Business Context and Reporting Period
Company: ChampionsGate Acquisition Corp (CHPG)
Filing Type: Form 10-K (Annual Report)
Reporting Period: Fiscal year ended December 31, 2025
Business Overview: The Company is a Cayman Islands exempted company and a "blank check" SPAC formed for the purpose of effecting an initial business combination. It has no operations and no revenue to date. On May 29, 2025, the Company consummated its Initial Public Offering (IPO) of 7,475,000 Units at $10.00 per unit, generating gross proceeds of $74,750,000. Simultaneously, it completed a private placement of 230,000 units to the Sponsor HoldCo for $2,300,000.
Trust Account: $74,750,000 was deposited into a U.S.-based trust account at IPO. As of December 31, 2025, the trust account balance was $76,902,330, reflecting interest and dividend income.
Key Financial Metrics
| Metric | Year Ended Dec 31, 2025 | Period Inception to Dec 31, 2024 |
|---|---|---|
| Revenue | $0 | $0 |
| Net Income (Loss) | $1,175,395 | ($250,846) |
| Operating Expenses | $603,185 | $250,846 |
| Interest/Dividend Income (Trust) | $1,778,580 | $0 |
| Cash (Outside Trust) | $17,251 | $3 |
| Working Capital | ($77,569) Deficit | ($463,043) Deficit |
| Debt (Related Party) | $151,671 (Working Capital Loan) | $331,927 (Promissory Note) |
| Deferred Underwriting Fees | $1,495,000 | $0 |
Material Changes vs. Prior Period
- Capitalization: The Company transitioned from a pre-IPO shell to a public entity following the May 29, 2025 IPO. Total assets increased from $295,105 in 2024 to $76,992,999 in 2025, driven primarily by the $76.9 million held in the trust account.
- Profitability: The Company reported a net income of $1.18 million for 2025, compared to a net loss of $0.25 million in 2024. This shift was driven by $1.78 million in interest income earned on trust investments, which offset operating costs of $0.60 million.
- Liquidity: Cash held outside the trust account increased to $17,251, though the Company maintains a working capital deficit of $77,569, relying on related-party loans for operations.
- Debt Structure: The Company repaid a $350,000 promissory note to the Sponsor in July 2025. The remaining balance was transferred to a new working capital loan facility with the Sponsor HoldCo, with $151,671 outstanding as of year-end.
Outlook, Risks, and Management Commentary
- Going Concern: The independent auditors (TAAD, LLP) have issued a report containing an explanatory paragraph expressing substantial doubt about the Company's ability to continue as a going concern. This is due to the working capital deficit and the requirement to complete a business combination to avoid liquidation.
- Combination Deadline: The Company has 18 months from the IPO closing (May 29, 2025) to complete an initial business combination, with potential extensions up to 24 or 27 months if specific conditions and extension loans are met. If no combination is completed by the deadline, the Company will liquidate and redeem public shares.
- Internal Controls: Management identified material weaknesses in internal controls over financial reporting as of December 31, 2025, citing inadequate segregation of duties and deficiencies in the expense accrual process. Consequently, disclosure controls were deemed ineffective.
- Management Changes: The former CEO, Bala Padmakumar, resigned effective July 31, 2025. Timothy Lim was appointed CEO and Chairman in October 2025. The Sponsor's director and manager, Mr. Sunny Kah Wei Tan, passed away in August 2025, creating a vacancy in the Sponsor HoldCo management pending legal resolution.
- Accountant Change: The Company dismissed UHY LLP and engaged TAAD, LLP as its independent registered public accounting firm effective July 31, 2025.
Investor Verification Checklist
- Extension Feasibility: Verify the Company's ability to secure extension loans from the Sponsor HoldCo if a business combination is not completed within the initial 18-month window.
- Related Party Solvency: Assess the financial capacity of the Sponsor HoldCo to fund working capital deficits and potential extension loans, especially given the recent death of the Sponsor's manager.
- Internal Control Remediation: Monitor the implementation of remedial measures for the identified material weaknesses in financial reporting and disclosure controls.
- Target Identification: Confirm if the Company has identified a prospective target business, as it has no operating history and relies entirely on a future merger for value creation.
- Redemption Risk: Evaluate the potential impact of public shareholder redemptions on the cash available for a business combination, noting the 15% redemption cap for "Excess Shares" if a shareholder vote is required.