Executive Summary / Key Takeaways

• Merger Arbitrage Meets Going Concern Risk: Pelican Acquisition's definitive $215 million merger agreement with Greenland Energy creates a potential value unlock, but management's explicit warning about "substantial doubt" regarding the company's ability to continue operations introduces a binary outcome where success means a new public company and failure likely means liquidation at trust value.

• Scale Disadvantage in a Crowded SPAC Field: With only $75 million raised in its May 2025 IPO, PELI operates at roughly one-third the firepower of direct competitors like Archimedes Tech SPAC Partners II ($230 million) and Art Technology Acquisition ($220 million), severely limiting its target options and increasing redemption risk in a competitive deal environment.

• Technology Sector Pivot Through Mining Assets: The announced merger shifts PELI's stated technology focus toward Greenland Energy's rare earth exploration business, positioning the combined entity to capitalize on critical mineral supply chain dynamics for tech hardware, but raising questions about strategic coherence and sector expertise.

• Sponsor Inexperience and Time Pressure: PELI's sponsor lacks the track record of competitors like Archimedes' successful SoundHound AI merger, while the August 27, 2026 hard deadline leaves minimal margin for error in completing a complex cross-border transaction involving Cayman-to-Texas domestication.

• Valuation Anchored to Trust Value: Trading at $10.15 versus a $10.00 IPO price, PELI's market cap of $121.79 million reflects modest optionality premium over its $86.25 million trust account, implying investors assign limited probability to the merger's completion or post-deal value creation.

Setting the Scene: The Blank Check Company at a Crossroads

Pelican Acquisition Corporation, incorporated in the Cayman Islands on July 23, 2024, represents the purest form of a modern SPAC: a financial vehicle with no operations, no revenue, and a singular mandate to identify and complete a business combination. The company's entire purpose centers on deploying $86.25 million held in trust—derived from its May 2025 IPO and concurrent private placements—into a target business that can justify the costs and dilution inherent in the SPAC structure. This matters because PELI's value proposition isn't operational excellence but capital deployment efficiency within a ticking clock framework.

The SPAC landscape in 2025 has seen a modest resurgence with 63 IPOs, yet PELI enters a field dominated by larger, more experienced players. Archimedes Tech SPAC Partners II completed a $230 million IPO in February 2025, leveraging its sponsor's prior success with SoundHound AI (SOUN) to attract quality tech targets. Future Money Acquisition targets AI and Web3 with $100 million, while Art Technology Acquisition commands $220 million under veteran sponsor Daniel Cohen. PELI's $75 million raise positions it as a smaller player, which translates to fewer eligible targets and diminished negotiating power in a competitive deal environment. This means PELI must either accept a smaller, riskier target or face heightened redemption pressure as investors compare its limited firepower to better-capitalized alternatives.

The company's technology focus, stated as "primarily targeting businesses within the technology industry globally," initially positioned PELI to capitalize on AI, software, and digital infrastructure trends. However, the September 9, 2025 merger agreement with Greenland Energy—a rare earth exploration company—represents a strategic pivot toward critical minerals supply chain. This shift moves PELI from a pure-play tech platform into a resource extraction story, potentially leveraging technology sector demand for rare earth elements but exposing investors to commodity price volatility and geopolitical risks that traditional tech SPACs avoid.

Technology, Strategy, and the Greenland Energy Pivot

PELI possesses no proprietary technology, no R&D pipeline, and no operational infrastructure. Its "technology" consists entirely of a Cayman Islands corporate structure optimized for tax-efficient global deal sourcing and a rights offering mechanism designed to reduce dilution. This structural simplicity keeps overhead low—general and administrative expenses totaled just $331,247 for the three months ended July 31, 2025—but also means PELI offers no strategic value beyond its balance sheet. Unlike Archimedes' sponsor expertise in AI due diligence or Art Technology's fintech networks, PELI's sponsor provides only capital and basic administrative support.

The Greenland Energy merger fundamentally alters the investment thesis. Greenland Exploration Limited brings rare earth mining assets to the table, while March GL Company contributes additional mineral interests, creating a combined entity positioned to supply technology manufacturers with essential materials. The $215 million valuation, based on $10.00 per share, implies a post-merger enterprise targeting the intersection of energy transition and tech hardware demand. The significance of this lies in rare earth elements being non-substitutable components in semiconductors, electric vehicles, and defense systems, giving the combined company potential pricing power if geopolitical tensions restrict Chinese supply. However, PELI's lack of mining sector experience and the sponsor's limited track record raise execution risks that larger, more specialized SPACs might mitigate through experienced partners.

The merger structure itself reveals strategic trade-offs. PELI will domesticate as a Texas corporation, merging with subsidiaries of Pelican Holdco, which then becomes "Greenland Energy Company" trading under ticker "GLND." The consideration involves 1.5 million shares to Greenland shareholders and 20 million shares to March GL shareholders, with PELI shareholders receiving one-for-one exchange subject to redemptions. The forfeiture of 718,750 founder shares and transfer of 431,250 shares to FG Merchant Partners aligns sponsor incentives, but the termination clause—requiring PELI to transfer one-third of founder shares to Greenland if the deal fails due to PELI's inaction—creates a powerful incentive to close even if market conditions deteriorate. This dynamic reduces the sponsor's optionality and increases the likelihood of a suboptimal deal completion.

Financial Performance: Trust Income vs. Going Concern Reality

PELI's financial results for the three and six months ended July 31, 2025, tell a story of minimal activity and mounting pressure. The company generated $638,657 in interest income during Q2, offset by $331,247 in general and administrative expenses, producing net income of $307,410. For the six-month period, interest income of $639,041 barely covered $351,184 in expenses, leaving net income of $287,857. These figures are important not for their absolute size but for what they reveal: PELI's only revenue source is trust account interest, and its burn rate, while low, consumes a meaningful portion of that income.

The balance sheet as of July 31, 2025, shows $252,240 in cash and working capital of $284,602 against the $86.25 million restricted in trust. This structure—massive restricted cash offset by minimal operating liquidity—creates a going concern paradox. Management explicitly states the company lacks sufficient resources to sustain operations for one year from the financial statement issuance date, triggering "substantial doubt about the Company's ability to continue as a going concern." This warning transforms the SPAC from a patient capital vehicle into a distressed timeline: every month of delay increases liquidation risk, forcing management to prioritize deal completion over deal quality.

The trust account mechanics further constrain options. The $86.25 million is invested in U.S. government treasury bills or money market funds, generating the interest income that funds operations. However, these funds are only available for the business combination or redemption payments. If shareholders redeem en masse before the merger, the trust value per share could fall below $10.00, eliminating the downside protection that makes SPACs attractive. The current ratio of 0.27 and negative operating cash flow (-$420,429 quarterly) underscore that PELI cannot self-fund an extension beyond the August 2026 deadline without external capital, making the Greenland merger not just strategic but existential.

Competitive Context: Outgunned and Outmaneuvered

PELI's competitive position among 2025 tech SPACs is structurally weak. Archimedes Tech SPAC Partners II (ATII)'s $230 million raise and prior AI merger success give it superior deal-sourcing networks and credibility with target management teams. Its current trust value around $10.30 per share reflects lower redemption risk, allowing more patience in target selection. PELI's $10.15 trading price, while near NAV, offers no such premium, indicating market skepticism about its prospects. This dynamic is crucial because in competitive bidding for quality tech assets, sellers prefer larger, more stable SPACs with experienced sponsors who can provide strategic value beyond capital.

Future Money Acquisition (FMAC)'s $100 million IPO and Web3 focus create a different competitive threat. While PELI's broad tech mandate could theoretically encompass blockchain infrastructure, FMAC's specialized sponsor relationships in decentralized tech give it an edge in that niche. More importantly, FMAC's slightly larger size enables bigger deals in manufacturing tech, a sector PELI cannot access. This means PELI is squeezed from above by larger generalists like ATII and from below by focused players like FMAC, leaving it with a narrow band of mid-sized software or cybersecurity targets that may not justify the SPAC structure's costs.

Art Technology Acquisition (ARTC)'s $220 million raise and veteran sponsor Daniel Cohen represent the most direct competitive threat. Cohen's SPAC expertise and fintech connections position ARTC to compete for digital infrastructure and financial technology targets that overlap PELI's stated focus. PELI's only advantage is its May 2025 IPO date, giving it a few months' head start in target identification. However, ARTC's December 2025 filing means it will likely price in a more favorable market environment, potentially with better terms. This competitive dynamic means PELI must close its Greenland merger before ARTC and other new entrants begin competing for the same pool of late-stage private tech companies.

Outlook and Execution Risk: The August 2026 Deadline

Management's guidance is effectively binary: complete the Greenland merger or face automatic winding up and liquidation on August 27, 2026. The company has until this date to consummate its initial business combination, after which trust funds return to shareholders at approximately $10.00 per share. This hard stop eliminates the "optionality" value that SPACs traditionally offer. Unlike ATII, which can extend its timeline if needed, PELI's limited cash and going concern status make any extension prohibitively expensive and potentially impossible without shareholder approval.

The merger's success depends on three critical variables: shareholder redemption rate, PIPE financing availability, and regulatory approval for the Cayman-to-Texas domestication. High redemption rates would reduce the trust value below the $215 million merger consideration, forcing either renegotiation or sponsor capital infusion. The sponsor's $700,000 pre-IPO loan, while repaid, demonstrates limited financial capacity for such support. PIPE financing, crucial for backstopping redemptions, becomes harder to secure for a mining-sector pivot when investors expected technology exposure. Such a failure could trigger the termination clause, costing PELI one-third of its founder shares and leaving it with insufficient equity to complete any deal.

Management commentary emphasizes the merger's strategic merits—access to critical minerals for technology supply chains, public listing on Nasdaq, and alignment with energy transition themes. However, the absence of historical financials for Greenland Energy and March GL means investors must assess the deal based on limited disclosure. The implied $215 million valuation, while modest compared to ATII's potential targets, represents nearly three times PELI's trust value, suggesting significant dilution or leverage. The outlook hinges on whether the combined Greenland Energy Company (GLND) can generate the operational cash flows needed to justify the SPAC structure's costs and provide returns beyond the $10.00 liquidation floor.

Risks and Asymmetries: What Could Break the Thesis

The most material risk is the going concern warning itself. If PELI cannot maintain minimal operations through May 2026, it may be forced to liquidate before the merger vote, returning approximately $10.00 per share but incurring legal and administrative costs that reduce final distributions. This risk is not hypothetical—the company's $284,602 working capital and quarterly burn rate of $331,247 mean it could exhaust available cash within one quarter without drawing on trust funds, which would trigger regulatory issues. This means investors face a timing risk where the company might not survive to complete its own merger.

Redemption risk compounds this timeline pressure. In the current interest rate environment, the $10.00 trust value plus minimal interest is competitive with risk-free rates, giving arbitrageurs incentive to redeem shares rather than hold through merger uncertainty. If redemptions exceed 50%, the remaining trust value might not cover the $215 million merger consideration, forcing a renegotiation that could dilute remaining shareholders or crater the deal. This vulnerability is heightened because PELI's small size and sponsor inexperience make it more susceptible to redemption cascades than larger, more credible SPACs.

The sponsor's limited track record represents a qualitative risk that financial metrics cannot capture. Unlike Archimedes' proven ability to execute AI deals or Cohen's SPAC expertise, PELI's sponsor has no disclosed prior successes. This inexperience may manifest in poor due diligence, weak post-merger integration planning, or inability to secure favorable PIPE terms. The termination clause, while aligning incentives, also creates desperation risk—management may close a flawed deal rather than lose founder shares. For investors, this means the downside isn't just liquidation at $10.00 but potential value destruction if the merged company trades below trust value post-closing.

Geopolitical and market risks, while generic, take on specific importance for PELI's mining-sector pivot. The merger agreement explicitly cites Russia-Ukraine and Hamas-Israel conflicts, tariffs, and trade tensions as factors that could "materially and adversely affect" the ability to close or operate the target business. Rare earth mining is particularly sensitive to Chinese export policies and environmental regulations. This is significant because PELI's pivot from tech to mining increases exposure to commodity cycles and regulatory risks that traditional tech SPACs avoid, potentially making the post-merger company less attractive to the growth-oriented investors who bought the original tech-focused SPAC.

Valuation Context: Trust Value Plus Speculation

At $10.15 per share, PELI trades at a 1.5% premium to its $10.00 IPO price, reflecting minimal market confidence in the merger's completion or post-deal value creation. The market capitalization of $121.79 million exceeds the $86.25 million trust value by $35.54 million, representing the optionality value assigned to the Greenland Energy deal. This premium quantifies investor skepticism—larger, more credible SPACs like ATII trade at 3% premiums, suggesting the market views PELI's deal as higher risk and lower probability.

Traditional valuation multiples are meaningless for a pre-revenue SPAC. The price-to-book ratio of 1.40 and book value of $7.27 per share reflect accounting artifacts rather than economic value. Operating margins, profit margins, and gross margins are all zero percent because PELI has no operations. Instead, the relevant metrics are trust value per share ($10.00), cash burn rate ($331,247 quarterly), and time to liquidation (15 months). The enterprise value of $121.54 million essentially represents the market's assessment of the sponsor's ability to deploy capital at a premium to NAV.

Comparing PELI to peers highlights its valuation discount. ATII trades at a higher trust value premium despite being pre-revenue, reflecting its larger size and sponsor credibility. FMAC's negative profit margins and book value show the risks of pre-IPO SPACs, while ARTC's lack of trading data prevents direct comparison. For PELI, the valuation math is simple: if the merger closes and Greenland Energy trades above $10.00, investors realize upside; if it fails, the stock likely converges to trust value minus liquidation costs, estimated at $9.80-$9.90 per share. The narrow premium suggests the market assigns a limited probability to successful completion.

Conclusion: A High-Stakes SPAC Arbitrage with Limited Downside

Pelican Acquisition Corporation embodies the central tension in today's SPAC market: the potential for merger-driven value creation against the backdrop of structural limitations and time decay. The $215 million Greenland Energy deal offers a credible path to a post-merger public company positioned at the intersection of critical minerals and technology supply chains, but PELI's small size, sponsor inexperience, and explicit going concern warning create execution risks that larger competitors avoid.

The investment thesis hinges on two variables: redemption rates and sponsor execution. If shareholders largely remain invested through the merger vote, PELI can deliver a new public company with potential upside beyond the $10.00 floor. However, any significant redemption pressure or delay in closing could trigger liquidation, making the current $10.15 price a poor risk-adjusted entry point compared to the $9.80-$9.90 liquidation value. For investors, PELI represents a high-stakes arbitrage where the downside is modest but the upside depends on factors largely outside the company's control—a speculative play on sponsor competence in a field where competitors have already demonstrated success.