Velos Acquisition I

Velos' ability to complete a value-accretive business combination depends on the ~ $308M recorded as assets remaining available for a transaction and not being substantially reduced by shareholder redemptions. If the trust assets remain intact, Velos can finance an attractive combination and preserve upside for continuing shareholders; if large redemptions erode those assets, the SPAC loses deal flexibility and equity upside.

Velos will continue to incur operating losses and negative operating cash flow until it completes a business combination, which will consume sponsor liquidity or reduce transaction capital if not reimbursed by the sponsor. Persistent pre-combination cash burn reduces the capital available for a deal and increases the need for sponsor support or for the SPAC to accept smaller/less attractive targets.

The positive GAAP net income reported in 2025 does not reflect underlying operating strength but instead arises from non-operating accounting items; net income is therefore a poor proxy for the SPAC's core economics. Investors who focus on headline net income risk overestimating the SPAC's operational health; the true pre-deal economics are shown by operating income and cash flow.

Velos' negative stockholders' equity (≈ -$19.4M) reflects liabilities and accounting for redeemable instruments; if liabilities rise or assets are consumed, the equity deficit could indicate increased dilution risk or require sponsor capital to stabilize the balance sheet. A growing equity deficit signals structural financing complexity that can force dilution, complicate a deal, or require sponsor contributions, all of which reduce continuing shareholders' upside.