Company: QSEA
Filing Date: 2025-03-11
Form Type: S-1/A
Source: 0001829126-25-001676
Chunk: 270

Company: Quartzsea Acquisition Corp
Filing Date: 2025-03-11
Form: S-1/A
Chunk 270
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 The Company has not experienced losses on this account and management believes the Company
is not exposed to significant risks on such account.

Fair Value of Financial Instruments

The fair value of the Company’s assets and
liabilities, which qualify as financial instruments under ASC 825, “Financial Instruments,” approximates the carrying amounts
represented in the accompanying balance sheet, primarily due to their short-term nature.

Derivative Financial Instruments

The Company evaluates its financial instruments to
determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with ASC Topic 815,
“Derivatives and Hedging.” For derivative financial instruments that are accounted for as liabilities, the derivative instrument
is initially recorded at its fair value on the grant date and is then re-valued at each reporting date, with changes in the fair value
reported in the statements of operations. The classification of derivative instruments, including whether such instruments should be
recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative liabilities are classified in the
balance sheet as current or non-current based on whether or not net cash settlement or conversion of the instrument could be required
within 12 months of the balance sheet date. The underwriter’s over-allotment option is deemed to be a freestanding financial instrument
indexed on the contingently redeemable shares and will be accounted for as a liability pursuant to ASC 480 if not fully exercised at
the time of the Proposed Public Offering.

Ordinary Shares Subject to Possible Redemption

The Company accounts for its ordinary shares subject
to possible redemption in accordance with the guidance in ASC Topic 480 “Distinguishing Liabilities from Equity.” Ordinary
shares subject to mandatory redemption (if any) are classified as a liability instrument and are measured at fair value. Conditionally
redeemable ordinary shares (including ordinary shares that feature redemption rights that is either within the control of the holder
or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) are classified as temporary
equity. At all other times, ordinary shares are classified as shareholders’ equity. The Company’s ordinary shares feature
certain redemption rights that are considered to be outside of the Company’s control and subject to the occurrence of uncertain
future events. If it is probable that the equity instrument will become redeemable, we have the option to either (i) accrete changes
in the redemption value over the period from the date of issuance (or from the date that it becomes probable that