Business Context and Reporting Period
Company: X3 Acquisition Corp. Ltd. (XCBE)
Reporting Period: Fiscal year ended December 31, 2025 (Inception: July 31, 2025).
Business Type: Cayman Islands exempted company and "shell company" formed to effect a merger, amalgamation, or business combination with one or more target businesses. The Company has not yet commenced operations or generated revenue.
Target Sector: Primarily financial services, including traditional institutions, asset management, and fintech, though the Company remains flexible.
Key Subsequent Event: The Company consummated its Initial Public Offering (IPO) on January 22, 2026, and partially exercised the over-allotment option on January 26, 2026. These events occurred after the balance sheet date but are material to the Company's current status.
Key Financial Metrics
| Metric | Value (as of Dec 31, 2025) | Value (Post-IPO / Subsequent) |
|---|---|---|
| Revenue | $0 | $0 (No operating revenue generated) |
| Net Loss | $(69,205) | Includes subsequent share-based compensation of $363,600 |
| Total Assets | $247,558 | Significant increase post-IPO (Trust Account established) |
| Cash & Equivalents | $0 | $225,000,000 in Trust Account (Post-IPO) |
| Working Capital | Deficit of $(280,425) | Positive post-IPO |
| Debt / Liabilities | $291,763 (Current) | Promissory note repaid at IPO closing |
| Trust Account Balance | N/A | $225,000,000 ($10.00 per public share) |
| Transaction Costs | $236,220 (Deferred) | Total $9,571,416 (Cash + Deferred) |
Material Changes vs. Prior Period
As this is the Company's first annual report since inception (July 31, 2025), there is no prior comparable period. However, significant changes occurred immediately following the reporting period:
- Capitalization: Transitioned from a pre-IPO shell with no cash to a public company with $225 million in trust assets following the January 2026 IPO and over-allotment exercise.
- Share Structure: Issued 22,500,000 Class A ordinary shares (public) and 5,625,000 Class B ordinary shares (founder). 125,000 founder shares were forfeited due to the partial exercise of the over-allotment option.
- Liquidity: Moved from a working capital deficit of $280,425 to a position with substantial liquidity held in the Trust Account and working capital outside the trust.
- Liabilities: Repaid a $286,183 promissory note to the Sponsor at the closing of the IPO.
Guidance, Outlook, and Risks
Outlook and Strategy: The Company has 24 months from the IPO closing (January 22, 2026) to consummate an initial business combination. If unsuccessful, the Company will liquidate and redeem public shares at the pro-rata trust account balance. Management intends to focus on financial services targets with strong fundamentals and scalable models.
Management Commentary: Management believes the team's experience in financial services and capital markets provides a competitive advantage. The Company does not expect to generate operating revenue until after a business combination.
Risks and Contingencies:
- Completion Risk: Failure to complete a business combination within 24 months will result in liquidation.
- Market Risk: The ability to find a target is subject to market conditions, competition from other SPACs, and economic downturns.
- Redemption Risk: Significant redemptions by public shareholders could reduce funds available for the transaction.
- Warrant Expiration: Warrants will expire worthless if no business combination is completed.
- Related Party Transactions: The Sponsor and affiliates hold significant influence and have entered into agreements regarding office space ($10,000/month) and potential working capital loans.
Investor Verification Checklist
- Trust Account Status: Verify the current balance of the $225,000,000 Trust Account and any interest earned or withdrawn for taxes.
- Extension Provisions: Review the Company's charter for specific terms regarding shareholder votes required to extend the 24-month completion window.
- Deferred Underwriting Fees: Confirm the $5,625,000 deferred fee obligation and the condition under which it may be waived (if Trust Account < $70 million).
- Founder Share Forfeiture: Verify the final count of outstanding Class B shares after the expiration of the over-allotment option (125,000 shares forfeited).
- Related Party Loans: Monitor for any new working capital loans from the Sponsor, which may be convertible into warrants.
- Target Identification: Assess the progress of due diligence and any announced letters of intent or definitive agreements with potential targets.