Trailblazer Merger I(TBMC) - 2024 Q4 - Annual Report

PART I This section details Trailblazer Merger Corporation I's business as a SPAC, its management, market strategy, and the proposed merger with Cyabra Strategy Ltd ITEM 1. BUSINESS Trailblazer Merger Corporation I, a SPAC, seeks a business combination in the technology sector, having raised $69 million in its IPO and entered a merger agreement with Cyabra Strategy Ltd Introduction This section introduces the company as a SPAC, detailing its IPO, trust account funding, and recent share redemptions - Trailblazer Merger Corporation I is a blank check company (SPAC) formed to pursue a merger or similar business combination, with an intent to focus on the technology industry[22] - The company's charter was amended on September 27, 2024, to allow monthly extensions of the business combination deadline from September 30, 2024, to September 30, 2025, with a monthly payment to the Trust Account[26] - Following a stockholder vote, 4,520,384 shares were redeemed for $49.77 million on October 9, 2024[26] Event Summary | Event | Date | Gross Proceeds | | :-------------------------------- | :--------- | :------------- | | Initial Public Offering (IPO) | March 31, 2023 | $69,000,000 | | Private Placement | March 31, 2023 | $3,945,000 | | Total deposited in Trust Account | March 31, 2023 | $70,380,000 | Management Team The management team, including CEO Arie Rabinowitz and CFO Scott Burell, possesses extensive experience in investing and M&A, particularly within the technology sector - The management team, led by CEO Arie Rabinowitz and CFO Scott Burell, along with the board of directors, possesses extensive experience in buy-side investing, M&A, and due diligence across various sectors, with a particular focus on technology[27][28][29] Market Opportunity The company targets the global technology industry, identifying key opportunities in Cloud as a Service, Supply Chain Technologies, Hybrid Workforce solutions, and eSports - The company intends to focus its business combination efforts on the global technology industry, estimated at $5 trillion in 2021, leveraging management's expertise[38] - Key market opportunities identified include Cloud as a Service businesses, Supply Chain Technologies, Servicing the Hybrid Workforce, and eSports, all driven by recent market shifts and technological demands[39][40][41][42] Business Strategy The company aims to generate stockholder value by identifying investment opportunities that benefit from capital, liquidity, and management expertise - The company's objective is to generate attractive returns and create stockholder value by identifying investment opportunities that can benefit from additional capital, liquidity, and management expertise[43] - The strategy involves leveraging the management team's network and expertise to transform existing businesses and maximize stockholder value, positioning the company as an attractive partner for potential sellers[44][45] Acquisition Criteria Key acquisition criteria include experienced management, attractive valuations, competitive advantages, and high growth potential with strong cash flow - Key acquisition criteria include strong, experienced management teams focused on revenue growth, profitability, and free cash flow[47] - Target businesses must represent an attractive valuation relative to publicly listed peers, benefit from being a public company (e.g., broader capital access), possess clear competitive advantages, and demonstrate high growth potential and strong cash flow generation[48][49][50][51] Business Combination The company entered a merger agreement with Cyabra Strategy Ltd., which will result in Cyabra becoming a Nasdaq-listed subsidiary of Holdings - On July 22, 2024, Trailblazer entered into a merger agreement with Cyabra Strategy Ltd., an Israeli company, which was amended on November 11, 2024[52] - The Business Combination involves Trailblazer merging into Trailblazer Holdings, Inc. (Holdings), and a subsidiary merging into Cyabra, making Cyabra a wholly-owned subsidiary of Holdings[53][59] - Holdings will be renamed 'Cyabra, Inc.' and is expected to list on Nasdaq[53][59] - Cyabra shareholders and option holders may receive up to 3,000,000 additional Earnout Shares based on future stock price targets[55] - Cyabra Key Employees will receive 400,000 shares of Holdings Common Stock[56] - A PIPE Investment of at least $6.0 million in Holdings Common Stock will close concurrently with the Business Combination, subject to reduction if the Trust Account balance exceeds $3.5 million after redemptions[57] - Alpha Capital Anstalt, an affiliate of the Sponsor, provided Cyabra with $3.4 million in convertible promissory notes in 2024 and an additional $1.0 million promissory note in February 2025[58] Employees The company currently has two officers and does not plan to have full-time employees before completing its initial business combination - The company currently has two officers and does not intend to have full-time employees prior to the completion of its initial business combination[60] ITEM 1A. RISK FACTORS As a smaller reporting company, Trailblazer Merger Corporation I is not required to make disclosures under this item - The company is a smaller reporting company and is not required to provide disclosures under this item[61] ITEM 1B. UNRESOLVED STAFF COMMENTS This item is not applicable to the company - This item is not applicable[62] ITEM 1C. CYBERSECURITY As a SPAC with no business operations, the company does not consider itself to face significant cybersecurity risk and lacks a formal cybersecurity risk management program - As a SPAC with no business operations, the company does not consider cybersecurity risk significant and has no formal management program[63] - The company relies on third-party digital technologies and their security processes, with the board of directors responsible for oversight of cybersecurity threats[63] - No cybersecurity incidents have been reported since the company's IPO[63] ITEM 2. PROPERTIES The company's executive offices are located in New York, NY, and the current office space is deemed adequate for its operations - The company's executive offices are located at 510 Madison Avenue, Suite 1401, New York, NY 10022[64] - The current office space is considered adequate for current operations[64] ITEM 3. LEGAL PROCEEDINGS The company is not currently a party to any material litigation or legal proceedings and is unaware of any adverse legal exposures - The company is not currently involved in any material litigation or legal proceedings[65] - There are no known legal proceedings, investigations, claims, or other legal exposures with a more than remote possibility of materially adversely affecting the business[65] ITEM 4. MINE SAFETY DISCLOSURES This item is not applicable to the company - This item is not applicable[66] PART II This section covers the company's market for common equity, financial condition, results of operations, and disclosures regarding controls and procedures ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES This section details the trading of the company's securities, shareholder information, dividend policy, and lack of equity compensation plans or issuer equity purchases Holders of Record As of March 18, 2025, there were 4,499,116 shares of common stock outstanding held by approximately 4 record stockholders - As of March 18, 2025, there were 4,499,116 shares of common stock issued and outstanding, held by approximately 4 stockholders of record[70] Dividends The company has not paid cash dividends and does not intend to prior to a business combination, with future payments at board discretion - The company has not paid any cash dividends to date and does not intend to prior to the completion of an initial business combination[71] - Future dividend payments will depend on revenues, earnings, capital requirements, and financial condition post-business combination, and will be at the discretion of the board of directors[71] Securities Authorized for Issuance Under Equity Compensation Plans No securities are authorized for issuance under equity compensation plans - No securities are authorized for issuance under equity compensation plans[72] Recent Sales of Unregistered Securities There were no unregistered securities sales to report that have not been previously disclosed - There were no unregistered securities to report that have not been previously included in a Quarterly Report on Form 10-Q or a Current Report on Form 8-K[73] Use of Proceeds The company is a blank check company formed to effect a business combination, with IPO and private placement proceeds detailed - The company is a blank check company formed to effect a business combination[74] Gross Proceeds from IPO and Private Placement | Event | Date | Gross Proceeds | | :-------------------------------- | :--------- | :------------- | | Initial Public Offering (IPO) | March 31, 2023 | $69,000,000 | | Private Placement | March 31, 2023 | $3,945,000 | Purchases of Equity Securities by the Issuer and Affiliated Purchasers There were no purchases of equity securities by the issuer or affiliated purchasers - There were no purchases of equity securities by the issuer or affiliated purchasers[77] ITEM 6. [RESERVED] This item is reserved and contains no information - This item is reserved[78] ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS This section reviews the company's financial condition, operational results, liquidity, and going concern status, including details of its business combination efforts and contractual obligations Overview The company, a blank check entity, aims to complete a business combination, acknowledging potential dilution and significant associated costs - The company is a blank check company formed to effect a business combination, intending to use cash from its IPO and private placement proceeds, along with potential additional financing or debt[80] - Issuance of additional shares or incurring significant debt in connection with a business combination could dilute equity interests, subordinate common stock rights, cause a change in control, or adversely affect market prices[81] - The company expects to incur significant costs in pursuit of its initial business combination and cannot assure success in raising capital or completing the combination[82] Recent Developments This section details the company's ongoing business combination efforts with Cyabra Strategy Ltd. and the extensions of the completion deadline Business Combination Trailblazer entered a merger agreement with Cyabra Strategy Ltd., leading to Cyabra becoming a Nasdaq-listed subsidiary of Holdings - On July 22, 2024, Trailblazer entered into a merger agreement with Cyabra Strategy Ltd., an Israeli company, which was amended on November 11, 2024[84] - The transaction involves Trailblazer merging into Holdings, and a subsidiary merging into Cyabra, with Holdings being renamed 'Cyabra, Inc.' and expected to list on Nasdaq[85][91] - Cyabra shareholders and option holders may receive up to 3,000,000 Earnout Shares based on stock price targets, and Cyabra Key Employees will receive 400,000 shares[87][88] - A PIPE Investment of at least $6.0 million is planned, which may be reduced if the Trust Account balance exceeds $3.5 million after redemptions[89] - Alpha Capital Anstalt, an affiliate of the Sponsor, provided Cyabra with $3.4 million in convertible notes in 2024 and a $1.0 million promissory note in February 2025[90] The Extension of the Completion Window The board approved multiple extensions for the business combination deadline, funded by the Sponsor, leading to significant share redemptions - The board approved extensions of the business combination deadline from March 31, 2024, to September 30, 2024, and further to September 30, 2025, through monthly extensions[92][98] - The Extension Payments were loaned under a non-interest bearing promissory note from the Sponsor, which has been repeatedly amended and increased, reaching a maximum of $3.53 million by February 21, 2025, with a maturity date extended to May 31, 2025, or 18 months post-business combination[95][96][97][152][153] - In connection with the Annual Meeting on September 26, 2024, 4,520,384 shares were tendered for redemption, resulting in a withdrawal of $49.77 million from the Trust Account on October 9, 2024[99][155] Extension Payment Deposited by Sponsor | Date | Extension Payment Deposited by Sponsor | | :---------------- | :------------------------------------- | | Through Dec 31, 2024 | $1,713,146 | | Feb 4, 2025 | $83,287 | | Feb 27, 2025 | $83,287 | Results of Operations The company has not generated operating revenues, with net income primarily from interest on trust account marketable securities - The company has not engaged in operations or generated revenues to date, with activities focused on organizational tasks and identifying a business combination target[100] - Non-operating income is generated from interest on marketable securities held in the Trust Account[100] Net Income Summary | Year Ended December 31, | Net Income | Interest Earned on Trust Account | Operating Costs | Provision for Income Taxes | Stock-Based Compensation Expense | | :------------------------ | :--------- | :------------------------------- | :-------------- | :------------------------- | :------------------------------- | | 2024 | $277,658 | $3,296,420 | $2,293,333 | $725,429 | — | | 2023 | $1,347,254 | $2,606,031 | $543,536 | $516,986 | $207,087 | Liquidity, Capital Resources and Going Concern The company's liquidity is limited, with funds restricted in the trust account, raising substantial doubt about its ability to continue as a going concern - The company's IPO and Private Placement in March 2023 generated gross proceeds of $69 million and $3.945 million respectively, with $70.38 million deposited into a trust account[104][105][106] - Funds in the trust account are restricted until the completion of a business combination or redemption events, with interest released for tax obligations[106][107] - The Sponsor has deposited $1.71 million through December 31, 2024, to extend the business combination deadline to January 31, 2025, and further extensions were made in February 2025[108][109][114] - The Sponsor's promissory note, used for extension payments, has been amended multiple times, increasing the maximum available amount to $3.53 million and extending maturity to May 31, 2025, or 18 months post-business combination[110][111] - A significant redemption of 4,520,384 shares occurred on October 9, 2024, withdrawing $49.77 million from the Trust Account[113] - Management has determined that the company lacks sufficient liquidity to sustain operations for a reasonable period and faces substantial doubt about its ability to continue as a going concern, given the impending business combination deadline of March 31, 2025 (or September 30, 2025, if fully extended)[119] Cash and Trust Account Balances | As of December 31, 2024 | Amount | | :---------------------- | :----- | | Operating Bank Account | $63,829 | | Restricted Cash (for taxes) | $802,993 | | Trust Account (Marketable Securities) | $26,832,298 | Off-Balance Sheet Arrangements The company did not have any off-balance sheet arrangements as of December 31, 2024 - The company did not have any off-balance sheet arrangements as of December 31, 2024[120] Contractual Obligations This section outlines the company's contractual obligations, including deferred underwriting fees and a promissory note with the Sponsor Promissory Notes - Related Party The company has a non-interest bearing promissory note with the Sponsor, repeatedly amended and extended, for funding extensions - The company has a non-interest bearing unsecured promissory note with the Sponsor, which has been amended multiple times to increase the maximum borrowing amount to $3.53 million by February 21, 2025[121] - The note's maturity date was extended to May 31, 2025, or 18 months after the business combination, with monthly payments of $125,000 commencing post-business combination[122] Promissory Note Outstanding Balance | As of December 31, | Outstanding Amount | | :----------------- | :----------------- | | 2024 | $2,529,445 | | 2023 | $321,585 | Registration and Stockholder's Rights Holders of founder shares and placement units are entitled to registration rights, with the company bearing related expenses - Holders of founder shares, placement units, and units from working capital loans are entitled to registration rights, allowing them to demand registration of their securities for resale[123] - The company will bear the expenses related to filing such registration statements[123] Underwriting Agreement The underwriters received a cash discount upon IPO closing, with a deferred commission payable upon business combination completion - The underwriters received a cash underwriting discount of $1.035 million upon IPO closing[125] - A deferred underwriting commission of $2.07 million is payable to the underwriters from the trust account solely upon completion of an initial business combination[125] Advisory Agreement The company agreed to pay LifeSci Capital LLC 1.5% of total consideration in equity for advisory services upon business combination consummation - Upon consummation of the initial business combination, the company agreed to pay LifeSci Capital LLC 1.5% of the total consideration in equity interests for advisory services[126] - The company will reimburse underwriters for out-of-pocket expenses up to $50,000, and any excess upon business combination closing[129] Investment Management Trust Agreement The company's trust agreement with Continental Stock Transfer & Trust Company was amended to allow monthly extensions of the business combination deadline - The company entered into an agreement with Continental Stock Transfer & Trust Company to manage the Trust Account, investing funds in U.S. government securities or money market funds[130] - The trust agreement was amended on September 26, 2024, to allow monthly extensions of the business combination deadline until September 30, 2025, and to remove the provision for withdrawing $100,000 for dissolution expenses[131] Critical Accounting Estimates Management reviews accounting policies and estimates, with no critical accounting estimates identified as of December 31, 2024 - Management reviews accounting policies, assumptions, estimates, and judgments to ensure fair financial statement presentation in accordance with U.S. GAAP[132] - Significant estimates include determining the fair value of stock-based compensation and derivative financial instruments at the IPO[133] - The company has not identified any critical accounting estimates as of December 31, 2024[133] Recent Accounting Standards The company adopted ASU 2023-09 and ASU 2023-07 with no material effect, and expects no material impact from other new standards - The company adopted ASU 2023-09 (Income Taxes) and ASU 2023-07 (Segment Reporting) for the year ended December 31, 2024, with no material effect on financial statements[134][135] - Management does not believe other recently issued, but not yet effective, accounting standards would materially affect financial statements if currently adopted[136] JOBS Act As an 'emerging growth company' under the JOBS Act, the company benefits from extended transition periods and reduced disclosure requirements - The company qualifies as an 'emerging growth company' under the JOBS Act, allowing it to comply with new or revised accounting pronouncements based on private company effective dates[137] - The company elected not to opt out of the extended transition period for accounting standards, which may affect comparability with other public companies[137] - Exemptions under the JOBS Act include not being required to provide an auditor's attestation report on internal controls, reduced executive compensation disclosures, and exemptions from certain PCAOB requirements[138] ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK This item is not required for smaller reporting companies - This item is not required for smaller reporting companies[139] ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The financial statements and supplementary data are included following Item 15 of this Annual Report - Financial statements and supplementary data are included following Item 15 of this Annual Report[140] ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE There are no changes in or disagreements with accountants on accounting and financial disclosure to report - There are no changes in or disagreements with accountants on accounting and financial disclosure[141] ITEM 9A. CONTROLS AND PROCEDURES Management evaluated disclosure controls and internal control over financial reporting as effective, with no material changes during the fiscal quarter Evaluation of Disclosure Controls and Procedures The company's disclosure controls and procedures were evaluated as effective at a reasonable assurance level as of December 31, 2024 - As of December 31, 2024, the company's disclosure controls and procedures were evaluated and deemed effective at a reasonable assurance level[143] Management's Report on Internal Controls Over Financial Reporting Management assessed internal control over financial reporting as effective, with no auditor attestation due to emerging growth company status - Management is responsible for establishing and maintaining adequate internal control over financial reporting, designed to provide reasonable assurance regarding financial reporting reliability[144] - As of December 31, 2024, management assessed the effectiveness of internal control over financial reporting using the COSO framework and determined it was effective[145] - This Annual Report does not include an attestation report from the independent registered public accounting firm due to the company's status as an emerging growth company[146] Changes in Internal Control Over Financial Reporting No material changes in internal control over financial reporting occurred during the most recent fiscal quarter - There were no changes in internal control over financial reporting during the most recent fiscal quarter that materially affected, or are reasonably likely to materially affect, internal control over financial reporting[148] ITEM 9B. OTHER INFORMATION This section details the extensions of the business combination completion window and related financial activities, including share redemptions Extension The board approved multiple extensions for the business combination deadline, funded by the Sponsor's promissory note, leading to significant share redemptions - The board approved extensions of the business combination deadline from March 31, 2024, to September 30, 2024, and further to September 30, 2025, through monthly extensions[149][154] - The Extension Payments were loaned under a non-interest bearing promissory note from the Sponsor, which has been repeatedly amended and increased, reaching a maximum of $3.53 million by February 21, 2025, with a maturity date extended to May 31, 2025, or 18 months post-business combination[152][153] - In connection with the Annual Meeting on September 26, 2024, 4,520,384 shares were tendered for redemption, resulting in a withdrawal of $49.77 million from the Trust Account on October 9, 2024[155] Extension Payments by Sponsor | Date | Extension Payment Deposited by Sponsor | | :---------------- | :------------------------------------- | | Through Dec 31, 2024 | $1,713,146 | | Feb 4, 2025 | $83,287 | | Feb 27, 2025 | $83,287 | ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS This item is not applicable to the company - This item is not applicable[156] PART III This section details the company's directors, executive officers, corporate governance, executive compensation, and security ownership of beneficial owners ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE This section outlines the company's directors and executive officers, their professional backgrounds, board committee structures, and corporate governance policies Directors and Executive Officers This section lists the company's directors and executive officers, detailing their ages, positions, and extensive professional experience - Executive officers and directors possess extensive experience in investment, finance, and technology, with key roles in family offices, biomedical companies, and cybersecurity firms[160][161][162][163][164][166][167] Directors and Executive Officers | Name | Age | Position | | :---------------- | :-- | :-------------------------------- | | Arie Rabinowitz | 53 | Director and Chief Executive Officer | | Scott Burell | 60 | Chief Financial Officer | | Yosef Eichorn | 33 | Chief Development Officer | | Joseph Hammer | 46 | Chairman of the Board | | Barak Avitbul | 51 | Director | | Olga Castells | 51 | Director | | Patrick Donovan | 47 | Director | Number and Terms of Office of Officers and Directors The board consists of five directors with staggered three-year terms, and officers serve at the discretion of the board - The board of directors consists of five directors and is divided into three classes with staggered three-year terms[168] - Officers are appointed by and serve at the discretion of the board of directors[169] Director Independence The company maintains a majority of independent directors as per Nasdaq requirements, with specific independent directors identified - Nasdaq requires a majority of the board to be composed of 'independent directors'[170] - Barak Avitbul, Olga Castells, and Patrick Donovan are identified as independent directors[171] Committees of the Board of Directors This section describes the Audit and Compensation Committees, their independent director composition, and their respective oversight duties Audit Committee The Audit Committee, composed of independent directors, oversees financial reporting, auditor relations, and related party transactions - The Audit Committee consists of independent directors Barak Avitbul, Olga Castells, and Patrick Donovan, with Mr. Donovan chairing the committee[174] - Duties include appointment and oversight of the independent registered public accounting firm, pre-approving audit and non-audit services, and reviewing related party transactions[175][177] Financial Experts on Audit Committee All audit committee members are financially literate, with Patrick Donovan identified as an 'audit committee financial expert' - All audit committee members are financially literate, and Patrick Donovan qualifies as an 'audit committee financial expert'[176] Director nominations The company does not have a standing nominating committee, with independent directors recommending nominees based on diverse criteria - The company does not have a standing nominating committee but intends to form one as required by law or Nasdaq rules[178] - A majority of independent directors (Barak Avitbul, Olga Castells, and Patrick Donovan) recommend director nominees[178] - The board considers educational background, diversity of experience, business knowledge, integrity, reputation, independence, and wisdom when evaluating nominees[180] Compensation Committee The Compensation Committee, composed of independent directors, reviews executive compensation, with no cash compensation paid prior to a business combination - The Compensation Committee consists of independent directors Barak Avitbul (Chairperson), Olga Castells, and Patrick Donovan[180] - Duties include reviewing and approving executive officer compensation, executive compensation policies, and administering incentive compensation plans[182] - No cash compensation is paid to existing stockholders, directors, or affiliates prior to the consummation of a business combination[181] Code of Ethics The company adopted a code of conduct and ethics applicable to directors, officers, and employees, available on the SEC's website - The company adopted a code of conduct and ethics applicable to directors, officers, and employees, available on the SEC's website[183] Section 16(a) Beneficial Ownership Reporting Compliance All Section 16(a) filing requirements for executive officers, directors, and greater than 10% beneficial owners were filed timely - Based on reviews and written representations, all Section 16(a) filing requirements for executive officers, directors, and greater than 10% beneficial owners were filed in a timely manner[185] ITEM 11. EXECUTIVE COMPENSATION No cash compensation has been paid to officers or directors for services rendered, with reimbursements for out-of-pocket expenses Executive Officers and Director Compensation No cash compensation has been paid to officers or directors, who are reimbursed for out-of-pocket expenses incurred in identifying target businesses - No cash compensation has been paid to officers or directors for services rendered to the company[186] - Officers and directors are reimbursed for out-of-pocket expenses incurred in identifying potential target businesses, with quarterly review by the audit committee[186] - After the business combination, directors or management may receive consulting or management fees, which will be fully disclosed to stockholders[187] Compensation Committee Interlocks and Insider Participation None of the company's officers serve on the compensation committee of any entity with officers on the company's board - None of the company's officers currently serve, or have served in the past year, as a member of the compensation committee of any entity with officers serving on the company's board[189] ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED SHAREHOLDER MATTERS This section details the beneficial ownership of the company's securities by the Sponsor, management, and other significant shareholders SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT Trailblazer Sponsor Group, LLC is the largest beneficial owner with 47.1% of outstanding shares, with other significant institutional holders identified - Joseph Hammer, as a manager of the Sponsor, is deemed a beneficial owner of the shares held by the Sponsor[192] Beneficial Ownership as of March 24, 2025 | Name and Address of Beneficial Owner | Number of Shares Beneficially Owned | Percentage of Outstanding Shares | | :----------------------------------- | :---------------------------------- | :------------------------------- | | Trailblazer Sponsor Group, LLC | 2,119,500 | 47.1% | | Joseph Hammer | 2,119,500 | 47.1% | | All officers and directors as a group (7 individuals) | 2,119,500 | 47.1% | | AQR Capital Management, LLC | 438,763 | 9.8% | | TD Securities (USA) LLC | 240,000 | 5.3% | | Kerry Proper/Antonio Ruiz-Gimenez | 400,000 | 8.9% | | Karpus Management, Inc. | 246,490 | 5.5% | ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE This section details transactions with related parties, including founder shares, private placement, promissory notes, and the company's related party policy and director independence Founder Shares The Sponsor initially purchased founder shares, which were later exchanged and subject to a lock-up period post-business combination - The Sponsor initially purchased 1,940,625 founder shares for $25,000, which were later exchanged for Class A common stock and a single Class B share, with some shares forfeited, resulting in 1,724,999 Class A founder shares and 1 Class B share outstanding[193] - The Sponsor agreed to a lock-up period for founder shares, restricting transfer until one year after business combination completion or specific stock price targets are met[194] Private Placement The Sponsor purchased 394,500 Placement Units for $3.945 million concurrently with the IPO, with proceeds added to the Trust Account - The Sponsor purchased 394,500 Placement Units for $3.945 million in a private placement concurrent with the IPO[195] - Proceeds from Placement Units were added to the Trust Account, and these units will expire worthless if a business combination is not completed within the Combination Period[195] Promissory Notes The company has a non-interest bearing promissory note with the Sponsor, repeatedly amended and extended, for funding extensions - The company has a non-interest bearing unsecured promissory note with the Sponsor, which has been amended multiple times to increase the maximum borrowing amount to $3.53 million by February 21, 2025[196] - The note's maturity date was extended to May 31, 2025, or 18 months after the business combination, with monthly payments of $125,000 commencing post-business combination[197] Promissory Note Outstanding Balance | As of December 31, | Outstanding Amount | | :----------------- | :----------------- | | 2024 | $2,529,445 | | 2023 | $321,585 | Related Party Loans The Sponsor or affiliates may provide 'Working Capital Loans' for transaction costs, convertible into units of the post-business combination entity - The Sponsor or its affiliates/officers/directors may provide 'Working Capital Loans' to finance transaction costs, repayable from Trust Account proceeds if a business combination closes, or from outside funds otherwise[198] - Up to $1.5 million of Working Capital Loans may be convertible into units of the post-business combination entity at $10.00 per unit[199] - As of December 31, 2024 and 2023, there was no amount outstanding under the Working Capital Loan[199] General The Sponsor, officers, and directors are reimbursed for documented out-of-pocket expenses, with all related party transactions requiring audit committee approval - The Sponsor, officers, and directors are reimbursed for bona-fide, documented out-of-pocket expenses incurred for company activities, with no cap on reimbursement[200] - All ongoing and future related party transactions require prior approval by the audit committee and a majority of uninterested independent directors[201] Related Party Policy The Code of Ethics requires avoiding conflicts of interest, with related party transactions exceeding $120,000 requiring board approval - The Code of Ethics requires avoiding related party transactions that could create conflicts of interest, except under board-approved guidelines[202] - Related party transactions are defined as those exceeding $120,000 annually involving executive officers, directors, or greater than 5% beneficial owners and their immediate family members[202] - The company will not consummate a business combination with an affiliated entity unless an independent investment banking firm provides a fairness opinion and a majority of disinterested independent directors approve[204] Director Independence Nasdaq listing standards require a majority of the board of directors to be independent - Nasdaq listing standards require a majority of the board of directors to be independent[205] Item 14. Principal Accountant Fees and Services. This section details the audit fees paid to Marcum LLP for 2024 and 2023, and outlines the audit committee's pre-approval policy for services Pre-Approval Policy The audit committee pre-approves all auditing and permitted non-audit services by the auditors, including fees and terms - The audit committee pre-approves all auditing services and permitted non-audit services by the auditors, including fees and terms[207] Audit Fees Audit fees paid to Marcum LLP were $239,990 in 2024 and $228,145 in 2023 Audit Fees Paid to Marcum LLP | Year Ended December 31, | Audit Fees | | :------------------------ | :--------- | | 2024 | $239,990 | | 2023 | $228,145 | Audit-Related Fees No Audit-Related Fees were paid to Marcum LLP for the years ended December 31, 2024 and 2023 - No Audit-Related Fees were paid to Marcum LLP for the years ended December 31, 2024 and 2023[208] Tax Fees No Tax Fees were paid to Marcum LLP for the years ended December 31, 2024 and 2023 - No Tax Fees were paid to Marcum LLP for the years ended December 31, 2024 and 2023[208] All Other Fees No Other Fees were paid to Marcum LLP for the years ended December 31, 2024 and 2023 - No Other Fees were paid to Marcum LLP for the years ended December 31, 2024 and 2023[208] PART IV This section lists the financial statements, schedules, and exhibits included in the Form 10-K, along with the Form 10-K summary ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES This section lists the financial statements, schedules, and exhibits filed as part of the Form 10-K, including various agreements and certifications Financial Statements The financial statements include the Report of Independent Registered Public Accounting Firm, Consolidated Balance Sheets, Statements of Operations, Changes in Stockholders' Deficit, and Cash Flows - The financial statements include the Report of Independent Registered Public Accounting Firm, Consolidated Balance Sheets, Statements of Operations, Changes in Stockholders' Deficit, and Cash Flows for the years ended December 31, 2024 and 2023, along with Notes to Consolidated Financial Statements[210] Financial Statement Schedules No financial statement schedules are filed - No financial statement schedules are filed[211] Exhibits The report includes an Exhibit Index listing various documents such as the Underwriting Agreement, Promissory Notes, and certifications - The report includes an Exhibit Index listing various documents such as the Underwriting Agreement, Promissory Notes, Certificate of Incorporation, Rights Agreement, Investment Management Trust Agreement, and Registration Rights Agreement[213][216] - Key exhibits include the Amended and Restated Promissory Note dated March 24, 2025, and certifications from the Principal Executive Officer and Principal Financial Officer[216] ITEM 16. FORM 10-K SUMMARY This item is not applicable to the company - This item is not applicable[215]