NOTE 6: COMMITMENTS AND CONTINGENCIES

 

Registration Rights

 

The holders of (i) Founder Shares, which were issued in a private placement prior to the closing of the Initial Public Offering, (ii) Private Placement Units, which were issued in a private placement simultaneously with the closing of the Initial Public Offering and the Class A ordinary shares underlying such Private Placement Units, and (iii) private placement-equivalent units and the Class A ordinary shares underlying such units that may be issued upon conversion of Working Capital Loans, have registration rights requiring the Company to register the sale of any securities held by them pursuant to a registration rights agreement entered into prior to the effective date of the Initial Public Offering. Pursuant to the registration rights agreement, after the exercise of underwriters’ over-allotment option and assuming $1,500,000 of Working Capital Loans will be converted into private placement-equivalent units, the Company will be obligated to register up to 3,640,375 Class A ordinary shares and 255,125 warrants. The number of Class A ordinary shares includes (i) 2,875,000 shares issuable upon conversion of the Founder Shares, (ii) 360,250 shares underlying the Private Placement Units, (iii) 150,000 shares underlying the working capital units, (iv) 180,125 shares underlying the Private Placement Warrants and (v) 75,000 shares underlying the warrants issued in connection with the working capital units. The number of warrants includes 75,000 working capital warrants and 180,125 Private Placement Warrants. The holders of these securities are entitled to make up to three registration demands, excluding short-form demands, that the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements subsequent to completion of the initial Business Combination. 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 45-day option to purchase up to an additional 1,500,000 Units to cover over-allotments at the Initial Public Offering price, less the underwriting discounts and commissions.

 

The underwriters were entitled to a cash underwriting discount of $0.15 per Unit, or $1,500,000 in the aggregate paid upon the closing of the Initial Public Offering and $225,000 in the aggregate paid upon the sale of the over-allotment Units. In addition, the underwriters are entitled to a deferred fee of $0.25 per Unit, or $2,875,000 in the aggregate. The deferred fee will become payable to the underwriters from the amounts held in the Trust Account solely in the event that the Company completes a Business Combination, subject to the terms of the underwriting agreement.

 

On October 9, 2025, the underwriters exercised the over-allotment option in full to purchase an additional 1,500,000 Units at $10.00 per Unit, generating gross proceeds of $15,000,000.

About Commitments Disclosures

Commitments and contingencies disclosures catalog a company's off-balance-sheet obligations and legal exposures — purchase commitments, guarantee arrangements, pending litigation, and regulatory proceedings. These items represent potential future cash outflows that may not appear as liabilities on the balance sheet until they become probable and estimable.

Key signals: litigation reserves and disclosed loss ranges quantify management's estimate of legal exposure, but unquantified "reasonably possible" losses often represent the larger risk. Watch for changes in language around pending cases — shifts from "remote" to "reasonably possible" or increases in estimated loss ranges signal deteriorating outcomes. Unconditional purchase obligations and take-or-pay contracts create fixed cost structures that reduce operational flexibility. Guarantee arrangements for subsidiaries or joint ventures can create cascading obligations. Compare the total commitment schedule against projected free cash flow to assess whether the company can meet its obligations without additional financing.