Eureka Acquisition Corp (EURK) - 10-Q Summary
Business Context and Reporting Period
Company: Eureka Acquisition Corp (Cayman Islands SPAC)
Reporting Period: Quarterly period ended June 30, 2024 (Nine months from inception).
Business Status: The Company is a blank check company formed on June 13, 2023, with no specific business combination under consideration as of the balance sheet date. Operations are limited to organizational activities and the preparation for an Initial Public Offering (IPO). The Company focuses initially on Asia, including the PRC and Hong Kong.
Subsequent Event: The Company consummated its IPO on July 3, 2024, and the full over-allotment option on July 8, 2024, raising significant capital post-balance sheet date.
Key Financial Metrics (As of June 30, 2024)
| Metric | Value |
|---|---|
| Cash and Cash Equivalents | $57,877 |
| Total Assets | $289,657 |
| Total Liabilities | $383,230 |
| Shareholder's Deficit | ($93,573) |
| Working Capital Deficiency | ($317,879) |
| Net Loss (3 Months Ended June 30, 2024) | ($29,349) |
| Net Loss (9 Months Ended June 30, 2024) | ($113,248) |
| Net Loss Per Share (Basic & Diluted) | ($0.02) (3 Months) / ($0.09) (9 Months) |
| Debt (Promissory Note - Related Party) | $369,011 |
| Deferred Offering Costs | $224,306 |
Material Changes vs. Prior Period
- Liquidity: Cash increased from $0 as of September 30, 2023, to $57,877 as of June 30, 2024, driven by borrowings from the Sponsor via a promissory note.
- Liabilities: Total liabilities increased from $264,427 to $383,230. This was primarily due to an increase in the related-party promissory note balance from $104,011 to $369,011 to fund IPO-related expenses.
- Equity: Shareholder's equity shifted from a positive balance of $19,675 to a deficit of ($93,573) due to the accumulation of formation and operating costs exceeding the initial capital contribution.
- Operations: The Company incurred $113,248 in formation and operating costs for the nine months ended June 30, 2024, compared to $3,957 for the period from inception to June 30, 2023.
Outlook, Risks, and Subsequent Events
Post-Balance Sheet IPO (July 2024):
- Primary Offering: Sold 5,000,000 Units at $10.00/unit, generating $50,000,000 gross proceeds.
- Over-Allotment: Underwriters exercised the full option for 750,000 additional Units, generating $7,500,000 gross proceeds.
- Private Placement: Sponsor purchased 228,000 Private Units (Initial + Additional) for $2,280,000 total.
- Trust Account: $57,500,000 was deposited into the Trust Account ($10.00 per Public Unit).
- Debt Repayment: The outstanding promissory note balance of approximately $481,511 was repaid using IPO proceeds.
Going Concern: Management has raised substantial doubt about the Company's ability to continue as a going concern as of June 30, 2024, due to the working capital deficiency and the requirement to complete a business combination by July 3, 2025 (extendable to January 3, 2026). The financial statements do not include adjustments related to this uncertainty.
Risks:
- Geopolitical: Potential adverse impact from conflicts in Ukraine and the Middle East on the ability to consummate a business combination or raise financing.
- Extension Costs: To extend the combination period, the Sponsor must deposit $575,000 per three-month extension.
- Liquidity: Pre-IPO, the Company relied entirely on related-party loans. Post-IPO, liquidity is secured by the Trust Account and working capital held outside the trust.
Investor Verification Checklist
- Trust Account Balance: Verify the final deposit of $57,500,000 into the Trust Account following the July 2024 IPO and over-allotment exercise.
- Debt Settlement: Confirm the full repayment of the $369,011 (and subsequent accruals) promissory note to the Sponsor using IPO proceeds.
- Share Structure: Verify the conversion of Class B Founder Shares to Class A shares and the status of the 187,500 shares previously subject to forfeiture (now vested due to over-allotment).
- Extension Terms: Review the specific terms for the $575,000 per quarter extension fee required if a business combination is not completed by July 3, 2025.
- Representative Shares: Confirm the issuance of 230,000 Representative Shares to the underwriter as part of the underwriting compensation.