ShoulderUP Technology Acquisition Corp. (SUAC) has reported a significant decline in its financial performance for the fiscal year ending December 31, 2024, compared to the previous year. The company recorded a net loss of approximately $2.04 million, a stark contrast to a net income of about $0.33 million in 2023. This downturn was primarily driven by increased general and administrative expenses, which rose to approximately $1.28 million from $0.99 million, and a substantial change in the fair value of derivative liabilities, which resulted in a loss of about $0.93 million. The company has not generated any operating revenues to date, as it remains focused on identifying a target for its initial business combination.
In terms of operational developments, ShoulderUP has been actively pursuing a business combination. On March 18, 2024, the company entered into a Business Combination Agreement with CID HoldCo, Inc. and SEE ID, Inc., which is expected to be finalized by May 31, 2025. However, the completion of this transaction is contingent upon various conditions, including stockholder approval and the effectiveness of a registration statement. The company has extended its deadline for completing the business combination multiple times, with the latest extension pushing the date to January 24, 2025. This has resulted in several stockholder redemptions, with approximately $12.14 million withdrawn from the trust account in connection with the May 17, 2024, special meeting.
As of December 31, 2024, ShoulderUP had approximately $5.6 million remaining in its trust account, down from $21.1 million the previous year. The company’s total assets decreased to about $6.02 million, while total liabilities increased to approximately $14.82 million, reflecting a working capital deficit of around $5.5 million. The company has also accrued a liability of $3.42 million related to excise taxes due to stock redemptions, which adds to its financial challenges.
Looking ahead, ShoulderUP's management has expressed concerns regarding its ability to continue as a going concern, given its liquidity issues and the approaching deadline for completing a business combination. The company has indicated that it may need to secure additional financing to meet its obligations and complete the business combination. The management team is actively working to address these challenges, but there is no assurance that they will be successful in securing the necessary funds or completing the business combination as planned.
About ShoulderUP Technology Acquisition Corp.
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