ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
Special Note Regarding Forward-Looking Statements
This Report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Exchange Act of 1934, as amended (the “Exchange Act”) that are not historical facts, and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements, other than statements of historical fact included in this Report including, without limitation, statements under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding the Company’s financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. When used in this Report, words such as “expect,” “believe,” “anticipate,” “intend,” “estimate,” “seek” and variations and similar words and expressions, as they relate to us or the Company’s management, identify forward-looking statements. Such forward-looking statements are based on the beliefs of management, as well as assumptions made by, and information currently available to the Company’s management. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements. The Company’s securities filings can be accessed on the EDGAR section of the SEC’s website at www.sec.gov. Except as expressly required by applicable securities law, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.
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 on Form 10-K. 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 “Cautionary Note Regarding Forward-Looking Statements” elsewhere in this Annual Report on Form 10-K.
Overview
We are a blank check company incorporated in the Cayman Islands on August 23, 2024 formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, recapitalization, reorganization or other similar business combination with one or more businesses. We intend to effectuate our initial business combination using cash derived from the proceeds of the Initial Public Offering (as defined below) and the sale of the Private Placement Units (as defined below), our shares, debt or a combination of cash, shares and debt.
We expect to continue to incur significant costs in the pursuit of our acquisition plans. We cannot assure you that our plans to complete an initial business combination will be successful.
While we may pursue a business combination target in any business, industry or geographical location, we intend to focus our search for businesses in the pharmaceutical industry. The Company is an early stage and emerging growth company and, as such, the Company is subject to all of the risks associated with early stage and emerging growth companies.
The registration statement for the Company’s initial public offering (the “IPO” or “Initial Public Offering”) was declared effective on September 24, 2025. On September 26, 2025, we consummated our Initial Public Offering of 50,000,000 units (the “Units”). Each Unit consists of one ordinary share, $0.0001 par value (“ordinary share”) and one right to receive one-tenth (1/10) of one ordinary share upon the consummation of an initial business combination. The Units were sold at an offering price of $10.00 per unit, generating gross proceeds, before expenses, of $500,000,000. We granted the underwriters a 45-day option to purchase up to 7,500,000 additional Units to cover over-allotments, if any.
Simultaneously with the closing of the IPO, we consummated the private placement with Drugs Made In America Acquisition II LLC, our sponsor (the “Sponsor”), and Cantor Fitzgerald & Co., the representative of the underwriters (“Cantor”), of 1,200,000 units (the “Private Placement Units”) at a price of $10.00 per unit, for $12,000,000. The Private Placement Units are identical to the Units sold in the IPO, except that the Private Placement Units, including the underlying securities, may not, subject to certain limited exceptions, be transferable, assignable or salable by the Sponsor until the earlier of: (i) with respect to 50% of the Private Placement Units, the earlier of six months after the date of the consummation of our initial business combination and the date on which the closing price of our ordinary shares equals or exceeds $12.50 per share (as adjusted for share subdivisions, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing after our initial business combination and (ii) with respect to the remaining 50% of the Private Placement Units, six months after the date of the consummation of our initial business combination, or earlier, in either case, if, subsequent to our initial business combination, we consummate a liquidation, merger, share exchange or other similar transaction which results in all of our shareholders having the right to exchange their ordinary shares for cash, securities or other property. The Sponsor was granted certain demand and piggyback registration rights in connection with the purchase of the Private Placement Units. No underwriting discounts or commissions were paid with respect to such sale. The Private Placement Units were issued pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”).
Following the closing of the IPO, a total of $ 500,000,000 of the net proceeds from the sale of Units in the IPO and the private placement of the Private Placement Units, were placed in a trust account established for the benefit of the Company’s public shareholders (the “trust account”) established by Continental Stock Transfer & Trust Company acting as trustee. Except with respect to interest earned on the funds held in the trust account that may be released to us to pay our taxes (without deduction for any excise or similar tax that may be due or payable), if any, the funds held in the trust account will not be released from the trust account until the earliest to occur of: (1) our completion of an initial business combination; (2) the redemption of any public shares properly submitted in connection with a shareholder vote to amend our amended and restated memorandum and articles of association (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; and (3) the redemption of our public shares if we have not completed an initial business combination within the completion window, subject to applicable law. The funds in the trust account will be invested only in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act which invest only in direct U.S. government treasury obligations and/or held as cash or cash items (including in demand deposit accounts).
We will have up to 24 months to consummate an initial business combination from the closing of the IPO (the “Combination Period”). If we are unable to consummate an initial business combination within such time period, we will redeem 100% of the issued and outstanding public shares for a pro rata portion of the funds held in the trust account, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account (net of funds withdrawn to pay our taxes, if any, and up to $100,000 of interest to pay dissolution expenses), divided by the number of then issued and outstanding public shares, subject to applicable law, and then seek to liquidate and subsequently dissolve.
We will provide our public shareholders with the opportunity to redeem all or a portion of their public shares upon the completion of our initial business combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account calculated prior to the consummation of the initial business combination, including interest (net of funds withdrawn to pay our taxes, if any (but without deduction for any excise or similar tax that may be due or payable)), divided by the number of then issued and outstanding public shares, subject to certain limitations. Our public shareholders will be permitted to redeem their shares regardless of whether they abstain, vote for, vote against, or vote at all with respect to the proposed business combination. There will be no redemption rights upon the completion of our initial business combination with respect to our rights. Our Sponsor, directors and officers have entered into a letter agreement with us, pursuant to which they have agreed to waive their redemption rights with respect to any shares held by them in connection with the completion of our initial business combination.
If a shareholder vote on our initial business combination is not required by law and we do not decide to hold a shareholder vote for business or other legal reasons, we will offer to redeem our public shares pursuant to Rule 13e-4 and Regulation 14E under the Exchange Act, and will file tender offer documents with the SEC prior to completing our initial business combination which contain substantially the same financial and other information about our initial business combination and the redemption rights as is required under Regulation 14A under the Exchange Act.
Results of Operations
We have neither engaged in any operations nor generated any revenues to date. Our only activities from August 23, 2024 (inception) through December 31, 2025 were organizational activities, those necessary to prepare for the Initial Public Offering, described below, and subsequent to the Initial Public Offering, identifying a target company for an initial business combination. We do not expect to generate any operating revenues until after the completion of our initial business combination. We generate non-operating income in the form of interest earned on cash and investments 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 year ended December 31, 2025, we had net income of $4,187,050 comprised of $4,933,800 interest earned on cash and investments held in the Trust Account, a $553,748 gain on extinguishment of the over-allotment option liability and offset by a $812,113 provision for credit losses and $488,385 of general and administrative costs.
The Company maintains an allowance for current expected credit losses, which reflects management’s estimate of expected lifetime credit losses. This estimate is developed based on the probability of repayment. As of December 31, 2025, the Company believes that the probability of repayment of the balance due from the Sponsor is remote and, as such, has established a full reserve against the due from Sponsor amount through a provision for credit losses on the statement of operations.
For the period from August 23, 2024 (inception) through December 31, 2024, we had a net loss of $151,719 comprised of general and administrative costs.
Liquidity and Capital Resources
As of December 31, 2025, we had cash of $223. Until the consummation of the Initial Public Offering, our only source of liquidity was an initial purchase of ordinary shares by the Sponsor and loans from our Sponsor.
On September 26, 2025, we consummated the Initial Public Offering of 50,000,000 Units, at a price of $10.00 per unit, generating gross proceeds of $500,000,000. Simultaneously with the closing of the Initial Public Offering, we consummated the sale of 1,200,000 Private Placement Units to the Sponsor and Cantor at a price of $10.00 per unit for $12,000,000.
We incurred $28,357,609 of transaction costs, consisting of $10,000,000 of cash underwriting fee, $17,500,000 of deferred underwriting fee, and $857,609 of other offering costs.
We intend to use substantially all of the funds held in the trust account, including any amounts representing interest earned on the trust account, which interest shall be net of taxes payable, if any, and excluding deferred underwriting commissions, to complete our initial business combination. We may withdraw interest from the trust account to pay taxes, if any. To the extent that our share capital or debt is used, in whole or in part, as consideration to complete an initial 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.
In order to fund working capital deficiencies or finance transaction costs in connection with an initial business combination, our Sponsor or an affiliate of our Sponsor or certain of our officers and directors may, but are not obligated to, loan us funds as may be required. If we complete an initial business combination, we may repay such loaned amounts out of the proceeds of the trust account released to us. In the event that a business combination does not close, we may use a portion of the working capital held outside the trust account to repay such loaned amounts, but no proceeds from our trust account would be used for such repayment. Up to $1,500,000 of such working capital loans may be convertible into units of the post-business combination entity at a price of $10.00 per unit. The units would be identical to the Private Placement Units.
If our estimate of the costs of identifying a target business, undertaking in-depth due diligence and negotiating an initial business combination are less than the actual amount necessary to do so, we may have insufficient funds available to operate our business prior to our initial business combination. Moreover, we may need to obtain additional financing either to complete our business combination or because we become obligated to redeem a significant number of our public shares upon completion of our business combination, in which case we may issue additional securities or incur debt in connection with such business combination.
On March 18, 2026, the managing member of the Sponsor, along with her spouse, entered into a sponsor standstill, non-voting and cooperation acknowledgement in which her acknowledged the Sponsor is unable to fulfill the financial and operation obligations typically associated with the sponsor role. They agreed to refrain from taking any actions with respect to the Company and to cooperate with the current management team on the transfer of founder shares and other securities held by the Sponsor when permissible.
On March 5, 2026, the Company entered into the letter of intent (“LOI”) with Alpha Multi Family Office (the “Investor”) relating to a proposed financing transaction pursuant to which the Investor indicated its intent to provide financing to the Company through a convertible note investment, subject to the negotiation and execution of definitive documentation. On March 9, 2026, the Company and the Investor entered into an addendum to the LOI which amended certain economic terms of the proposed financing (the “Addendum”). Pursuant to the LOI, as amended by the Addendum, the aggregate amount to be loaned is $1,400,000, of which the $150,000 paid to the Company pursuant to the Bridge Loan will be the first payment.
The remaining $1,250,000 of the proposed convertible notes financing is subject to the negotiation and execution of, a convertible note purchase agreement to be negotiated and finalized by the parties. The Addendum contemplates that $400,000 in aggregate funding will be disbursed to the Company on or prior to March 30, 2026.
On March 11, 2026, the Company issued an unsecured convertible note (the “Bridge Note”) to the Investor in the principal amount of $150,000 (the “Bridge Loan”). The Bridge Loan represents an initial loan towards a contemplated $1,400,000 financing (the “Convertible Notes Financing”) pursuant to the LOI.
The Bridge Note has a maturity date nine months from the date of issuance, unless earlier converted or credited toward the definitive financing documents for the Convertible Notes Financing and does not bear interest. Upon the consummation of the Company’s initial business combination (the “Business Combination”), the outstanding principal amount of the Bridge Note may, at the option of the Investor, be converted into shares of the post-merger combined entity at a conversion price equal to a 35% discount to the market price of such shares of the combined entity at the time of conversion.
The Company intends to use the proceeds of the Bridge Loan for accounting expenses, audit expenses and other expenses related to the Business Combination.
Effective March 24, 2026, the Company and the Investor entered into the Definitive Investment and Sponsor Transition Agreement (the “Agreement”) for the Convertible Notes Financing.
In addition, on March 30, 2026, the Company and the Investor entered into an Interim Convertible Note in the amount of $300,000 (the “Second Note”). The Second Note has a maturity date nine months from the date of issuance, unless earlier converted and does not bear interest. Upon the consummation of the Company’s initial Business Combination, the outstanding principal amount of the Second Note may, at the option of the Investor, be converted into shares of the post-merger combined entity at a conversion price equal to a 35% discount to the market price of such shares of the combined entity at the time of conversion.
The Company intends to use the proceeds of the Second Loan for accounting expenses, audit expenses and other expenses related to the Business Combination.
Going Concern
As of December 31, 2025, the Company had $223 cash and a working capital deficit of $274,827. The Company expects to incur significant professional costs to remain as a publicly traded company and to incur significant transaction costs in pursuit of the consummation of an initial business combination. The Company’s business plan is dependent on the completion of a business combination within a prescribed period of time and if not completed will cease all operations except for the purpose of liquidating.
In connection with our assessment of going concern considerations in accordance with Financial Accounting Standard Board’s Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” management has determined that these conditions raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Off-Balance Sheet Financing Arrangements
We have no obligations, assets or liabilities, which would be considered off-balance sheet arrangements as of December 31, 2025. We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements. We have not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any non-financial assets.
Contractual Obligations
We do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities, other than to pay the Sponsor $10,000 per month for office space, and administrative and support services pursuant to an administrative services agreement which has been cancelled in March 2026.
The underwriters were entitled to a cash underwriting discount of $0.20 per Unit (excluding any Units sold pursuant to the underwriters’ over-allotment option), or $10,000,000 in the aggregate which was paid upon the closing of the Initial Public Offering. In addition, the underwriters were entitled to a deferred fee of $0.35 per Unit on Units other than those sold pursuant to the underwriter’s over-allotment option and $0.55 per Unit on Units sold pursuant to the underwriters’ over-allotment option. As the over-allotment option was never exercised in whole or in part, the aggregate deferred fee that will be due is $17,500,000. The deferred fee will become payable to the underwriters from the amounts held in the Trust Account solely in the event that the Company completes a Business Combination, subject to the terms of the underwriting agreement.
Critical Accounting Estimates
The preparation of 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. Actual results could materially differ from those estimates. We have not identified any critical accounting estimates.
Related Party Transactions
Founder Shares
On September 11, 2024, the Company issued to the Sponsor an aggregate of 44,722,222 ordinary shares (the “Founder Shares”), par value $0.0001 per share, in exchange for $35,000 or approximately $0.0008 per share. In February 2025, the Sponsor surrendered and forfeited 18,847,722 ordinary shares to the Company for no consideration. In May 2025, the Sponsor surrendered and forfeited an additional 11,500,000 ordinary shares to the Company for no consideration, following which the Sponsor holds 14,375,000 Founder Shares. The Founder Shares include an aggregate of up to 1,875,000 shares subject to surrender and forfeiture to the extent that the underwriters’ over-allotment option is not exercised in full or in part, so that the number of Founder Shares will equal, on an as-converted basis, approximately 20% of the Company’s issued and outstanding ordinary shares after the Initial Public Offering (not including the Private Placement Units and assuming the Sponsor does not purchase any Public Shares in the Initial Public Offering). The underwriters did not exercise the over-allotment option in part or in full resulting in the expiration of the over-allotment option on November 8, 2025. As a result, 1,875,000 Founder Shares were surrendered and forfeited.
The Sponsor has entered into a letter agreement with the Company pursuant to which, with certain limited exceptions, the Founder Shares and Private Placement Units are not transferable, assignable or salable (except to directors and officers and other persons or entities affiliated with the Company’s initial shareholders, each of whom will be subject to the same transfer restrictions) until the earlier of: (i) with respect to 50% of the Founder Shares and Private Placement Units (including underlying securities), the earlier of six months after the date of the consummation of the initial Business Combination and the date on which the closing price of the ordinary shares equals or exceeds $12.50 per share (as adjusted for share subdivisions, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing after the initial Business Combination and (ii) with respect to the remaining 50% of the Founder Shares and Private Placement Units (including underlying securities), six months after the date of the consummation of the initial Business Combination, or earlier, in either case, if, subsequent to the initial Business Combination, the Company consummates a liquidation, merger, share exchange or other similar transaction which results in all of the shareholders having the right to exchange their ordinary shares for cash, securities or other property.
Administrative Support Agreement
Commencing on September 24, 2025, the Company entered into an Administrative Services Agreement, pursuant to which the Company has agreed to pay the Sponsor or an affiliate $10,000 for office space, and administrative and support services. The administrative services agreement has been cancelled in March 2026. For the year ended December 31, 2025, the Company incurred $32,333 in administrative support fees recorded to general and administrative costs on the statement of operations. As of December 31, 2025, $32,333 is reported in accrued expenses on the balance sheet. For the period from August 23, 2024 (inception) through December 31, 2024, we did not incur fees for these services as the agreement had not yet commenced.
CFO Services Agreement
The Company’s prior CFO (“Prior CFO”) is a partner in the advisory firm through which he provided accounting services to the Company. On October 8, 2025, the Prior CFO delivered to the Company a notice of resignation from their position as Chief Financial Officer. The Prior CFO’s resignation is effective October 8, 2025. We paid the Prior CFO $10,403 and $5,000 for the year ended December 31, 2025 and for the period from August 23, 2024 (inception) through December 31, 2024, respectively, for such services. We have a consulting agreement to pay the Company’s CFO a total of $3,500 per month for the provision of principal financial and accounting officer services. We have not paid the CFO for services provided under the agreement as of December 31, 2025.
Consulting Agreement
In connection with the appointment of Saleem Elmasri as Chief Financial Officer and principal financial and accounting officer of the Company on November 17, 2025, the Company entered into a master services agreement (the “Consulting Agreement”) with Titan Advisory Services LLC for the provision of such principal financial and accounting officer services by Mr. Elmasri. Under the terms of the Consulting Agreement, the Company will pay Titan Advisory Services LLC $42,000 per year, or $3,500 per month, for services rendered by Mr. Elmasri as Chief Financial Officer. For the year ended December 31, 2025, the Company incurred $7,000 of expense reported in general and administrative costs on the statement of operations. As of December 31, 2025, $7,000 was outstanding and reported in accrued expenses on the balance sheet. For the period from August 23, 2024 (inception) through December 31, 2024, we did not incur fees for these services as the agreement had not yet commenced.
Promissory Note — Related Party
On September 5, 2024, the Sponsor issued an unsecured promissory note to the Company (the “Promissory Note”), pursuant to which the Company may borrow up to an aggregate principal amount of $325,000. The Promissory Note was non-interest bearing and payable on the earlier of (i) December 1, 2025 (as amended on February 28, 2025), (ii) the consummation of the Initial Public Offering or (iii) the date on which the Company determines to not proceed with such Initial Public Offering. The Company had borrowed $325,000 under the promissory note, which the Company repaid on September 29, 2025. As such, no amounts are outstanding as of December 31, 2025. Borrowings under the note are no longer available.
Advisory Services
The Company received advisory services from a related party advisor and husband of the former CEO of the Company. The role of such advisor was to assist in the day to day transactions of the Company. As of December 31, 2025 and 2024, no fees to such advisor have been incurred.
Due to Sponsor
The Sponsor has paid for offering costs and other expenses on behalf of the Company totaling $208,731. On September 29, 2025, the Company paid the Sponsor the due to Sponsor amount of $208,731. As such, no amounts are outstanding as of December 31, 2025.
Due from Sponsor
Between the completion of the Company’s initial public offering on September 26, 2025 and December 31, 2025, the Sponsor to the Company withdrew an aggregate amount of $1,345,844 (the “Withdrawal”) from the Company’s working capital account (the “Account”). Of the aggregate Withdrawal amount, $325,000 was used to repay an outstanding working capital note (the “Note”) to the Sponsor and $208,731 was used to repay other offering costs and expenses to the Sponsor. After the repayments to the Sponsor, there was an outstanding balance of $812,113 which is due back to the Company as of December 31, 2025. As recoverability of this balance is unlikely, the Company reserved the full amount as a current expected credit loss, which is included in the statement of operations.
Recent Accounting Standards
In November 2024, the FASB issued Accounting Standards Update (“ASU”) 2024-03, “Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses”, requiring public entities to disclose additional information about specific expense categories in the notes to the financial statements on an interim and annual basis. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and for interim periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2024-03.
Management does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s financial statement.
