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

We have neither engaged in any operations nor generated any revenues to date. Our only activities from August 19, 2025 (inception) through MarchJune 31,30, 2026 were organizational activities, those necessary to prepare for the Initial Public Offering, described below, and identifying a target company for a Business Combination. We do not expect to generate any operating revenues until after the completion of our Business Combination. We generate non-operating income in the form of interest income on marketable securities held in the Trust Account. We incur expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses.

For the three months ended MarchJune 31,30, 2026, we had a net lossincome of $1,043,819,$1,250,877, which consists of operating costs of $225,988, change on overallotment liability of $200 and compensation expense of $1,451,125, partially offset by interest income on marketable securities held in the Trust Account of $633,494.$1,460,895 and change on overallotment liability of $50,000, partially offset by operating costs of $260,018.

For the threesix months ended MarchJune 31,30, 2026, cash used in operating activities was $368,509.$498,610. Net lossincome of $1,043,819$207,058 was affected by operating costs applied to prepaid contributed by sponsor through promissory note of $479, payment of operation costs through promissory note of $13,347, stock based compensation expense of $1,451,125, change in fair value of overallotment liability of $200$49,800 and interest earned on marketable securities held in the Trust Account of $633,494.$2,094,389. Changes in operating assets and liabilities providedused $156,347$26,430 of cash for operating activities.

As of MarchJune 31,30, 2026, we had marketable securities held in the Trust Account of $165,133,494$166,594,389 (including approximately $633,494$2,094,389 of interest income) consisting of U.S. Treasury Bills in a money market fund with a maturity of 185 days or less. We may withdraw interest from the Trust Account to pay taxes, if any. We intend to use substantially all of the funds held in the Trust Account, including any amounts representing interest earned on the Trust Account (less income taxes payable), to complete our Business Combination. To the extent that our share capital or debt is used, in whole or in part, as consideration to complete our Business Combination, the remaining proceeds held in the Trust Account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.

As of MarchJune 31,30, 2026, we had cash of $1,212,757.$1,126,887. We intend to use the funds held outside the Trust Account primarily to identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from the offices, plants or similar locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses, and structure, negotiate and complete a Business Combination.

We have no obligations, assets or liabilities, which would be considered off-balance sheet arrangements as of MarchJune 31,30, 2026. We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements. We have not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any non-financial assets.

Critical Accounting Estimates and Policies

The preparation of the condensed financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and income and expenses during the periods reported. ActualThese accounting estimates require the use of assumptions about matters, some of which are highly uncertain at the time of estimation. Management bases its estimates on historical experience and on various other assumptions it believes to be reasonable under the circumstances, the results of which form the basis for making judgments, and we evaluate these estimates on an ongoing basis. To the extent actual experience differs from the assumptions used, our condensed financial statements and notes thereto included elsewhere in this Report could be materially differ from those estimates.affected. We havebelieve identifiedthat the following accounting policies involve a higher degree of judgment and complexity. Using valuations, the Company estimated the fair value of the Over-allotment Option and the Public Warrants as of the Initial Public Offering. Other than the estimate values of the Over-allotment Option and the Public Warrants, we did not have any other critical accounting policies:estimates as of June 30, 2026.

Net Income (Loss) Per Ordinary Share

We apply the two-class method in calculating earnings per share. Net income per ordinary share, basic and diluted for Class A redeemable ordinary shares is calculated by dividing the interest income earned on the Trust Account by the weighted average number of Class A redeemable ordinary shares outstanding since original issuance. Net lossincome per ordinary share, basic and diluted for Class A and Class B non-redeemable ordinary shares is calculated by dividing the net income (loss),income, less income attributable to Class A redeemable ordinary shares, by the weighted average number of Class A and Class B non-redeemable ordinary shares outstanding for the periods presented.