Galata Acquisition(LATAU) - 2025 Q4 - Annual Report

IPO and Financing - The company completed its Initial Public Offering (IPO) on September 18, 2025, raising gross proceeds of $172.5 million from the sale of 17,250,000 Units at $10.00 per Unit[23]. - An additional $5.3 million was generated from the private sale of 5,300,000 Private Placement Warrants at $1.00 per warrant[24]. - The total amount of $172.5 million from the IPO and Private Placement has been placed in a Trust Account[25]. - The company has $166,462,500 available for a Business Combination as of December 31, 2025, before redemptions and taxes[50]. - The company may need additional financing to complete its initial Business Combination if the cash required exceeds the available funds in the Trust Account[51]. - The company may seek Working Capital Loans up to $1,500,000, which can be converted into units of the post-Business Combination entity at a price of $1.00 per unit[183]. - The Underwriters are entitled to a Deferred Fee of up to $0.35 per Unit, totaling up to $6,037,500, payable upon the consummation of an initial Business Combination[187]. Business Combination and Strategy - The company must complete its initial Business Combination by September 22, 2027, or face liquidation and distribution of the Trust Account funds[26]. - The company is focused on target businesses in sectors such as energy, fintech, real estate, and technology[22]. - The company aims to acquire 100% of the equity interests or assets of target businesses, but may acquire less than 100% if it meets specific objectives[45]. - The company intends to utilize cash from the IPO and Private Placement for its initial Business Combination, which may involve financially unstable or early-stage companies[40]. - The company may seek to extend the Combination Period with shareholder approval, which could affect the Trust Account and capitalization[27]. - The company may continue to seek a Business Combination with a different target if the initial one is not completed within the Combination Period[100]. - The company may incur losses if costs associated with identifying and evaluating target businesses do not lead to a completed Business Combination[64]. - The company may face increased competition from other SPACs for attractive target businesses, potentially impacting acquisition terms[65]. - The company may face significant competition for Business Combination opportunities, which could hinder the completion of the initial Business Combination[126]. - The company may engage in a Business Combination with target businesses that have relationships with affiliates, raising potential conflicts of interest[129]. Shareholder Rights and Redemption - The pro rata Redemption Price for Public Shares was approximately $10.10 as of December 31, 2025, but actual distribution may be affected by creditor claims[43]. - Shareholder approval is required for the initial Business Combination if the issuance of Ordinary Shares exceeds 20% of the outstanding shares or if a director or substantial shareholder has a 5% or greater interest in the target business[74]. - The company will provide Public Shareholders with the opportunity to redeem their shares upon completion of the initial Business Combination, regardless of their voting stance[80]. - Public Shareholders are restricted from redeeming more than 15% of the Public Shares sold in the Initial Public Offering without prior consent, which aims to prevent a small group from blocking the Business Combination[94]. - If the initial Business Combination is not approved, Public Shareholders who elected to redeem their shares will not be entitled to redeem for their pro rata share of the Trust Account[99]. - The company will not restrict Public Shareholders' ability to vote all of their Public Shares for or against the initial Business Combination[95]. - The company intends to require Public Shareholders to deliver share certificates or electronically transfer Public Shares to exercise redemption rights, with specific deadlines outlined in proxy materials[96]. Management and Governance - The Management Team includes experienced members such as Daniel Freifeld (Chairman), Craig Perry (CEO), and Powers Spencer (CFO)[26]. - The management team has developed a broad network of contacts that provides a substantial number of potential initial Business Combination targets[52]. - The company may seek to recruit additional managers post-Business Combination, but there is no assurance that suitable candidates can be found[70]. - The decision to seek shareholder approval for the Business Combination will be made at the company's discretion based on various factors, including timing and costs[72]. - The Board consists of four members divided into three classes, with each class serving a three-year term[219]. - Officers are appointed by the Board and serve at its discretion, rather than for specific terms[220]. - There are no material legal proceedings involving any director or executive officer in the last ten years[218]. - No family relationships exist between any directors or executive officers[217]. Financial Performance and Reporting - For the period from June 20, 2025, to December 31, 2025, the company reported a net income of $1,534,988, primarily from interest income on marketable securities[175]. - Cash used in operating activities during the same period was $365,659, influenced by formation costs and general administrative expenses[177]. - The company incurred total costs of $10,060,403 related to the IPO, which included a cash underwriting fee of $3,450,000 and a Deferred Fee of $6,037,500[176]. - The company has no long-term debt or capital lease obligations, with only administrative service fees incurred amounting to $34,000 from inception through December 31, 2025[185]. - The company is required to file annual, quarterly, and current reports with the SEC, including audited financial statements[115]. - The company is classified as an "emerging growth company" and can take advantage of certain exemptions from reporting requirements[118]. - The company will remain an emerging growth company until it meets specific revenue or market value thresholds[120]. - The company is also classified as a "smaller reporting company," allowing it to provide only two years of audited financial statements[121]. - The company does not expect any recently issued accounting standards to materially affect its financial statements[195]. Risks and Challenges - The company may not be able to complete its initial Business Combination within the Combination Period, which could lead to liquidation and redemption of Public Shares[124]. - Recent fluctuations in inflation and interest rates could complicate the consummation of an initial Business Combination[125]. - The requirement to complete the initial Business Combination within the Combination Period may limit the time available for due diligence on potential targets[126]. - Public Shareholders' ability to redeem shares for cash may deter potential Business Combination targets, affecting the company's financial condition[126]. - The company may face competition from other SPACs, private equity groups, and public companies, which may limit its ability to acquire larger target businesses[113]. - The ongoing geopolitical conflicts, including the Russia-Ukraine conflict, may adversely affect the Company’s ability to find a target business for the initial Business Combination[140]. - The Company may face increased market volatility and disruptions due to geopolitical tensions, impacting its search for a Business Combination[141]. - Cybersecurity incidents could pose risks to the investments in the Trust Account and the Company’s operations, with potential material adverse consequences[150]. Shareholder Value and Dilution - Approximately 57.2% of the Founder Shares are owned by the company's officers and directors, leading to potential dilution for Public Shareholders[34]. - The nominal purchase price for the Founder Shares may lead to significant dilution of the implied value of Public Shares upon the consummation of the initial Business Combination[137]. - The share price of the post-Business Combination company may be less than the Redemption Price of Public Shares, impacting shareholder value[129]. - The company cannot assure Public Shareholders that the actual value of the per-share redemption price will not be less than $10.00 per Public Share due to potential claims from creditors[111]. - The Sponsor has agreed to be liable if third-party claims reduce the Trust Account funds below $10.00 per Public Share, but there is no assurance that the Sponsor can satisfy these obligations[108]. - The Company may liquidate investments in the Trust Account to mitigate risks related to the Investment Company Act, potentially resulting in lower interest income for Public Shareholders[135]. - The Company’s securities may be delisted from Nasdaq, limiting shareholders' ability to trade and subjecting them to additional restrictions[135].