AXIN

Business Context and Reporting Period

Axiom Intelligence Acquisition Corp 1 (AXIN) is a Cayman Islands exempted company and a Special Purpose Acquisition Company (SPAC) formed on January 30, 2025. The company is in the pre-business combination phase, focusing on identifying targets in the European infrastructure industry. This Form 10-Q covers the quarterly period ended June 30, 2026.

On May 25, 2026, the Company entered into a definitive Business Combination Agreement with Terra Quantum AG, a Swiss company. The transaction is subject to shareholder approval and customary closing conditions.

Key Financial Metrics

Note: The Company has no operating revenue. Net income is derived primarily from interest earned on Trust Account investments.

Material Changes vs. Prior Period

• Expense Surge: General and administrative expenses increased significantly to $1,090,472 for the three months ended June 30, 2026, compared to $107,286 for the same period in 2025. This reflects increased costs associated with the pursuit of the Terra Quantum business combination.
• Trust Account Growth: Investments held in the Trust Account grew from $204,234,694 at December 31, 2025, to $207,868,662 at June 30, 2026, driven by interest earnings of approximately $3.6 million for the six-month period.
• Liquidity Position: Cash held outside the Trust Account decreased from $736,280 at December 31, 2025, to $289,541 at June 30, 2026, resulting in a working capital deficit of $549,718.

Outlook, Risks, and Contingencies

Business Combination with Terra Quantum

The Company is pursuing a merger with Terra Quantum AG. Key terms include:

• Structure: A multi-step merger involving a Swiss HoldCo and a Cayman Islands Merger Sub.
• Earnouts: Up to 75,000,000 earnout shares are issuable based on future stock price milestones ($12.50, $15.00, and $17.50 VWAP thresholds).
• Termination Fee: If the Company terminates the agreement during the diligence review period due to unsatisfactory due diligence, the CEO is personally liable for a $15,000,000 termination fee.

Going Concern and Liquidity

Management has raised substantial doubt about the Company's ability to continue as a going concern. The Company lacks sufficient liquidity to sustain operations for at least one year without additional financing. To address this:

• On July 27, 2026 (subsequent to the period end), the Sponsor issued a new promissory note for up to $1,000,000 to fund working capital needs.
• The Company may need to raise additional capital or rely on Working Capital Loans from the Sponsor to complete the business combination.

Risks

• Delisting Risk: If the business combination is not completed by June 20, 2027 (24 months from IPO), the Company must liquidate.
• Redemption Risk: Significant shareholder redemptions could reduce the funds available for the transaction.
• Regulatory Risk: The transaction is subject to Nasdaq listing approvals and shareholder votes.

Investor Verification Checklist

• Termination Fee Liability: Verify the personal liability of the CEO regarding the $15 million termination fee and the conditions triggering it.
• Working Capital Sufficiency: Confirm the status of the $1,000,000 promissory note issued in July 2026 and whether it is sufficient to fund operations until closing.
• Earnout Dilution: Assess the potential dilution impact of the 75 million earnout shares on post-merger shareholders.
• Trust Account Interest: Monitor the interest rate environment, as the Company's net income is entirely dependent on interest earned in the Trust Account.
• Shareholder Approval: Track the timeline for the Proxy/Registration Statement effectiveness and the shareholder vote required to consummate the Terra Quantum deal.