ShoulderUp Technology Acquisition Corp. Reports Significant Net Loss and Decline in Assets for September 2024

ShoulderUp Technology Acquisition Corp. reported a net loss of approximately $298,188 for the three months ended September 30, 2024, compared to a net income of $73,099 for the same period in 2023. For the nine months ended September 30, 2024, the company recorded a net loss of $912,966, a significant decline from the net income of $3,278,853 reported in the prior year. The losses were primarily attributed to general and administrative expenses totaling $205,625 for the quarter and $896,987 for the nine-month period, alongside a change in the fair value of derivative liabilities amounting to $164,267 and $435,947, respectively.

The company experienced a notable decrease in total assets, which fell to $9.6 million as of September 30, 2024, down from $21.5 million at the end of 2023. This decline was largely due to a reduction in cash held in the Trust Account, which decreased from $21.1 million to $9.4 million over the same period. Current liabilities also increased, rising to $5 million from $4.2 million, driven by higher accounts payable and excise tax liabilities. The stockholders' deficit improved slightly, decreasing from $21.6 million to $13 million, reflecting a reduction in the redemption value of Class A common stock subject to possible redemption.

In terms of strategic developments, ShoulderUp has been actively pursuing a business combination. The company entered into a non-binding letter of intent for a potential merger with Airspace Experience Technologies, Inc., although this was later terminated. The company has also extended the deadline for completing a business combination multiple times, with the latest extension pushing the deadline to November 19, 2024. As of September 30, 2024, the company had approximately $9.3 million remaining in its Trust Account after several rounds of stockholder redemptions.

Operationally, the company has faced challenges in maintaining liquidity, with a working capital deficit of approximately $4.8 million as of the end of September 2024. The company has relied on working capital loans from its sponsor to meet its financial obligations. As of the reporting date, the company had $192,363 in its operating account, which is insufficient to cover its liabilities. The company has indicated that it intends to complete a business combination before the mandatory liquidation date, but there are substantial doubts about its ability to continue as a going concern.

Looking ahead, ShoulderUp Technology Acquisition Corp. is focused on identifying and completing a business combination. The company has indicated that it will utilize funds outside of the Trust Account for operational expenses and to facilitate the merger process. However, the ongoing liquidity issues and the need for additional financing raise concerns about the company's future viability. The management has acknowledged the challenges and is actively working to address them while seeking to finalize a business combination that aligns with its strategic objectives.