Activate Energy Acquisition Corp.

Activate Energy Acquisition Corp. (the "Company") is a blank check company, incorporated in the Cayman Islands on June 10, 2025, formed with the primary objective of effecting a merger, share exchange, asset acquisition, share purchase, reorganization, or similar business combination with one or more operating businesses or entities ¹. The Company intends to focus its acquisition efforts on the oil and gas industry, leveraging its management team's and board of directors' extensive background and network in this sector, alongside financial services, capital markets, mergers and acquisitions, private equity, and leadership roles in publicly traded firms ². As a blank check company, it has not generated any operating revenues to date and does not expect to do so until the consummation of its initial business combination ³. The Company's business model is currently centered on identifying a suitable target business, with non-operating income generated from interest on investments held in its Trust Account ⁴.

The Company's strategy is built upon four core pillars: proactive and proprietary transaction sourcing, execution and structuring capability, significant value-add capability, and broad and extensive experience in both public and private markets ⁵. The management team's network is expected to provide access to a robust pipeline of proprietary investment opportunities, particularly within the energy sector ⁶. The Company aims to identify and execute deals requiring sophisticated problem-solving and detailed due diligence, leveraging its team's experience in creating high-value public and private companies ⁷. A key differentiator is the team's domain expertise and industry network, which will be used to attract high-quality acquisition targets and implement value-enhancing initiatives ⁸. The team's versatility in public and private markets allows them to identify targets with public market potential and prepare them for a successful transition ⁹.

The Company's investment criteria for target businesses include seeking high-impact, transformational opportunities with strong public market appeal and potential for attractive long-term returns ¹⁰. It prioritizes assets in proven, productive reservoirs with substantial undeveloped or underdeveloped resources, focusing on near-term, accessible value ¹¹. The management team must have sufficient information to form a well-supported investment thesis and be confident in its ability to market the opportunity to public investors ¹². Transaction certainty and speed are critical, with an aim to close the initial business combination within approximately six months from signing a definitive agreement ¹³. The Company also emphasizes manageable liabilities, transacting only with reputable counterparties, seeking differentiated opportunities, and securing high operational control ¹⁴. A strong historical record in health, safety, environmental responsibility, and corporate governance (HSE/ESG) is preferred, and opportunities in regions with relative social, political, and economic stability are prioritized ¹⁵.

For the period from June 10, 2025 (inception) through December 31, 2025, the Company reported a net income of $300,371 ¹⁶. This was primarily driven by interest earned on investments held in the Trust Account, totaling $556,356 ¹⁷, offset by general and administrative costs of $255,985 ¹⁸. Basic and diluted net income per share for Class A ordinary shares were both $0.03 ¹⁹. As of December 31, 2025, the Company had cash and cash equivalents of $738,076 ²⁰ and investments held in the Trust Account of $230,556,356 ²¹. Total current liabilities were $176,392 ²², and a deferred underwriting fee of $8,050,000 ²³ was also recorded. The Company had a working capital surplus of $829,541 ²⁴.

The Company consummated its Initial Public Offering (IPO) on December 5, 2025, selling 23,000,000 units at $10.00 per unit, generating gross proceeds of $230,000,000 ²⁵. This included the full exercise of the underwriters' over-allotment option for 3,000,000 units ²⁶. Simultaneously, 645,000 private placement units were sold to the sponsor and underwriters at $10.00 per unit, generating gross proceeds of $6,450,000 ²⁷. A total of $230,000,000 ²⁸ from the IPO and private placement proceeds was placed in the Trust Account. Transaction costs amounted to $13,241,124 ²⁹, comprising a $4,600,000 cash underwriting fee ³⁰, an $8,050,000 deferred underwriting fee ³¹, and $591,124 ³² in other offering costs.

During the period, cash used in operating activities was $487,642 ³³. The Company incurred $10,000 ³⁴ per month for office space, utilities, and secretarial and administrative support from its sponsor, and $13,520 ³⁵ in fees for strategic, operational, financial, regulatory, and transaction-related leadership under Officer Agreements. The sponsor paid $25,000 ³⁶ for 7,666,667 founder shares, representing approximately $0.003 per share ³⁷. The underwriters' full exercise of their over-allotment option on December 5, 2025, resulted in no founder shares being forfeited ³⁸.

The Company's primary objective for the upcoming period is to complete an initial business combination with one or more operating businesses or assets ³⁹. This combination must have a fair market value equal to at least 80% of the net assets held in the trust account at the time of executing the definitive agreement ⁴⁰. The Company anticipates structuring its initial business combination such 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 the post-transaction company owns or acquires 50% or more of the outstanding voting securities or a controlling interest sufficient to avoid registration as an investment company ⁴¹. The Company has until 18 months (or up to 24 months with both extensions) from the closing of its IPO, which occurred on December 5, 2025, to complete an initial business combination ⁴².

The Company intends to focus on industries that complement its management team's and board of directors' background and network, specifically the oil and gas industry ⁴³. Its growth strategy is centered on proactive and proprietary transaction sourcing, leveraging its team's track record and extensive relationship network to access a robust pipeline of investment opportunities ⁴⁴. The Company believes its success to date positions it as an attractive partner for energy companies seeking capital and liquidity solutions ⁴⁵. The management team's transaction experience and industry reputation are expected to enable the pursuit and execution of deals requiring sophisticated problem-solving, detailed due diligence, and nuanced structuring ⁴⁶.

The Company's operational outlook involves incurring increased expenses as a public company for legal, financial reporting, accounting, and auditing compliance, as well as for due diligence expenses related to identifying a target company ⁴⁷. Management has determined that the Company currently lacks the liquidity needed to sustain operations for a reasonable period of time, considered at least one year from the financial statement issuance date, as it expects to continue incurring significant costs in pursuit of its acquisition plans ⁴⁸. If an initial business combination is not completed within the combination period, the Company will cease all operations except for liquidation ⁴⁹.

Regarding capital allocation, 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 ⁵⁰. If share capital or debt is used as consideration, the remaining proceeds in the trust account will be used as working capital for the target business's operations, other acquisitions, and growth strategies ⁵¹. Funds held outside the trust account, which amounted to $738,076 ⁵² as of December 31, 2025, are intended for identifying and evaluating target businesses, performing due diligence, travel, reviewing corporate documents, and structuring/negotiating a business combination ⁵³. The Sponsor or affiliates may loan the Company up to $1,500,000 ⁵⁴ for working capital deficiencies or transaction costs, convertible into private placement units at $10.00 per unit ⁵⁵.

The Company faces substantial doubt about its ability to continue as a going concern due to a current lack of liquidity to sustain operations for a reasonable period and the expectation of significant costs in pursuit of acquisition plans ⁵⁶. If an initial business combination is not completed within the combination period, the Company will cease operations for liquidation ⁵⁷. 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 ⁵⁸. The Company may encounter competition from other entities with similar business objectives, including other special purpose acquisition companies, private equity groups, and public companies, many of which possess greater financial, technical, human, and other resources ⁵⁹. The obligation to pay cash for public shareholders exercising redemption rights may reduce resources available for the initial business combination, and outstanding warrants, with their potential future dilution, may not be viewed favorably by certain target businesses, placing the Company at a competitive disadvantage ⁶⁰. Furthermore, the low price paid by the sponsor for founder shares creates an incentive for officers and directors to pursue a business combination even if the target subsequently declines in value ⁶¹. Conflicts of interest may arise from officers and directors having fiduciary or contractual obligations to other entities, requiring them to present business combination opportunities to those entities first ⁶².

Management's message emphasizes the Company's status as a blank check company focused on identifying and executing an initial business combination, particularly within the oil and gas industry, by leveraging the team's extensive experience and network. The strategic priorities include proactive and proprietary transaction sourcing, execution and structuring capability, significant value-add capability, and broad experience in both public and private markets to identify high-quality targets and prepare them for public market success. Management plans to consummate an initial business combination prior to the end of the combination period, which is December 5, 2027 ⁶³. They acknowledge the current lack of liquidity to sustain operations for a reasonable period and the expectation of significant costs in pursuit of acquisition plans, raising substantial doubt about the Company's ability to continue as a going concern ⁶⁴. The Company intends to use substantially all funds in the trust account, including interest earned, to complete the business combination ⁶⁵, and funds outside the trust account, totaling $738,076 ⁶⁶ as of December 31, 2025, for identifying and evaluating target businesses and related due diligence.