Texas Ventures III plans $800M PlusAI merger
TVA III has proposed extending its October 24, 2026 business-combination deadline to July 24, 2027, subject to shareholder approval.
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Rhea-AI Filing Summary
Texas Ventures Acquisition III Corp (TVA) is registering up to 214,480,313 shares of the proposed post-combination company’s Class A common stock for its business combination with Plus Automation, Inc. (PlusAI). The maximum includes shares for issuance at closing and after closing through warrant exercises, Class B or Class C conversions, and earnout events.
TVA III would domesticate in Delaware, complete two mergers involving PlusAI and its wholly owned merger subsidiaries, and become PlusAI Holdings, Inc. PlusAI securityholders’ aggregate consideration has an equity value of $800,000,000, paid entirely in shares at $10.00 per share, plus a contingent right to up to 63,000,000 earnout shares in three 21,000,000-share tranches. The earnout depends on $15.00, $18.00 and $21.00 share-price targets during the five-year Earnout Period.
Separate private placements are expected to close after domestication and substantially concurrently with the business combination: $63,888,888 principal amount of convertible notes at a 10% original issue discount and $4,000,000 of Class A common stock, each with related warrants. TVA III shareholders are scheduled to vote October 19, 2026, and approval of all condition-precedent proposals is required. The combination deadline is October 24, 2026; an extension to July 24, 2027 is proposed.
Filing Explained
The filing projects PlusAI stockholders to hold 91.9% of voting power with no redemptions and 97.6% under maximum redemptions.
If the proposed combination closes, the filing estimates that PlusAI stockholders would own
In those same scenarios, PlusAI stockholders are projected to hold
Key Figures
Key Terms
Earnout Period financial
Earnout Triggering Event financial
Exchange Ratio financial
original issue discount financial
redemption rights regulatory
Domestication technical
FAQ
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What will PlusAI securityholders receive in the TVA merger?
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As filed with the Securities and Exchange Commission on October 9, 2026.
Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
(Exact name of registrant as specified in its charter)
For Co-Registrants, see “Table of Co-Registrants” on the following page.
(State or other jurisdiction of incorporation or organization) |
(Primary Standard Industrial Classification Code Number) |
(I.R.S. Employer Identification Number) |
Tel: (
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
Chief Executive Officer and Chief Financial Officer
c/o Texas Ventures Acquisition III Corp
Tel: (
(Name, address, including zip code, and telephone number, including area code, of agent for service)
Michael Nordtvedt Jeana Kim Remi Korenblit Wilson Sonsini Goodrich & Rosati, Professional Corporation 701 Fifth Avenue, Suite 5100 Seattle, WA 98104-7036 (206) 883-2500 |
Copies to: David W. Liu President and Chief Executive Officer Plus Automation, Inc. 2953 Bunker Hill Lane, Suite 305 Santa Clara, CA 95054 (408) 508-4758 |
Jeffrey C. Selman Curtis L. Mo Gina H. Lee DLA Piper LLP (US) 3203 Hanover Street, Suite 100 Palo Alto, CA 94304 (650) 833-2000 |
Approximate date of commencement of proposed sale of the securities to the public: As soon as practicable after this registration statement is declared effective and upon completion of the merger.
If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box. ☐
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer |
☐ |
Accelerated filer |
☐ |
☒ |
Smaller reporting company |
||
|
|
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 7(a)(2)(B) of the Securities Act.
If applicable, place an ☒ in the box to designate the appropriate rule provision relied upon in conducting this transaction:
Exchange Act Rule 13e-4(i) (Cross-Border Issuer Tender Offer) ☐
Exchange Act Rule 14d-1(d) (Cross-Border Third-Party Tender Offer) ☐
* Prior to the consummation of the Business Combination described herein, the registrant intends to effect a deregistration under Section 206 of the Companies Act (As Revised) of the Cayman Islands and a domestication under Section 388 of the Delaware General Corporation Law, pursuant to which the registrant’s jurisdiction of incorporation will be changed from the Cayman Islands to the State of Delaware. All securities being registered will be issued by Texas Ventures Acquisition III Corp (after its domestication as a corporation incorporated in the State of Delaware), the continuing entity following the Domestication, which will be renamed “PlusAI Holdings, Inc.”
The registrant and co-registrant hereby amend this registration statement on such date or dates as may be necessary to delay its effective date until the registrant and co-registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the registration statement shall become effective on such date as the U.S. Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.
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TABLE OF CO-REGISTRANTS
Exact Name of Co-Registrant as Specified in its Charter(1)(2) |
|
State or Other Jurisdiction of Incorporation or Organization |
|
Primary Standard Industrial Classification Code Number |
|
I.R.S. Employer Identification Number |
Plus Automation, Inc. |
|
Delaware |
|
7373 |
|
93-2913093 |
Plus Automation, Inc.
2953 Bunker Hill Lane, Suite 305
Santa Clara, CA 95054
Tel: (408) 508-4758
Bryant Park
Plus Automation, Inc.
2953 Bunker Hill Lane, Suite 305
Santa Clara, CA 95054
Tel: (408) 508-4758
Indicate by check mark whether the co-registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer |
☐ |
Accelerated filer |
☐ |
Non-accelerated filer |
☒ |
Smaller reporting company |
☒ |
|
|
Emerging growth company |
☒ |
If an emerging growth company, indicate by check mark if the co-registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐
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EXPLANATORY NOTE
This proxy statement/prospectus relates to an Agreement and Plan of Merger and Reorganization, dated as of September 2, 2026 (as may be amended, modified, supplemented or waived from time to time, the “Merger Agreement”), by and among TVA III, TVAC Merger Sub I, Inc., a Delaware corporation and direct, wholly owned subsidiary of TVA III (“Merger Sub I”), TVAC Merger Sub II, LLC, a Delaware limited liability company and a direct, wholly owned subsidiary of TVA III (“Merger Sub II”, and, together with Merger Sub I, “Merger Subs”) and PlusAI, a copy of which is attached to this proxy statement/prospectus as an annex hereto.
The Merger Agreement, among other things and subject to the terms and conditions contained therein, provides for (a) the transfer of TVA III by way of continuation out of the Cayman Islands and domestication as a corporation incorporated under the laws of the State of Delaware (the “Domestication”), and (b) following the Domestication, the merger of Merger Sub I with and into PlusAI, with PlusAI continuing as the surviving corporation and a wholly owned subsidiary of TVA III (“First Merger”), and immediately following the First Merger, the surviving corporation of the First Merger will merge with and into Merger Sub II, with Merger Sub II continuing as the surviving entity (the “Second Merger” and, collectively, the “Merger,” and, together with the Domestication and other transactions contemplated by the Merger Agreement and the related agreements, the “Transactions” or the “business combination”). Following the consummation of the business combination, TVA III will change its name to “PlusAI Holdings, Inc.” We refer to the new public entity following the consummation of the business combination as the “Post-Closing Company.”
This proxy statement/prospectus serves as:
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each issued and outstanding share of PlusAI common stock. See the section entitled “Proposal No. 1 — The Business Combination Proposal — General — Structure of the Transactions.”
The deadline by which TVA III must complete a business combination transaction is October 24, 2026. TVA III has scheduled an extraordinary general meeting to be held on October 19, 2026 for its shareholders to vote on, among other things, a proposal to amend the TVA III Articles to extend such deadline to July 24, 2027 (the “SPAC Extension”).
This proxy statement/prospectus covers up to an aggregate of 214,480,313 shares of Post-Closing Company Class A common stock, representing the estimated maximum number of shares to be issued to the existing securityholders of TVA III and PlusAI at the Closing or, following the Closing, upon the exercise of Post-Closing Company warrants (including assumed warrants), the conversion of shares of Post-Closing Company Class B common stock and Post-Closing Company Class C common stock and/or the issuance of any Earnout Shares upon an Earnout Triggering Event.
Interests of Sponsor and its Affiliates
On September 18, 2025, Yorkville Acquisition Sponsor II, LLC (the “Sponsor”) acquired from the initial sponsor of TVA III, TV Partners III, LLC (the “Prior Sponsor”) an aggregate of (a) 7,500,000 Class B ordinary shares of TVA III, par value $0.0001 per share (the “TVA III Class B Ordinary Shares”) and (b) 4,700,000 TVA III Private Placement Warrants (as defined below), for an aggregate purchase price of $7,400,000. See the section entitled “Certain Relationships and Related Person Transactions — TVA III Related Person Transactions.”
TVA III sold private placement warrants to the Prior Sponsor and the underwriters of the April 24, 2025 initial public offering of TVA III (the “TVA III IPO“) in a private placement that occurred simultaneously with the closing of the TVA III IPO. Each private placement warrant is exercisable to purchase one whole TVA III Class A Ordinary Share at a price of $11.50 per share (the “TVA III Private Placement Warrants”). The TVA III Private Placement Warrants will become exercisable 30 days after the completion of the initial business combination.
The Sponsor is restricted from transferring, assigning or selling either the TVA III Class B Ordinary Shares or the TVA III Private Placement Warrants (including the Class A ordinary shares of TVA III, par value $0.0001 per share (the “TVA III Class A Ordinary Shares”) issuable upon exercise of the Private Placement Warrants) that it holds prior to the consummation of TVA III’s initial business combination, and with respect to the Private Placement Warrants, subject to certain limited exceptions, until the date that is 30 days after the closing of TVA III’s initial business combination. Furthermore, if the business combination is consummated, each of the Sponsor, its affiliate, YA II PN, Ltd. (the “Sponsor Affiliate”), and any of their permitted transferees holding the shares of Class A common stock of TVA III, par value $0.0001 per share (the “TVA III Class A Common Stock”) into which the TVA III Class B Ordinary Shares will convert following the Domestication or the TVA III Private Placement Warrants has agreed to the Lockup (as defined herein). Additional stockholders of the Post-Closing Company will also be subject to the Lockup. See the section entitled “Proposal No. 1 — The Business Combination Proposal — Certain Agreements Related to the Business Combination — Amended and Restated Registration Rights Agreement.”
Between February 4, 2025 and February 27, 2025, Sponsor Affiliate purchased an aggregate of 1,050,000 TVA III Class A Ordinary Shares on the open market at prices between $10.4785 and $10.7993 per share.
Prior to or in connection with the completion of the initial business combination, there may be payment by the Company to the Sponsor, officers or directors, or TVA III’s or their affiliates, of a finder’s fee, advisory fee, consulting fee or success fee for any services they render in order to effectuate the completion of the initial business combination, which, if made prior to the completion of the initial business combination, will be paid from funds held outside the trust account.
The Sponsor, executive officers and directors, or any of their respective affiliates, are reimbursed for any out-of-pocket expenses incurred in connection with activities on TVA III’s behalf such as identifying potential target businesses and performing due diligence on suitable business combinations. TVA III’s audit committee reviews on a quarterly basis all payments that were made to the Sponsor, officers, directors or TVA III’s or their affiliates. Any such payments prior to an initial business combination are made from funds held outside the trust account.
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Subject to the terms of the Merger Agreement, there is no cap or ceiling on the reimbursement of out-of-pocket expenses incurred by such persons in connection with activities on TVA III’s behalf.
In addition, in order to fund working capital deficiencies or finance transaction costs in connection with an intended initial business combination, the Sponsor or an affiliate of the Sponsor or TVA III’s officers and directors or their respective affiliates may, but are not obligated to, loan TVA III funds as may be required. If TVA III completes an initial business combination, TVA III would repay such loaned amounts. In the event that the initial business combination does not close, TVA III may use a portion of the working capital held outside the trust account to repay such loaned amounts but no proceeds from the trust account would be used for such repayment. Amounts outstanding under such loans, up to $1,500,000, are convertible, at the Sponsor’s election, upon the consummation of the business combination, into units identical to the TVA III Public Units at a price of $10.00 per unit, rounded down to the nearest whole number. Prior to the completion of the initial business combination, TVA III does not expect to seek loans from parties other than the Sponsor or an affiliate of the Sponsor as TVA III does not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in the trust account. As of September 30, 2026 and December 31, 2025, TVA III had $250,000 and no borrowings, respectively, under such loans.
TVA III has agreed to indemnify the Sponsor and its members (present and former), managers and affiliates and their respective present and former officers and directors to the fullest extent permitted under applicable law from any claims made by TVA III or a third party in respect of any investment opportunities sourced by them or any liability arising with respect to their activities in connection with TVA III’s affairs, to the extent that such indemnification, hold harmless and exoneration obligations with respect to such matters are not expressly covered by a separate written agreement between TVA III and any such party. Such indemnity will provide that the indemnified parties cannot access the funds held in the trust account.
After the initial business combination, members of TVA III’s management team who remain with TVA III may be paid consulting, management or other fees from the combined company with any and all amounts being fully disclosed to TVA III’s shareholders, to the extent then known, in this proxy statement/prospectus or other proxy solicitation materials furnished to TVA III’s shareholders. It is unlikely the amount of such compensation is fully known at the time of distribution of this proxy statement/prospectus, or will be fully known at the time of a general meeting held to consider the initial business combination, as it will be up to the directors of the post-combination business to determine executive and director compensation.
Concurrently with the execution of the Merger Agreement, TVA III entered into the Sponsor Support Agreement with Yorkville Acquisition Sponsor II, LLC, a Florida limited liability company (the “Sponsor”), TVA III and PlusAI, together with Troy Rillo, Mark Angelo, Scott Glabe, Alan Garten and Lawrence Glick, each of whom is a member of TVA III’s board of directors and/or management team (the “Insiders”). The following summary of material provisions of the Sponsor Support Agreement is qualified by reference to the complete text of the Sponsor Support Agreement, a copy of which is attached to the accompanying proxy statement/prospectus as Exhibit C to Annex A. All shareholders are encouraged to read the Sponsor Support Agreement in its entirety for a more complete description of the terms and conditions of the Sponsor Support Agreement.
Pursuant to the terms of the Sponsor Support Agreement, the Sponsor agreed, among other things: (a) at the extraordinary general meeting to be present in person or by proxy and vote, or cause to be voted at such meeting, all shares of capital stock of TVA III held by the Sponsor (the “Sponsor Securities”) or held by Sponsor Affiliate (such shares, the “Sponsor Affiliate Securities”), entitled to vote thereon (i) in favor of the SPAC Stockholder Matters and (ii) in favor of any other matter reasonably necessary to the consummation of the transactions contemplated by the Merger Agreement and considered and voted upon at any extraordinary general meeting; (b) at the extraordinary general meeting to be present in person or by proxy and vote, or cause to be voted at such meeting, all Sponsor Securities and Sponsor Affiliate Securities entitled to vote thereon against (i) any business combination other than with PlusAI, its stockholders and their respective affiliates and representatives; (ii) any merger, consolidation, combination, sale of substantial assets, reorganization, recapitalization, dissolution, liquidation or winding up of TVA III; (iii) any change in the business, management or board of directors of TVA III; and (iv) certain other actions, proposals or agreements; and (c) if approval of the SPAC Extension is sought from TVA III’s shareholders, the Sponsor shall vote all of its TVA III Class B Ordinary Shares and any other shares acquired by the Sponsor in favor of any proposal approving such SPAC Extension. In addition, the Sponsor and the Insiders, automatically and without
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any further action by the Sponsor or TVA III, irrevocably (a) waive any adjustment to the conversion ratio set forth in the Existing SPAC Governing Document and any rights to other anti-dilution protections pursuant to the TVA III MAA, as adopted by special resolution on April 22, 2025, or otherwise, and, as a result, the shares of TVA III Class B Ordinary Shares shall convert into Post-Closing Company common stock (or such equivalent security) in connection with the Domestication and consummation of the Mergers on a one-for-one basis, and (b) agree not to assert or perfect any rights to adjustment or other anti-dilution protections, in each case, in connection with the Transactions. Furthermore, if all fees, costs and expenses of TVA III incurred prior to and through the Closing Date in connection with the Transactions (collectively, the “SPAC Transaction Expenses”), other than specified SPAC Transaction Expenses, exceed $7.5 million (the “Excess Amounts”), the Sponsor will, at its sole discretion, either (a) pay, or cause an affiliate of the Sponsor to pay, the Excess Amounts to TVA III or an account designated by TVA III in cash by wire transfer of immediately available funds or (b) forfeit such number of TVA III Class B Ordinary Shares or shares of TVA III Class A Ordinary Shares issued or issuable upon the conversion of such shares equal to ((1) the Excess Amounts minus (2) any cash amounts paid pursuant to clause (a)) divided by $10.00, subject to the limitation that the number of forfeited shares may not exceed the number of Founder Shares owned by the Sponsor as of the date of the Sponsor Support Agreement.
The Sponsor Support Agreement does not provide for vesting and forfeiture of any TVA III Founder Shares based on the amount of the Available Closing SPAC Cash or the achievement of certain stock price performance after the Closing.
Concurrently with the execution and delivery of the Merger Agreement, TVA III and PlusAI entered into subscription agreements with certain investors, pursuant to which TVA III agreed to issue and sell, in private placements to close following the Domestication and substantially concurrently with the Closing, (i) convertible promissory notes in an aggregate original principal amount of $63,888,888, issued at a 10% original issue discount and (ii) shares of Post-Closing Company Class A common stock for aggregate purchase price of $4,000,000, in each case together with related warrants to purchase Post-Closing Company Class A common stock. In connection with these private placements, the Sponsor Affiliate subscribed for the purchase of a convertible note in the principal amount of $27,777,777.78. See the section entitled “Proposal No. 1 —The Business Combination Proposal — Certain Agreements Related to the Business Combination.”
On August 27, 2026, TVA III and the Sponsor Affiliate entered into a Confirmation of an OTC Equity Prepaid Forward Transaction, dated as of August 27, 2026 (the “Forward Purchase Agreement”), pursuant to which TVA III agreed to pay to the Sponsor Affiliate a prepayment amount equal to the product of up to 1,050,000 TVA III Class A Ordinary Shares (the “FPA Shares”) multiplied by the applicable per-share redemption price (the “Prepayment Amount”). TVA III is expected to pay the Prepayment Amount one business day following the Closing, and the Forward Purchase Agreement matures 35 days after the Closing. See the section entitled “Proposal No. 1 —The Business Combination Proposal — Certain Agreements Related to the Business Combination.”
There may be actual or potential material conflicts of interest between or among (1) the Sponsor, TVA III’s officers and directors, PlusAI’s officers and directors and (2) unaffiliated security holders of TVA III. Such conflicts of interest may include a material conflict of interest arising in determining whether to proceed with the Business Combination, the compensation of TVA III’s directors and officers and the compensation of the Sponsor in connection with the business combination. See the section entitled “Proposal No. 1 —The Business Combination Proposal — Interests of Certain TVA III Persons in the Business Combination” and “Other Information Related to TVA III — Conflicts of Interest.” PlusAI’s directors and executive officers have interests in the Business Combination that are different from, or in addition to, those of the TVA III shareholders generally. See the section entitled “Proposal No. 1 —The Business Combination Proposal — Interests of Certain PlusAI Persons in the Business Combination”.
The following summarizes the pro forma shares of the Post-Closing Company common stock (as defined herein) issued and outstanding immediately after the business combination and Transactions (as defined herein) on an issued and outstanding basis, presented under the following redemption scenarios:
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No Redemption |
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25% Redemption |
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50% Redemption |
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Maximum Redemption |
|
||||||||||||||||||||||||||||||||||||
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Shares |
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% Outstanding |
|
|
% |
|
|
Shares |
|
|
% Outstanding |
|
|
% |
|
|
Shares |
|
|
% Outstanding |
|
|
% |
|
|
Shares |
|
|
% Outstanding |
|
|
% |
|
||||||||||||
TVA Public Stockholders (1) |
|
|
|
|
|
20.9 |
% |
|
|
6.1 |
% |
|
|
|
|
|
16.5 |
% |
|
|
4.6 |
% |
|
|
|
|
|
11.7 |
% |
|
|
3.1 |
% |
|
|
|
|
|
1.3 |
% |
|
|
0.3 |
% |
||||
Sponsor and affiliates (2) |
|
|
|
|
|
7.0 |
% |
|
|
2.0 |
% |
|
|
|
|
|
7.4 |
% |
|
|
2.1 |
% |
|
|
|
|
|
7.8 |
% |
|
|
2.1 |
% |
|
|
|
|
|
8.7 |
% |
|
|
2.1 |
% |
||||
PlusAI Stockholders (3) |
|
|
|
|
|
72.0 |
% |
|
|
91.9 |
% |
|
|
|
|
|
76.0 |
% |
|
|
93.3 |
% |
|
|
|
|
|
80.4 |
% |
|
|
94.8 |
% |
|
|
|
|
|
89.9 |
% |
|
|
97.6 |
% |
||||
CCM (4) |
|
|
|
|
|
0.1 |
% |
|
|
0.0 |
% |
|
|
|
|
|
0.1 |
% |
|
|
0.0 |
% |
|
|
|
|
|
0.1 |
% |
|
|
0.0 |
% |
|
|
|
|
|
0.1 |
% |
|
|
0.0 |
% |
||||
Total Common Stock Outstanding |
|
|
|
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
|
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
|
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
|
|
|
100.0 |
% |
|
|
100.0 |
% |
||||
The following table illustrates varying ownership levels in the Post-Closing Company immediately following the consummation of the business combination in the below redemption scenarios, but, in each case, includes the dilutive effect of the issuance of all Earnout Shares, TVA public and private warrants, the issuance of all shares of Post-Closing Company Class A common stock upon exercise of outstanding PlusAI options assumed by the Post-Closing Company, the issuance of all shares of Post-Closing Company Class A common stock upon the release of unvested PlusAI RSUs assumed by the Post-Closing Company before any reduction of shares withheld to settle tax obligations, the issuance of all shares of Post-Closing Company Class A common stock initially reserved for issuance under the Incentive Plan and the ESPP, the issuance of Post-Closing Company Class A common stock in the PIPE Investment (as defined herein), the issuance of Post-Closing Company Class A common stock upon conversion of the convertible promissory notes issued in the Convertible Notes (as defined herein), the issuance of Post-Closing Company Class A common stock upon exercise of the warrants issued in the PIPE Investment and the Convertible Notes (as defined herein), and the issuance of Post-Closing Company Class A common stock resulting from the issuance of PlusAI Class A common stock to certain PlusAI insiders in connection with the PIPE Investment and the Convertible Notes (as defined herein), but excludes any shares of Post-Closing Company Class A common stock issued or issuable pursuant to securities
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convertible into shares of Post-Closing Company Class A common stock that may be issued pursuant to one or more private placements or non-redemption arrangements that may be consummated prior to or substantially concurrently with the Closing except for the PIPE Investment and the Convertible Notes (each, an “Other PIPE Investment”) or any commercial agreements that may be consummated prior to or substantially concurrently with the Closing (each, a “Strategic Commercial Transaction”), except for the issuance of the TRATON Warrants.
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No Redemption Scenario |
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25% Redemption Scenario |
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50% Redemption Scenario |
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Maximum Redemption Scenario |
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||||
TVA public stockholders |
|
|
22,500,000 |
|
|
|
16,875,000 |
|
|
|
11,250,000 |
|
|
|
1,050,000 |
|
Sponsor |
|
|
7,500,000 |
|
|
|
7,500,000 |
|
|
|
7,500,000 |
|
|
|
7,500,000 |
|
PlusAI stockholders |
|
|
77,550,657 |
|
|
|
77,550,657 |
|
|
|
77,550,657 |
|
|
|
77,550,657 |
|
CCM |
|
|
100,000 |
|
|
|
100,000 |
|
|
|
100,000 |
|
|
|
100,000 |
|
Earnout shares |
|
|
63,000,000 |
|
|
|
63,000,000 |
|
|
|
63,000,000 |
|
|
|
63,000,000 |
|
TVA III Public warrants |
|
|
11,250,000 |
|
|
|
11,250,000 |
|
|
|
11,250,000 |
|
|
|
11,250,000 |
|
TVA III Private Placement warrants |
|
|
7,568,750 |
|
|
|
7,568,750 |
|
|
|
7,568,750 |
|
|
|
7,568,750 |
|
PlusAI warrants |
|
|
18,510,906 |
|
|
|
18,510,906 |
|
|
|
18,510,906 |
|
|
|
18,510,906 |
|
PIPE warrants |
|
|
5,724,068 |
|
|
|
5,724,068 |
|
|
|
5,724,068 |
|
|
|
5,724,068 |
|
Convertible notes |
|
|
6,404,367 |
|
|
|
6,404,367 |
|
|
|
6,404,367 |
|
|
|
6,404,367 |
|
PubCo Options |
|
|
2,389,994 |
|
|
|
2,389,994 |
|
|
|
2,389,994 |
|
|
|
2,389,994 |
|
PubCo RSUs |
|
|
1,978,916 |
|
|
|
1,978,916 |
|
|
|
1,978,916 |
|
|
|
1,978,916 |
|
Total |
|
|
224,477,658 |
|
|
|
218,852,658 |
|
|
|
213,227,658 |
|
|
|
203,027,658 |
|
See the sections entitled “Proposal No. 1 — The Business Combination Proposal — General — Impact of the Business Combination on Our Public Float” and “Unaudited Pro Forma Condensed Combined Financial Information” for more information.
After careful consideration, the TVA III Board has unanimously approved the Merger Agreement and the other proposals described in this proxy statement/prospectus. The TVA III Board has also determined that it is advisable to consummate the business combination and that the business combination is just, equitable and fair and in the best interests of TVA III and its shareholders.
Proposals to approve the Merger Agreement and the other matters discussed in this proxy statement/prospectus will be presented at the extraordinary general meeting in lieu of an annual meeting of shareholders of TVA III scheduled to be held on , 2026.
The TVA III public units, TVA III public shares and TVA III public warrants are each traded on Nasdaq under the symbols “TVACU”, “TVA” and “TVACW”, respectively. In connection with the Transactions, TVA III intends to apply to have Post-Closing Company Class A common stock listed on Nasdaq under the symbol “PXAI,” and the Post-Closing Company will change its name to “PlusAI Holdings, Inc.” It is a condition to the consummation of the business combination that the shares of Post-Closing Company Class A common stock to be issued (or reserved for issuance) in the Transactions have been listed on the Stock Exchange and shall be eligible for continued listing immediately following the closing, but there can be no assurance that such listing condition will be met. If such listing condition is not met, the business combination will not be consummated unless the listing condition is waived by the parties to the Merger Agreement.
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TVA III is an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) and has elected to comply with certain reduced public company reporting requirements.
This proxy statement/prospectus provides you with detailed information about the Transactions and other matters to be considered at the extraordinary general meeting in lieu of an annual meeting of TVA III’s shareholders. It also contains or references information about TVA III, PlusAI and the Post-Closing Company. We encourage you to carefully read this entire document, including the Annexes and other documents referred to herein, carefully and in their entirety. In particular, when you consider the recommendation regarding these proposals by the TVA III Board, you should keep in mind that the Sponsor and TVA III’s directors and officers have interests in the Business Combination that are different from or in addition to, or may conflict with, your interests as a shareholder. For instance, the Sponsor, TVA III’s officers and directors and/or their affiliates will benefit from the completion of a business combination and may be incentivized to complete an acquisition of a less favorable target company or on terms less favorable to shareholders rather than liquidating TVA III. See the section of this proxy statement/prospectus entitled “Proposal No. 1 —The Business Combination Proposal — Interests of Certain TVA III Persons in the Business Combination” and “Other Information Related to TVA III — Conflicts of Interest” for a further discussion of these considerations. You should also carefully consider the risk factors described in “Risk Factors” beginning on page 38 of this proxy statement/prospectus.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE MERITS OR FAIRNESS OF THE BUSINESS COMBINATION OR RELATED TRANSACTIONS OR PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROXY STATEMENT/PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
This proxy statement/prospectus is dated , 2026, and is first being mailed to TVA III shareholders on or about , 2026.
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TEXAS VENTURES ACQUISITION III CORP
1012 Springfield Avenue
Mountainside, New Jersey 07092
Dear Texas Ventures Acquisition III Corp Shareholders,
On behalf of Texas Ventures Acquisition III Corp, a Cayman Islands exempted company (“TVA III,” “we” or “our”) board of directors (the “TVA III Board”), we cordially invite you to an extraordinary general meeting in lieu of an annual general meeting (the “extraordinary general meeting”) of shareholders of TVA III, to be held via live webcast at a.m. Eastern Time, on , 2026. For purposes of Cayman Islands law and the TVA III MAA, the physical location of the extraordinary general meeting will be DLA Piper LLP (US) at 3203 Hanover Street, Suite 100, Palo Alto, California 94304. The extraordinary general meeting can be accessed by visiting https://www.cstproxy.com/texasventuresacquisitioniii/bc2026, where you will be able to listen to the meeting live, ask questions and vote during the meeting.
On September 2, 2026, TVA III entered into an Agreement and Plan of Merger and Reorganization (as may be further amended, modified, supplemented or waived from time to time, the “Merger Agreement”), by and among TVA III, TVAC Merger Sub I, Inc., a Delaware corporation and direct, wholly owned Subsidiary of TVA III (“Merger Sub I”), TVAC Merger Sub II, LLC, a Delaware limited liability company and a direct, wholly owned Subsidiary of TVA III (“Merger Sub II”, and, together with Merger Sub I, “Merger Subs”) and Plus Automation, Inc., a Delaware corporation (“PlusAI”), a copy of which is attached to the accompanying proxy statement/prospectus as Annex A, which, among other things, provides for (a) the transfer of TVA III by way of continuation out of the Cayman Islands and domestication as a corporation incorporated under the laws of the State of Delaware (the “Domestication”), and (b) following the Domestication, the merger of Merger Sub I with and into PlusAI, with PlusAI continuing as the surviving corporation, and immediately thereafter, such surviving corporation merging with and into Merger Sub II, with Merger Sub II continuing as the surviving entity and as a wholly owned subsidiary of TVA III (the “Merger,” and, together with the Domestication and other transactions contemplated by the Merger Agreement and the related agreements, the “Transactions” or the “business combination”). In connection with the business combination, TVA III will change its name to “PlusAI Holdings, Inc.” We refer to the new public entity following the consummation of the Transactions (the “Closing”) as the “Post-Closing Company.”
Subject to the terms and conditions of the Merger Agreement, the value of the aggregate consideration to be paid to PlusAI stockholders and holders of PlusAI SAFEs, vested PlusAI RSUs, vested PlusAI options and vested PlusAI warrants will be (1) $800,000,000 (the “Equity Value”), which consideration will be paid entirely in shares of common stock, par value $0.0001 per share, of the Post-Closing Company (“Post-Closing Company common stock”), in an amount equal to $10.00 per share, in addition to (2) the contingent right to receive up to an aggregate of 70,000,000 shares of Post-Closing Company common stock reduced by 7,000,000 shares allocated to the Post-Closing RSU Pool for future issuances resulting in 63,000,000 shares outstanding at the Closing, which will be issued to certain eligible holders of pre-Closing securities of PlusAI during the five-year period following the Closing (the “Earnout Period”), in three tranches consisting of 21,000,000 shares each (such shares, the “Earnout Shares”), upon the satisfaction of certain price targets, which will be based upon (a) the volume-weighted average sale price of one share of Post-Closing Company Class A common stock as quoted on the Capital Market tier of the Nasdaq Stock Market (“Nasdaq”) or the exchange on which the shares of Post-Closing Company Class A common stock are then traded, for any 20 trading days within any 180 consecutive trading day period within the Earnout Period or (b) if the Post-Closing Company undergoes a Change in Control, the price per share received by shareholders of the Post-Closing Company in such Change in Control transaction (or if consideration is not received by shareholders of the Post-Closing Company, the price per share implied by such transaction). At the Effective Time, each share of PlusAI common stock issued and outstanding immediately prior to the Closing (other than Excluded Shares and Dissenting Shares) will be automatically surrendered and exchanged for the right to receive a number of shares of Post-Closing Company common stock equal to the Exchange Ratio, which is based on the Per Share Equity Value (calculated in accordance with the Merger Agreement). Subject to the assumptions described herein, as of the date of this proxy statement/prospectus, we estimate that the Exchange Ratio will be approximately 0.0440 shares of Post-Closing Company common stock for each issued and outstanding share of PlusAI common stock. See the section entitled “Proposal No. 1 — The Business Combination Proposal — General — Structure of the Transactions.”
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At the extraordinary general meeting, TVA III shareholders will be asked to consider and vote upon:
The full text of the resolution to be passed is as follows:
“RESOLVED, as an ordinary resolution, that the business combination proposal (as such term is defined in TVA III's proxy statement/prospectus dated , 2026), be approved, ratified and confirmed in all respects.”
The full text of the resolution to be passed is as follows:
“RESOLVED, as a special resolution, that the domestication proposal (as such term is defined in TVA III’s proxy statement/prospectus dated , 2026), be approved, ratified and confirmed in all respects.”
The full text of the resolution to be passed is as follows:
“RESOLVED, as a special resolution, that the organizational documents proposal (as such terms are defined in TVA III’s proxy statement/prospectus dated , 2026) be approved and adopted.”
The full text of the resolution to be passed is as follows:
“RESOLVED, as an ordinary resolution, that on an advisory non-binding basis, the advisory organizational documents proposal (as such term is defined in TVA III’s proxy statement/prospectus dated , 2026), be approved and adopted.”
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The full text of the resolution to be passed is as follows:
“RESOLVED, as an ordinary resolution, that the stock issuance proposal (as such term is defined in TVA III’s proxy statement/prospectus dated , 2026) be approved in all respects.”
The full text of the resolution to be passed is as follows:
“RESOLVED, as an ordinary resolution, that the incentive plan proposal (as such term is defined in TVA III’s proxy statement/prospectus dated , 2026) be approved in all respects.”
The full text of the resolution to be passed is as follows:
“RESOLVED, as an ordinary resolution, that the ESPP proposal (as such term is defined in TVA III’s proxy statement/prospectus dated , 2026) be approved in all respects.”
The full text of the resolution to be passed is as follows:
“RESOLVED, as an ordinary resolution, on a non-binding advisory basis, that the director election proposal (as such term is defined in TVA III's proxy statement/prospectus dated , 2026) be approved in all respects.”
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The full text of the resolution to be passed is as follows:
“RESOLVED, as an ordinary resolution, that the adjournment proposal (as such term is defined in TVA III’s proxy statement/prospectus dated , 2026) be approved in all respects.”
Each of these proposals are more fully described in the accompanying proxy statement/prospectus, which we encourage you to read carefully and in its entirety before voting. Only TVA III shareholders of record at the close of business on , 2026 are entitled to notice of the extraordinary general meeting and to vote and have their votes counted at the extraordinary general meeting and any adjournments or postponements thereof.
After careful consideration, the TVA III Board has unanimously determined that the business combination proposal, domestication proposal, organizational documents proposal, advisory organizational documents proposal, stock issuance proposal, incentive plan proposal, ESPP proposal, director election proposal and, if necessary, the adjournment proposal are just, equitable and fair, and in the best interests of, TVA III and its shareholders and unanimously recommends that you vote or give instruction to vote “FOR” the business combination proposal, “FOR” the domestication proposal, “FOR” the organizational documents proposal, “FOR” the advisory organizational documents proposal, “FOR” the stock issuance proposal, “FOR” the incentive plan proposal, “FOR” the ESPP proposal, “FOR” each of the director nominees named in the director election proposal and, if presented, “FOR” the adjournment proposal. When you consider the TVA III Board’s recommendation of these proposals, you should keep in mind that our directors and officers, as well as Yorkville Acquisition Sponsor II, LLC, our sponsor (the “Sponsor”), have interests in the Transactions that are different from, or in addition to, the interests of TVA III shareholders generally. Please see the section entitled “Proposal No. 1 — The Business Combination Proposal — Interests of Certain TVA III Persons in the Business Combination” for additional information. The TVA III Board was aware of and considered these interests, among other matters, in evaluating and negotiating the Transactions and in recommending to TVA III shareholders that they vote in favor of the proposals presented at the extraordinary general meeting.
Consummation of the business combination is conditioned on the approval of each of the condition precedent proposals. If any of those proposals are not approved at the extraordinary general meeting (or any adjournment or postponement thereof), then unless certain conditions in the Merger Agreement are waived by the applicable parties to the Merger Agreement, the Merger Agreement may be terminated and the business combination may not be consummated.
All TVA III shareholders are cordially invited to attend the extraordinary general meeting, and we are providing the accompanying proxy statement/prospectus and proxy card in connection with the solicitation of proxies to be voted at the extraordinary general meeting (or any adjournment or postponement thereof). To ensure your representation at the extraordinary general meeting, however, you are urged to complete, sign, date and return the enclosed proxy card as soon as possible and no later than the time of the extraordinary general meeting or, if the meeting is adjourned, the time for holding such adjourned meeting. If your shares of TVA III’s shares are held in an account at a brokerage firm or bank, you must instruct your broker or bank on how to vote your shares or, if you wish to attend the extraordinary general meeting and vote, obtain a proxy card from your broker or bank.
TVA III Class A Ordinary Shares are currently listed on Nasdaq under the symbol “TVA”. In connection with the Transactions, TVA III intends to apply to have Post-Closing Company Class A common stock listed on Nasdaq under the symbol “PXAI,” and it will change its name to “PlusAI Holdings, Inc.”
Pursuant to the TVA III Articles, a holder of TVA III Class A Ordinary Shares sold in TVA III’s initial public offering (whether they were purchased in TVA III’s initial public offering or thereafter in the open market) (“TVA III public shares”) may demand that TVA III redeem such shares for cash if the business combination is consummated (“redemption rights”). Such redemption rights are not available to our Sponsor, directors or officers. Eligible holders of TVA III public shares will be entitled to receive cash for these shares only if they demand that TVA III redeem their TVA III public shares for cash no later than the second business day prior to the initially scheduled vote on the business combination proposal or such later date as our directors may determine (the “Redemption Deadline”) by delivering their shares and requesting in writing that TVA III redeem such TVA III public shares for cash to Continental Stock Transfer & Trust Company, TVA III’s transfer agent. If the business combination is not completed, the TVA III public shares will not be redeemed. If an eligible holder of TVA III public shares properly exercises their
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redemption rights and the business combination is consummated, TVA III will redeem such shares for cash in an amount equal to their pro rata portion of the funds in the trust account holding the proceeds from TVA III’s initial public offering (the “trust account”), calculated as of two business days prior to the consummation of the business combination net of taxes payable.
Notwithstanding the foregoing, a holder of TVA III public shares, together with any affiliate of such holder or any other person with whom such holder is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Exchange Act), will be restricted from seeking redemption with respect to more than 15% of the TVA III public shares. Accordingly, all TVA III public shares in excess of 15% held by a TVA III public shareholder, together with any affiliate of such holder or any other person with whom such holder is acting in concert or as a “group,” will not be redeemed without the prior consent of our directors. Such redemption rights are also not available to our Sponsor, officers or directors.
TVA III is an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) and has elected to comply with certain reduced public company reporting requirements.
TVA III (including as the Post-Closing Company) will remain an emerging growth company until the earlier of: (1) the last day of the fiscal year (a) following April 24, 2030, the fifth anniversary of the TVA III IPO, (b) in which TVA III has total annual gross revenue of at least $1,235,000,000, or (c) in which TVA III is deemed to be a large accelerated filer, which means the market value of TVA III Class A Ordinary Shares held by non-affiliates exceeds $700,000,000 as of the end of the prior June 30th; and (2) the date on which TVA III has issued more than $1,000,000,000 in nonconvertible debt during the prior three-year period. References herein to “emerging growth company” shall have the meaning associated with it in the JOBS Act.
The accompanying proxy statement/prospectus provides you with detailed information about the business combination and other matters to be considered at the extraordinary general meeting. We encourage you to carefully read the entire document, including the Annexes attached to the accompanying proxy statement/prospectus. You should also carefully consider the risk factors described in “Risk Factors” beginning on page 38.
Your vote is important regardless of the number of TVA III Ordinary Shares you own. Whether you plan to attend the extraordinary general meeting or not, please sign, date and return the enclosed proxy card as soon as possible, and no later than the time of the extraordinary general meeting (or any adjournment thereof) in the envelope provided. If your TVA III Class A Ordinary Shares are held in “street name” or are in a margin or similar account, you should contact your broker to ensure that votes related to the shares you beneficially own are properly counted.
The business combination described in the accompanying proxy statement/prospectus has not been approved or disapproved by the SEC or any state securities commission nor has the SEC or any state securities commission passed upon the merits or fairness of the business combination, or passed upon the accuracy or adequacy of the disclosure in the accompanying proxy statement/prospectus. Any representation to the contrary is a criminal offense.
Thank you for your participation. We look forward to your continued support.
By Order of the Board of Directors |
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|
|
|
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Mark Angelo |
|
Chairman of the Board of Directors |
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, 2026
IF YOU RETURN YOUR PROXY CARD WITHOUT AN INDICATION OF HOW YOU WISH TO VOTE, YOUR TVA III SHARES WILL BE VOTED AT THE DISCRETION OF YOUR NOMINATED PROXY.
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TO EXERCISE YOUR REDEMPTION RIGHTS, YOU MUST ELECT TO HAVE TVA III REDEEM YOUR TVA III PUBLIC SHARES FOR A PRO RATA PORTION OF THE FUNDS HELD IN THE TRUST ACCOUNT (NET OF TAXES PAYABLE) AND TENDER SUCH SHARES TO TVA III’S TRANSFER AGENT AT LEAST TWO BUSINESS DAYS PRIOR TO THE INITIALLY SCHEDULED VOTE AT THE EXTRAORDINARY GENERAL MEETING. YOU MAY TENDER YOUR TVA III PUBLIC SHARES BY EITHER DELIVERING YOUR SHARE CERTIFICATE TO THE TRANSFER AGENT OR BY DELIVERING SUCH SHARES ELECTRONICALLY USING THE DEPOSITORY TRUST COMPANY’S DWAC (DEPOSIT AND WITHDRAWAL AT CUSTODIAN) SYSTEM. IF THE BUSINESS COMBINATION IS NOT COMPLETED, THEN SUCH TVA III PUBLIC SHARES WILL NOT BE REDEEMED FOR CASH. IF YOU HOLD TVA III PUBLIC SHARES IN STREET NAME, YOU WILL NEED TO INSTRUCT THE ACCOUNT EXECUTIVE AT YOUR BANK OR BROKER TO WITHDRAW SUCH SHARES FROM YOUR ACCOUNT IN ORDER TO EXERCISE YOUR REDEMPTION RIGHTS. PLEASE SEE THE SECTION ENTITLED “EXTRAORDINARY GENERAL MEETING OF TVA III SHAREHOLDERS — REDEMPTION RIGHTS” FOR MORE SPECIFIC INSTRUCTIONS.
Immediately following the Redemption Deadline, a public shareholder that makes an election to redeem its TVA III public shares (an “Election”) may withdraw its Election with respect to all or a portion of its TVA III public shares for which it previously submitted an Election (an “Election Reversal”).
TO MAKE AN ELECTION REVERSAL WITH RESPECT TO YOUR TVA III PUBLIC SHARES, YOU MUST SUBMIT A WRITTEN REQUEST TO THE TRANSFER AGENT, AFTER P.M. EASTERN TIME, ON , 2026, THE DATE THAT IS TWO BUSINESS DAYS PRIOR TO THE SCHEDULED VOTE AT THE EXTRAORDINARY GENERAL MEETING, AND PRIOR TO THE SCHEDULED VOTE AT THE EXTRAORDINARY GENERAL MEETING, THAT THE ELECTION TO REDEEM YOUR TVA III PUBLIC SHARES BE REVERSED, INCLUDING THE LEGAL NAME, PHONE NUMBER, AND ADDRESS OF THE BENEFICIAL OWNER OF THE SHARES FOR WHICH REVERSAL IS REQUESTED AND THE NUMBER OR PERCENTAGE OF SHARES FOR WHICH REVERSAL IS REQUESTED. IF YOU HOLD THE SHARES IN STREET NAME, YOU WILL NEED TO INSTRUCT THE ACCOUNT EXECUTIVE AT YOUR BANK OR BROKER TO REQUEST REVERSAL OF THE ELECTION TO REDEEM AT THE TRANSFER AGENT.
The accompanying proxy statement/prospectus is dated , 2026 and is first being mailed to TVA III shareholders on or about , 2026.
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ADDITIONAL INFORMATION
No person is authorized to give any information or to make any representation with respect to the matters that this proxy statement/prospectus describes other than those contained in this proxy statement/prospectus, and, if given or made, the information or representation must not be relied upon as having been authorized by TVA III or PlusAI. This proxy statement/prospectus does not constitute an offer to sell or a solicitation of an offer to buy securities or a solicitation of a proxy in any jurisdiction where, or to any person to whom, it is unlawful to make such an offer or a solicitation. Neither the delivery of this proxy statement/prospectus nor any distribution of securities made under this proxy statement/prospectus will, under any circumstances, create an implication that there has been no change in the affairs of TVA III or PlusAI since the date of this proxy statement/prospectus or that any information contained herein is correct as of any time subsequent to such date.
The accompanying proxy statement/prospectus incorporates important information that is not included in or delivered with this proxy statement/prospectus. This information is available for you to review through the SEC’s website at www.sec.gov.
You may request copies of this proxy statement/prospectus or other information concerning TVA III, without charge, by written request directed to:
Texas Ventures Acquisition III Corp
1012 Springfield Avenue
Mountainside, New Jersey 07092
Attention: Troy Rillo, Chief Executive Officer and Chief Financial Officer
Email: Tvainfo@yorkvilleglobal.com
or:
Sodali & Co
333 Ludlow Street, 5th Floor, South Tower
Stamford, CT 06902
Telephone: (800) 662-5200
Banks and Brokers: (203) 658-9400
Email: TVA.info@investor.sodali.com
In order for you to receive timely delivery of the documents in advance of the extraordinary general meeting of TVA III to be held on , 2026, you must request the information no later than five business days prior to the date of the extraordinary general meeting.
TEXAS VENTURES ACQUISITION III CORP
1012 Springfield Avenue
Mountainside, New Jersey 07092
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NOTICE OF EXTRAORDINARY GENERAL MEETING OF SHAREHOLDERS
TO BE HELD ON , 2026
TO THE SHAREHOLDERS OF TEXAS VENTURES ACQUISITION III CORP
NOTICE IS HEREBY GIVEN that an extraordinary general meeting (the “extraordinary general meeting”) of shareholders of Texas Ventures Acquisition III Corp, a Cayman Islands exempted company (“TVA III,” “we” or “our”), will be held via live webcast at a.m. Eastern Time, on , 2026. The extraordinary general meeting can be accessed by visiting https://www.cstproxy.com/texasventuresacquisitioniii/bc2026, where you will be able to listen to the meeting live, ask questions and vote during the meeting. For purposes of Cayman Islands law and the TVA III MAA, the physical location of the extraordinary general meeting will be DLA Piper LLP (US) at 3203 Hanover Street, Suite 100, Palo Alto, California 94304.
On behalf of TVA III’s board of directors (the “TVA III Board”), you are cordially invited to attend the extraordinary general meeting, to conduct the following business items:
The full text of the resolution to be passed is as follows:
“RESOLVED, as an ordinary resolution, that the business combination proposal (as such term is defined in TVA III's proxy statement/prospectus dated , 2026), be approved, ratified and confirmed in all respects.”
The full text of the resolution to be passed is as follows:
“RESOLVED, as a special resolution, that the domestication proposal (as such term is defined in TVA III’s proxy statement/prospectus dated , 2026), be approved, ratified and confirmed in all respects.”
The full text of the resolution to be passed is as follows:
“RESOLVED, as a special resolution, that the organizational documents proposal (as such terms are defined in TVA III’s proxy statement/prospectus dated , 2026) be approved and adopted.”
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The full text of the resolution to be passed is as follows:
“RESOLVED, as an ordinary resolution, that on an advisory non-binding basis, the advisory organizational documents proposal (as such term is defined in TVA III’s proxy statement/prospectus dated , 2026), be approved and adopted.”
The full text of the resolution to be passed is as follows:
“RESOLVED, as an ordinary resolution, that the stock issuance proposal (as such term is defined in TVA III’s proxy statement/prospectus dated , 2026) be approved in all respects.”
The full text of the resolution to be passed is as follows:
“RESOLVED, as an ordinary resolution, that the incentive plan proposal (as such term is defined in TVA III’s proxy statement/prospectus dated , 2026) be approved in all respects.”
The full text of the resolution to be passed is as follows:
“RESOLVED, as an ordinary resolution, that the ESPP proposal (as such term is defined in TVA III’s proxy statement/prospectus dated , 2026) be approved in all respects.”
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The full text of the resolution to be passed is as follows:
“RESOLVED, as an ordinary resolution, on a non-binding advisory basis, that the director election proposal (as such term is defined in TVA III's proxy statement/prospectus dated , 2026) be approved in all respects.”
The full text of the resolution to be passed is as follows:
“RESOLVED, as an ordinary resolution, that the adjournment proposal (as such term is defined in TVA III’s proxy statement/prospectus dated , 2026) be approved in all respects.”
Each of these proposals and the business combination are more fully described in this proxy statement/prospectus, which we encourage you to read carefully and in its entirety before voting. Only TVA III shareholders of record at the close of business on , 2026 are entitled to notice of the extraordinary general meeting and to vote and have their votes counted at the extraordinary general meeting and any adjournments or postponements thereof.
After careful consideration, the TVA III Board has unanimously determined that the business combination proposal, domestication proposal, organizational documents proposal, advisory organizational documents proposal, stock issuance proposal, incentive plan proposal, ESPP proposal, director election proposal and, if necessary, the adjournment proposal are just, equitable and fair, and in the best interests of, TVA III and its shareholders and unanimously recommends that you vote or give instruction to vote “FOR” the business combination proposal, “FOR” the domestication proposal, “FOR” the organizational documents proposal, “FOR” the advisory organizational documents proposal, “FOR” the stock issuance proposal, “FOR” the incentive plan proposal, “FOR” the ESPP proposal, “FOR” each of the director nominees named in the director election proposal and, if presented, “FOR” the adjournment proposal. When you consider the TVA III Board’s recommendation of these proposals, you should keep in mind that our directors and officers, as well as Yorkville Acquisition Sponsor II, LLC, our sponsor (the “Sponsor”), have interests in the Transactions that are different from, or in addition to, the interests of TVA III shareholders generally. Please see the section entitled “Proposal No. 1 — The Business Combination Proposal — Interests of Certain TVA III Persons in the Business Combination” for additional information. The TVA III Board was aware of and considered these interests, among other matters, in evaluating and negotiating the Transactions and in recommending to TVA III shareholders that they vote in favor of the proposals presented at the extraordinary general meeting.
Consummation of the business combination is conditioned on the approval of each of the other condition precedent proposals. If any of those proposals are not approved at the extraordinary general meeting (or any adjournment or postponement thereof), then unless certain conditions in the Merger Agreement are waived by the applicable parties to the Merger Agreement, the Merger Agreement may be terminated and the business combination may not be consummated.
Pursuant to the TVA III Articles, a holder of TVA III Class A Ordinary Shares sold in the TVA III IPO (whether they were purchased in the TVA III IPO or thereafter in the open market) (“TVA III public shares”) may demand that TVA III redeem such shares for cash if the business combination is consummated (“redemption rights”). Such redemption rights are not available to our Sponsor, directors or officers, or their affiliates, including the Sponsor Affiliate. Eligible holders of TVA III public shares will be entitled to receive cash for these shares only if they demand that TVA III redeem their TVA III public shares for cash no later than the second business day prior to the initially scheduled vote on the business combination proposal or such later date as our directors may determine (the “Redemption Deadline”) by delivering their shares and requesting in writing that TVA III redeem such TVA III public shares for cash to Continental Stock Transfer & Trust Company, TVA III’s transfer agent. If the business combination is not completed, the TVA III public shares will not be redeemed. If an eligible holder of TVA III public shares properly exercises their redemption rights and the business combination is consummated, TVA III will redeem such shares for cash in an amount equal to their pro rata portion of the funds in the trust account holding the proceeds from
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TVA III’s initial public offering (the “trust account”), calculated as of two business days prior to the consummation of the business combination and net of taxes payable.
Notwithstanding the foregoing, a holder of TVA III public shares, together with any affiliate of such holder or any other person with whom such holder is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Exchange Act), will be restricted from seeking redemption with respect to more than 15% of the TVA III public shares. Accordingly, all TVA III public shares in excess of 15% held by a TVA III public shareholder, together with any affiliate of such holder or any other person with whom such holder is acting in concert or as a “group,” will not be redeemed without the prior consent of our directors. Such redemption rights are also not available to our Sponsor, officers or directors.
All TVA III shareholders are cordially invited to attend the extraordinary general meeting and we are providing this proxy statement/prospectus and proxy card in connection with the solicitation of proxies to be voted at the extraordinary general meeting (or any adjournment or postponement thereof). To ensure your representation at the extraordinary general meeting, however, you are urged to complete, sign, date and return the enclosed proxy card as soon as possible and no later than the time of the extraordinary general meeting or, if the meeting is adjourned, the time for holding such adjourned meeting. If your TVA III Ordinary Shares are held in an account at a brokerage firm or bank, you must instruct your broker or bank on how to vote your shares or, if you wish to attend the extraordinary general meeting and vote, obtain a proxy card from your broker or bank.
Your vote is important regardless of the number of TVA III Ordinary Shares you own. Whether you plan to attend the extraordinary general meeting or not, please sign, date and return the enclosed proxy card as soon as possible, and no later than the time of the extraordinary general meeting or, if the meeting is adjourned, the time for holding such adjourned meeting, in the envelope provided. If your TVA III Ordinary Shares are held in “street name” or are in a margin or similar account, you should contact your broker to ensure that votes related to the shares you beneficially own are properly counted.
Thank you for your participation. We look forward to your continued support.
By Order of the Board of Directors |
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Mark Angelo |
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Chairman of the Board of Directors |
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, 2026
IF YOU RETURN YOUR PROXY CARD WITHOUT AN INDICATION OF HOW YOU WISH TO VOTE, YOUR SHARES OF TVA III PUBLIC SHARES WILL BE VOTED AT THE DISCRETION OF YOUR PROXY.
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TO EXERCISE YOUR REDEMPTION RIGHTS, YOU MUST ELECT TO HAVE TVA III REDEEM YOUR TVA III PUBLIC SHARES FOR A PRO RATA PORTION OF THE FUNDS HELD IN THE TRUST ACCOUNT (NET OF TAXES PAYABLE) AND TENDER SUCH SHARES TO TVA III’S TRANSFER AGENT AT LEAST TWO BUSINESS DAYS PRIOR TO THE INITIALLY SCHEDULED VOTE AT THE EXTRAORDINARY GENERAL MEETING. YOU MAY TENDER YOUR TVA III PUBLIC SHARES BY EITHER DELIVERING YOUR SHARE CERTIFICATE TO THE TRANSFER AGENT OR BY DELIVERING SUCH SHARES ELECTRONICALLY USING THE DEPOSITORY TRUST COMPANY’S DWAC (DEPOSIT AND WITHDRAWAL AT CUSTODIAN) SYSTEM. IF THE BUSINESS COMBINATION IS NOT COMPLETED, THEN SUCH TVA III PUBLIC SHARES WILL NOT BE REDEEMED FOR CASH. IF YOU HOLD TVA III PUBLIC SHARES IN STREET NAME, YOU WILL NEED TO INSTRUCT THE ACCOUNT EXECUTIVE AT YOUR BANK OR BROKER TO WITHDRAW SUCH SHARES FROM YOUR ACCOUNT IN ORDER TO EXERCISE YOUR REDEMPTION RIGHTS. PLEASE SEE THE SECTION ENTITLED “EXTRAORDINARY GENERAL MEETING OF TVA III SHAREHOLDERS — REDEMPTION RIGHTS” FOR MORE SPECIFIC INSTRUCTIONS.
Immediately following the Redemption Deadline, a public shareholder that makes an election to redeem its TVA III public shares (an “Election”) may withdraw its Election with respect to all or a portion of its TVA III public shares for which it previously submitted an Election (an “Election Reversal”).
TO MAKE AN ELECTION REVERSAL WITH RESPECT TO YOUR TVA III PUBLIC SHARES, YOU MUST SUBMIT A WRITTEN REQUEST TO THE TRANSFER AGENT, AFTER P.M. EASTERN TIME, ON , 2026, THE DATE THAT IS TWO BUSINESS DAYS PRIOR TO THE SCHEDULED VOTE AT THE EXTRAORDINARY GENERAL MEETING, AND PRIOR TO THE SCHEDULED VOTE AT THE EXTRAORDINARY GENERAL MEETING, THAT THE ELECTION TO REDEEM YOUR TVA III PUBLIC SHARES BE REVERSED, INCLUDING THE LEGAL NAME, PHONE NUMBER, AND ADDRESS OF THE BENEFICIAL OWNER OF THE SHARES FOR WHICH REVERSAL IS REQUESTED AND THE NUMBER OR PERCENTAGE OF SHARES FOR WHICH REVERSAL IS REQUESTED. IF YOU HOLD THE SHARES IN STREET NAME, YOU WILL NEED TO INSTRUCT THE ACCOUNT EXECUTIVE AT YOUR BANK OR BROKER TO REQUEST REVERSAL OF THE ELECTION TO REDEEM AT THE TRANSFER AGENT.
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TABLE OF CONTENTS
FREQUENTLY USED TERMS |
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iii |
SUMMARY OF THE MATERIAL TERMS OF THE TRANSACTIONS |
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xiv |
QUESTIONS AND ANSWERS ABOUT THE BUSINESS COMBINATION |
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xviii |
SUMMARY OF THE PROXY STATEMENT/PROSPECTUS |
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1 |
SUMMARY FINANCIAL DATA |
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31 |
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS |
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34 |
MARKET AND INDUSTRY DATA |
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37 |
RISK FACTORS |
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38 |
EXTRAORDINARY GENERAL MEETING OF TVA III |
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110 |
PROPOSAL NO. 1 — THE BUSINESS COMBINATION PROPOSAL |
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118 |
Material U.S. Federal Income Tax Consequences of the Business Combination to TVA III Shareholders |
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169 |
MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS OF THE MERGER |
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187 |
Proposal No. 2 — The domestication proposal |
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192 |
PROPOSAL NO. 3 — THE ORGANIZATIONAL DOCUMENTS PROPOSAL |
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201 |
PROPOSAL NO. 4 — THE Advisory organizational documents proposal |
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203 |
proposal no. 5 — the stock issuance proposal |
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207 |
PROPOSAL NO. 6 — THE INCENTIVE PLAN PROPOSAL |
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210 |
PROPOSAL NO. 7 — THE ESPP PROPOSAL |
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221 |
PROPOSAL NO. 8 — THE DIRECTOR ELECTION PROPOSAL |
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227 |
PROPOSAL NO. 9 — THE ADJOURNMENT PROPOSAL |
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230 |
OTHER INFORMATION RELATED TO TVA III |
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231 |
TVA III’S MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
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247 |
INFORMATION ABOUT PLUS AUTOMATION, INC. |
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252 |
PLUSAI’S MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
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275 |
EXECUTIVE COMPENSATION |
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293 |
BOARD OF DIRECTORS AND MANAGEMENT AFTER THE BUSINESS COMBINATION |
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303 |
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION |
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311 |
DILUTION |
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336 |
DESCRIPTION OF SECURITIES |
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339 |
COMPARISON OF SHAREHOLDER RIGHTS |
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358 |
BENEFICIAL OWNERSHIP OF SECURITIES |
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368 |
CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS |
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373 |
SECURITIES ACT RESTRICTIONS ON RESALE OF TVA III’S SECURITIES |
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379 |
SUBMISSION OF SHAREHOLDER PROPOSALS |
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380 |
FUTURE stockholder PROPOSALS |
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381 |
OTHER ShAREHOLDER COMMUNICATIONS |
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382 |
LEGAL MATTERS |
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383 |
EXPERTS |
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384 |
DELIVERY OF DOCUMENTS TO SHAREHOLDERS |
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385 |
Enforceability of civil liability |
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386 |
WHERE YOU CAN FIND MORE INFORMATION |
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387 |
INDEX TO TVA III FINANCIAL STATEMENTS |
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F-1 |
INDEX TO PLUSAI CONSOLIDATED FINANCIAL STATEMENTS |
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F-46 |
PART II INFORMATION NOT REQUIRED IN PROSPECTUS |
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II-1 |
Exhibit Index |
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II-4 |
SIGNATURES |
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II-7 |
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ANNEXES |
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ANNEX A — MERGER AGREEMENT |
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A-1 |
ANNEX B — FORM OF PROPOSED CERTIFICATE OF INCORPORATION |
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B-1 |
ANNEX C — FORM OF PROPOSED BYLAWS |
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C-1 |
ANNEX D — FORM OF INCENTIVE PLAN |
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D-1 |
ANNEX E — FORM OF ESPP |
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E-1 |
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FREQUENTLY USED TERMS
Unless otherwise stated in this proxy statement/prospectus or the context otherwise requires, references to:
“2017 Plan” are to the 2017 Share Plan of PlusAI, duly adopted by PlusAI Corp as approved by the Board of Directors of PlusAI Corp in 2017 and assumed by PlusAI in connection with the Restructuring.
“2021 Plan” are to the 2021 Share Incentive Plan of PlusAI, duly adopted by PlusAI as approved by the PlusAI Board in 2021.
“25% Redemption Scenario” or “25% Redemptions” are to the scenario that assumes 25% of TVA III Public Shareholders exercise their redemption rights.
“50% Redemption Scenario” or “50% Redemptions” are to the scenario that assumes 50% of TVA III Public Shareholders exercise their redemption rights.
“A&R Registration Rights Agreement” are to the Amended and Restated Registration Rights Agreement, to be effective as of the Closing Date, by and among the Post-Closing Company, certain TVA III shareholders and certain PlusAI stockholders.
“Available Closing SPAC Cash” are to all amounts in the trust account (after reduction for the aggregate amount of payments required to be made in connection with any valid TVA III Public Shareholder redemptions of TVA III public shares), plus the gross proceeds actually received by TVA III from the Convertible Notes and the PIPE Investment, calculated before payment of any transaction expenses.
“business combination” are to the Merger, together with the other transactions contemplated by the Merger Agreement. The “business combination” will constitute an initial business combination under the terms of the TVA III MAA.
“CCM” are to Cohen & Company Securities, LLC, acting through its Cohen & Company Capital Markets division.
“Change in Control” are to (1) a purchase, sale, exchange, business combination or other transaction (including a merger or consolidation of the Post-Closing Company with or into any other corporation or other entity) in which the equity securities of the Post-Closing Company, its successor, or the surviving entity of such business combination or other transaction are not registered under the Exchange Act or listed or quoted for trading on a national securities exchange, (2) a sale, lease, exchange or other transfer (including a merger) in one transaction or a series of related transactions of assets representing 50% or more of the value of the Post-Closing Company’s assets (including other subsidiaries of the Post-Closing Company) to a third party that is not an affiliate of the Sponsor (or a group of third parties that are not affiliates of the Sponsor), (3) the transfer to or acquisition by (whether by tender offer, merger, consolidation, division or other similar transaction), in one transaction or a series of related transactions, a person or entity or group of affiliated persons or entities (other than an underwriter pursuant to an offering), of the Post-Closing Company’s voting securities if, after such transfer or acquisition, such person, entity or group of affiliated persons or entities would beneficially own (as defined in Rule 13d-3 promulgated under the Exchange Act) more than 50% of the outstanding voting securities of the Post-Closing Company (it being understood that, for the purposes of this clause (4), a bona fide equity financing shall not be considered a Change in Control) or (5) a merger, consolidation or other business combination with or involving the Post-Closing Company (or any subsidiary or subsidiaries that alone or together represent 50% or more of the value of the Post-Closing Company’s assets) that results in the stockholders of the Post-Closing Company immediately before the consummation of such transaction or series of related transactions holding, directly or indirectly, less than 50% of the voting power of the Post-Closing Company (or such subsidiary or subsidiaries) or of any successor or surviving entity thereof or of any acquiring entity (or parent thereof), as applicable, immediately following the consummation of such transaction or series of related transactions.
“Closing” are to the closing of the business combination.
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“Closing Date” are to the date the Closing occurs.
“Code” are to the U.S. Internal Revenue Code of 1986, as amended.
“Company Voting and Support Agreements” or “PlusAI Voting and Support Agreements” are to those certain Voting and Support Agreements by and among TVA III, PlusAI and certain PlusAI stockholders (as may be amended, modified, supplemented or waived from time to time).
“Companies Act” are to the Companies Act (As Revised) of the Cayman Islands.
“completion window” are to the period following the completion of the TVA III IPO at the end of which, if TVA III has not completed an initial business combination, it will redeem 100% of the TVA III public shares at a per share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (net of taxes payable and less up to $100,000 of such accrued interest to pay dissolution expenses), divided by the number of then outstanding TVA III public shares, subject to applicable law and certain conditions. The completion window ends on October 24, 2026, subject to extension to July 24, 2027, upon approval by TVA III’s shareholders of the SPAC Extension.
“condition precedent proposal” are to, collectively, the business combination proposal, the domestication proposal, the organizational documents proposal, the stock issuance proposal, the incentive plan proposal, the ESPP proposal and the director election proposal.
“Conversion” are to the conversion immediately prior to the Closing of (1) all shares of PlusAI preferred stock into shares of PlusAI common stock in accordance with the terms of PlusAI’s current certificate of incorporation and (2) all PlusAI SAFEs into shares of PlusAI common stock in accordance with the terms thereof, in each case pursuant to the terms of the Merger Agreement.
“Court” are to the Delaware Court of Chancery.
“DGCL” are to the Delaware General Corporation Law, as amended.
“Dissenting Shares” are to the shares of PlusAI capital stock that are issued and outstanding immediately prior to the Effective Time and that are held by stockholders (including beneficial owners) that neither voted in favor of the Merger nor consented thereto in writing and that have demanded properly in writing appraisal or dissenters’ rights for such shares of PlusAI capital stock in accordance with the DGCL or who shall have validly exercised a redemption right for such shares of PlusAI capital stock under PlusAI’s current certificate of incorporation.
“Domestication” are to the transfer of TVA III by way of continuation out of the Cayman Islands and domestication as a corporation incorporated under the laws of the State of Delaware. The term “Domestication” includes all matters and necessary or ancillary changes in order to effect such domestication, including the adoption of the Proposed Certificate of Incorporation (a form of which is attached to this proxy statement/prospectus as Annex B) consistent with the DGCL and changing the name of the registered agent and the address of the registered office of TVA III.
“domestication proposal” are to the proposal to be considered at the extraordinary general meeting to approve by special resolution the Domestication.
“Earnout Period” are to the time period commencing on the Closing Date and ending on the earlier of (1) the five-year anniversary of the Closing Date and (2) a Change in Control.
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“Earnout Shares” are to up to an aggregate of 70,000,000 shares of Post-Closing Company common stock reduced by 7,000,000 shares allocated to the Post-Closing RSU Pool for future issuances resulting in 63,000,000 shares outstanding at the Closing that will be issued to Eligible PlusAI Equityholders upon the occurrence of an Earnout Triggering Event during the Earnout Period.
“Earnout Triggering Event I” are to the earliest of the following to occur during the Earnout Period: (1) the date on which the VWAP of one share of Post-Closing Company Class A common stock is greater than or equal to $15.00 per share for 20 trading days within any 180 consecutive trading day period or (2) a Change in Control of the Post-Closing Company pursuant to which stockholders of Post-Closing Company Class A common stock have the right to receive consideration implying a price per share greater than or equal to $15.00 or, in the case of a Change in Control where the holders of Post-Closing Company Class A common stock do not receive consideration, the price per share of Post-Closing Company Class A common stock implied by such transaction (as determined in good faith by the board of directors of the Post-Closing Company) is greater than or equal to $15.00.
“Earnout Triggering Event II” are to the earliest of the following to occur during the Earnout Period: (1) the date on which the VWAP of one share of Post-Closing Company Class A common stock is greater than or equal to $18.00 per share for 20 trading days within any 180 consecutive trading day period or (2) a Change in Control of the Post-Closing Company pursuant to which stockholders of Post-Closing Company Class A common stock have the right to receive consideration implying a price per share greater than or equal to $18.00 or, in the case of a Change in Control where the holders of Post-Closing Company Class A common stock do not receive consideration, the price per share of Post-Closing Company Class A common stock implied by such transaction (as determined in good faith by the board of directors of the Post-Closing Company) is greater than or equal to $18.00.
“Earnout Triggering Event III” are to the earliest of the following to occur during the Earnout Period: (1) the date on which the closing VWAP of one share of Post-Closing Company Class A common stock is greater than or equal to $21.00 per share for 20 trading days within any 180 consecutive trading day period or (2) a Change in Control of the Post-Closing Company pursuant to which stockholders of Post-Closing Company Class A common stock have the right to receive consideration implying a price per share greater than or equal to $21.00 or, in the case of a Change in Control where the holders of Post-Closing Company Class A common stock do not receive consideration, the price per share of Post-Closing Company Class A common stock implied by such transaction (as determined in good faith by the board of directors of the Post-Closing Company) is greater than or equal to $21.00.
“Earnout Triggering Events” are to Earnout Triggering Event I, Earnout Triggering Event II and Earnout Triggering Event III, collectively.
“Effective Time” are to the date and time that the merger of Merger Sub I with and into PlusAI becomes effective pursuant to the terms of the Merger Agreement.
“Eligible PlusAI Equityholder” are to all persons that hold one or more shares of PlusAI common stock as of immediately prior to the Effective Time (after giving effect to the Conversion).
“Equity Value” are to $800,000,000.
“ESPP” are to the proposed PlusAI Holdings, Inc. 2026 Employee Stock Purchase Plan, a copy of which is attached to this proxy statement/prospectus as Annex E.
“Exchange Act” are to the Securities Exchange Act of 1934, as amended.
“Exchange Ratio” are to the quotient, rounded to the nearest thousandth (0.001), obtained by dividing (1) the Per Share Equity Value by (2) $10.00.
“Excluded Shares” are to the shares of PlusAI capital stock held in PlusAI’s treasury or owned by TVA III, Merger Sub I or PlusAI immediately prior to the Effective Time.
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“Existing Registration Rights Agreement” are to the Registration Rights Agreement, dated April 22, 2025, between TVA III and certain other security holders named therein, in connection with the TVA III IPO.
“extraordinary general meeting” are to the extraordinary general meeting of shareholders of TVA III, to be held via live webcast at a.m. Eastern Time, on , 2026. For purposes of Cayman Islands law and the TVA III MAA, the physical location of the extraordinary general meeting will be DLA Piper LLP (US) at 3203 Hanover Street, Suite 100, Palo Alto, California 94304.
“GAAP” are to accounting principles generally accepted in the United States of America.
“HSR Act” are to the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.
“Incentive Plan” are to the proposed PlusAI Holdings Inc. 2026 Equity Incentive Plan, a copy of which is attached to this proxy statement/prospectus as Annex D.
“Insiders” are to Troy Rillo, Mark Angelo, Scott Glabe, Alan Garten and Lawrence Glick.
“IRS” are to the Internal Revenue Service.
“Lockup Release Trigger Event I” means the VWAP of the Post-Closing Company Class A common stock on the Nasdaq, or such other securities exchange where Post-Closing Company Class A common stock is primarily listed or quoted, equals or exceeds $12.50 for any 20 trading days within any 180 consecutive trading day period.
“Lockup Release Trigger Event II” means the VWAP of the Post-Closing Company Class A common stock on the Nasdaq, or such other securities exchange where Post-Closing Company Class A common stock is primarily listed or quoted, equals or exceeds $15.00 for 20 trading days within any 180 consecutive trading day period.
“Lockup Release Triggering Events” are to Lockup Release Trigger Event I and Lockup Release Trigger Event II, collectively.
“Maximum Redemption Scenario” or “Maximum Redemptions” are to the scenario that illustrates the largest number of redemptions by TVA III Public Shareholders that can occur while satisfying the TVA III Net Tangible Asset closing condition under the Merger Agreement.
“Merger” are to the merger of Merger Sub I with and into PlusAI, with PlusAI continuing as the surviving corporation and, immediately thereafter, the merger of the surviving company with and into Merger Sub II, with Merger Sub II continuing as the surviving entity and a wholly owned subsidiary of TVA III, collectively.
“Merger Agreement” are to that certain Agreement and Plan of Merger and Reorganization, dated as of September 2, 2026, by and among TVA III, PlusAI, Merger Sub I, and Merger Sub II, as the same may be further amended, modified, supplemented or waived from time to time.
“Merger Sub I” are to TVAC Merger Sub I, Inc., a Delaware corporation and a direct, wholly owned subsidiary of TVA III.
“Merger Sub II” are to TVAC Merger Sub II, LLC, a Delaware limited liability company and a direct, wholly owned subsidiary of TVA III.
“Minimum Proceeds Side Letter“ are to the side letter agreement entered into by and among PlusAI and certain investors, in connection with the minimum cash closing condition for the business combination as set forth in the Merger Agreement.
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“No Redemption Scenario” or “No Redemptions” are to the scenario that illustrates the consummation of the Transactions with no TVA III Public Shareholders exercising their redemption rights.
“Nasdaq” are to the Nasdaq Stock Market.
“New Insider Letter“ are to the side letter agreement entered into by and among TVA III, the Sponsor, the Insiders and certain former officers and directors of TVA III, in connection with the Purchase Agreement.
“Ordinary Resolution” are to a resolution (a) passed by a simple majority of such holders of outstanding TVA III Ordinary Shares as, being entitled to do so, vote in person or, where proxies are allowed, by proxy at a general meeting of the TVA III and where a poll is taken regard shall be had in computing a majority to the number of votes to which each holder of outstanding TVA III Ordinary Shares is entitled; or (b) approved in writing by all of the holders of outstanding TVA III Ordinary Shares entitled to vote at a general meeting of the TVA III (or such lower threshold as may be allowed under the Companies Act from time to time) in one or more instruments each signed by one or more of such holders of outstanding TVA III Ordinary Shares and the effective date of the resolution so adopted shall be the date on which the instrument, or the last of such instruments, if more than one, is executed.
“Penny Options” are to common stock options granted to third parties with the exercise price equal to the par value of the underlying share and fully vested at issuance.
“Per Share Equity Value” are to the quotient, rounded to the nearest $0.01, obtained by dividing (1) the sum of (a) the Equity Value plus (b) the aggregate exercise price of all PlusAI options to the extent outstanding and vested as of immediately prior to the Effective Time by (2) the PlusAI Total Shares.
“PIPE Investment” are to the sale by TVA III of shares of Post-Closing Company Class A common stock and warrants to purchase shares of Post-Closing Company Class A common stock (the “PIPE Warrants”) in a private placement to close substantially concurrently with the closing of the Mergers, pursuant to the PIPE Subscription Agreements entered into with certain accredited investors and qualified institutional buyers (the “PIPE Investors”), for an aggregate purchase price of approximately $4.0 million.
“PIPE Subscription Agreements” are to those Subscription Agreements between the Post-Closing Company, PlusAI, and the other parties thereto dated on or about September 2, 2026.
“PlusAI” are to Plus Automation, Inc., a Delaware corporation, prior to the Effective Time (or, as expressly stated in this proxy statement/prospectus or the context otherwise requires, the Post-Closing Company).
“PlusAI Board” are to the board of directors of PlusAI.
“PlusAI capital stock” are to PlusAI common stock and PlusAI preferred stock.
“PlusAI Class A common stock” are to PlusAI’s Class A common stock, par value $0.0001 per share.
“PlusAI Class B common stock” are to PlusAI’s Class B common stock, par value $0.0001 per share.
“PlusAI common stock” are to PlusAI’s Class A common stock and Class B common stock.
“PlusAI LV preferred stock” are to PlusAI Series A-3-X preferred stock, PlusAI Series A-4-X preferred stock and PlusAI Series B-X preferred stock, collectively and shares of PlusAI common stock resulting from the conversion thereof.
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“PlusAI options” are to all issued and outstanding options to purchase or otherwise acquire shares of PlusAI common stock (whether or not vested) held by any person, including PlusAI stock options granted under the 2017 Plan and 2021 Plan.
“PlusAI preferred stock” are to, collectively, PlusAI Series A-1 preferred stock, PlusAI Series A-2 preferred stock, PlusAI Series A-3-X preferred stock, PlusAI Series A-4 preferred stock, PlusAI Series A-4-X preferred stock, PlusAI Series B preferred stock, PlusAI Series B-X preferred stock, and PlusAI Series C preferred stock.
“PlusAI stockholder” are to any holder of PlusAI stock, which includes holders of PlusAI preferred stock, PlusAI common stock and PlusAI SAFEs, that, pursuant to the Conversion, are converted to PlusAI common stock immediately prior to the Merger.
“PlusAI RSUs” are to all issued and outstanding restricted stock units corresponding to shares of PlusAI common stock (whether or not vested) held by any person, including PlusAI RSUs granted under the 2017 Plan and 2021 Plan.
“PlusAI SAFEs” are to the simple agreements for future equity between PlusAI and the investors party thereto.
“PlusAI Series A-1 preferred stock” are to PlusAI’s Series A-1 preferred stock, par value $0.0001 per share.
“PlusAI Series A-2 preferred stock” are to PlusAI’s Series A-2 preferred stock, par value $0.0001 per share.
“PlusAI Series A-3-X preferred stock” are to PlusAI’s Series A-3-X preferred stock, par value $0.0001 per share.
“PlusAI Series A-4 preferred stock” are to PlusAI’s Series A-4 preferred stock, par value $0.0001 per share.
“PlusAI Series A-4-X preferred stock” are to PlusAI’s Series A-4-X preferred stock, par value $0.0001 per share.
“PlusAI Series B preferred stock” are to PlusAI’s Series B preferred stock, par value $0.0001 per share.
“PlusAI Series B-X preferred stock” are to PlusAI’s Series B-X preferred stock, par value $0.0001 per share.
“PlusAI Series C preferred stock” are to PlusAI’s Series C preferred stock, par value $0.0001 per share.
“PlusAI Total Shares” are to the sum of (1) the aggregate number of issued and outstanding shares of PlusAI common stock as of immediately prior to the Effective Time after giving effect to the Conversion, calculated on an as-converted to PlusAI common stock basis, (2) the aggregate number of shares of PlusAI common stock issuable upon the exercise of all PlusAI options to the extent outstanding and vested as of immediately prior to the Effective Time, (3) the aggregate number of shares of PlusAI common stock issuable upon the settlement of PlusAI RSUs outstanding as of immediately prior to the Effective Time and that will vest in full solely as a result of the consummation of the Merger, and (4) the aggregate number of shares of PlusAI common stock issuable as of immediately prior to the Effective Time upon the exercise of all PlusAI warrants (on a net issuance basis) to the extent outstanding and vested as of immediately prior to the Effective Time, calculated on an as-converted to PlusAI common stock basis.
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“PlusAI warrants” are to all issued and outstanding warrants exercisable for PlusAI common stock or PlusAI preferred stock (whether or not vested) held by any person.
“PlusAI’s current bylaws” are to PlusAI’s bylaws in effect as of the date of this proxy statement/prospectus.
“PlusAI’s current certificate of incorporation” are to PlusAI’s amended and restated certificate of incorporation in effect as of the date of this proxy statement/prospectus.
“Post-Closing Company” are to PlusAI Holdings, Inc., the public entity (formerly named Texas Ventures Acquisition III Corp) following the consummation of the business combination.
“Post-Closing Company assumed warrants” are to all issued and outstanding warrants to purchase shares of Post-Closing Company Class A common stock immediately following the Closing of the Merger as a result of the assumption by the Post-Closing Company of PlusAI warrants in accordance with the terms of the Merger Agreement.
“Post-Closing Company Board” are to the board of directors of the Post-Closing Company.
“Post-Closing Company Class A common stock” are to shares of Class A common stock, par value $0.0001 per share, of the Post-Closing Company.
“Post-Closing Company Class B common stock” are to shares of Class B common stock, par value $0.0001 per share, of the Post-Closing Company.
“Post-Closing Company Class C common stock” are to shares of Class C common stock, par value $0.0001 per share, of the Post-Closing Company.
“Post-Closing Company common stock” are to shares of Post-Closing Class A common stock and Post-Closing Class B common stock.
“Post-Closing Company options” are to all issued and outstanding options to purchase shares of Post-Closing Company common stock, including PlusAI options assumed by the Post-Closing Company that become an option to purchase shares of Post-Closing Company common stock in accordance with the terms of the Merger Agreement.
“Post-Closing Company preferred stock” are to the Post-Closing Company’s preferred stock, par value $0.0001 per share.
“Post-Closing Company private placement warrants” are to all issued and outstanding warrants to purchase shares of Post-Closing Company Class A common stock immediately following the Closing of the Merger as a result of the conversion of TVA III Private Placement Warrants in connection with the Domestication and the Merger in accordance with the terms of the Merger Agreement.
“Post-Closing Company public warrants” are to all issued and outstanding warrants to purchase shares of Post-Closing Company Class A common stock immediately following the Closing of the Merger as a result of the conversion of TVA III Public Warrants in connection with the Domestication and the Merger in accordance with the terms of the Merger Agreement.
“Post-Closing Company RSUs” are to the Post-Closing Company’s restricted stock units.
“Post-Closing Company warrants” are to the Post-Closing Company public warrants, Post-Closing Company private placement warrants, Post-Closing Company working capital warrants and Post-Closing Company assumed warrants.
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“Post-Closing Company working capital warrants” are to all issued and outstanding warrants (issued as part of the TVA III Public Units issued in connection with the Working Capital Loans) to purchase shares of Post-Closing Company Class A common stock immediately following the Closing of the Merger as a result of the conversion of TVA III Public Units issued upon conversion of any Working Capital Loans immediately prior to the Closing.
“Prior Sponsor” are to TV Partners III, LLC.
“pro forma” are to giving pro forma effect to the Transactions and the other related events contemplated by the Merger Agreement.
“Proposed Bylaws” are to the proposed amended and restated bylaws of the Post-Closing Company in the form attached as Annex C.
“Proposed Certificate of Incorporation” are to the proposed second amended and restated certificate of incorporation of the Post-Closing Company in the form attached hereto as Annex B. TVA III will be renamed PlusAI Holdings, Inc. pursuant thereto.
“redemption rights” are to the rights of eligible TVA III Public Shareholders’ demand that TVA III redeem their TVA III public shares for cash in an amount equal to their pro rata portion of the funds held in the trust account, net of taxes payable, if the business combination is consummated.
“Restructuring” are to the series of transactions consummated on July 31, 2023 by PlusAI Corp and all of its then shareholders which ultimately resulted in the divestiture of its operating entity in the People’s Republic of China, Plus PRC Holdings Ltd.
“Securities Act” are to the Securities Act of 1933, as amended.
“Share Issuance Agreements” are to the share issuance agreements entered into by and between PlusAI and certain investors, pursuant to which certain shares of PlusAI Class A common stock will issued to such investors in connection with the PIPE Investment and the Convertible Notes.
“SPAC Material Adverse Effect” are to, with respect to TVA III, a material adverse effect on: (1) the ability of TVA III, Merger Sub I, or Merger Sub II to enter into the Merger Agreement or any Transaction Agreement and perform its respective obligations thereunder or consummate the Transactions or (2) the business, condition (financial or otherwise), assets, liabilities or operations of TVA III; provided, however, that none of the following shall be deemed to constitute, alone or in combination, or be taken into account in the determination of whether, there has been or will be a SPAC Material Adverse Effect under this clause (3): (a) any change in applicable laws or GAAP or any interpretation thereof, (b) any change in interest rates or economic, political, business, financial, commodity, currently or market conditions generally, (c) any actions taken or not taken by TVA III, or such other changes or events, in each case, which (i) PlusAI has consented in writing or (ii) are required by the Merger Agreement and (d) the announcement or the execution of the Merger Agreement, the pendency or consummation of the Merger or the performance of the Merger Agreement.
“special resolution” are to a special resolution of TVA III passed in accordance with the Companies Act, being a resolution: (1) passed by a majority of not less than two-thirds, other than with respect to amending either of Articles 22.5 or 27(d) of the TVA III MAA (except where such amendment is proposed in respect of the consummation of the business combination) where such majority shall be at least 90%, of such holders of outstanding TVA III Ordinary Shares as, being entitled to do so, vote in person or, where proxies are allowed, by proxy at a general meeting of TVA III of which notice specifying the intention to propose the resolution as a special resolution has been duly given and where a poll is taken regard shall be had in computing a majority to the number of votes to which each holder of outstanding TVA III Ordinary Shares is entitled; or (2) approved in writing by all of the holders of outstanding TVA III Ordinary Shares entitled to vote at a general meeting of TVA III (or such lower threshold as may be allowed under the Companies Act from time to time) in one or more instruments each signed by one or more of such holder of
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outstanding TVA III Ordinary Shares and the effective date of the special resolution so adopted shall be the date on which the instrument or the last of such instruments, if more than one, is executed.
“Sponsor Affiliate” are to YA II PN, Ltd., a Cayman Islands exempted company, which is the member of the Sponsor holding the largest membership interest in the Sponsor, and an entity in which certain of TVA III’s officers and directors hold an indirect interest.
“Sponsor Affiliate Securities” are to the 1,050,000 TVA III Class A Ordinary Shares held by the Sponsor Affiliate.
“Sponsor Securities” are to the securities of TVA III held by the Sponsor.
“Sponsor Support Agreement” are to the Sponsor Support Agreement, dated as of September 2, 2026, by and among TVA III, the Sponsor and the Insiders.
“Strategic Commercial Transaction” are to potential commercial agreements that may involve the issuance of shares of Post-Closing Company Class A common stock or securities convertible into Post-Closing Company Class A common stock to a commercial partner that may be consummated prior to or substantially concurrently with the Closing. For example, in March 2026, TRATON and PlusAI entered into an Autonomy Acceleration Program Agreement to expand their global partnership to accelerate autonomous truck commercialization. For additional information, see the section of this proxy statement/prospectus titled “PlusAI’s Management’s Discussion and Analysis of Financial Condition and Results of Operations—Significant Events and Transactions—Expanded TRATON Partnership.” As of the date of this proxy statement/prospectus, no binding agreement has been executed with respect to any additional Strategic Commercial Transaction, and there can be no assurances that any additional Strategic Commercial Transaction shall be consummated prior to Closing.
“SuperDrive” is to PlusAI’s flagship product, a proprietary AI‑based software platform that enables L4 autonomous driving for heavy‑duty trucks.
“Transaction Agreements” or “related agreements” are to the Merger Agreement, the Sponsor Support Agreement, the A&R Registration Rights Agreement, the Company Voting and Support Agreements, the Convertible Note and Warrant Subscription Agreements, the Share Issuance Agreements, the PIPE Subscription Agreements, the PIPE Side Letters, the Forward Purchase Agreement, the Proposed Bylaws and the Proposed Certificate of Incorporation and all of the agreements, documents, instruments and certificates entered into in connection with such documents and any and all exhibits and schedules thereto.
“Transactions” are to the Merger, together with the other transactions contemplated by the Merger Agreement and the related agreements.
“trust account” are to the trust account of TVA III that holds the proceeds from the TVA III IPO.
“TVA III” or “SPAC” are to Texas Ventures Acquisition III Corp. Prior to the Domestication, TVA III is an exempted company incorporated under the laws of the Cayman Islands. Following the Domestication, subject to shareholder approval, TVA III will be a corporation incorporated under the laws of the State of Delaware named “PlusAI Holdings, Inc.”
“TVA III Board” or “SPAC Board” are to the board of directors of TVA III.
“TVA III Class A Common Stock” are to the shares of Class A common stock of TVA III, par value $0.0001 per share, immediately upon the Domestication.
“TVA III Class A Ordinary Shares” are to the Class A ordinary shares of TVA III, par value $0.0001 per share.
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“TVA III Class B Ordinary Shares” are to the Class B ordinary shares of TVA III, par value $0.0001 per share.
“TVA III Founder Shares” are to TVA III Class B Ordinary Shares initially purchased by the Prior Sponsor and the TVA III Class A Ordinary Shares that will be issued upon the conversion of such TVA III Class B Ordinary Shares prior to the Domestication.
“TVA III IPO” are to the initial public offering of 22,500,000 TVA III Public Units, including 2,500,000 TVA III Public Units under the underwriters’ over- allotment option, which closed on April 24, 2025.
“TVA III IPO Underwriting Agreement” are to the underwriting agreement, dated as of April 22, 2025, by and between TVA III and CCM, as representative of the several underwriters party thereto.
“TVA III Key Holders” are to those certain TVA III Shareholders that will enter into the Lock-Up Agreement at Closing.
“TVA III MAA” or “TVA III Articles” are to the current amended and restated memorandum and articles of association of TVA III, adopted pursuant to a special resolution passed on April 22, 2025.
“TVA III Net Tangible Asset closing condition” are to the closing condition in the Merger Agreement that requires TVA III to have at least $5,000,001 of net tangible assets as of the Closing.
“TVA III Ordinary Shares” collectively, are to the TVA III Class A Ordinary Shares and the TVA III Class B Ordinary Shares.
“TVA III Private Placement Warrants” are to warrants issued to the Prior Sponsor, which were subsequently sold to the Sponsor, and the underwriters in a private placement that entitled the holder thereof to purchase TVA III Class A Ordinary Shares at an exercise price of $11.50 per share.
“TVA III public shares” are to shares of Class A Ordinary Shares sold as part of the TVA III Public Units sold in the TVA III IPO.
“TVA III Public Shareholders” are to the holders of TVA III public shares. TVA III Public Shareholders includes the Sponsor and the TVA III officers or directors to the extent that the Sponsor and/or TVA III’s officers or directors hold TVA III public shares, provided that each of their status as a TVA III Public Shareholder will only exist with respect to such TVA III public shares.
“TVA III Public Units” are to the TVA III Public Units sold in the TVA III IPO, all of which have been separated into TVA III public shares and TVA III Public Warrants.
“TVA III Public Warrants” are to the warrants sold to the public by TVA III as part of the SPAC IPO (whether purchased in such offering or thereafter in the public market) that entitle the holder thereof to purchase TVA III Class A Ordinary Shares at an exercise price of $11.50 per share.
“TVA III Record Date” are to the close of business on , 2026.
“TVA III Shareholder Approval” are to (i) the approval of the Merger and the Plan of Merger and the transactions contemplated thereby, in each case, by a special resolution (as defined in the Cayman Companies Act, being a resolution approved by an affirmative vote of the holders of at least a two-thirds (2/3) majority of the issued and outstanding TVA III Ordinary Shares entitled to vote thereupon (as determined in accordance with the TVA III MAA)) at a SPAC Shareholders’ Meeting duly called by the TVA III Board and held for such purpose, and (ii) the approval of the other SPAC Shareholder Proposals not included in (i) above by an ordinary resolution (being a resolution passed by a simple majority of the SPAC Shareholders as, being entitled to do so, vote in person or, where proxies are allowed, by proxy at a general meeting) at a SPAC Shareholders’ Meeting.
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“TVA III Termination Date” are to the date by which TVA III must (i) consummate a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination involving TVA III with one or more business or (ii) cease its operations except for the purpose of winding up if it fails to complete an initial business combination and redeem or repurchase 100% of the then issued and outstanding TVA III Class A Ordinary Shares.
“TVA III Transfer Agent” are to the transfer agent of TVA III, Continental Stock Transfer & Trust Company.
“TVA III Warrants” are to the TVA III Public Warrants and TVA III Private Placement Warrants.
“Working Capital Loans” are to the convertible unsecured promissory note issued by TVA III to the Sponsor in an aggregate principal amount of up to $1,500,000.
“TVA III Preference Share” are to a preference share of TVA III, par value of $0.0001 each.
“VWAP”, for any security as of any trading day, are to the dollar volume-weighted average price for such security on the principal securities exchange or securities market on which such security is then traded during such trading day beginning at 9:30:01 a.m., New York time, and ending at 4:00:00 p.m., New York time, as reported by Bloomberg through its “HP” function (set to weighted average). If the foregoing does not apply, “VWAP” shall mean the dollar volume-weighted average price of such security in the over-the-counter market on the electronic bulletin board for such security during such trading day beginning at 9:30:01 a.m., New York time, and ending at 4:00:00 p.m., New York time, as reported by Bloomberg. If no dollar volume-weighted average price is reported for such security by Bloomberg for such hours, “VWAP” shall mean the average of the highest closing bid price and the lowest closing ask price of any of the market makers for such security as reported by OTC Markets Group Inc for such trading day. If the VWAP cannot be calculated for such security on such date(s) on any of the foregoing bases, the VWAP of such security on such shall be the fair market value per share on such day as reasonably determined by the Post-Closing Company Board (including for the avoidance of doubt a duly authorized committee thereof).
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SUMMARY OF THE MATERIAL TERMS OF THE TRANSACTIONS
This summary term sheet, together with the sections entitled “Questions and Answers About the Business Combination” and “Summary of the Proxy Statement/Prospectus,” summarizes certain information contained in this proxy statement/prospectus, but does not contain all of the information that is important to you. You should read carefully this entire proxy statement/prospectus, including the attached Annexes, for a more complete understanding of the matters to be considered at the extraordinary general meeting, as applicable. In addition, for definitions used commonly throughout this proxy statement/prospectus, including this summary term sheet, please see the section entitled “Frequently Used Terms.”
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QUESTIONS AND ANSWERS ABOUT THE BUSINESS COMBINATION
The questions and answers below highlight only selected information from this proxy statement/prospectus and only briefly address some commonly asked questions about the extraordinary general meeting and the proposals to be presented at the extraordinary general meeting, including with respect to the business combination proposal. The following questions and answers do not include all the information that is important to TVA III shareholders, who are urged to read carefully this entire proxy statement/prospectus, including the Annexes and the other documents referred to herein, to fully understand the business combination.
Questions and Answers for TVA III shareholders about the extraordinary general meeting and the business combination
This proxy statement/prospectus and its Annexes contain important information about the business combination proposal and the other matters and proposals to be acted upon at the extraordinary general meeting. You should read this proxy statement/prospectus and its Annexes carefully and in their entirety.
Your vote is important. You are encouraged to submit your proxy card as soon as possible after carefully reviewing this proxy statement/prospectus, its Annexes and the other documents referred to herein.
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TVA III will hold the extraordinary general meeting to consider and vote upon these proposals. This proxy statement/prospectus contains important information about the proposals to be acted upon at the extraordinary general meeting. Shareholders should read it carefully, including its Annexes.
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Consummation of the business combination is conditioned on the approval of each of the condition precedent proposals (as defined above). If any of those proposals are not approved at the extraordinary general meeting (or any adjournment or postponement thereof), then unless certain conditions in the Merger Agreement are waived by the applicable parties to the Merger Agreement, the Merger Agreement may be terminated and the business combination may not be consummated.
The vote of TVA III shareholders is important. TVA III shareholders are encouraged to vote as soon as possible after carefully reviewing this proxy statement/prospectus.
On August 1, 2024, the Prior Sponsor purchased 7,666,667 TVA III Founder Shares in exchange for a payment of $25,000.
On April 24, 2025, TVA III completed the TVA III IPO of TVA III Public Units at a price of $10.00 per unit, consisting of one share of TVA III Class A Ordinary Shares and one-half of one TVA III Public Warrant, raising total gross proceeds of approximately $225,000,000. Simultaneously with the consummation of the TVA III IPO, TVA III completed the private sale of an aggregate of 7,568,750 TVA III Private Placement Warrants to Prior Sponsor, CCM and Clear Street in the TVA III Private Placement at a purchase price of $1.00 per TVA III Private Placement Warrant, generating gross proceeds of $7,568,750. CCM and Clear Street purchased an aggregate of 2,868,750 TVA III Private Placement Warrants and the Prior Sponsor purchased 4,700,000 TVA III Private Placement Warrants (inclusive of the 4,100,000 NMSI TVA III Private Placement Warrants owned by the Prior Sponsor that were allocated to the non-managing sponsor investors as a result of the non-managing sponsor investor’s membership interests in the Prior Sponsor). Each TVA III Private Placement Warrant is exercisable to purchase one TVA III Class A Ordinary Share at $11.50 per share.
In addition, on April 24, 2025, 166,667 TVA III Founder Shares were forfeited as the underwriters did not fully exercise the over-allotment option.
On September 18, 2025, TVA III, the Prior Sponsor and the Sponsor, entered into the Purchase Agreement, pursuant to which, the Sponsor (i) purchased from the Prior Sponsor (a) 7,500,000 TVA III Founder Shares and (b) 4,700,000 TVA III Private Placement Warrants, for an aggregate purchase price of $7,400,000 and (ii) upon closing, became the Sponsor of TVA III. Since the TVA III IPO and the TVA III Private Placement, TVA III’s activity has been limited to the evaluation of initial business combination candidates.
PlusAI was founded in 2016 by entrepreneurs with deep expertise in engineering, artificial intelligence, and machine learning. PlusAI adopted an AI‑native approach to autonomy early on, using advanced AI models in place of traditional rule-based code to enable scalable and adaptive self-driving technology. Our four founders have collectively founded and scaled six other technology companies, bringing a track record of successful execution in technology markets.
PlusAI is developing autonomous driving intelligence at global scale to create lasting value for the commercial trucking ecosystem by enhancing safety and lowering the cost of freight transportation. PlusAI develops its flagship product, SuperDrive, in partnership with OEMs. SuperDrive is designed to improve safety, efficiency, and cost-effectiveness for commercial fleets. PlusAI is targeting a 2027 commercial launch of SuperDrive in collaboration with its OEM partners; it has not yet generated revenue from SuperDrive and historical revenues are either nominal or based on discontinued operations or products.
The TVA III Board conducted extensive due diligence on PlusAI’s business, financial condition, management team, and future growth prospects in executing upon and achieving its business plan. The TVA III Board considered the results of the diligence review, including the expertise of PlusAI’s management team, the large expected market desire for autonomous vehicles, the government policy and funding support being made available
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to accelerate development of autonomous vehicles, PlusAI’s existing OEM partnerships, as well as its AI powered virtual driver software. As a result, TVA III believes that the business combination will provide TVA III shareholders with an opportunity to participate in the ownership of a company with growth potential. Please see the section entitled “Proposal No. 1 — The Business Combination Proposal — The TVA III Board’s Reasons for Approval of the Business Combination.”
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The following summarizes the pro forma shares of the Post-Closing Company common stock issued and outstanding immediately after the business combination on an issued and outstanding basis, presented under the following redemption scenarios:
|
|
No Redemption |
|
|
25% Redemption |
|
|
50% Redemption |
|
|
Maximum Redemption |
|
||||||||||||||||||||||||||||||||||||
|
|
Shares |
|
|
% Outstanding |
|
|
% |
|
|
Shares |
|
|
% Outstanding |
|
|
% |
|
|
Shares |
|
|
% Outstanding |
|
|
% |
|
|
Shares |
|
|
% Outstanding |
|
|
% |
|
||||||||||||
TVA Public Stockholders (1) |
|
|
22,500,000 |
|
|
|
20.9 |
% |
|
|
6.1 |
% |
|
|
16,875,000 |
|
|
|
16.5 |
% |
|
|
4.6 |
% |
|
|
11,250,000 |
|
|
|
11.7 |
% |
|
|
3.1 |
% |
|
|
1,050,000 |
|
|
|
1.3 |
% |
|
|
0.3 |
% |
Sponsor and affiliates (2) |
|
|
7,500,000 |
|
|
|
7.0 |
% |
|
|
2.0 |
% |
|
|
7,500,000 |
|
|
|
7.4 |
% |
|
|
2.1 |
% |
|
|
7,500,000 |
|
|
|
7.8 |
% |
|
|
2.1 |
% |
|
|
7,500,000 |
|
|
|
8.7 |
% |
|
|
2.1 |
% |
PlusAI Stockholders (3) |
|
|
77,550,256 |
|
|
|
72.0 |
% |
|
|
91.9 |
% |
|
|
77,550,256 |
|
|
|
76.0 |
% |
|
|
93.3 |
% |
|
|
77,550,256 |
|
|
|
80.4 |
% |
|
|
94.8 |
% |
|
|
77,550,256 |
|
|
|
89.9 |
% |
|
|
97.6 |
% |
CCM (4) |
|
|
100,000 |
|
|
|
0.1 |
% |
|
|
0.0 |
% |
|
|
100,000 |
|
|
|
0.1 |
% |
|
|
0.0 |
% |
|
|
100,000 |
|
|
|
0.1 |
% |
|
|
0.0 |
% |
|
|
100,000 |
|
|
|
0.1 |
% |
|
|
0.0 |
% |
Total Common Stock Outstanding |
|
|
107,650,256 |
|
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
102,025,256 |
|
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
96,400,256 |
|
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
86,200,256 |
|
|
|
100.0 |
% |
|
|
100.0 |
% |
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The following table illustrates varying ownership levels in the Post-Closing Company immediately following the consummation of the business combination in the below redemption scenarios, but, in each case, includes the dilutive effect of the issuance of all Earnout Shares, the issuance of all shares of Post-Closing Company Class A common stock upon exercise of outstanding PlusAI options assumed by the Post-Closing Company, the issuance of all shares of Post-Closing Class A common stock upon the release of unvested PlusAI RSUs assumed by the Post-Closing Company gross of shares withheld to settle tax obligations, and the issuance of all shares of Post-Closing Company Class A common stock initially reserved for issuance under the Incentive Plan and the ESPP but excludes any shares of Post-Closing Company Class A common stock or issuable pursuant to securities convertible into shares of Post-Closing Company Class A common stock that may be issued pursuant to one or more Other PIPE Investments or Strategic Commercial Transactions that may be consummated prior to or substantially concurrently with the Closing, except for the issuance of the TRATON Warrants. As of the date of this proxy statement/prospectus, no binding agreement has been executed with respect to any Other PIPE Investment or additional Strategic Commercial Transaction and there can be no assurances that any Other PIPE Investment or additional Strategic Commercial Transaction shall be consummated prior to Closing.
|
|
No Redemption Scenario |
|
|
25% Redemption Scenario |
|
|
50% Redemption Scenario |
|
|
Maximum Redemption Scenario |
|
||||
TVA public stockholders |
|
|
22,500,000 |
|
|
|
16,875,000 |
|
|
|
11,250,000 |
|
|
|
1,050,000 |
|
Sponsor |
|
|
7,500,000 |
|
|
|
7,500,000 |
|
|
|
7,500,000 |
|
|
|
7,500,000 |
|
PlusAI stockholders |
|
|
77,550,657 |
|
|
|
77,550,657 |
|
|
|
77,550,657 |
|
|
|
77,550,657 |
|
CCM |
|
|
100,000 |
|
|
|
100,000 |
|
|
|
100,000 |
|
|
|
100,000 |
|
Earnout shares |
|
|
63,000,000 |
|
|
|
63,000,000 |
|
|
|
63,000,000 |
|
|
|
63,000,000 |
|
TVA III Public warrants |
|
|
11,250,000 |
|
|
|
11,250,000 |
|
|
|
11,250,000 |
|
|
|
11,250,000 |
|
TVA III Private Placement warrants |
|
|
7,568,750 |
|
|
|
7,568,750 |
|
|
|
7,568,750 |
|
|
|
7,568,750 |
|
PlusAI warrants |
|
|
18,510,906 |
|
|
|
18,510,906 |
|
|
|
18,510,906 |
|
|
|
18,510,906 |
|
PIPE warrants |
|
|
5,724,068 |
|
|
|
5,724,068 |
|
|
|
5,724,068 |
|
|
|
5,724,068 |
|
Convertible notes |
|
|
6,404,367 |
|
|
|
6,404,367 |
|
|
|
6,404,367 |
|
|
|
6,404,367 |
|
PubCo Options |
|
|
2,389,994 |
|
|
|
2,389,994 |
|
|
|
2,389,994 |
|
|
|
2,389,994 |
|
PubCo RSUs |
|
|
1,978,916 |
|
|
|
1,978,916 |
|
|
|
1,978,916 |
|
|
|
1,978,916 |
|
Total |
|
|
224,477,658 |
|
|
|
218,852,658 |
|
|
|
213,227,658 |
|
|
|
203,027,658 |
|
See the sections entitled “Proposal No. 1 — The Business Combination Proposal — General — Impact of the Business Combination on Our Public Float” and “Unaudited Pro Forma Condensed Combined Financial Information” for more information.
The estimated net cash per share of TVA III shares that is being contributed by TVA III to the Post-Closing Company is calculated as the quotient of (1) (a) the amount of funds held in the trust account (under each of the scenarios presented above), less (b) the amount of estimated TVA III transaction expenses of $16.5 million, divided by (2) the number of TVA III Class A Ordinary Shares anticipated to be outstanding as of immediately prior to the Closing (assumed to be 30,400,000 shares under the No Redemption Scenario, 24,775,000 under the 25% Redemption Scenario, 19,150,000 under the 50% Redemption Scenario, and 8,950,000 shares under the Maximum Redemption Scenario). The estimated net cash per share of TVA III shares that is being contributed to the Post-Closing Company (under each of the scenarios presented above) is less than the $10.00 per share ascribed to such shares in the Merger Agreement or the amount per share that holders of TVA III’s public shares would be entitled to receive upon exercise of their redemption rights (which, for illustrative purposes, was approximately $10.51 per share as of the TVA III Record Date).
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subscription agreements with certain investors, pursuant to which TVA III agreed to issue and sell, in private
placements to close following the Domestication and substantially concurrently with the Closing, (i) convertible
promissory notes in an aggregate original principal amount of $63,888,888, issued at a 10% original issue discount and (ii) shares of Post-Closing Company Class A common stock for aggregate purchase price of $4,000,000, in each case together with related warrants to purchase Post-Closing Company Class A common stock. In connection with these private placements, the Sponsor Affiliate subscribed for the purchase of a convertible note in the principal amount of $27,777,777.78. See the section entitled “Proposal No. 1 —The Business Combination Proposal — Certain Agreements Related to the Business Combination.”
Other than these subscription agreements, as of the date hereof, neither TVA III nor PlusAI have executed agreements with respect to new financing in connection with the business combination that are not otherwise disclosed herein. The impact of all currently anticipated sources of financing is reflected in the pro forma financial statements and other pro forma disclosure throughout this proxy statement/prospectus.
There are no limitations on TVA III’s ability to obtain new financing in connection with the business combination, except those arising under Cayman law, TVA III’s governing documents and Nasdaq rules.
The parties may also mutually agree to pursue other financing opportunities, subject to applicable law, the parties’ governing documents and Nasdaq rules. The parties may also mutually agree to pursue one or more Strategic Commercial Transactions, subject to applicable law, the parties’ governing documents and Nasdaq rules. For example, in March 2026, TRATON and PlusAI entered into an Autonomy Acceleration Program Agreement to expand their global partnership to accelerate autonomous truck commercialization. Pursuant to the agreement, TRATON agreed to pay the Company up to an aggregate of $25 million upon certain agreed performance milestones, in exchange for providing certain autonomy data, tools & services to TRATON in support of the accelerated progression of their Level 2+ program. The agreement also contemplates that TRATON will receive warrants to purchase up to 7,500,000 shares of Post-Closing Company Class A common stock at an exercise price of $11.50 per share. For additional information, see the section of this proxy statement/prospectus titled “PlusAI’s Management’s Discussion and Analysis of Financial Condition and Results of Operations—Significant Events and Transactions—Expanded TRATON Partnership.” Although no additional sources of financing are anticipated between the date hereof and the closing, the terms of such sources of financing could be of differing economic values that could dilute the value of the Post-Closing Company Class A common stock.
Under the TVA III Articles, a transfer by way of continuation requires approval by special resolution. However, pursuant to the TVA III Articles, prior to the closing of a business combination, only holders of TVA III Class B Ordinary Shares have the right to vote on any resolution to approve a transfer by way of continuation (including any special resolution required to amend or adopt new constitutional documents in connection therewith). Since holders of Class A Shares have no right to vote on the continuation under the articles, the Domestication Proposal and the Organizational Documents Proposal are therefore being presented to TVA III shareholders (both the holders of the TVA III Class A Ordinary Shares and TVA III Class B Ordinary Shares) on a non-binding advisory basis only.
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To effect the Domestication, TVA III will file an application to deregister with the Cayman Islands Registrar of Companies, together with the necessary accompanying documents and fees, and file the Proposed Certificate of Incorporation and a certificate of corporate domestication with the Secretary of State of the State of Delaware, under which TVA III will be domesticated and continue as a Delaware corporation.
The approval of the domestication proposal is a condition to closing the business combination under the Merger Agreement. The approval of the domestication proposal requires approval by special resolution. However, prior to the closing of a Business Combination, only holders of TVA III Class B Ordinary Shares have the right to vote on such a resolution. The domestication proposal is therefore being submitted for approval by all shareholders at the special resolution, being the affirmative vote of holders of at least two-thirds of the TVA III Ordinary Shares represented at the extraordinary general meeting by attendance via the virtual meeting website, in person or by proxy and entitled to vote at the extraordinary general meeting, voting together as a single class, on a non-advisory basis. Abstentions and broker non-votes, while considered present for the purposes of establishing a quorum, will not count as votes cast at the extraordinary general meeting.
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TVA III does not expect to have significant cumulative earnings and profits, if any, on the date of the Domestication. However, the determination of earnings and profits is complex and may be impacted by numerous factors (including matters discussed in this proxy statement/prospectus). It is possible that the amount of TVA III’s cumulative net earnings and profits could be positive through the date of the Domestication.
As discussed more fully under “Material U.S. Federal Income Tax Consequences of the Business Combination to TVA III Shareholders — Tax Effects of the Domestication to U.S. Holders — 5. PFIC Considerations,” TVA III believes that it is likely classified as a PFIC for U.S. federal income tax purposes. If TVA III were classified as a PFIC for U.S. federal income tax purposes, then notwithstanding the U.S. federal income tax consequences of the Domestication discussed in the foregoing, proposed Treasury Regulations under Section 1291(f) of the Code and certain other PFIC rules (which have retroactive proposed effective dates), if finalized in their current form, generally would require a U.S. Holder to recognize gain on the exchange of TVA III Class A Ordinary Shares for TVA III Class A Common Stock or TVA III Warrants for TVA III Delaware Warrants pursuant to the Domestication. Any such gain would be taxable income with no corresponding receipt of cash in the Domestication. The tax on any such gain would be imposed at the rate applicable to ordinary income and an interest charge would apply based on a complex set of rules. The proposed Treasury Regulations provide coordinating rules with other sections of the Code, including Section 367(b), which affect the manner in which the rules under such other sections apply to transfers of PFIC stock. However, it is difficult to predict whether, in what form, and with what effective date, final Treasury Regulations under Section 1291(f) of the Code and such other PFIC rules may be adopted and how any such Treasury Regulations would apply. Importantly, however, U.S. Holders that make or have made certain elections discussed further under “Material U.S. Federal Income Tax Consequences of the Business Combination to TVA III Shareholders — Tax Effects of the Domestication to U.S. Holders — 5. PFIC Considerations” with respect to their TVA III Class A Ordinary Shares are generally not subject to the same gain recognition rules under the currently proposed Treasury Regulations under Section 1291(f) of the Code. Under current law, no such elections may be made with respect to TVA III Warrants. For a more complete discussion of the potential application of the PFIC rules to U.S. Holders as a result of the Domestication, see “Material U.S. Federal Income Tax Consequences of the Business Combination to TVA III Shareholders — Tax Effects of the Domestication to U.S. Holders — 5. PFIC Considerations.”
Each U.S. Holder is urged to consult its own tax advisor concerning the application of the PFIC rules, including the proposed Treasury Regulations, to the exchange of TVA III Class A Ordinary Shares for TVA III Class A Common Stock and TVA III Warrants for TVA III Delaware Warrants pursuant to the Domestication.
Moreover, U.S. Holders of TVA III public shares exercising redemption rights will be subject to the potential tax consequences of the Domestication.
Additionally, the Domestication may cause Non-U.S. Holders (as defined in “Material U.S. Federal Income Tax Consequences of the Business Combination to TVA III Shareholders”) to become subject to U.S. federal withholding taxes on any amounts treated as dividends paid in respect of such Non-U.S. Holder’s PlusAI common stock after the Domestication.
The tax consequences of the Domestication are complex and will depend on a holder’s particular circumstances. All holders of TVA III Class A Ordinary Shares or TVA III Warrants are urged to consult their tax advisor regarding the tax consequences to them of the Domestication, including the applicability and effect of U.S. federal, state, local and non-U.S. tax laws. The opinion of DLA Piper LLP (US), a copy of which is attached as an exhibit to the registration statement of which this proxy statement/prospectus is a part, expresses no opinion on the potential U.S. federal income tax consequences of the Domestication pursuant to Section 367 of the Code or the PFIC rules. For a more complete discussion of the U.S. federal income tax considerations of the Domestication, see “Material U.S. Federal Income Tax Consequences of the Business Combination to TVA III Shareholders.”
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Additionally, the Merger Agreement provides that the consummation of the business combination is conditioned upon TVA III having at least $5,000,001 of net tangible assets as of the Closing and the Available Closing SPAC Cash, after reduction for the aggregate amount of TVA III shareholder redemptions, plus the gross proceeds received by TVA III from the Convertible Notes and the PIPE Investment, calculated before payment of any transaction expenses, being at least equal to $40,000,000 as of the Closing, subject to waiver of such condition as provided for in the Merger Agreement and the Minimum Proceeds Side Letter. However, because Sponsor Affiliate holds 1,050,000 public shares and has agreed pursuant to the terms of the Forward Purchase Agreement not to redeem its shares in contemplation of the business combination, it is not expected that TVA III would be left with less than $5,000,001 of net tangible assets as a result of redemptions by the holders of TVA III public shares.
For a summary of the conditions that must be satisfied or waived prior to completion of the business combination, please see the section entitled “Proposal No. 1 — The Business Combination Proposal — Certain Agreements Related to the Business Combination — Merger Agreement — Conditions to Closing General Conditions.”
The TVA III Articles permit the chair of the extraordinary general meeting to adjourn the extraordinary general meeting from time to time and from place to place either (1) with the consent of any general meeting at which a quorum is present (and shall if so directed by the meeting); or (2) without the consent of such meeting if, in his or her sole opinion, he or she considers it necessary to do so to: (a) secure the orderly conduct or proceedings of the meeting; or (b) give all persons present in person or by proxy and having the right to speak and / or vote at such meeting, the ability to do so. No business shall be transacted at any adjourned meeting other than the business left unfinished at the meeting from which the adjournment took place. When a meeting, or adjourned meeting, is adjourned for 14 days or more, notice of the adjourned meeting shall be given in the manner provided for the original meeting. Save as aforesaid, it shall not be necessary to give any notice of an adjournment or of the business to be transacted at an adjourned meeting.
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The approval of the domestication proposal and the organizational document proposal are being submitted for approval by special resolution, being the affirmative vote of holders of at least two-thirds of the TVA III Ordinary Shares represented at the extraordinary general meeting by attendance via the virtual meeting website, in person or by proxy and entitled to vote at the extraordinary general meeting, voting together as a single class. Accordingly, if a valid quorum is established, a TVA III shareholder’s failure to vote by proxy or to vote at the extraordinary general meeting with regard to the domestication proposal and the organizational documents proposal will have no effect on such proposal. Under the TVA III Articles, a transfer by way of continuation in a jurisdiction outside the Cayman Islands or such other jurisdiction in which it is for the time being incorporated, registered or existing (including, but not limited to, the approval of the organizational documents to be adopted by the Company in such other jurisdiction to the extent applicable), requires approval by special resolution. However, pursuant to the TVA III Articles, prior to the closing of a business combination, only holders of TVA III Class B Ordinary Shares have the right to vote on any resolution to approve a transfer by way of continuation. The Domestication Proposal and the Organizational Documents Proposal are therefore being presented to all TVA III shareholders on a non-binding advisory basis only.
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Notwithstanding the foregoing, a holder of TVA III public shares, together with any affiliate of such holder or any other person with whom such holder is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Exchange Act), will be restricted from seeking redemption with respect to more than 15% of the TVA III public shares. Accordingly, all TVA III public shares in excess of 15% held by a TVA III public shareholder, together with any affiliate of such holder or any other person with whom such holder is acting in concert or as a “group,” will not be redeemed without the prior written consent of our directors.
Under the Exchange Act, the business combination may be consummated only if TVA III has at least $5,000,001 of net tangible assets after giving effect to all holders of TVA III public shares that properly demand redemption of their shares for cash on the date that is two business days prior to the date of the extraordinary general meeting. However, because Sponsor Affiliate holds 1,050,000 public shares and has agreed pursuant to the terms of the Forward Purchase Agreement not to redeem its shares in contemplation of the business combination, it is not expected that TVA III would be left with less than $5,000,001 of net tangible assets as a result of redemptions by the holders of TVA III public shares.
Pursuant to the New Insider Letter, the Sponsor and the Insiders have agreed to waive their redemption rights with respect to all of their TVA III Ordinary Shares in connection with the consummation of the business combination and, because of this, such TVA III Ordinary Shares are excluded from the pro rata calculation used to determine the per share redemption price. In addition, pursuant to the Sponsor Support Agreement, the Sponsor and the Insiders have agreed to vote their TVA III Ordinary Shares in favor of the Transactions and other SPAC Stockholder Matters. As is customary in transactions of this type, the Sponsor and the Insiders did not receive any consideration for these obligations.
Any request for redemption, once made by a holder of TVA III public shares, may be withdrawn at any time up to the time the vote is taken with respect to the business combination proposal at the extraordinary general meeting. If you deliver your TVA III public shares for redemption to the TVA III Transfer Agent and later decide prior to the extraordinary general meeting not to elect redemption, you may request that the TVA III Transfer Agent return the shares (physically or electronically). You may make such request by contacting the TVA III Transfer Agent at the address listed at the end of this section.
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Any corrected or changed proxy card or written demand of redemption rights must be received by the TVA III Transfer Agent at least two business days prior to the initially scheduled vote taken on the business combination proposal at the extraordinary general meeting or such later date as our board of directors may determine. No demand for redemption will be honored unless the holder’s stock has been delivered (either physically or electronically) to the TVA III Transfer Agent at least two business days prior to the initially scheduled vote at the extraordinary general meeting.
If a redemption demand is properly made as described above, then, if the business combination is consummated, TVA III will redeem such TVA III public shares for a pro rata portion of funds held in the trust account. If you exercise your redemption rights, then you will be exchanging your TVA III public shares for cash.
Upon the Closing, the Post-Closing Company public warrants and Post-Closing Company private placement warrants will have the same rights as the TVA III Public Warrants and TVA III Private Placement Warrants, respectively. Following the Closing, the Post-Closing Company may redeem your unexpired Post-Closing Company public warrants prior to their exercise at a time that is disadvantageous to you, making your warrants worthless. The Post-Closing Company may redeem outstanding Post-Closing Company public warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per Post-Closing Company public warrant. To exercise such redemption right: (1) the last reported sale price of Post-Closing Company Class A common stock must equal or exceed $18.00 per share (as adjusted for share subdivisions, share dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30 trading-day period ending on the third trading day prior to the date on which we send notice of redemption to the warrant holders; and (2) certain other conditions must be met. If and when the Post-Closing Company public warrants become redeemable by the Post-Closing Company, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws. As a result, the Post-Closing Company may redeem the Post-Closing Company public warrants as set forth above even if the holders are otherwise unable to exercise the Post-Closing Company public warrants. Redemption of the outstanding Public Warrants could force you to: (1) exercise your Post-Closing Company public warrants and pay the exercise price at a time when it may be disadvantageous for you to do so; (2) sell your Post-Closing Company public warrants at the then-current market price when you might otherwise wish to hold your Post-Closing Company public warrants; or (3) accept the nominal redemption price which, at the time the outstanding Post-Closing Company public warrants are called for redemption, is likely to be substantially less than the market value of your Post-Closing Company public warrants. Please see “Risk Factors — Risk Related to TVA III, the Domestication and the Business
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Combination — We may redeem your unexpired TVA III Public Warrants prior to their exercise at a time that is disadvantageous to you, thereby making your warrants without value to the holder.”
If the Post-Closing Company calls the Post-Closing Company public warrants for redemption, management of the Post-Closing Company will have the option to require all holders that wish to exercise the Post-Closing Company public warrants to do so on a “cashless basis,” as described in the section entitled “Description of Securities – Warrants” and the warrant agreement, a copy of which is attached as an exhibit to the registration statement of which this proxy statement/prospectus is a part. The exercise price and number of shares of the Post-Closing Company Class A common stock issuable upon exercise of the Post-Closing Company public warrants may be adjusted in certain circumstances including in the event of a share dividend, or recapitalization, reorganization, merger or consolidation. However, the Post-Closing Company public warrants will not be adjusted for issuance of the Post-Closing Company Class A common stock at a price below its exercise price. Additionally, in no event will the Post-Closing Company be required to net cash settle the Post-Closing Company public warrants.
If TVA III is unable to complete the business combination within the completion window, and TVA III liquidates the funds held in the trust account, holders of the TVA III Public Warrants will not receive any of such funds with respect to their TVA III Public Warrants, nor will they receive any distribution from TVA III’s assets held outside of the trust account with the respect to such TVA III Public Warrants. Accordingly, the TVA III Public Warrants may expire worthless.
All shareholders considering exercising redemption rights are urged to consult their tax advisors on the tax consequences to them of an exercise of redemption rights, including the applicability and effect of U.S. federal, state, local and non-U.S. tax laws.
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If you are a holder of record of TVA III Ordinary Shares on the TVA III Record Date, you may vote at the extraordinary general meeting via the virtual meeting website or by submitting a proxy for the extraordinary general meeting. If you attend and vote at the extraordinary general meeting, you will automatically revoke any previously submitted proxy. You may submit your proxy by completing, signing, dating and returning the enclosed proxy card in the accompanying pre-addressed postage paid envelope no later than the time of the extraordinary general meeting or, if the meeting is adjourned, the time for holding such adjourned meeting. If you hold your TVA III Ordinary Shares in “street name,” which means your shares are held of record by a broker, bank or nominee, you should contact your broker to ensure that votes related to the shares you beneficially own are properly counted. In this regard, you must provide the broker, bank or nominee with instructions on how to vote your TVA III Ordinary Shares or, if you wish to attend the meeting and vote, obtain a proxy card from your broker, bank or nominee.
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Texas Ventures Acquisition III Corp
1012 Springfield Avenue
Mountainside, New Jersey 07092
Attention: Troy Rillo, Chief Executive Officer and Chief Financial Officer
Email: Tvainfo@yorkvilleglobal.com
or:
Sodali & Co
333 Ludlow Street, 5th Floor, South Tower
Stamford, CT 06902
Telephone: (800) 662-5200
Banks and Brokers: (203) 658-9400
Email: TVA.info@investor.sodali.com
To obtain timely delivery, our shareholders must request any additional materials no later than five business days prior to the extraordinary general meeting. You may also obtain additional information about TVA III from documents filed with the SEC by following the instructions in the section entitled “Where You Can Find More Information.” If you are an eligible holder of TVA III public shares and you intend to seek redemption of your shares, you will need to deliver your stock (either physically or electronically) to the TVA III Transfer Agent at the address below prior to the vote at the extraordinary general meeting. See the section entitled “Extraordinary General Meeting of TVA III — Redemption Rights.”
If you have questions regarding the certification of your position or delivery of your shares, please contact:
Continental Stock Transfer & Trust Company
One State Street Plaza, 30th Floor
New York, NY 10004
Attn: SPAC Redemption Team
Email: spacredemptions@continentalstock.com
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SUMMARY OF THE PROXY STATEMENT/PROSPECTUS
This summary highlights selected information from this proxy statement/prospectus and does not contain all of the information that is important to you. To better understand the proposals to be submitted by TVA III for a vote at the extraordinary general meeting, including the business combination proposal, you should read this entire document carefully, including the Merger Agreement attached as Annex A to this proxy statement/prospectus. The Merger Agreement is the legal document that governs the Transactions that will be undertaken in connection with the business combination. It is also described in detail in this proxy statement/prospectus in the section entitled “Proposal No. 1 — The Business Combination Proposal — Certain Agreements Related to the Business Combination — Merger Agreement.”
The Parties
TVA III
Texas Ventures Acquisition III Corp is a blank check company formed in order to effect a merger, amalgamation, share exchange, asset acquisition, stock purchase, reorganization or other similar business combination with one or more businesses. TVA III was incorporated under the laws of the Cayman Islands on July 26, 2024.
On August 1, 2024, the Prior Sponsor purchased 7,666,667 TVA III Founder Shares in exchange for a payment of $25,000.
On April 24, 2025, TVA III closed the TVA III IPO of 22,500,000 TVA III Public Units, including the full exercise of the over-allotment option to the extent of 2,500,000 units. The TVA III Public Units were sold at an offering price of $10.00 per unit, generating gross proceeds of $225,000,000. Simultaneously with the consummation of the TVA III IPO, TVA III completed the private sale of an aggregate of 7,568,750 TVA III Private Placement Warrants to Prior Sponsor, CCM and Clear Street in the TVA III Private Placement at a purchase price of $1.00 per TVA III Private Placement Warrant, generating gross proceeds of $7,568,750.
In the TVA III Private Placement, CCM and Clear Street purchased an aggregate of 2,868,750 TVA III Private Placement Warrants and the Prior Sponsor purchased 4,700,000 TVA III Private Placement Warrants (inclusive of the 4,100,000 NMSI TVA III Private Placement Warrants owned by the Prior Sponsor that were allocated to the non-managing sponsor investors as a result of the non-managing sponsor investor’s membership interests in the Prior Sponsor). Each TVA III Private Placement Warrant is exercisable to purchase one TVA III Class A Ordinary Share at $11.50 per share. In addition, on April 24, 2025, 166,667 TVA III Founder Shares were forfeited as the underwriters did not fully exercise the over-allotment option.
A total of $226,125,000 (or $10.05 per TVA III Public Unit) was deposited into the trust account and the remaining net proceeds became available to be used as working capital to provide for business, legal and accounting due diligence on prospective initial business combinations and continuing general and administrative expenses. The TVA III IPO was conducted pursuant to a registration statement on Form S-1 that became effective on April 22, 2025.
On September 18, 2025, the TVA III, the Prior Sponsor and the Sponsor, entered into the Purchase Agreement, pursuant to which, the Sponsor (i) purchased from the Prior Sponsor (a) 7,500,000 TVA III Founder Shares and (b) 4,700,000 TVA III Private Placement Warrants, for an aggregate purchase price of $7,400,000 and (ii) upon closing, became the Sponsor of TVA III.
As of the close of business on , 2026, the TVA III Record Date for the extraordinary general meeting of shareholders of TVA III, there was approximately $ million held in the trust account. Each of the TVA III Public Units, TVA III public shares and TVA III Public Warrants are traded on the Global Market tier of Nasdaq under the symbols “TVACU”, “TVA” and “TVACW”, respectively. In connection with the business combination, TVA III will change its name to “PlusAI Holdings, Inc.”, and upon the Closing, we expect that Post-Closing Company Class A common stock will begin trading on the Capital Market tier of Nasdaq under the symbol “PXAI.”
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The mailing address of TVA III’s principal executive office is 1012 Springfield Avenue, Mountainside, New Jersey 07092. Its telephone number is (201) 985-8300. After the consummation of the business combination, its principal executive office will be that of PlusAI.
Merger Subs
Each of the two Merger Subs, TVAC Merger Sub I, Inc., a Delaware corporation, and TVAC Merger Sub II, LLC, a Delaware limited liability company, is a wholly owned subsidiary of TVA III formed under the laws of Delaware, solely for the purpose of effectuating the Merger described herein. The Merger Subs own no material assets and do not operate any business.
The mailing address of the Merger Subs’ principal executive office is 1012 Springfield Avenue, Mountainside, New Jersey 07092. Their telephone number is (201) 985-8300. After the consummation of the business combination, Merger Subs will cease to exist as separate legal entities.
PlusAI
PlusAI is a Delaware corporation originally incorporated under the laws of Delaware on March 2, 2023 and is based in Santa Clara, CA. PlusAI is a leading developer of AI-powered virtual driver software that enables heavy-duty trucks to autonomously transport commercial freight on public roads without a driver in the vehicle. PlusAI is targeting a 2027 commercial launch of SuperDrive in collaboration with its OEM partners; it has not yet generated revenue from SuperDrive and historical revenues are either nominal or based on discontinued operations or products. In support of this objective, PlusAI is actively engaged in joint development and validation programs with its global OEM partners pursuant to which PlusAI provides its SuperDrive virtual driver software to OEM partners, who integrate the technology directly into factory-built trucks. As the autonomous trucks are utilized, fleet operators pay OEMs a fee-per-mile under a Driver-as-a-Service (“DaaS”) model. This fee replaces—and is expected to reduce—the cost fleet operators currently bear for human drivers. PlusAI expects that its OEM partners will be contractually obligated to share a fixed portion of the DaaS fee with PlusAI, aligning PlusAI’s revenue with customer adoption and truck utilization. Over the long-term, this is expected to create a predictable and scalable revenue stream, similar to a software-as-a-service model.
PlusAI’s principal executive offices are located at 2953 Bunker Hill Lane, Suite 305, Santa Clara, CA 95054, and its telephone number is (408) 508-4758.
Emerging Growth Company
TVA III 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”). As such, it is eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), reduced disclosure obligations regarding executive compensation in their periodic reports and this proxy statement/prospectus, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. If some investors find TVA III’s securities less attractive as a result, there may be a less active trading market for TVA III’s securities and the prices of its securities may be more volatile.
In addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We intend to take advantage of the benefits of this extended transition period.
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TVA III (including the Post-Closing Company) will remain an emerging growth company until the earlier of: (1) the last day of the fiscal year (a) following April 24, 2030, the fifth anniversary of the TVA III IPO, (b) in which TVA III has total annual gross revenue of at least $1,235,000,000, or (c) in which TVA III is deemed to be a large accelerated filer, which means the market value of TVA III shares that is held by non-affiliates exceeds $700,000,000 as of the end of the prior June 30; and (2) the date on which TVA III has issued more than $1,000,000,000 in nonconvertible debt during the prior three-year period. References herein to “emerging growth company” shall have the meaning associated with it in the JOBS Act.
Smaller Reporting Company
TVA III is also a “smaller reporting company” under the Exchange Act, and may continue to be a smaller reporting company so long as, as of June 30 of the preceding year, (1) the market value of our Class A ordinary shares held by non-affiliates, or our public float, is less than $250 million; or (2) we have annual revenues less than $100 million and our public float is less than $700 million. If we are a smaller reporting company at the time we cease to be an emerging growth company, we may continue to rely on exemptions from certain disclosure requirements that are available to smaller reporting companies. Specifically, as a smaller reporting company we may choose to present only the two most recent fiscal years of audited financial statements in our Annual Report on Form 10-K and, similar to emerging growth companies, smaller reporting companies have reduced disclosure obligations regarding executive compensation.
The Business Combination
Structure of the Transactions
On September 2, 2026, TVA III entered into the Merger Agreement with Merger Subs and PlusAI. Pursuant to the Merger Agreement, the parties thereto will effect the business combination by which (1) the transfer of TVA III by way of continuation out of the Cayman Islands and domestication as a corporation incorporated under the laws of the State of Delaware (the “Domestication”), and (2) following the Domestication, Merger Sub I will merge with and into PlusAI, with PlusAI continuing as the surviving corporation and a wholly owned subsidiary of TVA III, and immediately thereafter, PlusAI will merge with and into Merger Sub II, with Merger Sub II continuing as the surviving entity as a wholly owned subsidiary of TVA III (collectively, the “Merger”).
Merger Consideration
PlusAI will take all actions necessary or appropriate so that, immediately prior to the Closing, (1) all shares of PlusAI preferred stock will be converted into shares of PlusAI common stock (the “Preferred Conversion”) and (2) all PlusAI SAFEs will be converted into shares of PlusAI common stock in accordance with the terms of such PlusAI SAFEs, in each case pursuant to the terms of the Merger Agreement (the “SAFE Conversion” and, together with the Preferred Conversion, the “Conversion”). With respect to shares of PlusAI Class B common stock, all such shares will convert into Post-Closing Company Class B common stock in connection with the Merger. With respect to shares of PlusAI LV preferred stock, all such shares will convert into PlusAI Class A common stock, which will convert into Post-Closing Company Class C common stock in connection with the Merger. See the section entitled “Description of Securities” for more information regarding the voting rights of the Post-Closing Company Class B common stock and Post-Closing Company Class C common stock. All of the PlusAI preferred stock and PlusAI SAFEs which convert into PlusAI common stock will no longer be outstanding, and each holder of PlusAI preferred stock and PlusAI SAFEs will thereafter cease to have any rights with respect to such PlusAI preferred stock and PlusAI SAFEs, respectively.
Subject to the terms of the Merger Agreement, the value of the aggregate consideration to be paid to PlusAI stockholders and holders of PlusAI SAFEs, vested PlusAI RSUs, vested PlusAI options and vested PlusAI warrants, will be (1) $800,000,000 (the “Equity Value”), which consideration will be paid entirely in shares of Post-Closing Company common stock in an amount equal to $10.00 per share, in addition to (2) the contingent right to receive up to an aggregate of 70,000,000 shares of Post-Closing Company common stock reduced by 7,000,000 shares allocated to the Post-Closing RSU Pool for future issuances resulting in 63,000,000 shares outstanding at the Closing, which will be issued to Eligible PlusAI Equityholders during the Earnout Period, in three tranches consisting of 21,000,000 shares each, in each case that will be issued upon the occurrence of an Earnout Triggering Event during the Earnout
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Period. The price targets for the Earnout Triggering Events will be based on the VWAP of the applicable shares for any 20 trading days within any 180 consecutive trading day period within the Earnout Period.
Each share of PlusAI Class A common stock issued and outstanding immediately prior to the Closing (after giving effect to the Conversion, but other than Excluded Shares and Dissenting Shares), other than shares of PlusAI Class B common stock and shares issued as a result of the conversion of PlusAI Series A-3-X Preferred Stock, PlusAI Series A-4-X Preferred Stock or PlusAI Series B-X Preferred Stock or the exercise of any PlusAI Option granted under the 2021 Plan, will be automatically surrendered and exchanged for the right to receive a number of shares of Post-Closing Company Class A common stock equal to the Exchange Ratio. Each share of PlusAI Class B common stock will be automatically surrendered and exchanged for the right to receive a number of shares of Post-Closing Company Class B common stock equal to the Exchange Ratio. The shares of PlusAI Class A Common Stock issued as a result of the specified preferred stock conversions or 2021 Plan option exercises will be exchanged for Post-Closing Company Class C common stock, in each case based on the Exchange Ratio. Subject to the assumptions described herein, as of the date of this proxy statement/prospectus, we estimate that the Exchange Ratio will be approximately 0.0440 shares of Post-Closing Company common stock for each issued and outstanding share of PlusAI common stock. See the section entitled “Proposal No. 1 — The Business Combination Proposal — General — Structure of the Transactions.”
At the Effective Time, by virtue of the Merger and without any further action on the part of TVA III, Merger Sub, PlusAI or any holder of any securities of TVA III or PlusAI, the following will occur:
For more information regarding the sources and uses of the funds utilized to consummate the business combination, please see the section entitled “Proposal No. 1 — The Business Combination Proposal — Sources and Uses of Funds for the Transactions.”
Exchange and Fractional Shares
Immediately prior to or at the Effective Time, TVA III will deposit, or cause to be deposited, with Continental Stock Transfer & Trust Company (the “Exchange Agent”) evidence in book-entry form of shares of Post-Closing Company common stock representing the number of shares of Post-Closing Company common stock sufficient to deliver the Merger Consideration (as defined in the Merger Agreement).
At or prior to the Effective Time, TVA III will instruct the Exchange Agent to issue to each PlusAI stockholder the portion of the Merger Consideration to which that PlusAI stockholder is entitled to at the Closing pursuant to the Merger Agreement at or promptly after the Closing.
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Notwithstanding anything to the contrary as described in the Merger Agreement, no fraction of a share of TVA III Class A Common Stock will be issued by virtue of the Merger Agreement or the Transactions, and each PlusAI stockholder that would otherwise be entitled to a fraction of a share of TVA III Class A Common Stock (after aggregating all TVA III Class A Ordinary Shares to which such PlusAI stockholder otherwise would be entitled) will instead have the number of TVA III Class A Ordinary Shares issued to such PlusAI stockholder rounded up or down to the nearest whole share of TVA III Class A Common Stock (with 0.5 of a share or greater rounded up), as applicable.
Treatment of PlusAI Options, PlusAI RSUs and PlusAI Warrants
Except as the parties may otherwise mutually agree, at the Effective Time, each outstanding and unexercised PlusAI option (whether or not vested) will be assumed by the Post-Closing Company and become an option to purchase shares of Post-Closing Company common stock, on the same terms and conditions (including applicable vesting, exercise and expiration provisions) as applied to each such option immediately prior to the Effective Time, except that (1) the number of shares of Post-Closing Company common stock subject to such option will equal (a) the number of shares of PlusAI common stock that were subject to such option immediately prior to the Effective Time multiplied by (b) the Exchange Ratio, rounded down to the nearest whole share, and (2) the per share exercise price will equal (a) the exercise price per share of PlusAI common stock at which such option was exercisable immediately prior to the Effective Time, divided by (b) the Exchange Ratio, rounded up to the nearest whole cent. All incentive stock options will be adjusted in accordance with the requirements of Section 424 of the Code and will be adjusted in a manner that complies with or is exempt from Section 409A of the Code.
At the Effective Time, each outstanding PlusAI RSU that is unvested as of immediately prior to the Effective Time will be assumed by the Post-Closing Company and converted into the right to receive restricted stock units subject to shares of Post-Closing Company common stock, on the same terms and conditions (including applicable vesting, settlement and termination provisions) as applied to each such PlusAI RSU immediately prior to the Effective Time, except that the number of shares of Post-Closing Company common stock subject to such PlusAI RSU will equal (1) the number of shares of PlusAI common stock that were subject to such PlusAI RSU immediately prior to the Effective Time multiplied by (2) the Exchange Ratio, rounded down to the nearest whole share. All PlusAI RSUs will be adjusted in a manner that complies with or is exempt from Section 409A of the Code.
At the Effective Time, each PlusAI warrant will be treated in accordance with the terms of such PlusAI warrant and the Merger Agreement and become a Post-Closing Company assumed warrant.
Earnout
Up to an aggregate of 70,000,000 shares of Post-Closing Company common stock reduced by 7,000,000 shares allocated to the Post-Closing RSU Pool for future issuances resulting in 63,000,000 shares outstanding at the Closing will be issued to Eligible PlusAI Equityholders upon the occurrence of an Earnout Triggering Event during the Earnout Period (such shares, the “Earnout Shares”), in three tranches consisting of (1) 21,000,000 shares, (2) 21,000,000 shares and (3) 21,000,000 shares, in each case subject to adjustments and the applicable price target being achieved based on the VWAP for any 20 trading days within any 180 consecutive trading day period during the Earnout Period. Please see the section entitled “Proposal No. 1 — The Business Combination Proposal — General — Earnout.”
Certain Agreements Related to the Business Combination
Merger Agreement
The summary of the material provisions of the Merger Agreement set forth below and elsewhere in this proxy statement/prospectus is qualified in its entirety by reference to the Merger Agreement, a copy of which is attached to this proxy statement/prospectus as Annex A and which is incorporated by reference in this proxy statement/prospectus. All TVA III shareholders and PlusAI stockholders are encouraged to read the Merger Agreement in its entirety for a more complete description of the terms and conditions of the business combination.
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Closing and Effective Time of the Transactions
The Closing will take place promptly following the satisfaction or waiver of the conditions described below under the section entitled “Summary of the Proxy Statement/Prospectus — Certain Agreements Related to the Business Combination — Conditions to Closing General Conditions,” unless TVA III and PlusAI agree in writing to another time or unless the Merger Agreement is terminated. The Transactions are expected to be consummated promptly after the approval by TVA III shareholders of the proposals voted on at the extraordinary general meeting, as described in this proxy statement/prospectus.
The deadline by which TVA III must complete a business combination transaction is October 24, 2026. TVA III has scheduled an extraordinary general meeting to be held on October 19, 2026 for its shareholders to vote on, among other things, a proposal to amend the TVA III Articles to extend such deadline to July 24, 2027 (the “SPAC Extension”).
Conditions to Closing General Conditions
Consummation of the Transactions is conditioned on the approval of the condition precedent proposals (as defined above) by TVA III shareholders described in this proxy statement/prospectus, and the adoption and approval of the Merger Agreement and the approval of the Merger and the other Transactions by the requisite consent of PlusAI’s stockholders.
In addition, the consummation of the Transactions contemplated by the Merger Agreement is conditioned upon, among other things:
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TVA III’s Conditions to Closing
The obligations of TVA III and Merger Sub to consummate the Transactions contemplated by the Merger Agreement also are conditioned upon, among other things:
PlusAI’s Conditions to Closing
The obligations of PlusAI to consummate the Transactions also are conditioned upon, among other things:
Waiver
Any party to the Merger Agreement may, at any time prior to the Closing, by action taken by its board of directors or equivalent governing body, or officers thereunto duly authorized, waive in writing any of its rights or conditions in its favor under the Merger Agreement. Notwithstanding the foregoing, pursuant to the TVA III Articles, TVA III cannot consummate the business combination if it has less than $5,000,001 of net tangible assets remaining after the Closing.
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Termination
The Merger Agreement may be terminated and the Transactions abandoned, but not later than the Closing, as follows:
Effect of Termination
In the event of proper termination by either TVA III or PlusAI, the Merger Agreement will become void and have no effect (other than with respect to certain surviving provisions specified in the Merger Agreement), without any liability on the part of any party thereto or its respective affiliates, officers, directors, employees, representatives or shareholders, other than liability of (1) any party thereto for any intentional and willful breach of the Merger Agreement by such party occurring prior to such termination or (2) any party to any other Transaction Agreement, solely to the extent set forth under the express terms of such other Transaction Agreement.
Fees and Expenses
All fees and expenses incurred in connection with the Merger Agreement and Transactions, except for those fees associated with the filing to obtain clearance pursuant to the HSR Act, will be paid by the party incurring such expenses whether or not the Transactions shall be consummated; provided that if the Closing occurs, TVA III will bear and pay at or promptly after the Closing:
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provided that all costs of investigation and all defense and attorneys’ and other professional fees and settlement payments related to stockholder actions initiated by or on behalf of any stockholders of PlusAI, whether borne by TVA III or PlusAI, shall be fully payable by the Post-Closing Company if the closing of the Transactions occurs and not subject to any limitation or cap. All fees and expenses in connection with filing to obtain clearance pursuant to the HSR Act shall be paid by TVA III.
Sponsor Support Agreement
Concurrently with the execution of the Merger Agreement, TVA III entered into the Sponsor Support Agreement with the Sponsor, TVA III, PlusAI and the Insiders. The following summary of material provisions of the Sponsor Support Agreement is qualified by reference to the complete text of the Sponsor Support Agreement, a copy of which is attached to the accompanying proxy statement/prospectus as Exhibit C to Annex A. All shareholders are encouraged to read the Sponsor Support Agreement in its entirety for a more complete description of the terms and conditions of the Sponsor Support Agreement.
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The Sponsor Support Agreement does not provide for vesting and forfeiture of any TVA III Founder Shares based on the amount of the Available Closing SPAC Cash or the achievement of certain stock price performance after the Closing.
Amended and Restated Registration Rights Agreement
Effective upon the Closing, the Existing Registration Rights Agreement by and between TVA III, the Sponsor, CCM, and Clear Street LLC (“Clear Street,” and together with the Sponsor and CCM, the “Existing Holders”), dated April 22, 2025, has been amended and restated in its entirety as the A&R Registration Rights Agreement, with the Sponsor Affiliate and certain persons and entities receiving Post-Closing Company common stock in connection with the Mergers (together with the Existing Holders, the “Holders”) being added as parties to the A&R Registration Rights Agreement, a copy of which is filed as Exhibit E to the Merger Agreement attached as Annex A to this proxy statement/prospectus. The following summary of material provisions of the A&R Registration Rights Agreement is qualified by reference to the complete text of the A&R Registration Rights Agreement. All shareholders are encouraged to read the A&R Registration Rights Agreement in its entirety for a more complete description of its terms and conditions.
Pursuant to the A&R Registration Rights Agreement, TVA III will use commercially reasonable efforts to (1) file with the SEC, at TVA III’s sole cost and expense, a registration statement registering the resale of certain securities held by or issuable to the Holders within 10 business days after the Closing (the “Resale Registration Statement”) and (2) cause the Resale Registration Statement to become effective as soon as reasonably practicable after the filing thereof, but in no event later than 45 business days after the Closing Date. In certain circumstances, the Holders may demand in the aggregate up to three underwritten offerings and will be entitled to customary piggyback registration rights.
Pursuant to the A&R Registration Rights Agreement, subject to certain exceptions, the Holders have agreed not to transfer their respective shares for a period of 360 days following the Closing Date (the “Lock-Up Period”). Subject to certain exceptions to the termination of transfer restrictions with respect to shares of Post-Closing Company common stock issued as Earnout Shares (the “Lock-Up Earnout Shares”) or held directly or indirectly by certain founder executives of PlusAI (the “Plus Founder Shares”), such transfer restrictions terminate (1) as to 50% of a Holder’s shares upon the earlier of 180 days after the Closing (the “Reduced Lock-Up Period”) and the date on which the VWAP of the Post-Closing Company Class A common stock equals or exceeds $12.50 per share during any 20 trading days within any 180 consecutive trading day period following the Closing, and (2) other than Lock-Up Earnout Shares and Plus Founder Shares, with respect to all of a Holder’s shares upon the date on which the VWAP of the Post-Closing Company Class A common stock equals or exceeds $15.00 per share during any 20 trading days within any 180 consecutive trading day period following the Closing. Furthermore, the Sponsor is not subject to certain other transfer restrictions as described in the A&R Registration Rights Agreement, and, with respect to all shares of Post-Closing Company Class A common stock into which the TVA III Class B Ordinary Shares convert upon the Domestication, the transfer restrictions will terminate 120 days after the Closing.
Similar transfer restrictions will apply to the shares of Post-Closing Company common stock issued to former securityholders of PlusAI in connection with the Mergers pursuant to the Proposed Bylaws.
Company Voting and Support Agreements
Concurrently with the execution of the Merger Agreement, certain stockholders of PlusAI entered into the Company Voting and Support Agreements with TVA III and PlusAI, in their capacity as such. The following is a summary of the material provisions of the Company Voting and Support Agreements and is qualified by reference to the complete text of the Company Voting and Support Agreements, a copy of which is attached to the accompanying proxy statement/prospectus as Exhibit D to Annex A.
Under the terms of the Company Voting and Support Agreements, the stockholders of PlusAI party thereto have agreed, among other things, to deliver written consents to adopt the Merger Agreement and approve the Transactions, and to vote or consent in opposition to alternative transactions and other matters that could reasonably be expected to materially delay or impair the ability of PlusAI to consummate the Transactions. The stockholders of PlusAI party to the Company Voting and Support Agreements hold sufficient shares of stock of PlusAI to effect the Company
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Stockholder Approval. In addition, each PlusAI stockholder party to a Company Voting and Support Agreement has agreed to refrain from exercising any dissenters’ rights under applicable law.
The Company Voting and Support Agreements also contain certain restrictions on the transfer of the shares of PlusAI held by the stockholders party thereto prior to the Closing, subject to certain exceptions.
Convertible Note and Warrant Subscription Agreements
Concurrently with the execution and delivery of the Merger Agreement, TVA III and PlusAI entered into subscription agreements (the “Convertible Note and Warrant Subscription Agreements”) with certain accredited investors and qualified institutional buyers, including the Sponsor Affiliate (collectively, the “Note Investors”), pursuant to which TVA III agreed to issue and sell, in a private placement to close following the Domestication and substantially concurrently with the Closing, (i) Senior Convertible PIK Notes (the “Convertible Notes”) in an aggregate original principal amount of $63,888,888, issued at a 10% original issue discount resulting in net cash proceeds of $57,500,000, and (ii) warrants to purchase shares of Post-Closing Company Class A common stock (the “PIPE Warrants”) covering an aggregate of 5,324,074 shares, with the number of shares issuable upon exercise equal to 100% of the original principal amount of the applicable Convertible Note divided by $12.00. The Convertible Notes will be senior unsecured obligations of the Post-Closing Company, guaranteed by PlusAI and its subsidiaries (the “Guarantors”) pursuant to a Global Guaranty Agreement (the “Guaranty”). The Sponsor Affiliate has subscribed for approximately $27,777,778 in original principal amount of Convertible Notes at a 10% original issue discount resulting in net cash proceeds of $25,000,000, and a warrant to purchase 2,314,815 shares of Post-Closing Company Class A common stock.
The Convertible Note and Warrant Subscription Agreements contain customary covenants and closing conditions, including approval for listing of the shares underlying the Convertible Notes and PIPE Warrants, Available Closing SPAC Cash of at least $40,000,000 unless waived by TVA III and PlusAI (provided that failure to meet that condition does not excuse an investor’s funding obligation), and the absence of any amendment, modification or waiver of the Merger Agreement reasonably expected to materially and adversely affect a Note Investor’s expected economic benefits without that Note Investor’s consent. They also contain a standstill provision that, subject to certain exempt issuances, applies until six months after the effective date of the Resale Registration Statement. The Available Closing SPAC Cash closing condition is also subject to the Minimum Proceeds Side Letter.
The Convertible Notes will bear interest at the Post-Closing Company’s election by written notice delivered at least five business days before the applicable interest payment date as entirely cash interest at 8.00% per annum, entirely as “PIK” interest that is to be capitalized and added to the outstanding principal amount at 10.00% per annum, or a combination of cash and PIK interest. Cash interest is payable monthly in arrears. If the Post-Closing Company does not timely make an election, interest for that period will be entirely PIK interest. The applicable rates increase by 2.00% per annum during an event of default, and each applicable rate increases by 1.00% per annum if the Post-Closing Company fails to maintain unrestricted cash and cash equivalents of at least $10,000,000 as of the last business day of a calendar month. The Convertible Notes will mature on the fifth anniversary of the Closing Date.
At any time on or after the issuance of the Convertible Notes and before the close of business on the business day immediately preceding the Maturity Date, each holder may convert all or any portion of a Convertible Note, together with accrued and unpaid cash interest, into shares of Post-Closing Company Class A common stock (with partial conversions generally subject to a minimum principal amount of $100,000) at a conversion price equal to 95% of the lowest daily VWAP during the five consecutive trading days preceding conversion, subject to a $5.00 per-share floor. If a holder converts before the third anniversary of the Closing Date, such holder will receive from the Post-Closing Company an interest make-whole amount equal to the present value, discounted at the then-applicable U.S. Treasury rate plus 50 basis points, of the remaining scheduled cash interest payments that would have been payable at 8.00% per annum through the third anniversary, payable in cash or, at Post-Closing Company’s election and subject to the Convertible Note, shares of Post-Closing Company Class A common stock. Upon a Make-Whole Fundamental Change, a holder converting during the specified period will be entitled to an increased conversion rate based on a conversion price equal to 95% of the lowest of the transaction price and the lowest daily VWAPs during the applicable five-trading-day periods before the effective date and announcement of the Make-Whole Fundamental Change, subject to the conversion price floor. The conversion price and conversion price floor are also subject to anti-dilution adjustments, including a full-ratchet reduction of the floor for certain qualifying issuances below the then-current
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floor. If the issuance of shares upon conversion would exceed applicable exchange-cap limitations before required stockholder approval, the Post-Closing Company shall either pay the entire amount in cash or deliver to the holder shares up to the permitted amount with the balance paid in cash, at the holder's election.
Following effectiveness of the Resale Registration Statement, the Post-Closing Company may redeem the Convertible Notes at 130% of accrued value, as of the date of determination, calculated as the sum of (i) the outstanding principal amount of the Convertible Notes, plus (ii) all accrued and unpaid cash interest as of such date, plus (iii) all other amounts then due and payable under the Convertible Notes (the “Accrued Value”) before the second anniversary of the Closing Date and 120% of Accrued Value thereafter, subject to the terms of the Convertible Notes. Holders may require repurchase of all or any portion of a Convertible Note for cash at 130% of Accrued Value before the second anniversary of the closing of the Convertible Notes and 120% of Accrued Value on or after the second anniversary, including on or after maturity, upon a Fundamental Change (as such term is defined in the Convertible Notes) and may put the Convertible Notes for cash at 100% of its Accrued Value during the period beginning 30 calendar days before the Maturity Date and ending on the fifth business day before the Maturity Date. Unless previously converted, redeemed or repurchased, any portion not so put will automatically be settled at maturity in shares of Post-Closing Company Class A common stock at a maturity conversion price equal to the conversion price then in effect, subject to applicable stockholder approval and exchange-cap limitations, with cash payable for any portion that cannot be settled in shares. The Convertible Notes are direct, senior unsecured obligations, ranking senior in right of payment to subordinated and other unsecured indebtedness except as permitted by the Convertible Note; in a liquidation, the holder is entitled to receive the Accrued Value before distributions on subordinated debt or equity. The Convertible Notes contain affirmative and negative covenants and events of default relating to payment, conversion or settlement, covenants, representations, cross-defaults, bankruptcy, judgments, delisting, share reservations, minimum liquidity and guaranty defaults.
Each PIPE Warrant will be exercisable immediately upon issuance at an initial exercise price of $12.00 per share and will expire five years after issuance. The PIPE Warrants may be exercised for cash or, if available, on a net-issuance basis and will be automatically exercised on a net-issuance basis at expiration. The exercise price will reset every nine months, if lower, to the greater of the applicable lowest daily VWAP during the preceding five trading days and the $5.00 per-share floor, with a corresponding adjustment to the number of underlying shares. The form of Warrant Certificate for the PIPE Warrants is the same form used for the PIPE Warrants.
Under the Guaranty, PlusAI and each of its subsidiaries will jointly and severally guarantee the full and unconditional payment and performance of the Convertible Notes. Any entity that becomes a subsidiary after issuance must join the Guaranty within 15 business days. The Convertible Notes and guaranty obligations will not be secured by any lien or security interest in the assets of PlusAI or any Guarantor.
PIPE Subscription Agreements
Concurrently with the execution and delivery of the Merger Agreement, TVA III and PlusAI entered into the PIPE Subscription Agreements with certain accredited investors and qualified institutional buyers (collectively, the “PIPE Investors”), pursuant to which TVA III agreed to issue and sell, in a private placement to close following the Domestication and substantially concurrently with the Closing, 400,000 shares of Post-Closing Company Class A common stock and PIPE Warrants covering 400,000 shares of Post-Closing Company Class A common stock for an aggregate purchase price of approximately $4.0 million (the “PIPE Investment”). The PIPE Subscription Agreements contain a standstill provision on the same terms as provided under the Convertible Note and Warrant Subscription Agreements.
PIPE Side Letters
Concurrently with the execution and delivery of the PIPE Subscription Agreements and the Convertible Note and Warrant Subscription Agreements, TVA III and PlusAI entered into side letter agreements (collectively, the “PIPE Side Letters”) with each of the Note Investors and PIPE Investors that supplement the applicable subscription agreements and provide such investors with modified lock-up terms and other contractual rights. The PIPE Side Letters consist of (i) letters entered into with the Note Investors and PIPE Investors, other than the Sponsor Affiliate (collectively, the “Investor Side Letters”), (ii) a letter entered into with the Sponsor Affiliate (the “Sponsor Affiliate Side Letter”) and (iii) a letter entered into with an existing investor of PlusAI (the “Minimum Proceeds Side Letter”).
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Pursuant to the Investor Side Letters, if the Closing occurs and the investor fulfills its subscription obligations, (i) shares of Post-Closing Company Class A common stock acquired upon the conversion of the Convertible Notes or pursuant to the PIPE Subscription Agreements, the PIPE Warrants and the shares of Post-Closing Company Class A common stock issuable upon exercise of the PIPE Warrants will not be subject to lock-up restrictions set forth in the Proposed Bylaws and the A&R Registration Rights Agreement (the “lock-up restrictions”); (ii) a number of Lockup Shares (as defined in the Proposed Bylaws) held by such investor equal to 3.5 multiplied by such investor’s subscription amount divided by $10.00 will be released from lock-up restrictions on the date that is 120 days after the Closing; (iii) upon the earlier of (A) 180 days following the Closing or (B) the occurrence of Lockup Release Trigger Event I, up to 50% of such investor’s Lockup Shares will be released from such lock-up restrictions (exclusive of shares previously released); and (iv) upon the earlier of (A) expiration of the Lock-Up Period or (B) the occurrence of Lockup Release Trigger Event II, the lock-up restrictions will terminate as to all shares of Post-Closing Company Class A common stock or PIPE Warrants held by such investor. In the event that the Closing fails to occur for any reason, TVA III shall reimburse such investor in cash for the full subscription amount paid, within one business day following such investor’s written request. Further, TVA III shall not waive, release, amend, repeal, suspend or terminate the lock-up restrictions applicable to other holders of Lockup Shares without the prior written consent of the PIPE Investors.
Pursuant to the Sponsor Affiliate Side Letter, if the Closing occurs and the Sponsor Affiliate fulfills its subscription obligations, (i) shares of Post-Closing Company Class A common stock acquired upon the conversion of the Convertible Notes or pursuant to the PIPE Subscription Agreements, the PIPE Warrants and the Shares of Post-Closing Company Class A common stock issuable upon exercise of the PIPE Warrants will not be subject to lock-up restrictions; (ii) upon the occurrence of Lockup Release Trigger Event I, up to 50% of the Sponsor Affiliate’s Lockup Shares will be released from lock-up restrictions; and (iii) the lock-up restrictions will terminate as to all shares of Post-Closing Company Class A common stock or Warrants held by the Sponsor Affiliate upon the occurrence of Lockup Release Trigger Event II. Further, TVA III shall not waive, release, amend, repeal, suspend or terminate the lock-up restrictions applicable to other holders of Lockup Shares without the prior written consent of the Sponsor Affiliate.
Pursuant to the Minimum Proceeds Side Letter, as long as the investor party to the Minimum Proceeds Side Letter has performed its subscription obligations, PlusAI may not waive, amend (or consent to the waiver or amendment of) the minimum $40,000,000 Available Closing SPAC Cash condition set forth in the Merger Agreement without the prior written consent of such investor.
Share Issuance Agreements
Concurrently with the execution and delivery of the PIPE Subscription Agreements and the Convertible Note and Warrant Subscription Agreements, PlusAI entered into share issuance agreements (collectively, the “Share Issuance Agreements”) with certain of the Note Investors that are existing investors of PlusAI and each of the PIPE Investors, pursuant to which, contingent on such Note Investor’s or PIPE Investor’s closing their Convertible Notes or PIPE Investment, PlusAI will issue to such Note Investors and PIPE Investors an aggregate of 112,343,523 shares of PlusAI Class A common stock immediately prior to the First Effective Time for no additional consideration. Pursuant to the Merger Agreement, such shares of PlusAI Class A common stock will be automatically surrendered and exchanged for the right to receive a number of shares of Post-Closing Company Class A common stock equal to the Exchange Ratio.
Forward Purchase Agreement
On August 27, 2026, TVA III and the Sponsor Affiliate entered into a Confirmation of an OTC Equity Prepaid Forward Transaction, dated as of August 27, 2026 (the “Forward Purchase Agreement”), pursuant to which TVA III agreed to pay to the Sponsor Affiliate a prepayment amount equal to the product of up to 1,050,000 TVA III Class A Ordinary Shares (the “FPA Shares”) multiplied by the applicable per-share redemption price (the “Prepayment Amount”). TVA III is expected to pay the Prepayment Amount one business day following the Closing, and the Forward Purchase Agreement matures 35 days after the Closing. Prior to maturity, the Sponsor Affiliate may sell FPA Shares to third parties at a price of at least $12.00 per share and pay TVA III an early termination obligation equal to the number of shares sold multiplied by the redemption price, reducing the number of FPA Shares to be returned to TVA III at maturity. No FPA Shares will be delivered to TVA III prior to maturity. Upon maturity, in exchange for
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the return of any remaining FPA Shares to TVA III, TVA III will pay the Sponsor Affiliate a settlement amount equal to the number of remaining FPA Shares multiplied by the redemption price, which amount will be fully offset by the Prepayment Amount, resulting in no additional cash payment at maturity. If the Merger Agreement is terminated before the Closing, the Forward Purchase Agreement will terminate without amounts or other obligations owed by either party. The Sponsor Affiliate waived redemption rights with respect to the FPA Shares during the term of the Forward Purchase Agreement.
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Incentive Plan and ESPP
Incentive Plan
The TVA III Board will approve the Incentive Plan, subject to the approval of the TVA III shareholders. The Incentive Plan will initially reserve for issuance 17,765,000 shares of Post-Closing Company Class A common stock, subject to certain adjustments and an evergreen provision. The purposes of the Incentive Plan are to attract and retain the best available personnel for positions of substantial responsibility with the Post-Closing Company or any parent or subsidiary of the Post-Closing Company; to provide additional incentive to eligible employees, directors, and consultants; and to promote the success of the Post-Closing Company’s business. A copy of the Incentive Plan is included as Annex D to this proxy statement/prospectus. See the section entitled “Proposal No. 6 — The Incentive Plan Proposal.”
ESPP
The TVA III Board will approve the ESPP, subject to the approval of the TVA III shareholders. The ESPP will initially reserve for issuance 2,153,000 shares of Post-Closing Company Class A common stock, subject to certain adjustments and an evergreen provision. The purpose of the ESPP is to provide eligible employees of the Post-Closing Company and its participating subsidiaries with an opportunity to purchase shares of Post-Closing Company Class A common stock through accumulated contributions. A copy of the ESPP is included as Annex E to this proxy statement/prospectus. See the section entitled “Proposal No. 7 — The ESPP Proposal.”
Impact of the Business Combination on Our Public Float
As of the date of this proxy statement/prospectus, there are 30,000,000 TVA III Ordinary Shares issued and outstanding, which includes 22,500,000 TVA III Class A Ordinary Shares and 7,500,000 TVA III Class B Ordinary Shares. Therefore, as of the date of this proxy statement/prospectus (without giving effect to the Transactions) TVA III’s fully diluted share capital would be 22,500,000 TVA III Class A Ordinary Shares equivalents.
The following table illustrates varying ownership levels and voting power in the Post-Closing Company immediately following the consummation of the business combination, excluding the dilutive effect of the potential issuance of any Earnout Shares, the issuance of all shares of Post-Closing Company Class A common stock upon exercise of outstanding PlusAI options assumed by the Post-Closing Company, the potential issuance of any shares of Post-Closing Company common stock upon the release of assumed unvested PlusAI RSUs, and the potential issuance of shares of Post-Closing Company common stock initially reserved for issuance under the Incentive Plan and the ESPP Plan, under the following redemption scenarios:
|
|
No Redemption |
|
|
25% Redemption |
|
|
50% Redemption |
|
|
Maximum Redemption |
|
||||||||||||||||||||||||||||||||||||
|
|
Shares |
|
|
% Outstanding |
|
|
% |
|
|
Shares |
|
|
% Outstanding |
|
|
% |
|
|
Shares |
|
|
% Outstanding |
|
|
% |
|
|
Shares |
|
|
% Outstanding |
|
|
% |
|
||||||||||||
TVA Public Stockholders (1) |
|
|
22,500,000 |
|
|
|
20.9 |
% |
|
|
6.1 |
% |
|
|
16,875,000 |
|
|
|
16.5 |
% |
|
|
4.6 |
% |
|
|
11,250,000 |
|
|
|
11.7 |
% |
|
|
3.1 |
% |
|
|
1,050,000 |
|
|
|
1.3 |
% |
|
|
0.3 |
% |
Sponsor and affiliates (2) |
|
|
7,500,000 |
|
|
|
7.0 |
% |
|
|
2.0 |
% |
|
|
7,500,000 |
|
|
|
7.4 |
% |
|
|
2.1 |
% |
|
|
7,500,000 |
|
|
|
7.8 |
% |
|
|
2.1 |
% |
|
|
7,500,000 |
|
|
|
8.7 |
% |
|
|
2.1 |
% |
PlusAI Stockholders (3) |
|
|
77,550,256 |
|
|
|
72.0 |
% |
|
|
91.9 |
% |
|
|
77,550,256 |
|
|
|
76.0 |
% |
|
|
93.3 |
% |
|
|
77,550,256 |
|
|
|
80.4 |
% |
|
|
94.8 |
% |
|
|
77,550,256 |
|
|
|
89.9 |
% |
|
|
97.6 |
% |
CCM (4) |
|
|
100,000 |
|
|
|
0.1 |
% |
|
|
0.0 |
% |
|
|
100,000 |
|
|
|
0.1 |
% |
|
|
0.0 |
% |
|
|
100,000 |
|
|
|
0.1 |
% |
|
|
0.0 |
% |
|
|
100,000 |
|
|
|
0.1 |
% |
|
|
0.0 |
% |
Total Common Stock Outstanding |
|
|
107,650,256 |
|
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
102,025,256 |
|
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
96,400,256 |
|
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
86,200,256 |
|
|
|
100.0 |
% |
|
|
100.0 |
% |
15
Table of Contents
The following table illustrates varying ownership levels in the Post-Closing Company immediately following the consummation of the business combination in the No Redemption Scenario, 25% Redemption Scenario, 50% Redemption Scenario, and Maximum Redemption Scenario, in each case, includes the dilutive effect of the issuance of all Earnout Shares, the issuance of all shares of Post-Closing Company Class A common stock upon exercise of outstanding PlusAI options assumed by the Post-Closing Company and the issuance of all shares of Post-Closing Company Class A common stock initially reserved for issuance under the Incentive Plan and the ESPP but excludes any shares of Post-Closing Company Class A common stock or issuable pursuant to securities convertible into shares of Post-Closing Company Class A common stock that may be issued pursuant to one or more Other PIPE Investments or Strategic Commercial Transactions that may be consummated prior to or substantially concurrently with the Closing, except for the issuance of the TRATON Warrants. As of the date of this proxy statement/prospectus, no binding agreement has been executed with respect to any Other PIPE Investment or additional Strategic Commercial Transaction and there can be no assurances that any Other PIPE Investment or additional Strategic Commercial Transaction shall be consummated prior to Closing.
|
|
No Redemption Scenario |
|
|
25% Redemption Scenario |
|
|
50% Redemption Scenario |
|
|
Maximum Redemption Scenario |
|
||||
TVA public stockholders |
|
|
22,500,000 |
|
|
|
16,875,000 |
|
|
|
11,250,000 |
|
|
|
1,050,000 |
|
Sponsor |
|
|
7,500,000 |
|
|
|
7,500,000 |
|
|
|
7,500,000 |
|
|
|
7,500,000 |
|
PlusAI stockholders |
|
|
77,550,657 |
|
|
|
77,550,657 |
|
|
|
77,550,657 |
|
|
|
77,550,657 |
|
CCM |
|
|
100,000 |
|
|
|
100,000 |
|
|
|
100,000 |
|
|
|
100,000 |
|
Earnout shares |
|
|
63,000,000 |
|
|
|
63,000,000 |
|
|
|
63,000,000 |
|
|
|
63,000,000 |
|
TVA III Public warrants |
|
|
11,250,000 |
|
|
|
11,250,000 |
|
|
|
11,250,000 |
|
|
|
11,250,000 |
|
TVA III Private Placement warrants |
|
|
7,568,750 |
|
|
|
7,568,750 |
|
|
|
7,568,750 |
|
|
|
7,568,750 |
|
PlusAI warrants |
|
|
18,510,906 |
|
|
|
18,510,906 |
|
|
|
18,510,906 |
|
|
|
18,510,906 |
|
PIPE warrants |
|
|
5,724,068 |
|
|
|
5,724,068 |
|
|
|
5,724,068 |
|
|
|
5,724,068 |
|
Convertible notes |
|
|
6,404,367 |
|
|
|
6,404,367 |
|
|
|
6,404,367 |
|
|
|
6,404,367 |
|
PubCo Options |
|
|
2,389,994 |
|
|
|
2,389,994 |
|
|
|
2,389,994 |
|
|
|
2,389,994 |
|
PubCo RSUs |
|
|
1,978,916 |
|
|
|
1,978,916 |
|
|
|
1,978,916 |
|
|
|
1,978,916 |
|
Total |
|
|
224,477,658 |
|
|
|
218,852,658 |
|
|
|
213,227,658 |
|
|
|
203,027,658 |
|
16
Table of Contents
See the sections entitled “Proposal No. 1 — The Business Combination Proposal — General — Impact of the Business Combination on Our Public Float” and “Unaudited Pro Forma Condensed Combined Financial Information” for more information.
TVA III Deferred Underwriting Fees
$9.0 million of the TVA III IPO underwriting fee was deferred and payable to the underwriters in the TVA III IPO upon completion of an initial business combination. Such deferred underwriting fees will be based on and paid out of funds remaining in the trust account after redemptions of TVA III public shares upon the closing of the Transactions, subject to the terms of the TVA III IPO Underwriting Agreement.
PlusAI Advisory Agreements
PlusAI and CCM have entered into an engagement letter under which CCM will provide financial advisory and capital markets advisory services to PlusAI in connection with the Transactions. Pursuant to the engagement letter, CCM will receive (i) a cash advisory fee of $2 million and $1 million worth of common shares or equivalent equity of the Post-Closing Company and (ii) a transaction fee in connection with any offering of securities solely to the extent such offering is undertaken in connection with the Transactions, in an amount equal to (A) 5.0% of the gross proceeds raised in connection with the Convertible Notes, the PIPE Investment and any Other PIPE Investment and received by PlusAI or TVA III prior to or simultaneous with and upon the closing of such offering; provided, however, that such portion of the fee shall be offset by any deferred underwriting commission received by CCM with respect to the TVA III IPO (the “Advisory Fee”), in each case, payable upon the closing of the Transactions. In addition, PlusAI has agreed to reimburse CCM for up to $50,000 of reasonable and documented out-of-pocket expenses. CCM shall be eligible for an additional incentive fee of up to 125,000 shares of the Post-Closing Company, payable solely at the discretion of PlusAI.
Matters Being Voted On at the Extraordinary General Meeting
TVA III shareholders will be asked to consider and vote on the following proposals at the extraordinary general meeting:
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Table of Contents
Date, Time and Place of Extraordinary General Meeting
The extraordinary general meeting will be held via live webcast at a.m. Eastern Time, on , 2026. The extraordinary general meeting can be accessed by visiting https://www.cstproxy.com/texasventuresacquisitioniii/bc2026, where you will be able to listen to the meeting live, ask questions and vote during the meeting. For the purposes of Cayman Islands law and the TVA III MAA, the physical location of the extraordinary general meeting will be DLA Piper LLP (US) at 3203 Hanover Street, Suite 100, Palo Alto, California 94304.
At the extraordinary general meeting, TVA III shareholders will be asked to consider and vote upon the business combination proposal, domestication proposal, organizational documents proposal, advisory organizational documents proposal, stock issuance proposal, incentive plan proposal, ESPP proposal, director election proposal and, if necessary, the adjournment proposal to permit further solicitation and vote of proxies if TVA III is not able to consummate the business combination.
Voting Power; TVA III Record Date
TVA III shareholders will be entitled to vote or direct votes to be cast at the extraordinary general meeting if they owned TVA III Ordinary Shares at the close of business on the TVA III Record Date on , 2026, which is the record date for the extraordinary general meeting. TVA III shareholders will have one vote for each share of TVA III Ordinary Shares owned at the close of business on the TVA III Record Date. If your TVA III Ordinary Shares are held in “street name” or are in a margin or similar account, you should contact your broker to ensure that votes related to the shares you beneficially own are properly counted. On the TVA III Record Date, there were 30,000,000 TVA III Ordinary Shares outstanding, of which 22,500,000 were TVA III Class A Ordinary Shares and 7,500,000 were TVA III Class B Ordinary Shares.
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Table of Contents
Quorum and Vote of TVA III shareholders
A quorum of TVA III shareholders is necessary to hold a valid meeting. A quorum for such meeting will consist of the holders present by attendance via the virtual meeting website, in person or by proxy of shares of TVA III representing at least one-third (1/3) of the paid up voting share capital of TVA III entitled to vote at such meeting.
Proxies that are marked “abstain” will be treated as shares of TVA III public shares present for purposes of determining the presence of a quorum on all matters. Broker non-votes will be counted for the purposes of determining the existence of a quorum, but will not be considered votes cast at the extraordinary general meeting.
The Sponsor owns of record and is entitled to vote 25% of the outstanding TVA III Ordinary Shares (4.7% of the outstanding TVA III Class A Ordinary Shares and 100.0% of the outstanding TVA III Class B Ordinary Shares) as of the TVA III Record Date. Such shares, as well as any shares of TVA III public shares acquired in the aftermarket by the Sponsor, will be voted in favor of the proposals presented at the extraordinary general meeting.
The proposals presented at the extraordinary general meeting will require the following votes:
The business combination proposal, the domestication proposal, the organizational documents proposal, the stock issuance proposal, the incentive plan proposal, the ESPP proposal and the director election proposal are referred to as the “condition precedent proposals.” Each condition precedent proposal is conditioned on the approval of each of the condition precedent proposals. Therefore, if any of the condition precedent proposals are not approved at the extraordinary general meeting (or any adjournment or postponement thereof), none of the other condition precedent proposals will have any effect, even if approved by the requisite holders of TVA III Ordinary Shares. It is important for you to note that in the event that any of those proposals are not approved, then unless certain conditions in the
19
Table of Contents
Merger Agreement are waived by the applicable parties to the Merger Agreement, the Merger Agreement may be terminated and the business combination may not be consummated.
Redemption Rights
Pursuant to the TVA III MAA, any
Notwithstanding the foregoing, a holder of TVA III public shares, together with any affiliate of such holder or any other person with whom such holder is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Exchange Act), will be restricted from seeking redemption rights with respect to more than 15% of the TVA III public shares.
Accordingly, all TVA III public shares in excess of 15% held by a TVA III public shareholder, together with any affiliate of such holder or any other person with whom such holder is acting in concert or was a “group,” will not be redeemed for cash.
The business combination will not be consummated if TVA III has net tangible assets of less than $5,000,001 after taking into account holders of TVA III public shares that have properly demanded redemption of their shares for cash on the date that is two business days prior to the date of the extraordinary general meeting. However, because Sponsor Affiliate holds 1,050,000 public shares and has agreed pursuant to the terms of the Forward Purchase Agreement not to redeem its shares in contemplation of the business combination, it is not expected that TVA III would be left with less than $5,000,001 of net tangible assets as a result of redemptions by the holders of TVA III public shares.
Pursuant to the New Insider Letter, the Sponsor and the Insiders have agreed to waive their redemption rights with respect to all of their TVA III Ordinary Shares in connection with the consummation of the business combination and, because of this, such TVA III Ordinary Shares are excluded from the pro rata calculation used to determine the per share redemption price. In addition, pursuant to the Sponsor Support Agreement, the Sponsor and the Insiders have agreed to vote their TVA III Ordinary Shares in favor of the Transactions and other SPAC Stockholder Matters. As is customary in transactions of this type, the Sponsor and the Insiders did not receive any consideration for these obligations.
Appraisal Rights of TVA III Shareholders
TVA III shareholders
Proxy Solicitation
Proxies may be solicited by mail, or in person. TVA III has engaged Sodali & Co as its proxy solicitor to assist in the solicitation of proxies. If a shareholder grants a proxy, it may still vote their TVA III Ordinary Shares during the meeting if it revokes its proxy before the extraordinary general meeting. A shareholder may also change its vote by submitting a later-dated proxy as described in the section entitled “Extraordinary General Meeting of TVA III— Revoking Your Proxy.”
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Table of Contents
The TVA III Board’s Reasons for Approval of the Business Combination
The TVA III Board, in evaluating the Transactions, consulted with TVA III’s management and financial, strategic and legal advisors. The TVA III Board considered a number of factors pertaining to the Transactions as generally supporting its decision to enter into the Merger Agreement, the related agreements to which TVA III is a party, and the Transactions. The TVA III Board did not consider it practicable to, and did not attempt to, quantify or otherwise assign relative weights to the specific factors it considered in reaching its determination. In addition, individual directors may have given different weight to different factors. The TVA III Board viewed its decision as being based on all of the information available and the factors presented to and considered by it. For a description of the TVA III Board’s reasons for the approval of the Business Combination, see the section entitled “Proposal No. 1 — The Business Combination Proposal — The TVA III Board’s Reasons for Approval of the Business Combination.”
The PlusAI Board’s Reasons for Approval of the Business Combination
In reaching its decision to approve the business combination, the PlusAI Board consulted with PlusAI’s management, as well as its financial and legal advisors, and considered a number of factors, including its knowledge of PlusAI’s business, operations, financial condition, competitive position and prospects. In view of the wide variety of factors considered by the PlusAI Board in connection with the evaluation of the business combination and the complexity of these matters, the PlusAI Board did not find it practicable to, and did not, quantify or otherwise assign relative weights to the specific factors considered in reaching its determination and recommendation. The judgments of individual members of the PlusAI Board may have been influenced to a greater or lesser degree by different factors. The PlusAI Board ultimately concluded that, in the aggregate, the potential benefits of the business combination outweighed the potential risks or negative consequences of the business combination. For a description of the Plus AI Board’s reasons for the approval of the Business Combination, see the section entitled “Proposal No. 1 — The Business Combination Proposal — The Plus AI Board’s Reasons for Approval of the Transactions.”
Interests of Certain TVA III Persons in the Business Combination
In considering the recommendation of the TVA III Board to vote in favor of approval of the business combination proposal and the other proposals, TVA III shareholders should keep in mind that the Sponsor and the Insiders have interests in such proposals that are different from, or in addition to, the interests of TVA III shareholders generally. In particular:
21
Table of Contents
22
Table of Contents
Sponsor and Affiliates Compensation
The following table sets forth the payments received by Sponsor and its affiliates from TVA III prior to or in connection with the completion of the initial business combination and the securities issued by TVA III to Sponsor or its affiliates:
Entity/Individual |
Amount of Compensation Received or Securities Issued |
Consideration Paid or to be Paid |
Sponsor |
7,500,000 TVA III Founder Shares and 4,700,000 TVA III Private Placement Warrants Up to $1,500,000 in Working Capital Loans, which loans are convertible, at the Sponsor’s election, upon the consummation of the business combination into units identical to the TVA III Public Units at a price of $10.00 per unit, rounded down to the nearest whole number. As of September 30, 2026, TVA III has incurred a Working Capital Loan in an aggregate principal amount of $250,000 through the issuance of a convertible unsecured promissory note to the Sponsor. Reimbursement for any out-of-pocket expenses related to identifying, investigation and completing an initial business combination |
$7,400,000
Working Capital Loans to finance transaction costs in connection with an initial business combination
Services in connection with identifying, investigating and completing an initial business combination |
Sponsor, our officers, directors, or our or their affiliates |
Finder’s fee, advisory fee, consulting fee or success fee |
Any services they render in order to effectuate the completion of our initial business combination. We may engage one or more affiliates of our sponsor, officers or directors or their respective affiliates to provide additional services to us after this offering, including, for example, identifying potential targets or providing financial advisory services, and may pay such affiliates fair and reasonable fees or other compensation that would be determined at that time in an arm’s length negotiation. |
See the section of this proxy statement/prospectus entitled “Proposal No. 1 —The Business Combination Proposal — Interests of Certain TVA III Persons in the Business Combination” for a further discussion of the compensation received by the Sponsor.
23
Table of Contents
Interests of Certain PlusAI Persons in the Business Combination
In considering whether to approve the PlusAI business combination proposal, PlusAI stockholders should be aware that aside from their interests as stockholders, PlusAI’s executive officers and directors have interests in the business combination that are different from, or in addition to, those of other PlusAI stockholders generally. PlusAI stockholders should take these interests into account in deciding whether to approve the PlusAI business combination proposal. These interests include, among other things, the interests described in the section titled “Proposal No. 1 — The Business Combination Proposal—Interests of Certain Persons in the Business Combination” below.
Board of Directors Following the Business Combination
Upon consummation of the business combination, it is expected that each Class I director of the Post-Closing Company will have a term that expires at the annual meeting of shareholders of the Post-Closing Company in 2028, each Class II director of the Post-Closing Company will have a term that expires at the annual meeting of shareholders of the Post-Closing Company in 2029 and each Class III director will have a term that expires at the annual meeting of shareholders of the Post-Closing Company in 2030, or in each case until their respective successors are duly elected and qualified, or until their earlier resignation, removal or death.
We are proposing Richard Lim and Hao Zheng to serve as the Class I directors, David C. Peterschmidt to serve as the Class II director and David Liu and Harry J. Harczak, Jr. to serve as the Class III directors.
Please see the sections entitled “Proposal No. 8 — The Director Election Proposal” and “Management After the Business Combination” for additional information.
Recommendation to TVA III Shareholders
The TVA III Board believes that the business combination proposal and the other proposals to be presented at the extraordinary general meeting are just, equitable and fair, and in the best interests of, TVA III and its shareholders and unanimously recommends that its shareholders vote or give instruction to vote “FOR” the business combination proposal, “FOR” the domestication proposal, “FOR” the organizational documents proposal, “FOR” the advisory organizational documents proposal, “FOR” the stock issuance proposal, “FOR” the incentive plan proposal, “FOR” the ESPP proposal, “FOR” each of the director nominees named in the director election proposal and, if presented, “FOR” the adjournment proposal.
When you consider the TVA III Board’s recommendation of these proposals, you should keep in mind that our directors and officers, as well as the Sponsor, have interests in the Transactions that are different from, or in addition to, the interests of TVA III shareholders generally. Please see the section entitled “Proposal No. 1 — The Business Combination Proposal — Interests of Certain TVA III Persons in the Business Combination” for additional information. The TVA III Board was aware of and considered these interests, among other matters, in evaluating and negotiating the Transactions and in recommending to TVA III shareholders that they vote in favor of the proposals presented at the extraordinary general meeting.
Expected Accounting Treatment of the Transactions
See the section entitled “Unaudited Pro Forma Condensed Combined Financial Information.”
Regulatory Matters
Under the HSR Act and the rules that have been promulgated thereunder by the Federal Trade Commission (the “FTC”), certain transactions may not be consummated unless information has been furnished to the Antitrust Division of the Department of Justice (the “Antitrust Division”) and the FTC and certain waiting period requirements have been satisfied. The Transactions are subject to these requirements and may not be completed until the expiration of a 30-day waiting period following the filing of the required Notification and Report Forms with the Antitrust Division and the FTC or until early termination is granted. If the FTC or the Antitrust Division issues a Second Request within the initial 30-day waiting period, the waiting period with respect to the Transactions will be extended for an additional
24
Table of Contents
period of 30 calendar days, which will begin on the date on which the filing parties each certify compliance with the Second Request. Complying with a Second Request can take a significant period of time.
Each of TVA III and PlusAI filed a Notification and Report Form with the FTC and the Antitrust Division in connection with the Transactions on , 2026. The initial 30-day waiting period therefore expired at 11:59 p.m., Eastern time, on , 2026.
At any time before or after consummation of the Transactions, notwithstanding termination of the waiting period under the HSR Act, the applicable competition authorities could take such action under applicable antitrust laws as each deems necessary or desirable in the public interest, including seeking to enjoin the consummation of the Transactions. Private parties may also seek to take legal action under the antitrust laws under certain circumstances. There is no assurance that the Antitrust Division, the FTC, any state attorney general, or any other government authority will not attempt to challenge the Transactions on antitrust grounds, and, if such a challenge is made, we cannot assure you as to its result.
Neither TVA III nor PlusAI is aware of any material regulatory approvals or actions that are required for completion of the Transactions other than the expiration or early termination of the waiting period under the HSR Act. It is presently contemplated that if any such additional regulatory approvals or actions are required, those approvals or actions will be sought. There can be no assurance, however, that any additional approvals or actions will be obtained.
25
Table of Contents
Risk Factors
In evaluating the proposals to be presented at the extraordinary general meeting, you should carefully read this proxy statement/prospectus and especially consider the factors discussed in the section entitled “Risk Factors.” These risks include, but are not limited to the following:
26
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27
Table of Contents
Sources and Uses of Funds for the Transactions
The following tables summarize the sources and uses for funding the Transactions under the following scenarios:
No Redemption Scenario
These figures assume that (1) no TVA III Public Shareholders exercise their redemption rights in connection with the Transactions, (2) the Post-Closing Company issues 117,602,425 shares of Post-Closing Company common stock to PlusAI stockholders (which includes holders of PlusAI preferred stock, PlusAI common stock, and PlusAI SAFEs, that, pursuant to the Conversion, are converted to PlusAI common stock immediately prior to the Merger), and (3) there has been no additional incremental financing raised by PlusAI. If the actual facts are different from these assumptions, then the amounts and shares outstanding after the Closing will be different and those changes could be material.
|
|
Sources |
|
|
|
|
Uses |
|
||
|
|
($ in millions) |
|
|
|
|
($ in millions) |
|
||
Existing Plus Shareholder Rollover Equity value |
|
$ |
800.0 |
|
|
Existing Plus Shareholder Rollover Equity value |
|
$ |
800.0 |
|
Cash in trust account stockholders(1) |
|
|
236.6 |
|
|
Cash to balance sheet |
|
|
266.6 |
|
Existing Cash Balances |
|
|
18.6 |
|
|
Transaction expenses(2)(3) |
|
|
29.0 |
|
PIPE Financing |
|
|
61.5 |
|
|
Redemption of TVA Class A shares held by TVA public stockholders |
|
|
— |
|
|
|
|
|
|
Cash redemption of Plus SAFE |
|
|
10.0 |
|
|
|
|
|
|
|
Forward purchase agreement prepayments |
|
|
11.1 |
|
|
Total sources |
|
$ |
1,116.7 |
|
|
Total uses |
|
$ |
1,116.7 |
|
28
Table of Contents
25% Redemption Scenario
These figures assume that (1) TVA III Public Shareholders holding an aggregate of 5,625,000 TVA III public shares exercise their redemption rights in connection with the Transactions, (2) the Post-Closing Company issues 117,602,425 shares of Post-Closing Company common stock to PlusAI stockholders (which includes holders of PlusAI preferred stock, PlusAI common stock, and PlusAI SAFEs, that, pursuant to the Conversion, are converted to PlusAI common stock immediately prior to the Merger), and (3) there has been no additional incremental financing raised by PlusAI. If the actual facts are different from these assumptions, then the amounts and shares outstanding after the Closing will be different and those changes could be material.
|
|
Sources |
|
|
|
|
Uses |
|
||
|
|
($ in millions) |
|
|
|
|
($ in millions) |
|
||
Existing Plus Shareholder Rollover Equity value |
|
$ |
800.0 |
|
|
Existing Plus Shareholder Rollover Equity value |
|
$ |
800.0 |
|
Cash in trust account stockholders(1) |
|
|
236.6 |
|
|
Cash to balance sheet |
|
|
209.7 |
|
Existing Cash Balances |
|
|
18.6 |
|
|
Transaction expenses(2)(3) |
|
|
26.8 |
|
PIPE Financing |
|
|
61.5 |
|
|
Redemption of TVA Class A shares held by TVA public stockholders |
|
|
59.1 |
|
|
|
|
|
|
Cash redemption of Plus SAFE |
|
|
10.0 |
|
|
|
|
|
|
|
Forward purchase agreement prepayments |
|
|
11.1 |
|
|
Total sources |
|
$ |
1,116.7 |
|
|
Total uses |
|
$ |
1,116.7 |
|
50% Redemption Scenario
These figures assume that (1) TVA III public shareholders holding an aggregate of 11,250,000 TVA III public shares exercise their redemption rights in connection with the Transactions, (2) the Post-Closing Company issues 117,602,425 shares of Post-Closing Company common stock to PlusAI stockholders (which includes holders of PlusAI preferred stock, PlusAI common stock, and PlusAI SAFEs, that, pursuant to the Conversion, are converted to PlusAI common stock immediately prior to the Merger), and (3) there has been no additional incremental financing raised by PlusAI. If the actual facts are different from these assumptions, then the amounts and shares outstanding after the Closing will be different and those changes could be material.
|
|
Sources |
|
|
|
|
Uses |
|
||
|
|
($ in millions) |
|
|
|
|
($ in millions) |
|
||
Existing Plus Shareholder Rollover Equity value |
|
$ |
800.0 |
|
|
Implied Seller Rollover Equity value |
|
$ |
800.0 |
|
Cash in trust account stockholders(1) |
|
|
236.6 |
|
|
Cash to balance sheet |
|
|
152.8 |
|
Existing Cash Balances |
|
|
18.6 |
|
|
Transaction expenses(2)(3) |
|
|
24.5 |
|
PIPE Financing |
|
|
61.5 |
|
|
Redemption of TVA Class A shares held by TVA public stockholders |
|
|
118.3 |
|
|
|
|
|
|
Cash redemption of Plus SAFE |
|
|
10.0 |
|
|
|
|
|
|
|
Forward purchase agreement prepayments |
|
|
11.1 |
|
|
Total sources |
|
$ |
1,116.7 |
|
|
Total uses |
|
$ |
1,116.7 |
|
29
Table of Contents
Maximum Redemption Scenario
These figures assume that (1) TVA III Public Shareholders holding an aggregate of 21,450,000 TVA III public shares exercise their redemption rights in connection with the Transactions (with the Sponsor Affiliate not redeeming its TVA III public shares), (2) the Post-Closing Company issues 117,602,425 shares of Post-Closing Company common stock to PlusAI stockholders (which includes holders of PlusAI preferred stock, PlusAI common stock, and PlusAI SAFEs, that, pursuant to the Conversion, are converted to PlusAI common stock immediately prior to the Merger), and (3) there has been no additional incremental financing raised by PlusAI. If the actual facts are different from these assumptions, then the amounts and shares outstanding after the Closing will be different and those changes could be material.
|
|
Sources |
|
|
|
|
Uses |
|
||
|
|
($ in millions) |
|
|
|
|
($ in millions) |
|
||
Existing Plus Shareholder Rollover Equity value |
|
$ |
800.0 |
|
|
Existing Plus Shareholder Rollover Equity value |
|
$ |
800.0 |
|
Cash in trust account stockholders(1) |
|
|
236.6 |
|
|
Cash to balance sheet |
|
|
49.7 |
|
Existing Cash Balances |
|
|
18.6 |
|
|
Transaction expenses(2)(3) |
|
|
20.4 |
|
PIPE Financing |
|
|
61.5 |
|
|
Redemption of TVA Class A shares held by TVA public stockholders |
|
|
225.5 |
|
|
|
|
|
|
Cash redemption of Plus SAFE |
|
|
10.0 |
|
|
|
|
|
|
|
Forward purchase agreement prepayments |
|
|
11.1 |
|
|
Total sources |
|
$ |
1,116.7 |
|
|
Total uses |
|
$ |
1,116.7 |
|
30
Table of Contents
SUMMARY FINANCIAL DATA
The following selected unaudited summary condensed combined financial data (the “summary financial data”) gives effect to the business combination and other events contemplated by the business combination and the Transaction Accounting Adjustments in Note 3, as described in the section entitled “Unaudited Pro Forma Condensed Combined Financial Information” included elsewhere in this proxy statement/prospectus. On September 2, 2026, TVA III and PlusAI entered into the Merger Agreement. Pursuant to the terms of the Merger Agreement, TVA III will acquire PlusAI through the statutory merger of Merger Sub with and into PlusAI, with PlusAI surviving the merger as a wholly owned subsidiary of TVA III. The Closing Merger Consideration will have an Equity Value of $800.0 million. At the effective time of the Merger, each share of PlusAI common stock will be automatically surrendered and exchanged for the right to receive a number of shares of the Post-Closing Company Class A common stock, Post-Closing Company Class B common stock, or Post-Closing Company Class C common stock equal to the Exchange Ratio, calculated in accordance with the terms of the Merger Agreement. For purposes of the pro forma condensed combined financial information presented, TVA III currently estimates the Exchange Ratio to be approximately 0.0440.
The Merger is expected to be accounted for as a reverse recapitalization in accordance with GAAP because PlusAI has been determined to be the accounting acquirer under all redemption scenarios presented.
The unaudited pro forma combined balance sheet as of June 30, 2026 combines the historical consolidated balance sheet of PlusAI with the historical consolidated balance sheet of TVA III on a pro forma basis as if the business combination and the other events contemplated by the Merger Agreement, summarized below, had been consummated on June 30, 2026.
The unaudited pro forma condensed combined statements of operations for the six months ended June 30, 2026 and for the year ended December 31, 2025 present the pro forma effect of the business combination, other events contemplated by the Merger Agreement, and Transactions as if they had been consummated on January 1, 2025.
The summary financial data has been derived from, and should be read in conjunction with, the unaudited pro forma condensed combined financial information of the Post-Closing Company, appearing elsewhere in this proxy statement/prospectus and the accompanying notes, in the section titled “Unaudited Pro Forma Condensed Combined Financial Information.” The unaudited pro forma condensed combined financial information is derived from, and should be read in conjunction with, the historical financial statements of TVA III and PlusAI and related notes included elsewhere in this proxy statement/prospectus. The selected unaudited pro forma combined financial information has been presented for informational purposes only and is not necessarily indicative of what the Post-Closing Company’s financial position or results of operations actually would have been had the business combination been completed as of the dates indicated. In addition, the selected unaudited pro forma combined financial information does not purport to project the future financial position or operating results of the Post-Closing Company. TVA III and PlusAI have not had any historical relationship prior to the business combination. Accordingly, no Transaction Accounting Adjustments were required to eliminate activities between the companies.
The unaudited pro forma condensed combined financial information has been prepared in accordance with Article 11 of Regulation S-X as amended by the final rule, Release 33-10786 “Amendments to Financial Disclosures about Acquired and Disposed Businesses.” The adjustments reflected in the selected unaudited pro forma combined financial information have been identified and presented to provide relevant information necessary for an accurate understanding of the Post-Closing Company upon consummation of the business combination and other transactions.
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Under the scenarios outlined below, the pro forma condensed combined financial information assume a $10.51 per share redemption amount based on pro rata amount per share of TVA III Class A common stock of the June 30, 2026 trust account balance. The following table presents the selected unaudited pro forma combined financial information after giving effect to the business combination and other events contemplated by the Merger Agreement, presented under the following scenarios:
The following summarizes the pro forma shares of the Post-Closing Company common stock issued and outstanding immediately after the business combination on June 30, 2026 under the scenarios, excluding the dilutive effect of the potential issuance of any Earnout Shares, the potential issuance of any shares of Post-Closing Company common stock upon exercise of outstanding PlusAI options assumed by the Post-Closing Company, the potential issuance of any shares of Post-Closing Company common stock upon the release of unvested PlusAI RSUs, and the potential issuance of shares of Post-Closing Company common stock initially reserved for issuance under the Incentive Plan and the ESPP:
|
|
No Redemption |
|
|
25% Redemption |
|
|
50% Redemption |
|
|
Maximum Redemption |
|
||||||||||||||||||||||||||||||||||||
|
|
Shares |
|
|
% Outstanding |
|
|
% |
|
|
Shares |
|
|
% Outstanding |
|
|
% |
|
|
Shares |
|
|
% Outstanding |
|
|
% |
|
|
Shares |
|
|
% Outstanding |
|
|
% |
|
||||||||||||
TVA Public Stockholders (1) |
|
|
22,500,000 |
|
|
|
20.9 |
% |
|
|
6.1 |
% |
|
|
16,875,000 |
|
|
|
16.5 |
% |
|
|
4.6 |
% |
|
|
11,250,000 |
|
|
|
11.7 |
% |
|
|
3.1 |
% |
|
|
1,050,000 |
|
|
|
1.3 |
% |
|
|
0.3 |
% |
Sponsor and affiliates (2) |
|
|
7,500,000 |
|
|
|
7.0 |
% |
|
|
2.0 |
% |
|
|
7,500,000 |
|
|
|
7.4 |
% |
|
|
2.1 |
% |
|
|
7,500,000 |
|
|
|
7.8 |
% |
|
|
2.1 |
% |
|
|
7,500,000 |
|
|
|
8.7 |
% |
|
|
2.1 |
% |
PlusAI Stockholders (3) |
|
|
77,550,256 |
|
|
|
72.0 |
% |
|
|
91.9 |
% |
|
|
77,550,256 |
|
|
|
76.0 |
% |
|
|
93.3 |
% |
|
|
77,550,256 |
|
|
|
80.4 |
% |
|
|
94.8 |
% |
|
|
77,550,256 |
|
|
|
89.9 |
% |
|
|
97.6 |
% |
CCM (4) |
|
|
100,000 |
|
|
|
0.1 |
% |
|
|
0.0 |
% |
|
|
100,000 |
|
|
|
0.1 |
% |
|
|
0.0 |
% |
|
|
100,000 |
|
|
|
0.1 |
% |
|
|
0.0 |
% |
|
|
100,000 |
|
|
|
0.1 |
% |
|
|
0.0 |
% |
Total Common Stock Outstanding |
|
|
107,650,256 |
|
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
102,025,256 |
|
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
96,400,256 |
|
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
86,200,256 |
|
|
|
100.0 |
% |
|
|
100.0 |
% |
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Table of Contents
If the actual facts are different than these assumptions, then the amounts and shares outstanding in the unaudited pro forma condensed combined financial information will be different and those changes could be material.
The following summarizes summary financial data under the following scenarios presented:
|
|
No Redemption |
|
|
25% Redemption |
|
|
50% Redemption |
|
|
Maximum Redemption |
|
||||
Selected Unaudited Pro Forma Condensed Combined Statement of Operations Data - Year Ended December 31, 2025 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total operating expenses |
|
$ |
77,937 |
|
|
$ |
78,988 |
|
|
$ |
78,988 |
|
|
$ |
77,937 |
|
Loss from operations |
|
|
77,870 |
|
|
|
78,921 |
|
|
|
78,921 |
|
|
|
77,870 |
|
Net loss |
|
|
207,817 |
|
|
|
208,868 |
|
|
|
208,868 |
|
|
|
207,817 |
|
Net loss per share - basic and diluted |
|
$ |
2.08 |
|
|
$ |
2.18 |
|
|
$ |
2.27 |
|
|
$ |
2.43 |
|
Weighted-average shares - basic and diluted |
|
|
99,792,490 |
|
|
|
95,924,337 |
|
|
|
92,056,187 |
|
|
|
85,369,887 |
|
Selected Unaudited Pro Forma Condensed Combined Statement of Operations Data - Six Months Ended June 30, 2026 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total operating expenses |
|
$ |
55,511 |
|
|
$ |
55,511 |
|
|
$ |
55,511 |
|
|
$ |
55,511 |
|
Loss from operations |
|
|
30,436 |
|
|
|
30,436 |
|
|
|
30,436 |
|
|
|
30,436 |
|
Net loss |
|
|
30,344 |
|
|
|
30,344 |
|
|
|
30,344 |
|
|
|
30,344 |
|
Net loss per share - basic and diluted |
|
$ |
0.28 |
|
|
$ |
0.30 |
|
|
$ |
0.32 |
|
|
$ |
0.35 |
|
Weighted-average shares - basic and diluted |
|
|
107,080,161 |
|
|
|
101,455,161 |
|
|
|
95,830,161 |
|
|
|
85,630,161 |
|
Selected Unaudited Pro Forma Condensed Combined Balance Sheet Data as of June 30, 2026 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total current assets |
|
|
271,077 |
|
|
|
214,182 |
|
|
|
157,287 |
|
|
|
54,117 |
|
Total assets |
|
|
273,181 |
|
|
|
216,286 |
|
|
|
159,391 |
|
|
|
56,221 |
|
Total current liabilities |
|
|
13,150 |
|
|
|
13,150 |
|
|
|
13,150 |
|
|
|
13,150 |
|
Total liabilities |
|
|
141,067 |
|
|
|
141,067 |
|
|
|
141,067 |
|
|
|
141,067 |
|
Total stockholders' equity |
|
$ |
132,114 |
|
|
$ |
75,219 |
|
|
$ |
18,324 |
|
|
$ |
(84,846 |
) |
33
Table of Contents
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This proxy statement/prospectus contains forward-looking statements within the meaning of the federal securities laws, which statements involve substantial risks and uncertainties. Forward-looking statements generally relate to future events or our future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as “may,” “will,” “would,” “should,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “expect,” “potential,” “plan,” “seek,” or “continue” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans or intentions. Forward-looking statements contained in this proxy statement/prospectus include statements about:
34
Table of Contents
We caution you that the foregoing list may not contain all of the forward-looking statements made in this proxy statement/prospectus. We advise you that the safe harbor afforded by the Private Securities Litigation Reform Act of 1995 to certain forward-looking statements does not extend to forward-looking statements made by TVA III or PlusAI in connection with this proxy statement/prospectus.
You should not rely upon forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this proxy statement/prospectus primarily on our current expectations and projections about future events and trends that we believe may affect our business, operating results, financial condition and prospects. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties and other factors, including those described in the section titled “Risk Factors” and elsewhere in this proxy statement/prospectus. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this proxy statement/prospectus. We cannot assure you that the results, events and circumstances reflected in the forward-looking statements will be achieved or occur, and actual results, events or circumstances could differ materially from those described in the forward-looking statements.
Neither we nor any other person assumes responsibility for the accuracy and completeness of any of these forward-looking statements. Moreover, the forward-looking statements made in this proxy statement/prospectus relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this proxy statement/prospectus to reflect events or circumstances after the date of this proxy statement/prospectus or to reflect new information or the occurrence of unanticipated events, except as required by law. You should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments we may make following the Closing.
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Table of Contents
In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this prospectus, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.
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Table of Contents
MARKET AND INDUSTRY DATA
This proxy statement/prospectus contains estimates and information concerning our industry, including market size of the markets in which we participate, that are based on various third-party sources, industry publications and reports, as well as our own internal information. This information involves assumptions and limitations, and you are cautioned not to give undue weight to such estimates and information. The markets in which we operate are subject to a high degree of uncertainty and risk due to a variety of factors, including those described in the section titled “Risk Factors.” These and other factors could cause results to differ materially from those expressed in these sources, publications and reports.
The sources of certain statistical data, estimates and forecasts contained in this prospectus include the following independent industry publications or reports:
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Table of Contents
RISK FACTORS
Shareholders should carefully consider the following risk factors, together with all of the other information included in this proxy statement/prospectus, before they decide whether to vote or instruct their vote to be cast to approve the proposals described in this proxy statement/prospectus. Investing in the Post-Closing Company common stock involves a high degree of risk. The following risk factors apply to the business and operations of PlusAI and will also apply to the business and operations of the Post-Closing Company following the completion of the business combination. The occurrence of one or more of the events or circumstances described in these risk factors, alone or in combination with other events or circumstances, may adversely affect the ability to complete or realize the anticipated benefits of the business combination, and may adversely affect the business, prospects, financial condition, results of operations of the Post-Closing Company. In that case, the trading price of Post-Closing Company Class A common stock may decline, and you may lose all or part of your investment. You should also carefully consider the following risk factors in addition to the other information included in this proxy statement/prospectus, including matters addressed in the section entitled “Cautionary Note Regarding Forward-Looking Statements.” TVA III or PlusAI may face additional risks and uncertainties that are not presently known to TVA III or PlusAI, or that TVA III and PlusAI currently deem immaterial, which may also impair TVA III’s or PlusAI’s business or financial condition. The following discussion should be read in conjunction with the financial statements and notes to the financial statements included herein.
Risks Related to PlusAI
For purposes of this subsection only, unless the context otherwise requires, all references in this section to “PlusAI,” the “Company,” “we,” “us” or “our” refer to the business of PlusAI prior to the consummation of the business combination, which will be the business of the Post-Closing Company and its subsidiaries following the consummation of the business combination.
Risks Related to Our Technology, Business Model and Industry
Autonomous driving technology is an emerging technology, and we face significant technical challenges to commercialize our technology. If we cannot successfully overcome those challenges or do so on a timely basis, our ability to grow our business will be negatively impacted.
Autonomous driving technology is an emerging technology and presents major engineering challenges. The industry faces significant technical and commercial challenges, including demand for driving performance superior to human drivers, significant capital requirements, long development lead times, particularized skills and expertise required by personnel, inconsistent and evolving regulatory frameworks, a need to build public trust and brand reputation, and transitioning novel technology into real-world operation. If we are not able to overcome these challenges, in a timely manner or at all, our business, prospects, financial condition, and results of operations will be negatively impacted.
Although we believe that our virtual driver software and supporting technology are promising, we have not commercially launched our software and supporting technology and cannot assure you that our technology will succeed commercially. The successful development of our virtual driver software and related technology involves many challenges and uncertainties, including:
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Table of Contents
We have incurred net losses since our inception, and we expect to incur significant expenses and continuing losses for the foreseeable future.
We have incurred net losses on an annual basis since our inception. During the six month periods ended June 30, 2026 and 2025, we incurred net losses of $7.9 million and $56.9 million, respectively. During the years ended December 31, 2025 and 2024, we incurred net losses of $93.4 million and $61.1 million, respectively. We believe that we will continue to incur operating and net losses each quarter until at least the time we have begun to scale commercial operation of our virtual driver software, which may take longer than we currently expect or may never occur. Even if we successfully develop and commercialize our virtual driver technology, there can be no assurance that we will be commercially successful. We expect the rate at which we will incur losses may be substantially higher in future periods as we continue to scale our development and begin commercialization of our technology. Because we expect to incur the costs and expenses from these efforts before we receive significant revenues from commercial launch, we expect that our losses in future periods will be significant. In addition, our development and commercialization efforts may be more expensive than we currently anticipate or these efforts may not result in revenue in the timeframes expected, or at all, which would further increase our losses.
Our limited operating history makes it difficult to evaluate our future prospects and the risks and challenges we may encounter.
PlusAI was formed in July 2023 as a result of the restructuring (the “Restructuring”) of the operations of PlusAI Corp (“Original Plus”), which was itself originally formed in 2016. Prior to the Restructuring, Original Plus was a hardware/software combination-based model focused on retrofitting existing trucks in China. Original Plus was party to a joint venture with a Chinese heavy-duty truck manufacturer targeting the PRC market, had received a pre-order from a Chinese customer, and engaged in various development activities with other manufacturers and trucking companies primarily in China and the United States. Following the Restructuring, PlusAI shifted its geographic focus to the United States and Europe and changed its business to a software-based model focused on partnering with original equipment manufacturers (“OEMs”) to deploy its software solutions to new vehicles. Following the Restructuring, PlusAI also shifted its focus to development of L4 virtual driver software, which is characterized by full system redundancy, fault tolerance and deployment on higher-cost, higher-performance platforms that require more advanced compute and sensor configurations. Our relatively limited operating history, particularly with our new, post-Restructuring business model, makes it difficult to evaluate our future prospects and the risks and challenges we may encounter. Risks and challenges we have faced or expect to face include our ability to:
39
Table of Contents
If we fail to address the risks and difficulties that we face, including those associated with the challenges listed above, as well as those described elsewhere in this “Risk Factors” section, our business, financial condition and results of operations could be adversely affected. Further, because we have limited historical financial data and operate in a rapidly evolving market, any predictions about our future revenue and expenses may not be as accurate as they would be if we had a longer operating history, both prior to and since the Restructuring, or operated in a more developed market. We have encountered in the past, and will encounter in the future, risks and uncertainties frequently experienced by growing companies with limited operating histories in rapidly changing industries. If our assumptions regarding these risks and uncertainties, which we use to plan and operate our business, are incorrect or change, or if we do not address these risks successfully, our results of operations could differ materially from our expectations and our business, financial condition, and results of operations could be adversely affected.
Our technology may be lesser performing or developing and commercializing and scaling our technology may take us longer to complete than we currently anticipate, which would adversely impact our business, financial condition, and results of operations.
Our virtual driver software is highly technical and complex, and successful commercial deployment of our technology will require that we meet very high standards for technology performance and system safety. If we are unable to develop and commercialize our technology in a sufficiently performant or timely manner, our ability to monetize our technology will be impaired. These risks are particularly relevant for factors such as our virtual driver software’s operational domain (i.e., the conditions under which our software is designed to operate), which includes variables such as traversable road networks, speeds, and weather patterns. It is possible that there may be additional limitations in our operating capabilities that are dependent upon a number of factors, including, for example, vehicle type (e.g., car, truck) and actor density (e.g., pedestrians, cyclists). If that is the case, we may be more restricted in our addressable market opportunities.
To date, the autonomous driving industry has generally taken longer to develop than many anticipated, and it may take us longer to complete our own technology development and commercialization than is currently projected. Successful deployment of autonomous driving technology for broad use cases will require further technology improvements including, for example, handling non-compliant or unexpected actor behavior and inclement weather conditions. Developing a system that adequately manages these challenges may take us longer than expected (or may not be achieved at all), which would increase our capital requirements for technology development, delay our timeline to commercialization, and otherwise harm our business, financial condition, and results of operations.
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We track certain business and operational metrics that we use to make various financial and operational decisions, which are based on certain assumptions and estimates and are subject to inherent challenges in measurement and comparison with similar metrics of other businesses, and actual or perceived inaccuracies in such metrics may harm our reputation and materially adversely affect our stock price, business, results of operations, and financial condition.
We track certain business and operational metrics which may differ from estimates or similar metrics published by third parties due to differences in sources, methodologies, or the assumptions on which we rely. Our internal systems and tools are subject to a number of limitations, and our methodologies for tracking these metrics may change over time, which could result in unexpected changes to our metrics, including any metrics we publicly disclose. If the internal systems and tools we use to track these metrics undercount or overcount performance or contain algorithmic or other technical errors, the data we report may not be accurate. We use such business and operational metrics to make various financial operations decisions and, if such metrics are inaccurate or misleading, our business, results of operations, and financial condition could be harmed. Further, investors should not place undue reliance on these metrics as an indicator of our future or expected results. If investors or analysts do not perceive any metrics that we publicly disclose to be accurate representations of our business, or if we discover material inaccuracies in such metrics, our reputation, business, results of operations, and financial condition would be harmed.
For example, we have publicly disclosed a measurement of our progress toward completing the safety case and achieving full readiness for the commercial launch of SuperDrive, referred to as Safety Case Readiness. There are inherent challenges in calculating Safety Case Readiness, including the fact that management judgment is used when assessing the completeness of the supporting evidence for the safety case. If our Safety Case Readiness is not an accurate representation of our progress toward completing the safety case and achieving full readiness for the commercial launch of SuperDrive, or if investors perceive this measure not to be accurate, or if we discover material inaccuracies in Safety Case Readiness, our reputation may be significantly harmed, the timing of our commercial launch could be delayed, and our stock price could decline, any of which could materially and adversely affect our business, prospects, financial condition, and results of operations.
We operate in an intensely competitive market and some market participants have substantially greater resources. If one or more of our competitors broadly commercialize their self-driving technology before we do, develop superior technology, or are perceived to have better or safer technology, our business prospects and financial performance would be adversely affected.
The market for self-driving technology is intensely competitive and subject to rapid technological change. Our future success will depend on our ability to develop and commercialize our virtual driver software in a sufficiently timely manner in order to maintain competitiveness. Several companies, including, but not limited to, Torc Robotics, Aurora, and Kodiak Robotics are investing heavily in building self-driving technology for similar use cases to ours. If our competitors, including those previously mentioned, broadly commercialize their technology before we do, develop superior technology, or are perceived to have better or safer technology, they may capture market opportunities and establish relationships with customers and partners that might otherwise have been available to us.
Commercialization of autonomous trucking technology is currently generally limited to pilot deployments, which we and other competitors are currently performing. Competitors may initiate similar deployments in various different use cases and/or geographies earlier than we will or may perform better than we do in such deployments. Several of these competitors have substantially greater financial, marketing, research and development, and other resources than we do. In the event that one or more of these competitors broadly commercializes their technology before we do, our business prospects and financial performance would be adversely impacted.
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We expect to rely on a limited number of customers for a significant portion of our future revenue. The loss of, or a reduction in our commercial relationship with, any of those customers may adversely affect our business, financial condition, and results of operations.
We expect to rely on a limited number of customers for substantially all of our future revenue. To date, we have limited revenue from the deployment of our technology and the substantial majority of our revenue has been derived from a limited number of pilot projects and other nonrecurring engineering fees. For example, during each of the periods presented in this proxy statement/prospectus, we had one contract with a revenue-generating customer. Particularly as we approach commercial launch of SuperDrive, the composition of our significant customers may vary. We believe our business, financial condition, and results of operations for the foreseeable future will continue to depend on the deployment of our software through a relatively limited number of OEMs. OEMs may decide not to distribute, or their customers may decide not to purchase, autonomous vehicles utilizing our technology or may take other actions that affect us for reasons that we cannot anticipate or control. Those reasons could relate to the OEM’s or their customer’s financial condition, changes in the OEM’s or their customer’s business strategy or operations, changes in technology, the introduction of alternative competing products, or the perceived quality or cost-effectiveness of our technology. Our agreements with certain of our OEM partners are non-exclusive and may be terminated by the OEM partner without cause with between 60 and 90 days’ written notice, subject in certain cases to the payment of a termination fee. Further, our OEM partners or their customers may not perform as well as their respective competitors, which may cause them to delay or reduce the level of their investment in autonomous vehicles utilizing our technology or decide not to renew their agreements with us, which may in turn impact our business, financial condition and results of operations. OEMs’ or their customers’ individual or aggregate needs may decline due to a number of factors, including supply chain challenges and macroeconomic conditions. Our agreements with OEMs may be cancelled on relatively short notice, including for reasons outside of our control. In addition, our OEM partners may seek to renegotiate the terms of agreements or renewals or choose not to renew or expand their licenses of our technology. We could enter into one or more Strategic Commercial Transactions providing for the issuance of equity in the Post-Closing Company, which may result in one or more of our OEM Partners becoming a significant stockholder of the Post-Closing Company. For example, in March 2026, TRATON and PlusAI entered into an Autonomy Acceleration Program Agreement to expand their global partnership to accelerate autonomous truck commercialization. Pursuant to the agreement, TRATON agreed to pay the Company up to an aggregate of $25 million upon certain agreed performance milestones, in exchange for providing certain autonomy data, tools & services to TRATON in support of the accelerated progression of their Level 2+ program. The agreement also contemplates that TRATON will receive warrants to purchase up to 7,500,000 shares of Post-Closing Company Class A common stock at an exercise price of $11.50 per share, and we further expect that a designee of TRATON will join the board of directors of PlusAI or the Post-Closing Company. For additional information, see the section of this proxy statement/prospectus titled “PlusAI’s Management’s Discussion and Analysis of Financial Condition and Results of Operations—Significant Events and Transactions—Expanded TRATON Partnership.” If any of our OEM partners becomes a significant stockholder of the Post-Closing Company, such partners may seek to leverage their shareholdings to receive better terms in our partnership agreements or to influence our relationships with other OEM partners. The loss of or a reduction in sales or anticipated sales to any of our OEM partners or our inability to attract new significant OEMs and other partners may adversely affect our business, financial condition, and results of operations. These risks are heightened due to the limited number of our existing and anticipated OEM partners.
Our technology may not achieve market acceptance at the pace we expect or at all.
Autonomous driving technology is an emerging technology that has not achieved general market acceptance. Any public incident involving autonomous vehicles (whether involving us or a competitor) could result in adverse publicity and decreased demand for autonomous driving technology. We will not be able to successfully commercialize our virtual driver software if we cannot gain sufficient trust in our safety and reliability. Concerns regarding the loss of human jobs to automation and artificial intelligence, and the related disruptions that may occur in the economy, may also result in adverse publicity and hinder market acceptance of autonomous driving technology. Labor unions may also raise concerns about autonomous truck safety, displacing drivers or otherwise negatively affecting employment opportunities for their members. This has in the past resulted in, and could in the future result in, negative publicity, lobbying efforts to U.S. local, state and federal authorities, or equivalent
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authorities in the foreign jurisdictions in which we seek to do business, to implement legislation or regulations that make it more difficult to operate our business.
As the market for autonomous vehicles matures, differences between our approach and those of our competitors will become more widely known to suppliers, insurers, regulators, and others. Until then, adverse perceptions of a single market participant may be applied to the autonomous driving industry as a whole. In that event, actions or inactions by a third-party may cause suppliers, insurers, regulators and others to refuse or cease to interact with or conduct business with the autonomous driving industry as a whole, including us. If the market does not accept and adopt our services and technology at the pace we expect or at all, it could materially and adversely affect our business, prospects, financial condition, and results of operations.
It is possible that our model does not materialize as expected, in particular as a result of our software-focused business model. This could significantly hinder our ability to generate a commercially viable product and adversely affect our business prospects.
Our business model is a software-focused approach to virtual-driving technology that is intended to flexibly integrate with a variety of OEMs. This approach is less vertically integrated than those of certain of our competitors and gives rise to a number of uncertainties regarding our business model, including:
As a result of our software-focused business model, we expect to realize certain benefits including reduced capital requirements associated with fleet ownership and operation, as well as reduced operating expenses required to market and commercialize our technology. However, such benefits may not materialize. For example, as a result of this approach our success will depend in large part on our OEM partners’ ability to integrate, deploy, and effectively commercialize our technology. We may experience significant revenue concentration with our limited set of OEM partners who may as a result have increased negotiating leverage in their dealings with us. The expected cost savings associated with our software-focused business model may not be sufficient to offset the value-sharing associated with our OEM partnerships or may cause our approach to be less profitable than vertically-integrated business models.
Moreover, autonomous driving technology is a new offering, and the appropriate price points and pricing models are as yet undetermined. While we believe that our Driver-as-a-Service (“DaaS”) model will be attractive to fleet operators, the DaaS model is unproven and may fail to gain commercial acceptance. Going forward, we expect the volume of committed DaaS contracts to be an important indicator of our future performance, and we currently have no binding commitments from fleet operators to enter into DaaS agreements. As more market participants achieve sufficient safety and autonomy to begin commercialization, increased competition may result in pricing pressure and reduced margins and may impede our ability to increase revenue or cause us to lose market share, any of which could materially and adversely affect our business, financial condition, and results of
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operations. Unfavorable changes in any of these or other factors, many of which are beyond our control, could materially and adversely affect our business, prospects, financial condition and results of operations.
Deployment and commercialization may be delayed due to delays in our anticipated timeline for completion and validation of acceptable safety testing and measures for our technology and the development of plans for ensuring acceptable driver-out safety, delays in the production, reliability or revision of truck and computer hardware required for our technology from our partners or suppliers.
We are currently in pilot operations with International Motors, LLC (“International”) including trial operations on live commercial freight routes, however we currently have no fully driverless active deployments for SuperDrive and there can be no guarantee that such deployments will be achieved. Deployment and commercialization of our technology requires that we meet exacting standards for safety and reliability, which may be delayed. Until we have completed and validated acceptable safety testing and measures for our technology, the commercial applications of our technology will be limited, and our OEM partners’ deployment of our technology may be delayed. If our technology fails to perform as intended or its development takes longer than currently projected, our commercial competitiveness, prospects, business, financial condition and results of operations may be adversely affected.
Once validated, deployment and commercialization of our technology will also depend on our OEM partners’ manufacture and distribution of autonomous vehicles that utilize our technology. This could be subject to delays or challenges experienced by our OEM partners in integrating our technology, changes in their designs, or challenges in production of autonomous vehicles that utilize our technology, including due to potential disruption to our OEM partners’ supply chains. If our OEM partners’ deployment of our technology is subject to unforeseen delays, our commercial competitiveness, prospects, business, financial condition and results of operations may be adversely affected.
Our OEM partners and their customers, or the industry more generally, may delay, scale back or deprioritize the necessary investment required for the adoption of our technology or autonomous technology generally.
Adoption of our technology, and autonomous technology generally, involves significant changes to the manufacture and operation of trucks. Our business model is dependent on our OEM partners’ ability to sell vehicles fitted with our technology to their end fleet customers. Accordingly, our future growth is dependent on the demand for, and end fleets’ willingness to adopt, autonomous driving solutions for their trucking needs as well as regulation of autonomous driving solutions. If demand for our technology by our OEM partners and their customers is not as we anticipate, our business, results of operations and financial condition will be harmed. Our OEM partners and their customers, or the industry more generally, may delay, scale back or deprioritize the necessary investment required for the adoption of our technology or autonomous technology generally. The amount of time and capital required for our OEM partners to retool their manufacturing facilities to produce autonomous vehicles that utilize autonomous technology is significant. Our OEM partners and their customers, and the industry generally, may delay, scale back or deprioritize this investment due to financial constraints, a desire to evaluate or pursue alternative technologies, adverse safety incidents (whether involving our technology or that of a competitor), adverse publicity, political, employee or organized labor pressures, and ethical concerns regarding the use of artificial intelligence, among others. And delay in the adoption of our technology, or autonomous technology generally, could harm our business, results of operations and financial condition.
We are highly dependent on the services of our senior management team and, specifically, our Co-Founders. If we are not successful in retaining our senior management team or in attracting and retaining other highly qualified personnel, our business, financial condition, and results of operations may be harmed.
We are highly dependent on the continued services of our senior management team, which has extensive experience in the autonomous driving industry. The loss of any one or more members of our senior management team, for any reason, including resignation or retirement, could impair our ability to execute our business strategy and could materially and adversely affect our business, financial condition, and results of operations. In particular, we are highly dependent on our co-founders, who remain deeply involved in all aspects of our business, including product development. If our co-founders ceased to be involved with us, it could make it more difficult for us to, among other things, compete with other market participants, manage our R&D activities and retain existing partners or cultivate new ones.
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Our success similarly hinges on the ability to attract, motivate, develop and retain a sufficient number of other highly skilled personnel, including software, systems engineering, automotive, safety, operations, design, finance, marketing, and support personnel. Competition for qualified highly skilled personnel can be strong, especially in the autonomous driving industry, and we can provide no assurance that we will be successful in attracting or retaining such personnel now or in the future. Employees may be more likely to leave us if the shares of our capital stock they own or the shares of our capital stock underlying their equity incentive awards have significantly reduced in value or the vested shares of our capital stock they own or vested shares of our capital stock underlying their equity incentive awards have significantly appreciated. The significant reduction in the value of the Post-Closing Company common stock may require us to grant additional or larger individual equity incentive awards in order to prevent employee departures and to attract new personnel. The issuance of additional shares upon settlement or exercise of those awards would result in dilution to the holders of the Post-Closing Company common stock and increase the number of shares eligible for resale in the public market and may have a negative impact on our stock price.
Many of our employees may receive significant proceeds from sales of our equity in the public markets once their applicable vesting restrictions are satisfied and applicable lock-up restrictions expire, which may reduce their motivation to continue to work for us. Further, any inability to recruit, develop and retain qualified employees, particularly in the highly competitive market for AI developers and engineers, may limit our ability to grow our teams as we commercialize or result in high employee turnover and may force us to pay significantly higher wages, which may harm our profitability.
Laws and regulations may also restrict our ability to attract, motivate and retain the required level of qualified personnel. For example, many of our personnel in the United States are qualified foreign nationals whose ability to live and work in the United States is contingent upon the continued availability of appropriate visas. We expect to continue to rely on foreign nationals to fill part of our recruiting needs. As a result, changes in United States immigration policies, work permit regulations, or visa requirements, including changes that limit the availability of certain work visas or increase visa fees, may adversely affect our ability to retain and hire qualified personnel. If work permits are denied, revoked, or not renewed, we may face disruptions in our operations, increased costs for hiring and training replacements, and potential delays in project execution. While it is difficult to predict the political and economic events that could affect immigration laws, or the restrictive impact they could have on obtaining or renewing work visas for our technology professionals, the current United States administration has made restricting immigration and reforming the work visa process a priority. If we are not able to continue to attract and retain, on acceptable terms, the qualified personnel necessary for the continued development of our business, we may not be able to sustain our operations or growth.
In addition, California, where we are based, recently enacted two new state laws that expand the geographic reach of California’s existing limitations on the enforceability of certain non-compete and other restrictive covenants and provide for affirmative notice of, and private enforcement rights relating to, the enforceability of certain non-compete and other restrictive covenants with respect to California-based employees. To the extent these types of non-solicitation and non-competition covenants are not enforceable against employees following any departure from employment with us, our ability to retain key personnel may be diminished and competition for human resources, customers and business may increase, which could adversely affect our financial condition, results of operations and cash flow.
Additionally, we do not carry key person insurance for any of our management executives, and the loss of any key employee or our inability to recruit, develop and retain these individuals as needed, could materially and adversely affect our business, financial condition and results of operations.
Our brand and reputation may be harmed by negative publicity or safety and other concerns, including due to any flaws or misuse of autonomous driving technologies, whether actual or perceived, intended or inadvertent, committed by us or by other third parties.
Our technology and our industry generally are frequently the subject of publicity, including negative publicity. In addition, independent industry sources may provide reports evaluating our technology, as well as those of our competitors, and the perception of our technology in the marketplace may be significantly influenced by these
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reports. If publicity regarding us is negative, or less positive as compared to those of our competitors, our reputation may be adversely affected.
Autonomous driving technology presents a risk of significant injury, including fatalities, and any road incidents involving vehicles associated with us may result in negative publicity, reputational damage or slower market adoption of our technology. Because autonomous vehicles represent an emerging technology with a limited history of commercial operation, they are not well understood among the public. Concerns regarding the safety of our technology, and of autonomous driving technologies generally, may result from misperceptions of us, our partners or other third parties. Moreover, because we operate in a highly competitive market with a limited history of commercialization, differences in reputation or perceived differences in safety may be particularly influential and it may be particularly challenging to address negative publicity or safety concerns should they occur. Any damage to our brand and reputation could significantly harm our business, results of operations and financial condition.
Risks Related to Our Business Operations
Our business plan requires additional capital investment. In addition, our future capital needs may require us to sell additional equity or debt securities that may dilute our stockholders. The terms of any financing that we pursue may be less favorable than previously anticipated and could become less favorable depending on the amount of capital we may require.
As a result of our limited operating history and limited historical data on the demand for our technology, our future capital requirements are uncertain and actual capital requirements may be different from those we currently anticipate. We expect to continue investing in research and development to develop and deploy our virtual driver software. While we expect the proceeds of the business combination to fund our operations until commercialization of our SuperDrive technology, the net cash proceeds from the business combination may be less than expected due to high levels of redemptions or otherwise and unexpected increases in costs or delays in the timing of the deployment of our technology, including SuperDrive, may cause us to require additional equity or debt financing to fund a portion of our future expenditures. Such financing might not be available to us in a timely manner, on favorable terms, or at all.
Our ability to obtain any necessary additional financing to carry out our business plan is subject to a number of factors, including general market conditions and investor acceptance of our business model. We may raise these additional funds through the issuance of equity, equity-linked, or debt securities. To the extent that we raise additional financing by issuing equity securities or equity-linked securities, our stockholders may experience substantial dilution. To the extent we engage in debt financing, we may become subject to restrictive covenants that may limit our flexibility in conducting future business activities. Financial institutions may request credit enhancements such as third-party guarantees and pledges of equity interest in order to extend loans to us. Additional funding may be more difficult to obtain, or may be more expensive, as a result of increases in inflation and interest rates in the U.S. economy generally. These factors may make the timing, amount, terms and conditions of such financing unattractive or unavailable to us. If we are unable to raise sufficient funds, we could have to significantly reduce our spending, delay or cancel our planned development activities, or substantially modify our business plan, which could have an adverse impact on our business and financial prospects.
Our budget for capital expenditures and expenses may exceed our expectations or there may be significant redemptions in connection with the business combination, in which cases we may need to raise capital sooner or change our operating plans and timelines.
We are spending significant amounts to develop our virtual driver software. Our actual cash expenses may differ materially from estimates. We expect to continue to incur operating and net losses each quarter until at least the time we begin commercial deployment of our virtual driver software at scale, which could take longer than we expect, or may not occur at all. Our operations may also prove more expensive than we anticipate or may generate lower revenue than we expect, either of which would increase our cash needs and losses. For example, our estimates and assumptions regarding our future expenses and working capital, including future sales, marketing, general and administrative expenses, research and development expenses and expected capital expenditures both before first commercial deployment of our technology and long-term, may be incorrect and actual expenses and
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working capital may exceed such estimates. If our cash expenditures are higher than expected, we may need to raise capital sooner than expected or change our business plans and timelines. In particular, the terms of capital available to us as a development-stage company may be less favorable than if we were to raise additional capital following successful deployment of our virtual driver software. There can be no assurance that we will be able to raise additional capital on acceptable terms or at all.
In addition, if there are significant redemptions in connection with the proposed business combination, we may need to make significant adjustments to our business plan and timelines and will need to seek additional capital. Depending on our available capital resources, we may need to delay or discontinue expected near-term expenditures, which could materially impact our business prospects, financial condition, results of operations and cash flows by limiting our ability to pursue some of our other strategic objectives and/or reducing the resources and third-party contracts available to further develop our design, sales, and manufacturing efforts.
We may experience difficulties in managing our growth and expanding our operations.
As we approach commercial deployment of our virtual driver software, we expect to experience significant growth in the scope and nature of our operations and, accordingly, we expect our expenses to increase as we grow. Our ability to manage our operations and future growth will require us to continue to improve our operational, financial and management controls, compliance programs and systems automation. We are also currently in the process of strengthening our compliance programs, including in relation to export controls, privacy, data protection, cybersecurity and anti-corruption. We will also need to expand our financial and accounting resources and make certain other improvements to support our complex arrangements and the rules governing revenue and expense recognition for our future operations. We may not be able to implement these improvements in an efficient or timely manner, or we may discover deficiencies in existing controls, programs, systems and procedures. Any of these challenges could have an adverse effect on the accuracy of our reporting or on our business relationships, reputation and financial results.
Forward-looking estimates and predictions as to the future deployment of our technology, and the associated adoption curve are subject to significant uncertainty and are based on assumptions and estimates that may prove inaccurate.
We use various estimates in formulating our business plans. We base our estimates upon a number of assumptions that are inherently subject to significant business and economic uncertainties and contingencies, many of which are beyond our control. Our estimates therefore may prove inaccurate, causing the actual amount to differ from our estimates. These factors include, without limitation:
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In particular, our total addressable market and opportunity estimates, estimates of unit economics, pricing, cost, and customer demand that have been or may in the future be publicly disclosed are subject to significant uncertainty and are based on assumptions and estimates that may prove inaccurate. Any estimates relating to the expected size and growth of the markets for virtual driver technology in both the United States and Europe for virtual driver technology in the trucking industry are based on assumptions and estimates that may prove similarly imprecise. We are pursuing prospects in multiple markets that are undergoing rapid changes, including in technological and regulatory areas, and it is difficult to predict the timing and size of the opportunities.
Further, our targets, estimates and forecasts with respect to future deployment of our technology and expenses and working capital associated with the commercialization and deployment of our technology are based on numerous estimates and assumptions with respect to matters specific to our business and general matters, including estimates and assumptions with respect to our business and the revenue models we expect to use in connection with the deployment our technology, industry-wide business, economic, regulatory, market and financial conditions and other future events, all of which are difficult to predict and many of which are beyond our and TVA III’s control. The time at which the assumptions underlying such targets, estimates and forecasts will be realized, if they are realized at all, is highly uncertain. As a result, there can be no assurance that such targets, estimates and forecasts will be realized or that actual performance will yield similar results. In addition, because the many of these targets, estimates and forecasts relate to estimates at scale, the timing of which is uncertain, such information by its nature becomes less predictive with the passage of time.
Unfavorable changes in any of the above or other factors, including around the total addressable market and market opportunity, deployment schedule and capital expenditures, most of which are beyond our control, could materially and adversely affect our business, prospects, financial condition and results of operations. There is no guarantee that we will be able to successfully commercialize our technology at scale within the addressable market opportunities presented.
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Any interruption or failure of information technology and communications systems that we rely upon to operate our business could materially and adversely affect our business, financial condition and results of operations.
We currently rely on Amazon Web Services (“AWS”) to host our technology and support our technology development. The availability and quality of our services, and our ability to operate our business depends on the continued operation of AWS and other information technology, communications systems and other related products and services from third parties. Although we utilize reputable third-party service providers or vendors for telecommunications, computing, storage and hosting of a substantial portion of our data and source code, our systems and those of our providers are vulnerable to damage, interruption or any other compromise as the result of, among others, software bugs and other technical errors, physical theft, fire, terrorist attacks, natural disasters, power loss, war, telecommunications failures, viruses, ransomware, and other malicious code, denial or degradation of service attacks, social engineering schemes, insider theft or misuse or similar risks. It may become increasingly difficult to maintain and improve our performance, especially during peak usage times, as we expand the usage of our platform. Some of our systems may not be fully redundant, and our disaster recovery planning cannot account for all eventualities. Any problems with our third-party cloud hosting providers could result in lengthy interruptions in our business, adversely affecting our business, financial condition and results of operations.
We are subject to cybersecurity risks to our operational systems, security systems, infrastructure, integrated software and partners’ and end-customers’ data processed by us or third-party vendors or suppliers, and any material failure, weakness, interruption, cyber event, incident or breach of security could materially and adversely affect our business, financial condition and results of operations.
We are at risk for breaches of, and cyber events and other incidents impacting: operational systems, including business, financial, accounting, product development, data processing; facility security systems; our software; or confidential, proprietary, personally identifiable and other data, including the data of partners, customers and drivers, that we process or our third-party vendors or suppliers process on our behalf. Any such cyber incident could materially disrupt operational systems; result in the loss or disclosure of intellectual property, trade secrets or other proprietary or competitively sensitive information, technology or materials; compromise certain information of partners, customers, employees, suppliers, drivers or others, and lead to the loss or unavailability of, unauthorized access or damage to, or inappropriate access to, or use, disclosure or other processing of, confidential information and other data we maintain or otherwise process or that is maintained or otherwise processed on our behalf; jeopardize the security of our facilities; or affect the performance of our technology. Incidents such as these could result from software bugs and other technical errors, disasters, insiders (through inadvertence or with malicious intent) or malicious third parties (including nation-states or nation-state supported actors) using sophisticated, targeted methods to circumvent firewalls, encryption and other security defenses, including hacking, distributed denial of service attacks, fraud, social engineering, or other forms of deception. The techniques used by cyber attackers change frequently and may be difficult to detect for long periods of time. We may face difficulties and delays in identifying, responding to, and otherwise addressing security breaches and incidents. These challenges are compounded by recent trends toward hybrid and remote work, which may increase the risk of cyber-attacks, security breaches and incidents. Although we maintain and continue to develop information technology measures designed to protect us from cyber incidents, such measures will require updates and improvements, and we cannot guarantee that such measures will be adequate to detect, prevent or mitigate all potential cyber incidents. The implementation, maintenance, and improvement of these systems requires significant management time, support and cost. There are inherent risks associated with developing, improving, expanding and updating current systems, including the disruption of our data systems and challenges with implementing such changes. Further, we utilize reputable third-party service providers or vendors for storage and hosting of a substantial portion of our data and source code. Our business depends on OEMs and other third-party partners to integrate, deploy, and commercialize our technology, and such parties may also experience cyber incidents through no fault of our own, which could disrupt their commercialization of our technology. We cannot be sure that the systems upon which we rely, including those of our third-party vendors or suppliers, will be effectively implemented, maintained or expanded as planned, and our third-party partners, vendors or suppliers may also experience cyber incidents caused by software bugs and other technical errors, disasters, insiders, or malicious third parties. If we, or third parties on which we rely or partner with, do not successfully implement, maintain or expand systems as planned, our operations may be disrupted, we may be unable to effectively manage our data; we may be required to expend significant resources to make corrections or find alternative sources for
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performing these functions; we may be unable to adequately protect our intellectual property rights and proprietary or competitively sensitive information or technology; we may be unable to achieve and maintain compliance with applicable laws, regulations and contracts; our ability to accurately and timely report our financial results could be impaired and deficiencies may arise in our internal control over financial reporting.
A significant cyber incident could also harm our brand and reputation, result in indemnification obligations under our contracts with other parties or subject us to regulatory inquiries, investigations, and other proceedings, or claims, demands, or other litigation, and otherwise create material costs and liabilities, any of which could materially and adversely affect our business, financial condition and results of operations. Our insurance coverage for cyber-attacks may not be sufficient to cover all the losses we may experience as a result of a cyber incident, and any cyber incident may result in an increase in our costs for insurance or insurance not being available to us on economically feasible terms, or at all. Insurers may also deny us coverage as to any future claim. Any of these results could materially and adversely affect our business, financial condition and results of operations.
Unauthorized control, misuse or manipulation of systems in autonomous vehicles may compromise their operation, safety or data security, any of which could reduce confidence in us and our products and harm our business.
Autonomous vehicles on which our software is deployed contain complex IT systems and are designed with built-in data connectivity, including redundancy measures allowing for remote operation. Our software includes security measures intended to prevent unauthorized access to the information technology networks and systems installed in such vehicles. Hackers or third parties may attempt to bypass those protections to modify, alter, and use such networks and systems to gain control of, or to change, vehicles’ functionality, user interface and performance characteristics, or to access data stored in or generated by the vehicles. Hackers or other third parties may also attempt to gain physical access to individual vehicles to modify software, gain control of or change the vehicles’ functionality, or access data stored on the vehicles. Because the tactics used by such actors change frequently and may not be known until launched against us or our third-party service providers, there can be no assurance that we will be able to anticipate or protect against all potential attacks. Any such security incidents could result in unexpected control of or changes to the vehicles’ functionality and could compromise the safe operation of the vehicles. If hacking of autonomous vehicles occurs, is reported to have occurred or is perceived to have occurred, we may face legal claims or proceedings, regulatory inquiries, investigations, and other proceedings, and negative publicity and harm to our reputation. Similar issues, even if suffered by our competitors or other companies in the autonomous vehicle ecosystem, may also result in negative publicity and concerns about the security of autonomous vehicles in general, which could negatively affect our business, prospects, financial condition, and operating results.
Our technology may not function as intended due to flaws or errors in our software, hardware, systems or processes, product defects, or human error in administering these systems or processes, which may adversely affect our business, financial condition and results of operations.
Our software is highly technical and complex and may contain undetected flaws, errors or vulnerabilities that may cause our software not to perform as intended. Any such flaws, errors or vulnerabilities may adversely affect our business, particularly to the extent such flaws, errors or vulnerabilities are not detected and remedied quickly. Certain errors or defects in our solutions may only be discovered after they have been tested, commercialized, and deployed. Our software relies on neural networks and artificial intelligence, which are relatively newer concepts in computer science. Because software utilizing this approach is less well understood than traditional computational approaches, the prospect of undetected errors or defects may be increased. We have from time to time found defects and errors in our software, internal systems, manual processes, and technical integrations with third-party systems, including as a result of updates to our software and systems. Additionally, new errors or vulnerabilities may be introduced in the future. We may also face government inquiries or investigations, recalls and litigation, including with respect to personal injury or property damage, if our software does not operate as intended. As a result of such defects or errors, we may incur additional costs or expenses to remediate the issues. We rely on our OEM partners to deploy our software on vehicles. As a result, our control over these partners’ production and distribution is limited, which could reduce our ability to ensure proper implementation and configuration of our software or could result in changes to the hardware environment in which our software operates without our knowledge. If there are defects in the manufacture of such hardware or in the implementation and configuration of our software, we may face similar negative publicity, investigations, and litigation, and we
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may not be fully compensated by our OEM partners for any financial or other liability that we suffer as a result. As our business grows in size and complexity, these risks may increase.
We may also periodically release updates and functional enhancements for our software, which increase the possibility of errors. Our software is designed to rapidly process large volumes of sensor data to manipulate complex control components and navigate highly dynamic environments. As a result, the consequences of flaws or errors in our software may cause physical harm or other product safety issues. Similarly, security breaches or incidents, which may be caused by or result from cyber-attacks by hackers or others, computer viruses, worms, ransomware, other malicious software programs, security vulnerabilities, employee or service provider theft, misuse or negligence, phishing, identity theft or compromised credentials, denial-of-service attacks, or other causes, may disrupt the proper functioning of our solutions, cause errors, allow loss or unavailability of, unauthorized access to, or disclosure of, proprietary, confidential or otherwise sensitive data of ours or our customers, and other destructive outcomes. Any of the foregoing issues may lead to product recalls, result in costly and time-consuming efforts to patch or remediate our software, give rise to regulatory inquiries and investigations, and result in indemnification obligations, lawsuits and other liabilities and losses, and negative publicity and harm to our reputation, any of which may adversely affect our business, financial condition and results of operations.
We are subject to evolving and uncertain requirements regarding privacy, data protection, and cybersecurity in numerous jurisdictions and any actual or perceived failure to comply with such requirements may adversely impact our business or require changes to our policies and operations.
Our current and potential future operations and sales subject us to laws and regulations addressing privacy, data protection, cybersecurity, and the collection, use, storage, disclosure, transfer and protection of a variety of types of data. For example, the General Data Protection Regulation and California Consumer Privacy Act of 2018, as amended by the California Privacy Rights Act of 2020, provide for significant compliance obligations and potentially material penalties for non-compliance. Numerous other jurisdictions have proposed or enacted legislation addressing these matters, including state laws similar to the California Consumer Privacy Act that have taken effect, or will go into effect in the near term. These regimes may, among other things, impose privacy, data protection, and cybersecurity requirements, disclosure requirements, and restrictions on data collection, uses, and sharing that may impact our operations and the development of our business. These laws and regulations are evolving rapidly, with new laws and regulations proposed and enacted frequently in various jurisdictions. The nature of our software requires the collection and processing of data from a variety of sensors and although we endeavor to comply with laws and regulations governing the collection and processing of such data, we may not be successful in these efforts or may need to modify our software in response to changes in applicable laws and regulations. New features and functionality that we introduce, or new markets that we enter, may change our obligations under existing or future laws, regulations, contractual obligations, or other actual or asserted obligations to which we are or may become subject, including industry standards.
These laws, regulations and other obligations are rapidly evolving across jurisdictions and the full impact of these obligations on our business remains uncertain at this time. We are assessing evolving privacy, data protection, and cybersecurity regimes and measures we believe are appropriate in response. Since these regimes are evolving, uncertain, and complex, we may need to enhance or otherwise modify our compliance measures and practices as our products, markets, and customer demands further develop. We may incur significant costs, including implementation costs and costs to modify our compliance measures and practices with respect to data storage, data use, and other aspects of data processing, in response to evolving laws, regulations and obligations, and these costs may not be offset by our revenues from operating in applicable markets. In addition, we may not be able to monitor and react to all developments in a timely manner and the compliance measures we adopt may prove ineffective. Any failure, or perceived failure, by us to comply with current or future actual or asserted obligations relating to privacy, data protection, or cybersecurity under laws, regulations, or partner or customer requirements, or other obligations that apply, or are asserted to apply, to us relating to these matters, including any such actual or asserted obligations to prevent or mitigate security breaches or incidents, cyber-attacks, or improper access to, use of, or disclosure or other processing of data, or any cybersecurity issues or cyber-attacks affecting us, our data, or our business, could result in governmental enforcement actions, prosecutions, and other proceedings, private litigation, fines, penalties, and other liabilities, as well as adverse publicity, and may cause partners and customers to lose trust in us. Such events may result in significant costs (including the costs of mitigation and recovery) and liability, a material loss of revenue resulting from the adverse impact on our reputation and brand, disruption to our business
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and relationships and diminished ability to retain or attract partners and end-customers, any of which may have an adverse effect on our reputation and business, financial condition, and results of operations.
Issues associated with our use of artificial intelligence and machine learning, combined with an evolving and uncertain legal and regulatory environment, could materially and adversely affect our business, financial condition and results of operations.
Our software relies on artificial intelligence and machine learning technologies. There are significant risks involved in utilizing artificial intelligence. Issues relating to the use of new and evolving technologies such as artificial intelligence and machine learning may cause us to experience brand or reputational harm, competitive harm, legal liability, and new or enhanced governmental or regulatory scrutiny, and we may incur additional costs to resolve such issues. Known risks of artificial intelligence currently include inaccuracy, intellectual property infringement or misappropriation, privacy, data protection and cybersecurity issues, and data provenance disputes. Perceived or actual technical, legal, compliance, privacy, data protection, cybersecurity, ethical or other issues relating to the use of artificial intelligence may cause public confidence in artificial intelligence and machine learning technologies to be undermined, which could slow the adoption of our software. In addition, litigation or government regulation related to the use of artificial intelligence and machine learning may also adversely impact our and others’ abilities to develop and offer products that use artificial intelligence, as well as increase the cost and complexity of doing so. The use of artificial intelligence and machine learning technologies also presents emerging ethical and social issues and may draw public scrutiny or controversy and may also create or assist in producing unexpected results, flaws or errors in our software, any of which may not be easily detectable. Further, such technologies may not always operate as intended, which could lead to operational inefficiencies and risks. The rapid development of AI tools could also render obsolete certain technologies or tools we currently use, or otherwise provide competitors with a technological edge. Issues relating to our use of artificial intelligence and machine learning technologies and the evolving legal and regulatory landscape applicable to such technologies may adversely affect our reputation, business, prospects, financial condition, and results of operations.
Our customer contracts may not effectively limit our liability in the event of road or other safety incidents involving vehicles using our technology.
In the event that an autonomous vehicle on which our software was deployed experienced a crash or similar incident, our contracts with OEM partners generally apportion liability on the basis of relative fault. As such, the apportionment of liability in connection with any such safety or other incidents would need to be assessed on a case-by-case basis. Although our general approach to contract negotiations is to limit our liability to the extent such safety incidents are caused by or directly result from alleged flaws or errors in our technology, these provisions may not fully or effectively protect us from any or all claims under or as a result of federal, state, or local laws or ordinances, unfavorable judicial decisions in the United States or other countries, or otherwise. In addition, we may incur substantial costs to enforce such limitations of liability, and even claims that ultimately are unsuccessful could result in our expenditure of significant funds, diversion of management's time and other resources, harm to our relationships with our partners, or damage to our brand and reputation.
Our current or future insurance coverage may not be adequate to protect us from all business risks and sufficient insurance may not be available on commercially reasonable terms or at all.
We may be subject, in the ordinary course of business, to losses resulting from automobile liability, product liability, accidents, acts of God, and other claims against us, for which we may have no or limited insurance coverage. Further, because we operate in an emerging industry, insurance policies may not be available to us on terms and rates that are acceptable to us or at all. In addition, as a general matter, the policies that we do have may include significant deductibles or self-insured retentions, and we cannot be certain that our future insurance coverage will be available on the same terms or sufficient to cover all future losses or claims against us. A loss that is uninsured or which exceeds policy limits may require us to pay substantial amounts, which could materially and adversely affect our business, financial condition and results of operations. Further, actions or inactions of others in our industry, through no fault of our own, may materially increase the cost of insurance and/or materially decrease the coverages available to us on commercially reasonable terms. Insurance policies may not exist, or may be insufficient, for possible novel claims or causes of action which may be pled or come into existence in the future based upon our continued development of new technologies.
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Our management team has limited experience in operating a public company.
Our executive officers have limited experience in the management of a publicly traded company. Our management team may not successfully or effectively manage our transition to being a public company that will be subject to significant regulatory oversight and reporting obligations under federal securities laws. Their limited experience in dealing with the increasingly complex laws pertaining to public companies could be a significant disadvantage in that they will likely need to devote a significant portion of their time to these activities, which will result in less time being devoted to the management and growth of our business. In addition, we may not have adequate personnel with the appropriate level of knowledge, experience, and training in the accounting policies, practices or internal controls over financial reporting required of public companies in the United States. Increased use of professional services and advisors to develop and implement the standards and controls necessary for us to achieve the level of accounting standards required of a public company in the United States may increase our costs. It is also possible that we will be required to expand our employee base and hire additional employees to support our operations as a public company, which will increase our operating costs in future periods.
We identified material weaknesses in our internal control over financial reporting in connection with the preparation and audit of our consolidated financial statements for the years ended December 31, 2025 and 2024. We may identify additional material weaknesses in the future that may cause us to fail to meet our reporting obligations or result in material misstatements of our consolidated financial statements. If we fail to remediate existing material weaknesses, identify additional material weaknesses or fail to establish and maintain effective internal control over financial reporting, our ability to accurately and timely report our financial results could be adversely affected.
In connection with the preparation of our consolidated financial statements, the Company identified material weaknesses in our internal control over financial reporting.
A material weakness is a deficiency or combination of deficiencies in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our consolidated financial statements will not be prevented or detected on a timely basis. To date, we have had limited financial and accounting personnel to fully execute our accounting processes and address our internal control over financial reporting. In connection with the preparation of our consolidated financial statements for the years ended December 31, 2025 and 2024, the Company identified material weaknesses in our internal control over financial reporting due to a lack of a sufficient complement of personnel with an appropriate degree of internal controls and accounting knowledge, experience, and training to maintain an effective control environment commensurate with its financial reporting requirements. This material weakness in the control environment contributed to additional material weaknesses in the risk assessment, control activities, and monitoring components of the COSO framework.
Specifically, the Company determined that an insufficient risk assessment was performed to identify risks related to complex and/or non-routine transactions and financial reporting personnel failed to perform control activities and to provide necessary oversight and monitoring of the accounting and reporting of complex and/or non-routine transactions. This control deficiency creates a reasonable possibility that a material misstatement of the Company’s consolidated financial statements would not be prevented or detected on a timely basis and constitutes a material weakness in the Company’s internal control over financial reporting. These material weaknesses resulted in corrected misstatements in the reporting of warrant liabilities and redeemable convertible preferred stock for the fiscal year ended December 31, 2024 and convertible Simple Agreement for Future Equity notes for the fiscal year ended December 31, 2025.
In December 2025, the Company restated its previously issued audited consolidated financial statements for the periods ended and as of December 31, 2024, June 30, 2025, and unaudited condensed consolidated financial statements for the period ended and as of September 30, 2025. The restatement changes the classification of outstanding liabilities related to certain Simple Agreements for Future Equity (“SAFEs”) that became optionally redeemable by the holders for cash beginning on January 1, 2025. The Company has restated the classification of the optionally redeemable SAFEs from noncurrent liabilities to current liabilities in the consolidated balance sheet as of December 31, 2024 to reflect such potential optional redemption right.
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To remediate these material weaknesses, we believe that we must continue to add qualified accounting, finance and tax personnel, formalize and implement written policies, internal control activities and procedures for the review of account analyses for complex and non-routine transactions, and implement and improve systems to automate certain financial reporting processes and to improve efficiency and accuracy.
We have begun taking steps and plan to take additional steps to remediate the underlying causes of the material weaknesses. The actions that we are taking are subject to ongoing senior management review as well as board, and post-closing, audit committee oversight. We cannot estimate how long it will take to remediate the material weaknesses, and our initiatives may not prove to be successful in remediating this material weakness.
These material weaknesses will not be considered remediated until management completes the design and implementation of the measures described above, the controls operate for a sufficient period of time and management has concluded, through testing, that the controls are effective. The measures we have taken to date, and the controls we continue to design and implement, may not be sufficient to remediate the material weaknesses we have identified or avoid potential additional material weaknesses in our internal control over financial reporting in the future. If not remediated or management identifies other material weaknesses in internal control over financial reporting, the Company will be unable to assert that the internal control over financial reporting is effective, which could result in the loss of investor confidence and a decline in the market price of our Post-Closing Company Class A common stock. In addition, to date, the audit of the consolidated financial statements by our independent registered public accounting firm has included a consideration of internal control over financial reporting as a basis of designing their audit procedures, but not for the purpose of expressing an opinion on the effectiveness of our internal controls over financial reporting. When the company ceases to be an emerging growth company we will be required to have our independent registered public accounting firm perform such an evaluation, and additional material weaknesses or other control deficiencies may be identified.
We expect to incur significant additional costs to remediate these material weaknesses, though there can be no assurance that our efforts will be successful or avoid potential future material weaknesses. If not remediated, the company may be unable to maintain compliance with securities law requirements regarding timely filing of periodic reports in addition to applicable stock exchange listing requirements, investors may lose confidence in our financial reporting, and our stock price may decline as a result. We also could become subject to investigations by Nasdaq, the SEC or other regulatory authorities, and become subject to litigation from investors and stockholders, which could harm our reputation and financial condition or divert financial and management resources from its regular business activities.
If we are unable to successfully remediate our current material weaknesses or avoid or remediate any future material weakness, our stock price may be adversely affected and we may be unable to maintain compliance with applicable stock exchange listing requirements. In addition, any such failures could result in litigation or regulatory actions by the SEC or other regulatory authorities, loss of investor confidence, delisting of our securities and harm to our reputation and financial condition, or diversion of financial and management resources from the operation of our business.
There is substantial doubt about our ability to continue as a “going concern,” and we may require additional future funding whether or not the business combination is consummated.
Although our audited consolidated financial statements for the years ended December 31, 2025 and 2024 were prepared under the assumption that we will continue our operations as a going concern, we have incurred and expect to continue to incur significant expenses and operating losses. These circumstances raise substantial doubt about our ability to continue as a going concern, and the report of our independent registered public accounting firm that accompany our audited consolidated financial statements for years ended December 31, 2025 and 2024 include an explanatory paragraph that states certain conditions exist that raise substantial doubt about our ability to continue as a going concern in relation to the foregoing. If we are unable to continue as a going concern, we may be forced to liquidate our assets, and the values we receive for our assets in liquidation or dissolution could be significantly lower than the values reflected in our unaudited condensed consolidated financial statements.
Our future capital requirements will depend on many factors, including our level of investment in research and development to develop and deploy our virtual driver software, the timing of commercial deployment of our
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virtual driver software and the rate of its adoption, and the net cash proceeds of the Business Combination. We expect our expenses and capital expenditures to increase in connection with our ongoing activities, including research and development to develop and deploy our virtual driver software and commercial deployment of our virtual driver software. In addition, upon the completion of the business combination, we expect to incur additional costs associated with operating as a public company. Certain costs are not reasonably estimable at this time, and we may require additional funding and our forecasts anticipate certain customer-sourced income that is not guaranteed.
If we are unable to raise sufficient capital when needed, including as a result of redemptions by Public Shareholders, our business, financial condition and results of operations may be adversely affected, and we may need to significantly modify our operational plans to continue as a going concern. We may enter into one or more additional financings prior to closing, beyond binding agreements for the Convertible Notes and PIPE Investment that have been executed as of the date of this proxy statement/prospectus, and we cannot guarantee that any such additional financing will be obtained. We may also enter into shorter term commercial agreements with our partners to supplement our cash needs, including one or more Strategic Commercial Transactions. For example, in March 2026, TRATON and PlusAI entered into an Autonomy Acceleration Program Agreement to expand their global partnership to accelerate autonomous truck commercialization. Pursuant to the agreement, TRATON agreed to pay the Company up to an aggregate of $25 million upon certain agreed performance milestones, in exchange for providing certain autonomy data, tools & services to TRATON in support of the accelerated progression of their Level 2+ program. The agreement also contemplates that TRATON will receive warrants to purchase up to 7,500,000 shares of Post-Closing Company Class A common stock at an exercise price of $11.50 per share, and we further expect that a designee of TRATON will join the board of directors of PlusAI or the Post-Closing Company. For additional information, see the section of this proxy statement/prospectus titled “PlusAI’s Management’s Discussion and Analysis of Financial Condition and Results of Operations—Significant Events and Transactions—Expanded TRATON Partnership.” As of the date of this proxy statement/prospectus, no binding agreement has been executed with respect to any additional Strategic Commercial Transaction and we cannot guarantee that any such additional funding will be obtained.
The amount of cash on hand following the Business Combination is uncertain because we cannot predict the amount of redemptions by Public Shareholders in connection with the closing of the Business Combination or the final amount of any pre-Closing financing agreements. If the net cash proceeds from the Business Combination are less than expected, due to high levels of redemptions or otherwise, we may not have sufficient liquidity to meet our capital requirements and fund our operating plan. If we do not have sufficient cash to fund our operating plan, we may be required to seek additional funding from debt or equity offerings, reduce research and development initiatives, reduce our growth plans or liquidate our assets. In conjunction with such a liquidation, the values we receive for our assets in liquidation or dissolution may be significantly lower than the values reflected in our financial statements. Further, if we raise additional funds by issuing equity securities or securities convertible or exercisable into equity securities, our stockholders may experience dilution. Adequate additional funding may not be available to us on acceptable terms or at all. If we raise additional capital through debt financing, we may be subject to covenants that restrict our operations including limitations on our ability to incur liens or additional debt, pay dividends, repurchase our securities, make certain investments, and engage in certain merger, consolidation, or asset sale transactions. Any debt financing or additional equity that we raise may contain terms that are not favorable to us or our stockholders and members. If the required financing is not available, or if the terms of financing are less desirable than we expect, we may be required to delay, scale back or terminate some or all of our research and development programs. Our lack of cash resources and our potential inability to continue as a going concern may adversely affect our stock price and our ability to raise new capital or to enter into critical contractual relations with third parties due to concerns about our ability to meet our contractual obligations.
The financial statements contained elsewhere in this proxy statement/prospectus do not include any adjustments that might result from our inability to continue as a going concern. Please see the section of this proxy statement/prospectus entitled “PlusAI's Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources” for additional information.
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A Tranche 1 SAFE investor has delivered a redemption notice with respect to its SAFE which could adversely impact our financial condition, operations and business.
In December 2025, we received a notice from a Tranche 1 SAFE holder to exercise its redemption right. The Company is obligated to pay the holder $10.0 million to settle the outstanding Tranche 1 SAFE, which represents a significant portion of our pre-closing available cash and cash equivalents. Unless the parties negotiate an alternative arrangement, the Company has communicated to the Tranche 1 holder its plans to make payment of $10.0 million to settle the outstanding SAFE upon the closing of the Transactions. Any such payment could materially impact our financial position and operations and require us to seek additional financing.
This redemption notice was sent following the filing for bankruptcy under Chapter 11 of the U.S. Bankruptcy Code by the SAFE holder, for the apparent purpose of funding the bankruptcy case and/or satisfying its obligations to creditors. Thereafter, the SAFE holder confirmed a chapter 11 plan and the SAFE was contributed to a creditor trust to be monetized for creditor recoveries. As a result, the SAFE holder will likely prefer that we satisfy our obligations in cash rather than with Class A common stock. In connection with this redemption request, we could be subject to litigation, which could potentially include the SAFE holder seeking relief from the Bankruptcy Court. The results of litigation cannot be predicted with certainty, and even if a dispute, if any, was resolved in our favor, such a dispute, and the time and resources necessary to litigate or resolve it, could harm our financial condition, operations and business.
We are subject to the tax laws of various jurisdictions, and we could be obligated to pay additional taxes.
We operate in multiple jurisdictions and will be subject to income taxes in federal, state, and local income taxes in the United States and numerous foreign jurisdictions, and our tax liabilities will be subject to the allocation of expenses in differing jurisdictions. Our future effective tax rates could be subject to volatility or adversely affected by a number of factors, including changes in the valuation of our deferred tax assets and liabilities; expected timing and amount of the release of any tax valuation allowances; tax effects of stock-based compensation; changes in tax laws, regulations or interpretations thereof; or lower than anticipated future earnings in jurisdictions where we have lower statutory tax rates and higher than anticipated future earnings in jurisdictions where we have higher statutory tax rates. We may also be subject to audits of our income, sales, VAT and other transaction taxes by taxing authorities. Outcomes from these audits could materially and adversely affect our business, prospects, financial condition and results of operations. Our future effective tax rates could be affected by changes in the mix of earnings in countries with differing statutory tax rates, changes in the valuation of deferred tax assets and liabilities and changes in tax laws or their interpretation. In addition, we may be subject to income tax audits by various tax jurisdictions. Although we believe our income tax liabilities are reasonably estimated and accounted for in accordance with applicable laws and principles, an adverse resolution by one or more taxing authorities could have a material impact on the results of our operations.
Many countries are beginning to implement legislation and other guidance to align their international tax rules with the Organization for Economic Cooperation and Development's (“OECD”) Base Erosion and Profit Shifting recommendations and action plan that aim to standardize and modernize global corporate tax policy, including changes to cross-border tax, transfer pricing documentation rules, and nexus-based tax incentive practices. The OECD is also continuing discussions surrounding fundamental changes in allocation of profits among tax jurisdictions in which companies do business, as well as the implementation of a global minimum tax (namely the “Pillar One” and “Pillar Two” proposals). Many countries have enacted or begun the process of enacting laws based on Pillar Two proposals, which may adversely impact our provision for income taxes, net income and cash flows.
Our ability to utilize our net operating loss carryforwards may be limited.
As of December 31, 2025 and 2024, we had estimated U.S. federal net operating loss carryforwards of $138.6 million and $88.9 million, respectively, which carry forward indefinitely. As of December 31, 2025 and 2024, we had estimated cumulative state net operating loss carryforwards of $70.1 million and $69.8 million, respectively, which will begin to expire in 2038. In general, we may potentially use these net operating losses to offset future taxable income for U.S. federal and state income tax purposes. Furthermore, U.S. federal net operating losses arising in tax years beginning after December 31, 2017 may only be used to offset 80% of our taxable income. This may require us to pay U.S. federal income taxes in future years despite generating a loss for U.S. federal
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income tax purposes in prior years. Limitations under state law may differ. We have established a 100% valuation allowance against the carrying value of these deferred tax assets.
In addition to the potential net operating loss carryforward limitations previously noted above, under Section 382 of the Internal Revenue Code, a corporation that undergoes an “ownership change” is subject to limitations on its ability to use its pre-change net operating loss carryforwards to offset future taxable income. The limitations apply if a corporation undergoes an “ownership change,” which is generally defined as a greater than 50 percentage point change (by value) in its equity ownership by one or more stockholders or groups of stockholders who own at least 5% of a company’s stock over a three-year period. If we have experienced an ownership change at any time since our incorporation, we may already be subject to limitations on our ability to utilize our existing net operating loss carryforwards and other tax attributes to offset taxable income or tax liability. In addition, future changes in our stock ownership, which may be outside of our control, may trigger an ownership change. Similar provisions of state tax law may also apply to limit our use of accumulated state tax attributes. As a result, even if we earn net taxable income in the future, our ability to use these or our pre-change net operating loss carryforwards and other tax attributes to offset such taxable income or tax liability may be subject to limitations, which could potentially result in increased future income tax liability to us. In addition, for state income tax purposes, there may be periods during which the use of net operating loss carryforwards is suspended or otherwise limited, which could accelerate or permanently increase state taxes owed. For example, California recently enacted legislation that limits the use of state net operating losses for taxable years beginning on or after January 1, 2024 and before January 1, 2027.
Risks Related to Our Dependence on Third Parties
Our success is dependent on our ability to successfully maintain, manage, execute and expand on our existing partnerships and obtain new partnerships.
Our software is integrated into the vehicles of our OEM partners, who are primarily responsible for the design, manufacture and sale of the vehicles on which our software is deployed. Our current contractual arrangements with our OEM partners are collaboration and proof of concept arrangements only, and not definitive long-term contracts of the kind that we will need to have in place in order to commercialize our product. In order for this business model to be successful, we will need to enter into definitive long-term contracts and commercial arrangements with all of our partners, which expand upon or maintain the current agreements and historic working relationships we have in place. If such contracts do not materialize or our existing contracts terminate, we may not be able to implement our business strategy in the timeframe anticipated, or at all. If we are unable to enter into definitive agreements or are only able to do so on terms that are unfavorable to us, we may not be able to timely identify adequate strategic relationship opportunities, or form strategic relationships, and consequently, we may not be able to fully carry out our business plans. To the extent that we do enter into additional definitive agreements with our partners, these agreements may be subject to termination upon limited notice or may be subject to periodic renegotiation. There can be no assurance that we will be able to maintain or improve upon the terms of any such agreements or that we will be able to maintain our expected share of the value realized from autonomous vehicles. Investors should not place undue reliance on our statements about our development plans and partnerships or their feasibility in the timeframe anticipated, or at all. Furthermore, if our existing or potential OEM partners are acquired, reorganized or otherwise consolidate their business with other OEMs, or if OEMs change their business strategy, existing contracts may be terminated or future prospects lost. For example, in June 2025, IVECO, one of our OEM partners, announced an agreement to be acquired by Tata Motors, which may impact our ongoing OEM partnership with IVECO.
Partners and end-customers may be less likely to purchase our products if they are not convinced that our business will succeed or that our service, technology, and other operations will continue in the long-term. In particular, our OEM-focused approach to distribution may result in significant revenue concentration among our OEM partners and accordingly, in order to build and maintain our business, we must maintain confidence among partners, end-customers, suppliers, analysts, ratings agencies and other parties in our products, long-term financial viability and business prospects. Maintaining such confidence may be particularly complicated by certain factors including those that are largely outside of our control, such as our limited operating history, end-customer unfamiliarity with our technology, any delays in scaling production, delivery and service operations to meet demand, competition and uncertainty regarding the future of self-driving vehicles or our other services compared with market expectations.
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Our software must interoperate with a variety of sensors, systems and other technologies, and any failure to ensure broad interoperability could harm our business or prospects.
Our software is integrated into the vehicles of our OEM partners, who are primarily responsible for the design, manufacture and sale of the vehicles on which our software is deployed. These complex systems are developed, delivered and maintained by our OEM partners in conjunction with a myriad of vendors and suppliers. As a result, the components of our OEM’s designs may have different specifications, rapidly evolve, utilize differing standards, include multiple versions and generations of products or may be highly customized. Our software must be able to interoperate with these highly complex and customized systems, which requires careful planning and execution between us, our OEM partners, and their other vendors and suppliers. Further, when new or updated elements of our OEM partners’ designs or new industry standards, regulations, or specifications are introduced, we may have to update or enhance our software to allow us to continue to effectively interoperate with our OEM’s designs. We have in the past, and could in the future, experience delays in development and production when and if our OEM partners, or their vendors and suppliers, experience delays, disruptions or other constraints. In the event that we, our OEM partners, and their suppliers are unable to effectively collaborate, it could stop or delay our OEM partners’ vehicle design or production, which could delay our ability to recognize revenue, result in adverse publicity, or disrupt our business relationships. The expense and time required to adequately expand compatibility of our software with new designs and hardware may be significant, and the revenue we ultimately realize from such collaborations may not be sufficient to offset our investment. If we fail to ensure sufficient interoperability of our software with a variety of hardware, we may also be unable to expand our network of OEM partners or grow our business in a timely manner or at all. Any of the foregoing could materially and adversely affect our business, financial condition and results of operations.
Our OEM partners may be dependent on limited suppliers for microchips and other component parts that are integral to our software’s deployment in their vehicles.
The rapid evolution in the market for artificial intelligence products, including our autonomous driving technology and its integration into vehicles, is dependent on GPU microchips and hosting services, which are essential for AI training and inference tasks, lidars, vehicle electronic control units, and automotive radar sensors. These components are susceptible to supply shortages, long lead times for components, and supply changes, any of which could disrupt our supply chain and could delay commercialization of our products to users. Supply of these components world-wide may be adversely affected by the business disruptions as well as industry consolidation and geopolitical conditions such as international trade wars like the U.S. trade war with China, tariff policy, Russia’s actions in Ukraine, conflicts and other hostilities in the Middle East, including in Iran, and increased political tensions in Russia, Europe or Asia. Such shortages, increased component lead times, reduced allocations of components and decommitments of orders have resulted in and may continue to result in increased component prices, fewer sourcing options, unpredictability of supply, prolonged manufacturing disruptions and increased product lead times.
In an effort to manage and reduce the costs of purchased goods and services, our OEM partners, like many automotive suppliers and automakers, may have consolidated their supply chains in recent years, resulting in such OEM partners being reliant on a limited number of third-party suppliers to design, develop, industrialize and manufacture components, including GPU microchips, that are integral to the deployment of our software. In order for these suppliers to undertake the investment needed to produce these components, they may require us to commit to terms, pricing or purchase volumes that are not acceptable to us or our OEM partners. If shortages of, or tariff policies on, GPU microchips or other critical components from other suppliers develop, continue longer than anticipated, or worsen, it could impact our or our OEM partners’ ability to meet production schedules and deployment of our software. Furthermore, unfavorable economic or industry conditions could result in financial distress within our or our OEM partners’ supply base, thereby increasing the risk of supply disruption.
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Risks Related to Our Legal and Regulatory Environment
We are subject to evolving and uncertain regulations, including those governing motor carriers and autonomous vehicles, and unfavorable changes to these regulations or any failure by us to comply with these regulations may adversely affect our business, financial condition and results of operations. We may also need to expend significant time and resources, or make changes to our business plan and operations, to respond to regulatory developments and divergent requirements across the regions in which we operate, such as conformity with required safety standards, which may adversely affect our business, financial condition, and results of operations.
Currently, there are no domestic laws that explicitly allow the full implementation or deployment of a commercial autonomous truck with fully driverless operations. Our organizational, operational, and safety processes designed to ensure that the performance of our technology meets rigorous standards may not be sufficient to meet future regulatory requirements enacted by government bodies. Future regulatory requirements in the United States and abroad may also limit the operation and commercialization of autonomous vehicles. Certain jurisdictions may require us to present our own safety justification and evidence base, and in other areas, it is possible that we may be required to pass specific autonomous driving safety tests. We have not yet tested our technology to the full extent possible, in all conditions under which we anticipate operations to occur. The failure to pass required safety tests or receive appropriate regulatory approvals for commercialization would adversely impact our ability to generate revenue at the rate we anticipate, and we may be liable if we fail to comply with such laws and regulations. This might require us to stop or curtail operations or conduct or fund remedial or corrective measures, make additional investments into safety-related improvements or perform other actions.
It is also possible that future regulations of autonomous vehicles, including environmental and health and safety laws and regulations, are not standardized, subjecting our technology to differing regulations across jurisdictions (whether at the federal, state, local, or international level). For example, in Europe, certain vehicle safety regulations apply to automated braking and steering systems, and certain treaties also restrict the operations of certain higher levels of automation. As of June 30, 2026, 26 U.S. states have passed legislation allowing for the deployment of driverless trucks, and most other states allow testing with a safety driver in the vehicle. Many other states are considering legislation and regulations that may adversely affect autonomous and driverless technologies. Despite such advances in U.S. state legislation, there is currently no comprehensive U.S. federal framework for autonomous vehicle deployment. This regulatory patchwork, and the ongoing legislative and regulatory efforts at various jurisdictional levels, may hinder the commercial deployment of our technology and adversely affect our business prospects and financial condition.
By their nature, high volume trade routes often traverse a variety of jurisdictions, meaning that our long-term access to promising opportunities may be dependent on addressing these potentially divergent regulations in a generalizable way. We are also subject to laws and regulations that commonly apply to software businesses, such as those related to privacy, data protection, cybersecurity, tax and consumer protection. These laws and regulations vary from one jurisdiction to another and future legislative and regulatory action, court decisions or other governmental action, which may be affected by, among other things, political pressures, attitudes and climates, as well as personal biases, may have a material impact on our operations and financial results. The enactment of more stringent laws, regulations or permit requirements or other such events may arise in the future and adversely impact the market for our products, which could materially and adversely affect our business, financial condition, and results of operations. Additionally, even if we are able to meet all the regulatory requirements in a single state jurisdiction or fulfill any applicable federal requirements in the United States, there can be no assurance that such measures will be sufficient to meet all regulatory requirements in other state or foreign jurisdictions or fulfill the requirements of any other applicable US or foreign regulatory authority. If any foreign regulatory authority does not accept our technology, it would result in the need for additional changes, which would be costly and time-consuming and delay aspects of our business plan, and which may result in our technology not receiving the requisite approval or clearance for commercialization in the applicable jurisdiction.
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Regulatory and legislative developments related to the use of artificial intelligence and machine learning could adversely affect our use of such technologies in our software.
We use artificial intelligence throughout our business, including as an integral foundation to our autonomous driving software. As the regulatory framework for artificial intelligence and machine learning (including generative AI) evolves, our business, financial condition and results of operations may be adversely affected. The regulatory framework for artificial intelligence and similar technologies is changing rapidly. It is possible that new laws and regulations will be adopted in the United States and in non-U.S. jurisdictions, or that existing laws and regulations may be interpreted in ways that would affect the operation of our software and the way in which we use artificial intelligence, machine learning and similar technologies. We may not be able to adequately anticipate or respond to these evolving laws and regulations, and we may need to expend additional resources to adjust our offerings in certain jurisdictions if applicable legal frameworks are inconsistent across jurisdictions. In addition, because these technologies are themselves highly complex and rapidly developing, it is not possible to predict all of the legal or regulatory risks that may arise relating to our use of such technologies. Further, the cost to comply with such laws or regulations could be significant and would increase our operating expenses, which could adversely affect our business, financial condition and results of operations.
For example, in Europe, the European Union’s Artificial Intelligence Act (AI Act) entered into force on August 1, 2024. The AI Act establishes a risk-based governance framework for regulating high-risk AI systems operating in or being used by the EU market. The AI Act could impact our products, business, and use of artificial intelligence, even with respect to our business outside of the EU. This framework categorizes artificial intelligence systems based on the risks associated with such AI systems’ intended purposes as creating “unacceptable”, “high” or “limited” risks. While the AI Act has not yet been enforced, there is a risk that our current or future AI-powered software or applications may be categorized as “high” risk or “limited” risk, obligating us to comply with the applicable requirements of the AI Act, which may impose additional costs on us, increase our risk of liability, or adversely affect our business. For example, “high” risk AI systems are required, amongst other things, to implement and maintain certain risk and quality management systems, conduct certain conformity and risk assessments, use appropriate data governance and management practices, including in development and training, and meet certain standards related to testing, technical robustness, transparency, human oversight, and cybersecurity. Even if our AI systems are not categorized as “high” risk we may be subject to additional transparency and other obligations for “low” risk AI system providers. The AI Act sets forth certain penalties, including fines of the greater of EUR 35 million or 7% of worldwide annual turnover (as defined in the AI Act) for the prior year for violations related to offering prohibited AI-systems or data governance, fines of the greater of EUR 15 million or 3% of worldwide annual turnover for the prior year for violations related to the requirements for “high” risk AI systems, and fines of the greater of EUR 7.5 million or 1.5% of worldwide annual turnover for the prior year for violations related to supplying incorrect, incomplete or misleading information to the EU and member state authorities. The AI Act’s regulatory framework is expected to have a material impact on the way AI is regulated in the EU and across the world. Other jurisdictions also have proposed, and in certain cases enacted, laws and regulations addressing the use and development of AI. For example, in the United States, numerous states have proposed or have enacted laws addressing these matters, and in the United Kingdom, the government has published a white paper calling for existing regulators to implement certain specific principles to guide and inform the responsible development and use of AI. The AI Act and other evolving laws and regulations addressing AI, together with developing guidance and/or decisions in this area, may affect our use of AI and our ability to provide and to improve our services, require additional compliance measures and changes to our operations and processes, result in increased compliance costs and potential increases in civil claims against us, and could adversely affect our business, financial condition and results of operations.
We are subject to international labor laws and employee representative bodies and stakeholders.
While a majority of our operations are not subject to organized labor agreements, certain of our operations in Germany include a formal representation of employees by a works council and the application of a collective bargaining agreement. We regularly conduct, or are involved in, negotiations with the relevant employee representative bodies.
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While we believe that we have good relations with the works council and employees generally today, there can be no assurance that such relations will not deteriorate and that we will not experience labor disputes in the future. Any deterioration of these relationships could adversely impact our business, financial condition and results of operations. We may face strikes or similar types of conflicts with works councils and our employees in the future. Any such strikes, conflicts, work stoppages or other industrial actions may disrupt our development timeline, damage our reputation and adversely affect our partnership relations, which could in turn have a material adverse effect on our business, financial condition and results of operations.
Works council and collective agreements may additionally increase our labor costs, divert management's attention from operating our business, or impose obligations and restrictions on us that may adversely affect our flexibility to undertake adjustments to our workforce, restructurings, reorganizations and similar corporate actions. In addition, certain measures we undertake are generally subject to works councils’ co-determination rights, in particular in relation to occupational pension schemes, the implementation and use of IT systems, variable remuneration schemes and working time systems. Potentially extensive exercise of codetermination rights by the works councils may result in operational difficulties and in us being prevented from implementing planned policy or IT system changes, among other things.
Regulatory changes adverse to us or our customers or partners may be prompted by negative publicity of our industry, including due to any high-profile safety incidents associated with driverless technology or due to pressure from unions or labor groups on behalf of truck drivers.
Rulemaking and other regulatory activity in our industry often attracts significant public interest and public hearings. Instances of negative publicity following high profile safety incidents involving autonomous vehicles have attracted, and may in the future attract, significant public attention. Moreover, lawmakers in various jurisdictions have been the subjects of significant lobbying efforts and political action by unions or labor groups. For example, organized labor, in particular the International Brotherhood of Teamsters, has opposed autonomous driving technology and is increasingly using its political influence to attempt to slow or stop driverless deployment. In 2025, approximately 20 states introduced legislation promoted by supporters of organized labor that would require human drivers to be physically present in all commercial motor vehicles equipped with autonomous driving technology. These states included California, Colorado, Delaware, Nevada, New Mexico and Texas. As of June 30, 2026, no such introduced legislation has become law; however, organized labor and other opponents to driverless development may ultimately be successful and, even if unsuccessful, we may spend significant time and resources in opposition to such efforts, any of which may adversely affect our business, prospects, and results of operations. Such publicity and lobbying may result in additional restrictions, regulations, safety requirements or other constraints on the development or operation of autonomous vehicles, any of which may harm our business, results of operations and financial condition.
We are subject to governmental export and import control laws and regulations and trade and economic sanctions. Our failure to comply with these laws and regulations could materially and adversely affect our business, prospects, financial condition and results of operations.
Our products and solutions are subject to export control and import laws and regulations, including the U.S. Export Administration Regulations, U.S. Customs regulations and various economic and trade sanctions regulations administered by the U.S. Treasury Department’s Office of Foreign Assets Controls as well as similar controls established in the countries in which we do business. Export control laws and regulations and economic sanctions prohibit the shipment of certain products and services to embargoed or sanctioned countries and their governments and restricted or sanctioned persons. In addition, complying with export control and sanctions regulations for a particular geography may be time-consuming and result in the delay or loss of revenue opportunities. Exports of our products and technology must be made in compliance with these laws and regulations. If we fail to comply with these laws and regulations, we and certain of our employees could be subject to substantial civil or criminal penalties, including the possible loss of export or import privileges, fines, which may be imposed on us and responsible employees or managers and, in extreme cases, the incarceration of responsible employees or managers. Additionally, any allegations of non-compliance with sanctions laws could subject us to whistleblower complaints, adverse media coverage, investigations, prosecution, enforcement actions, fines, damages, severe administrative, civil and criminal sanctions, loss of export privileges, collateral consequences, remedial measures, suspension or debarment from government contracts and legal expenses, all of which could materially and adversely affect our business, prospects, financial condition and results of operations and also our reputation.
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For example, the U.S. government has continued to increase controls restricting the ability to send, without an export license, certain products and technology related to semiconductors, semiconductor manufacturing, and supercomputing to China as well as other identified countries and companies headquartered in China and these other countries. These controls apply broadly to a continuously expanding list of items including certain integrated circuits, hardware containing these specified integrated circuits, semiconductor manufacturing equipment, and could be expanded to other products applicable to our business. Although we do not operate or plan to operate in China for the foreseeable future, it is possible that restrictions of this nature may be extended to other jurisdictions. Moreover, the Chinese government is expanding its control on exports, and these controls or other measures could impact our business or those of our OEM partners.
Federal and state governments may also seek to prohibit, restrict, or otherwise condition the procurement or use of products or components used in autonomous vehicles that are manufactured outside or by companies domiciled outside the United States. For example, on January 31, 2024, and again on October 21, 2024, the U.S. Department of Defense identified Hesai Technology Co., Ltd. (“Hesai”), a lidar manufacturer based in China, as a Chinese Military Company in accordance with Section 1260H of the National Defense Authorization Act for Fiscal Year 2021, which will prohibit the Defense Department from contracting with Hesai in the future. Additionally, the U.S. Department of Commerce’s Bureau of Industry and Security (“BIS”) recently issued a final rule imposing controls on transactions involving certain information and communications technology and services that are designed, developed, manufactured, or supplied by persons owned by, controlled by, or subject to the jurisdiction or direction of certain enumerated foreign adversaries (including China and Russia) and that are integral to passenger connected vehicles under 10,001 pounds. BIS noted in its announcement of the final rule that it intends to pursue a similar rulemaking to address trucks and buses in the near future but provided no additional information on this effort or its anticipated timeline. Legislation has also been introduced in some U.S. states that proposed to prohibit and/or condition the use of Chinese-origin lidar in autonomous vehicles. Enactment of any prohibitions, restrictions, or conditions on our or our OEM partners’ ability to procure or use such products or components could materially and adversely affect the development and deployment of our technology, our operating plans, and our anticipated commercialization timelines.
In addition, various countries regulate the import of certain encryption technology, including through import permit and license requirements, and have enacted laws that could limit our ability to distribute our products or could limit our OEM partners’ ability to deploy our software in those countries. Any change in export or import regulations, economic sanctions or related legislation, shift in the enforcement or scope of existing regulations or change in the countries, governments, persons or technologies targeted by such regulations could result in decreased use of our products by, or in our decreased ability to export or sell our products to, existing or potential partners with international operations or create delays in the introduction of our technology into certain international markets. Any decreased use of our technology or limitation on our ability to export or sell it could adversely affect our business, financial condition, results of operations and prospects.
We may become involved in legal and regulatory proceedings, investigations or actions, and commercial or contractual disputes, which could harm our business, financial condition and results of operations.
We may be, from time to time, involved in litigation, regulatory proceedings and commercial or contractual disputes that may be significant. These matters may include, without limitation, disputes with our suppliers and partners, intellectual property rights infringement or misappropriation claims, stockholder litigation, government investigations, class action lawsuits, personal injury claims, environmental issues, customs and value-added tax disputes and employment and tax issues. In addition, we have in the past and could face in the future a variety of labor and employment claims against us, which could include but is not limited to general discrimination, wage and hour, privacy and data protection, ERISA or disability claims. In such matters, government agencies or private parties may seek to recover from us very large, indeterminate amounts in penalties or monetary damages (including, in some cases, treble or punitive damages) or seek to limit our operations in some way. These types of disputes could require significant management time and attention or could involve substantial legal liability, adverse regulatory outcomes, and/or substantial expenses to defend. Often these proceedings raise complex factual and legal issues and create risks and uncertainties. No assurances can be given that any proceedings and claims will not have a material and adverse impact on our business, financial condition or results of operations or that our established reserves or our available insurance will mitigate this impact.
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We are subject to, and must remain in compliance with, numerous laws and governmental regulations concerning the manufacturing, use, distribution and sale of our products. Some of our commercial partners also require that we comply with their own unique requirements relating to these matters.
We develop and plan to sell software that must be integrated with electronic components, including sensors, vehicle controls and computing resources. Such components may be subject to or may contain materials that are subject to government regulation in both the locations where manufacture and assembly of our products takes place, as well as the locations where our software is deployed. This is a complex process which requires continual monitoring of regulations to ensure that we and our partners are in compliance with existing regulations in each market where we operate and where we intend to operate. If there is an unanticipated new regulation that significantly impacts the use and sourcing of various components or requires more expensive components, that regulation could materially and adversely affect our business, prospects, financial condition and results of operations. If we fail to adhere to new regulations or fail to continually monitor the updates, we may be subject to litigation, loss of partners or negative publicity and could materially and adversely affect our business, financial condition and results of operations.
We are subject to, and must remain in compliance with, environmental laws and regulations that may adversely affect our financial condition and results of operations.
Although we are primarily a software business, we are subject to federal, state, local and foreign laws, regulations and ordinances relating to the protection of the environment, including those relating to emissions to the air, discharges to surface and subsurface waters, safe drinking water, greenhouse gases and the management of hazardous substances, oils and waste materials. Federal, state and local laws and regulations relating to the protection of the environment may require the current or previous owner or operator of real estate to investigate and remediate hazardous or toxic substances or petroleum product releases at or from the property. Under federal law, generators of waste materials, and current and former owners or operators of facilities, can be subject to liability for investigation and remediation costs at locations that have been identified as requiring response actions. Compliance with environmental laws and regulations can require significant expenditures. In addition, we could incur costs to comply with such current or future laws and regulations, the violation of which could lead to substantial fines and penalties.
We may have to pay governmental entities or third parties for property damage and for investigation and remediation costs that they incurred in connection with any contamination at our current and former properties without regard to whether we knew of or caused the presence of the contaminants. Liability under these laws may be strict, joint and several, meaning that we could be liable for the costs of cleaning up environmental contamination regardless of fault or the amount of waste directly attributable to us. Even if more than one person may have been responsible for the contamination, each person covered by these environmental laws may be held responsible for all of the clean-up costs incurred. Environmental liabilities could arise and have a material adverse effect on our financial condition and performance. We do not believe, however, that pending environmental regulatory developments in this area will have a material effect on our capital expenditures or otherwise materially adversely affect its operations, operating costs, or competitive position.
We are subject to anti-corruption, anti-bribery, anti-money laundering, and similar laws, and non-compliance with such laws can subject us to administrative, civil and criminal fines and penalties, collateral consequences, remedial measures and legal expenses, all of which could materially and adversely affect our business, prospects, financial condition and results of operations and also our reputation.
We are subject to anti-corruption and anti-bribery laws and anti-money laundering and similar laws and regulations in various jurisdictions in which we conduct or in the future may conduct activities, including the U.S. Foreign Corrupt Practices Act (the “FCPA”), the U.K. Bribery Act 2010, and other anti-corruption laws and regulations. The FCPA and the U.K. Bribery Act 2010 prohibit us and our officers, directors, employees and business partners acting on our behalf, including agents, from corruptly offering, promising, authorizing or providing anything of value to a “foreign official” for the purposes of influencing official decisions or obtaining or retaining business or otherwise obtaining favorable treatment. The FCPA also requires publicly listed companies to make and keep books, records and accounts that accurately reflect transactions and dispositions of assets and to maintain a system of adequate internal accounting controls. The U.K. Bribery Act 2010 and other anti-corruption laws also prohibit non-governmental “commercial” bribery and soliciting or accepting bribes. We sometimes
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leverage third parties to conduct our business abroad. We, our employees, agents, representatives, business partners and third-party intermediaries may have direct or indirect interactions with officials and employees of government agencies or state-owned or affiliated entities, and we may be held liable for the corrupt or other illegal activities of these employees, agents, representatives, business partners or third-party intermediaries even if we do not explicitly authorize such activities. Our policies and procedures that are designed to ensure compliance with these laws and regulations may not be sufficient and our directors, officers, employees, representatives, consultants, agents, and business partners could engage in improper conduct for which we may be held responsible. As we increase our international conduct of business, our risks under these laws may increase.
Any allegations or non-compliance with anti-corruption and anti-bribery laws or anti-money laundering laws could subject us to whistleblower complaints, adverse media coverage, investigations, prosecution, enforcement actions, fines, damages, severe administrative, civil and criminal sanctions, loss of export privileges, collateral consequences, remedial measures, and legal expenses, all of which could materially and adversely affect our business, prospects, financial condition and results of operations and also our reputation. Responding to any investigation or action will likely result in a materially significant diversion of management’s attention and resources and significant defense costs and other professional fees.
We may be subject to product liability that could result in significant direct or indirect costs, which could materially and adversely affect our business, financial condition and results of operations.
Our autonomous vehicle technology presents the risk of significant injury, including fatalities. We may be subject to claims if our technology is involved in an accident and persons are injured or purport to be injured. The occurrence of any errors or defects in our software could make us liable for damages and legal claims. In addition, we could incur significant costs to correct such issues, potentially including product recalls. Any negative publicity related to the perceived quality of our technology could affect our brand image, partner and end-customer demand, and could materially and adversely affect our business, financial condition and results of operations. Liability claims may also result in litigation, including class actions, the occurrence of which could be costly, lengthy and distracting and could materially and adversely affect our business, financial condition and results of operations.
Any product recall of ours or our partners in the future may result in adverse publicity, damage our brand and could materially and adversely affect our business, financial condition and results of operations. In the future, we may voluntarily or involuntarily initiate a recall if any vehicles on which our software is deployed prove to be defective or non-compliant with applicable Federal Motor Vehicle Safety Standards. A recall would prevent the sale of vehicles equipped with our software until the issues are remedied and would involve significant expense and diversion of management’s attention and other resources, which could materially and adversely affect our brand reputation, as well as our business, prospects, financial condition and results of operations.
Risks Related to Our Intellectual Property Rights
We may not be able to adequately obtain, maintain, protect, defend or adequately enforce our intellectual property rights or prevent unauthorized parties from copying or reverse engineering our solutions. We may not be able to protect our intellectual property rights globally, and changes in patent law may diminish the value of patents in general, thereby impairing our ability to protect our products.
The success of our products and our business depends in part on our ability to obtain patents and other intellectual property rights and maintain adequate legal protection for our products in the United States and other international jurisdictions. Even if we are able to protect our intellectual property rights, our competitors may be able to offer similar products and services without infringing or misappropriating our rights. We rely on a combination of copyright, patent, service mark, trademark and trade secret laws, as well as confidentiality procedures and contractual restrictions, to establish and protect our intellectual property and proprietary rights. Intellectual property laws and our procedures and restrictions provide only limited protection and any of our intellectual property rights may be challenged, invalidated, circumvented, infringed or misappropriated. If we fail to protect our intellectual property rights adequately, we may lose an important advantage in the markets in which we compete. While we take measures to protect our intellectual property, such efforts may be insufficient or ineffective, and any of our intellectual property rights may be challenged, which may result in them being narrowed in scope or declared invalid or unenforceable. Other parties may also independently develop technologies that are
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substantially similar or superior to ours. We may also be forced to bring claims against third parties, or defend claims that they may bring against us, to determine the ownership of what we regard as our intellectual property. The measures we take to protect our intellectual property from unauthorized use by others may not be effective and there can be no assurance that our intellectual property rights will be sufficient to protect against others offering products, services or technologies that are substantially similar or superior to ours and that compete with our business.
We cannot assure you that any patents will be issued with respect to our currently pending patent applications or that any trademarks will be registered with respect to our currently pending applications in a manner that gives us adequate defensive protection or competitive advantages, if at all, or that any patents issued to us or any trademarks registered by us will not be challenged, invalidated or circumvented. We have filed for patents and trademarks in the United States and in certain international jurisdictions, but such protections may not be available in all countries in which we operate or in which we seek to enforce our intellectual property rights or may be difficult to enforce in practice. Our currently-issued and applied-for patent and trademark registrations and applications, and any future patents and trademarks that may be issued, registered or applied for, as applicable, may not provide sufficiently broad protection or may not prove to be enforceable in actions against alleged infringers. We also cannot be certain that the steps we have taken will prevent unauthorized use of our technology or the reverse engineering of our technology.
We rely on trademark protection in various jurisdictions to protect our rights to the mark “PlusAI,” as well as our distinctive logos and other marks associated with our business. We cannot assure you that these measures will be adequate, that we have secured, or will be able to secure, appropriate protection for all of our branding rights in selected jurisdictions or that third parties will not infringe upon or misappropriate our trademarks and brand names. When we update a brand name or logo or when we enter a new territory, we may decide to submit new trademark applications, but there is no guarantee that a new name or logo, or the PlusAI marks in a new territory can be successfully registered where we do not have existing registration for those or similar trademarks. In addition, effective trademark protection may be unavailable or limited for some of our trademarks in some foreign countries in which we operate. Third parties may also oppose our trademark applications, or otherwise challenge our use of the trademarks. In the event that our trademarks are successfully challenged, we could be forced to rebrand our services, which could result in loss of brand recognition, and could require us to devote resources advertising and marketing new brands.
We cannot assure you that third parties will not infringe our intellectual property rights or that we will have sufficient resources to enforce our rights. The protection against unauthorized use of our intellectual property rights, products and other proprietary rights is expensive and difficult, particularly internationally. Unauthorized parties may attempt to copy or reverse engineer our technology or certain aspects of our solutions that we consider proprietary. Litigation may be necessary in the future to enforce or defend our intellectual property rights, to prevent unauthorized parties from copying or reverse engineering our solutions, to determine the validity and scope of the proprietary rights of others or to block the importation of infringing products into the United States.
Any such litigation, whether initiated by us or a third party, could result in substantial costs and diversion of resources and management’s attention, either of which could materially and adversely affect our business, financial condition and results of operations. Any litigation to enforce our intellectual property rights may be met with defenses, counterclaims and countersuits, including attacks on the validity and enforceability of our intellectual property, which could lead to the invalidation of, or render unenforceable, our intellectual property rights, or may otherwise have negative consequences for us. Even if we obtain favorable outcomes in litigation, we may not be able to obtain adequate remedies, especially in the context of unauthorized parties copying or reverse engineering our solutions. In addition, many of our current and potential competitors have the ability to dedicate substantially greater resources to defending intellectual property rights infringement claims and to enforcing their intellectual property rights than we have.
We may not be able to protect our intellectual property rights if we are unable to enforce them or if we do not detect infringement or misappropriation. Our inability to protect our proprietary technology against unauthorized copying or use, as well as any costly litigation or diversion of our management’s attention and resources, may delay the introduction and implementation of new technologies, resulting in our substituting inferior or more costly technologies or injure our reputation. Moreover, policing unauthorized use of our technologies, trade secrets and
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intellectual property may be difficult, expensive and time-consuming, particularly in foreign countries where the laws may not be as protective of intellectual property rights as those in the United States and where mechanisms for enforcement of intellectual property rights may be weak. If we fail to meaningfully establish, maintain, protect and enforce our intellectual property and proprietary rights, our business, financial condition and results of operations may be adversely affected.
Our proprietary works, technologies and information are developed by our employees and contractors. Although it is our policy to require our employees and consultants who may be involved in the conception or development of intellectual property to execute agreements assigning the intellectual property and related rights to us, we may be unsuccessful in executing such an agreement with each party who conceives or develops intellectual property and related rights that we regard as our own or such party may breach the assignment agreement. We may be subject to lawsuits filed by employees or contractors claiming ownership of such intellectual property and related rights. Litigation may be necessary to obtain ownership or to defend against claims challenging inventorship. If we fail in any such litigation, in addition to paying monetary damages, we may lose valuable intellectual property rights. Such an outcome could substantially harm our business, results of operations, and financial condition. Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to our management and other employees, and such claims could substantially harm our business, results of operations and financial condition.
Although not strictly an intellectual property right, we consider our registered domain names to be part of our intellectual property portfolio. We are the registrants for domain names for websites that we use in our business. We may not be able to, or it may not be cost effective to, acquire or maintain all domain names that utilize the name “PlusAI” or other business brands in all of the countries in which we currently conduct or intend to conduct business. Further, we may be unable to prevent competitors or other third parties from acquiring or using domain names that are similar to or diminishes the value of our domain names. If such third party domain name incorporates any of the trademarks that we have registered in the relevant jurisdiction, then we may be able to bring a claim of trademark infringement (see risks related to enforcement of trademark above). If we lose the ability to use a domain name or have to contend with the existence of confusingly similar domain names held by third parties, we could incur additional expenses to market our brand within that country. This could substantially harm our business, results of operations, and financial condition.
We may not be able to protect our intellectual property rights globally, and changes in U.S. intellectual property law may diminish the value of our intellectual property in general, thereby impairing our ability to protect our products.
There are a number of recent changes to the patent laws that may have a significant impact on our ability to protect our technology and enforce our intellectual property rights. Other intellectual property rights, for example rights around the scope of protection that can be claimed for AI/ ML models, datasets, weights, and biases are not fully understood, and may continue to change. Any change to the treatment of intellectual property rights, or to the scope of intellectual property rights may adversely affect our business, financial condition, and results of operations.
Further, the standards applied by the USPTO and foreign patent offices in granting patents are not always applied uniformly or predictably within an organization, or between organizations As such, we do not know the degree of future protection that we will have on our technologies, products, and services. While we will endeavor to try to protect our technologies, products, and services with intellectual property rights such as patents, as appropriate, the process of obtaining patents is time-consuming, expensive, and sometimes unpredictable.
In addition to increasing uncertainty with regard to our ability to obtain patents in the future, this combination of events has created uncertainty with respect to the value of patents, once obtained. Depending on decisions by the U.S. Congress, the federal courts, and the USPTO, the laws and regulations governing patents may change in unpredictable ways that may weaken our ability to obtain new patents or to enforce our existing patents and patents that we might obtain in the future. Actions in foreign jurisdictions may create similar problems or may create divergent issues based on uncertain or different results.
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Third-party claims that we are infringing intellectual property rights, whether successful or not, could subject us to costly and time-consuming litigation or expensive licenses, and our business could be adversely affected.
Although we hold key patents related to our technology, a number of companies, organizations, or individuals, both within and outside of the autonomous vehicle industry, hold other patents covering aspects of autonomous vehicle technology. In addition to these patents, participants in this industry typically also protect their technology, especially embedded software, through copyrights and trade secrets. In recent years, there has been significant litigation globally involving patents and other intellectual property rights. We may in the future receive inquiries from other intellectual property rights holders and may become subject to claims that we infringe their intellectual property rights, particularly as we expand our presence in the market, expand to new use cases and face increasing competition. We are also party to certain agreements that may limit our trademark rights in certain jurisdictions; while we believe these agreements are unlikely to have a significant impact on our business as currently conducted, our ability to use our existing trademarks in new business lines in the future may be limited. In addition, parties may claim that the names and branding of our products infringe their trademark rights in certain countries or territories. Although we intend to vigorously defend our intellectual property rights, if such a claim were to prevail, we may have to change the names and branding of our products in the affected territories and we could incur other costs.
We may not be able to obtain a license on commercially reasonable terms, or on terms that resolve, in whole or in part, the potential risks of intellectual property rights infringement. As we face increasing competition and as a public company, the possibility of intellectual property rights claims against us grows. Such claims and litigation may involve one or more of our competitors focused on using their patents and other intellectual property rights to obtain a competitive advantage, or patent holding companies or other adverse intellectual property rights holders who have no relevant product and service revenue. Our own pending patents and other intellectual property rights may provide little or no deterrence to these rights holders in bringing intellectual property rights claims against us. Patent holding companies may also be advantaged in a lawsuit by limited costs, at least partially because of the lack of products and services. There may be intellectual property rights held by others, including issued or pending patents and trademarks, that cover significant aspects of our technologies or business methods. We cannot assure you that we are not infringing or violating or have not infringed or violated, any third-party intellectual property rights or that we will not be held to have done so or be accused of doing so in the future. In addition, because patent applications can take many years until the patents issue, and may file continuing applications that extend when new claims can be filed at patent and trademark offices, there may be applications now pending of which we are unaware, which may later result in issued patents that our products and services may infringe. We expect that in the future we may receive notices that claim we or our collaborators have misappropriated or misused other parties’ intellectual property rights, particularly as the number of competitors in our market grows.
We currently have a number of agreements in effect pursuant to which we have agreed to defend, indemnify and hold harmless our partners, suppliers, and channel partners and other partners from damages and costs which may arise from the infringement or misappropriation by our products of third-party patents or other intellectual property rights. The scope of these indemnity obligations varies, but may, in some instances, include indemnification for damages and expenses, including attorneys’ fees. We do not carry insurance to cover intellectual property rights infringement or misappropriation claims. A claim that our products infringe or misappropriate a third party’s intellectual property rights, even if untrue, could adversely affect our relationships with our partners, may deter future partners from purchasing our products and could expose us to costly litigation and settlement expenses. Even if we are not a party to any litigation between a partner and a third party relating to infringement or misappropriation by our products, an adverse outcome in any such litigation could make it more difficult for us to defend our products against intellectual property rights infringement or misappropriation claims in any subsequent litigation in which we are a named party. Any of these results could materially and adversely affect our business, financial condition and results of operations.
Our defense of intellectual property rights claims brought against us or our partners, regardless of merit, could be time-consuming and expensive to litigate or settle, could divert resources and management’s attention. If our technology is determined to infringe a valid and enforceable patent, or if we wish to avoid intellectual property litigation on any alleged infringement, misappropriation or other violation of third party intellectual property rights, we may be required to do one or more of the following: (1) cease development, sales, provision or use of our solutions that incorporate, use, implement, or rely on the asserted intellectual property right; (2) obtain a license
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from the owner of the asserted intellectual property right, which may be unavailable on commercially reasonable terms, or at all, or which may be non-exclusive, thereby giving our competitors and other third parties access to the same technologies licensed to us; (3) pay substantial royalties or other damages; or (4) redesign our technology or one or more aspects or systems of our autonomous driving vehicles to avoid any infringement or allegations thereof. The aforementioned options sometimes may not be commercially feasible. Any of these events could materially and adversely affect our business, financial condition and results of operations. Further, a party may secure a judgment against our intellectual property rights and licenses that requires us to pay substantial damages or obtain an injunction.
Our intellectual property rights applications may not issue or be registered, which may adversely affect our ability to prevent others from commercially exploiting products and technologies similar to ours.
We cannot be certain that we are the first inventor of the subject matter to which we have filed a particular patent application, or if we are the first party to file such a patent application. If another party has filed a patent application to the same subject matter as we have or has already published the claimed inventions, we may not be entitled to the protection sought by the patent application. We also cannot be certain whether the claims included in a patent application will ultimately be allowed in the applicable issued patent. Further, the scope of protection of issued patent claims is often difficult to determine. As a result, we cannot be certain that the patent applications that we file will issue, or that our issued patents will afford protection against competitors with similar technology. In addition, our competitors may design around our issued patents, which may adversely affect our business, financial condition and results of operations. Changes to patent law may limit the scope of our patents, limit the enforceability or validity of our patents, or be limited by subject matter eligibility, in part or fully.
As our patents may expire, our patent applications may not be granted and our patent rights may be contested, circumvented, invalidated, or limited in scope. In particular, we may not be able to prevent others from developing or exploiting competing technologies, which may adversely affect our business, prospects, financial condition and results of operations.
We cannot be assured that we will be granted patents pursuant to our pending applications. Even if our patent applications succeed and we are issued patents in accordance with them, these patents may still be contested, circumvented or invalidated in the future. Future innovations by others may provide opportunities to design around our granted patents and pending applications. In addition, the rights granted under any issued patents may not provide us with meaningful protection or competitive advantages. The claims under any patents that issue from our patent applications may not be broad enough to prevent others from developing technologies that are similar or that achieve results similar to ours. The intellectual property rights of others may also bar us and third-party customers and licensees from exploiting any patents that issue from our pending applications or may otherwise limit the breadth of any issued patent claims. Numerous patents and pending patent applications owned by others exist in the fields in which we have developed and are developing our technology. These patents and patent applications may subject our patent applications to invalidation. Finally, any of our existing or pending patents may also be challenged by others on the basis that they are otherwise invalid or unenforceable.
We rely on licenses from third parties for intellectual property rights that are critical to our business, and we would lose the rights to such intellectual property rights if those agreements were terminated or not renewed.
We expect that the long-term contracts and commercial arrangements that we have and intend to enter into with partners may include licenses. We rely on these licenses from our partners for certain intellectual property rights that are or may become critical to our business. Termination of our current or future agreements could cause us to have to negotiate new or amended agreements with less favorable terms or cause us to lose our rights under the original agreements.
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In the event that we lose intellectual property rights relating to technology used in or in conjunction with our software, we may not be able to continue to ensure the interoperability of our software with certain hardware or may experience disruption to our development and commercialization efforts as we test and re-qualify any potential replacement technology. Even if we retain licenses, the licenses may not be exclusive with respect to such component design or technologies, which could aid our competitors and have a negative impact on our business. If such licenses were to terminate prematurely (including due to a breach) or we otherwise fail to maintain such licenses, we may lose the ability to continue our operations that rely on such licenses, which could have a negative impact on our business, financial condition and results of operations.
In addition to patented technology, we rely on our unpatented proprietary technology, trade secrets, processes and know-how.
We rely on technical measures and contractual measures to protect proprietary or competitively sensitive information, technology or materials (such as trade secrets, know-how and confidential information) that may not be patentable or subject to copyright, trademark, trade dress or service mark protection, or that we believe is best protected by means that do not require public disclosure. We typically seek to protect this proprietary information by limiting its disclosure and by entering into confidentiality agreements, consulting services or employment agreements that contain non-disclosure and non-use provisions. We may fail to enter into the necessary agreements, or such agreements may be breached or may otherwise fail to prevent disclosure, third-party infringement or misappropriation of our proprietary information, may be limited as to their term or may not provide an adequate remedy in the event of unauthorized disclosure or use of proprietary information. Trade secrets or confidential information may also be willfully or unintentionally disclosed, including by employees, who may leave our company to join our competitors. We have limited control over the protection of trade secrets used by our current or future OEM partners and suppliers and could lose future trade secret protection if any unauthorized disclosure of such information occurs. In addition, our proprietary information may otherwise become known or be independently developed by our competitors or other third parties. To the extent that our employees, consultants, contractors, advisors and other third parties use intellectual property rights or other technology or materials owned by others in their work for us, disputes may arise as to the rights in related or resulting know-how and inventions. Unauthorized or accidental disclosure of proprietary information or trade secrets may be disclosed to large language models or other artificial intelligence which may in turn disclose that information to third parties. In addition, our proprietary information may otherwise become known or be independently developed by our competitors or other third parties. Costly and time-consuming litigation could be necessary to enforce and determine the scope of our proprietary rights, and failure to obtain or maintain protection for our proprietary information could adversely affect our competitive business position, and any recovery from a litigation may be insufficient to address any harm we have suffered. Furthermore, laws regarding trade secret rights in certain markets where we operate may afford little or no protection to our trade secrets.
We also rely on physical and electronic security measures to protect our proprietary information, but there can be no assurance that they will provide adequate protection or that they will not be breached. Third parties may obtain and improperly utilize our proprietary information to our competitive disadvantage, and we may not be able to detect or prevent the unauthorized use of such information or take appropriate and timely steps to enforce our intellectual property rights. We have limited control over the protection of our trade secrets used by our third-party partners, suppliers, and customers and may lose future trade secret protection if any unauthorized disclosure of such information occurs. Any confidentiality or non-disclosure agreements may be breached or may otherwise fail to prevent disclosure. If any of our trade secrets were to be lawfully obtained by a competitor or other third party from our partners, suppliers, and customers, we may have no right to prevent them from using that trade secret to compete with us. If any of our trade secrets were to be disclosed (whether lawfully or otherwise) to a competitor or other third party, our business, financial condition and results of operations may be adversely affected.
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We may be subject to damages resulting from claims that we or our employees have wrongfully used or disclosed alleged trade secrets of our employees’ former employers.
We may be subject to claims that we or our employees have inadvertently or otherwise used or disclosed trade secrets or other proprietary information of an employee’s former employers. Litigation may be necessary to defend against these claims. If we fail in defending such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights or personnel. A loss of key personnel or their work product could hamper or prevent our ability to commercialize our products, which could severely harm our business. Even if we are successful in defending against these claims, litigation could result in substantial costs and demands on resources and management’s attention.
Our software contains third-party “open source” software components, and failure to comply with the terms of the underlying open source software licenses could restrict our ability to sell our products or our use of those components give rise to disclosure obligations of proprietary software, which could negatively affect our ability to sell our platform and subject us to possible litigation.
Some aspects of our technology incorporate open source software licensed under so-called “open source,” “free” or other similar licenses, and we intend to continue to use open source software in the future. Open source software is generally freely accessible, usable, and modifiable. However, certain open source licenses may, in certain circumstances, require us to offer our software that incorporates the open source software for no cost, make available source code for modifications or derivative works we create based upon the open source software, incorporate or use the open source software, and/or license such modifications or derivative works under the terms of the particular open source license or otherwise unfavorable terms. The terms of certain open source licenses to which we are subject have not been interpreted by U.S. or foreign courts, and there is a risk that open source software licenses could be construed in a manner that imposes unanticipated conditions or restrictions on our ability to monetize our software or enforce our intellectual property rights. While we try to insulate our proprietary code from the effects of such open source license provisions, we cannot guarantee that we will be successful, that all open source software is reviewed prior to use in our software, that our developers have not incorporated open source software into our software in potentially problematic ways, or that they will not do so in the future. Additionally, we may from time to time face claims from third parties claiming ownership of, or demanding release of, the open source software or derivative works that we developed using such software, which could include our proprietary source code, or otherwise seeking to enforce the terms of the applicable open source software license. These claims could result in costly litigation and could require us to make our software source code freely available, purchase a costly license, or cease offering the implicated software unless and until we can re-engineer them to avoid infringement or violation. This re-engineering process could require significant additional research and development resources, and we may not be able to complete it successfully. We could also be subject to suits by parties claiming ownership of what we believe to be open source software. In addition to risks related to license requirements, use of certain open source software can lead to greater risks than use of third-party commercial software, as open source licensors generally do not provide warranties or controls on the origin of software and, thus, may contain security vulnerabilities or broken code. Moreover, some open-source projects have known security and other vulnerabilities and architectural instabilities, or are otherwise subject to security attacks due to their wide availability, and are provided on an "as-is" basis. There is typically no support available for open source software, and we cannot ensure that the authors of such open source software will implement or push updates to address security risks or will not abandon further development and maintenance. Any of these risks could be difficult to eliminate or manage, and if not addressed, could have a negative effect on our business, operating results, and financial condition.
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General Risk Factors
Our business is subject to the risks of earthquakes, fire, floods and other natural catastrophic events, global pandemics, and interruptions by man-made problems, such as terrorism. Material disruptions of our business or information systems resulting from these events could materially and adversely affect our business, financial condition and results of operations.
A significant natural disaster, such as an earthquake, fire, flood, hurricane or significant power outage or other similar events, such as infectious disease outbreaks or pandemic events (such as the outbreak of the COVID-19 pandemic), could materially and adversely affect our business, financial condition and results of operations. We have several offices located in the San Francisco Bay Area, a region known for seismic activity. In addition, natural disasters, acts of terrorism or war, including the ongoing geopolitical tensions related to Russia’s actions in Ukraine and conflicts in the Middle East, including in Iran, could cause disruptions in our remaining operations, our or our partners’ businesses, our suppliers’ or the economy as a whole. We also rely on information technology systems to communicate among our workforce and with third parties. Any disruption to our communications, whether caused by a natural disaster or by man-made problems, such as power disruptions, could adversely affect our business. To the extent that any such disruptions result in development or commercialization delays or impede our partners’ and suppliers’ ability to timely deliver product components, or the deployment of our products, this could materially and adversely affect our business, financial condition and results of operations.
As part of growing our business, we may in the future make acquisitions. If we do not successfully select, execute or integrate our acquisitions, it could materially and adversely affect our business, financial condition and results of operations, and our stock price could decline.
From time to time, we may undertake acquisitions to add new products and technologies, acquire talent, form new strategic partnerships, or enter into new markets or geographies. These transactions may be subject to approval by our stockholders or by relevant government authorities, which could result in increased delay and costs, and may disrupt our business strategy if such approvals are ultimately denied. Acquisitions and the subsequent integration of new assets, businesses, key personnel, partners, customers, vendors and suppliers would likely require significant attention from our management and could result in a diversion of resources from our existing business, which in turn could have an adverse effect on our operations. Acquired assets or businesses may also fail to generate the business or financial results we expect. Key personnel or large numbers of employees who join us through acquisitions may decide to leave to work for other businesses, including our competitors, thereby diminishing the value of our acquisitions. Acquisitions may also entail significant cash expenditures, dilutive issuances of equity securities, the incurrence of significant indebtedness, potential impairments of goodwill, amortization expenses for other intangible assets and exposure to unknown liabilities of acquired businesses. The professional services and other transactional costs associated with selecting, executing and integrating acquisitions may also be significant. Any failure to successfully identify, complete, manage and integrate acquisitions could materially and adversely affect our business, prospects, financial condition and results of operations, and could cause our stock price to decline.
Adverse economic conditions or reduced global trade, including as a result of recent and further changes in the tariff and trade policies, may adversely impact our business.
Our operations, performance and growth depend in part on worldwide economic conditions and the impact these conditions have on levels of activity in global trade and ground transportation. The United States and the global economy have in the past few years experienced high levels of inflation. While inflation rates have recently moderated, the existence of inflation in the U.S. and global economy and the pricing pressure created by rising inflation in prior periods has resulted, and may continue to result, in high interest rates and capital costs, shipping costs, supply shortages, increased costs of labor, weakening exchange rates and other similar effects. Elevated inflation rates can affect our expenses, especially employee compensation. In addition, rising interest rates could adversely affect the value of our investments and cash on hand and increase our borrowing costs. Governments have implemented and are implementing fiscal policy interventions in response to high levels of inflation, including raising interest rates or keeping them at elevated levels. These interventions may also reduce economic growth rates, create recessions and increase unemployment rates.
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In addition, we may be affected by changes in trade policies, treaties, government regulations, and tariffs, as well as geopolitical volatility. For example, uncertainty as to the level and impact of the imposition of existing, new or threatened tariffs on certain countries by the current U.S. presidential administration, as well as any existing or potential further retaliatory measures by impacted trade partners, could adversely impact trade relations, reduce global trade and create general market instability. Trade protection measures, retaliatory actions, tariffs and increased barriers, policies favoring domestic industries, or increased import or export licensing requirements or restrictions could have a negative effect on the overall macro economy and the ground transportation industry in particular.
The impact of economic conditions, including the ongoing effects of inflation, high interest rates, trade policy, and regional or global recessions could materially and adversely affect our business, results of operations and financial condition in a number of ways, including by reducing the demand for ground transportation or delaying or reducing customers’ level of investment in the adoption of autonomous trucks.
Risks Related to Our Organizational Structure Following the Business Combination
We have incurred and will continue to incur significant expenses and administrative burdens as a public company, which may adversely affect our business, prospects, financial condition, and results of operations.
We will face increased legal, accounting, administrative and other costs and expenses as a public company that we did not incur as a private company. The Exchange Act, Sarbanes-Oxley Act, including the requirements of Section 404, as well as rules and regulations subsequently implemented by the SEC, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and the rules and regulations promulgated and to be promulgated thereunder, as well as the Public Company Accounting Oversight Board and the stock exchanges, impose additional reporting and other obligations on public companies. Compliance with public company requirements will increase costs and make certain activities more time-consuming. A number of those requirements require us to carry out activities we have not done previously. For example, we will create new board committees and adopt new internal controls and disclosure controls and procedures. In addition, expenses associated with SEC reporting requirements will be incurred. Furthermore, if any issues in complying with those requirements are identified, we may incur additional costs rectifying those issues, and the existence of those issues may adversely affect our reputation or investor perceptions of it. For example, in connection with the audit of our consolidated financial statements, our management and independent registered accounting firms identified material weaknesses related to our internal control over financial reporting. In addition, we will obtain director and officer liability insurance. Risks associated with our status as a public company may make it more difficult to attract and retain qualified persons to serve on our board of directors or as executive officers. The additional reporting and other obligations imposed by these rules and regulations increase legal and financial compliance costs and the costs of related legal, accounting and administrative activities. To the extent necessary to supplement our internal personnel with professional advisors, such costs may be significantly increased. These increased costs will require us to divert a significant amount of money that may otherwise be used to expand the business and achieve strategic objectives. Advocacy efforts by stockholders and third parties may also prompt additional changes in governance and reporting requirements, resulting in further increased costs.
If we are unable to develop and maintain an effective systems of internal control over financial reporting and disclosure controls, we may not be able to accurately report our financial results in a timely manner, which may adversely affect investor confidence in us and materially and adversely affect our business, financial condition and results of operations.
As a public company, we will be subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, and the listing standards. Among other things, the Sarbanes-Oxley Act and related Exchange Act rules require that we maintain effective disclosure controls and procedures and internal control over financial reporting. Section 404 of the Sarbanes-Oxley Act requires that we evaluate and report on our system of internal controls. In addition, we will be required to have our independent public accounting firm attest to and report on our internal control over financial reporting when we cease qualifying as an “emerging growth company” pursuant to the JOBS Act.
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In connection with the preparation and audits of our consolidated financial statements, we and our independent registered public accounting firms identified material weaknesses in internal control over financial reporting. We have begun taking steps and plan to take additional steps to remediate the underlying causes of the material weaknesses. The measures we have taken to date, and the controls we continue to design and implement, may not be sufficient to remediate the material weaknesses we have identified or avoid potential additional material weaknesses in our internal control over financial reporting in the future. If in future periods we determine that these material weaknesses have not been remediated or we identify other material weaknesses in internal control over financial reporting, we will be unable to assert that our internal control over financial reporting is effective, which could result in the loss of investor confidence and a decline in the market price of our Post-Closing Company Class A common stock.
We are also continuing to develop and refine our disclosure controls and other procedures that are designed to assure that information required to be disclosed by us in the reports that we will file with the SEC is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms and that information required to be disclosed in reports under the Exchange Act is accumulated and communicated to management, including our principal executive and financial officers, to allow timely decisions regarding disclosure. We have expended, and anticipate that we will continue to expend, significant resources to maintain and improve the effectiveness of our disclosure controls and procedures and internal control over financial reporting.
Our current controls and any new controls that we develop may become inadequate because of changes in the conditions in our business. Further, weaknesses in our disclosure controls or our internal control over financial reporting may not be remediated in a timely manner or additional weaknesses may be discovered in the future. Any failure to remediate such weaknesses or to develop or maintain effective controls, or any difficulties encountered in their implementation or improvement, may harm our results of operations or cause us to fail to meet our reporting obligations and may result in a restatement of our financial statements for prior periods. Any failure to implement and maintain effective internal control over financial reporting may also adversely affect the results of periodic management evaluations and annual independent registered public accounting firm attestation reports regarding the effectiveness of our internal control over financial reporting that we will eventually be required to include in our periodic reports that will be filed with the SEC. Ineffective disclosure controls and procedures and internal control over financial reporting may also cause investors to lose confidence in our reported financial and other information, which would likely adversely affect the market price of our securities. In addition, if we are unable to continue to meet these requirements, we may not be able to remain listed on a stock exchange.
Any failure to maintain effective disclosure controls and internal control over financial reporting may adversely affect our business, financial condition, and results of operations and may cause a decline in the market price of our securities.
The Proposed Bylaws will designate a state or federal court located within the State of Delaware as the exclusive forum for certain types of actions and proceedings, and the federal district courts as the exclusive forum for Securities Act claims, which could limit stockholders’ ability to choose the judicial forum for disputes with the Post-Closing Company or its directors, officers, stockholders or employees.
The Proposed Bylaws will provide that, unless the Post-Closing Company consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware (or, if the Court of Chancery does not have jurisdiction, another state court in Delaware or the U.S. District Court for the District of Delaware) shall, to the fullest extent permitted by law, be the sole and exclusive forum for:
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Nothing in the Proposed Bylaws will preclude stockholders that assert claims under the Exchange Act from bringing such claims in federal court, subject to applicable law. The Proposed Bylaws will also provide that, to the fullest extent permitted by law, the federal district courts of the United States will be the sole and exclusive forum for the resolutions of any complaint asserting a cause or causes of action arising under the Securities Act.
Any person or entity purchasing, holding or otherwise acquiring any interest in any of the securities of the Post-Closing Company will be deemed to have notice of and consented to the provisions of the Proposed Bylaws described in the preceding paragraphs. These exclusive-forum provisions may limit a stockholder’s ability to bring a claim in a judicial forum of its choosing for disputes with the Post-Closing Company or its directors, officers, stockholder or other employees, which may discourage lawsuits against the Post-Closing Company and its directors, officers, stockholders and other employees. The enforceability of similar exclusive-forum provisions in other companies’ certificates of incorporation has been challenged in legal proceedings, and it is possible that, in connection with one or more actions or proceedings described above, a court could rule that this provision in the Proposed Bylaws is inapplicable or unenforceable. We also note that stockholders cannot waive compliance (or consent to noncompliance) with the federal securities laws and the rules and regulations thereunder. If a court were to find these exclusive-forum provisions to be inapplicable or unenforceable in an action, the Post-Closing Company may incur additional costs associated with resolving the dispute in other jurisdictions, which could harm its results of operations.
Our business and operations could be negatively affected if we become subject to any securities litigation or stockholder activism, which could cause us to incur significant expense, hinder execution of business and growth strategy and impact our stock price.
In the past, following periods of volatility in the market price of a company’s securities, securities class action litigation has often been brought against that company. Stockholder activism, which could take many forms or arise in a variety of situations, has been increasing recently. Volatility in the stock price of the Post-Closing Company Class A common stock or other reasons may in the future cause it to become the target of securities litigation or stockholder activism. Securities litigation and stockholder activism, including potential proxy contests, could result in substantial costs and divert management’s and the Board’s attention and resources from our business, which may adversely affect our business, financial condition and results of operations. Additionally, such securities litigation and stockholder activism could give rise to perceived uncertainties as to our future, adversely affect our relationships with service providers and make it more difficult to attract and retain qualified personnel. We may also be required to incur significant legal fees and other expenses related to any securities litigation and activist stockholder matters.
Further, our stock price could be subject to significant fluctuation or otherwise be adversely affected by the events, risks and uncertainties of any securities litigation and stockholder activism.
Securities of companies formed through mergers such as the business combination may experience a material decline in price relative to the share price of the TVA III public shares prior to the business combination.
As with most initial public offerings of special purpose acquisition companies (each, a “SPAC”) in recent years, TVA III issued shares as part of the TVA III Public Units for $10.00 per unit upon the closing of its IPO. As with other SPACs, the $10.00 per unit price of TVA III reflected each share having a right to redeem such share for a pro rata portion of the proceeds held in the trust account prior to the Closing and certain other events. Following the IPO the proceeds held in the trust account were initially equal to $10.00 per share. As of June 30, 2026, amounts held in the trust account related to redeemable shares was equal to approximately $10.51 per share. Following the Closing, the shares outstanding will no longer have any such redemption right and will be solely dependent upon the fundamental value of the combined company, which, like the securities of other companies formed through SPAC mergers in recent years, may be significantly less than both the redemption price and the amount per share initially held in the trust account upon consummation of the IPO.
Following the Closing, the multi-class structure of Post-Closing Company common stock will have the effect of
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concentrating voting control with the holders of Post-Closing Company Class B common stock. This ownership will limit or preclude your ability to influence corporate matters.
Following the Closing, Post-Closing Company Class B common stock. will have 20 votes per share, Post-Closing Company Class A common stock will have one vote per share, and Post-Closing Company Class C common stock will have one fourth of one vote per share. Entities affiliated with David Liu and Hao Zheng, our Chief Executive Officer and Chief Technology Officer, respectively, will be the sole holders of the Post-Closing Company Class B common stock. Following the Closing, Messrs. Liu and Zheng, together with their affiliates, will hold in the aggregate 78.4% of the voting power of our capital stock (in the No Redemption Scenario) and 83.3% of the voting power of our capital stock (in the Maximum Redemption Scenario) and will be able to control all matters submitted to our stockholders for approval. This concentrated control will limit or preclude the ability of holders of Post-Closing Company Class A common stock to influence corporate matters for the foreseeable future, including the election of directors, amendments of our organizational documents, and any merger, consolidation, sale of all or substantially all of our assets, or other major corporate transaction requiring stockholder approval. In addition, this may prevent or discourage unsolicited acquisition proposals or offers for our capital stock that Post-Closing Company Class A common stockholders may feel are in their best interest as one group of our stockholders.
Future transfers by holders of shares of Post-Closing Company Class B common stock will generally result in those shares converting to Post-Closing Company Class A common stock, except for certain transfers permitted by our amended and restated certificate of incorporation, including transfers for tax and estate planning purposes so long as the transferring holder of Class B common stock continues to hold exclusive voting and dispositive power with respect to the shares transferred or shares voting and dispositive power with respect to such shares only with certain family members or professional service providers. Further, all shares of Class B common stock will be converted into shares of Class A common stock following the earliest to occur of certain events as described in our amended and restated certificate of incorporation. See the section titled "Description of Securities — Post-Closing Company Capital Stock — Conversion of Class B Common Stock."
We cannot predict the effect our multi-class structure may have on the trading price of Post-Closing Company Class A common stock.
We cannot predict whether our multi-class structure will result in a lower or more volatile trading price of Post-Closing Company Class A common stock, adverse publicity, or other adverse consequences. For example, certain index providers have announced restrictions affecting companies with multiple-class share structures in certain of their indices. In July 2017, FTSE Russell announced that it would require new constituents of its indices to have greater than 5% of a company's voting rights in the hands of public stockholders. Under this policy, the multi-class structure of our common stock could make us ineligible for inclusion in certain indices and, as a result, mutual funds, exchange-traded funds, and other investment vehicles that attempt to passively track those indices would not invest in Post-Closing Company Class A common stock. Because of the multi-class structure of our common stock, we may be excluded from certain indices, and other stock indices may take similar actions. Given the sustained flow of investment funds into passive strategies that seek to track certain indices, exclusion from certain stock indices could preclude investment by many of these funds and could make our Class A common stock less attractive to other investors. As a result, the trading price of our Class A common stock could be adversely affected.
Provisions contained in the Proposed Certificate of Incorporation, the Proposed Bylaws and Delaware law could prevent a takeover that stockholders consider favorable and could also reduce the market price of our stock.
The Proposed Certificate of Incorporation, the Proposed Bylaws and Delaware law contain provisions that could delay or prevent a change in control of the Post-Closing Company. These provisions could also make it more difficult for stockholders to elect directors and take other corporate actions. These include:
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These provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our Board of Directors, which is responsible for appointing the members of our management. In addition, the provisions of Section 203 of the DGCL govern the Post-Closing Company. These provisions may prohibit large stockholders, in particular those owning 15% or more of our outstanding voting stock, from merging or combining with the Post-Closing Company for a certain period of time without the consent of its Board of Directors unless certain provisions are met.
These and other provisions in the Proposed Certificate of Incorporation and Proposed Bylaws and under Delaware law could discourage potential takeover attempts, reduce the price investors might be willing to pay in the future for shares of the Post-Closing Company common stock and result in the market price of our common stock being lower than it would be without these provisions.
Claims for indemnification by our directors and officers may reduce our available funds to satisfy successful third-party claims against us and may reduce the amount of money available to us.
The Proposed Certificate of Incorporation and Proposed Bylaws provide that we will indemnify our directors and officers, in each case to the fullest extent permitted by Delaware law.
In addition, as permitted by Section 145 of the DGCL, the Proposed Bylaws and our indemnification agreements that we entered into with our directors and officers provide that:
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We do not intend to pay dividends for the foreseeable future.
We have never declared or paid any cash dividends on our capital stock and do not intend to pay any cash dividends in the foreseeable future. We expect to retain future earnings, if any, to fund the development and growth of our business. Any future determination to pay dividends on our capital stock will be at the discretion of our Board of Directors. Accordingly, investors must rely on sales of the Post-Closing Company common stock after price appreciation, which may never occur, as the only way to realize any future gains on their investments.
The market price and trading volume of the Post-Closing Company common stock may be volatile and materially and adversely affected by several factors.
Even if an active, liquid and orderly trading market develops and is sustained for the Post-Closing Company common stock, the market price of our common stock may be volatile and may decline significantly. In addition, the trading volume in our common stock may fluctuate and cause significant price variations to occur. If the market price of our common stock declines significantly, you may be unable to resell your shares at an attractive price, or at all. The market price and trading volume of our common stock could fluctuate significantly in response to various factors and events, including the realization of any of the risk factors presented in this proxy statement/prospectus.
Such market and industry factors may materially reduce the market price of our common stock, regardless of our operating performance. Securities markets, including Nasdaq, on which we plan to list our common stock, have from time to time experienced significant price and volume fluctuations that are unrelated to the performance of particular companies.
We may be subject to securities litigation, which is expensive and could divert management’s attention.
The market price of the Post-Closing Company common stock may be volatile and, in the past, companies that have experienced volatility in the market price of their stock have been subject to securities class action litigation. We may be the target of this type of litigation in the future. Securities litigation against us could result in substantial costs and divert management’s attention from other business concerns, which could seriously harm our business.
Future resales of common stock may cause the market price of our securities to drop significantly, even if our business is doing well.
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Sales of a substantial number of shares of Post-Closing Company Class A common stock in the public market could occur. Following the Closing, we will have 48,331,905 shares of Class A common stock and 14,461,572 shares of Class B and 14,757,180 shares of Class C common stock outstanding that were issued in the Business Combination to the PlusAI stockholders. If our stockholders sell, or the market perceives that our stockholders intend to sell, substantial amounts of Post-Closing Company Class A common stock in the public market, the market price of our stock could decline significantly.
Following the Merger, the Sponsor, the Insiders and former securityholders of PlusAI will be subject to certain transfer restrictions with respect to their shares of the Post-Closing Company as follows: (1) as to 50% of such holder’s shares upon the earlier of 180 days after the Closing and the date on which the VWAP of the Post-Closing Company Class A common stock equals or exceeds $12.50 per share during any 20 trading days within any 180 consecutive trading day period following the Closing, and (2) other than Lock-Up Earnout Shares and Plus Founder Shares, with respect to all of a holder’s shares upon the date on which the VWAP of the Post-Closing Company Class A common stock equals or exceeds $15.00 per share during any 20 trading days within any 180 consecutive trading day period following the Closing. Furthermore, the Sponsor is not subject to certain other transfer restrictions as described in the A&R Registration Rights Agreement, and, with respect to all shares of Post-Closing Company Class A common stock into which the TVA III Class B Ordinary Shares convert upon the Domestication, the transfer restrictions will terminate 120 days after the Closing. In addition, pursuant to the PIPE Side Letters, certain Note Investors and PIPE Investors have been granted modified lock-up terms that may result in the early release of their shares relative to the Lock-Up Period described above.
Once such securities are released from lock-up restrictions, the applicable stockholders will not be restricted from selling shares of the Post-Closing Company common stock held by them, other than by applicable securities laws. Sales of a substantial number of shares of our common stock in the public market could occur at any time. These sales, or the perception in the market that the holders of a large number of shares intend to sell shares, could reduce the market price of our common stock.
As restrictions on resale end, the sale or possibility of sale of these shares could have the effect of increasing the volatility in our share price or the market price of our common stock could decline if the holders of currently restricted shares sell them or are perceived by the market as intending to sell them.
Moreover, following the Closing, the Registration Rights Agreement will obligate us to file one or more registration statements with the SEC for the registration for resale of certain securities held by the Sponsor and certain of our significant stockholders. If any of these additional shares are sold, or if it is perceived that they will be sold, in the public market, the market price of our Class A common stock could decline.
Future issuances of debt securities and equity or equity-linked securities may adversely affect the market price of our Class A common stock and may be dilutive to existing stockholders.
In the future, we may incur debt or issue equity ranking senior to our Class A common stock. Those securities will generally have priority upon liquidation. Such securities also may be governed by an indenture or other instrument containing covenants restricting its operating flexibility. Additionally, any convertible or exchangeable securities that we issue in the future may have rights, preferences and privileges more favorable than those of our Class A common stock. Because our decision to issue debt or equity in the future will depend on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing, nature or success of our future capital raising efforts. As a result, future capital raising efforts may reduce the market price of our Class A common stock and be dilutive to existing stockholders.
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Our failure to meet the continued listing requirements of Nasdaq could result in a delisting of our securities.
If we fail to satisfy the continued listing requirements of Nasdaq, such as Nasdaq’s requirements with respect to corporate governance or the minimum closing bid price, Nasdaq may take steps to delist our securities. Such a delisting would likely have a negative effect on the price of the securities and would impair your ability to sell or purchase the securities when you wish to do so. In the event of a delisting, we can provide no assurance that any action taken by us to restore compliance with listing requirements would allow our securities to become listed again, stabilize the market price or improve the liquidity of our securities, prevent our securities from dropping below the Nasdaq minimum bid price requirement or prevent future non-compliance with Nasdaq’s listing requirements. Additionally, if our securities are not listed on, or become delisted from, Nasdaq for any reason, and are quoted on the OTC Bulletin Board, an inter-dealer automated quotation system for equity securities that is not a national securities exchange, the liquidity and price of our securities may be more limited than if we were quoted or listed on Nasdaq or another national securities exchange. You may be unable to sell your securities unless a market can be established or sustained.
Macroeconomic Risks Relating to Our Business
Uncertain global macroeconomic and political conditions could materially adversely affect our business prospects, financial condition, results of operations and cash flows.
Our results of operations could be materially affected by economic and political conditions in the United States and internationally, including inflation, deflation, interest rates, availability of capital, energy and commodity prices, trade laws and the effects of governmental initiatives to manage economic conditions. Potential customers may delay or decrease spending as their business and budgets are impacted by economic conditions. The inability of potential customers to pay us for our services may adversely affect our earnings and cash flows.
Further, the ongoing military conflict in Ukraine and the resulting sanctions and related countermeasures by North Atlantic Treaty Organization (“NATO”) states, the United States and other countries, as well as ongoing conflicts in the Middle East, including in Iran, have led to, and are likely to lead to additional, market disruptions, including significant volatility in commodity prices, energy prices, credit and capital markets, as well as supply chain interruptions for equipment, which could have an adverse impact on our operations and financial performance. Global supply chain disruptions have increasingly affected both the availability and cost of materials, component manufacturing and deliveries. Disruptions such as military conflicts, sanctions, and other countermeasures between nations, as well as any escalation in tension between nations, may result in delays in equipment deliveries and cost escalations that could adversely affect our business prospects, financial condition, results of operations and cash flows.
Our deployment cost estimates are highly sensitive to a range of economic factors, and our ability to control or manage our costs may be limited.
Capital and operating costs for the deployment of autonomous vehicles, are difficult to project, inherently variable and are subject to significant change based on a variety of factors including regulatory oversight, operating agreements, supply chain availability, inflation and other factors. Opportunities for cost reductions in deployment and fleet operation are similarly uncertain. While we believe our cost estimates are reasonable, they may increase significantly through design maturity, when accounting for supply chain availability, fabrication costs of autonomous trucking fleets, as we progress through the regulatory process with our OEM partners, or as a result of other factors. To the extent cost reductions in the operation of autonomous trucking fleets utilizing our software are not achieved within the expected timeframe or magnitude, our products, may not be cost competitive with alternative technologies, which may have a material adverse effect on our business prospects, financial condition, results of operations and cash flows and could harm our reputation.
The occurrence of adverse events, cancellations of significant projects, delays in project timelines, adjustments in cost structures, and other negative developments announced by competitors could have an impact on our operations, financial performance, and future prospects.
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The occurrence of newsworthy events in the autonomous vehicle industry as a whole, including, but not limited to, the delay of key business milestones, inflated cost adjustments, fluctuations in product pricing strategies, cancellations of public offerings, customer withdrawals, or disruptions in supply chain may adversely affect our business in several ways, including:
While we implement risk mitigation strategies and highlight our unique business approach and how it differentiates us from our competitors, there is no guarantee that we will be insulated from the adverse effects of such events and the occurrence of any of these events could negatively impact our business operations and financial condition.
Risks Relating to Compliance with Law, Government Regulation and Litigation
Our operations and business plans could be significantly impacted by changes in federal, state, and local government policies and priorities.
The current environment of bipartisan political support of autonomous vehicles at the U.S. federal level could change. Changes in support, in policies, or in priorities by the legislative or executive branch could have impacts on the leadership at the U.S. Department of Transportation or any other federal agency which affects policy related to autonomous driving. Each of these agencies themselves may experience changes in policies and priorities which impact our operations and business plans. Federal, state, and local policies and priorities could affect regulatory oversight, supply chain availability, tax and other financial incentives or costs, availability of financing, labor force initiatives or restrictions, and many other possible areas.
Additionally, changes in federal, state, or local government policies and priorities can impact our operations. These could include changes in interpretations of regulatory requirements, increased inspection or enforcement activities, changes in budgetary priorities, changes in tax laws and regulations and other government actions or inaction. Any of these local, state, and federal agencies may have the authority to impose civil penalties and additional requirements, which could adversely affect our results of operations.
We may become involved in litigation that may materially adversely affect us.
From time to time, we may become involved in various legal proceedings relating to matters incidental to the ordinary course of our business, including intellectual property, commercial, product liability, employment, class action, whistleblower and other litigation and claims, and governmental and other regulatory investigations and proceedings. Such matters can be time-consuming, divert management’s attention and resources from the operation of our business and cause us to incur significant expenses or liability or require us to change our business practices. Because of the potential risks, expenses, and uncertainties of litigation, from time to time, we may settle disputes, even where we believe that we have meritorious claims or defenses. Because litigation is inherently unpredictable, we cannot assure you that the results of any of these actions will not have a material adverse effect on our business.
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Our failure to timely and effectively implement controls and procedures required by Section 404(a) of the Sarbanes- Oxley Act that will be applicable to us after the business combination is consummated could negatively impact our business.
We are not currently subject to Section 404 of the Sarbanes-Oxley Act. However, following the consummation of the business combination, we will be required to provide management’s attestation on internal controls. The standards required for a public company under Section 404(a) of the Sarbanes-Oxley Act are significantly more stringent than those required of us as a privately held company. Management may not be able to effectively and timely implement controls and procedures that adequately respond to the increased regulatory compliance and reporting requirements that will be applicable after the business combination. If our management is unable to conclude that we have effective internal control over financial reporting, or to certify the effectiveness of such controls, and our independent registered public accounting firm cannot render an unqualified opinion on management’s assessment and the effectiveness of our internal control over financial reporting at such time as it is required to do so, and material weaknesses in our internal control over financial reporting are identified, we could be subject to regulatory scrutiny, a loss of public and investor confidence, and to litigation from investors and stockholders, which could have a material adverse effect on our business and our stock price. In addition, if we do not maintain adequate financial and management personnel, processes, and controls, we may not be able to manage our business effectively or accurately report our financial performance on a timely basis, which could cause a decline in the Post-Closing Company common stock price and adversely affect our business, financial condition, and results of operations. Failure to comply with the Sarbanes-Oxley Act could potentially subject us to sanctions or investigations by the SEC, the exchange upon which our securities are listed or other regulatory authorities, which would require additional financial and management resources.
Changes in tax laws could adversely affect our business prospects and financial results.
We are subject to income and other taxes in the United States and other jurisdictions, each of which has its own rules. Our current and future effective tax rates may be subject to volatility or adversely affected by a number of factors, including changes in the valuation of our deferred tax assets and liabilities; expected timing and amount of the release of any tax valuation allowances; tax effects of stock-based compensation; changes in tax laws, regulations or interpretations thereof; or lower than anticipated future earnings in jurisdictions where we have lower statutory tax rates and higher than anticipated future earnings in jurisdictions where we have higher statutory tax rates.
In addition, we may be subject to audits of our income, sales and other transaction taxes by taxing authorities. Outcomes from these audits may adversely affect our business, financial condition, and results of operations.
Our current and future effective tax rates may be affected by changes in the mix of earnings in countries with differing statutory tax rates, changes in the valuation of deferred tax assets and liabilities and changes in tax laws or their interpretation. In addition, we may be subject to tax audits by various tax jurisdictions. Although we believe our tax liabilities are reasonably estimated and accounted for in accordance with applicable laws and principles, an adverse resolution by one or more taxing authorities may have a material impact on the results of our operations.
Risks Relating to Being a Public Reporting Company
Our financial results may vary significantly from quarter to quarter.
Following the business combination, we will be required to comply with the periodic reporting obligations of the Exchange Act, Sarbanes-Oxley and other applicable securities rules and regulations, including the preparation of annual reports, quarterly reports, and current reports. We expect our revenue and operating results to vary materially from quarter to quarter. We may incur significant operating expenses during the start-up and early stages of large contracts and may not be able to recognize corresponding revenue in that same quarter. We may also incur additional expenses when contracts are terminated or expire and are not renewed. We may also incur additional expenses when customers are newly acquired. Additionally, payments due to us from our customers may be delayed for a variety of reasons, and these delays could cause significant fluctuations from quarter to quarter.
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Additional factors that may cause our financial results to fluctuate from quarter to quarter include those addressed elsewhere in this “Risk Factors” section and the following factors, among others:
Significant fluctuations in our operating results for a particular quarter could cause us to fall out of compliance with the financial covenants related to our debt, which if not waived, could restrict our access to capital and cause us to take extreme measures to pay down the debt, if any.
Following the business combination, we expect to be an emerging growth company within the meaning of the Securities Act and a smaller reporting company within the meaning of the Exchange Act, and if we take advantage of certain exemptions from disclosure requirements available to “emerging growth companies” or “smaller reporting companies,” this could make our securities less attractive to investors and may make it more difficult to compare our performance with other public companies.
Following the business combination, we expect to be an emerging growth company within the meaning of the Securities Act, as modified by the JOBS Act, and we 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 our periodic reports and proxy statements, and exemptions from say-on-pay, say- on-frequency and say-on-golden parachute voting requirements. As a result, our stockholders may not have access to certain information they may deem important. We will remain an emerging growth company until the earliest of (1) the last day of the fiscal year: (a)
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following April 23, 2030 the fifth anniversary of the TVA III IPO; (b) in which we have total annual gross revenue of at least $1,235,000,000; or (c) in which we are deemed to be a large accelerated filer, which means the market value of the shares of Post-Closing Company Class A common stock that are held by non-affiliates exceeds $700,000,000 as of the last business day of our prior second fiscal quarter, and (2) the date on which we have issued more than $1,000,000,000 in non- convertible debt securities during the prior three-year period.
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. We intend to take advantage of the benefits of this extended transition period. This may make comparison of our financial statements with those of public companies that comply with public company effective dates difficult or impossible because of the potential differences in accounting standards used.
Even after the Post-Closing Company no longer qualifies as an emerging growth company, it may still qualify as a “smaller reporting company,” which would allow it to continue to take advantage of many of the same exemptions from disclosure requirements, including reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements. Moreover, smaller reporting companies may choose to present only the two most recent fiscal years of audited financial statements in their Annual Reports on Form 10-K. For so long as we are a smaller reporting company and not classified as an “accelerated filer” or “large accelerated filer” pursuant to SEC rules, we will be exempt from the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act.
We cannot predict whether investors will find our securities less attractive because we rely on these exemptions. If some investors find our securities less attractive as a result of our reliance on these exemptions, the trading prices of our securities may be lower than they otherwise would be, there may be a less active trading market for our securities and the trading prices of our securities may be more volatile.
Reports published by analysts, including projections in those reports that differ from our actual results, could adversely affect the price and trading volume of the Post-Closing Company common stock.
Securities research analysts may establish and publish their own periodic projections for us or our industry. These projections may vary widely and may not accurately predict the results we actually achieve. Our share price may decline if our actual results do not match the projections of these securities research analysts. Similarly, if one or more of the analysts who write reports on us downgrades our stock or publishes inaccurate or unfavorable research about our business, our share price could decline. If one or more of these analysts ceases coverage of us or fails to publish reports on us regularly, our share price or trading volume could decline. Moreover, if no analysts commence coverage of us, or if analysts provide more favorable relative recommendations or reports about our competitors, the market price and volume for our common shares could be adversely affected.
Market values of growth-oriented companies like ours, particularly companies that entered into business combination agreements with SPACs, have been affected by adverse economic and market forces which may induce downward pressure on the price and trading volume of the Post-Closing Company common stock.
In recent years, there have been fluctuations in the valuation of growth-oriented companies, particularly those that entered into business combination agreements with SPACs. Inflationary pressures, increases in interest rates and other adverse economic and market forces have contributed to these drops in market value. As a result, our securities are subject to potential downward pressures, which may result in high redemptions of the cash available from the trust account. If there are substantial redemptions, there will be a lower float of our common stock outstanding, which may cause further volatility in the price of our securities and adversely impact our ability to secure financing following the Closing.
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Securities of companies formed through SPAC mergers such as ours may experience a material decline in price relative to the share price of the SPAC prior to the merger.
As with most SPAC initial public offerings in recent years, TVA III issued shares for $10.00 per share upon the closing of its initial public offering. As with other SPACs, the $10.00 per share price of TVA III Class A Ordinary Share reflected each share having a one-time right to redeem such share for a pro rata portion of the proceeds held in the trust account equal to approximately $10.00 per share prior to the consummation of the business combination. Following the Closing, the shares outstanding will no longer have any such redemption right and will be solely dependent upon the fundamental value of the operating business, which, like the securities of other companies formed through SPAC mergers in recent years, may be significantly less than $10.00 per share.
We will incur significant transaction costs, which could be higher than currently anticipated, and these transaction costs add risk to our ability to be a going concern and/or act on our business plan.
We have incurred and expect to continue to incur significant, non-recurring costs in connection with consummating the Transactions. All expenses incurred in connection with the Transactions, including all legal and other fees, expenses, and costs, will be for the account of the party incurring such fees, expenses, and costs. Aggregate transaction expenses for PlusAI and TVA III as a result of the Transactions are currently estimated to range from approximately $20.4 million under the Maximum Redemption Scenario to approximately $29.0 million under the No Redemption Scenario, with the amount varying by redemption scenario primarily because a portion of TVA III's deferred underwriting fee is waived by the underwriters based on the level of redemptions. See Note 3 to the unaudited pro forma condensed combined financial information ("Transaction Accounting Adjustments") for further detail regarding the components of these estimated transaction expenses under each redemption scenario.
Risks Related to TVA III, the Domestication and the Business Combination
Unless the context otherwise requires, references in this section to “we,” “us” or the “Company” refer to TVA III prior to the business combination.
The consummation of the proposed business combination is subject to a number of conditions and, if those conditions are not satisfied or waived, the definitive agreements relating to the proposed business combination, including the Merger Agreement, may be terminated in accordance with such definitive agreement’s terms and the proposed business combination may not be completed.
The proposed Merger is subject to certain conditions as outlined in the Merger Agreement. If the conditions are not met, there is a risk that the Merger may not occur as planned. Even if the Merger Agreement is approved by the shareholders of TVA III, specified conditions must be satisfied or waived before the parties to the Merger Agreement are obligated to complete the proposed business combination. TVA III does not control the satisfaction of all such conditions. For a summary of the conditions that must be satisfied or waived prior to completion of the business combination, please see the section entitled “Proposal No. 1 — The Business Combination Proposal — Certain Agreements Related to the Business Combination — Merger Agreement — Conditions to Closing General Conditions.” If the closing conditions are not satisfied or waived, the proposed business combination will not occur, or will be delayed pending later satisfaction or waiver, and such delay may cause TVA III and Plus to each lose some or all of the intended benefits of the proposed business combination and this could have significant material impact for our business.
There may be significant redemptions by TVA III Public Shareholders in connection with the business combination, which may leave the combined company under-capitalized.
As of , 2026, there was $ million in the trust account. The Merger Agreement provides that the consummation of the business combination is conditioned upon TVA III having at least $5,000,001 of net tangible assets as of the Closing and the Available Closing SPAC Cash being at least equal to $40,000,000 as of the Closing, subject to waiver of such condition as provided for in the Merger Agreement and the Minimum Proceeds Side Letter.
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There can be no assurances that we will be able to retain all of the cash in the trust account. In particular, if a significant number of TVA III Public Shareholders exercise their redemption right in connection with the business combination, the amount of cash left remaining in the trust account upon consummation of the business combination will be lower than contemplated. Raising additional financing, or increasing the equity portion of the aggregate consideration to be paid to PlusAI equityholders, in either case, if so authorized by PlusAI, may involve dilutive equity issuances or the incurrence of indebtedness at higher than desirable levels. These considerations may limit our ability to complete the business combination or optimize the Post-Closing Company’s capital structure. Any such shortfall will reduce the amount of available working capital for PlusAI, which may materially and adversely affect PlusAI’s business, financial condition and results of operations.
If, before distributing the proceeds in the trust account to TVA III Public Shareholders, TVA III files a bankruptcy or insolvency petition or an involuntary bankruptcy or insolvency petition is filed against it that is not dismissed, the per-share amount that would otherwise be received by TVA III shareholders in connection with TVA III’s liquidation may be reduced.
If, before distributing the proceeds in the trust account to TVA III Public Shareholders, TVA III files a bankruptcy or insolvency petition or an involuntary bankruptcy or insolvency petition is filed against it that is not dismissed, the proceeds held in the trust account could be subject to applicable bankruptcy or insolvency law, and may be included in its bankruptcy or insolvency estate and subject to the claims of third parties with priority over the claims of its shareholders. To the extent any bankruptcy or insolvency claims deplete the trust account, the per-share amount that would otherwise be received by TVA III shareholders in connection with TVA III’s liquidation may be reduced.
Additionally, if TVA III is forced to file a bankruptcy or insolvency petition or an involuntary bankruptcy or insolvency petition is filed against it that is not dismissed, any distributions received by TVA III’s shareholders could be viewed under applicable debtor/creditor and/or bankruptcy and/or insolvency laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy or insolvency court could seek to recover all amounts received by TVA III’s shareholders. Because TVA III intends to distribute the proceeds held in the trust account to TVA III public shareholders promptly after the expiration of the time period to complete a business combination, this may be viewed or interpreted as giving preference to TVA III Public Shareholders over any potential creditors with respect to access to or distributions from TVA III’s assets. Furthermore, the TVA III Board may be viewed as having breached its fiduciary duties to TVA III’s creditors and/or as having acted in bad faith by paying TVA III public shareholders from the trust account prior to addressing the claims of creditors, thereby exposing itself and TVA III to claims of punitive damages. TVA III cannot assure you that claims will not be brought against it for these reasons.
Our Sponsor, the Sponsor Affiliate and the Insiders have agreed to vote in favor of the business combination, regardless of how TVA III’s public shareholders vote.
Pursuant to the terms of the Sponsor Support Agreement, the Sponsor, Sponsor Affiliate and the Insiders have each agreed to vote their, and to cause the Sponsor Affiliate to vote its, TVA III Ordinary Shares, including TVA III Class B Ordinary Shares and any TVA III public shares held by them as of the TVA III Record Date, in favor of the business combination proposal and the other proposals described in this proxy statement/prospectus. The Sponsor holds 7,500,000 TVA III Founder Shares and 4,700,000 TVA III Private Placement Warrants, and the Sponsor Affiliate holds 1,050,000 TVA III public shares. Together they collectively own of record and are entitled to vote an aggregate of 28.5% of the outstanding TVA III Ordinary Shares. As a result, in addition to the TVA III Founder Shares and TVA III Private Placement Warrants held by such holders, we would need 6,450,001 TVA III Class A Ordinary Shares or 28.7%, of the 22,500,000 TVA III Class A Ordinary Shares sold in the TVA III IPO that remain outstanding to be voted in favor of a transaction (assuming all issued and outstanding shares are voted) in order to have such initial business combination approved. Accordingly, it is more likely that the necessary shareholder approval will be received than would be the case if our initial shareholders and their permitted transferees agreed to vote their TVA III Founder Shares and TVA III Private Placement Warrants in accordance with the majority of the votes cast by the TVA III Public Shareholders.
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The Sponsor, certain members of the TVA III Board and certain TVA III officers have interests in the business combination that are different from or are in addition to other shareholders in recommending that shareholders vote in favor of approval of the business combination proposal and approval of the other proposals described in this proxy statement/prospectus.
In considering the recommendation of the TVA III Board to vote in favor of approval of the business combination proposal and the other proposals, TVA III shareholders should keep in mind that the Sponsor and the Insiders have interests in such proposals that are different from, or in addition to, the interests of TVA III shareholders generally. In particular:
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The TVA III Board was aware of and considered these interests, among other matters, in evaluating and negotiating the Transactions, in reaching the determination that it was advisable to consummate the Transactions, that the Transactions are just, equitable and fair and in the best interests of TVA III and its shareholders and in recommending to the TVA III shareholders that they vote “FOR” the proposals presented at the extraordinary general meeting.
Prior to the Closing, the Nasdaq or, after the Closing, the Nasdaq may delist TVA III Class A Ordinary Shares or Post-Closing Company Class A common stock, as applicable, from trading on its exchange, which could limit investors’ ability to transact in our securities and subject us to additional trading restrictions.
TVA III Class A Ordinary Shares are currently listed on the Nasdaq. We cannot assure you that TVA III Class A Ordinary Shares will continue to be listed on the Nasdaq in the future and prior to the business combination. In order to continue listing TVA III Class A Ordinary Shares on the Nasdaq prior to the business combination, we must maintain certain financial, distribution and stock price levels. Our continued eligibility for listing may depend on, among other things, the number of public shares that are redeemed in connection with the Transactions. There can be no assurance that the Post-Closing Company will be able to comply with the continued listing standards of the Nasdaq following the business combination. It is possible that the Post-Closing Company’s securities will cease to meet the Nasdaq’s listing requirements following the business combination. If, after the business combination, the Nasdaq delists Post-Closing Company Class A common stock from trading on its exchange for and the Post-Closing Company is unable to list such securities on another national securities exchange, we expect such securities could be quoted on an over-the-counter market. If this were to occur, the Post-Closing Company and its stockholders could face significant material adverse consequences including:
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The National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which are referred to as “covered securities.” Because TVA III Class A Ordinary Shares are listed on the Nasdaq, TVA III Class A Ordinary Shares qualify as covered securities under such statute. Although the states are preempted from regulating the sale of our securities, the federal statute does allow the states to investigate companies if there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the states can regulate or bar the sale of covered securities in a particular case. While we are not aware of a state having used these powers to prohibit or restrict the sale of securities issued by blank check companies, other than the State of Idaho, certain state securities regulators view blank check companies unfavorably and might use these powers, or threaten to use these powers, to hinder the sale of securities of blank check companies in their states. Further, if we were no longer listed on the Nasdaq, our securities would not qualify as covered securities under such statute and we would be subject to regulation in each state in which we offer our securities.
The exercise of TVA III’s directors’ and officers’ discretion in agreeing to changes or waivers in the terms of the Transactions may result in a conflict of interest when determining whether such changes to the terms of the Transactions or waivers of conditions are appropriate and in TVA III’s shareholders’ best interest.
In the period leading up to the Closing, events may occur that, pursuant to the Merger Agreement, would require TVA III to agree to amend the Merger Agreement, to consent to certain actions taken by PlusAI or to waive rights that TVA III is entitled to under the Merger Agreement. Such events could arise because of changes in the course of PlusAI’s business, a request by PlusAI to undertake actions that would otherwise be prohibited by the terms of the Merger Agreement or the occurrence of other events that would have a material adverse effect on PlusAI’s business and would entitle TVA III to terminate the Merger Agreement. In any of such circumstances, it would be at TVA III’s discretion, acting through the TVA III Board, to grant its consent or waive those rights. TVA may waive the occurrence of a material adverse effect affecting PlusAI and consummate the business combination despite the occurrence of such event. If a material adverse effect affecting PlusAI occurs and the parties still consummate the business combination, the market trading price of the Post-Closing Company’s securities may suffer. The existence of the financial and personal interests of the directors described in this proxy statement/prospectus may result in a conflict of interest on the part of one or more of the directors between what he, she or they may believe is best for TVA III and what he, she or they may believe is best for himself, herself or themselves in determining whether or not to take the requested action. As of the date of this proxy statement/prospectus, TVA III does not believe there will be any material changes or waivers that TVA III’s directors and officers would be likely to make after the mailing of this proxy statement/prospectus. TVA III will circulate a new or amended proxy statement/prospectus or supplement thereto if changes to the terms of the Transactions that would have a material impact on its shareholders are required prior to the vote on the business combination proposal.
We may not be able to complete the Transactions or another initial business combination within the completion window, in which case TVA III will cease all operations except for the purpose of winding up and we would redeem our public shares and liquidate, in which case TVA III’s public shareholders would only receive approximately $ per share, based on amounts in the trust account at , 2026, or less than such amount in certain circumstances.
Pursuant to the TVA III MAA, we must complete the Transactions or another initial business combination within the completion window. There can be no assurances that we will be able to complete the business combination or to find a suitable alternative target business within such time period. Our ability to complete an initial business combination may be negatively impacted by general market conditions, volatility in the capital and
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debt markets and the other risks described herein. For example, the U.S. debt ceiling and budget deficit concerns have increased the possibility of credit-rating downgrades and economic slowdowns, or a recession in the United States. Financial markets also may be adversely affected by current or anticipated military conflict, including the ongoing war between Russia and Ukraine, ongoing conflicts in the Middle East, including in Iran, terrorism, sanctions or other geopolitical events globally, which could cause or continue to cause, as applicable, market disruptions, including significant volatility in commodity prices, energy prices, credit and capital markets, as well as supply chain interruptions, and adversely affect the global economy and financial markets leading to instability and lack of liquidity in capital markets. Any negative impact on the global economy, capital markets or other geopolitical conditions resulting from downgrades to the U.S. government’s sovereign credit rating or its perceived creditworthiness, the war in Ukraine and subsequent actions could adversely affect our search for a business combination and any target business with which we may ultimately consummate a business combination.
Further, any potential target business with which TVA III enters into negotiations concerning an initial business combination will be aware that TVA III must complete an initial business combination by the end of the completion window, unless TVA III amends its articles of association to further extend the time to consummate an initial business combination. Consequently, if TVA III is unable to complete this business combination, a potential target business may obtain leverage over TVA III in negotiating an alternative initial business combination. This risk will increase as TVA III gets closer to the end of the completion window. In addition, TVA III may have limited time to conduct due diligence and may enter into an initial business combination on terms that it would have rejected upon a more comprehensive investigation.
If we have not completed our initial business combination within the completion window, we will: (1) cease all operations except for the purpose of winding up; (2) as promptly as reasonably possible but not more than 10 business days thereafter, redeem the TVA III public shares, at a per share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (net of taxes payable and up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidating distributions, if any), subject to applicable law; and (3) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. In such case, our public shareholders may receive only $ per share (based on amounts in the trust account at , 2026), or less than per share in certain circumstances where a third party brings a claim against us that the Sponsor is unable to indemnify (as described herein), on the redemption of their shares.
If our sources of working capital are insufficient, it could limit the amount available to complete our initial business combination. If we are unable to obtain such loans, we may be unable to complete our initial business combination.
If we are required to seek additional capital, we would need to borrow funds from our Sponsor, management team or other third parties to operate or may be forced to liquidate. Neither our Sponsor, members of our management team nor any of their respective affiliates is under any obligation or other duty to loan funds to us in such circumstances. Any such loans would be repaid only from funds held outside the trust account or from funds released to us upon completion of our initial business combination. If we are unable to complete our initial business combination because of insufficient funds, we will be forced to cease operations and liquidate the trust account. In such case, our public shareholders may receive only $ per share (based on amounts in the trust account at , 2026), or less in certain circumstances.
We may seek to further extend the date by which TVA III must consummate an initial business combination, which could have a material adverse effect on the amount held in the trust account and other adverse effects on TVA III.
TVA III may seek to further extend the date by which TVA III must consummate an initial business combination, which pursuant to the TVA III MAA, is currently October 24, 2026. Such an extension would require the approval of the holders of TVA III Ordinary Shares, and TVA III Public Shareholders would be provided the opportunity to redeem all or a portion of their TVA III public shares. TVA III has scheduled an extraordinary
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general meeting to be held on October 19, 2026, for its shareholders to vote on, among other things, a proposal to amend the TVA III Articles to extend such deadline to July 24, 2027 (the “SPAC Extension”). Any such delays in completing the business combination, redemptions, or any additional conditions imposed in order to complete the business combination, may have a material adverse effect on the amount held in the trust account, our capitalization, principal shareholders and other impacts on TVA III or TVA III’s officers and members of the TVA III Board, such as TVA III’s ability to maintain its listing on the Nasdaq.
Uncertainty in connection with certain international economic and political relationships, including the imposition of tariffs on international trade, political disputes, regulatory changes and other international matters could have a material adverse effect on our ability to consummate the business combination, identify any other potential target business, and could adversely affect the financial performance of any target, either foreign or domestic.
The international economic and political environment is dynamic and subject to change. There is currently significant uncertainty about the future economic and political relationships between the United States and a number of other countries. These uncertainties include, among other things, the potential imposition of protective tariffs on goods imported from other countries and reciprocal tariffs other countries may impose on United States products, political disputes that may affect relationships between the United States and other countries and the imposition of regulatory or other restrictions on trade and commerce. Any such matters could potentially limit the number of potential targets we may consider, and could also have a material adverse effect on the financial performance of such potential targets. Among other things, historical financial performance of companies affected by these international matters may not provide as accurate a barometer of future performance as would pertain in a more stable economic environment.
Because TVA III is incorporated under the laws of the Cayman Islands, in the event the business combination is not completed, you may face difficulties in protecting your interests, and your ability to protect your rights through the U.S. federal courts may be limited.
Because TVA III is currently incorporated under the laws of the Cayman Islands, you may face difficulties in protecting your interests and your ability to protect your rights through the U.S. federal courts may be limited prior to the Domestication. TVA III is currently an exempted company under the laws of the Cayman Islands. As a result, it may be difficult for investors to effect service of process within the United States upon members of the TVA III Board or TVA III’s executive officers, or enforce judgments obtained in the U.S. courts against members of the TVA III Board or TVA III’s officers.
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Until the Domestication is effected, TVA III’s corporate affairs are governed by the TVA III MAA, the Companies Act and the common law of the Cayman Islands. We are also subject to the federal securities laws of the United States. The rights of shareholders to take action against members of the TVA III Board, actions by minority shareholders and the fiduciary responsibilities of members of the TVA III Board to TVA III under the laws of the Cayman Islands are to a large extent governed by the common law of the Cayman Islands. The common law in the Cayman Islands is derived in part from comparatively limited judicial precedent in the Cayman Islands and from English common law. Appeals from the Cayman Islands Courts to the Privy Council (which is the final Court of Appeal for British overseas territories such as the Cayman Islands) are binding on courts in the Cayman Islands. Decisions of the English courts, and particularly the Supreme Court and the Court of Appeal are generally of persuasive authority but are not binding in the courts of the Cayman Islands. Decisions of courts in other Commonwealth jurisdictions are similarly of persuasive but not binding authority. The rights of TVA III’s shareholders and the fiduciary responsibilities of members of the TVA III Board under Cayman Islands law are different from what they would be under statutes or judicial precedent in some jurisdictions in the United States. In particular, the Cayman Islands has a different body of securities laws as compared to the United States, and certain states, such as Delaware, may have more fully developed and judicially interpreted bodies of corporate law. In addition, Cayman Islands companies may not have standing to initiate a shareholders derivative action in a federal court of the United States.
TVA III has been advised by Harney Westwood & Riegels, its Cayman Islands legal counsel, that the courts of the Cayman Islands are unlikely (1) to recognize or enforce against TVA III judgments of courts of the United States predicated upon the civil liability provisions of the federal securities laws of the United States or any state; and (2) in original actions brought in the Cayman Islands, to impose liabilities against TVA III predicated upon the civil liability provisions of the federal securities laws of the United States or any state, so far as the liabilities imposed by those provisions are penal in nature. In those circumstances, although there is no statutory enforcement in the Cayman Islands of judgments obtained in the United States, the courts of the Cayman Islands will recognize and enforce a foreign money judgment of a foreign court of competent jurisdiction without retrial on the merits based on the principle that a judgment of a competent foreign court imposes upon the judgment debtor an obligation to pay the sum for which judgment has been given provided certain conditions are met. For a foreign judgment to be enforced in the Cayman Islands, such judgment must be final and conclusive and for a liquidated sum, and must not be in respect of taxes or a fine or penalty, inconsistent with a Cayman Islands judgment in respect of the same matter, impeachable on the grounds of fraud or obtained in a manner, or be of a kind the enforcement of which is, contrary to natural justice or the public policy of the Cayman Islands (awards of punitive or multiple damages may well be held to be contrary to public policy). A Cayman Islands court may stay enforcement proceedings if concurrent proceedings are being brought elsewhere.
As a result of the above, the public shareholders may have more difficulty in protecting their interests in the face of actions taken by TVA III’s executive officers, members of the TVA III Board or controlling shareholders than they would as public shareholders of a U.S. company.
The Domestication may result in adverse tax consequences for holders of TVA III Class A Ordinary Shares or TVA III Warrants.
TVA III intends for the Domestication to qualify as a reorganization within the meaning of Section 368(a)(1)(F) of the Code, i.e., an F Reorganization (and is not otherwise treated as a reorganization within the meaning of Section 368(a)(1) of the Code). If the Domestication fails to qualify as an F Reorganization, a U.S. Holder generally would recognize gain or loss with respect to its TVA III Class A Ordinary Shares or TVA III Warrants in an amount equal to the difference, if any, between the sum of the fair market value of the corresponding TVA III Class A Common Stock or TVA III Warrants received in the Domestication and the U.S. Holder’s adjusted tax basis in its TVA III Class A Ordinary Shares or TVA III Warrants surrendered. U.S. Holders exercising redemption rights will be subject to the potential tax consequences of the Domestication. Additionally, Non-U.S. Holders generally will become subject to withholding tax on any amounts treated as dividends paid on PlusAI common stock after the Domestication.
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Assuming that the Domestication qualifies as an F Reorganization, subject to the PFIC rules discussed below, U.S. Holders generally will be subject to Section 367(b) of the Code in connection with the Domestication, and, as a result:
Additionally, even if the Domestication qualifies as an F Reorganization, proposed Treasury Regulations promulgated under Section 1291(f) of the Code and certain other PFIC rules (which have retroactive proposed effective dates) generally require that a U.S. person who disposes of stock of a PFIC (including for this purpose, under a proposed Treasury Regulation that generally treats an “option” to acquire the stock of a PFIC as stock of the PFIC, exchanging TVA III Warrants for newly issued TVA III Delaware Warrants in the Domestication) must recognize gain equal to the excess of the fair market value of such PFIC stock over its adjusted tax basis, notwithstanding any other provision of the Code. TVA III believes that it is likely classified as a PFIC for U.S. federal income tax purposes. As a result, these proposed Treasury Regulations, if finalized in their current form, would generally require a U.S. Holder of TVA III Class A Ordinary Shares to recognize gain under the PFIC rules on the exchange of TVA III Class A Ordinary Shares for TVA III Class A Common Stock pursuant to the Domestication unless such U.S. Holder has made certain tax elections with respect to such U.S. Holder’s TVA III Class A Ordinary Shares. The proposed Treasury Regulations provide coordinating rules with other sections of the Code, including Section 367(b), which affect the manner in which the rules under such other sections apply to transfers of PFIC stock. These proposed Treasury Regulations, if finalized in their current form, would also apply to a U.S. Holder who exchanges TVA III Warrants for newly issued TVA III Delaware Warrants; under current law, however, the elections mentioned above do not apply to TVA III Warrants. Any gain recognized from the application of the PFIC rules described above would be taxable income with no corresponding receipt of cash. The tax on any such gain would be imposed at the rate applicable to ordinary income and an interest charge would apply based on complex rules designed to offset the tax deferral to such U.S. Holder on the undistributed earnings, if any, of TVA III. It is not possible to determine at this time whether, in what form, and with what effective date, final Treasury Regulations under Section 1291(f) of the Code may be adopted or how any such Treasury Regulations would apply. For a more complete discussion of the potential application of the PFIC rules to U.S. Holders as a result of the Domestication, see “Material U.S. Federal Income Tax Consequences of the Business Combination to TVA III Shareholders — Tax Effects of the Domestication to U.S. Holders —5. PFIC Considerations.”
All investors in TVA III are urged to consult their tax advisors for the tax consequences of the Domestication to their particular situation. The opinion of DLA Piper LLP (US), a copy of which is attached as an exhibit to the registration statement of which this proxy statement/prospectus is a part, expresses no opinion on the potential U.S. federal income tax consequences of the Domestication pursuant to Section 367 of the Code or the PFIC rules. For a more detailed description of the U.S. federal income tax consequences associated with the Domestication, see “Material U.S. Federal Income Tax Considerations of the Merger.”
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Upon the Closing, the rights of holders of Post-Closing Company Class A common stock arising under the DGCL will differ from and may be less favorable to the rights of holders of TVA III Ordinary Shares arising under the Companies Act.
Upon the Closing, the rights of holders of Post-Closing Company Class A common stock will arise under the DGCL. The DGCL contains provisions that differ in some respects from those in the Companies Act. Therefore, some rights of holders of Post-Closing Company Class A common stock could differ from the rights that holders of TVA III Ordinary Shares currently possess.
For a more detailed description of the rights of holders of Post-Closing Company Class A common stock under the DGCL and how they may differ from the rights of holders of TVA III Ordinary Shares under the Companies Act, please see the section of this proxy statement/prospectus entitled “Proposal No. 2 — The Domestication Proposal — Comparison of Shareholder Rights under Applicable Corporate Law Before and After Domestication.”
TVA III’s shareholders may be held liable for claims by third parties against TVA III to the extent of distributions received by them upon redemption of their shares.
If TVA III is forced to enter into an insolvent liquidation, any distributions received by shareholders could be viewed as an unlawful payment if it were proved that immediately following the date on which the distribution was made, TVA III was unable to pay their debts as they fall due in the ordinary course of business. As a result, a liquidator could seek to recover some or all amounts received by their shareholders. Furthermore, TVA III Board may be viewed as having breached their fiduciary duties to their creditors or as having acted in bad faith, exposing themselves and TVA III to claims, by paying public shareholders from the trust account prior to addressing the claims of creditors. The claims may be brought against TVA III for these reasons. The TVA III Board and the TVA III officers who knowingly and willfully authorized or permitted any distribution to be paid out of the share premium account while TVA III was unable to pay their debts as they fall due in the ordinary course of business would be guilty of an offense and may be liable for a fine of $18,293 and imprisonment for five years in the Cayman Islands.
Activities taken by TVA III, the Sponsor and/or existing TVA III shareholders to increase the likelihood of approval of the business combination proposal and the other proposals described in this proxy statement/prospectus could have a depressive effect on the TVA III Ordinary Shares.
At any time prior to the extraordinary general meeting, during a period when they are not then aware of any material nonpublic information regarding TVA III or its securities, the Sponsor, directors, officers, advisors or any of their respective affiliates and/or their respective affiliates may purchase shares from institutional and other investors who vote, or indicate an intention to vote, against the business combination proposal, or execute agreements to purchase such shares from such investors in the future, or they may enter into transactions with such investors and others to provide them with incentives to acquire shares of TVA III Ordinary Shares or vote their shares in favor of the business combination proposal. While the exact nature of any such transactions, if any, has not been determined, the purpose of such share purchases and other transactions would be to decrease the number of redemptions to increase the likelihood of satisfaction of the requirements to consummate the Transactions. Entering into any such arrangements may have a depressive effect on TVA III Ordinary Shares. For example, as a result of these arrangements, an investor or holder may have the ability to effectively purchase shares at a price lower than market and may therefore be more likely to sell the shares they own, either prior to or immediately after the extraordinary general meeting. Further, the public “float” of the public shares and the number of beneficial holders of our securities may be reduced as a result of such purchases, possibly making it difficult to obtain or maintain the quotation, listing or trading of our securities on Nasdaq or any other stock exchange. As of the date of this proxy statement/prospectus, no such transactions have occurred nor are they planned to occur. TVA III will file a Current Report on Form 8-K to disclose arrangements entered into or significant purchases made by any of the aforementioned persons that would affect the vote on the Business Combination Proposal or the redemption threshold. Any such report will include descriptions of any arrangements entered into or significant purchases by any of the aforementioned persons.
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There are risks to unaffiliated investors by taking PlusAI public through a merger rather than through an underwritten offering.
Unaffiliated investors are subject to certain risks as a result of PlusAI going public through a merger rather than through a traditional underwritten initial public offering. Unlike a traditional underwritten initial public offering of PlusAI securities, the initial listing of the Post-Closing Company Class A common stock as a result of the business combination will not involve a book-building process as is the case in an underwritten public offering, or underwriter support to help stabilize, maintain or affect the public price of the new issue immediately after listing.
In any underwritten public offering, the initial value of a company is set by investors who indicate the price at which they are prepared to purchase shares from the underwriters. In the case of a special purpose acquisition company transaction, the value of the company is established by means of negotiations between the target company, the special purpose acquisition company and, in some cases, investors who agree to purchase shares at the time of the business combination. The process of establishing the value of a company in a special purpose acquisition company business combination may be less effective than the book-building process in an underwritten public offering and also does not reflect events that may have occurred between the interim period. In addition, underwritten public offerings are frequently oversubscribed resulting in additional potential demand for shares in the aftermarket following the underwritten public offering. There is no such book of demand built up in connection with a special purpose acquisition company transaction and no underwriters with the responsibility of stabilizing the share price, which may result in the share price being harder to sustain after the transaction.
In addition, since no underwriter is involved in the business combination, no underwriter due diligence has been conducted on PlusAI in order to establish a due diligence defense with respect to the disclosure presented in this proxy statement/prospectus. Section 11 of the Securities Act (“Section 11”) imposes liability on parties, including underwriters, involved in a securities offering if the registration statement contains a materially false statement or material omission. To effectively establish a due diligence defense against a cause of action brought pursuant to Section 11, a defendant, including an underwriter, carries the burden of proof to demonstrate that such defendant, after reasonable investigation, believed that the statements in the registration statement were true and free of material omissions. In order to meet this burden of proof, underwriters in a registered offering typically conduct extensive due diligence of the registrant and vet the registrant’s disclosure. Such due diligence may include calls with the issuer’s management, review of material agreements, and background checks on key personnel, among other investigations. If such investigation had occurred, certain information in this proxy statement/prospectus may have been presented in a different manner or additional information may have been presented at the request of such underwriter.
The lack of such a process in connection with the listing of the Post-Closing Company’s securities could result in diminished investor demand, inefficiencies in pricing and a more volatile public price for Post-Closing Company’s securities during the period immediately following the listing than in connection with an underwritten initial public offering.
In addition, the Sponsor and the Insiders have interests in the business combination that may conflict with the interests of our stockholders and that would not be present in a traditional underwritten public offering of the Post-Closing Company Class A common stock. For further information, see the section entitled “Proposal No. 1 — The Business Combination Proposal — Interests of Certain TVA III Persons in the Business Combination.”
The estimated net cash per share of TVA III Ordinary Shares that will be contributed to the Post-Closing Company in the business combination is less than the redemption price.
Each TVA III Public Unit sold in the TVA III IPO at an offering price of $10.00 per TVA III Public Unit consisted of one TVA III public share and one-half of one TVA III Public Warrant. Of the proceeds we received from the TVA III IPO and the TVA III Private Placement, $226,125,000 (or $10.05 per TVA III Public Unit) was placed in our trust account. We will provide our shareholders the opportunity to redeem all or a portion of the TVA III public shares in connection with the completion of the business combination, and potentially upon the occurrence of certain other events prior to the business combination. Any holder of TVA III public shares will be entitled to demand that such holder’s shares be redeemed for cash in an amount equal to their pro rata portion of
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the funds held in the trust account. Such amount, less any taxes payable, will be paid promptly upon consummation of the business combination. As a result, TVA III Public Shareholders who own our TVA III public shares on a redemption date can anticipate receiving the redemption price in connection with a redemption for each TVA III public share that they choose to redeem.
There can be no assurance that, after the business combination, the TVA III Public Shareholders would be able to sell their shares in the post-business combination company for the redemption price, or any higher price. It is therefore possible that the share price of the Post-Closing Company may decline below the redemption price. In recent years, the share prices of many post-business combination companies have fallen following a business combination. As a result, if the TVA III Public Shareholders continue to hold shares in the Post-Closing Company following the business combination, we cannot assure our shareholders that the trading price of such shares will be greater than the redemption price.
TVA III’s shareholders will experience dilution as a consequence of, among other transactions, the issuance of shares and securities exercisable into shares of the Post-Closing Company as consideration in the business combination. Having a minority share position may reduce the influence that TVA III’s current stockholders have on the management of TVA III.
As illustrated by the post-closing ownership levels outlined under the sections titled “Questions and Answers About the Business Combination – What equity stake will current TVA III shareholders and PlusAI stockholders hold in the Post-Closing Company immediately after the consummation of the business combination?” and “Dilution”, the Current TVA III Public Shareholders will experience dilution as a consequence of the Transactions. Further, any Other PIPE Investment or Strategic Commercial Transaction that may be entered into prior to the Closing may result in additional dilution to current TVA III Public Shareholders. For example, in March 2026, TRATON and PlusAI entered into an Autonomy Acceleration Program Agreement to expand their global partnership to accelerate autonomous truck commercialization, which contemplates that TRATON will receive warrants to purchase up to 7,500,000 shares of Post-Closing Company Class A common stock at an exercise price of $11.50 per share. For additional information, see the section of this proxy statement/prospectus titled “PlusAI’s Management’s Discussion and Analysis of Financial Condition and Results of Operations—Significant Events and Transactions—Expanded TRATON Partnership.”
Following the Closing, stockholders of the Post-Closing Company may also experience significant dilution from the conversion of the Public Warrants, Private Warrants, PIPE Warrants and Convertible Notes, to the extent such securities are exercised or converted at a time when the exercise and/or conversion price of such securities is less than the then-current price of the Post-Closing Company Class A common stock.
Having a minority ownership interest in the Post-Closing Company may reduce the influence that TVA III’s public stockholders have on the management of the Post-Closing Company. See the subsection entitled “Proposal No. 1 — The Business Combination Proposal — General — Impact of the Business Combination on Our Public Float” and the section entitled “Unaudited Pro Forma Condensed Combined Financial Information” for more information.
The Post-Closing Company’s actual financial information and results of operations may differ materially from the unaudited pro forma condensed combined financial information included in this proxy statement/prospectus.
TVA III and Plus currently operate as separate companies and have had no prior history as a combined entity. TVA III’s and Plus’s operations have not previously been managed on a combined basis. This proxy statement/prospectus includes unaudited pro forma condensed combined financial statements for the Post-Closing Company. The unaudited pro forma condensed combined statement of loss of the Post-Closing Company combines the historical audited results of operations of TVA III and Plus.
The unaudited pro forma condensed combined financial statements are presented for illustrative purposes only, are based on certain assumptions, address a hypothetical situation and reflect limited historical financial data. Therefore, the unaudited pro forma condensed combined financial statements are not necessarily indicative of the results of operations and financial position that would have been achieved had the business combination been
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consummated on the dates indicated above, or the future consolidated results of operations or financial position of the Post-Closing Company. The pro forma adjustments are based on the information currently available and the assumptions and estimates underlying the pro forma adjustments are described in the accompanying notes. Additionally, we may enter into one or more financings or Strategic Commercial Transactions prior to Closing providing for the sale of Post-Closing Company Class A common stock and/or securities convertible into Post-Closing Company Class A common stock, including but not limited to preferred stock, notes and warrants, on terms that are not yet known and may be less favorable than the terms of prior financing arrangements. For example, in March 2026, TRATON and PlusAI entered into an Autonomy Acceleration Program Agreement, which contemplates that TRATON will receive warrants to purchase up to 7,500,000 shares of Post-Closing Company Class A common stock at an exercise price of $11.50 per share. For additional information, see the section of this proxy statement/prospectus titled “PlusAI’s Management’s Discussion and Analysis of Financial Condition and Results of Operations—Significant Events and Transactions—Expanded TRATON Partnership.” Accordingly, the Post-Closing Company’s business, assets, cash flows, results of operations and financial condition may differ significantly from those indicated by the unaudited pro forma condensed combined financial statements included in this document. For more information, please see the section entitled “Unaudited Pro Forma Condensed Combined Financial Information.”
The assumptions used in preparing the unaudited pro forma financial information may not prove to be accurate and other factors may affect the Post-Closing Company’s financial condition or results of operations following the Closing. Any potential decline in the Post-Closing Company’s financial condition or results of operations may cause significant variations in the price of the Post-Closing Company’s securities.
The TVA III warrant agreement, which will be amended and restated pursuant to an A&R Warrant Agreement upon the Closing, designates the courts of the State of New York or the United States District Court for the Southern District of New York as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by holders of TVA III warrants, which could limit the ability of TVA III warrant holders to obtain a favorable judicial forum for disputes with TVA III.
In connection with the Closing, TVA III, PlusAI and Continental Stock Transfer & Trust Company will enter into the Amended and Restated Warrant Agreement (the “A&R Warrant Agreement”), pursuant to which, among other things, the warrant agreement will be amended to cause each TVA III Warrant to represent the right to receive, from the Closing, a warrant to purchase one PlusAI Class A common stock, on the terms and subject to the conditions set forth therein. All warrants of TVA III under the A&R Warrant Agreement will no longer be exercisable for TVA III Class A Ordinary Shares, but instead will be exercisable for PlusAI Class A common stock.
The A&R Warrant Agreement will provide that, subject to applicable law, (1) any action, proceeding or claim against TVA III arising out of or relating in any way to the warrant agreement, including under the Securities Act, will be brought and enforced in the courts of the State of New York or the United States District Court for the Southern District of New York, and (2) that TVA III irrevocably submits to such jurisdiction, which jurisdiction shall be the exclusive forum for any such action, proceeding or claim. TVA III will waive any objection to such exclusive jurisdiction and that such courts represent an inconvenient forum. TVA III notes, however, that there is uncertainty as to whether a court would enforce this provision and that investors cannot waive compliance with the federal securities laws and the rules and regulations thereunder. Section 22 of the Securities Act creates concurrent jurisdiction for state and federal courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder.
Notwithstanding the foregoing, these provisions of the A&R Warrant Agreement do not apply to suits brought to enforce any liability or duty created by the Exchange Act or any other claim for which the district courts of the United States of America are the sole and exclusive forum. Any person or entity purchasing or otherwise acquiring any interest in any of the TVA III Public Warrants shall be deemed to have notice of and to have consented to the forum provisions in the A&R Warrant Agreement. If any action, the subject matter of which is within the scope of the forum provisions of the A&R Warrant Agreement is filed in a court other than a court of the State of New York located in the County of New York or the United States District Court for the Southern District of New York (a “foreign action”) in the name of any holder of the TVA III Public Warrants, such holder shall be deemed to have consented to: (1) the personal jurisdiction of the state and federal courts located in the State of New York in
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connection with any action brought in any such court to enforce the forum provisions, and (2) having service of process made upon such warrant holder in any such action brought in such court to enforce the forum provisions by service upon such warrant holder’s counsel in the foreign action as agent for such warrant holder.
This choice-of-forum provision may limit a warrant holder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with our company, which may discourage such lawsuits. Warrant holders who are unable to bring their claims in the judicial forum of their choosing may be required to incur additional costs in pursuit of actions which are subject to our choice-of-forum provisions. Alternatively, if a court were to find this provision of our A&R Warrant Agreement inapplicable or unenforceable with respect to one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could materially and adversely affect our business, financial condition and results of operations and result in a diversion of the time and resources of our management and board of directors.
Changes in laws, regulations or rules, or a failure to comply with any laws, regulations or rules, may adversely affect our business, including our ability to negotiate and complete the business combination, investments and results of operations.
We are subject to laws, regulations and rules enacted by national, regional and local governments and the Nasdaq. In particular, we are required to comply with certain SEC, the Nasdaq and other legal or regulatory requirements. Compliance with, and monitoring of, applicable laws, regulations and rules may be difficult, time consuming and costly. Those laws, regulations or rules and their interpretation and application may also change from time to time and those changes could have a material adverse effect on our business, investments and results of operations. In addition, a failure to comply with applicable laws, regulations or rules, as interpreted and applied, could have a material adverse effect on our business, including its ability to consummate the business combination, investments and results of operations.
On January 24, 2024, the SEC adopted the certain rules and regulations which became effective on July 1, 2024, requiring, among other items, (i) additional disclosures relating to SPAC sponsors and related persons; (ii) additional disclosures relating to SPAC business combination transactions; (iii) additional disclosures relating to dilution and to conflicts of interest involving sponsors and their Affiliates in both SPAC initial public offerings and business combination transactions; (iv) additional disclosures regarding projections included in SEC filings in connection with proposed business combination transactions; and (v) the requirement that both the SPAC and its acquisition target be co-registrants for business combination registration statements (the “2024 SPAC Rules”). Changes in guidance from the SEC or industry-wide consensus could result in additional changes in the accounting treatment related to special purpose acquisition companies. Changes could result in the identification of accounting errors in TVA III’s previously issued financial statements, restatements of TVA III’s previously issued financial statements, the filing of notices that previously issued financial statements may not be relied upon, and findings of material weaknesses and significant deficiencies in internal controls over financial reporting. In addition, changes in accounting treatment, or the time required to evaluate any such changes, could delay TVA III’s ability to consummate an initial business combination or otherwise have a material adverse effect on TVA III’s ability to consummate the business combination with PlusAI, or another business combination.
In addition, the SEC’s adopting release provided the further guidance describing circumstances in which a SPAC could become subject to regulation under the Investment Company Act, including its duration, asset composition, business purpose and the activities of the SPAC and its management team in furtherance of such goals (the “SPAC Guidance”).
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See also the risk factor entitled “We may be subject to a 1% U.S. federal excise tax in connection with redemptions of the Post-Closing Company common stock”. Compliance with the 2024 SPAC Rules and the SPAC Guidance may increase costs of, and the time needed to complete, the Business Combination.
TVA III and PlusAI have incurred and expect to incur significant costs associated with the business combination, which could be higher than currently anticipated. Whether or not the business combination is completed, the incurrence of these costs will reduce the amount of cash available to be used for other corporate purposes by TVA III if the business combination is not completed.
TVA III and PlusAI have both incurred and expect to continue to incur significant costs associated with consummating the business combination. Certain transaction expenses incurred in connection with the business combination, including legal, accounting, consulting, investment banking and other fees, expenses and costs, will be paid by the Post-Closing Company following the Closing. Even if the business combination is not completed, TVA III expects to incur approximately $7.5 million in expenses. These expenses will reduce the amount of cash available to be used for other corporate purposes by TVA III if the business combination is not completed.
TVA III and PlusAI will be subject to business uncertainties and contractual restrictions while the business combination is pending.
Uncertainty about the consummation of the business combination on employees and third parties may have an adverse effect on PlusAI and consequently on TVA III. These uncertainties may impair our or PlusAI’s ability to attract, retain and motivate key personnel and could cause third parties that deal with any of us or them to defer entering into contracts or making other decisions or seek to change existing business relationships. If key employees depart because of uncertainty about their future roles and the potential complexities of the business combination, our or PlusAI’s business following the business combination could be negatively affected. Further, covenants in the Merger Agreement impede the ability of TVA III to make or consider other acquisitions or complete other transactions that are not in the ordinary course of business pending completion of the business combination. As a result, TVA III may be at a disadvantage to its competitors during that period. While the Merger Agreement is in effect, neither TVA III nor Plus may solicit, assist, initiate, engage or facilitate the making, submission or announcement of or encourage any alternative acquisition proposal, such as a merger, material sale of assets or equity interests or other business combination, with any third party, even though any such alternative acquisition could be more favorable to TVA III’s shareholders than the Transactions. If the business combination with Plus is not completed, these provisions will make it more difficult to complete an alternative business combination following the termination of the Merger Agreement due to the passage of time during which these provisions have remained in effect.
Following the consummation of the business combination, the Post-Closing Company’s only significant asset will be its ownership interest in the PlusAI business, and such ownership may not be sufficiently profitable or valuable to enable the Post-Closing Company to satisfy the Post-Closing Company’s other financial obligations. The Post- Closing Company does not anticipate paying any cash dividends for the foreseeable future.
Following the consummation of the business combination, the Post-Closing Company will have no direct operations and no significant assets other than its ownership interest in the PlusAI business. The Post-Closing Company will depend on the PlusAI business for distributions, loans and other payments to generate the funds necessary to meet its financial obligations, including its expenses as a publicly traded company. The earnings from, or other available assets of, the PlusAI business may not be sufficient to pay dividends or make distributions or loans to enable the Post-Closing Company to pay any dividends on the common stock or satisfy its other financial obligations.
In addition, PlusAI has never declared or paid cash dividends on its capital stock, and it does not anticipate paying any cash dividends in the foreseeable future. PlusAI currently intends to retain its future earnings, if any, for the foreseeable future, to fund the development and growth of its business. Any future determination to pay dividends will be at the discretion of the Post-Closing Company Board and will be dependent upon its financial condition, results of operations, capital requirements, applicable contractual restrictions and such other factors as the board of directors may deem relevant. As a result, capital appreciation in the price of Post-Closing Company Class A common stock, if any, will be your only source of gain on an investment in Post-Closing Company Class A common stock.
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Please see the sections entitled “TVA III’s Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity, Capital Resources and Going Concern” and “PlusAI’s Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity, Going Concern and Capital Resources” for more information.
Subsequent to the completion of the business combination, the Post-Closing Company may be required to take write-downs or write-offs, restructuring and impairment or other charges that could have a significant negative effect on the Post-Closing Company’s financial condition, results of operations and stock price, which could cause you to lose some or all of your investment.
Although TVA III has conducted due diligence on the PlusAI business, TVA III cannot assure you that this diligence will surface all material issues that may be present in such business, that it would be possible to uncover all material issues through a customary amount of due diligence, or that factors outside of the PlusAI business and outside of TVA III’s and PlusAI’s control will not later arise. As a result of these factors, the Post-Closing Company may be forced to later write-down or write-off assets, restructure operations, or incur impairment or other charges that could result in losses. Even if TVA III’s due diligence successfully identifies certain risks, unexpected risks may arise and previously known risks may materialize in a manner not consistent with TVA III’s preliminary risk analysis. Even though these charges may be non-cash items and not have an immediate impact on TVA III’s liquidity, charges of this nature could contribute to negative market perceptions about the Post-Closing Company or its securities. Accordingly, any of TVA III’s shareholders who choose to remain stockholders of the Post-Closing Company following the business combination could suffer a reduction in the value of their shares.
A market for the Post-Closing Company’s securities may not develop, which would adversely affect the liquidity and price of the Post-Closing Company’s securities and may limit your ability to sell such securities.
Following the business combination, the price of the Post-Closing Company’s securities may fluctuate significantly due to the market’s reaction to the business combination and general market and economic conditions. An active trading market for the Post-Closing Company’s securities following the business combination may never develop or, if developed, it may not be sustained. In addition, the price of the Post-Closing Company’s securities after the business combination can vary due to general economic conditions, the Post-Closing Company’s general business condition and the release of the Post-Closing Company’s financial reports. Additionally, if the Post-Closing Company’s securities become delisted from the Nasdaq for any reason, and are quoted on an inter-dealer automated quotation system for equity securities that is not a national securities exchange, the liquidity and price of the Post-Closing Company’s securities may be more limited than if the Post-Closing Company was quoted or listed on the Nasdaq or another national securities exchange. You may be unable to sell your securities unless a market can be established or sustained.
If the business combination’s benefits do not meet the expectations of investors, stockholders or financial analysts, the market price of the Post-Closing Company’s securities may decline.
The benefits of the proposed business combination may not be realized to the extent currently anticipated by TVA III and PlusAI, or at all. The ability to recognize any such benefits may be affected by, among other things, competition, the ability of the Post-Closing Company to grow and manage growth profitability, maintain relationships with customers and suppliers and retain its management and key employees. If the benefits of the business combination do not meet the expectations of investors, stockholders or securities analysts, the market price of the Post-Closing Company’s securities following the consummation of the business combination may decline. The market values of the Post-Closing Company’s securities at the time of the business combination may vary significantly from their prices on the date the Merger Agreement was executed, the date of this proxy statement/prospectus, or the date on which TVA III’s shareholders vote on the business combination.
In addition, following the business combination, fluctuations in the price of the Post-Closing Company’s securities could contribute to the loss of all or part of your investment. Immediately prior to the business combination, there has not been a public market for stock relating to PlusAI’s business and trading in TVA III Class A Ordinary Shares has not been active. Accordingly, the valuation ascribed to the PlusAI business and TVA III Class A Ordinary Shares in the business combination may not be indicative of the price that will prevail in the trading market following the business combination.
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The trading price of Post-Closing Company Class A common stock following the business combination may fluctuate substantially and may be lower than its current price. This may be especially true for companies like ours with a small public float. If an active market for the Post-Closing Company’s securities develops and continues, the trading price of the Post-Closing Company’s securities following the business combination could be volatile and subject to wide fluctuations. The trading price of Post-Closing Company Class A common stock following the business combination will depend on many factors, including those described in this “Risk Factors” section, many of which are beyond TVA III’s, PlusAI’s and the Post-Closing Company’s control and may not be related to TVA III’s, PlusAI’s and the Post-Closing Company’s operating performance. These fluctuations could cause you to lose all or part of your investment in TVA III Class A Ordinary Shares since you might be unable to sell your shares at or above the price attributed to them in the business combination. Any of the factors listed below could have a material adverse effect on your investment in TVA III’s securities and PlusAI’s and the Post-Closing Company’s securities may trade at prices significantly below the price you paid for them. In such circumstances, the trading price of TVA III’s or the Post-Closing Company’s securities, as applicable, may not recover and may experience a further decline.
Factors affecting the trading price of the Post-Closing Company’s securities following the business combination may include:
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Broad market and industry factors may materially harm the market price of TVA III’s securities irrespective of TVA III’s operating performance. The stock market in general and the Nasdaq have experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of the particular companies affected. The trading prices and valuations of these stocks, and of TVA III’s securities, may not be predictable. A loss of investor confidence in the market for the stocks of other companies which investors perceive to be similar to TVA III’s could depress TVA III’s share price regardless of TVA III’s business, prospects, financial conditions or results of operations. Broad market and industry factors, as well as general economic, political and market conditions such as recessions or interest rate changes, may seriously affect the market price of TVA III Class A Ordinary Shares, regardless of TVA III’s actual operating performance. These fluctuations may be even more pronounced in the trading market for our stock shortly following the business combination. A decline in the market price of TVA III’s securities also could adversely affect TVA III’s ability to issue additional securities and TVA III’s ability to obtain additional financing in the future.
Furthermore, the stock markets in general have experienced extreme volatility, which has sometimes been unrelated to the operating performance of the issuer. The trading price of the Post-Closing Company common stock may be adversely affected by third parties trying to drive down or drive up the market price. Short sellers and others, some of whom post anonymously on social media, may be positioned to profit if our stock declines or otherwise exhibits volatility, and their activities can negatively affect our stock price and increase the volatility of our stock price. These broad market and industry factors may seriously harm the market price of our common stock, regardless of our operating performance.
In addition, in the past, following periods of volatility in the overall market and the market prices of particular companies’ securities, securities class action litigations have often been instituted against these companies. Litigation of this type, if instituted against us, could result in substantial costs and a diversion of our management’s attention and resources. Any adverse determination in any such litigation or any amounts paid to settle any such actual or threatened litigation could require that we make significant payments.
Regulatory delays could cause us to be unable to consummate the business combination.
We are not aware of any material regulatory approvals or actions that are required for completion of the business combination besides the SEC’s review of this proxy statement/prospectus and the expiration or early termination of the waiting period under the HSR Act. It is presently contemplated that if any such additional regulatory approvals or actions are required, those approvals or actions will be sought. There can be no assurance, however, that any additional approvals or actions will be obtained. This includes any potential review by a U.S. government entity, such as the Committee on Foreign Investment in the United States (“CFIUS”), on account of certain regulatory requirements related to foreign investment. We do not believe that either we or our Sponsor
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constitute or are controlled by a “foreign person” under applicable rules and regulations and intend to structure the post-closing board and management of the Post-Closing Company in such a way as to limit influence over that entity exercisable by foreign persons. More specifically, the Merger Agreement contains a representation made by both us and our Sponsor as to “foreign person” status under Section 721 of the Defense Production Act of 1950, as amended, including the implementing regulations thereof (the “DPA”), as well as a covenant restricting the composition of the board of directors of the Post-Closing Company contained in the Merger Agreement based in part on the experiences of the Company’s Sponsor and its affiliates with prior SPAC transactions. U.S. regulatory considerations related to foreign investment controls were also among the considerations that led PlusAI to separate from Plus PRC in connection with the Restructuring and to create certain low-vote preferred stock for selected holders of PlusAI. However, the primary reasons to undertake the Restructuring was related to the diverging businesses of each of Plus PRC and PlusAI and a conscious effort to increase overall stockholder value, which resulted in a fundamental shift in the business model, products offered, target customers and target geographies of PlusAI following the Restructuring.
Based on our self-assessment and future intentions, as expressed in the aforementioned representations and covenants, we do not believe that we are a “foreign person” for CFIUS purposes. However, if CFIUS considers us to be a “foreign person,” we could be subject to such foreign ownership regulatory requirements and/or CFIUS review. Please see risk factor entitled “CFIUS or other regulatory agencies may modify, delay or prevent the business combination.”
Because we have only a limited time to complete our initial business combination our failure to obtain any required regulatory approvals in connection with the business combination or to resolve the above-mentioned investigations within the requisite time period may require us to liquidate. If we liquidate, our public shareholders may only receive an amount per share based on the funds available in our trust account. This would also cause our shareholders to lose any potential investment opportunity in a target company and the chance of realizing future gains on our shareholders’ investment through any price appreciation in the Post-Closing Company.
CFIUS or other regulatory agencies may modify, delay or prevent the business combination.
CFIUS has authority to review direct or indirect foreign investments in U.S. companies. Among other things, CFIUS is empowered to require certain foreign investors to make mandatory filings, to charge filing fees related to such filings and to self-initiate national security reviews of foreign direct and indirect investments in U.S. companies if the parties to that investment choose not to file voluntarily. If CFIUS determines an investment to be a threat to national security, CFIUS has the power to unwind or place restrictions on the investment. Whether CFIUS has jurisdiction to review an acquisition or investment transaction depends on, among other factors, the nature and structure of the transaction, including the level of beneficial ownership interest and the nature of any information or governance rights involved. For example, investments that result in “control” of a U.S. business by a foreign person always are subject to CFIUS jurisdiction. CFIUS’s expanded jurisdiction under the Foreign Investment Risk Review Modernization Act of 2018 and implementing regulations that became effective on February 13, 2020 expanded CFIUS jurisdiction to also cover, and require mandatory filings with respect to, certain investments that do not result in control of a U.S. business by a foreign person but afford certain foreign investors certain information or governance rights in a U.S. business that has the requisite nexus to “critical technologies,” “critical infrastructure” and/or “sensitive personal data.” The Merger Agreement contains a representation made by PlusAI that it does not have such a nexus.
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The business combination may be subject to CFIUS and/or other foreign investment review, which depends in large part on the ultimate share ownership of the Company and Post-Closing Company following the business combination, among other factors. If the business combination were to be subject to U.S. foreign investment review, TVA III risks national security-related regulatory intervention, before or after closing the transaction. For example, CFIUS may decide to modify or delay the business combination, impose conditions with respect to such business combination, request the President of the United States to order us to divest all or a portion of PlusAI if TVA III were to acquire it without first obtaining CFIUS approval or prohibit the business combination entirely. The time necessary for CFIUS or other agency review of the business combination or a decision to delay or prohibit the business combination may also prevent the business combination from occurring within the applicable time period required under TVA III’s certificate of incorporation. These risks may limit the attractiveness of, delay or prevent us from pursuing the business combination.
Moreover, the process of government review, whether by CFIUS or otherwise, could be lengthy, and TVA III has limited time to complete the business combination. If TVA III is unable to consummate the business combination within the applicable time-period required under the TVA III’s certificate of incorporation, TVA III will be required to wind up, redeem and liquidate. If TVA III is required to wind up, redeem and liquidate, TVA III shareholders will miss the opportunity to benefit from an investment in a target company and the appreciation in value of such investment through a business combination.
Legal proceedings in connection with the business combination, the outcomes of which are uncertain, could delay or prevent the completion of the business combination.
Lawsuits may be filed against TVA III or its directors and officers in connection with the Transactions. Defending such additional lawsuits could require TVA III to incur significant costs and draw the attention of TVA III’s management team away from the Transactions. Further, the defense or settlement of any lawsuit or claim that remains unresolved at the time the Transactions are consummated may adversely affect the Post-Closing Company’s business, financial condition, results of operations and cash flows. Such legal proceedings could delay or prevent the business combination from becoming effective within the agreed upon timeframe.
Currently, there is no material litigation, arbitration or governmental proceeding currently pending against TVA III or any members of TVA III’s management team in their capacity as such, and TVA III and the members of TVA III’s management team have not been subject to any such proceeding in the 12 months preceding the date hereof.
If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by shareholders may be less than $10.00 per share.
Our placing of funds in the trust account may not protect those funds from third-party claims against us. Although we will seek to have all vendors, service providers (other than our independent registered public accounting firm), prospective target businesses and other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account for the benefit of our public shareholders, such parties may not execute such agreements, or even if they execute such agreements, they may not be prevented from bringing claims against the trust account, including, but not limited to, fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain an advantage with respect to a claim against our assets, including the funds held in the trust account. If any third party refuses to execute an agreement waiving such claims to the monies held in the trust account, our management will perform an analysis of the alternatives available to it and will only enter into an agreement with a third party that has not executed a waiver if management believes that such third party’s engagement would be significantly more beneficial to us than any alternative. Making such a request of potential target businesses may make our acquisition proposal less attractive to them and, to the extent prospective target businesses refuse to execute such a waiver, it may limit the field of potential target businesses that we might pursue.
Examples of possible instances where we may engage a third party that refuses to execute a waiver include the engagement of a third party consultant whose particular expertise or skills are believed by management to be significantly superior to those of other consultants that would agree to execute a waiver or in cases where we are
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unable to find a service provider willing to execute a waiver. In addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements with us and will not seek recourse against the trust account for any reason. Upon redemption of our TVA III public shares, if we are unable to complete the business combination, or another initial business combination within the completion window, or upon the exercise of a redemption right in connection with the business combination, we will be required to provide for payment of claims of creditors that were not waived that may be brought against us within the 10 years following redemption. Accordingly, the per-share redemption amount received by TVA III Public Shareholders could be less than the $10.00 per public share initially held in the trust account, due to claims of such creditors. Pursuant to the New Insider Letter, our Sponsor has agreed that it will be liable to us if and to the extent any claims by a third party (other than our independent public accounting firm) for services rendered or products sold to us, or a prospective target business with which we have 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 (1) $10.05 per TVA III public share and (2) the actual amount per TVA III public share held in the trust account as of the date of the liquidation of the trust account, if less than $10.05 per TVA III public share due to reductions in the value of the trust assets, in each case net of taxes payable, provided that such liability will not apply to any claims by a third party that 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 our indemnity of the underwriters of this offering against certain liabilities, including liabilities under the Securities Act. However, we have not asked our Sponsor to reserve for such indemnification obligations, nor have we independently verified whether our Sponsor has sufficient funds to satisfy its indemnity obligations and we believe that our Sponsor’s only assets are securities of our company. Therefore, we cannot assure you that our 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 business combination, or another initial business combination, and redemptions could be reduced to less than $10.05 per public share. In such event, we may not be able to complete the business combination, or another initial business combination, and you would receive such lesser amount per share in connection with any redemption of your TVA III public shares. None of our officers or directors will indemnify us for claims by third parties including, without limitation, claims by vendors and prospective target businesses.
Past performance by the Sponsor and members of our management team or our strategic and operating partners may not be indicative of future performance of an investment in us.
Information regarding performance by, or businesses associated with, the Sponsor and other members of our management team or our strategic and operating partners is presented for informational purposes only. Any past experience or performance, including related to acquisitions, of the Sponsor and members of our management team or our strategic and operating partners is not a guarantee either: (1) that we have successfully identified a suitable candidate for our initial business combination; or (2) of any results with respect to the business combination. You should not rely on the historical record and performance of the Sponsor and members of our management team or our strategic and operating partners as indicative of the future performance of an investment in us or the returns we will, or are likely to, generate going forward.
The Sponsor Support Agreement may be amended without shareholder approval.
The Sponsor Support Agreement contains provisions related to the Sponsor and Insiders’ agreement to vote their shares in favor of the Transactions and other SPAC Stockholder Matters, to vote in favor of the appointment or election of individuals nominated for election of the Post-Closing Company Board and to pay certain transaction expenses or to forfeit certain of the TVA III Founder Shares held by such Sponsor or Insider. The TVA III Board, in exercising its business judgment and subject to its fiduciary duties, may choose to approve one or more amendments to the Sponsor Support Agreement. Any such amendments to the agreement would not require approval from TVA III shareholders and may have an adverse effect on the value of an investment in our securities.
Even if we consummate the business combination, there is no guarantee that the TVA III Warrants will ever be in the money, and they may expire worthless.
Upon the Closing, the TVA III Warrants will become Post-Closing Company public warrants. The exercise price for the Post-Closing Company warrants will be $11.50 per share of Post-Closing Company common stock,
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subject to adjustment. There is no guarantee that the TVA III Warrants, following the consummation of the business combination, will ever be in the money prior to their expiration, and as such, the TVA III Warrants may expire worthless.
We may amend the terms of the TVA III Public Warrants in a manner that may be adverse to holders of TVA III Public Warrants with the approval by the holders of at least 50% of the then-outstanding TVA III Public Warrants. As a result, the exercise price of your TVA III Public Warrants could be increased, the TVA III Public Warrant could be converted into cash or shares (at a ratio different than initially provided), the exercise period could be shortened and the number of TVA III Class A Ordinary Shares purchasable upon exercise of a TVA III Public Warrant could be decreased, all without your approval.
TVA III Public Warrants are issued in registered form under a warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and TVA III. The warrant agreement provides that the terms of the TVA III Public Warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective provision, but requires the approval by the holders of at least 50% of the then-outstanding TVA III Public Warrants to make any change that adversely affects the interests of the registered holders of TVA III Public Warrants.
Accordingly, we may amend the terms of the TVA III Public Warrants in a manner adverse to a holder if holders of at least 50% of the then-outstanding TVA III Public Warrants approve of such amendment. Although our ability to amend the terms of the public warrants with the consent of at least 50% of the then-outstanding public warrants is unlimited, examples of such amendments could be amendments to, among other things, increase the exercise price of the warrants, convert the warrants into cash or shares (at a ratio different than initially provided), shorten the exercise period or decrease the number of TVA III Class A Ordinary Shares purchasable upon exercise of a warrant.
We may redeem your unexpired TVA III Public Warrants prior to their exercise at a time that is disadvantageous to you, thereby making your warrants without value to the holder.
We have the ability to redeem the outstanding TVA III Public Warrants beginning 30 days after completion of our initial business combination and prior to their expiration, at a price of $0.01 per warrant, provided that the last reported sale price of TVA III Class A Ordinary Shares equals or exceeds $18.00 per share (as adjusted for share subdivisions, share dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30 trading day period ending on the third trading day prior to the date on which we give proper notice of such redemption and provided certain other conditions are met. If and when the TVA III Public Warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the issuance of any underlying securities for sale under all applicable state securities laws. As a result, we may redeem the TVA III Public Warrants as set forth above even if the holders are otherwise unable to exercise the TVA III Public Warrants. Redemption of the outstanding TVA III Public Warrants could force you (1) to exercise your TVA III Public Warrants and pay the exercise price therefor at a time when it may be disadvantageous for you to do so, (2) to sell your TVA III Public Warrants at the then-current market price when you might otherwise wish to hold your TVA III Public Warrants or (3) to accept the nominal redemption price which, at the time the outstanding TVA III Public Warrants are called for redemption, is likely to be substantially less than the market value of your warrants.
If we are deemed to be an investment company under the Investment Company Act, we may be required to institute burdensome compliance requirements and our activities may be restricted, which may make it difficult for us to complete our initial business combination.
If we are deemed to be an investment company under the Investment Company Act, our activities may be restricted, including, without limitation, restrictions on the nature of our investments, restrictions on the issuance of securities, and restrictions on the enforceability of agreements entered into by us, each of which may make it difficult for us to complete the business combination. In addition, we may have imposed upon us burdensome requirements, including, without limitation, registration as an investment company with the SEC (which may be impractical and would require significant changes in, among other things, our capital structure); adoption of a specific form of corporate structure; and reporting, record keeping, voting, proxy and disclosure requirements and compliance with other rules and regulations that we are currently not subject to.
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In order not to be regulated as an investment company under the Investment Company Act, unless we can qualify for an exclusion, we must ensure that we are engaged primarily in a business other than investing, reinvesting or trading in securities and that our activities do not include investing, reinvesting, owning, holding or trading “investment securities” constituting more than 40% of our total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis. Our business is to identify and complete a business combination and thereafter to operate the post-transaction business or assets for the long-term. We do not plan to buy businesses or assets with a view to resale or profit from their resale. We do not plan to buy unrelated businesses or assets or to be a passive investor.
It is possible that a claim could be made that we have been operating as an unregistered investment company. If we were deemed to be an investment company for purposes of the Investment Company Act, we might be forced to abandon our efforts to complete an initial business combination and instead be required to liquidate TVA III. If we are required to liquidate TVA III, our investors would not be able to realize the benefits of owning stock in a successor operating business, including the potential appreciation in the value of TVA III’s shares following such a transaction.
We do not believe that our principal activities currently subject us to the Investment Company Act. To this end, from the time beginning with the consummation of the TVA III IPO, the proceeds held in the trust account have been invested only in United States “government securities” within the meaning of Section 2(a)(16) of the Investment Company Act having a maturity of 185 days or less, in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act which invest only in direct U.S. government treasury obligations or cash. Pursuant to the trust agreement, the trustee is not permitted to invest in other securities or assets. By restricting the investment of the proceeds to these instruments and by subsequently holding all funds in the trust account in cash, which may include demand deposit accounts (as described in the following paragraph), and by having a business plan targeted at acquiring and growing businesses for the long-term (rather than on buying and selling businesses in the manner of a merchant bank or private equity fund), we do not believe we are an “investment company” within the meaning of the Investment Company Act.
The TVA III IPO was not intended for persons seeking a return on investments in government securities or investment securities. The trust account is intended as a holding place for funds pending the earliest to occur of: (1) the completion of our primary business objective, which is a business combination; (2) the redemption of any public shares properly submitted in connection with a shareholder vote (a) to modify the substance or timing of the TVA III's obligation to redeem 100% of the public shares if TVA III has not consummated an initial business combination within the completion window, or (b) with respect to any other provision of the articles relating to the rights of holders of TVA III Class A Ordinary Shares or pre-initial business combination activity; and (3) the redemption of our public shares if we have not completed an initial business combination within the completion window. Because we have invested only in permitted instruments, we believe we are not an investment company. If we were deemed to be subject to the Investment Company Act, compliance with these additional regulatory burdens would require additional expenses for which we have not allotted funds and may hinder our ability to consummate our initial business combination. If we are unable to complete our initial business combination within the completion window our public shareholders may receive only approximately $10.00 per share on the liquidation of our trust account. In certain circumstances, our public shareholders may receive less than $10.00 per share on the redemption of their shares if we are unable to complete our initial business combination within the completion window.
To mitigate the risk of being deemed to have been operating as an unregistered investment company (including under the subjective test of Section 3(a)(1)(A) of the Investment Company Act of 1940, as amended), all funds in the trust account are held and will be held in cash (which may include demand deposit accounts) until the earlier of consummation of our initial business combination or liquidation.
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Furthermore, such cash (which may include demand deposit accounts) is held in bank accounts, which exceed federally insured limits as guaranteed by the Federal Deposit Insurance Corporation (the “FDIC”). While we have only placed our trust account deposits with Continental Stock Transfer & Trust Company, only a small portion of the funds in our trust account will be guaranteed by the FDIC.
We may be subject to a 1% U.S. federal excise tax in connection with redemptions of the Post-Closing Company common stock.
On August 16, 2022, President Biden signed into law the Inflation Reduction Act of 2022, which, among other things, imposes a 1% excise tax on the fair market value of stock repurchased by “covered corporations” beginning in 2023, with certain exceptions (the “Excise Tax”). The Excise Tax is imposed on the repurchasing corporation itself, not its stockholders from whom or which the stock is repurchased. Because we are domesticating and continuing as a Delaware corporation and our securities will continue to trade on Nasdaq, we believe that we are a “covered corporation” for this purpose. The amount of the Excise Tax is generally 1% of the fair market value of the shares repurchased at the time of the repurchase.
However, for purposes of calculating the Excise Tax, repurchasing corporations are permitted to net the fair market value of certain new stock issuances (such as the shares of Post-Closing Company common stock being issued in the Merger) against the fair market value of stock repurchases during the same taxable year. In addition, certain exceptions apply to the Excise Tax.
Any redemption or other repurchase that we make after the Domestication may be subject to the Excise Tax. Whether and to what extent we would be subject to the Excise Tax would depend on a number of factors, including (1) the fair market value of the redemptions and repurchases in connection with the business combination, (2) the nature and amount of any equity issuances in connection with the business combination, including the Merger, and (3) the content of regulations and other guidance from the U.S. Department of Treasury. Prior to the consummation of the business combination, funds in the trust account, including any interest thereon, will not be used to pay for any Excise Tax. If we consummate the business combination, any Excise Taxes from redemptions of shares of TVA III public shares in connection with the business combination would reduce the funds available to PlusAI for working capital following the business combination.
If the Merger does not qualify as a “reorganization” for U.S. federal income tax purposes, U.S. Holders of PlusAI capital stock will be required to recognize gain or loss for U.S. federal income tax purposes upon the exchange of their PlusAI capital stock for Post-Closing Company common stock in the Merger.
The U.S. federal income tax consequences of the Merger to PlusAI U.S. holders generally will depend on whether the Merger qualifies as a “reorganization” for U.S. federal income tax purposes. If the Merger fails to qualify as a reorganization within the meaning of Section 368(a) of the Code, a PlusAI U.S. holder generally would recognize gain or loss for U.S. federal income tax purposes on each share of PlusAI capital stock surrendered in the Merger for Post-Closing Company common stock and the right to the Earnout Shares. For a more complete discussion of the material U.S. federal income tax consequences of the Merger, please carefully review the information set forth in the section titled “Material U.S. Federal Income Tax Considerations of the Merger” in this proxy statement/prospectus. Each PlusAI U.S. holder should consult its own tax advisor to determine the particular tax consequences to it in light of its own particular circumstances if the Merger fails to qualify as a reorganization for U.S. federal income tax purposes.
Risks Related to the Redemption
Unless the context otherwise requires, references to “we,” “our” and “us” generally refer to TVA III prior to the business combination.
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You must tender your TVA III public shares in order to validly exercise your redemption rights.
In connection with tendering your shares for redemption, you must request in writing that TVA III redeem your TVA III public shares for cash and elect either to physically tender your share certificates to the TVA III Transfer Agent or to deliver your shares to the TVA III Transfer Agent electronically using The Depository Trust Company’s DWAC System, which election would likely be determined based on the manner in which you hold your shares, in each case, by two business days prior to the initially scheduled vote on the business combination proposal or such later date as our directors may determine. The requirement for physical or electronic delivery by two business days prior to the initially scheduled vote on the business combination proposal or such later date as our directors may determine ensures that a redeeming holder’s election to redeem is irrevocable once the business combination is approved. Any failure to observe these procedures will result in your loss of redemption rights in connection with the vote on the business combination.
The Merger Agreement provides that TVA III’s and PlusAI’s respective obligations to consummate the business combination are conditioned on TVA III having at least $5,000,001 of net tangible assets as of the Closing and the Available Closing SPAC Cash being at least equal to $40,000,000 as of the Closing, subject to waiver of such condition as provided for in the Merger Agreement and the Minimum Proceeds Side Letter.
The Sponsor Affiliate holds 1,050,000 public shares and has agreed pursuant to the terms of the Forward Purchase Agreement not to redeem its shares in contemplation of the business combination, it is not expected that TVA III would be left with less than $5,000,001 of net tangible assets as a result of redemptions by the holders of TVA III public shares. As a result, TVA III may be able to complete the business combination even though a substantial portion of public shareholders do not agree with the transaction and have redeemed their shares or have entered into privately negotiated agreements to sell their shares to Sponsor, directors or officers or their affiliates. As of the date of this proxy statement/prospectus, no agreements with respect to the private purchase of public shares by TVA III or the persons described above have been entered into with any such investor or holder. TVA III will file a Current Report on Form 8-K with the SEC to disclose private arrangements entered into or significant private purchases made by any of the aforementioned persons that would affect the vote on the business combination proposal or other proposals (as described in this proxy statement/prospectus) at the extraordinary general meeting.
In the event that the aggregate cash consideration that TVA III would be required to pay for all shares of TVA III public shares that are validly submitted for redemption, plus any amount required to satisfy the foregoing cash condition pursuant to the terms of the Merger Agreement, exceeds the aggregate amount of cash available to TVA III, TVA III may not complete the business combination or redeem any shares, and all shares of TVA III public shares submitted for redemption will be returned to the holders thereof and TVA III may instead search for an alternate business combination.
Public shareholders, together with any affiliates of theirs or any other person with whom they are acting in concert or as a “group,” will be restricted from seeking redemption rights with respect to more than 15% of the public shares.
The TVA III MAA provides 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(d) of the Exchange Act), will be restricted from redeeming in the aggregate his, her or its shares or, if part of such a group, the group’s shares, in excess of 15% of the TVA III public shares unless such shareholder first obtains TVA III’s prior consent (the “Excess Shares”). Your inability to redeem Excess Shares will reduce your influence over TVA III’s ability to consummate the business combination and you could suffer a material loss on your investment in TVA III if you sell such excess shares in open market transactions.
Additionally, you will not receive redemption distributions with respect to such excess shares if TVA III consummates the business combination. As a result, you will continue to hold that number of shares aggregating to more than 15% of the shares sold in the TVA III IPO and, in order to dispose of such excess shares, would be required to sell your stock in open market transactions, potentially at a loss. TVA III cannot assure you that the value of such excess shares will appreciate over time following the business combination or that the market price of TVA III public shares will exceed the per-share redemption price. Notwithstanding the foregoing, shareholders
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may challenge TVA III’s determination as to whether a shareholder is acting in concert or as a group with another shareholder in a court of competent jurisdiction.
However, TVA III’s shareholders’ ability to vote all of their shares (including Excess Shares) for or against the business combination is not restricted by this limitation on redemption.
There is no guarantee that a shareholder’s decision whether to redeem its shares for a pro rata portion of the trust account will put the shareholder in a better future economic position.
We can give no assurance as to the price at which a shareholder may be able to sell its public shares in the future following the completion of the business combination or any alternative business combination. Certain events following the consummation of any initial business combination, including the business combination, may cause an increase in our share price, and may result in a lower value realized now than a shareholder of TVA III might realize in the future had the shareholder not redeemed its shares. Similarly, if a shareholder does not redeem its shares, the shareholder will bear the risk of ownership of the public shares after the consummation of any initial business combination, and there can be no assurance that a shareholder can sell its shares in the future for a greater amount than the redemption price set forth in this proxy statement/prospectus. A shareholder should consult the shareholder’s own tax and/or financial advisor for assistance on how this may affect his, her or its individual situation.
Shareholders of TVA III who wish to redeem their TVA III public shares for a pro rata portion of the trust account must comply with specific requirements for redemption that may make it more difficult for them to exercise their redemption rights prior to the deadline. If shareholders fail to comply with the redemption requirements specified in this proxy statement/prospectus, they will not be entitled to redeem their TVA III public shares for a pro rata portion of the funds held in the trust account.
Shareholders electing to redeem their TVA III public shares will receive their pro rata portion of the trust account less taxes payable, calculated as of two business days prior to the anticipated consummation of the business combination. Please see the section entitled “Extraordinary General Meeting of TVA III — Redemption Rights” of this proxy statement/prospectus for additional information on how to exercise your redemption rights.
If, despite TVA III’s compliance with the proxy rules, a shareholder fails to receive TVA III proxy materials, such shareholder may not become aware of the opportunity to redeem its TVA III public shares. In addition, the proxy materials that TVA III is furnishing to holders of TVA III public shares in connection with the business combination describes the various procedures that must be complied with in order to validly redeem TVA III public shares. In the event that a shareholder fails to comply with these procedures, its TVA III public shares may not be redeemed.
Risks if the Adjournment Proposal Is Not Approved
If the adjournment proposal is not approved, and an insufficient number of votes have been obtained to authorize the consummation of the business combination, the TVA III Board will not have the ability to adjourn the extraordinary general meeting to a later date in order to solicit further votes, and, therefore, the business combination will not be approved.
If, at the extraordinary general meeting, the TVA III Board determines that it would be in the best interests of TVA III to adjourn the extraordinary general meeting to give TVA III more time to consummate the business combination for whatever reason (such as if the business combination proposal is not approved, or if additional time is needed to fulfill other closing conditions), the TVA III Board will seek approval to adjourn the extraordinary general meeting to a later date or dates. If the adjournment proposal is not approved, the TVA III Board will not have the ability to adjourn the extraordinary general meeting to a later date and, therefore, the business combination would not be completed.
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EXTRAORDINARY GENERAL MEETING OF TVA III
General
TVA III is furnishing this proxy statement/prospectus to TVA III shareholders (“you”) as part of the solicitation of proxies by the TVA III Board for use at the extraordinary general meeting of TVA III shareholders to be held on , 2026, and at any adjournment or postponement thereof. This proxy statement/prospectus provides TVA III shareholders with information they need to know to be able to vote or instruct their vote to be cast at the extraordinary general meeting.
Date, Time and Place of the Extraordinary General Meeting
The extraordinary general meeting will be held via live webcast at a.m. Eastern Time, on , 2026. The extraordinary general meeting can be accessed by visiting https://www.cstproxy.com/texasventuresacquisitioniii/bc2026, where you will be able to listen to the meeting live, ask questions and vote during the meeting. For the purposes of Cayman Islands law and the TVA III MAA, the physical location of the extraordinary general meeting will be DLA Piper LLP (US) at 3203 Hanover Street, Suite 100, Palo Alto, California 94304. Please have your control number, which can be found on your proxy card, to join the extraordinary general meeting. If you do not have a control number, please contact Continental Stock Transfer & Trust Company, TVA III’s transfer agent.
Shareholders who hold their investments through a bank or broker will need to contact the TVA III Transfer Agent to receive a control number. If you plan to vote at the extraordinary general meeting you will need to have a legal proxy from your bank or broker. If you would like to join and not vote, the TVA III Transfer Agent will issue you a guest control number with proof of ownership. In either case you must contact the TVA III Transfer Agent for specific instructions on how to receive the control number. The TVA III Transfer Agent can be contacted at 917-262-2373 or via email at proxy@continentalstock.com. Please allow up to 72 hours prior to the meeting for processing your control number.
If you do not have access to the internet, you can listen to the meeting by dialing 1 800-450-7155 (toll-free) (or +1 857-999-9155 if you are located outside the United States and Canada (standard rates apply)) and when prompted enter 7071038#. Please note that you will not be able to vote or ask questions at the extraordinary meeting if you choose to participate telephonically.
You may attend, vote and examine the list of shareholders entitled to vote at the extraordinary general meeting by visiting and entering the control number found on your proxy card, voting instruction form or notice included in the proxy materials.
The Proposals to be Submitted at the Extraordinary General Meeting
TVA III shareholders will be asked to consider and vote on the following proposals at the extraordinary general meeting:
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Each of the condition precedent proposals (as defined above) is cross-conditioned on the approval of each other. Therefore, if any of the condition precedent proposals are not approved, none of the other condition precedent proposals will have any effect, even if approved by the requisite holders of TVA III Ordinary Shares. It is important for you to note that in the event that any of those proposals are not approved, then unless certain conditions in the Merger Agreement are waived by the applicable parties to the Merger Agreement, the Merger Agreement may be terminated and the business combination may not be consummated.
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Recommendation of the TVA III Board
The TVA III Board believes that the business combination proposal and the other proposals to be presented at the extraordinary general meeting are in the best interests of TVA III and its shareholders. Accordingly, the TVA III Board unanimously recommends that shareholders vote “FOR” the business combination proposal, “FOR” the domestication proposal, “FOR” the organizational documents proposal, “FOR” the advisory organizational documents proposal, “FOR” the stock issuance proposal, “FOR” the incentive plan proposal, “FOR” the ESPP proposal, “FOR” the director election proposal and, if presented, “FOR” the adjournment proposal.
When you consider the TVA III Board’s recommendation of these proposals, you should keep in mind that our directors and officers, as well as the Sponsor, have interests in the Transactions that are different from, or in addition to, the interests of TVA III shareholders generally. Please see the section entitled “Proposal No. 1 — The Business Combination Proposal — Interests of Certain TVA III Persons in the Business Combination” for additional information. The TVA III Board was aware of and considered these interests, among other matters, in evaluating and negotiating the Transactions and in recommending to TVA III shareholders that they vote “FOR” the proposals presented at the extraordinary general meeting.
Voting Power; TVA III Record Date
TVA III shareholders will be entitled to vote or direct votes to be cast at the extraordinary general meeting if they owned TVA III Ordinary Shares at the close of business on the TVA III Record Date of , 2026. TVA III shareholders will have one vote for each share of TVA III Ordinary Shares owned at the close of business on the TVA III Record Date. If your TVA III Ordinary Shares are held in “street name” or are in a margin or similar account, you should contact your broker to ensure that votes related to the shares you beneficially own are properly counted. On the TVA III Record Date, there were 30,000,000 TVA III Ordinary Shares outstanding, of which 22,500,000 were TVA III Class A Ordinary Shares and 7,500,000 were TVA III Class B Ordinary Shares.
Quorum
A quorum of TVA III shareholders is necessary to hold a valid meeting. A quorum for such meeting will consist of the holders present by attendance via the virtual meeting website, in person or by proxy of TVA III Ordinary Shares representing at least one-third (1/3) of the paid up voting share capital of TVA III entitled to vote at such meeting. The Sponsor owns 25% of the issued and outstanding TVA III Ordinary Shares as of the TVA III Record Date, which will count towards this quorum. In addition, the Sponsor Affiliate owns 3.5% of the issued and outstanding TVA III Ordinary Shares as of the TVA III Record Date. As a result, as of the TVA III Record Date, in addition to shares of the Sponsor and the Sponsor Affiliate, 1,450,000 TVA III Ordinary Shares held by TVA III Public Shareholders would be required to be present at the extraordinary general meeting to achieve a quorum. Proxies that are marked “abstain” will be treated as shares of TVA III public shares present for purposes of determining the presence of a quorum on all matters. Broker non-votes will be counted for the purposes of determining the existence of a quorum, but will not be considered votes cast at the extraordinary general meeting.
Effect of Abstentions and Broker Non-Votes
As a matter of Cayman Islands law, abstentions will not constitute votes cast at the TVA III extraordinary general meeting and therefore will have no effect on the approval of the Proposals.
Under the rules of various national and regional securities exchanges, your broker, bank or nominee cannot vote your TVA III Ordinary Shares with respect to nonroutine matters unless you provide instructions on how to vote in accordance with the information and procedures provided to you by your broker, bank or nominee. We believe the proposals presented to the shareholders at the extraordinary general meeting will be considered nonroutine and, therefore, your broker, bank or nominee cannot vote your TVA III Ordinary Shares without your instruction on any of the proposals presented at the extraordinary general meeting. If you do not provide voting instructions to your broker, bank or other nominee with respect to any of the proposals presented at the extraordinary general meeting, your broker, bank or other nominee may deliver a proxy card expressly indicating that it is NOT voting your TVA III Ordinary Shares with respect to those proposals; this indication that a broker, bank or nominee is not voting your shares is referred to as a “broker non-vote.”
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Broker non-votes will be counted for the purposes of determining the existence of a quorum, but will not be considered votes cast at the extraordinary general meeting. Your bank, broker or other nominee can vote your TVA III Ordinary Shares only if you provide instructions on how to vote. You should instruct your broker to vote your TVA III Ordinary Shares in accordance with directions you provide.
Broker non-votes will not have any effect on the outcome of the proposals.
Vote Required for Approval
The Sponsor and the Sponsor Affiliate together own of record and are entitled to vote an aggregate of 28.5% of the outstanding TVA III Ordinary Shares (4.7% of the outstanding TVA III Class A Ordinary Shares and 100.0% of the outstanding TVA III Class B Ordinary Shares) as of the TVA III Record Date. Pursuant to the terms of the Sponsor Support Agreement, the Sponsor and the Insiders have each agreed to vote their, and to cause the Sponsor Affiliate to vote its, TVA III Ordinary Shares, including TVA III Class B Ordinary Shares and any TVA III public shares held by them as of the TVA III Record Date, in favor of the business combination proposal and the other proposals described in this proxy statement/prospectus. The business combination proposal was not structured to require the approval of at least a majority of TVA III’s unaffiliated shareholders because such a vote is not required under Cayman Islands law.
The approval of each of the business combination proposal, stock issuance proposal, incentive plan proposal, ESPP proposal, director election proposal, advisory organizational documents proposal and, if necessary, the adjournment proposal requires an ordinary resolution, being the affirmative vote of a simple majority of the votes cast by holders of outstanding TVA III Ordinary Shares represented at the extraordinary general meeting by attendance via the virtual meeting website, in person or by proxy and entitled to vote at the extraordinary general meeting, voting together as a single class. Accordingly, if a valid quorum is established, a TVA III shareholder’s failure to vote by proxy or to vote at the extraordinary general meeting with regard to the business combination proposal, stock issuance proposal, incentive plan proposal, ESPP proposal, director election proposal and, if necessary, the adjournment proposal, will have no effect on such proposals. Prior to the closing of an initial business combination, the TVA III Articles prescribe that only holders of TVA III Class B Ordinary Shares are entitled to appoint and remove directors. This provision of the TVA III MAA may only be amended if approved by a special resolution passed by at least 90% (or, where such amendment is proposed in respect of the consummation of TVA III’s initial business combination, two-thirds) of the TVA III Ordinary Shares voting at the applicable general meeting, voting together as a single class. Accordingly, the director election proposal is being voted on by TVA III shareholders on a non-binding advisory basis only.
The domestication proposal and the organizational documents proposal are being sent for approval by special resolution, being the affirmative vote of holders of at least two-thirds of the TVA III Ordinary Shares represented at the extraordinary general meeting by attendance via the virtual meeting website, in person or by proxy and entitled to vote at the extraordinary general meeting, voting together as a single class. Accordingly, if a valid quorum is established, a TVA III shareholder’s failure to vote by proxy or to vote at the extraordinary general meeting with regard to the domestication proposal and the organizational documents proposal will have no effect on such proposals. Under the TVA III Articles, a transfer by way of continuation requires the approval of a special resolution. However, pursuant to the TVA III Articles, prior to the closing of a business combination, only holders of TVA III Class B Ordinary Shares have the right to vote on any resolution to approve a transfer by way of continuation. The domestication proposal and the organizational documents proposal are being presented to all TVA III shareholders (TVA III Class A and TVA III Class B, voting together) on a non-binding advisory basis only.
Consummation of the business combination is conditioned on the approval of each of the condition precedent proposals. If any of those proposals are not approved, at the extraordinary general meeting (or any adjournment or postponement thereof) then unless certain conditions in the Merger Agreement are waived by the applicable parties to the Merger Agreement, the Merger Agreement may be terminated and the business combination may not be consummated.
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Voting Your Shares
Each share of TVA III Ordinary Shares that you own in your name entitles you to one vote. If your shares of TVA III ordinary share are held in “street name” or are in a margin or similar account, you should contact your broker to ensure that votes related to the shares you beneficially own are properly counted.
There are two ways to vote your TVA III Ordinary Shares at the extraordinary general meeting:
However, if your TVA III Ordinary Shares are held in the name of your broker, bank or another nominee, you must get a proxy card from the broker, bank or other nominee. That is the only way TVA III can be sure that the broker, bank or nominee has not already voted your shares.
Revoking Your Proxy
If you are a TVA III shareholder and you give a proxy, you may revoke it at any time before it is exercised by doing any one of the following:
If your shares are held in “street name” or are in a margin or similar account, you should contact your broker for information on how to change or revoke your voting instructions.
Who Can Answer Your Questions About Voting Your Shares
If you are a TVA III shareholder and have any questions about how to vote or direct a vote in respect of your TVA III Ordinary Shares, you may contact Sodali & Co., TVA III’s proxy solicitor, by phone at (800) 662-5200 (Toll Free) or (203) 658-9400 (banks and brokers) or by email at TVA.info@investor.sodali.com.
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Redemption Rights
Pursuant to the TVA III MAA, any holder of TVA III public shares who is not the Sponsor or a TVA III officer or director, or an affiliate thereof, including the Sponsor Affiliate (however, pursuant to the terms of the Forward Purchase Agreement, the Sponsor Affiliate has agreed that it will not redeem its shares in contemplation of the business combination), may, contemporaneously with the vote on the business combination proposal, request to redeem all or a portion of its TVA III public shares for cash, regardless of whether it votes “for” or “against” the business combination proposal. Any such TVA III shareholder holding TVA III public shares as of the TVA III Record Date may demand that TVA III redeem such shares for cash in an amount equal to their pro rata portion of the funds held in the trust account net of taxes payable (which, for illustrative purposes, was approximately $ per share as of the TVA III Record Date), calculated as of two business days prior to the anticipated consummation of the business combination. If a holder of TVA III public shares properly exercises its redemption rights as described in this section and the business combination is consummated, TVA III will redeem such holder’s shares for a pro rata portion of funds held in the trust account and the holder will no longer own TVA III public shares following the business combination.
Notwithstanding the foregoing, (1) a holder of TVA III public shares, together with any affiliate of such holder or any other person with whom such holder is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Exchange Act), will be restricted from seeking redemption rights with respect to more than 15% of the TVA III public shares. Accordingly, all TVA III public shares in excess of 15% held by a TVA III Public Shareholder, together with any affiliate of such holder or any other person with whom such holder is acting in concert or as a “group,” will not be redeemed for cash and (2) a holder of TVA III public shares that holds TVA III public shares beneficially through a nominee must identify itself to TVA III in connection with any redemption election in order to validly redeem such TVA III public shares. Moreover, pursuant to the terms of the New Insider Letter, the Sponsor and the Insiders have each agreed to waive any redemption rights with respect to any TVA III Ordinary Shares they own in connection with the consummation of the business combination.
Holders of TVA III public shares may demand redemption by delivering their shares, either physically or electronically using Depository Trust Company’s DWAC System, and requesting in writing that TVA III redeem such TVA III public shares for cash to Continental Stock Transfer & Trust Company, the TVA III Transfer Agent, at least two business days prior to the initially scheduled vote at the extraordinary general meeting (the “Redemption Deadline”). If you hold the shares of TVA III in street name, you will have to coordinate with your broker to have your shares certificated or delivered electronically. Certificates that have not been tendered (either physically or electronically) in accordance with these procedures will not be redeemed for cash. There is a nominal cost associated with this tendering process and the act of certificating the shares of TVA III public shares or delivering them through the DWAC System. The TVA III Transfer Agent will typically charge the tendering broker $100 and it would be up to the broker whether or not to pass this cost on to the redeeming shareholder. In the event the business combination is not consummated, this may result in an additional cost to TVA III shareholders for the return of their shares.
The Redemption Deadline may occur prior to the Domestication, but the redemption will be with respect to Post-Closing Company Class A common stock that an electing holder of TVA III public shares holds after the Domestication. For the purposes of the TVA III MAA, the exercise of redemption rights will be treated as an election to have such TVA III public shares redeemed for cash, and references in this proxy statement/prospectus to “redemption” or “redeeming” will be interpreted accordingly. Immediately following the Domestication and the Closing, the Post-Closing Company will satisfy the exercise of redemption rights by redeeming the corresponding shares of Post-Closing Company Class A common stock issued to the TVA III Public Shareholders that validly exercised their redemption rights.
Any request to redeem TVA III public shares may not be withdrawn once submitted to TVA III unless the directors of the TVA III Board determine (in their sole discretion) to permit the withdrawal of such redemption request (which they may do in whole or in part).
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If the business combination is not approved or completed for any reason, then holders of TVA III public shares that elected to exercise their redemption rights will not be entitled to redeem their TVA III public shares for cash in an amount equal to their pro rata portion of the funds held in the trust account, as applicable. In such case, TVA III will promptly return any TVA III public shares delivered by shareholders. Additionally, if TVA III would be left with less than $5,000,001 of net tangible assets as a result of the holders of TVA III public shares properly demanding redemption of their shares for cash, TVA III will not be able to consummate the business combination. However, because Sponsor Affiliate holds 1,050,000 public shares and has agreed pursuant to the terms of the Forward Purchase Agreement not to redeem its shares in contemplation of the business combination, it is not expected that TVA III would be left with less than $5,000,001 of net tangible assets as a result of redemptions by the holders of TVA III public shares.
The closing price of TVA III Class A Ordinary Shares on the TVA III Record Date was $ per share. The cash held in the trust account on such date was approximately $ ($ ) per TVA III public share outstanding as of the TVA III Record Date). Prior to exercising redemption rights, TVA III shareholders should verify the market price of TVA III public shares as they may receive higher proceeds from the sale of their shares in the public market than from exercising their redemption rights if the market price per share is higher than the redemption price. TVA III cannot assure its shareholders that they will be able to sell their TVA III public shares in the open market, even if the market price per share is higher than the redemption price stated above, as there may not be sufficient liquidity in its securities when TVA III shareholders wish to sell their shares.
If a holder of TVA III public shares properly exercises their redemption rights and the business combination is consummated, then they will be exchanging their TVA III public shares for cash and will no longer own those shares. They will be entitled to receive cash for their TVA III public shares only if they properly exercise their redemption rights no later than the Redemption Deadline by delivering their share certificate (either physically or electronically) to the TVA III Transfer Agent prior to the Redemption Deadline.
Pursuant to the New Insider Letter, the Sponsor and the Insiders have agreed to waive their redemption rights with respect to all of their TVA III Ordinary Shares in connection with the consummation of the business combination and, because of this, such TVA III Ordinary Shares are excluded from the pro rata calculation used to determine the per share redemption price. In addition, pursuant to the Sponsor Support Agreement, the Sponsor and the Insiders have agreed to vote their TVA III Ordinary Shares in favor of the Transactions and other SPAC Stockholder Matters. As is customary in transactions of this type, the Sponsor and the Insiders did not receive any consideration for these obligations. In addition, pursuant to the terms of the Forward Purchase Agreement, the Sponsor Affiliate has agreed not to redeem its TVA III public shares in contemplation of the business combination.
Appraisal Rights
TVA III shareholders do not have appraisal rights in connection with the business combination under the DGCL.
Proxy Solicitation Costs
TVA III is soliciting proxies on behalf of its board of directors. This solicitation is being made by mail. TVA III and its directors, officers and employees may also solicit proxies in person, or by other electronic means. TVA III will bear the cost of the solicitation.
TVA III has hired Sodali & Co. to assist in the proxy solicitation process. TVA III will pay that firm a fee of $22,500.00 for the extraordinary general meeting plus disbursements. Such payment will be made from non-trust account funds.
TVA III will ask banks, brokers and other institutions, nominees and fiduciaries to forward the proxy materials to their principals and to obtain their authority to execute proxies and voting instructions. TVA III will reimburse them for their reasonable expenses.
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Purchases of Shares
Subject to applicable securities laws (including with respect to material nonpublic information), the Sponsor and/or its affiliates may purchase shares in privately negotiated transactions or in the open market either prior to or following the completion of the business combination, although they are under no obligation to do so. However, they have no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions. Any such purchase would be in addition to the purchases of 1,050,000 TVA III public shares that the Sponsor Affiliate made in February 2026. Such a purchase may include a contractual acknowledgement that such shareholder, although still the record holder of our shares, is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights. In the event shares are purchased in privately negotiated transactions from public shareholders who have already elected to exercise their redemption rights, such selling shareholders would be required to revoke their prior elections to redeem their shares. The purpose of such purchases would be to reduce the number of shares of TVA III public shares that may be redeemed in connection with the business combination, and may include a business decision to increase such purchaser’s ownership at an attractive price. In addition, the Sponsor and/or its affiliates may purchase TVA III public shares on the open market prior to the extraordinary general meeting and separate from the redemption process conducted in connection with the business combination (“Open Market Purchases”). The Sponsor and/or its respective affiliates shall only make Open Market Purchases to the extent the price per share of TVA III public shares so acquired is no higher than the redemption price that would be available in connection with the redemption procedures described in this proxy statement/prospectus. In addition, the Sponsor and/or its affiliates will waive any redemption rights with respect to any TVA III public shares purchased in Open Market Purchases and will not vote any TVA III public shares purchased in Open Market Purchases in favor of the proposals. While the exact nature of any such arrangements has not been determined as of the date of this proxy statement/prospectus, they might include, without limitation, arrangements to protect such investors or holders against potential loss in value of their shares, including the granting of put options and, with PlusAI’s consent, the transfer to such investors or holders of shares owned by the Sponsor for nominal value.
Entering into any such arrangements may have a depressive effect on the common stock. For example, as a result of these arrangements, an investor or holder may have the ability to effectively purchase shares at a price lower than market and may therefore be more likely to sell the shares such person owns, either prior to or immediately after the extraordinary general meeting.
If such transactions are effected, the consequence could be to cause the business combination to be approved in circumstances where such approval could not otherwise be obtained. Purchases of shares by the persons described above would allow them to exert more influence over the approval of the PlusAI business combination proposal and other proposals and would likely increase the chances that such proposals would be approved.
No agreements dealing with the above arrangements or purchases have been entered into as of the date of this proxy statement/prospectus by the Sponsor or any of its affiliates. TVA III will file a Current Report on Form 8-K to disclose arrangements entered into or significant purchases made by any of the aforementioned persons that would affect the vote on the business combination proposal or the satisfaction of any closing conditions. Any such report will include descriptions of any arrangements entered into or significant purchases by any of the aforementioned persons.
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PROPOSAL NO. 1 — THE BUSINESS COMBINATION PROPOSAL
TVA III shareholders are being asked to approve the Merger Agreement and business combination (the “business combination proposal”). The discussion in this proxy statement/prospectus of the business combination and the principal terms of the Merger Agreement is subject to, and is qualified in its entirety by reference to, the Merger Agreement, which is attached as Annex A to this proxy statement/prospectus.
You should read carefully this proxy statement/prospectus in its entirety for more detailed information concerning the Merger Agreement. Please see the section entitled “— Certain Agreements Related to the Business Combination — Merger Agreement” below, for additional information and a summary of certain terms of the Merger Agreement.
General
Structure of the Transactions
On September 2, 2026, TVA III entered into the Merger Agreement with Merger Subs and PlusAI. Pursuant to the Merger Agreement, the parties thereto will enter into the business combination by which (a) the transfer of the registration of TVA III by way of continuation out of the Cayman Islands and domestication as a corporation incorporated under the laws of the State of Delaware (the “Domestication”), and (b) following the Domestication, Merger Sub I will merge with and into PlusAI, with PlusAI continuing as the surviving corporation and a wholly owned subsidiary of TVA III, and immediately thereafter, PlusAI will merge with and into Merger Sub II, with Merger Sub II continuing as the surviving entity.
The deadline by which TVA III must complete a business combination transaction is October 24, 2026. TVA III has scheduled an extraordinary general meeting to be held on October 19, 2026 for its shareholders to vote on, among other things, a proposal to amend the TVA III Articles to extend such deadline to July 24, 2027 (the “SPAC Extension”).
The following diagram depicts the current ownership structure of PlusAI and TVA III:
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The following diagram depicts the Merger:
The following diagram illustrates the ownership structure of the Post-Closing Company immediately following the Transactions. These levels of ownership interest (1) assumes no additional equity financing, other than the Convertible Notes and the PIPE Investment (and the issuance of shares of PlusAI Class A common stock in connection therewith pursuant to the Shares Issuance Agreements), will occur prior to completion of the business combination, (2) assume that (a) no TVA III Public Shareholder exercises their redemption rights in connection with the Transactions, (b) no TVA III Class A Common Stock is issued to the Sponsor in connection with the conversion of unpaid amounts under the Working Capital Loans, and (c) there are no other issuances of equity interests of TVA III or PlusAI and (3) do not take into account (a) any assumed PlusAI options that may be exercised after the consummation of the business combination, for which an estimated 2,389,994 shares of Post-Closing Company common stock are expected to be reserved, (b) any assumed unvested PlusAI RSUs that may vest after the consummation of the business combination, for which an estimated 1,978,916 shares of Post-Closing Company stock are expected to be reserved, (c) any assumed PlusAI warrants that may be exercised after the consummation of the business combination, for which an estimated 18,510,906 shares of Post-Closing Company common stock are expected to be reserved, (d) any Earnout Shares (up to an aggregate of 63,000,000 shares of Post-Closing Company common stock) that may be issued upon the occurrence of an Earnout Triggering Event during the Earnout Period, or (e) the potential issuance of any shares of Post-Closing Company common stock reserved for issuance under the Incentive Plan and the ESPP. The estimated Exchange Ratio of 0.044 reflects PlusAI capital stock outstanding as of June 30, 2026, shares of PlusAI capital stock expected to be issued pursuant to the Share Issuance Agreements and PlusAI SAFEs outstanding as of June 30, 2026. If the actual facts are different from these assumptions, TVA III Public Shareholders’ percentage ownership in the Post-Closing Company will be different.
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The ownership structure of the Post-Closing Company may differ from what is illustrated in the foregoing diagram. For more information on the ownership structure of the Post-Closing Company immediately following the business combination in the No Redemption Scenario, 25% Redemption Scenario, 50% Redemption Scenario and Maximum Redemption Scenario, please see the section of this proxy statement/prospectus entitled “Unaudited Pro Forma Condensed Combined Financial Information.”
Merger Consideration
PlusAI will take all actions necessary or appropriate so that, immediately prior to the Closing, (1) all shares of PlusAI preferred stock will be converted into shares of PlusAI common stock (the “Preferred Conversion”) and (2) all PlusAI SAFEs will be converted into shares of PlusAI common stock in accordance with the terms of such PlusAI SAFEs, in each case pursuant to the terms of the Merger Agreement (the “SAFE Conversion” and, together with the Preferred Conversion, the “Conversion”). Each share of PlusAI Class B common stock outstanding immediately prior to the First Effective Time will be exchanged for shares of Post-Closing Company Class B common stock based on the Exchange Ratio, which entitles the holder to twenty votes per share. Furthermore, certain shares of PlusAI capital stock issued and outstanding immediately prior to the First Effective Time and issued as a result of (i) the conversion of PlusAI Series A-3-X Preferred Stock, PlusAI Series A-4-X Preferred Stock or PlusAI Series B-X Preferred Stock or (ii) the exercise of any PlusAI Option granted under the 2021 Plan will be exchanged for shares of Post-Closing Company Class C common stock, which entitle the holder to one-quarter (1/4th) of a vote per share. All of the PlusAI preferred stock and PlusAI SAFEs which convert into PlusAI common stock will no longer be outstanding, and each holder of PlusAI preferred stock and PlusAI SAFEs will thereafter cease to have any rights with respect to such PlusAI preferred stock and PlusAI SAFEs, respectively.
Subject to the terms of the Merger Agreement, the value of the aggregate consideration to be paid to PlusAI stockholders and holders of PlusAI SAFEs, vested PlusAI RSUs, vested PlusAI options and vested PlusAI warrants, will be (1) $800,000,000 (the “Equity Value”), which consideration will be paid entirely in shares of Post-Closing Company common stock in an amount equal to $10.00 per share, in addition to (2) the contingent right to receive up to an aggregate of 70,000,000 shares of Post-Closing Company common stock reduced by 7,000,000 shares allocated to the Post-Closing RSU Pool for future issuances resulting in 63,000,000 shares outstanding at the Closing, which will be issued to Eligible PlusAI Equityholders during the five-year Earnout Period, in three tranches consisting of 21,000,000 shares each, in each case upon the occurrence of an Earnout Triggering Event during the Earnout Period. The price targets for the Earnout Triggering Events will be based on the VWAP of the applicable shares for any 20 trading days within any 180 consecutive trading day period within the Earnout Period.
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Each share of PlusAI common stock issued and outstanding immediately prior to the Closing (other than Excluded Shares and Dissenting Shares) will be automatically surrendered and exchanged for the right to receive a number of shares of Post-Closing Company common stock equal to the Exchange Ratio, which is based on the Per Share Equity Value. Subject to the assumptions described herein, as of the date of this proxy statement/prospectus, we estimate that the Exchange Ratio will be approximately 0.0440 shares of Post-Closing Company common stock for each issued and outstanding share of PlusAI common stock; see the section entitled “Proposal No. 1 — The Business Combination Proposal — General — Structure of the Transactions.”
At the Effective Time, by virtue of the Merger and without any further action on the part of TVA III, Merger Subs, PlusAI or any holder of any securities of TVA III or PlusAI, the following will occur:
For more information regarding the sources and uses of the funds utilized to consummate the business combination, please see the section below entitled “— Sources and Uses of Funds for the Transactions.”
Exchange and Fractional Shares
Immediately prior to or at the Effective Time, TVA III will deposit, or cause to be deposited, with Continental Stock Transfer & Trust Company (the “Exchange Agent”) evidence in book-entry form of shares of Post-Closing Company common stock representing the number of shares of Post-Closing Company common stock sufficient to deliver the Merger Consideration (as defined in the Merger Agreement).
At or prior to the Effective Time, TVA III will instruct the Exchange Agent to issue to each PlusAI shareholder the portion of the Merger Consideration to which that PlusAI shareholder is entitled to at the Closing pursuant to the Merger Agreement at or promptly after the Closing.
Notwithstanding anything to the contrary as described in the Merger Agreement, no fraction of a share of TVA III Class A Common Stock will be issued by virtue of the Merger Agreement or the Transactions, and each PlusAI shareholder that would otherwise be entitled to a fraction of a share of TVA III Class A Common Stock (after aggregating all TVA III Class A Ordinary Shares to which such PlusAI shareholder otherwise would be entitled) will instead have the number of TVA III Class A Ordinary Shares issued to such PlusAI shareholder rounded up or down to the nearest whole share of TVA III Class A Common Stock (with 0.5 of a share or greater rounded up), as applicable.
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Treatment of PlusAI Options, PlusAI RSUs and PlusAI Warrants
Except as the parties may otherwise mutually agree, at the Effective Time, each outstanding and unexercised PlusAI option (whether or not vested) will be assumed by the Post-Closing Company and become an option to purchase (x) Post-Closing Company Class A common stock to the extent such PlusAI option was granted under the 2017 Plan or (y) Post-Closing Company Class C Common Stock to the extent such PlusAI option was granted under the 2021 Plan, on the same terms and conditions (including applicable vesting, exercise and expiration provisions) as applied to each such option immediately prior to the Effective Time, except that (1) the number of shares of Post-Closing Company common stock subject to such option will equal the product of (a) the number of shares of PlusAI common stock that were subject to such option immediately prior to the Effective Time multiplied by (b) the Exchange Ratio, rounded down to the nearest whole share, and (2) the per share exercise price will equal the quotient of (a) the exercise price per share of PlusAI common stock at which such option was exercisable immediately prior to the Effective Time, divided by (b) the Exchange Ratio, rounded up to the nearest whole cent. All incentive stock options will be adjusted in accordance with the requirements of Section 424 of the Code and all PlusAI options will be adjusted in a manner that complies with or is exempt from Section 409A of the Code.
At the Effective Time, each outstanding PlusAI RSU that is unvested as of immediately prior to the Effective Time will be assumed by the Post-Closing Company and converted into the right to receive RSUs subject to shares of Post-Closing Company common stock, on the same terms and conditions (including applicable vesting, settlement and termination provisions) as applied to each such PlusAI RSU immediately prior to the Effective Time, except that the number of shares of Post-Closing Company common stock subject to such PlusAI RSU will equal the product of (1) the number of shares of PlusAI common stock that were subject to such PlusAI RSU immediately prior to the Effective Time multiplied by (2) the Exchange Ratio, rounded down to the nearest whole share. All PlusAI RSUs will be adjusted in a manner that complies with or is exempt from Section 409A of the Code.
At the Effective Time, each PlusAI warrant will be treated in accordance with the terms of such PlusAI warrant and the Merger Agreement and become a Post-Closing Company assumed warrant.
Earnout
Up to an aggregate of 70,000,000 shares of Post-Closing Company common stock reduced by 7,000,000 shares allocated to the Post-Closing RSU Pool for future issuances resulting in 63,000,000 shares outstanding at the Closing will be issued to Eligible PlusAI Equityholders upon the occurrence of an Earnout Triggering Event during the Earnout Period (such shares, the “Earnout Shares”), in three separate tranches equal to (1) 21,000,000 shares, (2) 21,000,000 shares, and (3) 21,000,000 shares, in each case subject to adjustment and the applicable price target being achieved based on the VWAP for any 20 trading days within any 180 consecutive trading day period during the Earnout Period.
Impact of the Business Combination on Our Public Float
As of the date of this proxy statement/prospectus, there are 30,000,000 TVA III Ordinary Shares issued and outstanding, which consists of 22,500,000 TVA III public shares and 7,500,000 TVA III Founder Shares held by the Sponsor. Therefore, as of the date of this proxy statement/prospectus (without giving effect to the Transactions) TVA III’s fully diluted share capital would be 30,000,000 TVA III Class A Ordinary Share equivalents.
The following table illustrates varying ownership levels and voting power in the Post-Closing Company immediately following the consummation of the business combination, based on the following scenarios:
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The following summarizes the pro forma shares of the Post-Closing Company common stock (as defined herein) issued and outstanding immediately after the business combination and Transactions (as defined herein) on an issued and outstanding basis, presented under the following redemption scenarios:
|
|
No Redemption |
|
|
25% Redemption |
|
|
50% Redemption |
|
|
Maximum Redemption |
|
||||||||||||||||||||||||||||||||||||
|
|
Shares |
|
|
% Outstanding |
|
|
% |
|
|
Shares |
|
|
% Outstanding |
|
|
% |
|
|
Shares |
|
|
% Outstanding |
|
|
% |
|
|
Shares |
|
|
% Outstanding |
|
|
% |
|
||||||||||||
TVA Public Stockholders (1) |
|
|
22,500,000 |
|
|
|
20.9 |
% |
|
|
6.1 |
% |
|
|
16,875,000 |
|
|
|
16.5 |
% |
|
|
4.6 |
% |
|
|
11,250,000 |
|
|
|
11.7 |
% |
|
|
3.1 |
% |
|
|
1,050,000 |
|
|
|
1.3 |
% |
|
|
0.3 |
% |
Sponsor and affiliates (2) |
|
|
7,500,000 |
|
|
|
7.0 |
% |
|
|
2.0 |
% |
|
|
7,500,000 |
|
|
|
7.4 |
% |
|
|
2.1 |
% |
|
|
7,500,000 |
|
|
|
7.8 |
% |
|
|
2.1 |
% |
|
|
7,500,000 |
|
|
|
8.7 |
% |
|
|
2.1 |
% |
PlusAI Stockholders (3) |
|
|
77,550,256 |
|
|
|
72.0 |
% |
|
|
91.9 |
% |
|
|
77,550,256 |
|
|
|
76.0 |
% |
|
|
93.3 |
% |
|
|
77,550,256 |
|
|
|
80.4 |
% |
|
|
94.8 |
% |
|
|
77,550,256 |
|
|
|
89.9 |
% |
|
|
97.6 |
% |
CCM (4) |
|
|
100,000 |
|
|
|
0.1 |
% |
|
|
0.0 |
% |
|
|
100,000 |
|
|
|
0.1 |
% |
|
|
0.0 |
% |
|
|
100,000 |
|
|
|
0.1 |
% |
|
|
0.0 |
% |
|
|
100,000 |
|
|
|
0.1 |
% |
|
|
0.0 |
% |
Total Common Stock Outstanding |
|
|
107,650,256 |
|
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
102,025,256 |
|
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
96,400,256 |
|
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
86,200,256 |
|
|
|
100.0 |
% |
|
|
100.0 |
% |
Deferred Underwriting Fees
$9.0 million of the TVA III IPO underwriting fee was deferred and payable to the underwriters in the TVA III IPO upon completion of an initial business combination. Such deferred underwriting fees will be based on and paid out of funds remaining in the trust account after redemptions of TVA III public shares upon the closing of the Transactions, subject to the terms of the TVA III IPO Underwriting Agreement.
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PlusAI Advisory Agreements
PlusAI and CCM have entered into an engagement letter under which CCM will provide financial advisory and capital markets advisory services to PlusAI in connection with the Transactions. Pursuant to the engagement letter, CCM will receive (i) a cash advisory fee of $2 million and $1 million worth of common shares or equivalent equity of the Post-Closing Company and (ii) a transaction fee in connection with any offering of securities solely to the extent such offering is undertaken in connection with the Transactions, in an amount equal to (A) 5.0% of the gross proceeds raised in connection with the Convertible Notes, PIPE Investment and any Other PIPE Investment and received by PlusAI or TVA III prior to or simultaneous with and upon the closing of such offering; provided, however, that such portion of the fee shall be offset by any deferred underwriting commission received by CCM with respect to the TVA III IPO (the “Advisory Fee”), in each case, payable upon the closing of the Transactions. In addition, PlusAI has agreed to reimburse CCM for up to $50,000 of reasonable and documented out-of-pocket expenses. CCM shall be eligible for an additional incentive fee of up to 125,000 shares of the Post-Closing Company, payable solely at the discretion of PlusAI.
Merger Agreement
The summary of the material provisions of the Merger Agreement set forth below and elsewhere in this proxy statement/prospectus is qualified in its entirety by reference to the Merger Agreement, a copy of which is attached to this proxy statement/prospectus as Annex A and which is incorporated by reference in this proxy statement/prospectus. All TVA III shareholders are encouraged to read the Merger Agreement in its entirety for a more complete description of the terms and conditions of the business combination.
The Domestication
At least one day prior to the Closing, TVA III shall the transfer of TVA III by way of continuation out of the Cayman Islands and domestication as a corporation incorporated under the laws of the State of Delaware. Please see the section entitled “Proposal No. 2 — The Domestication Proposal”.
Closing and Effective Time of the Mergers
The Closing will take place promptly following the satisfaction or waiver of the conditions described below under the section entitled “— Conditions to Closing General Conditions,” unless TVA III and PlusAI agree in writing to another time or unless the Merger Agreement is terminated. The Transactions are expected to be consummated promptly after the approval by TVA III shareholders of the proposals voted on at the extraordinary general meeting, as described in this proxy statement/prospectus.
Representations and Warranties
The Merger Agreement contains customary representations and warranties of PlusAI that are subject, in some cases, to specified exceptions and qualifications contained in the Merger Agreement. These representations and warranties relate to, among other things:
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The Merger Agreement contains customary representations and warranties of TVA III and Merger Subs that are subject, in some cases, to specified exceptions and qualifications contained in the Merger Agreement. These representations and warranties relate to, among other things:
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Covenants
The parties have each agreed to use commercially reasonable efforts to prepare and file any information as may be reasonably necessary to obtain as promptly as practicable all governmental and regulatory consents required to be obtained in connection with the Transactions and to use commercially reasonable efforts to obtain certain required consents and approvals that are required to be obtained under certain contracts of PlusAI. The parties have also agreed to take such other actions as may be reasonably necessary to satisfy the conditions of the
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other parties as set forth in the Merger Agreement or to otherwise comply with the Merger Agreement and to consummate the Transactions as soon as practicable.
During the pre-closing period, unless expressly contemplated by the Merger Agreement, required by law or any governmental authority, consented to by TVA III (which consent will not be unreasonably conditioned, withheld, delayed or denied), or set forth in PlusAI’s disclosure letter to the Merger Agreement, PlusAI has agreed to, and to cause its subsidiaries to, use commercially reasonable efforts to operate its business in all material respects in the ordinary course of business.
Subject to specified exceptions and qualifications contained in the Merger Agreement, PlusAI has agreed that neither PlusAI nor any of its subsidiaries will take the following actions during the interim period between signing of the Merger Agreement and Closing without the prior written consent of TVA III (which consent will not be unreasonably conditioned, withheld, delayed or denied):
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Subject to specified exceptions and qualifications, TVA III has agreed that neither TVA III nor its subsidiaries will take the following actions during the interim period between signing of the Merger Agreement and Closing, without the prior written consent of PlusAI (which consent will not be unreasonably conditioned, withheld, delayed or denied, except in certain cases as described in the Merger Agreement as to which PlusAI consent may be granted or withheld at its sole discretion):
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The Merger Agreement also contains additional covenants of the parties, including, among other things, covenants providing for:
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Conditions to Closing General Conditions
Consummation of the Transactions is conditioned on the approval of the condition precedent proposals by TVA III shareholders described in this proxy statement/prospectus, and the adoption and approval of the Merger Agreement and the approval of the Merger and the other Transactions by the requisite consent of PlusAI’s stockholders.
In addition, the consummation of the Transactions contemplated by the Merger Agreement is conditioned upon, among other things:
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TVA III’s Conditions to Closing
The obligations of TVA III and Merger Sub to consummate the Transactions contemplated by the Merger Agreement also are conditioned upon, among other things:
PlusAI’s Conditions to Closing
The obligations of PlusAI to consummate the Transactions also are conditioned upon, among other things:
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Waiver
Any party to the Merger Agreement may, at any time prior to the Closing, by action taken by its board of directors or equivalent governing body, or officers thereunto duly authorized, waive in writing any of its rights or conditions in its favor under the Merger Agreement. Notwithstanding the foregoing, pursuant to the TVA III Articles, TVA III cannot consummate the business combination if it has less than $5,000,001 of net tangible assets remaining after the Closing.
The existence of the financial and personal interests of the directors may result in a conflict of interest on the part of one or more of them between what such director may believe is best for TVA III and what such director may believe is best for such director in determining whether or not to grant a waiver in a specific situation.
Termination
The Merger Agreement may be terminated and the Transactions abandoned, but not later than the Closing, as follows:
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Effect of Termination
In the event of proper termination by either TVA III or PlusAI, the Merger Agreement will become void and have no effect (other than with respect to certain surviving provisions specified in the Merger Agreement), without any liability on the part of any party thereto or its respective affiliates, officers, directors, employees, representatives or stockholders, other than liability of (1) any party thereto for any intentional and willful breach of the Merger Agreement by such party occurring prior to such termination or (2) any party to any other Transaction Agreement, solely to the extent set forth under the express terms of such other Transaction Agreement.
Fees and Expenses
All fees and expenses incurred in connection with the Merger Agreement and Transactions, except for those fees associated with the filing to obtain clearance pursuant to the HSR Act, will be paid by the party incurring such expenses whether or not the Transactions shall be consummated; provided that if the Closing occurs, TVA III will bear and pay at or promptly after the Closing:
provided that all costs of investigation and all defense and attorneys’ and other professional fees and settlement payments related to stockholder actions initiated by or on behalf of any stockholders of PlusAI, whether borne by TVA III or PlusAI, shall be fully payable by the Post-Closing Company if the closing of the Transactions occurs and not subject to any limitation or cap. All fees and expenses in connection with filing to obtain clearance pursuant to the HSR Act shall be paid by TVA III.
Amendments
The Merger Agreement may be amended by the parties thereto at any time by execution of a duly authorized agreement in writing executed on behalf of each of the parties in the same manner as the Merger Agreement and which makes reference to the Merger Agreement. Any such amendment shall be binding upon the parties once duly executed. TVA III would file a Current Report on Form 8-K and issue a press release to disclose any amendment to the Merger Agreement entered into by the parties. If such amendment is material to investors, a proxy statement supplement would also be sent to TVA III shareholders as promptly as practicable.
Governing Law; Consent to Jurisdiction
The Merger Agreement is governed by the laws of the State of Delaware. The parties to the Merger Agreement have irrevocably submitted to the federal and state courts located in the State of Delaware (except that the Cayman Company Act shall apply to the Domestication and any claims related to internal affairs of TVA III prior to the Domestication).
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TVA III Sponsor
TVA III’s Sponsor, Yorkville Acquisition Sponsor II, LLC, is a Florida limited liability company. Mark Angelo, a director of TVA III, and the president and manager of Yorkville Advisors Global, LP, which is the manager of the Sponsor and the investment manager of the Sponsor Affiliate, controls the management of Sponsor, including the exercise of voting and investment discretion over the securities of TVA III held by Sponsor and the Sponsor Affiliate. See section entitled “Other Information Related to TVA III—Management, Directors and Executive Officers” for further information.
The general character of the Sponsor's business is to provide capital to and to be the sponsor of TVA III. The Sponsor acquired its interest in the securities of TVA III from Prior Sponsor, which organized, directed and managed the business and affairs of TVA III from its inception, through the TVA III IPO, until the sale of these securities to the Sponsor on September 18, 2025. Since that time, the Sponsor has assisted TVA III in connection with identifying, investigating and completing an initial business combination. The Sponsor is not actively involved in any other special purpose acquisition company. Affiliates of the Sponsor have acted as the sponsor of other special purpose acquisition companies being Yorkville Acquisition Corp. and Blue Water Acquisition Corp. III. See the section entitled “Other Information Related to TVA III—Sponsor Information—Experience with Other SPACs.”
For more information about the Sponsor and the agreements the Sponsor has entered into with TVA III, please see the section entitled “Certain Relationships and Related Person Transactions—TVA III Related Person Transactions.”
Certain Agreements Related to the Business Combination
This section describes the related agreements entered into or to be entered into pursuant to the Business Combination Agreement but does not purport to describe all of the terms thereof. The following summary is qualified in its entirety by reference to the complete text of each of the related agreements. The full text of the related agreements, or forms thereof, are filed as Annexes to this proxy statement/prospectus or as exhibits to the registration statement of which this proxy statement/prospectus forms a part, and the following descriptions are qualified in their entirety by the full text of such annexes and exhibits. Shareholders of TVA III and other interested parties are urged to read such related agreements in their entirety prior to voting on the proposals presented at the extraordinary general meeting.
Sponsor Support Agreement
Concurrently with the execution of the Merger Agreement, TVA III entered into the Sponsor Support Agreement with Sponsor, PlusAI, the Insiders, who constitute the members of TVA III’s board of directors and/or management team. The following summary of material provisions of the Sponsor Support Agreement is qualified by reference to the complete text of the Sponsor Support Agreement, a copy of which is attached to the accompanying proxy statement/prospectus as Exhibit C to Annex A. All shareholders are encouraged to read the Sponsor Support Agreement in its entirety for a more complete description of the terms and conditions of the Sponsor Support Agreement.
Pursuant to the terms of the Sponsor Support Agreement, the Sponsor agreed, among other things: (a) at the extraordinary general meeting to be present in person or by proxy and vote, or cause to be voted at such meeting, all Sponsor Securities and Sponsor Affiliate Securities, entitled to vote thereon (i) in favor of the SPAC Stockholder Matters and (ii) in favor of any other matter reasonably necessary to the consummation of the transactions contemplated by the Merger Agreement and considered and voted upon at any extraordinary general meeting; (b) at the extraordinary general meeting to be present in person or by proxy and vote, or cause to be voted at such meeting, all Sponsor Securities and Sponsor Affiliate Securities entitled to vote thereon against (i) any business combination other than with the Company, its stockholders and their respective affiliates and representatives; (ii) any merger, consolidation, combination, sale of substantial assets, reorganization, recapitalization, dissolution, liquidation or winding up of TVA; (iii) any change in the business, management or board of directors of TVA; and (iv) certain other actions, proposals or agreements; and (c) if approval of the SPAC Extension is sought from TVA’s shareholders, the Sponsor shall vote all of its TVA III Class B Ordinary Shares and any other shares acquired by the Sponsor in favor of any proposal approving such SPAC Extension.
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In addition, the Sponsor and the Insiders, automatically and without any further action by the Sponsor or TVA, irrevocably (a) waive any adjustment to the conversion ratio set forth in the Existing SPAC Governing Document and any rights to other anti-dilution protections pursuant to the TVA III MAA, as adopted by special resolution on April 22, 2025, or otherwise, and, as a result, the shares of TVA III Class B Ordinary Shares shall convert into Post-Closing Company common stock (or such equivalent security) in connection with the Domestication and consummation of the Mergers on a one-for-one basis, and (b) agree not to assert or perfect any rights to adjustment or other anti-dilution protections, in each case, in connection with the Transactions.
Furthermore, if all fees, costs and expenses of TVA III incurred prior to and through the Closing Date in connection with the Transactions (collectively, the “SPAC Transaction Expenses”), other than specified SPAC Transaction Expenses, exceed $7.5 million (the “Excess Amounts”), the Sponsor will, at its sole discretion, either (a) pay, or cause an affiliate of the Sponsor to pay, the Excess Amounts to TVA III or an account designated by TVA III in cash by wire transfer of immediately available funds or (b) forfeit such number of TVA III Class B Ordinary Shares or shares of TVA III Class A Ordinary Shares issued or issuable upon the conversion of such shares equal to ((1) the Excess Amounts minus (2) any cash amounts paid pursuant to clause (a)) divided by $10.00, subject to the limitation that the number of forfeited shares may not exceed the number of Founder Shares owned by the Sponsor as of the date of the Sponsor Support Agreement.
The Sponsor Support Agreement does not provide for vesting and forfeiture of any TVA III Founder Shares based on the amount of the Available Closing SPAC Cash or the achievement of certain stock price performance after the Closing.
Amended and Restated Registration Rights Agreement
Effective upon the Closing, the Existing Registration Rights Agreement by and between TVA III, the Sponsor, CCM, and Clear Street as the Existing Holders, has been amended and restated in its entirety as the A&R Registration Rights Agreement, with the Sponsor Affiliate and certain persons and entities receiving Post-Closing Company common stock in connection with the Mergers being added as parties to the A&R Registration Rights Agreement, a copy of which is filed as Exhibit E to the Merger Agreement attached as Annex A to this proxy statement/prospectus, and all parties to the A&R Registration Rights Agreement being referred to as the Holders. The following summary of material provisions of the A&R Registration Rights Agreement is qualified by reference to the complete text of the A&R Registration Rights Agreement. All shareholders are encouraged to read the A&R Registration Rights Agreement in its entirety for a more complete description of its terms and conditions.
Pursuant to the A&R Registration Rights Agreement, TVA III will use commercially reasonable efforts to (1) file with the SEC, at TVA III’s sole cost and expense, a registration statement registering the resale of certain securities held by or issuable to the Holders within 10 business days after the Closing (the “Resale Registration Statement”) and (2) cause the Resale Registration Statement to become effective as soon as reasonably practicable after the filing thereof, but in no event later than 45 business days after the Closing Date. In certain circumstances, the Holders may demand in the aggregate up to three underwritten offerings and will be entitled to customary piggyback registration rights.
Pursuant to the A&R Registration Rights Agreement, subject to certain exceptions, the Holders have agreed not to transfer their respective shares for a period of 360 days following the Closing Date (the “Lock-Up Period”). Subject to certain exceptions to the termination of transfer restrictions with respect to shares of Post-Closing Company common stock issued as Earnout Shares (the “Lock-Up Earnout Shares”) or held directly or indirectly by certain founder executives of PlusAI (the “Plus Founder Shares”), such transfer restrictions terminate (a) as to 50% of a Holder’s shares upon the earlier of 180 days after the Closing (the “Reduced Lock-Up Period”) and the date on which the VWAP of the Post-Closing Company Class A common stock equals or exceeds $12.50 per share during any 20 trading days within any 180 consecutive trading day period following the Closing, and (b) other than Lock-Up Earnout Shares and Plus Founder Shares, with respect to all of a Holder’s shares upon the date on which the VWAP of the Post-Closing Company Class A common stock equals or exceeds $15.00 per share during any 20 trading days within any 180 consecutive trading day period following the Closing. Furthermore, the Sponsor is not subject to certain other transfer restrictions as described in the A&R Registration Rights Agreement, and, with respect to all shares of Post-Closing Company Class A common stock into which the TVA III Class B Ordinary Shares convert upon the Domestication, the transfer restrictions will terminate 120 days after the Closing.
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Similar transfer restrictions will apply to the shares of Post-Closing Company common stock issued to former securityholders of PlusAI in connection with the Mergers pursuant to the Proposed Bylaws.
Company Voting and Support Agreements
Concurrently with the execution of the Merger Agreement, certain stockholders of PlusAI entered into the Company Voting and Support Agreements with TVA III and PlusAI, in their capacity as such. The following is a summary of the material provisions of the Company Voting and Support Agreements and is qualified by reference to the complete text of the Company Voting and Support Agreements, a copy of which is attached to the accompanying proxy statement/prospectus as Exhibit D to Annex A.
Under the terms of the Company Voting and Support Agreements, the stockholders of PlusAI party thereto have agreed, among other things, to deliver written consents to adopt the Merger Agreement and approve the Transactions, and to vote or consent in opposition to alternative transactions and other matters that could reasonably be expected to materially delay or impair the ability of PlusAI to consummate the Transactions. The stockholders of PlusAI party to the Company Voting and Support Agreements hold sufficient shares of stock of PlusAI to effect the Company Stockholder Approval. In addition, each PlusAI stockholder party to a Company Voting and Support Agreement has agreed to refrain from exercising any dissenters’ rights under applicable law.
The Company Voting and Support Agreements also contain certain restrictions on the transfer of the shares of PlusAI held by the stockholders party thereto prior to the Closing, subject to certain exceptions.
Convertible Note and Warrant Subscription Agreements
Concurrently with the execution and delivery of the Merger Agreement, TVA III and PlusAI entered into subscription agreements (the “Convertible Note and Warrant Subscription Agreements”) with certain accredited investors and qualified institutional buyers, including the Sponsor Affiliate (collectively, the “Note Investors”), pursuant to which TVA III agreed to issue and sell, in a private placement to close following the Domestication and substantially concurrently with the Closing, (i) Senior Convertible PIK Notes (the “Convertible Notes”) in an aggregate original principal amount of $63,888,888, issued at a 10% original issue discount resulting in net cash proceeds of $57,500,000, and (ii) warrants to purchase shares of Post-Closing Company Class A common stock (the “PIPE Warrants”) covering an aggregate of 5,324,074 shares, with the number of shares issuable upon exercise equal to 100% of the original principal amount of the applicable Convertible Note divided by $12.00. The Convertible Notes will be senior unsecured obligations of the Post-Closing Company, guaranteed by PlusAI and its subsidiaries (the “Guarantors”) pursuant to a Global Guaranty Agreement (the “Guaranty”). The Sponsor Affiliate has subscribed for approximately $27,777,778 in original principal amount of Convertible Notes at a 10% original issue discount resulting in net cash proceeds of $25,000,000, and a warrant to purchase 2,314,815 shares of Post-Closing Company Class A common stock.
The Convertible Note and Warrant Subscription Agreements contain customary covenants and closing conditions, including approval for listing of the shares underlying the Convertible Notes and PIPE Warrants, Available Closing SPAC Cash of at least $40,000,000 unless waived by TVA III and PlusAI (provided that failure to meet that condition does not excuse an investor’s funding obligation), and the absence of any amendment, modification or waiver of the Merger Agreement reasonably expected to materially and adversely affect a Note Investor’s expected economic benefits without that Note Investor’s consent. They also contain a standstill provision that, subject to certain exempt issuances, applies until six months after the effective date of the Resale Registration Statement. The Available Closing SPAC Cash closing condition is also subject to the Minimum Proceeds Side Letter.
The Convertible Notes will bear interest at the Post-Closing Company’s election by written notice delivered at least five business days before the applicable interest payment date as entirely cash interest at 8.00% per annum, entirely as “PIK” interest that is to be capitalized and added to the outstanding principal amount at 10.00% per annum, or a combination of cash and PIK interest. Cash interest is payable monthly in arrears. If the
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Post-Closing Company does not timely make an election, interest for that period will be entirely PIK interest. The applicable rates increase by 2.00% per annum during an event of default, and each applicable rate increases by 1.00% per annum if the Post-Closing Company fails to maintain unrestricted cash and cash equivalents of at least $10,000,000 as of the last business day of a calendar month. The Convertible Notes will mature on the fifth anniversary of the Closing Date (the “Maturity Date”).
At any time on or after the issuance of the Convertible Notes and before the close of business on the business day immediately preceding the Maturity Date, each holder may convert all or any portion of a Convertible Note, together with accrued and unpaid cash interest, into shares of Post-Closing Company Class A common stock (with partial conversions generally subject to a minimum principal amount of $100,000) at a conversion price equal to 95% of the lowest daily VWAP during the five consecutive trading days preceding conversion, subject to a $5.00 per-share floor. If a holder converts before the third anniversary of the Closing Date, such holder will receive from the Post-Closing Company an interest make-whole amount equal to the present value, discounted at the then-applicable U.S. Treasury rate plus 50 basis points, of the remaining scheduled cash interest payments that would have been payable at 8.00% per annum through the third anniversary, payable in cash or, at Post-Closing Company’s election and subject to the Convertible Note, shares of Post-Closing Company Class A common stock. Upon a Make-Whole Fundamental Change, a holder converting during the specified period will be entitled to an increased conversion rate based on a conversion price equal to 95% of the lowest of the transaction price and the lowest daily VWAPs during the applicable five-trading-day periods before the effective date and announcement of the Make-Whole Fundamental Change, subject to the conversion price floor. The conversion price and conversion price floor are also subject to anti-dilution adjustments, including a full-ratchet reduction of the floor for certain qualifying issuances below the then-current floor. If the issuance of shares upon conversion would exceed applicable exchange-cap limitations before required stockholder approval, the Post-Closing Company shall either pay the entire amount in cash or deliver to the holder shares up to the permitted amount with the balance paid in cash, at the holder's election.
Following effectiveness of the Resale Registration Statement, the Post-Closing Company may redeem the Convertible Notes at 130% of accrued value, as of the date of determination, calculated as the sum of (i) the outstanding principal amount of the Convertible Notes, plus (ii) all accrued and unpaid cash interest as of such date, plus (iii) all other amounts then due and payable under the Convertible Notes (the “Accrued Value”) before the second anniversary of the Closing Date and 120% of Accrued Value thereafter, subject to the terms of the Convertible Notes. Holders may require repurchase of all or any portion of a Convertible Note for cash at 130% of Accrued Value before the second anniversary of the closing of the Convertible Notes and 120% of Accrued Value on or after the second anniversary, including on or after maturity, upon a Fundamental Change (as such term is defined in the Convertible Notes) and may put the Convertible Notes for cash at 100% of its Accrued Value during the period beginning 30 calendar days before the Maturity Date and ending on the fifth business day before the Maturity Date. Unless previously converted, redeemed or repurchased, any portion not so put will automatically be settled at maturity in shares of Post-Closing Company Class A common stock at a maturity conversion price equal to the conversion price then in effect, subject to applicable stockholder approval and exchange-cap limitations, with cash payable for any portion that cannot be settled in shares. The Convertible Notes are direct, senior unsecured obligations, ranking senior in right of payment to subordinated and other unsecured indebtedness except as permitted by the Convertible Note; in a liquidation, the holder is entitled to receive the Accrued Value before distributions on subordinated debt or equity. The Convertible Notes contain affirmative and negative covenants and events of default relating to payment, conversion or settlement, covenants, representations, cross-defaults, bankruptcy, judgments, delisting, share reservations, minimum liquidity and guaranty defaults.
Each PIPE Warrant will be exercisable immediately upon issuance at an initial exercise price of $12.00 per share and will expire five years after issuance. The PIPE Warrants may be exercised for cash or, if available, on a net-issuance basis and will be automatically exercised on a net-issuance basis at expiration. The exercise price will reset every nine months, if lower, to the greater of the applicable lowest daily VWAP during the preceding five trading days and the $5.00 per-share floor, with a corresponding adjustment to the number of underlying shares.
Under the Guaranty, PlusAI and each of its subsidiaries will jointly and severally guarantee the full and unconditional payment and performance of the Convertible Notes. Any entity that becomes a subsidiary after
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issuance must join the Guaranty within 15 business days. The Convertible Notes and guaranty obligations will not be secured by any lien or security interest in the assets of PlusAI or any Guarantor.
PIPE Subscription Agreements
Concurrently with the execution and delivery of the Merger Agreement, TVA III and PlusAI entered into the PIPE Subscription Agreements with certain accredited investors and qualified institutional buyers (collectively, the “PIPE Investors”), pursuant to which TVA III agreed to issue and sell, in a private placement to close following the Domestication and substantially concurrently with the Closing, 400,000 shares of Post-Closing Company Class A common stock and PIPE Warrants covering 400,000 shares of Post-Closing Company Class A common stock for an aggregate purchase price of approximately $4.0 million (the “PIPE Investment”). The PIPE Subscription Agreements contain a standstill provision on the same terms as provided under the Convertible Note and Warrant Subscription Agreements.
PIPE Side Letters
Concurrently with the execution and delivery of the PIPE Subscription Agreements, the Convertible Note, and the Warrant Subscription Agreements, TVA III and PlusAI entered into side letter agreements (collectively, the “PIPE Side Letters”) with each of the Note Investors and PIPE Investors that supplement the applicable subscription agreements and provide such investors with modified lock-up terms and other contractual rights. The PIPE Side Letters consist of (i) letters entered into with the PIPE Investors, other than the Sponsor Affiliate (collectively, the “Investor Side Letters”), (ii) a letter entered into with the Sponsor Affiliate (the “Sponsor Affiliate Side Letter”) and (iii) a letter entered into with an existing investor of PlusAI (the “Minimum Proceeds Side Letter”).
Pursuant to the Investor Side Letters, if the Closing occurs and the investor fulfills its subscription obligations, (i) shares of Post-Closing Company Class A common stock acquired upon the conversion of the Convertible Notes or pursuant to the PIPE Subscription Agreements, the PIPE Warrants and the shares of Post-Closing Company Class A common stock issuable upon exercise of the PIPE Warrants will not be subject to lock-up restrictions set forth in the Proposed Bylaws and the A&R Registration Rights Agreement (the “lock-up restrictions”); (ii) a number of Lockup Shares (as defined in the Proposed Bylaws) held by such investor equal to 3.5 multiplied by such investor’s subscription amount divided by $10.00 will be released from lock-up restrictions on the date that is 120 days after the Closing; (iii) upon the earlier of (A) 180 days following the Closing or (B) the occurrence of Lockup Release Trigger Event I, up to 50% of such investor’s Lockup Shares will be released from such lock-up restrictions (exclusive of shares previously released); and (iv) upon the earlier of (A) expiration of the Lock-Up Period or (B) the occurrence of Lockup Release Trigger Event II, the lock-up restrictions will terminate as to all shares of Post-Closing Company Class A common stock or PIPE Warrants held by such investor.
Pursuant to the Investor Side Letters, in the event that the Closing fails to occur for any reason, TVA III shall reimburse such investor in cash for the full subscription amount paid, within one business day following such investor’s written request. Further, TVA III shall not waive, release, amend, repeal, suspend or terminate the lock-up restrictions applicable to other holders of Lockup Shares without the prior written consent of the PIPE Investors.
Pursuant to the Sponsor Affiliate Side Letter, if the Closing occurs and the Sponsor Affiliate fulfills its subscription obligations, (i) shares of Post-Closing Company Class A common stock acquired upon the conversion of the Convertible Notes or pursuant to the PIPE Subscription Agreements, the PIPE Warrants and the Shares of Post-Closing Company Class A common stock issuable upon exercise of the PIPE Warrants will not be subject to lock-up restrictions; (ii) upon the occurrence of Lockup Release Trigger Event I, up to 50% of the Sponsor Affiliate’s Lockup Shares will be released from lock-up restrictions; and (iii) the lock-up restrictions will terminate as to all shares of Post-Closing Company Class A common stock or Warrants held by the Sponsor Affiliate upon the occurrence of Lockup Release Trigger Event II. Further, TVA III shall not waive, release, amend, repeal, suspend or terminate the lock-up restrictions applicable to other holders of Lockup Shares without the prior written consent of the Sponsor Affiliate.
Pursuant to the Minimum Proceeds Side Letter, as long as the investor party to the Minimum Proceeds Side Letter has performed its subscription obligations, PlusAI may not waive, amend (or consent to the waiver or
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amendment of) the minimum $40,000,000 Available Closing SPAC Cash condition set forth in the Merger Agreement without the prior written consent of such investor.
Share Issuance Agreements
Concurrently with the execution and delivery of the PIPE Subscription Agreements and the Convertible Note and Warrant Subscription Agreements, PlusAI entered into share issuance agreements (collectively, the “Share Issuance Agreements”) with certain of the Note Investors that are existing investors in PlusAI and each of the PIPE Investors, pursuant to which, contingent on such Note Investor or PIPE Investor closing their Convertible Notes or PIPE Investment, PlusAI will issue to such Note Investors and PIPE Investors an aggregate of 112,343,523 shares of PlusAI Class A common stock immediately prior to the First Effective Time for no additional consideration. Pursuant to the Merger Agreement, such shares of PlusAI Class A common stock will be automatically surrendered and exchanged for the right to receive a number of shares of Post-Closing Company Class A common stock equal to the Exchange Ratio.
Forward Purchase Agreement
On August 27, 2026, TVA III and the Sponsor Affiliate entered into a Confirmation of an OTC Equity Prepaid Forward Transaction, dated as of August 27, 2026 (the “Forward Purchase Agreement”), pursuant to which TVA III agreed to pay to the Sponsor Affiliate a prepayment amount equal to the product of up to 1,050,000 TVA III Class A Ordinary Shares (the “FPA Shares”) multiplied by the applicable per-share redemption price (the “Prepayment Amount”). TVA III is expected to pay the Prepayment Amount one business day following the Closing, and the Forward Purchase Agreement matures 35 days after the Closing. Prior to maturity, the Sponsor Affiliate may sell FPA Shares to third parties at a price of at least $12.00 per share and pay TVA III an early termination obligation equal to the number of shares sold multiplied by the redemption price, reducing the number of FPA Shares to be returned to TVA III at maturity. No FPA Shares will be delivered to TVA III prior to maturity. Upon maturity, in exchange for the return of any remaining FPA Shares to TVA III, TVA III will pay the Sponsor Affiliate a settlement amount equal to the number of remaining FPA Shares multiplied by the redemption price, which amount will be fully offset by the Prepayment Amount, resulting in no additional cash payment at maturity. If the Merger Agreement is terminated before the Closing, the Forward Purchase Agreement will terminate without amounts or other obligations owed by either party. The Sponsor Affiliate waived redemption rights with respect to the FPA Shares during the term of the Forward Purchase Agreement.
Earnout Shares
Subject to the terms and conditions of the Merger Agreement, a component of the value of the aggregate consideration to be paid to PlusAI stockholders and holders of PlusAI SAFEs, vested PlusAI RSUs, vested PlusAI options and vested PlusAI warrants will be the contingent right to receive up to an aggregate of 70,000,000 shares of Post-Closing Company common stock reduced by 7,000,000 shares allocated to the Post-Closing RSU Pool for future issuances resulting in 63,000,000 shares outstanding at the Closing that will be issued to Eligible PlusAI Equityholders upon the occurrence of an Earnout Triggering Event during the Earnout Period.
TVA III Public Warrants and TVA III Private Placement Warrants
In connection with the Initial Public Offering as of April 24, 2025, and as of December 31, 2025, there were 18,818,750 warrants outstanding, including 11,250,000 Public Warrants, 7,568,750 Private Placement Warrants.
On September 18, 2025, the TVA III, the Prior Sponsor and the New Sponsor entered into the Purchase Agreement. Pursuant to the Purchase Agreement, the New Sponsor (i) purchased from the Prior Sponsor (a) 7,500,000 shares of Class B Ordinary Shares and (b) 4,700,000 Private Placement Warrants (including the 4,100,000 NMSI Private Placement Warrants) for an aggregate purchase price of $7,400,000 and (ii) upon closing, became the sponsor of TVA III. After the closing of the Purchase Agreement, the non-managing sponsor investors ceased to have any rights, claims, or interests in or to any Sponsor held securities.
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On December 31, 2025, TVA III and Continental Stock Transfer & Trust Company, as warrant agent, entered into a warrant amendment that deleted in its entirety the provision in the warrant agreement which (i) prohibited the holder from redeeming such NMSI Private Placement Warrants and (ii) permitted the holder to (a) exercise such NMSI Private Placement Warrants on a cashless basis, and (b) for a period beginning on the one year anniversary of the closing of Business Combination and ending on the expiration date of the NMSI Private Placement Warrants, exchange any of its NMSI Private Placement Warrants for a number of Class A Shares based, subject to the terms of the Warrant Agreement.
Name, Headquarters; Stock Symbols
The name of TVA III after the consummation of the business combination will be “PlusAI Holdings, Inc.” and our headquarters will be located at 2953 Bunker Hill Lane, Suite 305, Santa Clara, CA 95054. We intend for the shares of Post-Closing Company Class A common stock to be listed on Nasdaq under the symbol “PXAI.”
Background of the Transactions
The terms of the Merger Agreement and the business combination are the result of arm’s-length negotiations between representatives of TVA III and representatives of PlusAI over the course of approximately four months. The following chronology summarizes the background of these negotiations and identifies the key meetings and events that led to the signing of the Merger Agreement. This chronology does not purport to catalogue every conversation or correspondence among representatives of the Parties.
TVA III is a blank check company formed in order to effect a merger, amalgamation, share exchange, asset acquisition, stock purchase, reorganization or other similar business combination with one or more businesses. TVA III was incorporated under the laws of the Cayman Islands on July 26, 2024. The business combination is the result of an extensive search by TVA III’s management team, including the TVA III Board, for a potential transaction, whereby TVA III evaluated potential targets utilizing TVA III’s global network and the investing, operating and transaction experience of the Sponsor, TVA III’s management team, and members of the TVA III Board.
On April 24, 2025, TVA III completed the TVA III IPO. Prior to the consummation of the TVA III IPO, neither TVA III, nor anyone on its behalf, contacted any prospective target business or held any substantive discussions, formal or otherwise, with respect to a business combination or other transaction involving TVA III. After the TVA III IPO, TVA III, initially with the assistance of the Prior Sponsor and its advisors, commenced an active search for prospective businesses and assets to acquire.
On September 18, 2025, the Prior Sponsor and the Sponsor entered into the Purchase Agreement, pursuant to which, the Sponsor (i) purchased from the Prior Sponsor (a) 7,500,000 TVA III Founder Shares and (b) 4,700,000 TVA III Private Placement Warrants for an aggregate purchase price of $7,400,000 and (ii) upon closing, became the Sponsor of TVA III, with a change in the management team of TVA III and the members of the TVA III Board.
Following the change in the Sponsor and management team of TVA III and the members of the TVA III Board in September 2025, these parties on behalf of TVA III surveyed the landscape of potential acquisition opportunities based on their knowledge of, and familiarity with, the M&A and capital markets marketplace, to look for and evaluate potential business and assets to acquire in TVA III’s initial business combination. The TVA III Board and management have considerable experience in the financial services and financial technology industries, as well as with operational management, investment and financial analysis. As such, the TVA III Board members and management team believe that they are qualified to identify partners for a business combination.
Initially, TVA III focused its efforts on identifying companies in the cryptocurrency and financial services sectors, but it was not required to limit its activities to any particular industry. In the evaluation of business combination partners, the TVA III Board and management team considered many factors. The TVA III Board did not consider it practicable or relevant to quantify or otherwise assign relative weights to the specific factors it
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considered in reaching its final decision. Important criteria that TVA III used in evaluating prospective business transaction opportunities include:
TVA III’s management team employed various strategies to identify an appropriate target company, including:
In general, TVA III looked for acquisition targets that were of a relevant size and positioned, operationally and financially, to be successful as a public company. TVA III further looked for those transactions that it believed, if entered into, would be well-received by the public markets. In particular, TVA III generally sought to identify companies that (1) were sourced through TVA III’s proprietary channels, (2) would benefit uniquely from TVA III’s capabilities, (3) have a committed and capable management team, (4) generate or have the future potential to generate stable free cash-flow and (5) have the potential to grow through both organic growth and acquisition opportunities. TVA III also sought to identify companies that it believed would benefit from being a publicly-held entity, particularly with respect to access to capital for both organic growth and for use in acquisitions, with a particular emphasis on companies with unique growth characteristics enabled by artificial intelligence. TVA III generally applied these criteria when evaluating potential targets.
Shortly after the Sponsor became the sponsor of TVA III in September 2025, TVA III entered into a non-binding letter of intent with a potential target company in the cryptocurrency and financial services sector (“Company A”), after first entering into a non-disclosure agreement that contained customary terms for a special purpose acquisition company and a private company target, including confidentiality provisions and use restrictions for information provided by the target and exceptions to such provisions. Further, such non-disclosure agreement did not contain any standstill or “don’t ask, don’t waive” provisions. TVA III then commenced conducting diligence on Company A and negotiations of a business combination agreement as well as confidential discussions with potential investors in an initial business combination with Company A. These activities proceeded over the course of several months, but by February 2026, Company A and TVA III mutually determined not to proceed with a business combination, in significant part because Company A decided to pursue alternatives for raising capital to potential business combination with a special purpose acquisition company.
Following the cessation of the discussions with Company A, the TVA III Board and management team continued a search for other potential target companies for an initial business combination. Mark Angelo, the Chairman of the TVA III Board, Mr. McGurn, during the time that he served as TVA III’s Chief Executive Officer, Troy Rillo, the current Chief Executive Officer and Chief Financial Officer of TVA III, and other individuals affiliated with either the Sponsor or its affiliates, reviewed target companies identified by them and other representatives of TVA III and its advisors. From the time that discussions with Company A ended, TVA III entered into non-disclosure agreements with six other potential business combination targets, including PlusAI and one other discussed below. Such non‑disclosure agreement did not contain any standstill or “don’t ask, don’t waive” provisions.
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In February 2026, an affiliate of the Sponsor, which had entered into other transactions with Trump Media & Technology Group Corp. (“TMTG”), became aware and informed TVA III management and the TVA III Board, that TMTG may be interested in a business combination for certain TMTG businesses, including the Truth Social social media business. On February 27, 2026, TVA III publicly announced that it was engaged in ongoing discussions with TMTG regarding a potential business combination with SpinCo, a new entity to be formed through a spin-off of certain TMTG businesses, including Truth Social. No non-binding term sheet or letter of intent was ever entered into, although there was a non-disclosure agreement with TMTG, as described in the prior paragraph. On April 21, 2026, TMTG announced that, as of such date, TVA III’s then Chief Executive Officer, Kevin J. McGurn, will serve as Interim Chief Executive Officer of TMTG. The next day, on April 22, 2026, Mr. McGurn, notified the TVA III Board of his resignation as Chief Executive Officer of TVA III, effective immediately. On June 10, 2026, it was announced that TVA III and TMTG had determined not to continue pursuing a potential business combination involving TVA III and SpinCo.
In addition to PlusAI, Company A and TMTG, TVA III did not submit a non-binding letter of intent to any of these other four potential business combination targets with which it entered into a non-disclosure agreement as it chose not to move forward with a transaction with any of these four entities for the reasons described below. In connection with its evaluation of various potential business combination targets, representatives of TVA III had discussions regarding potential transaction structures with the members of management and/or the boards of directors of certain of these potential business combination targets. Following these discussions, the management of certain of these potential business combination targets determined that those entities were not ready at that time to become public or that they wanted to explore alternative transactions. For the others, TVA III decided not to proceed as it did not receive adequate information regarding the potential business combination targets necessary for TVA III to be able to make an assessment of the viability of these entities as a business combination target.
On April 28, 2026, Jerry Serowik, a representative of CCM, and Robert Harrison, a representative of an affiliate of Sponsor, Yorkville Advisors (“Yorkville Advisors“) and TVA III, held an in-person meeting in Las Vegas, Nevada, during which they discussed the possibility of a potential business combination between TVA III and PlusAI, which had recently had a previously announced business combination with another special purpose acquisition company, Churchill Capital Corp IX, terminate prior to its consummation. That previously announced business combination had valued PlusAI at $1.2 billion. The discussion between Mr. Serowik and Mr. Harrison arose in the context of this recent termination of PlusAI’s previously announced business combination, and focused on the fact that PlusAI may be willing to consider a business combination with another special purpose acquisition company, but would look to do so at the same valuation as had been provided for in that terminated business combination. Mr. Serowik and Mr. Harrison discussed the potential strategic fit between TVA III and PlusAI and agreed to continue discussions regarding a potential transaction.
Between May 5 and May 20, 2026, Mr. Serowik and Mr. Harrison held numerous telephone calls to discuss the potential terms of a business combination between TVA III and PlusAI. During these calls, the Mr. Serowik and Mr. Harrison discussed the framework for a potential transaction, explored potential partners for the business combination, and discussed a potential commitment to a private investment in public equity (“PIPE”) financing from Sponsor Affiliate and other potential investors in connection with the proposed transaction.
On May 21, 2026, Mr. Serowik, Mr. Harrison and Josef Valdman, a Partner at NEOS Investments and the Chief Executive Officer of Perimeter Acquisition Corp. (“Perimeter”), which had previously had discussions with PlusAI regarding a potential business combination, held a videoconference call to discuss the possibility of Perimeter partnering with TVA III on a business combination with PlusAI. During the call, Mr. Valdman and Mr. Harrison discussed the potential structure and merits of partnering on the transaction. At the conclusion of the call, Mr. Valdman and Mr. Harrison agreed for TVA III and Perimeter to partner on the proposed business combination between PlusAI and TVA III. Following the call, CCM delivered to Mr. Harrison the latest draft of the term sheet for a business combination that had been prepared between Perimeter and PlusAI for Mr. Harrison’s review.
Also on May 21, 2026, PlusAI and TVA III entered into a mutual non-disclosure agreement to facilitate further discussions and the exchange of confidential information in connection with the proposed transaction. Later that evening, Mr. Harrison returned a markup of the term sheet to CCM with proposed revisions reflecting TVA III’s comments on the terms of the proposed business combination.
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On May 22, 2026, representatives of CCM, TVA III, Perimeter and PlusAI held their first organizational meeting via videoconference to discuss the proposed business combination and related workstreams. Attendees at the meeting included Mr. Serowik and Brandon Sun of CCM, Mr. Valdman of Perimeter, Bryant Park, David Liu and Derrick Nueman of PlusAI, Mr. Harrison and Chris Pento of Yorkville Advisors as representatives of TVA III, and Curtis Mo of DLA Piper LLP (US) (“DLA Piper”), outside legal counsel to TVA III. Additional representatives of CCM and Wilson Sonsini Goodrich & Rosati (“WSGR”), outside legal counsel to PlusAI, also participated in the meeting. The parties discussed initial organizational matters, including the anticipated timeline, key workstreams and the allocation of responsibilities among the parties and their respective advisors in furtherance of the proposed transaction. During this meeting, it was discussed that although Perimeter had previously been discussing a business combination with PlusAI as it sought to negotiate a term sheet in furtherance of such a transaction, that any business combination would instead be between TVA III and PlusAI. The parties also discussed moving forward with preparing a Merger Agreement using the $1.2 billion valuation for PlusAI that had been provided in the previous business combination with Churchill Capital Corp IX.
On May 26, 2026, representatives of CCM, TVA III, Perimeter and PlusAI held a follow-up organizational meeting to continue the discussions initiated during the May 22 meeting, including further discussion of the structure and timeline for the proposed business combination.
On May 27, 2026, PlusAI and TVA III held a commercial diligence call, during which PlusAI’s management team provided TVA III with an overview of PlusAI’s business, operations and commercial strategy. Attendees at the meeting included Mr. Park, Mr. Nueman, Mr. Liu, Shawn Kerrigan and Earl Adams Jr. of PlusAI, and Mr. Harrison for TVA III and Sponsor Affiliate. During the call, PlusAI management addressed questions from Mr. Harrison regarding PlusAI’s technology, market positioning, revenue model and growth prospects, as the parties continued to advance their respective due diligence efforts in connection with the proposed transaction.
From June 1, 2026 to June 11, 2026, DLA Piper and WSGR exchanged drafts of the Merger Agreement that were modeled on the merger agreement that had been previously executed between PlusAI and Churchill Capital Corp IX, and various exhibits and other ancillary agreements to the Merger Agreement.
On June 19, 2026, CCM delivered to DLA Piper the PIPE terms that had been socialized with the Sponsor Affiliate and the Company, and which CCM had begun discussing with other potential investors, including a party that Mr. Valdman had introduced to TVA III and PlusAI. The Sponsor Affiliate had indicated a willingness to invest $25 million in a PIPE provided that additional investors were brought in to fund the rest of the funds that PlusAI sought to have raised, which was at least $75 million. In addition, PlusAI had begun discussions with certain of its existing investors in such existing investors participating in the PIPE. The PIPE terms under discussion contemplated the sale of Post-Closing Company Class A common stock and a warrant for the purchase of Post-Closing Company Class A common stock, at a price of $10 per combined share/warrant. Furthermore, the parties discussed the possibility of potential investors satisfying any obligation to purchase shares of Post-Combination Company Class A common stock in the PIPE by not redeeming any TVA III Class A Ordinary Shares held by such potential investors.
Between June 20 and June 22, 2026, DLA Piper prepared both a draft of a PIPE Subscription Agreement and a draft of a Non-Redemption Agreement (the “Non-Redemption Agreement“) that could be used for any PIPE investor who sought to not redeem any TVA III Class A Ordinary Shares in connection with the contemplated PIPE. The parties also engaged in discussions regarding a minimum cash closing condition for the business combination, and who would have the ability to waive such condition in the event that less cash was raised in the PIPE than the amount of this minimum cash closing condition.
On June 22, 2026, DLA Piper sent the drafts of the PIPE Subscription Agreement and the Non-Redemption Agreement, as well as documents related to the PIPE, including the form of Warrant Certificate, and a draft of the Sponsor Support Agreement to WSGR and CCM. As WSGR proceeded to review these documents, CCM, PlusAI and Mr. Valdman shared the current set of documents with potential PIPE investors.
DLA Piper and WSGR proceeded to finalize the Merger Agreement and various exhibits and ancillary agreements, with the primary discussion being regarding the minimum amount of Available Closing SPAC Cash needed at the Closing being set at the amount that the PIPE was expected to raise from the potential PIPE investors,
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and whether one or both of TVA III and PlusAI would have the ability to waive this condition to closing to the extent that less financing was raised from potential PIPE investors than anticipated pursuant to the PIPE Subscription Agreements. Following discussions, it was agreed that both parties would have an ability to waive this condition to closing.
On June 24, 2026, the TVA III Board met to approve the transaction and the Merger Agreement, as well as related materials and the disclosure schedules, subject to finalization of the PIPE and the parties securing subscriptions for at least $75 million.
On June 25, 2026, the parties, CCM, DLA Piper and WSGR met to discuss the status of the transaction and outstanding workstreams. That day, WSGR sent what at the time were expected to be the final revisions to the Merger Agreement and the Sponsor Support Agreement, while CCM and PlusAI worked on getting potential PIPE investors to agree to the terms of the PIPE Subscription Agreement previously circulated.
On June 27, 2026, Wilson Sonsini sent DLA Piper final comments on the PIPE Subscription Agreement, the A&R Registration Rights Agreement and the Non-Redemption Agreement, and confirmed that it had no further comments on the form of Warrant Certificate or on other exhibits and ancillary agreements. Upon receipt, DLA Piper confirmed sign-off on the Non-Redemption Agreement.
On June 29, 2026, DLA Piper delivered further comments on the PIPE Subscription Agreement and the A&R Registration Rights Agreement to WSGR, and indicated that comments on certain additional documents would follow.
On July 1, 2026, DLA Piper circulated edits to the Proposed Bylaws to align with the lock-up provisions in the A&R Registration Rights Agreement and confirmed that it had no further comments on the Proposed Certificate of Incorporation.
The parties then set a goal to finalize discussions with potential PIPE investors towards being able to sign and announce the Merger Agreement, PIPE Subscription Agreements and the business combination during the following few days after the conclusion of the Fourth of July holiday weekend.
On July 6, 2026, WSGR sent DLA Piper a revised draft of the Merger Agreement that made some final non-substantive clean-up edits to reflect terms previously agreed upon by the parties. PlusAI separately engaged in discussions with certain of its existing investors regarding the terms of the PIPE and changes that these investors sought with respect to the documentation pertaining to their participation in the PIPE. WSGR and DLA Piper discussed the changes sought by these existing investors in PlusAI, and DLA Piper circulated revisions to the form of Warrant Certificate, the A&R Registration Rights Agreement, the Proposed Bylaws, the PIPE Side Letter and certain other ancillary agreements.
On July 7, 2026, WSGR told DLA Piper that all but one of the existing investors in PlusAI expected to participate in the PIPE had signed the PIPE Subscription Agreement and that the remaining existing investor was expected to deliver its signature pages shortly. The parties separately worked to finalize a press release announcing the business combination.
As of July 8, 2026, PIPE investments from the Sponsor Affiliate, the existing investors in PlusAI who intended to participate, and one other PIPE investor were prepared to proceed. However, the amount of investment from this group was less than $75 million, with the expectation that the remainder would be provided by an investor introduced to the parties by Mr. Valdman.
Between July 9 and July 13, 2026, the parties and CCM worked to address questions from this potential investor with respect to the Transactions and the PIPE Subscription Agreement. By July 13, 2026, the parties believed that this potential investor was satisfied with the information provided and the state of the documents, and was prepared to move forward with signing the PIPE Subscription Agreement. This belief turned out to be erroneous as this potential investor determined that it could not proceed at this time. As a result, Mr. Valdman ceased to be involved in the process.
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As a result, the parties began discussions regarding looking at other potential PIPE investors. In the meantime, on July 17, 2026, Lowenstein Sandler LLP (“Lowenstein Sandler”), counsel to CCM, delivered comments to DLA Piper to the PIPE Subscription Agreement which were accepted by DLA Piper. CCM then used this revised PIPE Subscription Agreement in discussions with other potential PIPE investors.
By July 27, 2026, some other potential investors had been identified, but they indicated that they were only interested in participating in an investment in the Post-Closing Company if (a) the investment was a convertible note and (b) the valuation of PlusAI was reduced from $1.2 billion.
On July 31, 2026, DLA Piper sent WSGR a draft Convertible Note and a revised form of Warrant Certificate that set the term of the warrant at five years.
On August 3, 2026, the parties received and reviewed a term sheet from other potential investors to provide $40 million in funding to the Post-Closing Company using a Convertible Note. Discussions with these other potential investors proceeded, but the parties were unable to reach an agreement with them.
Following this, on August 10, 2026, Sponsor Affiliate proposed to lead a financing using a Convertible Note, with Sponsor Affiliate purchasing for $25 million a senior unsecured convertible PIK note in a principal amount of $27.78 million, plus warrants in the form of the PIPE Warrants, provided that there was at least $61.5 million in cash raised for the Post-Closing Company and valuation for PlusAI would be reduced from $1.2 billion to $800 million, with the potential for the PlusAI stockholders to receive up to 70 million Earnout Shares, which was an increase of 40 million Earnout Shares, or $400 million, from the version of the Merger Agreement that existed in early July.
During the period from the middle of August through late August 2026, DLA Piper and WSGR exchanged drafts of the Convertible Note and Warrant Subscription Agreement, as well as draft of the Merger Agreement to reflect the changes in the financing terms and the merger consideration. The revisions to the Merger Agreement also adjusted the minimum cash closing condition to reflect the amount of cash that was being raised through the Convertible Notes. Furthermore, because there would no longer be a PIPE, the Non-Redemption Agreement previously drafted was no longer relevant. In addition, Sponsor Affiliate proposed entering into the Forward Purchase Agreement with respect to the 1,050,000 TVA III public shares that it holds. By late August, potential investors representing an aggregate original principal amount of approximately $63,888,888, issued at a 10% original issue discount resulting in net cash proceeds of approximately $57,500,000, along with warrants to purchase shares of Post-Closing Company Class A common stock, had committed to participate in the financing. In addition, one existing investor in PlusAI committed to proceeding with a PIPE in the amount of $4 million using the previously drafted PIPE Subscription Agreement.
Between August 24 and August 25, 2026, the parties finalized the various agreements and began collecting signatures from the investors.
Also on August 25, 2026, the TVA III Board met and approved the Merger Agreement and the Transactions.
On August 27, 2026, TVA III and Sponsor Affiliate entered into the Forward Purchase Agreement for a share forward transaction with respect to up to 1,050,000 TVA III Class A Ordinary Shares.
On September 1, 2026, WSGR provided DLA Piper with confirmatory employment letters, confirming the continued employment of certain key individuals at PlusAI following the business combination.
On September 2, 2026, the parties executed the Merger Agreement and the other related agreements, including the Company Voting and Support Agreements, the Sponsor Support Agreement, the Convertible Note and Warrant Subscription Agreements, the PIPE Subscription Agreement, the Share Issuance Agreements, the A&R Registration Rights Agreement, and various side letters with the investors. Following the execution of such documentation, on September 3, 2026, TVA III and PlusAI publicly announced the execution of the Merger Agreement and the business combination by issuing a joint press release and making available the investor presentation in connection with the announced business combination.
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The TVA III Board’s Reasons for Approval of the Business Combination
The TVA III Board, in evaluating the Transactions, consulted with TVA III’s management and financial, strategic and legal advisors. In (1) resolving that it is just, equitable and fair and in the best interests of TVA III and its shareholders, and declaring it advisable, to enter into the Merger Agreement, the related agreements to which TVA III is a party and the Transactions, (2) approving the Merger Agreement, the related agreements to which TVA III is a party and the Transactions, including the Merger, on the terms and subject to the conditions of the Merger Agreement, and (3) adopting a resolution recommending the business combination proposal be approved by TVA III shareholders, the TVA III Board considered and evaluated a number of factors, including the factors discussed below. The TVA III Board did not consider it practicable to, and did not attempt to, quantify or otherwise assign relative weights to the specific factors it considered in reaching its determination. In addition, individual directors may have given different weight to different factors. The TVA III Board viewed its decision as being based on all of the information available and the factors presented to and considered by it. This explanation of TVA III’s reasons for the Transactions and all other information presented in this section is forward-looking in nature and, therefore, should be read in light of the factors discussed in the section entitled “Cautionary Note Regarding Forward-Looking Statements.”
The TVA III Board considered a number of factors pertaining to the Transactions as generally supporting its decision to enter into the Merger Agreement, the related agreements to which TVA III is a party, and the Transactions, including but not limited to, the following material factors:
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The TVA III Board also considered a variety of uncertainties and risks and other potentially negative factors concerning the Transactions, including, but not limited to, the following:
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In addition to considering the factors described above, the TVA III Board also considered that:
The PlusAI Board’s Reasons for the Approval of the Business Combination
In reaching its decision to approve the business combination, the PlusAI Board consulted with PlusAI’s management, as well as its financial and legal advisors, and considered a number of factors, including its knowledge of PlusAI’s business, operations, financial condition, competitive position and prospects. Among the various factors that the PlusAI Board considered in favor of its decision are:
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The PlusAI Board also considered the following uncertainties, risks and other potentially negative factors:
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The foregoing discussion is not meant to be exhaustive, but addresses the material information and factors considered by the PlusAI Board in consideration of its approval of the business combination. In view of the wide variety of factors considered by the PlusAI Board in connection with the evaluation of the business combination and the complexity of these matters, the PlusAI Board did not find it practicable to, and did not, quantify or otherwise assign relative weights to the specific factors considered in reaching its determination and recommendation. In addition, the PlusAI Board did not reach any specific conclusion with respect to any of the particular factors considered. Instead, the PlusAI Board conducted an overall analysis of the factors described above and made its determinations and recommendations based on the totality of the information reviewed. The judgments of individual members of the PlusAI Board may have been influenced to a greater or lesser degree by different factors. The PlusAI Board ultimately concluded that, in the aggregate, the potential benefits of the business combination outweighed the potential risks or negative consequences of the business combination.
Unaudited Prospective Unit Economics Information
In connection with its consideration of the business combination, including the Transactions, PlusAI provided its internally-derived unit economic calculations (the “Unit Economics”) related to autonomous trucking deployments to (1) TVA III for use as a component of its overall evaluation of PlusAI and (2) to the PlusAI Board and its advisors in connection with its evaluation of the Transactions. The Unit Economics are being included in this proxy statement/prospectus because the Unit Economics were provided to the TVA III Board and the PlusAI Board for their respective evaluations of the Transactions.
The Unit Economics are included in this proxy statement/prospectus solely to provide TVA III’s shareholders and PlusAI’s stockholders access to information made available in connection with the consideration by the TVA III Board and the PlusAI Board of the Transactions. The Unit Economics should not be viewed as a projection or forecast of PlusAI’s overall financial performance. Furthermore, the Unit Economics do not take into account any circumstances or events occurring after the date on which such Unit Economics were prepared and provided to TVA III, which was May 18, 2026, and may differ, perhaps significantly, from similarly titled measures that may be presented in the future.
The Unit Economics were prepared in good faith by PlusAI’s management team and are based on its management’s reasonable estimates and assumptions with respect to the expected performance of its autonomous driving solutions, as applicable, at the time the Unit Economics were prepared and speak only as of that time. As such, the Unit Economics do not reflect any updates since the time such Unit Economics were delivered to the TVA III Board in its meeting held on June 24, 2026.
The Unit Economics reflect numerous estimates and assumptions with respect to matters specific to PlusAI’s business and general matters, including estimates and assumptions with respect to PlusAI’s business and the revenue models PlusAI expects to use in connection with the deployment its autonomous driving solutions, industry-wide business, economic, regulatory, market and financial conditions and other future events, all of which are difficult to predict and many of which are beyond PlusAI’s and TVA III’s control. Moreover, the Unit Economics are not subject to any escalation or discounting. The time at which the assumptions underlying the Unit Economics will be realized, if at all, is highly uncertain. As a result, there can be no assurance that the Unit Economics will be realized or that actual performance will yield similar results (i.e., not significantly higher or lower than those set forth in the Unit Economics).
Because the Unit Economics relate to estimates at scale, the timing of which is uncertain, such information by its nature becomes less predictive with the passage of time. These Unit Economics are subjective in many respects and thus are susceptible to multiple interpretations and periodic revisions based on actual experience and business developments. The Unit Economics have been prepared solely by PlusAI, have not been reviewed or verified by independent third parties. Some of PlusAI’s assumptions are estimates. These estimates are based on PlusAI’s management’s beliefs, estimates and assumptions and on information available to PlusAI’s management when the estimates were made. Although TVA III’s and PlusAI’s management teams believed that there was a
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reasonable basis for each of these estimates, TVA III and PlusAI caution you that these estimates are based on a combination of assumptions that may result in such estimates proving to be inaccurate. Information provided in the Unit Economics constitutes forward-looking statements that are inherently subject to significant uncertainties and contingencies, many of which are beyond PlusAI’s and TVA III’s control. The various risks and uncertainties include those set forth in the sections entitled “Risk Factors,” “PlusAI’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Cautionary Note Regarding Forward-Looking Statements.”
The Unit Economics were prepared solely for internal use and not with a view toward public disclosure or toward complying with any guidelines established by the American Institute of Certified Public Accountants. The Unit Economics included in this proxy statement/prospectus have been prepared by, and are the responsibility of, PlusAI’s management. Neither the independent registered public accounting firms of PlusAI or TVA III, nor any other registered public accounting firms, have compiled, examined or performed any procedures with respect to the Unit Economics contained in the proxy statement/prospectus, nor have they expressed any opinion or any other form of assurance on such information or their accuracy or achievability, and the independent registered public accounting firms of PlusAI and TVA III assume no responsibility for, and disclaim any involvement with, the Unit Economics. Further, to that end, the report of Deloitte & Touche LLP included in the consolidated financial statements in this proxy statement/prospectus relates to the historical consolidated financial statements of PlusAI. It does not extend to the Unit Economics and should not be read to do so.
The inclusion of the Unit Economics in this proxy statement/prospectus should not be regarded as an indication that TVA III, the TVA III Board, PlusAI, the PlusAI Board, or their respective affiliates, advisors or other representatives considered, or now considers, such Unit Economics necessarily to be predictive of actual future results or to support or fail to support your decision whether to vote for or against the business combination proposal. For more information, see the risk factor in the section entitled “Risk Factors — Risks Related to PlusAI — Risks Related to Our Business Operations — Forward-looking estimates and predictions as to the future deployment of our technology, and the associated adoption curve are subject to significant uncertainty and are based on assumptions and estimates that may prove inaccurate.” No person has made or makes any representation or warranty to any TVA III shareholder regarding the information included in the Unit Economics. The Unit Economics are not fact and are not necessarily indicative of future results. Readers of this proxy statement/prospectus are cautioned not to place undue reliance on this information.
The Unit Economics are not included in this proxy statement/prospectus to induce any TVA III shareholders to vote in favor of any of the proposals at the extraordinary general meeting.
TVA III urges you to review the financial statements of PlusAI included in this proxy statement/prospectus, as well as the financial information in the section of this proxy statement/prospectus entitled “Unaudited Pro Forma Condensed Combined Financial Information” and to not rely on any single financial measure.
PlusAI uses certain financial measures in its Unit Economics that are not prepared in accordance with GAAP as supplemental measures to evaluate operational performance. There are limitations associated with the use of non-GAAP financial measures, and the metrics set forth in the Unit Economics should not be considered as a substitute for or in isolation from our financial statements prepared in accordance with GAAP. Non-GAAP financial measures are not prepared in accordance with GAAP, are not reported by all of PlusAI’s competitors and may not be directly comparable to similarly titled measures of PlusAI’s competitors. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information presented in accordance with GAAP. Financial measures included in the Unit Economics provided to a board of directors or financial advisor in connection with a business combination transaction are excluded from the definition of “non-GAAP financial measures” under the rules of the SEC, and therefore the Unit Economics are not subject to SEC rules regarding disclosures of non-GAAP financial measures, which would otherwise require a reconciliation of a non-GAAP financial measure to a GAAP financial measure. Accordingly, no reconciliation of the financial measures included in the Unit Economics was prepared, and therefore none have been provided in this proxy statement/prospectus. The definitions of the non-GAAP measures included in the Unit Economics may not align with those underlying the non-GAAP measures presented in the section entitled “PlusAI’s Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Further, other companies, including
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companies in our industry, may calculate these metrics differently or not at all, which reduces their usefulness as comparative measures.
Unit Economics
The Unit Economics, including the net value, PlusAI share of the net value and target gross margin are based on numerous estimates and assumptions, including those set forth below. The actual terms of the definitive long-term contracts and commercial arrangements with our OEM partners are subject to negotiation and there is no assurance PlusAI will achieve the implied revenue terms or share of the net value set forth in the Unit Economics from any given customer or at all. See the section entitled “Risk Factors-Risks Related to PlusAI.” In addition, no assurances can be given that PlusAI or its OEM partners will achieve the savings or implied results described in the Unit Economics on the terms set forth in the Unit Economics or at all. See the section entitled “Risk Factors — Risks Related to PlusAI.”
The key assumptions for SuperDrive Unit Economics include:
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In addition to the Unit Economics depicted above, PlusAI also provided to TVA III certain estimates and other assumptions that PlusAI’s management relied upon in preparing PlusAI's business model. These estimates and assumptions included estimates with respect to certain expenses and working capital with projected cash flow through the end of 2027 based upon a funding of at least $61.5 million at the Closing, and showed a positive cash position for the Post-Closing Company at the end of 2027.
EXCEPT TO THE EXTENT REQUIRED BY APPLICABLE FEDERAL SECURITIES LAWS (INCLUDING A REGISTRANT’S RESPONSIBILITY TO MAKE FULL AND PROMPT DISCLOSURE AS REQUIRED BY SUCH FEDERAL SECURITIES LAWS), BY INCLUDING IN THIS PROXY STATEMENT/PROSPECTUS A SUMMARY OF THE UNIT ECONOMICS, NONE OF TVA III, PLUSAI OR ANY OF THEIR RESPECTIVE REPRESENTATIVES OR AFFILIATES UNDERTAKES ANY OBLIGATION TO, AND EACH EXPRESSLY DISCLAIMS ANY RESPONSIBILITY TO, UPDATE OR REVISE, OR PUBLICLY DISCLOSE ANY UPDATE OR REVISION TO, THESE UNIT ECONOMICS TO REFLECT CIRCUMSTANCES OR EVENTS, INCLUDING UNANTICIPATED EVENTS, THAT MAY HAVE OCCURRED OR THAT MAY OCCUR AFTER THE PREPARATION OF THESE UNIT ECONOMICS AND THEIR PRESENTATION TO THE TVA III BOARD, EVEN IN THE EVENT THAT ANY OR ALL OF THE ASSUMPTIONS UNDERLYING THE UNIT ECONOMICS ARE SHOWN TO BE IN ERROR OR CHANGE.
Recommendation of the TVA III Board
After careful consideration, the TVA III Board has unanimously determined that the business combination proposal is fair to, and in the best interests of, TVA III and its shareholders and unanimously recommends that you vote or give instruction to vote “FOR” the business combination proposal.
Satisfaction of the 80% Test
It is a requirement under the TVA III Articles that any business acquired by TVA III have a fair market value equal to at least 80% of the balance of the funds in the trust account (excluding taxes payable on interest income earned from the trust account and the deferred underwriting fees at the time of the execution of a definitive
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agreement for an initial business combination). As of September 2, 2026, the date of the execution of the Merger Agreement, the balance of the funds in the trust account was approximately $229.0 million (excluding up to $9.0 million of deferred underwriting fees) and 80% thereof represents approximately $183.2 million. In reaching its conclusion on the 80% asset test, the TVA III Board used as a fair market value the $800.0 million equity value for PlusAI, which was implied based on the terms of the Transactions agreed to by the parties in negotiating the Merger Agreement.
The TVA III Board also considered qualitative factors such as PlusAI’s business and financial condition and prospects, the experience and commitment of PlusAI’s management team, as well as valuations and trading of publicly traded companies in similar and adjacent sectors. The TVA III Board determined that the consideration being paid in the Merger, which amount was negotiated at arm’s-length, was fair to, and in the best interests of, TVA III and its shareholders and appropriately reflected PlusAI’s value.
The TVA III Board believes that because of the financial skills and background of its directors, it was qualified to conclude that the acquisition of PlusAI met the 80% requirement. Based on the fact that the $800.0 million fair market value of PlusAI as described above is in excess of the threshold of approximately $183.2 million, representing 80% of the balance of the funds in the trust account (excluding net of amounts disbursed to management for working capital purposes, if applicable, taxes payable on interest income earned from the trust account and the deferred underwriting fees), the TVA III Board determined that the fair market value of PlusAI was substantially in excess of 80% of the funds in the trust account and that the 80% test was met.
Interests of Certain TVA III Persons in the Business Combination
In considering the recommendation of the TVA III Board to vote in favor of approval of the business combination proposal and the other proposals, TVA III shareholders should keep in mind that the Sponsor and the Insiders have interests in such proposals that are different from, or in addition to, the interests of TVA III shareholders generally. In particular:
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Sponsor and Affiliates Compensation
The following table sets forth the payments received by Sponsor and its affiliates from TVA III prior to or in connection with the completion of the initial business combination and the securities issued by TVA III to Sponsor or its affiliates:
Entity/Individual |
Amount of Compensation Received or Securities Issued |
Consideration Paid or to be Paid |
Sponsor |
Up to $1,500,000 in Working Capital Loans, which loans are convertible, at the Sponsor’s election, upon consummation of the business combination into units identical to the TVA III Public Units at a price of $10.00 per unit, rounded down to the nearest whole number. As of September 30, 2026, TVA III has incurred a Working Capital Loan in an aggregate principal amount of $250,000 through the issuance of a convertible unsecured promissory note to the Sponsor. Reimbursement for any out-of-pocket expenses related to identifying, investigation and completing an initial business combination |
$
Working Capital Loans to finance transaction costs in connection with an initial business combination
Services in connection with identifying, investigating and completing an initial business combination |
Sponsor, our officers, directors, or our or their affiliates |
Finder’s fee, advisory fee, consulting fee or success fee |
Any services they render in order to effectuate the completion of our initial business combination. We may engage one or more affiliates of our sponsor, officers or directors or their respective affiliates to provide additional services to us after this offering, including, for example, identifying potential targets or providing financial advisory services, and may pay such affiliates fair and reasonable fees or other compensation that would be determined at that time in an arm’s length negotiation. |
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Board of Directors Following the Business Combination
Upon consummation of the business combination, it is expected that each Class I director of the Post-Closing Company will have a term that expires at the annual meeting of shareholders of the Post-Closing Company in 2028, each Class II director of the Post-Closing Company will have a term that expires at the annual meeting of shareholders of the Post-Closing Company in 2029 and each Class III director of the Post-Closing Company will have a term that expires at the annual meeting of shareholders of the Post-Closing Company in 2030, or in each case until their respective successors are duly elected and qualified, or until their earlier resignation, removal or death.
We are proposing Richard Lim and Hao Zheng to serve as the Class I directors, David C. Peterschmidt to serve as the Class II director and David Liu and Harry J. Harczak, Jr. to serve as the Class III directors.
Please see the sections entitled “Proposal No. 8 — The Director Election Proposal” and “Management After the Business Combination” for additional information.
Summary of TVA III Financial Analysis
Because PlusAI is not an affiliate of TVA III, the TVA III Board was not required to obtain, and did not obtain a financial fairness opinion from an independent investment banking firm. Because the TVA III Board has not obtained a financial fairness opinion, its shareholders will be relying on the judgment of the TVA III Board who has determined the fair market value and fairness from a financial point of view of the proposed business combination, based on standards generally accepted by the financial community, including from a valuation standpoint by comparing certain publicly available financial information and operating data for selected publicly listed nuclear companies.
The TVA III Board considered both (a) the Materials and (b) the willingness of the Sponsor Affiliate and the other investors to participate in the financing at the valuation provided to PlusAI, in evaluating the fair market value and fairness, from a financial point of view, of the business combination and the Merger. The Materials considered certain market comps being Einride, Kodiak AI and Aurora Innovation, which had valuations of approximately $800 million, $775 million, and $12 billion, respectively. In assessing the merits of the business combination and the Merger from a financial point of view, the TVA III Board considered the valuation of PlusAI at which various investors were willing to make an investment into the Post-Closing Company, and the reduction in valuation of PlusAI from that which had been set in the previously contemplated business combination with Churchill Capital Corp IX that was terminated earlier this year. Furthermore, the TVA III Board considered PlusAI’s strategy and technology offerings as compared to those of other companies, and compared PlusAI’s state of development with those above-named companies and the valuations attributed to those companies by the public markets. The TVA III Board assumed that the valuations attributed by the public markets to these other companies with autonomous technology targeting the freight transportation sector, and in particular, Aurora Innovation, having the most closely similar technologies to PlusAI, provided a reasonable basis for benchmarking the valuation for PlusAI. Specifically with respect to Aurora Innovation, as with other companies in this sector, it has not yet achieved commercial-scale deployment of fully driverless L4 autonomous trucks for commercial freight operations. The autonomous trucking industry as a whole remains subject to evolving federal and state regulatory frameworks, and no company has yet achieved full commercial deployment for fully driverless operations. Aurora Innovation, which was founded in 2017, became public in 2021 and was reported to have approximately 1,900 employees as of December 31, 2025, or approximately 13 times the number of employees as PlusAI. Based upon information understood by individuals focusing on the deployment of autonomous technology in the freight transportation sector, as provided to the TVA III Board, Aurora Innovation is in the commercial scaling phase rather than fully deployed at massive commercial scale. The valuations for the above-named companies were considered by the TVA III Board in its evaluation. Based upon PlusAI’s well-proven technology, state of design of its prototype, engagement with commercial customers, and the size of its engineering and business development employee teams, the TVA III Board considered PlusAI to be similarly comparable to these other public companies discussed in the Materials. The summary of the Materials is set forth above.
As noted in the section entitled “— The TVA III Board’s Reasons for the Approval of Transactions”, the TVA III Board considered a variety of factors, including the Materials, in connection with its evaluation of the
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business combination. In light of the complexity of those factors, the TVA III Board, as a whole, did not consider it practicable to, nor did it attempt to, quantify or otherwise assign relative weights to the specific factors it took into account in reaching its decision. Individual members of the TVA III Board may have given different weight to different factors.
The Materials were provided for the benefit, information and assistance of the TVA III Board (in its capacity as such) in connection with its evaluation of the business combination and the Merger. The Materials did not address the underlying business decision of TVA III to engage in the business combination and the Merger, or the relative merits of any aspect of the business combination and the Merger compared to any alternative business strategy or transaction that may be available to TVA III or in which TVA III might engage. The terms of the business combination and the Merger were determined solely through negotiations between the parties to the business combination Agreement.
The Materials do not constitute, and are not intended to represent, (i) any view or opinion as to (a) the fairness, from a financial point of view or otherwise, of the contemplated business combination and the Merger, any aspect, term or implication of the financial aspects of the business combination and the Merger to TVA III, TVA III shareholders, PlusAI equity holders or to any other person, (b) the solvency or fair value of TVA III, PlusAI, pro forma for the business combination and the Merger, or any other entity under any state, federal or other laws, whether relating to bankruptcy, insolvency or similar matters or otherwise, (c) the actual value of any PlusAI equity when issued or distributed in the business combination and the Merger or the price or range of prices at which any PlusAI equity, or any other securities of PlusAI, may trade or otherwise be transferable at any time, including following announcement or consummation of the business combination and the Merger, (d) any legal, regulatory, tax, accounting and similar matters, as to which TVA III management understands that PlusAI has obtained such advice as it deems necessary from qualified professionals or (e) the fairness of the amount or nature of the compensation (if any) or other consideration to any officers, directors or employees of any party, or class of such persons, relative to the consideration to be paid pursuant to the business combination and the Merger, or (ii) any recommendation to TVA III, TVA III shareholders, PlusAI equity holders, or to any other person as to how TVA III, PlusAI or any such shareholder or equity holder should vote or act with respect to the business combination and the Merger or any proposal to be voted upon in connection with the business combination and the Merger or otherwise.
The valuation benchmarking information contained in the Materials was obtained from publicly available third-party sources.
TVA III management assumed the accuracy and completeness of all information that was reviewed by TVA III management, including all financial, legal, tax, accounting, operating and other information provided to, or discussed with TVA III management by, or on behalf of, TVA III or PlusAI (including, without limitation, financial statements and related notes), and upon the assurances of the management and other representatives of TVA III that they were not aware of any relevant information that had been omitted or that remained undisclosed to TVA III management. TVA III management did not assume responsibility for independently verifying, and did not independently verify, such information. TVA III management also assumed that the estimates and data that the management of TVA III approved for use in preparing the Materials and providing other information to the TVA III Board were reasonably prepared on bases reflecting the best currently available estimates and good faith judgments of management of PlusAI, and are a reasonable basis upon which to assess, PlusAI, the business combination and the Merger and other matters covered thereby.
Except as described above in “—Unaudited Prospective Unit Economics Information”, no financial projections with respect to PlusAI were provided to the TVA III Board for its consideration of the business combination.
TVA III management did not assume any responsibility to perform, and did not perform, an independent valuation or appraisal of TVA III, PlusAI, pro forma for the business combination and the Merger, or of any of the assets or liabilities (contingent, accrued, derivative, off-balance sheet, or otherwise) of or relating to TVA III,
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PlusAI, pro forma for the business combination and the Merger, or any other entity and TVA III management has not been furnished with any such valuations or appraisals.
The Materials were subject to the assumptions, qualifications, limitations and other matters set forth therein, and the Materials speak only as of the date thereof, were based on the conditions as they existed and information supplied or reviewed as of the date thereof, and were without regard to any market, economic, financial, legal or other circumstances or event of any kind or nature which may exist or occur or may have existed or occurred after such date. TVA III management did not undertake any obligation to update, revise or reaffirm the Materials for events occurring after the date thereof.
Redemption Rights
Pursuant to the TVA III Articles, eligible TVA III Public Shareholders may seek to redeem their TVA III public shares for cash, regardless of whether they vote “for” or “against” the business combination proposal. Eligible shareholder holding TVA III public shares as of the TVA III Record Date may demand that TVA III redeem such shares for cash in an amount equal to their pro rata portion of the funds held in the trust account net of taxes payable (which, for illustrative purposes, was approximately $ per share as of the close of business on , 2026, the TVA III Record Date), calculated as of two business days prior to the anticipated Closing Date. If a holder of TVA III public shares properly exercises its redemption rights as described in this section and the business combination is consummated, TVA III will redeem such holder’s shares for a pro rata portion of funds held in the trust account net of taxes payable and the holder will no longer own TVA III public shares following the business combination. Such redemption rights are not available to our Sponsor, officers or directors, or an affiliate thereof, including the Sponsor Affiliate.
Notwithstanding the foregoing, a holder of TVA III public shares, together with any affiliate of such holder or any other person with whom such holder is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Exchange Act), will be restricted from seeking redemption rights with respect to more than 15% of the TVA III public shares. Accordingly, all TVA III public shares in excess of 15% held by a TVA III Public Shareholder, together with any affiliate of such holder or any other person with whom such holder is acting in concert or as a “group,” will not be redeemed for cash. Moreover, pursuant to the terms of the New Insider Letter, the Sponsor and the Insiders have each agreed to waive any redemption rights with respect to any TVA III Ordinary Shares they own in connection with the consummation of the business combination.
Holders may demand redemption by delivering their shares, either physically or electronically using Depository Trust Company’s DWAC System and requesting in writing that TVA III redeem such shares for cash to Continental Stock Transfer & Trust Company, TVA III’s transfer agent, at least two business days prior to the initially scheduled vote at the extraordinary general meeting. If you hold the TVA III Ordinary Shares in street name, you will have to coordinate with your broker to have your shares certificated or delivered electronically. Certificates that have not been tendered (either physically or electronically) in accordance with these procedures will not be redeemed for cash. There is a nominal cost associated with this tendering process and the act of certificating the TVA III Ordinary Shares or delivering them through the DWAC System. The TVA III Transfer Agent will typically charge the tendering broker $100 and it would be up to the broker whether or not to pass this cost on to the redeeming shareholder. In the event the business combination is not consummated, this may result in an additional cost to TVA III shareholders for the return of their shares.
Any request to redeem such shares, once made, may be withdrawn at any time up to the vote on the business combination proposal. Furthermore, if a holder of TVA III public shares delivered their certificate in connection with an election of their redemption and subsequently decides prior to the applicable date not to elect to exercise such rights, they may simply request that the TVA III Transfer Agent return the certificate (physically or electronically).
If the business combination is not approved or completed for any reason, then TVA III Public Shareholders that elected to exercise their redemption rights will not be entitled to redeem their shares for cash in an amount equal to their pro rata portion of the funds held in the trust account net of taxes payable, as applicable. In such case, TVA III will promptly return any TVA III public shares delivered by shareholders. Additionally, if TVA III would be left with less than $5,000,001 of net tangible assets as a result of the holders of TVA III public shares
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properly demanding redemption of their shares for cash, TVA III will not be able to consummate the business combination. However, because Sponsor Affiliate holds 1,050,000 public shares and has agreed pursuant to the terms of the Forward Purchase Agreement not to redeem its shares in contemplation of the business combination, it is not expected that TVA III would be left with less than $5,000,001 of net tangible assets as a result of redemptions by the holders of TVA III public shares.
The closing price of TVA III public shares on , 2026, the TVA III Record Date, was $ per share. The cash held in the trust account on such date was approximately $ (approximately $ per TVA III public share outstanding as of the TVA III Record Date). Prior to exercising redemption rights, shareholders should verify the market price of TVA III public shares as they may receive higher proceeds from the sale of their shares in the public market than from exercising their redemption rights if the market price per share is higher than the redemption price.
TVA III cannot assure its shareholders that they will be able to sell TVA III public shares in the open market, even if the market price per share is higher than the redemption price stated above, as there may not be sufficient liquidity in its securities when its shareholders wish to sell their shares.
If a holder of TVA III public shares properly exercises its redemption rights and the business combination is consummated, then they will be exchanging their TVA III public shares for cash and will no longer own those shares. They will be entitled to receive cash for their TVA III public shares only if they properly exercise their redemption rights no later than the Redemption Deadline by delivering their certificate (either physically or electronically) to the TVA III Transfer Agent prior to the Redemption Deadline.
Sources and Uses of Funds for the Transactions
The following tables summarize the sources and uses for funding the Transactions under the following scenarios:
No Redemption Scenario
These figures assume that (1) no public shareholders exercise their redemption rights in connection with the Transactions, (2) the Post-Closing Company issues 77,881,677 shares of Post-Closing Company common stock to PlusAI stockholders (which includes holders of PlusAI preferred stock, PlusAI common stock, and PlusAI SAFEs, that, pursuant to the Conversion, are converted to PlusAI common stock immediately prior to the Merger) and (3) there has been no additional incremental financing raised by PlusAI. If the actual facts are different from these assumptions, then the amounts and shares outstanding after the Closing will be different and those changes could be material.
|
|
Sources |
|
|
|
|
Uses |
|
||
|
|
($ in millions) |
|
|
|
|
($ in millions) |
|
||
Existing Plus Shareholder Rollover Equity value |
|
$ |
800.0 |
|
|
Existing Plus Shareholder Rollover Equity value |
|
$ |
800.0 |
|
Cash in trust account stockholders(1) |
|
|
236.6 |
|
|
Cash to balance sheet |
|
|
266.6 |
|
Existing Cash Balances |
|
|
18.6 |
|
|
Transaction expenses(2)(3) |
|
|
29.0 |
|
PIPE Financing |
|
|
61.5 |
|
|
Redemption of TVA Class A shares held by TVA public stockholders |
|
|
— |
|
|
|
|
|
|
Cash redemption of Plus SAFE |
|
|
10.0 |
|
|
|
|
|
|
|
Forward purchase agreement prepayments |
|
|
11.1 |
|
|
Total sources |
|
$ |
1,116.7 |
|
|
Total uses |
|
$ |
1,116.7 |
|
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25% Redemption Scenario
These figures assume that (1) TVA III Public Shareholders holding an aggregate of 5,625,000 TVA III public shares exercise their redemption rights in connection with the Transactions (2) the Post-Closing Company issues 77,881,677 shares of Post-Closing Company common stock to PlusAI stockholders (which includes holders of PlusAI preferred stock, PlusAI common stock, and PlusAI SAFEs, that, pursuant to the Conversion, are converted to PlusAI common stock immediately prior to the Merger) and (3) there has been no additional incremental financing raised by PlusAI. If the actual facts are different from these assumptions, then the amounts and shares outstanding after the Closing will be different and those changes could be material.
|
|
Sources |
|
|
|
|
Uses |
|
||
|
|
($ in millions) |
|
|
|
|
($ in millions) |
|
||
Existing Plus Shareholder Rollover Equity value |
|
$ |
800.0 |
|
|
Existing Plus Shareholder Rollover Equity value |
|
$ |
800.0 |
|
Cash in trust account stockholders(1) |
|
|
236.6 |
|
|
Cash to balance sheet |
|
|
209.7 |
|
Existing Cash Balances |
|
|
18.6 |
|
|
Transaction expenses(2)(3) |
|
|
26.8 |
|
PIPE Financing |
|
|
61.5 |
|
|
Redemption of TVA Class A shares held by TVA public stockholders |
|
|
59.1 |
|
|
|
|
|
|
Cash redemption of Plus SAFE |
|
|
10.0 |
|
|
|
|
|
|
|
Forward purchase agreement prepayments |
|
|
11.1 |
|
|
Total sources |
|
$ |
1,116.7 |
|
|
Total uses |
|
$ |
1,116.7 |
|
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50% Redemption Scenario
These figures assume that (1) TVA III Public Shareholders holding an aggregate of 11,250,000 TVA III public shares exercise their redemption rights in connection with the Transactions (2) the Post-Closing Company issues 77,881,677 shares of Post-Closing Company common stock to PlusAI stockholders (which includes holders of PlusAI preferred stock, PlusAI common stock, and PlusAI SAFEs, that, pursuant to the Conversion, are converted to PlusAI common stock immediately prior to the Merger) and (3) there has been no additional incremental financing raised by PlusAI. If the actual facts are different from these assumptions, then the amounts and shares outstanding after the Closing will be different and those changes could be material.
|
|
Sources |
|
|
|
|
Uses |
|
||
|
|
($ in millions) |
|
|
|
|
($ in millions) |
|
||
Existing Plus Shareholder Rollover Equity value |
|
$ |
800.0 |
|
|
Implied Seller Rollover Equity value |
|
$ |
800.0 |
|
Cash in trust account stockholders(1) |
|
|
236.6 |
|
|
Cash to balance sheet |
|
|
152.8 |
|
Existing Cash Balances |
|
|
18.6 |
|
|
Transaction expenses(2)(3) |
|
|
24.5 |
|
PIPE Financing |
|
|
61.5 |
|
|
Redemption of TVA Class A shares held by TVA public stockholders |
|
|
118.3 |
|
|
|
|
|
|
Cash redemption of Plus SAFE |
|
|
10.0 |
|
|
|
|
|
|
|
Forward purchase agreement prepayments |
|
|
11.1 |
|
|
Total sources |
|
$ |
1,116.7 |
|
|
Total uses |
|
$ |
1,116.7 |
|
Maximum Redemption Scenario
These figures assume that (1) TVA III Public Shareholders holding an aggregate of 21,450,000 TVA III public shares exercise their redemption rights in connection with the Transactions (with the Sponsor Affiliate not redeeming its TVA III public shares), (2) the Post-Closing Company issues 77,881,677 shares of Post-Closing Company common stock to PlusAI stockholders (which includes holders of PlusAI preferred stock, PlusAI common stock, and PlusAI SAFEs, that, pursuant to the Conversion, are converted to PlusAI common stock immediately prior to the Merger) and (3) there has been no additional incremental financing raised by PlusAI. If the actual facts are different from these assumptions, then the amounts and shares outstanding after the Closing will be different and those changes could be material.
|
|
Sources |
|
|
|
|
Uses |
|
||
|
|
($ in millions) |
|
|
|
|
($ in millions) |
|
||
Existing Plus Shareholder Rollover Equity value |
|
$ |
800.0 |
|
|
Existing Plus Shareholder Rollover Equity value |
|
$ |
800.0 |
|
Cash in trust account stockholders(1) |
|
|
236.6 |
|
|
Cash to balance sheet |
|
|
49.7 |
|
Existing Cash Balances |
|
|
18.6 |
|
|
Transaction expenses(2)(3) |
|
|
20.4 |
|
PIPE Financing |
|
|
61.5 |
|
|
Redemption of TVA Class A shares held by TVA public stockholders |
|
|
225.5 |
|
|
|
|
|
|
Cash redemption of Plus SAFE |
|
|
10.0 |
|
|
|
|
|
|
|
Forward purchase agreement prepayments |
|
|
11.1 |
|
|
Total sources |
|
$ |
1,116.7 |
|
|
Total uses |
|
$ |
1,116.7 |
|
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Interests of Certain PlusAI Persons in the Business Combination
In considering the recommendation of the PlusAI Board with respect to approving the Transactions, PlusAI stockholders should be aware that certain members of the PlusAI Board and certain executive officers of PlusAI have interests in the Transactions that are different from, or in addition to, the interests of PlusAI stockholders generally. These interests include, among other things:
|
|
Number of Shares |
|
|
Named Executive Officers |
|
|
5,000,000 |
|
All Executive Officers as a Group |
|
|
17,000,000 |
|
Non-Employee Directors |
|
|
250,000 |
|
The vesting of the PlusAI RSUs set forth in the table above is subject to both continued service over a specified schedule and the occurrence of a liquidity event of PlusAI during a specified period. For purposes of such vesting, the consummation of the Merger will constitute the occurrence of the PlusAI liquidity event, which will enable such RSUs to vest, to the extent the service-based vesting requirement is or has been satisfied in accordance with its applicable vesting schedule.
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The PlusAI Board was aware of these potential conflicts of interest and considered them, among other matters, in reaching its decision to approve the Merger Agreement and the Merger and to recommend that the PlusAI stockholders approve the Merger as described in this proxy statement/prospectus.
Expected Accounting Treatment of the Transactions
We expect the Transactions to be accounted for as a reverse recapitalization in accordance with GAAP. Under this method of accounting, TVA III is expected to be treated as the “acquired” company for financial reporting purposes. Accordingly, for accounting purposes, the financial statements of the Post-Closing Company will represent a continuation of the financial statements of PlusAI with the Transactions treated as the equivalent of PlusAI issuing shares for the net assets of TVA III, accompanied by a recapitalization. The net assets of TVA III will be stated at historical cost as of the Merger date, with no goodwill or other intangible assets recorded. Operations prior to the Transactions will be those of PlusAI in future reports of the Post-Closing Company.
PlusAI is expected to be the accounting acquirer based on evaluation of the following facts and circumstances regardless of the level of redemptions from the trust account of TVA III:
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The Earnout Shares are expected to be classified as equity on the balance sheet. The impact of the Earnout Shares is not expected to be material on the future results of operations of the Post-Closing Company.
Regulatory Matters
Under the HSR Act and the rules that have been promulgated thereunder by the FTC, certain transactions may not be consummated unless information has been furnished to the Antitrust Division and the FTC and certain waiting period requirements have been satisfied. The Transactions are subject to these requirements and may not be completed until the expiration of a 30-day waiting period following the filing of the required Notification and Report Forms with the Antitrust Division and the FTC or until early termination is granted. If the FTC or the Antitrust Division issues a Second Request within the initial 30-day waiting period, the waiting period with respect to the Transactions will be extended for an additional period of 30 calendar days, which will begin on the date on which the filing parties each certify compliance with the Second Request. Complying with a Second Request can take a significant period of time.
Each of TVA III and PlusAI filed a Notification and Report Form with the FTC and the Antitrust Division in connection with the Transactions on , 2026. The initial 30-day waiting period will expire at 11:59 p.m., Eastern time, on , 2026.
At any time before or after consummation of the Transactions, notwithstanding termination of the waiting period under the HSR Act, the applicable competition authorities could take such action under applicable antitrust laws as each deems necessary or desirable in the public interest, including seeking to enjoin the consummation of the Transactions. Private parties may also seek to take legal action under the antitrust laws under certain circumstances. There is no assurance that the Antitrust Division, the FTC, any state attorney general, or any other government authority will not attempt to challenge the Transactions on antitrust grounds, and, if such a challenge is made, we cannot assure you as to its result.
Neither TVA III nor PlusAI is aware of any material regulatory approvals or actions that are required for completion of the Transactions other than the expiration or early termination of the waiting period under the HSR Act. It is presently contemplated that if any such additional regulatory approvals or actions are required, those approvals or actions will be sought. There can be no assurance, however, that any additional approvals or actions will be obtained.
Vote Required
Consummation of the business combination proposal is conditioned on the approval of each of the other condition precedent proposals. If any of those proposals are not approved at the extraordinary general meeting (or any adjournment or postponement thereof), then unless certain conditions in the Merger Agreement are waived by the applicable parties to the Merger Agreement, the Merger Agreement may be terminated and the business combination may not be consummated.
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As of the date of this proxy statement/prospectus, pursuant to the terms of the Sponsor Support Agreement, the Sponsor and the Insiders have each agreed to vote their, and to cause the Sponsor Affiliate to vote its, TVA III Ordinary Shares, including TVA III Class B Ordinary Shares and any TVA III public shares held by them as of the TVA III Record Date, in favor of the business combination proposal. As of the TVA III Record Date, the Sponsor and the Sponsor Affiliate together own 28.5% of the issued and outstanding TVA III Ordinary Shares.
Resolution to be Voted Upon
The full text of the resolution to be passed is as follows:
“RESOLVED, as an ordinary resolution, that the business combination proposal (as such term is defined in TVA III’s proxy statement/prospectus dated , 2026), be approved, ratified and confirmed in all respects.”
Recommendation of the TVA III Board
THE TVA III BOARD UNANIMOUSLY RECOMMENDS THAT TVA III SHAREHOLDERS VOTE “FOR” THE APPROVAL OF THE BUSINESS COMBINATION PROPOSAL.
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Material U.S. Federal Income Tax Consequences of the Business Combination to TVA III Shareholders
The following discussion is a summary of material U.S. federal income tax considerations (1) for U.S. Holders and Non-U.S. Holders (each as defined below, and together, “Holders”) of TVA III Class A Ordinary Shares, TVA III Warrants and TVA III Public Units (each, an “TVA III Security”) of the Domestication, whereby TVA III will re-domicile in the State of Delaware (such re-domiciled company, “TVA III Delaware”), (2) for Holders of TVA III public shares that exercise their redemption rights in connection with the business combination, (3) for Holders of the ownership and disposition of Post-Closing Company Class A Common Stock and Post-Closing Company public warrants (each, a “Post-Closing Company Security”).
With respect to the ownership and disposition of securities, this discussion is limited to (1) TVA III Class A Ordinary Shares and TVA III Delaware Warrants (collectively, “TVA III Delaware Securities”) received in connection with the Domestication, (2) TVA III public shares sold pursuant to the exercise of redemption rights in connection with the business combination, and (3) Post-Closing Company Class A common stock received upon the exercise of the Post-Closing Company public warrants received by a Holder in connection with the Domestication and the Merger. This section applies only to Holders that hold their TVA III Securities, TVA III Delaware Securities and Post-Closing Company Securities as “capital assets” for U.S. federal income tax purposes (generally, property held for investment).
This discussion does not address the U.S. federal income tax consequences (1) to the Sponsor or its affiliates or the officers or directors of TVA III, or (2) to any person holding TVA III Founder Shares or PlusAI capital stock. This discussion is limited to U.S. federal income tax considerations and does not address any estate, gift or other U.S. federal non-income tax considerations or considerations arising under the tax laws of any U.S. state, or local or non-U.S. or other jurisdiction. This discussion does not describe all of the U.S. federal income tax consequences that may be relevant to any particular investor in light of their particular circumstances, including the alternative minimum tax, the Medicare tax on certain investment income and the different consequences that may apply to investors subject to special rules under U.S. federal income tax law, such as:
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If a partnership or other pass-through entity (or any entity or arrangement treated as a partnership or other pass-through entity for U.S. federal income tax purposes) holds TVA III Securities, TVA III Delaware Securities or Post-Closing Company Securities, the tax treatment of such partnership or other pass-through entity and a person treated as a partner of such partnership or owner of such other pass-through entity will generally depend on the status of the partner or owner, the activities of the partnership or other pass-through entity, and certain determinations made at the partner or owner level. Partnerships and other pass-through entities holding any TVA III Securities, TVA III Delaware Securities or Post-Closing Company Securities and persons that are treated as partners of such partnerships or owners of such other pass-through entities should consult their tax advisors as to the particular U.S. federal income tax consequences to them of the Domestication, the exercise of redemption rights with respect to TVA III public shares and the ownership and disposition of Post-Closing Company Securities.
This discussion is based on the Code, Treasury Regulations promulgated under the Code, and judicial and administrative interpretations of the Code and Treasury Regulations promulgated under the Code, all as of the date of this proxy statement/prospectus. All of the foregoing is subject to change, which change could apply retroactively and could affect the tax considerations described in this proxy statement/prospectus. TVA III has not sought, and does not intend to seek, any rulings from the IRS as to any U.S. federal income tax considerations described in this proxy statement/prospectus. Accordingly, there can be no assurance that the IRS will not take positions inconsistent with the considerations discussed below or that any such positions would not be sustained by a court.
This discussion is only a summary of material U.S. federal income tax considerations associated with the Domestication, the exercise of redemption rights with respect to TVA III public shares and the ownership and disposition of TVA III Delaware Securities received in the Domestication or Post-Closing Company Class A common stock acquired by the exercise of Post-Closing Company public warrants received in the Domestication. Each holder should consult its own tax advisor with respect to the particular tax consequences to such holder of the Domestication, the exercise of redemption rights with respect to TVA III public shares, the ownership and disposition of TVA III Delaware Securities and the exercise of TVA III Delaware Warrants received by a holder in the Domestication, including the applicability and effects of a U.S. federal, state and local and non-U.S. tax laws. The opinion of DLA Piper LLP (US), a copy of which is attached as an exhibit to the registration statement of which this proxy statement/prospectus is a part, expresses no opinion on the potential U.S. federal income tax consequences of the Domestication pursuant to Section 367 of the Code or the PFIC rules.
Because the components of a TVA III Public Unit are generally separable at the option of the holder, the holder of a TVA III Public Unit generally should be treated, for U.S. federal income tax purposes, as the owner of the underlying TVA III Class A Ordinary Share and TVA III Public Warrant components of the TVA III Public Unit, and the discussion below with respect to actual Holders of TVA III Class A Ordinary Shares and TVA III
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Public Warrants also should apply to holders of TVA III Public Units (as the deemed owners of the underlying TVA III Class A Ordinary Shares and TVA III Public Warrants that constitute the TVA III Public Units). Accordingly, the separation of a TVA III Public Unit into one TVA III Class A Ordinary Share and the one-half of one TVA III Warrant underlying the TVA III Public Unit generally should not be a taxable event for U.S. federal income tax purposes. This position is not free from doubt, and no assurance can be given that the IRS would not assert, or that a court would not sustain, a contrary position. Holders of TVA III Public Units are urged to consult their tax advisors concerning the U.S. federal, state, local and any non-U.S. tax consequences of the transactions contemplated by the Domestication and the business combination (including the exercise of any redemption rights) with respect to any TVA III Class A Ordinary Shares and TVA III Warrants held through TVA III Public Units (including alternative characterizations of TVA III Public Units).
Tax Treatment of the Domestication
Subject to the limitations set forth herein, the Domestication should qualify as a “reorganization” within the meaning of Section 368(a)(1)(F) of the Code. A transaction qualifies as a reorganization within the meaning of Section 368(a) (1)(F) of the Code if it is a “mere change in identity, form, or place of organization of one corporation, however effected” (an “F Reorganization”).
Pursuant to the Domestication, TVA III will change its jurisdiction of incorporation from the Cayman Islands to Delaware, and, in connection with the Closing of the Merger, will be renamed “PlusAI Holdings, Inc.”
The U.S. federal income tax consequences of the Domestication to the Holders will depend primarily upon whether the Domestication qualifies as an F Reorganization. However, due to the absence of direct guidance, these results are not entirely clear. The discussion below neither binds the IRS nor precludes it from adopting a contrary position. Furthermore, there can be no assurance that the IRS will not assert, or that a court would not sustain, a position contrary to any position set forth herein. TVA III has not requested, and does not intend to request, a ruling from the IRS as to the U.S. federal income tax consequences of the Domestication. Accordingly, each Holder of TVA III Securities is urged to consult its tax advisor with respect to the particular tax consequence of the Domestication to such Holder.
Assuming the Domestication qualifies as an F Reorganization, the Domestication should be treated for U.S. federal income tax purposes as if TVA III (1) transferred all of its assets and liabilities to TVA III Delaware in exchange for all of the outstanding stock and warrants of TVA III Delaware; and (2) then distributed such shares of stock and warrants of TVA III Delaware to the holders of securities of TVA III in liquidation of TVA III. The taxable year of TVA III will be deemed to end on the date of the Domestication.
If the Domestication fails to qualify as an F Reorganization (and does not otherwise qualify as a “reorganization” within the meaning of Section 368(a) of the Code), a Holder of TVA III Securities generally would be treated for U.S. federal income tax purposes as having exchanged its TVA III Class A Ordinary Shares for TVA III Class A Common Stock, or TVA III Warrants for TVA III Delaware Warrants, in a taxable transaction.
U.S. Holders
As used in this proxy statement/prospectus, a “U.S. Holder” is a beneficial owner of a TVA III Security, TVA III Delaware Security or a Post-Closing Company Security, as applicable, that for U.S. federal income tax purposes is, or is treated as:
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Tax Effects of the Domestication to U.S. Holders
Generally
Assuming the Domestication qualifies as an F Reorganization, U.S. Holders of TVA III Securities generally should not recognize gain or loss for U.S. federal income tax purposes in connection with the Domestication, except as provided below under the sections entitled “— Effects of Section 367 to U.S. Holders of TVA III Class A Ordinary Shares” and “— 5. PFIC Considerations.”
Subject to the discussion below under the section entitled “— PFIC Considerations,” if the Domestication fails to qualify as an F Reorganization (and does not otherwise qualify as a “reorganization” within the meaning of Section 368(a) of the Code), a U.S. Holder of TVA III Securities generally would recognize gain or loss with respect to its TVA III Securities in an amount equal to the difference, if any, between the fair market value of the corresponding TVA III Delaware Securities received in the Domestication and the U.S. Holder’s adjusted tax basis in its TVA III Securities surrendered.
U.S. Holders exercising redemption rights will be subject to the potential tax consequences of the Domestication. All U.S. Holders considering exercising redemption rights with respect to TVA III public shares are urged to consult with their tax advisors with respect to the potential tax consequences to them of the Domestication and exercise of redemption rights.
Basis and Holding Period Considerations
Assuming the Domestication qualifies as an F Reorganization, subject to the discussion below under the section entitled “—PFIC Considerations”: (1) the tax basis of a share of TVA III Class A Common Stock or TVA III Delaware Warrant received by a U.S. Holder in the Domestication will equal the U.S. Holder’s tax basis in the TVA III Class A Ordinary Share or TVA III Warrant surrendered in exchange therefor, increased by any amount included in the income of such U.S. Holder as a result of Section 367 of the Code (as discussed below) and (2) the holding period for a share of TVA III Class A Common Stock or TVA III Delaware Warrant received by a U.S. Holder will include such U.S. Holder’s holding period for the TVA III Class A Ordinary Share or TVA III Warrant surrendered in exchange therefor.
If the Domestication fails to qualify as an F Reorganization (and does not otherwise qualify as a “reorganization” within the meaning of Section 368(a) of the Code), the U.S. Holder’s basis in the TVA III Class A Common Stock and TVA III Delaware Warrant would be equal to the sum of the fair market value of such TVA III Class A Common Stock and TVA III Delaware Warrant on the date of the Domestication, and such U.S. Holder’s holding period for such TVA III Class A Common Stock and TVA III Delaware Warrant would begin on the day following the date of the Domestication. Holders who hold different blocks of TVA III Securities (generally, TVA III Securities purchased or acquired on different dates or at different prices) should consult their tax advisors to determine how the above rules apply to them, and the discussion above is general in nature and does not specifically address all of the consequences to U.S. Holders who hold different blocks of TVA III Securities.
Effects of Section 367 to U.S. Holders of TVA III Class A Ordinary Shares
Section 367 of the Code applies to certain transactions involving foreign corporations, including a domestication of a foreign corporation in a transaction that qualifies as an F Reorganization. Subject to the discussion below under the section entitled “— PFIC Considerations,” Section 367(b) of the Code and the Treasury Regulations promulgated thereunder impose U.S. federal income tax on certain U.S. persons in connection with
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transactions that would otherwise be tax-deferred. Section 367(b) of the Code will generally apply to U.S. Holders on the date of the Domestication, including any such U.S. Holders exercising redemption rights.
U.S. Holders Who Own Ten Percent or More (By Vote or Value) of TVA III Shares. Subject to the discussion below under the section entitled “— PFIC Considerations,” a 10% U.S. Shareholder on the date of the Domestication must include in income as a deemed dividend deemed paid by TVA III the “all earnings and profits amount” attributable to the TVA III Class A Ordinary Shares it directly owns within the meaning of Treasury Regulations under Section 367(b) of the Code. A U.S. Holder’s ownership of TVA III Warrants will be taken into account in determining whether such U.S. Holder is a 10% U.S. Shareholder. Complex attribution rules apply in determining whether a U.S. Holder is a 10% U.S. Shareholder and all U.S. Holders are urged to consult their tax advisors with respect to these attribution rules.
A 10% U.S. Shareholder’s “all earnings and profits amount” with respect to its TVA III Class A Ordinary Shares is the net positive earnings and profits of TVA III attributable to such TVA III Class A Ordinary Shares (each as determined under Treasury Regulations under Section 367(b) of the Code) but without regard to any gain that would be realized on a sale or exchange of such TVA III Class A Ordinary Shares. Treasury Regulations under Section 367(b) of the Code provide that the “all earnings and profits amount” attributable to a shareholder’s stock is determined according to the principles of Section 1248 of the Code. In general, Section 1248 of the Code and the Treasury Regulations under the Code provide that the amount of earnings and profits attributable to a block of stock (as defined in Treasury Regulations under Section 1248 of the Code) in a foreign corporation is the ratably allocated portion of the foreign corporation’s earnings and profits generated during the period the shareholder held the block of stock.
TVA III does not expect to have significant, if any, cumulative net earnings and profits on the date of the Domestication. If TVA III’s cumulative net earnings and profits through the date of the Domestication are less than or equal to zero, then a 10% U.S. Shareholder should not be required to include in gross income an “all earnings and profits amount” with respect to its TVA III Class A Ordinary Shares. However, the determination of earnings and profits is complex and may be impacted by numerous factors (including matters discussed in this proxy statement/prospectus). It is possible that the amount of TVA III’s cumulative net earnings and profits could be positive through the date of the Domestication, in which case a 10% U.S. Shareholder would be required to include its “all earnings and profits amount” in income as a deemed dividend deemed paid by TVA III under Treasury Regulations under Section 367(b) of the Code as a result of the Domestication. Any such deemed dividend is expected to be treated as foreign-source income for U.S. federal income tax purposes, and is not expected to be eligible for preferential tax rates because TVA III is expected to be treated as a PFIC.
U.S. Holders Who Own Less Than 10% (By Vote or Value) of TVA III Shares. Subject to the discussion below under the section entitled “— PFIC Considerations,” a U.S. Holder who, on the date of the Domestication, is not a 10% U.S. Shareholder and whose TVA III Class A Common Stock has a fair market value of $50,000 or more on the date of the Domestication will recognize gain (but not loss) with respect to the TVA III Class A Common Stock received in the Domestication or, in the alternative, may elect to recognize the “all earnings and profits amount” attributable to such U.S. Holder’s TVA III Class A Ordinary Shares as described below.
Subject to the discussion below under the section entitled “— PFIC Considerations,” unless a U.S. Holder makes the “all earnings and profits election” as described below, such U.S. Holder generally must recognize gain (but not loss) with respect to TVA III Class A Common Stock received in the Domestication in an amount equal to the excess of the fair market value of such TVA III Class A Common Stock over the U.S. Holder’s adjusted tax basis in the TVA III Class A Ordinary Shares deemed surrendered in exchange therefor. U.S. Holders who hold different blocks of TVA III Class A Ordinary Shares (generally, TVA III Class A Ordinary Shares purchased or acquired on different dates or at different prices) should consult their tax advisors to determine how the above rules apply to them.
In lieu of recognizing any gain as described in the preceding paragraph, a U.S. Holder may elect to include in income as a deemed dividend deemed paid by TVA III the “all earnings and profits amount” attributable to its TVA III Class A Ordinary Shares under Section 367(b) of the Code. There are, however, strict conditions for making this election. This election must comply with applicable Treasury Regulations and generally must include, among other things:
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The election must be attached by an electing U.S. Holder to such U.S. Holder’s timely filed U.S. federal income tax return (including extensions, if any) for the taxable year in which the Domestication occurs, and the U.S. Holder must send notice of making the election to TVA III or TVA III Delaware no later than the date such tax return is filed. In connection with this election, TVA III Delaware will reasonably cooperate with U.S. Holders of TVA III Class A Ordinary Shares, upon written request, to make available to such requesting U.S. Holders information regarding TVA III’s earnings and profits.
TVA III does not expect to have significant, if any, cumulative earnings and profits through the date of the Domestication and if that proves to be the case, U.S. Holders who make this election are not expected to have a significant income inclusion under Section 367(b) of the Code, provided that the U.S. Holder properly executes the election and complies with the applicable notice requirements. However, as noted above, if it were determined that TVA III had positive earnings and profits through the date of the Domestication, a U.S. Holder that makes the election described in this proxy statement/prospectus could have an “all earnings and profits amount” with respect to its TVA III Class A Ordinary Shares, and thus could be required to include that amount in income as a deemed dividend deemed paid by TVA III under applicable Treasury Regulations as a result of the Domestication. Any such deemed dividend is expected to be treated as foreign-source income for U.S. federal income tax purposes, and is not expected to be eligible for preferential tax rates because TVA III is expected to be treated as a PFIC.
Each U.S. Holder is urged to consult its tax advisor regarding the consequences to it of making an election to include in income the “all earnings and profits amount” attributable to its TVA III Class A Ordinary Shares under Section 367(b) of the Code and the appropriate filing requirements with respect to such election.
A U.S. Holder who, on the date of the Domestication, is not a 10% U.S. Shareholder and whose TVA III Class A Ordinary Shares have a fair market value of less than $50,000 on the date of the Domestication generally should not be required by Section 367(b) of the Code and the Treasury Regulations promulgated thereunder to recognize any gain or loss or include any part of the “all earnings and profits amount” in income in connection with the Domestication. However, such U.S. Holder may be subject to taxation under the PFIC rules as discussed below under the section entitled “— PFIC Considerations.”
Tax Consequences for U.S. Holders of TVA III Warrants
Assuming the Domestication qualifies as an F Reorganization, subject to the considerations described above under the section entitled “— Effects of Section 367 to U.S. Holders of TVA III Class A Ordinary Shares — U.S. Holders Who Own 10 Percent or More (By Vote or Value) of TVA III Shares” relating to a U.S. Holder’s ownership
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of TVA III Warrants being taken into account in determining whether such U.S. Holder is a 10% U.S. Shareholder for purposes of Section 367(b) of the Code and the considerations described below under the section entitled “— PFIC Considerations” relating to the PFIC rules, a U.S. Holder of TVA III Warrants should not be subject to U.S. federal income tax with respect to the exchange of TVA III Warrants for TVA III Delaware Warrants in the Domestication.
All U.S. Holders are urged to consult their tax advisors with respect to the effect of Section 367 of the Code to their particular circumstances.
PFIC Considerations
Regardless of whether the Domestication qualifies as an F Reorganization (and, if the Domestication qualifies as an F Reorganization, in addition to the discussion above under the section entitled “— Effects of Section 367 to U.S. Holders of TVA III Class A Ordinary Shares”), the Domestication could be a taxable event to U.S. Holders under the PFIC provisions of the Code if TVA III is considered a PFIC.
Definition of a PFIC. A foreign (i.e., non-United States) corporation will be classified as a PFIC for U.S. federal income tax purposes if either (1) at least 75% of its gross income in a taxable year, including its pro rata share of the gross income of any corporation in which it is considered to own at least 25% of the shares by value, is passive income or (2) at least 50% of its assets in a taxable year (generally determined based on fair market value and averaged quarterly over the year), including its pro rata share of the assets of any corporation in which it is considered to own at least 25% of the shares by value, are held for the production of, or produce, passive income. Passive income generally includes dividends, interest, rents and royalties (other than rents or royalties derived from the active conduct of a trade or business received from unrelated persons) and gains from the disposition of passive assets. The determination of whether a foreign corporation is a PFIC is made annually. Pursuant to a “startup exception,” a foreign corporation will not be a PFIC for the first taxable year the foreign corporation has gross income (the “startup year”) if (1) no predecessor of the foreign corporation was a PFIC; (2) the foreign corporation satisfies to the IRS that it will not be a PFIC for either of the first two taxable years following the startup year; and (3) the foreign corporation is not in fact a PFIC for either of those years.
PFIC Status of TVA III. Based upon the composition of its income and assets, and upon a review of its financial statements, TVA III believes that it likely will not be eligible for the startup exception and therefore likely has been a PFIC since its first taxable year and will likely be considered a PFIC for each taxable year thereafter, including the taxable year which ends as a result of the Domestication.
Effects of PFIC Rules on the Domestication. Even if the Domestication qualifies as an F Reorganization, Section 1291(f) of the Code requires that, to the extent provided in Treasury Regulations, a U.S. person who disposes of stock of a PFIC (including for this purpose, under a proposed Treasury Regulation that generally treats an “option” (which would generally include a TVA III Warrant) to acquire the stock of a PFIC as stock of the PFIC, exchanging warrants of a PFIC for newly issued warrants in connection with a domestication transaction) recognizes gain notwithstanding any other provision of the Code. No final Treasury Regulations are currently in effect under Section 1291(f) of the Code. However, proposed Treasury Regulations under Section 1291(f) of the Code have been promulgated with a retroactive proposed effective date. If finalized in their current form, those proposed Treasury Regulations would require gain recognition to U.S. Holders of TVA III Class A Ordinary Shares and TVA III Warrants as a result of the Domestication if:
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The tax on any such recognized gain would be imposed based on a complex set of computational rules designed to offset the tax deferral with respect to the undistributed earnings of TVA III. Under these rules (the “excess distributions regime”):
The proposed Treasury Regulations provide coordinating rules with Section 367(b) of the Code, whereby, if the gain recognition rule of the proposed Treasury Regulations applied to a disposition of PFIC stock that results from a transfer with respect to which Section 367(b) of the Code requires the U.S. Holder to recognize gain or include an amount in income as a deemed dividend deemed paid by TVA III, the gain realized on the transfer is taxable as an excess distribution under the excess distribution regime, and the excess, if any, of the amount to be included in income under Section 367(b) of the Code over the gain realized under the excess distribution regime is taxable as provided under Section 367(b) of the Code. See the discussion above under the section entitled “— Effects of Section 367 to U.S. Holders of TVA III Class A Ordinary Shares.”
It is difficult to predict whether, in what form and with what effective date, final Treasury Regulations under Section 1291(f) of the Code may be adopted or how any such final Treasury Regulations would apply. Therefore, U.S. Holders of TVA III Class A Ordinary Shares that have not made a timely and effective QEF Election (or a QEF Election along with a purging election) or an MTM Election (each as defined below) may, pursuant to the proposed Treasury Regulations, be subject to taxation under the PFIC rules on the Domestication with respect to their TVA III Class A Ordinary Shares and TVA III Warrants under the excess distribution regime in the manner set forth above. A U.S. Holder that made a timely and effective QEF Election (or a QEF Election along with a purging election) or an MTM Election with respect to its TVA III Class A Ordinary Shares is referred to in this proxy statement/prospectus as an “Electing Shareholder” and a U.S. Holder that is not an Electing Shareholder is referred to in this proxy statement/prospectus as a “Non-Electing Shareholder.”
As discussed above, proposed Treasury Regulations issued under the PFIC rules generally treat an “option” (which would include a TVA III Warrant) to acquire the stock of a PFIC as stock of the PFIC, while final Treasury Regulations issued under the PFIC rules provide that neither a QEF Election nor an MTM Election (as defined below) may be made with respect to options. Therefore, it is possible that the proposed Treasury Regulations, if finalized in their current form, would apply to cause gain recognition on the exchange of TVA III Warrants for TVA III Delaware Warrants pursuant to the Domestication.
Any gain recognized by a Non-Electing Shareholder of TVA III Class A Ordinary Shares or a U.S. Holder of TVA III Warrants as a result of the Domestication pursuant to the PFIC rules would be taxable income to such
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U.S. Holder and taxed under the excess distribution regime in the manner set forth above, with no corresponding receipt of cash.
As noted above, if TVA III is considered a PFIC, the Domestication could be a taxable event under the PFIC rules regardless of whether the Domestication qualifies as an F Reorganization, and, absent a QEF Election (or a QEF Election along with a purging election) or an MTM Election, a U.S. Holder would be taxed under the excess distribution regime in the manner set forth above.
All U.S. Holders are urged to consult their tax advisors regarding the effects of the PFIC Rules on the Domestication, including the impact of any proposed or final Treasury Regulations.
QEF Election and Mark-to-Market Election
The impact of the PFIC rules on a U.S. Holder of TVA III Class A Ordinary Shares will depend on whether the U.S. Holder has made a timely and effective election to treat TVA III as a “qualified electing fund” under Section 1295 of the Code for the taxable year that is the first year in the U.S. Holder’s holding period of TVA III Class A Ordinary Shares during which TVA III qualified as a PFIC (a “QEF Election”) or, if in a later taxable year, the U.S. Holder made a QEF Election along with a purging election. One type of purging election creates a deemed sale of the U.S. Holder’s TVA III Class A Ordinary Shares at their then fair market value and requires the U.S. Holder to recognize gain pursuant to such purging election subject to the excess distribution regime described above. As a result of any such purging election, the U.S. Holder would increase the adjusted tax basis in its TVA III Class A Ordinary Shares by the amount of the gain recognized and, solely for purposes of the PFIC rules, would have a new holding period in its TVA III Class A Ordinary Shares. U.S. Holders are urged to consult their tax advisors as to the application of the rules governing purging elections to their particular circumstances.
A U.S. Holder’s ability to make a timely and effective QEF Election (or a QEF Election along with a purging election) with respect to its TVA III Class A Ordinary Shares is contingent upon, among other things, the provision by TVA III of a “PFIC Annual Information Statement” to such U.S. Holder.
TVA III or the Post-Closing Company (as applicable) will endeavor to provide a requesting U.S. Holder such information the IRS may require, including a PFIC Annual Information Statement, for making or maintaining a QEF Election (or making a QEF Election along with a purging election) for TVA III’s taxable year that ends on the date of the Domestication (and prior taxable years), but there is no assurance that TVA III or the Post-Closing Company will timely provide such required information. As discussed above, a U.S. Holder is not able to make a QEF Election with respect to TVA III Warrants under current law. An Electing Shareholder generally would not be subject to the excess distribution regime discussed above with respect to their TVA III Class A Ordinary Shares. As a result, an Electing Shareholder generally should not recognize gain or loss as a result of the Domestication except to the extent described under “— 3. Effects of Section 367 to U.S. Holders of TVA III Class A Ordinary Shares,” and subject to the discussion above under “— Tax Effects of the Domestication to U.S. Holders,” but rather would include annually in gross income its pro rata share of the ordinary earnings and net capital gain of TVA III, whether or not such amounts are actually distributed.
The impact of the PFIC rules on a U.S. Holder of TVA III Class A Ordinary Shares may also depend on whether the U.S. Holder has made a mark-to-market election under Section 1296 of the Code (an “MTM Election”). U.S. Holders who hold (actually or constructively) stock of a foreign corporation that is classified as a PFIC may elect to mark such stock to its market value each taxable year if such stock is “marketable stock,” generally, stock that is regularly traded on a stock exchange that is registered with the SEC, including the Nasdaq. No assurance can be given that TVA III Class A Ordinary Shares are considered to be marketable stock for purposes of the MTM Election for any taxable year or whether the other requirements of this election are satisfied. If such an election is available and has been made, such Electing Shareholder generally would not be subject to the excess distributions regime discussed above with respect to their TVA III Class A Ordinary Shares in connection with the Domestication. Instead, in general, such Electing Shareholder will include as ordinary income each year the excess, if any, of the fair market value of its TVA III Class A Ordinary Shares at the end of its taxable year over its adjusted tax basis in its TVA III Class A Ordinary Shares. The Electing Shareholder also will recognize an ordinary loss in respect of the excess, if any, of its adjusted tax basis in its TVA III Class A Ordinary Shares over the fair market value of its TVA III Class A Ordinary Shares at the end of its taxable year (but only to the extent of the net amount of previously included income as a result of the MTM Election). The Electing Shareholder’s
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tax basis in its TVA III Class A Ordinary Shares will be adjusted to reflect any such income or loss amounts, and any further gain recognized on a sale or other taxable disposition of its TVA III Class A Ordinary Shares will be treated as ordinary income (and any further loss recognized on such sale or disposition in excess of the net amount previously included in income as a result of the MTM Election would be capital loss). However, if the MTM Election is not made by a U.S. Holder with respect to the first taxable year of its holding period for the TVA III Class A Ordinary Shares in which TVA III is a PFIC, then the excess distribution regime discussed above will apply to certain dispositions of, distributions on and other amounts taxable with respect to, TVA III Class A Ordinary Shares, including in connection with the Domestication. Under current law, an MTM Election is not available with respect to warrants, including the TVA III Warrants.
The rules dealing with PFICs are very complex and are impacted by various factors in addition to those described above, including the application of the rules addressing overlaps in the PFIC rules and the Section 367(b) rules and the rules relating to Controlled Foreign Corporations. All U.S. Holders of TVA III Securities are urged to consult their tax advisors regarding the consequences to them of the PFIC rules, including whether a QEF Election (or a QEF Election along with a purging election), an MTM election or any other election is available and whether and how any overlap rules apply, and the consequences to them of any such election or overlap rule and the impact of any proposed or final PFIC Treasury Regulations.
Tax Effects to U.S. Holders of Exercising Redemption Rights
Generally
The U.S. federal income tax consequences to a U.S. Holder of TVA III public shares that exercises its redemption rights with respect to its TVA III public shares will depend on whether the redemption qualifies as a sale of under Section 302 of the Code. If the redemption qualifies as a sale of shares by a U.S. Holder, the tax consequences to such U.S. Holder are as described below under the section entitled “— Taxation of Redemption Treated as a Sale.” If the redemption does not qualify as a sale of shares, a U.S. Holder will be treated as receiving a corporate distribution with the tax consequences to such U.S. Holder as described below under the section entitled “— Taxation of Redemption Treated as a Distribution.”
Whether a redemption of shares qualifies for sale treatment will depend largely on the total number of shares of the Post-Closing Company Class A common stock treated as held by the redeemed U.S. Holder before and after the redemption (including any shares treated as constructively owned by the U.S. Holder as a result of owning TVA III Warrants and any shares that a U.S. Holder would directly or indirectly acquire pursuant to the business combination) relative to all of the stock of the Post-Closing Company outstanding both before and after the redemption. The redemption generally will be treated as a sale of shares (rather than as a corporate distribution) if the redemption (1) is “substantially disproportionate” with respect to the U.S. Holder, (2) results in a “complete termination” of the U.S. Holder’s interest in the Post-Closing Company or (3) is “not essentially equivalent to a dividend” with respect to the U.S. Holder. These tests are explained more fully below.
In determining whether any of the foregoing tests result in a redemption qualifying for sale treatment, a U.S. Holder takes into account not only shares actually owned by the U.S. Holder, but also shares that are constructively owned by it under certain attribution rules set forth in the Code. A U.S. Holder may constructively own, in addition to shares owned directly, shares owned by certain related individuals and entities in which the U.S. Holder has an interest or that have an interest in such U.S. Holder, as well as any shares that the holder has a right to acquire by exercise of an option, which would generally include shares which could be acquired pursuant to the exercise of Post-Closing Company public warrants. Moreover, any shares that a U.S. Holder directly or constructively acquires pursuant to the business combination generally should be included in determining the U.S. federal income tax treatment of the redemption.
In order to meet the substantially disproportionate test, the percentage of the Post-Closing Company’s outstanding voting stock actually and constructively owned by the U.S. Holder immediately following the redemption of shares must, among other requirements, be less than 80% of the percentage of TVA III’s outstanding voting stock actually and constructively owned by the U.S. Holder immediately before the redemption (determined based on reduction in voting power, and taking into account redemptions by other holders and possibly the Post-Closing Company stock to be issued pursuant to the business combination). There will be a complete termination of a U.S. Holder’s interest in the Post-Closing Company if either (1) all of the shares actually and constructively owned by the U.S. Holder are redeemed or (2) all of the shares actually owned by the U.S. Holder are redeemed
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and the U.S. Holder is eligible to waive, and effectively waives in accordance with specific rules, the attribution of stock owned by certain family members and the U.S. Holder does not constructively own any other shares (including any stock constructively owned by the U.S. Holder as a result of owning TVA III Warrants). The redemption will not be essentially equivalent to a dividend if the redemption results in a “meaningful reduction” of the U.S. Holder’s proportionate interest in the Post-Closing Company. Whether the redemption will result in a meaningful reduction in a U.S. Holder’s proportionate interest in the Post-Closing Company will depend on the particular facts and circumstances. However, the IRS has indicated in a published ruling that even a small reduction in the proportionate interest of a small minority stockholder in a publicly held corporation where such stockholder exercises no control over corporate affairs may constitute such a “meaningful reduction.”
If none of the foregoing tests is satisfied, then the redemption of shares generally will be treated as a corporate distribution to the redeemed U.S. Holder and the tax effects to such a U.S. Holder will be as described below under the section entitled “—Taxation of Redemption Treated as a Distribution.” After the application of those rules, any remaining tax basis of the U.S. Holder in the redeemed shares will be added to the U.S. Holder’s adjusted tax basis in its remaining Post-Closing Company Class A common stock or, if it has none, to the U.S. Holder’s adjusted tax basis in its Post-Closing Company public warrants or possibly in other Post-Closing Company Class A common stock constructively owned by it.
U.S. Holders exercising redemption rights will be subject to the potential tax consequences of the Domestication (discussed further above).
U.S. Holders who actually or constructively own at least five percent by vote or value (or, if Post-Closing Company Class A common stock is not then publicly traded, at least one percent by vote or value) or more of the total outstanding Post-Closing Company Class A common stock may be subject to special reporting requirements with respect to a redemption of shares, and such holders should consult with their tax advisors with respect to their reporting requirements.
Taxation of Redemption Treated as a Distribution
If the redemption of a U.S. Holder’s shares is treated as a corporate distribution, as discussed above under the section entitled “— Generally,” the amount of cash received in the redemption generally will constitute a dividend for U.S. federal income tax purposes to the extent paid from the Post-Closing Company’s current or accumulated earnings and profits, as determined under U.S. federal income tax principles.
Distributions in excess of the Post-Closing Company’s current and accumulated earnings and profits will constitute a return of capital that will be applied against and reduce (but not below zero) the U.S. Holder’s adjusted tax basis in its shares. Any remaining excess will be treated as gain realized on the sale of shares and will be treated as described below under the section entitled “— Taxation of Redemption Treated as a Sale.”
Taxation of Redemption Treated as a Sale
If the redemption of a U.S. Holder’s shares is treated as a sale, as discussed above under the section entitled “— Generally,” a U.S. Holder generally will recognize capital gain or loss in an amount equal to the difference between the amount of cash received in the redemption and the U.S. Holder’s adjusted tax basis in the shares redeemed. Any such capital gain or loss generally will be long-term capital gain or loss if the U.S. Holder’s holding period for the shares so disposed of exceeds one year. Long-term capital gains recognized by non-corporate U.S. Holders generally will be eligible to be taxed at reduced rates. The deductibility of capital losses is subject to limitations.
U.S. Holders who hold different blocks of shares (including as a result of holding different blocks of TVA III Class A Ordinary Shares purchased or acquired on different dates or at different prices) should consult their tax advisors to determine how the above rules apply to them.
ALL U.S. HOLDERS ARE URGED TO CONSULT THEIR TAX ADVISORS AS TO THE TAX CONSEQUENCES TO THEM OF AN EXERCISE OF REDEMPTION RIGHTS.
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Tax Consequences of Ownership and Disposition of Post-Closing Company Securities
Taxation of Distributions
In general, distributions of cash or other property to U.S. Holders of Post-Closing Company Class A common stock (other than certain distributions of the Post-Closing Company Class A common stock or rights to acquire the Post-Closing Company Class A common stock) generally will constitute dividends for U.S. federal income tax purposes to the extent paid from the Post-Closing Company’s current or accumulated earnings and profits, as determined under U.S. federal income tax principles. Distributions in excess of current and accumulated earnings and profits generally will constitute a return of capital that will be applied against and reduce (but not below zero) the U.S. Holder’s adjusted tax basis in its Post-Closing Company Class A common stock. Any remaining excess generally will be treated as gain realized on the sale or other disposition of the Post-Closing Company Class A common stock, as described below under the section entitled “— Gain or Loss on Sale, Taxable Exchange or Other Taxable Disposition of Post-Closing Company Securities.”
Dividends paid to a U.S. Holder that is treated as a taxable corporation for U.S. federal income tax purposes generally will qualify for the dividends received deduction if the requisite holding period is satisfied. With certain exceptions (including dividends treated as investment income for purposes of investment interest deduction limitations), and provided certain holding period requirements are met, dividends paid to a non-corporate U.S. Holder generally will constitute “qualified dividend income” subject to tax at reduced rates applicable to long-term capital gains.
Gain or Loss on Sale, Taxable Exchange or Other Taxable Disposition of Post-Closing Company Securities
Upon a sale or other taxable disposition of Post-Closing Company Securities (which, in general, would include a redemption of Post-Closing Company public warrants that is treated as a sale of such warrants as described below), a U.S. Holder generally will recognize capital gain or loss in an amount equal to the difference between the amount realized and the U.S. Holder’s adjusted tax basis in the Post-Closing Company Securities. Any such capital gain or loss generally will be long-term capital gain or loss if the U.S. Holder’s holding period for the Post-Closing Company Securities so disposed of exceeds one year. Long-term capital gains recognized by non-corporate U.S. Holders may be eligible to be taxed at reduced rates. The deductibility of capital losses is subject to limitations.
Generally, the amount of gain or loss recognized by a U.S. Holder is an amount equal to the difference between (1) the sum of the amount of cash and the fair market value of any property received in such disposition and (2) the U.S. Holder’s adjusted tax basis in its Post-Closing Company Securities so disposed of. See the section entitled “— Tax Effects of the Domestication to U.S. Holders” above for a discussion of a U.S. Holder’s adjusted tax basis in its securities following the Domestication. See the section entitled “— Exercise, Lapse or Redemption of Post-Closing Company Public Warrants” below for a discussion regarding a U.S. Holder’s tax basis in Post-Closing Company Class A common stock acquired pursuant to the exercise of a Post-Closing Company public warrant.
Exercise, Lapse or Redemption of Post-Closing Company Public Warrants
A U.S. Holder generally will not recognize taxable gain or loss on the acquisition of Post-Closing Company Class A common stock upon exercise of Post-Closing Company public warrants for cash. The U.S. Holder’s tax basis in the shares of Post-Closing Company Class A common stock received upon exercise of the Post-Closing Company public warrants generally will be an amount equal to the sum of the U.S. Holder’s tax basis in the Post-Closing Company public warrants and the exercise price. It is unclear whether the U.S. Holder’s holding period for the Post-Closing Company Class A common stock received upon exercise of the Post-Closing Company public warrants will begin on the date following the date of exercise or on the date of exercise of the Post-Closing Company public warrants; in either case, the holding period will not include the period during which the U.S. Holder held the Post-Closing Company public warrants. If any Post-Closing Company public warrants are allowed to lapse unexercised, a U.S. Holder generally will recognize a capital loss equal to such holder’s tax basis in the lapsed Post-Closing Company public warrants.
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The tax consequences of a cashless exercise of Post-Closing Company public warrants are not clear under current tax law. A cashless exercise may not be taxable, either because the exercise is not a realization event or because the exercise is treated as a recapitalization for U.S. federal income tax purposes. If the cashless exercise is not taxable, a U.S. Holder’s basis in the Post-Closing Company Class A common stock received would equal the U.S. Holder’s basis in the Post-Closing Company public warrants exercised therefor. If the cashless exercise were treated as not being a realization event, it is unclear whether a U.S. Holder’s holding period in the Post-Closing Company Class A common stock would be treated as commencing on the date following the date of exercise or on the date of exercise of the Post-Closing Company public warrants; in either case, the holding period would not include the period during which the U.S. Holder held the Post-Closing Company public warrants. If the cashless exercise were treated as a recapitalization, the holding period of the Post-Closing Company Class A common stock would include the holding period of the Post-Closing Company public warrants exercised therefor.
It is also possible that a cashless exercise could be treated in part as a taxable exchange in which gain or loss would be recognized. In such event, a U.S. Holder could be deemed to have surrendered a number of Post-Closing Company public warrants equal to the number of shares of Post-Closing Company Class A common stock having a value equal to the exercise price for the total number of Post-Closing Company public warrants to be exercised. In such case, the U.S. Holder would recognize capital gain or loss with respect to the Post-Closing Company public warrants deemed surrendered in an amount equal to the difference between the fair market value of the Post-Closing Company Class A common stock that would have been received in a regular exercise of the Post-Closing Company public warrants deemed surrendered and the U.S. Holder’s tax basis in the Post-Closing Company public warrants deemed surrendered. In this case, a U.S. Holder’s aggregate tax basis in the Post-Closing Company Class A common stock received would equal the sum of the U.S. Holder’s tax basis in the Post-Closing Company public warrants deemed exercised and the aggregate exercise price of such Post-Closing Company public warrants. It is unclear whether a U.S. Holder’s holding period for the Post-Closing Company Class A common stock would commence on the date following the date of exercise or on the date of exercise of the Post-Closing Company public warrants; in either case, the holding period would not include the period during which the U.S. Holder held the Post-Closing Company public warrants.
Due to the absence of authority on the U.S. federal income tax treatment of a cashless exercise, including when a U.S. Holder’s holding period would commence with respect to the Post-Closing Company Class A common stock received, there can be no assurance regarding which, if any, of the alternative tax consequences and holding periods described above would be adopted by the IRS or a court of law. Accordingly, U.S. Holders should consult their tax advisors regarding the tax consequences of a cashless exercise.
If the Post-Closing Company redeems Post-Closing Company public warrants for cash or if it purchases Post-Closing Company public warrants in an open market transaction, such redemption or purchase generally will be treated as a taxable disposition to the U.S. Holder, taxed as described above under the section entitled “— Gain or Loss on Sale, Taxable Exchange or Other Taxable Disposition of Post-Closing Company Securities.”
Possible Constructive Distributions
Consistent with the TVA III Warrants, the terms of each Post-Closing Company public warrant will provide for an adjustment to the number of shares of Post-Closing Company Class A common stock for which the Post-Closing Company public warrant may be exercised or to the exercise price of the Post-Closing Company public warrant in certain events. An adjustment which has the effect of preventing dilution generally is not taxable. A U.S. Holder of the Post-Closing Company public warrants would, however, be treated as receiving a constructive distribution from the Post-Closing Company if, for example, the adjustment increases the U.S. Holder’s proportionate interest in the Post-Closing Company’s assets or earnings and profits (for example, through an increase in the number of shares of Post-Closing Company Class A common stock that would be obtained upon exercise or through a decrease in the exercise price of the Post-Closing Company public warrant), which adjustment may be made as a result of a distribution of cash or other property, such as other securities, to the holders of shares of the Post-Closing Company stock, or as a result of the issuance of a stock dividend to holders of shares of the Post-Closing Company stock, in each case, which is taxable to the holders of such shares as a distribution. Such constructive distribution generally would be subject to tax as described above under the section entitled “— Taxation of Distributions” in the same manner as if the U.S. Holders of the Post-Closing Company
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public warrants received a cash distribution from the Post-Closing Company equal to the fair market value of such increased interest.
Information Reporting and Backup Withholding
Payments of dividends on and the proceeds from a sale or other disposition of Post-Closing Company Securities will be subject to information reporting to the IRS and U.S. backup withholding on such payments may be possible. Backup withholding will not apply, however, to a U.S. Holder who furnishes a correct taxpayer identification number and makes other required certifications, or who is otherwise exempt from backup withholding and establishes such exempt status.
Backup withholding is not an additional tax. Amounts withheld as backup withholding may be credited against a U.S. Holder’s U.S. federal income tax liability, and the U.S. Holder generally may obtain a refund of any excess amounts withheld under the backup withholding rules by timely filing the appropriate claim for refund with the IRS and furnishing any required information.
Non-U.S. Holders
As used in this proxy statement/prospectus, a “Non-U.S. Holder” is a beneficial owner of a TVA III Security or Post-Closing Company Security, as applicable, who or that for U.S. federal income tax purposes is, or is treated as:
Tax Effects of the Domestication to Non-U.S. Holders
The Domestication is not expected to result in any U.S. federal income tax consequences to a Non-U.S. Holder of TVA III Securities unless the Domestication fails to qualify as an F Reorganization (and does not otherwise qualify as a “reorganization” within the meaning of Section 368(a) of the Code) and such Non-U.S. Holder holds its TVA III Securities in connection with a conduct of a trade or business in the United States (and, if required by an applicable income tax treaty, is attributable to a permanent establishment or fixed base that such Non-U.S. Holder maintains in the United States) or is a nonresident alien individual who is physically present in the United States for at least 183 days during that individual’s taxable year in which the Domestication occurs and meets certain other requirements. Non-U.S. Holders will own stock and warrants of a U.S. corporation, i.e., the Post-Closing Company, rather than a non-U.S. corporation, i.e., TVA III, after the Domestication.
Non-U.S. Holders exercising redemption rights will be subject to the potential tax consequences of the Domestication. All Non-U.S. Holders considering exercising redemption rights with respect to TVA III Class A Ordinary Shares are urged to consult with their tax advisors with respect to the potential tax consequences to them of the Domestication and exercise of redemption rights.
Tax Effects to Non-U.S. Holders of Exercising Redemption Rights
The U.S. federal income tax consequences to a Non-U.S. Holder of TVA III Class A Ordinary Shares that exercises its redemption rights will depend on whether the redemption qualifies as a sale of shares redeemed, as described above under “U.S. Holders — Tax Effects to U.S. Holders of Exercising Redemption Rights — Generally.” The U.S. federal income tax consequences to the Non-U.S. Holder will be as described below under “— Tax Consequences of Ownership and Disposition of Post-Closing Company Securities — Sale, Taxable Exchange or Other Taxable Disposition of Post-Closing Company Securities.” If the redemption does not qualify as a sale of Post-Closing Company Class A common stock, the Non-U.S. Holder will be treated as receiving a
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corporate distribution, the U.S. federal income tax consequences of which are described below under “— Tax Consequences of Ownership and Disposition of Post-Closing Company Securities — Taxation of Distributions.”
Because it may not be certain at the time a Non-U.S. Holder is redeemed whether such Non-U.S. Holder’s redemption will be treated as a sale of shares or a corporate distribution, and because such determination will depend in part on a Non-U.S. Holder’s particular circumstances, the applicable withholding agent may not be able to determine whether (or to what extent) a Non-U.S. Holder is treated as receiving a dividend for U.S. federal income tax purposes. Therefore, the applicable withholding agent may withhold tax at a rate of 30% (or such lower rate as may be specified by an applicable income tax treaty) on the gross amount of any consideration paid to a Non-U.S. Holder in redemption of such Non-U.S. Holder’s Post-Closing Company Class A common stock, unless (1) the applicable withholding agent has established special procedures allowing Non-U.S. Holders to certify that they are exempt from such withholding tax and (2) such Non-U.S. Holders are able to certify that they meet the requirements of such exemption (e.g., because such Non-U.S. Holders are not treated as receiving a dividend under the Section 302 tests described above under the section entitled “U.S. Holders — Tax Effects to U.S. Holders of Exercising Redemption Rights — Generally”). However, there can be no assurance that any applicable withholding agent will establish such special certification procedures. If an applicable withholding agent withholds excess amounts from the amount payable to a Non-U.S. Holder, such Non-U.S. Holder generally may obtain a refund of any such excess amounts by timely filing an appropriate claim for refund with the IRS. Non-U.S. Holders should consult their own tax advisors regarding the application of the foregoing rules in light of their particular facts and circumstances and any applicable procedures or certification requirements.
Tax Consequences of Ownership and Disposition of Post-Closing Company Securities
Taxation of Distributions
In general, any distributions (including constructive distributions, but not including certain distributions of the Post-Closing Company stock or rights to acquire the Post-Closing Company stock) made to a Non-U.S. Holder of shares of Post-Closing Company Class A common stock, to the extent paid out of the Post-Closing Company’s current or accumulated earnings and profits (as determined under U.S. federal income tax principles), will constitute dividends for U.S. federal income tax purposes and, provided such dividends are not effectively connected with the Non-U.S. Holder’s conduct of a trade or business within the United States, the Post-Closing Company (or another applicable withholding agent) will be required to withhold tax from the gross amount of the dividend at a rate of 30%, unless such Non-U.S. Holder is eligible for a reduced rate of withholding tax under an applicable income tax treaty and provides proper certification of its eligibility for such reduced rate (usually on an IRS Form W-8BEN or W-8BEN-E). In the case of any constructive dividend, it is possible that this tax would be withheld from any amount owed to a Non-U.S. Holder by the applicable withholding agent, including cash distributions on other property or sale proceeds from warrants or other property subsequently paid or credited to such Non-U.S. Holder. Any distribution not constituting a dividend will be treated first as reducing (but not below zero) the Non-U.S. Holder’s adjusted tax basis in its shares of Post-Closing Company Class A common stock and, to the extent such distribution exceeds the Non-U.S. Holder’s adjusted tax basis, as gain realized from the sale or other disposition of the Post-Closing Company Class A common stock, which will be treated as described below under the section entitled “— Sale, Taxable Exchange or Other Taxable Disposition of Post-Closing Company Securities.” If the Post-Closing Company determines that it is likely to be classified as a “United States real property holding corporation” (see the section entitled “— Sale, Taxable Exchange or Other Taxable Disposition of Post-Closing Company Securities” below), the applicable withholding agent may be required to withhold 15% of any distribution that exceeds the Post-Closing Company’s current and accumulated earnings and profits.
The withholding tax generally does not apply to dividends paid to a Non-U.S. Holder who provides an IRS Form W-8ECI, certifying that the dividends are effectively connected with the Non-U.S. Holder’s conduct of a trade or business within the United States. Instead, the effectively connected dividends will be subject to regular U.S. federal income tax as if the Non-U.S. Holder were a U.S. resident, subject to an applicable income tax treaty providing otherwise. A Non-U.S. Holder that is treated as a foreign corporation for U.S. federal income tax purposes receiving effectively connected dividends may also be subject to an additional “branch profits tax” imposed at a rate of 30% (or a lower rate provided in an applicable tax treaty).
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Sale, Taxable Exchange or Other Taxable Disposition of Post-Closing Company Securities
A Non-U.S. Holder generally will not be subject to U.S. federal income or withholding tax in respect of gain recognized on a sale, taxable exchange or other taxable disposition of its Post-Closing Company Securities, including an expiration or redemption of the Post-Closing Company public warrants as described below under the section entitled “— Exercise, Lapse or Redemption of Post-Closing Company Public Warrants,” or a redemption of Post-Closing Company Class A common stock that is treated as a sale of shares as described above under the section entitled “— Tax Effects to Non-U.S. Holders of Exercising Redemption Rights,” unless:
Unless an applicable treaty provides otherwise, gain described in the first bullet point above will be subject to tax at generally applicable U.S. federal income tax rates as if the Non-U.S. Holder were a U.S. resident. Any gains described in the first bullet point above of a Non-U.S. Holder that is treated as a foreign corporation for U.S. federal income tax purposes may also be subject to an additional “branch profits tax” imposed at a 30% rate (or a lower applicable income tax treaty rate).
If the second bullet point applies to a Non-U.S. Holder, such Non-U.S. Holder generally will be subject to U.S. tax on such Non-U.S. Holder’s net capital gain for such year (including any gain realized in connection with the redemption) at a tax rate of 30% (or a lower applicable tax treaty rate).
If the third bullet point above applies to a Non-U.S. Holder, subject to certain exceptions in the case of interests that are regularly traded on an established market, gain recognized by such holder will be subject to tax at generally applicable U.S. federal income tax rates, and a buyer of such Post-Closing Company Security or the Post-Closing Company may be required to withhold U.S. federal income tax at a rate of 15% of the amount realized upon such disposition or redemption.
Based on the nature of the business and activities of PlusAI, it generally is not expected that the Post-Closing Company would be a United States real property holding corporation after the Domestication or immediately after the business combination is completed. However, neither TVA III nor the Post-Closing Company has undertaken a formal analysis of the Post-Closing Company’s possible status as a United States real property holding corporation. Such determination is factual in nature and subject to change. Accordingly, no assurance can be provided as to whether the Post-Closing Company would be treated as a United States real property holding corporation in any taxable year.
Non-U.S. Holders should consult their tax advisors regarding the U.S. federal income tax consequences to them in respect of any loss recognized on a sale, taxable exchange or other taxable disposition of its Post-Closing Company Securities.
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Exercise, Lapse or Redemption of Post-Closing Company Public Warrants
A Non-U.S. Holder generally will not recognize taxable gain or loss on the acquisition of Post-Closing Company Class A common stock upon exercise of Post-Closing Company public warrants for cash. The Non-U.S. Holder’s tax basis in the share of Post-Closing Company Class A common stock received upon exercise of Post-Closing Company public warrants generally will be an amount equal to the sum of the Non-U.S. Holder’s tax basis in such Post-Closing Company public warrants and the exercise price. It is unclear whether the Non-U.S. Holder’s holding period for the Post-Closing Company Class A common stock received upon exercise of the Post-Closing Company public warrants will begin on the date following the date of exercise or on the date of exercise of the Post-Closing Company public warrants; in either case, the holding period will not include the period during which the Non-U.S. Holder held the Post-Closing Company public warrants. If any Post-Closing Company public warrants are allowed to lapse unexercised, a Non-U.S. Holder generally will recognize a capital loss equal to such holder’s tax basis in such lapsed Post-Closing Company public warrants and generally will be taxed as described above under “— Sale, Taxable Exchange or Other Taxable Disposition of Post-Closing Company Securities.”
Consistent with the TVA III Warrants, the Post-Closing Company public warrants may be exercised on a cashless basis in certain circumstances. The U.S. federal income tax characterization of a cashless exercise of Post-Closing Company public warrants are not clear under current tax law. A cashless exercise may not be a taxable exchange, either because the exercise is not a realization event or because the exercise is treated as a recapitalization for U.S. federal income tax purposes. If the cashless exercise is not taxable, a Non-U.S. Holder’s tax basis in the Post-Closing Company Class A common stock received would equal the Non-U.S. Holder’s tax basis in the Post-Closing Company public warrants exercised therefor. If the cashless exercise were treated as not being a realization event, it is unclear whether a Non-U.S. Holder’s holding period in the Post-Closing Company Class A common stock would be treated as commencing on the date following the date of exercise or on the date of exercise of the Post-Closing Company public warrants; in either case, the holding period would not include the Non-U.S. Holder’s holding period for the Post-Closing Company public warrants exercised therefor.
If the cashless exercise were treated as a recapitalization, the holding period of the Post-Closing Company Class A common stock would include the holding period of the Post-Closing Company public warrants exercised therefor.
It is also possible that a cashless exercise could be treated in part as a taxable exchange in which gain or loss would be recognized. In such event, a Non-U.S. Holder could be deemed to have surrendered a number of Post-Closing Company public warrants equal to the number of shares of Post-Closing Company Class A common stock having a value equal to the exercise price for the total number of Post-Closing Company public warrants to be exercised. In such case, the Non-U.S. Holder would recognize capital gain or loss with respect to the Post-Closing Company public warrants deemed surrendered in an amount equal to the difference between the fair market value of the Post-Closing Company Class A common stock that would have been received in a regular exercise of the Post-Closing Company public warrants deemed surrendered and the Non-U.S. Holder’s tax basis in the Post-Closing Company public warrants deemed surrendered. Any gain or loss recognized by a Non-U.S. Holder generally will be taxed as described above in “— Sale, Taxable Exchange or Other Taxable Disposition of Post-Closing Company Securities.” It is unclear whether a Non-U.S. Holder’s holding period for the Post-Closing Company Class A common stock would commence on the date following the date of exercise or on the date of exercise of the Post-Closing Company public warrants; in either case, the holding period would not include the Non-U.S. Holder’s holding period for the Post-Closing Company public warrants exercised therefor.
Due to the absence of authority on the U.S. federal income tax treatment of a cashless exercise, including when a Non-U.S. Holder’s holding period would commence with respect to the Post-Closing Company Class A common stock received, there can be no assurance regarding which, if any, of the alternative tax consequences and holding periods described above would be adopted by the IRS or a court of law. Accordingly, Non-U.S. Holders should consult their tax advisors regarding the tax consequences of a cashless exercise.
If the Post-Closing Company redeems Post-Closing Company public warrants for cash or if Post-Closing Company purchases Post-Closing Company public warrants in an open market transaction, such redemption or purchase generally will be treated as a taxable disposition to the Non-U.S. Holder, taxed as described above under “— Sale, Taxable Exchange or Other Taxable Disposition of Post-Closing Company Securities.”
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Non-U.S. Holders should consult their tax advisors regarding the tax consequences of the exercise, lapse, or redemption of Post-Closing Company public warrants.
Possible Constructive Distributions
Similar with the TVA III Warrants, the terms of each Post-Closing Company public warrant will provide for an adjustment to the number of shares of Post-Closing Company Class A common stock for which the Post-Closing Company public warrant may be exercised or to the exercise price of the Post-Closing Company public warrant in certain events. An adjustment which has the effect of preventing dilution generally is not a taxable event. A Non-U.S. Holder of the Post-Closing Company public warrants would, however, be treated as receiving a constructive distribution from the Post-Closing Company if, for example, the adjustment increases the Non-U.S. Holder’s proportionate interest in the Post-Closing Company’s assets or earnings and profits (for example, through an increase in the number of shares of Post-Closing Company Class A common stock that would be obtained upon exercise or through a decrease in the exercise price of the Post-Closing Company public warrant), which adjustment may be made as a result of a distribution of cash or other property, such as other securities, to the holders of shares of Post-Closing Company stock, or as a result of the issuance of a stock dividend to holders of shares of Post-Closing Company stock, in each case, which is taxable to the holders of such stock as a distribution. Any constructive distribution treated as received by a Non-U.S. Holder generally would be subject to U.S. federal income tax (including any applicable withholding) in the same manner as if such Non-U.S. Holder received a corporate distribution from Post-Closing Company equal to the fair market value of such increased interest without any corresponding receipt of cash, the U.S. federal income tax consequences of which are described above under “— Taxation of Distributions.”
Information Reporting and Backup Withholding
Information returns will be filed with the IRS in connection with payments of distributions and the proceeds from a sale or other disposition of Post-Closing Company Securities. A Non-U.S. Holder may have to comply with certification procedures to establish that it is not a U.S. person in order to avoid information reporting and backup withholding requirements. The certification procedures required to claim a reduced rate of withholding under a treaty generally will satisfy the certification requirements necessary to avoid the backup withholding as well.
Backup withholding is not an additional tax. The amount of any backup withholding from a payment to a Non-U.S. Holder generally will be allowed as a credit against such Non-U.S. Holder’s U.S. federal income tax liability and may entitle such Non-U.S. Holder to a refund, provided that the required information is timely furnished to the IRS.
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MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS OF THE MERGER
The following is a discussion of the material U.S. federal income tax consequences of the Merger to U.S. and Non-U.S. Holders (each as defined below, and together, “Holders”) of PlusAI Class A common stock who exchange in the Merger such shares of PlusAI Class A common stock for (1) Post-Closing Company Class A common stock in the Merger and (2) a contingent right to receive Earnout Shares that are shares of Post-Closing Company Class A common stock (an “Earnout Right”). This summary is based upon current provisions of the Code, existing Treasury Regulations promulgated thereunder, judicial decisions, and published rulings and administrative pronouncements of the IRS, all in effect as of the date hereof and all of which are subject to differing interpretations or change. Any such change or differing interpretation, which may be retroactive, could alter the tax consequences to PlusAI stockholders from the following summary. This discussion assumes that the Merger will be consummated in accordance with the Merger Agreement and as described in this proxy statement/prospectus.
This discussion applies only to stockholders who hold their PlusAI Class A common stock as a “capital asset” within the meaning of Section 1221 of the Code (generally, property held for investment) and does not purport to address all U.S. federal income tax consequences relevant to Holders of PlusAI Class A common stock. In addition, it does not address consequences relevant to PlusAI stockholders that are subject to particular U.S. or non-U.S. tax rules, including, without limitation, to PlusAI stockholders that are:
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PlusAI stockholders, including in particular those subject to special U.S. or non-U.S. tax rules that are described in the list above, are urged to consult their own tax advisors regarding the consequences to them of the Merger.
If a partnership or other pass-through entity (or any entity or arrangement treated as a partnership or other pass-through entity for U.S. federal income tax purposes) holds PlusAI Class A common stock, the tax treatment of such partnership or other pass-through entity and a person treated as a partner of such partnership or owner of such other pass-through entity will generally depend on the status of the partner or owner, the activities of the partnership or other pass-through entity and certain determinations made at the partner or owner level. Partnerships and other pass-through entities holding any PlusAI Class A common stock and persons that are treated as partners of such partnerships or owners of such other pass-through entities should consult their tax advisors as to the particular U.S. federal income tax consequences to them of the Merger.
In addition, the following discussion does not address: (1) the tax consequences of transactions effectuated before, after or at the same time as the Merger, whether or not they are in connection with the Merger, including, without limitation, any transactions in which shares of Post-Closing Company Class A common stock are acquired or disposed of other than in exchange for shares of PlusAI Class A common stock in the Merger; (2) the tax consequences to Holders of PlusAI Class B common stock, PlusAI SAFEs, convertible debt issued by PlusAI, PlusAI RSUs, PlusAI options or PlusAI warrants; (3) the tax consequences of the ownership of shares of Post-Closing Company Class A common stock following the Merger; (4) any U.S. federal non-income tax consequences of the Merger, including estate or gift tax consequences; (5) any state, local, non-U.S. or other tax consequences of the Merger; (6) the Medicare contribution tax on net investment income; or (7) any payment to any holders of Dissenting Shares.
Definitions of “PlusAI U.S. Holder” and “PlusAI Non-U.S. Holder”
For purposes of this discussion, a “PlusAI U.S. Holder” is a beneficial owner of PlusAI Class A common stock that for U.S. federal income tax purposes is, or is treated as:
For purposes of this discussion, a “PlusAI Non-U.S. Holder” is a beneficial owner (not including a partnership) of PlusAI Class A common stock that for U.S. federal income tax purposes is, or is treated as:
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but does not include an individual who is present in the U.S. for 183 days or more in the taxable year of disposition. If you are such an individual, you should consult your tax advisor regarding the U.S. federal income tax consequences of a Merger and whether you are treated as a resident for U.S. federal income tax purposes.
ALL HOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO THE APPLICATION OF THE U.S. FEDERAL INCOME TAX LAWS TO THEIR PARTICULAR SITUATIONS AS WELL AS ANY TAX CONSEQUENCES OF THE MERGER ARISING UNDER THE U.S. FEDERAL ESTATE OR GIFT TAX LAWS OR UNDER THE LAWS OF ANY STATE, LOCAL OR NON-U.S. TAXING JURISDICTION OR UNDER ANY APPLICABLE INCOME TAX TREATY.
General
Each of PlusAI and TVA III intends for the Merger, taken together as an integrated transaction, to qualify as a single “reorganization” pursuant to Section 368(a) of the Code. PlusAI and TVA III cannot guarantee that the IRS will not challenge the intended tax treatment of the Merger, and that such a challenge will not be successful. None of PlusAI, TVA III, Merger Sub I, or Merger Sub II intend to obtain a ruling from the IRS with respect to the tax consequences of the Merger. Further, the closing of the Merger is not conditioned upon obtaining an opinion from counsel that the Merger will qualify as a reorganization. Accordingly, no assurance can be given that the IRS will not challenge the Merger’s qualification as a “reorganization” within the meaning of Section 368(a) of the Code or that a court would not sustain such a challenge.
The following discussion assumes that the Earnout Right will be treated as consideration that can be received on a tax-deferred basis under the reorganization provisions of the Code, as opposed to taxable “boot.” If the Earnout Right is treated as taxable “boot,” the tax consequences described below could be materially different, including that both PlusAI U.S. Holders and PlusAI Non-U.S. Holders would be required to recognize gain or loss with respect to the Earnout Right, and PlusAI Non-U.S. Holders would be subject to withholding. Holders of PlusAI Class A common stock should consult their own tax advisors as to the consequences of the possible receipt of any Earnout Right, including the application of the installment sale rules.
Consequences to Holders of PlusAI Class A Common Stock if the Merger Qualifies as a Reorganization
Assuming the Merger qualifies as a “reorganization” under Section 368(a) of the Code, the U.S. federal income tax consequences of the Merger to Holders of PlusAI Class A common stock are as follows:
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Consequences to PlusAI U.S. Holders if the Merger Does Not Qualify as a Reorganization
If the Merger does not qualify as a reorganization within the meaning of Section 368(a) of the Code, then each PlusAI U.S. Holder will be treated as exchanging his, her or its PlusAI Class A common stock in a fully taxable transaction in exchange for Post-Closing Company Class A common stock and the Earnout Right. PlusAI U.S. Holders generally will recognize capital gain or loss in such exchange equal to the difference between (1) the fair market value of the Post-Closing Company Class A common stock and Earnout Right received in the Merger (subject to the potential application of the “installment method” to the Earnout Right) and (2) such U.S. Holder’s tax basis in the PlusAI Class A common stock surrendered in the Merger. Gain or loss must be calculated separately for shares of PlusAI Class A common stock acquired by PlusAI U.S. Holders at different times for different prices and exchanged by such PlusAI U.S. Holder in connection with the Merger. Any gain or loss recognized generally would be long-term capital gain or loss if the PlusAI U.S. Holder’s holding period in a particular block of PlusAI Class A common stock exceeds one year at the time of the Merger. Long-term capital gain of non-corporate PlusAI U.S. Holders (including individuals) generally is taxed at reduced U.S. federal income tax rates. The deductibility of capital losses is subject to limitations. The aggregate tax basis of a PlusAI U.S. Holder in the Post-Closing Company Class A common stock and Earnout Right received in the Merger will equal its fair market value at the Effective Time, and the holding period of Post-Closing Company Class A common stock received in the Merger will begin on the day after the consummation of the Merger.
Consequences to PlusAI Non-U.S. Holders if the Merger Does Not Qualify as a Reorganization
If the Merger does not qualify as a reorganization under Section 368(a) of the Code, PlusAI Non-U.S. Holders will generally not be subject to U.S. federal income tax in connection with the Merger, except to the extent described below.
If gain recognized upon the exchange of the PlusAI Non-U.S. Holder’s shares of PlusAI Class A common stock for shares of Post-Closing Company Class A common stock is effectively connected with the PlusAI Non-U.S. Holder’s conduct of a trade or business within the United States (and, if required by an applicable income tax treaty, the PlusAI Non-U.S. Holder maintains a permanent establishment in the United States to which such gain is attributable), such gain will be subject to U.S. federal income tax on a net income basis at the regular graduated rates applicable to U.S. Holders. A PlusAI Non-U.S. Holder that is a corporation also may be subject to a branch profits tax at a rate of 30% (or such lower rate specified by an applicable income tax treaty) on such effectively connected gain, as adjusted for certain items. In addition, if PlusAI is or has been a “United States real property holding corporation” for U.S. federal income tax purposes at any time during the shorter of the five-year period ending on the date of the Merger or the period that the PlusAI Non-U.S. Holder held PlusAI Class A common stock, any gain recognized by such Non-U.S. Holder with respect to such Non-U.S. Holder’s PlusAI Class A common stock as a result of the Merger would generally be subject to tax at applicable U.S. federal income tax rates and a U.S. federal withholding tax could apply. However, PlusAI believes that it is not, and has not been at any time since its formation, a United States real property holding corporation and neither PlusAI nor the Post-Closing Company expects to be a United States real property holding corporation immediately after the business combination is completed.
Notwithstanding the foregoing, a PlusAI Non-U.S. Holder may be subject to U.S. federal income tax (and withholding with respect thereto) for any Earnout Shares treated as imputed interest.
Information Reporting for PlusAI U.S. Holders
Each PlusAI U.S. Holder who receives shares of Post-Closing Company Class A common stock in the Merger is required to retain permanent records pertaining to the Merger, and make such records available to any authorized IRS officers and employees. Such records should specifically include information regarding the amount, basis,
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THIS SUMMARY DOES NOT TAKE INTO ACCOUNT YOUR PARTICULAR CIRCUMSTANCES AND DOES NOT ADDRESS CONSEQUENCES THAT MAY BE PARTICULAR TO YOU, INCLUDING THE EFFECT OF ANY U.S. FEDERAL, STATE, LOCAL, NON-U.S. OR OTHER TAX LAWS. THEREFORE, YOU SHOULD CONSULT YOUR TAX ADVISOR REGARDING THE PARTICULAR CONSEQUENCES OF THE MERGER TO YOU.
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Proposal No. 2 — The domestication proposal
Overview
Assuming each of the business combination proposal, organizational documents proposal, stock issuance proposal, incentive plan proposal, ESPP proposal and director election proposal, is approved, TVA III is seeking shareholder approval of the domestication proposal on a non-binding advisory basis. The approval of the domestication proposal is a condition to the Closing under the Merger Agreement. If the domestication proposal is approved, but the business combination proposal is not approved, then neither the Domestication nor the business combination will be consummated.
Under the TVA III Articles, a transfer by way of continuation requires the approval of a special resolution. However, pursuant to the TVA III Articles, prior to the closing of a business combination, only holders of TVA III Class B Ordinary Shares have the right to vote on any resolution to approve a transfer by way of continuation (including any special resolution required to amend or adopt new constitutional documents in connection therewith). Since holders of TVA III Class A Ordinary Shares have no right to vote on the continuation under the TVA III Articles the domestication proposal and the organizational documents proposal are therefore being presented to all TVA III shareholders (TVA III Class A Ordinary Shares and TVA III Class B Ordinary Shares, voting together) on a non-binding advisory basis only.
As a condition to Closing, the TVA III Board has unanimously approved the Domestication subject to shareholders approving the domestication proposal. To effect the Domestication, TVA III will file an application to deregister with the Cayman Islands Registrar of Companies, together with the necessary accompanying documents, and file the Proposed Certificate of Incorporation and a certificate of corporate domestication with the Secretary of State of the State of Delaware, under which TVA III will be domesticated and continue as a Delaware corporation. In connection with the Domestication and prior to the business combination, TVA III will be renamed “PlusAI Holdings, Inc.”
The domestication proposal, if approved, will authorize the transfer of TVA III by way of continuation out of the Cayman Islands and domestication as a corporation incorporated under the laws of the State of Delaware. Accordingly, while TVA III is currently governed by the Companies Act, upon the Domestication, PlusAI will be governed by the DGCL. TVA III encourages shareholders to carefully consult the information set out under “Comparison of Shareholder Rights.”
Reasons for the Domestication
The TVA III Board believes that it would be in the best interests of TVA III, in connection with the completion of the business combination, to effect the Domestication. Further, the TVA III Board believes that any direct benefit that the DGCL provides to a corporation also indirectly benefits its shareholders, who are the owners of the corporation. Because PlusAI will operate within the United States following the business combination, it is the view of the TVA III Board that PlusAI should be structured as a corporation organized in the United States.
The TVA III Board believes that there are several reasons why a reincorporation in Delaware is in the best interests of TVA III and its shareholders.
These additional reasons can be summarized as follows:
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The frequency of claims and litigation pursued against directors and officers has greatly expanded the risks facing directors and officers of corporations in carrying out their respective duties. The amount of time and money required to respond to such claims and to defend such litigation can be substantial. While both Cayman Islands and Delaware law permit a corporation to include a provision in its governing documents to reduce or eliminate the monetary liability of directors for breaches of fiduciary duty in certain circumstances, we believe that, in general, Delaware law is more developed and provides more guidance than Cayman Islands law on matters regarding a company’s ability to limit director liability. As a result, we believe that the corporate environment afforded by Delaware will enable PlusAI to compete more effectively with other public companies in attracting and retaining new directors.
Reasons for the Name Change
The TVA III Board believes that it would be in the best interests of TVA III to, in connection with the Domestication and the business combination, change its corporate name to “PlusAI Holdings, Inc.” in order to more accurately reflect the business purpose and activities of PlusAI.
Regulatory Approvals; Third-Party Consents
TVA III is not required to make any filings or to obtain any approvals or clearances from any antitrust regulatory authorities in the United States or other countries in order to complete the Domestication. However, because the Domestication must occur in connection with the business combination, it will not occur unless the business combination can be completed, which will require the approvals as described under the section of this proxy statement/prospectus entitled “Proposal No. 1 – The Business Combination Proposal.” TVA III must comply with applicable U.S. federal and state securities laws in connection with the Domestication.
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The Domestication will not breach any covenants or agreements binding upon TVA III and will not be subject to any additional federal or state regulatory requirements, except compliance with the laws of the Cayman Islands and Delaware necessary to effect the Domestication.
Proposed Certificate of Incorporation and Proposed Bylaws
Commencing with the effective time of the Domestication, the DGCL, the Proposed Certificate of Incorporation and the Proposed Bylaws will govern the rights of stockholders in PlusAI.
Comparison of Shareholder Rights under Applicable Corporate Law Before and After Domestication
When the Domestication is completed, the rights of stockholders of TVA III will be governed by Delaware law, including the DGCL, rather than by the laws of the Cayman Islands. Certain differences exist between the DGCL and the Companies Act that will alter certain of the rights of shareholders of TVA III and affect the powers of the TVA III Board and management following the Domestication.
Shareholders should consider the following summary comparison of the laws of the Cayman Islands, on the one hand, and the DGCL, on the other. This comparison is not intended to be complete and is qualified in its entirety by reference to the DGCL and the Companies Act.
The owners of a Delaware corporation’s shares are referred to as “stockholders.” For purposes of language consistency, in certain sections of this proxy statement/prospectus, we may continue to refer to the share owners of TVA III as “shareholders.”
Provision |
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Delaware |
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Cayman Islands |
Applicable legislation |
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General Corporation Law of the State of Delaware |
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The Companies Act (As Revised) of the Cayman Islands |
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General Vote Required for Combinations with Interested Stockholders/Shareholders |
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Generally, a corporation may not engage in a business combination with an interested stockholder for a period of three years after the time of the transaction in which the person became an interested stockholder, unless the corporation opts out of the statutory provision or the other statutory exceptions are met. |
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No similar provision |
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Appraisal Rights |
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Generally, a stockholder of a publicly traded corporation does not have appraisal rights in connection with a merger. Stockholders of a publicly traded corporation do, however, generally have appraisal rights in connection with a merger if they are required by the terms of a merger agreement to accept for their shares anything except: (1) shares or depository receipts of the corporation surviving or resulting from such merger; (2) shares of stock or depository receipts that will be either listed on a national securities exchange or held of record by more than 2,000 holders; (3) cash in lieu of fractional shares or fractional depository receipts described in (1) and (2) above; or (4) any combination of the shares of stock, depository receipts and cash in lieu of fractional shares or fractional |
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Under the Companies Act, and subject to certain exceptions, shareholders that dissent to a statutory merger to which the company is a constituent party (under Part XVI of the Companies Act) are entitled to be paid the fair market value of their shares, which, if necessary, may ultimately be determined by the courts of the Cayman Islands. |
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Provision |
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depository receipts described in (1), (2) and (3) above. |
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Requirements for Stockholder/ Shareholder Approval |
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Subject to the certificate of incorporation, stockholder approval of mergers, a sale of all or substantially all the assets of the corporation, dissolution and amendments of constitutional documents generally require approval by a majority of the voting power of the outstanding shares; unless otherwise specified in the corporation’s certificate of incorporation or bylaws, most other stockholder approvals require the affirmative vote of a majority of the shares present and entitled to vote on the subject matter, provided a quorum is present. The Proposed Bylaws will provide that except as otherwise provided by law, the Proposed Certificate of Incorporation, the Proposed Bylaws or the rules of any applicable stock exchange on which the Post-Closing Company’s securities are listed, in all matters other than the election of directors, the affirmative vote of a majority of the voting power of the shares cast affirmatively or negatively will be the act of the stockholders. |
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Certain matters must be approved by special resolution of the shareholders as a matter of Cayman Islands law, including alteration of the memorandum or articles of association, appointment of inspectors to examine company affairs, reduction of share capital (subject, in relevant circumstances, to court approval), change of name, authorization of a plan of merger (other than a merger between a parent and a subsidiary), authorization of a transfer by way of continuation to another jurisdiction or consolidation or voluntary winding up of the company. The Companies Act requires that a special resolution be passed by a majority of at least two-thirds or such higher percentage as set forth in the memorandum and articles of association, of shareholders being entitled to vote and do vote in person or by proxy at a general meeting, or by unanimous written consent of shareholders entitled to vote at a general meeting. The Companies Act defines “special resolutions” only. A company’s memorandum and articles of association can therefore tailor the definition of "ordinary resolutions" as a whole, or with respect to specific provisions. Under our amended and restated articles of association an ordinary resolution must be passed at a general meeting by a simple majority of shareholders who (being entitled to do so) vote in person or by proxy at that meeting. The expression includes a unanimous written resolution. |
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Provision |
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Delaware |
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Cayman Islands |
Requirement for Quorum |
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Quorum is a majority of the voting power of shares entitled to vote and present at the meeting unless otherwise set in the constitutional documents, but cannot be less than one-third of the voting power of the shares entitled to vote at the meeting. The Proposed Bylaws will provide that the holders of a majority of the voting power of Post-Closing Company’s capital stock issued and outstanding and entitled to vote at a meeting of stockholders, present in person or represented by proxy, will constitute a quorum for the transaction of business at all meetings of the stockholders, unless otherwise required by law, the Proposed Certificate of Incorporation, the Proposed Bylaws or the rules of any applicable stock exchange on which Post-Closing Company’s securities are listed. |
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Quorum is set in the company’s memorandum and articles of association. |
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Stockholder/Shareholder Consent to Action Without Meeting |
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Unless otherwise provided in the certificate of incorporation, stockholders may act by written consent. The Proposed Certificate of Incorporation will provide that subject to the rights of holders of Post-Closing Company preferred stock, any action required or permitted to be taken by stockholders must be effected at a duly called annual or special meeting of stockholders and may not be effected by any consent in writing by such stockholders. |
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A company's articles of association may allow shareholders to pass special and ordinary resolutions in writing. Special resolutions passed in writing must be approved by all the members entitled to vote at a general meeting of the company. Ordinary resolutions passed in writing may be approved by such number of shareholders as prescribed by the company's articles of association. |
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Inspection of Books and Records |
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Any stockholder may inspect certain of the corporation’s books and records for a proper purpose during the usual hours for business. |
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Shareholders of Cayman Islands exempted companies have no general rights under Cayman Islands law to inspect corporate records or to obtain copies of lists of shareholders of these companies (other than copies of their memorandum and articles of association, register of mortgages and charges, and any special resolutions). Under Cayman Islands law, the names of an exempted company's current directors can be obtained from a search conducted at the Registrar of Companies. |
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Provision |
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Delaware |
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Cayman Islands |
Stockholder/Shareholder Lawsuits |
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A stockholder may bring a derivative suit subject to procedural requirements. |
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In the Cayman Islands, the decision to institute proceedings on behalf of a company is generally taken by the company’s board of directors. A shareholder may be entitled to bring a derivative action on behalf of the company only in certain limited circumstances (e.g., where a company acts or proposes to act illegally or ultra vires (beyond the scope of its authority); the act complained of, although not ultra vires, could be effected if duly authorized by a special resolution that has not been obtained; and those who control the company are perpetrating a “fraud on the minority”). |
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Removal of Directors |
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Any director or the entire board may be removed, with or without cause, by the holders of a majority of the shares then entitled to vote at an election of directors, except as follows: (1) unless the certificate of incorporation otherwise provides, in the case of a corporation with a classified board, stockholders may effect such removal only for cause; or (2) in the case of a corporation having cumulative voting, if less than the entire board is to be removed, no director may be removed without cause if the votes cast against such director’s removal would be sufficient to elect such director if then cumulatively voted at an election of the entire board. For so long as the Post-Closing Company Board will be classified after the Closing and subject to the rights of holders of Post-Closing Company preferred stock, pursuant to the Proposed Certificate of Incorporation, a director may be removed from office only for cause and only by the affirmative vote of at least a majority of the total voting power of the outstanding shares of capital stock of the corporation entitled to vote on the election of directors, voting together as a single class. |
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A company’s memorandum and articles of association may provide that a director may be removed for any or no reason and that, in addition to shareholders, boards may be granted the power to remove a director. |
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Provision |
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Delaware |
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Cayman Islands |
Number of Directors |
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The number of directors is fixed by the bylaws, unless the certificate of incorporation fixes the number of directors, in which case a change in the number of directors shall be made only by amendment of the certificate of incorporation. The bylaws may provide that the board may increase the size of the board and fill any vacancies. |
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Subject to the memorandum and articles of association, the board may increase the size of the board and fill any vacancies. |
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Classified or Staggered Boards |
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Classified boards are permitted. |
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Classified boards are permitted. |
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Fiduciary Duties of Directors |
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Directors must exercise a duty of care and duty of loyalty, including good faith to the corporation and its stockholders. |
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A Cayman Islands director’s fiduciary duties are not codified, however the courts of the Cayman Islands have held that a director owes the following fiduciary duties (a) a duty to act in what the director bona fide considers to be in the best interests of the company, (b) a duty to exercise their powers for the purposes they were conferred, (c) a duty to avoid fettering his or her discretion in the future and (d) a duty to avoid conflicts of interest and of duty. |
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Indemnification of Directors and Officers |
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A corporation is generally permitted to indemnify any person who was or is a party to any proceeding because such person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another entity against expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred if the person acted in good faith and in a manner reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal proceeding, had no reasonable cause to believe their conduct was unlawful. If the action was brought by or on behalf of the corporation, no indemnification is made for judgments, fines or amounts paid in settlement, and no indemnification shall be made in respect of expenses when a person is adjudged liable to the corporation unless a court determines such person is fairly and reasonably entitled to indemnity for expenses the court deems proper. |
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Cayman Islands law does not limit the extent to which a company’s memorandum and articles of association may provide for indemnification of directors and officers, except to the extent any such provision may be held by the Cayman Islands courts to be contrary to public policy, such as to provide indemnification against the consequences of committing a crime, or against the indemnified person’s own fraud or dishonesty |
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Limited Liability of Directors and Officers |
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Permits the limiting or eliminating of the monetary liability of a director or officer to a |
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Provision |
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corporation or its stockholders, except with regard to breaches of duty of loyalty, acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, or for any transaction involving an improper personal benefit, or for directors involving unlawful stock repurchases or dividends, or for officers involving any action by or in the right of the corporation. |
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company’s memorandum and articles of association may limit the liability of directors and officers, except to the extent any such provision may be held by the Cayman Islands courts to be contrary to public policy, such as limiting liability for civil fraud or the consequences of committing a crime |
Accounting Treatment of the Domestication
The Domestication is being proposed solely for the purpose of changing the legal domicile of TVA III. There will be no accounting effect or change in the carrying amount of the assets and liabilities of TVA III as a result of the Domestication. The business, capitalization, assets and liabilities and financial statements of TVA III immediately following the Domestication will be the same as those immediately prior to the Domestication.
Vote Required for Approval
Pursuant to the TVA III Articles, a transfer by way of continuation requires the approval of a special resolution. However, prior to the closing of a Business Combination, only holders of TVA III Class B Ordinary Shares have the right to vote on any resolution to approve a transfer by way of continuation. The domestication proposal is being sent for approval by special resolution, being the affirmative vote of holders of at least two-thirds of the TVA III Ordinary Shares represented at the extraordinary general meeting by attendance via the virtual meeting website, in person or by proxy and entitled to vote at the extraordinary general meeting, voting together as a single class.
Abstentions and broker non-votes, while considered present for the purposes of establishing a quorum, will not count as votes cast at the extraordinary general meeting and will therefore have no effect on the domestication proposal.
The domestication proposal is conditioned on the approval of the other condition precedent proposals. The approval of the domestication proposal is a condition to the Closing under the Merger Agreement. If the domestication proposal is approved, but the business combination proposal is not approved, then neither the Domestication nor the business combination will be consummated.
As of the date of this proxy statement/prospectus, pursuant to the terms of the Sponsor Support Agreement, the Sponsor and the Insiders have each agreed to vote their, and to cause the Sponsor Affiliate to vote its, TVA III Ordinary Shares, including TVA III Class B Ordinary Shares and any TVA III public shares held by them as of the TVA III Record Date, in favor of the domestication proposal. As of the TVA III Record Date, the Sponsor and the Sponsor Affiliate together own 28.5% of the issued and outstanding TVA III Ordinary Shares.
Resolution to be Voted Upon
The full text of the resolution to be passed is as follows:
“RESOLVED, as a special resolution, that the domestication proposal (as such term is defined in TVA III’s proxy statement/prospectus dated , 2026), be approved, ratified and confirmed in all respects.”
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Recommendation of the TVA III Board
THE TVA III BOARD UNANIMOUSLY RECOMMENDS THAT TVA III SHAREHOLDERS VOTE “FOR” THE APPROVAL OF THE DOMESTICATION PROPOSAL.
When you consider the TVA III Board’s recommendation of these proposals, you should keep in mind that our directors and officers, as well as the Sponsor, have interests in the Transactions that are different from, or in addition to, the interests of TVA III shareholders generally. Please see the section entitled “Proposal No. 1 — The Business Combination Proposal — Interests of Certain TVA III Persons in the Business Combination” for additional information.
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PROPOSAL NO. 3 — THE ORGANIZATIONAL DOCUMENTS PROPOSAL
Overview
Assuming each of the condition precedent proposals are approved, TVA III will become domesticated as a corporation under the laws of the State of Delaware and, as a result, replace TVA III’s current memorandum and articles of association with the Proposed Certificate of Incorporation and the Proposed Bylaws, in each case, in accordance with the DGCL. Under the Merger Agreement, approval of the organizational documents proposal is a condition to the Closing.
TVA III is seeking approval, by special resolution, of the organizational documents proposal in connection with the replacement of TVA III’s current memorandum and articles of association. The Proposed Certificate of Incorporation and the Proposed Bylaws differ materially from the TVA III Articles. The following is a summary of the key changes effected by the Proposed Certificate of Incorporation and the Proposed Bylaws, which summary is qualified in its entirety by reference to the full text of the Proposed Certificate of Incorporation, a copy of which is included as Annex B to this proxy statement/prospectus, and by reference to the full text of the Proposed Bylaws, a copy of which is included as Annex C to this proxy statement/prospectus. References to PlusAI below refer to the Post-Closing Company.
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All shareholders are encouraged to read each of the Proposed Certificate of Incorporation and the Proposed Bylaws in its entirety for a more complete description of its terms. Additionally, as the TVA III Articles are governed by the Companies Act and the Proposed Certificate of Incorporation and the Proposed Bylaws will be governed by the DGCL, we encourage shareholders to carefully consult the information set out under the section entitled “Comparison of Shareholder Rights” of this proxy statement/prospectus.
Vote Required for Approval
Under the TVA III Articles, amending the constitutional documents of TVA III or adopting new constitutional documents as a result of a transfer by way of continuation in a jurisdiction outside the Cayman Islands requires a special resolution, but only holders of TVA III Class B Ordinary Shares have the right to vote on such a resolution prior to the closing of a business combination. Accordingly, the approval of the organizational documents proposal is being sent for approval by special resolution, being the affirmative vote of holders of at least two-thirds of the TVA III Ordinary Shares represented at the extraordinary general meeting by attendance via the virtual meeting website, in person or by proxy and entitled to vote at the extraordinary general meeting, voting together as a single class.
Abstentions and broker non-votes, while considered present for the purposes of establishing a quorum, will not count as votes cast at the extraordinary general meeting and will therefore have no effect on the organizational documents proposal.
The organizational documents proposal is conditioned on the approval of each of the other condition precedent proposals. Therefore, if any of such other proposals are not approved, the organizational documents proposal will have no effect, even if approved by the requisite holders of TVA III Ordinary Shares.
As of the date of this proxy statement/prospectus, pursuant to the terms of the Sponsor Support Agreement, the Sponsor and the Insiders have each agreed to vote their, and to cause the Sponsor Affiliate to vote its, TVA III Ordinary Shares, including TVA III Class B Ordinary Shares and any TVA III public shares held by them as of the TVA III Record Date, in favor of the organizational documents proposal. As of the TVA III Record Date, the Sponsor and the Sponsor Affiliate together own 28.5% of the issued and outstanding TVA III Ordinary Shares.
Resolution to be Voted Upon
The full text of the resolution to be passed is as follows:
“RESOLVED, as a special resolution, that the organizational documents proposal (as such terms are defined in TVA III’s proxy statement/prospectus dated , 2026) be approved and adopted.”
Recommendation of the TVA III Board
THE TVA III BOARD UNANIMOUSLY RECOMMENDS THAT TVA III SHAREHOLDERS VOTE “FOR” THE APPROVAL OF THE ORGANIZATIONAL DOCUMENTS PROPOSAL.
When you consider the TVA III Board’s recommendation of these proposals, you should keep in mind that our directors and officers, as well as the Sponsor, have interests in the Transactions that are different from, or in addition to, the interests of TVA III shareholders generally. Please see the section entitled “Proposal No. 1 — The Business Combination Proposal — Interests of Certain TVA III Persons in the Business Combination” for additional information.
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PROPOSAL NO. 4 — THE Advisory organizational documents proposal
Overview
Assuming each of the condition precedent proposals are approved, TVA III will become domesticated as a corporation under the laws of the State of Delaware and, as a result, replace TVA III’s current memorandum and articles of association with the Proposed Certificate of Incorporation and the Proposed Bylaws, in each case, in accordance with the DGCL.
TVA III is seeking approval of the advisory organizational documents proposal in connection with the replacement of TVA III’s current memorandum and articles of association with the Proposed Certificate of Incorporation and the Proposed Bylaws. These five proposals are being presented separately in accordance with SEC guidance to give shareholders the opportunity to present their separate views on important corporate governance provisions and will be voted upon on a non-binding advisory basis. This separate vote is not otherwise required by Cayman Islands or Delaware law, but pursuant to SEC guidance, TVA III is required to submit these provisions to its shareholders separately for approval. The shareholder votes regarding these proposals are advisory in nature, and are not binding on TVA III, the TVA III Board, PlusAI or the PlusAI Board. Furthermore, the business combination is not conditioned on the separate approval of the advisory organizational documents proposal (separate and apart from the approval of the organizational documents proposal). Accordingly, regardless of the outcome of the non-binding advisory vote on these proposals, TVA III intends that the Proposed Certificate of Incorporation and the Proposed Bylaws will take effect from the Domestication, assuming approval of each of the condition precedent proposals.
All shareholders are encouraged to read each of the Proposed Certificate of Incorporation and the Proposed Bylaws in its entirety for a more complete description of its terms. Additionally, as the TVA III Articles are governed by the Companies Act and the Proposed Certificate of Incorporation and the Proposed Bylaws will be governed by the DGCL, we encourage shareholders to carefully consult the information set out under the section entitled “Comparison of Shareholder Rights” of this proxy statement/prospectus. References to PlusAI below are to the Post-Closing Company.
Reasons for the Amendments
Advisory organizational documents proposal 4A - Authorized Shares
The principal purpose of this proposal is to provide for an authorized capital structure of PlusAI that will enable it to continue as an operating company governed by the DGCL. The TVA III Board believes that it is important for TVA III to have available for issuance a number of authorized shares of common stock and preferred stock of the Post-Closing Company sufficient to support growth and to provide flexibility for future corporate needs.
As of the TVA III Record Date, there are 30,000,000 TVA III Ordinary Shares issued and outstanding, which includes 22,500,000 TVA III Class A Ordinary Shares and 7,500,000 TVA III Class B Ordinary Shares. As of the TVA III Record Date, there are an aggregate of 15,949,995 TVA III Warrants outstanding, which includes 4,700,000 TVA III Private Placement Warrants and 11,249,995 TVA III Public Warrants.
The TVA III Board will approve, subject to shareholder approval, that the Proposed Certificate of Incorporation and the Proposed Bylaws change the authorized capital stock of TVA III from 500,000,000 TVA III Class A Ordinary Shares, 50,000,000 TVA III Class B Ordinary Shares, and 5,000,000 TVA III Preference Shares to (1) shares of Post-Closing Company common stock (consisting of (a) 1,000,000,000 shares of Post-Closing Company Class A common stock, (b) shares of Post-Closing Company Class B common stock, and (c) shares of Post-Closing Company Class B common stock) and (2) 100,000,000 shares of Post-Closing Company preferred stock.
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Advisory organizational documents proposal 4B - Exclusive Forum Provision
Adopting Delaware as the exclusive forum for certain litigation is intended to assist PlusAI in avoiding multiple lawsuits in multiple jurisdictions regarding the same matter. The ability to require such claims to be brought in a single forum will help to assure consistent consideration of the issues, the application of a relatively known body of case law and level of expertise and should promote efficiency and cost-savings in the resolutions of such claims. The TVA III Board believes that the Delaware courts are best suited to address disputes involving such matters given that, after the Domestication, PlusAI will be incorporated in Delaware. Delaware law generally applies to such matters and the Delaware courts have a reputation for expertise in corporate law matters. Delaware offers a specialized Court of Chancery to address corporate law matters, with streamlined procedures and processes, which help provide relatively quick decisions. This accelerated schedule can minimize the time, cost and uncertainty of litigation for all parties. The Court of Chancery has developed considerable expertise with respect to corporate law issues, as well as a substantial and influential body of case law construing Delaware’s corporate law and long-standing precedent regarding corporate governance. This provides stockholders of PlusAI and PlusAI with more predictability regarding the outcome of intra-corporate disputes. In the event the Court of Chancery does not have jurisdiction, the other state courts or the federal district court of the United States located in Delaware would be the most appropriate forums because these courts have more expertise on matters of Delaware law compared to other jurisdictions.
The TVA III Board further believes that providing that the federal district courts of the United States will be the exclusive forum for resolving actions arising under the Securities Act, provides the flexibility to file such suits in any federal district court while providing the benefits of eliminating duplicative litigation and having such cases heard by courts that are well-versed in the applicable law. Nothing in the Proposed Bylaws will preclude stockholders that assert claims under the Exchange Act from bringing such claims in federal court, subject to applicable law.
The TVA III Board further believes that the Proposed Certificate of Incorporation and the Proposed Bylaws providing for such exclusive forum would promote judicial fairness and avoid conflicting results, as well as make PlusAI’s defense of applicable claims less disruptive and more economically feasible, principally by avoiding duplicative discovery.
Advisory organizational documents proposal 4C - Removal of Directors
The TVA III MAA provide that prior to the closing of the initial business combination, the holders of TVA III Class B Ordinary Shares shall have the exclusive right to elect and remove any director, and the holders of TVA III Class A Ordinary Shares shall have no right to vote on the election or removal of any director. Subject to applicable law and the rights of holders of Post-Closing Company preferred stock, the Proposed Certificate of Incorporation and the Proposed Bylaws permit the removal of a director only for cause and only by the affirmative vote of the holders of a majority of the total voting power of all then issued and outstanding shares of PlusAI capital stock entitled to vote in the election of directors, voting as a single class. The TVA III Board believes that such a standard will (1) increase board continuity and the likelihood that experienced board members with familiarity of PlusAI’s business operations would serve on the board at any given time and (2) make it more difficult for a potential acquirer or other person, group or entity to gain control of the PlusAI Board.
Advisory organizational documents proposal 4D - Action by Written Consent of Stockholders
Under the Proposed Certificate of Incorporation and Proposed Bylaws, PlusAI’s stockholders will have the ability to propose items of business and nominations of persons for election to the PlusAI Board (subject to the restrictions set forth therein) at duly convened stockholder meetings. The Proposed Certificate of Incorporation and the Proposed Bylaws require that any action taken by the stockholders be effected at an annual or special meeting of the stockholders and prohibit stockholder action by written consent in lieu of a meeting.
The TVA III Board believes that eliminating the right of stockholders to act by written consent is appropriate to limit the circumstances under which stockholders can act on their own initiative to, among other things, alter or amend the Proposed Bylaws outside of a duly called special or annual meeting of the stockholders of PlusAI.
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The elimination of the stockholders’ ability to act by written consent may have certain anti-takeover effects by forcing a potential acquirer to take control of the PlusAI Board only at duly called special or annual meetings. Inclusion of these provisions in the Proposed Certificate of Incorporation and the Proposed Bylaws might also increase the likelihood that a potential acquirer would negotiate the terms of any proposed transaction with the PlusAI Board and help protect stockholders from the use of abusive and coercive takeover tactics.
Advisory organizational documents proposal 4E - Adoption of Supermajority Vote Requirement to Amend the Proposed Certificate of Incorporation and the Proposed Bylaws
The TVA III Articles provide that amendments may be made by a special resolution, being the affirmative vote of holders of at least two-thirds of the TVA III Ordinary Shares represented at the extraordinary general meeting in person or by proxy and entitled to vote at the extraordinary general meeting, voting together as a single class. The Proposed Certificate of Incorporation requires the PlusAI Board, acting pursuant to a resolution adopted by a majority of the directors then serving on the PlusAI Board, and the affirmative vote of at least two-thirds of the voting power of the outstanding PlusAI voting securities entitled to vote thereon, voting together as a single class, to amend, repeal, or modify Section 3 of Article IV, Section 2 of Article V, Section 1 of Article VI, Section 2 of Article VI, Section 5 of Article VII, Section 1 of Article VIII, Section 2 of Article VIII, Section 3 of Article VIII or Article XI of the Proposed Certificate of Incorporation.
The Proposed Bylaws require the affirmative vote of at least two-thirds of the voting power of the outstanding PlusAI voting securities entitled to vote thereon, voting together as a single class, for stockholders to alter, amend or repeal, or adopt any bylaw inconsistent with, the following provisions of the Proposed Bylaws: Article II, Section 3.1, Section 3.2, Section 3.4, Section 3.11, Section 6.8, Article VIII, Section 9.5 or Article X.
The amendments are intended to protect the Proposed Certificate of Incorporation and the Proposed Bylaws from arbitrary amendment and to prevent a simple majority of stockholders from taking actions that may be harmful to other stockholders or making changes to provisions that are intended to protect all stockholders.
The foregoing summaries are qualified by reference to the complete text of the Proposed Certificate of Incorporation and the Proposed Bylaws, copies of which are attached to this proxy statement/prospectus as Annex B and Annex C. All shareholders are encouraged to read the Proposed Certificate of Incorporation and the Proposed Bylaws in their entirety for a more complete description of their terms.
Vote Required for Approval
The approval of the advisory organizational documents proposal requires an ordinary resolution, being the affirmative vote of a simple majority of the votes cast by holders of outstanding TVA III Ordinary Shares represented at the extraordinary general meeting by attendance via the virtual meeting website, in person or by proxy and entitled to vote at the extraordinary general meeting, voting together as a single class. Abstentions and broker non-votes, while considered present for the purposes of establishing a quorum, will not count as votes cast at the extraordinary general meeting and otherwise will have no effect on this proposal.
The advisory organizational documents proposal is conditioned on the approval of each of the condition precedent proposals. Therefore, if any of the condition precedent proposals is not approved, the advisory organizational documents proposals will have no effect, even if approved by the requisite holders of TVA III Ordinary Shares.
As of the date of this proxy statement/prospectus, pursuant to the terms of the Sponsor Support Agreement, the Sponsor and the Insiders have each agreed to vote their, and to cause the Sponsor Affiliate to vote its, TVA III Ordinary Shares, including TVA III Class B Ordinary Shares and any TVA III public shares held by them as of the TVA III Record Date, in favor of the advisory organizational documents proposal. As of the TVA III Record Date, the Sponsor and the Sponsor Affiliate together own 28.5% of the issued and outstanding TVA III Ordinary Shares.
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Resolution to be Voted Upon
The full text of the resolution to be passed is as follows:
“RESOLVED, as an ordinary resolution, that on an advisory non-binding basis, the advisory organizational documents proposal (as such term is defined in TVA III’s proxy statement/prospectus dated , 2026), be approved and adopted.”
Recommendation of the TVA III Board
THE TVA III BOARD UNANIMOUSLY RECOMMENDS THAT TVA III SHAREHOLDERS VOTE “FOR” THE APPROVAL OF THE ADVISORY ORGANIZATIONAL DOCUMENTS PROPOSAL.
When you consider the TVA III Board’s recommendation of these proposals, you should keep in mind that our directors and officers, as well as the Sponsor, have interests in the Transactions that are different from, or in addition to, the interests of TVA III shareholders generally. Please see the section entitled “Proposal No. 1 — The Business Combination Proposal — Interests of Certain TVA III Persons in the Business Combination” for additional information.
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proposal no. 5 — the stock issuance proposal
Overview
Assuming each of the other condition precedent proposals are approved, TVA III is seeking shareholder approval, by ordinary resolution, of the stock issuance proposal.
Why TVA III Needs Shareholder Approval
TVA III is seeking shareholder approval in order to comply with Nasdaq Listing Rule 5635(a), (b), (c) and (d), as applicable.
Under Nasdaq Listing Rule 5635(a), shareholder approval is required prior to the issuance of securities in connection with the acquisition of another company if such securities are not issued in a public offering and (1) have, or will have upon issuance, voting power equal to or in excess of 20% of the voting power outstanding before the issuance of common stock (or securities convertible into or exercisable for common stock); or (2) the number of shares of common stock to be issued is or will be equal to or in excess of 20% of the number of shares of common stock outstanding before the issuance of the stock or securities.
Under Nasdaq Listing Rule 5635(b), shareholder approval is required prior to the issuance of securities when the issuance or potential issuance will result in a “change of control” of the issuer. Although Nasdaq has not adopted any rule on what constitutes a “change of control” for purposes of Rule 5635(b), Nasdaq has previously indicated that the acquisition of, or right to acquire, by a single investor or affiliated investor group, as little as 20% of the common stock (or securities convertible into or exercisable for common stock) or voting power of an issuer could constitute a change of control.
Under Nasdaq Listing Rule 5635(c), shareholder approval is required prior to the issuance of securities when a plan or other equity compensation arrangement is established or materially amended.
Under Nasdaq Listing Rule 5635(d), shareholder approval is required for a transaction other than a public offering involving the sale, issuance or potential issuance by an issuer of common stock (or securities convertible into or exercisable for common stock) at a price that is less than the greater of book or market value of the stock if the number of shares of common stock to be issued is or may be equal to 20% or more of the common stock, or 20% or more of the voting power, outstanding before the issuance.
Upon the consummation of the business combination and the Domestication, the Post-Closing Company expects to issue up to an estimated 175,658,908 shares of Post-Closing Company Class A common stock, including (1) shares to be issued to the existing securityholders of PlusAI at the Closing (including shares to be issued immediately prior to Closing pursuant to the Share Issuance Agreements in connection with the Convertible Notes and the PIPE Investment), (2) the PIPE Shares to be issued at the Closing in the PIPE Investment, (3) the shares to be issued to CCM at the Closing in satisfaction of the equity portion of the Advisory Fee and (4) following the Closing, shares to be issued upon (a) the exercise of PlusAI options or PlusAI RSUs assumed by the Post-Closing Company under the Merger Agreement, (b) the exercise of Post-Closing Company assumed warrants, (c) the conversion of shares of Post-Closing Company Class B common stock and Post-Closing Company Class C common stock, (d) the issuance of Post-Closing Company Class A common stock upon conversion or exercise, as applicable, of Convertible Notes and PIPE Warrants, and (e) the issuance of any Earnout Shares upon an Earnout Triggering Event. Additionally, the Post-Closing Company may issue additional shares of Post-Closing Company Class A common stock and/or securities convertible into or exercisable for Post-Closing Company Class A common stock pursuant to one or more financings or Strategic Commercial Transactions it may enter into prior to Closing. Because the number of shares of Post-Closing Company Class A common stock and/or securities convertible into or exercisable for Post-Closing Company Class A common stock, as applicable, that TVA III anticipates issuing as consideration in the business combination and any additional financings or Strategic Commercial Transactions will constitute more than 20% of the outstanding TVA III Ordinary Shares and more than 20% of outstanding voting power prior to such issuance, TVA III would be required to obtain shareholder approval of such issuance pursuant to Nasdaq Listing Rules 5635(a), (b) and (d) if PlusAI is to be listed on Nasdaq
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and maintain such listing after the business combination. For example, in March 2026, TRATON and PlusAI entered into an Autonomy Acceleration Program Agreement to expand their global partnership to accelerate autonomous truck commercialization, which contemplates that TRATON will receive warrants to purchase up to 7,500,000 shares of Post-Closing Company Class A common stock at an exercise price of $11.50 per share. For additional information, see the section of this proxy statement/prospectus titled “PlusAI’s Management’s Discussion and Analysis of Financial Condition and Results of Operations—Significant Events and Transactions—Expanded TRATON Partnership.” As of the date of this proxy statement/prospectus, no binding agreement has been executed with respect to any additional financings or additional Strategic Commercial Transaction and there can be no assurances that any additional financings or additional Strategic Commercial Transaction will be consummated.
If the Nasdaq Proposal is approved, TVA III will issue up to 175,658,908 shares of Post-Closing Company Class A common stock upon consummation of the business combination and the Domestication, as described above and may issue additional shares of Post-Closing Company Class A common stock and/or securities convertible into or exercisable for Post-Closing Company Class A common stock pursuant to any additional financings or additional Strategic Commercial Transactions.
The issuance of such shares would result in significant dilution to the pre-closing TVA III shareholders and result in TVA III’s shareholders having a smaller percentage interest in the voting power, liquidation value and aggregate book value of the Post-Closing Company.
Vote Required for Approval
The approval of the stock issuance proposal requires an ordinary resolution, being the affirmative vote of a simple majority of the votes cast by holders of outstanding TVA III Ordinary Shares represented at the extraordinary general meeting by attendance via the virtual meeting website, in person or by proxy and entitled to vote at the extraordinary general meeting, voting together as a single class. Abstentions and broker non-votes, while considered present for the purposes of establishing a quorum, will not count as votes cast at the extraordinary general meeting and otherwise will have no effect on this proposal.
The stock issuance proposal is conditioned on the approval of each of the other condition precedent proposals. Therefore, if any of such other proposals are not approved, the stock issuance proposal will have no effect, even if approved by the requisite holders of TVA III Ordinary Shares. If any of those proposals are not approved at the extraordinary general meeting (or any adjournment or postponement thereof), then unless certain conditions in the Merger Agreement are waived by the applicable parties to the Merger Agreement, the Merger Agreement may be terminated and the business combination may not be consummated.
As of the date of this proxy statement/prospectus, pursuant to the terms of the Sponsor Support Agreement, the Sponsor and the Insiders have each agreed to vote their, and to cause the Sponsor Affiliate to vote its, TVA III Ordinary Shares, including TVA III Class B Ordinary Shares and any TVA III public shares held by them as of the TVA III Record Date, in favor of the stock issuance proposal. As of the TVA III Record Date, the Sponsor and the Sponsor Affiliate together own 28.5% of the issued and outstanding TVA III Ordinary Shares.
Resolution to be Voted Upon
The full text of the resolution to be passed is as follows:
“RESOLVED, as an ordinary resolution, that the stock issuance proposal (as such term is defined in TVA III’s proxy statement/prospectus dated , 2026) be approved in all respects.”
Recommendation of the TVA III Board
THE TVA III BOARD UNANIMOUSLY RECOMMENDS THAT TVA III SHAREHOLDERS VOTE “FOR” THE APPROVAL OF THE STOCK ISSUANCE PROPOSAL.
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When you consider the TVA III Board’s recommendation of these proposals, you should keep in mind that our directors and officers, as well as the Sponsor, have interests in the Transactions that are different from, or in addition to, the interests of TVA III shareholders generally. Please see the section entitled “Proposal No. 1 — The Business Combination Proposal — Interests of Certain TVA III Persons in the Business Combination” for additional information.
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PROPOSAL NO. 6 — THE INCENTIVE PLAN PROPOSAL
Overview
Assuming each of the condition precedent proposals is approved, TVA III is asking its shareholders to approve the PlusAI Holdings, Inc. 2026 Equity Incentive Plan, referred to as the Incentive Plan, and the material terms thereunder. The Incentive Plan will be adopted by the TVA III Board and also will be approved by the PlusAI Board, in each case, prior to the date of the extraordinary general meeting and subject to shareholder approval at the extraordinary general meeting. The Incentive Plan will become effective as of the latest to occur of (1) the date of its initial adoption by the TVA III Board, (2) the date of its initial approval by TVA III’s shareholders, or (3) the Effective Time, assuming approval of this proposal by TVA III’s shareholders. The Incentive Plan, if approved by the TVA III shareholders, will allow the Post-Closing Company to provide equity awards as part of the Post-Closing Company’s compensation program, an important tool for motivating, attracting and retaining talented employees and for providing incentives that promote the Post-Closing Company’s business and shareholder value appreciation.
Both the TVA III Board and PlusAI Board believe that long-term incentive compensation programs help align more closely the interests of management, employees and shareholders to create long-term shareholder value. Equity plans such as the Incentive Plan increase the Post-Closing Company’s ability to achieve this objective and, by allowing for several different forms of long-term incentive awards, helps the Post-Closing Company to recruit, reward, motivate, and retain talented personnel. Both the TVA III Board and PlusAI Board believe that the approval of the Incentive Plan is essential to the Post-Closing Company’s continued success, and in particular, the Post-Closing Company’s ability to attract and retain outstanding and highly skilled individuals in the extremely competitive labor markets in which the Post-Closing Company will compete. Such awards also are crucial to the Post-Closing Company’s ability to motivate employees to achieve its goals.
The TVA III Board will approve the Incentive Plan, subject to the approval of the TVA III shareholders. If the TVA III shareholders do not approve the Incentive Plan, the Incentive Plan will not become effective and no shares of Post-Closing Company Class A common stock will become available for issuance thereunder.
Certain Key Plan Provisions
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Summary of the Incentive Plan
The following paragraphs provide a summary of the principal features of the Incentive Plan and its operation. However, this summary is not a complete description of all of the provisions of the Incentive Plan and is qualified in its entirety by the specific language of the Incentive Plan. A copy of the Incentive Plan is attached to this proxy statement/prospectus as Annex D.
Purposes of the Incentive Plan
The purposes of the Incentive Plan will be to attract and retain the best available personnel for positions of substantial responsibility with the Post-Closing Company or any parent or subsidiary of the Post-Closing Company; to provide additional incentive to eligible employees, directors, and consultants; and to promote the success of the Post-Closing Company’s business. These incentives will be provided through the grant of stock options, stock appreciation rights, restricted stock, restricted stock units, and performance awards as the administrator of the Incentive Plan may determine.
Eligibility
The Incentive Plan permits the grant of incentive stock options, within the meaning of Section 422 of the Code, to the Post-Closing Company’s employees and any of its parent corporations’ and subsidiary corporations’ employees, and the grant of nonstatutory stock options, restricted stock, restricted stock units, stock appreciation rights and performance awards to employees, directors and consultants of the Post-Closing Company and employees and consultants of any of its parents or subsidiaries. Following the Effective Time, the Post-Closing Company is expected to have five non-employee directors, all of whom will be eligible for grants under the Incentive Plan, provided they remain in service to the Post-Closing Company or one of its parents or subsidiaries. As of June 30, 2026, PlusAI had approximately 144 employees (including five officers), three non-employee members of the PlusAI Board and 9 natural person consultants, all of whom will be eligible for grants under the Incentive Plan, provided they remain in service to the Post-Closing Company or any of its parents or subsidiaries. TVA III plans to terminate any arrangements with employees, officers and natural persons and therefore they are not expected to be eligible to participate in the Incentive Plan. The basis for participation in the Incentive Plan is being eligible and being selected by the plan administrator, in its discretion, to receive a grant thereunder.
Authorized Shares; Adjustments
Subject to the adjustment provisions contained in the Incentive Plan and the evergreen provision described below, the maximum number of shares of Post-Closing Company Class A common stock will be reserved for issuance pursuant to the Incentive Plan will consist of: (1) 17,765,000 shares of Post-Closing Company Class A common stock, plus (2) any shares of Post-Closing Company Class A common stock subject to Exchanged Options and Exchanged RSUs that, on or after the Effective Time, are cancelled or forfeited, expire or otherwise terminate without being
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exercised in full, are tendered to or withheld by the Post-Closing Company to satisfy payment of exercise price or tax withholding obligations, or are forfeited to or repurchased by the Post-Closing Company due to failure to vest, provided that the maximum number of shares that may be added to the Incentive Plan pursuant to this clause (2) is 4,368,910 shares. The number of shares available for issuance under the Incentive Plan also will include an annual increase, or the evergreen feature, on the first day of each fiscal year of the Post-Closing Company, beginning with the Post-Closing Company’s 2027 fiscal year, equal to the least of:
Shares issuable under the Incentive Plan may be authorized but unissued, or reacquired, shares of Post-Closing Company Class A common stock. If an award expires or becomes unexercisable without having been exercised in full, is surrendered pursuant to an exchange program (as described below), or, with respect to restricted stock, restricted stock units, or performance awards, is forfeited to or repurchased by the Post-Closing Company due to failure to vest, the unpurchased shares (or for awards other than stock options or stock appreciation rights, the forfeited or repurchased shares) will become available for future grant or sale under the Incentive Plan. Only the net shares actually issued under a stock appreciation right granted under the Incentive Plan will cease to be available under the Incentive Plan and all remaining shares under stock appreciation rights will remain available for future grant or sale under the Incentive Plan. Shares that actually have been issued under the Incentive Plan under any award will not be returned to the Incentive Plan; except if shares issued pursuant to awards of restricted stock, restricted stock units, or performance awards are repurchased by or forfeited to the Post-Closing Company due to failure to vest, such shares will become available for future grant under the Incentive Plan. Shares otherwise issuable under an award that are used to pay the exercise price of an award or to satisfy the tax liabilities or withholdings related to an award (which withholdings may be in amounts greater than the minimum statutory amount required to be withheld as determined by the administrator of the Incentive Plan) will become available for future grant or sale under the Incentive Plan. To the extent an award is paid out in cash rather than shares, such cash payment will not result in a reduction in the number of shares available for issuance under the Incentive Plan.
If any dividend or other distribution (whether in cash, shares, other securities or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, reclassification, repurchase, or exchange of shares of Post-Closing Company Class A common stock or other securities of the Post-Closing Company, or other change in the corporate structure of the Post-Closing Company affecting the shares of Post-Closing Company Class A common stock, occurs (other than any ordinary dividends or other ordinary distributions), the administrator of the Incentive Plan, to prevent diminution or enlargement of the benefits or potential benefits intended to be provided under the Incentive Plan, will adjust the number and class of shares that may be delivered under the Incentive Plan; the number, class, and price of shares covered by each outstanding award; and the numerical share limits contained in the Incentive Plan.
Plan Administration
The Post-Closing Company Board or one or more committees of members of the Post-Closing Company Board or other individuals appointed by the Post-Closing Company Board (which may include a duly authorized committee of the Post-Closing Company Board) will have authority to administer the Incentive Plan. Initially, the compensation committee of the Post-Closing Company Board will administer the Incentive Plan. For purposes of the remainder of this proposal, references to the administrator will mean the administrator of the Incentive Plan.
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In addition, to the extent it is desirable to qualify transactions under the Incentive Plan as exempt under Rule 16b-3 of the Exchange Act, such transactions will be structured to satisfy the requirements for exemption under Rule 16b-3 (including, for example, any requirements relating to their administration under the Incentive Plan). Except to the extent prohibited by applicable laws, the administrator may delegate to one or more individuals the day-to-day administration of the Incentive Plan and any of the functions assigned to it in the Incentive Plan, which delegation may be revoked at any time. Subject to the provisions of the Incentive Plan, the administrator has the power to administer the Incentive Plan and make all determinations deemed necessary or advisable for administering the Incentive Plan. These administrative powers include, but are not limited to, the power to determine the fair market value of Post-Closing Company Class A common stock, determine the awards to be granted, select the service providers to whom awards may be granted, determine the number of shares or dollar amounts covered by each award, approve forms of award agreements for use under the Incentive Plan, determine the terms and conditions of awards (including, but not limited to, the exercise price, the time or times at which awards may be exercised, any vesting acceleration or waiver of forfeiture restrictions and any restriction or limitation regarding any award or the shares relating thereto), construe and interpret the terms of the Incentive Plan and awards granted under it, prescribe, amend and rescind rules and regulations relating to the Incentive Plan including creating sub-plans, modify or amend each award, allow a participant to defer the receipt of payment of cash or the delivery of shares that otherwise would be due to such participant under an award, and to determine whether awards will be settled in shares, cash or in a combination of both. The administrator also has the authority to allow participants the opportunity under an exchange program to transfer outstanding awards granted under the Incentive Plan to a financial institution or other person or entity selected by the administrator, and to institute an exchange program by which outstanding awards granted under the Incentive Plan may be surrendered or cancelled in exchange for awards of the same type, which may have a higher or lower exercise price and/or different terms, awards of a different type and/or cash, or by which the exercise price of an outstanding award granted under the Incentive Plan is increased or reduced. The administrator’s decisions, interpretations and other actions are final and binding on all participants and will be given the maximum deference permitted by applicable law.
Types of Awards
The Incentive Plan provides for the grant of stock options (including incentive stock options and nonstatutory stock options), stock appreciation rights, restricted stock, restricted stock units and performance awards. A brief description of each award type follows.
Stock Options
Stock options may be granted under the Incentive Plan. Subject to the provisions of the Incentive Plan, the administrator determines the terms of options. The per-share exercise price of options granted under the Incentive Plan must be equal to at least 100% of the fair market value of a share of Post-Closing Company Class A common stock on the date of grant (except in limited cases under certain transactions as described under Code Section 424(a)). The term of an option may not exceed 10 years. With respect to any participant who owns more than 10% of the voting power of all classes of Post-Closing Company common stock (or any of its parent corporation’s or subsidiary corporation’s) outstanding stock, the term of an incentive stock option granted to such participant must not exceed five years and the per-share exercise price must equal at least 110% of the fair market value of a share of Post-Closing Company Class A common stock on the grant date. The administrator will determine the methods of payment of the exercise price of an option, which may include cash, check, promissory note (to the extent permitted by applicable law), certain shares of Post-Closing Company Class A common stock, cashless exercise, or net exercise, as well as other types of consideration permitted by applicable law. After the cessation of service, the participant may exercise his or her option for the period of time stated in his or her option agreement. In the absence of a specified time in an award agreement, if such cessation is due to death or disability, the option will remain exercisable for six months. In all other cases, in the absence of a specified time in an award agreement, the option will remain exercisable for three months following the cessation of service. An option, however, may not be exercised later than the expiration of its term. Until shares are issued under an option, the participant will not have any right to vote or receive dividends or have any other rights as a stockholder with respect to such shares, and no adjustment will be made for a dividend or other right for which the record date is before the date such shares are issued, except as provided in the Incentive Plan, as summarized further above.
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Stock Appreciation Rights
Stock appreciation rights may be granted under the Incentive Plan, whether alone or in connection with an option granted under the Incentive Plan. Generally, stock appreciation rights allow the recipient to receive the appreciation, in the fair market value of Post-Closing Company Class A common stock over the exercise price of the underlying shares, between the exercise date and the date of grant. The term of a stock appreciation right granted under the Incentive Plan may not exceed 10 years. After the cessation of service, the participant may exercise his or her stock appreciation right for the period of time stated in his or her stock appreciation rights agreement. In the absence of a specified time in an award agreement, if such cessation is due to death or disability, the stock appreciation rights will remain exercisable for six months following the cessation of service. In all other cases, in the absence of a specified time in an award agreement, the stock appreciation rights will remain exercisable for three months following the cessation of service. However, in no event may a stock appreciation right be exercised later than the expiration of its term. Subject to the provisions of the Incentive Plan, the administrator determines the terms of stock appreciation rights, including when such rights become exercisable and whether to pay any increased appreciation in cash or with shares of Post-Closing Company Class A common stock, or a combination of both, except that the per-share exercise price for the shares to be issued pursuant to the exercise of a stock appreciation right will be no less than 100% of the fair market value per share on the date of grant. However, stock appreciation rights may be granted with an exercise price per share of less than 100% of the fair market value per share on the date of grant in limited cases under certain transactions as described under Code Section 424(a). Until shares are issued under a stock appreciation right, the participant will not have any right to vote or receive dividends or have any other rights as a stockholder with respect to such shares, and no adjustment will be made for a dividend or other right for which the record date is before the date such shares are issued, except as provided in the Incentive Plan, as summarized further above.
Restricted Stock
Restricted stock may be granted under the Incentive Plan. Generally, restricted stock awards are grants of shares of Post-Closing Company Class A common stock that may have vesting requirements or other terms and conditions established by the administrator. The administrator will determine the number of shares of restricted stock granted to any employee, director or consultant and, subject to the provisions of the Incentive Plan, will determine the terms and conditions of such awards. The administrator may impose whatever restrictions on transferability, forfeiture provisions or other restrictions or vesting conditions (if any) it determines to be appropriate (for example, the administrator may set restrictions based on the achievement of specific performance goals or continued service to us). The administrator, in its sole discretion, may accelerate the time at which any restrictions will lapse or be removed. The administrator may determine that an award of restricted stock will not be subject to any period of restriction and consideration for such award is paid for by past services rendered as a service provider. Recipients of restricted stock awards generally will have voting rights and rights to dividends and other distributions with respect to such shares upon grant, unless the administrator provides otherwise. If such dividends or distributions are paid in shares, the shares will be subject to the same restrictions on transferability and forfeitability as the share of restricted stock with respect to which they were paid. Shares of restricted stock that do not vest are subject to forfeiture.
Restricted Stock Units
Restricted stock units (“RSUs”) may be granted under the Incentive Plan. Each RSU is a bookkeeping entry representing an amount equal to the fair market value of one share of Post-Closing Company Class A common stock. Subject to the provisions of the Incentive Plan, the administrator determines the terms and conditions of RSUs, including any vesting criteria. The administrator may set vesting criteria based upon the achievement of company-wide, divisional, business unit, or individual goals (including, but not limited to, continued employment or service), applicable federal or state securities laws or any other basis determined by the administrator in its discretion. Notwithstanding the foregoing, the administrator, in its sole discretion, may reduce or waive any vesting criteria to which RSUs are subject. The administrator, in its sole discretion, may determine that an award of RSUs will not be subject to any vesting criteria and consideration for such award is paid for by past services rendered as a service provider. In addition, the administrator, in its sole discretion, may settle earned RSUs in the form of cash, shares, or a combination of both. All RSUs that are unearned or unvested as of the date set forth in the applicable award agreement will be forfeited.
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Performance Awards
Performance awards may be granted under the Incentive Plan. Performance awards are awards that may be earned in whole or in part on the attainment of performance goals or other vesting criteria that the administrator may determine, and that may be denominated in cash or stock. Each performance award will have an initial value that is determined by the administrator. Subject to the provisions of the Incentive Plan, the administrator determines the terms and conditions of performance awards, including any vesting criteria and form and timing of payment. The administrator may set vesting criteria based upon the achievement of company-wide, divisional, business unit, or individual goals (including, but not limited to, continued employment or service), applicable federal or state securities laws or any other basis determined by the administrator in its discretion. Notwithstanding the foregoing, the administrator, in its sole discretion, may reduce or waive any performance objectives or other vesting provisions to which the performance award is subject. The administrator, in its sole discretion, may pay earned performance awards in the form of cash, shares, or a combination of both. All performance awards that are unearned or unvested as of the date set forth in the applicable award agreement will be forfeited.
Non-Employee Directors Limitations
All outside (non-employee) directors will be eligible to receive all types of awards (except for incentive stock options) under the Incentive Plan. The Incentive Plan provides that in any given fiscal year of the Post-Closing Company, no outside director may be granted any equity awards (including equity awards under the Incentive Plan) (the value of which will be based on their grant date fair value) and be provided any cash retainers or fees that in the aggregate exceed $750,000, provided that in the Post-Closing Company’s fiscal year of the individual’s initial service as a non-employee director, such amount is increased to $1,000,000. For the purposes of this maximum limit provision, the grant date fair values of awards granted under the Incentive Plan will be determined in accordance with GAAP. Any awards or other compensation provided to an individual for his or her services as an employee or a consultant (other than an outside director), or before the Closing, will not count toward this limit. This maximum limit provision does not reflect the intended size of any potential grants or a commitment to make grants to the outside directors under the Incentive Plan in the future.
Non-Transferability of Awards
Unless the administrator provides otherwise, the Incentive Plan generally will not allow for the transfer of awards other than by will or the laws of descent and distribution, and only the recipient of an award may exercise an award during his or her lifetime. If the administrator makes an award transferable, such award will contain such additional terms and conditions as the administrator deems appropriate.
Tax Withholding
The administrator will determine the methods of payment of any tax withholding obligations with respect to awards, which may include (1) cash, check, or other cash equivalents, (2) withholding of otherwise deliverable cash or shares having a fair market value equal to the minimum statutory amount required to be withheld or such greater amount as the administrator may determine, (3) delivering already-owned shares of the Post-Closing Company Class A common stock having a fair market value equal to the minimum statutory amount required to be withheld or such greater amount as the administrator may determine, (4) selling a sufficient number of otherwise deliverable shares equal to the amount required to be withheld or such greater amount as the administrator may determine, as well as (5) other types of consideration permitted by applicable law, or a combination thereof, and in each case of (2), (3) and (4) provided any such greater amount with respect to shares does not result in adverse accounting consequences as determined by the administrator.
Dissolution or Liquidation
If there is a proposed liquidation or dissolution of the Post-Closing Company, the administrator will notify participants as soon as practicable before the effective date of such proposed transaction. Unless provided otherwise by the administrator, all awards, to the extent that they have not been previously exercised, vested, or settled (as applicable), will terminate immediately before the consummation of such event.
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Merger or Change in Control
The Incentive Plan provides that in the event of the Post-Closing Company’s merger with or into another corporation or other entity or a change in control of the Post-Closing Company, as defined in the Incentive Plan, each outstanding award will be treated as the administrator determines, without a participant’s consent. The administrator may, without limitation, provide that outstanding awards granted under the Incentive Plan may be (1) assumed, or substantially equivalent awards substituted, by the acquiring or succeeding entity (or an affiliate thereof), (2) continued by the Post-Closing Company (subject to any adjustments in accordance with the Incentive Plan), (3) upon written notice to the participant, terminated upon or immediately prior to the merger or change in control, (4) made vested and exercisable or payable, or restrictions applicable to the award may be made to lapse, in whole or in part, and, to the extent the administrator determines, terminated upon or immediately prior to the merger or change in control, (5) terminated in exchange for cash, other property or other consideration, or any combination of the above (provided, for the avoidance of doubt, that if as of the date of the occurrence of the transaction the administrator determines in good faith that no amount would have been attained upon the exercise of such award or realization of the participant’s rights, then such award may be terminated without payment of cash and/or property), or replaced with such other rights or property selected by the administrator in its sole discretion, or (6) treated in any combination of the foregoing. The administrator is not required to treat all awards, all awards held by a participant, all portions of awards, or all awards of the same type, similarly.
Unless specifically provided otherwise under the applicable award agreement or other written agreement with the participant authorized by the administrator, if an option or stock appreciation right (or a portion of such award) is not assumed, substituted or continued, the administrator will notify the participant that such option or stock appreciation right (or its applicable portion) will be exercisable for a period of time determined by the administrator in its sole discretion and the option or stock appreciation right (or its applicable portion) will terminate upon the expiration of such period.
If awards granted to a non-employee director while such individual was a non-employee director are assumed or substituted for in the merger or change in control and the service of such non-employee director is terminated (other than upon his or her voluntary resignation that does not include a resignation at the request of the acquirer) on or following the date of the merger or change in control, all such awards will fully vest, all restrictions on such awards will lapse, all performance goals or other vesting criteria applicable to such awards will be deemed achieved at 100% of target levels and such awards will become fully exercisable, if applicable, unless specifically provided otherwise under the applicable award agreement or other written agreement with the non-employee director authorized by the administrator.
Forfeiture and Clawback
Awards will be subject to any clawback policy which is in effect at grant and any other clawback policy that the Post-Closing Company is required to adopt pursuant to the listing standards of any national securities exchange or association on which the Post-Closing Company’s securities are listed or as is otherwise required by applicable laws. The administrator also may specify in an award agreement that the participant’s rights, payments and benefits with respect to an award will be subject to reduction, cancellation, forfeiture, recoupment, reimbursement, or reacquisition upon the occurrence of certain specified events. The administrator may require a participant to forfeit or return to the Post-Closing Company or reimburse the Post-Closing Company for all or a portion of the award and any amounts paid under the award in order to comply with any clawback policy of the Post-Closing Company as described in the first sentence of this paragraph or with applicable laws.
Amendment or Termination
The Incentive Plan will become effective upon the latest to occur of (1) the date of its initial adoption by the TVA III Board, (2) the date of its initial approval by TVA III shareholders, and (3) the Effective Time, and will continue in effect for a period of 10 years from its effectiveness, unless terminated earlier by the administrator. However, no incentive stock options may be granted after the 10-year anniversary of the earlier of the adoption of the Incentive Plan by the TVA III Board or the approval of the Incentive Plan by TVA III shareholders. We currently expect the actual effectiveness of the Incentive Plan will occur as of the Effective Time (subject to approval by the TVA III shareholders). In addition, the administrator will have the authority to amend, alter, suspend, or terminate the Incentive
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Plan or any part of the Incentive Plan, at any time and for any reason, but such action generally may not materially impair the rights of any participant with respect to an outstanding award without his or her written consent, provided that the conversion of incentive stock options into nonstatutory stock options as a result of actions taken by the administrator will neither constitute nor contribute toward an impairment of a participant’s rights under an outstanding award. In addition, to the extent necessary and desirable to comply with applicable laws, the administrator will obtain shareholder approval of any amendment to the Incentive Plan.
Summary of U.S. Federal Income Tax Consequences
The following summary is intended only as a general guide to the U.S. federal income tax consequences of participation in the Incentive Plan. The summary is based on existing U.S. laws and regulations, and there can be no assurance that those laws and regulations will not change in the future. The summary does not purport to be complete and does not discuss the tax consequences upon a participant’s death, or the provisions of the income tax laws of any municipality, state or non-U.S. jurisdiction in which the participant may reside. As a result, tax consequences for any particular participant may vary based on individual circumstances.
Incentive Stock Options
A participant generally recognizes no taxable income for ordinary income tax purposes as a result of the grant or exercise of an option that qualifies as an incentive stock option under Section 422 of the Code. If a participant exercises the option and then later sells or otherwise disposes of the shares acquired through the exercise of the option after both the two-year anniversary of the date the option was granted and the one-year anniversary of the date of exercise of the option, the participant will recognize a capital gain or loss equal to the difference between the sale price of the shares and the exercise price.
However, if the participant disposes of such shares either on or before the two-year anniversary of the date of grant or on or before the one-year anniversary of the date of exercise of the option (a “disqualifying disposition”), any gain up to the excess of the fair market value of the shares on the date of exercise over the exercise price generally will be taxed as ordinary income. Any gain in excess of that amount will be a capital gain. If a loss is recognized with respect to the share disposition, there will be no ordinary income, and such loss will be a capital loss.
For purposes of the alternative minimum tax, the difference between the option exercise price and the fair market value of the shares on the date of exercise of the option is treated as an adjustment item in computing the participant’s alternative minimum taxable income in the year of exercise (unless the shares are disposed of in the same year as the option exercise). In addition, special alternative minimum tax rules may apply to certain subsequent disqualifying dispositions of the shares or provide certain basis adjustments or tax credits.
Nonstatutory Stock Options
A participant generally recognizes no taxable income for ordinary income tax purposes as a result of the grant of such an option. However, upon exercising the option, the participant generally recognizes ordinary income equal to the amount that the fair market value of the shares on such date exceeds the exercise price. If the participant is an employee, such ordinary income generally is subject to withholding of income and employment taxes. Upon the sale or other disposition of the shares acquired by the exercise of a nonstatutory stock option, any gain or loss (based on the difference between the sale price and the fair market value on the exercise date) will be taxed as capital gain or loss.
Stock Appreciation Rights
In general, no taxable income for ordinary income tax purposes is reportable when a stock appreciation right is granted to a participant. Upon exercise, the participant generally will recognize ordinary income in an amount equal to the fair market value of any shares or cash received. If the participant is an employee, such ordinary income generally is subject to withholding of income and employment taxes. Any additional gain or loss recognized upon any later disposition of any shares received would be capital gain or loss.
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Restricted Stock Awards
A participant acquiring shares of restricted stock generally will recognize ordinary income equal to the fair market value of the shares (in excess of the purchase price paid for the shares, if any) on the vesting date. If the participant is an employee, such ordinary income generally is subject to withholding of income and employment taxes. The participant, pursuant to Section 83(b) of the Code, may elect to accelerate the ordinary income tax event to the date of acquisition of the shares by filing an election with the IRS generally no later than 30 days after the date the shares are acquired. Upon the sale of shares acquired pursuant to a restricted stock award, any additional gain or loss will be taxed as capital gain or loss.
Restricted Stock Units and Performance Awards
There generally are no immediate tax consequences of receiving an award of RSUs or a performance award. A participant who is granted RSUs or performance awards generally will be required to recognize ordinary income in an amount equal to the fair market value of shares or cash issued to such participant at the time of settlement of the award upon vesting. If the participant is an employee, such ordinary income generally is subject to withholding of income and employment taxes. Any additional gain or loss recognized upon any later disposition of any shares received would be capital gain or loss.
Section 409A
Section 409A of the Code (“Section 409A”) provides certain requirements for non-qualified deferred compensation arrangements with respect to an individual’s deferral and distribution elections and permissible distribution events. Awards with a deferral feature granted under the Incentive Plan to a participant subject to U.S. income tax will be subject to the requirements of Section 409A. If an award is subject to and fails to satisfy the requirements of Section 409A, the recipient of that award may recognize ordinary income on the amounts deferred under the award, to the extent vested, which may be prior to when the compensation is actually or constructively received. Also, if an award that is subject to Section 409A fails to comply with Section 409A’s provisions, Section 409A imposes an additional 20% federal income tax on compensation recognized as ordinary income, as well as interest on such deferred compensation.
Tax Effect for the Post-Closing Company
The Post-Closing Company generally will be entitled to a tax deduction in connection with an award under the Incentive Plan in an amount equal to the ordinary income realized by a participant and at the time the participant recognizes such income (for example, the exercise of a nonstatutory stock option) except to the extent such deduction is limited by applicable provisions of the Code. Special rules limit the deductibility of compensation paid to the Post-Closing Company chief executive officer and certain “covered employees” as determined under Section 162(m) of the Code and applicable guidance. Under Section 162(m) of the Code, the annual compensation paid to any of these specified individuals will be deductible only to the extent that it does not exceed $1,000,000.
THE FOREGOING IS ONLY A SUMMARY OF THE EFFECT OF U.S. FEDERAL INCOME TAXATION UPON PARTICIPANTS AND the Post-Closing Company WITH RESPECT TO AWARDS UNDER THE Incentive Plan. IT DOES NOT PURPORT TO BE COMPLETE AND DOES NOT DISCUSS THE IMPACT OF EMPLOYMENT OR OTHER TAX REQUIREMENTS, THE TAX CONSEQUENCES OF A PARTICIPANT’S DEATH OR TRANSFERS BY GIFT, OR THE PROVISIONS OF THE INCOME TAX LAWS OF ANY MUNICIPALITY, STATE, OR NON-U.S. JURISDICTION IN WHICH THE PARTICIPANT MAY RESIDE.
Plan Benefits
The number of awards that an employee, director, or consultant may receive under the Incentive Plan is in the discretion of the administrator and therefore cannot be determined in advance. Individuals who will be executive officers and non-employee directors of the Post-Closing Company have an interest in this proposal because they are eligible to receive awards under the Incentive Plan. In addition, the Merger Agreement provides that following the effectiveness of the Incentive Plan, a number of the shares of Post-Closing Company Class A common stock will be used for the grant of RSUs to service providers selected by PlusAI from among the individuals who had been service providers of PlusAI as of immediately prior to the Effective Time, and who continue to be service providers through
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the date of grant of such RSUs (such share pool, the “Post-Closing RSU Pool”). The Merger Agreement provides that the Post-Closing Company RSUs granted using the Post-Closing RSU Pool will vest upon the occurrence of, and in proportion with, Earnout Triggering Event I, Earnout Triggering Event II, or Earnout Triggering Event III, if and as applicable, during the Earnout Period, subject to the recipient’s continued service through the date of the applicable Earnout Triggering Event. The RSUs granted from the Post-Closing RSU Pool will be subject to such other terms and conditions as approved following the Closing by the administrator and set forth in individual award agreements including, without limitation, applicable time-based vesting conditions that may continue after the occurrence of any applicable Earnout Triggering Event. Each of the PlusAI directors and executive officers may be eligible to receive such Post-Closing Company RSUs granted under the Incentive Plan using the Post-Closing RSU Pool, to the extent they are selected by PlusAI to receive such awards and subject to their continued service through the date of grant of such RSUs. No determinations have yet been made by the PlusAI Board regarding any such recipients of RSU grants using the Post-Closing RSU Pool and accordingly, the PlusAI directors and executive officers who may receive such RSU grants currently is not determinable.
We have not previously sponsored an equity incentive plan, and, therefore, the number of shares which would have been received by or allocated to named executive officers, all current executive officers as a group, and all other current employees who may participate in the Incentive Plan as a group are not determinable.
However, in connection with the Closing, PlusAI has adopted, subject to the approval of the Post-Closing Board, and the Post-Closing Company is expected to approve, a new non-employee director compensation policy, which will provide that on the date of annual meeting of the Post-Closing Company stockholders each non-employee director of the Post-Closing Company Board will automatically be granted an award of Post-Closing Company RSUs covering a number of shares of Post-Closing Company Class A Common Stock having a value of $180,000. The following table provides certain information regarding such annual equity awards, assuming the individuals continue as non-employee directors of the Post-Closing Company as of the date of grant of such awards.
Plan Benefits
2026 Equity Incentive Plan
Name of Individual and Positions, or Group |
|
Grant Date |
|
|
Number of |
|
||
Non-Employee Directors |
|
|
|
|
|
|
||
Harry J. Harczak, Jr. |
|
$ |
180,000 |
|
|
|
— |
|
Richard Lim |
|
$ |
180,000 |
|
|
|
— |
|
David C. Peterschmidt |
|
$ |
180,000 |
|
|
|
— |
|
All post-closing directors who are not executive officers, as a group |
|
$ |
540,000 |
|
|
|
— |
|
Registration with the SEC
The Post-Closing Company intends to file a Registration Statement on Form S-8 relating to the issuance of Post-Closing Company Class A common stock under the Incentive Plan with the SEC pursuant to the Securities Act, as soon as practicable after the Post-Closing Company becomes eligible to use such form, subject to the prior approval of the Incentive Plan by the TVA III shareholders.
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Vote Required for Approval
The approval of the incentive plan proposal requires an ordinary resolution, being the affirmative vote of a simple majority of the votes cast by the holders of outstanding TVA III Ordinary Shares at the extraordinary general meeting by attendance via the virtual meeting website, in person or by proxy and entitled to vote at the extraordinary general meeting, voting together as a single class. Abstentions will be counted in connection with the determination of whether a valid quorum is established, but will have no effect on the incentive plan proposal.
The incentive plan proposal is conditioned on the approval of each of the other condition precedent proposals. Therefore, if any of such other proposals are not approved, the stock issuance proposal will have no effect, even if approved by the requisite holders of TVA III Ordinary Shares. If any of those proposals are not approved at the extraordinary general meeting (or any adjournment or postponement thereof), then unless certain conditions in the Merger Agreement are waived by the applicable parties to the Merger Agreement, the Merger Agreement may be terminated and the business combination may not be consummated.
As of the date of this proxy statement/prospectus, pursuant to the terms of the Sponsor Support Agreement, the Sponsor and the Insiders have each agreed to vote their, and to cause the Sponsor Affiliate to vote its, TVA III Ordinary Shares, including TVA III Class B Ordinary Shares and any TVA III public shares held by them as of the TVA III Record Date, in favor of the incentive plan proposal. As of the TVA III Record Date, the Sponsor and the Sponsor Affiliate together own 28.5% of the issued and outstanding TVA III Ordinary Shares.
Resolution to be Voted Upon
The full text of the resolution to be passed is as follows:
“RESOLVED, as an ordinary resolution, that the incentive plan proposal (as such term is defined in TVA III’s proxy statement/prospectus dated , 2026) be approved in all respects.”
Recommendation of the TVA III Board
THE TVA III BOARD UNANIMOUSLY RECOMMENDS THAT TVA III SHAREHOLDERS VOTE “FOR” THE APPROVAL OF THE INCENTIVE PLAN PROPOSAL.
When you consider the TVA III Board’s recommendation of these proposals, you should keep in mind that our directors and officers, as well as the Sponsor, have interests in the Transactions that are different from, or in addition to, the interests of TVA III shareholders generally. Please see the section entitled “Proposal No. 1 — The Business Combination Proposal — Interests of Certain TVA III Persons in the Business Combination” for additional information.
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PROPOSAL NO. 7 — THE ESPP PROPOSAL
Overview
Assuming each of the condition precedent proposals is approved, TVA III is asking its shareholders to approve the Post-Closing Company’s employee stock purchase plan, referred to as the PlusAI Holdings, Inc. 2026 Employee Stock Purchase Plan, or the ESPP, and the material terms thereunder. The ESPP will be adopted by the TVA III Board and also will be approved by the PlusAI Board, in each case, prior to the date of the extraordinary general meeting and subject to TVA III shareholder approval at the extraordinary general meeting. The ESPP will become effective as of the latest to occur of (1) the date of its initial adoption by the TVA III Board, (2) the date of its initial approval by the TVA III shareholders, and (3) the Effective Time, assuming approval of this proposal by the TVA III shareholders, but the first offering period will commence at a later date determined by the administrator of the ESPP. The ESPP, if approved by the TVA III shareholders, will provide eligible employees an opportunity to purchase Post-Closing Company Class A common stock at a discount through accumulated contributions of their earned compensation. Both the TVA III Board and PlusAI Board have determined that offering an employee stock purchase plan may be important to the ability of the Post-Closing Company to compete for talent in the future. If TVA III shareholders do not approve the ESPP, the Post-Closing Company may not be able to offer competitive compensation to existing employees and qualified candidates, which could prevent the Post-Closing Company from successfully attracting and retaining highly skilled employees. If the TVA III shareholders do not approve the ESPP, the ESPP will not become effective and no TVA III Class A Ordinary Shares will become available for issuance thereunder.
The ESPP’s initial share reserve which TVA III shareholders are being asked to approve is 2,153,000 shares of Post-Closing Company Class A common stock, with an automatic annual increase as described further below. Following the ESPP’s effectiveness, offering periods will not commence under the ESPP until determined by the administrator of the ESPP.
Both the TVA III Board and PlusAI Board believe that an employee stock purchase plan will be an important factor in attracting, motivating, and retaining qualified personnel who are essential to our success. The ESPP provides a significant incentive by allowing employees to purchase shares of Post-Closing Company Class A common stock at a discount. The TVA III Board will approve the ESPP, subject to the approval of TVA III shareholders. If TVA III shareholders do not approve the ESPP, the ESPP will not become effective.
Summary of the ESPP
The following is a summary of the principal features of the ESPP and its operation. This summary does not contain all of the terms and conditions of the ESPP and is qualified in its entirety by reference to the ESPP as set forth in Annex E attached to this proxy statement/prospectus.
Purpose
The purpose of the ESPP is to provide eligible employees with an opportunity to purchase shares of Post-Closing Company Class A common stock through accumulated contributions, which generally will be made through payroll deductions. The ESPP will permit the administrator of the ESPP to grant purchase options that qualify for preferential tax treatment under Section 423 of the Code. In addition, the ESPP will authorize the grant of purchase options that do not qualify under Code Section 423 pursuant to rules, procedures or sub-plans adopted by the administrator of the ESPP that are designed to achieve desired tax or other objectives.
Shares Available for Issuance; Adjustments
Subject to adjustment upon certain changes in the Post-Closing Company’s capitalization as described in the ESPP, the maximum number of shares of Post-Closing Company Class A common stock that will be available for issuance under the ESPP will be 2,153,000 shares, plus any annual increase as described in the following sentence. The number of shares of Post-Closing Company Class A common stock available for issuance under the ESPP will be increased on the first day of each fiscal year of the Post-Closing Company, beginning with the Post-Closing Company’s 2027 fiscal year in an amount equal to the least of (1) 3,768,000 shares of Post-Closing Company Class
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A common stock, (2) a number of shares of Post-Closing Company Class A common stock equal to 1% of the outstanding shares of all classes of Post-Closing Company common stock outstanding on the last day of the immediately preceding fiscal year of the Post-Closing Company, and (3) a number of shares of Post-Closing Company Class A common stock determined by the administrator of the ESPP no later than the last day of the Post-Closing Company’s immediately preceding fiscal year. Shares issuable under the ESPP may be authorized, but unissued, or reacquired shares of Post-Closing Company Class A common stock.
We currently are unable to determine how long this share reserve may last because the number of shares that will be issued in any year or offering period depends on a variety of factors that cannot be predicted with certainty, including, for example, the number of employees who elect to participate in the ESPP, the level of contributions made by participants and the future price of shares of Post-Closing Company Class A common stock.
If TVA III shareholders do not approve the ESPP, then the ESPP will not become effective and no shares of Post-Closing Company Class A common stock will be available for issuance thereunder.
The ESPP provides that in the event that any dividend or other distribution (whether in the form of cash, shares of Post-Closing Company Class A common stock, other securities or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, reclassification, repurchase or exchange of Post-Closing Company Class A common stock or other securities of the Post-Closing Company or other change in the Post-Closing Company’s corporate structure affecting Post-Closing Company Class A common stock occurs (other than any ordinary dividends or other ordinary distributions), to prevent diminution or enlargement of the benefits or potential benefits intended to be provided under the ESPP, the administrator of the ESPP will make adjustments to the number and class of shares that may be delivered under the ESPP and/or the purchase price per share and number and class of shares covered by each option granted under the ESPP that has not yet been exercised, and the numerical share limits under the ESPP.
Administration
The Post-Closing Company Board or a committee appointed by the Post-Closing Company Board will have authority to administer the ESPP. Unless and until determined otherwise by the Post-Closing Company Board, the compensation committee of the Post-Closing Company Board will administer the ESPP. For purposes of the remainder of this proposal, references to the administrator will mean the administrator of the ESPP. The administrator will have full and exclusive discretionary authority to construe, interpret and apply the terms of the ESPP, delegate ministerial duties to any of our employees, designate separate offerings under the ESPP, designate any subsidiaries of the Post-Closing Company as participating in the ESPP, determine eligibility, adjudicate all disputed claims filed under the ESPP and establish procedures that it deems necessary or advisable for the administration of the ESPP, including, but not limited to, adopting such procedures, sub-plans and appendices to the subscription agreement as are necessary or appropriate to permit participation in the ESPP by employees who are non-U.S. nationals or employed outside the United States. The administrator’s findings, decisions and determinations will be final and binding on all participants to the maximum extent permitted by law.
Eligibility
Generally, any of our employees will be eligible to participate in our ESPP if they are customarily employed by the Post-Closing Company or any of its participating subsidiaries for at least 20 hours per week and more than five months in any calendar year (or any lesser number of hours per week and/or number of months in any calendar year established by the administrator or if otherwise required by applicable law). The administrator, in its discretion, before an enrollment date for all options granted on such enrollment date in an offering, may determine (for each offering under the 423 Component, as defined below, on a uniform and nondiscriminatory basis or as otherwise permitted by applicable Treasury Regulations) that the definition of eligible employee will or will not include an individual if he or she: (1) has not completed at least two years of service (or a lesser period of time determined by the administrator) since the employee’s last hire date, (2) customarily works not more than 20 hours per week (or a lesser period of time determined by the administrator), (3) customarily works not more than five months per calendar year (or a lesser period of time determined by the administrator), (4) is a highly compensated employee within the meaning of Code Section 414(q) or (5) is a highly compensated employee within the meaning of Code Section 414(q) with compensation above a certain level or who is an officer or subject to disclosure requirements under Section 16(a) of the Exchange
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Act. In addition, an employee may not be granted an option to purchase stock under our ESPP if the employee (1) immediately after the grant, would own stock and/or hold outstanding options to purchase such stock possessing 5% or more of the total combined voting power or value of all classes of the capital stock of the Post-Closing Company or of any parent corporation or subsidiary corporation of the Post-Closing Company (a “5% Holder”); or (2) holds rights to purchase stock under all of the Post-Closing Company’s employee stock purchase plans that accrue at a rate which exceeds $25,000 worth of stock for each calendar year during which his or her right to purchase shares is outstanding at any time. As of June 30, 2026, PlusAI had approximately 144 employees (including five officers, of which two are employee members of the PlusAI Board), 144 of whom (including the three officers who are not employee members of the Board) are currently anticipated to be eligible to participate in the ESPP once it becomes effective and provided they remain employees of the Post-Closing Company or its parents or subsidiaries. As of June 30, 2026, Messrs. Liu and Zheng are 5% Holders, and therefore will not be eligible to participate in the ESPP while they remain 5% Holders. Any TVA III employees or service providers are expected to terminate their services with TVA III no later than the consummation of the business combination, and therefore are not expected to be eligible to participate in the ESPP.
Participants may end their participation at any time during an offering period (subject to administrative deadlines set for the offering period) and will be paid their accrued contributions that have not yet been used to purchase shares of Post-Closing Company Class A common stock. Participation ends automatically upon termination of employment with the Post-Closing Company (or its participating subsidiaries).
Offering Periods and Purchase Periods
The ESPP will include a component (the “423 Component”) that is intended to qualify as an “employee stock purchase plan” under Code Section 423, and a component that does not comply with Code Section 423 (the “Non-423 Component”). The Non-423 Component will provide for substantially the same benefits as the 423 Component, except that the Non-423 Component may include features necessary to comply with applicable non-U.S. laws pursuant to rules, procedures or sub-plans adopted by the administrator. For purposes of this summary, a reference to the ESPP generally will mean the terms and operations of the 423 Component.
The ESPP will provide for offering periods with a duration and start and end dates as determined by the administrator, provided that no offering period will have a duration exceeding 27 months. Unless determined otherwise by the administrator, each offering period will have one purchase period with the same duration as the offering period. The administrator is authorized to change the duration of future offering periods and purchase periods under the ESPP, including the starting and ending dates of offering periods and purchase periods and the number of purchase periods in any offering period. Unless determined otherwise by the administrator and to the extent an offering period provides for more than one exercise date in such offering period, if the fair market value of a share of Post-Closing Company Class A common stock on an exercise date is less than the fair market value of a share of Post-Closing Company Class A common stock on the first trading day of the offering period, participants in that offering period will be withdrawn from that offering period following their purchase of shares on such exercise date and automatically will be enrolled in a new offering period.
Contributions
The ESPP will permit participants to purchase shares of Post-Closing Company Class A common stock through payroll deductions of up to 15% of their eligible compensation, which includes a participant’s base straight time gross earnings but excludes payments for overtime, shift premium, commissions, incentive compensation, equity compensation, bonuses, and other similar compensation. The administrator may change the compensation eligible for contribution under the ESPP on a uniform and nondiscriminatory basis for future offering periods. The administrator, in its discretion, may increase or decrease the maximum percentage of compensation that participants may elect as contributions during each offering period if such change is announced before the scheduled beginning of the first offering period to be affected thereafter.
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Exercise of Purchase Option
Amounts deducted and accumulated by a participant under the ESPP are used to purchase shares of Post-Closing Company Class A common stock at the end of each purchase period. The purchase price of the shares will be 85% of the lower of (1) the fair market value of a share of Post-Closing Company Class A common stock on the first trading day of the offering period and (2) the fair market value of a share of Post-Closing Company Class A common stock on the exercise date. A participant will be permitted to purchase a maximum of 2,500 shares during each offering period (subject to the adjustment provisions of the ESPP), provided that the administrator may increase or decrease such maximum number of shares for each purchase period or offering period. Until shares of Post-Closing Company Class A common stock are issued (as evidenced by the appropriate entry on our books or the books of a duly authorized transfer agent of ours) to a participant, the participant will have only rights of an unsecured creditor with respect to such shares, and no right to vote or receive dividends or any other rights as a stockholder with respect to such shares.
Termination of Participation
Participation in the ESPP generally will terminate when a participating employee’s employment with the Post-Closing Company or a participating subsidiary ceases for any reason or the employee otherwise ceases to be eligible to participate pursuant to the terms of the ESPP, the employee withdraws from the ESPP or the Post-Closing Company terminates or amends the ESPP such that the employee no longer is eligible to participate. An employee may withdraw his or her participation in the ESPP at any time in accordance with procedures, and prior to any applicable deadline, specified by the administrator. Upon withdrawal from the ESPP, generally the employee will receive all amounts credited to his or her account without interest (unless otherwise required under applicable law) and his or her payroll withholdings or contributions under the ESPP will cease.
Non-Transferability
A participant will not be permitted to transfer the contributions credited to his or her ESPP account or rights granted under the ESPP, other than by will or the laws of descent and distribution.
Dissolution or Liquidation
In the event of the Post-Closing Company’s proposed dissolution or liquidation, any offering period in progress will be shortened by setting a new exercise date and will terminate immediately before the completion of such proposed transaction, unless determined otherwise by the administrator.
Merger or Change in Control
In the event of a merger or change in control of the Post-Closing Company, as defined in the ESPP, a successor corporation (or the successor corporation’s parent corporation or subsidiary corporation) may assume or substitute for each outstanding option. If the successor corporation (or the successor corporation's parent corporation or subsidiary corporation) does not assume or substitute for the options, the offering period then in progress under the ESPP will be shortened, and a new exercise date will be set to occur before the date of the proposed merger or change in control. The administrator will notify each participant that the exercise date has been changed and that the participant’s option will be exercised automatically on the new exercise date unless prior to such date the participant has withdrawn from the offering period.
Effective Date; Amendment; Termination
The ESPP will become effective upon the latest to occur of (1) the date of its initial adoption by the TVA III Board, (2) the date of its initial approval by TVA III shareholders, and (3) the Effective Time, and will continue in effect for 20 years unless the administrator terminates it earlier. We currently expect the effectiveness of the ESPP will occur as of the Effective Time (subject to approval by the TVA III shareholders). The administrator will have the authority to modify, amend, suspend or terminate the ESPP at any time. If the ESPP is terminated, the administrator may elect to terminate all outstanding offering periods either immediately or upon the next exercise date, or may elect to permit offering periods to expire in accordance with their terms. If the offering periods are terminated prior to expiration, all amounts then credited to participants’ accounts that have not been used to purchase shares will be returned to the participants.
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Summary of U.S. Federal Income Tax Consequences
The following summary is intended only as a general guide to the U.S. federal income tax consequences of participation in the ESPP. The summary is based on existing U.S. laws and regulations, and there can be no assurance that those laws and regulations will not change in the future. The summary does not purport to be complete and does not discuss the tax consequences upon a participant’s death, or transfers by gift, or the provisions of the income tax laws of any municipality, state or non-U.S. jurisdiction to which the participant may be subject. As a result, tax consequences for any particular participant may vary based on individual circumstances. Further, tax consequences for employees participating in the Non-Section 423 Component of the ESPP are not discussed. This summary is not intended to be tax advice to participants, who should consult their own tax advisors.
The Section 423 Component of the ESPP is intended to qualify as an employee stock purchase plan within the meaning of Section 423 of the Code. Under an employee stock purchase plan that so qualifies, no taxable income will be recognized by a participant, and no deductions will be allowable to the Post-Closing Company, upon either the grant or the exercise of purchase options. Taxable income will not be recognized until there is a sale or other disposition of the shares of Post-Closing Company Class A common stock acquired under the ESPP or in the event of the participant’s death while still owning the purchased shares of Post-Closing Company Class A common stock.
If the participant sells or otherwise disposes of the purchased shares of Post-Closing Company Class A common stock within two years after the start date of the offering period in which the shares of Post-Closing Company Class A common stock were acquired or within one year after the date of purchase of those shares of Post-Closing Company Class A common stock, then the participant generally will recognize ordinary income in the year of sale or disposition equal to the amount by which the fair market value of the shares of Post-Closing Company Class A common stock on the exercise date exceeded the purchase price paid for those shares of Post-Closing Company Class A common stock, and the Post-Closing Company will be entitled to an income tax deduction equal in amount to such excess, for the taxable year in which such disposition occurs. The amount of this ordinary income will be added to the participant’s basis in the shares of Post-Closing Company Class A common stock, and any resulting gain or loss recognized upon the sale or disposition will be a capital gain or loss. If the shares of Post-Closing Company Class A common stock have been held for more than one year since the date of purchase, the gain or loss will be long-term capital gain or loss.
If the participant sells or disposes of the purchased shares of Post-Closing Company Class A common stock more than two years after the start date of the offering period in which the shares of Post-Closing Company Class A common stock were acquired and more than one year after the date of purchase of those shares of Post-Closing Company Class A common stock, then the participant generally will recognize ordinary income in the year of sale or disposition equal to the lesser of (1) the amount by which the fair market value of the shares of Post-Closing Company Class A common stock on the sale or disposition date exceeded the purchase price paid for those shares of Post-Closing Company Class A common stock, or (2) 15% of the fair market value of the shares of Post-Closing Company Class A common stock on the start date of that offering period. Any additional gain upon the disposition will be taxed as a long-term capital gain. Alternatively, if the fair market value of the shares of Post-Closing Company Class A common stock on the date of the sale or disposition is less than the purchase price, there will be no ordinary income and any loss recognized will be a long-term capital loss. The Post-Closing Company will not be entitled to an income tax deduction with respect to such disposition.
Plan Benefits
Participation in the ESPP is voluntary and the number of shares of Post-Closing Company Class A common stock that would be purchased in any year or offering period under the ESPP is dependent on various factors such as each eligible employee’s election to participate, the amount of his or her eligible compensation, and his or her determination as to the portion of his or her eligible compensation to contribute to the ESPP. Further, such number of shares of Post-Closing Company Class A common stock that may be purchased under the ESPP is determined, in part, by the price of the shares of Post-Closing Company Class A common stock on the first day of each offering period and applicable exercise date of each purchase period. Accordingly, the actual number of shares of Post-Closing Company Class A common stock that would be purchased by any individual under the ESPP in the future is not determinable. We have not previously sponsored an employee stock purchase plan, and, therefore, the number of shares which would have been received by or allocated to named executive officers, all current executive officers as a group, and all other current employees who may participate in the ESPP as a group are not determinable. Non-employee directors are not eligible to participate in the ESPP. Additionally, under the applicable tax rules, employees are not eligible to participate in the ESPP if they are 5% Holders. As of June 30, 2026, each of Messrs. Liu and Zheng is a 5% Holder,
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and therefore will not be eligible to participate in the ESPP while he remains a 5% Holder. Individuals who will be executive officers of the Post-Closing Company have an interest in this proposal because they may be eligible to participate in the ESPP (provided that 5% Holders are not eligible to participate while they remain 5% Holders). As of , 2026, the closing price of a TVA III Class A ordinary share was $ .
Registration with the SEC
The Post-Closing Company intends to file a Registration Statement on Form S-8 relating to the issuance of Post-Closing Company Class A common stock under the ESPP with the SEC pursuant to the Securities Act as soon as practicable after the Post-Closing Company becomes eligible to use such form, subject to the prior approval of the ESPP by the TVA III shareholders.
Vote Required
The approval of the ESPP proposal requires an ordinary resolution, being the affirmative vote of a simple majority of the votes cast by the holders of outstanding TVA III Ordinary Shares at the extraordinary general meeting by attendance via the virtual meeting website, in person or by proxy and entitled to vote at the extraordinary general meeting, voting together as a single class. Abstentions will be counted in connection with the determination of whether a valid quorum is established, but will have no effect on the ESPP proposal.
The ESPP proposal is conditioned on the approval of each of the other condition precedent proposals. Therefore, if any of such other proposals are not approved, the stock issuance proposal will have no effect, even if approved by the requisite holders of TVA III Ordinary Shares. If any of those proposals are not approved at the extraordinary general meeting (or any adjournment or postponement thereof), then unless certain conditions in the Merger Agreement are waived by the applicable parties to the Merger Agreement, the Merger Agreement may be terminated and the business combination may not be consummated.
As of the date of this proxy statement/prospectus, pursuant to the terms of the Sponsor Support Agreement, the Sponsor and the Insiders have each agreed to vote their, and to cause the Sponsor Affiliate to vote its, TVA III Ordinary Shares, including TVA III Class B Ordinary Shares and any TVA III public shares held by them as of the TVA III Record Date, in favor of the ESPP proposal. As of the TVA III Record Date, the Sponsor and the Sponsor Affiliate together own 28.5% of the issued and outstanding TVA III Ordinary Shares.
Resolution to be Voted Upon
The full text of the resolution to be passed is as follows:
“RESOLVED, as an ordinary resolution, that the ESPP proposal (as such term is defined in TVA III’s proxy statement/prospectus dated , 2026) be approved in all respects.”
Recommendation of the TVA III Board
THE TVA III BOARD UNANIMOUSLY RECOMMENDS THAT TVA III SHAREHOLDERS VOTE “FOR” THE APPROVAL OF THE ESPP PROPOSAL.
When you consider the TVA III Board’s recommendation of these proposals, you should keep in mind that our directors and officers, as well as the Sponsor, have interests in the Transactions that are different from, or in addition to, the interests of TVA III shareholders generally. Please see the section entitled “Proposal No. 1 — The Business Combination Proposal — Interests of Certain TVA III Persons in the Business Combination” for additional information.
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PROPOSAL NO. 8 — THE DIRECTOR ELECTION PROPOSAL
Overview
Assuming the business combination proposal, the domestication proposal, the organizational documents proposal, the stock issuance proposal, the incentive plan proposal and the ESPP proposal are approved, TVA III is seeking shareholder approval on a non-binding advisory basis by ordinary resolution of the election, effective immediately in connection with the Closing, of the individuals listed below to serve as directors of the Post-Closing Company in the respective classes noted below, each until his or her respective successor is duly elected and qualified, subject to such director’s earlier death, resignation, retirement, disqualification or removal.
Prior to the closing of an initial business combination, the TVA III Articles prescribe that only holders of TVA III Class B Ordinary Shares are entitled to appoint and remove directors. Accordingly, the Director Election Proposal is being voted on by TVA III shareholders on a non-binding advisory basis.
Election of Directors
Pursuant to the business combination, TVA III has agreed to take all necessary action, including causing the members of the TVA III Board to resign, so that effective at the Closing, the entire Post-Closing Company Board will consist of eight individuals. The directors will be classified into three classes, with each director holding office for a three-year term or until the next annual meeting of stockholders at which such director’s class is up for election and where such person’s successor is elected and qualified.
Prior to the closing of an initial business combination, the TVA III Articles prescribe that only holders of TVA III Class B Ordinary Shares are entitled to vote on ordinary resolutions to appoint and remove directors. Accordingly, the director election proposal is being voted on by TVA III shareholders on a non-binding advisory basis.
Under the Proposed Certificate of Incorporation, and subject to the rights of holders of Post-Closing Company preferred stock with respect to the election of directors, the directors of the Post-Closing Company will be divided into three classes as nearly equal in size as is practicable, designated Class I, Class II and Class III. TVA III is proposing the approval by ordinary resolution of the election of the following eight individuals, who will take office immediately following the Closing and who will constitute all the members of the Post-Closing Company Board: (1) Richard Lim, and Hao Zheng as Class I directors, (2) David C. Peterschmidt and as the Class II directors, and (3) David Liu, , and Harry J. Harczak, Jr. as Class III directors.
If elected, the initial Class I directors shall serve for a term expiring at the first annual meeting of stockholders; the initial Class II directors shall serve for a term expiring at the second annual meeting of stockholders; and the initial Class III directors shall serve for a term expiring at the third annual meeting of stockholders. At each annual meeting of stockholders beginning with the first annual meeting of stockholders, the successors of the class of directors whose term expires at that meeting shall be elected to hold office for a term expiring at the third annual meeting of stockholders to be held following their election. Each director in each such class shall hold office until such director’s successor is duly elected and qualified, subject to such director’s earlier death, resignation or removal. It is anticipated that David Liu will be designated as chairman of the Post-Closing Company Board and David C. Peterschmidt will be designated as the lead independent director. Each of Harry J. Harczak, Jr., Richard Lim, , , and David C. Peterschmidt is expected to qualify as an independent director under Nasdaq listing standards.
Subject to other provisions in the Proposed Certificate of Incorporation, the number of directors that constitutes the entire Post-Closing Company Board will be fixed solely by a resolution adopted by a majority of the number of authorized directorships, whether or not there exist any vacancies or other unfilled seats in previously authorized directorships on the Post-Closing Company Board. Each director of the Post-Closing Company Board will hold office until the expiration of the term for which such director is elected and until such person’s successor has been duly elected and qualified or until such person’s earlier resignation, death, or removal.
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If the number of directors is hereafter changed, any increase or decrease in directorships will be so apportioned among the classes by the Post-Closing Company Board as to make all classes as nearly equal in number as is practicable, provided that no decrease in the number of directors constituting the Post-Closing Company Board will shorten the term of any incumbent director.
Subject to the rights of holders of any series of Post-Closing Company preferred stock with respect to the election of directors, for so long as the Post-Closing Company Board is classified, any director may be removed from office by the stockholders only for cause. Vacancies occurring on the Post-Closing Company Board for any reason and newly created directorships resulting from an increase in the authorized number of directors may be filled only by vote of a majority of the remaining directors of the Post-Closing Company Board then in office, even though less than a quorum, or by a sole remaining director, and not by stockholders of the Post-Closing Company. A person so elected by the Post-Closing Company Board to fill a vacancy or newly created directorship will hold office until the next election of the class for which such director will have been chosen and until such person’s successor will be duly elected and qualified, or until such director’s earlier death, resignation or removal.
The TVA III Board knows of no reason why any of the nominees will be unavailable or decline to serve as a director. The information presented below is as of the TVA III Record Date and is based in part on information furnished by the nominees and in part from TVA III’s and PlusAI’s records.
Nominees
At the Closing, in accordance with the terms of the Merger Agreement and assuming the election of the nominees set forth in this section, the members of the Post-Closing Company Board will be as follows:
Class I Directors: Richard Lim, and Hao Zheng;
Class II Director: David C. Peterschmidt and ; and
Class III Directors: David Liu, and Harry J. Harczak, Jr.
Information regarding each nominee is set forth in the section of this proxy statement/prospectus entitled “Board of Directors and Management After the Business Combination.”
Other than the requirement under the Merger Agreement that the parties thereto take all necessary action so that effective at the Closing the Post-Closing Company Board will consist of eight directors, who shall include (1) two directors designated by Sponsor (one of which to be designated as a Class II director and one of which to be designated as a Class III director), (2) three independent directors to be designated by mutual agreement between TVA III and PlusAI and (3) three other individuals determined by PlusAI, in its sole and exclusive discretion, provided that the citizenship of the members of the Post-Closing Company Board shall be such that TVA III will be free of foreign ownership, control or domination, there is no arrangement or understanding between the persons described above and any other person pursuant to which the person was selected to such person’s office or position.
For more information about the experience of each of these director nominees of the Post-Closing Company Board following the Closing, see the section of this proxy statement/prospectus entitled “Board of Directors and Management After the Business Combination”; and for more information about the compensation of the members of the TVA III Board and executive officers of TVA III prior to the Closing, see the section of this proxy statement/prospectus entitled “Other Information Related to TVA III — Management, Directors and Executive Officers.”
Vote Required for Approval
The approval of the director election proposal requires an ordinary resolution, being the affirmative vote of a simple majority of the votes cast by holders of outstanding TVA III Ordinary Shares represented at the extraordinary general meeting by attendance via the virtual meeting website, in person or by proxy and entitled
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to vote at the extraordinary general meeting, voting together as a single class. Accordingly, if a valid quorum is established, a TVA III shareholder’s failure to vote by proxy or to vote at the extraordinary general meeting with regard to the director election proposal will have no effect on such proposals.
Prior to the closing of an initial business combination, the TVA III Articles prescribe that only holders of TVA III Class B Ordinary Shares are entitled to appoint and remove directors. This provision of the TVA III MAA may only be amended if approved by a special resolution passed by at least 90% (or, where such amendment is proposed in respect of the consummation of TVA III’s initial business combination, two-thirds) of the TVA III Ordinary Shares voting at the applicable general meeting, voting together as a single class. Accordingly, the director election proposal is being voted on by TVA III shareholders on a non-binding advisory basis only.
The director election proposal is conditioned on the approval of each of the other condition precedent proposals. Therefore, if any of the other condition precedent proposals are not approved, the director election proposal will have no effect, even if approved by the requisite votes of holders of TVA III Class B Ordinary Shares.
As of the date of this proxy statement/prospectus, pursuant to the terms of the Sponsor Support Agreement, the Sponsor and the Insiders have each agreed to vote their, and to cause the Sponsor Affiliate to vote its, TVA III Ordinary Shares, including TVA III Class B Ordinary Shares and any TVA III public shares held by them as of the TVA III Record Date, in favor of the director election proposal. As of the TVA III Record Date, the Sponsor and the Sponsor Affiliate together own 28.5% of the issued and outstanding TVA III Ordinary Shares.
Resolution to be Voted Upon
The full text of the resolution to be passed is as follows:
“RESOLVED, as an ordinary resolution, on a non-binding advisory basis, that the director election proposal (as such term is defined in TVA III’s proxy statement/prospectus dated , 2026) be approved in all respects.”
Recommendation of the TVA III Board
The TVA III Board believes that the director election proposal to be presented at the extraordinary general meeting is in the best interests of TVA III.
THE TVA III BOARD UNANIMOUSLY RECOMMENDS THAT THE TVA III SHAREHOLDERS VOTE “FOR” THE ELECTION OF EACH OF THE DIRECTOR NOMINEES TO THE POST-CLOSING COMPANY BOARD.
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PROPOSAL NO. 9 — THE ADJOURNMENT PROPOSAL
Overview
TVA III shareholders are also being asked to approve a proposal to adjourn the extraordinary general meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies in the event that there are insufficient votes for the approval of the business combination proposal, the domestication proposal, the organizational documents proposal, the advisory organizational documents proposal, the stock issuance proposal, the incentive plan proposal, the ESPP proposal, or the director election proposal (the “adjournment proposal”).
In no event will TVA III solicit proxies to adjourn the extraordinary general meeting or consummate the business combination beyond the date by which it may properly do so under the TVA III Articles, the Companies Act or the Merger Agreement. The purpose of the adjournment proposal is to provide more time for the Sponsor, TVA III and/or their respective affiliates to make purchases of TVA III Ordinary Shares or other arrangements that would increase the likelihood of obtaining a favorable vote on such proposal and to meet the requirements that are necessary to consummate the business combination. See the section entitled “Proposal No. 1 — The Business Combination Proposal — Interests of Certain TVA III Persons in the Business Combination.”
Consequences if the Adjournment Proposal is Not Approved
If an adjournment proposal is presented at the extraordinary general meeting and is not approved by TVA III shareholders, the TVA III Board may not be able to adjourn the extraordinary general meeting to a later date in order to permit further solicitation and vote of proxies in the event that there are insufficient votes for any of the condition precedent proposals. In such event, the business combination would not be completed.
Vote Required
The approval of the adjournment proposal requires an ordinary resolution, being the affirmative vote of a simple majority of the votes cast by holders of outstanding TVA III Ordinary Shares represented at the extraordinary general meeting by attendance via the virtual meeting website, in person or by proxy and entitled to vote at the extraordinary general meeting, voting together as a single class. Adoption of the adjournment proposal is not conditioned upon the adoption of any of the other proposals.
Accordingly, if a valid quorum is established, a TVA III shareholder’s failure to vote by proxy or to vote at the extraordinary general meeting and broker non-votes with regard to the adjournment proposal will have no effect on such proposal. Abstentions and broker non-votes will be counted in connection with the determination of whether a valid quorum is established, but will have no effect on the outcome of the adjournment proposal.
Resolution to be Voted Upon
The full text of the resolution to be passed is as follows:
“RESOLVED, as an ordinary resolution, that the adjournment proposal (as such term is defined in TVA III’s proxy statement/prospectus dated , 2026) be approved in all respects.”
Recommendation of the TVA III Board
THE TVA III BOARD UNANIMOUSLY RECOMMENDS THAT TVA III SHAREHOLDERS VOTE “FOR” THE APPROVAL OF THE ADJOURNMENT PROPOSAL.
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Introduction
TVA III is a blank check company formed in order to effect a merger, amalgamation, share exchange, asset acquisition, stock purchase, reorganization or other similar business combination with one or more businesses. TVA III was incorporated under the laws of the Cayman Islands on July 26, 2024.
TVA III’s efforts to identify a prospective target business were not limited to any particular industry or geographic region. Prior to executing the Merger Agreement, TVA III’s efforts were limited to organizational activities, completion of the TVA III IPO and the evaluation of initial business combination candidates.
Initial Public Offering and Simultaneous Private Placement
On August 1, 2024, the Prior Sponsor purchased 7,666,667 TVA III Founder Shares in exchange for a payment of $25,000.
On April 24, 2025, TVA III consummated the TVA III IPO of 22,500,000 TVA III Public Units, including 2,500,000 units under the underwriters’ over-allotment option. The TVA III Public Units were sold at a price of $10.00 per unit, generating gross proceeds to TVA III of $225,000,000. Simultaneously with the consummation of the TVA III IPO, TVA III completed the private sale of an aggregate of 7,568,750 TVA III Private Placement Warrants to the Prior Sponsor, CCM and Clear Street in the TVA III Private Placement at a purchase price of $1.00 per TVA III Private Placement Warrant, generating gross proceeds of $7,568,750.
CCM and Clear Street purchased an aggregate of 2,868,750 TVA III Private Placement Warrants and the Prior Sponsor purchased 4,700,000 TVA III Private Placement Warrants (inclusive of the 4,100,000 NMSI TVA III Private Placement Warrants owned by the Prior Sponsor that were allocated to the non-managing sponsor investors as a result of the non-managing sponsor investor’s membership interests in the Prior Sponsor). Each TVA III Private Placement Warrant is exercisable to purchase one TVA III Class A Ordinary Share at $11.50 per share. On April 24, 2025, 166,667 TVA III Founder Shares were forfeited as the underwriters did not fully exercise the over-allotment option.
TVA III incurred offering costs of $14,006,902, including underwriting fees of $4,500,000, deferred underwriting fees of $9,000,000 and other costs of $506,902.
Following the consummation of the TVA III IPO, $226,125,000 (or $10.05 per TVA III Public Unit) was deposited into the trust account with Continental Stock Transfer & Trust Company acting as trustee. Except as described in the prospectus for the TVA III IPO, these proceeds, plus accrued interest (net of taxes payable) will not be released until the earlier of the completion of an initial business combination and TVA III’s redemption of 100% of the outstanding TVA III public shares upon its failure to consummate an initial business combination within the completion window.
On September 18, 2025, the TVA III, the Prior Sponsor and the Sponsor, entered into the Purchase Agreement, pursuant to which, the Sponsor (i) purchased from the Prior Sponsor (a) 7,500,000 TVA III Founder Shares and (b) 4,700,000 TVA III Private Placement Warrants, for an aggregate purchase price of $7,400,000 and (ii) upon closing, became the Sponsor of TVA III.
Working Capital Loans
In addition, in order to finance transaction costs in connection with its initial business combination, the Sponsor or an affiliate of the Sponsor, or the TVA III’s officers and directors may, but are not obligated to, loan TVA III funds as may be required (“Working Capital Loans”). If TVA III completes its initial business combination, TVA III would repay the Working Capital Loans. In the event that the initial business combination does not close, TVA III 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. On
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September 30, 2026, TVA III issued a convertible unsecured promissory note in an aggregate principal amount of $250,000 to the Sponsor as a Working Capital Loan. The note is payable by TVA III on the earlier of the date on which TVA III consummates the business combination or the date that the winding up of TVA III is effective. The note is convertible, at the Sponsor’s election, upon the consummation of the business combination, into units identical to the TVA III Public Units at a price of $10.00 per unit, rounded down to the nearest whole number. Working Capital Loans are available up to an aggregate of $1,500,000.
Sponsor Information
The Sponsor is a Florida limited liability company and was formed to invest in TVA III. Although Sponsor is permitted to undertake any activities permitted under the Florida Revised Limited Liability Company Act and other applicable law, Sponsor’s business is focused on investing in TVA III.
Material Interests of Current and Former Officers and Directors of TVA III in Sponsor. Mark Angelo, a director of TVA III, and the president and manager of Yorkville Advisors Global, LP, which is the manager of the Sponsor and the investment manager of the Sponsor Affiliate, and controls the management of (i) the Sponsor, including the exercise of voting and investment discretion over the securities of TVA III held by the Sponsor, representing 4,700,000 TVA III Private Placement Warrants and 7,500,000 TVA III Founder Shares, and (ii) the Sponsor Affiliate, including the exercise of voting and investment discretion over the 1,050,000 TVA III public shares held by the Sponsor Affiliate. Because of this control relationship, the securities beneficially owned by the Sponsor and the Sponsor Affiliate may also be deemed to be beneficially owned by Mr. Angelo for purposes of Rule 13d-3 of the Exchange Act. For more information about Sponsor, the Sponsor Affiliate and their controlling persons, see the section entitled “Beneficial Ownership of Securities.” Three of the directors of TVA III, Scott Glabe, Alan Garten and Lawrence Glick, together with the Sponsor Affiliate, are members of the Sponsor and hold in the aggregate 93.3% of the Sponsor membership interests reflecting indirect interests in the TVA III Founder Shares and 100% of the Sponsor membership interests reflecting indirect interests in the TVA III Private Placement Warrants. In addition, the former Chief Executive Officer of TVA III, Kevin McGurn, holds 4.0% of the Sponsor membership interests reflecting indirect interests in the TVA III Founder Shares.
Material Interests of Third Party Investors in Sponsor. Certain third party investment funds have been admitted as members of the Sponsor in exchange for interests in the Sponsor representing indirect interests of approximately 6.7% of the TVA III Founder Shares. Such investors have no right to control the Sponsor or participate in any decision regarding the disposal of any security held by the Sponsor.
Other than Messrs. Angelo, Glabe, Garten and Glick, none of the other members of Sponsor participate in TVA III’s activities. For more information about Sponsor and its controlling persons, see the section entitled “Beneficial Ownership of Securities.”
Experience with Other SPACs
Certain members of the management team and board of directors of TVA III are currently actively involved in two other special purpose acquisition companies, Yorkville Acquisition Corp. and Blue Water Acquisition III., as described below. Mark Angelo, chairman of the board of directors of TVA III, serves as the chairman of the board of directors of Yorkville Acquisition Corp. and Blue Water Acquisition III. Troy Rillo, Chief Executive Officer and Chief Financial Officer of TVA III, serves as the Chief Financial Officer of Yorkville Acquisition Corp. and Blue Water Acquisition III. Scott Glabe, a director of TVA III, serves as a director of Blue Water Acquisition III. As of the date of this proxy statement/prospectus, neither Yorkville Acquisition Corp. nor Blue Water Acquisition III. has completed a business combination.
Sponsor and Affiliates Compensation
The following table sets forth the payments received by Sponsor and its affiliates from TVA III prior to or in connection with the completion of the initial business combination and the securities issued by TVA III to Sponsor or its affiliates:
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Entity/Individual |
Amount of Compensation Received or Securities Issued |
Consideration Paid or to be Paid |
Sponsor |
7,500,000 TVA III Founder Shares and 4,700,000 TVA III Private Placement Warrants Up to $1,500,000 in Working Capital Loans, which loans are convertible, at the Sponsor’s election, upon consummation of the business combination into units identical to the TVA III Public Units at a price of $10.00 per unit, rounded down to the nearest whole number. As of September 30, 2026, TVA III has incurred a Working Capital Loan in an aggregate principal amount of $250,000 through the issuance of a convertible unsecured promissory note to the Sponsor. Reimbursement for any out-of-pocket expenses related to identifying, investigation and completing an initial business combination |
$7,400,000
Working Capital Loans to finance transaction costs in connection with an initial business combination
Services in connection with identifying, investigating and completing an initial business combination |
Sponsor, our officers, directors, or our or their affiliates |
Finder’s fee, advisory fee, consulting fee or success fee |
Any services they render in order to effectuate the completion of our initial business combination. We may engage one or more affiliates of our sponsor, officers or directors or their respective affiliates to provide additional services to us after this offering, including, for example, identifying potential targets or providing financial advisory services, and may pay such affiliates fair and reasonable fees or other compensation that would be determined at that time in an arm’s length negotiation. |
See the section of this proxy statement/prospectus entitled “Proposal No. 1 —The Business Combination Proposal — Interests of Certain TVA III Persons in the Business Combination” for a further discussion of the compensation received by the Sponsor.
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Conflicts of Interest
As a matter of Cayman Islands law, a director owes three types of duties to the company: (1) statutory duties, (2) fiduciary duties, and (3) common law duties. The Cayman Companies Act imposes a number of statutory duties on a director. A Cayman Islands director’s fiduciary duties are not codified, however the courts of the Cayman Islands have held that a director owes the following fiduciary duties (1) a duty to act in what the director bona fide considers to be in the best interests of the company, (2) a duty to exercise their powers for the purposes they were conferred, (3) a duty to avoid fettering his or her discretion in the future and (4) a duty to avoid conflicts of interest and of duty. The common law duties owed by a director are those to act with skill, care and diligence that may reasonably be expected of a person carrying out the same functions as are carried out by that director in relation to the company and also, to act with the skill, care and diligence in keeping with a standard of care commensurate with any particular skill they have which enables them to meet a higher standard than a director without those skills. In fulfilling their duty of care to us, our directors must ensure compliance with our amended articles of association, as amended and restated from time to time.
As set out above, directors have a duty not to put themselves in a position of conflict. However, in some instances what would otherwise be a breach of this duty can be forgiven and/or authorized in advance by the shareholders provided that there is full disclosure by the directors. This can be done by way of permission granted in the TVA III Articles or alternatively by shareholder approval at shareholder meetings.
Our management team is responsible for the management of our affairs. As described above and below, each of our officers and directors presently has, and any of them in the future may have additional, fiduciary or contractual obligations to another entity pursuant to which such officer or director is or will be required to present a business combination opportunity to such entity. Accordingly, if any of our officers or directors becomes aware of a business combination opportunity which is suitable for an entity to which he or she has then current fiduciary or contractual obligations, he or she will honor his or her fiduciary or contractual obligations to present such business combination opportunity to such other entity, subject to their fiduciary duties under Cayman Islands law. Our amended and restated memorandum and articles of association provide that, to the fullest extent permitted by law: (1) no individual serving as a director or an officer, among other persons, shall have any duty, except and to the extent expressly assumed by contract, to refrain from engaging directly or indirectly in the same or similar business activities or lines of business as us, and (2) we renounce any interest or expectancy in, or in being offered an opportunity to participate in, any potential transaction or matter which (a) may be a corporate opportunity for any director or officer, on the one hand, and us, on the other or (b) the presentation of which would breach an existing legal obligation of a director or officer to any other entity. We do not believe, however, that the fiduciary duties or contractual obligations of our officers or directors will materially affect our ability to complete our initial business combination.
In addition, our Sponsor, officers, directors, and our strategic and operating partners may participate in the formation of, or become an officer or director of, any other blank check company prior to completion of our initial business combination. As a result, our Sponsor, officers, directors, and our affiliates could have conflicts of interest in determining whether to present business combination opportunities to us or to any other blank check company with which they may become involved. The Sponsor and our strategic and operating partners have complete discretion, subject to applicable fiduciary duties, as to which blank check company they choose to pursue a business combination and the order in which they pursue business combinations for any of their existing or future blank check companies. As a result, the Sponsor and our strategic and operating partners may pursue business combinations for blank check companies that it has sponsored in any order, which could result in its more recent blank check companies completing business combinations prior to its blank check companies that were launched earlier. There are no contractual obligations governing the allocation of opportunities among the various blank check companies. Any determination as to which blank check company will pursue a particular acquisition target will be made based on the circumstances of the particular situation, including but not limited to the relative sizes of the blank check companies compared to the sizes of the targets, the need or desire for additional financings and the relevant experience of the directors, officers and our partners involved with a particular blank check company. Below is a table summarizing the entities to which our officers and directors currently have fiduciary duties, contractual obligations or other material management relationships. The fiduciary
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duties owed by such individuals are prescribed by applicable law based on the jurisdiction of such entity’s incorporation, formation or organization.
We do not believe, however, that the fiduciary, contractual or other obligations or duties of our officers or directors, or of the Sponsor and our affiliates, or policies applicable to the Sponsor or any of our partners, will materially affect our ability to complete our initial business combination.
Potential investors should also be aware of the following other potential conflicts of interest:
Below is a table summarizing the entities to which our officers and directors currently have fiduciary duties or contractual obligations that may present a conflict of interest:
Individual |
Entity |
Entity’s Business |
Affiliation |
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Mark Angelo |
Yorkville Advisors |
Hedge fund |
President and Partner |
Yorkville Acquisition Corp. |
Special purpose acquisition company
|
Chairman of the board of directors |
|
Blue Water Acquisition Corp. |
Special purpose acquisition company
|
Chairman of the board of directors
|
|
Troy Rillo |
Yorkville Advisors
|
Hedge fund
|
Partner |
Yorkville Securities LLC |
Broker-dealer |
Co-Chief Executive Officer |
|
Yorkville America, LLC |
Investment adviser |
President, Chief Executive Officer and director |
|
Yorkville Acquisition Corp. |
Special purpose acquisition company
|
Chief Financial Officer |
|
Blue Water Acquisition Corp.
|
Special purpose acquisition company
|
Chief Financial Officer |
|
Alan Garten |
Trump Organization |
Real estate business |
Executive Vice President and Chief Legal Officer |
Scott Glabe |
Trump Media & Technology Group |
Media and technology company |
General Counsel |
Blue Water Acquisition III. |
Special purpose acquisition company |
Director |
|
Lawrence Glick |
Trump Organization |
Real estate business |
Executive Vice President of Development |
Fair Market Value of Target Business
The target business or businesses that TVA III acquires must collectively have a fair market value equal to at least 80% of the balance of the funds in the trust account (net of amounts withdrawn to fund certain working capital requirements and/or to pay our taxes and excluding the deferred underwriting fees from the TVA III IPO held in the trust account) at the time of the execution of a definitive agreement for an initial business combination, although TVA III may acquire a target business whose fair market value significantly exceeds 80% of the trust account balance. The TVA III Board determined that this test was met in connection with the business combination, as described in the section entitled “Proposal No. 1 — The Business Combination Proposal — Satisfaction of the 80% Test.”
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Shareholder Approval of an Initial Business Combination
Under the TVA III Articles, in connection with any proposed initial business combination, TVA III must seek shareholder approval of such initial business combination at a meeting called for such purpose in connection with which TVA III Public Shareholders may seek to redeem their TVA III public shares for cash, regardless of whether they vote “for” or “against” the proposed initial business combination, subject to the limitations described in the prospectus for the TVA III IPO. Accordingly, in connection with the business combination, TVA III Public Shareholders may seek to redeem their TVA III public shares for cash in accordance with the procedures set forth in this proxy statement/prospectus.
Voting Restrictions in Connection with Shareholder Meeting
Pursuant to the terms of the Sponsor Support Agreement, the Sponsor and the Insiders have each agreed to vote their, and to cause the Sponsor Affiliate to vote its, TVA III Ordinary Shares, including any TVA III Founder Shares and TVA III public shares held by them as of the TVA III Record Date, in favor of the business combination proposal and the other proposals described in this proxy statement/prospectus, and against any business combination not with PlusAI.
At any time prior to the extraordinary general meeting, during a period when they are not then aware of any material nonpublic information regarding TVA III or its securities, the Sponsor, PlusAI and/or their respective affiliates may purchase shares from institutional and other investors that vote, or indicate an intention to vote, against the business combination proposal, or execute agreements to purchase such shares from them in the future, or they may enter into transactions with such persons and others to provide them with incentives to acquire TVA III Ordinary Shares, not redeem their TVA III Ordinary Shares in connection with the business combination or vote their shares in favor of the business combination proposal. The purpose of such share purchases and other transactions would be to increase the likelihood of satisfaction of the requirements for the business combination to be approved if it appears that such requirements would otherwise not be met.
Redemption of TVA III Public Shares and Liquidation if No Initial Business Combination
If TVA III is unable to complete the business combination within the completion window, TVA III will: (1) cease all operations except for the purpose of winding up; (2) as promptly as reasonably possible but not more than 10 business days thereafter (and subject to lawfully available funds therefor), redeem the TVA III 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 (which interest shall be net of taxes payable and less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding TVA III public shares, which redemption will completely extinguish TVA III Public Shareholders’ rights as shareholders (including the right to receive further liquidating distributions, if any), subject to applicable law; and (3) as promptly as reasonably possible following such redemption, subject to the approval of remaining shareholders and the TVA III Board, liquidate and dissolve, subject in each case to TVA III’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 TVA III Warrants, which will expire without value to the holder if TVA III fails to complete the initial business combination within the completion window.
Our Sponsor, officers and directors will not be entitled to rights to liquidating distributions from the trust account with respect to any TVA III Founder Shares held by them if TVA III fails to complete the initial business combination within the completion window. However, if the Sponsor, officers or directors acquire TVA III public shares in or after the TVA III IPO, they will be entitled to liquidating distributions from the trust account with respect to such TVA III public shares if TVA III fails to complete the initial business combination within the completion window. Furthermore, the Sponsor Affiliate is entitled to liquidating distributions from the trust account with respect to the TVA III public shares that it has acquired if TVA III fails to complete the initial business combination within the completion window.
Our Sponsor, officers and directors have agreed that they will not propose any amendment to the TVA III Articles (1) in a manner that would affect the substance or timing of TVA III’s obligation to redeem 100% of the TVA III public shares if TVA III does not complete an initial business combination within the completion window
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or (2) with respect to any other provision relating to the right of holders of the TVA III Class A Ordinary Shares or pre-initial business combination activity, unless TVA III provides the TVA III Public Shareholders with the opportunity to redeem their TVA III Class A Ordinary Shares upon approval of any such amendment 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 (which interest shall be net of taxes payable), divided by the number of then outstanding TVA III public shares. Pursuant to the TVA III Articles, such an amendment would need to be approved by a special resolution.
We expect that all costs and expenses associated with implementing TVA III’s liquidation, as well as payments to any creditors, will be funded from amounts remaining in trust account (approximately $ as of , 2026), although TVA III cannot assure TVA III’s shareholders that there will be sufficient funds for such purpose. However, if those funds are not sufficient to cover the costs and expenses associated with implementing TVA III’s liquidation, to the extent that there is any interest accrued in the trust account following the payment of taxes, TVA III may request the trustee to release to TVA III an additional amount of up to $100,000 of such accrued interest to pay those costs and expenses.
If TVA III were to expend all of the net proceeds of the TVA III IPO and the sale of the TVA III Private Placement Warrants, other than the proceeds deposited in the trust account, and without taking into account interest, if any, earned on the trust account, the per share redemption amount received by shareholders upon TVA III’s dissolution would be approximately $10.05. The proceeds deposited in the trust account could, however, become subject to the claims of TVA III’s creditors which would have higher priority than the claims of the TVA III Public Shareholders. TVA III cannot assure TVA III’s shareholders that the actual per share redemption amount received by shareholders will not be substantially less than $10.05. While TVA III intends to pay such amounts, if any, TVA III cannot assure TVA III’s shareholders that TVA III will have funds sufficient to pay or provide for all creditors’ claims.
Although TVA III will seek to have all vendors, service providers (other than TVA III’s independent registered public accounting firm), prospective target businesses and other entities with which TVA III does business execute agreements with TVA III waiving any right, title, interest or claim of any kind in or to any monies held in the trust account for the benefit of the TVA III Public Shareholders, there is no guarantee that they will execute such agreements or even if they execute such agreements that they would be prevented from bringing claims against the trust account including but not limited to fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain an advantage with respect to a claim against TVA III’s assets, including the funds held in the trust account. If any third party refuses to execute an agreement waiving such claims to the monies held in the trust account, TVA III’s management will perform an analysis of the alternatives available to it and will only enter into an agreement with a third party that has not executed a waiver if management believes that such third party’s engagement would be significantly more beneficial to TVA III than any alternative. Examples of possible instances where TVA III may engage a third party that refuses to execute a waiver include the engagement of a third party consultant whose particular expertise or skills are believed by management to be significantly superior to those of other consultants that would agree to execute a waiver or in cases where TVA III is unable to find a service provider willing to execute a waiver. In addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements with TVA III and will not seek recourse against the trust account for any reason. Our Sponsor has agreed that it will be liable to TVA III if and to the extent any claims by a third party (other than TVA III’s independent public accounting firm) for services rendered or products sold to us, or a prospective target business with which TVA III 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 (1) $10.05 per TVA III public share or (2) such lesser amount per TVA III public share held in the trust account as of the date of the liquidation of the trust account, due to reductions in value of the trust assets, in each case net of taxes payable, except as to any claims by a third party that executed a waiver of any and all rights to the monies held in the trust account (whether or not such waiver is enforceable) and except as to any claims under TVA III’s indemnity of the underwriters of the TVA III IPO against certain liabilities, including liabilities under the Securities Act. However, TVA III has not asked the Sponsor to reserve for such indemnification obligations, nor has TVA III independently verified whether the Sponsor has sufficient funds to satisfy its indemnity obligations, and TVA III believes that the Sponsor’s only assets are securities of the Company. Therefore, TVA III cannot assure TVA
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III’s shareholders 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 initial business combination and redemptions could be reduced to less than $10.00 per TVA III public share. In such event, TVA III may not be able to complete the initial business combination, and TVA III’s shareholders would receive such lesser amount per share in connection with any redemption of their TVA III public shares. None of TVA III’s officers or directors will indemnify TVA III for claims by third parties including, without limitation, claims by vendors and prospective target businesses.
In the event that the proceeds in the trust account are reduced below (1) $10.05 per TVA III public share or (2) such lesser amount per TVA III public share held in the trust account as of the date of the liquidation of the trust account, due to reductions in value of the trust assets, in each case net of taxes payable, and the Sponsor asserts that it is unable to satisfy its indemnification obligations or that it has no indemnification obligations related to a particular claim, TVA III’s independent directors would determine whether to take legal action against the Sponsor to enforce its indemnification obligations. While TVA III currently expects that TVA III’s independent directors would take legal action on TVA III’s behalf against the Sponsor to enforce its indemnification obligations to us, it is possible that TVA III’s independent directors in exercising their business judgment may choose not to do so if, for example, the cost of such legal action is deemed by the independent directors to be too high relative to the amount recoverable or if the independent directors determine that a favorable outcome is not likely. TVA III has not asked the Sponsor to reserve for such indemnification obligations and TVA III cannot assure TVA III’s shareholders that the Sponsor would be able to satisfy those obligations. Accordingly, TVA III cannot assure TVA III’s shareholders that due to claims of creditors the actual value of the per share redemption price will not be less than $10.05 per TVA III public share.
TVA III will seek to reduce the possibility that the Sponsor will have to indemnify the trust account due to claims of creditors by endeavoring to have all vendors, service providers (other than TVA III’s independent registered public accounting firm), prospective target businesses or other entities with which TVA III does business execute agreements with TVA III waiving any right, title, interest or claim of any kind in or to monies held in the trust account. Our Sponsor will also not be liable as to any claims under TVA III’s indemnity of the underwriters of the TVA III IPO against certain liabilities, including liabilities under the Securities Act. As of , 2026, TVA III had access to up to $ from the proceeds of the TVA III IPO and TVA III Private Placement, net of taxes payable, with which to pay any such potential claims (including costs and expenses incurred in connection with TVA III’s liquidation, currently estimated to be no more than approximately $100,000). In the event that TVA III liquidates and it is subsequently determined that the reserve for claims and liabilities is insufficient, shareholders who received funds from the trust account could be liable for claims made by creditors.
If TVA III files a winding up petition or a winding up petition is filed against TVA III that is not dismissed, the proceeds held in the trust account could be subject to applicable bankruptcy or insolvency law, and a liquidator may determine that such funds should be included in TVA III’s bankruptcy or insolvency estate and subject to the claims of third-party creditors with priority over the claims of TVA III’s shareholders. To the extent any bankruptcy or insolvency claims deplete the trust account, TVA III cannot assure TVA III’s shareholders that TVA III will be able to return $10.00 per share to the TVA III Public Shareholders. Additionally, if TVA III files a winding up petition or a winding up petition is filed against TVA III that is not dismissed, any distributions received by shareholders could be subject to challenge under applicable debtor/creditor and/or insolvency laws as a “voidable preference” or a “fraudulent conveyance, preference or disposition.” As a result, a liquidator or a bankruptcy or other court could seek to recover some or all amounts received by TVA III’s shareholders. Furthermore, the TVA III Board may be viewed as having breached its fiduciary duty to TVA III or TVA III’s creditors and/or may have acted in bad faith, and thereby exposing itself and the Company to claims of punitive damages, by paying TVA III Public Shareholders from the trust account prior to addressing the claims of creditors. TVA III cannot assure TVA III’s shareholders that claims will not be brought against TVA III for these reasons.
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Facilities
TVA III currently maintains its executive offices at 1012 Springfield Avenue, Mountainside, New Jersey 07092. TVA III considers its current office space, combined with the other office space otherwise available to its executive officers, adequate for its current operations. Upon completion of an initial business combination, TVA III will cease paying these monthly fees.
Upon consummation of the business combination, the principal executive offices of TVA III will be those of PlusAI, at which time nothing more will be paid to such affiliate of the Sponsor.
Employees
TVA III has two executive officers. These individuals are not obligated to devote any specific number of hours to TVA III’s matters and intend to devote only as much time as they deem necessary to its affairs. TVA III does not intend to have any full-time employees prior to the consummation of an initial business combination.
Management, Directors and Executive Officers
TVA III’s current directors and executive officers are as follows:
Name |
|
Age |
|
Position |
Mark Angelo |
|
54 |
|
Chairman of the Board of Directors |
Troy Rillo |
|
58 |
|
Chief Executive Officer and Chief Financial Officer |
Alan Garten |
|
56 |
|
Director |
Scott Glabe |
|
42 |
|
Director |
Lawrence Glick |
|
58 |
|
Director |
Mark Angelo has served as the Chairman of our board of directors of TVA III since September 2025. Additionally, Mr. Angelo has served as President and partner of Yorkville Advisors, a family of hedge funds (“Yorkville Advisors”), since he founded the firm in 2001. Since the inception of Yorkville Advisors, Mr. Angelo has guided the firm in executing cumulative financial transactions of approximately $7 billion in more than 730 companies. As portfolio manager, Mr. Angelo is responsible for overseeing many aspects of the day-to-day operations, including deal structuring, investment decisions, and business development. Prior to founding Yorkville Advisors, Mr. Angelo held senior roles at the May Davis Group and with the Boston Group. Mr. Angelo also currently serves as Chairman of the board of directors of Yorkville Acquisition Corp. since March 2025, and Chairman of the board of directors of Blue Water Acquisition Corp. III since November 2025. Mr. Angelo earned a Bachelor of Arts in Economics from Rutgers University.
Troy Rillo has been the Chief Executive Officer of TVA III since April 2026 and Chief Financial Officer of TVA III since September 2025, and is a partner with Yorkville Advisors where since 2004 he has been instrumental in the firm’s growth and strategic direction. Mr. Rillo is an accomplished business executive and attorney with extensive experience in corporate finance, securities law, and investment management. Mr. Rillo also currently serves as Co-Chief Executive Officer of Yorkville Securities LLC, an SEC registered broker-dealer and member of FINRA, and President and Chief Executive Officer, and member of the Board of Managers, of Yorkville America, LLC, an affiliated SEC-registered investment adviser focused on branded investment products, including separately managed accounts and exchange-traded funds. Additionally, Mr. Rillo has served as the Chief Financial Officer at Yorkville Acquisition Corp. since August 2025, and as the Chief Financial Officer of Blue Water Acquisition Corp. III since November 2025. Prior to joining Yorkville Advisors, Mr. Rillo was a corporate and securities partner at K&L Gates LLP, a leading international law firm, where he advised public and private companies on capital-raising transactions, mergers and acquisitions, and securities compliance. Mr. Rillo is widely recognized as an authority in corporate and securities law and is a frequent speaker on related topics. He earned both his J.D. and B.S. in Finance, magna cum laude, from the University of Florida. While in
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law school, he served as a member of the Florida Law Review and was elected to the Order of the Coif. He is admitted to practice law in New Jersey and Florida.
Alan Garten has served on the board of directors of TVA III since September 2025. Mr. Garten is the Executive Vice President and Chief Legal Officer of the Trump Organization. In this role, he oversees all legal matters across the company’s global real estate and business portfolios, including litigation, complex commercial transactions, regulatory and compliance issues. Since joining the company in 2006, Mr. Garten has overseen some of the most high-profile, high-stakes and consequential legal matters and transactions in modern history, providing strategic counsel in matters that have attracted worldwide attention. Prior to joining the organization, Mr. Garten practiced law at the international firm Bryan Cave LLP, where he focused on commercial and real estate litigation, real estate, and corporate law. He earned his bachelor’s degree from the University of Michigan and his J.D. from Hofstra University School of Law, and he is admitted to practice law in the State of New York.
Scott Glabe has served on the board of directors of TVA III since August 2026 and previously from September 2025 to February 2026. Mr. Glabe has been the General Counsel of TMTG since April 2022. He currently serves on the board of directors of Blue Water Acquisition III and previously served on the board of directors of Yorkville Acquisition Corp. from June to August 2025. He was most recently a Partner at an Am Law 100 firm from February 2021 until April 2022, where his practice focused on investigations and compliance. Mr. Glabe previously led a 200-person team including members of the Office of Cyber, Infrastructure, Risk and Resilience-as Acting Under Secretary for Policy at the U.S. Department of Homeland Security (“DHS”) from July 2020 until January 2021. He also held multiple other positions at DHS from May 2019 to January 2021. Before DHS, he represented the White House as an Associate Counsel to President Donald J. Trump from February 2019 until May 2019 and worked for the U.S. House of Representatives in progressively senior legal and policy roles from April 2015 until February 2019. Earlier in his career, Mr. Glabe practiced in the Washington office of an international law firm from October 2013 to April 2015, clerked for a federal appellate judge from October 2012 to September 2013, and served as an intelligence officer in the U.S. Navy Reserve from September 2008 until January 2020 (including time in the inactive reserve). He is a graduate of Yale Law School and Dartmouth College. Mr. Glabe was also appointed to the President’s Intelligence Advisory Board in February 2025.
Lawrence Glick has served on the board of directors of TVA III since September 2025. Mr. Glick is the Executive Vice President of Development at the Trump Organization and, since March 2007, has been at the forefront of shaping the company’s global growth – driving major real estate acquisitions, overseeing expansive golf operations, and playing a critical role in the development of the company’s strategic initiatives across its worldwide portfolio. Under his leadership, the company has significantly expanded its global footprint with landmark developments and world class golf and entertainment events in premier destinations around the world. From March 1998 to February 2007, Mr. Glick served as Director at American Express Publishing, where he launched Travel + Leisure Golf Magazine and developed signature events. Mr. Glick holds a Bachelor of Science in Communications and Business from the University at Albany.
Director Independence
Nasdaq rules require that a majority of TVA III’s board of directors be independent within one year of its initial public offering. An “independent director” is defined generally as a person who, in the opinion of the company’s board of directors, has no material relationship with the listed company (either directly or as a partner, shareholder or officer of an organization that has a relationship with the company). TVA III has three “independent directors” as defined in Nasdaq rules and applicable SEC rules. TVA III’s board of directors has determined that Alan Garten, Scott Glabe and Lawrence Glick are “independent directors” as defined in Nasdaq listing standards and applicable SEC rules. TVA III’s independent directors will have regularly scheduled meetings at which only independent directors are present. Pursuant to Nasdaq rules, any initial business combination must be approved by a majority of TVA III’s independent directors.
Number and Terms of Office of Officers and Directors
TVA III’s board of directors consists of four members and is divided into three classes with only one class of directors being appointed in each year, and with each class (except for those directors appointed prior to TVA
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III’s first annual general meeting) serving a three-year term. Prior to the closing of TVA III’s initial business combination, only holders of its Class B Ordinary Shares will be entitled to vote on the appointment and removal of directors or continuing the company in a jurisdiction outside the Cayman Islands (including any special resolution required to amend its constitutional documents or to adopt new constitutional documents, in each case, as a result of its approving a transfer by way of continuation in a jurisdiction outside the Cayman Islands). Holders of TVA III’s Public Shares will not be entitled to vote on such matters during such time. These provisions of TVA III’s amended and restated memorandum and articles of association relating to these rights of holders of Class B Ordinary Shares may be amended 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 its 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. In accordance with Nasdaq corporate governance requirements, TVA III is not required to hold an annual general meeting until one year after its first fiscal year end following its listing on Nasdaq. The term of office of the first class of directors, consisting of Scott Glabe and Lawrence Glick, will expire at TVA III’s first annual meeting of shareholders. The term of office of the second class of directors, consisting of Alan Garten, will expire at the second annual meeting of shareholders. The term of office of the third class of directors, which consists of Mark Angelo, will expire at the third annual of shareholders.
TVA III’s officers are appointed by the board of directors and serve at the discretion of the board of directors, rather than for specific terms of office. TVA III’s board of directors is authorized to vote to appoint officers as it deems appropriate pursuant to its amended and restated memorandum and articles of association.
TVA III does not intend to take any action to ensure that members of our management team maintain their positions with us after the consummation of our initial business combination, although it is possible that some or all of TVA III’s officers and directors may negotiate employment or consulting arrangements to remain with TVA III after its initial business combination. The existence or terms of any such employment or consulting arrangements to retain their positions with TVA III may influence its management’s motivation in identifying or selecting a target business but TVA III does not believe that the ability of its management to remain after the consummation of our initial business combination will be a determining factor in its decision to proceed with any potential business combination. TVA III is not party to any agreements with its officers and directors that provide for benefits upon termination of employment.
Committees of the Board of Directors
TVA III’s board of directors has established two standing committees: an audit committee and a compensation committee. Subject to phase-in rules, the rules of Nasdaq and Rule 10A-3 of the Exchange Act require that the audit committee of a listed company be comprised solely of independent directors. Each committee operates under a charter that has been approved by TVA III’s board and will have the composition and responsibilities described below.
Audit Committee
TVA III’s board of directors has established an audit committee of the board of directors. Under the Nasdaq listing standards and applicable SEC rules, TVA III is required to have three members of the audit committee, all of whom must be independent. Alan Garten, Scott Glabe and Lawrence Glick are each independent and serve as the members of TVA III’s audit committee. Mr. Glabe serves as the chair of the audit committee. Each member of the audit committee is financially literate, and TVA III’s board of directors has determined that Mr. Glabe qualifies as an “audit committee financial expert” as defined in applicable SEC rules.
TVA III has adopted an audit committee charter, which details the principal functions of the audit committee, including:
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Compensation Committee
TVA III’s board of directors has established a compensation committee of its board of directors. Under the Nasdaq listing standards and applicable SEC rules, TVA III is required to have a compensation committee of at least two members, all of whom must be independent. Alan Garten, Scott Glabe and Lawrence Glick are each independent and serve as the members of its compensation committee. Mr. Garten serves as the chair of the compensation committee. TVA III has adopted a compensation committee charter, which details the principal functions of the compensation committee, including:
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The charter also provides that the compensation committee may, in its sole discretion, retain or obtain the advice of a compensation consultant, legal counsel or other adviser and will be directly responsible for the appointment, compensation and oversight of the work of any such adviser. However, before engaging or receiving advice from a compensation consultant, external legal counsel or any other adviser, the compensation committee will consider the independence of each such adviser, including the factors required by Nasdaq and the SEC.
Clawback Policy
TVA III has adopted a compensation recovery policy that is compliant with Nasdaq listing rules as required by the Dodd-Frank Act.
Director Nominations
TVA III does not have a standing nominating committee though it intends to form a corporate governance and nominating committee as and when required to do so by law or Nasdaq rules. In accordance with Rule 5605(e) of the Nasdaq rules, a majority of the independent directors may recommend a director nominee for selection by its board of directors. TVA III’s board of directors believes that the independent directors can satisfactorily carry out the responsibility of properly selecting or approving director nominees without the formation of a standing nominating committee. The directors who will participate in the consideration and recommendation of director nominees are Alan Garten, Scott Glabe and Lawrence Glick. In accordance with Rule 5605(e)(1)(A) of the Nasdaq rules, all such directors are independent. As there is no standing nominating committee, TVA III does not have a nominating committee charter in place.
TVA III’s board of directors will also consider director candidates recommended for nomination by its shareholders during such times as they are seeking proposed nominees to stand for appointment at the next annual general meeting (or, if applicable, an extraordinary general meeting). TVA III’s shareholders that wish to nominate a director for appointment to TVA III’s board of directors should follow the procedures set forth in its amended and restated memorandum and articles of association.
TVA III has not formally established any specific, minimum qualifications that must be met or skills that are necessary for directors to possess. In general, in identifying and evaluating nominees for director, its board of directors considers educational background, diversity of professional experience, knowledge of its business, integrity, professional reputation, independence, wisdom, and the ability to represent the best interests of our shareholders. Prior to its initial business combination, holders of our Public Shares will not have the right to recommend director candidates for nomination to TVA III’s board of directors.
Compensation Committee Interlocks and Insider Participation
None of TVA III’s executive officers currently serves, or in the past year has served, as a member of the compensation committee of any entity that has one or more executive officers serving on its board of directors.
Code of Business Conduct and Ethics
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TVA III has adopted a Code of Business Conduct and Ethics (“Code of Business Conduct and Ethics”) applicable to its directors, officers and employees. TVA III has filed a copy of its Code of Business Conduct and Ethics as an exhibit to the registration statement from its initial public offering. You will be able to review this document by accessing its public filings at the SEC’s website at www.sec.gov. In addition, a copy of the Code of Business Conduct and Ethics and the charters of the committees of TVA III’s board of directors will be provided without charge upon request. If TVA III makes any amendments to its Code of Ethics other than technical, administrative or other non-substantive amendments, or grant any waiver, including any implicit waiver, from a provision of the Code of Business Conduct and Ethics applicable to its principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions requiring disclosure under applicable SEC or Nasdaq rules, it will disclose the nature of such amendment or waiver on its website.
Insider Trading Policy
TVA III has adopted an insider trading policy (the “Insider Trading Policy”) which requires insiders to (1) refrain from purchasing securities during certain blackout periods and when they are in possession of any material non-public information and (2) clear all trades with its legal counsel prior to execution. TVA III cannot currently determine whether any of its insiders will make such purchases pursuant to a Rule 10b5-1 plan, as that would be dependent on several factors, including but not limited to, the timing and size of any such purchase. Depending on the circumstances, any of its insiders may decide to make purchases of its Public Shares pursuant to a Rule 10b5-1 plan or may determine that acting pursuant to such a plan is not required under the Exchange Act; however, if the purchasers determine at the time of any such purchases that the purchases are subject to such rules, the purchaser will comply with such rules.
Legal Proceedings
There is no material litigation, arbitration or governmental proceeding currently pending against TVA III or any members of its management team in their capacity as such.
Periodic Reporting and Audited Financial Statements
TVA III has registered the TVA III Public Units, TVA III Class A Ordinary Shares and TVA III Public Warrants under the Exchange Act and have reporting obligations, including the requirement that it file annual, quarterly and current reports with the SEC. In accordance with the requirements of the Exchange Act, TVA III’s annual reports will contain financial statements audited and reported on by its independent registered public accountants.
TVA III will provide shareholders with audited financial statements of the prospective target business as part of the proxy solicitation materials or tender offer documents sent to shareholders to assist them in assessing the target business. In all likelihood, these financial statements will need to be prepared in accordance with, or reconciled to, GAAP or IFRS, depending on the circumstances, and the historical financial statements may be required to be audited in accordance with the standards of the PCAOB. These financial statement requirements may limit the pool of potential target businesses TVA III may conduct an initial business combination with because some targets may be unable to provide such statements in time for us to disclose such statements in accordance with federal proxy rules and complete its initial business combination within the prescribed time frame. TVA III cannot assure you that any particular target business identified by it as a potential business combination candidate will have financial statements prepared in accordance with the requirements outlined above, or that the potential target business will be able to prepare its financial statements in accordance with the requirements outlined above. To the extent that these requirements cannot be met, TVA III may not be able to acquire the proposed target business. While this may limit the pool of potential business combination candidates, TVA III does not believe that this limitation will be material.
TVA III will be required to evaluate its internal control procedures for the fiscal year ending December 31, 2026 as required by the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley Act”). Only in the event TVA III is deemed to be a large accelerated filer or an accelerated filer, and no longer qualify as an emerging growth company, will it be required to have its internal control procedures audited. A target business may not be in
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compliance with the provisions of the Sarbanes-Oxley Act regarding adequacy of their internal controls. The development of the internal controls of any such entity to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete any such business combination.
TVA III has filed a Registration Statement on Form 8-A with the SEC to voluntarily register its securities under Section 12 of the Exchange Act. As a result, TVA III is subject to the rules and regulations promulgated under the Exchange Act. TVA III has no current intention of filing a Form 15 to suspend its reporting or other obligations under the Exchange Act prior or subsequent to the consummation of our initial business combination.
TVA III is a Cayman Islands exempted company with limited liability and its affairs are governed by its memorandum and articles of association, as amended and restated from time to time, the Companies Act (As Revised) of the Cayman Islands (the “Companies Act”), and the common laws of Cayman Islands Exempted companies are Cayman Islands companies conducting business mainly outside the Cayman Islands and, as such, are exempted from complying with certain provisions of the Companies Act. As an exempted company, TVA III has applied for and received a tax exemption undertaking from the Cayman Islands government that, in accordance with Section 6 of the Tax Concessions Act (Revised) of the Cayman Islands, for a period of 30 years from the date of the undertaking, no law which is enacted in the Cayman Islands imposing any tax to be levied on profits, income, gains or appreciations will apply to TVA III or its operations and, in addition, that no tax to be levied on profits, income, gains or appreciations or which is in the nature of estate duty or inheritance tax will be payable (i) on or in respect of its shares, debentures or other obligations or (ii) by way of the withholding in whole or in part of a payment of dividends or other distribution of income or capital by it and its shareholders or a payment of principal or interest or other sums due under a debenture or other obligation of TVA III. TVA III is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act. As such, it is eligible to 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 our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. If some investors find TVA III’s securities less attractive as a result, there may be a less active trading market for our securities and the prices of its securities may be more volatile.
In addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. TVA III intends to take advantage of the benefits of this extended transition period.
TVA III will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of the TVA III IPO, (b) in which it has total annual gross revenue of at least $1.235 billion, or (c) in which it is deemed to be a large accelerated filer, which means the market value of TVA III Class A Ordinary Shares that are held by non-affiliates exceeds $700 million as of the prior June 30, and (2) the date on which it has issued more than $1.0 billion in non-convertible debt during the prior three-year period.
Additionally, TVA III is a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. TVA III will remain a smaller reporting company until the last day of the fiscal year in which (1) the market value of TVA III Class A Ordinary Shares held by non-affiliates equals or exceeds $250 million as of the end of that year’s second fiscal quarter, or (2) its annual revenues equaled or exceeded $100 million during such completed fiscal year and the market value of TVA III Class A Ordinary Shares held by non-affiliates exceeds $700 million as of the end of that year’s second fiscal quarter.
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TVA III’S MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Unless the context indicates or otherwise requires, references in this proxy statement/prospectus to “we,” “us” or the “Company” refer to Texas Ventures Acquisition III Corp. References to our “management” or our “management team” refer to our officers and directors, and references to the Sponsor refer to Yorkville Acquisition Sponsor II, LLC. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the financial statements and the notes thereto contained elsewhere in this proxy statement/prospectus. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those set forth under “Cautionary Note Regarding Forward-Looking Statements,” “Risk Factors” and elsewhere in this proxy statement/prospectus.
Overview
We are a blank check company incorporated in the Cayman Islands on July 26, 2024, formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or other similar business combination with one or more businesses. We intend to effectuate our business combination using cash derived from the proceeds of the TVA III IPO and the sale of the TVA III Private Placement Warrants, our shares, debt or a combination of cash, shares and debt.
We expect to continue to incur significant costs in the pursuit of our acquisition plans. We cannot assure you that our plans to complete a business combination will be successful.
We may seek to extend the completion window consistent with applicable laws, regulations and stock exchange rules by amending our amended and restated articles of association. Any such amendment would require the approval of our public shareholders, who will be provided the opportunity to redeem all or a portion of their TVA III public shares in connection with the vote on such approval. Such redemptions will decrease the amount held in our trust account and our capitalization, and may affect our ability to maintain our listing on Nasdaq. In addition, the Nasdaq Rules currently require SPACs (such as TVA III) to complete its initial business combination within 36 months following the effective date of their initial public offering registration statements (the “Nasdaq 36-Month Requirement”). If we do not meet the Nasdaq 36-Month Requirement, our securities will likely be subject to a suspension of trading and delisting from Nasdaq. Our Sponsor may also, in its discretion, consider selling its interest in TVA III to another sponsor entity, which may result in a change to our management team.
For more information regarding the Sponsor, see the section of this proxy statement/prospectus entitled “Proposal No. 1 —The Business Combination Proposal — Interests of Certain TVA III Persons in the Business Combination” and “Other Information Related to TVA III — Conflicts of Interest.”
Recent Developments
PlusAI Business Combination
On September 2, 2026, TVA III entered into the Merger Agreement (as may be further amended, modified, supplemented or waived from time to time), the PlusAI Voting and Support Agreements and the Sponsor Support Agreement. See section entitled “Proposal No. 1 — The Business Combination Proposal” of this proxy statement/prospectus for more information.
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Results of Operations
We have neither engaged in any operations nor generated any revenues to date. Our only activities since July 26, 2024 (inception) through June 30, 2026 have been (i) organizational activities and (ii) activities relating to (x) the Initial Public Offering, and (y) identifying and evaluating prospective acquisition candidates and activities in connection with the initial business combination. We will not generate any operating revenues until after the completion of our business combination. Following the TVA III IPO, we have generated non-operating income in the form of interest income on investments held in the trust account. We expect to incur increased expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance, among other things), as well as for due diligence expenses.
For the three months ended June 30, 2026, we had a net income of $1,353,590, which consisted of $2,075,700 of interest income on investments held in the trust account and $1,117 of interest earned on cash held in the operating account, offset by general and administrative expenses of $723,227.
For the six months ended June 30, 2026, we had a net income of $881,113, which consisted of $4,119,710 of interest income on investments held in the trust account and $5,914 of interest earned on cash held in the operating account, offset by general and administrative expenses of $3,244,511.
For the three months ended June 30, 2025, we had a net income of $2,939,147, which consisted of $1,733,912 of interest income on investments held in the trust account, $6,469 of interest earned on cash held in the operating account, and a gain on the change in fair value of warrant liability of $1,435,682, offset by general and administrative expenses of $236,916.
For the six months ended June 30, 2025, we had a net income of $2,899,551, which consisted of $1,733,912 of interest income on investments held in the trust account, $6,469 of interest earned on cash held in the operating account, and a gain on the change in fair value of warrant liability of $1,435,682, offset by general and administrative expenses of $276,512.
Liquidity, Capital Resources and Going Concern
Until the consummation of the TVA III IPO, our only source of liquidity was an initial purchase of shares of TVA III Class B Ordinary Shares by the Prior Sponsor and loans from the Prior Sponsor.
On April 24, 2025, we consummated the TVA III IPO of 22,500,000 TVA III Public Units, including 2,500,000 TVA III Public Units issued pursuant to the partial exercise of the underwriters’ over-allotment option. The TVA III Public Units were sold at a price of $10.00 per Unit, generating gross proceeds to us of $225,000,000.
Following the TVA III IPO and the TVA III Private Placement, a total of $226,125,000 (or $10.05 per TVA III Public Unit) was placed in the trust account. We incurred offering costs of $14,006,902, including underwriting fees of $4,500,000, deferred underwriting fees of $9,000,000 and other costs of $506,902.
We intend to use substantially all of the funds held in the trust account, including any amounts representing interest earned on the trust account (less deferred underwriting commissions and taxes payable), to complete our initial business combination. To the extent that our capital stock or debt is used, in whole or in part, as consideration to complete our initial business combination, the remaining proceeds held in the trust account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.
To mitigate the risk that we might be deemed to be an investment company for purposes of the Investment Company Act, which risk increases the longer that we hold investments in the trust account, we may, at any time, (based on our management team’s ongoing assessment of all factors related to our potential status under the Investment Company Act) instruct the trustee to liquidate the investments held in the trust account and instead to hold the funds in the trust account in cash or in an interest-bearing demand deposit account at a bank.
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We intend to use the funds held outside the trust account primarily to identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from the offices, plants or similar locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses, structure, negotiate and complete a business combination.
In order to finance working capital deficit or to finance transaction costs in connection with an intended initial business combination, the Sponsor or an affiliate of the Sponsor may, but are not obligated to, loan us funds as may be required. If we complete the initial business combination, we would repay the Working Capital Loans. In the event that the initial business combination does not close, we 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 the Working Capital Loans are convertible, at the Sponsor’s election, upon the consummation of the business combination, into units identical to the TVA III Public Units at a price of $10.00 per unit, rounded down to the nearest whole number. Prior to the completion of the initial business combination, TVA III does not expect to seek loans from parties other than the Sponsor or an affiliate of the Sponsor as TVA III does not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in the trust account. As of September 30, 2026 and December 31, 2025, TVA III had $250,000 and no borrowings, respectively, under such loans.
Our estimate of the costs of identifying a target business, undertaking in-depth due diligence and negotiating a business combination may be less than the actual amount necessary to do so, in which case we may have insufficient funds available to operate our business prior to our initial business combination. Moreover, we may need to obtain additional financing either to complete our business combination or because we become obligated to redeem a significant number of TVA III public shares upon completion of our business combination, in which case we may issue additional securities or incur debt in connection with such business combination.
We may need to raise additional capital through loans or additional investments from our Sponsor, shareholders, officers, directors, or third parties. Our officers, directors and our Sponsor may, but are not obligated to, loan us funds as may be required. Accordingly, we may not be able to obtain additional financing. If we are unable to raise additional capital, we may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing operations, suspending the pursuit of a potential transaction, and reducing overhead expenses. We cannot provide any assurance that new financing will be available to it on commercially acceptable terms, if at all. These conditions, coupled with being one year from mandatory liquidation, raise substantial doubt about our ability to continue as a going concern for a reasonable period of time which is considered to be one year from the date of the issuance of the unaudited condensed financial statements, the date that we will be required to cease all operations, except for the purpose of winding up, if a business combination is not consummated. The unaudited condensed financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should we be unable to continue as a going concern.
The deadline by which TVA III must complete a business combination transaction is October 24, 2026. TVA III has scheduled an extraordinary general meeting to be held on October 19, 2026 for its shareholders to vote on, among other things, a proposal to amend the TVA III Articles to extend such deadline to July 24, 2027 (the “SPAC Extension”).
Off-Balance Sheet Arrangements
We have no obligations, assets or liabilities, which would be considered off-balance sheet arrangements as of June 30, 2026. We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements. We have not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any non-financial assets.
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Contractual Obligations
We do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities. We previously had a monthly administrative services fee to the Prior Sponsor of $10,000 for office space, utilities and secretarial and administrative support. We began incurring these fees on April 24, 2025. Pursuant to the Purchase Agreement, the administrative services agreement with the Prior Sponsor was terminated.
The underwriters are entitled to a deferred underwriting fee of $0.40 per TVA III Public Unit, or up to $9,000,000 in the aggregate. The deferred fee that will become payable to the underwriters in the TVA III IPO will be based on and paid out of funds remaining in the trust account after redemptions of TVA III public shares, for deferred underwriting commissions to be placed in a trust account located in the United States solely in the event that we complete a business combination, subject to the terms of the TVA III IPO Underwriting Agreement.
For a description of the deferred underwriting fee and the Registration Rights Agreement, please see the section entitled “Proposal No. 1 — The Business Combination Proposal”.
Critical Accounting Estimates
The preparation of condensed financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and income and expenses during the periods reported. Actual results could materially differ from those estimates. We have identified the following critical accounting policies:
A critical accounting estimate to our financial statements is the estimated fair value of our warrant liability. 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. 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:
Warrant Liabilities
We account for the Public Warrants issued in connection with the Initial Public Offering, the Private Placement Warrants and the NMSI Private Placement Warrants in accordance with the guidance contained in FASB ASC 815, “Derivatives and Hedging”. Under ASC 815-40, the Public Warrants and the Private Placement Warrants meet the criteria for equity treatment and as such are recorded in shareholders’ deficit. On September 18, 2025, in connection with the Purchase Agreement, the Prior Sponsor sold 4,700,000 Private Placement Warrants (including the 4,100,000 NMSI Private Placement Warrants) to the New Sponsor. After the closing of the Purchase Agreement, the non-managing sponsor investors ceased to have any rights, claims or interests in or to any Sponsor held securities. The NMSI Private Placement Warrants do not meet the criteria for equity treatment and as such are recorded as a liability and remeasured each period with changes recorded in the statements of operations. If the Public and Private Placement Warrants no longer meet the criteria for equity treatment, they will record as a liability and remeasured each period with changes recorded in the statements of operations.
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Class A Ordinary Shares Subject to Possible Redemption
We account for our ordinary shares subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” TVA III Class A Ordinary Shares subject to mandatory redemption (if any) are classified as a liability instrument and are measured at fair value. Conditionally redeemable ordinary shares (including ordinary shares that feature redemption rights that is either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within our control) is classified as temporary equity. At all other times, ordinary shares are classified as shareholders’ equity. The TVA III Class A Ordinary Shares feature certain redemption rights that are considered to be outside of our control and subject to occurrence of uncertain future events. Accordingly, TVA III Class A Ordinary Shares subject to possible redemption is presented as temporary equity, outside of the shareholders’ equity section of our balance sheet.
Net Income (Loss) Per Share
TVA III has two classes of shares, TVA III Class A Ordinary Shares and TVA III Class B Ordinary Shares. Income and losses are shared pro rata between the two classes of shares. TVA III complies with the accounting and disclosure requirements of ASC Topic 260, “Earnings Per Share”. Net income per share is computed by dividing net income (loss) by the weighted average number of ordinary shares outstanding for the period. Accretion associated with redeemable TVA III Class A Ordinary Shares is excluded from earnings per share as the redemption value approximates fair value.
TVA III has not considered the effect of the TVA III Public Warrants in the calculation of diluted net income per share as the inclusion of such warrants would be anti-dilutive.
For diluted earnings per share, the TVA III Class B Ordinary Shares subject to forfeiture are included in the calculation of total diluted shares at the beginning of the interim period in which the contingency was resolved. For basic earnings per share, the forfeited TVA III Class B Ordinary Shares are considered forfeited on the date of forfeiture.
Recent Accounting Standards
In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2024-03, “Disaggregation of Income Statement Expenses,” which requires disclosures of certain disaggregated income statement expense captions into specified categories within the footnotes to the financial statements. The requirements of the ASU are effective for annual periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027, with early adoption permitted. The requirements will be applied prospectively with the option for retrospective application. We are currently evaluating the impact ASU No. 2024-03 will have on our financial statements.
We do not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on our financial statements.
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INFORMATION ABOUT PLUS AUTOMATION, INC.
References in this section to “we,” “our,” “us,” “our company” or “PlusAI” generally refer to Plus Automation, Inc. and its subsidiaries as conducted by PlusAI prior to the consummation of the Business Combination, and to the Post-Closing Company and its subsidiaries after the consummation of the Business Combination.
Our Mission
Our mission is to deploy autonomous driving intelligence at global scale to create lasting value for the commercial trucking ecosystem by enhancing safety and lowering the cost of freight transportation. We are executing this mission through partnerships with leading global truck manufacturers that integrate our AI‑powered virtual driver software directly into factory‑built trucks. This partner‑led model enables scalable deployment through trusted manufacturing and service channels, giving fleet operators a seamless path to autonomy and representing what we believe to be the most capital‑efficient route to bringing our technology to market.
PlusAI Introduction
PlusAI develops AI-powered virtual driver software that enables heavy-duty trucks to autonomously transport commercial freight on public roads without a driver in the vehicle. Our flagship product, SuperDrive, is designed to be integrated directly into factory-built trucks through partnerships with leading global original equipment manufacturers (“OEMs”).
Founded in Silicon Valley in 2016 by entrepreneurs with deep expertise in engineering, artificial intelligence, and machine learning, PlusAI adopted an AI‑native approach to autonomy early on, using advanced AI models in place of traditional rule-based code to enable scalable and adaptive self-driving technology. Our four founders have collectively founded and scaled six other technology companies, bringing a track record of successful execution in technology markets.
More than five million miles have been driven by vehicles equipped with PlusAI technology operating across the United States, Europe, and Asia, and generating a proprietary dataset that underpins our AI development platform HyperFoundry. This platform combines generative AI models, auto‑labeling, model distillation, and optimized in‑vehicle neural networks. SuperDrive is engineered from this platform to perform the complete driving task and continuously monitor its environment within the defined operational design domain (“ODD”) in which SuperDrive operates without requiring a human driver.
PlusAI is an autonomy partner to three major global OEMs—TRATON GROUP, IVECO, and Hyundai Motor Company—each of which is working with us to integrate SuperDrive into factory‑built autonomous trucks with a view towards deployment in the United States and/or Europe:
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These partnerships demonstrate the adaptability of SuperDrive across multiple drivetrains, vehicle types, and geographic markets. For more information on the terms of the arrangements with our OEM partners and risks related thereto, see “Risk Factors — Risks Related to Our Dependence on Third Parties — Our success is dependent on our ability to successfully maintain, manage, execute and expand on our existing partnerships and obtain new partnerships. Our software is integrated into the vehicle” and “Risk Factors — Risks Related to Our Dependence on Third Parties — We expect to rely on a limited number of customers for a significant portion of our future revenue. The loss of, or a reduction in our commercial relationship with, any of those customers may adversely affect our business, financial condition, and results of operations.”
Additionally, we recently launched HyperFoundry, our Physical AI development platform that underpins SuperDrive and is designed to leverage the proprietary autonomy data, models, simulation tools, and infrastructure we have developed through our autonomous trucking operations. HyperFoundry includes our Data Factory, Model Factory, and SimVerse capabilities, which enable customers to access and utilize proprietary AV data, labeling tools, foundation models, simulation environments, and related development services to accelerate the creation and deployment of autonomous solutions. HyperFoundry is built upon more than 7 million miles of L4-validated driving data and the software infrastructure developed in support of SuperDrive. We believe HyperFoundry addresses the growing demand for Physical AI and autonomous systems by providing access to high-quality real-world data, AI models, and simulation capabilities that are difficult and costly to develop independently. Today, HyperFoundry is generating revenue through the sale of proprietary autonomy data, tools, and services and is currently being utilized by a large global trucking OEM.
We also have worked closely with major fleet operators to validate our technology in commercial freight environments and we collaborate with key suppliers, such as NVIDIA and Bosch, to support performance, safety, and scalability across vehicle architectures. In 2021, we entered into an agreement with Amazon to supply autonomous driving technology. As part of that agreement, Amazon acquired a warrant to purchase shares of our common stock. For more information on the Amazon warrants, please see the section entitled “PlusAI’s Management’s Discussion and Analysis of Financial Condition and Results of Operations.” We also have done autonomous testing with DSV in Europe.
In 2026 we announced SuperDrive 6.0, which includes construction-zone handling and night-driving capabilities. We further announced expanded NVIDIA collaboration agreements using Alpamayo DRIVE Hyperion and Halos.
PlusAI, in partnership with its OEM partners, is targeting the commercial launch of SuperDrive‑enabled trucks in 2027, beginning in the United States and then expanding into Europe. We are actively engaged in joint development and validation programs with our OEM partners and achieved a key “driver‑out” safety validation milestone in April 2025. Public road testing is currently underway in Texas and Sweden and additional customer fleet trials have recently begun.
PlusAI maintains operations in California, Texas, and Germany to support commercialization, deployment, and ongoing customer support.
Our Software Business Model
The PlusAI business model is designed to be highly scalable and capital‑efficient. We provide our SuperDrive virtual driver software to OEM partners, who can integrate the technology directly into factory‑built trucks. The system’s architecture is sensor agnostic and compatible with multiple sensor modalities (camera, radar, LiDAR) as long as components meet defined performance criteria. For additional information, see the
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section of this proxy statement/prospectus titled “—SuperDrive Product Overview.” The OEMs are then able to sell these autonomous‑enabled trucks through their existing sales and service networks to fleet operators, maintaining the traditional commercial vehicle value chain.
Trucks enabled with SuperDrive have the potential to significantly reduce the operating costs of commercial trucking. We expect the economic benefits of these cost savings to be distributed across the freight ecosystem, including fleet operators, OEMs, and developers of virtual driver technology.
As the autonomous trucks are utilized, fleet operators will pay OEMs a fee‑per‑mile under a Driver‑as‑a‑Service (“DaaS”) model. This fee can reduce—and may ultimately replace—the cost fleet operators currently bear for human drivers. We expect that our OEM partners will be contractually obligated to share a fixed portion of the DaaS fee with PlusAI, aligning our revenue with customer adoption and truck utilization, creating a predictable and scalable software‑as‑a‑service (“SaaS”) revenue stream.
Autonomous adoption improves economics for every participant in the ecosystem:
Based on management estimates, PlusAI expects to generate more than $40,000 in annual SaaS revenue per deployed truck.
Because we do not manufacture trucks, operate fleets, or maintain large‑scale physical support infrastructure, our asset‑light model requires minimal capital expenditures and ongoing support costs. OEM and ecosystem partners manage vehicle manufacturing, financing and leasing, servicing and maintenance, parts replacement, and other operational functions. This allows PlusAI to leverage existing industry infrastructure while focusing exclusively on software development and autonomy system integration. We believe this approach supports rapid scalability and the potential for recurring software revenue at an estimated 85% target gross margin.
Refer to the section entitled “Proposal No. 1 — The Business Combination Proposal — Unaudited Prospective Unit Economics Information” for additional details.
Our Competitive Advantages
We believe that PlusAI is well positioned to capture the opportunity in autonomous trucking because of several competitive advantages spanning our team, technology, product, partnerships, and business model. These strengths differentiate our approach and provide the foundation for scaling SuperDrive globally.
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Market Opportunity
Commercial Trucking is a Critical Industry Ripe for Innovation
Freight transportation is the backbone of the global economy, and long‑haul heavy‑duty trucking represents the majority of overland freight movement. In the United States and Europe, heavy‑duty trucking accounts for approximately 70% of total road freight volume and represents an estimated market of approximately $0.9 trillion in the United States and approximately $0.8 trillion in Europe for a combined $1.7 trillion. This scale underscores the sector’s essential role in enabling goods to move through complex supply chains and meet rising consumer expectations for timely delivery.
However, the industry faces numerous structural and operational challenges, including:
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These challenges are often experienced most acutely on long‑distance routes (200+ miles), where hours‑of‑service restrictions prevent drivers from returning home nightly, exacerbating asset utilization, driver availability, safety, and cost issues.
Headwinds for commercial trucking have intensified as e‑commerce growth and rising consumer expectations place pressure on logistics networks to expand freight capacity while improving cost efficiency, safety, and environmental performance.
Autonomous Technology is Positioned to Unlock Value for the Industry
Society of Automotive Engineers (“SAE”) International Standard J3016 (“SAE J3016”) is a technical taxonomy that is widely referenced by regulators and policymakers, including in U.S. Department of Transportation and National Highway Traffic Safety Administration (“NHTSA”) publications and by various state and national authorities, but does not have the force of law. However, both the federal government and numerous states use the SAE levels to define terms such as “automated driving system” or to distinguish between driver-support (Levels 1–2) and automated-driving (Levels 3–5) features in statutes or regulations that govern testing and deployment of autonomous vehicles. SAE J3016 defines six levels of driving automation, from Level 0 (no driving automation) to Level 5 (full driving automation). In summary: Level 0 involves no driving automation and the human driver performs the entire dynamic driving task; Level 1 (“driver assistance”) automates either lateral or longitudinal control, with the human driver responsible for the remainder of the driving task; Level 2 (“partial driving automation”) automates both lateral and longitudinal control, with the human driver still responsible for monitoring the environment and performing object and event detection and response; Level 3 (“conditional driving automation”) allows an automated driving system (“ADS”) to perform the entire dynamic driving task within a defined operational design domain (“ODD”), but with the expectation that a human driver will respond to a request to intervene; Level 4 (“high driving automation”) allows the ADS to perform the entire dynamic driving task within its ODD without any expectation that a user will respond to a request to intervene; and Level 5 (“full driving automation”) refers to automated performance of the entire dynamic driving task in all on-road conditions.
SAE Level 4 (“L4”) encompasses operations in which an ADS performs the entire dynamic driving task, on a sustained basis, within a defined ODD (for example, specific highway freight corridors, hub-to-hub routes, or geo-fenced urban or campus zones), without any expectation of human intervention if the system remains within its ODD. In practice, L4 deployments today are limited to tightly defined geographic areas, times of day, weather conditions, and/or use cases (such as robotaxi services or goods movement). L4 autonomous driving is a major technological advancement in commercial trucking, enabling fully driverless operation within a defined ODD. This capability addresses the industry’s most pressing pain points—driver shortages, underutilized assets, safety risks, and fuel inefficiencies.
Many freight routes in the United States and Europe are ideal use cases for autonomous solutions given their repetitive use of the same highway corridors. Currently, California is the only state that prohibits the testing or deployment of L4 autonomous vehicles over a gross weight of 10,001 pounds. Twenty-five states have enacted legislation explicitly permitting deployment of L4 driverless trucks. Five states (Hawaii, Connecticut, Massachusetts, New York and Vermont) permit L4 testing but require a safety driver to be present in the vehicle during operation. The remaining states implicitly permit L4 testing (meaning states where applicable state motor-vehicle codes and autonomous vehicle-related policies do not prohibit driver-out operation and are interpreted as allowing regulators to approve such deployments on a case-by-case basis, for example through pilot programs or special permits). We believe that a scalable autonomous system optimized for highway driving can address a significant portion of the total addressable market.
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By removing human‑driver limitations and enabling trucks to operate safely, reliably, and around the clock, autonomous driving can transform fleet economics and freight capacity:
The cost structure of the heavy-duty trucking industry continues to face upward pressure, driven primarily by increases in labor and fuel expenses. In 2025, the average cost per mile for U.S. heavy trucking operations reached approximately $2.26, with labor and fuel representing the largest components at approximately 44% and 21% of total operating costs, respectively. These figures reflect a significant increase over the past decade. According to the American Transportation Research Institute (“ATRI”)’s 2025 Operational Costs of Trucking report, labor costs rose by approximately 34% from 2019 to 2024. These labor market constraints are expected to contribute to continued cost escalation and operational challenges across the freight transportation sector. Industry analyses indicate that L4 autonomy could lower the average cost per mile by over 40%, or approximately $1.00 per mile, primarily through reductions in labor-related expenses.
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Autonomous trucking is expected to materially improve vehicle-level profitability for fleet operators. Based on industry and management projections and estimates, the annual profit per vehicle could increase nearly 4.5 times, from approximately $18,400 for a human-driven truck to more than $84,000 for a driverless vehicle equipped with L4 autonomy. This increase is primarily attributed to two factors: higher profit margins per mile and improved asset utilization.
McKinsey & Company projects the market for autonomous heavy‑duty trucking in the US and Europe could reach $290 billion in annual revenue by 2035, underscoring the size of the opportunity for companies able to commercialize solutions at industrial scale.
OEMs are Critical to Adoption of Autonomous Solutions
The manufacturing of heavy‑duty trucks in the United States and Europe is highly concentrated, with approximately 95% of new truck production in 2024 attributable to six OEMs: TRATON GROUP, Daimler Trucks, Volvo, Hyundai Motor Company, PACCAR, and IVECO. These OEMs are the industry’s primary distribution and support channels, selling vehicles directly to commercial fleets or through established dealer networks. They also provide essential after‑sales services, including warranty, maintenance, and parts replacement, making them indispensable partners for large‑scale commercialization of new technologies.
Wide‑scale adoption of autonomous trucking solutions will require factory‑built vehicles that meet rigorous safety, redundancy, and validation standards. We believe that OEM production processes are best positioned to deliver these requirements while providing the quality assurance needed to build customer confidence.
We believe that OEM integration also aligns with fleet operators’ procurement preferences. Commercial fleets typically acquire vehicles through OEM channels to preserve existing commercial and liability frameworks, ensure service access, and maintain residual values. Accordingly, we expect that purchasing autonomous trucks through traditional channels is likely to reduce operational and legal friction while improving unit economics through streamlined hardware installation, supply chain coordination, and after‑sales support.
OEM partnerships are therefore central to PlusAI’s go‑to‑market strategy. These relationships provide access to the manufacturing, distribution, and service networks needed for large‑scale deployment while supporting long‑term operational reliability for fleet customers.
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Competitive Landscape for Autonomous Technology
The autonomous driving industry is still in the early stages of commercialization and is attracting significant investment from both technology companies and established automotive manufacturers.
Two main competitor groups have emerged:
Independent technology companies must overcome the difficulty of integrating their solutions into OEM production environments and scaling without access to factory networks. OEMs, by contrast, have manufacturing and distribution expertise but often face long development timelines and heavy capital requirements to build autonomy in‑house.
We believe that the key success factors in this market include:
We believe PlusAI is well‑positioned across each of these dimensions. Our AI‑native architecture, global dataset, and disciplined safety program provide a robust technical foundation. We complement this with the ability to deeply integrate into OEM production programs, enabling factory‑built deployments through established sales and service channels. This combination is designed to position PlusAI to accelerate time‑to‑market, reduce hardware integration complexity, and scale efficiently without incurring the capital burden of operating fleets or building manufacturing infrastructure.
Our Unique Partner Ecosystem
Our OEM and technology partnerships form the foundation of our commercialization model and we believe position PlusAI to scale quickly in a capital efficient manner. These relationships provide access to manufacturing, distribution, and service infrastructure required for industrial‑scale deployment and create significant competitive differentiation.
OEM Partnerships
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We have established strategic collaborations with three major global commercial vehicle OEMs—TRATON GROUP, IVECO, and Hyundai Motor Company—that collectively represent a significant share of global heavy‑duty truck sales. We believe we are both a leading provider in the autonomous trucking industry and that we are currently the only L4 autonomous trucking technology provider with active OEM‑integrated programs in both the United States and Europe.
Share Based on New Truck Sales(2)
Information on Aurora and Torc are based on public filings and other publicly available information only.
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None of these agreements (1) grant exclusivity to either party with respect to autonomous driving software or (2) contain binding purchase commitments for future commercial volumes of our products.
Ecosystem and Technology Collaborations
In addition to OEM partnerships, we have built a strong ecosystem of technology and fleet demonstration partners that help drive product capability and adoption:
These collaborations validate the technical strength and long‑term potential of our platform and reinforce our leadership position within the autonomous driving industry.
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Our AI‑Based Virtual Driver Technology
The challenges facing the commercial trucking industry, combined with the scale of the opportunity for autonomy, underscore the importance of having a technology platform that can be deployed safely, reliably, and at industrial scale. Our AI‑based virtual driver software has been designed from the ground up to meet these requirements.
AI‑Native Technology Strategy
PlusAI is a pioneer of the Autonomous Vehicle 2.0 (“AV 2.0”) paradigm, which shifts away from traditional robotics‑based architectures toward AI‑native systems powered by large‑scale neural networks. This strategy underpins the design of SuperDrive, enabling more efficient, scalable, and adaptive autonomous driving capabilities.
We develop and train the AI used in the SuperDrive platform internally. These models, including those used for perception, prediction, and planning, are proprietary to us and are trained primarily on data collected by us from testing and developing the platform, supplemented by simulated data generated using tools developed in-house or licensed from third parties.
By leveraging deep learning models trained on vast quantities of real‑world and simulated data, SuperDrive is designed to perform complex driving tasks with humanlike reasoning and to generalize more effectively across unfamiliar scenarios. This data‑driven architecture reduces the software complexity associated with classical rule‑based systems by replacing extensive hand‑coded logic with generalized, model‑driven behavior.
This foundational design enables:
Core AI Model Architecture
SuperDrive is powered by a layered AI architecture consisting of modular, specialized components that work together to perceive, reason, and act in real time:
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This layered oversight ensures SuperDrive maintains a high level of operational safety and reliability under a wide range of driving conditions.
Our architecture is intentionally designed to promote transparency, auditability, and safety assurance. By exposing intermediate perception outputs and validating every driving action through the Guardrails system, PlusAI addresses the “black‑box” limitations common to fully end‑to‑end neural networks. This hybrid design combines the flexibility of large AI models with deterministic rule‑based safety mechanisms, enabling scalable deployment while meeting the rigorous standards required for autonomous operations.
Efficient Learning and World Models
PlusAI leverages generative AI, open foundation models, and a proprietary dataset accumulated over nine years of development to build highly generalizable driving intelligence. The dataset spans multiple geographies (United States, Europe, Asia), day and night driving, various weather conditions, and different traffic densities.
Key capabilities include:
This approach improves model generalization and allows for faster iteration without the limitations of manually curated datasets.
Optimized for Real‑Time Performance
Safe highway‑speed operation requires low‑latency inference. PlusAI’s system is engineered to meet these constraints:
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This optimization ensures that PlusAI can deliver advanced AI capabilities while meeting the responsiveness and resource constraints typical of commercial trucks.
SuperDrive Product Overview
SuperDrive is PlusAI’s proprietary AI‑based software platform that enables L4 autonomous driving for heavy‑duty trucks. Designed for full vehicle integration, SuperDrive is capable of performing the complete dynamic driving task within a defined ODD, which specifies the conditions (road types, traffic environments, weather) under which the system operates safely. Although SuperDrive is designed to enable Level 4 automation within its defined ODD when and where regulations permit, the platform may also be deployed in configurations that correspond to SAE Levels 2 or 3; in such cases, a human driver remains responsible for supervising the system and complying with local law, even if the underlying technology is capable of higher levels of automation.
By removing the need for a human driver, SuperDrive is designed to improve operational efficiency, safety, and cost‑effectiveness for commercial fleets. SuperDrive does not require custom hardware designed by PlusAI, and PlusAI does not design or manufacture sensors or other hardware components. The autonomous driving functions enabled by PlusAI’s SuperDrive software rely on data from a combination of sensors, including radar, lidar, video cameras, global navigation satellite systems (such as GPS), and inertial measurement units. These sensors are sourced by the OEMs from third-party suppliers. While different OEMs may select different sensor models or vendors, the types of sensors used, and the categories of data they provide, are uniform. SuperDrive is designed to ingest standardized data inputs across these sensor categories, and PlusAI specifies the performance and interface requirements that each sensor must meet. This flexibility allows OEM partners to select commercially available hardware while ensuring forward compatibility with evolving sensor technologies.
Three‑Layer Redundancy for Safety
SuperDrive incorporates a three‑layer redundancy architecture that enhances operational reliability and provides fail‑safe mechanisms across critical driving functions:
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This multi‑layered design enhances safety, provides resilience in unexpected conditions, and is designed to ensure that the system meets the rigorous safety standards required for commercial deployment.
Key Product Differentiators
Our key product differentiators include:
Together, PlusAI’s technology platform and SuperDrive product provide the foundation for scalable, capital‑efficient deployment of autonomous trucks at industrial scale.
To support the industrial‑scale deployment of autonomous trucks, PlusAI’s technology platform is complemented by a comprehensive Safety Case Framework. This framework establishes the validation processes, operational guardrails, and metrics necessary to demonstrate the safety and reliability of SuperDrive as it approaches commercial launch.
Our Framework for Commercial Launch
Our Safety Case Framework (“SCF”) establishes a disciplined, risk‑based approach to validating SuperDrive’s readiness for commercial launch. It draws from best practices in other safety‑critical industries, including aviation, nuclear, and automotive, and is designed to meet the rigorous safety expectations of regulators, customers, and the public.
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Safety Case Framework (SCF)
The Safety Case Framework is structured around a hierarchy of safety claims, sub‑claims, and supporting evidence to demonstrate that SuperDrive can operate safely in defined conditions. The Safety Case Framework is organized around five core pillars:
This structured framework informs PlusAI’s engineering and operational practices and supports transparency with partners, regulators, and other stakeholders. Key elements of the framework are shared publicly to align with industry standards and to reinforce accountability in automated vehicle safety assurance.
Progress against this framework is measured by Safety Case Readiness (“SCR”), an internally designed percentage‑based metric that aggregates how complete and mature the safety case is relative to commercial launch requirements. SCR reflects the extent to which SuperDrive’s architecture, processes, validation plans, and supporting evidence meet the thresholds required for safe deployment and was designed in part based on other market and industry practices.
As of the first half of 2026, PlusAI reached 93.4% SCR, up from 86.1% in the first half of 2025, and is targeting 100% SCR before its planned 2027 commercial launch.
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Autonomous Performance Metrics
In addition to SCR, PlusAI tracks two complementary performance indicators that measure SuperDrive’s operational maturity in real‑world driving conditions:
Through the first half of 2026, PlusAI achieved 85.2% RAFT and 99.8% AMP, up from 76.2% and 98.6%, respectively, in the first half of 2025. For commercial launch, PlusAI is targeting more than 90% RAFT, which together with 100% SCR will demonstrate that SuperDrive can complete entire routes without human intervention.
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Commitment to Transparency
PlusAI intends to continue reporting these metrics on a regular basis as it advances toward commercial launch. This reporting provides visibility into the maturity of SuperDrive’s safety and performance capabilities and supports PlusAI’s commitment to transparency and accountability in the commercial deployment of autonomous trucks.
The following section outlines PlusAI’s commercialization and growth strategy, including how we intend to scale our OEM partnerships, expand deployment corridors, and accelerate adoption as SuperDrive achieves its safety and performance milestones.
Our Commercialization and Growth Strategy
Our go‑to‑market strategy is designed for rapid, capital‑efficient scale through deep integration with OEM partners and a phased geographic rollout. This strategy allows PlusAI to focus resources on advancing its SuperDrive software while leveraging the reach, infrastructure, and customer relationships of our OEM partners.
Integrated OEM Go‑To‑Market Approach
Under our model, we provide OEM partners with our SuperDrive virtual driver software and reference hardware specifications for factory‑built autonomous trucks. The OEMs manufacture these vehicles through their existing production lines and distribute them through established sales and service channels, augmented with the operational support infrastructure needed for fleet adoption.
This integrated approach:
Commercialization Roadmap
We are targeting the commercial launch of SuperDrive‑enabled trucks in 2027, beginning in Texas. Current development efforts include extensive testing and validation programs in the United States (Texas) and Europe (Germany and Sweden) to ensure system performance across varied driving conditions.
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Key milestones include:
Commercial Launch and Scaling
We plan to focus our initial U.S. deployment on Texas, which accounts for ~12% of total U.S. trucking freight miles, with operations centered on the Texas Triangle corridor (Dallas‑Houston‑San Antonio). Subsequent phases will expand across Sun Belt states, which represent ~51% of U.S. freight activity, and then to the broader continental United States.
In Europe, we plan to begin our commercial deployments in Germany and Sweden, markets with favorable regulatory environments and robust logistics infrastructure, followed by Western Europe and broader continental markets. Germany and Sweden together represent ~16% of European freight mileage.
Growth Strategy
Our long‑term growth strategy is anchored by three strategic pillars:
We estimate the U.S. market opportunity alone could generate $0.85 in value per mile under a DaaS model, with PlusAI capturing approximately 20–25% of the economics.
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Government Regulation
Our operations are subject to oversight and regulatory compliance requirements from a range of authorities, including the National Highway Traffic Safety Administration (“NHTSA”), the Federal Motor Carrier Safety Administration (“FMCSA”), and relevant state and local transportation agencies such as Departments of Transportation and Departments of Motor Vehicles. Although the regulatory landscape in the United States is generally supportive of safe testing, development, and deployment of autonomous vehicle technologies at both the federal and state levels, there are currently no domestic laws that explicitly allow the full implementation and deployment of a commercial autonomous truck with fully driverless operations. Despite this current lack of a comprehensive federal statutory or regulatory regime for driverless technology such as SuperDrive, existing regulatory frameworks allow for sufficient testing of our SuperDrive technology on public roads to enable us to continue making progress toward fully driverless operations. Additionally, there have been multiple levels of activity which point toward building of a framework to allow commercial deployment of autonomous vehicles. We maintain an internal Policy and Regulatory Affairs team and we are actively monitoring legislative and regulatory developments and engaging with policymakers, regulators, and industry stakeholders on matters affecting autonomous driving technology. Based on those efforts, we anticipate that federal and state regulators will implement more permissive regulations governing commercial, fully driverless operations in the long-term but the absence of regulations will not materially inhibit commercialization of SuperDrive.
For example, the autonomous trucking sector has received bipartisan support within both chambers of the U.S. Congress and from executive branch agencies, including the USDOT and its operating administrations. Secretary of Transportation Sean Duffy has pledged to create a federal framework that will, among other things “enable commercial deployment [of autonomous vehicles],” and since April 2025, the USDOT has issued guidance, waivers, and exemptions conducive to the deployment of driverless trucks. Congressionally, legislative efforts have included the May 2026 bipartisan introduction of the Build America 250 Act, which contains a federal framework for autonomous commercial motor vehicles. To date, U.S. federal regulations have generally been permissive with respect to the testing and deployment of advanced autonomous vehicle functionality, provided that such systems are demonstrated to operate in a safe and responsible manner. As federal, state, and international legal frameworks governing autonomous vehicles continue to evolve, we may become subject to additional regulatory requirements.
Twenty-six states, including most recently California, have enacted legislation expressly permitting deployment of L4 driverless trucks (meaning states that have enacted laws or regulations that specifically address vehicles equipped with automated driving systems and contemplate, under specified conditions, operation without a human driver in the vehicle). Five states expressly permit L4 testing but require a safety driver to be present in the vehicle during operation. The remaining states implicitly permit L4 testing (meaning states where applicable state motor-vehicle codes and autonomous vehicle-related policies do not prohibit driver-out operation and are interpreted as allowing regulators to approve such deployments on a case-by-case basis, for example through pilot programs or special permits).
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Certain states, such as Arizona, Florida, New Mexico, Pennsylvania, and Texas, have established regulatory environments that provide clarity and predictability for the deployment of self‑driving technology. Some states impose specific operational requirements or limitations on certain autonomous vehicle functions or use cases. We believe such constraints may be gradually eased over time as the safety, efficiency, and economic benefits of autonomous trucking become more widely recognized.
We actively engage with state and local elected officials, regulatory agencies, and transportation authorities to promote understanding of autonomous vehicle technology and its benefits. Through this engagement, we seek to ensure that regulatory frameworks continue to support the safe testing and deployment of autonomous vehicles on public roads. Our efforts include advocating for technology‑neutral policies that support a diverse range of autonomous vehicle use cases and foster a level playing field across the industry. We believe this proactive approach by PlusAI and other stakeholders in the autonomous trucking industry will help to facilitate broader acceptance and adoption of autonomous driving technologies, and we expect federal and state regulators to implement regulations that facilitate commercial, fully driverless operations, while balancing the need for safe driving conditions.
Similar regulatory structures and reporting obligations exist, or are being developed, in international markets. Several countries including Germany, the United Kingdom, and Japan have enacted legislation or established regulatory frameworks that permit the deployment of autonomous vehicles in certain circumstances without a human driver present. In addition, the European Union and Japan continue to develop standards that define safety and operational requirements for higher levels of vehicle autonomy. We believe these developments signal a growing international consensus and may enable commercial operations in multiple jurisdictions in the near term.
As a company with global partnerships and cross‑border technology deployments, we are also subject to trade regulations, customs and product classification rules, and sourcing‑related requirements, including applicable tariffs. Our operations are further subject to federal, state, and local labor and employment laws, including those governing occupational health and safety and wage regulations. For example, we are subject to the requirements of the U.S. Occupational Safety and Health Act of 1970, as amended and comparable state laws designed to protect employee health and workplace safety.
Like other companies in the automotive and technology sectors, we are subject to a range of environmental regulations. These include, but are not limited to, rules governing water use, air emissions, energy consumption, recycling practices, and the handling, storage, transportation, and disposal of hazardous materials. We may also be subject to remediation obligations in the event of environmental contamination. Compliance with applicable environmental regulations may require obtaining permits and licenses, as well as undergoing inspections of our facilities and products.
Generally, we are subject to evolving and uncertain regulations, including those governing motor carriers, autonomous vehicles, artificial intelligence, and machine learning, and unfavorable changes to these regulations or any failure by us to comply with these regulations may adversely affect our business. For more information, see the section entitled “Risk Factors – Risks Related to Our Legal and Regulatory Environment”.
Research and Development
Our research and development efforts are focused on the design, optimization and testing of our autonomous driving system. We have assembled a team of world-class scientists and engineers with significant experience in automotive safety, self-driving technology, artificial intelligence, robotics, cyber security, and product development to bring safe and innovative autonomous driving software to market. As of December 31, 2025, our research and development staff accounted for approximately 84% of our total employees. We expect to remain focused on research and development for the foreseeable future as we continue to invest in research and development activities to enhance and commercialize our technology.
Intellectual Property
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Our success and competitive advantage depend in part upon our ability to develop and protect our core technology and intellectual property. We own a portfolio of intellectual property, including patents and registered trademarks, confidential technical information, and expertise in the development of software and hardware for autonomous vehicles and lidar technology.
We develop and train the AI used in the SuperDrive platform internally. These models, including those used for perception, prediction, and planning, are proprietary to us and are trained primarily on data collected by us from testing and developing the platform, supplemented by simulated data generated using tools developed in-house or licensed from third parties.
We do not rely on third-party AI models for the core autonomous driving functions of SuperDrive. Certain commonly available third-party components—such as open-source machine learning frameworks or commercially licensed software tools—may be used in the development environment to support training or deployment, but these tools do not provide autonomous-driving-specific functionality and are not determinative of system performance. Additionally, although certain immaterial legacy components of our software predate our 2023 Restructuring and are subject to a cross-licensing agreement with Plus PRC, such components do not include any intellectual property developed after our 2023 Restructuring or our core L4 software components, which are designed for higher-cost, higher-performance hardware platforms, require more advanced compute and sensor configurations and have been developed with a view towards meeting U.S. and European requirements. We do not believe reengineering of legacy cross-licensed intellectual property would be materially disruptive to our business, nor does the cross-licensing agreement give Plus PRC control over, or access to, our core L4 software functionality. Further, we do not believe the intellectual property subject to the cross-licensing agreement would be subject to material regulatory restrictions, such as CFIUS review.
Accordingly, the AI capabilities of the SuperDrive platform are based on our proprietary models, and we are not materially dependent on any third-party AI models for the system’s core functionality.
We have filed patent and trademark applications in order to further secure these rights and strengthen our ability to defend against third parties who may infringe on our rights. We also rely on trade secrets, design and manufacturing know-how, continuing technological innovations, and licensing and exclusivity opportunities to maintain and improve our competitive position.
Additionally, we protect our proprietary rights through agreements with our commercial partners, supply-chain vendors, employees, and consultants, as well as close monitoring of the developments and products in the industry, and AI research advancements in our field. Our OEM partners generally retain ownership of the sensor data they provide to PlusAI or its SuperDrive software. OEMs do not obtain intellectual property rights in PlusAI’s software or in any derived data produced by SuperDrive solely by virtue of providing sensor data or selecting the associated hardware.
As of December 31, 2025, we had over 170 issued patents and over 90 patent applications worldwide. These patents and applications cover key aspects of our technology portfolio and support our competitive positioning in domestic and international markets.
As of December 31, 2025, we owned nearly 100 registered or pending trademarks worldwide, including 21 registrations or pending applications in the United States. We also own registrations or pending applications in 11 foreign countries: Australia, Brazil, Canada, the European Union, India, Japan, Mexico, Norway, the United Kingdom, South Korea and Switzerland. The marks covered by these registrations or pending applications include the marks PLUSAI, PLUS.AI, our company’s PLUS term alongside its logo, our company’s PLUS term below its logo, THE FUTURE OF TRUCKING, and SUPERDRIVE. The goods and services associated with these marks include hardware and software, autonomous vehicles, and autonomous vehicle research, design and development services.
Employees and Human Capital
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We have a highly technical and innovation-driven founder-led team. Co-founders David Liu, our Chief Executive Officer, Hao Zheng, our Chief Technology Officer, and Shawn Kerrigan, our Chief Operating Officer, bring decades of experience in engineering, AI, and business strategy. Their backgrounds include Ph.D. degrees from Stanford University, and leadership roles across startups, public companies, and global tech firms.
As of June 30, PlusAI employed 144 employees, including 24 employees located outside of the United States. A portion of our global workforce is based in Germany, where employees are represented by a works council in accordance with local labor law. We are not party to any collective bargaining agreements, and no employees are represented by a labor union. The vast majority of our employees are focused on research and development, reflecting our identity as a technology-driven company.
Our employees are at the heart of our success and are the driving force behind our continued innovation. We actively recruit individuals with deep technical expertise and a passion for our mission. Our culture is fueled by a shared desire to solve complex challenges and create meaningful impact, leading to collaboration and dedication that we believe go beyond that of a typical workplace.
We are committed to supporting our team’s well-being and long-term success. We offer comprehensive health and wellness benefits, as well as professional growth opportunities, performance recognition programs, and competitive compensation packages. We foster a culture of openness and respect, and we value the unique perspectives and backgrounds that each team member brings.
Diversity of thought, experience, and background enhances our ability to innovate. We strive to build and maintain a dynamic, inclusive workplace that encourages new ideas, celebrates contributions, and supports each individual’s growth and development.
Facilities
Our corporate headquarters is located in Santa Clara, California, and consists of 38,636 square feet of office space. Our Santa Clara facilities contain research and development and general and administrative functions. We lease additional offices in the United States and around the world, including approximately 36,087 square feet of office space in Fremont, California and approximately 2,895 square feet of office space in Munich, Germany.
We lease all of our facilities and do not own any real estate. We believe that our existing facilities are adequate and suitable for our current needs and that, should it be needed, suitable additional or alternative space will be available as and when needed.
Legal Proceedings
From time to time, we may be subject to legal proceedings and claims arising in the ordinary course of our business. We are not currently a party to or aware of any proceedings that we believe will have, individually or in the aggregate, a material effect on our business, financial condition or results of operations.
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PLUSAI’S MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
You should read the following discussion and analysis of financial condition and results of operations together with PlusAI’s audited consolidated financial statements, unaudited condensed consolidated financial statements, and the related notes appearing elsewhere in this proxy statement/prospectus. The discussion and analysis should also be read together with the section entitled “Information about Plus Automation, Inc.” and PlusAI’s unaudited pro forma combined financial information included in the section entitled “Unaudited Pro Forma Combined Financial Information”.
Prior to August 2023, PlusAI Corp (“Original Plus”) was the global parent company of the Original Plus’s global subsidiaries, including those focused on the Chinese market (the “Plus Group”). On July 31, 2023, Original Plus and its then shareholders consummated a series of transactions which ultimately resulted in the divestiture of its operating entity in the People’s Republic of China, Plus PRC Holdings Ltd (the “Restructuring”). As part of the Restructuring, Plus Automation, Inc., a holding company formed in 2023, became the parent company of the Plus Group, including Original Plus and the operating entities in the United States and Germany.
Some of the information contained in this discussion and analysis or set forth elsewhere in this proxy statement/prospectus, including information with respect to PlusAI’s plans and strategy for its business, includes forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. Throughout this section, unless otherwise noted or the context otherwise requires, “PlusAI,” “we,” “us,” “our”, and “its” refer to PlusAI prior to the business combination and PlusAI and its subsidiaries following the business combination.
Overview
PlusAI develops AI-powered virtual driver software that enables heavy-duty trucks to autonomously transport commercial freight on public roads without a driver in the vehicle. Our technology addresses the nearly $2.0 trillion truck freight market in the United States and Europe, helping to solve the persistent driver shortage that drives up costs and constrains truck utilization, as well as providing additional safety and fuel efficiency benefits.
Our flagship product, SuperDrive, is a virtual driver platform that enables Level 4 autonomous operation in heavy-duty trucks. PlusAI is an autonomy partner to three global OEMs of commercial trucks, TRATON GROUP (formerly the commercial vehicles division of Volkswagen AG), IVECO (which recently announced its intention to be acquired by Tata Motors), and Hyundai, each of which is working with us to integrate SuperDrive into factory-built autonomous trucks for deployment in the United States and/or Europe. We anticipate that SuperDrive-enabled trucks will be capable of operating autonomously between distribution centers via both local and highway routes, with the potential to enhance vehicle utilization, operational safety, and overall transportation efficiency.
We are targeting the commercial launch of a scalable, factory-installed driverless trucking solution in 2027. In support of this objective, we are actively engaged in joint development and validation programs with our global OEM partners. We provide our SuperDrive virtual driver software to OEM partners, who integrate the technology directly into factory-built trucks. As the autonomous trucks are utilized, fleet operators pay OEMs a fee-per-mile under a Driver-as-a-Service (“DaaS”) model. This fee replaces—and is expected to reduce—the cost fleet operators currently bear for human drivers. We expect that our OEM partners will be contractually obligated to share a fixed portion of the DaaS fee with PlusAI, aligning our revenue with customer adoption and truck utilization. Over the long-term, this creates a predictable and scalable revenue stream, similar to a software-as-a-service model. We believe this capital-light approach, through which we concentrate our efforts on software development and autonomy system integration while leveraging our partners’ capabilities in vehicle manufacturing, distribution, fleet sales and support, and related operational infrastructure, will enhance efficiency and reduce barriers to commercialization.
Additionally, we recently launched HyperFoundry, our Physical AI development platform that underpins SuperDrive and is designed to leverage the proprietary autonomy data, models, simulation tools, and infrastructure we have developed through our autonomous trucking operations. HyperFoundry includes our Data Factory, Model Factory, and SimVerse capabilities, which enable customers to access and utilize proprietary AV data, labeling tools,
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foundation models, simulation environments, and related development services to accelerate the creation and deployment of autonomous solutions. HyperFoundry is built upon more than 7 million miles of L4-validated driving data and the software infrastructure developed in support of SuperDrive. We believe HyperFoundry addresses the growing demand for Physical AI and autonomous systems by providing access to high-quality real-world data, AI models, and simulation capabilities that are difficult and costly to develop independently. Today, HyperFoundry is generating revenue through the sale of proprietary autonomy data, tools, and services and is currently being utilized by a large global trucking OEM.
Significant Events and Transactions
Proposed Business Combination
On September 2, 2026 the Company entered into the Agreement and Plan of Merger and Reorganization (“TVA III BCA”) with Texas Ventures Acquisition III Corporation (“TVA III”). Pursuant to which, and assuming a favorable vote of TVA III shareholders and PlusAI stockholders and that all other closing conditions are satisfied or waived, Merger Sub I, a newly formed subsidiary of TVA III, will merge with and into PlusAI, with PlusAI as the surviving corporation and a wholly owned subsidiary of TVA III, and immediately thereafter PlusAI will merge with and into Merger Sub II, with Merger Sub II as the surviving entity and as a wholly owned subsidiary of TVA III. Following the business combination, TVA III will be renamed “PlusAI Holdings, Inc”. PlusAI will be deemed the accounting predecessor and the Post-Closing Company will be the successor SEC registrant, which means that our financial statements for previous periods will be disclosed in the Post-Closing Company’s future periodic reports filed with the SEC.
The business combination is anticipated to be accounted for as a reverse recapitalization. Under this method of accounting, TVA III will be treated as the acquired company for financial statement reporting purposes. PlusAI has been ascribed an estimated equity value of $800.0 million in connection with the business combination. Cash proceeds, after expenses, from the business combination will fund up to approximately $266.6 million of cash to the Post-Closing Company’s balance sheet. The cash components of the business combination will be funded by TVA III’s cash in trust of $236.6 million, assuming no redemptions. The balance of the consideration to PlusAI’s equity holders will consist of equity in the Post-Closing Company. The business combination is expected to be completed during late-2026, subject to customary closing conditions.
As a consequence of the business combination, PlusAI will become the successor to a SEC-registered and Nasdaq-listed company, which will require the Post-Closing Company to hire additional personnel and implement procedures and processes to address public company regulatory requirements and customary practices. We expect to incur additional annual expenses as a public company for, among other things, directors’ and officers’ liability insurance, director fees, and additional internal and external accounting and legal and administrative resources, including increased audit and legal fees.
Expanded TRATON Partnership
In March 2026, TRATON and PlusAI entered into an Autonomy Acceleration Program Agreement (the “Acceleration Agreement”) to expand their global partnership to accelerate autonomous truck commercialization. Pursuant to the Acceleration Agreement, TRATON agreed to provide PlusAI up to an aggregate of $25 million (the “Acceleration Payment”) for providing certain autonomy data, tools & services to TRATON in support of the accelerated progression of their Level 2+ program. The Acceleration Payment was allocable to 10 discrete deliverables, with individual deliverables ranging in value from $250,000 to $6,100,000. Full payment for each deliverable was contingent upon PlusAI’s delivery of the specified data, tools, software or related documentation (the “TRATON Deliverables”) and TRATON’s acceptance of such TRATON Deliverables. As of the date if this proxy statement/prospectus all TRATON Deliverables have been delivered. Pursuant to the Acceleration Agreement, PlusAI will also perform limited support services. PlusAI retains ownership of all intellectual property rights in the TRATON Deliverables, except that TRATON has been granted a non-exclusive, worldwide, perpetual, fully-paid license to use and exploit TRATON Deliverables for any purpose except on-road L4 applications, to use and exploit TRATON deliverables associated with certain milestones under the Acceleration Agreement for L4 H2H Long haulage applications, and to distribute TRATON Deliverables solely in object code form as an integrated part of TRATON’s L2+ autonomous vehicle solutions. The Acceleration Agreement has a term of three years and is terminable by either
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party (i) upon material breach by the other party, if not cured within 30 days following notice of the breach; or (ii) immediately, if the other party becomes insolvent or unable to pay its debts as they fall due, enters into liquidation, administration, or any similar insolvency proceeding, or ceases or threatens to cease its business operations. Subject to completion of the business combination with TVA III, TRATON will receive warrants to purchase up to 7,500,000 shares of Post-Closing Company Class A common stock at an exercise price of $11.50 per share (the “TRATON Warrants”). The TRATON Warrants would vest and become exercisable as follows: (1) 2,500,000 of the shares subject to the TRATON Warrants would not be subject to vesting requirements; (2) 1,250,000 of the shares subject to the TRATON Warrants would vest upon recognition by the Company of $100 million in qualifying revenue from TRATON; (3) an additional 1,250,000 shares subject to the TRATON Warrants would vest upon recognition by the Company of $200 million in cumulative qualifying revenue from TRATON; and (4) the remaining 2,500,000 shares subject to the TRATON Warrants would vest upon recognition by the Company of $400 million in cumulative qualifying revenue from TRATON. The TRATON Warrants would otherwise have similar terms to the PIPE Warrants and would be scheduled to expire on the seventh anniversary of the date of issue. We further expect that a designee of TRATON will join the board of directors of PlusAI or the Post-Closing Company. The foregoing description of the Acceleration Agreement does not purport to be complete and is qualified in its entirety by reference to the Acceleration Agreement, a copy of which is filed herewith as Exhibit 10.22.
Factors Affecting Our Performance
Our financial position and results of operations depend to a significant extent on the following factors further discussed below.
Commercialization
Our success depends on our ability with our partners to commercialize autonomous driving technology at scale and meet our customers’ business needs. We partner with truck OEMs, including TRATON GROUP, IVECO and Hyundai, that are seeking to manufacture autonomous trucks capable of incorporating our L4 autonomous driving technology.
We believe that our early adoption of a data-driven AI paradigm and a proprietary dataset collected from real-world operations has provided us with a technological advantage in deploying innovative use of AI models. SuperDrive features a layered safety architecture that combines AI-decision making, rule-based guardrails, redundant fallback systems and remote operator support for commercial grade reliability. By leveraging deep learning models, trained on vast quantities of real-world and simulated data, SuperDrive is designed to perform complex driving tasks with human-like reasoning and to generalize more effectively across unfamiliar scenarios. This data-driven architecture reduces the software complexity associated with classical rules-based systems by replacing extensive hand-coded logic with generalized, model-driven behavior. The maturation of our software has enabled us to achieve greater than 98% autonomy on pilot routes. We expect the commercial launch of SuperDrive, as a software-only, capital-light autonomous trucking platform, in 2027. However, we have limited experience to date in applying our autonomous driving technology at scale, and our ability to develop, deliver, and commercialize our autonomous driving system at scale is still unproven. There is no guarantee that the hardware, software, and components required for mass production can be successfully developed to our specifications, timely delivered or properly integrated. The extent to which our OEM partners can continue to secure efficient, automated, low-cost production capabilities and processes and reliable sources of component supply directly affects their ability to meet the quality, price, engineering, design, and production standards required to successfully deploy our autonomous driving system and grow our revenue in a cost-efficient manner.
Time to Market
Our ability to achieve profitability depends on technological and commercial milestone achievement. Delays in development timelines or technological integration with third parties that we are working or will work with could result in us being unable to scale in the time frame we anticipate. We anticipate that we will be commercially ready to launch SuperDrive-enabled trucks in 2027 beginning in the United States and expanding into Europe thereafter.
If our assumptions about the commercialization and/or adoption of our technology prove overly optimistic we may fail to generate operating cash flow and may incur delays to our ability to achieve profitability. This may also
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lead us to make changes in our go-to-market plans, which could result in unanticipated delays or cost overruns, which could in turn adversely impact margins and cash flows.
Demand for Autonomous Trucking Solutions
Our future growth is dependent on the demand for and end fleets’ willingness to adopt autonomous driving solutions for their trucking needs as well as regulation of autonomous driving solutions. The market for autonomous driving trucking solutions is still evolving and is characterized by rapid technology advancement, intense competition, fleet demand, and evolving government regulations. Perceptions about the features, quality, safety, performance, and cost of autonomous driving trucks, technology breakthroughs, or developments in alternative or analogous technologies, as well as the regulatory and macroeconomic environment, could directly affect the adoption of autonomous driving solutions.
In addition, we operate within an industry that is subject to substantial and rapidly evolving laws, regulations, and standards related to environmental, manufacturing, safety, testing, data protection, and cybersecurity, and any failure to comply with these laws, regulations or standards, including as they evolve, could harm our reputation, subject us to significant fines and liability and materially and adversely affect our business, results of operations and financial condition. In addition, government regulations and economic incentives could also drive or hamper the demand for our products and services.
Funding for Operations
Since our inception, we have dedicated substantially all of our resources to the development of commercial-ready autonomous trucking technology. For the six months ended June 30, 2026, we had total net cash outflows of $5.7 million. For the years ended December 31, 2025 and 2024, we had total net cash outflows of $25.6 million and $28.8 million, respectively. We will continue to incur losses and have negative net operating cash flows until we achieve commercial scale, as we continue to incur operational expenses related to our efforts to launch and scale our autonomous driving solution. In particular, a core part of our strategy is to continue making sustained investments in research and development, and we have dedicated significant resources to these activities since our inception. Our research and development expenses were $21.6 million and $28.2 million, representing 53% and 74% of our total operating expenses for the six months ended June 30, 2026 and 2025, respectively. Our research and development expenses were $51.9 million and $39.7 million representing 72.0% and 68.7% of our total operating expenses for the years ended December 31, 2025 and 2024, respectively. As we continue to train and optimize our AI models towards the goal of developing commercial-ready autonomous driving technology, we expect our research and development expenses to increase and to continue to represent a significant percentage of our total operating expenses. Therefore, we will require additional capital to fund our research and development activities for the foreseeable future. Until we can generate sufficient operating cash flow from the deployment and utilization of our virtual driver software, we expect to finance our operations through a combination of existing cash on hand, equity, and debt financing. For additional discussion of our liquidity and capital resources, please see the “Liquidity and Capital Resources” section below.
Scalable Financial Model
We believe that our strong unit economics and software model will give us the opportunity to establish high operating margins when operating at scale. We believe our business model is positioned for scalability by leveraging third party partnerships so that we can focus our efforts on core technology development and commercialization. We expect to generate revenue based on miles/kilometers driven autonomously for each truck equipped with our software.
We operate in a capital light model and, accordingly, do not expect that we will require significant incremental capital expenditures as revenue grows. Improvements from scale are expected to increase gross margins.
We believe our differentiated technology provides a compelling value proposition for favorable margins and unit economics in an industry with increasing driver shortages. We expect our gross margin to increase from scaling following a targeted commercial launch in 2027 as miles/kilometers driven using our virtual driving software increase. However, it is possible that competition may lead to pricing pressure and lower margins that negatively impact operating results. If we do not generate the margins expected upon commercialization of the DaaS model, we may be
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required to raise additional debt or equity capital, which may not be available or may only be available on terms that are onerous to our stockholders.
Material Stock-Based Compensation Related to Business Combination
As of June 30, 2026, PlusAI had approximately $46.5 million of unrecognized stock-based compensation expense related to unvested equity-classified performance-based restricted stock units ("PRSUs"). As of December 31, 2025, PlusAI had approximately $34.6 million of unrecognized stock-based compensation expense related to unvested equity-classified PRSUs. The closing of the business combination with TVA III represents a qualified liquidity event for the vesting of the outstanding PRSUs to the extent that the underlying service requirement is met as of the closing date.
Assuming the consummation of the business combination as of June 30, 2026, PlusAI would recognize approximately $34.4 million in stock-based compensation expense for the PRSUs to the extent the service condition was met, including $24.2 million as research and development expenses and $10.2 million as selling, marketing, general and administrative expenses, thereby materially increasing our net loss for that period.
Assuming the consummation of the business combination as of December 31, 2025, PlusAI would recognize approximately $22.8 million in stock-based compensation expense for the PRSUs to the extent the service condition was met, including $15.3 million as research and development expenses and $7.5 million as selling, marketing, general and administrative expenses, thereby materially increasing our net loss for that period.
Assuming the consummation of the business combination as of June 30, 2026, PlusAI would recognize the remaining unrecognized stock-based compensation of $12.1 million, which includes $8.4 million as research and development expenses and $3.7 million as selling, marketing, general and administrative expenses. Assuming the consummation of the business combination as of December 31, 2025, PlusAI would recognize the remaining unrecognized stock-based compensation of $11.8 million, which consist of $8.8 million as research and development expenses and $3.0 million as selling, marketing, general and administrative expenses. This future expense will continue to impact our results of operations by increasing our operating expenses and net loss in the periods when it is recognized. The exact timing and amount of this expense may vary based on the closing date of the business combination and on potential forfeitures, which are accounted for as they occur.
Key Operating Metrics
In parallel with technical testing, we are tracking key readiness metrics to assess system maturity and alignment with commercialization objectives. These include:
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We believe that continued progress on these metrics is critical to demonstrating system safety, validating commercial readiness, and building stakeholder confidence.
Components of Results of Operations
Revenue
Our revenues to date are primarily generated through our HyperFoundry services to provide labeled data and licenses of our technology to customers which assist our customers in accelerating their autonomous driving solutions. In the future, we plan to generate revenue from the provision of self-driving technology and solutions to third-party corporate customers.
Operating Expenses
Research and Development
Research and development expenses consist primarily of personnel-related costs and stock-based compensation for engineering and technical employees, depreciation expenses, equipment-related expenses, and professional services fees, primarily for consulting and outsourcing services related to developing self-driving technology and other research and development activities. We enter into non-recurring engineering (“NRE”) arrangements under which we receive cost reimbursements from collaboration partners. These reimbursements are recognized over time using a cost-to-cost input method (i.e., costs incurred to date relative to total estimated costs), which reflects our progress toward satisfying our obligations under the development activities, as a reduction to research and development expenses in our consolidated statements of operations and comprehensive loss.
Sales, Marketing, General and Administrative
Sales, marketing, general, and administrative expenses consist primarily of personnel-related costs and stock-based compensation for sales, general, and administrative personnel, professional service fees, office rental, depreciation expenses, and other daily expenses that are related to the sales, management, and administrative departments.
HyperFoundry Services Support
HyperFoundry Services Support consists primarily of direct labor costs, direct fulfillment costs, and other indirect costs including overhead allocations for depreciation and amortization, facilities and infrastructure costs related to the Company’s HyperFoundry services.
Interest Income
Interest income consists of interest income earned on cash and cash equivalents, as well as treasury bills classified as short-term marketable securities.
Change in Fair Value of Simple Agreements for Future Equity
We account for all outstanding simple agreements for future equity (“SAFEs”) as liabilities, which are remeasured at fair value at each reporting period end, with changes in fair value recorded in our consolidated statements of operations and comprehensive loss.
Change in Fair Value of Warrant Liability
We issued warrants on our redeemable convertible preferred stock, which are classified as liabilities since the underlying shares may become redeemable based on events that are outside of our control. Our warrants are remeasured at fair value at each reporting period end with changes in fair value recorded in our consolidated statements of operations and comprehensive loss.
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Income Tax Expense
Income tax expense primarily consists of income taxes in certain jurisdictions in which we conduct business. We have a full valuation allowance for deferred tax assets, including net operating loss carryforwards and tax credits, primarily related to research and development.
Results of Operations for the Six Months Ended June 30, 2026 and 2025
The following table sets forth the results of operations for the periods presented:
|
|
For the Six Months Ended June 30, |
|
|
Dollar |
|
|
% |
|
|||||||
(in thousands) |
|
2026 |
|
|
2025 |
|
|
Change |
|
|
Change |
|
||||
Revenue |
|
$ |
25,075 |
|
|
$ |
41 |
|
|
$ |
25,034 |
|
|
* |
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Research and development(1) |
|
|
21,618 |
|
|
|
28,227 |
|
|
|
(6,609 |
) |
|
|
(23 |
)% |
Sales, marketing, general and administrative(1) |
|
|
18,410 |
|
|
|
9,799 |
|
|
|
8,611 |
|
|
|
88 |
% |
HyperFoundry services support(1) |
|
|
819 |
|
|
|
— |
|
|
|
819 |
|
|
* |
|
|
Total operating expenses |
|
|
40,847 |
|
|
|
38,026 |
|
|
|
2,821 |
|
|
|
7 |
% |
Loss from operations |
|
|
(15,772 |
) |
|
|
(37,985 |
) |
|
|
22,213 |
|
|
|
(58 |
)% |
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest income |
|
|
121 |
|
|
|
581 |
|
|
|
(460 |
) |
|
|
(79 |
)% |
Interest expense |
|
|
(9 |
) |
|
|
(6 |
) |
|
|
(3 |
) |
|
|
50 |
% |
Other expense, net |
|
|
(22 |
) |
|
|
(792 |
) |
|
|
770 |
|
|
|
(97 |
)% |
Loss from investments, net |
|
|
(3 |
) |
|
|
(88 |
) |
|
|
85 |
|
|
|
(97 |
)% |
Impairment of long-term investment |
|
|
— |
|
|
|
(9,295 |
) |
|
|
9,295 |
|
|
|
100 |
% |
Change in fair value of simple agreements for future equity |
|
|
7,218 |
|
|
|
(4,746 |
) |
|
|
11,964 |
|
|
|
(252 |
)% |
Change in fair value of warrant liabilities |
|
|
572 |
|
|
|
(4,528 |
) |
|
|
5,100 |
|
|
|
(113 |
)% |
Total other income (expense), net |
|
|
7,877 |
|
|
|
(18,874 |
) |
|
|
26,751 |
|
|
|
(142 |
)% |
Loss before income taxes |
|
|
(7,895 |
) |
|
|
(56,859 |
) |
|
|
48,964 |
|
|
|
(86 |
)% |
Income tax expense |
|
|
(1 |
) |
|
|
(71 |
) |
|
|
70 |
|
|
|
(99 |
)% |
Net loss |
|
$ |
(7,896 |
) |
|
$ |
(56,930 |
) |
|
$ |
49,034 |
|
|
|
(86 |
)% |
* Percentage is not meaningful
|
|
For the Six Months Ended June 30, |
|
|||||
(in thousands) |
|
2026 |
|
|
2025 |
|
||
Research and development |
|
$ |
- |
|
|
$ |
223 |
|
Sales, marketing, general and administrative |
|
|
16 |
|
|
|
493 |
|
HyperFoundry services support |
|
|
- |
|
|
|
- |
|
Total stock-based compensation |
|
$ |
16 |
|
|
$ |
716 |
|
Revenue
Revenue increased by $25.0 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. During the six months ended June 30, 2026, revenue was primarily generated from a standalone HyperFoundry contract with TRATON to deliver labeled data and licenses of our technology with associated documentation. During the six months ended June 30, 2025, revenue was limited to software maintenance revenue under a historical customer arrangement that had been substantially completed prior to the periods presented.
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Research and Development
Research and development (“R&D”) expenses decreased by $6.6 million, or 23%, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The change was primarily related to $3.6 million of lower R&D spend and OEM projects, $2.6 million of lower personnel-related compensation costs due to lower headcount, and $0.3 million of lower travel and entertainment costs.
Sales, Marketing, General, and Administrative
Sales, Marketing, General, and Administrative (“SG&A”) expenses increased by $8.6 million, or 88%, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The change was primarily related to a $10.2 million write-off of deferred transaction costs associated with the terminated de-SPAC Transaction during April 2026 and $0.6 million increase in professional services for external legal and various other consultants to support the readiness for public company operation, partially offset by $1.4 million of lower personnel-related costs, $0.6 million of lower sales and marketing costs, and $0.3 million of lower depreciation expense.
HyperFoundry Services Support
HyperFoundry Services Support was $0.8 million for the six months ended June 30, 2026 as compared to nil for the six months ended June 30, 2025. HyperFoundry Services Support includes direct labor costs, direct fulfillment costs and other indirect costs of providing the Company’s HyperFoundry services. No HyperFoundry services were provided to customers in 2025.
Interest Income
We generate interest income primarily from our investments in highly liquid, low-risk cash equivalents. The interest income recognized during the periods presented is derived from the applicable interest rate and the size of our cash equivalent balances. Interest income decreased by $0.5 million, or 79%, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The decrease was primarily due to lower average cash and investment balances as we utilized available liquidity to finance our operations.
Other expense, net
Other expense, net, decreased by $0.8 million, or 97%, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The change was primarily due to $1.1 million lower 409a discount option expense, partially offset by $0.3 million foreign currency gain from conversion of foreign currency.
Impairment of Long-Term Investment
Impairment of long-term investment decreased by $9.3 million, or 100%, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The change was primarily due to the $9.3 million impairment made to a long-term investment in the six months ended June 30, 2025. We did not record any impairment of long-term investment during the six months ended June 30, 2026.
Change in Fair Value of Simple Agreements for Future Equity
Change in fair value of SAFEs increased by $12.0 million, or 252%, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The increase was primarily due to changes in the underlying fair value measurement assumptions.
Change in Fair Value of Warrant Liabilities
Change in fair value of warrant liabilities increased by $5.1 million, or 113%, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The increase was primarily attributable to a $6.3 million unfavorable fair value adjustment recorded during the six months ended June 30, 2025, reflecting changes in the
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underlying valuation assumptions at that time. No comparable adjustment occurred during the six months ended June 30, 2026.
Results of Operations for the Audited Consolidated Financial Statements
The following table sets forth the results of operations for the periods presented:
|
|
For the Year Ended December 31, |
|
|
Dollar |
|
|
% |
|
|||||||
(in thousands) |
|
2025 |
|
|
2024 |
|
|
Change |
|
|
Change |
|
||||
Revenue |
|
$ |
67 |
|
|
$ |
132 |
|
|
$ |
(65 |
) |
|
|
(49 |
%) |
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Research and development(1) |
|
|
51,912 |
|
|
|
39,745 |
|
|
|
12,167 |
|
|
|
31 |
% |
Sales, marketing, general and administrative(1) |
|
|
20,154 |
|
|
|
18,043 |
|
|
|
2,111 |
|
|
|
12 |
% |
Total operating expenses |
|
|
72,066 |
|
|
|
57,788 |
|
|
|
14,278 |
|
|
|
25 |
% |
Loss from operations |
|
|
(71,999 |
) |
|
|
(57,656 |
) |
|
|
(14,343 |
) |
|
|
25 |
% |
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest income |
|
|
715 |
|
|
|
3,122 |
|
|
|
(2,407 |
) |
|
|
(77 |
%) |
Interest expense |
|
|
(37 |
) |
|
|
(32 |
) |
|
|
(5 |
) |
|
|
16 |
% |
Other expense, net |
|
|
(432 |
) |
|
|
(363 |
) |
|
|
(69 |
) |
|
|
19 |
% |
Loss from investments, net |
|
|
(187 |
) |
|
|
(1,590 |
) |
|
|
1,403 |
|
|
|
(88 |
%) |
Impairment of long-term investment |
|
|
(9,295 |
) |
|
|
(1,326 |
) |
|
|
(7,969 |
) |
|
|
601 |
% |
Change in fair value of simple agreements for future equity |
|
|
(7,046 |
) |
|
|
(849 |
) |
|
|
(6,197 |
) |
|
|
730 |
% |
Change in fair value of warrant liabilities |
|
|
(5,060 |
) |
|
|
(2,430 |
) |
|
|
(2,630 |
) |
|
|
108 |
% |
Total other income (expense), net |
|
|
(21,342 |
) |
|
|
(3,468 |
) |
|
|
(17,874 |
) |
|
|
515 |
% |
Loss before income taxes |
|
|
(93,341 |
) |
|
|
(61,124 |
) |
|
|
(32,217 |
) |
|
|
53 |
% |
Income tax expense |
|
|
(69 |
) |
|
|
— |
|
|
|
(69 |
) |
|
* |
|
|
Net loss |
|
$ |
(93,410 |
) |
|
$ |
(61,124 |
) |
|
$ |
(32,286 |
) |
|
|
53 |
% |
* Percentage is not meaningful
|
|
For the Year Ended December 31, |
|
|||||
(in thousands) |
|
2025 |
|
|
2024 |
|
||
Research and development |
|
$ |
245 |
|
|
$ |
2,506 |
|
Sales, marketing, general and administrative |
|
|
1,585 |
|
|
|
1,574 |
|
Total stock-based compensation |
|
$ |
1,830 |
|
|
$ |
4,080 |
|
Revenue
During the periods presented, we had one contract with a customer. We were engaged to retrofit a fleet of trucks with the PlusDrive system, which was fully completed prior to July 31, 2023. We are paid an agreed-upon fee for each retrofitted truck, and an annual software maintenance fee per truck. We do not expect future sales of goods or services outside of receiving annual software maintenance fees under this contract.
Research and Development
Research and development (“R&D”) expenses increased by $12.2 million, or 31%, for the year ended December 31, 2025 as compared to the year ended December 31, 2024. The change was primarily related to a $10.9 million reduction of NRE reimbursements from collaboration partners recorded as a reduction to our R&D expenses, and a $4.1 million increase in personnel-related costs due to higher headcount. This is partially offset by a reduction of $2.3 million in stock-based compensation due to one-time charges related to the modification of certain restricted stock
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awards recognized during year ended December 31, 2024 and a $0.6 million decrease in other costs compared to the prior year.
Sales, Marketing, General, and Administrative
Sales, Marketing, General, and Administrative (“SG&A”) expenses increased by $2.1 million, or 12%, for the year ended December 31, 2025 as compared to the year ended December 31, 2024. The change was primarily related to $2.1 million increase in professional services for external legal and various other consultants to support the readiness for public company operations.
Interest Income
We generate interest income primarily from our investments in highly liquid, low-risk cash equivalents. The interest income recognized during the periods presented is derived from the applicable interest rate, and the size of our cash equivalent balances. Interest income decreased by $2.4 million, or 77%, for the year ended December 31, 2025 as compared to the year ended December 31, 2024. The decrease was primarily due to lower average cash and investment balances as we utilized available liquidity to finance our operations.
Loss from investments, net
Loss from investments, net, decreased by $1.4 million, or 88%, for the year ended December 31, 2025 as compared to the year ended December 31, 2024. The change was primarily due to unrealized losses on short-term marketable securities in 2024 related to Luminar Technologies, Inc. (“Luminar”).
Impairment of Long-Term Investment
Impairment of long-term investment increased by $8.0 million, or 601%, for the year ended December 31, 2025 compared to the year ended December 31, 2024. The change was primarily due to an impairment of $9.3 million recorded during the year ended December 31, 2025 in connection with the disposal of our investment in Plus PRC, such that the carrying value of this investment was adjusted to the proceeds receivable. In contrast, during the year ended December 31, 2024, an impairment of $1.3 million was recorded in connection with an observable transaction with Plus PRC equity.
Change in Fair Value of Simple Agreements for Future Equity
Change in fair value of SAFEs increased by $6.2 million, or 730%, for the year ended December 31, 2025 as compared to the year ended December 31, 2024. The increase was due to changes in the underlying fair value measurement assumptions and driven by the increased probability of a liquidity event due to the execution of the Merger Agreement and related progress in public company readiness. Additionally, the Company entered into new SAFE agreements during 2025, resulting in a larger balance that contributed to the increase in the change in the fair value of SAFEs.
Change in Fair Value of Warrant Liabilities
Change in fair value of warrant liabilities increased by $2.6 million, or 108%, for the year ended December 31, 2025 as compared to the year ended December 31, 2024. The increase was a result of changes to the underlying fair value measurement assumptions used in the valuation model, including the increased probability of a liquidity event due to the execution of the Merger Agreement.
Liquidity and Capital Resources
Sources and Uses of Funds
As of June 30, 2026, we had $18.3 million of cash and cash equivalents and short-term marketable securities. As of December 31, 2025, we had $24.2 million of cash and cash equivalents and short-term marketable securities. We have determined that, without additional financing, our existing cash and cash equivalents and short-term marketable securities, along with the SAFE financing received through the date of this proxy statement/prospectus, are not
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sufficient to fund our operations for at least 12 months from the issuance date for the unaudited consolidated financial statements for the six months ended June 30, 2026. On December 19, 2025, we received a notice from a Tranche 1 SAFE holder pursuant to which it exercised its optional redemption right. Under the terms of the Tranche 1 SAFE, a SAFE holder must provide notice to us at least 40 days prior to the exercise of the redemption right (the “Redemption Date”), and we are obligated to pay in cash the requested redemption amount no later than 10 days after the Redemption Date. The Redemption Date for this notice was January 28, 2026 and the required payment date was February 7, 2026. Unless the parties negotiate an alternative arrangement, the Company communicated to the Tranche 1 holder its plans to make payment of $10.0 million to settle the outstanding SAFE at the closing of the Transactions. The Company has not incurred any interest or penalties related to the delayed payment. If the Transactions do not close in a timely manner, or at all, any such payment could materially impact our financial position and operations and require us to seek additional financing.
We have financed operations primarily through the sale of approximately $51.1 million of SAFEs to investors and strategic partners, which included $41.1 million in cash proceeds and $10.0 million in exchange for certain marketable securities. During 2026, through the time of this filing, we have not received additional SAFE financing from what was received in 2025 to continue funding our operations through the anticipated closing of the Transactions. In connection with the closing of the transactions contemplated by the TVA III BCA, the SAFEs will be converted into shares of Post-Closing Company Class A common stock, and the number of shares will be adjusted to reflect the Exchange Ratio. Our principal uses of cash include financing of our ongoing research and development and administrative activities.
If sufficient funds on acceptable terms are not available when needed, we could be required to significantly reduce our operating expenses and delay, reduce the scope of, or eliminate one or more of our development activities. Failure to manage discretionary spending or raise additional financing, as needed, may adversely impact our ability to achieve our intended business objectives.
In part to augment our cash resources, we entered into the TVA III BCA, which is expected to close within the second half of 2026. The audited consolidated financial statements of PlusAI do not reflect the transactions contemplated by the TVA III BCA. However, we believe that the net proceeds from the business combination, together with our existing cash, cash equivalents, and short-term marketable securities as of the date of this proxy statement/prospectus, will provide us with sufficient financing to fund our research and development, and administrative activities into 2027 under the 25% Redemption and the No Redemption Scenarios. The Maximum Redemption Scenario will not provide the Company with sufficient liquidity into 2027. Since the closing of the business combination is not solely within our control, the amounts held by TVA III are not considered available to finance our operations for the unaudited consolidated financial statements of PlusAI for the six months ended June 30, 2026.
In the future, we plan to access capital through potential public or private equity offerings, debt financings, and other sources. We may also from time to time enter into shorter term commercial agreements with our partners to supplement our cash needs, which agreements may involve the sale or license of data, tools, software and related documentation or the issuance of Post-Closing Company Class A common stock or securities convertible into Post-Closing Company Class A common stock. We are also seeking to access the capital markets by becoming a public company as a result of the business combination, if consummated. We have historically been able to raise capital through the issuance and sale of equity and equity-linked instruments, such as redeemable convertible preferred stock and simple agreements for future equity, although no assurance can be provided that we would continue to be successful doing so in the future. Our ability to continue as a going concern depends on additional financing to fund our operations. There is no assurance that additional financing will be available to us on acceptable terms or at all. Accordingly, our unaudited consolidated financial statements for the six months ended June 30, 2026 disclose a substantial doubt about our ability to continue as a going concern.
Our unaudited consolidated financial statements for the six months ended June 30, 2026 do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary if we are unable to continue as a going concern due to the inability to obtain adequate financing in the future. The deadline by which TVA III must complete a business combination transaction is October 24, 2026. TVA III has scheduled an extraordinary general meeting to be held on October 19, 2026 for its shareholders to vote on, among other things, a proposal to amend the TVA III Articles to extend such deadline to July 24, 2027.
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Cash Flows For the Six Months Ended June 30, 2026 and 2025
The following table summarizes our consolidated cash flows for the periods presented:
|
|
For the Six Months Ended June 30, |
|
|||||
(in thousands) |
|
2026 |
|
|
2025 |
|
||
Net cash used in operating activities |
|
$ |
(5,512 |
) |
|
$ |
(36,460 |
) |
Net cash provided by (used in) investing activities |
|
|
2,126 |
|
|
|
(689 |
) |
Net cash provided by financing activities |
|
|
(2,344 |
) |
|
|
2,761 |
|
Net decrease in cash and cash equivalents |
|
$ |
(5,730 |
) |
|
$ |
(34,388 |
) |
Overview of PlusAI Cash Flows For the Six Months Ended June 30, 2026 and 2025
To fund our continuing operations, we relied on $18.3 million and $24.0 million in cash and cash equivalents as of June 30, 2026 and December 31, 2025, respectively, as well as cash inflows from option exercises and proceeds from the sale of our long term investment received during the six months ended June 30, 2026 and cash inflows from financing activities, including SAFE-related financing during the six months ended June 30, 2025.
Material Adjustments for Non-Cash Investing and Financing Activities
During the six months ended June 30, 2026, and 2025, we recorded accretion of redeemable convertible preferred stock to the redemption value of $17.1 million and $32.6 million, respectively. These non-cash adjustments are excluded from the cash inflows from financing activities since they represent a deemed distribution to preferred stockholders with a corresponding increase to temporary equity based on the applicable liquidation preferences of our redeemable convertible preferred stock.
As of June 30, 2026, there was $0.7 million in deferred transaction costs capitalized on our balance sheet, of which $0.3 million remained unpaid as of that date. During the six months ended June 30, 2026, we recorded a write-off of $10.2 million of previously capitalized deferred transaction costs in connection with the termination of a proposed business combination on April 20, 2026, of which $6.6 million remained unpaid and was included in accounts payable and accrued and other liabilities as of June 30, 2026. Since we are expected to be the acquirer of TVA III for accounting purposes, the direct and incremental costs associated with the TVA III BCA are deferred and will be recorded against the proceeds from the reverse recapitalization upon consummation of the business combination with TVA III. Payments of deferred transaction costs are reflected as cash outflows from financing activities in the respective periods.
Net Cash Flows from Operating Activities
Net cash used in operating activities for the six months ended June 30, 2026 was $5.5 million. This amount consisted of our net loss of $7.9 million and $0.9 million net change in operating assets and liabilities, partially offset by non-cash charges of $3.3 million. Our non-cash charges primarily consisted of a $10.2 million write-off of deferred offering costs, $0.6 million of depreciation and amortization and $0.3 million of amortization of right-of-use assets, partially offset by $7.2 million gain from the change in fair value of simple agreements for future equity and a $0.6 million gain from the change in fair value of warrant liabilities. The net change in operating assets and liabilities was primarily due to a $2.6 million increase in accounts receivable, net, a $1.7 million decrease in accrued and other liabilities, and a $0.4 million decrease in operating lease liabilities, partially offset by a $1.7 million decrease in prepaid expenses and other current assets, and a $1.5 million increase in accrued compensation and benefits and a $0.5 million increase in the discounted options liability.
Net cash used in operating activities for the six months ended June 30, 2025 was $36.5 million. This amount consisted of our net loss of $56.9 million and $0.9 million net change in operating assets and liabilities, partially offset by non-cash charges of $21.4 million. Our non-cash charges primarily consisted of $9.3 million of impairment of a long-term investment, $4.7 million loss from the change in fair value of simple agreements for future equity, $4.5 million loss from the change in fair value of warrant liabilities, $1.1 million of non-cash lease expense, $1.0 million of depreciation and amortization, and $0.7 million of stock-based compensation. The net change in operating assets and liabilities was primarily due to a $1.3 million decrease in operating lease liabilities, a $0.9 million decrease in
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accrued compensation and benefits, a $0.8 million decrease in accrued and other liabilities, and a $0.4 million decrease in accounts payable, partially offset by $1.6 million increase in the discounted options liability and a $0.9 million decrease in accounts receivables, net.
Net Cash Flows from Investing Activities
Net cash provided by investing activities for the six months ended June 30, 2026 was $2.1 million, which primarily consisted of $2.0 million of proceeds collected from the sale of a long-term investment, $0.2 million of proceeds from the maturity of short-term investments, and $0.1 million of proceeds from the sale of property and equipment, partially offset by $0.2 million of purchases of property and equipment, net.
Net cash used in investing activities for the six months ended June 30, 2025 was $0.7 million, which primarily consisted of $0.8 million of purchases of property and equipment and $0.4 million of purchases of short-term investments, partially offset by $0.3 million of proceeds from the maturity of short-term investments and $0.2 million of proceeds from the sale of property and equipment.
Net Cash Flows from Financing Activities
Net cash used in financing activities for the six months ended June 30, 2026 was $2.3 million, which primarily consisted of $2.6 million of payments of deferred transaction costs, partially offset by $0.3 million of proceeds from the exercise of stock options.
Net cash provided by financing activities for the six months ended June 30, 2025 was $2.8 million, which primarily consisted of $2.4 million of cash received from the issuance of simple agreements for future equity and $0.4 million of proceeds from the exercise of stock options, partially offset by $0.1 million of payments of deferred offering costs.
Cash Flows For the Years Ended December 31, 2025 and 2024
The following table summarizes our consolidated cash flows for the periods presented:
|
|
For the Year Ended December 31, |
|
|||||
(in thousands) |
|
2025 |
|
|
2024 |
|
||
Net cash used in operating activities |
|
$ |
(65,879 |
) |
|
$ |
(44,246 |
) |
Net cash provided by (used in) investing activities |
|
|
16,916 |
|
|
|
(1,189 |
) |
Net cash provided by financing activities |
|
|
23,409 |
|
|
|
16,670 |
|
Net decrease in cash and cash equivalents |
|
$ |
(25,554 |
) |
|
$ |
(28,765 |
) |
Overview of PlusAI Cash Flows For the Years Ended December 31, 2025 and 2024
To fund our continuing operations, we relied on $49.8 million and $78.4 million in cash and cash equivalents as of January 1, 2025 and 2024, respectively, as well as significant cash inflows from financing activities, primarily from the issuance of SAFEs and the proceeds received from the exercise of stock options during the years ended December 31, 2025 and 2024. Additionally, we had significant cash inflows from investing activities during the year ended December 31, 2025 related to the sale of the long-term investment in Plus PRC.
Material Adjustments for Non-Cash Investing and Financing Activities
During the years ended December 31, 2025, and 2024, we recorded accretion of redeemable convertible preferred stock to the redemption value of $58.6 million and $29.8 million, respectively. These non-cash adjustments are excluded from the cash inflows from financing activities since they represent a deemed distribution to preferred stockholders with a corresponding increase to temporary equity based on the applicable liquidation preferences of our redeemable convertible preferred stock.
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During the year ended December 31, 2024, no deferred offering costs were capitalized. During the year ended December 31, 2025, we recorded $8.0 million in deferred transaction costs, of which $7.1 million remained unpaid and were included in accounts payable and accrued and other liabilities as of December 31, 2025. Since we are expected to be the acquirer of TVA III for accounting purposes, the direct and incremental costs associated with this transaction are deferred and will be recorded against the proceeds from the reverse recapitalization upon consummation of the Merger. Payments of these deferred transaction costs are reflected as cash outflows from financing activities in the respective reporting periods.
Net Cash Flows from Operating Activities
Net cash used in operating activities for the year ended December 31, 2025 was $65.9 million. This amount consisted of our net loss of $93.4 million, partially offset by non-cash charges of $27.0 million and a change in net operating assets and liabilities of $0.5 million. Our non-cash charges primarily consisted of $9.3 million for impairment of long-term investment, $7.0 million loss from a change in fair value of simple agreements for future equity, $5.1 million loss from a change in fair value of warrant liabilities, $2.1 million for non-cash lease expense, a $1.8 million for stock-based compensation, and $1.6 million for depreciation and amortization of our property and equipment, and $0.1 million in other non-cash changes. The net change in operating assets and liabilities was primarily due to a $1.3 million decrease in accounts and other receivable, a $1.2 million increase in discounted options liability, a $0.4 million decrease in prepaid expenses and other current assets, a $0.3 million increase in accounts payable and a $0.3 million decrease in other noncurrent assets, partially offset by a $2.3 million decrease in operating lease liabilities, and $0.7 million decrease in accrued and other liabilities.
Net cash used in operating activities for the year ended December 31, 2024 was $44.2 million. This amount consisted of our net loss of $61.1 million, partially offset by non-cash charges of $14.8 million and a change in net operating assets and liabilities of $2.1 million. Our non-cash charges primarily consisted of $4.1 million for stock-based compensation, $2.5 million for depreciation and amortization, a $2.4 million loss for a change in fair value of warrant liabilities, $2.1 million for non-cash lease expense, an $1.6 million unrealized loss on short-term marketable securities, $1.3 million for impairment of long-term investment, and a $0.8 million loss from a change in fair value of simple agreements for future equity. The net change in operating assets and liabilities was primarily due to a $4.3 million decrease in accounts and other receivables and a $1.2 million decrease in other noncurrent assets, a $0.8 million increase in accounts payable, and $0.3 million increase in other operating balances, partially offset by a $2.3 million decrease in operating lease liabilities, a $1.2 million decrease in advance payments, $0.6 million from accrued and other liabilities, and $0.5 million of prepaid expenses and other current assets.
Net Cash Flows from Investing Activities
Net cash provided by investing activities for the year ended December 31, 2025 was $16.9 million, which primarily consisted of $18.0 million from the sale of long-term investment in Plus PRC, $0.7 million in the proceeds from maturity of short-term marketable securities, and $0.3 million from proceeds of sales of property and equipment, partially offset by $1.5 million from the purchases of property and equipment, and $0.6 million in cash outflows from purchases of short-term marketable securities.
Net cash used in investing activities for the year ended December 31, 2024 was $1.2 million, which primarily consisted of $1.0 million from the purchase of property and equipment, and $0.5 million in cash outflows from purchases of short-term marketable securities, partially offset by $0.3 million from the proceeds from the maturity of short-term marketable securities.
Net Cash Flows from Financing Activities
Net cash provided by financing activities for the year ended December 31, 2025 was $23.4 million, which primarily consisted of $24.4 million from the cash received from the issuance of SAFEs and $1.9 million from the exercise of stock options. This amount was offset by $2.0 million repurchase of restricted common stock awards and $0.9 million for the payment of deferred issuance costs.
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Net cash provided by financing activities for the year ended December 31, 2024 was $16.7 million, which consisted of $16.7 million from the cash received from the issuance of SAFEs.
Off-Balance Sheet Arrangements
As of June 30, 2026 and December 31, 2025, we do not have any off-balance sheet arrangements.
As of December 31, 2025 and 2024, we did not have any off-balance sheet arrangements.
Quantitative and Qualitative Disclosures about Market Risk
Interest Rate Risk
As of June 30, 2026, we had cash and cash equivalents of $18.3 million and did not hold any short-term marketable securities, all with maturities of less than one year. As of December 31, 2025, we had cash and cash equivalents of $24.0 million and investments in marketable debt securities of $0.2 million with maturities of less than one year. The goals of our investment policy are liquidity and capital preservation. We do not enter into investments for trading or speculative purposes. We believe that we do not have any material exposure to changes in the fair value of our cash equivalents or marketable securities as a result of changes in interest rates due to the short‑term nature of these assets.
Emerging Growth Company Status
As an “emerging growth company,” the Jumpstart Our Business Startups Act of 2012, as amended, (the “JOBS Act”) allows the Post-Closing Company to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies. TVA III has elected to use this extended transition period under the JOBS Act. As a result, our consolidated financial statements may not be comparable to the financial statements of issuers who are required to comply with the effective dates for new or revised accounting standards that are applicable to public companies, which may make Post-Closing Company Class A common stock less attractive to investors. Following the Closing, we will need to re-evaluate our status as an emerging growth company.
Critical Accounting Estimates
Our discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities, at the date of the financial statements. Generally, we base our estimates on historical experience and on various other assumptions in accordance with GAAP that we believe to be reasonable under the circumstances. Actual results may differ from these estimates.
Our significant accounting policies are described in more detail in Note 2 to our consolidated financial statements included elsewhere in this proxy statement/prospectus. Critical accounting estimates are those estimates that involve a significant level of judgment and/or estimation uncertainty and could have or are reasonably likely to have a material impact on our financial condition or results of operations. We believe that the following accounting policies are most critical to the judgments and estimates used in the preparation of our consolidated financial statements.
Collaboration and NRE Arrangements
We enter into best-efforts non-refundable, NRE arrangements in which we collaborate with strategic partners to develop SuperDrive software products and are reimbursed for a portion of the research and development expenses attributable to specific development activities. We are not guaranteed to receive any additional consideration or royalties upon completion of NRE projects and the counterparty does not commit to purchase a specified or minimum amount of licenses or other products in the future. The participation reimbursement received by us does not depend
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on whether there are future benefits from the project. All proprietary intellectual property generated by us under these arrangements is exclusively owned by the Company.
We analyze NRE arrangements to determine whether such arrangements involve joint operating activities performed by parties that are both active participants and exposed to significant risks and rewards based on the commercial success of the activities. Based on this assessment, we have concluded NRE arrangements fall within the scope of ASC Topic 808: Collaborative Arrangements. For NRE arrangements within the scope of ASC Topic 808, we first determine whether the collaborative arrangement is entirely or partially a contract with a customer or falls entirely within the scope of other GAAP. For NRE agreements with multiple deliverables, we would assess the units of account by applying the separation and initial measurement requirements of the applicable authoritative accounting literature. If there are no separation or initial measurement requirements in those other standards, the requirements in ASC Topic 606: Revenue from Contracts with Customers, are applied. For each unit of account identified, we determine the accounting treatment based on the relevant authoritative guidance that can be directly applied or reasonably analogized to, or make an accounting policy election based on the nature if no reasonable analogy found.
We have determined that for each NRE arrangement executed through December 31, 2025, there is one unit of account for participation in research and development programs. Participation reimbursements are recognized over time using a cost-to-cost input method (i.e., costs incurred to date relative to total estimated costs), which reflects our progress toward satisfying the performance obligation under the development activities. Participation reimbursements recognized are recorded as a reduction to research and development expenses in the consolidated statements of operations and comprehensive loss.
Stock-Based Compensation
Types of Equity-Based Awards
Our outstanding equity-based awards include the following categories: (1) restricted stock units with service conditions only (“RSUs”), (2) restricted stock units with service conditions and performance conditions based on the occurrence of a liquidity event, which are required to be met for any awards to vest (“PRSUs”), (3) restricted share awards financed through non-recourse notes (“RSAs”), which are treated as common stock options for accounting purposes, (4) common stock options granted to third parties with the exercise price equal to the par value of the underlying share and fully vested at issuance (“Penny Options”), and (5) common stock options with service conditions (“Options”). We recognize stock-based compensation expense based on the estimated fair values for all share-based payment awards.
Equity-Classified Share-Based Awards
The fair value of equity-classified RSUs, PRSUs, and Penny Options is determined using the estimated fair value of our common stock on the grant date. The grant date fair value of the RSUs is recognized ratably over the requisite service periods, which typically range from two to four years. The grant date fair value for the equity-classified PRSUs is recognized once it becomes probable that the performance condition will be satisfied, which is generally upon the consummation of a liquidity event. The grant date fair value for the equity-classified Penny Options was recognized at the time of issuance in July 2023, as these awards were fully vested upon issuance.
The fair value of our common stock was determined by the board of directors with input from management and consideration of third-party valuation reports. In the absence of a public trading market, and as a development-stage company with no significant revenues, we believe that it is appropriate to consider a range of factors to determine the fair market value of the common stock at each grant date. We have considered various objective and subjective factors, along with input from the independent third-party valuation firm. The factors included (1) the progress of our development activities; (2) the significant risks associated with our stage of development; (3) capital market conditions for comparable, privately held, technology companies; (4) our available liquidity, financial condition, and results of operations; (5) the historical issuances of our shares to third parties; and (6) the preferential rights of the redeemable convertible preferred stockholders.
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The fair value of the Options and RSAs is determined using the Black-Scholes option-pricing model (“BSM”). The grant date fair value of the equity-classified Options and RSAs is recognized as an expense over the requisite service periods, generally ranging from two to four years. Forfeitures are recognized as they occur.
The BSM requires the use of certain assumptions as of each grant date, including the fair value of our common stock, expected term, expected volatility, risk-free interest rate, and expected dividends:
These assumptions involve inherent uncertainties and the application of significant judgment. As a result, if factors or expected outcomes change and we use significantly different assumptions or estimates, our stock-based compensation expense could be materially different.
Liability-Classified Share-Based Awards
In July 2023, we divested operations in Plus PRC. As a result, the unvested RSUs, PRSUs, and Options (“PRC Awards”) held by the grantees employed with Plus PRC (“PRC Holders”) were expected to be forfeited pursuant to their original terms. In July 2023, we modified the PRC Awards to allow their continuous vesting based on their initial terms, contingent on the service to Plus PRC (“Plus PRC Service Requirement”). We determined that the Plus PRC Service Requirement is a condition that is not a service, performance, or market condition related to our operations. As such, the unvested PRC Awards became liability-classified. Since we anticipate that the liability-classified PRC Awards will be settled in equity, the associated liability is presented as noncurrent in the condensed consolidated balance sheets.
The service-based awards held by the PRC Holders, including RSUs and Options, became vested from our standpoint, and the variability in the number of shares issuable is based solely on the Plus PRC Service Requirement. As such, we reclassify the liability to equity as the Plus PRC Service Requirement is met. Since the service-based awards held by the PRC Holders were expected to vest, total stock-based compensation for these awards is at least equal to the grant-date fair value per share.
The PRSUs held by the PRC Holders are also subject to the performance condition, and no liability is recognized until the underlying liquidity event becomes probable. We reclassify the liability-classified RSUs held by the PRC holders to equity as the Plus PRC Service Requirement is met and remeasure the per-share basis of these awards at fair value.
Impairment of Long-Term Investment
The assets and liabilities of Plus PRC are not consolidated under the variable interest entity model as we have not been determined to be the primary beneficiary, and we do not have control over Plus PRC. We do not account for our
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Plus PRC investment under the equity method as we do not have the ability to exercise significant influence. Since our investment in Plus PRC did not have a readily determinable fair value, we have elected to account for the investment at cost less impairments, adjusted by observable price changes in orderly transactions for similar investments. The retained interest in Plus PRC was initially measured at a fair value of $30.6 million during 2023. The assessment of the recoverability of the long-term investment includes inputs that are supported by little or no market activity and have a significant impact on determining the carrying value of the long-term investment. During the years ended December 31, 2025 and 2024, we recorded an impairment of $9.3 million and $1.3 million, respectively. The 2025 impairment adjustment of $9.3 million was made in connection with the disposal of our investment in Plus PRC, and the 2024 impairment adjustment of $1.3 million was made on the basis of continued losses for Plus PRC. Both adjustments were reflected in the consolidated statement of operations and comprehensive loss. During September 2025, we completed the sale of the investment in Plus PRC for $20.0 million.
Valuation of Financial Instruments
We have issued certain financial instruments, such as redeemable convertible preferred stock warrant liabilities, SAFEs, and the estimated fair value of the redeemable convertible preferred stock accretion to the redemption value that require (1) a higher degree of judgment in estimating their fair values as of each reporting period and (2) the use of valuation models that are dependent on management estimates and assumptions, primarily related to expected volatility, expected term, probabilities of triggering events, discount rates and risk-free interest rates. Generally, expected volatility is determined based on the historical equity volatility of comparable companies over a period that matches the expected term of the instrument. The expected term is based on the contractual term or management’s best estimate based on the timing of certain events. The probability of a triggering event is based on management’s best estimate of the likelihood that the underlying events will occur. The discount interest rate is generally based on the rate implied by the transaction and comparable companies, and the risk-free interest rate is based on relevant U.S. Treasury rates for a period matching the expected term of the instrument. If actual results differ from our estimates or assumptions, the valuations underlying the issued financial instruments could be materially different.
Recent Accounting Pronouncements
See Note 2 to our audited consolidated financial statements included elsewhere in this proxy statement/prospectus for recently adopted accounting pronouncements and recently issued accounting pronouncements not yet adopted as of the date of this proxy statement/prospectus.
One Big Beautiful Bill Act
In July 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law. We are in the process of evaluating the potential impact of the OBBBA legislation on our financial position, results of operations, and cash flows. However, due to our taxable loss position and valuation allowance on its deferred tax assets, the OBBBA is not expected to have a material impact on our consolidated financial statements and related disclosures.
Corporate Tax Restructuring
The Company is undergoing an internal corporate restructuring to provide greater operational and tax efficiency through restructuring of the holdings of certain subsidiaries of the Company Group (as defined in the Company’s amended and restated certificate of incorporation, as currently in effect) pursuant to which, among other steps, (1) Plus Germany will be contributed to Plus Ireland and Plus Germany Holdings LLC, a Delaware limited liability company (“Plus Germany DE”), will be dissolved, (2) ownership of up to 2% of Plus Ireland will be transferred to PlusAI, Inc., a Delaware company (“DE Sub”), in exchange for certain intellectual property, (3) Plus Holdings Ltd., a Cayman Islands exempted company, will be dissolved, and (4) the shares of DE Sub will be distributed to the Company. These reorganizations qualify as tax-free IRC 368 reorganizations, and we do not expect any material financial impact to these consolidated financial statements. Based on local and statutory filing requirements, we expect these reorganizations to be completed over the next several months.
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EXECUTIVE COMPENSATION
TVA III Executive Officer and Director Compensation
TVA III is an “emerging growth company,” as defined in the JOBS Act, and the following is intended to comply with the reduced disclosure requirements applicable to emerging growth companies. No executive officer of TVA III has received any cash compensation for services rendered to TVA III although TVA III may pay consulting, finder or success fees to its officers, directors or shareholders (or their affiliates) for assisting it in consummating its initial business combination. These officers, directors and shareholders have received and will receive reimbursement for any out-of-pocket expenses incurred by them in connection with activities on TVA III’s behalf, such as identifying potential target businesses and performing business due diligence on suitable target businesses and business combinations, as well as traveling to and from the offices, plants, or similar locations of prospective target businesses to examine their operations.
After the business combination, any members of TVA III’s management team who remain with the Post-Closing Company may be paid consulting, management, or other fees from the Post-Closing Company. Such compensation will be publicly disclosed at the time of its determination in a Current Report on Form 8-K, to the extent required by the SEC.
Since its formation, TVA III has not granted any stock options or stock appreciation rights or any other awards under long-term incentive plans to any of its executive officers or directors.
PlusAI Executive Officer and Director Compensation
This discussion may contain forward-looking statements that are based on the Post-Closing Company’s current plans, considerations, expectations, and determinations regarding future compensation programs. Actual compensation programs that the Post-Closing Company may adopt following the Closing may differ materially from historical and any currently planned programs summarized in this discussion. All share counts in this section are shown on a pre-Merger basis.
Following completion of the Merger, certain executive officers of PlusAI are expected to become executive officers of the Post-Closing Company. This section sets forth historical compensation for PlusAI’s named executive officers, consisting of its principal executive officer and the two most highly compensated executive officers (other than PlusAI’s principal executive officer), for PlusAI’s fiscal year 2025, each of whom is expected to become an executive officer of the Post-Closing Company, who were:
Summary Compensation Table for Fiscal 2024 and Fiscal 2025
The following table sets forth information regarding the compensation awarded to, earned by or paid to PlusAI’s named executive officers for the fiscal years ended December 31, 2024 and December 31, 2025:
Name and Principal Position |
|
|
|
Salary |
|
|
Bonus |
|
|
All Other |
|
|
Total |
|
||||
David Liu |
|
2025 |
|
|
445,200 |
|
|
— |
|
|
|
495 |
|
|
|
445,695 |
|
|
Co-Founder and Chief Executive Officer |
|
2024 |
|
|
420,000 |
|
|
|
210,000 |
|
|
|
495 |
|
|
|
630,495 |
|
Hao Zheng |
|
2025 |
|
|
389,550 |
|
|
— |
|
|
|
1,419 |
|
|
|
390,969 |
|
|
Chief Technology Officer |
|
2024 |
|
|
367,500 |
|
|
|
187,100 |
|
|
|
759 |
|
|
|
555,359 |
|
Shawn Kerrigan |
|
2025 |
|
|
415,917 |
|
|
— |
|
|
|
495 |
|
|
|
416,412 |
|
|
Chief Operating Officer |
|
2024 |
|
|
350,000 |
|
|
|
176,000 |
|
|
|
495 |
|
|
|
526,495 |
|
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Narrative Disclosure to Summary Compensation Table for Fiscal 2024 and Fiscal 2025
Base Salaries
PlusAI’s named executive officers receive a base salary to compensate them for the services they provide to PlusAI. For 2024, Mr. Liu’s base salary was $420,000, Mr. Zheng’s base salary was $367,500, and Mr. Kerrigan’s base salary was $350,000. For 2025, Mr. Liu’s base salary was $445,200, Mr. Zheng’s base salary was $389,550, and Mr. Kerrigan’s base salary was $371,000 effective January 1, 2025, and $420,000 effective February 1, 2025, through the end of 2025. The actual base salaries paid to each named executive officer are set forth in the “Salary” column of PlusAI’s Summary Compensation Table for Fiscal 2024 and Fiscal 2025 above.
Annual Cash Bonuses
Each of PlusAI’s named executive officers was eligible to receive, at the discretion of the PlusAI Board, an annual cash bonus for each of 2024 and 2025, subject to his continued employment through the date of payment (if any). For 2024 and 2025, the target bonus opportunity for each of the PlusAI named executive officers was 50% of his base salary.
The actual annual cash bonuses awarded to the named executive officers for 2024 performance are set forth in the “Bonus” column of PlusAI’s Summary Compensation Table for Fiscal 2024 above. As of June 30, 2026, the discretionary bonuses for 2025 are not yet determinable and are expected to be determined after the Closing.
Outstanding Equity Awards at Fiscal 2025 Year-End
The following table sets forth information regarding outstanding equity awards held by PlusAI’s named executive officers as of December 31, 2025.
|
|
|
|
RSU Awards |
|
|||||
Name |
|
Grant Date |
|
Number of |
|
|
Market |
|
||
David Liu |
|
— |
|
— |
|
|
— |
|
||
Hao Zheng |
|
— |
|
— |
|
|
— |
|
||
Shawn Kerrigan |
|
8/9/2023 |
|
|
5,000,000 |
|
(1) |
|
1,000,000 |
|
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Employment Arrangements with PlusAI’s Executive Officers
PlusAI has entered into confirmatory employment agreements with the named executive officers of PlusAI, which provide for continued employment with PlusAI on an at-will basis and include terms for each such executive officer’s base salary, eligibility for a target cash bonus opportunity in the discretion of the PlusAI Board and employee benefits. The confirmatory employment agreements with the named executive officers of PlusAI provide for annual base salaries of $445,200 for Mr. Liu, $389,550 for Mr. Zheng and $420,000 for Mr. Kerrigan. PlusAI entered into an offer letter with Bryant Park on March 10, 2026, on an at-will basis, which includes terms for Mr. Park’s base salary, eligibility for a target cash bonus opportunity in the discretion of the PlusAI Board and employee benefits. Such offer letter provides for an annual base salary of $340,000 for Mr. Park. In March 2026, PlusAI and Mr. Liu and Mr. Zheng agreed to a temporary reduction of their annual base salary to $100,000. This temporary reduction was in place until August 31, 2026, at which time the annual base salaries for each of Mr. Liu and Mr. Zheng returned to $445,200 and $389,550, respectively.
In addition, in connection with the Closing, PlusAI and the Post-Closing Company may enter into new employment agreements with certain employees of PlusAI, including PlusAI executive officers, which would be expected to provide for continued employment following the Closing on an at-will basis and include terms for base salary, target cash bonus opportunity and employee benefits, to become effective as of or following the Closing.
Potential Payments Upon Termination or Change of Control
In connection with the Closing, PlusAI or the Post-Closing Company may adopt an executive change in control and severance plan or agreements for certain eligible employees of the Post-Closing Company, including the executive officers of PlusAI, to become effective as of or following the Closing.
On August 9, 2023, Mr. Kerrigan was granted an award of restricted stock units under the 2021 Plan and an award agreement issued thereunder, which award covers 5,000,000 shares of PlusAI Class A common stock. On June 1, Mr. Kerrigan was granted two awards of restricted stock units, each covering 5,000,000 shares of PlusAI Class A common stock, under the 2021 Plan and an award agreement issued thereunder, and on June 1, 2026, Mr. Park was granted an award of restricted stock units covering 2,000,000 shares of PlusAI Class A common stock under the 2021 Plan and an award agreement issued thereunder. Vesting of each restricted stock unit award is subject to both continued service over a specified schedule and the occurrence of a liquidity event during a specified period (which the consummation of the Merger will constitute).
Employee Benefits and Stock Plans
PlusAI believes that performance and equity-based compensation can be an important component of the total executive compensation package for supporting stockholder value creation while, at the same time, attracting, motivating, retaining, and rewarding high-quality executives. It is expected that the Incentive Plan described in the incentive plan proposal, if approved, will be an important element of the Post-Closing Company’s compensation arrangements for both executive officers and directors, and that the executive officers (excluding any 5% Holders for so long as they remain such) will also be eligible to participate in the ESPP described in the ESPP proposal, if approved.
2017 Plan
PlusAI’s 2017 Plan was originally adopted by the Board of Directors of PlusAI Corp on February 15, 2017, was approved by PlusAI Corp’s stockholders on February 15, 2017, has been amended from time to time, and was assumed by PlusAI in the Restructuring. The 2017 Plan provides for the grant of stock options and the direct award or sale of shares of PlusAI Class A common stock (“Shares”) to employees, officers or directors of PlusAI or any affiliate of PlusAI and any consultant or advisor (who is a natural person) providing services to PlusAI or any affiliate of PlusAI.
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At the Effective Time, pursuant to the terms of the Merger Agreement, TVA III will assume all outstanding and unexercised stock options granted under the 2017 Plan, as further described in the section of this proxy statement/prospectus entitled “Proposal No. 1 — General — Treatment of PlusAI Options, PlusAI RSUs and PlusAI Warrants.”
In connection with the Closing, the 2017 Plan will be assumed, and PlusAI will not grant any new or additional awards under the 2017 Plan following the Closing. The 2017 Plan will continue to govern the terms and conditions of the outstanding awards previously granted under the 2017 Plan until termination of such awards. The material terms of the 2017 Plan are summarized below.
As of December 31, 2025, stock options covering 58,013,135 Shares were outstanding under the 2017 Plan and there were no outstanding unvested awards of restricted stock under the 2017 Plan.
Authorized Shares. Subject to the adjustment provisions in the 2017 Plan, the maximum aggregate number of shares that may be issued under the 2017 Plan is 156,593,189 Shares. Prior to the termination of the 2017 Plan, (1) in the event that Shares previously transferred or issued under the 2017 Plan are transferred to or acquired or reacquired by the trustee holding the Shares or repurchased by PlusAI, such Shares are added to the number of Shares then available for transfer or available for issuance under the 2017 Plan, (2) Shares that are withheld by the trustee or PlusAI in payment of the exercise price, purchase price or tax withholdings remain available for transfer or issuance under the 2017 Plan, and (3) if an option or other right expires, is or becomes unexercisable, the related Shares are added to the number of Shares then available for transfer or issuance under the 2017 Plan.
Plan Administration. The 2017 Plan is administered by the PlusAI Board. The PlusAI Board has full authority and discretion to take any actions it deems necessary or advisable for the administration of the 2017 Plan. This includes, subject to the terms of the 2017 Plan, without limitation, that the PlusAI Board may modify, extend or assume outstanding options or may accept the cancellation of outstanding options in return for the grant of new options or a different type of award for the same or a different number of Shares and at the same or a different exercise price (if applicable). PlusAI may also offer to buy out an option granted under the 2017 Plan for a payment in cash or Shares or buy out any Share purchase right awarded under the 2017 Plan for a payment in cash, in each case on such terms and conditions as determined by PlusAI. All decisions, interpretations, and other actions of the administrator will be final and binding on all award holders and all persons deriving their rights from an award holder.
The PlusAI Board may delegate its authority to a committee of one or more members of the PlusAI Board who have been appointed by the PlusAI Board and may appoint one or more independent third-party contractors or other parties to assist with the administration of the 2017 Plan. All decisions, interpretations, and other actions of the PlusAI Board or any such designated committee will be final and binding on all beneficiaries of the 2017 Plan. The PlusAI Board and any such designated committee are referred to as the “administrator” for purposes of this plan description.
Eligibility. Employees, non-employee directors and consultants of PlusAI and employees and consultants of its subsidiaries are eligible to receive awards under the 2017 Plan.
Options. The 2017 Plan permits the grant of options.
The term of each option is the term stated in the applicable option agreement, provided that no term may be more than 10 years from the date of grant.
The per share exercise price of each option granted under the 2017 Plan is set at a price determined by the administrator that is set forth in the applicable option agreement. The 2017 Plan provides that the exercise price of an option may not be less than the fair market value of an underlying share on the date of grant, and in no circumstances less than the par value of a share.
The material terms of an option granted under the 2017 Plan are stated in the applicable award agreement, including the terms of vesting and exercisability, method of exercise, acceptable forms of consideration for payment of applicable exercise prices and tax withholding and treatment of options following a grantee’s termination of service. The 2017 Plan generally provides that options will remain outstanding for 12 months following termination of a
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grantee’s service by reason of death, six months following termination of a grantee’s service by reason of disability, or otherwise three months following termination of a grantee’s service, provided that in any event options will expire no later than the end of their term and will immediately terminate on a grantee’s termination of service for cause (as defined in the 2017 Plan). Options granted under the 2017 Plan are exercisable upon a triggering event (as defined in the 2017 Plan), which generally includes PlusAI’s initial public offering or listing on any stock exchange or other securities market, or such other event determined by the administrator from time to time as constituting a triggering event. The Closing will constitute a triggering event for purposes of options granted under the 2017 Plan. Prior to the occurrence of a triggering event, Shares issued under the 2017 Plan generally are held under the name of a trustee. Following the occurrence of a triggering event, Shares then held in the trust are transferred by the trustee to the applicable participant.
Optionholders do not have stockholder rights until the underlying shares are fully paid (including the satisfaction of any applicable tax withholding obligations) and the optionee is entered in the books and records as a stockholder. The option agreements under the 2017 Plan generally provide that, if so required by PlusAI at the time of the option exercise, as a condition to exercising, the optionholder must enter into a voting agreement, power of attorney or other agreement prescribed by the Company that will transfer the optionholder’s voting rights on all matters to a person designated by the Company.
Awards of Shares. Each award of Shares under the 2017 Plan was evidenced by a share grant agreement between the grantee and PlusAI. Each such award is subject to all applicable terms and conditions of the 2017 Plan and the applicable share grant agreement. Any right to purchase Shares under the 2017 Plan (other than an option) will automatically expire if not exercised by the grantee within the time period specified in the relevant award agreement. Each share grant agreement specifies the purchase price of a Share, which is determined by the administrator but is not less than 100% of the fair market value on the date of award and in no circumstances less than the par value of a share.
Non-Transferability of Awards. Unless determined otherwise by the administrator, an option under the 2017 Plan may not be transferred in any manner other than by beneficiary designation, will, or the laws of descent and distribution.
Certain Adjustments. In the event of a subdivision of the Shares into a larger number of Shares, a bonus issue of Shares, a combination or consolidation of the Shares into a lesser number of Shares, a reclassification, or any other increase or decrease in the number of issued Shares effected without receipt of consideration by PlusAI, proportionate adjustments will automatically be made to (1) the number and kind of Shares available for future grants under the 2017 Plan, (2) the number and kind of Shares covered by each outstanding option, (3) the exercise price under each outstanding option, and (4) any repurchase price that applies to Shares granted under the 2017 Plan pursuant to the terms of a PlusAI repurchase right under the applicable award agreement.
In the event of a declaration of an extraordinary dividend payable in a form other than Shares in an amount that has a material effect on the fair market value of the Shares of PlusAI, a recapitalization, a spin-off, or a similar occurrence, the administrator may make appropriate adjustments to one or more of the items listed in the paragraph above.
Corporate Transaction. In the event that PlusAI is a party to a merger or consolidation, or in the event of a sale of all or substantially all of PlusAI’s Shares or assets, all Shares acquired under the 2017 Plan and all options outstanding on the effective date of the transaction will be treated in the manner described in the definitive transaction agreement (or, in the event the transaction does not entail a definitive agreement to which PlusAI is party, in the manner determined by the administrator), which agreement or determination need not treat all options (or all portions of an option) in an identical manner. The treatment specified in the transaction agreement or as determined by the administrator may include (without limitation) one or more of the following with respect to each outstanding option: (1) the continuation of the option by PlusAI (if PlusAI is the surviving corporation); (2) assumption of the option by the surviving corporation or its parent; (3) substitution by the surviving corporation or its parent of a new option for the option; (4) cancellation of the option in exchange for a payment (which may be made in the form of cash, cash equivalents, or securities of the surviving corporation or its parent) equal to the excess of (a) the value, as determined by the administrator, of the property (including cash) received by the holder of a Share as a result of the transaction over (b) the exercise price of the option; (5) cancellation of the option without the payment of any consideration,
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provided that the optionholder will be notified of such treatment and given an opportunity to exercise the option (to the extent the option is vested or becomes vested as of the effective date of the transaction) generally during a period of not less than 5 business days preceding the effective date of the transaction; (6) suspension of the optionholder’s right to exercise the option during a limited period of time preceding the closing of the transaction if such suspension is administratively necessary to permit the closing of the transaction; and (7) termination of any right the optionholder has to exercise the option prior to vesting in the Shares subject to the option (i.e., “early exercise”), such that following the closing of the transaction the option may only be exercised to the extent it is vested. The administrator has discretion to accelerate, in whole or part, the vesting and exercisability of an option in connection with a corporate transaction described above.
Amendment and Termination. The PlusAI Board may amend the 2017 Plan at any time and for any reason. To the extent required by applicable laws, rules or regulations, an amendment to the 2017 Plan will be contingent on approval of PlusAI stockholders within 12 months following the amendment date if the amendment (1) increases the number of Shares available for issuance, (2) materially changes the class of persons who are eligible for the award of Shares or grant of options, or (3) is one effecting any other material change to the 2017 Plan if stockholder approval is required under applicable laws, rules or regulations. The PlusAI Board also may terminate the 2017 Plan at any time and, if not sooner terminated, will terminate automatically 10 years after the later of (1) the date when the PlusAI Board adopted the 2017 Plan and (2) the date when the PlusAI Board approved the most recent increase in the number of Shares reserved under the 2017 Plan that was also approved by PlusAI’s stockholders. As noted above, in connection with the consummation of the Merger, the 2017 Plan will be assumed and PlusAI will not grant any new or additional awards under the 2017 Plan following the Closing. However, the 2017 Plan will continue to govern the terms and conditions of the outstanding awards previously granted under the 2017 Plan until termination of such awards.
2021 Plan
PlusAI’s 2021 Plan was adopted by the PlusAI Board on May 10, 2021, was approved by PlusAI’s stockholders on May 10, 2021, has been amended from time to time, and was assumed by PlusAI in the Restructuring. The 2021 Plan provides for the grant of stock options, share awards of restricted and unrestricted Shares, and restricted stock units to employees, officers or directors of PlusAI or any affiliate of PlusAI, provided that (1) doing so would not adversely affect PlusAI’s ability to rely on certain securities law exemptions with respect to the 2017 Plan or compliance with applicable laws, any consultant or advisor who renders or has rendered bona fide services to PlusAI or any affiliate of PlusAI, and (2) any incentive stock options within the meaning of Section 422 of the Code are granted only to employees of PlusAI or any affiliate of PlusAI.
At the Effective Time, pursuant to the terms of the Merger Agreement, TVA III will assume all outstanding and unvested restricted stock unit awards and outstanding and unexercised stock options granted under the 2021 Plan, as further described in the section of this proxy statement/prospectus entitled “Proposal No. 1 — General — Treatment of PlusAI Options, PlusAI RSUs and PlusAI Warrants.”
In connection with the Closing, the 2021 Plan will be assumed, and PlusAI will not grant any new or additional awards under the 2021 Plan following the Closing. The 2021 Plan will continue to govern the terms and conditions of the outstanding awards previously granted under the 2021 Plan until termination of such awards. The material terms of the 2021 Plan are summarized below.
As of December 31, 2025, restricted stock unit awards covering 144,364,351 Shares and 19,000,000 Shares subject to stock options were outstanding under the 2021 Plan and there were no outstanding awards of restricted stock under the 2021 Plan.
Authorized Shares. Subject to the adjustment provisions in the 2021 Plan, the maximum aggregate number of shares that may be issued under the 2021 Plan is 223,879,487 Shares. Absent a determination otherwise by the administrator, after an initial public offering or similar transaction, the same number of Class A shares of the public company common stock may be issued and delivered pursuant to the awards under the 2021 Plan, instead of Shares (including voting shares of common stock or non-voting shares of common stock).
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To the extent that an award is settled in cash or in a form other than Shares, the Shares that would have been delivered had there been no such cash or other settlement will not be counted against the Shares available for issuance or delivery under the 2021 Plan. Shares that are subject to or underlie stock options or restricted stock units granted under the 2021 Plan that expire or for any reason are canceled or terminated without having been exercised or settled will again, except to the extent prohibited by law or applicable listing or regulatory requirements, be available for subsequent award grants under the 2021 Plan. Shares that are exchanged by an award holder or withheld by PlusAI as full or partial payment in connection with any award under the 2021 Plan, as well as any shares exchanged by an award holder or withheld by PlusAI or one of its affiliates to satisfy the tax withholding obligations related to any award, will be available for subsequent awards under the 2021 Plan. In the case of a settlement of a restricted stock unit award, only the number of Shares actually issued or delivered in respect of such settlement will count against the 2021 Plan’s share reserve.
Plan Administration. The 2021 Plan is administered by the PlusAI Board or any plan or compensation committee appointed by the PlusAI Board. The PlusAI Board or any such committee may designate one or more other persons to administer all or certain aspects of the 2021 Plan. The PlusAI Board and any such committee or designated person is referred to as the “administrator” for purposes of this plan description.
Subject to the provisions of the 2021 Plan, the administrator has authority to do all things necessary or desirable in connection with the authorization of awards and the administration of the 2021 Plan. This includes, subject to the terms of the 2021 Plan, without limitation, the power to determine who will be granted awards and the type, price and amount of any such awards, to establish the terms and conditions of each award, to approve forms of award agreements, and to modify, discontinue, suspend, or terminate any or all outstanding awards, subject to the written consent of the award holder if any such action has a materially adverse effect on the award holder and any rights or benefits of the award holder under any award granted under the 2021 Plan. Any action taken by PlusAI, any of its affiliates, or the administrator pursuant to the 2021 Plan and within its authority under the 2021 Plan will be conclusive and binding on all persons.
Stock Options. The 2021 Plan permits the grant of stock options. Incentive stock options may be granted only to U.S. residents who are employees of PlusAI or an affiliate of PlusAI and who satisfy the other eligibility requirements of the Code. Any award agreement relating to an incentive stock option will contain and will be deemed to contain such other terms and conditions as from time to time are required in order for the option to be an incentive stock option as defined in Section 422 of the Code. Each stock option that is granted to a U.S. resident is designated in an option agreement as either an incentive stock option or a nonstatutory stock option.
Subject to the applicable provisions and limitations of the 2021 Plan, the administrator determines the terms of each option and will designate each option granted under the 2021 Plan as exercisable for either “voting Shares” or “non-voting Shares.” The administrator will determine the vesting and/or exercisability provisions of each option, which provisions will be set forth in an option agreement. The term of an option will be stated in the applicable option agreement, but the term of an option may not exceed 10 years from the grant date. The administrator also determines the exercise price per share of an option, which may not be less than the par value of a Share. Incentive stock options will have such terms and conditions as necessary to qualify as “incentive stock options” under the U.S. Internal Revenue Code rules.
An option granted under the 2021 Plan will be exercisable according to the terms of the 2021 Plan at such times and under such conditions as determined by the administrator and set forth in an award holder’s option agreement.
Subject to the provisions of the 2021 Plan, the administrator may authorize, for the benefit of an eligible person, any adjustment in the exercise or base price, the vesting schedule, or the term of, or the number of shares subject to, an option by cancellation of an outstanding option and a subsequent regranting of the option, by amendment, by substitution of an outstanding option, by waiver or by other legally valid means. Such amendment or other action may result in, among other changes, an exercise or base price that is higher or lower than the exercise or base price of the original or prior option, provide for a greater or lesser number of Shares subject to the option, or provide for a longer or shorter vesting or exercise period.
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The 2021 Plan generally provides that options will remain outstanding for 12 months following termination of a grantee’s service by reason of death or total disability, or otherwise three months following termination of a grantee’s service, provided that options will immediately terminate on a grantee’s termination of service for cause (as defined in the 2021 Plan).
Share Awards. The 2021 Plan permits the grant of share awards of restricted stock and unrestricted stock. The material terms of a share award will be set forth in the applicable award agreement, including terms relating to the vesting of share awards and whether the shares are voting or non-voting, as set forth in the applicable award agreement.
Share awards of restricted stock may be awarded for a purchase price, which may be paid with past services rendered as part or all of the consideration, as determined by the administrator, but in no event will such price be less than par value. Unless otherwise provided in an award agreement, holders of restricted stock have the right to vote and receive dividends and distributions in respect of restricted shares, subject to any additional terms determined by the administrator. A share award will either vest or be repurchased by PlusAI as provided in the 2021 Plan not more than 10 years after the date of grant. Each share award will be subject to earlier termination as provided in 2021 Plan. Upon a grantee’s termination of service, restricted stock that has not vested will be reacquired by PlusAI in accordance with the terms set by the administrator pursuant to the 2021 Plan.
Restricted Stock Units. The 2021 Plan permits the grant of restricted stock units. The material terms of an award of restricted stock units will be set forth in the applicable award agreement, including terms relating to the vesting and settlement of restricted stock unit awards.
The administrator will determine the vesting and settlement provisions of each restricted stock unit, which may be based on performance criteria, passage of time or other factors or combination of factors, which provisions will be set forth in the applicable award agreement. Each restricted stock unit that vests in accordance with its terms will be settled for the designated number of Shares as provided in the award agreement, subject to earlier termination as provided in the 2021 Plan, and in any case will be settled not more than 10 years after its date of grant.
Unless the administrator otherwise expressly provides otherwise, restricted stock units that remain subject to vesting conditions that have not been satisfied by the time specified in the applicable award agreement will not vest or be settled. The award agreement will specify any other terms or conditions of the forfeiture or repurchase if the award fails to vest.
Non-Transferability of Awards. Generally only the grantee may exercise an award and awards generally are non-transferable and will not be subject to sale, transfer, anticipation, alienation, assignment, pledge, encumbrance or charge. Such exercise and transfer restrictions will not apply to transfers to PlusAI, certain transfers by gift or domestic relations order to family members as described in the 2021 Plan, transfers by a grantee’s legal representative if grantee has suffered a disability, or transfers done by beneficiary designation in connection with the participant’s death, will, or the laws of descent and distribution, or as otherwise provided by the administrator.
Certain Adjustments. Upon (or, as may be necessary to effect the adjustment, immediately prior to) any reclassification, recapitalization, share split (including in the form of a share dividend), reverse share split, merger, combination, consolidation, reorganization, split-up, spin-off, extraordinary dividend distribution in respect of the Shares, any exchange of Shares or other securities of the Company, or any similar, unusual or extraordinary corporate transaction in respect of the Shares, then the administrator will equitably and proportionately adjust (1) the number and type of Shares (or other securities) that may be granted pursuant to awards (including the specific 2021 Plan share reserve amounts, maximums and number of shares set forth in the 2021 Plan), (2) the number, amount and type of Shares (or other securities or property) subject to any outstanding awards, (3) the grant, purchase, exercise or base price of any outstanding awards, and/or (4) the securities, cash or other property deliverable upon exercise or vesting of any outstanding awards, in each case to the extent necessary to preserve (but not increase) the level of incentives intended by the 2021 Plan and the then-outstanding awards.
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Unless otherwise expressly provided in the applicable award agreement, upon (or, as may be necessary to effect the adjustment, immediately prior to) any event or transaction described in the preceding paragraph or a sale of all or substantially all of the business or assets of PlusAI as an entity, the administrator will equitably and proportionately adjust the performance standards applicable to any then-outstanding performance-based awards to the extent necessary to preserve (but not increase) the level of incentives by the 2021 Plan and the then-outstanding performance-based awards.
Corporate Transaction. Upon a “change in control event” (as such term is defined in the 2021 Plan), the administrator may make provision for a cash payment in settlement of outstanding awards or for the assumption, substitution or exchange of the outstanding awards (or the cash, securities or other property deliverable to the holder(s) of any or all outstanding awards), based on, to the extent relevant in the circumstances, the distribution or consideration payable to holders of the Shares upon or in respect of such change in control event.
The administrator may, in its sole discretion and subject to certain U.S. tax rules, accelerate vesting of one or more awards to the extent such awards are outstanding upon a change in control event or such other events or circumstances as the administrator may provide. The administrator may take action with respect to a change in control event prior to such event (as opposed to on the occurrence of such event) to the extent that the administrator deems the action necessary to permit the award holder to realize the benefits intended to be conveyed with respect to the underlying shares. The administrator may also deem an acceleration to occur immediately prior to the change in control event and/or reinstate the original terms of the award if an event giving rise to an acceleration does not occur.
Notwithstanding the foregoing, any escrow, holdback, earnout or similar provisions in the definitive documents relating to such a change in control event may apply to any payment to the holders of options, stock awards or restricted stock units to the same extent and in the same manner as such provisions apply to the holders of Shares. In addition, award holders will be required to execute any definitive transaction documents in connection with any change in control event at the request of PlusAI or our subsidiaries or affiliates, or any of their collective successors.
Upon the occurrence of a change in control event, unless the administrator provides for the survival, substitution, assumption, exchange or other continuation or settlement of awards, then each then-outstanding award (whether or not vested and/or exercisable) will terminate. In the case of options that will not survive or be substituted for, assumed, exchanged, or otherwise continued or settled in the change in control event, the option holder will be given reasonable advance notice of the impending termination and a reasonable opportunity to exercise the outstanding and vested portion of the option according to its terms before the termination of the award (except that in no case will more than 10 days’ notice of the impending termination be required).
Amendment and Termination. The PlusAI Board may, at any time, terminate or, from time to time, amend, modify or suspend the 2021 Plan, in whole or in part. No amendment, suspension or termination of the 2021 Plan or amendment of any outstanding award will, without written consent of the affected award holder, affect in any manner materially adverse to the award holder any rights or benefits of the award holder or obligations of PlusAI under any award granted under the 2021 Plan prior to the effective date of such change. To the extent then required by applicable law or any applicable listing agency or required under applicable tax law, rules or regulations to preserve the intended tax consequences of the 2021 Plan, or to the extent deemed necessary or advisable by the administrator, any amendment to the 2021 Plan will be subject to stockholder approval.
If it is not terminated earlier by the administrator, the 2021 Plan will terminate automatically at the close of business on the day before the 10th anniversary of the date PlusAI’s stockholders approved the 2021 Plan on May 10, 2021. As noted above, in connection with the Closing, the 2021 Plan will be assumed, and PlusAI will not grant any new or additional awards under the 2021 Plan following the Closing. However, the 2021 Plan will continue to govern the terms and conditions of the outstanding awards previously granted under the 2021 Plan until termination of such awards.
401(k) Plan
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PlusAI maintains a 401(k) retirement savings plan, which is intended to be a tax-qualified defined contribution plan under Section 401(k) of the Code, for the benefit of our employees, including the PlusAI executive officers, who satisfy certain eligibility requirements. Under the 401(k) plan, eligible employees may elect to defer a portion of their compensation, within the limits prescribed by the Code, on a pre-tax (traditional) or post-tax (Roth) basis, through contributions to the 401(k) plan. As a tax-qualified retirement plan, pre-tax contributions to the 401(k) plan and earnings on those pre-tax contributions are not taxable to the employees until distributed from the 401(k) plan, and earnings on Roth contributions are not taxable when distributed from the 401(k) plan.
Director Compensation
PlusAI currently has no formal arrangements under which non-employee directors receive compensation for their service on the PlusAI Board or its committees. PlusAI reimburses non-employee directors for reasonable and necessary out-of-pocket expenses incurred in connection with attending board and committee meetings or performing other services in their capacities as non-employee directors. For the fiscal year ended December 31, 2025, PlusAI did not pay any compensation, make any equity awards or non-equity awards, or pay any other compensation to any of the members of its board of directors in connection with their service on the PlusAI Board.
Executive Officer and Director Compensation Following the Business Combination
Executive Compensation
The policies of the Post-Closing Company with respect to the compensation of its executive officers following the business combination are expected to be administered by the board of directors of the Post-Closing Company in consultation with its compensation committee. The Post-Closing Company may also rely on data and analyses from third parties, such as compensation consultants, in connection with its compensation programs. The Post-Closing Company intends to design and implement programs to provide for compensation that is sufficient to attract, motivate and retain executives of the Post-Closing Company and other potential individuals and to establish an appropriate relationship between executive compensation and the creation of stockholder value.
Equity Compensation
As discussed above under the incentive plan proposal and the ESPP proposal, the TVA III Board is expected to approve and adopt the Incentive Plan and the ESPP, which, subject to the approval of TVA III’s shareholders, would authorize the grant of equity awards and stock purchases, respectively, to eligible individuals, including the named executive officers, following the consummation of the business combination.
Director Compensation
Following the completion of the Merger, the Post-Closing Company is expected to adopt an outside director compensation policy as further described in the section “Board of Directors and Management After the Business Combination—Non-Employee Director Compensation” below.
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BOARD OF DIRECTORS AND MANAGEMENT AFTER THE BUSINESS COMBINATION
Unless the context otherwise requires, references in this subsection to “we,” “us” or “our” refer to the business of PlusAI prior to the consummation of the business combination, which will be the business of the Post-Closing Company and its subsidiaries following the business combination.
The following sets forth certain information, as of December 31, 2025, concerning the persons who are expected to serve as directors and executive officers of the Post-Closing Company following the consummation of the business combination and assuming the election of the director nominees at the extraordinary general meeting as set forth in “Proposal No. 8 — The Director Election Proposal.”
Upon the Closing, the business and affairs of the Post-Closing Company will be managed by or under the direction of the Post-Closing Company Board. The directors and executive officers of the Post-Closing Company upon the Closing are expected to include the following:
Name |
|
Age |
|
Position |
David Liu |
|
49 |
|
Chief Executive Officer and President; Director |
Hao Zheng |
|
55 |
|
Chief Technology Officer; Director |
Shawn Kerrigan |
|
50 |
|
Chief Operating Officer |
Bryant Park |
|
41_ |
|
Chief Financial Officer |
Richard Lim |
|
68 |
|
Director |
David C. Peterschmidt |
|
78 |
|
Director |
Harry J. Harczak, Jr. |
|
69 |
|
Director |
David Liu will serve as the chief executive officer and a director of the Post-Closing Company upon the Closing. Mr. Liu has served as PlusAI’s chief executive officer and co-founder since PlusAI was established in 2016. Mr. Liu has over 20 years of experience building and growing technology companies. Prior to founding PlusAI, Mr. Liu was the founder and chief executive officer of RedAtoms Inc., a mobile gaming platform, from 2011 to 2015. From 2006 to 2011, Mr. Liu served as the founder and chief technology officer of RMG Networks Holding Corporation, a leading developer and aggregator of place-based video networks in the United States. Prior to founding RMG Networks, Mr. Liu was a consultant at McKinsey & Company from 2003 to 2005. Mr. Liu earned his Ph.D. in electrical engineering from Stanford University and a B.S. in computer science from Beijing University of Aeronautics and Astronautics. We believe Mr. Liu's perspective, experience and institutional knowledge as our co-founder and chief executive officer qualify him to serve as director.
Hao Zheng will serve as the chief technology officer and a director of the Post-Closing Company upon the Closing. Mr. Zheng has served as the chief technology officer and co-founder of PlusAI since PlusAI was established in 2016. Prior to founding PlusAI, Mr. Zheng was Distinguished Architect, Head of the Beijing Research Lab and Senior Director of Engineering at Yahoo! Inc. from 2013 to 2016. From 2012 to 2013, Mr. Zheng was the founder and chief executive officer of Ztelic Inc., a startup focused on social-network data analytics, which was acquired by Yahoo! Inc. Prior to founding Ztelic Inc., Mr. Zheng was the chief technology officer, Asia at Zynga Inc, a social game development company, from 2011 to 2012. Mr. Zheng attended the Electrical Engineering undergraduate program at Shanghai Jiao Tong University, earned his Bachelor of Science in Electrical Engineering from Brigham Young University, earned his M.S. in Electrical Engineering and Computer Sciences from University of Wisconsin-Madison and attended the Electrical Engineering graduate program at Stanford University. We believe Mr. Zheng's perspective, technical expertise and institutional knowledge as our co-founder and chief technology officer qualify him to serve as director.
Shawn Kerrigan will serve as the chief operating officer of the Post-Closing Company. Mr. Kerrigan has served as PlusAI’s chief operating officer since 2019 and previously served as PlusAI’s vice president of engineering beginning in 2018. Prior to joining PlusAI, Mr. Kerrigan was chief technology officer and co-founder of Locus Energy, Inc., a hardware and software company in the solar industry, from 2010 to 2018. From 2008 to 2010, Mr. Kerrigan worked at Bridgewater Associates as a senior investment associate. Prior to Bridgewater Associates, Mr. Kerrigan was a consultant at McKinsey & Company from 2004 to 2008. Mr. Kerrigan earned his Bachelor of Science degree
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from the University of Illinois, Urbana-Champaign and his Master’s and Ph.D. in Engineering with a Ph.D. minor in Computer Sciences from Stanford University.
Bryant Park will serve as the chief financial officer of the Post-Closing Company. Mr. Park has served as PlusAI’s chief financial officer since May 2026, and previously served as PlusAI’s vice president of corporate development from March 2026 until May 2026. Prior to joining PlusAI, Mr. Park served as an executive director, software investment banking at Wells Fargo & Company from February 2021 until March 2026. Prior to his time at Wells Fargo, Mr. Park served as a vice president of investment banking at Baird from October 2014 until December 2020, where he specialized in mergers & acquisitions and corporate finance. Mr. Park also served as an associate at Skadden, Arps, Slate, Meagher & Flom LLP from October 2013 until August 2014. Mr. Park earned a J.D. from Northwestern University Pritzker School of Law in 2013, and a Bachelor of Arts in Political Science from the University of California, Berkeley in 2006.
Richard Lim will serve as a director of the Post-Closing Company upon the Closing. Mr. Lim has served as a director of PlusAI since July 2023. Mr. Lim has served as the Founding Managing Director of Informed Ventures since March 2025 and as the Founder and Managing Director of GSR Ventures since March 2004. Mr. Lim earned his MBBS from the National University of Singapore and his MBA from Stanford University. We believe Mr. Lim's experience as a venture capital investor, including his service on the board of directors of multiple private and public companies, qualifies him to serve as a director.
David C. Peterschmidt will serve as the lead independent director of the Post-Closing Company upon the Closing. Mr. Peterschmidt has served as managing partner of Peterschmidt Ventures since December 2023. Mr. Peterschmidt previously served on the board of directors of Edgio, Inc. from 2007 until December 2023. Mr. Peterschmidt also served as the chief executive officer and a member of the board of directors of CIBER, Inc. from 2010 until 2014. Prior to his position at CIBER, Mr. Peterschmidt served as the president and chief executive officer of Openwave Systems, Inc. from 2004 until 2007. From 2003 to 2004, Mr. Peterschmidt served as the chief executive officer and chairman of Securify, Inc., and as the chief executive officer and chairman of Inktomi, Inc. from 1996 to 2003. Mr. Peterschmidt has also been the owner of Peterschmidt Ventures since 2005. Mr. Peterschmidt earned his Bachelor of Arts in Political Science from the University of Missouri in 1969 and an MBA from Chapman College in 1975.
Harry J. Harczak, Jr. will serve as a director of the Post-Closing Company upon the Closing. Mr. Harczak has served as a managing director at Sawdust Investment Management, a private investment firm since 2008. He previously held several executive leadership positions at CDW Corporation, including executive vice president of sales, marketing, product partner management, business development and chief financial officer. He is also a former partner at PricewaterhouseCooper LLP. Mr. Harczak has served on the board of directors of Array Digital Infrastructure, Inc. (NYSE: AD) since 2003 and as the chair of their audit committee since 2023. Mr. Harczak previously served on the board of directors and audit committee chair of Tech Data Corporation. Mr. Harczak is a Certified Public Accountant (inactive). Mr. Harczak has a Bachelor of Science degree in Accounting from DePaul University and an MBA from the University of Chicago.
Corporate Governance
Board Composition
The Post-Closing Company’s business and affairs will be organized under the direction of the Post-Closing Company Board. We anticipate that the Post-Closing Company Board will consist of eight members upon the Closing, with David Liu serving as chairman and David C. Peterschmidt serving as lead independent director. The primary responsibilities of the Post-Closing Company Board will be to provide oversight, strategic guidance, counseling and direction to the Post-Closing Company’s management. The Post-Closing Company Board will meet on a regular basis and additionally as required.
In accordance with the terms of the Proposed Bylaws, which will be effective upon the Domestication, each director, including a director elected to fill a vacancy, shall hold office until the expiration of the term for which elected and until such director’s successor is elected and qualified or until such director’s earlier death, resignation or removal. Although the Merger Agreement contemplates that the citizenship of the members of the Post-Closing Company Board shall be such that TVA III will be free of certain types of foreign influence, neither the Proposed
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Certificate of Incorporation nor Proposed Bylaws contain corresponding restrictions on the directors that stockholders may elect in future elections held after the Closing.
For so long as the PlusAI Board is classified and subject to the rights of holders of the Post-Closing Company preferred stock, any director may be removed from office only for cause and only by the affirmative vote of the holders of a majority of the total voting power of all then-outstanding shares of the Post-Closing Company entitled to vote in the election of directors, voting as a single class.
In accordance with the Merger Agreement, the Sponsor has the right to designate two directors to serve on the Post-Closing Company Board, but the Sponsor has not exercised this right as of the date of this proxy statement/prospectus.
Director Independence
Upon the Closing, the Post-Closing Company Board is expected to determine that each of the directors on the Post-Closing Company Board other than Mr. Liu and Mr. Zheng will qualify as an independent director, as defined under the rules of Nasdaq, and the Post-Closing Company Board will consist of a majority of “independent directors” as defined under the rules of the SEC and Nasdaq relating to director independence requirements. In addition, the Post-Closing Company will be subject to the rules of the SEC and Nasdaq relating to the membership, qualifications, and operations of the Post-Closing Company Compensation Committee and the Post-Closing Company’s audit committee, as discussed below.
Role of the PlusAI Board in Risk Oversight/Risk Committee
Upon the Closing, one of the key functions of the Post-Closing Company Board will be informed oversight of the Post-Closing Company’s risk management process. The Post-Closing Company Board does not anticipate having a standing risk management committee, but rather anticipates administering this oversight function directly through the Post-Closing Company Board as a whole, as well as through various standing committees of the Post-Closing Company Board that address risks inherent in their respective areas of oversight. In particular, the Post-Closing Company Board will be responsible for monitoring and assessing strategic risk exposure and the Post-Closing Company’s audit committee will have the responsibility to consider and discuss PlusAI’s major financial risk exposures and exposures associated with cybersecurity, information security and privacy matters and the steps its management will take to monitor and control such exposures, including guidelines and policies to govern the process by which risk assessment and management is undertaken.
The Post-Closing Company’s audit committee will also monitor compliance with legal and regulatory requirements. The Post-Closing Company’s compensation committee will also assess and monitor whether the Post-Closing Company’s compensation plans, policies and programs comply with applicable legal and regulatory requirements.
Board Committees
Audit Committee
Upon the Closing, the members of the Post-Closing Company’s audit committee will be Harry J. Harczak, Jr., Richard Lim and David C. Peterschmidt, with Harry J. Harczak, Jr. serving as chairperson, each of whom meets the requirements for independence under the rules and regulations of the SEC and the listing standards of Nasdaq applicable to audit committee members. Each member of the Post-Closing Company’s audit committee also meets the financial literacy requirements of the listing standards of Nasdaq. In addition, the Post-Closing Company Board is expected to determine that Harry J. Harczak, Jr. is an audit committee financial expert within the meaning of Item 407(d) of Regulation S-K under the Securities Act. Following completion of this offering, the Post-Closing Company’s audit committee will, among other things:
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The Post-Closing Company’s audit committee will operate under a written charter, to be effective upon the Closing, that satisfies the applicable rules and regulations of the SEC and the listing standards of Nasdaq.
Compensation Committee
Upon the Closing, the members of the Post-Closing Company’s compensation committee will be Harry J. Harczak, Jr., Richard Lim and David C. Peterschmidt, with Richard Lim serving as chairperson, each of whom meets the requirements for independence under the rules and regulations of the SEC and the listing standards of Nasdaq applicable to compensation committee members. Each member of the Post-Closing Company’s compensation committee is also a non-employee director, as defined pursuant to Rule 16b-3 promulgated under the Exchange Act. Following the Closing, the Post-Closing Company’s compensation committee will, among other things:
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The Post-Closing Company’s compensation committee will operate under a written charter, to be effective upon the Closing, that satisfies the applicable rules and regulations of the SEC and the listing standards of Nasdaq.
Nominating and Corporate Governance Committee
Upon the Closing, the members of the Post-Closing Company’s nominating and corporate governance committee will be Harry J. Harczak, Jr., Richard Lim and David C. Peterschmidt, with David C. Peterschmidt serving as chairperson, each of whom meets the requirements for independence under the listing standards of Nasdaq. Following completion of this offering, the Post-Closing Company’s nominating and corporate governance committee will, among other things:
The Post-Closing Company’s nominating and corporate governance committee will operate under a written charter, to be effective upon the Closing, that satisfies the applicable listing standards of Nasdaq.
Compensation Committee Interlocks and Insider Participation
Upon the Closing, the members of the Post-Closing Company’s compensation committee will be Harry J. Harczak, Jr., Richard Lim and David C. Peterschmidt, with Richard Lim serving as chairperson. None of the members
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of the Post-Closing Company’s compensation committee is or has been an officer or employee of our company. None of our executive officers currently serves, or in the past year has served, as a member of the board of directors or compensation committee (or other board committee performing equivalent functions or, in the absence of any such committee, the entire board of directors) of any entity that has one or more executive officers serving on Post-Closing Company Board or the Post-Closing Company’s compensation committee.
Limitation on Liability and Indemnification of Directors and Officers
The DGCL authorizes corporations to limit or eliminate the personal liability of directors and officers to corporations and their stockholders for monetary damages for breaches of directors’ and officers’ fiduciary duties, subject to certain exceptions. The Proposed Certificate of Incorporation includes a provision that eliminates the personal liability of directors and officers for monetary damages for any breach of fiduciary duty as a director or officer to the fullest extent permitted by the DGCL, except to the extent such exemption from liability or limitation thereof is not permitted under the DGCL. The DGCL prohibits the Proposed Certificate of Incorporation from limiting the liability of directors or officers for the following:
If the DGCL is amended to authorize corporate action further eliminating or limiting the personal liability of a director or officer, then the liability of a director or officer of the Post-Closing Company will be eliminated or limited to the fullest extent permitted by the DGCL, as so amended. The Proposed Certificate of Incorporation does not eliminate a director’s or officer’s duty of care and, in appropriate circumstances, equitable remedies, such as injunctive or other forms of non-monetary relief, remain available under Delaware law. This provision also does not affect a director’s or officer’s responsibilities under any other laws, such as the federal securities laws or other state or federal laws.
The Proposed Bylaws provide that the Post-Closing Company shall indemnify and advance expenses to directors and officers to the fullest extent authorized by the DGCL. Further, in connection with the Closing, the Post-Closing Company intends to enter into indemnification agreements with each of its directors and executive officers that may be broader than the specific indemnification provisions contained in the DGCL. These indemnification agreements will require the Post-Closing Company, among other things, to indemnify its directors and executive officers against liabilities that may arise by reason of their status or service to the fullest extent permitted by law. These indemnification agreements will also require the Post-Closing Company to advance all expenses incurred by the directors and executive officers in investigating or defending any such action, suit, or proceeding to the fullest extent permitted by law. The Proposed Bylaws will also empower the Post-Closing Company to purchase insurance on behalf of any person whom the Post-Closing Company is required or permitted to indemnify.
The limitation of liability, indemnification and advancement provisions in the Proposed Certificate of Incorporation and the Proposed Bylaws may discourage stockholders from bringing a lawsuit against directors and officers for breach of their fiduciary duties. These provisions also may have the effect of reducing the likelihood of derivative litigation against directors and officers, even though such an action, if successful, might otherwise benefit the Post-Closing Company and its stockholders. Your investment may be adversely affected to the extent the Post-Closing Company pays the costs of settlement and damage awards against directors and officers pursuant to these indemnification provisions. We believe that these provisions, liability insurance and any indemnification agreements that may be entered into are necessary to attract and retain talented and experienced directors and officers.
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Insofar as indemnification for liabilities arising under the Securities Act may be permitted to the Post-Closing Company’s directors, officers and controlling persons pursuant to the foregoing provisions, or otherwise, the Post-Closing Company has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.
There is currently no pending material litigation or proceeding involving any of TVA III’s or PlusAI’s respective directors, officers or employees for which indemnification is sought.
Code of Business Conduct and Ethics for Employees, Executive Officers, and Directors
The Post-Closing Company Board will adopt a code of business conduct and ethics (the “Code of Conduct”), applicable to all of the Post-Closing Company’s employees, executive officers and directors. The Code of Conduct will be available on PlusAI’s website, www.plus.ai/investors. Information contained on or accessible through PlusAI’s website is not a part of this proxy statement/prospectus, and the inclusion of PlusAI’s website address in this proxy statement/prospectus is an inactive textual reference only. The Post-Closing Company Board, or a duly appointed committee thereof, will be responsible for overseeing the Code of Conduct and must approve any waivers of the Code of Conduct for employees, executive officers and directors. We expect that any amendments to the Code of Conduct, or any waivers of its requirements, will be disclosed on PlusAI’s website.
Non-Employee Director Compensation
In 2025, PlusAI engaged a third-party compensation consultant to assist it in reviewing and determining the compensation for directors following the Closing, including without limitation the various peer companies with which PlusAI is expected to compete for talent following the Closing. Following such analysis, the PlusAI Board approved, subject to the approval of the Post-Closing Company Board and any modifications thereto made by the Post-Closing Company Board, and the Post-Closing Company is expected to adopt, an outside director compensation policy designed to provide non-employee director compensation that enables the Post-Closing Company to attract and retain, on a long-term basis, high-caliber directors who are not employees or officers of the Post-Closing Company or its subsidiaries. Subject to approval of the Post-Closing Company Board, the outside director compensation policy will become effective as of the date of the Effective Time. The compensation provided under such policy is summarized below.
Cash Compensation.
Under the outside director compensation policy, the following cash compensation program will be adopted for the Post-Closing Company’s non-employee directors:
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Each non-employee director who serves as a committee chair of the Post-Closing Company Board will receive the cash retainer fee as the chair of the committee but not the cash retainer fee as a member of that committee, provided that the non-employee director who serves as the lead independent director of the Post-Closing Company Board will receive the annual retainer fees for such role as well as the annual retainer fee for service as a non-employee director. These cash fees to the Post-Closing Company’s non-employee directors will be paid quarterly in arrears, prorated based on such service provided during the applicable quarter. The above-listed fees for service as lead independent director of the Post-Closing Company Board or a chair or member of any committee are payable in addition to the non-employee director retainer. Under the outside director compensation policy, the Post-Closing Company also will reimburse its non-employee directors for reasonable travel expenses to attend meetings of the Combined Company Board and its committees.
Equity Compensation
Initial Award. Pursuant to the outside director compensation policy, each person who first becomes a non‑employee director after the first Form S-8 registration statement filed with the U.S. Securities and Exchange Commission covering the shares issuable under the Incentive Plan will receive, on the first trading day on or after the date such individual first becomes a non-employee director, an initial award of restricted stock units covering shares of the Post-Closing Company’s common stock (the “Initial Award”). The Initial Award will have a grant date fair value (generally determined in accordance with U.S. GAAP) of $360,000, with the number of shares subject to the Initial Award rounded down to the nearest whole share. The Initial Award will be scheduled to vest in equal installments as to one-third (1/3) of the shares subject to the Initial Award on each anniversary of the date that the person first becomes a non-employee director, in each case subject to continued services through the applicable vesting date. If the individual was an employee, then becoming a non-employee director due to termination of employment will not entitle the person to an Initial Award.
Annual Award. Pursuant to the outside director compensation policy, each non-employee director will receive, on the date of each annual meeting of the Post-Closing Company’s stockholders (an “Annual Meeting”) that occurs on or after the effective date of the outside director compensation policy, an annual award of restricted stock units covering shares of the Post-Closing Company’s common stock (the “Annual Award”). The Annual Award will have an aggregate grant date fair value (generally determined in accordance with U.S. GAAP) of $180,000, with the number of shares subject to the Initial Award rounded down to the nearest whole share. However, if an individual began service as a non-employee director less than six months prior to the date of the Annual Meeting, then the non-employee director will not receive the Annual Award for that Annual Meeting. Each Annual Award will be scheduled to vest as to all of the shares subject to such award on the earlier of the 1-year anniversary of the grant date or the date immediately before the date of the next Annual Meeting after the grant date, subject to continued services through such vesting date.
Other Award Terms. Each Initial Award and Annual Award will be granted under the Incentive Plan (or its successor plan, as applicable) and form of award agreement under such plan.
Change in Control. In the event of the Post-Closing Company’s change in control, as defined in the Incentive Plan, each non-employee director’s outstanding equity awards covering shares of the Post-Closing Company’s common stock received while a non-employee director will accelerate vesting in full as of immediately prior to such change in control, provided that he or she remains a non-employee director as of the date of such change in control.
Director Compensation Limits. The outside director compensation policy will provide that in any fiscal year of the Post-Closing Company, no non-employee director may be granted equity awards (the value of which will be based on their grant date fair value) and be provided any cash retainers or fees in amounts that in the aggregate exceed $750,000 (provided that in the Post-Closing Company’s fiscal year of the individual’s initial service as a non-employee director, such amount is increased to $1,000,000). Any awards or other compensation provided to an individual for his or her services as an employee or a consultant (other than an outside director), or before the Closing, will not count toward this limit.
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UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
Defined terms included below have the same meaning as terms defined and included elsewhere in this proxy statement/prospectus. Unless the context otherwise requires, all references in this section to the Post-Closing Company refer to Plus Automation, Inc. (“PlusAI” or the “Company”) after giving effect to the business combination.
Texas Ventures Acquisition III Corp (“TVA III”) is providing the following unaudited pro forma condensed combined financial information to aid in the analysis of the financial aspects of the business combination, other events contemplated by the Merger Agreement, Convertible Note and Warrant Subscription Agreement, the PIPE Subscription Agreement, the Forward Purchase Agreement, and other transactions (the “Transactions” or “business combination”) described below. The following unaudited pro forma condensed combined financial information presents the combination of the financial information of TVA III and PlusAI, adjusted to give effect to the business combination, the Convertible Notes, the PIPE Investment, the Share Issuance Agreements, the Forward Purchase Agreement, and other events contemplated by the Merger Agreement. The following unaudited pro forma condensed combined financial information has been prepared in accordance with Article 11 of Regulation S-X as amended by the final rule, Release 33-10786 “Amendments to Financial Disclosures about Acquired and Disposed Businesses” (“Article 11 of Regulation S-X”).
The unaudited pro forma condensed combined financial information presents the pro forma effects of the business combination and Transactions, which include:
TVA III is a blank check company formed in order to effect a merger, amalgamation, share exchange, asset acquisition, stock purchase, reorganization, or other similar business combination with one or more businesses. TVA III was incorporated under the laws of the Cayman Islands on July 26, 2024. TVA III has two classes of ordinary shares authorized: TVA III Class A Ordinary Shares and TVA III Class B Ordinary Shares.
On August 1, 2024, the Prior Sponsor purchased 7,666,667 TVA III Class B Ordinary Shares, or the TVA III Founder Shares in exchange for a payment of $25,000.
On April 24, 2025, TVA III consummated the TVA III IPO of 22,500,000 TVA III Public Units. Each TVA III Public Unit consists of one TVA III Class A Ordinary Share or TVA III public share and one-half of one redeemable warrant to purchase TVA III Class A Ordinary Share, or TVA III Public Warrant. Each whole TVA III Public Warrant entitles the holder to purchase one TVA III Class A Ordinary Share for $11.50 per share. The TVA III Public Units were sold at a price of $10.00 per unit, generating gross proceeds to TVA III of $225.0 million. The TVA III Class A Ordinary Shares contain a redemption feature which allows for the redemption of such TVA III 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.
Simultaneously with the consummation of the TVA III IPO, TVA III completed the TVA III Private Placement of the TVA III Private Placement Warrants. The Prior Sponsor, CCM and Clear Street purchased an aggregate of 7,568,750 warrants, each exercisable to purchase one TVA III Class A Ordinary Share at $11.50 per share, at a price of $1.00 per warrant, or for proceeds of $7.6 million. CCM and Clear Street purchased an aggregate of 2,868,750 TVA III Private Placement Warrants and the Prior Sponsor purchased 4,700,000 TVA III Private
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Placement Warrants (inclusive of the 4,100,000 non-managing sponsor investors (“NMSI”) TVA III Private Placement Warrants owned by the Prior Sponsor that were allocated to the NMSIs as a result of the NMSIs’ membership interests in the Prior Sponsor). Each TVA III Private Placement Warrant is exercisable to purchase one TVA III Class A Ordinary Share at $11.50 per share.
On April 24, 2025, the Prior Sponsor forfeited 166,667 TVA III Founder Shares as the underwriters did not fully exercise the over-allotment option.
On September 18, 2025, TVA, the Prior Sponsor and Sponsor Yorkville Acquisition Sponsor II, LLC (the “New Sponsor”) entered into the Purchase Agreement pursuant to which, the New Sponsor purchased from the Prior Sponsor (a) 7,500,000 TVA III Founder Shares and (b) 4,700,000 TVA III Private Placement Warrants (including the TVA III Private Placement Warrants previously allocated to the NMSIs), for an aggregate purchase price of $7.4 million. Upon closing of this purchase, TVA III had a new sponsor.
Upon the closing of the TVA III IPO and the TVA III Private Placement of the TVA III Private Placement Warrants, $226.1 million ($10.05 per unit) of the net proceeds of the TVA III IPO and certain of the proceeds of the TVA III Private Placement were placed in the trust account with Continental Stock Transfer & Trust Company acting as trustee and invested in U.S. government securities, 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.
As of June 30, 2026, the 22,500,000 TVA III public shares, including those subject to possible redemption, 7,500,000 TVA III Class B Ordinary Shares, 11,250,000 TVA III Public Warrants (which is the maximum number of TVA III Public Warrants which remain following TVA III Public Unit separation), and 7,568,750 TVA III Private Placement Warrants remain outstanding.
PlusAI, incorporated in the state of Delaware on March 2, 2023, is an AI-first autonomous driving software company that aims to deliver physical artificial intelligence to the heavy trucking industry at scale. In July 2023, the Company consummated a series of transactions (the “Restructuring”), which ultimately resulted in the divestiture of its operations in China. Following the Restructuring, the Company was a reporting entity with its principal operations located primarily in the United States.
The unaudited pro forma condensed combined financial statements give effect to the business combination, the Convertible Notes, PIPE Investment, Share Issuance Agreements, Forward Purchase Agreement, and other events contemplated by the Merger Agreement, and Transactions as described in this proxy statement/prospectus. The following represents the basis of presentation for various statements included in the unaudited pro forma condensed combined financial statements:
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The unaudited pro forma condensed combined financial statements have been prepared for informational purposes only and are not necessarily indicative of what the Post-Closing Company’s condensed financial position or results of operations actually would have been had the Transactions been consummated on or prior to June 30, 2026, nor are they necessarily indicative of future results of operations. The unaudited pro forma condensed combined financial statements do not purport to project the future financial position or operating results of the Post-Closing Company. The unaudited pro forma financial information is based on the information available to management at the time of preparation and assumptions that management believes are reasonable and supportable. The pro forma adjustments, which are described in the accompanying notes, may be revised as additional information becomes available and is evaluated. The actual adjustments upon the completion of the business combination and Transactions will likely differ from the pro forma adjustments, and the differences may be material.
The unaudited pro forma condensed combined financial information was derived from and should be read in conjunction with the following financial statements and the accompanying notes, which are included elsewhere in this proxy statement/prospectus:
Description of Business Combination and Transactions
On September 2, 2026, TVA III, TVA Merger Sub I, Inc. (“Merger Sub I”), TVAC Merger Sub II, LLC (“Merger Sub II”), and PlusAI entered into the Merger Agreement, pursuant to which the following will occur:
The Domestication
The Domestication will occur at least one business day prior to the Closing Date. Upon the Domestication, it is anticipated that TVA III will change its name to “PlusAI Holdings, Inc.” and is referred to as the “Post-Closing Company” as of the time following the Domestication. In connection with the Domestication, the following will take place:
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The Merger
On the day of the Closing (“Effective Time”), the Merger will occur, and the following will take place:
The aggregate consideration to be paid to PlusAI equity holders (“Equity Value”), including PlusAI stockholders and holders of PlusAI SAFEs, vested PlusAI RSUs, vested PlusAI Options, and vested PlusAI warrants, will be $800,000,000. Consideration will be paid entirely in shares of the Post-Closing Company common stock in an amount equal to $10.00 per share.
Additionally, the Merger Agreement provides that the consummation of the business combination is conditioned upon TVA III having at least $5.0 million of net tangible assets as of the Closing and the Available Closing SPAC Cash, after reduction for the aggregate amount of TVA III shareholder redemptions, plus the gross proceeds received from the Convertible Notes and the PIPE Investment, calculated before payment of any transaction expenses, being at least equal to $40.0 million as of the Closing. However, because Sponsor Affiliate holds 1,050,000 public shares and has agreed pursuant to the terms of the Forward Purchase Agreement not to redeem its shares in contemplation of the business combination, it is not expected that TVA III would be left with less than $5.0 million of net tangible assets as a result of redemptions by the holders of TVA III public shares.
Following the Closing, and as additional consideration for the Merger, PlusAI equity holders will be issued a contingent right to receive up to an aggregate of 70,000,000 shares of the Post-Closing Company common stock. This
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contingent right is comprised of 7,000,000 shares allocated to the Post-Closing RSU Pool for future equity award issuances by the Post-Closing Company and 63,000,000 earnout shares outstanding at the Closing (the “Earnout Shares”). The Earnout Shares outstanding at the Closing are comprised of three separate tranches that have the following triggering events within five years from the Closing (“Earnout Period”):
The Earnout Consideration will be allocated among and issued to all Eligible Holders of the PlusAI Company Stock outstanding as of immediately prior to the Effective Time, after giving effect to the conversions described above as part of the Merger Agreement and as a result of the PlusAI Options granted under the 2021 Plan.
For purposes of the pro forma condensed combined financial information presented, the following key assumptions have been utilized:
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The Transactions
Other related events that are contemplated to take place in connection with the business combination are summarized:
The Convertible Notes will bear interest at the Post-Closing Company’s election as entirely cash interest at 8.00% per annum, entirely PIK interest at 10.00% per annum, or a combination of cash and PIK interest. The applicable rates increase by 2.00% per annum during an event of default, and each applicable rate increases by 1.00% per annum if the Post-Closing Company fails to maintain unrestricted cash and cash equivalents of at least $10.0 million as of the last business day of a calendar month. The Convertible Notes will mature on the fifth anniversary of the Closing Date. Holders may convert at a price equal to 95% of the lowest daily VWAP during the five consecutive trading days preceding conversion, subject to a $5.00 per-share floor, and a holder converting before the third anniversary of the Closing Date will receive an interest make-whole amount.
Following effectiveness of the Resale Registration Statement, the Post-Closing Company may redeem the Convertible Notes at 130% of accrued value, as of the date of determination, calculated as the sum of (i) the outstanding principal amount of the Convertible Notes, plus (ii) all accrued and unpaid cash interest as of such date, plus (iii) all other amounts then due and payable under the Convertible Notes (the “Accrued Value”) before the second anniversary of the Closing Date and 120% of Accrued Value thereafter, subject to the terms of the Convertible Notes. Holders may require repurchase upon a Fundamental Change and may put the Convertible Notes near maturity. The Convertible Notes contain affirmative and negative covenants and events of default relating to payment, conversion or settlement, covenants, representations, cross-defaults, bankruptcy, judgments, delisting, share reservations, minimum liquidity and guaranty defaults.
Each PIPE Warrant will be exercisable immediately upon issuance at an initial exercise price of $12.00 per share and will expire five years after issuance. The PIPE Warrants may be exercised for cash or, if available, on a net-issuance basis and will be automatically exercised on a net-issuance basis at expiration. The exercise price will reset every nine months, if lower, to the greater of the applicable lowest daily VWAP during the preceding five trading days and the $5.00 per-share floor, with a corresponding adjustment to the number of underlying shares.
Under the Guaranty, PlusAI and each of its subsidiaries will jointly and severally guarantee the full and unconditional payment and performance of the Convertible Notes. Any entity that becomes a subsidiary after issuance must join the Guaranty within 15 business days. The Convertible Notes and guaranty obligations will not be secured by any lien or security interest in the assets of PlusAI or any Guarantor.
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Following the Domestication, business combination, and Transactions, the estimated outstanding shares are summarized in the following table based on the redemption scenarios and the associated voting rights (further described below):
|
|
No Redemption |
|
|
25% Redemption |
|
|
50% Redemption |
|
|
Maximum Redemption |
|
||||||||||||||||||||||||||||||||||||
|
|
Shares |
|
|
% Outstanding |
|
|
% |
|
|
Shares |
|
|
% Outstanding |
|
|
% |
|
|
Shares |
|
|
% Outstanding |
|
|
% |
|
|
Shares |
|
|
% Outstanding |
|
|
% |
|
||||||||||||
TVA Public Stockholders (1) |
|
|
22,500,000 |
|
|
|
20.9 |
% |
|
|
6.1 |
% |
|
|
16,875,000 |
|
|
|
16.5 |
% |
|
|
4.6 |
% |
|
|
11,250,000 |
|
|
|
11.7 |
% |
|
|
3.1 |
% |
|
|
1,050,000 |
|
|
|
1.3 |
% |
|
|
0.3 |
% |
Sponsor and affiliates (2) |
|
|
7,500,000 |
|
|
|
7.0 |
% |
|
|
2.0 |
% |
|
|
7,500,000 |
|
|
|
7.4 |
% |
|
|
2.1 |
% |
|
|
7,500,000 |
|
|
|
7.8 |
% |
|
|
2.1 |
% |
|
|
7,500,000 |
|
|
|
8.7 |
% |
|
|
2.1 |
% |
PlusAI Stockholders (3) |
|
|
77,550,256 |
|
|
|
72.0 |
% |
|
|
91.9 |
% |
|
|
77,550,256 |
|
|
|
76.0 |
% |
|
|
93.3 |
% |
|
|
77,550,256 |
|
|
|
80.4 |
% |
|
|
94.8 |
% |
|
|
77,550,256 |
|
|
|
89.9 |
% |
|
|
97.6 |
% |
CCM (4) |
|
|
100,000 |
|
|
|
0.1 |
% |
|
|
0.0 |
% |
|
|
100,000 |
|
|
|
0.1 |
% |
|
|
0.0 |
% |
|
|
100,000 |
|
|
|
0.1 |
% |
|
|
0.0 |
% |
|
|
100,000 |
|
|
|
0.1 |
% |
|
|
0.0 |
% |
Total Common Stock Outstanding |
|
|
107,650,256 |
|
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
102,025,256 |
|
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
96,400,256 |
|
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
86,200,256 |
|
|
|
100.0 |
% |
|
|
100.0 |
% |
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Basis of Pro Forma Presentation
The unaudited pro forma condensed combined financial information has been prepared in accordance with Article 11 of Regulation S-X. The adjustments in the unaudited pro forma condensed combined financial information have been identified and presented to provide relevant information necessary for an illustrative understanding of the Post-Closing Company upon consummation of the business combination and Transactions in accordance with generally accepted accounting principles in the United States (“GAAP”). Assumptions and estimates underlying the unaudited pro forma adjustments set forth in the unaudited pro forma condensed combined financial information are described in the accompanying notes.
The unaudited pro forma condensed combined financial information has been presented for illustrative purposes only and is not necessarily indicative of the operating results and financial position that would have been achieved had the business combination and Transactions occurred on the dates indicated. The unaudited pro forma condensed combined financial information does not purport to project the future operating results or financial position of the Post-Closing Company following the completion of the business combination and Transactions. The unaudited pro forma adjustments represent management’s estimates based on information available as of the date of this proxy statement/prospectus and is subject to change as additional information becomes available and analyses are performed.
The unaudited pro forma adjustments represent management’s assumptions and estimates based on information available as of the date of this proxy statement/prospectus. These assumptions and estimates are subject to change as additional information becomes available and analyses are performed. TVA III and PlusAI did not have any historical relationship prior to the discussion of the business combination and Transactions, and continue to have no relationship that would require any pro forma adjustments to eliminate activities between these two entities.
The unaudited pro forma condensed combined financial information assumes that the TVA III shareholders approve the business combination. Pursuant to the TVA III Articles, TVA III will provide the TVA III Public Shareholders with the opportunity to redeem their outstanding TVA III Class A Ordinary Shares at the Redemption Price per share and payable in cash. TVA III cannot predict how many of its public shareholders will exercise the right to have their TVA III Class A Ordinary Shares redeemed for cash.
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In each of the following four scenarios presented, the TVA III Net Tangible Asset closing condition is met. Under the 25% Redemption, 50% Redemption and Maximum Redemption scenarios, the pro forma condensed combined financial information assumes a $10.51 per share redemption price, Convertible Notes proceeds of $57.5 million, PIPE Investment proceeds of $4.0 million, and TVA III would have net tangible assets greater than $5,000,001 as a condition to closing the business combination. The net tangible assets is calculated by giving effect to the redemptions from the trust account and payment of the estimated unpaid TVA III transaction costs of $16.5 million. The net tangible assets calculation is performed on a pre-combination basis, includes the assets and liabilities of TVA III, and excludes the assets and liabilities of PlusAI. The selected pro forma information is presented after giving effect to the Domestication, business combination, and Transactions presented under the following scenarios:
The following summarizes the pro forma shares of the Post-Closing Company common stock issued and outstanding immediately after the business combination and Transactions on an issued and outstanding basis, presented under the four redemption scenarios:
|
|
No Redemption |
|
|
25% Redemption |
|
|
50% Redemption |
|
|
Maximum Redemption |
|
||||
TVA Public Stockholders (1) |
|
|
22,500,000 |
|
|
|
16,875,000 |
|
|
|
11,250,000 |
|
|
|
1,050,000 |
|
Sponsor and affiliates (2) |
|
|
7,500,000 |
|
|
|
7,500,000 |
|
|
|
7,500,000 |
|
|
|
7,500,000 |
|
PlusAI Stockholders (3) |
|
|
77,550,256 |
|
|
|
77,550,256 |
|
|
|
77,550,256 |
|
|
|
77,550,256 |
|
CCM (4) |
|
|
100,000 |
|
|
|
100,000 |
|
|
|
100,000 |
|
|
|
100,000 |
|
Total Post-Closing Company Common Stock |
|
|
107,650,256 |
|
|
|
102,025,256 |
|
|
|
96,400,256 |
|
|
|
86,200,256 |
|
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Table of Contents
The above share information assumes that the Equity Value is $800,000,000 and excludes the following potentially dilutive securities of the Post-Closing Company:
|
|
No Redemption |
|
|
25% Redemption |
|
|
50% Redemption |
|
|
Maximum Redemption |
|
||||
Earnout shares |
|
|
63,000,000 |
|
|
|
63,000,000 |
|
|
|
63,000,000 |
|
|
|
63,000,000 |
|
TVA III Public warrants |
|
|
11,250,000 |
|
|
|
11,250,000 |
|
|
|
11,250,000 |
|
|
|
11,250,000 |
|
TVA III Private Placement warrants |
|
|
7,568,750 |
|
|
|
7,568,750 |
|
|
|
7,568,750 |
|
|
|
7,568,750 |
|
PlusAI warrants |
|
|
18,510,906 |
|
|
|
18,510,906 |
|
|
|
18,510,906 |
|
|
|
18,510,906 |
|
PIPE warrants |
|
|
5,724,068 |
|
|
|
5,724,068 |
|
|
|
5,724,068 |
|
|
|
5,724,068 |
|
Convertible notes |
|
|
6,404,367 |
|
|
|
6,404,367 |
|
|
|
6,404,367 |
|
|
|
6,404,367 |
|
PubCo Options |
|
|
2,389,994 |
|
|
|
2,389,994 |
|
|
|
2,389,994 |
|
|
|
2,389,994 |
|
PubCo RSUs |
|
|
1,978,916 |
|
|
|
1,978,916 |
|
|
|
1,978,916 |
|
|
|
1,978,916 |
|
Total |
|
|
116,827,001 |
|
|
|
116,827,001 |
|
|
|
116,827,001 |
|
|
|
116,827,001 |
|
Expected Accounting Treatment for the Business Combination
In May 2025, the FASB issued Accounting Standards Update No. 2025-03, Business Combinations (Topic 805) and Consolidation (Topic 810): Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity (“ASU 2025-03”). ASU 2025-03 changes how companies determine the accounting acquirer in certain business combinations involving variable interest entities. The new guidance requires considering the factors used for other acquisition transactions to assess which party is the accounting acquirer. TVA III has elected to early adopt ASU 2025-03 as of July 1, 2026. PlusAI has early adopted ASU 2025-03 during the period ended December 31, 2025. For purposes of these pro forma financial statements, management has assessed the business combination as if ASU 2025-03 had already been adopted as the closing of the business combination will occur after the adoption date. The adoption of ASU 2025-03 will not have any retrospective impact to TVA III’s or PlusAI’s historical financial statements.
As of the anticipated Closing Date, PlusAI is determined to be a business, and TVA III is not a business. The business combination will be affected by the exchange of equity interests. Subsequent to the adoption of ASU 2025-03, the business combination is assessed by utilizing factors in ASC 805, Business Combinations (“ASC 805”), to identify the accounting acquirer under each redemption scenario. These factors apply regardless of whether the Post-Closing Company is viewed as a variable interest entity.
Based on the assessment of ASC 805 factors further discussed below, the business combination is expected to be accounted for as a reverse recapitalization in accordance with GAAP, as PlusAI has been determined to be the accounting acquirer under all redemption scenarios presented. Under this method of accounting, TVA III, the legal acquirer, will be treated as the accounting acquiree for financial reporting purposes. PlusAI, the legal acquiree, will be treated as the accounting acquirer. Accordingly, the consolidated assets, liabilities, and results of operations of PlusAI will become the historical financial statements of the Post-Closing Company, and TVA III’s assets, liabilities,
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Table of Contents
and results of operations will be consolidated by the Post-Closing Company starting from the Closing Date. For accounting purposes, the financial statements of the Post-Closing Company will represent a continuation of the financial statements of PlusAI, with the business combination being treated as the equivalent of PlusAI issuing stock for the net assets of TVA III, accompanied by a recapitalization. The net assets of TVA III will be stated at historical carrying values, and no goodwill or other intangible assets will be recorded as of the Closing Date. The number of shares and per share amounts in the financial statements of the Post-Closing Company will be adjusted to reflect the Exchange Ratio as if the Closing took place at the beginning of the earliest period presented. The statement of operations prior to the business combination will include only operations of PlusAI.
PlusAI was determined to be the accounting acquirer under all of the redemption scenarios presented based on the evaluation of the following facts and circumstances:
The final allocation of consideration payable to PlusAI equity holders will be determined upon the completion of the business combination and Transactions and could differ materially from the four scenarios presented.
Additional Accounting Considerations
PlusAI is assessing the accounting related to the business combination and the treatment related to the following matters:
Earnout Shares: Management has preliminarily concluded the Earnout Shares are equity-classified instruments as the only variability are inputs that are indexed to the Company’s own equity or are otherwise permissible and does not preclude the Earnout Shares from being considered indexed to the Post-Closing Company common stock. Management has determined the fair value of the Earnout Shares to be approximately $529.9 million as of June 30, 2026 for all of the redemption scenarios. The Earnout Shares fair value is determined based on a valuation using a Monte Carlo simulation with key inputs and assumptions such as stock price, term, dividend yield, risk-free rate, and volatility.
The unaudited pro forma condensed combined financial statements do not reflect pro forma adjustments related to the recognition of the Earnout Shares because there is no net impact on stockholders’ deficit on a pro forma combined basis as the amount is recorded as a debit and credit of $529.9 million to additional paid-in-capital.
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Table of Contents
TVA III Public Warrants and TVA III Private Placement Warrants: These warrants were accounted for as equity instruments in the historical financial statements of TVA III. Management has preliminarily concluded that equity classification for the TVA III Public Warrants and TVA III Private Placement Warrants continues to be appropriate.
Convertible Notes: Management has preliminarily concluded to elect the fair value option to account for the convertible notes, with changes in the estimated fair value presented separately under the corresponding caption in the Post-Closing Company statement of operations. The Company has made this election as the fair value option better reflects the underlying economics within the convertible notes. Within the unaudited pro forma condensed combined financial statements, a loss on the issuance of the Convertible Notes has been recognized as the estimated fair value of all instruments issued is greater than the proceeds received. The Convertible Notes will be subsequently remeasured to fair value at each reporting date, with changes to fair value recognized in the condensed consolidated statements of operations.
PIPE Warrants: Management has preliminarily concluded that the PIPE Warrants are liability-classified as the freestanding instruments do not meet equity classification requirements based on their settlement mechanism upon a change of control and similar transactions. Within the unaudited pro forma condensed combined financial statements, a loss on the issuance of the PIPE Warrants has been recognized as the estimated fair value of all instruments issued is greater than the proceeds received. The PIPE Warrants will be subsequently remeasured to fair value at each reporting date, with changes in fair value recognized in the condensed consolidated statements of operations.
Share Issuance Agreements: Management has preliminarily concluded that the Share Issuance Agreements are accounted for as an equity instrument as the share count is fixed with no redemption or repurchase obligation included in the agreement and the shares are consistent with ordinary common stock. Within the unaudited pro forma condensed combined financial statements, a loss on the issuance of the Share Issuance Agreements have been recognized as the estimated fair value of all instruments issued is greater than the proceeds received.
Class A Common Stock (included as part of the PIPE Investment): Management has preliminarily concluded that the purchase of Class A common stock as part of the PIPE Investment will be accounted for as an equity instrument as the share count is fixed with no redemption or repurchase obligation included in the agreement and the Class A common shares are consistent with ordinary common stock. Within the unaudited pro forma condensed combined financial statements, a loss on the issuance of PIPE Investment has been recognized as the estimated fair value of all instruments issued is greater than the proceeds received.
Forward Purchase Agreement: Management has preliminarily concluded that the Forward Purchase Agreement is considered an in-substance put option provided to the Sponsor Affiliate which meets the definition of a liability under ASC 480. Pursuant to the Forward Purchase Agreement, the Sponsor Affiliate may sell up to 1,050,000 FPA Shares to third parties at a price of at least $12.00 per share and pay TVA III an early termination obligation equal to the number of shares sold multiplied by the redemption price, reducing the number of FPA Shares to be returned to TVA III at maturity. No FPA Shares will be delivered to the Post-Closing Company prior to maturity. Upon maturity, in exchange for the return of any remaining FPA Shares, the Post-Closing Company will pay the Sponsor Affiliate a settlement amount equal to the number of remaining FPA Shares multiplied by the redemption price, which the amount will be fully offset by the Prepayment Amount (i.e., 1,050,000 FPA Shares multiplied by the applicable per-share redemption price), resulting in no additional cash payment to be paid by the Post-Closing Company at maturity. Within the unaudited pro forma condensed combined financial statements, a Forward Purchase Agreement liability has been recognized with a corresponding loss on issuance of the Forward Purchase Agreement. The Forward Purchase Agreement liability will be subsequently remeasured to fair value at each reporting date, with changes in fair value recognized in the condensed consolidated statements of operations. For purposes of the pro forma financial information, the estimated fair value of the Forward Purchase Agreement is $1.2 million using the Monte Carlo Simulation model. Additionally, the Prepayment Amount of $11.0 million has been recognized as a reduction of equity in the unaudited pro forma condensed combined financial statements.
The final accounting treatment related to the business combination, including the Earnout Shares, TVA III Public Warrants, TVA III Private Placement Warrants, Convertible Notes, PIPE Warrant, Share Issuance Agreements, and the Forward Purchase Agreement will be finalized and reported in the first reporting period following the consummation of the business combination.
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Table of Contents
Unaudited Pro Forma Condensed Combined Balance Sheet
As of June 30, 2026
(in thousands)
|
|
|
|
|
|
|
|
No Redemption |
|
|
25% Redemption |
|
|
50% Redemption |
|
|
Maximum Redemption |
|
||||||||||||||||||||||
|
|
TVA III Historical |
|
|
PlusAI |
|
|
Transaction |
|
|
Pro Forma |
|
|
Transaction |
|
|
Pro Forma |
|
|
Transaction |
|
|
Pro Forma |
|
|
Transaction |
|
|
Pro Forma |
|
||||||||||
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Current assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents |
|
$ |
257 |
|
|
$ |
18,319 |
|
|
$ |
236,580 |
|
A |
$ |
266,616 |
|
|
$ |
236,580 |
|
A |
$ |
209,721 |
|
|
$ |
236,580 |
|
A |
$ |
152,826 |
|
|
$ |
236,580 |
|
A |
$ |
49,656 |
|
|
|
|
— |
|
|
|
— |
|
|
|
(6,916 |
) |
B |
|
|
|
|
(6,916 |
) |
B |
|
|
|
|
(6,916 |
) |
B |
|
|
|
|
(6,916 |
) |
B |
|
|
||||
|
|
|
|
|
|
|
|
|
(5,584 |
) |
BB |
|
|
|
|
(5,584 |
) |
BB |
|
|
|
|
(5,584 |
) |
BB |
|
|
|
|
(5,584 |
) |
BB |
|
|
||||||
|
|
|
— |
|
|
|
— |
|
|
|
(16,500 |
) |
C |
|
|
|
|
(14,250 |
) |
CC |
|
|
|
|
(12,000 |
) |
CCC |
|
|
|
|
(7,920 |
) |
CCCC |
|
|
||||
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
(59,145 |
) |
J |
|
|
|
|
(118,290 |
) |
JJ |
|
|
|
|
(225,540 |
) |
JJJ |
|
|
||||
|
|
|
— |
|
|
|
— |
|
|
|
(10,000 |
) |
D |
|
|
|
|
(10,000 |
) |
D |
|
|
|
|
(10,000 |
) |
D |
|
|
|
|
(10,000 |
) |
D |
|
|
||||
|
|
|
— |
|
|
|
— |
|
|
|
4,000 |
|
E |
|
|
|
|
4,000 |
|
E |
|
|
|
|
4,000 |
|
E |
|
|
|
|
4,000 |
|
E |
|
|
||||
|
|
|
— |
|
|
|
— |
|
|
|
57,500 |
|
EE |
|
|
|
|
57,500 |
|
EE |
|
|
|
|
57,500 |
|
EE |
|
|
|
|
57,500 |
|
EE |
|
|
||||
|
|
|
— |
|
|
|
— |
|
|
|
(11,040 |
) |
EEE |
|
|
|
|
(11,040 |
) |
EEE |
|
|
|
|
(11,040 |
) |
EEE |
|
|
|
|
(11,040 |
) |
EEE |
|
|
||||
Short-term marketable securities |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Accounts and other receivables |
|
|
— |
|
|
|
2,757 |
|
|
|
— |
|
|
|
2,757 |
|
|
|
— |
|
|
|
2,757 |
|
|
|
— |
|
|
|
2,757 |
|
|
|
— |
|
|
|
2,757 |
|
Deferred offering costs |
|
|
— |
|
|
|
715 |
|
|
|
(715 |
) |
BB |
|
— |
|
|
|
(715 |
) |
BB |
|
— |
|
|
|
(715 |
) |
BB |
|
— |
|
|
|
(715 |
) |
BB |
|
— |
|
Prepaid expenses and other current assets |
|
|
127 |
|
|
|
1,577 |
|
|
|
— |
|
|
|
1,704 |
|
|
|
— |
|
|
|
1,704 |
|
|
|
— |
|
|
|
1,704 |
|
|
|
— |
|
|
|
1,704 |
|
Total current assets |
|
|
384 |
|
|
|
23,368 |
|
|
|
247,325 |
|
|
|
271,077 |
|
|
|
190,430 |
|
|
|
214,182 |
|
|
|
133,535 |
|
|
|
157,287 |
|
|
|
30,365 |
|
|
|
54,117 |
|
Property and equipment, net |
|
|
— |
|
|
|
1,906 |
|
|
|
— |
|
|
|
1,906 |
|
|
|
— |
|
|
|
1,906 |
|
|
|
— |
|
|
|
1,906 |
|
|
|
— |
|
|
|
1,906 |
|
Operating lease right-of-use assets |
|
|
— |
|
|
|
198 |
|
|
|
— |
|
|
|
198 |
|
|
|
— |
|
|
|
198 |
|
|
|
— |
|
|
|
198 |
|
|
|
— |
|
|
|
198 |
|
Marketable securities and cash held in Trust Account |
|
|
236,580 |
|
|
|
— |
|
|
|
(236,580 |
) |
A |
|
— |
|
|
|
(236,580 |
) |
A |
|
— |
|
|
|
(236,580 |
) |
A |
|
— |
|
|
|
(236,580 |
) |
A |
|
— |
|
Prepaid expenses, noncurrent |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Total assets |
|
$ |
236,964 |
|
|
$ |
25,472 |
|
|
$ |
10,745 |
|
|
$ |
273,181 |
|
|
$ |
(46,150 |
) |
|
$ |
216,286 |
|
|
$ |
(103,045 |
) |
|
$ |
159,391 |
|
|
$ |
(206,215 |
) |
|
$ |
56,221 |
|
Liabilities, Redeemable Convertible Preferred Stock, and Stockholders’ Equity (Deficit) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Current liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable |
|
$ |
120 |
|
|
$ |
8,676 |
|
|
$ |
(6,638 |
) |
B |
$ |
2,158 |
|
|
$ |
(6,638 |
) |
B |
$ |
2,158 |
|
|
$ |
(6,638 |
) |
B |
$ |
2,158 |
|
|
$ |
(6,638 |
) |
B |
$ |
2,158 |
|
Advance payments |
|
|
— |
|
|
|
81 |
|
|
|
— |
|
|
|
81 |
|
|
$ |
— |
|
|
|
81 |
|
|
$ |
— |
|
|
|
81 |
|
|
$ |
— |
|
|
|
81 |
|
Operating lease liabilities, current |
|
|
— |
|
|
|
180 |
|
|
|
— |
|
|
|
180 |
|
|
|
— |
|
|
|
180 |
|
|
|
— |
|
|
|
180 |
|
|
|
— |
|
|
|
180 |
|
Accrued compensation and benefits |
|
|
— |
|
|
|
3,773 |
|
|
|
— |
|
|
|
3,773 |
|
|
|
— |
|
|
|
3,773 |
|
|
|
— |
|
|
|
3,773 |
|
|
|
— |
|
|
|
3,773 |
|
Discounted options liability |
|
|
— |
|
|
|
2,480 |
|
|
|
— |
|
|
|
2,480 |
|
|
|
— |
|
|
|
2,480 |
|
|
|
— |
|
|
|
2,480 |
|
|
|
— |
|
|
|
2,480 |
|
Simple agreements for future equity, current |
|
|
— |
|
|
|
22,904 |
|
|
|
(13,361 |
) |
F |
|
— |
|
|
|
(13,361 |
) |
F |
|
— |
|
|
|
(13,361 |
) |
F |
|
— |
|
|
|
(13,361 |
) |
F |
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
(9,543 |
) |
D |
|
|
|
|
(9,543 |
) |
D |
|
|
|
|
(9,543 |
) |
D |
|
|
|
|
(9,543 |
) |
D |
|
|
||||
Accrued and other current liabilities |
|
|
2,744 |
|
|
|
802 |
|
|
|
(278 |
) |
B |
|
3,268 |
|
|
|
(278 |
) |
B |
|
3,268 |
|
|
|
(278 |
) |
B |
|
3,268 |
|
|
|
(278 |
) |
B |
|
3,268 |
|
Deferred revenue |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Forward purchase agreement liability |
|
|
— |
|
|
|
— |
|
|
|
1,210 |
|
EEE |
|
1,210 |
|
|
|
1,210 |
|
EEE |
|
1,210 |
|
|
|
1,210 |
|
EEE |
|
1,210 |
|
|
|
1,210 |
|
EEE |
|
1,210 |
|
Total current liabilities |
|
|
2,864 |
|
|
|
38,896 |
|
|
|
(28,610 |
) |
|
|
13,150 |
|
|
|
(28,610 |
) |
|
|
13,150 |
|
|
|
(28,610 |
) |
|
|
13,150 |
|
|
|
(28,610 |
) |
|
|
13,150 |
|
Warrant liabilities |
|
|
— |
|
|
|
17,730 |
|
|
|
(17,730 |
) |
G |
|
56,196 |
|
|
|
(17,730 |
) |
G |
|
56,196 |
|
|
|
(17,730 |
) |
G |
|
56,196 |
|
|
|
(17,730 |
) |
G |
|
56,196 |
|
|
|
|
— |
|
|
|
— |
|
|
|
3,928 |
|
E |
|
|
|
|
3,928 |
|
E |
|
|
|
|
3,928 |
|
E |
|
|
|
|
3,928 |
|
E |
|
|
||||
|
|
|
— |
|
|
|
— |
|
|
|
52,268 |
|
EE |
|
|
|
|
52,268 |
|
EE |
|
|
|
|
52,268 |
|
EE |
|
|
|
|
52,268 |
|
EE |
|
|
||||
Convertible notes |
|
|
— |
|
|
|
— |
|
|
|
71,358 |
|
EE |
|
71,358 |
|
|
|
71,358 |
|
EE |
|
71,358 |
|
|
|
71,358 |
|
EE |
|
71,358 |
|
|
|
71,358 |
|
EE |
|
71,358 |
|
Simple agreements for future equity, noncurrent |
|
|
— |
|
|
|
28,895 |
|
|
|
(28,895 |
) |
F |
|
— |
|
|
|
(28,895 |
) |
F |
|
— |
|
|
|
(28,895 |
) |
F |
|
— |
|
|
|
(28,895 |
) |
F |
|
— |
|
Other noncurrent liabilities |
|
|
— |
|
|
|
142 |
|
|
|
— |
|
|
|
142 |
|
|
|
— |
|
|
|
142 |
|
|
|
— |
|
|
|
142 |
|
|
|
— |
|
|
|
142 |
|
Share-based awards liabilities |
|
|
— |
|
|
|
221 |
|
|
|
— |
|
|
|
221 |
|
|
|
— |
|
|
|
221 |
|
|
|
— |
|
|
|
221 |
|
|
|
— |
|
|
|
221 |
|
Deferred underwriting commission |
|
|
9,000 |
|
|
|
- |
|
|
|
(9,000 |
) |
C |
|
— |
|
|
|
(9,000 |
) |
CC |
|
— |
|
|
|
(9,000 |
) |
CCC |
|
— |
|
|
|
(9,000 |
) |
CCCC |
|
— |
|
Total liabilities |
|
|
11,864 |
|
|
|
85,884 |
|
|
|
43,319 |
|
|
|
141,067 |
|
|
|
43,319 |
|
|
|
141,067 |
|
|
|
43,319 |
|
|
|
141,067 |
|
|
|
43,319 |
|
|
|
141,067 |
|
323
Table of Contents
Unaudited Pro Forma Condensed Combined Balance Sheet — (Continued)
As of June 30, 2026
(in thousands)
|
|
|
|
|
|
|
|
No Redemption Scenario |
|
|
25% Redemption Scenario |
|
|
50% Redemption Scenario |
|
|
Maximum Redemption Scenario |
|
||||||||||||||||||||||
|
|
TVA III Historical |
|
|
PlusAI |
|
|
Transaction |
|
|
Pro Forma |
|
|
Transaction |
|
|
Pro Forma |
|
|
Transaction |
|
|
Pro Forma |
|
|
Transaction |
|
|
Pro Forma |
|
||||||||||
Common stock subject to possible redemption (TVA) |
|
|
236,580 |
|
|
|
— |
|
|
|
(236,580 |
) |
I |
|
— |
|
|
|
(236,580 |
) |
I |
|
— |
|
|
|
(236,580 |
) |
I |
|
— |
|
|
|
(236,580 |
) |
I |
|
— |
|
Redeemable convertible preferred stock (PlusAI) |
|
|
— |
|
|
|
593,505 |
|
|
|
(593,505 |
) |
H |
|
— |
|
|
|
(593,505 |
) |
H |
|
— |
|
|
|
(593,505 |
) |
H |
|
— |
|
|
|
(593,505 |
) |
H |
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Stockholders' Equity (Deficit): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Post-Closing Company Class A common stock |
|
|
— |
|
|
|
— |
|
|
|
— |
|
BB |
|
7 |
|
|
|
— |
|
BB |
|
6 |
|
|
|
— |
|
BB |
|
6 |
|
|
|
— |
|
BB |
|
5 |
|
|
|
|
|
|
|
|
|
|
— |
|
E |
|
|
|
|
— |
|
E |
|
|
|
|
— |
|
E |
|
|
|
|
— |
|
E |
|
|
||||||
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
F |
|
|
|
|
— |
|
F |
|
|
|
|
— |
|
F |
|
|
|
|
— |
|
F |
|
|
||||
|
|
|
— |
|
|
|
— |
|
|
|
2 |
|
H |
|
|
|
|
2 |
|
H |
|
|
|
|
2 |
|
H |
|
|
|
|
2 |
|
H |
|
|
||||
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
I |
|
|
|
|
— |
|
I |
|
|
|
|
— |
|
I |
|
|
|
|
— |
|
I |
|
|
||||
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
(1 |
) |
J |
|
|
|
|
(1 |
) |
JJ |
|
|
|
|
(2 |
) |
JJJ |
|
|
||||
|
|
|
— |
|
|
|
— |
|
|
|
5 |
|
K |
|
|
|
|
5 |
|
K |
|
|
|
|
5 |
|
K |
|
|
|
|
5 |
|
K |
|
|
||||
Post-Closing Company Class B common stock |
|
|
— |
|
|
|
— |
|
|
|
1 |
|
H |
|
1 |
|
|
|
1 |
|
H |
|
1 |
|
|
|
1 |
|
H |
|
1 |
|
|
|
1 |
|
H |
|
1 |
|
Post-Closing Company Class C common stock |
|
|
— |
|
|
|
— |
|
|
|
1 |
|
H |
|
1 |
|
|
|
1 |
|
H |
|
1 |
|
|
|
1 |
|
H |
|
1 |
|
|
|
1 |
|
H |
|
1 |
|
PlusAI Common Stock |
|
|
— |
|
|
|
1 |
|
|
|
(1 |
) |
K |
|
— |
|
|
|
(1 |
) |
K |
|
— |
|
|
|
(1 |
) |
K |
|
— |
|
|
|
(1 |
) |
K |
|
— |
|
TVA Class A Shares |
|
|
— |
|
|
|
— |
|
|
|
— |
|
K |
|
— |
|
|
|
— |
|
K |
|
— |
|
|
|
— |
|
K |
|
— |
|
|
|
— |
|
K |
|
— |
|
TVA Class B Shares |
|
|
1 |
|
|
|
— |
|
|
|
(1 |
) |
K |
|
— |
|
|
|
(1 |
) |
K |
|
— |
|
|
|
(1 |
) |
K |
|
— |
|
|
|
(1 |
) |
K |
|
— |
|
Additional paid-in capital |
|
|
— |
|
|
|
— |
|
|
|
(5,248 |
) |
BB |
|
942,440 |
|
|
|
(5,248 |
) |
BB |
|
885,546 |
|
|
|
(5,248 |
) |
BB |
|
828,651 |
|
|
|
(5,248 |
) |
BB |
|
725,482 |
|
|
|
|
— |
|
|
|
— |
|
|
|
(11,040 |
) |
EEE |
|
|
|
|
(11,040 |
) |
EEE |
|
|
|
|
(11,040 |
) |
EEE |
|
|
|
|
(11,040 |
) |
EEE |
|
|
||||
|
|
|
— |
|
|
|
— |
|
|
|
10,277 |
|
E |
|
|
|
|
10,277 |
|
E |
|
|
|
|
10,277 |
|
E |
|
|
|
|
10,277 |
|
E |
|
|
||||
|
|
|
— |
|
|
|
— |
|
|
|
42,256 |
|
F |
|
|
|
|
42,256 |
|
F |
|
|
|
|
42,256 |
|
F |
|
|
|
|
42,256 |
|
F |
|
|
||||
|
|
|
— |
|
|
|
— |
|
|
|
17,730 |
|
G |
|
|
|
|
17,730 |
|
G |
|
|
|
|
17,730 |
|
G |
|
|
|
|
17,730 |
|
G |
|
|
||||
|
|
|
— |
|
|
|
— |
|
|
|
593,501 |
|
H |
|
|
|
|
593,501 |
|
H |
|
|
|
|
593,501 |
|
H |
|
|
|
|
593,501 |
|
H |
|
|
||||
|
|
|
— |
|
|
|
— |
|
|
|
236,580 |
|
I |
|
|
|
|
236,580 |
|
I |
|
|
|
|
236,580 |
|
I |
|
|
|
|
236,580 |
|
I |
|
|
||||
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
(59,144 |
) |
J |
|
|
|
|
(118,289 |
) |
JJ |
|
|
|
|
(225,538 |
) |
JJJ |
|
|
||||
|
|
|
— |
|
|
|
— |
|
|
|
(3 |
) |
K |
|
|
|
|
(3 |
) |
K |
|
|
|
|
(3 |
) |
K |
|
|
|
|
(3 |
) |
K |
|
|
||||
|
|
|
— |
|
|
|
— |
|
|
|
34,214 |
|
L |
|
|
|
|
34,214 |
|
L |
|
|
|
|
34,214 |
|
L |
|
|
|
|
34,214 |
|
L |
|
|
||||
|
|
|
— |
|
|
|
— |
|
|
|
(18,981 |
) |
M |
|
|
|
|
(18,981 |
) |
M |
|
|
|
|
(18,981 |
) |
M |
|
|
|
|
(18,981 |
) |
M |
|
|
||||
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
2,250 |
|
CC |
|
|
|
|
4,500 |
|
CCC |
|
|
|
|
8,580 |
|
CCCC |
|
|
||||
|
|
|
— |
|
|
|
— |
|
|
|
43,154 |
|
EE |
|
|
|
|
43,154 |
|
EE |
|
|
|
|
43,154 |
|
EE |
|
|
|
|
43,154 |
|
EE |
|
|
||||
Accumulated other comprehensive loss |
|
|
— |
|
|
|
(166 |
) |
|
|
— |
|
|
|
(166 |
) |
|
|
— |
|
|
|
(166 |
) |
|
|
— |
|
|
|
(166 |
) |
|
|
— |
|
|
|
(166 |
) |
Accumulated deficit |
|
|
(11,481 |
) |
|
|
(653,752 |
) |
|
|
(1,051 |
) |
BB |
|
(810,169 |
) |
|
|
(1,051 |
) |
BB |
|
(810,169 |
) |
|
|
(1,051 |
) |
BB |
|
(810,169 |
) |
|
|
(1,051 |
) |
BB |
|
(810,169 |
) |
|
|
|
— |
|
|
|
— |
|
|
|
(7,500 |
) |
C |
|
|
|
|
(7,500 |
) |
CC |
|
|
|
|
(7,500 |
) |
CCC |
|
|
|
|
(7,500 |
) |
CCCC |
|
|
||||
|
|
|
— |
|
|
|
— |
|
|
|
(457 |
) |
D |
|
|
|
|
(457 |
) |
D |
|
|
|
|
(457 |
) |
D |
|
|
|
|
(457 |
) |
D |
|
|
||||
|
|
|
— |
|
|
|
— |
|
|
|
(34,214 |
) |
L |
|
|
|
|
(34,214 |
) |
L |
|
|
|
|
(34,214 |
) |
L |
|
|
|
|
(34,214 |
) |
L |
|
|
||||
|
|
|
— |
|
|
|
— |
|
|
|
18,981 |
|
M |
|
|
|
|
18,981 |
|
M |
|
|
|
|
18,981 |
|
M |
|
|
|
|
18,981 |
|
M |
|
|
||||
|
|
|
— |
|
|
|
— |
|
|
|
(10,205 |
) |
E |
|
|
|
|
(10,205 |
) |
E |
|
|
|
|
(10,205 |
) |
E |
|
|
|
|
(10,205 |
) |
E |
|
|
||||
|
|
|
— |
|
|
|
— |
|
|
|
(109,280 |
) |
EE |
|
|
|
|
(109,280 |
) |
EE |
|
|
|
|
(109,280 |
) |
EE |
|
|
|
|
(109,280 |
) |
EE |
|
|
||||
|
|
|
— |
|
|
|
— |
|
|
|
(1,210 |
) |
EEE |
|
|
|
|
(1,210 |
) |
EEE |
|
|
|
|
(1,210 |
) |
EEE |
|
|
|
|
(1,210 |
) |
EEE |
|
|
||||
Total stockholder's equity (deficit) |
|
|
(11,480 |
) |
|
|
(653,917 |
) |
|
|
797,511 |
|
|
|
132,114 |
|
|
|
740,616 |
|
|
|
75,219 |
|
|
|
683,721 |
|
|
|
18,324 |
|
|
|
580,551 |
|
|
|
(84,846 |
) |
Total liabilities, redeemable convertible preferred stock, and stockholders’ equity (deficit) |
|
$ |
236,964 |
|
|
$ |
25,472 |
|
|
$ |
10,745 |
|
|
$ |
273,181 |
|
|
$ |
(46,150 |
) |
|
$ |
216,286 |
|
|
$ |
(103,045 |
) |
|
$ |
159,391 |
|
|
$ |
(206,215 |
) |
|
$ |
56,221 |
|
324
Table of Contents
Unaudited Pro Forma Condensed Combined Statement of Operations
For the Six Months Ended June 30, 2026
(in thousands, except share and per share amounts)
|
|
|
|
|
|
|
No Redemption |
|
|
25% Redemption |
|
|
50% Redemption |
|
|
Maximum Redemption |
|
||||||||||||||||||||||
|
TVA III Historical |
|
|
PlusAI |
|
|
Transaction |
|
|
Pro Forma |
|
|
Transaction |
|
|
Pro Forma |
|
|
Transaction |
|
|
Pro Forma |
|
|
Transaction |
|
|
Pro Forma |
|
||||||||||
Revenue |
$ |
— |
|
|
$ |
25,075 |
|
|
$ |
— |
|
|
$ |
25,075 |
|
|
$ |
— |
|
|
$ |
25,075 |
|
|
$ |
— |
|
|
$ |
25,075 |
|
|
$ |
— |
|
|
$ |
25,075 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Research and development |
|
— |
|
|
|
21,618 |
|
|
|
8,689 |
|
P |
|
30,307 |
|
|
|
8,689 |
|
P |
|
30,307 |
|
|
|
8,689 |
|
P |
|
30,307 |
|
|
|
8,689 |
|
P |
|
30,307 |
|
Sales, marketing, general, and administrative |
|
3,245 |
|
|
|
18,410 |
|
|
|
2,730 |
|
P |
|
24,385 |
|
|
|
2,730 |
|
P |
|
24,385 |
|
|
|
2,730 |
|
P |
|
24,385 |
|
|
|
2,730 |
|
P |
|
24,385 |
|
HyperFoundry services support |
|
— |
|
|
|
819 |
|
|
|
— |
|
|
|
819 |
|
|
|
— |
|
|
|
819 |
|
|
|
— |
|
|
|
819 |
|
|
|
— |
|
|
|
819 |
|
Total operating expenses |
|
3,245 |
|
|
|
40,847 |
|
|
|
11,419 |
|
|
|
55,511 |
|
|
|
11,419 |
|
|
|
55,511 |
|
|
|
11,419 |
|
|
|
55,511 |
|
|
|
11,419 |
|
|
|
55,511 |
|
Loss from operations |
|
(3,245 |
) |
|
|
(15,772 |
) |
|
|
(11,419 |
) |
|
|
(30,436 |
) |
|
|
(11,419 |
) |
|
|
(30,436 |
) |
|
|
(11,419 |
) |
|
|
(30,436 |
) |
|
|
(11,419 |
) |
|
|
(30,436 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Other income (expense), net: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest income |
|
6 |
|
|
|
121 |
|
|
|
— |
|
|
|
127 |
|
|
|
— |
|
|
|
127 |
|
|
|
— |
|
|
|
127 |
|
|
|
— |
|
|
|
127 |
|
Interest expense |
|
— |
|
|
|
(9 |
) |
|
|
— |
|
|
|
(9 |
) |
|
|
— |
|
|
|
(9 |
) |
|
|
— |
|
|
|
(9 |
) |
|
|
— |
|
|
|
(9 |
) |
Other expense, net |
|
— |
|
|
|
(22 |
) |
|
|
— |
|
|
|
(22 |
) |
|
|
— |
|
|
|
(22 |
) |
|
|
— |
|
|
|
(22 |
) |
|
|
— |
|
|
|
(22 |
) |
Loss from investments, net |
|
— |
|
|
|
(3 |
) |
|
|
— |
|
|
|
(3 |
) |
|
|
— |
|
|
|
(3 |
) |
|
|
— |
|
|
|
(3 |
) |
|
|
— |
|
|
|
(3 |
) |
Change in fair value of simple agreements for future equity |
|
— |
|
|
|
7,218 |
|
|
|
(7,218 |
) |
O |
|
— |
|
|
|
(7,218 |
) |
O |
|
— |
|
|
|
(7,218 |
) |
O |
|
— |
|
|
|
(7,218 |
) |
O |
|
— |
|
Change in fair value of warrant liabilities |
|
— |
|
|
|
572 |
|
|
|
(572 |
) |
Q |
|
— |
|
|
|
(572 |
) |
Q |
|
— |
|
|
|
(572 |
) |
Q |
|
— |
|
|
|
(572 |
) |
Q |
|
— |
|
Interest income earned on investments held in Trust Account |
|
4,120 |
|
|
|
— |
|
|
|
(4,120 |
) |
N |
|
— |
|
|
|
(4,120 |
) |
N |
|
— |
|
|
|
(4,120 |
) |
N |
|
— |
|
|
|
(4,120 |
) |
N |
|
— |
|
Total other income (expense), net |
|
4,126 |
|
|
|
7,877 |
|
|
|
(11,910 |
) |
|
|
93 |
|
|
|
(11,910 |
) |
|
|
93 |
|
|
|
(11,910 |
) |
|
|
93 |
|
|
|
(11,910 |
) |
|
|
93 |
|
Loss before income taxes |
|
881 |
|
|
|
(7,895 |
) |
|
|
(23,329 |
) |
|
|
(30,343 |
) |
|
|
(23,329 |
) |
|
|
(30,343 |
) |
|
|
(23,329 |
) |
|
|
(30,343 |
) |
|
|
(23,329 |
) |
|
|
(30,343 |
) |
Income tax expense |
|
— |
|
|
|
(1 |
) |
|
|
— |
|
|
|
(1 |
) |
|
|
— |
|
|
|
(1 |
) |
|
|
— |
|
|
|
(1 |
) |
|
|
— |
|
|
|
(1 |
) |
Net income (loss) |
|
881 |
|
|
|
(7,896 |
) |
|
|
(23,329 |
) |
|
|
(30,344 |
) |
|
|
(23,329 |
) |
|
|
(30,344 |
) |
|
|
(23,329 |
) |
|
|
(30,344 |
) |
|
|
(23,329 |
) |
|
|
(30,344 |
) |
Accretion of redeemable convertible preferred stock to redemption value |
|
— |
|
|
|
(17,134 |
) |
|
|
17,134 |
|
R |
|
— |
|
|
|
17,134 |
|
R |
|
— |
|
|
|
17,134 |
|
R |
|
— |
|
|
|
17,134 |
|
R |
|
— |
|
Net income (loss) attributable to common shares |
$ |
881 |
|
|
$ |
(25,030 |
) |
|
$ |
(6,195 |
) |
|
$ |
(30,344 |
) |
|
$ |
(6,195 |
) |
|
$ |
(30,344 |
) |
|
$ |
(6,195 |
) |
|
$ |
(30,344 |
) |
|
$ |
(6,195 |
) |
|
$ |
(30,344 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Weighted average shares outstanding of PubCo Common Stock - basic and diluted (Note 5) |
|
— |
|
|
|
— |
|
|
|
107,080,161 |
|
S |
|
107,080,161 |
|
|
|
101,455,161 |
|
S |
|
101,455,161 |
|
|
|
95,830,161 |
|
S |
|
95,830,161 |
|
|
|
85,630,161 |
|
S |
|
85,630,161 |
|
Basic and diluted net loss per share - PubCo Common Stock (Note 4) |
|
— |
|
|
|
— |
|
|
$ |
(0.28 |
) |
S |
$ |
(0.28 |
) |
|
$ |
(0.30 |
) |
S |
$ |
(0.30 |
) |
|
$ |
(0.32 |
) |
S |
$ |
(0.32 |
) |
|
$ |
(0.35 |
) |
S |
$ |
(0.35 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic weighted average number of shares outstanding (PlusAI) |
|
— |
|
|
|
487,413,981 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Basic net loss per share (PlusAI) |
|
— |
|
|
$ |
(0.05 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Diluted weighted average number of shares outstanding (PlusAI) |
|
— |
|
|
|
521,868,253 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Diluted net loss per share (PlusAI) |
|
— |
|
|
$ |
(0.05 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Basic and diluted weighted average shares outstanding, Class A ordinary shares subject to possible redemption |
|
22,500,000 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Basic and diluted net income per share, Class A ordinary shares subject to possible redemption |
$ |
0.03 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Basic and diluted weighted average shares outstanding, Class B non-redeemable ordinary shares |
|
7,500,000 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Basic net income per share, Class B non-redeemable ordinary shares |
$ |
0.03 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Diluted weighted average shares outstanding, Class B non-redeemable ordinary shares |
|
7,500,000 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Diluted net income per share, Class B non-redeemable ordinary shares |
$ |
0.03 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
325
Table of Contents
Unaudited Pro Forma Condensed Combined Statement of Operations
For the Year Ended December 31, 2025
(in thousands, except share and per share amounts)
|
|
|
|
|
|
|
No Redemption |
|
|
25% Redemption |
|
|
50% Redemption |
|
|
Maximum Redemption |
|
||||||||||||||||||||||
|
TVA III Historical (Note 2) |
|
|
PlusAI |
|
|
Transaction |
|
|
Pro Forma |
|
|
Transaction |
|
|
Pro Forma |
|
|
Transaction |
|
|
Pro Forma |
|
|
Transaction |
|
|
Pro Forma |
|
||||||||||
Revenue |
$ |
— |
|
|
$ |
67 |
|
|
$ |
— |
|
|
$ |
67 |
|
|
$ |
— |
|
|
$ |
67 |
|
|
$ |
— |
|
|
$ |
67 |
|
|
$ |
— |
|
|
$ |
67 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Research and development |
|
— |
|
|
|
51,912 |
|
|
|
4,129 |
|
V |
|
56,041 |
|
|
|
4,129 |
|
V |
|
56,041 |
|
|
|
4,129 |
|
V |
|
56,041 |
|
|
|
4,129 |
|
V |
|
56,041 |
|
Sales, marketing, general, and administrative |
|
719 |
|
|
|
20,154 |
|
|
|
2,074 |
|
V |
|
22,947 |
|
|
|
2,074 |
|
V |
|
22,947 |
|
|
|
2,074 |
|
V |
|
22,947 |
|
|
|
2,074 |
|
V |
|
22,947 |
|
|
|
— |
|
|
|
— |
|
|
|
(1,051 |
) |
Z |
|
(1,051 |
) |
|
|
— |
|
Z |
|
— |
|
|
|
— |
|
Z |
|
— |
|
|
|
(1,051 |
) |
Z |
|
(1,051 |
) |
Total operating expenses |
|
719 |
|
|
|
72,066 |
|
|
|
5,152 |
|
|
|
77,937 |
|
|
|
6,203 |
|
|
|
78,988 |
|
|
|
6,203 |
|
|
|
78,988 |
|
|
|
5,152 |
|
|
|
77,937 |
|
Loss from operations |
|
(719 |
) |
|
|
(71,999 |
) |
|
|
(5,152 |
) |
|
|
(77,870 |
) |
|
|
(6,203 |
) |
|
|
(78,921 |
) |
|
|
(6,203 |
) |
|
|
(78,921 |
) |
|
|
(5,152 |
) |
|
|
(77,870 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Other income (expense), net: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest income |
|
24 |
|
|
|
715 |
|
|
|
— |
|
|
|
739 |
|
|
|
— |
|
|
|
739 |
|
|
|
— |
|
|
|
739 |
|
|
|
— |
|
|
|
739 |
|
Interest expense |
|
— |
|
|
|
(37 |
) |
|
|
— |
|
|
|
(37 |
) |
|
|
— |
|
|
|
(37 |
) |
|
|
— |
|
|
|
(37 |
) |
|
|
— |
|
|
|
(37 |
) |
Other expense, net |
|
— |
|
|
|
(432 |
) |
|
|
— |
|
|
|
(432 |
) |
|
|
— |
|
|
|
(432 |
) |
|
|
— |
|
|
|
(432 |
) |
|
|
— |
|
|
|
(432 |
) |
Loss from investments, net |
|
— |
|
|
|
(187 |
) |
|
|
— |
|
|
|
(187 |
) |
|
|
— |
|
|
|
(187 |
) |
|
|
— |
|
|
|
(187 |
) |
|
|
— |
|
|
|
(187 |
) |
Impairment of long-term investment |
|
— |
|
|
|
(9,295 |
) |
|
|
— |
|
|
|
(9,295 |
) |
|
|
— |
|
|
|
(9,295 |
) |
|
|
— |
|
|
|
(9,295 |
) |
|
|
— |
|
|
|
(9,295 |
) |
Change in fair value of simple agreements for future equity |
|
— |
|
|
|
(7,046 |
) |
|
|
7,046 |
|
U |
|
— |
|
|
|
7,046 |
|
U |
|
— |
|
|
|
7,046 |
|
U |
|
— |
|
|
|
7,046 |
|
U |
|
— |
|
Change in fair value of warrant liabilities |
|
— |
|
|
|
(5,060 |
) |
|
|
5,060 |
|
W |
|
— |
|
|
|
5,060 |
|
W |
|
— |
|
|
|
5,060 |
|
W |
|
— |
|
|
|
5,060 |
|
W |
|
— |
|
Interest income earned on investments held in Trust Account |
|
6,336 |
|
|
|
— |
|
|
|
(6,336 |
) |
T |
|
— |
|
|
|
(6,336 |
) |
T |
|
— |
|
|
|
(6,336 |
) |
T |
|
— |
|
|
|
(6,336 |
) |
T |
|
— |
|
Forgiveness of debt |
|
29 |
|
|
|
— |
|
|
|
— |
|
|
|
29 |
|
|
|
— |
|
|
|
29 |
|
|
|
— |
|
|
|
29 |
|
|
|
— |
|
|
|
29 |
|
Realized gain on NMSI warrants |
|
257 |
|
|
|
— |
|
|
|
(257 |
) |
Y |
|
— |
|
|
|
(257 |
) |
Y |
|
— |
|
|
|
(257 |
) |
Y |
|
— |
|
|
|
(257 |
) |
Y |
|
— |
|
Loss on issuance of common stock warrants |
|
— |
|
|
|
— |
|
|
|
(31,568 |
) |
Z |
|
(31,568 |
) |
|
|
(31,568 |
) |
Z |
|
(31,568 |
) |
|
|
(31,568 |
) |
Z |
|
(31,568 |
) |
|
|
(31,568 |
) |
Z |
|
(31,568 |
) |
Loss on issuance of convertible notes |
|
— |
|
|
|
— |
|
|
|
(34,558 |
) |
Z |
|
(34,558 |
) |
|
|
(34,558 |
) |
Z |
|
(34,558 |
) |
|
|
(34,558 |
) |
Z |
|
(34,558 |
) |
|
|
(34,558 |
) |
Z |
|
(34,558 |
) |
Loss on issuance of PIPE Financing |
|
— |
|
|
|
— |
|
|
|
(10,205 |
) |
Z |
|
(10,205 |
) |
|
|
(10,205 |
) |
Z |
|
(10,205 |
) |
|
|
(10,205 |
) |
Z |
|
(10,205 |
) |
|
|
(10,205 |
) |
Z |
|
(10,205 |
) |
Loss on issuance of forward purchase agreement |
|
— |
|
|
|
— |
|
|
|
(1,210 |
) |
Z |
|
(1,210 |
) |
|
|
(1,210 |
) |
Z |
|
(1,210 |
) |
|
|
(1,210 |
) |
Z |
|
(1,210 |
) |
|
|
(1,210 |
) |
Z |
|
(1,210 |
) |
Loss on issuance of share issuance agreements |
|
— |
|
|
|
— |
|
|
|
(43,154 |
) |
Z |
|
(43,154 |
) |
|
|
(43,154 |
) |
Z |
|
(43,154 |
) |
|
|
(43,154 |
) |
Z |
|
(43,154 |
) |
|
|
(43,154 |
) |
Z |
|
(43,154 |
) |
Total other income (expense), net |
|
6,646 |
|
|
|
(21,342 |
) |
|
|
(115,182 |
) |
|
|
(129,878 |
) |
|
|
(115,182 |
) |
|
|
(129,878 |
) |
|
|
(115,182 |
) |
|
|
(129,878 |
) |
|
|
(115,182 |
) |
|
|
(129,878 |
) |
Loss before income taxes |
|
5,927 |
|
|
|
(93,341 |
) |
|
|
(120,334 |
) |
|
|
(207,748 |
) |
|
|
(121,385 |
) |
|
|
(208,799 |
) |
|
|
(121,385 |
) |
|
|
(208,799 |
) |
|
|
(120,334 |
) |
|
|
(207,748 |
) |
Income tax expense |
|
— |
|
|
|
(69 |
) |
|
|
— |
|
|
|
(69 |
) |
|
|
— |
|
|
|
(69 |
) |
|
|
— |
|
|
|
(69 |
) |
|
|
— |
|
|
|
(69 |
) |
Net income (loss) |
|
5,927 |
|
|
|
(93,410 |
) |
|
|
(120,334 |
) |
|
|
(207,817 |
) |
|
|
(121,385 |
) |
|
|
(208,868 |
) |
|
|
(121,385 |
) |
|
|
(208,868 |
) |
|
|
(120,334 |
) |
|
|
(207,817 |
) |
Accretion of redeemable convertible preferred stock to redemption value |
|
— |
|
|
|
(58,581 |
) |
|
|
58,581 |
|
X |
|
— |
|
|
|
58,581 |
|
X |
|
— |
|
|
|
58,581 |
|
X |
|
— |
|
|
|
58,581 |
|
X |
|
— |
|
Net income (loss) attributable to common shares |
$ |
5,927 |
|
|
$ |
(151,991 |
) |
|
$ |
(61,753 |
) |
|
$ |
(207,817 |
) |
|
$ |
(62,804 |
) |
|
$ |
(208,868 |
) |
|
$ |
(62,804 |
) |
|
$ |
(208,868 |
) |
|
$ |
(61,753 |
) |
|
$ |
(207,817 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Weighted average shares outstanding of PubCo Common Stock - basic and diluted (Note 4) |
|
— |
|
|
|
— |
|
|
|
99,792,490 |
|
AA |
|
99,792,490 |
|
|
|
95,924,337 |
|
AA |
|
95,924,337 |
|
|
|
92,056,187 |
|
AA |
|
92,056,187 |
|
|
|
85,369,887 |
|
AA |
|
85,369,887 |
|
Basic and diluted net loss per share - PubCo Common Stock (Note 4) |
|
— |
|
|
|
— |
|
|
$ |
(2.08 |
) |
AA |
$ |
(2.08 |
) |
|
$ |
(2.18 |
) |
AA |
$ |
(2.18 |
) |
|
$ |
(2.27 |
) |
AA |
$ |
(2.27 |
) |
|
$ |
(2.43 |
) |
AA |
$ |
(2.43 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic weighted average number of shares outstanding (PlusAI) |
|
— |
|
|
|
466,389,318 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Basic net loss per share (PlusAI) |
|
— |
|
|
$ |
(0.33 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Diluted weighted average number of shares outstanding (PlusAI) |
|
— |
|
|
|
466,389,318 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Diluted net loss per share (PlusAI) |
|
— |
|
|
$ |
(0.33 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Basic weighted average shares outstanding, Class A ordinary shares subject to possible redemption |
|
15,472,603 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Basic net income per share, Class A ordinary shares subject to possible redemption |
$ |
0.26 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Diluted weighted average shares outstanding, Class A ordinary shares subject to possible redemption |
|
15,472,603 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Diluted net income per share, Class A ordinary shares subject to possible redemption |
$ |
0.26 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Basic weighted average shares outstanding, Class B ordinary shares(1) |
|
7,239,726 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Basic net income (loss) per share, Class B ordinary shares |
$ |
0.26 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Diluted weighted average shares outstanding, Class B ordinary shares(1) |
|
7,292,238 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Diluted net income (loss) per share, Class B ordinary shares |
$ |
0.26 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
326
Table of Contents
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
The business combination will be accounted for as a reverse recapitalization in accordance with GAAP. Under this method of accounting, TVA III, the legal acquirer, will be treated as the accounting acquiree for financial reporting purposes, and PlusAI, the legal acquiree, will be treated as the accounting acquirer.
The following unaudited pro forma condensed combined financial information has been prepared in accordance with Article 11 of Regulation S-X as amended by the final rule, Release No. 33-10786 “Amendments to Financial Disclosures about Acquired and Disposed Businesses.” The historical financial information of TVA III and PlusAI is presented in accordance with GAAP.
The pro forma condensed combined financial information includes four scenarios: No Redemption, 25% Redemption, 50% Redemption and Maximum Redemption. The following represents the assumptions regarding the business combination closing in each of the statements included:
Management has made significant estimates and assumptions in its determination of the pro forma adjustments (“Transaction Accounting Adjustments”). As the unaudited pro forma condensed combined financial information has been prepared based on these preliminary estimates, the final amounts recorded may differ materially from the information presented. The unaudited pro forma condensed combined financial information does not give effect to any anticipated synergies or dis-synergies, operating efficiencies or inefficiencies, tax savings, or cost savings that may be associated with the business combination and Transactions. The pro forma adjustments reflecting the completion of the business combination and other transactions are based on currently available information, assumptions, and methodologies that TVA III believes are reasonable under the circumstances. The Transaction Accounting Adjustments, which are described in the accompanying notes, may be revised as additional information becomes available. Therefore, it is likely that the actual adjustments will differ from the pro forma adjustments, and the difference may be material. TVA III believes that its assumptions and methodologies provide a reasonable basis for presenting all of the significant effects of the business combination and Transactions based on information available to management at the current time and that the pro forma adjustments give appropriate effect to those assumptions and are properly applied in the unaudited pro forma condensed combined financial information.
The unaudited pro forma condensed combined financial information is not necessarily indicative of what the actual results of operations and consolidated financial position would have been had the business combination and Transactions taken place on the dates indicated, nor are they indicative of the future consolidated results of operations or financial position of the Post-Closing Company. The unaudited pro forma condensed combined financial information should be read in conjunction with the audited financial statements of TVA III and the audited consolidated financial statements of PlusAI.
The unaudited pro forma condensed combined financial information does not include income tax effects as the parties to the business combination are evaluating the post-closing tax implications. Accordingly, the unaudited pro forma condensed combined provision for income taxes does not necessarily reflect the amounts that would have resulted had the parties to the business combination filed consolidated income tax returns during the periods presented, nor does it reflect the amounts of pro forma deferred tax assets or liabilities as
327
Table of Contents
of the periods presented. Additionally, the share amounts presented do not reflect a reduction for shares that the Post-Closing Company may withhold to cover statutory tax obligations from restricted stock units and performance-based restricted stock units of PlusAI upon their settlement.
The Domestication will occur at least one business day prior to the Merger Closing Date. At the effective time of the Domestication, each TVA III Class A Ordinary Share, including shares issuable upon the Sponsor Share Conversion, will be automatically surrendered and will be converted into one share of TVA III Class A Common Stock. Each issued and outstanding TVA III Public Warrant and TVA III Private Placement Warrant will automatically convert into warrants to acquire a corresponding number of shares of TVA III Class A Common Stock. No accounting adjustments are expected to be recorded from the Domestication.
The unaudited pro forma condensed combined balance sheet as of June 30, 2026 includes the following Transaction Accounting Adjustments related to the business combination and Transactions:
328
Table of Contents
329
Table of Contents
330
Table of Contents
The unaudited pro forma condensed combined statement of operations for the six months ended June 30, 2026 includes the following Transaction Accounting Adjustments related to the business combination and Transactions:
The unaudited pro forma condensed combined statement of operations for the year ended December 31, 2025 includes the following Transaction Accounting Adjustments related to the business combination and Transactions:
331
Table of Contents
Represents the net loss per share calculated using the historical weighted average shares outstanding and the issuance of additional shares in connection with the business combination and other transactions, assuming the shares were outstanding since January 1, 2025. As the business combination and Transactions are being reflected as if they had occurred as of January 1, 2025, the calculation of weighted average shares outstanding for basic and diluted net loss per share assumes that the shares issuable relating to the business combination and Transactions have been outstanding for the entire periods presented. Under the 25% Redemption, 50% Redemption and Maximum Redemption scenarios, the shares of the Post-Closing Company common stock assumed to be redeemed by TVA III Public Shareholders are eliminated as of January 1, 2025.
The unaudited pro forma condensed combined financial information has been prepared assuming the four redemption scenarios for the six months ended June 30, 2026 and the year ended December 31, 2025 (in thousands, except share and per share amounts):
|
|
For the six months ended June 30, 2026 |
|
|||||||||||||
|
|
No Redemption |
|
|
25% Redemption |
|
|
50% Redemption |
|
|
Maximum Redemption |
|
||||
Weighted average shares calculation, basic and diluted |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net loss attributable to common shares |
|
$ |
(30,344 |
) |
|
$ |
(30,344 |
) |
|
$ |
(30,344 |
) |
|
$ |
(30,344 |
) |
Basic weighted average shares outstanding |
|
|
107,080,161 |
|
|
|
101,455,161 |
|
|
|
95,830,161 |
|
|
|
85,630,161 |
|
Pro forma net loss per share, basic and diluted |
|
$ |
(0.28 |
) |
|
$ |
(0.30 |
) |
|
$ |
(0.32 |
) |
|
$ |
(0.35 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average shares outstanding, basic and diluted |
|
|
|
|
|
|
|
|
|
|
|
|
||||
TVA III public shareholders |
|
|
22,500,000 |
|
|
|
16,875,000 |
|
|
|
11,250,000 |
|
|
|
1,050,000 |
|
Sponsor |
|
|
7,500,000 |
|
|
|
7,500,000 |
|
|
|
7,500,000 |
|
|
|
7,500,000 |
|
PlusAI stockholders |
|
|
76,980,161 |
|
|
|
76,980,161 |
|
|
|
76,980,161 |
|
|
|
76,980,161 |
|
CCM |
|
|
100,000 |
|
|
|
100,000 |
|
|
|
100,000 |
|
|
|
100,000 |
|
Total weighted average shares outstanding, basic and diluted |
|
|
107,080,161 |
|
|
|
101,455,161 |
|
|
|
95,830,161 |
|
|
|
85,630,161 |
|
|
|
For the year ended December 31, 2025 |
|
|||||||||||||
|
|
No Redemption |
|
|
25% Redemption |
|
|
50% Redemption |
|
|
Maximum Redemption |
|
||||
Weighted average shares calculation, basic and diluted |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net loss attributable to common shares |
|
$ |
(207,817 |
) |
|
$ |
(208,868 |
) |
|
$ |
(208,868 |
) |
|
$ |
(207,817 |
) |
Basic weighted average shares outstanding |
|
|
99,792,490 |
|
|
|
95,924,337 |
|
|
|
92,056,187 |
|
|
|
85,369,887 |
|
Pro forma net loss per share, basic and diluted |
|
$ |
(2.08 |
) |
|
$ |
(2.18 |
) |
|
$ |
(2.27 |
) |
|
$ |
(2.43 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average shares outstanding, basic and diluted |
|
|
|
|
|
|
|
|
|
|
|
|
||||
TVA III public shareholders |
|
|
15,472,603 |
|
|
|
11,604,450 |
|
|
|
7,736,300 |
|
|
|
1,050,000 |
|
Sponsor |
|
|
7,239,726 |
|
|
|
7,239,726 |
|
|
|
7,239,726 |
|
|
|
7,239,726 |
|
PlusAI stockholders |
|
|
76,980,161 |
|
|
|
76,980,161 |
|
|
|
76,980,161 |
|
|
|
76,980,161 |
|
CCM |
|
|
100,000 |
|
|
|
100,000 |
|
|
|
100,000 |
|
|
|
100,000 |
|
Total weighted average shares outstanding, basic and diluted |
|
|
99,792,490 |
|
|
|
95,924,337 |
|
|
|
92,056,187 |
|
|
|
85,369,887 |
|
332
Table of Contents
The following outstanding shares of the Post-Closing Company common stock equivalents were excluded from the computation of pro forma diluted net loss per share for the scenarios presented because including them would have had an anti-dilutive effect for the six months ended June 30, 2026:
Antidilutive securities: |
|
No Redemption |
|
|
25% Redemption |
|
|
50% Redemption |
|
|
Maximum Redemption |
|
||||
TVA III PublicWarrants (1) |
|
|
11,250,000 |
|
|
|
11,250,000 |
|
|
|
11,250,000 |
|
|
|
11,250,000 |
|
TVA III Private Placement Warrants (1) |
|
|
7,568,750 |
|
|
|
7,568,750 |
|
|
|
7,568,750 |
|
|
|
7,568,750 |
|
PlusAI Warrants (2) |
|
|
18,510,906 |
|
|
|
18,510,906 |
|
|
|
18,510,906 |
|
|
|
18,510,906 |
|
PIPE Warrants (7) |
|
|
5,724,068 |
|
|
|
5,724,068 |
|
|
|
5,724,068 |
|
|
|
5,724,068 |
|
Earnout Shares (3) |
|
|
63,000,000 |
|
|
|
63,000,000 |
|
|
|
63,000,000 |
|
|
|
63,000,000 |
|
PubCo Options(4) |
|
|
2,389,994 |
|
|
|
2,389,994 |
|
|
|
2,389,994 |
|
|
|
2,389,994 |
|
PubCo RSUs (5) |
|
|
1,978,916 |
|
|
|
1,978,916 |
|
|
|
1,978,916 |
|
|
|
1,978,916 |
|
Unvested IVECO Shares (6) |
|
|
570,095 |
|
|
|
570,095 |
|
|
|
570,095 |
|
|
|
570,095 |
|
Convertible Notes (8) |
|
|
6,404,367 |
|
|
|
6,404,367 |
|
|
|
6,404,367 |
|
|
|
6,404,367 |
|
Total |
|
|
117,397,096 |
|
|
|
117,397,096 |
|
|
|
117,397,096 |
|
|
|
117,397,096 |
|
Earnout Shares
Following the Closing, eligible holders of PlusAI are contractually entitled to receive up to 70,000,000 additional shares of the Post-Closing Company common stock. This contingent right is comprised of 7,000,000 shares allocated to the Post-Closing RSU Pool to be granted by the Post-Closing Company and 63,000,000 Earnout Shares being equally allocated between the three market performance targets. Shares allocated to the Post-Closing RSU Pool are reserved for restricted stock unit grants under the Equity Incentive Plan. Grants may be made to selected service provides who were PlusAI service providers immediately prior to the Closing and who continue to provide services through the applicable grant date after the completion of the Transaction.
The Earnout Shares fair value is determined based on a valuation using a Monte Carlo simulation with key inputs and assumptions such as stock price, term, dividend yield, risk-free rate, and volatility. Management has determined the fair value of the Earnout Shares to be approximately $529.9 million as of June 30, 2026 for all of the redemption scenarios.
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The preliminary estimated fair value of the Earnout Shares was determined using the most reliable information currently available. Assumptions used in the preliminary valuation, which are subject to change at the closing, were as follows:
Current stock price: The stock price is set based on PlusAI’s total equity value from the 409A analysis as of June 30, 2026 as $10.00 per share.
Expected volatility: The volatility rate of 65.0% is determined using an average of historical volatilities of selected industry peers deemed to be comparable to PlusAI’s business, corresponding to the expected term of the awards.
Risk-free interest rate: The risk-free interest rate of 4.2% is based on the U.S. Treasury yield curve in effect at the time of issuance for zero-coupon U.S. Treasury notes with maturities corresponding to the expected five-year term of the Earnout Period.
Expected term: The expected term is the 5-year term of the Earnout Period.
Expected dividend yield: The expected dividend yield is zero as PlusAI has never declared or paid cash dividends and has no current plans to do so during the expected term.
The fair value of the Earnout Shares is subject to change as additional information becomes available and additional analyses are performed over the fair value upon the closing, and such changes in fair value could be material.
PIPE Warrants and Convertible Notes
The preliminary estimated fair value of the Convertible Notes and PIPE Warrants was determined using the most reliable information currently available. The estimated fair value for the Convertible Notes is $71.4 million, the estimated fair value for the Convertible Notes Warrants is $52.3 million, and estimated fair value for the PIPE Warrants is $3.9 million for all of the redemption scenarios.
The Convertible Notes and PIPE Warrants fair value is determined based on a valuation using a Monte Carlo simulation with key inputs and assumptions such as stock price, term, dividend yield, risk-free rate, and volatility. Assumptions used in the preliminary valuation, which are subject to change at the closing, were as follows:
Current stock price: The stock price is set based on PlusAI’s common stock price as of the Merger transaction date as $10.00 per share.
Expected volatility: The volatility rate of 70.0% is determined using an average of historical volatilities of selected industry peers deemed to be comparable to PlusAI’s business, corresponding to the expected term of the awards.
Risk-free interest rate: The risk-free interest rate of 4.6% is based on the U.S. Treasury yield curve in effect at the time of issuance for zero-coupon U.S. Treasury notes with maturities corresponding to the expected five-year term of the Earnout Period.
Expected term: The expected term is the five-year term.
Expected dividend yield: The expected dividend yield is zero as PlusAI has never declared or paid cash dividends and has no current plans to do so during the expected term.
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Forward Purchase Agreement
The preliminary estimated fair value of the Forward Purchase Agreement liability was determined using the most reliable information currently available. The estimated fair value of the Forward Purchase Agreement is $1.2 million for all of the redemption scenarios.
The Forward Purchase Agreement fair value is determined based on a valuation using a Monte Carlo simulation with key inputs and assumptions such as stock price, term, dividend yield, risk-free rate, and volatility. Assumptions used in the preliminary valuation, which are subject to change at the closing, were as follows:
Current stock price: The stock price is set based on PlusAI’s common stock price as of the Merger transaction date as $10.00 per share.
Expected volatility: The volatility rate of 80% is determined using an average of historical volatilities of selected industry peers deemed to be comparable to PlusAI’s business, corresponding to the expected term of the awards.
Risk-free interest rate: The risk-free interest rate of 3.90% is based on the U.S. Treasury yield curve in effect at the time of issuance for zero-coupon U.S. Treasury notes with maturities corresponding to the expected five-year term of the Earnout Period.
Expected term: The expected term is the 35-day term.
Expected dividend yield: The expected dividend yield is zero as PlusAI has never declared or paid cash dividends and has no current plans to do so during the expected term.
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DILUTION
TVA III shareholders who acquired TVA III public shares in the TVA III IPO will have their ownership interests diluted to the extent of the difference between the IPO price of $10.00 per TVA III public share upon the IPO and the net tangible book value per share at the time of the Transactions assuming various sources of material probable dilution described below. As of June 30, 2026, TVA III’s net tangible book value was $(11.5) million, calculated as total assets of $237.0 million less total liabilities of $11.9 million, and less TVA III public shares subject to redemption classified in temporary equity of $236.6 million. The number of TVA III Ordinary Shares outstanding as of June 30, 2026, was 30,000,000, which includes 22,500,000 TVA III Class A Ordinary Shares subject to redemption at the estimated value of $10.51 per share and 7,500,000 TVA III Class B Ordinary Shares held by the Sponsor.
The presentation below excludes the effect of consummating the Merger and the shares of the Post-Closing Company common stock issuable to PlusAI stockholders. The presentation below takes into account the reclassification of unredeemed TVA III public shares held by TVA III Public Shareholders to permanent equity, the payment of the estimated TVA III transaction costs in connection with the potential Transactions, and the extinguishment of the associated deferred underwriting fee liability. In addition to excluding the Merger itself, this presentation excludes shares of the Post-Closing Company common stock issuable upon the exercise of the outstanding unexercised instruments, including TVA III warrants, PlusAI warrants, PlusAI options, and PlusAI RSUs. This presentation also excludes shares of the Post-Closing Company common stock that will initially be available for issuance under the Incentive Plan and the ESPP of the Post-Closing Company.
The following table presents the net tangible book value per share at various redemption levels that may occur in connection with the consummation of the Transactions, assuming various sources of material probable dilution, but excluding the effects of the Merger:
|
|
No Redemption |
|
|
25% Redemption |
|
|
50% Redemption |
|
|
Maximum Redemption |
|
||||||||||||||||||||
|
|
Shares |
|
|
Net Tangible Book Value Per Share |
|
|
Shares |
|
|
Net Tangible Book Value Per Share |
|
|
Shares |
|
|
Net Tangible Book Value Per Share |
|
|
Shares |
|
|
Net Tangible Book Value Per Share |
|
||||||||
TVA net tangible book value per share as of June 30, 2026 |
|
|
30,000,000 |
|
|
$ |
(0.38 |
) |
|
|
30,000,000 |
|
|
$ |
(0.38 |
) |
|
|
30,000,000 |
|
|
$ |
(0.38 |
) |
|
|
30,000,000 |
|
|
$ |
(0.38 |
) |
TVA Shareholders, after the redemption of TVA public shares and payment of estimated TVA transaction costs |
|
|
30,000,000 |
|
|
$ |
8.25 |
|
|
|
24,375,000 |
|
|
$ |
7.73 |
|
|
|
18,750,000 |
|
|
$ |
6.90 |
|
|
|
8,550,000 |
|
|
$ |
2.58 |
|
Initial offering price of TVA public shares |
|
|
|
|
$ |
10.00 |
|
|
|
|
|
$ |
10.00 |
|
|
|
|
|
$ |
10.00 |
|
|
|
|
|
$ |
10.00 |
|
||||
Pro forma net tangible book value per share from the Transactions, excluding the Mergers |
|
|
|
|
$ |
8.25 |
|
|
|
|
|
$ |
7.73 |
|
|
|
|
|
$ |
6.90 |
|
|
|
|
|
$ |
2.58 |
|
||||
Dilution per share to non-redeeming TVA public shareholders |
|
|
|
|
$ |
1.75 |
|
|
|
|
|
$ |
2.27 |
|
|
|
|
|
$ |
3.10 |
|
|
|
|
|
$ |
7.42 |
|
||||
The calculation of net tangible book value is as follows (in thousands):
|
|
No Redemption |
|
|
25% Redemption |
|
|
50% Redemption |
|
|
Maximum Redemption |
|
||||
TVA III net tangible book value as of June 30, 2026 |
|
$ |
(11,480 |
) |
|
$ |
(11,480 |
) |
|
$ |
(11,480 |
) |
|
$ |
(11,480 |
) |
Adjustment to reflect reclassification of unredeemed TVA public shares to permanent equity |
|
|
236,580 |
|
|
|
177,435 |
|
|
|
118,290 |
|
|
|
11,040 |
|
Adjustment to reflect additional financing through PIPE |
|
|
30,000 |
|
|
|
30,000 |
|
|
|
30,000 |
|
|
|
30,000 |
|
Adjustment to reflect payment of estimated TVA transaction costs, net of deferred underwriting fee liability |
|
|
(7,500 |
) |
|
|
(7,500 |
) |
|
|
(7,500 |
) |
|
|
(7,500 |
) |
TVA net tangible book value, as adjusted for redemptions, reclassification of unredeemed TVA public shares to permanent equity, and payment of estimated unaccrued TVA transaction costs |
|
$ |
247,600 |
|
|
$ |
188,455 |
|
|
$ |
129,310 |
|
|
$ |
22,060 |
|
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The calculation of the number of shares for various redemption scenarios is as follows:
|
|
No Redemption |
|
|
25% Redemption |
|
|
50% Redemption |
|
|
Maximum Redemption |
|
||||
TVA III ordinary shares outstanding as of June 30, 2026 |
|
|
30,000,000 |
|
|
|
30,000,000 |
|
|
|
30,000,000 |
|
|
|
30,000,000 |
|
Adjustment to reflect assumed redemption of TVA III public shares |
|
|
— |
|
|
|
(5,625,000 |
) |
|
|
(11,250,000 |
) |
|
|
(21,450,000 |
) |
TVA III ordinary shares outstanding, after the redemption of TVA III public shares |
|
|
30,000,000 |
|
|
|
24,375,000 |
|
|
|
18,750,000 |
|
|
|
8,550,000 |
|
After taking into account the effects of the consummation of the Merger and shares issuable to PlusAI stockholders, the valuation of the Post-Closing Company would need to equal the following amounts in order for the non-redeeming shareholders’ interest per share to be at least equal to the IPO price per TVA III public share of $10.00 per share (in thousands, except share and per share information):
|
|
No Redemption |
|
|
25% Redemption |
|
|
50% Redemption |
|
|
Maximum Redemption |
|
||||
TVA III public stockholders (1) |
|
|
22,500,000 |
|
|
|
16,875,000 |
|
|
|
11,250,000 |
|
|
|
1,050,000 |
|
Sponsor and affiliates (2) |
|
|
7,500,000 |
|
|
|
7,500,000 |
|
|
|
7,500,000 |
|
|
|
7,500,000 |
|
PlusAI stockholders (3) |
|
|
77,550,256 |
|
|
|
77,550,256 |
|
|
|
77,550,256 |
|
|
|
77,550,256 |
|
CCM (4) |
|
|
100,000 |
|
|
|
100,000 |
|
|
|
100,000 |
|
|
|
100,000 |
|
Total Post-Closing Company Common Stock |
|
|
107,650,256 |
|
|
|
102,025,256 |
|
|
|
96,400,256 |
|
|
|
86,200,256 |
|
TVA III IPO Price Per Share |
|
$ |
10.00 |
|
|
$ |
10.00 |
|
|
$ |
10.00 |
|
|
$ |
10.00 |
|
Valuation of the Post-Closing Company to achieve TVA III IPO Price Per Share |
|
$ |
1,076,503 |
|
|
$ |
1,020,253 |
|
|
$ |
964,003 |
|
|
$ |
862,003 |
|
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Table of Contents
This required disclosure is not a guarantee that the trading price of the common stock of the Post-Closing Company will not be below the IPO offering price of TVA III, nor is the disclosure a guarantee that the Post-Closing Company valuation will attain one of the stated levels of valuation. This required disclosure excludes the following potential sources of dilution that are not automatically convertible and are expected to remain outstanding upon the consummation of the Transactions:
|
|
No Redemption Scenario |
|
|
25% Redemption Scenario |
|
|
50% Redemption Scenario |
|
|
Maximum Redemption Scenario |
|
||||
Earnout shares |
|
|
63,000,000 |
|
|
|
63,000,000 |
|
|
|
63,000,000 |
|
|
|
63,000,000 |
|
TVA III Public warrants |
|
|
11,250,000 |
|
|
|
11,250,000 |
|
|
|
11,250,000 |
|
|
|
11,250,000 |
|
TVA III Private Placement warrants |
|
|
7,568,750 |
|
|
|
7,568,750 |
|
|
|
7,568,750 |
|
|
|
7,568,750 |
|
PlusAI warrants |
|
|
18,510,906 |
|
|
|
18,510,906 |
|
|
|
18,510,906 |
|
|
|
18,510,906 |
|
PIPE warrants |
|
|
5,724,068 |
|
|
|
5,724,068 |
|
|
|
5,724,068 |
|
|
|
5,724,068 |
|
Convertible notes |
|
|
6,404,367 |
|
|
|
6,404,367 |
|
|
|
6,404,367 |
|
|
|
6,404,367 |
|
PubCo Options |
|
|
2,389,994 |
|
|
|
2,389,994 |
|
|
|
2,389,994 |
|
|
|
2,389,994 |
|
PubCo RSUs |
|
|
1,978,916 |
|
|
|
1,978,916 |
|
|
|
1,978,916 |
|
|
|
1,978,916 |
|
Total |
|
|
116,827,001 |
|
|
|
116,827,001 |
|
|
|
116,827,001 |
|
|
|
116,827,001 |
|
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Table of Contents
DESCRIPTION OF SECURITIES
The following summary of the material terms of TVA III’s securities prior to and following the business combination is not intended to be a complete summary of the rights and preferences of such securities.
The terms of TVA III’s securities are currently governed by the laws of the Cayman Islands, including the Companies Act and the TVA III Articles. We expect to adopt the Proposed Certificate of Incorporation and Proposed Bylaws of the Post-Closing Company in connection with the consummation of the business combination, which will rename TVA III as “PlusAI Holdings, Inc.” As a result of the business combination, TVA III shareholders that hold TVA III Ordinary Shares and PlusAI stockholders that receive shares of Post-Closing Company common stock in the business combination will each become stockholders of the Post-Closing Company.
Because it is only a summary, this section does not contain all of the information that may be important to you. You should refer to the section entitled “Comparison of Shareholder Rights” as well as the Post-Closing Company’s Proposed Certificate of Incorporation and the Post-Closing Company’s Proposed Bylaws, which are attached to this proxy statement/prospectus as Annex B and Annex C, respectively, and to the applicable provisions of Delaware law.
Authorized and Outstanding Stock
As of the close of business on the TVA III Record Date, there were (1) 22,500,000 TVA III Class A Ordinary Shares outstanding, (2) 7,500,000 TVA III Class B Ordinary Shares outstanding and (3) no TVA III Preference Shares outstanding.
All of the issued and outstanding TVA III Class B Ordinary Shares will convert into TVA III Class A Ordinary Shares on a one-for-one basis (the “initial conversion ratio”) immediately prior to the Domestication. As described under “— TVA III Capital Stock Prior to the Business Combination — TVA III Founder Shares,” pursuant to the terms of the Sponsor Support Agreement, the Sponsor and the Insiders have agreed to waive any adjustment to the initial conversion ratio under the TVA III MAA in connection with the business combination.
The Proposed Certificate of Incorporation authorizes the issuance of shares of capital stock, each with a par value of $0.0001, of (1) shares of Post-Closing Company common stock (consisting of (a) 1,000,000,000 shares of Post-Closing Company Class A common stock, and (b) shares of Post-Closing Company Class B common stock, and (c) shares of Post-Closing Company Class C common stock) and (2) 100,000,000 shares of Post-Closing Company preferred stock.
The outstanding TVA III Ordinary Shares are, and the shares of Post-Closing Company Class A common stock issuable in connection with the business combination will be, duly authorized, validly issued, fully paid and non-assessable.
Post-Closing Company Capital Stock
Dividend Rights
Subject to preferences that may apply to any shares of preferred stock outstanding at the time, the holders of our common stock are entitled to receive dividends out of funds legally available if our board of directors, in its discretion, determines to issue dividends and then only at the times and in the amounts that our board of directors may determine.
No Preemptive or Similar Rights
Our common stock is not entitled to preemptive rights, and is not subject to redemption or sinking fund provisions.
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Table of Contents
Voting Rights
Holders of Post-Closing Company Class A common stock will be entitled to one vote per share held as of the applicable record date on all matters submitted to a vote of our stockholders, holders of Post-Closing Company Class B common stock will be entitled to 20 votes per share held as of the applicable record date on all matters submitted to a vote of our stockholders, and holders of Post-Closing Company Class C common stock will be entitled to one fourth of one vote (1/4) per share held as of the applicable record date on all matters submitted to a vote of our stockholders. The holders of Post-Closing Company Class A common stock, Post-Closing Company Class B common stock, and Post-Closing Company Class C common stock will vote together as a single class on all matters submitted to a vote of our stockholders, unless otherwise required by Delaware law or our Proposed Certificate of Incorporation. Delaware law could require either holders of Post-Closing Company Class A common stock, Post-Closing Company Class B common stock, or Post-Closing Company Class C common stock to vote separately as a single class if we were to seek to amend our Proposed Certificate of Incorporation in a manner that alters or changes the powers, preferences, or special rights of such class of common stock in a manner that affected such shares adversely but does not so affect the shares of the other class of common stock.
The Post-Closing Company’s stockholders will not have the ability to cumulate votes for the election of directors. As a result, the holders of a plurality of the voting power of the shares present in person or represented by proxy at the meeting and entitled to vote on the election of directors will be able to elect all of the directors standing for election, if they should so choose. With respect to matters other than the election of directors, at any meeting of the stockholders at which a quorum is present or represented, the affirmative vote of a majority of the voting power of the shares present in person or represented by proxy at such meeting and entitled to vote on the subject matter shall be the act of the stockholders, except as otherwise provided by law, the Post-Closing Company’s governing documents or the rules of the stock exchange on which the Post-Closing Company’s securities are listed. The holders of a majority of the voting power of the capital stock issued and outstanding and entitled to vote as of the applicable record date, present in person or represented by proxy, shall constitute a quorum for the transaction of business at all meetings of the stockholders.
The Proposed Certificate of Incorporation and Proposed Bylaws will provide for a classified board of directors consisting of three classes of approximately equal size, each serving staggered three‑year terms. Only the directors in one class will be elected at each annual meeting of our stockholders, with the directors in the other classes continuing for the remainder of their respective three‑year terms.
Liquidation Rights
If the Post-Closing Company becomes subject to a liquidation, dissolution or winding-up, the assets legally available for distribution to its stockholders would be distributable ratably among the holders of its common stock and any participating preferred stock outstanding at that time, subject to prior satisfaction of all outstanding debt and liabilities and the preferential rights of and the payment of liquidation preferences, if any, on any outstanding shares of preferred stock.
Fully Paid and Nonassessable
In connection with this offering, our legal counsel will opine that the shares of Post-Closing Company Class A common stock to be issued in this offering will be fully paid and non-assessable.
Conversion
Each outstanding share of Post-Closing Company Class B common stock is convertible at any time at the option of the holder into one share of Post-Closing Company Class A common stock. In addition, each outstanding share of Post-Closing Company Class B common stock will convert automatically into one share of Post-Closing Company Class A common stock upon any transfer, whether or not for value, except for certain exempted transfers, including, but not limited to, certain transfers effected for estate planning purposes. Each outstanding share of Post-Closing Company Class B common stock held by Messrs. Zheng
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or Liu (each a "Founder"), or their respective permitted transferees, will convert automatically into one share of Post-Closing Company Class A common stock upon the date that is twelve months, which period may be extended for up to 18 months upon the approval of a majority of the independent directors then in office, following the death or disability of such Founder, unless the other remaining Founder retains exclusive voting control over such shares.
Each outstanding share of Post-Closing Company Class B common stock shall automatically convert into one share of Post-Closing Company Class A common stock following the earliest to occur of (i) the date specified by the holders of two-thirds of the then outstanding shares of Post-Closing Company Class B common stock, voting as a separate series, or in the affirmative written election executed by the holders of two-thirds of the then outstanding shares of Post-Closing Company Class B common stock; (ii) 5:00 p.m. Eastern Time on the date that is ten years after the Closing; (iii) the date fixed by the board of directors of the Post-Closing Company that is no less than 61 days and no more than 180 days following the first time after 11:59 p.m. Eastern Time on the closing date that (A) both Founders are no longer providing services to the Post-Closing Company as an officer, employee, or consultant and are no longer members of the board of directors of the Post-Closing Company as a result of their voluntary resignation or as a result of their request or agreement not to be renominated as directors or (B) the date that either Founder's service with us is terminated for Cause (as defined in our amended and restated certificate of incorporation) if the other Founder is not employed by us following such termination; and (iv) the date that is twelve months following the death or disability of the both Founders, which period may be extended for up to 18 months upon the approval of a majority of the independent directors then in office (the "Final Conversion Date"). Following the conversion of all outstanding shares of Post-Closing Company Class B common stock into Post-Closing Company Class A common stock, no further shares of Post-Closing Company Class B common stock will be issued or reissued.
Each share of Post-Closing Company Class C common stock shall automatically, without any further action required on the part of the Post-Closing Company or the holder thereof, convert into one fully paid and nonassessable share of Post-Closing Company Class A common stock if:
Preferred Stock
Under the Proposed Certificate of Incorporation, the Post-Closing Company Board will have the authority, subject to limitations prescribed by Delaware law, to issue shares of authorized but unissued preferred stock in one or more series, and to fix the designations, powers, preferences and rights, and the qualifications, limitations or restrictions thereof, in each case without further vote or action by its stockholders. These powers, rights, preferences and privileges could include dividend rights, dividend rate, conversion rights, voting rights, rights and terms of redemption (including sinking fund provisions), redemption price(s) and liquidation preferences, and the number of shares constituting any series or the designation of such series, any or all of which may be greater than the rights of the common stock. The issuance of preferred stock could adversely affect the voting power of holders of common stock and the likelihood that such holders will receive dividend payments and payments upon liquidation. In addition, the issuance of preferred stock could have the effect of delaying, deferring or preventing a change in our control or other corporate action. As of the Closing, no shares of preferred stock will be outstanding.
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Options
As of June 30, 2026, we had outstanding options to purchase an aggregate of 57,318,035 shares of Plus Class A common stock, with a weighted-average exercise price of $0.08 per share, under our 2017 Plan and 2021 Plan.
Restricted Stock Units
As of June 30, 2026, we had 162,312,355 shares of Plus Class A common stock subject to outstanding RSUs under our 2021 Plan.
Warrants
TVA III Warrants
In connection with the business combination and pursuant to the Domestication, each TVA III Warrant that is issued and outstanding will be converted into a TVA III Delaware Warrant to acquire a corresponding number of shares of TVA III Class A Common Stock, on a one-for-one basis, pursuant to the terms of the warrant agreement and each of the then issued and outstanding TVA III Public Units will be cancelled and each holder of TVA III Public Units will be entitled to one share of TVA III Class A Common Stock and one-half of one TVA III Delaware Warrant. No fractional TVA III Delaware Warrants will be issued upon cancellation. Upon the Closing, the TVA III Delaware Warrants will be assumed by the Post-Closing Company and will become Post-Closing Company warrants.
An estimated number of shares of TVA III Class A Common Stock will be reserved for potential future issuance of TVA III Class A Common Stock upon the exercise of the TVA III Delaware Warrants.
As of June 30, 2026, there were 18,818,750 TVA III Warrants outstanding, which consists of 11,250,000 TVA III Public Warrants and 7,568,750 TVA III Private Placement Warrants.
Public Warrants
After the Domestication and the Merger, each whole TVA III Public Warrant entitles the registered holder to purchase one share of Post-Closing Company Class A common stock at a price of $11.50 per share, subject to adjustment as discussed herein, at any time commencing 30 days after the completion of the business combination, provided that we have an effective registration statement under the Securities Act covering the Post-Closing Company Class A common stock issuable upon exercise of the TVA III Public Warrants and a current prospectus relating to them is available (or we permit holders to exercise their TVA III Public Warrants on a “cashless basis” under the circumstances specified in the warrant agreement) and such shares are registered, qualified or exempt from registration under the securities, or blue sky, laws of the state of residence of the holder. Pursuant to the warrant agreement, a warrantholder may exercise its TVA III Public Warrants only for a whole number of Post-Closing Company Class A common stock. This means that only a whole TVA III Public Warrant may be exercised at any given time by a warrantholder. No fractional warrants will be issued upon separation of the TVA III Public Units and only whole TVA III Public Warrants will trade. Accordingly, unless you purchased at least two TVA III Public Units, you will not be able to receive or trade a whole TVA III Public Warrant. The TVA III Public Warrants will expire five years after the completion of the business combination, at 5:00 p.m., New York City time, or earlier upon redemption or liquidation.
We will not be obligated to deliver any Post-Closing Company Class A common stock pursuant to the exercise of a TVA III Public Warrant and will have no obligation to settle such warrant exercise unless a registration statement under the Securities Act with respect to the Post-Closing Company Class A common stock underlying the TVA III Public Warrants is then effective and a prospectus relating thereto is current, subject to our satisfying our obligations described below with respect to registration. No TVA III Public Warrant will be exercisable and we will not be obligated to issue Post-Closing Company Class A common stock upon exercise of a TVA III Public Warrant unless the Post-Closing Company Class A common stock issuable upon such warrant exercise has been registered, qualified or deemed to be exempt under the
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securities laws of the state of residence of the registered holder of the TVA III Public Warrants. In the event that the conditions in the two immediately preceding sentences are not satisfied with respect to a TVA III Public Warrant, the holder of such TVA III Public Warrant will not be entitled to exercise such TVA III Public Warrant and such TVA III Public Warrant may have no value and expire without value to the holder. In no event will we be required to net cash settle any TVA III Public Warrant.
We have agreed that as soon as practicable, but in no event later than 15 business days, after the closing of the business combination, we will use our commercially reasonable efforts to file with the SEC a post-effective amendment to the registration statement, the issuance of the Post-Closing Company Class A common stock issuable upon exercise of the TVA III Public Warrants. We will use our commercially reasonable efforts to cause the same to become effective and to maintain the effectiveness of such registration statement, and a current prospectus relating thereto, until the expiration or redemption of the TVA III Public Warrants in accordance with the provisions of the warrant agreement. Notwithstanding the above, if our shares of Post-Closing Company Class A common stock are at the time of any exercise of a TVA III Public Warrant not listed on a national securities exchange such that it satisfies the definition of a “covered security” under Section 18(b)(1) of the Securities Act, we may, at our option, require holders of TVA III Public Warrants who exercise their TVA III Public Warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event we so elect, we will not be required to file or maintain in effect a registration statement, but we will be required to use our commercially reasonable efforts to register or qualify the issuance of shares under applicable blue sky laws to the extent an exemption is not available. To exercise TVA III Public Warrants on a cashless basis, each holder would pay the exercise price by surrendering the warrants in exchange for a number of shares of Post-Closing Company Class A common stock equal to the quotient obtained by dividing (1) the product of (a) the number of Post-Closing Company Class A common stock underlying the TVA III Public Warrants, and (b) the excess of the “fair market value” (defined below) over the exercise price of the warrants by (2) such fair market value. Solely for the purposes of the preceding sentence, “fair market value” shall mean the 10-day average trading price as of the date on which the notice of exercise is received by the warrant agent.
Redemption of warrants for cash when the price per share of Post-Closing Company Class A common stock equals or exceeds $18.00.
Beginning 30 days after completion of the business combination, we may redeem the outstanding TVA III Warrants for cash:
If and when the TVA III Warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws.
We have established the last of the redemption criterion discussed above to prevent a redemption call unless there is at the time of the call a significant premium to the warrant exercise price. If the foregoing conditions are satisfied and we issue a notice of redemption of the TVA III Warrants, each warrantholder will be entitled to exercise its warrant prior to the scheduled redemption date. However, the price of the Post-Closing Company Class A common stock may fall below the $18.00 redemption trigger price (as adjusted
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for share subdivisions, share dividends, reorganizations, recapitalizations and the like) as well as the $11.50 (for whole shares) warrant exercise price after the redemption notice is issued.
Redemption Procedures
A holder of a TVA III Warrant may notify us in writing in the event it elects to be subject to a requirement that such holder will not have the right to exercise such TVA III Warrant, to the extent that after giving effect to such exercise, such person (together with such person’s affiliates), to the warrant agent’s actual knowledge, would beneficially own in excess of 9.8% (or such other amount as a holder may specify) of the Post-Closing Company Class A common stock outstanding immediately after giving effect to such exercise.
Anti-Dilution Adjustments
If the number of outstanding shares of Post-Closing Company Class A common stock is increased by a share dividend payable in Post-Closing Company Class A common stock, or by a subdivision of Post-Closing Company Class A common stock or other similar event, then, on the effective date of such share dividend, subdivision or similar event, the number of shares of Post-Closing Company Class A common stock issuable on exercise of each TVA III Public Warrant will be increased in proportion to such increase in the outstanding shares of Post-Closing Company Class A common stock. A rights offering to holders of Post-Closing Company Class A common stock entitling holders to purchase shares of Post-Closing Company Class A common stock at a price less than the fair market value will be deemed a share dividend of a number of Post-Closing Company Class A common stock equal to the product of (1) the number of shares of Post-Closing Company Class A common stock 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 Post-Closing Company Class A common stock) multiplied by (2) one minus the quotient of (a) the price per Post-Closing Company Class A common stock paid in such rights offering divided by (b) the fair market value. For these purposes (1) if the rights offering is for securities convertible into or exercisable for Post-Closing Company Class A common stock, in determining the price payable for Post-Closing Company Class A common stock, there will be taken into account any consideration received for such rights, as well as any additional amount payable upon exercise or conversion, (2) 10-day average closing price means, as of any date, the average last reported sale price of the Post-Closing Company Class A common stock as reported during the 10 trading day period ending on the trading day prior to such date and (3) fair market value means the ten-day average closing price the first date on which the Post-Closing Company Class A common stock trade on the applicable exchange or in the applicable market, regular way, without the right to receive such rights.
In addition, if we, at any time while the TVA III Public Warrants are outstanding and unexpired, pay a dividend or make a distribution in cash, securities or other assets to the holders of Post-Closing Company Class A common stock on account of such shares of Post-Closing Company Class A common stock (or other shares into which the warrants are convertible), other than (1) as described shares in connection with a proposed initial business combination, or (2) in connection with the redemption of our TVA III Ordinary Shares upon our failure to complete the business combination, then the warrant exercise price will be decreased, effective immediately after the effective date of such event, by the amount of cash and/or the fair market value of any securities or other assets paid on each share of Post-Closing Company Class A common stock in respect of such event.
If the number of outstanding shares of Post-Closing Company Class A common stock is decreased by a consolidation, combination, or reclassification of Post-Closing Company Class A common stock or other similar event, then, on the effective date of such consolidation, combination, reclassification or similar event, the number of Post-Closing Company Class A common stock issuable on exercise of each warrant will be decreased in proportion to such decrease in outstanding shares of Post-Closing Company Class A common stock.
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Whenever the number of shares of Post-Closing Company Class A common stock purchasable upon the exercise of the TVA III Public Warrants is adjusted, as described above, the warrant exercise price will be adjusted by multiplying the warrant exercise price immediately prior to such adjustment by a fraction (1) the numerator of which will be the number of shares of Post-Closing Company Class A common stock purchasable upon the exercise of the TVA III Public Warrants immediately prior to such adjustment, and (2) the denominator of which will be the number of shares of Post-Closing Company Class A common stock so purchasable immediately thereafter. The warrant agreement provides that no adjustment to the number of the shares of Post-Closing Company Class A common stock issuable upon exercise of a TVA III Public Warrant will be required until cumulative adjustments amount to 1% or more of the number of shares of Post-Closing Company Class A common stock issuable upon exercise of a TVA III Public Warrant as last adjusted. Any such adjustments that are not made will be carried forward and taken into account in any subsequent adjustment. All such carried forward adjustments will be made (1) in connection with any subsequent adjustment that (taken together with such carried forward adjustments) would result in a change of at least 1% in the number of shares of Post-Closing Company Class A common stock issuable upon exercise of a TVA III Public Warrant and (2) on the exercise date of any TVA III Public Warrant.
In case of any reclassification or reorganization of the outstanding shares of Post-Closing Company Class A common stock (other than those described above or that solely affects the par value of such Post-Closing Company Class A common stock), or in the case of any merger or consolidation of us with or into another entity in which any “person” or “group” (as such terms are used in Section 13(d) and 14(d) of the Exchange Act) acquires more than 50% of the voting power of the securities, or in the case of any sale or conveyance to another corporation or entity of the assets or other property of us as an entirety or substantially as an entirety, the holders of the TVA III Public Warrants will thereafter have the right to purchase and receive, upon the basis and upon the terms and conditions specified in the warrants and in lieu of our Post-Closing Company Class A common stock immediately theretofore purchasable and receivable upon the exercise of the rights represented thereby, the kind and amount of shares or other securities or property (including cash) receivable upon such reclassification, reorganization, merger or consolidation, or any such sale or transfer, that the holder of the TVA III Public Warrants would have received if such holder had exercised their warrants immediately prior to such event. If less than 70% of the consideration receivable by the holders of Post-Closing Company Class A common stock in such a transaction is payable in the form of shares in the successor entity that is listed for trading on a national securities exchange or is quoted immediately following such event, and if the registered holder of the warrant properly exercises the warrant within thirty days following public disclosure of such transaction, the warrant exercise price will be reduced as specified in the warrant agreement based on the Black-Scholes warrant value (as defined in the warrant agreement) of the warrant. The purpose of such exercise price reduction is to provide additional value to holders of the warrants when an extraordinary transaction occurs during the exercise period of the warrants pursuant to which the holders of the warrants otherwise do not receive the full potential value of the warrants. The warrant exercise price will not be adjusted for other events.
The TVA III Public Warrants have been issued in registered form under a warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and us. You should review a copy of the warrant agreement, which is filed as an exhibit to this proxy statement/prospectus, for a complete description of the terms and conditions applicable to the TVA III Public Warrants. The warrant agreement provides that the terms of the TVA III Public Warrants may be amended without the consent of any holder to cure any ambiguity or correct any mistake, including to conform the provisions of the warrant agreement to the description of the terms of the TVA III Public Warrants and the warrant agreement set forth in this proxy statement/prospectus, but requires the approval by the holders of at least 50% of the then outstanding TVA III Public Warrants to make generally any change that adversely affects the interests of the registered holders of TVA III Public Warrants. The TVA III Public Warrants may be exercised upon surrender of the TVA III Public Warrant certificate on or prior to the expiration date at the offices of the warrant agent, with the exercise form on the reverse side of the warrant certificate completed and executed as indicated, accompanied by full payment of the exercise price (or on a “cashless basis,” if applicable), by certified or official bank check payable to us, for the number of TVA III Public Warrants being exercised. The warrantholders do not have the rights or privileges of holders of shares of Post-Closing Company Class A common stock or any voting rights until they exercise their TVA III Public Warrants and receive shares of Post-Closing Company Class A common stock. After the issuance of shares of Post-Closing Company Class A common stock upon
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exercise of the TVA III Public Warrants, each holder will be entitled to one vote for each share held of record on all matters to be voted on by shareholders.
We have agreed that, subject to applicable law, any action, proceeding or claim against us arising out of or relating in any way to the warrant agreement will be brought and enforced in the courts of the State of New York located in the County of New York or the United States District Court for the Southern District of New York, and we irrevocably submit to such jurisdiction, which jurisdiction will be the exclusive forum for any such action, proceeding or claim. See “Risk Factors — Risks Related to TVA III, the Domestication and the Business Combination — The TVA III warrant agreement designates the courts of the State of New York or the United States District Court for the Southern District of New York as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by holders of TVA III warrants, which could limit the ability of warrantholders to obtain a favorable judicial forum for disputes with TVA III.” This provision applies to claims under the Securities Act but does not apply to claims under the Exchange Act or any claim for which the federal district courts of the United States of America are the sole and exclusive forum. No fractional shares will be issued upon exercise of the warrants. If, upon exercise of the warrants, a holder would be entitled to receive a fractional interest in a share, we will, upon exercise, round down to the nearest whole number of Post-Closing Company Class A common stock to be issued to the warrantholder.
Private Placement Warrants
The TVA III Private Placement Warrants may be exercised on a “cashless basis” in certain circumstances similar to those for the TVA III Public Warrants. The TVA III Private Placement Warrants will not expire except upon liquidation and as described in the next sentence. Otherwise, the TVA III Private Placement Warrants have terms and provisions that are identical to those of the TVA III Public Warrants, including as to exercise price, exercisability and exercise period, except that, so long as they are held by the Sponsor, CCM, Clear Street, or their permitted transferees, the Private Placement Warrants (i) may not (including the shares of Post-Closing Company Class A common stock issuable upon exercise of these warrants), subject to certain limited exceptions, be transferred, assigned or sold by the holders until 30 days after the completion of our initial business combination, (ii) will be entitled to registration rights and (iii) with respect to the TVA III Private Placement Warrants held by CCM, Clear Street, and/or their designees, will not be exercisable more than five years from the commencement of sales in the TVA III IPO in accordance with FINRA Rule 5110(g)(8).
Neither the TVA III Private Placement Warrants nor the TVA III Public Warrants contain any provisions that are dependent upon the characteristics of the holder of the warrant.
Following the New Sponsor’s acquisition of the Sponsor Private Placement Warrants, including the NMSI Private Placement Warrants, the sponsor membership interests representing a majority of the NMSI Private Placement Warrants were held by members of the New Sponsor, which do not include the non-managing sponsor investors of the Prior Sponsor. On December 31, 2025, TVA III and Continental Stock Transfer & Trust Company, as warrant agent, entered into Amendment No. 1 to the warrant agreement (the “Warrant Amendment”). The Warrant Amendment deleted in its entirety the provision in the warrant agreement which (i) prohibited the holder from redeeming such NMSI Private Placement Warrants and (ii) permitted the holder to (a) exercise such NMSI Private Placement Warrants on a cashless basis, and (b) for a period beginning on the one year anniversary of the closing of Business Combination and ending on the expiration date of the NMSI Private Placement Warrants, exchange any of its NMSI Private Placement Warrants for a number of Class A Shares based, subject to the terms of the Warrant Agreement. As a result, the NMSI Private Placement Warrants are now exercisable on the same terms as the other Private Placement Warrants, including at an exercise price of $11.50 per Class A Ordinary Share. The New Sponsor, CCM and holders of sponsor membership interests representing a majority of the Private Placement Warrants each consented to the Warrant Amendment.
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Registration Rights
Effective upon the Closing, the Existing Registration Rights Agreement by and between TVA III, the Sponsor, CCM, and Clear Street as the Existing Holders, has been amended and restated in its entirety as the A&R Registration Rights Agreement, with the Sponsor Affiliate and certain persons and entities receiving Post-Closing Company common stock in connection with the Mergers being added as parties to the A&R Registration Rights Agreement, a copy of which is filed as Exhibit E to the Merger Agreement attached as Annex A to this proxy statement/prospectus, and all parties to the A&R Registration Rights Agreement being referred to as the Holders. The following summary of material provisions of the A&R Registration Rights Agreement is qualified by reference to the complete text of the A&R Registration Rights Agreement. All shareholders are encouraged to read the A&R Registration Rights Agreement in its entirety for a more complete description of its terms and conditions.
Pursuant to the A&R Registration Rights Agreement, TVA III will use commercially reasonable efforts to (1) file with the SEC, at TVA III’s sole cost and expense, a registration statement registering the resale of certain securities held by or issuable to the Holders within 10 business days after the Closing (the “Resale Registration Statement”) and (2) cause the Resale Registration Statement to become effective as soon as reasonably practicable after the filing thereof, but in no event later than 45 business days after the Closing Date. In certain circumstances, the Holders may demand in the aggregate up to three underwritten offerings and will be entitled to customary piggyback registration rights.
Pursuant to the A&R Registration Rights Agreement, subject to certain exceptions, the Holders have agreed not to transfer their respective shares for a period of 360 days following the Closing Date (the “Lock-Up Period”). Subject to certain exceptions to the termination of transfer restrictions with respect to shares of Post-Closing Company common stock issued as Earnout Shares (the “Lock-Up Earnout Shares”) or held directly or indirectly by certain founder executives of PlusAI (the “Plus Founder Shares”), such transfer restrictions terminate (a) as to 50% of a Holder’s shares upon the earlier of 180 days after the Closing (the “Reduced Lock-Up Period”) and the date on which the VWAP of the Post-Closing Company Class A common stock equals or exceeds $12.50 per share during any 20 trading days within any 180 consecutive trading day period following the Closing, and (b) other than Lock-Up Earnout Shares and Plus Founder Shares, with respect to all of a Holder’s shares upon the date on which the VWAP of the Post-Closing Company Class A common stock equals or exceeds $15.00 per share during any 20 trading days within any 180 consecutive trading day period following the Closing. Furthermore, the Sponsor is not subject to certain other transfer restrictions as described in the A&R Registration Rights Agreement, and, with respect to all shares of Post-Closing Company Class A common stock into which the TVA III Class B Ordinary Shares convert upon the Domestication, the transfer restrictions will terminate 120 days after the Closing.
Convertible Notes and PIPE Warrants
Concurrently with the execution and delivery of the Merger Agreement, TVA III and PlusAI entered into subscription agreements (the “Convertible Note and Warrant Subscription Agreements”) with certain accredited investors and qualified institutional buyers, including the Sponsor Affiliate (collectively, the “Note Investors”), pursuant to which TVA III agreed to issue and sell, in a private placement to close following the Domestication and substantially concurrently with the Closing, (i) Senior Convertible PIK Notes (the “Convertible Notes”) in an aggregate original principal amount of $63,888,888, issued at a 10% original issue discount resulting in net cash proceeds of $57,500,000, and (ii) warrants to purchase shares of Post-Closing Company Class A common stock (the “PIPE Warrants”) covering an aggregate of 5,324,074 shares, with the number of shares issuable upon exercise equal to 100% of the original principal amount of the applicable Convertible Note divided by $12.00. The Convertible Notes will be senior unsecured obligations of the Post-Closing Company, guaranteed by PlusAI and its subsidiaries (the “Guarantors”) pursuant to a Global Guaranty Agreement (the “Guaranty”). The Sponsor Affiliate has subscribed for approximately $27,777,778 in original principal amount of Convertible Notes at a 10% original issue discount resulting in net cash proceeds of $25,000,000, and a warrant to purchase 2,314,815 shares of Post-Closing Company Class A common stock.
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The Convertible Note and Warrant Subscription Agreements contain customary covenants and closing conditions, including approval for listing of the shares underlying the Convertible Notes and PIPE Warrants, Available Closing SPAC Cash of at least $40,000,000 unless waived by TVA III and PlusAI (provided that failure to meet that condition does not excuse an investor’s funding obligation), and the absence of any amendment, modification or waiver of the Merger Agreement reasonably expected to materially and adversely affect a Note Investor’s expected economic benefits without that Note Investor’s consent. They also contain a standstill provision that, subject to certain exempt issuances, applies until six months after the effective date of the Resale Registration Statement. The Available Closing SPAC Cash closing condition is also subject to the Minimum Proceeds Side Letter.
The Convertible Notes will bear interest at the Post-Closing Company’s election by written notice delivered at least five business days before the applicable interest payment date as entirely cash interest at 8.00% per annum, entirely as “PIK” interest that is to be capitalized and added to the outstanding principal amount at 10.00% per annum, or a combination of cash and PIK interest. Cash interest is payable monthly in arrears. If the Post-Closing Company does not timely make an election, interest for that period will be entirely PIK interest. The applicable rates increase by 2.00% per annum during an event of default, and each applicable rate increases by 1.00% per annum if the Post-Closing Company fails to maintain unrestricted cash and cash equivalents of at least $10,000,000 as of the last business day of a calendar month. The Convertible Notes will mature on the fifth anniversary of the Closing Date (the “Maturity Date“).
At any time on or after the issuance of the Convertible Notes and before the close of business on the business day immediately preceding the Maturity Date, each holder may convert all or any portion of a Convertible Note, together with accrued and unpaid cash interest, into shares of Post-Closing Company Class A common stock (with partial conversions generally subject to a minimum principal amount of $100,000) at a conversion price equal to 95% of the lowest daily VWAP during the five consecutive trading days preceding conversion, subject to a $5.00 per-share floor. If a holder converts before the third anniversary of the Closing Date, such holder will receive from the Post-Closing Company an interest make-whole amount equal to the present value, discounted at the then-applicable U.S. Treasury rate plus 50 basis points, of the remaining scheduled cash interest payments that would have been payable at 8.00% per annum through the third anniversary, payable in cash or, at Post-Closing Company’s election and subject to the Convertible Note, shares of Post-Closing Company Class A common stock. Upon a Make-Whole Fundamental Change, a holder converting during the specified period will be entitled to an increased conversion rate based on a conversion price equal to 95% of the lowest of the transaction price and the lowest daily VWAPs during the applicable five-trading-day periods before the effective date and announcement of the Make-Whole Fundamental Change, subject to the conversion price floor. The conversion price and conversion price floor are also subject to anti-dilution adjustments, including a full-ratchet reduction of the floor for certain qualifying issuances below the then-current floor. If the issuance of shares upon conversion would exceed applicable exchange-cap limitations before required stockholder approval, the Post-Closing Company shall either pay the entire amount in cash or deliver to the holder shares up to the permitted amount with the balance paid in cash, at the holder's election.
Following effectiveness of the Resale Registration Statement, the Post-Closing Company may redeem the Convertible Notes at 130% of accrued value, as of the date of determination, calculated as the sum of (i) the outstanding principal amount of the Convertible Notes, plus (ii) all accrued and unpaid cash interest as of such date, plus (iii) all other amounts then due and payable under the Convertible Notes (the “Accrued Value”) before the second anniversary of the Closing Date and 120% of Accrued Value thereafter, subject to the terms of the Convertible Notes. Holders may require repurchase of all or any portion of a Convertible Note for cash at 130% of Accrued Value before the second anniversary of the closing of the Convertible Notes and 120% of Accrued Value on or after the second anniversary, including on or after maturity, upon a Fundamental Change (as such term is defined in the Convertible Notes) and may put the Convertible Notes for cash at 100% of its Accrued Value during the period beginning 30 calendar days before the Maturity Date and ending on the fifth business day before the Maturity Date. Unless previously converted, redeemed or repurchased, any portion not so put will automatically be settled at maturity in shares of Post-Closing Company Class A common stock at a maturity conversion price equal to the conversion price then in effect, subject to applicable stockholder approval and exchange-cap limitations, with cash payable for any portion that cannot be settled in shares. The Convertible Notes are direct, senior unsecured obligations, ranking senior
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in right of payment to subordinated and other unsecured indebtedness except as permitted by the Convertible Note; in a liquidation, the holder is entitled to receive the Accrued Value before distributions on subordinated debt or equity. The Convertible Notes contain affirmative and negative covenants and events of default relating to payment, conversion or settlement, covenants, representations, cross-defaults, bankruptcy, judgments, delisting, share reservations, minimum liquidity and guaranty defaults.
Each PIPE Warrant will be exercisable immediately upon issuance at an initial exercise price of $12.00 per share and will expire five years after issuance. The PIPE Warrants may be exercised for cash or, if available, on a net-issuance basis and will be automatically exercised on a net-issuance basis at expiration. The exercise price will reset every nine months, if lower, to the greater of the applicable lowest daily VWAP during the preceding five trading days and the $5.00 per-share floor, with a corresponding adjustment to the number of underlying shares.
Under the Guaranty, PlusAI and each of its subsidiaries will jointly and severally guarantee the full and unconditional payment and performance of the Convertible Notes. Any entity that becomes a subsidiary after issuance must join the Guaranty within 15 business days. The Convertible Notes and guaranty obligations will not be secured by any lien or security interest in the assets of PlusAI or any Guarantor.
Anti-Takeover Effects of Certain Provisions of Delaware Law, the Proposed Certificate of Incorporation and the Proposed Bylaws
Certain provisions of Delaware law, the Proposed Certificate of Incorporation and the Proposed Bylaws, each of which is summarized below, may have the effect of delaying, deferring or discouraging another person from acquiring control of the Post-Closing Company. The provisions are also designed, in part, to encourage persons seeking to acquire control of us to negotiate first with the Post-Closing Company Board. We believe that the benefits of increased protection of the Post-Closing Company’s potential ability to negotiate with an unfriendly or unsolicited acquirer outweigh the disadvantages of discouraging a proposal to acquire the Post-Closing Company because negotiation of these proposals could result in an improvement of their terms.
Delaware Law
The Post-Closing Company will be governed by the provisions of Section 203 of the DGCL, which generally prohibits a publicly held Delaware corporation from engaging in a “business combination” with any “interested stockholder” for a period of three years after the date such person became an interested stockholder, unless:
Section 203 defines a business combination to include:
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These provisions may have the effect of delaying, deferring or preventing changes in control of the Post-Closing Company.
Proposed Certificate of Incorporation and Proposed Bylaws Provisions
The Proposed Certificate of Incorporation and Proposed Bylaws will include a number of provisions that could deter hostile takeovers or delay or prevent changes in control of the Post-Closing Company Board or the Post-Closing Company’s management. Among other things, the Proposed Certificate of Incorporation and Proposed Bylaws will:
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Exclusive Forum
The Proposed Bylaws will provide that, unless the Post-Closing Company consents in writing to the selection of an alternative forum, the sole and exclusive forum for (1) any derivative action or proceeding brought on the Post-Closing Company’s behalf, (2) any action asserting a claim of breach of a fiduciary duty owed by any of the Post-Closing Company’s directors, stockholders, officers or other employees to the Post-Closing Company or its stockholders, (3) any action arising pursuant to any provision of the DGCL or the Proposed Certificate of Incorporation and Proposed Bylaws or (4) any other action asserting a claim that is governed by the internal affairs doctrine shall be the Court of Chancery of the State of Delaware (or, if the Court of Chancery does not have jurisdiction, another State court in Delaware or the federal district court for the District of Delaware), except for, as to each of (1) through (4) above, any claim as to which such court determines that there is an indispensable party not subject to the jurisdiction of such court (and the indispensable party does not consent to the personal jurisdiction of such court within 10 days following such determination), which is vested in the exclusive jurisdiction of a court or forum other than such court or for which such court does not have subject matter jurisdiction. This provision would not apply to any action brought to enforce a duty or liability created by the Exchange Act and the rules and regulations thereunder. The Proposed Bylaws will also provide that, unless the Post-Closing Company consents in writing to the selection of an alternative forum, the federal district courts of the United States will be the sole and exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act. Any person or entity purchasing or otherwise acquiring or holding or owning (or continuing to hold or own) any interest in any of the Post-Closing Company’s securities shall be deemed to have notice of and consented to the foregoing bylaw provisions. the Post-Closing Company stockholders will not be deemed to have waived our compliance with the federal securities laws and the rules and regulations thereunder as a result of the Post-Closing Company’s exclusive forum provisions.
Transfer Agent and Registrar
The transfer agent and registrar for the Post-Closing Company common stock will be Continental Stock Transfer & Trust Company. The transfer agent and registrar’s address is One State Street 30th Floor, New York, New York 10004.
Listing
Pursuant to the terms of the Merger Agreement, TVA III is required to cause the Post-Closing Company Class A common stock to be approved for listing on the Nasdaq. There can be no assurance that such listing
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condition will be met. If the listing condition is not met, the business combination will not be consummated unless the listing condition is waived by the parties to the Merger Agreement. Following the Closing, Post-Closing Company Class A common stock and Post-Closing Company assumed warrants will be listed, subject to the Nasdaq’s approval, under the proposed symbol “PXAI” and “PXAIW,” respectively. We may not have received confirmation from the Nasdaq of approval of the listing of the Post-Closing Company Class A common stock and Post-Closing Company assumed warrants at the time of the extraordinary general meeting or prior to the Closing. It is possible that the listing condition to the Closing may be waived by the parties to the Merger Agreement. As a result, you may be asked to vote to approve the business combination and the other proposals included in this proxy statement/prospectus without such confirmation. Further, it is possible that such confirmation may never be received and the business combination could still be consummated if such condition is waived. In such event, the Post-Closing Company securities may not be listed on any stock exchange.
TVA III Shares Prior to the Business Combination
TVA III Ordinary Shares
TVA III is providing TVA III Public Shareholders with the opportunity to redeem all or a portion of their TVA III public shares upon the consummation of the business combination at a per share price, payable in cash, equal to the aggregate amount on deposit in the trust account as of two business days prior to the consummation of the business combination, including interest (net of taxes payable), divided by the number of then outstanding TVA III public shares. Such redemption rights are not available to our Sponsor, officers or directors and pursuant to the terms of the Sponsor Support Agreement, the Sponsor and the Insiders have each agreed to waive any redemption rights with respect to any TVA III Ordinary Shares they own in connection with the consummation of the business combination. See the section entitled “Extraordinary General Meeting of TVA III — Redemption Rights.” Additionally, pursuant to the terms of the Sponsor Agreement, the Sponsor and the Insiders have also agreed to waive any adjustment to the initial conversion ratio in connection with the business combination. See the section entitled “— TVA III Founder Shares.”
The approval of the business combination proposal requires an ordinary resolution, being the affirmative vote of a simple majority of the votes cast by holders of outstanding TVA III Ordinary Shares represented at the extraordinary general meeting by attendance via the virtual meeting website, in person or by proxy and entitled to vote at the extraordinary general meeting, voting together as a single class.
Pursuant to the terms of the Sponsor Support Agreement, the Sponsor and the Insiders have each agreed to vote their, and to cause the Sponsor Affiliate to vote its, TVA III Ordinary Shares, including TVA III Class B Ordinary Shares and any TVA III public shares held by them as of the TVA III Record Date, in favor of the business combination proposals and the other proposals described in this proxy statement/prospectus. As of the date of this proxy statement/prospectus, the Sponsor and the Insiders do not currently hold any TVA III public shares, but the Sponsor Affiliate holds 1,050,000 TVA III public shares. TVA III public shareholders may elect to redeem their TVA III public shares whether they vote “for” or “against” the business combination. See the section entitled “Extraordinary General Meeting of TVA III — Vote Required For Approval.”
Under the TVA III Articles, if TVA III does not complete an initial business combination within the completion window, TVA III will (1) cease all operations except for the purpose of winding up, (2) as promptly as reasonably possible but not more than 10 business days thereafter (and subject to lawfully available funds therefor), redeem the TVA III 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 (which interest shall be net of taxes payable and less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding TVA III public shares, which redemption will completely extinguish TVA III Public Shareholders’ rights as shareholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (3) as promptly as reasonably possible following such redemption, subject to the approval of TVA III’s remaining shareholders and TVA III’s Board, liquidate and dissolve, subject in each case to TVA III’s obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption
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rights or liquidating distributions with respect to TVA III Warrants, which will expire without value to the holder if we fail to complete TVA III’s initial business combination within the completion window. Pursuant to the terms of the TVA III IPO Underwriting Agreement, the underwriters have agreed to waive their rights to their deferred underwriting fees related to the TVA III IPO held in the trust account in the event TVA III does not complete an initial business combination within the completion window and, in such event, such amounts will be included with the funds held in the trust account that will be available to fund the redemption of the TVA III public shares. The proceeds deposited in the trust account could, however, become subject to the claims of TVA III’s creditors which would have higher priority than the claims of TVA III Public Shareholders. See the section entitled “Other Information Related to TVA III — Redemption of TVA III public shares and Liquidation if No Initial Business Combination.”
Pursuant to the terms of the New Insider Letter, the Sponsor and the Insiders have each agreed to waive their rights to liquidating distributions from the trust account with respect to any TVA III Founder Shares held by them if TVA III fails to complete an initial business combination within the completion window. However, they will be entitled to liquidating distributions from the trust account with respect to any TVA III public shares they hold if TVA III fails to complete an initial business combination within the completion window. The Sponsor and the Insiders, pursuant to the New Insider Letter, have also agreed that they will not propose any amendment to TVA III MAA to modify the substance or timing of TVA III’s obligation to redeem 100% of the outstanding TVA III public shares if TVA III does not complete an initial business combination within the completion window, unless TVA III provides TVA III Public Shareholders with the opportunity to redeem their TVA III public shares upon approval of any such amendment at a per share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (net of taxes payable), divided by the number of then outstanding TVA III public shares.
TVA III shareholders have no preemptive or other subscription rights. There are no sinking fund provisions applicable to TVA III shares, except for the redemption rights that may be exercised upon the consummation of an initial business combination, as described above.
TVA III Founder Shares
TVA III Founder Shares are TVA III Class B Ordinary Shares acquired by the Sponsor from the Prior Sponsor that the Sponsor will cause to be converted into TVA III Class A Ordinary Shares immediately prior to the Domestication on a one-for-one basis. Pursuant to the terms of the Sponsor Support Agreement, the Sponsor and the Insiders, which constitute the holders of the TVA III Founder Shares, have agreed to waive any adjustment to the initial conversion ratio in connection with the business combination and, as a result, the TVA III Class B Ordinary Shares will convert into TVA III Class A Ordinary Shares on a one-for-one basis upon the Domestication.
The approval of the business combination proposal requires an ordinary resolution, being the affirmative vote of a simple majority of the votes cast by holders of outstanding TVA III Ordinary Shares represented at the extraordinary general meeting by attendance via the virtual meeting website or by proxy and entitled to vote at the extraordinary general meeting, voting together as a single class. Pursuant to the terms of the Sponsor Support Agreement, the Sponsor and the Insiders have agreed to vote their, and to cause the Sponsor Affiliate to vote its, TVA III Ordinary Shares, including any TVA III public shares held by them as of the TVA III Record Date, in favor of the business combination proposals and the other proposals described in this proxy statement/prospectus.
If the business combination is consummated, the Sponsor and the Sponsor Affiliate will have agreed to the Lockup provided for in the Registration Statement to be entered into. See the section entitled “Proposal No. 1 — The Business Combination Proposal — Certain Agreements Related to the Business Combination — Amended and Restated Registration Rights Agreement.” The holders of TVA III Founder Shares are entitled to customary registration rights under the existing registration rights agreement and, if the business combination is consummated, the Registration Rights Agreement.
Pursuant to the terms of the New Insider Letter, the Sponsor and the Insiders have each agreed to waive their rights to liquidating distributions from the trust account with respect to any TVA III Founder Shares
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held by them if TVA III fails to complete an initial business combination within the completion window. Additionally, pursuant to the Sponsor Support Agreement, the Sponsor and the Insiders have agreed to vote their, and to cause the Sponsor Affiliate to vote its, TVA III Ordinary Shares in favor of the Transactions and other SPAC Stockholder Matters.
TVA III may issue Working Capital Loans in the principal amount of $1,500,000 to the Sponsor to finance transaction costs in connection with the business combination. Such Working Capital Loans would bear no interest and would be payable by TVA III on the earlier of the date on which TVA III consummates its initial business combination or the date that the winding up of TVA III is effective. The Working Capital Loans are convertible, at the Sponsor’s election, upon the consummation of the business combination, into units identical to the TVA III Public Units at a price of $10.00 per unit, rounded down to the nearest whole number. As of September 30, 2026 and December 31, 2025, TVA III had $250,000 and no borrowings, respectively, under such loans.
TVA III Preference Shares Prior to the Business Combination
The TVA III MAA and the TVA III Articles authorize 5,000,000 preference shares and provides that such shares may be issued with such designations, voting and other rights and preferences as may be determined from time to time by TVA III’s Board.
Stock Options, RSUs and Warrants
Immediately after the business combination and the assumption of the PlusAI options, RSUs and warrants pursuant to the terms of the Merger Agreement, it is anticipated that there will be outstanding Post-Closing Company options and warrants covering approximately 6,660,395 shares of Post-Closing Company Class A common stock, with a weighted-average exercise price of $0.23 per share and Post-Closing Company RSUs covering approximately 3,514,475 shares of Post-Closing Company Class A common stock.
Dividends
TVA III has not paid any cash dividends on the TVA III Ordinary Shares to date and does not intend to pay cash dividends prior to the completion of the initial business combination. The payment of cash dividends in the future will be dependent upon our revenues and earnings, if any, capital requirements and general financial condition subsequent to completion of the initial business combination. The payment of any cash dividends subsequent to the initial business combination will be within the discretion of the board of directors at such time. In addition, the TVA III Board is not currently contemplating and does not anticipate declaring any share dividends in the foreseeable future. Further, if TVA III incurs any indebtedness in connection with the initial business combination, TVA III’s ability to declare dividends may be limited by restrictive covenants TVA III may agree to in connection therewith.
Anti-takeover Effects of Delaware law and the Post-Closing Company’s Certificate of Incorporation and Post-Closing Company’s Bylaws
Certain provisions of Delaware law, the Proposed Certificate of Incorporation and the Proposed Bylaws, each of which is summarized below, may have the effect of delaying, deferring or discouraging another person from acquiring control of the Post-Closing Company. The provisions are also designed, in part, to encourage persons seeking to acquire control of us to negotiate first with the Post-Closing Company Board. We believe that the benefits of increased protection of the Post-Closing Company’s potential ability to negotiate with an unfriendly or unsolicited acquirer outweigh the disadvantages of discouraging a proposal to acquire the Post-Closing Company because negotiation of these proposals could result in an improvement of their terms.
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Delaware Law
The Post-Closing Company will be governed by the provisions of Section 203 of the DGCL, which generally prohibits a publicly held Delaware corporation from engaging in a “business combination” with any “interested stockholder” for a period of three years after the date such person became an interested stockholder, unless:
Section 203 defines a business combination to include:
These provisions may have the effect of delaying, deferring or preventing changes in control of the Post-Closing Company.
Proposed Certificate of Incorporation and Proposed Bylaws Provisions
The Proposed Certificate of Incorporation and the Proposed Bylaws will include a number of provisions that could deter hostile takeovers or delay or prevent changes in control of the Post-Closing Company Board or the Post-Closing Company’s management. Among other things, the Proposed Certificate of Incorporation and the Proposed Bylaws will:
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Exclusive Forum
The Proposed Bylaws will provide that, to the fullest extent permitted by law, unless the Post-Closing Company consents in writing to the selection of an alternative forum, the sole and exclusive forum for (1) any derivative action or proceeding brought on the Post-Closing Company’s behalf, (2) any action asserting a claim of breach of a fiduciary duty owed by any of the Post-Closing Company’s directors, stockholders, officers or other employees to the Post-Closing Company or its stockholders, (3) any action arising pursuant to any provision of the DGCL or the Proposed Certificate of Incorporation and Proposed Bylaws or (4) any other action asserting a claim that is governed by the internal affairs doctrine shall be the Court of Chancery of the State of Delaware (or, if the Court of Chancery does not have jurisdiction, another State court in
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Delaware or the federal district court for the District of Delaware), except for, as to each of (1) through (4) above, any claim as to which such court determines that there is an indispensable party not subject to the jurisdiction of such court (and the indispensable party does not consent to the personal jurisdiction of such court within 10 days following such determination). This provision would not apply to any action brought to enforce a duty or liability created by the Exchange Act and the rules and regulations thereunder. The Proposed Bylaws will also provide that, unless the Post-Closing Company consents in writing to the selection of an alternative forum, the federal district courts of the United States will be the sole and exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act. Any person or entity purchasing or otherwise acquiring or holding or owning (or continuing to hold or own) any interest in any of the Post-Closing Company’s securities shall be deemed to have notice of and consented to the foregoing bylaw provisions. the Post-Closing Company stockholders will not be deemed to have waived our compliance with the federal securities laws and the rules and regulations thereunder as a result of the Post-Closing Company’s exclusive forum provisions.
Registration Rights
Pursuant to the existing registration rights agreement among TVA III, the Sponsor, CCM, Clear Street and certain other holders of TVA III Securities, which was entered into in connection with the TVA III IPO and to which the Sponsor became a party upon the closing of the sale of securities pursuant to the terms of the Purchase Agreement, if an initial business combination is consummated, the holders of TVA III Founder Shares and TVA III Private Placement Warrants, including any warrants (as part of the TVA III Public Units issued in connection with the Working Capital Loans) that may be issued upon conversion of the Working Capital Loans) are entitled to registration rights requiring TVA III to register such shares of TVA III Ordinary Shares for resale (in the case of the TVA III Founder Shares, only after conversion to TVA III Class A Ordinary Shares).
If the business combination is consummated, the Registration Rights Agreement will become effective, which will replace the existing registration rights agreement in its entirety. For a summary of the Registration Rights Agreement, see the section entitled “Proposal No. 1 — The Business Combination Proposal — Certain Agreements Related to the Business Combination — Amended and Restated Registration Rights Agreement.”
Transfer Agent and Registrar
The transfer agent for TVA III Ordinary Shares and warrant agent for TVA III Warrants is Continental Stock Transfer & Trust Company. Following the consummation of the business combination, Continental Stock Transfer & Trust Company will remain as the transfer agent for Post-Closing Company Class A common stock. TVA III has agreed to indemnify Continental Stock Transfer & Trust Company in its roles as transfer agent and warrant agent, its agents and each of its stockholders, directors, officers and employees against all claims and losses that may arise out of acts performed or omitted for its activities in that capacity, except for any liability due to any gross negligence, willful misconduct or bad faith of the indemnified person or entity.
Exchange Listing
TVA III intends to apply to list Post-Closing Company Class A common stock on Nasdaq. In connection with the business combination, TVA III will change its name to “PlusAI Holdings, Inc.”, and upon the consummation of the business combination, TVA III expects that Post-Closing Company Class A common stock will begin trading on Nasdaq under the symbol “PXAI.”
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TVA III is incorporated under the laws of the Cayman Islands and the rights of TVA III shareholders are governed by the laws of the Cayman Islands, including the Cayman Act and the TVA III MAA and TVA III Articles. As a result of the Transactions, TVA III’s current shareholders who will hold TVA III Class A Ordinary Shares and Plus’s shareholders who receive TVA III Class A Ordinary Shares in the business combination will each become stockholders in the Post-Closing Company. The Post-Closing Company will be incorporated under the laws of the State of Delaware and the rights of Post-Closing Company stockholders will be governed by the laws of the State of Delaware, including the DGCL, the Proposed Certificate of Incorporation and the Proposed Bylaws. Thus, following the business combination and the Domestication, the rights of stockholders of the Post-Closing Company will be governed by Delaware law, including the DGCL, rather than by the laws of the Cayman Islands. Certain differences exist between the DGCL and the Companies Act that will alter certain of the rights of shareholders of TVA III and affect the powers of the Post-Closing Company Board and management.
This section describes the material differences between the rights of TVA III shareholders under the TVA III Articles and the proposed rights of the Post-Closing Company’s stockholders under the Proposed Certificate of Incorporation and the Proposed Bylaws, which are attached to this proxy statement/prospectus as Annex B and Annex C, respectively. The summary set forth below is not intended to be complete or to provide a comprehensive discussion of each company’s governing documents and is qualified in its entirety by reference to the full text of those documents, as well as the relevant provisions of the Companies Act and the DGCL.
Provision |
TVA III |
Post-Closing Company |
Authorized Capital |
The aggregate number of shares which TVA III has the authority to issue is: 500,000,000 TVA III Class A Ordinary Shares, par value $0.0001 per share, 50,000,000 TVA III Class B Ordinary Shares, par value $0.0001 per share, and 5,000,000 preference shares, par value $0.0001 per share. As of the date of this proxy statement/prospectus, no preference shares are outstanding. |
The aggregate number of shares which the Post-Closing Company has the authority to issue is, each with a par value of $0.0001, (1) shares of Post-Closing Company common stock and (2) 100,000,000 shares of Post-Closing Company preferred stock. Of the shares of Post-Closing Company common stock, 1,000,000,000 will be designated as a series of common stock denominated as Class A common stock, will be denominated as a series of common stock denominated as Class B common stock, and will be denominated as a series of common stock denominated as Class B common stock. Upon the consummation of the business combination, we expect there will be approximately 78,431,905 shares of Post-Closing Company Class A common stock (assuming no redemptions by TVA III’s public shareholders) outstanding.
Immediately following the consummation of the business |
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Provision |
TVA III |
Post-Closing Company |
|
|
combination, the Post-Closing Company is not expected to have any preferred stock outstanding. |
Voting Rights |
Only holders of TVA III Class B Ordinary Shares have the right to vote on the election and removal of directors prior to the initial business combination. Subject to certain exceptions, with respect to any other matter submitted to a vote of TVA III’s shareholders, including any vote in connection with the initial business combination, except as required by applicable law or stock exchange rule, holders of TVA III Class A Ordinary Shares and holders of TVA III Class B Ordinary Shares will vote together as a single class, with each share entitling the holder to one vote. |
The holders of Post-Closing Company common stock will possess all voting power for the election of directors and all other matters requiring stockholder action. The holders of Post-Closing Company Class A common stock will be entitled to one vote per share on matters to be voted on by the post-combination stockholders, the holders of Post-Closing Company Class B common stock will be entitled to 20 votes per share on matters to be voted on by the post-combination stockholders, and the holders of Post-Closing Company Class C common stock will be entitled to one fourth of one vote per share on matters to be voted on by the post-combination stockholders. The holders of Post-Closing Company Class A common stock, Post-Closing Company Class B common stock and Post-Closing Company Class C common stock will at all times vote together as one class on all matters submitted to a vote of the common stock (except as may be required by our amended and restated certificate of incorporation or applicable law). |
Number of Directors |
The TVA III Articles provide there shall be no less than one (1) director and the directors may from time to time fix the maximum and minimum number of directors to be appointed by resolution of the TVA III Board. For so long as the TVA III shares are traded on a designated stock exchange, the TVA III Board shall be divided into three classes, as nearly equal in number as possible and designated Class I, Class II and Class III. The TVA III Board is authorized to assign members of the board already in |
The Proposed Certificate of Incorporation provides that, subject to any rights of the holders of any series of Post-Closing Company preferred stock, the number of directors shall be one or more and shall be fixed only by a resolution of a majority of the total number of authorized directorships whether or not there exist any vacancies or other unfilled seats in previously authorized directorships of the Post-Closing Company Board (the “Post-Closing Company Whole Board”). Subject to the |
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Provision |
TVA III |
Post-Closing Company |
|
office to Class I, Class II or Class III. At each succeeding annual meeting of the shareholders of TVA III, successors to the class of directors whose term expires at that annual meeting shall be elected for a three- year term or until the election and qualification of their respective successors in office, subject to their earlier death, resignation or removal. |
special rights of the holders of any series of Post-Closing Company preferred stock to elect directors, the Post-Closing Company Board shall initially consist of eight directors and be divided into three classes, as nearly equal in number as is practicable and designated Class I, Class II and Class III. Subject to a director’s earlier death, disqualification, resignation or removal, each (1) Class I director shall serve for a term ending on the first annual meeting held after the effectiveness of the Proposed Certificate of Incorporation, (2) Class II director shall serve for a term ending on the second annual meeting held after the effectiveness of the Proposed Certificate of Incorporation, and (3) Class III director shall serve for a term ending on the third annual meeting held after the effectiveness of the Proposed Certificate of Incorporation. At each election after the end of the applicable initial term, each Class I, Class II, and Class III director shall be elected for a full term of three years. |
Election of Directors |
Prior to the closing of the initial business combination, the holders of TVA III Class B Ordinary Shares shall have the exclusive right to elect and remove any director, and the holders of TVA III Class A Ordinary Shares shall have no right to vote on the election or removal of any director (“TVA III Class B Appointment Right”). |
The Proposed Bylaws require that directors be elected by a plurality of the voting power of the shares present in person or represented by proxy at the meeting and entitled to vote generally on the election of directors. |
Quorum |
Board of Directors: The quorum necessary for the transaction of the business of the TVA III Board may be fixed by the directors, and unless so fixed, if there be two (2) or more directors the quorum shall be two (2), and if there be one director the quorum shall be one. Shareholders: A quorum consists of the holders present in |
Board of Directors: A majority of the Post-Closing Company Whole Board shall constitute a quorum. Stockholders: The holders of a majority of the voting power of the capital stock of the Post-Closing Company issued and outstanding and entitled to vote at the meeting, present in person or |
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Provision |
TVA III |
Post-Closing Company |
|
person or by proxy of the outstanding shares of the company representing at least one-third (1/3) of the paid up voting share capital of TVA III present in person or by proxy and entitled to vote at the meeting. |
represented by proxy, shall constitute a quorum. |
Manner of Acting by Board |
The TVA III Articles provide that the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the TVA III Board, except as may be otherwise specifically provided by applicable law, the TVA III Articles. In case of an equality of votes the chairman shall have a second or casting vote. |
The Proposed Bylaws provide that the act of a majority of the directors present at a meeting at which a quorum is present shall be the act of the Post-Closing Company Board, except as may be otherwise specifically provided by statute, the Proposed Certificate of Incorporation or the Proposed Bylaws.
The Proposed Bylaws provide that a majority of the Post-Closing Company Whole Board shall constitute a quorum for the transaction of business.
|
Removal of Directors |
The TVA III Articles provide that prior to the closing of the initial business combination, the holders of TVA III Class B Ordinary Shares shall have the exclusive right to elect and remove any director (“TVA III Class B Removal Right”), and the holders of TVA III Class A Ordinary Shares shall have no right to vote on the election or removal of any director. |
The Proposed Certificate of Incorporation provides that, subject to the special rights of holders of any outstanding series of Post-Closing Company preferred stock, any director or the entire Post-Closing Company Board may be removed from office at any time, but only for cause and only by the affirmative vote of the holders of at least a majority of the voting power of the issued and outstanding capital stock of the Post-Closing Company entitled to vote in the election of directors, voting together as a single class. |
Nomination of Director Candidates |
The TVA III Articles provide that prior to the closing of the initial business combination, the holders of TVA III Class B Ordinary Shares shall have the exclusive right to elect and remove any director (“TVA III Class B Removal Right”), and the holders of TVA III Class A Ordinary Shares shall have no right to vote on the election or removal of any director. |
The Proposed Bylaws provide that nomination for election to the Post-Closing Company Board at a meeting of stockholders may be made (1) pursuant to the Post-Closing Company’s notice of meeting (or any supplement thereto); (2) by or at the direction of the Post-Closing Company Board (or any committee thereof); (3) in the certificate of designations for any class or series of Post-Closing Company |
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Provision |
TVA III |
Post-Closing Company |
|
|
preferred stock; or (4) by any stockholder of the Post-Closing Company who (a) is a stockholder of record at the time of giving such notice; (b) is as stockholder of record on the record date for the determination of stockholders entitled to notice of the annual meeting; (c) is a stockholder of record on the record date for the determination of stockholders entitled to vote at the annual meeting; (d) is a stockholder of record at the time of the annual meeting; and (e) timely complies with the notice procedures set forth therein. |
Meetings of the Board |
A director may, and a secretary or assistant secretary on the requisition of a director shall, at any time summon a meeting of the directors. |
The Proposed Bylaws provide that special meetings of the Post-Closing Company Board may be called by the chairperson of the Post-Closing Company Board, the chief executive officer, the president, or the secretary or by a majority of the Post-Closing Company Whole Board. |
Meetings of Stockholders |
The TVA III Articles provide that general meetings may be called only by a majority vote of the TVA III Board, by TVA III’s chief executive officer or by TVA III’s chairman (unless there are no directors of the TVA III Board in office, in which case two Members may convene a general Meeting). |
The Proposed Certificate of Incorporation provides that special meetings of stockholders may be called at any time by a resolution adopted by the majority of the Post-Closing Company Whole Board, the chairperson of the Post-Closing Company Board, the chief executive officer, or the president, and may not be called by any other person or persons. The Post-Closing Company Board acting pursuant to a resolution adopted by the majority of the Post-Closing Company Whole Board may cancel, postpone, or reschedule any previously scheduled special meeting of stockholders at any time, before or after the notice for such meeting has been sent to the stockholders. |
Manner of Acting by Stockholders |
Except as stated in the TVA III Articles, as prescribed by the |
The Proposed Bylaws provide that, when a quorum is present at |
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Provision |
TVA III |
Post-Closing Company |
|
Companies Act or by applicable stock exchange rules, matters presented to the shareholders at a meeting at which a quorum is present shall be determined by ordinary resolution, which requires the approval of a simple majority of the votes cast by the shareholders present in person or represented by proxy at the meeting and entitled to vote thereon, unless the matter is one upon which, by applicable law (including the Companies Act), the TVA III Articles, or applicable stock exchange rules, a different vote is required, in which case such provision shall govern and control the decision of such matter. |
any meeting, in all matters other than the election of directors, the affirmative vote of the a majority of the voting power of the shares present in person or represented by proxy at the meeting and entitled to vote on the subject matter shall be the act of the stockholders (or if there are two or more classes or series of capital stock entitled to vote as separate classes or series, then in the case of each such class or series, the holders of a majority of the voting power of the shares of capital stock of the class, classes or series present in person or represented at the meeting and entitled to vote on the subject matter), except when a different vote is required by applicable law, the Proposed Certificate of Incorporation, the Proposed Bylaws, or the rules of any stock exchange applicable to the Post-Closing Company. The Proposed Certificate of Incorporation does not provide any stockholders with the ability to act pursuant to written consent. |
Stockholder Action Without Meeting |
Subject to limited exceptions, the TVA III Articles provide that actions required or permitted to be taken by its shareholders may be effected by a duly called annual general meeting or extraordinary general meeting or by a unanimous written resolution of all the TVA III shareholders who are entitled to vote on such matter. |
The Proposed Certificate of Incorporation does not provide any stockholders with the ability to act pursuant to written consent. |
Anti-Takeover Provisions |
The TVA III Articles provide for a classified board. In addition, prior to the closing of TVA III’s initial business combination, only holders of TVA III Class B Ordinary Shares have the right to appoint and remove directors. TVA III’s authorized but unissued ordinary shares and preference shares are available for future issuances generally |
The Proposed Certificate of Incorporation also provides for a classified board. The Post-Closing Company is subject to Section 203 of the DGCL. The Proposed Certificate of Incorporation authorizes the Post-Closing Company Board to |
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Provision |
TVA III |
Post-Closing Company |
|
without shareholder approval and could be utilized for a variety of corporate purposes, including future offerings to raise additional capital, acquisitions and employee benefit plans. The existence of authorized but unissued and unreserved ordinary shares and preference shares could render more difficult or discourage an attempt to obtain control of us by means of a proxy contest, tender offer, merger or otherwise. |
issue, without action by stockholders, up to 100,000,000 shares of Post-Closing Company preferred stock. The Proposed Certificate of Incorporation and the Proposed Bylaws will authorize the Post-Closing Company Board to fill vacancies on the board and newly-created directorships resulting from an increase in the authorized number of directors. In addition, the number of directors constituting the Post-Closing Company Board will be set only by resolution adopted by a majority vote of the Post-Closing Company Whole Board. For more information about the anti- takeover provisions in the Post-Closing Company’s governing documents, please see the section entitled, “Description of Securities — Anti takeover effects of Delaware law and the Post-Closing Company’s Certificate of Incorporation and Post-Closing Company’s Bylaws” |
Amendment of Certificate of Incorporation |
TVA III may at any time and from time to time by special resolution alter or amend the TVA III MAA and TVA III Articles in whole or in part. Special resolutions require (a) that such resolution be passed by a majority of not less than two-thirds of votes cast at a general meeting, other than with respect to amending the TVA III Class B Appointment Right or TVA III Class B Removal Right (except where such amendment is proposed in respect of the consummation of the initial business combination) where such majority shall be at least 90% of such shareholders entitled to vote or (b) approval in writing as described above in “Stockholder Action Without Meeting.” |
The Proposed Certificate of Incorporation requires the approval by the affirmative vote of holders of at least 66 2⁄3% of the voting power of the outstanding shares of the capital stock of the Post-Closing Company entitled to vote thereon for certain provisions of the Proposed Certificate of Incorporation, which generally relate to: • Amendments that effect the voting rights of the Post-Closing Company common stock; • Amendments that effect the classification of the Post-Closing Company Board; • Amendments that effect the provisions for removal of |
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Provision |
TVA III |
Post-Closing Company |
|
|
directors and appointment of directors to vacancies; • Amendments that effect the cumulation of votes; • Amendments that would permit stockholder action by written consent; • Amendments that alter which parties may call a special meeting of the Post-Closing Company’s stockholders; • Amendments that alter the advance notice provisions for stockholder proposals before any meeting of the stockholders; and • Amendments that alter the Post-Closing Company stockholders’ ability to amend, alter or repeal the above listed provisions by an affirmative vote of at least 66 2⁄3% in voting power of the outstanding shares of capital stock.
|
Amendment to Bylaws |
See “Amendment of Certificate of Incorporation” above. |
The Proposed Certificate of Incorporation provides that the Proposed Bylaws may be adopted, amended, altered or repealed by the affirmative vote of a majority of the Post-Closing Company Whole Board, or by the stockholders of the Post-Closing Company in accordance with the amendment provisions of the Proposed Bylaws. The Proposed Bylaws provide that amendments to certain provisions of the Proposed Bylaws, including those relating to the provisions related to the meetings of stockholders, the powers of the Post-Closing Company’s Board, the number of directors, the resignation, appointment, and removal of directors, the lock-up restrictions, the indemnification of the Post-Closing Company’s directors and officers, forum selection, and the amendment provisions, can only be adopted, amended, or repealed |
365
Table of Contents
Provision |
TVA III |
Post-Closing Company |
|
|
with the affirmative vote of 66 2/3% of the total voting power of outstanding voting securities, voting together as a single class. |
Liquidation |
The TVA III Articles provide that if TVA III shall be wound up, after satisfaction of creditors’ claims and subject to the rights attaching to TVA III’s shares: (a) if the assets available for distribution are insufficient to repay the whole of TVA III’s issued share capital, such assets shall be distributed so that, as nearly as may be, the losses shall be borne by TVA III’s shareholders in proportion to the par value of their shares; or (b) if the assets available for distribution are more than sufficient to repay the whole of TVA III’s issued share capital at the commencement of the winding up, the surplus shall be distributed amongst the shareholders in proportion to the par value of their shares (subject to a deduction from those shares in respect of which there are monies due, of all monies payable to TVA III for unpaid calls or otherwise). If TVA III shall be wound up, the liquidator may, by special resolution, divide among the shareholders in specie or kind the whole or any part of TVA III’s assets. |
The Post-Closing Company’s organizational documents do not contain a liquidation or similar provision. Under the DGCL, in the event of liquidation, after payment or provisions of the debts and other liabilities, any remaining assets shall be distributed to the stockholders of the dissolved corporation subject to obligations provided therein. |
Redemption Rights |
The TVA III Articles provide that, prior to the consummation of the initial business combination, TVA III shall provide holders of TVA III public shares, except for the Sponsor, any Founder and TVA III's directors and officers, with the opportunity to have their TVA III public shares redeemed upon: (a) the consummation of an initial business combination; and/or (b) any amendment to the TVA III Articles that would affect the substance or timing of TVA III's obligation to redeem 100% of the |
The Post-Closing Company’s organization documents do not provide any stockholders of the Post-Closing Company with redemption rights. However, the Proposed Certificate of Incorporation provides that each share of Post-Closing Company Class B common stock will be convertible into a share of Post-Closing Company Class A common stock and each share of Post-Closing Company Class C common stock will be convertible into a share of Post-Closing Company Class A |
366
Table of Contents
Provision |
TVA III |
Post-Closing Company |
|
TVA III public shares if TVA III has not consummated an initial business combination within the completion window, or any amendment is made with respect to any other provision of the TVA III Articles relating to the rights of holders of TVA III Class A Ordinary Shares or pre-initial business combination activity, pursuant to, and subject to certain limitations set forth in the TVA III Articles for cash equal to the applicable redemption price per share. In the event that TVA III does not consummate a business combination within the completion window, or such later time as the shareholders of TVA III may approve in accordance with the TVA III MAA and TVA III Articles, TVA III shall, amongst other things, as promptly as reasonably possible but not more than ten (10) business days thereafter, subject to lawfully available funds, redeem the public shares, pursuant to, and subject to certain limitations set forth in the TVA III Articles for cash equal to the applicable redemption price per share. |
common stock under certain specified circumstances. |
367
Table of Contents
BENEFICIAL OWNERSHIP OF SECURITIES
The following table sets forth information known to TVA III regarding (1) the beneficial ownership of TVA III Ordinary Shares or PlusAI common stock as of June 30, 2026 (pre-business combination), as applicable, and (2) the expected beneficial ownership following the Closing (post-business combination) of Post-Closing Company common stock (assuming the No Redemption Scenario, the 25% Redemption Scenario, the 50% Redemption Scenario, and the Maximum Redemption Scenario) by:
Beneficial ownership is determined according to the rules of the SEC, which generally provide that a person has beneficial ownership of a security if they possess sole or shared voting or investment power over that security. Unless otherwise indicated, TVA III believes that all persons named in the table below have sole voting and investment power with respect to the voting securities beneficially owned by them.
Shares subject to stock options or warrants that are currently exercisable or exercisable within 60 days of June 30, 2026 and RSUs that would vest based on time and service-based vesting conditions, assuming any applicable liquidity event condition had been achieved, within 60 days of June 30, 2026 are deemed to be outstanding and to be beneficially owned by the person holding the stock option, warrant or RSU for the purpose of computing the percentage ownership of that person. These shares have not been deemed outstanding, however, for the purpose of computing the percentage ownership of any other person, and have not been deemed to be outstanding or beneficially owned for the purpose of the calculation of percentage of votes in the table below.
The beneficial ownership of TVA III Ordinary Shares pre-business combination is based on 22,500,000 TVA III Class A Ordinary Shares and 7,500,000 TVA III Class B Ordinary Shares issued and outstanding as of June 30, 2026. The beneficial ownership of PlusAI common stock pre-business combination is based on 1,089,361,566 shares of PlusAI Class A common stock (including shares directly or indirectly issuable upon conversion of 952,548,647 shares of PlusAI preferred stock of which 666,158,173 shares of PlusAI preferred stock will convert to Class A common stock of the post-closing company and 112,343,523 shares issuable pursuant to the Share Issuance Agreements) and 328,672,100 shares of PlusAI Class B common stock issued and outstanding as of June 30, 2026.
The expected beneficial ownership of the Post-Closing Company common stock post-business combination assumes four scenarios:
368
Table of Contents
369
Table of Contents
If the actual facts are different from the foregoing assumptions, ownership figures in the combined company and the columns under post-business combination in the table that follows will be different.
|
|
After Business Combination |
|||||||||||||||||||||||||||||||
|
Before Business Combination |
No Redemption |
25% Redemption |
50% Redemption |
Maximum Redemption |
||||||||||||||||||||||||||||
|
Class A^ |
Class B^ |
|
Class A^ |
Class B^ |
Class C^ |
|
Class A^ |
Class B^ |
Class C^ |
|
Class A^ |
Class B^ |
Class C^ |
|
Class A^ |
Class B^ |
Class C^ |
|
||||||||||||||
|
Shares |
% |
Shares |
% |
Total |
Shares |
% |
Shares |
% |
Shares |
% |
Total |
Shares |
% |
Shares |
% |
Shares |
% |
Total |
Shares |
% |
Shares |
% |
Shares |
% |
Total |
Shares |
% |
Shares |
% |
Shares |
% |
Total |
Directors and Executive Officers of TVA III Before the Business Combination(1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark Angelo(2)(3)(4) |
1,050,000 |
4.7% |
7,500,000 |
100.0% |
28.5% |
14,065,753 |
16.8% |
- |
- |
- |
- |
2.4% |
14,065,753 |
18.1% |
- |
- |
- |
- |
2.5% |
14,065,753 |
19.5% |
- |
- |
- |
- |
2.5% |
14,065,753 |
22.7% |
- |
- |
- |
- |
2.6% |
Troy Rillo |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
Alan Garten |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
Scott Glabe |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
Lawrence Glick |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
All directors and executive officers of TVA III as a group (5 individuals)(2)(3)(4) |
1,050,000 |
4.7% |
7,500,000 |
100.0% |
28.5% |
14,065,753 |
16.8% |
- |
- |
- |
- |
2.4% |
14,065,753 |
18.1% |
- |
- |
- |
- |
2.5% |
14,065,753 |
19.5% |
- |
- |
- |
- |
2.5% |
14,065,753 |
22.7% |
- |
- |
- |
- |
2.6% |
Five Percent Holders of TVA III Before the Business Combination |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Yorkville Acquisition Sponsor II, LLC(2)(3) |
- |
- |
7,500,000 |
100.0% |
25.0% |
7,500,000 |
9.6% |
- |
- |
- |
- |
2.0% |
7,500,000 |
10.3% |
- |
- |
- |
- |
2.1% |
7,500,000 |
11.2% |
- |
- |
- |
- |
2.1% |
7,500,000 |
13.2% |
- |
- |
- |
- |
2.1% |
YA II PN, Ltd.(2)(3)(4) |
1,050,000 |
4.7% |
7,500,000 |
100.0% |
28.5% |
14,065,753 |
16.8% |
- |
- |
- |
- |
2.4% |
14,065,753 |
18.1% |
- |
- |
- |
- |
2.5% |
14,065,753 |
19.5% |
- |
- |
- |
- |
2.5% |
14,065,753 |
22.7% |
- |
- |
- |
- |
2.6% |
Anson Advisors Inc./Anson Funds Management LP(5) |
2,199,942 |
9.8% |
- |
- |
7.3% |
2,199,942 |
2.8% |
- |
- |
- |
- |
* |
2,199,942 |
3.0% |
- |
- |
- |
- |
* |
2,199,942 |
3.3% |
- |
- |
- |
- |
* |
2,199,942 |
3.9% |
- |
- |
- |
- |
* |
Meteora Capital, LLC(6) |
1,165,475 |
5.2% |
- |
- |
3.9% |
1,165,475 |
1.5% |
- |
- |
- |
- |
* |
1,165,475 |
1.6% |
- |
- |
- |
- |
* |
1,165,475 |
1.7% |
- |
- |
- |
- |
* |
1,165,475 |
2.0% |
- |
- |
- |
- |
* |
J. Goldman & Co LP(7) |
1,216,321 |
5.4% |
- |
- |
4.1% |
1,216,321 |
1.6% |
- |
- |
- |
- |
* |
1,216,321 |
1.7% |
- |
- |
- |
- |
* |
1,216,321 |
1.8% |
- |
- |
- |
- |
* |
1,216,321 |
2.1% |
- |
- |
- |
- |
* |
Karpus Management, Inc.(8) |
1,471,700 |
6.5% |
- |
- |
4.9% |
1,471,700 |
1.9% |
- |
- |
- |
- |
* |
1,471,700 |
2.0% |
- |
- |
- |
- |
* |
1,471,700 |
2.2% |
- |
- |
- |
- |
* |
1,471,700 |
2.6% |
- |
- |
- |
- |
* |
Magnetar Financial LLC(9) |
1,400,000 |
6.2% |
- |
- |
4.7% |
1,400,000 |
1.8% |
- |
- |
- |
- |
* |
1,400,000 |
1.9% |
- |
- |
- |
- |
* |
1,400,000 |
2.1% |
- |
- |
- |
- |
* |
1,400,000 |
2.5% |
- |
- |
- |
- |
* |
Tenor Capital Management Company, L.P.(10) |
1,396,956 |
6.2% |
- |
- |
4.7% |
1,396,956 |
1.8% |
- |
- |
- |
- |
* |
1,396,956 |
1.9% |
- |
- |
- |
- |
* |
1,396,956 |
2.1% |
- |
- |
- |
- |
* |
1,396,956 |
2.5% |
- |
- |
- |
- |
* |
Directors and Executive Officers of the Post-Closing Company After the Business Combination(1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David W. Liu(11) |
17,591,261 |
1.6% |
164,336,050 |
50.0% |
42.7% |
1,134,912 |
1.4% |
7,230,786 |
50.0% |
- |
- |
39.2% |
1,134,912 |
1.6% |
7,230,786 |
50.0% |
- |
- |
39.8% |
1,134,912 |
1.7% |
7,230,786 |
50.0% |
- |
- |
40.4% |
1,134,912 |
2.0% |
7,230,786 |
50.0% |
- |
- |
41.6% |
Hao Zheng(12) |
26,314,736 |
2.4% |
164,336,050 |
50.0% |
42.8% |
1,157,848 |
1.5% |
7,230,786 |
50.0% |
- |
- |
39.3% |
1,157,848 |
1.6% |
7,230,786 |
50.0% |
- |
- |
39.9% |
1,157,848 |
1.7% |
7,230,786 |
50.0% |
- |
- |
40.5% |
1,157,848 |
2.0% |
7,230,786 |
50.0% |
- |
- |
41.7% |
Shawn Kerrigan(13) |
12,085,059 |
1.1% |
- |
- |
* |
531,742 |
* |
- |
- |
- |
- |
* |
531,742 |
* |
- |
- |
- |
- |
* |
531,742 |
* |
- |
- |
- |
- |
* |
531,742 |
* |
- |
- |
- |
- |
* |
David C. Peterschmidt |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
Harry J. Harczak, Jr. |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
Richard Lim(14) |
105,968,761 |
9.6% |
- |
- |
1.8% |
6,090,322 |
7.7% |
- |
- |
- |
- |
1.5% |
6,090,322 |
8.3% |
- |
- |
- |
- |
1.6% |
6,090,322 |
9.0% |
- |
- |
- |
- |
1.6% |
6,090,322 |
10.6% |
- |
- |
- |
- |
1.6% |
All directors and executive officers as a group (7 individuals)(15) |
162,293,150 |
14.7% |
328,672,100 |
100.0% |
87.5% |
8,929,490 |
11.3% |
14,461,572 |
100.0% |
- |
- |
80.1% |
8,929,490 |
12.2% |
14,461,572 |
100.0% |
- |
- |
81.3% |
8,929,490 |
13.2% |
14,461,572 |
100.0% |
- |
- |
82.6% |
8,929,490 |
15.5% |
14,461,572 |
100.0% |
- |
- |
85.0% |
Five Percent Holders of PlusAI Before the Business Combination |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Full Truck Alliance Co. Ltd.(16) |
286,390,474 |
26.0% |
- |
- |
1.2% |
5,413,457 |
6.6% |
- |
- |
12,601,181 |
85.4% |
1.5% |
5,413,457 |
7.1% |
- |
- |
12,601,181 |
85.4% |
1.5% |
5,413,457 |
7.7% |
- |
- |
12,601,181 |
85.4% |
1.5% |
5,413,457 |
9.0% |
- |
- |
12,601,181 |
85.4% |
1.6% |
Entities Affiliated with GSR Ventures(14) |
105,968,761 |
9.6% |
- |
- |
1.8% |
6,090,322 |
7.7% |
- |
- |
- |
- |
1.5% |
6,090,322 |
8.3% |
- |
- |
- |
- |
1.6% |
6,090,322 |
9.0% |
- |
- |
- |
- |
1.6% |
6,090,322 |
10.6% |
- |
- |
- |
- |
1.6% |
Quantum Investment Ltd.(17) |
90,793,536 |
8.2% |
- |
- |
1.6% |
5,799,400 |
7.3% |
- |
- |
- |
- |
1.3% |
5,799,400 |
7.9% |
- |
- |
- |
- |
1.3% |
5,799,400 |
8.5% |
- |
- |
- |
- |
1.3% |
5,799,400 |
10.0% |
- |
- |
- |
- |
1.4% |
ASY Drive Limited(18) |
30,000,000 |
2.7% |
- |
- |
* |
- |
- |
- |
- |
1,320,000 |
8.9% |
* |
- |
- |
- |
- |
1,320,000 |
8.9% |
* |
- |
- |
- |
- |
1,320,000 |
8.9% |
* |
- |
- |
- |
- |
1,320,000 |
8.9% |
* |
CPE Investment Qi Limited(19) |
77,156,087 |
7.0% |
- |
- |
1.3% |
3,394,868 |
4.3% |
- |
- |
- |
- |
* |
3,394,868 |
4.7% |
- |
- |
- |
- |
* |
3,394,868 |
5.1% |
- |
- |
- |
- |
* |
3,394,868 |
6.0% |
- |
- |
- |
- |
* |
* Less than one percent.
370
Table of Contents
^ Prior to the Business Combination, refers to Class A Ordinary Shares of TVA III, Class B Ordinary Shares of TVA III, Class A Common Stock of PlusAI, or Class B Common Stock of PlusAI, as applicable. Amounts shown prior to the Business Combination for PlusAI are given on an as-converted to common stock basis. After the Business Combination, refers to Post-Closing Company Class A common stock, Post-Closing Company Class B common stock or Post-Closing Company Class C common stock, as applicable.
† Prior to the Business Combination, TVA III Class A Ordinary Shares and TVA III Class B Ordinary Shares are each entitled to one vote per share. Prior to the Business Combination, shares of PlusAI Class A common stock and PlusAI Class B common stock are entitled to one vote per share and 15 votes per share, respectively, except that shares of PlusAI LV preferred stock are entitled to 1/4 vote per share on an as-converted to PlusAI Class A common stock basis. Following the Business Combination, shares of Post-Closing Company Class A common stock, Post-Closing Company Class B common stock and Post-Closing Company Class C common stock are entitled to one vote per share, 20 votes per share and 1/4 vote per share, respectively.
371
Table of Contents
372
Table of Contents
TVA III Related Person Transactions
On September 18, 2025, the Sponsor acquired an aggregate of (a) 7,500,000 shares of TVA III Class B Ordinary Shares and (b) 4,700,000 TVA III Private Placement Warrants, for an aggregate purchase price of $7,400,000. The Sponsor is restricted from transferring, assigning or selling either the TVA III Class B Ordinary Shares or the TVA III Private Placement Warrants (including the TVA III Class A Ordinary Shares issuable upon exercise of the Private Placement Warrants) that it holds prior to the consummation of TVA III’s initial business combination, and with respect to the Private Placement Warrants, subject to certain limited exceptions, until the date that is 30 days after the closing of TVA III’s initial business combination. Furthermore, if the business combination is consummated, each of the Sponsor, Sponsor Affiliate, and any of their permitted transferees holding the shares of TVA III Class A Common Stock into which the TVA III Class B Ordinary Shares will convert following the Domestication or the TVA III Private Placement Warrants has agreed to the Lockup. See the section entitled “Proposal No. 1 — The Business Combination Proposal — Certain Agreements Related to the Business Combination — Amended and Restated Registration Rights Agreement.”
If any of TVA III’s officers or directors becomes aware of a business combination opportunity that falls within the line of business of any entity to which he or she has then current fiduciary or contractual obligations, he or she may be required to honor his or her fiduciary or contractual obligations to present such business combination opportunity to such entity. TVA III’s officers and directors currently have certain relevant fiduciary duties or contractual obligations that may take priority over their duties to us.
Prior to or in connection with the completion of the initial business combination, there may be payment by the Company to the Sponsor, officers or directors, or TVA III’s or their affiliates, of a finder’s fee, advisory fee, consulting fee or success fee for any services they render in order to effectuate the completion of the initial business combination, which, if made prior to the completion of the initial business combination, will be paid from funds held outside the trust account.
The Sponsor, executive officers and directors, or any of their respective affiliates, are reimbursed for any out-of-pocket expenses incurred in connection with activities on TVA III’s behalf such as identifying potential target businesses and performing due diligence on suitable business combinations. TVA III’s audit committee reviews on a quarterly basis all payments that were made to the Sponsor, officers, directors or TVA III’s or their affiliates. Any such payments prior to an initial business combination are made from funds held outside the trust account.
Subject to the terms of the Merger Agreement, there is no cap or ceiling on the reimbursement of out-of-pocket expenses incurred by such persons in connection with activities on TVA III’s behalf.
In addition, in order to fund working capital deficiencies or finance transaction costs in connection with an intended initial business combination, the Sponsor or an affiliate of the Sponsor or TVA III’s officers and directors or their respective affiliates may, but are not obligated to, loan TVA III funds as may be required. If TVA III completes an initial business combination, TVA III would repay such loaned amounts. In the event that the initial business combination does not close, TVA III may use a portion of the working capital held outside the trust account to repay such loaned amounts but no proceeds from the trust account would be used for such repayment. Amounts outstanding under such loans, up to $1,500,000, are convertible, at the Sponsor’s election, upon the consummation of the business combination, into units identical to the TVA III Public Units at a price of $10.00 per unit, rounded down to the nearest whole number. Prior to the completion of the initial business combination, TVA III does not expect to seek loans from parties other than the Sponsor or an affiliate of the Sponsor as TVA III does not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in the trust account. As of September 30, 2026 and December 31, 2025, TVA III had $250,000 and no borrowings, respectively, under such loans.
TVA III has agreed to indemnify the Sponsor and its members (present and former), managers and affiliates and their respective present and former officers and directors to the fullest extent permitted under applicable law from any claims made by TVA III or a third party in respect of any investment opportunities sourced by them or any liability arising with respect to their activities in connection with TVA III’s affairs, to the extent that such indemnification,
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hold harmless and exoneration obligations with respect to such matters are not expressly covered by a separate written agreement between TVA III and any such party. Such indemnity will provide that the indemnified parties cannot access the funds held in the trust account.
After the initial business combination, members of TVA III’s management team who remain with TVA III may be paid consulting, management or other fees from the combined company with any and all amounts being fully disclosed to TVA III’s shareholders, to the extent then known, in the tender offer or proxy solicitation materials (as applicable) furnished to TVA III’s shareholders. It is unlikely the amount of such compensation will be known at the time of distribution of such tender offer materials or at the time of a general meeting held to consider the initial business combination, as applicable, as it will be up to the directors of the post-combination business to determine executive and director compensation.
Sponsor Support Agreement
In connection with the execution of the Merger Agreement, the Sponsor and the Insiders entered into the Sponsor Support Agreement. For a summary of the Sponsor Support Agreement, please see the section entitled “Proposal No. 1 — The Business Combination Proposal — Certain Agreements Related to the Business Combination — Sponsor Support Agreement.”
Amended and Restated Registration Rights Agreement
Effective upon the Closing of the business combination, pursuant to the terms of the Registration Rights Agreement, the Sponsor and the Sponsor Affiliate, among others, will be entitled to, among other things, certain registration rights, including demand and piggy-back and shelf registration rights. For a summary of the Registration Rights Agreement, please see the section entitled “Proposal No. 1 — The Business Combination Proposal — Certain Agreements Related to the Business Combination — Registration Rights Agreement.”
Sponsor Affiliate Side Letter
In connection with the Convertible Notes and the PIPE Investment, certain investors, including the Sponsor Affiliate, entered into letters with TVA III and Plus AI. Pursuant to the Sponsor Affiliate Side Letter, if the Closing occurs and the Sponsor Affiliate fulfills its subscription obligations, (i) shares of Post-Closing Company Class A common stock acquired upon the conversion of the Convertible Notes or pursuant to the PIPE Subscription Agreements, the PIPE Warrants and the Shares of Post-Closing Company Class A common stock issuable upon exercise of the PIPE Warrants will not be subject to lock-up restrictions; (ii) upon the occurrence of Lockup Release Trigger Event I, up to 50% of the Sponsor Affiliate’s Lockup Shares will be released from lock-up restrictions; and (iii) the lock-up restrictions will terminate as to all shares of Post-Closing Company Class A common stock or Warrants held by the Sponsor Affiliate upon the occurrence of Lockup Release Trigger Event II. Further, TVA III shall not waive, release, amend, repeal, suspend or terminate the lock-up restrictions applicable to other holders of Lockup Shares without the prior written consent of the Sponsor Affiliate. For a more detailed description of the Sponsor Affiliate Side Letter, see the section entitled “Proposal No. 1 — The Business Combination Proposal — Certain Agreements Related to the Business Combination.”
Convertible Notes
In connection with the Convertible Notes, on September 2, 2026 the SPAC, PlusAI and the Sponsor Affiliate entered into a subscription agreement for the purchase by the Sponsor Affiliate of a Convertible Note in the principal amount of $27,777,777.78 at a 10% original issue discount resulting in net cash proceeds of $25,000,000. In accordance with the terms of the Convertible Notes, the Sponsor Affiliate will also receive PIPE Warrants to purchase 2,314,815 shares of Post-Closing Company Class A common stock. For a summary of the Convertible Notes, please see the section entitled “Proposal No. 1 — The Business Combination Proposal — Certain Agreements Related to the Business Combination — Convertible Note and Warrant Subscription Agreements.”
Forward Purchase Agreement
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On August 27, 2026, TVA III and the Sponsor Affiliate entered into the Forward Purchase Agreement, pursuant to which TVA III agreed to pay to the Sponsor Affiliate up to an amount equal to the product of 1,050,000 TVA III Class A Ordinary Shares multiplied by the applicable per-share redemption price. For a summary of the Forward Purchase Agreement, please see the section entitled “Proposal No. 1 — The Business Combination Proposal — Certain Agreements Related to the Business Combination — Forward Purchase Agreement.”
PlusAI’s Related Person Transactions
In addition to the compensation arrangements, including employment, termination of employment and change in control arrangements and indemnification arrangements, discussed, when required, in the sections entitled “Management After the Business Combination” and “Executive Compensation,” the registration rights described in the section entitled “Description of Securities — Registration Rights” and the PlusAI Voting and Support Agreements described in the section entitled “Proposal No. 1 — The Business Combination Proposal — Certain Agreements Related to the Business Combination — PlusAI Voting and Support Agreements,” the following is a description of each transaction since January 1, 2020 and each currently proposed transaction in which:
Reorganization Transactions
On July 31, 2023, PlusAI completed the Restructuring. Full Truck Alliance Co. Ltd. (“FTA”), which holds more than 5% of the outstanding capital stock of PlusAI and is expected to hold more than 5% of the outstanding capital stock of the Post-Closing Company upon the Closing, participated in multiple transactions in connection with the Restructuring. As part of the Restructuring, FTA, along with other holders of PlusAI Corp shares, exchanged certain shares of PlusAI Corp for shares of capital stock of PlusAI. In addition, FTA and other electing shareholders exchanged part of their equity interest held in PlusAI Corp for interests in Plus PRC. PlusAI Corp also repurchased certain shares of PlusAI Corp from certain existing shareholders, which did not include FTA. After two merger transactions, PlusAI became the parent company, and PlusAI Corp became a subsidiary of a Cayman Islands holding company, which is itself a subsidiary of PlusAI. All prior shares of PlusAI Corp, other than the shares cancelled or repurchased as noted above, became shares of Plus Automation as a result of the Restructuring. As of June 30, 2026, FTA held 20.0% of PlusAI’s outstanding shares (on an as-converted to common stock basis) and 1.2% of the voting power of PlusAI’s outstanding shares (voting together on an as-converted to common stock basis). FTA has agreed to receive shares of PlusAI with fractional voting power. As a result of the Restructuring, FTA does not hold a controlling interest in PlusAI.
For additional discussion of the Restructuring, please see the section titled “PlusAI’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained elsewhere in this proxy statement/prospectus.
Company Support Agreement
Concurrently with the execution of the Merger Agreement, certain stockholders of PlusAI entered into the Company Voting and Support Agreements with TVA III and PlusAI, in their capacity as such. Under the terms of the Company Voting and Support Agreements, the stockholders of PlusAI party thereto have agreed, among other things, to deliver written consents to adopt the Merger Agreement and approve the Transactions, and to vote or consent in opposition to alternative transactions and other matters that could reasonably be expected to materially delay or impair the ability of PlusAI to consummate the Transactions. Among the parties to the Company Voting and Support Agreements are: (1) Hao Zheng, a director on the PlusAI Board and holder of more than 5% of the outstanding capital stock of PlusAI, who is expected to hold more than 5% of the outstanding capital stock of the Post-Closing Company
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upon the Closing; (2) Sigma Point Investment LLC, which is affiliated with Mr. Zheng and holds more than 5% of the outstanding capital stock of PlusAI and is expected to hold more than 5% of the outstanding capital stock of the Post-Closing Company upon the Closing; (3) David Liu, a director on the PlusAI Board and the Chief Executive Officer of PlusAI and holder of more than 5% of the outstanding capital stock of PlusAI, who is expected to hold more than 5% of the outstanding capital stock of the Post-Closing Company upon the Closing; (4) Euclidean Investment LLC, which is affiliated with Mr. Liu and holds more than 5% of the outstanding capital stock of PlusAI and is expected to hold more than 5% of the outstanding capital stock of the Post-Closing Company upon the Closing; and (5) GSR Ventures, which is affiliated with Richard Lim, a director on the PlusAI Board and holds more than 5% of the outstanding capital stock of PlusAI and is expected to hold more than 5% of the outstanding capital stock of PlusAI upon the Closing. For a more detailed description of the Company Voting and Support Agreements, see the section entitled “Proposal No. 1 — The Business Combination Proposal — Certain Agreements Related to the Business Combination.”
Sale of Stake in Plus PRC
As part of the Restructuring, PlusAI Corp offered electing shareholders the ability to exchange part of their equity interest held in PlusAI Corp for interests in Plus PRC, resulting in PlusAI Corp no longer holding the controlling equity interest in Plus PRC. As a result, PlusAI Corp retained a passive, minority interest in the shares of Plus PRC on July 31, 2023.
On September 8, 2025, PlusAI agreed to sell to FTA all 476,635,210 redeemable series A-X preference shares of Plus PRC owned by PlusAI for gross proceeds of $20.0 million, of which $2.0 million is subject to tax withholding pursuant to PRC law. Such transaction closed on September 17, 2025. As a result, PlusAI no longer holds any equity interest in Plus PRC.
Convertible Notes
In connection with the Convertible Notes, on September 2, 2026 the SPAC, PlusAI and Euclidean entered into a subscription agreement for the purchase by Euclidean of a Convertible Note in the principal amount of $1,111,111.11. In accordance with the terms of the Convertible Notes, Euclidean will also receive PIPE Warrants to purchase 92,592 shares of Post-Closing Company Class A common stock. In accordance with the terms of the Convertible Notes, Euclidean will also be issued 3,566,461 shares of PlusAI Class A Common Stock immediately prior to Closing pursuant to a Shares Issuance Agreement. Mr. Liu is affiliated with Euclidean.
In connection with the Convertible Notes, on September 2, 2026 the SPAC, PlusAI and FTA entered into a subscription agreement for the purchase by FTA of a Convertible Note in the principal amount of $16,666,666,.67. In accordance with the terms of the Convertible Notes, FTA will also receive PIPE Warrants to purchase 1,388,888 shares of Post-Closing Company Class A common stock. In accordance with the terms of the Convertible Notes, FTA will also be issued 53,496,916 shares of PlusAI Class A Common Stock immediately prior to Closing pursuant to Share Issuance Agreements.
For a summary of the Convertible Notes, please see the section entitled “Proposal No. 1 — The Business Combination Proposal — Certain Agreements Related to the Business Combination — Convertible Note and Warrant Subscription Agreements.”
PIPE Investment
In connection with the PIPE Investment, on September 2, 2026 the SPAC, PlusAI and entities associated with GSR Ventures entered into subscription agreements for the purchase of 400,000 shares of Post-Closing Company Class A common stock. In accordance with the terms of the PIPE Investment, entities associated with GSR Ventures will also receive PIPE Warrants to purchase 400,000 shares of Post-Closing Company Class A common stock. Mr. Lim is affiliated with GSR Ventures. In accordance with the terms of the PIPE Investment, entities associated with GSR Ventures will also be issued an aggregate of 14,265,844 shares of PlusAI Class A Common Stock immediately prior to Closing pursuant to Share Issuance Agreements. For a summary of the PIPE Investment, please see the section
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entitled “Proposal No. 1 — The Business Combination Proposal — Certain Agreements Related to the Business Combination — PIPE Subscription Agreement.”
Investor Side Letters
In connection with the Convertible Notes and the PIPE Investment, PlusAI entered into the Investor Side Letters with each of the Note Investors and PIPE Investors. Pursuant to the Investor Side Letters, if the Closing occurs and the investor fulfills its subscription obligations, (i) shares of Post-Closing Company Class A common stock acquired upon the conversion of the Convertible Notes or pursuant to the PIPE Subscription Agreements, the PIPE Warrants and the shares of Post-Closing Company Class A common stock issuable upon exercise of the PIPE Warrants will not be subject to lock-up restrictions set forth in the Proposed Bylaws and the A&R Registration Rights Agreement (the “lock-up restrictions”); (ii) a number of Lockup Shares (as defined in the Proposed Bylaws) held by such investor equal to 3.5 multiplied by such investor’s subscription amount divided by $10.00 will be released from lock-up restrictions on the date that is 120 days after the Closing; (iii) upon the earlier of (A) 180 days following the Closing or (B) the occurrence of Lockup Release Trigger Event I, up to 50% of such investor’s Lockup Shares will be released from such lock-up restrictions (exclusive of shares previously released); and (iv) upon the earlier of (A) expiration of the Lock-Up Period or (B) the occurrence of Lockup Release Trigger Event II, the lock-up restrictions will terminate as to all shares of Post-Closing Company Class A common stock or PIPE Warrants held by such investor. In the event that the Closing fails to occur for any reason, TVA III shall reimburse such investor in cash for the full subscription amount paid, within one business day following such investor’s written request. Further, TVA III shall not waive, release, amend, repeal, suspend or terminate the lock-up restrictions applicable to other holders of Lockup Shares without the prior written consent of the PIPE Investors. For a more detailed description of the Investor Side Letters, see the section entitled “Proposal No. 1 — The Business Combination Proposal — Certain Agreements Related to the Business Combination.”
Minimum Proceeds Side Letter
In connection with the Convertible Notes and the PIPE Investment, PlusAI entered into the Minimum Proceeds Side Letter with the investor party thereto, pursuant to which, as long as the investor has performed its subscription obligations, PlusAI may not waive, amend (or consent to the waiver or amendment of) the minimum $40,000,000 Available Closing SPAC Cash condition set forth in the Merger Agreement without the prior written consent of such investor. For a more detailed description of the Minimum Proceeds Side Letter, see the section entitled “Proposal No. 1 — The Business Combination Proposal — Certain Agreements Related to the Business Combination.”
Other Transactions
From 2019 to 2021, PlusAI entered into certain loan arrangements for an aggregate amount of $1,250,000 with Shawn Kerrigan, the Chief Operating Officer of PlusAI, in connection with his purchase of an aggregate of 15,000,000 ordinary shares of PlusAI Corp, which were later exchanged for shares of Class A common stock of PlusAI pursuant to the Restructuring. On September 17, 2025 PlusAI repurchased 2,971,825 shares of Class A common stock for aggregate consideration of $1,426,476, the proceeds of which were used to repay Mr. Kerrigan's loans in full. On December 19, 2025, PlusAI repurchased an additional 984,783 shares of Class A common stock from Mr. Kerrigan for aggregate consideration of $561,326.
In addition, we may employ individuals that are affiliated with our directors, officers, or holders of more than 5% of our capital stock. We employ NingNing Song, the wife of David Liu, the Chief Executive Officer of PlusAI, a member of the PlusAI Board, and holder of more than 5% of the outstanding capital stock of PlusAI. Ms. Song’s compensation was approximately $53,396 in the year ended December 31, 2023, $130,800 in the year ended December 31, 2024, and $136,241 in the year ended December 31, 2025.
Indemnification Agreements
In connection with the Closing, the Post-Closing Company intends to enter into indemnification agreements with each of its directors and executive officers that may be broader than the specific indemnification provisions contained in the DGCL. These indemnification agreements will require the Post-Closing Company, among other things, to
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indemnify its directors and executive officers against liabilities that may arise by reason of their status or service to the fullest extent permitted by law. These indemnification agreements will also require the Post-Closing Company to advance all expenses incurred by the directors and executive officers in investigating or defending any such action, suit, or proceeding to the fullest extent permitted by law. The Proposed Bylaws will also empower the Post-Closing Company to purchase insurance on behalf of any person whom the Post-Closing Company is required or permitted to indemnify. For additional information related to the Post-Closing Company’s indemnification obligations in respect of its directors and officers, see the section entitled “Board of Directors and Management After the Business Combination—Limitation on Liability and Indemnification of Directors and Officers.” We believe that the indemnification provisions in the Proposed Certificate of Incorporation and the Proposed Bylaws, liability insurance and any indemnification agreements that may be entered into are necessary to attract and retain talented and experienced directors and officers.
Policies and Procedures for Related Person Transactions
The Post-Closing Company intends to adopt a formal, written policy regarding related person transactions, which will become effective upon the Closing. This written policy regarding related person transactions will provide that a related person transaction is a transaction, arrangement or relationship or any series of similar transactions, arrangements or relationships, in which we are a participant and in which a related person has, had or will have a direct or indirect material interest and in which the aggregate amount involved exceeds $120,000. This policy will also provide that a related person means any of the Post-Closing Company’s executive officers and directors (including director nominees), in each case at any time since the beginning of the Post-Closing Company’s last fiscal year, or holders of more than 5% of any class of our voting securities and any member of the immediate family of, or person sharing the household with, any of the foregoing persons. In connection with the business combination, the Post-Closing Company Board intends to establish the audit committee of the Post-Closing Company Board (the “Post-Closing Company Audit Committee”), which will have the primary responsibility for reviewing and approving or disapproving related person transactions. In addition to this policy, the Post-Closing Company Audit Committee charter that will be in effect in connection with the Closing will provide that the Post-Closing Company Audit Committee shall review and approve or disapprove any related person transactions.
All related person transactions described in this section occurred prior to adoption of the formal, written policy described above, and therefore these transactions were not subject to the approval and review procedures set forth in the policy.
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SECURITIES ACT RESTRICTIONS ON RESALE OF TVA III’S SECURITIES
In general, Rule 144 of the Securities Act (“Rule 144”) permits the resale of restricted securities without registration under the Securities Act if certain conditions are met. Rule 144 is not available for the resale of restricted securities initially issued by shell companies (other than business combination-related shell companies) or issuers that have been at any time previously a shell company, including us. However, Rule 144 also includes an important exception to this prohibition if the following conditions are met at the time of such resale:
We anticipate that following the consummation of the business combination, we will no longer be a shell company, and as long as the conditions set forth in the exceptions listed above are satisfied, Rule 144 will become available for the resale of our restricted securities.
If the above conditions have been met and Rule 144 is available, a person that has beneficially owned restricted TVA III Ordinary Shares for at least one year would be entitled to sell their securities pursuant to Rule 144, provided that such person is not deemed to have been one of our affiliates at the time of, or at any time during the three months preceding, a sale. If such persons are our affiliates at the time of, or at any time during the three months preceding a sale, such persons would be subject to additional restrictions, by which such person would be entitled to sell within any three-month period only a number of securities that does not exceed the greater of:
Sales by affiliates under Rule 144, when available, will also be limited by manner of sale provisions and notice requirements.
As of the date of this proxy statement/prospectus, TVA III has 30,000,000 TVA III Ordinary Shares outstanding. Of these TVA III Ordinary Shares, 22,500,000 TVA III public shares sold in the TVA III IPO are freely tradable without restriction or further registration under the Securities Act, except for any shares purchased by one of our affiliates within the meaning of Rule 144 under the Securities Act. All of the TVA III Ordinary Shares owned by the Sponsor are restricted securities under Rule 144, in that they were issued in private transactions not involving a public offering.
We expect Rule 144 to be available for the resale of the above-noted restricted securities as long as the conditions set forth in the exceptions listed above are satisfied following the Transactions, although these TVA III Ordinary Shares may be sold sooner to the extent they have been registered on a registration statement that has been declared effective by the SEC.
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SUBMISSION OF SHAREHOLDER PROPOSALS
The TVA III Board is aware of no other matter that may be brought before the extraordinary general meeting.
Under TVA III’s articles of association, shareholders are only entitled to submit proposals for consideration at annual general meetings and therefore are not entitled to submit proposals for consideration at the extraordinary general meeting.
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FUTURE STOCKHOLDER PROPOSALS
Stockholder Proposals
The Proposed Bylaws establish an advance notice procedure for stockholders who wish to present a proposal before an annual meeting of stockholders. The Proposed Bylaws provide that the only business that may be conducted at an annual meeting of stockholders is business that: (1) is specified in the notice of such meeting (or any supplement thereto); (2) is brought by or at the direction of the Post-Closing Company Board or any formally authorized committee of the Post-Closing Company Board; (3) may be provided in the certificate of designations for any class or series of Post-Closing Company preferred stock; or (4) is otherwise properly brought before such meeting by a stockholder who (a) is a stockholder of record (i) at the time of giving timely notice in writing to the Post-Closing Company’s secretary, (ii) on the record date for the determination of stockholders entitled to notice of such meeting, (iii) on the record date for the determination of stockholders entitled to vote at such meeting, and (iv) at the time of such meeting and (b) has complied with the notice procedures specified in the Proposed Bylaws in all applicable respects. To be timely, a stockholder’s notice must be received by Post-Closing Company’s secretary at the Post-Closing Company’s principal executive offices no earlier than 8:00 a.m., Pacific Time, on the 120th day and no later than 5:00 p.m., Pacific Time, on the 90th day prior to the day of the first anniversary of the preceding year’s annual meeting of stockholders.
If no annual meeting was held in the preceding year or the date of the Post-Closing Company’s annual meeting of stockholders has been changed by more than 25 days from the first anniversary of a preceding year’s annual meeting, to be timely, notice of a stockholder proposal must be received by the Post-Closing Company’s secretary at the Post-Closing Company’s principal executive offices no earlier than 8:00 a.m., Pacific Time, on the 120th day prior to the day of the annual meeting and no later than 5:00 p.m., Pacific Time, on the 90th day prior to the day of the annual meeting. If the first public announcement of the date of such annual meeting is less than 100 days prior to the date of such annual meeting, then the secretary must receive such notice no later than the tenth day following the day on which public announcement of the date of the annual meeting was first made by the Post-Closing Company, or such notice will not be considered timely. Stockholder proposals must also comply with all applicable requirements under the Proposed Bylaws, the Exchange Act and the rules and regulations thereunder.
The Proposed Bylaws provide that the foregoing notice requirements with respect to the proposal of any business at an annual meeting will be deemed to be satisfied by a stockholder if (1) such stockholder has submitted a proposal to the Post-Closing Company in compliance with Rule 14a-8 under the Exchange Act; and (2) such stockholder’s proposal has been included in a proxy statement that has been prepared by the Post-Closing Company to solicit proxies for the meeting. Under Rule 14a-8 of the Exchange Act, a stockholder proposal (other than nominations) to be included in the proxy statement and proxy card for the 2028 annual meeting pursuant to Rule 14a-8 must be received at the Post-Closing Company’s principal office at a reasonable time before the Post-Closing Company begins to print and send its proxy materials and must comply with Rule 14a-8.
Stockholder Director Nominees
The Proposed Bylaws permit stockholders to nominate directors for election at an annual meeting of stockholders. To nominate a director, the stockholder must provide the information required by the Proposed Bylaws and must comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder, including Rule 14a-19. In addition, the stockholder must give timely notice to the Post-Closing Company’s secretary in accordance with the Proposed Bylaws, which, in general, require that the notice be received by the Post-Closing Company’s secretary within the time periods described above under the section entitled “Stockholder Proposals.”
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OTHER SHAREHOLDER COMMUNICATIONS
Shareholders and interested parties may communicate with the TVA III Board, any committee chairperson or the non-management directors as a group by writing to the TVA III Board or committee chairperson in care of Texas Ventures Acquisition III Corp, 1012 Springfield Avenue, Mountainside, New Jersey 07092. Following the Closing, such communications should be sent to the Post-Closing Company Board at 2953 Bunker Hill Lane, Suite 305, Santa Clara, CA 95054. Each communication will be forwarded, depending on the subject matter, to the TVA III Board, the appropriate committee chairperson or all non-management directors.
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LEGAL MATTERS
DLA Piper LLP (US), Palo Alto, California will pass upon the validity of the securities of the Post-Closing Company offered by this proxy statement/prospectus and certain other legal matters related to this proxy statement/prospectus.
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EXPERTS
The financial statements of Texas Ventures Acquisition III Corp as of and for the year ended December 31, 2025 and for the period from July 26, 2024 (inception) through December 31, 2024, appearing in this proxy statement/prospectus have been audited by WithumSmith+Brown, PC, an independent registered public accounting firm, as stated in their report thereon, which includes an explanatory paragraph relating to Texas Ventures Acquisition III Corp.’s ability to continue as a going concern, and included in this proxy statement/prospectus, in reliance upon such report and upon the authority of such firm as experts in accounting and auditing.
The financial statements of Plus Automation, Inc. as of December 31, 2025 and 2024, and for each of the two years in the period ended December 31, 2025, included in this proxy statement/prospectus have been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report. Such financial statements are included in reliance upon the report of such firm given their authority as experts in accounting and auditing.
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DELIVERY OF DOCUMENTS TO SHAREHOLDERS
Pursuant to the rules of the SEC, TVA III and services that it employs to deliver communications to its shareholders are permitted to deliver to two or more shareholders sharing the same address a single copy of each of TVA III’s annual report to shareholders and this proxy statement/prospectus. Upon written or oral request, TVA III will deliver a separate copy of the annual report and/or this proxy statement/prospectus to any shareholder at a shared address to which a single copy of each document was delivered and that wishes to receive separate copies of such documents. Shareholders receiving multiple copies of such documents may likewise request that TVA III deliver single copies of such documents in the future. Shareholders may notify TVA III of their requests by calling or writing TVA III at its principal executive offices at 1012 Springfield Avenue, Mountainside, New Jersey 07092 or (201) 985-8300.
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Enforceability of civil liability
TVA III is a Cayman Islands exempted company. If TVA III does not change its jurisdiction of incorporation from the Cayman Islands to Delaware by effecting the Domestication, you may have difficulty serving legal process within the United States upon TVA III. You may also have difficulty enforcing, both in and outside the United States, judgments you may obtain in U.S. courts against TVA III in any action, including actions based upon the civil liability provisions of U.S. federal or state securities laws. Furthermore the courts of the Cayman Islands are unlikely (1) to recognize or enforce against TVA III, judgments of courts of the United States obtained against us or our directors or officers predicated upon the civil liability provisions of the securities laws of the United States or any state in the United States; and (2) in original actions brought in the Cayman Islands, to impose liabilities against us or our directors or officers predicated upon the civil liability provisions of the securities laws of the United States or any state in the United States, so far as the liabilities imposed by those provisions are penal in nature. In those circumstances, although there is currently no statutory enforcement or treaty between the United States and the Cayman Islands providing for enforcement of judgments obtained in the United States. The courts of the Cayman Islands will recognize and enforce a foreign money judgment of a foreign court of competent jurisdiction without retrial on the merits based on the principle that a judgment of a competent foreign court imposes upon the judgment debtor an obligation to pay the sum for which judgment has been given provided certain conditions are met. For a foreign judgment to be enforced in the Cayman Islands, such judgment must be final and conclusive, given by a court of competent jurisdiction (the courts of the Cayman Islands will apply the rules of Cayman Islands private international law to determine whether the foreign court is a court of competent jurisdiction), and must not be in respect of taxes or a fine or penalty, inconsistent with a Cayman Islands judgment in respect of the same matter, impeachable on the grounds of fraud or obtained in a manner, and or be of a kind the enforcement of which is, contrary to natural justice or the public policy of the Cayman Islands. Furthermore, it is uncertain that Cayman Islands courts would enforce: (1) judgments of U.S. courts obtained in actions against us or other persons that are predicated upon the civil liability provisions of the U.S. federal securities laws; or (2) original actions brought against us or other persons predicated upon the Securities Act. Ogier has informed us that there is uncertainty with regard to Cayman Islands law relating to whether a judgment obtained from the U.S. courts under civil liability provisions of the securities laws will be determined by the courts of the Cayman Islands as penal, punitive in nature. A Cayman Islands Court may stay enforcement proceedings if concurrent proceedings are being brought elsewhere. However, TVA III may be served with process in the United States with respect to actions against TVA III arising out of or in connection with violation of U.S. federal securities laws relating to offers and sales of TVA III’s securities by serving TVA III’s U.S. agent irrevocably appointed for that purpose.
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WHERE YOU CAN FIND MORE INFORMATION
TVA III files reports, proxy statements and other information with the SEC as required by the Exchange Act. You can read TVA III’s SEC filings, including this proxy statement/prospectus, on the Internet at the SEC’s website at: http://www.sec.gov.
Information and statements contained in this proxy statement/prospectus or any annex to this proxy statement/prospectus are qualified in all respects by reference to the copy of the relevant contract or other annex filed with this proxy statement/prospectus.
All information contained in this document relating to TVA III has been supplied by TVA III, and all such information relating to PlusAI has been supplied by PlusAI. Information provided by one another does not constitute any representation, estimate or projection of the other.
If you are a TVA III shareholder and would like additional copies of this document or if you have questions about the business combination, you should contact via phone or in writing:
Texas Ventures Acquisition III Corp
1012 Springfield Avenue
Mountainside, New Jersey 07092
Attention: Troy Rillo, Chief Executive Officer and Chief Financial Officer
Email: Tvainfo@yorkvilleglobal.com
or:
Sodali & Co
333 Ludlow Street, 5th Floor, South Tower
Stamford, CT 06902
Telephone: (800) 662-5200
Banks and Brokers: (203) 658-9400
Email: TVA.info@investor.sodali.com
If you are a TVA III shareholder and would like to request documents, please do so no later than five business days prior to the extraordinary general meeting, in order to receive them before the extraordinary general meeting. If you request any documents from us, we will mail them to you by first class mail, or another equally prompt means.
This document is a proxy statement/prospectus of TVA III for the extraordinary general meeting. We have not authorized anyone to give any information or make any representation about the business combination, PlusAI or TVA III that is different from, or in addition to, that contained in this proxy statement/prospectus. Therefore, if anyone does give you information of this sort, you should not rely on it. The information contained in this proxy statement/prospectus speaks only as of the date of this proxy statement/prospectus, unless the information specifically indicates that another date applies.
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TEXAS VENTURES ACQUISITION III CORP
INDEX TO FINANCIAL STATEMENTS
Audited Financial Statements:
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Page |
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Report of Independent Registered Public Accounting Firm (PCAOB ID Number 100) |
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F-2 |
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Balance Sheets as of December 31, 2025 and 2024 |
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F-3 |
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Statements of Operations for the year ended December 31, 2025 and for the period from July 26, 2024 (inception) through December 31, 2024 |
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F-4
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Statements of Changes in Shareholders’ Deficit for the year ended December 31, 2025 and for the period from July 26, 2024 (inception) through December 31, 2024 |
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F-5
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Statements of Cash Flows for the year ended December 31, 2025 and for the period from July 26, 2024 (inception) through December 31, 2024 |
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F-6
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Notes to Financial Statements |
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F-7 |
Unaudited Condensed Financial Statements:
Condensed Balance Sheets as of June 30, 2026 (Unaudited) and December 31, 2025 |
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F-24 |
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Condensed Statements of Operations for the three and six months ended June 30, 2026 and 2025 (Unaudited) |
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F-25 |
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Condensed Statements of Changes in Shareholders’ Deficit for the three and six months ended June 30, 2026 and 2025 (Unaudited) |
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F-26 |
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Condensed Statements of Cash Flows for the six months ended June 30, 2026 and 2025 (Unaudited) |
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F-27 |
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Notes to Unaudited Condensed Financial Statements |
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F-28 |
F-1
Table of Contents
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and the Board of Directors of
Texas Ventures Acquisition III Corp:
Opinion on the Financial Statements
We have audited the accompanying balance sheets of Texas Ventures Acquisition III Corp (the “Company”) as of December 31, 2025 and 2024, the related statements of operations, changes in shareholders’ deficit and cash flows for the year ended December 31, 2025 and for the period from July 26, 2024 (inception) through December 31, 2024 and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for the year ended December 31, 2025 and for the period from July 26, 2024 (inception) through December 31, 2024 in conformity with accounting principles generally accepted in the United States of America.
Going Concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, if the Company is unable to raise additional funds to alleviate liquidity needs and the Company is unable to complete a business combination by October 25, 2026, 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 statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. 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 audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are 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 audits, 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 audits included performing procedures to assess the risks of material misstatement of the financial statements, 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 statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
/s/ WithumSmith+Brown, PC
We have served as the Company’s auditor since 2024.
New York, New York
April 15, 2026
PCAOB ID Number 100
F-2
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TEXAS VENTURES ACQUISITION III CORP
BALANCE SHEETS
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December 31, 2025 |
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December 31, 2024 |
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ASSETS |
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Current Assets: |
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Cash |
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$ |
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$ |
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Prepaid expenses |
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Total Current Assets |
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Prepaid expenses, non-current |
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— |
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Investments held in Trust Account |
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— |
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Deferred offering costs |
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— |
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Total Assets |
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$ |
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$ |
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LIABILITIES, CLASS A ORDINARY SHARES SUBJECT TO POSSIBLE REDEMPTION AND SHAREHOLDERS’ DEFICIT |
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Current Liabilities: |
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Accrued expenses |
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$ |
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$ |
— |
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Accrued offering costs |
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— |
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— |
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— |
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Total Current Liabilities |
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Deferred underwriting commissions |
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— |
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Total Liabilities |
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Class A ordinary shares subject to possible redemption; |
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— |
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Shareholders’ Deficit: |
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Preference shares, $ |
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Class A ordinary shares, $ |
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Class B ordinary shares, $ |
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Additional paid-in capital |
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Accumulated deficit |
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( |
) |
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( |
) |
Total Shareholders’ Deficit |
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( |
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( |
) |
Total Liabilities, Class A Ordinary Shares Subject to Possible Redemption and Shareholders’ Deficit |
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$ |
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$ |
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See accompanying notes to the financial statements.
F-3
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TEXAS VENTURES ACQUISITION III CORP
STATEMENTS OF OPERATIONS
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For the Year |
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For the Period |
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EXPENSES |
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General and administrative expenses |
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$ |
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$ |
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TOTAL EXPENSES |
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OTHER INCOME |
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Interest income earned on investments held in Trust Account |
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— |
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Interest income earned on cash held in operating account |
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— |
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Forgiveness of debt |
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— |
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Realized gain on NMSI warrants |
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— |
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TOTAL OTHER INCOME |
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— |
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Net income (loss) |
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$ |
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$ |
( |
) |
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Basic weighted average shares outstanding, Class A ordinary shares subject to possible redemption |
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— |
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Basic net income per share, Class A ordinary shares subject to possible redemption |
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$ |
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$ |
— |
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Diluted weighted average shares outstanding, Class A ordinary shares subject to possible redemption |
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— |
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Diluted net income per share, Class A ordinary shares subject to possible redemption |
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$ |
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$ |
— |
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Basic weighted average shares outstanding, Class B ordinary shares(1) |
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Basic net income (loss) per share, Class B ordinary shares |
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$ |
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$ |
( |
) |
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Diluted weighted average shares outstanding, Class B ordinary shares(1) |
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Diluted net income (loss) per share, Class B ordinary shares |
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$ |
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$ |
( |
) |
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See accompanying notes to the financial statements.
F-4
Table of Contents
TEXAS VENTURES ACQUISITION III CORP
FOR THE YEAR ENDED DECEMBER 31, 2025 AND FOR THE PERIOD FROM JULY 26, 2024
(INCEPTION) THROUGH DECEMBER 31, 2024
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Class B Ordinary Shares |
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Additional |
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Accumulated |
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Shareholders’ |
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Shares |
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Amount |
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Capital |
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Deficit |
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Deficit |
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Balance, January 1, 2025 |
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$ |
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$ |
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$ |
( |
) |
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$ |
( |
) |
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Forfeiture of Class B ordinary shares |
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( |
) |
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( |
) |
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— |
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— |
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Sale of Private Placement Warrants |
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— |
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— |
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— |
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Fair value of Public Warrants at issuance |
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— |
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— |
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— |
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Accretion for Class A Ordinary Shares to redemption amount |
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— |
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— |
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( |
) |
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( |
) |
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( |
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Allocated value of transaction costs to Warrants |
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— |
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— |
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( |
) |
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— |
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( |
) |
NMSI Private Placement Warrant reclassification from Warrant Agreement Amendment |
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— |
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— |
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— |
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Remeasurement of ordinary shares to redemption value |
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— |
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— |
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( |
) |
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( |
) |
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( |
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Net income |
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— |
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— |
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— |
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Balance, December 31, 2025 |
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$ |
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$ |
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$ |
( |
) |
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$ |
( |
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Class B Ordinary Shares |
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Additional |
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Accumulated |
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Shareholders’ |
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Shares |
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Amount |
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Capital |
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Deficit |
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Deficit |
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Balance, July 26, 2024 (inception) |
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$ |
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$ |
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$ |
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$ |
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Issuance of Class B ordinary shares to Sponsor |
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— |
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Net loss |
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— |
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— |
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— |
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( |
) |
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( |
) |
Balance, December 31, 2024 |
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$ |
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$ |
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$ |
( |
) |
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$ |
( |
) |
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See accompanying notes to the financial statements.
F-5
Table of Contents
TEXAS VENTURES ACQUISITION III CORP
STATEMENTS OF CASH FLOWS
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For the Year |
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For the Period |
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Cash Flows from Operating Activities: |
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Net income (loss) |
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$ |
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$ |
( |
) |
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Adjustments to reconcile net income (loss) to net cash used in operating activities: |
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Interest income earned on investments held in Trust Account |
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( |
) |
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— |
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Realized gain on NMSI warrants |
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( |
) |
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— |
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Changes in operating assets and liabilities: |
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Prepaid expenses |
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( |
) |
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( |
) |
Deferred offering costs |
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( |
) |
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Accrued expenses |
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— |
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Accrued offering costs |
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( |
) |
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— |
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Due to related party |
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— |
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Net Cash Used in Operating Activities |
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( |
) |
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( |
) |
Cash Flows from Investing Activities: |
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Cash deposited into Trust Account |
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( |
) |
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— |
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Net Cash Used in Investing Activities |
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( |
) |
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— |
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Cash Flows from Financing Activities: |
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Proceeds from the sale of Units |
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— |
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Proceeds from promissory note - related party |
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Payment of promissory note - related party |
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( |
) |
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— |
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Proceeds from sale of private placement warrants |
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— |
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Proceeds from issuance of Class B ordinary shares |
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— |
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Payment of underwriting fee |
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( |
) |
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— |
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Payment of offering costs |
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( |
) |
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— |
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Net Cash Provided by Financing Activities |
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Net change in cash |
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Cash at beginning of period |
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— |
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Cash at end of period |
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$ |
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$ |
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Supplemental disclosure of non-cash financing activities: |
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Deferred underwriters’ discount payable |
|
$ |
|
|
$ |
— |
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Deferred offering costs included in accrued offering costs |
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$ |
— |
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$ |
|
|
See accompanying notes to the financial statements.
F-6
Table of Contents
TEXAS VENTURES ACQUISITION III CORP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2025
NOTE 1 - DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS AND GOING CONCERN
Texas Ventures Acquisition III Corp (the “Company”) is a blank check company incorporated as a Cayman Islands exempted company on July 26, 2024. The Company was incorporated for the purpose of effecting a merger, 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.
On April 24, 2025, the Company consummated its Initial Public Offering (“Initial Public Offering” or “IPO”) of
Simultaneously with the closing of the IPO, the Company completed the private sale of
On September 18, 2025, the Company, the Prior Sponsor and Yorkville Acquisition Sponsor II, LLC (the “New Sponsor”) entered into the Purchase Agreement. Pursuant to the Purchase Agreement, the New Sponsor (i) purchased from the Prior Sponsor (a)
As conditions to the closing of the Purchase, all of the then-existing members of the Board of Directors (the “Prior Board”) and then-existing officers of the Company resigned, and the New Sponsor designated a new board of directors and new management team, which were appointed immediately prior to the closing of the Purchase. The New Sponsor also agreed, among other things, to (i) execute a joinder agreement (the “Joinder”) to become a party to the Registration Rights Agreement, and (ii) enter into the Insider Letter with the Company,” providing for, among other things, voting obligations and certain transfer restrictions. The Prior Sponsor and the Company, among other things, agreed to cause all parties to the Letter Agreement to, execute a waiver to certain requirements of the Letter Agreement such that the New Sponsor need not execute a joinder or become a party to the Letter Agreement.
In addition to the foregoing, the closing of the Purchase was conditional on, among other things, (i) the termination of all Company related party contracts and certain commercial arrangements, (ii) the payment of all outstanding invoices of the Company by the closing, (iii) the Company holding at least $
F-7
Table of Contents
TEXAS VENTURES ACQUISITION III CORP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2025
Upon the closing of the Purchase, the New Sponsor became the sponsor of the Company, the new directors and officers designated by the New Sponsor assumed their positions, and, in accordance with the terms of the Joinder to become a party to the Registration Rights Agreement, the New Sponsor became a party to the Registration Rights Agreement.
Transaction costs for the Initial Public Offering amounted to $
On April 24, 2025, the underwriters partially exercised the over-allotment option of
Upon the closing of the Initial Public Offering and the Private Placement, $
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 Warrants, 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
The Company will provide the holders of the outstanding Public Shares (the “Public Shareholders”) with the opportunity to redeem all or a portion of their Public Shares either (i) in connection with a general meeting called to approve the Business Combination or (ii) 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 (initially anticipated to be $
F-8
Table of Contents
TEXAS VENTURES ACQUISITION III CORP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2025
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 Warrants. The Public Shares subject to redemption are recorded at a redemption value and classified as temporary equity upon the completion of the Initial Public Offering in accordance with the 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 the Company receives an ordinary resolution under Cayman Islands law and its Amended and Restated Articles of Association (the “Amended and Restated 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 by proxy at the applicable general meeting of the Company, or such other vote as required by law or stock exchange rule. If the Company’s Business Combination is structured as a statutory merger or consolidation with another company under Cayman Islands law, the approval of its Business Combination will also require 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. 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 Amended and Restated 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 Prior Sponsor has agreed to vote its Founder Shares (as defined in Note 5) and any Public Shares purchased during or after the Initial Public Offering in favor of approving a 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 for or against 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. Additionally, each Public Shareholder may elect to redeem their Public Shares without voting and, if they do vote, irrespective of whether they vote for or against the proposed 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 Amended and Restated 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 Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from redeeming its shares with respect to more than an aggregate of
The Sponsor has agreed (a) to waive its redemption rights with respect to any Founder Shares and Public Shares held by it in connection with the completion of a Business Combination and (b) not to propose an amendment to the Amended and Restated 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
If the Company has not completed a Business Combination within 18 months from the closing of the Initial Public Offering or during any extended time to consummate a Business Combination beyond 18 months (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 (and subject to lawfully available funds therefor), redeem
F-9
Table of Contents
TEXAS VENTURES ACQUISITION III CORP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2025
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 warrants, which will expire worthless if the Company fails to complete a Business Combination within the Combination Period.
The Sponsor has agreed to waive its rights to liquidating distributions from the Trust Account with respect to the Founder Shares it will receive 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. The underwriters have agreed to waive their rights to their deferred underwriting commission (see Note 6) held in the Trust Account in the event the Company does not complete a Business Combination within the Combination Period, and in such event, such amounts will be included with the other funds held in the Trust Account that will be available to fund the redemption of the Public Shares. 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 ($
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) $
Going Concern Considerations
At December 31, 2025, the Company had cash of $
Subsequent to the consummation of the Initial Public Offering, the Company’s liquidity has been satisfied through the net proceeds from the consummation of the Initial Public Offering and the Private Placement held outside of the Trust Account. In addition, 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, provide the Company Working Capital Loans (as defined in Note 5). Management expects the Company to incur significant expenses as a result of identifying and evaluating prospective initial Business Combination candidates, performing due diligence on prospective target businesses, paying for travel expenditures, selecting the target business to merge with or acquire, and structuring, negotiating and consummating the Business Combination. As a result, management has determined that the current liquidity condition of the Company, coupled with the fact that the Company is within one year of mandatory liquidation, raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might result from the outcome of these uncertainties. As such, the accompanying financial statements have been prepared assuming the Company will continue as a going concern and do not include any adjustments that might result should the Company be required to liquidate.
F-10
Table of Contents
TEXAS VENTURES ACQUISITION III CORP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2025
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying consolidated financial statements are presented in U.S. dollars and have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the accounting and disclosure rules and regulations of the Securities and Exchange Commission (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 statements 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 financial statements 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 statements and the reported amounts of expenses during the reporting period.
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 statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates.
Cash and Cash Equivalents
The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company did not have any cash equivalents as of December 31, 2025 and December 31, 2024.
F-11
Table of Contents
TEXAS VENTURES ACQUISITION III CORP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2025
Offering Costs Associated with the Initial Public Offering
The offering costs consisted of legal, accounting, underwriting and other costs incurred that were directly related to the Initial Public Offering and that were charged to shareholders’ deficit upon the completion of the Initial Public Offering.
The Company complies with the requirements of the ASC 340-10-S99 and SEC Staff Accounting Bulletin Topic 5A, “Expenses of Offering.” Offering costs consist principally of professional and registration fees that are related to the Initial Public Offering. Financial Accounting Standards Board (“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 the Initial Public Offering proceeds from the Units between ordinary shares and warrants, using the residual method by allocating the Initial Public Offering proceeds first to assigned value of the warrants and then to the ordinary shares. Offering costs allocated to the Public Shares are charged to temporary equity and offering costs allocated to the Public and Private Placement Warrants are charged to shareholders’ deficit as Public and Private Placement Warrants after management’s evaluation are accounted for under equity treatment. Offering costs allocated the NMSI Private Placement Warrants were charged to the statements of operations as the NMSI Warrants after management’s evaluation were accounted for as liabilities prior to the amendment to the December 31, 2025 amendment to the Warrant Agreement.
Income Taxes
The Company follows the asset and liability method of accounting for income taxes under ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statements 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. 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. There were
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 statements.
Investments Held in Trust Account
As of December 31, 2025, the Company had $
Net Income (Loss) per Ordinary Share
Net income (loss) per ordinary share is computed by dividing net income (loss) by the weighted average number of ordinary shares outstanding during the period, excluding ordinary shares subject to forfeiture. Basic weighted average shares were reduced for the
F-12
Table of Contents
TEXAS VENTURES ACQUISITION III CORP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2025
not consider the effect of the warrants issued in connection with the (i) Initial Public Offering and (ii) the Private Placement. Diluted earnings per share differs from basic earnings per share. For diluted earnings per share, the Class B non-redeemable ordinary shares subject to forfeiture are included in the calculation of total diluted shares at the beginning of the interim period in which the contingency was resolved. For basic earnings per share, the forfeited Class B non-redeemable ordinary shares are considered forfeited on the date of forfeiture.
The following tables reflect the calculation of basic net income (loss) per ordinary share:
|
|
For the Year Ended |
|
|
Class A ordinary shares subject to possible redemption |
|
|
|
|
Numerator: Allocation of net income, basic |
|
$ |
|
|
Denominator: Basic weighted average shares outstanding |
|
|
|
|
Basic net income per Class A Ordinary share subject to possible redemption |
|
$ |
|
|
Class B ordinary shares |
|
|
|
|
Numerator: Allocation of net income, basic |
|
$ |
|
|
Denominator: Basic weighted average shares outstanding |
|
|
|
|
Basic net income per Class B Ordinary Share |
|
$ |
|
|
|
|
For the Period from |
|
|
Class A ordinary shares subject to possible redemption |
|
|
|
|
Numerator: Allocation of net loss, basic |
|
$ |
— |
|
Denominator: Basic weighted average shares outstanding |
|
|
— |
|
Basic net loss per Class A Ordinary share subject to possible redemption |
|
$ |
— |
|
Class B ordinary shares |
|
|
|
|
Numerator: Allocation of net loss, basic |
|
$ |
( |
) |
Denominator: Basic weighted average shares outstanding |
|
|
|
|
Basic net loss per Class B Ordinary Share |
|
$ |
( |
) |
The following tables reflect the calculation of diluted net income (loss) per ordinary share:
|
|
For the Year Ended |
|
|
Class A ordinary shares subject to possible redemption |
|
|
|
|
Numerator: Allocation of net income, diluted |
|
$ |
|
|
Denominator: Diluted weighted average shares outstanding |
|
|
|
|
Diluted net income per Class A Ordinary share subject to possible redemption |
|
$ |
|
|
Class B ordinary shares |
|
|
|
|
Numerator: Allocation of net income, diluted |
|
$ |
|
|
Denominator: Diluted weighted average shares outstanding |
|
|
|
|
Diluted net income per Class B Ordinary Share |
|
$ |
|
|
F-13
Table of Contents
TEXAS VENTURES ACQUISITION III CORP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2025
|
|
For the Period from |
|
|
Class A ordinary shares subject to possible redemption |
|
|
|
|
Numerator: Allocation of net loss, diluted |
|
$ |
— |
|
Denominator: Diluted weighted average shares outstanding |
|
|
— |
|
Diluted net loss per Class A Ordinary share subject to possible redemption |
|
$ |
— |
|
Class B ordinary shares |
|
|
|
|
Numerator: Allocation of net loss, diluted |
|
$ |
( |
) |
Denominator: Diluted weighted average shares outstanding |
|
|
|
|
Diluted net loss per Class B Ordinary Share |
|
$ |
( |
) |
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 limit. 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.
Fair Value of Financial Instruments
The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC 820, “Fair Value Measurement,” approximates the carrying amounts represented in the balance sheets, primarily due to their short-term nature.
Fair Value Measurements
Fair value is defined as the price that would be received for sale of an asset or paid to transfer 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:
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.
F-14
Table of Contents
TEXAS VENTURES ACQUISITION III CORP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2025
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 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 statements 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 sheets 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.
Warrant Instruments
The Company accounts for the Public Warrants issued in connection with the Initial Public Offering, the Private Placement Warrants and the NMSI Private Placement Warrants in accordance with the guidance contained in FASB ASC 815, “Derivatives and Hedging”. Under ASC 815-40, the Public Warrants and the Private Placement Warrants meet the criteria for equity treatment and as such are recorded in shareholders’ deficit. The NMSI Private Placement Warrants do not meet the criteria for equity treatment and as such are recorded as a liability and remeasured each period with changes recorded in the statements of operations. If the Public and Private Placement Warrants no longer meet the criteria for equity treatment, they will record as a liability and be remeasured each period with changes recorded in the statements of operations. On December 31, 2025, the Company issued an amendment to the warrant agreement that removed the settlement provision that precluded the NMSI Private Placement Warrants from equity treatment. As a result of this amendment, the Company determined that the NMSI Private Placement Warrants meet the criteria for equity treatment and as such were reclassified to additional paid-in capital.
Class A Ordinary Shares Subject to 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 ASC 480-10-S99, the Company classifies Public Shares subject to redemption outside of permanent equity as the redemption provisions are not solely within the control of the Company. The Company recognizes changes in redemption value immediately as they occur and will adjust the carrying value of redeemable shares to equal the redemption value at the end of each reporting period. Immediately upon the closing of the Initial Public Offering, the Company recognized the accretion from initial book value to redemption amount 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 December 31, 2025, TVA III 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 sheets.
Gross proceeds |
|
$ |
|
|
Less: Proceeds allocated to public warrants |
|
|
( |
) |
Less: Class A ordinary share issuance costs |
|
|
( |
) |
Add: Accretion of carrying value to redemption value |
|
|
|
|
Add: Remeasurement of carrying value to redemption value |
|
|
|
|
Class A ordinary shares subject to possible redemption, December 31, 2025 |
|
$ |
|
Recent Accounting Standards
In November 2024, the FASB issued ASU 2024-03, “Disaggregation of Income Statement Expenses,” which requires disclosures of certain disaggregated income statement expense captions into specified categories within the footnotes to the financial statements. The requirements of the ASU are effective for annual periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027, with early adoption permitted.
F-15
Table of Contents
TEXAS VENTURES ACQUISITION III CORP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2025
The requirements will be applied prospectively with the option for retrospective application. The Company is currently evaluating the impact ASU 2024-03 will have on its financial statements.
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 statements.
NOTE 3 - INITIAL PUBLIC OFFERING
Pursuant to the Initial Public Offering on April 24, 2025, the Company sold
NOTE 4 - PRIVATE PLACEMENT
Simultaneously with the consummation of the Initial Public Offering on April 24, 2025 and the sale of the Units, the Company consummated the Private Placement of Private Placement Warrants. The Prior Sponsor, CCM and Clear Street purchased an aggregate of
NOTE 5 - RELATED PARTIES
Founder Shares
On August 1, 2024, the Prior Sponsor received
On April 24, 2025,
On September 18, 2025, pursuant to the Purchase Agreement, the Prior Sponsor sold
The New Sponsor has agreed not to transfer or sell any of their Founder Shares and any TVA III Class A Ordinary Shares issuable upon conversion thereof until the closing of the Company’s initial Business Combination; except to affiliates, members or partners of the Sponsor or their affiliates, or any employees of such affiliates, provided that in each case the transferee agrees in writing to be bound by the terms of the Insider Letter. In connection with the Purchase, the parties also entered into a joinder to and amendment of the Registration Rights Agreement that removed lock‑up obligations under that agreement for the New Sponsor.
F-16
Table of Contents
TEXAS VENTURES ACQUISITION III CORP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2025
General and Administrative Services
Commencing on the effective date of the Initial Public Offering on April 24, 2025 and through the earlier of the Company’s consummation of a Business Combination or its liquidation, the Company has agreed to pay the Sponsor or an affiliate thereof a monthly fee of $
CEO Advisory Agreement
Effective October 2025, the Company agreed to pay a monthly advisory fee of $
Promissory Notes - Related Party
On August 1, 2024, the Prior Sponsor issued an unsecured promissory note (the “Promissory Note”) to the Company, pursuant to which the Company may borrow up to an aggregate principal amount of up to $
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 (“Working Capital Loans”). Such Working Capital Loans would be evidenced by promissory notes. The notes may be repaid upon completion of a Business Combination, without interest, or, at the lender’s discretion, up to $
Due to Related Party
On December 31, 2025, the Sponsor paid for certain expenses on behalf of the Company $
F-17
Table of Contents
TEXAS VENTURES ACQUISITION III CORP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2025
NOTE 6 - COMMITMENTS AND CONTINGENCIES
Registration Rights
The holders of the Founder Shares, Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans (and any ordinary shares issuable upon the exercise of the Private Placement Warrants or warrants issued upon conversion of the Working Capital Loans and upon conversion of the Founder Shares) will be entitled to registration rights pursuant to a registration rights agreement to be signed prior to or on the effective date of 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). 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 piggyback 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. However, the registration rights agreement provides that the Company will not be required to effect or permit any registration or cause any registration statement to become effective until the securities covered thereby are released from their lockup restrictions. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
Risks and Uncertainties
The Company’s results of operations and its ability to complete an initial Business Combination may be adversely affected by various factors that could cause economic uncertainty and volatility in the financial markets, many of which are beyond the Company’s control. The Company’s results of operations and its ability to consummate an initial Business Combination could be impacted by, among other things, various social and political circumstances in the U.S. and around the world (including wars and other forms of conflict, including rising trade tensions between the United States and China, and other uncertainties regarding actual and potential shifts in the U.S. and foreign, trade, economic and other policies with other countries, terrorist acts, security operations and catastrophic events such as fires, floods, earthquakes, tornadoes, hurricanes and global health epidemics) that may contribute to increased market volatility and economic uncertainties or deterioration in the U.S. and worldwide. Specifically, the rising conflict between Russia and Ukraine, and the rising conflicts in the Middle East, and resulting market volatility could adversely affect the Company’s ability to complete a Business Combination. In response to the conflict between Russia and Ukraine, the U.S. and other countries have imposed sanctions or other restrictive actions against Russia. Any of the above factors, including sanctions, export controls, tariffs, trade wars and other governmental actions, could have a material adverse effect on the Company’s ability to complete a Business Combination and the value of the Company’s securities. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Underwriting Agreement
The Company granted the underwriters a
The underwriters were paid a cash underwriting discount of $
F-18
Table of Contents
TEXAS VENTURES ACQUISITION III CORP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2025
NOTE 7 - SHAREHOLDERS’ DEFICIT
Preference Shares - The Company is authorized to issue
Class A Ordinary Shares - The Company is authorized to issue
Class B Ordinary Shares - The Company is authorized to issue
Holders of ordinary shares will vote together as a single class on all matters submitted to a vote of shareholders except as otherwise required by law. In connection with the initial Business Combination, the Company may enter into a shareholders agreement or other arrangements 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.
The Founder Shares are designated as TVA III Class B Ordinary Shares and will automatically convert at a ratio of one-for-one into TVA III Class A Ordinary Shares (which such TVA III Class A Ordinary Shares delivered 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 the initial Business Combination.
NOTE 8 - WARRANTS
In connection with the Initial Public Offering as of April 24, 2025, and as of December 31, 2025, there were
On September 18, 2025, the Company, the Prior Sponsor and the New Sponsor entered into the Purchase Agreement. Pursuant to the Purchase Agreement, the New Sponsor (i) purchased from the Prior Sponsor (a)
On December 31, 2025, the Company issued an amendment to the warrant agreement that removed the settlement provision that precluded the NMSI Private Placement Warrants from equity treatment. As a result of this amendment, the Company determined that the NMSI Private Placement Warrants meet the criteria for equity treatment and as such were reclassified to additional paid-in capital.
F-19
Table of Contents
TEXAS VENTURES ACQUISITION III CORP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2025
Public Warrants may only be exercised for a whole number of shares. No fractional warrants will be issued upon separation of the Units and only whole warrants will trade. The Public Warrants will become exercisable
The Company will not be obligated to deliver any Class A ordinary share pursuant to the exercise of a Public Warrant and will have no obligation to settle such Public Warrant exercise unless a registration statement under the Securities Act covering the issuance of the TVA III Class A Ordinary Shares issuable upon exercise of the warrants is then effective and a current prospectus relating to those TVA III Class A Ordinary Shares is available, subject to the Company satisfying its obligations with respect to registration, or a valid exemption from registration is available. No warrant will be exercisable for cash or on a cashless basis, and the Company will not be obligated to issue any shares to holders seeking to exercise their warrants, unless the issuance of the shares upon such exercise is registered or qualified under the securities laws of the state of residence of the exercising holder, or an exemption from registration is available.
The Company has agreed that as soon as practicable, but in no event later than 20 business days after the closing of a Business Combination, the Company will use its commercially reasonable efforts to file, and within
Redemption of Warrants. When the price per Class A ordinary share equals or exceeds $
If and when the warrants become redeemable by the Company, the Company may exercise its redemption right even if it is unable to register or qualify the underlying securities for sale under all applicable state securities laws.
In addition, if (x) the Company issues additional TVA III Class A Ordinary Shares or equity-linked securities for capital raising purposes in connection with the closing of its initial Business Combination at less than $
F-20
Table of Contents
TEXAS VENTURES ACQUISITION III CORP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2025
Combination (net of redemptions), and (z) the volume weighted average trading price of TVA III Class A Ordinary Shares during the
The Private Placement Warrants are identical to the Public Warrants underlying the Units sold in the Initial Public Offering, except that the Private Placement Warrants and the TVA III Class A Ordinary Shares issuable upon the exercise of the Private Placement Warrants will not be transferable, assignable or saleable until
NOTE 9 - FAIR VALUE MEASUREMENTS
The following table presents information about the Company’s assets that are measured at fair value at December 31, 2025 and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value. The Company did not have any fair value measurements as of December 31, 2024.
Description |
|
Level |
|
|
December 31, 2025 |
|
||
Assets: |
|
|
|
|
|
|
||
Investments held in Trust Account |
|
|
1 |
|
|
$ |
|
|
The NMSI Warrants were accounted for as a liability in accordance with ASC 815-40 and were presented within liabilities in the balance sheets. The Warrant liabilities were measured at fair value. On December 31, 2025, the Company issued an amendment to the warrant agreement that removed the settlement provision that precluded the NMSI Private Placement Warrants from equity treatment. As a result of this amendment, the Company determined that the NMSI Private Placement Warrants meet the criteria for equity treatment and as such were fair valued as of the date of the amendment and subsequently reclassified from warrant liabilities to additional paid-in capital. The Company fully realized the gain on the change in fair value of the warrant liability as of December 31, 2025.
The table below provides a summary of the changes in fair value of all financial assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the year ended December 31, 2025:
|
|
Fair Value |
|
|
Balance, December 31, 2024 |
|
$ |
— |
|
Initial fair value |
|
|
|
|
|
|
|
||
Reclassification to additional paid-in capital |
|
|
( |
) |
Balance, December 31, 2025 |
|
$ |
— |
|
The Company used a Monte Carlo simulation model to value the Public Warrants and NMSI Warrants at April 24, 2025. As a result of the model, the Company marked the
|
|
April 24, 2025 |
|
|
Public Warrants |
|
$ |
|
|
NMSI Warrants |
|
|
|
|
F-21
Table of Contents
TEXAS VENTURES ACQUISITION III CORP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2025
The Company used the following assumptions to value the Public Warrants and NMSI Warrants at April 24, 2025.
Volatility |
|
|
% |
|
Risk-Free Rate |
|
|
% |
|
Dividends |
|
$ |
|
|
Market Adjustment |
|
|
% |
|
Stock Price |
|
$ |
|
|
Weighted Term (years) |
|
|
|
The Company used a Monte Carlo simulation model with the following assumptions to value the NMSI Warrants at December 31, 2025.
Volatility |
|
|
% |
|
Risk Free Rate |
|
|
% |
|
Dividends |
|
$ |
|
|
Market Adjustment |
|
|
% |
|
Stock Price |
|
$ |
|
|
Weighted Term (years) |
|
|
|
NOTE 10 - SEGMENT INFORMATION
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 , 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
|
|
December 31, 2025 |
|
|
December 31, 2024 |
|
||
Cash |
|
$ |
|
|
$ |
|
||
Investments held in Trust Account |
|
$ |
|
|
$ |
|
||
|
|
For the Year Ended |
|
|
General and administrative expenses |
|
$ |
|
|
Interest income earned on investments held in Trust Account |
|
$ |
|
|
F-22
Table of Contents
TEXAS VENTURES ACQUISITION III CORP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2025
|
|
For the Period from |
|
|
General and administrative expenses |
|
$ |
|
|
Interest income earned on investments held in Trust Account |
|
$ |
|
|
General and administrative expenses are reviewed and monitored by the CODM to manage and forecast cash to ensure enough capital is available to complete a Business Combination or similar transaction within the Business Combination period. The CODM also evaluates general and administrative expenses to manage, maintain and enforce all contractual agreements to ensure costs are aligned with all agreements and budget. General and administrative expenses, as reported on the statements of operations, are the significant segment expenses provided to the CODM on a regular basis.
All other segment items included in net income (loss) are reported on the statements of operations and described within their respective disclosures.
NOTE 11 - SUBSEQUENT EVENTS
The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the accompanying financial statements were issued. Based upon this review, the Company did not identify any subsequent events that would have required adjustment or disclosure in the accompanying financial statements.
F-23
Table of Contents
TEXAS VENTURES ACQUISITION III CORP
CONDENSED BALANCE SHEETS
|
|
June 30, |
|
|
December 31, |
|
||
|
|
2026 |
|
|
2025 |
|
||
|
|
(Unaudited) |
|
|
|
|
||
ASSETS |
|
|
|
|
|
|
||
Current Assets: |
|
|
|
|
|
|
||
Cash |
|
$ |
|
|
$ |
|
||
Prepaid expenses |
|
|
|
|
|
|
||
Total Current Assets |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Prepaid expenses, non-current |
|
|
— |
|
|
|
|
|
Investments held in Trust Account |
|
|
|
|
|
|
||
Total Assets |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
LIABILITIES, CLASS A ORDINARY SHARES SUBJECT TO POSSIBLE REDEMPTION AND SHAREHOLDERS’ DEFICIT |
|
|
|
|
|
|
||
Current Liabilities: |
|
|
|
|
|
|
||
Accounts payable |
|
$ |
|
|
$ |
— |
|
|
Accrued expenses |
|
|
|
|
|
|
||
|
|
— |
|
|
|
|
||
Total Current Liabilities |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Deferred underwriting commissions |
|
|
|
|
|
|
||
Total Liabilities |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Commitments and contingencies (Note 6) |
|
|
|
|
|
|
||
Class A ordinary shares subject to possible redemption, |
|
|
|
|
|
|
||
Shareholders’ Deficit: |
|
|
|
|
|
|
||
Preference shares, $ |
|
|
|
|
|
|
||
Class A ordinary shares, $ |
|
|
— |
|
|
|
— |
|
Class B ordinary shares, $ |
|
|
|
|
|
|
||
Additional paid-in capital |
|
|
— |
|
|
|
|
|
Accumulated deficit |
|
|
( |
) |
|
|
( |
) |
Total Shareholders’ Deficit |
|
|
( |
) |
|
|
( |
) |
Total Liabilities, Class A Ordinary Shares Subject to Possible Redemption and Shareholders’ Deficit |
|
$ |
|
|
$ |
|
||
See accompanying notes to the condensed financial statements.
F-24
Table of Contents
TEXAS VENTURES ACQUISITION III CORP
CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
|
|
For the |
|
|
For the |
|
||||||||||
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
|
|
June 30, |
|
|
June 30, |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
EXPENSES |
|
|
|
|
|
|
|
|
|
|
|
|
||||
General and administrative expenses |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
TOTAL EXPENSES |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
OTHER INCOME |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest income earned on investments held in Trust Account |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest income earned on cash held in operating account |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Change in fair value of warrant liability |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
TOTAL OTHER INCOME |
|
|
|
|
|
|
|
|
|
|
|
|
||||
NET INCOME |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic and diluted weighted average shares outstanding, Class A ordinary shares subject to possible redemption |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic and diluted net income per share, Class A ordinary shares subject to possible redemption |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Basic weighted average shares outstanding, Class B non-redeemable ordinary shares |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic net income per share, Class B non-redeemable ordinary shares |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Diluted weighted average shares outstanding, Class B non-redeemable ordinary shares |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Diluted net income per share, Class B non-redeemable ordinary shares |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
See accompanying notes to the condensed financial statements.
F-25
Table of Contents
TEXAS VENTURES ACQUISITION III CORP
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2026
|
|
Class B |
|
|
Additional |
|
|
|
|
|
|
|
||||||||
|
|
Ordinary Shares |
|
|
Paid-In |
|
|
Accumulated |
|
|
Shareholders’ |
|
||||||||
|
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
Deficit |
|
|
Deficit |
|
|||||
Balance, January 1, 2026 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|||
Remeasurement of ordinary shares to redemption value |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Net loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Balance, March 31, 2026 (unaudited) |
|
|
|
|
|
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
||
Remeasurement of ordinary shares to redemption value |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Net income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
Balance, June 30, 2026 (unaudited) |
|
|
|
|
$ |
|
|
$ |
— |
|
|
$ |
( |
) |
|
$ |
( |
) |
||
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025
|
|
Class B |
|
|
Additional |
|
|
|
|
|
|
|
||||||||
|
|
Ordinary Shares |
|
|
Paid-In |
|
|
Accumulated |
|
|
Shareholders’ |
|
||||||||
|
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
Deficit |
|
|
Deficit |
|
|||||
Balance, January 1, 2025 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|||
Net loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Balance, March 31, 2025 (unaudited) |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|||
Forfeiture of Class B ordinary shares |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
— |
|
|
|
— |
|
|
Payment for private placement |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Fair value of public warrants |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Remeasurement of ordinary shares to redemption value |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Offering costs |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Net income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
Balance, June 30, 2025 (unaudited) |
|
|
|
|
$ |
|
|
$ |
— |
|
|
$ |
( |
) |
|
$ |
( |
) |
||
See accompanying notes to the condensed financial statements.
F-26
Table of Contents
TEXAS VENTURES ACQUISITION III CORP
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
|
|
For the Six Months Ended |
|
|
For the Six Months Ended |
|
||
Cash flows from operating activities: |
|
|
|
|
|
|
||
Net income |
|
$ |
|
|
$ |
|
||
Adjustments to reconcile net income to net cash used in operating activities: |
|
|
|
|
|
|
||
Interest income earned on investments held in Trust Account |
|
|
( |
) |
|
|
( |
) |
Change in fair value of warrant liability |
|
|
— |
|
|
|
( |
) |
Changes in current assets and liabilities |
|
|
|
|
|
|
||
Prepaid Expenses |
|
|
|
|
|
( |
) |
|
Deferred offering costs |
|
|
— |
|
|
|
|
|
Accounts Payable |
|
|
|
|
|
— |
|
|
Accrued Expenses |
|
|
|
|
|
|
||
Due to related party |
|
|
( |
) |
|
|
( |
) |
Net cash used in operating activities |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
||
Cash flows from investing activities: |
|
|
|
|
|
|
||
Investment of cash in Trust Account |
|
|
— |
|
|
|
( |
) |
Net cash used in investing activities |
|
|
— |
|
|
|
( |
) |
|
|
|
|
|
|
|
||
Cash flows from financing activities: |
|
|
|
|
|
|
||
Proceeds from the sale of Units |
|
|
— |
|
|
|
|
|
Proceeds from issuance of promissory note - related party |
|
|
— |
|
|
|
|
|
Payment of promissory note - related party |
|
|
— |
|
|
|
( |
) |
Proceeds from sale of private placement warrants |
|
|
— |
|
|
|
|
|
Payment of underwriting fee |
|
|
— |
|
|
|
( |
) |
Payment of offering costs |
|
|
— |
|
|
|
( |
) |
Net cash provided by financing activities |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
||
Net change in cash |
|
|
( |
) |
|
|
|
|
Cash, beginning of the period |
|
|
|
|
|
|
||
Cash, end of the period |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
Supplemental disclosure of cash flow information: |
|
|
|
|
|
|
||
Deferred underwriters’ discount payable charged to additional paid-in capital |
|
$ |
— |
|
|
$ |
|
|
Forfeiture of Class B ordinary shares |
|
$ |
— |
|
|
$ |
|
|
Deferred offering costs included in accrued expenses |
|
$ |
— |
|
|
$ |
|
|
See accompanying notes to the condensed financial statements.
F-27
Table of Contents
TEXAS VENTURES ACQUISITION III CORP
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2026
NOTE 1 - DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS AND GOING CONCERN
Texas Ventures Acquisition III Corp (the “Company”) is a blank check company incorporated as a Cayman Islands exempted company on July 26, 2024. The Company was incorporated for the purpose of effecting a merger, 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.
On April 24, 2025, the Company consummated its Initial Public Offering (“Initial Public Offering” or “IPO”) of
Simultaneously with the closing of the IPO, the Company completed the private sale of
On September 18, 2025, the Company, the Prior Sponsor and the New Sponsor entered into the Purchase Agreement. Pursuant to the Purchase Agreement, the New Sponsor (i) purchased from the Prior Sponsor (a)
As conditions to the closing of the Purchase, all of the then-existing members of the Board of Directors (the “Prior Board”) and then-existing officers of the Company resigned, and the New Sponsor designated a new board of directors and new management team, which were appointed immediately prior to the closing of the Purchase. The New Sponsor also agreed, among other things, to (i) execute a joinder agreement (the “Joinder”) to become a party to the Registration Rights Agreement, and (ii) enter into the Insider Letter with the Company, providing for, among other things, voting obligations and certain transfer restrictions. The Prior Sponsor and the Company, among other things, agreed to cause all parties to the Letter Agreement to, execute a waiver to certain requirements of the Letter Agreement such that the New Sponsor need not execute a joinder or become a party to the Letter Agreement.
In addition to the foregoing, the closing of the Purchase was conditional on, among other things, (i) the termination of all Company related party contracts and certain commercial arrangements, (ii) the payment of all outstanding invoices of the Company by the closing, (iii) the Company holding at least $
F-28
Table of Contents
TEXAS VENTURES ACQUISITION III CORP
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2026
Upon the closing of the Purchase, the New Sponsor became the sponsor of the Company, the new directors and officers designated by the New Sponsor assumed their positions, and, in accordance with the terms of the Joinder to become a party to the Registration Rights Agreement, the New Sponsor became a party to the Registration Rights Agreement.
Transaction costs for the Initial Public Offering amounted to $
On April 24, 2025, the underwriters partially exercised the over-allotment option of
Upon the closing of the Initial Public Offering and the Private Placement, $
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 Warrants, 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
F-29
Table of Contents
TEXAS VENTURES ACQUISITION III CORP
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2026
The Company will provide the holders of the outstanding Public Shares (the “Public Shareholders”) with the opportunity to redeem all or a portion of their Public Shares either (i) in connection with a general meeting called to approve the Business Combination or (ii) 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 (initially anticipated to be $
If the Company seeks shareholder approval of the Business Combination, the Company will proceed with a Business Combination only if the Company receives an ordinary resolution under Cayman Islands law and its Amended and Restated 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 by proxy at the applicable general meeting of the Company, or such other vote as required by law or stock exchange rule. If the Company’s Business Combination is structured as a statutory merger or consolidation with another company under Cayman Islands law, the approval of its Business Combination will also require 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. 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 Amended and Restated 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 New Sponsor has agreed to vote its Founder Shares (as defined in Note 5) and any Public Shares purchased during or after the Initial Public Offering in favor of approving a 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 for or against 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. Additionally, each Public Shareholder may elect to redeem their Public Shares without voting and, if they do vote, irrespective of whether they vote for or against the proposed 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 Amended and Restated 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 Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from redeeming its shares with respect to more than an aggregate of
The Sponsor has agreed (a) to waive its redemption rights with respect to any Founder Shares and Public Shares held by it in connection with the completion of a Business Combination and (b) not to propose an amendment to the Amended and Restated 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
F-30
Table of Contents
TEXAS VENTURES ACQUISITION III CORP
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2026
If the Company has not completed a Business Combination within 18 months from the closing of the Initial Public Offering or during any extended time to consummate a Business Combination beyond 18 months (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 (and subject to lawfully available funds therefor), redeem
The Sponsor has agreed to waive its rights to liquidating distributions from the Trust Account with respect to the Founder Shares it will receive 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. The underwriters have agreed to waive their rights to their deferred underwriting commission (see Note 6) held in the Trust Account in the event the Company does not complete a Business Combination within the Combination Period, and in such event, such amounts will be included with the other funds held in the Trust Account that will be available to fund the redemption of the Public Shares. 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 ($
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) $
Going Concern Considerations
At June 30, 2026, the Company had cash of $
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TEXAS VENTURES ACQUISITION III CORP
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2026
Subsequent to the consummation of the Initial Public Offering, the Company’s liquidity has been satisfied through the net proceeds from the consummation of the Initial Public Offering and the Private Placement held outside of the Trust Account. In addition, 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, provide the Company Working Capital Loans (as defined in Note 5). Management expects the Company to incur significant expenses as a result of identifying and evaluating prospective initial Business Combination candidates, performing due diligence on prospective target businesses, paying for travel expenditures, selecting the target business to merge with or acquire, and structuring, negotiating and consummating the Business Combination. As a result, management has determined that the current liquidity condition of the Company, coupled with the fact that the Company is within one year of mandatory liquidation, raises substantial doubt about the Company’s ability to continue as a going concern. The accompanying unaudited condensed financial statements do not include any adjustments that might result from the outcome of these uncertainties. As such, the accompanying unaudited condensed financial statements have been prepared assuming the Company will continue as a going concern and do not include any adjustments that might result should the Company be required to liquidate.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X of the SEC. Certain information or footnote disclosures normally included in unaudited condensed financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented.
The accompanying unaudited condensed financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K as filed with the SEC on April 15, 2026. The interim results for the three and six months ended June 30, 2026 are not necessarily indicative of the results to be expected for the year ending December 31, 2026 or for any future periods.
Emerging Growth Company
The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act 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
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TEXAS VENTURES ACQUISITION III CORP
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2026
at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements 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 unaudited condensed financial statements 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 unaudited condensed financial statements and the reported amounts of expenses during the reporting periods.
Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the unaudited condensed financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates.
Cash and Cash Equivalents
The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company did not have any cash equivalents as of June 30, 2026 and December 31, 2025.
Offering Costs Associated with the Initial Public Offering
The offering costs consisted of legal, accounting, underwriting and other costs incurred that were directly related to the Initial Public Offering and that were charged to shareholders’ deficit upon the completion of the Initial Public Offering.
The Company complies with the requirements of the ASC 340-10-S99 and SEC Staff Accounting Bulletin Topic 5A, “Expenses of Offering.” Offering costs consist principally of professional and registration fees that are related to the Initial Public Offering. Financial Accounting Standards Board (“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 the Initial Public Offering proceeds from the Public Units between ordinary shares and warrants, using the residual method by allocating the Initial Public Offering proceeds first to assigned value of the warrants and then to the ordinary shares. Offering costs allocated to the Public Shares are charged to temporary equity and offering costs allocated to the Public and Private Placement Warrants are charged to shareholders’ deficit as Public and Private Placement Warrants after management’s evaluation are accounted for under equity treatment. Offering costs allocated the NMSI Private Placement Warrants were charged to the condensed statements of operations as the NMSI Private Placement Warrants after management’s evaluation were accounted for as liabilities prior to the December 31, 2025 amendment to the warrant agreement.
Income Taxes
The Company follows the asset and liability method of accounting for income taxes under ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statements 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. 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
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TEXAS VENTURES ACQUISITION III CORP
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2026
Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were
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 statements.
Investments Held in Trust Account
As of June 30, 2026 and December 31, 2025, the Company had $
Net Income per Ordinary Share
The Company has two classes of shares, Class A ordinary shares and Class B ordinary shares. Income and losses are shared pro rata between the two classes of shares. The Company complies with the accounting and disclosure requirements of ASC Topic 260, “Earnings Per Share”. Net income per share is computed by dividing net income by the weighted average number of ordinary shares outstanding for the period. Accretion associated with redeemable Class A ordinary shares is excluded from earnings per share as the redemption value approximates fair value.
The Company has not considered the effect of the Public Warrants in the calculation of diluted net income per share, since the exercise of such warrants is contingent upon the occurrence of future events and the inclusion of such warrants would be anti-dilutive.
For diluted earnings per share, the Class B non-redeemable ordinary shares subject to forfeiture are included in the calculation of total diluted shares at the beginning of the interim period in which the contingency was resolved. For basic earnings per share, the forfeited Class B non-redeemable ordinary shares are considered forfeited on the date of forfeiture.
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TEXAS VENTURES ACQUISITION III CORP
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2026
The following tables reflect the calculation of basic net income per ordinary share for the three and six months ended June 30, 2026 and 2025:
|
|
For the |
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|
For the |
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||
|
|
Six Months Ended |
|
|
Six Months Ended |
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||
|
|
June 30, |
|
|
June 30, |
|
||
|
|
2026 |
|
|
2025 |
|
||
Class A ordinary shares subject to possible redemption |
|
|
|
|
|
|
||
Numerator: Allocation of net income, basic |
|
$ |
|
|
$ |
|
||
Denominator: Basic weighted average shares outstanding |
|
|
|
|
|
|
||
Basic net income per Class A ordinary share subject to possible redemption |
|
$ |
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|
$ |
|
||
Class B non-redeemable ordinary shares |
|
|
|
|
|
|
||
Numerator: Allocation of net income, basic |
|
$ |
|
|
$ |
|
||
Denominator: Basic weighted average shares outstanding |
|
|
|
|
|
|
||
Basic net income per Class B non-redeemable ordinary share |
|
$ |
|
|
$ |
|
||
|
|
For the |
|
|
For the |
|
||
|
|
Three Months Ended |
|
|
Three Months Ended |
|
||
|
|
June 30, |
|
|
June 30, |
|
||
|
|
2026 |
|
|
2025 |
|
||
Class A ordinary shares subject to possible redemption |
|
|
|
|
|
|
||
Numerator: Allocation of net income, basic |
|
$ |
|
|
$ |
|
||
Denominator: Basic weighted average shares outstanding |
|
|
|
|
|
|
||
Basic net income per Class A ordinary share subject to possible redemption |
|
$ |
|
|
$ |
|
||
Class B non-redeemable ordinary shares |
|
|
|
|
|
|
||
Numerator: Allocation of net income, basic |
|
$ |
|
|
$ |
|
||
Denominator: Basic weighted average shares outstanding |
|
|
|
|
|
|
||
Basic net income per Class B non-redeemable ordinary share |
|
$ |
|
|
$ |
|
||
The following tables reflect the calculation of diluted net income per ordinary share for the three and six months ended June 30, 2026 and 2025:
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|
For the |
|
|
For the |
|
||
|
|
Six Months Ended |
|
|
Six Months Ended |
|
||
|
|
June 30, |
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June 30, |
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||
|
|
2026 |
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|
2025 |
|
||
Class A ordinary shares subject to possible redemption |
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|
|
|
|
|
||
Numerator: Allocation of net income, diluted |
|
$ |
|
|
$ |
|
||
Denominator: Diluted weighted average shares outstanding |
|
|
|
|
|
|
||
Diluted net income per Class A ordinary share subject to possible redemption |
|
$ |
|
|
$ |
|
||
Class B non-redeemable ordinary shares |
|
|
|
|
|
|
||
Numerator: Allocation of net income, diluted |
|
$ |
|
|
$ |
|
||
Denominator: Diluted weighted average shares outstanding |
|
|
|
|
|
|
||
Diluted net income per Class B non-redeemable ordinary share |
|
$ |
|
|
$ |
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||
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TEXAS VENTURES ACQUISITION III CORP
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2026
|
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For the |
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|
For the |
|
||
|
|
Three Months Ended |
|
|
Three Months Ended |
|
||
|
|
June 30, |
|
|
June 30, |
|
||
|
|
2026 |
|
|
2025 |
|
||
Class A ordinary shares subject to possible redemption |
|
|
|
|
|
|
||
Numerator: Allocation of net income, diluted |
|
$ |
|
|
$ |
|
||
Denominator: Diluted weighted average shares outstanding |
|
|
|
|
|
|
||
Diluted net income per Class A ordinary share subject to possible redemption |
|
$ |
|
|
$ |
|
||
Class B ordinary shares |
|
|
|
|
|
|
||
Numerator: Allocation of net income, diluted |
|
$ |
|
|
$ |
|
||
Denominator: Diluted weighted average shares outstanding |
|
|
|
|
|
|
||
Diluted net income per Class B non-redeemable ordinary share |
|
$ |
|
|
$ |
|
||
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 limit. 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.
Fair Value of Financial Instruments
The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC 820, “Fair Value Measurement,” approximates the carrying amounts represented in the condensed balance sheets, primarily due to their short-term nature.
Fair Value Measurements
Fair value is defined as the price that would be received for sale of an asset or paid to transfer 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:
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.
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TEXAS VENTURES ACQUISITION III CORP
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2026
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 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 condensed statements 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 sheets 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.
Warrant Instruments
The Company accounts for the Public Warrants issued in connection with the Initial Public Offering, the Private Placement Warrants and the NMSI Private Placement Warrants in accordance with the guidance contained in FASB ASC 815, “Derivatives and Hedging”. Under ASC 815-40, the Public Warrants and the Private Placement Warrants meet the criteria for equity treatment and as such are recorded in shareholders’ deficit. The NMSI Private Placement Warrants did not meet the criteria for equity treatment and as such were recorded as a liability and remeasured each period with changes recorded in the condensed statements of operations. If the Public and Private Placement Warrants no longer meet the criteria for equity treatment, they will record as a liability and be remeasured each period with changes recorded in the condensed statements of operations. On December 31, 2025, the Company issued an amendment to the warrant agreement that removed the settlement provision that precluded the NMSI Private Placement Warrants from equity treatment. As a result of this amendment, the Company determined that the NMSI Private Placement Warrants met the criteria for equity treatment and as such were reclassified to additional paid-in capital.
Class A Ordinary Shares Subject to 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 ASC 480-10-S99, the Company classifies Public Shares subject to redemption outside of permanent equity as the redemption provisions are not solely within the control of the Company. The Company recognizes changes in redemption value immediately as they occur and will adjust the carrying value of redeemable shares to equal the redemption value at the end of each reporting period. Immediately upon the closing of the Initial Public Offering, the Company recognized the accretion from initial book value to redemption amount value. The change in the carrying value of redeemable shares will result in charges against additional paid-in capital (to the extent available) and accumulated deficit. Accordingly, as of June 30, 2026, TVA III 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 condensed balance sheets.
Gross proceeds |
|
$ |
|
|
Less: Proceeds allocated to public warrants |
|
|
( |
) |
Less: Class A ordinary share issuance costs |
|
|
( |
) |
Add: Accretion of carrying value to redemption value |
|
|
|
|
Add: Remeasurement of carrying value to redemption value |
|
|
|
|
Class A ordinary shares subject to possible redemption, December 31, 2025 |
|
|
|
|
Add: Remeasurement of carrying value to redemption value |
|
|
|
|
Class A ordinary shares subject to possible redemption, March 31, 2026 |
|
|
|
|
Add: Remeasurement of carrying value to redemption value |
|
|
|
|
Class A ordinary shares subject to possible redemption, June 30, 2026 |
|
$ |
|
F-37
Table of Contents
TEXAS VENTURES ACQUISITION III CORP
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2026
Recent Accounting Standards
In November 2024, the FASB issued ASU 2024-03, “Disaggregation of Income Statement Expenses,” which requires disclosures of certain disaggregated income statement expense captions into specified categories within the footnotes to the financial statements. The requirements of the ASU are effective for annual periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027, with early adoption permitted. The requirements will be applied prospectively with the option for retrospective application. The Company is currently evaluating the impact ASU 2024-03 will have on its financial statements.
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 statements.
NOTE 3 - INITIAL PUBLIC OFFERING
Pursuant to the Initial Public Offering on April 24, 2025, the Company sold
NOTE 4 - PRIVATE PLACEMENT
Simultaneously with the consummation of the Initial Public Offering on April 24, 2025 and the sale of the Public Units, the Company consummated the Private Placement of Private Placement Warrants. The Prior Sponsor, CCM and Clear Street purchased an aggregate of
NOTE 5 - RELATED PARTIES
Founder Shares
On August 1, 2024, the Prior Sponsor received
On April 24, 2025,
On September 18, 2025, pursuant to the Purchase Agreement, the Prior Sponsor sold
F-38
Table of Contents
TEXAS VENTURES ACQUISITION III CORP
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2026
The New Sponsor has agreed not to transfer or sell any of their Founder Shares and any Class A ordinary shares issuable upon conversion thereof until the closing of the Company’s initial Business Combination; except to affiliates, members or partners of the Sponsor or their affiliates, or any employees of such affiliates, provided that in each case the transferee agrees in writing to be bound by the terms of the Insider Letter. In connection with the Purchase, the parties also entered into a joinder to and amendment of the Registration Rights Agreement that removed lock‑up obligations under that agreement for the New Sponsor.
General and Administrative Services
Commencing on the effective date of the Initial Public Offering on April 24, 2025 and through the earlier of the Company’s consummation of a Business Combination or its liquidation, the Company has agreed to pay the Sponsor or an affiliate thereof a monthly fee of $
CEO Advisory Agreement
Effective October 2025, the Company agreed to pay a monthly advisory fee of $
Promissory Notes - Related Party
On August 1, 2024, the Prior Sponsor issued an unsecured promissory note (the “Promissory Note”) to the Company, pursuant to which the Company may borrow up to an aggregate principal amount of up to $
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 (“Working Capital Loans”). Such Working Capital Loans would be evidenced by promissory notes. The notes may be repaid upon completion of a Business Combination, without interest, or, at the lender’s discretion, up to $
F-39
Table of Contents
TEXAS VENTURES ACQUISITION III CORP
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2026
Due to Related Party
On December 31, 2025, the Sponsor paid for certain expenses on behalf of the Company $
NOTE 6 - COMMITMENTS AND CONTINGENCIES
Registration Rights
The holders of the Founder Shares, Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans (and any ordinary shares issuable upon the exercise of the Private Placement Warrants or warrants issued upon conversion of the Working Capital Loans and upon conversion of the Founder Shares) will be entitled to registration rights pursuant to a registration rights agreement to be signed prior to or on the effective date of Initial Public Offering requiring the Company to register such securities for resale (in the case of the Founder Shares, only after conversion to TVA III Class A Ordinary Shares). 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 piggyback 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. However, the registration rights agreement provides that the Company will not be required to effect or permit any registration or cause any registration statement to become effective until the securities covered thereby are released from their lockup restrictions. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
Risks and Uncertainties
The Company’s results of operations and its ability to complete an initial Business Combination may be adversely affected by various factors that could cause economic uncertainty and volatility in the financial markets, many of which are beyond the Company’s control. The Company’s results of operations and its ability to consummate an initial Business Combination could be impacted by, among other things, various social and political circumstances in the U.S. and around the world (including wars and other forms of conflict, including rising trade tensions between the United States and China, and other uncertainties regarding actual and potential shifts in the U.S. and foreign, trade, economic and other policies with other countries, terrorist acts, security operations and catastrophic events such as fires, floods, earthquakes, tornadoes, hurricanes and global health epidemics) that may contribute to increased market volatility and economic uncertainties or deterioration in the U.S. and worldwide. Specifically, the rising conflict between Russia and Ukraine, and the rising conflicts in the Middle East, and resulting market volatility could adversely affect the Company’s ability to complete a Business Combination. In response to the conflict between Russia and Ukraine, the U.S. and other countries have imposed sanctions or other restrictive actions against Russia. Any of the above factors, including sanctions, export controls, tariffs, trade wars and other governmental actions, could have a material adverse effect on the Company’s ability to complete a Business Combination and the value of the Company’s securities. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Underwriting Agreement
The Company granted the underwriters a
F-40
Table of Contents
TEXAS VENTURES ACQUISITION III CORP
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2026
The underwriters were paid a cash underwriting discount of $
NOTE 7 - SHAREHOLDERS’ DEFICIT
Preference Shares - The Company is authorized to issue
Class A Ordinary Shares - The Company is authorized to issue
Class B Ordinary Shares - The Company is authorized to issue
Holders of ordinary shares will vote together as a single class on all matters submitted to a vote of shareholders except as otherwise required by law. In connection with the initial Business Combination, the Company may enter into a shareholders agreement or other arrangements 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.
The Founder Shares are designated as TVA III Class B Ordinary Shares and will automatically convert at a ratio of one-for-one into TVA III Class A Ordinary Shares (which such TVA III Class A Ordinary Shares delivered 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 the initial Business Combination.
NOTE 8 - WARRANTS
As of June 30, 2026 and December 31, 2025, there were
On September 18, 2025, the Company, the Prior Sponsor and the New Sponsor entered into the Purchase Agreement. Pursuant to the Purchase Agreement, the New Sponsor (i) purchased from the Prior Sponsor (a)
F-41
Table of Contents
TEXAS VENTURES ACQUISITION III CORP
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2026
On December 31, 2025, the Company issued an amendment to the warrant agreement that removed the settlement provision that precluded the NMSI Private Placement Warrants from equity treatment. As a result of this amendment, the Company determined that the NMSI Private Placement Warrants met the criteria for equity treatment and as such were reclassified to additional paid-in capital.
Public Warrants may only be exercised for a whole number of shares. No fractional warrants will be issued upon separation of the Public Units and only whole warrants will trade. The Public Warrants will become exercisable
The Company will not be obligated to deliver any Class A ordinary share pursuant to the exercise of a Public Warrant and will have no obligation to settle such Public Warrant exercise unless a registration statement under the Securities Act covering the issuance of the TVA III Class A Ordinary Shares issuable upon exercise of the warrants is then effective and a current prospectus relating to those TVA III Class A Ordinary Shares is available, subject to the Company satisfying its obligations with respect to registration, or a valid exemption from registration is available. No warrant will be exercisable for cash or on a cashless basis, and the Company will not be obligated to issue any shares to holders seeking to exercise their warrants, unless the issuance of the shares upon such exercise is registered or qualified under the securities laws of the state of residence of the exercising holder, or an exemption from registration is available.
The Company has agreed that as soon as practicable, but in no event later than 20 business days after the closing of a Business Combination, the Company will use its commercially reasonable efforts to file, and within
Redemption of Warrants. When the price per Class A ordinary share equals or exceeds $
If and when the warrants become redeemable by the Company, the Company may exercise its redemption right even if it is unable to register or qualify the underlying securities for sale under all applicable state securities laws.
F-42
Table of Contents
TEXAS VENTURES ACQUISITION III CORP
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2026
In addition, if (x) the Company issues additional TVA III Class A Ordinary Shares or equity-linked securities for capital raising purposes in connection with the closing of its initial Business Combination at less than $
The Private Placement Warrants are identical to the Public Warrants underlying the Public Units sold in the Initial Public Offering, except that the Private Placement Warrants and the TVA III Class A Ordinary Shares issuable upon the exercise of the Private Placement Warrants will not be transferable, assignable or saleable until
NOTE 9 - FAIR VALUE MEASUREMENTS
The following table presents information about the Company’s assets that are measured at fair value at June 30, 2026 and December 31, 2025 and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value.
|
|
|
|
June 30, |
|
|
December 31, |
|
||
Description |
|
Level |
|
2026 |
|
|
2025 |
|
||
Assets: |
|
|
|
|
|
|
|
|
||
Investments held in Trust Account |
|
1 |
|
$ |
|
|
$ |
|
||
Upon consummation of the Initial Public Offering through December 31, 2025, the NMSI Private Placement Warrants were accounted for as a liability in accordance with ASC 815-40 and were presented within liabilities in the balance sheets. The Warrant liabilities were measured at fair value. On December 31, 2025, the Company issued an amendment to the warrant agreement that removed the settlement provision that precluded the NMSI Private Placement Warrants from equity treatment. As a result of this amendment, the Company determined that the NMSI Private Placement Warrants meet the criteria for equity treatment and as such were fair valued as of the date of the amendment and subsequently reclassified from warrant liabilities to additional paid-in capital. The Company fully realized the gain on the change in fair value of the warrant liability as of December 31, 2025.
The table below provides a summary of the changes in fair value of all financial assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the six months ended June 30, 2025:
|
|
Fair Value |
|
|
|
|
Measurement |
|
|
|
|
Using Level 3 |
|
|
|
|
Inputs Total |
|
|
Balance, December 31, 2024 |
|
$ |
— |
|
Initial fair value |
|
|
|
|
Change in fair value of derivative warrant liabilities |
|
|
|
|
Balance, June 30, 2025 |
|
$ |
|
|
F-43
Table of Contents
TEXAS VENTURES ACQUISITION III CORP
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2026
The Company used a Monte Carlo simulation model to value the Public Warrants and NMSI Private Placement Warrants at April 24, 2025. As a result of the model, the Company marked the
|
|
April 24, |
|
|
|
|
2025 |
|
|
Public Warrants |
|
$ |
|
|
NMSI Private Placement Warrants |
|
|
|
|
The Company used the following assumptions to value the Public Warrants and NMSI Private Placement Warrants at April 24, 2025.
Volatility |
|
|
% |
|
Risk-Free Rate |
|
|
% |
|
Dividends |
|
$ |
— |
|
Market Adjustment |
|
|
% |
|
Stock Price |
|
$ |
|
|
Weighted Term (years) |
|
|
|
The Company used a Monte Carlo simulation model with the following assumptions to value the NMSI Private Placement Warrants at December 31, 2025.
Volatility |
|
|
% |
|
Risk Free Rate |
|
|
% |
|
Dividends |
|
$ |
— |
|
Market Adjustment |
|
|
% |
|
Stock Price |
|
$ |
|
|
Weighted Term (years) |
|
|
|
NOTE 10 - SEGMENT INFORMATION
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 , 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
F-44
Table of Contents
TEXAS VENTURES ACQUISITION III CORP
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2026
|
|
June 30, |
|
|
December 31, |
|
||
|
|
2026 |
|
|
2025 |
|
||
Cash |
|
$ |
|
|
$ |
|
||
Investments held in Trust Account |
|
$ |
|
|
$ |
|
||
|
|
For the |
|
|||||
|
|
Six Months Ended |
|
|||||
|
|
June 30, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
General and administrative expenses |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
Interest income earned on investments held in Trust Account |
|
$ |
|
|
$ |
|
||
|
|
For the Three Months Ended |
|
|||||
|
|
June 30, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
General and administrative expenses |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
Interest income earned on investments held in Trust Account |
|
$ |
|
|
$ |
|
||
General and administrative expenses are reviewed and monitored by the CODM to manage and forecast cash to ensure enough capital is available to complete a Business Combination or similar transaction within the Business Combination period. The CODM also evaluates general and administrative expenses to manage, maintain and enforce all contractual agreements to ensure costs are aligned with all agreements and budget. General and administrative expenses, as reported on the condensed statements of operations, are the significant segment expenses provided to the CODM on a regular basis.
Interest income earned on investments held in Trust Account are reviewed and monitored by the CODM to forecast amounts held in the Trust Account that can be utilized to consummate an initial Business Combination. The CODM also evaluates this metric to ensure the investments are generating an appropriate rate of return.
All other segment items included in net income are reported on the condensed statements of operations and described within their respective disclosures.
NOTE 11 - SUBSEQUENT EVENTS
The Company evaluated subsequent events and transactions that occurred after the condensed balance sheet date up to the date that the accompanying unaudited condensed financial statements were issued. Based upon this review, the Company did not identify any subsequent events that would have required adjustment or disclosure in the accompanying unaudited condensed financial statements.
F-45
Table of Contents
Index to PlusAI Consolidated Financial Statements
|
Page |
Audited Consolidated Financial Statements: |
|
Report of Independent Registered Public Accounting Firm - (PCAOB Firm ID#34) |
F-47 |
Consolidated Balance Sheets as of December 31, 2025 and 2024 |
F-48 |
Consolidated Statements of Operations and Comprehensive Loss for the years ended December 31, 2025 and 2024 |
F-49 |
Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Deficit for the years ended December 31, 2025 and 2024 |
F-50 |
Consolidated Statements of Cash Flows for the years ended December 31, 2025 and 2024 |
F-51 |
Notes to Consolidated Financial Statements |
F-52 |
Unaudited Condensed Consolidated Financial Statements: |
|
Unaudited Consolidated Balance Sheets as of June 30, 2026 and December 31, 2025 |
F-86 |
Unaudited Consolidated Statements of Operations and Comprehensive Loss for the six months ended June 30, 2026 and 2025 |
F-87 |
Unaudited Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Deficit for the six months ended June 30, 2026 and 2025 |
F-88 |
Unaudited Consolidated Statements of Cash Flows for the six months ended June 30, 2026 and 2025 |
F-89 |
Notes to Unaudited Consolidated Financial Statements |
F-90 |
F-46
Table of Contents
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the stockholders and the Board of Directors of Plus Automation, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Plus Automation, Inc. and subsidiaries (the “Company”) as of December 31, 2025 and 2024, the related consolidated statements of operations and comprehensive loss, redeemable convertible preferred stock and stockholders' deficit, and cash flows, for each of the two years in the period ended December 31, 2025, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.
Going Concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has suffered recurring net losses and negative cash flow from operations. Additionally, certain simple agreements for future equity became optionally redeemable for cash by the holders beginning on January 1, 2025. These conditions raise substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. 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 audits 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 statements are 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 audits, 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 audits included performing procedures to assess the risks of material misstatement of the financial statements, 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 statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
/s/ Deloitte & Touche LLP
San Jose, California
March 31, 2026
We have served as the Company's auditor since 2025.
F-47
Table of Contents
PLUS AUTOMATION, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
|
|
As of December 31, |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
Assets |
|
|
|
|
|
|
||
Current assets: |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
23,977 |
|
|
$ |
49,754 |
|
Short-term marketable securities |
|
|
171 |
|
|
|
454 |
|
Accounts and other receivables |
|
|
118 |
|
|
|
1,436 |
|
Deferred offering costs |
|
|
8,011 |
|
|
|
— |
|
Prepaid expenses and other current assets |
|
|
5,254 |
|
|
|
3,607 |
|
Total current assets |
|
|
37,531 |
|
|
|
55,251 |
|
Long-term investment |
|
|
— |
|
|
|
29,295 |
|
Property and equipment, net |
|
|
2,417 |
|
|
|
2,800 |
|
Operating lease right-of-use assets |
|
|
489 |
|
|
|
2,580 |
|
Other noncurrent assets |
|
|
— |
|
|
|
298 |
|
Total assets |
|
$ |
40,437 |
|
|
$ |
90,224 |
|
Liabilities, Redeemable Convertible Preferred Stock, and Stockholders’ Deficit |
|
|
|
|
|
|
||
Current liabilities: |
|
|
|
|
|
|
||
Accounts payable |
|
$ |
8,534 |
|
|
$ |
2,092 |
|
Advance payments |
|
|
— |
|
|
|
122 |
|
Operating lease liabilities, current |
|
|
587 |
|
|
|
2,374 |
|
Accrued compensation and benefits |
|
|
2,284 |
|
|
|
2,185 |
|
Discounted options liability |
|
|
1,986 |
|
|
|
808 |
|
Simple agreements for future equity, current |
|
|
25,561 |
|
|
|
24,756 |
|
Accrued and other current liabilities |
|
|
2,233 |
|
|
|
1,977 |
|
Total current liabilities |
|
|
41,185 |
|
|
|
34,314 |
|
Operating lease liabilities, noncurrent |
|
|
— |
|
|
|
561 |
|
Warrant liabilities |
|
|
18,302 |
|
|
|
13,242 |
|
Simple agreements for future equity, noncurrent |
|
|
33,456 |
|
|
|
2,780 |
|
Share-based awards liabilities |
|
|
215 |
|
|
|
451 |
|
Other noncurrent liabilities |
|
|
142 |
|
|
|
76 |
|
Total liabilities |
|
|
93,300 |
|
|
|
51,424 |
|
|
|
|
|
|
|
|
||
Commitments and contingencies (Note 5) |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Redeemable convertible preferred stock, $0.000002 par value; 1,953,124,877 shares authorized; 952,548,647 shares issued and outstanding as of December 31, 2025 and 2024; aggregate minimum liquidation preference of $601,725 and $547,045, at December 31, 2025, and 2024, respectively |
|
|
576,371 |
|
|
|
517,790 |
|
Stockholders’ Deficit: |
|
|
|
|
|
|
||
Class A common stock, $0.000002 par value; 22,718,203,023 shares authorized; 130,446,121 and 91,043,276 shares issued and outstanding as of December 31, 2025 and 2024, respectively |
|
|
— |
|
|
|
— |
|
Class B common stock, $0.000002 par value; 328,672,100 shares authorized, issued, and outstanding as of December 31, 2025 and 2024 |
|
|
1 |
|
|
|
1 |
|
Additional paid-in capital |
|
|
— |
|
|
|
— |
|
Accumulated deficit |
|
|
(628,997 |
) |
|
|
(478,976 |
) |
Accumulated other comprehensive loss |
|
|
(238 |
) |
|
|
(15 |
) |
Total stockholders’ deficit |
|
|
(629,234 |
) |
|
|
(478,990 |
) |
Total liabilities, redeemable convertible preferred stock, and stockholders’ deficit |
|
$ |
40,437 |
|
|
$ |
90,224 |
|
The accompanying notes are an integral part of these consolidated financial statements.
F-48
Table of Contents
PLUS AUTOMATION, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(In thousands, except share and per share data)
|
|
For the Year Ended December 31, |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
Revenue |
|
$ |
67 |
|
|
$ |
132 |
|
Operating expenses: |
|
|
|
|
|
|
||
Research and development |
|
|
51,912 |
|
|
|
39,745 |
|
Sales, marketing, general and administrative |
|
|
20,154 |
|
|
|
18,043 |
|
Total operating expenses |
|
|
72,066 |
|
|
|
57,788 |
|
Loss from operations |
|
|
(71,999 |
) |
|
|
(57,656 |
) |
Other income (expense): |
|
|
|
|
|
|
||
Interest income |
|
|
715 |
|
|
|
3,122 |
|
Interest expense |
|
|
(37 |
) |
|
|
(32 |
) |
Other expense, net |
|
|
(432 |
) |
|
|
(363 |
) |
Loss from investments, net |
|
|
(187 |
) |
|
|
(1,590 |
) |
Impairment of long-term investment |
|
|
(9,295 |
) |
|
|
(1,326 |
) |
Change in fair value of simple agreements for future equity |
|
|
(7,046 |
) |
|
|
(849 |
) |
Change in fair value of warrant liabilities |
|
|
(5,060 |
) |
|
|
(2,430 |
) |
Total other expense, net |
|
|
(21,342 |
) |
|
|
(3,468 |
) |
Loss before income taxes |
|
|
(93,341 |
) |
|
|
(61,124 |
) |
Income tax expense |
|
|
(69 |
) |
|
|
— |
|
Net loss |
|
$ |
(93,410 |
) |
|
$ |
(61,124 |
) |
Accretion of redeemable convertible preferred stock to redemption value |
|
|
(58,581 |
) |
|
|
(29,826 |
) |
Net loss attributable to common stockholders |
|
$ |
(151,991 |
) |
|
$ |
(90,950 |
) |
Net loss per common share – basic and diluted |
|
$ |
(0.33 |
) |
|
$ |
(0.20 |
) |
Weighted-average shares outstanding – basic and diluted |
|
|
466,389,318 |
|
|
|
456,995,820 |
|
|
|
|
|
|
|
|
||
Comprehensive loss: |
|
|
|
|
|
|
||
Net loss |
|
$ |
(93,410 |
) |
|
$ |
(61,124 |
) |
Other comprehensive loss: |
|
|
|
|
|
|
||
Foreign currency translation adjustment |
|
|
(223 |
) |
|
|
85 |
|
Comprehensive loss |
|
$ |
(93,633 |
) |
|
$ |
(61,039 |
) |
The accompanying notes are an integral part of these consolidated financial statements.
F-49
Table of Contents
PLUS AUTOMATION, INC.
CONSOLIDATED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT
(In thousands, except share data)
|
|
Redeemable Convertible Preferred Stock |
|
|
|
Common Stock |
|
|
Additional Paid |
|
|
Accumulated |
|
|
Accumulated |
|
|
Total |
|
||||||||||||||
|
|
Shares |
|
|
Amount |
|
|
|
Shares |
|
|
Amount |
|
|
in Capital |
|
|
Loss |
|
|
Deficit |
|
|
Deficit |
|
||||||||
Balance as of December 31, 2023 |
|
|
952,548,647 |
|
|
$ |
487,964 |
|
|
|
|
418,053,596 |
|
|
$ |
1 |
|
|
$ |
— |
|
|
$ |
(100 |
) |
|
$ |
(392,318 |
) |
|
$ |
(392,417 |
) |
Accretion of redeemable convertible preferred stock to redemption value |
|
|
— |
|
|
|
29,826 |
|
|
|
|
— |
|
|
|
— |
|
|
|
(4,292 |
) |
|
|
— |
|
|
|
(25,534 |
) |
|
|
(29,826 |
) |
Stock option exercises |
|
|
— |
|
|
|
— |
|
|
|
|
1,029,426 |
|
|
|
— |
|
|
|
71 |
|
|
|
— |
|
|
|
— |
|
|
|
71 |
|
Release of vested restricted stock units |
|
|
— |
|
|
|
— |
|
|
|
|
1,182,813 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Shares withheld to settle tax obligation upon release of restricted stock units |
|
|
— |
|
|
|
— |
|
|
|
|
(550,459 |
) |
|
|
— |
|
|
|
(88 |
) |
|
|
— |
|
|
|
— |
|
|
|
(88 |
) |
Reclassification of liability-classified stock options and restricted stock units to equity-classified |
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
1,305 |
|
|
|
— |
|
|
|
— |
|
|
|
1,305 |
|
Stock-based compensation |
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
3,004 |
|
|
|
— |
|
|
|
— |
|
|
|
3,004 |
|
Foreign currency translation adjustment |
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
85 |
|
|
|
— |
|
|
|
85 |
|
Net loss |
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(61,124 |
) |
|
|
(61,124 |
) |
Balance as of December 31, 2024 |
|
|
952,548,647 |
|
|
$ |
517,790 |
|
|
|
|
419,715,376 |
|
|
$ |
1 |
|
|
$ |
— |
|
|
$ |
(15 |
) |
|
$ |
(478,976 |
) |
|
$ |
(478,990 |
) |
Accretion of redeemable convertible preferred stock to redemption value |
|
|
— |
|
|
|
58,581 |
|
|
|
|
— |
|
|
|
— |
|
|
|
(1,970 |
) |
|
|
— |
|
|
|
(56,611 |
) |
|
|
(58,581 |
) |
Stock option exercises |
|
|
— |
|
|
|
— |
|
|
|
|
43,036,819 |
|
|
|
— |
|
|
|
1,948 |
|
|
|
— |
|
|
|
— |
|
|
|
1,948 |
|
Repurchase of restricted common stock awards |
|
|
— |
|
|
|
— |
|
|
|
|
(3,956,608 |
) |
|
|
— |
|
|
|
(1,988 |
) |
|
|
— |
|
|
|
— |
|
|
|
(1,988 |
) |
Release of vested restricted stock units |
|
|
— |
|
|
|
— |
|
|
|
|
617,841 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Shares withheld to settle tax obligation upon release of restricted stock units |
|
|
— |
|
|
|
— |
|
|
|
|
(295,207 |
) |
|
|
— |
|
|
|
(72 |
) |
|
|
— |
|
|
|
— |
|
|
|
(72 |
) |
Reclassification of liability-classified stock options and restricted stock units to equity-classified |
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
681 |
|
|
|
— |
|
|
|
— |
|
|
|
681 |
|
Stock-based compensation |
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
1,401 |
|
|
|
— |
|
|
|
— |
|
|
|
1,401 |
|
Foreign currency translation adjustment |
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(223 |
) |
|
|
— |
|
|
|
(223 |
) |
Net loss |
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(93,410 |
) |
|
|
(93,410 |
) |
Balance as of December 31, 2025 |
|
|
952,548,647 |
|
|
$ |
576,371 |
|
|
|
|
459,118,221 |
|
|
$ |
1 |
|
|
$ |
— |
|
|
$ |
(238 |
) |
|
$ |
(628,997 |
) |
|
$ |
(629,234 |
) |
The accompanying notes are an integral part of these consolidated financial statements.
F-50
Table of Contents
PLUS AUTOMATION, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
|
|
For The Year Ended December 31, |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
Cash flows from operating activities: |
|
|
|
|
|
|
||
Net loss |
|
$ |
(93,410 |
) |
|
$ |
(61,124 |
) |
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
|
||
Depreciation and amortization |
|
|
1,599 |
|
|
|
2,463 |
|
Receipt of accrued interest on short-term marketable securities |
|
|
(13 |
) |
|
|
(16 |
) |
Unrealized loss on short-term marketable securities |
|
|
187 |
|
|
|
1,590 |
|
Unrealized foreign exchange, net |
|
|
28 |
|
|
|
(25 |
) |
Stock-based compensation |
|
|
1,830 |
|
|
|
4,080 |
|
Non-cash lease expense |
|
|
2,092 |
|
|
|
2,082 |
|
Change in fair value of warrant liabilities |
|
|
5,060 |
|
|
|
2,430 |
|
Change in fair value of simple agreements for future equity |
|
|
7,046 |
|
|
|
849 |
|
Impairment of long-term investment |
|
|
9,295 |
|
|
|
1,326 |
|
Disposal (gain) loss of property and equipment |
|
|
(106 |
) |
|
|
3 |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
||
Accounts and other receivables |
|
|
1,318 |
|
|
|
4,292 |
|
Prepaid expenses and other current assets |
|
|
353 |
|
|
|
(468 |
) |
Other noncurrent assets |
|
|
298 |
|
|
|
1,169 |
|
Accounts payable |
|
|
335 |
|
|
|
805 |
|
Discounted options liability |
|
|
1,178 |
|
|
|
181 |
|
Accrued and other liabilities |
|
|
(598 |
) |
|
|
(558 |
) |
Accrued compensation and benefits |
|
|
99 |
|
|
|
107 |
|
Operating lease liabilities |
|
|
(2,348 |
) |
|
|
(2,276 |
) |
Advanced payments |
|
|
(122 |
) |
|
|
(1,156 |
) |
Net cash used in operating activities |
|
|
(65,879 |
) |
|
|
(44,246 |
) |
Cash flows from investing activities: |
|
|
|
|
|
|
||
Sale of long-term investment |
|
|
18,000 |
|
|
|
— |
|
Purchases of property and equipment |
|
|
(1,524 |
) |
|
|
(941 |
) |
Proceeds from sales of property and equipment |
|
|
332 |
|
|
|
— |
|
Purchases of short-term marketable securities |
|
|
(557 |
) |
|
|
(508 |
) |
Maturities of short-term marketable securities |
|
|
665 |
|
|
|
260 |
|
Net cash provided by (used in) investing activities |
|
|
16,916 |
|
|
|
(1,189 |
) |
Cash flows from financing activities: |
|
|
|
|
|
|
||
Proceeds from exercise of stock options |
|
|
1,948 |
|
|
|
71 |
|
Repurchase of restricted common stock awards |
|
|
(1,988 |
) |
|
|
— |
|
Tax withholding payments for net share-settled restricted stock units |
|
|
(72 |
) |
|
|
(88 |
) |
Cash received for simple agreements for future equity |
|
|
24,435 |
|
|
|
16,687 |
|
Payment of deferred offering costs |
|
|
(914 |
) |
|
|
— |
|
Net cash provided by financing activities |
|
|
23,409 |
|
|
|
16,670 |
|
Net decrease in cash and cash equivalents |
|
|
(25,554 |
) |
|
|
(28,765 |
) |
Effect of exchange rate changes on cash and cash equivalents |
|
|
(223 |
) |
|
|
84 |
|
Cash and cash equivalents at beginning of period |
|
|
49,754 |
|
|
|
78,435 |
|
Cash and cash equivalents at end of period |
|
$ |
23,977 |
|
|
$ |
49,754 |
|
Supplemental disclosures |
|
|
|
|
|
|
||
Cash paid for interest |
|
$ |
38 |
|
|
$ |
32 |
|
Cash paid for taxes |
|
$ |
2 |
|
|
$ |
185 |
|
Supplemental disclosures for noncash investing and financing activities |
|
|
|
|
|
|
||
Accretion of redeemable convertible preferred stock to redemption value |
|
$ |
58,581 |
|
|
$ |
29,826 |
|
Other receivables obtained in exchange for sale of long-term investment |
|
$ |
2,000 |
|
|
$ |
— |
|
Purchase of property and equipment included in accounts payable |
|
$ |
— |
|
|
$ |
82 |
|
Deferred offering costs included in accounts payable and accrued and other liabilities |
|
$ |
7,097 |
|
|
$ |
— |
|
Reclassification of liability-classified stock options and restricted stock units to equity-classified |
|
$ |
681 |
|
|
$ |
1,305 |
|
The accompanying notes are an integral part of these consolidated financial statements.
F-51
Table of Contents
PLUS AUTOMATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2025 AND 2024
1. Organization and Nature of Operations
Nature of Business
Plus Automation, Inc. (“Plus Automation”) was incorporated in Delaware in March 2023 and is headquartered in California. Plus Automation and its consolidated subsidiaries are collectively referred to as the “Company” or “PlusAI”. The Company engages primarily in developing and providing self-driving technology and solutions for its customers and collaboration partners.
Churchill Agreement
On June 5, 2025, the Company entered into a definitive business combination agreement (“Business Combination Agreement”) with Churchill Capital Corp IX (“Churchill”), a publicly traded special purpose acquisition company (“SPAC”) listed on the National Association of Securities Dealers Automated Quotations exchange (“Nasdaq”) under the ticker symbol “CCIX.” Subject to the Business Combination Agreement closing, Merger Sub II., a wholly owned subsidiary of Churchill, will merge with and into the Company, with the Company surviving the merger as a wholly-owned subsidiary of Churchill (the “de-SPAC Transaction”). In connection with the de-SPAC Transaction, it is expected that Churchill will change its name to PlusAI Holdings, Inc., and the combined company is anticipated to be listed on the Nasdaq under the new ticker symbol “PLS”. The Company anticipates this transaction to be completed within the first half of 2026, subject to customary closing conditions.
Liquidity and Going Concern
Since its inception, the Company has incurred net losses and negative cash flows from operations. As of December 31, 2025 and 2024, the Company had an accumulated deficit of $629.0 million and $479.0 million, respectively. The Company incurred net losses of $93.4 million and $61.1 million during the years ended December 31, 2025 and 2024, respectively. Certain simple agreements for future equity (“SAFE”) became optionally redeemable for cash by the holders beginning on January 1, 2025. On December 19, 2025, the Company received a notice of redemption from one Tranche 1 SAFE holder. The redemption created an obligation for the Company to redeem this SAFE investment in cash for $10.0 million by February 7, 2026 if a liquidity event had not occurred that would have caused the conversion of the SAFE to equity. Unless the parties negotiate an alternative arrangement, the Company has communicated to the Tranche 1 holder its plans to make payment of $10.0 million to settle the outstanding SAFE at the de-SPAC Transaction closing. The Company has not incurred any interest or penalties related to the delayed payment. The Company estimated that its existing cash and cash equivalents balance of $24.0 million and short-term marketable securities of $0.2 million as of December 31, 2025, without any future financing, will not be sufficient for the Company to continue as a going concern. Accordingly, there is substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the consolidated financial statements are issued.
The Company expects to incur additional losses and negative cash flows for the foreseeable future as it continues its research and development efforts. The Company’s ability to achieve its intended business objectives is dependent upon, among other things; its ability to obtain adequate financing to fund its business plan, to execute on its commercialization targets and grow its customer base to enable the Company to scale its business, to manage expenses, to successfully execute across multiple business and marketing strategies, and to hire and retain appropriate personnel. While the Company has been reviewing a number of potential strategic alternatives regarding its liquidity, including securing alternative sources for additional financing, such alternatives may not be achievable on favorable conditions, or at all. The Company may from time to time enter into shorter term commercial agreements with our partners to supplement our cash needs. Future capital requirements will depend on many factors, including the rate of adoption for its autonomous driving solutions and the associated revenue growth, the expansion of supporting activities, and the timing and extent of research and development efforts. If sufficient funds on acceptable terms are not available when needed, the Company could be required to significantly reduce its operating expenses and the scope of its development activities. Failure to manage discretionary spending or raise additional financing, as needed, may adversely impact the Company’s ability to achieve its intended business objectives.
F-52
Table of Contents
PLUS AUTOMATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2025 AND 2024
The Company is pursuing a transaction with TVA III and expects to use the proceeds from the de-SPAC Transaction to support its operations. There can be no assurance that the de-SPAC Transaction will be successful. In the event the Company does not complete its de-SPAC Transaction, the Company may seek additional equity or debt financing, including through strategic partnerships. Management also plans to manage the Company’s cash burn by controlling expenditures. Failure to generate sufficient cash flow from operations, raise additional capital, and reduce discretionary spending could have a material adverse effect on the Company’s ability to achieve its intended business objectives, maintain adequate liquidity, and continue as a going concern. The accompanying consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
2. Summary of Principal Accounting Policies
Basis of Presentation
The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business, and applicable rules and regulations of the Securities and Exchange Commission (“SEC”). All costs, as well as assets and liabilities directly associated with the Company's business activity, are included in the consolidated financial statements.
Consolidation
The accompanying consolidated financial statements include the accounts of Plus Automation, the parent, and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated upon consolidation.
Subsidiaries are entities in which the Company, directly or indirectly, controls more than one half of the voting power, has the power to appoint or remove the majority of the members of the board of directors (“Board of Directors”), to cast a majority of votes at the meeting of the Board of Directors or to govern the financial and operating policies of the investee under a statute or agreement among the shareholders or equity holders.
Significant accounting policies adopted by the Company in the preparation of its accompanying consolidated financial statements are summarized below.
Use of Estimates
The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the dates of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. On an ongoing basis, the Company’s management reviews these estimates based on information that is currently available. Changes in facts and circumstances may cause the Company to revise its estimates. Significant accounting estimates reflected in the Company’s consolidated financial statements include estimation of the progress in collaboration and non-recurring engineering (“NRE”) arrangements, useful lives of property and equipment, impairment of long-lived assets and long-term investment, valuation of share-based compensation arrangements, fair value of common stock, redeemable convertible preferred stock, simple agreements for future equity, warrant liabilities, and the valuation allowance of deferred tax assets.
Risk and Uncertainties
The Company has devoted most of its time and resources to developing its proprietary autonomous vehicle technology. The Company’s business and operations may be impacted by general business and economic conditions worldwide. These conditions include short-term and long-term interest rates, inflation, fluctuations in debt and equity capital markets and the general condition of the world economy, including uncertainty around tariffs. A host of factors beyond the Company’s control could cause fluctuations in these conditions. Adverse developments in these general business and economic conditions could have a material adverse effect on the Company’s financial condition and the
F-53
Table of Contents
PLUS AUTOMATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2025 AND 2024
results of its operations. In addition, the Company will have to compete with companies that have extensive and well-funded projects, marketing and sales operations. The Company may be unable to compete successfully against these companies. The Company’s industry is characterized by rapid changes in technology and market demands. As a result, the Company’s products, services, or expertise may become obsolete or unmarketable. The Company’s future success will depend on its ability to adapt to technological advances, anticipate customer and market demands, and enhance its current technology.
Concentration of Credit Risk
Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash, cash equivalents and short-term investments. The Company maintains cash and cash equivalents in deposit accounts at financial institutions that at times may significantly exceed federally insured limits. The Company has not experienced any losses related to such accounts and does not believe that it is exposed to any unusual credit risk beyond the normal credit risk associated with commercial banking relationships. The Company’s non-interest bearing cash balances as of December 31, 2025, were fully insured up to $250,000 per depositor at each financial institution. Substantially all of the Company’s cash and cash equivalents were held in one major financial institution which management considers being of high credit quality.
Accounts and other receivables are generally unsecured and denominated in United States dollar (“US Dollar” or “USD”) and are derived from operations primarily in the United States and Europe. The Company performs ongoing credit evaluations of its accounts receivable to mitigate its credit risk. As of December 31, 2025, the accounts and other receivables had a nominal value with no significant concentration risk. As of December 31, 2024, two collaboration partners accounted for 84% and 14% of accounts and other receivables. The Company operates primarily in the U.S., where it generates billing activity under its collaboration agreements and holds its long-lived assets.
Functional Currency and Foreign Currency Translation
The functional currency of the Company and its subsidiaries in the United States and Cayman Islands is the USD, and the functional currency of the Company’s subsidiary in Germany is the Euro. The reporting currency of the Company is USD. Assets and liabilities are translated at the exchange rates at the balance sheet date, equity accounts are translated at historical exchange rates and revenues, expenses, gains and losses are translated using the average rate for the period. Translation adjustments are reported as accumulated other comprehensive loss and are shown as a separate component of other comprehensive income (loss) in the consolidated statements of operations and comprehensive loss.
Fair Value Measurements
Assets and liabilities recorded at fair value on a recurring basis in the consolidated balance sheets are categorized based on the level of judgment associated with the inputs used to measure their fair values. Fair value is defined as the exchange price that would be received for an asset or an exit price that would be paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The authoritative guidance on fair value measurements establishes a three-tier fair value hierarchy for disclosure of fair value measurements as follows:
F-54
Table of Contents
PLUS AUTOMATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2025 AND 2024
To the extent that the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment that management exercises in determining fair value is greatest for instruments categorized in Level 3. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.
Cash and Cash Equivalents
Cash includes currency on hand and deposits held by financial institutions that can be withdrawn without limitation. Cash equivalents represent short-term, highly liquid investments that are readily convertible to known amounts of cash and with original maturities of three months or less. Cash and cash equivalents are recorded at cost, which approximates fair value. The Company maintains its cash and cash equivalents at various financial institutions, the balances of which, at times, may exceed federally insured limits.
Short-term Marketable Securities
Short-term marketable securities consist of equity securities and U.S. Treasury bills. The Company’s marketable equity securities are carried at fair value with changes in fair value recognized as unrealized gains and losses included in other income (expense), net in the consolidated statements of operations and comprehensive loss.
The classification of marketable securities is determined at the time of purchase and reevaluated as of each balance sheet date. Marketable debt securities accounted for and classified as available-for-sale are carried at fair value with changes in fair value recognized as unrealized gains and losses included in accumulated other comprehensive loss as a component of stockholders’ deficit until realized. Realized gains and losses are calculated using the specific identification method and recorded in other income (expense), net in the consolidated statements of operations and comprehensive loss. Marketable debt securities with stated maturities less than 12 months are classified as short-term investments due to the Company’s ability to use these securities to support current operations.
For available-for-sale debt securities in an unrealized loss position, the Company first assesses whether it intends to sell, or if it is more likely than not that it will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through income or loss. For available-for-sale debt securities that do not meet the above criteria, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, the Company considers the severity of the impairment, any changes in interest rates, market conditions, changes to the underlying credit ratings, and forecasted recovery, among other factors. The credit-related portion of unrealized losses and any subsequent improvements are recorded in interest income through an allowance account. Any impairment that has not been recorded through an allowance for credit losses is included in other comprehensive income (loss) on the consolidated statements of operations and comprehensive loss. No allowance for credit losses has been recorded as of December 31, 2025 and 2024. Credit losses recorded through other comprehensive loss for the year ended December 31, 2025, and 2024 were immaterial.
Accounts and Other Receivables
Accounts and other receivables mainly represent amounts due from collaboration and NRE arrangements and are recorded at original invoice amounts net of allowance for credit losses. The Company considers many factors in assessing the collectability of its accounts and other receivables, such as the age of the amounts due, the customer’s payment history, creditworthiness, financial conditions of the customers and industry trend. The Company also makes a specific allowance if there is strong evidence indicating that the receivable is likely to be unrecoverable. Accounts and other receivable balances are written off after all collection efforts have been exhausted. No allowance for credit losses has been recorded as of December 31, 2025 and 2024.
F-55
Table of Contents
PLUS AUTOMATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2025 AND 2024
Long-Term Investment
The Company’s long-term investment held as of December 31, 2024 represented an equity security in Plus PRC Holdings Ltd and related companies (“Plus PRC”), that had not provided the Company with significant influence over the issuer’s operating and financial policies, and did not have a readily determinable fair value. Equity securities without readily determinable fair values that do not provide the Company with the ability to exercise significant influence over the operating and financial decisions of the investee are measured and recorded using an alternative measurement that measures the securities at cost less impairment, if any. Additionally, if the Company identifies any observable price changes in orderly transactions for identical or similar investments of the same issuer, the equity security is adjusted to fair value as of the date that the observable transaction occurred. This investment was sold for cash by the Company during September 2025.
Property and Equipment, Net
Property and equipment are stated at cost less accumulated depreciation and impairment loss, if any. Depreciation is computed using the straight-line method over the following estimated useful lives, as follows:
Furniture and fixtures |
|
3 years |
Vehicles – research and development |
|
3 years |
Research and development equipment |
|
2 years |
Computer hardware |
|
3 years |
Software |
|
3 years |
Leasehold improvement |
|
Shorter of the estimated useful lives or the lease term |
The research and development equipment is mainly comprised of sensors, lidars, servers, cabin integration and wiring used for the Company’s research and development activities.
The cost of maintenance and repairs is expensed as incurred, whereas the cost of renewals and betterment that extends the useful lives of property and equipment is capitalized as additions to the related assets. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation and amortization are removed from their respective accounts, and any gain or loss on such sale or disposal is reflected in the consolidated statements of operations and comprehensive loss.
Impairment of Long-lived Assets
Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Determination of recoverability is based on an estimate of undiscounted future cash flows resulting from the use of each asset group and its eventual disposition. Impairment is recognized if the carrying amount of the asset group exceeds its fair value. Any impairment loss is allocated to the long-lived assets of the asset group on a pro rata basis using the relative carrying amounts of those assets, except that the carrying amount of an individual long-lived asset cannot be reduced below its fair value. When impairment is recognized, the adjusted carrying amount of the underlying long-lived assets becomes their carrying value as the new cost basis. The new cost basis is depreciated over the remaining useful lives of the assets. No impairment charge was recognized for the years ended December 31, 2025 and 2024.
Simple Agreements for Future Equity
The Company accounts for its outstanding SAFEs as a liability stated at fair value in accordance with ASC Topic 480, Distinguishing Liabilities from Equity. SAFEs are subject to revaluation at the end of each reporting period, with changes in fair value recognized in the consolidated statements of operations and comprehensive loss. There was no event that triggered the SAFEs to convert into equity securities. The Company received a notice of redemption on December 19, 2025 from a Tranche 1 SAFE holder. No other notices or redemptions for cash occurred during the years ended December 31, 2025 and 2024. See Note 8 for additional details.
F-56
Table of Contents
PLUS AUTOMATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2025 AND 2024
Redeemable Convertible Preferred Stock
The Company initially records redeemable convertible preferred stock at fair value on the dates of issuance, less issuance costs. The preferred stockholders, as a group, control the Company’s Board of Directors through their voting rights during the periods presented, and through their representation on the Board could initiate a merger, consolidation, reorganization, change in control or a transfer of substantially all of the Company’s assets (“Deemed Liquidation Event”). Upon a Deemed Liquidation Event, the preferred stockholders may cause a redemption of the redeemable convertible preferred stock for cash and other assets available for distribution. As events triggering liquidation are not solely within the control of the Company, the redeemable convertible preferred stock is classified as temporary equity outside of the stockholders’ deficit in the accompanying consolidated balance sheets.
The carrying values of the Company’s outstanding Series C, Series C-1, Series B, Series B-X, Series A-4, Series A-4-X, Series A-3 and Series A-3-X Preferred Stock are adjusted to reflect the redemption value as if the end of the reporting period was the redemption date as it is probable these series will become redeemable. The redemption value is calculated in accordance with the terms of the redeemable convertible preferred stock (see Note 11).
The Company also evaluates the features of its redeemable convertible preferred stock to determine if the features require bifurcation from the underlying shares by evaluating whether they are clearly and closely related to the underlying shares and whether they meet the definition of a derivative. Any feature that meets the definition of a freestanding instrument is bifurcated from the redeemable convertible preferred stock host, recorded at fair value, and is remeasured to fair value each reporting period until settlement or extinguishment. The Company concluded that no features of its redeemable convertible preferred stock require bifurcation.
In determining if an extinguishment or modification of changes to the temporary equity-classified preferred stock has occurred, the Company has elected a policy to evaluate if changes add, remove, or significantly change a substantive contractual term (e.g., one that is at least reasonably possible of being exercised), or fundamentally change the nature of the redeemable convertible preferred stock. This evaluation includes the consideration of both the expected economics as well as the business purpose for the amendment.
Revenue
The Company has one contract with a customer accounted for under ASC 606, Revenue from Contracts with Customers. The performance obligations under this contract were substantially completed prior to the years presented in the financial statements with nominal amounts of software maintenance recorded for the years ended December 31, 2025 and 2024.
Collaboration and NRE Arrangements
The Company enters into best-efforts, generally nonrefundable NRE arrangements with strategic partners to develop SuperDrive, an autonomous driving system, and these arrangements are not conducted through a separate legal entity. These arrangements involve joint research and development programs to integrate the Company’s autonomous driving software and systems with the counterparty’s vehicle platforms or other hardware, with the goal of developing, testing, and validating various autonomous driving solutions and functionality. Under these arrangements, the Company is reimbursed for a portion of the research and development expenses attributable to specific development activities. The Company receives no additional consideration or royalties upon completion of NRE projects, and though the contract does include commercial terms, there is no minimum purchase commitment. The participation reimbursement received by the Company does not depend on whether the project will yield future benefits.
F-57
Table of Contents
PLUS AUTOMATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2025 AND 2024
The Company analyzes the NRE arrangements to determine whether they involve joint operating activities performed by parties that are both active participants and exposed to significant risks and rewards based on the commercial success of the activities. The Company has concluded that the NRE arrangements fall within the scope of ASC Topic 808, Collaborative Arrangements, since these arrangements have the following characteristics:
For NRE arrangements within the scope of ASC Topic 808, the Company first determines whether the collaborative arrangement is entirely or partially a contract with a customer or falls entirely within the scope of other GAAP. For NRE agreements with multiple deliverables, the Company would assess the units of account by applying the separation and initial measurement requirements of the applicable authoritative accounting literature. If there are no separation or initial measurement requirements in those other standards, the requirements in ASC Topic 606, are applied. For each unit of account identified, the Company determines the accounting treatment based on the relevant authoritative guidance that can be directly applied, reasonably analogized to, or makes an accounting policy election based on the nature if no reasonable analogy is found. The Company has concluded that for each NRE arrangement, there is one unit of account for participation in research and development programs. Participation reimbursements are recognized over time using a cost-to-cost input method (i.e., costs incurred to date relative to total estimated costs), which reflects the Company’s progress toward satisfying its obligation under the development activities. Activities performed for NRE arrangement are tracked and reflect progress made for each arrangement and are charged at consistent internal rates. Participation reimbursements recognized are recorded as a reduction to research and development expenses in the consolidated statements of operations and comprehensive loss.
Research and Development Expenses
Research and development expenses consist primarily of compensation expenses for engineering and technical personnel, depreciation expenses, equipment-related expenses and professional services fees primarily related to consulting and outsourcing services for developing self-driving technology and other research and development expenses. Research and development expenses are offset by amounts received under NRE arrangements. Research and development costs are expensed when incurred.
Sales, Marketing, General and Administrative Expenses
Sales, marketing, general and administrative expenses consist primarily of compensation expenses, office leases, professional services, depreciation expenses and other expenses which are related to the sales and marketing departments or the Company’s management and administrative departments. The Company’s sales and marketing
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PLUS AUTOMATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2025 AND 2024
related costs are comprised of tradeshows, marketing materials, and advertising costs that are expensed as incurred. These costs were $1.4 million and $1.2 million for the years ended December 31, 2025 and 2024, respectively. Advertising costs included as part of the Company’s sales and marketing were $0.1 million and $0.1 million for the years ended December 31, 2025 and 2024, respectively.
Other Income (Expense)
Other income (expense) consist primarily of disposal loss (gain) of property and equipment, impairment of long term investments, fair value adjustments for SAFEs and warrants, discounted options liability expense, and other various miscellaneous expenses. These other expenses, net amounts are expensed as incurred in the Company’s consolidated statements of operations and comprehensive loss.
Stock-Based Compensation
Types of Equity-Based Awards
The Company’s outstanding equity-based awards include the following categories: (1) restricted stock units with service conditions only (“RSUs”), (2) restricted stock units with service and performance conditions based on the occurrence of a liquidity event, which is required to be met for any awards to vest (“PRSUs”), (3) restricted share awards financed through non-recourse notes (“RSAs”), which are treated as common stock options for accounting purposes, (4) common stock options granted to third parties with the exercise price equal to the par value of the underlying share and fully vested at issuance (“Penny Options”), and (5) common stock options with service conditions (“Options”). The Company recognizes stock-based compensation expense based on the estimated fair values for all share-based payment awards.
Equity-Classified Share-Based Awards
The fair value of equity-classified RSUs, PRSUs, and Penny Options is determined using the estimated fair value of the Company’s common stock on the grant date. The grant date fair value of the RSUs is recognized ratably over the requisite service periods, which typically range from two to four years. The grant date fair value for the equity-classified PRSUs is recognized once it becomes probable that the performance condition will be satisfied, which is generally upon the consummation of a liquidity event. The grant date fair value for the equity-classified Penny Options was recognized at their issuance, as these awards were fully vested at the time of issuance.
The fair value of the Company’s common stock was determined by the Board of Directors with input from management and consideration of third-party valuation reports. In the absence of a public trading market, and as a development-stage company with no significant revenues, the Company believes that it is appropriate to consider a range of factors to determine the fair market value of the common stock at each grant date. The Company considered various objective and subjective factors, along with input from the independent third-party valuation firm. The factors included (1) the progress of the development activities by the Company; (2) the significant risks associated with the Company’s stage of development; (3) capital market conditions for comparable, privately held, technology companies; (4) the Company’s available liquidity, financial condition, and results of operations; (5) the historical issuances of the Company’s shares to third parties; and (6) the preferential rights of the redeemable convertible preferred stockholders.
The fair value of the Options and RSAs is determined using the Black-Scholes option-pricing model (“BSM”). The grant date fair value of the equity-classified Options and RSAs is recognized as an expense over the requisite service periods, generally ranging from two to four years. Forfeitures are recognized as they occur.
The BSM requires the use of certain assumptions as of each grant date, including the fair value of the Company’s common stock, expected term, expected volatility, risk-free interest rate, and expected dividends:
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PLUS AUTOMATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2025 AND 2024
Liability-Classified Share-Based Awards
In connection with the Company’s formation in July 2023 (“Restructuring”), the unvested RSUs, PRSUs, and Options (“PRC Awards”) held by the grantees employed by Plus PRC (“PRC Holders”) were expected to be forfeited under their original terms. In July 2023, the Company modified the PRC Awards to allow their continuous vesting under their initial terms, contingent on service to Plus PRC (“Plus PRC Service Requirement”). The Company determined that the Plus PRC Service Requirement is a condition that is not a service, performance, or market condition from the award related to the Company’s operations. As such, the unvested PRC Awards became liability-classified upon completion of the Restructuring. Since the Company anticipates that the liability-classified PRC Awards will be settled in equity, the associated liability is presented as noncurrent in the consolidated balance sheets.
The service-based awards held by the PRC Holders, including RSUs and Options, became vested from the Company’s standpoint, and the variability in the number of shares issuable is based solely on the Plus PRC Service Requirement. As such, the Company reclassifies the liability to equity as the Plus PRC Service Requirement is met. Since the service-based awards held by the PRC Holders were expected to vest before the Restructuring, the total stock-based compensation for these awards is at least equal to the per-share grant-date fair value.
The PRSUs held by the PRC Holders are also subject to the performance condition, and no liability is recognized until the underlying liquidity event becomes probable. The Company reclassifies the liability-classified RSUs held by the PRC holders to equity as the Plus PRC Service Requirement is met and remeasures the per-share basis of these awards at fair value.
Restricted Stock Units Withheld for Taxes
The RSUs become shares of the Company’s common stock upon vesting based on service and are released pursuant to the terms of the underlying agreements. The Company is required to issue one share of Class A common stock to settle each vested unit of the RSUs or PRSUs. In some cases, the RSU releases may be deferred through the applicable liquidity event. When the Company releases the RSUs and settles them in common stock, some shares are withheld to meet applicable minimum tax withholding requirements. The RSUs withheld for taxes are accounted for as common stock repurchases, with the cost of repurchase recognized as a reduction to additional paid-in capital and reflected as a financing activity in the consolidated statements of cash flows.
Software Development Costs
Development costs incurred in the research and development of new software products are expensed as incurred until technological feasibility of the product has been established. Software development costs incurred after technological feasibility has been established are capitalized up to the time the product is available for general release to customers. For the years ended December 31, 2025 and 2024, no amounts were capitalized.
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PLUS AUTOMATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2025 AND 2024
Leases
The Company determines if an arrangement is or contains a lease at inception by assessing whether the arrangement contains an identified asset and whether it has the right to control the identified asset. Right-of-use (“ROU”) assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Lease liabilities are recognized at the lease commencement date based on the present value of future lease payments over the lease term. For these calculations, the Company considers only payments that are fixed or determinable at the time of commencement or any variable payments that depend on an index or a rate. ROU assets are based on the measurement of the lease liability and also include any lease payments made prior to or on lease commencement and exclude lease incentives and initial direct costs incurred, as applicable.
As the implicit rate in the lease is not readily determinable, the Company uses its incremental borrowing rate based on the information available at the lease commencement date in determining the present value of lease payments. The Company gives consideration to its credit risk, term of the lease, total lease payments and adjusted for impacts of collateral, as necessary, when calculating its incremental borrowing rates. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease costs for the Company’s operating leases are recognized on a straight-line basis over the lease term within research and development and sales, marketing, general and administrative in the Company’s consolidated statements of operations and comprehensive loss.
For leases with a term of one year or less, the Company has elected to not recognize a lease liability or ROU asset on its consolidated balance sheets and recognizes the lease payments as an expense on a straight-line basis over the lease term. The Company has also elected to not separate lease components from non-lease components for all classes of underlying assets and instead accounts for the lease and non-lease components as a single component. Variable non-lease and lease components primarily include common area maintenance, utilities, real estate taxes, insurance, and other operating costs that are passed on from the lessor in proportion to the space leased by the Company, and are expensed as incurred.
Deferred Offering Costs
Deferred offering costs consist of expenses directly attributable to the Company’s planned de-SPAC Transaction with Churchill, including but not limited to legal, accounting, printing, underwriter, and filing fees, which are capitalized as incurred. Upon the successful completion of the de-SPAC Transaction, deferred offering costs will be offset against the proceeds and reclassified to additional paid-in capital. As of December 31, 2025, the Company recorded deferred offering costs of $8.0 million in the consolidated balance sheet. As of December 31, 2024, no deferred offering costs were capitalized.
Warrant Liabilities
The Company’s warrants to purchase shares of redeemable convertible preferred stock are classified as liabilities as the underlying securities are contingently redeemable upon the occurrence of events that are outside of the control of the Company. The warrants were recorded at fair value upon issuance and are subsequently remeasured at fair value at each balance sheet date, with changes in fair value recognized in the Company’s consolidated statements of operations and comprehensive loss until expiration or settlement.
Income Tax
The Company accounts for income taxes under an asset and liability approach for deferred income taxes, which requires recognition of deferred income tax assets and liabilities for the expected future tax consequences of events that have been recognized in the consolidated financial statements but have not been reflected in taxable income. Estimates and judgments occur in the calculation of certain tax liabilities and in the determination of the recoverability of certain deferred tax assets, which arise from temporary differences and carryforwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates that apply to taxable income in effect for the years in which those temporary differences are expected to be realized or settled. The Company regularly assesses the
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PLUS AUTOMATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2025 AND 2024
likelihood that deferred tax assets will be realized based on the realization guidance available. To the extent that any amounts are believed to not be more-likely-than-not to be realized, a valuation allowance is recorded to reduce the deferred tax assets. The Company regularly assesses the need for the valuation allowance on deferred tax assets, and to the extent that an adjustment is needed, such adjustment will be recorded in the period that the determination is made.
The Company recognizes tax benefits from uncertain tax positions only if it believes that it is more-likely-than-not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. The tax benefits recognized in the financial statements from such positions are then measured based on the largest benefit that is more-likely-than-not to be realized on settlement with taxing authority. The Company recognizes interest and penalties related to income tax matters as income tax expense. For the years ended December 31, 2025 and 2024, the Company did not incur any interest or penalties associated with unrecognized tax benefits. See Note 14.
Other Comprehensive Income (Loss)
Other comprehensive income or loss represents the change in the Company’s stockholders’ deficit from transactions and other events and circumstances excluding transactions resulting from investments from owners and distributions to owners. Accumulated other comprehensive loss, as presented on the accompanying consolidated balance sheets, consists of cumulative foreign currency translation adjustments.
Segment Reporting
Operating segments are defined as components of an enterprise engaging in business activities for which separate financial information is available that is regularly evaluated by the Company’s chief operating decision maker(s) (“CODM”) in deciding how to allocate resources and assess performance. The Company manages its operations as one operating and reportable segment. The Company’s CODM, its Chief Executive Officer, manages the Company’s operations on a consolidated basis for the purposes of allocating resources and evaluating financial performance. The CODM reviews significant segment expenses based on functional line items as disclosed in the consolidated statements of operations and comprehensive loss. The CODM does not review assets at a different level or category other than the amounts disclosed in the Company’s consolidated balance sheets.
Net Loss per Share Attributable to Common Stockholders
The Company calculates net loss per share using the two-class method because it has issued redeemable convertible preferred stock and SAFEs that meet the definition of participating securities, in addition to Class A and Class B common stock. The two-class method determines net loss per share for each class of common stock and participating securities, accounting for dividends declared or accumulated and participation rights in undistributed earnings. The two-class method requires income available to common shareholders for the period to be allocated between common stock and participating securities based upon their participation rights to receive dividends as if all income for the period had been distributed. The participating securities that contractually participate in dividend with common stock, do not have a contractual obligation to share in the Company’s losses. As such, net loss for the years ended December 31, 2025 and 2024 were not allocated to the Company’s participating securities.
The rights of the Class A and Class B common stock, including liquidation, dividend, and loss-sharing rights, are identical, except for voting, transfer, and conversion rights. As the liquidation and dividend rights and sharing of losses are identical, the undistributed earnings are allocated on a proportionate basis and the resulting net loss per share will, therefore, be the same for both Class A and Class B common stock on an individual or combined basis.
Basic net loss per share attributable to common shareholders is computed by dividing the net loss attributable to common shareholders by the weighted average number of common shares outstanding for the period. Diluted net loss per share attributable to common shareholders is computed by dividing the diluted net loss attributable to common shareholders by the weighted average number of common shares outstanding for the period, including potential dilutive common shares.
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PLUS AUTOMATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2025 AND 2024
Diluted net loss per share considers potentially dilutive common shares, including outstanding common stock options, restricted stock units, shares of redeemable convertible preferred stock, SAFEs, and liability-classified warrants. Potentially dilutive common shares are not assumed to have been issued if their effect is anti-dilutive. For all periods presented, all potentially dilutive common shares are excluded as they have an anti-dilutive impact. Therefore, basic and diluted net loss per share are the same for all periods presented.
Emerging Growth Company Status
The Company intends to operate as an emerging growth company as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards using the effective dates for private companies. The Company has elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that it (1) is no longer an emerging growth company or (2) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act. As a result, these consolidated financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates.
Recently Adopted Accounting Pronouncements
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”), which requires public entities to disclose specific categories in the effective tax rate reconciliation, as well as additional information for reconciling items that exceed a quantitative threshold. ASU 2023-09 also requires all entities to disclose income taxes paid disaggregated by federal, state, and foreign taxes and further disaggregated for specific jurisdictions that exceed 5% of total income taxes paid, among other expanded disclosures. For public business entities, the ASU is effective for annual periods beginning after December 15, 2024. For entities other than public business entities, the amendments are effective for annual periods beginning after December 15, 2025, with early adoption permitted. The ASU should be applied on a prospective basis with retrospective application permitted. The Company early adopted ASU 2023-09 for the annual period beginning January 1, 2025 on a retrospective basis. The adoption of ASU 2023-09 did not have a material impact on the Company’s consolidated financial statements and related disclosures. See Note 14.
In May 2025, the FASB issued ASU No. 2025-03, Business Combinations (Topic 805) and Consolidation (Topic 810): Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity (“ASU 2025-03”). ASU 2025-03 changes how companies determine the accounting acquirer in certain business combinations involving variable interest entities. The new guidance requires considering the factors used for other acquisition transactions to assess which party is the accounting acquirer. ASU 2025-03 is effective for the Company’s annual reporting periods beginning on January 1, 2027. Early adoption is permitted. The Company early adopted ASU 2025-03 on July 1, 2025. ASU 2025-03 is applied prospectively and will impact the accounting for the de-SPAC Transaction, specifically that Plus Automation is expected to be the accounting acquirer.
Recently Issued Accounting Pronouncements
In November 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income (Topic 220): Disaggregation of Income Statement Expenses (“ASU 2024-03”), which requires public entities to provide disaggregated disclosures of certain expense captions presented on the face of the income statement into specific categories within the footnotes to the financial statements. ASU 2024-03 is effective for the Company’s annual periods beginning on January 1, 2027, and interim periods beginning on January 1, 2028, with early adoption permitted. The ASU may be applied either on a prospective or retrospective basis. The Company is currently evaluating the impact of adopting this new accounting guidance on its consolidated financial statements and related disclosures.
In May 2025, the FASB issued ASU No. 2025-04, Compensation – Stock Compensation (Topic 718) and Revenue from Contracts With Customers (Topic 606): Clarifications to Share-Based Consideration Payable to a Customer (“ASU 2025-04”). ASU 2025-04 revises the definition of a performance condition, eliminates the forfeiture policy election for service conditions, and clarifies that the variable consideration constraint in ASC Topic 606 does not apply to share-based consideration payable to customers. The new guidance requires entities to consistently account for share-based awards granted to customers by clarifying the treatment of vesting conditions and ensuring alignment
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PLUS AUTOMATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2025 AND 2024
with ASC Topic 606 and ASC Topic 718: Compensation—Stock Compensation. ASU 2025-04 is effective for fiscal years beginning after December 15, 2026, including interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the impact of adopting this new accounting guidance on its consolidated financial statements and related disclosures.
In July 2025, the FASB issued ASU No. 2025-05, Financial Instruments – Credit Losses (Topic 326):Measurement of Credit Losses for Accounts Receivable and Contract Assets (“ASU 2025-05”). ASU 2025-05 provides a practical expedient that all entities can use when estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under ASC Topic 606. Under this practical expedient, an entity is allowed to assume that the current conditions it has applied in determining credit loss allowances for current accounts receivable and current contract assets remain unchanged for the remaining life of those assets. ASU 2025-05 is effective for fiscal years beginning after December 15, 2025, and interim reporting periods in those fiscal years. Entities that elect the practical expedient and, if applicable, make the accounting policy election are required to apply the amendments prospectively. The Company is currently evaluating the impact of adopting this new accounting guidance on its consolidated financial statements and related disclosures.
In September 2025, the FASB issued ASU No. 2025-06, Intangibles - Goodwill and Other – Internal-Use Software (Subtopic 350-40) (“ASU 2025-06”). ASU 2025-06 amends certain aspects of the accounting and disclosure requirements for software costs. Under ASU 2025-06, entities may begin to capitalize internal-use software costs when management authorizes and commits to funding a software project, and it is probable that the project will be completed. ASU 2025-06 is effective for all annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. Early adoption is permitted as of the beginning of an annual reporting period. The Company is currently evaluating the impact of adopting this new accounting guidance on its consolidated financial statements and related disclosures.
In September 2025, the FASB issued ASU No. 2025-07, Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers(Topic 606) (“ASU 2025-07”), which refines the scope of derivative accounting to exclude certain non-exchange-traded contracts with underlying based on the operations or activities specific to one of the parties to the contract and clarifies the accounting for share-based noncash consideration in revenue contracts under ASC Topic 606. ASU 2025-07 is effective for annual periods beginning after December 15, 2026, and interim periods within those annual reporting periods, with early adoption permitted. Transition can be applied prospectively to new contracts or on a modified retrospective basis. The Company is currently evaluating the impact of adopting this new accounting guidance on its consolidated financial statements and related disclosures.
In December 2025, the FASB issued ASU No. 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements. The ASU clarifies interim disclosure requirements and the applicability of Topic 270. The objective of the amendments is to provide further clarity about the current interim disclosure requirements. The ASU is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. The adoption of this ASU can be applied using either a prospective or a retrospective approach. Early adoption is permitted. The Company is currently evaluating the impact of adopting this new accounting guidance on its consolidated financial statements and related disclosures.
3. Collaboration and NRE Arrangements
Since inception, the Company has entered into various collaboration arrangements, including amendments, with certain strategic partners. Under the collaboration terms, the Company is typically responsible for adapting its autonomous driving technology, integrating it with partner systems, testing, calibration, and supporting test operations for the autonomous driving product in specific geographies. Each party is responsible for its own costs and expenses incurred in connection with the collaboration arrangement, except that the Company is typically eligible to receive certain upfront or milestone-based payments during the specified collaboration term.
The Company retains ownership of its proprietary intellectual property developed independently, while any ownership of new intellectual property developed under the collaboration arrangements must be explicitly defined in a separately executed definitive project agreement.
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PLUS AUTOMATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2025 AND 2024
The fees received from the collaboration arrangements are recognized based on costs incurred to date over the total estimated project costs, and are recorded as an offset to research and development expenses in the consolidated statements of operations and comprehensive loss. During the years ended December 31, 2025 and 2024, the Company recorded $1.8 million and $12.5 million as an offset to research and development costs related to all partner collaboration agreements, respectively. As of December 31, 2025 and 2024, the Company had no outstanding balance from advanced payments under all partner collaboration agreements on the consolidated balance sheets.
4. Fair Value of Financial Instruments
The Company’s financial instruments include cash and cash equivalents, marketable securities, accounts and other receivables, accounts payable, the SAFE liabilities, the warrant liabilities, liability-classified share-based awards and other payables. Marketable securities, the SAFE liabilities, the warrant liabilities, and liability-classified share-based awards are measured at fair value on a recurring basis. The carrying values of other financial instruments approximated their fair values due to their short-term nature.
The Company’s financial assets and liabilities that are measured at fair value on a recurring basis are as follows:
|
|
December 31, 2025 |
|
|||||||||||||
(in thousands) |
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
|
||||
Financial Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Treasury bills classified as short-term marketable securities |
|
$ |
168 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
168 |
|
Equity securities in short-term marketable securities |
|
|
3 |
|
|
|
— |
|
|
|
— |
|
|
|
3 |
|
Total |
|
$ |
171 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
171 |
|
Financial Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Warrant liabilities (Note 12) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
18,302 |
|
|
$ |
18,302 |
|
Simple agreements for future equity, current (Note 8) |
|
|
— |
|
|
|
— |
|
|
|
25,561 |
|
|
|
25,561 |
|
Simple agreements for future equity, noncurrent (Note 8) |
|
|
— |
|
|
|
— |
|
|
|
33,456 |
|
|
|
33,456 |
|
Liability-classified share-based awards (Note 13) |
|
|
— |
|
|
|
— |
|
|
|
215 |
|
|
|
215 |
|
Total |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
77,534 |
|
|
$ |
77,534 |
|
|
|
December 31, 2024 |
|
|||||||||||||
(in thousands) |
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
|
||||
Financial Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Treasury bills classified as short-term marketable securities |
|
$ |
264 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
264 |
|
Equity securities in short-term marketable securities |
|
|
190 |
|
|
|
— |
|
|
|
— |
|
|
|
190 |
|
Total |
|
$ |
454 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
454 |
|
Financial Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Warrant liabilities (Note 12) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
13,242 |
|
|
$ |
13,242 |
|
Simple agreements for future equity, current (Note 8) |
|
|
— |
|
|
|
— |
|
|
|
24,756 |
|
|
|
24,756 |
|
Simple agreements for future equity, noncurrent (Note 8) |
|
|
— |
|
|
|
— |
|
|
|
2,780 |
|
|
|
2,780 |
|
Liability-classified share-based awards (Note 13) |
|
|
— |
|
|
|
— |
|
|
|
451 |
|
|
|
451 |
|
Total |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
41,229 |
|
|
$ |
41,229 |
|
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PLUS AUTOMATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2025 AND 2024
The following table sets forth a summary of the changes in the fair value of the Company’s warrants and SAFEs classified as Level 3 financial instruments:
(in thousands) |
|
Warrants |
|
|
SAFEs |
|
||
Fair value as of December 31, 2023 |
|
$ |
10,812 |
|
|
$ |
10,000 |
|
Fair value as of issuance date |
|
|
— |
|
|
|
16,687 |
|
Change in fair value |
|
|
2,430 |
|
|
|
849 |
|
Fair value as of December 31, 2024 |
|
|
13,242 |
|
|
|
27,536 |
|
Fair value as of issuance date |
|
|
— |
|
|
|
24,435 |
|
Change in fair value |
|
|
5,060 |
|
|
|
7,046 |
|
Fair value as of December 31, 2025 |
|
$ |
18,302 |
|
|
$ |
59,017 |
|
The following table sets forth a summary of the changes in the fair value of the Company’s share-based awards liabilities classified as Level 3 financial instruments and included within noncurrent liabilities on the consolidated balance sheets:
(in thousands) |
|
|
|
|
Liability as of December 31, 2023 |
|
$ |
680 |
|
Change in fair value |
|
|
1,076 |
|
Settlement in equity |
|
|
(1,305 |
) |
Liability as of December 31, 2024 |
|
|
451 |
|
Change in fair value |
|
|
429 |
|
Settlement in equity |
|
|
(681 |
) |
Foreign currency remeasurement loss |
|
|
16 |
|
Liability as of December 31, 2025 |
|
$ |
215 |
|
Treasury Bills
U.S. Treasury bills are classified as cash equivalents if the maturities at the date of purchase are three months or less. If the maturities of U.S. Treasury bills are greater than three months and less than 12 months at the date of purchase, they are classified short term investments. The Company obtains pricing information from its investment manager and generally determines the fair value of available-for-sale securities using standard observable inputs, including reported trades, broker and dealer quotes, and bids and offers. All such inputs are considered as Level 1 in the fair value hierarchy.
Short-Term Marketable Securities
As of December 31, 2025 and 2024, the fair value of the Company’s holdings in shares of Luminar’s marketable equity securities are based upon quoted market prices and considered a Level 1 asset in the fair value hierarchy.
Warrant Liabilities
The Company estimated the fair value of warrant liabilities using a combination of the binomial lattice model and a waterfall proceeds analysis based on estimated probabilities assigned to different exit scenarios, including an initial public offering or other settlement alternatives, as these events became known or knowable as of the valuation date. The probabilities of the Company becoming a public entity used to determine the fair value of warrant liabilities were
F-66
Table of Contents
PLUS AUTOMATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2025 AND 2024
90% and 50% as of December 31, 2025 and 2024, respectively. The following are the unobservable inputs used in the binomial lattice model:
|
|
December 31, |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
Exercise Price |
|
$ |
0.46647 |
|
|
$ |
0.46647 |
|
Dividend yield |
|
|
— |
|
|
|
— |
|
Expected term (in years) |
|
|
1.00 |
|
|
|
1.75 |
|
Risk-free interest rate |
|
|
3.5 |
% |
|
|
4.2 |
% |
Expected volatility |
|
|
71.8 |
% |
|
|
71.3 |
% |
SAFE
During the years ended December 31, 2025 and 2024, the Company issued additional SAFE instruments and received gross proceeds of $24.4 million and $16.7 million in cash, respectively. A Monte Carlo simulation was used to determine the fair value, utilizing the following significant unobservable inputs:
|
|
December 31, |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
Expected term (in years) |
|
0.33 |
|
|
1.25 |
|
||
Term-matched semi-annual risk-free rate |
|
|
3.6 |
% |
|
|
4.2 |
% |
Drift / continuously compounded risk-free rate |
|
|
3.6 |
% |
|
|
4.1 |
% |
Volatility |
|
|
54.8 |
% |
|
|
73.7 |
% |
5. Commitments and Contingencies
Indemnification
In the normal course of business, the Company enters into agreements that include various representations and provide for general indemnification. The Company’s exposure under these agreements is unknown because it involves claims that may be made against the Company in the future. To date, the Company has not paid any claims or been required to defend any action related to its indemnification obligations. As of December 31, 2025 and 2024, the Company did not have any material indemnification claims that were probable or reasonably possible.
Contingencies
Liabilities for loss contingencies arising from claims, assessments, litigation, fines, penalties, and other sources are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. There are no material items that have been accrued as of December 31, 2025 and 2024. The Company is not currently involved in any legal actions that could have a material effect on the Company’s financial position, results of operations, or liquidity.
6. Long-Term Investment
As of December 31, 2024, the Company held an aggregate of 476,635,210 redeemable Series A-X preferred shares of Plus PRC, representing approximately 23.44% of equity on an as-converted basis and 7.11% by voting power. This minority investment in Plus PRC was not consolidated under the variable interest entity model as the Company is not determined to be the primary beneficiary. Additionally, the Company has not accounted for its Plus PRC investment under the equity method as it did not have the ability to exercise significant influence over Plus PRC. The Company previously accounted for this investment at cost less impairments, adjusted by observable price changes in orderly transactions for identical or similar investments.
F-67
Table of Contents
PLUS AUTOMATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2025 AND 2024
As of December 31, 2024, the carrying value of the investment in Plus PRC was $29.3 million. In connection, with the definitive agreement for disposal of its investment in Plus PRC executed and negotiated in September 2025, the Company recorded an impairment of $9.3 million as of June 30, 2025. In September 2025, the Company agreed to sell to Full Truck Alliance Co. Ltd. (“FTA”) all 476,635,210 redeemable Series A-X preferred shares of Plus PRC for gross proceeds of $20.0 million, of which $2.0 million initially became subject to tax withholding pursuant to the People’s Republic of China (“PRC”) law. During the year ended December 31, 2025, the Company received $18.0 million in cash from FTA. The remaining $2.0 million initially withheld for taxes was recorded in prepaid expenses and other current assets in the consolidated balance sheet as of December 31, 2025, as the Company anticipates receiving this amount in full once the review is completed by PRC tax authorities.
7. Balance Sheet Components
Property and Equipment, Net
Property and equipment and related accumulated depreciation were as follows:
|
|
December 31, |
|
|||||
(in thousands) |
|
2025 |
|
|
2024 |
|
||
Vehicles – research and development |
|
$ |
4,832 |
|
|
$ |
5,986 |
|
Computer hardware |
|
|
3,954 |
|
|
|
3,544 |
|
Research and development equipment |
|
|
1,908 |
|
|
|
1,571 |
|
Leasehold improvements |
|
|
1,562 |
|
|
|
1,561 |
|
Construction in progress |
|
|
739 |
|
|
|
222 |
|
Furniture and fixtures |
|
|
288 |
|
|
|
288 |
|
Software |
|
|
233 |
|
|
|
230 |
|
Total property and equipment at cost |
|
|
13,516 |
|
|
|
13,402 |
|
Less: accumulated depreciation and amortization |
|
|
(11,099 |
) |
|
|
(10,602 |
) |
Property and equipment, net |
|
$ |
2,417 |
|
|
$ |
2,800 |
|
Depreciation expense recognized during the years ended December 31, 2025 and 2024, was $1.6 million and $2.5 million, respectively.
Prepaid expenses and other current assets
Prepaid expenses and other current assets consisted of the following:
|
|
December 31, |
|
|||||
(in thousands) |
|
2025 |
|
|
2024 |
|
||
Receivable from sale of long-term investment |
|
$ |
2,000 |
|
|
$ |
— |
|
Short-term security deposits |
|
|
1,516 |
|
|
|
1,203 |
|
Prepaid taxes |
|
|
290 |
|
|
|
383 |
|
Prepaid research and development |
|
|
224 |
|
|
|
742 |
|
Other prepaid and current assets |
|
|
1,224 |
|
|
|
1,279 |
|
Total prepaid expenses and other current assets |
|
$ |
5,254 |
|
|
$ |
3,607 |
|
F-68
Table of Contents
PLUS AUTOMATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2025 AND 2024
Accrued and other current liabilities
Accrued and other current liabilities consisted of the following:
|
|
December 31, |
|
|||||
(in thousands) |
|
2025 |
|
|
2024 |
|
||
Accrued professional services |
|
$ |
1,578 |
|
|
$ |
1,064 |
|
Accrued insurance |
|
|
391 |
|
|
|
314 |
|
Accrued taxes |
|
|
46 |
|
|
|
208 |
|
Other accrued and current liabilities |
|
|
218 |
|
|
|
391 |
|
Total accrued and other current liabilities |
|
$ |
2,233 |
|
|
$ |
1,977 |
|
8. Simple Agreements for Future Equity
The Company has entered into SAFEs with various investors that were classified as liabilities within the Company’s consolidated balance sheets and accounted for at fair value, subject to remeasurement for each reporting period (see Note 2). As of December 31, 2025 and 2024, the Company has classified certain SAFEs that became optionally redeemable by the holders for cash beginning on January 1, 2025 as current liabilities. The remaining SAFEs are not optionally redeemable by the holders and are classified as noncurrent liabilities for the years ended December 31, 2025, and 2024.
Tranche 1
During August 2023, the Company executed a SAFE with Luminar for proceeds of $10.0 million. The consideration for the SAFE was received in the form of common shares of Luminar. During the year ended December 31, 2024, the Company executed additional SAFEs with several investors for proceeds of $14.0 million in cash. The SAFE agreement has no interest rate or maturity dates, and the SAFE investor has no voting rights prior to conversion. If the Company pays a dividend on outstanding shares of common stock, the holder of the outstanding SAFE is entitled to such dividend paid per common share multiplied by the consideration received divided by the fair market value of common stock at the dividend date times 95% if such dividend is declared within one year of issuance or 90% after the first year of issuance. Upon a liquidation or dissolution event, the SAFE has a liquidation priority similar to a non-participating preferred stock so that the investor’s right to payment is junior to debt, senior to common stock and on par with redeemable convertible preferred stock. The discount rate for the SAFE is equal to 95% for the first year after the SAFE issuance and then 90% thereafter. These SAFEs include a redemption right effective beginning on January 1, 2025, whereby if the SAFE has not been terminated, the investor can elect to reduce the purchase amount by having the Company pay the investor the purchase amount in cash. Accordingly, Tranche 1 SAFEs are reflected in the consolidated balance sheet as simple agreements for future equity, current.
In December 2025, the Company received a notice from a Tranche 1 SAFE holder to exercise its redemption right. Unless the parties negotiate an alternative arrangement, the Company has communicated to the Tranche 1 holder its plans to make payment of $10.0 million to settle the outstanding SAFE at the de-SPAC Transaction closing. The Company has not incurred any interest or penalties related to the delayed payment.
Tranche 2
During October 2024, the Company executed a SAFE with an investor for proceeds of $2.7 million in cash. During February and March 2025, the Company executed SAFEs with additional investors for proceeds of $1.4 million in cash. The SAFE agreement has no interest rate or maturity dates, and the SAFE investor has no voting rights prior to conversion. If the Company pays a dividend on outstanding shares of common stock, the holder of the outstanding SAFE is entitled to such dividend paid per common share multiplied by consideration received divided the fair market value of common stock at the dividend date times 90%. Upon a liquidation or dissolution event, the SAFE has a liquidation priority similar to a non-participating preferred stock so that the investor’s right to payment is junior to debt, senior to common stock and on par with redeemable convertible preferred stock. The discount rate for the SAFE is equal to 90%.
F-69
Table of Contents
PLUS AUTOMATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2025 AND 2024
Tranche 3
In May 2025, the Company executed a SAFE with an investor for proceeds of $1.0 million in cash. The SAFE agreement has no interest rate or maturity dates, and the SAFE investor has no voting rights prior to conversion of the SAFE. Upon a liquidation or dissolution event, the SAFE has a liquidation priority similar to a nonparticipating preferred stock, so that the investor’s right to payment is junior to debt, senior to common stock, and on par with redeemable convertible preferred stock. The discount rate for conversion of the SAFE is equal to 90% prior to completion of a SPAC Transaction and 85% thereafter, representing a 10% discount to the implied price per share of the Company’s common stock.
Tranche 4
From October through December 2025, the Company executed SAFEs with investors for proceeds of $22.0 million. The SAFE agreements have no interest rate or maturity dates, and the SAFE investors have no voting rights prior to conversion of the SAFE. Upon a liquidation or dissolution event, the SAFE has a liquidation priority similar to a non-participating preferred stock so that the investor’s right to payment is junior to debt, senior to common stock and on par with redeemable convertible preferred stock. The discount rate for the SAFEs is equal to 70%. Within the Tranche 4 SAFEs, the company issued a SAFE for $9.0 million that grants a specific investor the right to amend the agreement to conform to any subsequently issued convertible securities that are deemed to have more favorable terms.
The Tranche 1, Tranche 2, Tranche 3, and Tranche 4 SAFEs will expire or terminate when the outstanding SAFEs are settled by one of the detailed mechanisms, as follows:
F-70
Table of Contents
PLUS AUTOMATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2025 AND 2024
9. Leases
The Company has entered into non-cancellable operating leases primarily for office and warehouse spaces which have initial lease terms varying from three to five years. Leases require monthly lease payments that may be subject to annual increases throughout the lease term. Certain leases include renewal options to extend the lease term which have not been included in the computations of the present value of the lease payments at the lease commencement date as the Company is not reasonably certain to renew. Lease expense is comprised of the following:
|
|
Year Ended December 31, |
|
|||||
(in thousands) |
|
2025 |
|
|
2024 |
|
||
Operating lease cost |
|
$ |
2,164 |
|
|
$ |
2,262 |
|
Short-term lease cost |
|
433 |
|
|
220 |
|
||
Variable lease cost |
|
882 |
|
|
745 |
|
||
Total lease expense |
|
$ |
3,479 |
|
|
$ |
3,227 |
|
Cash paid for amounts included in the measurement of operating lease liabilities was $2.4 million and $2.5 million for the years ended December 31, 2025 and 2024, respectively. These amounts were included in the net cash used in operating activities in the Company’s consolidated statements of cash flows.
The weighted average remaining operating lease term and the weighted average discount rate used to determine the operating lease liability were as follows:
|
|
December 31, |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
Weighted-average remaining lease term of operating leases (in years) |
|
0.83 |
|
|
1.33 |
|
||
Weighted-average discount rate of operating leases |
|
|
3.75 |
% |
|
|
4.26 |
% |
As of the reporting period end, the maturities of the Company’s operating lease liabilities, excluding short-term leases, were as follows:
|
December 31, |
|
|
(in thousands) |
2025 |
|
|
2026 |
$ |
595 |
|
Total undiscounted lease payments |
|
595 |
|
Less: imputed interest |
|
(8 |
) |
Present value of operating lease liabilities |
$ |
587 |
|
Operating lease liabilities, current |
$ |
587 |
|
Operating lease liabilities, net of current portion |
$ |
— |
|
F-71
Table of Contents
PLUS AUTOMATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2025 AND 2024
10. Common Stock
On July 31, 2023, in connection with the Restructuring, the Company amended and restated its certificate of incorporation (“July 2023 COI”), which remained in effect through December 31, 2025. Under the July 2023 COI, the Company authorized 22,718,203,023 shares of Class A common stock and 328,672,100 shares of Class B common stock, both with a par value of $0.000002 per share, and 1,953,124,877 shares of redeemable convertible preferred stock.
Each holder of Class A common stock is entitled to one vote per share and each holder of Class B common stock is entitled to 15 votes per share. The holders of Class A and Class B common stock generally vote together with preferred stockholders and not as separate series or classes. The holders of Class A and Class B common stock vote together as a single class. Each share of Class B common stock can be converted into a share of Class A common stock upon the election of the holder of the Class B common stock or automatically in certain cases.
The holders of Class A and Class B common stock are entitled to dividends as declared by the Board of Directors, subject to the rights of holders of all classes of preferred stock outstanding having priority rights as to dividends. Any dividend paid to the holders of Class A and Class B common stock shall be paid pro rata based on their respective number of shares unless different treatment of the shares of such series is approved by the holders of a majority of the voting power of the outstanding shares of such series of common stock, voting separately as a class. There have been no dividends declared or paid through December 31, 2025. The Class A and Class B common stock is also treated equally with respect to distributions, stock splits, stock dividends, stock combinations or similar events, unless different treatment is approved by the holders of a majority of the voting power of the outstanding shares of Class A and Class B common stock, each voting separately as a class.
The Company has the following shares of Class A common stock reserved for future issuance, on an as-if converted basis:
|
|
December 31, |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
Redeemable convertible preferred stock |
|
|
952,548,647 |
|
|
|
952,548,647 |
|
Common shares reserved for awards granted under 2017 Plan |
|
|
58,013,135 |
|
|
|
71,100,460 |
|
Common shares reserved for awards granted under 2021 Plan |
|
|
163,364,351 |
|
|
|
167,830,497 |
|
Remaining common shares reserved for future issuance under the Plans |
|
|
31,807,229 |
|
|
|
31,786,865 |
|
Total reserved common stock |
|
|
1,205,733,362 |
|
|
|
1,223,266,469 |
|
The Company has the following shares of common stock outstanding as of the dates below, with the activity during the periods presented related solely to the Class A shares:
|
|
December 31, |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
Class A common stock |
|
|
130,446,121 |
|
|
|
91,043,276 |
|
Class B common stock |
|
|
328,672,100 |
|
|
|
328,672,100 |
|
Total common stock |
|
|
459,118,221 |
|
|
|
419,715,376 |
|
F-72
Table of Contents
PLUS AUTOMATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2025 AND 2024
11. Redeemable Convertible Preferred Stock
Issued and outstanding redeemable convertible preferred stock consists of the following (in thousands, except share and per share amounts):
|
|
December 31, 2025 |
|
|||||||||||||||||
|
|
Shares |
|
|
Shares |
|
|
Original |
|
|
Aggregate |
|
|
Net |
|
|||||
Series A-1 |
|
|
149,057,400 |
|
|
|
149,057,400 |
|
|
$ |
0.000002 |
|
|
$ |
— |
|
|
$ |
— |
|
Series A-2 |
|
|
41,757,975 |
|
|
|
41,757,975 |
|
|
$ |
0.286584 |
|
|
|
19,500 |
|
|
|
11,967 |
|
Series A-3 |
|
|
133,246,286 |
|
|
|
— |
|
|
$ |
0.286584 |
|
|
|
— |
|
|
|
— |
|
Series A-3-X |
|
|
133,246,286 |
|
|
|
133,246,286 |
|
|
$ |
0.286584 |
|
|
|
62,224 |
|
|
|
85,278 |
|
Series A-4 |
|
|
27,130,907 |
|
|
|
9,043,636 |
|
|
$ |
0.442300 |
|
|
|
6,518 |
|
|
|
6,518 |
|
Series A-4-X |
|
|
27,130,907 |
|
|
|
18,087,271 |
|
|
$ |
0.442300 |
|
|
|
13,036 |
|
|
|
13,036 |
|
Series B |
|
|
419,496,627 |
|
|
|
284,439,710 |
|
|
$ |
0.518300 |
|
|
|
235,534 |
|
|
|
197,513 |
|
Series B-X |
|
|
419,496,627 |
|
|
|
135,056,917 |
|
|
$ |
0.518300 |
|
|
|
107,597 |
|
|
|
107,597 |
|
Series C |
|
|
181,859,452 |
|
|
|
181,859,452 |
|
|
$ |
0.550700 |
|
|
|
157,316 |
|
|
|
154,462 |
|
Series C-1 |
|
|
420,702,410 |
|
|
|
— |
|
|
$ |
0.466470 |
|
|
|
— |
|
|
|
— |
|
|
|
|
1,953,124,877 |
|
|
|
952,548,647 |
|
|
|
|
|
$ |
601,725 |
|
|
$ |
576,371 |
|
|
|
|
December 31, 2024 |
|
|||||||||||||||||
|
|
Shares |
|
|
Shares |
|
|
Original |
|
|
Aggregate |
|
|
Net |
|
|||||
Series A-1 |
|
|
149,057,400 |
|
|
|
149,057,400 |
|
|
$ |
0.000002 |
|
|
$ |
— |
|
|
$ |
— |
|
Series A-2 |
|
|
41,757,975 |
|
|
|
41,757,975 |
|
|
$ |
0.286584 |
|
|
|
17,728 |
|
|
|
11,967 |
|
Series A-3 |
|
|
133,246,286 |
|
|
|
— |
|
|
$ |
0.286584 |
|
|
|
— |
|
|
|
— |
|
Series A-3-X |
|
|
133,246,286 |
|
|
|
133,246,286 |
|
|
$ |
0.286584 |
|
|
|
56,567 |
|
|
|
69,323 |
|
Series A-4 |
|
|
27,130,907 |
|
|
|
9,043,636 |
|
|
$ |
0.442300 |
|
|
|
5,926 |
|
|
|
5,926 |
|
Series A-4-X |
|
|
27,130,907 |
|
|
|
18,087,271 |
|
|
$ |
0.442300 |
|
|
|
11,851 |
|
|
|
11,851 |
|
Series B |
|
|
419,496,627 |
|
|
|
284,439,710 |
|
|
$ |
0.518300 |
|
|
|
214,143 |
|
|
|
180,097 |
|
Series B-X |
|
|
419,496,627 |
|
|
|
135,056,917 |
|
|
$ |
0.518300 |
|
|
|
97,816 |
|
|
|
97,816 |
|
Series C |
|
|
181,859,452 |
|
|
|
181,859,452 |
|
|
$ |
0.550700 |
|
|
|
143,014 |
|
|
|
140,810 |
|
Series C-1 |
|
|
420,702,410 |
|
|
|
— |
|
|
$ |
0.466470 |
|
|
|
— |
|
|
|
— |
|
|
|
|
1,953,124,877 |
|
|
|
952,548,647 |
|
|
|
|
|
$ |
547,045 |
|
|
$ |
517,790 |
|
|
The significant terms of the redeemable convertible preferred stock (“Preferred Stock”) are summarized as below:
Dividends
Holders of each series of Preferred Stock shall be entitled to receive dividends only when and if declared by the Board of Directors. Dividends shall be non-cumulative and distributed in the sequence of (1) Series C and Series C-1 Preferred Stock, (2) Series B and Series B-X Preferred Stock, (3) Series A-4 and Series A-4-X Preferred Stock, (4) Series A-3, Series A-3-X, and Series A-2 Preferred Stock, and (5) Series A-1 Preferred Stock. After payment of dividends to the holders of redeemable convertible preferred stock, any additional dividends shall be distributed among all holders of common stock and Preferred Stock pro rata on an as-converted to common stock basis. No dividends have been declared or paid through December 31, 2025.
F-73
Table of Contents
PLUS AUTOMATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2025 AND 2024
Liquidation Preference
A Liquidation Event includes any liquidation, dissolution or winding up of the Company, whether voluntary or involuntary. The liquidation price of each series of Preferred Stock shall be equal to the greater of (1) total sum of (a) the original issuance price, (b) all declared but unpaid dividends, and (c) an interest of 10% of the original issue price per share per annum calculated on a compound basis for each year from either the original date or November 18, 2020 with respect to Series A-4, Series A-4-X, Series A-3, Series A-3-X, Series A-2 and Series A-1 Preferred Stock, or (2) such amount per share as would otherwise be payable had such series of Preferred Stock been converted into Class A common stock immediately prior to such liquidation.
In the event of any Liquidation Event or Deemed Liquidation Event, all assets and funds of the Company legally available for distribution to the stockholders shall be distributed in the preference order of (1) Series C and Series C-1 Preferred Stock, (2) Series B and Series B-X Preferred Stock; (3) Series A-4, Series A-4-X, Series A-3 Preferred Stock, Series A-3-X and Series A-2 Preferred Stock; (4) Series A-1 Preferred Stock, at the liquidation price. If there are any assets or funds remaining after the distribution of the liquidation price in full to the holders of Preferred Shares, the remaining assets and funds of the Company available for distribution shall be distributed among all holders of common stock and Preferred Stock pro rata on an as-converted to common stock basis.
Redemption Rights
The Series C, Series C-1, Series B, Series B-X, Series A-4, and Series A-4-X Preferred Stock held by investors owning at least 32,890,192 shares of common stock on an as-converted basis (“Major Investors”) are optionally redeemable, at any time after the earlier of: (1) November 18, 2026; (2) the relevant materials or information provided by the Company to the Major Investors is materially different from the actual situation, or there is any concealment, misleading information, misrepresentation or suspected fraud of the Company; (3) material breach by any group company or founder; (4) any material violation by any founder of any applicable laws; (5) the Company has lost or is unable to continue to maintain the necessary business qualifications to operate its business; (6) any of the founders resign from or disposes more than half of his/her shares of the Company; (7) the termination of employment of 50% or more of the key employees of the Company; or (8) any other class or series of shares becomes redeemable.
The Series A-3 and Series A-3-X Preferred Stock held by Major Investors are optionally redeemable, at any time after the earlier of: (1) the termination of employment of any founder with the Company; (2) any material breach by the Company, or any founder or founder entity; (3) the principal business of the Company being suspended for more than six months or permanently shut down, or lose any material license, permit or government approvals of the Company or the occurrence of any material adverse effect on the businesses of the Company; (4) any material violation by any founder or founder entity of any applicable laws; or (5) any other class or series of shares becomes redeemable.
The redemption value of each Series C, Series C-1, Series B, Series B-X, Series A-4, Series A-4-X, Series A-3 and Series A-3-X Preferred Stock is equal to the higher of:
If the Company’s assets or funds on the redemption date are insufficient to pay the full redemption price, those assets or funds shall be used to pay the redemption price to the redeeming stockholders in the sequence of (1) Series C and Series C-1 Preferred Stock (2) Series B and Series B-X Preferred Stock, (3) Series A-4, Series A-4-X, Series A-3 and Series A-3-X Preferred Stock, in a pro-rata manner in accordance with the relative full amounts owed thereon. For the years ended December 31, 2025 and 2024, the Company recognized $58.6 million, and $29.8 million of accretion on the Redeemable Convertible Preferred Stock, respectively.
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Table of Contents
PLUS AUTOMATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2025 AND 2024
Series A-1 and Series A-2 Preferred Stock are not redeemable other than upon a Deemed Liquidation Event.
Voting Rights
The Series A-3-X, the Series A-4-X and the Series B-X Preferred Stock are entitled to 1/4 vote per share on an as-converted to Class A common stock basis. All other series of Preferred Stock are entitled to one vote for each share of Class A common stock into such Preferred Stock could be converted. The holders of Preferred Stock, voting separately as a single class, elect three directors of the Company’s Board of Directors. The holders of common stock, voting separately as a single class, elect two directors of the Company’s Board of Directors.
Conversion
Each holder of Preferred Stock has the right to convert any or all Preferred Shares, at any time, into a number of fully paid and nonassessable shares of Class A common stock determined by dividing the original issue price by the conversion price in effect at the time. The initial conversion price equals the original issue price and is subject to anti-dilution adjustments.
Each share of Preferred Stock shall automatically be converted into a number of Class A common stock shares at the then-effective and applicable conversion price upon the earlier of (1) immediately prior to the closing of a Qualified Public Offering, including a direct listing or de-SPAC Transaction, as defined in the Company’s Amended and Restated Certificate of Incorporation, or (2) the written consent of holders of a majority of the voting power of the then outstanding shares of Preferred Stock, and the holders of a majority of the voting power of the then outstanding shares of the Series B Preferred Stock and Series C Preferred Stock, voting as separate classes. In addition, each share of Series A-3-X, Series A-4-X and Series B-X Preferred Stock shall automatically be converted into one fully paid and nonassessable share of Series A-3, Series A-4 or Series B Preferred Stock, respectively upon the earlier of (1) the transfer of such shares other than an affiliate after the one year anniversary of the first issuance of shares in such series, or (2) upon a change of control without approval of the Board of Directors.
12. Warrants
On January 27, 2021, the Company entered into a Master Purchase Agreement with Amazon Logistics, Inc. (“Amazon”) for the purchase of certain goods, software, or other items from the Company. Concurrent with the Master Purchase Agreement, the parties entered into a warrant agreement (“Amazon Warrant”) on June 19, 2021 (“Issuance Date”) to purchase 420.7 million shares at an exercise price of $0.46647 per share. The Amazon Warrant is exercisable into shares of the Company’s Series C-1 Preferred Stock prior to the closing of a de-SPAC Transaction and into Class A common stock after the completion of a Qualified IPO (the “Warrant Shares”). The vested portions of the Amazon Warrant are exercisable at any time at the option of Amazon prior to expiration of the warrant on June 19, 2029. The potential closing of the de-SPAC Transaction discussed in Note 1 does not qualify as a change of control event that will result in the accelerated vesting of the Amazon Warrant.
At the election of Amazon, any vested portion of the Amazon Warrant will be exercisable either on a cash basis by the payment of the applicable aggregate exercise price or on a net share basis under which Amazon is not obligated to the payment of the applicable aggregate exercise price and receives a reduced number of shares by the number of shares with a fair market value equal to the aggregate exercise price on the date of exercise.
Under the terms of Amazon Warrant, (1) 84.1 million Warrant Shares were vested and were immediately exercisable (“Initial Warrant Shares”) on the issuance date; and (2) the balance of Warrant Shares will vest and will be immediately exercisable based upon payments by Amazon on the Company's products or services until the total payments from Amazon equal to $200 million (“Remaining Warrant Shares”).
Accounting for Amazon Warrant
The Amazon Warrant is determined to be a freestanding financial instrument that represents consideration payable to a customer in the form of the equity instrument issued not in exchange for distinct goods and services. The Company assessed the accounting treatment for Amazon Warrant under ASC Topic 718.
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Table of Contents
PLUS AUTOMATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2025 AND 2024
Prior to the consummation of a de-SPAC Transaction, the underlying shares for the Amazon Warrant are Series C-1 Shares which are contingently redeemable outside of the Company’s control (Note 11). The Amazon Warrant Shares are therefore classified as a liability and subsequently measured at fair value with the change of fair value being recorded in the consolidated statements of operations and comprehensive loss. In accordance with ASC Topic 718, the fair value of each tranche of the Amazon Warrant is determined at the grant date, which is the date of the warrant agreement, when the Company becomes contingently obligated to issue share-based payment awards to Amazon. Upon the consummation of the Qualified IPO, the securities to be issued upon exercise of the Amazon Warrant will be shares of the Company’s Class A common stock that are not redeemable. Therefore, the Amazon Warrant will be reclassified as equity upon the completion of a Qualified IPO or de-SPAC Transaction.
The Initial Warrant Shares vested and were immediately exercisable on the issuance date with the grant date fair value of the Warrant Shares recognized as an upfront payment to the customer, which resulted in reduction of revenue over the contract term. The Remaining Warrant Shares vest upon a specific amount of future revenue from Amazon. Accordingly, the Remaining Warrant Shares are considered as payments to a customer and therefore will be recorded as a reduction of revenue based on the grant date fair value. The vested portion of the Remaining Warrant Shares are recorded as liability originally based on the grant date fair value and subsequently measured at the fair value until the Company completes a de-SPAC Transaction when the vested portion of the Remaining Warrant Shares will be reclassified as equity. The changes in fair value are recorded in the consolidated statements of operations and comprehensive loss. The Company has elected to account for forfeitures of equity-based awards with service conditions as they occur. This entity-wide policy applies to all non-employee equity-based instruments, including those issued to customers. As a result, the Company recognizes a reduction to revenue based on the fair value of all warrants issued under the Amazon Warrant agreement, unless forfeited, in which case the transaction price is adjusted accordingly.
During the years ended December 31, 2025 and 2024, no portion of the Remaining Warrant Shares vested. As of December 31, 2025 and 2024, the fair value of the 88,347,506 Initial Warrant Shares vested shares was $18.3 million and $13.2 million, respectively, and was recorded as a warrant liability. During the years ended December 31, 2025 and 2024, the fair value of the Amazon Warrants increased by $5.1 million and $2.4 million, respectively, which was recognized as a loss in the consolidated statement of operations and comprehensive loss.
13. Stock-Based Compensation
Equity Incentive Plans
As of December 31, 2025, the Company had outstanding awards under its 2017 Share Plan (“2017 Plan”) and the 2021 Share Incentive Plan (“2021 Plan”). Under the 2017 Plan, the Company granted Options and RSAs. Under the 2021 Plan, the Company granted RSUs, PRSUs, and Penny Options. These awards are further classified as liability or equity type awards.
As of December 31, 2025, there were 58,013,135 and 163,364,351 shares reserved for issuance under the 2017 Plan and 2021 Plan, respectively.
Components of Stock-Based Compensation
Stock-based compensation is presented in the consolidated statements of operations and comprehensive loss as follows:
|
Year Ended December 31, |
|
|||||
(in thousands) |
2025 |
|
|
2024 |
|
||
Research and development |
$ |
245 |
|
|
$ |
2,506 |
|
Sales, marketing, general, and administrative |
|
1,585 |
|
|
|
1,574 |
|
Total stock-based compensation |
$ |
1,830 |
|
|
$ |
4,080 |
|
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Table of Contents
PLUS AUTOMATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2025 AND 2024
Stock-based compensation is recognized for the following types of awards:
|
Year Ended December 31, |
|
|||||
(in thousands) |
2025 |
|
|
2024 |
|
||
Common stock options |
$ |
90 |
|
|
$ |
631 |
|
Restricted stock units |
|
814 |
|
|
|
1,640 |
|
Restricted share awards |
|
926 |
|
|
|
1,610 |
|
Other share-settled awards |
|
— |
|
|
|
199 |
|
Total stock-based compensation |
$ |
1,830 |
|
|
$ |
4,080 |
|
Stock-based compensation includes the following types of awards:
|
Year Ended December 31, |
|
|||||
(in thousands) |
2025 |
|
|
2024 |
|
||
Equity-classified awards |
$ |
1,401 |
|
|
$ |
3,004 |
|
Liability-classified awards |
|
429 |
|
|
|
1,076 |
|
Total stock-based compensation |
$ |
1,830 |
|
|
$ |
4,080 |
|
Common Stock Options with Service Conditions
In July 2023, the Company granted 49,000,000 Penny Options under the 2021 Plan with an exercise price of $0.000002 equal to the par value per share, of which 30,000,000 were exercised during the year ended December 31, 2025, and the remaining 19,000,000 Penny Options remained outstanding as of December 31, 2025. Penny Options are treated as outstanding shares for net loss per share purposes in all periods presented. No Options were granted during the years ended December 31, 2025 and 2024.
The following table summarizes the activity related to the outstanding Penny Options and Options with service conditions:
|
|
Number of |
|
|
Weighted |
|
|
Aggregate Intrinsic Value |
|
|
Weighted |
|
||||
Outstanding as of December 31, 2024 |
|
|
120,100,460 |
|
|
$ |
0.04 |
|
|
$ |
24,804 |
|
|
|
6.3 |
|
Exercised |
|
|
(43,036,819 |
) |
|
$ |
0.01 |
|
|
|
|
|
|
|
||
Forfeited |
|
|
(50,506 |
) |
|
$ |
0.07 |
|
|
|
|
|
|
|
||
Outstanding as of December 31, 2025 |
|
|
77,013,135 |
|
|
$ |
0.06 |
|
|
$ |
40,643 |
|
|
|
4.9 |
|
Vested and exercisable as of December 31, 2025 |
|
|
77,013,135 |
|
|
$ |
0.06 |
|
|
$ |
40,643 |
|
|
|
4.9 |
|
The outstanding Penny Options and Options were fully vested as of December 31, 2025, and the Company recognized stock-based compensation in full prior to that date. The aggregate intrinsic value of the options exercised during the years ended December 31, 2025 and 2024 was $21.5 million and $0.1 million, respectively.
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Table of Contents
PLUS AUTOMATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2025 AND 2024
The activity table above includes the Options held by the PRC Holders as of July 31, 2023, that became subject to the Plus PRC Service Requirement and are liability-classified. The following table represents the activity related to liability classified common stock options:
|
|
Number of |
|
|
Weighted |
|
|
Weighted Average Remaining Contractual Life (In Years) |
|
|||
Outstanding as of December 31, 2024 |
|
|
163,720 |
|
|
$ |
0.29 |
|
|
|
6.6 |
|
Reclassified to equity |
|
|
(163,720 |
) |
|
$ |
0.29 |
|
|
|
|
|
Outstanding as of December 31, 2025 |
|
|
— |
|
|
$ |
— |
|
|
|
— |
|
The intrinsic value of the liability-classified Options held by the PRC Holders and the associated liability were immaterial in all periods presented. The Company reclassified the liability-classified Option to equity prior to December 31, 2025, as the Plus PRC Service Requirement was met. The settlement-date fair value of the liability-classified Options is at least equal to the per-share grant-date fair value.
Restricted Stock Units with Service Conditions
The following table summarizes the activity related to the outstanding unvested RSUs:
|
|
Equity-Classified RSUs |
|
|
Liability-Classified RSUs |
|
||||||||||
|
|
Number of |
|
|
Weighted |
|
|
Number of |
|
|
Weighted |
|
||||
Unvested as of December 31, 2024 |
|
|
859,823 |
|
|
$ |
0.63 |
|
|
|
878,589 |
|
|
$ |
0.72 |
|
Vested |
|
|
(758,613 |
) |
|
$ |
0.64 |
|
|
|
(857,755 |
) |
|
$ |
0.72 |
|
Forfeited |
|
|
(52,996 |
) |
|
$ |
0.74 |
|
|
|
(20,834 |
) |
|
$ |
0.72 |
|
Unvested as of December 31, 2025 |
|
|
48,214 |
|
|
$ |
0.38 |
|
|
|
— |
|
|
$ |
— |
|
As of December 31, 2025, the unrecognized stock-based compensation related to the unvested equity-classified RSUs was nominal. The unvested liability-classified RSUs above are held by the PRC Holders and are subject to the Plus PRC Service Requirement. The associated liability is reclassified to equity as the Plus PRC Service Requirement is met. The settlement-date fair value of the liability-classified RSUs is at least equal to the per-share grant-date fair value.
The following table summarizes the activity related to the vested and unreleased RSUs:
|
|
Number of |
|
|
Weighted |
|
||
Outstanding as of December 31, 2024 |
|
|
7,131,104 |
|
|
$ |
0.70 |
|
Vested |
|
|
1,616,368 |
|
|
$ |
0.68 |
|
Released |
|
|
(617,841 |
) |
|
$ |
0.73 |
|
Outstanding as of December 31, 2025 |
|
|
8,129,631 |
|
|
$ |
0.69 |
|
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Table of Contents
PLUS AUTOMATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2025 AND 2024
Restricted Stock Units with Service and Performance Conditions
The following table summarizes the activity related to the outstanding unvested PRSUs:
|
|
Equity-Classified PRSU |
|
|
Liability-Classified PRSU |
|
||||||||||
|
|
Number of |
|
|
Weighted |
|
|
Number of |
|
|
Weighted |
|
||||
Unvested as of December 31, 2024 |
|
|
108,656,636 |
|
|
$ |
0.19 |
|
|
|
1,304,345 |
|
|
$ |
0.18 |
|
Granted |
|
|
33,626,350 |
|
|
$ |
0.44 |
|
|
|
— |
|
|
$ |
— |
|
Reclassified to equity |
|
|
1,056,996 |
|
|
$ |
0.18 |
|
|
|
(1,056,996 |
) |
|
$ |
0.18 |
|
Forfeited |
|
|
(7,680,091 |
) |
|
$ |
0.21 |
|
|
|
(75,627 |
) |
|
$ |
0.17 |
|
Unvested as of December 31, 2025 |
|
|
135,659,891 |
|
|
$ |
0.26 |
|
|
|
171,722 |
|
|
$ |
0.17 |
|
As of December 31, 2025, none of the PRSUs have vested and no stock-based compensation was recognized since the underlying performance condition linked to a liquidity event was not probable of occurrence. The closing of the de-SPAC Transaction discussed in Note 1 represents a qualified liquidity event for the vesting of the outstanding PRSUs to the extent that the underlying service requirement is met as of the closing date. As of December 31, 2025, there was $34.9 million of unrecognized stock-based compensation related to the unvested equity-classified PRSUs.
The unvested liability-classified PRSUs described above are held by the PRC Holders and are subject to the Plus PRC Service Requirement. To the extent that the Plus PRC Service Requirement is met, the PRSUs held by the PRC Holders are no longer precluded from being classified in stockholders' equity. The Company reclassifies these awards to equity as the Plus PRC Service Requirement is met and remeasures the per-share basis for these awards using the fair value per share as of the reclassification date.
Payment in Shares under Collaboration Agreement
In December 2023, the Company entered into a collaboration agreement (“CA”) with a third-party related to the development and integration of the Company’s technology. Under the CA, the Company may receive certain materials and technical assistance services from this third-party and settle the required fees in cash or shares. The number of shares issuable is determined as a fixed dollar amount based on the services that the Company elects to settle in shares (“TAS Costs”), up to $10.0 million (“Threshold”). If the Company executes Series D financing, the shares subject to the TAS Costs will be issued in the form of Series D redeemable convertible preferred stock.
Upon the de-SPAC Transaction discussed in Note 1, the Company will be required to issue all shares subject to the Threshold in the form of common stock of the successor entity based on the implied fair value per share of the Company’s common stock. These shares will vest only to the extent that the Company incurred the TAS Costs prior to the de-SPAC Transaction and will vest in the future if the Company incurs additional TAS Costs, up to the Threshold amount. The Company is required to use reasonable efforts to reach the Threshold by December 31, 2029. As of December 31, 2025, the outstanding TAS Costs liability was $0.2 million.
F-79
Table of Contents
PLUS AUTOMATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2025 AND 2024
Executive RSA and Related RSA Loans
Historical Treatment for Executive RSA
Between February 2019 and February 2021, the Company issued four loans to two executives with an aggregate principal amount of $1.5 million (“RSA Loans”). All RSA Loans issued matured in five years from issuance. The RSA Loans were used to finance the purchase of 17,000,000 RSAs issued to these two executives (“Executive RSAs”). The purchase price of the Executive RSAs was equal to the fair value of the underlying shares on the grant date. The Executive RSAs are subject to service-based vesting, which occurs between two and four years from their grant dates. The unvested Executive RSAs are subject to repurchase at the applicable purchase price while the RSA Loans are outstanding.
The Company determined that the RSA Loans were substantively issued to the executives on a non-recourse basis, as it has a history of not demanding principal amounts when due and plans to settle the RSA Loans by repurchasing part of the Executive RSAs. As such, the Executive RSAs are treated as common stock options, exercisable initially on or before the contractual maturities of the RSA Loans. The principal and interest on the RSA Loans are treated as part of the exercise price and are not recognized in the consolidated financial statements until repaid. The Executive RSAs are treated as nonvested shares for accounting purposes, since the grantees are not exposed to the risks associated with share ownership while the RSA Loans remain outstanding.
Extension of Options on Executive RSA
In February 2024 and December 2024, two out of the four RSA Loans, with a principal amount of $0.7 million, reached maturity and were not called by the Company. As discussed below, three of the RSA Loans with a principal amount of $1.3 million were subsequently repaid in September 2025. In December 2025, the remaining RSA Loan with a principal amount of $0.2 million also reached maturity and was not called by the Company.
The Company determined that each expiration of the three RSA Loans above represented a substantive extension of the expired options on the underlying Executive RSAs through the anticipated settlement date. Since the required service periods were fully met at the time of their respective extensions, the associated expense was recognized in full. During the years ended December 31, 2025 and 2024, the Company recognized $0.9 million and $1.5 million, respectively, in stock-based compensation, representing the fair value of the replacement options on the Executive RSAs for which the RSA Loans reached their market value. The replacement options were measured using the BSM with the following assumptions:
|
|
December 31, |
||
|
|
2025 |
|
2024 |
Time to settlement (in years) |
|
1.0 |
|
2.1 - 3.1 |
Volatility |
|
67% |
|
62% - 79% |
Risk-Free Interest Rate |
|
3.5% |
|
4.1 - 4.3% |
Dividend Yield |
|
— |
|
— |
Repurchase of Vested Executive RSA
In September 2025, the Company executed a stock repurchase agreement to repurchase 2,971,825 Executive RSAs from an executive officer at $0.48 per share for approximately $1.4 million. The repurchase price did not exceed the estimated fair value per share on the repurchase date. The proceeds from this transaction were fully applied to settle the outstanding principal amount and accrued interest for the RSA Loans initially used by this executive officer to purchase 15,000,000 Executive RSAs.
In December 2025, the Company executed another stock repurchase agreement with the same executive officer, pursuant to which the Company repurchased 984,783 fully vested shares of common stock at $0.57 per share for approximately $0.6 million. For the repurchases executed during the year ended December 31, 2025, the repurchase price did not exceed the estimated fair value per share on the repurchase date. The constructive cash flows from the repayment of the RSA Loans and the stock repurchases are presented as the proceeds from exercise of stock options and the repurchase of restricted common stock awards, respectively, in the consolidated statement of cash flows.
F-80
Table of Contents
PLUS AUTOMATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2025 AND 2024
14. Income Taxes
The components of loss before provision for income taxes are as follows:
|
|
Year Ended December 31, |
|
|||||
(in thousands) |
|
2025 |
|
|
2024 |
|
||
Domestic |
|
$ |
(85,354 |
) |
|
$ |
(62,043 |
) |
Foreign |
|
|
(7,987 |
) |
|
|
919 |
|
Loss before provision for income taxes |
|
$ |
(93,341 |
) |
|
$ |
(61,124 |
) |
For the years ended December 31, 2025 and 2024, the income tax expenses included in the consolidated statements of comprehensive loss consist of the following:
|
|
Year Ended December 31, |
|
|||||
(in thousands) |
|
2025 |
|
|
2024 |
|
||
Current |
|
|
|
|
|
|
||
Federal |
|
$ |
3 |
|
|
$ |
— |
|
State |
|
|
1 |
|
|
|
— |
|
Foreign |
|
|
65 |
|
|
|
— |
|
Total current income tax expense |
|
$ |
69 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
||
Deferred |
|
|
|
|
|
|
||
Federal |
|
$ |
— |
|
|
$ |
— |
|
State |
|
|
— |
|
|
|
— |
|
Foreign |
|
|
— |
|
|
|
— |
|
Total deferred income tax expense (benefit) |
|
$ |
— |
|
|
$ |
— |
|
|
|
|
|
|
|
|
||
Total income tax expense |
|
$ |
69 |
|
|
$ |
— |
|
F-81
Table of Contents
PLUS AUTOMATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2025 AND 2024
The reconciliation of taxes at the federal statutory rate to the Company’s provision for income taxes for the years ended December 31, 2025 and 2024 are as follows:
|
|
Year Ended December 31, |
|
|||||||||||||
(in thousands) |
|
2025 |
|
|
2024 |
|
||||||||||
US federal statutory tax rate (country of domicile) |
|
$ |
(19,602 |
) |
|
|
21.0 |
% |
|
$ |
(12,836 |
) |
|
|
21.0 |
% |
State and local income taxes, net of federal effect |
|
|
1 |
|
|
—% |
|
|
|
— |
|
|
—% |
|
||
Foreign tax effects |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cayman |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Foreign rate differential |
|
|
1,747 |
|
|
|
(1.9 |
%) |
|
|
(167 |
) |
|
|
0.3 |
% |
Other foreign jurisdictions |
|
|
(221 |
) |
|
|
0.2 |
% |
|
|
(26 |
) |
|
—% |
|
|
Cross border tax laws |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Subpart F |
|
|
52 |
|
|
|
(0.1 |
%) |
|
|
2,195 |
|
|
|
(3.6 |
%) |
Tax credits |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Research and development credits |
|
|
(945 |
) |
|
|
1.0 |
% |
|
|
(1,170 |
) |
|
|
1.9 |
% |
Changes in valuation allowance |
|
|
17,223 |
|
|
|
(18.4 |
%) |
|
|
10,588 |
|
|
|
(17.3 |
%) |
Nontaxable or nondeductible items |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Share-based compensation |
|
|
358 |
|
|
|
(0.4 |
%) |
|
|
1,335 |
|
|
|
(2.2 |
%) |
Fair value adjustments on financial instruments |
|
|
1,480 |
|
|
|
(1.6 |
%) |
|
|
— |
|
|
—% |
|
|
Other |
|
|
(240 |
) |
|
|
0.3 |
% |
|
|
81 |
|
|
|
(0.1 |
%) |
Changes in unrecognized tax benefits |
|
|
216 |
|
|
|
(0.2 |
%) |
|
|
— |
|
|
—% |
|
|
Income tax expense |
|
$ |
69 |
|
|
|
(0.1 |
%) |
|
$ |
— |
|
|
—% |
|
|
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred taxes are as follows:
|
|
Year Ended December 31, |
|
|||||
(in thousands) |
|
2025 |
|
|
2024 |
|
||
Deferred tax assets: |
|
|
|
|
|
|
||
Net operating loss carryforwards |
|
$ |
35,092 |
|
|
$ |
24,653 |
|
Tax credit carryforwards |
|
|
9,846 |
|
|
|
8,012 |
|
Capitalization of research and development costs |
|
|
25,511 |
|
|
|
20,711 |
|
Advance payments |
|
|
4,630 |
|
|
|
4,649 |
|
Warrants |
|
|
3,852 |
|
|
|
2,789 |
|
Other |
|
|
3,760 |
|
|
|
4,057 |
|
Total deferred tax assets |
|
|
82,691 |
|
|
|
64,871 |
|
Valuation allowance |
|
|
(81,164 |
) |
|
|
(63,220 |
) |
Total deferred tax assets, net of valuation allowance |
|
$ |
1,527 |
|
|
$ |
1,651 |
|
Deferred tax liabilities: |
|
|
|
|
|
|
||
Right-of-use assets |
|
$ |
(103 |
) |
|
$ |
(543 |
) |
Intangible assets |
|
|
(1,424 |
) |
|
|
(1,108 |
) |
Total deferred tax liabilities |
|
|
(1,527 |
) |
|
|
(1,651 |
) |
Deferred tax assets (liabilities), net |
|
$ |
— |
|
|
$ |
— |
|
F-82
Table of Contents
PLUS AUTOMATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2025 AND 2024
Cash paid for income taxes, net of refunds received, by jurisdiction are as follows:
|
Year Ended December 31, |
|
|||||
(in thousands) |
2025 |
|
|
2024 |
|
||
Federal |
$ |
— |
|
|
$ |
131 |
|
State |
|
|
|
|
|
||
California |
|
1 |
|
|
|
— |
|
Florida |
|
— |
|
|
|
52 |
|
Other States |
|
1 |
|
|
|
2 |
|
Cash paid for income taxes, net of refunds received |
$ |
2 |
|
|
$ |
185 |
|
The realization of deferred tax assets is dependent upon the generation of sufficient taxable income of the appropriate character in future periods. The Company regularly assesses its ability to realize the deferred tax assets and establishes a valuation allowance if it is more-likely-than-not that some portion of the deferred tax assets will not be realized. The Company weighed all available positive and negative evidence, including its earnings and determined that it is more likely than not that its U.S. federal and state deferred tax assets will not be realizable in the future. Accordingly, the Company has recorded a valuation allowance against its net U.S. deferred tax assets. The valuation allowance increased by $17.9 million and $11.0 million during the years ended December 31, 2025 and 2024, respectively. The increase in the valuation allowance was recorded in the consolidated statements of operations and comprehensive loss.
As of December 31, 2025 and 2024, the Company had cumulative U.S. federal net operating losses carryforwards of $138.6 million and $88.9 million, which carry forward indefinitely, respectively. As of December 31, 2025 and 2024, the Company had cumulative state net operating loss carryforwards of $70.1 million and $69.8 million, which begin to expire in 2038, respectively. As of December 31, 2025 and 2024, the Company has federal research tax credit carryforwards of $10.7 million and $8.8 million, respectively, and state research tax credit carryforwards of $9.0 million, and $7.2 million, respectively. The Company's federal research tax credit carryforwards will begin to expire in 2038, while its state research tax credit carryforwards carry forward indefinitely.
Net operating losses and tax credit carryforwards may become subject to an annual limitation in the event of certain cumulative changes in the ownership interest of significant stockholders over a three-year period in excess of 50%, as defined under Sections 382 and 383 of the Internal Revenue Code as well as similar state provisions. This could limit the amount of tax attributes that can be utilized annually to offset future taxable income or tax liabilities. The amount of the annual limitation is determined based on the value of the Company immediately prior to the ownership change.
The following table reconciles the beginning and ending balances of the Company’s unrecognized tax benefit:
|
|
Year Ended December 31, |
|
|||||
(in thousands) |
|
2025 |
|
|
2024 |
|
||
Beginning balance |
|
$ |
8,017 |
|
|
$ |
5,971 |
|
Gross increases due to tax positions taken in prior periods |
|
|
241 |
|
|
|
— |
|
Gross increases due to tax positions taken in current periods |
|
|
1,842 |
|
|
|
2,046 |
|
Ending balance |
|
$ |
10,100 |
|
|
$ |
8,017 |
|
None of the unrecognized tax benefits will affect the effective tax rate if recognized due to the federal and state valuation allowance. The Company has not accrued any interest or penalties related to unrecognized tax benefits as of December 31, 2025. The Company's policy for classifying interest and penalties associated with unrecognized income tax benefits is to include such items in income tax expense. The Company's major jurisdictions are the U.S. federal and state jurisdictions. As a result of the Company's tax attribute carryforwards, tax years 2018 through December 31, 2025 remain subject to examination for U.S. income tax purposes.
F-83
Table of Contents
PLUS AUTOMATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2025 AND 2024
15. Segment Reporting and Geographic Information
The Company is currently in a pre-commercial research and development phase and is focused on developing an autonomous driving technology platform. The CODM uses net loss as the primary measure of segment profit and loss to assess performance and allocate resources in conjunction with the operating plans approved by the Board of Directors. The CODM utilizes the primary measure to monitor consolidated operating expenses, actual-to-budget variances, and trended actuals, which inform strategic decisions regarding the pace of personnel hiring, the prioritization of specific research and development initiatives, and the management of capital expenditures and overall forecasted cash burn.
In assessing performance and determining the allocation of resources, the CODM evaluates the components of net loss based on functional line items as disclosed in the consolidated statements of operations and comprehensive loss. Significant expenses include research and development, sales, marketing, general and administrative, which are separately presented on the Company’s consolidated statements of operations and comprehensive loss. The measure of segment assets is represented by the total assets of the Company as reported in the consolidated balance sheets.
A summary of long-lived assets by geographic location for the consolidated balance sheet dates presented is as follows:
|
|
December 31, |
|
|||||
(in thousands) |
|
2025 |
|
|
2024 |
|
||
Unites States |
|
$ |
2,313 |
|
|
$ |
2,633 |
|
Germany |
|
|
104 |
|
|
|
167 |
|
Total |
|
$ |
2,417 |
|
|
$ |
2,800 |
|
The Company recognized immaterial revenue during the years ended December 31, 2025 and 2024, all of which was generated in the United States.
16. Net Loss Per Share
The following potentially dilutive shares were excluded from the computation of diluted earnings per share for the periods presented because including them would have had an anti-dilutive effect:
|
|
December 31, |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
Redeemable convertible preferred stock |
|
|
952,548,647 |
|
|
|
952,548,647 |
|
Common stock options |
|
|
58,013,135 |
|
|
|
71,100,460 |
|
Executive RSAs |
|
|
2,000,000 |
|
|
|
17,000,000 |
|
Unvested RSUs with service conditions |
|
|
48,214 |
|
|
|
1,738,412 |
|
Unvested PRSUs with service and performance conditions |
|
|
135,831,613 |
|
|
|
109,960,981 |
|
Redeemable convertible preferred stock warrants |
|
|
420,702,410 |
|
|
|
420,702,410 |
|
Shares issuable under simple agreements for future equity |
|
|
93,212,269 |
|
|
|
48,483,748 |
|
Total |
|
|
1,662,356,288 |
|
|
|
1,621,534,658 |
|
F-84
Table of Contents
PLUS AUTOMATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2025 AND 2024
17. Subsequent Events
The Company has reviewed and evaluated material subsequent events from the balance sheet date of December 31, 2025, through March 31, 2026, the date on which these consolidated financial statements were available to be issued. Other than those noted below, no subsequent events have been identified for disclosure.
On January 27, 2026, Churchill’s meeting to approve the proposed de-SPAC Transaction had been postponed from February 3, 2026, to February 11, 2026. On February 9, 2026, the Company and Churchill announced that Churchill’s meeting to approve the proposed de-SPAC Transaction had been proposed from February 11, 2026 to April 15, 2026, or such other date to be determined and announced by Churchill, and on March 31, 2026, the Company announced Churchill’s meeting to approve the proposed de-SPAC Transaction was further rescheduled until April 24, 2026.
During February 2026, the Company committed to a plan to settle the discounted options liability contingent upon the closing of the de-SPAC Transaction. The Company estimates that the increase to the discounted options liability as a result of approved changes in 2026 to the Company’s plan is estimated to be approximately $1.7 million.
On March 26, 2026, the Company entered into an Autonomy Acceleration Program Agreement (the “Agreement”) with TRATON AB (“TRATON”). The Agreement expands on the Company and TRATON’s global partnership to accelerate the development and scaled commercial deployment of on-highway autonomous trucking. Pursuant to the agreement, TRATON will pay the Company $25 million (the “Acceleration Payment”) for providing certain autonomy data, tools and services to TRATON in support of the accelerated progression of their Level 2+ program.
Additionally, subject to completion of the Company’s business combination with Churchill and TRATON’s payment of the Acceleration Payment, the Agreement provided that TRATON would receive warrants to purchase up to 7,500,000 shares of Class A common stock of the post-closing company at an exercise price of $11.50 per share (the “Warrants”). The parties have agreed to issue the Warrants in connection with the Company’s business combination with TVA III and will issue the Warrants effective immediately prior to the First Effective Time. 2,500,000 of the warrants will not be subject to vesting requirement, and the remaining 5,000,000 warrants would be vested upon achievement of qualifying revenue from TRATON as follows; 1,250,000 shares subject to the warrants would vest upon recognition by the Company of $100 million in qualifying revenue from TRATON; 1,250,000 shares subject to the Warrants would vest upon recognition by the Company of $200 million in cumulative qualifying revenue from TRATON; and the remaining 2,500,000 shares subject to the Warrants would vest upon recognition by the Company of $400 million in cumulative qualifying revenue from TRATON.
F-85
Table of Contents
PLUS AUTOMATION, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, in thousands, except share and per share data)
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
|
|
June 30, |
|
|
December 31, |
|
||
|
|
|
||||||
Assets |
|
|
|
|
|
|
||
Current assets: |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
18,319 |
|
|
$ |
23,977 |
|
Short-term marketable securities |
|
|
— |
|
|
|
171 |
|
Accounts and other receivables |
|
|
2,757 |
|
|
|
118 |
|
Deferred offering costs |
|
|
715 |
|
|
|
8,011 |
|
Prepaid expenses and other current assets |
|
|
1,577 |
|
|
|
5,254 |
|
Total current assets |
|
|
23,368 |
|
|
|
37,531 |
|
Long-term investment |
|
|
|
|
|
— |
|
|
Property and equipment, net |
|
|
1,906 |
|
|
|
2,417 |
|
Operating lease right-of-use assets |
|
|
198 |
|
|
|
489 |
|
Other noncurrent assets |
|
|
— |
|
|
|
— |
|
Total assets |
|
$ |
25,472 |
|
|
$ |
40,437 |
|
Liabilities, Redeemable Convertible Preferred Stock, and Stockholders’ Deficit |
|
|
|
|
|
|
||
Current liabilities: |
|
|
|
|
|
|
||
Accounts payable |
|
$ |
8,676 |
|
|
$ |
8,534 |
|
Advance payments |
|
|
81 |
|
|
|
— |
|
Operating lease liabilities, current |
|
|
180 |
|
|
|
587 |
|
Accrued compensation and benefits |
|
|
3,773 |
|
|
|
2,284 |
|
Discounted options liability |
|
|
2,480 |
|
|
|
1,986 |
|
Simple agreements for future equity, current |
|
|
22,904 |
|
|
|
25,561 |
|
Accrued and other current liabilities |
|
|
802 |
|
|
|
2,233 |
|
Total current liabilities |
|
|
38,896 |
|
|
|
41,185 |
|
Operating lease liabilities, noncurrent |
|
|
— |
|
|
|
— |
|
Warrant liabilities |
|
|
17,730 |
|
|
|
18,302 |
|
Simple agreements for future equity, noncurrent |
|
|
28,895 |
|
|
|
33,456 |
|
Share-based awards liabilities |
|
|
221 |
|
|
|
215 |
|
Other noncurrent liabilities |
|
|
142 |
|
|
|
142 |
|
Total liabilities |
|
|
85,884 |
|
|
|
93,300 |
|
|
|
|
|
|
|
|
||
Commitments and contingencies (Note 6) |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Redeemable convertible preferred stock, $0.000002 par value; 1,953,124,877 shares authorized; 952,548,647 shares issued and outstanding as of June 30, 2026 and December 31, 2025; aggregate minimum liquidation preference of $630,860 and $601,725 as of June 30, 2026 and December 31, 2025, respectively |
|
|
593,505 |
|
|
|
576,371 |
|
Stockholders’ Deficit: |
|
|
|
|
|
|
||
Class A common stock, $0.000002 par value; 22,718,203,023 shares authorized; 150,141,221 and 130,446,121 shares issued and outstanding as of June 30, 2026 and December 31, 2025, respectively |
|
|
— |
|
|
|
— |
|
Class B common stock, $0.000002 par value; 328,672,100 shares authorized, issued, and outstanding as of June 30, 2026 and December 31, 2025 |
|
|
1 |
|
|
|
1 |
|
Additional paid-in capital |
|
|
— |
|
|
|
— |
|
Accumulated deficit |
|
|
(653,752 |
) |
|
|
(628,997 |
) |
Accumulated other comprehensive loss |
|
|
(166 |
) |
|
|
(238 |
) |
Total stockholders’ deficit |
|
|
(653,917 |
) |
|
|
(629,234 |
) |
Total liabilities, redeemable convertible preferred stock, and stockholders’ deficit |
|
$ |
25,472 |
|
|
$ |
40,437 |
|
F-86
Table of Contents
PLUS AUTOMATION, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(Unaudited, in thousands, except share and per share data)
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
|
|
Six Months Ended June 30, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Revenue |
|
$ |
25,075 |
|
|
$ |
41 |
|
Operating expenses: |
|
|
|
|
|
|
||
Research and development |
|
|
21,618 |
|
|
|
28,227 |
|
Sales, marketing, general and administrative |
|
|
18,410 |
|
|
|
9,799 |
|
HyperFoundry services support |
|
|
819 |
|
|
|
— |
|
Total operating expenses |
|
|
40,847 |
|
|
|
38,026 |
|
Loss from operations |
|
|
(15,772 |
) |
|
|
(37,985 |
) |
Other income (expense): |
|
|
|
|
|
|
||
Interest income |
|
|
121 |
|
|
|
581 |
|
Interest expense |
|
|
(9 |
) |
|
|
(6 |
) |
Other expense, net |
|
|
(22 |
) |
|
|
(792 |
) |
Loss from investments, net |
|
|
(3 |
) |
|
|
(88 |
) |
Impairment of long-term investment |
|
|
— |
|
|
|
(9,295 |
) |
Change in fair value of simple agreements for future equity |
|
|
7,218 |
|
|
|
(4,746 |
) |
Change in fair value of warrant liabilities |
|
|
572 |
|
|
|
(4,528 |
) |
Total other expense, net |
|
|
7,877 |
|
|
|
(18,874 |
) |
Loss before income taxes |
|
|
(7,895 |
) |
|
|
(56,859 |
) |
Income tax expense |
|
|
(1 |
) |
|
|
(71 |
) |
Net loss |
|
$ |
(7,896 |
) |
|
$ |
(56,930 |
) |
Accretion of redeemable convertible preferred stock to redemption value |
|
|
(17,134 |
) |
|
|
(32,626 |
) |
Net loss attributable to common stockholders |
|
$ |
(25,030 |
) |
|
$ |
(89,556 |
) |
Net loss per common share – basic |
|
$ |
(0.05 |
) |
|
$ |
(0.19 |
) |
Net loss per common share – diluted |
|
$ |
(0.05 |
) |
|
$ |
(0.19 |
) |
Weighted-average shares outstanding – basic |
|
|
487,413,981 |
|
|
|
460,064,259 |
|
Weighted-average shares outstanding – diluted |
|
|
521,868,253 |
|
|
|
460,064,259 |
|
|
|
|
|
|
|
|
||
Comprehensive loss: |
|
|
|
|
|
|
||
Net loss |
|
$ |
(7,896 |
) |
|
$ |
(56,930 |
) |
Other comprehensive loss: |
|
|
|
|
|
|
||
Foreign currency translation adjustment |
|
|
72 |
|
|
|
(208 |
) |
Comprehensive loss |
|
$ |
(7,824 |
) |
|
$ |
(57,138 |
) |
F-87
Table of Contents
PLUS AUTOMATION, INC.
CONDENSED CONSOLIDATED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT
(Unaudited, in thousands, except share data)
|
|
Redeemable Convertible Preferred Stock |
|
|
|
Common Stock |
|
|
Additional Paid |
|
|
Accumulated |
|
|
Accumulated |
|
|
Total |
|
||||||||||||||
|
|
Shares |
|
|
Amount |
|
|
|
Shares |
|
|
Amount |
|
|
in Capital |
|
|
Loss |
|
|
Deficit |
|
|
Deficit |
|
||||||||
Balance as of December 31, 2025 |
|
|
952,548,647 |
|
|
$ |
576,371 |
|
|
|
|
459,118,221 |
|
|
$ |
1 |
|
|
$ |
— |
|
|
$ |
(238 |
) |
|
$ |
(628,997 |
) |
|
$ |
(629,234 |
) |
Accretion of redeemable convertible preferred stock to redemption value |
|
|
— |
|
|
|
17,134 |
|
|
|
|
— |
|
|
|
— |
|
|
|
(275 |
) |
|
|
— |
|
|
|
(16,859 |
) |
|
|
(17,134 |
) |
Stock option exercises |
|
|
— |
|
|
|
— |
|
|
|
|
19,695,100 |
|
|
|
— |
|
|
|
259 |
|
|
|
— |
|
|
|
— |
|
|
|
259 |
|
Stock-based compensation |
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
16 |
|
|
|
— |
|
|
|
— |
|
|
|
16 |
|
Foreign currency translation adjustment |
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
72 |
|
|
|
— |
|
|
|
72 |
|
Net loss |
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(7,896 |
) |
|
|
(7,896 |
) |
Balance as of June 30, 2026 |
|
|
952,548,647 |
|
|
$ |
593,505 |
|
|
|
|
478,813,321 |
|
|
$ |
1 |
|
|
$ |
- |
|
|
$ |
(166 |
) |
|
$ |
(653,752 |
) |
|
$ |
(653,917 |
) |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
|
|
Redeemable Convertible Preferred Stock |
|
|
|
Common Stock |
|
|
Additional Paid |
|
|
Accumulated |
|
|
Accumulated |
|
|
Total |
|
||||||||||||||
|
|
Shares |
|
|
Amount |
|
|
|
Shares |
|
|
Amount |
|
|
in Capital |
|
|
Loss |
|
|
Deficit |
|
|
Deficit |
|
||||||||
Balance as of December 31, 2024 |
|
|
952,548,647 |
|
|
$ |
517,790 |
|
|
|
|
419,715,376 |
|
|
$ |
1 |
|
|
$ |
— |
|
|
$ |
(15 |
) |
|
$ |
(478,976 |
) |
|
$ |
(478,990 |
) |
Accretion of redeemable convertible preferred stock to redemption value |
|
|
— |
|
|
|
32,626 |
|
|
|
|
— |
|
|
|
— |
|
|
|
(1,058 |
) |
|
|
— |
|
|
|
(31,568 |
) |
|
|
(32,626 |
) |
Stock option exercises |
|
|
— |
|
|
|
— |
|
|
|
|
3,831,819 |
|
|
|
— |
|
|
|
440 |
|
|
|
— |
|
|
|
— |
|
|
|
440 |
|
Release of vested restricted stock units |
|
|
— |
|
|
|
— |
|
|
|
|
488,673 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Shares withheld to settle tax obligation upon release of restricted stock units |
|
|
— |
|
|
|
— |
|
|
|
|
(238,928 |
) |
|
|
— |
|
|
|
(48 |
) |
|
|
— |
|
|
|
— |
|
|
|
(48 |
) |
Reclassification of liability-classified stock options and restricted stock units to equity-classified |
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
244 |
|
|
|
— |
|
|
|
— |
|
|
|
244 |
|
Stock-based compensation |
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
422 |
|
|
|
— |
|
|
|
— |
|
|
|
422 |
|
Foreign currency translation adjustment |
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(208 |
) |
|
|
— |
|
|
|
(208 |
) |
Net loss |
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(56,930 |
) |
|
|
(56,930 |
) |
Balance as of June 30, 2025 |
|
|
952,548,647 |
|
|
|
550,416 |
|
|
|
|
423,796,940 |
|
|
$ |
1 |
|
|
$ |
— |
|
|
$ |
(223 |
) |
|
$ |
(567,474 |
) |
|
$ |
(567,696 |
) |
F-88
Table of Contents
PLUS AUTOMATION, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in thousands)
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
|
|
For the Six Months Ended June 30, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Cash flows from operating activities: |
|
|
|
|
|
|
||
Net loss |
|
$ |
(7,896 |
) |
|
$ |
(56,930 |
) |
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
|
||
Depreciation and amortization |
|
|
615 |
|
|
|
1,003 |
|
Unrealized loss on restricted marketable securities |
|
|
3 |
|
|
|
88 |
|
Unrealized foreign exchange loss, net |
|
|
6 |
|
|
|
24 |
|
Stock-based compensation |
|
|
16 |
|
|
|
716 |
|
Non-cash lease expense |
|
|
291 |
|
|
|
1,081 |
|
Change in fair value of warrant liabilities |
|
|
(572 |
) |
|
|
4,528 |
|
Change in fair value of simple agreements for future equity |
|
|
(7,218 |
) |
|
|
4,746 |
|
Deferred offering cost write off |
|
|
10,237 |
|
|
|
— |
|
Disposal (gain) loss of property and equipment |
|
|
(59 |
) |
|
|
(71 |
) |
Impairment of long-term investment |
|
|
— |
|
|
|
9,295 |
|
Accrued interest on time deposits |
|
|
(1 |
) |
|
|
(7 |
) |
Changes in operating assets and liabilities: |
|
|
|
|
|
|
||
Accounts and other receivables |
|
|
(2,639 |
) |
|
|
909 |
|
Prepaid expenses and other current assets |
|
|
1,677 |
|
|
|
92 |
|
Other noncurrent assets |
|
|
— |
|
|
|
(15 |
) |
Accounts payable |
|
|
80 |
|
|
|
(439 |
) |
Discounted options liability |
|
|
494 |
|
|
|
1,557 |
|
Accrued and other liabilities |
|
|
(1,709 |
) |
|
|
(799 |
) |
Accrued compensation and benefits |
|
|
1,489 |
|
|
|
(871 |
) |
Operating lease liabilities |
|
|
(407 |
) |
|
|
(1,327 |
) |
Advanced payments |
|
|
81 |
|
|
|
(40 |
) |
Net cash used in operating activities |
|
|
(5,512 |
) |
|
|
(36,460 |
) |
Cash flows from investing activities: |
|
|
|
|
|
|
||
Purchases of property and equipment |
|
|
(186 |
) |
|
|
(771 |
) |
Sale of long term investment |
|
|
2,000 |
|
|
|
— |
|
Proceeds from sales of property and equipment |
|
|
143 |
|
|
|
204 |
|
Purchase of short-term marketable securities |
|
|
— |
|
|
|
(390 |
) |
Maturities of short-term investments |
|
|
169 |
|
|
|
268 |
|
Net cash provided by (used in) investing activities |
|
|
2,126 |
|
|
|
(689 |
) |
Cash flows from financing activities: |
|
|
|
|
|
|
||
Proceeds from exercise of stock options |
|
|
259 |
|
|
|
440 |
|
Tax withholding payments for net share-settled restricted stock units |
|
|
— |
|
|
|
(48 |
) |
Cash received for simple agreements for future equity |
|
|
— |
|
|
|
2,435 |
|
Payment of deferred offering costs |
|
|
(2,603 |
) |
|
|
(66 |
) |
Net cash provided by financing activities |
|
|
(2,344 |
) |
|
|
2,761 |
|
Net decrease in cash and cash equivalents |
|
|
(5,730 |
) |
|
|
(34,388 |
) |
Effect of exchange rate changes on cash and cash equivalents |
|
|
72 |
|
|
|
(208 |
) |
Cash and cash equivalents at beginning of period |
|
|
23,977 |
|
|
|
49,754 |
|
Cash and cash equivalents at end of period |
|
$ |
18,319 |
|
|
$ |
15,158 |
|
Supplemental disclosures |
|
|
|
|
|
|
||
Cash paid for interest |
|
$ |
9 |
|
|
$ |
6 |
|
Cash paid for income tax |
|
$ |
1 |
|
|
$ |
722 |
|
Supplemental disclosures for noncash investing and financing activities |
|
|
|
|
|
|
||
Accretion of redeemable convertible preferred stock to redemption value |
|
$ |
17,134 |
|
|
$ |
32,626 |
|
Other receivable in exchange for sale of long-term investment |
|
$ |
(2,000 |
) |
|
$ |
— |
|
Purchase of property and equipment included in accounts payable |
|
$ |
1 |
|
|
$ |
57 |
|
Deferred offering costs included in accounts payable and accrued and other liabilities |
|
$ |
336 |
|
|
$ |
4,021 |
|
Reclassification of liability-classified stock options and restricted stock units to equity-classified |
|
$ |
— |
|
|
$ |
244 |
|
F-89
Table of Contents
PLUS AUTOMATION, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Organization and Nature of Operations
Nature of Business
Plus Automation, Inc. (“Plus Automation”) was incorporated in Delaware in March 2023 and is headquartered in California. Plus Automation and its consolidated subsidiaries are collectively referred to as the “Company” or “PlusAI”. The Company engages primarily in developing and providing self-driving technology and solutions for its customers and collaboration partners.
Churchill Agreement
On June 5, 2025, the Company entered into a definitive business combination agreement (“Churchill Business Combination Agreement”) with Churchill Capital Corp IX (“Churchill”), a publicly traded special purpose acquisition company (“SPAC”) listed on the National Association of Securities Dealers Automated Quotations exchange (“Nasdaq”) under the ticker symbol “CCIX.” On April 20, 2026, Churchill and PlusAI entered into a Termination Agreement pursuant to which the Churchill Business Combination Agreement was terminated by the mutual consent of Churchill and PlusAI, effective as of April 20, 2026.
Texas Ventures Agreement
On September 2, 2026, the Company entered into a definitive business combination agreement (“TVA Business Combination Agreement”) with Texas Ventures Acquisition III Corp. (“TVA III”), a publicly traded SPAC listed on the Nasdaq under the ticker symbol “TVA.” Subject to the TVA Business Combination Agreement closing, Merger Sub II, a wholly owned subsidiary of TVA III, will merge with and into the Company, with the Company surviving the merger as a wholly-owned subsidiary of TVA III (the “de-SPAC Transaction”). In connection with the de-SPAC Transaction, it is expected that Texas Ventures will change its name to PlusAI Holdings, Inc., and the combined company is anticipated to be listed on the Nasdaq under the new ticker symbol “PXAI”. The Company anticipates this transaction to be completed in the latter half of 2026, subject to customary closing conditions.
Liquidity and Going Concern
Since its inception, the Company has incurred net losses and negative cash flows from operations. As of June 30, 2026, the Company had an accumulated deficit of $653.8 million. The Company incurred net losses of $7.9 million during the six months ended June 30, 2026, and $56.9 million during the six months ended June 30, 2025.
Certain simple agreements for future equity (“SAFE”) became optionally redeemable for cash by the holders beginning on January 1, 2025. On December 19, 2025, the Company received a notice of redemption from one Tranche 1 SAFE holder. The redemption created an obligation for the Company to redeem this SAFE investment in cash for $10.0 million by February 7, 2026 if a liquidity event had not occurred that would have caused the conversion of the SAFE to equity. Unless the parties negotiate an alternative arrangement, the Company has communicated to the Tranche 1 holder its plans to make payment of $10.0 million to settle the outstanding SAFE at the de-SPAC Transaction closing. The Company has not incurred any interest or penalties related to the delayed payment.
On April 20, 2026, the Company and Churchill mutually agreed to terminate the Churchill Business Combination Agreement described above, which had been expected to provide the Company with additional capital resources upon closing. In connection with the termination, the Company wrote off $10.2 million of previously capitalized deferred offering costs during the six months ended June 30, 2026. Following the termination, the Company has continued to pursue alternative sources of financing, including the proposed de-SPAC Transaction with TVA III described above.
The Company estimated that its existing cash and cash equivalents balance of $18.3 million as of June 30, 2026, without any future financing, will not be sufficient for the Company to continue as a going concern. Accordingly, there is substantial doubt about the Company’s ability to continue as a going concern within one year after the date that these unaudited condensed consolidated financial statements are issued.
The Company expects to incur additional losses and negative cash flows for the foreseeable future as it continues its research and development efforts. The Company’s ability to achieve its intended business objectives is dependent upon, among other things; its ability to obtain adequate financing to fund its business plan, to execute on its commercialization targets and grow its customer base to enable the Company to scale its business, to manage expenses,
F-90
Table of Contents
PLUS AUTOMATION, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
to successfully execute across multiple business and marketing strategies, and to hire and retain appropriate personnel. While the Company has been reviewing a number of potential strategic alternatives regarding its liquidity, including securing alternative sources for additional financing, such alternatives may not be achievable on favorable conditions, or at all. The Company may from time to time enter into shorter term commercial agreements with our partners to supplement our cash needs. Future capital requirements will depend on many factors, including the rate of adoption for its autonomous driving solutions and the associated revenue growth, the expansion of supporting activities, and the timing and extent of research and development efforts. If sufficient funds on acceptable terms are not available when needed, the Company could be required to significantly reduce its operating expenses and the scope of its development activities. Failure to manage discretionary spending or raise additional financing, as needed, may adversely impact the Company’s ability to achieve its intended business objectives. The Company is pursuing a transaction with Texas Ventures and expects to use the proceeds from the de-SPAC Transaction to support its operations. There can be no assurance that the de-SPAC Transaction will be successful. In the event the Company does not complete its de-SPAC Transaction, the Company may seek additional equity or debt financing, including through strategic partnerships. Management also plans to manage the Company’s cash burn by controlling expenditures. Failure to generate sufficient cash flow from operations, raise additional capital, and reduce discretionary spending could have a material adverse effect on the Company’s ability to achieve its intended business objectives, maintain adequate liquidity, and continue as a going concern. The accompanying unaudited condensed consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
2. Summary of Principal Accounting Policies
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the requirements of the Securities and Exchange Commission for interim financial reporting. Accordingly, certain footnotes or other financial information that are normally required by GAAP can be condensed or omitted.
These unaudited condensed consolidated financial statements for the six months ended June 30, 2026 and 2025 have been prepared on the same basis as the Company’s audited financial statements, and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for a fair presentation of the Company’s financial position, results of operations, and cash flows for the interim periods presented. The results for the six months ended June 30, 2026, are not necessarily indicative of results to be expected for the year ending December 31, 2026, or any other future interim or annual period. The condensed consolidated balance sheet as of December 31, 2025 was derived from the audited financial statements as of that date. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto for the fiscal year ended December 31, 2025 and 2024.
Use of Estimates
The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the dates of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. On an ongoing basis, the Company’s management reviews these estimates based on information that is currently available. Changes in facts and circumstances may cause the Company to revise its estimates. Significant accounting estimates reflected in the Company’s condensed consolidated financial statements include estimation of the progress in collaboration and non-recurring engineering (“NRE”) arrangements, useful lives of property and equipment, impairment of long-lived assets and long-term investment, valuation of share-based compensation arrangements, fair value of common stock, redeemable convertible preferred stock, simple agreements for future equity, warrant liabilities, and the valuation allowance of deferred tax assets.
Concentration of Credit Risk
F-91
Table of Contents
PLUS AUTOMATION, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash, cash equivalents, and short-term investments. The Company maintains cash and cash equivalents in deposit accounts at financial institutions that, at times, may significantly exceed federally insured limits. The Company has not experienced any losses related to such accounts and does not believe it is exposed to any unusual credit risk beyond the normal credit risk associated with commercial banking relationships. The Company’s non-interest-bearing cash balances as of June 30, 2026 were insured up to $250,000 per depositor at each financial institution, and substantially all of the Company’s cash and cash equivalents were held in one major financial institution, which management considers to be of high credit quality.
Accounts and other receivables are generally unsecured and denominated in United States dollar (“US Dollar” or “USD”) and are derived from operations primarily in the United States and Europe. The Company performs ongoing credit evaluations of its accounts receivable to mitigate its credit risk. As of June 30, 2026,one customer accounted for approximately 81% of the Company's accounts and other receivables, and one additional customer accounted for approximately 16% of the Company's accounts and other receivables. No other customer or collaboration partner accounted for more than 10% of the total balance as of June 30, 2026. As of December 31, 2025, the accounts and other receivables had a nominal value with no significant concentration risk. The Company operates primarily in the U.S., where it generates billing activity under its collaboration agreements and revenue arrangements and holds its long-lived assets.
Fair Value Measurements
Assets and liabilities recorded at fair value on a recurring basis in the condensed consolidated balance sheets are categorized based on the level of judgment associated with the inputs used to measure their fair values. Fair value is defined as the exchange price that would be received for an asset or an exit price that would be paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The authoritative guidance on fair value measurements establishes a three-tier fair value hierarchy for disclosure of fair value measurements as follows:
To the extent that the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment that management exercises in determining fair value is greatest for instruments categorized in Level 3. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.
Accounts and Other Receivables
Accounts and other receivables represent amounts due from customers and collaboration and NRE arrangements and are recorded at original invoice amounts net of allowance for credit losses. The Company considers many factors in assessing the collectability of its accounts and other receivables, such as the age of the amounts due, the customer’s payment history, creditworthiness, financial conditions of the customers and industry trend. The Company also makes a specific allowance if there is strong evidence indicating that the receivable is likely to be unrecoverable. Accounts and other receivable balances are written off after all collection efforts have been exhausted. No allowance for credit losses has been recorded as of June 30, 2026 and December 31, 2025.
Simple Agreements for Future Equity
F-92
Table of Contents
PLUS AUTOMATION, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The Company accounts for its outstanding SAFEs as a liability stated at fair value in accordance with ASC Topic 480: Distinguishing Liabilities from Equity. SAFEs are subject to revaluation at the end of each reporting period, with changes in fair value recognized in the condensed consolidated statements of operations and comprehensive loss. There was no event that triggered the SAFEs to convert into equity securities during the six months ended June 30, 2026 or 2025. No notices or redemptions for cash occurred during the six months ended June 30, 2026. See Note 8 for additional details.
Revenue Recognition
The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers, when control of promised goods or services is transferred to a customer in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The Company applies the following five-step model in accounting for revenue arrangements:
Historically, the Company had one customer contract accounted for under ASC 606 pursuant to which it retrofitted a fleet of trucks with the PlusDrive system, including hardware and software. Under the terms of that arrangement, the Company received an agreed-upon fee for each retrofitted truck and an annual software maintenance fee per truck. All performance obligations related to retrofitting trucks were fully completed prior to July 31, 2023. Revenue generated under that arrangement was in the United States. The performance obligations related to retrofitting the trucks were fully satisfied prior to the periods presented in the condensed consolidated financial statements. Separate software maintenance performance obligations continued, resulting in only nominal amounts of software maintenance revenue recognized during the six months ended June 30, 2025.
In March 2026, the Company entered into a standalone HyperFoundry contract with a customer to deliver labeled data and licenses of its technology with the associated related documentation. The Company began providing the customer with labeled data and licenses of its technology during March 2026 and transferred control of all deliverables pursuant to the contract by June 30, 2026, which comprises the majority of the Company’s revenue recognized during the six months ended June 30, 2026.
Revenue is recognized when control of the promised goods or services is transferred to the Company’s customers in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. Revenue is recorded at the net sales price, which excludes taxes collected from customers relating to product sales and remitted to governmental authorities. The timing of revenue recognition may differ from the timing of invoicing the Company’s customers.
HyperFoundry
The Company provides labeled data, services, and licenses of its technology with associated documentation, each representing a separate distinct performance obligation, as part of its HyperFoundry services offering. Labeled data relates to data frames used for training perception models used to ensure a high performing driving automation model. Licenses of the Company’s technology provide customers with specific software tools that the customer may use to accelerate their autonomous driving solutions. Revenue from these arrangements is recognized at a point in time when control of the labeled data and/or technology is transferred to the customer in accordance with the contractual terms. In determining the timing of revenue recognition, the Company considers delivery requirements, acceptance provisions and other indicators of transfer of control.
Driver-as-a-Service
F-93
Table of Contents
PLUS AUTOMATION, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The Company’s long-term commercial strategy remains focused on the future deployment of its autonomous driving technology through Driver-as-a-Service (“DaaS”) arrangements, under which original equipment manufacturer partners would integrate the Company’s autonomous driving technology into vehicles, and the Company would participate in fees generated based on vehicle deployment or utilization. As of June 30, 2026, the Company had not generated any revenue under its DaaS offering.
Contracts with Multiple Performance Obligations
The Company evaluates the terms and conditions of its customer contracts to determine whether promised goods and services are distinct in the context of the contract and therefore should be accounted for separately or combined. For contracts with multiple performance obligations, the Company allocates the transaction price to the identified performance obligations on a relative standalone selling price basis. The Company determines standalone selling price using observable prices when available and estimates standalone selling price when it is not directly observable using available information, including market conditions, customer-specific factors and internal cost estimates.
Contract Assets and Contract Liabilities
A contract asset represents the Company’s right to consideration in exchange for goods or services transferred to a customer where that right remains conditional on something other than the passage of time. A contract liability represents amounts the Company has received before the transfer of the related products or services to the customer. Such amounts are recognized in revenues as performance obligations are met.
HyperFoundry Services Support
HyperFoundry Services Support consists primarily of direct labor costs and other indirect costs including depreciation and amortization related to the delivery of HyperFoundry services.
Stock-Based Compensation
Types of Equity-Based Awards
The Company’s outstanding equity-based awards include the following categories: (1) restricted stock units with service conditions only (“RSUs”), (2) restricted stock units with service and performance conditions based on the occurrence of a liquidity event, which is required to be met for any awards to vest (“PRSUs”), (3) restricted share awards financed through non-recourse notes (“RSAs”), which are treated as common stock options for accounting purposes, (4) common stock options granted to third parties with the exercise price equal to the par value of the underlying share and fully vested at issuance (“Penny Options”), and (5) common stock options with service conditions (“Options”). The Company recognizes stock-based compensation expense based on the estimated fair values for all share-based payment awards.
Equity-Classified Share-Based Awards
The fair value of equity-classified RSUs, PRSUs, and Penny Options is determined using the estimated fair value of the Company’s common stock on the grant date. The grant date fair value of the RSUs is recognized ratably over the requisite service periods, which typically range from two to four years. The grant date fair value for the equity-classified PRSUs is recognized once it becomes probable that the performance condition will be satisfied, which is generally upon the consummation of a liquidity event. The grant date fair value for the equity-classified Penny Options was recognized at their issuance, as these awards were fully vested at the time of issuance.
The fair value of the Company’s common stock was determined by the Board of Directors with input from management and consideration of third-party valuation reports. In the absence of a public trading market, and as a development-stage company with no significant revenues, the Company believes that it is appropriate to consider a range of factors to determine the fair market value of the common stock at each grant date. The Company considered various objective and subjective factors, along with input from the independent third-party valuation firm. The factors included (1) the progress of the development activities by the Company; (2) the significant risks associated with the Company’s stage of development; (3) capital market conditions for comparable, privately held, technology companies; (4) the Company’s available liquidity, financial condition, and results of operations; (5) the historical issuances of the Company’s shares to third parties; and (6) the preferential rights of the redeemable convertible preferred stockholders.
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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The fair value of the Options and RSAs is determined using the Black-Scholes option-pricing model (“BSM”). The grant date fair value of the equity-classified Options and RSAs is recognized as an expense over the requisite service periods, generally ranging from two to four years. Forfeitures are recognized as they occur.
The BSM requires the use of certain assumptions as of each grant date, including the fair value of the Company’s common stock, expected term, expected volatility, risk-free interest rate, and expected dividends:
Liability-Classified Share-Based Awards
In connection with the Company’s formation in July 2023 (“Restructuring”), the unvested RSUs, PRSUs, and Options (“PRC Awards”) held by the grantees employed by Plus PRC (“PRC Holders”) were expected to be forfeited under their original terms. In July 2023, the Company modified the PRC Awards to allow their continuous vesting under their initial terms, contingent on service to Plus PRC (“Plus PRC Service Requirement”). The Company determined that the Plus PRC Service Requirement is a condition that is not a service, performance, or market condition from the award related to the Company’s operations. As such, the unvested PRC Awards became liability-classified upon completion of the Restructuring. Since the Company anticipates that the liability-classified PRC Awards will be settled in equity, the associated liability is presented as noncurrent in the condensed consolidated balance sheets.
The service-based awards held by the PRC Holders, including RSUs and Options, became vested from the Company’s standpoint, and the variability in the number of shares issuable is based solely on the Plus PRC Service Requirement. As such, the Company reclassifies the liability to equity as the Plus PRC Service Requirement is met. Since the service-based awards held by the PRC Holders were expected to vest before the Restructuring, total stock-based compensation for these awards is at least equal to the per share grant-date fair value.
The PRSUs held by the PRC Holders are also subject to the performance condition, and no liability is recognized until the underlying liquidity event becomes probable. The Company reclassifies the liability-classified RSUs held by the PRC holders to equity as the Plus PRC Service Requirement is met and remeasures the per-share basis of these awards at fair value. As of June 30, 2026, there is no remaining liability balances for these awards.
Deferred Offering Costs
Deferred offering costs consist of expenses directly attributable to the Company’s planned de-SPAC Transaction, including but not limited to legal, accounting, printing, underwriter, and filing fees, which are capitalized as incurred. In the event the de-SPAC transaction is terminated, deferred offering costs are expensed. Upon the successful completion of the de-SPAC Transaction, deferred offering costs will be offset against the proceeds and reclassified to additional paid-in capital. As of June 30, 2026 and December 31, 2025, the Company recorded deferred offering costs of $0.7 million and $8.0 million, respectively. In connection with the termination of the Churchill Business Combination Agreement discussed in Note 1, the Company wrote off $10.2 million of previously capitalized deferred issuance costs associated with the Churchill transaction during the six months ended June 30, 2026, which is
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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
reflected within general and administrative expenses in the condensed consolidated statements of operations and comprehensive loss.
Warrant Liabilities
The Company’s warrants to purchase shares of redeemable convertible preferred stock are classified as liabilities as the underlying securities are contingently redeemable upon the occurrence of events that are outside of the control of the Company. The warrants were recorded at fair value upon issuance and are subsequently remeasured at fair value as of each balance sheet date, with changes in fair value recognized in the Company’s condensed consolidated statements of operations and comprehensive loss until expiration or settlement.
Segment Reporting
Operating segments are defined as components of an enterprise engaging in business activities for which separate financial information is available that is regularly evaluated by the Company’s chief operating decision maker(s) (“CODM”) in deciding how to allocate resources and assess performance. The Company manages its operations as one operating and reportable segment. The Company’s CODM, its Chief Executive Officer, manages the Company’s operations on a consolidated basis for the purposes of allocating resources and evaluating financial performance. The CODM reviews significant segment expenses based on functional line items as disclosed in the consolidated statements of operations and comprehensive loss. The CODM does not review assets at a different level or category other than the amounts disclosed in the Company’s consolidated balance sheets.
Net Loss per Share Attributable to Common Stockholders
The Company calculates net loss per share using the two-class method because it has issued redeemable convertible preferred stock and SAFEs that meet the definition of participating securities, in addition to Class A and Class B common stock. The two-class method determines net loss per share for each class of common stock and participating securities, accounting for dividends declared or accumulated and participation rights in undistributed earnings. The participating securities do not have a contractual obligation to share in the Company's losses. As such, net loss for the six months ended June 30, 2026 and 2025 was not allocated to the Company's participating securities.
The rights of the Class A and Class B common stock, including liquidation, dividend, and loss-sharing rights, are identical, except for voting, transfer, and conversion rights. As such, the resulting net loss per share is the same for both classes.
Basic net loss per share is computed by dividing net loss attributable to common shareholders by the weighted average number of common shares outstanding. Diluted net loss per share considers potentially dilutive common shares, including outstanding common stock options, restricted stock units, redeemable convertible preferred stock, SAFEs, and liability-classified warrants, to the extent their effect is not anti-dilutive.
Recently Adopted Accounting Pronouncements
In July 2025, the FASB issued ASU No. 2025-05, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets (“ASU 2025-05”). ASU 2025-05 provides a practical expedient that all entities can use when estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under ASC Topic 606. Under this practical expedient, an entity is allowed to assume that the current conditions it has applied in determining credit loss allowances for current accounts receivable and current contract assets remain unchanged for the remaining life of those assets. ASU 2025-05 is effective for fiscal years beginning after December 15, 2025, and interim reporting periods in those fiscal years. Entities that elect the practical expedient and, if applicable, make the accounting policy election are required to apply the amendments prospectively. The Company adopted ASU 2025-05 on January 1, 2026 prospectively and elected the practical expedient. The adoption of ASU 2025-05 did not have a material impact on the Company’s condensed consolidated financial statements and related disclosures.
Recently Issued Accounting Pronouncements
In November 2024, the FASB issued ASU No. 2024-03, Income Statement – Reporting Comprehensive Income (Topic 220): Disaggregation of Income Statement Expenses (“ASU 2024-03”), which requires public entities to provide disaggregated disclosures of certain expense captions presented on the face of the income statement into
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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
specific categories within the footnotes to the financial statements. ASU 2024-03 is effective for the Company’s annual periods beginning on January 1, 2027, and interim periods beginning on January 1, 2028, with early adoption permitted. The ASU may be applied either on a prospective or retrospective basis. The Company is currently evaluating the impact of adopting this new accounting guidance on its consolidated financial statements and related disclosures.
In May 2025, the FASB issued ASU No. 2025-04, Compensation – Stock Compensation (Topic 718) and Revenue from Contracts With Customers (Topic 606): Clarifications to Share-Based Consideration Payable to a Customer (“ASU 2025-04”). ASU 2025-04 revises the definition of a performance condition, eliminates the forfeiture policy election for service conditions, and clarifies that the variable consideration constraint in ASC Topic 606 does not apply to share-based consideration payable to customers. The new guidance requires entities to consistently account for share-based awards granted to customers by clarifying the treatment of vesting conditions and ensuring alignment with ASC Topic 606 and ASC Topic 718: Compensation—Stock Compensation. ASU 2025-04 is effective for fiscal years beginning after December 15, 2026, including interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the impact of adopting this new accounting guidance on its consolidated financial statements and related disclosures.
In September 2025, the FASB issued ASU No. 2025-06, Intangibles - Goodwill and Other – Internal-Use Software (Subtopic 350-40) (“ASU 2025-06”). ASU 2025-06 amends certain aspects of the accounting and disclosure requirements for software costs. Under ASU 2025-06, entities may begin to capitalize internal-use software costs when management authorizes and commits to funding a software project, and it is probable that the project will be completed. ASU 2025-06 is effective for all annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. Early adoption is permitted as of the beginning of an annual reporting period. The Company is currently evaluating the impact of adopting this new accounting guidance on its consolidated financial statements and related disclosures.
In September 2025, the FASB issued ASU No. 2025-07, Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606) (“ASU 2025-07”), which refines the scope of derivative accounting to exclude certain non-exchange-traded contracts with underlying based on the operations or activities specific to one of the parties to the contract and clarifies the accounting for share-based noncash consideration in revenue contracts under ASC Topic 606. ASU 2025-07 is effective for annual periods beginning after December 15, 2026, and interim periods within those annual reporting periods, with early adoption permitted. Transition can be applied prospectively to new contracts or on a modified retrospective basis. The Company is currently evaluating the impact of adopting this new accounting guidance on its consolidated financial statements and related disclosures.
In December 2025, the FASB issued ASU No. 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements. The ASU clarifies interim disclosure requirements and the applicability of Topic 270. The objective of the amendments is to provide further clarity about the current interim disclosure requirements. The ASU is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. The adoption of this ASU can be applied using either a prospective or a retrospective approach. Early adoption is permitted. The Company is currently evaluating the impact of adopting this new accounting guidance on its consolidated financial statements and related disclosures.
3. Collaboration and NRE Arrangements
The Company enters into best-efforts, generally nonrefundable NRE arrangements with strategic partners to develop SuperDrive, an autonomous driving system, and these arrangements are not conducted through a separate legal entity. These arrangements involve joint research and development programs to integrate the Company’s autonomous driving software and systems with the counterparty’s vehicle platforms or other hardware, with the goal of developing, testing, and validating various autonomous driving solutions and functionality. Under these arrangements, the Company is reimbursed for a portion of the research and development expenses attributable to specific development activities. The Company receives no additional consideration or royalties upon completion of NRE projects, and the counterparty does not commit to purchasing any specific product in the future. The participation reimbursement received by the Company does not depend on whether the project will yield future benefits.
The Company analyzes the NRE arrangements to determine whether they involve joint operating activities performed by parties that are both active participants and exposed to significant risks and rewards based on the
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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
commercial success of the activities. The Company has concluded that the NRE arrangements fall within the scope of ASC Topic 808, Collaborative Arrangements, since these arrangements have the following characteristics:
For NRE arrangements within the scope of ASC Topic 808, the Company first determines whether the collaborative arrangement is entirely or partially a contract with a customer or falls entirely within the scope of other GAAP. For NRE agreements with multiple deliverables, the Company would assess the units of account by applying the separation and initial measurement requirements of the applicable authoritative accounting literature. If there are no separation or initial measurement requirements in those other standards, the requirements in ASC Topic 606, are applied. For each unit of account identified, the Company determines the accounting treatment based on the relevant authoritative guidance that can be directly applied or reasonably analogized to, or makes an accounting policy election based on the nature if no reasonable analogy found.
The Company has concluded that for each NRE arrangement, there is one unit of account for participation in research and development programs. Participation reimbursements are recognized over time using a cost-to-cost input method (i.e., costs incurred to date relative to total estimated costs), which reflects the Company’s progress toward satisfying its obligation under the development activities. Activities performed for NRE arrangement are tracked and reflect progress made for each arrangement and are charged at consistent internal rates. Participation reimbursements recognized are recorded as a reduction to research and development expenses in the condensed consolidated statements of operations and comprehensive loss.
The fees received from the collaboration arrangements are recognized based on costs incurred to date over the total estimated project costs and are recorded as an offset to research and development expenses in the condensed consolidated statements of operations and comprehensive loss. During the six months ended June 30, 2026 and 2025, the Company recorded $0.5 million and $0.7 million as an offset to research and development costs related to all partner collaboration agreements, respectively.
4. Revenue
The Company’s revenues during the six months ended June 30, 2026 are primarily derived from a single customer contract for its HyperFoundry services. The Company recognizes revenue when customers obtain control of promised services in an amount that reflects the consideration the Company expects to receive for those services.
Disaggregation of Revenues
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PLUS AUTOMATION, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Revenues by geography, based on the customer’s principal location, were as follows (in thousands):
|
For the Six Months |
|
|||||
|
|||||||
(in thousands) |
2026 |
|
|
2025 |
|
||
United States |
$ |
75 |
|
|
$ |
41 |
|
Sweden |
|
25,000 |
|
|
$ |
— |
|
Total revenue |
$ |
25,075 |
|
|
$ |
41 |
|
No country other than those listed above accounted for 10% or more of the Company’s total revenues during the six months ended June 30, 2026 and 2025.
Contract Balances
As of June 30, 2026, the Company had accounts and other receivables of $2.3 million substantially all of which related to a single customer and no material amounts related to contract liabilities. As of December 31, 2025, there were no material amounts related to unbilled receivables, contract assets or contract liabilities.
Remaining Performance Obligations
As of June 30, 2026 and 2025, all performance obligations were substantially complete with only immaterial amounts remaining to be recognized.
5. Fair Value of Financial Instruments
The Company’s financial instruments include cash and cash equivalents, marketable securities, accounts and other receivables, accounts payable, the SAFE liabilities, the warrant liabilities, liability-classified share-based awards and other payables. Marketable securities, the SAFE liabilities, the warrant liabilities, and liability-classified share-based awards are measured at fair value on a recurring basis. The carrying values of other financial instruments approximate their fair values due to their short-term nature.
The Company’s financial assets and liabilities that are measured at fair value on a recurring basis are as follows:
|
|
June 30, 2026 |
|
|||||||||||||
(in thousands) |
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
|
||||
Financial Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Warrant liabilities (Note 12) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
17,730 |
|
|
$ |
17,730 |
|
Simple agreements for future equity, current (Note 8) |
|
|
— |
|
|
|
— |
|
|
|
22,904 |
|
|
|
22,904 |
|
Simple agreements for future equity, noncurrent (Note 8) |
|
|
— |
|
|
|
— |
|
|
|
28,895 |
|
|
|
28,895 |
|
Liability-classified share-based awards (Note 13) |
|
|
— |
|
|
|
— |
|
|
|
221 |
|
|
|
221 |
|
Total |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
69,750 |
|
|
$ |
69,750 |
|
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PLUS AUTOMATION, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
|
December 31, 2025 |
|
|||||||||||||
(in thousands) |
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
|
||||
Financial Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Treasury bills classified as short-term marketable securities |
|
$ |
168 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
168 |
|
Equity securities in short-term marketable securities |
|
|
3 |
|
|
|
— |
|
|
|
— |
|
|
|
3 |
|
Total |
|
$ |
171 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
171 |
|
Financial Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Warrant liabilities (Note 12) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
18,302 |
|
|
$ |
18,302 |
|
Simple agreements for future equity, current (Note 8) |
|
|
— |
|
|
|
— |
|
|
|
25,561 |
|
|
|
25,561 |
|
Simple agreements for future equity, noncurrent (Note 8) |
|
|
— |
|
|
|
— |
|
|
|
33,456 |
|
|
|
33,456 |
|
Liability-classified share-based awards (Note 13) |
|
|
— |
|
|
|
— |
|
|
|
215 |
|
|
|
215 |
|
Total |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
77,534 |
|
|
$ |
77,534 |
|
The following table sets forth a summary of the changes in the fair value of the Company’s warrants and SAFEs classified as Level 3 financial instruments:
(in thousands) |
|
Warrants |
|
|
SAFEs |
|
||
Fair value as of December 31, 2025 |
|
|
18,302 |
|
|
|
59,017 |
|
Change in fair value |
|
|
(572 |
) |
|
|
(7,218 |
) |
Fair value as of June 30, 2026 |
|
$ |
17,730 |
|
|
$ |
51,799 |
|
The following table sets forth a summary of the changes in the fair value of the Company’s share-based awards liabilities classified as Level 3 financial instruments and included within noncurrent liabilities in the unaudited condensed consolidated balance sheets:
(in thousands) |
|
|
|
|
Liability as of December 31, 2025 |
|
$ |
215 |
|
Foreign currency remeasurement loss |
|
|
6 |
|
Liability as of June 30, 2026 |
|
$ |
221 |
|
Treasury Bills
U.S. Treasury bills are classified as cash equivalents if the maturities at the date of purchase are three months or less. If the maturities of U.S. Treasury bills are greater than three months and less than 12 months at the date of purchase, they are classified short term investments. The Company obtains pricing information from its investment manager and generally determines the fair value of available-for-sale securities using standard observable inputs, including reported trades, broker and dealer quotes, and bids and offers. All such inputs are considered as Level 1 in the fair value hierarchy. As of June 30, 2026, there are no remaining Treasury Bills being held.
Short-Term Marketable Securities
As of June 30, 2026 and December 31, 2025, the fair value of the Company’s holdings in shares of Luminar’s marketable equity securities are based upon quoted market prices and considered a Level 1 asset in the fair value hierarchy.
Warrant Liabilities
The Company estimated the fair value of warrant liabilities using a combination of the binomial lattice model and a waterfall proceeds analysis based on estimated probabilities assigned to different exit scenarios, including an initial public offering or other settlement alternatives, as these events became known or knowable as of the valuation date. The probability of the Company becoming a public entity used to determine the fair value of warrant liabilities was 90% as of June 30, 2026 and December 31, 2025. The following are the unobservable inputs used in the binomial lattice model:
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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
|
June 30, |
|
|
December 31, |
|
||
|
|
2026 |
|
|
2025 |
|
||
Exercise Price |
|
$ |
0.46647 |
|
|
$ |
0.46647 |
|
Dividend yield |
|
|
— |
|
|
|
— |
|
Expected term (in years) |
|
|
0.75 |
|
|
|
1.00 |
|
Risk-free interest rate |
|
|
4.0 |
% |
|
|
3.5 |
% |
Expected volatility |
|
|
69.0 |
% |
|
|
71.8 |
% |
SAFE
During the six months ended June 30, 2026, the Company did not issue any additional SAFE instruments. During the year ended December 31, 2025, the Company issued additional SAFE instruments and received gross proceeds of $24.4 million in cash. A Monte Carlo simulation and waterfall proceeds analysis based on estimated probabilities assigned to different exit scenarios, including an initial public offering or other settlement alternative was used to determine the fair value, utilizing the following significant unobservable inputs:
|
|
June 30, |
|
|
December 31, |
|
||
|
|
2026 |
|
|
2025 |
|
||
Expected term (in years) |
|
0.25 |
|
|
0.33 |
|
||
Term-matched semi-annual risk-free rate |
|
|
4.0 |
% |
|
|
3.6 |
% |
Drift / continuously compounded risk-free rate |
|
|
3.9 |
% |
|
|
3.6 |
% |
Volatility |
|
|
66.6 |
% |
|
|
54.8 |
% |
6. Commitments and Contingencies
Indemnification
In the normal course of business, the Company enters into agreements that contain various representations and provide for general indemnification. The Company’s exposure under these agreements is unknown because it involves claims that may be made against the Company in the future. To date, the Company has not paid any claims or been required to defend any action related to its indemnification obligations. As of June 30, 2026 and December 31, 2025, the Company did not have any material indemnification claims that were probable or reasonably possible.
Contingencies
Liabilities for loss contingencies arising from claims, assessments, litigation, fines, penalties, and other sources are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. There are no material items that have been accrued as of June 30, 2026 and December 31, 2025. The Company is not currently involved in any legal actions that could have a material effect on the Company’s financial position, results of operations, or liquidity.
7. Balance Sheet Components
Property and Equipment, Net
Property and equipment and related accumulated depreciation were as follows:
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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
|
June 30, |
|
|
December 31, |
|
||
(in thousands) |
|
2026 |
|
|
2025 |
|
||
Vehicles – research and development |
|
$ |
4,561 |
|
|
$ |
4,832 |
|
Computer hardware |
|
|
3,955 |
|
|
|
3,954 |
|
Research and development equipment |
|
|
1,443 |
|
|
|
1,908 |
|
Leasehold improvements |
|
|
1,499 |
|
|
|
1,562 |
|
Construction in progress |
|
|
864 |
|
|
|
739 |
|
Furniture and fixtures |
|
|
288 |
|
|
|
288 |
|
Software |
|
|
233 |
|
|
|
233 |
|
Total property and equipment at cost |
|
|
12,843 |
|
|
|
13,516 |
|
Less: accumulated depreciation and amortization |
|
|
(10,937 |
) |
|
|
(11,099 |
) |
Property and equipment, net |
|
$ |
1,906 |
|
|
$ |
2,417 |
|
Depreciation expense recognized during the six months ended June 30, 2026 and 2025, was $0.6 million and $1.0 million, respectively. No impairment charge was recognized for the six months ended June 30, 2026 and 2025 and for the years ended December 31, 2025 and 2024.
Prepaid expenses and other current assets
Prepaid expenses and other current assets consisted of the following:
|
|
June 30, |
|
|
December 31, |
|
||
(in thousands) |
|
2026 |
|
|
2025 |
|
||
Receivable from sale of long-term investment |
|
$ |
— |
|
|
$ |
2,000 |
|
Short-term security deposits |
|
|
122 |
|
|
|
1,516 |
|
Prepaid taxes |
|
|
29 |
|
|
|
290 |
|
Prepaid research and development |
|
|
130 |
|
|
|
224 |
|
Other prepaid and current assets |
|
|
1,296 |
|
|
|
1,224 |
|
Total prepaid expenses and other current assets |
|
$ |
1,577 |
|
|
$ |
5,254 |
|
Accrued and other current liabilities
Accrued and other current liabilities consisted of the following:
|
|
June 30, |
|
|
December 31, |
|
||
(in thousands) |
|
2026 |
|
|
2025 |
|
||
Accrued professional services |
|
$ |
589 |
|
|
$ |
1,578 |
|
Accrued insurance |
|
|
24 |
|
|
|
391 |
|
Accrued taxes |
|
|
20 |
|
|
|
46 |
|
Other accrued and current liabilities |
|
|
169 |
|
|
|
218 |
|
Total accrued and other current liabilities |
|
$ |
802 |
|
|
$ |
2,233 |
|
8. Simple Agreements for Future Equity
The Company has entered into SAFEs with various investors that were classified as liabilities within the Company’s condensed consolidated balance sheets and accounted for at fair value, subject to remeasurement for each reporting period (see Note 2). As of June 30, 2026 and December 31, 2025, the Company has classified certain SAFEs that became optionally redeemable by the holders for cash beginning on January 1, 2025 as current liabilities. The remaining SAFEs are not optionally redeemable by the holders and are classified as noncurrent liabilities as of June 30, 2026 and December 31, 2025.
9. Leases
The Company has entered into non-cancellable operating leases primarily for office and warehouse spaces, which have initial lease terms varying from three to five years. Leases require monthly lease payments that may be subject
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Table of Contents
PLUS AUTOMATION, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
to annual increases throughout the lease term. Certain leases include renewal options to extend the lease term, which have not been included in the computations of the present value of the lease payments at the lease commencement date, as the Company is not reasonably certain to renew.
Lease expense is comprised of the following:
|
|
For the Six Months |
|
|||||
(in thousands) |
|
2026 |
|
|
2025 |
|
||
Operating lease cost |
|
$ |
298 |
|
|
$ |
1,131 |
|
Short-term lease cost |
|
|
1,235 |
|
|
169 |
|
|
Variable lease cost |
|
847 |
|
|
486 |
|
||
Total lease expense |
|
$ |
2,380 |
|
|
$ |
1,786 |
|
Cash paid for amounts included in the measurement of operating lease liabilities was $0.4 million and $1.3 million for the six months ended June 30, 2026 and 2025, respectively. These amounts were included in the net cash used in operating activities in the Company’s unaudited condensed consolidated statements of cash flows.
The inputs used to determine the carrying values of the operating lease liabilities were as follows:
|
|
June 30, |
|
|
December 31, |
|
||
|
|
2026 |
|
|
2025 |
|
||
Weighted-average remaining lease term of operating leases (in years) |
|
0.34 |
|
|
0.83 |
|
||
Weighted-average discount rate of operating leases |
|
|
3.75 |
% |
|
|
3.75 |
% |
As of the reporting period end, the maturities of the Company’s operating lease liabilities, excluding short-term leases, were as follows:
|
|
June 30, |
|
|
(in thousands) |
|
2026 |
|
|
2026 (remaining months) |
|
$ |
181 |
|
2027 |
|
|
— |
|
Total undiscounted lease payments |
|
|
181 |
|
Less: imputed interest |
|
|
(1 |
) |
Present value of operating lease liabilities |
|
$ |
180 |
|
Operating lease liabilities, current |
|
$ |
180 |
|
Operating lease liabilities, net of current portion |
|
$ |
— |
|
10. Common Stock
The Company has the following shares of Class A common stock reserved for future issuance, on an as-if converted basis:
|
|
June 30, |
|
|
December 31, |
|
||
|
|
2026 |
|
|
2025 |
|
||
Redeemable convertible preferred stock |
|
|
952,548,647 |
|
|
|
952,548,647 |
|
Common shares reserved for awards granted under 2017 Plan |
|
|
54,318,035 |
|
|
|
58,013,135 |
|
Common shares reserved for awards granted under 2021 Plan |
|
|
162,379,021 |
|
|
|
163,364,351 |
|
Remaining common shares reserved for future issuance under the Plans |
|
|
13,324,332 |
|
|
|
31,807,229 |
|
Total reserved common stock |
|
|
1,182,570,035 |
|
|
|
1,205,733,362 |
|
The Company has the following shares of common stock outstanding as of the dates below, with the activity during the periods presented related solely to the Class A shares:
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PLUS AUTOMATION, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
|
June 30, |
|
|
December 31, |
|
||
|
|
2026 |
|
|
2025 |
|
||
Class A common stock |
|
|
150,141,221 |
|
|
|
130,446,121 |
|
Class B common stock |
|
|
328,672,100 |
|
|
|
328,672,100 |
|
Total common stock |
|
|
478,813,321 |
|
|
|
459,118,221 |
|
11. Redeemable Convertible Preferred Stock
The Company initially records redeemable convertible preferred stock at fair value on the dates of issuance, less issuance costs. The preferred stockholders, as a group, control the Company’s Board of Directors through their voting rights during the periods presented, and through their representation on the Board could initiate a merger, consolidation, reorganization, change in control or a transfer of substantially all of the Company’s assets (“Deemed Liquidation Event”). Upon a Deemed Liquidation Event, the preferred stockholders may cause a redemption of the redeemable convertible preferred stock for cash and other assets available for distribution. As events triggering liquidation are not solely within the control of the Company, the redeemable convertible preferred stock is classified as temporary equity outside of the stockholders’ deficit in the accompanying consolidated balance sheets.
The carrying values of the Company’s outstanding Series C, Series C-1, Series B, Series B-X, Series A-4, Series A-4-X, Series A-3 and Series A-3-X Preferred Stock are adjusted to reflect the redemption value as if the end of the reporting period was the redemption date as it is probable these series will become redeemable. The redemption value is calculated in accordance with the terms of the redeemable convertible preferred stock.
Issued and outstanding redeemable convertible preferred stock consists of the following (in thousands, except share and per share amounts):
|
|
June 30, 2026 |
|
|||||||||||||||||
|
|
Shares |
|
|
Shares |
|
|
Original |
|
|
Aggregate |
|
|
Net |
|
|||||
Series A-1 |
|
|
149,057,400 |
|
|
|
149,057,400 |
|
|
$ |
0.000002 |
|
|
$ |
1 |
|
|
$ |
— |
|
Series A-2 |
|
|
41,757,975 |
|
|
|
41,757,975 |
|
|
$ |
0.286584 |
|
|
|
20,456 |
|
|
|
11,967 |
|
Series A-3 |
|
|
133,246,286 |
|
|
|
— |
|
|
$ |
0.286584 |
|
|
— |
|
|
— |
|
||
Series A-3-X |
|
|
133,246,286 |
|
|
|
133,246,286 |
|
|
$ |
0.286584 |
|
|
|
65,273 |
|
|
|
82,613 |
|
Series A-4 |
|
|
27,130,907 |
|
|
|
9,043,636 |
|
|
$ |
0.442300 |
|
|
|
6,837 |
|
|
|
6,837 |
|
Series A-4-X |
|
|
27,130,907 |
|
|
|
18,087,271 |
|
|
$ |
0.442300 |
|
|
|
13,675 |
|
|
|
13,675 |
|
Series B |
|
|
419,496,627 |
|
|
|
284,439,710 |
|
|
$ |
0.518300 |
|
|
|
247,022 |
|
|
|
204,050 |
|
Series B-X |
|
|
419,496,627 |
|
|
|
135,056,917 |
|
|
$ |
0.518300 |
|
|
|
112,680 |
|
|
|
112,680 |
|
Series C |
|
|
181,859,452 |
|
|
|
181,859,452 |
|
|
$ |
0.550700 |
|
|
|
164,916 |
|
|
|
161,683 |
|
Series C-1 |
|
|
420,702,410 |
|
|
|
— |
|
|
$ |
0.466470 |
|
|
|
— |
|
|
|
— |
|
|
|
|
1,953,124,877 |
|
|
|
952,548,647 |
|
|
|
|
|
$ |
630,860 |
|
|
$ |
593,505 |
|
|
F-104
Table of Contents
PLUS AUTOMATION, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
|
December 31, 2025 |
|
|||||||||||||||||
|
|
Shares |
|
|
Shares |
|
|
Original |
|
|
Aggregate |
|
|
Net |
|
|||||
Series A-1 |
|
|
149,057,400 |
|
|
|
149,057,400 |
|
|
$ |
0.000002 |
|
|
$ |
— |
|
|
$ |
— |
|
Series A-2 |
|
|
41,757,975 |
|
|
|
41,757,975 |
|
|
$ |
0.286584 |
|
|
|
19,500 |
|
|
|
11,967 |
|
Series A-3 |
|
|
133,246,286 |
|
|
|
— |
|
|
$ |
0.286584 |
|
|
|
— |
|
|
|
— |
|
Series A-3-X |
|
|
133,246,286 |
|
|
|
133,246,286 |
|
|
$ |
0.286584 |
|
|
|
62,224 |
|
|
|
85,278 |
|
Series A-4 |
|
|
27,130,907 |
|
|
|
9,043,636 |
|
|
$ |
0.442300 |
|
|
|
6,518 |
|
|
|
6,518 |
|
Series A-4-X |
|
|
27,130,907 |
|
|
|
18,087,271 |
|
|
$ |
0.442300 |
|
|
|
13,036 |
|
|
|
13,036 |
|
Series B |
|
|
419,496,627 |
|
|
|
284,439,710 |
|
|
$ |
0.518300 |
|
|
|
235,534 |
|
|
|
197,513 |
|
Series B-X |
|
|
419,496,627 |
|
|
|
135,056,917 |
|
|
$ |
0.518300 |
|
|
|
107,597 |
|
|
|
107,597 |
|
Series C |
|
|
181,859,452 |
|
|
|
181,859,452 |
|
|
$ |
0.550700 |
|
|
|
157,316 |
|
|
|
154,462 |
|
Series C-1 |
|
|
420,702,410 |
|
|
|
— |
|
|
$ |
0.466470 |
|
|
|
— |
|
|
|
— |
|
|
|
|
1,953,124,877 |
|
|
|
952,548,647 |
|
|
|
|
|
$ |
601,725 |
|
|
$ |
576,371 |
|
|
12. Warrants
Amazon Warrant
On January 27, 2021, the Company entered into a Master Purchase Agreement with Amazon Logistics, Inc. (“Amazon”) for the purchase of certain goods, software, or other items from the Company. Concurrent with the Master Purchase Agreement, the parties entered into a warrant agreement (“Amazon Warrant”) on June 19, 2021 (“Issuance Date”) to purchase 420.7 million shares at an exercise price of $0.46647 per share. The Amazon Warrant is exercisable into shares of the Company’s Series C-1 Preferred Stock prior to the closing of a de-SPAC Transaction and into Class A common stock after the completion of a Qualified IPO (the “Warrant Shares”).
At the election of Amazon, any vested portion of the Amazon Warrant will be exercisable either on a cash basis by the payment of the applicable aggregate exercise price or on a net share basis under which Amazon is not obligated to the payment of the applicable aggregate exercise price and receives a reduced number of shares by the number of shares with a fair market value equal to the aggregate exercise price on the date of exercise.
Under the terms of Amazon Warrant, (1) 84.1 million Warrant Shares were vested and were immediately exercisable (“Initial Warrant Shares”) on the issuance date; and (2) the balance of Warrant Shares will vest and will be immediately exercisable based upon payments by Amazon on the Company's products or services until the total payments from Amazon equal to $200 million (“Remaining Warrant Shares”). During six months ended June 30, 2026 and the year ended December 31, 2025, no portion of the Warrant Shares vested.
The Amazon Warrant is determined to be a freestanding financial instrument that represents consideration payable to a customer in the form of the equity instrument issued not in exchange for distinct goods and services. The Company assessed the accounting treatment for the Amazon Warrant under ASC Topic 718. Prior to the consummation of a de-SPAC transaction, the underlying shares for the Amazon Warrants are Series C-1 Shares, which are contingently redeemable outside of the Company’s control (Note 11). The Amazon Warrants are therefore classified as a liability and subsequently measured at fair value, with changes in fair value being recorded in the unaudited condensed consolidated statements of operations and comprehensive loss. Upon the consummation of the de-SPAC transaction, the securities to be issued upon exercise of the Amazon Warrant will be shares of the Company’s Class A common stock that are not redeemable. Therefore, the Amazon Warrant will be reclassified as equity upon the completion of the de-SPAC Transaction.
TRATON Warrants
During March 2026, the Company executed a HyperFoundry revenue arrangement with TRATON. Pursuant to the terms of the arrangement, the Company agreed to cause TRATON to receive warrants to purchase 2,500,000 shares of Post-Closing Company Class A common stock at an exercise price of $11.50 per share (the “TRATON Base
F-105
Table of Contents
PLUS AUTOMATION, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Warrants”) and warrants to purchase 5,000,000 shares of Post-Closing Company Class A common stock at an exercise price of $11.50 per share (the “TRATON Milestone Warrants” and, collectively with the TRATON Base Warrants, the “TRATON Warrants”) upon both TRATON’s payment of consideration for the revenue arrangement and the completion of the Churchill Business Combination Agreement between PlusAI and Churchill. The TRATON Warrants expire seven years from issuance and are issuable in one or more portions upon receipt of payment, with the number of shares subject to each portion determined on a pro rata basis based on the applicable tranche relative to the total payments.
The TRATON Base Warrants are not subject to additional revenue-based exercisability conditions. The TRATON Milestone Warrants become exercisable upon commercial deployment of TRATON-branded trucks equipped with PlusAI’s SuperDrive technology based on the following cumulative revenue milestones measured by revenue received by the Company from such deployed trucks: (i) $100.0 million of revenue, at which 25% of the TRATON Milestone Warrants become exercisable, (ii) the next $100.0 million of revenue, at which an additional 25% become exercisable, and (iii) the next $200.0 million of revenue, at which the remaining 50% become exercisable.
The Company determined that the TRATON Warrants are determined to be a freestanding financial instrument that represents consideration payable to a customer in the form of the equity instrument issued not in exchange for distinct goods and services. The Company assessed the accounting treatment for the TRATON Warrants under ASC Topic 718. As of June 30, 2026, the grant date had not occurred and the Company concluded that the performance condition associated with the completion of the Churchill Business Combination Agreement was not probable as the transaction was terminated in April 2026; accordingly, no reduction of the $25.0 million transaction price was recognized as of June 30, 2026.
13. Stock-Based Compensation
Equity Incentive Plans
As of June 30, 2026, the Company had outstanding awards under its 2017 Share Plan (“2017 Plan”) and the 2021 Share Incentive Plan (“2021 Plan”). Under the 2017 Plan, the Company granted Options and RSAs. Under the 2021 Plan, the Company granted RSUs, PRSUs, and Penny Options. These awards are further classified as liability or equity type awards.
As of June 30, 2026, there were 54,318,035 and 162,379,021 shares reserved for issuance under the 2017 Plan and 2021 Plan, respectively.
Components of Stock-Based Compensation
Stock-based compensation is presented in the condensed consolidated statements of operations and comprehensive loss as follows:
|
For the Six Months |
|
|||||
|
|||||||
(in thousands) |
2026 |
|
|
2025 |
|
||
Research and development |
$ |
— |
|
|
$ |
223 |
|
Sales, marketing, general, and administrative |
|
16 |
|
|
|
493 |
|
Total stock-based compensation |
$ |
16 |
|
|
$ |
716 |
|
Stock-based compensation is recognized for the following types of awards:
|
For the Six Months |
|
|||||
|
|||||||
(in thousands) |
2026 |
|
|
2025 |
|
||
Common stock options |
$ |
— |
|
|
$ |
90 |
|
Restricted stock units |
$ |
16 |
|
|
$ |
620 |
|
Restricted stock awards |
|
— |
|
|
|
6 |
|
Total stock-based compensation |
$ |
16 |
|
|
$ |
716 |
|
F-106
Table of Contents
PLUS AUTOMATION, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Stock-based compensation includes the following types of awards:
|
For the Six Months |
|
|||||
|
|||||||
(in thousands) |
2026 |
|
|
2025 |
|
||
Equity-classified awards |
$ |
16 |
|
|
$ |
422 |
|
Liability-classified awards |
|
— |
|
|
|
294 |
|
Total stock-based compensation |
$ |
16 |
|
|
$ |
716 |
|
Common Stock Options with Service Conditions
In July 2023, the Company granted 49,000,000 Penny Options under the 2021 Plan with an exercise price of $0.000002 equal to the par value per share, of which 16,000,000 were exercised during the quarter ended June 30, 2026, and the remaining 3,000,000 Penny Options remained outstanding as of June 30, 2026. Penny Options are treated as outstanding shares for net loss per share purposes in all periods presented. No Options were granted during the periods presented in these unaudited condensed consolidated financial statements.
The following table summarizes the activity related to the outstanding Penny Options and Options with service conditions:
|
|
Number of |
|
|
Weighted |
|
|
Aggregate Intrinsic Value |
|
|
Weighted |
|
||||
Outstanding as of December 31, 2025 |
|
|
77,013,135 |
|
|
$ |
0.06 |
|
|
$ |
40,643 |
|
|
|
4.9 |
|
Exercised |
|
|
(19,695,100 |
) |
|
$ |
0.01 |
|
|
|
|
|
|
|
||
Outstanding as of June 30, 2026 |
|
|
57,318,035 |
|
|
$ |
0.08 |
|
|
$ |
25,843 |
|
|
|
3.7 |
|
Vested and exercisable as of June 30, 2026 |
|
|
57,318,035 |
|
|
$ |
0.08 |
|
|
$ |
25,843 |
|
|
|
3.7 |
|
The outstanding Penny Options and Options were fully vested as of June 30, 2026, and the Company recognized stock-based compensation in full prior to that date. The aggregate intrinsic value of the options exercised during the six months ended June 30, 2026 and 2025 was $11.2 million and $1.0 million, respectively.
The activity table above includes the Options held by the PRC Holders as of July 31, 2023, that became subject to the Plus PRC Service Requirement and were liability-classified.
Restricted Stock Units with Service Conditions
The following table summarizes the activity related to the outstanding unvested RSUs:
|
|
Number of |
|
|
Weighted |
|
||
Unvested as of December 31, 2025 |
|
|
48,214 |
|
|
$ |
0.38 |
|
Vested |
|
|
(48,214 |
) |
|
$ |
0.38 |
|
Unvested as of June 30, 2026 |
|
|
— |
|
|
|
|
|
As of June 30, 2026, unrecognized stock-based compensation related to the unvested equity-classified RSUs was immaterial. The liability-classified RSUs are held by the PRC Holders and are subject to the Plus PRC Service Requirement. The associated liability is reclassified to equity as the Plus PRC Service Requirement is met. The settlement date fair value for the liability-classified RSUs is at least equal to the grant-date fair value per share.
F-107
Table of Contents
PLUS AUTOMATION, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The following table summarizes the activity related to the vested and unreleased RSUs:
|
|
Number of |
|
|
Weighted |
|
||
Outstanding as of December 31, 2025 |
|
|
8,129,631 |
|
|
$ |
0.69 |
|
Vested |
|
|
48,214 |
|
|
$ |
0.38 |
|
Forfeited |
|
|
(96,130 |
) |
|
$ |
0.38 |
|
Outstanding as of June 30, 2026 |
|
|
8,081,715 |
|
|
$ |
0.70 |
|
Restricted Stock Units with Service and Performance Conditions
The following table summarizes the activity related to the outstanding unvested PRSUs:
|
|
Equity-Classified PRSU |
|
|
Liability-Classified PRSU |
|
||||||||||
|
|
Number of |
|
|
Weighted |
|
|
Number of |
|
|
Weighted |
|
||||
Unvested as of December 31, 2025 |
|
|
135,659,891 |
|
|
$ |
0.26 |
|
|
|
171,722 |
|
|
$ |
0.17 |
|
Granted |
|
|
23,250,000 |
|
|
$ |
0.55 |
|
|
|
— |
|
|
$ |
— |
|
Reclassified to equity |
|
|
164,637 |
|
|
$ |
0.17 |
|
|
|
(164,637 |
) |
|
$ |
0.17 |
|
Forfeited |
|
|
(4,850,973 |
) |
|
$ |
0.27 |
|
|
|
— |
|
|
$ |
— |
|
Unvested as of June 30, 2026 |
|
|
154,223,555 |
|
|
$ |
0.30 |
|
|
|
7,085 |
|
|
$ |
0.17 |
|
As of June 30, 2026, none of the PRSUs have vested and no stock-based compensation was recognized since the underlying performance condition linked to a liquidity event was not probable of occurrence. The closing of the de-SPAC Transaction discussed in Note 1 represents a qualified liquidity event for the vesting of the outstanding PRSUs to the extent that the underlying service requirement is met as of the closing date. As of June 30, 2026, there was $46.5 million of unrecognized stock-based compensation related to the unvested equity-classified PRSUs.
The unvested liability-classified PRSUs described above are held by the PRC Holders and are subject to the Plus PRC Service Requirement. To the extent that the Plus PRC Service Requirement is met, the PRSUs held by the PRC Holders are no longer precluded from being classified in stockholders' equity. The Company reclassifies these awards to equity as the Plus PRC Service Requirement is met and remeasures the per-share basis for these awards using the fair value per share as of the reclassification date.
Payment in Shares under Collaboration Agreement
In December 2023, the Company entered into a collaboration agreement (“CA”) with a third-party related to the development and integration of the Company’s technology. Under the CA, the Company may receive certain materials and technical assistance services from this third-party and settle the required fees in cash or shares. The number of shares issuable is determined as a fixed dollar amount based on the services that the Company elects to settle in shares (“TAS Costs”), up to $10.0 million (“Threshold”). If the Company executes Series D financing, the shares subject to the TAS Costs will be issued in the form of Series D redeemable convertible preferred stock.
Upon the de-SPAC Transaction discussed in Note 1, the Company will be required to issue all shares subject to the Threshold in the form of common stock of the successor entity based on the implied fair value per share of the Company’s common stock. These shares will become vested only to the extent that there are outstanding TAS Costs, and will vest in the future, as the Company consumes additional TAS Costs, up to the Threshold amount. The Company is required to use reasonable efforts to reach the Threshold by December 31, 2029. As of June 30, 2026, the outstanding TAS Costs liability was $0.2 million.
Repurchase of Executive RSA and Settlement of the RSA Loans
F-108
Table of Contents
PLUS AUTOMATION, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2024, the Company had 17,000,000 outstanding restricted shares (“Executive RSAs”), which were purchased by two executives using loans issued by the Company (“RSA Loans”). The Company previously determined that the RSA Loans were substantively issued on a non-recourse basis and treated this arrangement as an option on the 17,000,000 Executive RSAs. These Executive RSAs are presented as unvested for accounting purposes while the underlying RSA Loans are outstanding.
In September 2025, the Company executed a stock repurchase agreement to repurchase 2,971,825 Executive RSAs from an executive officer at $0.48 per share for approximately $1.4 million. The repurchase price did not exceed the estimated fair value per share on the repurchase date. The proceeds from this transaction were fully applied to settle the outstanding principal amount and accrued interest for the RSA Loans initially used by this executive officer to purchase 15,000,000 Executive RSAs.
In December 2025, the Company executed another stock repurchase agreement with the same executive officer, pursuant to which the Company repurchased 984,783 fully vested shares of common stock at $0.57 per share for approximately $0.6 million. For the repurchases executed during the year ended December 31, 2025, the repurchase price did not exceed the estimated fair value per share on the repurchase date. The constructive cash flows from the repayment of the RSA Loans and the stock repurchases are presented as the proceeds from exercise of stock options and the repurchase of restricted common stock awards, respectively, in the condensed consolidated statement of cash flows for the year ended December 31, 2025.
As of June 30, 2026, the 2,000,000 Executive RSAs are held by a different former executive of the Company, with an outstanding RSA Loan of $0.2 million related to these shares, including accrued interest. As of June 30, 2026, there was no unrecognized stock-based compensation associated with the Executive RSAs.
14. Income Taxes
The Company determines its income tax provision for interim periods using an estimate of its annual effective tax rate adjusted for discrete items occurring during the periods presented. The Company has recorded no tax provision for the six months ended June 30, 2026. For the six months ended June 30, 2025, the Company recorded income tax expense of $0.1 million. The primary difference between its effective tax rate and the federal statutory tax rate is the full valuation allowance the Company has recorded against its net deferred tax assets.
15. Segment Reporting and Geographic Information
The Company is currently in a pre-commercial research and development phase and is focused on developing an autonomous driving technology platform. The CODM uses net loss as the primary measure of segment profit and loss to assess performance and allocate resources in conjunction with the operating plans approved by the Board of Directors. The CODM utilizes the primary measure to monitor consolidated operating expenses, actual-to-budget variances, and trended actuals, which inform strategic decisions regarding the pace of personnel hiring, the prioritization of specific research and development initiatives, and the management of capital expenditures and overall forecasted cash burn.
In assessing performance and determining the allocation of resources, the CODM evaluates the components of net loss based on functional line items as disclosed in the condensed consolidated statements of operations and comprehensive loss. Significant expenses include research and development, sales, marketing, general and administrative, which are separately presented on the Company’s condensed consolidated statements of operations and comprehensive loss. The measure of segment assets is represented by the total assets of the Company as reported in the condensed consolidated balance sheets.
A summary of long-lived assets by geographic location for the unaudited condensed consolidated balance sheet dates presented is as follows:
|
|
June 30, |
|
|
December 31, |
|
||
(in thousands) |
|
2026 |
|
|
2025 |
|
||
United States |
|
$ |
1,844 |
|
|
$ |
2,313 |
|
Germany |
|
|
62 |
|
|
|
104 |
|
Total |
|
$ |
1,906 |
|
|
$ |
2,417 |
|
F-109
Table of Contents
PLUS AUTOMATION, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Substantially all of the Company’s revenue recognized during the six months ended June 30, 2026, was generated in Sweden. The Company recognized an immaterial amount of revenue during the six months ended June 30, 2025, all of which was generated in the United States.
16. Net Loss Per Share
The following table summarizes the computation of basic and diluted net loss per common share (in thousands, except per share amounts):
|
|
June 30, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Numerator |
|
|
|
|
|
|
||
Net Loss |
|
$ |
(7,896 |
) |
|
$ |
(56,930 |
) |
Less: cumulative dividends to preferred stockholders |
|
|
(17,134 |
) |
|
|
(32,626 |
) |
Net loss attributable to common stockholders, basic |
|
|
(25,030 |
) |
|
|
(89,556 |
) |
Less: gain on change in fair value of liability-classified SAFEs⁽¹⁾ |
|
|
(2,996 |
) |
|
|
— |
|
Net loss attributable to common stockholders, diluted |
|
|
(28,026 |
) |
|
|
(89,556 |
) |
Denominator |
|
|
|
|
|
|
||
Weighted-average shares outstanding, basic |
|
|
487,413,981 |
|
|
|
460,064,259 |
|
Effect of dilutive liability-classified SAFEs⁽¹⁾ |
|
|
34,454,272 |
|
|
|
— |
|
Weighted-average shares outstanding, diluted |
|
|
521,868,253 |
|
|
|
460,064,259 |
|
Net loss per common share, basic |
|
$ |
(0.05 |
) |
|
$ |
(0.19 |
) |
Net loss per common share, diluted |
|
$ |
(0.05 |
) |
|
$ |
(0.19 |
) |
(1) Relates to SAFEs that are not contingently redeemable as of June 30, 2026 with a principal amount of $19.1 million. Certain SAFEs are contingently redeemable as of June 30, 2026 that includes a principal balance of $22.0 million and are excluded from the Diluted EPS calculation.
The following potentially dilutive shares were excluded from the computation of diluted earnings per share for the periods presented because including them would have had an anti-dilutive effect:
|
|
June 30, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Redeemable convertible preferred stock |
|
|
952,548,647 |
|
|
|
952,548,647 |
|
Common stock options |
|
|
54,318,035 |
|
|
|
67,268,641 |
|
Executive RSAs |
|
|
2,000,000 |
|
|
|
17,000,000 |
|
Unvested RSUs with service conditions |
|
|
— |
|
|
|
785,463 |
|
Unvested PRSUs with service and performance conditions |
|
|
154,230,640 |
|
|
|
121,560,585 |
|
Redeemable convertible preferred stock warrants |
|
|
420,702,410 |
|
|
|
420,702,410 |
|
Shares issuable under simple agreements for future equity |
|
|
39,118,061 |
|
|
|
52,905,393 |
|
Total |
|
|
1,622,917,793 |
|
|
|
1,632,771,139 |
|
F-110
Table of Contents
PLUS AUTOMATION, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
17. Subsequent Events
The Company has reviewed and evaluated material subsequent events from the balance sheet date of June 30, 2026, through October 6, 2026, the date on which these unaudited condensed consolidated financial statements were available to be issued. Other than those noted below, no subsequent events have been identified for disclosure.
In August 2026, the Company amended the service-based vesting terms of certain outstanding unvested performance-based restricted stock units (“PRSUs”) representing 35,657,159 shares of common stock to transition the vesting frequency to a quarterly schedule. The amendment moved the dates for satisfying the service requirement from monthly dates to the immediately preceding February 20, May 20, August 20, or November 20.
On July, 2 2026, Plus entered into a sublease agreement for approximately 16,185 square feet of office space in Santa Clara, California. The lease commenced in the third quarter of 2026 and ends in April 2028 with total undiscounted fixed payments of approximately $1.2 million.
As discussed in Note 1, on September 2, 2026, the Company entered into the Agreement and Plan of Merger and Reorganization (“TVA III BCA”) Texas Ventures Acquisition III Corporation (“TVA III”), a publicly traded SPAC. Subject to the TVA III BCA, the combined company is anticipated to be listed on the Nasdaq. Prior to the TVA III BCA closing, the Company remains subject to customary interim operating covenants imposed by TVA III.
On September 2, 2026, in connection with the pending de-SPAC Transaction with TVA III, Plus entered into Subscription Agreements with certain investors providing the purchase of (i) Floating Rate Senior Convertible Paid-in Kind Notes (the “Note”) and accompanying warrants and (ii) shares of the post closing company Class A common stock and accompanying warrants, for aggregate gross proceeds of $61.5 million. The Company is evaluating the accounting treatment of the Notes, common stock and warrants, which will be determined and reported in the first reporting period following the consummation de-SPAC Transaction.
Concurrently with the execution of the Subscription Agreements, the Company entered into share issuance agreements (collectively, the “Share Issuance Agreements”) with certain existing investors of the Company, pursuant to which, contingent on the consummation of the de-SPAC Transaction, The Company will issue an aggregate of 112,343,523 shares of Class A common stock immediately prior to the closing of the de-SPAC Transaction for no additional consideration. Pursuant to the TVA Business Combination Agreement, such shares of Class A common stock will be automatically surrendered and exchanged for the right to receive a number of shares of Post-Closing Company Class A common stock.
F-111
Table of Contents
Annex A
AGREEMENT AND PLAN OF MERGER AND REORGANIZATION
by and among
TEXAS VENTURES ACQUISITION III CORP,
TVAC MERGER SUB I, INC.,
TVAC MERGER SUB II, LLC
and
PLUS AUTOMATION, INC.
dated as of
September 2, 2026
Table of Contents
TABLE OF CONTENTS
|
|
|
|
Page |
|
|
|
|
|
Article 1 |
Certain Definitions |
A-3 |
||
|
Section 1.01. |
|
Definitions |
A-3 |
|
Section 1.02. |
|
Construction |
A-19 |
|
Section 1.03. |
|
Knowledge |
A-20 |
|
Section 1.04. |
|
Equitable Adjustments |
A-20 |
Article 2 |
The Mergers |
A-20 |
||
|
Section 2.01. |
|
The Mergers |
A-20 |
|
Section 2.02. |
|
First Effective Time |
A-20 |
|
Section 2.03. |
|
Effect of the Mergers |
A-21 |
|
Section 2.04. |
|
Governing Documents |
A-21 |
|
Section 2.05. |
|
Directors and Officers of the Surviving Entity |
A-21 |
|
Section 2.06. |
|
Further Assurances |
A-22 |
Article 3 |
Merger Consideration; Conversion of Securities |
A-22 |
||
|
Section 3.01. |
|
Conversion of Company Preferred Stock and Company SAFEs |
A-22 |
|
Section 3.02. |
|
Effect of Mergers on Company Common Stock |
A-22 |
|
Section 3.03. |
|
Treatment of Company Equity Awards |
A-23 |
|
Section 3.04. |
|
Treatment of Company Warrant |
A-24 |
|
Section 3.05. |
|
Dissenting Shares |
A-24 |
|
Section 3.06. |
|
Earnout |
A-24 |
|
Section 3.07. |
|
Exchange Pool |
A-25 |
|
Section 3.08. |
|
Withholding Rights |
A-26 |
|
Section 3.09. |
|
Legend |
A-26 |
Article 4 |
Closing; Closing Statement |
A-26 |
||
|
Section 4.01. |
|
Closing |
A-26 |
|
Section 4.02. |
|
SPAC Closing Statement |
A-27 |
|
Section 4.03. |
|
Company Closing Statement |
A-27 |
Article 5 |
Representations and Warranties of the Company |
A-28 |
||
|
Section 5.01. |
|
Corporate Organization of the Company |
A-28 |
|
Section 5.02. |
|
Subsidiaries |
A-28 |
|
Section 5.03. |
|
Due Authorization |
A-28 |
|
Section 5.04. |
|
No Conflict |
A-28 |
|
Section 5.05. |
|
Governmental Authorities; Consents |
A-29 |
|
Section 5.06. |
|
Current Capitalization |
A-29 |
|
Section 5.07. |
|
Capitalization of Subsidiaries |
A-30 |
|
Section 5.08. |
|
Financial Statements |
A-31 |
|
Section 5.09. |
|
Undisclosed Liabilities |
A-31 |
|
Section 5.10. |
|
Litigation and Proceedings |
A-31 |
|
Section 5.11. |
|
Compliance with Laws |
A-31 |
|
Section 5.12. |
|
Contracts; No Defaults |
A-32 |
|
Section 5.13. |
|
Company Benefit Plans |
A-33 |
|
Section 5.14. |
|
Labor Matters |
A-36 |
|
Section 5.15. |
|
Taxes |
A-37 |
|
Section 5.16. |
|
Insurance |
A-39 |
|
Section 5.17. |
|
Permits |
A-39 |
|
Section 5.18. |
|
Real Property |
A-39 |
|
Section 5.19. |
|
Intellectual Property and Data Security |
A-40 |
|
Section 5.20. |
|
Anti-Bribery, Anti-Corruption |
A-43 |
|
Section 5.21. |
|
Sanctions, Import, and Export Controls |
A-43 |
A-i
Table of Contents
|
Section 5.22. |
|
CFIUS TID Business Status |
A-43 |
|
Section 5.23. |
|
Outbound Investment Security Program Status |
A-44 |
|
Section 5.24. |
|
Environmental Matters |
A-44 |
|
Section 5.25. |
|
Absence of Changes |
A-44 |
|
Section 5.26. |
|
Brokers’ Fees |
A-44 |
|
Section 5.27. |
|
Related Party Transactions |
A-44 |
|
Section 5.28. |
|
Registration Statement; Proxy Statement and Extension Proxy Statement |
A-44 |
Article 6 |
Representations and Warranties of SPAC Parties |
A-45 |
||
|
Section 6.01. |
|
Corporate Organization |
A-45 |
|
Section 6.02. |
|
Due Authorization |
A-45 |
|
Section 6.03. |
|
No Conflict |
A-46 |
|
Section 6.04. |
|
Compliance With Laws |
A-46 |
|
Section 6.05. |
|
Litigation and Proceedings |
A-46 |
|
Section 6.06. |
|
Governmental Authorities; Consents |
A-47 |
|
Section 6.07. |
|
Financial Ability; Trust Account |
A-47 |
|
Section 6.08. |
|
Brokers’ Fees |
A-48 |
|
Section 6.09. |
|
SEC Reports; Financial Statements; Sarbanes-Oxley Act; Undisclosed Liabilities |
A-48 |
|
Section 6.10. |
|
Business Activities |
A-49 |
|
Section 6.11. |
|
Tax Matters |
A-49 |
|
Section 6.12. |
|
Employees |
A-51 |
|
Section 6.13. |
|
Capitalization |
A-51 |
|
Section 6.14. |
|
Nasdaq Stock Market Listing |
A-52 |
|
Section 6.15. |
|
Sponsor Support Agreement |
A-52 |
|
Section 6.16. |
|
Related Party Transactions |
A-52 |
|
Section 6.17. |
|
Investment Company Act |
A-53 |
|
Section 6.18. |
|
SPAC Stockholders |
A-53 |
|
Section 6.19. |
|
Sanctions |
A-53 |
|
Section 6.20. |
|
CFIUS Foreign Person Status |
A-53 |
|
Section 6.21. |
|
Data Security Program Status |
A-53 |
|
Section 6.22. |
|
Outbound Investment Security Program Status |
A-53 |
|
Section 6.23. |
|
Registration Statement; Proxy Statement and Extension Proxy Statement |
A-53 |
Article 7 |
Covenants of the Company |
A-54 |
||
|
Section 7.01. |
|
Conduct of Business |
A-54 |
|
Section 7.02. |
|
Inspection |
A-57 |
|
Section 7.03. |
|
HSR Act and Approvals |
A-57 |
|
Section 7.04. |
|
No Claim Against the Trust Account |
A-58 |
|
Section 7.05. |
|
Proxy Solicitation; Other Actions |
A-58 |
|
Section 7.06. |
|
Certain Transaction Agreements |
A-59 |
|
Section 7.07. |
|
FIRPTA |
A-59 |
|
Section 7.08. |
|
Termination of Certain Agreements |
A-59 |
|
Section 7.09. |
|
Statement of Cash Usage |
A-59 |
|
Section 7.10. |
|
Written Consent and A&R Registration Rights Agreement |
A-59 |
Article 8 |
Covenants of SPAC |
A-59 |
||
|
Section 8.01. |
|
HSR Act and Regulatory Approvals |
A-59 |
|
Section 8.02. |
|
Indemnification and Insurance |
A-60 |
|
Section 8.03. |
|
Conduct of SPAC During the Interim Period |
A-62 |
|
Section 8.04. |
|
Certain Transaction Agreements |
A-63 |
|
Section 8.05. |
|
Inspection |
A-63 |
|
Section 8.06. |
|
SPAC Stock Exchange Listing |
A-63 |
|
Section 8.07. |
|
SPAC Public Filings |
A-64 |
|
Section 8.08. |
|
Section 16 Matters |
A-64 |
|
Section 8.09. |
|
SPAC Board of Directors |
A-64 |
|
Section 8.10. |
|
SPAC Management |
A-64 |
A-ii
Table of Contents
|
Section 8.11. |
|
Equity Plans |
A-64 |
|
Section 8.12. |
|
Qualification as an Emerging Growth Company |
A-64 |
|
Section 8.13. |
|
Domestication |
A-64 |
|
Section 8.14. |
|
PIPE Investment |
A-65 |
|
Section 8.15. |
|
SPAC Extension |
A-65 |
Article 9 |
Joint Covenants |
A-65 |
||
|
Section 9.01. |
|
Support of Transaction |
A-65 |
|
Section 9.02. |
|
Registration Statement; Proxy Statement; SPAC Special Meeting |
A-66 |
|
Section 9.03. |
|
Exclusivity |
A-69 |
|
Section 9.04. |
|
Tax Matters |
A-69 |
|
Section 9.05. |
|
Confidentiality; Publicity |
A-70 |
|
Section 9.06. |
|
Post-Closing Cooperation; Further Assurances |
A-70 |
|
Section 9.07. |
|
Stockholder Litigation |
A-70 |
|
Section 9.08. |
|
Post-Closing RSU Pool |
A-70 |
Article 10 |
Conditions to Obligations |
A-71 |
||
|
Section 10.01. |
|
Conditions to Obligations of All Parties |
A-71 |
|
Section 10.02. |
|
Additional Conditions to Obligations of SPAC Parties |
A-72 |
|
Section 10.03. |
|
Additional Conditions to the Obligations of the Company |
A-72 |
|
Section 10.04. |
|
Frustration of Conditions |
A-73 |
Article 11 |
|
Termination/Effectiveness |
A-73 |
|
|
Section 11.01. |
|
Termination |
A-73 |
|
Section 11.02. |
|
Effect of Termination |
A-74 |
Article 12 |
|
Miscellaneous |
A-74 |
|
|
Section 12.01. |
|
Waiver |
A-74 |
|
Section 12.02. |
|
Notices |
A-75 |
|
Section 12.03. |
|
Assignment |
A-76 |
|
Section 12.04. |
|
Rights of Third Parties |
A-76 |
|
Section 12.05. |
|
Expenses |
A-76 |
|
Section 12.06. |
|
Governing Law |
A-76 |
|
Section 12.07. |
|
Captions; Counterparts |
A-76 |
|
Section 12.08. |
|
Schedules and Exhibits |
A-76 |
|
Section 12.09. |
|
Entire Agreement |
A-76 |
|
Section 12.10. |
|
Amendments |
A-77 |
|
Section 12.11. |
|
Severability |
A-77 |
|
Section 12.12. |
|
Jurisdiction; Waiver of Trial by Jury |
A-77 |
|
Section 12.13. |
|
Enforcement |
A-77 |
|
Section 12.14. |
|
Non-Recourse |
A-78 |
|
Section 12.15. |
|
Non-survival of Representations, Warranties and Covenants |
A-78 |
|
Section 12.16. |
|
Acknowledgements |
A-78 |
A-iii
Table of Contents
EXHIBITS
Exhibit A |
– |
Form of SPAC Charter Upon Domestication |
|
Exhibit B |
– |
Form of SPAC Bylaws Upon Domestication |
|
Exhibit C |
– |
Sponsor Support Agreement |
|
Exhibit D |
– |
Form of Company Voting and Support Agreement |
|
Exhibit E |
– |
Form of A&R Registration Rights Agreement |
|
Exhibit F |
– |
Form of First Certificate of Merger |
|
Exhibit G |
– |
Form of Second Certificate of Merger |
|
Exhibit H |
– |
Form of A&R Certificate of Incorporation of the Surviving Corporation |
|
Exhibit I |
– |
Form of A&R LLC Agreement of the Surviving Entity |
|
Exhibit J |
– |
Form of Equity Incentive Plan |
|
Exhibit K |
– |
Form of Employee Stock Purchase Plan |
|
Exhibit L |
– |
Form of Written Consent |
|
A-iv
Table of Contents
AGREEMENT AND PLAN OF MERGER AND REORGANIZATION
THIS AGREEMENT AND PLAN OF MERGER AND REORGANIZATION (this “Agreement”) is made and entered into as of September 2, 2026, by and among Texas Ventures Acquisition III Corp, a Cayman Islands exempted company limited by shares, with registration number 412436 (which shall transfer by way of continuation out of the Cayman Islands and domesticate as a Delaware corporation prior to the Closing) (“SPAC”), TVAC Merger Sub I, Inc., a Delaware corporation and direct, wholly-owned Subsidiary of SPAC (“Merger Sub I”), TVAC Merger Sub II, LLC, a Delaware limited liability company and a direct, wholly-owned Subsidiary of SPAC (“Merger Sub II” and together with Merger Sub I, “Merger Subs”) and Plus Automation, Inc., a Delaware corporation (the “Company”). SPAC, Merger Subs and the Company are collectively referred to herein as the “Parties” and individually as a “Party.” Capitalized terms used and not otherwise defined herein have the meanings set forth in Section 1.01.
RECITALS
WHEREAS, SPAC is a blank check company incorporated as a Cayman Islands exempted company limited by shares and formed to acquire one or more operating businesses through a Business Combination;
WHEREAS, subject to the satisfaction or waiver of the conditions of this Agreement (other than those conditions that by their terms or nature are to be satisfied at the Closing, but subject to such conditions being capable of being satisfied at the Closing), prior to the Closing, SPAC shall transfer by way of continuation out of the Cayman Islands, migrate to and domesticate as a Delaware corporation in accordance with Section 388 of the Delaware General Corporation Law, as amended (the “DGCL”), Section 18-212 of the Delaware Limited Liability Company Act (the “DLLCA”), and Part 12 of the Cayman Companies Act (the “Domestication”). The Domestication will take place at least one day prior to the Closing;
WHEREAS, the sole holder of the SPAC Class B Ordinary Shares shall cause to be converted, immediately prior to the Domestication, each then issued and outstanding SPAC Class B Ordinary Share, on a one-for-one basis, into a SPAC Class A Ordinary Share (the “Sponsor Share Conversion”). In connection with the Domestication: (a) each then issued and outstanding SPAC Class A Ordinary Share shall convert automatically, on a one-for-one basis, into a share of SPAC Class A Common Stock; (b) each then issued and outstanding warrant to acquire SPAC Class A Ordinary Shares (each a “Cayman SPAC Warrant”) shall convert automatically into a warrant to acquire a corresponding number of shares of the SPAC Class A Common Stock, on a one-for-one basis (“Domesticated SPAC Warrant”), pursuant to the Warrant Agreement; and (c) each then issued and outstanding unit of SPAC (the “Cayman SPAC Units”) shall be cancelled and will thereafter entitle the holder of such unit to one share of SPAC Class A Common Stock and one-half of one Domesticated SPAC Warrant;
WHEREAS, substantially concurrently with, and in order to effectuate, the Domestication, and subject to the satisfaction or waiver of the conditions of this Agreement (other than those conditions that by their terms or nature are to be satisfied at the Closing, but subject to such conditions being capable of being satisfied at the Closing), SPAC will: (a) file a certificate of corporate domestication and a certificate of incorporation with the Secretary of State of the State of Delaware in substantially the form attached as Exhibit A (the “SPAC Charter Upon Domestication”); and (b) adopt bylaws in substantially the form attached as Exhibit B (the “SPAC Bylaws Upon Domestication”). SPAC and the Company may agree upon changes to the forms attached as Exhibits A and B, provided those changes are reflected in a written instrument signed by each of SPAC and the Company;
WHEREAS, on the terms and subject to the conditions of this Agreement and in accordance with the DGCL and other applicable Laws, the Parties intend to enter into a business combination transaction pursuant to which (a) Merger Sub I will merge with and into the Company, with the Company continuing as the surviving corporation (the “Surviving Corporation”) (the “First Merger”), and (b) immediately following the First Merger, the Surviving Corporation will merge with and into Merger Sub II, with Merger Sub II continuing as the surviving entity (the “Surviving Entity”) (the “Second Merger” and, together with the First Merger, the “Mergers”);
WHEREAS, for U.S. federal (and, as applicable, state and local) income tax purposes, each of the Parties intends that (i) the Domestication will qualify as a “reorganization” described in Section 368(a)(1)(F) of the Code and the Treasury Regulations promulgated under Section 368 of the Code; (ii) the Sponsor Share Conversion will qualify
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as a “reorganization” described in Section 368(a)(1)(E) of the Code and the Treasury Regulations promulgated under Section 368 of the Code; (iii) the Mergers, taken together as integrated steps of a single transaction for U.S. federal income tax purposes, will qualify as a “reorganization” within the meaning of Section 368(a) of the Code and the Treasury Regulations promulgated thereunder; and (iv) this Agreement shall constitute a “plan of reorganization” for the purposes of Section 368 of the Code and Treasury Regulations Section 1.368-2(g);
WHEREAS, the Company Board has unanimously (i) determined that the Mergers are fair to, and in the best interests of the Company and the Holders, (ii) approved and adopted this Agreement and declared it advisable and approved the Transactions (including the Mergers), and (iii) recommended that the stockholders of the Company approve and adopt this Agreement and approve the Transactions (including the Mergers) and directed that this Agreement and the Transactions (including the Mergers) be submitted for consideration by the stockholders of the Company (the “Company Board Recommendation”);
WHEREAS, the board of directors of SPAC has unanimously (i) determined that it is in the best interests of SPAC and the shareholders of SPAC, and declared it advisable, to enter into this Agreement providing for the Domestication and the Mergers in accordance with the DGCL and DLLCA, (ii) approved this Agreement and the Transactions, including the Domestication and the Mergers in accordance with the DGCL, the DLLCA, and the Cayman Companies Act on the terms and subject to the conditions of this Agreement, and (iii) adopted a resolution recommending the SPAC Stockholder Matters be approved and adopted by the shareholders of SPAC (the “SPAC Board Recommendation”);
WHEREAS, as a condition and inducement to the Company’s willingness to enter into this Agreement, concurrently with the execution and delivery of this Agreement, Sponsor has executed and delivered to the Company and SPAC the Sponsor Support Agreement (as defined below), a copy of which is attached as Exhibit C hereto, pursuant to which Sponsor has agreed to, among other things, (a) vote to (i) adopt and approve this Agreement and the other Transaction Agreements contemplated hereby and (ii) the Transactions, and (b) vote against any competing proposals at the Special Meeting;
WHEREAS, concurrently with the execution and delivery of this Agreement, certain Holders holding shares of Company Stock sufficient to constitute the Company Stockholder Approval have entered into one or more Voting and Support Agreements substantially in the form of Exhibit D attached hereto (each, a “Company Voting and Support Agreement”) with SPAC pursuant to which, inter alia, such Holders have agreed to vote their respective shares of Company Stock in favor of this Agreement, the Mergers and the Transactions; and
WHEREAS, prior to the Closing of the First Merger and as a condition thereto, SPAC, Sponsor, and certain existing or future stockholders of the Company have entered into an Amended and Restated Registration Rights Agreement (the “A&R Registration Rights Agreement”) substantially in the form attached hereto as Exhibit E, pursuant to which, effective as of the Closing of the First Merger, among other things certain stockholders of the Company have agreed, subject to certain exceptions, to not transfer the Merger Consideration received by them in connection with the Mergers for certain specified periods of time following the Closing Date.
WHEREAS, prior to the execution and delivery of this Agreement, SPAC entered into a confirmation of an OTC Equity Prepaid Forward Transaction (a “Pre-Paid Forward Purchase Agreement”) with an Affiliate of Sponsor, YA II PN, Ltd., a Cayman Islands exempted company, (“Sponsor Affiliate”) for a share forward transaction with respect to 1,050,000 SPAC Class A Ordinary Shares held by Sponsor Affiliate that will not be redeemed in connection with the Mergers, and prior to or concurrent with the execution and delivery of this Agreement, subscription agreements with Sponsor Affiliate and certain other investors (the “Initial PIPE Investors”), and SPAC may, in accordance with the terms set forth in this Agreement, from time to time following the date of this Agreement and prior to the Closing, enter into additional subscription agreements with certain additional investors (“Additional PIPE Investors” and, together with the Initial PIPE Investors, the “PIPE Investors”). Pursuant to such subscription agreements, the Initial PIPE Investors have agreed to purchase from SPAC either shares of SPAC Class A Common Stock or senior unsecured convertible notes (“Senior Convertible PIK Notes”) convertible into shares of SPAC Class A Common Stock and warrants for the purchase of SPAC Class A Common Stock (such investments by the Initial PIPE Investors, collectively, the “Initial PIPE Investment” and such investments by the Additional PIPE Investors, collectively, the “Additional PIPE Investment” and, together with the Initial PIPE Investment, the “PIPE Investment”). The PIPE Investment will be consummated immediately prior to the Closing;
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WHEREAS, concurrently with the execution and delivery of this Agreement, each of the individuals listed on Schedule I hereto is executing and delivering to SPAC an employment agreement (each, an “Employment Agreement”) in a form reasonably satisfactory to SPAC and the Company.
NOW, THEREFORE, in consideration of the foregoing and the respective representations, warranties, covenants and agreements set forth in this Agreement, and intending to be legally bound, the Parties hereby agree as follows:
Article 1
Certain Definitions
Section 1.01. Definitions. For purposes of this Agreement, the following capitalized terms have the following meanings:
“2017 Plan” means the 2017 Share Plan of the Company, as amended from time to time.
“2021 Plan” means the 2021 Share Incentive Plan of the Company, as amended from time to time.
“A&R Registration Rights Agreement” has the meaning specified in the Recitals.
“Acquisition Transaction” has the meaning specified in Section 9.03(a).
“Action” means any claim, action, suit, assessment, arbitration or legal, judicial or administrative proceeding (whether at Law or in equity) by or before a Governmental Authority.
“Additional PIPE Agreements” has the meaning set forth in Section 8.14.
“Additional PIPE Investment” has the meaning set forth in the Recitals.
“Additional PIPE Investors” has the meaning set forth in the Recitals.
“Additional SEC Reports” has the meaning specified in Section 8.07.
“Affiliate” means, with respect to any specified Person, any Person that, directly or indirectly, controls, is controlled by, or is under common control with, such specified Person, through one or more intermediaries or otherwise. The term “control” means the ownership of a majority of the voting securities of the applicable Person or the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of the applicable Person, whether through ownership of voting securities, by contract or otherwise, and the terms “controlled” and “controlling” have meanings correlative thereto; provided, that, in no event shall Sponsor be considered an Affiliate of any portfolio company of any investment fund affiliated with Sponsor Affiliate nor shall any portfolio company of any investment fund affiliated with Sponsor Affiliate be considered to be an Affiliate of Sponsor; provided, further, that, in no event shall the Company or any of the Company’s Subsidiaries be considered an Affiliate of any portfolio company (other than the Company and its Subsidiaries) of any investment fund affiliated with any direct or indirect equityholder of the Company nor shall any portfolio company (other than the Company and its Subsidiaries) of any investment fund affiliated with any direct or indirect equityholder of the Company be considered to be an Affiliate of the Company or any of the Company’s Subsidiaries.
“Agreement” has the meaning specified in the preamble hereto.
“AI Inputs” has the meaning specified in Section 5.19(f)(i).
“Available Closing SPAC Cash” means an amount equal to all amounts in the Trust Account (after reduction for the aggregate amount of payments required to be made in connection with the SPAC Stockholder Redemption), plus the gross proceeds received by SPAC from the PIPE Investment, calculated before payment of any Transaction Expenses.
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“Business Combination” has the meaning ascribed to such term in the Existing SPAC Governing Document.
“Business Combination Proposal” has the meaning set forth in Section 9.03(b).
“Business Day” means a day other than a Saturday, Sunday or other day on which commercial banks in New York, New York or San Francisco, California, or Governmental Authorities in the Cayman Islands (for so long as SPAC remains domiciled in the Cayman Islands) are authorized or required by Law to close.
“Capitalization Date” has the meaning specified in Section 5.06(b).
“Cayman Companies Act” means the Companies Act (Revised) of the Cayman Islands.
“Cayman SPAC Units” has the meaning specified in the Recitals.
“Cayman SPAC Warrant” has the meaning specified in the Recitals.
“Change in Control” means (i) a purchase, sale, exchange, business combination or other transaction (including a merger or consolidation of SPAC with or into any other corporation or other entity) in which the equity securities of SPAC, its successor, or the surviving entity of such business combination or other transaction are not registered under the Exchange Act or listed or quoted for trading on a national securities exchange, (ii) a sale, lease, exchange or other transfer (including a merger) in one transaction or a series of related transactions of assets representing fifty percent (50%) or more of the value of SPAC’s assets (including, after the Closing, the capital stock of the Company and other Subsidiaries of SPAC) to a third party that is not an Affiliate of the Sponsor (or a group of third parties that are not Affiliates of the Sponsor), (iii) the transfer to or acquisition by (whether by tender offer, merger, consolidation, division or other similar transaction), in one transaction or a series of related transactions, a person or entity or group of affiliated persons or entities (other than an underwriter pursuant to an offering), of SPAC’s voting securities if, after such transfer or acquisition, such person, entity or group of affiliated persons or entities would beneficially own (as defined in Rule 13d-3 promulgated under the Exchange Act) securities constituting more than fifty percent (50%) of the outstanding voting power of SPAC (it being understood for the purposes of this clause (iii), a bona fide equity financing shall not be considered a “Change in Control”), or (iv) a merger, consolidation or other business combination with or involving SPAC (or any Subsidiary or Subsidiaries that alone or together represent fifty percent (50%) or more of the value of SPAC’s assets) that results in the stockholders of SPAC immediately before the consummation of such transaction or series of related transactions holding, directly or indirectly, less than fifty percent (50%) of the voting power of SPAC (or such Subsidiary or Subsidiaries) or of any successor or surviving entity thereof or of any acquiring entity (or parent thereof), as applicable, immediately following the consummation of such transaction or series of related transactions.
“Closing” has the meaning specified in Section 4.01.
“Closing Date” has the meaning specified in Section 4.01.
“Code” means the Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder.
“Company” has the meaning specified in the preamble hereto.
“Company AI” has the meaning specified in Section 5.19(f)(i).
“Company Benefit Plan” has the meaning specified in Section 5.13(a).
“Company Board” means the Board of Directors of the Company.
“Company Board Recommendation” has the meaning specified in the Recitals.
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“Company Certificate of Incorporation” means the Amended and Restated Certificate of Incorporation of the Company, filed with the Secretary of State of the State of Delaware on July 31, 2023, as corrected by the State of Delaware Corrected Certificate, filed with the Secretary of State of the State of Delaware on August 4, 2023, as further amended and in effect on the date hereof.
“Company Class A Common Stock” means the Class A common stock, par value $0.000002 per share, of the Company.
“Company Class B Common Stock” means the Class B common stock, par value $0.000002 per share, of the Company.
“Company Closing Statement” has the meaning specified in Section 4.03.
“Company Common Stock” means the Company Class A Common Stock and Company Class B Common Stock.
“Company Cure Period” has the meaning specified in Section 11.01(b).
“Company Disclosure Letter” has the meaning specified in Article 5.
“Company Employee” means, as of the date of determination, an employee of the Company or any of its Subsidiaries as of such date.
“Company Employee List” means the letter provided by the Company to SPAC simultaneously with the execution and delivery of this Agreement, which letter contains a true and complete list of each Company Employee as of the date of this Agreement, together each such Company Employee’s name (or anonymous identifier if required by applicable Law), title or position, employing entity, hire date, work location (by country, state and city), full-time or part-time status, classification as exempt or non-exempt under the Fair Labor Standards Act and similar applicable Law (where applicable), current rate of hourly wage or salary and current annual target cash bonus opportunity, and visa or work permit status and if so, type, status and expiration date, in each case, as of the date of this Agreement and as applicable.
“Company Equity Awards” means Company Options and Company RSUs.
“Company Intellectual Property” means the Owned Intellectual Property and Licensed Intellectual Property.
“Company Options” means all issued and outstanding options to purchase or otherwise acquire Company Common Stock (whether or not vested) held by any Person granted under any Company Stock Plan.
“Company Preferred Stock” means the Company Series A-1 Preferred Stock, Company Series A-2 Preferred Stock, Company Series A-3 Preferred Stock, Company Series A-3-X Preferred Stock, Company Series A-4 Preferred Stock, Company Series A-4-X Preferred Stock, Company Series B Preferred Stock, Company Series B-X Preferred Stock, Company Series C Preferred Stock, and Company Series C-1 Preferred Stock.
“Company Representations” means the representations and warranties of the Company expressly and specifically set forth in Article 5 of this Agreement, as qualified by the Company Disclosure Letter. For the avoidance of doubt, the Company Representations are solely made by the Company.
“Company RSUs” means all restricted stock units corresponding to shares of Company Common Stock issued pursuant to a Company Stock Plan.
“Company SAFEs” means any Simple Agreement for Future Equity between the Company and the “Investors” party thereto in effect as of the date of this Agreement.
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“Company Series A-1 Preferred Stock” means the Series A-1 preferred stock, par value $0.000002 per share, of the Company.
“Company Series A-2 Preferred Stock” means the Series A-2 preferred stock, par value $0.000002 per share, of the Company.
“Company Series A-3 Preferred Stock” means the Series A-3 preferred stock, par value $0.000002 per share, of the Company.
“Company Series A-3-X Preferred Stock” means the Series A-3-X preferred stock, par value $0.000002 per share, of the Company.
“Company Series A-4 Preferred Stock” means the Series A-4 preferred stock, par value $0.000002 per share, of the Company.
“Company Series A-4-X Preferred Stock” means the Series A-4-X preferred stock, par value $0.000002 per share, of the Company.
“Company Series B Preferred Stock” means the Series B preferred stock, par value $0.000002 per share, of the Company.
“Company Series B-X Preferred Stock” means the Series B-X preferred stock, par value $0.000002 per share, of the Company.
“Company Series C Preferred Stock” means the Series C preferred stock, par value $0.000002 per share, of the Company.
“Company Series C-1 Preferred Stock” means the Series C-1 preferred stock, par value $0.000002 per share, of the Company.
“Company Service Provider” means each individual who is a current or former director, officer, employee, independent contractor or other service provider of the Company or any of its Subsidiaries.
“Company Specified Representations” has the meaning specified in Section 10.02(a)(i).
“Company Stock” means the Company Common Stock, Company Series A-1 Preferred Stock, Company Series A-2 Preferred Stock, Company Series A-3 Preferred Stock, Company Series A-3-X Preferred Stock, Company Series A-4 Preferred Stock, Company Series A-4-X Preferred Stock, Company Series B Preferred Stock, Company Series B-X Preferred Stock, Company Series C Preferred Stock, and Company Series C-1 Preferred Stock.
“Company Stock Plans” means the 2017 Plan and the 2021 Plan.
“Company Stockholder Agreements” means (i) the Company Certificate of Incorporation; (ii) the Voting Agreement dated as of July 31, 2023 by and among the Company and certain Holders; (iii) the Transfer Restriction Agreement dated as of July 31, 2023 by and among the Company and certain Holders; and (iv) the Investors’ Rights Agreement dated as of July 31, 2023 by and among the Company and certain Holders.
“Company Stockholder Approval” means the adoption of this Agreement by the vote or consent of (i) the holders of a majority of the voting power of the outstanding capital stock of the Company (voting together as a single class, and, with respect to the Company Preferred Stock, on an as-converted to Company Class A Common Stock basis) and (ii) the holders of a majority of the voting power of the outstanding Company Preferred Stock (voting together as a single class on an as-converted to Company Class A Common Stock basis).
“Company Subsidiary Securities” has the meaning specified in Section 5.07.
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“Company Total Shares” means the sum of (i) the aggregate number of issued and outstanding shares of Company Common Stock as of immediately prior to the First Effective Time after giving effect to the issuance set forth on Schedule 1.01 of the Company Disclosure Letter and the Conversions set forth under Section 3.01, calculated on an as-converted to Company Common Stock basis, (ii) the aggregate number of shares of Company Common Stock issuable upon the exercise of all Company Options to the extent outstanding and vested as of immediately prior to the First Effective Time, (iii) the aggregate number of shares of Company Common Stock issuable upon the settlement of Company RSUs outstanding as of immediately prior to the First Effective Time and that will vest in full solely as a result of the consummation of the Mergers, and (iv) the aggregate number of shares of Company Common Stock issuable as of immediately prior to the First Effective Time upon the exercise of all Company Warrants (on a net issuance basis) to the extent outstanding and vested as of immediately prior to the First Effective Time, calculated on an as-converted to Company Common Stock basis.
“Company Transaction Expenses” means all accrued fees, costs and expenses of the Company and its Subsidiaries incurred prior to and through the Closing Date in connection with the negotiation, preparation and execution of this Agreement, the other Transaction Agreements, the performance and compliance with all Transaction Agreements and conditions contained herein to be performed or complied with at or before Closing, and the consummation of the Transactions (including, for the avoidance of doubt, in connection with the PIPE Investment), including the fees, costs, expenses and disbursements of counsel, accountants, advisors and consultants of the Company and its Subsidiaries, to the extent unpaid prior to the Closing.
“Company Voting and Support Agreement” has the meaning specified in the Recitals.
“Company Warrants” means the warrants of the Company issued and outstanding as of immediately prior to the Closing.
“Confidentiality Agreement” has the meaning specified in Section 12.09.
“Contracts” means any written legally binding contracts, agreements, subcontracts, leases and purchase orders and all material written amendments, modifications and written supplements thereto.
“Conversions” has the meaning specified in Section 3.01.
“Data Security Program” means Executive Order 14117 and rules issued thereunder, including 28 C.F.R. Part 202, as amended from time to time.
“D&O Tail” has the meaning specified in Section 8.02(b).
“DGCL” has the meaning specified in the Recitals.
“Dissenting Shares” has the meaning specified in Section 3.05.
“Dissenting Stockholders” has the meaning specified in Section 3.05.
“DLLCA” has the meaning specified in the Recitals.
“Domesticated SPAC Warrant” has the meaning specified in the Recitals.
“Domestication” has the meaning specified in the Recitals.
“DPA” has the meaning specified in Section 5.22.
“Earnout Period” means the time period commencing on the Closing Date and ending on the earlier of (i) the five-year anniversary of the Closing Date and (ii) a Change in Control.
“Earnout Shares” has the meaning specified in Section 3.06(a).
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“Eligible Holders” means all Persons who hold one or more shares of Company Stock as of immediately prior to the First Effective Time (after giving effect to the Conversions described in Section 3.01).
“Enforceability Exceptions” has the meaning specified in Section 5.03.
“Environmental Laws” means any and all applicable Laws relating to pollution or protection of the environment (including natural resources) or human health and safety (with respect to exposure to Hazardous Materials), or the use, storage, emission, disposal or release of Hazardous Materials, each as in effect as of the date hereof.
“Equity Incentive Plan” has the meaning specified in Section 8.11.
“Equity Plans” has the meaning specified in Section 8.11.
“Equity Value” means the sum of $800,000,000.
“ERISA” has the meaning specified in Section 5.13(a).
“ERISA Affiliate” means each entity, trade or business that is, or was at the relevant time, a member of a group described in Section 414(b), (c), (m) or (o) of the Code or Section 4001(b)(1) of ERISA that includes or included the Company and its Subsidiaries, or that is, or was at the relevant time, a member of the same “controlled group” as the Company and its Subsidiaries pursuant to Section 4001(a)(14) of ERISA.
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“Exchange Agent” has the meaning specified in Section 3.07(a).
“Exchange Pool” has the meaning specified in Section 3.07(a).
“Exchange Ratio” means the quotient, rounded to the nearest thousandth (0.001), obtained by dividing (i) the Per Share Equity Value by (ii) ten dollars ($10.00).
“Exchanged Option” has the meaning specified in Section 3.03(b).
“Exchanged RSU” has the meaning specified in Section 3.03(c).
“Excise Tax” means any Taxes imposed on SPAC pursuant to Section 4501 of the Code (and any related guidance, including IRS Notice 2023-2) with respect to the exercise of any SPAC Stockholders of their redemption rights, and any penalties or interest thereon.
“Excluded Share” has the meaning specified in Section 3.02(c).
“Existing SPAC Governing Document” means the Amended and Restated Memorandum and Articles of Association of SPAC, as adopted by special resolution on April 22, 2025, and as in effect on the date hereof.
“Export Administration Regulations” means 15 C.F.R. 730-774, as implemented or revised from time to time.
“Extension Proxy Statement” has the meaning specified in Section 8.15.
“Extended Termination Date” has the meaning specified in Section 11.01(b).
“Financial Statements” has the meaning specified in Section 5.08(a).
“First Certificate of Merger” has the meaning specified in Section 2.02(a).
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“First Effective Time” has the meaning specified in Section 2.02(a).
“First Merger” has the meaning specified in the Recitals.
“Foreign Benefit Plan” has the meaning specified in Section 5.13(k).
“GAAP” means United States generally accepted accounting principles, consistently applied.
“Generative AI Tools” has the meaning specified in Section 5.19(f)(iii).
“Go-Forward D&O Policy” has the meaning specified in Section 8.02(b).
“Government Closure” has the meaning specified in Section 7.03(a).
“Government Official” means any officer or employee of a Governmental Authority or any department, agency, or instrumentality thereof, including any political subdivision thereof or any corporation or other Person owned or controlled in whole or in part by any Governmental Authority or any sovereign wealth fund, or of a public international organization, or any Person acting in an official capacity for or on behalf of any such government or department, agency, or instrumentality, or for or on behalf of any such public international organization, or any political party, party official, or candidate thereof.
“Governmental Authority” means any federal, state, provincial, municipal, local or foreign government, governmental authority, regulatory or administrative agency, governmental commission, department, board, bureau, agency or instrumentality, court or tribunal.
“Governmental Order” means any order, judgment, injunction, decree, writ, stipulation, determination or award, in each case, entered by or with any Governmental Authority.
“Grant Date” has the meaning specified in Section 5.13(e).
“Hazardous Material” means material, substance or waste that is listed, regulated, or otherwise defined as “hazardous,” “toxic,” or “radioactive,” or as a “pollutant” or “contaminant” (or words of similar intent or meaning) under applicable Environmental Laws, including but not limited to petroleum, petroleum by-products, asbestos or asbestos-containing material, polychlorinated biphenyls, per- and polyfluoroalkyl substances, flammable or explosive substances, or pesticides.
“Holders” means all Persons who hold one or more shares of Company Stock as of immediately prior to the First Effective Time.
“HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder.
“ICE” has the meaning specified in Section 5.14(g).
“Indebtedness” means, with respect to any Person as of any time, without duplication, (i) all indebtedness for borrowed money of such Person or indebtedness issued by such Person in substitution or exchange for borrowed money, (ii) indebtedness evidenced by any note, bond, debenture or other debt security, in each case, as of such time of such Person, (iii) obligations of such Person for the deferred purchase price of property or other services (other than trade payables or accruals incurred in the ordinary course of business), (iv) all obligations as lessee that are required to be capitalized in accordance with GAAP (other than real estate leases and any other leases that are only required to be capitalized upon adoption of ASC 842), (v) all obligations of such Person for the reimbursement of any obligor on any line or letter of credit, banker’s acceptance, guarantee or similar credit transaction, in each case, to the extent drawn or claimed against, (vi) all interest rate and currency swaps, caps, collars and similar agreements or hedging devices under which payments are obligated to be made by such Person, (vii) any premiums, prepayment fees or other penalties, fees, costs or expenses associated with payment of any Indebtedness of such Person and (viii) all obligations
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of the type referred to in clauses (i) - (vii) of this definition of any other Person, the payment of which such Person is responsible or liable, directly or indirectly, as obligor, guarantor, surety or otherwise, including any guarantee of such obligations. Notwithstanding anything to the contrary contained herein, “Indebtedness” of any Person shall not include any item that would otherwise constitute “Indebtedness” of such Person that is an obligation between such Person and any wholly-owned Subsidiary of such Person or between any two or more wholly-owned Subsidiaries of such Person.
“Indemnified Person” has the meaning specified in Section 8.02(a).
“Indemnitee Affiliates” has the meaning specified in Section 8.02(c).
“Information or Document Request” means any request or demand for the production, delivery or disclosure of documents or other evidence, or any request or demand for the production of witnesses for interviews or depositions or other oral or written testimony, by any Regulatory Consent Authority relating to the Transactions or by any third party challenging the Transactions, including any so called “second request” for additional information or documentary material or any civil investigative demand made or issued by any Regulatory Consent Authority or any subpoena, interrogatory or deposition.
“Initial PIPE Agreements” has the meaning specified in Section 6.13(f).
“Initial PIPE Investment” has the meaning specified in the Recitals.
“Initial PIPE Investors” has the meaning specified in the Recitals.
“Intellectual Property” means all intellectual property rights (including with respect to Technology) created, arising, or protected under applicable Law (or any other similar statutory provision or common law doctrine in the United States or anywhere else in the world), including all: (i) patents and patent applications, (ii) such right in trademarks, service marks, trade names, trade dress, and other indicia of commercial source or origin and general intangibles of a like nature, and all goodwill associated with any of the foregoing (collectively, “Trademarks”), (iii) copyrights and such rights in copyrightable works and works of authorship, and moral rights and technical database and design rights, and rights in data collections, (iv) internet domain names and social media accounts, (v) such rights in trade secrets, confidential or proprietary information, and other non-public or proprietary information, including inventions, invention disclosures, inventor’s notes, designs, plans, specifications, unpatented blueprints, drawings, discoveries and improvements, know-how, manufacturing and production processes and techniques, research and development information, market know-how, customer lists, and proprietary data (collectively, “Trade Secrets”), (vi) such rights in proprietary Software and Technology, and (vii) all issuances, registrations and applications to register (including any reissuances, divisionals, continuations, continuations-in-part, revisions, renewals, extensions, and re-examinations thereof and rights to claim priority to) any of the foregoing (i)–(vi).
“Intended Tax Treatment” has the meaning specified in Section 9.04(b).
“Interim Period” has the meaning specified in Section 7.01.
“IRS” means the Internal Revenue Service.
“IT Systems” means all computer systems, servers, networks, websites, computer hardware and equipment used to process, store, maintain and operate data, information and functions that are owned, licensed or leased or otherwise used by or on behalf of a Person, including any Software embedded or installed thereon.
“JOBS Act” has the meaning specified in Section 8.12.
“Labor Contract” has the meaning specified in Section 5.12(a)(ix).
“Labor Union” has the meaning specified in Section 5.12(a)(ix).
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“Law” means any applicable statute, law (including principle of common law or law of equity), ordinance, rule, regulation or Governmental Order, in each case, of any Governmental Authority.
“Leased Real Property” means all real property leased by the Company or its Subsidiaries, the Lease of which may not be terminated at will, or by giving notice of ninety (90) days or less, without cost or penalty.
“Leases” has the meaning specified in Section 5.18(c).
“Licensed Intellectual Property” has the meaning specified in Section 5.19(a).
“Lien” means any mortgage, deed of trust, pledge, hypothecation, encumbrance, easement, license, option, right of first refusal, security interest or other lien of any kind.
“Malware” has the meaning specified in Section 5.19(d).
“Material Adverse Effect” means, with respect to the Company, a material adverse effect on the business, results of operations or financial condition of the Company and its Subsidiaries, taken as a whole; provided, however, that in no event would any of the following (or the effect of any of the following), alone or in combination, be deemed to constitute, or be taken into account in determining whether there has been or will be, a “Material Adverse Effect” on the business, results of operations or financial condition of the Company and its Subsidiaries, taken as a whole: (a) any change in applicable Laws or GAAP or any interpretation thereof, (b) any change in interest rates or economic, political, business, financial, commodity, currency or market conditions generally, (c) the announcement or the execution of this Agreement, the pendency or consummation of the Mergers or the performance of this Agreement, including the impact thereof on relationships, contractual or otherwise, with customers, suppliers, licensors, distributors, partners, providers and employees (provided that the exceptions in this clause (c) shall not be deemed to apply to references to “Material Adverse Effect” in the representations and warranties set forth in Section 5.04 and, to the extent related thereto, the condition in Section 10.02(a)), (d) any change generally affecting any of the industries or markets in which the Company or its Subsidiaries operate or the economy as a whole, including inflation or supply chain disruptions, (e) the compliance with the terms of this Agreement or the taking of any action required or contemplated by this Agreement or with the prior written consent of SPAC (provided that the exceptions in this clause (e) shall not be deemed to apply to references to “Material Adverse Effect” in the representations and warranties set forth in Section 5.04 and, to the extent related thereto, the condition in Section 10.02(a)), (f) any earthquake, hurricane, tsunami, tornado, flood, mudslide, wild fire or other natural disaster, act of God or other force majeure event, or acts of terrorism, cyberterrorism, cyberattacks (or similar attacks), any acts or threats of war (whether or not declared), imposition of tariffs or trade wars, civil unrest, civil disobedience, sabotage, cybercrime, government shutdowns, national or international calamity, military action, outbreak of hostilities, declaration of a national emergency or any other similar event, or any change, escalation or worsening thereof after the date hereof, (g) any national or international political or social conditions in countries in which, or in the proximate geographic region of which, the Company operates, including the engagement by the United States or such other countries in hostilities or the escalation thereof, whether or not pursuant to the declaration of a national emergency or war, or the occurrence or the escalation of any military or terrorist attack upon the United States or such other country, or any territories, possessions, or diplomatic or consular offices of the United States or such other countries or upon any United States or such other country military installation, equipment or personnel, (h) any failure of the Company and its Subsidiaries, taken as a whole, to meet any projections, predictions, forecasts or budgets; provided, that clause (h) shall not prevent or otherwise affect a determination that any change or effect underlying such failure to meet projections, predictions or forecasts has resulted in, or contributed to, or would reasonably be expected to result in or contribute to, a Material Adverse Effect (to the extent such change or effect is not otherwise excluded from this definition of Material Adverse Effect), (i) any epidemic, pandemic or disease outbreak or any Law, directive, pronouncement or guideline issued by a Governmental Authority, the Centers for Disease Control and Prevention, the World Health Organization or industry group providing for business closures, changes to business operations, “sheltering-in-place” or other restrictions that relate to, or arise out of, an epidemic, pandemic or disease outbreak or any change in such Law, directive, pronouncement or guideline or interpretation thereof following the date of this Agreement or the Company’s or any of its Subsidiaries’ compliance therewith, (j) any stockholder class action litigation, derivative or similar litigation arising out of or in connection with or relating to this Agreement and the Transactions, including allegations of a breach of fiduciary duty or any demand, action, claim or proceeding for appraisal of any Company Stock pursuant to the DGCL in connection with this Agreement and the Transactions, (k) the identity of, or any facts or circumstances
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relating to, SPAC, Merger Subs or their respective affiliates, or the availability of equity, debt or other financing to SPAC or Merger Subs, or (l) any matter set forth in the Schedules to this Agreement; provided that, in the case of clauses (a), (b), (d), (f) and (g) such changes may be taken into account to the extent (but only to the extent) that such changes have had a disproportionate impact on the Company and its Subsidiaries, taken as a whole, as compared to other competitors or comparable entities operating in the industries or markets and geographic areas in which the Company and its Subsidiaries operate.
“Material Contracts” has the meaning specified in Section 5.12(a).
“Mergers” has the meaning specified in the Recitals.
“Merger Consideration” means the number of shares of SPAC Common Stock issuable to holders of Company Stock in the Mergers pursuant to Article 3.
“Merger Sub I” has the meaning specified in the preamble hereto.
“Merger Sub II” has the meaning specified in the preamble hereto.
“Merger Subs” has the meaning specified in the preamble hereto.
“Most Recent Balance Sheet” has the meaning specified in Section 5.08(a).
“Multiemployer Plan” means each Company Benefit Plan that is a “multiemployer plan” as defined in Section 3(37) or 4001(a)(3) of ERISA or Section 414(f) of the Code.
“Nasdaq” means the Nasdaq Global Market.
“Outbound Investment Security Program” means 31 C.F.R. Part 850, as implemented or revised from time to time.
“Owned Intellectual Property” means all Intellectual Property and Technology that is owned or purported to be owned by the Company or its Subsidiaries.
“Owned Real Property” means all real property owned by the Company or its Subsidiaries.
“Party” and “Parties” have the meanings specified in the preamble hereto.
“Per Share Equity Value” means the quotient, rounded to the nearest cent ($0.01), obtained by dividing (i) the sum of (A) the Equity Value plus (B) the aggregate exercise price of all Company Options, in each case to the extent outstanding and vested as of immediately prior to the First Effective Time by (ii) the Company Total Shares.
“Per Share Merger Consideration” means, with respect to any share of Company Common Stock that is issued and outstanding immediately prior to the First Effective Time after giving effect to the Conversions set forth under Section 3.01, (i) the right to receive shares of SPAC Common Stock pursuant to Section 3.02(a) and (ii) the contingent right to receive the Earnout Shares in accordance with Section 3.06(a).
“Permits” has the meaning specified in Section 5.17.
“Permitted Liens” means (i) statutory or common law Liens of mechanics, materialmen, warehousemen, landlords, carriers, repairmen, construction contractors and other similar Liens that arise in the ordinary course of business, that relate to amounts not yet delinquent or that are being contested in good faith through appropriate Actions, in each case only to the extent appropriate reserves have been established in accordance with GAAP, (ii) Liens arising under original purchase price conditional sales contracts and equipment leases with third parties entered into in the ordinary course of business, (iii) Liens for Taxes not yet delinquent or which are being contested in good faith through appropriate Actions for which appropriate reserves have been established in accordance with GAAP,
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(iv) Liens, encumbrances and restrictions on real property (including easements, covenants, rights of way and similar restrictions of record) that (A) are matters of record, (B) would be disclosed by a current, accurate survey or physical inspection of such real property, or (C) do not materially interfere with the present uses of such real property, (v) Liens that (A) were not incurred in connection with indebtedness for borrowed money and (B) are not material to the Company and its Subsidiaries, taken as a whole, (vi) non-exclusive licenses of Intellectual Property, (vii) Liens securing any Indebtedness of the Company and its Subsidiaries, (viii) any Lien that is disclosed on the Most Recent Balance Sheet or notes thereto (or securing liabilities reflected on such balance sheet), (ix) deemed to be created by this Agreement, any Transaction Agreement or any other document executed in connection herewith, (x) any Lien that will be released prior to the Closing, and (xi) any other Liens that would not reasonably be expected to, individually or in the aggregate, materially impair the continued use and operation of the assets to which they relate in the business of the Company and its Subsidiaries as presently conducted.
“Permitted Working Capital Loan” means one or more Working Capital Loans, of which an aggregate of up to $1,500,000 may be converted upon the completion of the Business Combination may be converted into Domesticated SPAC Warrants at a price of $1.00 per warrant.
“Person” means any individual, firm, corporation, partnership, limited liability company, incorporated or unincorporated association, joint venture, joint stock company, governmental agency or instrumentality or other entity of any kind.
“Personal Information” means information Processed by or for the Company that identifies, or could be used to identify, a natural living individual, including any such information that constitutes “personal data,” “personal information,” “personally identifiable information,” or a similar term under applicable Privacy Requirements.
“Personnel IP Agreements” has the meaning specified in Section 5.19(c).
“PIPE Agreements” has the meaning specified in Section 8.14.
“PIPE Investment” has the meaning specified in the Recitals.
“PIPE Investors” has the meaning specified in the Recitals.
“Policies” has the meaning specified in Section 5.16.
“Post-Closing RSU Pool” has the meaning specified in Section 9.08.
“Premium Cap” has the meaning specified in Section 8.02(b).
“Pre-Paid Forward Purchase Agreement” has the meaning specified in the Recitals.
“Privacy Laws” means all Laws regarding data privacy, data protection, or data security that are applicable to the receipt, collection, compilation, adaptation or alteration, retrieval, use, storage, processing, sharing, safeguarding, security (technical, administrative and physical), disposal, destruction, disclosure or transfer (including cross-border) whether or not by automated means (collectively, “Processing”, or “Processed”, as applicable) of Personal Information by or for the Company, including, but not limited to, to the extent applicable, the California Consumer Privacy Act as amended by the California Privacy Rights Act (CCPA), EU General Data Protection Regulation (GDPR), Controlling the Assault of Non-Solicited Pornography and Marketing (CAN-SPAM) Act, Telephone Consumer Protection Act (TCPA), and any and all applicable Laws relating to (i) breach notification in connection with Personal Information, (ii) the use of biometric identifiers, or (iii) the use of Personal Information for marketing purposes.
“Privacy Requirements” has the meaning specified in Section 5.19(g).
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“Pro Rata Share” means, for each Eligible Holder, as of the occurrence of any Triggering Event, a percentage determined by dividing (i) the total number of shares of Company Common Stock held by such Eligible Holder immediately prior to the First Effective Time, after giving effect to the Conversions described in Section 3.01, by (ii) the total of (A) the aggregate number of shares of Company Common Stock issued and outstanding immediately prior to the First Effective Time, after giving effect to the Conversions described in Section 3.01, plus (B) the aggregate number of shares of Company Common Stock issuable upon the settlement of Company RSUs granted pursuant to Section 9.08, to the extent such Company RSUs vest as a result of the occurrence of such Triggering Event, plus (C) the aggregate number of shares of Company Common Stock issuable as of immediately prior to the First Effective Time upon the exercise of all Company Warrants (on a net issuance basis) to the extent outstanding and vested as of immediately prior to the First Effective Time, calculated on an as-converted to Company Common Stock basis.
“Proxy Clearance Date” has the meaning specified in Section 9.02(a).
“Proxy Statement” has the meaning specified in Section 9.02(a).
“Registered Intellectual Property” has the meaning specified in Section 5.19(a).
“Registration Statement” means the Registration Statement on Form S-4, or other appropriate form determined by the Parties, including any pre-effective or post-effective amendments or supplements thereto, to be filed with the SEC by SPAC under the Securities Act with respect to SPAC Common Stock to be issued in connection with the transactions contemplated by this Agreement.
“Regulatory Consent Authorities” means the Antitrust Division of the United States Department of Justice or the United States Federal Trade Commission, as applicable.
“Representative” means, as to any Person, any of the officers, directors, managers, employees, counsel, accountants, financial or capital markets advisors, placement agents and consultants of such Person.
“Required Company Information” has the meaning specified in Section 7.05(a).
“Sanctioned Party” means any Person that is: (i) organized under the Laws of, ordinarily resident in, or located in a country or territory that is the subject of comprehensive Sanctions; (ii) designated on a sanctioned parties list administered by the United States, European Union, or United Kingdom, including, without limitation, the U.S. Department of the Treasury’s Office of Foreign Assets Control’s Specially Designated Nationals and Blocked Persons List, Foreign Sanctions Evaders List, Sectoral Sanctions Identification List, the Consolidated List of Persons, Groups, and Entities Subject to EU Financial Sanctions, and the UK’s Consolidated Sanctions List; or (iii) fifty percent (50%) or more owned or, where relevant under applicable Sanctions, controlled, individually or in the aggregate, by one or more Persons described in subparagraph (i) or (ii) of this clause.
“Sanctions” means applicable Laws pertaining to trade and economic sanctions administered by the United States, European Union, United Kingdom or other relevant jurisdiction.
“Schedules” means (i) the Company Disclosure Letter or (ii) the SPAC Disclosure Letter, as applicable.
“SEC” means the United States Securities and Exchange Commission.
“SEC Reports” has the meaning specified in Section 6.09(a).
“Second Certificate of Merger” has the meaning specified in Section 2.02(b).
“Second Effective Time” has the meaning specified in Section 2.02(b).
“Second Merger” has the meaning specified in the Recitals.
“Securities Act” means the Securities Act of 1933, as amended.
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“Securities Laws” means the securities Laws of any state, federal or foreign entity and the rules and regulations promulgated thereunder.
“Security Incident” has the meaning specified in Section 5.19(h).
“Senior Convertible PIK Notes” has the meaning specified in the Recitals.
“Software” means any and all computer programs, including any and all software implementation of algorithms, models and methodologies, whether in source code, object code, human readable form or other form.
“SPAC” has the meaning specified in the preamble hereto. For the avoidance of doubt, the term “SPAC” shall include from and after the Domestication and the Closing, PlusAI Holdings, Inc.
“SPAC Board Recommendation” has the meaning specified in the Recitals.
“SPAC Bylaws Upon Domestication” has the meaning specified in the Recitals.
“SPAC Charter Upon Domestication” has the meaning specified in the Recitals.
“SPAC Class A Common Stock” means, from and after the Domestication, the shares of Class A common stock, par value $0.0001 per share, of SPAC.
“SPAC Class A Ordinary Share” means the Class A ordinary shares, par value $0.0001 per share, of SPAC prior to the Domestication.
“SPAC Class B Common Stock” means, from and after the Domestication, the shares of Class B common stock, par value $0.0001 per share, of SPAC.
“SPAC Class B Ordinary Share” means the Class B ordinary shares, par value $0.0001 per share, of SPAC prior to the Domestication.
“SPAC Class C Common Stock” means, from and after the Domestication, the shares of Class C common stock, par value $0.0001 per share, of SPAC.
“SPAC Closing Statement” has the meaning specified in Section 4.02.
“SPAC Common Stock” means (i) prior to the Domestication, the ordinary shares of SPAC, par value $0.0001 per share, and (ii) from and after the Domestication, the SPAC Class A Common Stock, the SPAC Class B Common Stock and the SPAC Class C Common stock.
“SPAC Cure Period” has the meaning specified in Section 11.01(c).
“SPAC Disclosure Letter” has the meaning specified in Article 6.
“SPAC Extension” has the meaning specified in Section 8.15.
“SPAC Material Adverse Effect” means, with respect to SPAC, a material adverse effect on: (i) the ability of any SPAC Party to enter into this Agreement or any Transaction Agreement and perform its respective obligations thereunder or consummate the Transactions or (ii) the business, condition (financial or otherwise), assets, liabilities or operations of SPAC, provided, however, that none of the following, alone or in combination, shall be deemed to constitute or be taken into account in the determination of whether, there has been or will be a SPAC Material Adverse Effect under this clause (ii): (a) any change in applicable Laws or GAAP or any interpretation thereof, (b) any change in interest rates or economic, political, business, financial, commodity, currency or market conditions generally, (c) any actions taken or not taken by SPAC, or such other changes or events, in each case, which (I) the Company has consented in writing or (II) are required by this Agreement (provided that the exceptions in this clause (c) shall not be
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deemed to apply to references to “Material Adverse Effect” in the representations and warranties set forth in Section 6.03 and, to the extent related thereto, the condition in Section 10.03(a)) and (d) the announcement or the execution of this Agreement, the pendency or consummation of the Mergers or the performance of this Agreement (provided that the exceptions in this clause (d) shall not be deemed to apply to references to “SPAC Material Adverse Effect” in the representations and warranties set forth in Section 6.03 and, to the extent related thereto, the condition in Section 10.03(a)); provided that, in the case of clauses (a) and (b) such changes may be taken into account to the extent (but only to the extent) that such changes have had a disproportionate impact on SPAC, as compared to other competitors or comparable entities operating in the industries or markets in which SPAC operates.
“SPAC Organizational Documents” means, (i) prior to the Domestication, the Existing SPAC Governing Document, as amended and in effect on the date hereof, and (ii) following the Domestication, the SPAC Charter Upon Domestication and SPAC Bylaws Upon Domestication.
“SPAC Parties” means SPAC and Merger Subs.
“SPAC Party Representations” means the representations and warranties of SPAC and Merger Subs expressly and specifically set forth in Article 6 of this Agreement, as qualified by the SPAC Disclosure Letter.
“SPAC Preference Shares” means, prior to the Domestication, the preference shares, par value $0.0001 per share, of SPAC.
“SPAC Preference Stock” means, after the Domestication, the preference shares, par value $0.0001 per share, of SPAC.
“SPAC Shares” means the SPAC Class A Ordinary Shares, SPAC Class B Ordinary Shares and the SPAC Preference Shares.
“SPAC Specified Representations” has the meaning specified in Section 10.03(a)(i).
“SPAC Stockholder Matters” has the meaning specified in Section 9.02(a).
“SPAC Stockholder Redemption” has the meaning specified in Section 9.02(a).
“SPAC Stockholders” means (i) prior to the Domestication, the holders of SPAC Shares, and (ii) following the Domestication, the holders of shares of SPAC Common Stock.
“SPAC Transaction Expenses” means all fees, costs and expenses of SPAC incurred prior to and through the Closing Date in connection with the negotiation, preparation and execution of this Agreement, the other Transaction Agreements, the performance and compliance with all Transaction Agreements and covenants contained herein to be performed or complied with at or before Closing, and the consummation of the Transactions (including, for the avoidance of doubt, in connection with the PIPE Investment), including, subject to Section 12.05, any (i) fees, costs and expenses related to the D&O Tail unless included in the Go-Forward D&O Policy without incremental costs or premium, (ii) deferred underwriting fees, (iii) any amounts outstanding under any Working Capital Loans (excluding, for the avoidance of doubt, any Permitted Working Capital Loans that are converted into Domesticated SPAC Warrants prior to the Closing), and (iv) fees, costs, expenses and disbursements of counsel, accountants, advisors and consultants of SPAC, to the extent unpaid prior to the Closing, provided, that any Excise Tax payable by SPAC shall expressly be excluded and shall not be deemed SPAC Transaction Expenses.
“SPAC Transaction Expenses Amount” has the meaning specified in Section 12.05.
“Special Meeting” has the meaning specified in Section 9.02(e).
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“Specified SPAC Transaction Expenses” has the meaning specified in Section 12.05.
“Sponsor” means Yorkville Acquisition Sponsor II, LLC, a Florida limited liability company.
“Sponsor Affiliate” has the meaning specified in the Recitals.
“Sponsor Agreement” means that letter agreement by and among Sponsor, SPAC, and TV Partners III, LLC, dated September 18, 2025.
“Sponsor Support Agreement” means that agreement described in the Recitals pursuant to which Sponsor has agreed to, among other things, (a) vote to (i) adopt and approve this Agreement and the other Transaction Agreements contemplated hereby and (ii) the Transactions and (b) vote against any competing proposals at the Special Meeting.
“Sponsor Share Conversion” has the meaning specified in the Recitals.
“Standard Employment Agreements” has the meaning specified in Section 5.13(a).
“Stock Exchange” means the Nasdaq or such other stock exchange as the Company and SPAC may mutually agree prior to the Closing.
“Stockholder Action” has the meaning specified in Section 9.07.
“Stockholder Action Expenses” has the meaning specified in Section 9.07.
“Subsidiary” means, with respect to a Person, any corporation or other organization (including a limited liability company, exempted company, partnership or such other entity), whether incorporated or unincorporated, of which such Person directly or indirectly owns or controls a majority of the securities or other interests having by their terms ordinary voting power to elect a majority of the board of directors or others performing similar functions with respect to such corporation or other organization or any organization of which such Person or any of its Subsidiaries is, directly or indirectly, a general partner or managing member.
“Surviving Corporation” has the meaning specified in the Recitals.
“Surviving Entity” has the meaning specified in the Recitals.
“Surviving Provisions” has the meaning specified in Section 11.02.
“Tax” or “Taxes” means (i) any and all federal, state, provincial, territorial, local, non-U.S. and other net income tax, alternative or add-on minimum tax, franchise tax, gross income, adjusted gross income or gross receipts tax, employment related tax (including employee withholding or employer payroll tax) ad valorem, transfer, franchise, license, excise, severance, stamp, occupation, premium, personal property, real property, capital stock, profits, disability, registration, value added, estimated, customs duties, and sales or use tax, or other tax or like assessment in the nature of a tax (whether payable directly or by withholding), in each case that is imposed by a Governmental Authority; (ii) any interest, penalties, addition to tax or additional amounts relating to any items in clause (i) or this clause (ii), and (iii) any liability for any items described in clauses (i) and (ii) of this definition payable by reason of Contract, assumption, transferee or successor liability, operation of applicable Law, or Treasury Regulations Section 1.1502-6(a) (or any similar provision of Law or any predecessor or successor thereof) or otherwise.
“Tax Return” means any return, report, statement, refund, claim, declaration, information return, statement, estimate or other document filed or required to be filed with a Governmental Authority in respect of Taxes, including any schedule or attachment thereto and including any amendments thereof.
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“Technology” means, collectively, all Software, information, formulae, algorithms, procedures, methods, techniques, research and development, technical data, programs, subroutines, tools, materials, processes, apparatus, creations, and other similar materials, and all recordings, graphs, reports, analyses, and other writings, and other tangible embodiments of the foregoing, in any form whether or not specifically listed herein, and all related technology, that are used in, incorporated in, embodied in, displayed by or related to, or are used in connection with the foregoing.
“Terminating Company Breach” has the meaning specified in Section 11.01(b).
“Terminating SPAC Breach” has the meaning specified in Section 11.01(c).
“Termination Date” has the meaning specified in Section 11.01(b).
“Transaction Agreements” shall mean this Agreement, the Sponsor Support Agreement, the A&R Registration Rights Agreement, the Pre-Paid Forward Purchase Agreements, the PIPE Agreements, the Company Voting and Support Agreements, the SPAC Charter Upon Domestication, the SPAC Bylaws Upon Domestication and all of the agreements, documents, instruments and certificates entered into in connection herewith or therewith and any and all exhibits and schedules thereto.
“Transactions” means the transactions contemplated by this Agreement and the Transaction Agreements, including the Mergers, the Conversions and the PIPE Investment.
“Treasury Regulations” means the regulations promulgated under the Code.
“Triggering Event I” means the earliest of the following to occur during the Earnout Period: (a) the date on which the VWAP of one share of SPAC Common Stock is greater than or equal to $15.00 per share for twenty (20) trading days within any one-hundred eighty (180) consecutive trading day period or (b) a Change in Control of SPAC pursuant to which stockholders of SPAC Common Stock have the right to receive consideration implying a price per share (as determined in accordance with Section 3.06(d)) greater than or equal to $15.00 or, in the case of a Change in Control where the holders of SPAC Common Stock do not receive consideration, the price per share of SPAC Common Stock implied by such transaction (as determined in good faith by the board of directors of SPAC) is greater than or equal to $15.00.
“Triggering Event II” means the earliest of the following to occur during the Earnout Period: (a) the date on which the VWAP of one share of SPAC Common Stock is greater than or equal to $18.00 per share for twenty (20) trading days within any one-hundred eighty (180) consecutive trading day period or (b) a Change in Control of SPAC pursuant to which stockholders of SPAC Common Stock have the right to receive consideration implying a price per share (as determined in accordance with Section 3.06(d)) greater than or equal to $18.00 or, in the case of a Change in Control where the holders of SPAC Common Stock do not receive consideration, the price per share of SPAC Common Stock implied by such transaction (as determined in good faith by the board of directors of SPAC) is greater than or equal to $18.00.
“Triggering Event III” means the earliest of the following to occur during the Earnout Period: (a) the date on which the VWAP of one share of SPAC Common Stock is greater than or equal to $21.00 per share for twenty (20) trading days within any one-hundred eighty (180) consecutive trading day period or (b) a Change in Control of SPAC pursuant to which stockholders of SPAC Common Stock have the right to receive consideration implying a price per share greater than or equal to $21.00 (as determined in accordance with Section 3.06(d)) or, in the case of a Change in Control where the holders of SPAC Common Stock do not receive consideration, the price per share of SPAC Common Stock implied by such transaction (as determined in good faith by the board of directors of SPAC) is greater than or equal to $21.00.
“Triggering Events” means Triggering Event I, Triggering Event II and Triggering Event III, collectively.
“Trust Account” has the meaning specified in Section 6.07(a).
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“Trust Agreement” has the meaning specified in Section 6.07(a).
“Trustee” has the meaning specified in Section 6.07(a).
“Unaudited Financial Statements” has the meaning specified in Section 5.08(a).
“VWAP” for any security as of any trading day means the dollar volume-weighted average price for such security on the principal securities exchange or securities market on which such security is then traded during such trading day beginning at 9:30:01 a.m., New York time, and ending at 4:00:00 p.m., New York time, as reported by Bloomberg through its “HP” function (set to weighted average). If the foregoing does not apply, “VWAP” shall mean the dollar volume-weighted average price of such security in the over-the-counter market on the electronic bulletin board for such security during such trading day beginning at 9:30:01 a.m., New York time, and ending at 4:00:00 p.m., New York time, as reported by Bloomberg. If no dollar volume-weighted average price is reported for such security by Bloomberg for such hours, “VWAP” shall mean the average of the highest closing bid price and the lowest closing ask price of any of the market makers for such security as reported by OTC Markets Group Inc for such trading day. If the VWAP cannot be calculated for such security on such date(s) on any of the foregoing bases, the VWAP of such security on such date shall be the fair market value per share on such day as reasonably determined by the board of directors of SPAC.
“WARN Act” has the meaning specified in Section 5.14(c).
“Warrant Agreement” means the Warrant Agreement, dated as of April 22, 2025, as amended on December 31, 2025, by and between SPAC and Continental Stock Transfer & Trust Company, a New York corporation, as warrant agent.
“Working Capital Loan” means any loan made to SPAC by the Sponsor or any of the SPAC’s officers or directors, and evidenced by a promissory note, for the purpose of financing SPAC Transaction Expenses.
“Written Consent” has the meaning specified in Section 9.02(f).
“Written Consent Failure” has the meaning specified in Section 9.02(f).
Section 1.02. Construction.
(a) Unless the context of this Agreement otherwise requires, (i) words of any gender include each other gender, (ii) words using the singular or plural number also include the plural or singular number, respectively, (iii) the terms “hereof,” “herein,” “hereby,” “hereto” and derivative or similar words refer to this entire Agreement, and the term “date hereof” refers to the date of the execution of this Agreement, (iv) the terms “Article”, “Section”, “Schedule”, “Exhibit” and “Annex” refer to the specified Article, Section, Schedule, Exhibit or Annex of or to this Agreement unless otherwise specified, (v) the word “including” shall mean “including without limitation,” (vi) the word “or” shall be disjunctive but not exclusive, and (vii) the phrase “to the extent” means the degree to which a thing extends (rather than if).
(b) When used herein, “ordinary course of business” means an action taken, or omitted to be taken, in the ordinary and usual course of the Company’s and its Subsidiaries’ business, consistent with past practice.
(c) Unless the context of this Agreement otherwise requires, references to agreements and other documents shall be deemed to include all subsequent amendments and other modifications thereto.
(d) Unless the context of this Agreement otherwise requires, references to statutes shall include all regulations promulgated thereunder and references to statutes or regulations shall be construed as including all statutory and regulatory provisions consolidating, amending or replacing the statute or regulation.
(e) The language used in this Agreement shall be deemed to be the language chosen by the Parties to express their mutual intent and no rule of strict construction shall be applied against any Party.
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(f) Whenever this Agreement refers to a number of days, such number shall refer to calendar days unless Business Days are specified. If any action is to be taken or given on or by a particular calendar day, and such calendar day is not a Business Day, then such action may be deferred until the next Business Day.
(g) All accounting terms used herein and not expressly defined herein shall have the meanings given to them under GAAP.
(h) The phrases “provided to,” “furnished to,” “made available” and phrases of similar import when used herein, unless the context otherwise requires, means that a copy of the information or material referred to has been provided no later than 9:00 a.m. (New York Time) on the day immediately prior to the date of this Agreement to the Party to which such information or material is to be provided or furnished (i) in the virtual “data room” set up by the Company in connection with this Agreement or (ii) by delivery to such Party or its legal counsel via electronic mail or hard copy form.
Section 1.03. Knowledge. As used herein, the phrase “to the knowledge” shall mean the actual knowledge of, in the case of the Company, the individuals set forth on Schedule 1.03 of the Company Disclosure Letter and, in the case of the SPAC Parties, the individuals set forth on Schedule 1.03 of the SPAC Disclosure Letter.
Section 1.04. Equitable Adjustments. If, following the date of this Agreement, the outstanding Company Stock or shares of SPAC Common Stock shall have been changed into a different number of shares or a different class, by reason of any stock or share dividend, subdivision, reclassification, reorganization, recapitalization, split, combination or exchange of shares, or any similar event shall have occurred, or if there shall have been any breach by SPAC with respect to its covenant not to issue shares of SPAC Common Stock or rights to acquire SPAC Common Stock under Section 8.03(a), then any number, value (including dollar value) or amount contained herein which is based upon the number of shares of Company Stock or shares of SPAC Common Stock, as applicable, will be appropriately adjusted to provide to the holders of Company Stock or SPAC Stockholders, as applicable, the same economic effect as contemplated by this Agreement prior to such event; provided, however, that this Section 1.04 shall not be construed to permit SPAC, the Company or Merger Subs to take any action with respect to their respective securities that is prohibited by the terms and conditions of this Agreement.
ARTICLE 2
The Mergers
Section 2.01. The Mergers.
Section 2.02. First Effective Time; Second Effective Time.
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Table of Contents
Section 2.03. Effect of the Mergers.
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Filing: S-4 - Texas Ventures Acquisition III Corp (TVA)⚠️ Filing Content Truncated
Accession Number: 0001193125-26-418671