Inception Growth Acquisition Posts Deepening Losses Amid Trust Account Shrinkage

TL;DR

**IGTAW is bleeding cash and its trust is shrinking, making a successful SPAC merger look increasingly unlikely.**

AI Summary

Inception Growth Acquisition Ltd (IGTAW) reported a net loss of $267,913 for the three months ended September 30, 2025, a significant decline from a net income of $814 in the same period of 2024. For the nine months ended September 30, 2025, the company posted a net loss of $866,786, a stark contrast to the net income of $262,934 reported for the nine months ended September 30, 2024. This deterioration is primarily due to increased formation, general, and administrative expenses, which rose to $960,607 for the nine months ended September 30, 2025, from $667,558 in the prior year, and a substantial decrease in dividend income from $985,835 to $93,821 over the same nine-month period. Cash and investments held in the Trust Account decreased from $3,605,750 at December 31, 2024, to $2,200,644 at September 30, 2025, reflecting redemptions. Total liabilities increased to $7,152,818 from $6,379,427, driven by higher accrued liabilities and related party payables. The company continues to operate as a blank check company, with no operating revenues, focusing solely on identifying a Business Combination, and faces risks associated with its early-stage nature and the ability to complete a Business Combination.

Why It Matters

This 10-Q filing reveals Inception Growth Acquisition Ltd's (IGTAW) deteriorating financial health, marked by significant net losses and a shrinking Trust Account. For investors, this signals increased risk regarding the company's ability to successfully complete a Business Combination, which is its sole purpose. The substantial redemptions and related party transactions could raise questions about governance and the long-term viability of the SPAC. Competitively, a smaller Trust Account and ongoing losses make IGTAW less attractive as a merger partner compared to other SPACs with more robust capital. Employees and customers are not directly impacted yet, as the company has no operations, but the market may view this as a distressed SPAC, potentially affecting its ability to attract a suitable target.

Risk Assessment

Risk Level: high — The company reported a net loss of $866,786 for the nine months ended September 30, 2025, a significant decline from a net income of $262,934 in the prior year. Cash and investments held in the Trust Account decreased by over $1.4 million, from $3,605,750 at December 31, 2024, to $2,200,644 at September 30, 2025, indicating substantial redemptions and a reduced pool for a Business Combination. The accumulated deficit also grew to $7,088,409, highlighting ongoing financial strain.

Analyst Insight

Investors should consider divesting from IGTAW due to the significant net losses, shrinking Trust Account, and increasing liabilities, which collectively signal a high risk of failure to complete a Business Combination. The declining dividend income and reliance on related party financing further underscore the precarious financial position.

Financial Highlights

debt To Equity

N/A

revenue

$0

operating Margin

N/A

total Assets

$ 2,265,317

total Debt

$ 7,152,818

net Income

$ (866,786)

eps

$ (0.33)

gross Margin

N/A

cash Position

$ 9,063

revenue Growth

N/A

Key Numbers

• $866,786 — Net Loss (For the nine months ended September 30, 2025, a significant increase from a net income of $262,934 in the prior year.)
• $2,200,644 — Cash in Trust Account (As of September 30, 2025, down from $3,605,750 at December 31, 2024, indicating substantial redemptions.)
• $7,088,409 — Accumulated Deficit (As of September 30, 2025, worsening from $6,375,396 at December 31, 2024.)
• $960,607 — General and Administrative Expense (For the nine months ended September 30, 2025, up from $667,558 in the prior year.)
• $93,821 — Dividend Income (For the nine months ended September 30, 2025, a sharp decrease from $985,835 in the prior year.)
• $1,238,944 — Cash withdrawn from Trust Account (In connection to redemption for the nine months ended September 30, 2025, reflecting significant shareholder redemptions.)
• $1,540,000 — Note payable – related party (Outstanding as of September 30, 2025, indicating reliance on related party financing.)
• $924,240 — Amount due to a related party (As of September 30, 2025, an increase from $503,946 at December 31, 2024.)

Key Players & Entities

• Inception Growth Acquisition Limited (company) — Registrant and blank check company
• Soul Venture Partners LLC (company) — Sponsor of Inception Growth Acquisition Limited
• EF Hutton (company) — Underwriter for the Initial Public Offering
• The Nasdaq Stock Market LLC (regulator) — Exchange where IGTAW securities are registered
• $267,913 (dollar_amount) — Net loss for three months ended September 30, 2025
• $866,786 (dollar_amount) — Net loss for nine months ended September 30, 2025
• $2,200,644 (dollar_amount) — Cash and investments in Trust Account as of September 30, 2025
• $7,152,818 (dollar_amount) — Total liabilities as of September 30, 2025
• $1,540,000 (dollar_amount) — Note payable to related party as of September 30, 2025
• $924,240 (dollar_amount) — Amount due to a related party as of September 30, 2025

FAQ

Risk Factors

• Lack of Operating History and Revenue [high — operational]: The Company is an early-stage blank check company with no operating history or revenues as of September 30, 2025. It will not generate operating revenues until after a Business Combination is completed, exposing it to risks inherent in early-stage ventures.
• Deteriorating Financial Performance [high — financial]: The Company reported a net loss of $866,786 for the nine months ended September 30, 2025, a significant decline from a net income of $262,934 in the prior year. This is driven by a substantial decrease in dividend income from $985,835 to $93,821 and increased formation, general, and administrative expenses to $960,607.
• Declining Trust Account Balance [high — financial]: Cash and investments in the Trust Account decreased from $3,605,750 at December 31, 2024, to $2,200,644 at September 30, 2025. This reduction is primarily due to shareholder redemptions totaling $1,238,944 for the nine months ended September 30, 2025.
• Increasing Liabilities and Related Party Dependence [medium — financial]: Total liabilities increased to $7,152,818 from $6,379,427, driven by higher accrued liabilities and related party payables. The company has a significant Note payable – related party of $1,540,000 and an Amount due to a related party of $924,240.
• Dependence on Completing a Business Combination [high — operational]: The Company's sole purpose is to identify and complete a Business Combination. Failure to do so within the specified timeframe could result in dissolution and liquidation, impacting investor returns.
• Focus on Asian Market with Restrictions [medium — market]: While not limited to a specific industry, the Company intends to focus on businesses with a connection to the Asian market but will not pursue entities with principal business operations in China (including Hong Kong and Macau). This narrows the potential target pool.

Industry Context

As a blank check company (SPAC), Inception Growth Acquisition Ltd operates in a unique segment of the financial industry focused on facilitating mergers and acquisitions. The industry is characterized by a race against time to identify and complete a target acquisition before the SPAC's deadline. Success is heavily dependent on the management team's ability to source viable targets and secure shareholder approval for a business combination.

Regulatory Implications

Blank check companies are subject to SEC regulations and disclosure requirements. The significant redemptions and increasing liabilities highlight potential financial risks that could attract regulatory scrutiny. The company's focus on the Asian market, with specific exclusions, may also involve navigating varying international regulatory landscapes.

What Investors Should Do

1. Monitor Trust Account Balance
2. Evaluate Management's Ability to Identify a Viable Business Combination
3. Analyze Expense Structure
4. Assess Related Party Transactions

Key Dates

• 2021-12-13: Initial Public Offering and Private Placement — The company raised $103,500,000 from the IPO and $4,721,250 from the private placement, establishing the initial capital for operations and trust account.
• 2025-09-30: Quarterly Financial Statement Date — Represents the period for which the unaudited condensed consolidated financial statements are presented, showing a net loss of $267,913 for the quarter and a significant decrease in cash and investments in the Trust Account.

Glossary

Blank Check Company

A shell corporation that is established to raise capital through an initial public offering (IPO) for the purpose of acquiring an existing company. (Inception Growth Acquisition Ltd is a blank check company whose sole purpose is to find and merge with another company.)

Trust Account

An account where funds raised from an IPO are held in trust, typically invested in U.S. government securities, until a business combination is completed or the company liquidates. (The balance in the Trust Account ($2,200,644 as of Sept 30, 2025) is a critical indicator of the company's remaining capital and potential for redemptions.)

Business Combination

The merger, share exchange, asset acquisition, or other similar transaction that a special purpose acquisition company (SPAC) or blank check company seeks to complete. (The company's entire strategy revolves around identifying and executing a Business Combination.)

Accumulated Deficit

The total cumulative net losses of a company that have not been offset by net income. (The accumulated deficit has grown to $7,088,409 as of September 30, 2025, reflecting the company's operational losses.)

Redemption

The process by which shareholders of a SPAC can elect to have their shares redeemed for cash, typically at the IPO price, if a business combination is not completed or if they do not approve of a proposed combination. (Significant redemptions, totaling $1,238,944 for the nine months ended Sept 30, 2025, have depleted the Trust Account.)

Year-Over-Year Comparison

Compared to the prior year, Inception Growth Acquisition Ltd has experienced a significant financial downturn. For the nine months ended September 30, 2025, the company reported a net loss of $866,786, a stark contrast to the net income of $262,934 in the same period of 2024. This deterioration is primarily driven by a substantial decrease in dividend income from $985,835 to $93,821 and an increase in formation, general, and administrative expenses from $667,558 to $960,607. The cash position in the Trust Account has also significantly decreased from $3,605,750 to $2,200,644, reflecting increased redemptions.

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 The Nasdaq Stock Market LLC Righ

Filing Documents

• ea0265467-10q_inception.htm (10-Q) — 618KB
• ea026546701ex31-1_inception.htm (EX-31.1) — 10KB
• ea026546701ex31-2_inception.htm (EX-31.2) — 10KB
• ea026546701ex32-1_inception.htm (EX-32.1) — 4KB
• ea026546701ex32-2_inception.htm (EX-32.2) — 4KB
• 0001213900-25-112343.txt ( ) — 4490KB
• igta-20250930.xsd (EX-101.SCH) — 43KB
• igta-20250930_cal.xml (EX-101.CAL) — 27KB
• igta-20250930_def.xml (EX-101.DEF) — 204KB
• igta-20250930_lab.xml (EX-101.LAB) — 344KB
• igta-20250930_pre.xml (EX-101.PRE) — 209KB
• ea0265467-10q_inception_htm.xml (XML) — 509KB

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION F-1 Item 1. Unaudited Condensed Consolidated Financial Statements 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 8

– 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 10 Item 4. Mine Safety Disclosures 10 Item 5. Other Information 10 Item 6. Exhibits 10

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION INCEPTION GROWTH ACQUISITION LIMITED INDEX TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL 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 September 30, 2025 December 31, 2024 (Unaudited) ASSETS Current assets: Cash $ 9,063 $ 4,295 Prepaid expenses 5,610 - Other receivable 50,000 - Total current assets 64,673 4,295 Cash and investments held in Trust Account 2,200,644 3,605,750 TOTAL ASSETS $ 2,265,317 $ 3,610,045 LIABILITIES, TEMPORARY EQUITY AND SHAREHOLDERS' DEFICIT Current liabilities: Accrued liabilities $ 1,891,811 $ 1,810,214 Other payable – related party 352,500 - Income tax payable 194,267 275,267 Note payable – related party 1,540,000 1,540,000 Amount due to a related party 924,240 503,946 Total current liabilities 4,902,818 4,129,427 Deferred underwriting compensation 2,250,000 2,250,000 TOTAL LIABILITIES 7,152,818 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 $ 12.46 and $ 12.88 per share, respectively) 2,200,644 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 ( 7,088,409 ) ( 6,375,396 ) Total shareholders' deficit ( 7,088,145 ) ( 6,375,132 ) TOTAL LIABILITIES, TEMPORARY EQUITY AND SHAREHOLDERS' DEFICIT $ 2,265,317 $ 3,610,045 See

financial statements

financial statements. F-2 INCEPTION GROWTH ACQUISITION LIMITED UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS Three Months ended September 30, 2025 Three Months ended September 30, 2024 Nine Months ended September 30, 2025 Nine Months ended September 30, 2024 Formation, general and administrative expense $ ( 290,485 ) $ ( 209,215 ) $ ( 960,607 ) $ ( 667,558 ) Loss from operations ( 290,485 ) ( 209,215 ) ( 960,607 ) ( 667,558 ) Other income: Dividend income 22,572 187,825 93,821 985,835 Total other income 22,572 187,825 93,821 985,835 (Loss) Income before income taxes ( 267,913 ) ( 21,390 ) ( 866,786 ) 318,277 Income tax expense - 22,204 - ( 55,343 ) NET (LOSS) INCOME $ ( 267,913 ) $ 814 $ ( 866,786 ) $ 262,934 Basic and diluted weighted average shares outstanding, common stock subject to possible redemption 176,662 1,264,184 235,707 2,261,434 Basic and diluted net income per share, common stock subject to possible redemption $ 0.02 $ 0.10 $ 0.06 $ 0.29 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 $ ( 0.10 ) $ ( 0.05 ) $ ( 0.33 ) $ ( 0.15 ) See accompanying notes to unaudited condensed consolidated

financial statements

financial statements. F-3 INCEPTION GROWTH ACQUISITION LIMITED UNAUDITED CONDENSED CONSOLIDATED Three and Nine Months Ended September 30, 2025 Common stock Total No. of shares Amount Accumulated deficit shareholders' 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 ) Accretion of carrying value to redemption value - - ( 62,322 ) ( 62,322 ) Net loss - - ( 267,913 ) ( 267,913 ) Balance as of September 30, 2025 2,637,500 $ 264 $ ( 7,088,409 ) $ ( 7,088,145 ) Three and Nine Months Ended September 30, 2024 Common stock Total No. of shares Amount Accumulated deficit shareholders' 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 ) Accretion of carrying value to redemption value - - ( 337,825 ) ( 337,825 ) Net income - - 814 814 Balance as of September 30, 2024 2,637,500 $ 264 $ ( 5,848,979 ) $ ( 5,848,7

financial statements

financial statements. F-4 INCEPTION GROWTH ACQUISITION LIMITED UNAUDITED CONDENSED CONSOLIDATED Nine Months Ended September 30, 2025 Nine Months Ended September 30, 2024 Cash flows from operating activities Net (loss) income $ ( 866,786 ) $ 262,934 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 ( 93,821 ) ( 985,835 ) Changes in operating assets and liabilities: Prepaid expenses ( 5,610 ) ( 20,250 ) Other receivable 50,000 - Accrued liabilities 69,208 ( 17,455 ) Income tax payable ( 81,000 ) ( 76,832 ) Net cash used in operating activities ( 928,009 ) ( 837,438 ) 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 issued to pay taxes 318,981 - Cash withdrawn from Trust Account for dissolution expenses ( 50,000 ) - Extension payments deposited in Trust Account ( 108,998 ) ( 700,000 ) Net cash provided by investing activities 1,398,927 18,336,950 Cash flows from financing activities Redemption of common stock ( 1,238,944 ) ( 19,036,950 ) Proceeds from promissory note – related party - 1,400,000 Proceeds from other payable – related party 352,500 - Advance from a related party 420,294 88,293 Net cash used in financing activities ( 466,150 ) ( 17,548,657 ) NET CHANGE IN CASH 4,768 ( 49,145 ) Cash, beginning of period 4,295 60,440 Cash, end of period $ 9,063 $ 11,295 SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING ACTIVITIES: Accretion of carrying value to redemption value $ 166,162 $ ( 1,685,835 ) 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 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 September 30, 2025, the Company had not yet commenced any operations. All activities through September 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

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