Financial Position - As of September 30, 2025, total assets amounted to $244,722, with total current liabilities of $288,850, resulting in a shareholder's deficit of $44,128[11]. - As of September 30, 2025, the Company reported a working capital deficit of $288,850 and $0 in cash[39]. - The Company has no amounts outstanding under any Working Capital Loan as of September 30, 2025[40]. - The Company has no off-balance sheet financing arrangements or long-term debt obligations, only incurring $10,000 per month for office space and administrative support[103]. - As of September 30, 2025, the Company had $0 in cash and a working capital deficit of $288,850[98]. Initial Public Offering (IPO) - The company completed its Initial Public Offering on October 24, 2025, raising gross proceeds of $60,000,000 from the issuance of 6,000,000 units at $10.00 per unit[27]. - Following the IPO, an additional $9,000,000 was generated from the over-allotment option, bringing total gross proceeds to $69,000,000[29]. - The total transaction costs related to the IPO amounted to $1,708,648, including a cash underwriting fee of $600,000[28]. - The underwriters exercised their over-allotment option in full, allowing for an additional purchase of 900,000 Units at the Initial Public Offering price[71]. - On October 24, 2025, the Company completed its Initial Public Offering (IPO) of 6,000,000 Units at $10.00 per Unit, generating gross proceeds of $60,000,000[86]. - The underwriters fully exercised their over-allotment option, purchasing an additional 900,000 Units, bringing total gross proceeds to $69,000,000[95]. Business Operations - The company has not yet commenced any operations and will not generate operating revenues until after completing its initial business combination[26]. - The Company has not generated any revenues to date and does not expect to do so until after completing its initial business combination[93]. - The Company intends to use funds outside the Trust Account for evaluating acquisition candidates and conducting due diligence[97]. - The Company intends to focus on industries that complement its management team's background for potential business combinations[25]. Shareholder Information - Shareholders will have the option to redeem their public shares for a pro rata portion of the trust account, initially valued at $10.00 per share[32]. - The public shares are subject to redemption, with 6,900,000 shares valued at $60,000,000 as of October 24, 2025, and increased to $69,000,000 after the over-allotment option[53]. - The Company has a Combination Period of 18 months from the Initial Public Offering closing, with possible one-month extensions, and must complete a Business Combination within this timeframe[35]. Financial Instruments and Reporting - The fair value of the Company's financial instruments approximates their carrying amounts due to their short-term nature[56]. - The Company has not recognized any unrecognized tax benefits as of September 30, 2025, and is not subject to income taxes in the Cayman Islands or the United States[49][50]. - The Company adopted ASU 2023-07 and ASU 2023-09, which enhance segment reporting and income tax disclosures, respectively, with no impact on financial position or cash flows[59][60]. - The company is classified as an "emerging growth company" and has opted not to comply with certain reporting requirements applicable to other public companies[41][43]. - The company is classified as a smaller reporting company and is not required to disclose risk factors in its quarterly report[113]. Management and Governance - The Company has granted a right of first refusal to D. Boral Capital LLC and ARC Group Securities LLC for future public and private equity and debt offerings for a period of 12 months post-business combination[74]. - The Company has committed to pay the Sponsor $10,000 per month for administrative services for up to 18 months, starting from October 23, 2025[68]. - The Company issued 1,725,000 insider shares to the Sponsor for a total cash consideration of $25,000, with the Sponsor retaining a 20% ownership post-IPO[63]. - The insider shares are subject to certain transfer restrictions and anti-dilution adjustments to maintain proportionate ownership post-business combination[65][66]. - The Company has not entered any litigation or legal proceedings against it or its officers as of the reporting date[112]. Internal Controls - There were no changes in internal control over financial reporting that materially affected the company's financial reporting during the last fiscal quarter[110]. - The company has established effective disclosure controls and procedures, ensuring timely and accurate reporting as required by SEC rules[109]. - The company’s management has evaluated the effectiveness of its disclosure controls and concluded they provide reasonable assurance of compliance[109].

Financial Performance - Total assets increased to $22.71 billion as of September 30, 2025, up from $16.49 billion at December 31, 2024, representing a 37.5% growth[16] - Net loan and lease receivables rose to $14.40 billion, compared to $9.55 billion in the previous year, marking a 50.5% increase[15] - Total deposits reached $19.45 billion, an increase of 39.5% from $13.94 billion at the end of 2024[16] - Net income for the quarter was $55.16 million, compared to $39.94 million in the same quarter last year, representing a 38.1% increase[20] - Basic earnings per share for Class A common stock increased to $0.25, up from $0.19 year-over-year, a growth of 31.6%[20] - Total comprehensive income for the nine months ended September 30, 2025, was $192,394,000, compared to $158,422,000 for the same period in 2024, reflecting a 21% increase[21] Income and Expenses - Net interest income after provision for credit losses was $98.65 million for the quarter, down from $124.23 million year-over-year, a decrease of 20.6%[18] - Noninterest income surged to $109.78 million for the quarter, compared to $16.90 million in the same quarter last year, reflecting a significant increase[18] - Total noninterest expense increased to $163.33 million for the quarter, compared to $85.65 million in the previous year, reflecting higher operational costs[20] Credit Losses and Provisions - The provision for credit losses on loans and leases was $46.06 million, up from $6.73 million in the prior year, indicating increased risk management measures[18] - The provision for credit losses on loans and leases for the nine months ended September 30, 2025, was $42,663,000, significantly higher than $2,684,000 in 2024[26] - The allowance for credit losses on loans and leases was $168.96 million as of September 30, 2025, compared to $88.56 million at the end of 2024, indicating a significant increase in provisions for potential credit losses[129] Merger and Acquisition - Mechanics Bancorp completed the merger with HomeStreet Bank on September 2, 2025, with legacy Mechanics Bank shareholders owning approximately 91.7% of the combined company on an economic basis[42] - The merger is classified as a reverse acquisition, with Mechanics Bank as the accounting acquirer, and the identifiable assets and liabilities were remeasured at fair value as of the acquisition date[43] - The preliminary purchase price for the acquisition of HomeStreet was $265.8 million, resulting in a preliminary bargain purchase gain of $90.4 million due to HomeStreet's financial distress and significant discount to its tangible book value[88] - HomeStreet reported after-tax losses of $27.5 million in 2023, $144.3 million in 2024, and $8.9 million in the first two quarters of 2025, contributing to its financial distress[88] Loan Portfolio and Quality - The total loan portfolio amounted to $709,239 million as of September 30, 2025, with a year-to-date gross charge-off of $1,221 million[160] - The total past due loans as of September 30, 2025, amounted to $94.199 million, with total loans not past due at $14.474 billion, indicating a past due ratio of approximately 0.65%[139] - The percentage of modified loans in financial distress for commercial and industrial loans was 2.92% as of September 30, 2025, reflecting the company's efforts to assist borrowers[140] - The total amortized cost of loans modified during the quarter ended September 30, 2025, was $11.966 million, with a significant portion attributed to payment delays and term extensions[141] Securities and Investments - The total fair value of available-for-sale securities was $3.49 billion as of September 30, 2025, with a significant portion in mortgage-backed securities[126] - The company executed an investment portfolio restructuring in the first quarter of 2024, selling $1.8 billion of lower yielding AFS securities and realizing a loss of $207.2 million[1] - The company held $1,186,260 thousand in total securities held-to-maturity, down by $177,879 thousand compared to December 31, 2024[1] Regulatory and Compliance - The company’s financial statements are prepared in accordance with U.S. GAAP, ensuring compliance with industry practices[32] - The company will adopt ASU 2023-09, effective after December 15, 2024, which expands income tax disclosures but will not impact financial position[79] - The company is assessing the impact of ASU 2024-03, effective after December 15, 2026, which requires disaggregation of income statement expenses[80] Tax and Community Investments - Tax credits and other tax benefits recognized for Q3 2025 were $1,012,000, compared to $869,000 in Q3 2024, representing a 16.4% increase[171] - The balance of CRA investments increased to $77.9 million as of September 30, 2025, up from $55.9 million at December 31, 2024, reflecting a 39.5% growth[171] - The Company recognized dividend income on CRA investments of $2.3 million for Q3 2025, compared to $1.6 million in Q3 2024, marking a 43.8% increase[171]

Investment Portfolio Overview - As of September 30, 2025, the total investment portfolio had an aggregate fair value of $859.1 million, consisting of investments in 55 companies across 22 states and 16 different industries[31]. - The five largest investments at fair value totaled $196.5 million, representing 22.9% of the total investment portfolio[31]. - The investment portfolio comprised approximately 90.9% in debt investments and 9.1% in equity investments at cost[24]. - Secured first lien debt investments accounted for $646.1 million, or 73.7% of the total cost of debt investments as of September 30, 2025[32]. - The total cost of debt investments was $796.6 million, representing 90.9% of the total investments[32]. - Preferred equity investments were valued at $37.4 million, or 4.3% of total investments as of September 30, 2025[32]. - Common equity/equivalents were valued at $42.6 million, or 4.8% of total investments as of September 30, 2025[32]. - As of September 30, 2025, total investments at fair value reached $859,124 million, an increase from $796,260 million in 2024, representing a growth of 7.9%[34]. - The healthcare, education, and childcare sector accounted for 31.8% of total investments in 2025, up from 12.8% in 2024, indicating a significant strategic shift[34]. - The diversified/conglomerate manufacturing sector saw an increase in fair value from $160,264 million in 2024 to $202,466 million in 2025, representing a growth of 26.4%[34]. Investment Strategy and Focus - The investment strategy focuses on lower middle market companies with annual EBITDA between $3 million and $25 million[23]. - The company has invested in approximately 292 different companies since its initial public offering in 2001[28]. - Experienced management teams are a critical criterion for investment, with a focus on aligning management incentives with investor interests[39]. - The investment committee, comprising seasoned professionals with over 30 years of experience, plays a crucial role in the investment approval process[42]. - The company conducts extensive due diligence, including financial analysis and management assessments, to evaluate potential investments[37]. - The investment structure typically includes secured first lien debt and preferred equity, aimed at maximizing returns while managing risks[40]. Financial Management and Fees - The base management fee is set at an annual rate of 1.75%, based on the average total assets, with a potential reduction to 0.5% for syndicated loan participations[61]. - The income-based incentive fee is applicable if quarterly net investment income exceeds 1.75% of net assets, with a tiered structure for additional income[63]. - The capital gains-based incentive fee is 20% of net realized capital gains, with no fees recorded since inception through September 30, 2025, due to cumulative unrealized capital depreciation[65]. - The Adviser provides significant managerial assistance to portfolio companies, with fees credited against the base management fee[62]. - The company’s Board of Directors approved the renewal of the Advisory Agreement through August 31, 2026, considering the quality of services and investment performance[58]. Compliance and Regulatory Requirements - The company must distribute at least 90.0% of its taxable ordinary income and realized net short-term capital gains to qualify as a RIC[73]. - At least 90.0% of the company's gross income must come from specific sources to maintain its BDC status[77]. - The company must ensure that no more than 25% of its total assets are invested in the securities of one issuer[77]. - The company is required to maintain an asset coverage of at least 150% for its senior securities representing indebtedness[91]. - The company is subject to asset coverage ratio requirements under the 1940 Act, which could restrict distributions necessary to maintain RIC status[167]. Risks and Challenges - The company faces risks related to market conditions, including volatility in capital markets and potential impacts on valuations of investments[95]. - The company may experience fluctuations in results due to inflation affecting its portfolio companies[106]. - The company has significant potential conflicts of interest, which could impact investment returns[95]. - The company may face challenges in raising capital due to market volatility and credit conditions[103]. - The company is exposed to risks from investments in foreign portfolio companies, including political instability and currency fluctuations[141][142]. - The company operates in a highly competitive market for investment opportunities, facing pressure from larger entities with greater financial resources[116]. Debt and Leverage - As of September 30, 2025, the company incurred leverage through various debt instruments totaling $428.1 million at cost, with an effective annual cash interest rate of 5.6%[165]. - The company has a Credit Facility with maximum borrowings of $320.0 million, with no outstanding borrowings as of September 30, 2025[153]. - The Credit Facility requires the company to maintain a minimum net worth of $581.0 million as of September 30, 2025, and asset coverage of at least 150%[154]. - The company may issue equity to repay amounts outstanding under the Credit Facility, which could lead to substantial dilution for existing stockholders[157]. - The company has incurred leverage to generate capital for additional investments, which may be at risk if asset values decline[179]. Valuation and Performance Monitoring - The Valuation Team assesses fair value of investments quarterly, with oversight from the Board of Directors[54]. - The company’s net asset value (NAV) could be materially affected by fair value determinations of investments[57]. - The fair value of privately held securities may not be readily determinable, leading to fluctuations in reported values over time[121]. - The lack of liquidity in privately held investments may hinder the company's ability to quickly obtain cash equal to the recorded value of its investments[125]. - The company maintains ongoing monitoring of portfolio companies to ensure performance aligns with expectations and to identify best practices[50]. Distributions and Tax Implications - Distributions to U.S. stockholders attributable to Investment Company Taxable Income are generally taxable as ordinary income[79]. - The company intends to allocate capital gain distributions proportionately between common and preferred shares based on total distributions paid[80]. - The company intends to distribute at least 90.0% of its Investment Company Taxable Income to stockholders through monthly distributions[203]. - Distributions may include a return of capital, which could affect stockholders' tax liabilities and reduce the company's asset base[205][206]. - The company may not declare dividends or repurchase shares until asset coverage tests under the 1940 Act are satisfied[176].

Production and Sales Performance - Q3-2025 net production volumes reached 1,566 barrels of oil per day, a 5% increase from Q2-2025, with total equivalent production at 2,398 Boe/d[2] - Total product revenue for Q3-2025 was $9.4 million, down 14% from $10.9 million in Q3-2024, primarily due to lower realized prices for oil and NGLs[11] - Oil sales revenue increased to $8,790 million for the three months ended September 30, 2025, compared to $8,005 million in the previous quarter, reflecting a 9.8% increase[22] - Average daily equivalent sales for the three months ended September 30, 2025, were 2,398 Boe/d, up from 2,357 Boe/d in the previous quarter[24] - Average price per barrel of oil was $61.00 for the three months ended September 30, 2025, compared to $58.92 in the previous quarter, representing a 3.7% increase[24] Financial Performance - The company reported a net loss of $3.8 million in Q3-2025, or ($0.11) per diluted share, compared to a net loss of $3.6 million in Q3-2024[15] - Adjusted EBITDA for Q3-2025 was $0.1 million, a significant improvement from an adjusted EBITDA of ($0.1) million in Q3-2024[15] - Total revenue for the three months ended September 30, 2025, was $9,388 million, a decrease of 7.5% compared to $10,892 million for the same period in 2024[22] - Net loss for the three months ended September 30, 2025, was $3,844 million, an improvement from a net loss of $5,056 million in the same quarter of 2024[22] - Adjusted net loss for the three months ended September 30, 2025, was $3,934,000, compared to $5,231,000 for the previous quarter, reflecting a decrease of 24.8%[32] - EBITDA for the three months ended September 30, 2025, was $(11,000), a significant improvement from $(1,492,000) in the previous quarter[35] - Adjusted EBITDA for the nine months ended September 30, 2025, was $940,000, compared to $(1,597,000) for the same period in 2024, indicating a turnaround in performance[35] Operational Developments - Empire successfully completed a Rights Offering in Q3-2025, generating approximately $2.5 million in gross proceeds, with over 100% subscription of available securities[2] - The company is advancing its enhanced oil recovery efforts in North Dakota, with system upgrades expected to improve reliability and reduce long-term operating costs[4] - Empire plans to initiate its first drilling campaign in Texas in 2026, aligning capital development with market conditions[2] - The company is building operational flexibility by progressing a series of drilled-but-uncompleted wells, positioning for higher-value gas development in 2026[3] Cost Management - Lease operating expenses decreased to $5.7 million in Q3-2025 from $6.7 million in Q3-2024, primarily due to lower workover costs[12] - Lease operating expenses per Boe decreased to $25.99 for the three months ended September 30, 2025, from $29.78 in the previous quarter, indicating a 12.5% reduction[24] Cash and Assets - As of September 30, 2025, Empire had approximately $4.6 million in cash and $3.3 million available on its credit facility[17] - Total current assets increased to $14,686 million as of September 30, 2025, compared to $12,351 million at the end of December 2024[26] - Total liabilities rose to $69,329 million as of September 30, 2025, compared to $61,103 million at the end of December 2024, reflecting a 13.7% increase[26] - Total stockholders' equity decreased to $53,663 million as of September 30, 2025, down from $62,765 million at the end of December 2024[26] - The company reported a net cash increase of $2,308,000 for the three months ended September 30, 2025, compared to an increase of $1,212,000 in the previous quarter[29] - Total cash at the end of the period was $4,601,000, up from $2,293,000 at the beginning of the period[29] Shareholder Information - The company reported a weighted-average number of common shares outstanding of 34,043,173 for the three months ended September 30, 2025[22] - The diluted weighted-average number of common shares outstanding increased to 34,043,173 for the three months ended September 30, 2025, from 33,853,310 in the previous quarter[32] - Stock-based compensation for the three months ended September 30, 2025, was $238,000, down from $486,000 in the previous quarter[35]

Financial Performance - Net sales for the three months ended September 30, 2025, were $14,460,511, a decrease of 16.4% compared to $17,364,939 for the same period in 2024[20] - Gross profit for the quarter was $3,455,932, down from $3,986,570 in the prior year, reflecting a gross margin of approximately 23.9%[20] - The company reported a net income of $1,087,797 for the quarter, compared to a net loss of $1,842,225 in the same quarter of 2024[20] - For the three months ended September 30, 2025, consolidated revenues were $14,460,511, a decrease of 16.4% from $17,364,939 in the same period of 2024[99] - The company achieved a net income of $1,087,797 for the three months ended September 30, 2025, compared to a net loss of $1,842,225 in the same period of 2024[99] - The effective tax rate for the three months ended September 30, 2025, was approximately 0.0%, compared to 2.1% for the same period in 2024[84] - Net income for Q3 2025 was $1,087,797, an increase of $2,930,022 or 159% compared to a net loss of $(1,842,225) in Q3 2024[180] Operating Expenses - Operating expenses decreased significantly to $2,268,333 from $5,751,594, primarily due to lower selling and administrative expenses[20] - Selling expenses decreased by $870,322 or 45.2% to $1,054,106, representing 7.3% of net sales in Q3 2025 compared to 11.1% in Q3 2024[173] - General and administrative expenses were $1,214,227, a decrease of $2,612,677 or 68.3% from $3,826,904 in Q3 2024, primarily due to lower expenses at Gufeng[175] Cash Flow and Liquidity - Cash and cash equivalents increased to $53,253,117 as of September 30, 2025, from $52,519,418 at the end of the previous quarter[23] - Cash used in operating activities was $1,318,192, an improvement from $2,553,911 in the same period last year[23] - Net cash used in operating activities was $1,318,192 for the three months ended September 30, 2025, a decrease of $1,235,719, or 48.4%, from $2,553,911 in the same period in 2024[191] - Net cash used in investing activities was $12,952 for the three months ended September 30, 2025, compared to $8,544,101 in the same period in 2024[192] Assets and Liabilities - Total liabilities decreased to $68,814,150 from $73,577,378, indicating improved financial stability[18] - Stockholders' equity increased to $88,215,675 as of September 30, 2025, up from $84,119,670 at the end of June 2025[18] - Total identifiable assets as of September 30, 2025, were $157,029,825, a slight decrease from $157,697,048 as of June 30, 2025[101] - Total loans payable as of September 30, 2025, amounted to $12,175,073, a slight decrease from $12,610,561 as of June 30, 2025[194] Inventory and Receivables - Accounts receivable as of September 30, 2025, totaled $20,678,903, net of an allowance for doubtful accounts of $30,744,907[43] - Inventories increased by $903,670, or 2.4%, to $37,878,957 as of September 30, 2025, from $36,975,287 as of June 30, 2025[197] - Customer deposits decreased to $3,441,483 as of September 30, 2025, down from $4,526,024 as of June 30, 2025[200] Business Operations - Enlightify Inc. continues to focus on the development and distribution of various types of fertilizers, indicating ongoing commitment to its core business[24] - The fertilizer business generated approximately 83.1% of total revenues for the three months ended September 30, 2025, down from 85.6% in the same period of 2024[128] - Jinong segment reported revenues of $6,796,657, down from $7,421,659, while Gufeng segment revenues decreased from $7,439,542 to $5,213,257[99] - Jinong sold approximately 8,962 metric tons of fertilizer, a decrease of 26.9% from 12,262 metric tons in the same period of 2024[130] - Gufeng sold approximately 10,505 metric tons of fertilizer, down 29.7% from 14,940 metric tons in the same period of 2024[130] - The company has a total of 114 different fertilizer products developed and produced, with 76 by Jinong and 38 by Gufeng as of September 30, 2025[129] Market and Regulatory Environment - The Company was notified by NYSE of its determination to commence proceedings to delist its common stock, which raises substantial doubt about its ability to continue as a going concern[51] - The company is facing delisting from the NYSE due to falling below the market capitalization requirement of $15,000,000[116] - Following the delisting, the company's common stock is expected to be quoted on the OTC Markets Group Inc. under the symbol "ENFY"[118] - The company has raised substantial doubt about its ability to continue as a going concern due to the delisting and its financial condition[126] Foreign Exchange and Risk Management - The accumulated other comprehensive loss was $25 million due to foreign exchange risk exposure[213] - The RMB appreciated by a cumulative 0.7% against the U.S. dollar between July 1, 2025, and September 30, 2025[213] - The company has not entered any hedging transactions to mitigate foreign exchange or interest rate risks[213][215] - Credit risk has increased since 2020, with overdue accounts receivable rising significantly due to the COVID-19 pandemic[216] - Accounts receivables are mainly derived from customers in the PRC, primarily individuals and SMEs, which may have weak cash flows[216]

VIE Structure and Corporate Governance - The company operates primarily through a Variable Interest Entity (VIE) structure, which allows it to consolidate financial results under U.S. GAAP despite not holding direct equity interests in the VIE or its subsidiaries[32]. - The company entered into new VIE Agreements on April 3, 2025, with Fujian Hualiu Culture & Sports Industry Development Co., Ltd. to regain control over the VIE[38]. - Under the Exclusive Services Agreement, the New WFOE is entitled to collect a service fee equal to 100% of the net income of the VIE, which is defined as the VIE's earnings before tax after deducting relevant costs and reasonable expenses[41]. - The Exclusive Option Agreement allows the New WFOE to purchase shares in the VIE at a price of RMB10 or the minimum amount permitted under PRC laws, whichever is lower[45]. - The company faces risks associated with its corporate structure, including uncertainties regarding the validity and enforcement of the VIE Agreements under PRC laws[52]. - The VIE Agreements may not provide the same level of operational control as direct ownership, posing risks if the VIE or its shareholders fail to perform their obligations[53]. - The corporate structure involves unique risks to investors, as the securities represent the offshore holding company rather than the VIE or its subsidiaries[32]. - The VIE Agreements may not comply with PRC regulatory restrictions on foreign investment, leading to potential penalties or loss of interests in operations[88]. - If the corporate structure and VIE Agreements are deemed illegal, the company may be unable to consolidate financial results of Xiamen Pop Culture under U.S. GAAP[89]. - The effectiveness of the VIE Agreements in providing control over Xiamen Pop Culture is uncertain, as reliance is placed on the performance of Xiamen Pop Culture and its shareholders[94]. - The VIE Agreements are governed by PRC laws, which may complicate enforcement and limit the ability to exert control over Xiamen Pop Culture[95]. - Changes in the definition of a VIE or the primary beneficiary status could impact the consolidation of financial results[96]. - Conflicts of interest may arise between Xiamen Pop Culture shareholders and the company, affecting control and economic benefits[99]. - The company relies on licenses held by Xiamen Pop Culture, and any deterioration in this relationship could adversely affect operations[101]. - The Foreign Investment Law and its implementation regulations create uncertainties regarding the status of businesses controlled through contractual arrangements[105]. - The CEO, Mr. Zhuoqin Huang, controls approximately 93.68% of the voting rights in the company through 10,576,308 Class B Ordinary Shares[107]. - The company may face substantial uncertainties regarding compliance with the Foreign Investment Law, which could materially affect its operations and financial condition[107]. Regulatory Environment and Compliance - The company is subject to potential regulatory changes in China that could impact the VIE structure and its operations[52]. - The company is not currently subject to cybersecurity review by the Cyberspace Administration of China (CAC) as it does not possess personal information of over one million users[54]. - The company has obtained all requisite licenses and approvals needed to engage in its current business operations in the PRC, including business licenses and Internet Content Provider Licenses[57]. - The company is classified as an Existing Issuer under the CSRC Notice and is not required to complete immediate filing procedures for its initial public offering[61]. - The revised Provisions on Strengthening Confidentiality and Archives Administration require domestic companies to obtain approval for disclosing documents containing state secrets before overseas offerings[62]. - The company has not received any inquiries, notices, or sanctions from PRC regulatory authorities regarding its operations or securities offerings[58]. - The company is not required to obtain additional permissions from PRC authorities to maintain its listing status on U.S. exchanges based on current laws[58]. - The company has not been impacted by recent anti-monopoly regulations as it does not engage in monopolistic behaviors[56]. - The company anticipates that it will not collect personal information of over one million users in the foreseeable future, thus avoiding the need for cybersecurity review[54]. - The company has not received permission from Chinese authorities to list on U.S. exchanges, and future requirements for such permission remain uncertain[124]. - The Chinese government may increase oversight of overseas public offerings, potentially hindering the company's ability to offer securities to investors[126]. - The legal environment in China presents uncertainties that could limit the legal protections available to the company and its investors[112]. - The company may incur increased costs to comply with existing and new regulations, which could adversely impact its financial condition[122]. - The recognition and enforcement of foreign judgments in China are uncertain, which could complicate legal proceedings involving the company[118]. - The company is required to complete filing procedures for future offerings or fundraising activities as per the Trial Measures[128]. - The Cybersecurity Review Measures require online platform operators with personal information of at least one million users to apply for a cybersecurity review before foreign listings[132]. - The PRC operating entities are required to maintain various approvals, licenses, and permits to operate, and failure to do so could materially affect their business operations[148]. - The evolving regulatory environment in China may lead to increased scrutiny and potential penalties for non-compliance with labor-related laws[147]. Financial Performance and Management - For the fiscal year ended June 30, 2025, total revenue reached $107.63 million, a significant increase from $47.38 million in 2024, representing a growth of approximately 126%[78]. - The gross profit for the fiscal year ended June 30, 2025, was $4.32 million, compared to $2.88 million in 2024, indicating a gross profit margin improvement[78]. - Net income for the fiscal year ended June 30, 2025, was a loss of $6.89 million, an improvement from a loss of $12.63 million in 2024[78]. - Total assets as of June 30, 2025, amounted to $114.88 million, up from $42.23 million in 2024, reflecting a growth of approximately 172%[82]. - Cash and cash equivalents as of June 30, 2025, were $2.93 million, a decrease from $230,563 in 2024[82]. - The company reported net cash used in operating activities of $1.74 million for the fiscal year ended June 30, 2025, compared to $5.16 million in 2024, indicating improved cash flow management[84]. - The total liabilities as of June 30, 2025, were $93.27 million, compared to $26.91 million in 2024, showing an increase of approximately 247%[82]. - The Company has not made any dividends or distributions to shareholders and does not anticipate paying cash dividends in the foreseeable future[69]. - The Company intends to retain future earnings to finance business expansion, with no plans for immediate distributions[69]. - Cash management policies require cash requests to be approved by designated management members before allocation[67]. - The PRC government imposes controls on the convertibility of Renminbi into foreign currencies, which may affect the Company's ability to pay dividends[73]. - Under PRC laws, companies can only pay dividends from retained earnings and must set aside at least 10% of after-tax profits for statutory reserves until it reaches 50% of registered capital[72]. - The PCAOB currently has access to inspect the Company's auditor, which is crucial for compliance with the Holding Foreign Companies Accountable Act[65]. - The company does not intend to pay dividends for the foreseeable future, opting to retain earnings for business operations and expansion[217]. Market and Operational Risks - The PRC operating entities' business is significantly influenced by China's political, economic, and social conditions, which could adversely affect their financial performance[109]. - Changes in government policies, including taxation and foreign investment regulations, could lead to increased operational costs and affect the company's competitive position[110]. - The Chinese government has substantial control over the economy, and any new regulations could require the company to make material changes to its operations[120]. - Labor costs in China are expected to continue increasing, which may adversely affect the company's profitability unless these costs can be passed on to customers[144]. - The company is subject to stricter regulatory requirements regarding labor contracts and employee benefits, which may limit operational flexibility[145]. - The PRC operating entities may face significant risks if they are unable to retain existing clients for their Live and Digital Entertainment businesses, which could materially affect results of operations[184]. - The PRC operating entities face significant risks related to live entertainment events, including potential terrorist attacks, weather-related interruptions, and public safety issues, which could adversely affect profitability and event success[191]. - The PRC operating entities' business depends on maintaining strong relationships with local authorities and third-party service providers, which are critical for event execution and success[195]. - Negative publicity, including allegations of misconduct or security breaches, could harm the recognition of the PRC operating entities' brands and adversely affect their business[199]. - The PRC operating entities operate in a highly competitive market, facing challenges from large companies like Alibaba, Tencent, and Baidu, which are investing in similar entertainment sectors[205]. - Expansion into new cities or markets poses significant legal and regulatory challenges, which could negatively impact the PRC operating entities' growth and profitability[207]. - The PRC operating entities may struggle to find suitable strategic partnerships or acquisition opportunities that align with their long-term goals, potentially limiting their service offerings[208]. - The PRC operating entities' ability to attract new sponsors and clients is influenced by their brand recognition and marketing effectiveness, which are critical for revenue growth[198]. - The PRC operating entities rely on third-party advertising services, and any failure to comply with advertising laws could result in penalties and harm their reputation[203]. - The PRC operating entities' intellectual property rights are vital for their success, and any failure to protect these rights could have a material adverse effect on their business[201]. - The PRC operating entities' operations are significantly affected by general economic conditions, which could reduce discretionary income and impact revenue[212]. - The demand for the PRC operating entities' content may decline due to unauthorized distribution, potentially leading to a material adverse effect on revenue[213]. - The current insurance policies may not provide adequate coverage against all claims, which could result in uninsured losses affecting financial conditions[214]. - The PRC operating entities have not received any regulatory warnings regarding their content, but future content may still be deemed objectionable by PRC authorities[215]. - The loss of key personnel could disrupt business operations and adversely affect future growth, given the high demand for qualified individuals in the Chinese Pop Culture ecosystem[211]. - The market price of Class A Ordinary Shares may be volatile and could fluctuate widely due to factors beyond the company's control[219]. - The company may face significant additional expenses if it ceases to qualify as a foreign private issuer, impacting results of operations[222]. - The board of directors may decline to register transfers of Class A Ordinary Shares under certain circumstances, potentially affecting liquidity[228]. Customer and Revenue Concentration - For the fiscal year ended June 30, 2025, revenue from the Live Entertainment business accounted for 9.3% of total revenue, while revenue from the Digital Entertainment business accounted for 88.6%[183]. - Three major customers accounted for approximately 21%, 20%, and 12% of the operating entities' total revenue for the fiscal year ended June 30, 2025[185]. - As of June 30, 2025, the top five customers accounted for approximately 70% of the accounts receivable balance[185].

IPO and Fundraising - The company completed its IPO on May 29, 2025, raising total gross proceeds of $74,750,000 from the sale of 7,475,000 units at an offering price of $10.00 per unit[100]. - The company incurred $3,259,220 in transaction costs related to the IPO, including $745,500 in underwriting fees and $1,495,000 in deferred underwriting fees[110]. - Underwriting fees included a cash discount of $0.10 per unit, totaling $747,500, and a deferred fee of $0.20 per unit, totaling $1,495,000, payable upon business combination[129]. Financial Performance - For the three months ended September 30, 2025, the company reported a net income of $682,288, primarily from interest and dividend income of $795,474, offset by formation and operating costs of $113,186[107]. - For the nine months ended September 30, 2025, the company had a net income of $494,905, with interest and dividend income of $1,043,808, and total formation and operating costs of $548,903[108]. - As of September 30, 2025, the company had $76,167,558 held in the Trust Account, which is invested in U.S. Treasury securities[119]. Operational Status - The company has not yet engaged in any operations or generated revenue, relying on the sale of securities and loans from the sponsor to fund operations[102]. - The company plans to use funds held in the trust account to complete its initial business combination and may withdraw interest to pay taxes[120]. - The company issued a promissory note to the Sponsor HoldCo for up to $500,000 to be used for working capital, which is due upon the completion of the initial business combination or liquidation[123]. Working Capital and Expenses - As of September 30, 2025, the company had a working capital deficit of $23,287 and $17,351 in cash[112]. - As of September 30, 2025, the Company had $93,434 in borrowings under working capital loans[125]. - On July 7, 2025, the Company repaid $350,000 of a promissory note and transferred a remaining balance of $76,975 to working capital loans[125]. - The Company does not expect to need additional funds for operating expenditures but may require financing for business combination completion or share redemptions[126]. Regulatory and Compliance - As of September 30, 2025, the Company had no off-balance sheet arrangements or contractual obligations[127]. - Management believes that recent accounting standards will not materially affect the unaudited financial statements[131]. - The Company is classified as a smaller reporting company and is not required to provide certain market risk disclosures[132]. Future Expectations - The company expects to incur increased expenses as a result of being a public company, including legal and financial reporting costs[106].

IPO and Fundraising - The company completed its IPO on May 29, 2025, raising total gross proceeds of $74,750,000 from the sale of 7,475,000 units at an offering price of $10.00 per unit[100]. - The company incurred $3,259,220 in transaction costs related to the IPO, including $745,500 in underwriting fees and $1,495,000 in deferred underwriting fees[110]. - Underwriters received a cash underwriting discount of $0.10 per Unit, totaling $747,500 at IPO closing, with a deferred fee of $1,495,000 upon business combination[129]. Financial Performance - For the three months ended September 30, 2025, the company reported a net income of $682,288, primarily from interest and dividend income of $795,474, offset by formation and operating costs of $113,186[107]. - For the nine months ended September 30, 2025, the company had a net income of $494,905, with interest and dividend income of $1,043,808, and total formation and operating costs of $548,903[108]. - As of September 30, 2025, the company had $76,167,558 held in the Trust Account, which is invested in U.S. Treasury securities[119]. Working Capital and Financing - The company had a working capital deficit of $23,287 as of September 30, 2025, with $17,351 in cash available[112]. - The company issued a promissory note to the Sponsor HoldCo for up to $500,000 to fund working capital needs prior to completing its initial business combination[123]. - As of September 30, 2025, the Company had $93,434 of borrowings under working capital loans[125]. - On July 7, 2025, the Company repaid $350,000 of a promissory note and transferred a remaining balance of $76,975 to working capital loans[125]. - The Company does not expect to need additional funds for operating expenditures but may require financing for business combination completion or share redemptions[126]. Business Combination and Future Plans - The company plans to use funds held in the trust account to complete its initial business combination and may withdraw interest to pay taxes[120]. - The company has not yet identified a specific business combination target and has not engaged in substantive discussions with any potential targets[99]. Regulatory and Compliance - The company expects to incur increased expenses as a result of being a public company, including legal and financial reporting costs[106]. - As of September 30, 2025, the Company had no off-balance sheet arrangements or contractual obligations[127]. - Management believes that no recently issued accounting standards will materially affect the unaudited financial statements[131]. - The Company is classified as a smaller reporting company and is not required to provide extensive market risk disclosures[132].

Financial Performance - Net loss for Q3 2025 was $(45.0) million, a decrease of $46.9 million compared to a net income of $1.9 million in Q3 2024[110] - Net loss for the nine months ended September 30, 2025 was $58.5 million, a decrease of $69.9 million from net income of $11.4 million for the same period in 2024[170] - Net interest income for the three months ended September 30, 2025 was $22.2 million, a decrease from $22.7 million for the same period in 2024[174] - Net interest income for the nine months ended September 30, 2025, was $66.7 million, up from $65.9 million in 2024, indicating a slight increase of 1.2%[192] - Noninterest income decreased to $6.4 million for the nine months ended September 30, 2025, down from $22.2 million in 2024, a decline of 71.1%[201] - Noninterest expense totaled $65.5 million for the nine months ended September 30, 2025, compared to $59.2 million in 2024, an increase of 10.5%[203] Asset and Loan Management - Total assets decreased by $175.4 million to $3.8 billion as of September 30, 2025, compared to December 31, 2024[110] - Total loans decreased by $414.0 million, or 15.4%, to $2.3 billion as of September 30, 2025, compared to December 31, 2024[110] - Net loans decreased by $464.9 million, or 17.5%, to $2.2 billion as of September 30, 2025, due to a strategic focus on reducing risk in the loan portfolio[116] - Total deposits decreased by $121.4 million, or 3.5%, to $3.4 billion as of September 30, 2025, compared to December 31, 2024[110] - Nonaccrual loans increased by $5.7 million to $114.3 million as of September 30, 2025, compared to $108.5 million at December 31, 2024[112] - Special mention loans increased by $86.5 million in 2025, primarily due to downgrades during the year[122] Credit Losses and Provisions - The provision for credit losses for Q3 2025 was $47.9 million, significantly higher than $4.9 million in Q3 2024[110] - The allowance for credit losses increased to $85.7 million, or 3.76% of total loans, compared to $34.8 million, or 1.29%, at December 31, 2024[110] - The provision for credit losses surged to $79.1 million for the nine months ended September 30, 2025, compared to $14.0 million in the same period of 2024, representing a significant increase of 464.3%[197] - Total charge-offs for the nine months ended September 30, 2025, were $29.4 million, compared to $13.7 million in 2024, reflecting an increase of 115.6%[197] Equity and Capital - Total shareholders' equity decreased to $221.1 million at September 30, 2025, down from $255.0 million at December 31, 2024, primarily due to a net loss of $58.5 million during the nine months ended September 30, 2025[211] - The capital conservation buffer for First Guaranty was 3.49% as of September 30, 2025, exceeding the minimum requirement of 2.50%[213] - The Tier 1 Risk-based Capital Ratio for the Bank was 11.09% as of September 30, 2025, compared to 11.00% at December 31, 2024[217] Interest Income and Expenses - Interest income decreased by $3.9 million, or 6.8%, to $53.5 million for the three months ended September 30, 2025[176] - Interest income on loans decreased by $10.5 million, or 21.1%, to $39.3 million for the three months ended September 30, 2025[178] - Interest expense decreased by $2.5 million or 2.6%, totaling $95.6 million for the nine months ended September 30, 2025, compared to $98.1 million for the same period in 2024[185] - The net interest margin decreased to 2.34% for the three months ended September 30, 2025, compared to 2.51% for the same period in 2024[190] Securities and Investments - Investment securities net of the allowance for credit losses totaled $696.7 million at September 30, 2025, an increase of $94.0 million from $602.7 million at December 31, 2024[128] - The available for sale securities portfolio increased by $93.2 million, or 33.2%, to $374.3 million at September 30, 2025, primarily due to purchases of collateralized mortgage obligations and mortgage-backed securities[130] - The average maturity of the securities portfolio is approximately 7.02 years, with an estimated effective duration of 5.28 years as of September 30, 2025[132] Employee and Operational Metrics - Full-time equivalent employees decreased to 339 as of September 30, 2025, down from 404 a year earlier[113] - The average balance of total interest-earning assets increased by $164.2 million to $3.8 billion for the three months ended September 30, 2025[174] - The average balance of loans decreased by $317.3 million to $2.5 billion for the nine months ended September 30, 2025, from $2.8 billion for the same period in 2024[182]

Financial Performance - Net loss for Q3 2025 was $(45.0) million, a decrease of $46.9 million compared to a net income of $1.9 million in Q3 2024[110] - Return on average assets for Q3 2025 was (4.61)%, compared to 0.21% in Q3 2024, and for the nine months ended September 30, 2025, it was (2.00)%, down from 0.42% in 2024[114] - Loss per common share for the nine months ended September 30, 2025 was $(4.45), a decrease of $5.23 from $0.78 for the same period in 2024[170] - Noninterest income decreased to $6.4 million for the nine months ended September 30, 2025, down from $22.2 million in 2024, a decline of 71.1%[201] - Total shareholders' equity decreased to $221.1 million at September 30, 2025, down from $255.0 million at December 31, 2024, primarily due to a net loss of $58.5 million during the nine months ended September 30, 2025[211] Asset and Loan Management - Total assets decreased by $175.4 million to $3.8 billion as of September 30, 2025, compared to December 31, 2024[110] - Total loans decreased by $414.0 million, or 15.4%, to $2.3 billion as of September 30, 2025, compared to December 31, 2024[110] - Net loans decreased by $464.9 million, or 17.5%, to $2.2 billion as of September 30, 2025, due to a strategic focus on reducing risk in the loan portfolio[116] - Nonaccrual loans increased by $5.7 million to $114.3 million as of September 30, 2025, compared to $108.5 million at December 31, 2024[112] - Special mention loans increased by $86.5 million in 2025, primarily due to downgrades during the year[122] Credit Losses and Provisions - The provision for credit losses for Q3 2025 was $47.9 million, significantly higher than $4.9 million in Q3 2024[110] - The allowance for credit losses increased to $85.7 million, or 3.76% of total loans, compared to $34.8 million, or 1.29%, at December 31, 2024[110] - The provision for credit losses was $79.1 million for the first nine months of 2025, significantly higher than $14.0 million for the same period in 2024[126] - The allowance for credit losses on loans was $85.7 million, representing 3.76% of total loans and 75.0% of nonperforming loans as of September 30, 2025[148] Deposits and Funding - Total deposits decreased by $121.4 million, or 3.5%, to $3.4 billion as of September 30, 2025, compared to December 31, 2024[110] - Noninterest-bearing demand deposits decreased by $7.2 million, or 1.8%, to $396.9 million at September 30, 2025, primarily due to seasonal activity[155] - Public funds deposits totaled $1.1 billion at September 30, 2025, up from $1.0 billion at December 31, 2024, due to seasonal fluctuations[162] - The total amount of uninsured deposits was estimated at $264.3 million at September 30, 2025, excluding collateralized public funds deposits[158] Interest Income and Expenses - Net interest income for the three months ended September 30, 2025 was $22.2 million, a decrease from $22.7 million for the same period in 2024[174] - Interest income decreased by $3.9 million, or 6.8%, to $53.5 million for the three months ended September 30, 2025, primarily due to a $464.7 million decrease in the average balance of loans[176] - Interest expense decreased by $2.5 million or 2.6%, totaling $95.6 million for the nine months ended September 30, 2025, compared to $98.1 million for the same period in 2024[185] - The net interest margin for Q3 2025 was 2.34%, a decrease of 17 basis points from 2.51% in Q3 2024[112] Securities and Investments - Investment securities net of the allowance for credit losses reached $696.7 million at September 30, 2025, an increase of $94.0 million from $602.7 million at December 31, 2024[128] - The available for sale securities portfolio totaled $374.3 million at September 30, 2025, reflecting an increase of $93.2 million, or 33.2%, from $281.1 million at December 31, 2024[130] - The average maturity of the securities portfolio is approximately 7.02 years, with an estimated effective duration of 5.28 years as of September 30, 2025[132] Capital and Ratios - The capital conservation buffer for First Guaranty was 3.49% as of September 30, 2025, exceeding the minimum requirement of 2.50%[213] - The Tier 1 Risk-based Capital Ratio for the Bank was 11.09% as of September 30, 2025, compared to 11.00% at December 31, 2024[217] - The average interest-earning assets to interest-bearing liabilities ratio was 118.42% for the nine months ended September 30, 2025, slightly down from 119.48% in 2024[192]