MRLN 10-K & 10-Q changes, risk factors and insider trading

An investment in our securities involves a high degree of risk. You should consider carefully all of the risks described below, together with the other information contained in this Annual Report. If any of the following events occur, our business, financial condition and operating results may be materially adversely affected. In that event, the trading price of our securities could decline, and you could lose all or part of your investment.

Risks Relating to Our Business and the Initial Business Combination

Our Public Shareholders voted on the Proposed Business Combination on March 12, 2026, but if we do not consummate the Proposed Business Combination and pursue an alternative initial business combination opportunity, our Public Shareholders may not be afforded an opportunity to vote on our initial business combination, and even if we hold a vote, holders of our Founder Shares and Private Placement Units will participate in such vote, which means we may complete our initial business combination even though a majority of our Public Shareholders do not support such a combination.

We held the EGM on March 12, 2026 to approve the Proposed Business Combination; however, if we do not consummate the Proposed Business Combination and instead search for an alternate initial business combination opportunity, we may choose not to hold a shareholder vote to approve our initial business combination if such business combination would not require shareholder approval under applicable law or stock exchange listing requirement. Except for as required by applicable law or stock exchange requirement, the decision as to whether we will seek shareholder approval of a proposed Business Combination or will allow shareholders to sell their shares to us in a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors, such as the timing of the transaction and whether the terms of the transaction would otherwise require us to seek shareholder approval. Even if we seek shareholder approval of our initial business combination, the Sponsor will participate in the vote on such approval. Accordingly, we may complete our initial business combination even if a majority of our Public Shareholders do not approve of the Business Combination we complete.

Our Public Shareholders’ only opportunity to affect the investment decision regarding a potential Business Combination may be limited to the exercise of their right to redeem their Public Shares from us for cash.

At the time of investment in us, our Public Shareholders were not provided with an opportunity to evaluate the specific merits or risks of our initial business combination. We held the EGM on March 12, 2026 to approve the Proposed Business Combination, in connection with which our Public Shareholders were provided with an opportunity to evaluate the specific merits or risks of the Proposed Business Combination and exercise the right to redeem their Public Shares for cash; however, if we do not consummate the Proposed Business Combination and instead search for an alternate initial business combination opportunity, since our board of directors may complete an initial business combination without seeking shareholder approval, Public Shareholders may not have the right or opportunity to vote on the initial business combination, unless we seek such shareholder vote. Accordingly, their only opportunity to affect the investment decision regarding our initial business combination may be limited to exercising their redemption rights within the period of time (which will be at least 20 business days) set forth in our tender offer documents mailed to our Public Shareholders in which we describe our initial business combination.

We sought shareholder approval of the Proposed Business Combination at the EGM held on March 12, 2026, at which the Sponsor voted in favor of the Business Combination. If we do not consummate the Proposed Business Combination and instead pursue an alternative initial business combination opportunity and seek shareholder approval thereof, the Sponsor has agreed to vote in favor of such business combination, regardless of how our Public Shareholders vote.

As of December 31, 2025, the Sponsor owned 25.9% of our issued and outstanding ordinary shares. The Sponsor and management team may from time to time purchase Class A Ordinary Shares prior to our initial business combination. The Articles provide that, if we seek shareholder approval of an initial business combination, such initial business combination requires an ordinary resolution which is the affirmative vote (in person (including virtually) or by proxy) of holders of a majority of the outstanding Ordinary Shares that are entitled to vote and are voted. As a result, in connection with the EGM held on March 12, 2026, and if we do not consummate the Proposed Business Combination and instead pursue an alternative initial business combination opportunity, the extraordinary general meeting to approve the alternative initial business combination opportunity, in addition to the Sponsor’s Founder Shares and Private Placement Units, we did not and would not need any of the 25,000,000 Public Shares outstanding to be voted in favor of an initial business combination in order to have our initial business combination approved (assuming that only the holders of 11,252,779 ordinary shares, representing a quorum under the Articles, are voted).

The ability of our Public Shareholders to redeem their Public Shares for cash may make our financial condition unattractive to potential business combination targets, which may make it difficult for us to enter into an initial business combination with a target.

We expect to consummate the Proposed Business Combination with Merlin as we have received the requisite shareholder vote. The Proposed Business Combination does not have a minimum cash condition. However, in the unlikely scenario that we do not consummate the Proposed Business Combination and instead pursue an alternative initial business combination opportunity, we may seek to enter into a business combination transaction agreement with a minimum cash requirement for (i) cash consideration to be paid to the target or its owners, (ii) cash for working capital or other general corporate purposes or (iii) the retention of cash to satisfy other conditions. If too many public shareholders exercise their redemption rights, we would not be able to meet such closing condition and, as a result, would not be able to proceed with the business combination. Consequently, if accepting all properly submitted redemption requests would not allow us to satisfy a closing condition as described above, we would not proceed with such redemption and the related business combination and may instead search for an alternate business combination. Prospective targets will be aware of these risks and, thus, may be reluctant to enter into a business combination transaction with us.

The ability of our Public Shareholders to exercise redemption rights with respect to a large number of our Public Shares and the amount of deferred underwriting compensation may not allow us to complete the most desirable Business Combination or optimize our capital structure.

At the time we entered into the Business Combination Agreement with Merlin, we did not know how many shareholders would exercise their redemption rights, and therefore structured the transaction based on our expectations as to the number of shares that would be submitted for redemption. As of the date of this Annual Report, in connection with the EGM held on March 12, 2026, Public Shareholders holding 22,550,551 Public Shares, representing approximately 90.3% of the outstanding Public Shares, exercised their redemption rights with respect to the Proposed Business Combination. If we do not consummate the Proposed Business Combination and instead enter into an agreement for an alternate initial business combination opportunity, we will not know how many shareholders may exercise their redemption rights with respect to such alternate transaction, and therefore will need to structure such transaction based on our expectations as to the number of shares that will be submitted for redemption. If our initial business combination agreement requires us to use a portion of the cash in the Trust Account to pay the purchase price, or requires us to have a minimum amount of cash at closing, as the Proposed Business Combination does, we will need to reserve a portion of the cash in the Trust Account to meet such requirements, or arrange for third party financing. In addition, if a larger number of shares are submitted for redemption than we initially expected, we may need to restructure the transaction to reserve a greater portion of the cash in the Trust Account or arrange for third party financing. Raising additional third-party financing may involve dilutive equity issuances or the incurrence of indebtedness at higher than desirable levels. Furthermore, this dilution would increase to the extent that the anti-dilution provision of the Class B Ordinary Shares results in the issuance of Class A Ordinary Shares on a greater than one-to-one basis upon conversion of the Class B Ordinary Shares at the time of our initial business combination, though the Sponsor has agreed to waive its anti-dilution rights under the Articles in connection with the Proposed Business Combination. The above considerations may limit our ability to complete the most desirable business combination available to us or optimize our capital structure. As a result, our obligations to redeem Public Shares for which redemption is requested and to pay the deferred underwriting commissions may not allow us to complete the most desirable business combination or optimize our capital structure.

In addition, raising additional third-party financing may involve dilutive equity issuances or the incurrence of indebtedness at higher than desirable levels. Furthermore, this dilution would increase to the extent that the anti-dilution provisions of the Class B Ordinary Shares result in the issuance of Class A Ordinary Shares on a greater than one-to-one basis upon conversion of the Class B Ordinary Shares at the time of our business combination. The above considerations may limit our ability to complete the most desirable business combination available to us or optimize our capital structure and may result in substantial dilution from your purchase of our Class A Ordinary Shares. The effect of this dilution will be greater for our Public Shareholders than holders of our Founder Shares. The amount of the deferred underwriting compensation payable to the underwriter will not be adjusted for any shares that are redeemed in connection with an initial business combination, which may further dilute your investment. The per-share amount we will distribute to shareholders who properly exercise their redemption rights will not be reduced by the deferred underwriting compensation and after such redemptions, the per-share value of shares held by non-redeeming shareholders will reflect our obligation to pay the deferred underwriting compensation. We may not be able to generate sufficient value from the completion of our initial business combination in order to overcome the dilutive impact of these and other factors, and, accordingly, you may incur a net loss on your investment.

The ability of our Public Shareholders to exercise redemption rights with respect to a large number of our shares could increase the probability that our initial business combination would be unsuccessful and that you would have to wait for liquidation in order to redeem your shares.

The Proposed Business Combination has received requisite shareholder approval and is expected to be consummated on March 16, 2026. If we do not consummate the Proposed Business Combination and instead pursue an alternative initial business combination opportunity, and such alternative initial business combination agreement requires us to use a portion of the cash in the Trust Account to pay the purchase price, or requires us to have a minimum amount of cash at closing, the probability that such initial business combination would be unsuccessful is increased. If such initial business combination is unsuccessful, you would not receive your pro rata portion of the funds in the Trust Account until we liquidate the Trust Account. If you are in need of immediate liquidity, you could attempt to sell your shares in the open market; however, at such time our shares may trade at a discount to the pro rata amount per share in the trust account. In either situation, you may suffer a material loss on your investment or lose the benefit of funds expected in connection with your exercise of redemption rights until we liquidate or you are able to sell your shares in the open market.

The requirement that we complete our initial business combination within the completion window may give potential target businesses leverage over us in negotiating a business combination and may limit the time we have in which to conduct due diligence on potential business combination targets, in particular as we approach our dissolution deadline, which could undermine our ability to complete our initial business combination on terms that would produce value for our shareholders.

We are required to enter into an initial business combination within the completion window. If we do not consummate the Proposed Business Combination and instead seek an alternate initial business combination opportunity, any potential target business with which we enter into negotiations concerning a business combination will be aware that we must complete our initial business combination within the completion window. Consequently, such target business may obtain leverage over us in negotiating a business combination, knowing that if we do not complete our initial business combination with that particular target business, we may be unable to complete our initial business combination with any target business. This risk will increase as we get closer to the timeframe described above. In addition, we may have limited time to conduct due diligence and may enter into our initial business combination on terms that we would have rejected upon a more comprehensive investigation. The length of time it may take us to complete our diligence and negotiate a business combination may reduce the amount of time available for us to ultimately complete an initial business combination should such diligence or negotiations not lead to a consummated initial business combination.

Our search for a business combination, and any target business with which we ultimately consummate a business combination, may be materially adversely affected by events that are outside of our control, such as increased geopolitical unrest, pandemic outbreaks and volatility in the debt and equity markets.

In the event we do not consummate the Proposed Business Combination and instead pursue an alternative initial business combination opportunity, our ability to find a potential target business and the business of any potential business with which we may consummate such alternative business combination could be materially and adversely affected by events that are outside of our control. For example, geopolitical unrest (such as the ongoing military conflict between Russia and Ukraine and the military conflict in the Middle East), including war, terrorist activity and acts of civil or international hostility are increasing. In particular, although the length, impact and outcome of the ongoing military conflict in Ukraine and the recent armed conflict in the Middle East is highly unpredictable, these conflicts could lead to significant market and other disruptions, including significant volatility in commodity prices and supply of energy resources, instability in financial markets, supply chain interruptions, political and social instability, changes in consumer or purchaser preferences as well as increase in cyberattacks and espionage.

Similarly other events outside of our control, including natural disasters, climate-related events pandemic or health crises (such as the COVID-19 pandemic) may arise from time to time, any such events may cause significant volatility and declines in the global markets, disproportionate impacts to certain industries or sectors, disruptions to commerce (including to economic activity, travel and supply chain), loss of life and property damage, and may adversely affect the global economy or capital markets, and the business of any potential target business with which we may consummate a business combination and could be materially adversely affected. In addition, our ability to consummate a transaction may be dependent on the ability to raise equity and debt financing which may be impacted by these and other events, including as a result of increased market volatility, decreased market liquidity in third-party financing being unavailable on terms acceptable or at all.

Changes in international trade policies, tariffs and treaties affecting imports and exports may have a material adverse effect on our search for an initial business combination target if we do not complete the Proposed Business Combination, our ability to complete the Proposed Business Combination or another initial business combination, and/or our business, financial condition and results of operations following completion of the Proposed Business Combination or another initial business combination.

There have recently been significant changes to international trade policies and tariffs affecting imports and exports. The U.S. has implemented a range of new tariffs and increases to existing tariffs, and, in response to the tariffs announced by the U.S., other countries have imposed new or increased tariffs on certain exports from the United States. There is currently significant uncertainty about the future relationship between the United States and other countries with respect to trade policies, government regulations and tariffs. We cannot predict whether, and to what extent, current tariffs will continue or trade policies will change in the future. Any significant increases in tariffs on goods or materials or other changes in trade policy, or the perception that such changes could occur, could negatively affect our search for a target business if we do not complete the Proposed Business Combination and/or our ability to complete the Proposed Business Combination or another initial business combination. For example, if we pursue a target company which sources or manufactures material components outside of the U.S., these changes could materially impact such target company’s business and financial performance. Similarly, if we pursue a target company which exports products outside of the U.S., retaliatory tariff and trade measures imposed by other countries could affect such target’s ability to export products and therefore adversely affect its sales. We may not be able to adequately address the risks presented by these tariffs or other potential trade policy changes. As a result, if we do not complete the Proposed Business Combination, we may deem it costly, impractical or risky to complete an initial business combination with a particular target or with a target in a particular industry or from a particular country. Consequently, the pool of potential target companies may be reduced, which could impair our ability to identify a suitable target and to complete an initial business combination. The business prospects of Merlin or another target company could change even after we enter into a business combination agreement, as a result of tariffs or the threat of tariffs that may have a material impact on Merlin’s or such other target’s business. Accordingly, changes in trade and tariff policies could prevent or make it difficult or more expensive for us to complete the Proposed Business Combination or another initial business combination. Tariffs and threats of tariffs and other potential trade policy changes could also lead to material adverse effects on New Merlin or another post-business combination company.

If we do not complete the Proposed Business Combination, we may not be able to consummate our initial business combination within the completion window, in which case we would cease all operations except for the purpose of winding up and we would redeem our Public Shares and liquidate.

We have entered into a Business Combination Agreement with Merlin, and our shareholders approved the Proposed Business Combination at the EGM held on March 12, 2026. However, in the unlikely scenario we do not complete the Proposed Business Combination and seek an alternative initial business combination opportunity, we may not be able to find a suitable target business and complete our initial business combination within the completion window. Our ability to complete our initial business combination may be negatively impacted by general market conditions, volatility in the capital and debt markets and the other risks described herein. If we have not completed our initial business combination within such time period, we will: (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter (and subject to lawfully available funds therefor), redeem the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account (which interest shall be net of taxes payable and up to $100,000 of interest to pay dissolution expenses), 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 our remaining shareholders and our board of directors, liquidate and dissolve, subject in each case to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to our rights, which will expire worthless if we fail to complete our initial business combination within the completion window.

We may decide not to extend the term we have to consummate our initial business combination, in which case we would redeem our Public Shares, and the Public Rights may be worthless.

We have until November 4, 2026 or until such earlier liquidation date as our board of directors may approve, to consummate our initial business combination. If we anticipate that we may be unable to consummate our initial business combination within such period, we may seek shareholder approval to amend our Articles to extend the date by which we must consummate our initial business combination. However, we may decide not to seek to extend the date by which we must consummate our initial business combination. If we do not seek to extend the date by which we must consummate our initial business combination, and we are unable to consummate our initial business combination within the applicable time period, we will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter (and subject to lawfully available funds therefor), redeem the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account (which interest shall be net of taxes payable, interest released to us for working capital purposes and up to $100,000 of interest to pay dissolution expenses), 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 our remaining shareholders and our board of directors, liquidate and dissolve, subject in each case to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. In such event, the Rights may be worthless.

If we seek shareholder approval of our initial business combination, our Sponsor, directors, executive officers, and their affiliates may elect to purchase Public Shares or Public Rights from Public Shareholders, which may influence a vote on a proposed business combination and reduce the public “float” of our Class A Ordinary Shares or Rights.

On March 12, 2026, we held an EGM for our shareholders to vote on the Proposed Business Combination. All proposals were approved by the requisite vote of the shareholders, and we expect to consummate the Proposed Business Combination on March 16, 2026. Prior to the EGM, none of the Sponsor, our directors, officers or affiliates purchased additional securities on the open market. In the unlikely scenario we do not consummate the Proposed Business Combination and instead pursue an alternative initial business combination opportunity, at any time prior to the extraordinary general meeting held to approve an initial business combination, if we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, the Sponsor or our directors, managers, officers, advisors and their affiliates may purchase Public Shares or Public Rights in privately negotiated transactions or in the open market, or take other actions to incentivize non-redemption, although they are under no obligation to do so. There is no limit on the number of Public Shares or Public Rights that such persons may purchase in such transactions, subject to compliance with applicable law and Nasdaq rules. However, other than as expressly stated herein, they have no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions. None of the funds in the Trust Account will be used to purchase Public Shares or Public Rights in such transactions. Such purchases may include a contractual acknowledgment that such shareholder, although still the record holder of our securities, is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights. In the event that the Sponsor or our directors, managers, officers, advisors and their affiliates purchase shares in privately negotiated transactions from Public Shareholders who have already elected to exercise their redemption rights, such selling shareholders would be required to revoke their prior elections to redeem their shares.

The purpose of any such transactions could be to (1) increase the likelihood of obtaining the shareholder approval of the proposed business combination, (2) reduce the amount of redemptions, or (3) reduce the number of Public Rights outstanding. Any such purchases of our securities may result in the completion of the proposed business combination that may not otherwise have been possible.

In addition, if such purchases are made, the public “float” of our securities may be reduced and the number of beneficial holders of our securities may be reduced, which may make it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange.

The Sponsor or our directors, managers, officers, advisors and their affiliates will be restricted from making purchases of shares if the purchases would violate Section 9(a)(2) or Rule 10b-5 of the Exchange Act. Any such purchases will be reported pursuant to Section 13 and Section 16 of the Exchange Act to the extent such purchasers are subject to such reporting requirements. Additionally, in the event the Sponsor, the Company’s or the target’s directors, managers, officers, advisors and their affiliates were to purchase Public Shares or Public Rights, such purchases would be structured in compliance with the requirements of Rule 14e-5 under the Exchange Act including, in pertinent part, through adherence to the following:

If a shareholder fails to receive notice of our offer to redeem our Public Shares in connection with our initial business combination, or fails to comply with the procedures for submitting or tendering its shares, such shares may not be redeemed.

We will comply with the proxy rules or tender offer rules, as applicable, when conducting redemptions in connection with our initial business combination. Despite our compliance with these rules, if a shareholder fails to receive our proxy materials or tender offer documents, as applicable, such shareholder may not have become aware (whether in connection with the Proposed Business Combination or, if we do not consummate the Proposed Business Combination, any alternative initial business combination opportunity) of the opportunity to redeem its shares. In addition, proxy materials or tender offer documents, as applicable, that we will furnish to holders of our Public Shares in connection with our initial business combination will describe the various procedures that must be complied with in order to validly tender or submit Public Shares for redemption. For example, we intend to require our public shareholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name,” to, at the holder’s option, either deliver their share certificates to our transfer agent, or to deliver their shares to our transfer agent electronically prior to the date set forth in the proxy materials or tender offer documents, as applicable. In the case of proxy materials, this date may be up to two business days prior to the scheduled vote on the proposal to approve the initial business combination. In addition, if we conduct redemptions in connection with a shareholder vote, we intend to require a public shareholder seeking redemption of its Public Shares to also submit a written request for redemption to our transfer agent two business days prior to the scheduled vote in which the name of the beneficial owner of such shares is included. In the event that a shareholder fails to comply with these or any other procedures disclosed in the proxy or tender offer materials, as applicable, its shares may not be redeemed.

You will not be entitled to protections normally afforded to investors of other blank check companies subject to Rule 419 of the Securities Act.

Since the net proceeds of the IPO and the sale of the Private Placement Units are intended to be used to complete one or more initial business combinations with a target business or businesses, we may be deemed to be a “blank check” company under the United States securities laws. We have entered into the Business Combination Agreement with Merlin as our proposed initial business combination; however, we are exempt from rules promulgated by the SEC to protect investors in blank check companies, such as Rule 419. Accordingly, investors will not be afforded the benefits or protections of those rules. Among other things, this means we will have a longer period of time to complete our initial business combinations than do companies subject to Rule 419. Moreover, if the IPO had been subject to Rule 419, that rule would prohibit the release of any interest earned on funds held in the Trust Account to us unless and until the funds in the Trust Account were released to us or in connection with our completion of an initial business combination.

We sought shareholder approval of the Proposed Business Combination at the EGM held on March 12, 2026 and did not conduct redemptions pursuant to the tender offer rules; if we do not consummate the Proposed Business Combination and instead pursue an alternative initial business combination opportunity and seek shareholder approval thereof and do not conduct redemptions pursuant to the tender offer rules, and if you or a “group” of shareholders are deemed to hold in excess of 15% of our Class A Ordinary Shares, you will lose the ability to redeem all such shares in excess of 15% of our Class A Ordinary Shares.

We sought shareholder approval of the Proposed Business Combination at the EGM held on March 12, 2026 and did not conduct redemptions in connection with the Proposed Business Combination pursuant to the tender offer rules; if we do not consummate the Proposed Business Combination and instead pursue an alternative initial business combination opportunity and seek shareholder approval thereof and do not conduct redemptions in connection with such alternative initial business combination pursuant to the tender offer rules, our Articles 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 Exchange Act), will be restricted from seeking redemption rights with respect to more than an aggregate of 15% of the shares sold in the IPO, which we refer to as the “Excess Shares”, without our prior consent. However, we would not be restricting our shareholders’ ability to vote all of their shares (including Excess Shares) for or against our initial business combination. Your inability to redeem the Excess Shares will reduce your influence over our ability to complete our initial business combination and you could suffer a material loss on your investment in us if you sell Excess Shares in open market transactions. Additionally, you will not receive redemption distributions with respect to the Excess Shares if we complete our initial business combination. And as a result, you will continue to hold that number of shares exceeding 15% and, in order to dispose of such shares, would be required to sell your shares in open market transactions, potentially at a loss.

Because of our limited resources and the significant competition for business combination opportunities, it may be more difficult for us to complete our initial business combination. If we are unable to complete our initial business combination, our public shareholders may receive only their pro rata portion of the funds in the Trust Account that are available for distribution to public shareholders.

We have entered into a Business Combination Agreement with Merlin, and the shareholders approved the Proposed Business Combination at the EGM held on March 12, 2026. However, if we do not complete the Proposed Business Combination and seek an alternative initial business combination opportunity, we expect to encounter competition from other entities having a business objective similar to ours, including private investors (which may be individuals or investment partnerships), other blank check companies and other entities, domestic and international, competing for the types of businesses we intend to acquire. Many of these individuals and entities are well-established and have extensive experience in identifying and effecting, directly or indirectly, acquisitions of companies operating in or providing services to various industries. Many of these competitors possess similar or greater technical, human and other resources to ours or more local industry knowledge than we do and our financial resources will be relatively limited when contrasted with those of many of these competitors. While we believe there are numerous target businesses we could potentially acquire with the net proceeds of the IPO and the sale of the Private Placement Units if the Proposed Business Combination does not close, our ability to compete with respect to the acquisition of certain target businesses that are sizable will be limited by our available financial resources. This inherent competitive limitation gives others an advantage in pursuing the acquisition of certain target businesses. Furthermore, we are obligated to offer holders of our Public Shares the right to redeem their shares for cash at the time of our initial business combination in conjunction with a shareholder vote or via a tender offer. Target companies will be aware that this may reduce the resources available to us for our initial business combination. Any of these obligations may place us at a competitive disadvantage in successfully negotiating a business combination. If we are unable to complete our initial business combination, our public shareholders may receive only their pro rata portion of the funds in the Trust Account that are available for distribution to Public Shareholders, and our Rights will expire worthless.

If the net proceeds of the IPO and simultaneous private placement not being held in the Trust Account are insufficient to allow us to operate until the completion of the Business Combination, we will depend on loans from the Sponsor or management team to complete the Business Combination.

As of December 31, 2025, we had $703,596 held outside of the Trust Account and a working capital deficit of $2,416,322. While we believe that the funds available to us outside of the Trust Account will be sufficient to allow us to operate until at least the completion of the Proposed Business Combination on March 16, 2026, or, if we do not consummate the Proposed Business Combination, until the end of the completion window, we cannot assure you that our estimate is accurate. None of the Sponsor, members of our management team nor any of their affiliates is under any obligation to advance funds to us in such circumstances. Any such advances would be repaid only from funds held outside the Trust Account or from funds released to us upon the Closing. Up to $1,500,000 of any loans may be convertible into Private Placement Units at a price of $10.00 per Private Placement Unit at the option of the lender. Prior to the closing of the Proposed Business Combination, we do not expect to seek loans from parties other than the Sponsor or an affiliate of the Sponsor as we do not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our Trust Account. If we are unable to complete the Business Combination within the required time period because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the Trust Account. Consequently, our Public Shareholders may only receive an estimated $10.00 per share, or possibly less, on our redemption of our Public Shares. The Public Rights may expire worthless.

If third parties bring claims against us, the proceeds held in the Trust Account could be reduced and the per-share redemption amount received by shareholders may be less than $10.00 per share.

Our placing of funds in the Trust Account may not protect those funds from third party claims against us. Although we seek to have all vendors, service providers, prospective target businesses and other entities with which we do business execute agreements waiving any right, title, interest or claim of any kind in or to any monies held in the Trust Account for the benefit of the Public Shareholders, such parties may not execute such agreements, or even if they execute such agreements they may not be prevented from bringing claims against the Trust Account, including, but not limited to, fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain advantage with respect to a claim against our assets, including the funds held in the Trust Account. If any third party refuses to execute an agreement waiving such claims to the monies held in the Trust Account, our management will consider whether competitive alternatives are reasonably available to us and will only enter into an agreement with such third party if management believes that such third party’s engagement would be advisable and in the best interests of the Company under the circumstances. WithumSmith+Brown PC, our independent registered public accounting firm, and the underwriters of the IPO will not execute agreements with the Company waiving such claims to the monies held in the Trust Account.

Examples of possible instances where we may engage a third party that refuses to execute a waiver include the engagement of a third-party consultant whose particular expertise or skills are believed by management to be significantly superior to those of other consultants that would agree to execute a waiver or in cases where management is unable to find a service provider willing to execute a waiver. In addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements with us and will not seek recourse against the Trust Account for any reason. Upon redemption of the Public Shares, if we are unable to complete the Proposed Business Combination or another initial business combination within the prescribed timeframe, or upon the exercise of a redemption right in connection with the Proposed Business Combination or another initial business combination, we will be required to provide for payment of claims of creditors that were not waived that may be brought against us within the 10 years following redemptions of the Public Shares. Accordingly, the per-share redemption amount received by Public Shareholders could be less than the $10.00 per Public Share initially held in the Trust Account, due to claims of such creditors. Pursuant to the Letter Agreement, the Sponsor has agreed that it will be liable to us if and to the extent any claims by a third party for services rendered or products sold to us (except for our independent auditors), or a prospective target business with which we have 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) $10.00 per Public Share and (ii) the actual amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account, if less than $10.00 per Public Share due to reductions in the value of the trust assets, less taxes payable, provided that such liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights to the monies held in the Trust Account (whether or not such waiver is enforceable) nor will it apply to any claims under our indemnity of the underwriters of the IPO against certain liabilities, including liabilities under the Securities Act. However, we have not asked the Sponsor to reserve for such indemnification obligations, nor has it independently verified whether the Sponsor has sufficient funds to satisfy its indemnity obligations. Therefore, we cannot assure you that the Sponsor would be able to satisfy those obligations. As a result, if any such claims were successfully made against the Trust Account, the funds available for the Proposed Business Combination or another initial business combination and redemptions could be reduced to less than $10.00 per Public Share. In such event, we may not be able to complete the Proposed Business Combination or another initial business combination, and you would receive such lesser amount per share in connection with any redemption of your Public Shares. None of our officers or directors will indemnify us for claims by third parties including, without limitation, claims by vendors and prospective target businesses.

Our directors may decide not to enforce the indemnification obligations of the Sponsor, resulting in a reduction in the amount of funds in the Trust Account available for distribution to the Public Shareholders.

In the event that the proceeds in the Trust Account are reduced below the lesser of: (i) $10.00 per Public Share; and (ii) the actual amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account if less than $10.00 per share due to reductions in the value of the trust assets, in each case less taxes payable, and the Sponsor asserts that it is unable to satisfy its obligations or that it has no indemnification obligations related to a particular claim, our independent directors would determine whether to take legal action against the Sponsor to enforce its indemnification obligations. While we currently expect that our independent directors would take legal action on our behalf against the Sponsor to enforce the Sponsor’s indemnification obligations to us, it is possible that our independent directors in exercising their business judgment and subject to their fiduciary duties may choose not to do so in any particular instance if, for example, the cost of such legal action is deemed by the independent directors to be too high relative to the amount recoverable or if the independent directors determine that a favorable outcome is not likely. If our independent directors choose not to enforce these indemnification obligations, the amount of funds in the Trust Account available for distribution to our Public Shareholders may be reduced below $10.00 per share.

We may not have sufficient funds to satisfy indemnification claims of our Sponsor, directors and officers.

We have agreed to indemnify our Sponsor, officers and directors to the fullest extent permitted by law, including for any liability incurred in their capacities as such, except through their own actual fraud, willful default or willful neglect. However, our Sponsor, officers and directors have agreed to waive any right, title, interest or claim of any kind in or to any monies in the Trust Account and to not seek recourse against the Trust Account for any reason whatsoever. Accordingly, any indemnification provided will be able to be satisfied by us only if (i) we have sufficient funds outside of the Trust Account or (ii) we consummate an initial business combination. Our obligation to indemnify our officers and directors may discourage shareholders from bringing a lawsuit against our Sponsor, officers or directors for breach of their fiduciary duty. These provisions also may have the effect of reducing the likelihood of derivative litigation against our officers and directors, even though such an action, if successful, might otherwise benefit us and our shareholders. Furthermore, a shareholder’s investment may be adversely affected to the extent we pay the costs of settlement and damage awards against our officers and directors pursuant to these indemnification provisions.

If, before distributing the proceeds in the Trust Account to our Public Shareholders, we file a bankruptcy or insolvency petition or an involuntary bankruptcy or insolvency petition is filed against us that is not dismissed, the claims of creditors in such proceeding may have priority over the claims of our shareholders and the per-share amount that would otherwise be received by our shareholders in connection with our liquidation may be reduced.

In the unlikely scenario we do not consummate the Proposed Business Combination and instead pursue an alternative initial business combination opportunity, if, before distributing the proceeds in the Trust Account to the Public Shareholders, the Company files a bankruptcy or insolvency petition or an involuntary bankruptcy or insolvency petition is filed against it that is not dismissed, the proceeds held in the Trust Account could be subject to applicable bankruptcy law, and may be included in the Company’s bankruptcy estate and subject to the claims of third parties with priority over the claims of our shareholders. To the extent any bankruptcy claims deplete the Trust Account, the per-share amount that would otherwise be received by our shareholders in connection with our liquidation may be reduced.

If, after we distribute the proceeds in the Trust Account to our Public Shareholders, we file a bankruptcy or insolvency petition or an involuntary bankruptcy or insolvency petition is filed against us that is not dismissed, a bankruptcy or insolvency court may seek to recover such proceeds, and the members of our board of directors may be viewed as having breached their fiduciary duties to us or our creditors, thereby exposing the members of the board of directors and us to claims of punitive damages.

If, after we distribute the proceeds in the Trust Account to our Public Shareholders, we file a bankruptcy or insolvency petition or an involuntary bankruptcy or insolvency petition is filed against us that is not dismissed, any distributions received by shareholders could be viewed under applicable debtor/creditor and/or bankruptcy laws as either a “preferential transfer” or a “fraudulent conveyance”. As a result, a bankruptcy or insolvency court could seek to recover some or all amounts received by our shareholders. In addition, the board of directors may be viewed as having breached its fiduciary duty to us or our creditors and/or having acted in bad faith, thereby exposing itself and us to claims of punitive damages, by paying Public Shareholders from the Trust Account prior to addressing the claims of creditors.

Our shareholders may be held liable for claims by third parties against the Company to the extent of distributions received by them upon redemption of their shares.

We do not expect to enter into an insolvent liquidation given that the Proposed Business Combination has received requisite shareholder approval and is expected to be consummated on March 16, 2026; however, in the unlikely scenario we do not consummate the Proposed Business Combination and instead pursue an alternative initial business combination opportunity, the following risks may apply. If, in such alternative scenario, we are forced to enter into an insolvent liquidation, any distributions received by shareholders could be viewed as an unlawful payment if it were proved that immediately following the date on which the distribution was made, the Company was unable to pay its debts as they fall due in the ordinary course of business. As a result, a liquidator could seek to recover some or all amounts received by our shareholders. Furthermore, our directors may be viewed as having breached their fiduciary duties to us or our creditors and/or may have acted in bad faith, thereby exposing themselves and the Company to claims, by paying Public Shareholders from the Trust Account prior to addressing the claims of creditors. We cannot assure you that claims will not be brought against it for these reasons. The Company and our directors and officers who knowingly and willfully authorized or permitted any distribution to be paid out of the our share premium account while it was unable to pay its debts as they fall due in the ordinary course of business would be guilty of an offense and may be liable to a fine of $18,293 and to imprisonment for five years in the Cayman Islands.

If we are deemed to be an investment company under the Investment Company Act, we may be required to institute burdensome compliance requirements and our activities may be restricted, which may make it difficult for us to complete the Proposed Business Combination or another initial business combination or force us to abandon our efforts to complete an initial business combination.

If we are deemed to be an investment company under the Investment Company Act, our activities may be restricted, including:

In addition, we may have imposed upon us burdensome requirements, including:

In order not to be regulated as an investment company under the Investment Company Act, unless we can qualify for an exclusion, we must ensure that we are engaged primarily in a business other than investing, reinvesting or trading in securities and that our activities do not include investing, reinvesting, owning, holding or trading “investment securities” constituting more than 40% of our assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis. Our business is to identify and complete an initial business combination, such as the Proposed Business Combination. We do not plan to buy businesses or assets with a view to resale or profit from their resale. We do not plan to buy unrelated businesses or assets or to be a passive investor.

In 2024, the SEC provided guidance that the determination of whether a SPAC, like us, is an “investment company” under the Investment Company Act is a facts and circumstances determination requiring individualized analysis and depends on a variety of factors, including a SPAC’s duration, asset composition, business purpose and activities. When applying these factors to us we do not believe that our principal activities will subject us to the Investment Company Act. To this end, we were formed for the purpose of completing an initial business combination with one or more businesses or entities, such as the Proposed Business Combination with Merlin. Since our inception, our business has been and will continue to be focused on identifying and completing the Business Combination with Merlin, or another initial business combination. Further, we do not plan to buy businesses or assets with a view to resale or profit from their resale and we do not plan to buy unrelated businesses or assets or to be a passive investor. In addition, the proceeds held in the Trust Account were invested in United States “government securities” within the meaning of Section 2(a)(16) of the Investment Company Act having a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act which invest only in direct U.S. government treasury obligations. By restricting the investment of the proceeds in this manner, and by focusing our directors’ and officers’ time toward, and operating our business for the purpose of, acquiring and growing businesses for the long term (rather than buying and selling businesses in the manner of a merchant bank or private equity fund or investing in assets for the purpose of achieving investment returns on such assets), we intend to avoid being deemed an “investment company” within the meaning of the Investment Company Act. Further, investing in our securities is not intended for persons who are seeking a return on investments in government securities or investment securities. Instead, the Trust Account is intended as a holding place for funds pending the earliest to occur of either: (i) the completion of our initial business combination; (ii) the redemption of any Public Shares properly submitted in connection with a shareholder vote to amend the our Articles (A) to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our Public Shares if we do not complete our initial business combination within the completion window or (B) with respect to any other material provisions relating to shareholders’ rights or pre-initial business combination activity; or (iii) absent an initial business combination within the completion window, our return of the funds held in the Trust Account to our Public Shareholders as part of our redemption of the Public Shares subject to applicable law and our Articles. If we do not invest the proceeds as described above, we may be deemed to be subject to the Investment Company Act.

If we were deemed to be an investment company for purposes of the Investment Company Act, we would need to register as such under the Investment Company Act and compliance with these additional regulatory burdens would require additional expenses for which we have not allotted funds and may hinder our ability to complete the Business Combination or any other initial business combination. In the unlikely scenario we do not consummate the Proposed Business Combination and instead pursue an alternative initial business combination opportunity, we may also be forced to abandon our efforts to complete an initial business combination and instead be required to liquidate the Trust Account. In which case, our investors would not be able to realize the potential benefits of owning shares in a successor operating business, including the potential appreciation in the value of our securities following such a transaction, and our Rights would expire worthless. For illustrative purposes, in connection with the liquidation of our Trust Account, our Public Shareholders may receive only approximately $10.49 per Public Share, which is based on estimates as of December 31, 2025, or less in certain circumstances, and our Rights may expire and become worthless. Further, under the subjective test of a “investment company” pursuant to Section 3(a)(1)(A) of the Investment Company Act, even if the funds deposited in the Trust Account were invested in the assets discussed above, there is a risk that we could be deemed an investment company and subject to the Investment Company Act based on the length of time such funds are invested in such assets.

The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with our audited financial statements and the notes related thereto which are included in “Item 8. Financial Statements and Supplementary Data” of this Annual Report. 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, including those set forth under “Special Note Regarding Forward-Looking Statements,” “Item 1A. Risk Factors” and elsewhere in this Annual Report.

We may seek to extend the completion window consistent with applicable laws, regulations and stock exchange rules by amending our Articles. Any such amendment would require the approval of our Public Shareholders, who will be provided the opportunity to redeem all or a portion of their Public Shares in connection with the vote on such approval. Such redemptions will decrease the amount held in our Trust Account and our capitalization, and may affect their ability to maintain our listing on Nasdaq. We do not expect to do so prior to the anticipated consummation of the Proposed Business Combination on March 16, 2026. In addition, the Nasdaq Rules currently require SPACs (such as us) to complete our initial Business Combination in accordance with the Nasdaq 36-Month Requirement. If we do not meet the Nasdaq 36-Month Requirement, our securities will likely be subject to a suspension of trading and delisting from Nasdaq.

Recent Developments

Amendments to our Articles

On October 21, 2025, with the requisite approvals of the shareholders of the Company, our Articles were amended to (i) change the name of the Company from “Bleichroeder Acquisition Corp. I” to “Inflection Point Acquisition Corp. IV” and (ii) to permit the Company to consummate the redemption of Public Shares at an earlier time in connection with the commencement of the procedures to consummate a proposed initial business combination, as opposed to upon consummation of the proposed initial business combination, if the board of directors determines it is desirable to facilitate the consummation of such initial business combination.

Management Changes

Effective July 2025, (i) Marcello Padula resigned as Chief Financial Officer, (ii) Michael Blitzer, Robert Folino and Kevin Shannon were appointed as President and Chief Executive Officer, Chief Financial Officer, and Chief Operating Officer, respectively, (iii) Nazim Cetin and Pierre Weinstein resigned from the Company’s board of directors the audit committee of the board and (iv) the board of directors appointed incumbent directors Joseph Samuels and Antoine Theysset to the audit committee. Mr. Blitzer was also appointed to the board. In connection with their appointments, each of Mr. Blitzer, Mr. Folino and Mr. Shannon signed a joinder to the Letter Agreement, pursuant to which, among other things, the signatories agreed to waive certain redemption rights and to vote any ordinary shares of Company they hold in favor of an initial business combination. Each of Mr. Blitzer, Mr. Folino and Mr. Shannon also entered into a standard indemnification agreement with the Company.

Mr. Blitzer and Mr. Shannon are affiliates of Inflection Point Fund I LP (“Inflection Point Fund”), which is a member of our Sponsor.

Proposed Business Combination

On October 13, 2025, the Company entered into the Business Combination Agreement, by and among the Company, Merger Sub, and Merlin, pursuant to which, among other things and subject to the terms and conditions therein, Merger Sub will merge with and into Merlin, with Merlin continuing as the surviving company. The combined company’s business will continue to operate through Merlin and its subsidiaries. In connection with the closing of the Proposed Business Combination (the “Closing”), the Company will change its name to Merlin, Inc.

The Domestication

The Company will, subject to obtaining the required shareholder approvals change its jurisdiction of incorporation by deregistering from the Register of Companies in the Cayman Islands as a Cayman Islands exempted company by way of continuation out of the Cayman Islands and continuing and domesticating as a corporation incorporated under the laws of the State of Delaware. In connection with the completion of the Proposed Business Combination, the Company will provide the Public Shareholders the opportunity to redeem their Public Shares on the terms and conditions set forth in the Business Combination Agreement and the Company’s governing documents. The Company will complete the Redemption of properly tendered Public Shares at least one day prior to the Domestication.

Subject to the satisfaction or waiver of the conditions of the Business Combination Agreement, including approval of our shareholders, which was received in connection with the EGM held on March 12, 2026, (a) immediately prior to the Domestication, pursuant to the Sponsor Support Agreement, by and among the Company, Merlin, the Sponsor, and Inflection Point Fund, the Class B Shareholders, will elect to convert each Founder Share, on a one-for-one basis, into a Class A Ordinary Share; (b) in connection with the Domestication, (i) each of the then issued and outstanding Class A Ordinary Shares will convert automatically, on a one-for-one basis, into a share of New Merlin Common Stock; (ii) each of the then issued and outstanding Rights will convert automatically into a Post-Domestication Right; and (iii) each of the then issued and outstanding Units will convert automatically into a unit of Post-Domestication Inflection Point, consisting of one share of New Merlin Common Stock and one Post-Domestication Right.

The Merger and Consideration

Upon the terms and subject to the satisfaction or waiver of the conditions of the Business Combination Agreement, immediately prior to the Effective Time:

In connection with the transactions contemplated by the Business Combination Agreement, on July 2, 2025, and on August 13, 2025, Merlin entered into the Signing Pre-Funded PIPE Agreements with the Pre-Funded Investors. Pursuant to the Signing Pre-Funded PIPE Agreements, the Pre-Funded Investors agreed, among other things, to purchase, and Merlin issued and sold, an aggregate of approximately $78 million of Pre-Funded Convertible Notes and Pre-Funded Warrants, substantially concurrently with the execution and delivery of the Business Combination Agreement.

On November 17, 2025, Merlin and one of the Pre-Funded Investors entered into the Post-Signing Pre-Funded SPA, pursuant to which such Pre-Funded Investor purchased for approximately $9.3 million an additional Pre-Funded Convertible Note with a principal amount of approximately $10.9 million and a Pre-Funded Warrant, on the same terms and conditions as the Signing Pre-Funded SPA.

Pursuant to the Business Combination Agreement, the Aggregate Consideration to be paid to the Merlin Equity Holders (other than the holders of the Pre-Funded Convertible Notes and the Pre-Funded Warrants in respect of those securities) in, or in connection with, the Merger shall be the number of shares of New Merlin Common Stock equal to the quotient of: (a) $800,000,000, divided by (b) the price at which each Public Share may be redeemed in connection with the EGM.

The Convertible Note Consideration shall be a number of shares of Series A Preferred Stock equal to the quotient, rounded up to the nearest whole share, of (i) the total outstanding principal and accrued and unpaid interest on each Pre-Funded Convertible Note as of one day prior to the Closing, divided by (ii) $10.20 (with respect to the Pre-Funded Convertible Notes sold pursuant to the Pre-Funded NPAs), as may be adjusted pursuant to the terms and conditions of such Pre-Funded Convertible Notes, or $12.00 (with respect to the Pre-Funded Convertible Notes sold pursuant to the Pre-Funded SPAs).

The Pre-Funded Warrant Consideration shall be one or more New Merlin Series A Warrants equal to the quotient of (i) the aggregate exercise price of such Pre-Funded Warrant immediately prior to the Effective Time, divided by (ii) $12.00.

Upon the terms and subject to the satisfaction or waiver of the conditions of the Business Combination Agreement, at the Effective Time:

Closing Conditions

The obligations of the Company and Merlin to consummate the Proposed Business Combination are subject to the satisfaction or waiver of other customary closing conditions, including without limitation: (i) the adoption and/or approval, as applicable, by the Company’s shareholders of the Transaction Proposals, which we received pursuant to the EGM held on March 12, 2026, (ii) the approval of the Business Combination Agreement and the Proposed Business Combination (including the Merger) by the affirmative vote or written consent of the Merlin Stockholders, pursuant to the terms and in accordance with satisfaction of the conditions of the organizational documents of Merlin and applicable law, which was received on February 12, 2026, (iii) no adverse law or order, (iv) the registration statement covering the Proposed Business Combination becoming effective, in connection with the Registration Statement was declared effective by the SEC on February 12, 2026, (v) approval of the listing of the New Merlin Common Stock on the Nasdaq Stock Market LLC, subject to satisfaction of the round lot holders requirement for initial listing, (vi) the accuracy of the representations and warranties and the performance of the covenants and agreements of each of the parties to the Business Combination Agreement, in each case subject to certain qualifiers, (vii) with respect to the Proposed Business Combination, the expiration of all waiting periods (and any extensions thereof) under the Hart-Scott-Rodino Act, in connection with which the waiting period with respect to the Proposed Business Combination expired on October 30, 2025, (viii) the completion of the Domestication, and (ix) duly executed pay-off letters certifying certain indebtedness of Merlin and its subsidiaries, as specified in the Business Combination Agreement, shall have been paid off, to the extent it is paid off pursuant to the Business Combination Agreement.

Concurrently with the execution of the Business Combination Agreement, the Company entered into the Sponsor Support with the Restricted Holders, pursuant to which each Restricted Holder agreed to, among other things, (i) vote in favor of adoption of the Transaction Proposals, (ii) vote against any Alternative Transaction (as defined in the Business Combination Agreement) and any merger agreement or merger other than the Transaction Proposals, the Business Combination Agreement and the Proposed Business Combination; (iii) vote against any change in the business, management, or board of directors of the Company (other than in connection with the Transaction Proposals or pursuant to the Business Combination Agreement or ancillary agreements) and (iv) vote against any proposal, action or agreement that would (A) impede, interfere, frustrate, prevent or nullify any provision of the Sponsor Support Agreement, the Business Combination Agreement or the Proposed Business Combination, (B) result in a breach in any respect of any covenant, representation, warranty or any other obligation or agreement of the Company under the Business Combination Agreement, (C) result in any of the closing conditions of the Business Combination Agreement not being fulfilled, (D) result in a breach of any covenant, representation or warranty or other obligation or agreement of such Restricted Holder contained in the Sponsor Support Agreement or (E) change in any manner the dividend policy or capitalization of, including the voting rights of any class of capital stock of, the Company. In addition, pursuant to the Sponsor Support Agreement, each Restricted Holder, severally, agreed to waive, subject to the consummation of the Proposed Business Combination, any and all anti-dilution rights with respect to the rate that the Class B Ordinary Shares convert into the Class A Ordinary Shares in connection with the transactions contemplated by the Business Combination Agreement.

Concurrently with the execution of the Business Combination Agreement, the Merlin Stockholders and Merlin entered into the Stockholder Voting and Support Agreement, pursuant to which Merlin Stockholders have agreed to, among other things, vote (or act by written consent) (a) to approve and adopt the Business Combination Agreement and the consummation of the Proposed Business Combination; (b) against any Alternative Transaction or any proposal relating to an Alternative Transaction; (c) against any merger agreement or merger (other than the Business Combination Agreement and the Proposed Business Combination), consolidation, combination, sale of substantial assets, reorganization, recapitalization, dissolution, liquidation or winding up of or by Merlin; (d) against any change in the business or board of directors of Merlin (other than pursuant to the Business Combination Agreement or the Ancillary Documents (as defined in the Business Combination Agreement)); (e) against any proposal, action or agreement that would (A) impede, interfere, frustrate, prevent or nullify any provision of the Stockholder Voting and Support Agreement, the Business Combination Agreement or the Proposed Business Combination, (B) result in a breach in any respect of any covenant, representation, warranty or any other obligation or agreement of Merlin under the Business Combination Agreement, (C) result in any of the closing conditions of the Business Combination Agreement not being fulfilled, (D) result in a breach of any covenant, representation or warranty or other obligation or agreement of such Merlin Stockholder contained in the Stockholder Voting and Support Agreement or (E) change in any manner the dividend policy or capitalization of, including the voting rights of any class of capital stock of, Merlin and (f) to convert all outstanding shares of preferred stock of Merlin into Merlin Common Stock as of immediately prior to the Effective Time, conditioned upon and subject to the closing of the Proposed Business Combination, in accordance with the organizational documents of Merlin.

Pursuant to the Stockholder Voting and Support Agreement, until the earliest of the Closing, termination of the Business Combination Agreement or the liquidation of Merlin, no Merlin Stockholder shall (i) sell, offer to sell, contract or agree to sell, hypothecate, pledge, grant any option to purchase or otherwise dispose of or agree to dispose of, directly or indirectly, any Subject Securities (as defined in the Stockholder Voting and Support Agreement), (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any Subject Securities without the prior written consent of Merlin and the Company, unless such transfer is deemed a Permitted Transfer (as defined in the Stockholder Voting and Support Agreement).

In addition, pursuant to the Stockholder Voting and Support Agreement, each Merlin Stockholder has agreed not to commence, join in, facilitate, assist or encourage, and has agreed to take all actions necessary to opt out of any class in any class action with respect to, any claim, derivative or otherwise, against the Company, Merlin or any of their respective successors or directors, (a) challenging the validity of, or seeking to enjoin the operation of, any provision of the Stockholder Voting and Support Agreement or (b) alleging a breach of any fiduciary duty of any person in connection with the evaluation, negotiation or entry into the Stockholder Voting and Support Agreement, the Business Combination Agreement or the Proposed Business Combination. Each Merlin Stockholder has also waived and agreed not to exercise any rights of appraisal or rights to dissent from the Proposed Business Combination that they may have in respect of the Subject Securities.

In connection with the transactions contemplated by the Business Combination Agreement, on August 13, 2025, the Company, Merlin and the Closing PIPE Investor entered into the Initial Series A SPA. Pursuant to the Series A SPA, the Closing PIPE Investor agreed, among other things, to purchase, at Closing, 4,901,961 shares of Series A Preferred Stock, having the rights, preferences and privileges set forth in the Certificate of Designation and a New Merlin Series A Warrant, for an aggregate purchase price of $50 million. Each share of Series A Preferred Stock will have a stated value of $12.00. On November 17, 2025, we and Merlin entered into Amendment No. 1 to the Initial Series A SPA, pursuant to which the Closing PIPE Investor agreed to increase its investment to $100 million, for which it will receive 9,803,922 shares of Series A Preferred Stock (at a price of $10.20 per share) and a New Merlin Series A Warrant to purchase a number of shares of New Merlin Common Stock equal to the number of shares of New Merlin Common Stock into which such shares of Series A Preferred Stock are initially convertible.

Additionally, on November 17, 2025, we and Merlin also entered into the Additional Series A SPAs, with the Additional Closing PIPE Investors, pursuant to which, among other things, the Additional Closing PIPE Investors agreed to purchase, and we agreed to sell, an aggregate of 1,666,668 shares of Series A Preferred Stock (at a price of $12.00 per share) and Upsized New Merlin Series A Warrants in a private placement, on substantially the same terms as the Closing PIPE Subscription Agreement, for an aggregate purchase price of $20 million.

For the year ended December 31, 2025, we had a net income of $6,008,347, which consists of interest earned on investments held in Trust Account of $10,479,542 and interest earned on bank account of $56,002, partially offset by general and administrative expenses of $3,857,197 and compensation expense of $670,000.

For the year ended December 31, 2025, cash used in operating activities was $1,328,713. Net income of $6,008,347 was affected by interest earned on investments held in Trust Account of $10,479,542 and compensation expenses of $670,000. Changes in operating assets and liabilities provided $2,472,482 of cash for operating activities.

In connection with the Company’s assessment of going concern considerations in accordance with ASC 205-40, “Presentation of Financial Statements--Going Concern,” as of December 31, 2025, the Company may need to raise additional capital through loans or additional investments from its Sponsor, shareholders, officers, directors, or third parties. The Company’s officers, directors and Sponsor 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, to meet the Company’s working capitals needs. Accordingly, the Company may not be able to obtain additional financing. If the Company is unable to raise additional capital, it may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing operations, suspending the pursuit of a potential transaction, and reducing overhead expenses. The Company cannot provide any assurance that new financing will be available to it on commercially acceptable terms, if at all.

Additionally, if an initial business combination is not consummated by the end of the completion window, currently November 4, 2026, there will be a mandatory liquidation and subsequent dissolution of the Company. No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to liquidate after the completion window. The Company’s liquidity condition and mandatory liquidation within one year of the issuance of these financial statements raise substantial doubt about the Company’s ability to continue as a going concern. Management plans to address this uncertainty through the Proposed Business Combination, and if the Proposed Business Combination is not consummated, any other alternative initial business combination opportunity we pursue. However, there can be no assurance that the Company will be able to consummate any initial business combination by the end of the completion window.

To mitigate the risk that we might be deemed to be an investment company for purposes of the Investment Company Act, which risk increases the longer that we hold investments in the Trust Account, we may, at any time, (based on our management team’s ongoing assessment of all factors related to our potential status under the Investment Company Act) instruct the trustee to liquidate the investments held in the Trust Account and instead to hold the funds in the Trust Account in cash or in an interest-bearing demand deposit account at a bank.

We depend on aircraft manufacturers and other third parties for proprietary technical data, interface specifications, and software necessary to integrate our autonomy systems onto their aircraft, and our access to this information may be limited, delayed, or withdrawn.

Integrating our autonomy software onto a given aircraft platform generally requires access to proprietary information controlled by the aircraft's manufacturer, including interface control documents, avionics and flight control software specifications, wiring and systems data, and in some cases source code or object code for systems our software must interface with. In many cases, a single manufacturer controls all of this information for a given aircraft type, and we have no alternative source for such information. Our ability to obtain this information, and the terms on which we obtain it, are governed by negotiated agreements, government contracting data rights frameworks, or the manufacturer's own discretion, none of which guarantee continued or timely access.

Our access to this data may be limited or withdrawn. Such limitations may occur if a manufacturer views our autonomy capabilities as competitive with its own current or future offerings, if commercial terms cannot be agreed, if a program contract or teaming arrangement terminates or is not renewed, or if the manufacturer becomes unable or unwilling to support integration work for other reasons. Because this data is often subject to export control restrictions (including ITAR and EAR) and, in government programs, to specific technical data rights allocations under DFARS or FAR, our access can also be affected by regulatory determinations outside our control or the manufacturer's control.

If we lose access to this information for any aircraft type on which we depend, we may be unable to complete, certify, maintain, or update our integration for that aircraft, which could delay or terminate programs, require costly and time-consuming redesign or reverse engineering efforts (which may themselves be legally or practically unavailable), and damage our relationships with customers who have selected that aircraft type. Our dependence on a limited number of manufacturers for this access also gives those manufacturers significant leverage over the commercial terms, timing, and scope of our integration work, which could materially adversely affect our business, financial condition, and results of operations.

•Personnel and training: We have hired and continue to hire personnel with public company accounting experience and are providing targeted training on internal control requirements, complex transaction accounting, and financial reporting obligations.

•Control design and implementation: We are implementing additional controls and processes designed to operate at a sufficient level of precision and frequency, and that appropriately evidence the performance of the control, particularly with respect to the accounting and reporting of revenue and non-routine, unusual, or complex transactions.

•Segregation of duties: We have begun to implement processes and controls to better identify and manage segregation of duties risks within our accounting and financial reporting functions.

•Systems and automation: We are evaluating system enhancements to reduce our reliance on manual processes in key areas of our financial close and reporting process.

•External advisor engagement: We have engaged an external advisor to assist with evaluating and documenting the design and operating effectiveness of our internal controls and to assist with remediation of identified deficiencies.

•Merlin Pilot Sale and Installation Fees: The anticipated revenue stream from the sale and installation of Merlin Pilot includes licensing or technology fees for the installation and implementation of our technology on an aircraft. This type of revenue would be incurred one time, would be non-recurring and would vary based on the aircraft type. Over time, we expect to be able to scale our engineering and technical installation and implementation capabilities to reduce costs and increase our margins on this type of revenue.

•Software Support Fees: The anticipated revenue stream from software support includes fees generated from providing ongoing technical and operational support to the Merlin Pilot. Under our business model, anticipated software license agreements would typically include a lifetime right of use and would not provide for any support or maintenance to be provided by the Company for the term of the agreement. However, we will offer these services to our customers for additional fees, which we intend to invoice either monthly or annually, depending on the agreement reached with each customer. As such, revenue incurred from support and maintenance will be categorized separately from the revenue originally incurred in selling and implementing the Merlin Pilot on each aircraft.

•Ancillary Fees: We also intend to offer ancillary services designed to meet the needs of our customers. In doing so, we intend to take advantage of the insights we are able to generate from the deployment of our technology to generate additional income with minimal incremental cost. The ancillary services we currently intend to offer include software upgrades and support, which are designed to enhance the autopilot experience, enhanced customer assistance and trainings and data insights that can further optimize routes and individual aircraft performance. We will continue to analyze the possibility of offering additional services as we scale, and the pricing of such services will depend on their widespread acceptance, regulatory approvals and the costs associated with offering such services.

Contract loss adjustments for the three months ended June 30, 2026 increased by $223 thousand as a result of the increase in the contract loss provision related to our USSOCOM Contract. The increase in the contract loss provision is the result of a revision of our estimate of total costs required to deliver on an additional phase of the contract.

Interest expense for the three months ended June 30, 2026 decreased by $1,342 thousand, or 100.0%, from $1,342 thousand in the three months ended June 30, 2025. This decrease is driven by the Company's 2024 LSA Loans which were outstanding during the three months ended June 30, 2025 but were extinguished at the time of the Merger and were not outstanding during the three months ended June 30, 2026.

Provision For Income Taxes

Provision for income tax expense for the three months ended June 30, 2026 increased by $124 thousand to $125 thousand compared to the three months ended June 30, 2025. This increase in provision for income taxes is primarily driven by an increase in foreign tax expenses for the Merlin Labs NZ Limited entity.

Comparison of the six months ended June 30, 2026 and 2025

Revenue

Revenue for the six months ended June 30, 2026 decreased by $780 thousand, or 19.6%, to $3,195 thousand compared to $3,975 thousand for the six months ended June 30, 2025. This decrease was primarily due to additional work being completed under our USSOCOM Contract during the six months ended June 30, 2025 and completion of a phase of that contract during the six months ended June 30, 2026.

Cost of Revenue

Cost of revenue for the six months ended June 30, 2026 decreased by $51 thousand, or 1.3%, to $3,729 thousand compared to $3,780 thousand for the six months ended June 30, 2025. This decrease was primarily the result of increased benefit recognized from the contract loss provision, as the related expenses were accelerated and previously recognized in prior periods, and was offset by higher subcontractor and internal costs incurred associated with delivery on our USSOCOM Contract as one phase of the project was completed during the six months ended June 30, 2026.

Contract Loss Adjustments

Contract loss adjustments for the six months ended June 30, 2026 increased to $2,229 thousand compared to none for the six months ended June 30, 2025, due to our revision of the estimate of total internal and subcontractor costs to be incurred in the delivery of a phase of the USSOCOM Contract which resulted in the recognition of a favorable adjustment to the contract loss provision of $2,229 thousand for the six months ended June 30, 2026. The favorable contract loss adjustment for the six months ended June 30, 2026 was offset by an additional loss provision of $502 related to the Company's revised estimate of the costs to complete a separate phase of the USSOCOM Contract.

Operating Expenses

Research and Development

Research and development expenses for the six months ended June 30, 2026 increased by $16,943 thousand, or 125.2% to $30,477 thousand compared to $13,534 thousand in the six months ended June 30, 2025, due to increasing personnel-related expenses from hiring of new and highly-skilled engineering talent, outsourcing to an increased number of subject matter experts identified specifically to solve unique engineering challenges, and increased equipment and material costs.

General and Administrative

General and administrative expenses for the six months ended June 30, 2026 increased by $21,342 thousand, or 256.3% to $29,668 thousand compared to $8,326 thousand in the six months ended June 30, 2025. This was primarily due to an increase in legal, accounting, and other consulting and corporate expenses as a result of the Merger and operating as a public company.

Selling and marketing expenses for the six months ended June 30, 2026 increased by $1,350 thousand, or 180.5%, to $2,098 thousand compared to $748 thousand in the six months ended June 30, 2025, primarily due to increased advertising costs.

Interest Income

Interest income for the six months ended June 30, 2026 increased by $1,532 thousand, or 354.6%, to $1,964 thousand compared to $432 thousand in the six months ended June 30, 2025, primarily due to higher average cash and cash equivalent balances held in interest bearing money market mutual funds during the six months ended June 30, 2026 due to the receipt of proceeds from the Merger on March 16, 2026 and the May 2026 PIPE.

Interest Expense

Interest expense for the six months ended June 30, 2026 decreased by $2,948 thousand, or 99.7%, to $9 thousand compared to $2,957 thousand in the six months ended June 30, 2025, primarily related to the Company’s election to recognize our term loans (2024 LSA) and related interest costs under the fair value option starting in July 2025. As a result, $956 thousand of cash interest expense related to the 2024 LSA was recognized as a change in fair value of long-term debt rather than in interest expense during the six months ended June 30, 2026.

Other Expense