BHAV Acquisition Corp II completes $100M IPO
The $100.5 million trust account holds proceeds while the company faces a June 30, 2027 business-combination deadline.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
BHAV Acquisition Corp II completed its initial public offering on October 30, 2026, selling 10,000,000 units at $10.00 each for $100,000,000 in gross proceeds. It also sold 225,000 private placement units at $10.00 each for $2,250,000. The company placed $100,500,000 in a trust account. Each unit includes one Class A ordinary share and a right to receive one-fourth of a share upon a business combination.
As of October 30, 2026, the company reported $962,801 in cash and $719,238 in working capital. It had not begun operations and will not generate operating revenue until after an initial business combination, at the earliest. Public shareholders may redeem shares for a pro rata portion of trust funds in connection with a business combination. If the company cannot complete one by June 30, 2027, it will cease operations except for winding up; the independent auditor said the mandatory liquidation date raises substantial doubt about its ability to continue as a going concern.
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- None.
Negative
- Major pointGoing-concern warning: June 30, 2027 mandatory liquidation date.
Filing Explained
Founder shares can convert above one-for-one at a business combination to target twenty-five percent of a defined share base after public redemptions.
The audited balance sheet records 575,000 issued Class A shares outside the 10,000,000 redeemable public shares—225,000 private-placement shares and 350,000 representative shares—plus 3,833,333 Class B Founder shares.
These shares are already issued and add to the share base; issuing additional shares increases the total share count and reduces existing holders’ percentage ownership absent offsetting changes.
At a business combination, the 3,833,333 Class B Founder shares convert into Class A at no less than one-for-one; if deal-related shares or equity-linked securities are issued, the conversion ratio can be adjusted so Founder conversion shares equal 25% of a defined base: IPO public shares, including any over-allotment but excluding private-placement and representative shares, plus deal-related securities excluding seller securities, less public redemptions. A majority of Class B holders may waive this adjustment.
If the company seeks shareholder approval and uses the meeting-vote redemption route rather than a tender offer, a public shareholder together with affiliates or a concert group cannot redeem more than 15% of public shares without company consent.
8-K Event Classification
Key Figures
Key Terms
Business Combination financial
temporary equity financial
redemption value financial
over-allotment option liability financial
Level 3 financial
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
How much did BHAIU raise in its IPO?
When must BHAIU complete a business combination?
How much can BHAIU shareholders redeem from the trust account?
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
| (Exact name of registrant as specified in its charter) |
| N/A | ||||
| (State or other jurisdiction | (Commission File Number) | (IRS Employer | ||
| of incorporation) | Identification Number) |
| (Address of principal executive offices and zip code) |
(
(Registrant’s telephone number, including area code)
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act.
| Title of each class | Trading Symbol | Name of each exchange on which registered | ||
| The | ||||
| The | ||||
| The |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
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.
Item 8.01 Other Events.
As previously reported, on October 30, 2026, BHAV Acquisition Corp II (the “Company”) consummated its initial public offering (“IPO”) of 10,000,000 units (the “Units”). Each Unit consists of one Class A ordinary share of the Company, par value $0.0001 per share (each, a “Class A Ordinary Share”), and one right (each, a “Right”), with each one Right entitling the holder thereof to receive one-fourth (1/4) of one Class A Ordinary Share upon the completion of the Company’s initial business combination, pursuant to a Registration Statement on Form S-1 (File No. 333-299203). The Units were sold at a price of $10.00 per Unit, generating gross proceeds to the Company of $100,000,000 (the “Public Proceeds”).
Simultaneously with the closing of the IPO, pursuant to a sponsor private placement unit subscription agreement between the Company and BHAV Partners II LLC, dated as of October 28, 2026, the Company completed the private sale (the “Private Placement”) of an aggregate of 225,000 private placement units (the “Private Units”), at a price of $10.00 per Private Unit, generating aggregate gross proceeds to the Company of $2,250,000 (the “Private Proceeds,” and together with the Public Proceeds, the “Offering Proceeds”). Each Private Unit consists of one Class A Ordinary Share and one Right, with each one Right entitling the holder thereof to receive one-fourth (1/4) of one Class A Ordinary Share upon the completion of the Company’s initial business combination.
In connection with the consummation of the IPO and the Private Placement, a total of $100,500,000, or $10.05 per Unit, of the Offering Proceeds were placed in the trust account established for the benefit of the Company’s public shareholders and the underwriters of the IPO with Continental Stock Transfer & Trust Company acting as trustee.
An audited balance sheet as of October 30, 2026 reflecting receipt of the Offering Proceeds has been issued by the Company and is included as Exhibit 99.1 to this Current Report on Form 8-K.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
| Exhibit No. | Description of Exhibits | |
| 99.1 | Audited Balance Sheet as of October 30, 2026. | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
1
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 hereunto duly authorized.
| BHAV Acquisition Corp II | ||
| By: | /s/ Giri Devanur | |
| Name: | Giri Devanur | |
| Title: | Chief Executive Officer | |
| Date: November 5, 2026 | ||
2
Exhibit 99.1
BHAV ACQUISITION CORP II
INDEX TO FINANCIAL STATEMENT
| Page | ||
| Financial Statement of BHAV Acquisition Corp II: | ||
| Report of Independent Registered Public Accounting Firm | F-2 | |
| Balance Sheet as of October 30, 2026 | F-3 | |
| Notes to Financial Statement | F-4 |
F-1
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and Board of Directors of
BHAV Acquisition Corp II
Opinion on the Financial Statement
We have audited the accompanying balance sheet of BHAV Acquisition Corp II (the “Company”) as of October 30, 2026, and the related notes (collectively referred to as the “financial statement”). In our opinion, the financial statement presents fairly, in all material respects, the financial position of the Company as of October 30, 2026, in conformity with accounting principles generally accepted in the United States of America.
Going Concern
The accompanying financial statement has been prepared assuming the Company will continue as a going concern. As discussed in Note 1 to the financial statement, if the Company is unable to complete a business combination by June 30, 2027, then the Company will cease all operations except for the purpose of liquidating. The date for mandatory liquidation and subsequent dissolution raises substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The financial statement does not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
This financial statement is the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statement based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audit included performing procedures to assess the risks of material misstatement of the financial statement, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statement. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statement. We believe that our audit provides a reasonable basis for our opinion.
/s/ WithumSmith+Brown, PC
We have served as the Company’s auditor since 2026.
New York, New York
November 5, 2026
PCAOB ID Number 100
F-2
BHAV ACQUISITION CORP II
BALANCE SHEET
OCTOBER 30, 2026
| Assets | ||||
| Current assets | ||||
| Cash | $ | 962,801 | ||
| Due from Sponsor | 5,682 | |||
| Prepaid expenses | 12,100 | |||
| Total current assets | 980,583 | |||
| Cash held in Trust Account | 100,500,000 | |||
| Total Assets | $ | 101,480,583 | ||
| Liabilities, Class A Ordinary Shares Subject to Possible Redemption, and Shareholders’ Equity | ||||
| Current liabilities | ||||
| Accrued expenses | $ | 61,250 | ||
| Accrued offering costs | 95,995 | |||
| Over-allotment option liability | 104,100 | |||
| Total current liabilities | 261,345 | |||
| Total Liabilities | 261,345 | |||
| Commitments and Contingencies (Note 6) | ||||
| Class A ordinary shares subject to possible redemption, $0.0001 par value; 10,000,000 shares at redemption value of $10.05 per share | 100,500,000 | |||
| Shareholders’ Equity | ||||
| Preference shares, $0.0001 par value; 1,000,000 shares authorized; none issued or outstanding | - | |||
| Class A ordinary shares, $0.0001 par value; 200,000,000 shares authorized; 575,000 shares issued and outstanding (excluding 10,000,000 shares subject to possible redemption) | 58 | |||
| Class B ordinary shares, $0.0001 par value; 20,000,000 shares authorized; 3,833,333 shares issued and outstanding (1) | 383 | |||
| Additional paid-in capital | 824,591 | |||
| Accumulated deficit | (105,794 | ) | ||
| Total Shareholders’ Equity | 719,238 | |||
| Total Liabilities, Class A Ordinary Shares Subject to Possible Redemption, and Shareholders’ Equity | $ | 101,480,583 | ||
| (1) | Includes 500,000 Class B ordinary shares subject to forfeiture if the over-allotment option is not exercised in full or in part by the underwriters (see Note 7). |
The accompanying notes are an integral part of this financial statement.
F-3
BHAV ACQUISITION CORP II
NOTES TO FINANCIAL STATEMENT
OCTOBER 30, 2026
NOTE 1 — DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS
BHAV Acquisition Corp II (the “Company”) is a blank check company incorporated as a Cayman Islands exempted company on May 25, 2026. 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”). The Company is not limited to a particular industry or geographic region for purposes of consummating a Business Combination. 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. While the Company may pursue an initial Business Combination opportunity in any business, industry or geographic location, it intends to capitalize on the ability of its management team and board advisors to identify, acquire and operate a business or businesses that can benefit from its management team’s established relationships, and sector management and operating experience. In particular, the Company currently intends to focus on opportunities that capitalize on the experience and ability of its management team and the individuals that may be appointed as members of the Company’s advisory board from time to time (the “board advisors”) to identify, acquire and operate a business in the advanced and industrial robotics, electric-vehicles (“EVs”), drones and unmanned-aerial-systems (“UAS”), financial technology (“fintech”), quantum computing and advanced computing infrastructure industry or advanced energy technologies, including geothermal energy, advanced and small modular nuclear reactors, energy storage, grid infrastructure and other next-generation energy technologies.
As of October 30, 2026, the Company had not commenced any operations. All activity for the period from May 25, 2026 (inception) through October 30, 2026 relates to the Company’s formation and the initial public offering (“Initial Public Offering”), which is described below. The Company will not generate any operating revenue until after the completion of initial Business Combination, at the earliest. The Company will generate non-operating income in the form of interest and/or dividend income from the proceeds derived from this Initial Public Offering. The Company has selected December 31 as its fiscal year end.
The Company’s Sponsor is BHAV Partners II LLC (the “Sponsor”). The registration statement for the Company’s Initial Public Offering was declared effective on October 28, 2026. On October 30, 2026, the Company consummated the Initial Public Offering of 10,000,000 units (the “Units” and, with respect to the ordinary share included in the Units being offered, the “Public Shares”) at $10.00 per Unit, generating gross proceeds of $100,000,000. Each Unit consists of one Class A ordinary share and one right entitling the holder to receive one-fourth (1/4) of one Class A ordinary share (the “Public Share Rights”) upon closing of a Business Combination. The Company will not issue fractional Class A ordinary shares. In addition, 350,000 Class A ordinary shares were issued to the designee of Maxim Group LLC, the representative of the underwriters (“Maxim”), as part of the underwriting compensation relating to the closing of the Initial Public Offering and sale and issuance of the Units (the “Representative Shares”).
Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of 225,000 private placement units (the “Private Placement Units”), at a price of $10.00 per Private Placement Unit, in a private placement to the Sponsor generating gross proceeds of $2,250,000. Each Private Placement Unit consists of one private Class A ordinary share (the “Private Placement Shares”), and one right to receive one-fourth (1/4) of a Class A ordinary share (the “Private Placement Share Rights”) upon the consummation of an initial Business Combination.
Transaction costs amounted to $4,393,368, consisting of $500,000 of cash underwriting fees, $3,447,500 representing the fair value of the Representative Shares issued to the designee of Maxim and $445,868 of other offering costs.
The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering and the sale of the Private Placement Units, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. The stock exchange listing rules require that the Business Combination must be with one or more operating businesses or assets with a fair market value equal to at least 80% of the net assets held in the Trust Account (as defined below) (excluding income and franchise taxes payable on the income earned on the Trust Account). The Company will only complete a Business Combination if the post-Business Combination company owns or acquires 50% or more of the issued and outstanding voting securities of the target or otherwise acquires a controlling interest in the target business sufficient for it not to be required to register as an investment company under the Investment Company Act of 1940, as amended (the “Investment Company Act”). There is no assurance that the Company will be able to successfully effect a Business Combination.
Following the closing of the Initial Public Offering, on October 30, 2026, an amount of $100,500,000 ($10.05 per Unit) from the net proceeds of the sale of the Units and the Private Placement Units was placed in a trust account (the “Trust Account”) located in the United States with Continental Stock Transfer & Trust Company acting as trustee, and which will initially be invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 185 days or less, or in any open-ended investment company that holds itself out as a money market fund investing solely in U.S. Treasuries and meeting certain conditions under Rule 2a-7 of the Investment Company Act, as determined by the Company, until the earlier of (i) the completion of a Business Combination and (ii) the distribution of the funds in the Trust Account to the Company’s shareholders, as described below. To mitigate the risk that the Company might be deemed to be an investment company for purposes of the Investment Company Act, which risk increases the longer that the Company holds investments in the Trust Account, the Company may, at any time (based on the management team’s ongoing assessment of all factors related to the Company’s 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.
F-4
BHAV ACQUISITION CORP II
NOTES TO FINANCIAL STATEMENT
OCTOBER 30, 2026
NOTE 1 — DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS (cont.)
The Company will provide the holders of the outstanding Public Shares, excluding the Sponsor, initial shareholder, officers, directors and board advisors (the “Public Shareholders”) with the opportunity to redeem all or a portion of their Public Shares in connection with a general meeting called to approve the Business Combination. If the Company does not submit such Business Combination to its members for approval, it will provide shareholders with the opportunity to have their shares repurchased by means of a tender offer in connection with the Business Combination. The decision as to whether the Company will seek shareholder approval of a Business Combination or conduct a tender offer will be made by the Company. The Public Shareholders will be entitled to redeem their Public Shares for a pro rata portion of the amount then in the Trust Account ($10.05 per Public Share, plus any pro rata interest then in the Trust Account). There will be no redemption rights upon the completion of a Business Combination with respect to the Private Placement Units (and the underlying securities contained therein). The Public Shares subject to redemption were recorded at a redemption value and classified as temporary equity upon the completion of the Initial Public Offering in accordance with the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.”
If the Company seeks shareholder approval of the Business Combination, the Company will proceed with a Business Combination only if shareholders pass an ordinary resolution under Cayman Islands law and its amended and restated memorandum and articles of association (the “Articles”) approving a Business Combination, which requires the affirmative vote of at least a majority of the votes cast by such shareholders as, being entitled to do so, vote in person or, where proxies are allowed, by proxy at the applicable general meeting of the Company, or approved by a resolution in writing of all of the shareholders entitled to vote on such matter (or such other threshold as may be allowed under the Companies Act (As Revised) of the Cayman Islands), or such other vote as required by law or stock exchange rule. Subject to limited exceptions, if the Company’s Business Combination is structured as a statutory merger or consolidation with another company under Cayman Islands law, shareholders will be required to pass a special resolution, which requires the affirmative vote of at least two-thirds of the votes cast by such shareholders as, being entitled to do so, vote in person or, where proxies are allowed, by proxy at the applicable general meeting of the Company, approving a plan of merger or plan of consolidation. If a shareholder vote is not required under applicable law or stock exchange listing requirements and the Company does not decide to hold a shareholder vote for business or other reasons, the Company will, pursuant to its Articles, conduct the redemptions pursuant to the tender offer rules of the Securities and Exchange Commission (the “SEC”), and file tender offer documents containing substantially the same information as would be included in a proxy statement with the SEC prior to completing a Business Combination. If the Company seeks shareholder approval in connection with a Business Combination, the initial shareholder has agreed to vote their Founder Shares (as defined in Note 5), and Public Shares purchased during or after the Initial Public Offering in favor of approving a Business Combination (except that any Public Shares such parties may purchase in compliance with the requirements of Rule 14e-5 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), would not be voted in favor of approving the Business Combination). Additionally, each Public Shareholder may elect to redeem their Public Shares, without voting, and if they do vote, irrespective of whether they vote in favor of or vote against, or abstain from voting on, a proposed Business Combination and waive its redemption rights with respect to any such shares in connection with a shareholder vote to approve a Business Combination.
Notwithstanding the foregoing, if the Company seeks shareholder approval of a Business Combination and the Company does not conduct redemptions pursuant to the tender offer rules, the Articles provide that a Public Shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act) will be restricted from redeeming its shares with respect to more than an aggregate of 15% of the Public Shares without the Company’s prior written consent.
F-5
BHAV ACQUISITION CORP II
NOTES TO FINANCIAL STATEMENT
OCTOBER 30, 2026
NOTE 1 — DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS (cont.)
The initial shareholder has agreed (a) to waive their redemption rights with respect to any Founder Shares, Public Shares and Private Placement Shares, as defined below, held by them in connection with the completion of a Business Combination and (b) not to propose an amendment to the Articles (i) to modify the substance or timing of the Company’s obligation to allow redemption in connection with the Company’s initial Business Combination or to redeem 100% of the Public Shares if the Company does not complete a Business Combination within the Combination Period (as defined below) or (ii) with respect to any other material provision relating to the rights of holders of Class A ordinary shares or pre-initial business combination activity, in each case unless the Company provides the Public Shareholders with the opportunity to redeem their Public Shares upon approval of any such amendment.
If the Company has not completed a Business Combination (a) within 8 months from the closing of the Initial Public Offering or (b) such other time period in which the Company must complete an initial Business Combination pursuant to an amendment to the Articles (the “Combination Period”), the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem 100% of the outstanding 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 (less amounts released to the Company to pay income and franchise taxes payable and up to $100,000 of interest to pay dissolution expenses), divided by the number of then issued and outstanding Public Shares, which redemption will completely extinguish the rights of the Public Shareholders as shareholders (including the right to receive further liquidating distributions, if any), and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining shareholders and its Board of Directors, liquidate and dissolve, subject in each case to the Company’s obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to the Company’s rights, which will expire worthless if the Company fails to complete a Business Combination within the Combination Period.
The initial shareholder has agreed to waive their rights to liquidating distributions from the Trust Account with respect to the Founder Shares and Private Placement Shares if the Company fails to complete a Business Combination within the Combination Period. However, if the Sponsor or any of its respective affiliates acquire Public Shares in or after the Initial Public Offering, such Public Shares will be entitled to liquidating distributions from the Trust Account if the Company fails to complete a Business Combination within the Combination Period. In the event of such distribution, it is possible that the per share value of the assets remaining available for distribution will be less than the Initial Public Offering price per Public Share ($10.00).
In order to protect the amounts held in the Trust Account, the Sponsor has agreed that it will be liable to the Company if and to the extent any claims by a third party (other than the Company’s independent registered public accounting firm) for services rendered or products sold to the Company, or a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below the lesser of (i) $10.05 per Public Share and (ii) the actual amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account, if less than $10.05 per Public Share due to reductions in the value of the trust assets, less income and franchise taxes payable, provided that such liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights to the monies held and except as to any claims under the indemnity of the underwriters of the Initial Public Offering against certain liabilities, including liabilities under the Securities Act. However, the Company has not asked the Sponsor to reserve for such indemnification obligations, nor has it independently verified whether the Sponsor has sufficient funds to satisfy its indemnity obligations, and the Company believes that the Sponsor’s only assets are securities of the Company. Therefore, the Company cannot assure that the Sponsor would be able to satisfy those obligations. As a result, if any such claims were successfully made against the Trust Account, the funds available for the Company’s initial Business Combination and redemptions could be reduced to less than $10.05 per Public Share. In such event, the Company may not be able to complete its initial Business Combination, and the Public Shareholders would receive such lesser amount per share in connection with any redemption of their Public Shares. None of the Company’s officers or directors will indemnify the Company for claims by third parties including, without limitation, claims by vendors and prospective target businesses.
Going Concern Considerations
As of October 30, 2026, the Company had cash of $962,801 and working capital of $719,238. The Company completed its Initial Public Offering and the sale of the Private Placement Units on October 30, 2026, at which time the capital in excess of the funds deposited in Trust Account and/or used to fund offering and other operating expenses was released to the Company for working capital purposes. Further, the Company has incurred and expects to continue to incur significant costs in pursuit of its financing and acquisition plans. 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,” the Company’s management has evaluated the Company’s liquidity and financial condition, and determined that if the Company is unable to complete an initial Business Combination by June 30, 2027, then the Company will cease all operations except for the purpose of winding up. The Company’s date for mandatory liquidation and subsequent dissolution, should a Business Combination not occur, raises substantial doubt about the Company’s ability to continue as a going concern. Management plans to consummate an initial Business Combination prior to the mandatory liquidation date, however, there is no assurance that the Company will be able to successfully effect a Business Combination. The financial statement does not include any adjustments that might result from the outcome of this uncertainty.
F-6
BHAV ACQUISITION CORP II
NOTES TO FINANCIAL STATEMENT
OCTOBER 30, 2026
NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying financial statement has been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the SEC.
Emerging Growth Company
The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended (the “Securities Act”), as modified by the Jumpstart Our Business Startups Act of 2012, as amended (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 independent registered public accounting firm 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 Company’s financial statement with another public company which is neither an emerging growth company nor an emerging growth company which 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 financial statement in conformity with GAAP requires the Company’s 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.
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 financial statement, 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.
F-7
BHAV ACQUISITION CORP II
NOTES TO FINANCIAL STATEMENT
OCTOBER 30, 2026
NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
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 of $962,801 and did not have any cash equivalents as of October 30, 2026.
Cash Held in Trust Account
As of October 30, 2026, the assets held in the Trust Account, amounting to $100,500,000, were held in cash.
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 $250,000. Any loss incurred or a lack of access to such funds could have a significant adverse impact on the Company’s financial condition, results of operations, and cash flows.
Offering Costs
The Company complies with the requirements of the FASB ASC 340-10-S99-1 and SEC Staff Accounting Bulletin (“SAB”) Topic 5A — “Expenses of Offering” and Topic 5T — “Accounting for Expenses or Liabilities Paid by Principal Stockholder(s).” Offering costs consist of costs incurred in connection with preparation for the Initial Public Offering and private placement, which include professional and registration fees incurred. Offering costs, together with the underwriting discounts and commissions, were allocated to the separable financial instruments issued in the Initial Public Offering and private placement based on a relative fair value basis, compared to total proceeds received. Offering costs allocated to the Public Shares were charged to temporary equity, and offering costs allocated to the Public Share Rights, and the Private Placement Units were charged to shareholders’ equity as all of the underlying instruments, after management’s evaluation, were classified in permanent equity.
Income Taxes
The Company follows the asset and liability method of accounting for income taxes under FASB ASC 740, “Income Taxes” (“ASC 740”). Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. FASB ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement 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. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense.
F-8
BHAV ACQUISITION CORP II
NOTES TO FINANCIAL STATEMENT
OCTOBER 30, 2026
NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of October 30, 2026. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position.
There is currently no taxation imposed on income by the Government of the Cayman Islands. In accordance with Cayman income tax regulations, income taxes are not levied on the Company. Consequently, income taxes are not reflected in the Company’s financial statement.
Fair Value of Financial Instruments
The fair value of the Company’s assets and liabilities, which qualify as financial instruments under FASB ASC 820, “Fair Value Measurement,” approximates the carrying amounts represented in the balance sheet, primarily due to their short-term nature.
Derivative Financial Instruments
The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with FASB ASC Topic 815, “Derivatives and Hedging.” For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value on the grant date and is then re-valued at each reporting date, with changes in the fair value reported in the statement of operations. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date. The underwriters’ over-allotment option is deemed to be a freestanding financial instrument indexed to the contingently redeemable shares and was accounted for as a liability pursuant to FASB ASC 480 since the underwriters did not exercise their over-allotment option at the closing of the Initial Public Offering.
Share-Based Compensation
The Company accounts for share awards in accordance with FASB ASC 718, “Compensation—Stock Compensation,” which requires that all equity awards be accounted for at their “fair value.” Fair value is measured on the grant date and is equal to the underlying value of the share. Costs equal to these fair values are recognized ratably over the requisite service period based on the number of awards that are expected to vest, in the period of grant for awards that vest immediately and have no future service condition, or in the period the awards vest immediately after meeting a performance condition becomes probable (i.e., the occurrence of a Business Combination). For awards that vest over time, cumulative adjustments in later periods are recorded to the extent actual forfeitures differ from the Company’s initial estimates; previously recognized compensation cost is reversed if the service or performance conditions are not satisfied and the award is forfeited.
Class A Ordinary Shares Subject to Possible Redemption
The Public Shares contain a redemption feature which 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 480-10-S99, the Company classifies Public Shares subject to possible 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. Immediately upon the 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 October 30, 2026, Class A ordinary shares subject to possible redemption are presented at redemption value as temporary equity, outside of the shareholders’ equity section of the Company’s balance sheet. As of October 30, 2026, the Class A ordinary shares subject to possible redemption reflected in the balance sheet are reconciled in the following table:
| Gross proceeds | $ | 100,000,000 | ||
| Less: | ||||
| Proceeds allocated to Public Share Rights | (1,500,000 | ) | ||
| Proceeds allocated to over-allotment option | (104,100 | ) | ||
| Public Shares issuance costs | (4,313,240 | ) | ||
| Plus: | ||||
| Remeasurement of carrying value to redemption value | 6,417,340 | |||
| Class A ordinary shares subject to possible redemption, October 30, 2026 | $ | 100,500,000 |
F-9
BHAV ACQUISITION CORP II
NOTES TO FINANCIAL STATEMENT
OCTOBER 30, 2026
NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
Share Rights
The Company accounts for the Public Share Rights and Private Placement Share Rights (collectively, the “Share Rights”), issued in connection with the Initial Public Offering and the private placement in accordance with the guidance contained in FASB ASC Topic 815. Accordingly, the Company evaluated and classified the Share Rights as equity instruments at their assigned value.
Recent Accounting Standards
In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income (Topic 220): Disaggregation of Income Statement Expenses, to enhance the transparency and decision usefulness of financial information presented in the income statement by requiring disaggregated information about certain income statement expense line items. The amendments apply to all public business entities. This ASU is effective for annual periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. The Company is currently assessing the effect of this ASU on its financial statement and related disclosures.
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 Company’s financial statement.
NOTE 3 — INITIAL PUBLIC OFFERING
Pursuant to the closing of the Initial Public Offering on October 30, 2026, the Company sold 10,000,000 Units, at a purchase price of $10.00 per Unit, generating gross proceeds of $100,000,000. Each Unit consists of one Class A ordinary share and one Public Share Right. Each Public Share Right entitles the holder to receive one-fourth (1/4) of one Class A ordinary share upon consummation of the initial Business Combination (see Note 7).
NOTE 4 — PRIVATE PLACEMENT
Simultaneously with the closing of the Initial Public Offering on October 30, 2026, the Sponsor purchased 225,000 Private Placement Units, at a price of $10.00 per Private Placement Unit, generating gross proceeds of $2,250,000. The proceeds from the sale of the Private Placement Units were added to the net proceeds from the Initial Public Offering held in the Trust Account.
The Private Placement Units are identical to the Units, subject to certain exceptions. Each Private Placement Unit consists of one Class A ordinary share and one Private Placement Share Right to receive one-fourth (1/4) of a Class A ordinary share upon the consummation of an initial Business Combination. If the Company does not complete a Business Combination within the Combination Period, the proceeds from the sale of the Private Placement Units held in the Trust Account will be used to fund the redemption of the Public Shares (subject to the requirements of applicable law), and the Private Placement Units will expire worthless. The Private Placement Units (and the securities comprising such units) will not be transferable, assignable or salable until after the consummation of the Company’s initial Business Combination or earlier if, subsequent to an initial Business Combination, the Company completes a liquidation, merger, share exchange or other similar transaction that results in all of its shareholders having the right to exchange their Class A ordinary shares for cash, securities or other property, subject to certain exceptions.
F-10
BHAV ACQUISITION CORP II
NOTES TO FINANCIAL STATEMENT
OCTOBER 30, 2026
NOTE 5 — RELATED PARTIES
Founder Shares
On June 25, 2026, the Company issued 5,750,000 Class B ordinary shares (the “Founder Shares”) to the Sponsor for an aggregate purchase price of $25,000, or approximately $0.0043, which was paid in June 2026. On October 23, 2026, the Sponsor forfeited 1,916,667 Founder Shares to the Company in a share recapitalization for no consideration, resulting in 3,833,333 Founder Shares issued and outstanding. All share and per-share amounts have been retrospectively presented. Up to 500,000 Founder Shares are subject to forfeiture depending on the extent to which the underwriters’ over-allotment option is exercised.
On October 28, 2026, the Sponsor granted certain profits interests equivalent to an aggregate of 310,000 Founder Shares to the Chief Financial Officer, independent directors, and board advisors of the Company. The grant of profits interests with equivalent Founder Shares shall vest entirely on the date of closing of the Initial Business Combination and such grant is in the scope of FASB ASC 718. Under FASB ASC Topic 718, stock-based compensation associated with equity-classified awards is measured at fair value on the grant date. The profits interests with equivalent 310,000 Founder Shares granted to the officer, independent directors, and board advisors have an aggregate fair value of $182,900, or $0.59 per share. The Company established the fair value using Probability-Weighted Expected Return Method prepared by a third-party valuation firm, which takes into consideration the following market assumptions; (i) implied Class A share price of $9.85, and (ii) probability of de-SPAC and market adjustment of 6%. The profits interests with equivalent Founder Shares were granted subject to performance conditions (i.e., providing services until the occurrence of an Initial Business Combination). The Company will recognize share-based compensation expense of $182,900 at the date an Initial Business Combination is considered probable (i.e., upon consummation of an Initial Business Combination). As of October 30, 2026, the Company determined that the Initial Business Combination is not considered probable and therefore no share-based compensation expense was recognized.
In accordance with the agreement between the Company and its legal counsel, the legal counsel was entitled to an equity fee equal to $100,000 in exchange for certain legal services rendered in connection with the Company’s Initial Public Offering (see Note 6). On October 30, 2026, the Sponsor issued profits interests equivalent to an aggregate of 100,000 Founder Shares, at $1.00 per Founder Share, to legal counsel. The issue of profits interests with equivalent Founder Shares is in the scope of FASB ASC 718. Under FASB ASC 718, share-based compensation associated with equity classified awards is measured at fair value upon the assignment date. The profits interests with equivalent 100,000 Founder Shares granted to legal counsel have an aggregate fair value of $59,000 or $0.59 per share. The Company established the fair value using Probability-Weighted Expected Return Method prepared by a third-party valuation firm, which takes into consideration the following market assumptions; (i) implied Class A share price of $9.85, and (ii) probability of de-SPAC and market adjustment of 6%. Further, the issuance of the profits interests to the legal counsel with equivalent Founder Shares, should be accounted for as an offering cost in accordance with SAB Topic 5A, Expenses of Offering, since the profit interests were exchanged for legal services rendered in connection with the Company’s Initial Public Offering. Accordingly, on October 30, 2026, the Company recorded the $100,000 equity fee as an offering cost, with a corresponding increase to additional paid-in capital of $100,000, consisting of $59,000 attributable to the fair value of the equivalent Founder Shares and $41,000 attributable to the excess of the equity fee over such fair value. The offering cost was closed to shareholders’ equity and temporary equity at the closing of the Initial Public Offering on October 30, 2026.
The initial shareholder has agreed, subject to certain exceptions, not to transfer, assign or sell any of their Founder Shares and any Class A ordinary shares issuable upon conversion thereof until the earlier of: (i) six months after the completion of an initial Business Combination and (ii) the date on which the closing price of the Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share sub-divisions, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing 75 days after an initial Business Combination, or earlier if, subsequent to an initial Business Combination, the Company completes a liquidation, merger, share exchange or other similar transaction that results in all of its shareholders having the right to exchange their Class A ordinary shares for cash, securities or other property, except to certain permitted transferees and under certain circumstances. Any permitted transferees will be subject to the same restrictions and other agreements of the initial shareholder with respect to any Founder Shares. Such transfer restrictions are referred to as the “lock-up.”
Administrative Services
Commencing on October 29, 2026, the date the Company’s securities are first listed on the Nasdaq Global Market, through the earlier of the Company’s consummation of a Business Combination and its liquidation, the Company agreed to pay the Sponsor $10,000 per month for office space, utilities and secretarial and administrative support. As of October 30, 2026, no amount has been accrued for these services on the Company’s balance sheet.
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. Such Working Capital Loans would be evidenced by promissory notes. The notes may be repaid upon completion of a Business Combination, without interest. In the event that a Business Combination does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. As of October 30, 2026, there was no amount outstanding under the Working Capital Loans.
F-11
BHAV ACQUISITION CORP II
NOTES TO FINANCIAL STATEMENT
OCTOBER 30, 2026
NOTE 5 — RELATED PARTIES (cont.)
Promissory Note — Related Party
The Sponsor agreed to loan up to $500,000 to the Company to cover organizational, offering-related and post-offering expenses. As of October 30, 2026, the Company had fully settled its $125,000 borrowings against the promissory note simultaneously with the closing of the Initial Public Offering. The promissory note is non-interest bearing, unsecured and due at the earlier of the date on which the Company consummates the initial Business Combination or on the date of the dissolution deadline, assuming there is cash available. This loan may be repaid upon the closing of the initial Business Combination out of the offering proceeds not held in the Trust Account.
Due from Sponsor
On October 30, 2026, the Company repaid the balance of promissory note – related party owed to the Sponsor and made an excess payment of $5,682, resulting in a receivable due from the Sponsor, which is due on demand.
NOTE 6 — COMMITMENTS AND CONTINGENCIES
Registration Rights
The holders of the Founder Shares, representative shares (as defined below), and Private Placement Units (and the securities comprising such units and any Class A ordinary shares issuable upon conversion of the rights and upon conversion of the Founder Shares), which will be issued in a private placement simultaneously with the closing of the Initial Public Offering, were entitled to registration rights pursuant to the registration rights agreement signed on October 28, 2026, the effective date of the Initial Public Offering, requiring the Company to register such securities for resale (in the case of the Founder Shares, only after conversion to Class A ordinary shares). Pursuant to the registration rights agreements, the Company agreed to file a registration statement covering the registration of these securities within 30 business days from the date the Company completes its initial Business Combination (or such later date agreed upon by the Company, the Sponsor and Maxim Group LLC (“Maxim”), as representative of the underwriters. Further, the holders of these securities will be entitled to make up to three demands, excluding short form registration demands, that the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to completion of a Business Combination and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
Risks and Uncertainties
The United States and global markets are experiencing volatility and disruption following the geopolitical instability resulting from the ongoing Russia-Ukraine conflict, the Israel-Hamas conflict in the Middle East and the recent escalation of conflict in Southwest Asia, as well as other conflicts with Venezuela and Iran. In response to the ongoing Russia-Ukraine conflict, the North Atlantic Treaty Organization (“NATO”) deployed additional military forces to eastern Europe, and the United States, the United Kingdom, the European Union and other countries have announced various sanctions and restrictive actions against Russia, Belarus and related individuals and entities, including the removal of certain financial institutions from the Society for Worldwide Interbank Financial Telecommunication (SWIFT) payment system. Certain countries, including the United States, have also provided and may continue to provide military aid or other assistance to Ukraine and to Israel, or have undertaken or will undertake military strikes in Southwest Asia, increasing geopolitical tensions among a number of nations. The invasion of Ukraine by Russia and the escalation of the conflict in the Middle East and Southwest Asia and the resulting measures that have been taken, and could be taken in the future, by NATO, the United States, the United Kingdom, the European Union, Israel and its neighboring states and other countries have created global security concerns that could have a lasting impact on regional and global economies. Although the length and impact of the ongoing conflicts are highly unpredictable, they could lead to market disruptions, including significant volatility in commodity prices, credit and capital markets, as well as supply chain interruptions and increased cyber-attacks against U.S. companies. Additionally, any resulting sanctions could adversely affect the global economy and financial markets and lead to instability and lack of liquidity in capital markets.
Any of the abovementioned factors, or any other negative impact on the global economy, capital markets or other geopolitical conditions resulting from the Russian invasion of Ukraine, the escalation of the conflict in the Middle East and Southwest Asia and subsequent sanctions or related actions, could adversely affect the Company’s search for an initial Business Combination and any target business with which the Company may ultimately consummate an initial Business Combination.
Underwriting Agreement
The Company granted the underwriters a 45-day option from the date of the Initial Public Offering to purchase up to 1,500,000 Units to cover over-allotments, if any, at the Initial Public Offering price less the underwriting discounts. As of October 30, 2026, the full over-allotment option remains open.
The underwriters were paid a cash underwriting discount of $500,000 upon the closing of the Initial Public Offering.
If, within twelve (12) months following the earlier of the (i) closing of the Initial Public Offering or (ii) termination or expiration of the engagement with the underwriters (other than for cause as defined in FINRA Rule 5110(g)(5)(B)), the Company completes any financing of equity, equity-linked, convertible securities or any other capital raising activity (other than the exercise by any person or entity of any options, warrants or other convertible securities) with any investor originally introduced to the Company by the underwriters between June 15, 2026 and June 1, 2027, and disclosed to the Company in writing, then the Company will pay to the underwriters 1.0% of the gross proceeds received from such investors upon the closing of such offering in cash plus a number of Class A ordinary shares equal to 3.0% of the aggregate number of Class A ordinary shares issued to such investors upon the closing of such offering.
F-12
BHAV ACQUISITION CORP II
NOTES TO FINANCIAL STATEMENT
OCTOBER 30, 2026
NOTE 6 — COMMITMENTS AND CONTINGENCIES (cont.)
Representative Shares
The Company issued 350,000 Class A ordinary shares (or up to 402,500 Class A ordinary shares if the underwriters’ over-allotment option is exercised in full) (the “representative shares”) to Maxim as part of the underwriting compensation on the closing of the Initial Public Offering. The holders of the representative shares have agreed not to transfer, assign or sell any such representative shares until the completion of the initial Business Combination. In addition, Maxim has agreed (i) to waive its redemption rights with respect to such representative shares in connection with the completion of initial Business Combination and (ii) to waive its rights to liquidating distributions from the Trust Account with respect to such representative shares if the Company fails to complete initial Business Combination within the periods of time as provided in the Company’s amended and restated memorandum and articles of association. The representative shares will be granted registration rights in compliance with the Financial Industry Regulatory Authority, Inc. (“FINRA”) Rule 5110(g)(8).
The issuance of the representative shares is in the scope of FASB ASC 718. Under FASB ASC 718, share-based compensation associated with equity classified awards is measured at fair value upon the assignment date. Further, the issuance of the representative shares should be accounted for as an offering cost in accordance with SAB Topic 5A, Expenses of Offering, since the representative shares are deemed to be underwriters’ compensation by FINRA pursuant to Rule 5110 of the FINRA Manual. The Company estimated the fair value of the 350,000 representative shares to be $3,447,500 or $9.85 per share. Accordingly, $3,447,500 has been recorded as an offering costs on October 30, 2026, with a corresponding increase in additional paid-in capital. The Company established the initial fair value for the representative shares on October 30, 2026, the date of the issuance, which takes into consideration the implied unit price of $10.00 and the market assumptions used in the valuation of Share Rights (see Note 9).
The representative shares have been deemed compensation by FINRA and are therefore subject to a lock-up for a period of 180 days from the commencement of sales of the Initial Public Offering pursuant to FINRA Rule 5110(e)(1). Pursuant to this FINRA lock-up, these securities cannot be sold, transferred, assigned, pledged or hypothecated or the subject of any hedging, short sale, derivative, put or call transaction that would result in the economic disposition of the securities by any person for a period of 180 days from the commencement of sales of the Initial Public Offering except as permitted under FINRA Rule 5110(e)(2), including to any underwriters and selected dealer participating in the offering and their officers or partners, registered persons or affiliates. The representative shares have resale registration rights including three demand (one at the Company’s expense and two at the underwriters’ expense) and unlimited “piggy-back” rights for periods of five and seven years, respectively, from the commencement of the Initial Public Offering.
Vendor Agreements
The Company entered into an agreement with legal counsel in which the legal counsel was paid a flat fee of $150,000, of which $50,000 was paid in cash upon certain milestones (“cash fee”) and $100,000 (“equity fee”) was paid in securities of the Sponsor based on terms and valuations upon the closing of the Initial Public Offering. As of October 30, 2026, the Company has settled the $50,000 cash fee and in addition, the Sponsor issued profits interests equivalent to an aggregate of 100,000 Founder Shares ($1.00 per Founder Share) for the equity fee arrangement pursuant to the agreement (see Note 5).
NOTE 7 — SHAREHOLDERS’ EQUITY
Preference Shares — The Company is authorized to issue 1,000,000 preference shares with a par value of $0.0001 per share with such designations, voting and other rights and preferences as may be determined from time to time by the Company’s board of directors. As of October 30, 2026, there were no preference shares issued or outstanding.
Class A Ordinary Shares — The Company is authorized to issue 200,000,000 Class A ordinary shares with a par value of $0.0001 per share. Holders of Class A ordinary shares are entitled to one vote for each share. As of October 30, 2026, there were 575,000 Class A ordinary shares issued and outstanding, excluding 10,000,000 shares subject to possible redemption.
Class B Ordinary Shares — The Company is authorized to issue 20,000,000 Class B ordinary shares with a par value of $0.0001 per share. Holders of Class B ordinary shares are entitled to one vote for each share.
On June 25, 2026, the Company issued 5,750,000 Class B ordinary shares to the Sponsor for $25,000, or approximately $0.0043 per share. On October 23, 2026, the Sponsor forfeited 1,916,667 Founder Shares to the Company in a share recapitalization for no consideration, resulting in 3,833,333 Founder Shares issued and outstanding. All share and per-share amounts have been retrospectively presented. As of October 30, 2026, there were 3,833,333 Class B ordinary shares issued and outstanding. Up to 500,000 Class B ordinary shares are subject to forfeiture depending on the extent to which the underwriters’ over-allotment option is exercised. Only holders of the Class B ordinary shares will have the right to vote on the appointment of directors prior to the Business Combination. Holders of ordinary shares will vote together as a single class on all matters submitted to a vote of its shareholders except as otherwise required by law. In connection with an initial Business Combination, the Company may enter into a shareholder agreement or other arrangement with the shareholders of the target or other investors to provide for voting or other corporate governance arrangements that differ from those in effect upon completion of the Initial Public Offering.
F-13
BHAV ACQUISITION CORP II
NOTES TO FINANCIAL STATEMENT
OCTOBER 30, 2026
NOTE 7 — SHAREHOLDERS’ EQUITY (cont.)
The Founder Shares are designated as Class B ordinary shares and will automatically convert at a ratio of one-for-one into Class A ordinary shares (which such Class A ordinary shares issued upon conversion will not have redemption rights or be entitled to liquidating distributions from the Trust Account if the Company does not consummate an initial Business Combination) at the time of an initial Business Combination or earlier at the option of the holder, on a one-for-one basis, subject to adjustment.
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 the Class B ordinary shares will convert into Class A ordinary shares will be adjusted (unless the holders of a majority of the issued and outstanding Class B ordinary shares agree to waive such anti-dilution 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, on an as-converted basis, 25% of the sum of (i) all Class A ordinary shares issued and outstanding upon the completion of the Initial Public Offering (including any Class A ordinary shares issued pursuant to the underwriters’ over-allotment option and excluding private placement shares and shares issued to Maxim, the representative of the underwriters), (ii) plus all Class A ordinary shares and equity-linked securities issued or deemed issued in connection with the Company’s initial business combination (excluding any shares or equity-linked securities issued, or to be issued, to any seller in the initial business combination) and (iii) minus any redemptions of Class A ordinary shares by public shareholders in connection with an initial business combination or certain amendments to the Company’s Articles prior to an initial business combination; provided that such conversion of Founder Shares will never occur on a less than one-for-one basis.
Share Rights — Except in cases where the Company is not the surviving company in a Business Combination, each holder of a Share Right will automatically receive one-fourth (1/4) of one Class A ordinary share upon consummation of the initial Business Combination. The Company will not issue fractional shares in connection with an exchange of Share Rights. Fractional shares will either be rounded down to the nearest whole share or otherwise addressed in accordance with the applicable provisions of Cayman law. In the event the Company is not the surviving company upon completion of the initial Business Combination, each holder of a Share Right will be required to affirmatively convert his, her or its Share Rights in order to receive the one-fourth (1/4) of one Class A ordinary share underlying each Share Right upon consummation of the Business Combination. If the Company is unable to complete the initial Business Combination within the required time period and the Company will redeem the Public Shares for the funds held in the Trust Account, holders of Share Rights will not receive any of such funds for their Share Rights and the Share Rights will expire worthless.
NOTE 8 — SEGMENT INFORMATION
FASB ASC Topic 280, “Segment Reporting,” establishes standards for companies to report, in their 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.
The Company’s CODM has been identified as the Chief Executive Officer, who reviews the assets, operating results, and financial metrics for the Company as a whole to make decisions about allocating resources and assessing financial performance. Accordingly, management has determined that the Company only has one reporting segment.
The CODM assesses performance for the single segment and decides how to allocate resources based on net income or loss that also is reported on the statement of operations as net income or loss. The measure of segment assets is reported on the balance sheet as total assets. When evaluating the Company’s performance and making key decisions regarding resource allocation, the CODM reviews several key metrics included in net income or loss and total assets, which include the following.
| October 30, 2026 | ||||
| Cash | $ | 962,801 | ||
| Cash held in Trust Account | $ | 100,500,000 | ||
The CODM reviews the position of total assets to assess if the Company has sufficient resources available to discharge its liabilities. The CODM is provided with details of cash and liquid resources available with the Company. The CODM will review the interest that will be earned and accrued on cash held in 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.
F-14
BHAV ACQUISITION CORP II
NOTES TO FINANCIAL STATEMENT
OCTOBER 30, 2026
NOTE 9 — FAIR VALUE MEASUREMENTS
Fair value is defined as the price that would be received for sale of an asset or paid to transfer of a liability, in an orderly transaction between market participants at the measurement date. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include:
| ● | Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets; |
| ● | Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and |
| ● | Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. |
In some circumstances, the inputs used to measure fair value might be categorized within different levels of the fair value hierarchy. In those instances, the fair value measurement is categorized in its entirety in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement.
The over-allotment option was accounted for as a liability in accordance with FASB ASC 480 and is presented within liabilities on the balance sheet. The over-allotment option liability is measured at fair value at inception and on a recurring basis, with changes in fair value presented within changes in fair value of over-allotment option liability in the statement of operations.
The fair value of the over-allotment option liability is $104,100. The Company used a Black-Scholes model to value the over-allotment option. The over-allotment option liability was classified within Level 3 of the fair value hierarchy at the measurement dates due to the use of unobservable inputs inherent in pricing models are assumptions related to expected share-price volatility, expected life and risk-free interest rate. The Company estimates the volatility of its ordinary shares based on historical volatility that matches the expected remaining life of the option. The risk-free interest rate is based on the U.S. Treasury zero-coupon yield curve on the grant date for a maturity similar to the expected remaining life of the option. The expected life of the option is assumed to be equivalent to their remaining contractual term.
The key inputs into the Black-Scholes model were as follows at initial measurement of the over-allotment option:
| October 30, 2026 | ||||
| Volatility | 2.81 | % | ||
| Expected term (years) | 0.12 | |||
| Daily treasury yield curve | 4.13 | % | ||
| Exercise price | $ | 10.00 | ||
| Fair value of over-allotment unit | $ | 0.07 | ||
The fair value of the Public Share Rights issued in the Initial Public Offering is $1,500,000, or $0.15 per Public Share Right. The Public Share Rights have been classified within shareholders’ equity and will not require remeasurement after issuance. The Public Share Rights were valued using Probability-Weighted Expected Return Method prepared by a third party valuation firm and classified within Level 3 of the fair value hierarchy at the measurement dates due to the use of unobservable inputs inherent in assumptions related to the market adjustments as noted below. The following table presents the quantitative information regarding market assumptions used in the valuation of the Public Share Rights:
| October 30, 2026 | ||||
| Implied Class A share price | $ | 9.85 | ||
| Expected term to de-SPAC (years) | 0.67 | |||
| Probability of de-SPAC and instrument-specific market adjustment | 6.00 | % | ||
| Risk-free rate | 4.24 | % | ||
NOTE 10 — SUBSEQUENT EVENTS
The Company evaluated subsequent events and transactions that occurred after the balance sheet date through the date that the financial statement was issued. Based upon this review, the Company did not identify any subsequent events that would have required adjustment or disclosure in the financial statement.
F-15