10-Q: Soulpower Acquisition Reports Q3 2025 Net Income

Soulpower Acquisition Corporation, a blank check company, reported a net income of $2.24 million for Q3 2025, primarily driven by interest earned on its $255.16 million trust account.

Summary

• The company is a blank check company (SPAC) incorporated on May 14, 2024, with the purpose of effecting a Business Combination.
• The Initial Public Offering (IPO) was consummated on April 3, 2025, selling 25,000,000 units at $10.00 each, generating gross proceeds of $250,000,000.
• Simultaneously with the IPO, 620,000 Private Placement Units were sold to the Sponsor and Cantor Fitzgerald & Co. for $6,200,000.
• An aggregate of $250,000,000 from the IPO and private placement proceeds was placed in a Trust Account.
• Net income for the three months ended September 30, 2025, was $2,242,863.
• Net income for the nine months ended September 30, 2025, was $4,200,259.
• Interest earned on cash held in the Trust Account was $2,638,202 for the three months and $5,158,518 for the nine months ended September 30, 2025.
• General and administrative costs were $401,940 for the three months and $971,539 for the nine months ended September 30, 2025.
• Cash held in the Trust Account as of September 30, 2025, totaled $255,158,518.
• Cash outside the Trust Account was $384,848 as of September 30, 2025.
• Deferred underwriting fees of $8,800,000 are payable to the underwriter upon the completion of a Business Combination.
• The company has a 24-month window from the IPO closing date (April 3, 2025) to complete its initial Business Combination.

Sentiment

Score: 6

Explanation: The company successfully completed its IPO and is generating interest income, growing its trust account. However, it remains a blank check company with no operations, facing significant risks related to finding and completing a Business Combination, regulatory changes, and geopolitical instability. The increase in operating costs and shareholders' deficit are minor concerns.

Positives

• Generated significant net income from interest on the Trust Account: $2,242,863 for the three months and $4,200,259 for the nine months ended September 30, 2025.
• The cash held in the Trust Account has grown to $255,158,518 as of September 30, 2025, exceeding the initial $250,000,000, indicating successful interest accretion.
• Successfully completed the Initial Public Offering and private placement, securing substantial capital for a potential Business Combination.

Negatives

• Operating expenses are increasing, with general and administrative costs rising to $401,940 for the three months ended September 30, 2025, from $76,355 in the prior year period.
• The company is a blank check company with no current operations or revenue-generating activities, relying entirely on the successful identification and completion of a Business Combination.
• Shareholders' deficit increased to $(8,279,069) as of September 30, 2025, from $(65,827) at December 31, 2024.

Risks

• Inability to successfully effect a Business Combination within the 24-month Completion Window, which would lead to liquidation.
• Proceeds in the Trust Account could become subject to claims of the company's creditors, potentially having priority over the claims of public shareholders.
• The Sponsor's ability to satisfy indemnification obligations for claims against the Trust Account is uncertain, as its only assets are believed to be company securities.
• Insufficient funds available to operate the business prior to an initial Business Combination if estimates of costs for identifying a target, due diligence, and negotiation are less than actual amounts.
• New SEC 2024 SPAC Rules, effective July 1, 2024, may materially affect the ability to negotiate and complete an initial Business Combination and may increase related costs and time.
• Geopolitical instability, including the ongoing Russia-Ukraine and Israel-Hamas conflicts, could lead to market disruptions, volatility in commodity prices, credit and capital markets, supply chain interruptions, and increased cyber-attacks, adversely affecting the search for a target business.
• Potential for significant dilution for public shareholders if additional funds are raised through equity or convertible debt issuances to complete a Business Combination.
• Incurrence of indebtedness for additional financing would have rights senior to equity securities and could contain covenants that restrict operations.

Future Outlook

The company intends to effectuate a Business Combination using cash from IPO proceeds, shares, debt, or a combination, and expects to incur significant costs in pursuing acquisition plans. There is no assurance that plans to complete a Business Combination will be successful. The 2024 SEC SPAC Rules may materially affect the ability to complete an initial Business Combination and increase related costs and time. The company does not believe it will need to raise additional funds for current operating expenditures but may require additional financing for a Business Combination if cash is insufficient or if a significant number of public shares are redeemed.

Management Comments

• "We expect to continue to incur significant costs in the pursuit of our acquisition plans."
• "We cannot assure you that our plans to complete a Business Combination will be successful."
• "We do not expect to generate any operating revenues until after the completion of our Business Combination."
• "We do not believe it will need to raise additional funds in order to meet the expenditures required for operating its business."

Industry Context

The filing highlights the impact of the new 2024 SEC SPAC Rules, which became effective July 1, 2024, requiring additional disclosures and potentially increasing costs and time for Business Combinations. This reflects a broader trend of increased regulatory scrutiny on SPACs. Additionally, the company acknowledges global geopolitical instability, including the Russia-Ukraine and Israel-Hamas conflicts, as a risk factor that could affect market conditions and the search for a target business, indicating a challenging macroeconomic environment for SPAC activities.

Comparison to Industry Standards

• As a blank check company, direct operational comparisons to revenue-generating entities are not applicable.
• The trust account value of $10.21 per share (redemption value) as of September 30, 2025, is slightly above the initial IPO price of $10.00 per unit, demonstrating successful interest accumulation, which is a positive for SPACs.
• The company's structure and timeline (24 months to complete a Business Combination) are standard for Special Purpose Acquisition Companies.
• The deferred underwriting fee of $8.8 million is a common cost structure within the SPAC industry.

Corporate Governance

Related Party Transactions

• The Sponsor purchased 400,000 Private Placement Units for $4,000,000.
• The Sponsor made a capital contribution of $25,000 for 5,750,000 Class B ordinary shares (founder shares).
• The company pays an affiliate of the Sponsor $5,000 per month for office space, administrative, and shared personnel support services.
• The Sponsor provided an unsecured promissory note, amended to allow borrowing up to $300,000, with $0 outstanding as of September 30, 2025.
• The Sponsor, its affiliates, or officers/directors may provide Working Capital Loans, which could be convertible into units of the post-business combination entity at $10.00 per unit.

Stakeholder Impact

• Shareholders: Public shareholders benefit from interest accretion in the trust account, increasing the redemption value per share. However, they face dilution risk from future capital raises and the risk of liquidation if no Business Combination is completed. Founder shares are subject to lock-up and conversion adjustments.
• Sponsor: Holds founder shares and private placement units, has a financial interest in completing a Business Combination, and provides administrative support and potential working capital loans.
• Underwriters: Received a cash underwriting fee and are entitled to a deferred fee of $8,800,000 upon completion of a Business Combination.
• Creditors: Proceeds in the Trust Account could be subject to creditor claims, potentially having priority over public shareholders.

Next Steps

• Identify and evaluate target businesses for a Business Combination.
• Perform business due diligence on prospective target businesses.
• Structure, negotiate, and complete a Business Combination within the 24-month Completion Window (by April 3, 2027).
• Manage and forecast cash to ensure sufficient capital is available for operations and a Business Combination.

Key Dates

Recommendation

As a blank check company, Soulpower Acquisition Corporation has no operating business to evaluate. The current financial performance is solely based on interest earned on its trust account, which is positive but expected. The investment decision hinges entirely on the future Business Combination, which is currently unidentified. Holding is appropriate for investors who believe in the management team's ability to identify and execute a valuable acquisition, while acknowledging the inherent risks of SPACs, including potential dilution and the possibility of liquidation.

Keywords

SPAC, blank check company, IPO, business combination, acquisition, merger, 10-Q, financial report, SEC filing, Soulpower Acquisition Corporation, SOUL, SOULU, SOULR, trust account, financial results, Q3 2025