10-Q: WinVest Faces Liquidity Doubts, Delisting, New Deal

WinVest Acquisition Corp. reports significant net losses, ongoing liquidity concerns, and a Nasdaq delisting, while pursuing a new business combination after terminating its prior agreement.

Summary

• WinVest Acquisition Corp. (WINV) is a blank check company (SPAC) that has not commenced core operations, focusing solely on completing a business combination.
• The company reported a net loss of $708,544 for the three months ended March 31, 2025, a substantial increase from $106,446 for the same period in 2024.
• Operating expenses surged to $730,258 for Q1 2025, up from $225,101 in Q1 2024, primarily due to increased legal and professional fees related to business combination efforts.
• Interest income significantly decreased to $25,714 in Q1 2025 from $142,655 in Q1 2024.
• The company was delisted from Nasdaq on March 20, 2025, for failing to complete a business combination by the extended deadline of March 17, 2025, and its securities now trade on the OTC Markets.
• WinVest terminated its business combination agreement with Xtribe P.L.C. on December 2, 2025, and subsequently entered into a new agreement with Embed Financial Group Cayman Holdings on the same date, which has not yet been consummated.
• The company has a working capital deficit of $6,637,935 as of March 31, 2025, and management has identified substantial doubt about its ability to continue as a going concern due to insufficient liquidity and the mandatory liquidation date of February 17, 2026.
• Multiple extension notes and promissory notes from the Sponsor total $1,770,000 (Extension Notes) and $1,422,202 (Promissory Notes) as of March 31, 2025, used to fund operations and extend the business combination deadline.
• An excise tax liability of $182,130 has been recorded for stock redemptions under the Inflation Reduction Act of 2022.
• Public share redemptions have significantly reduced the Trust Account balance and outstanding public shares across multiple extension votes, with 220,036 public shares remaining outstanding as of September 16, 2025.

Sentiment

Score: 2

Explanation: StockSavvy.ai views this filing as highly negative due to significant financial deterioration, a Nasdaq delisting, ongoing liquidity issues, and the termination of a key business combination, all pointing to severe operational and strategic challenges.

Positives

• Successfully secured multiple extensions for the business combination deadline, currently until February 17, 2026, through Sponsor loans.
• Entered into a new business combination agreement with Embed Financial Group Cayman Holdings after terminating the previous one, indicating continued pursuit of its SPAC objective.
• The F-4 registration statement for the Xtribe business combination was declared effective by the SEC on March 31, 2025, demonstrating progress on that specific transaction before its termination.

Negatives

• Net loss for the three months ended March 31, 2025, significantly increased to $708,544 from $106,446 for the same period in 2024.
• Operating expenses more than tripled to $730,258 in Q1 2025 from $225,101 in Q1 2024, primarily due to increased legal and professional fees.
• Interest income sharply declined to $25,714 in Q1 2025 from $142,655 in Q1 2024.
• Delisted from Nasdaq on March 20, 2025, and now trades on the less liquid OTC Markets, which may adversely affect institutional investor interest and capital raising ability.
• Management expressed substantial doubt about the company's ability to continue as a going concern due to a working capital deficit of $6,637,935 as of March 31, 2025, and insufficient liquidity.
• The business combination agreement with Xtribe P.L.C. was terminated on December 2, 2025, after significant effort and regulatory filings.
• A material weakness in internal control over financial reporting was identified, related to Trust Account funds, Trust Agreement compliance, and income tax filings.
• Ongoing shareholder redemptions have drastically reduced the number of public shares and the Trust Account balance across multiple extension votes.

Risks

• Uncertainty regarding the consummation of the Initial Business Combination with Embed Financial Group Cayman Holdings by the current Termination Date of February 17, 2026.
• Delisting from Nasdaq to OTC Markets may lead to limited trading volume, price volatility, reduced institutional investor interest, and difficulty in raising capital.
• The company does not currently meet Nasdaq listing standards, which is a condition for the closing of the new Initial Business Combination, posing a material risk to its completion.
• Potential for further redemptions by stockholders in connection with future extension votes or the business combination vote, which could leave insufficient cash to consummate a deal.
• Exposure to a 1% U.S. federal excise tax on stock repurchases under the Inflation Reduction Act of 2022, which could reduce cash available for a business combination.
• Claims from Xtribe P.L.C. alleging breach of the terminated business combination agreement, which the company intends to defend against vigorously.
• Reliance on the Sponsor for ongoing loans to fund operations and extensions, with no obligation for the Sponsor to provide such funds.
• Risk of liquidation if a business combination is not completed by the Termination Date, resulting in Public Warrants and Rights expiring worthless.
• Material weakness in internal control over financial reporting related to Trust Account funds, Trust Agreement compliance, and income tax filings.

Future Outlook

The company continues to seek an Initial Business Combination, having recently terminated its agreement with Xtribe P.L.C. and entered a new agreement with Embed Financial Group Cayman Holdings. The current deadline for consummating a business combination is February 17, 2026, with ongoing reliance on Sponsor loans for extensions and operational funding. The delisting from Nasdaq to OTC Markets is expected to create a very limited trading market and may adversely affect the ability to raise capital or attract a suitable merger partner.

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.
• The Company believes the claims [from Xtribe P.L.C.] are without merit and intends to defend against them vigorously.
• We believe we will need to access additional liquidity in order to consummate an Initial Business Combination.

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. High redemption rates, difficulty in identifying and closing suitable business combinations within mandated timelines, and increased regulatory scrutiny (like the 1% excise tax) are common pressures. The delisting from Nasdaq to the OTC Markets is a significant setback, often seen in SPACs that fail to complete a deal, further complicating their ability to attract quality targets and investor interest. The termination of one business combination agreement and the immediate pursuit of another highlights the intense pressure on SPACs to find a target before their liquidation deadline.

Comparison to Industry Standards

• WinVest's high redemption rates across multiple extension votes are indicative of a broader trend in the SPAC market where public shareholders increasingly redeem their shares rather than holding through extensions, especially as the trust value per share increases. For example, many SPACs in 2023-2024 saw redemption rates exceeding 90%, similar to WinVest's experience.
• The delisting from Nasdaq to OTC Markets is a common outcome for SPACs that fail to complete a de-SPAC transaction within the required timeframe, impacting liquidity and investor perception compared to actively traded SPACs like those that successfully merged with companies such as Lucid Group (LCID) or DraftKings (DKNG) in earlier, more favorable market conditions.
• The reliance on Sponsor loans for extensions and working capital is standard practice for SPACs nearing their termination dates, but WinVest's accumulated related-party debt of over $3.1 million (extension and promissory notes) is substantial relative to its remaining Trust Account balance, indicating significant financial strain compared to more robust SPACs.
• The identified material weakness in internal controls, particularly concerning Trust Account funds and tax compliance, falls below the governance standards expected of publicly traded entities, contrasting with well-managed SPACs that maintain stringent financial controls throughout their lifecycle.

Corporate Governance

Legal Proceedings

• Received a demand letter from counsel to Xtribe P.L.C. on December 17, 2025, asserting claims related to an alleged breach of the terminated business combination agreement.
• Company counsel responded on December 29, 2025, denying all allegations, and the company believes the claims are without merit and intends to defend vigorously.
• No legal proceeding has been formally commenced as of the date of the financial statements.

Related Party Transactions

• Sponsor purchased 2,875,000 Founder Shares for $25,000 on March 16, 2021.
• Sponsor purchased 10,900,000 Private Placement Warrants for $5,450,000 and an additional 900,000 Private Placement Warrants for $450,000.
• March 2021 Promissory Note: Unsecured, non-interest bearing note to Sponsor for up to $300,000, with $300,000 outstanding as of March 31, 2025. Convertible into private warrants.
• October 2023 Promissory Note: Unsecured, non-interest bearing note to Sponsor for up to $1,000,000, with $1,000,000 outstanding as of March 31, 2025.
• January 2025 Promissory Note: Unsecured, non-interest bearing note to Sponsor for up to $1,000,000, with $122,202 drawn as of March 31, 2025.
• Extension Notes (First through Seventh): Unsecured, non-interest bearing notes from Sponsor to fund extensions of the business combination deadline. Total outstanding $1,770,000 as of March 31, 2025. Some are convertible into private warrants.
• Administrative Support Agreement: Monthly fee of $10,000 paid to Sponsor for office space, secretarial, and administrative support. $375,000 owed as of March 31, 2025.

Stakeholder Impact

• Shareholders (Public): Face significant risk of loss if a business combination is not completed, as Warrants and Rights would expire worthless. Delisting to OTC Markets reduces liquidity and potentially share price. High redemptions indicate declining confidence.
• Shareholders (Sponsor/Founders): Have provided substantial loans to keep the company operational and extend deadlines, indicating significant financial commitment, but also face risk if a business combination is not completed. Their Founder Shares and Private Placement Warrants would be worthless upon liquidation.
• Creditors: The company has significant related-party payables and extension notes, which would be repaid only from funds outside the Trust Account if a business combination is not consummated.
• Potential Target Companies: The company's delisting, liquidity issues, and history of terminating agreements may make it a less attractive merger partner.

Next Steps

• Consummate the new Initial Business Combination with Embed Financial Group Cayman Holdings by February 17, 2026.
• Address the legal claims asserted by Xtribe P.L.C.
• Address the material weakness in internal control over financial reporting.
• Potentially seek further extensions for the business combination deadline if the current one is not met.
• Manage liquidity needs, potentially through further loans from the Sponsor or other financing.

Key Dates

Recommendation

The company faces severe financial distress, evidenced by a substantial working capital deficit, rapidly increasing net losses, and management's explicit declaration of 'substantial doubt about its ability to continue as a going concern.' The delisting from Nasdaq to the illiquid OTC Markets significantly diminishes investor confidence and future capital-raising prospects. While a new business combination agreement has been announced, the termination of the previous deal and the ongoing legal dispute with Xtribe introduce considerable uncertainty and risk. The continuous reliance on related-party loans and high redemption rates further underscore the precarious financial position, making the stock a high-risk, speculative investment with a strong likelihood of further value erosion.

Keywords

SPAC, WinVest Acquisition Corp., WINV, Business Combination, Nasdaq Delisting, Liquidity, Going Concern, Xtribe, Embed Financial Group, Extension Notes, Promissory Notes, Share Redemptions, OTC Markets, SEC Filing, Financial Reporting, Risk Factors