VECA 10-Q
Vernal Capital Acquisition Corp. (VECA)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM
For the quarterly period ended
OR
For the transition period from ___________ to __________
Commission File Number:
| (Exact name of registrant as specified in its charter) |
| (State or other jurisdiction of | (IRS Employer | |
| incorporation or organization) | Identification Number) |
| | ||
| (Address of principal executive offices) | (Zip code) |
(Issuer’s telephone number including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading symbol(s) | Name of each exchange on which registered | ||
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| ☒ | Smaller reporting company | ||
| Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
As of September 10, 2026, the registrant had
VERNAL CAPITAL ACQUISITION CORP.
FORM 10-Q FOR THE QUARTER ENDED JULY 31, 2026
TABLE OF CONTENTS
i
Part I - Financial Information
Item 1 - Financial Statements
VERNAL CAPITAL ACQUISITION CORP.
CONDENSED BALANCE SHEETS
| July 31, 2026 (Unaudited) |
January 31, 2026 |
|||||||
| Assets: | ||||||||
| Current Assets | ||||||||
| Cash | $ | $ | ||||||
| Prepaid expense | ||||||||
| Total Current Assets | ||||||||
| Deferred offering costs | ||||||||
| Investments held in Trust Account | ||||||||
| Total Assets | $ | $ | ||||||
| Liabilities, Ordinary Shares Subject to Possible Redemption and Shareholders’ Equity (Deficit) | ||||||||
| Current Liabilities | ||||||||
| Accounts payable and accrued expenses | $ | $ | ||||||
| Promissory note – related party | ||||||||
| Total Current Liabilities | ||||||||
| Commitments and Contingencies – see Note 6 | ||||||||
| Ordinary shares, $ | ||||||||
| Shareholders’ Equity (Deficit) | ||||||||
| Ordinary shares, $ | ||||||||
| Additional paid-in capital | ||||||||
| Retained earnings (Accumulated deficit) | ( | ) | ||||||
| Total Shareholders’ Equity (Deficit) | ( | ) | ||||||
| Total Liabilities, Ordinary Shares Subject to Possible Redemption and Shareholders’ Equity (Deficit) | $ | $ | ||||||
| (1) | |
| (2) | As a result of the underwriters not exercising the over-allotment option, |
The accompanying notes are an integral part of these unaudited condensed financial statements.
1
VERNAL CAPITAL ACQUISITION CORP.
UNAUDITED CONDENSED STATEMENTS OF OPERATIONS
| For the Three Months Ended July 31, |
For the Period From July 28, 2025 (Inception) Through July 31, |
For the Six Months Ended July 31 |
||||||||||
| 2026 | 2025 | 2026 | ||||||||||
| General and administrative expenses | $ | $ | $ | |||||||||
| Loss from operations | ( | ) | ( | ) | ( | ) | ||||||
| Other income: | ||||||||||||
| Interest income – Trust | ||||||||||||
| Interest income – Bank | ||||||||||||
| Total other income | ||||||||||||
| Net income (loss) | $ | $ | ( | ) | $ | |||||||
| Basic and diluted weighted average shares outstanding, ordinary shares subject to redemption | ||||||||||||
| Basic and diluted net income per share, ordinary shares subject to redemption | $ | $ | $ | |||||||||
| Basic and diluted weighted average shares outstanding, non-redeemable ordinary shares(1)(2) | ||||||||||||
| Basic and diluted net income (loss) per share, non-redeemable ordinary shares | $ | $ | ( | ) | $ | |||||||
| (1) | |
| (2) | As a result of the underwriters not exercising the over-allotment option, |
The accompanying notes are an integral part of these unaudited condensed financial statements.
2
VERNAL CAPITAL ACQUISITION CORP.
UNAUDITED CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
FOR THE THREE AND SIX MONTHS ENDED JULY 31, 2026
| Ordinary Shares | Additional |
Accumulated (Deficit) |
Total |
|||||||||||||||||
| Shares(1) | Amount | Paid-in Capital |
Retained Earnings |
Shareholders’ Equity |
||||||||||||||||
| Balance – January 31, 2026 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||
| Net loss | ( | ) | ( | ) | ||||||||||||||||
| Balance–April 30, 2026 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||
| Ordinary shares forfeited(2) | ( | ) | ( | ) | ||||||||||||||||
| Issuance of Private Placement Units | ||||||||||||||||||||
| Issuance of Representative Shares | ||||||||||||||||||||
| Issuance of Public Rights, net of issuance costs | - | |||||||||||||||||||
| Reversal of over-allotment option | - | |||||||||||||||||||
| Accretion of carrying value of ordinary shares subject to possible redemption to redemption value | - | ( | ) | ( | ) | |||||||||||||||
| Remeasurement of carrying value to redemption value (trust interest) | - | ( | ) | ( | ) | |||||||||||||||
| Net income | - | |||||||||||||||||||
| Balance – July 31, 2026 (Unaudited) | $ | $ | $ | $ | ||||||||||||||||
FOR THE PERIOD FROM JULY 28, 2025 (INCEPTION) THROUGH JULY 31, 2025
| Ordinary Shares | Additional Paid-in | Accumulated | Total Shareholders’ |
|||||||||||||||||
| Shares(1) | Amount | Capital | Deficit | Equity | ||||||||||||||||
| Balance–July 28, 2025 (Inception) | $ | $ | $ | $ | ||||||||||||||||
| Net loss | ( | ) | ( | ) | ||||||||||||||||
| Balance–July 31, 2025 | $ | $ | $ | ( | ) | $ | ||||||||||||||
| (1) | |
| (2) | As a result of the underwriters not exercising the over-allotment option, |
The accompanying notes are an integral part of these unaudited condensed financial statements.
3
VERNAL CAPITAL ACQUISITION CORP.
UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS
| For the Six Months Ended July 31, |
For the Period From July 28, 2025 (Inception) Through July 31, |
|||||||
| 2026 | 2025 | |||||||
| Cash Flows from Operating Activities: | ||||||||
| Net income (loss) | $ | $ | ( | ) | ||||
| Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||||||||
| Interest earned on investments held in Trust Account | ( | ) | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Prepaid expenses | ( | ) | ||||||
| Accounts payable and accrued expenses | ||||||||
| Net cash used in operating activities | ( | ) | ||||||
| Cash Flows from Investing Activities: | ||||||||
| Investment of cash in Trust Account | ( | ) | ||||||
| Net cash used in investing activities | ( | ) | ||||||
| Cash Flows from Financing Activities: | ||||||||
| Proceeds from sale of Public Units | ||||||||
| Payment of underwriting commissions | ( | ) | ||||||
| Proceeds from sale of Private Placement Units | ||||||||
| Payment of offering costs | ( | ) | ||||||
| Repayment of promissory note - related party | ( | ) | ||||||
| Net cash provided by financing activities | ||||||||
| Net Change in Cash | ||||||||
| Cash – Beginning of period | ||||||||
| Cash – End of period | $ | $ | ||||||
| Non-Cash investing and financing activities: | ||||||||
| Accretion of carrying value to redemption value of redeemable ordinary shares | $ | $ | ||||||
| Fair value of Representative Shares included in deferred offering costs | $ | $ | ||||||
| Remeasurement of carrying value to redemption value (Trust interest) | $ | $ | ||||||
| Deferred offering costs paid through the issuance of ordinary shares to the sponsors | $ | $ | ||||||
| Deferred offering costs paid through promissory note—related party | $ | $ | ||||||
| Deferred offering costs in accrued offering costs and expenses | $ | $ | ||||||
| Prepaid expenses paid through promissory note—related party | $ | $ | ||||||
The accompanying notes are an integral part of the unaudited condensed financial statements.
4
VERNAL CAPITAL ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Note 1 — Organization and Business Operations
Vernal Capital Acquisition Corp. (the “Company”) is a blank check company incorporated as a Cayman Islands exempted company on
As of July 31, 2026, the Company had not commenced any operations. For the inception through July 31, 2026, the Company’s efforts have been limited to organizational activities as well as activities related to completing the initial public offering (“IPO”), and subsequent to the IPO, identifying a target company for a Business Combination. 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 Units (as defined below). The Company has selected January 31 as its fiscal year end.
The Company’s sponsors are Vernal One Limited (“Sponsor A”) and Xesse Ventures Limited (“Sponsor B”) (collectively the “Sponsors”), both are British Virgin Island business companies.
The registration statement for the IPO was declared effective on May 5, 2026. On May 7, 2026, the Company consummated its IPO 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
Following the closing of the IPO on May 7, 2026, an amount of $
5
The Company will provide its shareholders with the opportunity to redeem all or a portion of their public shares upon the completion of the Business Combination, either (i) in connection with a shareholder meeting called to approve the Business Combination or (ii) by means of a tender offer. 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 post-offering 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 its Public Shares irrespective of whether it votes for or against the proposed transaction. If the Company seeks shareholder approval in connection with a Business Combination, the Company’s Sponsors 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), shares issued as underwriting commissions (see Note 6), and any Public Shares purchased during or after the IPO 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 post-offering 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
The Company will have 15 months from the closing of the IPO (subject to six one-month extensions after the closing of the offering by depositing into the Trust Account, for each one-month extension, $
The Sponsors, officers, and directors have agreed to (i) waive their redemption rights with respect to their Founder Shares, Private Shares, and public shares in connection with the completion of the Company’s initial Business Combination; (ii) waive their redemption rights with respect to their Founder Shares, Private Shares, and public shares in connection with a shareholder vote to approve an amendment to the Company’s post-offering amended and restated memorandum and articles of association (a) to modify the substance or timing of the Company’s obligation to allow redemption in connection with the Company’s initial Business Combination or to redeem
6
In order to protect the amounts held in the Trust Account, the Sponsors have agreed that they will be liable to the Company if and to the extent any claims by a third party for services rendered or products sold to the Company, or a prospective target business with which the Company has entered into a written letter of intent, confidentiality or other similar agreement or Business Combination agreement, reduce the amount of funds in the Trust Account to below the lesser of (i) $
Going Concern Consideration
As of July 31, 2026, the Company had $
Risks and Uncertainties
Various social and political circumstances in the U.S. and around the world (including tariffs, 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 global 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. Although the length and impact of the ongoing conflicts are highly unpredictable, they could lead to market disruptions, including significant volatility in commodity prices, credit and capital markets, as well as supply chain interruptions and increased cyberattacks against U.S. companies. Additionally, any resulting sanctions could adversely affect the global economy and financial markets and lead to instability and lack of liquidity in capital markets. The financial statements do not include any adjustments that might result from the outcome of these uncertainties.
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. The interim results for the three and six months ended July 31, 2026 are not necessarily indicative of the results that may be expected through January 31, 2027 or for any future periods.
7
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.
Cash and Cash Equivalents
The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company had $
Investments Held in Trust Account
As of July 31, 2026 and January 31, 2026, the Company had $
Investments in money market funds are presented on the balance sheets at fair value at the end of each reporting period. Earnings on investments held in the Trust Account are included in interest earned on investments held in the Trust Account in the accompanying statement of operations. The estimated fair value of investments held in the Trust Account is determined using available market information.
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 $
8
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. |
The following table presents information about the Company’s assets that are measured at fair value on a recurring basis as of July 31, 2026 and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value.
| July 31, 2026 | Quoted Prices in Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Other Unobservable Inputs (Level 3) | |||||||||||||
| Assets | ||||||||||||||||
| Investments held in Trust Account | $ | $ | ||||||||||||||
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”. Transaction costs incurred in connection with the IPO amounted to $
9
Ordinary Shares Subject to Possible Redemption
The Company accounts for its ordinary shares subject to possible redemption in accordance with the guidance in ASC Topic 480, “Distinguishing Liabilities from Equity” (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 feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) 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 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
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). Accordingly, as of July 31, 2026, ordinary shares subject to possible redemption are presented at redemption value as temporary equity, outside of the shareholders’ equity section of the Company’s balance sheet.
| Gross proceeds from IPO | $ | |||
| Less: | ||||
| Proceeds allocated to Public Rights, net of issuance costs | ( | ) | ||
| Public shares issuance costs | ( | ) | ||
| Offering costs allocated to permanent equity | ( | ) | ||
| Plus: | ||||
| Accretion of carrying value to redemption value | ||||
| Subsequent remeasurement carrying value to redemption (Trust account interest) | ||||
| Ordinary shares subject to possible redemption, July 31, 2026 | $ |
Rights Accounting
The Company accounts for rights as either equity-classified or liability-classified instrument 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.
For issued or modified rights that meet all of the criteria for equity classification, the rights are required to be recorded as a component of equity at the time of issuance. For issued or modified rights that do not meet all the criteria for equity classification, the rights are required to be recorded as liabilities at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the rights are recognized as a non-cash gain or loss on the statements of operations.
As the rights to be issued upon the closing of the IPO and private placements meet the criteria for equity classification under ASC 815, therefore, the rights are classified as equity. As of July 31, 2026, there are
10
Net Income (Loss) Per Ordinary Share
The Company complies with the accounting and disclosure requirements of FASB ASC 260, “Earnings Per Share.” The Company has two classes of shares, which are referred to as redeemable ordinary shares (the Public Shares) and non-redeemable ordinary shares (the Founder Shares, the Private Placement Shares and the Representative Shares). Net income (loss) per ordinary share is calculated using the two-class method and is computed by dividing net income (loss), allocated on a pro rata basis between the two classes based on the weighted average number of shares of each class outstanding during the period, by the weighted average number of ordinary shares outstanding for each class. The Company has elected to treat only the portion of the periodic adjustment to the carrying amount of the redeemable shares that reflects a redemption in excess of fair value like a dividend. As the redemption value of the redeemable shares approximates fair value, no such adjustment was required and income or loss allocable to each class of ordinary shares has not been adjusted for the accretion of carrying value to redemption value.
The calculation of diluted net income (loss) per ordinary share does not consider the effect of the rights issued in connection with the IPO and the Private Placement, since the conversion of the rights is contingent upon the occurrence of future events. As of July 31, 2026, the Company did have any other dilutive securities or contracts that could, potentially, be exercised or converted into ordinary shares and then share in the earnings of the Company. As a result, diluted net income (loss) per ordinary share is the same as basic net income (loss) per ordinary share for the period presented.
The net income (loss) per share presented in the unaudited condensed statements of operations is based on the following:
| For the three months ended July 31, | For the period from July 28, 2025 (inception) through July 31, | For the six months ended July 31, | ||||||||||
| 2026 | 2025 | 2026 | ||||||||||
| Net income (loss) | $ | $ | ( | ) | $ | |||||||
| For the three months ended July 31, 2026 | For the period from July 28, 2025 July 31, 2025 | |||||||||||||||
| Redeemable shares | Non-redeemable shares | Redeemable shares | Non-redeemable shares | |||||||||||||
| Basic and diluted net income (loss) per ordinary share | ||||||||||||||||
| Numerator: | ||||||||||||||||
| Allocation of net income (loss) | $ | $ | $ | $ | ( | ) | ||||||||||
| Denominator: | ||||||||||||||||
| Basic and diluted weighted average shares outstanding | ||||||||||||||||
| Basic and diluted net income (loss) per ordinary share | $ | $ | $ | $ | ( | ) | ||||||||||
| For the six months ended July 31, 2026 | ||||||||
| Redeemable shares | Non-redeemable shares | |||||||
| Basic and diluted net income per ordinary share | ||||||||
| Numerator: | ||||||||
| Allocation of net income | $ | $ | ||||||
| Denominator: | ||||||||
| Basic and diluted weighted average shares outstanding | ||||||||
| Basic and diluted net income per ordinary share | $ | $ | ||||||
11
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.
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 unrecognized tax benefits and amounts accrued for interest and penalties as of July 31, 2026 and January 31, 2026. 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 December 2023, the FASB issued ASU 2023-09, Income taxes (Topic 740): Improvements to Income Tax Disclosure (“ASU 2023-09”), which enhances the transparency and usefulness of income tax disclosures. ASU 2023-09 will be effective for fiscal years beginning after December 15, 2024. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. The Company adopted this guidance on February 1, 2026 and there was no significant impact.
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 May 7, 2026, the Company sold
Note 4 — Private Placement
Simultaneously with the closing of the IPO, the Sponsor purchased an aggregate of
Each Private Unit consists of
12
Note 5 — Related Party Transactions
Founder Shares
On July 31, 2025, the Company issued an aggregate of
As of July 31, 2026,
As of January 31, 2026,
The Founder Shares are identical to the ordinary shares included in the Units being sold in the IPO, and holders of Founder Shares have the same shareholder rights as public shareholders, except that (i) the Founder Shares are subject to certain transfer restrictions, as described in more detail below, and (ii) the Sponsor, officers and directors of the Company have entered into a letter agreement with the Company, pursuant to which they have agreed (A) to waive their redemption rights with respect to the Founder Shares, private placement shares and public shares in connection with the completion of its initial Business Combination and (B) to waive their rights to liquidating distributions from the Trust Account with respect to the Founder Shares and private placement shares if the Company fails to complete its initial Business Combination within 15 months from the effective date of the registration statement, although they will be entitled to liquidating distributions from the Trust Account with respect to any public shares they hold if the Company fails to complete its initial Business Combination within such time period and (iii) the Founder Shares and private placement shares are subject to registration rights. If the Company submits its initial Business Combination to its public shareholders for a vote, the Sponsor, officers and directors have agreed (and their permitted transferees will agree), pursuant to the terms of a letter agreement entered into with the Company, to vote any Founder Shares and private placement shares held by them and any public shares purchased during or after the IPO in favor of the Company’s initial Business Combination.
With certain limited exceptions, the Founder Shares are not transferable, assignable or salable (except to certain permitted transferees) until the earlier of
Promissory Note — Related Party
On July 31, 2025, Sponsor A 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 Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). If the Company completes the initial Business Combination, the Company may repay the Working Capital Loans. 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 the Working Capital Loans but no proceeds from the Trust Account would be used to repay the Working Capital Loans. Up to $
As of July 31, 2026 and January 31, 2026, the Company had borrowings under the Working Capital Loans.
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Administrative Services Agreement
On August 13, 2025, the Company entered into an Administrative Services Agreement with Sponsor A, 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 Sponsor A $
Note 6 — Commitments and Contingencies
Registration Rights
On May 5, 2026, the Company entered into a Registration Rights Agreement with the holders of the Founder Shares, Private Units and certain other security holders, pursuant to which such holders are entitled to certain demand and “piggy-back” registration rights. The holders of these securities are entitled to make up to two demands, excluding short form demands, that the Company registers such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the completion of an initial business combination and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. Notwithstanding the foregoing, the underwriters may not exercise their demand and “piggyback” registration rights after five (5) and seven (7) years after the effective date of the registration statement of which this prospectus forms a part and may not exercise their demand rights on more than one occasion. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
Underwriting Agreement
The Company granted the underwriters a
The underwriter was entitled to (i) an underwriting discount of $
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Representative Shares and Deferred Compensation Shares
The Representative Shares and Deferred Compensation Shares have been deemed compensation by FINRA and are therefore subject to a lock-up for a period of
Note 7 — Shareholders’ Equity
Ordinary Shares — The Company is authorized to issue a total of
As a result of the underwriters not exercising the over-allotment option,
Rights — As of July 31, 2026, there were
If the Company is unable to complete a Business Combination within the Completion Window 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.
When evaluating the Company’s performance and making key decisions regarding resource allocation the CODM reviews several key metrics, which include the following:
| July 31, 2026 | January 31, 2026 | |||||||
| Investments held in Trust Account | $ | $ | ||||||
The CODM reviews the position of total assets available to assess if the Company has sufficient resources available to discharge its liabilities.
| For the three months ended July 31, 2026 | For the period from July 28, 2025 (inception) through July 31, 2025 | For the six months ended July 31, 2026 | ||||||||||
| General and administrative expenses | $ | $ | $ | |||||||||
| Interest earned on investments held in Trust Account | $ | $ | $ | |||||||||
The key measure of segment profit or loss reviewed by our CODM is general and administrative expenses. General and administrative expenses 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.
The CODM reviews interest earned on investments in Trust Account to measure and monitor shareholder value and determine the most effective strategy of investments with the Trust Account funds while maintaining compliance with the trust agreement.
Note 9 — Subsequent Events
The Company evaluated subsequent events and transactions that occurred after the balance sheet date through the date the unaudited condensed financial statements were issued. Based on this review, the Company did not identify any subsequent events that would have required adjustment or disclosure in the unaudited condensed financial statements.
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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 Vernal Capital Acquisition Corp. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the unaudited financial statements and the notes related thereto. Certain information contained in the discussion and analysis set forth below includes forward-looking statements. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors.
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, as amended, 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. We have based these forward-looking statements on our current expectations and projections about future events. 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 Company’s ability to complete an initial business combination, 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,” “should,” “could,” “would,” “plan,” “continue,” 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 the Company’s ability to complete an initial business combination. 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 final prospectus for its Initial Public Offering 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
Vernal Capital Acquisition Corp. (the “Company”) is a blank check company incorporated on July 28, 2025 as a Cayman Islands exempted company 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 (the “Business Combination”). Our efforts to identify a prospective initial Business Combination target will not be limited to a particular industry or geographic region.
We expect to continue to incur significant costs in the pursuit of our acquisition plans. We cannot assure you that our plans to complete a Business Combination will be successful.
Initial Public Offering and Private Placement
The Company’s registration statement for its initial public offering (the “IPO”) was declared effective on May 5, 2026. On May 7, 2026, the Company consummated the IPO of 10,000,000 units (the “Unit”) at a price of $10.00 per Unit, generating gross proceeds of $100,000,000.
Simultaneously with the closing of the IPO, the Company completed the sale of 251,250 private placement units (the “Private Placement Units”) at a price of $10.00 per Private Placement Unit, generating gross proceeds of $2,512,500.
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A total of $100,500,000, comprised of proceeds from the IPO and a portion of the private placement, was deposited into a U.S.-based Trust Account maintained by Continental Stock Transfer & Trust Company, acting as trustee. Except for any redemption associated with the Company’s seeking shareholder approval for an extension of time to complete a Business Combination, payment of taxes or as otherwise described in its registration statement for its IPO, the proceeds held in the Trust Account will not be released until the earlier of the completion of the Business Combination and the redemption of 100% of the outstanding public shares if the Company has not completed a Business Combination in the required time period. The remaining proceeds are held outside the Trust Account and are available to fund working capital needs.
Results of Operations
As of July 31, 2026, the Company had not yet commenced operations. All activity since inception through July 31, 2026, relates to the Company’s formation, its IPO, and subsequent to the IPO, the identification and evaluation of prospective target businesses for a Business Combination. The Company will not generate any operating revenues until the completion of an initial Business Combination. The Company generates non-operating income in the form of interest earned on the funds held in the Trust Account.
For the three months ended July 31, 2026, we had net income of $612,215, which consists of interest income from investments held in Trust Account of $ 832,568 and interest income from bank of $4,730, partially offset by operation loss of $225,083 derived from operating costs. For the period from July 28, 2025 (inception) through July 31, 2025, we had net loss of $4,193, all of which consisted of formation and operating expenses.
For the six months ended July 31, 2026, we had net income of $586,700, which consists of interest income from investments held in Trust Account of $ 832,568 and interest income from bank of $4,730, partially offset by operation loss of $250,598 derived from operating costs.
Liquidity and Capital Resources
As of July 31, 2026, the Company had cash of $669,644 and working capital of $721,720. The Company’s liquidity needs prior to the consummation of the IPO had been satisfied through a payment from its Sponsors, Xesse Ventures Limited and Vernal One Limited of $25,000 for 2,875,000 ordinary shares (the “Founder Shares”), and the loan under an unsecured promissory note from Vernal One Limited of $300,000.
In addition, as of July 31, 2026, we had $101,332,568 of cash and investments held in the Trust Account. Net cash used in operating activities for the six months ended July 31, 2026 was $301,564. Net cash used in investing activities was $100,500,000, which were related to the purchase of investments held in the Trust Account. Net cash provided by financing activities was $101,409,621, which consisted primarily of proceeds from the IPO and private placements, partially offset by offering costs.
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. 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.
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Going Concern Consideration
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 August 7, 2027 (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 “Codification Subtopic 205-40, Presentation of Financial Statements - 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 Completion Window. 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 unaudited condensed financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Contractual Obligations
Administrative Services Agreement
On August 13, 2025, the Company entered into an administrative services agreement with Vernal One Limited (the “Administrative Services Agreement”), commencing on the effective date of the registration statement of the IPO through the earlier of the consummation of the initial Business Combination or the Company’s liquidation, to pay Vernal One Limited $10,000 per month for office space and administrative and support services. On April 17, 2026, the Company and Vernal One Limited entered into an amendment to the Administrative Services Agreement, pursuant to which the monthly fee was adjusted to $6,666.67. The Company incurred $18,939 during each of the three- and six-month periods ended July 31, 2026. As of July 31, 2026 and January 31, 2026, unpaid balances of $18,939 and $0, respectively, were accrued on the unaudited condensed balance sheets.
Underwriting Agreement
We granted the underwriters a 45-day option following the effective date of the registration statement for the IPO to purchase up to 1,500,000 additional Units to cover over-allotments, if any, at the IPO price less the underwriting discounts and commissions. As of the date of this Quarterly Report on Form 10-Q, the over-allotment option had expired and the underwriters did not exercise the option, and as a result, 375,000 Founder Shares were forfeited by the Sponsors for no consideration in September 2026.
The underwriter was entitled to (i) an underwriting discount of $0.05175 per unit, or $517,500 in the aggregate, which was paid in cash at the closing of the IPO, (ii) 1% of the gross proceeds of the IPO, or 100,000 shares, which were issued in the form of representative shares at the closing of the IPO (such representative shares shall be registered so as to circumvent reliance on the Rule 144 exemption and shall only therein be subject to FINRA’s 180-day lock-up period rule), and (iii) 1% of the gross proceeds of the IPO, or 100,000 shares, which will be issued to the representative of the underwriters upon completion of an initial Business Combination as deferred underwriting commission.
Critical Accounting Policies and Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, and expenses. Significant estimates include the fair value measurements of the assets held in trust and the carrying value of ordinary shares subject to possible redemption. The Company’s management evaluates these estimates on an ongoing basis. Actual results could differ from those estimates. As of July 31, 2026, the Company has not identified any critical accounting policies and estimates.
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Recent Accounting Standards
In December 2023, the FASB issued ASU 2023-09, Income taxes (Topic 740): Improvements to Income Tax Disclosure (“ASU 2023-09”), which enhances the transparency and usefulness of income tax disclosures. ASU 2023-09 will be effective for fiscal years beginning after December 15, 2024. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. The Company adopted this guidance on February 1, 2026 and there was no significant impact.
Management does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s financial statements.
Off-Balance Sheet Arrangements; Commitments and Contractual Obligations; Quarterly Results
As of July 31, 2026, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K. Our material contractual commitments are described in Note 6 to the unaudited condensed financial statements, including deferred compensation arrangements with the underwriter.
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.
Item 3 - Quantitative and Qualitative Disclosures About Market Risk
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise required under this item.
Item 4 - Controls and Procedures
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.
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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 July 31, 2026, 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 during the period covered by this report, our disclosure controls and procedures were ineffective.
Management’s Report on Internal Controls Over Financial Reporting
We are not currently required to certify and report on our internal controls as defined by Section 404 of the Sarbanes-Oxley Act. Only in the event that we are deemed to be a large accelerated filer and accelerated filer will we be required to comply with the independent registered public accounting firm attestation requirement. Further, for as long as we remain an emerging growth company as defined in the JOBS Act, we intend to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirement.
As of July 31, 2026, we have not completed an assessment, nor have our auditors tested our systems, of internal controls. We expect to assess the internal controls of our target business or businesses prior to the completion of our initial Business Combination and, if necessary, to implement and test additional controls as we may determine are necessary in order to state that we maintain an effective system of internal controls. A target business may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding the adequacy of internal controls.
This Quarterly Report on Form 10-Q does not include a report of management’s assessment regarding internal control over financial reporting or an attestation report of our independent registered public accounting firm due to a transition period established by rules of the SEC for newly public companies.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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 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
To the knowledge of our management, there is no litigation currently pending against us, any of our officers or directors in their capacity as such or against any of our property.
Item 1A. Risk Factors
As a smaller reporting company under Rule 12b-2 of the Exchange Act, we are not required to include risk factors in this Quarterly Report on Form 10-Q. For additional risks relating to our operations, see the section titled “Risk Factors” contained in our final prospectus for the IPO filed with the SEC. Any of these factors could result in a significant or material adverse effect on our results of operations or financial condition. Additional risks could arise that may also affect our business or ability to consummate an initial Business Combination. We may disclose changes to such risk factors or disclose additional risk factors from time to time in our future filings with the SEC.
Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds
On July 31, 2025, Vernal One Limited and Xesse Ventures Limited, our Sponsors, paid an aggregate of $25,000, or approximately $0.0145 per share, to cover certain of our offering costs in exchange for 1,725,000 Founder Shares. Such securities were issued in connection with our organization pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act. In March 2026, the Company issued 2,875,000 Founder Shares to the Sponsors for $25,000 and immediately repurchased the 1,725,000 initial shares from the Sponsors for $25,000, being the proceeds from the above issuance, resulting in 2,875,000 Founder Shares outstanding after the repurchase, of which up to 375,000 shares are subject to forfeiture if the over-allotment option is not exercised in full or in part by the underwriters. As of the date of this Quarterly Report on Form 10-Q, the over-allotment option had expired and the underwriters did not exercise their over-allotment option. As a result, 375,000 Founder Shares were forfeited for no consideration in September 2026. The Sponsors hold a total of 2,500,000 Founder Shares, or approximately $0.01 per share.
On May 7, 2026, the Company consummated its IPO of 10,000,000 Units. Each Unit consists of one ordinary share and one right, each right entitling the holder thereof to receive one-fourth of one ordinary share upon the completion of a Business Combination. The Units were sold at an offering price of $10.00 per Unit, generating gross proceeds of $100,000,000.
Simultaneously with the consummation of the IPO, the Company consummated a Private Placement of 251,250 Private Placement Units, at a price of $10.00 per Private Placement Unit, generating total proceeds of $2,512,500. The Private Placement Units were purchased by the Sponsors in the IPO. The Private Placement Units are identical to the Units sold in the IPO, subject to certain exceptions. The purchasers of the Private Placement Units have agreed not to transfer, assign or sell any of the Private Placement Units (or underlying securities), subject to certain customary exceptions, until 30 days after the completion of the Company’s initial Business Combination. The issuance was made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act.
An aggregate of $100,500,000 has been deposited in the Trust Account established with Continental Stock Transfer & Trust Company acting as trustee in connection with the IPO.
For a description of the use of the proceeds generated in the IPO, see Part I, Item 2 of this Form 10-Q.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not Applicable.
Item 5 - Other Information
During the three months ended July 31, 2026, no director or officer
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Item 6 - Exhibits
| Exhibit No. | Description | |
| 31.1* | Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rules 13a-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
| 31.2* | Certification of Principal Financial Officer Pursuant to Securities Exchange Act Rules 13a-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
| 32.1** | Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
| 32.2** | Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
| 101.INS | Inline XBRL Instance Document. The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document. | |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document. | |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document. | |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | |
| 104 | Cover Page Interactive Data File. The cover page XBRL tags are embedded within the Inline XBRL document. |
| * | Filed herewith |
| ** | These certifications are furnished to the SEC pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall they be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| Vernal Capital Acquisition Corp. | ||
| Dated: September 10, 2026 | By: | /s/ Jun Du |
| Jun Du | ||
|
Chief Executive Officer, Director, and (Principal Executive Officer) | ||
| Dated: September 10, 2026 | By: | /s/ Binghan Yi |
| Binghan Yi | ||
|
Chief Financial Officer and Director (Principal Financial Officer) |
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