UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
For the quarterly period ended
or
For the transition period from to
Commission File Number:
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(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
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Indicate by check mark whether the registrant
(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days.
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has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405
of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer ☐ | Accelerated filer ☐ | |
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Smaller reporting company
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Emerging growth company
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If an emerging growth company, indicate by check
mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act.
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is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
As of August 14, 2025, there were
LAUNCH TWO ACQUISITION CORP.
FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2025
TABLE OF CONTENTS
i
Unless otherwise stated in this Report (as defined below), or the context otherwise requires, references to:
| ● | “2024 Annual Report” are to our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, as filed with the SEC (as defined below) on March 25, 2025; |
| ● | “Administrative Services Agreement” are to the Administrative Services Agreement, dated October 7, 2024, which we entered into with an affiliate of our Sponsor (as defined below); |
| ● | “Amended and Restated Articles” are to our Amended and Restated Memorandum and Articles of Association, as currently in effect ; |
| ● | “ASC” are to the FASB (as defined below) Accounting Standards Codification; |
| ● | “ASU” are to the FASB Accounting Standards Update; |
| ● | “ASU 2024-03” are to the FASB ASU Topic 2024-03, “Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses”; |
| ● | “Board of Directors” or “Board” are to our board of directors; |
| ● | “Business Combination” are to a merger, capital share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses; |
| ● | “Cantor” are to Cantor Fitzgerald & Co., the representative of the several underwriters in the Initial Public Offering (as defined below); |
| ● | “Certifying Officers” are to our Chief Executive Officer and Chief Financial Officer, together; |
| ● | “Class A Ordinary Shares” are to our Class A ordinary shares, par value $0.0001 per share; |
| ● | “Class B Ordinary Shares” are to our Class B ordinary shares, par value $0.0001 per share; |
| ● | “Combination Period” are to (i) the 24-month period, from the closing of the Initial Public Offering to October 9, 2026 (or such earlier time as determined by our Board), that we have to consummate an initial Business Combination, or (ii) such other period in which we must consummate an initial Business Combination pursuant to an amendment to our Amended and Restated Charter and consistent with applicable laws, regulations and stock exchange rules; |
| ● | “Company,” “our,” “we” or “us” are to Launch Two Acquisition Corp., a Cayman Islands exempted company; |
| ● | “Continental” are to Continental Stock Transfer & Trust Company, trustee of our Trust Account (as defined below) and warrant agent of our Public Warrants (as defined below); |
| ● | “Deferred Fee” are to the additional fee of $10,950,000 to which the underwriters to the Initial Public Offering are entitled that is payable only upon our completion of the initial Business Combination; |
| ● | “Exchange Act” are to the Securities Exchange Act of 1934, as amended; |
| ● | “FASB” are to the Financial Accounting Standards Board; |
ii
| ● | “Founder Shares” are to the (i) Class B Ordinary Shares initially purchased by our Sponsor prior to the Initial Public Offering and (ii) Class A Ordinary Shares that will be issued upon the automatic conversion of the Class B Ordinary Shares (x) at the time of our Business Combination as described in the IPO Registration Statement (as defined below) or (y) earlier at the option of the holders thereof, as described in the IPO Registration Statement; for the avoidance of doubt, such Class A Ordinary Shares will not be “Public Shares” (as defined below); |
| ● | “GAAP” are to the accounting principles generally accepted in the United States of America; |
| ● | “Initial Public Offering” or “IPO” are to the initial public offering that we consummated on October 9, 2024; |
| ● | “Investment Company Act” are to the Investment Company Act of 1940, as amended; |
| ● | “IPO Promissory Note” are to that certain unsecured promissory note in the principal amount of up to $300,000 issued to our Sponsor on May 13, 2024; |
| ● | “IPO Registration Statement” are to the Registration Statement on Form S-1 initially filed with the SEC on July 24, 2024, as amended, and declared effective on October 7, 2024 (File No. 333-280965); |
| ● | “Management” or our “Management Team” are to our executive officers and directors; |
| ● | “Nasdaq” are to The Nasdaq Stock Market LLC; |
| ● | “Nasdaq 36-Month Requirement” are to the requirement pursuant to the Nasdaq Rules (as defined below) that a SPAC (as defined below) must complete one or more Business Combinations within 36 months following the effectiveness of its initial public offering registration statement; |
| ● | “Nasdaq Rules” are to the continued listing rules of Nasdaq, as they exist as of the date of this Report; |
| ● | “Option Units” are to the 3,000,000 units that were purchased by the underwriters of the Initial Public Offering pursuant to the full exercise of the Over-Allotment Option (as defined below); |
| ● | “Ordinary Shares” are to the Class A Ordinary Shares and the Class B Ordinary Shares, together; |
| ● | “Over-Allotment Option” are to the 45-day option that the underwriters of the Initial Public Offering had to purchase up to an additional 3,000,000 Option Units to cover over-allotments, if any, pursuant to the Underwriting Agreement (as defined below), which was fully exercised; |
| ● | “Private Placement” are to the private placement of Private Placement Warrants (as defined below) that occurred simultaneously with the closing of our Initial Public Offering, pursuant to the Private Placement Warrants Agreements (as defined below); |
| ● | “Private Placement Warrants” are to the warrants issued to our Sponsor and Cantor in the Private Placement; |
| ● | “Private Placement Warrants Purchase Agreements” are to (i) Private Placement Warrants Purchase Agreement, dated October 7, 2024, which we entered into with our Sponsor and (ii) the Private Placement Warrants Purchase Agreement, dated October 7, 2024, which we entered into with Cantor, together; |
| ● | “Public Shareholders” are to the holders of our Public Shares, including our Sponsor and Management Team to the extent our Sponsor and/or the members of our Management Team purchase Public Shares, provided that our Sponsor and each member of our Management Team’s status as a “Public Shareholder” will only exist with respect to such Public Shares; |
iii
| ● | “Public Shares” are to the Class A Ordinary Shares sold as part of the Units (as defined below) in our Initial Public Offering (whether they were purchased in our Initial Public Offering or thereafter in the open market); |
| ● | “Public Warrants” are to the redeemable warrants sold as part of the Units in our Initial Public Offering (whether they were subscribed for in our Initial Public Offering or purchased in the open market); |
| ● | “Registration Rights Agreement” are to Registration Rights Agreement, dated October 7, 2024, which we entered into with the Sponsor and the other holders party thereto; |
| ● | “Report” are to this Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2025; |
| ● | “SEC” are to the U.S. Securities and Exchange Commission; |
| ● | “Securities Act” are to the Securities Act of 1933, as amended; |
| ● | “SPAC” are to a special purpose acquisition company; |
| ● | “Sponsor” are to Launch Two Sponsor LLC, a Delaware limited liability company; |
| ● | “Trust Account” are to the U.S.-based trust account in which an amount of $231,150,000 from the net proceeds of the sale of the Units in the Initial Public Offering and the Private Placement Warrants in the Private Placement was placed following the closing of the Initial Public Offering; |
| ● | “Underwriting Agreement” are to the Underwriting Agreement, dated October 7, 2024, which we entered into with Cantor, as representative of the several underwriters of the Initial Public Offering; |
| ● | “Units” are to the units sold in our Initial Public Offering, which consist of one Public Share and one-half of one Public Warrant; |
| ● | “Warrants” are to the Private Placement Warrants and the Public Warrants, together; and |
| ● | “Working Capital Loans” are to funds that, in order to provide working capital or finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor or certain of our directors and officers may, but are not obligated to, loan us. |
iv
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements.
LAUNCH TWO ACQUISITION CORP.
CONDENSED BALANCE SHEETS
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June 30,
2025 |
December 31, | |||||||
| (Unaudited) | 2024 | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash | $ |
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$ |
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| Prepaid expenses |
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| Total Current assets |
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| Long-term prepaid insurance |
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| Cash and marketable securities held in Trust Account |
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| TOTAL ASSETS | $ |
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$ |
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| LIABILITIES AND SHAREHOLDERS’ DEFICIT | ||||||||
| Current liabilities | ||||||||
| Accrued expenses | $ |
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$ |
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| Accrued offering costs |
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| Total Current liabilities |
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| Deferred underwriting fee payable |
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| TOTAL LIABILITIES |
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| COMMITMENTS AND CONTINGENCIES (Note 6) | ||||||||
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Class A Ordinary Shares subject to possible redemption,
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| SHAREHOLDERS’ DEFICIT | ||||||||
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Preferred shares, $
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Class A Ordinary Shares, $
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Class B Ordinary Shares, $
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| Additional paid-in capital | ||||||||
| Accumulated deficit |
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| TOTAL SHAREHOLDERS’ DEFICIT |
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(
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| TOTAL LIABILITIES AND SHAREHOLDERS’ DEFICIT | $ |
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$ |
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The accompanying notes are an integral part of
the unaudited condensed financial statements.
1
LAUNCH TWO ACQUISITION CORP.
CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
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For the Three Months
Ended June 30, 2025 |
For the
(Inception) Through
June 30,
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For the Six Months
Ended June 30, 2025 |
For the
(Inception) Through
June 30,
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| General and administrative expenses | $ |
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$ |
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$ |
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| Loss from operations |
(
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| Other income (expense): | ||||||||||||||||
| Interest earned on cash and marketable securities held in Trust Account |
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| Interest earned on operating cash account |
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| Unrealized gain on cash and marketable securities held in Trust Account |
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| Total other income, net |
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| Net income (loss) | $ |
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$ |
(
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$ |
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| Weighted average shares outstanding of redeemable Class A Ordinary Shares |
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| Basic and diluted net income per share, redeemable Class A Ordinary Shares | $ |
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$ | $ |
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$ | ||||||||||
| Weighted average shares outstanding of non-redeemable Class B Ordinary Shares (1) |
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| Basic and diluted net income (loss) per share, non-redeemable Class B Ordinary Shares | $ |
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$ |
(
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$ |
(
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| (1) | Excludes an aggregate of up to 750,000 Class B Ordinary Shares subject to forfeiture by the holders thereof depending on the extent to which the Over-Allotment Option was exercised (see Note 5). On October 9, 2024, the Company consummated its Initial Public Offering and sold 23,000,000 Units, including 3,000,000 Option Units sold pursuant to the full exercise of the Over-Allotment Option; consequently, the 750,000 Class B Ordinary Shares were no longer subject to forfeiture. |
The accompanying notes are an integral part of the unaudited condensed financial statements.
2
LAUNCH TWO ACQUISITION CORP.
CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS’ DEFICIT
(UNAUDITED)
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025
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Class A
Ordinary Shares |
Class B
Ordinary Shares |
Additional
Paid-in |
Accumulated |
Total
Shareholders’ |
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| Shares | Amount | Shares | Amount | Capital | Deficit | Deficit | ||||||||||||||||||||||
| Balance – December 31, 2024 | $ |
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$ |
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$ | $ |
(
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(
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| Accretion for Class A Ordinary Shares to redemption value | — | — |
(
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(
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| Net income | — | — |
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| Balance – March 31, 2025 |
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(
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| Accretion for Class A Ordinary Shares to redemption value | — | — |
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| Net income | — | — |
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| Balance – June 30, 2025 (Unaudited) | $ |
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$ |
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$ | $ |
(
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(
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FOR THE PERIOD FROM MAY 13, 2024 (INCEPTION) THROUGH JUNE 30, 2024
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Class A
Ordinary Shares |
Class B
Ordinary Shares |
Additional
Paid-in |
Accumulated |
Total
Shareholders’ |
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| Shares | Amount | Shares | Amount | Capital | Deficit | Deficit | ||||||||||||||||||||||
| Balance – May 13, 2024 (inception) | $ | $ | $ | $ | $ | |||||||||||||||||||||||
| Class B Ordinary Shares issued to the Sponsor |
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| Net loss | — | — |
(
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(
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| Balance – June 30, 2024 (Unaudited) |
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$ |
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$ |
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$ |
(
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(
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The accompanying notes are an integral part of the unaudited condensed financial statements.
3
LAUNCH TWO ACQUISITION CORP.
CONDENSED STATEMENT OF CASH FLOWS
(UNAUDITED)
|
For
The
Six Months Ended June 30, |
For
The
Period from May 13, 2024 (Inception) To June 30, |
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| 2025 | 2024 | |||||||
| Cash Flows from Operating Activities: | ||||||||
| Net income (loss) | $ |
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$ |
(
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| Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||||||||
| Payment of expenses through IPO Promissory Note – related party |
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| General and administrative costs applied to prepaids contributed by Sponsor through IPO Promissory Note – related party |
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| Interest earned on marketable securities held in Trust Account |
(
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| Unrealized gain on marketable securities held in Trust Account |
(
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| Changes in operating assets and liabilities: | ||||||||
| Prepaid expenses |
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| Long-term prepaid insurance |
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| Accrued expenses |
(
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| Net cash used in operating activities |
(
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| Net Change in Cash |
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| Cash – Beginning of period |
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| Cash – End of period | $ |
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$ | |||||
| Non-Cash investing and financing activities: | ||||||||
| Deferred offering costs paid by Sponsor in exchange for issuance of Class B Ordinary Shares | $ | $ |
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| Deferred costs included in accrued offering costs | $ | $ |
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| Deferred offering costs contributed by Sponsor through IPO Promissory Note – related party | $ | $ |
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| Prepaid services contributed by Sponsor through the IPO Promissory Note – related party | $ | $ |
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The accompanying notes are an integral part of the unaudited condensed financial statements.
4
LAUNCH TWO ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2025
(UNAUDITED)
NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS
Launch Two Acquisition Corp. (the “Company”) is a blank check company incorporated as a Cayman Islands exempted corporation on May 13, 2024. The Company was incorporated for the purpose of effecting a merger, amalgamation, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses (the “Business Combination”). As of June 30, 2025, the Company had not selected any specific Business Combination target. The Company may pursue an initial Business Combination in any business or industry. The Company is an early-stage and emerging growth company and, as such, the Company is subject to all of the risks associated with early-stage and emerging growth companies.
As of June 30, 2025, the Company had not commenced any operations. All activities for the period from May 13, 2024 (inception) through June 30, 2025 related to the Company’s formation, and since the Initial Public Offering (as defined below), and subsequent to the Initial Public Offering, identifying a target company for a Business Combination. The Company will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest. The Company generates non-operating income in the form of interest income on investments from the proceeds derived from the Initial Public Offering. The Company has selected December 31 as its fiscal year end.
The Registration Statement on Form S-1 for the
Initial Public Offering, initially filed with the U.S. Securities and Exchange Commission (the “SEC”) on July 24, 2024, as
amended (File No. 333-280965), was declared effective on October 7, 2024 (the “IPO Registration Statement”). On October 9,
2024, the
Company
consummated the initial public offering of
Simultaneously with the closing of the Initial
Public Offering, the Company consummated the sale of an aggregate of
Additionally, at the closing of the Initial
Public Offering on October 9, 2024, the Company paid the underwriters of the Initial Public Offering the cash underwriting discount of
Transaction costs amounted to $
The Company’s management (“Management”) has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering and the Private Placement, although substantially all of the net proceeds are intended to be generally applied toward consummating a Business Combination (less deferred underwriting commissions).
5
LAUNCH TWO ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2025
(UNAUDITED)
The Business Combination must be with one or more
target businesses that together have a fair market value equal to at least
Following the closing of the Initial Public Offering,
on October 9, 2024, an amount of $
The Company will provide the Public Shareholders
with the opportunity to redeem all or a portion of their Public Shares upon the completion of the initial Business Combination either
(i) in connection with a general meeting called to approve the initial Business Combination or (ii) without a shareholder vote
by means of a tender offer. The decision as to whether the Company will seek shareholder approval of a proposed initial Business Combination
or conduct a tender offer will be made by the Company, solely in its discretion. The Public Shareholders will be entitled to redeem their
shares at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account calculated as of two business days
prior to the consummation of the initial Business Combination, including interest earned on the funds held in the Trust Account (less
taxes payable, if any), divided by the number of then outstanding Public Shares, subject to the limitations of applicable law and the
Amended and Restated Articles. As of June 30, 2025, the amount in the Trust Account was $
The Ordinary Shares (as defined in Note 5) subject to redemption were recorded at a redemption value and classified as temporary equity at the completion of the Initial Public Offering, in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 480, “Distinguishing Liabilities from Equity” (“ASC 480”).
The Company has only the duration of the Combination
Period to complete the initial Business Combination. However, if the Company is unable to complete its initial Business Combination within
the Combination Period, the Company will cease all operations except for the purpose of winding up and as promptly as reasonably possible,
but not more than ten business days after the Combination Period, redeem the Public Shares, at a per-share price, payable in
cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account
(less taxes payable and up to $
6
LAUNCH TWO ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2025
(UNAUDITED)
The Sponsor, officers and directors have entered
into a letter agreement with the Company, dated July 11, 2024, pursuant to which they have agreed to (i) waive their redemption rights
with respect to their Founder Shares (as defined in Note 5) and Public Shares in connection with (x) the completion of the initial Business
Combination or an earlier redemption in connection with the commencement of the procedures to consummate the initial Business Combination
if the Company determines it is desirable to facilitate the completion of the initial Business Combination and (y) a shareholder vote
to approve an amendment to the Amended and Restated Articles to modify (1) the substance or timing of the Company’s obligation to
allow redemption in connection with the initial Business Combination or to redeem
The Sponsor has agreed that it is liable to the
Company if and to the extent any claims by a third party for services rendered or products sold to the Company, or a prospective target
business with which the Company has entered into a written letter of intent, confidentiality or other similar agreement or Business Combination
agreement, reduce the amount of funds in the Trust Account to below the lesser of (i) $
Liquidity, Capital Resources and Going Concern
As of June 30, 2025, the Company had operating
cash of $
The Company has incurred and expects to continue to incur significant costs in pursuit of its acquisition plans. The Company may need to raise additional capital through loans or additional investments from its Sponsor, shareholders, officers, directors, or third parties. The Company’s officers, directors and Sponsor may, but are not obligated to, loan the Company funds, from time to time or at any time, in whatever amount they deem reasonable in their sole discretion, to meet the Company’s working capital needs. Accordingly, the Company may not be able to obtain additional financing. If the Company is unable to raise additional capital, it may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing operations, suspending the pursuit of a potential transaction, and reducing overhead expenses. The Company cannot provide any assurance that new financing will be available to it on commercially acceptable terms, if at all. If the Company is unable to complete the Business Combination because it does not have sufficient funds available, the Company will be forced to cease operations and liquidate the Trust Account. These conditions raise substantial doubt about the Company’s ability to continue as a going concern one year from the date that the accompanying unaudited condensed financial statements are issued (a “Going Concern”).
7
LAUNCH TWO ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2025
(UNAUDITED)
In connection with the Company’s assessment of going concern considerations in accordance with FASB ASC Topic 205-40, “Presentation of Financial Statements- Going Concern,” Management has determined the Company’s liquidity condition, the date of mandatory liquidation and subsequent dissolution raise substantial doubt about the Company’s ability to continue as a Going Concern. The accompanying unaudited condensed financial statements do not include any adjustments that might result from the Company’s inability to continue as a Going Concern.
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X of the SEC. Certain information or footnote disclosures normally included in unaudited condensed financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows. In the opinion of Management, the accompanying unaudited condensed financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented.
The accompanying unaudited condensed financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024, as filed with the SEC on March 25, 2025. The interim results for the three and six months ended June 30, 2025, are not necessarily indicative of the results to be expected for the fiscal year ending December 31, 2025 or for any future periods.
Emerging Growth Company
The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the accompanying unaudited condensed financial statements with another public company that is neither an (i) emerging growth company nor (ii) emerging growth company that has opted out of using the extended transition period, difficult or impossible because of the potential differences in accounting standards used.
Use of Estimates
The preparation of the accompanying unaudited condensed financial statements in conformity with GAAP requires the Management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the accompanying unaudited condensed financial statements and the reported amounts of revenues and expenses during the reporting period.
8
LAUNCH TWO ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2025
(UNAUDITED)
Making estimates requires Management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the unaudited condensed financial statements, which Management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates.
Cash and Cash Equivalents
The Company considers all short-term investments
with an original maturity of three months or less when purchased to be cash equivalents. The Company had $
Cash and Marketable Securities Held in Trust Account
At June 30, 2025 and December 31, 2024, substantially
all the assets held in the Trust Account amounting to $
For the three and six months ended June 30, 2025, the Company recorded
$
Offering Costs
The Company complies with the requirements of FASB ASC Topic 340-10-S99 and SEC Staff Accounting Bulletin Topic 5A, “Expenses of Offering.” Offering costs consist principally of professional and registration fees that are related to the Initial Public Offering. FASB ASC Topic 470-20, “Debt with Conversion and Other Options,” addresses the allocation of proceeds from the issuance of convertible debt into its equity and debt components. The Company applies this guidance to allocate Initial Public Offering proceeds from the Units between Public Shares and Public Warrants, using the residual method by allocating Initial Public Offering proceeds first to assigned value of the Public Warrants and then to the Public Shares. Offering costs allocated to the Public Shares were charged to temporary equity. Offering costs allocated to the Warrants were charged to shareholders’ deficit as the Warrants were accounted for under equity treatment based on the equity classification of the underlying financial instruments, after Management’s evaluation.
Concentration of Credit Risk
Financial instruments that potentially subject
the Company to concentrations of credit risk consist of a cash account in a financial institution, which, at times, may exceed the Federal
Deposit Insurance Corporation coverage limit of $
9
LAUNCH TWO ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2025
(UNAUDITED)
Fair Value of Financial Instruments
The fair value of the Company’s assets and liabilities, which qualify as financial instruments under FASB ASC Topic 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the accompanying condensed balance sheets, primarily due to its short-term nature.
Income Taxes
The Company accounts for income taxes under FASB ASC Topic 740, “Income Taxes,” which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed for differences between the accompanying unaudited condensed financial statements and tax bases of assets and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
ASC 740 prescribes a recognition threshold and a measurement attribute for the accompanying unaudited condensed financial statements recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. Management determined that the Cayman Islands is the Company’s only major tax jurisdiction. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. As of June 30, 2025 and December 31, 2024, there were no unrecognized tax benefits and no amounts accrued for interest and penalties. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position.
The Company is considered to be an exempted Cayman
Islands company with no connection to any other taxable jurisdiction and is presently not subject to income taxes or income tax filing
requirements in the Cayman Islands or the United States. As such, the Company’s tax provision was
Warrant Instruments
The Company accounted for
Class A Ordinary Shares Subject to Possible Redemption
The Public Shares contain a redemption feature
that allows for the redemption of such Public Shares in connection with the Company’s liquidation, or if there is a shareholder
vote or tender offer in connection with the Company’s initial Business Combination. In accordance with FASB ASC Topic 480-10-S99,
the Company classifies Public Shares subject to redemption outside of permanent equity as the redemption provisions are not solely within
the control of the Company. The Company recognizes changes in redemption value immediately as they occur and will adjust the carrying
value of redeemable shares to equal the redemption value at the end of each reporting period. At closing of the Initial Public Offering,
the Company recognized the accretion from initial book value to redemption value. The change in the carrying value of redeemable shares
will result in charges against additional paid-in capital (to the extent available) and accumulated deficit. Accordingly, as of June 30,
2025 and December 31, 2024, Class A Ordinary Shares subject to possible redemption are presented at redemption value as temporary equity,
outside of the shareholders’ deficit section of the accompanying condensed balance sheets.
| Gross proceeds | $ |
|
||
| Less: | ||||
| Proceeds allocated to Public Warrants |
(
|
) | ||
| Class A Ordinary Shares issuance costs |
(
|
) | ||
| Plus: | ||||
| Accretion of carrying value to redemption value |
|
|||
| Class A Ordinary Shares subject to possible redemption, December 31, 2024 | $ |
|
||
| Plus: | ||||
| Accretion of carrying value to redemption value |
|
|||
| Class A Ordinary Shares subject to possible redemption, March 31, 2025 | $ |
|
||
| Plus: | ||||
| Accretion of carrying value to redemption value |
|
|||
| Class A Ordinary Shares subject to possible redemption, June 30, 2025 | $ |
|
10
LAUNCH TWO ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2025
(UNAUDITED)
Net Income (Loss) per Ordinary Share
Net income (loss) per Ordinary Share is computed
by dividing net income (loss) by the weighted average number of Ordinary Shares outstanding during the period, excluding Ordinary Shares
subject to forfeiture. Weighted average shares were reduced for the effect of an aggregate of
The table below presents a reconciliation of the numerator used to compute basic and diluted net income per Ordinary Share:
|
Three Months Ended
June 30, 2025 |
Six Months Ended
June 30, 2025 |
For the Period
From May 13, 2024 (Inception) Through June 30, 2024 |
||||||||||||||||||||||
| Class A | Class B | Class A | Class B | Class A | Class B | |||||||||||||||||||
| Basic and diluted net income (loss) per Ordinary Share | ||||||||||||||||||||||||
| Numerator: | ||||||||||||||||||||||||
| Allocation of net income (loss) | $ |
|
$ |
|
$ |
|
$ |
|
$ | $ |
(
|
) | ||||||||||||
| Denominator: | ||||||||||||||||||||||||
| Basic and diluted weighted average Ordinary Shares outstanding |
|
|
|
|
|
|||||||||||||||||||
| Basic and diluted net income (loss) per Ordinary Share | $ |
|
$ |
|
$ |
|
$ |
|
$ | $ |
(
|
) | ||||||||||||
Recent Accounting Pronouncements
In November 2024, the FASB issued Accounting Standards Update (“ASU”) Topic 2024-03, “Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses” (“ASU 2024-03”), requiring public entities to disclose additional information about specific expense categories in the notes to the financial statements on an interim and annual basis. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and for interim periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2024-03.
Management does not believe that any other recently issued, but not effective, accounting standards, if currently adopted, would have a material effect on the accompanying unaudited condensed financial statements.
NOTE 3. INITIAL PUBLIC OFFERING
Units
Pursuant to the Initial Public Offering, on October
9, 2024, the Company sold
11
LAUNCH TWO ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2025
(UNAUDITED)
NOTE 4. PRIVATE PLACEMENT
Simultaneously with the closing of the Initial
Public Offering, the Sponsor and Cantor Fitzgerald & Co. (“Cantor) purchased an aggregate of
The Private Placement Warrants are identical to
the Public Warrants sold in the Initial Public Offering except that, so long as they are held by the Sponsor, Cantor, or their permitted
transferees, the Private Placement Warrants (i) may not (including the Class A Ordinary Shares issuable upon exercise of these
Private Placement Warrants), subject to certain limited exceptions, be transferred, assigned or sold by the holders until
NOTE 5. RELATED PARTY TRANSACTIONS
Founder Shares
On May 13, 2024, the Sponsor made a capital
contribution of $
The holder of the Founder Shares have agreed not
to transfer, assign or sell any of their Founder Shares and any Class A Ordinary Shares issued upon conversion thereof until the
earlier to occur of (i)
IPO Promissory Note
The Sponsor agreed to loan the Company an aggregate
of up to $
12
LAUNCH TWO ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2025
(UNAUDITED)
Administrative Services Agreement
The Company entered into an agreement with an
affiliate of the Sponsor pursuant to which, commencing on October 7, 2024, through the earlier of consummation of the initial Business
Combination or the liquidation, the Company pays an aggregate of $
Working Capital Loans
In order to finance transaction costs in connection
with a Business Combination, the Sponsor or an affiliate of the Sponsor or certain of the Company’s officers and directors may,
but are not obligated to, loan the Company funds as may be required (the “Working Capital Loans”). If the Company completes
a Business Combination, the Company would repay the Working Capital Loans. In the event that a Business Combination does not close, the
Company may use a portion of the working capital held outside the Trust Account to repay the Working Capital Loans, but no proceeds from
the Trust Account would be used to repay the Working Capital Loans. Up to $
NOTE 6. COMMITMENTS AND CONTINGENCIES
Risks and Uncertainties
The Company’s ability to complete an initial Business Combination may be adversely affected by various factors, many of which are beyond the Company’s control. The Company’s ability to consummate an initial Business Combination could be impacted by, among other things, changes in laws or regulations, downturns in the financial markets or in economic conditions, inflation, fluctuations in interest rates, increases in tariffs, supply chain disruptions, declines in consumer confidence and spending, public health considerations, and geopolitical instability, such as the military conflicts in Ukraine and the Middle East. The Company cannot at this time predict the likelihood of one or more of the above events, their duration or magnitude or the extent to which they may negatively impact the Company’s ability to complete an initial Business Combination.
Registration Rights
The holders of the Founder Shares, Private Placement Warrants and the Class A Ordinary Shares issuable upon exercise of such Private Placement Warrants and warrants that may be issued upon conversion of the Working Capital Loans have registration rights to require the Company to register a sale of any of the Company’s securities held by them and any other securities of the Company acquired by them prior to the consummation of the initial Business Combination pursuant to a registration rights agreement, dated October 7, 2024. The holders of these securities are entitled to make up to three demands, excluding short form demands, that the Company registers such securities. In addition, the holders have certain piggyback registration rights with respect to registration statements filed subsequent to the completion of the initial Business Combination. The Company will bear the expenses incurred in connection with the filing of any such registration statements. In addition, Cantor may participate in a piggyback registration only during the seven-year period beginning on the effective date of the IPO Registration Statement.
Underwriters’ Agreement
The underwriters had a
The underwriters were entitled to a cash underwriting
discount of $
13
LAUNCH TWO ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2025
(UNAUDITED)
NOTE 7. SHAREHOLDERS’ DEFICIT
Preference Shares
The Company is authorized to issue a total of
Class A Ordinary Shares
The Company is authorized to issue a total of
Class B Ordinary Shares
The Company is authorized to issue a total of
The Founder Shares will automatically convert
into Class A Ordinary Shares concurrently with or immediately following the consummation of the initial Business Combination or earlier
at the option of the holder on a one-for-one basis, subject to adjustment for share subdivisions, share capitalizations, reorganizations,
recapitalizations and the like, and subject to further adjustment as provided herein. In the case that additional Class A Ordinary
Shares, or any other equity-linked securities, are issued or deemed issued in excess of the amounts sold in the Initial Public Offering
and related to or in connection with the closing of the initial business combination, the ratio at which Class B Ordinary Shares
convert into Class A Ordinary Shares will be adjusted (unless the holders of a majority of the outstanding Class B Ordinary
Shares agree to waive such adjustment with respect to any such issuance or deemed issuance) so that the number of Class A Ordinary
Shares issuable upon conversion of all Class B Ordinary Shares will equal, in the aggregate,
Holders of record of the Ordinary Shares are entitled
to
14
LAUNCH TWO ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2025
(UNAUDITED)
Warrants
As of March 31, 2025 and December 31, 2024, there
were
The Company will not be obligated to deliver any Class A Ordinary Shares pursuant to the exercise of a Warrant and will have no obligation to settle such Warrant exercise unless a registration statement under the Securities Act with respect to the Class A Ordinary Shares issuable upon exercise of the warrants is then effective and a prospectus relating thereto is current. No warrant will be exercisable and the Company will not be obligated to issue a Class A Ordinary Share upon exercise of a warrant unless the Class A Ordinary Share issuable upon such warrant exercise has been registered, qualified or deemed to be exempt under the securities laws of the state of residence of the registered holder of the Warrants. In the event that the conditions in the two immediately preceding sentences are not satisfied with respect to a Warrant, the holder of such Warrant will not be entitled to exercise such Warrant and such Warrant may have no value and expire worthless. In no event will the Company be required to net cash settle any Warrant. In the event that a registration statement is not effective for the exercised Warrants, the purchaser of a unit containing such Warrant will have paid the full purchase price for the unit solely for the Class A Ordinary Share underlying such unit.
Under the terms of the Warrant Agreement, dated
October 7, 2024, by and between the Company and Continental (the “Warrant Agreement”), the Company has agreed that, as soon
as practicable, but in no event later than
If the holders exercise their Public Warrants
on a cashless basis, they would pay the warrant exercise price by surrendering the warrants for that number of Class A Ordinary Shares
equal to the quotient obtained by dividing (x) the product of the number of Class A Ordinary Shares issuable upon exercise of the Warrants,
multiplied by the excess of the “fair market value” of the Class A Ordinary Shares over the exercise price of the warrants
by (y) the fair market value. The “fair market value” is the average reported closing price of the Class A Ordinary Shares
for the
15
LAUNCH TWO ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2025
(UNAUDITED)
Redemption of Warrants When the Price
per Class A Ordinary Share Equals or Exceeds $
Once the Warrants become exercisable, the Company may redeem the Public Warrants:
| ● | in whole and not in part; |
| ● |
at a price of $
|
| ● |
upon a minimum of
|
| ● |
if, and only if, the closing
price of the Class A Ordinary Shares equals or exceeds $
|
Additionally, if the number of outstanding Class A Ordinary Shares is increased by a share capitalization payable in Class A Ordinary Shares, or by a subdivision of Ordinary Shares or other similar event, then, on the effective date of such share capitalization, subdivision or similar event, the number of Class A Ordinary Shares issuable upon exercise of each Warrant will be increased in proportion to such increase in the outstanding Ordinary Shares. A rights offering made to all or substantially all holders of Ordinary Shares entitling holders to purchase Class A Ordinary Shares at a price less than the fair market value will be deemed a share capitalization of a number of Class A Ordinary Shares equal to the product of (i) the number of Class A Ordinary Shares actually sold in such rights offering (or issuable under any other equity securities sold in such rights offering that are convertible into or exercisable for Class A Ordinary Shares) and (ii) the quotient of (x) the price per Class A Ordinary Share paid in such rights offering and (y) the fair market value. For these purposes (i) if the rights offering is for securities convertible into or exercisable for Class A Ordinary Shares, in determining the price payable for Class A Ordinary Shares, there will be taken into account any consideration received for such rights, as well as any additional amount payable upon exercise or conversion and (ii) fair market value means the volume weighted average price of Class A Ordinary Shares as reported during the (10) trading day period ending on the trading day prior to the first date on which the Class A Ordinary Shares trade on the applicable exchange or in the applicable market, regular way, without the right to receive such rights.
NOTE 8. FAIR VALUE MEASUREMENTS
The fair value of the Company’s financial assets and liabilities reflects Management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:
| Level 1: | Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis. | |
| Level 2: | Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active. | |
| Level 3: | Unobservable inputs based on assessment of the assumptions that market participants would use in pricing the asset or liability. |
16
LAUNCH TWO ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2025
(UNAUDITED)
At June 30, 2025, assets held in the Trust Account
were comprised of $
At December 31, 2024, assets held in the Trust
Account were comprised of $
The following table presents information about the Company’s assets that are measured at fair value on June 30, 2025 and December 31, 2024, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:
| Held-To-Maturity | Level |
Amortized
Cost |
Gross
Holding Loss |
Fair Value | ||||||||||||||
| June 30, 2025 | U.S. Treasury Bills (Mature on 7/10/2025) | 1 | $ |
|
$ |
|
$ |
|
||||||||||
| Cash held in money markets | 1 | $ |
|
$ | $ |
|
||||||||||||
| Held-To-Maturity | Level |
Amortized
Cost |
Gross
Holding Loss |
Fair Value | ||||||||||||||
| December 31, 2024 | U.S. Treasury Bills (Mature on 4/10/2025) | 1 | $ |
|
$ |
|
$ |
|
||||||||||
| Cash held in money markets | 1 | $ |
|
$ | $ |
|
||||||||||||
The following table presents information about the Company’s equity that is measured at fair value on October 9, 2024, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:
| Level |
October 9,
2024 |
|||||||
| Equity: | ||||||||
| Fair value of Public Warrants for the Class A Ordinary Shares subject to possible redemption allocation | 3 | $ |
|
|||||
The fair value of Public Warrants was determined
using Monte Carlo Simulation Model. The Public Warrants have been classified within shareholders’ deficit and will not require remeasurement
after issuance.
|
October 9,
2024 |
||||
| Share price | $ |
|
||
| Exercise price | $ |
|
||
| Term (years) |
|
|||
| Risk-free rate |
|
% | ||
| Volatility |
|
% | ||
NOTE 9. SEGMENT INFORMATION
FASB ASC Topic 280, “Segment Reporting,” establishes standards for companies to report in their unaudited condensed financial statements information about operating segments, products, services, geographic areas, and major customers. Operating segments are defined as components of an enterprise that engage in business activities from which it may recognize revenues and incur expenses, and for which separate financial information is available that is regularly evaluated by the company’s chief operating decision maker (“CODM”), or group, in deciding how to allocate resources and assess performance.
17
LAUNCH TWO ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2025
(UNAUDITED)
The CODM assesses performance for the single segment
and decides how to allocate resources based on net income that also is reported on the condensed statement of operations as net income.
The measure of segment assets is reported on the condensed balance sheets as total assets.
|
June 30,
2025 |
December 31,
2024 |
|||||||
| Trust Account | $ |
|
$ |
|
||||
| Cash | $ |
|
$ |
|
||||
|
For the Three Months Ended
June 30, 2025 |
For the Six Months Ended
June 30, 2025 |
|||||||
| General and administrative costs | $ |
|
$ |
|
||||
| Interest earned on the Trust Account | $ |
|
$ |
|
||||
|
For the Period from May 13, 2024 (Inception) Through
June 30, 2024 |
||||
| General and administrative costs | $ |
|
||
| Interest earned on the Trust Account | $ | |||
The CODM reviews interest earned on the Trust Account to measure and monitor shareholder value and determine the most effective strategy of investment with the Trust Account funds while maintaining compliance with the trust agreement. General and administrative expenses are reviewed and monitored by the CODM to manage and forecast cash to ensure enough capital is available to complete a Business Combination within the Combination Period. The CODM also reviews general and administrative costs to manage, maintain and enforce all contractual agreements to ensure costs are aligned with all agreements and budget. The accounting policies used to measure the profit and loss of the segment are the same as those described in the summary of significant accounting policies. General and administrative costs, as reported on the accompanying unaudited condensed statements of operations, are the significant segment expenses provided to the CODM on a regular basis.
All other segment items included in net income are reported on the accompanying unaudited condensed statements of operations and described within their respective disclosures.
NOTE 10. SUBSEQUENT EVENTS
The Company evaluated subsequent events and transactions that occurred after the accompanying condensed balance sheet date up to the date that the accompanying unaudited condensed financial statements was issued. Based upon this review, the Company did not identify any subsequent events that would have required adjustment or disclosure in the accompanying unaudited condensed financial statements.
18
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Cautionary Note Regarding Forward-Looking Statements
All statements other than statements of historical fact included in this Report including, without limitation, statements under this Item regarding our financial position, business strategy and the plans and objectives of Management for future operations, are forward-looking statements. When used in this Report, words such as “anticipate,” “believe,” “estimate,” “expect,” “intend” and similar expressions, as they relate to us or our Management, identify forward-looking statements. Such forward-looking statements are based on the beliefs of our Management, as well as assumptions made by, and information currently available to, our Management. Actual results could differ materially from those contemplated by the forward-looking statements as a result of certain factors detailed in our filings with the SEC. All subsequent written or oral forward-looking statements attributable to us or persons acting on our behalf are qualified in their entirety by this paragraph.
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the unaudited condensed financial statements and the notes thereto included in this Report under “Item 1. Financial Statements”.
Overview
We are a blank check company incorporated in the Cayman Islands on May 13, 2024, formed for the purpose of effecting a Business Combination with one or more businesses or entities. We intend to effectuate our Business Combination using cash derived from the proceeds of the Initial Public Offering and the Private Placement, our securities, debt or a combination of cash, securities and debt.
We expect to continue to incur significant costs in the pursuit of our acquisition plans. We cannot assure our shareholders that our plans to complete a Business Combination will be successful.
We may seek to extend the Combination Period consistent with applicable laws, regulations and stock exchange rules by amending our Amended and Restated Articles. Any such amendment would require the approval of our Public Shareholders, who will be provided the opportunity to redeem all or a portion of their Public Shares in connection with the vote on such approval. Such redemptions will decrease the amount held in our Trust Account and our capitalization, and may affect our ability to maintain our listing on Nasdaq. In addition, the Nasdaq Rules currently require SPACs (such as us) to complete their initial Business Combination in accordance with the Nasdaq 36-Month Requirement. If we do not meet the Nasdaq 36-Month Requirement, our securities will likely be subject to a suspension of trading and delisting from Nasdaq. Our Sponsor may also, in its discretion, consider selling its interest in our Company to another sponsor entity, which may result in a change to our Management Team.
Results of Operations
We have neither engaged in any operations nor generated any revenues to date. Our only activities since May 13, 2024 (inception) through June 30, 2025 have been (i) organizational activities and (ii) activities relating to (x) the Initial Public Offering and (y) identifying and evaluating prospective acquisition candidates and activities in connection with the initial Business Combination. We will not generate any operating revenues until after completion of our initial Business Combination. We have generated non-operating income in the form of interest income on investments held in the Trust Account after the Initial Public Offering. There has been no significant change in our financial or trading position since the date of our audited financial statements, as filed in our 2024 Annual Report. We expect to incur increased expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance, among other things), as well as for due diligence expenses.
For the three months ended June 30, 2025, we had net income of $2,367,013, which consists of interest income on cash and marketable securities held in the Trust Account of $2,544,350, unrealized loss on marketable securities held in Trust Account of $2,048 and interest on operating cash of $187, partially offset by general and administrative costs of $175,476.
For the six months ended June 30, 2025, we had net income of $4,582,865, which consists of interest income on cash and marketable securities held in the Trust Account of $4,940,148, unrealized gain on marketable securities held in Trust Account of $25,679 and interest on operating cash of $411, partially offset by general and administrative costs of $383,373.
For the period from May 13, 2024 (inception) through June 30, 2024, we had net loss of $39,060, which consists of general and administrative costs.
19
Liquidity, Capital Resources and Going Concern]
Until the consummation of the Initial Public Offering, our only source of liquidity was an initial purchase of Founder Shares by the Sponsor and loans from the Sponsor pursuant to the IPO Promissory Note.
On May 13, 2024, the Sponsor loaned us an aggregate of up to $300,000 to cover expenses related to the Initial Public Offering pursuant to the IPO Promissory Note. This loan was non-interest bearing and payable on the earlier of December 31, 2024, or the date on which we consummated the Initial Public Offering. We repaid all the outstanding balance of the IPO Promissory Note at the closing of the Initial Public Offering on October 9, 2024. Borrowings under the IPO Promissory Note are no longer available.
We consummated the Initial Public Offering of 23,000,000 Units at $10.00 per Unit, including 3,000,000 Option Units issued pursuant to the full exercise of the Over-Allotment Option, generating gross proceeds of $230,000,000. Simultaneously with the closing of the Initial Public Offering and pursuant to the Private Placement Warrants Purchase Agreements, we consummated the sale of an aggregate of 7,075,000 Private Placement Warrants at a price of $1.00 per Private Placement Warrant, in a private placement to the Sponsor and Cantor, the representative of the underwriters of the Initial Public Offering, generating gross proceeds of $7,075,000.
For the six months ended June 30, 2025, cash used in operating activities was $316,414. Net income of $4,582,865 was affected by interest earned on marketable securities held in the Trust Account of $4,940,148, unrealized gain on marketable securities held in the Trust Account of $25,679. Changes in operating assets and liabilities used $66,548 of cash for operating activities.
For the period from May 13, 2024 (inception) through June 30, 2024, cash used in operating activities was $0. Net loss of $39,060 was affected by payment of expenses through the IPO Promissory Note of $33,620 and general and administrative costs applied to prepaids contributed by the Sponsor through the IPO Promissory Note of $5,106, Changes in operating assets and liabilities provided $334 of cash for operating activities.
As of June 30, 2025, we had marketable securities held in the Trust Account of $238,504,166. We intend to use substantially all of the funds held in the Trust Account, including any amounts representing interest earned on the Trust Account (less income taxes payable, if any), to complete our Business Combination. To the extent that our share capital or debt is used, in whole or in part, as consideration to complete our Business Combination, the remaining proceeds held in the Trust Account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies. To mitigate the risk that we might be deemed to be an investment company for purposes of the Investment Company Act, which risk increases the longer that we hold investments in the Trust Account, we may, at any time, (based on our Management Team’s ongoing assessment of all factors related to our potential status under the Investment Company Act) instruct the trustee to liquidate the investments held in the Trust Account and instead to hold the funds in the Trust Account in cash or in an interest-bearing demand deposit account at a bank.
As of June 30, 2025, we had cash of $619,287. We use the funds held outside the Trust Account primarily to identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from the offices, plants or similar locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses, and structure, negotiate and complete a Business Combination.
We have incurred and expect to continue to incur significant costs in pursuit of our acquisition plans. We will need to raise additional capital through loans or additional investments from our Sponsor, stockholders, officers, directors, or third parties. The Company’s officers, directors and Sponsor may, but are not obligated to, loan the Company funds, from time to time or at any time, in whatever amount they deem reasonable in their sole discretion, to meet the Company’s working capital needs. Accordingly, the Company may not be able to obtain additional financing. If we are unable to raise additional capital, we may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing operations, suspending the pursuit of a potential transaction, and reducing overhead expenses. We cannot provide any assurance that new financing will be available to us on commercially acceptable terms, if at all. If we are unable to complete the Business Combination because we do not have sufficient funds available, we will be forced to cease operations and liquidate the Trust Account. These conditions raise substantial doubt about our ability to continue as a going concern one year from the date that unaudited condensed financial statements and the notes thereto included in this Report under “Item 1. Financial Statements” are issued.
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In connection with our assessment of going concern considerations in accordance with FASB ASC Topic 205-40, “Presentation of Financial Statements- Going Concern,” Management has determined our liquidity condition raises substantial doubt about our ability to continue as a going concern through twelve months from the date unaudited condensed financial statements and the notes thereto included in this Report under “Item 1. Financial Statements” are available to be issued. Management plans to consummate the Business Combination. Thes unaudited condensed financial statements and the notes thereto included in this Report under “Item 1. Financial Statements” do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern.
Off-Balance Sheet Arrangements
We have no obligations, assets or liabilities, which would be considered off-balance sheet arrangements as of June 30, 2025. We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements. We have not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any non-financial assets.
Contractual Obligations
We do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities, other than as set for the below.
Administrative Services Agreement
Commencing on October 8, 2024, and until completion of our initial Business Combination or liquidation, we pay an affiliate of our Sponsor $12,500 per month for certain office space, utilities and secretarial and administrative services as may be reasonably required by our Company pursuant to the Administrative Services Agreement. Under the Administrative Services Agreement, there was $75,000 incurred and paid as of June 30, 2025. For the period from May 13, 2024 (inception) through June 30, 2024, the Company did not incur any of these fees.
Underwriting Agreement
The underwriters of the Initial Public Offering had a 45-day option from the date of the Initial Public Offering to purchase up to an additional 3,000,000 Option Units to cover over-allotments, if any. On October 9, 2024, simultaneously with the closing of the Initial Public Offering, the Over-Allotment Option was fully exercised to purchase the additional 3,000,000 Option Units at a price of $10.00 per Option Unit.
The underwriters of the Initial Public Offering were entitled to a cash underwriting discount of $4,000,000 (2.0% of the gross proceeds of the Units offered in the Initial Public Offering, excluding any proceeds from the Option Units sold pursuant to the full exercises of the Over-Allotment Option), which was paid at the closing of the Initial Public Offering. Additionally, the underwriters are entitled to the Deferred Fee of (i) 4.50% of the gross proceeds of the Initial Public Offering, excluding any proceeds from the Option Units sold pursuant to the full exercises of the Over-Allotment Option, and (ii) 6.50% of the gross proceeds sold pursuant to the exercise of the Over-Allotment Option, or $10,950,000 in the aggregate, payable upon the completion of our initial Business Combination subject to the terms of the Underwriting Agreement.
Critical Accounting Estimates and Policies
The preparation of the unaudited condensed financial statements and the notes thereto included in this Report under “Item 1. Financial Statements” in conformity with GAAP requires Management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of such unaudited condensed financial statements, and income and expenses during the period reported. Making estimates requires Management to exercise significant judgement. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the unaudited condensed financial statements included in this Report under “Item 1. Financial Statements”, which Management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could materially differ from those estimates. As of June 30, 2025, we did not have any critical accounting estimates to be disclosed.
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Recent Accounting Standards
In November 2024, the FASB issued ASU 2024-03, requiring public entities to disclose additional information about specific expense categories in the notes to the financial statements on an interim and annual basis. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and for interim periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2024-03.
Management does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the unaudited condensed financial statements and the notes thereto included in this Report under “Item 1. Financial Statements”.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise required under this Item.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Disclosure controls are procedures that are designed with the objective of ensuring that information required to be disclosed in our reports filed under the Exchange Act, such as this Report, is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures are also designed with the objective of ensuring that such information is accumulated and communicated to our Management, including our Certifying Officers, as appropriate, to allow timely decisions regarding required disclosure. Under the supervision and with the participation of our Management, including our Certifying Officers, we carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on the foregoing, our Certifying Officers concluded that our disclosure controls and procedures were effective as of June 30, 2025.
We do not expect that our disclosure controls and procedures will prevent all errors and all instances of fraud. Disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Further, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and the benefits must be considered relative to their costs. Because of the inherent limitations in all disclosure controls and procedures, no evaluation of disclosure controls and procedures can provide absolute assurance that we have detected all our control deficiencies and instances of fraud, if any. The design of disclosure controls and procedures also is based partly on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.
Changes in Internal Control over Financial Reporting
Not applicable.
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PART II – OTHER INFORMATION
Item 1. Legal Proceedings.
To the knowledge of our Management Team, there is no material litigation currently pending or contemplated against us, any of our officers or directors in their capacity as such or against any of our property.
Item 1A. Risk Factors.
As a smaller reporting company under Rule 12b-2 of the Exchange Act, we are not required to include risk factors in this Report. For additional risks relating to our operations , other than as set forth below, see the section titled “Risk Factors” contained in our (i) IPO Registration Statement, (ii) 2024 Annual Report and (iii) Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2025, as filed with the SEC on May 14, 2025. Any of these factors could result in a significant or material adverse effect on our results of operations or financial condition. Additional risks could arise that may also affect our ability to consummate an initial Business Combination. We may disclose changes to such risk factors or disclose additional risk factors from time to time in our future filings with the SEC.
There is substantial doubt about our ability to continue as a “going concern.”
In connection with our assessment of going concern considerations under applicable accounting standards, Management has determined that our possible need for additional financing to enable us negotiate and complete our initial Business Combination, as well as the deadline by which we may be required to liquidate our Trust Account, raise substantial doubt about our ability to continue as a going concern through approximately one year from the date the unaudited condensed financial statements included in Item 1. “Financial Statements” of this Report were issued.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Unregistered Sales of Equity Securities
There were no sales of unregistered securities during the quarterly period covered by the Report.
Use of Proceeds
There have been no offerings of registered securities and therefore no planned use of proceeds from such offerings during the quarterly period covered by the Report. For a description of the use of proceeds generated in our Initial Public Offering and Private Placement, see Part II, Item 2 of our Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2024, as filed with the SEC on November 19, 2024.There has been no material change in the planned use of proceeds from our Initial Public Offering and Private Placement as described in the IPO Registration Statement. The specific investments in our Trust Account may change from time to time.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
There were no such repurchases of our equity securities by us or an affiliate during the quarterly period covered by the Report.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety. Disclosures.
Not applicable.
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Item 5. Other Information.
Trading Arrangements
During the quarterly period ended June 30, 2025,
none of our directors or officers (as defined in Rule 16a-1(f) promulgated under the Exchange Act)
Additional Information
None.
Item 6. Exhibits.
The following exhibits are filed as part of, or incorporated by reference into, this Report.
| * | Filed herewith. |
| ** | Furnished herewith. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| Dated: August 14, 2025 | Launch Two Acquisition Corp. | |
| By: | /s/ Jay McEntee | |
| Name: | Jay McEntee | |
| Title: | Chief Executive Officer | |
| (Principal Executive Officer) | ||
| Dated: August 14, 2025 | By: | /s/ Jurgen van de Vyver |
| Name: | Jurgen van de Vyver | |
| Title: | Chief Financial Officer | |
| (Principal Financial and Accounting Officer) |
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