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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(MARK ONE)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarter ended March 31, 2026

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File number: 000-56597

PERSHING SQUARE SPARC HOLDINGS, LTD.

(Exact name of registrant as specified in charter)

     Delaware

     87-3427627

     (State or other jurisdiction of
incorporation or organization)

     I.R.S. Employer
Identification Number)

787 Eleventh Avenue, Ninth Floor

New York, NY 10019

(Address of principal executive offices)

(212) 813-3700

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
None	N/A	N/A

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes☒ No☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes☒ No☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an 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.


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 registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes☒ No☐

As of May 11, 2026, there were 422,533 shares of common stock, par value $0.0001, of Pershing Square SPARC Holdings, Ltd. issued and outstanding.

PERSHING SQUARE SPARC HOLDINGS, LTD.

QUARTERLY REPORT ON FORM 10-Q

FOR THE QUARTER ENDED MARCH 31, 2026

TABLE OF CONTENTS


	Page

Part I - Financial Information	1

Item 1. Financial Statements	1
Balance Sheets	1
Statements of Operations	2
Statements of Changes in Stockholders’ Equity/(Deficit)	3
Statements of Cash Flows	4
Notes to the Unaudited Financial Statements	5
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3. Quantitative and Qualitative Disclosures About Market Risk	22
Item 4. Controls and Procedures	22

Part II - OTHER INFORMATION	24

Item 1. Legal Proceedings	24
Item 1A. Risk Factors	24
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	24
Item 3. Defaults Upon Senior Securities	24
Item 4. Mine Safety Disclosures	24
Item 5. Other Information	24
Item 6. Exhibits	25

Part III - SIGNATURES	26

-i-

Part I—FINANCIAL INFORMATION

Item 1. Financial Statements

PERSHING SQUARE SPARC HOLDINGS, LTD.

Balance SheetS


	As of
	March 31, 2026 (Unaudited)			December 31, 2025 (Audited)
Assets
Current Assets:
Cash and cash equivalents	$	18,735,035		$	20,080,652
Prepaid expenses		41,217			14,700
Total Current Assets		18,776,252			20,095,352
Cash held in segregated account		5,001,000			5,001,000
Total Assets	$	23,777,252		$	25,096,352

Liabilities And Stockholders’ Equity/(Deficit)
Current Liabilities:
Accrued expenses	$	619,485		$	269,096
Directors compensation payable		225,000			225,000
Total Current Liabilities		844,485			494,096

Advisor Warrants liability		2,000,000			3,000,000
Sponsor Warrants liability		41,272,825			41,279,681
Total Liabilities		44,117,310			44,773,777

Stockholders’ Equity/(Deficit)
Common Stock, $0.0001 par value; 3,000,000,000 shares authorized and 422,533 issued and outstanding at March 31, 2026 and December 31, 2025		42			42
Additional paid-in capital		4,225,288			4,225,288
Accumulated deficit		(24,565,388	)		(23,902,755	)
Total Stockholders’ Equity/(Deficit)		(20,340,058	)		(19,677,425	)
Total Liabilities And Stockholders’ Equity/(Deficit)	$	23,777,252		$	25,096,352

The accompanying notes are an integral part of the unaudited financial statements.

-1-

PERSHING SQUARE SPARC HOLDINGS, LTD.

StatementS of Operations


	For the three months ended
	March 31, 2026 (Unaudited)			March 31, 2025 (Unaudited)
Legal fees	$	(270,418	)	$	(53,454	)
Compensation expense		(225,000	)		(225,000	)
Accounting and tax expense		(94,118	)		(89,485	)
Franchise tax expense		(50,012	)		(50,000	)
Other expenses		(13,795	)		(10,199	)
Printing fees		(9,097	)		(9,255	)
Research expense		(7,049	)		(5,369	)
Income/(Loss) from operations		(669,489	)		(442,762	)

Change in fair value of Sponsor Warrants liability		6,856			30,595
Other income/(loss)		6,856			30,595

Net loss	$	(662,633	)	$	(412,167	)
Weighted average shares outstanding, basic and diluted		422,533			422,533
Basic and diluted net loss per share	$	(1.57	)	$	(0.98	)

The accompanying notes are an integral part of the unaudited financial statements.

-2-

PERSHING SQUARE SPARC HOLDINGS, LTD.

STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY/(DEFICIT)

FOR THE THREE MONTHS ENDED MARCH 31, 2026 AND MARCH 31, 2025


	Common Stock
	Shares		Amount		Additional Paid-In Capital		Accumulated Deficit			Total Stockholders’ Equity/(Deficit)
Balance – December 31, 2024 (Audited)		422,533	$	42	$	4,225,288	$	(19,482,123	)	$	(15,256,793	)
Net loss		—		—		—		(412,167	)		(412,167	)
Balance – March 31, 2025 (Unaudited)		422,533	$	42	$	4,225,288	$	(19,894,290	)	$	(15,668,960	)


	Common Stock
	Shares		Amount		Additional Paid-In Capital		Accumulated Deficit			Total Stockholders’ Equity/(Deficit)
Balance – December 31, 2025 (Audited)		422,533	$	42	$	4,225,288	$	(23,902,755	)	$	(19,677,425	)
Net loss		—		—		—		(662,633	)		(662,633	)
Balance – March 31, 2026 (Unaudited)		422,533	$	42	$	4,225,288	$	(24,565,388	)	$	(20,340,058	)

The accompanying notes are an integral part of the unaudited financial statements.

-3-

PERSHING SQUARE SPARC HOLDINGS, LTD.

StatementS of Cash Flows


	For the three months ended
	March 31, 2026 (Unaudited)			March 31, 2025 (Unaudited)
Cash flows from operating activities:
Net loss	$	(662,633	)	$	(412,167	)
Adjustments to reconcile net loss to net cash used in operating activities:
Change in fair value of Sponsor Warrants liability		(6,856	)		(30,595	)
(Increase)/decrease in operating assets:
Prepaid expenses		(26,517	)		(26,871	)
Increase/(decrease) in operating liabilities:
Accrued expenses		350,389			(22,517	)
Advisor Warrants liability		(1,000,000	)		—
Net cash used in operating activities		(1,345,617	)		(492,150	)

Net change in cash and cash equivalents and cash held in segregated account		(1,345,617	)		(492,150	)
Cash and cash equivalents and cash held in segregated account —beginning of period		25,081,652			28,071,496
Cash and cash equivalents and cash held in segregated account —end of period	$	23,736,035		$	27,579,346

The accompanying notes are an integral part of the unaudited financial statements.

-4-

PERSHING SQUARE SPARC HOLDINGS, LTD.

NOTES TO THE UNAUDITED FINANCIAL STATEMENTS

MARCH 31, 2026

Note 1—Description of Organization and Business Operations

Organization and General

Pershing Square SPARC Holdings, Ltd. (the “Company”) was incorporated on November 3, 2021 in the State of Delaware and formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other business combination transaction with one or more businesses (the “Business Combination”). The Company is not limited to a particular industry or sector for purposes of consummating a Business Combination. The Company is an “emerging growth company” (as defined in Note 2) and, as such, the Company is subject to all of the risks associated with emerging growth companies.

The Company’s registration statement (the “Prospectus”) for the distribution of up to 61,111,111 subscription warrants (the “SPARs”), each exercisable for two Public Shares (defined below) at a minimum exercise price of $10.00 per share, was declared effective by the Securities and Exchange Commission (“SEC”) on September 29, 2023 (the “Registration”) and the distribution was effective as of September 30, 2023. As of September 30, 2023, the Company recorded the full amount of SPARs, as issued and owned, with Continental Stock Transfer & Trust, as the SPAR rights agent (the “Rights Agent”) for the benefit of the Depository Trust Company (“DTC”) participants and registered owners of PSTH (defined below). The Rights Agent verified the SPARs position at each DTC participant or registered owner, and the SPAR register currently presents 60,971,299 SPARs as issued and outstanding as of March 31, 2026. The Company expects that the number of SPARs issued may vary from period to period by amounts that are not expected to be material, particularly in respect of SPARs voluntarily abandoned and forfeited in connection with the business liquidation of holders from time to time.

The common shares of the surviving entity of the Business Combination, which, depending on the form the Business Combination takes, may be the Company or an entity other than the Company (the “Surviving Corporation”), are referred to as the “Public Shares”. Since the Company’s inception, all activity relates to the Company’s formation, the Registration and the search for a Business Combination from and after effectiveness of the Registration. The Company may generate non-operating income in the form of interest from proceeds obtained in connection with the private placements of the Sponsor Shares and the Sponsor Warrants (defined in Note 4). The Company has selected December 31st as its fiscal year-end.

The Company’s sponsor is Pershing Square SPARC Sponsor, LLC (“Sponsor”), a Delaware limited liability company organized on November 4, 2021. The Sponsor is an affiliate of Pershing Square Capital Management, L.P. (“PSCM”), a registered investment advisor under the Investment Advisers Act of 1940, as amended. The Sponsor is wholly owned by Pershing Square Holdings, Ltd., a Guernsey company, Pershing Square, L.P., a Delaware limited partnership, and Pershing Square International, Ltd., a Cayman Islands exempted company, each of which is an investment fund managed by PSCM (collectively the “Pershing Square Funds”). The Sponsor was also an affiliate of Pershing Square Tontine Holdings, Ltd. (“PSTH”), a Delaware corporation, which was a special purpose acquisition company (“SPAC”) that did not enter into an initial business combination within the prescribed time period and redeemed all of its Class A common stock and subsequently dissolved.

Board of Directors, Committees of the Board & Advisory Board

The Company’s board of directors (the “Board”) is comprised of Mr. William A. Ackman, Dr. Jennifer Blouin, Ms. Kathryn Judge and Ms. Linda Rottenberg. All directors other than Mr. Ackman are independent. Mr. Ackman is the Chairman of the Board and Chief Executive Officer. The Board established an Audit Committee, a Compensation Committee, and a Nominating and Governance Committee. The committees are comprised solely of the independent directors of the Company. The Board also established an Advisory Board which is comprised of Mr. Michael Ovitz and Ms. Jacqueline Dawn Reses.

-5-

Financing

Each SPAR will be exercisable for two Public Shares, and SPARs must be exercised in whole. Upon the Company entering into a definitive agreement with respect to a Business Combination (a “Definitive Agreement”), the Company will announce the final exercise price (the “Final Exercise Price”) of the SPARs. Following entry into the Definitive Agreement, the Company will file a registration statement (the “Business Combination Registration Statement”) that will include information regarding the proposed Business Combination, and the Company will seek to satisfy substantially all express closing conditions contained in the Definitive Agreement, other than those that can only be satisfied as of a later date (the “Disclosure Period Closing Conditions”). Following the satisfaction or waiver of the Disclosure Period Closing Conditions and the Business Combination Registration Statement becoming effective and being mailed to the holders of SPARs, holders will have 20 business days (the “SPAR Holder Election Period”) to submit an irrevocable notice of their election to purchase Public Shares (an “Election”), and to submit their exercise payment to be held in a custodial account controlled by an independent custodian (the “Custodial Account”). Following the SPAR Holder Election Period, the Company will have up to 10 business days (the “Closing Period”) to assess whether all remaining closing conditions are satisfied (the “Final Closing Conditions”) and whether to proceed with the proposed Business Combination, abandon the Business Combination, or in certain limited circumstances, extend the Closing Period to a date that is no later than 10 months from the start of the SPAR Holder Election Period. If the Final Closing Conditions are satisfied, the Business Combination will be consummated (the “Closing”) and the SPARs will automatically be exercised concurrently therewith. In certain circumstances, Elections may be revoked, and the periods may be postponed, extended or terminated, as described in the Prospectus.

The Company will finance the Business Combination with proceeds from the exercise of the SPARs, a minimum of $1,219,425,980 if all SPARs issued and outstanding as of March 31, 2026 are exercised, and from the proceeds of the Forward Purchase Shares (defined in Note 4). The proceeds from private placement sales to the Sponsor of 422,533 shares of the Company’s common stock at $10.00 per share (the “Common Stock”), for an aggregate purchase price of $4,225,330 (the “Sponsor Shares”) and the Sponsor Warrants, for an aggregate purchase price of $35,892,480, are being used to fund operating expenses, with any remaining amount to be used in connection with the Business Combination. The Sponsor Shares will be identical to the Public Shares, except that they will be subject to certain transfer restrictions and have certain registration rights.

Segregated Account

Of the total proceeds from the sale of the Sponsor Shares and Sponsor Warrants, $5,001,000 was deposited in a segregated account (the “Segregated Account”) to be held as cash and will not be released until the earlier of the Closing or the Company’s liquidation. The remainder of the proceeds were placed in the Company’s operating account and held as unrestricted cash to pay for ongoing expenses (such as business, legal, accounting, due diligence costs related to prospective acquisitions and continuing general and administrative expenses).

Custodial Account

The funds received in connection with the submission of Elections will be held in the Custodial Account and will be held in cash or, at the election of the Company, invested solely in U.S. Treasury obligations (which are United States “government securities” within the meaning of Section 2 (a) (16) of the Investment Company Act) having a maturity of one hundred eighty (180) days or less or in money market funds that meet certain conditions under Rule 2a-7 promulgated under the Investment Company Act of 1940 (the “Investment Company Act”), as amended. The Company expects to make and announce the decision to hold the funds in cash, or such U.S. Treasury obligations or money market funds, in the Business Combination Registration Statement, based on market, legal and other factors at such time, including (i) the relative interest rates for cash accounts and such other instruments, (ii) then-existing market practice and legal and regulatory considerations with respect to custodial accounts for SPACs and other similar vehicles (including whether holding the funds in such U.S. Treasury obligations or money market funds would require the Company to register as an investment company under the Investment Company Act), (iii) the willingness of banks and other depositary institutions to hold large sums in cash in light of their regulatory and business requirements, and (iv) the Company’s assessment of the credit profile of any such bank or other depositary institution willing to hold a cash account.

-6-

The proceeds from the submission of SPAR exercise payments will remain in the Custodial Account (and will not be released) until the consummation of the Business Combination for use in connection therewith or the liquidation of the Company due to the failure to consummate a Business Combination during the Closing Period (which is extendable by 10 months from the start of the SPAR Holder Election Period) (an “Early Termination”) in which event the funds held in the Custodial Account are to be returned, inclusive of interest (if any), to electing holders of the SPARs in proportion to the aggregate exercise price paid by each such holder. In no event will funds be held in the Custodial Account for longer than 10 months from the start of the SPAR Holder Election Period, which is the maximum amount of time funds may be held in the Custodial Account, and at which time the Company will be required to liquidate if the Closing has not yet occurred.

In connection with the consummation of the Business Combination, all amounts held in the Custodial Account will be released to the Company. The Company will use these funds to pay all or a portion of the consideration payable to the target or owners of the target of the Business Combination and to pay other expenses associated with the Business Combination. If the Business Combination is paid for using equity or debt instruments, or not all of the funds released from the Custodial Account are used for payment of the consideration in connection with the Business Combination, the Company may apply the balance of the cash released to the Company from the Custodial Account for general corporate purposes, including maintenance or expansion of operations of post-combination businesses, the payment of principal or interest due on indebtedness incurred in completing the Business Combination, to fund the purchase of other companies or make other investments or for working capital. The proceeds deposited in the Custodial Account could become subject to the claims of the Company’s creditors, if any, which could have priority over the claims of holders of the Public Shares.

Business Combination

The Company’s management has broad discretion with respect to the specific application of the net proceeds of the sale of the Sponsor Shares and Sponsor Warrants and from the exercise under the Forward Purchase Agreements (defined in Note 4), although substantially all proceeds are intended to be generally applied toward operating expenses in connection with identifying and consummating a Business Combination. The Company will enter into a Business Combination with a target business having a value of at least 80% of the aggregate proceeds from the exercise of all SPARs at the Final Exercise Price, and intends to enter into a Business Combination with a target business of greater value than the proceeds available from the exercise of the SPARs. The Company may not enter into a Business Combination with another blank check or similar company. Subject to these restrictions, management will have virtually unrestricted flexibility in identifying and selecting one or more prospective target businesses. The Business Combination may be structured in a variety of ways, including, but not limited to, a merger, capital stock exchange, asset acquisition, stock purchase, or reorganization and will be structured so that the Company is not required to register as an investment company under the Investment Company Act. Furthermore, there is no assurance that the Company will be able to successfully effect a Business Combination.

The Company will comply with applicable requirements under Delaware law and, if and as applicable, the rules of the OTCQX marketplace of the OTC Markets Group Inc. The Company will obtain any required stockholder approvals following the effectiveness of the Business Combination Registration Statement, at which time the Sponsor, as owner of the Sponsor Shares, will be the Company’s sole stockholder. Accordingly, the holders of SPARs will not have the opportunity to vote in favor of or against the proposed Business Combination or on any other matter submitted to a vote of stockholders. If the holders of the SPARs disapprove of the proposed transaction, their recourse will be limited to selling or choosing not to exercise their SPARs.

The SPARs will expire upon the earlier of (i) an Early Termination, (ii) Closing and (iii) September 30, 2033. If the Company is unable to complete its Business Combination and the SPARs expire, the Company, subject to the approval of the stockholders and the Company’s Board, will dissolve and liquidate, subject in each case to the Company’s obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. Any remaining assets of the Company will be distributed to the holders of the Sponsor Shares, which are expected to consist solely of the Sponsor in its capacity as the holder of the Sponsor Shares, subject to applicable law.

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Prior to the Company’s dissolution, if such event occurs, funds held in the Custodial Account will be returned to all electing SPAR holders who have submitted payment on a pro-rata basis. All costs and expenses associated with implementing the Company’s plan of dissolution, as well as payments to any creditors, will be funded from the Company’s remaining assets, which may not be sufficient for such purpose. Holders of SPARs will have no rights to the assets nor any obligations in respect of the liabilities of the Company in the event of dissolution or bankruptcy.

In the event of a liquidation, dissolution or winding up of the Company after a Business Combination, the stockholders are entitled to share ratably in all assets remaining available for distribution to them after payment of liabilities and after provision is made for each class of shares having preference over the Company’s Common Stock, if any. Stockholders have no preemptive or other rights. There are no sinking fund provisions applicable to the Common Stock or the Public Shares.

Note 2—Summary of Significant Accounting Policies

Basis of Presentation

The accompanying financial statements are presented in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the accounting and disclosure rules and regulations of the SEC. The financial information provided is unaudited. In the opinion of management, the accompanying financial statements reflect all adjustments, including normal recurring items, considered necessary for a fair presentation of the Company’s financial position, operating results and cash flows for the periods presented. Operating results for interim periods are not necessarily indicative of the results that may be expected for a full year period or for any future periods and should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 as filed with the SEC on March 23, 2026, which contains the audited financial statements and notes thereto.

In connection with the Company’s assessment of going concern considerations in accordance with ASU 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” management has determined that the Company has sufficient liquidity to meet its current obligations and adequate resources to continue in operational existence for a minimum of one year from the date of issuance of these financial statements. Therefore, the Company has adopted the going concern basis in preparing the financial statements.

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 (the “JOBS Act”). As such, the Company is eligible to take advantage of certain exemptions from various reporting requirements that are applicable to public companies that are not emerging growth companies.

Section 107 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 Securities Exchange Act of 1934, as amended (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 not elected to opt out of such extended transition period. This may make comparison of the Company’s financial statements with those of another public company difficult or impossible if such other public company is (i) not an emerging growth company or (ii) is an emerging growth company that has opted out of using the extended transition period, due to the potential differences in accounting standards used.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in financial institutions, which at times may exceed the Federal Depository Insurance Coverage of $250,000, and cash equivalent accounts in financial institutions. The Company has not experienced losses on these accounts and management believes the Company is not exposed to significant risks on such accounts.

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Fair Value of Financial Instruments

The fair value of the Company’s assets and liabilities, which qualify as financial instruments under the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 820, Fair Value Measurement (“ASC 820”), approximates the carrying amounts represented in the accompanying balance sheets, primarily due to their short-term nature.

When the fair value of financial instruments recorded in the balance sheets cannot be derived from active markets, their fair value is determined by the Company’s management using prices obtained from an independent third-party valuation firm. The independent third-party valuation firm utilizes proprietary models to determine fair value. Refer to Note 6 for the significant unobservable inputs used in the valuation of Level 3 investments.

Use of Estimates

The preparation of the 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 as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods, as well as disclosure of any contingent assets and liabilities as of the date of the financial statements.

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 from those estimates.

Cash and Cash Equivalents

The Company considers all short-term investments with a maturity of three months or less at the time of purchase to be cash equivalents. As of March 31, 2026, the Company’s cash and cash equivalents balance was $23,736,035 (December 31, 2025: $25,081,652) comprised of $18,735,035 (December 31, 2025: $20,080,652) of cash in the Company’s operating account and $5,001,000 (December 31, 2025: $5,001,000) of cash in the Segregated Account.

Advisor Warrants Liability

The Advisor Warrants (defined in Note 4) were issued at no cost to the Company’s advisory board members. Accordingly, the Company accounts for the Advisor Warrants under ASC 718—Stock compensation (“ASC 718”) as the instruments were issued in connection with services provided towards the Company’s operations and potential Business Combination by the advisory board. The Advisor Warrants have a settlement feature whereby the Company or the Sponsor has the option to purchase the warrant from the holder upon the termination of their services for $1,000,000. See Note 4 for further details. The settlement feature results in liability classification at the Advisor Warrants repurchase price on grant date under ASC 718, stock-based compensation associated with equity-classified awards. Upon the consummation of the Business Combination (or vesting date), the outstanding liability will be measured at fair value.

Sponsor Warrants Liability

The Company accounts for the Sponsor Warrants (defined in Note 4) pursuant to applicable guidance in ASC 480—Distinguishing liabilities from equity (“ASC 480”), and ASC 815-40—Contracts in an entity’s own equity (“ASC 815-40”), under which the Sponsor Warrants do not meet the criteria for equity treatment because the number of underlying Public Shares for which the Sponsor Warrants are exercisable is dependent upon the number of Public Shares outstanding immediately following consummation of the Business Combination along with the amount of funds raised in connection therewith. Accordingly, the Sponsor Warrants’ fair value at initial measurement, was recorded as a derivative liability, and subsequent changes in fair value will be reflected on the statement of operations at each reporting period. The fair value of the Sponsor Warrants is measured using a Black-Scholes option pricing model, and the Sponsor Warrants’ classification will be re-assessed at the end of each reporting period.

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SPARs and Forward Purchase Agreement Liabilities

The Company accounts for the SPARs and the Forward Purchase Agreements (defined in Note 4) in accordance with the guidance contained in ASC 480 and ASC 815-40. Under this guidance, the Company has determined that the SPARs and the Forward Purchase Agreements do not meet the criteria for equity treatment and will be recorded as derivative liabilities. Upon issuance, the Company recorded the initial fair value of the SPARs and Forward Purchase Agreements as expenses because such instruments were distributed to parties other than shareholders and, accordingly, may not be recognized as dividends under ASC 505—Equity. These liabilities will subsequently be measured at fair value with changes in fair value reflected on the statement of operations at each reporting period. The classification of these instruments, including whether such instruments should be recorded as liabilities or as equity, will be re-assessed at the end of each reporting period.

Sponsor Shares

The Company accounts for the Sponsor Shares under equity treatment applicable to outstanding shares upon issuance under ASC 480 and ASC 815-40.

Net Income/(Loss) per Share

Net income/(loss) per share is computed by dividing net income/(loss) by the weighted average number of shares of Common Stock outstanding during the period, plus, to the extent dilutive, the incremental number of shares of Common Stock to settle the SPARs, the Forward Purchase Agreements, the Sponsor Warrants and the Advisor Warrants, as calculated using the treasury stock method.

As of March 31, 2026, the SPARs and Forward Purchase Agreements are anti-dilutive to the Company as the underlying securities from their exercise are the Public Shares of the Surviving Corporation. Additionally, the exercise of the Advisor Warrants and the Sponsor Warrants is contingent upon the occurrence of future events that have not been met as of March 31, 2026, and therefore the Company has not considered the effect of the Advisor Warrants and Sponsor Warrants on net loss per share for the periods presented. As a result, diluted net loss per share is the same as basic income/(loss) per share for the respective reporting periods.

Income Taxes

The Company follows the asset and liability method of accounting for income taxes under ASC 740, Income Taxes (“ASC 740”). Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the carrying value of existing assets and liabilities on the balance sheet and their respective tax bases and tax losses carried forward. 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 from 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 provides guidance for the 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 files U.S. federal tax returns and the statute of limitations on the Company’s U.S. federal tax returns generally remains open for a period of three years after they are filed. Such open tax years remain subject to examination and adjustment by tax authorities. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of March 31, 2026 and December 31, 2025. As of March 31, 2026, the Company recorded a full valuation allowance against the deferred tax assets.

For the three months ended March 31, 2026, the effective tax rate was 0%. The effective tax rate differs from the statutory rate due to non-deductible fair value adjustments of warrants and the change in valuation allowance for start-up costs and net operating losses.

Recent Accounting Pronouncements

Management does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material impact on the Company’s financial statements.

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Note 3—Registration

SPARs and Public Shares

Pursuant to the Prospectus, the Company distributed the SPARs as discussed in Note 1, at no cost, to the holders of record of PSTH’s Class A common stock and distributable redeemable warrants. The SPARs were issued pursuant to a SPAR Rights Agreement between the Company and the SPAR Rights Agent. The Company intends that the SPARs will be quoted on the OTCQX marketplace of the OTC Markets Group Inc. or other quotation service beginning at the SPAR Holder Election Period. The Public Shares will be issued in connection with the Closing. Depending on the form that the Business Combination takes, the Public Shares may be issued as shares of the Surviving Corporation. No fractional SPARs or Public Shares have been or will be issued, a SPAR cannot be exercised in part, and only whole SPARs and Public Shares will trade. The Company intends to issue up to 121,942,598 Public Shares in respect of SPARs issued and outstanding as of March 31, 2026 that will generate aggregate proceeds of a minimum of $1,219,425,980 if all such SPARs are exercised.

Proposed SPAR Trading Rule by NYSE

During 2024, the New York Stock Exchange (“NYSE”) had been developing a rule change to the NYSE Listed Company Manual, Section 703.12 Listing Standards for Warrants and Rights. The effect of this rule change, had it been implemented, would have permitted SPAR trading during the SPAR Holder Election Period to occur on the NYSE (rather than over-the-counter or “pink sheet” markets). On August 19, 2024, the SEC instituted proceedings to determine whether to approve or disapprove the proposed rule change. On December 17, 2024, the NYSE withdrew its proposed rule change after discussions with the SEC. On February 4, 2026, the NYSE resubmitted the proposed rule change to the SEC. The Company is monitoring the developments closely, but no assurance can be given that the proposed rule change will be approved by the SEC and successfully implemented by the NYSE. If the proposed rule change is not implemented, the Company anticipates that SPARs during the SPAR Holder Election Period would be quoted on the OTCQX marketplace of the OTC Markets Group Inc. or other quotation service.

Note 4—Related Party Transactions

Sponsor Shares

Since the Company’s inception through March 31, 2026, the Sponsor acquired 422,533 Sponsor Shares, at an aggregate price of $4,225,330, or $10.00 per Sponsor Share. In the event that the Final Exercise Price is higher than the minimum exercise price of $10.00, the Company will carry out a reverse stock split of the Sponsor Shares such that the effective per-share purchase price of the Sponsor Shares is equal to the Final Exercise Price.

The Sponsor Shares are subject to transfer restrictions pursuant to the subscription agreement between the Company and the Sponsor, which provides that such shares are not transferable or salable unless (a) a registration statement on the appropriate form under the Securities Act and applicable state securities laws with respect to the Sponsor Shares proposed to be transferred is then effective or (b) the Company has received an opinion from counsel reasonably satisfactory to the Company, that such registration is not required because such transaction is exempt from registration under the Securities Act and the rules promulgated by the SEC thereunder and with all applicable securities laws.

Forward Purchase Agreements

On September 29, 2023, the Pershing Square Funds (the “Committed Forward Purchasers”) and PS SPARC I Master, L.P., a Cayman Islands limited partnership managed by PSCM (the “Additional Forward Purchaser” and together with the Committed Forward Purchasers, the “Forward Purchasers”) entered into the forward purchase agreements (the “Forward Purchase Agreements”), pursuant to which an aggregate amount of $3.5 billion of Public Shares may be purchased. The amount that the Committed Forward Purchasers will be obligated to buy will equal $250 million at a Final Exercise Price of $10.00, and will be a proportionately greater amount at a higher Final Exercise Price, up to $1.0 billion at a Final Exercise Price of $40.00 per share or greater (the “Committed Forward Purchase Shares”). The Additional Forward Purchaser will have the right, but not the obligation, to purchase (the “Additional Forward Purchase”), at the Final Exercise Price, the remainder of the $3.5 billion of Forward Purchase Shares (the “Additional Forward Purchase Shares” and together with the Committed Forward Purchase Shares, the “Forward Purchase Shares”) that is not allocated to the Committed Forward Purchasers (such amount, the “Aggregate Additional Forward Purchase Amount”).

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The Additional Forward Purchaser may exercise the Additional Forward Purchase, at its election, in one or two tranches (each, the “First Tranche Additional Forward Purchase” and the “Second Tranche Additional Forward Purchase”, respectively), each of which would be effectuated, at the Final Exercise Price, at the time of the consummation of the Business Combination; provided that in no event will the number of Public Shares purchased pursuant to the First Tranche Additional Forward Purchase and the Second Tranche Additional Forward Purchase collectively exceed the quotient of (i) the Aggregate Additional Forward Purchase Amount divided by (ii) the Final Exercise Price (the “Maximum Additional Forward Purchase”). The Additional Forward Purchaser will have the right, but not the obligation, to commit to purchase the First Tranche Additional Forward Purchase, in an amount up to the Maximum Additional Forward Purchase, by written notice to the Company no later than five business days prior to the execution of the Definitive Agreement. In the event that (i) the First Tranche Additional Forward Purchase is less than the Maximum Additional Forward Purchase and (ii) all SPARs issued and outstanding immediately prior to the commencement of the SPAR Holder Election Period are not elected to be exercised as of the end of the SPAR Holder Election Period, then the Company shall promptly notify the Additional Forward Purchaser of the number of such issued and outstanding SPARs that were not elected to be exercised (the “Unexercised SPARs”). The Additional Forward Purchaser will have the right, but not the obligation, to commit to purchase the Second Tranche Additional Forward Purchase no later than five business days after such notice, the Public Shares equal to the product of (i) two and (ii) the number of Unexercised SPARs at the Final Exercise Price.

The Committed Forward Purchasers’ obligation to purchase the Committed Forward Purchase Shares may be allocated among the Committed Forward Purchasers from time to time, but may not be transferred to any third parties. The Additional Forward Purchaser’s right to purchase the Additional Forward Purchase Shares may be transferred, in whole or in part, to any entity that is managed by PSCM (“Affiliate Transferee”), but not to third parties.

The Forward Purchase Shares will be subject to transfer restrictions pursuant to lock-up provisions that are set forth in the Forward Purchase Agreements. These lock-up provisions will provide that such shares are not transferable or salable until the earlier of (i) 180 days after the completion of the Business Combination or (ii) subsequent to the Business Combination, the date on which the Company completes a liquidation, merger, capital stock exchange, reorganization or other similar transaction that results in all of the Company’s public stockholders having the right to exchange their shares of common stock for cash, securities or other property, except in the case of the Forward Purchasers and their permitted transferees, (a) to any Affiliate Transferee or (b) in the event of the Company’s liquidation prior to the completion of the Business Combination. However, in the case of each of clauses (a) and (b), these permitted transferees must enter into a written agreement agreeing to be bound by these transfer restrictions, and the other restrictions contained in the applicable purchase agreement and by the same agreements entered into by the purchasers of the Forward Purchase Shares with respect to such securities.

Sponsor Warrants

On July 28, 2023, the Company sold warrants to the Sponsor (the “Sponsor Warrants”) for an aggregate price of $35,892,480 in a private placement, of which $5,001,000 was deposited into the Segregated Account. The transaction price of the Sponsor Warrants was determined by the Company, in consultation with a third-party, nationally recognized valuation firm, based on its fair value as of the previous month-end. The Sponsor Warrants are exercisable, in the aggregate, for up to 4.95% of the Public Shares that are outstanding as of the time immediately following the consummation of the Business Combination, on a fully diluted basis (including without limitation, Public Shares issued upon exercise of the SPARs, Public Shares issued pursuant to the Forward Purchase Agreements, Public Shares issued to the target business or its shareholders and Public Shares issuable upon the exercise of Sponsor and Advisor Warrants or the conversion or exercise of then-outstanding securities of the Surviving Corporation, whether or not convertible or exercisable at such time).

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The Company refers to the number of Public Shares into which the Sponsor Warrants are exercisable as the “Reference Shares.” The actual percentage of the Public Shares on a fully diluted basis into which the Sponsor Warrants are exercisable will depend on the amount of funds raised by the exercise of SPARs at the closing of the Business Combination and the amount of the Additional Forward Purchase, if any, made by the Additional Forward Purchaser, and will be calculated by multiplying 4.95% by a fraction (the “Proration Fraction”), (i) the numerator of which is the sum of (A) the amount of funds raised by the exercise of SPARs at the closing of the Business Combination and (B) the amount of the Additional Forward Purchase, if any, funded by the Additional Forward Purchaser at the closing of the Business Combination (including, for the avoidance of doubt, pursuant to the Second Tranche Additional Forward Purchase) and (ii) the denominator of which is the amount of funds that would have been raised at the Final Exercise Price if all SPARs issued and outstanding immediately prior to the start of the SPAR Holder Election Period had been exercised at the closing of the Business Combination, excluding for the avoidance of doubt the amount of the Additional Forward Purchase (i.e., at the Minimum Exercise Price, and assuming all 60,971,299 SPARs as of March 31, 2026 are issued and outstanding immediately prior to the start of the SPAR Holder Election Period, the denominator will be $1,219,425,980).

Because the Additional Forward Purchaser may exercise the Second Tranche Additional Forward Purchase at its election after the SPAR Holder Election Period as described above, the Additional Forward Purchaser (which, like the Sponsor, is an affiliate of PSCM) has the ability to prevent the Proration Fraction from being reduced to less than 1.0. In no event, however, will the Proration Fraction exceed 1.0; accordingly, under no circumstance will the Sponsor Warrants be exercisable, in the aggregate, for in excess of 4.95% of the Public Shares that are outstanding as of the time immediately following the consummation of the Business Combination, on a fully diluted basis (the “Proration”).

The Sponsor Warrants are exercisable at any time after the three-year anniversary, and on or prior to the 10-year anniversary, of the Business Combination and have an exercise price equal to 120% of the Final Exercise Price (the “Reference Price”). The Sponsor Warrants may be exercised on a cashless basis, with the number of Public Shares to be issued upon exercise calculated as the number of Reference Shares, multiplied by (x) the “fair market value” of a Public Share in excess of the Reference Price, divided by (y) the fair market value of a Public Share. As used above, “fair market value” refers to the volume-weighted average trading price of a Public Share over the 10 consecutive trading days ending on the third trading day prior to a notice of exercise being sent.

The Sponsor Warrants and the Public Shares issuable upon exercise of the Sponsor Warrants will generally not be saleable or transferable until three years after the consummation of the Business Combination (except to certain permitted transferees) and are subject to certain adjustments and registration rights. The Sponsor Warrants will expire on the date that is 10 years from the consummation of the Business Combination. The Sponsor Warrants may be exercised in whole or in part and will not be subject to redemption.

Advisor Warrants

On September 29, 2023, the Company issued warrants at no cost to the Company’s advisory board members (the “Advisor Warrants”). The Advisor Warrants are identical to the Sponsor Warrants, including with respect to the Proration, transfer restrictions and registration rights, except that the Advisor Warrants (i) will be exercisable, in the aggregate, for up to approximately 0.124% of the Public Shares that are outstanding as of the time immediately following the consummation of the Business Combination, on a fully diluted basis and (ii) will expressly provide that if the percentage of Public Shares into which the Sponsor Warrants are exercisable is reduced for any reason, the percentage of Public Shares into which the Advisor Warrants are exercisable will be reduced proportionally.

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In addition, in the event an advisory board member resigns for any reason prior to the Business Combination and at a time when the Company is not subject to a letter of intent (or a Definitive Agreement) with respect to its Business Combination, the Company or the Sponsor will be entitled, at its election, to repurchase in full such advisory board member’s Advisor Warrants. The repurchase price in each case will be $1,000,000 with respect to each advisory board member. The repurchase right may be assigned or transferred to one of the Company’s affiliates and must be exercised, if at all, by the date that is the later of (i) the two-year anniversary of the date on which the SPARs were first distributed pursuant to the Prospectus and (ii) 60 days after the effective date of such advisory board member’s resignation. In the event the Company (or an affiliate) does not exercise the repurchase right by such time, the resigning advisory board member will retain the Advisor Warrants. If the Company exercises its repurchase right, upon payment of the repurchase price, the Advisor Warrants held by the resigning advisory board member will be cancelled from the warrant registry and will no longer be outstanding. If the Company assigns or transfers that repurchase right to an affiliate, upon payment of the repurchase price, such assignee or transferee will become the registered holder on the warrant registry.

The repurchase price of the Advisor Warrants was established by the Sponsor in its discretion and was not intended to, and may not, represent the fair market value of the Advisor Warrants as of the time of issuance or any time of potential repurchase. The repurchase price and other terms of the Advisor Warrants were established in order to attract what the Company believes are highly experienced and capable advisory board members, and were based on the significant time commitment expected of an advisory board member, including with respect to assisting the Company in identifying potential Business Combination candidates, the novel nature of the Company in the public market and the risks and responsibilities attendant to untested public vehicles, the potential 10-year term of the Company, the skill, expertise and business contacts of the advisory board members, and the value of the advisory board members’ respective time in light of their experience and other professional responsibilities. The repurchase price was also established at a price the Company believes will likely be a substantial discount to the fair value of the Advisor Warrants immediately after the Business Combination, which the Company believes incentivizes the advisory board members to remain on the board over time. In the event an advisory board member elects to resign during the time periods described above, the Company currently anticipates that it or the Sponsor will likely exercise its repurchase right (assuming the Company or the Sponsor, as applicable, believed that the repurchase price was less than the then fair value of the Advisor Warrants as of such time), and contemplates that any such repurchase would reasonably compensate such an advisory board member for their service on the board. The repurchase was structured as the Company’s repurchase right (and not the Company’s obligation) to permit the Company to decide, at the time of any advisory board member resignation, whether or not the exercise of the repurchase right is advantageous to the Company in light of market and other conditions then applicable to the Company.

As discussed in Note 2, the Advisor Warrants have a settlement feature that results in liability classification as the Advisor Warrants repurchase price on the grant date under ASC 718 and upon the consummation of the Business Combination (or vesting date) will be measured at fair value. The Advisor Warrants were granted to the advisory board members on September 29, 2023 and as a result the Company recorded compensation expense of $3,000,000 for the year ended December 31, 2023 and a corresponding Advisor Warrants liability of $3,000,000.

On December 10, 2025, Ms. Lisa Gersh resigned as an advisory board member. On January 6, 2026, the Company agreed to exercise its repurchase right with respect to Ms. Gersh’s Advisor Warrants upon her resignation. On January 7, 2026, the Company repurchased the Advisor Warrants and paid the repurchase price of $1,000,000 to Ms. Gersh, and thereafter such warrants were cancelled and removed from the warrant registry. As a result of the Company’s repurchase and the subsequent warrant cancellation, the Advisor Warrants liability was reduced to $2,000,000, as presented on the balance sheets, and the remaining Advisor Warrants are exercisable, in the aggregate, for up to approximately 0.124% of the Public Shares (previously 0.154%) that are outstanding as of the time immediately following the consummation of the Business Combination, on a fully diluted basis.

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Registration Rights Agreement

On September 29, 2023, the Company entered into a registration rights agreement with the Sponsor, the Forward Purchasers and the advisory board members, pursuant to which the Company is required to use commercially reasonable efforts to file a registration statement within 120 days of the Business Combination, and use best efforts to cause such registration statement to be declared effective as soon as practicable (but in no event later than 60 days) thereafter, providing for the resale, under Rule 415 of the Securities Act, of (i) the Sponsor Shares, (ii) the Public Shares issuable upon exercise of the Sponsor Warrants, (iii) the Public Shares issuable upon exercise of the Advisor Warrants, (iv) the Public Shares issued pursuant to the Forward Purchase Agreements and (v) any other shares of the Company that the parties to the Registration Rights Agreement have purchased on the open market, subject to certain conditions as provided in the Registration Rights Agreement. The parties to the Registration Rights Agreement, and their permitted transferees, are entitled to make up to 10 demands that the Company registers these securities, and will have certain “piggyback rights” with respect to other registration statements filed by the Company. The post-combination business will bear the expenses incurred in connection with the filing of any registration statements.

Directors’ Compensation

Immediately after the effectiveness of the Registration, the Company appointed three independent directors to the Board. The independent directors receive annual compensation of $275,000 for their service as an independent director, and an additional $25,000 in connection with their service as a committee chair, payable quarterly. Their annual compensation is recorded under compensation expense in the statements of operations and is reviewed by the Company’s compensation committee on an annual basis. Mr. Ackman does not receive any compensation from the Company in either his capacity as a director or as an officer.

The directors and officers, or any of their respective affiliates, will be reimbursed for any reasonable out-of-pocket expenses incurred in connection with activities on behalf of the Company such as identifying potential target businesses and performing due diligence on suitable Business Combinations. The Company’s audit committee will review on a quarterly basis all payments, if any, that were made to the Sponsor, officers, directors or their affiliates and will determine which expenses and the amount of those expenses that will be reimbursed. There is no cap or ceiling on the reimbursement of out-of-pocket expenses incurred by such persons in connection with activities on behalf of the Company.

Note 5—Stockholders’ Equity

Common Stock

The third amended and restated certificate of incorporation of the Company dated September 29, 2023, authorizes the issuance of up to 3,000,000,000 shares of Common Stock, par value $0.0001 per share. As of March 31, 2026 and December 31, 2025, there were 422,533 shares of Common Stock issued and outstanding, all of which were held by the Sponsor and defined as the Sponsor Shares.

Preferred Shares

The third amended and restated certificate of incorporation of the Company dated September 29, 2023, authorizes the issuance of up to 1,000,000 preferred shares, par value $0.0001 per share, with such designations, voting and other rights and preferences as may be determined from time to time by the Board. At March 31, 2026 and December 31, 2025, there were no preferred shares issued and outstanding.

Note 6—Fair Value Measurements

Fair Value Hierarchy

The Company measures fair value of financial instruments in accordance with ASC 820. As of March 31, 2026 and December 31, 2025, the fair value of the Company’s financial assets and liabilities approximates the carrying amounts represented on the balance sheets.

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ASC 820 establishes a framework for measuring fair value and requires additional disclosures about the use of fair value measurements. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The level within which the fair value measurement is categorized is determined on the basis of the lowest level input that is significant to the fair value measurement. The following fair value hierarchy is used to classify assets and liabilities based on the observable and unobservable inputs used to value the assets and liabilities:


	Level 1:	Inputs are unadjusted quoted prices in active markets.
	Level 2:	Inputs (other than quoted prices included in Level 1) are obtained directly or indirectly from observable market data at the measurement date.
	Level 3:	Inputs, including significant unobservable inputs, reflect the Company’s best estimate of what market participants would use in pricing the assets and liabilities at the measurement date.

Fair Value Measurement of Assets and Liabilities

The following table presents the Company’s liabilities at fair value and its fair value hierarchy.


Description	Level	As of March 31, 2026		As of December 31, 2025
Liabilities:
Sponsor Warrants	3	$	41,272,825	$	41,279,681
SPARs	3		—		—
Forward Purchase Agreements	3		—		—

Level 3 Transfers

There were no transfers into or out of Level 3 fair value measurements since the last financial statement reporting date.

Level 3 Reconciliation

The following table presents the change in fair value of the Company’s Level 3 financial instruments for the three months ended March 31, 2026. The Company’s management employed an independent third-party valuation firm to conduct valuations for the Sponsor Warrants, the SPARs and the Forward Purchase Agreements. The independent third-party valuation firm provided the Company’s management with a written report documenting their recommended valuations as of the reporting date.


	Sponsor Warrants			SPARs		Forward Purchase Agreements
Fair Value at December 31, 2025	$	41,279,681		$	—	$	—
Change in Fair Value		(6,856	)		—		—
Fair Value at March 31, 2026	$	41,272,825		$	—	$	—

As discussed in Note 2, the Sponsor Warrants were accounted for as a liability. At March 31, 2026 and December 31, 2025, the fair value of the Sponsor Warrants was estimated using a Black-Scholes option pricing model. At each reporting period the Company re-evaluates the inputs utilized in the Black-Scholes option pricing model to measure the fair value of the Sponsor Warrants, with changes in fair value reflected on the statements of operations.

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The SPARs and Forward Purchase Agreements were accounted for as liabilities, and their fair values were determined based on a number of factors embedded in the instruments, mainly that no active trading market exists for either instrument and it is likely that the Final Exercise Price of the SPARs will be set at a price that equates to its fair value. As a result, the fair values of the SPARs and Forward Purchase Agreements liabilities will likely remain unchanged until the SPARs are quoted on the OTCQX marketplace of the OTC Markets Group Inc. or other quotation service beginning at the SPAR Holder Election Period. The Company continues to re-evaluate its assumptions and significant estimates on these financial instruments at each reporting period when the financial statements are prepared. Existing circumstances and assumptions about future developments may change due to market changes or as the Company approaches a Definitive Agreement towards a Business Combination.

Level 3 Quantitative Information of Significant Unobservable Inputs

The significant unobservable inputs used in determining the fair value of the Sponsor Warrants associated with the liability are listed below.


Sponsor Warrants	As of March 31, 2026	As of December 31, 2025
Volatility	25%	25%
Probability of Not Completing a Deal	30%	30%
Expected Time to Complete a Deal (in years)	3.8	3.9
Probability of Warrant Renegotiation	30%	30%
Estimated Target Equity Value	$4.5 billion	$4.5 billion

The Sponsor Warrants’ significant unobservable inputs include: (i) Volatility, (ii) Probability of Not Completing a Deal, (iii) Expected Time to Complete a Deal, (iv) Probability of Warrant Renegotiation and (v) Estimated Target Equity Value. The Volatility reflects the anticipated implied volatility of the potential target company from the Company’s Business Combination over the Sponsor Warrants’ 10-year term. The Probability of Not Completing a Deal reflects a discount relating to the Company’s deadline to complete its Business Combination prior to the expiration of its term. The Expected Time to Complete a Deal considers the Company’s timeframe to consummate a Business Combination with all necessary shareholder and Board approvals to be the midpoint of the remaining time until the 10-year deadline. The Probability of Warrant Renegotiation is a discount based on the probability that the Sponsor Warrants will be restructured at the time of the Company’s Business Combination. The discount is representative of the average restructurings of the sponsor incentive and founder stock forfeitures in completed blank check company transactions. The Estimated Target Equity Value is the Company’s assumption of the total equity capital of the entity following its Business Combination. This assumption factors in the Company’s available capital at the time of the deal which is the estimated proceeds from the exercise of the SPARs and the Forward Purchase Agreements, and applies a multiplier to the Company’s available capital based on its observation of the median multiple between historical blank check companies’ available capital and the equity value of their eventual merger targets.

Note 7—Segment Reporting

Under Topic 280, an operating segment is defined as a component of a public entity that engages in business activities from which it may recognize revenues and incur expenses, has operating results that are regularly reviewed by the chief operating decision maker (the “CODM”) to make decisions about resources to be allocated to the segment and assess its performance, and has discrete financial information available. The Company’s CODM is comprised of the Chief Executive Officer, President, and Chief Financial Officer. The CODM monitors the operating results of the Company as a whole and its long-term purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other business combination transaction with one or more businesses. Since its inception, the Company’s operations and the CODM’s decisions are based on a single operating and reporting segment.

The CODM considers the Company’s net income/(loss), expenses and the components of total assets to assess the segment’s performance and makes resource allocation decisions for the Company’s single segment which is consistent with that presented within these unaudited financial statements. As the Company’s operations are comprised of a single reporting segment, the Company’s segment assets are reflected on the accompanying balance sheets as “total assets” and its significant segment expenses and net loss are listed on the accompanying statements of operations.

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Note 8—Subsequent Events

On April 7, 2026, PSCM announced that it had submitted a proposal to the board of directors of Universal Music Group N.V. (“UMG”) concerning a business combination transaction in which UMG would merge with the Company, with the newly merged company becoming a Nevada corporation listed on the NYSE. The proposal contemplates that the Pershing Square Funds (as non-managing members of the Sponsor) would waive their Sponsor Warrants in the Company in connection with the transaction. As of the date of these unaudited financial statements, there is no assurance that the proposal will be accepted by UMG or result in the transaction PSCM proposed or any other transaction.

The Company evaluated all other subsequent events and transactions that occurred after the March 31, 2026 balance sheet date up to the date that the unaudited financial statements were issued. Based upon this evaluation, the Company did not identify any additional subsequent events that would have required adjustment or disclosure in the unaudited financial statements.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

References in this report (the “Quarterly Report”) to “we,” “us”, “our” or the “Company” refer to Pershing Square SPARC Holdings, Ltd., and references to our “management” or our “management team” refer to our officers and directors. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the unaudited financial statements and the notes thereto contained elsewhere in this Quarterly Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. All statements, other than statements of historical facts, and including but not limited to statements regarding the Company or the Company’s management team’s expectations, hopes, beliefs, intentions or strategies regarding events or developments that the Company expects or anticipates will or may occur in the future are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. The forward-looking statements contained in this Quarterly Report are based on our current expectations and beliefs concerning future developments and their potential effects on the Company. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond the Company’s control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. Information concerning these and other factors can be found under Part I. Item 1A, Risk Factors in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025, as updated by the Company’s periodic filings with the SEC. In light of the significant uncertainties in forward-looking statements, you should not regard such statements as a representation or warranty that the Company will achieve its objectives and plans in any specified timeframe, or at all, and you should not place undue reliance on any forward-looking statements. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities law.

Overview

We were incorporated as a Delaware corporation on November 3, 2021 and formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. We intend to effectuate our Business Combination using cash from the proceeds of the exercise of our SPARs and the private placements of the Sponsor Shares, Sponsor Warrants, Forward Purchase Shares, or a combination of cash, stock and debt.

The issuance of additional shares in a Business Combination, including the Forward Purchase Shares:

•

may significantly dilute the equity interest that exercising SPAR holders would have otherwise obtained;

•

may subordinate the rights of holders of our Common Stock if preferred shares are issued with rights senior to those afforded our Common Stock;

•

could cause a change in control if a substantial number of ordinary or preferred shares are issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present directors and officers;

•

may have the effect of delaying or preventing a change of control of us by diluting the share ownership or voting rights of a person seeking to obtain control of us; and

•

may adversely affect prevailing market prices for our SPARs and, following our Business Combination, our Common Stock.

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Similarly, if we issue debt instruments or otherwise incur significant debt to banks or other lenders or owners of a target, it could result in:

•

default and foreclosure on our assets if our operating revenues after our Business Combination are insufficient to repay our debt obligations;

•

acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant;

•

our immediate payment of all principal and accrued interest, if any, if the debt security is payable on demand;

•

our inability to obtain necessary additional financing if the debt security contains covenants restricting our ability to obtain such financing while the debt security is outstanding;

•

our inability to pay dividends on our Common Stock;

•

using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our Common Stock if declared, our ability to pay expenses, make capital expenditures and acquisitions, and fund other general corporate purposes;

•

limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate;

•

increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation;

•

limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, and execution of our strategy; and

•

other purposes and other disadvantages compared to our competitors who have less debt.

We expect to continue to incur significant costs in the pursuit of our acquisition plans. As described in Note 8 to the unaudited financial statements included elsewhere in this Quarterly Report, on April 7, 2026, Pershing Square Capital Management, L.P. announced that it had submitted a proposal to the board of directors of Universal Music Group N.V. (“UMG”) concerning a business combination transaction in which UMG would merge with the Company, with the newly merged company becoming a Nevada corporation listed on the NYSE. We cannot assure you that our plans to raise capital, including through the exercise of our SPARs and the sale of Forward Purchase Shares, or to complete our Business Combination will be successful.

Results of Operations

All activities since the Company’s inception through March 31, 2026 were related to the Company’s organizational activities, preparation for, and the distribution of, SPARs, and searching for a Business Combination. We will not generate any operating revenues until after the completion of our Business Combination. We may generate non-operating income in the form of interest income on cash and cash equivalents held. There has been no significant change in our financial or trading position and no material adverse change has occurred since the date of our audited financial statements. We will incur substantially increased expenses in future periods as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses.

For the three months ended March 31, 2026, we had a net loss of $662,633, which consisted of (i) non-cash gain related to change in the fair value of the Sponsor Warrants liability of $6,856, (ii) directors’ compensation expense of $225,000 and (iii) accounting, franchise tax, legal, printing, research, and other expenses totaling $444,489. For the three months ended March 31, 2025, we had a net loss of $412,167, which consisted of (i) non-cash gain related to change in the fair value of the Sponsor Warrants liability of $30,595 (ii) directors’ compensation expense of $225,000 and (iii) accounting, franchise tax, legal, printing, research, and other expenses totaling $217,762.

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Liquidity and Capital Resources

Our liquidity needs have been satisfied by the sales of $4,225,330 Sponsor Shares and the sale of $35,892,480 Sponsor Warrants to the Sponsor in private placements. As of March 31, 2026 and December 31, 2025, we had a cash balance of $18,735,035 and $20,080,652 in the operating account, respectively, and $5,001,000 in the Segregated Account. We will hold these funds in cash.

We will use the funds in the operating account primarily to pay ongoing expenses and director compensation and to identify and evaluate target businesses, perform 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, and structure, negotiate and complete a Business Combination.

We intend to use substantially all of the funds provided by the exercise of our SPARs to complete our Business Combination. To the extent that our capital stock or debt financing is used, in whole or in part, as consideration to complete our Business Combination, the remaining proceeds from the exercise of SPARs, and any remaining proceeds from the sale of Forward Purchase Shares, will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.

In order to fund working capital deficiencies or finance transaction costs in connection with an intended Business Combination, our Sponsor may, but is not obligated to, purchase additional Sponsor Shares.

If our estimates of the costs of identifying a target business, undertaking in-depth due diligence and negotiating our Business Combination are less than the actual amount necessary to do so, we may have insufficient funds available to operate our business prior to our Business Combination. Moreover, we may need to obtain additional financing to complete our Business Combination if the cash consideration to be paid exceeds our capital available, including because a lower-than-expected number of SPAR holders choose to exercise their SPARs or because an insufficient amount of Additional Forward Purchase Shares are purchased. In such case, we may issue additional securities or incur debt in connection with such Business Combination. Subject to compliance with applicable securities laws, we would only complete such financing simultaneously with the completion of our Business Combination. If we are unable to complete our Business Combination because we do not have sufficient funds available to us, we may be forced to cease operations. In addition, following our Business Combination, if cash on hand is insufficient, we may need to obtain additional financing in order to meet our obligations.

Contractual Obligations

We did not have any long-term debt, capital lease obligations or operating lease obligations as of March 31, 2026 and December 31, 2025.

Critical Accounting Policies

The preparation of the unaudited financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America (“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 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:

Advisor Warrants Liability

The Advisor Warrants were issued at no cost to our advisory board members. Accordingly, we account for the Advisor Warrants under ASC 718—Stock compensation as the instruments were issued in connection with services provided towards our operations and potential Business Combination by the advisory board. The Advisor Warrants have a settlement feature whereby we or our Sponsor have the option to purchase the warrant from the holder upon the termination of their services for $1,000,000. The settlement feature results in liability classification at the Advisor Warrants’ repurchase price on grant date. Upon the consummation of our Business Combination (or vesting date), the outstanding liability will be measured at fair value.

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Sponsor Warrants Liability

We account for the Sponsor Warrants pursuant to applicable guidance in ASC 480—Distinguishing liabilities from equity (“ASC 480”) and ASC 815-40—Contracts in an entity’s own equity (“ASC 815-40”), under which the Sponsor Warrants do not meet the criteria for equity treatment because the number of underlying Public Shares for which the Sponsor Warrants are exercisable is dependent upon the number of Public Shares outstanding immediately following the consummation of our Business Combination along with the amount of funds raised in connection therewith. Accordingly, the Sponsor Warrants’ fair value at initial measurement was recorded as a derivative liability, and subsequent changes in fair value will be reflected on the statement of operations at each reporting period. The fair value of the Sponsor Warrants is measured using a Black-Scholes option pricing model, and the Sponsor Warrants’ classification will be re-assessed at the end of each reporting period. See Note 6 of the notes to the unaudited financial statements included herein for further information on the significant inputs utilized to determine fair value.

SPARs and Forward Purchase Agreement Liabilities

We account for the SPARs and the Forward Purchase Agreements in accordance with the guidance contained in ASC 480 and ASC 815-40. Under this guidance, we have determined that the SPARs and the Forward Purchase Agreements do not meet the criteria for equity treatment and will be recorded as derivative liabilities. Upon issuance, we recorded the initial fair value of the SPARs and Forward Purchase Agreements as expenses because such instruments were distributed to parties other than shareholders and accordingly may not be recognized as dividends under ASC 505—Equity. These liabilities will subsequently be measured at fair value with changes in fair value reflected on the statement of operations at each reporting period. The classification of these instruments, including whether such instruments should be recorded as liabilities or as equity, will be re-assessed at the end of each reporting period. See Note 6 of the notes to the unaudited financial statements included herein for further information on their fair values.

Off-Balance Sheet Arrangements

As of March 31, 2026 and December 31, 2025, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K.

Recent Accounting Pronouncements

Management does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material impact on our unaudited financial statements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

As of March 31, 2026, we were not subject to any market or interest rate risk. The funds received in connection with the submission of Elections will be held in a Custodial Account until the consummation of our Business Combination, or will be returned to electing SPAR holders in connection with certain events. The funds that are held in the Custodial Account will be held in cash or, at our election, will be invested in U.S. Treasury bills with a maturity of 180 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act, which invest only in direct U.S. Treasury obligations. Due to the short-term nature of these investments, we believe there will be no associated material exposure to interest rate risk.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures are designed to ensure that information required to be disclosed by us in reports filed under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosures.

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Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures as of March 31, 2026, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on this evaluation, our principal executive officer and principal financial officer have concluded that as of the end of the period covered by this Quarterly Report, our disclosure controls and procedures were effective at a reasonable assurance level.

Changes in Internal Control over Financial Reporting

There has been no change in the Company’s internal control over financial reporting that occurred during the quarter ended March 31, 2026 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

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Part II - OTHER INFORMATION

Item 1. Legal Proceedings

None.

Item 1A. Risk Factors

Reference is made to Part I, Item 1A, “Risk Factors” included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 (“Form 10-K”) filed with the SEC on March 23, 2026. As of the date of this Quarterly Report on Form 10-Q, there have been no material changes to the risk factors disclosed in our Form 10-K.

You should carefully consider that such factors could result in a significant or material adverse effect on our results of operations or financial condition. Additional risk factors not presently known to us or that we currently deem immaterial may also materially and adversely affect our business, financial condition and/or results of operations.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

(a) None.

(b) None.

Item 4. Mine Safety Disclosures

Not Applicable.

Item 5. Other Information

(a) None.

(b) None.

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Item 6. Exhibits


Exhibit No.	Description of Exhibits

3.1	Third Amended and Restated Certificate of Incorporation, filed with the Secretary of State of the State of Delaware on September 29, 2023 (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on September 29, 2023)

3.2	Bylaws (incorporated by reference to Exhibit 3.5 to the Company’s S-1/A filed July 28, 2023)

31.1*	Certification of Chief Executive Officer pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2*	Certification of Chief Financial Officer pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1*	Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2*	Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS*	XBRL Instance Document - the instance document does not appear in the Interactive Data File as its XBRL tags are embedded within the Inline XBRL document.

101.SCH*	Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents

104*	Cover page formatted as Inline XBRL and contained in Exhibit 101

* Filed herewith.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


Date: May 11, 2026	Pershing Square SPARC Holdings, Ltd.

	/s/ William A. Ackman
	Name:	William A. Ackman
	Title:	Chief Executive Officer, Chairman of the Board of Directors

Date: May 11, 2026	/s/ Michael Gonnella
	Name:	Michael Gonnella
	Title:	Chief Financial Officer

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Pershing Square SPARC Holdings, Ltd./DE 10-Q