EGH Acquisition Corp Unit(EGHAU) - 2025 Q2 - Quarterly Report

PART I – FINANCIAL INFORMATION Item 1. Financial Statements. The company presents its unaudited condensed financial statements for the period ended June 30, 2025 Unaudited Condensed Balance Sheet as of June 30, 2025 Condensed Balance Sheet Highlights (June 30, 2025) | Metric | Amount | | :--- | :--- | | Total Assets | $152,164,103 | | Marketable securities held in Trust Account | $150,834,274 | | Total Liabilities | $6,107,536 | | Class A Ordinary Shares subject to possible redemption | $150,834,274 | | Total Shareholders' Deficit | $(4,777,707) | Unaudited Condensed Statements of Operations Condensed Statements of Operations Highlights | Metric | For the Three Months Ended June 30, 2025 | For the Period from January 9, 2025 (Inception) Through June 30, 2025 | | :--- | :--- | :--- | | General and administrative costs | $185,052 | $235,194 | | Loss from operations | $(185,052) | $(235,194) | | Gain on expiration of Over-Allotment Option liability | $159,084 | $159,084 | | Interest earned on marketable securities held in Trust Account | $834,274 | $834,274 | | Net income | $808,306 | $758,164 | | Basic and diluted net income per Ordinary Share, Class A | $0.06 | $0.08 | | Basic and diluted net income per Ordinary Share, Class B | $0.06 | $0.08 | Unaudited Condensed Statements of Changes in Shareholders' Deficit Changes in Shareholders' Deficit Highlights (Period from Inception through June 30, 2025) | Event | Impact on Shareholder's Deficit | | :--- | :--- | | Balance — January 9, 2025 (inception) | $0 | | Issuance of Class B Ordinary Shares to Sponsor | $25,000 | | Net loss (through March 31, 2025) | $(50,142) | | Sale of 500,000 Private Placement Units | $5,000,000 | | Fair value of rights included in Public Units | $2,220,000 | | Allocated value of transaction costs to Class A Ordinary Shares | $(169,762) | | Forfeiture of Founder Shares | $0 | | Accretion for Class A Ordinary Shares to redemption amount | $(12,611,109) | | Net income (for the three months ended June 30, 2025) | $808,306 | | Balance - June 30, 2025 | $(4,777,707) | Unaudited Condensed Statement of Cash Flows Condensed Statement of Cash Flows Highlights (Inception through June 30, 2025) | Cash Flow Activity | Amount | | :--- | :--- | | Net cash used in operating activities | $(385,773) | | Net cash used in investing activities (Trust Account investment) | $(150,000,000) | | Net cash provided by financing activities | $151,497,148 | | Net Change in Cash | $1,111,375 | | Cash – End of period | $1,111,375 | Notes to Unaudited Condensed Financial Statements NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS The company is a blank check entity incorporated in January 2025 to pursue a Business Combination - The company was incorporated on January 9, 2025, as a blank check company for a Business Combination[20] IPO and Private Placement Details | Event | Date | Gross Proceeds | Units Sold | | :--- | :--- | :--- | :--- | | Initial Public Offering | May 12, 2025 | $150,000,000 | 15,000,000 | | Private Placement | May 12, 2025 | $5,000,000 | 500,000 | - Transaction costs amounted to $9,567,513, including a $6,000,000 deferred underwriting fee[25] - An amount of $150,000,000 from the IPO and private placement proceeds was placed in a Trust Account, with a per share amount of $10.06 as of June 30, 2025[27][28] - The company has until May 12, 2027, to complete its initial Business Combination[27][30] NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The company details its accounting policies, including its election as an emerging growth company - The company is an "emerging growth company" and has elected not to opt out of the extended transition period for complying with new or revised financial accounting standards[39][40] - Marketable securities held in the Trust Account are classified as trading securities at fair value, consisting of money market funds as of June 30, 2025[44] - Class A Ordinary Shares subject to possible redemption are classified as temporary equity at redemption value, with changes recognized immediately[48] - The Over-Allotment Option was accounted for as a liability and re-valued at each reporting date, while Rights are classified under equity treatment[53][54] NOTE 3. INITIAL PUBLIC OFFERING The company completed its IPO on May 12, 2025, generating gross proceeds of $150,000,000 Initial Public Offering Summary | Metric | Value | | :--- | :--- | | Date | May 12, 2025 | | Public Units Sold | 15,000,000 | | Price per Public Unit | $10.00 | | Gross Proceeds | $150,000,000 | NOTE 4. PRIVATE PLACEMENT The company sold 500,000 Private Placement Units for $5,000,000 concurrently with the IPO Private Placement Summary | Metric | Value | | :--- | :--- | | Private Placement Units Sold | 500,000 | | Price per Unit | $10.00 | | Aggregate Purchase Price | $5,000,000 | | Sponsor's Purchase | 350,000 units | | CCM and Seaport's Purchase | 150,000 units | NOTE 5. RELATED PARTY TRANSACTIONS This note outlines transactions with related parties, including Founder Share issuances and service agreements - The Sponsor initially received 5,750,000 Class B Ordinary Shares (Founder Shares) for $25,000 on January 9, 2025[63] - 750,000 Founder Shares were forfeited by the Sponsor on June 26, 2025, due to the unexercised Over-Allotment Option[63] - Founder Shares (membership interests) were granted to three independent directors (75,000 shares), a service provider (10,000 shares), and an officer (25,000 shares) for their services[64] - The IPO Promissory Note from the Sponsor, for up to $300,000, was repaid by $108,352 upon IPO closing, with no amounts outstanding[67] - The company has an Administrative Services Agreement to pay $25,000 per month for office space, utilities, and support[69] NOTE 6. COMMITMENTS AND CONTINGENCIES The company addresses risks related to completing a Business Combination and details underwriter compensation - The company's ability to complete a Business Combination is subject to various risks and uncertainties, including changes in laws, economic conditions, and geopolitical instability[73] - Holders of Founder Shares, Private Placement Units, and potential Working Capital Loans are entitled to registration rights[74] - The underwriters' Over-Allotment Option expired unexercised on June 26, 2025[75] - A deferred underwriting fee of $6,000,000 is payable to the underwriters upon the closing of an initial Business Combination[77] NOTE 7. SHAREHOLDERS' DEFICIT This note details the company's authorized and outstanding share capital as of June 30, 2025 Share Capital Summary (June 30, 2025) | Share Type | Authorized | Issued and Outstanding | | :--- | :--- | :--- | | Preference Shares | 5,000,000 | None | | Class A Ordinary Shares | 500,000,000 | 500,000 (excluding 15,000,000 subject to redemption) | | Class B Ordinary Shares | 50,000,000 | 5,000,000 | - Class B Ordinary Shares automatically convert into Class A Ordinary Shares on a one-for-one basis upon the consummation of an initial Business Combination[81] - Prior to a Business Combination, only Class B Ordinary Shareholders can vote on director appointments/removals and continuation in a jurisdiction outside the Cayman Islands[82] NOTE 8. FAIR VALUE MEASUREMENTS The company explains its use of a fair value hierarchy for financial instruments like options and rights - The fair value hierarchy classifies assets and liabilities based on observable and unobservable inputs (Level 1, 2, 3)[84][86] - The Over-Allotment Option liability was classified as Level 3 and valued using a Black-Scholes model[85] Key Inputs for Over-Allotment Option Valuation (May 12, 2025) | Input | Value | | :--- | :--- | | Risk-free interest rate | 4.37 % | | Expected term (years) | 0.12 | | Expected volatility | 2.75 % | | Exercise price | $10.0 | | Fair value of Over-Allotment Option unit | $0.071 | - Public Rights were classified as Level 3 due to unobservable inputs, including a 15.0% market adjustment[87] NOTE 9. SEGMENT INFORMATION The company operates as a single reportable segment with financial oversight by the Chief Financial Officer - The company has only one reportable segment[89] - The Chief Financial Officer (CODM) reviews the company's assets, operating results, and financial metrics as a whole[89] - Key measures of segment profit or loss reviewed by the CODM include general and administrative costs[92] NOTE 10. SUBSEQUENT EVENTS The company evaluated subsequent events through August 8, 2025, noting full payment of dues to the Sponsor - Subsequent events were evaluated through August 8, 2025[93] - The full amount due to the Sponsor ($1,884) was paid as of July 31, 2025[94][100] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. Management discusses the company's financial condition, operational results, and liquidity as a blank check company Overview - EGH Acquisition Corp. is a blank check company formed on January 9, 2025, to effect a Business Combination[97] - The company intends to fund its Business Combination using IPO and Private Placement proceeds, securities, debt, or a combination thereof[97] - The company may seek to extend the Combination Period, which could reduce Trust Account funds and potentially affect its Nasdaq listing[99] - Failure to complete a Business Combination by May 8, 2028, could lead to Nasdaq trading suspension and delisting[99] Recent Developments - The $1,884 in expenses incurred by the Sponsor on the company's behalf, reported as 'due to Sponsor' on June 30, 2025, was fully paid as of July 31, 2025[100] Results of Operations - The company has not engaged in operations or generated revenues to date, focusing on organizational activities, the IPO, and identifying acquisition candidates[101] Net Income Summary | Period | Net Income | | :--- | :--- | | Three months ended June 30, 2025 | $808,306 | | Inception (Jan 9, 2025) through June 30, 2025 | $758,164 | - Net income was primarily driven by interest earned on marketable securities in the Trust Account and a gain on the expiration of the over-allotment option, offset by general and administrative costs[102][103] Liquidity and Capital Resources - Following the IPO and Private Placement, $150,000,000 was placed in the Trust Account[104][105] Liquidity and Capital Resources (June 30, 2025) | Metric | Amount | | :--- | :--- | | Marketable securities held in Trust Account | $150,834,274 | | Cash outside Trust Account | $1,111,375 | | Cash used in operating activities (inception to June 30, 2025) | $(385,773) | - Funds in the Trust Account are primarily for the Business Combination, while external funds are for identifying and evaluating target businesses[107][108] - The Sponsor or affiliates may provide Working Capital Loans, convertible into units, to finance transaction costs for a Business Combination[109] - The company does not anticipate needing additional funds for current operations but may require financing to complete a Business Combination[110] Off-Balance Sheet Arrangements - The company has no off-balance sheet arrangements, obligations, assets, or liabilities as of June 30, 2025[111] Contractual Obligations - The company has no long-term debt, capital lease, operating lease, or long-term liabilities[112] - Contractual obligations include a $25,000 monthly fee for administrative services and a $6,000,000 deferred underwriting discount payable upon closing a Business Combination[112][113] Critical Accounting Estimates and Policies - The preparation of financial statements requires significant management judgment and estimates, particularly regarding Class A Ordinary Shares subject to possible redemption, which are classified as temporary equity[114][115] Recent Accounting Standards - The company adopted ASU 2023-07 (Segment Reporting) from its inception on January 9, 2025[117] - Management does not believe other recently issued, but not yet effective, accounting standards will materially affect the financial statements[118] Item 3. Quantitative and Qualitative Disclosures About Market Risk. As a smaller reporting company, detailed market risk disclosures are not required in this report - The company is a smaller reporting company and is not required to provide detailed market risk disclosures[119] Item 4. Controls and Procedures. Management confirms the effectiveness of disclosure controls and procedures as of June 30, 2025 Evaluation of Disclosure Controls and Procedures - The Certifying Officers concluded that disclosure controls and procedures were effective as of June 30, 2025[120] - Disclosure controls and procedures provide reasonable, not absolute, assurance[121] Changes in Internal Control over Financial Reporting - No changes in internal control over financial reporting were applicable or reported[122] PART II – OTHER INFORMATION Item 1. Legal Proceedings. No material litigation is currently pending or contemplated against the company or its management - No material litigation is currently pending or contemplated against the company or its officers and directors[124] Item 1A. Risk Factors. The company highlights key risks including international trade policies, Trust Account funding, and potential Nasdaq delisting - The company refers to its IPO Registration Statement for additional risks, as it is a smaller reporting company[125] - Changes in international trade policies, tariffs, and treaties may materially adversely affect the search for a Business Combination target or the performance of a post-Business Combination company[126][128][129] - Extending the Combination Period could reduce the amount held in the Trust Account and adversely affect the company's ability to consummate a Business Combination or maintain its Nasdaq listing[130] - The company's securities will likely be suspended from trading on Nasdaq and delisted if an initial Business Combination is not consummated by May 8, 2028, due to the Nasdaq 36-Month Requirement[131][132][133] - There is no assurance that the share price of the post-Business Combination company will be greater than the Redemption Price of Public Shares[137][138] - Certain agreements related to the IPO may be amended or waived without shareholder approval, potentially benefiting the Sponsor, officers, and/or directors[139] - Market conditions, economic uncertainty, or downturns could adversely affect the company's business and ability to consummate a Business Combination[140][141] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds. The company details the unregistered sale of Private Placement Units and the use of IPO proceeds - The company completed an unregistered sale of 500,000 Private Placement Units for $5,000,000 to the Sponsor, CCM, and Seaport[142] - The issuance was made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act[142] - Gross proceeds from the IPO were $150,000,000, and from the Private Placement were $5,000,000[143][144] - A total of $150,000,000 was placed in the Trust Account, with remaining proceeds outside the Trust Account used for identifying and negotiating a Business Combination[145][146] Item 3. Defaults Upon Senior Securities. The company reported no defaults upon senior securities during the reporting period - No defaults upon senior securities were reported[148] Item 4. Mine Safety Disclosures. This item is not applicable to the company's operations - Mine Safety Disclosures are not applicable to the company[149] Item 5. Other Information. This section reports no new trading arrangements by officers and notes a new executive appointment - No Rule 10b5-1 or non-Rule 10b5-1 trading arrangements were adopted or terminated by directors or officers during the quarter[150] - Michelle Kley was appointed Chief Legal Officer and Corporate Secretary on June 3, 2025, and granted an interest representing 25,000 Founder Shares[151] Item 6. Exhibits. This section lists all exhibits filed as part of the report, including key agreements and certifications - The report includes various exhibits such as the Underwriting Agreement, Amended and Restated Memorandum and Articles of Association, Share Rights Agreement, Investment Management Trust Agreement, Registration Rights Agreement, Private Placement Units Purchase Agreements, Letter Agreement, Form of Indemnity Agreement, and Administrative Services Agreement[154] - Certifications of the Principal Executive Officer and Principal Financial Officer pursuant to the Sarbanes-Oxley Act of 2002 are also filed[154] SIGNATURES The report is officially signed by the Chief Executive Officer and Chief Financial Officer - The report was signed on August 8, 2025[159] - Signatories include Andrew B. Lipsher (Chief Executive Officer) and Vincent T. Cubbage (Chief Financial Officer)[159]