EGH Acquisition Corp Unit(EGHAU) - 2025 Q1 - Quarterly Report

PART I - FINANCIAL INFORMATION Item 1. Interim Financial Statements The company presents its unaudited condensed financial statements for the period from inception through March 31, 2025 Condensed Balance Sheet | Assets/Liabilities/Equity | Amount ($) | | :------------------------ | :--------- | | Assets: | | | Deferred offering cost | 101,075 | | Total Assets | 101,075 | | Liabilities: | | | Accounts payable and accrued expenses | 6,748 | | Accrued offering costs | 49,700 | | Promissory note - related party | 69,769 | | Total Liabilities | 126,217 | | Shareholder's Deficit:| | | Class B ordinary shares | 575 | | Additional paid-in capital| 24,425 | | Accumulated deficit | (50,142) | | Total Shareholder's Deficit | (25,142) | | Total Liabilities and Shareholder's Deficit | 101,075 | Condensed Statement of Operations | Item | Amount ($) | | :------------------------------------ | :--------- | | General and administrative costs | 50,142 | | Loss from operations | (50,142) | | Net loss | (50,142) | | Weighted average shares outstanding, Class B ordinary shares | 5,000,000 | | Basic and diluted net loss per share, Class B ordinary shares | (0.01) | Condensed Statement of Changes in Shareholder's Deficit | Item | Class A Ordinary Shares (Shares) | Class A Ordinary Shares (Amount $) | Class B Ordinary Shares (Shares) | Class B Ordinary Shares (Amount $) | Additional Paid-in Capital ($) | Accumulated Deficit ($) | Total Shareholder's Deficit ($) | | :------------------------------------ | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :---------------------- | :------------------------------ | | Balance — January 9, 2025 (inception) | — | — | — | — | — | — | — | | Issuance of Class B ordinary shares to Sponsor | — | — | 5,750,000 | 575 | 24,425 | — | 25,000 | | Net loss | — | — | — | — | — | (50,142) | (50,142) | | Balance - March 31, 2025 | — | — | 5,750,000 | 575 | 24,425 | (50,142) | (25,142) | Condensed Statement of Cash Flows | Cash Flow Item | Amount ($) | | :------------------------------------------------ | :--------- | | Cash Flows from Operating Activities: | | | Net loss | (50,142) | | Adjustments to reconcile net loss to net cash used in operating activities: | | | Operating costs paid by Sponsor in exchange for issuance of Class B ordinary shares | 10,420 | | Operating costs paid through promissory note | 32,974 | | Changes in operating assets and liabilities: | | | Accrued expenses | 6,748 | | Net cash used in operating activities | — | | Net Change in Cash | — | | Cash – Beginning of period | — | | Cash – End of period | — | | Noncash investing and financing activities: | | | Deferred offering costs included in accrued offering costs | 49,700 | | Deferred offering costs paid through promissory note - related party | 36,795 | | Offering costs and operating costs paid in exchange for issuance of Class B ordinary shares | 25,000 | Notes to Condensed Financial Statements NOTE 1. Description of Organization and Business Operations - EGH Acquisition Corp is a blank check company incorporated on January 9, 2025, in the Cayman Islands, formed to effect a Business Combination with an unidentified target[19] - The Company had not commenced operations as of March 31, 2025, with activities focused on formation, initial public offering (IPO) preparation, and target identification[20] - The IPO was declared effective on May 8, 2025, and consummated on May 12, 2025, selling 15,000,000 units at $10,00 per unit, generating $150,000,000 gross proceeds[22] - Simultaneously with the IPO, 500,000 Private Placement Units were sold to the Sponsor and underwriters for $5,000,000[23] - Transaction costs totaled $9,567,513, including cash underwriting fees, deferred underwriting fees, and other offering costs[24] - A Trust Account of $150,000,000 was established from IPO proceeds, to be invested in U.S. government treasury obligations or money market funds, and will be released upon Business Combination completion or redemption of public shares[26][28] - The Company's liquidity needs until May 12, 2025, were met by an unsecured promissory note from the Sponsor for up to $300,000, with $69,769 outstanding as of March 31, 2025[35] - Management believes it has sufficient funds to finance working capital needs for one year, assuming receipt of amounts due from the Sponsor[37] NOTE 2. Significant Accounting Policies - The unaudited condensed financial statements are prepared in accordance with US GAAP for interim financial information, with certain disclosures condensed or omitted per SEC rules[38] - The Company is an 'emerging growth company' under the JOBS Act, allowing it to take advantage of exemptions from certain reporting requirements and an extended transition period for new accounting standards[42][43] - Deferred offering costs, primarily professional and registration fees related to the IPO, are allocated between Class A ordinary shares and rights, with costs allocated to public shares charged to temporary equity and rights to shareholder's deficit[47] - The Company is an exempted Cayman Islands company and is not subject to income taxes in the Cayman Islands or the United States, resulting in a zero tax provision for the period[52] - The underwriters' over-allotment option is accounted for as a derivative liability due to its freestanding nature and indexing on contingently redeemable shares[53] - Net loss per ordinary share is calculated by dividing net loss by the weighted average number of Class B ordinary shares outstanding, excluding shares subject to forfeiture[55] - The Company adopted ASU 2023-07, 'Segment Reporting,' on January 9, 2025, requiring enhanced disclosures for reportable segments[58] NOTE 3. Initial Public Offering - On May 12, 2025, the Company sold 15,000,000 Units in its IPO at $10,00 per Unit, each consisting of one Class A ordinary share and one right to receive one-tenth of a Class A ordinary share upon business combination[60] NOTE 4. Private Placement - Simultaneously with the IPO, the Sponsor, CCM, and Seaport purchased 500,000 Private Placement Units for $5,000,000, identical to IPO units with limited exceptions[61] - Proceeds from Private Placement Units held in the Trust Account will fund public share redemption if a Business Combination is not completed within the Completion Window[62] - The Sponsor, officers, and directors have waived redemption rights for their founder and public shares and rights to liquidating distributions from the Trust Account for founder shares if a Business Combination is not completed[63] NOTE 5. Related Party Transactions - On January 9, 2025, the Sponsor contributed $25,000 for 5,750,000 Class B ordinary shares (founder shares), with up to 750,000 shares subject to forfeiture[65] - On April 8, 2025, the Sponsor granted membership interests equivalent to 75,000 founder shares to three independent directors, valued at $110,449 ($1,473 per share), with stock-based compensation recognized upon probable Business Combination[66] - The Sponsor loaned the Company up to $300,000 via an unsecured, non-interest-bearing promissory note, with $69,769 outstanding as of March 31, 2025, and borrowings no longer available[70] - Effective May 8, 2025, the Company agreed to pay the Sponsor or an affiliate $25,000 per month for administrative support, ceasing upon Business Combination or liquidation[71] - Working Capital Loans of up to $1,500,000 from the Sponsor or affiliates may be converted into private placement units at $10,00 per unit upon Business Combination, with no outstanding loans as of March 31, 2025[72] NOTE 6. Commitments and Contingencies - Geopolitical instability (Russia-Ukraine, Israel-Hamas conflicts) could lead to market disruptions and adversely affect the Company's search for a Business Combination[73][74] - Holders of Founder Shares, Private Placement Units, and Working Capital Loan units are entitled to registration rights, with the Company bearing filing expenses[76] - Underwriters have a 45-day over-allotment option from May 12, 2025, to purchase up to 2,250,000 additional Units, which remains open[77] - A cash underwriting discount of $3,000,000 was paid, and a deferred underwriting discount of $6,000,000 (or up to $6,900,000) is payable upon Business Combination closing[78][79] NOTE 7. Shareholder's Deficit - The Company is authorized to issue 5,000,000 preference shares and 500,000,000 Class A ordinary shares, with none issued or outstanding as of March 31, 2025[80] - 5,750,000 Class B ordinary shares were issued to the Sponsor for $25,000, with up to 750,000 shares subject to forfeiture[81] - Class B ordinary shares automatically convert to Class A ordinary shares on a one-for-one basis upon Business Combination, subject to adjustment[82][85] - Prior to Business Combination, only Class B ordinary shareholders vote on director appointments/removals and continuation in a foreign jurisdiction[67][86] - Each Share Right automatically converts to one-tenth of a Class A ordinary share upon Business Combination, but will expire worthless if no Business Combination is completed[87] NOTE 8. Segment Information - The Company has identified its Chief Financial Officer as the Chief Operating Decision Maker (CODM), who reviews assets, operating results, and financial metrics for the Company as a whole[89] - Management has determined there is only one reportable segment, with the CODM assessing performance based on net income (loss) and total assets[89][92] - Key segment profit/loss measures reviewed by the CODM are general and administrative costs, totaling $50,142 for the period from inception through March 31, 2025[92] NOTE 9. Subsequent Events - On May 12, 2025, the Company consummated its IPO, generating $150,000,000 gross proceeds from 15,000,000 units, and sold 500,000 Private Placement Units for $5,000,000[94] - The underwriters' 45-day over-allotment option for up to 2,250,000 Units remains open as of the filing date[95] - A cash underwriting discount of $3,000,000 was paid on May 12, 2025, with a deferred discount of $6,000,000 (or up to $6,900,000) due upon Business Combination[96] - The Sponsor repaid $1,840,000 owed to the Company as of May 12, 2025, in full[97] - On June 4, 2025, the Sponsor granted membership interests equivalent to 25,000 founder shares to an individual for Chief Legal Officer and Secretary services[99] - On June 20, 2025, the promissory note balance was repaid in full, and further borrowings are unavailable[100] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's financial condition, operational results, liquidity, and capital resources Overview - EGH Acquisition Corp is a blank check company formed on January 9, 2025, to effect a business combination with an unidentified target[103] - The Company plans to use cash from IPO and private placement proceeds, shares, debt, or a combination thereof for its Business Combination[103] Results of Operations - The Company has not engaged in operations or generated revenues from inception (January 9, 2025) through March 31, 2025, with activities limited to organizational efforts and IPO preparation[105] - Net loss for the period from inception through March 31, 2025, was $50,142, consisting entirely of general and administrative costs[106] - Post-IPO, the Company expects to generate non-operating income from interest on marketable securities in the Trust Account[105] Liquidity and Capital Resources - Prior to the IPO, liquidity was sourced from initial Class B ordinary share purchases by the Sponsor and loans from the Sponsor[107] - Post-IPO (May 12, 2025), the Company raised $150,000,000 gross proceeds from 15,000,000 Units and $5,000,000 from 500,000 Private Placement Units[108] - A total of $150,000,000 was placed in the Trust Account, with $9,567,513 incurred in offering costs[109] - Funds in the Trust Account will primarily be used for the Business Combination, while funds outside the Trust Account will cover target identification, due diligence, and negotiation costs[110][111] - The Sponsor or affiliates may provide Working Capital Loans, convertible into private placement units, to fund deficiencies or transaction costs[112] - Management does not anticipate needing additional funds for operations but acknowledges potential insufficiency if Business Combination costs exceed estimates[113] Off-Balance Sheet Arrangements - As of March 31, 2025, the Company has no off-balance sheet arrangements, such as relationships with unconsolidated entities, special purpose entities, or debt guarantees[114] Contractual obligations - The Company has no long-term debt, capital lease, operating lease, or long-term liabilities, other than a $25,000 monthly agreement for office space and administrative support, which ceases upon Business Combination or liquidation[115] - The underwriters' 45-day over-allotment option for up to 2,250,000 additional Units remains open[116] Critical Accounting Estimates - As of March 31, 2025, the Company did not have any critical accounting estimates to be disclosed[117] Item 3. Quantitative and Qualitative Disclosures About Market Risk This item is not required for smaller reporting companies, and thus no disclosures are provided - This disclosure is not required for smaller reporting companies[119] Item 4. Controls and Procedures The company's disclosure controls and procedures were evaluated and concluded to be effective as of March 31, 2025 Evaluation of Disclosure Controls and Procedures - Management, including Certifying Officers, concluded that the Company's disclosure controls and procedures were effective as of March 31, 2025[121] - Disclosure controls and procedures provide reasonable, not absolute, assurance due to inherent limitations and resource constraints[122] Changes in Internal Control over Financial Reporting - No changes in internal control over financial reporting were applicable for the period[123] PART II - OTHER INFORMATION Item 1. Legal Proceedings The Company reports no legal proceedings - There are no legal proceedings to report[126] Item 1A. Risk Factors The Company states there have been no material changes to risk factors previously disclosed in its final prospectus - Risk factors are detailed in the Company's final prospectus on Form 424B4, dated May 8, 2025[126] - No material changes to the disclosed risk factors have occurred as of the date of this Quarterly Report[126] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This section details the IPO and private placement of units, including proceeds, fund allocation, and offering costs - On May 12, 2025, the Company completed its IPO of 15,000,000 Units at $10,00 each, generating $150,000,000 gross proceeds[127] - Simultaneously, 500,000 Private Placement Units were sold to the Sponsor, CCM, and Seaport for $5,000,000, exempt from registration under Section 4(a)(2) of the Securities Act[128] - An aggregate of $150,000,000 from the IPO and private placement proceeds was placed in the Trust Account[129] - Total offering costs amounted to $9,567,513, including cash and deferred underwriting fees and other costs[129] - There has been no material change in the planned use of proceeds from the IPO and Private Placement[130] Item 3. Defaults Upon Senior Securities The Company reports no defaults upon senior securities - There are no defaults upon senior securities[132] Item 4. Mine Safety Disclosures The Company reports no mine safety disclosures - There are no mine safety disclosures[132] Item 5. Other Information No directors or officers adopted or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements - No directors or officers adopted or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the quarter ended March 31, 2025[133] Item 6. Exhibits This item lists the exhibits filed with or incorporated by reference into the Quarterly Report on Form 10-Q - Exhibits include certifications of Principal Executive and Financial Officers (31,1, 31,2, 32,1, 32,2) and Inline XBRL documents (101,INS, 101,SCH, 101,CAL, 101,DEF, 101,LAB, 101,PRE, 104)[135] Signatures The report is duly signed on behalf of EGH Acquisition Corp by its CEO and CFO on June 23, 2025 - The report was signed by Andrew B Lipsher, Chief Executive Officer, and Vincent T Cubbage, Chief Financial Officer, on June 23, 2025[141]