Quartzsea Acquisition Corp 10-Q for FY2025 Q1
Quartzsea Acquisition Corp (QSEA)
About this 10-Q
Quartzsea Acquisition Corp filed this 10-Q on April 30, 2025, covering the quarter ended February 28, 2025 (FY2025 Q1).
Headline figures
Quarter ended February 28, 2025, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Net loss
- $31.26K
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(MARK ONE)
For the quarter ended
For the transition period from to
Commission file number:
(Exact Name of Registrant as Specified in Its Charter)
| N/A | ||
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
(Address of principal executive offices)
Tel:
(Issuer’s telephone number)
Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act 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).
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| The Stock Market LLC | ||||
| The Stock Market LLC | ||||
| The Stock Market LLC |
As of April 30, 2025, Ordinary Shares, including Ordinary Shares underlying the units, par value $0.0001 per share, were issued and outstanding.
Quartzsea Acquisition Corporation
FORM 10-Q FOR QUARTER ENDED FEBRUARY 28, 2025
TABLE OF CONTENTS
i
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements
QUARTZSEA ACQUISITION CORPORATION
CONDENSED BALANCE SHEETS
|
February 28, |
November 30, 2024 |
|||||||
| Assets: | ||||||||
| Current Assets | ||||||||
| Cash | $ | $ | ||||||
| Prepaid expenses | ||||||||
| Total Current Assets | ||||||||
| Deferred offering costs | ||||||||
| Total Assets | $ | $ | ||||||
| Liabilities and Shareholder’s (Deficit) Equity | ||||||||
| Current Liabilities | ||||||||
| Accounts payable and accrued expenses | $ | $ | ||||||
| Promissory note – related party | ||||||||
| Total Current Liabilities | ||||||||
| Commitments and Contingencies – see Note 6 | ||||||||
| Shareholder’s (Deficit) Equity | ||||||||
| Ordinary shares, $ par value; shares authorized; shares issued and outstanding(1) | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( |
) | ( |
) | ||||
| Total Shareholder’s (Deficit) Equity | ( |
) | ||||||
| Total Liabilities and Shareholder’s (Deficit) Equity | $ | $ | ||||||
| (1) |
As a result of the underwriter full exercise of its over-allotment option to purchase 1,080,000 units on March 19, 2025, no shares were subject to forfeiture. |
The accompanying notes are an integral part of these unaudited condensed financial statements.
1
QUARTZSEA ACQUISITION CORPORATION
UNAUDITED CONDENSED STATEMENT OF OPERATIONS
| For the Three Months ended February 28, 2025 |
||||
| Formation and operating costs | $ | |||
| Loss from operations | ( |
) | ||
| Interest income | ||||
| Net loss | $ | ( |
) | |
| Basic and diluted weighted average shares outstanding(1) | ||||
| Basic and diluted net loss per share | $ | ( |
) | |
| (1) |
As a result of the underwriter full exercise of its over-allotment option to purchase 1,080,000 units on March 19, 2025, no shares were subject to forfeiture. |
The accompanying notes are an integral part of these unaudited condensed financial statements.
2
QUARTZSEA ACQUISITION CORPORATION
UNAUDITED CONDENSED STATEMENT OF CHANGES IN SHAREHOLDER’S EQUITY (DEFICIT)
FOR THE THREE MONTHS ENDED FEBRUARY 28, 2025
| Additional | Total Shareholder’s |
|||||||||||||||||||
| Ordinary Shares | Paid-in | Accumulated | Equity | |||||||||||||||||
| Shares(1) | Amount | Capital | Deficit | (Deficit) | ||||||||||||||||
| Balance–November 30, 2024 | $ | $ | $ | ( |
) | $ | ||||||||||||||
| Net loss | - | ( |
) | ( |
) | |||||||||||||||
| Balance–February 28, 2025 | $ | $ | $ | ( |
) | $ | ( |
) | ||||||||||||
| (1) |
As a result of the underwriter full exercise of its over-allotment option to purchase 1,080,000 units on March 19, 2025, no shares were subject to forfeiture. |
The accompanying notes are an integral part of these unaudited condensed financial statements.
3
QUARTZSEA ACQUISITION CORPORATION
UNAUDITED CONDENSED STATEMENT OF CASH FLOWS
| For the Three Months Ended February 28, 2025 |
||||
| Cash Flows from Operating Activities: | ||||
| Net loss | $ | ( |
) | |
| Changes in operating assets and liabilities: | ||||
| Prepaid expense | ||||
| Accrued expenses | ||||
| Net cash used in operating activities | ( |
) | ||
| Cash Flows from Financing Activities: | ||||
| Payment of deferred offering costs | ( |
) | ||
| Net cash used financing activities | ( |
) | ||
| Net change in cash | ( |
) | ||
| Cash, Beginning of period | ||||
| Cash, End of the period | $ | |||
The accompanying notes are an integral part of the unaudited condensed financial statements.
4
QUARTZSEA ACQUISITION CORPORATION
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Note 1 — Organization, Business Operations
Quartzsea Acquisition Corporation (the “Company”) is a newly organized blank check company incorporated under the laws of the Cayman Islands with limited liability on November 5, 2024. The Company was formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses or entities (“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.
As of February 28, 2025, the Company had not commenced any operations. For the period from November 5, 2024 (inception) through February 28, 2025, the Company’s efforts have been limited to organizational activities as well as activities related to completing the initial public offering (“IPO”). The Company will not generate any operating revenues until after the completion of a Business Combination, at the earliest. The Company will generate non-operating income in the form of dividend and/or interest income from the proceeds derived from the IPO and sale of Private Placement Units (as defined below). The Company has selected November 30 as its fiscal year end.
The Company’s sponsor is Blue Jay Investment LLC (the “Sponsor”), a Delaware limited liability company.
The registration statement for the IPO was declared effective on March 14, 2025. On March 19, 2025, the Company consummated its IPO of units (the “Public Units’), including the full exercise of the over-allotment option of Units granted to the underwriters. The Public Units were sold at an offering price of $10.00 per unit generating gross proceeds of $
Transaction costs amounted to $
The Company’s management has broad discretion with respect to the specific application of the net proceeds of the IPO and the sale of the Private Units, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. There is no assurance that the Company will be able to complete a Business Combination successfully. The Company must complete a Business Combination having an aggregate fair market value of at least 80% of the assets held in the Trust Account (as defined below) (excluding the deferred underwriting commissions and taxes payable on interest earned on the Trust Account) at the time of the agreement to enter into an initial Business Combination. The Company will only complete a Business Combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act 1940, as amended (the “Investment Company Act”).
5
Upon the closing of the IPO, management has agreed that at least $ per public share underlying Units sold in the IPO will be held into a U.S.-based trust account (“Trust Account”). The funds held in the Trust Account will be invested only in U.S. government treasury bills 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 of 1940 and which invest solely in U.S. Treasuries. The Trust Fund will be deposited into the Trust Account in the U.S. to be released only in the event of either: (i) the consummation of a Business Combination or (ii) the Company’s failure to complete a Business Combination within the applicable period of time.
The Company will provide its holders of the outstanding Public Shares (the “Public shareholders”) with the opportunity to redeem all or a portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a shareholder meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek shareholder approval of a 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 Public Shares for a pro rata portion of the amount then in the Trust Account (initially $10.00 per Public Share, plus any pro rata interest earned on the funds held in the Trust Account and not previously released to the Company to pay its franchise and income tax obligations). The Public Shares subject to redemption was recorded at a redemption value and classified as temporary equity upon the completion of the IPO on March 19, 2025 in accordance with the Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.”
If the Company seeks shareholder approval, a majority of the shares voted are voted in favor of the Business Combination. If a shareholder vote is not required by law and the Company does not decide to hold a shareholder vote for business or other legal reasons, the Company will, pursuant to its amended and restated memorandum and articles of association, conduct the redemptions pursuant to the tender offer rules of the U.S. Securities and Exchange Commission (“SEC”) and file tender offer documents with the SEC prior to completing a Business Combination. If, however, shareholder approval of the transaction is required by law, or the Company decides to obtain shareholder approval for business or legal reasons, the Company will offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. Additionally, each public shareholder may elect to redeem their Public Shares irrespective of whether they vote for or against the proposed transaction. If the Company seeks shareholder approval in connection with a Business Combination, the Company’s Sponsor and any of the Company’s officers or directors that may hold Founder Shares (as defined in Note 5) (the “Initial Shareholders”) and the underwriters have agreed (a) to vote their Founder Shares, Private Shares (as defined in Note 4), and any Public Shares purchased during or after the IPO (other than Public Shares purchased outside of a redemption offer which may not be voted in favor of approving the business combination transaction in accordance with the requirements of Rule 14e-5 under the Exchange Act and any SEC interpretations or guidance relating thereto) in favor of approving a Business Combination and (b) not to convert any shares (including the Founder Shares) in connection with a shareholder vote to approve, or sell the shares to the Company in any tender offer in connection with, a proposed Business Combination.
Notwithstanding the foregoing, if the Company seeks shareholder approval of a Business Combination and it does not conduct redemptions pursuant to the tender offer rules, the amended and restated memorandum and articles of association provides that a public shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from redeeming its shares with respect to more than an aggregate of 15% or more of the Public Shares, without the prior consent of the Company.
The Initial Shareholders have agreed (a) to waive their redemption rights with respect to the Founder Shares, Private Shares, and Public Shares held by them in connection with the completion of a Business Combination and (b) not to propose, or vote in favor of, an amendment to the amended and restated memorandum and articles of association that would affect the substance or timing of the Company’s obligation to redeem 100% of its Public Shares if the Company does not complete a Business Combination, unless the Company provides the public shareholders with the opportunity to redeem their Public Shares in conjunction with any such amendment.
6
The Company have 15 months from the consummation of the IPO, or June 19, 2026, to consummate its initial business combination (“Combination Period”). If the Company is unable to complete 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 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 (which interest shall be net of taxes payable), divided by the number of then outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining shareholders and the Company’s board of directors, dissolve and liquidate, 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.
The Sponsor and the other Initial Shareholders have agreed to waive their rights to liquidating distributions from the Trust Account with respect to the Founder Shares, and Private Shares if the Company fails to complete a Business Combination within the Combination Period. However, if the Sponsor or the other Initial Shareholders acquires Public Shares in or after the IPO, such Public Shares will be entitled to liquidating distributions from the Trust Account if the Company fails to complete a Business Combination within the Combination Period.
In order to protect the amounts held in the Trust Account, the Sponsor has agreed to be liable to the Company if and to the extent any claims by a vendor for services rendered or products sold to the Company, or a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below $ per public share, except as to any claims by a third party who executed a valid and enforceable agreement with the Company waiving any right, title, interest or claim of any kind they may have in or to any monies held in the Trust Account and except as to any claims under the Company’s indemnity of the underwriters of IPO against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third-party claims.
Going Concern Consideration
As of February 28, 2025, the Company had $
7
Note 2 — Significant Accounting Policies
Basis of Presentation
The accompanying unaudited condensed financial statements are presented in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the SEC. Accordingly, they do not include all of the information and footnotes required by the U.S. GAAP. In the opinion of management, the unaudited condensed financial statements reflect all adjustments, which include only normal recurring adjustments necessary for the fair statement of the balances and results for the periods presented. They should be read in conjunction with the Company’s Current Report on Form 8-K, as filed with the SEC on March 27, 2025. The interim results for the three months ended February 28, 2025 are not necessarily indicative of the results that may be expected through November 30, 2025 or for any future periods.
Emerging Growth Company Status
The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended, (the “Securities Act”), as modified by the Jumpstart Our Business Startups Act of 2012, (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
Use of Estimates
In preparing these unaudited condensed financial statements in conformity with U.S. GAAP, the Company’s management makes 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 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
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 $
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 Depository Insurance Coverage of $
Fair Value of Financial Instruments
The fair value of the Company’s assets and liabilities, which qualify as financial instruments under the Financial Accounting Standards Board (“FASB”) ASC 820, “Fair Value Measurement,” approximates the carrying amounts represented in the accompanying balance sheet, primarily due to their short-term nature.
The Company applies ASC 820, which establishes a framework for measuring fair value and clarifies the definition of fair value within that framework. ASC 820 defines fair value as an exit price, which is the price that would be received for an asset or paid to transfer a liability in the Company’s principal or most advantageous market in an orderly transaction between market participants on the measurement date. The fair value hierarchy established in ASC 820 generally requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Observable inputs reflect the assumptions that market participants would use in pricing the asset or liability and are developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs reflect the entity’s own assumptions based on market data and the entity’s judgments about the assumptions that market participants would use in pricing the asset or liability and are to be developed based on the best information available in the circumstances.
| ● | Level 1—Assets and liabilities with unadjusted, quoted prices listed on active market exchanges. Inputs to the fair value measurement are observable inputs, such as quoted prices in active markets for identical assets or liabilities. |
| ● | Level 2—Inputs to the fair value measurement are determined using prices for recently traded assets and liabilities with similar underlying terms, as well as direct or indirect observable inputs, such as interest rates and yield curves that are observable at commonly quoted intervals. |
| ● | Level 3—Inputs to the fair value measurement are unobservable inputs, such as estimates, assumptions, and valuation techniques when little or no market data exists for the assets or liabilities. |
Offering Costs
The Company complies with the requirements of FASB
ASC Topic 340-10-S99-1, “Other Assets and Deferred Costs – SEC Materials” (“ASC 340-10-S99”) and SEC Staff
Accounting Bulletin Topic 5A, “Expenses of Offering”. Deferred offering costs were $
9
The Company accounts for its ordinary shares subject to possible redemption in accordance with the guidance in ASC Topic 480, “Distinguishing Liabilities from Equity” (ASC 480). Ordinary shares subject to mandatory redemption (if any) will be classified as a liability instrument and will be 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) will be classified as temporary equity. At all other times, ordinary shares will be classified as stockholders’ equity. In accordance with ASC 480-10-S99, the Company classifies the ordinary shares subject to redemption outside of permanent equity as the redemption provisions are not solely within the control of the Company. Given that the ordinary shares (valued at $10 per share) sold as part of the Units in the IPO were issued with other freestanding instruments (i.e., rights), the initial carrying value of ordinary shares classified as temporary equity has been allocated to the proceeds determined in accordance with ASC 470-20. If it is probable that the equity instrument will become redeemable, the Company has the option to either (i) accrete changes in the redemption value over the period from the date of issuance (or from the date that it becomes probable that the instrument will become redeemable, if later) to the earliest redemption date of the instrument or (ii) recognize changes in the redemption value immediately as they occur and adjust the carrying amount of the instrument to equal the redemption value at the end of each reporting period. The Company has elected to recognize the changes immediately. The initial accretion and subsequent remeasurements will be treated as a deemed dividend (i.e., a reduction to retained earnings, or in absence of retained earnings, additional paid-in capital).
Net loss per ordinary share is computed by dividing net loss by the weighted average number of shares of ordinary shares outstanding during the period, excluding shares of ordinary shares subject to forfeiture. Weighted average shares were reduced for the effect of an aggregate of shares of ordinary shares that are subject to forfeiture if the over-allotment option is not exercised in full by the underwriters (see Notes 5). As of February 28, 2025, the Company did not have any dilutive securities and other contracts that could, potentially, be exercised or converted into shares of ordinary shares and then share in the earnings of the Company. As a result, diluted loss per ordinary share is the same as basic loss per ordinary share for the period presented.
Rights Accounting
The Company accounts for rights as either equity-classified or liability-classified instruments based on an assessment of the right’s specific terms and applicable authoritative guidance in ASC 480 and ASC 815. The assessment considers whether the rights are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the rights meet all of the requirements for equity classification under ASC 815, including whether the rights are indexed to the Company’s own ordinary shares and whether the right holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of right issuance and as of each subsequent quarterly period end date while the rights are outstanding.
Income Taxes
The Company accounts for income taxes under ASC 740 Income Taxes (“ASC 740”). ASC 740 requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statement and tax basis of assets and liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carry forwards. ASC 740 additionally requires a valuation allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not be realized.
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ASC 740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim period, disclosure and transition. Based on the Company’s evaluation, it has been concluded that there are no significant uncertain tax positions requiring recognition in the Company’s financial statements.
The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of February 28, 2025. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position.
There is currently no taxation imposed on income by the Government of the Cayman Islands. In accordance with Cayman Islands federal income tax regulations, income taxes are not levied on the Company. Consequently, income taxes are not reflected in the Company’s financial statements.
Recent Accounting Pronouncements
In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires the disclosure of additional segment information. ASU No. 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The Company adopted this guidance as of February 28, 2025 (see Note 8).
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 financial statements.
Note 3 — Initial Public Offering
On March 19, 2025, the Company sold
Units (including full over-allotment of
units), at a price of $
per Unit. Each Unit consists of one ordinary share, par value $
Note 4 — Private Placement
Simultaneously with the closing of the IPO, the Sponsor purchased an aggregate of Private Units at a price of $ per Private Unit for an aggregate purchase price of $
Each Private Unit consists of one ordinary share (“Private Share”) and one right (“Private Right”). Each Private Right will convert into one-fifth (1/5) of one ordinary share upon the consummation of a Business Combination. The proceeds from the Private Units were added to the proceeds from the IPO which were deposited in the Trust Account. If the Company does not complete a Business Combination within the Combination Period, the proceeds from the sale of the Private Units will be used to fund the redemption of the Public Shares (subject to the requirements of applicable law), and the Private Units and all underlying securities will expire worthless. Private Placement Units and all underlying securities will not be transferable, assignable, or saleable until the completion of a Business Combination, subject to certain exceptions.
11
Note 5 — Related Party Transactions
Founder Shares
On November 5, 2024, the Company issued to the Sponsor ordinary shares for an aggregated consideration of $
The Initial Shareholders have agreed, subject to certain limited exceptions, not to transfer, assign or sell any of their Founder Shares for a time period ending on the date that is the earlier of (A) six months after the completion of the Company’s initial business combination or (B) the date on which the Company completes a liquidation, merger, stock exchange or other similar transaction after its initial business combination that results in all of the public shareholders having the right to exchange their shares of ordinary shares for cash, securities or other property. The Initial Shareholders also agree not to transfer any ownership interest in, except to permitted transferees, their private placement until at least 30 days following the completion of the business combination.
Promissory Note — Related Party
On November 5, 2024, the Sponsor agreed to
loan the Company up to an aggregate amount of $
Working Capital Loans
In addition, in order to finance transaction costs in connection with an intended initial Business Combination, the Sponsor, the Company’s officers and directors, or their affiliates/designees may, but are not obligated to, loan the Company funds, from time to time or at any time, in whatever amount they deem reasonable in their sole discretion. If the Company completes the initial Business Combination, it would repay such loaned amounts. In the event that the initial Business Combination does not close, the Company may use a portion of the working capital held outside the Trust Account to repay such loaned amounts but no proceeds from the Trust Account would be used for such repayment.
As of February 28, 2025 and November 30, 2024, the Company had
12
Administrative Services Agreement
The Company entered into an Administrative Services Agreement with the Sponsor on November 5, 2024, commencing on the effective date of the registration statement of the initial public offering through the earlier of the consummation by the Company of an initial business combination or the Company’s liquidation, to pay the Sponsor a total of $
Note 6 — Commitments and Contingencies
Risks and Uncertainties
Various social and political circumstances in the U.S. and around the world (including rising trade tensions between the U.S. and China, and other uncertainties regarding actual and potential shifts in the U.S. and foreign, trade, economic and other policies with other countries), may contribute to increased market volatility and economic uncertainties or deterioration in the U.S. and worldwide.
As a result of these circumstances and the ongoing Russia/Ukraine, Hamas/Israel conflicts and/or other future global conflicts, the Company’s ability to consummate a Business Combination, or the operations of a target business with which the Company ultimately consummates a Business Combination, may be materially and adversely affected. In addition, the Company’s ability to consummate a transaction may be dependent on the ability to raise equity and debt financing which may be impacted by these events, including as a result of increased market volatility, or decreased market liquidity in third-party financing being unavailable on terms acceptable to the Company or at all. The impact of this action and potential future sanctions on the world economy and the specific impact on the Company’s financial position, results of operations or ability to consummate a Business Combination are not yet determinable. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Registration Rights
The holders of the Founder Shares issued and outstanding as of March 19, 2025, as well as the holders of the private units and any shares of the Company’s insiders, officers, directors or their affiliates may be issued in payment of working capital loans and extension loans made to the Company (and any shares of ordinary shares issuable upon conversion of the underlying the private rights), will be entitled to registration rights pursuant to an agreement to be signed prior to or on the effective date of the registration statement. The holders of a majority of these securities are entitled to make demands that the Company register such securities. Both the holders of the Founder Shares and the holders of the private units as well as shares issued in payment of working capital loans made to the Company, if applicable, will have the ability to elect to exercise these registration rights at any time after the consummation of an initial business combination. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the consummation of an initial business combination. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
Underwriting Agreement
The Company has granted SPAC Advisory Partners (“SAP”), the representative of the underwriters, a 45-day option from the date of the registration statement to purchase up to additional Units to cover over-allotments, if any, at the IPO price less the underwriting discounts and commissions. The underwriter fully excised its over-allotment option on March 19, 2025.
The underwriter is entitled to a cash underwriting
discount of
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Right of First Refusal
The Company has granted SAP a right of first refusal for a period commencing from the consummation of the IPO until the earlier of (i) 10 months after the consummation of the initial business combination (or the liquidation of the Trust Account in the event that the Company fails to consummate its initial business combination within the prescribed time period) or (ii) 36 months after the consummation of the IPO in accordance with FINRA Rule 5110(g)(6)(A) to act as lead financial advisor, capital markets advisor, underwriter and/or private placement agent in connection with any initial business combination or in connection with any financing that occurs between the closing of the IPO and the date that is the earlier of (i) 10 months after the closing of the initial business combination or (ii) 36 months after the consummation of the IPO.
Note 7 — Shareholder’s Deficit
Ordinary shares — The Company’s
Post-offering Memorandum and Articles of Association to be adopted with effect from the effectiveness of this prospectus will be authorized
to issue up to ordinary shares, par value $per share. Holders of ordinary shares are entitled to one vote for each share held on all matters to be voted on by the shareholders,
except as required by law. On November 5, 2024, the Company issued to the Sponsor ordinary shares for $
Rights — As of February 28, 2025 and November 30, 2024, there were no rights outstanding. Each holder of a right will receive one-fifth (1/5) of one ordinary share upon consummation of a Business Combination, even if the holder of such right redeemed all shares held by it in connection with a Business Combination. No fractional shares will be issued upon conversion of the rights. No additional consideration will be required to be paid by a holder of rights in order to receive its additional shares upon consummation of a Business Combination, as the consideration related thereto has been included in the Unit purchase price paid for by investors in the IPO. If the Company enters into a definitive agreement for a Business Combination in which the Company will not be the surviving entity, the definitive agreement will provide for the holders of rights to receive the same per ordinary share consideration the holders of the ordinary shares will receive in the transaction on an as-converted into ordinary shares basis and each holder of a right will be required to affirmatively covert its rights in order to receive one share underlying each right (without paying additional consideration). The shares issuable upon conversion of the rights will be freely tradable (except to the extent held by affiliates of the Company).
If the Company is unable to complete a Business Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of rights will not receive any of such funds with respect to their rights, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with respect to such rights, and the rights will expire worthless. Further, there are no contractual penalties for failure to deliver securities to the holders of the rights upon consummation of a Business Combination. Additionally, in no event will the Company be required to net cash settle the rights. Accordingly, the rights may expire worthless.
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Note 8 — Segment Information
ASC Topic 280, “Segment Reporting,” establishes standards for companies to report in their financial statements information about operating segments, products, services, geographic areas, and major customers. Operating segments are defined as components of an enterprise 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 has adopted the guidance in ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, in the accompanying financial statements.
The Company’s chief operating decision maker has been identified as the Chief Executive Officer and Chairwoman (“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 one operating and reportable segment. The Company’s CODM does not review assets by segment in her evaluation and therefore assets by segment are not disclosed below.
When evaluating the Company’s performance and making key decisions regarding resource allocation the CODM reviews several key metrics, which include the following:
| Schedule of Segment information | ||||
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For the |
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| Formation and operating costs | $ | |||
The key measure of segment profit or loss reviewed by our CODM is formation and operating costs. Formation and operating costs include accounting expenses, printing expenses, and regulatory filing fees, none of which are deemed to be significant segment expenses, and are reviewed in aggregate to ensure alignment with budget and contractual obligations. These expenses are monitored to manage and forecast cash available to complete a business combination within the required period.
Note 9 — Subsequent Events
The Company evaluated subsequent events and transactions that occurred after the balance sheet date through the date when these financial statements were issued. Based on this review, except as disclosed below, the Company did not identify any other subsequent events that would require adjustment or disclosure in the financial statements.
On March 17, 2025, the Company and the Sponsor entered into the Second Amendment to the Subscription Agreement, pursuant to which the purchased amount of Founder Shares was adjusted to , of which were subject to forfeiture. As a result of the underwriter’s full excise of its over-allotment option on March 19, 2025, no shares are subject to forfeiture.
On March 19, 2025, the Company consummated its IPO of units (the “Public Units’), including the full exercise of the over-allotment option of Units granted to the underwriters. The Public Units were sold at an offering price of $ per Unit generating gross proceeds of $
On March 19, 2025, the Company repaid the outstanding
Promissory Note balance of $
On April 22, 2025, the Company entered into
the Finders Fee Agreement with Hugh Grow Investment Ltd. (the “Finder”). Pursuant to the Finders Fee Agreement, the
Company agreed to pay the Finder a one-time, non-refundable retainer fee in the amount of $
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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 Quartzsea Acquisition Corporation. 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 that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors.
Special Note Regarding Forward-Looking Statements
This Quarterly Report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Exchange Act that are not historical facts and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements, other than statements of historical fact included in this Form 10-Q including, without limitation, statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding the completion of the Proposed Business Combination (as defined below), the Company’s financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. Words such as “expect,” “believe,” “anticipate,” “intend,” “estimate,” “seek” and variations and similar words and expressions are intended to identify such forward-looking statements. Such forward-looking statements relate to future events or future performance, but reflect management’s current beliefs, based on information currently available. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements, including that the conditions of the Proposed Business Combination are not satisfied. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the Risk Factors section of the Company’s Annual Report on Form S-1 filed with the U.S. Securities and Exchange Commission (the “SEC”). The Company’s securities filings can be accessed on the EDGAR section of the SEC’s website at www.sec.gov. Except as expressly required by applicable securities law, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.
Overview
We are a blank check company incorporated as a Cayman Islands exempted company and incorporated for the purpose of effecting a merger, share exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. 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.
We intend to effectuate our initial business combination using cash from the proceeds of the Initial Public Offering (“IPO” as defined below), and the private placement of the private placement units, the proceeds of the sale of our securities in connection with our initial business combination, our shares, debt or a combination of cash, stock 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 an initial business combination will be successful.
Recent Developments
On April 22, 2025, the Company entered into a finder’s agreement (the “Finders Fee Agreement”), by and between the Company and Hugh Grow Investment Ltd. (the “Finder”). Pursuant to the Finders Fee Agreement, the Company agreed to pay the Finder a one-time, non-refundable retainer fee in the amount of $350,000, payable upon the execution of Finders Fee Agreement (the “Retainer Fee”). The Company also agreed to pay the Finder a success fee in the amount of $3,500,000, payable upon the closing (or closings) of a transaction (as defined in the Finders Fee Agreement). In addition, the Company agreed to reimburse the Finder on a monthly basis for all reasonable, actual, and verifiable out-of-pocket expenses incurred in connection with the Finder’s engagement under the agreement, provided that such expenses shall not exceed $150,000 without the Company’s prior written approval. On April 29, 2025, the Company entered into an amendment to the Finder’s Fee Agreement, pursuant to which the Retainer Fee was adjusted to $150,000.
The Company acknowledges and agrees that the Finder is not a registered broker-dealer under U.S. securities laws, and is not acting as a broker-dealer in connection with the transaction.
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Results of Operations
We have neither engaged in any operations nor generated any revenues to date. Our only activities from November 5, 2024 (inception) through February 28, 2025, were organizational activities and those necessary to consummate the IPO, and subsequent to the IPO, identifying a target company for an initial business combination. We do not expect to generate any operating revenues until after the completion of our initial business combination.
We expect to generate non-operating income in the form of interest income on marketable securities held 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 for due diligence expenses in connection with searching for, and completing, a Business Combination.
For the three months ended February 28, 2025, we had a net loss of $31,255, which consisted of formation and operating costs of $33,504, offset by interest income of $2,249.
Liquidity and Capital Resources
On March 19, 2025, we consummated our IPO of 7,200,000 units (the “Units”), at $10.00 per Unit. In connection with the closing of the IPO, the underwriter fully exercised its over-allotment option to purchase 1,080,000 additional Units for an aggregate of 8,280,000 Units sold. The Units were sold at an offering price of $10.00 per Unit, generating total gross proceeds of $82,800,000. Simultaneously with the closing of our IPO, we consummated the sale of 231,900 Private Placement Units at a price of $10.00 per Private Placement Unit in a private placement to the Sponsor, generating total gross proceeds of $2,319,000.
Upon the closing of the IPO and the private placement on March 19, 2025, a total of $82,800,000 from the net proceeds of the IPO and the sale of the Private Placement Units was placed in a trust account (the “Trust Account”) maintained by Continental Stock Transfer & Trust Company as a trustee and will be invested only in U.S. government treasury bills 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 of 1940, as amended (the “Investment Company Act”), and that invest only in direct U.S. government treasury obligations.
We intend to use substantially all of the net proceeds of the IPO and the private placement, including the funds held in the Trust Account, in connection with our initial business combination and to pay our expenses relating thereto, including deferred underwriting discounts and commissions payable to the underwriters in the IPO in an amount equal to 4.0% of the total gross proceeds raised in the IPO upon consummation of our initial business combination. To the extent that our capital stock is used in whole or in part as consideration to effect our initial business combination, the remaining proceeds held in the Trust Account as well as any other net proceeds not expended will be used as working capital to finance the operations of the target business. Such working capital funds could be used in a variety of ways including continuing or expanding the target business’ operations, for strategic acquisitions and for marketing, research and development of existing or new products. Such funds could also be used to repay any operating expenses or finders’ fees which we had incurred prior to the completion of our initial business combination if the funds available to us outside of the Trust Account were insufficient to cover such expenses.
As of February 28, 2025, we had cash of $208,063 and a working capital deficit of $301,307. The Company’s liquidity needs prior to the consummation of the IPO had been satisfied through a payment from the Sponsor of $25,000 for the Founder Shares and the loan under an unsecured promissory note from the Sponsor of $500,000.
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The Company has incurred and expects to continue to incur significant costs in pursuit of the consummation of an initial Business Combination. In addition, the Company currently has until June 19, 2026 (unless the Company extends such period by amending its Amended and Restated Memorandum and Articles of Association) to consummate the initial Business Combination. If the Company does not complete a Business Combination within the prescribed timeline, 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 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,” the Company has determined that it has incurred and expects to continue to incur significant costs in pursuit of its acquisition plans. There is no assurance that the Company’s plans to raise capital or to consummate a Business Combination will be successful within the Combination Period. The Company lacks the financial resources it needs to sustain operations for a reasonable period of time, which is considered to be one year from the date of the issuance of the financial statements. Therefore, management has determined that these conditions raise substantial doubt about the Company’s ability to continue as a going concern until the earlier of the consummation of the Business Combination or the date the Company is required to liquidate. The financial statement does not include any adjustments that might result from the outcome of this uncertainty.
Off-Balance Sheet Arrangements
We have no obligations, assets or liabilities, which would be considered off-balance sheet arrangements as of February 28, 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
Promissory Note — Related Party
On November 5, 2024, the Sponsor agreed to loan the Company up to an aggregate amount of $500,000 to be used, in part, for transaction costs incurred in connection with the Initial Public Offering (the “Promissory Note”). The Promissory Note is unsecured, interest-free and due on the date on which the Company closes the IPO. As of February 28, 2025, $500,000 was outstanding under the Promissory Note. We repaid the outstanding balance of $500,000 to the Sponsor on March 19, 2025 upon the closing of the IPO.
Administrative Services Agreement
The Company entered into an Administrative Services Agreement with the Sponsor on November 5, 2024, commencing on the effective date of the registration statement of the initial public offering through the earlier of the consummation of a business combination or the Company’s liquidation, to pay the Sponsor a total of $20,000 per month for office space and administrative and support services. On February 12, 2025, the Company and the Sponsor entered into the First Amendment to the Administrative Services Agreement, pursuant to which the monthly fee was amended to $15,000. On March 7, 2025, the Company and the Sponsor entered into the Second Amendment to the Administrative Services Agreement, pursuant to which the monthly fee was amended to $20,000.
Underwriting Agreement
We granted SPAC Advisory Partners (“SAP”), the representative of the underwriters, a 45-day option from the date of IPO, to purchase up to 1,080,000 additional Units to cover over-allotments, if any, at the IPO price less the underwriting discounts and commissions. The underwriter fully excised its over-allotment option on March 19, 2025.
The underwriter is entitled to a cash underwriting discount of 0.75% on the first $69,000,000 of the gross proceeds from the IPO, plus 0.50% on the remaining $13,800,000, totalling $586,500 including the full excise of over-allotment option by the underwriter. In addition, the underwriter is entitled to a deferred fee of 4.0% of the gross proceeds of the IPO, or $3,312,000, which will be paid upon the closing of a Business Combination solely from amounts remaining in the Trust Account following all properly submitted shareholder redemption in connection with the consummation of the initial Business Combination and such deferred fee shall be capped at such amount so remaining in the Trust Account.
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Right of First Refusal
We granted SAP a right of first refusal for a period commencing from the consummation of the IPO until the earlier of (i) 10 months after the consummation of the initial business combination (or the liquidation of the Trust Account in the event that the Company fails to consummate its initial business combination within the prescribed time period) or (ii) 36 months after the consummation of the IPO in accordance with FINRA Rule 5110(g)(6)(A) to act as lead financial advisor, capital markets advisor, underwriter and/or private placement agent in connection with any initial business combination or in connection with any financing that occurs between the closing of the IPO and the date that is the earlier of (i) 10 months after the closing of the initial business combination or (ii) 36 months after the consummation of the IPO.
Finders Fee Agreement
On April 22, 2025, the Company entered into a Finders Fee Agreement with Hugh Grow Investment Ltd. (the “Finder”). Pursuant to the Finders Fee Agreement, the Company agreed to pay the Finder a one-time, non-refundable retainer fee in the amount of $350,000, payable upon the execution of Finders Fee Agreement (the “Retainer Fee”). The Company also agreed to pay the Finder a success fee in the amount of $3,500,000, payable upon the closing (or closings) of a transaction (as defined in the Finders Fee Agreement). In addition, the Company agreed to reimburse the Finder on a monthly basis for all reasonable, actual, and verifiable out-of-pocket expenses incurred in connection with the Finder’s engagement under the agreement, provided that such expenses shall not exceed $150,000 without the Company’s prior written approval. On April 29, 2025, the Company entered into an amendment to the Finder’s Fee Agreement, pursuant to which the Retainer Fee was adjusted to $150,000.
The Company acknowledges and agrees that the Finder is not a registered broker-dealer under U.S. securities laws, and is not acting as a broker-dealer in connection with the transaction.
Critical Accounting Policies and Estimates
The preparation of unaudited financial statements and related disclosures 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 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 and estimates.
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 statements.
Off-Balance Sheet Arrangements; Commitments and Contractual Obligations; Quarterly Results
As of February 28, 2025, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K and did not have any commitments or contractual obligations.
JOBS Act
On April 5, 2012, the JOBS Act was signed into law. The JOBS Act contains provisions that, among other things, relax certain reporting requirements for qualifying public companies. We will qualify as an “emerging growth company” and under the JOBS Act will be allowed to comply with new or revised accounting pronouncements based on the effective date for private (not publicly traded) companies. We are electing to delay the adoption of new or revised accounting standards, and as a result, we may not comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. As a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.
Additionally, we are in the process of evaluating the benefits of relying on the other reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, if, as an “emerging growth company,” we choose to rely on such exemptions, we may not be required to, among other things, (i) provide an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404, (ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (auditor discussion and analysis), and (iv) disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the CEO’s compensation to median employee compensation. These exemptions will apply for a period of five years following the completion of our initial public offering or until we are no longer an “emerging growth company,” whichever is earlier.
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Not required for smaller reporting companies.
ITEM 4. 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.
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time period specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management including our Chief Executive Officer, Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Our Chief Executive Officer and Chief Financial Officer carried out an evaluation with the participation of management of the effectiveness of our disclosure controls and procedures as of the end of the quarter ended February 28, 2025, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that that during the period covered by this report, our disclosure controls and procedures were effective.
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 quarter ended February 28, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Inherent Limitations on Effectiveness of Internal Controls
A control system, no matter how well designed and operated, can provide only reasonable and not absolute assurance of achieving the desired control objectives. In reaching a reasonable level of assurance, management necessarily was required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs. In addition, the design of any system of controls is based in part upon 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; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.
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PART II – OTHER INFORMATION
Item 1. Legal Proceedings.
There is no material litigation, arbitration or governmental proceeding currently pending against us or any members of our management team in their capacity as such.
Item 1A. Risk Factors.
As a smaller reporting company, we are not required to make disclosures under this Item.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
On November 5, 2024, the Sponsor acquired an aggregate of 1,725,000 Founder Shares for an aggregate purchase price of $25,000. On February 12, 2025, the Company and the Sponsor entered into the First Amendment to the Subscription Agreement, pursuant to which the purchased amount of shares was adjusted to 2,415,000 ordinary shares, $0.0104 per ordinary share. These Founder Shares include an aggregate of up to 315,000 Founder Shares that are subject to forfeiture to the extent that the underwriters’ over-allotment option is not exercised in full or in part, so that the Founder Shares will represent 35% of our issued and outstanding shares after this offering (excluding the private shares). On March 17, 2025, the Company and the Sponsor entered into the Second Amendment to the Subscription Agreement, pursuant to which the purchased amount of Founder Shares was adjusted to 2,898,000, of which 378,000 are subject to forfeiture.
On March 19, 2025, the Company consummated its initial public offering (the “IPO”) of 7,200,000 units (the “Units”). Each Unit consists of one ordinary share, par value $0.0001 per share, of the Company (the “Ordinary Shares”) and one right to receive one-fifth (1/5) of one Ordinary Share upon the consummation of the Company’s initial business combination. The Units were sold at an offering price of $10.00 per Unit, generating total gross proceeds of $72,000,000. In connection with the closing of the IPO, the underwriter fully exercised its over-allotment option to purchase 1,080,000 additional Units for an aggregate of 8,280,000 Units sold.
Simultaneously with the consummation of the IPO and the sale of the Units, the Company consummated the private placement (the “Private Placement”) of 231,900 Units (the “Private Placement Units”), each Private Placement Unit consisting of one Ordinary Share and one right, to the Sponsor at a price of $10.00 per Private Placement Unit, generating total gross proceeds of $2,319,000.
Following the closing of our IPO, an aggregate of $82,800,000 from the net proceeds of the IPO and the sale of the Private Placement Units was held in the Trust Account.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not Applicable.
Item 5. Other Information.
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Item 6. Exhibits
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SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: April 30, 2025
| Quartzsea Acquisition Corporation | ||
| By: | /s/ Qi Gong | |
| Name: | Qi Gong | |
| Title: | Chief Executive Officer and Chairwoman | |
| (Principal Executive Officer, Principal Financial and Accounting Officer) | ||
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Exhibit 10.9
FIRST AMENDMENT TO FINDER’S ENGAGEMENT AGREEMENT
This First Amendment (“First Amendment”) to the Finder’s fee Agreement (as defined below) is made and entered into as of April 29, 2025, by and between HUGH GROW INVESTMENT LTD, a British Virgin Islands (BVI) limited Company (the “Service Provider”) and Quartzsea Acquisition Corporation, a Cayman company (the “Company”). Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Finder’s Engagement Agreement.
WHEREAS, Service Provider and the Company entered into that certain Finder’s Engagement Agreement, dated as of April 22, 2025 in the form attached hereto as Exhibit A (the “Original Agreement,” and as amended, including by this First Amendment, the “Finder’s Engagement Agreement”);
WHEREAS, the parties now desire to amend the Finder’s Engagement Agreement on the terms and conditions set forth herein; and
NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and in accordance with the terms of the Finder’s Engagement Agreement, the Parties hereto, intending to be legally bound, do hereby acknowledge and agree as follows:
1. Amendments to the Finder’s Engagement Agreement. The parties hereby agree that the Finder’s Engagement Agreement is to be amended as follows:
Section 4. Fees. The Company shall pay to Finder the following compensation for its services under this Agreement:
“(a) Retainer. Upon the execution of this Agreement, the Company shall pay Finder a one time, non-refundable retainer fee in the amount of $150,000 (one hundred fifty thousand U.S. dollars). The Retainer shall be earned upon receipt and shall not be credited against any other fees payable hereunder.
(b) Success Fee. Upon the closing (or closings) of a Transaction, the Company shall pay to Finder a success fee in the amount of $3,500,000 (three million five hundred thousand U.S. dollars), or such other amount as may be mutually agreed upon in writing by the Parties (the “Success Fee”). The Success Fee shall be payable in cash via wire transfer in accordance with payment instructions to be provided by Finder.
For the avoidance of doubt, the Success Fee is a flat fee and is not calculated as a percentage of the Total Consideration or any other transaction value metric.
For the purposes of this Agreement, “Total Consideration” shall mean the total value of all cash, securities, or other property paid or transferred at the closing (or closings) of a Transaction by the Company and a Potential Target and/or their respective shareholders or creditors or to be paid or transferred in the future to such parties with respect to such Transaction (other than payments of interest or dividends), including, without limitation, any value paid in respect of (i) the assets of the Company or Potential Target, (ii) the capital stock of the Company or Potential Target (and any securities convertible into options, warrants or other rights to acquire such capital stock), and (iii) the assumption, retirement or defeasance, directly or indirectly (by operation of law or otherwise), of any long-term liability of the Company or Potential Target or repayment of indebtedness, including, without limitation, indebtedness secured by the assets of the Company or Potential Target, capital leases or preferred stock obligations.
If all or a portion of Total Consideration consists of non-cash consideration consisting of common stock, options, warrants or rights for which a public trading market existed prior to consummation of the Transaction, then the value of such securities shall be determined by the closing or last sales price thereof two business days prior to the record date for the special meeting of shareholders to approve the Transaction. If all or a portion of the Total Consideration is other than cash and securities for which there is a public trading market, then the value of such other consideration shall be the fair market value thereof on the date the Transaction is consummated as mutually agreed upon in good faith by the Company and Finder. If all or a portion of the Total Consideration includes future payments, whether or not in escrow, then the Company shall pay Finder an additional cash fee, determined in accordance with this Section 4, when, and if such payments are paid.
The Company shall reimburse Finder on a monthly basis for all reasonable, actual and verifiable out-of-pocket expenses (including Finder’s legal counsel and other professional advisor fees, travel expenses, and document production costs) arising in connection with Finder’s engagement under this Agreement; provided, however, that such expenses in the aggregate shall not exceed $150,000 without the Company’s prior written approval, which approval is not to be unreasonably withheld. Finder shall provide detailed monthly summaries of expenses for which reimbursement is requested by Finder, and will submit invoices for those expenses to the Company, which will pay those invoices within thirty (30) days of receipt.
The Parties further acknowledge and agree that Finder is not a registered broker-dealer under U.S. securities laws, nor is Finder acting as a broker-dealer in connection with the Transaction. Finder shall not engage in any activities that would require broker-dealer registration, including but not limited to the solicitation of investors or the execution of securities transactions. All services performed by Finder hereunder shall be structured and conducted in accordance with applicable SEC and FINRA regulatory guidance to ensure full compliance with broker-dealer registration exemptions.”
2. Miscellaneous. Except as expressly provided in this First Amendment, all of the terms and provisions in the Original Agreement are and shall remain unchanged and in full force and effect, on the terms and subject to the conditions set forth therein. This First Amendment does not constitute, directly or by implication, an amendment or waiver of any provision of the Original Agreement, or any other right, remedy, power or privilege of any party, except as expressly set forth herein. Any reference to the Finder’s Engagement Agreement or any other agreement, document, instrument or certificate entered into or issued in connection therewith shall hereinafter mean the Original Agreement, as amended by this First Amendment (or as the Finder’s Engagement Agreement may be further amended or modified after the date hereof in accordance with the terms thereof). The Original Agreement, as amended by this First Amendment, and the documents or instruments attached hereto or thereto or referenced herein or therein, constitutes the entire agreement between the parties with respect to the subject matter of the Finder’s Engagement Agreement, and supersedes all prior agreements and understandings, both oral and written, between the parties with respect to its subject matter. If any provision of the Original Agreement is materially different from or inconsistent with any provision of this First Amendment, the provision of this First Amendment shall control, and the provision of the Original Agreement shall, to the extent of such difference or inconsistency, be disregarded.
[Remainder of Page Intentionally Left Blank; Signature Pages Follow]
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IN WITNESS WHEREOF, each Party hereto has caused this First Amendment to be signed and delivered as of the date first written above.
| QUARTZSEA ACQUISITION CORPORATION | |||
| By: | /s/ Qi Gong | ||
| Name: | Qi Gong | |
| Title: | Chief Executive Officer | ||
| HUGH GROW INVESTMENT LTD | ||
| /s/ Hugh Ho | ||
| Name: | Hugh Ho | |
| Title: | Duly Authorized Signatory | |
[Signature Page to First Amendment to Finder’s Engagement Agreement]
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Exhibit A
Original Agreement
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HUGH GROW INVESTMENT LTD.
Unit 8, 3/F., Qwomar Trading Complex,
Blackburne Road, Port Purcell, Road
Town,
British Virgin Islands, VG 1110
April 22, 2025
Quartzsea Acquisition Corporation
1185 Avenue of the Americas, Suite 304
New York, NY 10036
Attention: Qi Gong, Chief Executive Officer
Finder’s Engagement Agreement
Dear Qi Gong,
This letter agreement (the “Agreement”) confirms the engagement of HUGH GROW INVESTMENT LTD. (the “Finder”) by Quartzsea Acquisition Corporation (the “Company”), for the purpose of introducing potential target businesses to the Company, on a nonexclusive basis, in connection with a potential merger, capital stock exchange, asset acquisition or other similar business combination transaction by the Company (a “Transaction”), as described in the Company’s final prospectus dated March 19, 2025 (the “Prospectus”).
Section 1. Services. Finder may identify and introduce the Company to one or more potential target businesses. Finder will notify the Company in writing of the name of any such potential target and, in the event the Company has not previously been introduced to such potential target by any third party, the Company will accept that notification, by countersignature or in a written or emailed communication with Finder, upon which acceptance that potential target business will be deemed “approved” by the Company. Approved potential target businesses (each, a “Potential Target”) include without limitation the entities listed on Exhibit A hereto. Exhibit A may be updated from time to time by mutual agreement of Finder and the Company (together, the “Parties”), but regardless of any such updating, each additional Potential Target will be deemed to have been added to Exhibit A upon its approval by the Company.
During the term of Finder’s engagement by the Company, Finder, as appropriate and to the extent requested by the Company, will make initial contacts with each Potential Target to ascertain its interest in a Transaction with the Company (to the extent this was not done prior to the Company’s approval of the Potential Target), and will facilitate preliminary discussions regarding a Transaction between Potential Target and the Company.
Finder will not and does not provide legal, regulatory, tax, accounting, or audit advice. Finder is not being engaged to provide, and will not provide, any due diligence services in connection with any Transaction.
It is understood that the Company is under no obligation to enter into a Transaction and that the Company will be within its rights to decline to initiate or to continue discussions with any Potential Target, or to decline any offer made in connection with a Transaction at any time. The Company acknowledges and agrees that whether it proceeds with a Transaction, with a Potential Target or otherwise, is a decision for which it has sole responsibility, and that it also shall be solely responsible for any other decision it makes regarding a Transaction or a Potential Target.
The Company acknowledges and agrees that the Company’s engagement of Finder pursuant to this Agreement is not intended, and that Finder is not in a position, to achieve or to guarantee the closing of any Transaction or the Company’s achievement of any strategic or financial goal underlying any Transaction.
Finder will not be obligated to spend any specific amount of time in rendering the services to be provided under this Agreement. Finder may choose to have these services rendered by any of its principals, employees, or consultants, as Finder determines in its sole discretion.
Should Finder share with the Company, in connection with Finder’s engagement under this Agreement, any opinion or advice (written or oral), such communication (i) is intended solely for the confidential use of the members of the Board of Directors of the Company and those executive officers of the Company who have active roles in connection with the Transaction, solely in their capacity as such, and solely for purposes relating to the Transaction; (ii) is not intended for disclosure to or for use by any security holder or creditor of the Company; and (iii) shall not confer any right or remedy upon the Company or any other person or entity.
For the avoidance of doubt, Finder shall perform its services in a manner consistent with applicable U.S. securities laws, including those administered by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA). Finder shall not engage in any activity that would require registration as a broker-dealer under such laws, and shall confine its role strictly to that of a non-registered finder as permitted under relevant regulatory interpretations.
Section 2. Potential Target Information. Finder will not and does not make any representation or warranty concerning the accuracy or completeness of any information provided to the Company, or its representatives or affiliates, (i) by or about the Potential Target or any other potential party to the Transaction, or (ii) by or on behalf of Finder, including without limitation information about the Potential Target’s business, financial condition, forecasts and projections, management, and affiliates (together, “Potential Target Information”).
The Company acknowledges and agrees that Finder, in rendering services under this Agreement, may be using Potential Target Information without any independent evaluation, appraisal or verification thereof; has no obligation to conduct any independent evaluation, appraisal or verification of Potential Target Information; is entitled to assume that all Potential Target Information has been prepared and provided in good faith and reasonably; and does not assume responsibility for the accuracy or the completeness of Potential Target Information.
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Section 3. Company Information. The Company will provide Finder and Potential Targets with all information about the Company and its control persons and/or beneficial owners that Finder and the Potential Targets, as the case may be, reasonably may request, including without limitation information about the Company’s business, financial condition, forecasts and projections, management, and affiliates, and all such information as Finder may require in order to satisfy its obligations as a U.S. financial institution under the USA PATRIOT Act and Financial Crimes Enforcement Network regulations; and, further, the Company will provide Finder and Potential Targets reasonable access to the Company’s officers, directors, accountants, and counsel, and will not omit or withhold any material information or access. Finder, in rendering services under this Agreement, may use and rely on such information, discussions with the Company representatives, and other information available from public sources and other sources that Finder deems to be reliable (together, “Company Information”).
The Company represents and warrants to Finder that Company Information, as of the date provided, is and will be true and correct in all material respects; will not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which they are made, not misleading; and, to the extent that it includes financial forecasts or projections, has been prepared in good faith, reasonably, and based on the best currently available estimates and judgments of the management of the Company. The Company will notify Finder promptly of any material change or development of which it becomes aware in the business or financial condition of the Company, any Potential Target, or any other potential party to a Transaction, and will amend or supplement the Company Information so that it will not be misleading in any material respect or omit to state any material fact that is required to be stated or that is necessary in order to make the Company Information not misleading.
The Company acknowledges and agrees that Finder, in rendering services under this Agreement, may be using Company Information without any independent evaluation, appraisal or verification; has no obligation to conduct any independent evaluation, appraisal or verification of Company Information; is entitled to assume that all Company Information has been prepared and provided in good faith and reasonably; and does not assume responsibility for the accuracy or the completeness of Company Information.
Section 4. Fees. The Company shall pay to Finder the following compensation for its services under this Agreement:
(a) Retainer. Upon the execution of this Agreement, the Company shall pay Finder a one-time, non-refundable retainer fee in the amount of $350,000 (three hundred fifty thousand U.S. dollars). The Retainer shall be earned upon receipt and shall not be credited against any other fees payable hereunder.
(b) Success Fee. Upon the closing (or closings) of a Transaction, the Company shall pay to Finder a success fee in the amount of $3,500,000 (three million five hundred thousand U.S. dollars), or such other amount as may be mutually agreed upon in writing by the Parties (the “Success Fee”). The Success Fee shall be payable in cash via wire transfer in accordance with payment instructions to be provided by Finder.
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For the avoidance of doubt, the Success Fee is a flat fee and is not calculated as a percentage of the Total Consideration or any other transaction value metric.
For the purposes of this Agreement, “Total Consideration” shall mean the total value of all cash, securities, or other property paid or transferred at the closing (or closings) of a Transaction by the Company and a Potential Target and/or their respective shareholders or creditors or to be paid or transferred in the future to such parties with respect to such Transaction (other than payments of interest or dividends), including, without limitation, any value paid in respect of (i) the assets of the Company or Potential Target, (ii) the capital stock of the Company or Potential Target (and any securities convertible into options, warrants or other rights to acquire such capital stock), and (iii) the assumption, retirement or defeasance, directly or indirectly (by operation of law or otherwise), of any long-term liability of the Company or Potential Target or repayment of indebtedness, including, without limitation, indebtedness secured by the assets of the Company or Potential Target, capital leases or preferred stock obligations.
If all or a portion of Total Consideration consists of non-cash consideration consisting of common stock, options, warrants or rights for which a public trading market existed prior to consummation of the Transaction, then the value of such securities shall be determined by the closing or last sales price thereof two business days prior to the record date for the special meeting of shareholders to approve the Transaction. If all or a portion of the Total Consideration is other than cash and securities for which there is a public trading market, then the value of such other consideration shall be the fair market value thereof on the date the Transaction is consummated as mutually agreed upon in good faith by the Company and Finder. If all or a portion of the Total Consideration includes future payments, whether or not in escrow, then the Company shall pay Finder an additional cash fee, determined in accordance with this Section 4, when, and if such payments are paid.
The Company shall reimburse Finder on a monthly basis for all reasonable, actual and verifiable out-of-pocket expenses (including Finder’s legal counsel and other professional advisor fees, travel expenses, and document production costs) arising in connection with Finder’s engagement under this Agreement; provided, however, that such expenses in the aggregate shall not exceed $150,000 without the Company’s prior written approval, which approval is not to be unreasonably withheld. Finder shall provide detailed monthly summaries of expenses for which reimbursement is requested by Finder, and will submit invoices for those expenses to the Company, which will pay those invoices within thirty (30) days of receipt.
The Parties further acknowledge and agree that Finder is not a registered broker-dealer under U.S. securities laws, nor is Finder acting as a broker-dealer in connection with the Transaction. Finder shall not engage in any activities that would require broker-dealer registration, including but not limited to the solicitation of investors or the execution of securities transactions. All services performed by Finder hereunder shall be structured and conducted in accordance with applicable SEC and FINRA regulatory guidance to ensure full compliance with broker-dealer registration exemptions.
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Section 5. Obligations in Connection with Transaction. In connection with any Transaction involving an approved Potential Target, the Company shall (i) retain a firm to prepare a report and provide an opinion concerning the fairness, from a financial point of view, of the Transaction to the Company and its unaffiliated shareholders based upon, among other things, a financial review of the Potential Target and its business and operations, (ii) engage an investigative search firm to conduct an investigation of the directors and executive officers of the Potential Target and provide copies of the search reports to Finder and its legal counsel, (iii) require counsel to the Company and the Potential Target of such Transaction to provide negative assurance letters to Finder as of the consummation of the Transaction in form and substance reasonably satisfactory to Finder, (iv) require the accounting firm or firms that have audited any financial statements set forth in any disclosure document relating to such Transaction to provide “comfort letters” to Finder pursuant to AU 634 of the Public Company Accounting Oversight Board as of the effectiveness of any such disclosure document that was filed with, and declared effective by, the Securities and Exchange Commission, and as of the consummation of the Transaction and (v) take any other actions reasonably requested by Finder.
Section 6. Indemnification of Finder. The Company will defend, indemnify and hold harmless Finder and each other Indemnified Party (as defined in the indemnification provisions annexed to this Agreement as Exhibit B (the “Indemnification Provisions”)), from and against any and all losses, claims, damages, and liabilities, related to, arising out of, or in connection with Finder’s engagement under this Agreement, Finder’s performance of any service in connection with the Agreement, or any Transaction, except to the extent that any such loss, claim, damage, or liability is found by a court of competent jurisdiction in a final, non-appealable judgment to have resulted primarily from such Indemnified Party’s gross negligence, bad faith or willful misconduct; and otherwise will indemnify the Indemnified Parties in accordance with the Indemnification Provisions, which are incorporated by reference herein.
Section 7. Termination of Engagement. Finder’s engagement under this Agreement may be terminated by either the Company or Finder at any time, with or without cause, upon written advice to that effect by one Party to the other Party; provided, however, that notwithstanding any such termination, Finder will be entitled to its full fee under Section 4 hereof in the event that at any time prior to the expiration of 12 months after termination, the Company consummates a Transaction, or enters into a letter of intent or a definitive agreement to consummate a Transaction, which Transaction is thereafter consummated, with (a) any Potential Target, (b) any other party that was identified or introduced by Finder to the Company during the term of this Agreement, or (c) any other party with respect to which Finder assisted the Company in any way in accomplishing a Transaction during the term of this Agreement, including without limitation by participating in any discussion regarding a Transaction during the term of this Agreement. The termination of this Agreement will not terminate the provisions of Sections 2 through 11 hereof or the Indemnification Provisions, each of which will remain operative regardless of any termination of this Agreement.
Section 8. Confidentiality. In connection with this Agreement, Finder will provide to the Company the names and contact information of certain representatives of Potential Targets, all of which is confidential information of Finder. The Company will not use any of this confidential information for any purpose other than as contemplated by this Agreement and will treat the information as confidential as long as the information otherwise remains non-public. Except as otherwise required by law or regulatory authority or as contemplated by this Agreement, the Company will not disclose this confidential information to any third party without the consent of Finder.
The Company will keep confidential the terms of this Agreement and any advice, opinion, report, materials, or other information provided to the Company by Finder under this Agreement. The Company shall not disclose this confidential information to any third party (other than to the Company’s counsel and other advisors, on a confidential basis), or otherwise publicly refer to it, except with the prior written consent of Finder.
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The Company acknowledges and agrees that Finder and its affiliates, in the ordinary course, may have received, and may receive, information from third parties that could be relevant to Finder’s engagement under this Agreement, but that is nevertheless subject to a contractual, equitable or statutory obligation of confidentiality, and that Finder is under no obligation to disclose, directly or indirectly, any such information or the fact that Finder is in possession of such information.
Section 9. Public Announcements. Finder may, at its option and expense and after public announcement of the Transaction, place announcements and advertisements or otherwise publicize the Transaction and Finder’s role in it, which public disclosures may include, without limitation, the reproduction of the Company’s logo and a hyperlink to the Company’s website on Finder’s website, and announcements or advertisements in such financial and other newspapers and journals as Finder may choose. The Company, if requested by Finder, will include a mutually acceptable reference to Finder in any press release or other public announcement made by the Company regarding the Transaction and the matters described in this Agreement.
Section 10. Successors and Assigns. The benefits of this Agreement shall inure to the Parties’, and the Indemnified Parties’ (as that term is defined in the Indemnification Provisions) respective successors and assigns, and the obligations and liabilities assumed in this Agreement by the Parties and the Indemnifying Parties (as that term is defined in the Indemnification Provisions) shall be binding upon their respective successors and assigns; provided, however, that the rights and obligations under this Agreement of either Party may not be assigned without the prior written consent of the other Party, and any purported assignment that does not comply with this provision shall be null and void.
Section 11. Miscellaneous.
(a) This Agreement and all rights, obligations and remedies hereunder, and the validity thereof, will be governed by and construed in accordance with the laws of the State of New York applicable to agreements made and to be fully performed therein, without regard to conflicts of law principles that would result in the application of any law other than the law of the State of New York.
(b) If any dispute arises between the Parties relating to, arising out of, or in connection with this Agreement or the breach, termination, enforcement, interpretation, validity, or any provision thereof, the Parties shall attempt to resolve that dispute through good faith negotiation for a period of thirty (30) days prior to either Party instituting any legal proceedings with respect to such dispute. Should the dispute not be resolved through those good faith efforts, any claim, counterclaim, or defense relating to, arising out of, or in connection with any such dispute, including a dispute relating to the scope or applicability of this agreement to arbitrate, shall be determined exclusively through confidential binding arbitration in New York, New York before an arbitrator. The arbitration shall be administered by JAMS pursuant to its Comprehensive Arbitration Rules and Procedures. Judgment on the award may be entered in any federal or state court in New York, New York.
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(c) Any notice, demand, request, or communication that any Party gives or causes to be given under or in connection with this Agreement will be in writing and will be sent by Federal Express and/or email transmission using the addresses set forth below. Any Party may change its address by notifying the other Party of the change of address in writing.
(i) Notices to Finder will be delivered to HUGH GROW INVESTMENT LTD., Unit 8, 3/F., Qwomar Trading Complex, Blackburne Road, Port Purcell, Road Town, British Virgin Islands, VG 1110
(ii) Notices to the Company will be delivered to 1185 Avenue of the Americas, Suite 304, New York, NY 10036.
(d) Nothing in this Agreement, express or implied, is intended to confer or does confer on any person or entity (including security holders, employees or creditors of the Company) other than the Parties and their respective successors and assigns, and, to the extent expressly set forth in the Indemnification Provisions, the Indemnified Parties (as defined in the Indemnification Provisions), any right or remedy under or by reason of this Agreement or as a result of the services to be rendered by Finder under this Agreement. The Company acknowledges and agrees that Finder is acting under this Agreement as an independent contractor with duties solely to the Company; that Finder is not acting as an agent of the Company or its security holders, employees or creditors or in a fiduciary capacity with respect to the Company or its security holders, employees or creditors; and that Finder is not assuming any duties or obligations other than those expressly set forth in this Agreement. Nothing contained in this Agreement shall be construed as creating, or be deemed to create, any agency, joint venture, or partnership.
(e) Finder has read the Prospectus and understands that the Company has established the trust account described in the Prospectus, initially in an amount of $82.8 million, for the benefit of the public stockholders and the underwriters of the Company’s initial public offering (the “Underwriters”), and that, except for certain exceptions described in the Prospectus, the Company may disburse monies from the trust account only: (i) to the public stockholders in the event of the conversion of their shares or the liquidation of the Company; or (ii) to the Company and the Underwriters after consummation of a Transaction, as described in the Prospectus. Finder will not have any right, title, interest or claim of any kind in or to any monies in the trust account (a “Claim”); waives any Claim it may have in the future as a result of, or arising out of, any negotiation, contract or agreement with the Company; and will not seek recourse against the trust account for any reason whatsoever.
(f) The Company acknowledges that Finder and its affiliates may in the past have had, and may currently or in the future have, investment banking, investment management, financial advisory or other relationships with the Company and its officers, directors and affiliates, potential parties to a Transaction and their officers, directors and affiliates, or persons that are competitors, customers or suppliers of (or have other relationships with) the Company or its affiliates or potential parties to a Transaction or their affiliates, from which relationships conflicting interests or duties may arise. Nothing in this Agreement shall limit or preclude Finder or its affiliates from (i) carrying on any business with or from providing any financial or non-financial services to any party whatsoever, including without limitation any competitor, customer, or supplier of the Company, or any other party that may have interests different from or adverse to the interests of the Company, or (ii) carrying on its business, as currently conducted or as it may be conducted in the future.
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(g) The Company acknowledges that Finder and its affiliates engage in a wide range of activities for their own account and the accounts of customers, including corporate finance, mergers and acquisitions, equity sales, trading and research, private equity, asset management and related activities. In connection with these activities or otherwise, Finder and its affiliates, and their respective directors, officers, executives and employees, as well as investment funds in which any of them may have a financial interest, may at any time, directly or indirectly, hold long or short positions and may trade or otherwise effect transactions for their own accounts or the accounts of customers, in debt or equity securities, senior loans or derivative products relating to the Company, potential parties to a Transaction, their respective affiliates, or entities that are competitors, customers or suppliers of the Company.
(h) This Agreement (including the Exhibits hereto) embodies the entire agreement and understanding between the Parties and supersedes all prior agreements and understandings relating to the subject matter hereof. This Agreement may not be amended, modified or waived except in writing signed by both of the Parties. Waiver of any breach of any provision hereof will not be deemed to be a waiver of any other breach of the same or any other provision hereof, at any prior or subsequent time.
(i) Whenever possible, each provision of this Agreement will be interpreted in such a manner as to be effective and valid under applicable law. If any provision of this Agreement is determined to be invalid or unenforceable in any respect, it shall be interpreted to the fullest extent enforceable consistent with its intent, and such determination will not otherwise affect this Agreement, which will remain in full force and effect.
(j) For the convenience of the Parties, any number of counterparts of this Agreement may be executed by the Parties, each of which shall be an original instrument and all of which taken together shall constitute one and the same Agreement. Delivery of a signed counterpart of this Agreement by facsimile transmission or other electronic or digital transmission shall constitute valid sufficient delivery thereof.
(k) Each Party represents that it has all legally necessary power and authority to enter into this Agreement. All legally necessary action has been taken by each Party for the authorization, execution, delivery of, and the performance of its respective obligations under, this Agreement, and each signatory below is duly authorized to sign this Agreement on behalf of the Party it represents.
(k) The headings contained in this Agreement were inserted for convenience of reference only and will in no way define, describe or limit the scope of intent of this Agreement or any of the provisions hereof.
Please confirm that the foregoing is in accordance with your understanding by signing and returning this Agreement to Finder.
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Section 12. Regulatory Compliance.
Finder shall perform its services in accordance with applicable federal securities laws and regulations, including but not limited to those promulgated by the SEC and FINRA. Finder shall not engage in any activity that constitutes “effecting transactions in securities” as defined in Section 3(a)(4)(A) of the Securities Exchange Act of 1934. The Parties expressly agree that Finder’s role shall be limited to that of an unregistered finder, and that all Transaction-related services will be carried out in a manner designed to preserve compliance with all applicable exemptions to broker-dealer registration.
| Very truly yours, HUGH | ||
| GROW INVESTMENT LTD. | ||
| By: | /s/ Hugh Ho | |
| Name: | Hugh Ho | |
| Title: | Duly Authorized Signatory | |
| ACCEPTED AND AGREED AS OF THE DATE FIRST ABOVE WRITTEN: | ||
| Quartzsea Acquisition Corporation | ||
| By: | /s/ Qi Gong | |
| Name: | Qi Gong | |
| Title: | Chief Executive Officer | |
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EXHIBIT A
Names of Potential Targets
A-1
EXHIBIT B
INDEMNIFICATION PROVISIONS
These Indemnification Provisions are annexed as Exhibit B to, and incorporated by reference into, the Finder’s Engagement Agreement dated April 22, 2025, between Finder (as defined therein) and the Company (as defined therein) (the “Agreement”). In connection with the Agreement, Finder and the Company agree as follow:
1. In the event that Finder or any of its affiliates, or any of their respective members, principals, partners, officers, directors, advisors, representatives, employees, agents, or controlling persons (each, an “Indemnified Party”), becomes involved in any capacity in any claim, counterclaim, action, proceeding or investigation (collectively, an “Indemnified Proceeding”) brought or threatened by or against any party, including without limitation the Company’s security holders or creditors, related to, arising out of, or in connection with Finder’s engagement under the Agreement, Finder’s performance of any service in connection with the Agreement, or any Transaction (as defined in the Agreement), whether or not the Indemnified Proceeding was initiated or brought by or on behalf of the Company, and whether or not the Company or an Indemnified Party is a party to the Indemnified Proceeding, then, in connection with that Indemnified Proceeding, the Company and its affiliates (the “Indemnifying Parties”):
(a) will reimburse each Indemnified Party for its reasonable legal and other expenses (including the reasonable cost of any investigation and preparation) as and when incurred; and
(b) will defend, indemnify and hold harmless each Indemnified Party from and against any and all losses, claims, damages, and liabilities, except to the extent that any such loss, claim, damage, or liability is found by a court of competent jurisdiction in a final, non-appealable judgment to have resulted primarily from such Indemnified Party’s gross negligence, bad faith or willful misconduct.
2. If for any reason the foregoing indemnification is unavailable or insufficient, then the Indemnifying Parties shall contribute to the expense, loss, claim, damage, and liability for which such indemnification is unavailable or insufficient in such proportion as is appropriate to reflect the relative economic interests of the Company and its security holders on the one hand and the Indemnified Parties on the other hand in the matters contemplated by the Finder’s engagement as well as the relative fault of the Company and such Indemnified Parties with respect to such expense, loss, claim, damage or liability, and any other relevant equitable considerations. For purposes of these Indemnification Provisions, the relative economic interests of the Company and its security holders and the Indemnified Parties shall be deemed to be in the same proportion as (i) the aggregate consideration paid or contemplated to be paid, or received or contemplated to be received, by the Company or its security holders, as the case may be, pursuant to a Transaction (whether or not consummated), bears to (ii) the fees paid to Finder under the Agreement. Notwithstanding the foregoing, (a) to the extent permitted by applicable law, in no event shall the Indemnified Parties be required to contribute an aggregate amount that exceeds the amount of fees actually paid to and received by Finder under the Agreement; and (b) no person found liable for a fraudulent misrepresentation shall be entitled to contribution from any person who is not also found liable for fraudulent misrepresentation.
B-1
3. No Indemnified Party shall have any liability (whether in contract, tort or otherwise) to the Company or its security holders or creditors related to, arising out of or in connection with Finder’s engagement under the Agreement, Finder’s performance of any service in connection with the Agreement, or any Transaction, except to the extent that any loss, claim, damage, or liability incurred by the Company is found by a court of competent jurisdiction in a final, non-appealable judgment to have resulted primarily from such Indemnified Party’s gross negligence, bad faith or willful misconduct.
4. The Indemnifying Parties’ obligations under these Indemnification Provisions shall be in addition to any liability that the Company otherwise may have, shall not limit or be limited by any right Finder or any other Indemnified Party otherwise may have, and shall be binding upon and inure to the benefit of all successors, assigns, heirs and personal representatives of all Indemnified Parties and Indemnifying Parties.
5. If any Indemnified Proceeding to which the Company is not a party is brought, threatened or asserted against an Indemnified Party in respect of which indemnity or contribution may be sought under these Indemnification Provisions, Finder promptly shall notify the Company, provided that the failure so to notify the Company will not relieve the Company from any liability that the Company may have on account of this Agreement except to the extent that (i) the Company did not otherwise learn of the Indemnified Proceeding and (b) the failure to notify results in the forfeiture by the Company of substantial rights and defenses.
6. Without Finder’s prior written consent, the Company will not settle, compromise or consent to the entry of any judgment in any Indemnified Proceeding (whether or not Finder or any other Indemnified Party is an actual or potential party) in respect of which indemnity or contribution may be sought under these Indemnification Provisions, unless such settlement, compromise or consent (i) includes an unconditional release from the settling, compromising, or consenting party of each Indemnified Party from all liability arising out of the Indemnified Proceeding and the allegations therein, and (ii) does not contain any adverse statement with respect to any Indemnified Party.
7. Neither termination nor completion of the Agreement shall affect these Indemnification Provisions, which shall remain operative and in full force and effect.
B-2
Exhibit 31.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO RULE 13A-14(A) UNDER THE SECURITIES EXCHANGE ACT OF 1934,
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Qi Gong, certify that:
| 1. | I have reviewed this quarterly report on Form 10-Q of Quartzsea Acquisition Corporation; |
| 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(s) 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 my supervision, to ensure that material information relating to the registrant, is made known to us by others within those entities, particularly during the period in which this report is being prepared; and | |
| b) | (Paragraph omitted pursuant to Exchange Act Rules 13a-14(a) and 15d-15(a)); and | |
| c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
| d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter 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(s) 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: April 30, 2025 | |
| /s/ Qi Gong | |
| Qi Gong | |
|
Chief Executive Officer |
|
| (Principal Executive Officer) |
Exhibit 31.2
CERTIFICATION OF CHIEF FINANCIAL OFFICER
PURSUANT TO RULE 13A-14(A) UNDER THE SECURITIES EXCHANGE ACT OF 1934,
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Qi Gong, certify that:
| 1. | I have reviewed this quarterly report on Form 10-Q of Quartzsea Acquisition Corporation; |
| 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(s) 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 my supervision, to ensure that material information relating to the registrant, is made known to us by others within those entities, particularly during the period in which this report is being prepared; and | |
| b) | (Paragraph omitted pursuant to Exchange Act Rules 13a-14(a) and 15d-15(a)); and | |
| c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
| d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter 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(s) 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: April 30, 2025 | |
| /s/ Qi Gong | |
| Qi Gong | |
|
Chief Financial Officer |
|
| (Principal Financial and Accounting Officer) |
Exhibit 32.1
CERTIFICATION OF CHIEF 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 of Quartzsea Acquisition Corporation (the “Company”) on Form 10-Q for the quarter ended February 28, 2025 as filed with the Securities and Exchange Commission (the “Report”), each of the undersigned, in the capacities and on the dates indicated below, hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
| 1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and | |
| 2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of the Company. |
| Date: April 30, 2025 | |
| /s/ Qi Gong | |
| Qi Gong | |
|
Chief Executive Officer and Chairwoman |
|
| (Principal Executive Officer) |
Exhibit 32.2
CERTIFICATION OF CHIEF 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 of Quartzsea Acquisition Corporation (the “Company”) on Form 10-Q for the quarter ended February 28, 2025 as filed with the Securities and Exchange Commission (the “Report”), each of the undersigned, in the capacities and on the dates indicated below, hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
| 1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and | |
| 2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of the Company. |
| Date: April 30, 2025 | |
| /s/ Qi Gong | |
| Qi Gong | |
|
Chief Financial Officer |
|
| (Principal Financial and Accounting Officer) |