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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 entities . The Company has not engaged in any operations or generated any operating revenues to date, with its activities focused on organizational matters, its initial public offering (IPO), and identifying and evaluating prospective acquisition candidates . The core business model is to identify and acquire an operating business, leveraging the collective experience of its co-founders, management team, and Sponsor to generate attractive returns for shareholders and enhance value through operational improvements . The Company aims to capitalize on transformational changes driven by technology adoption, particularly within the technology industry and sectors undergoing technological evolution .

The Company's IPO was consummated on November 4, 2024, raising gross proceeds of $250,000,000 from the sale of 25,000,000 units at $10.00 per unit . Each unit consisted of one Class A ordinary share and one right, with each right entitling the holder to purchase one-tenth of one Class A ordinary share upon the consummation of an initial business combination . Simultaneously, the Company completed a private sale of 425,000 Private Placement Units to the Sponsor at $10.00 per unit, generating gross proceeds of $4,250,000 . Transaction costs amounted to $11,403,592, comprising $2,000,000 in cash underwriting fees, $8,750,000 in deferred underwriting fees, and $653,592 in other offering costs . Following the IPO, $250,000,000 was placed in a Trust Account .

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, totaling $10,479,542, and interest earned on a bank account of $56,002 . These were partially offset by general and administrative expenses of $3,857,197 and compensation expense of $670,000 . As of December 31, 2025, the Company held $262,235,740 in investments in the Trust Account and $703,596 in cash for working capital purposes . The Company had total current liabilities of $3,329,932 and a deferred underwriting fee payable of $8,750,000, leading to total liabilities of $12,079,932 . The Class A ordinary shares subject to possible redemption were valued at $262,235,740, at a redemption value of approximately $10.49 per share . The Company's total shareholders' deficit was $(11,166,322) .

Comparing the year ended December 31, 2025, to the period from June 24, 2024 (inception) through December 31, 2024, net income increased from $1,519,663 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 for the year ended December 31, 2025, compared to $466,474 for the prior period .

During the reported period, significant operational developments 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 earlier redemption of Public Shares to facilitate a business combination . Effective July 2025, Andrew Gundlach resigned as President and CEO, becoming Executive Chairman, while Michael Blitzer, Robert Folino, and Kevin Shannon were appointed President and CEO, CFO, and COO, respectively . On August 13, 2025, the Company entered into a Business Combination Agreement with Merlin Labs, Inc. ("Merlin"), a Delaware corporation specializing in aircraft-agnostic autonomy for national security applications . The Proposed Business Combination involves Inflection Point domesticating as a Delaware corporation and then merging with Merlin, with Merlin becoming a wholly-owned subsidiary and the combined company changing its name to "Merlin, Inc." . In connection with this, Merlin entered into agreements to sell approximately $78 million of convertible promissory notes and warrants to Pre-Funded Investors on July 2, 2025, and August 13, 2025 , and an additional $9.3 million investment for a Pre-Funded Convertible Note with a principal amount of approximately $10.9 million and a Pre-Funded Warrant on November 17, 2025 . The aggregate consideration for Merlin Equity Holders is $800,000,000, divided by the redemption price of each Public Share . The Company's shareholders approved the Transaction Proposals at an Extraordinary General Meeting (EGM) on March 12, 2026, and the Company expects to consummate the Proposed Business Combination on March 16, 2026 . Public Shareholders holding 22,550,551 Public Shares, representing approximately 90.3% of the outstanding Public Shares, exercised their redemption rights in connection with the Proposed Business Combination .

Business Outlook

The Company expects to consummate the Proposed Business Combination with Merlin Labs, Inc. on March 16, 2026, following the requisite shareholder approval received at the EGM on March 12, 2026 . Upon completion, the Company will change its name to "Merlin, Inc." and Merlin OpCo will become a wholly-owned subsidiary, holding and operating substantially all of the combined company's assets and business .

Merlin Labs, Inc. 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 . This positions the combined entity in a growth area driven by advanced connectivity, AI capabilities, and digitalization across various sectors. The IDC projects worldwide spending on Digital Transformation to exceed $4 trillion by 2027, with an estimated annual growth rate of over 16% over the 2022-2027 period, driven by digitization and data-intensive tools like AI . The Company's business strategy, if an alternative business combination were pursued, would focus on sub-sectors such as Artificial Intelligence, Business Services, Digital Infrastructure, Edtech, Financial Services, Fintech, Media, Retail/E-commerce, and Software, all benefiting from technological advancements .

In terms of operational outlook, 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 deferred underwriting fee of $8,750,000 is payable upon the consummation of the initial business combination . An amendment to the Underwriting Agreement on August 5, 2025, deferred the commencement of the remaining $1,000,000 in cash underwriting payments to the underwriters until September 1, 2026, payable in equal monthly amounts over three months .

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 . Any remaining proceeds will be used as working capital to finance the operations of the target business, make other acquisitions, and pursue 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 convertible into private placement units at $10.00 per unit at the lender's option, including up to $750,000 from Inflection Point Fund .

Risk Factors

The Company faces several material risks, including the potential for its Public Shareholders to have limited opportunities to influence investment decisions regarding a business combination, as their primary recourse may be limited to exercising redemption rights . A significant risk is the high redemption rate, with 22,550,551 Public Shares, or approximately 90.3% of outstanding Public Shares, having been redeemed in connection with the Proposed Business Combination . This high redemption rate could make the Company's financial condition unattractive to potential business combination targets, potentially hindering its ability to meet minimum cash conditions in future agreements, and may necessitate dilutive equity issuances or higher-than-desirable debt to secure financing . The Company operates as a blank check company with no operating history or revenues, meaning investors have no basis to evaluate its ability to achieve its business objective . There is also a risk that the Company could be deemed an investment company under the Investment Company Act, which would impose burdensome compliance requirements and restrict its activities, potentially forcing liquidation . Geopolitical unrest, pandemic outbreaks, and volatility in debt and equity markets could materially adversely affect the Company's search for a target business or the business of any acquired entity . Changes in international trade policies, tariffs, and treaties could also negatively impact the Company's ability to complete a business combination, especially with targets that have international supply chains or export markets . If the Company fails to complete an initial business combination by November 4, 2026, it would cease operations, redeem Public Shares at a pro rata portion of the Trust Account funds (approximately $10.49 per share as of December 31, 2025), and liquidate, rendering the Public Rights worthless . The Sponsor, officers, and directors have conflicts of interest due to their ownership of Founder Shares and Private Placement Units, which would be worthless if a business combination is not completed, potentially influencing their decisions . Furthermore, third-party claims against the Company could reduce the funds in the Trust Account, potentially leading to a per-share redemption amount less than $10.00 .

Management Priorities

Management's message to shareholders emphasizes the Company's focus on completing the Proposed Business Combination with Merlin Labs, Inc., which was approved by shareholders 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 co-founders, management team, and Sponsor to identify attractive business combination opportunities, particularly within the technology industry and sectors undergoing technological transformation . Management also stresses the importance of generating attractive returns for shareholders and enhancing value through improving the operational performance of the acquired company . The Company's management team has undergone changes, with Michael Blitzer appointed President and Chief Executive Officer in July 2025, and he is expected to serve as a director of New Merlin post-combination . Management acknowledges the significant redemption rate of 90.3% of Public Shares in connection with the Proposed Business Combination, and the associated risks this presents for future capital structure optimization .

View Source Annual Report on SEC.gov ↗

References

  1. [1] Item 1, Business — Overview
  2. [2] Item 7, MD&A — Results of Operations
  3. [3] Item 1, Business — Business Strategy
  4. [4] Item 1, Business — Business Strategy
  5. [5] Item 1, Business — The Initial Public Offering
  6. [6] Item 1, Business — The Initial Public Offering
  7. [7] Item 1, Business — The Initial Public Offering
  8. [8] Item 5, Use of Proceeds from the IPO
  9. [9] Item 1, Business — The Initial Public Offering
  10. [10] Item 7, MD&A — Results of Operations
  11. [11] Item 7, MD&A — Results of Operations
  12. [12] Item 7, MD&A — Results of Operations
  13. [13] Item 7, MD&A — Liquidity and Capital Resources
  14. [14] Item 8, Consolidated Balance Sheets
  15. [15] Item 8, Consolidated Balance Sheets
  16. [16] Item 8, Consolidated Balance Sheets
  17. [17] Item 7, MD&A — Results of Operations
  18. [18] Item 7, MD&A — Results of Operations
  19. [19] Item 7, MD&A — Results of Operations
  20. [20] Item 7, MD&A — Results of Operations
  21. [21] Item 7, MD&A — Liquidity and Capital Resources
  22. [22] Item 1, Business — Name Change Proposal and Article 50.5 Amendment Proposal
  23. [23] Item 1, Business — Management Team Changes
  24. [24] Item 1, Business — Proposed Business Combination with Merlin
  25. [25] Item 1, Business — Proposed Business Combination with Merlin
  26. [26] Item 1, Business — The Merger and Consideration
  27. [27] Item 1, Business — The Merger and Consideration
  28. [28] Item 1, Business — The Merger and Consideration
  29. [29] Item 1, Business — Proposed Business Combination with Merlin
  30. [30] 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.
  31. [31] Item 1, Business — Proposed Business Combination with Merlin
  32. [32] Item 1, Business — Proposed Business Combination with Merlin
  33. [33] Item 1, Business — Proposed Business Combination with Merlin
  34. [34] Item 1, Business — Business Strategy
  35. [35] Item 1, Business — Business Strategy
  36. [36] Item 7, MD&A — Results of Operations
  37. [37] Item 5, Use of Proceeds from the IPO
  38. [38] Item 7, MD&A — Contractual Obligations
  39. [39] Item 7, MD&A — Liquidity and Capital Resources
  40. [40] Item 7, MD&A — Liquidity and Capital Resources
  41. [41] Item 7, MD&A — Liquidity and Capital Resources
  42. [42] Item 1A, Risk Factors — Our Public Shareholders’ only opportunity to affect the investment decision regarding a potential Business Combination may be limited to the exercise of their right to redeem their Public Shares from us for cash.
  43. [43] 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.
  44. [44] Item 1A, Risk Factors — The ability of our Public Shareholders to redeem their Public Shares for cash may make our financial condition unattractive to potential business combination targets, which may make it difficult for us to enter into an initial business combination with a target.
  45. [45] Item 1A, Risk Factors — We are a blank check company with no operating history and no revenues, and you have no basis on which to evaluate our ability to achieve our business objective.
  46. [46] Item 1A, Risk Factors — If we are deemed to be an investment company under the Investment Company Act, we may be required to institute burdensome compliance requirements and our activities may be restricted, which may make it difficult for us to complete the Proposed Business Combination or force us to abandon our efforts to complete an initial business combination.
  47. [47] 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.
  48. [48] 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.
  49. [49] 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.
  50. [50] Item 1A, Risk Factors — Since our Sponsor, officers and directors, any other holder of our Founder Shares may lose their entire investment in us if our initial business combination is not completed (other than with respect to Public Shares they may acquire during or after this offering), a conflict of interest may arise in determining whether a particular target business is appropriate for our initial business combination.
  51. [51] 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.
  52. [52] Item 1, Business — Proposed Business Combination with Merlin
  53. [53] Item 1, Business — Business Strategy
  54. [54] Item 1, Business — Business Strategy
  55. [55] Item 1, Business — Management Team Changes
  56. [56] 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.

Analysis on 5/22/2026