Jaws Mustang Acquisition (JWSM) - 2025 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION Item 1. Condensed Interim Financial Statements This section presents the unaudited condensed financial statements for JAWS MUSTANG ACQUISITION CORPORATION, including the balance sheets, statements of operations, changes in shareholders' deficit, and cash flows, along with detailed notes explaining the company's organization, accounting policies, related party transactions, commitments, and fair value measurements Condensed Balance Sheets Condensed Balance Sheets (Unaudited) | ASSETS | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash | $38,297 | $319,207 | | Prepaid expenses | $22,971 | $18,910 | | Total Current Assets | $61,268 | $338,117 | | Cash held in Trust Account | $1,049,122 | $1,035,353 | | TOTAL ASSETS | $1,110,390 | $1,373,470 | | LIABILITIES, CLASS A ORDINARY SHARES SUBJECT TO POSSIBLE REDEMPTION AND SHAREHOLDERS' DEFICIT | | | | Accrued expenses | $1,395,847 | $1,391,149 | | Advance from related parties | $1,485,000 | $1,485,000 | | Total Current Liabilities | $2,880,847 | $2,876,149 | | Promissory notes - related party | $1,400,000 | $1,400,000 | | Working capital loan - related party | $500,000 | $500,000 | | Warrant liabilities | $1,116,750 | $1,116,750 | | Total Liabilities | $5,897,597 | $5,892,899 | | Class A ordinary shares subject to possible redemption | $1,049,122 | $1,035,353 | | Total Shareholders' Deficit | $(5,836,329) | $(5,554,782) | | TOTAL LIABILITIES, CLASS A ORDINARY SHARES SUBJECT TO POSSIBLE REDEMPTION AND SHAREHOLDERS' DEFICIT | $1,110,390 | $1,373,470 | Unaudited Condensed Statements of Operations Unaudited Condensed Statements of Operations | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | General and administrative expenses | $138,996 | $272,570 | $281,547 | $906,450 | | Loss from operations | $(138,996) | $(272,570) | $(281,547) | $(906,450) | | Interest earned on cash and investments held in trust account | $6,945 | $147,343 | $13,769 | $321,819 | | Change in fair value of warrant liabilities | $372,250 | $4,467,000 | $0 | $(2,233,500) | | Other income (loss), net | $379,195 | $4,614,343 | $13,769 | $(1,911,681) | | Net income (loss) | $240,199 | $4,341,773 | $(267,778) | $(2,818,131) | | Basic and diluted net income (loss) per share, Class A ordinary shares redeemable shares | $0.01 | $0.16 | $(0.01) | $(0.10) | | Basic and diluted net income (loss) per share, non redeemable Class A and Class B ordinary shares | $0.01 | $0.16 | $(0.01) | $(0.10) | Unaudited Condensed Statements of Changes in Shareholders' Deficit Unaudited Condensed Statements of Changes in Shareholders' Deficit | Item | December 31, 2024 | March 31, 2025 | June 30, 2025 | | :--- | :--- | :--- | :--- | | Balance — Shareholders' Deficit | $(5,554,782) | $(6,069,583) | $(5,836,329) | | Accretion for Class A ordinary shares subject to possible redemption | - | $(6,824) | $(6,945) | | Net loss (income) | $(507,977) | $(507,977) | $240,199 | Unaudited Condensed Statements of Changes in Shareholders' Deficit (Prior Year) | Item | January 1, 2024 | March 31, 2024 | June 30, 2024 | | :--- | :--- | :--- | :--- | | Balance — Shareholders' Deficit | $(6,432,250) | $(13,816,631) | $(9,697,200) | | Accretion for Class A ordinary shares subject to possible redemption | - | $(224,477) | $(222,342) | | Net loss (income) | $(7,159,904) | $(7,159,904) | $4,341,773 | Unaudited Condensed Statements of Cash Flows Unaudited Condensed Statements of Cash Flows (Six Months Ended June 30) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net loss | $(267,778) | $(2,818,131) | | Net cash used in operating activities | $(280,910) | $(382,900) | | Net cash provided by investing activities | $0 | $7,537,572 | | Net cash used in financing activities | $0 | $(7,302,572) | | Net Change in Cash | $(280,910) | $(147,900) | | Cash - Beginning of the period | $319,207 | $178,119 | | Cash - End of the period | $38,297 | $30,219 | Notes to Unaudited Condensed Financial Statements NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS - The Company is a blank check company incorporated on October 19, 2020, for the purpose of effecting a Business Combination with one or more businesses[22] - The Company consummated its IPO on February 4, 2021, selling 103,500,000 units at $10.00 per unit, generating gross proceeds of $1,035,000,000[25] - Simultaneously with the IPO, the Company sold 11,350,000 Private Placement Warrants to Mustang Sponsor LLC for $22,700,000[26] - Following the IPO, $1,035,000,000 was placed in a Trust Account and invested in U.S. government securities[28] - The deadline to complete a Business Combination has been extended multiple times, most recently to September 4, 2025, with potential for further extensions until December 4, 2026[38][39] - In connection with extension votes, significant Class A ordinary shares were redeemed: $1,032,028,964 on Feb 1, 2023; $7,662,572 on Feb 2, 2024; and $15,111,008 on Nov 26, 2024[34][37][60][61] - As of June 30, 2025, the Company had operating cash of $38,297 and a working capital deficit of $2,819,579, raising substantial doubt about its ability to continue as a going concern if a Business Combination is not consummated[44][49][50] NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - The unaudited interim condensed financial statements are prepared in accordance with U.S. GAAP and SEC rules, with certain information condensed or omitted for interim reporting[51] - Class A ordinary shares subject to possible redemption are classified as temporary equity due to redemption rights outside the Company's control[58] - Public Warrants and Private Placement Warrants are classified as liabilities and measured at fair value, with changes recognized in the unaudited condensed statements of operations[66] - The Company is an exempted Cayman Islands company and is not subject to income taxes in the Cayman Islands or the United States; its tax provision was zero for the periods presented[68] - Net income (loss) per ordinary share is computed by dividing net income (loss) by the weighted average number of ordinary shares outstanding; warrants are not considered dilutive[69][70] NOTE 3. INITIAL PUBLIC OFFERING - The Company sold 103,500,000 Units at $10.00 per Unit, each consisting of one Class A ordinary share and one-fourth of one Public Warrant[76] NOTE 4. PRIVATE PLACEMENT - The Sponsor purchased 11,350,000 Private Placement Warrants at $2.00 per warrant, generating $22,700,000[77] - Proceeds from Private Placement Warrants were added to the Trust Account and will be used to fund Public Share redemption if a Business Combination is not completed[77] NOTE 5. RELATED PARTY TRANSACTIONS - The Sponsor acquired 25,875,000 Founder Shares (Class B ordinary shares) for $25,000[78] - On February 6, 2024, the Sponsor converted 25,500,000 Class B ordinary shares into Class A ordinary shares[80] - The Company pays an affiliate of the Sponsor a monthly fee of $10,000 for administrative services[81] - Working Capital Loans from related parties totaled $500,000 outstanding as of June 30, 2025 and December 31, 2024, which are non-interest bearing and convertible into warrants[82][84] - Promissory notes from related parties (August 2023 Note, March 2024 Note, October 2024 Note) totaled $1,400,000 outstanding as of June 30, 2025 and December 31, 2024, all non-interest bearing[85][86][87] - An advance from a related party of $1,485,000 was made by the Sponsor on October 2, 2024, for expenses[90] NOTE 6. COMMITMENTS AND CONTINGENCIES - Holders of Founder Shares, Private Placement Warrants, and Working Capital Loan warrants are entitled to registration rights[91] - The initial deferred underwriting fee of $36,225,000 has been fully waived by BofA Securities, Goldman Sachs & Co. LLC, and Credit Suisse Securities (USA) LLC, resulting in no deferred underwriting fees payable as of June 30, 2025[92][93][94][95] - The Company has a cost-sharing agreement, making it responsible for 55.4% of expenses from agreed-upon third-party advisors for a Business Combination, with $747,900 accrued as of June 30, 2025[96] NOTE 7. CLASS A ORDINARY SHARES SUBJECT TO POSSIBLE REDEMPTION - As of June 30, 2025 and December 31, 2024, there were 89,480 Class A ordinary shares issued and outstanding subject to possible redemption, presented as temporary equity[97] NOTE 8. SHAREHOLDERS' DEFICIT - The Company is authorized to issue 1,000,000 preference shares, but none were issued or outstanding as of June 30, 2025 and December 31, 2024[98] - As of June 30, 2025 and December 31, 2024, there were 25,589,480 Class A ordinary shares issued and outstanding (including 89,480 redeemable and 25,500,000 non-redeemable)[99] - As of June 30, 2025 and December 31, 2024, there were 375,000 Class B ordinary shares issued and outstanding[100] - Class B ordinary shares automatically convert into Class A ordinary shares at the time of a Business Combination, ensuring Founder Shares equal 20% of total outstanding ordinary shares post-IPO and equity-linked securities[103] NOTE 9. WARRANT LIABILITIES - As of June 30, 2025 and December 31, 2024, there were 11,350,000 Private Placement Warrants and 25,875,000 Public Warrants outstanding, exercisable for a total of 37,225,000 Class A ordinary shares[104] - Public Warrants become exercisable on the later of 30 days after a Business Combination or one year from the IPO closing, and expire five years from Business Combination completion or earlier upon redemption/liquidation[104] - The Company may redeem warrants at $0.01 per warrant if the Class A ordinary share closing price equals or exceeds $18.00 for 20 trading days within a 30-day period[107][110] - The Company may redeem warrants at $0.10 per warrant if the Class A ordinary share closing price equals or exceeds $10.00 for 20 trading days within a 30-day period, with holders able to exercise on a cashless basis[108][111] - Public Warrants may expire worthless if the Company fails to complete a Business Combination within the Combination Period[108] NOTE 10. FAIR VALUE MEASUREMENTS - The Company uses a fair value hierarchy (Level 1, 2, 3) to classify assets and liabilities based on observable and unobservable inputs[113][116] - Public Warrants were valued using publicly listed trading prices (Level 1 or 2); they transferred from Level 1 to Level 2 during Q1 2024, back to Level 1 in Q2 2024, and to Level 2 in Q2 2025 due to limited trade volume[114][117] - Private Placement Warrants are valued equivalently to Public Warrants but are classified as Level 2 due to not being actively traded[115][117] Warrant Liabilities Fair Value (June 30, 2025 & December 31, 2024) | Description | Level | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | :--- | | Warrant Liability – Public Warrants | 2 | $776,250 | $776,250 | | Warrant Liability – Private Placement Warrants | 2 | $340,500 | $340,500 | NOTE 11. SEGMENT REPORTING - The Company operates as a single reportable segment, with the Chief Executive Officer identified as the Chief Operating Decision Maker (CODM)[119] - The CODM reviews key metrics such as Trust Account balance, cash, general and administrative expenses, and interest earned on the Trust Account to assess performance and allocate resources[120][121] NOTE 12. SUBSEQUENT EVENTS - No subsequent events requiring adjustment or disclosure were identified up to the date the unaudited condensed financial statements were issued[123] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on the Company's financial condition and results of operations, highlighting its status as a blank check company, recent delisting, extension of the Business Combination deadline, and the primary drivers of its net income/loss, liquidity, and going concern considerations Overview - The Company is a blank check company formed to effect a Business Combination[127] - The Company was delisted from NYSE American on November 1, 2024, and its securities are now quoted on the OTC Pink Open Market[130][131] - The Business Combination deadline was extended to September 4, 2025, with the possibility of further monthly extensions until December 4, 2026[133] Results of Operations - The Company has not generated operating revenues to date; its income is primarily non-operating interest income from the Trust Account[134] Net Income (Loss) Summary | Period | Net Income (Loss) 2025 | Net Income (Loss) 2024 | | :--- | :--- | :--- | | Three months ended June 30 | $240,199 | $4,341,773 | | Six months ended June 30 | $(267,778) | $(2,818,131) | - Key factors affecting net income/loss include general and administrative expenses, interest earned on the Trust Account, and changes in the fair value of warrant liabilities[135][136][137] Liquidity and Capital Resources - Following the IPO and private placement, $1,035,000,000 was placed in the Trust Account[139] Cash Position (June 30, 2025) | Item | Amount | | :--- | :--- | | Cash held in Trust Account | $1,049,122 | | Operating cash | $38,297 | - Cash used in operating activities for the six months ended June 30, 2025, was $280,910[140] - The Company relies on loans from its Sponsor or affiliates to fund working capital deficiencies and transaction costs, including $500,000 outstanding under working capital loans and $1,400,000 under promissory notes as of June 30, 2025[144][145][146][147] Going Concern - The Company's liquidity condition raises substantial doubt about its ability to continue as a going concern if a Business Combination is not consummated by September 4, 2025 (or up to December 4, 2026 with all extensions)[148][149] - If a Business Combination is not completed by the deadline, there will be a mandatory liquidation and dissolution of the Company[149] Off-Balance Sheet Arrangements - The Company has no off-balance sheet arrangements as of June 30, 2025[150] Contractual Obligations - The Company has a monthly fee of $10,000 payable to an affiliate of an executive officer for administrative services[151] - All deferred underwriting fees, initially $36,225,000, have been waived by the underwriters, resulting in no deferred fees payable[152][153][154] Critical Accounting Policies and Estimates - Ordinary shares subject to possible redemption are classified as temporary equity and adjusted to redemption value at each reporting period[156][157] - Net income (loss) per ordinary share is computed by dividing net income (loss) by the weighted average number of ordinary shares outstanding, with accretion for redeemable shares excluded[158] - Public and Private Placement Warrants are recognized as derivative liabilities at fair value, with changes in fair value recognized in the unaudited condensed statements of operations[159][160] Recent Accounting Standards - Management does not believe that any recently issued, but not yet effective, accounting standards would have a material effect on the Company's unaudited condensed financial statements[161] Item 3. Quantitative and Qualitative Disclosures About Market Risk The Company assesses its market and interest rate risk, concluding that it has no material exposure due to its investment strategy in short-term U.S. government securities or money market funds - As of June 30, 2025, the Company was not subject to any material market or interest rate risk[162] - Net proceeds from the IPO, including amounts in the Trust Account, are invested in short-term U.S. government securities or money market funds[162] Item 4. Controls and Procedures The Company's management, including the CEO and CFO, evaluated the effectiveness of its disclosure controls and procedures, concluding they were effective as of June 30, 2025, with no material changes in internal control over financial reporting - The Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures were effective as of June 30, 2025[164] - There were no material changes in the Company's internal control over financial reporting during the most recent fiscal quarter[165] PART II. OTHER INFORMATION Item 1. Legal Proceedings The Company reports that there are no legal proceedings to disclose - No legal proceedings to report[168] Item 1A. Risk Factors The Company refers to the risk factors detailed in its Annual Report on Form 10-K and confirms no material changes to these risks as of the current report date - No material changes to the risk factors disclosed in the Company's Annual Report on Form 10-K[169] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds The Company states that there were no unregistered sales of equity securities or use of proceeds to report during the period - No unregistered sales of equity securities or use of proceeds to report[170] Item 3. Defaults Upon Senior Securities The Company reports no defaults upon senior securities - No defaults upon senior securities to report[171] Item 4. Mine Safety Disclosures The Company states that there are no mine safety disclosures - No mine safety disclosures to report[171] Item 5. Other Information The Company reports that there is no other information to disclose - No other information to report[172] Item 6. Exhibits This section lists all exhibits filed with or incorporated by reference into the Quarterly Report on Form 10-Q, including certifications and XBRL documents Exhibits Filed | No. | Description of Exhibit | | :--- | :--- | | 3.1 | Amended and Restated Memorandum and Articles of Association (1) | | 3.2 | Amendment to Amended and Restated Memorandum and Articles of Association (2) | | 31.1* | Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rules 13a-14(a) | | 31.2* | Certification of Principal Financial Officer Pursuant to Securities Exchange Act Rules 13a-14(a) | | 32.1** | Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350 | | 32.2** | Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350 | | 101.INS* | Inline XBRL Instance Document | | 101.SCH* | Inline XBRL Taxonomy Extension Schema Document | | 101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document | | 101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Document | | 101.LAB* | Inline XBRL Taxonomy Extension Label Linkbase Document | | 101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document | | 104** | Cover Page Interactive Data File | PART III. SIGNATURE Signature The report is officially signed by the Chief Financial Officer of JAWS MUSTANG ACQUISITION CORPORATION, affirming its submission in accordance with Exchange Act requirements - The report was signed by Michael Reidler, Chief Financial Officer of JAWS MUSTANG ACQUISITION CORPORATION, on August 11, 2025[181]