10-K: TLGY Acquisition Corp. Reports 2025 Net Loss, StablecoinX Merger Progresses Amid Liquidity Concerns

TLGY Acquisition Corporation reported a significant net loss for 2025, driven by warrant revaluation, while continuing efforts to finalize its business combination with StablecoinX Assets Inc. by April 2026, despite substantial liquidity challenges and a going concern warning.

Summary

• TLGY Acquisition Corporation, a blank check company, reported a net loss of $14,782,020 for the year ended December 31, 2025, a significant decline from a net income of $1,986,072 in 2024.
• The company entered into a definitive Business Combination Agreement with StablecoinX Assets Inc. (SC Assets) and StablecoinX Inc. on July 21, 2025, which was amended on January 21, 2026. This merger aims to make StablecoinX a publicly traded company, with TLGY and SC Assets becoming its wholly-owned subsidiaries.
• SC Assets was founded by Young Cho, TLGY's current Chief Executive Officer, and Edward Chen, managing member of the current sponsors, indicating a related-party transaction.
• TLGY was delisted from Nasdaq on December 9, 2024, due to not completing a business combination within 36 months of its IPO, and its securities now trade on the OTC Pink market.
• The company terminated a previous merger agreement with Verde Bioresins, Inc. on March 12, 2024.
• Shareholders have approved multiple extensions to the business combination deadline, with the current deadline set for April 16, 2026.
• Significant public share redemptions occurred in connection with extension votes: 15,681,818 shares in February 2023 ($10.40/share), 1,395,317 shares in October 2023 ($10.96/share), 2,205,658 shares in April 2024 ($11.38/share), and 3,227,320 shares in April 2025 ($12.12/share).
• Cash and investments held in the Trust Account decreased from $44,332,605 at December 31, 2024, to $6,344,805 at December 31, 2025, primarily due to these redemptions.
• The company reported a working capital deficit of $5,991,280 as of December 31, 2025, and its auditor raised substantial doubt about its ability to continue as a going concern.
• A significant portion of the 2025 net loss was attributed to a $14,336,209 change in the fair value of derivative warrant liabilities.

Sentiment

Score: 2

Explanation: StockSavvy.ai views this as highly negative due to the significant net loss, substantial reduction in trust account assets, severe liquidity issues leading to a going concern warning, and the delisting from Nasdaq, all indicating significant operational and financial distress for the SPAC.

Positives

• A definitive Business Combination Agreement with StablecoinX Assets Inc. and StablecoinX Inc. has been secured, providing a potential path to completing a merger.
• Mizuho Securities USA LLC waived $8,650,000 in deferred underwriting fees and forfeited 300,300 founder shares, reducing a significant future liability for the company.
• The company generated interest income on funds held in the Trust Account of $725,255 in 2025 and $2,598,427 in 2024.
• Debt forgiveness amounted to $127,768 in 2025 and $623,776 in 2024, improving the financial position.
• Management concluded that internal control over financial reporting was effective as of December 31, 2025.

Negatives

• Reported a net loss of $14,782,020 for the year ended December 31, 2025, a substantial deterioration from the net income of $1,986,072 in 2024.
• Cash and investments held in the Trust Account significantly decreased from $44,332,605 at December 31, 2024, to $6,344,805 at December 31, 2025, primarily due to high shareholder redemptions.
• The company has a working capital deficit of $5,991,280 as of December 31, 2025.
• The auditor's report includes a 'Going Concern' paragraph, indicating substantial doubt about the company's ability to continue operations without additional funding or a successful business combination by April 16, 2026.
• Delisted from Nasdaq on December 9, 2024, and now trades on the less liquid OTC Pink market, potentially impacting trading volume and share price.
• The previous merger agreement with Verde Bioresins, Inc. was terminated on March 12, 2024, after the target company exercised its right to terminate.
• A significant loss of $14,336,209 was recognized from the change in fair value of derivative warrant liabilities in 2025.

Risks

• Inability to complete the initial business combination with StablecoinX Assets Inc. and StablecoinX Inc., or any other initial business combination, within the prescribed timeframe (April 16, 2026).
• Expectations around the performance of a prospective target business or businesses may not be realized.
• Difficulty in retaining or recruiting required officers, key employees, or directors following the initial business combination.
• Officers and directors allocating their time to other businesses and potentially having conflicts of interest.
• Potential incentive to consummate a business combination with an acquisition target that subsequently declines in value or is unprofitable for public investors due to the low initial price of founder shares.
• Inability to obtain sufficient additional financing to complete the initial business combination or reduce the number of shareholders requesting redemption.
• Public shareholders may not be given the opportunity to choose the initial business combination target or to vote on the initial business combination.
• Trust account funds may not be fully protected against third-party claims or bankruptcy.
• An active market for public securities may not develop, leading to limited liquidity and trading, especially after delisting from Nasdaq to OTC Pink.
• The availability of funds from interest income on the trust account balance may be insufficient to operate the business prior to the initial business combination.
• Financial performance following a business combination with an entity may be negatively affected by their lack of an established record of revenue, cash flows, earnings, and experienced management.
• Changes in laws or regulations, or a failure to comply with any laws and regulations, may adversely affect the business.
• Risk of being deemed an investment company under the Investment Company Act, which could impose burdensome compliance requirements and restrict activities.
• Expectation to incur significant transaction and transition costs in connection with the initial business combination, with insufficient cash available to pay such costs if the combination fails.
• Cyber incidents or attacks directed at the company or third parties could result in information theft, data corruption, operational disruption, and/or financial loss, particularly as an early-stage company with limited data security investments.

Future Outlook

The company intends to complete its initial business combination with StablecoinX Assets Inc. and StablecoinX Inc. by April 16, 2026. If the business combination is not consummated by this date, the company will cease operations, redeem its public shares, and liquidate. The company may seek additional financing through private offerings of debt or equity securities to complete the business combination, potentially using these proceeds instead of the trust account funds.

Management Comments

• Our CEO and CFO concluded that, as of December 31, 2025, our disclosure controls and procedures were effective.
• Our management is responsible for establishing and maintaining adequate internal control over financial reporting... Based on our evaluation, we concluded that our internal control over financial reporting is effective as of December 31, 2025.

Industry Context

StockSavvy.ai notes that the SPAC market has faced increasing scrutiny and high redemption rates, making it challenging for blank check companies to complete mergers. The delisting from Nasdaq to OTC Pink highlights the difficulties faced by SPACs that fail to complete a business combination within the initial timeframe. The proposed merger with StablecoinX, a technology company, indicates a pivot towards the digital asset space, a sector that has seen both rapid growth and significant volatility, but also regulatory uncertainty and market fluctuations.

Comparison to Industry Standards

• The high redemption rates (e.g., 15,681,818 shares in Feb 2023, 3,227,320 shares in April 2025) are indicative of broader SPAC market trends where public shareholders often redeem their shares if a desirable target is not found or if the extension terms are unfavorable, contrasting with successful SPACs like Gores Holdings VI (GHVI) which completed a merger with Ardagh Metal Packaging with lower redemptions.
• The delisting from Nasdaq to OTC Pink is a common outcome for SPACs that fail to complete a business combination within the 36-month window, unlike successful SPACs such as DraftKings (DKNG) which maintained its listing post-merger with Diamond Eagle Acquisition Corp.
• The significant net loss in 2025, primarily due to warrant revaluation, is a common accounting impact for SPACs holding warrants as liabilities, especially with market volatility, similar to other SPACs that have seen their warrant valuations fluctuate significantly prior to a de-SPAC transaction.

Management Changes

Corporate Governance

Legal Proceedings

• There is no material litigation, arbitration, or governmental proceeding currently pending against the company or any members of its management team in their capacity as such.

Related Party Transactions

• The former sponsor received 5,750,000 founder shares for $25,000 on June 17, 2021.
• Current sponsors purchased 3,542,305 founder shares and 3,940,825 private placement warrants from the former sponsor and other investors for an aggregate price of $1.00 on June 19, 2024.
• Sponsors converted all Class B ordinary shares to Class A ordinary shares on April 18, 2025.
• Private Placement Warrants were sold to the former sponsor for $1.00 per warrant, totaling $11,259,500.
• The Administrative Services Agreement with the former sponsor, which provided $15,000 per month for office space and support, was terminated on June 19, 2024.
• Working Capital Loans from sponsors or affiliates had an outstanding balance of $3,347,359 as of December 31, 2025.
• Time Extension Funding Loans from sponsors or affiliates had an outstanding balance of $2,541,966 as of December 31, 2025.
• SC Assets, the target for the proposed business combination, was founded by Young Cho (TLGY's CEO) and Edward Chen (managing member of current sponsors), indicating a significant related-party interest in the merger.
• The Amended and Restated Sponsor Support Agreement stipulates that TLGY Insiders will receive 3% of StablecoinX Class A Common Stock at Closing, removing a previous earnout mechanism.

Stakeholder Impact

• Shareholders: Public shareholders have faced significant dilution and redemptions, reducing their stake and liquidity. Those who redeemed received increasing per-share amounts ($10.40 to $12.12). Remaining public shareholders face high uncertainty regarding the StablecoinX merger and the potential for liquidation if it fails. Founder shareholders and sponsors, who have provided significant loans and control a substantial portion of the company, stand to benefit significantly if the business combination is successful.
• Employees: The company currently has only two executive officers and no full-time employees prior to a business combination, so direct employee impact is minimal. Post-merger, the combined entity's employees would be impacted by the new corporate structure and strategic direction.
• Creditors: The trust account is generally protected from third-party claims, but there is a risk if waivers are unenforceable or in the event of bankruptcy. The sponsor has agreed to indemnify the trust account for certain claims, offering some protection.
• Management: Current management (CEO, CFO, Directors) are actively involved in the proposed business combination and have potential conflicts of interest due to their involvement with the target company and other entities. Their compensation post-merger is subject to future determination.

Next Steps

• Complete the business combination with StablecoinX Assets Inc. and StablecoinX Inc. by the extended deadline of April 16, 2026.
• If the business combination is not completed by April 16, 2026, the company will cease operations, redeem public shares, and liquidate.
• Potentially seek additional financing to support the completion of the initial business combination.
• File a Current Report on Form 8-K prior to the extraordinary general meeting of shareholders for an initial business combination, disclosing details of any public share purchases by affiliates.

Key Dates

Recommendation

The company is in a precarious financial position, marked by a substantial net loss, a significant working capital deficit, and an explicit 'Going Concern' warning from its auditor. The delisting from Nasdaq to the illiquid OTC Pink market severely limits trading opportunities and investor confidence. While a business combination with StablecoinX is proposed, the history of failed mergers, high redemption rates, and the imminent liquidation deadline of April 16, 2026, create extreme uncertainty and a high risk of total capital loss. The related-party nature of the target company also introduces additional governance concerns. Given these severe risks and the company's distressed state, a 'strong sell' recommendation is warranted for all investors.

Keywords

SPAC, Blank Check Company, StablecoinX, Business Combination, Merger, SEC Filing, 10-K, Financial Report, Liquidity, Going Concern, Nasdaq Delisting, OTC Pink, Warrant Liabilities, Shareholder Redemptions, Corporate Governance, Risk Factors