Note 1 — Organization and Business Operations

KPET Ultra Paceline Corporation (formerly known as Paceline Solutions Corporation) (the “Company”) is a blank check company incorporated as a Cayman Islands exempted company on September 29, 2025. On February 27, 2026, the Company changed its name to KPET Ultra Paceline Corporation. The Company was incorporated for the purpose of effecting a merger, amalgamation, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses (the “Business Combination”).

As of June 30, 2026, the Company had not yet commenced operations. All activity for the period from September 29, 2025 (inception) through June 30, 2026 relates to the Company’s formation, initial public offering (the “Initial Public Offering”), which is described below, and subsequent to the Initial Public Offering, identifying a target company for a Business Combination. The Company will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest. The Company generates non-operating income in the form of interest income on cash and cash equivalents from the proceeds derived from the Initial Public Offering. The Company has selected December 31 as its fiscal year end.

The Company’s sponsor is KPET Ultra Paceline LLC (formerly known as Paceline Solutions LLC) (the “Sponsor”). The registration statement for the Company’s Initial Public Offering was declared effective on March 30, 2026. On April 1, 2026, the Company consummated the Initial Public Offering of 20,000,000 units (the “Units”) at $10.00 per Unit, which is discussed in Note 4, generating gross proceeds of $200,000,000.

Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of an aggregate of 235,000 private placement units (the “Private Placement Units”) at a price of $10.00 per Private Placement Unit, or $2,350,000 in the aggregate, to KPET Ultra Paceline Unit Holdings LLC, an affiliate of the Sponsor (the “Unit Holder Sponsor” and, together with the Sponsor, the “Sponsor Entities”), in a private placement. Each Private Placement Unit consists of one Class A ordinary share (the “Private Placement Shares”) and one-sixth of one warrant (the “Private Placement Warrants”). Each Private Placement Warrant is exercisable to purchase one whole Class A ordinary share at a price of $11.50 per share. The Private Placement Warrants will become exercisable 30 days after the completion of the initial Business Combination, and will expire at 5:00 p.m., New York City time, five years after the completion of the initial Business Combination or earlier upon redemption or liquidation. None of the Private Placement Warrants will be redeemable by the Company.

On April 15, 2026, the underwriter of the Initial Public Offering exercised its over-allotment option in full and on April 20, 2026, the underwriter purchased an additional 3,000,000 units at $10.00 per unit generating gross proceeds of $30,000,000.

Transaction costs amounted to $13,445,810, consisting of $250,000 of cash underwriting fees, $12,650,000 of deferred underwriting fees, and $545,810 of other offering costs.

The Company’s Business Combination must be with one or more target businesses that together have a fair market value equal to at least 80% of the net balance in the Trust Account (as defined below) (excluding the amount of deferred underwriting discounts held and taxes payable on the income earned on the Trust Account) at the time of the signing of an agreement to enter into a Business Combination. However, the Company will only complete a Business Combination if the post-Business Combination company owns or acquires 50% or more of the outstanding voting securities of the target or is otherwise not required to register as an investment company under the Investment Company Act of 1940, as amended (the “Investment Company Act”). There is no assurance that the Company will be able to successfully effect a Business Combination.

Of the net proceeds of the Initial Public Offering, the sale of the Private Placement Units and the underwriter’s exercise of its over-allotment option, a total of $230,000,000, including $12,650,000 of deferred underwriting discounts and commissions, are held in a trust account (the “Trust Account”) and were invested in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act, which invest only in direct U.S. government treasury obligations or in an interest or non-interest bearing demand deposit account; the holding of these assets in this form is intended to be temporary and for the sole purpose of facilitating the intended Business Combination. Pursuant to the trust agreement, the trustee is not permitted to invest in other securities or assets. By restricting the investment of the proceeds to these instruments, and by having a business plan targeted at acquiring and growing businesses for the long term (rather than on buying and selling businesses in the manner of a merchant bank or private equity fund), the Company intends to avoid being deemed an investment company within the meaning of the Investment Company Act. Except with respect to interest or other income earned on the funds held in the Trust Account that may be released to the Company to fund its working capital requirements, subject to an annual limit of $500,000 of the interest earned on the funds held in the Trust Account, or to pay its franchise and income taxes, if any (such amounts in the aggregate, “permitted withdrawals”), the proceeds from the Initial Public Offering and the sale of the Private Placement Units will not be released from the Trust Account until the earliest to occur of (i) the completion of the initial Business Combination (including the release of funds to pay any amounts due to any public shareholders who properly exercise their redemption rights in connection therewith), (ii) the redemption of any Public Shares (as defined in Note 4) properly submitted in connection with a shareholder vote to approve an amendment to the Company’s amended and restated memorandum and articles of association (A) in a manner that would affect the substance or timing of its obligation to redeem 100% of its Public Shares if it does not complete an initial Business Combination within 24 months from the closing of the Initial Public Offering (or within 27 months from the closing of the Initial Public Offering, if the Sponsor exercises its three-month extension option) or (B) with respect to any other provision relating to the rights of holders of the Class A ordinary shares or pre-initial Business Combination activity or (iii) the redemption of the Public Shares if the Company is unable to complete the Business Combination within 24 months from the closing of the Initial Public Offering (or within 27 months from the closing of the Initial Public Offering, if the Sponsor exercises its three-month extension option), subject to applicable law. If the Company does not complete its initial Business Combination within 24 months (or 27 months, as applicable) from the closing of the Initial Public Offering, the Company and the underwriter have agreed that (1) the underwriter will forfeit any rights or claims to its deferred underwriting discounts and commissions, including any accrued interest thereon, then in the Trust Account; and (2) that the deferred underwriter’s discounts and commissions will be distributed on a pro rata basis, together with any accrued interest (which interest shall be net of taxes payable) to the public shareholders.

The Company will provide its public shareholders with the opportunity to redeem all or a portion of their Class A ordinary shares upon the completion of the initial Business Combination at a per-share price, payable in cash, subject to the limitations described herein. The Company will have 24 months from the closing of the Initial Public Offering, with one three-month extension at the option of the Sponsor, to consummate an initial Business Combination. If the Company anticipates that it may be unable to consummate an initial Business Combination within such 24-month period (or 27-month period, as applicable), the Company may seek shareholder approval to amend the amended and restated memorandum and articles of association to extend the date by which the Company must consummate the initial Business Combination. If the Company seeks shareholder approval for an extension, holders of Public Shares will be offered an opportunity to redeem their shares, regardless of whether they abstain, vote for, or against, the initial Business Combination, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including permitted withdrawals (net of taxes payable), divided by the number of then issued and outstanding Public Shares, subject to applicable law. If the Company has not consummated an initial Business Combination within such 24-month period (or 27-month period, as applicable), or it does not otherwise seek shareholder approval to amend the amended and restated memorandum and articles of association to further extend the time to complete the Business Combination, the Company will redeem 100% of the Public Shares at a per-share price described herein, payable in cash, subject to applicable law.

The Class A ordinary shares subject to redemption were recorded at redemption value and classified as temporary equity upon the completion of the Initial Public Offering, in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 480, “Distinguishing Liabilities from Equity.” If the Company seeks shareholder approval of the Business Combination, a majority of the issued and outstanding shares voted must be voted in favor of the Business Combination.

Pursuant to the Company’s amended and restated memorandum and articles of association, if the Company is unable to complete the initial Business Combination within 24 months (or 27 months, as applicable) from the closing of the Initial Public Offering, and has not held a shareholder vote to amend its amended and restated memorandum and articles of association to extend the amount of time the Company will have to consummate an initial Business Combination, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but no more than ten business days thereafter subject to lawfully available funds therefor, 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 Trust Account and not previously released to the Company for permitted withdrawals (and 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 the holders’ 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 the Company’s remaining shareholders and the Company’s board of directors, dissolve and liquidate, subject in each case to the Company’s obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. The Sponsor and the Company’s officers and directors will not be entitled to rights to liquidating distributions from the Trust Account with respect to any founder shares or Private Placement Shares held by them if the Company fails to complete the initial Business Combination within 24 months (or 27 months, as applicable) of the closing of the Initial Public Offering. However, if the Sponsor or any of the Company’s directors, officers or affiliates acquires Public Shares in or after the Initial Public Offering, they will be entitled to liquidating distributions from the Trust Account with respect to such shares if the Company fails to complete the initial Business Combination within the prescribed time period.

Pursuant to the letter agreement entered into on March 30, 2026 among the Company, the Sponsor, the Unit Holder Sponsor and the Company’s officers and directors in connection with the Initial Public Offering, the Sponsor Entities have agreed that they will be liable to the Company if and to the extent any claims by a third party (other than the Company’s independent public accountants) for services rendered or products sold to the Company, or a prospective target business with which the Company has entered into a letter of intent, confidentiality or other similar agreement or Business Combination agreement (a “Target”), reduce the amount of funds in the Trust Account to below the lesser of (i) $10.00 per Public Share or (ii) the actual amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account, if less than $10.00 per share due to reductions in the value of the trust assets, in each case including interest earned on the funds held in the Trust Account (net of permitted withdrawals), provided that such liability will not apply to any claims by a third party or Target that executed an agreement waiving all rights to seek access to the Trust Account (whether or not such agreement is enforceable) nor will it apply to any claims under the Company’s indemnity of the underwriter of the Initial Public Offering against certain liabilities, including liabilities under the Securities Act. However, the Company has not asked the Sponsor Entities to reserve for such indemnification obligations, nor has the Company independently verified whether the Sponsor Entities have sufficient funds to satisfy their indemnity obligations and the Company believes that the Sponsor Entities’ only assets are securities of the Company. Therefore, the Company cannot assure that the Sponsor Entities would be able to satisfy those obligations. As a result, if any such claims were successfully made against the Trust Account, the funds available for the initial Business Combination and redemptions could be reduced to less than $10.00 per Public Share.

In such event, the Company may not be able to complete the initial Business Combination, and the public shareholders would receive such lesser amount per share in connection with any redemption of their Public Shares. None of the officers or directors will indemnify the Company for claims by third parties including, without limitation, claims by vendors and prospective target businesses.

Liquidity and Capital Resources

As of June 30, 2026, the Company had cash of $1,371,945 and had working capital of $1,310,866.

In order to finance transaction costs in connection with an intended initial Business Combination, the Sponsor or an affiliate of the Sponsor or certain of the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required. If the Company completes its initial Business Combination, the Company would repay such working capital loans. In the event that the initial Business Combination does not close, the Company may use a portion of 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. Up to $1,500,000 of such working capital loans may be convertible into private placement-equivalent units at a price of $10.00 per unit at the option of the lender. Such units and their underlying securities would be identical to the Private Placement Units, including as to exercise price, exercisability and exercise period of the underlying warrants. The terms of such working capital loans by the Sponsor or its affiliates, or the Company’s officers and directors, if any, have not been determined and no written agreements exist with respect to such loans. As of June 30, 2026 and December 31, 2025, no such working capital loans were outstanding.

In connection with the Company’s assessment of going concern considerations in accordance with FASB ASC Topic 205-40, “Presentation of Financial Statements – Going Concern,” the Company does not believe it will need to raise additional funds in order to meet the expenditures required for operating its business. However, if the estimate of the costs of identifying a target business, undertaking in-depth due diligence and negotiating a Business Combination are less than the actual amount necessary to do so, the Company may have insufficient funds available to operate its business prior to the initial Business Combination. Management has determined that the Company has sufficient funds to finance the working capital needs of the Company within one year from the date of issuance of the unaudited condensed financial statements.