EGHA

EGH Acquisition Corp. 10-Q Summary: Q1 2026

Business Context and Reporting Period

This report covers the quarterly period ended March 31, 2026. EGH Acquisition Corp. is a Cayman Islands exempted company and a Special Purpose Acquisition Company (SPAC) formed to effect a business combination. The Company consummated its Initial Public Offering (IPO) on May 12, 2025, raising $150 million. On January 21, 2026, the Company entered into a Business Combination Agreement (the "Hecate BCA") with Hecate Energy Group, LLC. The Company has until May 12, 2027, to consummate a business combination or face mandatory liquidation.

Key Financial Metrics

Material Changes vs. Prior Period

• Net Income vs. Net Loss: The Company reported a net income of $1,025,330 for Q1 2026, compared to a net loss of $50,142 for the period from inception (January 9, 2025) through March 31, 2025. The current period income is driven primarily by $1.35 million in interest earned on Trust Account securities.
• Trust Account Growth: The Trust Account balance increased from $153,867,836 at December 31, 2025, to $155,217,211 at March 31, 2026, due to accrued interest.
• Operating Expenses: General and administrative costs for the three months ended March 31, 2026, were $324,045, significantly higher than the $50,142 incurred in the comparable prior period (inception to March 31, 2025), reflecting ongoing operational costs as a public company.
• Cash Position: Cash held outside the Trust Account decreased from $777,703 to $463,928, with net cash used in operating activities totaling $313,775 for the quarter.

Outlook, Risks, and Contingencies

• Hecate Business Combination: The Company is pursuing a merger with Hecate Energy Group, LLC. The transaction involves a domestication from the Cayman Islands to Delaware and a valuation of Hecate at approximately $1.2 billion (less net indebtedness).
• Legal Proceedings & Delays: On March 5, 2026, the Company was named as a defendant in litigation involving a lender of Hecate's parent company (NEC Fund VI HE Lender, LLC). The lender alleges the parent lacked authority to enter the Hecate BCA. This litigation has delayed the required PCAOB audit of Hecate, pushing the anticipated closing to no earlier than the fourth quarter of 2026. If the dispute is not settled, the transaction may not occur.
• Going Concern: Management has identified substantial doubt about the Company's ability to continue as a going concern for one year from the report date if a business combination is not consummated. The Company relies on the Trust Account for liquidity and may require additional financing from the Sponsor or affiliates.
• Geopolitical Risks: The filing highlights risks associated with global conflicts (Ukraine, Middle East) that could impact capital markets and the ability to consummate a transaction.

Investor Verification Checklist

• Legal Status of Hecate Merger: Verify the current status of the litigation involving NEC Fund VI HE Lender, LLC and whether the PCAOB audit of Hecate has commenced.
• Redemption Risk: Assess the likelihood of shareholder redemptions upon the Hecate merger vote, which would reduce the cash available for the transaction.
• Liquidity Runway: Confirm the Company's ability to fund operations outside the Trust Account ($463,928) until the merger closes or the liquidation date (May 12, 2027).
• Deferred Fee Obligation: Note the $6,000,000 deferred underwriting fee payable only upon successful completion of the business combination.
• Share Structure: Verify the conversion terms of Class B Founder Shares and the impact of the 750,000 shares forfeited in June 2025 due to the unexercised over-allotment option.