Melar Acquisition Corp. I 10-Q for FY2025 Q2
Melar Acquisition Corp. I (MACI)
About this 10-Q
Melar Acquisition Corp. I filed this 10-Q on August 14, 2025, covering the quarter ended June 30, 2025 (FY2025 Q2).
Headline figures
Quarter ended June 30, 2025, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Net income
- $1.56M
- up 1364.0% from net income of $106.3K a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
For the quarterly period ended
or
For the transition period from to
Commission File Number:
(Exact name of registrant as specified in its charter)
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(State or other jurisdiction of | | (I.R.S. Employer |
incorporation or organization) | | Identification No.) |
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(Address of principal executive offices) | | (Zip Code) |
(
(Registrant’s telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
| Trading Symbol(s) |
| Name of each exchange on which |
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| | The | ||
| | The |
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 | ||
| | | 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 13, 2025, there were
MELAR ACQUISITION CORP. I
FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2025
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
MELAR ACQUISITION CORP. I
CONDENSED BALANCE SHEETS
| | June 30, | | | | |
| | 2025 | | December 31, | ||
| | (Unaudited) | | 2024 | ||
ASSETS |
| | | |
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Current assets |
| | | | |
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Cash | | $ | | | $ | |
Due from Everli | | | | | | — |
Prepaid expenses | | | | |
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Total current assets | | | | |
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| | | | | | |
Long-term prepaid insurance | | | — | |
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Marketable securities and cash held in Trust Account | | | | |
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TOTAL ASSETS | | $ | | | $ | |
| | | | | | |
LIABILITIES AND SHAREHOLDERS’ DEFICIT | | | | |
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Current liabilities | | | | |
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Accounts payable and accrued liabilities | | $ | | | $ | |
| | | |
| — | |
Total current liabilities | | | | |
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Deferred underwriting fee | | | | |
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TOTAL LIABILITIES | | | | |
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COMMITMENTS AND CONTINGENCIES (Note 6) | | | | |
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Class A ordinary shares subject to possible redemption, | | | | |
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SHAREHOLDERS’ DEFICIT | | | | |
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Preference shares, $ | | | |
| ||
Class A ordinary shares, $ | | | — | |
| — |
Class B ordinary shares, $ | | | | |
| |
Additional paid-in capital | | | — | |
| — |
Accumulated deficit | | | ( | |
| ( |
TOTAL SHAREHOLDERS’ DEFICIT | | | ( | |
| ( |
TOTAL LIABILITIES AND SHAREHOLDERS’ DEFICIT | | $ | | | $ | |
The accompanying notes are an integral part of the unaudited condensed financial statements.
1
MELAR ACQUISITION CORP. I
UNAUDITED CONDENSED STATEMENTS OF OPERATIONS
|
| | | | | | |
| For the | |||
| | | | | | | | | Period from | |||
| | | | | | | | | | | March 11, 2024 | |
| | Three Months | | Three Months | | Six Months | | (Inception) | ||||
| | Ended | | Ended | | Ended | | through | ||||
| | June 30, | | June 30, | | June 30, | | June 30, | ||||
|
| 2025 | | 2024 | | 2025 |
| 2024 | ||||
General and administrative costs | | $ | | | $ | | | $ | | | $ | |
Loss from operations | |
| ( | |
| ( | | | ( | |
| ( |
| | | | | | | | | | | | |
OTHER INCOME (EXPENSE) | |
| | |
|
| | | | |
|
|
Interest due from Everli | | | | | | — | | | | | | — |
Interest expense on Sponsor Loan | | | ( | | | — | | | ( | | | — |
Interest on cash held in the operating account | |
| | |
| — | | | | |
| — |
Change in fair value of over-allotment option liability | | | — | | | | | | — | | | |
Dividends and interest earned on marketable securities and cash held in Trust Account | | | | | | | | | | | | |
Total other income, net | | | | | | | | | | | | |
| | | | | | | | | | | | |
NET INCOME | | $ | | | $ | | | $ | | | $ | |
| | | | | | | | | | | | |
Weighted average redeemable Class A ordinary shares outstanding – basic and diluted | |
| | |
| | | | | |
| |
| | | | | | | | | | | | |
Net income per redeemable Class A ordinary share – basic and diluted | | $ | | $ | | | $ | | | $ | | |
| | | | | | | | | | | | |
Weighted average non-redeemable Class B ordinary shares outstanding – basic | |
| | |
| | | | | |
| |
| | | | | | | | | | | | |
Net income per non-redeemable Class B ordinary share – basic | | $ | | | $ | | | $ | | | $ | |
| | | | | | | | | | | | |
Weighted average non-redeemable Class B ordinary shares outstanding –diluted | |
| | |
| | | | | |
| |
| | | | | | | | | | | | |
Net income per non-redeemable Class B ordinary share – diluted | | $ | | | $ | | | $ | | | $ | |
The accompanying notes are an integral part of the unaudited condensed financial statements.
2
MELAR ACQUISITION CORP. I
UNAUDITED CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS’ DEFICIT
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025
| | Class A | | Class B | | Additional | | | | Total | |||||||||
| | Ordinary Shares | | Ordinary Shares | | Paid-in | | Accumulated | | Shareholders’ | |||||||||
|
| Shares |
| Amount |
| Shares |
| Amount |
| Capital |
| Deficit |
| Deficit | |||||
Balance – December 31, 2024 | | — | | $ | — | | | | $ | | | $ | — | | $ | ( | | $ | ( |
| | | | | | | | | | | | | | | | | | | |
Accretion for Class A ordinary shares to redemption amount | | — | |
| — | | — | |
| — | |
| — | |
| ( | |
| ( |
| | | | | | | | | | | | | | | | | | | |
Net income | | — | |
| — | | — | |
| — | |
| — | |
| | |
| |
| | | | | | | | | | | | | | | | | | | |
Balance – March 31, 2025 | | — | | $ | — | | | | $ | | | $ | — | | $ | ( | | $ | ( |
| | | | | | | | | | | | | | | | | | | |
Accretion for Class A ordinary shares to redemption amount | | — | | | — | | — | | | — | | | — | | | ( | | | ( |
| | | | | | | | | | | | | | | | | | | |
Net income | | — | | | — | | — | | | — | | | — | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Balance – June 30, 2025 | | — | | $ | — | | | | $ | | | $ | — | | $ | ( | | $ | ( |
THREE MONTHS ENDED JUNE 30, 2024 AND
FOR THE PERIOD FROM MARCH 11, 2024 (INCEPTION) THROUGH JUNE 30, 2024
| | Class A | | Class B | | Additional | | |
| | Total | ||||||||
|
| Ordinary Shares |
| Ordinary Shares |
| Paid-in | | Accumulated | | Shareholders’ | |||||||||
|
| Shares |
| Amount |
| Shares (1) |
| Amount |
| Capital |
| Deficit |
| Equity (Deficit) | |||||
Balance – March 11, 2024 (inception) |
| | | $ | |
| | | $ | | | $ | | | $ | | | $ | |
| | | | | | | | | | | | | | | | | | | |
Issuance of Class B ordinary shares to Sponsor |
| — | |
| — |
| | |
| | |
| | |
| — | |
| |
| | | | | | | | | | | | | | | | | | | |
Net loss |
| — | |
| — |
| — | |
| — | |
| — | |
| ( | |
| ( |
| | | | | | | | | | | | | | | | | | | |
Balance – March 31, 2024 |
| — | | | — |
| | | $ | | | $ | | | $ | ( | | $ | |
| | | | | | | | | | | | | | | | | | | |
Accretion for Class A ordinary shares to redemption amount |
| — | |
| — |
| — | |
| — | |
| ( | |
| ( | |
| ( |
| | | | | | | | | | | | | | | | | | | |
Sale of | | — | | | — | | — | | | — | | | | | | — | | | |
| | | | | | | | | | | | | | | | | | | |
Fair value of Public Warrants at issuance | | — | | | — | | — | | | — | | | | | | — | | | |
| | | | | | | | | | | | | | | | | | | |
Allocated value of transaction costs to Public and Private Warrants |
| — | |
| — |
| — | |
| — | |
| ( | |
| — | |
| ( |
| | | | | | | | | | | | | | | | | | | |
Net income |
| — | |
| — |
| — | |
| — | |
| — | |
| | |
| |
| | | | | | | | | | | | | | | | | | | |
Balance – June 30, 2024 |
| — | | $ | — |
| | | $ | | | $ | — | | $ | ( | | $ | ( |
(1) |
The accompanying notes are an integral part of the unaudited condensed financial statements.
3
MELAR ACQUISITION CORP. I
UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS
|
| | |
| For the | |
| | | | | Period from | |
| | | | | March 11, | |
| | For the | | 2024 | ||
| | Six Months | | (Inception) | ||
| | Ended | | through | ||
| | June 30, | | June 30, | ||
| | 2025 | | 2024 | ||
Cash Flows from Operating Activities: | | | | | | |
Net income | | $ | | | $ | |
Adjustments to reconcile net income to net cash used in operating activities: | | | | |
|
|
Formation costs paid by Sponsor in exchange for issuance of Class B ordinary shares | | | — | |
| |
Interest earned on marketable securities and cash held in Trust Account | | | ( | |
| ( |
Payment of general and administrative costs through promissory note – related party | | | — | |
| |
Change in fair value of over-allotment option liability | | | — | |
| ( |
Interest due from Everli | | | ( | | | — |
Interest expense on Sponsor Loan | | | | | | — |
Changes in operating assets and liabilities: | | | | |
|
|
Prepaid expenses | | | | |
| ( |
Due from Sponsor | | | — | |
| |
Accounts payable and accrued expenses | | | | |
| |
Net cash used in operating activities | | | ( | |
| ( |
| | | | | | |
Cash Flows from Investing Activities: | | | | |
|
|
Investment of cash in Trust Account | | | — | |
| ( |
Payment of invoices on behalf of Everli | | | ( | | | — |
Net cash used in investing activities | | | ( | |
| ( |
| | | | | | |
Cash Flows from Financing Activities: | | | | |
|
|
Proceeds from sale of Units, net of underwriting discounts paid | | | — | |
| |
Proceeds from sale of Private Placements Warrants | | | — | |
| |
Repayment of promissory note - related party | | | — | |
| ( |
Proceeds from Sponsor Loan | | | | | | — |
Payment of offering costs | | | — | |
| ( |
Net cash provided by financing activities | | | | |
| |
| | | | | | |
Net Change in Cash | | | ( | |
| |
Cash – Beginning of period | | | | |
| — |
Cash – End of period | | $ | | | $ | |
| | | | | | |
Non-Cash investing and financing activities: | | | | |
|
|
Deferred offering costs paid by Sponsor in exchange for issuance of Class B ordinary shares | | $ | — | | $ | |
Deferred offering costs paid through promissory note – related party | | $ | — | | $ | |
Overallotment liability at Initial Public Offering date | | $ | — | | $ | |
Accretion of Class A ordinary shares to redemption value | | $ | | | $ | |
Deferred underwriting fee payable | | $ | — | | $ | |
Offering costs charged to additional paid-in capital | | $ | — | | $ | |
The accompanying notes are an integral part of the unaudited condensed financial statements.
4
MELAR ACQUISITION CORP. I
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2025
(Unaudited)
NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS
Melar Acquisition Corp. I (the “Company”) is a blank check company incorporated as a Cayman Islands exempted company on March 11, 2024. The Company was incorporated for the purpose of effecting a merger, amalgamation, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses (the “Business Combination”).
As of June 30, 2025, the Company had not commenced any operations. All activity for the period from March 11, 2024 (inception) through June 30, 2025 relates to the Company’s formation, its initial public offering (“Initial Public Offering”), which is described below, and subsequent to the Initial Public Offering, identifying a target company for a Business Combination. The Company will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest. The Company generates non-operating income in the form of dividends and interest income on marketable securities and cash held in the Trust Account (discussed below).
The registration statement for the Company’s Initial Public Offering was declared effective on June 17, 2024. On June 20, 2024, the Company consummated the Initial Public Offering of
Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of
Transaction costs amounted to $
The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering and the Private Placement Warrants, although substantially all of the net proceeds are intended to be generally applied toward consummating a Business Combination (less deferred underwriting commissions).
The Company’s Business Combination must be with one or more target businesses that together have a fair market value equal to at least
5
MELAR ACQUISITION CORP. I
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2025
(Unaudited)
Following the closing of the Initial Public Offering, on June 20, 2024, an amount of $
Except with respect to dividends and interest earned on the funds held in the Trust Account that may be released to the Company for taxes payable, if any, the proceeds from the Initial Public Offering and the sale of the Private Placement Warrants will not be released from the Trust Account until the earliest of (i) the completion of the Company’s initial Business Combination, (ii) the redemption of the Company’s public shares if the Company is unable to complete the initial Business Combination within
The Company will provide its public shareholders with the opportunity to redeem, regardless of whether they abstain, vote for, or against, the Company’s initial Business Combination, all or a portion of their public shares upon the completion of the initial Business Combination either (i) in connection with a general meeting called to approve the initial Business Combination or (ii) without a shareholder vote by means of a tender offer. The decision as to whether the Company will seek shareholder approval of a proposed initial Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The public shareholders will be entitled to redeem their shares at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account calculated as of two business days prior to the consummation of the initial Business Combination, including interest earned on the funds held in the Trust Account (less taxes payable), divided by the number of then outstanding public shares, subject to the limitations. The amount in the Trust Account was initially $
The ordinary shares subject to redemption were recorded at a redemption value and classified as temporary equity upon the completion of the Initial Public Offering, in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 480, “Distinguishing Liabilities from Equity.” In such case, if the Company seeks shareholder approval, a majority of the issued and outstanding shares voted are voted in favor of the Business Combination.
The Company will have only the duration of the Completion Window to complete the initial Business Combination. However, if the Company is unable to complete its initial Business Combination within the Completion Window, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter (and subject to lawfully available funds therefor), redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account (which interest shall be net of taxes payable, if any, and up to $
6
MELAR ACQUISITION CORP. I
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2025
(Unaudited)
The Sponsor, officers and directors entered into a letter agreement with the Company, pursuant to which they have agreed to (i) waive their redemption rights with respect to the Class B ordinary shares initially purchased by the Sponsor (the “founder shares”) and public shares in connection with the completion of the initial Business Combination; (ii) waive their redemption rights with respect to their founder shares and public shares in connection with a shareholder vote to approve an amendment to the Company’s amended and restated memorandum and articles of association (A) to modify the substance or timing of the Company’s obligation to allow redemption in connection with the initial Business Combination or to redeem
The Sponsor has agreed that it will be liable to the Company if and to the extent any claims by a third party (other than the Company’s independent registered public accounting firm) for services rendered or products sold to the Company, or a prospective target business with which the Company has entered into a written letter of intent, confidentiality or other similar agreement or Business Combination agreement, reduce the amount of funds in the Trust Account to below the lesser of (i) $
As further described in Note 10, on July 30, 2025, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with (i) MAC I Merger Sub Inc., a Nevada corporation and a wholly-owned subsidiary of Melar (“Merger Sub”), (ii) Everli Global Inc., a Nevada corporation (together with its successors, “Everli”), (iii) the Sponsor, in the capacity as the representative from and after the effective time of the Merger (as defined below) for the shareholders of the Company (other than the Escrowed Seller (as defined below) and his successors and assigns) in accordance with the terms and conditions of the Merger Agreement, and (iv) Salvatore Palella (the “Escrowed Seller”). For more information regarding such proposed Business Combination with Everli, refer to the Company’s Current Reports on Form 8-K filed with the Securities and Exchange Commission (the “SEC”) on July 31, 2025 and August 5, 2025 and the other filings the Company and Everli may make from time to time with the SEC.
Liquidity and Capital Resources
As of June 30, 2025, the Company had $
The Company has until June 20, 2026, to consummate the initial Business Combination (assuming no extensions). If the Company does not complete a Business Combination within the Completion Window, the Company will trigger an automatic winding up, dissolution and liquidation pursuant to the terms of the amended and restated memorandum and articles of association. In connection with the Company’s assessment of going concern considerations in accordance with Accounting Standards Update (“ASU”) 2014 - 15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” management has determined that the mandatory liquidation and subsequent dissolution, should the Company be unable to complete a Business Combination by the end of the Combination Period, raises substantial doubt about the Company’s ability to continue as a going concern. No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to liquidate after June 20, 2026.
7
MELAR ACQUISITION CORP. I
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2025
(Unaudited)
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X of the SEC. Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented.
The accompanying unaudited condensed financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, as filed with the SEC on March 21, 2025. The interim results for the three and six months ended June 30, 2025 are not necessarily indicative of the results to be expected for the year ending December 31, 2025 or for any future periods.
Emerging Growth Company
The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
Use of Estimates
The preparation of the financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.
Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates.
8
MELAR ACQUISITION CORP. I
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2025
(Unaudited)
Cash and Cash Equivalents
The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company had $
Marketable Securities and Cash Held in Trust Account
At June 30, 2025, substantially all of the assets held in the Trust Account were held in U.S. Treasury Bills. At December 31, 2024, primarily all of the assets held in the Trust Account were held in money market funds which were invested in U.S. Treasury securities. The Company accounts for its marketable securities as trading securities under ASC 320, “Investments—Debt and Equity Securities,” where securities are presented at fair value on the unaudited condensed balance sheets. Trading securities are presented on the unaudited condensed balance sheets at fair value at the end of each reporting period. Gains and losses resulting from the change in fair value of investments held in the Trust Account are included in dividends and interest earned on marketable securities and cash held in Trust Account in the accompanying statements of operations. The estimated fair values of investments held in the Trust Account are determined using available market information. Fair values of these investments are determined by Level 1 inputs utilizing quoted prices (unadjusted) in active markets for identical assets.
Due from Everli
On May 30, 2025, the Company entered into a secured promissory note and pledge agreement with Everli for a principal amount of up to $
The principal and accrued interest of the Everli Note shall be due and payable on the earliest of: (i) July 29, 2025 if that certain non-binding term sheet, dated April 16, 2025, by and between the Company and Everli (the “Term Sheet”), is terminated by the Company in its sole discretion; (ii) five () business days after any other termination of the Term Sheet in accordance with the terms thereof; (iii) five () business days after the termination of a definitive agreement for a Business Combination transaction involving Everli and the Company; and (iv) five () business days after Everli’s receipt of at least an aggregate of $
The Company complies with the requirements of the ASC 835 “Interest” and reports accrued interest on the unaudited statement of operations as interest due from Everli and reports the loan amount and unpaid interest as due from Everli on the unaudited condensed balance sheet. At June 30, 2025, the Company had loaned Everli $
Offering Costs
The Company complies with the requirements of the ASC 340-10-S99 and SEC Staff Accounting Bulletin Topic 5A, ”Expenses of Offering.” Offering costs consist principally of professional and registration fees that are related to the Initial Public Offering. FASB ASC 470-20, “Debt with Conversion and Other Options,” addresses the allocation of proceeds from the issuance of convertible debt into its equity and debt components. The Company applies this guidance to allocate Initial Public Offering proceeds from the Units between Class A ordinary shares and warrants, using the residual method by allocating Initial Public Offering proceeds first to assigned value of the warrants and then to the Class A ordinary shares. Offering costs allocated to the Class A ordinary shares were charged to temporary equity and offering costs allocated to the Public Warrants and Private Placement Warrants were charged to shareholders’ deficit as Public Warrants and Private Placement Warrants after management’s evaluation were accounted for under equity treatment.
9
MELAR ACQUISITION CORP. I
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2025
(Unaudited)
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 unaudited condensed balance sheets, primarily due to its short-term nature.
Net Income per Ordinary Share
The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share.” The Company has two classes of shares, which are referred to as redeemable Class A ordinary shares and non-redeemable Class B ordinary shares. Income and losses are shared pro rata between the two classes of shares. This presentation assumes an initial Business Combination as the most likely outcome. Net income per ordinary share is calculated by dividing the net income by the weighted average ordinary shares outstanding for the respective period.
At June 30, 2025, the calculation of diluted net income does not consider the effect of the Public Warrants underlying the Units sold in the Initial Public Offering and the Private Placement Warrants to purchase an aggregate of
The following tables present a reconciliation of the numerator and denominator used to compute basic and diluted net income (loss) per share for each class of ordinary shares:
| | For the Three Months Ended | | For the Six Months Ended | ||||||||
| | June 30, 2025 | | June 30, 2025 | ||||||||
| | Redeemable | | Non-Redeemable | | Redeemable | | Non-Redeemable | ||||
|
| Class A |
| Class B |
| Class A |
| Class B | ||||
Basic and diluted net income per ordinary share: | | |
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| |
|
| |
|
| |
|
Numerator: | | |
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| |
|
| |
|
| |
|
Allocation of net income | | $ | | | $ | | | $ | | | $ | |
Denominator: | |
| | |
| | |
| | |
| |
Weighted average ordinary shares outstanding | |
| | |
| | |
| | |
| |
Basic and diluted net income per ordinary share | | $ | | | $ | | | $ | | | $ | |
| | | | | | | | For the Period from March 11, | ||||
| | For the Three Months Ended | | 2024 (Inception) through | ||||||||
| | June 30, 2024 | | June 30, 2024 | ||||||||
| | Redeemable | | Non-Redeemable | | Redeemable | | Non-Redeemable | ||||
|
| Class A |
| Class B |
| Class A |
| Class B | ||||
Basic net income per ordinary share: | | | | | | | | | | | | |
Numerator: | | |
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| |
|
| |
|
| |
|
Allocation of net income | | $ | | | $ | | | $ | | | $ | |
Denominator: | |
| | |
| | |
| | |
| |
Weighted average ordinary shares outstanding | |
| | |
| | |
| | |
| |
Basic net income per ordinary share | | $ | | | $ | | | $ | | | $ | |
10
MELAR ACQUISITION CORP. I
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2025
(Unaudited)
|
| | | | | |
| For the Period from March 11, | ||||
| | For the Three Months Ended | | 2024 (Inception) through | ||||||||
| | June 30, 2024 | | June 30, 2024 | ||||||||
| | Redeemable | | Non-Redeemable | | Redeemable | | Non-Redeemable | ||||
|
| Class A |
| Class B |
| Class A |
| Class B | ||||
Diluted net income per ordinary share: |
| |
|
| |
|
| |
|
| |
|
Numerator: |
| |
|
| |
|
| |
|
| |
|
Allocation of net income | | $ | | | $ | | | $ | | | $ | |
Denominator: | |
|
| |
|
| |
|
| |
|
|
Weighted average ordinary shares outstanding | |
| | |
| | |
| | |
| |
Diluted net income per ordinary share | | $ | | | $ | | | $ | | | $ | |
Income Taxes
The Company accounts for income taxes under ASC Topic 740, “Income Taxes,” which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
ASC Topic 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The Company’s management determined that the Cayman Islands is the Company’s major tax jurisdiction. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. As of June 30, 2025 and December 31, 2024, there were
The Company is considered to be an exempted Cayman Islands company with no connection to any other taxable jurisdiction and is presently not subject to income taxes or income tax filing requirements in the Cayman Islands or the United States.
Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist of a cash account in a financial institution, which, at times, may exceed the Federal Deposit Insurance Corporation coverage limit of $
Derivative Financial Instruments
The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with ASC Topic 815, “Derivatives and Hedging.” For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value on the grant date and is then re-valued at each reporting date, with changes in the fair value reported in the unaudited condensed statements of operations. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative liabilities are classified in the unaudited condensed balance sheets as current or non-current based on whether or not net cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date. The underwriters’ over-allotment option was deemed to be a freestanding financial instrument indexed on the contingently redeemable shares and was accounted for as a liability pursuant to ASC 480.
11
MELAR ACQUISITION CORP. I
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2025
(Unaudited)
Warrant Instruments
The Company accounts for warrants as either equity - classified or liability - classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in FASB ASC 480, “Distinguishing Liabilities from Equity” (“ASC 480”), and ASC 815, “Derivatives and Hedging” (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own ordinary shares and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.
For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid - in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. Accordingly, as of the date of issuance, the Company evaluated and classified the warrant instruments under equity treatment at its assigned fair value.
Class A Ordinary Shares Subject to Redemption
The public shares contain a redemption feature which allows for the redemption of such public shares in connection with the Company’s liquidation, or if there is a shareholder vote or tender offer in connection with the Company’s initial Business Combination. In accordance with ASC 480-10-S99, the Company classifies public shares subject to redemption outside of permanent deficit as the redemption provisions are not solely within the control of the Company. The Company recognizes changes in redemption value immediately as it occurs and will adjust the carrying value of redeemable shares to equal the redemption value at the end of each reporting period. Immediately upon the closing of the Initial Public Offering, the Company recognized the accretion from initial book value to redemption amount value. The change in the carrying value of redeemable shares will result in charges against additional paid-in capital (to the extent available) and accumulated deficit. Accordingly, at June 30, 2025 and December 31, 2024, Class A ordinary shares subject to possible redemption are presented at redemption value as temporary equity, outside of the shareholders’ deficit section of the Company’s unaudited condensed balance sheets. At June 30, 2025 and December 31, 2024, the Class A ordinary shares subject to possible redemption reflected in the unaudited condensed balance sheets are reconciled in the following table:
|
| Shares |
| Amount | |
Gross proceeds |
| | | $ | |
Less: |
| | |
| |
Proceeds allocated to Public Warrants |
| — | |
| ( |
Proceeds allocated to the over-allotment option |
| — | |
| ( |
Class A ordinary shares issuance costs |
| — | |
| ( |
Plus: | | | | | |
Accretion of carrying value to redemption value | | — | | | |
Class A ordinary shares subject to possible redemption, December 31, 2024 |
| | | $ | |
Plus: |
| | |
| |
Accretion of carrying value to redemption value | | — | | | |
Class A ordinary shares subject to possible redemption, March 31, 2025 | | | | $ | |
Plus: | | | | | |
Accretion of carrying value to redemption value | | — | | | |
Class A ordinary shares subject to possible redemption, June 30, 2025 |
| | | $ | |
12
MELAR ACQUISITION CORP. I
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2025
(Unaudited)
Recent Accounting Pronouncements
In November 2024, the FASB issued ASU 2024-03, “Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses,” requiring public entities to disclose additional information about specific expense categories in the notes to the financial statements on an interim and annual basis. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and for interim periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2024-03.
Management does not believe that any other recently issued, but not effective, accounting standards, if currently adopted, would have a material effect on the Company’s unaudited condensed financial statements.
NOTE 3. PUBLIC OFFERING
Pursuant to the Initial Public Offering, the Company sold
NOTE 4. PRIVATE PLACEMENT
Simultaneously with the closing of the Initial Public Offering, the Sponsor and the underwriters purchased an aggregate of
The Private Placement Warrants are identical to the Public Warrants sold in the Initial Public Offering except that, so long as they are held by the Sponsor, the underwriters, or their permitted transferees, the Private Placement Warrants (i) may not (including the Class A ordinary shares issuable upon exercise of these Private Placement Warrants), subject to certain limited exceptions, be transferred, assigned or sold by the holders until
The Sponsor, officers and directors have entered into a letter agreement with the Company, pursuant to which they have agreed to (i) waive their redemption rights with respect to their founder shares and public shares in connection with the completion of the initial Business Combination; (ii) waive their redemption rights with respect to their founder shares and public shares in connection with a shareholder vote to approve an amendment to the Company’s amended and restated memorandum and articles of association (A) to modify the substance or timing of the Company’s obligation to allow redemption in connection with the initial Business Combination or to redeem
13
MELAR ACQUISITION CORP. I
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2025
(Unaudited)
NOTE 5. RELATED PARTY TRANSACTIONS
Founder Shares
On March 11, 2024, the Sponsor made a capital contribution of $
The Company’s initial shareholders have agreed not to transfer, assign or sell any of their founder shares and any Class A ordinary shares issued upon conversion thereof until the earlier to occur of (i)
Promissory Note — Related Party
The Sponsor agreed to loan the Company an aggregate of up to $
Administrative Services Agreement
The Company entered into an agreement with an affiliate of the Sponsor to pay an aggregate of $
Related Party Loans
In order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor or certain of the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (the “Working Capital Loans”). If the Company completes a Business Combination, the Company would repay the Working Capital Loans. In the event that a Business Combination does not close, the Company may use a portion of the working capital held outside the Trust Account to repay the Working Capital Loans but no proceeds from the Trust Account would be used to repay the Working Capital Loans. Up to $
14
MELAR ACQUISITION CORP. I
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2025
(Unaudited)
warrant at the option of the lender. The warrants would be identical to the Private Placement Warrants. As of June 30, 2025 and December 31, 2024,
On May 30, 2025, pursuant to a promissory note issued by the Company (the “Sponsor Note”), the Sponsor agreed to loan the Company an aggregate of up to $
NOTE 6. COMMITMENTS AND CONTINGENCIES
Risks and Uncertainties
The Company’s results of operations and its ability to complete an initial Business Combination may be adversely affected by various factors that could cause economic uncertainty and volatility in the financial markets, many of which are beyond the Company’s control. The Company’s results of operations and its ability to consummate an initial Business Combination could be impacted by, among other things, changes in laws or regulations, downturns in the financial markets or in economic conditions, increases in oil prices, inflation, fluctuations in interest rates, increases in tariffs, supply chain disruptions, declines in consumer confidence and spending, public health considerations, and geopolitical instability, such as the military conflicts in Ukraine and the Middle East. The Company cannot at this time predict the likelihood of one or more of the above events, their duration or magnitude or the extent to which they may negatively impact the Company’s business and its ability to complete an initial Business Combination.
Registration Rights
The holders of the founder shares, Private Placement Warrants and the Class A ordinary shares underlying such Private Placement Warrants and warrants that may be issued upon conversion of the Working Capital Loans will have registration rights to require the Company to register a sale of any of the Company’s securities held by them and any other securities of the Company acquired by them prior to the consummation of the initial Business Combination pursuant to a registration rights agreement signed on the effective date of the Initial Public Offering. The holders of these securities are entitled to make up to
Underwriting Agreement
The underwriters had a
The underwriters were entitled to an underwriting discount of $
15
MELAR ACQUISITION CORP. I
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2025
(Unaudited)
NOTE 7. SHAREHOLDERS’ DEFICIT
Preference Shares — The Company is authorized to issue a total of
Class A Ordinary Shares — The Company is authorized to issue a total of
Class B Ordinary Shares — The Company is authorized to issue a total of
The founder shares will automatically convert into Class A ordinary shares concurrently with or immediately following the consummation of the initial Business Combination or earlier at the option of the holder on a
Holders of record of the Company’s Class A ordinary shares and Class B ordinary shares are entitled to
There is
16
MELAR ACQUISITION CORP. I
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2025
(Unaudited)
as a result of approving a transfer by way of continuation in a jurisdiction outside the Cayman Islands). Holders of the Class A ordinary shares will not be entitled to vote on these matters during such time. These provisions of the amended and restated memorandum and articles of association may only be amended if approved by a special resolution passed by the affirmative vote of at least
Warrants — At June 30, 2025 and December 31, 2024, there were
The Company will not be obligated to deliver any Class A ordinary shares pursuant to the exercise of a warrant and will have no obligation to settle such warrant exercise unless a registration statement under the Securities Act with respect to the Class A ordinary shares underlying the warrants is then effective and a prospectus relating thereto is current. No warrant will be exercisable and the Company will not be obligated to issue a Class A ordinary share upon exercise of a warrant unless the Class A ordinary share issuable upon such warrant exercise has been registered, qualified or deemed to be exempt under the securities laws of the state of residence of the registered holder of the warrants. In the event that the conditions in the two immediately preceding sentences are not satisfied with respect to a warrant, the holder of such warrant will not be entitled to exercise such warrant and such warrant may have no value and expire worthless. In no event will the Company be required to net cash settle any warrant. In the event that a registration statement is not effective for the exercised warrants, the purchaser of a Unit containing such warrant will have paid the full purchase price for the Unit solely for the Class A ordinary share underlying such Unit.
Under the terms of the warrant agreement, the Company has agreed that, as soon as practicable, but in no event later than business days, after the closing of its Business Combination, it will use commercially reasonable efforts to file with the SEC a post-effective amendment to the registration statement for the Initial Public Offering or a new registration statement covering the registration under the Securities Act of the Class A ordinary shares issuable upon exercise of the warrants and thereafter will use its commercially reasonable efforts to cause the same to become effective within
If the holders exercise their Public Warrants on a cashless basis, they would pay the warrant exercise price by surrendering the warrants for that number of Class A ordinary shares equal to the quotient obtained by dividing (x) the product of the number of Class A ordinary shares underlying the warrants, multiplied by the excess of the “fair market value” of the Class A ordinary shares over the exercise price of the warrants by (y) the fair market value. The “fair market value” is the average reported closing price of the Class A ordinary shares for the trading days ending on the third trading day prior to the date on which the notice of exercise is received by the warrant agent or on which the notice of redemption is sent to the holders of warrants, as applicable.
17
MELAR ACQUISITION CORP. I
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2025
(Unaudited)
Redemption of Warrants When the Price per Class A Ordinary Share Equals or Exceeds $
| ● | in whole and not in part; |
| ● | at a price of $ |
| ● | if, and only if, the closing price of the Class A ordinary shares equals or exceeds $ |
Additionally, if the number of outstanding Class A ordinary shares is increased by a share capitalization payable in Class A ordinary shares, or by a subdivision of ordinary shares or other similar event, then, on the effective date of such share capitalization, subdivision or similar event, the number of Class A ordinary shares issuable on exercise of each warrant will be increased in proportion to such increase in the outstanding ordinary shares. A rights offering made to all or substantially all holders of ordinary shares entitling holders to purchase Class A ordinary shares at a price less than the fair market value will be deemed a share capitalization of a number of Class A ordinary shares equal to the product of (i) the number of Class A ordinary shares actually sold in such rights offering (or issuable under any other equity securities sold in such rights offering that are convertible into or exercisable for Class A ordinary shares) and (ii) the quotient of (x) the price per Class A ordinary share paid in such rights offering and (y) the fair market value. For these purposes (i) if the rights offering is for securities convertible into or exercisable for Class A ordinary shares, in determining the price payable for Class A ordinary shares, there will be taken into account any consideration received for such rights, as well as any additional amount payable upon exercise or conversion, and (ii) fair market value means the volume weighted average price of Class A ordinary shares as reported during the ten () trading day period ending on the trading day prior to the first date on which the Class A ordinary shares trade on the applicable exchange or in the applicable market, regular way, without the right to receive such rights.
NOTE 8. FAIR VALUE MEASUREMENTS
The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. 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. |
18
MELAR ACQUISITION CORP. I
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2025
(Unaudited)
The following table presents information about the Company’s assets that are measured at fair value on June 30, 2025 and December 31, 2024 and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value.
|
| Level |
| June 30, 2025 | |
Assets: |
|
|
| |
|
U.S. Treasury Securities (Matured on 7/17/25) |
| 1 | | $ | |
|
| Level |
| December 31, 2024 | |
Assets: | | | | | |
Money market funds | | 1 | | $ | |
NOTE 9. SEGMENT INFORMATION
ASC Topic 280, “Segment Reporting,” establishes standards for companies to report in their financial statement 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 (“CODM”), or group, in deciding how to allocate resources and assess performance.
The Company’s CODM has been identified as the CEO, who reviews the assets, operating results, and financial metrics for the Company as a whole to make decisions about allocating resources and assessing financial performance. Accordingly, management has determined that there is only
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 unaudited condensed statements of operations as net income or loss. The measure of segment assets is reported on the unaudited condensed balance sheets as total assets. When evaluating the Company’s performance and making key decisions regarding resource allocation, the CODM reviews several key metrics included in net income or loss and total assets, which include the following:
|
| June 30, |
| December 31, | ||
|
| 2025 |
| 2024 | ||
Marketable securities and cash held in Trust Account | | $ | | | $ | |
Cash | | $ | | | $ | |
| | | | | | | | | | | For the | |
| | Three Months | | Three Months |
| Six Months | | Period from | ||||
| | Ended | | Ended | | Ended | | March 11, 2024 | ||||
| | June 30, | | June 30, | | June 30, | | (Inception) through | ||||
|
| 2025 |
| 2024 | | 2025 | | June 30, 2024 | ||||
General and administrative costs | | $ | | | $ | |
| $ | | | $ | |
Dividends and interest earned on marketable securities and cash held in Trust Account | | $ | | | $ | |
| $ | | | $ | |
The CODM reviews dividends and interest earned on marketable securities and cash held in the Trust Account to measure and monitor shareholder value and determine the most effective strategy of investment with the Trust Account funds while maintaining compliance with the Trust Agreement.
General and administrative costs are reviewed and monitored by the CODM to manage and forecast cash to ensure enough capital is available to complete a Business Combination or similar transaction within the Completion Window. The CODM also reviews general and administrative costs to manage, maintain and enforce all contractual agreements to ensure costs are aligned with all agreements and budget. General and administrative costs, as reported on the unaudited condensed statements of operations, are the significant segment expenses provided to the CODM on a regular basis.
19
MELAR ACQUISITION CORP. I
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2025
(Unaudited)
All other segment items included in net income or loss are reported on the unaudited condensed statements of operations and described within their respective disclosures.
NOTE 10. SUBSEQUENT EVENTS
The Company evaluated subsequent events and transactions that occurred after the unaudited condensed balance sheet date up to the date that the unaudited condensed financial statements were issued. Based upon this review, the Company did not identify any subsequent events that would have required adjustment or disclosure in the unaudited condensed financial statements other than as disclosed below.
On July 30, 2025, the Company entered into the Merger Agreement with Merger Sub, Everli, the Sponsor and the Escrowed Seller. Pursuant to the Merger Agreement, subject to the terms and conditions set forth therein, upon the consummation of the transactions contemplated thereby (the “Closing”), (a) the Company shall de-register from the Register of Companies in the Cayman Islands by way of continuation out of the Cayman Islands and into the State of Nevada and domesticate as a Nevada corporation (the “Domestication”) and (b) then Merger Sub will merge with and into Everli (the “Merger” and together with the Domestication and the other transactions contemplated by the Merger Agreement, the “Transactions”), with Everli continuing as the surviving entity and a wholly owned subsidiary of the Company, with Everli’s equity holders receiving shares of common stock of the Company and with certain stockholders of Everli receiving super-voting stock of the Company in exchange for their existing super-voting stock of Everli. The pre-money equity value of Everli in the Transactions is $
20
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Cautionary Note Regarding Forward-Looking Statements
All statements other than statements of historical fact included in this Quarterly Report on Form 10-Q for the quarter ended June 30, 2025 (this “Report”) including, without limitation, statements under this Item regarding our financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. When used in this Report, words such as “anticipate,” “believe,” “estimate,” “expect,” “intend” and similar expressions, as they relate to us or our management, identify forward-looking statements. Such forward-looking statements are based on the beliefs of our management, as well as assumptions made by, and information currently available to, our management. Actual results could differ materially from those contemplated by the forward-looking statements as a result of certain factors detailed in our filings with the SEC. All subsequent written or oral forward-looking statements attributable to us or persons acting on our behalf are qualified in their entirety by this paragraph.
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the unaudited condensed financial statements and the notes thereto included in this Report under Item 1. “Financial Statements.”
Overview
We are a blank check company incorporated in the Cayman Islands on March 11, 2024 formed for the purpose of effecting a Business Combination. We intend to effectuate our Business Combination using cash derived from the proceeds of the Initial Public Offering and the sale of the Private Placement Warrants, our shares, debt or a combination of cash, shares and debt.
We expect to continue to incur significant costs in the pursuit of our acquisition plans. We cannot assure you that our plans to complete a Business Combination will be successful.
We may seek to extend the Completion Window consistent with applicable laws, regulations and stock exchange rules by amending our amended and restated memorandum and articles of association. Such an amendment would require the approval of our public shareholders, who will be provided the opportunity to redeem all or a portion of their Public Shares in connection with the vote on such approval. Such redemptions will decrease the amount held in our Trust Account and our capitalization, and may affect our ability to maintain our listing on The Nasdaq Stock Market LLC (“Nasdaq”). In addition, the continued listing rules of Nasdaq, as they exist as of the date of this Report (the “Nasdaq Rules”) currently require SPACs (such as us) to complete our initial Business Combination in accordance with the requirement pursuant to the Nasdaq Rules that a SPAC must complete one or more Business Combinations within 36 months following the effectiveness of its initial public offering registration statement (the “Nasdaq 36-Month Requirement”). If we do not meet the Nasdaq 36-Month Requirement, our will likely be subject to a suspension of trading and delisting from Nasdaq. Our Sponsor may also, in its discretion, explore transactions under which it would sell its interest in our Company to another sponsor entity, which may result in a change to our management team.
Everli Note
On May 30, 2025, the Company entered into the Everli Note for a principal amount of up to $300,000. The Everli Note is interest bearing at 17.5% per annum and is secured by Everli’s assets.
The principal and accrued interest of the Everli Note shall be due and payable on the earliest of: (i) July 29, 2025 if the Term Sheet is terminated by the Company in its sole discretion; (ii) five (5) business days after any other termination of the Term Sheet in accordance with the terms thereof; (iii) five (5) business days after the termination of a definitive agreement for a Business Combination transaction involving Everli and the Company; and (iv) five (5) business days after Everli’s receipt of at least an aggregate of $5,000,000 in proceeds under a $10 million senior secured convertible loan as contemplated under the Term Sheet.
The Company complies with the requirements of the ASC 835 “Interest” and reports accrued interest on the unaudited statement of operations as interest due from Everli and reports the loan amount and unpaid interest as due from Everli on the unaudited condensed balance sheet. At June 30, 2025, the Company had loaned Everli $227,079 (via the payment of multiple invoices for Everli) and had an outstanding balance of $230,619 on the unaudited condensed balance sheet. For the three and six months ended June 30, 2025, the Company recognized $2,540 in accrued interest on the unaudited condensed statement of operations.
21
Recent Developments
Business Combination with Everli
On July 30, 2025, the Company entered into the Merger Agreement with Merger Sub, Everli, the Sponsor and the Escrowed Seller. Pursuant to the Merger Agreement, subject to the terms and conditions set forth therein, upon the Closing, (a) the Company shall de-register from the Register of Companies in the Cayman Islands by way of continuation out of the Cayman Islands and into the State of Nevada and domesticate as a Nevada corporation and (b) then Merger Sub will merge with and into Everli, with Everli continuing as the surviving entity and a wholly owned subsidiary of the Company, with Everli’s equity holders receiving shares of common stock of the Company and with certain stockholders of Everli receiving super-voting stock of the Company in exchange for their existing super-voting stock of Everli. The pre-money equity value of Everli in the Transactions is $180 million (subject to increase for certain financings consummated by Everli prior to the Closing). For more information regarding the Transactions, refer to the Company’s Current Reports on Form 8-K filed with the SEC on July 31, 2025 and August 5, 2025 and the other filings the Company and Everli may make from time to time with the SEC.
Results of Operations
We have neither engaged in any operations nor generated any revenues to date. Our only activities from March 11, 2024 (inception) through June 30, 2025 were organizational activities, those necessary to prepare for the Initial Public Offering, as described below, and identifying a target company for a Business Combination. We do not expect to generate any operating revenues until after the completion of our Business Combination. We generate non-operating income in the form of dividends and interest income on marketable securities and cash held in the Trust Account, located in the United States, with Continental Stock Transfer & Trust Company acting as trustee. We incur expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses.
For the three months ended June 30, 2025, we had net income of $1,556,238, which consists of dividends and interest earned on marketable securities and cash held in the Trust Account of $1,786,926, interest due from Everli of $2,540 and interest on cash held in the operating account of $169, partially offset by general and administrative costs of $233,288 and interest due to the Sponsor of $109.
For the six months ended June 30, 2025, we had net income of $3,136,231, which consists of dividends and interest earned on marketable securities and cash held in the Trust Account of $3,523,660, interest due from Everli of $2,540 and interest on cash held in the operating account of $376, partially offset by general and administrative costs of $390,236 and interest due to the Sponsor of $109.
For the three months ended June 30, 2024, we had a net income of $106,303, which consists of interest income on cash and marketable securities held in the Trust Account of $167,532 and an unrealized gain on over-allotment liability of $27,365, offset by operating costs of $88,594.
For the period from March 11, 2024 (inception) through June 30, 2024, we had net income of $87,168, which consists of interest income on cash and marketable securities held in the Trust Account of $167,532 and an unrealized gain on over-allotment liability of $27,365, offset by operating costs of $107,729.
Factors That May Adversely Affect Our Results of Operations
Our results of operations and our ability to complete an initial Business Combination may be adversely affected by various factors that could cause economic uncertainty and volatility in the financial markets, many of which are beyond our control. Our results of operations and our ability to consummate an initial Business Combination could be impacted by, among other things, downturns in the financial markets or in economic conditions, increases in oil prices, inflation, fluctuation in interest rates, increase in tariffs, supply chain disruptions, declines in consumer confidence and spending, public health considerations, and geopolitical instability, such as the military conflicts in Ukraine and the Middle East. We cannot at this time predict the likelihood of one or more of the above events, their duration or magnitude or the extent to which they may negatively impact our business and our ability to complete an initial Business Combination.
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Liquidity and Capital Resources
On June 20, 2024, we consummated the Initial Public Offering of 16,000,000 Units, which includes the partial exercise by the underwriters of their over-allotment option in the amount of 1,000,000 Units, at $10.00 per Unit, generating gross proceeds of $160,000,000. Simultaneously with the closing of the Initial Public Offering and pursuant to the Private Placement Warrants Purchase Agreements, we consummated the sale of 5,000,000 Private Placement Warrants at a price of $1.00 per Private Placement Warrant, in the Private Placement to the Sponsor and the representatives of the underwriters of the Initial Public Offering generating gross proceeds of $5,000,000.
Following the Initial Public Offering, the partial exercise of the over-allotment option, and the sale of the Units and the sale of the Private Placement Warrants, a total of $160,000,000 was placed in the Trust Account. We incurred $10,184,856 in Initial Public Offering related costs, consisting of $3,000,000 of cash underwriting fee, $6,600,000 of deferred underwriting fee and $584,856 of other offering costs.
For the six months ended June 30, 2025, cash used in operating activities was $322,449. Net income of $3,136,231 was affected by dividends and interest earned on marketable securities and cash held in the Trust Account of $3,523,660, interest due from Everli of $2,540 and interest due to the Sponsor of $109. Changes in operating assets and liabilities provided $67,411 of cash for operating activities.
For the six months ended June 30, 2025, the Company used $228,079 in investing activities via paying invoices on behalf of Everli and had $228,079 of cash provided by financing activities under a loan from the Sponsor.
For the period from March 11, 2024 (inception) through June 30, 2024, cash used in operating activities was $386,362. Net income of $87,168 was affected by interest earned on marketable securities held in the Trust Account of $167,532, formation costs paid by the Sponsor in exchange for issuance of Class B ordinary shares of $6,236, payment of operation costs through promissory note of $10,420, and unrealized gain on over-allotment liability of $27,365. Changes in operating assets and liabilities used $295,289 of cash for operating activities.
At June 30, 2025, substantially all of the assets held in the Trust Account were held in U.S. Treasury Bills. At December 31, 2024, primarily all of the assets held in the Trust Account were held in money market funds which were invested in U.S. Treasury securities. The Company accounts for its marketable securities as trading securities under ASC 320, “Investments—Debt and Equity Securities,” where securities are presented at fair value on the unaudited condensed balance sheets. Trading securities are presented on the unaudited condensed balance sheets at fair value at the end of each reporting period. Gains and losses resulting from the change in fair value of investments held in the Trust Account are included in dividends and interest earned on marketable securities and cash held in Trust Account in the accompanying unaudited condensed statements of operations. The estimated fair values of investments held in the Trust Account are determined using available market information. Fair values of these investments are determined by Level 1 inputs utilizing quoted prices (unadjusted) in active markets for identical assets.
At June 30, 2025, substantially all of the assets held in the Trust Account were held in U.S. Treasury Bills. At December 31, 2024, primarily all of the assets held in the Trust Account were held in money market funds which were invested in U.S. Treasury securities. We may withdraw interest from the Trust Account to pay taxes, if any. We intend to use substantially all of the funds held in the Trust Account, including any amounts representing dividends and interest earned on the Trust Account (less income taxes payable, if any), to complete our Business Combination. To the extent that our share capital or debt is used, in whole or in part, as consideration to complete our Business Combination, the remaining proceeds held in the Trust Account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies. To mitigate the risk that we might be deemed to be an investment company for purposes of the Investment Company Act, which risk increases the longer that we hold investments in the Trust Account, we may, at any time (based on the management team’s ongoing assessment of all factors related to the potential status under the Investment Company Act), instruct the trustee to liquidate the investments held in the Trust Account and instead to hold the funds in the Trust Account in cash or in an interest-bearing demand deposit account at a bank.
As of June 30, 2025 and December 31, 2024, we had cash of $555,805 and $878,254, respectively. We intend to use the funds held outside the Trust Account primarily to identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from the offices, plants or similar locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses, and structure, negotiate and complete a Business Combination.
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In order to fund working capital deficiencies or finance transaction costs in connection with a Business Combination, the Sponsor, or certain of our officers and directors or their affiliates may, but are not obligated to, loan us funds as may be required. If we complete a Business Combination, we would repay such loaned amounts. In the event that a Business Combination does not close, we may use a portion of the working capital held outside the Trust Account to repay such loaned amounts but no proceeds from our Trust Account would be used for such repayment. Up to $1,500,000 of such loans may be convertible into warrants at a price of $1.00 per warrant, at the option of the lender. The warrants would be identical to the Private Placement Warrants.
We do not believe we will need to raise additional funds in order to meet the expenditures required for operating our business. However, if our estimate of the costs of identifying a target business, undertaking in-depth due diligence and negotiating a 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 Business Combination. Moreover, we may need to obtain additional financing either to complete our Business Combination or because we become obligated to redeem a significant number of our public shares upon consummation of our Business Combination, in which case we may issue additional securities or incur debt in connection with such Business Combination.
We have until June 20, 2026, to consummate the initial Business Combination (assuming no extensions). If we do not complete a Business Combination within the Completion Window, the Company will trigger an automatic winding up, dissolution and liquidation pursuant to the terms of the amended and restated memorandum and articles of association. In connection with our assessment of going concern considerations in accordance with Accounting Standards Update 2014 - 15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” management believes that the funds which we have available following the completion of the Initial Public Offering will enable us to sustain operations for a period of at least one year from the issuance date of these unaudited condensed financial statements.
Off-Balance Sheet Arrangements
We have no obligations, assets or liabilities, which would be considered off-balance sheet arrangements as of June 30, 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
We do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities, other than an agreement to pay an aggregate of $10,000 per month for office space, utilities, and secretarial and administrative support services.
The underwriters had a 45-day option from the date of the Initial Public Offering to purchase up to an additional 2,250,000 Units to cover over-allotments, if any. On June 20, 2024, simultaneously with the closing of the Initial Public Offering, the underwriters partially exercised the over-allotment option to purchase an additional 1,000,000 Units. The underwriters had 45 days from the date of our Registration Statement on Form S-1, initially filed with the SEC on May 31, 2024, as amended, and declared effective on June 17, 2024 (File No. 333-279899) (the “IPO Registration Statement”) to purchase the remaining 1,250,000 Units. On August 4, 2024, the underwriters’ remaining over-allotment option expired worthless.
The underwriters were entitled to an underwriting discount of $0.20 per unit, or $3,000,000 in the aggregate, paid upon the closing of the Initial Public Offering. In addition, the underwriters were entitled to a deferred fee of $0.40 per Unit on Units other than those sold pursuant to the underwriters’ option to purchase additional Units, and $0.60 per Unit on Units sold pursuant to the underwriters’ over-allotment option or $6,600,000 in the aggregate. The deferred fee will become payable to the underwriters from the amounts held in the Trust Account solely on amounts remaining in the Trust Account following all properly submitted shareholder redemption in connection with the consummation of the initial Business Combination.
Critical Accounting Estimates and Policies
The preparation of the unaudited condensed financial statements and related disclosures included in this Report under Item 1. “Financial Statements” in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the unaudited condensed financial statements, and
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income and expenses during the periods reported. Actual results could materially differ from those estimates. The Company has not identified any critical accounting estimates that have a significant impact to our unaudited condensed financial statements.
Recent Accounting Pronouncements
In November 2024, the FASB issued ASU 2024-03, “Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses,” requiring public entities to disclose additional information about specific expense categories in the notes to the financial statements on an interim and annual basis. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and for interim periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2024-03.
Management does not believe that any other recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on our unaudited condensed financial statements.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise required under this Item.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Disclosure controls are procedures that are designed with the objective of ensuring that information required to be disclosed in our reports filed under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures are also designed with the objective of ensuring that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer (together, the “Certifying Officers”), or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.
Under the supervision and with the participation of our management, including our Certifying Officers, we carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on the foregoing, our Certifying Officers concluded that our disclosure controls and procedures were effective as of June 30, 2025.
We do not expect that our disclosure controls and procedures will prevent all errors and all instances of fraud. Disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Further, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and the benefits must be considered relative to their costs. Because of the inherent limitations in all disclosure controls and procedures, no evaluation of disclosure controls and procedures can provide absolute assurance that we have detected all our control deficiencies and instances of fraud, if any. The design of disclosure controls and procedures also is based partly on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.
Changes in Internal Control over Financial Reporting
Not applicable.
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings
To the knowledge of our management, there is no material litigation currently pending or contemplated against us, any of our subsidiaries, any of our officers or directors in their capacity as such or against any of our property.
Item 1A. Risk Factors
As a smaller reporting company under Rule 12b-2 of the Exchange Act, we are not required to include risk factors in this Report. For additional risks relating to our operations, the section titled “Risk Factors” contained in (i) our IPO Registration Statement, (ii) our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on March 21, 2025 and (iii) our Quarterly Report on Form 10-Q for the quarter ended March 31, 2025, filed with the SEC on May 15, 2025. Any of these factors could result in a significant or material adverse effect on our results of operations or financial condition. Additional risks could arise that may also affect our business or ability to consummate an initial Business Combination. We may disclose changes to such risk factors or disclose additional risk factors from time to time in our future filings with the SEC.
For the risks related to Everli and the Transactions, please see the registration statement on Form S-4 for the Transactions, once filed.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Unregistered Sales of Equity Securities
None.
Use of Proceeds
There have been no offerings of registered securities and therefore no planned use of proceeds from such offerings during the quarterly period covered by this Report. For a description of the use of proceeds generated in our Initial Public Offering and the Private Placement, see Part I, Item 2, Item 2 of this Report. There has been no material change in the planned use of proceeds from our Initial Public Offering and Private Placement as described in the IPO Registration Statement. The specific investments in our Trust Account may change from time to time.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
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Item 5. Other Information
Trading Arrangements
During the quarterly period ended June 30, 2025, none of our
Additional Information
Everli Note
On May 30, 2025, the Company entered into the Everli Note for a principal amount of up to $300,000. The Everli Note is interest bearing at 17.5% per annum and is secured by Everli’s assets.
The principal and accrued interest of the Everli Note shall be due and payable on the earliest of: (i) July 29, 2025 if the Term Sheet is terminated by the Company in its sole discretion; (ii) five (5) business days after any other termination of the Term Sheet in accordance with the terms thereof; (iii) five (5) business days after the termination of a definitive agreement for a Business Combination transaction involving Everli and the Company; and (iv) five (5) business days after Everli’s receipt of at least an aggregate of $5,000,000 in proceeds under a $10 million senior secured convertible loan as contemplated under the Term Sheet.
Sponsor Loan
On May 30, 2025, pursuant to the Sponsor Note, the Sponsor agreed to loan the Company an aggregate of up to $300,000 to be used for working capital purposes. The loan is interest bearing at a rate of 17.5% per annum, unsecured and due on the earliest of: (i) July 29, 2025 if the Term Sheet is terminated by the Company in its sole discretion; (ii) five (5) business days after any other termination of the Term Sheet in accordance with the terms thereof; (iii) five (5) business days after the termination of a definitive agreement for a Business Combination transaction involving Everli and the Company; and (iv) five (5) business days after Everli’s receipt of at least an aggregate of $5,000,000 in proceeds under a $10 million senior secured convertible loan as contemplated under the Term Sheet. At June 30, 2025, the Company had borrowed $228,079 and for the three and six months ended June 30, 2025, the Company had incurred $109 in interest, reported as interest expense on Sponsor Loan.
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Item 6. Exhibits
The following exhibits are filed as part of, or incorporated by reference into, this Report.
No. |
| Description of Exhibit |
10.1+* | | |
10.2* | | |
31.1* | | |
31.2* | | |
32.1** | | |
32.2** | | |
101.INS* | | Inline XBRL Instance Document |
101.SCH* | | Inline XBRL Taxonomy Extension Schema Document |
101.CAL* | | Inline XBRL Taxonomy Extension Calculation Linkbase Document |
101.DEF* | | Inline XBRL Taxonomy Extension Definition Linkbase Document |
101.LAB* | | Inline XBRL Taxonomy Extension Label Linkbase Document |
101.PRE* | | Inline XBRL Taxonomy Extension Presentation Linkbase Document |
104* | | Cover Page Interactive Data File (Embedded as Inline XBRL document and contained in Exhibit 101) |
* | Filed herewith. |
** | Furnished herewith. |
+ | Certain personally identifiable information has been omitted from this exhibit pursuant to Item 601(a)(6) of Regulation S-K. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| MELAR ACQUISITION CORP. I | |
| | |
Date: August 13, 2025 | By: | /s/ Gautam Ivatury |
| Name: | Gautam Ivatury |
| Title: | Chief Executive Officer |
| | (Principal Executive Officer) |
| | |
Date: August 13, 2025 | By: | /s/ Edward Lifshitz |
| Name: | Edward Lifshitz |
| Title: | Chief Financial Officer |
| | (Principal Financial and Accounting Officer) |
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Exhibit 10.1
Certain personally identifiable information has been omitted from this exhibit pursuant to
item 601(a)(6) of Regulation S-K. [***] indicates that information has been redacted.
SECURED PROMISSORY NOTE AND PLEDGE AGREEMENT
Principal Amount: Up to $300,000 | Issuance Date: May 30, 2025 |
FOR VALUE RECEIVED, Everli Global Inc., a Nevada corporation (“Maker”), promises to pay to the order of Melar Acquisition Corp. I, a Cayman Islands exempted company, or its registered assigns or successors in interest or order (“Payee”) the principal sum of up to Three Hundred Thousand U.S. Dollars ($300,000) (the “Aggregate Principal Amount”), with interest thereon as set forth herein in accordance with the terms and conditions of this Secured Promissory Note and Pledge Agreement (this “Note”).
1.Loans by Payee. On the date hereof, the parties acknowledge that Payee has made a loan to Maker of $150,000 (the “Initial Loan”), which is the initial principal amount of this Note, and which Initial Loan is subject to the terms and conditions of this Note. Prior to the Maturity Date, so long as there is no Event of Default (as defined below) which has occurred and is continuing, within five (5) Business Days after Payee’s receipt of the written request of Maker (an “Additional Loan Notice”), Payee shall make one or more additional loans to Maker in such amounts and to such bank accounts as requested by Maker in each such Additional Loan Notice (each, an “Additional Loan” and, collectively with the Initial Loan, the “Loans”), which Additional Loans will be subject to the terms and conditions of this Note, up to an aggregate amount of Loans made by Payee under this Agreement equal to the Aggregate Principal Amount. For the avoidance of doubt, if the principal amount of a Loan is repaid to Payee at any time, Payee shall not be required to provide any additional Loans to Maker hereunder with respect to such repaid amount. All of the proceeds of the Loans hereunder shall be used by Maker solely for the purposes of paying for the transaction expenses incurred or to be incurred by or on its behalf in connection with evaluating, negotiating, executing or consummating the transactions contemplated by the non-binding term sheet, dated as of April 16, 2025 (the “Term Sheet”), by and between Maker and Payee.
2.Interest. Interest shall accrue on the outstanding principal amount hereof at a per annum rate equal to seventeen and one-half percent (17.5%), compounded annually. The amount of interest owing from Maker to Payee hereunder shall be computed on the basis of the actual number of days elapsed in any applicable period and a 365-day year. In the event that any interest rate provided for herein shall be determined to be unlawful, such interest rate shall be computed at the highest rate permitted by applicable law. Any payment by Maker of any interest amount in excess of that permitted by applicable law shall be applied to the principal of this Note without prepayment premium or penalty.
3.Repayment and Prepayment. The principal amount hereof, together with all accrued and unpaid interest thereon and all other amounts owing from Maker to Payee hereunder shall be due and payable on the earlier of (the “Maturity Date”): (i) sixty (60) days from the date hereof if the Term Sheet is terminated by Payee in its sole discretion; (ii) five (5) Business Days after any other termination of the Term Sheet in accordance with the terms thereof; (iii) five (5) Business Days after the termination of a definitive agreement for a business combination transaction involving Maker and Payee; and (iv) five (5) Business Days after the Company’s receipt of at least an aggregate of $5,000,000 in proceeds under the Loan (as defined in the Term Sheet) as contemplated under the Term Sheet. All payments under this Note shall be made by Maker in lawful money of the United States by wire transfers of immediately available funds to a bank account as designated in writing by Payee to Maker. Whenever any payment hereunder to be made shall be due on a day that is not a Business Day (as defined below), such payment shall be due on the next succeeding Business Day. All payments received by Payee from Maker hereunder shall be applied in the following priority: first, to the payment of any expenses due to Payee
pursuant to the terms of this Note; second, to the payment of interest accrued and unpaid on this Note; and thereafter, to the payment of the principal amount hereof. Maker may prepay this Note, in whole or in part, at any time without penalty or premium. Such prepayments shall be first applied toward the interest due and other lawful charges then accrued, and then toward the principal owed on the Note.
4.Stockholder Limited Guaranty. Each of the undersigned stockholders of Maker (each, a “Pledging Stockholder”) hereby irrevocable and unconditionally guaranties to Payee and each subsequent permitted holder of this Note the prompt payment when and as due and payable of any and all of Maker’s obligations under this Note or of any note or other instrument or instruments renewing this Note, including any reasonable costs and expenses incurred in collecting such obligations and successfully prosecuting any action against such Pledging Stockholder in connection with enforcing this Note (the “Guaranteed Obligations”). Notwithstanding the foregoing, the guaranty provided hereunder (the “Guaranty”) is a limited guaranty, and Payee’s sole recourse against each Pledging Stockholder with respect to the Guaranty for the Guaranteed Obligations provided hereunder shall be to exercise its rights with respect to the Pledged Shares (as defined below) in accordance with the terms of this Note, and such Pledging Stockholder shall have no personal obligations or liability with respect to this Guaranty other than its obligations with respect to the Pledged Shares in accordance with the terms of this Note. This is a continuing Guaranty of the Guaranteed Obligations and shall remain in full force and effect until the payment in full of the Guaranteed Obligations. Each Pledging Stockholder understands and agrees that this Guaranty shall be binding upon such Pledging Stockholder and its successors and permitted assigns, shall be construed as an absolute, irrevocable and continuing guaranty of payment (and not solely of collection) and shall be enforceable by Payee, subject to the terms set forth herein, notwithstanding any circumstances which might otherwise constitute a legal or equitable discharge of a surety or guarantor. This Guaranty shall not be affected by the insolvency, bankruptcy or reorganization of Maker, and shall continue to be effective or be reinstated, as the case may be, if at any time payment, or any part thereof, of any or all of the Guaranteed Obligations are rescinded or must otherwise be restored or returned by Payee upon the insolvency, bankruptcy or reorganization of Maker. Such Pledging Stockholder hereby waives and agrees not to assert any claim, defense, setoff or counterclaim based on diligence, promptness, presentment, requirements for any demand or notice hereunder, including (a) any demand for payment or performance and protest and notice of protest, (b) any notice of acceptance, (c) any presentment, demand, protest or further notice or other requirements of any kind with respect to any Guaranteed Obligation becoming immediately payable and (d) any other notice in respect of any Guaranteed Obligation or any part thereof, and any defense arising by reason of any disability or other defense of Maker. Until the payment and satisfaction in full of any Guaranteed Obligations that are then due and owing, each Pledging Stockholder agrees not to (x) enforce or otherwise exercise any right of subrogation or any right of reimbursement or contribution or similar right against Maker by reason of any payment made hereunder or (y) assert any claim, defense, setoff or counterclaim it may have against Maker or set off any of its obligations to Maker against obligations of Maker to it. Such Pledging Stockholder hereby waives any defense based upon or arising by reason of any modification of the Guaranteed Obligations resulting from an amendment to this Note in accordance with the terms hereof.
5.Security Interest and Collateral.
(a)To secure the prompt and complete payment and performance when due (whether at stated maturity, by acceleration or otherwise) of all of the obligations and liabilities of Maker to Payee under this Note, together with all costs of enforcement in connection herewith and therewith (collectively, the “Obligations”), Maker to the fullest extent permitted by applicable law hereby grants to Payee a continuing security interest in, and lien upon, all of Maker’s and its subsidiaries’ respective property and assets, whether real or personal, tangible or intangible, and whether now owned or hereafter acquired, or in which it now has or at any time in the future may acquire any right, title or interest, including all of the following property in which it now has or at any time in the future may acquire any
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right, title or interest: all accounts, accounts receivable, deposit accounts, inventory, equipment, goods, documents, instruments (including promissory notes), contract rights, general intangibles (including payment intangibles), chattel paper, supporting obligations, investment property, letter-of-credit rights, commercial tort claims, Maker’s and its subsidiaries’ right, title and interest in and to all shares of capital stock, securities and equity interests in the subsidiaries of Maker, permits, licenses, intellectual property, trademarks, trade styles, patents and copyrights in which Maker or its subsidiaries now has or hereafter may acquire, title and interest, all books, records, computer programs, tapes, disks and related data processing software, all proceeds and products thereof (including proceeds of insurance) and all additions, accessions and substitutions thereto or therefor (the foregoing, collectively, the “Maker Collateral”). The security interest granted hereby shall be senior in right with all other security interests that have been granted by Maker prior to the date hereof, excluding (i) liens of carriers, warehousemen, mechanics, materialmen, vendors, and landlords incurred in the ordinary course of business for sums not for a period of more than 30 days, (ii) non-exclusive licenses and sublicenses granted by Maker and its subsidiaries and leases or subleases (by Maker or any of its Subsidiaries as lessor or sublessor) to third parties in the ordinary course of business not interfering in any material respect with the business of Maker and its Subsidiaries; (iii) liens upon or in any equipment which was acquired or held by Maker or any of its Subsidiaries to secure the purchase price of such equipment (and any accessions, attachments, replacements or improvements thereon) or indebtedness incurred solely for the purpose of financing the acquisition of such equipment (and any accessions, attachments, replacements or improvements thereon); (iv) liens existing on any equipment (and any accessions, attachments, replacements or improvements thereon) at the time of its acquisition, provided that the lien is confined solely to the property so acquired and any accessions, attachments, replacements or improvements thereon, and the proceeds of such equipment (and any accessions, attachments, replacements or improvements thereon); and (v) bankers’ liens, rights of setoff and similar liens incurred on deposits or securities accounts made in the ordinary course of business.
(b)As security and collateral for the Guaranty of the Guaranteed Obligations, each Pledging Stockholder pledges, hypothecates and grants to Payee a continuing, first priority security interest in and lien upon, and assigns to Payee all right, title and interest in and to (collectively, the “Pledged Shares” and, together with the Maker Collateral, the “Collateral”): (i) all of its shares of capital stock or other equity interests of Maker (or its successors), (ii) any certificates representing such shares of capital stock or other equity interests, (iii) any interest of such Pledging Stockholder in the entries on the books of any financial intermediary pertaining to the Pledged Shares, and all distributions, return of capital, redemptions, dividends, cash, warrants, rights, instruments and other property or proceeds from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of the Pledged Shares; (iv) all additional interest in, and all securities convertible into and warrants, options and other rights to purchase or otherwise acquire an interest in any issues of the shares of capital stock or other equity interests of Maker (or its successors) from time to time acquired by such Pledging Stockholder in any manner (which interest shall be deemed to be part of the Pledged Shares), the certificates or other instruments representing such additional interest, if any, securities, warrants, options or other rights and any interest of such Pledging Stockholder in the entries on the books of any financial intermediary pertaining to such additional interest, and all dividends, cash, warrants, rights, instruments and other property or proceeds from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of such additional interest, securities, warrants, options or other rights; and (v) to the extent not covered by clauses (i) through (iv) above, all proceeds of any or all of the foregoing collateral. For purposes of this Note, the term “proceeds” includes whatever is receivable or received when the collateral or proceeds are sold, exchanged, collected or otherwise disposed of, whether such disposition is voluntary or involuntary, and includes proceeds of any indemnity or guaranty payable to a Pledging Stockholder, Maker or Payee from time to time with respect to any of the collateral. Upon the occurrence of an Event of Default and during the continuance thereof, each Pledging Stockholder agrees to deliver to the Payee such other documents of transfer and to take such other actions as Payee
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may reasonably request to enable the Payee to transfer the Pledged Shares into its name. Each Pledging Stockholder agrees that so long as any Guaranteed Obligations remain outstanding, such Pledging Stockholder will, unless Payee shall otherwise consent in writing, (i) at its expense, defend Payee’s security interest in and to the Pledged Shares against the claims of any Person (as defined below); (ii) at its expense, at any time and from time to time, promptly execute and deliver all further instruments and documents and take all further action that may be reasonably necessary in order to (A) perfect and protect the security interest created or purported to be created hereby, (B) enable Payee to exercise and enforce its rights and remedies hereunder in respect of the Pledged Shares or (C) otherwise effect the purposes of this Note; (iii) not sell, assign, exchange or otherwise dispose of any of the Pledged Shares or any interest therein or create or suffer to exist any lien, security interest or other charge or encumbrance upon or with respect to any Pledged Shares except for the pledge hereunder and the security interest created hereby; and (iv) not make or consent to any amendment or other modification or waiver with respect to any Pledged Shares or enter into any agreement or permit to exist any restriction with respect to any Pledged Shares. During the term of this Note and for so long as the Pledged Shares are owned by a Pledging Stockholder and no Event of Default shall have occurred and be continuing, such Pledging Stockholder shall have the right to vote all securities constituting part of the Pledged Shares, and to exercise any other voting rights pertaining to such Pledged Shares, and to give consents, ratifications and waivers with respect thereto, and to exercise all of such Pledging Stockholder’s rights as an equity holder thereof for all purposes. Unless an Event of Default shall have occurred and be continuing, all distributions payable in respect of the Pledged Shares shall be paid to the Pledging Stockholders.
(c)Maker and the Pledging Stockholders authorize Payee to file such financing statements and amendments thereto, in all applicable jurisdictions, necessary to establish and maintain a valid, enforceable, perfected security interest in the Collateral as provided herein and the other rights and security contemplated hereby all in accordance with the Uniform Commercial Code of the State of Nevada as in effect from time to time (the “Code”), as well as any applicable laws of the jurisdictions in which any subsidiaries of Maker are organized or have assets. Each of Maker and the Pledging Stockholders hereby authorizes Payee, and hereby grants a power-of-attorney to Payee (which is irrevocable and is coupled with an interest), to execute in the name and on behalf of Maker or such Pledging Stockholder any and all financing statements, instruments, agreements or documents that Payee deems necessary or appropriate in order to perfect Payee’s security interest in the Collateral. Simultaneously with the execution and delivery of this Note, each Pledging Stockholder shall deliver to Payee its original certificate for the Pledged Shares, along with a share transfer form in blank duly executed by such Pledging Stockholder and in form and substance reasonably acceptable to Payee, to be held by Payee or its designee so long as any obligations are due and owing under this Note.
(d)At any time and from time to time, Maker shall take such steps as Payee may reasonably request for Maker (i) to obtain an acknowledgment, in form and substance reasonably satisfactory to Payee, of any bailee having possession of any of the Collateral, that such bailee holds such Collateral for Payee, (ii) to obtain control of any investment property, deposit accounts, letter-of-credit rights or electronic chattel paper (as such terms are defined in Article 9 of the Code) as set forth in Article 9 of the Code, and, where control is established by written agreement, such agreement shall be in form and substance reasonably satisfactory to Payee, and (iii) otherwise to insure the continued perfection of Payee’s security interest in any of the Collateral and of the preservation of its rights therein.
6.Representations and Warranties of Maker and Pledging Stockholders.
(a)Maker represents, warrants and agrees that it is the owner of the Collateral free and clear of any security interests, liens or encumbrances, except (i) the liens securing Maker’s Obligations under this Note, and/or (ii) liens for Taxes not yet due and payable or being contested in good faith by appropriate procedures, liens incurred or deposits made in the ordinary course of business in
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connection with workers’ compensation, unemployment insurance, social security and other like laws, landlord’s, warehousemen’s, carriers’, workmen’s, repairmen’s or other like liens.
(b) Each Pledging Stockholder hereby represents, warrants and covenants to Payee that (i) such Pledging Stockholder has good and marketable title to the Pledged Shares, free and clear of any and all liens, claims, security interests and encumbrances other than in favor of Payee pursuant to this Note and (ii) the security interest granted to Secured Party hereunder is and at all times shall be and remain a first priority lien and security interest in the Pledged Shares and such Pledging Stockholder has not granted any other lien or security interest to any other Person in or to, or otherwise encumbered the Pledged Shares.
7.Event of Default. This Note shall become immediately due and payable upon the occurrence and during the continuance of an Event of Default, whereupon (a) the obligations hereunder shall become and be immediately due and payable, without presentment, demand, protest or further notice of any kind, all of which are hereby expressly waived by Maker and the Pledging Stockholders, and (b) Payee may proceed to enforce all other rights and remedies available to Payee, whether under this Note, applicable law or otherwise, including the taking possession of any or all of the Collateral wherever it may be found and exercising any rights and remedies that may be available to Payee in respect of the Collateral. For purposes of this Note, an “Event of Default” shall mean the occurrence of any one or more of the following events: (i) the failure by Maker to make any payment of principal, interest or any other amount payable hereunder when due under this Note; (ii) the breach of any representation, warranty, agreement, covenant or other obligation of or made by Maker or a Pledging Stockholder under this Note which is not cured within five (5) Business Days after receipt by Maker of written notice from Payee; (iii) the filing of a petition by or against Maker or any subsidiary thereof under any provision of applicable bankruptcy or similar law which is not dismissed within thirty (30) days after filing; or appointment of a receiver, trustee, custodian or liquidator of or for all or any part of the assets or property of Maker or any subsidiary thereof which is not vacated within thirty (30) days after appointment; or the insolvency (i.e., the inability of Maker to pay its obligations when due) of Maker or any subsidiary thereof; or the making of a general assignment for the benefit of creditors by Maker or any subsidiary thereof; (iv) the winding up, liquidation or dissolution of Maker; (v) the occurrence of (A) the initial public offering of any of Maker’s or its subsidiaries’ equity securities, (B) the sale or transfer (including a transfer occurring as a result of an exchange offer, gift, sale or merger or consolidation) in one or more related transactions of more than fifty percent (50%) of Maker’s issued and outstanding voting securities or (C) the sale or transfer of all or a majority of the assets of Maker and its subsidiaries, taken as a whole, to any Person or group (other than a Person owned by the existing equity holders of Maker), or (vi) (A) a default occurs (after notice and opportunity to cure as permitted by such debt instrument) in the due observance or performance of any covenant, condition or agreement on the part of Maker or any of its subsidiaries under any other Indebtedness (as defined below) and (B) such default permits the holder thereof to accelerate such Indebtedness. Time is of the essence in the performance of the obligations imposed by this Note. Maker shall notify Payee in writing promptly (but in any event within two (2) Business Days) after the occurrence of an Event of Default.
8.Covenants of Maker. Maker hereby agrees that, so long as all or any portion of the Obligations remain outstanding and unpaid, (a) Maker and/or its subsidiaries will not: (i) declare or pay any dividends or distributions to or for the benefit of the holders of Maker’s equity interests; (ii) redeem or otherwise acquire outstanding shares of Maker’s equity interests (or any rights to acquire such equity securities or any other securities convertible into Maker’s equity securities) or (iii) incur, create, issue, assume, guarantee or otherwise become directly or indirectly liable for, contingently or otherwise, or permit any liability of Maker or its subsidiaries to exist with respect to, any Indebtedness which is not subordinated to the obligations owed to Payee under this Note; and (b) Maker will, and will cause its subsidiaries to, permit Payee and its Representatives (as defined in the Term Sheet), with reasonable prior
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notice, to (i) visit and inspect the properties and assets of Maker and its subsidiaries, (ii) examine its books of account and records and (iii) discuss the affairs, finances and accounts of the Maker and its subsidiaries with their respective officers and employees at least twice per calendar year during normal business hours of the Maker or its subsidiaries, as applicable, as may be reasonably requested by, and at the sole cost and expense of, Payee (unless an Event of Default has occurred and is continuing, in which case, any reasonable out-of-pocket costs and expenses incurred by or on behalf of Payee will be borne by Maker and added to Maker’s obligations under this Note); provided, that Payee and its Representatives shall not unreasonably disturb the business of Maker and its subsidiaries.
9.Amendment; Waiver. This Note may not be modified, amended, waived, extended, changed, discharged or terminated orally or by any act or failure to act on the part of a party hereto but only by an agreement in writing signed by the party against whom enforcement of any modification, amendment, waiver, extension, change, discharge or termination is sought. No failure or delay by Payee in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege.
10.Binding Effect; Assignment; Third Party Beneficiaries. This Note and the rights and obligations hereunder may not be assigned or delegated, in whole or in part, by Maker or the Pledging Stockholders except with the prior written consent of Payee. Subject to the foregoing, this Note shall inure to the benefit of and be binding upon the successors and permitted assigns of Maker, the Pledging Stockholders and Payee. This Note is for the sole benefit of the parties and their successors and permitted assigns.
11.Costs. Maker and the Pledging Stockholders (pursuant to the Guaranteed Obligations) hereby agree to pay all reasonable costs of collection and any other enforcement of this Note, including reasonable attorneys’ fees and reasonable expenses and court costs.
12.Governing Law; Consent to Jurisdiction; Waiver of Jury Trial. This Note shall be governed by and interpreted and enforced in accordance with the laws of the State of New York, without regard to the conflicts of laws rules thereof. Any legal suit, action or proceeding arising out of or relating to this Note shall be instituted exclusively in the state or federal courts sitting in or otherwise serving New York County, New York (or in any appellate courts thereof) (the “Specified Courts”). Notwithstanding the foregoing, Payee shall have the right to bring any action or proceeding against Maker, the Pledging Stockholders or the Collateral in the courts of any other jurisdiction which Payee deems necessary or appropriate to realize on the Collateral or to otherwise enforce Payee’s rights against Maker, the Pledging Stockholders or the Collateral. Maker and each Pledging Stockholder (i) expressly submits and consents in advance to such jurisdiction in any action or suit commenced in the Specified Courts and in any such other court, (ii) hereby waives any objection that it may have based upon lack of personal jurisdiction, improper venue, or forum non conveniens and hereby consents to the granting of such legal or equitable relief as is deemed appropriate by such court, (iii) hereby waives personal service of the summons, complaints, and other process issued in such action or suit and agrees that service of such summons, complaints, and other process may be made by registered or certified mail addressed to such party in accordance with the requirements of Section 16 below. Each party hereto hereby irrevocably waives any and all right to trial by jury in any legal proceeding arising out of or related to this note or any obligations hereunder.
13.Entire Agreement. This Note constitutes the entire agreement between the parties with respect to the subject matter hereof and referenced herein, and supersedes and terminates any prior agreements between the parties or their respective affiliates (written or oral) with respect to the subject matter hereof (excluding the Term Sheet.
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14.Remedies. The parties agree that if any of the provisions of this Note were not performed in accordance with their specific terms or were otherwise breached, irreparable damage would occur, no adequate remedy at law would exist and damages would be difficult to determine, and that the parties shall be entitled to specific performance of the terms hereof, in addition to any other remedy at law or in equity, without the proof of irreparable damages or the posting of a bond or any other security, all of which are hereby expressly waived. Each right, power and remedy of Payee provided for in this Note or now or hereafter existing at law or in equity or by statute or otherwise shall be cumulative and concurrent and shall be in addition to every other such right, power or remedy.
15.Severability; Usury Laws. If any provision of this Note or the application of any such provision to any Person or circumstance shall be held invalid, illegal or unenforceable in any respect by a court of competent jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision hereof. Any invalid, illegal or unenforceable term will be deemed to be void and of no force and effect only to the minimum extent necessary to bring such term within the provisions of applicable law and such term, as so modified, and the balance of this Note will then be fully enforceable. The parties will substitute for any invalid, illegal or unenforceable provision a suitable and equitable provision that carries out, so far as may be valid, legal and enforceable, the intent and purpose of such invalid, illegal or unenforceable provision. This Note is subject to the express condition that at no time shall Maker be obligated or required to pay interest on the principal balance at a rate which could subject Maker or Payee to either civil or criminal liability as a result of being in excess of the maximum rate which Maker is permitted by law to contract or agree to pay. If by the terms of this Note, Maker is at any time required or obligated to pay interest on the principal balance at a rate in excess of such maximum rate, the rate of interest under this Note shall be deemed to be immediately reduced to such maximum rate and interest payable hereunder shall be computed at such maximum rate.
16.Notices. All notices, consents, requests, approvals, demands, or other communication by any party to this Note must be in writing and shall be deemed to have been validly served, given, or delivered: (i) upon the earlier of actual receipt and two (2) Business Days after deposit in the U.S. mail, first class, registered or certified mail return receipt requested, with proper postage prepaid; (ii) upon transmission, when sent by electronic mail (with affirmative confirmation of receipt); (iii) one (1) Business Day after deposit with a reputable overnight courier with all charges prepaid; or (iv) when delivered, if hand-delivered by messenger, all of which shall be addressed to the party to be notified and sent to the address or email address indicated below such party’s signature on the signature page to this Note. Maker, Payee and any Pledging Stockholder may change its mailing or electronic mail address by giving the other party written notice thereof in accordance with the terms of this Section 16.
17.Interpretation. When a reference is made in this Note to a Section, such reference shall be to a Section of or to this Note unless otherwise indicated. Whenever the words “include,” “includes” or “including” are used in this Note, they shall be deemed to be followed by the words “without limitation.” When a reference in this Note is made to a “party” or “parties,” such reference shall be to Maker, Pledging Stockholders and/or Payee, as applicable, unless otherwise indicated. Unless the context requires otherwise, the terms “hereof,” “herein,” “hereby,” “hereto” and derivative or similar words in this Note refer to this entire Note. Unless the context requires otherwise, words in this Note using the singular or plural number also include the plural or singular number, respectively, and the use of any gender herein shall be deemed to include the other genders. References in this Note to “dollars”, “Dollars” or “$” are to U.S. dollars. This Note was prepared jointly by the parties and no rule that it be construed against the drafter will have any application in its construction or interpretation. As used herein: (i) reference to any statute includes the rules and regulations promulgated thereunder; and (ii) any agreement, instrument or law defined or referred to herein or in any agreement or instrument that is referred to herein means such agreement, instrument or law as from time to time amended, modified or supplemented, including in the case of agreements or instruments by waiver or consent and in the case of
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laws by succession of comparable successor laws, and references to all attachments thereto and instruments incorporated therein.
18.Trust Account Waiver. Maker hereby acknowledges and agrees that the provisions set forth in the “Trust Account Waiver” section of the Term Sheet shall also apply to this Note. Each Pledging Stockholder hereby acknowledges that it has reviewed a copy of the Term Sheet and hereby agrees to be subject to the provisions of the “Trust Account Waiver” section of the Term Sheet applicable to Maker as if such provisions were incorporated into this Agreement (with any reference to the “Term Sheet” therein instead referring to this Note).
19.Certain Definitions.
“Business Day” means any day other than (i) a Saturday or a Sunday, or (ii) a day on which commercial banking institutions are authorized or required by applicable law to close in New York, New York.
“Indebtedness” of Maker or its subsidiaries shall mean, at any time, without duplication, all obligations of Maker or its subsidiaries: (i) for borrowed money or with respect to deposits or advances of any kind, other than deposits or advances received by Maker or its subsidiaries for services to be rendered or goods to be sold in the ordinary course of business, (ii) evidenced by bonds, debentures, notes or other similar instruments, (iii) for the deferred purchase price of property or services, except accounts payable arising in the ordinary course of business, (iv) under conditional sale or other title retention agreements relating to property purchased by Maker or its subsidiaries, as the case may be, except those incurred in the ordinary course of business, (v) with respect to interest rate or currency protection agreements, (vi) for the face amount of all letters of credit issued for the account and all drafts drawn thereunder; (vii) as an account party in respect of bankers’ acceptances, (viii) relating to the obligations of any other Persons that are secured by property or assets of Maker or its subsidiaries; or (ix) relating to any guarantee issued by Maker or its subsidiaries.
“Person” means an individual, a corporation, a company, a juridical entity, a voluntary association, a general partnership, a limited partnership, a limited liability company, a limited liability partnership, a joint venture, a trust, an estate, an unincorporated organization, a statutory body or a government or state or any agency, instrumentality, authority or political subdivision thereof.
20.Counterparts; Facsimile Signatures. This Note may be executed in multiple counterparts, including by facsimile, pdf or other electronic document transmission, each of which shall be deemed an original and all of which together shall constitute one and the same instrument.
{Remainder of Page Intentionally Left Blank; Signature Pages Follow}
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IN WITNESS WHEREOF, the undersigned Maker, Payee and Pledging Stockholders hereby acknowledge and agree to the terms set forth in the foregoing Secured Promissory Note and Pledge Agreement as of the date first set forth above.
| Maker: | ||
| | ||
| Everli Global Inc. | ||
| | ||
| By: | /s/ Salvatore Palella | |
| | Name: Salvatore Palella | |
| | Title: Chief Executive Officer | |
| | | |
| Address for Notices: | ||
| | ||
| Everli Global Inc. | ||
| 12 East 49th Street, Suite 1506 | ||
| New York, NY 10017 | ||
| Attn: | Salvatore Palella | |
| Email: | [***] | |
| | ||
| with a copy (which will not constitute notice) to: | ||
| | ||
| Ortoli Rosenstadt LLP | ||
| 366 Madison Avenue | ||
| New York, NY 10017 | ||
| Attn: William Rosenstadt, Esq. | ||
| Telephone No.: (212) 588-0022 | ||
| Email: | wsr@orllp.legal | |
{Signature Page to Note}
| Payee: | ||
| | ||
| Melar Acquisition Corp. I | ||
| | ||
| By: | /s/ Eric Lifshitz | |
| | Name: Eric Lifshitz | |
| | Title: Chief Operating Officer | |
| | | |
| Address for Notices: | ||
| | ||
| Melar Acquisition Corp. I | ||
| 143 West 72nd Street, 4th Floor | ||
| New York, New York 10023 | ||
| Attn: Gautam Ivatury, Chief Executive Officer | ||
| Telephone No.: (702) 781-1120 | ||
| Email: | [***] | |
| | ||
| with a copy (which will not constitute notice) to: | ||
| | ||
| Ellenoff Grossman & Schole LLP | ||
| 1345 Avenue of the Americas, 11th Floor | ||
| New York, New York 10105 | ||
| Attn: Matthew A. Gray, Esq.; Stuart Neuhauser, Esq. | ||
| Telephone No.: (212) 370-1300 | ||
| Email: | mgray@egsllp.com; sneuhauser@egsllp.com | |
{Signature Page to Note}
| Pledging Stockholders: | ||
| | ||
| Pledging Stockholders who are natural persons: | ||
| (i.e., individuals) | ||
| | ||
| By: | /s/ Salvatore Palella | |
| Print Name: Salvatore Palella | ||
| | ||
| Pledging Stockholders who are not natural persons: | ||
| (i.e., corporations, limited liability companies, partnerships, trusts or other entities) | ||
| | ||
| Print Name of Entity: Palella Holdings, LLC | ||
| | ||
| By: | /s/ Salvatore Palella | |
| Print Name: Salvatore Palella | ||
| Print Title: CEO | ||
| | ||
| Address for Notice: | ||
| | ||
| c/o Everli Global Inc. | ||
| 12 East 49th Street, Suite 1506 | ||
| New York, NY 10017 | ||
| Attn: Salvatore Pallea | ||
| Email: | [***] | |
{Signature Page to Note}
Exhibit 10.2
THIS PROMISSORY NOTE (“NOTE”) HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”). THIS NOTE HAS BEEN ACQUIRED FOR INVESTMENT ONLY AND MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF REGISTRATION OF THE RESALE THEREOF UNDER THE SECURITIES ACT OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY IN FORM, SCOPE AND SUBSTANCE TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.
PROMISSORY NOTE
Principal Amount: Up to $300,000 | Dated as of May 30, 2025 New York, New York |
Melar Acquisition Corp. I, a Delaware corporation and blank check company (“Maker”), promises to pay to the order of Melar Acquisition Sponsor I LLC or its registered assigns or successors in interest (“Payee”), or order, the principal sum of up to Three Hundred Thousand Dollars ($300,000) in lawful money of the United States of America, on the terms and conditions described below. All payments on this Note shall be made by check or wire transfer of immediately available funds or as otherwise determined by Maker to such account as Payee may from time to time designate by written notice in accordance with the provisions of this Note. Reference is made to that certain secured promissory note and pledge agreement, dated May 30, 2025, issued by Everli Global Inc., a Nevada corporation (“Everli”), to Maker (the “Everli Note”).
1.Principal. The principal balance of this Note shall be payable by Maker upon the maturity of the Everli Note. The principal balance may be prepaid at any time. Under no circumstances shall any individual, including but not limited to any officer, director, employee or shareholder of Maker, be obligated personally for any obligations or liabilities of Maker hereunder.
2.Interest. Interest shall accrue on the outstanding principal amount hereof at a per annum rate equal to seventeen and one-half percent (17.5%), compounded annually. The amount of interest owing from Maker to Payee hereunder shall be computed on the basis of the actual number of days elapsed in any applicable period and a 365-day year. In the event that any interest rate provided for herein shall be determined to be unlawful, such interest rate shall be computed at the highest rate permitted by applicable law. Any payment by Maker of any interest amount in excess of that permitted by applicable law shall be applied to the principal of this Note without prepayment premium or penalty.
3.Drawdown Requests. Maker and Payee agree that Maker may request up to Three Hundred Thousand Dollars ($300,000) for costs reasonably related to Maker’s funding of its loan to Everli, pursuant to the Everli Note. The principal of this Note may be drawn down from time to time upon written request from Maker to Payee (each, a “Drawdown Request”). Each Drawdown Request must state the amount to be drawn down, and must not be an amount less than Ten Thousand Dollars ($10,000) unless agreed upon by Maker and Payee. Payee shall fund each Drawdown Request no later than five (5) business days after receipt of a Drawdown Request; provided, however, that the maximum amount of drawdowns collectively under this Note is Three Hundred Thousand Dollars ($300,000). Once an amount is drawn down under this Note, it shall not be available for future Drawdown Requests even if prepaid. No fees, payments or other amounts shall be due to Payee in connection with, or as a result of, any Drawdown Request by Maker. Notwithstanding the foregoing, all payments shall be applied first to payment in full of any costs incurred in the collection of any sum due under this Note, including (without limitation) reasonable attorneys’ fees, and then to the reduction of the unpaid principal balance of this Note.
4.Application of Payments. All payments shall be applied first to payment in full of any costs incurred in the collection of any sum due under this Note, including (without limitation) reasonable attorney’s fees, then to the payment in full of any late charges and finally to the reduction of the unpaid principal balance of this Note.
5.Events of Default. The following shall constitute an event of default (“Event of Default”):
(a)Failure to Make Required Payments. Failure by Maker to pay the principal amount due pursuant to this Note within five (5) business days of the date specified above.
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(b)Voluntary Bankruptcy, Etc. The commencement by Maker of a voluntary case under any applicable bankruptcy, insolvency, reorganization, rehabilitation or other similar law, or the consent by it to the appointment of or taking possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator (or other similar official) of Maker or for any substantial part of its property, or the making by it of any assignment for the benefit of creditors, or the failure of Maker generally to pay its debts as such debts become due, or the taking of corporate action by Maker in furtherance of any of the foregoing.
(c)Involuntary Bankruptcy, Etc. The entry of a decree or order for relief by a court having jurisdiction in the premises in respect of Maker in an involuntary case under any applicable bankruptcy, insolvency or other similar law, or appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator (or similar official) of Maker or for any substantial part of its property, or ordering the winding-up or liquidation of its affairs, and the continuance of any such decree or order unstayed and in effect for a period of 60 consecutive days.
(d)Event of Default of the Everli Note. The occurrence of one or more of the event of default as specified in the Everli Note.
6.Remedies.
(a)Upon the occurrence of an Event of Default specified in Section 5(a) hereof, Payee may, by written notice to Maker, declare this Note to be due immediately and payable, whereupon the unpaid principal amount of this Note, and all other amounts payable hereunder, shall become immediately due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived, anything contained herein or in the documents evidencing the same to the contrary notwithstanding.
(b)Upon the occurrence of an Event of Default specified in Sections 5(b), 5(c) and 5(d), the unpaid principal balance of this Note, and all other sums payable with regard to this Note, shall automatically and immediately become due and payable, in all cases without any action on the part of Payee.
7.Waivers. Maker and all endorsers and guarantors of, and sureties for, this Note waive presentment for payment, demand, notice of dishonor, protest, and notice of protest with regard to the Note, all errors, defects and imperfections in any proceedings instituted by Payee under the terms of this Note, and all benefits that might accrue to Maker by virtue of any present or future laws exempting any property, real or personal, or any part of the proceeds arising from any sale of any such property, from attachment, levy or sale under execution, or providing for any stay of execution, exemption from civil process, or extension of time for payment; and Maker agrees that any real estate that may be levied upon pursuant to a judgment obtained by virtue hereof or any writ of execution issued hereon, may be sold upon any such writ in whole or in part in any order desired by Payee.
8.Unconditional Liability. Maker hereby waives all notices in connection with the delivery, acceptance, performance, default, or enforcement of the payment of this Note, and agrees that its liability shall be unconditional, without regard to the liability of any other party, and shall not be affected in any manner by any indulgence, extension of time, renewal, waiver or modification granted or consented to by Payee, and consents to any and all extensions of time, renewals, waivers, or modifications that may be granted by Payee with respect to the payment or other provisions of this Note, and agrees that additional makers, endorsers, guarantors, or sureties may become parties hereto without notice to Maker or affecting Maker’s liability hereunder.
9.Notices. All notices, statements or other documents which are required or contemplated by this Note shall be made in writing and delivered: (i) personally or sent by first class registered or certified mail, overnight courier service or facsimile or electronic transmission to the address designated in writing, (ii) by facsimile to the number most recently provided to such party or such other address or fax number as may be designated in writing by such party or (iii) by electronic mail, to the electronic mail address most recently provided to such party or such other electronic mail address as may be designated in writing by such party. Any notice or other communication so transmitted shall be deemed to have been given on the day of delivery, if delivered personally, on the business day following receipt of written confirmation, if sent by facsimile or electronic transmission, one (1) business day after delivery to an overnight courier service or five (5) days after mailing if sent by mail.
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10.Construction. THIS NOTE SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF DELAWARE, WITHOUT REGARD TO CONFLICT OF LAW PROVISIONS THEREOF.
11.Severability. Any provision contained in this Note which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
12.Trust Waiver. Notwithstanding anything herein to the contrary, Payee hereby waives any and all right, title, interest or claim of any kind (“Claim”) in or to any distribution of or from the trust account in which the proceeds of the initial public offering (the “IPO”) of Maker (including the deferred underwriters discounts and commissions) and the proceeds of the sale of the securities issued in a private placement that occurred simultaneously with the closing of the IPO were deposited, as described in greater detail in the registration statement and prospectus filed by Maker with the Securities and Exchange Commission in connection with the IPO, and hereby agrees not to seek recourse, reimbursement, payment or satisfaction for any Claim against the trust account for any reason whatsoever.
13.Amendment; Waiver. Any amendment hereto or waiver of any provision hereof may be made with, and only with, the written consent of Maker and Payee.
14.Assignment. No assignment or transfer of this Note or any rights or obligations hereunder may be made by any party hereto (by operation of law or otherwise) without the prior written consent of the other party hereto and any attempted assignment without the required consent shall be void.
[Signature page follows]
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IN WITNESS WHEREOF, Maker, intending to be legally bound hereby, has caused this Note to be duly executed by the undersigned as of the day and year first above written.
| MELAR ACQUISITION CORP. I | |
| | |
| By: | /s/ Gautam Ivatury |
| Name: Gautam Ivatury | |
| Title: Chief Executive Officer | |
[Signature Page to Promissory Note]
EXHIBIT 31.1
CERTIFICATION OF THE PRINCIPAL EXECUTIVE OFFICER
PURSUANT TO RULE 13a-14(a) AND RULE 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Gautam Ivatury, certify that:
1. | I have reviewed this Quarterly Report on Form 10-Q of Melar Acquisition Corp. I; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | (Paragraph intentionally omitted pursuant to Exchange Act Rules 13a-14(1) and 15d-15(a)); |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: August 13, 2025 | | |
| | |
| By: | /s/ Gautam Ivatury |
| | Gautam Ivatury |
| | Chief Executive Officer |
| | (Principal Executive Officer) |
EXHIBIT 31.2
CERTIFICATION OF THE PRINCIPAL FINANCIAL OFFICER
PURSUANT TO RULE 13a-14(a) AND RULE 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Edward Lifshitz, certify that:
1. | I have reviewed this Quarterly Report on Form 10-Q of Melar Acquisition Corp. I; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | (Paragraph intentionally omitted pursuant to Exchange Act Rules 13a-14(1) and 15d-15(a)); |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: August 13, 2025 | | |
| | |
| By: | /s/ Edward Lifshitz |
| | Edward Lifshitz |
| | Chief Financial Officer |
| | (Principal Financial Officer) |
EXHIBIT 32.1
CERTIFICATION OF THE PRINCIPAL EXECUTIVE OFFICER PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report on Form 10-Q of Melar Acquisition Corp. I (the “Company”) for the quarterly period ended June 30, 2025, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Gautam Ivatury, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:
1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the period covered by the Report.
Dated: August 13, 2025 | | |
| | |
| By: | /s/ Gautam Ivatury |
| | Gautam Ivatury |
| | Chief Executive Officer |
| | (Principal Executive Officer) |
EXHIBIT 32.2
CERTIFICATION OF THE PRINCIPAL FINANCIAL OFFICER PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report on Form 10-Q of Melar Acquisition Corp. I (the “Company”) for the quarterly period ended June 30, 2025, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Edward Lifshitz, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:
1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the period covered by the Report.
Dated: August 13, 2025 | | |
| | |
| By: | /s/ Edward Lifshitz |
| | Edward Lifshitz |
| | Chief Financial Officer |
| | (Principal Financial Officer) |