Armada Acquisition Corp. III Liquidation Value

Armada Acquisition Corp. III (AACI) is a Cayman Islands blank check SPAC incorporated September 19, 2025, that completed its IPO on February 19, 2026, raising $248.5M gross from 24,850,000 public units at $10.00 per unit. The liquidation analysis for this filing is structurally atypical relative to operating companies: virtually all recoverable value resides in the Trust Account, which is segregated and legally restricted. Under a SPAC-specific liquidation lens, the recovery posture for non-redeemable equity (founders and private placement holders) is deeply negative, while public shareholders hold a contractual redemption right that approximates par recovery at $10.03 per share. Total assets at March 31, 2026 are $250.4M, of which $249.3M (99.5%) is AssetsHeldInTrust — invested in U.S. Treasury bills and classified as Level 1. This asset receives a 100% recovery haircut under the liquidation lens given it is essentially cash-equivalent government securities. Outside the Trust, the company holds $903K in operating cash and $120K in prepaid expenses, totaling approximately $1.0M in current assets outside the Trust. Against this, reported liabilities total $10.3M: $332K current (accrued expenses, zero notes payable after IPO repayment) plus $9.94M deferred underwriting fee payable — a non-cash obligation that does NOT extinguish on a winding-up that fails to complete a business combination. The deferred underwriting fee is payable only upon a successful business combination, but under a liquidation scenario (no deal completed within 18 months), the filing states this fee would not be paid. However, at face value as disclosed, this liability sits at $9.94M. Shareholders' deficit stands at ($9.15M) versus ($28K) at December 31, 2025 — the swing is driven almost entirely by $19.9M accretion of Class A redeemable shares to redemption value, partially offset by $6.7M private placement proceeds and $3.8M warrant fair value credit to APIC. The MFFAIS-reported liquidation value of $1.47M for all three metrics (CLV/LLV/OLV) reflects only the operating cash and current assets outside the Trust, which is directionally consistent with the filing. Recovery to non-redeemable equity in a no-deal liquidation scenario: Trust distributes to public shareholders at approximately $10.03/share; founders and private placement holders receive zero from Trust (contractually waived). Operating assets outside Trust ($1.0M current assets) net of current liabilities ($332K) yield approximately $700K residual — consistent with the reported working capital of $703K — against which no further claim exists on the Trust for non-redeemable holders. The 18-month business combination window runs to approximately August 19, 2027. Filing does not separately XBRL-tag the deferred underwriting fee payable as a distinct balance sheet line item, though it is disclosed in MD&A and Note 5 at $9.94M.