10-Q: IWAC Q3 Loss, Delisting, Going Concern Doubt Persist

Integrated Wellness Acquisition Corp. reports Q3 2025 net loss, faces NYSE delisting, and acknowledges going concern doubt while pursuing Btab merger.

Summary

• Integrated Wellness Acquisition Corp. (IWAC) reported a net loss of $(302,631) for the three months ended September 30, 2025, a significant increase from $(24,472) for the same period in 2024.
• The net loss for the nine months ended September 30, 2025, was $(619,485), compared to $(139,980) for the nine months ended September 30, 2024.
• The company's cash balance outside the Trust Account was $0 as of September 30, 2025, down from $5,141 at December 31, 2024.
• A working capital deficit of $8,669,147 was reported as of September 30, 2025, worsening from $7,310,341 at December 31, 2024.
• The Trust Account held $15,044,640 as of September 30, 2025, an increase from $14,215,318 at December 31, 2024.
• IWAC is pursuing a Business Combination with Btab Ecommerce Group, Inc. (Btab), with a definitive proxy statement filed on November 12, 2025.
• The company was delisted from the NYSE on December 13, 2024, and its securities are now trading on the OTC Markets.
• Management has expressed substantial doubt about the company's ability to continue as a going concern.
• Material weaknesses in internal controls over financial reporting, related to classification of investing activities and complex transactions, continue to exist.

Sentiment

Score: 2

Explanation: The company reported increased losses, has no cash outside its trust account, faces substantial doubt about its ability to continue as a going concern, was delisted from NYSE, and has persistent material weaknesses in internal controls. While a business combination is in progress, the cumulative financial and operational challenges are severe, indicating a highly negative outlook.

Positives

• Interest earned on cash held in the Trust Account was $118,321 for Q3 2025 and $347,489 for the nine months ended September 30, 2025.
• The Sponsor waived administrative services fees totaling $90,000 for the nine months ended September 30, 2025, reducing operating expenses.
• The company has filed a definitive proxy statement for the Btab Business Combination, indicating progress towards the merger.
• The deadline for completing a Business Combination has been extended to December 15, 2025, providing additional time.

Negatives

• Net loss significantly increased to $(302,631) for Q3 2025 from $(24,472) in Q3 2024.
• Net loss for the nine months ended September 30, 2025, increased to $(619,485) from $(139,980) in the prior year period.
• The company's cash balance outside the Trust Account is $0 as of September 30, 2025, indicating severe liquidity constraints for operations.
• The working capital deficit worsened to $8,669,147 as of September 30, 2025.
• IWAC was delisted from the NYSE on December 13, 2024, and now trades on the OTC Markets, which typically implies reduced liquidity and investor interest.
• Management has identified substantial doubt about the company's ability to continue as a going concern.
• Material weaknesses in disclosure controls and internal control over financial reporting persist, raising concerns about financial reporting reliability.
• Significant redemptions of Class A ordinary shares occurred in previous shareholder meetings, reducing the funds available in the Trust Account.

Risks

• The ability to complete the Business Combination may be adversely affected by various factors beyond the company's control, including changes in laws or regulations, financial market downturns, economic conditions, inflation, interest rates, tariffs, supply chain disruptions, consumer confidence, public health considerations, and geopolitical instability.
• There is no assurance that the company will be able to raise additional capital through loans or investments from its Sponsor, shareholders, officers, directors, or third parties, which may be needed to meet working capital requirements.
• If the company is unable to complete a Business Combination by the Termination Date of December 15, 2025, it will cease operations, redeem Public Shares, and liquidate, which would completely extinguish public shareholders' rights.
• Warrants will expire worthless if the company fails to complete a Business Combination by the Termination Date.
• In the event of liquidation, the per share value of assets remaining available for distribution may be less than the per share amount initially held in the Trust Account.
• The Sponsor's liability to indemnify the Trust Account for claims by third parties has limitations and may not apply in all circumstances, such as if an executed waiver is deemed unenforceable.
• Material weaknesses in disclosure controls and internal control over financial reporting continue to exist, which could affect the reliability of financial information.

Future Outlook

The company expects to incur significant costs in connection with its initial business combination and cannot assure that its plans to raise capital or complete the merger will be successful. Upon consummation of the Btab Business Combination, Pubco expects to be renamed Btab Ecommerce Holdings, Inc. The company may need to raise additional capital through loans or investments from its Sponsor, shareholders, officers, directors, or third parties to meet working capital needs, but does not expect to seek loans from parties other than its sponsor or affiliates prior to the completion of the initial business combination.

Management Comments

• "We have neither engaged in any operations nor generated any revenues to date."
• "Our only activities since inception have been related to the Company's formation, the initial public offering, identifying a target for a Business Combination and consummation of the Business Combination."
• "We will not generate any operating revenues until after completion of our initial business combination."
• "We expect to incur significant costs to complete an initial business combination."
• "These conditions raise substantial doubt about our ability to continue as a going concern for a period of time within one year from the date that the condensed consolidated financial statements are issued."
• "We do not expect that our disclosure controls and procedures will prevent all errors and all instances of fraud."

Industry Context

Integrated Wellness Acquisition Corp. operates as a Special Purpose Acquisition Company (SPAC), a vehicle that has faced increasing scrutiny and higher redemption rates in the current market. The company's delisting from the NYSE and subsequent trading on OTC Markets is a significant negative indicator, reflecting reduced investor confidence and liquidity, which is a common challenge for SPACs struggling to complete a merger. The ongoing efforts to finalize the Btab merger, despite the company's precarious financial health and internal control issues, highlight the pressures faced by SPACs nearing their dissolution deadline.

Comparison to Industry Standards

• The company's delisting from the NYSE and subsequent trading on OTC Markets falls significantly below the listing standards of major exchanges, indicating a failure to meet the operational and financial requirements expected of publicly traded companies.
• The disclosure of 'substantial doubt about the company's ability to continue as a going concern' is a critical red flag that deviates sharply from the financial stability and operational viability typically expected of public entities and is a severe warning sign for investors.
• The high redemption rates of Class A ordinary shares in previous shareholder meetings (e.g., 6,108,728 shares in June 2023, 1,136,155 in December 2023, 3,069,636 in December 2024) are indicative of low investor confidence in the SPAC's ability to find or complete a value-accretive business combination, a common challenge in the current SPAC market.
• The persistence of material weaknesses in internal controls over financial reporting, specifically regarding cash flow classification and complex transaction accounting, is below acceptable industry standards for public companies and raises concerns about the reliability of financial statements.

Management Changes

Corporate Governance

Legal Proceedings

• To the knowledge of management, there is no material litigation currently pending or contemplated against the company, any of its officers or directors in their capacity as such, or against any of its property.

Related Party Transactions

• The Prior Sponsor paid $25,000 for 2,875,000 Class B ordinary shares (Founder Shares).
• The Sponsor Handover involved the Prior Sponsor transferring 2,012,500 Class B ordinary shares and 4,795,000 private placement warrants to Sriram Associates, LLC (or its designees) for $1.00. Suntone Investment Pty Ltd, an affiliate of Sriram, became the new Sponsor.
• The company borrowed $1,150,000 under an Extension Note and $640,000 under a Second Extension Note from the Prior Sponsor, totaling $1,790,000 as of September 30, 2025. These notes are non-interest bearing and payable upon business combination or liquidation.
• Sriram (an affiliate of Suntone) contributed $320,000 to the Trust Account for extension deposits.
• The company issued a promissory note (Third Extension Note) to Sriram for up to $1,500,000, which was later assigned to Suntone. This note was amended and restated as the January 2025 Note for up to $4,000,000 to the Sponsor (Suntone). As of September 30, 2025, $3,676,223 was borrowed under this note.
• The January 2025 Note allows the Sponsor to convert up to $1.5 million of the unpaid principal balance relating to working capital expenses into ordinary shares at a conversion price of $1.00 per share upon consummation of the business combination.
• The company has an agreement to pay the Sponsor $10,000 per month for administrative services, but both the Prior Sponsor and Sriram have waived these payments, which are accounted for as capital contributions ($90,000 for the nine months ended September 30, 2025).
• The Sponsor owed the company $2,605 as of September 30, 2025, for payments made by the company on behalf of the Sponsor.
• The company owed the Sponsor $233,229 as of September 30, 2025, for payments made by the Sponsor on behalf of the company.

Stakeholder Impact

• **Shareholders (Class A)**: Face significant risk of capital loss if the Business Combination is not completed by December 15, 2025, as shares will be redeemed at a pro rata portion of the Trust Account, which may be less than their initial investment. Warrants held by public shareholders will expire worthless.
• **Shareholders (Class B / Sponsor)**: The Sponsor's Founder Shares are subject to lock-up and conversion terms. The Sponsor has waived liquidation rights for Founder Shares but has agreed to be liable for certain third-party claims to protect the Trust Account, though this liability has limitations.
• **Underwriters**: The deferred underwriting fee of $4,025,000 is contingent upon the completion of a Business Combination and will be forfeited if the merger does not occur.
• **Creditors**: The Sponsor has agreed to be liable for certain claims by third parties to protect the Trust Account, but this liability is not absolute and has specific conditions and limitations.
• **Btab Ecommerce Group, Inc. (Target Company)**: The future of Btab is directly tied to the successful and timely completion of this Business Combination. Delays, financial instability, and potential failure of IWAC to close the merger could significantly impact Btab's plans to go public.

Next Steps

• Complete the Business Combination with Btab Ecommerce Group, Inc. by the Termination Date of December 15, 2025.
• File a registration statement for the Class A ordinary shares issuable upon exercise of Public Warrants and use commercially reasonable efforts to cause it to become effective within 60 business days after the closing of a Business Combination.
• Management will continue to implement remediation plans for identified material weaknesses in internal controls, including additional post-closing review procedures by the Chief Financial Officer and consulting with legal and accounting experts for complex transactions.

Key Dates

Recommendation

The company exhibits severe financial distress, marked by increased net losses, zero cash outside its trust account, and a substantial working capital deficit. The explicit 'going concern' warning indicates a high probability of business failure or liquidation if the Btab merger is not successfully completed by the extended deadline. The delisting from NYSE to OTC Markets significantly diminishes liquidity and investor confidence. Persistent material weaknesses in internal controls further undermine the reliability of financial reporting. While a merger is in progress, the cumulative risks and negative indicators suggest a very high-risk investment with a strong likelihood of capital loss for current shareholders, particularly warrant holders. The repeated extensions and high redemptions also point to underlying issues that make this a highly speculative and unfavorable investment.

Keywords

SPAC, blank check company, Btab Ecommerce Group, business combination, merger, 10-Q, SEC filing, financial results, net loss, going concern, NYSE delisting, OTC Markets, corporate governance, risk factors, financial reporting, capital raise