Filed
by Columbus Circle Capital Corp II
Pursuant
to Rule 425 under the Securities Act of 1933, as amended and deemed filed
pursuant
to Rule 14a-12 under the Securities Exchange Act of 1934, as amended
Subject
Company: Columbus Circle Capital Corp II
Subject
Company: Elroy Air, Inc.
Commission
File No.: 001-43112
The
following materials were made available in connection with the proposed business combination (the “Business Combination”)
between Columbus Circle Capital Corp II (to be renamed Inflection Point Acquisition Corp. VII) (“IPAC”) and Elroy Air, Inc.
(“Elroy Air”).
Set
forth below is an email communication sent to certain employees of Elroy Air on August 12, 2026.
Elroy
Air’s deSPAC Going-Public Employee Q&A
This
Q&A is intended to provide answers for employees to commonly asked questions in connection with the proposed going-public deSPAC
business combination (the “Business Combination”). However, all information in this Q&A is qualified in its entirety
by reference to the Business Combination Agreement, form of Lock-up Agreement, and other relevant documents which have been, or will
be, filed by the company with the U.S. Securities and Exchange Commission (the “SEC”). Additionally, this Q&A does not
address all tax, accounting or legal considerations that may be relevant to your particular circumstances. This Q&A is for general
informational purposes only and is not intended to be, and should not be construed as, tax, accounting, legal or other professional advice.
Employees should consult their own independent tax, accounting, and other advisors regarding the consequences of the Business Combination,
including the application of U.S. federal, state, local, and non-U.S. tax laws to their specific situation.
Lock-up
Agreements
| ● | What
is the term of the lock-up period? |
| ○ | Certain
stockholders are prohibited from selling, transferring or otherwise disposing of any outstanding
shares of common stock, any shares of common stock issuable upon exercise of options, or
any securities convertible into, or exercisable, redeemable or exchangeable for common stock,
until the earliest of: |
| ■ | 6
months after the closing of the Business Combination, or |
| ■ | the
date on which the common stock has closed at or above $12.00 per share for 20 trading days
during any 30-trading day period commencing at least 30 days after closing of the Business
Combination. |
| ● | To
whom will the lock-up period apply? |
| ○ | Current
employees of Elroy Air, and equity holders of Elroy Air who will receive, or would receive
upon exercise of vested or unvested options, 1% or more of the aggregate consideration to
be paid to the holders of securities of Elroy Air in the Business Combination. If you are
unsure whether the lock-up period will apply to you, please contact management to confirm. |
Other
Trading Restrictions
| ● | In
addition to the lock-up period, will there be any other trading restrictions? |
| ○ | Yes.
The post-closing public company will be subject to U.S. securities laws restricting insider
trading. The company will adopt an insider trading policy upon closing of the Business Combination
which, among other things, will impose quarterly blackout periods during which transactions
in the company’s securities will be prohibited by certain employees. The company may
also initiate event-driven blackout periods in certain circumstances and require pre-clearance
of transactions in the company’s securities by certain individuals. Even outside of
these blackout periods, employees may not undertake any transactions in company securities
while in possession of material non-public information regarding the company. |
| ● | When
can option holders exercise vested stock options? |
| ○ | Holders
of outstanding stock options can decide when to exercise vested stock options, subject to
the following: |
| ■ | the
terms of their stock option agreements, |
| ■ | payment
of the applicable option exercise price and any required withholding taxes, |
| ■ | applicable
insider trading policies and procedures, and |
| ■ | any
applicable lock-up restrictions. |
| ○ | Practically
speaking: employees of Elroy Air can exercise vested options freely, but should consider
required payments to exercise and restrictions on the ability to sell exercised shares when
making an exercise decision. |
| ● | Can
employees early exercise their existing options for unvested shares? |
| ○ | Early
exercise is generally not available per our standard forms of stock option agreements. However,
employees should refer to their individual stock option agreements to confirm. |
| ● | For
former employees who hold stock options, how do those interact with the lock-up period and
post-Business Combination trading restrictions? |
| ○ | We
expect that most former employees will not be bound by a lock-up since they will not meet
the 1% threshold described above. We also do not anticipate that former employees who are
no longer affiliated with the company will be subject to the company’s insider trading
policy, including quarterly or event-driven blackout periods. However, any transactions by
our former employees will still be subject to applicable U.S. securities laws. |
| ● | How
will the company communicate material news and updates to employees after becoming a public
company, given that employees will be subject to insider trading rules and other restrictions
that didn’t exist before? |
| ○ | As
a public company, we will communicate material news through issuance of press releases and
filings with the SEC. Any employee communications will be made in compliance with our insider
trading policy, other applicable policies and applicable law. We will have special training
for our employees to explain in detail the insider trading policy and other relevant considerations
for public companies. |
Treatment
of Existing Equity Awards in the Business Combination
| ● | What
happens to our unexercised options (vested and unvested) in the Business Combination? Are
they converted, accelerated, or carried through as is? |
| ○ | Your
unexercised options will automatically become options of the post-closing public company,
exercisable for a number of shares and with an applicable exercise price reflecting the conversion
ratio in the Business Combination, but will retain their original vesting schedule and other
terms. |
| ● | Will
we be able to elect a cashless exercise of stock options after the closing of the Business
Combination? |
| ○ | We
expect that after closing of the Business Combination, we will appoint a captive broker and
set up administrative procedures to facilitate cashless exercises – however, this is
not currently available and will take some time to arrange following closing of the Business
Combination. Holders of stock options will receive further updates when a captive broker
is appointed and cashless exercise becomes available. |
Tax
Considerations
| ● | Does
the merger preserve tax benefits on shares we’ve already exercised, including the five-year
holding period required for the federal capital gains exemption on qualified small business
stock (“QSBS”)? |
| ○ | Holding
a stock option? The QSBS clock has not started. |
| ○ | Exercised
a stock option? The clock starts on the date of exercise of vested shares. |
| ○ | For
the shares to qualify as QSBS when you exercise, among other requirements, the company’s
gross assets must be under the statutory limit (for shares issued before July 4, 2025, the
statutory limit is $50 million) on the date of exercise, not the date the options were originally
granted. |
| ○ | In
summary, the transaction should theoretically preserve tax benefits on shares already exercised,
but only if the conditions of hold-time and company gross assets (among other requirements)
on the date you began owning the shares are met. |
| ● | What
is the intended tax treatment of the merger for employee equity holders? Is it structured
as a tax-free reorganization? |
| ○ | Yes,
the merger is intended to be treated as a tax-free reorganization. The company’s legal
counsel is expected to deliver an opinion with the company’s registration statement
that the merger should so qualify; however, the obligations of the parties to complete the
merger are not conditioned on the receipt of such opinion. Further, such opinion will be
based on certain assumptions and representations made by the parties, and if any such assumption
or representation is or becomes incorrect, incomplete, inaccurate, or is violated, or if
there is a change in U.S. federal income tax law after the date the opinion is issued, the
validity of the opinion may be adversely affected. Such opinion is also not binding on the
IRS or any court, and no IRS ruling will be sought with respect to the tax treatment of the
merger. As a result, no assurance can be given that the IRS will not challenge such treatment
or that a court would not sustain such a challenge, and there can be no assurance that the
merger will so qualify. |
| ● | When
will we have a new 409A valuation? |
| ○ | Expecting
to have this soon, and should be approved in the first half of August. |
Post-Closing
Compensation Arrangements
| ● | Will
the company adopt a new equity incentive plan for future grants in connection with the Business
Combination? |
| ○ | Yes.
We will establish a new equity incentive plan in connection with the closing of the Business
Combination. |
| ○ | The
new equity incentive plan will contain terms and conditions standard for newly public companies
of our size and industry, and we expect to transition to RSUs for future equity grants. |
| ○ | Compensation
will continue to be structured as a mix of cash and equity securities of the company after
the closing of the Business Combination. |
| ● | Will
there be new retention incentives or equity grants for current employees? |
| ○ | Any
new equity grants will be made in the Board’s sole discretion, subject to applicable
law and the terms and conditions of the Business Combination Agreement and other relevant
ancillary agreements. If you receive an additional equity grant, you will be notified. |
| ● | Should
we expect any changes in compensation arrangements? |
| ○ | Our
board is evaluating our current compensation arrangements. After closing of the Business
Combination we intend to create a structured forward-going equity incentive grant policy,
details and timing TBD. |
Other
Considerations
| ● | How
is the Pre-PIPE structured? What dilution does that create for holders of Elroy Air’s
common stock? |
| ○ | The
pre-PIPE transaction was structured as an issuance of convertible promissory notes and warrants
to purchase common stock. Upon closing of the Business Combination, the convertible notes
will automatically convert to shares of preferred stock of the post-closing company. |
| ○ | Existing
common stock holders of Elroy Air will be diluted to the extent that any warrants are exercised
or any shares of preferred stock are converted to common stock. |
| ● | How
do we actually sell shares, when we are able to sell? |
| ○ | Sales
can be facilitated through the company’s designated brokerage platform once the captive
broker arrangement has been established post-closing of the Business Combination, subject
to any applicable lock-up restrictions or other trading restrictions described above. |
| ● | Where
can we find additional information on the full deal terms of the Business Combination and
related transactions? |
| ○ | The
Business Combination Agreement was filed as an exhibit to the Form 8-K filed with the SEC
on July 2, 2026 and is available at this link: https://www.sec.gov/ix?doc=/Archives/edgar/data/2088805/000121390026074998/ea0296438-8k425_columbus2.htm |
| ○ | Additionally,
the company will file a registration statement on Form S-4, which will include further information
about the Business Combination and will be available on the SEC’s website. |
Additional
Information
The Business Combination will be submitted to
shareholders of IPAC for their consideration. In connection with the Business Combination, IPAC has confidentially submitted a draft registration
statement on Form S-4 to the SEC and, following SEC review, intends to file the registration statement (as amended and supplemented from
time to time, the “Registration Statement”) with the SEC, which will include a proxy statement/prospectus and certain other
related documents, which will serve as both the proxy statement to be distributed to shareholders of IPAC in connection with its solicitation
for proxies for the vote by its shareholders in connection with the Business Combination and other matters to be described in the Registration
Statement, as well as the prospectus relating to the offer and sale of the securities to be issued to securityholders of IPAC and equityholders
of Elroy Air in connection with the completion of the Business Combination. After the Registration Statement is declared effective, IPAC
will mail a definitive proxy statement and other relevant documents to its shareholders as of the record date established for voting on
the Business Combination. This communication is not a substitute for the Registration Statement, the definitive proxy statement/prospectus
or any other document that IPAC will send to its shareholders in connection with the Business Combination.
INVESTORS
AND SECURITY HOLDERS ARE ADVISED TO READ, WHEN AVAILABLE, THE REGISTRATION STATEMENT, PROXY STATEMENT/PROSPECTUS AND ANY OTHER RELEVANT
DOCUMENTS FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY IF AND WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION
ABOUT THE BUSINESS COMBINATION AND THE PARTIES TO THE BUSINESS COMBINATION. Investors and security holders will be able to obtain copies
of these documents (if and when available) and other documents filed with the SEC free of charge at www.sec.gov. The definitive proxy
statement/final prospectus (if and when available) will be mailed to shareholders of IPAC as of a record date to be established for voting
on the Business Combination. Shareholders of IPAC will also be able to obtain copies of the proxy statement/prospectus without charge,
once available, by directing a request to: Columbus Circle Capital Corp. II, 3 Columbus Circle, 24th Floor, New York, NY 10019.
Participants
in the Solicitation
IPAC
and its directors, executive officers, and other members of management, and consultants, under SEC rules, may be deemed participants
in the solicitation of proxies from IPAC’s shareholders with respect to the Business Combination. A list of the names of those
directors and executive officers and a description of their interests in IPAC is contained in the sections entitled “Item 12. Security
Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters” and “Item 10. Directors, Executive
Officers and Corporate Governance” of IPAC’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed
with the SEC on March 30, 2026, and which is available free of charge at the SEC’s website at www.sec.gov. Additional information
regarding the interests of such participants will be contained in the Registration Statement when available.
Elroy
Air, its directors, executive officers, other members of management, and employees, under SEC rules, may be deemed participants in the
solicitation of proxies of IPAC’s shareholders in connection with the Business Combination. A list of the names of such directors
and executive officers and information regarding their interests in the Business Combination will be included in the Registration Statement
when available.
Forward
Looking Statements
Certain
statements made herein are not historical facts but may be considered “forward-looking statements” within the meaning of
Section 27A of the Securities Act of 1933 (“Securities Act”), as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended. Forward-looking statements generally are accompanied by words such as “believe,” “may,”
“will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,”
“should,” “would,” “plan,” “predict,” “potential,” “seem,” “seek,”
“future,” “outlook” or the negatives of these terms or variations of them or similar terminology or expressions
that predict or indicate future events or trends or that are not statements of historical matters. These forward-looking statements include,
but are not limited to, statements regarding future events, the Business Combination, the estimated or anticipated future results and
benefits of the combined company (referred to herein as “New Elroy Air”) following the Business Combination, including the
likelihood and ability of the parties to successfully consummate the Business Combination, Elroy Air’s demand backlog and potential
revenue opportunities, future opportunities for New Elroy Air and other statements that are not historical facts.
These statements are based on the current expectations
of IPAC’s and/or Elroy Air’s management and are not predictions of actual performance. These forward-looking statements are
provided for illustrative purposes only and are not intended to serve as, and must not be relied on, by any investor as a guarantee, an
assurance, a prediction or a definitive statement of fact or probability. There can be no assurance that New Elroy Air will use the proceeds
of the Business Combination and the associated PIPE investment as currently planned, and management will have broad discretion over the
use of such proceeds. Actual events and circumstances are difficult or impossible to predict and will differ from assumptions. Many actual
events and circumstances are beyond the control of IPAC and Elroy Air. These statements are subject to a number of risks and uncertainties
regarding Elroy Air’s business and the Business Combination, and actual results may differ materially. These risks and uncertainties
include, but are not limited to: general economic, political and business conditions; the inability of the parties to consummate the Business
Combination or the occurrence of any event, change or other circumstances that could give rise to the termination of the Business Combination
Agreement; the number of redemption requests made by IPAC’s shareholders in connection with the Business Combination; the outcome
of any legal proceedings that may be instituted against the parties following the announcement of the Business Combination; the risk that
the approval of the shareholders of Elroy Air or IPAC for the potential transaction is not obtained; failure to realize the anticipated
benefits of the Business Combination, including as a result of a delay in consummating the potential transaction; the risk that the Business
Combination disrupts current plans and operations as a result of the announcement and consummation of the Business Combination; the risks
related to the rollout of Elroy Air’s business and the timing of expected business milestones; the fact that Elroy Air’s demand
pipeline currently consists of non-binding letters of intent and memorandums of understanding and the risk that such letters of intent
and memorandums of understanding may not convert to binding orders and there can be no assurance that any or all of such letters of intent
and memorandums of understanding will result in future revenue and accordingly investors should not place undue reliance on such demand
pipeline figures as an indicator of future revenue or business performance; risks related to obtaining and maintaining necessary regulatory
approvals and certifications for the Federal Aviation Administration, Department of Defense, and other governmental authorities for drone
operations; risks related to Elroy Air’s ability to scale commercial production of the Chaparral, including reliance on a third-party
manufacturing partner, the sufficiency of PIPE proceeds to fund production, and the risk that stated performance specifications may not
be achieved without additional development or certification; the effects of competition on Elroy Air’s business; the ability of
New Elroy Air to execute its growth strategy, manage growth profitably and retain its key employees; the ability of New Elroy Air to obtain
or maintain the listing of its securities on a U.S. national securities exchange following the Business Combination; costs related to
the Business Combination; and other risks that will be detailed from time to time in filings with the SEC. The foregoing list of risk
factors is not exhaustive. There may be additional risks that Elroy Air and IPAC presently do not know or that Elroy Air and IPAC currently
believe are immaterial that could also cause actual results to differ from those contained in forward-looking statements. In addition,
forward-looking statements provide Elroy Air’s and IPAC’s expectations, plans or forecasts of future events and views as of
the date of this communication. Elroy Air and IPAC anticipate that subsequent events and developments will cause their assessments to
change. However, while Elroy Air and/or IPAC may elect to update these forward-looking statements in the future, Elroy Air and IPAC specifically
disclaim any obligation to do so. These forward-looking statements should not be relied upon as representing Elroy Air’s or IPAC’s
assessments as of any date subsequent to the date of this communication. Accordingly, undue reliance should not be placed upon the forward-looking
statements. Nothing herein should be regarded as a representation by any person that the forward-looking statements set forth herein will
be achieved or results of such forward-looking statements will be achieved.
No
Offer or Solicitation
This
communication is for informational purposes only and is not (i) an offer to purchase, nor a solicitation of an offer to sell, subscribe
for or buy any securities, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in contravention of applicable
law nor (ii) the solicitation of any vote in any jurisdiction pursuant to the Business Combination or otherwise. No offer of securities
shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act. No securities commission
or securities regulatory authority in the United States or any other jurisdiction has in any way passed upon the merits of the Business
Combination or the accuracy or adequacy of this communication.
