v3.26.1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)
 6 Months Ended
Jun. 30, 2026
Accounting Policies [Abstract]  
Basis of Presentation

Basis of Presentation

 

The accompanying financial statements are presented in U.S. Dollars and conformity with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the SEC.

 
Emerging Growth Company

Emerging Growth Company

 

The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

 

Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

 
Use of Estimates

Use of Estimates

 

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.

 

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.

 

 
Cash and Cash Equivalents

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. The Company did not have any cash equivalents as of June 30, 2026 or as of December 31,2025.

 
Cash and Investments Held in the Trust Account

Cash and Investments Held in the Trust Account

 

At December 31, 2025, all the assets held in the Trust Account, totaling $82,136,888, were invested in a money market fund focused on U.S. Treasury obligations. During the six months ended June 30, 2026, the Trust Account earned interest income of $1,212,390, and the Company withdrew $147,244 from the Trust Account to pay taxes. The remaining funds in the Trust Account were subsequently moved out of the money market fund and held in cash. As a result, at June 30, 2026, the assets held in the Trust Account, totaling $83,202,034, were held in cash.

 
Equity Prepaid Forward Transaction

Equity Prepaid Forward Transaction

 

On May 28, 2026, the Company entered into an OTC Equity Prepaid Forward Transaction (the “Forward Purchase Agreement” or “FPA”) with Atsion Opportunity Fund LLC, Series 2 (“Atsion”), pursuant to which Atsion intended, but was not obligated, to purchase and hold up to 3,000,000 shares of the Company’s common stock prior to the closing of the Mergers. Immediately after entry into the Forward Purchase Agreement, the parties entered into a Novation Agreement dated May 28, 2026, pursuant to which one-half of the Forward Purchase Agreement was novated to FG Capital Partners, LLC (“FGCP”). On June 11, 2026, Atsion assigned and novated its remaining 50% interest in the Forward Purchase Agreement to Camac Fund, LP, pursuant to an Assignment and Novation Agreement among Atsion, Camac Fund, LP, FGMC, and BOXABL.

 

The Forward Purchase Agreement provides that the seller is to be prepaid an aggregate cash amount equal to the number of shares set forth in a Pricing Date Notice multiplied by the per-share redemption price payable to redeeming shareholders in connection with the Mergers, funded directly from the Trust Account no later than the earlier of (a) one business day after the Closing Date or (b) the date any Trust Account assets are otherwise disbursed in connection with the Mergers. The Forward Purchase Agreement was not entered into to satisfy any minimum cash condition to closing; rather, it was intended to provide access to potential additional growth capital in replacement of redeemed Trust assets.

 

Following consummation of the business combination, the Forward Purchase Agreement is subject to cash settlement based principally on the daily volume-weighted average price of the underlying shares during the applicable valuation period, subject to the contractual settlement amount adjustments and other provisions of the Forward Purchase Agreement. In connection with the Closing of the Business Combination on July 17, 2026, the Company funded an aggregate Prepayment Amount of $31,078,060 to Camac Fund, LP and FGCP from the Trust Account ($15,539,030 to each counterparty). The Forward Purchase Agreement is a cash-settled equity forward that does not qualify for equity classification under ASC 815-40 given its cash-only settlement terms, and is accounted for as a derivative financial instrument recognized at fair value, with changes in fair value recognized in earnings, as further described below.

 

The Forward Purchase Agreement is accounted for as a derivative financial instrument under ASC 815 and is measured at fair value with changes in fair value recognized in earnings. The Company evaluates the derivative at each reporting date and recognizes changes in fair value in its statements of operations. During the three and six months ended June 30, 2026, the Company recorded an approximate $8.6 million loss on the initial recognition of the Forward Purchase Agreement, and an approximate $1.1 million loss on the change in fair value of the Forward Purchase Agreement, which are included in statements of operations. As of June 30, 2026, the Company recorded a derivative liability of $9.6 million related to the Forward Purchase Agreement, which is included in the accompanying balance sheets.

 

The derivative was classified as a Level 3 financial instrument within the fair value hierarchy since its valuation incorporates significant inputs that are not directly observable in the market. See Note 2 for additional detail of the fair value determination of the Forward Purchase Agreement as of May 28, 2026 and as of June 30, 2026.

 
Deferred Offering Costs

Deferred Offering Costs

 

Deferred offering costs consist of legal, underwriter expenses and accounting expenses incurred through the balance sheet date that are directly related to the IPO and that are charged to stockholder’s equity upon the completion of the IPO. Offering cost amounting to $1,481,031 (including $750,000 of underwriting fee and $250,000 of advisor fee) were charged to shareholders’ additional paid-in capital upon the completion of the IPO on January 30, 2025.

 
Warrant and Right Instruments

Warrant and Right Instruments

 

The Company accounts for the Public Rights issued in connection with the IPO, the Private Unit Rights and the $15 Private Warrants in accordance with the guidance contained in FASB ASC 815, “Derivatives and Hedging”. Under ASC 815-40, Public Rights and the Private Unit Rights and $15 Private Warrants meet the criteria for equity treatment and as such will be recorded in shareholders’ equity. If the Public Rights, Private Unit Rights and $15 Private Warrant no longer meet the criteria for equity treatment, they will be recorded as a liability and remeasured each period with changes recorded in the statement of operations.

 
Common Stock Subject to Possible Redemption

Common Stock Subject to Possible Redemption

 

The Company accounts for its common stock subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity Conditionally redeemable common stock (including common stock that features redemption rights that is either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) is classified as temporary equity. At all other times, common stock is classified as stockholders’ equity. The Company’s common stock features certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, at June 30, 2026, common stock subject to possible redemption is presented as temporary equity at redemption value, outside of the stockholders’ equity section of the Company’s balance sheet.

 

 

The Company recognizes changes in redemption value using the “at redemption value” method and accordingly recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable shares to equal the redemption value at the end of each reporting period. Such changes are reflected in additional paid-in-capital to the extent available; once additional paid-in-capital was reduced to zero, the remaining changes were charged against retained earnings (accumulated deficit).

 
Income Taxes

Income Taxes

 

The Company complies with the accounting and reporting requirements of ASC Topic 740, “Income Taxes,” which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

 

ASC Topic 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits, if any, as income tax expense. There were no unrecognized tax benefits as of June 30, 2026 and no amounts accrued for interest and penalties. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception. The company’s year-end is December 31 and no statutory tax deadline has yet occurred.

 

As of June 30, 2026, the Company has estimated $264,099 in income tax expense on the income earned in the Trust Account.

 
Reconciliation of Net Income (Loss) per Common Share

Reconciliation of Net Income (Loss) per Common Share

 

The Company complies with the accounting and disclosure requirements of ASC 260, Earnings Per Share. The Company utilizes a two-class methodology in calculation of earnings per share. The Company has redeemable shares that were issued in IPO and non-redeemable shares which include shares issued in Private Placement, Underwriter Units, Advisor Units and Founder Share (as described below). Income and losses are shared pro rata between the redeemable and nonredeemable common shares. Net income (loss) per share of common stock is calculated by dividing the net income (loss) by the weighted average shares of common stock outstanding for the respective period. Net income from IPO until June 30, 2025, was allocated to redeemable and non-redeemable common shares. Diluted net income per share attributable to stockholders adjusts the basic net income per share attributable to stockholders and the weighted-average shares of common share outstanding for the potentially dilutive impact of outstanding warrants. As the Company reported a net loss in certain of the periods presented, all potentially dilutive securities are antidilutive and have therefore been excluded from the calculation of diluted net loss per share for those periods. Accordingly, basic and diluted net loss per share is the same when presenting a net loss.

 

 

The following table reflects the calculation of basic and diluted net earnings (loss) per share of common stock for the three and six months ended June 30, 2026 and June 30, 2025:

 

Net loss from January 1, 2026, to June 30, 2026  $(13,558,223)

 

          
   For the Six months ended June 30, 2026 
   Redeemable   Non- Redeemable     
   Shares   Shares   Total 
Total number of ordinary shares – basic and diluted   8,000,000    2,295,800    10,295,800 
Ownership percentage   77.7%   22.3%   100%
Total loss allocated by class  $(10,534,739)  $(3,023,484)   (13,558,223)
Less: Accretion allocated based on ownership percentage   (827,618)   (237,528)   (1,065,146)
Plus: Accretion applicable to the redeemable class   1,065,146    —    1,065,146 
Total loss by class  $(10,297,211)  $(3,261,012)   (13,558,223)
                
Weighted average shares   8,000,000    2,295,800      
Loss per ordinary share – basic and diluted  $(1.287)  $(1.420)     

 

Net loss from January 1, 2025, to IPO date  $(106)
Net earnings from IPO date to June 30, 2025   897,491 
Total earnings from January 1, 2025 to June 30, 2025  $897,385 

 

          
   For the Six months ended June 30, 2025 
   Redeemable   Non- Redeemable     
   Shares   Shares   Total 
Total number of ordinary shares – basic   8,000,000    2,295,800    10,295,800 
Ownership percentage   78%   22%   100%
Total earnings allocated by class  $700,043   $197,342    897,385 
Less: Accretion allocated based on ownership percentage   (2,425,500)   (684,115)   (3,109,615)
Plus: Accretion applicable to the redeemable class   3,109,615    —    3,109,615 
Total earnings (loss) by class  $1,384,158   $(486,773)   897,385 
                
Weighted average shares   6,674,033    2,308,098      
Earnings (loss) per ordinary share - basic  $0.207   $(0.211)     

 

          
   For the six months ended June 30, 2025 
   Redeemable   Non- Redeemable     
   Shares   Shares   Total 
Total number of ordinary shares – diluted   8,800,000    2,325,380    11,125,380 
Ownership percentage   79%   21%   — 
Total income allocated by class  $709,018   $188,367    897,385 
Less: Accretion allocated based on ownership percentage   (2,456,596)   (653,019)   (3,109,615)
Plus: Accretion applicable to the redeemable class   3,109,615    —    3,109,615 
Total earnings (loss) by class  $1,362,037   $(464,652)   897,385 
                
Weighted average shares   7,341,436    2,332,776      
Earnings (loss) per ordinary share - diluted  $0.186   $(0.199)     

 

 

Net loss from April 1, 2026, to June 30, 2026  $(13,845,985)

 

          
   For the three months ended June 30, 2026 
   Redeemable   Non- Redeemable     
   Shares   Shares   Total 
Total number of ordinary shares – basic and diluted   8,000,000    2,295,800    10,295,800 
Ownership percentage   77.7%   22.3%   — 
Total loss allocated by class  $(10,758,330)  $(3,087,655)  $(13,845,985)
Less: Accretion allocated based on ownership percentage   (266,450)   (76,472)   (342,922)
Plus: Accretion applicable to the redeemable class   342,922    —      342,922 
Total loss by class  $(10,681,858)  $(3,164,127)   (13,845,985)
                
Weighted average shares   8,000,000    2,295,800      
Loss per ordinary share – basic and diluted  $(1.335)  $(1.378)     

 

Net earnings from April 1, 2025, to June 30, 2025  $582,035 

 

          
   For the three months ended June 30, 2025 
   Redeemable   Non- Redeemable     
   Shares   Shares   Total 
Total number of ordinary shares – basic   8,000,000    2,295,800    10,295,800 
Ownership percentage   78%   22%   — 
Total earnings allocated by class  $453,987   $128,048   $582,035 
Less: Accretion allocated based on ownership percentage   (413,995)   (116,768)   (530,763)
Plus: Accretion applicable to the redeemable class   530,763    —    530,763 
Total earnings by class  $570,755   $11,280    582,035 
                
Weighted average shares   8,000,000    2,295,800      
Earnings per ordinary share - basic  $0.071   $0.005      

 

          
   For the three months ended June 30, 2025 
   Redeemable   Non- Redeemable     
   Shares   Shares   Total 
Total number of ordinary shares – diluted   8,800,000    2,325,380    11,125,380 
Ownership percentage   79%   21%   — 
Total earnings allocated by class  $459,808   $122,227   $582,035 
Less: Accretion allocated based on ownership percentage   (419,303)   (111,460)   (530,763)
Plus: Accretion applicable to the redeemable class   530,763    —    530,763 
Total earnings by class  $571,268   $10,767    582,035 
                
Weighted average shares   8,800,000    2,325,380      
Earnings per ordinary share - diluted  $0.065   $0.005      

 

 
Fair Value of Financial Instruments

Fair Value of Financial Instruments

 

The fair value of the Company’s assets and liabilities which qualify as financial instruments under ASC Topic 820, “Fair Value Measurement”, approximates the carrying amounts represented in the accompanying balance sheet, primarily due to their short-term nature.

 

The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities.

 

Level 1: Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

 

Level 2: Observable inputs other than Level 1 inputs. Examples of Level 2 input include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active.

 

Level 3: Unobservable inputs based on our assessment of the assumptions that market participants would use in pricing the asset or liability.

 

The fair value of the marketable securities held in Trust Account is determined using the level 1 input.

 

The Company applies ASC 820 in the valuation of the derivative related to the Forward Purchase Agreement for financial statement purposes. The fair value of the derivative liability was determined using a valuation model that incorporates the following: (i) the probability of the consummation of the FGMC and BOXABL merger, (ii) the expected close date; (iii) the expected post-close price at closing, (iv) the projected volatility, and (v) the risk-free rate.

 

Financial instruments measured, on a recurring basis, at fair value in accordance with ASC 820 as promulgated by the FASB as of June 30, 2026 and May 28, 2026 are as follows:

 

   Level 1   Level 2   Level 3   Total 
As of June 30, 2026:                    
Forward Purchase Agreement liability  $—   $—   $9,677,387   $9,677,387 
As of May 28, 2026:                    
Forward Purchase Agreement liability  $—   $—   $8,603,256   $8,603,256 

 

The following table presents a rollforward of the derivative liability associated with the Forward Purchase Agreement for the period from May 28, 2026 (inception) through June 30, 2026:

 

 SCHEDULE OF ROLLFORWARD OF THE DERIVATIVE LIABILITY ASSOCIATED WITH THE FORWARD PURCHASE AGREEMENT

Derivative liability – Forward Purchase Agreement at May 28, 2026  $8,603,256 
Change in fair value of derivative instrument related to Forward Purchase Agreement   1,074,131 
Derivative liability – Forward Purchase Agreement at June 30, 2026  $9,677,387 

 
Operating Segments

Operating Segments

 

ASC Topic 280, “Segment Reporting,” establishes standards for companies to report in their financial statement information about operating segments, products, services, geographic areas, and major customers. Operating segments are defined as components of an enterprise that engage in business activities from which it may recognize revenues and incur expenses, and for which separate financial information is available that is regularly evaluated by the Company’s chief operating decision maker, or group, in deciding how to allocate resources and assess performance.

 

The Company’s chief operating decision makers (“CODMs”) have been identified as Larry G. Swets, Jr., the Company’s then-Chief Executive Officer, and Hassan R. Baqar, the Company’s then-Chief Financial Officer, who reviewed the assets, operating results, and financial metrics for the Company as a whole to make decisions about allocating resources and assessing financial performance through the Closing of the Business Combination on July 17, 2026. Following the Closing, the chief operating decision maker function was assumed by Martin Costas, the Combined Company’s Chief Financial Officer. Accordingly, management has determined that there is only one reportable segment.

 

The CODM assesses performance for the single segment and decides how to allocate resources based on net income or loss that also is reported on the statement of operations as net income or loss. The measure of segment assets is reported on the balance sheet as total assets. When evaluating the Company’s performance and making key decisions regarding resource allocation, the CODM reviews several key metrics included in net income or loss and total assets, which include the following:

 

   June 30, 2026   June 30, 2025 
General and administrative expenses  $4,829,127   $210,395 
Interest earned in the Trust Account  $1,212,390    1,402,254 

 

The CODM reviews interest earned on the Trust Account to measure and monitor stockholder value and determine the most effective strategy of investment with the Trust Account funds while maintaining compliance with the Trust Agreement.

 

General and administrative expenses are reviewed and monitored by the CODM to manage and forecast cash to ensure enough capital is available to complete a business combination or similar transaction within the business combination period. The CODM also reviews general and administrative costs to manage, maintain and enforce all contractual agreements to ensure costs are aligned with all agreements and budget. General and administrative costs, as reported on the statement of operations, are the significant segment expenses provided to the CODM on a regular basis.

 

All other segment items included in net income or loss are reported on the statement of operations and described within their respective disclosures.

 

 
Recently Issued Accounting Standard

Recently Issued Accounting Standard

 

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. ASU 2023-07, which is applicable to entities with a single reportable segment, will primarily require enhanced disclosures about significant segment expenses and enhanced disclosures in interim periods. The guidance in ASU 2023-07 will be applied retrospectively and is effective for annual reporting periods in fiscal years beginning after December 15, 2023, and interim reporting periods in fiscal years beginning after December 31, 2024, with early adoption permitted. The Company adopted this guidance for the year ended 2025. The adoption resulted in disclosure changes only.

 

In December 2023, the Financial Accounting Standards Board issued ASU 2023-09, which requires enhanced disclosures related to the effective tax rate reconciliation and income taxes paid. The guidance is intended to improve transparency regarding the nature and magnitude of factors contributing to differences between the statutory tax rate and the effective tax rate, as well as cash taxes paid by jurisdiction.

 

The Company adopted this standard effective January 1, 2025, on a prospective basis. The adoption did not have a material impact on the Company’s consolidated financial position, results of operations, or cash flows, as the amendments are disclosure-only in nature. Prior-period amounts have been recast to conform to the current-period presentation, where applicable.

 

ASC Topic 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits, if any, as income tax expense. There were no unrecognized tax benefits as of June 30, 2026 and no amounts accrued for interest and penalties. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception. The company’s year-end is December 31 and no statutory tax deadline has yet occurred. As of June 30, 2026, the Company has estimated $264,099 in income tax expense on the income earned in the Trust Account.

 

The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its financial condition, results of operations, cash flows or disclosures.