8-K
Lakeshore Acquisition III Corp. (LCCC)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
May 1, 2025
Date of Report (Date of earliest event reported)
| Lakeshore Acquisition III Corp. | ||
|---|---|---|
| (Exact Name of Registrant as Specified in its Charter) | ||
| Cayman Islands | 001-42623 | N/A |
| --- | --- | --- |
| (State or other jurisdiction of<br><br>incorporation) | (Commission<br><br>File Number) | (I.R.S. Employer<br><br>Identification No.) |
| 667 Madison Avenue,<br><br>New York, NY | 10065 | |
| --- | --- | |
| (Address of Principal Executive Offices) | (Zip Code) |
Registrant’s telephone number, including area code:
(917)327-9933
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act |
| --- | --- |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange<br><br>on which registered |
|---|---|---|
| Ordinary Shares | LCCC | The Nasdaq Global Market |
| Rights | LCCCR | The Nasdaq Global Market |
| Units | LCCCU | The Nasdaq Global Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
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. ☐
Item 8.01. Other Events.
As previously disclosed on a Current Report on Form 8-K filed with the Securities and Exchange Commission on May 2, 2025, Lakeshore Acquisition III Corp. (the “Company”) consummated its initial public offering (the “IPO”) of 6,900,000 units (the “Units”), which includes full exercise of the underwriter’s over-allotment option to purchase 900,000 additional Units. Each Unit consists of one ordinary share of the Company, par value $0.0001 per share (the “Ordinary Shares”) and one right that entitles the holder thereof to receive one-sixth (1/6) of one Ordinary Share upon consummation of the Company’s initial business combination (“Right”). The Units were sold at a price of $10.00 per Unit, generating gross proceeds to the Company of $69,000,000.
Simultaneously with the closing of the IPO, the Company consummated a private placement (the “Private Placement”) in which RedOne Investment Limited (the “Sponsor”) purchased 280,000 private units (the “Private Placement Units”) at a price of $10.00 per Private Unit, generating total gross proceeds of $2,800,000.
Of the net proceeds of the IPO and the sale of the Private Placement Units, $69,000,000 has been deposited into a U.S. based trust account at Wilmington Trust, National Association, with Wilmington Trust, National Association acting as trustee, for the benefit of the Company’s public shareholders.
An audited balance sheet as of May 1, 2025 reflecting receipt of the proceeds upon consummation of the IPO and the Private Placement is included with this report as Exhibit 99.1.
Item 9.01. Financial Statements and Exhibits.
| Exhibit No. | Description |
|---|---|
| 99.1 | Balance Sheet dated May 1, 2025 |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
| 2 | |
| --- |
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 hereunto duly authorized.
Dated: May 7, 2025
LAKESHORE ACQUISITION III CORP.
| By: | /s/ Deyin (Bill) Chen |
|---|---|
| Name: | Deyin (Bill) Chen |
| Title: | Chief Executive Officer |
| 3 | |
| --- |
lakeshore_ex991.htm EXHIBIT 99.1
INDEX TO FINANCIAL STATEMENT
| Report of Independent Registered Public Accounting Firm | F-2 |
|---|
| Balance Sheet as of May 1, 2025 | F-3 |
| Notes to Financial Statement | F-4 |
| F-1 |
|---|
To the Board of Directors and Shareholders of
Lakeshore Acquisition III Corp.
Opinion on the Financial Statement
We have audited the accompanying balance sheet of Lakeshore Acquisition III Corp. (the “Company”) as of May 1, 2025, and the related notes (collectively referred to as the “financial statement”). In our opinion, the financial statement presents fairly, in all material respects, the financial position of the Company as of May 1, 2025, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
This financial statement is the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statement based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audit included performing procedures to assess the risks of material misstatement of the financial statement, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statement. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statement. We believe that our audit provides a reasonable basis for our opinion.
| /s/ Adeptus Partners, LLC |
|---|
Adeptus Partners, LLC
We have served as the Company’s auditor since 2024.
Ocean, New Jersey
May 7, 2025
| F-2 |
|---|
LAKESHORE ACQUISITION III CORP.
Balance Sheet
May 1, 2025
| ASSETS |
|---|
| Current Assets | | |
| Cash | 1,221,788 | |
| Prepaid expenses | 15,000 | |
| Total Current Assets | 1,236,788 | |
| Marketable securities held in Trust Account | 69,000,000 | |
| Total Assets | 70,236,788 | | | LIABILITIES AND SHAREHOLDERS’ DEFICIT | | |
| Deferred underwriting fee payable | 2,415,000 | |
| Total Liabilities | 2,415,000 | | | Commitments and Contingencies (Note 6) | | |
| Ordinary shares subject to possible redemption: 6,900,000 shares at redemption value of 10.00 per share | 69,000,000 | | | Shareholders' Deficit | | |
| Ordinary shares, 0.0001 par value, 500,000,000 shares authorized, 2,005,000 shares issued and outstanding (excluding 6,900,0000 shares subject to possible redemption) | 201 | |
| Additional paid in capital | - | |
| Accumulated deficit | (1,178,413 | ) |
| Total Shareholders' Deficit | (1,178,212 | ) |
| Total Liabilities and Shareholders' Deficit | 70,236,788 | |
All values are in US Dollars.
The accompanying notes are an integral part of the financial statement.
| F-3 |
|---|
LAKESHORE ACQUISITION III CORP.
NOTES TO FINANCIAL STATEMENT
Note 1 — Organization and Business Operations
Lakeshore Acquisition III Corp. (the “Company”) was incorporated in the Cayman Islands on October 21, 2024, as a blank check company whose objective is to acquire, through a merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization or other similar business combination with one or more businesses or entities. The Company’s efforts to identify a prospective target business will not be limited to any particular industry or geographic region.
As of May 1, 2025, the Company had not yet commenced any operations and had not generated revenue. All activities for the period from October 21, 2024 (inception) through May 1, 2025 relate to the Company’s formation and the initial public offering (the “IPO”) described below. The Company will not generate any operating revenue until after its initial business combination, at the earliest. The Company will generate non-operating income in the form of interest income on cash and cash equivalents from the proceeds derived from the IPO. The Company has selected December 31 as its fiscal year-end.
The Company’s sponsor is RedOne Investment Limited, a BVI limited liability company.
Financing
The registration statement for the Company’s IPO (as described in Note 3) was declared effective on April 29, 2025 (the “Effective Date”). On May 1, 2025, the Company consummated an IPO of 6,900,000 units, which includes the full exercise of the over-allotment option by the underwriters in the IPO, at $10.00 per unit (the “Public Units”), generating total gross proceeds of $69,000,000.
Simultaneously with the IPO, the Company sold to its sponsor 280,000 units at $10.00 per unit (the “Private Units”) in a private placement (as described in Note 4), generating total gross proceeds of $ 2,800,000.
Offering costs amounted to $3,934,900, consisting of $1,035,000 of underwriting commissions, $2,415,000 of deferred underwriting commissions to be in the form of ordinary shares at $10.00 per share upon the consummation of the Company’s initial business combination, and $484,900 of other offering costs. The Company received net proceeds of $70,280,100 from the IPO and the private placement without considering deferred underwriting commissions.
Trust Account
Upon the closing of the IPO and the private placement, $69,000,000 was placed in a trust account (the “Trust Account”) with Wilmington Trust, National Association acting as trustee.
The funds held in the trust account can be invested in United States government treasury bills, notes or bonds having a maturity of 180 days or less or in money market funds meeting the applicable conditions under Rule 2a-7 promulgated under the Investment Company Act of 1940, as amended, until the earlier of the consummation of its first business combination and the Company’s failure to consummate a business combination within 15 months from the consummation of the IPO.
Placing funds in the Trust Account may not protect those funds from third party claims against the Company. In addition, interest income earned on the funds in the Trust Account may be released to the Company to pay its income or other tax obligations. With these exceptions, expenses incurred by the Company may be paid prior to a business combination only from the net proceeds of the IPO and private placement not held in the Trust Account.
| F-4 |
|---|
Business Combination
Pursuant to Nasdaq listing rules, the Company’s initial business combination may occur with one or more target businesses having an aggregate fair market value equal to at least 80% of the value of the funds in the Trust Account (excluding any taxes payable on the income earned on the Trust Account), which the Company refers to as the 80% test, at the time of the execution of a definitive agreement for its initial business combination, although the Company may structure a business combination with one or more target businesses whose fair market value significantly exceeds 80% of the Trust Account balance. If the Company is no longer listed on Nasdaq, it will not be required to satisfy the 80% test.
The Company currently anticipates structuring a business combination to acquire 100% of the equity interests or assets of the target business or businesses. The Company may, however, structure a business combination where the Company merges directly with the target business or where the Company acquires less than 100% of such interests or assets of the target business in order to meet certain objectives of the target management team or shareholders or for other reasons, but the Company will only complete such business combination if the post-transaction company owns 50% or more of the outstanding voting securities of the target or otherwise owns a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act. If less than 100% of the equity interests or assets of a target business or businesses are owned or acquired by the post-transaction company, the portion of such business or businesses that is owned or acquired is what will be valued for purposes of the 80% test.
The Company will either seek shareholder approval of any business combination at a meeting called for such purpose at which shareholders may seek to convert their shares into their pro rata share of the aggregate amount then on deposit in the Trust Account, less any taxes then due but not yet paid, or provide shareholders with the opportunity to sell their shares to the Company by means of a tender offer for an amount equal to their pro rata share of the aggregate amount then on deposit in the Trust Account, less any taxes then due but not yet paid.
Notwithstanding the foregoing, a public shareholder, together with any affiliate of his or any other person with whom he is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Exchange Act) will be restricted from seeking conversion rights with respect to 20% or more of the ordinary shares sold in this offering without the Company’s prior written consent.
In connection with any shareholder vote required to approve any business combination, the initial shareholders will agree (i) to vote any of their respective shares in favor of the initial business combination and (ii) not to convert such respective shares into a pro rata portion of the Trust Account or seek to sell their shares in connection with any tender offer the Company engages in.
Liquidation
Pursuant to the amended and restated memorandum and articles of association, if the Company is unable to complete its initial business combination within 15 months from the effective date of the IPO, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than five business days thereafter, redeem 100% of the outstanding public shares at a price pro rata to the amount held in the Trust Account (less taxes payable and up to US$50,000 of interest to pay dissolution expenses) and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the remaining holders of ordinary shares and the Company’s board of directors, liquidate and dissolve.
Liquidity and Capital Resources
As of May 1, 2025, the Company had $1,221,788 in cash held outside its Trust Account available for the Company’s working capital purposes.
The Company’s liquidity needs prior to the consummation of the IPO had been satisfied through a payment from the sponsor of $25,000 (see Note 7) for the founder shares and the loan under an unsecured promissory note from the sponsor of $300,000 in total (see Note 5). On May 1, 2025, the $300,000 loan was repaid fully to the sponsor and no amounts were owed under the promissory note.
Upon the consummation of the IPO and the full exercise of over-allotment and associated private placements (see Note 3 and Note 4) on May 1, 2025, $69,000,000 of cash was placed in the Trust Account.
| F-5 |
|---|
In order to meet its working capital needs following the consummation of the IPO, the Company’s initial shareholders, officers and directors or their affiliates may, but are not obligated to, loan the Company funds, from time to time or at any time, in whatever amount they deem reasonable in their sole discretion. Each working capital loan would be evidenced by a promissory note and would either be paid upon consummation of the Company’s initial business combination, without interest, or, at the lender’s discretion, up to up to $1,000,000 of the working capital loan may be converted upon consummation of the Company’s business combination into additional private units at a price of $10.00 per unit. If the Company does not complete a business combination, the working capital loan will only be repaid with funds not held in the trust account and only to the extent available (see Note 5). To date, there were no amounts outstanding under any working capital loans.
Based on the foregoing, management believes that the Company will have sufficient working capital and borrowing capacity to meet its needs through the earlier of the consummation of a business combination or one year from this filing. Over this time period, the Company will be using these funds for paying existing accounts payable, identifying and evaluating prospective initial business combination candidates, performing due diligence on prospective target businesses, paying for travel expenditures, selecting the target business to merge with or acquire, and structuring, negotiating and consummating the business combination.
Note 2 — Summary of Significant Accounting Policies
Basis of presentation
The accompanying financial statement is presented in U.S. Dollars and in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”).
Emerging Growth Company
Section 102(b)(1) of the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) permits emerging growth companies to delay complying with new or revised financial accounting standards that do not yet apply to 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). 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 an 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.
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. There were no cash equivalents as of May 1, 2025.
Ordinary Shares Subject to Possible Redemption
The Company accounts for its ordinary shares subject to possible redemption in accordance with the guidance in ASC Topic 480 “Distinguishing Liabilities from Equity.” Ordinary shares subject to mandatory redemption (if any) are classified as a liability instrument and are measured at fair value. Conditionally redeemable ordinary shares (including ordinary shares that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) are classified as temporary equity. At all other times, ordinary shares are classified as shareholders’ equity. The Company’s public shares feature certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, as of May 1, 2025, ordinary shares subject to possible redemption are presented at redemption value of $10.00 per share as temporary equity, outside of the shareholders’ equity section of the Company’s balance sheet. The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable ordinary shares to equal the redemption value at the end of each reporting period. Increases or decreases in the carrying amount of redeemable ordinary shares are affected by charges against additional paid in capital or accumulated deficit if additional paid in capital equals to zero.
| F-6 |
|---|
Offering Costs Associated with the IPO
Offering costs consist of underwriting, legal, accounting, registration and other expenses incurred through the balance sheet date that are directly related to the IPO. As of May 1, 2025, offering costs totaled $3,934,900. The amount was consisted of $1,035,000 of underwriting commissions, $2,415,000 of deferred underwriting commissions (payment shall be in the form of ordinary shares at $10.00 per share deferred until consummation of the Company’s initial business combination), and $484,900 of other offering costs. The Company complies with the requirements of the ASC 340-10-S99-1 and SEC Staff Accounting Bulletin (“SAB”) Topic 5A – “Expenses of Offering”. Offering costs were charged to shareholders’ equity upon the completion of the IPO. The Company allocates offering costs between public shares and public rights based on the estimated fair values of them at the date of issuance. Accordingly, $3,820,394 was allocated to public shares and was charged to temporary equity; $114,506 was allocated to public rights, and was charged to shareholders’ equity.
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,” approximates the carrying amounts represented in the balance sheet, primarily due to their short-term nature.
Fair Value Measurement
Pursuant to FASB ASC 820, 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. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:
Level 1: Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.
Level 2: Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active.
Level 3: Unobservable inputs based on our assessment of the assumptions that market participants would use in pricing the asset or liability.
The following table presents information about the Company’s assets that are measured at fair value on a recurring basis at May 1, 2025 and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:
| Description | Level | May 1, 2025 |
|---|
| Assets: | | | | |
| Marketable securities held in Trust Account | | 1 | $ | 69,000,000 |
Use of Estimates
The preparation of financial statement in conformity with 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 statement and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates.
Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentration of credit risk consist of cash accounts in a financial institution which, at times may exceed the federal depository insurance coverage of $250,000. The Company has not experienced losses on these accounts and management believes the Company is not exposed to significant risks on such accounts.
Related Party Transactions
Parties, which can be a corporation or individual, are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operational decisions. Companies are also considered to be related if they are subject to common control or common significant influence.
The Company identifies and discloses related party and related party transactions in accordance with ASC 850 Related Party Disclosures (“ASC 850”) and guidance of SEC, including the nature of the relationship, the description of the transactions, the dollar amounts, and any outstanding balances.
Income Taxes
The Company accounts for income taxes under ASC 740 Income Taxes (“ASC 740”). ASC 740 requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statement and tax basis of assets and liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carry forwards. ASC 740 additionally requires a valuation allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not be realized.
| F-7 |
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ASC 740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position 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. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim period, disclosure and transition. The Company has identified Cayman Islands as its only “major” tax jurisdiction, as defined. Based on the Company’s evaluation, it has been concluded that there are no significant uncertain tax positions requiring recognition in the Company’s financial statements. Since the Company was incorporated on October 21, 2024, the evaluation was performed for 2024 tax year which will be the only period subject to examination. The Company believes that its income tax positions and deductions would be sustained on audit and does not anticipate any adjustments that would result in a material change to its financial position. The Company’s policy for recording interest and penalties associated with audits is to record such items as a component of income tax expense. There were no interest and penalties incurred since the Company was incorporated on October 21, 2024.
The Company may be subject to potential examination by foreign taxing authorities in the area of income taxes. These potential examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions and compliance with foreign tax laws.
The Company’s tax provision was deemed to be de minimis for the period presented. The Company is considered to be an exempted Cayman Islands Company, and is presently not subject to income taxes or income tax filing requirements in the Cayman Islands or the United States.
Recent Accounting Pronouncements
In November 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures.” The amendments in this ASU require disclosures, on an annual and interim basis, of significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”), as well as the aggregate amount of other segment items included in the reported measure of segment profit or loss. The ASU requires that a public entity disclose the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources. Public entities will be required to provide all annual disclosures currently required by Topic 280 in interim periods, and entities with a single reportable segment are required to provide all the disclosures required by the amendments in this ASU and existing segment disclosures in Topic 280. This ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The Company adopted ASU 2023-07 on January 1, 2025, as described in Note 8.
Management does not believe that any other recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying financial statement.
Note 3 — Initial Public Offering
Pursuant to the IPO on May 1, 2025, the Company sold 6,900,000 Public Units, which includes the full exercise of the underwriters’ over-allotment option, at a price of $10.00 per Public Unit. Each unit consists of one ordinary share and one right. Each right entitles the holder thereof to receive one-sixth of one ordinary share upon the consummation of an initial business combination. No fractional shares will be issued upon conversion of the rights (See Note 7).
All of the 6,900,000 public shares sold as part of the Public Units in the IPO contain a redemption feature which allows for the redemption of such public shares if there is a stockholder vote or tender offer in connection with the Business Combination and in connection with certain amendments to the Company’s amended and restated memorandum and articles of association, or in connection with the Company’s liquidation. In accordance with the Securities and Exchange Commission (the “SEC”) and its staff’s guidance on redeemable equity instruments, which has been codified in ASC 480-10-S99, redemption provisions not solely within the control of the Company require ordinary shares subject to redemption to be classified outside of permanent equity.
| F-8 |
|---|
As of May 1, 2025, the ordinary shares reflected on the balance sheet are reconciled in the following table.
| As of May 1,<br> <br>2025 |
|---|
| Gross proceeds | $ | 69,000,000 | |
| Less: | | | |
| Proceeds allocated to public rights | | (2,007,900 | ) |
| Offering costs of public shares | | (3,820,394 | ) |
| Plus: | | | |
| Accretion of carrying value to redemption value | | 5,828,294 | |
| Ordinary share subject to possible redemption | $ | 69,000,000 | |
Note 4 — Private Placement
Simultaneously with the closing of the IPO, RedOne Investment Limited, the Company’s sponsor, purchased an aggregate of 280,000 Private Units in a private placement at $10.00 per Private Unit. The Private Units are identical to the units sold in the IPO, as each private unit consists of one share of ordinary shares in the Company, and one right to receive one sixth (1/6) of a share of ordinary shares automatically upon the consummation of an initial business combination.
The holders of the private units have agreed (A) to vote the shares underlying their private units in favor of any proposed business combination, (B) not to propose, or vote in favor of, an amendment to the Company’s amended and restated memorandum and articles of association with respect to the Company’s pre-business combination activities prior to the consummation of such a business combination unless the Company provides public shareholders with the opportunity to convert their public shares in connection with any such vote, (C) not to convert any shares underlying the private units into the right to receive cash from the Trust Account in connection with a shareholder vote to approve an initial business combination or a vote to amend the provisions of the Company’s amended and restated memorandum and articles of association relating to shareholders’ rights or pre-business combination activity or sell their shares to the Company in connection with a tender offer the Company engages in and (D) that the shares underlying the private units shall not participate in any liquidating distribution upon winding up if a business combination is not consummated.
Note 5 — Related Party Transactions
Founder Shares
On November 6, 2024, 1,725,000 shares of the Company’s ordinary shares were subscribed by the sponsor at a price of approximately $0.014 per share for an aggregate amount of $25,000, which includes an aggregate of 225,000 ordinary shares that are subject to forfeiture if the over-allotment option is not exercised. The per share purchase price of the founder shares was determined by dividing the amount of cash contributed to the company by the aggregate number of founder shares issued. The number of founder shares issued was determined based on the expectation that the founder shares would represent 20% of the outstanding shares after this offering (not including the shares underlying the private placement units or the shares to be issued to the underwriter at closing of the business combination). Since the over-allotment option has been fully exercised, the 225,000 founder shares were no longer subject to forfeiture on May 1, 2025.
Administrative Service Fee
The Company has agreed, commencing on the signing of the administrative services agreement with the sponsor on November 17, 2024, to pay the sponsor a monthly fee of up to $10,000 up to the consummation of business combination, for the Company’s use of its personnel and other administrative resources. As of May 1, 2025, the Company had paid an aggregate of $54,000 to the sponsor.
| F-9 |
|---|
Related Party Loans
On December 11, 2024, the Company issued a $300,000 principal amount unsecured promissory note to the Company’s sponsor, and the Company had received such amount as of the issuance date. The note is non-interest bearing, and due after the date on which this offering is consummated or the Company determines to abandon this offering. On May 1, 2025, the $300,000 loan was repaid fully to the sponsor and no amounts were owed under the promissory note.
As mentioned in Note 1, in order to meet its working capital needs following the consummation of the IPO, the Company’s initial shareholders, officers and directors or their affiliates may, but are not obligated to, loan the Company funds, from time to time or at any time, in whatever amount they deem reasonable in their sole discretion. Each working capital loan would be evidenced by a promissory note and would either be paid upon consummation of the Company’s initial business combination, without interest, or, at the lender’s discretion, up to $1,000,000 of the working capital loan may be converted upon consummation of the Company’s business combination into additional private units at a price of $10.00 per unit. If the Company does not complete a business combination, the working capital loan will only be repaid with funds not held in the Trust Account and only to the extent available.
Note 6 — Commitments and Contingencies
Risks and Uncertainties
On August 16, 2022, the Inflation Reduction Act of 2022 (the “IR Act”) was signed into federal law. The IR Act provides for, among other things, a new U.S. federal 1% excise tax on certain repurchases (including redemptions) of stock by publicly traded domestic (i.e., U.S.) corporations and certain domestic subsidiaries of publicly traded foreign corporations. The excise tax is imposed on the repurchasing corporation itself, not its shareholders from whom shares are repurchased. The amount of the excise tax is generally 1% of the fair market value of the shares repurchased at the time of the repurchase. However, for purposes of calculating the excise tax, repurchasing corporations are permitted to net the fair market value of certain new stock issuances against the fair market value of stock repurchases during the same taxable year. In addition, certain exceptions apply to the excise tax. The U.S. Department of the Treasury (the “Treasury”) has been given authority to provide regulations and other guidance to carry out and prevent the abuse or avoidance of the excise tax. The IR Act applies to repurchases that occur after December 31, 2022.
Therefore, any redemption or other repurchase that occurs after December 31, 2022, in connection with a business combination, extension vote or otherwise, may be subject to the excise tax. Whether and to what extent the Company would be subject to the excise tax in connection with a business combination, extension vote or otherwise would depend on a number of factors, including (i) the fair market value of the redemptions and repurchases in connection with the business combination, extension or otherwise, (ii) the structure of a business combination, (iii) the nature and amount of any “PIPE” or other equity issuances in connection with a business combination (or otherwise issued not in connection with a business combination but issued within the same taxable year of a business combination) and (iv) the content of regulations and other guidance from the Treasury. In addition, because the excise tax would be payable by the Company and not by the redeeming shareholders, the mechanics of any required payments of the excise tax have not been determined. The foregoing could cause a reduction in the cash available on hand to complete a business combination and in the Company’s ability to complete a business combination.
Underwriting Agreement
A deferred underwriting commission of $0.35 per Public Unit sold, totaling $2,415,000 will be in the form of representative shares at $10.00 per share deferred until consummation of the Company’s initial business combination.
Registration Rights
The initial shareholders will be entitled to registration rights with respect to their initial shares, as well as the holders of the private units and holders of any securities issued to the Company’s initial shareholders, officers, directors or their affiliates in payment of working capital loans or extension loans made to the Company, will be entitled to registration rights with respect to the private units (and underlying securities), pursuant to an agreement signed on the effective date of the IPO. The holders of such securities are entitled to demand that the Company register these securities at any time after the Company consummates a business combination. In addition, the holders have certain “piggy-back” registration rights on registration statements filed after the Company’s consummation of a business combination.
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Note 7 — Shareholder’s Deficit
Ordinary shares
The Company is authorized to issue 500,000,000 ordinary shares with a par value of $0.0001 per share.
On November 6, 2024, 1,725,000 shares of the Company’s ordinary shares were subscribed by the sponsor at a price of approximately $0.014 per share for an aggregate of $25,000, which includes an aggregate of 225,000 ordinary shares that are subject to forfeiture if the over-allotment option is not exercised. The per share purchase price of the founder shares was determined by dividing the amount of cash contributed to the company by the aggregate number of founder shares issued. The number of founder shares issued was determined based on the expectation that the founder shares would represent 20% of the outstanding shares after this offering (not including the shares underlying the private placement units or the shares to be issued to the underwriter at closing of the business combination). Since the over-allotment option has been fully exercised, the 225,000 founder shares were no longer subject to forfeiture on May 1, 2025.
On May 1, 2025, the Company sold 6,900,000 Public Units, which includes the full exercise of the over-allotment option by the underwriters at a price of $10.00 per Public Unit in the IPO; and the Company sold to its sponsor an aggregate of 280,000 Private Units at $10.00 per Private Unit. Each Public Unit and Private Unit consists of one ordinary share and one right.
On May 1, 2025, there were 2,005,000 shares of ordinary shares issued and outstanding, excluding 6,900,000 shares subject to possible redemption.
Rights
Each holder of a public right will automatically receive one-sixth of one ordinary share upon consummation of an initial business combination. The Company will not issue fractional shares in connection with an exchange of rights. Fractional shares will be rounded down to the nearest whole share. As a result, the holders of rights must hold rights in multiples of six in order to receive shares for all of their rights upon closing of a business combination. If the Company are unable to complete an initial business combination within the required time period and redeem the public shares for the funds held in the trust account, holders of rights will not receive any of such funds for their rights and the rights will expire worthless. If the Company enters into a definitive agreement for a business combination in which the Company will not be the surviving entity, the definitive agreement will provide for the holders of rights to receive the same per share consideration the holders of the ordinary share will receive in the transaction on an as-converted into ordinary share basis.
The private rights have terms and provisions identical to public rights except that they are subject to certain transfer restrictions as set forth by a letter agreement.
The Company accounted for the public and private rights issued in connection with the IPO and the private placement based on an assessment of the rights’ specific terms and applicable guidance in ASC 480 and ASC 815.
The assessment considers whether the rights: (i) are freestanding financial instruments pursuant to ASC 480; (ii) meet the definition of a liability pursuant to ASC 480; and (iii) satisfy all requirements for equity classification under ASC 815, including whether the rights are indexed to the Company’s own ordinary shares, and whether the right holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification.
Based on this assessment, the public and private rights met the criteria for equity classification under ASC 815 as of their issuance date and are classified as equity.
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Note 8 —Segment Information
ASC Topic 280, “Segment Reporting”, establishes standards for companies to report, in their financial statements, information about operating segments, products, services, geographic areas, and major customers. Operating segments are defined as components of an enterprise 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 Executive 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, which include the following:
| As of May 1, 2025 |
|---|
| Cash | $ | 1,221,788 |
| Prepaid expenses | | 15,000 |
| Marketable securities held in Trust Account | | 69,000,000 |
| Total Assets | $ | 70,236,788 |
The CODM reviews the Company’s financial position by reviewing the total assets available to determine if sufficient resources are in place to discharge liabilities. The CODM is provided with details of cash and liquid resources available with the Company. Additionally, the CODM regularly reviews the status of deferred costs incurred to assess if these are in line with the planned use of proceeds from the public offering.
Note 9 —Subsequent Events
The Company’s management reviewed all material events that have occurred after the balance sheet date through the date which this financial statement was issued. The Company did not identify any subsequent events that would have required adjustment or disclosure in the financial statement.
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