UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For
the quarterly period ended
For the transition period from to
Commission
file number:
| (Exact name of registrant as specified in its charter) |
| (State or other jurisdiction of | (I.R.S. Employer | |
| incorporation or organization) | Identification No.) |
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Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Indicate
by check mark whether the registrant has (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Indicate
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405 of Regulation S-T (clso§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
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Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| ☒ | Smaller reporting company | ||
| Emerging Growth Company |
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
As of the date hereof, there were shares of common stock par value $ per share, issued and outstanding.
EAST WEST AVE ACQUISITION CORP.
FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED AUGUST 31, 2026
TABLE OF CONTENTS
| Page | ||
| Part I. | Financial Information | F-1 |
| Item 1. | Financial Statements (Unaudited) | F-1 |
| Condensed Consolidated Balance Sheets (Unaudited) | F-1 | |
| Unaudited Condensed Consolidated Statements of Changes in Shareholder’s (Deficit) Equity | F-3 | |
| Unaudited Condensed Consolidated Statements of Cash Flows | F-4 | |
| Notes to Unaudited Condensed Consolidated Financial Statements | F-5 | |
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 1 |
| Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 4 |
| Item 4. | Controls and Procedures | 4 |
| Part II | Other Information | 5 |
| Item 1. | Legal Proceedings | 5 |
| Item 1A. | Risk Factors | 5 |
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 5 |
| Item 3. | Defaults upon Senior Securities | 5 |
| Item 4. | Mine Safety Disclosures | 5 |
| Item 5. | Other Information | 5 |
| Item 6. | Exhibits | 6 |
| Signatures | 7 | |
| i |
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements
EAST WEST AVE ACQUISITION CORP.
BALANCE SHEETS
As of August 31, 2026 | As of November 30, 2025 | |||||||
| (Unaudited) | (Audited) | |||||||
| Assets: | ||||||||
| Cash | $ | $ | ||||||
| Prepaid expense | ||||||||
| Total Current Assets | ||||||||
| Deferred offering costs | ||||||||
| Investments held in trust account | ||||||||
| Total Non-Current Assets | ||||||||
| Total Assets | $ | $ | ||||||
| Liabilities, Common Stock Subject to Possible Redemption and Shareholder’s Equity: | ||||||||
| Liabilities | ||||||||
| Accrued offering expense and accrued liabilities | $ | $ | ||||||
| Income tax payable | ||||||||
| Total Current Liabilities | ||||||||
| Promissory note – related party | ||||||||
| Total Non-Current Liabilities | ||||||||
| Total Liabilities | ||||||||
| Commitments and Contingencies (Note 6) | ||||||||
| Common Stock subject to possible redemption, shares at redemption value of $ per share as of August 31, 2026 | ||||||||
| Shareholder’s Equity | ||||||||
| Preferred stock, $ par value; shares authorized; issued and outstanding | ||||||||
| Common stock, $ par value, shares authorized; and shares issued and outstanding as of August 31, 2026 and November 30, 2025, respectively (1) | ||||||||
| Additional paid-in capital | ||||||||
| Subscriptions receivable | ( | ) | ||||||
| Retained earnings/(Accumulated deficit) | ( | ) | ||||||
| Total Shareholder’s Equity | ||||||||
| Total Liabilities, Common Stock Subject to Possible Redemption and Shareholder’s Equity | $ | $ | ||||||
| (1) |
The accompanying notes are an integral part of the unaudited condensed financial statements.
| F-1 |
EAST WEST AVE ACQUISITION CORP.
UNAUDITED CONDENSED STATEMENTS OF OPERATIONS
| For The Three Months Ended August 31, 2026 |
For The Nine Months Ended August 31, 2026 |
|||||||
| Formation and operating costs | $ | $ | ||||||
| Net loss from operations | ( |
) | ( |
) | ||||
| Other income: | ||||||||
| Interest earned on investment held in Trust Account | ||||||||
| Net profit before tax | $ | $ | ||||||
| Income tax expenses | ||||||||
| Net income | $ | $ | ||||||
| Basic and diluted weighted average shares outstanding, Common Stock subject to possible redemption | ||||||||
| Basic and diluted net income per share, Common Stock subject to possible redemption | $ | $ | ||||||
| Basic and diluted weighted average shares outstanding, non-redeemable Common Stock | ||||||||
| Basic and diluted net loss per share, non-redeemable Common Stock | $ | ) | $ | ( | ) | |||
The accompanying notes are an integral part of the unaudited condensed financial statements.
| F-2 |
EAST WEST AVE ACQUISITION CORP.
UNAUDITED
CONDENSED STATEMENT OF CHANGES IN SHAREHOLDER’S EQUITY
FOR THE PERIOD FROM OCTOBER 30, 2025 (INCEPTION) TO AUGUST 31, 2026
| Retained | ||||||||||||||||||||||||
| Additional | Earnings | Total | ||||||||||||||||||||||
| Common Stock | Paid-in | Subscription | (Accumulated | Shareholders’ | ||||||||||||||||||||
| Shares | Amount | Capital | Receivable | Deficit) | Equity | |||||||||||||||||||
| Balance as of October 30, 2025 (Inception) | $ | $ | $ | $ | $ | |||||||||||||||||||
| Issuance of common stock to Sponsors | ( | ) | ||||||||||||||||||||||
| Net loss | — | ( | ) | ( | ) | |||||||||||||||||||
| Balance as of November 30, 2025 | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||
| Capital injection from Sponsors | — | |||||||||||||||||||||||
| Net loss | — | ( | ) | ( | ) | |||||||||||||||||||
| Balance as of February 28, 2026 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||
| Net loss | — | ( | ) | ( | ) | |||||||||||||||||||
| Balance as of May 31, 2026 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||
| Issuance of Private Placement Units | ||||||||||||||||||||||||
| Issuance of Public Rights, net of issuance costs of $ | — | |||||||||||||||||||||||
| Issuance of Representative Shares | ||||||||||||||||||||||||
| Forfeiture of Founder Shares | ( | ) | ( | ) | ||||||||||||||||||||
| Net income | — | |||||||||||||||||||||||
| Remeasurement for Common Stock subject to Redemption Value | — | ( | ) | ( | ) | ( | ) | |||||||||||||||||
| Accretion of carrying value to redemption value | — | ( | ) | ( | ) | |||||||||||||||||||
| Balance as of August 31, 2026 | $ | $ | $ | $ | $ | |||||||||||||||||||
The accompanying notes are an integral part of the unaudited condensed financial statements.
| F-3 |
EAST WEST AVE ACQUISITION CORP.
UNAUDITED CONDENSED STATEMENT OF CASH FLOWS
| For The Nine Months Ended August 31, 2026 | ||||
| Cash Flows from Operating Activities: | ||||
| Net income | $ | |||
| Adjustments to reconcile net income to net cash used in operating activities: | ||||
| Interest earned on investment held in Trust Account | ( | ) | ||
| Changes in current assets and liabilities: | ||||
| Prepaid expenses | ( | ) | ||
| Accrued offering expense and accrued liabilities | ||||
| Income tax payable | ||||
| Net cash used in operating activities | $ | ( | ) | |
| Cash Flows from Investing Activities: | ||||
| Purchases of investment held in Trust Account | ( | ) | ||
| Net cash used in investing activities | $ | ( | ) | |
| Cash flows from Financing Activities: | ||||
| Payment of offering costs | $ | ( | ) | |
| Proceeds from issuance of common stock to Sponsor | ||||
| Proceeds from sale of public units through public offerings | ||||
| Proceeds from sale of private placement units | ||||
| Repayment of promissory note to related party | ( | ) | ||
| Net cash provided by financing activities | $ | |||
| Net change in cash | ||||
| Cash, beginning of the period | ||||
| Cash, end of the period | $ | |||
| Supplemental disclosure of non-cash information: | ||||
| Issuance of representative shares | $ | |||
| Private placement proceeds offset with loan payable to Sponsor A | ||||
| Deferred offering costs settled through prepaid expenses | $ | |||
| Remeasurement for Common Stock subject to Redemption Value | $ | |||
| Accretion of carrying value to redemption value of common stock subject to possible redemption | $ | |||
The accompanying notes are an integral part of the unaudited condensed financial statements.
| F-4 |
EAST WEST AVE ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS
East West Ave Acquisition Corp. (the “Company”) is a blank check company incorporated in Nevada on October 30, 2025. The Company was formed for the purpose of effecting a merger, amalgamation, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses (“Business Combination”). While the Company may pursue an acquisition opportunity in any business, industry, sector or geographical location, the Company intends to focus on industries that complement its management team’s background, and to capitalize on the ability of the Company’s management team to identify and acquire a business. The Company is an early stage and emerging growth company and, as such, the Company is subject to all of the risks associated with early stage and emerging growth companies.
As of August 31, 2026, the Company had not yet commenced any operations. All activity for the period from October 30, 2025 (inception) through August 31, 2026 related to the Company’s formation and the Initial Public Offering (the “IPO”). The Company will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest. The Company will generate non-operating income in the form of interest income on cash from the proceeds derived from the IPO. The Company has selected November 30 as its fiscal year end.
The Company’s sponsors are East West Avenue LLC (the “Sponsor A”), a Delaware limited liability company, and NFR Capital Limited (the “Sponsor B”), a Hong Kong company (the “Sponsors”, each a “Sponsor”, and together with the Company’s directors and officers, the “Insiders”).
The
registration statement for the Company’s initial public offering (the “IPO”), became effective on June 16, 2026. On
August 3, 2026, the Company consummated its initial public offering of units at $ per unit (the “Units” and,
with respect to the shares of common stock included in the Units being offered, the “Public Shares”) which is discussed in
Note 3 (the “Initial Public Offering”). The Units were sold at an offering price of $ per Unit, generating gross proceeds
of $
Substantially
concurrently with the closing of the IPO, the Company completed the private sale of units (the “Private Units”) to
the Company’s sponsors including Private Units issued to Sponsor A; and Private Units issued to Sponsor B. The Private
Units were sold at $ per Unit, generating gross proceeds of $
Transaction
costs amounted to $
The
Company’s management has broad discretion with respect to the specific application of the net proceeds of the IPO and sale of the
Private Units, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination.
Upon
the closing of the IPO and the Private Placement (as defined below) on August 3, 2026, a total of $
| F-5 |
The
Company will provide its public shareholders with the opportunity to redeem all or a portion of their Public Shares upon the completion
of the initial Business Combination either (i) in connection with a shareholder meeting called to approve the initial Business Combination
or (ii) without a shareholder vote by means of a tender offer. The decision as to whether the Company will seek shareholder approval
of a proposed initial Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The public
shareholders will be entitled to redeem their Public Shares at a per-share price, payable in cash, equal to the aggregate amount then
on deposit in the Trust Account as of two business days prior to the consummation of the initial Business Combination, including interest
earned on the funds held in the Trust Account (which interest shall be net of up to $
The
Company will have until 12 months from the closing of the IPO (or 15 months if the Company enters into a definitive business combination
agreement within 12 months from the closing of this offering) or with respect to any other material provisions relating to stockholders’
rights or pre-initial Business Combination activity (the “Combination Period”). If the Company is unable to complete its
initial Business Combination within the Combination Period, the Company will (i) cease all operations except for the purpose of winding
up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, 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 funds held
in the Trust Account (which interest shall be net of up to $
The Company’s Insiders have entered into a letter agreement with the Company, pursuant to which they have agreed to (i) waive their redemption rights with respect to their Founder Shares (as defined below), shares of Common Stock (the “Private Shares”) included in the Private Units (as defined below) and Public Shares in connection with the completion of the initial Business Combination; (ii) waive their redemption rights with respect to their Founder Shares and Private Shares and Public Shares in connection with a shareholder vote to approve an amendment to the Company’s amended and restated articles of incorporation; (iii) waive their rights to liquidating distributions from the Trust Account with respect to their Founder Shares and Private Shares if the Company fails to complete its initial Business Combination within the Combination Period, although they will be entitled to liquidating distributions from the Trust Account with respect to any Public Shares they hold if the Company fails to complete its initial Business Combination within the prescribed time frame and to liquidating distributions from assets outside the Trust Account; and (iv) vote any Founder Shares and Private Shares held by them and any Public Shares purchased during or after the IPO (including in open market and privately-negotiated transactions) in favor of the initial Business Combination (except that any Public Shares such parties may purchase in compliance with the requirements of Rule 14e-5 under the Exchange Act would not be voted in favor of approving the Business Combination transaction).
In order to protect the amounts held in the Trust Account, the Sponsors have agreed that they will be liable to the Company if and to the extent any claims by a third party for services rendered or products sold to the Company, or a prospective target business with which the Company has entered into a written letter of intent, confidentiality or other similar agreement or Business Combination agreement, reduce the amount of funds in the Trust Account to below the lesser of (i) $ per public share and (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 $ per public share due to reductions in the value of the trust assets, less permitted withdrawals, provided that such liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights to the monies held in the Trust Account (whether or not such waiver is enforceable) nor will they apply to any claims under the Company’s indemnity of the underwriters of the IPO against certain liabilities, including liabilities under the Securities Act. However, the Company has not asked the Sponsors to reserve for such indemnification obligations, nor has the Company independently verified whether its Sponsors has sufficient funds to satisfy its indemnity obligations and the Company believes that the Sponsors’ only assets are securities of the Company. The Sponsors may not 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 $ per public share. In such event, the Company may not be able to complete its initial Business Combination, and you would receive such lesser amount per share in connection with any redemption of your public shares. None of the Company’s officers or directors will indemnify the Company for claims by third parties including, without limitation, claims by vendors and prospective target businesses.
| F-6 |
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Going Concern Considerations
As
of August 31, 2026, the Company had $
The
Company initially has until August 3, 2027 to consummate the initial Business Combination. However, the Company may extend the period
of time to consummate a Business Combination (up to by November 3, 2027 to complete a Business Combination). If the Company is unable
to consummate the Company’s initial Business Combination by August 3, 2027 (or up to by November 3, 2027, if extended), the Company
will, (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business
days thereafter, 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 funds held in the Trust Account (which interest shall be net of up to $
In connection with the Company’s assessment of going concern considerations in accordance with Financial Accounting Standards Board’s Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” management has determined that the mandatory liquidation and subsequent dissolution that would be required if the Company is unable to complete an initial Business Combination by the end of the Combination Period, together with the redemption features of the Public Shares that are classified as temporary equity, raise substantial doubt about the Company’s ability to continue as a going concern for a period of at least one year from the date these unaudited condensed financial statements are issued. There is no assurance that the Company’s plans to consummate a Business Combination will be successful within the Combination Period. The financial statement does not include any adjustments that might result from the outcome of this uncertainty.
Basis of Presentation
These accompanying unaudited condensed financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information or footnote disclosures normally included in unaudited condensed financial statements prepared in accordance with US GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented.
The interim results for the three and nine months ended August 31, 2026 are not necessarily indicative of the results to be expected for the year ending November 30, 2026 or for any future interim periods. These unaudited condensed financial statements and accompanying notes should be read in conjunction with the Company’s audited financial statements and accompanying notes included in its final prospectus for its IPO filed with the SEC on August 3, 2026 (File No. 333-295205).
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 shareholder 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.
| F-7 |
Use of Estimates
The preparation of the unaudited condensed financial statements in conformity with U.S. 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 unaudited condensed financial statements and the reported amounts of revenues and expenses during the reporting period.
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 unaudited condensed 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
Cash
includes deposits held by financial institutions that can be added to or withdrawn without limitation. The Company considers all short-term
investments with an original maturity of three months or less when purchased to be cash equivalents. The Company had a cash balance of
$
Cash Held in Trust Account
As
of August 31, 2026, the assets held in the Trust Account include $
Prepaid expense
Prepaid
expenses are comprised of prepaid consultancy fees, professional fees and office supplies. These amounts are recognized as expenses on
a straight-line basis over the relevant non-cancellable contract term or expected benefit period, so the balances are realized over the
life of the underlying arrangements, with the portion expected to be expensed within the next twelve months classified as current and
the remainder as non-current. Prepaid expenses are not subject to expected credit loss assessment, as they represent advance payments
for goods or services to be received from counterparties rather than contractual rights to receive cash. The Company had prepaid expenses
of $
Deferred Offering Costs
Deferred
offering costs consist principally of professional and registration fees that are related to the IPO. The Company complies with the requirements
of the ASC 340-10-S99 and SEC Staff Accounting Bulletin (“SAB”) Topic 5A — “Expenses of Offering.” Financial
Accounting Standards Board (“FASB”) ASC 470-20, “Debt with Conversion and Other Options,” addresses the allocation
of proceeds from the issuance of convertible debt into its equity and debt components. The Company applies this guidance to allocate
IPO proceeds from the Public Units between common stock and rights, using the residual method by allocating IPO proceeds first to assigned
value of the rights and then to the common stock. Offering costs allocated to the shares of common stock subject to possible redemption
will be charged to temporary equity, and offering costs allocated to the rights included in the Public Units and Private Units will be
charged to shareholder’s equity as the rights, after management’s evaluation, will be accounted for under equity treatment.
Should the IPO prove to be unsuccessful, these deferred costs, as well as additional expenses to be incurred, will be charged to operations.
As of August 31, 2026, the Company had no deferred offering costs, as such costs were reclassified to equity upon the closing of the
IPO. As of November 30, 2025, the Company had
deferred offering costs of $
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.
| F-8 |
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’s management determined that the Nevada is the Company’s major tax jurisdiction. 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 August 31, 2026 and November 30, 2025 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.
For the three and nine months ended August 31, 2026,
the Company recorded a provision for income taxes of $
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”. Common Stock subject to mandatory redemption is classified as a liability instrument and is measured at fair value. Conditionally redeemable Common Stock (including Common Stock that feature 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 shareholders’ equity. The Company’s Common Stock feature certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, Common Stock subject to possible redemption are presented at redemption value as temporary equity, outside of the shareholders’ equity section of the Company’s balance sheets as of August 31, 2026.
The Company’s redeemable Common Stock is subject to SEC and its staff’s guidance on redeemable equity instruments, which has been codified in ASC 480-10-S99. If it is probable that the equity instrument will become redeemable, the Company has the option to either accrete changes in the redemption value over the period from the date of issuance (or from the date that it becomes probable that the instrument will become redeemable, if later) to the earliest redemption date of the instrument or to recognize changes in the redemption value immediately as they occur and adjust the carrying amount of the instrument to equal the redemption value at the end of each reporting period. The Company has elected to recognize the changes immediately. The accretion or remeasurement is treated as a deemed dividend (i.e., a reduction to retained earnings, or in absence of retained earnings, additional paid-in capital).
| Gross proceeds | $ | |||
| Less | ||||
| Proceeds allocated to public rights | ( | ) | ||
| Allocation of offering costs related to redeemable shares | ( | ) | ||
| Plus | ||||
| Accretion of carrying value to redemption value | ||||
| Accretion of carrying value to redemption value – interest | ||||
| Common Stock subject to possible redemption | $ |
| F-9 |
Derivative Financial Instruments
The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with ASC Topic 815, “Derivatives and Hedging.” For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value on the grant date and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative liabilities are classified in the balance sheet as current or non-current based on whether or not net cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date. The underwriters’ over-allotment option is deemed to be a freestanding financial instrument indexed to the contingently redeemable shares and will be accounted for as a liability pursuant to ASC 480 if not fully exercised at the time of the IPO. The over-allotment option was waived in full by the underwriters at the closing of the IPO.
Rights
The Company accounts for rights as either equity-classified or liability-classified instruments based on an assessment of the rights specific terms and applicable authoritative guidance in FASB ASC 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the rights are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the rights meet all of the requirements for equity classification under ASC 815, including whether the rights are indexed to the Company’s own common stock and whether the rights holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of rights issuance and as of each subsequent quarterly period end date while the rights are outstanding.
For issued or modified rights that meet all of the criteria for equity classification, the rights are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified rights that do not meet all the criteria for equity classification, the rights are required to be treated as liabilities, and recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the rights are recognized as a non-cash gain or loss on the statements of operations.
As
the rights issued upon the IPO and the Private Placement meet the criteria for equity classification under ASC 480, therefore, the rights
are classified as equity. As of August 31, 2026, an aggregate of
Concentration of Credit Risk
Financial
instruments that potentially subject the Company to concentration of credit risk consist of a cash account in a financial
institution which at times may exceed the Federal depository insurance coverage of $
The Company complies with accounting and disclosure requirements of FASB ASC 260, Earnings Per Share. In order to determine the net loss attributable to both the redeemable shares and non-redeemable shares, the Company first considered the undistributed loss allocable to both the redeemable Common Stock and non-redeemable Common Stock and the undistributed loss is calculated using the total net income less any dividends paid. The Company then allocated the undistributed loss ratably based on the weighted average number of shares outstanding between the redeemable and non-redeemable Common Stock. Any remeasurement of the accretion to redemption value of the Common Stock subject to possible redemption was considered to be dividends paid to the public stockholders. For the three and nine months ended August 31, 2026, the Company did not have any dilutive securities and other contracts that could, potentially, be exercised or converted into Common Stock and then share in the earnings of the Company. As a result, diluted loss per share is the same as basic loss per share for the period presented. The net loss per share presented in the statement of operations is based on the following:
For the three months ended |
For the nine months ended |
|||||||
| August 31, 2026 | August 31, 2026 | |||||||
| Net Income | $ | $ | ||||||
| Accretion of Common Stock subject to redemption value | ( | ) | ( |
) | ||||
| Remeasurement for Common Stock subject to possible redemption | ( | ) | ( |
) | ||||
| Net loss including accretion of Common Stock to redemption value | $ | ( | ) | $ | ( |
) | ||
| For the three months ended August 31, 2026 | ||||||||
Redeemable Common Stock | Non- Redeemable Common Stock | |||||||
| Basic and diluted net income (loss) per share: | ||||||||
| Numerators: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Accretion of Common Stock subject to redemption value | ||||||||
| Remeasurement for Common Stock subject to possible redemption | ||||||||
| Allocation of net income (loss) | $ | $ | ( | ) | ||||
| Denominators: | ||||||||
| Weighted-average shares outstanding | ||||||||
| Basic and diluted net income (loss) per share | $ | $ | ) | |||||
| For the nine months ended August 31, 2026 | ||||||||
Redeemable Common Stock | Non- Redeemable Common Stock | |||||||
| Basic and diluted net income (loss) per share: | ||||||||
| Numerators: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Accretion of Common Stock subject to redemption value | ||||||||
| Remeasurement for Common Stock subject to possible redemption | ||||||||
| Allocation of net income (loss) | $ | $ | ( | ) | ||||
| Denominators: | ||||||||
| Weighted-average shares outstanding | ||||||||
| Basic and diluted net income (loss) per share | $ | $ | ( | ) | ||||
| F-10 |
Fair Value of Financial Instruments
The fair value of the Company’s assets and liabilities, which qualify as financial instruments under FASB ASC 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the balance sheet, primarily due to its short-term nature.
Fair value is defined as the price that would be received for sale of an asset or paid for transfer of a liability, in an orderly transaction between market participants at the measurement date. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The Company’s financial instruments are classified as either Level 1, Level 2 or Level 3. These tiers include:
| - | Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets; | |
| - | Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and | |
| - | Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. |
Recent Accounting Pronouncements
In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Improvements to Interim Disclosure Requirements (“ASU 2025-11”). The amendments clarify disclosure requirements for interim financial statements. For public business entities, the amendments are effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. For all other entities, the amendments are effective for interim reporting periods within annual reporting periods beginning after December 15, 2028. Early adoption is permitted for all entities. The Company is currently evaluating the impact of this accounting standard update on its financial statements and related disclosures.
NOTE 3. INITIAL PUBLIC OFFERING
Pursuant to the IPO, the Company sold Units at a purchase price of $ per unit. Each Unit consist of one share of common stock and one right to receive one-fourth (1/4) of a share of common stock (each, a “Public Right”). Each holder of a Public Right will automatically receive one-fourth (1/4) of one share of common stock upon consummation of the initial Business Combination.
The Company granted the underwriter a 45-day option from the date of the final prospectus relating to the IPO to purchase up to additional Units to cover over-allotments, if any, at the IPO price, less underwriting discounts and commissions. The over-allotment option was waived in full by the underwriters at the closing of the IPO.
NOTE 4. PRIVATE PLACEMENT
Simultaneously
with the closing of the IPO, Sponsor A and Sponsor B purchased
NOTE 5. RELATED PARTY TRANSACTIONS
Founder Shares
On
November 8, 2025, the Company’s Sponsor A paid $
On March 5, 2026, Sponsor A entered into a
securities assignment agreement with Sponsor B, pursuant to which, the Sponsor B acquired founder shares for $, for a
per share consideration of $. On July 30, 2026,
| F-11 |
The Company’s Insiders have agreed not to transfer, assign or sell any of their Founder Shares until: (i) with respect to 50% of the Founder Shares, the earlier of (x) six months after the date of the consummation of the initial Business Combination or (y) the date on which the closing price of the Company’s common stock equals or exceeds $ per share (as adjusted for stock splits, stock dividends, reorganizations and recapitalizations) for any 20 trading days within any 30-trading day period commencing after the initial Business Combination and (ii) with respect to the remaining 50% of the Founder Shares, six months after the date of the consummation of the initial Business Combination; except to certain permitted transferees and under certain circumstances. Although no such transfers or cancellations are contemplated, the Company could agree to permit such transfer or cancellation to facilitate the closing of the Business Combination. Any permitted transferees will be subject to the same restrictions and other agreements of the Company’s initial stockholders with respect to any Founder Shares. Notwithstanding the foregoing, if the Company consummates a transaction after the initial Business Combination which results in its stockholders having the right to exchange their shares for cash, securities or other property, the Founder Shares will be released from the lock-up.
Promissory Note — Related Party
On
November 8, 2025, the Sponsor A agreed to loan the Company an aggregate of up to $
Related Party Loans
In
order to finance transaction costs in connection with an intended initial Business Combination, the Insiders or an affiliate of the
Insiders may, but are not obligated to, loan the Company funds as may be required (the “Working Capital Loans”). Up to
$
Administrative Services Agreement
The
Company is obligated, commencing from the closing date of the Initial Public Offering to pay the Sponsor A, a monthly fee of $
| F-12 |
NOTE 6. COMMITMENTS AND CONTINGENCIES
Registration Rights
The holders of the Founder Shares, Private Units, and units that may be issued on conversion of Working Capital Loans (and in each case holders of their component securities, as applicable) have registration rights to require the Company to register a sale 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 prior to or on the effective date of the IPO. The holders of these securities are entitled to make up to three demands, excluding short form demands, that the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the completion of the Business Combination. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
Underwriting Agreement
The Company had granted the underwriters a 45-day option to purchase up to additional Units to cover over-allotments at the IPO price, less the underwriting discounts and commissions. The underwriters waived the over-allotment option in full at the closing of the IPO.
At
the closing of the IPO, the underwriters became entitled to underwriting compensation equal to
In
addition to the underwriting compensation payable at the closing of the IPO, the Company agreed to pay a deferred underwriting commission,
payable solely in equity, upon the completion of the initial Business Combination. The deferred underwriting commission will consist
of shares of common stock equal to
In
addition, the Company has agreed to bear all costs and expenses relating to the IPO, including legal and accounting fees, printing and
filing expenses, SEC and FINRA filing fees, transfer agent and rights agent fees, and other customary expenses incurred in connection
with the IPO. The Company has also agreed to reimburse the underwriters for out-of-pocket expenses incurred in connection with this offering,
subject to a cap of $
Representative Shares
The
Company issued to the Representative an aggregate of Representative Shares at the closing of the IPO. The Company accounted for
such shares as an offering cost of the IPO, with a corresponding credit to shareholder’s equity. The fair value of the Representative
Shares was estimated at $
| F-13 |
The Representative Shares are identical to the Public Shares underlying the Units sold in the IPO, except that such shares have been deemed underwriting compensation by FINRA and are subject to the lock-up restrictions imposed by FINRA Rule 5110(e)(1). Pursuant to that rule, the Representative Shares may not be sold, transferred, assigned, pledged, hypothecated or otherwise disposed of, nor may any transaction be entered into that would result in the economic disposition of such shares, for a period of 180 days immediately following the commencement of sales of the public units, except as permitted by FINRA Rule 5110(e)(2).
In addition, The Company will issue to the Representative an aggregate of deferred underwriting compensation shares (or up to deferred underwriting compensation shares if the underwriters’ over-allotment option is exercised in full at the closing of the IPO) upon the completion of the initial Business Combination. The deferred underwriting compensation shares have been deemed underwriting compensation by FINRA and are subject to the applicable restrictions under FINRA Rule 5110.
The underwriters have agreed to (i) waive their redemption rights with respect to their Representative Shares in connection with the completion of the initial Business Combination, (ii) waive their redemption rights with respect to their Representative Shares in connection with a stockholder vote to approve an amendment to the Company’s amended and restated articles of incorporation, (iii) waive their rights to liquidating distributions from the Trust Account with respect to their Representative Shares if the Company fails to complete its initial Business Combination within the Combination Period, and (iv) vote any Representative Shares held by them in favor of the initial Business Combination.
NOTE 7. SHAREHOLDER’S EQUITY
Preferred Stock — The Company is authorized to issue a total of shares of preferred stock with a par value of $ per share. As of August 31, 2026 and November 30, 2025, there were shares of preferred stock issued or outstanding.
Common Stock — The Company is authorized to issue shares of common stock with a par value of $ per share (the “Common Stock”). Holders of shares of common stock are entitled to one vote for each share.
As of August 31, 2026, there were shares of common stock issued and outstanding (excluding shares subject to possible redemption) consist of Founder Shares, Private Shares included in the Private Units, and Representative Shares. As the underwriters waived the over-allotment option in full at the closing of the IPO, Founder Shares were forfeited by Sponsor A so that the number of Founder Shares represents 20% of the Company’s issued and outstanding Common Stock after the IPO (excluding the Representative Shares, Private Shares, or any share underlying the units issuable upon conversion of Working Capital Loans). As of November 30, 2025, there were shares of common stock issued and outstanding, of which an aggregate of up to shares of common stock are subject to forfeiture to the extent that the underwriters’ over-allotment option is not exercised in full or in part so that the number of Founder Shares will equal 20% of the Company’s issued and outstanding Common Stock after the IPO (excluding the Representative Shares, Private Shares, or any share underlying the units issuable upon conversion of Working Capital Loans).
Right
— As of August 31, 2026, an aggregate of
The Company will not issue fractional shares in connection with an exchange of rights. Fractional shares will either be rounded down to the nearest whole share or otherwise addressed in accordance with the applicable provisions of the Nevada Revised Statutes. As a result, holder of rights must hold rights in multiples of 4 in order to receive shares for all of their rights upon closing of the Business Combination. If the Company is unable to complete an initial Business Combination within the required time period and the Company liquidates the funds held in the Trust Account, holders of rights will not receive any of such funds for their rights, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with respect to such rights, and the rights will expire worthless. Further, there are no contractual penalties for failure to deliver securities to the holders of the rights upon consummation of the initial Business Combination. Additionally, in no event will the Company be required to net cash settle the rights. Accordingly, the rights may expire worthless.
| F-14 |
NOTE 8 — FAIR VALUE MEASUREMENTS
As
of August 31, 2026, investment securities in the Company’s Trust Account consisted of a treasury securities fund in the amount
of $
| Carrying Value | Quoted Prices in Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Other Unobservable Inputs (Level 3) | |||||||||||||
| Assets: | ||||||||||||||||
| Investments held in Trust Account – Money Market Funds | $ | $ | $ | $ | ||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||
The following table presents information about the Company’s non-recurring fair value measurements as of August 3, 2026, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:
| Carrying Value | Quoted Prices in Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Other Unobservable Inputs (Level 3) | |||||||||||||
| Equity: | ||||||||||||||||
| Fair value of Public Rights for Common Stock subject to possible redemption allocation | $ | $ | $ | $ | ||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||
The Company allocated the proceeds from the Initial
Public Offering between the Public Shares and the Public Rights based on their relative fair values at the IPO date. The Public Rights
were valued using a probability-weighted approach. Each Unit has a $ offering price and consists of one share of common stock and
one right. Each right entitles the holder to receive one-fourth (1/4) of one share of common stock when the initial Business Combination
is completed. The value of a Public Right was therefore calculated as the value of one-fourth of a common stock multiplied by management’s
estimated probability of completing a Business Combination. Management estimated that probability at approximately 10%. The estimate was
based on the historical performance of other special purpose acquisition companies, based on this, the fair value of a Public Right was
$, and the fair value of a Public Share was $. Of the $
NOTE 9. SEGMENT INFORMATION
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 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 maker has been identified as the Chief Executive Officer (“CODM”), who reviews the
operating results for the Company as a whole to make decisions about allocating resources and assessing financial performance. Accordingly,
management has determined that the Company only has
When evaluating the Company’s performance and making key decisions regarding resource allocation the CODM reviews several key metrics, which include the following:
| For
The Three Months Ended August 31, 2026 |
For The Nine |
|||||||
| Formation and operating costs | $ | $ | ||||||
| Loss from operations | ( |
( |
) | |||||
| Other income | ||||||||
| Interest earned on investment held in Trust Account | ||||||||
| Net profit before tax | $ | $ | ||||||
| Income tax expenses | ||||||||
| Net income | $ | $ | ||||||
The key measures of segment profit or loss reviewed by the CODM are formation and operating costs. Formation and operating costs are reviewed and monitored by the CODM to manage and forecast cash to ensure enough capital is available to complete an IPO and eventually a Business Combination within the Combination Period. The CODM also reviews formation and operating costs to manage, maintain and enforce all contractual agreements to ensure costs are aligned with all agreements and budget.
Note 10. SUBSEQUENT EVENTS
The Company evaluated subsequent events and transactions that occurred after the balance sheet date through October 15, 2026, the date that the unaudited condensed financial statements were available to be issued. Based upon this review, the Company did not identify any subsequent events that would have required adjustment or disclosure in the financial statements.
| F-15 |
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
References in this Quarterly Report on Form 10-Q (the “Quarterly Report”) to “we,” “us,” “our” or the “Company” refer to East West Ave Acquisition Corp. References to our “management” or our “management team” refer to our officers and directors, references to the “Sponsor A” refer to East West Avenue LLC, references to the “Sponsor B” refer to NFR Capital Limited, and references to the “Sponsors” refer to Sponsor A and Sponsor B. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the unaudited condensed financial statements and the notes thereto contained elsewhere in this Quarterly Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.
Special Note Regarding Forward-Looking Statements
This Quarterly Report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that are not historical facts, and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements other than statements of historical fact included in this Quarterly Report, including statements in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section regarding the Company’s financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. Words such as “expect,” “believe,” “anticipate,” “intend,” “estimate,” “seek” and variations and similar words and expressions are intended to identify such forward-looking statements. Such forward-looking statements relate to future events or future performance, but reflect management’s current beliefs, based on information currently available. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the Risk Factors section of the Company’s final prospectus for its IPO filed with the Securities and Exchange Commission (the “SEC”) on August 3, 2026 (File No. 333-295205). The Company’s securities filings can be accessed on the EDGAR section of the SEC’s website at www.sec.gov. Except as expressly required by applicable securities law, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.
Overview
We are a blank check company incorporated on October 30, 2025 as a Nevada corporation and formed for the purpose of effecting a merger, amalgamation, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses or entities. Although we will not limit our search to any particular industry, we intend to focus our search for a target business in the financial technology, compute infrastructure, and energy solutions sectors. In addition, although we will not limit our search to any particular geographic region, we will not undertake our initial business combination with any company being based in or having the majority of the company’s operations in China (including Hong Kong and Macau).
We will utilize cash derived from the proceeds of our initial public offering (the “IPO”), our securities, debt or a combination of cash, securities and debt, in effecting our initial business combination.
Results of Operations
We have neither engaged in any operations nor generated any revenues to date. Our only activities from October 30, 2025 (inception) through August 31, 2026 were organizational activities and those necessary to prepare for the IPO, described below. We do not expect to generate any operating revenues until after the completion of our Business Combination. Subsequent to the IPO, we generate non-operating income in the form of interest income on marketable securities held in our trust account established for the benefit of the public shareholders and the underwriters of the IPO with Equiniti Trust Company, LLC acting as trustee (the “Trust Account”). We incur expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses.
| 1 |
For the three months ended August 31, 2026, we had net income of $136,744, which was comprised of interest income earned on investments held in the Trust Account of $286,509, partially offset by formation and operating costs of $118,345 and income tax expense of $31,420. For the nine months ended August 31, 2026, we had net income of $118,199, which was comprised of interest income earned on investments held in the Trust Account of $286,509, partially offset by formation and operating costs of $136,890 and income tax expense of $31,420.
Liquidity and Capital Resources
As of August 31, 2026 and November 30, 2025, we had cash available to us of $684,291 and $20,000, respectively, and had working capital of $735,404 and working capital of $120,000, respectively.
On August 3, 2026, we consummated the IPO of 10,000,000 units at $10.00 per Unit, which is discussed in Note 3 to the accompanying unaudited condensed financial statements, generating gross proceeds of $100,000,000. Simultaneously with the closing of the IPO, we consummated the sale of an aggregate of 272,500 private placement units, at a price of $10.00 per private placement unit in a private placement to the sponsors, generating gross proceeds of $2,725,000. Upon the closing, the underwriter waived its over-allotment option in full, as a result of which, 375,000 founder shares issued to Sponsor A were forfeited without any consideration.
Of this amount, $100,500,000 is held in the Trust Account. For the avoidance of doubt, the funds held in the Trust Account (including the interest earned on the funds held in the Trust Account) will not be used to pay any federal, state, local, excise or other tax associated with the Company being a Nevada corporation. The Sponsors will provide sufficient loans as working capital to the Company to pay any such taxes owed from an account other than the Trust Account. The remaining $852,500 is not held in the Trust Account.
We intend to use substantially all of the net proceeds of the IPO, including the funds held in the Trust Account, to acquire a target business or businesses and to pay our expenses relating thereto. To the extent that our share capital is used in whole or in part as consideration to affects our initial business combination, the remaining proceeds held in the Trust Account, as well as any other net proceeds not expended, will be used as working capital to finance the operations of the target business. Such working capital funds could be used in a variety of ways including continuing or expanding the target business’ operations, for strategic acquisitions and for marketing, research and development of existing or new products. Such funds could also be used to repay any operating expenses or finders’ fees that we had incurred prior to the completion of our initial business combination if the funds available to us outside of the Trust Account were insufficient to cover such expenses.
Over the next 12 months from the closing of the IPO (or 15 months if we enter into a definitive business combination agreement by August 3, 2027), we will be using the funds held outside of the Trust Account for identifying and evaluating prospective acquisition candidates, performing business due diligence on prospective target businesses, traveling to and from the offices, plants or similar locations of prospective target businesses, reviewing corporate documents and material agreements of prospective target businesses, selecting the target business to acquire and structuring, negotiating and consummating the business combination.
Out of the funds available outside the Trust Account, we anticipate that we will incur approximately:
| ● | $120,000 of expenses for legal, accounting, due diligence, travelling and other expenses associated with structuring, negotiating and documenting successful business combinations; |
| ● | $50,000 of expenses for legal and accounting related to regulatory reporting obligations; |
| ● | $80,000 for NASDAQ and other continued listing expenses; |
| ● | $180,000 for office space, utilities and secretarial and administrative support; |
| ● | $120,000 for directors’ and officers’ liability insurance; |
| ● | $108,000 for certain director compensation; and |
| ● | $194,500 for other miscellaneous expenses. |
| 2 |
If our estimates of the costs of undertaking in-depth due diligence and negotiating our initial business combination is less than the actual amount necessary to do so, or the amount of interest available to us from the Trust Account is less than we expect as a result of the current interest rate environment, we may have insufficient funds available to operate our business prior to our initial business combination. Moreover, we may need to obtain additional financing either to consummate our initial business combination or because we become obligated to redeem a significant number of our public shares upon consummation of our initial business combination, in which case we may issue additional securities or incur debt in connection with such business combination. Subject to compliance with applicable securities laws, we would only consummate such financing simultaneously with the consummation of our initial business combination. Following our initial business combination, if cash on hand is insufficient, we may need to obtain additional financing in order to meet our obligations.
Related Party Transactions
On November 8, 2025, the Sponsor A, paid $5,000 in exchange for 20,000 founder shares, or approximately $0.25 per share. On November 20, 2025, we issued a dividend of approximately 142.75 founder shares for every issued and outstanding founder share, or an aggregate of 2,855,000 dividend shares, in exchange for an additional consideration of $20,000, resulting in the Sponsor A holding an aggregate of 2,875,000 founder shares for a per share consideration of $0.0087. On July 30, 2026, Our Sponsor A entered into a securities transfer agreement with each of our directors, pursuant to which, the Sponsor A transferred (w) 100,000 founder shares to Ms. Huang, (x) 40,000 founder shares to Mr. Kerkaert, (y) 20,000 founder shares to each of Mr. Parikh and Honna, and (z) 10,000 founder shares to Mr. Verjee.
The number of founder shares outstanding was determined based on the expectation that the total size of the IPO would be a maximum of 11,500,000 units if the underwriters’ over- allotment option is exercised in full, and therefore that such founder shares would represent 20% of the outstanding shares after the IPO (not including the representative shares, private shares, or any share underlying the units issuable upon conversion of working capital loans). Upon the closing, the underwriter waived its over-allotment option in full, as a result of which, 375,000 founder shares issued to Sponsor A were forfeited without any consideration.
In connection with the closing of the IPO, our sponsors purchased 272,500 private units, with each unit consisting of one share of common stock (the “private shares”) and one right to receive one-fourth (1/4) of a share of common stock upon the consummation of an initial business combination (each a “private right”), at $10.00 per unit, including 192,500 units for the Sponsor A, and 80,000 for the Sponsor B, respectively, for an aggregate purchase price of $2,725,000 (whether or not the over-allotment option is exercised). The private units are identical to the units sold in the IPO except that the private units (including the underlying securities) may not, subject to certain limited exceptions, be transferred, assigned or sold by the holders until after the completion of our initial business combination. A portion of the purchase price of the private units was added to the proceeds from the IPO so that at the time of closing $100,500,000 ($10.05 per share) was held in the Trust Account. If we do not complete our initial business combination within the combination window, the private units (and the underlying securities) will expire worthless. Upon separation, the private units will be separated into 272,500 private shares and 272,500 private rights.
On November 8, 2025, our Sponsor A agreed to loan us an aggregate amount of up to $500,000 to be used for a portion of the expenses of the IPO. These loans were non-interest bearing, unsecured and due at the earlier of December 31, 2026 or the closing of the IPO. As of August 31, 2026, we have converted $ 345,749 into private placement units upon the closing of the IPO and repaid the remaining promissory note in full and had no outstanding balance under the promissory note. As of November 30, 2025, the Company had borrowed $158,562 under the promissory note.
We have agreed to reimburse our Sponsor A $10,000 per month from August 3, 2026, for up to 15 months, for office space, utilities and secretarial and administrative support made available to us. Upon completion of our initial business combination or our liquidation, we will cease paying these monthly fees. We have recognized operating costs under the Administrative Services Agreement in the amount of $10,000 for the three and nine months ended August 31, 2026.
| 3 |
Our insiders or their affiliates, will be reimbursed for any out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable business combinations. Our audit committee will review on a quarterly basis all payments that were made to our insiders or their affiliates and will determine which expenses and the amount of expenses that will be reimbursed. There is no cap or ceiling on the reimbursement of out-of-pocket expenses incurred by such persons in connection with activities on our behalf.
In addition, in order to finance transaction costs in connection with an intended initial business combination, our insiders or their affiliates may, but are not obligated to, loan us funds as may be required on a non-interest basis. If we complete an initial business combination, we would repay such loaned amounts. In the event that the initial business combination does not close, we may use amounts held outside the Trust Account to repay such loaned amounts but no proceeds from our Trust Account would be used for such repayment. Up to $3,000,000 of such loans may be convertible into private units at a price of $10.00 per unit at the option of the lender. Such units would be identical to the private units. Except as set forth above, the terms of such loans, if any, have not been determined and no written agreements exist with respect to such loans. Prior to the completion of our initial business combination, we do not expect to seek loans from parties other than our sponsors or their affiliates as we do not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in the Trust Account. As of August 31, 2026 and November 30, 2025, we had no borrowings under the working capital loans.
Pursuant to a registration rights agreement dated July 30, 2026, among us and our sponsors, directors, officers and the underwriter, we may be required to register certain securities for sale under the Securities Act. These holders, and holders of units issued upon conversion of working capital loans, if any, are entitled under the registration rights agreement to make up to three demands that we register certain of our securities held by them for sale under the Securities Act and to have the securities covered thereby registered for resale pursuant to Rule 415 under the Securities Act. In addition, these holders have the right to include their securities in other registration statements filed by us. We will bear the costs and expenses of filing any such registration statements.
Off-Balance Sheet Financing Arrangements
We have no obligations, assets or liabilities which would be considered off-balance sheet arrangements. We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements.
We have not entered any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or entered any non-financial assets.
Contractual Obligations
We do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities.
Critical Accounting Estimates
The preparation of unaudited condensed financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and income and expenses during the periods reported. 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 materially differ from those estimates. As of August 31, 2026 and November 30, 2025, we did not have any critical accounting estimates to be disclosed.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
As a smaller reporting company, we are not required to make disclosures under this Item.
Item 4. Controls and Procedures
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including our principal executive officer and principal financial and accounting officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures as of the end of the quarter ended August 31, 2026, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on this evaluation, our principal executive officer and our principal financial and accounting officer have concluded that during the period covered by this report, our disclosure controls and procedures were effective.
Disclosure controls and procedures are designed to ensure that information required to be disclosed by us in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial and accounting officer or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
Changes in Internal Control Over Financial Reporting
There have been no changes in our internal control over financial reporting during the period covered by this Quarterly Report on Form 10-Q that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II – OTHER INFORMATION
Item 1. Legal Proceedings
We are not currently a party to any material litigation or other legal proceedings brought against us. We are also not aware of any legal proceeding, investigation or claim, or other legal exposure that has a more than remote possibility of having a material adverse effect on our business, financial condition or results of operations.
Item 1A. Risk Factors
Not applicable to a smaller reporting company. However, factors that could cause our actual results to differ materially from those in this Quarterly Report are any of the risks described in the final prospectus for our IPO (File No. 333-295205) (the “Prospectus”) and any additional filings made by the Company following such date. Any of these factors could result in a significant or material adverse effect on our results of operations or financial condition. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations. As of the date of this Quarterly Report, there have been no material changes to the risk factors disclosed in the Prospectus.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3. Defaults upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
None.
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Item 6. Exhibits.
| * | Filed herewith. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| EAST WEST AVE ACQUISITION CORP. | ||
| Date: October 15, 2026 | By: | /s/ Maoli (Molly) Huang |
| Maoli (Molly) Huang | ||
| Chief Executive Officer | ||
| Date: October 15, 2026 | By: | /s/ Thomas Kerkaert |
| Thomas Kerkaert | ||
| Chief Financial Officer | ||
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