Pearl Holdings Acquisition Corp Reports Significant Financial Changes in Latest 10-Q Filing

Pearl Holdings Acquisition Corp, a blank check company incorporated in the Cayman Islands, reported significant financial changes in its latest 10-Q filing for the period ending September 30, 2024. The company, which has not yet commenced operations, is focused on identifying potential merger or acquisition targets in the lifestyle, health and wellness, and technology sectors.

As of September 30, 2024, Pearl Holdings had cash of $206,509, a substantial increase from $30,793 as of December 31, 2023. Total current assets rose to $236,194 from $30,793 in the previous fiscal period. However, total current liabilities surged to $2,981,804 from $922,381, resulting in a shareholders' deficit of $(9,745,610), up from $(7,891,588) at the end of 2023.

The company reported a net loss of $(267,292) for the three months ended September 30, 2024, a stark contrast to a net income of $2,627,225 for the same period in 2023. For the nine months ended September 30, 2024, the net loss was $(1,033,795), compared to a net income of $6,871,674 in the prior year. This decline in profitability was attributed to increased operating costs, which rose to $862,844 from $533,573, and a significant drop in interest income from investments held in the Trust Account, which fell to $820,228 from $7,405,247 year-over-year.

The company’s cash flow from operating activities also deteriorated, with $(186,057) used in operations for the nine months ended September 30, 2024, compared to cash provided of $7,122,730 in the same period of 2023. In contrast, net cash provided by investing activities increased significantly to $23,644,203, up from cash used of $(7,405,247) in the previous year.

Pearl Holdings has faced challenges regarding compliance with Nasdaq listing requirements, having received a notice of non-compliance in June 2023. However, the company successfully transferred the listing of its warrants to the Nasdaq Capital Market in June 2024, regaining compliance.

The company has extended its Combination Period for completing its Initial Business Combination from December 17, 2023, to December 17, 2024, and has entered into various subscription agreements to bolster its working capital. As of September 30, 2024, the company had received a total of $1,182,000 from these agreements.

Despite these developments, the company has raised concerns about its ability to continue as a going concern, citing insufficient financial resources to sustain operations for at least one year from the issuance date of the financial statements. The management is also evaluating the potential impact of geopolitical risks on its financial position and operations.