Overview

Charlton Aria Acquisition Corporation (the “Company”) is a blank check company incorporated in the Cayman Islands on March 22, 2024. The Company was formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, recapitalization, reorganization or similar business combination with one or more businesses or entities (the “initial business combination”).

Initial Public Offering

On October 25, 2024, the Company consummated its initial public offering (the “IPO”) of 7,500,000 units (the “Public Units”), each Public Unit consisting of one Class A ordinary share and one right. The Public Units were sold at a price of $10.00 per unit, generating gross proceeds of $75,000,000. Simultaneously, the Company completed a private placement (the “Private Placement”) with its sponsor, ST Sponsor II Limited, of 240,000 units (the “Private Placement Units”) at a price of $10.00 per unit, generating gross proceeds of $2,400,000.

The net proceeds from the IPO and the Private Placement, totaling $75,187,500, were deposited into a trust account for the benefit of the Company’s public shareholders. The Company also issued 75,000 Class A ordinary shares to the representative of the underwriters as part of the underwriting compensation.

The underwriters were granted a 45-day option to purchase up to an additional 1,125,000 units to cover over-allotments, if any. On November 19, 2024, the underwriters exercised the over-allotment option in part and purchased 1,000,000 units, generating an additional $10,000,000 in gross proceeds. Simultaneously, the Company completed a private placement sale of 15,000 additional Private Placement Units to the sponsor, generating $150,000 in gross proceeds.

Since the IPO, the Company’s sole business activity has been identifying and evaluating suitable acquisition transaction candidates and preparing for the consummation of an initial business combination. The Company has not generated any revenue and has incurred losses since inception from incurring formation and operating costs.

Results of Operations

For the period from March 22, 2024 (inception) to December 31, 2024, the Company had a net income of $266,838, which consisted of:

The Company’s net income was primarily driven by the income earned on the investments held in the trust account, as well as the change in fair value of the over-allotment option liability, which was partially offset by the formation and operating costs and stock-based compensation expense.

Liquidity and Capital Resources

As of December 31, 2024, the Company had cash of $447,419 and working capital of $407,150. The Company’s liquidity needs up to December 31, 2024 had been satisfied through the proceeds from the IPO, Private Placement, and a payment from the sponsor to cover certain offering costs.

For the period from March 22, 2024 (inception) to December 31, 2024, the Company used $171,290 of cash in operating activities, $85,212,500 of cash in investing activities (for the purchase of investments held in the trust account), and received $85,831,209 of cash from financing activities (primarily from the proceeds of the IPO and Private Placement).

The Company intends to use the funds held outside the trust account to identify and evaluate target businesses, perform due diligence, and negotiate and complete an initial business combination. The Company believes it will not need to raise additional funds to meet the expenditures required for operating its business, but may need to obtain additional financing to complete an initial business combination or if it becomes obligated to redeem a significant number of its public shares.

Contractual Obligations

The Company has entered into several contractual obligations, including:

1. Registration Rights Agreement: The holders of the founder shares and Private Placement Units (including any Working Capital Units) are entitled to registration rights.
2. Underwriting Agreement: The underwriters received a cash underwriting discount of $0.15 per Public Unit, as well as a deferred fee of $0.20 per Public Unit, payable upon the consummation of an initial business combination.

Critical Accounting Estimates and Recent Accounting Pronouncements

The Company did not identify any critical accounting estimates. The Company adopted ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, for the year ended December 31, 2024, which did not have a material effect on its financial statements.