FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 2025
ESH Acquisition Corp. filed its Form 10-Q for the quarter ended September 30, 2025, reporting a net loss of $1.3 million for the three months ended September 30, 2025, compared to a net loss of $1.1 million for the same period in 2024. As of September 30, 2025, the company had cash and cash equivalents of $4.4 million, compared to $5.5 million as of December 31, 2024. The company’s condensed balance sheet as of September 30, 2025, shows total assets of $4.6 million and total liabilities of $1.1 million. The company’s management’s discussion and analysis of financial condition and results of operations notes that the company has not yet generated any revenue and has not yet completed its initial business combination.
Overview
We are a blank check company formed in November 2021 with the purpose of merging with or acquiring one or more businesses. As a blank check company, we have not engaged in any operations or generated any revenue to date. Our activities have been focused on organizational tasks, preparing for our initial public offering (IPO), and identifying potential target companies for a business combination.
Results of Operations
For the three months ended September 30, 2025, we reported a net loss of $802,475, which consisted of $852,868 in operating costs, $24,200 in franchise tax expense, and $13,395 in income tax provision, offset by $87,963 in interest income from investments held in our trust account and $25 in bank interest income.
In comparison, for the three months ended September 30, 2024, we reported net income of $1,059,413, which included $1,588,812 in interest income from our trust account investments, offset by $156,771 in operating costs, $322,628 in income tax provision, and $50,000 in franchise tax expense.
For the nine months ended September 30, 2025, we had a net loss of $2,081,973, which included $2,228,110 in operating costs, $75,600 in franchise tax expense, and $38,945 in income tax provision, partially offset by $260,657 in trust account interest income and $25 in bank interest income.
In the nine-month period ended September 30, 2024, we reported net income of $3,218,561, consisting of $4,724,702 in trust account interest income, offset by $550,758 in operating costs, $804,765 in income tax provision, and $150,618 in franchise tax expense.
Factors That May Adversely Affect our Results of Operations
Our results and ability to complete a business combination could be negatively impacted by various economic factors beyond our control, such as downturns in financial markets, increases in oil prices, inflation, interest rate fluctuations, supply chain disruptions, declines in consumer confidence, and geopolitical instability. We cannot predict the likelihood, duration, or magnitude of these potential events and their impact on our business.
Liquidity, Capital Resources and Going Concern
As of September 30, 2025, we had $135,578 in cash and $409 in restricted cash. We intend to use the funds held outside of our trust account primarily for identifying and evaluating potential target businesses, conducting due diligence, and negotiating and completing a business combination.
Our trust account held $8,548,921 in investments as of September 30, 2025, including $739,129 in interest income. We plan to use substantially all of the funds in the trust account to complete our initial business combination.
We have determined that our liquidity condition and the requirement to liquidate if we do not complete a business combination by December 16, 2025 raise substantial doubt about our ability to continue as a going concern. Our financial statements do not include any adjustments that might result from our inability to continue as a going concern.
Contractual Obligations
We have a $5,000 per month agreement to pay an affiliate for office space, utilities, and administrative services. We also have an agreement to pay the IPO underwriters a marketing fee of 3.5% of the IPO gross proceeds, or $4.03 million, if we complete a business combination with a target introduced by the underwriters.
Critical Accounting Policies and Estimates
We have identified the accounting for our Class A common stock subject to possible redemption as a critical accounting estimate. This stock is classified as temporary equity and measured at fair value in accordance with the guidance in ASC Topic 480.
In summary, our financial performance to date has been characterized by net losses, reliance on our trust account investments for income, and uncertainty around our ability to complete a business combination and continue as a going concern. The key factors that may impact our future results include macroeconomic conditions, our success in identifying and acquiring a suitable target, and our ability to secure the necessary financing.
