ption Growth Acquisition (IGTA) - 2025 Q2 - Quarterly Report

PART I – FINANCIAL INFORMATION This section presents the company's unaudited condensed consolidated financial statements and management's discussion and analysis of financial condition and results of operations Item 1. Unaudited Condensed Consolidated Financial Statements This section presents the company's unaudited condensed consolidated financial statements, including the balance sheets, statements of operations, changes in shareholders' deficit, and cash flows, along with detailed notes explaining the company's organization, accounting policies, IPO, private placement, related party transactions, shareholder equity, segment information, commitments, income tax, and subsequent events Condensed Consolidated Balance Sheets This table presents the company's condensed consolidated balance sheet data as of the specified periods Condensed Consolidated Balance Sheets (in USD) | Metric | June 30, 2025 (Unaudited) | December 31, 2024 | | :-------------------------------- | :------------------------ | :---------------- | | Cash | $59,063 | $4,295 | | Cash and investments held in Trust Account | $2,138,322 | $3,605,750 | | Total Assets | $2,254,885 | $3,610,045 | | Total Current Liabilities | $4,624,473 | $4,129,427 | | Total Liabilities | $6,874,473 | $6,379,427 | | Total Shareholders' Deficit | $(6,757,910) | $(6,375,132) | | Common stock subject to possible redemption | $2,138,322 | $3,605,750 | Unaudited Condensed Consolidated Statements of Operations This table presents the company's unaudited condensed consolidated statements of operations for the specified periods Unaudited Condensed Consolidated Statements of Operations (in USD) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Formation, general and administrative expense | $(503,808) | $(203,825) | $(670,122) | $(458,343) | | Dividend income | $33,301 | $377,360 | $71,249 | $798,010 | | Net (Loss) Income | $(470,507) | $134,091 | $(598,873) | $262,120 | | Basic and diluted net (loss) income per share (redeemable) | $(0.04) | $0.10 | $0.04 | $0.19 | | Basic and diluted net loss per share (non-redeemable) | $(0.17) | $(0.05) | $(0.23) | $(0.10) | Unaudited Condensed Consolidated Statements of Changes in Shareholders' Deficit This table presents the company's unaudited condensed consolidated statements of changes in shareholders' deficit for the specified periods Unaudited Condensed Consolidated Statements of Changes in Shareholders' Deficit (in USD) | Metric | June 30, 2025 | March 31, 2025 | January 1, 2025 | June 30, 2024 | March 31, 2024 | January 1, 2024 | | :------------------------------------------ | :------------ | :------------- | :-------------- | :------------ | :------------- | :-------------- | | Total shareholders' deficit (End of Period) | $(6,757,910) | $(6,575,045) | $(6,375,132) | $(5,511,704) | $(4,828,065) | $(4,235,444) | | Net loss (3 months ended June 30) | $(470,507) | N/A | N/A | $134,091 | N/A | N/A | | Net loss (6 months ended June 30) | $(598,873) | N/A | N/A | $262,120 | N/A | N/A | | Accretion of carrying value to redemption value (6 months ended June 30) | $228,484 | N/A | N/A | $(1,348,010) | N/A | N/A | Unaudited Condensed Consolidated Statements of Cash Flows This table presents the company's unaudited condensed consolidated statements of cash flows for the specified periods Unaudited Condensed Consolidated Statements of Cash Flows (in USD) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------------ | :----------------------------- | :----------------------------- | | Net (loss) income | $(598,873) | $262,120 | | Net cash used in operating activities | $(395,510) | $(691,270) | | Cash withdrawn from Trust Account (redemption) | $1,238,944 | $19,036,950 | | Net cash provided by investing activities | $1,538,677 | $18,486,950 | | Redemption of common stock (financing activity) | $(1,238,944) | $(19,036,950) | | Net cash used in financing activities | $(1,088,399) | $(17,772,457) | | NET CHANGE IN CASH | $54,768 | $23,223 | | Cash, end of year | $59,063 | $83,663 | Notes to Unaudited Condensed Consolidated Financial Statements This section provides detailed notes to the unaudited condensed consolidated financial statements NOTE 1 – ORGANIZATION AND BUSINESS BACKGROUND This note provides detailed explanations regarding organization and business background - The company is a blank check company incorporated on March 4, 2021, for the purpose of a Business Combination, focusing on businesses with a connection to the Asian market, excluding China[19][20] - As of June 30, 2025, the company had not commenced operations and generates non-operating income from interest on its Trust Account[21] - The Initial Public Offering (IPO) on December 13, 2021, generated gross proceeds of $103,500,000, and a private placement of warrants generated $4,721,250[22][23] - The Trust Account held $104,535,000 after the IPO, invested in U.S. government securities[24] - The company entered into a binding Letter of Intent (LOI) for a business combination with AgileAlgo Pte Ltd. on June 12, 2023, and a definitive Business Combination Agreement on September 12, 2023, valuing AgileAlgo Holdings at $160,000,000[37][43] - The Business Combination Agreement includes an earnout provision for 12.5% of Merger Consideration Shares (2,000,000 shares valued at $20,000,000) subject to vesting based on consolidated gross revenues of Purchaser and its subsidiaries during a three-fiscal-quarter period beginning October 1, 2024, needing to exceed $15,000,000[44] - Multiple extensions to the business combination deadline were approved by stockholders, with deposits into the Trust Account, extending the deadline to September 13, 2025[36][40][45][54][58][66] - Significant share redemptions occurred: 5,873,364 shares for $60,411,251 (March 2023), 1,525,745 shares for $16,140,173 (September 2023), 1,686,707 shares for $19,036,950 (June 2024), 984,194 shares for $11,378,102 (December 2024), and 103,328 shares for $1,238,944 (June 2025)[35][42][46][52][60] - As of June 30, 2025, the company had a cash balance of $59,063, a working capital deficit of $4,507,910, and total current liabilities of $4,624,473, raising substantial doubt about its ability to continue as a going concern[63][67] NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES This note provides detailed explanations regarding summary of significant accounting policies - The financial statements are prepared in accordance with U.S. GAAP and SEC rules, consolidating the company and its 100% owned subsidiary, IGTA Merger Sub Limited[68][69][70] - The company is an 'emerging growth company' and has elected the extended transition period for new accounting standards[71][72] - Cash and investments in the Trust Account are primarily U.S. Treasury securities, presented at fair value (Level 1)[73][81] - Warrants are equity-classified, and common stock subject to possible redemption is classified as temporary equity[76][74][75] - The effective tax rate for the six months ended June 30, 2025, was 20.20% (22.83% in 2024), differing from the 21% statutory rate due to a valuation allowance on deferred tax assets[85][127] - The Inflation Reduction Act's 1% excise tax on stock repurchases resulted in $12,389 for the three months and $190,370 for the six months ended June 30, 2025 and 2024, respectively[86] NOTE 3 – INITIAL PUBLIC OFFERING This note provides detailed explanations regarding initial public offering - The IPO sold 10,350,000 units at $10.00 each, generating $103,500,000, with each unit consisting of one common stock share, one-half redeemable warrant, and one right[90] - Common stock subject to possible redemption is classified as temporary equity, with changes in redemption value recognized immediately as deemed dividends[91][92] - Common stock subject to possible redemption decreased from $3,605,750 at December 31, 2024, to $2,138,322 at June 30, 2025[94] NOTE 4 – PRIVATE PLACEMENT This note provides detailed explanations regarding private placement - Simultaneously with the IPO, 4,721,250 Private Warrants were sold to the Sponsor and underwriters at $1.00 each, generating $4,721,250, with proceeds added to the Trust Account[95] - Private Warrants will expire worthless if a Business Combination is not completed[95] NOTE 5 – RELATED PARTY TRANSACTIONS This note provides detailed explanations regarding related party transactions - Founder shares include 2,587,500 shares issued to the initial shareholder and 50,000 to the underwriter[96][97] - The company had a temporary advance of $654,491 from the Sponsor as of June 30, 2025, which is unsecured, interest-free, and has no fixed repayment terms[98] - A monthly fee of $10,000 is paid to Soul Venture Partners LLC (Sponsor) for administrative services, with an unpaid balance of $430,000 as of June 30, 2025[99] - The Sponsor advanced $1,540,000 through unsecured, interest-free promissory notes as of June 30, 2025, maturing upon the closing of a business combination[100][101] - The Sponsor entered into Non-Redemption Agreements, agreeing to transfer 1,297,500 Founder Shares (valued at $452,026) to non-redeeming stockholders, with 1,271,510 shares transferred by June 13, 2023[108] NOTE 6 – SHAREHOLDERS' DEFICIT This note provides detailed explanations regarding shareholders' deficit - The company is authorized to issue 26,000,000 shares of common stock, with 2,637,500 shares issued and outstanding (excluding redeemable shares) as of June 30, 2025[110] - Each right entitles the holder to one-tenth of one common stock share upon consummation of a Business Combination, but rights will expire worthless if no Business Combination is completed[111][112] - Public Warrants are exercisable for one common stock share at $11.50, becoming exercisable after the Business Combination or 15-21 months from the IPO, and may be called for redemption by the company under certain conditions[113][114][121] - Private Warrants are non-transferable, non-assignable, non-salable until after a Business Combination, exercisable on a cashless basis, and non-redeemable if held by initial purchasers or permitted transferees[115] NOTE 7 – SEGMENT INFORMATION This note provides detailed explanations regarding segment information - The company operates as a single operating segment, with the Chief Financial Officer identified as the Chief Operating Decision Maker (CODM)[118] - The CODM reviews dividend income from Trust Account investments and formation/operating costs to allocate resources and assess financial performance[119][120] NOTE 8 – COMMITMENTS AND CONTINGENCIES This note provides detailed explanations regarding commitments and contingencies - The company is evaluating the impact of global conflicts (COVID-19, Russia-Ukraine, Israel-Palestine) on its financial position and search for a target company, but the specific impact is not yet determinable[122] - The company has registration rights agreements for Founder Shares, Private Warrants, and securities issued in payment of working capital loans[123] - The company is committed to paying a deferred underwriting commission, which was partially settled in October 2024 with 50,000 PubCo Ordinary Shares ($500,000) and a $500,000 promissory note instead of full cash[124] NOTE 9 – INCOME TAX This note provides detailed explanations regarding income tax - The company has a net deferred tax asset of $290,009 as of June 30, 2025, fully offset by a valuation allowance due to significant uncertainty of future realization[125][126] - The income tax provision for the six months ended June 30, 2025, was $0, compared to $77,547 in 2024[126] - The effective tax rate for the six months ended June 30, 2025, was 20.20% (vs. 22.83% in 2024), differing from the statutory 21% primarily due to the valuation allowance[127] NOTE 10 – SUBSEQUENT EVENTS This note provides detailed explanations regarding subsequent events - The company deposited $13,250 into the Trust Account on July 7, 2025, and August 11, 2025, extending the business combination deadline to August 13, 2025, and September 13, 2025, respectively[130][133] - Amendment No. 5 to the Business Combination Agreement extended the outside closing date to October 14, 2025, and set the Earnout Period from October 1, 2025, to June 30, 2026[131] - Amendment No. 6 further amended the Earnout Period to begin April 1, 2026, and conclude December 31, 2026[132] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on the company's financial condition and results of operations. As a blank check company, it has no revenue and has incurred losses from formation costs, relying on securities sales and loans for funding. The company is actively seeking a business combination, having consummated its IPO in December 2021 and a private placement. It expects increased expenses as a public company and due diligence costs. The company reported net losses for the three and six months ended June 30, 2025, contrasting with net income in the prior year, primarily due to higher administrative expenses and lower dividend income. Liquidity is a concern, with a significant working capital deficit and reliance on Trust Account funds and extensions to complete a business combination by September 13, 2025 Overview This section details overview - The company is a blank check company incorporated on March 4, 2021, for the purpose of entering into a business combination[136] - It has no revenue, has incurred losses since inception from formation costs, and relies on securities sales and loans for funding[137] - The IPO on December 13, 2021, generated $103,500,000 from 10,350,000 units, and a private placement generated $4,721,250 from 4,721,250 Private Warrants[138][139] Results of Operations This section details results of operations - The company reported a net loss of $470,507 for the three months ended June 30, 2025, compared to a net income of $134,091 in the prior year[143] - For the six months ended June 30, 2025, the company had a net loss of $598,873, contrasting with a net income of $262,120 in the prior year[143][144] - Net cash used in operating activities was $395,510 for the six months ended June 30, 2025, an improvement from $691,270 used in the prior year[145][146] Liquidity and Capital Resources This section details liquidity and capital resources - As of June 30, 2025, the company had $59,063 in cash and $2,138,322 in investments held in the Trust Account[148][154] - The company faces a working capital deficit of $4,507,910 and total current liabilities of $4,624,473 as of June 30, 2025, raising substantial doubt about its ability to continue as a going concern[63][163] - The business combination deadline has been extended multiple times, currently to September 13, 2025, through deposits into the Trust Account and shareholder approvals[157][161] - The company experienced significant share redemptions, including 103,328 shares for $1,238,944 on June 5, 2025[154] Off-balance Sheet Financing Arrangements This section details off-balance sheet financing arrangements - As of June 30, 2025, the company has no off-balance sheet arrangements[164] Contractual Obligations This section details contractual obligations - The company has no long-term debt, capital lease, operating lease, or other long-term liabilities, apart from a monthly $10,000 administrative service fee payable to its Sponsor[165] - The company is committed to paying a deferred underwriting commission upon the consummation of a business combination[167] Critical Accounting Policies This section details critical accounting policies - The company accounts for warrants as equity-classified instruments[168][170] - Common stock subject to possible redemption is classified as temporary equity, with changes in redemption value recognized immediately[171] - Net income (loss) per share calculations allocate undistributed income/loss and treat accretion to redemption value as deemed dividends[171] Item 3. Quantitative and Qualitative Disclosures about Market Risk As of June 30, 2025, the company is not exposed to material market or interest rate risk. Funds in the Trust Account are invested in short-term U.S. government treasury bills or money market funds, minimizing interest rate exposure - The company was not subject to any material market or interest rate risk as of June 30, 2025[172] - Net proceeds in the Trust Account are invested in short-term U.S. government treasury bills or money market funds, limiting interest rate exposure[172] Item 4. Control and Procedures The Certifying Officers concluded that the company's disclosure controls and procedures were effective as of June 30, 2025. However, the company previously identified material weaknesses in internal control over financial reporting for the year ended December 31, 2023, related to deferred underwriting compensation and non-redemption agreement expenses, which led to a restatement. Remediation efforts are ongoing, focusing on enhancing accounting standard application and communication. No material changes in internal control over financial reporting occurred during the quarter ended June 30, 2025 Evaluation of Disclosure Controls and Procedures This section details evaluation of disclosure controls and procedures - The Certifying Officers concluded that the company's disclosure controls and procedures were effective as of June 30, 2025[173] - Material weaknesses in internal control over financial reporting were identified for the year ended December 31, 2023, concerning deferred underwriting compensation and non-redemption agreement expenses, leading to a restatement[175] - Remediation efforts are underway, including enhanced access to accounting literature and increased communication[176] Changes in Internal Control over Financial Reporting This section details changes in internal control over financial reporting - There were no material changes in internal control over financial reporting during the fiscal quarter ended June 30, 2025[177] PART II – OTHER INFORMATION This section provides additional information including legal proceedings, risk factors, equity sales, and exhibits Item 1. Legal Proceedings As of the filing date of this Form 10-Q, the company is not a party to any legal proceedings - The company is not a party to any legal proceedings as of the filing date[180] Item 1A. Risk Factors There have been no material changes to the risk factors disclosed in the company's final prospectus dated December 8, 2021, other than those stated in the report - No material changes to the risk factors disclosed in the final prospectus dated December 8, 2021, other than as stated in this report[181] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds The company completed its IPO on December 13, 2021, selling 10,350,000 units for $103,500,000, and a private placement of 4,721,250 Private Warrants for $4,721,250. As of June 30, 2025, the Trust Account held approximately $2,138,322 after tax withdrawals, redemptions, and extensions - The IPO on December 13, 2021, involved the sale of 10,350,000 units, generating aggregate gross proceeds of $103,500,000[182] - A private placement of 4,721,250 Private Warrants generated total proceeds of $4,721,250[183] - As of June 30, 2025, the Trust Account held approximately $2,138,322 after tax withdrawals, redemptions, and extensions[185] Item 3. Defaults Upon Senior Securities The company reported no defaults upon senior securities - No defaults upon senior securities were reported[187] Item 4. Mine Safety Disclosures This item is not applicable to the company - This item is not applicable[188] Item 5. Other Information No other information was reported under this item - No other information was reported[189] Item 6. Exhibits This section lists the exhibits filed as part of, or incorporated by reference into, the Quarterly Report on Form 10-Q, including certifications of principal executive and financial officers and Inline XBRL documents - Exhibits include certifications of principal executive and financial officers (31.1, 31.2, 32.1, 32.2) and various Inline XBRL documents (101.INS, 101.SCH, 101.CAL, 101.DEF, 101.LAB, 101.PRE, 104)[191] SIGNATURES This section contains the required signatures for the financial report Signatures The report was signed by Cheuk Hang Chow, Chief Executive Officer (Principal Executive Officer), on August 20, 2025 - The report was signed by Cheuk Hang Chow, Chief Executive Officer (Principal Executive Officer), on August 20, 2025[195]