Overview

NETD is a blank check company formed in the Cayman Islands on April 12, 2023, with the purpose of merging with or acquiring one or more businesses. The company completed its initial public offering (IPO) on July 18, 2023, raising $305 million by selling 30.5 million units at $10 per unit. NETD also sold 9.54 million private placement warrants to its sponsor for $9.54 million.

Financial Performance

For the three months ended March 31, 2025, NETD reported net income of $876,496, which consisted of $3.33 million in interest income on the trust account investments, offset by $2.45 million in operating costs. For the three months ended March 31, 2024, the company had net income of $3.8 million, with $4.06 million in interest income and $265,478 in operating costs.

NETD has not yet engaged in any operations or generated any revenue, as it is still seeking to identify and complete an initial business combination. The company’s only activities have been organizational, preparing for the IPO, and searching for a suitable target company.

Liquidity and Capital Resources

As of March 31, 2025, NETD had $335.1 million held in its trust account, including $27.1 million in interest income. The company intends to use these funds to complete its initial business combination. NETD also had $1.5 million in cash held outside the trust account, which it plans to use for identifying and evaluating potential target companies, as well as transaction costs.

The company may need to obtain additional financing, either to complete the initial business combination or if it is required to redeem a significant number of public shares. NETD’s sponsor or officers and directors may provide working capital loans of up to $1.5 million, which could be convertible into private placement warrants.

NETD has determined that the potential need for mandatory liquidation if a business combination does not occur by July 18, 2025 raises substantial doubt about its ability to continue as a going concern. However, the financial statements do not include any adjustments related to this uncertainty.

Contractual Obligations

NETD’s main contractual obligations include:

• $15,000 per month for office space, utilities, and administrative support to an affiliate of the sponsor
• $6.1 million in underwriting discounts paid upon the IPO closing
• $8.0 million in deferred underwriting fees payable upon completion of the initial business combination

Critical Accounting Estimates

The company’s critical accounting estimates include:

• Valuation of cash and marketable securities held in the trust account
• Accounting for derivative financial instruments, such as the underwriter’s over-allotment option
• Classification of warrants as either equity or liability instruments

Overall, NETD is a newly formed blank check company that has not yet completed an initial business combination. Its financial performance to date has been limited to interest income on the trust account investments and operating expenses. The company’s ability to continue as a going concern depends on its successful completion of a business combination by the July 2025 deadline.