PECE 10-Q
Peace Acquisition Corp. (PECE)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For
the quarterly period ended
OR
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from ___________ to __________
Commission
File Number:
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction | (IRS Employer | |
| of incorporation or organization) | Identification Number) |
| (Address of principal executive offices) | (Zip code) |
(Issuer’s telephone number including area code)
N/A
(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 registered | ||
Indicate
by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. ☐Yes ☒
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T 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, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:
| Large accelerated filer ☐ | Accelerated filer ☐ | ||
| Smaller
reporting company |
|||
| Emerging
growth company |
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
As of August 14, 2026, the registrant had ordinary shares, $ par value, outstanding.
| 1 |
Part I – Financial Information
Item 1 – Financial Statements
PEACE ACQUISITION CORP
BALANCE SHEETS
June 30, 2026 | December 31, 2025 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Cash | $ | $ | ||||||
| Prepaid expenses | ||||||||
| Total Current Assets | ||||||||
| Deferred offering costs | ||||||||
| Cash and investments held in Trust Account | ||||||||
| Total Assets | $ | $ | ||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accrued offering costs and expenses | $ | $ | ||||||
| Accrued expenses - related party | ||||||||
| Due to related parties | ||||||||
| Total Current Liabilities | ||||||||
| Promissory note - related party | ||||||||
| Total Liabilities | ||||||||
| Commitments and contingencies | ||||||||
| Ordinary shares subject to possible redemption ( shares and shares at redemption value of $ and $ per share as of June 30, 2026 and December 31, 2025) | ||||||||
| Shareholders’ Equity: | ||||||||
| Preference shares, $ par value; shares authorized; issued and outstanding | ||||||||
| Ordinary shares, $ par value; shares authorized; and (1) shares issued and outstanding (excluding and shares subject to possible redemption) as of June 30, 2026 and December 31, 2025, respectively | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total Shareholders’ Equity | ||||||||
| Total Liabilities and Shareholders’ Equity | $ | $ | ||||||
| (1) |
The accompanying notes are an integral part of the unaudited financial statements.
| 2 |
PEACE ACQUISITION CORP
STATEMENTS OF OPERATIONS
(UNAUDITED)
For The Three Months Ended June 30, 2026 | For The Six Months Ended June 30, 2026 | For The Period From June 24, 2025 (Inception) Through June 30, 2025 | ||||||||||
| Formation and operating costs | $ | $ | $ | |||||||||
| Loss from operations | ( | ) | ( | ) | ( | ) | ||||||
| Other Income: | ||||||||||||
| Bank interest income | ||||||||||||
| Interest earned on cash and investments held in Trust Account | ||||||||||||
| Total other income | ||||||||||||
| Net income (loss) | $ | $ | $ | ( | ) | |||||||
| Basic and diluted weighted average shares outstanding, ordinary shares subject to possible redemption | ||||||||||||
| Basic and diluted net income per share, ordinary shares subject to possible redemption | $ | $ | $ | |||||||||
| Basic and diluted weighted average shares outstanding, non-redeemable ordinary shares | (1) | |||||||||||
| Basic and diluted net loss per share, non-redeemable ordinary shares | $ | ) | $ | ) | $ | ) | ||||||
| (1) |
The accompanying notes are an integral part of the unaudited financial statements.
| 3 |
PEACE ACQUISITION CORP
STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
(UNAUDITED)
FOR THE SIX MONTHS ENDED JUNE 30, 2026
| Ordinary Shares | Additional | Accumulated | Total Shareholders’ | |||||||||||||||||
| Shares | Amount | Paid-in Capital | Deficit | Equity (Deficit) | ||||||||||||||||
| Balance as of January 1, 2026(1) | $ | $ | $ | ( | ) | $ | ||||||||||||||
| Net loss | - | ( | ) | ( | ) | |||||||||||||||
| Balance as of March 31, 2026 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||
| Sale of Units in Initial Public Offering | ||||||||||||||||||||
| Sale of Private Placement Units | ||||||||||||||||||||
| Underwriter’s commission | - | ( | ) | ( | ) | |||||||||||||||
| Other offering costs charged to additional paid-in capital | - | ( | ) | ( | ) | |||||||||||||||
| Initial measurement of ordinary shares subject to possible redemption under ASC 480-10-S99 | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||
| Allocation of offering costs to ordinary shares subject to redemption | - | |||||||||||||||||||
| Remeasurement of carrying value to redemption value | - | ( | ) | ( | ) | |||||||||||||||
| Forfeiture of founder shares | ( | ) | ( | ) | ||||||||||||||||
| Net income | - | |||||||||||||||||||
| Subsequent measurement of ordinary shares subject to possible redemption (interest earned on Trust Account) | - | ( | ) | ( | ) | |||||||||||||||
| Balance as of June 30, 2026 | $ | $ | $ | ( | ) | $ | ||||||||||||||
FOR THE PERIOD FROM JUNE 24, 2025 (INCEPTION) THROUGH JUNE 30, 2025
| Ordinary Shares | Additional | Accumulated | Total Shareholders’ | |||||||||||||||||
| Shares (1) | Amount | Paid-in Capital | Deficit | Equity (Deficit) | ||||||||||||||||
| Balance as of June 24, 2025 (inception) | $ | $ | $ | $ | ||||||||||||||||
| Ordinary shares issued to Sponsor | ||||||||||||||||||||
| Net loss | - | ( | ) | ( | ) | |||||||||||||||
| Balance as of June 30, 2025 | $ | $ | $ | ( | ) | $ | ||||||||||||||
| (1) |
The accompanying notes are an integral part of the unaudited financial statements.
| 4 |
PEACE ACQUISITION CORP
STATEMENTS OF CASH FLOWS
(UNAUDITED)
For the Six Months Ended June 30, 2026 | For the Period From June 24, 2025 (Inception) Through June 30, 2025 | |||||||
| Cash flows from operating activities: | ||||||||
| Net income (loss) | $ | $ | ( | ) | ||||
| Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||||||||
| Interest earned on cash and investments held in Trust Account | ( | ) | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accrued offering costs and expenses | ||||||||
| Prepaid expenses | ( | ) | ( | ) | ||||
| Due to related party | ||||||||
| Accrued expenses - related party | ( | ) | ||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash flows from investing activities: | ||||||||
| Principal deposited in Trust Account | ( | ) | ||||||
| Net cash used in investing activities | ( | ) | ||||||
| Cash flows from financing activities: | ||||||||
| Proceeds from advances from related parties | ||||||||
| Proceeds from Initial Public Offering | ||||||||
| Proceeds from private placement | ||||||||
| Payment of underwriter’s discount | ( | ) | ||||||
| Proceeds from promissory note - related party | ||||||||
| Repayment of advances from related parties | ( | ) | ||||||
| Payment of deferred offering costs | ( | ) | ( | ) | ||||
| Net cash provided by financing activities | ||||||||
| Net change in cash | ||||||||
| Cash at beginning of period | ||||||||
| Cash at end of period | $ | $ | ||||||
| Supplemental disclosure of non-cash investing and financing activities: | ||||||||
| Deferred offering costs included in accrued offering costs | $ | $ | ||||||
| Offering costs charged to additional paid-in capital | $ | $ | ||||||
| Allocation of offering costs to ordinary shares subject to redemption | $ | $ | ||||||
| Reclassification of ordinary shares subject to possible redemption | $ | $ | ||||||
| Remeasurement of carrying value to redemption value | $ | $ | ||||||
| Subsequent measurement of ordinary shares subject to possible redemption (interest earned on Trust Account) | $ | $ | ||||||
| Forfeiture of founder shares (over-allotment not exercised) | $ | $ | ||||||
The accompanying notes are an integral part of the unaudited financial statements.
| 5 |
PEACE ACQUISITION CORP
Notes to the financial statements (UNAUDITED)
NOTE 1 — ORGANIZATION AND BUSINESS OPERATIONS
Peace Acquisition Corp (the “Company”) was incorporated in the Cayman Islands on June 24, 2025. The Company was formed for the purpose of effecting a merger, capital share exchange, asset acquisition, share purchase, reorganization, or similar business combination with one or more businesses (the “Business Combination”).
The Company is not limited to a particular industry or sector for purposes of consummating a Business Combination. The Company is an early stage and emerging growth company and, as such, the Company is subject to all of the risks associated with early stage and emerging growth companies.
The Company’s sponsors are Baystar Holding Group Limited, a British Virgin Islands company, and Casper Holding LP, a Delaware limited partnership (the “Sponsors”). As of June 30, 2026, the Company had not commenced any operations. All activity for the period from June 24, 2025 (inception) through June 30, 2026 relates to the Company’s formation and the Initial Public Offering (“IPO”), which is described below. The Company will not generate any operating revenues until after the completion of an initial Business Combination, at the earliest. The Company will generate non-operating income in the form of interest income from the proceeds derived from the IPO. The Company has selected December 31 as its fiscal year end.
The registration statement for the Company’s IPO became effective on May 14, 2026. On May 26, 2026, the Company consummated the IPO of units (the “Units” and, with respect to the ordinary share included in the Units being offered, the “Public Shares”) at $ per Unit (or Units if the underwriter’s over-allotment option is exercised in full), and the sale of Units (the “Private Placement Units”) at a price of $ per Private Placement Unit in private placements to the Sponsors that was closed simultaneously with the IPO.
Transaction
costs amounted to $
The Company will have until 15 months from May 26, 2026, the closing of the IPO, to consummate a Business Combination (the “Combination Period”). However, if the Company has not completed a Business Combination within the Combination Period, 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, redeem 100% of the Public Shares (the holders of the Public Shares, including the Company’s initial shareholders and/or members of its management team to the extent they purchase Public Shares, are referred to as the “Public Shareholders”), at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned and not previously released to pay taxes, if any, or for working capital requirements (less certain amount of interest to pay dissolution expenses), divided by the number of then issued and outstanding Public Shares, which redemption will completely extinguish the rights of the Public Shareholders as shareholders (including the right to receive further liquidating distributions, if any), and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining Public Shareholders and its Board of Directors, liquidate and dissolve, subject in each case to the Company’s obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law.
Going Concern Consideration
As
of June 30, 2026, the Company had $
| 6 |
In connection with the Company’s assessment of going concern considerations in accordance with Financial Accounting Standard Board’s Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” management has determined that these conditions raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statement is issued. In addition, if the Company is unable to complete a Business Combination within the Combination Period, the Company’s board of directors would proceed to commence a voluntary liquidation and thereby a formal dissolution of the Company. There is no assurance that the Company’s plans to consummate a Business Combination will be successful within the Combination Period. As a result, management has determined that such additional condition also raise substantial doubt about the Company’s ability to continue as a going concern. The financial statement does not include any adjustments that might result from the outcome of this uncertainty.
NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying financial statement has been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and pursuant to the rules and regulations of the SEC. The accompanying unaudited financial statements as of June 30, 2026, for the three months and the sixth months then ended, have been prepared in accordance with GAAP and the rules of the SEC. In the opinion of management, all adjustments (consisting of normal accruals), considered for a fair presentation have been included. The unaudited financial statements should be read in conjunction with the Company’s audited financials included in Form S-1 filing. The interim results are not necessarily indicative of the results to be expected for the year ending December 31, 2026 or for any future interim periods.
Emerging Growth Company
The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended (the “Securities Act”), as modified by the Jumpstart Our Business Startups Act of 2012, as amended (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 independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
| 7 |
Use of Estimates
The preparation of financial statements in conformity with US 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 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.
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 $
Investments held in trust account
The Company’s portfolio of investments held in the trust account is comprised of investments in U.S. government securities with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act which invest only in direct U.S. government treasury obligations and Money Market Fund. The Company’s investments held in the trust account are classified as trading securities. Trading securities are presented on the balance sheet at fair value at the end of each reporting period. Gains and losses resulting from the change in fair value of investments held in Trust Account are included in interest earned on marketable securities held in trust account in the accompanying statements of operations. The estimated fair value of investments held in the trust account is determined using available market information.
As of June 30, 2026, the Trust Account
had balances of $
Deferred Offering Costs
Deferred
offering costs consist of legal and other costs (including underwriting discounts and commissions) incurred through the balance sheet
date that are directly related to the IPO and that will be charged to shareholders’ equity upon the completion of the IPO. As of
June 30, 2026 and December 31, 2025, the Company had deferred offering costs of $
The Company account for share-based compensation expense in accordance with ASC 718, “Compensation - Stock Compensation” (“ASC 718”). Under ASC 718, share-based compensation associated with equity-classified awards is measured at fair value upon the grant date and recognized over the requisite service period. To the extent a share-based award is subject to a performance condition, the amount of expense recorded in a given period, if any, reflects an assessment of the probability of achieving such performance condition, with compensation recognized once the event is deemed probable to occur. Forfeitures are recognized as incurred.
Income Taxes
The Company follows the asset and liability method of accounting for income taxes under ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
| 8 |
ASC
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 recognizes accrued interest and penalties related to unrecognized tax benefits
as income tax expense. There were
There is currently no taxation imposed on income by the Government of the Cayman Islands. In accordance with Cayman income tax regulations, income taxes are not levied on the Company. Consequently, income taxes are not reflected in the Company’s financial statements.
Net loss per share is computed by dividing net loss by the weighted average number of ordinary shares outstanding during the period, excluding ordinary shares subject to forfeiture. Weighted average shares were reduced for the effect of an aggregate of ordinary shares that are subject to forfeiture if the over-allotment option is not exercised by the underwriter (see Notes 5 and 7). At June 30, 2026, the Company did not have any dilutive securities and other contracts that could, potentially, be exercised or converted into ordinary shares and then share in the earnings of the Company. As a result, diluted loss per share is the same as basic loss per share for the period presented.
| For The Three Months Ended | From inception (June 24, 2025) to | For The Six Months Ended | From inception (June 24, 2025) to | |||||||||||||
| June 30, 2026 | June 30, 2025 | June 30, 2026 | June 30, 2025 | |||||||||||||
| Net income (loss) | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||
| Interest earned from trust account | ( | ) | ( | ) | ||||||||||||
| Net loss including accretion of temporary equity to redemption value | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
For the three months ended June 30, 2026 | From inception June 30, 2025 | |||||||||||||||
| Redeemable | Non- Redeemable | Redeemable | Non- Redeemable | |||||||||||||
| Shares | Shares | Shares | Shares | |||||||||||||
| Basic and diluted net income (loss) per share: | ||||||||||||||||
| Numerators: | ||||||||||||||||
| Allocation of net loss including accretion of temporary equity | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | ||||||
| Income earned on investment held in Trust Account | ||||||||||||||||
| Allocation of net income (loss) | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||
| Denominators: | ||||||||||||||||
| Weighted-average shares outstanding | ||||||||||||||||
| Basic and diluted net income (loss) per share | $ | $ | ) | $ | $ | ) | ||||||||||
| 9 |
For the six months ended June 30, 2026 | From inception June 30, 2025 | ||||||||||||
| Redeemable | Non- Redeemable | Non- Redeemable | |||||||||||
| Shares | Shares | Shares | |||||||||||
| Basic and diluted net income (loss) per share: | |||||||||||||
| Numerators: | |||||||||||||
| Allocation of net loss including accretion of temporary equity | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Income earned on investment held in Trust Account | |||||||||||||
| Allocation of net income (loss) | $ | $ | ( | ) | $ | ( | ) | ||||||
| Denominators: | |||||||||||||
| Weighted-average shares outstanding | |||||||||||||
| Basic and diluted net income (loss) per share | $ | $ | ) | $ | ) | ||||||||
Fair Value of Financial Instruments
The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC 820, “Fair Value Measurement,” approximates the carrying amounts represented in the balance sheet, primarily due to their short-term nature.
The Company accounts for its ordinary shares subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” Ordinary shares subject to mandatory redemption (if any) is classified as a liability instrument and is measured at fair value. Conditionally redeemable ordinary shares (including ordinary shares that features redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) is classified as temporary equity. At all other times, ordinary shares are classified as shareholders’ equity. The Company’s ordinary shares features certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, ordinary shares subject to possible redemption are presented at redemption value as temporary equity, outside of the shareholders’ equity section of the Company’s balance sheet. The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable ordinary shares to equal the redemption value at the end of each reporting period. Increases or decreases in the carrying amount of redeemable ordinary shares are affected by charges against additional paid in capital and accumulated deficit.
| 10 |
At June 30, 2026, the ordinary shares subject to possible redemption reflected in the balance sheet are reconciled in the following table:
| Public offering proceeds | $ | |||
| Less: | ||||
| Proceeds allocated to Public Rights | ( | ) | ||
| Proceeds allocated to Public Warrants | ( | ) | ||
| Offering costs of public shares | ( | ) | ||
| Plus: | ||||
| Remeasurement of carrying value to redemption value | ||||
| Subsequent measurement of ordinary shares subject to possible redemption (income earned on trust account) | ||||
| Ordinary shares subject to possible redemption as of June 30, 2026 | $ |
Recent Accounting Standards
Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s financial statement.
NOTE 3 — INITIAL PUBLIC OFFERING
Pursuant
to the IPO, the Company sold Units (or Units if the underwriter’s over-allotment option is exercised in full)
at a price of $ per Unit. Each Unit consists of one ordinary share of the Company, par value $ per share (“Ordinary
Shares”), one right (“Rights”), each Right entitling its holder to receive one fifth of one Ordinary Share upon the
completion of the Company’s initial business combination, and one warrant (“Warrants”), each Warrant entitling its
holder to purchase one Ordinary Share for $
NOTE 4 — PRIVATE PLACEMENTS
Simultaneously
with the closing of the IPO, the Company consummated the private sale of Private Placement Units, where Units was purchased
by Sponsor and by EarlyBirdCapital, Inc., the sole underwriter in the IPO (“EBC”). Each Unit consists of one ordinary
share (“Private Shares”), one right (“Private Right”) to receive one-fifth (1/5) of one ordinary share upon consummation
of the Company’s initial Business Combination, and one warrant to purchase one ordinary share at an exercise price of $
| 11 |
NOTE 5 — RELATED PARTIES
Founder Shares and EBC Founder Shares
On
July 9, 2025, the Sponsors received of the Company’s ordinary shares in exchange for $
On
August 2, 2025, the Company issued to EBC founder shares (“EBC founder shares”) for a purchase price of $ per
share and an aggregate purchase price of $. The EBC founder shares are deemed to be underwriter’s compensation by FINRA pursuant
to Rule 5110 of the FINRA Manual. The Company estimated the fair value of the EBC founder shares to be approximately $
The fair value of the EBC founder shares was estimated at August 2, 2025. The Company used the following assumptions to estimate the fair value of EBC founder shares using Level 3 fair value measurements inputs at the measurement date:
| Time to expiration | ||||
| Risk-free rate | % | |||
| Volatility | % | |||
| Dividend yield | % | |||
| Probability of completion of business combination | % |
The Sponsors have agreed, subject to limited exceptions, the founder shares will not be transferred, assigned, sold or released from escrow until six months after the date of the consummation of our initial business combination, or earlier, if, subsequent to our initial business combination, we consummate a subsequent liquidation, merger, stock exchange or other similar transaction which results in all of our shareholders having the right to exchange their shares for cash, securities or other property.
EBC has also agreed that the EBC founder shares cannot be sold, transferred or assigned (except to the same permitted transferees as the founder shares and provided the transferees agree to the same terms and restrictions as the permitted transferees of the founder shares must agree to, each as described herein) until the consummation of an initial business combination.
Due to Related Parties
The
Sponsors paid certain formation, operating or deferred offering costs on behalf of the Company. These amounts are due on demand and non-interest
bearing. Which was fully repaid upon closing of the IPO on May 26, 2026. As of June 30, 2026 and December 31, 2025, the amount due to
the related parties was $ and
Promissory Note – Related Party
On
September 5, 2025, the Company issued an unsecured promissory note to Casper Holding LP, one of the Sponsors (the “Promissory Note”),
pursuant to which the Company may borrow up to an aggregate principal amount of $
On May 26, 2026, EBC has lend us $
As
of June 30, 2026 and December 31, 2025, there was $
Initial Accounting Service Fee
The Company has engaged Ascendant Global Advisors Inc., an affiliate of Casper Holding LP, to assist in including the preparation of financial statements and other accounting consulting services.
| 12 |
During
the period from June 24, 2025 (inception) through December 31, 2025, a service fee of $
NOTE 6 – COMMITMENTS AND CONTINGENCIES
Registration Rights
The holders of the Founder Shares, EBC Founder Shares, Private Placement Units and Units that may be issued upon conversion of working capital loans (and all underlying securities) are entitled to registration rights pursuant to a Registration Rights Agreement executed in connection with the IPO requiring the Company to register such securities for resale. The holders of these securities are entitled to make up to three demands, excluding short form registration demands, that the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to completion of a Business Combination and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. However, the registration rights agreement provides that the Company will not be required to effect or permit any registration or cause any registration statement to become effective until the securities covered thereby are released from their lock-up restrictions. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
Underwriting Agreement
Accounting Service Agreement
The
Company has engaged Ascendant Global Advisors Inc., an affiliate of Casper Holding LP, to assist in preparing quarterly and annual financial
statements commencing following the consummation of the IPO. The Company has agreed to pay for these services at a fixed quarterly rate
of $
Risks and Uncertainties
The United States and global markets are experiencing volatility and disruption following the geopolitical instability resulting from the ongoing Russia-Ukraine conflict and the Israel-Hamas conflict. Although the length and impact of the ongoing conflicts are highly unpredictable, they could lead to market disruptions, including significant volatility in commodity prices, credit and capital markets, as well as supply chain interruptions. Any of the above-mentioned factors could adversely affect the Company’s search for an Initial Business Combination. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Compensation to the Company’s Management
The
Company pays Dan (Cathy) Jiang, our Chief Financial Officer, $
per month for serving in such capacity with us commencing upon
consummation of the IPO on May 26, 2026. For the three months and six months ended June 30, 2026, the Company incurred an amount of $
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Administration Fee
Commencing
on the date the Company’s securities are first listed on the Nasdaq Capital Market on May 22, 2026, Casper Holding LP is allowed
to charge the Company an allocable share of its overhead, up to $
Redemption Obligations
The Company may hold a shareholder vote at any time to amend its amended and restated memorandum and articles of association to modify the time period to consummate a Business Combination or the terms of the redemption obligation. In such case, shareholders will be given the opportunity to redeem their shares in connection therewith.
Convertible Working Capital Loans
In connection with the initial business combination, the Company may obtain working capital loans from the Sponsors and the Company’s officers, directors and affiliates to finance transaction costs. Up to $1,500,000 of such loans may, at the option of the lenders, be converted into Private Placement Units at a price of $10.00 per unit.
NOTE 7 — SHAREHOLDERS’ EQUITY
Preferred Shares — The Company is authorized to issue shares of preferred shares with a par value of $ per share with such designations, voting and other rights and preferences as may be determined from time to time by the Company’s board of directors. As of June 30 2026, there were shares of preferred shares issued or outstanding.
Ordinary
Shares — The Company is authorized to issue ordinary shares with a par value of $ per share.
As of June 30, 2026 and December 31, 2025, there were and ordinary shares issued and outstanding, excluding and ordinary shares, respectively, subject to possible redemption, which are presented as temporary equity.
Rights — Except in cases where the Company is not the surviving company in a business combination, each holder of a public or private right will automatically receive one-fifth (1/5) of one ordinary share upon consummation of the initial business combination. The Company will not issue fractional shares in connection with an exchange of rights. Fractional shares will either be rounded down to the nearest whole share or otherwise addressed in accordance with the applicable provisions of Cayman law. In the event the Company is not the surviving company upon completion of the initial business combination, each holder of a right will be required to affirmatively convert his, her or its rights in order to receive the one-fifth (1/5) of one ordinary share underlying each right upon consummation of the business combination. If the Company is unable to complete the initial business combination within the required time period and the Company will redeem the public shares for the funds held in the trust account, holders of rights will not receive any of such funds for their rights and the rights will expire worthless.
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Warrants
— Each Unit also includes one warrant. Each whole warrant entitles the holder to purchase one ordinary share at an exercise
price of $
NOTE 8 — SEGMENT INFORMATION
ASC Topic 280, “Segment Reporting,” establishes standards for companies to report in their financial statements information about operating segments, products and services, geographic areas, and major customers. Operating segments are defined as components of an enterprise for which separate financial information is available that is regularly evaluated by the Company’s chief operating decision maker, or group, in deciding how to allocate resources and assess performance.
The
Company’s chief operating decision maker has been identified as the Chief Executive Officer (“CODM”), who reviews the
operating results for the Company as a whole to make decisions about allocating resources and assessing financial performance. Accordingly,
management has determined that the Company only has
NOTE 9 — SUBSEQUENT EVENTS
The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the financial statement was issued. Based upon this review, the Company has not identify any subsequent events.
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Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations
References to the “Company,” “our,” “us” or “we” refer to Peace Acquisition Corp. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the unaudited financial statements and the notes related thereto. Certain information contained in the discussion and analysis set forth below includes forward-looking statements. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors.
Overview
We are a blank check company incorporated as a Cayman Islands exempted company and incorporated for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses. While our efforts in identifying prospective target businesses will not be limited to a particular geographic region, we intend to focus our search on businesses throughout Asia. However, we will not consummate our initial business combination with an entity or business in China.
We have not selected any specific business combination target and we have not, nor has anyone on our behalf, initiated any substantive discussions, directly or indirectly, with any business combination target with respect to an initial business combination with us. We intend to effectuate our initial business combination using cash from the proceeds of this offering and the private placement of the private units, the proceeds of the sale of our securities in connection with our initial business combination, if any, our shares, debt or a combination of cash, share and debt.
Results of Operations
We have neither engaged in any operations nor generated any revenues to date. Our only activities since inception have been organizational activities and those necessary to prepare for the initial public offering (“IPO”). Following the IPO, we will not generate any operating revenues until after completion of our initial business combination. We will generate non-operating income in the form of interest income on cash and cash equivalents after the IPO. After the IPO, we expect to incur increased expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as expenses as we conduct due diligence on prospective business combination candidates. We expect our expenses to increase substantially after the closing of the IPO.
For the three months ended June 30, 2026, we incurred formation and operating costs of $118,157, generated bank interest income of $250 and trust interest income of $204,613, resulting in a net income of $86,706.
For the six months ended June 30, 2026, we incurred formation and operating costs of $174,553, generated bank interest income of $259 and trust interest income of $204,613, resulting in a net income of $30,319.
Liquidity and Capital Resources
On May 26, 2026, the Company consummated the IPO of 6,000,000 units (the “Units” and, with respect to the ordinary share included in the Units being offered, the “Public Shares”) at $10.00 per Unit (or 6,900,000 Units if the underwriter’s over-allotment option is exercised in full), and the sale of 262,500 Units (the “Private Placement Units”) at a price of $10.00 per Private Placement Unit in private placements to the Sponsors that was closed simultaneously with the IPO.
Following the closing of the IPO, an amount of $60,300,000 from the net proceeds of the sale of the Units in the IPO and the Private Placement was placed in a trust account. The funds held in the Trust Account may be invested in U.S. government securities with a maturity of 185 days or less. We intend to use substantially all of the funds held in the trust account, including any amounts representing interest earned on the trust account, to complete our initial business combination. To the extent that our capital stock or debt is used, in whole or in part, as consideration to complete our initial business combination, the remaining proceeds held in the trust account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.
Prior to the completion of our initial business combination, we have approximately $400,000 of proceeds held outside the trust account. We will use these funds 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, structure, negotiate and complete a business combination, and to pay taxes to the extent the interest earned on the trust account is not sufficient to pay our taxes.
We do not believe we will need to raise additional funds following this offering in order to meet the expenditures required for operating our business. However, if our estimates of the costs of identifying a target business, undertaking in-depth due diligence and negotiating an initial business combination are less than the actual amount necessary to do so, we may have insufficient funds available to operate our business prior to our initial business combination. Moreover, we may need to obtain additional financing either to complete our initial business combination or because we become obligated to redeem a significant number of our public shares upon completion of our initial business combination, in which case we may issue additional securities or incur debt in connection with such business combination.
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Related Party Transactions
Please refer to Financial Statements Note 5 – Related Party Transactions
Deferred Offering Costs
We comply with the requirements of ASC 340-10-S99-1 relating to deferred offering costs. Deferred offering costs consist of legal, accounting, advisory, administrative, and other costs (including underwriting discounts and commissions) incurred through the balance sheet date that are directly related to this offering and that were charged to shareholders’ equity upon the completion of the offering on May 26, 2026.
Other Contractual Obligations
Registration Rights
The holders of the Founder Shares, EBC founder shares, Private Placement Units will be entitled to registration rights pursuant to a registration rights agreement dated May 26, 2026 requiring the Company to register such securities for resale. Subject to certain limitations set forth in such agreement, the holders of these securities will be entitled to make up to three demands, excluding short form registration demands, that the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to completion of a Business Combination and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. However, the registration rights agreement provides that the Company will not be required to effect or permit any registration or cause any registration statement to become effective until the securities covered thereby are released from their lock-up restrictions. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
Business Combination Marketing Agreement
We have engaged EBC as an advisor in connection with its Business Combination to assist in holding meetings with the Company stockholders to discuss the potential Business Combination and the target business’ attributes, introduce the Company to potential investors that are interested in purchasing its securities in connection with its initial Business Combination and assist with press releases and public filings in connection with the Business Combination. The Company will pay EBC a service fee for such services upon the consummation of its initial Business Combination in an amount equal to 3.5% of the gross proceeds of the IPO. In addition, the Company will pay EBC a service fee in an amount equal to 1.0% of the total consideration payable in the initial Business Combination if it introduces the Company to the target business with whom it completes an initial Business Combination and the amount will be payable in cash and is due at the closing date of the initial Business Combination.
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Accounting Service Agreement
The Company has engaged Ascendant Global Advisors Inc., an affiliate of Casper Holding LP, to assist in preparing quarterly and annual financial statements commencing following the consummation of the IPO. The Company has agreed to pay for these services at a fixed quarterly rate of $5,250 each quarter.
Administration Fee
Commencing on the date the Company’s securities are first listed on the Nasdaq Capital Market, Casper Holding LP is allowed to charge the Company an allocable share of its overhead, up to $10,000 per month to the close of the Business Combination, to compensate it for the Company’s use of its office, utilities and personnel.
Critical Accounting Policies and Estimates
The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and income and expenses during the periods reported. Actual results could materially differ from those estimates. We have not identified any critical accounting policies or estimates and all the significant accounting policies are described in the Note 2 of the financial statements.
Recent Accounting Standards
Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on our 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 and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.
As required by Rules 13a-15 and 15d-15 under the Exchange Act, our Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of June 30, 2026. Based upon their evaluation, our Chief Executive Officer and Chief Financial Officer concluded that during the period covered by this report, our disclosure controls and procedures (as defined in Rules 13a-15 (e) and 15d-15 (e) under the Exchange Act) were not effective due solely to the material weakness in our internal control over financial reporting related to the Company’s lack of qualified SEC reporting professional. As a result, we performed additional analysis as deemed necessary to ensure that our financial statements were prepared in accordance with US GAAP. Accordingly, management believes that the financial statements included in this Form 10-Q present fairly, in all material respects, our financial position, result of operations and cash flows for the periods presented. Management intends to continue implement remediation steps to improve our disclosure controls and procedures and our internal control over financial reporting. Specifically, we intend to expand and improve our review process for complex securities and related accounting standards. We have improved this process by enhancing access to accounting literature, identification of third-party professionals with whom to consult regarding complex accounting applications and consideration of additional staff with the requisite experience and training to supplement existing accounting professionals.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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Part II - Other Information
Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds
On July 9, 2025, Casper Holding LP, one of our sponsors, acquired an aggregate of 2,300,000 founder shares for an aggregate purchase price of $25,000. Thereafter, it transferred certain founder shares to Baystar Holding Group Limited, our other sponsor. Prior to the initial investment in our company of $25,000 by our sponsors, we had no assets, tangible or intangible. Up to 300,000 founder shares are subject to forfeiture by our sponsors depending on the extent to which the underwriter’s over-allotment option is exercised. On June 10, 2026, the underwriter elected to terminate the over-allotment option and as a result an aggregate of 300,000 founder shares were forfeited by the Sponsors. The issuance of the foregoing securities was exempt pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended (“Securities Act”).
On May 26, 2026, the Company consummated the Initial Public Offering of 6,000,000 Units. Each Unit consists of one Ordinary Share, $0.0001 par value, of the Company, one Right, each Right entitling the holder thereof to receive one-fifth of one Ordinary Share upon the completion of the Company’s initial business combination, and one warrant to purchase one Ordinary Share for $11.50, subject to adjustment. The Units were sold at an offering price of $10.00 per Unit, generating gross proceeds of $60,000,000. EarlyBirdCapital, Inc. acted as sole book-running manager of the Initial Public Offering. The securities in the offering were registered under the Securities Act on a registration statement on Form S-1 (No. 333-290759). The registration statement was declared effective on May 14, 2026.
Simultaneously with the consummation of the IPO, the Company consummated a private placement (the “Private Placements”) of 262,500 units (“Private Placement Units”), at a price of $10.00 per Private Placement Unit, generating total proceeds of $2,625,000. The Private Placement Units were purchased by the Company’s sponsors and EarlyBirdCapital, Inc., the underwriter in the IPO. The Private Placement Units are identical to the Units sold in the IPO. The purchasers of the Private Placement Units have agreed not to transfer, assign or sell any of the Private Placement Units or securities underlying the Private Placement Units, subject to certain customary exceptions, until the completion of the Company’s initial business combination. The issuance of the Private Placement Units was made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act of 1933, as amended. The issuance was made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act.
On May 26, 2026, an aggregate of $60,300,000 has been deposited in the trust account established with Continental Stock Transfer & Trust Company acting as trustee in connection with the Initial Public Offering ($10.05 per unit sold in the offering, including the over-allotment option).
Transaction costs amounted to $1,812,486, consisting of $1,200,000 of cash underwriting fees, and $612,486 of other offering costs. These costs were charged to additional paid-in capital or accumulated deficit to the extent additional paid-in capital is fully depleted upon completion of the IPO.
For a description of the proceeds generated in the Initial Public Offering, see Part I, Item 2 of this Form 10-Q.
Item 5 – Other Information
During
the quarter ended June 30, 2026, no director or officer
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Item 6 – Exhibits
Exhibit No. |
Description | |
| 31.1* | Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rules 13a-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
| 31.2* | Certification of Principal Financial Officer Pursuant to Securities Exchange Act Rules 13a-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
| 32.1** | Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
| 32.2** | Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
| 101.INS | Inline XBRL Instance Document. The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL 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. The cover page XBRL tags are embedded within the Inline XBRL document. |
* Filed herewith
** These certifications are furnished to the SEC pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall they be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.
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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.
| PEACE ACQUISITION CORP | ||
| Dated: August 14, 2026 | By. | /s/ Fangping Zheng |
| Fangping Zheng | ||
| Chief Executive Officer | ||
| (Principal Executive Officer) | ||
| Dated: August 14, 2026 | By. | /s/ Dan Jiang |
| Dan Jiang | ||
| Chief Financial Officer | ||
| (Principal Financial and Accounting Officer) | ||
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