Business Context and Reporting Period
Soulpower Acquisition Corp. (SOUL) is a Cayman Islands exempted company and blank check entity formed to effect a business combination. This Form 10-Q covers the quarter ended March 31, 2026. The Company completed its Initial Public Offering (IPO) in April 2025, raising $250 million, and entered into a Business Combination Agreement (BCA) on November 24, 2025, with SWB LLC to form SOUL WORLD BANK, an international digital banking institution. As of the reporting date, the transaction has not closed and remains subject to regulatory and shareholder approvals.
Key Financial Metrics
| Metric | Q1 2026 | Q1 2025 |
|---|---|---|
| Net Income (Loss) | $1,580,333 | $(179,718) |
| Operating Expenses | $685,558 | $179,908 |
| Interest Income (Trust Account) | $2,265,236 | $0 |
| Cash (Outside Trust) | $56,403 | $3,286 |
| Cash Held in Trust | $259,885,212 | $0 |
| Working Capital | $(863,801) | N/A |
| Loans Payable (Sponsor) | $2,257,906 | $0 |
| Deferred Underwriting Fees | $10,600,000 | $0 |
Material Changes vs. Prior Period
- Profitability Shift: The Company reported a net income of $1.58 million in Q1 2026, a reversal from a net loss of $180,000 in Q1 2025. This is primarily driven by $2.27 million in interest income earned on the Trust Account, which was established following the April 2025 IPO.
- Expense Growth: General and administrative costs increased significantly to $685,558 from $179,908 in the prior year, reflecting the operational costs of a public company pursuing a business combination.
- Liquidity Position: Cash held outside the Trust Account decreased to $56,403 from $207,108 at year-end 2025. The Company now has negative working capital of $863,801.
- Debt Financing: The Company increased its reliance on related-party financing, with loans payable to the Sponsor rising to $2.26 million, up from $988,480 at December 31, 2025.
Outlook, Risks, and Management Commentary
- Going Concern Warning: Management has determined that substantial doubt exists regarding the Company's ability to continue as a going concern for at least one year. Cash on hand and available financing are insufficient to fund projected operating costs through the combination period (currently April 3, 2027) without additional funding or the completion of the business combination.
- Proposed Transaction: The BCA with SWB LLC targets an implied pre-money transaction value of approximately $8.1 billion. The combined entity plans to operate as a digital banking institution. Closing is contingent on regulatory approvals and shareholder votes.
- Financing Needs: The Company has entered into two unsecured promissory notes (A Note and B Note) with a related party to fund working capital. The B Note ($2.5 million capacity) is interest-free and will be forgiven upon a successful business combination; otherwise, it becomes due upon liquidation.
- Risks: Risks include the failure to consummate the business combination, inability to secure additional financing, and geopolitical or economic uncertainties affecting the target's operations or the Company's ability to raise capital.
Investor Verification Checklist
- Going Concern Status: Verify the Company's ability to secure additional working capital if the business combination is delayed beyond the current deadline.
- Transaction Closing Conditions: Monitor progress on regulatory approvals and shareholder votes required to close the SWB LLC merger.
- Related Party Loans: Review the terms of the A Note (22% flat interest charge) and B Note (forgivable upon closing) to understand potential dilution or cash outflow risks.
- Trust Account Growth: Confirm the interest rate environment's impact on the Trust Account balance, which determines the redemption value for public shareholders.
- Redemption Rights: Assess the likelihood of significant shareholder redemptions, which could impact the cash available for the post-combination entity.