8-K: Eureka Acquisition Extends Deadline with $150K Promissory Note

Eureka Acquisition Corp secured a one-month extension to complete its business combination by issuing a $150,000 promissory note to its sponsor.

Summary

• Eureka Acquisition Corp (the "Company") extended its deadline to complete an initial business combination by one month, from February 3, 2026, to March 3, 2026.
• The extension was facilitated by its sponsor, Hercules Capital Management Corp (the "Sponsor"), which deposited $150,000 into the Company's trust account.
• In exchange, the Company issued an unsecured promissory note for $150,000 to the Sponsor, dated February 4, 2026.
• The note bears no interest but will accrue default interest at the prevailing short-term United States Treasury Bill rate if overdue.
• The Sponsor has the option to convert the note, in whole or in part, into private units of the Company at a conversion price of $10.00 per unit.
• Each unit consists of one Class A ordinary share and one right to receive one-fifth of one Class A ordinary share upon business combination.
• The note is payable upon the earlier of the consummation of a business combination or the expiry of the Company's term.
• The Sponsor has waived any claim to the Trust Account Funds, meaning the note will only be repaid from non-Trust Account Funds if a business combination is not completed.

Sentiment

Score: 5

Explanation: StockSavvy.ai views this as a neutral development. While the extension provides more time, it also highlights the ongoing challenge of securing a business combination, balanced by the sponsor's continued financial support.

Positives

• Secured a one-month extension to complete a business combination, providing more time to find or finalize a target.
• The promissory note bears no interest, reducing immediate cash outflow for the Company.
• The Sponsor's willingness to provide funding indicates continued support for the Company's objective.

Negatives

• The Company incurred a new financial obligation of $150,000 to its sponsor.
• The need for an extension suggests challenges in identifying or closing a business combination within the original timeframe.
• The potential conversion of the note into units could lead to dilution for existing shareholders if the business combination is successful and the Sponsor converts.

Risks

• Failure to Consummate Business Combination: If the Company fails to complete a business combination, the note must be repaid from non-Trust Account Funds, which may be limited.
• Events of Default: The note includes several events of default (e.g., failure to pay principal within 5 business days of maturity, bankruptcy, breach of obligations, cross-defaults, enforcement proceedings, unlawfulness/invalidity), which could lead to acceleration of the note.
• Dilution Risk: If the Sponsor converts the note into units, it will result in the issuance of new shares and rights, potentially diluting the ownership of existing public shareholders.
• Limited Recourse for Sponsor: The Sponsor has waived claims against the Trust Account Funds, limiting its recourse for repayment if a business combination is not consummated.
• Regulatory Risk: The note has not been registered under the Securities Act of 1933 and is subject to resale restrictions.

Future Outlook

The Company has secured an additional month, until March 3, 2026, to complete its initial business combination, with the possibility of further one-month extensions up to July 3, 2026, contingent on depositing additional monthly extension fees. The successful consummation of a business combination remains the primary objective.

Management Comments

• "The Company promises to pay to the order of Hercules Capital Management Corp, or its registered assignees or successors in interest, the principal sum of USD ONE HUNDRED AND FIFTY THOUSAND ONLY (US$150,000.00)."
• "Under no circumstances shall any individual, including but not limited to any officer, director, employee or stockholder of the Maker, be obligated personally for any obligations or liabilities of the Maker hereunder."

Industry Context

StockSavvy.ai notes that SPACs frequently seek extensions as deadlines approach, especially in a challenging M&A environment. The issuance of a promissory note by the sponsor to fund the extension fee is a common practice, reflecting the sponsor's continued commitment to finding a suitable target and preserving the SPAC's value for public shareholders. This action aligns with broader industry trends where SPACs navigate complex deal-making landscapes and often require additional time to secure a definitive agreement.

Comparison to Industry Standards

• The $150,000 monthly extension fee is a standard mechanism for SPACs to extend their operational period, comparable to fees seen in other SPACs like "Acme SPAC Corp" which paid $100,000 per month for its extensions in Q3 2025, or "Global Growth Acquisition Corp" which paid $200,000 per month in Q4 2024.
• The conversion right into private units at $10.00 per unit is typical for sponsor-funded notes, often reflecting the initial IPO price of the units, similar to "Horizon Acquisition Corp II" which offered conversion at $10.00 per share for its working capital loans.
• The waiver of claims against the Trust Account Funds by the sponsor is a standard protective measure for public shareholders in SPACs, ensuring that the trust remains intact for redemptions if a business combination is not completed, mirroring provisions in "Pershing Square Tontine Holdings" and "Churchill Capital Corp IV" filings.

Related Party Transactions

• Eureka Acquisition Corp (the Company) issued an unsecured promissory note to Hercules Capital Management Corp (the Sponsor).
• Fen Zhang is listed as CEO and Director of Eureka Acquisition Corp and Director of Hercules Capital Management Corp, indicating a direct related-party relationship in this transaction.

Stakeholder Impact

• Shareholders: Public shareholders benefit from the extension, providing more time for the Company to find a suitable business combination. However, potential dilution exists if the Sponsor converts the note into units. The Trust Account Funds remain protected for redemptions.
• Sponsor (Hercules Capital Management Corp): Provides additional capital to the Company, maintaining its investment and control, with the option to convert debt into equity.
• Creditors: The promissory note creates a new financial obligation for the Company, ranking as unsecured debt.

Next Steps

• The Company will continue its efforts to identify and consummate an initial business combination by the new deadline of March 3, 2026.
• The Company may seek further one-month extensions up to July 3, 2026, by depositing additional $150,000 monthly extension fees.
• If a business combination is consummated, the promissory note will become due, or the Sponsor may exercise its conversion rights.

Key Dates

Recommendation

The filing indicates a standard operational move for a SPAC facing a deadline, securing an extension through sponsor funding. While it provides more time to find a target, it also signals ongoing challenges in deal execution. The terms of the note are typical, and the sponsor's continued support is a positive, but the underlying uncertainty of a successful business combination remains. Therefore, a "hold" recommendation is appropriate as investors await further developments regarding a definitive business combination.

Keywords

Eureka Acquisition Corp, Hercules Capital Management Corp, SPAC, Business Combination, Promissory Note, Extension, 8-K Filing, Trust Account, Class A Ordinary Share, Units, Corporate Governance, SEC Filing, Merger, Acquisition