Significant Accounting Policies

6 Months Ended

Jun. 30, 2025

Note 2 — 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 (“U.S. GAAP”) and pursuant to the rules and regulations of the SEC. Certain information or footnote disclosures normally included in the financial statements prepared in accordance with U.S. 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 of the information and disclosures necessary for a complete presentation of financial position, results of operations or cash flows. In the opinion of management, the accompanying condensed financial statements include all adjustments which are considered necessary for a fair presentation of the unaudited condensed financial statements include all adjustments which are considered necessary for a fair presentation of the financial position, results of operations and cash flows for the periods presented. The results of operations for the six months ended June 30, 2025 are not necessarily indicative of the operating results for the full year ending December 31, 2025 or any other future period.

The accompanying unaudited condensed financial statements have been derived from the accounting records of the Company and should be read in conjunction with the financial statements and notes as of December 31, 2024 and for the period from April 29, 2024 (inception) through December 31, 2024 thereto included in the Company’s final prospectus for its Initial Public Offering as filed with the SEC on May 30, 2025.

Emerging Growth Company Status

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”), 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, 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 unaudited condensed financial statements in conformity with U.S. GAAP requires 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 income and 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 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. Actual results could differ from these estimates. Significant estimates made by management in the unaudited condensed financial statements include, but are not limited to, the fair value of public rights, redemption value of redeemable shares and the fair value of over-allotment liability.

Cash

Cash includes demand deposits with banks that the company may deposit additional funds at any time and also effectively may withdraw funds at any time without prior notice or penalty.

Marketable Securities Held in Trust Account

As of June 30, 2025, all of the assets held in the Trust Account were held in U.S. Treasury Securities Money Market Funds. All of the Company’s investments held in the Trust Account are classified as marketable securities. Marketable securities are presented on the condensed balance sheet at fair value at the end of each reporting period. Gains and losses resulting from the change in fair value of investments held in Trust Account are included in income earned on marketable securities held in Trust Account in the condensed statement of operations and comprehensive income. The estimated fair values of marketable securities held in Trust Account are determined using available market information. As of June 30, 2025, the estimated fair value of marketable securities held in Trust Account was $56,293,697. For the six and three months ended June 30, 2025, the Company recorded income earned on investments held in Trust Account of $203,822.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentration of credit risk consist of cash account in a financial institution and marketable securities held in Trust Account which, at times may exceed the Federal depository insurance coverage of $250,000. Also, the Company maintains certain bank accounts in Hong Kong, where cash balances are protected under Deposit Protection Scheme in accordance with the Deposit Protection Scheme Ordinance, with the maximum protection of up to HKD500,000 per depositor per Scheme member, including both principal and interest. The Company has not experienced losses on this account and management believes the Company is not exposed to significant risks on such account.

Offering Costs Associated with the Initial Public Offering

Offering costs consisted of underwriting, legal, accounting and other costs incurred through the IPO that were directly related to the IPO. Offering cost amounted to $1,308,056, consisting of $559,500 and $493,482 of underwriting commissions which were paid in cash and representative shares (55,950 ordinary shares) at the closing date of the IPO, respectively and $255,074 of other offering costs. The Company complies with the requirements of the ASC 340-10-S99-1 and SEC Staff Accounting Bulletin (“SAB”) Topic 5A - “Expenses of Offering”. The Company allocates offering costs among public shares, public rights based on the relative fair values of public shares and public rights. Accordingly, $1,156,982 was allocated to public shares and charged to ordinary shares subject to possible redemption, and $151,074 was allocated to public rights and charged to shareholders’ equity.

Fair Value of Financial Instruments

ASC Topic 820 “Fair Value Measurements and Disclosures” defines fair value, the methods used to measure fair value and the expanded disclosures about fair value measurements. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between the buyer and the seller at the measurement date. In determining fair value, the valuation techniques consistent with the market approach, income approach and cost approach shall be used to measure fair value. ASC Topic 820 establishes a fair value hierarchy for inputs, which represent the assumptions used by the buyer and seller in pricing the asset or liability. These inputs are further defined as observable and unobservable inputs. Observable inputs are those that buyer and seller would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs reflect the Company’s assumptions about the inputs that the buyer and seller would use in pricing the asset or liability developed based on the best information available in the circumstances.

The fair value hierarchy is categorized into three levels based on the inputs as follows:

	●	Level 1 - Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. Valuation adjustments and block discounts are not being applied. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these securities does not entail a significant degree of judgment.

	●	Level 2 - Valuations based on (i) quoted prices in active markets for similar assets and liabilities, (ii) quoted prices in markets that are not active for identical or similar assets, (iii) inputs other than quoted prices for the assets or liabilities, or (iv) inputs that are derived principally from or corroborated by market through correlation or other means.

	●	Level 3 - Valuations based on inputs that are unobservable and significant to the overall fair value measurement.

The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820 approximates the carrying amounts represented in the accompanying condensed balance sheet, primarily due to their short-term nature. The carrying amounts reported in the condensed balance sheet for cash, accounts payable and accrued expenses and due to related parties, each qualify as financial instruments and are a reasonable estimate of their fair values because of the short period between the origination of such instruments and their expected realization and their current market rate of interest.

The following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis as of the presented periods, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:


Description	Level	June 30, 2025		December 31, 2024
		(Unaudited)
Assets:
Marketable securities held in Trust Account	1	$	56,293,697	$	-

Liabilities:
Over-allotment liability	3	$	47,200	$	-

Ordinary Shares Subject to Possible Redemption

All of the 5,595,000 Ordinary Shares sold as part of the Units in the IPO contain a redemption feature which allows for the redemption of such Public Shares in connection with the Company’s liquidation, if there is a shareholder vote or tender offer in connection with the Business Combination and in connection with certain amendments to the Company’s amended and restated certificate of incorporation as disclosed in Note 1.

The Company accounted for its ordinary shares subject to possible redemption in accordance with the guidance in ASC Topic 480, “Distinguishing Liabilities from Equity” (ASC 480). Ordinary shares subject to mandatory redemption (if any) were classified as a liability instrument and will be measured at fair value. Conditionally redeemable ordinary shares (including ordinary shares that features redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) were classified as temporary equity. At all other times, ordinary shares were classified as stockholders’ equity. In accordance with ASC 480-10-S99, the Company classified the ordinary shares subject to redemption outside of permanent equity as the redemption provisions are not solely within the control of the Company.

Given that the 5,595,000 ordinary shares sold as part of the units in the IPO were issued with other freestanding instruments (i.e., rights), the initial carrying value of ordinary shares, net of allocated offering cost, has been classified as temporary equity, and has been allocated to the proceeds determined in accordance with ASC 470-20. If it is probable that the equity instrument will become redeemable, the Company has the option to either (i) accrete changes in the redemption value over the period from the date of issuance (or from the date that it becomes probable that the instrument will become redeemable, if later) to the earliest redemption date of the instrument or (ii) recognize changes in the redemption value immediately as they occur and adjust the carrying amount of the instrument to equal the redemption value at the end of each reporting period. The Company has elected to i) recognize the changes in redemption value as a charge against retained earnings or, in the absence of retained earnings, as a charge against additional paid-in capital over an expected 15-month period, which is the initial period that the Company has to complete a Business Combination.

For the six and three months ended June 30, 2025, the Company recorded accretion of ordinary share subject to redemption value of $517,668.

Ordinary shares subject to possible redemption reflected in the condensed balance sheet are recorded in the following table:


Gross proceeds	$	55,950,000
Less:
Proceeds allocated to public rights		(6,461,922	)
Offering costs allocated to redeemable shares		(1,156,982	)
Plus:
Accretion of carrying value to redemption value		517,668
Ordinary shares subject to possible redemption as of June 30, 2025 (Unaudited)	$	48,848,764

Over-allotment Option

The over-allotment option granted to the underwriter was deemed to be a freestanding financial instrument indexed to the contingently redeemable shares and was accounted for as a liability pursuant to ASC Topic 480, “Distinguishing Liabilities from Equity” (“ASC 480”). Upon the closing of the IPO on May 30, 2025, the over-allotment option was granted and represented the option to purchase up to 155,000 Units at $10.00 per Unit, which would expire on July 13, 2025. The Company used Binomial option pricing model in the determination of the fair value of the over-allotment liability. Key inputs used in the model are set forth as below:


Valuation date	No. of options		Vesting date	Expiry date	Exercise price		Spot price		Risk-free rate			Volatility
May 30, 2025		155,000	May 29, 2025	July 13, 2025		9.80		10.01		4.19	%		3.4	%
June 30, 2025		155,000	May 29, 2025	July 13, 2025		9.80		10.09		4.17	%		3.1	%

On May 30, 2025 and June 30, 2025, the fair value of the over-allotment liability were $39,900 and $47,200, respectively, and loss from change in fair value of over-allotment liability of $7,300 was recorded for the six and three months ended June 30, 2025.

Related Parties

Parties, which can be a corporation or individual, are considered to be related if the Company has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operational decisions. Companies are also considered to be related if they are subject to common control or common significant influence.

Earnings (Loss) Per Ordinary Share

The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share”. The unaudited condensed statements of operations and comprehensive income include a presentation of earnings (loss) per redeemable share and earnings (loss) per non-redeemable share following the two-class method of income per share. In order to determine the income (loss) attributable to both the redeemable shares and non-redeemable shares, the Company first considered the undistributed income (loss) allocable to both the redeemable shares and non-redeemable shares and the undistributed income (loss) is calculated using the total income (loss) less any dividends paid. The Company then allocated the undistributed income (loss) ratably based on the weighted average number of shares outstanding between the redeemable and non-redeemable shares. Any remeasurement of the accretion to redemption value of the shares subject to possible redemption was considered to be dividends paid to the public shareholders.

Basic earnings per share (“EPS”) is computed by dividing net income available to redeemable/non-redeemable shareholders by the weighted-average number of redeemable/non-redeemable shares outstanding for the period. Net income available to redeemable/non-redeemable shareholders represents net income of the Company reduced by an allocation of earnings to participating securities. Unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and are included in the computation of EPS pursuant to the two-class method. Share-based payment awards that do not contain such rights are not deemed participating securities and are included in diluted shares outstanding (if dilutive).

Diluted EPS is calculated under the treasury stock method and the two-class method. The calculation that results in the lowest diluted EPS amount for the redeemable/non-redeemable shares is reported in the Company’s condensed statements of operations and comprehensive income. The treasury stock method includes the dilutive effect of potential redeemable/non-redeemable shares including unvested stock-based awards. Potential redeemable shares associated with the over-allotment options are computed under the if-converted method. For the six and three months ended June 30, 2025, the effect of diluted securities was 12,163.

Net income (loss) used in the calculation of basic EPS is based on the following:


	For the Three Months Ended June 30, 2025			For the Six Months Ended June 30, 2025
	(Unaudited)			(Unaudited)
Net income	$	113,309		$	38,152
Less: Accretion of redeemable ordinary shares to redemption value		517,668			517,668
Net loss including accretion of redeemable ordinary shares to redemption value		(404,359	)		(479,516	)

Basic EPS per share presented in the unaudited condensed statement of operations and comprehensive income is based on the following:


	For the Three Months Ended June 30, 2025						For the Six Months Ended June 30, 2025
	Redeemable Ordinary Share			Non-Redeemable Ordinary Share			Redeemable Ordinary Share			Non-Redeemable Ordinary Share
	(Unaudited)						(Unaudited)
Numerators:
Allocation of net loss	$	(233,655	)	$	(170,704	)	$	(201,545	)	$	(277,971	)
Accretion of redeemable ordinary shares to redemption value		517,668			-			517,668			-
Allocation of net income (loss)	$	284,013		$	(170,704	)	$	316,123		$	(277,971	)
Denominators:
Weighted-average ordinary shares outstanding		1,927,167			1,407,954			963,583			1,328,977

Basic earnings (loss) per share	$	0.15		$	(0.12	)	$	0.33		$	(0.21	)

Net income (loss) used in the calculation of diluted EPS is based on the following:


	For the Three Months Ended June 30, 2025			For the Six Months Ended June 30, 2025
	(Unaudited)			(Unaudited)
Net income	$	113,309		$	38,152
Less: Accretion of redeemable ordinary shares to redemption value		517,668			517,668
Less: accretion of ordinary share subject to redemption value of participating securities considered potentially dilutive		12,163			12,163
Net loss including accretion of redeemable ordinary shares to redemption value		(416,522	)		(491,679	)

Diluted EPS per share presented in the unaudited condensed statement of operations and comprehensive income is based on the following:


	For the Three Months Ended June 30, 2025						For the Six Months Ended June 30, 2025
	Redeemable Ordinary Share			Non-Redeemable Ordinary Share			Redeemable Ordinary Share			Non-Redeemable Ordinary Share
	(Unaudited)						(Unaudited)
Numerators:
Allocation of net loss	$	(243,454	)	$	(173,068	)	$	(209,938	)	$	(281,742	)
Accretion of redeemable ordinary shares to redemption value		529,831			-			529,831			-
Allocation of net income (loss)	$	286,377		$	(173,068	)	$	319,894		$	(281,742	)
Denominators:
Weighted-average ordinary shares outstanding		1,980,556			1,407,954			990,278			1,328,977

Diluted earnings (loss) per share	$	0.14		$	(0.12	)	$	0.32		$	(0.21	)

Income Taxes

The Company accounts for income taxes under ASC 740 Income Taxes (“ASC 740”). ASC 740 requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statement and tax basis of assets and liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carry forwards. ASC 740 additionally requires a valuation allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not be realized.

ASC 740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position 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. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim period, disclosure and transition.

The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of June 30, 2025 and December 31, 2024. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position.

The Company determined that the Cayman Islands is the Company’s only major tax jurisdiction.

The Company may be subject to potential examination by taxing authorities in the areas of income taxes. These potential examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions and compliance with federal and state tax laws. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months.

There is currently no taxation imposed on income by the Government of the Cayman Islands for the six and three months ended June 30, 2025 and for the period from April 29, 2024 (inception) through June 30, 2024.

Recent Accounting Pronouncements

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The amendments in this ASU require disclosures, on an annual and interim basis, of significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”), as well as the aggregate amount of other segment items included in the reported measure of segment profit or loss. The ASU requires that a public entity disclose the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources. Public entities will be required to provide all annual disclosures currently required by Topic 280 in interim periods, and entities with a single reportable segment are required to provide all the disclosures required by the amendments in this ASU and existing segment disclosures in Topic 280. This ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The Company adopted ASU 2023-07 since inception.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (ASU 2023-09), which requires disclosure of incremental income tax information within the rate reconciliation and expanded disclosures of income taxes paid, among other disclosure requirements. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company’s management does not believe the adoption of ASU 2023-09 will have a material impact on its financial statements and disclosures.

In November 2024, FASB issued ASU 2024-03 Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”). Under ASU 2024-03, a public entity would be required to disclose information about purchases of inventory, employee compensation, depreciation, intangible asset amortization, and depletion for each income statement line item that contains those expenses. ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027. ASU 2024-03 allows for early adoption and requires either prospective adoption to financial statements issued for reporting periods after the effective date of ASU 2024-03 or retrospectively to any or all prior periods presented in the financial statements. The Company’s management does not believe the adoption of ASU 2024-03 will have a material impact on its financial statements and disclosures.

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

Wintergreen Acquisition Corp. 10-Q