Note 1—Description of Organization and Business Operations

Organization and General

Pershing Square SPARC Holdings, Ltd. (the “Company”) was incorporated on November 3, 2021 in the State of Delaware and formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other business combination transaction with one or more businesses (the “Business Combination”). The Company is not limited to a particular industry or sector for purposes of consummating a Business Combination. The Company is an “emerging growth company” (as defined in Note 2) and, as such, the Company is subject to all of the risks associated with emerging growth companies.

The Company’s registration statement (the “Prospectus”) for the distribution of up to 61,111,111 subscription warrants (the “SPARs”), each exercisable for two Public Shares (defined below) at a minimum exercise price of $10.00 per share, was declared effective by the Securities and Exchange Commission (“SEC”) on September 29, 2023 (the “Registration”) and the distribution was effective as of September 30, 2023. As of September 30, 2023, the Company recorded the full amount of SPARs, as issued and owned, with Continental Stock Transfer & Trust, as the SPAR rights agent (the “Rights Agent”) for the benefit of the Depository Trust Company (“DTC”) participants and registered owners of PSTH (defined below). The Rights Agent verified the SPARs position at each DTC participant or registered owner, and the SPAR register currently presents 60,971,299 SPARs as issued and outstanding as of March 31, 2026. The Company expects that the number of SPARs issued may vary from period to period by amounts that are not expected to be material, particularly in respect of SPARs voluntarily abandoned and forfeited in connection with the business liquidation of holders from time to time.

The common shares of the surviving entity of the Business Combination, which, depending on the form the Business Combination takes, may be the Company or an entity other than the Company (the “Surviving Corporation”), are referred to as the “Public Shares”. Since the Company’s inception, all activity relates to the Company’s formation, the Registration and the search for a Business Combination from and after effectiveness of the Registration. The Company may generate non-operating income in the form of interest from proceeds obtained in connection with the private placements of the Sponsor Shares and the Sponsor Warrants (defined in Note 4). The Company has selected December 31st as its fiscal year-end.

The Company’s sponsor is Pershing Square SPARC Sponsor, LLC (“Sponsor”), a Delaware limited liability company organized on November 4, 2021. The Sponsor is an affiliate of Pershing Square Capital Management, L.P. (“PSCM”), a registered investment advisor under the Investment Advisers Act of 1940, as amended. The Sponsor is wholly owned by Pershing Square Holdings, Ltd., a Guernsey company, Pershing Square, L.P., a Delaware limited partnership, and Pershing Square International, Ltd., a Cayman Islands exempted company, each of which is an investment fund managed by PSCM (collectively the “Pershing Square Funds”). The Sponsor was also an affiliate of Pershing Square Tontine Holdings, Ltd. (“PSTH”), a Delaware corporation, which was a special purpose acquisition company (“SPAC”) that did not enter into an initial business combination within the prescribed time period and redeemed all of its Class A common stock and subsequently dissolved.

Board of Directors, Committees of the Board & Advisory Board

The Company’s board of directors (the “Board”) is comprised of Mr. William A. Ackman, Dr. Jennifer Blouin, Ms. Kathryn Judge and Ms. Linda Rottenberg. All directors other than Mr. Ackman are independent. Mr. Ackman is the Chairman of the Board and Chief Executive Officer. The Board established an Audit Committee, a Compensation Committee, and a Nominating and Governance Committee. The committees are comprised solely of the independent directors of the Company. The Board also established an Advisory Board which is comprised of Mr. Michael Ovitz and Ms. Jacqueline Dawn Reses.

Financing

Each SPAR will be exercisable for two Public Shares, and SPARs must be exercised in whole. Upon the Company entering into a definitive agreement with respect to a Business Combination (a “Definitive Agreement”), the Company will announce the final exercise price (the “Final Exercise Price”) of the SPARs. Following entry into the Definitive Agreement, the Company will file a registration statement (the “Business Combination Registration Statement”) that will include information regarding the proposed Business Combination, and the Company will seek to satisfy substantially all express closing conditions contained in the Definitive Agreement, other than those that can only be satisfied as of a later date (the “Disclosure Period Closing Conditions”). Following the satisfaction or waiver of the Disclosure Period Closing Conditions and the Business Combination Registration Statement becoming effective and being mailed to the holders of SPARs, holders will have 20 business days (the “SPAR Holder Election Period”) to submit an irrevocable notice of their election to purchase Public Shares (an “Election”), and to submit their exercise payment to be held in a custodial account controlled by an independent custodian (the “Custodial Account”). Following the SPAR Holder Election Period, the Company will have up to 10 business days (the “Closing Period”) to assess whether all remaining closing conditions are satisfied (the “Final Closing Conditions”) and whether to proceed with the proposed Business Combination, abandon the Business Combination, or in certain limited circumstances, extend the Closing Period to a date that is no later than 10 months from the start of the SPAR Holder Election Period. If the Final Closing Conditions are satisfied, the Business Combination will be consummated (the “Closing”) and the SPARs will automatically be exercised concurrently therewith. In certain circumstances, Elections may be revoked, and the periods may be postponed, extended or terminated, as described in the Prospectus.

The Company will finance the Business Combination with proceeds from the exercise of the SPARs, a minimum of $1,219,425,980 if all SPARs issued and outstanding as of March 31, 2026 are exercised, and from the proceeds of the Forward Purchase Shares (defined in Note 4). The proceeds from private placement sales to the Sponsor of 422,533 shares of the Company’s common stock at $10.00 per share (the “Common Stock”), for an aggregate purchase price of $4,225,330 (the “Sponsor Shares”) and the Sponsor Warrants, for an aggregate purchase price of $35,892,480, are being used to fund operating expenses, with any remaining amount to be used in connection with the Business Combination. The Sponsor Shares will be identical to the Public Shares, except that they will be subject to certain transfer restrictions and have certain registration rights.

Segregated Account

Of the total proceeds from the sale of the Sponsor Shares and Sponsor Warrants, $5,001,000 was deposited in a segregated account (the “Segregated Account”) to be held as cash and will not be released until the earlier of the Closing or the Company’s liquidation. The remainder of the proceeds were placed in the Company’s operating account and held as unrestricted cash to pay for ongoing expenses (such as business, legal, accounting, due diligence costs related to prospective acquisitions and continuing general and administrative expenses).

Custodial Account

The funds received in connection with the submission of Elections will be held in the Custodial Account and will be held in cash or, at the election of the Company, invested solely in U.S. Treasury obligations (which are United States “government securities” within the meaning of Section 2 (a) (16) of the Investment Company Act) having a maturity of one hundred eighty (180) days or less or in money market funds that meet certain conditions under Rule 2a-7 promulgated under the Investment Company Act of 1940 (the “Investment Company Act”), as amended. The Company expects to make and announce the decision to hold the funds in cash, or such U.S. Treasury obligations or money market funds, in the Business Combination Registration Statement, based on market, legal and other factors at such time, including (i) the relative interest rates for cash accounts and such other instruments, (ii) then-existing market practice and legal and regulatory considerations with respect to custodial accounts for SPACs and other similar vehicles (including whether holding the funds in such U.S. Treasury obligations or money market funds would require the Company to register as an investment company under the Investment Company Act), (iii) the willingness of banks and other depositary institutions to hold large sums in cash in light of their regulatory and business requirements, and (iv) the Company’s assessment of the credit profile of any such bank or other depositary institution willing to hold a cash account.

The proceeds from the submission of SPAR exercise payments will remain in the Custodial Account (and will not be released) until the consummation of the Business Combination for use in connection therewith or the liquidation of the Company due to the failure to consummate a Business Combination during the Closing Period (which is extendable by 10 months from the start of the SPAR Holder Election Period) (an “Early Termination”) in which event the funds held in the Custodial Account are to be returned, inclusive of interest (if any), to electing holders of the SPARs in proportion to the aggregate exercise price paid by each such holder. In no event will funds be held in the Custodial Account for longer than 10 months from the start of the SPAR Holder Election Period, which is the maximum amount of time funds may be held in the Custodial Account, and at which time the Company will be required to liquidate if the Closing has not yet occurred.

In connection with the consummation of the Business Combination, all amounts held in the Custodial Account will be released to the Company. The Company will use these funds to pay all or a portion of the consideration payable to the target or owners of the target of the Business Combination and to pay other expenses associated with the Business Combination. If the Business Combination is paid for using equity or debt instruments, or not all of the funds released from the Custodial Account are used for payment of the consideration in connection with the Business Combination, the Company may apply the balance of the cash released to the Company from the Custodial Account for general corporate purposes, including maintenance or expansion of operations of post-combination businesses, the payment of principal or interest due on indebtedness incurred in completing the Business Combination, to fund the purchase of other companies or make other investments or for working capital. The proceeds deposited in the Custodial Account could become subject to the claims of the Company’s creditors, if any, which could have priority over the claims of holders of the Public Shares.

Business Combination

The Company’s management has broad discretion with respect to the specific application of the net proceeds of the sale of the Sponsor Shares and Sponsor Warrants and from the exercise under the Forward Purchase Agreements (defined in Note 4), although substantially all proceeds are intended to be generally applied toward operating expenses in connection with identifying and consummating a Business Combination. The Company will enter into a Business Combination with a target business having a value of at least 80% of the aggregate proceeds from the exercise of all SPARs at the Final Exercise Price, and intends to enter into a Business Combination with a target business of greater value than the proceeds available from the exercise of the SPARs. The Company may not enter into a Business Combination with another blank check or similar company. Subject to these restrictions, management will have virtually unrestricted flexibility in identifying and selecting one or more prospective target businesses. The Business Combination may be structured in a variety of ways, including, but not limited to, a merger, capital stock exchange, asset acquisition, stock purchase, or reorganization and will be structured so that the Company is not required to register as an investment company under the Investment Company Act. Furthermore, there is no assurance that the Company will be able to successfully effect a Business Combination.

The Company will comply with applicable requirements under Delaware law and, if and as applicable, the rules of the OTCQX marketplace of the OTC Markets Group Inc. The Company will obtain any required stockholder approvals following the effectiveness of the Business Combination Registration Statement, at which time the Sponsor, as owner of the Sponsor Shares, will be the Company’s sole stockholder. Accordingly, the holders of SPARs will not have the opportunity to vote in favor of or against the proposed Business Combination or on any other matter submitted to a vote of stockholders. If the holders of the SPARs disapprove of the proposed transaction, their recourse will be limited to selling or choosing not to exercise their SPARs.

The SPARs will expire upon the earlier of (i) an Early Termination, (ii) Closing and (iii) September 30, 2033. If the Company is unable to complete its Business Combination and the SPARs expire, the Company, subject to the approval of the stockholders and the Company’s Board, will dissolve and liquidate, subject in each case to the Company’s obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. Any remaining assets of the Company will be distributed to the holders of the Sponsor Shares, which are expected to consist solely of the Sponsor in its capacity as the holder of the Sponsor Shares, subject to applicable law.

Prior to the Company’s dissolution, if such event occurs, funds held in the Custodial Account will be returned to all electing SPAR holders who have submitted payment on a pro-rata basis. All costs and expenses associated with implementing the Company’s plan of dissolution, as well as payments to any creditors, will be funded from the Company’s remaining assets, which may not be sufficient for such purpose. Holders of SPARs will have no rights to the assets nor any obligations in respect of the liabilities of the Company in the event of dissolution or bankruptcy.

In the event of a liquidation, dissolution or winding up of the Company after a Business Combination, the stockholders are entitled to share ratably in all assets remaining available for distribution to them after payment of liabilities and after provision is made for each class of shares having preference over the Company’s Common Stock, if any. Stockholders have no preemptive or other rights. There are no sinking fund provisions applicable to the Common Stock or the Public Shares.