10-Q: WinVest Faces Delisting, Going Concern Amid SPAC Struggles

WinVest Acquisition Corp. reports significant financial challenges, including Nasdaq delisting, a going concern warning, and the termination of a prior business combination agreement, as it seeks a new merger target.

Summary

• WinVest Acquisition Corp., a blank check company, has not commenced core operations and is focused on completing an Initial Business Combination.
• The company was delisted from Nasdaq on March 20, 2025, due to its failure to complete a business combination by the extended deadline, and its securities now trade on the OTC Markets.
• Management has identified substantial doubt about the company's ability to continue as a going concern due to insufficient liquidity and a mandatory liquidation date of February 17, 2026, if a business combination is not consummated.
• The previously announced business combination agreement with Xtribe P.L.C. was terminated on December 2, 2025.
• A new Business Combination Agreement was entered into on December 2, 2025, with Embed Financial Group Cayman Holdings, which has not yet been consummated.
• The company has repeatedly extended its deadline to complete a business combination, funded by multiple unsecured promissory notes from its Sponsor, WinVest SPAC LLC, totaling $1,950,000 outstanding under Extension Notes and $1,600,797 under other promissory notes as of September 30, 2025.
• Public shareholders have exercised significant redemption rights in connection with extension votes, reducing the cash in the Trust Account from $116,150,000 initially to $2,976,212 as of September 30, 2025.
• The company reported a net loss of $1,296,493 for the nine months ended September 30, 2025, and a working capital deficit of $7,463,939.
• A material weakness in internal control over financial reporting was identified, related to the protection of funds permitted for withdrawal from the Trust Account, non-compliance with the Trust Agreement, and incorrect income tax filings.

Sentiment

Score: 1

Explanation: StockSavvy.ai views this filing with extremely negative sentiment. The delisting, going concern warning, significant cash depletion, and termination of a prior deal indicate severe operational and financial distress, with high uncertainty regarding the company's future viability.

Positives

• Net loss for the nine months ended September 30, 2025, decreased to $1,296,493 from $1,430,395 in the prior year, primarily due to a decrease in legal and professional fees.
• Operating expenses for the nine months ended September 30, 2025, decreased to $1,363,344 from $1,724,753 in the prior year, also mainly due to reduced legal and professional fees.
• The company has secured a new Business Combination Agreement with Embed Financial Group Cayman Holdings following the termination of the previous deal with Xtribe P.L.C.

Negatives

• The company was delisted from Nasdaq on March 20, 2025, and its securities now trade on the OTC Markets, which may result in limited trading volume and adverse effects on investor interest.
• Management has identified substantial doubt about the company's ability to continue as a going concern due to insufficient liquidity and the approaching mandatory liquidation date of February 17, 2026.
• The working capital deficit significantly worsened to $7,463,939 as of September 30, 2025, from $5,813,265 as of December 31, 2024.
• Cash in the operating bank account is $0 as of September 30, 2025.
• The company terminated its Amended and Restated Business Combination Agreement with Xtribe P.L.C. on December 2, 2025, after the Form F-4 registration statement had been declared effective.
• Public shareholders have consistently exercised redemption rights during extension votes, significantly depleting the Trust Account from an initial $116,150,000 to $2,976,212 as of September 30, 2025.
• Total liabilities increased to $11,636,655 as of September 30, 2025, from $10,033,343 as of December 31, 2024.
• A material weakness in internal control over financial reporting was identified, related to the protection of funds, non-compliance with the Trust Agreement, and incorrect income tax filings.
• Interest income from the Trust Account decreased significantly to $77,851 for the nine months ended September 30, 2025, from $358,358 in the prior year, reflecting the reduced funds in the Trust Account.

Risks

• There is substantial doubt about the company's ability to continue as a going concern due to insufficient liquidity and the mandatory liquidation date of February 17, 2026, if an Initial Business Combination is not completed.
• The delisting from Nasdaq and trading on the OTC Markets may result in a very limited market for the company's securities, price volatility, reduced institutional investor interest, and difficulty in raising capital.
• The inability to complete an Initial Business Combination by February 17, 2026, will lead to the liquidation of the Trust Account, and the Rights, Public Warrants, and Private Placement Warrants will expire worthless.
• The company may not be able to distribute funds from the Trust Account upon liquidation due to claims of creditors that may take priority over public stockholders.
• The 1% U.S. federal excise tax on stock repurchases (Inflation Reduction Act of 2022) may reduce cash available for a business combination, as the company will not use Trust Account proceeds to pay this tax.
• The company faces a demand letter from Xtribe P.L.C. asserting claims related to an alleged breach of the terminated business combination agreement, which could lead to legal proceedings and financial liabilities.
• The material weakness in internal control over financial reporting could adversely affect the company's ability to record, process, summarize, and report financial information reliably.

Future Outlook

The company's ability to commence operations is contingent upon consummating a business combination. Management's plan to address the February 17, 2026 liquidation date is to complete its Initial Business Combination. If unable to do so, the company will redeem 100% of outstanding Public Shares and seek to dissolve and liquidate. The company believes it will need to access additional liquidity to consummate an Initial Business Combination.

Management Comments

• Management has determined that there is substantial doubt about the company's ability to continue as a going concern due to the uncertainty of liquidity requirements and the mandatory liquidation date within one year.
• Management's plan to address the February 17, 2026 liquidation is to complete its Initial Business Combination.
• The company believes the claims from Xtribe P.L.C. are without merit and intends to defend against them vigorously.

Industry Context

StockSavvy.ai notes that WinVest Acquisition Corp.'s situation reflects the increasing challenges faced by Special Purpose Acquisition Companies (SPACs) in the current market environment. The repeated extensions, significant shareholder redemptions, and ultimate delisting from Nasdaq highlight the difficulty many SPACs encounter in identifying and successfully closing a suitable business combination within their mandated timelines. The termination of the Xtribe deal, despite an effective F-4, further underscores the complexities and potential pitfalls in de-SPAC transactions. The shift to OTC Markets typically reduces liquidity and investor appeal, making future capital raises and the completion of a business combination even more arduous. This scenario is indicative of a broader trend where SPACs that fail to execute quickly or find compelling targets face severe consequences, including liquidation.

Comparison to Industry Standards

• WinVest's delisting from Nasdaq for failing to complete a business combination within 36 months is a significant underperformance compared to successful SPACs like DraftKings (merged with Diamond Eagle Acquisition Corp.) or Lucid Motors (merged with Churchill Capital Corp IV), which successfully completed their de-SPAC transactions and maintained major exchange listings.
• The high rate of shareholder redemptions, which reduced the Trust Account from $116.15 million to $2.98 million, is indicative of poor investor confidence and is significantly worse than the redemption rates seen in successful SPACs, where a substantial portion of the trust value is retained for the combined entity.
• The repeated reliance on the Sponsor for extension notes and working capital loans, totaling over $3.5 million, suggests a lack of independent funding and a precarious financial position, contrasting sharply with well-capitalized SPACs that maintain sufficient funds for operational expenses and deal-making.
• The termination of a business combination agreement after the Form F-4 was declared effective, as seen with Xtribe, is a negative outlier compared to industry best practices, where such advanced stages typically lead to deal completion, indicating potential issues with due diligence, valuation, or target viability.

Corporate Governance

Legal Proceedings

• On December 17, 2025, the company received a demand letter from counsel to Xtribe P.L.C. asserting claims related to an alleged breach of the terminated business combination agreement. The company denies the allegations and intends to defend against them vigorously. No legal proceeding has been commenced as of the filing date.

Related Party Transactions

• The Sponsor, WinVest SPAC LLC, purchased 2,875,000 Founder Shares for $25,000.
• The Sponsor purchased 10,900,000 Private Placement Warrants for $5,450,000 and an additional 900,000 Private Placement Warrants for $450,000.
• The company issued the March 2021 Promissory Note to the Sponsor, with $300,000 outstanding as of September 30, 2025.
• The company issued the October 2023 Promissory Note to the Sponsor, with $1,000,000 outstanding as of September 30, 2025.
• The company issued the January 2025 Promissory Note to the Sponsor, with $300,796 outstanding as of September 30, 2025.
• The company issued multiple Extension Notes (First through Seventh) to the Sponsor, totaling $1,950,000 outstanding as of September 30, 2025, to fund extensions of the business combination deadline.
• The company has an agreement to pay the Sponsor a monthly fee of $10,000 for office space, secretarial, and administrative support services, with $405,000 owed as of September 30, 2025.

Stakeholder Impact

• Shareholders: Public shareholders who did not redeem their shares face significant risk of loss if a business combination is not completed, as their Rights and Warrants will expire worthless. The delisting to OTC Markets also impacts liquidity and potentially the value of their holdings.
• Sponsor: The Sponsor has provided substantial loans to the company, totaling over $3.5 million, which are at risk if a business combination is not consummated and the company liquidates. The Sponsor's Private Placement Warrants are also at risk of becoming worthless.
• Creditors: In the event of liquidation, creditors' claims may take priority over public stockholders, potentially reducing or eliminating distributions to shareholders.
• Underwriters: Deferred underwriting commissions of $4,025,000 will only be paid upon the consummation of an Initial Business Combination, placing these fees at risk.

Next Steps

• Consummate the new Business Combination Agreement with Embed Financial Group Cayman Holdings by February 17, 2026.
• Address the material weakness in internal control over financial reporting.
• Defend against the demand letter from Xtribe P.L.C. regarding alleged breach of the terminated business combination agreement.
• Manage liquidity needs, potentially through additional loans from the Sponsor, to cover corporate filing, compliance, and due diligence expenses.

Key Dates

Recommendation

The company faces severe existential threats, including a Nasdaq delisting, a going concern warning, and a rapidly approaching liquidation deadline. The significant depletion of the Trust Account due to high redemptions, coupled with increasing liabilities and reliance on related-party loans, indicates a highly precarious financial position. The termination of a prior business combination agreement and the ongoing legal dispute add further uncertainty. Given these compounding negative factors and the high probability of liquidation, the stock carries extreme risk with minimal upside potential, warranting a strong sell recommendation.

Keywords

SPAC, blank check company, business combination, delisting, going concern, redemptions, promissory notes, Trust Account, OTC Markets, corporate governance, financial reporting, risk management, liquidation, warrants, rights, extension