Business Context and Reporting Period
Company: Quartzsea Acquisition Corporation (Quartzsea)
Filing Type: Form 10-K (Annual Report)
Reporting Period: Fiscal year ended November 30, 2025
Business Overview: Quartzsea is a Cayman Islands exempted company formed as a Special Purpose Acquisition Company (SPAC) to effect a merger, share exchange, or asset acquisition with one or more target businesses. The Company consummated its Initial Public Offering (IPO) on March 19, 2025. As of the filing date, the Company has no operating revenue and has incurred losses from formation and operating costs.
Recent Development: On June 6, 2025, the Company entered into a Merger Agreement to acquire Broadway Technology Inc., a manufacturer of PET cups and lids. The aggregate consideration is $520,000,000, payable in newly issued shares.
Key Financial Metrics
| Metric | Value (Year Ended Nov 30, 2025) |
|---|---|
| Net Income | $510,959 |
| Interest Income (Trust Account) | $2,402,732 |
| General & Administrative Expenses | $1,906,211 |
| Cash (Outside Trust) | $12,095 |
| Investments Held in Trust Account | $85,202,732 |
| Working Capital Deficit | ($649,389) |
| Deferred Underwriting Fee | $3,312,000 |
| Redemption Value per Public Share | $10.29 |
Material Changes vs. Prior Period
- Revenue Generation: The Company had no operating revenue in the prior period (inception through Nov 30, 2024) and continues to have no operating revenue. Income is derived solely from interest earned on the Trust Account.
- Profitability: The Company reported a net loss of $10,166 for the period from inception through November 30, 2024. For the year ended November 30, 2025, the Company reported net income of $510,959, driven by interest income of $2.4 million offset by operating expenses of $1.9 million.
- Liquidity Position: Cash outside the Trust Account decreased from $311,000 as of November 30, 2024, to $12,095 as of November 30, 2025, resulting in a working capital deficit of $649,389.
- Capital Structure: Following the IPO on March 19, 2025, $82.8 million was deposited into the Trust Account. The Company has 8,280,000 public shares subject to possible redemption.
Guidance, Outlook, Risks, and Contingencies
Outlook and Guidance
The Company expects to continue incurring significant costs in pursuit of its acquisition plans. It has until June 19, 2026 (15 months from IPO), to consummate an initial business combination, subject to potential extensions. Management has determined that conditions raise substantial doubt about the Company's ability to continue as a going concern until the earlier of the consummation of a business combination or the date the Company is required to liquidate.
Risks and Contingencies
- Going Concern: The Company lacks the financial resources to sustain operations for a reasonable period (one year) without completing a business combination or raising additional capital.
- Internal Controls: Management concluded that disclosure controls and procedures were ineffective as of November 30, 2025. Material weaknesses were identified regarding the preparation and review of expenses and the accounting of short-term investments.
- Merger Agreement Risks: The proposed merger with Broadway Technology Inc. is subject to customary closing conditions. If terminated due to default, a break-up fee of $500,000 may be payable. The Sponsor has received $500,000 in working capital loans from the target company, which may create conflicts of interest.
- Trust Account Claims: While the Sponsor has agreed to indemnify the Trust Account against certain claims, there is no guarantee that the Sponsor has sufficient funds to satisfy these obligations. If claims exceed the indemnity, the redemption value per share could be reduced below $10.29.
- Related Party Transactions: The Company pays the Sponsor $20,000 per month for administrative services. A Finder's Fee Agreement was entered into with Hugh Grow Investment Ltd., involving a retainer fee and a success fee payable in shares of the surviving company.
Investor Verification Checklist
- Merger Status: Verify the current status of the Merger Agreement with Broadway Technology Inc. and whether closing conditions are being met.
- Going Concern: Assess the Company's ability to fund operations until June 2026 given the $12,095 cash balance and $649,389 working capital deficit.
- Internal Controls: Review the remediation plan for the identified material weaknesses in financial reporting and expense controls.
- Redemption Rights: Confirm the current redemption value per share ($10.29) and the potential impact of shareholder redemptions on the deferred underwriting fee ($3.312 million).
- Related Party Loans: Verify the terms and repayment status of the $500,000 working capital loans received by the Sponsor from the target company (Broadway Tech).
- Finder's Fee: Confirm the valuation and lock-up terms of the 1,560,000 ordinary shares to be issued to the Finder upon closing.