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Merlin, Inc.

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Business Summary

Inflection Point Acquisition Corp. IV (the "Company" or "Inflection Point") is a blank check company incorporated in the Cayman Islands on June 24, 2024, with the sole purpose of effecting a business combination with one or more businesses or entities . The Company has not engaged in any operations or generated any operating revenues to date, with all activities focused on its formation, initial public offering (IPO), and the identification and evaluation of prospective acquisition candidates . The core business model is to identify and acquire an operating business, leveraging the collective experience and expertise of its co-founders, management team, and Sponsor, primarily within the technology industry or sectors undergoing technological transformation . The Company aims to generate attractive returns for shareholders and enhance value through improving the operational performance of the acquired company .

The Company's primary strategic focus is the proposed business combination with Merlin Labs, Inc. ("Merlin"), a Delaware corporation formed on March 10, 2022 . Merlin is described as a leader in developing aircraft-agnostic autonomy for national security applications, with a dual-track civil certification program aiming to be the first to certify an AI skill on an aircraft . The proposed business combination involves Inflection Point changing its jurisdiction to Delaware, and a merger where Merlin will become a wholly-owned subsidiary of the Company, which will then be renamed "Merlin, Inc." . The aggregate consideration for Merlin Equity Holders is $800,000,000 , to be paid in shares of New Merlin Common Stock. Additionally, Pre-Funded Convertible Notes totaling approximately $78 million and an additional $10.9 million (totaling approximately $88.9 million) will convert into shares of New Merlin's 12.0% Series A Cumulative Convertible Preferred Stock .

For the fiscal year ended December 31, 2025, Inflection Point reported a net income of $6,008,347 . This was primarily driven by interest earned on investments held in the Trust Account of $10,479,542 and interest earned on a bank account of $56,002 , partially offset by general and administrative expenses of $3,857,197 and compensation expense of $670,000 . As of December 31, 2025, the Company had cash of $703,596 and investments held in the Trust Account of $262,235,740 . Total current liabilities were $3,329,932 , and a deferred underwriting fee payable of $8,750,000 . The Company had a working capital deficit of $2,416,322 as of December 31, 2025.

Comparing the year ended December 31, 2025, to the period from June 24, 2024 (inception) through December 31, 2024, net income increased from approximately $1.5 million to $6,008,347 . Interest earned on investments in the Trust Account significantly increased from approximately $1.8 million to $10,479,542 . General and administrative expenses also rose from $251,144 to $3,857,197 , and compensation expense of $670,000 was incurred in 2025, which was not present in the prior period. Cash used in operating activities was $1,328,713 in 2025, compared to $466,474 in the prior period.

Significant operational developments during the period include the approval by shareholders on October 21, 2025, to change the Company's name to "Inflection Point Acquisition Corp. IV" and to amend the Articles to allow for earlier redemption of Public Shares to facilitate a business combination . Effective July 2025, there were management changes, including the resignation of the former President and CEO and CFO, and the appointment of Michael Blitzer as President and CEO, Robert Folino as CFO, and Kevin Shannon as COO . The Business Combination Agreement with Merlin was entered into on August 13, 2025 , and shareholders approved the Proposed Business Combination at an Extraordinary General Meeting (EGM) held on March 12, 2026 . The Company expects to consummate the Proposed Business Combination on March 16, 2026 .

Business Outlook

The Company expects to consummate the Proposed Business Combination with Merlin on March 16, 2026 , following shareholder approval received at the EGM on March 12, 2026 . Upon closing, the Company will change its name to "Merlin, Inc." . The aggregate consideration to be paid to Merlin Equity Holders is $800,000,000 , which will be satisfied by shares of New Merlin Common Stock. Pre-Funded Convertible Notes, totaling approximately $88.9 million , will convert into shares of New Merlin's 12.0% Series A Cumulative Convertible Preferred Stock . The Company has also secured a Closing PIPE Investment of $120 million through the purchase of Series A Preferred Stock and New Merlin Series A Warrants by accredited investors, with an initial investment of $100 million from one investor and an additional $20 million from other investors.

Merlin Labs, Inc. is positioned as a leader in developing aircraft-agnostic autonomy for national security applications, with a dual-track civil certification program aiming to be the first to certify an AI skill on an aircraft . This indicates a strategic growth area in advanced technology, specifically artificial intelligence and autonomous systems within the aerospace sector. The Company's initial business strategy, developed at the time of the IPO, focused on capitalizing on transformational changes driven by technology, including advanced connectivity, AI capabilities, mobile and digitalization, 'digital-trust' technologies, cloud computing, and next-generation software development . Worldwide spending on Digital Transformation is projected to exceed $4 trillion by 2027, with an estimated annual growth rate of over 16% over the 2022 to 2027 period, driven by digitization and data-intensive tools like AI .

Operationally, the Company expects to incur increased expenses as a public company for legal, financial reporting, accounting, and auditing compliance, as well as for due diligence expenses . The Company's management team, including the newly appointed President and CEO Michael Blitzer, CFO Robert Folino, and COO Kevin Shannon, are expected to remain with New Merlin following the business combination . Michael Blitzer is also expected to serve as a director of New Merlin . The Company's executive offices are located at 1345 Avenue of the Americas, Floor 47, New York, NY 10105, provided by an affiliate of the Sponsor free of charge .

Regarding capital allocation, the Company intends to use substantially all funds held in the Trust Account, including interest earned (less income taxes payable), to complete its initial business combination . If share capital or debt is used as consideration, remaining proceeds will be used as working capital for the target business's operations, other acquisitions, and growth strategies . The Sponsor, or certain officers and directors or their affiliates, may loan the Company funds to cover working capital deficiencies or transaction costs, with up to $2,500,000 of such loans potentially convertible into private placement units at $10.00 per unit , including up to $750,000 from Inflection Point Fund.

The Company faces a structural headwind related to its "blank check company" status, with a completion window until November 4, 2026, to complete an initial business combination . Failure to do so would result in the redemption of Public Shares and liquidation . The Company's liquidity condition and mandatory liquidation date raise substantial doubt about its ability to continue as a going concern if the Proposed Business Combination is not consummated . Geopolitical unrest, pandemic outbreaks, and volatility in debt and equity markets are also identified as external factors that could materially and adversely affect the Company's ability to complete a business combination . Changes in international trade policies, tariffs, and treaties could also negatively impact the business .

Risk Factors

The Company faces several material risks, including the potential inability to consummate the Proposed Business Combination with Merlin, which would necessitate pursuing an alternative initial business combination opportunity within the completion window ending November 4, 2026 . If the business combination is not completed, the Company would cease operations, redeem Public Shares at a per-share price of approximately $10.49 (as of December 31, 2025), and liquidate, rendering the Public Rights worthless . A significant risk is the high redemption rate observed, with Public Shareholders holding 22,550,551 Public Shares, representing approximately 90.3% of the outstanding Public Shares, having exercised their redemption rights in connection with the Proposed Business Combination. This substantial redemption could limit the Company's available cash for future transactions or operations, potentially leading to the need for dilutive equity issuances or high-interest debt . The Company also operates with a working capital deficit of $2,416,322 as of December 31, 2025, and depends on potential loans from the Sponsor or management to cover deficiencies . Third-party claims against the Trust Account could reduce the per-share redemption amount below $10.00 . Furthermore, the Company's status as a blank check company and potential PFIC status could result in adverse U.S. federal income tax consequences to U.S. investors . Geopolitical unrest, such as the ongoing military conflicts in Ukraine and the Middle East, and volatility in debt and equity markets, could materially and adversely affect the Company's ability to find and complete a business combination .

Management Priorities

Management's message to shareholders emphasizes the Company's commitment to completing the Proposed Business Combination with Merlin, which has received the requisite shareholder approval at the EGM on March 12, 2026, and is expected to close on March 16, 2026 . The strategic priorities highlighted include capitalizing on the collective experience of the management team and Sponsor to identify attractive business combination opportunities, particularly within the technology industry and sectors undergoing technological transformation . Management also underscores the objective of generating attractive returns for shareholders and enhancing value through improving the operational performance of the acquired company . Michael Blitzer, the President and Chief Executive Officer, is expected to serve as a director of New Merlin after the consummation of the Proposed Business Combination . The Company acknowledges the potential need for additional capital to fund working capital deficiencies or transaction costs, with the Sponsor or affiliates potentially providing loans of up to $2,500,000 , of which up to $750,000 may come from Inflection Point Fund.

View Source Annual Report on SEC.gov ↗

References

  1. [1] Item 1, Business — Overview
  2. [2] Item 1, Business — Overview
  3. [3] Item 1, Business — Business Strategy
  4. [4] Item 1, Business — Business Strategy
  5. [5] Item 1, Business — Proposed Business Combination with Merlin
  6. [6] Item 1, Business — Proposed Business Combination with Merlin
  7. [7] Item 1, Business — Proposed Business Combination with Merlin
  8. [8] Item 1, Business — The Merger and Consideration
  9. [9] Item 1, Business — The Merger and Consideration
  10. [10] Item 1, Business — The Merger and Consideration
  11. [11] Item 1, Business — The Merger and Consideration
  12. [12] Item 7, MD&A — Results of Operations
  13. [13] Item 7, MD&A — Results of Operations
  14. [14] Item 7, MD&A — Results of Operations
  15. [15] Item 7, MD&A — Results of Operations
  16. [16] Item 7, MD&A — Results of Operations
  17. [17] Item 7, MD&A — Liquidity and Capital Resources
  18. [18] Item 7, MD&A — Liquidity and Capital Resources
  19. [19] Item 8, Consolidated Balance Sheets
  20. [20] Item 8, Consolidated Balance Sheets
  21. [21] Item 1A, Risk Factors — If the net proceeds of the IPO and simultaneous private placement not being held in the Trust Account are insufficient to allow us to operate until the completion of the Business Combination, we will depend on loans from the Sponsor or management team to complete the Business Combination.
  22. [22] Item 7, MD&A — Results of Operations
  23. [23] Item 7, MD&A — Results of Operations
  24. [24] Item 7, MD&A — Results of Operations
  25. [25] Item 7, MD&A — Results of Operations
  26. [26] Item 7, MD&A — Results of Operations
  27. [27] Item 7, MD&A — Results of Operations
  28. [28] Item 7, MD&A — Results of Operations
  29. [29] Item 7, MD&A — Liquidity and Capital Resources
  30. [30] Item 7, MD&A — Liquidity and Capital Resources
  31. [31] Item 1, Business — Name Change Proposal and Article 50.5 Amendment Proposal
  32. [32] Item 1, Business — Management Team Changes
  33. [33] Item 1, Business — Proposed Business Combination with Merlin
  34. [34] Item 1, Business — Proposed Business Combination with Merlin
  35. [35] Item 1, Business — Proposed Business Combination with Merlin
  36. [36] Item 1, Business — Proposed Business Combination with Merlin
  37. [37] Item 1, Business — Proposed Business Combination with Merlin
  38. [38] Item 1, Business — Proposed Business Combination with Merlin
  39. [39] Item 1, Business — The Merger and Consideration
  40. [40] Item 1, Business — The Merger and Consideration
  41. [41] Item 1, Business — The Merger and Consideration
  42. [42] Item 1, Business — Series A Preferred Stock Investment
  43. [43] Item 1, Business — Series A Preferred Stock Investment
  44. [44] Item 1, Business — Series A Preferred Stock Investment
  45. [45] Item 1, Business — Proposed Business Combination with Merlin
  46. [46] Item 1, Business — Business Strategy
  47. [47] Item 1, Business — Business Strategy
  48. [48] Item 7, MD&A — Results of Operations
  49. [49] Item 1A, Risk Factors — The officers and directors of an acquisition candidate may resign upon completion of our initial business combination. The loss of a business combination target’s key personnel could negatively impact the operations and profitability of our post-combination business.
  50. [50] Item 1, Business — Investment Criteria
  51. [51] Item 1, Business — Properties
  52. [52] Item 7, MD&A — Liquidity and Capital Resources
  53. [53] Item 7, MD&A — Liquidity and Capital Resources
  54. [54] Item 7, MD&A — Liquidity and Capital Resources
  55. [55] Item 7, MD&A — Liquidity and Capital Resources
  56. [56] Item 7, MD&A — Liquidity and Capital Resources
  57. [57] Item 1, Business — The Initial Public Offering
  58. [58] Item 1A, Risk Factors — If we do not complete the Proposed Business Combination, we may not be able to consummate our initial business combination within the completion window, in which case we would cease all operations except for the purpose of winding up and we would redeem our Public Shares and liquidate.
  59. [59] Item 7, MD&A — Liquidity and Capital Resources
  60. [60] Item 1A, Risk Factors — Our search for a business combination, and any target business with which we ultimately consummate a business combination, may be materially adversely affected by events that are outside of our control, such as increased geopolitical unrest, pandemic outbreaks and volatility in the debt and equity markets.
  61. [61] Item 1A, Risk Factors — Changes in international trade policies, tariffs and treaties affecting imports and exports may have a material adverse effect on our search for an initial business combination target if we do not complete the Proposed Business Combination, our ability to complete the Proposed Business Combination or another initial business combination, and/or our business, financial condition and results of operations following completion of the Proposed Business Combination or another initial business combination.
  62. [62] Item 1A, Risk Factors — If we do not complete the Proposed Business Combination, we may not be able to consummate our initial business combination within the completion window, in which case we would cease all operations except for the purpose of winding up and we would redeem our Public Shares and liquidate.
  63. [63] Item 1, Business — Redemption If No Business Combination
  64. [64] Item 1, Business — Redemption If No Business Combination
  65. [65] Item 1A, Risk Factors — The ability of our Public Shareholders to exercise redemption rights with respect to a large number of our Public Shares and the amount of deferred underwriting compensation may not allow us to complete the most desirable Business Combination or optimize our capital structure.
  66. [66] Item 1A, Risk Factors — The ability of our Public Shareholders to exercise redemption rights with respect to a large number of our Public Shares and the amount of deferred underwriting compensation may not allow us to complete the most desirable Business Combination or optimize our capital structure.
  67. [67] Item 1A, Risk Factors — If the net proceeds of the IPO and simultaneous private placement not being held in the Trust Account are insufficient to allow us to operate until the completion of the Business Combination, we will depend on loans from the Sponsor or management team to complete the Business Combination.
  68. [68] Item 1A, Risk Factors — If the net proceeds of the IPO and simultaneous private placement not being held in the Trust Account are insufficient to allow us to operate until the completion of the Business Combination, we will depend on loans from the Sponsor or management team to complete the Business Combination.
  69. [69] Item 1A, Risk Factors — If third parties bring claims against us, the proceeds held in the Trust Account could be reduced and the per-share redemption amount received by shareholders may be less than $10.00 per share.
  70. [70] Item 1A, Risk Factors — We may be a passive foreign investment company, or “PFIC,” which could result in adverse U.S. federal income tax consequences to U.S. investors.
  71. [71] Item 1A, Risk Factors — Our search for a business combination, and any target business with which we ultimately consummate a business combination, may be materially adversely affected by events that are outside of our control, such as increased geopolitical unrest, pandemic outbreaks and volatility in the debt and equity markets.
  72. [72] Item 1, Business — Proposed Business Combination with Merlin
  73. [73] Item 1, Business — Business Strategy
  74. [74] Item 1, Business — Business Strategy
  75. [75] Item 1, Business — Investment Criteria
  76. [76] Item 7, MD&A — Liquidity and Capital Resources
  77. [77] Item 7, MD&A — Liquidity and Capital Resources

Analysis on 5/22/2026