A Paradise Acquisition Corp Unit(APADU) - 2025 Q2 - Quarterly Report

PART I – FINANCIAL INFORMATION This section presents the unaudited condensed financial statements and related disclosures for A Paradise Acquisition Corp. Item 1. Unaudited Condensed Financial Statements This section presents the unaudited condensed financial statements for A Paradise Acquisition Corp., including the balance sheets, statements of operations, changes in shareholders' deficit, and cash flows for the periods ended June 30, 2025, and December 31, 2024. It also includes detailed notes explaining the company's organization, significant accounting policies, and specific financial transactions related to its IPO and related party activities. Condensed Balance Sheets Presents the company's financial position, detailing assets, liabilities, and shareholder's deficit as of June 30, 2025, and December 31, 2024. | Metric | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :----------------------------- | :-------------------------- | :-------------------------- | | ASSETS | | | | Prepaid expenses | $1,200 | $2,400 | | Deferred offering costs | $95,569 | $22,817 | | Total Assets | $96,769 | $25,217 | | LIABILITIES | | | | Accrued expenses | $32,171 | $30,070 | | Due to related party | $57,922 | — | | Promissory note - related party| $300,000 | $235,806 | | Total Liabilities | $390,093 | $265,876 | | SHAREHOLDER'S DEFICIT | | | | Additional paid-in capital | $25,000 | $25,000 | | Accumulated deficit | $(318,324) | $(265,659) | | Total Shareholder's Deficit | $(293,324) | $(240,659) | | Total Liabilities and Shareholder's Deficit | $96,769 | $25,217 | Unaudited Condensed Statements of Operations Details the company's financial performance, including general administrative expenses and net loss for the three and six months ended June 30, 2025, and 2024. | Metric | Three Months Ended June 30, 2025 ($) | Three Months Ended June 30, 2024 ($) | Six Months Ended June 30, 2025 ($) | Six Months Ended June 30, 2024 ($) | | :----------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | General administrative expenses | $18,065 | $— | $52,665 | $8,000 | | Loss before tax expense | $(18,065) | $— | $(52,665) | $(8,000) | | Net loss | $(18,065) | $— | $(52,665) | $(8,000) | | Basic and diluted net loss per ordinary share | $(0.00) | $— | $(0.01) | $(0.00) | Unaudited Condensed Statements of Changes in Shareholders' Deficit Outlines changes in the company's shareholder's deficit, including net loss and share movements, for periods ended June 30, 2025, and 2024. | Metric | Balance as of Jan 1, 2025 ($) | Net Loss (Jan-Mar 2025) ($) | Balance as of Mar 31, 2025 ($) | Net Loss (Apr-Jun 2025) ($) | Balance as of Jun 30, 2025 ($) | | :----------------------------- | :------------------------ | :---------------------- | :------------------------- | :---------------------- | :------------------------- | | Class B Ordinary Shares (Shares) | 7,666,667 | — | 7,666,667 | — | 7,666,667 | | Class B Ordinary Shares (Amount) | $— | — | $— | — | $— | | Additional paid-in capital | $25,000 | — | $25,000 | — | $25,000 | | Accumulated deficit | $(265,659) | $(34,600) | $(300,259) | $(18,065) | $(318,324) | | Total Shareholder's Deficit | $(240,659) | $(34,600) | $(275,259) | $(18,065) | $(293,324) | | Metric | Balance as of Jan 1, 2024 ($) | Net Loss (Jan-Mar 2024) ($) | Balance as of Mar 31, 2024 ($) | Net Loss (Apr-Jun 2024) ($) | Balance as of Jun 30, 2024 ($) | | :----------------------------- | :------------------------ | :---------------------- | :------------------------- | :---------------------- | :------------------------- | | Class B Ordinary Shares (Shares) | 7,666,667 | — | 7,666,667 | — | 7,666,667 | | Class B Ordinary Shares (Amount) | $— | — | $— | — | $— | | Additional paid-in capital | $25,000 | — | $25,000 | — | $25,000 | | Accumulated deficit | $(190,097) | $(8,000) | $(198,097) | — | $(198,097) | | Total Shareholder's Deficit | $(165,097) | $(8,000) | $(173,097) | — | $(173,097) | Unaudited Condensed Statements of Cash Flows Provides an overview of cash inflows and outflows from operating and financing activities for the six months ended June 30, 2025, and 2024. | Cash Flow Activity | Six Months Ended June 30, 2025 ($) | Six Months Ended June 30, 2024 ($) | | :------------------------------------- | :----------------------------- | :----------------------------- | | Net loss | $(52,665) | $(8,000) | | Prepaid expenses (change) | $1,200 | $— | | Accrued expenses (change) | $2,101 | $8,000 | | Net cash used in operating activities | $(49,364) | $— | | Proceeds from promissory note - related party | $122,116 | $— | | Payment of deferred offering costs | $(72,752) | $— | | Net cash provided by financing activities | $49,364 | $— | | Net change in cash and cash equivalents | $— | $— | | Cash and cash equivalents at end of period | $— | $— | - Supplemental non-cash financing activities for the six months ended June 30, 2025, include $64,194 in deferred offering costs paid under the promissory note issued to the Sponsor and $8,558 in deferred offering costs paid under due to related party[21] Notes to Unaudited Condensed Financial Statements Provides detailed explanations and disclosures supporting the unaudited condensed financial statements, covering accounting policies and specific transactions. NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS Describes the company's formation as a blank check company, its purpose, IPO details, and going concern considerations. - A Paradise Acquisition Corp. is a blank check company incorporated on November 9, 2022, in the British Virgin Islands, formed to effect a business combination, primarily targeting the leisure and entertainment sector[24] - As of June 30, 2025, the Company had not commenced operations, with efforts limited to organizational activities, IPO-related activities, and identifying a target for a business combination[25] IPO Details (July 31, 2025): | Item | Value ($) | | :-------------------------------- | :------------------- | | Units Sold | 20,000,000 | | Offering Price per Unit | $10.00 | | Gross Proceeds from IPO | $200,000,000 | | Private Placement Units | 600,000 | | Private Placement Price per Unit | $10.00 | | Gross Proceeds from Private Placement | $6,000,000 | | Total Transaction Costs | $12,645,418 | | Cash Underwriting Fee | $4,000,000 | | Deferred Underwriting Fee | $8,000,000 | | Other Offering Costs | $645,418 | | Funds in Trust Account | $200,000,000 | | Cash held outside Trust Account | $1,848,460 | - The Company must complete a business combination with a target having a fair market value of at least 80% of the net balance in the Trust Account and acquire a controlling interest[31] - The Company has 24 months from the IPO closing (July 31, 2025) to complete a business combination; otherwise, it will redeem public shares and liquidate[34] - As of June 30, 2025, the Company had no cash and a working capital deficit of $388,893, raising substantial doubt about its ability to continue as a going concern due to mandatory liquidation if a business combination is not completed[37][39] NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Outlines the key accounting principles and policies applied in preparing the unaudited condensed financial statements. - The unaudited condensed financial statements are prepared in accordance with U.S. GAAP for interim financial statements and Article 8 of Regulation S-X, with certain information condensed or omitted per SEC rules[42] - The Company is an 'emerging growth company' and has elected to use the extended transition period for complying with new or revised financial accounting standards, which may affect comparability with other public companies[43][44] - Deferred offering costs of $95,569 as of June 30, 2025, and $22,817 as of December 31, 2024, are directly related to the Proposed Public Offering[48] - Class A ordinary shares subject to redemption are classified as temporary equity, and changes in redemption value are recognized immediately[52][54] - The Company's rights are classified as equity under ASC 815[57] - The Company is a British Virgin Islands business company and is not subject to income taxes in the British Virgin Islands or the United States, resulting in a zero tax provision[59][60] Note 3 — Initial Public Offering Details the terms and proceeds of the company's initial public offering completed on July 31, 2025. - On July 31, 2025, the Company sold 20,000,000 Units at $10.00 per Unit, each consisting of one Class A ordinary share and one right to receive one-eighth of one Class A ordinary share upon business combination[65] Note 4 — Private Placement Describes the private placement of units to the Sponsor and CCM, including proceeds and conditions. - Simultaneously with the IPO, the Sponsor and CCM purchased 600,000 Private Placement Units at $10.00 each, generating $6,000,000, with proceeds added to the Trust Account[66] - If a business combination is not completed, proceeds from Private Placement Units will fund public share redemption, and the Private Placement Units will expire worthless[66] Note 5 — Related Party Transactions Discloses transactions and financial arrangements between the company and its related parties, primarily the Sponsor. - The Sponsor acquired 7,666,667 Class B ordinary shares (Founder Shares) for $25,000 in May 2025, with up to 1,000,000 shares subject to forfeiture[67] - As of June 30, 2025, $57,922 was outstanding to the Sponsor for IPO transaction costs, unsecured, interest-free, and due on demand[69] - The Company borrowed $300,000 from the Sponsor via a non-interest bearing, unsecured promissory note as of June 30, 2025, for IPO expenses, up from $235,806 as of December 31, 2024[70] - The Sponsor or affiliates may provide Working Capital Loans up to $1,500,000, convertible into Private Placement Units, to finance transaction costs for a business combination[71] Note 6 — Commitments and Contingencies Details the company's contractual obligations, including registration rights and underwriting fees. - Holders of Founder Shares, Private Placement Units, and Working Capital Loan units are entitled to registration rights, allowing them to demand registration of their securities for resale, subject to lock-up periods[72] - Underwriters have a 45-day option to purchase up to 3,000,000 additional Units for over-allotments[74] - Underwriters received a $4,000,000 cash underwriting discount at IPO closing and are entitled to a deferred fee of up to $8,000,000 (or $9,200,000 if over-allotment exercised) upon completion of a Business Combination[75] Note 7 — Shareholder's Deficit Explains the components of shareholder's deficit, including ordinary shares and rights, and their associated terms. - As of June 30, 2025, and December 31, 2024, there were no Preferred Shares or Class A Ordinary Shares issued or outstanding[76] - As of June 30, 2025, and December 31, 2024, 7,666,667 Class B ordinary shares were issued and outstanding, including up to 1,000,000 shares subject to forfeiture[77] - Class B ordinary shares automatically convert to Class A ordinary shares upon initial Business Combination, subject to anti-dilution adjustments[78] - Prior to the initial Business Combination, only holders of Founder Shares vote on director elections; for other matters, Founder Shares and public shares vote together as a single class[79] - Each right entitles the holder to receive one-eighth of one Class A ordinary share upon consummation of the initial business combination, with no fractional shares issued[80] - If a Business Combination is not completed and the Trust Account is liquidated, holders of rights will not receive any funds and the rights will expire worthless[81] Note 8 — Segment Information Confirms the company operates as a single reportable segment, with key metrics reviewed by management. - The Company has only one operating and reportable segment, as the Chief Executive Officer, Chief Financial Officer, and Chairman (CODM) review operating results for the Company as a whole[83] Key Metrics Reviewed by CODM: | Metric | Three Months Ended June 30, 2025 ($) | Three Months Ended June 30, 2024 ($) | Six Months Ended June 30, 2025 ($) | Six Months Ended June 30, 2024 ($) | | :----------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | General administrative expenses | $18,065 | $— | $52,665 | $8,000 | | Net Loss | $(18,065) | $— | $(52,665) | $(8,000) | Note 9 — Subsequent Events Reports significant events occurring after the balance sheet date, including the consummation of the IPO and related transactions. - On July 31, 2025, the Company consummated its IPO, selling 20,000,000 units at $10.00 each, generating $200,000,000 gross proceeds[86] - Simultaneously with the IPO, the Sponsor and CCM purchased 600,000 Private Placement Units for $6,000,000, and the underwriters were granted a 45-day option for up to 3,000,000 additional Units[87] - Five institutional investors indirectly purchased 130,000 Non-Voting Private Placement Units for $1,300,000, reflecting interests in 1,368,421 Founder Shares[88] 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 operational results, highlighting its status as a blank check company focused on a business combination. It details recent IPO and private placement activities, the resulting financial structure, and the Company's liquidity strategy, while also addressing the going concern considerations due to its pre-revenue status and reliance on completing a business combination. Overview Provides a general description of the company's nature as a blank check company and its objective to complete a business combination. - A Paradise Acquisition Corp. is a blank check company formed on November 9, 2022, to effect a business combination, utilizing IPO and private placement proceeds, debt, or other securities[91] - 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[92] Recent Developments Highlights key events, including the IPO and private placement, and their financial impact on the company. - On July 31, 2025, the Company completed its IPO, selling 20,000,000 units at $10.00 each, generating $200,000,000 gross proceeds[93] - Simultaneously, the Sponsor and CCM purchased 600,000 Private Placement Units for $6,000,000, and 130,000 Non-Voting Private Placement Units were purchased by institutional investors[94][95] - Following the IPO, $200,000,000 was placed in a Trust Account, with $1,848,460 held outside for working capital and expenses[96] - Transaction costs totaled $12,645,418, including a $4,000,000 cash underwriting fee, $8,000,000 deferred underwriting fee, and $645,418 in other offering costs[97] Results of Operations Discusses the company's financial performance, noting the absence of operating revenues and the incurrence of net losses. - The Company has not generated any operating revenues to date, with activities limited to organizational efforts and identifying a business combination target[98] - Non-operating income is expected from interest on marketable securities in the Trust Account[99] Net Loss: | Period | 3 Months Ended June 30, 2025 ($) | 3 Months Ended June 30, 2024 ($) | 6 Months Ended June 30, 2025 ($) | 6 Months Ended June 30, 2024 ($) | | :----------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net Loss | $(18,065) | $0 | $(52,665) | $(8,000) | Liquidity and Capital Resources Examines the company's ability to meet its financial obligations, including its cash position, trust account, and going concern considerations. - Upon IPO and private placement closing on July 31, 2025, $200,000,000 was deposited into the Trust Account, to be invested in U.S. government treasury obligations or money market funds[105] - As of June 30, 2025, the Company had no cash and a working capital deficit of $388,893, with liquidity needs previously met by Sponsor payments and loans[106] - The Sponsor or affiliates may provide Working Capital Loans to fund deficiencies or transaction costs, potentially convertible into Private Placement Units[107] - Management has determined that the Company's pre-revenue status and the mandatory liquidation if a business combination is not completed raise substantial doubt about its ability to continue as a going concern[109] Off-Balance Sheet Arrangements Confirms the absence of any material off-balance sheet arrangements that could affect the company's financial position. - As of June 30, 2025, the Company has no off-balance sheet arrangements, such as unconsolidated entities, financial partnerships, or guaranteed debts[110] Contractual obligations Details the company's commitments, including registration rights and underwriting fees, and the absence of long-term debt. - The Company has no long-term debt, capital lease obligations, operating lease obligations, or long-term liabilities, other than those described in the report[111] - Holders of Founder Shares, Private Placement Units, and Working Capital Loans are entitled to registration rights, allowing them to demand registration of their securities for resale, subject to lock-up periods[112] - Underwriters have a 45-day option to purchase up to 3,000,000 additional Units for over-allotments and are entitled to a deferred fee of up to $8,000,000 (or $9,200,000 if over-allotment exercised) upon completion of a Business Combination[113][114] Critical Accounting Policies States that management has not identified any critical accounting estimates or policies. - Management has not identified any critical accounting estimates or policies[115] Recent Accounting Standards Discusses the adoption of new accounting standards and their expected impact on the financial statements. - The Company adopted ASU 2023-09 (Income Taxes) on January 1, 2025, with no significant impact[116] - The Company adopted ASU No. 2023-07 (Segment Reporting) on January 1, 2024[117] - Management does not believe other recently issued, but not yet effective, accounting standards would materially affect the financial statements if currently adopted[118] Item 3. Quantitative and Qualitative Disclosures Regarding Market Risk As a smaller reporting company, A Paradise Acquisition Corp. is not required to provide quantitative and qualitative disclosures regarding market risk. - The Company, as a smaller reporting company, is exempt from making disclosures under this item[120] Item 4. Controls and Procedures This section details the evaluation of the Company's disclosure controls and procedures, concluding their effectiveness at a reasonable assurance level as of June 30, 2025. It also notes no material changes in internal control over financial reporting during the quarter and acknowledges the inherent limitations of any control system. - Management concluded that the Company's disclosure controls and procedures were effective at a reasonable assurance level as of June 30, 2025[122] - No changes in internal control over financial reporting materially affected, or are reasonably likely to materially affect, the Company's internal control during the quarter ended June 30, 2025[124] - Disclosure controls and procedures, due to inherent limitations and resource constraints, can only provide reasonable, not absolute, assurance[123][125] PART II – OTHER INFORMATION This section provides additional information not covered in the financial statements, including legal proceedings, risk factors, equity sales, and exhibits. Item 1. Legal Proceedings A Paradise Acquisition Corp. is not currently a party to any material litigation or legal proceedings and is unaware of any legal exposures that could have a material adverse effect on its business, financial condition, or results of operations. - The Company is not currently a party to any material litigation or other legal proceedings[128] - The Company is unaware of any legal proceeding, investigation, claim, or other legal exposure with a more than remote possibility of a material adverse effect[128] Item 1A. Risk Factors As a smaller reporting company, A Paradise Acquisition Corp. is not required to provide disclosures regarding risk factors in this quarterly report. - The Company, as a smaller reporting company, is not required to make disclosures under this item[129] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This section details the unregistered sales of equity securities, specifically the private placement units issued to the Sponsor and underwriter, and the use of proceeds from both the IPO and private placement, which were primarily deposited into a Trust Account for the benefit of public shareholders. - On July 31, 2025, the Company consummated its IPO, selling 20,000,000 units at $10.00 per unit, generating gross proceeds of $200,000,000[130] - Simultaneously, 600,000 Private Placement Units were sold to the Sponsor and underwriter at $10.00 per unit, generating $6,000,000, which are not redeemable and have transfer restrictions[131] - A total of $200,000,000 from the IPO and private placement proceeds was deposited into a Trust Account, to be invested in U.S. government treasury bills or money market funds[132] - Transaction costs amounted to $12,645,418, with $1,848,460 held outside the Trust Account for working capital and expenses[133] Item 3. Defaults Upon Senior Securities The Company reported no defaults upon senior securities. - There are no defaults upon senior securities[134] Item 4. Mine Safety Disclosures The Company reported no mine safety disclosures. - There are no mine safety disclosures[134] Item 5. Other Information The Company reported no other information. - No other information is provided in this section[135] Item 6. Exhibits This section lists all exhibits filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q, including key agreements and certifications. - Key exhibits include the Underwriting Agreement, Amended and Restated Memorandum and Articles of Association, Rights Agreement, Letter Agreement, Investment Management Trust Agreement, Registration Rights Agreement, Unit Subscription Agreements, Indemnity Agreement, and various certifications (CEO, CFO)[137] - Many exhibits were previously filed with the Current Report on Form 8-K on July 31, 2025, and are incorporated by reference[138]