CHPG

Business Context and Reporting Period

Company: ChampionsGate Acquisition Corporation (CHPG)

Filing Type: Form 10-Q (Unaudited)

Reporting Period: Three months ended March 31, 2026

Business Overview: The Company is a Cayman Islands exempted company formed as a "blank check" SPAC to effect a business combination. As of the reporting date, the Company had not commenced any operations. Its sole activities have been organizational and identifying a target for an initial business combination. The Company consummated its IPO on May 29, 2025, and has until November 29, 2026 (potentially extendable to August 29, 2027) to complete a transaction.

Key Financial Metrics

Liquidity: The Company holds $16,862 in cash outside the trust account. It has a working capital deficit of $182,396. Liquidity is supported by a working capital loan facility from the Sponsor HoldCo, with $157,671 outstanding as of March 31, 2026.

Material Changes vs. Prior Period

• Profitability Shift: The Company reported a net income of $571,370 in Q1 2026, compared to a net loss of $117,327 in Q1 2025. This reversal is primarily driven by $676,197 in interest and dividend income earned on the Trust Account following the May 2025 IPO. Q1 2025 occurred prior to the IPO, resulting in zero investment income.
• Trust Account Growth: Investments held in the Trust Account increased from $0 in Q1 2025 to $77,578,527 in Q1 2026. The increase from the prior quarter (Dec 31, 2025) of $76,902,330 is due to accrued interest income.
• Liabilities: Current liabilities increased to $251,105 from $168,238 in the prior quarter, driven by an increase in accounts payable and accrued expenses ($93,434 vs $16,567) and an increase in the related party working capital loan ($157,671 vs $151,671).

Outlook, Risks, and Management Commentary

• Going Concern: Management has raised substantial doubt about the Company's ability to continue as a going concern within one year. This is due to the working capital deficit and the requirement to complete a business combination by the deadline (Nov 29, 2026, or extended to Aug 29, 2027). If no combination is consummated, the Company will liquidate.
• Extension Mechanics: The Company may extend the combination deadline twice by three months each time (up to 24 months total, or 27 months if a definitive agreement is signed within 18 months). Extensions require the Sponsor to deposit $747,500 per extension into the Trust Account.
• Capital Needs: The Company expects to incur significant costs in pursuing acquisition plans. It relies on the Sponsor HoldCo for working capital loans (up to $500,000 available under current terms, with up to $1.5M convertible into units upon a business combination).
• Risks: Risks include the inability to complete a business combination, market volatility affecting the ability to raise financing, and geopolitical risks (specifically citing the conflict in Ukraine) that could impact target operations or financing availability.
• Internal Controls: Management concluded that disclosure controls and procedures were not effective as of March 31, 2026.

Investor Verification Checklist

• Extension Funding: Verify the Sponsor's ability and willingness to fund the $747,500 extension deposits if the Company fails to close a deal by the initial deadline.
• Working Capital Runway: Assess the sufficiency of the $16,862 cash balance and the $157,671 related party loan against the $104,827 quarterly operating burn rate.
• Trust Account Yield: Monitor the interest rate environment, as the Company's net income is currently entirely dependent on yield from the Trust Account.
• Internal Control Remediation: Review subsequent filings for updates on the remediation of ineffective disclosure controls.
• Redemption Risk: Note that 7,475,000 Class A shares are subject to redemption at approximately $10.38 per share, which could impact the net tangible assets required to close a deal.