LCCC 10-Q
Lakeshore Acquisition III Corp. (LCCC)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
For the quarterly period ended
For the transition period from ________ to _______
Commission File Number:
(Exact name of registrant as specified in its charter) |
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(State or other jurisdiction of incorporation or organization) |
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(Address of Principal Executive Offices, including zip code)
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(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
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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. ☒
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
☐ | Large accelerated filer | ☐ | Accelerated filer |
☒ | Smaller reporting company | ||
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| Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
As of August 5, 2026 there were
TABLE OF CONTENTS
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| Notes to Unaudited Condensed Consolidated Financial Statements |
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Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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PART I – FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements
LAKESHORE ACQUISITION III CORP.
Condensed Consolidated Balance Sheets
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ASSETS |
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Current Assets |
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Cash |
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Prepaid expenses |
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Total Current Assets |
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Marketable securities held in Trust Account |
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Total Assets |
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LIABILITIES AND SHAREHOLDERS’ DEFICIT |
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Current Liabilities |
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Accrued expenses and other current liabilities |
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Total Current Liabilities |
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Deferred underwriting fee payable |
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Total Liabilities |
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Commitments and Contingencies (Note 6) |
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Ordinary shares subject to possible redemption: |
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Shareholders’ Deficit |
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Ordinary shares, $ |
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Accumulated deficit |
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Total Shareholders’ Deficit |
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Total Liabilities and Shareholders’ Deficit |
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(1) | The number of non-redeemable ordinary shares outstanding excludes an aggregate of 225,000 ordinary shares that are subject to forfeiture if the over-allotment option is not exercised for the period from October 21, 2024 through April 30, 2025. In connection with the closing of the initial public offering and the underwriters’ full exercise of over-allotment option on May 1, 2025, the 225,000 shares were no longer subject to forfeiture. |
The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.
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LAKESHORE ACQUISITION III CORP.
Unaudited Condensed Consolidated Statements of Income
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Formation, general and administrative expenses |
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Loss From Operations |
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Other income |
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Interest income on marketable securities held in Trust Account |
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Net Income |
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Basic and diluted weighted average shares outstanding |
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Redeemable ordinary shares-basic and diluted |
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Non-redeemable ordinary shares-basic and diluted(1) |
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Basic and diluted net income (loss) per share |
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Redeemable ordinary shares-basic and diluted |
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Non-redeemable ordinary shares-basic and diluted |
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(1) | The number of non-redeemable ordinary shares outstanding excludes an aggregate of 225,000 ordinary shares that are subject to forfeiture if the over-allotment option is not exercised for the period from October 21, 2024 through April 30, 2025. In connection with the closing of the initial public offering and the underwriters’ full exercise of over-allotment option on May 1, 2025, the 225,000 shares were no longer subject to forfeiture. These shares were excluded from the calculation of weighted average shares outstanding until they were no longer subject to forfeiture. |
The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.
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LAKESHORE ACQUISITION III CORP.
Unaudited Condensed Consolidated Statements of Changes in Shareholders’ Deficit
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Balances, December 31, 2024(1) |
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Net loss |
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Balances, March 31, 2025(1) |
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Issuance of public units |
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Issuance of private units |
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Deduction of offering costs |
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Deduction for value of public shares subject to possible redemption |
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Allocation of offering costs to public shares subject to possible redemption |
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Net income |
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Deduction for increases of carrying value of redeemable public shares |
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Balances, June 30, 2025(1) |
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Balances, December 31, 2025(1) |
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Net income |
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Deduction for increases of carrying value of redeemable public shares |
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Balances, March 31, 2026 |
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Net income |
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Deduction for increases of carrying value of redeemable public shares |
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Balances, June 30, 2026 |
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(1) | The number of ordinary shares outstanding at December 31, 2024 and March 31, 2025 includes an aggregate of 225,000 ordinary shares that are subject to forfeiture if the over-allotment option is not exercised. In connection with the closing of the initial public offering and the underwriters’ full exercise of over-allotment option on May 1, 2025, the 225,000 shares were no longer subject to forfeiture. |
The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.
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LAKESHORE ACQUISITION III CORP.
Unaudited Condensed Consolidated Statements of Cash Flows
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Cash flows from operating activities |
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Net income |
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Adjustments to reconcile net income to net cash used in operating activities: |
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Changes in operating assets and liabilities: |
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Increase in prepaid expenses |
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Increase (Decrease) in accrued expenses |
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Net cash used in operating activities |
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Cash flows from investing activities |
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Cash deposited in trust account |
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Net cash used in investing activities |
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Cash flows from financing activities |
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Proceeds from issuance of public units |
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Proceeds from issuance of private units |
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Payment of underwriting fee |
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Payment of offering costs |
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Repayment of the principal of promissory note to related party |
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Net cash provided by financing activities |
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Cash at end of period |
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Non-cash financing activities |
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Deferred underwriting commission charged to additional paid in capital |
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Initial value of public shares subject to possible redemption |
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Allocation of offering cost related to public shares subject to possible redemption |
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Increases of carrying value of redeemable public shares |
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The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.
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LAKESHORE ACQUISITION III CORP.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
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 June 30, 2026, the Company had not yet commenced any operations and had not generated revenue. All activities for the period from October 21, 2024 (inception) through June 30, 2026 relate to the Company’s formation and the initial public offering (the “IPO”) described below and the efforts for its initial business combination. 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.
On April 13, 2026, CPRO Holding Limited was incorporated as a Cayman Islands exempt company and a wholly owned subsidiary of the Company (the "Purchaser"). On April 22, 2026, LCCC Merger Sub Inc. was incorporated as a British Virgin Islands business company and a wholly owned subsidiary of the Company ("Merger Sub"). Both companies were incorporated for the purpose of effecting the Company’s initial business combination and will not have any activities before the closing of the business combination (as described below in “Business Combination” in Note 1).
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
Simultaneously with the IPO, the Company sold to its sponsor
Offering costs amounted to $
Trust Account
Upon the closing of the IPO and the private placement, $
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 27 months from the consummation of the IPO (if the Company extends the period of time to consummate a Business Combination by the full amount of time).
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.
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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 the IPO without the Company’s prior written consent.
In connection with any shareholder vote required to approve any business combination, the initial shareholders will agree (a) 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.
Merger Agreement
On May 22, 2026, the Company entered into a merger agreement (the “Merger Agreement”) for the purpose of acquiring 100% of the equity securities of CPRO Electronic Holding Limited, a British Virgin Islands business company (“CPRO”), and its subsidiaries.
Pursuant to the Merger Agreement, immediately prior to the closing of the proposed business combination, the Company will be merged with and into the Purchaser, so that the separate corporate existence of the Company will cease, and the Purchaser will continue as the surviving corporation and as a listed company. Consequently, Merger Sub will become a wholly owned subsidiary of the Purchaser.
Pursuant to the Merger Agreement, CPRO will then merge with Merger Sub, with CPRO surviving and becoming a wholly owned subsidiary of the Purchaser. The aggregate consideration to be paid to existing shareholders of CPRO is $
Pursuant to a voting and support agreement executed concurrently with the Merger Agreement, the sponsor and certain CPRO shareholders agreed to vote in favor of the Merger Agreement and the transactions contemplated thereby and restrict transfers of the Company and CPRO shares, as applicable, until closing or termination of the Merger Agreement. In addition, the supporting shareholders agreed, for a period of two years from the closing, to vote as will be necessary to ensure that at least two persons designated by the sponsor will be elected to the Purchaser’s board of directors.
Extraordinary General Meeting
On July 27, 2026, the Company held an extraordinary general meeting (the “EGM”) at which shareholders approved (i) a proposal to amend and restate the Company’s amended and restated memorandum and articles of association to extend the date by which it has to consummate a business combination for an additional twelve months from August 1, 2026 to August 1, 2027, on a month-to-month basis, and (ii) a proposal to amend the Investment Management Trust Agreement with Wilmington Trust, N.A., to allow the Company to extend the date by which it must consummate a business combination on the same month-to month basis from August 1, 2026 to August 1, 2027, by depositing $
On July 27, 2026, pursuant to the Merger Agreement, CPRO Electronics Co., Ltd. (“CPRO Korea”) wired the first extension payment of $
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Liquidation
Pursuant to the second amended and restated memorandum and articles of association, if the Company is unable to complete its initial business combination within 27 months from the consummation of the IPO (if the Company extends the period of time to consummate a Business Combination by the full amount of time), the Company will (i) cease all operations except for the purpose of winding up, (ii)
Liquidity and Capital Resources
As of June 30, 2026, the Company had $
The Company’s liquidity needs prior to the consummation of the IPO had been satisfied through a payment from the sponsor of $
Upon the consummation of the IPO with the over-allotment option fully exercised and the private placement (see Note 3 and Note 4), $
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 $
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, staying as a public company and consummating the business combination.
Going Concern
The Company performed an assessment on its ability to continue as a going concern in accordance with Financial Accounting Standard Board’s Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern”. As of June 30, 2026, the company had $
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Note 2 — Summary of Significant Accounting Policies
Basis of presentation
The accompanying unaudited condensed consolidated financial statements are 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”). Accordingly, they do not include all of the information and footnotes required by GAAP. In the opinion of management, all adjustments (consisting of normal accruals) considered for a fair presentation have been included. Operating results for the three months and six months ended June 30, 2026 are not necessarily indicative of the results that may be expected for the year ending December 31, 2026 or any future period.
The accompanying unaudited condensed consolidated financial statements should be read in conjunction with audited financial statements and notes thereto included in the Form 10-K filed by the Company with the SEC on February 4, 2026.
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 unaudited condensed consolidated 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 June 30, 2026 and December 31, 2025.
Offering Costs Associated with the IPO
Offering costs consist of underwriting, legal, accounting, registration and other expenses incurred through the date of the closing of the IPO that are directly related to the IPO. As of May 1, 2025, offering costs totaled $
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, ordinary shares subject to possible redemption are presented at redemption value per share as temporary equity, outside of the shareholders’ equity section of the Company’s balance sheets. 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.
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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 sheets, 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 June 30, 2026 and December 31, 2025, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:
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Use of Estimates
The preparation of the unaudited condensed consolidated financial statements 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 unaudited condensed consolidated financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates.
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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 $
Net Income (Loss) per Share
The Company complies with accounting and disclosure requirements of FASB ASC 260, “Earnings Per Share”. In order to determine the net income (loss) attributable to both the redeemable shares and non-redeemable shares, the Company first considers the undistributed income (loss) allocable to both the redeemable shares and non-redeemable shares and the undistributed income (loss) is calculated using the total net income (loss) less interest income in trust account less any dividends paid. The company then allocates the undistributed income (loss) ratably based on the weighted average number of shares outstanding between the redeemable and non-redeemable shares. Any remeasurement of the accretion to redemption value of the ordinary shares subject to possible redemption is considered to be dividends paid to the public shareholders.
For the six months ended June 30, 2026 and June 30, 2025, the Company did not have any dilutive securities and other contracts that could, potentially, be exercised or converted into ordinary shares and then share in the earnings of the Company. As a result, diluted income (loss) per share is the same as basic income (loss) per share for the period presented. The calculation of diluted income (loss) per share does not consider the effect of the rights issued in connection with the IPO and the private placement since the conversion of rights to ordinary shares will be contingent on the occurrence of future events.
The net income (loss) per share presented in the statements of income is based on the following computation:
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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 unaudited condensed consolidated financial statements 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.
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 statements 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 unaudited condensed consolidated financial statements. 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. The Company’s wholly owned subsidiaries, CPRO Holding Limited was incorporated as a Cayman Islands exempt company, LCCC Merger Sub Inc. was incorporated as a British Virgin Islands business company, and their tax provisions were nil and they had no deferred tax assets for the period presented.
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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 unaudited condensed consolidated financial statements.
Note 3 — Initial Public Offering
Pursuant to the IPO on May 1, 2025, the Company sold
All of the
As of June 30, 2026, the ordinary shares subject to possible redemption reflected on the balance sheet are reconciled in the following table.
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Note 4 — Private Placement
Simultaneously with the closing of the IPO, Redone Investment Limited, the Company’s sponsor, purchased an aggregate of
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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 memorandum and articles of association, as amended, 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 memorandum and articles of association, as amended, 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,
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 $
Related Party Loans
On December 11, 2024, the Company issued a $
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 $
Other Related Party Transactions
For the three months ended June 30, 2026 and June 30, 2025, total reimbursement of out-of-pocket expenses paid to the sponsor, officers or directors were $
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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
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 $
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.
Engagement agreement with Legal Counsel
The Company has entered into an engagement agreement with its legal counsel with respect to the initial business combination. The fee will be based on the number of hours spent. An aggregate of $
Engagement agreement with Cayman Islands Counsel
The Company has entered into an engagement agreement with its Cayman Islands counsel with respect to the proposed initial business combination. Except for $
Engagement Agreement – Fairness Opinion
Except for $
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Engagement Agreement – Financial Advisory
The Company has retained a financial advisor with respect to the initial business combination. An initial retainer of $
Note 7 — Shareholders’ Deficit
Ordinary shares
The Company is authorized to issue
On November 6, 2024,
On May 1, 2025, the Company sold
As of June 30, 2026, there were
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 statements of income as net income or loss. The measure of segment assets is reported on the balance sheets 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:
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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 general and administrative expenses 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 these unaudited condensed consolidated financial statements was issued. Based on this review, other than the following subsequent events, no other subsequent events were identified that would have required adjustment or disclosure in the unaudited condensed consolidated financial statements.
On July 27, 2026, the Company held an extraordinary general meeting (the “EGM”) at which shareholders approved (i) a proposal to amend and restate the Company’s amended and restated memorandum and articles of association to extend the date by which it has to consummate a business combination for an additional twelve months from August 1, 2026 to August 1, 2027, on a month-to-month basis, and (ii) a proposal to amend the Investment Management Trust Agreement with Wilmington Trust, N.A., to allow the Company to extend the date by which it must consummate a business combination on the same month-to month basis from August 1, 2026 to August 1, 2027, by depositing $
On July 27, 2026, pursuant to the Merger Agreement, CPRO Korea wired the first extension payment of $
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| Table of Contents |
Item 2. Management’s Discussion And Analysis Of Financial Condition And Results Of Operations
References to “we”, “us”, “our” or the “Company” are to Lakeshore Acquisition III Corp., except where the context requires otherwise. The following discussion should be read in conjunction with our unaudited condensed consolidated financial statements and related notes thereto included elsewhere in this report.
Forward-Looking Statements
This quarterly report on Form 10-Q includes forward-looking statements. We have based these forward-looking statements on our current expectations and projections about future events. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about us that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “continue,” or the negative of such terms or other similar expressions. Factors that might cause or contribute to such a discrepancy include, but are not limited to, those described in our other Securities and Exchange Commission (the “SEC”) filings.
Overview
We are a blank check company incorporated as a Cayman Islands exempted company on October 21, 2024, for the purpose of entering into a merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization or other similar business combination with one or more businesses or entities. Our efforts to identify a prospective target business will not be limited to a particular industry or geographic region. We intend to utilize cash derived from the proceeds of our initial public offering (the “IPO”) in effecting our initial business combination.
We are an emerging growth company and, as such, we are subject to all of the risks associated with emerging growth companies.
We presently have no revenue. All activities for the period from October 21, 2024 (inception) through June 30, 2026 relate to the formation and the IPO and the efforts for the initial business combination. We will have no operations other than the active solicitation of one or more target businesses with which to complete a business combination, and we will not generate any operating revenue until after our initial business combination, at the earliest. We will have non-operating income in the form of interest income on cash and cash equivalents from the proceeds derived from the IPO.
On May 1, 2025, we consummated an IPO of 6,900,000 Public Units, which includes the underwriters’ full exercise of the over-allotment option, at a price of $10.00 per Public Unit, generating gross proceeds of $69,000,000.
Simultaneously with the closing of the IPO, we consummated the sale of 280,000 Private Units, at a price of $10.00 per Private Unit, in a private placement to our sponsor, RedOne Investment Limited, generating 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 which will 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.
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. This amount equals 6,900,000 ordinary shares subject to possible redemption multiplied by redemption value of $10.00 per share.
As indicated in the accompanying unaudited condensed consolidated financial statements, as of June 30, 2026, we had $252,080 in cash held outside the Trust Account available for working capital purposes.
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We cannot assure you that our plans to complete our initial business combination will be successful. If we are unable to complete our initial business combination within 27 months from the consummation of the IPO (if we extend the period of time to consummate an initial business combination by the full amount of time), we 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 $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 our board of directors, liquidate and dissolve. In the event of liquidation, the holders of the founder shares and Private Units will not participate in any redemption distribution with respect to their founder shares or Private Units, until all of the claims of any redeeming shareholders and creditors are fully satisfied (and then only from funds held outside the Trust Account).
Recent Developments
On May 22, 2026, the Company entered into a merger agreement (the “Merger Agreement”) with (i) CPRO Electronics Holding Limited, a British Virgin Islands business company (“CPRO”); (ii) CPRO Electronics Co., Ltd., a South Korean company, which will become a wholly-owned subsidiary of CPRO prior to closing of the transactions contemplated in the Merger Agreement (“CPRO Korea”); (iii) CPRO Holding Limited, a Cayman Islands exempted company and wholly-owned subsidiary of the Company (the “Purchaser”); and (iv) LCCC Merger Sub Inc., a British Virgin Islands business company and wholly-owned subsidiary of the Company (“Merger Sub”).
Merger Agreement
Prior to the closing of the transactions contemplated in the Merger Agreement, and subject to the terms and conditions set forth therein, the Company will be merged with and into the Purchaser, the separate corporate existence of the Company will cease, and the Purchaser will continue as the surviving corporation under the Cayman Companies Act (the “Reincorporation Merger”). Merger Sub will become a wholly owned subsidiary of the Purchaser as a consequence of the Reincorporation Merger. In connection with the Reincorporation Merger, at the effective time of the Reincorporation Merger:
| · | each issued and outstanding unit will be separated automatically into its constituent securities (i.e., one ordinary share and one right); |
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| · | each issued and outstanding ordinary share immediately prior to the effective time of the Reincorporation Merger (including the ordinary shares from the separation of the units) will be converted automatically into one Purchaser ordinary share; |
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| · | each issued and outstanding right (including the rights from the separation of the units) will be converted automatically into a right to receive one-sixth of one Purchaser ordinary share at the closing of transaction; |
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| · | each issued and outstanding ordinary share immediately prior to the effective time of the Reincorporation Merger will cease to be issued and will be automatically cancelled and retired and will cease to exist. |
At least one business day following the Reincorporation Merger, subject to the terms and conditions set forth in the Merger Agreement, Merger Sub will be merged with and into CPRO (the “Acquisition Merger”). Following the Acquisition Merger, the separate corporate existence of Merger Sub will cease, and CPRO will continue as the surviving company in the Acquisition Merger under the laws of the British Virgin Islands and a wholly owned subsidiary of the Purchaser.
Pursuant to the terms of the Merger Agreement, the aggregate consideration to be paid to existing shareholders of CPRO is $185,000,000 (the “Base Purchase Price”), which will be paid entirely in stock, consisting of newly issued Purchaser ordinary shares valued at $10.00 per share. Upon the effectiveness of the Acquisition Merger, all issued and outstanding ordinary shares of CPRO will be cancelled and automatically converted into the right to receive, without interest, the applicable number of Purchaser ordinary shares.
Pursuant to the terms of the Merger Agreement, the Base Purchase Price will be automatically adjusted downwards dollar-for-dollar to the extent the indebtedness of CPRO and its subsidiaries as of immediately prior to the closing of the transaction exceeds $26,000,000.
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Key Related Agreements:
| · | Voting and Support Agreement: The sponsor and certain CPRO shareholders agreed to vote in favor of the Merger Agreement and the transactions contemplated thereby and restrict transfers of their Company and CPRO shares, as applicable, until closing or termination. In addition, the supporting shareholders agreed, for a period of two years from the closing, to vote as will be necessary to ensure that at least two persons designated by the sponsor will be elected to the Purchaser’s board of directors. |
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| · | Lock-Up Agreements: At closing, the sponsor and certain CPRO shareholders will be subject to transfer restrictions on their Purchaser ordinary shares, generally lasting 180 days for sponsor-related shares and shares held by minority holders (<5% holders) and 12 months for other shareholders. |
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| · | Registration Rights Agreement: The Purchaser will enter into a registration rights agreement with certain shareholders of CPRO and the Company, pursuant to which such shareholders will be provided demand and “piggy-back” registration rights, subject to certain requirements and customary conditions. All expenses of registration will be paid by the Purchaser. |
Extraordinary General Meeting
On July 27, 2026, the Company held an extraordinary general meeting (the “EGM”) at which shareholders approved (i) a proposal to amend and restate the Company’s amended and restated memorandum and articles of association to extend the date by which it has to consummate a business combination for an additional twelve months from August 1, 2026 to August 1, 2027, on a month-to-month basis, and (ii) a proposal to amend the Investment Management Trust Agreement with Wilmington Trust, N.A., to allow the Company to extend the date by which it must consummate a business combination on the same month-to month basis from August 1, 2026 to August 1, 2027, by depositing $67,500 into the Trust Account per one-month extension. In connection with the shareholders’ vote at the EGM, an aggregate of 5,082,213 ordinary shares were tendered for redemption.
On July 27, 2026, pursuant to the Merger Agreement, CPRO Korea wired the first extension payment of $67,500 to the Trust Account, extending the deadline by which the Company must consummate its initial business combination by one (1) month, from August 1, 2026 to September 1, 2026.
Results of Operations
All activities from October 21, 2024 (inception) up to the consummation of the IPO was in preparation for the IPO.
Since the consummation of the IPO, our activities have been primarily focused on evaluating potential business combination candidates and consummating a business combination. We do not anticipate generating any operating revenues until the consummation of our initial business combination. We expect to generate non-operating income in the form of interest income from the proceeds derived from the IPO. We will incur expenses associated with being a public company, as well as costs related to the search for suitable business combination targets and consummating a business combination.
For the three months ended June 30, 2026, we had a net income of $339,107. We incurred $287,368 of general and administrative expenses and earned $626,475 of interest income from investments in our Trust Account.
For the six months ended June 30, 2026, we had a net income of $848,952. We incurred $396,012 of general and administrative expenses and earned $1,244,964 of interest income from investments in our Trust Account.
For the three months ended June 30, 2025, we had a net income of $216,467. We incurred $250,844 of general and administrative expenses and earned $467,311 of interest income from investments in our Trust Account.
For the six months ended June 30, 2025, we had a net income of $181,779. We incurred $285,532 of general and administrative expenses and earned $467,311 of interest income from investments in our Trust Account.
Liquidity and Capital Resources
As of June 30, 2026, we had $252,080 in cash held outside the Trust Account available for our working capital purposes.
Prior to the consummation of the IPO, our liquidity needs had been satisfied through a payment from the sponsor of $25,000 for the founder shares, and the loan under an unsecured promissory note from the sponsor of $300,000. On May 1, 2025, the $300,000 loan was repaid fully to the sponsor and no amounts were owed under the promissory note.
We consummated the IPO and private placement on May 1, 2025. Upon the consummation of the IPO and the private placement, $69,000,000 of cash was placed in the Trust Account with Wilmington Trust, National Association acting as trustee. As of June 30, 2026, an aggregate of $70,858,017 was held in the Trust Account invested in U.S. 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.
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In order to meet our working capital needs following the consummation of the IPO, our initial shareholders, officers and directors or their affiliates may, but are not obligated to, loan us funds, from time to time or at any time, in 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 our 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 our business combination into additional Private Units at a price of $10.00 per unit. If we do 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. To date, there were no amounts outstanding under any working capital loans.
Based on the foregoing, management believes that we will have sufficient working capital and borrowing capacity to meet our needs through the earlier of the consummation of a business combination or one year from this filing. Over this time period, we will be using these funds for paying existing accounts payable, staying as a public company and consummating the business combination.
If our estimates of the costs of undertaking due diligence and negotiating our initial business combination are 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 convert 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.
We performed an assessment on our ability to continue as a going concern in accordance with Financial Accounting Standard Board’s Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern”. As of June 30, 2026, we had $252,080 cash, working capital of $294,580, and will continue to incur significant costs in pursuit of an acquisition. That raises substantial doubt about our ability to continue as a going concern. In addition, there is no assurance that we will be able to consummate the initial business combination within 27 months from the consummation of the IPO (if we extend the period of time to consummate an initial business combination by the full amount of time) or obtain an extension for time allowed to consummate a business combination. In the event that we fail to consummate a business combination within the required period, we will face mandatory liquidation and dissolution subject to certain obligations under applicable laws or regulations. No adjustments have been made to the carrying amounts of assets or liabilities regarding the possibility of us not continuing as a going concern, as a result of cash shortage or failing to consummate a business combination within 27 months from the consummation of the IPO. Management plans to continue its efforts to consummate a business combination within 27 months from the consummation of the IPO.
Critical Accounting Policies
Management’s discussion and analysis of our results of operations and liquidity and capital resources are based on our unaudited financial information. We describe our significant accounting policies in Note 2 - Significant Accounting Policies, of the Notes to Unaudited Condensed Consolidated Financial Statements included in this report. The preparation of our unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the summary of reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements. Judgments are based on historical experience, terms of existing contracts, industry trends and information available from outside sources, as appropriate. However, by their nature, judgments are subject to an inherent degree of uncertainty, and, therefore, actual results could differ from our estimates.
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Offering Costs Associated with the IPO
Offering costs consist of underwriting, legal, accounting, registration and other expenses incurred through the date of the closing of the IPO that are directly related to the IPO. As of May 1, 2025, offering costs totaled $3,934,900. The amount 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. We comply 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. We allocated 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.
Ordinary Shares Subject to Possible Redemption
We account for 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. Our public shares feature certain redemption rights that are considered to be outside of our control and subject to occurrence of uncertain future events. Accordingly, ordinary shares subject to possible redemption are presented at redemption value per share as temporary equity, outside of the shareholders’ equity section of our balance sheets. We recognize 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.
Net Income (Loss) per Share
We comply with accounting and disclosure requirements of FASB ASC 260, “Earnings Per Share”. In order to determine the net income (loss) attributable to both the redeemable shares and non-redeemable shares, we first consider the undistributed income (loss) allocable to both the redeemable shares and non-redeemable shares and the undistributed income (loss) is calculated using the total net income (loss) less interest income in trust account less any dividends paid. We then allocate the undistributed income (loss) ratably based on the weighted average number of shares outstanding between the redeemable and non-redeemable shares. Any remeasurement of the accretion to redemption value of the ordinary shares subject to possible redemption is considered to be dividends paid to the public shareholders.
For the six months ended June 30, 2026 and June 30, 2025, we did not have any dilutive securities and other contracts that could, potentially, be exercised or converted into ordinary shares and then share in the earnings of us. As a result, diluted income (loss) per share is the same as basic loss per share for the period presented. The calculation of diluted income (loss) per share does not consider the effect of the rights issued in connection with the IPO and the private placement since the conversion of rights to ordinary shares will be contingent on the occurrence of future events.
Recent Accounting Standards
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. We adopted ASU 2023-07 on January 1, 2025.
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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 unaudited condensed consolidated financial statements.
Off-Balance Sheet Arrangements
We had no obligations, assets or liabilities, which would be considered off-balance sheet arrangements as of June 30, 2026 and December 31, 2025. We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements. We have not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any non-financial assets.
Contractual Obligations
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 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 our initial shareholders, officers, directors or their affiliates in payment of working capital loans or extension loans made to us, 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 we register these securities at any time after we consummate a business combination. In addition, the holders have certain “piggy-back” registration rights on registration statements filed after the consummation of a business combination.
Engagement agreement with Legal Counsel
We have entered into an engagement agreement with our legal counsel with respect to the initial business combination. The fee will be based on the number of hours spent. An aggregate of $150,000 will be paid prior to the closing of the business combination, and the balance will be due upon the closing of the business combination.
Engagement agreement with Cayman Islands Counsel
We have entered into an engagement agreement with our Cayman Islands counsel with respect to the proposed initial business combination. Except for $30,000 paid following the execution of the engagement agreement during the three months ended June 30, 2026, the remaining of $30,000 will be due upon the closing of the business combination.
Engagement Agreement – Fairness Opinion
Except for $30,000 paid following the appointment during the fiscal year ended December 31, 2025, an aggregate of $45,000 will be paid prior to and upon the effectiveness of the registration statement of the initial business combination, based on an engagement agreement entered into by us with the provider of fairness opinion for the initial business combination.
Engagement Agreement – Financial Advisory
We have retained a financial advisor with respect to the initial business combination. An initial retainer of $150,000 was paid during the fiscal year ended December 31, 2025, a second retainer of $150,000 was paid during the three months ended June 30, 2026, and we agreed to pay 500,000 newly issued shares of common stock at $10.00 per share at the closing of the business combination if we complete the initial business combination within 30 months from the engagement date.
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Item 3. Quantitative and Qualitative Disclosures About Market Risk
Not required for smaller reporting companies.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.
As required by Rules 13a 15 and 15d 15 under the Exchange Act, our Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of June 30, 2026. Based upon this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that during the period covered by this report, our disclosure controls and procedures were effective.
Changes in Internal Control over Financial Reporting
There was no change in our internal control over financial reporting that occurred for the three months ended June 30, 2026, covered by this quarterly report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 1A. Risk Factors
As a smaller reporting company we are not required to make disclosures under this Item.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds from Registered Securities
On May 1, 2025, we consummated our initial public offering (the “IPO”) of 6,900,000 units (the “Units”), which includes full exercise of the underwriter’s over-allotment option. 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 our initial business combination (a “Right”). The Units were sold at a price of $10.00 per Unit, generating gross proceeds to the Company of $69,000,000. The securities in the offering were registered under the Securities Act on a registration statement on Form S-1 (No. 333-286395). The SEC declared the registration statement effective on April 29, 2025.
Simultaneously with the closing of the IPO, we consummated a private placement (the “Private Placement”) in which RedOne Investment Limited (the “Sponsor”), which purchased 280,000 private units (the “Private Units”) at a price of $10.00 per Private Unit, generating total proceeds of $2,800,000. The issuances were made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act. The Private Units are identical to the Public Units except with respect to certain registration rights and transfer restrictions.
We paid a total of $1,035,000 underwriting discounts and commissions and $484,900 for other offering costs and expenses related to the Initial Public Offering. In addition, the underwriters agreed to defer $2,415,000 in underwriting discounts and commissions, which will be in the form of ordinary shares at $10.00 per share upon the consummation of the Company’s initial business combination.
A total of $69,000,000 of the proceeds from the IPO and the sale of the Private Placement Units was placed in a U.S.-based trust account at Wilmington Trust, National Association acting as trustee. $1,221,788 of cash was held outside of the Trust Account available for our working capital purposes.
For a description of the use of the proceeds generated in our Initial Public Offering, see Part I, Item 2 of this Quarterly Report.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
None.
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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.
No. |
| Description of Exhibit |
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101.INS |
| Inline XBRL Instance Document |
101.CAL |
| Inline XBRL Taxonomy Extension Calculation Linkbase Document |
101.SCH |
| Inline XBRL Taxonomy Extension Schema Document |
101.DEF |
| Inline XBRL Taxonomy Extension Definition Linkbase Document |
101.LAB |
| Inline XBRL Taxonomy Extension Labels Linkbase Document |
101.PRE |
| Inline XBRL Taxonomy Extension Presentation Linkbase Document |
104 |
| Inline Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
* | Furnished. |
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SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Lakeshore Acquisition III Corp. |
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Date: August 5, 2026 | By: | /s/ Deyin (Bill) Chen |
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| Name: | Deyin (Bill) Chen |
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| Title: | Chief Executive Officer and Chief Financial Officer |
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| (Principal Executive Officer and Principal Financial and Accounting Officer) |
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