10-Q: WinVest Faces Liquidation, Delisting After Failed Merger

WinVest Acquisition Corp. reported increased losses and a significant working capital deficit, terminated its business combination with Xtribe, and was delisted from Nasdaq, raising substantial doubt about its ability to continue as a going concern.

Summary

• Net loss for the six months ended June 30, 2025, increased to $1,000,101 from $546,653 in the prior year.
• Operating expenses rose to $1,044,175 for the six months ended June 30, 2025, compared to $778,261 for the same period in 2024, primarily due to increased legal and professional fees.
• The company terminated its business combination agreement with Xtribe P.L.C. 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 was delisted from Nasdaq on March 20, 2025, and its securities now trade on the OTC Markets.
• As of June 30, 2025, the company had a working capital deficit of $7,045,944 and $0 cash in its operating bank account.
• The termination date for completing an Initial Business Combination has been extended multiple times, most recently to February 17, 2026, through various extension notes from the Sponsor.
• Public share redemptions continued, with 38,215 shares redeemed for approximately $511,042 in September 2025, further reducing the number of outstanding public shares.

Sentiment

Score: 2

Explanation: StockSavvy.ai views this filing as highly negative due to the significant financial deterioration, repeated failures to complete a business combination, Nasdaq delisting, and explicit 'going concern' warning, indicating severe operational and strategic challenges.

Positives

• Secured a new business combination agreement with Embed Financial Group Cayman Holdings on December 2, 2025, after terminating the previous one.
• Successfully extended the business combination termination date multiple times, most recently to February 17, 2026, through sponsor loans.
• The Sponsor continues to provide financial support through various promissory and extension notes, totaling $2,070,000 deposited into the Trust Account for extensions.

Negatives

• Net loss significantly increased to $1,000,101 for the six months ended June 30, 2025, from $546,653 in the prior year.
• Operating expenses rose to $1,044,175 for the six months ended June 30, 2025, from $778,261 in the prior year, driven by higher legal and professional fees.
• Interest income decreased substantially to $51,074 for the six months ended June 30, 2025, from $284,608 in the prior year.
• Working capital deficit worsened to $7,045,944 as of June 30, 2025, from $5,813,265 as of December 31, 2024.
• Cash in the operating bank account is $0 as of June 30, 2025.
• Delisted from Nasdaq on March 20, 2025, due to failure to complete a business combination within the required timeframe, now trading on OTC Markets.
• Terminated the previously announced business combination with Xtribe P.L.C. on December 2, 2025.
• Accumulated deficit grew to $(11,161,859) as of June 30, 2025, from $(9,935,987) as of January 1, 2025.
• A material weakness in internal control over financial reporting was identified, related to Trust Account funds, Trust Agreement compliance, and income tax filings.

Risks

• 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.
• No assurance that the new business combination with Embed Financial Group Cayman Holdings will be consummated prior to the termination date.
• Delisting from Nasdaq may adversely affect institutional investor interest, reduce trading volume, and make it difficult to raise capital or find other merger partners.
• The company's securities trading on the OTC Markets may experience limited market liquidity and increased price volatility.
• Potential for the 1% excise tax on stock repurchases under the Inflation Reduction Act of 2022, which could reduce cash available for a business combination.
• Risk of claims from creditors taking priority over public stockholders in the event of liquidation.
• Legal claims from Xtribe P.L.C. for alleged breach of the terminated business combination agreement, which the company intends to defend vigorously.
• Inability to obtain necessary funds from the Sponsor or third parties could force the company to cease searching for a target business and liquidate.
• The ordinary shares of the combined company being listed on Nasdaq is a condition to the closing of the Initial Business Combination, which is a material risk given the current delisting.

Future Outlook

The company's ability to commence core 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. There is no assurance that any required future financing can be successfully completed, and the company may be forced to cease searching for a target business and liquidate if it cannot obtain necessary funds.

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 is emblematic of the increasing challenges faced by Special Purpose Acquisition Companies (SPACs) in a more scrutinizing market environment. The repeated extensions, significant redemptions, and ultimate delisting from Nasdaq highlight the difficulties in identifying and consummating suitable business combinations within the mandated timelines. The termination of the Xtribe deal and the immediate pursuit of a new target, Embed Financial Group Cayman Holdings, underscores the intense pressure to complete a transaction before the liquidation deadline. The substantial reliance on sponsor funding for operational expenses and extensions, coupled with a worsening working capital deficit, reflects a common pattern among SPACs nearing their expiration without a definitive path forward, often leading to a 'race against the clock' scenario.

Comparison to Industry Standards

• WinVest's repeated extensions and high redemption rates are significantly worse than the industry average for successful SPACs, which typically complete a business combination within 24 months and experience lower redemption rates prior to a definitive deal.
• The delisting from Nasdaq and subsequent trading on OTC Markets is a severe negative deviation from industry standards, as a primary benefit of SPACs is access to major exchanges for the target company. This contrasts sharply with successful SPACs like DraftKings (DEAC) or Lucid Motors (CCIV), which maintained their major exchange listings post-merger.
• The termination of a definitive business combination agreement (Xtribe) after filing an F-4 registration statement is a notable setback, indicating significant due diligence or negotiation issues, unlike SPACs that successfully close their initial announced deals.
• The substantial working capital deficit and reliance on related-party promissory notes for operational liquidity are indicative of a SPAC struggling to manage its burn rate and find a viable target, contrasting with well-capitalized SPACs that maintain sufficient funds for operations and deal-making.

Corporate Governance

Legal Proceedings

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

Related Party Transactions

• Sponsor (WinVest SPAC LLC) purchased 2,875,000 Founder Shares for $25,000.
• Sponsor purchased 10,900,000 Private Placement Warrants for $5,450,000 and an additional 900,000 Private Placement Warrants for $450,000.
• Company issued an unsecured promissory note to the Sponsor (March 2021 Promissory Note) for up to $300,000, with $300,000 outstanding as of June 30, 2025.
• Company issued an unsecured promissory note to the Sponsor (October 2023 Promissory Note) for up to $1,000,000, with $1,000,000 outstanding as of June 30, 2025.
• Company issued an unsecured promissory note to the Sponsor (January 2025 Promissory Note) for up to $1,000,000, with $213,156 outstanding as of June 30, 2025.
• Sponsor provided multiple Extension Notes (First through Seventh) totaling $2,070,000 deposited into the Trust Account for extensions, with $1,860,000 outstanding as of June 30, 2025.
• Company has an Administrative Support Agreement to pay the Sponsor a monthly fee of $10,000 for office space, secretarial, and administrative support services; $405,000 owed as of June 30, 2025.

Stakeholder Impact

• Shareholders: Face significant risk of loss due to the "going concern" warning, Nasdaq delisting, limited trading market on OTC, and potential for liquidation if a business combination is not completed. Public shareholders who redeemed their shares received cash, but those holding non-redeemable shares or warrants face substantial uncertainty.
• Sponsor: Continues to provide significant financial support through loans, indicating a vested interest in completing a business combination, but also bears the risk of these loans not being repaid if liquidation occurs.
• Target Company (Embed Financial Group Cayman Holdings): The success of their potential business combination is tied to WinVest's ability to overcome its financial and operational challenges and secure a listing.
• Creditors: Face risk if the company liquidates and assets outside the Trust Account are insufficient to cover claims, although the Sponsor has agreed to cover liquidation expenses if funds are insufficient.
• Underwriters (Chardan Capital Markets, LLC): Deferred underwriting commissions of $4,025,000 are contingent on the completion of an Initial Business Combination, which remains uncertain. Chardan also terminated its M&A Agreement.

Next Steps

• Consummate the new Initial Business Combination with Embed Financial Group Cayman Holdings by February 17, 2026.
• Address the material weakness in internal control over financial reporting.
• Defend against legal claims from Xtribe P.L.C. regarding the terminated business combination agreement.
• Seek additional liquidity if needed to consummate the Initial Business Combination.
• If a business combination is not completed by February 17, 2026, the company will redeem public shares and liquidate.

Key Dates

Recommendation

The company faces severe existential threats, including a 'going concern' warning, a significant working capital deficit, and a mandatory liquidation date in less than a year. The delisting from Nasdaq to the OTC Markets severely limits liquidity and investor interest. The termination of a prior business combination and the ongoing uncertainty surrounding the new deal, coupled with increasing losses and identified material weaknesses in internal controls, present an extremely high-risk profile with little to no clear path to value creation for current shareholders. The reliance on related-party loans for survival further underscores the precarious financial position.

Keywords

SPAC, blank check company, business combination, liquidation, Nasdaq delisting, OTC Markets, WinVest Acquisition Corp., WINV, financial reporting, risk factors, extension notes, promissory notes, related party transactions, working capital deficit, going concern, Xtribe, Embed Financial Group Cayman Holdings, redemptions, internal controls