10-K: Soulpower Acquisition Corp. Details SWB Merger, Financials

Soulpower Acquisition Corp. files its annual 10-K, outlining its proposed business combination with SWB LLC to form Soul World Bank and detailing its financial position as a SPAC.

Summary

• Soulpower Acquisition Corp. (SPAC) is a blank check company incorporated on May 14, 2024, with the purpose of effecting a business combination.
• On April 3, 2025, the SPAC consummated its Initial Public Offering (IPO) of 25,000,000 units at $10.00 per unit, generating gross proceeds of $250,000,000, including a partial exercise of the over-allotment option.
• Simultaneously, 620,000 private placement units were sold to the Sponsor and underwriters for $6,200,000.
• As of December 31, 2025, $257,619,976 was held in the trust account, with an additional $207,108 in cash outside the trust account.
• On November 24, 2025, the SPAC entered into a Business Combination Agreement (BCA) with SWB LLC and SWB Holdings (Pubco), intending to merge with wholly-owned subsidiaries of Pubco.
• Upon consummation, the combined company will operate as Soul World Bank, an international financial institution focused on digital banking services.
• The implied pre-money transaction value for SWB LLC, based on assets contributed as of the signing date, was approximately $6.75 billion, leading to an estimated Merger Consideration of approximately $8.1 billion.
• The SPAC reported a net income of $5,961,658 for the year ended December 31, 2025, primarily from $7,619,976 in interest earned on the trust account.
• The independent registered public accounting firm's report contains an explanatory paragraph expressing substantial doubt about the SPAC's ability to continue as a going concern due to insufficient cash for operations for at least 12 months.
• The SPAC has issued two unsecured promissory notes to Soulpower Management LLC (a related party controlled by the CEO) in February 2026: an A Note for up to $785,000 (22% flat interest) and a B Note for up to $2,500,000 (no interest, forgiven upon business combination).

Sentiment

Score: 4

Explanation: StockSavvy.ai views this as a moderately negative filing due to the explicit 'going concern' warning from the independent auditor and the inherent liquidity challenges, despite the announcement of a significant proposed business combination with SWB LLC.

Positives

• A definitive Business Combination Agreement has been signed with SWB LLC, implying a significant transaction value of approximately $8.1 billion.
• The SPAC holds a substantial cash balance of $257,619,976 in its trust account as of December 31, 2025, available for the business combination.
• The management team possesses diverse expertise in financial, technological, distribution, community, and human capital sectors, which is expected to provide a competitive advantage.
• The target industry, consumer financial services (including insurance and long-term savings), is identified as large, growing, and undergoing significant technological transformation.
• An ELOC Agreement provides for up to $250 million in potential post-closing equity financing, with an option to increase to $5 billion, offering significant capital access for the combined entity.

Negatives

• The independent auditor's report includes an explanatory paragraph expressing substantial doubt about the company's ability to continue as a going concern.
• The company has insufficient cash on hand ($207,108 as of Dec 31, 2025) to support operations for at least 12 months, even with available borrowings from related-party notes.
• Public shareholders face potential significant dilution from the conversion of founder shares and any additional equity or convertible debt issuances for the business combination.
• Deferred underwriting fees of $10,600,000 will be paid from the trust account upon business combination, reducing the per-share value for non-redeeming shareholders.
• Share Rights will expire worthless if the initial business combination is not completed within the completion window, and holders will not receive any funds from the trust account for them.
• Management and the sponsor have conflicts of interest due to their founder shares and private placement units, which could be worthless if a business combination is not completed, incentivizing them to pursue a transaction that may not be in the best interest of public shareholders.
• The company is a blank check company with no operating history or revenues, making its future success entirely dependent on the completion and performance of the initial business combination.

Risks

• Inability to complete the initial business combination within the 24-month completion window, leading to liquidation and potential loss of investment for public shareholders (Share Rights would expire worthless).
• Public shareholders may not have an opportunity to vote on the proposed initial business combination, and even if a vote occurs, founder share holders' votes increase the likelihood of approval regardless of public shareholder sentiment.
• The nominal purchase price paid by the sponsor for founder shares may result in significant dilution to public shareholders and substantial profit for the sponsor even if the trading price of ordinary shares declines.
• The ability of public shareholders to redeem their shares for cash may make the company's financial condition unattractive to potential target businesses, hindering the completion of a desirable business combination.
• Potential for the company to be deemed an investment company under the Investment Company Act, leading to burdensome compliance requirements and restricted activities.
• Adverse impacts from current global geopolitical conditions (e.g., Russia-Ukraine conflict, Middle East tensions) on the search for a business combination or the operations of a target business.
• Risk of third-party claims against the trust account reducing the per-share redemption amount for public shareholders.
• Difficulty in enforcing indemnification obligations against the sponsor, potentially reducing funds available for public shareholders.
• Bankruptcy or insolvency proceedings could subject trust account proceeds to creditor claims, potentially reducing or eliminating distributions to shareholders.
• Changes in laws or regulations, including new SEC SPAC Rules and potential U.S. federal excise tax on stock repurchases, could adversely affect the business and transaction costs.
• Significant competition for attractive target businesses, potentially increasing acquisition costs or making it difficult to find a suitable target.
• Lack of diversification if only one business combination is completed, making the company solely dependent on a single business's performance.
• Difficulty in assessing the management of a private target business, potentially leading to a business combination with an underperforming company.
• Potential for the business combination and subsequent structure to be tax-inefficient for shareholders and Share Right holders.
• Risks associated with acquiring and operating a business in foreign countries, including regulatory, economic, political, and currency fluctuation risks.
• Dependence on officers and directors, whose loss or reduced time commitment could adversely affect the company's ability to operate.
• Potential for the sponsor to divest its ownership interest before a business combination is identified, depriving the company of key personnel.
• Conflicts of interest arising from key personnel negotiating employment or consulting agreements with a target business simultaneously with the business combination.
• NYSE delisting of securities, which could limit trading ability and subject the company to additional restrictions.
• Cyber incidents or attacks could result in information theft, data corruption, operational disruption, and/or financial loss.
• Potential for the company to be classified as a Passive Foreign Investment Company (PFIC), leading to adverse U.S. federal income tax consequences for U.S. investors.
• Recent increases in inflation could make it more difficult to complete the initial business combination.

Future Outlook

The company anticipates consummating its initial business combination with SWB LLC, which will result in Pubco operating as an international financial institution focused on digital banking services. If the SWB merger is not completed, the company intends to focus on identifying targets in consumer financial services, particularly insurance services and long-term savings and investments, leveraging its management team's expertise. The company expects to incur additional costs in pursuing its acquisition plans and may require further financing to complete a business combination or fund post-combination operations.

Management Comments

• "We believe our teams expertise in these sectors will provide us with a significant competitive advantage in sourcing and evaluating potential targets."
• "We believe a successful management team operating an acquisition vehicle within our category of interest must possess at least four key areas of expertise to be successful: Financial, Technological, Distribution and Community, and Human Capital Expertise."
• "We believe technology is changing the way that consumers interact with financial services in our categories of interest. This ongoing transformation creates new opportunities for firms to better service their consumers."
• "We believe there is latent market demand for long-term savings and investments products and services in our retirement savings category given the scale of the problems facing consumers."
• "We believe that the scale of consumers concerns about savings and expenses brings with it the opportunity to meet unmet market demand and create a highly valuable enterprise."
• "We believe the pace of innovation is accelerating across consumer financial services."

Industry Context

StockSavvy.ai notes that the SPAC market has seen increased competition and potential negative public perception, which could impact Soulpower Acquisition Corp.'s ability to secure a desirable target. The financial services industry, particularly insurance and retirement savings, represents a massive global opportunity, with insurance premiums nearing $5 trillion and US retirement assets at nearly $40 trillion. The rise of private investor interest in life insurance and annuities, coupled with widespread consumer financial stress, highlights significant unmet market demand. The accelerating pace of innovation in FinTech, driven by AI, big data, cloud, and blockchain technologies, creates a fertile ground for new enterprises, aligning with Soulpower's stated investment thesis in technology-enabled financial companies, which saw $113.7 billion in investments in 2023.

Comparison to Industry Standards

• StockSavvy.ai notes that the filing does not provide specific comparisons to industry-standard financial performance benchmarks or detailed project results of comparable companies. The focus is on the SPAC's structure and the proposed merger with SWB LLC, which is a newly formed entity with assets being contributed rather than a mature operating business with established industry metrics.
• The implied $8.1 billion valuation for SWB LLC is substantial, positioning the combined entity as a significant player if the merger is successfully consummated, but without comparable operational data, a direct performance assessment against industry leaders is not feasible at this stage.

Management Changes

Corporate Governance

Legal Proceedings

• No material litigation, arbitration, or governmental proceeding is currently pending against the company or any members of its management team in their capacity as such.

Related Party Transactions

• The sponsor purchased 5,750,000 founder shares for a nominal price of $25,000 (approximately $0.004 per share).
• The sponsor and Cantor Fitzgerald & Co. purchased an aggregate of 620,000 private placement units for $10.00 per unit, totaling $6,200,000.
• The company pays an affiliate of the sponsor $5,000 per month for office space, utilities, and administrative support.
• Working Capital Loans, up to $1,500,000, may be provided by the sponsor or its affiliates/officers/directors, potentially convertible into private units.
• On February 19, 2026, the company issued an unsecured promissory note (A Note) for up to $785,000 to Soulpower Management LLC (controlled by the CEO), bearing a flat 22% interest.
• On February 19, 2026, the company issued another unsecured promissory note (B Note) for up to $2,500,000 to Soulpower Management LLC, which will be forgiven upon the consummation of the initial business combination.
• Directors purchased Class B ordinary shares from the sponsor for $1.00 per share.
• The sponsor, officers, and directors have waived their redemption rights with respect to their founder shares and public shares in connection with the completion of the initial business combination.
• The sponsor, officers, and directors have waived their rights to liquidating distributions from the trust account with respect to their founder shares if the company fails to complete the initial business combination.

Stakeholder Impact

• **Shareholders**: Face potential significant dilution from founder share conversion and future equity issuances. Redemption rights are available but subject to limitations and may not yield full value if the trust account is depleted by creditor claims. Share Rights holders risk their rights expiring worthless if no business combination occurs.
• **Sponsor and Management**: Stand to make substantial profits from their founder shares and private placement units if a business combination is completed, even if public share value declines. They have waived certain redemption and liquidation rights for founder shares, aligning their interests with completing a transaction.
• **Creditors**: In the event of liquidation without a business combination, creditors' claims may take priority over public shareholders' claims to the trust account funds, potentially reducing the per-share redemption amount.
• **Underwriters**: Are entitled to $10,600,000 in deferred underwriting commissions upon the completion of a business combination, creating an incentive for transaction closure.

Next Steps

• Prepare and file a registration statement on Form S-4 with the SEC for the proposed business combination.
• Solicit SPAC Shareholder Approval for the business combination and related matters at an extraordinary general meeting.
• Obtain approval for listing Pubco Class A Ordinary Shares on the New York Stock Exchange (or Nasdaq Global Market/Capital Market).
• SWB LLC is to deliver consolidated unaudited financial statements by 60 days post-signing and consolidated audited financial statements by March 31, 2026.
• Pubco will issue Commitment Shares to the ELOC Investor upon the closing of the business combination.
• Pubco is obligated to file a registration statement with the SEC to register for resale the Pubco Class A Ordinary Shares that may be issued to the ELOC Investor.
• If the SWB Business Combination Agreement is not consummated, the company will continue to search for an alternative target business within its completion window (24 months from IPO).

Key Dates

Recommendation

The independent auditor's 'going concern' warning, coupled with the inherent risks of a blank check company and potential for significant dilution for public shareholders, outweighs the positive implied valuation of the proposed business combination with SWB LLC. The company's current liquidity issues and reliance on related-party loans for working capital present substantial financial uncertainty, making it a high-risk investment with a clear downside warning from the auditor.

Keywords

SPAC, blank check company, business combination, merger, acquisition, financial services, insurance, asset management, technology, FinTech, RegTech, Cayman Islands, NYSE, SEC, 10-K, Soulpower Acquisition Corp., SWB LLC, Soul World Bank, going concern, dilution, trust account, private placement, founder shares, Share Rights, ELOC