Item 7. Management’s Discussion and
Analysis of Financial Condition and Results of Operations.
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.
Overview
We are a blank check company incorporated as a
Cayman Islands exempted company and formed for the purpose of effecting an initial business combination. We intend to effectuate the Proposed
Business Combination with Merlin pursuant to the Business Combination Agreement, which was approved by the requisite vote of the shareholders
in the EGM held on March 12, 2026. However, if the Business Combination Agreement is terminated, we may pursue an initial Business Combination
in any business or industry. We intend to effectuate our initial Business Combination, including the Proposed Business Combination, using
cash from the proceeds of the IPO and the Private Placement, the proceeds of the sale of our shares, shares issued to the owners of the
target, debt issued to bank or other lenders or the owners of the target, other securities issuances, or a combination of the foregoing.
The issuance of additional shares in connection
with our initial business combination to the owners of the target or other investors:
56
● may adversely affect prevailing market prices for our securities.
Similarly, if we issue debt securities or otherwise
incur significant debt to bank or other lenders or the owners of a target, it could result in:
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.
57
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:
58
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).
59
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:
60
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.
Sponsor Support 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.
Stockholder Voting and Support 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.
61
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.
Series A Preferred Stock Investment
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.
Results of Operations
We have neither engaged in any operations nor
generated any revenues to date. Our only activities since June 24, 2024 (inception) through December 31, 2025 have been (i) organizational
activities and (ii) activities relating to (x) the IPO, and (y) identifying and evaluating prospective acquisition candidates and activities
in connection with the initial business combination. We will not generate any operating revenues until after completion of our initial
business combination. We have generated non-operating income in the form of interest income on investments held in the Trust Account after
the IPO. There has been no significant change in our financial or trading position since the date of our audited financial statements,
as filed in our Annual Report on Form 10-K filed in 2024. We expect to incur increased expenses as a result of being a public company
(for legal, financial reporting, accounting and auditing compliance, among other things), as well as for due diligence expenses.
62
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 period from June 24, 2024 (inception)
through December 31, 2024, we had net income of approximately $1.5 million, which consist of interest earned on investments held in Trust
Account of approximately $1.8 million, interest income earned on bank account of approximately $15,000 and formation and operating costs
of approximately $0.2 million.
Liquidity and Capital Resources
Until the consummation of the IPO, our only source
of liquidity was an initial purchase of Class B Ordinary Shares by the Sponsor and loans from the Sponsor, which were repaid at the
closing of the IPO.
On November 4, 2024, we consummated the IPO of
25,000,000 Units, at $10.00 per Unit, generating gross proceeds of $250,000,000. Simultaneously with the closing of the IPO, we consummated
the sale of 425,000 Private Placement Units to the Sponsor, generating gross proceeds of $4,250,000.
Following the IPO, a total of $250,000,000 was
placed in the Trust Account. We incurred $11,403,592, consisting of $2,000,000 of cash underwriting fee, $8,750,000 of deferred underwriting
fee, and $653,592 of other offering costs.
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.
For the period from June 24, 2024 (inception)
through December 31, 2024, cash used in operating activities was $466,474. Net income of $1,519,663 was affected by interest earned on
investments held in Trust Account of $1,756,198, formation cost paid by Sponsor in exchange for issuance of Founder Shares of $9,153 and
payment of operation costs through promissory note of $111,442. Changes in operating assets and liabilities used $350,534 of cash for
operating activities.
As of December 31, 2025, we had investments held
in the Trust Account of $262,235,740. 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 initial business combination. To the extent
that our share capital or debt is used, in whole or in part, as consideration to complete our 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.
As of December 31, 2025, we had cash of $703,596
for working capital purposes. 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 initial business combination.
In order to fund working capital deficiencies
or finance transaction costs in connection with an initial business combination, the Sponsor, or certain of our officers and directors
or their affiliates may, but are not obligated to, loan us funds as may be required. If we complete an initial business combination, we
would repay such loaned amounts. In the event that the Proposed Business Combination, and if the Proposed Business Combination is not
consummated, any other alternative initial business combination opportunity we pursue, 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 $2,500,000 of such Working Capital Loans may be convertible into private placement units of the post Business Combination entity
at a price of $10.00 per Unit at the option of the lender, including up to $750,000 in working capital loans which may be made by Inflection
Point Fund. The units would be identical to the Private Placement Units.
63
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.
Off-Balance Sheet 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.
The underwriters had a 45-day option from the
date of the IPO to purchase up to an additional 3,750,000 Units to cover over-allotments, if any. On November 4, 2024, the underwriters
forfeited the over-allotment option to purchase the additional 3,750,000 Units.
The underwriters were entitled to a cash underwriting
discount of $0.08 per Unit, or $2,000,000 in the aggregate. Of this amount, $1,000,000 was paid to the underwriters upon the closing of
the IPO and $1,000,000 will be payable to the underwriters from working capital in equal amounts monthly starting on the 16th month
following the closing of the IPO until the 24th month following the closing of the Initial Public Offering. On August 5,
2025, the Underwriting Agreement dated October 31, 2024, was amended to defer the commencement of the remaining $1,000,000 in payments
to the underwriters until September 1, 2026. Pursuant to the amendment to the Underwriting Agreement, the remaining $1,000,000 shall
be payable to the underwriters from the Company’s working capital in equal amounts monthly in the three months commencing on September 1,
2026. Any amounts not paid hereunder from working capital shall be accelerated and paid upon consummation of the initial business combination.
64
Critical Accounting Estimates and
Policies
The preparation of consolidated financial statements
and related disclosures in conformity with GAAP 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 consolidated financial statements, and income
and expenses during the periods reported. Making estimates requires management to exercise significant judgement. It is at least reasonably
possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the consolidated
financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future
confirming events. Accordingly, the actual results could materially differ from those estimates. Management has identified the determination
of the fair value of our Rights as a complex accounting estimate.
Recent Accounting Standards
Management does not believe that any recently
issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s consolidated
financial statements.
Item 7A. Quantitative and Qualitative Disclosures
about Market Risk.
We are a smaller reporting company as defined
by Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise required under this Item.
Item 8. Financial Statements and Supplementary
Data.
This information appears following Item 15 of
this Report and is included herein by reference.
Item 9. Changes in and Disagreements with
Accountants on Accounting and Financial Disclosure.
None.
Item 9A. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures are controls
and other procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange
Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls
and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our
reports filed or submitted under the Exchange Act is accumulated and communicated to Management, including our Chief Executive Officer
and Chief Financial Officer (together, the “Certifying Officers”), or persons performing similar functions, as appropriate,
to allow timely decisions regarding required disclosure.
Under the supervision and with the participation
of our Management, including our Certifying Officers, we carried out an evaluation of the effectiveness of the design and operation of
our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on the foregoing, our
Certifying Officers concluded that our disclosure controls and procedures were effective as of the end of the fiscal year ended December
31, 2025.
We do not expect that our disclosure controls
and procedures will prevent all errors and all instances of fraud. Disclosure controls and procedures, no matter how well conceived and
operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met.
Further, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and the benefits
must be considered relative to their costs. Because of the inherent limitations in all disclosure controls and procedures, no evaluation
of disclosure controls and procedures can provide absolute assurance that we have detected all our control deficiencies and instances
of fraud, if any. The design of disclosure controls and procedures also is based partly on certain assumptions about the likelihood of
future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.
65
Management’s Annual Report on Internal
Control over Financial Reporting
As required by SEC rules and regulations implementing
Section 404 of the Sarbanes-Oxley Act, our management is responsible for establishing and maintaining adequate internal control over financial
reporting. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of our financial statements for external reporting purposes in accordance with U.S. GAAP. Our internal control
over financial reporting includes those policies and procedures that:
Because of its inherent limitations, internal
control over financial reporting may not prevent or detect errors or misstatements in our consolidated financial statements. Also, projections
of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in
conditions, or that the degree or compliance with the policies or procedures may deteriorate. Management assessed the effectiveness of
our internal control over financial reporting as of December 31, 2025. In making these assessments, management used the criteria set forth
by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control - Integrated Framework (2013). Based
on our assessments and those criteria, management determined that our internal controls over financial reporting were effective as
of December 31, 2025.
This Annual Report does not include an attestation
report of internal controls from our independent registered public accounting firm due to our status as an emerging growth company under
the JOBS Act.
Changes in Internal Control over Financial
Reporting
There have been no changes to our internal control
over financial reporting during the quarterly period ended December 31, 2025 that materially affected, or are reasonably likely to materially
affect, our internal control over financial reporting.
Item 9B. Other Information.
Trading Arrangements
During the quarterly period ended December 31, 2025, none of our directors or officers (as defined in Rule 16a-1(f) promulgated under the Exchange Act) adopted or terminated any “Rule 10b5-1 trading arrangement” or any “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408 of Regulation S-K.
Additional Information
None.
Item 9C. Disclosure Regarding Foreign Jurisdictions
that Prevent Inspections.
Not applicable.
66
PART III
Item 10. Directors, Executive Officers and
Corporate Governance.
Directors and Executive Officers
As of the date of this Report, our directors and
officers are as follows:
Name Age Position
Andrew Gundlach 54 Chairman of the Board of Directors and Executive Chairman
Michael Blitzer 48 President, Chief Executive Officer and Director
Kevin Shannon 30 Chief Operating Officer
Robert Folino 57 Chief Financial Officer
Joseph Samuels 50 Director
Antoine Theysset 49 Director
Kathy Savitt 61 Director
The experience of our directors and executive
officers is as follows:
Andrew Gundlach, Inflection Point’s
Chairman since June 26, 2024, currently serves as President and Co-Chief Executive Officer at Bleichroeder, a registered investment advisor
focused on ultra-high-net-worth families, a position held since 2019, where he oversees the strategic and operational aspects of the firm;
he has been with Bleichroeder and its predecessor firms since 2006. Since 2015 he has also headed Goldiron, a registered investment advisor
focused on institutions and ultra-high-net-worth investors. He also is an Adjunct Associate Professor of Business at Columbia Business
School from 2004 to the present, where he teaches courses on investing, and currently serves on the school’s board. Previously,
Mr. Gundlach co-founded Artemis Advisors LLC in 1999 and served as a founding partner until 2006. His earlier career includes roles as
an Associate at J.P. Morgan Chase & Co. from 1996 to 1999, and as an Analyst at Morgan Stanley from 1994 to 1996. Mr. Gundlach holds
board positions as a Director at First Eagle Holdings since 2006. He served on the boards of Odyssey Acquisition SA from 2021 to 2022,
and Materia, Inc. from 2014 until its acquisition by ExxonMobil in 2021. Mr. Gundlach is also a Member of the Council on Foreign Relations,
where he serves on the Investment Committee. Mr. Gundlach currently serves on the Advisory Board at People.ai, a privately-held AI company,
and Welltower (NYSE: WELL), a publicly-traded health care infrastructure REIT. He earned an MBA from Columbia Business School and holds
both an MS and a BS in International Relations and Affairs from Georgetown University’ School of Foreign Service. We believe he
is well qualified to serve on our board due to his extensive investment and advisory background.
Michael Blitzer has been the President
and CEO of the Company since July 2025. Mr. Blitzer has served as the Chairman and CEO of Inflection Point Acquisition Corp.
III (Nasdaq: IPCX) (“IPCX”), a special purpose acquisition company which announced the signing of a definitive agreement
for its initial business combination with Air Water Ventures Holdings Limited on August 25, 2025. Since September 2025, Mr. Blitzer
has also served as the Chairman and Chief Executive Officer of Inflection Point Acquisition Corp. V (Nasdaq: IPEX) (“IPEX”),
a special purpose acquisition company which announced the signing of a definitive agreement for its initial business combination with
GOWell Technology Limited on October 14, 2025. Mr. Blitzer previously served as co-CEO and director of Inflection Point
Acquisition Corp. I (“IPAX”), a special purpose acquisition company, from February 2021 until the completion of its
business combination with Intuitive Machines, LLC in February 2023. Mr. Blitzer also served as the Chairman and CEO of Inflection
Point Acquisition Corp. II (“IPXX”) from March 2023 until the closing of its business combination with USARE in March
2025. He currently sits on the board of directors and audit committee of Intuitive Machines, Inc. (Nasdaq: LUNR) and is the Chairman of
USA Rare Earth, Inc. (Nasdaq: USAR). Mr. Blitzer is the founder and co-CEO of Kingstown Capital Management (“Kingstown”),
which he founded in 2006 and grew to a multi-billion asset manager with some of the world’s largest endowments and foundations
as clients. Over 19 years, Kingstown has invested in public and private equities, SPACs, PIPEs, and derivatives. At Kingstown, Mr. Blitzer
has overseen and participated in nearly all the firm’s investment decisions including countless public and private investments in
disruptive growth industries. Mr. Blitzer brings an in-depth understanding of public markets and has invested in a variety of
corporate transactions such as spin-offs, rights offerings, public offerings, privatizations, and mergers & acquisitions. Mr. Blitzer
began his Wall Street career at J.P. Morgan Securities in 1999 advising companies globally in private debt and equity capital raises followed
by work at the investment fund Gotham Asset Management, which was founded by the author and investor Joel Greenblatt. Mr. Blitzer
taught courses in Investing at Columbia Business School for five years in the 2010s. He holds an M.B.A. from Columbia Business School
and a B.S. from Cornell University where he received the Cornell Tradition Fellowship. Mr. Blitzer is a trustee of Greens Farms Academy
in Westport, CT where he is also Treasurer and Chair of the Investment Committee. We believe Mr. Blitzer is well-qualified to
serve as a director due to his extensive experience in company advisory and with special purpose acquisition companies.
67
Kevin Shannon has been our Chief Operating
Officer since July 2025. Mr. Shannon has served as Chief Operating Officer of IPCX, a special purpose acquisition company which
announced the signing of a definitive agreement for its initial business combination with Air Water Ventures Holdings Limited on August 25,
2025. He also has served, since September 2025, as the Chief Operating Officer of IPEX, a special purpose acquisition company which announced
the signing of a definitive agreement for its initial business combination with GOWell Technology Limited on October 14, 2025. He
previously served as Chief of Staff of IPXX from March 2023 until March 2025 and as Chief of Staff of IPAX from March 2021 to February
2023. In his role as Chief Operating Officer of IPCX, BACQ and and Chief of Staff for IPXX and IPAX, Mr. Shannon was an active participant
in all target search, negotiation, and due diligence workstreams. Mr. Shannon is a founder and partner of Inflection Point Asset
Management, which he co-founded with Michael Blitzer in 2024. Inflection Point Asset Management invests in concentrated SPAC sponsor
and PIPE positions, primarily focused on backing the Inflection Point franchise of SPACs. Mr. Shannon also currently serves as Capital
Markets Advisor for Intuitive Machines, Inc and as Special Advisor to USA Rare Earth, Inc. Prior to Inflection Point Asset Management,
Mr. Shannon was a Principal at The Venture Collective from April of 2023 to March of 2024 helping to source and diligence later stage
investments for the venture capital firm. Before that, Mr. Shannon was a Senior Analyst at Kingstown Capital from March of 2021 to
March of 2023. Mr. Shannon began his career in Equity Capital Markets at Bank of America, spending time working across the Technology,
Industrials, Equity-Linked, and SPAC teams within ECM. Mr. Shannon holds a B.A. from Colgate University.
Robert Folino, our Chief Financial Officer
since July 2025, joined Bleichroeder, a registered investment advisor, as a trader in 2018 where he and Mr. Gundlach worked
closely to help establish the firm. In 2019, Mr. Folino was made Chief Operating Officer and Head of Trading of Bleichroeder. He
is currently responsible for overseeing all aspects of accounting, tax and financial operations of the funds, the management company,
and its general partner entities. Prior to joining Inflection Point, Mr. Folino worked for First Eagle Investment Management for
22 years, where he held positions of increasing responsibility. He joined Arnhold and S. Bleichroeder, the predecessor firm
to First Eagle Investment Management, in 1996 as a junior arbitrage trader for the Merger Arbitrage Department. Mr. Folino holds
a BA in Finance from Rider University.
Joseph Samuels, who has served as our director
since November 2024, is the Founder, Chief Executive Officer and Chief Operating Officer of Channel Partners, an investment firm focused
on strategic transactions and opportunistic liquidity in public and private companies since 2023, and Islet Management, an investment
firm focused on an opportunistic, catalyst-oriented long/short equity strategy, since 2017. Prior to founding Islet, from 2003 to 2016,
Mr. Samuels was an Executive Managing Director who previously held many key roles at Sculptor Capital Management Inc. (f/k/a Och-Ziff
Capital Management Group LLC), a hedge fund with peak AUM of $50 billion. During his 14 years at the fund, he served on the
Portfolio Management Committee, the Risk Committee, and the Managing Director Committee, and acted as Head of U.S. Trading and as
the Co-Head of the U.S. Equity Business. He worked closely with banks and other market participants to create capital solutions for
individual companies/sectors and as a balance sheet partner for strategic dispositions and funding opportunities. Prior to that, from
2001 to 2003, Mr. Samuels worked at Pequot Capital Management Inc. and, prior to that, from 1997 to 2001, he worked in the Sales
and Trading division at Merrill Lynch & Co. He received a BA in Economics from Rutgers College. We believe Mr. Samuels is
well-qualified to serve as a director due to his extensive finance and investment experience.
Antoine Theysset, who has served as our
director since November 2024, has 25 years of international strategy and operations experience in the Technology, Media and Entertainment
industry. Mr. Theysset has been serving as an independent director of Improbable Worlds Ltd, a technology company providing metaverse
infrastructure and applications, and previously served as the director representing SoftBank. Prior to that, he was an Operating Partner
with SoftBank Investment Advisers, focused on its Consumer Tech and Media investments. Mr. Theysset previously led McKinsey’s Fast
Growth Tech practice development in the Consumer Tech and Media markets. He has been advising startups and VC funds on growth strategy
and international expansion, both with McKinsey and as advisor/operating partner to 2 early-stage funds. Earlier in his career, he held
several executive positions with News Corporation over 8 years in London and then in New York (COO of Fox Interactive Media’s international
division, SVP Corporate Development, etc.), strategy and business development with Orange Mobile Group in London, strategy consulting
with Cap Gemini, Universal Music Group, and Vivendi Universal Net’s Strategic Planning and Corporate Development. He graduated from NYU
Stern with an MBA in Finance and Marketing, received two certificates in Entertainment, Media and Technology, and Digital Economy, and
is a graduate of the double-degree program in International Business from Northeastern University and NEOMA Business School/CESEM. We
believe Mr. Theysset is well-qualified to serve as a director due to his extensive international strategy and operations experience.
68
Kathy Savitt, who has served as our director
since November 2024, has extensive senior executive operating experience, as well as public and private board roles across a variety of
industries. Ms. Savitt has been serving as a General Partner at Perch Partners, LLC, a growth revenue, marketing and operational excellence
advisory firm since January 2025. Her professional experience includes serving as past President and Chief Business Officer of Boom Supersonic,
a private designer of supersonic airliners, from 2020 to 2024, Chief Marketing and Media Officer at Yahoo (NYSE: AABA) from 2012 to 2015
and holding senior leadership marketing roles at Amazon (NASDAQ: AMZN) from 2002 to 2006, and American Eagle Outfitters (NYSE: AEO) from
2009 to 2012. Prior to this, she served as Founder and Chief Executive Officer of Lockerz, an international social commerce website and
as Co-Founder and President at MWW/Savitt (part of the MWW Group, a public relations firm). Her board experience includes serving as Chairperson
for Volta Charging (NYSE: VLTA) from 2018 to 2023 (where she served as lead independent director upon the company’s going public
and then as Chairperson until its company’s sale in 2023) and as a board member for Alaska Airlines (NYSE: ALK) from 2014 to 2017,
and Build-A-Bear Workshop (NYSE: BBW) from 2009 to 2011. Ms. Savitt holds a Bachelor of Arts from Cornell University. We believe Ms. Savitt
is well-qualified to serve as a director due to her extensive public and private company experience across a variety of industries.
Family Relationships
No family relationships exist between any of our
directors or executive officers.
Involvement in Certain Legal Proceedings
There are no material proceedings to which any
director or executive officer, or any associate of any such director or officer is a party adverse to our Company, or has a material interest
adverse to our Company.
Number and Terms of Office of Officers
and Directors
Committees of the Board of Directors
Our Board of Directors has established two standing
committees: an audit committee and a compensation committee. Subject to phase-in rules, the rules of Nasdaq and Rule 10A-3 of the
Exchange Act require that the audit committee of a listed company be comprised solely of independent directors. Each committee operates
under a charter approved by our board and has the composition and responsibilities described below.
Audit Committee
Our Board of Directors has established an audit
committee of the Board of Directors. Ms. Savitt and Messrs. Samuel and Theysett serve as the members of our audit committee. Under the
Nasdaq listing standards and applicable SEC rules, we are required to have three members of the audit committee, all of whom must be independent.
Ms. Savitt and Messrs. Samuel and Theysett are each independent.
Ms. Savitt serves as the chairman of the audit
committee. Each member of the audit committee is financially literate and our board of directors has determined that Ms. Savitt qualifies
as an “audit committee financial expert” as defined in applicable SEC rules.
We have adopted an audit committee charter, which
details the principal functions of the audit committee, including:
69
Compensation Committee
Our Board of Directors has established a compensation
committee of our Board of Directors. The members of our compensation committee are Messrs. Samuels and Theysset. Mr. Theysset serves
as chair of the compensation committee. Under the Nasdaq listing standards and applicable SEC rules, we are required to have a compensation
committee of at least two members, all of whom must be independent. Messrs. Samuels and Theysset are each independent. We have adopted
a compensation committee charter, which details the principal functions of the compensation committee, including:
● reviewing our executive compensation policies and plans;
The charter also provides that the compensation
committee may, in its sole discretion, retain or obtain the advice of a compensation consultant, legal counsel or other adviser and will
be directly responsible for the appointment, compensation and oversight of the work of any such adviser. However, before engaging or receiving
advice from a compensation consultant, external legal counsel or any other adviser, the compensation committee will consider the independence
of each such adviser, including the factors required by Nasdaq and the SEC.
70
Director Nominations
We do not have a standing nominating committee
though we intend to form a corporate governance and nominating committee as and when required to do so by law or Nasdaq rules. In accordance
with Rule 5605(e)(2) of the Nasdaq rules, a majority of the independent directors may recommend a director nominee for selection
by our board of directors. Our board of directors believes that the independent directors can satisfactorily carry out the responsibility
of properly selecting or approving director nominees without the formation of a standing nominating committee. The directors who will
participate in the consideration and recommendation of director nominees are Messrs. Samuels, Theysset, as well as Ms. Savitt. In accordance
with Rule 5605(e)(1)(A) of the Nasdaq rules, all such directors are independent. As there is no standing nominating committee,
we do not have a nominating committee charter in place.
The board of directors will also consider director
candidates recommended for nomination by our shareholders during such times as they are seeking proposed nominees to stand for appointment
at the next annual general meeting (or, if applicable, an extraordinary general meeting). Our shareholders that wish to nominate a director
for appointment to our board of directors should follow the procedures set forth in our Articles.
Code of Ethics
We have adopted a Code of Ethics applicable to
our directors, officers and employees. We have filed a copy of our Code of Ethics as an exhibit to this Report. You will be able to review
this document by accessing our public filings at the SEC’s website at www.sec.gov. In addition, a copy of the Code of Ethics
and the charters of the committees of our board of directors will be provided without charge upon request from us. If we make any amendments
to our Code of Ethics other than technical, administrative or other non-substantive amendments, or grant any waiver, including any implicit
waiver, from a provision of the Code of Ethics applicable to our principal executive officer, principal financial officer, principal accounting
officer or controller or persons performing similar functions requiring disclosure under applicable SEC or Nasdaq rules, we will disclose
the nature of such amendment or waiver in a Current Report on Form 8-K filed with the SEC or on our website, and keep such information
on the website for at least 12 months. The information included on our website is not incorporated by reference into this Report
or in any other report or document we file with the SEC, and any references to our website are intended to be inactive textual references
only.
Trading Policies
On October 16, 2024, we adopted insider trading policies and procedures governing the purchase, sale, and/or other dispositions of our securities by directors, officers and employees, which are reasonably designed to promote compliance with insider trading laws, rules and regulations, and applicable Nasdaq listing standards (the “Insider Trading Policy”).
The foregoing
description of the Insider Trading Policy does not purport to be complete and is qualified in its entirety by the terms and conditions
of the Insider Trading Policy, a copy of which is attached hereto as Exhibit 19 and is incorporated herein by reference.
Conflicts of Interest
Under Cayman Islands law, directors and officers
owe the following fiduciary duties:
(iii) directors should not improperly fetter the exercise of future discretion;
(vi) duty to exercise independent judgment.
In addition to the above, directors also owe a
duty of care which is not fiduciary in nature. This duty has been defined as a requirement to act as a reasonably diligent person having
both the general knowledge, skill and experience that may reasonably be expected of a person carrying out the same functions as are carried
out by that director in relation to the company and the general knowledge, skill and experience of that director.
71
As set out above, directors have a duty not to
put themselves in a position of conflict and this includes a duty not to engage in self-dealing, or to otherwise benefit as a result of
their position at the expense of the company. However, in some instances what would otherwise be a breach of this duty can be forgiven
and/or authorized in advance by the shareholders provided that there is full disclosure by the directors. This can be done by way of permission
granted in the Articles or alternatively by shareholder approval at general meetings. Each of our officers and directors presently has,
and any of them in the future may have additional, fiduciary, contractual or other obligations or duties to one or more other entities
pursuant to which such officer or director is or will be required to present a business combination opportunity to such entities. Accordingly,
if any of our officers or directors becomes aware of a business combination opportunity which is suitable for an entity to which he or
she has then current fiduciary or contractual obligations, he or she will honor his or her fiduciary or contractual obligations to present
such business combination opportunity to such other entity, subject to their fiduciary duties under Cayman Islands law. The Articles provide
that, to the fullest extent permitted by law: (i) no individual serving as a director or an officer, among other persons, shall have any
duty, except and to the extent expressly assumed by contract, to refrain from engaging directly or indirectly in the same or similar business
activities or lines of business as us; and (ii) we renounce any interest or expectancy in, or in being offered an opportunity to participate
in, any potential transaction or matter which (a) may be a corporate opportunity for any director or officer, on the one hand, and us,
on the other or (b) the presentation of which would breach an existing legal obligation of a director or officer to any other entity.
As a result, the fiduciary duties or contractual obligations of our officers or directors could materially affect our ability to complete
the Business Combination, or another initial business combination. Below is a table summarizing the entities to which our officers and
directors currently have fiduciary duties or contractual obligations:
Individual Entity Entity’s Business Affiliation
Bleichroeder LP Investments Officer
First Eagle Investment Management Investments Director
Goldiron LP Investments Officer
Bleichroeder LP Investments Officer
Joseph Samuels Channel Partners Investments Officer
Islet Management Investments Officer
Antoine Theysset Improbable Worlds, Ltd. Technology Director
Bleichroeder Acquisition Corp. II Special purpose acquisition company Director
EGH Acquisition Corp. Special purpose acquisition company Director
Curology Skincare Officer
Perch Partners Consulting Officer
Kingstown Capital Partners, LLC Asset management Managing Member
Kingstown Management GP LLC Asset management Managing Member
Inflection Point GP I LLC Asset management Manager and Member
Intuitive Machines, Inc. Space exploration, infrastructure and services Director
USA Rare Earth, Inc. Manufacturing Chairman
Kevin Shannon USA Rare Earth, Inc. Manufacturing Special Advisor
72
Compensation Recovery and Clawback
Policy
Under the Sarbanes-Oxley Act, in the event of
misconduct that results in a financial restatement that would have reduced a previously paid incentive amount, we can recoup those improper
payments from our executive officers. The SEC also recently adopted rules which direct national stock exchanges to require listed companies
to implement policies intended to recoup bonuses paid to executives if the company is found to have misstated its financial results.