or vesting date) will be measured at fair value. The Advisor Warrants were granted to the advisory board members on September 29, 2023 and as a result the Company recorded compensation expense of $3,000,000 for the year ended December 31, 2023 and a corresponding Advisor Warrants liability of $3,000,000.

On December 10, 2025, Ms. Lisa Gersh resigned as an advisory board member. On January 6, 2026, the Company agreed to exercise its repurchase right with respect to Ms. Gersh’s Advisor Warrants upon her resignation. On January 7, 2026, the Company repurchased the Advisor Warrants and paid the repurchase price of $1,000,000 to Ms. Gersh, and thereafter such warrants were cancelled and removed from the warrant registry. As a result of the Company’s repurchase and the subsequent warrant cancellation, the Advisor Warrants liability was reduced to $2,000,000, as presented on the balance sheets, and the remaining Advisor Warrants are exercisable, in the aggregate, for up to approximately 0.124% of the Public Shares (previously 0.154%) that are outstanding as of the time immediately following the consummation of the Business Combination, on a fully diluted basis.

Registration Rights Agreement

On September 29, 2023, the Company entered into a registration rights agreement with the Sponsor, the Forward Purchasers and the advisory board members, pursuant to which the Company is required to use commercially reasonable efforts to file a registration statement within 120 days of the Business Combination, and use best efforts to cause such registration statement to be declared effective as soon as practicable (but in no event later than 60 days) thereafter, providing for the resale, under Rule 415 of the Securities Act, of (i) the Sponsor Shares, (ii) the Public Shares issuable upon exercise of the Sponsor Warrants, (iii) the Public Shares issuable upon exercise of the Advisor Warrants, (iv) the Public Shares issued pursuant to the Forward Purchase Agreements and (v) any other shares of the Company that the parties to the Registration Rights Agreement have purchased on the open market, subject to certain conditions as provided in the Registration Rights Agreement. The parties to the Registration Rights Agreement, and their permitted transferees, are entitled to make up to 10 demands that the Company registers these securities, and will have certain “piggyback rights” with respect to other registration statements filed by the Company. The post-combination business will bear the expenses incurred in connection with the filing of any registration statements.

Directors’ Compensation

Immediately after the effectiveness of the Registration, the Company appointed three independent directors to the Board. The independent directors receive annual compensation of $275,000 for their service as an independent director, and an additional $25,000 in connection with their service as a committee chair, payable quarterly. Their annual compensation is recorded under compensation expense in the statements of operations and is reviewed by the Company’s compensation committee on an annual basis. Mr. Ackman does not receive any compensation from the Company in either his capacity as a director or as an officer.

The directors and officers, or any of their respective affiliates, will be reimbursed for any reasonable out-of-pocket expenses incurred in connection with activities on behalf of the Company such as identifying potential target businesses and performing due diligence on suitable Business Combinations. The Company’s audit committee will review on a quarterly basis all payments, if any, that were made to the Sponsor, officers, directors or their affiliates and will determine which expenses and the amount of those expenses that will be reimbursed. There is no cap or ceiling on the reimbursement of out-of-pocket expenses incurred by such persons in connection with activities on behalf of the Company.