Cal Redwood Acquisition Corp. Liquidation Value

Cal Redwood Acquisition Corp. (CRAQ) is a Cayman Islands blank check SPAC that completed its IPO on May 27, 2025, raising $230M gross from 23,000,000 Class A units at $10.00 per unit. This is an inception-period 10-K covering January 7, 2025 through December 31, 2025. No prior annual balance sheet exists for comparison; the prior filing provided is an amended version of the same annual period with identical financial figures.

Under a liquidation lens, the balance sheet is structurally straightforward but the recovery posture to non-redeemable equity is deeply negative. Total assets of $236.9M consist almost entirely of $235.6M in trust (U.S. Treasury Bills, Level 1), $1.1M operating cash, and $140K in prepaid items. Under the liquidation framework, trust assets at face value carry effectively 100% recovery given their liquid, government-backed nature and grantor trust structure; however, those proceeds are legally encumbered to redeem public shareholders first.

The liability stack that matters under a liquidation scenario: $9.38M total liabilities, dominated by a $9.2M deferred underwriting fee payable (tagged as DeferredCompensationLiabilityClassifiedNoncurrent). This fee is contingent — it is only payable upon completion of a business combination. In a pure wind-down scenario where no deal closes, public shareholders redeem from trust at $10.24/share (aggregate $235.6M), and the deferred underwriting fee is not triggered. However, the deferred fee must be treated as a face-value liability under the liquidation lens as instructed, producing total liabilities of $9.38M.

Recovery to equity: Trust ($235.6M, 100% recovery) + operating cash ($1.1M, 100%) minus total liabilities at face value ($9.38M) minus redemption obligation to public shareholders ($235.6M, classified as temporary equity / mezzanine) = approximately negative $8.14M, consistent with the reported stockholders' deficit of ($8.14M). The MFFAIS CLV/LLV/OLV of $917K reflects only the outside-trust working capital surplus net of current liabilities ($1.02M working capital surplus per the filing), discounting the trust as unavailable to non-redeemable equity — which is the correct framing. The deferred underwriting fee ($9.2M) is the principal driver of the deficit, as it was charged against APIC and accumulated deficit at IPO through accretion accounting. No PP&E, inventory, goodwill, or intangibles exist. Zero operating revenues. Business combination deadline is May 27, 2027.