CRAC 10-Q
Crown Reserve Acquisition Corp. I (CRAC)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
For the quarterly period ended
For the transition period from ____________ to ____________
Commission File Number:
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
PO Box
(Address of principal executive offices, including zip code)
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act 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.
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 12, 2026, there were
CROWN RESERVE ACQUISITION CORP. I
FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 2026
TABLE OF CONTENTS
i
PART I — FINANCIAL INFORMATION
Item 1. Condensed Financial Statements.
CROWN RESERVE ACQUISITION CORP. I
CONDENSED BALANCE SHEETS
(Unaudited)
| June 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| (unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Due from related party | $ | $ | ||||||
| Prepaid expenses | ||||||||
| Total current assets | ||||||||
| Cash and marketable securities held in Trust Account | ||||||||
| Total assets | ||||||||
| LIABILITIES AND SHAREHOLDERS’ DEFICIT | ||||||||
| Current liabilities: | ||||||||
| Accounts payable and accrued expenses | $ | $ | ||||||
| Warrant liability | ||||||||
| Deferred underwriting fee payable | ||||||||
| Total liabilities | ||||||||
| Commitments and contingencies | ||||||||
| Class A ordinary shares subject to possible redemption, | ||||||||
| Shareholders’ deficit: | ||||||||
| Preferred 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.
1
CROWN RESERVE ACQUISITION CORP. I
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
| Three Months Ended June 30, |
Six Months Ended June 30, |
For the Period from April 29, 2025 (Inception) Through June 30, |
||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| General and administrative costs | $ | $ | $ | $ | ||||||||||||
| Professional fees | ||||||||||||||||
| Loss from operations | ( | ) | ( | ) | ||||||||||||
| Other income: | ||||||||||||||||
| Change in fair value of warrant liability | ( | ) | ( | ) | ||||||||||||
| Dividends earned on marketable securities held in Trust Account | ||||||||||||||||
| Interest income | ||||||||||||||||
| Total other income | ||||||||||||||||
| Net income | $ | $ | $ | $ | ||||||||||||
| Allocation of net income: | ||||||||||||||||
| Class A ordinary shares | $ | $ | $ | $ | ||||||||||||
| Class B ordinary shares | $ | $ | $ | $ | ||||||||||||
| Weighted-average shares outstanding — basic and diluted: | ||||||||||||||||
| Class A ordinary shares | ||||||||||||||||
| Class B ordinary shares | ||||||||||||||||
| Net income per ordinary share — basic and diluted: | ||||||||||||||||
| Class A ordinary shares | $ | $ | $ | $ | ||||||||||||
| Class B ordinary shares | $ | $ | $ | $ | ||||||||||||
The accompanying notes are an integral part of these unaudited condensed financial statements.
2
CROWN RESERVE ACQUISITION CORP. I
CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS’ DEFICIT
(Unaudited)
| Preferred Shares | Class A Ordinary Shares |
Class B Ordinary Shares |
Additional Paid-in | Accumulated | Total Shareholders’ | |||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Capital | Deficit | Deficit | ||||||||||||||||||||||||||||
| Balances at December 31, 2025 | $ | $ | | $ | | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||
| Accretion for Class A ordinary shares to redemption amount | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| Net loss | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| Balances at March 31, 2026 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||||
| Accretion for Class A ordinary shares to redemption amount | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| Net income | - | - | - | |||||||||||||||||||||||||||||||||
| Balances at June 30, 2026 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||||
| For the Period from April 29, 2025 (Inception) Through June 30, 2025 (Unaudited) | ||||||||||||||||||||||||||||||||||||
| Balance at April 29, 2025 (inception) | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
| Issuance of Class B ordinary shares to Sponsor | ||||||||||||||||||||||||||||||||||||
| Net income | - | - | - | |||||||||||||||||||||||||||||||||
| Balances at June 30, 2025 | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed financial statements.
3
CROWN RESERVE ACQUISITION CORP. I
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
| For the Period from |
||||||||
| Six Months Ended June 30, |
April 29, 2025 (Inception) Through June 30, |
|||||||
| 2026 | 2025 | |||||||
| Cash flows from operating activities: | ||||||||
| Net income | $ | $ | ||||||
| Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||||||||
| Change in fair value of warrant liability | ||||||||
| Dividends earned on marketable securities held in Trust Account | ( | ) | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Prepaid expenses | ( | ) | ||||||
| Accounts payable and accrued expenses | ( | ) | ||||||
| Net cash provided by (used in) operating activities | ( | ) | ||||||
| Cash flows from financing activities: | ||||||||
| Advances from related party, net | ||||||||
| Proceeds from issuance of Class B ordinary shares to Sponsor | ||||||||
| Net cash provided by financing activities | ||||||||
| Net change in cash and cash equivalents | ||||||||
| Cash and cash equivalents at beginning of period | ||||||||
| Cash and cash equivalents at end of period | ||||||||
| Supplemental disclosure of non-cash financing and investing activities: | ||||||||
| Accretion of Class A ordinary shares to redemption value | $ | $ | ||||||
| Dividends earned on Trust reinvested in Trust Account | $ | $ | ||||||
| Deferred offering costs included in accrued offering costs (2025) | $ | $ | ||||||
| Deferred offering costs included in promissory note - related party (2025) | $ | |||||||
The accompanying notes are an integral part of these unaudited condensed financial statements.
4
CROWN RESERVE ACQUISITION CORP. I
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2026
(Unaudited)
Note 1 — Description of Organization and Business Operations
Crown Reserve Acquisition Corp. I (the “Company”) was incorporated as a Cayman Islands exempted company on
All activity for the period from
The Company’s sponsor is Crown Acquisition Sponsor LLC, a Delaware limited liability company (the “Sponsor”). The registration statement for the Company’s IPO was declared effective on September 26, 2025. On November 10, 2025, the Company consummated its IPO of
Simultaneously with the closing of the IPO, the Company consummated the private sale of an aggregate of
Following the closing of the IPO, an amount of $
The Company’s Business Combination must be with one or more target businesses that together have a fair market value equal to at least
Business Combination Agreement
On March 30, 2026, the Company, CRAC Merger Sub Inc., a Delaware corporation and wholly owned direct subsidiary of the Company (“Merger Sub”), and Carvix, Inc., a Delaware corporation (“Carvix”), entered into a Business Combination Agreement (the “Business Combination Agreement”). Subject to the terms and conditions of the Business Combination Agreement, (i) the Company will effect a domestication to Delaware (the “Domestication”), (ii) immediately thereafter, Merger Sub will merge with and into Carvix (the “Merger”), with Carvix surviving as a wholly owned subsidiary of the Company (as domesticated), and (iii) the parties intend that the Domestication qualify as a “reorganization” within the meaning of Section 368(a)(1)(F) of the Internal Revenue Code of 1986, as amended (the “Code”), and that the Merger qualify as a “reorganization” within the meaning of Section 368(a) of the Code.
5
CROWN RESERVE ACQUISITION CORP. I
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2026
(Unaudited)
At the effective time of the Merger (the “Effective Time”), each share of Carvix common stock issued and outstanding immediately prior to the Effective Time (other than dissenting shares and treasury shares) will be cancelled and converted into the right to receive (a) at the Effective Time, an aggregate of
Each Company founder share will convert on a one-for-one basis into Company common stock in connection with the Domestication and Closing. Pursuant to a SPAC Founders Stock Letter executed concurrently with the Business Combination Agreement, the Sponsor irrevocably waived any anti-dilution or conversion ratio adjustment rights that would otherwise be triggered by the private placements, the Merger or other transactions contemplated by the Business Combination Agreement.
The post-closing board of directors will consist of five members: four nominated by Carvix (including one independent director approved by the Sponsor) and one nominated by the Sponsor (who will be an independent director approved by Carvix). Carvix’s existing management team will continue to lead the combined company following the Closing.
Consummation of the transactions is subject to customary conditions, including, among others, (i) the requisite approval by the Company’s stockholders of the proposals described in the Business Combination Agreement, (ii) delivery of the Carvix stockholder written consent sufficient to constitute the requisite Carvix stockholder approval, (iii) the Domestication, (iv) the U.S. Securities and Exchange Commission (the “SEC”) declaring effective the Registration Statement on Form S-4 to be filed by the Company, (v) approval for listing on Nasdaq of the shares of the Company’s common stock to be issued in the transactions (including the earnout shares), (vi) expiration or termination of any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act, if required, (vii) satisfaction of the Company’s net tangible asset or “penny stock” condition, and (viii) the Company’s having at the Closing at least the “Minimum Cash Amount,” after giving effect to redemptions, payment of transaction expenses and repayment of indebtedness.
The Business Combination Agreement may be terminated under certain customary and limited circumstances at any time prior to the Effective Time, including by either the Company or Carvix if the Effective Time has not occurred on or prior to September 30, 2026 (the “Outside Date”), unless the breach of the terminating party was the principal cause of the failure of the Closing to occur by such date.
Concurrently with the execution of the Business Combination Agreement, the Sponsor and Carvix entered into a SPAC Founders Stock Letter, and the Company, Carvix and certain key Carvix stockholders entered into a Stockholder Support Agreement. At the Closing, the Company (as domesticated), the Sponsor, Carvix founders and certain other holders will enter into an Investor Rights Agreement covering governance matters (including initial board composition) and registration rights.
The foregoing description of the Business Combination Agreement and the related agreements does not purport to be complete and is qualified in its entirety by reference to the full text thereof, copies of which were filed as exhibits to the Company’s Current Report on Form 8-K filed with the SEC on April 3, 2026. The Business Combination had not closed as of June 30, 2026, and accordingly, no Carvix assets, liabilities, results of operations, merger consideration, or earnout shares are reflected in the unaudited condensed financial statements.
6
CROWN RESERVE ACQUISITION CORP. I
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2026
(Unaudited)
Going Concern
As of June 30, 2026, the Company held no cash and had a working capital deficit funded entirely by the Sponsor and is dependent on Sponsor funding and/or additional financing to fund operations and transaction costs. The Company must complete a Business Combination by February 10, 2027 (the “Combination Period”). The Combination Period was originally 12 months from the closing of the IPO, or November 10, 2026, and was automatically extended by three months upon the execution of the Business Combination Agreement on March 30, 2026. If the Company does not complete a Business Combination within the Combination Period, the Company will cease all operations except for winding up and will redeem
In order to fund working capital deficiencies or finance transaction costs in connection with a Business Combination, the Sponsor, members of the Company’s management team or any of their affiliates may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). If the Company completes a Business Combination, the Company would repay such Working Capital Loans at that time. In the event that a Business Combination does not close, the Company may use a portion of the proceeds held outside the Trust Account to repay such Working Capital Loans, but no proceeds held in the Trust Account would be used to repay such Working Capital Loans. Up to $
Note 2 — Summary of Significant Accounting Policies
Basis of Presentation
The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and pursuant to the rules and regulations of the SEC. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three and six months ended June 30, 2026 are not necessarily indicative of the results that may be expected for the year ending December 31, 2026, or any future period. The accompanying unaudited condensed financial statements should be read in conjunction with the audited financial statements and notes thereto for the period from April 29, 2025 (inception) through December 31, 2025 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 27, 2026.
Emerging Growth Company
The Company is an “emerging growth company,” 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 it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including, but not limited to, not being required to comply with the auditor 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 (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that an emerging growth 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, which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, 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 financial statements with another public company that is neither an emerging growth company nor an emerging growth company that has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
7
CROWN RESERVE ACQUISITION CORP. I
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2026
(Unaudited)
Use of Estimates
The preparation of financial statements in conformity with U.S. 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 financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ 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 or cash equivalents held outside the Trust Account as of June 30, 2026 and December 31, 2025.
Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution. During the six months ended June 30, 2026, all funding for the Company’s operations was provided by the Sponsor through the Sponsor’s account on the Company’s behalf, which at times may exceed the Federal Deposit Insurance Corporation (“FDIC”) coverage limit of $
Marketable Securities Held in Trust Account
As of June 30, 2026 and December 31, 2025, substantially all of the assets held in the Trust Account were held in money market funds invested primarily in U.S. government securities with a maturity of
Fair Value of Financial Instruments
The fair value of the Company’s assets and liabilities, which qualify as financial instruments under FASB ASC 820, “Fair Value Measurement,” approximates the carrying amounts represented in the balance sheet, primarily due to their short-term nature, except for the warrant liability, which is measured at fair value on a recurring basis (see Note 5).
Offering Costs Associated with the IPO
The Company complies with the requirements of ASC 340-10-S99-1, SEC Staff Accounting Bulletin Topic 5A — “Expenses of Offering.” Offering costs of $
8
CROWN RESERVE ACQUISITION CORP. I
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2026
(Unaudited)
Warrant Liabilities
The Company accounts for the redeemable warrants issued in the IPO (the “Public Warrants”) as liabilities under ASC 815-40, recognized at fair value upon issuance with subsequent changes recognized in the statements of operations per ASC 815-40-35-4. The Public Warrants are classified as liabilities because the Warrant Agreement contains a provision under which warrant holders may receive cash in connection with a tender offer if such tender offer is accepted by holders of more than
Public Rights
The Company accounts for the rights issued in the IPO (the “Public Rights”) as permanent equity under ASC 815-40. Each Public Right entitles the holder to receive
Class A Ordinary Shares Subject to Possible Redemption
All
Net Income (Loss) Per Ordinary Share
The Company applies the two-class method under ASC 260 to compute earnings (loss) per ordinary share. Both Class A and Class B ordinary shares are participating securities sharing equally in dividends and distributions. Net income (or net loss) is allocated between classes based on weighted-average shares outstanding. Accretion of Class A ordinary shares to redemption value is a direct equity charge excluded from the EPS numerator. The Company’s outstanding Public Warrants and Public Rights are excluded from the computation of diluted earnings (loss) per share when their effect would be antidilutive or when applicable contingencies have not been satisfied (see Note 10).
Income Taxes
The Company is a Cayman Islands exempted company not subject to income taxes under current Cayman Islands law. The income tax provision for the period is
Segment Reporting
The Company complies with ASC 280, “Segment Reporting,” which establishes standards for reporting information about operating segments. 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”) in deciding how to allocate resources and assess performance. The Company has determined that it operates as a operating segment (see Note 11).
Recent Accounting Pronouncements
Management does not believe that any recently issued, but not yet effective, accounting pronouncements would have a material effect on the Company’s condensed financial statements.
9
CROWN RESERVE ACQUISITION CORP. I
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2026
(Unaudited)
Note 3 — Initial Public Offering
On November 10, 2025, the Company consummated its IPO of
Transaction costs deducted from IPO proceeds at closing amounted to $
Simultaneously with the IPO closing, the Sponsor purchased
In conjunction with the IPO, the Company issued to Polaris, as representative of the underwriters,
The Units began separate trading on Nasdaq on or about December 9, 2025 under the symbols “CRAC” (Class A ordinary shares), “CRACW” (Public Warrants), and “CRACR” (Public Rights).
Note 4 — Related Party Transactions
Founder Shares
On April 29, 2025, the Sponsor received
10
CROWN RESERVE ACQUISITION CORP. I
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2026
(Unaudited)
Private Placement Units
Simultaneously with the closing of the IPO, the Sponsor purchased
Sponsor Funding of Company Operations
The Company holds no operating cash. The Sponsor pays formation and operating costs on the Company’s behalf, which are recorded as Due from related party (or, when net obligations are owed to the Sponsor, as a Promissory Note — Related Party) on the balance sheet.
| Three Months Ended June 30, 2026 | Six Months Ended June 30, 2026 | |||||||
| Formation and operating costs paid by Sponsor on the Company’s behalf | $ | $ | ||||||
Due from Related Party
As of June 30, 2026 and December 31, 2025, the Company had a receivable of $
Working Capital Loans
In order to fund working capital deficiencies or finance transaction costs in connection with a Business Combination, the Sponsor, members of the Company’s management team or any of their affiliates may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). Up to $
11
CROWN RESERVE ACQUISITION CORP. I
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2026
(Unaudited)
Note 5 — Warrant Liabilities
The Company issued
The Company may redeem the outstanding Public Warrants at a price of $
The Public Warrants are classified as liabilities at fair value in accordance with ASC 815-40. The Company determined that the Public Warrants do not meet the criteria for equity classification because the Warrant Agreement contains a provision pursuant to which the warrant holders could receive cash in connection with a tender offer accepted by more than
Fair Value Measurement
The Public Warrants are classified as Level 3 in the fair value hierarchy as they are valued using a 500-step Cox-Ross-Rubinstein binomial lattice model with unobservable inputs.
| Input | June 30, 2026 | December 31, 2025 | ||||||
| Stock price | $ | $ | ||||||
| Strike price | $ | $ | ||||||
| Expected volatility | % | % | ||||||
| Risk-free rate | % | % | ||||||
| Remaining contractual term (years) | ||||||||
The following table presents the changes in the fair value of the warrant liability for the six months ended June 30, 2026:
| Balance at December 31, 2025 | $ | |||
| Change in fair value of warrant liability (loss) — three months ended March 31, 2026 | ||||
| Balance at March 31, 2026 | ||||
| Change in fair value of warrant liability (loss) — three months ended June 30, 2026 | ||||
| Balance at June 30, 2026 | $ |
12
CROWN RESERVE ACQUISITION CORP. I
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2026
(Unaudited)
The loss on the change in fair value of the warrant liability of $(
Fair Value Hierarchy
The following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis and indicates the fair value hierarchy of the valuation techniques utilized:
| Level | June 30, 2026 | December 31, 2025 | ||||||||||
| Assets: | ||||||||||||
| Investments held in Trust Account (money market funds) | 1 | $ | $ | |||||||||
| Liabilities: | ||||||||||||
| Warrant liability | 3 | $ | $ | |||||||||
There were transfers between levels of the fair value hierarchy during the six months ended June 30, 2026.
Note 6 — Public Rights
The Company issued
The Public Rights are classified as permanent equity under ASC 815-40 because they are indexed to the Company’s own stock and do not contain any net-cash settlement provisions. Accordingly,
The Company measured the fair value of the Public Rights at the IPO date using a probability-weighted expected return method (PWERM) based on a de-SPAC probability estimate of
13
CROWN RESERVE ACQUISITION CORP. I
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2026
(Unaudited)
Note 7 — Class A Ordinary Shares Subject to Possible Redemption
All
The following table summarizes the Class A ordinary shares subject to possible redemption activity for the six months ended June 30, 2026:
| Balance at December 31, 2025 | $ | |||
| Plus: Trust dividends earned during the period (three months ended March 31, 2026) | ||||
| Balance at March 31, 2026 | ||||
| Plus: Trust dividends earned during the period (three months ended June 30, 2026) | ||||
| Balance at June 30, 2026 | $ |
All accretion during the six months ended June 30, 2026 was charged entirely to accumulated deficit, as additional paid-in capital was exhausted as of December 31, 2025.
Note 8 — Commitments and Contingencies
Registration and Shareholder Rights
The holders of the Founder Shares, Private Placement Units, and any shares that may be issued upon conversion of Working Capital Loans (and all underlying securities) are entitled to registration rights pursuant to a Registration and Shareholder Rights Agreement dated November 7, 2025, requiring the Company to register such securities for resale. 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. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to completion of a Business Combination and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. However, the Registration and Shareholder Rights Agreement provides that the Company will not be required to effect or permit any registration or cause any registration statement to become effective until the securities covered thereby are released from their lock-up restrictions. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
Underwriting Agreement
The underwriters were entitled to an upfront underwriting commission of
Business Combination Agreement
As described in Note 1, on March 30, 2026, the Company entered into the Business Combination Agreement with Merger Sub and Carvix. Consummation of the transactions contemplated by the Business Combination Agreement is subject to customary conditions, including approval by the Company’s stockholders, the SEC declaring effective the related Registration Statement on Form S-4, and Nasdaq listing of the post-transaction company’s common stock. The Outside Date for consummation is September 30, 2026.
14
CROWN RESERVE ACQUISITION CORP. I
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2026
(Unaudited)
Note 9 — 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
Warrants
Each whole redeemable warrant entitles the registered holder to purchase one Class A ordinary share at a price of $
Rights
Each Public Right entitles the registered holder to receive one-fifth (1/5) of one Class A ordinary share upon consummation of an initial Business Combination. See Note 6 for accounting treatment of the rights.
15
CROWN RESERVE ACQUISITION CORP. I
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2026
(Unaudited)
Note 10 — Net Income Per Ordinary Share — Two-Class Method
The Company complies with the accounting and disclosure requirements of ASC 260, “Earnings Per Share.” Net income (or net loss) per ordinary share is computed by dividing net income (or net loss) by the weighted-average number of ordinary shares outstanding during the period. The Company applies the two-class method in calculating net income (or net loss) per ordinary share, as both Class A and Class B ordinary shares participate equally in dividends and other distributions. The accretion of Class A ordinary shares to redemption value is excluded from earnings (loss) per share as it is a direct equity transaction.
The following table reflects the calculation of basic and diluted net income per ordinary share for the three and six months ended June 30, 2026:
| Three Months Ended June 30, 2026 | Six Months Ended June 30, 2026 | |||||||||||||||
| Class A | Class B | Class A | Class B | |||||||||||||
| Allocation of net income, basic and diluted | $ | $ | $ | $ | ||||||||||||
| Weighted-average shares outstanding, basic and diluted | ||||||||||||||||
| Net income per ordinary share, basic and diluted | $ | $ | $ | $ | ||||||||||||
For the three months ended June 30, 2025 and the period from April 29, 2025 (inception) through June 30, 2025, net income of $
During the three and six months ended June 30, 2026, the Company had
Note 11 — Segment Reporting
The Company complies with ASC 280, “Segment Reporting,” which establishes standards for reporting information about operating segments. 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”) in deciding how to allocate resources and assess performance.
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CROWN RESERVE ACQUISITION CORP. I
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2026
(Unaudited)
The CODM assesses performance for the single segment and decides how to allocate resources based on net income (or net loss) as reported on the statements of operations. The measure of segment assets is reported on the balance sheet as total assets. Net income (or net loss) is reviewed and monitored by the CODM to manage and forecast cash to ensure adequate capital is available to complete a Business Combination or similar transaction within the Combination Period. The significant segment expenses provided to the CODM on a regular basis are general and administrative costs and professional fees; other components included in net income (or net loss) are reported on the statements of operations and described within their respective disclosures.
The following table summarizes the significant segment expense and other income items reviewed by the CODM:
| Three Months Ended June 30, 2026 | Six Months Ended June 30, 2026 | |||||||
| General and administrative expenses | $ | $ | ||||||
| Professional fees | ||||||||
| Dividends earned on marketable securities held in Trust Account | ||||||||
Note 12 — Subsequent Events
In accordance with ASC 855, “Subsequent Events,” the Company has evaluated subsequent events and transactions that occurred after the balance sheet date through the date these condensed financial statements were available to be issued. Based on this review, the Company did not identify any subsequent events that would have required adjustment or disclosure in the condensed financial statements.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
References in this Quarterly Report on Form 10-Q (this “Quarterly Report”) to “we,” “us,” “our” or the “Company” refer to Crown Reserve Acquisition Corp. I. References to our “management” or our “management team” refer to our officers and directors, and references to the “Sponsor” refer to Crown Acquisition Sponsor LLC. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with our condensed financial statements and the related notes thereto contained elsewhere in this Quarterly Report and our audited financial statements and the related notes thereto for the period from April 29, 2025 (inception) through December 31, 2025 included in our Annual Report on Form 10-K filed with the SEC. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.
Special Note Regarding Forward-Looking Statements
This Quarterly Report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act that are not historical facts and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements, other than statements of historical fact, included in this Quarterly Report including, without limitation, statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding the Company’s financial position, business strategy, the Business Combination Agreement with Carvix, and the plans and objectives of management for future operations, are forward-looking statements. Words such as “expect,” “believe,” “anticipate,” “intend,” “estimate,” “seek” and variations and similar words and expressions are intended to identify such forward-looking statements. Such forward-looking statements relate to future events or future performance, but reflect management’s current beliefs, based on information currently available. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the Risk Factors section of the Company’s Annual Report on Form 10-K filed with the SEC. The Company’s securities filings can be accessed on the EDGAR section of the SEC’s website at www.sec.gov. Except as expressly required by applicable securities law, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.
Overview
We are a blank check company incorporated as a Cayman Islands exempted company on April 29, 2025, formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. We intend to effectuate our Business Combination using cash from the Trust Account, our shares, debt, or a combination of cash, shares and debt.
On November 10, 2025, we consummated our IPO of 17,250,000 Units at a price of $10.00 per Unit, generating gross proceeds of $172,500,000. Simultaneously with the closing of the IPO, we consummated the sale of 375,000 Private Placement Units at a price of $8.00 per Private Placement Unit (175,000 to the Sponsor and 200,000 to Polaris), generating gross proceeds of $3,000,000. Following the closing of the IPO, $172,500,000 was placed in the Trust Account.
On March 30, 2026, we entered into the Business Combination Agreement with Merger Sub and Carvix. Subject to the terms and conditions of the Business Combination Agreement, we will effect a domestication to Delaware, and immediately thereafter Merger Sub will merge with and into Carvix, with Carvix surviving as our wholly owned subsidiary. The Outside Date for consummation of the transactions is September 30, 2026. See Note 1 to the condensed financial statements for additional information regarding the Business Combination Agreement.
We expect to continue to incur significant costs in the pursuit of our Business Combination plans. We cannot assure you that our plans to complete a Business Combination will be successful.
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Results of Operations
We have neither engaged in any principal operations nor generated any revenues to date. Our only activities since inception have been organizational activities, those necessary to prepare for the IPO, and, after the IPO, identifying a target company for a Business Combination, including the entry into the Business Combination Agreement on March 30, 2026. We will not generate any operating revenues until after the completion of our Business Combination. We generate non-operating income in the form of dividends earned on investments held in the Trust Account, and we recognize changes in fair value of our warrant liability each reporting period.
For the three months ended June 30, 2026, we had net income of $1,353,765, consisting of dividends earned on marketable securities held in the Trust Account of $1,548,367, partially offset by general and administrative costs of $53,125, professional fees of $25,000, and a loss on the change in fair value of warrant liability of $116,477.
For the six months ended June 30, 2026, we had net income of $1,090,272, consisting of dividends earned on marketable securities held in the Trust Account of $3,073,108, partially offset by general and administrative costs of $121,962, professional fees of $140,000, and a loss on the change in fair value of warrant liability of $1,720,874.
For the three months ended June 30, 2025 and for the period from April 29, 2025 (inception) through June 30, 2025, we had net income of $53, consisting of interest income. Activity in the comparative periods was limited to our formation and preparation for the IPO.
Liquidity and Capital Resources
As of June 30, 2026, we held no cash outside the Trust Account, had a working capital deficit, and are dependent on Sponsor funding and/or additional financing to fund operations and transaction costs. The Sponsor pays all formation and operating costs on the Company’s behalf. Amounts paid by the Sponsor on the Company’s behalf are recorded as a reduction of the Due from related party balance, which represents Private Placement proceeds received by the Sponsor on the Company’s behalf that were designated for use outside the Trust Account, net of formation and operating costs paid by the Sponsor and other amounts owed to the Sponsor. As of June 30, 2026, the due from related party balance was $72,476, compared to $210,670 as of March 31, 2026 and $448,082 as of December 31, 2025.
As of June 30, 2026, we had investments held in the Trust Account of $176,476,946. We intend to use substantially all of the funds held in the Trust Account, including any amounts representing dividends or interest earned on the Trust Account (less any income taxes payable), to complete our Business Combination.
For the six months ended June 30, 2026, net cash used in operating activities was $375,606. Our net income of $1,090,272 was adjusted to reconcile to operating cash flows by a non-cash add-back of $1,720,874 representing the loss on the change in fair value of the warrant liability and reduced by $3,073,108 of dividends earned on investments held in the Trust Account that were reinvested in the Trust Account and did not represent cash inflows; the remaining operating cash usage primarily reflected a $41,933 increase in prepaid expenses and a $71,711 decrease in accounts payable and accrued expenses. Net cash provided by financing activities of $375,606 represented advances from the Sponsor, net, used to fund operating costs paid by the Sponsor on the Company’s behalf.
In order to fund working capital deficiencies or finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor or certain of our officers and directors may, but are not obligated to, loan us funds as may be required. If we complete a Business Combination, we would repay such loaned amounts. In the event that a Business Combination does not close, we may use a portion of the working capital held outside the Trust Account to repay such loaned amounts but no proceeds from our Trust Account would be used for such repayment. Up to $5,000,000 of such Working Capital Loans may be convertible into Private Placement Units at a price of $8.00 per unit, at the option of the lender.
We do not currently hold any cash outside the Trust Account. Our operating costs prior to the consummation of the Business Combination are limited and are paid by the Sponsor on our behalf and recorded against the Due from related party balance, which was $72,476 as of June 30, 2026. Transaction costs associated with the Business Combination, including legal, accounting and advisory fees incurred in connection with the Registration Statement on Form S-4 and the Closing, are expected to be paid at or following the Closing from the funds released from the Trust Account. The Sponsor is not obligated to advance funds to us, and no amounts are outstanding under any Working Capital Loans. If the Sponsor were to discontinue funding our operating costs, or if our actual costs exceed our estimates, we would need to obtain additional financing, which may take the form of Working Capital Loans of up to $5,000,000 convertible into Private Placement Units at $8.00 per unit at the option of the lender, or the issuance of additional securities or the incurrence of debt in connection with the Business Combination. There can be no assurance that such financing would be available on acceptable terms, or at all. These conditions are among the factors considered in our going concern assessment described below.
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Going Concern
In connection with our assessment of going concern considerations in accordance with ASC 205-40, “Presentation of Financial Statements — Going Concern,” management has determined that the mandatory liquidation date and subsequent dissolution, should a Business Combination not occur, raise substantial doubt about our ability to continue as a going concern. Because we entered into the Business Combination Agreement on March 30, 2026, the Combination Period was automatically extended by three months from November 10, 2026, and we must complete a Business Combination by February 10, 2027. No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to liquidate after the Combination Period.
Off-Balance Sheet Financing Arrangements
We have no obligations, assets or liabilities that would be considered off-balance sheet arrangements as of June 30, 2026. We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements. We have not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any non-financial assets.
Contractual Obligations
We do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities.
The underwriting agreement provides that Polaris is entitled to a deferred underwriting commission of $300,000. The deferred underwriting commission will become payable to Polaris from the amounts held in the Trust Account solely in the event we complete a Business Combination, subject to the terms of the underwriting agreement.
Critical Accounting Estimates
The preparation of condensed financial statements and related disclosures in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and income and expenses during the periods reported. Actual results could materially differ from those estimates. We have identified the following critical accounting estimates:
Class A Ordinary Shares Subject to Possible Redemption
We account for our Class A ordinary shares subject to possible redemption in accordance with the guidance in ASC 480, “Distinguishing Liabilities from Equity.” Conditionally redeemable ordinary shares (including ordinary shares that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within our control) are classified as temporary equity. All 17,250,000 Class A ordinary shares sold in the IPO feature certain redemption rights that are considered to be outside of our control, and therefore are classified as temporary equity at the redemption value.
Warrant Liabilities
We account for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in ASC 480 and ASC 815. The Public Warrants are accounted for as liabilities in accordance with ASC 815-40, with changes in fair value presented within change in fair value of warrant liability in our statements of operations. The fair value of the Public Warrants is estimated using a 500-step Cox-Ross-Rubinstein binomial lattice model. See Note 5 to the condensed financial statements for additional information.
Recent Accounting Pronouncements
Management does not believe that any recently issued, but not yet effective, accounting pronouncements would have a material effect on the Company’s condensed financial statements.
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Item 3. Quantitative and Qualitative Disclosures About Market Risk.
As a smaller reporting company, we are not required to provide the information required by 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 the reports we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, to allow timely decisions regarding required disclosures.
Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures as of June 30, 2026, the end of the fiscal quarter covered by this Quarterly Report. Based upon their evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were not effective as of June 30, 2026 due to the material weakness in internal control over financial reporting described in our Annual Report on Form 10-K for the period ended December 31, 2025, which has not been fully remediated as of June 30, 2026.
Material Weakness
As previously disclosed in our Annual Report on Form 10-K for the period from April 29, 2025 (inception) through December 31, 2025, management identified a material weakness in our internal control over financial reporting in connection with the accounting for complex financial instruments — specifically, the initial classification and valuation of warrant liabilities and the valuation of Public Rights. Notwithstanding the material weakness in our internal control over financial reporting, our management has concluded that the unaudited condensed financial statements included in this Quarterly Report on Form 10-Q present fairly, in all material respects, our financial position, results of operations and cash flows for the periods presented in conformity with U.S. GAAP.
Remediation Plan
In response to the material weakness, we are continuing to enhance our internal control over financial reporting through (i) the engagement of external accounting and SEC reporting professionals with expertise in evaluating and accounting for complex financial instruments under U.S. GAAP, (ii) additional supervisory review of complex transactions and related accounting analyses, and (iii) ongoing training of our personnel involved in financial reporting. We will continue to monitor the effectiveness of these remediation activities and will make any further changes that management determines to be appropriate.
Changes in Internal Control Over Financial Reporting
Other than the remediation activities described above, there were no changes in our internal control over financial reporting during the fiscal quarter ended June 30, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II — OTHER INFORMATION
Item 1. Legal Proceedings.
From time to time, we may be involved in litigation relating to claims arising in the ordinary course of our business. We are not currently a party to any material legal proceedings.
Item 1A. Risk Factors.
Factors that could cause our actual results to differ materially from those in this Quarterly Report include the risk factors described in our Annual Report on Form 10-K for the period from April 29, 2025 (inception) through December 31, 2025, filed with the SEC, and the risk factors related to our entry into the Business Combination Agreement with Carvix set forth in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2026. As of the date of this Quarterly Report, there have been no material changes to the risk factors disclosed in such reports.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Unregistered Sales of Equity Securities
There were no unregistered sales of equity securities during the three months ended June 30, 2026 that were not previously reported on a Current Report on Form 8-K.
Use of Proceeds from the Initial Public Offering
On November 10, 2025, the Company consummated its IPO of 17,250,000 Units at $10.00 per Unit, generating gross proceeds of $172,500,000. Polaris Advisory Partners acted as the representative of the underwriters in the IPO. The securities sold in the IPO were registered under the Securities Act on a registration statement on Form S-1 (Registration No. 333-289717), which was declared effective on September 26, 2025. Simultaneously with the consummation of the IPO, the Company consummated the private placement of an aggregate of 375,000 Private Placement Units at $8.00 per unit (175,000 to the Sponsor and 200,000 to Polaris) generating gross proceeds of $3,000,000. The issuances of the Private Placement Units were not registered under the Securities Act in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act.
Of the gross proceeds received from the IPO, the exercise of the over-allotment option, and the sale of the Private Placement Units, $172,500,000 was placed in the Trust Account. There has been no material change in the planned use of proceeds from the IPO and the sale of the Private Placement Units as described in our final prospectus dated September 26, 2025.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
During the three months ended June 30, 2026, no director or officer of the Company
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Item 6. Exhibits.
The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report.
| * | Filed herewith. |
| ** | Furnished herewith. |
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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.
| CROWN RESERVE ACQUISITION CORP. I | ||
| Date: August 12, 2026 | By: | /s/ Prashant Patel |
| Name: | Prashant Patel | |
| Title: | Chief Executive Officer (Principal Executive Officer) | |
| Date: August 12, 2026 | By: | /s/ Eric Sherb |
| Name: | Eric Sherb | |
| Title: | Chief Financial Officer (Principal Financial and Accounting Officer) |
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