NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the SEC. Accordingly, they do not include all of the information and footnotes required by the U.S. GAAP. In the opinion of management, the unaudited condensed financial statements reflect all adjustments, which include only normal recurring adjustments necessary for the fair statement of the balances and results for the periods presented. They should be read in conjunction with the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025 filed with the SEC on June 22, 2026. The interim results for the three months ended March 31, 2026 are not necessarily indicative of the results that may be expected through December 31, 2026 or for any future periods.

Emerging Growth Company and Smaller Reporting Company

The Company is an emerging growth company (an “EGC”) under the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Section 102(b)(1) of the JOBS Act permits EGCs to delay adoption of new or revised financial accounting standards until those standards are required to be applied to private companies. The JOBS Act allows an EGC to irrevocably opt out of this extended transition period, but the Company has elected not to opt out. Accordingly, when a new or revised accounting standard has different effective dates for public and private companies, the Company will adopt the standard on the private-company effective date. As a result, the Company’s financial statements may not be comparable to those of public companies that are required to comply with public-company effective dates.

Use of Estimates

The preparation of unaudited condensed financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The most significant estimates are related to the fair value of the warrants.

Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates.

Sponsor Debt Forgiveness and Capital Contribution

In connection with the Purchase Agreement, the Former Sponsor agreed to the discharge and forgiveness of all related-party balances owed by the Company to the Former Sponsor as of the Payment Date. These balances included: (i) Working Capital Loan of $2,836,172; (ii) Convertible Promissory Note of $1,650,000; (iii) amounts Due to Former Sponsor of $161,324; and (iv) accrued Administrative Services Fee of $270,000. In addition, the Former Sponsor paid $133,297 of the Paid-Off Liabilities (totaling approximately $1,118,982), on behalf of the Company, while the Company paid $977,618 and received a vendor credit of $8,067. The aggregate forgiveness and payment of $5,050,793 have been recorded as a capital contribution and credited to additional paid-in capital in the year ended December 31, 2025, in accordance with ASC 470-50 and ASC 850 as a related-party transaction.

Cash and Cash Equivalents

The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. As of March 31, 2026 and December 31, 2025, the Company had $1 in cash and no cash equivalents.

Investments Held in Trust Account

As of March 31, 2026 and December 31, 2025, the Company had $486,895 486,895and $482,661, respectively, held in money market funds, which are invested primarily in U.S. Treasury Securities.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which, at times, may exceed the Federal Depository Insurance Coverage limit of $250,000. As of March 31, 2026 and December 31, 2025, the Company had $1 in cash in the bank account. The Company has not experienced losses on these accounts and management believes the Company is not exposed to significant risks on such accounts.

Class A Ordinary Shares Subject to Possible Redemption

The Company accounts for its Class A ordinary shares subject to possible redemption under ASC 480, Distinguishing Liabilities from Equity. Class A ordinary shares with redemption rights that are outside the Company’s sole control are classified as temporary equity. As of March 31, 2026 and December 31, 2025, 26,021 Class A ordinary shares were classified as temporary equity and presented outside of the shareholders’ deficit section of the unaudited condensed balance sheets, because the related redemption rights are subject to uncertain future events outside the Company’s control.

Changes in redemption value are recognized immediately as they occur, and the carrying value of redeemable Class A ordinary shares is adjusted to equal the redemption value at the end of each reporting period. Such changes are recorded as charges against additional paid-in capital (to the extent available) and thereafter against accumulated deficit.

As of March 31, 2026, the Class A ordinary shares subject to possible redemption reflected in the balance sheet is reconciled in the following table:

Warrant Liability

The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable guidance under ASC 480 and ASC 815, Derivatives and Hedging. The assessment considers whether the warrants are freestanding financial instruments under ASC 480 that meet the definition of a liability, and whether the warrants meet the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own ordinary shares. This assessment is performed at issuance and at each subsequent reporting date.

Warrants that qualify for equity classification are recorded as a component of additional paid-in capital at issuance. Warrants that do not qualify for equity classification are recorded as liabilities at fair value, with subsequent changes in fair value recognized in the statements of operations as a non-cash gain or loss.

Derivative Financial Instruments

The Company evaluates its financial instruments under ASC Topic 815 to determine whether they are derivatives or contain embedded derivative features. Derivative instruments classified as liabilities are initially recorded at fair value on the grant date and remeasured at each reporting date, with changes in fair value recognized in the statements of operations. The classification of derivative instruments as liabilities or equity is reassessed at each reporting date. Derivative liabilities are presented as current or non-current based on whether net cash settlement or conversion could be required within 12 months of the balance sheet date.

Income Taxes

The Company complies with the accounting and reporting requirements of ASC Topic 740, “Income Taxes.” There is currently no taxation imposed on income by the Government of the Cayman Islands. Consequently, income taxes are not reflected in the Company’s financial statements. As of March 31, 2026 and December 31, 2025, there were no unrecognized tax benefits and no amounts accrued for interest and penalties. ASU 2023-09 (effective for fiscal years beginning after December 15, 2024) requires a tabular rate reconciliation and disaggregation of income taxes paid. Because the Company has no income tax expense or benefit in any jurisdiction for the periods ended March 31, 2026 and December 31, 2025, no rate reconciliation table or tax-paid disaggregation is presented herein, as such disclosures would be uninformative. The Company is a Cayman Islands exempted company not subject to income taxes in any jurisdiction. As such, the Company’s tax provision was zero for the three months ended March 31, 2026 and 2025. Tax years 2022 through 2025 remain nominally open, but no taxing authority has asserted jurisdiction over the Company.

Net Loss Per Ordinary Share

The Company has two classes of ordinary shares — Class A and Class B — which share pro rata in the Company’s net income or loss. Net income or loss per ordinary share is calculated by dividing net income or loss allocable to each class by the weighted average number of shares of that class outstanding during the period. Diluted net income or loss per share is the same as basic, because the warrants are not exercisable until the consummation of a Business Combination and therefore are not included in the calculation of diluted earnings per share. Accretion of redeemable Class A ordinary shares to redemption value is excluded from the numerator because the redemption value approximates the carrying amount.

The following tables reflect the calculation of basic and diluted net loss per ordinary share (in dollars, except share amounts):

Fair Value of Financial Instruments

The Company applies ASC 820, which establishes a framework for measuring fair value. The fair value hierarchy categorizes inputs into three levels based on observability. See Note 9.

Redeeming Shareholders Payable

Subsequent to the May 15, 2025 redemption of 1,449,359 Class A ordinary shares, the Company determined that approximately $151,055 of trust assets, consisting of three extension contribution payments and related interest, had been omitted from the Trust Account balance used to calculate the redemption price paid to redeeming shareholders. As a result, the Company approved a supplemental (“stub”) payment to the affected redeeming shareholders.

In addition, the Company allocated a portion of trust earnings attributable to the omitted amount through the payment date. Accordingly, the Company recorded a liability of approximately $155,957 payable to redeeming shareholders as of March 31, 2026 and December 31, 2025, representing the supplemental redemption amount due to shareholders who redeemed their shares in connection with the May 15, 2025 redemption event. The supplemental payment was distributed on May 15, 2026.

Operating Segments

The Company operates as one operating segment. The Company’s chief operating decision maker (the Principal Executive Officer) reviews the Company’s financial information and resources and assesses performance on a consolidated basis. The Company does not accumulate discrete financial information with respect to separate divisions and does not have separate operating or reportable segments.

Recently Issued and Adopted Accounting Pronouncements

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. ASU 2023-09 requires additional quantitative and qualitative income tax disclosures to enable financial statements users better assess how an entity’s operations and related tax risks and tax planning and operational opportunities affect its tax rate and prospects for future cash flows. For public business entities, ASU 2023-09 is effective for annual periods beginning after December 15, 2024, which will be fiscal 2025. The Company adopted ASU 2023-09 during the fiscal year ended December 31, 2025 on a prospective basis. The adoption did not have a material impact on the Company’s financial position, results of operations, or cash flows and primarily resulted in enhanced income tax-related disclosures.

Management does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company’s financial statements.