Business Context and Reporting Period
Company: Cal Redwood Acquisition Corp. (CRAQ)
Reporting Period: Quarter ended March 31, 2025 (Inception: January 7, 2025)
Business Type: Cayman Islands exempted corporation formed as a "blank check" company (SPAC) to effect a business combination.
Status: As of the balance sheet date, the Company had not commenced operations. The Initial Public Offering (IPO) was consummated on May 27, 2025, subsequent to the reporting period.
Key Financial Metrics
| Metric | Value |
|---|---|
| Revenue | $0 (No operations) |
| Net Loss | $(42,822) |
| Cash and Cash Equivalents | $25,000 |
| Total Assets | $211,384 (Includes $186,384 deferred offering costs) |
| Total Liabilities | $229,206 |
| Shareholder's Deficit | $(17,822) |
| Working Capital Deficit | $(204,206) |
| Debt (Promissory Note) | $104,880 (Related party, repaid May 29, 2025) |
Material Changes and Subsequent Events
The financial statements reflect the pre-IPO formation phase. Significant capital events occurred after March 31, 2025:
- IPO Completion: On May 27, 2025, the Company sold 23,000,000 Units at $10.00 per unit, generating gross proceeds of $230,000,000. This included the full exercise of the underwriters' over-allotment option.
- Private Placement: Simultaneously, 660,000 Private Placement Units were sold to the Sponsor and underwriters for $6,600,000.
- Trust Account: $230,000,000 was deposited into a Trust Account.
- Transaction Costs: Total transaction costs amounted to $14,320,654, including $4,600,000 in cash underwriting fees and $9,200,000 in deferred underwriting fees.
- Debt Repayment: The $104,880 promissory note owed to the Sponsor was repaid on May 29, 2025.
Outlook, Risks, and Management Commentary
Outlook: The Company intends to use proceeds from the IPO and private placement to consummate a business combination. It has 24 months from the IPO closing to complete a transaction or liquidate.
Liquidity: Prior to the IPO, liquidity was provided by the Sponsor via a promissory note. Post-IPO, the Company expects sufficient funds to finance working capital needs for at least one year.
Risks:
- Geopolitical Instability: Ongoing conflicts (Russia-Ukraine, Israel-Hamas) may cause market volatility and disrupt the search for a target.
- Business Combination Failure: No assurance exists that a target will be identified or a combination completed within the required timeframe.
- Going Concern: While management believes funds are sufficient post-IPO, cost overruns in identifying a target could necessitate additional financing.
Investor Verification Checklist
- IPO Proceeds: Verify the $230,000,000 gross proceeds and the $230,000,000 deposit into the Trust Account.
- Deferred Fees: Confirm the $9,200,000 deferred underwriting commission payable only upon successful business combination.
- Related Party Transactions: Review the $132,300 stock-based compensation expense recorded for founder shares transferred to independent directors.
- Share Structure: Note the 7,665,900 Class B founder shares (no longer subject to forfeiture) and the 23,000,000 Class A public shares.
- Completion Window: Confirm the 24-month deadline to complete a business combination or redeem shares.