K2 Capital Acquisition Corp

As a smaller reporting company under Rule 12b-2 of the Exchange Act, we are not required to include risk factors in the Report. However, for detailed descriptions of the risks relating to our Company, see the section titled “Risk Factors” contained in our (i) registration statement of our initial public offering, and (2) 2025 annual report filed with the Securities Exchange Commission (the “SEC”) on March 26, 2026. As of the date of the Report, there have been no material changes with respect to those risk factors, other than as set forth below. Any of these previously disclosed risk factors could result in a significant or material adverse effect on our results of operations or financial condition. Additional risks not presently known to us or that we currently deem immaterial may also affect our ability to consummate an initial Business Combination. We may disclose changes to such risk factors or disclose additional risk factors from time to time in our future filings with the SEC.

We may be subject to a 1% U.S. federal excise tax on certain repurchases (including redemptions) of our Class A ordinary shares.

Section 4501 of the Internal Revenue Code, as enacted by the Inflation Reduction Act of 2022, imposes a 1% excise tax on the fair market value of certain stock repurchases made by a "covered corporation." Although we are a Cayman Islands exempted company, the application of this excise tax to SPAC redemptions has not been definitively resolved, especially regarding redemptions by entities organized outside the United States whose shares trade on U.S. exchanges. The IRS has issued Notice 2023-2 and proposed regulations addressing certain aspects of the excise tax's application to SPAC transactions, but final regulations have not been issued.

If determined to apply to us, the excise tax could be imposed on redemptions of our Class A ordinary shares in connection with our initial business combination, an extension of the completion window, open market repurchases by our affiliates, or a liquidation. Under the proposed regulations, the amount subject to tax may be reduced by the fair market value of any stock issued during the same taxable year, which could include shares issued in connection with a business combination or PIPE transaction. In addition, there is no assurance that any such offset would be available or sufficient to fully eliminate the liability.

We have not received a ruling from the IRS or a formal opinion from tax counsel on this issue, and we have not accrued for any potential excise tax liability in our financial statements as of the date of this Quarterly Report. Any excise tax would be payable by us, not by the redeeming shareholders, and would reduce the cash available for our initial business combination, working capital, or distribution to shareholders. If final regulations or other guidance clarifies the application of the excise tax to our redemptions, our potential liability could be material.