CSLM Digital Asset Acquisition Corp III, Ltd 10-Q for FY2026 Q3
CSLM Digital Asset Acquisition Corp III, Ltd (KOYN)
About this 10-Q
CSLM Digital Asset Acquisition Corp III, Ltd filed this 10-Q on November 6, 2026, covering the quarter ended September 30, 2026 (FY2026 Q3).
CSLM Digital Asset Acquisition Corp III, Ltd agreed on October 6, 2026 to combine with First Digital Group Ltd., valuing First Digital at $250 million, subject to adjustment. The transaction requires shareholder approvals and must close within six (6) months of the agreement. AI summary
Headline figures
Quarter ended September 30, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Net income
- $1.57M
- up 1621.1% from net income of $91.07K a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form
(Mark One)
For the quarterly period ended
OR
For the transition period from to
Commission file number:
(Exact name of registrant as specified in its charter)
000-00000
| N/A | ||
| (State or other jurisdiction of incorporation) |
(I.R.S. Employer Identification No.) |
| (Address of Principal Executive Offices) | (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 | ||
| The Stock Market LLC | ||||
| The Stock Market LLC | ||||
| The Stock Market LLC |
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 and post 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 the definition 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).
As of November 6, 2026, there were Class A ordinary shares, par value $0.0001, issued and outstanding, and Class B ordinary shares, $0.0001 par value, issued and outstanding.
TABLE OF CONTENTS
i
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements.
CSLM Digital Asset Acquisition Corp III, Ltd
CONDENSED BALANCE SHEETS
| September 30, 2026 |
December 31, 2025 |
|||||||
| (Unaudited) | ||||||||
| Assets: | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Prepaid expenses – current | ||||||||
| Total current assets | ||||||||
| Non-current assets | ||||||||
| Treasury Securities held in Trust Account | ||||||||
| Prepaid expenses – non-current | ||||||||
| Total non-current assets | ||||||||
| Total Assets | $ | $ | ||||||
| Liabilities, Class A Ordinary Shares Subject to Redemption, and Shareholders’ Deficit: | ||||||||
| Current liabilities | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued expenses | ||||||||
| Consulting services payable – related party | ||||||||
| Due to related party | ||||||||
| Total current liabilities | ||||||||
| Non-current liabilities | ||||||||
| Deferred underwriting commissions | ||||||||
| Total non-current liabilities | ||||||||
| Total Liabilities | ||||||||
| Commitments and Contingencies (Note 7) | ||||||||
| Class A ordinary shares, $ par value, shares authorized, shares subject to possible redemption issued and outstanding at redemption value | ||||||||
| Shareholders’ Deficit | ||||||||
| Preference shares, $ par value, shares authorized; issued and outstanding | ||||||||
| Class A ordinary shares, $par value, shares authorized; shares issued and outstanding (excluding 23,000,000 shares subject to possible redemption) | ||||||||
| Class B ordinary shares, $ par value; shares authorized; shares issued and outstanding | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( |
) | ( |
) | ||||
| Total Shareholders’ Deficit | ( |
) | ( |
) | ||||
| Total Liabilities, Class A Ordinary Shares Subject to Redemption, and Shareholders’ Deficit | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed financial statements.
1
CSLM Digital Asset Acquisition Corp III, Ltd
CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
| For the Three Months Ended September 30, |
For the Nine Months Ended September 30, |
|||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Loss from operations: | ||||||||||||||||
| Formation, general and administrative expenses | $ | $ | $ | $ | ||||||||||||
| Insurance expense | ||||||||||||||||
| Listing fees | ||||||||||||||||
| Net loss from operations | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| Other income (expense): | ||||||||||||||||
| Interest income on Trust Account | ||||||||||||||||
| Interest income on money market mutual fund | ||||||||||||||||
| Share based compensation expense | ( |
) | ( |
) | ||||||||||||
| Net other income | ||||||||||||||||
| Net income (loss) | $ | $ | $ | $ | ( |
) | ||||||||||
| Basic and diluted weighted average Class A ordinary shares subject to possible redemption outstanding | ||||||||||||||||
| Basic and diluted net income per Class A ordinary shares subject to possible redemption | $ | $ | $ | $ | ||||||||||||
| Basic and diluted weighted average Class A & Class B ordinary shares not subject to possible redemption outstanding | ||||||||||||||||
| Basic and diluted net loss per Class A & Class B ordinary shares not subject to possible redemption | $ | ) | $ | ) | $ | ) | $ | ) | ||||||||
The accompanying notes are an integral part of these unaudited condensed financial statements.
2
CSLM Digital Asset Acquisition Corp III, Ltd
CONDENSED STATEMENTS OF SHAREHOLDERS’ DEFICIT
(UNAUDITED)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2026
| Class A ordinary shares |
Class B ordinary shares |
Additional Paid-In |
Accumulated | Total Shareholder’s |
||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Deficit | Deficit | ||||||||||||||||||||||
| Balance as of January 1, 2026 | $ | $ | $ | $ | ( |
) | $ | ( |
) | |||||||||||||||||||
| Accretion of Class A ordinary shares to redemption value | - | - | ( |
) | ( |
) | ||||||||||||||||||||||
| Net income | - | - | ||||||||||||||||||||||||||
| Balance as of March 31, 2026 | ( |
) | ( |
) | ||||||||||||||||||||||||
| Accretion of Class A ordinary shares to redemption value | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Net income | - | - | ||||||||||||||||||||||||||
| Balance as of June 30, 2026 | ( | ) | ( | ) | ||||||||||||||||||||||||
| Accretion of Class A ordinary shares to redemption value | - | - | ( |
) | ( |
) | ||||||||||||||||||||||
| Net income | - | - | ||||||||||||||||||||||||||
| Balance as of September 30, 2026 | $ | $ | $ | $ | ( |
) | $ | ( |
) | |||||||||||||||||||
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2025
| Class A ordinary shares |
Class B ordinary shares |
Additional Paid-In |
Accumulated |
Total Shareholder’s |
||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Deficit | Deficit | ||||||||||||||||||||||
| Balance as of January 1, 2025 | $ | $ | $ | $ | ( |
) | $ | ( |
) | |||||||||||||||||||
| Class B ordinary shares issued to Sponsor(1) | - | |||||||||||||||||||||||||||
| Net loss | - | - | ( |
) | ( |
) | ||||||||||||||||||||||
| Balance as of March 31, 2025 | ( |
) | ( |
) | ||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Balance as of June 30, 2025 | ( | ) | ( | ) | ||||||||||||||||||||||||
| Sale of Units in IPO | - | - | ||||||||||||||||||||||||||
| Sale of Private Placement Units | 891,250 | - | ||||||||||||||||||||||||||
| Allocated value of transaction costs to Warrants | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Transfer of Class B ordinary shares to Directors | - | - | ||||||||||||||||||||||||||
| Remeasurement of temporary equity to redemption value | - | - | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||
| Net income | - | - | ||||||||||||||||||||||||||
| Balance as of September 30, 2025 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
| (1) |
The accompanying notes are an integral part of these unaudited condensed financial statements.
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CSLM Digital Asset Acquisition Corp III, Ltd
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
For
the |
||||||||
| 2026 | 2025 | |||||||
| Cash Flows from Operating Activities: | ||||||||
| Net income (loss) | $ | $ | ( |
) | ||||
| Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||||||||
| Interest income on Trust Account | ( |
) | ( |
) | ||||
| Share based compensation expense | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Prepaid expenses | ( |
) | ||||||
| Accounts payable | ( |
) | ||||||
| Accrued expenses | ||||||||
| Consulting services payable – related party | ||||||||
| Net cash used in operating activities | ( |
) | ( |
) | ||||
| Cash Flows from Investing Activities: | ||||||||
| Investment in Trust Account | ( |
) | ||||||
| Net cash used in investing activities | ( |
) | ||||||
| Cash Flows from Financing Activities: | ||||||||
| Proceeds from sale of Units | ||||||||
| Proceeds from sale of Private Placement Units | ||||||||
| Payment of underwriter fees and commissions | ( |
) | ||||||
| Proceeds from issuance of Class B ordinary shares | ||||||||
| Proceeds from promissory note – related party | ||||||||
| Payment of promissory note – related party | ( |
) | ||||||
| Payment of offering costs | ( |
) | ||||||
| Net cash provided by financing activities | ||||||||
| Net change in cash and cash equivalents | ( |
) | ||||||
| Cash and cash equivalents – beginning of period | ||||||||
| Cash and cash equivalents – end of period | $ | $ | ||||||
| Supplemental disclosure of non-cash investing and financing activities: | ||||||||
| Initial fair value of Class A ordinary shares subject to possible redemption | $ | $ | ||||||
| Remeasurement of Class A ordinary shares to redemption value | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed financial statements.
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CSLM Digital Asset Acquisition Corp III, Ltd
NOTES TO THE UNAUDITED CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2026
Note 1 — Organization and Business Operations
CSLM Digital Asset Acquisition Corp III, Ltd (formerly known as, CSLM Acquisition Corporation II, Ltd) (the “Company”) is a blank check company incorporated as a Cayman Islands exempted company on July 26, 2024. The Company was incorporated for the purpose of entering into a merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization or similar business combination with one or more businesses (the “Business Combination”). The Company has selected December 31 as its fiscal year end.
As of September 30, 2026, the Company has not commenced any operations. All activity for the period from July 26, 2024 (inception) through September 30, 2026 relates to the Company’s formation and the Initial Public Offering (as defined below), the Company’s search for a target business and the negotiation of and entry into the Business Combination Agreement. The Company will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest. The Company may generate non-operating income in the form of interest income on cash, cash equivalents, and United States Treasury Securities and dividend income from marketable securities purchased from the proceeds derived from the Initial Public Offering (as defined below).
On August 28, 2025, the Company consummated the initial public offering (the “Initial Public Offering”) of units (the “Units”), including the full exercise by the underwriters of their over-allotment option in the amount of Units, at $ per Unit, generating gross proceeds of $
Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of units (the “Private Units” and, with respect to the Class A ordinary shares included in the Private Units being offered, the “Private Placement Shares”) at a price of $ per Private Placement Unit, in a private placement to the Company’s sponsor, CSLM Acquisition Sponsor II, Ltd (the “Sponsor”), and Cohen & Company Capital Markets, a division of Cohen & Company Securities, LLC (“CCM”), the representative of the underwriter in the Initial Public Offering, generating gross proceeds of $. Each Private Unit consists of one Class A ordinary share and one-half of one redeemable warrant (the “Private Placement Warrants” and together with the Public Warrants, the “Warrants”). Each whole Warrant entitles the holder to purchase one Class A ordinary share at a price of $11.50 per share, subject to adjustment.
Transaction costs amounted to $
The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering and the Private Placement Units, although substantially all of the net proceeds are intended to be generally applied toward consummating a Business Combination (less deferred underwriting commissions).
The Company’s Business Combination must be with one or more target businesses that together have a fair market value equal to at least
5
Following the closing of the Initial Public Offering, an aggregate of $ per Unit sold in the Initial Public Offering, or $
The Company will provide the Company’s public shareholders with the opportunity to redeem all or a portion of their Public Shares, regardless of whether they abstain, vote for, or vote against, our initial Business Combination upon completion of our initial Business Combination either (i) in connection with a general meeting called to approve the initial Business Combination or (ii) without a shareholder vote by means of a tender offer. The decision as to whether the Company will seek shareholder approval of a proposed initial 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 shares at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account calculated as of two business days prior to the consummation of the initial Business Combination, including interest earned on the funds held in the Trust Account (less taxes payable), divided by the number of then outstanding Public Shares, subject to the limitations. The amount in the Trust Account is initially $ per Public Share. The ordinary shares subject to redemption will be recorded at redemption value and classified as temporary equity upon the completion of the Initial Public Offering, in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 480, “Distinguishing Liabilities from Equity.”
The Company will have only the duration of the Completion Window to complete the initial Business Combination. However, if the Company is unable to complete its initial Business Combination within the Completion Window, the Company will as promptly as reasonably possible but not more than ten business days thereafter, redeem the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account (net of amounts withdrawn to pay our taxes and up to $
6
The Sponsor, officers and directors have entered into a letter agreement with the Company, pursuant to which they agreed to waive their redemption rights with respect to any shares held by them in connection with the completion of our initial Business Combination. Additionally, the Sponsor, officers and directors agreed to waive their rights to liquidating distributions from the Trust Account with respect to their founder shares and Private Placement Shares if we fail to complete our initial business combination within the prescribed time frame, although they will be entitled to liquidating distributions from assets outside the Trust Account. If we do not complete the initial Business Combination within the prescribed time frame, the Private Units (and the securities comprising such units) will be worthless. Furthermore, the Sponsor, officers and directors agreed not to transfer, assign or sell any of their founder shares and any Class A ordinary shares issuable upon conversion thereof until the earlier to occur of: (i) six months after the completion of a Business Combination and (ii) subsequent to a Business Combination, the date on which the Company consummates a subsequent liquidation, merger, share exchange or other similar transaction which results in all of the Company’s shareholders having the right to exchange their Class A Ordinary Shares for cash, securities or other property. Any permitted transferees will be subject to the same restrictions and other agreements of the Company’s initial shareholders with respect to any founder shares (the “Lock-up”). Notwithstanding the foregoing, if the Company consummates a transaction after the initial Business Combination which results in the Company’s shareholders having the right to exchange their shares for cash, securities or other property, the founder shares will be released from the Lock-up.
The Company’s Sponsor agreed that it will 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, 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 amount of funds in the Trust Account to below the lesser of (i) $10.00 per Public Share and (ii) the actual amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account, if less than $10.00 per share due to reductions in the value of the trust assets, less taxes payable, provided that such liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights to the monies held in the Trust Account (whether or not such waiver is enforceable) nor will it apply to any claims under the Company’s indemnity of the underwriter of the Initial Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). However, the Company has not asked the Sponsor to reserve for such indemnification obligations, nor has the Company independently verified whether the Sponsor has sufficient funds to satisfy its indemnity obligations and the Company believes that the Sponsor’s only assets are securities of the Company. Therefore, the Company cannot assure that the Sponsor would be able to satisfy those obligations.
Business Combination Agreement
Subsequent to September 30, 2026, the Company entered into a business combination agreement (the “Business Combination Agreement”) with First Digital Group Ltd., a Gibraltar private company (“First Digital”), CSLM III Holdings Ltd, a Cayman Islands exempted company and a wholly-owned subsidiary of the Company (“PubCo”). The Company will establish a Cayman Islands exempted company limited by shares (“Merger Sub”), as a direct wholly-owned subsidiary of the Company, for the purpose of effectuating the transactions contemplated by the Business Combination Agreement.
Pursuant to the Business Combination Agreement, among other things, (i) First Digital will re-domicile from Gibraltar to the Cayman Islands and transfer by way of continuation as an exempted company limited by shares in the Cayman Islands (the “Re-domiciliation and Continuation”); (ii) following the Re-domiciliation and Continuation, the Company will merge with and into PubCo (the “Reincorporation Merger”), with PubCo being the surviving entity and Merger Sub becoming a wholly-owned subsidiary of PubCo; and (iii) following the Reincorporation Merger, Merger Sub will merge with and into First Digital (the “Acquisition Merger” and, together with the Reincorporation Merger, the “Mergers”) with First Digital being the surviving entity and becoming a wholly-owned subsidiary of PubCo.
Reincorporation Merger
In connection with the Reincorporation Merger, at the Reincorporation Merger Effective Time:
| ● | each issued and outstanding Unit immediately prior to the Reincorporation Merger Effective Time will be separated automatically into its constituent securities (i.e., one Class A Ordinary Share and one-half of an Acquiror Warrant); |
7
| ● | each issued and outstanding Class B Ordinary Share immediately prior to the Reincorporation Merger Effective Time will be automatically cancelled and cease to exist in exchange for one newly issued PubCo Class A Ordinary Share; |
| ● | each issued and outstanding Class A Ordinary Share immediately prior to the Reincorporation Merger Effective Time (including the Class A Ordinary Share from the separation of the Units) will be automatically cancelled and cease to exist in exchange for one newly issued PubCo Class A Ordinary Share; and |
| ● | each issued and outstanding Warrant immediately prior to the Reincorporation Merger Effective Time (including the Warrants from the separation of the Units) will cease to be a warrant with respect to Class A Ordinary Shares and be converted automatically into a PubCo Warrant to purchase one PubCo Class A Ordinary Share at $11.50 per share. |
Acquisition Merger and Merger Consideration
At least one Business Day following the Reincorporation Merger and the Re-domiciliation and Continuation (subject to the completion of the Reincorporation Merger and the Re-domiciliation and Continuation having occurred) but in any event within three Business Days after the Reincorporation Merger Effective Time, subject to the terms and conditions set forth in the Business Combination Agreement, the Acquisition Merger shall take place.
In connection with the Acquisition Merger, at the Acquisition Merger Effective Time:
| ● | each ordinary share of First Digital (each, a “Company Exchanging Share” as defined in the Business Combination Agreement) that is held by Mr. Vincent Chok shall automatically be cancelled and cease to exist in exchange for such number of newly issued PubCo Class B Ordinary Shares that is equal to the Exchange Ratio (as defined in the Business Combination Agreement), as applicable, as determined in accordance with the Business Combination Agreement, based on a total valuation of First Digital (the “Company Valuation” as defined in the Business Combination Agreement) of $250 million, subject to adjustment provided in the Business Combination Agreement. |
| ● | each Company Exchanging Share that is held by any person other than Mr. Vincent Chok shall automatically be cancelled and cease to exist in exchange for such number of newly issued PubCo Class A Ordinary Shares that is equal to the Exchange Ratio, as applicable, as determined in accordance with the Business Combination Agreement, based on a total Company Valuation of $250 million, subject to adjustment provided in the Business Combination Agreement. |
| ● | each FDG Token (a token that confers the holder thereof an option exercisable into a First Digital Preference Share) that is outstanding and vested and not converted into First Digital Preference Shares prior to the Acquisition Merger Effective Time shall automatically be cancelled and cease to exist in exchange for the right to receive from Nemi Limited (“Nemi”) the number of PubCo Class A Ordinary Shares that any one First Digital Preference Share was exchanged for at the Acquisition Merger Effective Time, to be transferred by Nemi to the holder of such FDG Token. |
| ● | each FDG Token that is not vested prior to the Acquisition Merger Effective Time shall automatically be cancelled and cease to exist without any conversion thereof or payment or other consideration therefor, provided that the board of directors of PubCo, in its sole discretion, may decide to re-grant options or other equity awards under the PubCo Equity Incentive Plan to the holders of such unvested FDG Tokens after the Acquisition Merger Effective Time. |
| ● | the warrants issued by First Digital on or around the date of the Business Combination Agreement (the “Binance Company Warrant”) to Alphanest Holdings Ltd (the “Binance Warrantholder”), a company organized and existing under the laws of the United Arab Emirates, shall automatically be terminated and expire in exchange for the warrants issued by PubCo to the Binance Warrantholder (the “Binance PubCo Warrant”) that entitles the Binance Warrantholder to subscribe for a number of PubCo Class A Ordinary Shares equal to the number of the unsubscribed FDG Warrant Shares (as defined in the Binance PubCo Warrant) multiplied by the Exchange Ratio. |
8
| ● | the warrants issued by First Digital on or around the date of the Business Combination Agreement (the “Noble Elite Company Warrant”) to Noble Elite Ltd (the “Noble Elite”), a company organized and existing under the laws of the Cayman Islands, shall automatically be terminated and expire in exchange for the warrants issued by PubCo to Noble Elite (the “Noble Elite PubCo Warrant”) that entitles Noble Elite to subscribe for a number of PubCo Class A Ordinary Shares equal to the number of the unsubscribed FDG Warrant Shares (as defined in the Noble Elite PubCo Warrant) multiplied by the Exchange Ratio. |
| ● | PubCo shall issue 5,000,000 PubCo Class B Ordinary Shares to Mr. Vincent Chok as transaction bonus shares. |
Sponsor Support Agreement. Concurrently with the execution of the Business Combination Agreement, the Company, First Digital and the Sponsor entered into a sponsor support agreement (the “Sponsor Support Agreement”), pursuant to which the Sponsor agreed, among other things, to vote all of its ordinary shares of the Company in favor of the Business Combination and the related proposals, and not to transfer or redeem its ordinary shares of the Company prior to the closing, subject to certain exceptions.
First Digital Shareholder Support Agreements; Lock-Up; Registration Rights. Concurrently with the execution of the Business Combination Agreement, Nemi, Mr. Vincent Chok and Noble Elite entered into shareholder support agreements pursuant to which they agreed, among other things, to vote their First Digital shares in favor of the Business Combination. At the closing, PubCo, the Sponsor and certain shareholders of First Digital will enter into a lock-up agreement and a registration rights agreement.
Termination
The Business Combination Agreement may be terminated by mutual written consent of First Digital and the Company and under certain circumstances, including, among other things: (i) by written notice from either First Digital or the Company to the other if any governmental authority has enacted, issued, promulgated, enforced or entered any law or governmental order that is then in effect and which has the effect of making the Acquisition Merger Closing or Reincorporation Merger Closing illegal or which otherwise prevents or prohibits consummation of either of the Mergers, other than any such restraint that is immaterial; (ii) by written notice to the Company from First Digital if the Acquiror Shareholder Approval (as defined in the Business Combination Agreement) has not been obtained by reason of the failure to obtain the required vote at the Acquiror Shareholders’ Meeting; (iii) by written notice to First Digital from the Company if there is any breach of any representation, warranty, covenant or agreement on the part of First Digital set forth in the Business Combination Agreement, except that, if such breach is curable by First Digital through the exercise of its reasonable best efforts within a certain period; (iv) by written notice from either First Digital or the Company to the other if the Acquisition Merger Closing has not occurred on or before the date that is six (6) months from the date of the Business Combination Agreement; (v) by written notice to First Digital from the Company if First Digital Shareholder Approval (as defined in the Business Combination Agreement) has not been obtained by reason of the failure to obtain the required vote at the First Digital Shareholders’ Meeting; or (vi) by written notice to the Company from First Digital if there is any breach of any representation, warranty, covenant or agreement on the part of the Company set forth in the Business Combination Agreement, except that, if such breach is curable by the Company through the exercise of its reasonable best efforts within a certain period.
See Form 8-K filed with the United States Securities and Exchange Commission (the “SEC”) on October 7, 2026 for further discussion on the Business Combination.
Liquidity, Capital Resources and Going Concern
As of
September 30, 2026 and December 31, 2025, the Company had $
The Company’s liquidity needs through September 30, 2026 had been satisfied through a payment from the Sponsor of $
9
The Company has until August 28, 2027 to consummate a Business Combination. It is uncertain that the Company will be able to consummate a Business Combination by this time. If a Business Combination is not consummated by this date, there will be a mandatory liquidation and subsequent dissolution.
Further, the Company has incurred and expects to continue to incur significant costs in pursuit of a Business Combination. In connection with the Company’s assessment of going concern considerations in accordance with Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” management has determined that these conditions raise substantial doubt about the Company’s ability to continue as a going concern. In addition, if the Company is unable to complete a Business Combination within the Completion Window (by August 28, 2027), the Company’s board of directors would proceed to commence a voluntary liquidation and thereby a formal dissolution of the Company. There is no assurance that the Company’s plans to consummate a Business Combination will be successful within the Completion Window. As a result, management has determined that such an additional condition also raises substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Note 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 (“U.S. GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X of the SEC. Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows.
In the opinion of Management, the accompanying unaudited condensed financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented.
The accompanying unaudited condensed financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, which contains the audited financial statements and notes thereto. The financial information as of December 31, 2025 is derived from the audited financial statements presented in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC on March 19, 2026. The interim results for the three and nine months ended September 30, 2026 are not necessarily indicative of the results to be expected for the year ending December 31, 2026 or for any future periods.
Emerging Growth Company Status
The Company is an “emerging growth company,” as defined in Section 2(a) of 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 Exchange Act) are required to comply with the new or revised financial accounting standards. 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, 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 which is neither an emerging growth company nor an emerging growth company 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 financial statements in conformity with U.S. GAAP requires 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 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. As of September 30,
2026 and December 31, 2025, the Company had $
Treasury Securities Held in Trust Account
As of
September 30, 2026 and December 31, 2025, the assets held in the Trust Account, amounting to $
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 limit of $
Offering Costs Associated with the Initial Public Offering
The Company complies with the requirements of the ASC 340-10-S99 and SEC Staff Accounting Bulletin Topic 5A, “Expenses of Offering.” Offering costs consist principally of professional and registration fees that are related to the Initial Public Offering. FASB 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 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. 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 Units were charged to shareholders’ deficit as Public Warrants and Private Placement Warrants after management’s evaluation were accounted for under equity treatment.
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 Measurements and Disclosures,” approximate the carrying amounts represented in the balance sheet, primarily due to their short-term nature.
Fair value is defined as the price that would be received for sale of an asset or paid to transfer a liability, in an orderly transaction between market participants at the measurement date. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include:
| ● | Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets; | |
| ● | Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and | |
| ● | Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. |
11
Income Taxes
The Company accounts for income taxes under ASC Topic 740, “Income Taxes,” which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed for differences between the financial statements and tax bases of assets and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
ASC Topic 740 prescribes a recognition threshold and a measurement attribute for the financial statements 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’s management determined that the Cayman Islands is the Company’s major tax jurisdiction. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. As of September 30, 2026 and December 31, 2025, there were no unrecognized tax benefits and no amounts accrued for interest and penalties. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position.
The Company is considered to be a Cayman Islands exempted company with no connection to any other taxable jurisdiction and is presently not subject to income taxes or income tax filing requirements in the Cayman Islands or the United States. As such, the Company’s tax provision was zero for the periods presented.
On July 4, 2025, President Trump signed into law the One Big Beautiful Bill Act (“OBBA”). ASC 740, “Income Taxes”, which requires the effects of changes in tax laws to be recognized in the period in which the legislation is enacted. The Company is currently evaluating the impact of the new law. However, none of the tax provisions are expected to have a significant impact on the Company’s financial statements.
Warrant Instruments
The Company accounts for the Public Warrants and Private Placement Warrants issued in connection with the Initial Public Offering and the private placement in accordance with the guidance contained in FASB ASC Topic 815, “Derivatives and Hedging”. Accordingly, the Company evaluated and classifies the warrant instruments under equity treatment at their relative fair values. There were
The Public Shares contain a redemption feature which allows for the redemption of such Public Shares in connection with the Company’s liquidation, or if there is a shareholder vote or tender offer in connection with the Company’s initial Business Combination. In accordance with ASC 480-10-S99, the Company classifies Public Shares subject to possible redemption outside of permanent equity as the redemption provisions are not solely within the control of the Company. The Company recognizes changes in redemption value immediately as they occur and will adjust the carrying value of redeemable shares to equal the redemption value at the end of each reporting period. Immediately upon the closing of the Initial Public Offering, the Company recognized the accretion from initial book value to redemption value. The change in the carrying value of redeemable shares will result in charges against additional paid-in capital (to the extent available) and accumulated deficit. Accordingly, as of September 30, 2026, Class A ordinary shares subject to possible redemption are presented at redemption value as temporary equity, outside of the shareholders’ deficit section of the Company’s balance sheet. As of September 30, 2026, the Class A ordinary shares subject to possible redemption reflected in the balance sheet are reconciled in the following table:
| Schedule of Class A ordinary shares subject to possible redemption | ||||
| Gross proceeds from Initial Public Offering | $ | |||
| Less: | ||||
| Proceeds allocated to public warrants | ( |
) | ||
| Offering costs allocated to Class A ordinary shares subject to possible redemption | ( |
) | ||
| Offering costs allocated to Public Warrants | ( |
) | ||
| Plus: | ||||
| Accretion of Class A ordinary shares subject to possible redemption | ||||
| Class A ordinary shares subject to possible redemption at December 31, 2025 | $ | |||
| Plus: | ||||
| Accretion of Class A ordinary shares subject to possible redemption | ||||
| Class A ordinary shares subject to possible redemption at September 30, 2026 | $ |
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The statements of operations include a presentation of income (loss) per Class A redeemable ordinary shares and income (loss) per non-redeemable Class A and Class B ordinary shares following the two-class method of income per common stock. In order to determine the net income (loss) attributable to both the Class A redeemable ordinary shares and non-redeemable Class A and Class B ordinary shares, the Company first considered the total income (loss) allocable to both sets of stock. This is calculated using the total net income (loss) less any dividends paid. For purposes of calculating net income (loss) per share, any remeasurement of the Class A ordinary shares subject to possible redemption was treated as dividends paid to the public shareholders. Subsequent to calculating the total income (loss) allocable to both sets of shares, the Company split the amount to be allocated using the total number of shares outstanding for each share class at each respective period, before and after redemptions and conversions for the three and nine months ended September 30, 2026 and 2025.
The following tables reflect the calculation of basic and diluted net income (loss) per ordinary shares for the three and nine months ended September 30, 2026 (in dollars, except per share amounts):
| Schedule of basic and diluted net income (loss) per ordinary shares | ||||
| For the Three Months Ended September 30, 2026 |
||||
| Net income | $ | |||
| Remeasurement of temporary equity to redemption value | ( |
) | ||
| Net loss including remeasurement of temporary equity to redemption value | $ | ( |
) | |
| For the Three Months Ended September 30, 2026 |
||||||||
| Class A & B Non-Redeemable |
Class A Redeemable |
|||||||
| Total number of shares | ||||||||
| Ownership percentage | % | % | ||||||
| Total income allocated by class | $ | $ | ||||||
| Less: Accretion allocation based on ownership percentage | ( |
) | ( |
) | ||||
| Plus: Accretion applicable to Class A redeemable shares | ||||||||
| Total net (loss) income allocated by class | $ | ( |
) | $ | ||||
| Weighted-average shares outstanding | ||||||||
| Basic and diluted net (loss) income per share | $ | ) | $ | |||||
13
| For the Nine Months Ended September 30, 2026 | ||||
| Net income | $ | |||
| Remeasurement of temporary equity to redemption value | ( | ) | ||
| Net loss including remeasurement of temporary equity to redemption value | $ | ( | ) | |
| For the Nine Months Ended September 30, 2026 | ||||||||
| Class A & B Non-Redeemable | Class A Redeemable | |||||||
| Total number of shares | ||||||||
| Ownership percentage | % | % | ||||||
| Total income allocated by class | $ | $ | ||||||
| Less: Accretion allocation based on ownership percentage | ( | ) | ( | ) | ||||
| Plus: Accretion applicable to Class A redeemable shares | ||||||||
| Total net (loss) income allocated by class | $ | ( | ) | $ | ||||
| Weighted-average shares outstanding | ||||||||
| Basic and diluted net (loss) income per share | $ | ) | $ | |||||
The following tables reflect the calculation of basic and diluted net income (loss) per ordinary shares for the three and nine months ended September 30, 2025 (in dollars, except per share amounts):
| For the Three Months Ended September 30, 2025 | ||||
| Net income | $ | |||
| Remeasurement of temporary equity to redemption value | ( | ) | ||
| Net loss including remeasurement of temporary equity to redemption value | $ | ( | ) | |
14
| For the Three Months Ended September 30, 2025 | ||||||||
| Class A & B Non-Redeemable | Class A Redeemable | |||||||
| Total number of shares | ||||||||
| Basic and diluted net income (loss) per share | ||||||||
| Numerator: | ||||||||
| Allocation of net loss including remeasurement of temporary equity to redemption value based on ownership percentage | $ | ( | ) | $ | ( | ) | ||
| Deemed dividend for remeasurement of temporary equity to redemption value | ||||||||
| Total net income (loss) allocated by class | $ | ( | ) | $ | ||||
| Denominator: | ||||||||
| Weighted-average shares outstanding | ||||||||
| Basic and diluted net (loss) income per share | $ | ) | $ | |||||
| For the Nine Months Ended September 30, 2025 | ||||
| Net loss | $ | ( | ) | |
| Remeasurement of temporary equity to redemption value | ( | ) | ||
| Net loss including remeasurement of temporary equity to redemption value | $ | ( | ) | |
| For the Nine Months Ended September 30, 2025 | ||||||||
| Class A & B Non-Redeemable | Class A Redeemable | |||||||
| Total number of shares | ||||||||
| Basic and diluted net income (loss) per share | ||||||||
| Numerator: | ||||||||
| Allocation of net loss including remeasurement of temporary equity to redemption value based on ownership percentage | $ | ( | ) | $ | ( | ) | ||
| Deemed dividend for remeasurement of temporary equity to redemption value | ||||||||
| Total net (loss) income allocated by class | $ | ( | ) | $ | ||||
| Denominator: | ||||||||
| Weighted-average shares outstanding | ||||||||
| Basic and diluted net (loss) income per share | $ | ) | $ | |||||
15
Recent Accounting Pronouncements
In April 2026, the FASB issued Accounting Standards Update (“ASU”) 2026-01, “Initial Measurement of Paid-in-Kind Dividends on Equity-Classified Preferred Stock”, which provides authoritative guidance on how an issuer should initially measure paid-in-kind (“PIK”) dividends on equity-classified preferred stock. ASU 2026-01 is effective for fiscal years beginning after December 15, 2026, and interim periods within those fiscal year reporting periods. Early adoption is permitted in an interim or fiscal year reporting period in which financial statements have not yet been issued or made available for issuance. The Company does not believe ASU 2026-01 will have a significant impact on the Company’s financial position, results of operations or cash flows. However, the Company would need to evaluate its impact in the event the Company issues preference shares.
In November 2024, the FASB issued Accounting Standards Update 2024-03, “Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses”, requiring public entities to disclose additional information about specific expense categories in the notes to the financial statements on an interim and annual basis. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and for interim periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2024-03.
In December 2023, the FASB issued Accounting Standards Update 2023-09, “Improvements to Income Tax Disclosures” (“ASU 2023-09”), which provides for additional disclosures primarily related to the income tax rate reconciliations and income taxes paid. ASU 2023-09 requires entities to annually disclose the income tax rate reconciliation using both amounts and percentages, considering several categories of reconciling items, including state and local income taxes, foreign tax effects, tax credits and nontaxable or nondeductible items, among others. Disclosure of the reconciling items is subject to a quantitative threshold and disaggregation by nature and jurisdiction. ASU 2023-09 also requires entities to disclose net income taxes paid or received to federal, state and foreign jurisdictions, as well as by individual jurisdiction, subject to a five percent quantitative threshold. ASU 2023-09 may be adopted on a prospective or retrospective basis and is effective for fiscal years beginning after December 15, 2024, and for interim periods for fiscal years beginning after December 15, 2025, with early adoption permitted. As a Cayman Islands exempted company, the Company does not believe ASU 2023-09 will have a significant impact on the Company’s financial position, results of operations or cash flows. However, the Company would need to evaluate its impact in the event of the Company becoming domiciled in the United States following its initial business combination.
Management does not believe that any other recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company’s financial statements.
Note 3 — Initial Public Offering
Pursuant to the Initial Public Offering on August 28, 2025, the Company sold Units (inclusive of Units sold pursuant to the underwriter’s over-allotment option exercised in full) at a purchase price of $ per Unit. Each Unit consists of one Public Share and one-half of one Public Warrant. Each whole Public Warrant will entitle the holder to purchase one Class A ordinary share at a price of $ per share, subject to adjustment. Each Public Warrant will become exercisable 30 days after the completion of the initial Business Combination and will expire five years after the completion of the initial Business Combination, or earlier upon redemption or liquidation.
Public Warrants
— As of September 30, 2026 and December 31, 2025, there were
16
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 thereto is current. No Warrant will be exercisable and the Company will not be obligated to issue a Class A ordinary share upon exercise of a Warrant unless the Class A ordinary share issuable upon such Warrant exercise has been registered, qualified or deemed to be exempt under the securities laws of the state of residence of the registered holder of the Warrants. In the event that the conditions in the two immediately preceding sentences are not satisfied with respect to a Warrant, the holder of such Warrant will not be entitled to exercise such Warrant and such Warrant may have no value and expire worthless. In no event will the Company be required to net cash settle any Warrant. In the event that a registration statement is not effective for the exercised Warrants, the purchaser of a Unit containing such Warrant will have paid the full purchase price for the Unit solely for the Class A ordinary share underlying such Unit.
Under the terms of the warrant agreement, the Company will agree that, as soon as practicable, but in no event later than 20 business days after the closing of its Business Combination, it will use commercially reasonable efforts to file with the SEC a post-effective amendment to the registration statement for the Initial Public Offering or a new registration statement covering the registration under the Securities Act of the Class A ordinary shares issuable upon exercise of the Warrants and thereafter will use its commercially reasonable efforts to cause the same to become effective within 60 business days following the Company’s initial Business Combination and to maintain a current prospectus relating to the Class A ordinary shares issuable upon exercise of the Warrants until the expiration of the Warrants in accordance with the provisions of the warrant agreement. If a registration statement covering the Class A ordinary shares issuable upon exercise of the Warrants is not effective by the sixtieth (60th) business day after the closing of the initial Business Combination, Warrant holders may, commencing on the 61st day until such time as there is an effective registration statement and during any period when the Company will have failed to maintain an effective registration statement, exercise Warrants on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act or another exemption. Notwithstanding the above, if the Class A ordinary shares are at the time of any exercise of a Warrant not listed on a national securities exchange such that they satisfy the definition of a “covered security” under Section 18(b)(1) of the Securities Act, the Company may, at its option, require holders of Public Warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event the Company so elects, the Company will not be required to file or maintain in effect a registration statement, and in the event the Company does not so elect, the Company will use its commercially reasonable efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available.
If the holders exercise their Public Warrants on a cashless basis, they would pay the warrant exercise price by surrendering the warrants for that number of Class A ordinary shares equal to the quotient obtained by dividing (x) the product of the number of Class A ordinary shares underlying the warrants, multiplied by the excess of the “fair market value” of the Class A ordinary shares over the exercise price of the warrants by (y) the fair market value. The “fair market value” is the average reported closing price of the Class A ordinary shares for the 10 trading days ending on the third trading day prior to the date on which the notice of exercise is received by the warrant agent or on which the notice of redemption is sent to the holders of warrants, as applicable.
Redemption of Warrants When the Price per Class A Ordinary Share Equals or Exceeds $18.00: The Company may redeem the outstanding Warrants:
| ● | in whole and not in part; |
| ● | at a price of $0.01 per Warrant; |
| ● | upon a minimum of 30 days’ prior written notice of redemption (the “30-day redemption period”); and |
| ● | if, and only if, the closing price of the Class A ordinary shares equals or exceeds $18.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a Warrant) for any 20 trading days within a 30-trading day period commencing at least 30 days after completion of the Company’s initial Business Combination and ending three business days before the Company sends the notice of redemption to the Warrant holders. |
17
Additionally, if the number of outstanding Class A ordinary shares is increased by a share capitalization payable in Class A ordinary shares, or by a subdivision of ordinary shares or other similar event, then, on the effective date of such share capitalization, subdivision or similar event, the number of Class A ordinary shares issuable on exercise of each Warrant will be increased in proportion to such increase in the outstanding ordinary shares. A rights offering made to all or substantially all holders of ordinary shares entitling holders to purchase Class A ordinary shares at a price less than the fair market value will be deemed a share capitalization of a number of Class A ordinary shares equal to the product of (i) the number of Class A ordinary shares actually sold in such rights offering (or issuable under any other equity securities sold in such rights offering that are convertible into or exercisable for Class A ordinary shares) and (ii) the quotient of (x) the price per Class A ordinary share paid in such rights offering and (y) the fair market value. For these purposes (i) if the rights offering is for securities convertible into or exercisable for Class A ordinary shares, in determining the price payable for Class A ordinary shares, there will be taken into account any consideration received for such rights, as well as any additional amount payable upon exercise or conversion and (ii) fair market value means the volume weighted average price of Class A ordinary shares as reported during the ten (10) trading day period ending on the trading day prior to the first date on which the Class A ordinary shares trade on the applicable exchange or in the applicable market, regular way, without the right to receive such rights.
Note 4 — Private Placement
Simultaneously with the closing of the Initial Public Offering, the Sponsor and CCM purchased an aggregate of Private Units (including Private Units pursuant to the underwriter’s over-allotment option exercised in full), at a price of $10.00 per Private Unit, or $
The Private Placement Warrants are identical to the Public Warrants sold in the Initial Public Offering except that, so long as they are held by the Sponsor, CCM, or their permitted transferees, the Private Placement Warrants (i) may not (including the Class A ordinary shares issuable upon exercise of these Private Placement Warrants), subject to certain limited exceptions, be transferred, assigned or sold by the holders until 30 days after the completion of the initial Business Combination, (ii) will be entitled to registration rights and (iii) with respect to Private Placement Warrants held by CCM and/or its designees, will not be exercisable more than five years from the commencement of sales in the Initial Public Offering in accordance with Financial Industry Regulatory Authority (“FINRA”) Rule 5110(g)(8).
The Sponsor, officers and directors entered into a letter agreement with the Company, pursuant to which they agreed to (i) waive their redemption rights with respect to any shares held by them in connection with the completion of the initial Business Combination; (ii) waive their redemption rights with respect to any shares held by them in connection with a shareholder vote to approve an amendment to the amended and restated memorandum and articles of association (A) to modify the substance or timing of the Company’s obligation to allow redemption in connection with the initial Business Combination or to redeem 100% of the Public Shares if the Company has not consummated an initial Business Combination within the Completion Window or (B) with respect to any other material provisions relating to shareholders’ rights or pre-initial Business Combination activity; (iii) waive their rights to liquidating distributions from the Trust Account with respect to their founder shares and Private Placement Shares if the Company fails to complete an initial Business Combination within the Completion Window, although they will be entitled to liquidating distributions from the Trust Account with respect to any Public Shares they hold if the Company fails to complete an initial Business Combination within the prescribed time frame and to liquidating distributions from assets outside the Trust Account; and (iv) vote any founder shares and Private Placement Shares held by them and any Public Shares purchased during or after the Initial Public Offering (including in open market and privately-negotiated transactions, aside from shares they may purchase in compliance with the requirements of Rule 14e-5 under the Exchange Act, which would not be voted in favor of approving the Business Combination transaction) in favor of the initial Business Combination.
18
Note 5 — 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 that engage in business activities from which it may recognize revenues and incur expenses, and for which separate financial information is available that is regularly evaluated by the Company’s chief operating decision maker, or group, in deciding how to allocate resources and assess performance.
The Company’s CODM has been identified as the Chief Financial Officer, who reviews the operating results for the Company as a whole to make decisions about allocating resources and assessing financial performance. Accordingly, management has determined that the Company only has one reportable segment.
The CODM assesses performance for the single segment and decides how to allocate resources based on net income or loss that also is reported on the statement of operations as net income or loss. The measure of segment assets is reported on the balance sheet as total assets. When evaluating the Company’s performance and making key decisions regarding resource allocation, the CODM reviews several key metrics included in net income or loss and total assets, which include the following:
| Schedule of segment information | ||||||||
| September 30, 2026 |
December 31, 2025 |
|||||||
| Cash and cash equivalents | $ | $ | ||||||
| Treasury securities held in Trust Account | $ | $ | ||||||
| Total Assets | $ | $ | ||||||
The CODM reviews the position of cash available to the Company to assess if the Company has sufficient resources available to discharge its liabilities. The CODM is provided with details of cash and liquid resources available with the Company. The CODM also reviews the amount of cash, cash equivalents, treasury securities, and marketable securities held in Trust Account to assess the amounts available to the Company to effect an initial Business Combination within the Completion Window.
| Schedule of Business combination segment | ||||||||||||||||
| |
For the Three Months Ended September 30, |
For the Nine Months Ended September 30, |
||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Loss from operations | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
| Interest income on Trust Account | $ | $ | $ | $ | ||||||||||||
| Interest income on money market mutual fund | $ | $ | $ | $ | ||||||||||||
| Net income (loss) | $ | $ | $ | $ | ( |
) | ||||||||||
The CODM reviews loss from operations to determine if expenditures are in alignment with budgeted and contractually agreed upon amounts with service providers. Interest income is reviewed to assist in forecasting amounts of cash, cash equivalents, treasury securities, and marketable securities held in the Trust Account to assess amounts available to the Company to effect an initial Business Combination within the Completion Window.
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Note 6 — Related Party Transactions
Founder Shares
On January 23, 2025 the Sponsor made capital contributions of $
The Company’s initial shareholders have agreed not to transfer, assign or sell any of their founder shares and any Class A ordinary shares issued upon conversion thereof until the earlier of (i) six months after the completion of a Business Combination and (ii) subsequent to a Business Combination, the date on which the Company consummates a subsequent liquidation, merger, share exchange or other similar transaction which results in all of the Company’s shareholders having the right to exchange their Class A Ordinary Shares for cash, securities or other property. Any permitted transferees will be subject to the same restrictions and other agreements of the Company’s initial shareholders with respect to any founder shares (the “Lock-up”). Notwithstanding the foregoing, if the Company consummates a transaction after the initial Business Combination which results in the Company’s shareholders having the right to exchange their shares for cash, securities or other property, the founder shares will be released from the Lock-up.
Promissory Note — Related Party
The
Sponsor agreed to loan the Company an aggregate of up to $
Due to Related Party
The Sponsor transferred $
20
Administrative Services Agreement
Commencing
on the effective date of the Registration Statement, the Company entered into an agreement with the Sponsor to pay an aggregate of
$
Consulting Agreements
On November 10, 2025, the Company entered
into consulting agreements with Ryan Gentry and Vikas Mittal (the “Consulting Agreements”) pursuant to which Mr. Gentry
and Mr. Mittal agreed to provide the Company with consulting services, which may include but are not limited to, assisting with
analysis and advice regarding the potential investment opportunities for special purpose acquisition companies, accounting and
bookkeeping, and administrative support. Pursuant to the terms of the Consulting Agreements, Mr. Gentry is entitled to a consulting
fee of $
Consulting Services Agreement
On March 18, 2026, the Audit Committee approved
the substitution of Samara Capital Advisors, LLC (“SCA”) for Meteora Capital, LLC as the Company’s consulting services
provider under the Company’s previously approved consulting arrangement, with SCA serving as contracting and payroll-processing
agent for consulting personnel supporting the Company’s financial analysis, accounting, SEC reporting, transaction readiness, investor
relations and Business Combination activities. SCA’s principals include Vikas Mittal, the Company’s Co-CEO and CFO, making
SCA a related party under Item 404 of Regulation S-K. Amounts paid to SCA are direct pass-through reimbursement of staffing costs under
the previously approved rate card, which was not modified by the substitution. For the three months ended September 30, 2026, the Company incurred $
Related Party Loans
In order to finance transaction costs in connection with an intended initial Business Combination, the Sponsor or an affiliate of the Sponsor or certain of our officers and directors may, but are not obligated to, loan the Company funds as may be required on a non-interest basis (the “Working Capital Loans”). If we complete an initial Business Combination, the Company would repay such loaned amounts. In the event that the initial Business Combination does not close, the Company may use amounts held outside the Trust Account to repay such loaned amounts but no proceeds from the Trust Account would be used for such repayment. Up to $
21
Note 7 — Commitments and Contingencies
Risks and Uncertainties
Various social and political circumstances in the U.S. and around the world (including rising trade tensions between the U.S. and China, and other uncertainties regarding actual and potential shifts in the U.S. and foreign, trade, economic and other policies with other countries), may contribute to increased market volatility and economic uncertainties or deterioration in the U.S. and worldwide.
As a result of these circumstances and the ongoing global conflicts and/or other future global conflicts, the Company’s ability to consummate a Business Combination, or the operations of a target business with which the Company ultimately consummates a Business Combination, may be materially and adversely affected. In addition, the Company’s ability to consummate a transaction may be dependent on the ability to raise equity and debt financing which may be impacted by these events, including as a result of increased market volatility, or decreased market liquidity in third-party financing being unavailable on terms acceptable to the Company or at all. The impact of this action and potential future sanctions on the world economy and the specific impact on the Company’s financial position, results of operations or ability to consummate a Business Combination are not yet determinable. The unaudited condensed financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Registration Rights
The holders of the (i) founder shares, which were issued in a private placement prior to the closing of the Initial Public Offering, (ii) Private Units (and the securities comprising such units and the Class A ordinary shares issuable upon exercise of the Private Placement Warrants) which were issued in a private placement simultaneously with the closing of the Initial Public Offering and (iii) Private Units (and the securities comprising such units and the Class A ordinary shares issuable upon exercise of the Private Placement Warrants) that may be issued upon conversion of Working Capital Loans will have registration rights to require the Company to register a sale of any of the Company’s securities held by them and any other securities of the Company acquired by them prior to the consummation of an initial Business Combination pursuant to a registration rights agreement on the effective date of the Initial Public Offering.
The holders of these securities will be entitled to make up to three demands, excluding short form 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 the completion of an initial Business Combination. Notwithstanding anything to the contrary, CCM may only make a demand on one occasion and only during the five-year period beginning on the effective date of the registration statement of the Initial Public Offering. In addition, CCM may participate in a “piggy-back” registration only during the seven-year period beginning on the effective date of the registration statement of the Initial Public Offering. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
Underwriting Agreement
The Company granted the underwriter a 45-day option from the date of the Initial Public Offering to purchase up to an additional Units to cover over-allotments. On August 28, 2025, the underwriters fully exercised their over-allotment option to purchase an additional Units.
The underwriter was paid a cash underwriting discount of 2.00% of the gross proceeds of the units offered in the Initial Public Offering, or $
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Note 8 — Shareholders’ Deficit
Preference Shares — The Company is authorized to issue a total of preference shares at par value of $ each. As of September 30, 2026 and December 31, 2025, there were preference shares issued or outstanding.
Class A Ordinary Shares — The Company is authorized to issue a total of Class A ordinary shares at par value of $ each. As of September 30, 2026 and December 31, 2025, there were Class A ordinary shares issued and outstanding, excluding 23,000,000 Class A ordinary shares subject to possible redemption.
Class
B Ordinary Shares — The Company is authorized to issue a total of Class
B ordinary shares at par value of $each.
On January 23, 2025, the Company issued Class
B ordinary shares to the Sponsor for $
The founder shares will automatically convert into Class A ordinary shares (which such Class A ordinary shares delivered upon conversion will not have any redemption rights or be entitled to liquidating distributions from the Trust Account if the Company fails to consummate an initial Business Combination) concurrently with or immediately following the consummation of an initial Business Combination or earlier at the option of the holder on a one-for-one basis, subject to adjustment for share sub-divisions, share capitalizations, reorganizations, recapitalizations and the like, and subject to further adjustment as provided herein. In the case that additional Class A ordinary shares, or any other equity-linked securities, are issued or deemed issued in excess of the amounts sold in the Initial Public Offering and related to or in connection with the closing of the initial business combination, the ratio at which Class B ordinary shares convert into Class A ordinary shares will be adjusted (unless the holders of a majority of the outstanding Class B ordinary shares agree to waive such adjustment with respect to any such issuance or deemed issuance) so that the number of Class A ordinary shares issuable upon conversion of all Class B ordinary shares will equal, in the aggregate, 25% of the sum of (i) the total number of all Class A ordinary shares outstanding upon the completion of the Initial Public Offering (including any Class A ordinary shares issued pursuant to the underwriter’s over-allotment option and excluding the Class A ordinary shares comprising part of the Private Units and the Class A ordinary shares underlying the Private Placement Warrants issued to the Sponsor), plus (ii) all Class A ordinary shares and equity-linked securities issued or deemed issued, in connection with the closing of the initial Business Combination (excluding any shares or equity-linked securities issued, or to be issued, to any seller in the initial Business Combination and any private placement-equivalent units issued to our Sponsor or any of its affiliates or to the Company’s officers or directors upon conversion of Working Capital Loans) minus (iii) any redemptions of Class A ordinary shares by public shareholders in connection with an initial Business Combination and any Class A ordinary shares redeemed by public shareholders in connection with any amendment to our amended and restated memorandum and articles of association made prior to the consummation of the initial business combination (A) to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within the completion window or (B) with respect to any other material provisions relating to the rights of holders of Class A ordinary shares or pre-business combination activity; provided that such conversion of founder shares will never occur on a less than one-for-one basis.
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Holders of record of the Company’s Class A ordinary shares and Class B ordinary shares are entitled to one vote for each share held on all matters to be voted on by shareholders. Unless specified in the Company’s amended and restated memorandum and articles of association or as required by the Companies Act or stock exchange rules, an ordinary resolution under Cayman Islands law and the Company’s amended and restated memorandum and articles of association, which requires the affirmative vote of at least a majority of the votes cast by such shareholders as, being entitled to do so, vote in person or, where proxies are allowed, by proxy at the applicable general meeting of the Company is generally required to approve any matter voted on by the Company’s shareholders. Approval of certain actions require a special resolution under Cayman Islands law, which (except as specified below) requires the affirmative vote of at least two-thirds of the votes cast by such shareholders as, being entitled to do so, vote in person or, where proxies are allowed, by proxy at the applicable general meeting, and pursuant to the Company’s amended and restated memorandum and articles of association, such actions include amending the Company’s amended and restated memorandum and articles of association and approving a statutory merger or consolidation with another company. There is no cumulative voting with respect to the appointment of directors, meaning, following the Company’s initial Business Combination, the holders of more than 50% of the Company’s ordinary shares voted for the appointment of directors can elect all of the directors. Prior to the consummation of an initial Business Combination, only holders of the Company’s Class B ordinary shares will (i) have the right to vote on the appointment and removal of directors and (ii) be entitled to vote on continuing the Company in a jurisdiction outside the Cayman Islands (including any special resolution required to amend our constitutional documents or to adopt new constitutional documents, in each case, as a result of approving a transfer by way of continuation in a jurisdiction outside the Cayman Islands). Holders of the Company’s Class A ordinary shares will not be entitled to vote on these matters during such time. These provisions of the Company’s amended and restated memorandum and articles of association may only be amended if approved by a special resolution passed by the affirmative vote of at least 90% (or, where such amendment is proposed in respect of the consummation of an initial Business Combination, two-thirds) of the votes cast by such shareholders as, being entitled to do so, vote in person or, where proxies are allowed, by proxy at the applicable general meeting of the Company.
Note 9 — Fair Value Measurements
The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date.
Recurring Fair Value Measurements
The following table presents information about the Company’s recurring fair value measurements as of September 30, 2026 and December 31, 2025, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:
| Schedule of Assets measured at fair value on a recurring basis | |||||||
| Level | Fair Value | ||||||
| September 30, 2026 | |||||||
| Assets: | |||||||
| Cash held in money market mutual fund | 1 | $ | |||||
| United States Treasury Bills held in Trust Account | 1 | $ | |||||
| December 31, 2025 | |||||||
| Assets: | |||||||
| Cash held in money market mutual fund | 1 | $ | |||||
| United States Treasury Bills held in Trust Account | 1 | $ | |||||
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Non-recurring Fair Value Measurements
The following table presents information about the Company’s non-recurring fair value measurements as of the valuation date, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:
| Level | Fair Value | ||||||
| Equity: | |||||||
| Fair value of Public Warrants for Class A ordinary shares subject to possible redemption allocation at August 28, 2025 | 3 | $ | |||||
| Class B ordinary shares (per share) at July 25, 2025 | 3 | $ | |||||
The fair value of the Public Warrants is $
| Schedule of fair value assumptions | ||||
| August 28, 2025 |
||||
| Implied ordinary share price | $ | |||
| Exercise price | $ | |||
| Simulation term (years) | ||||
| Risk-free rate | % | |||
| Estimated implied volatility | % | |||
| Calculated value per warrant | $ | |||
| Market adjustment | % | |||
The fair value of the Class B ordinary shares is $ per ordinary share on July 25, 2025, the grant date of the Class B ordinary shares transferred to the Company’s directors. The fair value of the Class B ordinary shares was determined by applying a discount for lack of marketability (“DLOM”) to the underlying stock price of a Class A ordinary share, adjusted for the estimated probability of a successful initial Business Combination. The following table presents the quantitative information regarding market assumptions used in the valuation of the Class B ordinary shares:
| Schedule of fair value assumptions | ||||
| July 25, 2025 |
||||
| Underlying stock price | $ | |||
| Estimated probability of an initial Business Combination | % | |||
| Estimated volatility | % | |||
| Risk-free rate | % | |||
| Time to expiration (years) | ||||
Note 10 — Subsequent Events
The Company evaluated subsequent events and transactions that occurred after the balance sheet date through the date that the unaudited condensed financial statements are issued. Based upon this review, other than noted below, the Company did not identify any subsequent events that would have required adjustment or disclosure in the unaudited condensed financial statements.
On October 6, 2026, the Company entered into the Business Combination Agreement with First Digital and PubCo, as described in detail in Note 1.
On October 20, 2026, the Company filed a definitive proxy statement with the SEC for an annual general meeting of shareholders to be held on November 10, 2026 to consider and vote upon, among other things, a proposal to change the name of the Company to “First Digital Acquisition Corp Ltd.” and a proposal to adopt the Third Amended and Restated Memorandum and Articles of Association of the Company to reflect the name change.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Unless otherwise stated or the context otherwise requires, references in this quarterly report to (i) the “Company,” “us,” or “we” are to CSLM Digital Asset Acquisition Corp III, Ltd, a Cayman Islands exempted company; (ii) “founder shares” are to shares of our Class B ordinary shares initially purchased by our Sponsor in a private placement prior to our Initial Public Offering, and the shares of our Class A ordinary shares issued upon the conversion thereof; and (iii) “Sponsor” are to CSLM Acquisition Sponsor II, Ltd, a Cayman Islands exempted company. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the unaudited condensed financial statements and the notes thereto contained elsewhere in this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K for the year ended December 31, 2025. 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, including statements under this “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” includes forward-looking statements. These forward-looking statements include, but are not limited to, statements regarding our or our management team’s expectations, beliefs, intentions or strategies regarding the future, including statements regarding the Business Combination with First Digital, the anticipated timing of the Business Combination and the ability of the parties to complete the Business Combination. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not a forward-looking statement. 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, including the risk that the Business Combination is not completed in a timely manner or at all, the amount of redemptions by our public shareholders and the risks relating to First Digital’s business. For information identifying some of the important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the discussion under the headings “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors” in our final prospectus filed with the U.S. Securities and Exchange Commission (the “SEC”) on August 27, 2025. 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, we disclaim 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 on July 26, 2024 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 or entities. We intend to effectuate our initial business combination using cash from the proceeds of the IPO and the sale of the private units, our common equity or any preferred equity that we may create in accordance with the terms of our charter documents, debt, or a combination of cash, common or preferred equity and debt.
The issuance of additional ordinary shares or the creation of one or more classes of preference shares during our initial business combination:
| ● | may significantly dilute the equity interest of investors in the IPO who would not have pre-emption rights in respect of any such issue; |
| ● | may subordinate the rights of holders of ordinary shares if the rights, preferences, designations and limitations attaching to the preference shares are senior to those afforded our ordinary shares; |
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| ● | could cause a change in control if a substantial number of ordinary shares are issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors; |
| ● | may have the effect of delaying or preventing a change of control of us by diluting the share ownership or voting rights of a person seeking to obtain control of us; and |
| ● | may adversely affect prevailing market prices for our public shares. |
Similarly, if we issue debt securities or otherwise incur significant indebtedness, it could result in:
| ● | default and foreclosure on our assets if our operating revenues after our initial business combination are insufficient to repay our debt obligations; |
| ● | acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant; |
| ● | our immediate payment of all principal and accrued interest, if any, if the debt is payable on demand; |
| ● | our inability to obtain necessary additional financing if any document governing such debt contains covenants restricting our ability to obtain such financing while the debt security is outstanding; |
| ● | our inability to pay dividends on our ordinary shares; |
| ● | using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our ordinary shares if declared, expenses, capital expenditures, acquisitions and other general corporate purposes; |
| ● | limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate; |
| ● | increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation; and |
| ● | limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, execution of our strategy and other purposes and other disadvantages compared to our competitors who have less debt. |
As indicated in the accompanying unaudited condensed financial statements as of September 30, 2026 and December 31, 2025, we had $1,874,641 and $3,108,288 in cash and cash equivalents, respectively, $239,535,078 and $233,253,391 of treasury securities held in the Trust Account, respectively, and working capital of $1,161,164 and $2,973,730, respectively. Further, we expect to incur significant costs in the pursuit of our acquisition plans. We cannot assure you that our plans to raise capital or to complete our initial business combination will be successful. These factors, among others, raise substantial doubt about our ability to continue as a going concern.
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Business Combination Agreement
On October 6, 2026, the Company entered into a business combination agreement (the “Business Combination Agreement”) with First Digital Group Ltd., a Gibraltar private company (“First Digital”), CSLM III Holdings Ltd, a Cayman Islands exempted company and a wholly-owned subsidiary of the Company (“PubCo”). The Company will establish a Cayman Islands exempted company limited by shares (“Merger Sub”), as a direct wholly-owned subsidiary of the Company, for the purpose of effectuating the transactions contemplated by the Business Combination Agreement.
Pursuant to the Business Combination Agreement, among other things, (i) First Digital will re-domicile from Gibraltar to the Cayman Islands and transfer by way of continuation as an exempted company limited by shares in the Cayman Islands (the “Re-domiciliation and Continuation”); (ii) following the Re-domiciliation and Continuation, the Company will merge with and into PubCo (the “Reincorporation Merger”), with PubCo being the surviving entity and Merger Sub becoming a wholly-owned subsidiary of PubCo; and (iii) following the Reincorporation Merger, Merger Sub will merge with and into First Digital (the “Acquisition Merger” and, together with the Reincorporation Merger, the “Mergers”) with First Digital being the surviving entity and becoming a wholly-owned subsidiary of PubCo.
Reincorporation Merger
In connection with the Reincorporation Merger, at the Reincorporation Merger Effective Time:
| ● | each issued and outstanding Unit immediately prior to the Reincorporation Merger Effective Time will be separated automatically into its constituent securities (i.e., one Class A Ordinary Share and one-half of an Acquiror Warrant); |
| ● | each issued and outstanding Class B Ordinary Share immediately prior to the Reincorporation Merger Effective Time will be automatically cancelled and cease to exist in exchange for one newly issued PubCo Class A Ordinary Share; |
| ● | each issued and outstanding Class A Ordinary Share immediately prior to the Reincorporation Merger Effective Time (including the Class A Ordinary Share from the separation of the Units) will be automatically cancelled and cease to exist in exchange for one newly issued PubCo Class A Ordinary Share; and |
| ● | each issued and outstanding Warrant immediately prior to the Reincorporation Merger Effective Time (including the Warrants from the separation of the Units) will cease to be a warrant with respect to Class A Ordinary Shares and be converted automatically into a PubCo Warrant to purchase one PubCo Class A Ordinary Share at $11.50 per share. |
Acquisition Merger and Merger Consideration
At least one Business Day following the Reincorporation Merger and the Re-domiciliation and Continuation (subject to the completion of the Reincorporation Merger and the Re-domiciliation and Continuation having occurred) but in any event within three Business Days after the Reincorporation Merger Effective Time, subject to the terms and conditions set forth in the Business Combination Agreement, the Acquisition Merger shall take place.
In connection with the Acquisition Merger, at the Acquisition Merger Effective Time:
| ● | each ordinary share of First Digital (each, a “Company Exchanging Share” as defined in the Business Combination Agreement) that is held by Mr. Vincent Chok shall automatically be cancelled and cease to exist in exchange for such number of newly issued PubCo Class B Ordinary Shares that is equal to the Exchange Ratio (as defined in the Business Combination Agreement), as applicable, as determined in accordance with the Business Combination Agreement, based on a total valuation of First Digital (the “Company Valuation” as defined in the Business Combination Agreement) of $250 million, subject to adjustment provided in the Business Combination Agreement. |
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| ● | each Company Exchanging Share that is held by any person other than Mr. Vincent Chok shall automatically be cancelled and cease to exist in exchange for such number of newly issued PubCo Class A Ordinary Shares that is equal to the Exchange Ratio, as applicable, as determined in accordance with the Business Combination Agreement, based on a total Company Valuation of $250 million, subject to adjustment provided in the Business Combination Agreement. |
| ● | each FDG Token (a token that confers the holder thereof an option exercisable into a First Digital Preference Share) that is outstanding and vested and not converted into First Digital Preference Shares prior to the Acquisition Merger Effective Time shall automatically be cancelled and cease to exist in exchange for the right to receive from Nemi Limited (“Nemi”) the number of PubCo Class A Ordinary Shares that any one First Digital Preference Share was exchanged for at the Acquisition Merger Effective Time, to be transferred by Nemi to the holder of such FDG Token. |
| ● | each FDG Token that is not vested prior to the Acquisition Merger Effective Time shall automatically be cancelled and cease to exist without any conversion thereof or payment or other consideration therefor, provided that the board of directors of PubCo, in its sole discretion, may decide to re-grant options or other equity awards under the PubCo Equity Incentive Plan to the holders of such unvested FDG Tokens after the Acquisition Merger Effective Time. |
| ● | the warrants issued by First Digital on or around the date of the Business Combination Agreement (the “Binance Company Warrant”) to Alphanest Holdings Ltd (the “Binance Warrantholder”), a company organized and existing under the laws of the United Arab Emirates, shall automatically be terminated and expire in exchange for the warrants issued by PubCo to the Binance Warrantholder (the “Binance PubCo Warrant”) that entitles the Binance Warrantholder to subscribe for a number of PubCo Class A Ordinary Shares equal to the number of the unsubscribed FDG Warrant Shares (as defined in the Binance PubCo Warrant) multiplied by the Exchange Ratio. |
| ● | the warrants issued by First Digital on or around the date of the Business Combination Agreement (the “Noble Elite Company Warrant”) to Noble Elite Ltd (the “Noble Elite”), a company organized and existing under the laws of the Cayman Islands, shall automatically be terminated and expire in exchange for the warrants issued by PubCo to Noble Elite (the “Noble Elite PubCo Warrant”) that entitles Noble Elite to subscribe for a number of PubCo Class A Ordinary Shares equal to the number of the unsubscribed FDG Warrant Shares (as defined in the Noble Elite PubCo Warrant) multiplied by the Exchange Ratio. |
| ● | PubCo shall issue 5,000,000 PubCo Class B Ordinary Shares to Mr. Vincent Chok as transaction bonus shares. |
Termination
| ● | The Business Combination Agreement may be terminated by mutual written consent of First Digital and the Company and under certain circumstances, including, among other things: (i) by written notice from either First Digital or the Company to the other if any governmental authority has enacted, issued, promulgated, enforced or entered any law or governmental order that is then in effect and which has the effect of making the Acquisition Merger Closing or Reincorporation Merger Closing illegal or which otherwise prevents or prohibits consummation of either of the Mergers, other than any such restraint that is immaterial; (ii) by written notice to the Company from First Digital if the Acquiror Shareholder Approval (as defined in the Business Combination Agreement) has not been obtained by reason of the failure to obtain the required vote at the Acquiror Shareholders’ Meeting; (iii) by written notice to First Digital from the Company if there is any breach of any representation, warranty, covenant or agreement on the part of First Digital set forth in the Business Combination Agreement, except that, if such breach is curable by First Digital through the exercise of its reasonable best efforts within a certain period; (iv) by written notice from either First Digital or the Company to the other if the Acquisition Merger Closing has not occurred on or before the date that is six (6) months from the date of the Business Combination Agreement; (v) by written notice to First Digital from the Company if First Digital Shareholder Approval (as defined in the Business Combination Agreement) has not been obtained by reason of the failure to obtain the required vote at the Company Shareholders’ Meeting; or (vi) by written notice to the Company from First Digital if there is any breach of any representation, warranty, covenant or agreement on the part of the Company set forth in the Business Combination Agreement, except that, if such breach is curable by the Company through the exercise of its reasonable best efforts within a certain period. |
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Sponsor Support Agreement. Concurrently with the execution of the Business Combination Agreement, the Company, First Digital and the Sponsor entered into a sponsor support agreement, pursuant to which the Sponsor agreed, among other things, to vote all of its ordinary shares of the Company in favor of the Business Combination and the related proposals, and not to transfer or redeem its ordinary shares of the Company prior to the closing, subject to certain exceptions.
First Digital Shareholder Support Agreements; Lock-Up; Registration Rights. Concurrently with the execution of the Business Combination Agreement, Nemi, Mr. Vincent Chok and Noble Elite entered into shareholder support agreements pursuant to which they agreed, among other things, to vote their First Digital shares in favor of the Business Combination. At the closing, PubCo, the Sponsor and certain shareholders of First Digital will enter into a lock-up agreement and a registration rights agreement.
See Form 8-K filed with the SEC on October 7, 2026 for further discussion on the Business Combination.
Results of Operations and Known Trends or Future Events
We have neither engaged in any operations nor generated any revenues to date. Our only activities since inception have been organizational activities and those necessary to prepare for the IPO that closed on August 28, 2025, and following the IPO, identifying a target company for a business combination and negotiating and entering into the Business Combination Agreement. We will generate non-operating income in the form of interest income on cash, cash equivalents, and treasury securities held in the Trust Account and dividend income on marketable securities held in the Trust Account. 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 and transaction expenses in connection with the Business Combination.
For the three months ended September 30, 2026, we had net income of $1,567,467. Net income was comprised of $2,123,753 of interest income on Trust Account and $18,464 of interest income on money market mutual fund, offset by $534,363 of general, formation, and administrative expenses, $18,904 of insurance expense and $21,483 of listing fees. For the three months ended September 30, 2025, we had net income of $91,073. Net income was comprised of $876,657 of interest income on Trust Account, offset by $559,000 of share-based compensation expense, $210,041 of general, formation, and administrative expenses, $6,986 of insurance expense and $9,557 of listing fees.
For the nine months ended September 30, 2026, we had net income of $4,420,011. Net income was comprised of $6,281,687 of interest income on Trust Account and $65,774 of interest income on money market mutual fund, offset by $1,807,838 of general, formation, and administrative expenses, $56,096 of insurance expense and $63,516 of listing fees. For the nine months ended September 30, 2025, we had net loss of $1,189. Net loss was comprised of $559,000 of share-based compensation expense, $302,303 of general, formation, and administrative expenses, $6,986 of insurance expense and $9,557 of listing fees, offset by $876,657 of interest income on Trust Account.
Liquidity and Capital Resources
Our liquidity needs have been satisfied prior to the completion of IPO through $25,000 paid by the Sponsor to cover certain of our offering and formation costs in exchange for the issuance of the founder shares to our Sponsor and $270,394 in borrowings under an unsecured promissory note from the Sponsor, which was repaid in full at the closing of the IPO. Following the IPO, our liquidity needs have been satisfied from the cash held outside our Trust Account generated from the net proceeds of the IPO and private placement.
On August 28, 2025, the Company consummated the IPO of 23,000,000 Units, including the full exercise by the underwriters of their over-allotment option in the amount of 3,000,000 Units, at $10.00 per Unit, generating gross proceeds of $230,000,000. Each Unit consists of one Class A Ordinary Share and one-half of one Warrant, with each whole Warrant entitling the holder thereof to purchase one Class A Ordinary Share for $11.50 per share (subject to adjustment).
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Simultaneously with the closing of the IPO, the Company consummated the sale of 891,250 Private Units at a price of $10.00 per Private Unit, in a private placement to the Sponsor and CCM, the representative of the underwriter in the IPO, generating gross proceeds of $8,912,500. Each Private Unit consists of one Class A ordinary share and one-half of one Private Placement Warrant. Each whole Warrant entitles the holder to purchase one Class A ordinary share at a price of $11.50 per share, subject to adjustment.
Transaction costs amounted to $14,245,395, consisting of $4,600,000 of cash underwriting fee, up to $9,200,000 of deferred underwriting fee (based on the percentage of funds remaining in the Trust Account after redemptions of public shares in accordance with the Underwriting Agreement between the Company and CCM), and $445,395 of other offering costs.
The Company’s management has broad discretion with respect to the specific application of the net proceeds of the IPO and the Private Placement Units, although substantially all of the net proceeds are intended to be generally applied toward consummating a Business Combination (less deferred underwriting commissions).
The Company’s Business Combination must be with one or more target businesses that together have a fair market value equal to at least 80% of the net balance in the Trust Account (as defined below) (excluding the amount of deferred underwriting discounts held and taxes payable on the income earned on the Trust Account) at the time of the signing an agreement to enter into a Business Combination. However, the Company will only complete a Business Combination if the post-Business Combination company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act of 1940, as amended (the “Investment Company Act”). There is no assurance that the Company will be able to successfully effect a Business Combination.
Following the closing of the IPO, an aggregate of $10.00 per Unit sold in the IPO, or $230,000,000, from the net proceeds of the sale of the Units and the Private Units, was placed in a Trust Account and is initially invested only in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act which invest only in direct U.S. government treasury obligations; the holding of these assets in this form is intended to be temporary and for the sole purpose of facilitating the intended Business Combination. To mitigate the risk that the Company might be deemed to be an investment company for purposes of the Investment Company Act, which risk increases the longer that the Company holds investments in the Trust Account, the Company may, at any time (based on the management team’s ongoing assessment of all factors related to the Company’s potential status under the Investment Company Act), instruct the trustee to liquidate the investments held in the Trust Account and instead to hold the funds in the Trust Account in cash or in an interest bearing demand deposit account at a bank. Except with respect to interest earned on the funds held in the Trust Account that may be released to the Company to pay its taxes, if any, the proceeds from the IPO and the sale of the Private Units will not be released from the Trust Account until the earliest of (i) the completion of the Company’s initial Business Combination, (ii) the redemption of the Company’s public shares if the Company is unable to complete the initial Business Combination within 24 months from the closing of the IPO or by such earlier liquidation date as the Company’s board of directors may approve (the “Completion Window”), subject to applicable law, or (iii) the redemption of the Company’s public shares properly submitted in connection with a shareholder vote to amend the Company’s amended and restated memorandum and articles of association to (A) modify the substance or timing of the Company’s obligation to allow redemption in connection with the initial Business Combination or to redeem 100% of the Company’s public shares if the Company has not consummated an initial Business Combination within the Completion Window or (B) with respect to any other material provisions relating to shareholders’ rights or pre-initial Business Combination activity. The proceeds deposited in the Trust Account could become subject to the claims of the Company’s creditors, if any, which could have priority over the claims of the Company’s public shareholders.
We may withdraw interest to pay our taxes, if any. We expect the interest earned on the amount in the Trust Account will be sufficient to pay our income taxes. To the extent that our equity or debt is used, in whole or in part, as consideration to complete our initial business combination, the remaining proceeds held in the Trust Account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.
We expect to incur significant costs in connection with the Business Combination, including legal, accounting, due diligence and other third-party expenses relating to the negotiation and consummation of the Business Combination and the preparation and filing of the registration statement on Form F-4 and related proxy statement/prospectus. Cash held outside the Trust Account may not be sufficient to fund such expenses, in which case we may need to obtain Working Capital Loans.
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These amounts are estimates and may differ materially from our actual expenses. In addition, we could use a portion of the funds not being placed in trust to pay commitment fees for financing, fees to consultants to assist us with our search for a target business or as a down payment or to fund a “no-shop” provision (a provision designed to keep target businesses from “shopping” around for transactions with other companies or investors on terms more favorable to such target businesses) with respect to a particular proposed business combination, although we do not have any current intention to do so. If we entered into an agreement where we paid for the right to receive exclusivity from a target business, the amount that would be used as a down payment or to fund a “no-shop” provision would be determined based on the terms of the specific business combination and the amount of our available funds at the time. Our forfeiture of such funds (whether as a result of our breach or otherwise) could result in our not having sufficient funds to continue searching for, or conducting due diligence with respect to, prospective target businesses.
If our estimates of the costs of undertaking in-depth due diligence and negotiating our initial business combination is less than the actual amount necessary to do so, we may have insufficient funds available to operate our business prior to our initial business combination. Moreover, we may need to obtain additional financing either to consummate our initial business combination or because we become obligated to redeem a significant number of our public shares upon consummation of our initial business combination, in which case we may issue additional securities or incur debt in connection with such business combination. Subject to compliance with applicable securities laws, we would only consummate such financing simultaneously with the consummation of our initial business combination. Following our initial business combination, if cash on hand is insufficient, we may need to obtain additional financing in order to meet our obligations.
As of September 30, 2026 and December 31, 2025, we had $1,874,641 and $3,108,288 in cash and cash equivalents, respectively, and working capital of $1,161,164 and $2,973,730 respectively. We have incurred and expect to continue to incur significant costs in pursuit of our acquisition plans. Our plans to raise capital and to consummate our initial business combination may not be successful. In addition, if we are unable to complete our initial business combination by August 28, 2027, we will be required to cease all operations except for the purpose of winding up, redeem our public shares and thereafter liquidate and dissolve. These factors among others raise substantial doubt about our ability to continue as a going concern.
Related Party Transactions
Founder Shares
On January 23, 2025, the Sponsor made capital contributions of $25,000, or approximately $0.004 per share, to cover certain of the Company’s expenses, for which the Company issued 5,750,000 Class B ordinary shares (“founder shares”) to the Sponsor. In March 2025, the Company effected a share capitalization pursuant to which the Company issued an additional 1,916,667 founder shares resulting in an aggregate of 7,666,667 founder shares outstanding to the Sponsor, resulting in a price per share of approximately $0.003 per share. Our Sponsor transferred, pursuant to a Securities Transfer Agreement that closed immediately prior to effectiveness of the IPO, 20,000 founder shares (or 100,000 in the aggregate) to each of the Company’s directors, Christopher Bradley, Brian Rudick, Mathew August, Danel Calvillo Armendariz and Dr. Jim Kyung Soo Liew, for the sum of $0.003 per share. The Company accounted for the transfer of founder shares to the directors in accordance with ASC 718, “Stock Based Compensation” and recognized the grant date fair value of the 100,000 founder shares as compensation costs upon the consummation of the IPO. The fair value of the founder shares at their grant date, July 25, 2025, was $5.59 per founder share, or an aggregate value of $559,000 for the 100,000 transferred founder shares.
The Company’s initial shareholders have agreed not to transfer, assign or sell any of their founder shares and any Class A ordinary shares issued upon conversion thereof until the earlier of (i) six months after the completion of a Business Combination and (ii) subsequent to a Business Combination, the date on which the Company consummates a subsequent liquidation, merger, share exchange or other similar transaction which results in all of the Company’s shareholders having the right to exchange their Class A Ordinary Shares for cash, securities or other property. Any permitted transferees will be subject to the same restrictions and other agreements of the Company’s initial shareholders with respect to any founder shares (the “Lock-up”). Notwithstanding the foregoing, if the Company consummates a transaction after the initial Business Combination which results in the Company’s shareholders having the right to exchange their shares for cash, securities or other property, the founder shares will be released from the Lock-up.
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Promissory Note — Related Party
The Sponsor agreed to loan the Company an aggregate of up to $300,000 to be used for a portion of the expenses of the Initial Public Offering (the “Promissory Note”). The Promissory Note was non-interest bearing, unsecured and due at the earlier of (i) the closing of the Initial Public Offering or (ii) the date which the Company determines not to proceed with the Initial Public Offering. The Promissory Note was repaid in full on August 28, 2025 from the proceeds of the Initial Public Offering and private placement. Prior to repayment, the Company had borrowed $270,394, under the Promissory Note. The Company paid $272,716 to the Sponsor, resulting in an overpayment of $2,322 that was recorded as a related party receivable and repaid in full as of December 31, 2025. The Promissory note is no longer available for drawdown subsequent to the close of the Initial Public Offering. Accordingly, no amounts are outstanding under the Promissory Note as of September 30, 2026 and December 31, 2025.
Due to Related Party
The Sponsor transferred $35,000 in cash to the Company during the nine months ended September 30, 2026. In September 2026, the Company repaid the amount in full to the Sponsor. No amounts were due to related party as of September 30, 2026 and December 31, 2025.
Administrative Services Agreement
Commencing on the effective date of the Registration Statement, the Company entered into an agreement with the Sponsor to pay an aggregate of $30,000 per month for company administration, office space, utilities, and secretarial and administrative support. Upon completion of the initial Business Combination or the liquidation, the Company will cease paying the $30,000 per month fee. For the three months ended September 30, 2026 and 2025, the Company recorded $90,000 and $34,839, respectively, and paid $90,000 and $0, respectively under the agreement for the period. For the nine months ended September 30, 2026 and 2025, the Company recorded $270,000 and $34,839, respectively, and paid $270,000 and $0, respectively under the agreement for the period. As of September 30, 2026 and December 31, 2025, no amounts were outstanding under the agreement.
Consulting Agreements
On November 10, 2025, the Company entered into consulting agreements with Ryan Gentry and Vikas Mittal (the “Consulting Agreements”) pursuant to which Mr. Gentry and Mr. Mittal agreed to provide the Company with consulting services, which may include but are not limited to, assisting with analysis and advice regarding the potential investment opportunities for special purpose acquisition companies, accounting and bookkeeping, and administrative support. Pursuant to the terms of the Consulting Agreements, Mr. Gentry is entitled to a consulting fee of $12,500 per month plus expense reimbursement and Mr. Mittal is entitled to a consulting fee of $17,500 per month, payable at the end of each monthly period. The Consulting Agreements will terminate automatically upon completion of a business combination by the Company, unless sooner terminated by either party subject to the terms and conditions therein. For the three months ended September 30, 2026, the Company incurred $90,000 and paid $90,000 and for the nine months ended September 30, 2026, the Company incurred $272,695 and paid $242,695, resulting in an outstanding balance of $30,000 under the Consulting Agreements as of September 30, 2026 which is recorded to consulting services payable – related party on the condensed balance sheets. No amounts were outstanding as of December 31, 2025.
Consulting Services Agreement
On March 18, 2026, the Audit Committee approved the substitution of Samara Capital Advisors, LLC (“SCA”) for Meteora Capital, LLC as the Company’s consulting services provider under the Company’s previously approved consulting arrangement, with SCA serving as contracting and payroll-processing agent for consulting personnel supporting the Company’s financial analysis, accounting, SEC reporting, transaction readiness, investor relations and Business Combination activities. SCA’s principals include Vikas Mittal, the Company’s Co-CEO and CFO, making SCA a related party under Item 404 of Regulation S-K. Amounts paid to SCA are direct pass-through reimbursement of staffing costs under the previously approved rate card, which was not modified by the substitution. For the three months ended September 30, 2026, the Company incurred $149,125 and paid $148,597 and for the nine months ended September 30, 2026, the Company incurred $249,533 and paid $199,632, resulting in an outstanding balance of $49,901 as of September 30, 2026 which is recorded to consulting services payable – related party on the condensed balance sheets. No amounts were outstanding as of December 31, 2025.
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Related Party Loans
In order to finance transaction costs in connection with an intended initial Business Combination, the Sponsor or an affiliate of the Sponsor or certain of our officers and directors may, but are not obligated to, loan the Company funds as may be required on a non-interest basis (the “Working Capital Loans”). If we complete an initial Business Combination, the Company would repay such loaned amounts. In the event that the initial Business Combination does not close, the Company may use amounts held outside the Trust Account to repay such loaned amounts but no proceeds from the Trust Account would be used for such repayment. Up to $1,500,000 of such loans may be convertible into units of the post business combination entity at a price of $10.00 per unit at the option of the lender. Such units would be identical to the Private Units. Except as set forth above, the terms of such loans, if any, have not been determined and no written agreements exist with respect to such loans. As of September 30, 2026 and December 31, 2025, no such Working Capital Loans were outstanding.
Contractual Obligations
We do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities, other than as follows:
Administrative Services Agreement
Commencing on the effective date of the Registration Statement, the Company entered into an agreement with the Sponsor to pay an aggregate of $30,000 per month for company administration, office space, utilities, and secretarial and administrative support. Upon completion of the initial Business Combination or the liquidation, the Company will cease paying the $30,000 per month fee. For the three months ended September 30, 2026 and 2025, the Company recorded $90,000 and $34,839, respectively, and paid $90,000 and $0, respectively under the agreement for the period. For the nine months ended September 30, 2026 and 2025, the Company recorded $270,000 and $34,839, respectively, and paid $270,000 and $0, respectively under the agreement for the period. As of September 30, 2026 and December 31, 2025, no amounts were outstanding under the agreement.
Underwriting Agreement
We granted the underwriter a 45-day option from the date of the Initial Public Offering to purchase up to an additional 3,000,000 Units to cover over-allotments. On August 28, 2025, the underwriters fully exercised their over-allotment option to purchase an additional 3,000,000 Units.
The underwriter was paid a cash underwriting discount of 2.00% of the gross proceeds of the units offered in the Initial Public Offering, or $4,600,000 in the aggregate. The underwriter used $3,162,500 of such funds to purchase 316,250 Private Units at $10.00 per Private Unit. Additionally, the underwriter is entitled to a deferred underwriting discount of 4.00% of the gross proceeds of the Initial Public Offering held in the Trust Account (based on the percentage of funds remaining in the Trust Account after redemptions of Public Shares in accordance with the Underwriting Agreement between the Company and CCM), or $9,200,000. The deferred fee will become payable to the Underwriter from the amounts held in the Trust Account solely in the event that we complete a Business Combination, subject to the terms of the underwriting agreement.
Critical Accounting Estimates
The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America 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 not identified any critical accounting estimates as of September 30, 2026.
Recent Accounting Standards
Refer to Note 2 – Significant Accounting Policies in the Notes to the 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 make disclosures under this Item.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Disclosure controls are procedures that are designed with the objective of ensuring that information required to be disclosed in our reports filed under the Exchange Act, such as this report, is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures are also designed with the objective of ensuring that such information is accumulated and communicated to our management, including our Certifying Officers, as appropriate, to allow timely decisions regarding required disclosure. Under the supervision and with the participation of our management, including our Certifying Officers, we carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on the foregoing, our Certifying Officers concluded that our disclosure controls and procedures were not effective as of September 30, 2026, as a result of the material weakness described below.
We identified a material weakness related to the fact that we currently lack properly designed, implemented and effectively operating controls as of September 30, 2026. Management, with oversight from the board of directors and the audit committee of the board of directors will implement a remediation plan for this material weakness, including, among other things, designing and maintaining a formal control environment, accounting policies, procedures and controls to achieve complete, accurate and timely financial accounting, reporting and disclosures. We cannot be certain as to the timing of completion of our evaluation, testing, and remediation actions or their effect on our operations.
We do not expect that our disclosure controls and procedures will prevent all errors and all instances of fraud. Disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Further, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and the benefits must be considered relative to their costs. Because of the inherent limitations in all disclosure controls and procedures, no evaluation of disclosure controls and procedures can provide absolute assurance that we have detected all our control deficiencies and instances of fraud, if any. The design of disclosure controls and procedures also is based partly on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.
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.
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PART II – OTHER INFORMATION
Item 1. Legal Proceedings.
To the knowledge of our management, there is no material litigation, arbitration or governmental proceeding currently pending against us, any of our officers or directors in their capacity as such or against any of our property.
Item 1A. Risk Factors.
Factors that could cause our actual results to differ materially from those in this Quarterly Report are any of the risks described in our Final Prospectus, filed with the SEC on August 27, 2025. Any of these factors 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.
As of the date of this Quarterly Report on Form 10-Q, there have been no material changes to the risk factors disclosed in our Final Prospectus. We may disclose changes to such factors or disclose additional factors from time to time in our future filings with the SEC.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
On August 28, 2025, we consummated the Initial Public Offering of 23,000,000 Units, including the full exercise by the underwriters of their over-allotment option in the amount of 3,000,000 Units, at $10.00 per Unit, generating gross proceeds of $230,000,000. The securities sold in the Initial Public Offering were registered under the Securities Act on registration statement on Form S-1 (No. 333-288156). The SEC declared the registration statement effective on August 26, 2025.
Simultaneously with the closing of the Initial Public Offering, we consummated the sale of 891,250 Private Units at a price of $10.00 per Private Unit, in a private placement to our Sponsor and CCM, the representative of the underwriter in the Initial Public Offering, generating gross proceeds of $8,912,500. The Private Units are identical to the Units sold in the Initial Public Offering, except as otherwise disclosed in the Registration Statement. No underwriting discounts or commissions were paid with respect to such sale. The issuance of the Private Units was made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act of 1933, as amended.
Transaction costs amounted to $14,245,395, consisting of $4,600,000 of cash underwriting fee, up to $9,200,000 of deferred underwriting fee (based on the percentage of funds remaining in the Trust Account after redemptions of Public Shares in accordance with the Underwriting Agreement between the Company and CCM), and $445,395 of other offering costs.
Following the closing of the Initial Public Offering, of the net proceeds received from the consummation of the Initial Public Offering and simultaneous Private Placement, $230,000,000 ($10.00 per unit sold in the Initial Public Offering) was placed in the Trust Account.
There has been no material change in the planned use of proceeds from the Initial Public Offering and Private Placement as is described in the Company’s final prospectus for its Initial Public Offering.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
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Item 6. Exhibits.
The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q.
| * | 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.
| CSLM Digital Asset Acquisition Corp III, Ltd | |||
| November 6, 2026 | By: | /s/ Vikas Mittal | |
| Name: | Vikas Mittal | ||
| Title: | Chief Financial Officer and Co-Chief Executive Officer | ||
| November 6, 2026 | By: | /s/ Ryan Gentry | |
| Name: | Ryan Gentry | ||
| Title: | Co-Chief Executive Officer and Chief Investment Officer | ||
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Exhibit 31.1
CERTIFICATION PURSUANT TO
RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Vikas Mittal, certify that:
| 1. | I have reviewed this quarterly report on Form 10-Q of CSLM Digital Asset Acquisition Corp III, Ltd; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: |
| a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| b) | [Paragraph intentionally omitted in accordance with SEC Release Nos. 33-8238/34-47986 and 33-8392/34-49313]; |
| c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| November 6, 2026 | By: | /s/ Vikas Mittal |
| Vikas Mittal | ||
| Chief Financial Officer and Co-Chief Executive Officer | ||
| (Principal Financial Officer) |
Exhibit 31.2
CERTIFICATION PURSUANT TO
RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Ryan Gentry, certify that:
| 1. | I have reviewed this quarterly report on Form 10-Q of CSLM Digital Asset Acquisition Corp III, Ltd; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: |
| a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| b) | [Paragraph intentionally omitted in accordance with SEC Release Nos. 33-8238/34-47986 and 33-8392/34-49313]; |
| c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| November 6, 2026 | By: | /s/ Ryan Gentry |
| Ryan Gentry | ||
| Co-Chief Executive Officer and Chief Investment Officer | ||
| (Principal Executive Officer) |
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report on Form 10-Q of CSLM Digital Asset Acquisition Corp III, Ltd (the “Company”) for the quarterly period ended September 30, 2026 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Vikas Mittal, as Chief Financial Officer and Co-Chief Executive Officer of the Company, hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of his knowledge:
| 1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
| 2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the period covered by the Report. |
| Date: November 6, 2026 | By: | /s/ Vikas Mittal |
| Vikas Mittal | ||
| Chief Financial Officer and Co-Chief Executive Officer | ||
| (Principal Financial Officer) |
Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report on Form 10-Q of CSLM Digital Asset Acquisition Corp III, Ltd (the “Company”) for the quarterly period ended September 30, 2026 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Ryan Gentry, as Co-Chief Executive Officer and Chief Investment Officer of the Company, hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of his knowledge:
| 1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
| 2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the period covered by the Report. |
| Date: November 6, 2026 | By: | /s/ Ryan Gentry |
| Ryan Gentry | ||
| Co-Chief Executive Officer and Chief Investment Officer | ||
| (Principal Executive Officer) |