Activate Energy Acquisition (AEAQ) risk factors, FY2025 10-K

Other

1. 01Liquidity, Capital Resources and Going Concern
2. 02We do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities, other than agreements as described below
3. 03Critical Accounting Estimates
4. 04Recent Accounting Standards
5. 05Evaluation of Disclosure Controls and Procedures
6. 06Management’s Report on Internal Controls Over Financial Reporting
7. 07Changes in Internal Control over Financial Reporting
8. 08Directors and Executive Officers
9. 09Number and Terms of Office of Officers and Directors
10. 10Committees of the Board of Directors
11. 11Keith Byer serves as the chairman of the audit committee. Each member of the audit committee is financially literate and our board of directors has determined that each of Keith Byer and Paul Moore qualify as an “audit committee financial expert” as defined in applicable SEC rules
12. 12Compensation Committee Interlocks and Insider Participation
13. 13Code of Business Conduct and Ethics
14. 14(vi) duty to exercise independent judgment
15. 15Keith Byer Lake Tahoe South Shore Chamber of Commerce Business Association Director
16. 16We cannot assure you that any of the above-mentioned conflicts will be resolved in our favor
17. 17Limitation on Liability and Indemnification of Officers and Directors
18. 18We believe that these provisions, the insurance and the indemnity agreements are necessary to attract and retain talented and experienced officers and directors
19. 19Item 11. Executive Compensation
20. 20(1) Unless otherwise noted, the business address of each of the following is c/o Activate Energy Acquisition Corp., 71 Fort Street, Grand Cayman, Cayman Islands KY1-1106
21. 21(5) According to a Schedule 13G filed with the SEC on February 12, 2026 by Adage Capital Management, L.P., Robert Atchinson, and Phillip Gross (collectively, “Adage”), as of December 31, 2025, Adage owned 1,800,000 shares of the outstanding Class A ordinary shares of the Company
22. 22The firm of WithumSmith+Brown, PC, or Withum, acts as our independent registered public accounting firm. The following is a summary of fees paid to Withum for services rendered
23. 23Tax Fees. During the period from June 10, 2025 (inception) through December 31, 2025, our independent registered public accounting firm did not render services to us for tax compliance, tax advice and tax planning
24. 24Report of Independent Registered Public Accounting Firm (PCAOB ID Number 100) F-2
25. 25Opinion on the Financial Statement
26. 26Going Concern Uncertainty
27. 27Total Liabilities, Class A Ordinary Shares Subject to Possible Redemption, and Shareholders’ Deficit $ 231,760,639
28. 28Loss from operations (255,985 )
29. 29Diluted net income per share, Class B ordinary shares $ 0.03
30. 30Balance – December 31, 2025 645,000 $ 65 7,666,667 $ 767 $ — $ (7,022,941 ) $ (7,022,109 )
31. 31FOR THE PERIOD FROM JUNE 10, 2025 (INCEPTION) THROUGH DECEMBER 31, 2025
32. 32Interest earned on investments held in Trust Account (556,356 )
33. 33Net cash used in operating activities (487,642 )
34. 34Net cash used in investing activities (230,000,000 )
35. 35Cash and cash equivalents – End of period $ 738,076
36. 36Note 1 — Organization and Business Operations
37. 37Transaction costs amounted to $13,241,124, consisting of $4,600,000 of cash underwriting fee, $8,050,000 of deferred underwriting fee and $591,124 of other offering costs
38. 38The Company’s liquidity needs up to December 31, 2025 had been satisfied through the loan under an unsecured promissory note from the Sponsor of up to $300,000 (see Note 5). As of December 31, 2025, the Company had $738,076 in cash and had a working capital surplus of $829,541
39. 39Emerging Growth Company Status
40. 40The preparation of the financial statement in conformity with U.S. GAAP requires 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 financial statement
41. 41Cash and Cash Equivalents
42. 42Investments held in Trust Account
43. 43Concentration of Credit Risk
44. 44Class A Ordinary Shares Subject to Possible Redemption
45. 45Class A ordinary shares issuance cost (12,981,659 )
46. 46Net Income per Ordinary Share
47. 47Allocation of net income, as adjusted $ 92,294 $ 208,077
48. 48Allocation of net income, as adjusted $ 89,347 $ 211,024
49. 49Fair Value of Financial Instruments
50. 50Recent Accounting Pronouncements
51. 51Note 3 — Initial Public Offering
52. 52Note 4 — Private Placement
53. 53Promissory Note — Related Party
54. 54Administrative Services Agreement
55. 55Class A Ordinary Shares — The Company is authorized to issue a total of 200,000,000 Class A ordinary shares at par value of $0.0001 per share. At December 31, 2025, there were 645,000 Class A ordinary shares issued and outstanding, excluding the 23,000,000 shares subject to possible redemption
56. 56Note 8 — Fair Value Measurements
57. 57Investments held in Trust Account 1 $ 230,556,356
58. 58Note 9 — Segment Information
59. 59The CODM assesses performance for the single segment and decides how to allocate resources based on net income or loss. The measure of segment assets is reported on the balance sheet as total assets
60. 60General and administrative costs $ 255,985
61. 61Note 10 — Subsequent Events
62. 623.1 Amended and Restated Memorandum and Articles of Association (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K (File No. 001-42992), filed with the Securities and Exchange Commission on December 3, 2025)
63. 634.3 Specimen Warrant Certificate (included as an exhibit to Exhibit 4.4) (incorporated by reference to Exhibit 4.3 to the Company’s Registration Statement on Form S-1 (File No. 333-291403), filed with the Securities and Exchange Commission on November 10, 2025)
64. 6410.1 Letter Agreement, dated December 3, 2025, by and among the Company and its founders (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No. 001-42992), filed with the Securities and Exchange Commission on December 3, 2025)
65. 6510.9 Securities Subscription Agreement dated June 30, 2025, between Activate Energy Sponsors LLC and the Company (incorporated by reference to Exhibit 10.8 to the Company’s Registration Statement on Form S-1 (File No. 333-291403), filed with the Securities and Exchange Commission on November 10, 2025)
66. 6699.1 Audit Committee Charter (incorporated by reference to Exhibit 99.1 to the Company’s Registration Statement on Form S-1 (File No. 333-291403), filed with the Securities and Exchange Commission on November 10, 2025)
67. 67104 Cover Page Interactive Data File. (formatted as Inline XBRL and contained in Exhibit 101)