SOUL 10-K & 10-Q changes, risk factors and insider trading

For the three months ended MarchJune 31,30, 2026, we had net income of $1,580,333,$1,923,746, which consisted of interest earned on cash held in the Trust Account Accountof $2,300,355 and dividend income of $2,265,236,$740, partially offset by operational costs of $685,558.$318,525 Net cash used in operating activities was $1,420,131, primarily driven by non-cash reconciling adjustments from net income to operating cash flows for theand interest earned on cash held in the Trust Accountexpense of $2,265,236 and was partially offset by changes in operating assets and liabilities.$58,824.

For the threesix months ended MarchJune 31,30, 2025,2026, we had net lossincome of $179,718,$3,504,079, which primarily consisted of generalinterest earned on cash held in the Trust Account of $4,565,591 and administrativedividend costsincome of $179,908 and was$1,395, partially offset by dividendoperational incomecosts of $190.$1,004,083 and interest expense of $58,824. Net cash used in operating activities was $124,218,$2,755,790, primarily driven by non-cash reconciling adjustments from net lossincome to operating cash flows for forthe interest earned on cash held in the Trust Account of $4,565,591 and increase in the amount due from affiliate of $1,756,325 and was partially offset by changes in operating assets and liabilities.

As of MarchJune 31,30, 2026, we had cash held in Trust Account of $259,885,212$262,185,566 and we had cash held outside of the Trust Account available for working working capital purposes of $56,403.$120,744. We intend to use the funds held outside the Trust Account primarily to identify and evaluate target businesses, businesses, perform business due diligence on prospective target businesses, travel to and from the offices, plants or similar locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses, structure, negotiate and complete a Business Combination, and to pay for directors and officers liability insurance premiums.

In order to support the Company’s working capital requirements, in addition to the Working Capital Loans, in February 2026, we enteredissued into two unsecured promissory notes with Soulpower Management LLC (the “Lender”), the sole managing member of the Sponsor. The Lender holds voting and investment discretion with respect to the ordinary shares of the Company held of record by the Sponsor. The sole managing member of the Lender is Soulpower International Corporation which is controlled by Justin Lafazan, the Chief Executive Officer and Chairman of the Board of Directors of the Company. Certain other directors of the Company are also members of the Lender.

On February 19, 2026, we issued an unsecured promissory note in a principal amount of up to $785,000 (the “A Note”), which matures on the earlier of (i) the consummation of the initial business combination or (ii) the liquidation of the Company. The A Note bears a flat-rate interest amount equal to 22% of the principal due at maturity, unless prepaid earlier, and is not convertible into any securities of the Company. As of MayJune 13,30, 2026, we received $745,000 in advances under the A Note with proceeds used for general working capital purposes. In addition, accrued contractual interest under the A Note totaled $58,824 as of June 30, 2026.

On February 19, 2026, we issued an unsecured promissory note in a principal amount of up to $2,500,000 (the “B Note”). Under the terms of the B Note, the outstanding principal balance is automatically and irrevocably forgiven in full upon consummation of the initial business combination, at which time all obligations of the Company under the B Note will be deemed satisfied without further action. If we do not consummate our initial Business Combination, the B NotesNote becomebecomes due upon the earlier of (i) an event of default or or (ii) the liquidation of the Company. The B Note bears no interest and is not convertible into securities of the Company. As of May 13, 2026, we received approximately $2,057,050 in advances under the B Note with proceeds used for general working capital purposes.

We have no obligations, assets or liabilities which would be considered off-balance sheet arrangements as of MarchJune 31,30, 2026. We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements. We have not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any non-financial assets.

We do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities,liabilities. otherOur thancontractual obligations consist primarily of outstanding sponsor loans, including the A Note, B Note, and B2 Note, an agreement agreement to pay an aggregate of $5,000 per month for office space, utilities, and secretarial and administrative support, support.and the deferred underwriting fee payable upon completion of an initial business combination described below.

The preparation of condensed financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and income and expenses during the periods reported. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, actual results could materially differ from those estimates. As of MarchJune 31,30, 2026, we did not have any critical accounting estimates to be disclosed.

ASC Topic 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The Company’s management determined that the Cayman Islands is the Company’s major tax jurisdiction. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. As of MarchJune 31,30, 2026, there were no unrecognized tax benefits and no amounts accrued for interest and penalties. The The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from from its position.