CUB

Business Context and Reporting Period

Lionheart Holdings is a Cayman Islands exempted company and a Special Purpose Acquisition Company (SPAC) formed for the purpose of effecting a Business Combination. The company has no operating history and generates no operating revenue. Its sole activities involve organizational efforts and searching for a target business. The reporting period covers the fiscal year ended December 31, 2025. The company must consummate an initial Business Combination by June 20, 2026, or it will be required to liquidate.

Key Financial Metrics

Liquidity: The company holds approximately $230,540 in cash outside the Trust Account to fund operations. It has no long-term debt but has a deferred fee liability of $9.8 million payable upon completion of a Business Combination.

Material Changes vs. Prior Period

• Trust Account Growth: The Trust Account balance increased by approximately $9.8 million, driven entirely by interest income earned on marketable securities held within the account.
• Operating Expenses: Operating and formation costs increased by approximately $379,000 year-over-year, primarily due to ongoing administrative and legal fees associated with the search for a target.
• Cash Position: Cash held outside the Trust Account decreased by approximately $660,000, reflecting the net cash used in operating activities ($585,477) and payment of offering costs ($75,000).
• Deferred Legal Fees: Deferred legal fees payable increased from $125,000 to $250,000, representing fees incurred but not yet paid, which are payable upon the consummation of a Business Combination.

Outlook, Risks, and Contingencies

Going Concern: Management has raised substantial doubt about the company's ability to continue as a "going concern." If a Business Combination is not completed by June 20, 2026, the company will cease operations and liquidate. The financial statements do not include adjustments that might result from this uncertainty.

Outlook: The company is actively searching for a target business but has not selected a specific target. It intends to use funds from the Trust Account, equity, or debt to complete a transaction. There is no assurance that a transaction will be consummated.

Risks and Contingencies:

• Liquidation Risk: Failure to complete a Business Combination by the deadline results in mandatory liquidation and redemption of Public Shares.
• Trust Account Claims: While the Sponsor has agreed to indemnify the Trust Account against certain third-party claims, the Sponsor's ability to satisfy these obligations is not guaranteed, and the Trust Account could be subject to creditor claims in a bankruptcy scenario.
• Geopolitical and Market Conditions: Global conflicts and economic instability may adversely affect the ability to consummate a transaction.
• Related Party Transactions: The company pays $15,000 per month to a Sponsor affiliate for administrative services and has incurred significant deferred legal fees from a related party.

Investor Verification Checklist

• Combination Deadline: Verify the current status of the search for a target and the proximity to the June 20, 2026 liquidation deadline.
• Trust Account Composition: Confirm the specific investments held in the Trust Account (currently money market funds) and the interest rate environment affecting the redemption price.
• Related Party Fees: Review the Administrative Services Agreement and deferred legal fee arrangements to understand ongoing cash burn outside the Trust Account.
• Redemption Rights: Understand the conditions under which Public Shareholders can redeem shares and the potential impact of mass redemptions on the ability to close a deal.
• Sponsor Indemnification: Assess the financial strength of the Sponsor (Lionheart Sponsor, LLC) to determine the likelihood of satisfying indemnification obligations if third-party claims arise against the Trust Account.