v3.26.1
Commitments and Contingencies
6 Months Ended
Jun. 30, 2026
Commitments and Contingencies [Abstract]  
Commitments and Contingencies

Note 6 — Commitments and Contingencies

 

Risks and Uncertainties

 

The United States and global markets are experiencing volatility and disruption following the geopolitical instability resulting from the ongoing Russia-Ukraine conflict, the recent conflict in Iran and nearby countries and the recent escalation of conflict in the Middle East and Southwest Asia. In response to the ongoing Russia-Ukraine conflict, the North Atlantic Treaty Organization (“NATO”) deployed additional military forces to eastern Europe, and the United States, the United Kingdom, the European Union and other countries have announced various sanctions and restrictive actions against Russia, Belarus and related individuals and entities, including the removal of certain financial institutions from the Society for Worldwide Interbank Financial Telecommunication payment system. Certain countries, including the United States, have also provided and may continue to provide military aid or other assistance to Ukraine and to Israel, increasing geopolitical tensions among a number of nations. The invasion of Ukraine by Russia, the conflict in Iran and nearby countries and the escalation of the conflict in the Middle East and Southwest Asia and the resulting measures that have been taken, and could be taken in the future, by NATO, the United States, the United Kingdom, the European Union, Israel and its neighboring states and other countries have created global security concerns that could have a lasting impact on regional and global economies. Although the length and impact of the ongoing conflicts are highly unpredictable, they could lead to market disruptions, including significant volatility in commodity prices, credit and capital markets, as well as supply chain interruptions and increased cyberattacks against U.S. companies. Additionally, any resulting sanctions could adversely affect the global economy and financial markets and lead to instability and lack of liquidity in capital markets.

 

There have recently been significant changes to international trade policies and tariffs affecting imports and exports. Any significant increases in tariffs on goods or materials or other changes in trade policy could negatively affect the Company’s search for a target and/or its ability to complete the initial Business Combination.

 

Recently, the U.S. has implemented a range of new tariffs and increases to existing tariffs. In response to the tariffs announced by the U.S., other countries have imposed, are considering imposing, and may in the future impose new or increased tariffs on certain exports from the United States. There is currently significant uncertainty about the future relationship between the United States and other countries with respect to trade policies, taxes, government regulations and tariffs and the Company cannot predict whether, and to what extent, current tariffs will continue or trade policies will change in the future.

 

Any of the above-mentioned factors, or any other negative impact on the global economy, capital markets or other geopolitical conditions resulting from the Russian invasion of Ukraine, the conflict in Iran and nearby countries, the escalation of the conflict in the Middle East and Southwest Asia and subsequent sanctions, tariffs, or related actions, could adversely affect the Company’s search for an initial Business Combination and any target business with which the Company may ultimately consummate an initial Business Combination.

 

Registration Rights

 

The holders of the (i) Founder Shares, (ii) Representative Shares (as defined in Note 6) and (iii) Private Placement Units (and the securities comprising such units and the Class A ordinary shares issuable upon conversion of the Private Placement Rights comprising such units) that may be issued upon conversion of the Working Capital Loans are entitled to registration rights to require the Company to register for resale of any of the Company’s securities held by them and any other securities of the Company acquired by them prior to the consummation of the initial Business Combination pursuant to a registration rights agreement signed on May 28, 2026. The holders of these securities are entitled to make up to three demands, excluding short-from demands, that the Company registers such securities. In addition, the holders have certain piggyback registration rights with respect to registration statements filed subsequent to the completion of the initial Business Combination. Notwithstanding anything to the contrary, the underwriters may only make a demand on one occasion and only during the five-year period beginning on the effective date of the Initial Public Offering. In addition, the underwriters may participate in a piggyback registration only during the seven-year period beginning on the effective date of the Initial Public Offering. The Company will bear the expenses incurred in connection with the filing of any such registration statements.

Underwriters’ Agreement

 

The underwriters have a 45-day option from the date of the Initial Public Offering to purchase up to an additional 2,100,000 Units to cover over-allotments, if any. As of June 30, 2026, the full over-allotment option remains open.

 

The underwriters were entitled to a cash underwriting discount of $0.20 per Unit, or $2,800,000 in the aggregate (or $3,220,000 in the aggregate if the underwriters’ over-allotment option is exercised in full), which was paid to the underwriters upon the closing of the Initial Public Offering. Additionally, the underwriters were entitled to a deferred underwriting discount of $0.35 per Unit, or $4,900,000 in the aggregate (or $5,635,000 in the aggregate if the underwriters’ over-allotment option is exercised in full), payable to the representative on behalf of the underwriters only upon the consummation of an initial Business Combination. The deferred underwriting commissions will be payable to the underwriters upon the closing of the initial Business Combination in two portions, as follows: (i) $0.175 per Unit sold in the Initial Public Offering shall be paid to the underwriters in cash, and (ii) up to $0.175 per Unit sold in the Initial Public Offering shall be paid to the underwriters in cash, based on the funds remaining in the Trust Account after giving effect to Public Shares that are redeemed in connection with an initial Business Combination.

 

Representative Shares

 

The Company issued shares to the underwriters (the “Representative Shares”) comprising 140,000 Class A ordinary shares as representative compensation. The underwriters have agreed that Representative Shares shall be subject to the lock-up provisions of not transferring its Representative Shares (other than permitted transferees) until six months after the completion of an initial Business Combination. In addition, the underwriters have agreed with respect to the Representative Shares, (i) to vote for at a shareholder meeting to approve a Business Combination or any amendment to the Company’s post-offering amended and restated memorandum and articles of association to modify the substance or timing of its obligation to allow redemptions in connection with a Business Combination, (ii) to waive their redemption rights with respect to such shares until the completion of the Business Combination, in connection with the completion of the Company’s initial Business Combination or a shareholder vote to approve an amendment to the Company’s post-offering amended and restated memorandum and articles of association to modify the substance or timing of the its obligation to allow redemptions in connection with a Business Combination, and (iii) to waive their rights to liquidating distributions from the Trust Account with respect to such shares if the Company fails to complete its initial Business Combination within the timeline provided in the Company’s post-offering amended and restated memorandum and articles of association.

 

The Representative Shares have been deemed compensation by Financial Industry Regulatory Authority (“FINRA”) and are therefore subject to a lock-up for a period of 180 days immediately following the date of the commencement of sales in the Initial Public Offering pursuant to FINRA Rule 5110(e)(1). Pursuant to FINRA Rule 5110(e)(1), these securities will not be the subject of any hedging, short sale, derivative, put or call transaction that would result in the economic disposition of the securities by any person for a period of 180 days immediately following the effective date of the registration statement of which the Initial Public Offering forms a part, nor may they be sold, transferred, assigned, pledged or hypothecated for a period of 180 days immediately following the effective date of the registration statement of which the Initial Public Offering forms a part except to any underwriter and selected dealer participating in the Initial Public Offering and their officers, partners, registered persons or affiliates.

 

The issuance of the Representative Shares is in the scope of FASB ASC 718. Under FASB ASC 718, share-based compensation associated with equity classified awards is measured at fair value upon the assignment date. Further, the issuance of the Representative Shares should be accounted for as an offering cost in accordance with SAB Topic 5A, Expenses of Offering, since the Representative Shares are deemed to be underwriters’ compensation by FINRA pursuant to Rule 5110 of the FINRA Manual. The Company estimated the fair value of the 140,000 Representative Shares to be $207,200 or $1.48 per share. The Company received $140 from the underwriters for the issuance of the Representative Shares. Accordingly, the fair value in excess of the proceeds received of $207,060 was recorded as deferred offering costs and was closed to additional paid-in capital at the closing of the Initial Public Offering. The Company established the initial fair value for the Representative Shares on June 1, 2026 using Probability-Weighted Expected Return Method (“PWERM”). The primary assumptions used in the valuation of Representative Shares were (i) implied Class A share price of $9.85 and (ii) probability of de-SPAC and market adjustment of 15.0%.

The underwriters have agreed (i) to waive their redemption rights with respect to such shares in connection with the completion of an initial Business Combination, and (ii) to waive their rights to liquidating distributions from the Trust Account with respect to such shares if the Company fails to complete its initial Business Combination within 21 months from the closing of the Initial Public Offering.

 

Transfer Agent and Trustee Administrative Fees

 

The Company acknowledges that the transfer agent may receive fees, commissions, or other compensation (collectively, “Revenue Share”) from the Company’s elected asset manager (the “Asset Manager”), or its affiliates, in connection with the transfer agent’s referral of such Asset Manager to provide services to the Company. For each calendar month in which the transfer agent receives Revenue Share from the Asset Manager attributable to the Company’s Trust Account, the Company shall be entitled to one hundred percent (100.0%) of such Revenue Share, less the transfer agent’s monthly service fee. The transfer agent shall deduct the monthly service fee and promptly remit the remaining balance (the “Net Revenue Share”) to the Company. The Net Revenue Share shall be paid by the 15th day of the calendar month following the month to which it relates. Payment obligations under this agreement shall commence with the calendar month in which the transfer agent first receives Revenue Share from the Asset Manager and shall continue for each subsequent calendar month in which the transfer agent continues to receive Revenue Share. This agreement shall automatically terminate, and all obligations of the transfer agent to make Net Revenue Share payments shall cease, upon the earlier of (1) the consummation of the Company’s initial Business Combination, (ii) the liquidation or winding-up of the Company, or (iii) the date on which the transfer agent ceases to receive Revenue Share from the Asset Manager. No Net Revenue Share payment shall accrue or be payable in respect of any period after the effective date of termination.

 

For the three and six months ended June 30, 2026, the company accrued $10,383 of referral income which was included in other receivables in the accompanying condensed balance sheets.