UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For the quarterly period ended
For the transition period from _________to __________
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Indicate by check mark whether
the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such
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As of the date hereof, there
were
ChampionsGate Acquisition Corporation
TABLE OF CONTENTS
i
PART I – FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CHAMPIONSGATE ACQUISITION CORPORATION
BALANCE SHEETS
(UNAUDITED)
| March 31, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Assets | ||||||||
| Current Assets | ||||||||
| Cash | $ | $ | ||||||
| Prepaid expenses | ||||||||
| Total Current Assets | ||||||||
| Non-current Assets | ||||||||
| Deferred offering costs | ||||||||
| Total Assets | $ | $ | ||||||
| Liabilities and Shareholders’ Deficit | ||||||||
| Current Liabilities | ||||||||
| Accounts payable and accrued expenses | $ | $ | ||||||
| Accrued offering costs | ||||||||
| Due to related parties | ||||||||
| Promissory note - related party | ||||||||
| Total Current Liabilities | ||||||||
| Total Liabilities | ||||||||
| Commitments and Contingencies (Note 6) | ||||||||
| Shareholders’ Deficit: | ||||||||
| Preference shares, $ | ||||||||
| Class A ordinary shares, $ | ||||||||
| Class B ordinary shares, $ | ||||||||
| Additional paid-in capital | ||||||||
| Contribution receivable | ( | ) | ( | ) | ||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total Shareholders’ Deficit | ( | ) | ( | ) | ||||
| Total Liabilities and Shareholders’ Deficit | $ | $ | ||||||
| (1) |
| (2) |
The accompanying notes are an integral part of these unaudited financial statements.
1
CHAMPIONSGATE ACQUISITION CORPORATION
STATEMENT OF OPERATIONS
(UNAUDITED)
| For the period from | ||||||||
| For the Three Months Ended | March 27, 2024 (Inception) to | |||||||
| March 31, 2025 | March 31, 2024 | |||||||
| Formation and operating costs | $ | $ | ||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Basic and diluted weighted average Class B ordinary shares outstanding (1)(2) | ||||||||
| Basic and diluted net loss per Class B ordinary share | $ | ( | ) | $ | ( | ) | ||
| (1) |
| (2) |
The accompanying notes are an integral part of these unaudited financial statements.
2
CHAMPIONSGATE ACQUISITION CORPORATION
STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY (DEFICIT)
(UNAUDITED)
| Ordinary Shares | Additional | Total | ||||||||||||||||||||||||||||||||||||||
| Preference Shares | Class A | Class B | Paid-in | Contribution | Accumulated | Shareholders’ | ||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares(1) | Amount | Capital | Receivable | Deficit | Equity | |||||||||||||||||||||||||||||||
| Balance as of March 27, 2024 (Inception) | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||
| Shares issued to initial shareholder and executives (1) | ||||||||||||||||||||||||||||||||||||||||
| Additional shares issued to initial shareholder | - | - | - | - | - | ( | ) | |||||||||||||||||||||||||||||||||
| Forfeiture of shares issued to initial shareholder (2) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||
| Net loss | - | - | - | - | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Balance as of March 31, 2024 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||||||||||||||||
| Ordinary Shares | Additional | Total | ||||||||||||||||||||||||||||||||||||||
| Preference Shares | Class A | Class B | Paid-in | Contribution | Accumulated | Shareholders’ | ||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares(1) | Amount | Capital | Receivable | Deficit | Equity | |||||||||||||||||||||||||||||||
| Balance as of December 31, 2024 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||||||||||||||||||||||||
| Net loss | - | - | - | - | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Balance as of March 31, 2025 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||||||||||||||||||||||||
| (1) |
| (2) |
The accompanying notes are an integral part of these unaudited financial statements.
3
CHAMPIONSGATE ACQUISITION CORPORATION
STATEMENT OF CASH FLOWS
(UNAUDITED)
| For the period from | ||||||||
| For the Three Months Ended | March 27, 2024 (Inception) to | |||||||
| March 31, 2025 | March 31, 2024 | |||||||
| Cash Flows from Operating Activities: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Changes in operating assets and liabilities: | ||||||||
| Prepaid expenses | ( | ) | ( | ) | ||||
| Due to related parties | ||||||||
| Accounts payable and accrued expenses | ( | ) | ||||||
| Accrued offering costs | ||||||||
| Net Cash Used in Operating Activities | ( | ) | ( | ) | ||||
| Cash Flows from Financing Activities: | ||||||||
| Proceeds from promissory note - related party | ||||||||
| Proceeds from issuance of Class B ordinary shares | ||||||||
| Payment of deferred offering costs | ( | ) | ||||||
| Net Cash Provided by Financing Activities | ||||||||
| Net Change in Cash | ||||||||
| Cash, beginning of period | ||||||||
| Cash, end of period | $ | $ | ||||||
| Supplemental Disclosure of Noncash Activities: | ||||||||
| Deferred offering costs included in accrued offering costs | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited financial statements.
4
CHAMPIONSGATE ACQUISITION CORPORATION
NOTES TO UNAUDITED FINANCIAL STATEMENTS
Note 1 — Organization, Business Operation and Going Concern Consideration
ChampionsGate Acquisition Corporation (the “Company”)
is a blank check company incorporated in the Cayman Islands on
As of March 31, 2025, the Company had not commenced any operations. For the period from March 27, 2024 (inception) through March 31, 2024 and the three months ended March 31, 2025, the Company’s efforts have been limited to organizational activities as well as activities related to the initial public offering (the “IPO”, see Note 3). The Company will not generate any operating revenues until after the completion of a Business Combination, at the earliest. The Company will generate non-operating income in the form of dividend and/or interest income from the proceeds derived from the IPO and Private Placement (see Note 4).
The Company’s management has broad discretion with respect to the specific application of the net proceeds of the IPO and the sale of Private Placement Units (as defined below), although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. There is no assurance that the Company will be able to complete a Business Combination successfully.
The Company’s founder and sponsor is ST Sponsor Limited, a Cayman Islands exempted company (the “Sponsor”). The Company’s ability to commence operations is contingent upon obtaining adequate financial resources through the IPO and the Private Placement.
On May 29, 2025, the Company consummated IPO of
Simultaneously with the consummation (the “closing”)
of the IPO and the sale of the Units, the Company consummated the Private Placement of
Transaction costs amounted to $
In conjunction with the IPO, the Company issued
to the underwriter
5
The Company’s initial Business Combination
must occur with one or more target businesses that together have an aggregate fair market value of at least
Upon the closing of the IPO, management has agreed
that at least $
The Company will provide its public shareholders with the opportunity to redeem all or a portion of their public shares upon the completion of the Business Combination either (i) in connection with a shareholder meeting called to approve the Business Combination or (ii) by means of a tender offer.
The ordinary shares subject to redemption will
be accredited to the redemption value and classified as temporary equity upon the completion of the IPO, in accordance with Accounting
Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” The Company has determined
not to consummate any Business Combination unless the Company has net tangible assets of at least $
6
The Company will have only 18 months from the closing of the IPO (or up to 27 months from the closing of the IPO if the Company extends three months at certain cost to consummate a Business Combination by the full amount of time) to complete its initial Business Combination. The Company will: (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but no more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to the Company to pay taxes that were paid by the Company or are payable by the Company, if any (certain amount of interest to pay dissolution expenses) divided by the number of the then-issued and outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any); and, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of its remaining shareholders and its Board of Directors, liquidate and dissolve, subject in each case to its obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. time). The Sponsor and each member of management team have entered into an agreement with the Company, pursuant to which they have agreed to waive their rights to liquidating distributions from the trust account with respect to any insider shares they hold if the Company fail to consummate an initial Business Combination within 18 months from the closing of this offering (or up to 27 months from the closing of this offering, if the Company extend the period of time to consummate a Business Combination).
The Sponsor has agreed that it will be liable
to the Company if and to the extent any claims by a third party for services rendered or products sold to the Company, or a prospective
target business with which the Company has entered into a written letter of intent, confidentiality or similar agreement or Business Combination
agreement, reduce the amount of funds in the trust account to below the lesser of (i) $
Going Concern Consideration
As
of March 31, 2025, the Company had a working capital deficiency of $
Risks and Uncertainties
As a result of the military action commenced in February 2022 by the Russian Federation and Belarus in the country of Ukraine and related economic sanctions, the Company’s ability to consummate a Business Combination, or the operations of a target business with which the Company ultimately consummates a Business Combination, may be materially and adversely affected. In addition, the Company’s ability to consummate a transaction may be dependent on the ability to raise equity and debt financing which may be impacted by these events, including as a result of increased market volatility, or decreased market liquidity in third-party financing being unavailable on terms acceptable to the Company or at all. The impact of this action and related sanctions on the world economy and the specific impact on the Company’s financial position, results of operations and/or ability to consummate a Business Combination are not yet determinable. The unaudited financial statements do not include any adjustments that might result from the outcome of this uncertainty.
7
Note 2 — Significant Accounting Policies
Basis of Presentation
The accompanying unaudited financial statements are presented in conformity with accounting principles generally accepted in the United States of America (“US GAAP”) and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). The interim financial information provided is unaudited but includes all adjustments which management considers necessary for the fair presentation of the results for the period. Operating results for the interim period ended March 31, 2025 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2025.
Emerging Growth Company
The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended, (the “Securities Act”), as modified by the Jumpstart Our Business Startups Act of 2012, (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such an 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 unaudited financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
Use of Estimates
The preparation of the unaudited financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited financial statements and the reported amounts of expenses during the reporting period. Actual results could differ 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. The Company had $
8
Deferred Offering Costs
The Company complies with the requirements of ASC 340-10-S99-1 and SEC Staff Accounting Bulletin (“SAB”) Topic 5A — Expenses of Offering. Deferred offering costs consist of legal, and other costs (including underwriting discounts and commissions) incurred through the balance sheet date that are directly related to the IPO and that will be charged to shareholders’ equity upon the completion of the IPO.
Net Loss Per Ordinary Share
Net loss per ordinary share is computed by dividing
net loss by the weighted average number of Class B ordinary shares outstanding during the period, excluding ordinary shares subject
to forfeiture by the Sponsor. Weighted average shares were reduced for the effect of an aggregate of
Fair Value of Financial Instruments
The fair value of the Company’s assets and liabilities, which qualify as financial instruments under FASB ASC 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the accompanying balance sheet, primarily due to their short-term nature.
The Company applies ASC 820, which establishes a framework for measuring fair value and clarifies the definition of fair value within that framework. ASC 820 defines fair value as an exit price, which is the price that would be received for an asset or paid to transfer a liability in the Company’s principal or most advantageous market in an orderly transaction between market participants on the measurement date. The fair value hierarchy established in ASC 820 generally requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Observable inputs reflect the assumptions that market participants would use in pricing the asset or liability and are developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs reflect the entity’s own assumptions based on market data and the entity’s judgments about the assumptions that market participants would use in pricing the asset or liability and are to be developed based on the best information available in the circumstances.
| ● | Level 1 — Assets and liabilities with unadjusted, quoted prices listed on active market exchanges. Inputs to the fair value measurement are observable inputs, such as quoted prices in active markets for identical assets or liabilities. |
| ● | Level 2 — Inputs to the fair value measurement are determined using prices for recently traded assets and liabilities with similar underlying terms, as well as direct or indirect observable inputs, such as interest rates and yield curves that are observable at commonly quoted intervals. |
| ● | Level 3 — Inputs to the fair value measurement are unobservable inputs, such as estimates, assumptions, and valuation techniques when little or no market data exists for the assets or liabilities. |
9
Stock Compensation
The Company accounts for stock-based compensation expense in accordance with ASC 718, “Compensation — Stock Compensation” (“ASC 718”). Under ASC 718, stock-based compensation associated with equity-classified awards is measured at fair value upon the grant date and recognized over the requisite service period. To the extent a stock-based award is subject to a performance condition, the amount of expense recorded in a given period, if any, reflects an assessment of the probability of achieving such performance condition, with compensation recognized once the event is deemed probable to occur. Forfeitures are recognized as incurred.
Income Taxes
The Company accounts for income taxes under ASC 740 Income Taxes (“ASC 740”). ASC 740 requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statement and tax basis of assets and liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carry forwards. ASC 740 additionally requires a valuation allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not be realized.
ASC 740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim period, disclosure and transition. Based on the Company’s evaluation, it has been concluded that there are no significant uncertain tax positions requiring recognition in the Company’s unaudited financial statements.
The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of March 31, 2025. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position.
10
There is currently no taxation imposed on income by the Government of the Cayman Islands. The Company is considered to be an exempted Cayman Islands Company and is presently not subject to income taxes or income tax filing requirements in the Cayman Islands or the United States. Consequently, income taxes are not reflected in the Company’s unaudited financial statements.
Related Parties
Parties, which can be a corporation or individual, are considered to be related if the Company has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operational decisions. Companies are also considered to be related if they are subject to common control or common significant influence.
Recent Accounting Pronouncements
Management does not believe that any recently issued, but not effective, accounting standards, if currently adopted, would have a material effect on the Company’s unaudited financial statements.
Note 3 — Initial Public Offering
On May 29, 2025, the Company sold
Note 4 — Private Placement
Simultaneously
with the closing of the IPO, the Sponsor HoldCo purchased an aggregate of
11
Note 5 — Related Party Transactions
Insider Shares
On
April 18, 2024, the Company issued
On May 15, 2024, the Sponsor entered into
a securities transfer agreement, pursuant to which the Sponsor transferred
The share price was calculated using a scenario-based
method, incorporating probabilities of both a de-SPAC and an IPO, with the total unit value reaching $
| May 15, 2024 | ||||
| Estimated Volatility | % | |||
| Risk-free rate | % | |||
| Spot price | $ | |||
| Discount of lack of marketability (DLOM) | % | |||
12
Promissory Note — Related Party
On
April 18, 2024, the Sponsor agreed to loan the Company up to $
Working Capital Loans
In addition, in order to meet the Company’s
working capital needs following the consummation of the IPO if the funds not held in the trust account are insufficient, or to extend
its life, its insiders, officers and directors or their affiliates/designees may, but are not obligated to, loan the Company funds, from
time to time or at any time, in whatever amount they deem reasonable in their sole discretion. Each loan would be evidenced by a promissory
note. The notes would either be paid upon consummation of the Company’s initial Business Combination, without interest, or, at the
lender’s discretion, up to $
As of March 31, 2025 and December 31, 2024, the Company had no borrowings under the Working Capital Loans.
Due to Related Parties
On May 21, 2024, the Company signed the offer
letter with the CEO for compensation of $
As of March 31, 2025 and December 31, 2024,
due to the CEO for salary payable amounted to of $
On May 21, 2024, the Company signed the offer
letter with the CFO for compensation of $
As of March 31, 2025 and December 31, 2024,
due to the CFO including salary and reimbursement payable amounted to of $
13
Note 6 — Commitments and Contingencies
Underwriter Registration Rights
The holders of the insider shares, Private units (including securities contained therein) and Units (including securities contained therein) that may be issued on conversion of working capital loans or extension loans will be entitled to registration rights pursuant to a registration rights agreement to be signed prior to or on the effective date of this offering requiring the Company to register such securities for resale. The holders of these securities are entitled to make up to three demands, excluding short form demands, that the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the Company’s completion of the Company’s initial Business Combination and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
Underwriting Agreement
The Company granted the underwriter a
The underwriter will be entitled a cash underwriting
discount of $
In conjunction with the IPO, the Company issued
to the underwriter
Additionally, the underwriter will be entitled
to a cash underwriting discount of $
14
Note 7 — Shareholder’s Equity
Preference Share — The
Company is authorized to issue
Class A Ordinary Share — The
Company is authorized to issue
Class B
Ordinary Share — The Company is authorized to issue
Rights
Except in cases where the Company is not the surviving
company in a Business Combination, each holder of a right will automatically receive one-eighth of
Note 8 — 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
15
When evaluating the Company’s performance
and making key decisions regarding resource allocation, the CODM reviews several key metrics, which includes formation and operating costs.
| For
the three months ended March 31, 2025 | For
the period from March 27, 2024 (Inception) to March 31, 2024 | |||||||
| Formation and operating costs | $ | $ | ||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
The key measures of segment profit or loss reviewed by our CODM is formation and operating costs. Formation and operating costs are reviewed and monitored by the CODM to manage and forecast cash to ensure enough capital is available to complete the IPO and eventually a Business Combination within the business combination period. The CODM also reviews formation and operating costs to manage, maintain and enforce all contractual agreements to ensure costs are aligned with all agreements and budget.
Note 9 — Subsequent Events
The Company evaluated subsequent events and transactions that occurred after the balance sheet date through the date when these unaudited financial statements were issued. Based on this review, except as discussed below, the Company did not identify any subsequent events that would require adjustment or disclosure in the unaudited financial statements.
On April 30, 2025, the Company changed the terms
of its IPO. Pursuant to the updated terms of IPO, the Company intends to offer for sale of
On April 30, 2025, the Sponsor agreed to surrender
On May 11, 2025, the Company executed an amendment to the offer letter by and between the CEO and the Company, dated May 21, 2024, and an amendment to the offer letter by and between the CFO and the Company, dated May 21, 2024 (the two amendments, collectively, “Amendments”), to revise the terms of the management compensation. Effective on May 11, 2025, the Amendments provide that:
The CEO shall receive (i) monthly cash compensation of $7,500 for three months from the date of the offer letter until the IPO is consummated, (ii) monthly cash compensation of $7,500 for three months from the date the IPO is consummated and 90th date after the closing of the IPO, (iii) $22,500 upon the entry of a definitive agreement by the Company, (iv) $22,500 upon the closing of the Company’s initial business combination.
The CFO shall receive (i) monthly cash compensation of $5,000 for three months from the date of the offer letter until the IPO is consummated, (ii) monthly cash compensation of $5,000 for three months from the date the IPO is consummated and 90th date after the closing of the IPO, (iii) $15,000 upon the entry of a definitive agreement by the Company, (iv) $15,000 upon the closing of our initial business combination.
Certain payments or accrual made to-date under the original offer letters will be prospectively adjusted from amounts to be paid under the Amendments.
16
On May 21, 2025, Sponsor HoldCo converted
On May 29, 2025, the Company consummated IPO of
The public Rights will be classified within shareholders’
deficit and will not require remeasurement after issuance. The public Rights will be classified within Level 3 of the fair value hierarchy
at the measurement dates due to the use of unobservable inputs inherent in assumptions related to the market adjustments as noted below.
| May 29, 2025 | ||||
| Unit value | $ | |||
| Share price | $ | |||
| Conversion ratio | % | |||
| Probability of De-SPAC | % | |||
| Discount of lack of marketability (DLOM) | % | |||
| Fair value of each right | $ | |||
Substantially concurrently with the closing of
the IPO, the Company completed the private sale (the “Private Placement”) of
In connection with the consummation of the IPO
and the Private Placement, the proceeds of $
Concurrent with the offering, the Sponsor transferred
an aggregate of
The share price was calculated using a scenario-based
method, incorporating probabilities of both a de-SPAC and an IPO, with the total Unit value reaching $
| May 29, 2025 | ||||
| Per Share Value of Class A Ordinary Shares | $ | |||
| Probability of De-SPAC | % | |||
| Per Share Value of Class B Ordinary Shares (Marketable Basis) | $ | |||
| Discount of lack of marketability (DLOM) | % | |||
On June 26, 2025, the Sponsor HoldCo agreed to
loan the Company up to $
On July 7, 2025, the Company repaid $
17
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
References in this report (the “Quarterly Report”) to “we,” “us” or the “Company” refer to ChampionsGate Acquisition Corporation. References to our “management” or our “management team” refer to our officers and directors, and references to the “Sponsor” refer to ST Sponsor Limited and the “Sponsor HoldCo” refer to ST Sponsor Investment LLC. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the unaudited financial statements and the notes thereto contained elsewhere in this Quarterly Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.
Special Note Regarding Forward-Looking Statements
This Quarterly Report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”) that are not historical facts, and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements, other than statements of historical fact included in this Quarterly Report including, without limitation, statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding the Company’s financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. Words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would” and variations thereof and similar words and expressions are intended to identify such forward-looking statements. Such forward- looking statements relate to future events or future performance, but reflect management’s current beliefs, based on information currently available. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the Risk Factors section of the Company’s final prospectus for its initial public offering (the “IPO” described below) filed with the Securities Exchange Commission (the “SEC”) on June 5, 2025 (File No. 001-42651) (the “Prospectus”). The Company’s securities filings can be accessed on the EDGAR section of the SEC’s website at www.sec.gov. Except as expressly required by applicable securities law, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.
Overview
We are a blank check company incorporated as a Cayman Islands exempted company and incorporated for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses. We have not selected any specific business combination target and we have not, nor has anyone on our behalf, initiated any substantive discussions, directly or indirectly, with any business combination target. We intend to effectuate our Business Combination using cash from the proceeds of our Initial Public Offering (“IPO”) and the sale of our shares, debt or a combination of cash, equity and debt. We expect to continue to incur significant costs in the pursuit of our acquisition plans. We cannot assure you that our plans to complete a Business Combination will be successful.
Our Initial Public Offering
On May 29, 2025, we consummated our IPO of 7,475,000 units (including 975,000 units issued upon the full exercise of the over-allotment option, the “Units”). Each Unit consists of one Class A ordinary share (the “Class A ordinary share”), $0.0001 par value per share, and one right (“Right”) to receive of one-eighth of one Class A ordinary share upon the completion of the initial Business Combination. The Units were sold at an offering price of $10.00 per Unit, generating total gross proceeds of $74,750,000. Simultaneously with the consummation (the “closing”) of the IPO and the sale of the Units, we consummated the Private Placement of 230,000 units (the “Private Placement Units”) to Sponsor HoldCo at a price of $10.00 per Private Placement Unit, generating total proceeds of $2,300,000. Each Private Placement Unit consists of one Class A ordinary share, and one Right to receive of one-eighth of one Class A ordinary share upon the completion of the initial Business Combination. On May 29, 2025, a total of $75,123,750 of the net proceeds from the IPO and the Private Placement was deposited in a trust account established for the benefit of the Company’s Public Shareholders at a U.S. based trust account, with Continental Stock Transfer & Trust Company, acting as trustee.
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We also issued to Clear Street LLC, the representative of the underwriters of the IPO, 112,125 Class A ordinary shares as part of the underwriting compensation (the “Representative Shares”) on the closing date of the IPO. The Representative Shares are identical to the Class A Ordinary Shares included in the Units, with certain exceptions.
Since our IPO, our sole business activity has been identifying, evaluating suitable acquisition transaction candidates and preparing for consummation of a Business Combination. We presently have no revenue and have had losses since inception from incurring formation and operating costs. We have relied upon the sale of our securities and loans from the Sponsor and other parties to fund our operations.
Results of Operations
We have neither engaged in any operations nor generated any revenues to date. Our only activities since inception have been organizational activities and those necessary to prepare for the IPO and after the IPO, identifying a target company for a Business Combination. Following the IPO, we will not generate any operating revenues until after completion of our initial business combination. We expect to generate non-operating income in the form of interest income on cash and cash equivalents after the IPO. After the IPO, we expect to incur increased expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses in connection with completing a Business Combination.
For the three months ended March 31, 2025, we had a net loss of $117,327, which consisted of formation and operating costs of $117,327.
For the period from March 27, 2024 (inception) to March 31, 2024, we had a net loss of $55, which consisted of formation and operating costs of $55.
Liquidity and Capital Resources
Our liquidity needs have been satisfied prior to completion of this offering through contribution from our sponsor of $22,901.40 to purchase the founder shares (the initial purchase price of $25,001 for the issuance of the 2,170,161 insider shares less the consideration price of $2,550.72 to be received from directors and officers in exchange for the transfer of certain insider shares) and up to $500,000 in loans from our sponsor under an unsecured promissory note.
Following the closing of the IPO and sale of the Private Placement Units on May 29, 2025, a total of $75,123,750 was placed in the trust account, and we had $464,339 of cash held outside of the trust account, after payment of costs related to the IPO, and available for working capital purposes. In connection with the IPO, we incurred $3,259,220 in transaction costs, consisting of $745,500 of underwriting fees, $1,495,000 of deferred underwriting fees, $293,020 of the Representative Shares, and $723,700 of other offering costs.
In conjunction with the IPO, the Company issued to the underwriter 112,125 Class A ordinary shares for no consideration (the “Representative Shares”). The fair value of the Representative Shares accounted for as compensation under the Financial Accounting Standards Board’s Accounting Standards Codification (“ASC”) 718, “Compensation – Stock Compensation” (“ASC 718”) is included in the offering costs. The estimated fair value of the Representative Shares as of the IPO date totaled $293,020.
As of March 31, 2025, we had $2,532 in cash and a working capital deficit of $636,853 excluding deferred offering costs. Upon the closing of the IPO and the Private Placement on May 29, 2025, cash of $464,339 was held outside of the trust account and is available for the payment of offering costs and for working capital purposes.
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We intend to use the funds held in the trust account, including any amounts representing interest earned on the trust account (which interest shall be net of taxes payable and up to $100,000 of interest released to us to pay dissolution expenses) to complete our initial business combination. We may withdraw interest to pay taxes, if any. Our annual income tax obligations will depend on the amount of interest and other income earned on the amounts held in the trust account. To the extent that our ordinary shares or debt is used, in whole or in part, as consideration to complete our initial business combination, the remaining proceeds held in the trust account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.
Prior to the completion of our initial business combination, we will have available to us $1,500,000 of proceeds held outside the trust account. We will use these funds primarily to identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from the offices, plants or similar locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses, structure, negotiate and complete a business combination, and to pay taxes to the extent the interest earned on the trust account is not sufficient to pay our taxes.
In order to fund working capital deficiencies or finance transaction costs in connection with an intended initial business combination, our Sponsor HoldCo, ponsor or their affiliates or certain of our officers and directors may, but are not obligated to, loan us funds as may be required. If we complete our initial business combination, we would repay such loaned amounts. In the event that our initial business combination does not close, we may use a portion of the working capital held outside the trust account to repay such loaned amounts but no proceeds from our trust account would be used for such repayment.
Up to $1,500,000 of the loans made by our Sponsor HoldCo, sponsor, our officers and directors, or our or their affiliates to us prior to or in connection with our initial business combination may be convertible into units, at a price of $10.00 per unit at the option of the lender, upon consummation of our initial business combination. The units would be identical to the placement units. The terms of such loans by our officers and directors, if any, have not been determined and no written agreements exist with respect to such loans. We do not expect to seek loans from parties other than our Sponsor HoldCo, sponsor, our officers and directors or an affiliate of theirs as we do not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our trust account.
We do not believe we will need to raise additional funds in order to meet the expenditures required for operating our business. However, if our estimates of the costs of identifying a target business, undertaking in-depth due diligence and negotiating an initial business combination are less than the actual amount necessary to do so, we may have insufficient funds available to operate our business prior to our initial business combination. Moreover, we may need to obtain additional financing either to complete our initial business combination or because we become obligated to redeem a significant number of our public shares upon completion of our initial business combination, in which case we may issue additional securities or incur debt in connection with such business combination.
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Off-Balance Sheet Arrangements; Commitments and Contractual Obligations; Quarterly Results
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 and did not have any commitments or contractual obligations. No unaudited quarterly operating data is included in this prospectus as we have not conducted any operations to date.
Contractual Obligations
Registration Rights
The holders of the insider shares and Private Placement Units, including any Working Capital Units of those issued upon conversion of Working Capital Loans will be entitled to registration rights pursuant to a registration rights agreement signed on May 27, 2025. The holders of these securities are entitled to make up to three demands, excluding short form demands, that we register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed after the completion of our initial business combination and rights to require us to register for resale such securities pursuant to Rule 415 under the Securities Act. We will bear the costs and expenses of filing any such registration statements.
Underwriting Agreement
The underwriters received a cash underwriting discount of $0.10 per Unit, or $747,500 at the closing of the IPO. In addition, the underwriters will be entitled to a deferred fee of $0.20 per Unit, or $1,495,000 in the aggregate upon the consummation of a Business Combination. The deferred fee will become payable to the underwriters from the amounts held in the Trust Account solely in the event that the Company completes its Business Combination, subject to the terms of the underwriting agreement dated May 27, 2025.
Critical Accounting Policies and Estimates
Use of Estimates
The preparation of the unaudited financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the unaudited financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events.
Recent Accounting Pronouncements
Management does not believe that any recently issued, but not effective, accounting standards, if currently adopted, would have a material effect on our unaudited financial statements.
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise required under this item.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Disclosure controls are procedures that are designed with the objective of ensuring that information required to be disclosed in our reports filed under the Exchange Act, such as this Report, is recorded, processed, summarized, and reported within the time period specified in the SEC’s rules and forms. Disclosure controls are also designed with the objective of ensuring that such information is accumulated and communicated to our management, including the chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure. Our management evaluated, with the participation of our current chief executive officer and chief financial officer) (our “Certifying Officers”), the effectiveness of our disclosure controls and procedures as of March 31, 2025, pursuant to Rule 13a-15(b) under the Exchange Act. Based upon that evaluation, our chief executive officer and chief financial officer concluded that, have concluded that during the period covered by this report, our disclosure controls and procedures were effective.
We do not expect that our disclosure controls and procedures will prevent all errors and all instances of fraud. Disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Further, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and the benefits must be considered relative to their costs. Because of the inherent limitations in all disclosure controls and procedures, no evaluation of disclosure controls and procedures can provide absolute assurance that we have detected all our control deficiencies and instances of fraud, if any. The design of disclosure controls and procedures also is based partly on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.
This quarterly report on Form 10-Q (the “Quarterly Report”) does not include an attestation report of internal controls from our independent registered public accounting firm due to our status as an emerging growth company under the JOBS Act.
Changes in Internal Control Over Financial Reporting
During the period covered by this Quarterly Report on Form 10-Q, there has been no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter covered by this report that has materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
We are not a party to any material legal proceedings and no material legal proceedings have been threatened by us or, to the best of our knowledge, against us.
ITEM 1A. RISK FACTORS.
As a smaller reporting company, we are not required to include risk factors in this Report. However, factors that could cause our actual results to differ materially from those in this Quarterly Report are any of the risks described in our Prospectus. Any of these factors could result in a significant or material adverse effect on our results of operations or financial condition. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations. As of the date of this Quarterly Report, there have been no material changes to the risk factors disclosed in our Prospectus.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS FROM REGISTERED SECURITIES.
Unregistered Sales of Equity Securities
On May 29, 2025, substantially concurrently with the closing of the initial public offering (the “IPO”) of the Company, the Company completed the private sale of 230,000 units (the “Private Units”) to ST Sponsor Investment LLC (the “Sponsor HoldCo”), a Cayman Islands limited liability company which has one member, ST Sponsor Limited, a Cayman Islands exempted company and the Company’s sponsor (the “Sponsor”). Each Private Unit consists of one Class A Ordinary Share and one right. The Private Units were sold at a purchase price of $10.00 per Private Units, generating gross proceeds to the Company of $2,300,000. The Private Units are identical to the Units sold in the IPO, subject to limited exceptions as described in the final prospectus of the Company relating to the IPO (SEC File No. 333-283689), dated May 27, 2025 and filed with the SEC on May 28, 2025.
The above sales were issued pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act. No commissions were paid in connection with such sales.
Use of Proceeds
On May 29, 2025, we consummated the IPO of 7,475,000 Public Units, at a price of $10.00 per Unit, generating gross proceeds of $74,750,000. Simultaneously with the closing of the IPO, we consummated the sale of 230,000 Private Placement Units, to our sponsor in Private Placement, generating gross proceeds of $2,300,000.
The net proceeds of $75,123,750 from the IPO and the Private Placement were placed in the Trust Account established for the benefit of the Company’s public shareholders and the underwriters of the IPO with Continental Stock Transfer & Trust Company acting as trustee.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 4. MINE SAFETY DISCLOSURES.
Not applicable.
ITEM 5. OTHER INFORMATION.
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ITEM 6. EXHIBITS
The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q.
| * | Filed herewith |
| ** | Furnished. |
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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.
| ChampionsGate Acquisition Corporation | ||
| Date: July 7, 2025 | By: | /s/ Bala Padmakumar |
| Bala Padmakumar | ||
|
Chief Executive Officer (Principal Executive Officer) | ||
| Date: July 7, 2025 | By: | /s/ Evan M.Graj |
| Evan M. Graj | ||
|
Chief Financial Officer (Principal Financial Officer) | ||
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