Form 4: Yorkville Acquisition Issues Convertible Note to Sponsor

Yorkville Acquisition Corp. issued a $250,000 convertible promissory note to its sponsor for additional working capital, potentially converting into units at $10 each.

Summary

• Yorkville Acquisition Corp. (MCGA) issued a convertible promissory note, referred to as the "Working Capital Note," in the principal amount of $250,000.00.
• The note was issued to Yorkville Acquisition Sponsor, LLC (the "Sponsor") on February 11, 2026, to provide additional working capital.
• The principal balance does not accrue interest and is payable upon the earlier of the consummation of the initial business combination or the winding up of the Issuer.
• The Sponsor has the option to convert all or a portion of the principal balance into units upon the consummation of the initial business combination.
• Conversion will occur at a price of $10.00 per unit, rounded down to the nearest whole number.
• Each unit consists of one Class A ordinary share and one-third of one warrant to purchase one Class A ordinary share at an exercise price of $11.50 per share.
• Warrants are exercisable 30 days after the business combination and expire 5 years after completion or earlier upon redemption or liquidation.
• Mark Angelo, a Director and 10% Owner, is deemed to have beneficial ownership due to his role with entities managing the Sponsor, but disclaims beneficial ownership except for his pecuniary interest.

Sentiment

Score: 6

Explanation: StockSavvy.ai views this as a moderately positive development, as it secures necessary working capital for the SPAC's operations without immediate interest burden, which is a standard and expected step in the SPAC lifecycle.

Positives

• Provides Yorkville Acquisition Corp. with $250,000 in additional working capital.
• The note does not accrue interest, reducing immediate financial burden on the Issuer.

Negatives

• Potential future dilution for existing shareholders if the convertible note is exercised into units.
• The need for additional working capital could indicate ongoing operational expenses or delays in securing a business combination.

Risks

• Dilution risk for existing shareholders if the Sponsor converts the note into units.
• The success of the investment is contingent on the consummation of an initial business combination.
• Warrants have an exercise price of $11.50, which may not be reached or maintained.

Future Outlook

The note's terms are tied to the consummation of the Issuer's initial business combination, indicating that the company is actively working towards this goal. The conversion option provides a mechanism for the Sponsor to participate in the combined entity.

Management Comments

• Mr. Angelo disclaims any beneficial ownership of the reported securities, except to the extent of his pecuniary interest therein.

Industry Context

StockSavvy.ai notes that the issuance of convertible promissory notes for working capital is a common financing mechanism for Special Purpose Acquisition Companies (SPACs) as they approach or seek to complete a business combination. This allows the sponsor to provide necessary funds to cover operational expenses without immediately diluting public shareholders, while retaining an option for future equity participation.

Comparison to Industry Standards

• The $10.00 conversion price per unit is standard for SPACs, often aligning with the initial public offering price of units.
• The warrant structure (one-third of one warrant per share, $11.50 exercise price, 5-year expiry) is typical for SPAC private placement warrants, similar to those seen in SPACs like Gores Holdings VI (GHVI) or Churchill Capital Corp IV (CCIV) prior to their business combinations.
• The provision of working capital by the sponsor is a common practice to support the SPAC's operations and search for a target company, as observed in numerous SPAC filings.

Related Party Transactions

• The Issuer (Yorkville Acquisition Corp.) issued a $250,000 convertible promissory note to its Sponsor (Yorkville Acquisition Sponsor, LLC).
• Mark Angelo, a Director and 10% Owner of the Issuer, is also connected to the Sponsor through his roles at Yorkville Advisors Global, LP and Yorkville Advisors Global II, LLC, which manage and are the General Partner of the Sponsor, respectively.

Stakeholder Impact

• Shareholders: Potential for future dilution if the convertible note is converted into units.
• Sponsor (Yorkville Acquisition Sponsor, LLC): Provides additional capital to the Issuer and holds the option to convert the note into equity, potentially benefiting from the future performance of the combined entity.

Next Steps

• Consummation of the Issuer's initial business combination.
• Potential election by the Sponsor to convert the principal balance of the note into units upon business combination.
• Warrants becoming exercisable 30 days after the completion of the initial business combination.

Key Dates

Keywords

SPAC, convertible note, working capital, beneficial ownership, Form 4, Yorkville Acquisition Corp, MCGA, private placement units, warrants