Company: FSHPU
Filing Date: 2025-05-13
Form Type: 10-Q
Source: 0001829126-25-003624
Chunk: 92

Company: Flag Ship Acquisition Corp
Filing Date: 2025-05-13
Form: 10-Q
Item: Part I, Item 2
Chunk 92
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businesses, perform business due diligence on prospective target businesses, travel to and from the offices, plants or similar locations
of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective
target businesses, and structure, negotiate and complete a business combination.

In order to fund working capital deficiencies
or finance transaction costs in connection with a Business Combination, our Sponsor or an affiliate of our Sponsor or certain of our officers
and directors may, but are not obligated to, loan us funds as may be required. Such working capital loans would be evidenced by promissory
notes. If we complete a Business Combination, we may repay such notes out of the proceeds of the Trust Account released to us. In the
event that a Business Combination does not close, we may use a portion of the working capital held outside the Trust Account to repay
such notes, but no proceeds from our Trust Account would be used for such repayment. Up to $1,500,000 of notes may be convertible into
units, at a price of $10.00 per unit, at the option of the lender. The units would be identical to the Private Units.

On August 30, 2024, we issued an unsecured promissory
note (the “2024 Note”) in the principal amount of up to $1,000,000 to our Sponsor pursuant to which we may borrow additional
funds. The 2024 Note bears no interest and is due on the earlier of: (i) December 31, 2025 or (ii) the date on which we consummate our
initial business combination. As of March 31, 2025, there was $850,351 outstanding under the 2024 Note. The principal balance may be prepaid
at any time. Once an amount is drawn down under the 2024 Note, it shall not be available for future drawdown requests even if prepaid.
The 2024 Note is subject to customary events of default, the occurrence of certain of which entitles the Sponsor to declare, by written
notice to us, the unpaid principal balance of the 2024 Note and all other sums payable with regard to the 2024 Note becoming immediately
due and payable.

We have incurred and expect to continue to incur
significant professional costs to remain as a publicly traded company and to incur significant transaction costs in pursuit of the consummation
of a business combination. In order to complete a Business Combination, we will need to raise additional capital through