AAC 10-Q
Ares Acquisition Corp III (AAC)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For the quarterly period ended
OR
For the transition period from to
Commission File No.
(Exact name of Registrant as specified in its charter)
(Address of principal executive office) (Zip Code)
(
(Registrant’s telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days: Yes ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company.” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large Accelerated Filer | ☐ | Accelerated Filer | ☐ | ☒ | Smaller Reporting Company | Emerging Growth Company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
As of August 10, 2026,
ARES ACQUISITION CORPORATION III
Quarterly Report on Form 10-Q
Table of Contents
2
PART I—FINANCIAL INFORMATION
Item 1. Unaudited Condensed Financial Statements
ARES ACQUISITION CORPORATION III
CONDENSED BALANCE SHEET
JUNE 30, 2026
(UNAUDITED)
Assets | | ||
Current assets: |
| | |
Cash | $ | | |
Prepaid expenses |
| | |
Total current assets |
| | |
Cash held in Trust Account |
| | |
Deferred offering costs |
| | |
Total assets | $ | | |
Liabilities and shareholders’ deficit |
| | |
Current liabilities: |
| | |
Accrued offering costs | $ | | |
Accrued expenses |
| | |
| | ||
| | ||
Total current liabilities |
| | |
Commitments and contingencies |
| | |
Shareholders’ deficit |
| | |
Preference shares, $ |
| ||
Class A ordinary shares, $ |
| ||
Class B ordinary shares, $ |
| | |
Additional paid-in capital |
| | |
Accumulated deficit |
| ( | |
Total shareholders’ deficit |
| ( | |
Total liabilities and shareholders’ deficit | $ | |
The accompanying notes are an integral part of these unaudited condensed financial statements.
3
ARES ACQUISITION CORPORATION III
CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
For the period | ||||||
from March 25, | ||||||
For the three | 2026 (Inception) | |||||
months ended |
| through | ||||
| June 30, 2026 | | June 30, 2026 | |||
General and administrative expenses | $ | | $ | | ||
Net loss | $ | ( | $ | ( | ||
Basic and diluted weighted average shares outstanding of Class B ordinary shares(1) |
| |
| | ||
Basic and diluted net loss per share, Class B ordinary shares | $ | ( | $ | ( | ||
The accompanying notes are an integral part of these unaudited condensed financial statements.
4
ARES ACQUISITION CORPORATION III
CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS’ DEFICIT
FOR THE THREE MONTHS ENDED JUNE 30, 2026 AND
FOR THE PERIOD FROM MARCH 25, 2026 (INCEPTION) THROUGH JUNE 30, 2026
(UNAUDITED)
Total | ||||||||||||||
Additional | Shareholders’ | |||||||||||||
Class B Ordinary Shares(1) | Paid-in | Accumulated | Equity | |||||||||||
| Shares | | Amount | | Capital | | Deficit | | (Deficit) | |||||
Balance at March 25, 2026 (Inception) |
| | $ | | $ | | $ | | $ | | ||||
Issuance of ordinary shares to Sponsor |
| |
| |
| |
| |
| | ||||
Net loss |
| |
| |
| |
| ( |
| ( | ||||
Balance as of March 31, 2026 |
| |
| |
| |
| ( |
| | ||||
Net loss |
| |
| |
| |
| ( |
| ( | ||||
Balance as of June 30, 2026 |
| | $ | | $ | | $ | ( | $ | ( | ||||
The accompanying notes are an integral part of these unaudited condensed financial statements.
5
ARES ACQUISITION CORPORATION III
CONDENSED STATEMENT OF CASH FLOWS
(UNAUDITED)
| For the period | ||
from March 25, | |||
2026 (Inception) | |||
| through | ||
| June 30, 2026 | ||
Cash flows from operating activities: | |||
Net loss | $ | ( | |
Payment of formation costs through issuance of Class B ordinary shares | | ||
Adjustments to reconcile net loss to net cash used in operating activities: | |||
Changes in operating assets and liabilities: | |||
Prepaid expenses |
| ( | |
Accrued expenses |
| | |
Due to related party |
| | |
Net cash provided by operating activities |
| | |
Cash flows from investing activities: |
| | |
Cash deposited in Trust Account |
| ( | |
Net cash used in investing activities |
| ( | |
Cash flows from financing activities: |
| | |
Advance payment from Sponsor |
| | |
Net cash provided by financing activities |
| | |
Net change in cash |
| | |
Cash – beginning of period |
| | |
Cash – end of period | $ | | |
Supplemental disclosure of non-cash activities |
| | |
Deferred offering costs included in accrued offering costs | $ | | |
Deferred offering costs paid by Sponsor through promissory note | $ | | |
Deferred offering costs paid by Sponsor in exchange for Class B ordinary shares | $ | | |
The accompanying notes are an integral part of these unaudited condensed financial statements.
6
1. ORGANIZATION
Ares Acquisition Corporation III (the “Company”) was incorporated as a Cayman Islands exempted company on
The Company is not limited to a particular industry or geographic region for purposes of consummating a Business Combination. The Company is an emerging growth company (“EGC”) as defined in Section 2(a) of the Securities Act of 1933, as amended (the “Securities Act”), as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and, as such, the Company is subject to all of the risks associated with emerging growth companies.
As of June 30, 2026, the Company had not commenced any operations. All activity for the period from March 25, 2026 (inception) through June 30, 2026 relates to the Company’s formation and the initial public offering of the Company’s securities (the “Initial Public Offering”), which is described below. The Company will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest. The Company generates non-operating income in the form of interest income from the proceeds derived from the Initial Public Offering. The Company has selected December 31 as its fiscal year end.
The registration statement for the Company’s Initial Public Offering was declared effective on June 29, 2026. On July 1, 2026, the Company completed its Initial Public Offering of
Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of
Upon the closing of the Initial Public Offering and the Private Placement, $
The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering and the sale of the Private Placement Warrants. Substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. The Company’s initial Business Combination must be with one or more target businesses that together have a fair market value of at least
7
The Company will provide its holders of the outstanding Public Shares (the “Public Shareholders”) with the opportunity to redeem all or a portion of their Class A ordinary shares upon the consummation of a Business Combination either (i) in connection with a general meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek shareholder approval of a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The Public Shareholders will be entitled to redeem their Public Shares for a pro rata portion of the amount then in the Trust Account, including interest earned on the funds held in the Trust Account less (i) amounts withdrawn or eligible to be withdrawn to fund the Company’s working capital requirements, subject to an annual limit of $
The Company will proceed with a Business Combination only if it obtains the approval of an ordinary resolution under Cayman Islands law, which requires the affirmative vote of shareholders holding a majority of ordinary shares who attend and vote at a general meeting. If a shareholder vote is not required by law and the Company does not decide to hold a shareholder vote for business or other legal reasons, the Company will, pursuant to its Amended and Restated Memorandum and Articles of Association, conduct the redemptions pursuant to the tender offer rules of the U.S. Securities and Exchange Commission (the “SEC”) and file tender offer documents with the SEC prior to completing a Business Combination. If, however, shareholder approval of the transactions is required by law, or the Company decides to obtain shareholder approval for business or legal reasons, the Company will offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. If the Company seeks shareholder approval in connection with a Business Combination, the Sponsor has agreed to vote its Class B ordinary shares, and the Sponsor and the Company’s officers and directors have agreed to vote any Public Shares acquired in or after the Initial Public Offering in favor of a Business Combination, and not to redeem any shares owned by them in connection with a Business Combination. Additionally, each Public Shareholder may elect to redeem their Public Shares irrespective of whether they vote for or against the proposed transaction or abstain from voting on the proposed transaction.
Notwithstanding the foregoing, if the Company seeks shareholder approval of a Business Combination and it does not conduct redemptions pursuant to the tender offer rules, the Amended and Restated Memorandum and Articles of Association provides that a Public Shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from redeeming its shares with respect to more than an aggregate of
The Sponsor and the Company’s officers and directors have agreed (i) to waive their redemption rights with respect to their Class B ordinary shares and any Public Shares held by them in connection with the completion of a Business Combination and (ii) not to propose an amendment to (a) modify the substance or timing of the Company’s obligation to provide for the redemption of its Public Shares in connection with a Business Combination or to redeem
8
The Company has
The Sponsor has agreed to waive its liquidation rights with respect to its Class B ordinary shares if the Company fails to complete a Business Combination within the Combination Period. However, if the Sponsor or the Company’s officers or directors acquire Public Shares in or after the Initial Public Offering, such Public Shares will be entitled to liquidating distributions from the Trust Account if the Company fails to complete a Business Combination within the Combination Period. The underwriters have agreed to waive their rights to their deferred underwriting discounts (see Note 5) held in the Trust Account in the event the Company does not complete a Business Combination within the Combination Period and, in such event, such amounts will be included with the funds held in the Trust Account that will be available to fund the redemption of the Public Shares. In the event of such distribution, it is possible that the per share value of the assets remaining available for distribution will be less than the Initial Public Offering price per Unit ($
In order to protect the amounts held in the Trust Account, the Sponsor has agreed to be liable to the Company if and to the extent any claims by a third party for services rendered or products sold to the Company (except for the Company’s independent registered public accounting firm), or a prospective target business with which the Company has entered into a written letter of intent, confidentiality or other similar agreement or Business Combination agreement, reduce the amounts in the Trust Account to below (i) $
Risks and Uncertainties
Management has evaluated the impact of persistent inflation, fluctuations in interest rates, financial market instability, certain geopolitical events, conflicts in the middle east and evolving expectations regarding monetary and U.S. trade policies. Management has concluded that while it is reasonably possible that the risks and uncertainties related to or resulting from these events could have a negative effect on the Company’s financial position, results of its operations and/or search for a target company, the specific impact is not readily determinable as of the date of these unaudited condensed financial statements. The unaudited condensed financial statements do not include any adjustments that might result from the outcome of these risks and uncertainties.
9
Liquidity and Capital Resources
The Company’s liquidity needs to date have been satisfied through a contribution of $
Following the completion of the Initial Public Offering on July 1, 2026, the Company has $
Based on the foregoing, management believes that the Company will have sufficient working capital and borrowing capacity from the Sponsor or an affiliate of the Sponsor or certain of the Company’s directors and officers to meet its needs through the earlier of the completion of a Business Combination or one year from this filing. Over this time period, the Company will be using these funds for paying existing accounts payable, identifying and evaluating prospective initial Business Combination candidates, performing due diligence on prospective target businesses, paying for travel expenditures, selecting the target business to merge with or acquire, and structuring, negotiating and completing the Business Combination.
2. SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying unaudited condensed financial statements are presented in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the SEC. Accordingly, they do not include all of the information and footnotes required by GAAP. In the opinion of management, the unaudited condensed financial statements reflect all adjustments, which include only normal recurring adjustments necessary for the fair statement of the balances and results for the periods presented. The operating results presented for interim periods are not necessarily indicative of the results that may be expected for any other interim period or for the entire year or any future period. These unaudited condensed financial statements should be read in conjunction with the audited financial statement and notes thereto included in the Form 8-K and the final prospectus filed by the Company with the SEC on July 8, 2026 and June 30, 2026, respectively.
Emerging Growth Company
The Company is an EGC. As an EGC, it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies. These exemptions include not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies are required to comply with new or revised financial accounting standards. Private companies are those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period. This means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an EGC, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s unaudited condensed financial statements with another public company which is neither an EGC nor an EGC which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
10
Use of Estimates
The preparation of unaudited condensed financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed financial statements and the reported amounts of revenues and expenses during the reporting periods.
Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the unaudited condensed financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates.
Cash and Cash Equivalents
The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company had $
Cash Held in Trust Account
As of June 30, 2026, the Company had $
Financial Instruments
The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the unaudited condensed balance sheet, primarily due to their short-term nature.
Derivative Financial Instruments
The Company evaluates its equity-linked financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with ASC 815, “Derivatives and Hedging.” For derivative financial instruments that are classified as liabilities, the derivative instrument is initially recognized at fair value with subsequent changes in fair value recognized in the statements of operations each reporting period. The classification of derivative instruments, including whether such instruments should be classified as liabilities or as equity, is evaluated at the end of each reporting period.
The Company accounts for the Public Warrants and the Private Placement Warrants in accordance with the guidance contained in ASC 815. Such guidance provides that the warrants are not precluded from equity classification. Equity-classified contracts are initially measured at fair value (or allocated value). Subsequent changes in fair value are not recognized as long as the contracts continue to be classified in equity. As of June 30, 2026,
Deferred Offering Costs
The Company complies with the requirements of the ASC 340-10-S99 and SEC Staff Accounting Bulletin Topic 5A, “Expenses of Offering.” Deferred offering costs consist principally of professional and registration fees and other costs that are related to the Initial Public Offering. ASC 470-20, “Debt with Conversion and Other Options,” addresses the allocation of proceeds from the issuance of convertible debt into its equity and debt components. The Company applies this guidance to allocate Initial Public Offering proceeds from the Public Units between Class A ordinary shares and warrants, using the residual method by allocating Initial Public Offering proceeds first to assigned value of the warrants and then to the Class A ordinary shares. Upon completion of the Initial Public Offering on July 1, 2026, offering costs allocated to the Class A ordinary shares were charged to temporary equity. Offering costs allocated to the Public Warrants and Private Placement Warrants were charged to shareholders’ deficit as warrants after management’s evaluation are accounted for under equity treatment.
11
Income Taxes
ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The Company has determined that the Cayman Islands is the Company’s only major tax jurisdiction. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were
There is currently no taxation imposed on income by the government of the Cayman Islands. In accordance with Cayman Islands income tax regulations, income taxes are not levied on the Company. Consequently, income taxes are not reflected in the Company’s unaudited condensed financial statements.
Net Loss per Ordinary Share
The Company complies with accounting and disclosure requirements of ASC Topic 260, “Earnings Per Share.” Net loss per Class B ordinary share is computed by dividing net loss by the weighted average number of ordinary shares outstanding during the period, excluding ordinary shares subject to forfeiture. Weighted average shares as of June 30, 2026 were reduced for the effect of an aggregate of
Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist of a cash account in a financial institution, which, at times, may exceed the Federal Deposit Insurance Corporation coverage of $250,000. The Company has not experienced losses on this account and management believes the Company is not exposed to significant risks on such account.
Recent Accounting Pronouncements
Management does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company’s unaudited condensed financial statements.
3. INITIAL PUBLIC OFFERING
On July 1, 2026, the Company completed its Initial Public Offering of
12
4. RELATED PARTY TRANSACTIONS
Class B Ordinary Shares
On March 31, 2026, the Sponsor paid $
The Sponsor has agreed not to transfer, assign or sell any of the Class B ordinary shares (except to certain permitted transferees) until the earlier of (i)
Private Placement Warrants
Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of
Related Party Loans
Promissory Note
On March 31, 2026, the Company issued a promissory note to the Sponsor, pursuant to which the Sponsor agreed to loan the Company up to an aggregate of $
13
Working Capital Loans
In addition, in order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor or certain of the Company’s directors and officers may, but are not obligated to, provide the Company with Working Capital Loans. If the Company completes a Business Combination, the Company would repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. Otherwise, the Working Capital Loans would be repaid only out of funds held outside the Trust Account. If a Business Combination does not close, the Company may only use working capital held outside the Trust Account to repay the Working Capital Loans. Except for the foregoing, the terms of such Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans. The Working Capital Loans would either be repaid upon consummation of a Business Combination, without interest, or, at the lender’s discretion, up to $
Due to Sponsor
Advance Payment from Sponsor
On June 30, 2026, the Sponsor made an advance payment of $
Administrative Service Fee
On June 29, 2026, the Company entered into an agreement with the Sponsor to pay a monthly fee of $
Advisory Agreement
On June 29, 2026, the Company engaged Ares Management Capital Markets LLC (“AMCM”), an affiliate of the Sponsor, to provide consulting and advisory services to the Company in connection with the Initial Public Offering and the initial Business Combination. As payment for such services, AMCM received an advisory fee of $
5. COMMITMENTS AND CONTINGENCIES
Registration Rights
The holders of the Class B ordinary shares, Private Placement Warrants (and the Class A ordinary shares underlying such Private Placement Warrants) and Private Placement Warrants that may be issued upon conversion of Working Capital Loans (and the Class A ordinary shares underlying such warrants) have registration rights to require the Company to register a sale of any of its securities held by them pursuant to a registration rights agreement. Following the completion of the Business Combination, the holders of these securities will be entitled to make up to three demands, excluding short form registration demands, that the Company register such securities for sale under the Securities Act. In addition, these holders are entitled to “piggy-back” registration rights to include their securities in other registration statements filed by the Company, subject to certain limitations. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
14
Underwriting Agreement and Advisory Agreement
The Company granted the underwriters a
The underwriters were entitled to a cash underwriting discount of $
On June 29, 2026, the Company engaged AMCM, an affiliate of the Sponsor, to provide consulting and advisory services to the Company in connection with the Initial Public Offering and the initial Business Combination. As payment for such services, AMCM receives certain advisory fees (see Note 4). The fees will be reimbursed from a portion of the fees paid to the underwriters.
Contingent Fees
The Company has entered into fee arrangement with a service provider pursuant to which certain transaction fees and service fees will become payable only if the Company consummates a Business Combination. If the Business Combination does not occur, the Company will not be required to pay these contingent fees. As of June 30, 2026, the amount of these contingent fees with the service provider was $
6. SHAREHOLDERS’ DEFICIT
Preference Shares — The Company is authorized to issue
Class A Ordinary Shares — The Company is authorized to issue
Class B Ordinary Shares — The Company is authorized to issue
Holders of Class A ordinary shares and Class B ordinary shares will vote together as a single class on all other matters submitted to a vote of shareholders except as required by law.
15
The Class B ordinary shares will automatically convert into Class A ordinary shares at the time of a Business Combination, or earlier at the option of the holders of the Class B ordinary shares, on a
7. WARRANTS
Public Warrants may only be exercised for a whole number of shares. The Public Warrants will become exercisable
The Company will not be obligated to deliver any Class A ordinary shares pursuant to the exercise of a warrant and will have no obligation to settle such warrant exercise unless a registration statement under the Securities Act with respect to the Class A ordinary shares underlying the warrants is then effective and a prospectus relating to the registration statement is current, subject to the Company satisfying its obligations with respect to registration. No warrant will be exercisable and the Company will not be obligated to issue Class A ordinary shares upon exercise of a warrant unless the Class A ordinary shares issuable upon such warrant exercise have been registered on a post-effective amendment to the registration statement for the Initial Public Offering or a new registration statement on Form S-1, Form S-3, Form F-1 or Form F-3, as applicable, following an initial Business Combination, and have been registered, qualified or deemed to be exempt under the securities laws of the state of residence of the registered holder of the warrants.
The Company has agreed that, as soon as practicable, but in no event later than
Once the warrants become exercisable, the Company may redeem the Public Warrants:
16
In addition, the exercise price of the warrants and the $
The Private Placement Warrants (see Note 4) will be identical to the Public Warrants underlying the Units being sold in the Initial Public Offering, except that the Private Placement Warrants and the Class A ordinary shares issuable upon the exercise of the Private Placement Warrants will not be transferable, assignable or salable until
If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement. The exercise price and number of ordinary shares issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a share dividend, or recapitalization, reorganization, merger or consolidation. However, the warrants will not be adjusted for issuance of ordinary shares at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the warrants. If the Company is unable to complete a Business Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of warrants will not receive any of such funds with respect to their warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with the respect to such warrants. Accordingly, the warrants may expire worthless.
8. SEGMENT INFORMATION
ASC Topic 280, “Segment Reporting,” establishes standards for companies to report in their financial statements information about operating segments, products, services, geographic areas, and major customers. Operating segments are defined as components of an enterprise for which separate financial information is available that is regularly evaluated by the Company’s chief operating decision maker (“CODM”), or group, in deciding how to allocate resources and assess performance.
The Company’s CODM has been identified as a group that includes the chief executive officer, chief financial officer and chief operating officer, that collectively reviews the consolidated operating results for the Company as a whole to make decisions about allocating resources and assessing financial performance. Accordingly, the CODM has determined that the Company only has
The CODM assesses performance for the single segment and decides how to allocate resources based on net loss that is reported on the unaudited condensed statements of operations. The measure of segment assets is reported on the condensed balance sheet as total assets. The CODM reviews general and administrative expenses, which represent the significant segment expenses, which are included in the accompanying unaudited condensed statements of operations. General and administrative expenses are reviewed and monitored by the CODM to manage and forecast cash to ensure enough capital is available to complete the Initial Public Offering and, eventually, a Business Combination. The CODM also reviews general and administrative expenses to manage, maintain and enforce all contractual agreements to ensure costs are aligned with all agreements and budget.
17
9. SUBSEQUENT EVENTS
Management has evaluated subsequent events to determine if events or transactions occurring through the date the unaudited condensed financial statements were issued required potential adjustment to or disclosure in the unaudited condensed financial statements. Other than as described below, the Company concluded that there have been no events that have occurred that would require adjustments to the unaudited condensed financial statements.
On July 1, 2026, the Company completed the Initial Public Offering of
On July 1, 2026, in connection with the closing of the Initial Public Offering, the underwriters were entitled to a cash underwriting discount of $
On July 8, 2026, the Company repaid the outstanding balance of $
18
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
References to the “Company,” “our,” “us” or “we” refer to Ares Acquisition Corporation III. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with our unaudited condensed financial statements and the notes thereto contained elsewhere in this report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.
Cautionary Note Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act). We have based these forward-looking statements on our current expectations and projections about future events. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about us that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “continue,” or the negative of such terms or other similar expressions. Such statements include, but are not limited to, possible business combinations, and the financing thereof, and related matters, as well as all other statements other than statements of historical fact included in this Form 10-Q. Factors that might cause or contribute to such a discrepancy include, but are not limited to, those described in our other Securities and Exchange Commission (“SEC”) filings.
Overview
We are a blank check company formed on March 25, 2026 as a Cayman Islands exempted company for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses, which we refer to throughout this Quarterly Report as our initial Business Combination. We intend to effectuate our Business Combination using cash from the proceeds of the Initial Public Offering and the sale of the Private Placement Warrants, our capital stock, debt or a combination of cash, stock and debt.
We expect to continue to incur significant costs in the pursuit of an initial Business Combination. We cannot assure you that our plans to complete our initial Business Combination will be successful.
Results of Operations
All activity for the period from March 25, 2026 (inception) through June 30, 2026 related to our formation and the preparation for the Initial Public Offering. We will not generate any operating revenues until after the completion of our initial Business Combination. We expect to incur increased expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses.
For the three months ended June 30, 2026 and for the period from March 25, 2026 (inception) through June 30, 2026, we had a net loss of $12,218 and $29,289, respectively, representing our general and administrative expenses.
Liquidity and Capital Resources
Our liquidity needs to date have been satisfied through a contribution of $25,000 from our Sponsor to cover certain expenses in exchange for the issuance of Class B ordinary shares and a loan from our Sponsor pursuant to the Promissory Note (see Note 4). As of June 30, 2026, there was $147,977 outstanding under the Promissory Note. On July 8, 2026, we repaid the outstanding balance of $156,632 under the Promissory Note.
On July 1, 2026, we consummated our Initial Public Offering of 39,500,000 Units, including 5,000,000 Over-Allotment Units, at a purchase price of $10.00 per Unit, generating gross proceeds of $395,000,000, and incurring offering costs of $22,451,800, of which $13,825,000 was for deferred underwriting discounts. Simultaneously with the closing of the Initial Public Offering, we consummated the sale of 7,466,667 Private Placement Warrants, including 666,667 Private Placement Warrants to cover over-allotments, for an aggregate purchase price of $11,200,000, to our Sponsor. As of immediately after the Initial Public Offering, we have $1,720,000 in cash held outside of the Trust Account.
19
In addition, we may withdraw interest earned on the Trust Account to fund our working capital requirements, subject to an annual limit of $500,000 (plus the rollover of unused amounts from prior years). And in order to finance transaction costs in connection with a Business Combination, our Sponsor or an affiliate of our Sponsor or certain of our directors and officers may, but are not obligated to, to provide us with Working Capital Loans (see Note 4). As of June 30, 2026, we had not made any Working Capital Withdrawals, and no amounts were outstanding under any Working Capital Loan.
Trends Affecting Our Business
We continue to evaluate the impact of persistent inflation, fluctuations in interest rates, financial market instability, certain geopolitical events, conflicts in the middle east and evolving expectations regarding monetary and U.S. trade policies. Management has concluded that while it is reasonably possible that the risks and uncertainties related to or resulting from these events could have a negative effect on our financial position, results of operations and/or ability to complete an initial Business Combination, we cannot at this time fully predict the likelihood of one or more of the above events, their duration or magnitude or the extent to which they may negatively impact our business and our ability to complete an initial Business Combination.
Contractual Obligations
We do not have any long-term debt obligations, capital lease obligations, operating lease obligations, purchase obligations, off-balance sheet arrangements or long-term liabilities.
Administrative Service Fee
On June 29, 2026, we entered into an agreement to pay our Sponsor a monthly fee of $16,667 for general and administrative services including office space, utilities, secretarial support and administrative services. This arrangement will terminate upon completion of our initial Business Combination or our liquidation.
Underwriting Agreement and Advisory Agreement
The underwriters will be entitled to a deferred underwriting discount of $13,825,000. The deferred underwriting discount shall only be due on a Unit if the Class A ordinary shares contained in such Unit is not redeemed prior to or in connection with our initial Business Combination, subject to a minimum aggregate deferred underwriting discount of $2,500,000. Notwithstanding the foregoing, if either or both of the underwriters acts as a placement agent in connection with a proposed private placement of equity securities in connection with our initial Business Combination and such underwriter receives fees in connection with such role in excess of such underwriter’s portion of the minimum aggregate deferred underwriting discount, the minimum aggregate deferred underwriting discount shall not apply for such underwriter. The deferred underwriting discount will become payable to the underwriters from the amounts held in the Trust Account solely if we complete the Initial Business Combination, subject to the terms of the underwriting agreement.
On June 29, 2026, we also engaged AMCM, an affiliate of our Sponsor, to provide consulting and advisory services to us in connection with our initial Business Combination, for which it will receive a deferred advisory fee of up to $2,765,000, payable solely if we complete the initial Business Combination and with respect to amounts remaining in the Trust Account following all properly submitted shareholder redemptions in connection with the completion of the initial Business Combination. The deferred advisory fee will be calculated based on the amount of these redemptions, subject to a minimum fee of $625,000. The deferred advisory fee will be reimbursed from a portion of the fees paid to the underwriters.
Contingent Fees
We have entered into a fee arrangement with a service provider pursuant to which certain transaction fees and service fees will become payable only if we consummate a Business Combination. If the Business Combination does not occur, we will not be required to pay these contingent fees. As of June 30, 2026, the amount of these contingent fees with the service provider was $1,401,828.
20
Critical Accounting Estimates
Management’s discussion and analysis of our financial condition and results of operations is based on our unaudited condensed financial statements, which have been prepared in accordance with GAAP. The preparation of our unaudited condensed financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities in our financial statements. On an ongoing basis, we evaluate our estimates and judgments, including those related to fair value of financial instruments and accrued expenses. We base our estimates on historical experience, known trends and events and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. We have identified the following as our critical accounting estimates:
Deferred Offering Costs
We comply with the requirements of the ASC 340-10-S99 and SEC Staff Accounting Bulletin Topic 5A, “Expenses of Offering.” Deferred offering costs consist principally of professional and registration fees and other costs that are related to the Initial Public Offering. ASC 470-20, “Debt with Conversion and Other Options,” addresses the allocation of proceeds from the issuance of convertible debt into its equity and debt components. We apply this guidance to allocate Initial Public Offering proceeds from the Public Units between Class A ordinary shares and warrants, using the residual method by allocating Initial Public Offering proceeds first to assigned value of the warrants and then to the Class A ordinary shares. Upon completion of the Initial Public Offering on July 1, 2026, offering costs allocated to the Class A ordinary shares were charged to temporary equity and offering costs allocated to the Public Warrants and Private Placement Warrants were charged to shareholders’ deficit as Public Warrants and Private Placement Warrants after management’s evaluation are accounted for under equity treatment.
Net Loss Per Ordinary Share
We comply with accounting and disclosure requirements of ASC Topic 260, “Earnings Per Share.” Net loss per Class B ordinary share is computed by dividing net loss by the weighted average number of ordinary shares outstanding during the period, excluding ordinary shares subject to forfeiture. Weighted average shares as of June 30, 2026 were reduced for the effect of an aggregate of 43,750 Class B ordinary shares that are subject to forfeiture if the over-allotment option is not exercised, in full or in part, by the underwriters (see Note 6). As of June 30, 2026, we did not have any dilutive securities and other contracts that could, potentially, be exercised or converted into ordinary shares and then share in the earnings of the Company. As a result, diluted loss per Class B ordinary share is the same as basic loss per share for the periods presented.
Recent Accounting Pronouncements
Our management does not believe that any recently issued, but not yet effective, accounting pronouncement, if currently adopted, would have a material effect on the accompanying unaudited condensed financial statements.
JOBS Act
The JOBS Act contains provisions that, among other things, relax certain reporting requirements for qualifying public companies. We qualify as an EGC and under the JOBS Act are allowed to comply with new or revised accounting pronouncements based on the effective date for private (not publicly traded) companies. We are electing to delay the adoption of new or revised accounting standards, and as a result, we may not comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. As a result, our unaudited condensed financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.
21
Additionally, we are in the process of evaluating the benefits of relying on the other reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, if, as an EGC, we choose to rely on such exemptions we may not be required to, among other things, (i) provide an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404, (ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (auditor discussion and analysis) and (iv) disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the chief executive officer’s compensation to median employee compensation. These exemptions will apply for a period of five years following the completion of our Initial Public Offering or until we are no longer an EGC, whichever is earlier.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise required under this item.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures are designed to ensure that information required to be disclosed by us in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
Under the supervision and with the participation of our management, we conducted an evaluation of the effectiveness of our disclosure controls and procedures as of the end of the fiscal quarter ended June 30, 2026, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on this evaluation, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures were effective as of June 30, 2026.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II—OTHER INFORMATION
Item 1. Legal Proceedings
From time to time, we, our executive officers, directors, our Sponsor and its respective affiliates and/or any of their respective principals and employees are subject to legal proceedings.
Additionally, we and our Sponsor and its affiliates are also subject to extensive regulation, which, from time to time, results in requests for information from us or our Sponsor or its affiliates, or legal or regulatory proceedings or investigations against us or our Sponsor or its affiliates. We incur significant costs and expenses in connection with any such proceedings, information requests and investigations.
Item 1A. Risk Factors
As of the date of this Quarterly Report, there have been no material changes with respect to those risk factors disclosed in the final prospectus we filed with the SEC in connection with our Initial Public Offering on June 30, 2026, which could result in a significant or material adverse effect on our results of operations or financial condition. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations.
22
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds from Registered Securities
Unregistered Sales
On March 31, 2026, the Sponsor paid $25,000 to cover certain offering and formation costs of the Company in consideration of the Company’s Class B ordinary shares. Through June 30, 2026, the Company effectuated share recapitalizations and a share surrender resulting in the Sponsor holding an aggregate of 9,918,750 Class B ordinary shares. The Sponsor agreed to forfeit up to 1,293,750 Class B ordinary shares to the extent that the Full Over-Allotment is not exercised so that the Class B ordinary shares will represent, on an as-converted basis, 20% of the Company’s issued and outstanding shares after the Initial Public Offering. On June 30, 2026, the underwriters partially exercised the over-allotment option to purchase 5,000,000 Units and 1,250,000 Class B ordinary shares are no longer subject to forfeiture.
Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of 7,466,667 Private Placement Warrants, including 666,667 Private Placement Warrants to cover over-allotments, for an aggregate purchase price of $11,200,000, in a private placement to the Sponsor.
These issuances were made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act.
Use of Proceeds
In connection with the Initial Public Offering, we incurred offering costs of $22,451,800 (including deferred underwriting discounts of $13,825,000). Other incurred offering costs consisted principally preparation fees related to the Initial Public Offering. After deducting the underwriting discounts and commissions (excluding the deferred portion, which amount will be payable upon consummation of the initial Business Combination, if consummated) and the Initial Public Offering expenses, $395,000,000 of the net proceeds from our Initial Public Offering and certain of the proceeds of the Private Placement were placed in the Trust Account.
There has been no material change in the planned use of the proceeds from the Initial Public Offering and certain of the proceeds of the Private Placement as is described in our final prospectus related to the Initial Public Offering.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
None.
Item 5. Other Information
During the quarter ended June 30, 2026, none of our directors or executive officers
23
Item 6. Exhibits
Exhibit No. | | Description |
3.1 | ||
10.1 | ||
10.2 | ||
10.3 | ||
10.4 | ||
10.5 | ||
10.6 | ||
31.1* | ||
31.2* | ||
32.1** | ||
32.2** | ||
101.INS* | XBRL Instance Document | |
101.SCH* | XBRL Taxonomy Extension Schema Document | |
101.CAL* | XBRL Taxonomy Extension Calculation Linkbase Document | |
101.DEF* | XBRL Taxonomy Extension Definition Linkbase Document | |
101.LAB* | XBRL Taxonomy Extension Labels Linkbase Document | |
101.PRE* | XBRL Taxonomy Extension Presentation Linkbase Document | |
104 | Cover Page Interactive Data File - the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |
* | Filed herewith |
**These certifications are not deemed filed by the SEC and are not to be incorporated by reference in any filing we make under the Securities Act of 1933 or the Securities Exchange Act of 1934, irrespective of any general incorporation language in any filings.
24
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
ARES ACQUISITION CORPORATION III | |||
Dated: August 13, 2026 | By: | /s/ David B. Kaplan | |
Name: | David B. Kaplan | ||
Title: | Chief Executive Officer and Co-Chairman | ||
(Principal Executive Officer) | |||
Dated: August 13, 2026 | By: | /s/ Jarrod Phillips | |
Name: | Jarrod Phillips | ||
Title: | Chief Financial Officer | ||
(Principal Financial Officer) | |||
25