Inception Growth Acquisition Swings to Loss Amidst Declining Trust Assets

TL;DR

**IGTAW is bleeding cash and trust assets, making a successful business combination look increasingly unlikely.**

AI Summary

Inception Growth Acquisition Ltd (IGTAW) reported a net loss of $598,873 for the six months ended June 30, 2025, a significant decline from the net income of $262,120 in the same period of 2024. This shift was primarily driven by a substantial decrease in dividend income, which fell from $798,010 in H1 2024 to $71,249 in H1 2025, and an increase in formation, general, and administrative expenses from $458,343 to $670,122. The company's cash and investments held in its Trust Account decreased from $3,605,750 at December 31, 2024, to $2,138,322 at June 30, 2025, largely due to redemptions. Total assets declined from $3,610,045 to $2,254,885 over the same period. Accrued liabilities increased by $425,501 to $2,235,715, while income tax payable decreased by $81,000 to $194,267. The company continues to operate as a blank check company, seeking a business combination, and has not yet commenced any operations that generate operating revenues.

Why It Matters

This 10-Q filing reveals Inception Growth Acquisition Ltd's deteriorating financial position, marked by a significant net loss and a substantial reduction in its Trust Account. For investors, this signals increased risk and a potential struggle to complete a business combination, which is the SPAC's sole purpose. The decline in trust assets, from $3.6 million to $2.1 million, directly impacts the capital available for a potential merger, making the company less attractive to target businesses and potentially reducing the value for remaining shareholders. Employees and customers are not directly impacted yet, as the company has no operating business, but the broader market may see this as another example of SPACs facing headwinds and struggling to find suitable targets, potentially dampening investor sentiment for similar blank-check companies.

Risk Assessment

Risk Level: high — The company reported a net loss of $598,873 for the six months ended June 30, 2025, a stark contrast to the $262,120 net income in the prior year. Furthermore, cash and investments held in the Trust Account, crucial for a business combination, plummeted from $3,605,750 to $2,138,322, indicating significant redemptions and a reduced pool of capital for a merger.

Analyst Insight

Investors should consider exiting their positions in IGTAW given the substantial net loss, declining Trust Account balance, and the ongoing uncertainty of completing a business combination. The significant redemptions suggest a lack of investor confidence, and the reduced capital makes a successful merger less probable, increasing the risk of liquidation at a lower value.

Financial Highlights

debt To Equity

N/A

revenue

$71,249

operating Margin

N/A

total Assets

$2,254,885

total Debt

$6,874,473

net Income

$ (598,873)

eps

$ (0.23)

gross Margin

N/A

cash Position

$59,063

revenue Growth

-91.1%

Revenue Breakdown

Key Numbers

• $598,873 — Net Loss (For the six months ended June 30, 2025, compared to $262,120 net income in H1 2024.)
• $2,138,322 — Trust Account Balance (As of June 30, 2025, down from $3,605,750 at December 31, 2024.)
• $71,249 — Dividend Income (For the six months ended June 30, 2025, a significant drop from $798,010 in H1 2024.)
• $670,122 — General & Administrative Expense (For the six months ended June 30, 2025, an increase from $458,343 in H1 2024.)
• $4,624,473 — Total Current Liabilities (As of June 30, 2025, up from $4,129,427 at December 31, 2024.)
• 2,814,162 — Shares Outstanding (As of August 19, 2025.)
• $1,238,944 — Cash withdrawn from Trust Account (For redemptions in the six months ended June 30, 2025.)
• $19,036,950 — Cash withdrawn from Trust Account (For redemptions in the six months ended June 30, 2024.)

Key Players & Entities

• Inception Growth Acquisition Limited (company) — Registrant
• Soul Venture Partners LLC (company) — Sponsor of the SPAC
• SEC (regulator) — Securities and Exchange Commission
• EF Hutton, division of Benchmark Investments, LLC (company) — Underwriter for the Initial Public Offering
• $598,873 (dollar_amount) — Net loss for the six months ended June 30, 2025
• $262,120 (dollar_amount) — Net income for the six months ended June 30, 2024
• $2,138,322 (dollar_amount) — Cash and investments held in Trust Account as of June 30, 2025
• $3,605,750 (dollar_amount) — Cash and investments held in Trust Account as of December 31, 2024
• $670,122 (dollar_amount) — Formation, general and administrative expense for the six months ended June 30, 2025
• $71,249 (dollar_amount) — Dividend income for the six months ended June 30, 2025

FAQ

Risk Factors

• Deteriorating Financial Performance [high — financial]: The company reported a net loss of $598,873 for H1 2025, a sharp decline from a net income of $262,120 in H1 2024. This is driven by a substantial drop in dividend income and increased administrative expenses.
• Declining Trust Account Balance [high — financial]: The Trust Account balance decreased from $3,605,750 at December 31, 2024, to $2,138,322 at June 30, 2025, primarily due to redemptions totaling $1,238,944 in H1 2025.
• Lack of Operating Revenue [high — operational]: As a blank check company, Inception Growth Acquisition Ltd has not commenced operations and generates no operating revenues. Its only income is non-operating, such as interest and dividend income.
• Increasing Liabilities [medium — financial]: Total current liabilities increased to $4,624,473 as of June 30, 2025, up from $4,129,427 at December 31, 2024. Accrued liabilities saw a significant jump of $425,501.
• Dependence on Business Combination [high — operational]: The company's existence and future profitability are entirely dependent on successfully completing a business combination, for which no target has been identified.
• High Formation and Administrative Costs [medium — financial]: Formation, general, and administrative expenses increased from $458,343 in H1 2024 to $670,122 in H1 2025, contributing to the net loss.

Industry Context

Inception Growth Acquisition Ltd operates within the Special Purpose Acquisition Company (SPAC) sector. This sector has seen increased regulatory scrutiny and a slowdown in deal-making following a period of rapid growth. SPACs face challenges in identifying suitable targets, completing business combinations within their mandated timelines, and managing shareholder redemptions, which can deplete capital.

Regulatory Implications

As a SPAC, Inception Growth Acquisition Ltd is subject to SEC regulations governing IPOs, disclosures, and business combinations. Changes in accounting standards or regulatory enforcement related to SPACs could impact the company's reporting and operational flexibility.

What Investors Should Do

1. Monitor progress on business combination target identification.
2. Evaluate the impact of ongoing redemptions on the Trust Account.
3. Assess the sustainability of operating expenses relative to potential future revenue.

Key Dates

• 2021-12-13: Initial Public Offering and Private Placement — Raised $103.5 million in public offering and $4.7 million in private placement, establishing the company's capital base and trust account.
• 2025-06-30: End of Q2 2025 — Reported net loss of $598,873 for H1 2025 and a declining Trust Account balance, indicating financial deterioration.

Glossary

Blank Check Company

A shell corporation that is set up to acquire or merge with an existing company. Also known as a Special Purpose Acquisition Company (SPAC). (Inception Growth Acquisition Ltd operates as a blank check company, seeking a business combination.)

Trust Account

An account holding the proceeds from an IPO, typically invested in U.S. government securities, to be used for a business combination or returned to shareholders. (The balance in the Trust Account has significantly decreased due to redemptions.)

Redemption

The act of shareholders requesting their investment back from the Trust Account, usually in the context of a SPAC's IPO or if a business combination is not completed. (Redemptions have significantly reduced the Trust Account balance and impacted the company's cash position.)

Formation, general and administrative expense

Costs incurred in setting up the company and managing its general operations, including legal, accounting, and administrative fees. (These expenses have increased and contributed to the company's net loss.)

Accrued Liabilities

Expenses that have been incurred but not yet paid. (Accrued liabilities have increased significantly, indicating growing obligations.)

Year-Over-Year Comparison

For the six months ended June 30, 2025, Inception Growth Acquisition Ltd has transitioned from a net income of $262,120 in the prior year period to a net loss of $598,873. This dramatic shift is primarily due to a sharp decline in dividend income from $798,010 to $71,249 and an increase in formation, general, and administrative expenses from $458,343 to $670,122. Total assets have fallen from $3,610,045 to $2,254,885, largely driven by redemptions that reduced the Trust Account balance significantly.

Key Financial Figures

• $0.0001 — onsisting of one share of common stock, $0.0001 par value, one-half (1/2) of one redeem
• $11.50 — of common stock at an exercise price of $11.50 IGTAW OTC Markets Group, Inc. Rights,

Filing Documents

• ea0253832-10q_inception.htm (10-Q) — 593KB
• ea025383201ex31-1_inception.htm (EX-31.1) — 11KB
• ea025383201ex31-2_inception.htm (EX-31.2) — 11KB
• ea025383201ex32-1_inception.htm (EX-32.1) — 7KB
• ea025383201ex32-2_inception.htm (EX-32.2) — 6KB
• 0001213900-25-078991.txt ( ) — 4390KB
• igta-20250630.xsd (EX-101.SCH) — 42KB
• igta-20250630_cal.xml (EX-101.CAL) — 25KB
• igta-20250630_def.xml (EX-101.DEF) — 202KB
• igta-20250630_lab.xml (EX-101.LAB) — 340KB
• igta-20250630_pre.xml (EX-101.PRE) — 207KB
• ea0253832-10q_inception_htm.xml (XML) — 490KB

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION F-1 Item 1. Unaudited Condensed Consolidated Financial Statements F-1 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 1 Item 3.

Quantitative and Qualitative Disclosures about Market Risk

Quantitative and Qualitative Disclosures about Market Risk 7 Item 4. Control and Procedures 7

– OTHER INFORMATION

PART II – OTHER INFORMATION 9 Item 1.

Legal Proceedings

Legal Proceedings 9 Item 1A.

Risk Factors

Risk Factors 9 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 9 Item 3. Defaults Upon Senior Securities 9 Item 4. Mine Safety Disclosures 9 Item 5. Other Information 9 Item 6. Exhibits 10

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION INCEPTION GROWTH ACQUISITION LIMITED INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Page Condensed Consolidated Balance Sheets F-2 Unaudited Condensed Consolidated Statements of Operations F-3 Unaudited Condensed Consolidated Statements of Changes in Shareholders' Deficit F-4 Unaudited Condensed Consolidated Statements of Cash Flows F-5 Notes to Unaudited Condensed Consolidated Financial Statements F-6 F-1 INCEPTION GROWTH ACQUISITION LIMITED CONDENSED CONSOLIDATED BALANCE SHEETS June 30, 2025 December 31, 2024 (Unaudited) ASSETS Current assets: Cash $ 59,063 $ 4,295 Prepaid expenses 7,500 - Other receivable 50,000 Total current assets 116,563 4,295 Cash and investments held in Trust Account 2,138,322 3,605,750 TOTAL ASSETS $ 2,254,885 $ 3,610,045 LIABILITIES, TEMPORARY EQUITY AND SHAREHOLDERS' DEFICIT Current liabilities: Accrued liabilities $ 2,235,715 $ 1,810,214 Income tax payable 194,267 275,267 Note payable – related party 1,540,000 1,540,000 Amount due to a related party 654,491 503,946 Total current liabilities 4,624,473 4,129,427 Deferred underwriting compensation 2,250,000 2,250,000 TOTAL LIABILITIES 6,874,473 6,379,427 Commitments and contingencies (Note 8) - - Temporary equity: Common stock, subject to possible redemption: 176,662 and 279,990 shares (at redemption value of $ 12.10 and $ 12.88 per share, respectively) 2,138,322 3,605,750 Shareholders' deficit: Common stock, $ 0.0001 par value; 26,000,000 shares authorized; 2,637,500 shares issued and outstanding (excluding 176,662 and 279,990 shares, subject to possible redemption, respectively) 264 264 Accumulated deficit ( 6,758,174 ) ( 6,375,396 ) Total shareholders' deficit ( 6,757,910 ) ( 6,375,132 ) TOTAL LIABILITIES, TEMPORARY EQUITY AND SHAREHOLDERS' DEFICIT $ 2,254,885 $ 3,610,045 See accompanying notes to unaudited condensed consolidated

financial statements

financial statements. F-2 INCEPTION GROWTH ACQUISITION LIMITED UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS Three Months ended June 30, 2025 Three Months ended June 30, 2024 Six Months ended June 30, 2025 Six Months ended June 30, 2024 Formation, general and administrative expense $ ( 503,808 ) $ ( 203,825 ) $ ( 670,122 ) $ ( 458,343 ) Loss from operations ( 503,808 ) ( 203,825 ) ( 670,122 ) ( 458,343 ) Other income: Dividend income 33,301 377,360 71,249 798,010 Total other income 33,301 377,360 71,249 798,010 (Loss) Income before income taxes ( 470,507 ) 173,535 ( 598,873 ) 339,667 Income tax expense - ( 39,444 ) - ( 77,547 ) NET (LOSS) INCOME $ ( 470,507 ) $ 134,091 $ ( 598,873 ) $ 262,120 Basic and diluted weighted average shares outstanding, common stock subject to possible redemption 251,603 2,580,186 265,718 2,765,539 Basic and diluted net (loss) income per share, common stock subject to possible redemption $ ( 0.04 ) $ 0.10 $ 0.04 $ 0.19 Basic and diluted weighted average shares outstanding, common stock not subject to possible redemption 2,637,500 2,637,500 2,637,500 2,637,500 Basic and diluted net loss per share, common stock not subject to possible redemption $ ( 0.17 ) $ ( 0.05 ) $ ( 0.23 ) $ ( 0.10 ) See accompanying notes to unaudited condensed consolidated

financial statements

financial statements. F-3 INCEPTION GROWTH ACQUISITION LIMITED UNAUDITED CONDENSED CONSOLIDATED Three and Six Months Ended June 30, 2025 Total Common stock Accumulated shareholders' No. of shares Amount deficit deficit Balance as of January 1, 2025 2,637,500 $ 264 $ ( 6,375,396 ) $ ( 6,375,132 ) Accretion of carrying value to redemption value - - ( 71,547 ) ( 71,547 ) Net loss - - ( 128,366 ) ( 128,366 ) Balance as of March 31, 2025 2,637,500 $ 264 $ ( 6,575,309 ) $ ( 6,575,045 ) Accretion of carrying value to redemption value - - 300,031 300,031 Excise tax payable attributable to redemption of common stock - - ( 12,389 ) ( 12,389 ) Net loss - - ( 470,507 ) ( 470,507 ) Balance as of June 30, 2025 2,637,500 $ 264 $ ( 6,758,174 ) $ ( 6,757,910 ) Three and Six Months Ended June 30, 2024 Total Common stock Accumulated shareholders' No. of shares Amount deficit deficit Balance as of January 1, 2024 2,637,500 $ 264 $ ( 4,235,708 ) $ ( 4,235,444 ) Accretion of carrying value to redemption value - - ( 720,650 ) ( 720,650 ) Net income - - 128,029 128,029 Balance as of March 31, 2024 2,637,500 $ 264 $ ( 4,828,329 ) $ ( 4,828,065 ) Accretion of carrying value to redemption value - - ( 627,360 ) ( 627,360 ) Excise tax payable attributable to redemption of common stock - - ( 190,370 ) ( 190,370 ) Net income - - 134,091 134,091 Balance as of June 30, 2024 2,637,500 $ 264 $ ( 5,511,968 ) $ ( 5,511,704 ) See accompanying notes to unaudited condensed consolidated

financial statements

financial statements. F-4 INCEPTION GROWTH ACQUISITION LIMITED UNAUDITED CONDENSED CONSOLIDATED Six Months Ended June 30, 2025 Six Months Ended June 30, 2024 Cash flows from operating activities Net (loss) income $ ( 598,873 ) $ 262,120 Adjustments to reconcile net (loss) income to net cash used in operating activities Interest income and dividend income earned in cash and investments held in Trust Account ( 71,249 ) ( 798,010 ) Changes in operating assets and liabilities: Prepaid expenses ( 7,500 ) ( 40,500 ) Other receivables ( 50,000 ) ( 12,500 ) Accrued liabilities 413,112 ( 47,752 ) Income tax payable ( 81,000 ) ( 54,628 ) Net cash used in operating activities ( 395,510 ) ( 691,270 ) Cash flows from investing activities Cash withdrawn from Trust Account in connection to redemption 1,238,944 19,036,950 Cash withdrawn from Trust Account 368,981 - Extension payments deposited in Trust Account ( 69,248 ) ( 550,000 ) Net cash provided by investing activities 1,538,677 18,486,950 Cash flows from financing activities Redemption of common stock ( 1,238,944 ) ( 19,036,950 ) Proceeds from promissory note – related party - 1,030,000 Advance from a related party 150,545 234,493 Net cash used in financing activities ( 1,088,399 ) ( 17,772,457 ) NET CHANGE IN CASH 54,768 23,223 Cash, beginning of year 4,295 60,440 Cash, end of year $ 59,063 $ 83,663 SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING ACTIVITIES: Accretion of carrying value to redemption value $ 228,484 $ ( 1,348,010 ) Excise tax payable attributable to redemption of common stock $ 12,389 $ 190,370 See accompanying notes to unaudited condensed consolidated

financial statements

financial statements. F-5 INCEPTION GROWTH ACQUISITION LIMITED NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS NOTE 1 – ORGANIZATION AND BUSINESS BACKGROUND Inception Growth Acquisition Limited (the "Company") is a blank check company incorporated on March 4, 2021, under the laws of the State of Delaware for the purpose of acquiring, engaging in a share exchange, share reconstruction and amalgamation, purchasing all or substantially all of the assets of, entering into contractual arrangements, or engaging in any other similar business combination with one or more businesses or entities ("Business Combination"). Although the Company is not limited to a particular industry or geographic region for purposes of consummating a Business Combination, the Company intends to focus on businesses that have a connection to the Asian market and shall not undertake an initial business combination with any entity with its principal business operations in China (including Hong Kong and Macau). The Company is an early stage and emerging growth company and, as such, the Company is subject to all of the risks associated with early stage and emerging growth companies. The Company has selected December 31 as its fiscal year end. At June 30, 2025, the Company had not yet commenced any operations. All activities through June 30, 2025 relate to the Company's formation and the initial public offering (the "Initial Public Offering") and the evaluation of Business Combination candidates. The Company will not generate any operating revenues until after the completion of a Business Combination, at the earliest. The Company will generate non-operating income in the form of interest income from the proceeds derived from the Initial Public Offering. Financing The registration statement for the Company's Initial Public Offering became effective on December 8, 2021. On December 13, 2021, the Company consummated the Initial Public Offering of 10,350,000 ordinary units (the

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