UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For the quarterly period
ended
OR
For the transition period from to
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| Title of Each Class: | Trading Symbol: | Name of Each Exchange on Which Registered: | ||
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| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| ☒ | Smaller reporting company | ||
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As of
July 11, 2025, there were 29,707 units, each unit consisting of one Class A ordinary share, par value $0.0001 per share, and one-half
of one redeemable warrant,
CHAIN BRIDGE I
Form 10-Q
For the Quarter Ended March 31, 2025
Table of Contents
i
PART I. FINANCIAL INFORMATION
Item 1. Condensed Interim Financial Statements
CHAIN BRIDGE I
CONDENSED BALANCE SHEETS
| March 31, | December 31, | |||||||
| 2025 | 2024 | |||||||
| (unaudited) | ||||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash | $ | $ | ||||||
| Prepaid expenses | ||||||||
| Total current assets | ||||||||
| Investments held in Trust Account | ||||||||
| Total Assets | $ | $ | ||||||
| Liabilities, Class A Ordinary Shares Subject to Possible Redemption and Shareholders’ Deficit: | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued expenses | ||||||||
| Accrued expenses – related party | ||||||||
| Total current liabilities | ||||||||
| Exchange Note – related party | ||||||||
| Bridge Financing Note | ||||||||
| Derivative liabilities | ||||||||
| Contingently issuable private placement warrants | ||||||||
| Total Liabilities | ||||||||
| Commitments and Contingencies (Note 6) | ||||||||
| Class A ordinary shares subject to possible redemption; $ | ||||||||
| Shareholders’ deficit: | ||||||||
| Preference shares, $ | ||||||||
| Class A ordinary shares, $ | ||||||||
| Class B ordinary shares, $ | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total shareholders’ deficit | ( | ) | ( | ) | ||||
| Total Liabilities, Class A Ordinary Shares Subject to Possible Redemption and Shareholders’ Deficit | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed interim financial statements.
1
CHAIN BRIDGE I
UNAUDITED CONDENSED STATEMENTS OF OPERATIONS
| For the Three Months Ended | ||||||||
| March 31, | ||||||||
| 2025 | 2024 | |||||||
| General and administrative expenses | $ | $ | ||||||
| General and administrative expenses - related party | ||||||||
| Loss from operations | ( | ) | ( | ) | ||||
| Other expense: | ||||||||
| Change in fair value of derivative liabilities | ( | ) | ( | ) | ||||
| Change in fair value of contingently issuable private placement warrants | ( | ) | ( | ) | ||||
| Income from investments held in Trust Account | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Weighted average shares outstanding of redeemable shares, basic and diluted | ||||||||
| Basic and diluted net loss per share, redeemable shares | $ | ( | ) | $ | ( | ) | ||
| Weighted average shares outstanding of nonredeemable shares, basic and diluted | ||||||||
| Basic and diluted net loss per share, nonredeemable shares | $ | ( | ) | $ | ( | ) | ||
The accompanying notes are an integral part of these unaudited condensed interim financial statements.
2
CHAIN BRIDGE I
UNAUDITED CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS’ DEFICIT
FOR THE THREE MONTHS ENDED MARCH 31, 2025
| Ordinary Shares | Additional | Total | ||||||||||||||||||||||||||
| Class A | Class B | Paid-in | Accumulated | Shareholders’ | ||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Deficit | Deficit | ||||||||||||||||||||||
| Balance - December 31, 2024 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
| Net loss | — | — | ( | ) | ( | ) | ||||||||||||||||||||||
| Waiver of $ | — | — | ( | ) | ( | ) | ||||||||||||||||||||||
| Deemed dividend - increase in redemption value of Class A ordinary shares subject to possible redemption | — | — | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||
| Balance - March 31, 2025 (unaudited) | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
FOR THE THREE MONTHS ENDED MARCH 31, 2024
| Ordinary Shares | Additional | Total | ||||||||||||||||||||||||||
| Class A | Class B | Paid-in | Accumulated | Shareholders’ | ||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Deficit | Deficit | ||||||||||||||||||||||
| Balance - December 31, 2023 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
| Net loss | — | — | ( | ) | ( | ) | ||||||||||||||||||||||
| Conversion of Class B ordinary shares to Class A ordinary shares | ( | ) | ( | ) | ||||||||||||||||||||||||
| Deemed dividend - increase in redemption value of Class A ordinary shares subject to possible redemption | — | — | ( | ) | ( | ) | ||||||||||||||||||||||
| Balance - March 31, 2024 (unaudited) | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed interim financial statements.
3
CHAIN BRIDGE I
UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS
| For the Three Months Ended | ||||||||
| March 31, | ||||||||
| 2025 | 2024 | |||||||
| Cash Flows from Operating Activities: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Change in fair value of derivative liabilities | ||||||||
| Change in fair value of contingently issuable private placement warrants | ||||||||
| Income from investments held in Trust Account | ( | ) | ( | ) | ||||
| Changes in operating assets and liabilities: | ||||||||
| Prepaid expenses | ( | ) | ||||||
| Accounts payable | ||||||||
| Accrued expenses | ||||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash Flows from Investing Activities: | ||||||||
| Cash withdrawn from Trust Account in connection with redemption | ||||||||
| Cash deposited in Trust Account | ( | ) | ( | ) | ||||
| Net cash (used in) provided by investing activities | ( | ) | ||||||
| Cash Flows from Financing Activities: | ||||||||
| Proceeds received from Sponsor for Trust Account contribution | ||||||||
| Proceeds from Fulton AC Note | ||||||||
| Repayment of bridge financing note | ( | ) | ||||||
| Redemption of Class A ordinary shares | ( | ) | ||||||
| Net cash used in financing activities | ( | ) | ( | ) | ||||
| Net change in cash | ( | ) | ||||||
| Cash — beginning of the period | ||||||||
| Cash — end of the period | $ | $ | ||||||
| Supplemental schedule of noncash financing activities: | ||||||||
| Deemed dividend - increase in redemption value of Class A ordinary shares subject to possible redemption | $ | $ | ||||||
| Waiver of $ | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed interim financial statements.
4
CHAIN BRIDGE I
NOTES TO UNAUDITED CONDENSED INTERIM FINANCIAL STATEMENTS
Note 1 — Description of Organization and Business Operations
Chain Bridge I (the “Company”) is a blank check company incorporated as a Cayman Islands exempted company on January 21, 2021. The Company was incorporated for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses (“Business Combination”). The Company is not limited to a particular industry or geographic region for purposes of consummating a Business Combination.
All activity for the period from January 21, 2021 (inception) through March 31, 2025 relates to the Company’s formation and the initial public offering (“Initial Public Offering”), which is described below, and since the closing of the Initial Public Offering, the search for a prospective Business Combination. 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 and cash equivalents from the proceeds derived from the Initial Public Offering. The Company has selected a December 31st fiscal year end.
The registration statement for the Company’s
Initial Public Offering was declared effective on November 9, 2021. On November 15, 2021, the Company consummated its Initial Public
Offering of
Simultaneously with the closing of the Initial
Public Offering, the Company consummated the private placement (“Private Placement”) of
In addition, upon closing of the Initial Public
Offering, CB Co-Investment loaned the Company $
Upon the closing of the Initial Public Offering,
$
5
On October 13, 2022, the Company approved an agreement
to grant
At the Special Meeting, the shareholders of the Company approved the amendment to the Company’s amended and restated memorandum and articles of incorporation (as amended from time to time, the “Amended and Restated Memorandum and Articles of Association”), which extended the date to consummate a Business Combination from May 15, 2023 to November 15, 2023, and allowed the board of directors of the Company (the “Board”), without another shareholder vote, to elect to further extend the date to consummate a Business Combination after November 15, 2023 up to three times, by an additional month each time, up to February 15, 2024. In November and December 2023, the Company’s Board elected to extend the date through December 15, 2023 and January 15, 2024, respectively.
On June 13, 2023, the Company received a written
notice from the Listing Qualifications Department of The Nasdaq Stock Market (“Nasdaq”) indicating that since the Company’s
aggregate market value of its outstanding warrants was less than $
On June 14, 2023, the Board approved an agreement
to grant of
Effective as of December 4, 2023, the Company’s Class A ordinary shares and Units ceased trading on the Nasdaq Global Market and commenced trading on the Nasdaq Capital Market.
On December 29, 2023 (the “Closing Date”),
the Company, CBG, CB Co-Investment and Fulton AC I LLC (“Fulton AC”), consummated the transactions contemplated by that certain
Securities Purchase Agreement (the “Securities Purchase Agreement”), dated December 8, 2023, pursuant to which Fulton AC
acquired from the CBG and CB Co-Investment an aggregate of (i)
As of the Closing Date, and in connection with the consummation of the transactions contemplated by the Securities Purchase Agreement:
(1) CB Co-Investment irrevocably agreed to convert
the $
6
(2) CBG, CB Co-Investment and Mr. Lazarus, our then Chief Financial Officer, entered into voting agreements (the “Voting Agreements”) pursuant to which they agreed to vote all of the voting securities of the Company that each of them is entitled to vote as of the date thereof or thereafter in favor of the Amendment Proposal (as defined below). Class A ordinary shares issued upon conversion of Class B ordinary shares will not be entitled to receive funds from the Trust Account through redemptions or otherwise. Pursuant to the Voting Agreements, each of CBG, CB Co-Investment and Mr. Lazarus have also agreed to irrevocably exercise such right to convert all of their Class B ordinary shares immediately upon such approval.
(3) Fulton AC, CBG, CB Co-Investment and certain
individuals entered into an amendment (the “Letter Agreement Amendment”) to that certain letter agreement, dated November
9, 2021, by and among CBG, CB Co-Investment and certain individuals (the “Letter Agreement”), pursuant to which Fulton AC
agreed to become a party to the Letter Agreement and be bound by, and subject to, all of the terms and conditions of the Letter Agreement
and agreed that it will be liable to the Company if and to the extent any claims by a third party (excluding our independent registered
public accounting firm) for services rendered or products sold to us, or a prospective partner business with which we have discussed
entering into a transaction agreement, reduce the amounts in the Trust Account to below the lesser of (i) $
(4) That certain services agreement, dated November 9, 2021, by and between the Company and CBG pursuant to which CBG provided office space, administrative and support services, was terminated.
(5) The Company and Franklin Strategic Series – Franklin Growth Opportunities Fund (“Franklin”) entered into a Letter Agreement terminating that certain Forward Purchase Agreement, dated November 1, 2021, by and between the Company and Franklin (the “Forward Purchase Agreement”).
(6) Additionally, CBG irrevocably agreed to terminate all outstanding loans to the Company, which included the Additional Convertible Note.
On December 29, 2023, Fulton AC agreed to loan
the Company up to $
On May 9, 2024, the Company entered into an Exchange
Agreement (the “Exchange Agreement”) with Fulton AC, pursuant to which Fulton AC and the Company agreed to exchange (the
“Exchange”) the Fulton AC Note for a new unsecured non - interest bearing convertible promissory note (the “Exchange
Note”). The Exchange Note is substantially similar to the Fulton AC Note, except that (i) the governing law and jurisdiction was
changed from New York to Delaware; (ii) the maturity date was extended to the later of (x) June 29, 2025 and (y) the consummation of
the Company’s initial business combination; and (iii) the holder may exchange the Exchange Note, in whole or in part, to satisfy
the purchase price of securities sold by the Company in a subsequent offering, if any, in whole or in part, at a premium of
Effective as of the Closing Date, all of the Company’s
officers, other than the Chief Financial Officer, and the entirety of the Board resigned. Further, the size of the Board was decreased
from
7
On December 29, 2023, the Company entered into
letter agreements with each Mr. Silberman, Mr. Baron and Mr. Lazarus, pursuant to which, among other things, the Company agreed to grant
each of them
On January 15, 2024, the Board approved extending the Company’s business operations for an additional month, until February 15, 2024, in accordance with the Company’s Amended and Restated Memorandum and Articles of Association.
On February 7, 2024, the Company held an extraordinary general meeting of shareholders (the “Meeting”). At the Meeting, the shareholders approved a proposal (the “Amendment Proposal”) to amend and restate, by way of a special resolution, the Company’s Amended and Restated Memorandum and Articles of Association (as amended, the “Second Amended and Restated Memorandum and Articles of Association”), to
(1) extend from February 15, 2024 (the “Existing
Termination Date”) to November 15, 2024 (the “Extended Termination Date”), the date (the “Termination Date”)
by which, if the Company has not consummated a Business Combination, the Company must (a) cease all operations except for the purpose
of winding up; (b) as promptly as reasonably possible but not more than
(2) provide for the right of the holders of our
Class B ordinary shares, par value $
(3) to remove a statement that there are no limits on the number of ordinary shares which may be issued by the Company and to clarify that the Company may, but is not required to, issue certificates to evidence ownership of ordinary shares of the Company.
In connection with the Meeting, the holders of
an aggregate of
Additionally, pursuant to Fulton AC’s agreement
to contribute to the Trust Account an amount of funds determined by reference to the number of shares not redeemed in connection with
the approval of the Amendment Proposal, Fulton AC contributed to the Trust Account $
Pursuant to those certain Voting Agreements, dated
December 29, 2023, entered into by each of CBG and CB Co-Investment, effective upon our adoption of the Second Amended and Restated Memorandum
and Articles of Association, CBG and CB Co-Investment exercised their right to convert all of their Class B ordinary shares (an aggregate
of
After the redemptions and conversions discussed
above,
8
On November 14, 2024, the Company held an extraordinary general meeting of its shareholders (the “General Meeting”) at which the shareholders voted to amend and restate, by way of a special resolution, the Company’s 2nd amended and restated memorandum and articles of association, to extend from November 15, 2024 to November 15, 2025, the date by which, if the Company has not consummated a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination involving the Company, with one or more businesses or entities, the Company must (a) cease all operations except for the purpose of winding up; (b) as promptly as reasonably possible but not more than ten business days thereafter, redeem the Class A ordinary shares sold in the Company’s initial public offering; and (c) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining shareholders and the directors, liquidate and dissolve, subject in each case to its obligations under Cayman Islands law to provide for claims of creditors and in all cases subject to the other requirements of applicable law (the “Amendment Proposal”).
In connection with the General Meeting, the holders
of an aggregate of
Additionally, pursuant to Fulton AC’s previously
disclosed agreement to contribute to the Trust Account an amount of funds determined by reference to the number of shares not redeemed
in connection with the approval of the Amendment Proposal, Fulton AC contributed to the Trust $
After the redemptions discussed above,
On April 1, 2024, Mr. Lazarus, the Chief Financial
Officer of the Company notified the Board of his resignation, effective immediately. Mr. Lazarus served as an advisor to the Company
through the end of April 2024 to ensure a smooth transition. Andrew Kucharchuk, succeeded Mr. Lazarus as the Company’s Chief Financial
Officer, effective April 1, 2024. As consideration for Mr. Lazarus serving as an advisor through the end of April 2024, the Company entered
into a letter agreement with Mr. Lazarus, dated April 18, 2024, pursuant to which, among other things, the Company agreed to grant him
Mr. Kucharchuk will be compensated pursuant to
a consulting agreement by and between Mr. Kucharchuk and Fulton AC. Pursuant to such consulting agreement, Mr. Kucharchuk received $
On April 4, 2024, Mr. Kucharchuk become a party to the Letter Agreement, and became bound by, and subject to, all of the terms and conditions of the Letter Agreement, including certain transfer restrictions with respect to the Company’s securities. Mr. Kucharchuk also entered into an Indemnification Agreement in the form previously disclosed by the Company providing him contractual rights to indemnification in addition to the indemnification provided for in the Company’s Second Amended and Restated Memorandum and Articles of Association.
On June 20, 2024, the Company received a written notice from the Listing Qualifications Department of Nasdaq indicating that the Company no longer complies with the Nasdaq Capital Market continued listing criteria set forth in Listing Rule 5550(a)(3), which requires the Company to maintain a minimum of 300 public holders (the “Minimum Public Holder Notice”). The Minimum Public Holder Notice indicates that the Company, pursuant to the Listing Rules, has 45 calendar days to submit a plan to regain compliance. If Nasdaq accepts the Company’s plan, the Company will have 180 calendar days from the date of the Minimum Public Holder Notice to evidence compliance. If Nasdaq were to reject the Company’s plan, Nasdaq rules permit the Company to appeal the decision to a hearings panel.
The Company has timely submitted a plan to regain compliance with Rule 5550(a)(3), which contained evidence that the Company has regained compliance.
On September 13, 2024, the Company was notified by Nasdaq that the Company had regained compliance with Public Shareholder Rule.
9
On October 10, 2024, the Company filed a Proxy Statement seeking to obtain shareholder approval, among other things, approval of the Amendment Proposal — to amend and restate, by way of a special resolution, the Company’s 2nd amended and restated memorandum and articles of association (the “Existing Charter”), to extend from November 15, 2024 (the “Existing Termination Date”) to November 15, 2025 (the “Extended Termination Date”), the date (the “Termination Date”) by which, if the Company has not consummated a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination involving the Company, with one or more businesses or entities (an “Initial Business Combination”), the Company must (a) cease all operations except for the purpose of winding up; (b) as promptly as reasonably possible but not more than ten business days thereafter, redeem the Class A ordinary shares sold in the Company’s initial public offering (the “Public Shares”); and (c) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining shareholders and the directors, liquidate and dissolve, subject in each case to its obligations under Cayman Islands law to provide for claims of creditors and in all cases subject to the other requirements of applicable law. The scheduled meeting of shareholders to vote on the proposals stated within the Proxy Statement will be held on November 8, 2024.
On October 29, 2024, the Company and Fulton AC
entered into an agreement (the “Dissolution Expense Reimbursement Agreement”) pursuant to which Fulton agreed to reimburse
the Trust Account up to $
On November 7, 2024, the Company determined to postpone the extraordinary general meeting of shareholders (the “Postponement”), originally scheduled to be held on November 8, 2024 (the “General Meeting”), to allow additional time for the Company to engage with its shareholders. The General Meeting was held on Thursday, November 14, 2024 at 11:00 a.m., Eastern Time. There was no change to the location or the record date of the General Meeting. In connection with the Postponement, the right of the public shareholders of the Company to redeem their Class A ordinary shares for their pro rata portion of the funds available in the Trust Account was extended to 5:30 p.m., Eastern Time, on November 12, 2024 (two business days before the postponed General Meeting) (the “Redemption Deadline Extension”).
On November 11, 2024, the Company entered into
non-redemption agreements (the “Non-Redemption Agreements”) with one or more investors named therein (each, a “Backstop
Investor”), pursuant to which the Backstop Investors agreed to rescind or reverse previous elections to redeem up to an aggregate
of
In consideration for the foregoing, upon consummation of the Company’s Initial Business Combination, the Company shall pay or cause to be paid to each Backstop Investor a payment in respect of its respective Backstop Investor Shares in cash released from the Trust Account in an amount equal to the product of (x) the number of Backstop Investor Shares and (y) the price per share for a pro rata portion of the amount on deposit in the Trust Account as of the Closing.
The Backstop Investors expect to acquire up to
an aggregate of
On November 12, 2024, the Company and each Backstop Investor entered into Amendment No.1 to Non-Redemption Agreement (the “Amendment”) pursuant to which the parties agree to allow the Backstop Investors to purchase Acquired Shares (as defined in the Agreements) at any time prior to the General Meeting.
10
On November 12, 2024, the Company received a letter from the Listing Qualifications Department of Nasdaq stating that, pursuant to Nasdaq Listing Rule IM-5101-2 (“Rule IM-5101-2”), the staff of Nasdaq (“Staff”) had determined that (i) the Company’s securities will be delisted from Nasdaq, (ii) trading of the Company’s Class A ordinary shares and units will be suspended at the opening of business on November 19, 2024 and (iii) a Form 25-NSE will be filed with the SEC, which will remove the Company’s securities from listing and registration on Nasdaq. Under Rule IM-5101-2, a special purpose acquisition company must complete one or more business combinations within 36 months of the effectiveness of its initial public offering registration statement. Since the Company failed to complete its initial business combination by November 4, 2024, the Staff concluded that the Company did not comply with Rule IM-5101-2 and that the Company’s securities are now subject to delisting.
Nasdaq suspended that trading of the Company’s Class A ordinary shares and units at the opening of business on November 19, 2024.
Following the suspension of trading on Nasdaq, the Company’s Class A ordinary shares began trading on the OTCQB Market operated on The OTC Market systems (“OTC”) under the symbol “CBRRF.” The Company’s warrants and units began trading on the Expert Market operated by OTC under the symbols “CBRGF” and “CBGGF,” respectively. There can be no assurance that a broker will continue to make a market in the Company’s securities or that trading of the common stock will continue on an over-the-counter market or elsewhere.
Nasdaq will complete the delisting by filing a Form 25-NSE with the U.S. Securities and Exchange Commission (the “SEC”), which will remove the Company’s securities from listing and registration on Nasdaq.
We do not expect the delisting to impact our ability to consummate the previously disclosed business combination with Phtytanix Bio (the “Phytanix Business Combination”). Regardless of where our securities are traded, the surviving Company will apply to list its securities on Nasdaq Capital Markets upon consummation of the Phytanix Business Combination. However, if the Phytanix Business Combination is not consummated, the delisting will have a material adverse impact on our ability to locate another target for an initial business combination, and would likely cause us to enter liquidation. If we are required to liquidate, our shareholders would not be able to realize the benefits of owning stock in a successor operating business, including the potential appreciation in the value of our stock and warrants following such a transaction, and our warrants would expire worthless.
On November 14, 2024, the Company held its General Meeting at which the shareholders voted to approve the Amendment Proposal.
In connection with the General Meeting, the holders
of an aggregate of
Additionally, pursuant to Fulton AC’s previously
disclosed agreement to contribute to the Trust Account an amount of funds determined by reference to the number of shares not redeemed
in connection with the approval of the Amendment Proposal, Fulton AC contributed to the Trust Account $
The Company’s management has broad discretion
with respect to the specific application of the net proceeds of its Initial Public Offering and the sale of Private Placement Warrants
and the proceeds from the promissory note issued to CB Co-Investment, although substantially all of the net proceeds are intended to
be applied generally toward consummating a Business Combination. The Company’s initial Business Combination must be with one or
more operating businesses or assets with a fair value equal to at least
11
The Company will provide its holders of the Public
Shares (the “Public Shareholders”) with the opportunity to redeem all or a portion of their Public Shares upon the completion
of a Business Combination either (i) in connection with a general meeting called to approve the Business Combination or (ii) by means
of a tender offer. The decision as to whether the Company will seek shareholder approval of a Business Combination or conduct a tender
offer will be made by the Company. The Public Shareholders will be entitled to redeem their Public Shares for a pro rata portion of the
amount then in the Trust Account. The Company expects the pro rata price to be at least $
Notwithstanding the foregoing, the Company’s
Second Amended and Restated Memorandum and Articles of Association provides that a Public Shareholder, together with any affiliate of
such shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as defined under Section
13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from redeeming its shares
with respect to more than an aggregate of
Fulton AC, CBG, CB Co-Investment and our current and former directors and officers have agreed to waive their liquidation rights with respect Class B ordinary shares held by them if the Company fails to complete a Business Combination by the Termination Date. However, if such shareholders acquire Public Shares, they will be entitled to liquidating distributions from the Trust Account with respect to such Public Shares if the Company fails to complete a Business Combination by the Termination Date. The underwriters agreed to waive their rights to the Marketing Fee (see Note 6) held in the Trust Account in the event the Company does not complete a Business Combination by the Termination Date and, in such event, such amounts will be included with the funds held in the Trust Account that will be available to fund the redemption of the Company’s Public Shares. The Marketing Fee was waived as of December 29, 2023.
On January 16, 2025, February 14, 2025, March 17,
2025, May 15, 2025 and June 16, 2025, the Sponsor contributed approximately $
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 of 2002, 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.
12
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 an emerging growth 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 statement 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.
Risks and Uncertainties
Management continues to evaluate the current or anticipated military conflicts, including between Russia and Ukraine, and Israel and Hamas, terrorism, sanctions or other geopolitical events as well as adverse developments in the economy and capital markets, including rising energy costs, inflation and interest rates, in the United States and globally, on the industry and has concluded that while it is reasonably possible that these events could have a negative effect on the Company’s financial position, results of its operations and/or search for a target company, the specific impact is not readily determinable as of the date of the financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Liquidity and Capital Resources
As of March 31, 2025, the Company had $
The Company’s liquidity needs prior to the
consummation of the Initial Public Offering were satisfied through the payment of $
On May 9, 2024, the Company entered into the Exchange
Agreement with Fulton, pursuant to which Fulton and the Company agreed to Exchange the Fulton AC Note for the Exchange Note. The Exchange
Note is substantially similar to the Fulton AC Note, except that (i) the governing law and jurisdiction was changed from New York to
Delaware; (ii) the maturity date was extended to the later of (x) June 29, 2025 and (y) the consummation of the Company’s initial
business combination; and (iii) the holder may exchange the Exchange Note, in whole or in part, to satisfy the purchase price of securities
sold by the Company in a subsequent offering, if any, in whole or in part, at a premium of
On June 26, 2024, Phytanix Bio (“Phytanix”)
agreed to loan the Company $
The Company has until November 15, 2025 to consummate
an initial Business Combination. If the Company has not consummated a Business Combination by November 15, 2025, the Company must (a)
cease all operations except for the purpose of winding up; (b) as promptly as reasonably possible but not more than
13
In connection with our assessment of going concern considerations in accordance with FASB Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” the Company has determined that the liquidity condition and the date for mandatory liquidation and subsequent dissolution raises substantial doubt about the Company’s ability to continue as a going concern. No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to liquidate after November 15, 2025. The financial statements do not include any adjustment that might be necessary if the Company is unable to continue as a going concern.
Investment Company Act
Under the current rules and regulations of the SEC we are not deemed an investment company for purposes of the Investment Company Act; however, on March 30, 2022, the SEC proposed new rules (the “Proposed Rules”) relating, among other matters, to the circumstances in which SPACs such as the Company could potentially be subject to the Investment Company Act and the regulations thereunder. The Proposed Rules provide a safe harbor for companies from the definition of “investment company” under Section 3(a)(1)(A) of the Investment Company Act, provided that a SPAC satisfies certain criteria. To comply with the duration limitation of the proposed safe harbor, a SPAC would have a limited time period to announce and complete a de-SPAC transaction. Specifically, to comply with the safe harbor, the Proposed Rules would require a company to file a Current Report on Form 8-K announcing that it has entered into an agreement with a target company for an initial Business Combination no later than 18 months after the effective date of the SPAC’s registration statement for its IPO. The Company would then be required to complete its initial Business Combination no later than 24 months after the effective date of such registration statement. There is currently uncertainty concerning the applicability of the Investment Company Act to a SPAC, including this Company. The Company has not yet entered into a definitive Business Combination agreement, however, there is a risk that the Company may not complete an initial Business Combination within 24 months of such date. As a result, it is possible that a claim could be made that the Company has been operating as an unregistered investment company. If the Company were deemed to be an investment company for purposes of the Investment Company Act, the Company may be forced to abandon its efforts to complete an initial Business Combination and instead be required to liquidate. If the Company is required to liquidate, the investors would not be able to realize the benefits of owning stock in a successor operating business, including the potential appreciation in the value of our stock and warrants following such a transaction.
The Investment Company Act defines an investment company as any issuer which
| (i) | is or holds itself out as being engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting, or trading in securities; |
| (ii) | is engaged or proposes to engage in the business of issuing face-amount certificates of the installment type, or has been engaged in such business and has any such certificate outstanding; or |
| (iii) | is engaged or proposes to engage in the business of investing, reinvesting, owning, holding, or trading in securities, and owns or proposes to acquire investment securities having a value exceeding |
The Company has assessed its primary line of business, and the value of its investment securities as compared to the value of total assets to determine whether the Company may be deemed an investment company. The longer that the funds in the Trust Account are held in money market funds, there is a greater risk that the Company may be considered an unregistered investment company. As a result, the Company has switched all funds to cash, and will likely receive minimal interest, if any, in the funds held in the Trust Account after such time, which would reduce the dollar amount our public stockholders would receive upon any redemption or liquidation of our Company. Currently, the funds in the Trust Account are held in mutual funds composed of U.S. treasury securities and meeting certain conditions under Rule 2a-7 under the Investment Company Act.
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The Investment Company Act defines an investment company as any issuer which:
| 1. | Is or holds itself out as being engaged primarily in the business of investing, reinvesting, or trading in securities; |
| 2. | Is engaged or proposes to engage in the business of issuing face-amount certificates of the installment type; or |
| 3. | Owns
or proposes to acquire investment securities having a value exceeding |
In January 2024, the SEC adopted rules providing guidance for SPACs analyzing their status under the Investment Company Act of 1940. This guidance emphasizes enhanced investor protections, transparency in business combination transactions, and the importance of ensuring compliance with the definition of a “business” under ASC 805-10-55. The safe harbor provision under the guidance requires SPACs to:
| ● | Identify and enter into a de-SPAC transaction agreement within 18 months of their IPO; and |
| ● | Complete the de-SPAC transaction within 24 months of their IPO. |
Failure to meet these criteria could result in the SPAC being deemed an unregistered investment company under the Act, requiring liquidation and potentially preventing completion of the proposed transaction. The Company completed its IPO within the SEC’s safe harbor timeline, and has not yet entered into a business combination, less than 48 months after its IPO. The transaction is expected to close within the SEC’s prescribed 48-month timeline. Currently, the Company does not hold itself out as being engaged in investing, reinvesting, or trading in securities. All funds in the Trust Account is held in mutual funds composed of U.S. treasury securities that comply with Rule 2a-7 under the Investment Company Act. The funds are not invested in marketable securities to avoid the risk of being deemed an unregistered investment company.
As of the date of this filing, the Company’s Trust Account remains compliant with the safe harbor criteria outlined in SEC Release No. 33-11265. If the Company were deemed to be an unregistered investment company under the Investment Company Act, it could be forced to abandon the Business Combination and liquidate. In such a scenario, public stockholders would lose the opportunity to benefit from potential appreciation in the value of the Company’s stock and warrants following the Business Combination. In conclusion, the Company is committed to ensuring compliance with the Investment Company Act and the updated SEC guidance. By adhering to the safe harbor provisions, the Company seeks to mitigate risks associated with the potential application of the Investment Company Act.
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Note 2 — Basis of Presentation and Summary of Significant Accounting Policies
Basis of Presentation
The accompanying unaudited condensed interim financial statements are presented in U.S. dollars in conformity with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X and pursuant to the rules and regulations of the SEC. Accordingly, they do not include all of the information and footnotes required by GAAP. In the opinion of management, the unaudited condensed interim financial statements reflect all adjustments, which include only normal recurring adjustments necessary for the fair statement of the balances and results for the period presented. Operating results for the three months ended March 31, 2025 are not necessarily indicative of the results that may be expected through December 31, 2025.
The accompanying unaudited condensed interim financial statements should be read in conjunction with the annual audited financial statements and notes thereto included in the Annual Report on Form 10-K filed by the Company with the SEC on June 20, 2025.
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 income and expenses during the reporting period. Making estimates require 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
The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. As of March 31, 2025 and December 31, 2024, the Company had cash equivalents.
Cash and Investments Held in Trust Account
At March 31, 2025 and December 31, 2024, the assets
held in the Trust Account, amounting to $
Assets held in the Trust Account will not be released from the Trust Account until the completion of its initial business combination or to the public shareholders until the earliest of the completion of an initial business combination and in connection with those Class A ordinary shares that such shareholders properly elect to redeem.
Concentration of Credit Risk
Financial instruments that potentially subject
the Company to concentrations of credit risk consist of cash accounts in a financial institution, which, at times, may exceed the Federal
Deposit Insurance Corporation (“FDIC”) coverage limit of $
16
Financial Instruments
The fair value of the Company’s assets and liabilities which qualify as financial instruments under the ASC Topic 820, “Fair Value Measurements” (“ASC Topic 820”), equal or approximate the carrying amounts represented in the balance sheets primarily due to their short-term nature.
Fair Value Measurements
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). These tiers consist of:
| ● | 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. |
In some circumstances, the inputs used to measure fair value might be categorized within different levels of the fair value hierarchy. In those instances, the fair value measurement is categorized in its entirety in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement.
Offering Costs Associated with the Initial Public Offering
The Company complies with the requirements of ASC 340-10-S99-1. Offering costs consisted of legal, accounting, underwriting fees and other costs incurred that were directly related to the Initial Public Offering. Upon completion of the Initial Public Offering, offering costs were allocated to the separable financial instruments issued in the Initial Public Offering based on a relative fair value basis, compared to total proceeds received. Offering costs allocated to the derivative warrant liabilities were charged to operations. Offering costs associated with the Class A ordinary shares were charged against the carrying value of Class A ordinary shares subject to possible redemption upon the completion of the Initial Public Offering.
Derivative Financial Instruments
The Company does not use derivative instruments to hedge exposures to cash flow, market or foreign currency risks. The Company evaluates all of the financial instruments, including issued stock purchase warrants, and forward purchase agreements, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives, pursuant to ASC Topic 480 and ASC Topic 815, “Derivatives and Hedging” (“ASC Topic 815”). The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, will be re-assessed at the end of each reporting period. Derivative warrant liabilities will be classified as non-current liabilities as their liquidation is not reasonably expected to require the use of current assets or require the creation of current liabilities.
The
17
Class A ordinary shares Subject to Possible Redemption
The Company accounts for the Class A ordinary shares
subject to possible redemption in accordance with the guidance in ASC Topic 480. Class A ordinary shares subject to mandatory redemption
(if any) is classified as liability instruments and are measured at fair value. Conditionally redeemable Class A ordinary shares (including
Class A ordinary shares that features redemption rights that are either within the control of the holder or subject to redemption upon
the occurrence of uncertain events not solely within our control) are classified as temporary equity. At all other times, Class A ordinary
shares are classified as shareholders’ equity. The Company’s Class A ordinary shares feature certain redemption rights that
are considered to be outside of our control and subject to the occurrence of uncertain future events. Accordingly, as of March 31, 2025
and December 31, 2024,
On May 12, 2023, the Company held the Special Meeting
at which the Company’s shareholders approved a proposal to amend the Company’s existing Amended and Restated Memorandum and
Articles of Association to extend from May 15, 2023 to November 15, 2023 (the “Extended Date”) and to allow the board of
directors of the Company, without another shareholder vote, to elect to further extend the date to consummate an initial Business Combination
after the Extended Date up to three times, by an additional month each time, up to February 15, 2024, the date by which, if the Company
has not consummated an initial Business Combination, the Company must: (a) cease all operations except for the purpose of winding up;
(b) as promptly as reasonably possible but not more than ten business days thereafter, redeem the shares sold in the Company’s
Initial Public Offering; and (c) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s
remaining shareholders and the directors, liquidate and dissolve, subject in each case to its obligations under Cayman Islands law to
provide for claims of creditors and in all cases subject to the other requirements of applicable law. In connection with such shareholder
vote, the holders of an aggregate of
On December 13, 2023 and January 15, 2024, the Board adopted resolutions to extend the Company’s business operations until January 15, 2024 and February 15, 2024, respectively.
On February 7, 2024, the Company held the Meeting,
at which the shareholders voted on the Amendment Proposal. Shareholders voted to approve the Amendment Proposal. In connection with the
Meeting, the holders of an aggregate of
On November 14, 2024, the Company held its General
Meeting at which the shareholders voted to approve the Amendment Proposal. In connection with the General Meeting, the holders of an
aggregate of
The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of the Class A ordinary shares subject to possible redemption to equal the redemption value at the end of each reporting period. This method would view the end of the reporting period as if it were also the redemption date for the security. Effective with the closing of the Initial Public Offering (including exercise of the over-allotment option), the Company recognized the accretion from initial book value to redemption amount, which resulted in charges against additional paid-in capital (to the extent available) and accumulated deficit.
As of March 31, 2025 and December 31, 2024, the amounts of Class A ordinary shares reflected on the balance sheets are reconciled in the following:
| Class A ordinary shares subject to possible redemption, December 31, 2024 (audited) | $ | |||
| Waiver of $ | ||||
| Proceeds received from Sponsor for Trust Account contribution | ||||
| Deemed dividend – increase in redemption value of Class A ordinary shares subject to possible redemption | ||||
| Class A ordinary shares subject to possible redemption, March 31, 2025 (unaudited) | $ |
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Net (Loss) Income Per Share
The Company complies with accounting and disclosure requirements of ASC Topic 260, “Earnings Per Share” (“ASC Topic 260”). The Company has two classes of shares, which are referred to as Class A ordinary shares and Class B ordinary shares. Income (Loss) is shared pro rata between the two classes of shares. Net (loss) income per ordinary share is calculated by dividing the net income (loss) by the weighted average shares of ordinary shares outstanding for the respective period.
The calculation of diluted net (loss) income per
share does not consider the effect of the warrants underlying the Units sold in the Initial Public Offering (including the consummation
of the over-allotment) and the Private Placement Warrants to purchase an aggregate of
The Company has considered the effect of Class B ordinary shares that were excluded from weighted average number as they were contingent on the exercise of over-allotment option by the underwriters. Since the contingency was satisfied, the Company has included these shares in the weighted average number as of the beginning of the period to determine the dilutive impact of these shares.
| For the Three Months Ended | ||||||||||||||||
| March 31, | ||||||||||||||||
| 2025 (unaudited) | 2024 (unaudited) | |||||||||||||||
| Redeemable | Nonredeemable | Redeemable | Nonredeemable | |||||||||||||
| Basic and diluted net loss per ordinary share | ||||||||||||||||
| Numerator: | ||||||||||||||||
| Allocation of net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Denominator: | ||||||||||||||||
| Basic and diluted weighted average ordinary shares outstanding | ||||||||||||||||
| Basic and diluted net loss per ordinary share | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
Income Taxes
ASC Topic 740 accounts for income taxes requiring an asset and liability approach to financial accounting and reporting for income taxes including the parameters for the recognition of deferred tax assets and liabilities. The Company is exempt from Cayman Islands as well as US taxation. Accordingly, there is no reported tax provision nor any net deferred tax asset or liability position in the accompanying financial statements.
Recent Accounting Pronouncements
In June 2022, the FASB issued ASU 2022-03, ASC Topic 820 “Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions”. The ASU amends ASC Topic 820 to clarify that a contractual sales restriction is not considered in measuring an equity security at fair value and to introduce new disclosure requirements for equity securities subject to contractual sale restrictions that are measured at fair value. The ASU applies to both holders and issuers of equity and equity-linked securities measured at fair value. The amendments in this ASU are effective for the Company in fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. Early adoption is permitted for both interim and annual financial statements that have not yet been issued or made available for issuance. The adoption of ASU 2023-09 did not have a material impact on the Company’s financial statements and disclosures.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (ASC Topic 740): Improvements to Income Tax Disclosures (ASU 2023-09), which requires disclosure of incremental income tax information within the rate reconciliation and expanded disclosures of income taxes paid, among other disclosure requirements. ASU 2023-09 is effective for fiscal years beginning after December 15, 2025. Early adoption is permitted. The Company’s management does not believe the adoption of ASU 2023-09 will have a material impact on its financial statements and disclosures.
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In March 2024, the FASB issued ASU No. 2024-01, “Compensation—Stock Compensation (Topic 718): Scope Applications of Profits Interests and Similar Awards” (“ASU 2024-01”). ASU 2024-01 adds an example to Topic 718 which illustrates how to apply the scope guidance to determine whether profits interests and similar awards should be accounted for as share-based payment arrangements under Topic 718 or under other U.S. GAAP. ASU 2024-01 is effective for annual periods beginning after December 15, 2025, although early adoption is permitted. Upon adoption, ASU 2024-01 is not expected to have an impact on the Company’s financial statements.
In March 2024, the FASB issued ASU No 2024-02, “Codification Improvements - Amendments to Remove References to the Concepts Statements” (“ASU 2024-02”). ASU 2024-02 removes references to various Concepts Statements. In most instances, the references are extraneous and not required to understand or apply the guidance. ASU 2024-02 is effective for fiscal years beginning after December 15, 2024. Early adoption is permitted. ASU 2024-02 can be applied prospectively or retrospectively. Upon adoption, ASU 2024-01 is not expected to have an impact on the Company’s financial statements.
In November 2024, the FASB issued ASU No. 2024-03, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40).” This standard requires disclosure of specific information about costs and expenses and becomes effective January 1, 2027. Upon adoption, ASU 2024-03 is not expected to have an impact on the Company’s financial statements.
In November 2024, the FASB issued ASU 2024-04, “Debt - Debt with Conversions and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments” (“ASU 2024-04”). ASU 2024-04 clarifies the requirements for accounting for induced conversions of convertible debt instruments, specifically addressing the recognition and measurement of inducement offers made to holders of convertible debt. The amendments provide guidance on determining whether an inducement offer should be accounted for as an extinguishment of debt or as a modification, and clarify the related disclosure requirements. ASU 2024-04 is effective for fiscal years beginning after December 15, 2025, including interim periods within those fiscal years, with early adoption permitted.
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The amendments in this ASU require disclosures, on an annual and interim basis, of significant segment expenses that are regularly provided to the chief operating officer decision maker (“CODM”), as well as the aggregate amount of other segment items included in the reported measure of segment profit or loss. The ASU requires that a public entity disclose the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources. Public entities will be required to provide all annual disclosures currently required by Topic 280 in interim periods, and entities with a single reportable segment are required to provide all the disclosures required by the amendments in this ASU and existing segment disclosures in Topic 280. This ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.
Management does not believe that any other recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying financial statements.
Note 3 — Initial Public Offering
On November 15, 2021, the Company consummated its
Initial Public Offering of
Each Unit consists of
Note 4 — Private Placement Warrants
Simultaneously with the closing of the Initial
Public Offering, the Company consummated the Private Placement of
Each whole Private Placement Warrant is exercisable
for
Fulton AC, CBG, CB Co - Investment and the Company’s
officers and directors agreed, subject to limited exceptions, not to transfer, assign or sell any of their Private Placement Warrants
until
20
Note 5 — Related Party Transactions
Class B Ordinary Shares
On February 3, 2021, CBG and CB Co-Investment paid
an aggregate of $
On November 9, 2021, CBG transferred an aggregate
of
CBG and CB Co-Investment agreed to forfeit up to
an aggregate of
Fulton AC, CBG, CB Co - Investment, and the current
and former executive officers and directors of the Company, agreed not to transfer, assign or sell any of their Class B ordinary shares
until the earlier to occur of: (A)
Pursuant to those certain Voting Agreements, dated
December 29, 2023, entered into by each of CBG and CB Co - Investment, immediately upon approval of the Amendment Proposal at the Meeting,
CBG and CB Co - Investment exercised their right to convert all of their Class B ordinary shares (an aggregate of
Related Party Loans
Convertible Note — Related Party
Upon closing of the Initial Public Offering, CB
Co-Investment loaned the Company approximately $
On November 16, 2022, CBG agreed to loan the Company
up to $
21
In connection with the consummation of the transactions
contemplated by the Securities Purchase Agreement, CB Co-Investment irrevocably agreed to convert the $
Additionally, CBG irrevocably agreed to terminate all outstanding loans to the Company. Accordingly, all debt proceeds received under the Additional Convertible Note was recognized as a capital contribution from CBG.
Working Capital Loan
In addition, in order to fund working capital deficiencies
or finance transaction costs in connection with a Business Combination, On December 29, 2023, Fulton AC agreed to loan the Company up
to $
On May 9, 2024, the Company entered into the Exchange
Agreement with Fulton AC, pursuant to which Fulton AC and the Company agreed to exchange the Fulton AC Note for the Exchange Note. The
Exchange Note is substantially similar to the Fulton AC Note, except that (i) the governing law and jurisdiction was changed from New
York to Delaware; (ii) the maturity date was extended to the later of (x) June 29, 2025 and (y) the consummation of the Company’s
initial business combination; and (iii) the holder may exchange the Exchange Note, in whole or in part, to satisfy the purchase price
of securities sold by the Company in a subsequent offering, if any, in whole or in part, at a premium of
As provided under the Exchange Agreement, following the delivery of the Exchange Note, the Fulton AC Note was cancelled, with the Company owing no further obligations thereunder. The issuance of the Exchange Note in exchange for the Fulton AC Note was made pursuant to Section 3(a)(9) of the Securities Act.
The Company accounts for its Exchange Note within
the scope of ASC Topic 470. Pursuant to ASC Topic 470, the new or modified terms of the Exchange Note when compared with the original
terms of the Fulton AC Note are not substantially different; therefore, the Company will account for the Exchange Agreement as a debt
modification. As a result, the Exchange Note is measured at the amount of cash proceeds received from the holder. As of March 31, 2025
and December 31, 2024, there was $
Administrative Services Agreement
On December 29, 2023, Fulton AC entered into a
Services Agreement with the Company (the “Fulton Services Agreement”) pursuant to which the Company will pay Fulton AC up
to $
22
Note 6 — Commitments and Contingencies
Litigation
From time to time, the Company may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm the Company’s business. The Company is not aware of any such legal proceedings that will have, individually or in the aggregate, a material adverse effect on its business, financial condition or operating results.
Contingently Issuable Private Placement Warrants
In connection with the consummation of the transactions
contemplated by the Securities Purchase Agreement, CB Co-Investment irrevocably agreed to convert the $
Registration Rights and Shareholder Rights
The holders of the Class B ordinary shares, Private Placement Warrants, Class A ordinary shares underlying the Private Placement Warrants, the Forward Purchase Securities and warrants that may be issued upon conversion of the Convertible Note and the Working Capital Loans (and any Class A ordinary shares issuable upon the exercise of the Private Placement Warrants, Forward Purchase Warrants and warrants that may be issued upon conversion of such loans) were entitled to registration rights pursuant to a registration and shareholder rights agreement signed upon the effective date of the Initial Public Offering. The Forward Purchase Securities were terminated on December 29, 2023. The holders of these securities are entitled to make up to three demands, excluding short form demands, that the Company registers such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the completion of the initial Business Combination. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
Business Combination Marketing Agreement
On November 9, 2021, the Company entered into an
agreement with one of the underwriters in its Initial Public Offering, Cowen and Company, LLC, as advisors in connection with the Company’s
Business Combination to assist the Company in holding meetings with the shareholders to discuss the potential Business Combination and
the target business’ attributes, introduce the Company to potential investors that are interested in purchasing the Company’s
securities in connection with the potential Business Combination, assist the Company in obtaining shareholder approval for the Business
Combination and assist the Company with its press releases and public filings in connection with the Business Combination. The Company
agreed to pay a fee for such services (the “Marketing Fee”) upon the consummation of the initial Business Combination in
an amount equal to, in the aggregate,
Forward Purchase Agreement
The Forward Purchase Agreement provided for the
purchase by Franklin, in the aggregate, of
Non-Redemptions Agreements
As discussed more fully in Note 1, in exchange
for the commitments not to redeem certain Class A ordinary shares in connection with the Special Meeting, CBG and CB Co-Investment agreed
to transfer an aggregate of
23
The Company estimated the aggregate fair value
of a weighted number of Class B ordinary shares, based on the likelihood of consummating an initial Business Combination beyond November
15, 2023, or
| May 10, 2023 | ||||
| Stock price | $ | |||
| Risk free rate | % | |||
| Remaining life | ||||
| Volatility | % | |||
| Probability of transaction | % | |||
Letter and Joinder Agreement
On October 13, 2022, David G. Brown executed a
joinder to become a party to the Letter Agreement and be bound by, and subject to, all of the terms and conditions of the Letter Agreement,
including to vote any Class B ordinary shares and Class A ordinary shares held by him in favor of the Company’s initial Business
Combination and certain transfer restrictions with respect to the Company’s securities. On October 13, 2022, the Company entered
into letter agreements with Mr. Brown, pursuant to which, among other things, the Company agreed to grant to him
Pursuant to the Letter Agreement dated June 15,
2023 (“2023 RSU Letter Agreement”) and Joinder Agreement dated June 20, 2023 (the “Joinder Agreement”), the Company
agreed to grant to Mr. Lazarus
On December 29, 2023, the Letter Agreement was amended to add Fulton AC as a party thereto, subject to all of the terms and conditions of the Letter Agreement. Pursuant to the Letter Agreement Amendment, Fulton AC also agreed that it will indemnify the Trust Account for certain amounts as further described in Note 1.
On December 29, 2023, each Mr. Wainstein, Mr. Cohen,
Mr. Silberman and Mr. Baron executed joinders to become a party to the Letter Agreement and be bound by, and subject to, all of the terms
and conditions of the Letter Agreement, including to vote any Class B ordinary shares and Class A ordinary shares held by each of them
in favor of the Company’s initial Business Combination and certain transfer restrictions with respect to the Company’s securities.
On December 29, 2023, the Company entered into letter agreements with each Mr. Silberman, Mr. Baron and Mr. Lazarus, pursuant to which,
among other things, the Company agreed to grant each of them
On February 21, 2024, the Board of Directors appointed Oliver Wiener as a director. In connection with Mr. Wiener’s appointment, the Board increased its size to five (5) directors. Mr. Wiener will not receive compensation of any kind for service to the Board prior to the consummation of an initial Business Combination. On February 21, 2024, Mr. Wiener become a party to the Letter Agreement, and became bound by, and subject to, all of the terms and conditions of the Letter Agreement, including certain transfer restrictions with respect to the Company’s securities.
On February 21, 2024, the Company entered into
a letter agreement with Mr. Wiener, pursuant to which, among other things, the Company agreed to grant Mr. Wiener
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Bridge Financing Note
On June 26, 2024, Phytanix Bio (“Phytanix”)
agreed to loan the Company $
As of March 31, 2025 and December 31, 2024, the
outstanding balance under the Bridge Financing Note was $
Business Combination Agreement
On July 22, 2024, the Company, CB Holdings, Inc., a Nevada corporation (“HoldCo”), CB Merger Sub 1, a Cayman Islands exempted company (“CBRG Merger Sub”), Phytanix Bio, a Nevada corporation (the “Phytanix”), and CB Merger Sub 2, Inc., a Nevada corporation (“Phytanix Merger Sub”), entered into a Business Combination Agreement (as it may be amended, supplemented or otherwise modified from time to time, the “Business Combination Agreement”). As used herein, “New Phytanix” refers to HoldCo after giving effect to the consummation of the transactions contemplated by the Business Combination Agreement. Capitalized terms used but not otherwise defined herein have the meanings set forth in the Business Combination Agreement.
Business Combination Agreement
The Business Combination Agreement and the transactions contemplated thereby were approved by the boards of directors of each of the Company and Phytanix. The Business Combination Agreement provides for, among other things, the consummation of the following transactions (the transactions contemplated by the Business Combination Agreement, collectively, the “Business Combination”):
| (i) | CBRG Merger Sub will merge with and into the Company (the “CBRG Merger”) and Phytanix Merger Sub will merge with and into Phytanix (the “Phytanix Merger” and, together with the CBRG Merger, the “Mergers”), with the Company and Phytanix surviving the Mergers and, after giving effect to such Mergers, each of the Company and Phytanix becoming a wholly owned subsidiary of HoldCo, on the terms and subject to the conditions in the Business Combination Agreement; |
| (ii) | (A) each issued and outstanding Class A ordinary share, par value $ |
| (iii) | each outstanding warrant to purchase one CBRG Class A Share will be automatically exchanged for a warrant to purchase |
| (iv) | (A) each warrant of Phytanix to purchase Phytanix common stock will be exchanged for a warrant to purchase HoldCo Shares; (B) each warrant of Phytanix to purchase Phytanix preferred stock will be exchanged for a warrant to purchase HoldCo preferred stock; (C) all promissory notes of Phytanix issued in connection with its June 2024 financing will be exchanged for HoldCo Series A convertible preferred stock, and any remaining issued and outstanding promissory notes of Phytanix will be automatically and fully cancelled; (D) each share of preferred stock, par value $ |
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Prior to the closing of the Business Combination (the “Closing”), (A) HoldCo will file with the Secretary of State of the State of Nevada an amended and restated certificate of incorporation of HoldCo, and (B) the board of directors of HoldCo will approve and adopt amended and restated bylaws of HoldCo, each in a form to be mutually agreed between the Company and Phytanix. Following the Business Combination, HoldCo will change its name to Phytanix, Inc. and will be a publicly listed holding company which is expected to be listed on the Nasdaq Capital Market under the ticker symbol “PHYX.”
Under the terms of the Business Combination Agreement,
the aggregate consideration to be paid in the Business Combination is derived from an equity value of $
The Business Combination Agreement contains representations, warranties and covenants of each of the parties thereto that are customary for transactions of this type. HoldCo has agreed to take all action as may be necessary or appropriate such that, immediately after the Closing, HoldCo’s board of directors will consist of up to seven directors, which shall be divided into three classes and be comprised of seven individuals determined by the Company, Fulton AC and Phytanix prior to the effectiveness of the Registration Statement on Form S-4 (the “Registration Statement”), two of which directors shall be designated by Phytanix, in consultation with the Company and Fulton AC, two of which directors shall be designated by Fulton AC, in consultation with the Company, and three of which directors shall be mutually agreed upon by Fulton AC and Phytanix. In addition, the board of directors of HoldCo will adopt an equity incentive plan and an employee stock purchase plan prior to the closing of the Business Combination.
The obligation of the Company, HoldCo, CBRG Merger
Sub, Phytanix Merger Sub and Phytanix to consummate the Business Combination is subject to certain customary closing conditions, including,
but not limited to, (i) the absence of any order, law or other legal restraint or prohibition issued by any court of competent jurisdiction
or other governmental entity of competent jurisdiction prohibiting or preventing the consummation of the transactions contemplated by
the Business Combination Agreement, (ii) the effectiveness of the Registration Statement to be filed by HoldCo, in accordance with the
provisions of the Securities Act, registering certain shares of HoldCo to be issued in the Business Combination, (iii) the required approval
of Phytanix’s stockholders, (iv) the required approval of the Company’s shareholders, (v) HoldCo having at least $
The Business Combination Agreement may be terminated under certain customary and limited circumstances prior to the closing of the Business Combination, including, but not limited to, (i) by mutual written consent of the Company and Phytanix, (ii) by the Company if the representations and warranties of Phytanix are not true and correct or if Phytanix fails to perform any covenant or agreement set forth in the Business Combination Agreement (including an obligation to consummate the Closing), in each case such that certain conditions to closing cannot be satisfied and the breach or breaches of such representations or warranties or the failure to perform such covenant or agreement, as applicable, are not cured or cannot be cured within certain specified time periods, (iii) by Phytanix if the representations and warranties of the Company are not true and correct or if the Company fails to perform any covenant or agreement set forth in the Business Combination Agreement (including an obligation to consummate the Closing), in each case such that certain conditions to closing cannot be satisfied and the breach or breaches of such representations or warranties or the failure to perform such covenant or agreement, as applicable, are not cured or cannot be cured within certain specified time periods, (iv) by either the Company or Phytanix if the required approvals are not obtained from the Company’s shareholders after the conclusion of a meeting of the Company’s shareholders held for such purpose at which such shareholders voted on such approvals, (v) by either the Company or Phytanix, if any governmental entity of competent jurisdiction shall have issued an order permanently enjoining, restraining or otherwise prohibiting the transactions contemplated under the Business Combination Agreement and such order shall have become final and nonappealable, (vi) by the Company if Phytanix does not deliver, or cause to be delivered to the Company the written consent of the requisite shareholders of Phytanix adopting and approving the Business Combination and such failure is not cured within specified time periods, and (vii) by either the Company or Phytanix if the transactions contemplated by the Business Combination Agreement have not been consummated on or prior to the last deadline for the Company to consummate its initial business combination pursuant to the Second Amended and Restated Memorandum and Articles of Association.
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If the Business Combination Agreement is validly terminated, none of the parties to the Business Combination Agreement will have any liability or any further obligation under the Business Combination Agreement, except in the case of a willful and material breach or fraud and for customary obligations that survive the termination thereof (such as confidentiality obligations).
The Company and Phytanix have mutually agreed to terminate the Business Combination Agreement and, on April 7, 2025, the Company and Phyantix entered into a Termination Agreement, which immediately terminated the Business Combination Agreement (the “Termination Agreement”).
Sponsor Letter Agreement
Concurrently with the execution of the Business Combination Agreement, the Company and Fulton AC, entered into a letter agreement (the “Sponsor Letter Agreement”), pursuant to which, among other things, (i) Fulton AC agreed to vote its Class B Ordinary Shares in favor of each of the transaction proposals to be voted upon at the meeting of the Company’s shareholders, including approval of the Business Combination Agreement and the transactions contemplated thereby, (ii) Fulton AC agreed to waive any adjustment to the conversion ratio set forth in the governing documents of the Company or any other anti-dilution or similar protection with respect to the Class B Ordinary Shares (whether resulting from the transactions contemplated by the Subscription Agreements (as defined below) or otherwise), and (iii) Fulton AC agreed to be bound by certain transfer restrictions with respect to his, her or its shares in the Company prior to the Closing.
Company Stockholder Transaction Support Agreements
Pursuant to the Business Combination Agreement, certain stockholders of Phytanix entered into transaction support agreements (collectively, the “Company Transaction Support Agreements”) with the Company and Phytanix, pursuant to which such stockholders of Phytanix agreed to, among other things, (i) vote in favor of the Business Combination Agreement and the transactions contemplated thereby and (ii) be bound by certain covenants and agreements related to the Business Combination.
Investor Rights Agreement
Concurrently with the execution of the Business
Combination Agreement, the Company, HoldCo, Fulton AC, and certain Phytanix stockholders entered into an investor rights agreement (the
“Investor Rights Agreement”) pursuant to which, among other things, Fulton AC, and certain Phytanix stockholders will be
granted certain customary registration rights. Further, subject to customary exceptions set forth in the Investor Rights Agreement, the
shares of HoldCo beneficially owned or owned of record by Fulton AC, certain officers and directors of the Company and HoldCo (including
any shares of HoldCo issued pursuant to the Business Combination Agreement) will be subject to a lock-up period beginning on the date
the Closing occurs (the “Closing Date”) until the date that is the earlier of (i)
Note 7 — Shareholders’ Deficit
Preference Shares — The
Company is authorized to issue
Class A ordinary shares — The
Company is authorized to issue
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Class B ordinary shares — The
Company is authorized to issue
Class A and Class B ordinary shareholders of record
are entitled to
The Class B ordinary shares will automatically
convert into Class A ordinary shares on the first business day following the consummation of the initial Business Combination at a ratio
such that the number of Class A ordinary shares issuable upon conversion of all Class B ordinary shares will equal, in the aggregate,
on an as-converted basis,
Waiver of $100,000 dissolution expense pursuant
to Dissolution Expense Reimbursement Agreement – In connection with the Dissolution Expense Reimbursement Agreement, Fulton
agreed to reimburse the Trust Account up to $
Note 8 —Warrants
As of March 31, 2025 and December 31, 2024, the
Company had
Public Warrants may only be exercised for a whole
number of shares. No fractional Public Warrants will be issued upon separation of the Units and only whole Public Warrants will trade.
The Public Warrants will become exercisable on the later of (a)
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The warrants have an exercise price of $
The Private Placement Warrants are identical to
the Public Warrants underlying the Units sold in the Initial Public Offering, except (i) that the Private Placement Warrants and the
Class A ordinary shares issuable upon exercise of the Private Placement Warrants will not be transferable, assignable or salable until
Redemption of warrant when the price per
share of Class A ordinary shares equals or exceeds $
| ● | in whole and not in part; |
| ● | at a price of $ |
| ● | upon a minimum of |
| ● | if, and only if, the closing price of Class A ordinary shares equals or exceeds $ |
Redemption of warrants when the price per
share of Class A ordinary shares equals or exceeds $
| ● | in whole and not in part; |
| ● | at $ |
| ● | if, and only if, the closing price of Class A ordinary shares equals or exceeds $ |
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The “fair value” of Class A ordinary
shares for the above purpose shall mean the volume weighted average price of Class A ordinary shares during the
In no event will the Company be required to net cash settle any warrant. If the Company is unable to complete a Business Combination prior to November 15, 2024 and the Company liquidates the funds held in the Trust Account, holders of warrants will not receive any of such funds with respect to their warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with the respect to such warrants. Accordingly, the warrants may expire worthless.
On December 29, 2023, in connection with the Securities
Purchase Agreement, CB Co-Investment irrevocably agreed to convert the $
Note 9 —Fair Value Measurements
The following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis as of March 31, 2025 and December 31, 2024 and indicates the fair value hierarchy of the valuation techniques that the Company utilized to determine such fair value.
The carrying amounts of prepaid expenses, accounts payable, accrued expenses and accrued expense-related party approximate their fair values due to their short term maturities and the nature of these instruments.
March 31, 2025
| Quoted Prices in | Significant Other | Significant Other | ||||||||||
| Active Markets | Observable Inputs | Unobservable Inputs | ||||||||||
| Description | (Level 1) | (Level 2) | (Level 3) | |||||||||
| Assets: | ||||||||||||
| Investments held in Trust Account - U.S. Treasury Securities | $ | $ | $ | |||||||||
| Liabilities: | ||||||||||||
| Contingently issuable private placement warrants | $ | $ | $ | |||||||||
| Derivative liabilities- Public Warrants | $ | $ | $ | |||||||||
| Derivative liabilities- Private Placement Warrants | $ | $ | $ | |||||||||
December 31, 2024
| Quoted Prices in | Significant Other | Significant Other | ||||||||||
| Active Markets | Observable Inputs | Unobservable Inputs | ||||||||||
| Description | (Level 1) | (Level 2) | (Level 3) | |||||||||
| Assets: | ||||||||||||
| Investments held in Trust Account - U.S. Treasury Securities | $ | $ | $ | |||||||||
| Liabilities: | ||||||||||||
| Contingently issuable private placement warrants | $ | $ | $ | |||||||||
| Derivative liabilities- Public Warrants | $ | $ | $ | |||||||||
| Derivative liabilities- Private Placement Warrants | $ | $ | $ | |||||||||
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Transfers to/from Levels 1, 2, and 3 are recognized at the beginning of the reporting period. The estimated fair value of Public Warrants was transferred from a Level 3 measurement to a Level 1 measurement, when the Public Warrants were separately listed and traded in an active market in December 2021. The estimated fair value of the Private Placement Warrants was transferred from a Level 3 measurement to a Level 2 fair value measurement in January 2022, as the transfer of Private Placement Warrants to anyone who is not a permitted transferee would result in the Private Placement Warrants having substantially the same terms as the Public Warrants, the Company determined that the fair value of each Private Placement Warrant is equivalent to that of each Public Warrant. There were no other transfers between levels of the hierarchy for the three months ended March 31, 2025.
Level 1 assets consists of investments in U.S. treasury securities. The Company uses inputs such as actual trade data, quoted market prices from dealers or brokers, and other similar sources to determine the fair value of its investments.
The initial estimated fair value as of November 15, 2021, of the Public Warrants, the Private Placement Warrants, and the Forward Purchase Agreement is measured at fair value using a Monte Carlo simulation, determined using Level 3 inputs. The fair value of Public Warrants issued in connection with the Initial Public Offering have subsequently been measured based on the listed market price of such warrants. As of March 31, 2025 and December 31, 2024, the fair value of Private Placement Warrants and the contingently issuable Private Placement Warrants were determined based on the quoted price of the Public Warrants.
The following table provides quantitative information regarding Level 2 fair value measurements inputs at March 31, 2025 measurement date for contingently issuable Private Placement Warrants and Private Placement Warrants:
| Exercise price | $ | |||
| Stock price | $ | |||
| Term (years) | ||||
| Volatility | % | |||
| Risk-free rate | % | |||
| Dividend yield | % |
The following table provides quantitative information regarding Level 2 fair value measurements inputs at December 31, 2024 measurement date for contingently issuable Private Placement Warrants and Private Placement Warrants:
| Exercise price | $ | |||
| Stock price | $ | |||
| Term (years) | ||||
| Volatility | % | |||
| Risk-free rate | % | |||
| Dividend yield | % |
The change in the fair value of the derivative liabilities – public and private placement warrants measured using Level 3 inputs for the three months ended March 31, 2025 and 2024, is summarized as follows:
| Derivative liabilities – public and private placement warrants at December 31, 2024 | $ | |||
| Change in fair value of derivative warrant liabilities - public and Private Placement Warrants | ||||
| Derivative liabilities – public and private placement warrants at March 31, 2025 | $ |
| Derivative liabilities – public and private placement warrants at December 31, 2023 | $ | |||
| Change in fair value of derivative warrant liabilities - public and Private Placement Warrants | ||||
| Derivative liabilities – public and private placement warrants at March 31, 2024 | $ |
The change in the fair value of the Contingently issuable private placement warrants measured using Level 3 inputs for the three months ended March 31, 2025 and 2024, is summarized as follows:
| Contingently issuable private placement warrants at December 31, 2024 | $ | |||
| Change in fair value of contingently issuable private placement warrants | ||||
| Contingently issuable private placement warrants at March 31, 2025 | $ |
| Contingently issuable private placement warrants at December 31, 2023 | $ | |||
| Change in fair value of contingently issuable private placement warrants | ||||
| Contingently issuable private placement warrants at March 31, 2024 | $ |
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NOTE 10 — 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 March 31, 2025 | For the Three Months Ended March 31, 2024 | |||||||
| General and administrative expenses | $ | $ | ||||||
| Interest earned on the Trust Account | $ | $ | ||||||
The key measures of segment profit or loss reviewed by our CODM are interest earned on the Trust Account and general and administrative expenses. The CODM reviews interest earned on the Trust Account to measure and monitor shareholder 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 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.
Note 11 — Income Tax
ASC Topic 740 accounts for income taxes requiring an asset and liability approach to financial accounting and reporting for income taxes including the parameters for the recognition of deferred tax assets and liabilities. The Company is exempt from Cayman Islands as well as US taxation. Accordingly, there is no reported tax provision nor any net deferred tax asset or liability position in the accompanying financial statements.
Note 12 — Subsequent Events
The Company has evaluated subsequent events and transactions that occurred up to the date the financial statements were issued. Except for the identified below, the Company did not identify any subsequent events, that would have required adjustment or disclosure in the financial statements.
The Company and Phytanix have mutually agreed to terminate the Business Combinaiton Agreement and, on April 7, 2025, the Company and Phyantix entered into a Termination Agreement, which immediately terminated the Business Combination Agreement (the “Termination Agreement”).
On May 15, 2025 and June 16, 2025, the Sponsor
contributed approximately $
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
References to the “Company,” “Chain Bridge I,” “our,” “us” or “we” refer to Chain Bridge I. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the unaudited condensed interim financial statements and the notes thereto contained elsewhere in this report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.
Cautionary Note Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act. We have based these forward-looking statements on our current expectations and projections about future events. These forward-looking statements are subject to known and unknown risks uncertainties and assumptions about us that may cause our actual result levels of activity performance or achievements to be materially different from any future results, levels of activity performance or achievements expressed or implied by such forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “continue,” or the negative of such terms or other similar expressions. 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 Annual Report on Form 10-K filed with the SEC. 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.
Liquidity and Going Concern
As of March 31, 2025, we had cash of $17,565 and a working capital deficit of $1,146,045.
Our liquidity needs up to December 29, 2023 had been satisfied through the cash receipt of $25,000 from CBG and CB Co-Investment to cover for certain expenses on behalf of the Company in exchange for issuance of founder shares, a loan from the related party of approximately $244,000 under the Note (as defined herein) which was repaid in full on November 17, 2021, the net proceeds from the consummation of the Initial Public Offering, over-allotment, the Private Placement held outside of the trust account and the issuance of the convertible notes. In addition, in order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers and directors may, but are not obligated to, provide the Company Working Capital Loans (as defined in Note 5). In connection with the consummation of the transactions contemplated by the Securities Purchase Agreement, CB Co-Investment irrevocably agreed to convert the $1.15 million loan (the “Conversion Amount”) by CB Co-Investment to the Company at a conversion price of $1.00 per warrant, or 1,150,000 warrants. As of March 31, 2025, the fair value of converted loan was $14,375 which is included in contingently issuable private placement warrants on the accompanying balance sheet as of March 31, 2025.
The Company has until November 15, 2025 to consummate an initial Business Combination. If the Company has not consummated a Business Combination, the Company must (a) cease all operations except for the purpose of winding up; (b) as promptly as reasonably possible but not more than ten business days thereafter, redeem Public Shares; and (c) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining shareholders and the directors, liquidate and dissolve, subject in each case to its obligations under Cayman Islands law to provide for claims of creditors and in all cases subject to the other requirements of applicable law.
In connection with our assessment of going concern considerations in accordance with ASU 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” the Company has determined that the liquidity condition and the date for mandatory liquidation and subsequent dissolution raises substantial doubt about the Company’s ability to continue as a going concern. No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to liquidate after November 15, 2025. The financial statements do not include any adjustment that might be necessary if the Company is unable to continue as a going concern.
33
Results of Operations
Our entire activity since inception up to March 31, 2025 was in preparation for our Initial Public Offering and since the closing of the Initial Public Offering, the search for a prospective Business Combination. We will not generate any operating revenues until the closing and completion of our initial Business Combination, at the earliest.
For the three months ended March 31, 2025, we had a net loss of approximately $363,640, which consisted of general and administrative expenses of approximately $192,000 and general and administrative expenses to related party of $30,000, offset by investment income on the Trust Account of approximately $55,000, gain from the change in fair value of derivative liabilities of approximately $187,000 and gain from the change in fair value of contingently issuable private placement warrants of approximately $9,800.
For the three months ended March 31, 2024, we had a net loss of approximately $1.2 million, which consisted of loss from the change in fair value of derivative liabilities of approximately $1.0 million, loss from change in fair value of contingently issuable private placement warrants of approximately $52,000, and general and administrative expenses of approximately $510,000 and general and administrative expenses to related party of $30,000, offset by investment income on the Trust Account of approximately $344,000.
Contractual Obligations
Registration Rights and Shareholder Rights
The holders of Class B ordinary shares, Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans (and any shares of ordinary shares issuable upon the exercise of the Private Placement Warrants or warrants issued upon conversion of the Working Capital Loans and upon conversion of the Class B ordinary shares), were entitled to registration rights pursuant to a registration and shareholder rights agreement signed upon the consummation of the Initial Public Offering. These holders will be entitled to certain demand and “piggyback” registration rights. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
Critical Accounting Policies
Derivative Financial Instruments
We do not use derivative instruments to hedge exposures to cash flow, market or foreign currency risks. We evaluate all of our financial instruments, including issued stock purchase warrants, and forward purchase agreements, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives, pursuant to ASC Topic 480 and ASC Topic 815. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, will be re-assessed at the end of each reporting period. Derivative warrant liabilities will be classified as non-current liabilities as their liquidation is not reasonably expected to require the use of current assets or require the creation of current liabilities.
The 22,050,000 warrants that were issued in connection with the Initial Public Offering (including the 11,500,000 warrants included in the Units and the 10,550,000 Private Placement Warrants) and the 4,000,000 Forward Purchase Securities, were recognized as derivative liabilities in accordance with ASC Topic 815. Accordingly, the Company recognized the warrant instruments as liabilities at fair value and adjust the instruments to fair value at each reporting period. The liabilities will be subject to re-measurement at each balance sheet date until exercised. The fair value of the Forward Purchase Securities, Public Warrants and the Private Placement Warrants were initially measured using a Monte Carlo simulation. The fair value of Public Warrants issued in connection with the Initial Public Offering have subsequently been measured based on the listed market price of such Public Warrants. On December 26, 2023, in connection with the Securities Purchase Agreement, the Forward Purchase Securities were terminated and the Convertible Note was converted into contingently issuable private placement warrants. As of March 31, 2025 and December 31, 2024, the fair value of Private Placement Warrants was determined based on the quoted price of the Public Warrants.
34
Class A Ordinary Shares Subject to Possible Redemption
We account for our Class A ordinary shares subject to possible redemption in accordance with the guidance in ASC Topic 480. Class A ordinary shares subject to mandatory redemption (if any) are classified as liability instruments and are measured at fair value. Conditionally redeemable Class A ordinary shares (including Class A ordinary shares that features redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within our control) are classified as temporary equity. At all other times, Class A ordinary shares are classified as shareholders’ equity. Our Class A ordinary shares feature certain redemption rights that are considered to be outside of our control and subject to the occurrence of uncertain future events. Accordingly, as of March 31, 2025 and December 31, 2024, 455,736 Class A ordinary shares subject to possible redemption are presented at redemption value as temporary equity, outside of the shareholders’ deficit section of our balance sheets, respectively.
We recognize changes in redemption value immediately as they occur and adjusts the carrying value of the Class A ordinary shares subject to possible redemption to equal the redemption value at the end of each reporting period. This method would view the end of the reporting period as if it were also the redemption date for the security. Effective with the closing of the Initial Public Offering (including exercise of the over-allotment option), we recognized the accretion from initial book value to redemption amount, which resulted in charges against additional paid-in capital (to the extent available) and accumulated deficit.
Net Income (Loss) Per Share
We comply with accounting and disclosure requirements of ASC Topic 260. We have two classes of shares, which are referred to as Class A ordinary shares and Class B ordinary shares. Income and losses are shared pro rata between the two classes of shares. Net income per ordinary share is calculated by dividing the net income by the weighted average shares of ordinary shares outstanding for the respective period.
The calculation of diluted net income does not consider the effect of the warrants underlying the Units sold in the Initial Public Offering (including the consummation of the over-allotment) and the Private Placement Warrants to purchase an aggregate of 23,200,000 Class A ordinary shares in the calculation of diluted income per share, because their inclusion would be anti-dilutive under the treasury stock method. As a result, diluted net income per share is the same as basic net income per share for the three months ended March 31, 2025 and March 31, 2024. Accretion associated with the redeemable Class A ordinary shares is excluded from earnings per share as the redemption value approximates fair value.
We have considered the effect of Class B ordinary shares that were excluded from weighted average number as they were contingent on the exercise of over-allotment option by the underwriters. Since the contingency was satisfied, we have included these shares in the weighted average number as of the beginning of the period to determine the dilutive impact of these shares.
35
Recent Accounting Pronouncements
In June 2022, the FASB issued ASU 2022-03, ASC Topic 820 “Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions”. The ASU amends ASC Topic 820 to clarify that a contractual sales restriction is not considered in measuring an equity security at fair value and to introduce new disclosure requirements for equity securities subject to contractual sale restrictions that are measured at fair value. The ASU applies to both holders and issuers of equity and equity-linked securities measured at fair value. The amendments in this ASU are effective for the Company in fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. Early adoption is permitted for both interim and annual financial statements that have not yet been issued or made available for issuance. The adoption of ASU 2023-09 did not have a material impact on the Company’s financial statements and disclosures.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (ASU 2023-09), which requires disclosure of incremental income tax information within the rate reconciliation and expanded disclosures of income taxes paid, among other disclosure requirements. ASU 2023-09 is effective for fiscal years beginning after December 15, 2025. Early adoption is permitted. The Company’s management does not believe the adoption of ASU 2023-09 will have a material impact on its financial statements and disclosures.
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The amendments in this ASU require disclosures, on an annual and interim basis, of significant segment expenses that are regularly provided to the chief operating officer decision maker (“CODM”), as well as the aggregate amount of other segment items included in the reported measure of segment profit or loss. The ASU requires that a public entity disclose the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources. Public entities will be required to provide all annual disclosures currently required by Topic 280 in interim periods, and entities with a single reportable segment are required to provide all the disclosures required by the amendments in this ASU and existing segment disclosures in Topic 280. This ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The Company adopted ASU 2023-07 on January 1, 2024. The amendments will be applied retrospectively to all prior period presented in the financial statements.
Management does not believe that any other recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying financial statements.
Off-Balance Sheet Arrangements
As of March 31, 2025, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K.
JOBS Act
The JOBS Act contains provisions that, among other things, relax certain reporting requirements for qualifying public companies. We qualify as an “emerging growth company” and under the JOBS Act are allowed to comply with new or revised accounting pronouncements based on the effective date for private (not publicly traded) companies. We are electing to delay the adoption of new or revised accounting standards, and as a result, we may not comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non- emerging growth companies. As a result, the financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.
Additionally, we are in the process of evaluating the benefits of relying on the other reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, if, as an “emerging growth company,” we choose to rely on such exemptions we may not be required to, among other things, (i) provide an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404, (ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (auditor discussion and analysis) and (iv) disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the CEO’s compensation to median employee compensation. These exemptions will apply for a period of five years following the completion of our Initial Public Offering or until we are no longer an “emerging growth company,” whichever is earlier.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Not required for smaller reporting companies.
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Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
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 officer or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures as of March 31, 2025, 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 principal financial officer have concluded that as of March 31, 2025, our disclosure controls and procedures were not effective because of a material weakness in our internal control over financial reporting related to the adequate review and reconciliation of its liabilities and prepaid expenses.
In light of this material weakness, we performed additional analysis as deemed necessary to ensure that our financial statements were prepared in accordance with U.S. generally accepted accounting principles. Accordingly, management believes that the financial statements included in this Quarterly Report present fairly in all material respects our financial position, results of operations and cash flows for the period presented.
Management has undertaken remediation steps to address the material weakness, including increasing management review processes over liabilities. This remediation is an ongoing process and there can be no assurance that it will effectively address the material weaknesses.
Internal Control over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting for the Company. Management assessed the effectiveness of our internal control over financial reporting as of March 31, 2025 based on the framework in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on its assessment, management concluded that our internal control over financial reporting was not effective as of March 31, 2025.
Changes in Internal Control over Financial Reporting
Except as described above, there were no changes to our internal control over financial reporting that occurred during our fiscal quarter ended March 31, 2025 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
None.
Item 1A. Risk Factors
Factors that could cause our actual results to differ materially from those in this Quarterly Report on Form 10-Q include the risk factors described in our Annual Report on Form 10-K filed with the SEC on June 20, 2025. You should review the risk factors described in our Annual Report on Form 10-K filed with the SEC on June 20, 2025 for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in this Quarterly Report on Form 10-Q. If any of the risks described in our Annual Report on Form 10-K filed with the SEC on June 20, 2025 actually occur, our business, financial condition and results of operations could be adversely affected.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
None.
Item 5. Other Information
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Item 6. Exhibits.
| * | Filed or furnished herewith. |
| + | These certifications are furnished to the SEC pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall they be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing. |
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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 on this 15th day of July, 2025.
| Chain Bridge I | ||
| By: | /s/ Andrew Cohen | |
| Name: | Andrew Cohen | |
| Title: | Chief Executive Officer | |
| By: | /s/ Andrew Kucharchuk | |
| Name: | Andrew Kucharchuk | |
| Title: | Chief Financial Officer | |
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