CUB

Lionheart Holdings 10-Q Summary: Period Ended June 30, 2026

Business Context and Reporting Period

Lionheart Holdings is a Cayman Islands exempted company and a Special Purpose Acquisition Company (SPAC) formed to effect a business combination. The company is an emerging growth company and a smaller reporting company. As of June 30, 2026, the company had not commenced operations and had not entered into a definitive agreement for a business combination. On June 3, 2026, management announced a focus on a potential target in Venezuela's upstream oil and gas sector. The company extended its deadline to consummate a business combination from June 20, 2026, to March 20, 2027.

Key Financial Metrics

Material Changes vs. Prior Period

• Significant Expense Increase: General and administrative expenses surged to $7.06 million for the six months ended June 30, 2026, compared to $478,726 in the prior year period. This increase is primarily driven by a $6.54 million non-cash expense related to "Non-Redemption Agreements" entered into with institutional investors to secure capital for the extension.
• Net Loss: The company reported a net loss of $2.69 million for the six months ended June 30, 2026, reversing a net income of $4.45 million in the same period in 2025. The loss is attributable to the non-redemption expense outweighing interest income.
• Share Redemptions: In connection with the extension of the combination period, shareholders redeemed 4,503,836 Class A ordinary shares for approximately $49.1 million ($10.89 per share). These redemptions were recorded as a liability ("Due to shareholders") as of June 30, 2026, and paid on July 1, 2026.
• Capital Structure: The Sponsor converted 3,000,000 Class B Ordinary Shares into Class A Ordinary Shares. Following redemptions and conversions, the company had 21,496,164 Class A shares and 4,666,667 Class B shares outstanding.

Outlook, Risks, and Contingencies

• Going Concern: Management has raised substantial doubt about the company's ability to continue as a going concern. The company has limited cash outside the Trust Account ($42,578) and relies on potential loans from the Sponsor or affiliates to fund operations until a business combination is consummated by March 20, 2027.
• Extension and Non-Redemption: To extend the deadline, the company issued 3,175,814 new Class A shares to institutional investors who agreed not to redeem their shares. This transaction incurred the significant expense noted above.
• Target Sector Risks: The focus on Venezuela's oil and gas sector introduces specific risks, including U.S. and international sanctions, geopolitical instability, and regulatory hurdles regarding brownfield redevelopment.
• Liquidity: The company has incurred $200,000 in related-party promissory notes to cover working capital needs. No working capital loans were outstanding as of December 31, 2025.

Investor Verification Checklist

• Extension Terms: Verify the specific terms of the Extension Amendment and the impact of the 3.18 million new shares issued to non-redeeming investors on future dilution.
• Trust Account Liquidity: Confirm the remaining cash balance in the Trust Account post-redemption ($201.2 million) and the per-share redemption value ($10.89).
• Related Party Debt: Review the terms of the $200,000 in promissory notes issued to Lionheart Management, LLC and The Ivy Companies, Inc., including conversion rights to warrants.
• Target Progress: Assess the status of negotiations with the Venezuelan oil and gas target, given the high-risk nature of the sector and the tight timeline (March 2027).
• Going Concern Status: Evaluate the company's ability to secure additional financing if the Sponsor does not provide further loans, as the current cash balance outside the Trust is insufficient for long-term operations.