Business Context and Reporting Period
Company: Quartzsea Acquisition Corp (SPAC)
Reporting Period: Quarter ended May 31, 2026 (Q2 2026)
Status: The Company is a Cayman Islands exempted company formed to effect a business combination. As of the reporting date, it had not commenced operations. The Company is classified as a shell company, a smaller reporting company, and an emerging growth company.
Key Event: On June 23, 2026 (subsequent to the period end), shareholders approved an extension of the business combination deadline to October 19, 2026, and approved a new merger agreement with Eight Directions Technology Limited.
Key Financial Metrics
| Metric | As of May 31, 2026 | As of Nov 30, 2025 |
|---|---|---|
| Cash (Operating) | $5,156 | $12,095 |
| Investments in Trust Account | $86,732,878 | $85,202,732 |
| Total Assets | $86,845,340 | $85,336,925 |
| Total Liabilities | $4,459,540 | $4,053,883 |
| Working Capital Deficit | ($1,035,078) | ($649,389) |
| Ordinary Shares Subject to Redemption | 8,280,000 shares ($10.47/share) | 8,280,000 shares ($10.29/share) |
Results of Operations (Six Months Ended May 31, 2026)
- Revenue: $0 (No operating revenue generated).
- General and Administrative Expenses: $427,450.
- Interest Income (Trust Account): $1,530,146.
- Net Income: $1,102,757.
- Net Income Per Share (Redeemable): $0.10.
Material Changes vs. Prior Period
- Profitability: The Company reported a net income of $1,102,757 for the six months ended May 31, 2026, compared to a net loss of $58,402 for the same period in 2025. This improvement is driven primarily by increased interest income earned on the Trust Account ($1.53M vs $0.69M).
- Expenses: General and administrative expenses decreased to $427,450 for the six months ended May 31, 2026, from $761,251 in the prior year period.
- Liquidity: Operating cash decreased from $12,095 to $5,156. The Company maintains a working capital deficit, relying on related party funding and Trust Account interest.
- Related Party Balances: "Due to related party" increased from $0 to $174,352, reflecting transaction costs paid by the Sponsor on behalf of the Company.
Outlook, Risks, and Contingencies
Business Combination and Extension
The Company entered into a new Merger Agreement on May 13, 2026, with Eight Directions Technology Limited, valuing the target at approximately $515 million. On June 23, 2026, shareholders approved an extension of the combination deadline to October 19, 2026. Eight Directions is responsible for funding monthly extension contributions ($175,000 per month).
During the extension vote, 1,275,382 shares were redeemed for approximately $13.4 million. Following redemptions, approximately $73.6 million remained in the Trust Account.
Going Concern
Management has concluded that substantial doubt exists regarding the Company's ability to continue as a going concern due to its liquidity condition and the requirement to complete a business combination within the prescribed period to avoid liquidation.
Risks and Controls
- Internal Controls: Management identified material weaknesses in internal controls over financial reporting, specifically regarding expense accruals and the accounting of short-term investments. These were deemed ineffective as of May 31, 2026.
- Regulatory Risk: The previous merger agreement with Broadway Tech was terminated in March 2026 due to prolonged regulatory approval processes in China.
- Contingencies: The Company has a deferred underwriting fee of $3,312,000 payable upon consummation of a business combination. A finder's fee agreement exists with Hugh Grow Investment Ltd., involving a success fee of 1,560,000 shares of the surviving company.
Investor Verification Checklist
- Extension Funding: Verify that Eight Directions Technology Limited has funded the required extension contributions to the Trust Account to maintain the October 19, 2026 deadline.
- Redemption Impact: Confirm the final Trust Account balance post-redemption ($73.6M) is sufficient to cover the deferred underwriting fee and transaction costs.
- Merger Approval: Monitor shareholder approval status for the Eight Directions merger and regulatory clearance, given the prior termination of the Broadway Tech deal due to regulatory uncertainty.
- Internal Controls: Review subsequent filings for evidence of remediation regarding the material weaknesses in expense accruals and asset classification.
- Related Party Loans: Track the status of the $174,352 due to the related party and the new $250,000 promissory note issued in July 2026.