CRAC

Business Context and Reporting Period

Crown Reserve Acquisition Corp. I (CRAC) is a Cayman Islands exempted company formed as a Special Purpose Acquisition Company (SPAC). The filing covers the quarterly period ended June 30, 2026. The Company consummated its Initial Public Offering (IPO) on November 10, 2025, raising $172.5 million. On March 30, 2026, the Company entered into a Business Combination Agreement with Carvix, Inc.. The transaction is subject to shareholder approval and regulatory clearance, with an "Outside Date" for consummation set for September 30, 2026.

Key Financial Metrics

Per Share Data: Net income per ordinary share (basic and diluted) was $0.06 for Class A and Class B shares for the three months ended June 30, 2026.

Material Changes vs. Prior Period

• Profitability: The Company reported net income of $1.35 million for the quarter, compared to $53 in the prior year period. This increase is primarily driven by dividends earned on marketable securities held in the Trust Account ($1.55 million), partially offset by a loss on the change in fair value of warrant liability ($116,477).
• Warrant Liability: The warrant liability increased to $3.14 million from $1.42 million at December 31, 2025, due to changes in fair value inputs (specifically expected volatility rising from 12.3% to 25.3%).
• Trust Account Growth: The Trust Account balance grew to $176.48 million from $173.40 million at year-end 2025, reflecting the reinvestment of dividends earned.
• Operating Expenses: General and administrative costs and professional fees were incurred for the first time in the current period ($53,125 and $25,000 respectively for the quarter), as the prior year period was pre-IPO.

Outlook, Risks, and Contingencies

• Business Combination: The Company is pursuing a merger with Carvix, Inc. The deal includes an earnout structure for Carvix stockholders and the Sponsor based on EBITDA and revenue targets over four years. The transaction must close by September 30, 2026, or the Company may be forced to liquidate.
• Liquidity and Going Concern: The Company holds no cash outside the Trust Account and has a working capital deficit. Operations are funded by the Sponsor. Management has determined that the mandatory liquidation date raises substantial doubt about the Company's ability to continue as a going concern if a Business Combination is not completed.
• Internal Controls: The Company disclosed a material weakness in internal control over financial reporting related to the accounting for complex financial instruments (warrant liabilities and Public Rights). This weakness has not been fully remediated as of June 30, 2026.
• Deferred Underwriting Fee: A deferred underwriting commission of $300,000 is payable only upon the consummation of a Business Combination.

Investor Verification Checklist

• Merger Status: Verify the progress of the Business Combination Agreement with Carvix, Inc., specifically regarding shareholder approval and the Form S-4 registration statement.
• Redemption Risk: Assess the potential for significant redemptions of Class A shares, which could impact the cash available for the transaction.
• Warrant Valuation: Review the sensitivity of the warrant liability to changes in volatility, as this significantly impacts reported net income/loss.
• Internal Control Remediation: Monitor the Company's progress in remediating the material weakness in internal controls over financial reporting.
• Sponsor Funding: Confirm the Sponsor's continued willingness to fund working capital deficits, as the Company has no operating cash.