PAPAYA GROWTH OPPORTUNITY CORP. I Quarterly Report on Form 10-Q
PAPAYA GROWTH OPPORTUNITY CORP. I Quarterly Report on Form 10-Q
Papaya Growth Opportunity Corp. I (the “Company”) filed its quarterly report on Form 10-Q for the period ended March 31, 2025. The Company reported a net loss of $1.4 million for the three months ended March 31, 2025, compared to a net loss of $1.1 million for the same period in 2024. As of March 31, 2025, the Company had a total of $1.3 million in cash and cash equivalents, and a total stockholders’ deficit of $14.4 million. The Company’s unaudited condensed balance sheet as of March 31, 2025, showed total assets of $1.3 million and total liabilities of $15.7 million. The Company’s unaudited condensed statements of operations for the three months ended March 31, 2025, showed revenue of $0.1 million and operating expenses of $2.5 million. The Company’s management’s discussion and analysis of financial condition and results of operations highlights the Company’s focus on identifying and evaluating potential business opportunities and its efforts to conserve cash and reduce expenses.
Overview
Papaya is a blank check company formed in October 2021 for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses or entities. The company has not engaged in any operations or generated any revenue to date, and its only activities have been organizational and preparing for its initial public offering (IPO). Papaya intends to focus on industries that complement its management team’s background and to capitalize on their ability to identify and acquire a business.
Recent Developments
On April 21, 2025, Papaya announced the execution of a business combination agreement with Forbes & Manhattan Resources Inc. (F&M), a company incorporated in Ontario, Canada. Under the agreement, Papaya will combine with a subsidiary of F&M in a series of transactions that will result in Papaya becoming a direct subsidiary of F&M.
On September 26, 2025, the agreement was amended, with F&M assigning its rights and obligations to 2744026 Alberta Ltd., a corporation incorporated in Alberta, Canada. The material terms of the business combination otherwise remain unchanged.
On November 11, 2025, Papaya’s stockholders approved amendments to extend the deadline to complete a business combination to December 19, 2026.
Results of Operations
Papaya has not engaged in any operations or generated any revenue to date. Its only activities have been organizational, preparing for the IPO, and identifying a target company for a business combination. The company generates non-operating income in the form of interest on the cash held in its trust account.
For the three months ended March 31, 2025, Papaya had a net loss of $881,821, driven by $894,550 in operating expenses, primarily general and administrative expenses. The company also incurred $18,512 in interest on the cash held in the trust account and $5,783 in income tax expense.
For the three months ended March 31, 2024, Papaya had a net loss of $395,973, driven by $546,717 in operating expenses, partially offset by $196,744 in interest income and a $11,589 Delaware franchise tax benefit. The company also incurred $46,000 in income tax expense.
Liquidity and Capital Resources
As of March 31, 2025, Papaya had $6,252 in cash held outside of the trust account. The company intends to use these funds primarily to identify and evaluate target businesses, perform due diligence, and structure, negotiate and complete a business combination.
Papaya has received loans from its sponsor and affiliates to fund its operations, including a $2.8 million promissory note issued in April 2023 and a $1.2 million promissory note issued in February 2024. These loans are non-interest bearing and will be due upon the completion of a business combination.
The company will need to raise additional capital through loans or investments to meet its working capital needs. If Papaya is unable to obtain additional financing, it may be required to take measures to conserve liquidity, which could include curtailing operations, suspending the pursuit of a potential transaction, and reducing overhead expenses. These conditions raise substantial doubt about the company’s ability to continue as a going concern.
Related Party Transactions
Papaya has engaged in various related party transactions, including:
- Founder Shares: The company issued founder shares to its initial stockholders.
- Related Party Loans: The company has received loans from its sponsor and affiliates.
- Support Services: The company has received support services from its sponsor and affiliates.
- Registration Rights: The company has granted registration rights to certain security holders.
- Underwriting Agreement: The company has an underwriting agreement with Cantor Fitzgerald & Co. and Cohen & Company Capital Markets, who have agreed to waive their entitlement to deferred underwriting commissions.
Critical Accounting Policies
Papaya has identified the following critical accounting policies:
- Warrant Liabilities: The company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrants’ specific terms.
- Common Stock Subject to Possible Redemption: The company accounts for common stock subject to possible redemption in accordance with the guidance in ASC 480.
- Net Income (Loss) Per Share of Common Stock: The company historically applied the two-class method in calculating earnings per share.
Outlook
Papaya continues to pursue its plans to complete a business combination, though it cannot assure that these plans will be successful. The company will need to raise additional capital to fund its operations and complete a transaction. If Papaya is unable to obtain sufficient financing, it may be required to take measures to conserve liquidity, which could impact its ability to continue as a going concern.