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:
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).
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.
Simultaneously with the closing of the IPO, the
Company completed the private sale (the “Private Placement”) of an aggregate of 825,000 units (the “Private
Placement Units”) to the Sponsor, Cohen & Company Capital Markets, a division of Cohen & Company Securities, LLC (“CCM”),
and Clear Street LLC (“Clear Street”), with CCM and Clear Street acting as representatives of the underwriters, at a price
of $10.00 per Private Placement Unit. Of those Private Placement Units, the Sponsor purchased 550,000 Private Placement Units, CCM purchased
261,250 Private Placement Units, and Clear Street purchased 13,750 Private Placement Units.
A total of $275,000,000, or $10.00 per Unit, comprised
of the proceeds from the IPO (which amount includes the underwriters’ deferred discount of up to $12,650,000) and the Private Placement,
was placed in a U.S.-based trust account maintained by Continental Stock Transfer & Trust Company, acting as trustee.
An audited balance sheet as of July 9, 2026, reflecting
the receipt of the proceeds from the IPO and the Private Placement has been issued by the Company and is included as Exhibit 99.1 to this
Current Report on Form 8-K.
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.
Exhibit 99.1
FREEDOM METALS ACQUISITION CORP.
INDEX TO FINANCIAL STATEMENT
| |
|
Page |
| Financial Statement of Freedom Metals Acquisition Corp.: |
|
|
| Report of Independent Registered Public Accounting Firm (PCAOB ID 199) |
|
F-2 |
| Balance Sheet as of July 9, 2026 |
|
F-3 |
| Notes to Financial Statement |
|
F-4 |
Report of Independent Registered Public Accounting
Firm
To the Shareholders and Board of Directors of
Freedom Metals Acquisition Corp.
Opinion on the Financial Statement
We have audited the accompanying balance sheet
of Freedom Metals Acquisition Corp. (the “Company”) as of July 9, 2026, 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 July 9, 2026, in conformity with accounting principles generally accepted in the United States of America.
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/ CBIZ CPAs P.C.
CBIZ CPAs P.C.
We have served as the Company’s auditor
since 2026.
New York, NY
July 16, 2026
FREEDOM METALS ACQUISITION CORP.
BALANCE SHEET
JULY 9, 2026
| Assets | |
| |
| Current assets | |
| |
| Cash | |
$ | 2,382,295 | |
| Due from Sponsor | |
| 16,554 | |
| Prepaid expenses | |
| 80,000 | |
| Total current assets | |
| 2,478,849 | |
| Cash held in Trust Account | |
| 275,000,000 | |
| Total Assets | |
$ | 277,478,849 | |
| | |
| | |
| Liabilities, Class A Ordinary Shares Subject to Possible Redemption, and Shareholders’ Deficit | |
| | |
| Current liabilities | |
| | |
| Accrued offering costs | |
$ | 405,706 | |
| Accrued expenses | |
| 54,582 | |
| Total current liabilities | |
| 460,288 | |
| Deferred underwriting fee | |
| 11,000,000 | |
| Total Liabilities | |
| 11,460,288 | |
| | |
| | |
| Commitments and Contingencies (Note 6) | |
| | |
| Class A ordinary shares subject to possible redemption, $0.0001 par value; 27,500,000 shares at redemption value of $10.00 per share | |
| 275,000,000 | |
| | |
| | |
| Shareholders’ Deficit | |
| | |
| Preference shares, $0.0001 par value; 1,000,000 shares authorized; none issued or outstanding | |
| — | |
| Class A ordinary shares, $0.0001 par value; 300,000,000 shares authorized; 825,000 shares issued and outstanding (excluding 27,500,000 shares subject to possible redemption) | |
| 83 | |
| Class B ordinary shares, $0.0001 par value; 30,000,000 shares authorized; 9,166,667 shares issued and outstanding(1) | |
| 917 | |
| Additional paid-in capital | |
| — | |
| Accumulated deficit | |
| (8,982,439 | ) |
| Total Shareholders’ Deficit | |
| (8,981,439 | ) |
| Total Liabilities, Class A Ordinary Shares Subject to Possible Redemption, and Shareholders’ Deficit | |
$ | 277,478,849 | |
| (1) |
On July 9, 2026, the underwriters forfeited their over-allotment option, as such, 1,375,000 Class B ordinary shares were surrendered by the Sponsor for no consideration (see Note 5). |
The accompanying notes are an integral part of
the financial statement.
FREEDOM METALS ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENT
JULY 9, 2026
Note 1 — Organization and Business
Operations
Freedom Metals Acquisition Corp. (the “Company”)
is a check company incorporated as a Cayman Islands exempted corporation on February 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 has not selected any specific Business Combination target
and the Company has not, nor has anyone on its behalf, engaged in any substantive discussions, directly or indirectly, with any Business
Combination target with respect to an initial Business Combination with the Company. Although the Company currently intend to focus on
target businesses in the mining and critical minerals industry, the Company may pursue an acquisition opportunity in any business, industry,
sector or geographical location.
As of July 9, 2026, the Company had not commenced
any operations. All activity for the period from February 25, 2026 (inception) through July 9, 2026 relates to the Company’s
formation and the initial public offering (the “Initial Public Offering”), which is described below. The Company will not
generate any operating revenues until after the completion of its initial Business Combination, at the earliest. The Company will generate
non-operating income in the form of interest income on the proceeds derived from the Initial Public Offering. The Company has selected
December 31 as its fiscal year end.
The registration statement for the Company’s
Initial Public Offering was declared effective on July 7, 2026. On July 9, 2026, the Company consummated the Initial Public Offering of
27,500,000 units (the “Units” and, with respect to the Class A ordinary shares included in the Units being offered, the “Public
Shares”) at $10.00 per Unit, generating gross proceeds of $275,000,000. Each Unit consists of one Public Share and one-third of
one redeemable warrant (each, a “Public Warrant”).
Simultaneously with the closing of the Initial
Public Offering, the Company consummated the sale of 825,000 units (the “Private Placement Units”) at a price of $10.00 per
Private Placement Unit, in a private placement to the Company’s sponsor, NLC America SPAC 1 LLC (the “Sponsor”), and
Cohen & Company Capital Markets, a division of Cohen & Company Securities, LLC (“Cohen”) and Clear Street LLC (“CS”),
the representatives of the underwriters (the “underwriters”), generating gross proceeds of $8,250,000. Each Private Placement
Unit consists of one Class A ordinary share (“private placement share” or, collectively, “private placement shares”)
and one-third of one warrant (the “Private Placement Warrant” and together with the Public Warrants, the “Warrants”).
Each whole Warrant entitles the holder to purchase one Class A ordinary share at a price of $11.50 per share, subject to adjustment. Of
those 825,000 Private Placement Units, the Sponsor purchased 550,000 Private Placement Units, Cohen purchased 261,250 Private Placement
Units and CS purchased 13,750 Private Placement Units.
Transaction costs amounted to $17,592,906, consisting
of $5,500,000 cash underwriting fees, $11,000,000 of deferred underwriting fees, excess fair value over cost of founder shares transferred
to non-managing members of $428,475, and $664,431 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 Private Placement Units, although
substantially all of the net proceeds are intended to be generally applied toward consummating a Business Combination (less deferred underwriting
commissions).
The Business Combination must be with one or more
target businesses that together have a fair market value equal to at least 80% of the net balance in the Trust Account (as defined below)
(excluding taxes payable on the income earned on the Trust Account) at the time of the signing an agreement to enter into a Business Combination.
However, the Company will only complete a Business Combination if the post-Business Combination company owns or acquires 50% or more of
the outstanding voting securities of the target or otherwise acquires a controlling interest in the target 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.
FREEDOM METALS ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENT
JULY 9, 2026
Note 1 — Organization and Business
Operations (cont.)
Following the closing of the Initial Public
Offering, on July 9, 2026, an amount of $275,000,000 ($10.00 per Unit) from the net proceeds of the sale of the Units and the
Private Placement Units was placed in the trust account (the “Trust Account”), located in the United States, with
Continental Stock Transfer & Trust Company acting as trustee, and may only be invested in U.S. government treasury
obligations with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under
the Investment Company Act, which invest only in direct U.S. government treasury obligations; the holding of these assets in
this form is intended to be temporary and for the sole purpose of facilitating the intended Business Combination. To mitigate the
risk that 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 management team’s ongoing
assessment of all factors related to the 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. Except with respect to interest earned on the funds held in the Trust Account that may be released to the
Company to pay its taxes, if any, the proceeds from the Initial Public Offering and the sale of the Private Placement
Warrants will not be released from the Trust Account until the earliest of (i) the completion of the Company’s
initial Business Combination, (ii) the redemption of the Company’s public shares if the Company is unable to complete the
initial Business Combination within 18 months (or 24 months from the closing of Initial Public Offering if the Company has
executed a definitive agreement for the initial Business Combination within 18 months from the closing of the Initial Public
Offering) or by such earlier liquidation date as our board of directors may approve (the “Completion Window”), subject
to applicable law, or (iii) the redemption of the Company’s public shares properly submitted in connection with a
shareholder vote to amend the Company’s amended and restated memorandum and articles of association to (A) modify the
substance or timing of the Company’s obligation to allow redemption in connection with the initial Business Combination or to
redeem 100% of the Company’s public shares if the Company has not consummated an initial Business Combination within the
Completion Window or (B) with respect to any other material provisions relating to shareholders’ rights or pre-initial
Business Combination activity. The proceeds deposited in the Trust Account could become subject to the claims of the Company’s
creditors, if any, which could have priority over the claims of the Company’s public shareholders.
The Company will provide the Company’s public
shareholders with the opportunity to redeem all or a portion of their public shares upon the completion of the initial Business Combination
either (i) in connection with a general meeting called to approve the initial Business Combination or (ii) without a shareholder
vote by means of a tender offer. The decision as to whether the Company will seek shareholder approval of a proposed initial Business
Combination or conduct a tender offer will be made by the Company, solely in its discretion. The public shareholders will be entitled
to redeem their shares at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account calculated
as of two business days prior to the consummation of the initial Business Combination, including interest earned on the funds
held in the Trust Account and not previously released to the Company for permitted withdrawals, divided by the number of then outstanding
public shares, subject to the limitations. The amount in the Trust Account is initially invested at $10.00 per Public Share.
The Class A ordinary 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 Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 480
“Distinguishing Liabilities from Equity.”
The Company will have only the duration of the
Completion Window to complete the initial Business Combination. However, if the Company is unable to complete its initial Business Combination
within the Completion Window, the Company will as promptly as reasonably possible but not more than ten business days thereafter,
redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including
interest earned on the funds held in the Trust Account and not previously released to the Company for taxes payable (excluding any excise
tax) (together referred to as the “permitted withdrawals”) and up to $100,000 of interest to pay dissolution expenses, divided
by the number of then outstanding public shares, which redemption will constitute full and complete payment for the public shares and
completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidation or other distributions,
if any), subject to the Company’s obligations under Cayman Islands law to provide for claims of creditors and subject to the other
requirements of applicable law.
FREEDOM METALS ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENT
JULY 9, 2026
Note 1 — Organization and Business
Operations (cont.)
The Sponsor, officers and directors have
entered into a letter agreement with the Company, pursuant to which they have agreed to (i) waive their redemption rights with
respect to their founder shares and public shares in connection with the completion of the initial Business Combination or an
earlier redemption in connection with the commencement of the procedures to consummate the initial Business Combination if the
Company determines it is desirable to facilitate the completion of the initial Business Combination; (ii) waive their
redemption rights with respect to their founder shares and public shares in connection with a shareholder vote to approve an
amendment to the Company’s amended and restated memorandum and articles of association; (iii) waive their rights to
liquidating distributions from the Trust Account with respect to their founder shares if the Company fails to complete the initial
Business Combination within the Completion Window, although they will be entitled to liquidating distributions from the Trust
Account with respect to any public shares they hold if the Company fails to complete the initial Business Combination within the
Completion Window and to liquidating distributions from assets outside the trust account; and (iv) vote any founder shares held
by them and any public shares purchased during or after the Initial Public Offering (including in open market and
privately-negotiated transactions) in favor of the initial Business Combination.
The Sponsor has agreed that it will be liable
to the Company if and to the extent any claims by a third party for services rendered or products sold to the Company, or a prospective
target business with which the Company has entered into a written letter of intent, confidentiality or other similar agreement or Business
Combination agreement, reduce the amount of funds in the Trust Account to below the lesser of (i) $10.00 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 $10.00 per
share due to reductions in the value of the trust assets, less 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 in the Trust Account (whether
or not such waiver is enforceable) nor will it apply to any claims under the Company’s indemnity of the underwriters of the Initial
Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities
Act”). However, the Company has not asked the Sponsor to reserve for such indemnification obligations, nor has the Company 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.
Note 2 — Summary of Significant
Accounting Policies
Basis of Presentation
The accompanying financial statement is presented
in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to
the rules and regulations of the United States Securities and Exchange Commission (the “SEC”).
Liquidity and Capital Resources
The Company’s liquidity needs up to July
9, 2026 had been satisfied through the loan under an unsecured promissory note from the Sponsor of up to $300,000 and through the proceeds
derived from the Initial Public Offering allocated to pay fees and expenses incurred in connection with the closing of the offering and
for working capital purposes amounting to $2,750,000. On July 9, 2026, the Company repaid the total outstanding balance of the promissory
note amounting to $260,296 (see Note 5). As of July 9, 2026, the Company had cash of $2,382,295 and working capital of $2,018,561.
In order to fund working capital deficiencies
or 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 is not obligated to, loan the Company funds as may be required (the “Working Capital
Loans”). If the Company completes a Business Combination, the Company would repay such loaned amounts at that time. Up to $1,500,000
of such Working Capital Loans may be converted into units upon consummation of the Business Combination at a price of $10.00 per unit.
The units would be identical to the Private Placement Units. As of July 9, 2026, the Company had no borrowings under the Working Capital
Loans.
In connection with the Company’s assessment
of going concern considerations in accordance with FASB ASC 205-40, “Presentation of Financial Statements—Going Concern,”
management has determined that the Company has sufficient funds to finance the working capital needs of the Company within one year from
the date of issuance of the financial statement. However, if the estimate of the costs of identifying a target business, undertaking in-depth
due diligence and negotiating a Business Combination are less than the actual amount necessary to do so, the Company may have insufficient
funds available to operate its business prior to the initial Business Combination. The Company has the duration of the Completion Window
to complete the initial Business Combination.
FREEDOM METALS ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENT
JULY 9, 2026
Note 2 — Summary of Significant
Accounting Policies (cont.)
Emerging Growth Company Status
The Company is an “emerging growth company,”
as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart our Business Startups Act of 2012,
(the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable
to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the
auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, 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 US 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.
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 $2,382,295 in cash and no cash
equivalents as of July 9, 2026.
Cash Held in Trust Account
As of July 9, 2026, the assets held in the Trust
Account, amounting to $275,000,000, 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.
FREEDOM METALS ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENT
JULY 9, 2026
Note 2 — Summary of Significant
Accounting Policies (cont.)
Offering Costs
The Company complies with the requirements of
the ASC 340-10-S99 and SEC Staff Accounting Bulletin (“SAB”) Topic 5A — “Expenses of Offering.” Offering
costs consist principally of professional and registration fees that are related to the Initial Public Offering. FASB ASC 470-20, “Debt
with Conversion and Other Options,” addresses the allocation of proceeds from the issuance of convertible debt into its equity and
debt components. The Company applies this guidance to allocate Initial Public Offering proceeds from the Units between Class A ordinary
shares and Warrants, using the residual method by allocating Initial Public Offering proceeds first to assigned value of the Warrants
and then to the Class A ordinary shares. Offering costs allocated to the Public Shares were charged to temporary equity, and offering
costs allocated to the Public Warrants and Private Placement Units were charged to shareholders’ deficit as Public Warrants and
Private Placement Warrants, after management’s evaluation, were accounted for under equity treatment.
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 Measurements,” approximates the carrying
amounts represented in the balance sheet, primarily due to their short-term nature.
Income Taxes
The Company accounts for income taxes under
ASC Topic 740, “Income Taxes,” which requires an asset and liability approach to financial accounting and reporting
for income taxes. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax
bases of assets and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates
applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when
necessary, to reduce deferred tax assets to the amount expected to be realized.
ASC Topic 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’s management determined that the Cayman Islands is the Company’s major tax jurisdiction. The Company
recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. As of July 9, 2026, there were no
unrecognized tax benefits and no amounts accrued for interest and penalties. The Company is currently not aware of any issues under review
that could result in significant payments, accruals or material deviation from its position.
The Company is considered to be an exempted Cayman
Islands company with no connection to any other taxable jurisdiction and is presently not subject to income taxes or income tax filing
requirements in the Cayman Islands or the United States. As such, the Company’s tax provision was zero for the period presented.
Warrant Instruments
The Company accounted for the Public Warrants
and Private Placement Warrants issued in connection with the Initial Public Offering and the sale of Private Placement Units in accordance
with the guidance contained in FASB ASC Topic 815, “Derivatives and Hedging”. Accordingly, the Company evaluated and classified
the warrant instruments under equity treatment at their relative fair values.
FREEDOM METALS ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENT
JULY 9, 2026
Note 2 — Summary of Significant
Accounting Policies (cont.)
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 July 9, 2026, Class A ordinary shares subject to possible redemption are presented at redemption value as temporary equity, outside
of the shareholders’ deficit section of the Company’s balance sheet. As of July 9, 2026, the Class A ordinary shares subject
to possible redemption reflected in the balance sheet are reconciled in the following table:
| Gross proceeds | |
$ | 275,000,000 | |
| Less: | |
| | |
| Proceeds allocated to Public Warrants | |
| (3,831,667 | ) |
| Public Shares issuance costs | |
| (16,906,191 | ) |
| Plus: | |
| | |
| Remeasurement of carrying value to redemption value | |
| 20,737,858 | |
| Class A ordinary shares subject to possible redemption, July 9, 2026 | |
$ | 275,000,000 | |
Recent Accounting Pronouncements
Management does not believe that any recently
issued, but not effective, accounting standards, if currently adopted, would have a material effect on the Company’s financial statement.
Note 3 — Initial Public Offering
In the Initial Public Offering on July 9, 2026,
the Company sold 27,500,000 Units at a purchase price of $10.00 per Unit. Each Unit consists of one Public Share, and one-third of
one Public Warrant. Each whole Public Warrant entitles the holder to purchase one Class A ordinary share at a price of $11.50 per
share, subject to adjustment. Each Public Warrant will become exercisable 30 days after the completion of the initial Business Combination
and will expire five years after the completion of the initial Business Combination, or earlier upon redemption or liquidation.
Note 4 — Private Placement
Simultaneously with the closing of the Initial
Public Offering, the Sponsor, Cohen, and CS purchased an aggregate of 825,000 Private Placement Units at a price of $10.00
per Unit, or $8,250,000 in the aggregate, in a private placement. Of those 825,000 Private Placement Units, the Sponsor has agreed to
purchase 550,000 Private Placement Units, Cohen purchased 261,250 Private Placement Units, and CS purchased 13,750 Private
Placement Units. Each whole Warrant entitles the registered holder to purchase one Class A ordinary share at a price of $11.50 per
share, subject to adjustment. Each Private Placement Unit is identical to the Units sold in this offering, except as described in
the Company’s registration statement.
FREEDOM METALS ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENT
JULY 9, 2026
Note 4 — Private Placement
(cont.)
The Sponsor and the Company’s officers and
directors have entered into a letter agreement with the Company, pursuant to which they have agreed to (i) waive their redemption
rights with respect to their founder shares and public shares in connection with the completion of the initial Business Combination or
an earlier redemption in connection with the commencement of the procedures to consummate the initial Business Combination if the Company
determines it is desirable to facilitate the completion of the initial Business Combination; (ii) waive their redemption rights with
respect to their founder shares and public shares in connection with a shareholder vote to approve an amendment to the Company’s
amended and restated memorandum and articles of association (A) to modify the substance or timing of the Company’s obligation
to allow redemption in connection with the initial Business Combination or to redeem 100% of the public shares if the Company has not
consummated an initial Business Combination within the Completion Window or (B) with respect to any other material provisions relating
to shareholders’ rights or pre-initial Business Combination activity; (iii) waive their rights to liquidating distributions
from the Trust Account with respect to their founder shares if the Company fails to complete the initial Business Combination within the
Completion Window, although they will be entitled to liquidating distributions from the Trust Account with respect to any public shares
they hold if the Company fails to complete the initial Business Combination within the Completion Window and to liquidating distributions
from assets outside the trust account; and (iv) vote any founder shares held by them and any public shares purchased during or after
the Initial Public Offering (including in open market and privately-negotiated transactions) in favor of the initial Business Combination.
Note 5 — Related Party Transactions
Founder Shares
On March 23, 2026, the Company issued an
aggregate of 10,541,667 Class B ordinary shares, $0.0001 par value (the “Founder Shares”), in exchange for a $25,000
payment (approximately $0.002 per share) from the Sponsor to cover certain expenses on behalf of the Company. Up to 1,375,000 of the Founder
Shares may be surrendered by the Sponsor for no consideration depending on the extent to which the underwriters’ over-allotment
is exercised. On July 9, 2026, the underwriters forfeited their over-allotment option, as such, the 1,375,000 Founder Shares were surrendered
by the Sponsor for no consideration.
On July 6, 2026, the Sponsor transferred an aggregate
of 2,071,778 Founder Shares to the Company’s officers, directors, and advisors (collectively as “Members”) in exchange
for their services as Members of the Company. The transfer of Founder Shares to the Members is in the scope of FASB ASC Topic 718, “Compensation-Stock
Compensation” (“ASC 718”). Under ASC 718, stock-based compensation associated with equity classified awards is measured
at fair value upon the grant date. The total fair value of the 2,071,778 Founder Shares transferred to the Members on July 6, 2026 was
$6,128,319, or $2.958 per share. The Company established the initial fair value of the Founder Shares transferred on July 6, 2026, using
a calculation prepared by a third party valuation team which takes into consideration the underlying share price of $9.86, risk-free rate
of 3.62%, and implied market adjustment of 30.0%. The Founder Shares transferred are subject to repurchase by the Sponsor in the event
the Member resigns or ceases to serve as Member of the Company prior to the consummation of the initial Business Combination. As of July
9, 2026, the Company determined that the initial Business Combination is not considered probable and therefore no compensation expense
has been recognized.
On July 6, 2026, the non-managing members of the
Sponsor subscribed for interests in the Sponsor. No new founder shares were issued to the Sponsor. Because this subscription is treated
as a transfer by the Sponsor to such non-managing members of a portion of the Founder Shares, the Company has analyzed and concluded that
such transfer is in the scope of SEC’s Staff Accounting Bulletin (“SAB”) Topic 5A, Expenses of Offering, which indicates
that “Specific incremental costs directly attributable to a proposed or actual offering of securities may properly be deferred and
charged against the gross proceeds of the offering”. The subscription of the non-managing members of the Sponsor for interests in
the Sponsor represents an indirect interest in 145,000 of the 9,166,667 Founder Shares. The subscription price paid by the non-managing
members of the Sponsor for such interests in the Sponsor was $435 in the aggregate, or $0.003 per implied Founder Share. The total fair
value of the 145,000 Founder Shares on July 6, 2026, was $428,910 or $2.958 per share. The Company established the initial fair value
of the Founder Shares on July 6, 2026, using a Monte Carlo Simulation Model, and classified as Level 3 at the measurement date due to
the use of unobservable inputs including the probability of a Business Combination, the probability of the Initial Public Offering, and
other variables. The primary assumptions used in the valuation of Founder Shares were (i) underlying share price $9.86, (ii) risk-free
rate of 3.62%, and (iii) implied market adjustment of 30.0%. The fair value of Founder Shares transferred to non-managing members less
the consideration paid by them, or $428,475, was recorded as an offering cost and was allocated solely to permanent equity and was charged
to additional paid-in capital.
FREEDOM METALS ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENT
JULY 9, 2026
Note 5 — Related Party Transactions
(cont.)
The Company’s initial shareholders
have agreed not to transfer, assign or sell any of their founder shares and any Class A ordinary shares issued upon conversion
thereof until the earlier to occur of (i) six months after the completion of the initial Business Combination or
(ii) the date on which the Company completes a liquidation, merger, share exchange or other similar transaction after the
initial Business Combination that results in all of the Company’s shareholders having the right to exchange their Class A
ordinary shares for cash, securities or other property. Any permitted transferees will be subject to the same restrictions and other
agreements of the Company’s initial shareholders with respect to any founder shares (the “Lock-up”).
Notwithstanding the foregoing, if (1) 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 at least 30 days after our initial Business
Combination or (2) if the Company consummates a transaction after the initial Business Combination which results in the
Company’s shareholders having the right to exchange their shares for cash, securities or other property, the founder shares
will be released from the Lock-up.
Promissory Note — Related Party
The Sponsor has agreed to loan the Company an
aggregate of up to $300,000 to be used for a portion of the expenses of the Initial Public Offering. The loan is non-interest bearing,
unsecured and due at the earlier of December 31, 2026 or the closing date of the Initial Public Offering. On July 9, 2026, the Company
repaid the total outstanding balance of the promissory note amounting to $260,296. Borrowings under the Note are no longer available.
Due from Sponsor
The Company paid the Sponsor an amount of $16,554
in excess of the outstanding promissory note balance at the closing of the Initial Public Offering. The excess payment of $16,554 is denoted
as a due from Sponsor on the accompanying balance sheet as of July 9, 2026.
Administrative Services Agreement
The Company entered into an agreement with the
Sponsor, commencing on July 7, 2026 through the earlier of the Company’s consummation of a Business Combination or its liquidation,
to pay the Sponsor or its affiliate a total of $25,000 per month for office space, utilities, and secretarial and administrative services.
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. If the Company completes a Business Combination, the Company would
repay the Working Capital Loans. In the event that a Business Combination does not close, the Company may use a portion of the working
capital held outside the Trust Account to repay the Working Capital Loans but no proceeds from the Trust Account would be used to repay
the Working Capital Loans. Up to $1,500,000 of such Working Capital Loans may be convertible into Private Placement Units of the
post Business Combination entity at a price of $10.00 per Unit at the option of the lender. As of July 9, 2026, no such Working Capital
Loans were outstanding.
Advisory Agreements
The Company engaged Next Layer Capital Markets,
LLC “NLC”, an affiliate of the director, and SV Capital Advisors Inc. (“SV”), an affiliate of an advisor, to provide
consulting and advisory services in connection with the Initial Public Offering, for which each will receive (i) an advisory fee equal
to 0.5% of the aggregate proceeds of the Initial Public Offering, or $1,375,000 in the aggregate, less the underwriters’ reimbursable
expenses of up to $75,000 and (ii) 1.0% of the proceeds of the Initial Public Offering, or $2,750,000 in the aggregate, payable at closing
of the initial Business Combination, payable in a combination of cash and private placement units and offset from the underwriting commissions
(Note 6) without resulting in any incremental fees to the Company.
FREEDOM METALS ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENT
JULY 9, 2026
Note 6 — Commitments and Contingencies
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 and the recent escalation
of the conflicts involving the United States, Israel, Iran and others in the Middle East and Southwest Asia. 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 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, increasing geopolitical tensions among a number
of nations. The invasion of Ukraine by Russia and escalation of the conflict involving the United States, Israel, Iran and others 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 cyberattacks 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 above mentioned factors, or any other
negative impact on the global economy, capital markets or other geopolitical conditions resulting from the Russian invasion of Ukraine,
the recent escalation of the conflicts involving the United States, Israel, Iran and others 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.
Registration Rights
The holders of the founder shares, Private Placement
Warrants and Private Placement Warrants that may be issued upon conversion of the Working Capital Loans will have registration
rights to require the Company to register for resale of any of the Company’s securities held by them and any other securities of
the Company acquired by them prior to the consummation of the initial Business Combination pursuant to a registration rights agreement
signed on the July 7, 2026. The holders of these securities are entitled to make up to three demands, excluding short form demands, that
the Company registers such securities. In addition, the holders have certain piggyback registration rights with respect to registration
statements filed subsequent to the completion of the initial Business Combination. The Company will bear the expenses incurred in connection
with the filing of any such registration statements.
Underwriters’ Agreement
The underwriters have a 45-day option from the
date of the Initial Public Offering to purchase up to an additional 4,125,000 Units to cover over-allotments, if any. On July
9, 2026, the underwriters forfeited the over-allotment option to purchase the additional 4,125,000 Units.
The underwriters were entitled to an underwriting
discount of $0.20 per Unit, or $5,500,000 in the aggregate, which was paid to the underwriters at the closing of the Initial Public Offering.
Of the $5,500,000 cash underwriting fees, $2,750,000 (less underwriters’ reimbursable expenses of up to $75,000) is allocated as
advisory fees to be paid by the underwriters to the advisors, NLC and SV. In addition, a payment of $0.40 per Unit of the gross proceeds
sold in the Initial Public Offering, or $11,000,000 in the aggregate, is payable to the underwriters upon the completion of an initial
Business Combination for deferred underwriting commissions. Of the $11,000,000 deferred underwriting fees, $5,500,000 is allocated as
advisory fees to be paid by the underwriters to the advisors, NLC and SV.
FREEDOM METALS ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENT
JULY 9, 2026
Note 7 — Shareholders’
Deficit
Preference Shares — The
Company is authorized to issue a total of 1,000,000 preference shares at par value of $0.0001. As of July 9, 2026, there were no preference
shares issued or outstanding.
Class A Ordinary Shares — The
Company is authorized to issue a total of 300,000,000 Class A ordinary shares at par value of $0.0001 per share. As of July 9, 2026,
there were 825,000 Class A ordinary shares issued and outstanding, excluding 27,500,000 shares subject to possible redemption.
Class B Ordinary Shares — The
Company is authorized to issue a total of 30,000,000 Class B ordinary shares at par value of $0.0001 per share. As of July 9, 2026,
there were 9,166,667 Class B ordinary shares issued and outstanding.
The Founder Shares will automatically convert
into Class A ordinary shares concurrently with or immediately following the consummation of the initial Business Combination or earlier
at the option of the holder on a one-for-one basis, subject to adjustment for share sub-divisions, share capitalizations, reorganizations,
recapitalizations and the like, and subject to further adjustment as provided herein. In the case that additional Class A ordinary
shares, or any other equity-linked securities, are issued or deemed issued in excess of the amounts sold in this offering and related
to or in connection with the closing of the initial Business Combination, the ratio at which Class B ordinary shares convert into
Class A ordinary shares will be adjusted (unless the holders of a majority of the outstanding Class B ordinary shares agree
to waive such adjustment with respect to any such issuance or deemed issuance) so that the number of Class A ordinary shares issuable
upon conversion of all Class B ordinary shares will equal, in the aggregate, approximately 25.0% of the sum of (i) the total
number of all Class A ordinary shares outstanding upon the completion of this offering (including any Class A ordinary shares
issued pursuant to the underwriters’ over-allotment option but excluding any private placement shares), plus (ii) all Class A
ordinary shares and equity-linked securities issued or deemed issued, in connection with the closing of the initial Business Combination
(excluding any shares or equity-linked securities issued, or to be issued, to any seller in the initial Business Combination and any private
placement-equivalent warrants issued to our sponsor or any of its affiliates or to our officers or directors upon conversion of working
capital loans) minus (iii) any redemptions of Class A ordinary shares by public shareholders in connection with an initial Business
Combination; provided that such conversion of founder shares will never occur on a less than one-for-one basis.
Holders of record of the Company’s Class A
ordinary shares and Class B ordinary shares are entitled to one vote for each share held on all matters to be voted on by shareholders.
Unless specified in the amended and restated memorandum and articles of association or as required by the Companies Act or stock exchange
rules, an ordinary resolution under Cayman Islands law and the amended and restated memorandum and articles of association, 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 is generally required to approve any matter voted on by
our shareholders. Approval of certain actions requires a special resolution under Cayman Islands law, which (except as specified below)
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, and pursuant to the amended and restated memorandum and articles
of association, such actions include amending our amended and restated memorandum and articles of association and approving a statutory
merger or consolidation with another company. There is no cumulative voting with respect to the appointment of directors, meaning, following
our initial Business Combination, the holders of more than 50% of the ordinary shares voted for the appointment of directors can elect
all of the directors. Prior to the consummation of the initial Business Combination, only holders of the Class B ordinary shares
will (i) have the right to vote on the appointment and removal of directors and (ii) be entitled to vote on continuing our company
in a jurisdiction outside the Cayman Islands (including any special resolution required to amend the constitutional documents or to adopt
new constitutional documents, in each case, as a result of our approving a transfer by way of continuation in a jurisdiction outside the
Cayman Islands). Holders of the Class A ordinary shares will not be entitled to vote on these matters during such time. These provisions
of the amended and restated memorandum and articles of association may only be amended if approved by a special resolution passed by the
affirmative vote of at least 90% (or, where such amendment is proposed in respect of the consummation of the initial Business Combination,
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.
FREEDOM METALS ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENT
JULY 9, 2026
Note 7 — Shareholders’
Deficit (cont.)
Warrants — As of
July 9, 2026, there were 9,441,667 Warrants outstanding, including 9,166,667 Public Warrants and 275,000 Private Placement Warrants. Each
whole warrant entitles the holder to purchase one Class A ordinary share at a price of $11.50 per share, subject to adjustment as
discussed herein. The warrants cannot be exercised until 30 days after the completion of the initial Business Combination, and will
expire at 5:00 p.m., New York City time, five years after the completion of the initial Business Combination or earlier
upon redemption or liquidation.
The Company will not be obligated to deliver any
Class A ordinary shares pursuant to the exercise of a warrant and will have no obligation to settle such warrant exercise unless
a registration statement under the Securities Act with respect to the Class A ordinary shares underlying the warrants is then effective
and a prospectus relating thereto is current. No warrant will be exercisable and the Company will not be obligated to issue a Class A
ordinary share upon exercise of a warrant unless the Class A ordinary share issuable upon such warrant exercise has been registered,
qualified or deemed to be exempt under the securities laws of the state of residence of the registered holder of the warrants. In the
event that the conditions in the two immediately preceding sentences are not satisfied with respect to a warrant, the holder of such warrant
will not be entitled to exercise such warrant and such warrant may have no value and expire worthless. In no event will the Company be
required to net cash settle any warrant. In the event that a registration statement is not effective for the exercised warrants, the purchaser
of a unit containing such warrant will have paid the full purchase price for the unit solely for the Class A ordinary share underlying
such unit.
Under the terms of the warrant agreement, the
Company has agreed that, as soon as practicable, but in no event later than 20 business days, after the closing of its Business
Combination, it will use its commercially reasonable efforts to file with the SEC a post-effective amendment to the registration statement
for the Initial Public Offering or a new registration statement covering the registration under the Securities Act of the Class A
ordinary shares issuable upon exercise of the warrants and thereafter will use its commercially reasonable efforts to cause the same to
become effective within 60 business days following the Company’s initial Business Combination and to maintain a current
prospectus relating to the Class A ordinary shares issuable upon exercise of the warrants until the expiration of the warrants in
accordance with the provisions of the warrant agreement. If a registration statement covering the Class A ordinary shares issuable
upon exercise of the warrants is not effective by the sixtieth (60th) business day after the closing of the initial Business
Combination, warrant holders may, until such time as there is an effective registration statement and during any period when the Company
will have failed to maintain an effective registration statement, exercise warrants on a “cashless basis” in accordance with
Section 3(a)(9) of the Securities Act or another exemption. Notwithstanding the above, if the Class A ordinary shares are
at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition of a “covered
security” under Section 18(b)(1) of the Securities Act, the Company may, at its option, require holders of public warrants
who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities
Act and, in the event the Company so elects, the Company will not be required to file or maintain in effect a registration statement,
and in the event the Company does not so elect, the Company will use its commercially reasonable efforts to register or qualify the shares
under applicable blue sky laws to the extent an exemption is not available.
If the holders exercise their public warrants
on a cashless basis, they would pay the warrant exercise price by surrendering the warrants for that number of Class A ordinary shares
equal to the quotient obtained by dividing (x) the product of the number of Class A ordinary shares underlying the warrants,
multiplied by the excess of the “fair market value” of the Class A ordinary shares over the exercise price of the warrants
by (y) the fair market value. The “fair market value” is the average reported closing price of the Class A ordinary
shares for the 10 trading days ending on the third trading day prior to the date on which the notice of exercise is
received by the warrant agent or on which the notice of redemption is sent to the holders of warrants, as applicable.
Redemption of Warrants When the Price per Class A
Ordinary Share Equals or Exceeds $18.00: The Company may redeem the outstanding warrants:
| ● | in whole and not in part; |
| ● | at a price of $0.01 per warrant; |
| ● | upon a minimum of 30 days’ prior written notice of redemption (the “30-day redemption
period”); and |
| ● | if, and only if, the closing price of the Class A ordinary shares equals or exceeds $18.00 per share
(as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant) for any 20 trading days
within a 30-trading day period commencing at least 30 days after completion of our initial Business Combination and ending three business days
before we send the notice of redemption to the warrant holders. |
FREEDOM METALS ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENT
JULY 9, 2026
Note 7 — Shareholders’
Deficit (cont.)
Additionally, if the number of outstanding Class A
ordinary shares is increased by a share capitalization payable in Class A ordinary shares, or by a sub-division of ordinary shares
or other similar event, then, on the effective date of such share capitalization, sub-division or similar event, the number of Class A
ordinary shares issuable on exercise of each warrant will be increased in proportion to such increase in the outstanding ordinary shares.
A rights offering made to all or substantially all holders of ordinary shares entitling holders to purchase Class A ordinary shares
at a price less than the fair market value will be deemed a share capitalization of a number of Class A ordinary shares equal to
the product of (i) the number of Class A ordinary shares actually sold in such rights offering (or issuable under any other
equity securities sold in such rights offering that are convertible into or exercisable for Class A ordinary shares) and (ii) the
quotient of (x) the price per Class A ordinary share paid in such rights offering and (y) the fair market value. For these
purposes (i) if the rights offering is for securities convertible into or exercisable for Class A ordinary shares, in determining
the price payable for Class A ordinary shares, there will be taken into account any consideration received for such rights, as well
as any additional amount payable upon exercise or conversion and (ii) fair market value means the volume weighted average price of
Class A ordinary shares as reported during the ten (10) trading day period ending on the trading day prior to
the first date on which the Class A ordinary shares trade on the applicable exchange or in the applicable market, regular way, without
the right to receive such rights.
Note 8 — Fair Value Measurements
Fair value is defined as the price that would
be received for sale of an asset or paid for transfer of a liability in an orderly transaction between market participants at the measurement
date. US 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 fair value of the Public Warrants is $3,831,667,
or $0.418 per Public Warrant. The fair value of Public Warrants was determined using Monte Carlo Simulation Model. The Public Warrants
have been classified within shareholders’ deficit and will not require remeasurement after issuance. The following table presents
the quantitative information regarding market assumptions used in the level 3 valuation of the Public Warrants:
| | |
July 9,
2026 | |
| Underlying stock price | |
$ | 9.82 | |
| Exercise price | |
$ | 11.50 | |
| Volatility | |
| 5.00 | % |
| Remaining term (in years) | |
| 7.00 | |
| Risk-free rate | |
| 4.31 | % |
| Implied market adjustment | |
| 30.0 | % |
FREEDOM METALS ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENT
JULY 9, 2026
Note 9 — Segment Information
ASC Topic 280, “Segment Reporting,”
establishes standards for companies to report in their financial statement information about operating segments, products, services, geographic
areas, and major customers. Operating segments are defined as components of an enterprise 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 Financial 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 reportable
segment.
The CODM assesses performance for the single
segment and decides how to allocate resources. 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 the total assets, which include the following:
| | |
July 9,
2026 | |
| Cash | |
$ | 2,382,295 | |
| Cash held in Trust Account | |
$ | 275,000,000 | |
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.
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.
