Activate Energy Acquisition Corp.

Activate Energy Acquisition Corp. is a blank check company, incorporated in the Cayman Islands on June 10, 2025, formed for the purpose of effecting a business combination with one or more businesses ¹. The company intends to focus on industries that complement its management team's and board of directors' background and network, specifically targeting the oil and gas industry ². To date, the company has generated no operating revenues and does not expect to do so until it consummates its initial business combination ³. It generates non-operating income from interest earned on proceeds held in the Trust Account ⁴.

The company's core business model is to identify and acquire a target business, primarily within the oil and gas industry, through a merger, share exchange, asset acquisition, share purchase, reorganization, or similar business combination ⁵. Revenue generation is not expected until after the completion of this initial business combination ⁶. The company's primary customer segments are not applicable as it is a blank check company. The business model is entirely transactional, focused on the acquisition itself, rather than recurring income.

The company's strategy is built on four pillars: proactive and proprietary transaction sourcing leveraging its team's network, strong execution and structuring capability for complex deals, significant value-add capability through domain expertise, and extensive experience in both public and private markets to prepare targets for public listing ⁷. The investment criteria include seeking high-impact, transformational targets with strong public market appeal, assets in proven reservoirs with undeveloped resources, sufficient information access for a well-supported investment thesis, ability to close transactions within approximately six months from signing a definitive agreement, manageable liabilities, reputable counterparties, unique opportunities, high operational control, straightforward transactions with minimal regulatory complexity, and a strong historical record in HSE/ESG ⁸.

For the period from June 10, 2025 (inception) through December 31, 2025, Activate Energy Acquisition Corp. reported a net income of $300,371 ⁹. This net income was primarily driven by interest earned on investments held in the Trust Account, amounting to $556,356 ¹⁰, offset by general and administrative costs of $255,985 ¹¹. As of December 31, 2025, the company had cash and cash equivalents of $738,076 ¹² and investments held in the Trust Account of $230,556,356 ¹³. Total assets were $231,760,639 ¹⁴. Current liabilities amounted to $176,392 ¹⁵, and total liabilities were $8,226,392 ¹⁶, which includes a deferred underwriting fee of $8,050,000 ¹⁷. The company reported a total shareholders' deficit of $(7,022,109) ¹⁸. Basic and diluted net income per share for Class A ordinary shares was $0.03 ¹⁹, and for Class B ordinary shares, it was also $0.03 ²⁰.

The company's financial activities for the reported period primarily involved its Initial Public Offering (IPO) on December 5, 2025, where it sold 23,000,000 units at $10.00 per unit, generating gross proceeds of $230,000,000 ²¹. Simultaneously, it sold 645,000 private placement units at $10.00 per unit, generating gross proceeds of $6,450,000 ²². A total of $230,000,000 from these proceeds was placed in the Trust Account ²³. Transaction costs incurred amounted to $13,241,124 ²⁴, comprising a $4,600,000 cash underwriting fee ²⁵, an $8,050,000 deferred underwriting fee ²⁶, and $591,124 in other offering costs ²⁷. Cash used in operating activities for the period was $487,642 ²⁸.

During the period, the company entered into an administrative services agreement with its sponsor, commencing December 3, 2025, to pay $10,000 per month for office space, utilities, and secretarial and administrative support ²⁹. For the period from June 10, 2025, through December 31, 2025, $10,000 in fees for these services were incurred ³⁰. Additionally, Officer Agreements were entered into on February 2, 2026, effective December 3, 2025, entitling the CEO and CFO to a monthly fee of $7,500 each for strategic, operational, financial, regulatory, and transaction-related leadership ³¹. For the period from June 10, 2025, through December 31, 2025, $13,520 in fees for these services were incurred and included in accrued expenses ³².

The company intends to use substantially all of the funds held in the Trust Account, including any interest earned (net of permitted withdrawals and excluding deferred underwriting commissions), to complete its business combination ³³. To the extent that its share capital or debt is used, in whole or in part, as consideration for the business combination, the remaining proceeds in the Trust Account will be utilized as working capital to finance the operations of the target business, make other acquisitions, and pursue growth strategies ³⁴.

The company's management plans to consummate an initial business combination prior to the end of the combination period, which is December 5, 2027 ³⁵. The company will have until 18 months (or up to 24 months with both extensions) from the closing of its IPO to complete an initial business combination ³⁶. The initial business combination must occur with one or more operating businesses or assets with a fair market value equal to at least 80% of the net assets held in the Trust Account at the time of execution of the definitive agreement ³⁷. The company anticipates structuring its initial business combination so that the post-transaction company will own or acquire 100% of the equity interests or assets of the target business, though it may acquire less than 100% if it obtains 50% or more of the outstanding voting securities or a controlling interest ³⁸.

The company's liquidity needs are a concern, as management has determined it currently lacks the liquidity to sustain operations for a reasonable period of time, defined as at least one year from the financial statement issuance date, due to expected significant costs in pursuit of acquisition plans ³⁹. If an initial business combination is not completed within the combination period, the company will cease operations and liquidate ⁴⁰. The company had $738,076 in cash and cash equivalents as of December 31, 2025 ⁴¹. Funds held outside the Trust Account are intended to primarily identify and evaluate target businesses, perform due diligence, cover travel expenses, review corporate documents, and structure, negotiate, and complete a business combination ⁴².

To fund working capital deficiencies or finance transaction costs, the Sponsor, or certain officers and directors or their affiliates, may loan the company funds, up to $1,500,000 ⁴³. These Working Capital Loans may be convertible into private placement units at a price of $10.00 per unit upon consummation of the business combination ⁴⁴. As of December 31, 2025, no such Working Capital Loans were outstanding ⁴⁵. The company is obligated to pay $10,000 per month for office space, utilities, and secretarial and administrative support to the Sponsor or an affiliate ⁴⁶. This payment will cease upon completion of the initial business combination or liquidation ⁴⁷. Additionally, the CEO and CFO are entitled to a monthly fee of $7,500 each for their services, commencing December 3, 2025 ⁴⁸.

The company faces substantial doubt about its ability to continue as a going concern due to lacking sufficient liquidity to sustain operations for a reasonable period and the risk of liquidation if an initial business combination is not completed within the combination period ⁴⁹. Geopolitical instability from the ongoing Russia-Ukraine conflict, Israel-Hamas conflict, and United States-Iran-Israel conflict could lead to market disruptions, including volatility in commodity prices, credit and capital markets, supply chain interruptions, and increased cyberattacks, which may adversely affect the company's search for an initial business combination and any target business ⁵⁰. The company may encounter competition from other entities with similar business objectives, including other special purpose acquisition companies, private equity groups, and operating businesses, many of which possess greater financial, technical, human, and other resources ⁵¹. The obligation to pay cash for public shareholders exercising redemption rights may reduce resources available for the initial business combination, and outstanding warrants, along with potential future dilution, may not be viewed favorably by certain target businesses, potentially placing the company at a competitive disadvantage ⁵². There is no assurance that the Sponsor would be able to satisfy its indemnity obligations if claims by third parties reduce the Trust Account below the redemption amount, as the Sponsor's only assets are believed to be securities of the company ⁵³.

Management's message to shareholders emphasizes leveraging the team's extensive experience and network in the oil and gas industry, financial services, capital markets, mergers and acquisitions, and private equity to identify and execute compelling business combination opportunities. The strategic priorities are centered around proactive and proprietary transaction sourcing, strong execution and structuring capability for complex deals, significant value-add capability through domain expertise, and broad experience in both public and private markets to prepare target companies for a successful transition to publicly traded entities. The company aims to generate attractive returns for shareholders and enhance value by identifying high-quality targets and negotiating favorable acquisition terms. Management plans to consummate an initial business combination prior to the end of the combination period, which is December 5, 2027 ⁵⁴. The company is committed to adopting a proactive and thematic sourcing strategy, concentrating efforts on companies where leadership experience, relationships, capital, and expertise in capital markets can serve as catalysts for transformation, with the aim of accelerating growth and performance of target companies.