ChampionsGate Acquisition Corp Unit(CHPGU) - 2025 Q2 - Quarterly Report

PART I – FINANCIAL INFORMATION Item 1. FINANCIAL STATEMENTS (UNAUDITED) Presents unaudited financial statements, including Balance Sheets, Statements of Operations, Cash Flows, and notes for interim periods BALANCE SHEETS (UNAUDITED) Balance Sheet Highlights | Item | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | Total Assets | $75,900,620 | $295,105 | | Investments held in Trust Account | $75,372,084 | $0 | | Total Liabilities | $1,933,637 | $489,046 | | Shareholders' Deficit | $(1,405,101) | $(193,941) | STATEMENT OF OPERATIONS (UNAUDITED) Statements of Operations (Unaudited) | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Period From March 27, 2024 (Inception) Through June 30, 2024 | | :------------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :---------------------------------------------------------------- | | Formation and operating costs | $162,486 | $32,717 | $279,813 | $32,772 | | Stock compensation expense | $155,904 | $31,905 | $155,904 | $31,905 | | Loss from operations | $(318,390) | $(64,622) | $(435,717) | $(64,677) | | Interest and dividend income on investments held in Trust Account | $248,334 | $0 | $248,334 | $0 | | Net loss | $(70,056) | $(64,622) | $(187,383) | $(64,677) | STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (DEFICIT) (UNAUDITED) Changes in Shareholders' Equity (Deficit) | Item | Balance as of Dec 31, 2024 | Balance as of June 30, 2025 | | :------------------------------------------------ | :------------------------- | :-------------------------- | | Total Shareholders' Deficit | $(193,941) | $(1,405,101) | | Net loss (Jan 1 - Mar 31, 2025) | - | $(117,327) | | Sale of private placement units | - | $2,300,000 | | Issuance of representative shares | - | $293,020 | | Fair value of rights included in public units | - | $2,441,833 | | Initial measurement of carrying value to redemption value | - | $(5,951,047) | | Remeasurement of carrying value to redemption value | - | $(248,334) | | Stock compensation expense | - | $155,904 | | Related parties debt forgiveness | - | $108,602 | | Conversion of Class B shares to Class A shares | - | $0 | | Net loss (Apr 1 - Jun 30, 2025) | - | $(70,056) | STATEMENT OF CASH FLOWS (UNAUDITED) Statements of Cash Flows (Unaudited) | Item | Six Months Ended June 30, 2025 | Period From March 27, 2024 (Inception) Through June 30, 2024 | | :------------------------------------------------ | :----------------------------- | :---------------------------------------------------------------- | | Net Cash Used in Operating Activities | $(400,679) | $(51,962) | | Net Cash Used in Investing Activity | $(75,123,750) | $0 | | Net Cash Provided by Financing Activities | $75,907,630 | $51,962 | | Net Change in Cash | $383,201 | $0 | | Cash, end of period | $383,204 | $0 | NOTES TO UNAUDITED FINANCIAL STATEMENTS Note 1 — Organization, Business Operation and Going Concern Consideration Outlines the company's blank check formation, IPO, private placement, and going concern doubts due to costs and business combination deadline - The Company is a blank check company incorporated in the Cayman Islands on March 27, 2024, for the purpose of effecting a business combination[21] - On May 29, 2025, the Company consummated its Initial Public Offering (IPO) of 7,475,000 units at $10.00 per unit, generating total gross proceeds of $74,750,000[25] - Simultaneously with the IPO, the Company consummated a Private Placement of 230,000 units to ST Sponsor Investment LLC at $10.00 per unit, generating total proceeds of $2,300,000[26] - The Company's ability to continue as a going concern is in substantial doubt due to expected significant acquisition costs and the requirement to complete a Business Combination within a specified deadline[35] Note 2 — Significant Accounting Policies Details significant accounting policies for unaudited financial statements, including US GAAP, emerging growth company status, and trust account investments - The unaudited financial statements are presented in conformity with US GAAP and SEC rules and regulations[37] - 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[38][39] Investments Held in Trust Account | Date | Value | | :---------------- | :------------ | | June 30, 2025 | $75,372,084 | | December 31, 2024 | $0 | These investments are primarily in money market funds and are presented at fair value (Level 1)[42][50] - Class A ordinary shares subject to possible redemption are classified as temporary equity and adjusted to redemption value at the end of each reporting period[52] Stock Compensation Expense | Period | Amount | | :-------------------------------- | :------- | | Three months ended June 30, 2025 | $155,904 | | Six months ended June 30, 2025 | $155,904 | | Three months ended June 30, 2024 | $31,905 | | Inception through June 30, 2024 | $31,905 | Note 3 — Initial Public Offering Details the May 29, 2025 IPO, including the sale of 7,475,000 units at $10.00 each, and the unit composition of Class A shares and Rights - On May 29, 2025, the Company sold 7,475,000 Units in its IPO, including 975,000 Units from the full exercise of the over-allotment option[61] - Each Unit was offered at $10.00 and consists of one Class A ordinary share and one Right, with each Right entitling the holder to one-eighth of one Class A ordinary share upon completion of the initial Business Combination[61] Note 4 — Private Placement Describes the private placement where Sponsor HoldCo purchased 230,000 units at $10.00 each, with transfer restrictions until business combination completion - Sponsor HoldCo purchased 230,000 Private Placement Units at $10.00 per unit, for an aggregate purchase price of $2,300,000, simultaneously with the IPO closing[62] - Each Private Placement Unit is identical to the Units sold in the IPO, except they are not redeemable, transferable, assignable, or salable by Sponsor HoldCo until the completion of the initial Business Combination[62] Note 5 — Related Party Transactions Outlines related party transactions, including Class B share issuance, Sponsor promissory notes, and CEO/CFO compensation with debt forgiveness - Initially, 2,156,250 Class B ordinary shares were issued to the Sponsor for $25,000. On April 30, 2025, the Sponsor surrendered 4,507,258 insider shares[63] - On May 21, 2025, Sponsor HoldCo converted 800,000 Class B ordinary shares to Class A ordinary shares on a one-for-one basis[63] Promissory Note - Related Party | Date | Outstanding Balance | | :---------------- | :------------------ | | June 30, 2025 | $426,975 | | December 31, 2024 | $331,927 | The Promissory Note from the Sponsor is non-interest bearing, unsecured, and was due by August 31, 2025, or upon IPO consummation[67] - Amendments to CEO and CFO offer letters effective May 11, 2025, revised compensation terms, and accrued salary expenses of $108,602 were adjusted to additional paid-in capital as related parties debt forgiveness[72][73][74] Note 6 — Commitments and Contingencies Outlines commitments and contingencies, including underwriter registration rights, IPO cash discount, and deferred underwriting commission upon business combination - Holders of insider shares, Private Placement Units, and Working Capital Loans will be entitled to registration rights[75] - The underwriter received a cash underwriting discount of $0.10 per Unit ($747,500) at the IPO closing[76] - A deferred underwriting commission of $0.20 per Unit ($1,495,000) is payable upon completion of the initial Business Combination; this fee will be forfeited if the Company liquidates without completing a Business Combination[78] - The Company issued 112,125 Class A ordinary shares (Representative Shares) to the underwriter for no consideration, with an estimated fair value of $293,020[77] Note 7 — Shareholder's Equity Outlines authorized and outstanding Preference, Class A, and Class B Ordinary Shares, and Rights, including Class B share changes and public/private Rights - The Company is authorized to issue 5,000,000 Preference shares ($0.0001 par value), with none issued or outstanding as of June 30, 2025, and December 31, 2024[79] - As of June 30, 2025, there were 1,142,125 Class A ordinary shares ($0.0001 par value) issued and outstanding (excluding 7,475,000 shares subject to possible redemption)[80] Class B Ordinary Shares Issued and Outstanding | Date | Shares | | :---------------- | :------- | | June 30, 2025 | 1,370,161 | | December 31, 2024 | 2,170,161 | Changes reflect issuance, transfer, forfeiture, and conversion to Class A shares[81] Rights Outstanding as of June 30, 2025 | Type | Number | | :---------------- | :------- | | Public Rights | 7,475,000 | | Private Rights | 230,000 | Each Right entitles the holder to one-eighth of one Class A ordinary share upon completion of the initial Business Combination[82] Note 8 — Segment Information States the company operates as a single segment, with the CEO as CODM, reviewing operating results for resource allocation and performance assessment - The Company has determined it has only one operating segment, with the Chief Executive Officer identified as the Chief Operating Decision Maker (CODM)[84] - The CODM reviews operating results for the Company as a whole, including formation and operating costs, to make decisions about resource allocation and performance assessment[84][85] Note 9 — Subsequent Events Outlines subsequent events, including promissory note repayment, working capital loan transfer, and the resignation of Chairman, CEO, and Director - On July 7, 2025, the Company repaid $350,000 of the Promissory Note to the Sponsor and transferred the remaining balance of $76,975 to the Working Capital Loan[88] - On July 31, 2025, Mr. Bala Padmakumar resigned from all his positions as Chairman, CEO, and Director of the Company, effective immediately[89] Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Management's discussion of financial condition and results, focusing on blank check status, IPO, recent developments, net losses, and liquidity management Overview - ChampionsGate Acquisition Corporation is a blank check company formed to effect a business combination[92] - The Company has not selected any specific business combination target and has not initiated substantive discussions with any target[92] - The Company expects to incur significant costs in pursuit of its acquisition plans and cannot assure success[92] Our Initial Public Offering - On May 29, 2025, the Company consummated its IPO of 7,475,000 units at $10.00 per unit, generating gross proceeds of $74,750,000[93] - Simultaneously, a Private Placement of 230,000 units to Sponsor HoldCo generated $2,300,000[93] - A total of $75,123,750 from the IPO and Private Placement net proceeds was deposited into a trust account[93] - The Company issued 112,125 Class A ordinary shares as Representative Shares to the underwriter[94] Recent Development - On July 31, 2025, Mr. Bala Padmakumar resigned from all his positions as Chairman, CEO, and Director of the Company, effective immediately[97] - Mr. Padmakumar received all monthly compensation payments up to his resignation date, and his Offer Letter was terminated[98] Results of Operations - The Company has not engaged in any operations or generated any revenues to date, with activities limited to organizational efforts and preparing for/identifying a target for a Business Combination[99] Net Loss Summary | Period | Net Loss | Interest and Dividend Income | | :------------------------------- | :--------- | :--------------------------- | | Three months ended June 30, 2025 | $(70,056) | $248,334 | | Three months ended June 30, 2024 | $(64,622) | $0 | | Six months ended June 30, 2025 | $(187,383) | $248,334 | | Inception through June 30, 2024 | $(64,677) | $0 | Liquidity and Capital Resources - Following the IPO and Private Placement on May 29, 2025, $75,123,750 was placed in the trust account, and $464,339 cash was held outside for working capital[103] Liquidity Snapshot (June 30, 2025) | Item | Amount | | :-------------------- | :--------- | | Cash | $383,204 | | Working Capital | $73,117 | | Trust Account Balance | $75,372,084 | - Cash provided by financing activities for the six months ended June 30, 2025, was $75,907,630, primarily from the public offering and private placement[109] - Sponsor HoldCo may loan the Company up to $500,000 for working capital needs, convertible into private units at $10.00 per unit upon business combination[115] - On July 7, 2025, $350,000 of the promissory note was repaid, and the remaining $76,975 was transferred to the working capital loan[118] Off-Balance Sheet Arrangements; Commitments and Contractual Obligations; Quarterly Results - As of June 30, 2025, the Company did not have any off-balance sheet arrangements or contractual obligations (other than those disclosed in the notes)[120] - No unaudited quarterly operating data is included as the Company has not conducted any operations to date[120] Contractual Obligations - Holders of insider shares, Private Placement Units, and Working Capital Units are entitled to registration rights[121] - The underwriters are entitled to a deferred fee of $1,495,000 ($0.20 per Unit) upon the consummation of a Business Combination[122] Critical Accounting Policies and Estimates - The preparation of financial statements requires management to make estimates and assumptions, which may differ from actual results[123] - Making estimates requires management to exercise significant judgment[123] Recent Accounting Pronouncements - Management does not believe that any recently issued, but not effective, accounting standards would have a material effect on the unaudited financial statements if currently adopted[124] Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK As a smaller reporting company, the company is not required to provide quantitative and qualitative disclosures about market risk - The Company is a smaller reporting company and is not required to provide quantitative and qualitative disclosures about market risk[125] Item 4. CONTROLS AND PROCEDURES Management evaluated disclosure controls and procedures as effective, acknowledging inherent limitations, with no material changes in internal control Evaluation of Disclosure Controls and Procedures - The Company's chief executive officer and chief financial officer concluded that disclosure controls and procedures were effective as of June 30, 2025[126] - Disclosure controls and procedures provide reasonable, not absolute, assurance and have inherent limitations[127] - An attestation report of internal controls from the independent registered public accounting firm is not included due to the Company's status as an emerging growth company[128] Changes in Internal Control Over Financial Reporting - There have been no changes in the Company's internal control over financial reporting during the fiscal quarter covered by this report that have materially affected, or are reasonably likely to materially affect, internal control over financial reporting[129] PART II – OTHER INFORMATION Item 1. LEGAL PROCEEDINGS The company is not a party to any material legal proceedings, nor have any been threatened against it - The Company is not a party to any material legal proceedings, and no material legal proceedings have been threatened by or against the Company[131] Item 1A. RISK FACTORS As a smaller reporting company, the company refers to Prospectus risk factors, with no material changes in this report - As a smaller reporting company, the Company is not required to include risk factors in this Report[132] - Factors that could cause actual results to differ materially are described in the Company's Prospectus, and no material changes to these risk factors have occurred as of the date of this Quarterly Report[132] Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS FROM REGISTERED SECURITIES Details the private sale of 230,000 Private Units to Sponsor HoldCo, exempt from registration, and the use of IPO/private placement proceeds in a Trust Account Unregistered Sales of Equity Securities - On May 29, 2025, the Company completed the private sale of 230,000 Private Units to ST Sponsor Investment LLC (Sponsor HoldCo) for $10.00 per unit, generating gross proceeds of $2,300,000[133] - These sales were issued pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act[134] Use of Proceeds - The net proceeds of $75,123,750 from the IPO ($74,750,000) and Private Placement ($2,300,000) were placed in a Trust Account for the benefit of the Company's public shareholders and underwriters[135][136] Item 3. DEFAULTS UPON SENIOR SECURITIES The company reports no defaults upon senior securities - There are no defaults upon senior securities[137] Item 4. MINE SAFETY DISCLOSURES This item is not applicable to the company - Mine Safety Disclosures are not applicable to the Company[138] Item 5. OTHER INFORMATION Discloses the passing of Mr. Sunny Kah Wei Tan, a Sponsor director, vacating his positions and restricting rights until a court-appointed executor - On August 12, 2025, Mr. Sunny Kah Wei Tan, director of the Sponsor and manager of the Sponsor LLC, passed away[139] - His passing vacates his positions and restricts the exercise of rights until an executor or administrator is appointed by a Cayman Islands court[139] Item 6. EXHIBITS Lists exhibits filed with this Quarterly Report on Form 10-Q, including certifications and XBRL documents - The exhibits filed include certifications of principal executive and financial officers (31.1, 31.2, 32.1, 32.2) and various Inline XBRL Taxonomy Extension documents (101.INS, 101.CAL, 101.SCH, 101.DEF, 101.LAB, 101.PRE, 104)[141] SIGNATURES The report was signed on August 15, 2025, by Evan M. Graj, Chief Financial Officer (Principal Executive Officer and Principal Financial Officer) of ChampionsGate Acquisition Corporation